Contracts to run through end of 2016
Mayor Mitch Landrieu has struck a grand bargain with New Orleans’ two main trash haulers, dropping a heated dispute over how many houses they actually collect from in return for more or less locking in the current annual cost of curbside pickup for the next few years.
The mayor has stopped pursuing the argument that Metro Disposal and Richard’s Disposal, which are paid on the basis of how many addresses they collect from, have been overcounting households. In return, the companies have agreed to basically stick with that disputed count, which dates from 2011, through the end of 2016.
The administration is betting the city’s population will continue to grow while the cost of trash pickup — still more than the mayor would like — will remain almost flat, representing a relatively stable figure in a budget that has otherwise been under assault from ballooning and sometimes unpredictable expenses.
The garbage contracts are among the city’s biggest, taking up about 5 percent of the annual operating budget.
“As long as New Orleans continues to be the fastest growing city in America, which it has been for the past few years, and we fix those house counts, this is a very favorable agreement,” Deputy Mayor Andy Kopplin said in presenting the details Tuesday to the City Council’s Sanitation Committee.
The companies will continue to roughly split most of the city’s trash collection work down the middle at a cost of about $108 million spread over four years, from 2013 through 2016.
That’s slightly less per year than the combined annual cost last year — $27 million instead of about $27.8 million.
The one hitch is that Landrieu also has agreed to give the companies what they said they should have been earning for the past three years. Taking issue with the household count from 2011, the companies said the city has been shortchanging them by about $1.6 million annually.
The city has handed over that amount for 2011, 2012 and 2013.
The agreement at least temporarily defuses one of the many battles that Landrieu has been fighting as he tries to hold the city’s tenuous budget together.
This week he also reached a deal with Sheriff Marlin Gusman over how much the city will pay for local jail projects this year — about $1.9 million, though next year’s bill for the jail will be another fight. Meanwhile, the city awaits a court ruling on whether it will have to cough up many more millions of dollars for the firefighters’ pension fund.
It was not immediately clear, however, why City Hall decided to announce the news about the trash contracts this week.
The terms of both deals were spelled out in contract amendments signed back in July, according to publicly available records. In an email, Landrieu spokesman Tyler Gamble said a news release went out Tuesday to coincide with the Sanitation Committee meeting.
In any case, it arrived just as the City Council prepares for a series of hearings, starting Wednesday, on Landrieu’s proposed budget for 2014.
Richard’s Disposal has agreed to a rate of $17.99 a month per household, using a household count of 69,001, through 2016. Metro will get $15.99 per household, using a count of 61,828, through 2014 with slight increases after that, going up to 63,683 in 2015 and 65,593 in 2016.
The city said it agreed to the increase in Metro’s case because it expects greater population increases in that company’s territory.
The mayor could have decided to rebid the trash contracts or conduct another household count to try to get a better figure. But officials said they figured that either of those courses would likely have cost the city more, adding that Inspector General Ed Quatrevaux reviewed their analysis and agreed with their basic assumptions.
Quatrevaux confirmed he did agree that extending the existing contracts would likely be the best way to go, but he noted that his office did not review in detail the final agreements with Metro and Richard’s and couldn’t comment on whether the city is getting a fair price.
Left unresolved is the city’s third trash contract, with Progressive Waste Solutions.
It covers only the French Quarter and Central Business District and should amount to about $3.8 million this year, but it expires on Dec. 31. Gamble said the city is still negotiating for a one-year extension.
Editor’s note: This story was updated on Oct. 23 to reflect the correct household count that Metro Disposal and Richard’s Disposal have agreed to charge the city for through 2016.