City to explore bringing solid waste collection in

The city of Cape Coral opened discussion Wednesday as to whether it should bring the collection of trash and garbage in-house instead of continuing to contract for the service.

Lack of a potential cost saving made reception to the change tepid among some members of the Cape Coral City Council but, looking long term, others, including Mayor John Gunter, see a benefit.

“The big elephant is where are we going to be in three years,” he said. “Historically the problems that we have with relying on a contractor, we have very little control. If there are some control mechanisms in place, such as process to get things done, more control, better service. If you look over a 30-year period, I think we will be better off in the long run, especially when you think of the type of service providing to the community. We are going to be paying for it either way.”

Others weighed benefit-cost differently.

“For me, personally, you look at this holistically and you see the numbers handled in-house and market, at best, is a wash. You pay the same regardless if we move it in-house and handle the logisticals and day-to-day maintenance. You can pay the same and have that be someone else’s problem,” Councilmember Keith Long said.

That sentiment was reiterated by other council members.

“If it doesn’t save our citizens money, I think all the moving parts that we become responsible for, I don’t think the juice is worth squeezing at that point,” Councilmember Bill Steinke said.

Councilmember Jessica Cosden agreed that if the cost between the two options is a wash it does not make sense to go through a huge amount of trouble to make the change.

Cosden said more information is needed.

“Time is an issue. It would be ideal to make the decision now, but we need more information. Hopefully we can get that soon because this is a big decision.”

Interim City Manager Michael Ilczyszyn said when the contract with WastePro is expected to expire, they wanted to see if there was any level of interest to have solid waste collected by a city department, rather than contracted to a private form. He said Council wanted to consider the in-house option, that would require the city to design a facility, staff it, and get the items needed to run it.

If the Council chooses to go in-house, Ilczyszyn said they have a lot more work to do, as they need to have an entry level discussion.

“Do you all want to have a trash facility in the city of Cape Coral? All of those trucks rolling out into the Cape and stored in the Cape our residents are going to see every day?” he said, asking if it is something they want in their city for the next 30 years. “Are you comfortable with those types of discussions?”

Other points of discussion will also revolve around having a facility on Burnt Store Road on 319 acres the city has, or buying additional land and taking it off the tax roll.

In-house $30 fee a month

Sara Neely, a consultant with Raftelis provided Council with a presentation that highlighted various costs with facilities, labor, equipment and vehicles, operating supplies, maintenance and contingency. She said they revised the level of service to make sure they did not account for any overtime, as well as updated inflation to make sure costs are up to date and extended the model to 20 years.

Part of the key assumptions was the level of service comparison, which Neely said was not really an apples-to-apples comparison. They proposed a $30 in-house fee, which would be held for eight years to recover the life cycle costs. The fee would be monthly.

“Our WastePro contract is probably going to be up in three years. We are reaping the benefits of what we are paying now,” Mayor John Gunter said, adding that the market today is close to double of what they are paying. “I would really like to see that analysis compared to where we are today because we know we are way behind of what we should be paying.”

Ilczyszyn said regardless of where the city sits right now with the contract, the market is at $20 to $25 for fees.

“The market is going to continue to grow to $30 in three years,” he said.

Solid Waste Manager Terry Schweitzer said right now the CPI is $13.29 for 2023 with the market rate sitting at $25.26. He said the variance to market for in-house is $4.74.

“The projected out market rate at 6.12 percent increase, which by 2027, would be $32.05. WastePro might make it to $16.04 at that point we would be pretty close to what the market rate would be,” Schweitzer said.

Gunter said they are probably pretty fortunate to be in the position that they are in currently.

Collection, routes, facilities, vehicles

As far as collection days, the in-house model mirrored a five-day operation at eight hours per day per employee. For the contractor, it is 10 hours per day per employee for five collection days.

As far as routes, the estimate would be 22 in house for MSW, compared to contractor 16; 19 for recycling compared to 14 routes; 21 for horticulture compared to 15 and eight for bulk, compared to six for the contractor.

For facilities, a capital allowance was assumed to acquire and construct the necessary facilities needed for operations, which includes $10 million for residential vehicle operations and maintenance facility and $2.8 for commercial storage and maintenance facility.

There would be a need of 76 residential vehicles, which range in cost from $375,000 for an automatic side loader to $230,000 for a rear end loader.

A total startup estimate was not provided.

Maintenance and insurance costs for the vehicles were also discussed. Neely said if you pay $375,000 in the first year for insurance and maintenance on an automatic side loader, you would assume about $11,270.

“If you look further into year eight you would be assuming about $26,000 per year in maintenance for that vehicle and that would be to replace hydraulics, much larger planned maintenance,” she said.

Schweitzer said it takes anywhere from 12 to 18 months to get equipment, which would put the project into 2026 at the earliest.

“We have to design a facility, not in the current building design of the new public works facility,” he said, which would have to look at when the city is fully populated at 400,000 people.

That would have to go through a design firm before it is built.

Labor

Neely said the largest component of the cost component is labor, as it includes benefits and no overtime assumed. They broke it out in indirect staff, which are directors, managers, supervisors and customer service representatives, and direct staff such as drivers and loaders operating trucks on routes.

Indirect staff would be one director, one manager and then 16 for residential and seven for commercial.

The direct staff would include 99 for residential and 18 for commercial, which broken down would be 70 drivers and 29 loaders for residential and 14 drivers and four loaders for commercial.

“Fifty-six percent of the $30 estimated fee is labor costs and the largest cost,” Neely said.

Time needed to bring operations in house

The question came up of how long it would take to bring the operation in house when the WastePro contract ends.

“We are probably looking at three years,” Schweitzer said. “Next year the decision would have to be made. One of the biggest challenges with a timeline, but also not only starting up service and continue service, is staffing.”

The challenge comes with drivers. He said some municipalities are reducing their line of service because they do not have enough staff and drivers.

Cosden asked at what point would the city go out for the next potential vendor.

Schweitzer said at a minimum, they need to start looking at it in 2025 to develop a request for proposals.

“We would need to give them plenty of time to gear up if we went to another successful contractor. We are looking at 2025 to really start the process,” he said as the city needs to rewrite the bid specs because the current contract is from 2010.

Councilmember Dan Sheppard said it would cost the city slightly more than a private company to operate, but the other part of the equation is to protect their citizens and make sure they have good service all of the time.

“If it does go out to contract (with the) size of the city, how many companies really have the ability to bid our city?” he said.

If it is a very small number of companies, that leaves the city vulnerable because vendors know they have them and can charge more, he added.

“If dealing with a monopoly, I am for doing it in-house because we are protecting our city,” Sheppard said.

Schweitzer said off the top of his head there are probably a half a dozen companies that could accommodate a service area as large as the Cape’s.

“Service has always been my driving factor. It is a service industry and the service has to be there. Whatever needs to be done to get the service, that is what it needs to be. Municipality is not driven by profit. We want to provide the service. As a city we are out there to provide the service. It is the most important foundation of the whole process,” he said.

Sheppard said by doing it in-house the city would have more control over the service, while keeping the money in the city and adding workforce to the city.

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