City reconsiders privatizing garbage pick-up
New plan is to find out if private contractors can pick up commercial trash for less
The City of Iqaluit is doing some comparison shopping, checking out the costs of delivering municipal services and seeing if it’s cheaper to contract some of that work out to private businesses.
On Aug. 20, city councillors, city administrators and municipal workers met with three private companies to get a better picture of how privatizing municipal services such as water delivery and garbage pick-up could benefit the city.
The hot topic of those discussions was whether getting out of providing some of those services could save the cash-strapped city a lot of money.
Rick Butler, chief administrative officer for the City of Iqaluit, said the city needs to figure out ways to keep its operation costs down to a minimum.
Right now, when the city provides water, sewer and garbage services, it has to pay for everything from maintenance of the trucks to the workers’ salaries. City administration and council have batted around the idea of turning to local contracting firms to take on the work, cutting the costs to the city.
Last August, the city attempted just that.
It put out a call to local businesses to bid on garbage collection. Picking up garbage from residences and businesses costs the city about $194,000 a year.
The city wanted to see if local contractors could provide the service at a lower cost. But the cost turned out to be much more than the city anticipated. Contractors wanted anywhere from $717,000 to $811,000 to pick up garbage.
So the city scrapped the idea.
“We thought that we’ve got the trucks anyway, we’ve got the people and we’re running it for $190,000, why would we suddenly jump to paying $700,000 or $900,000?” Butler said.
But now, the city is willing to look again at getting out of garbage pick-up.
“It appeared to us that it was too expensive, but maybe they’ll show us how it isn’t,” Butler said.
This time, the focus isn’t on contracting out the entire garbage service, just garbage pick-up from businesses around town.
A consultants’ report, released to council earlier this year, recommended the city get out of commercial garbage pick-up.
The Public Works Capacity Review, conducted by Pommen Group consultants, pointed out the city doesn’t have the equipment needed to efficiently handle commercial waste, and should consider privatizing the service. “The advantage to the city is that it reduces the cost of providing the service and reduces its liability,” the report says.
Moreover, Iqaluit businesses have been saying for years that they could take care of their own garbage.
“They’re saying ‘Gee, we can maybe just do our own garbage, thank you very much. Forget us paying anybody, we’ll just look after it ourselves,’” Butler said.
The Iqaluit Chamber of Commerce, which is made up of about 40 businesses in the city, is eager to see garbage pick-up privatized.
“It’s not a service the city is required to provide. I’m sure there are contractors in Iqaluit that would step into the marketplace,” said the chamber’s president, Steve Cook. “We’re encouraged when the municipal government takes positive and proactive steps to make room for private enterprise.”
But giving up the commercial garbage service might not be the best move for the city, Butler said. That’s because the city makes money on it — about $120,000 a year — by charging businesses a service fee.
Council plans to meet again with the chamber to discuss different options for garbage pick-up.