Trash contract price raise built up
Posted by Greg Ellison
(Jan. 7, 2021) Annual garbage service costs in Ocean Pines are expected to increase by nearly $ 50 a year after the board of directors unanimously voted to extend its contract with current provider Republic Services last month.
During the board meeting on December 19, the directors renewed a three-year contract with Republic Services that would increase the monthly fees for twice-weekly garbage disposal and once-weekly recycling pickup from $ 20.27 to $ 24.20.
General Manager John Viola said the rate hike has increased in recent years as the republic was limited to a maximum price hike of 3 percent per year under its 2017 contract.
“We would have gotten an increase two years ago but because we had a contract people didn’t see an escalation,” he said.
According to Viola, the garbage industry was hit by higher costs in 2018 after China banned imports of two dozen categories of solid waste, including plastics and paper products.
“You lost it all two years ago when China stopped buying this stuff,” he said.
In January 2018, China’s Operation National Sword banned imports of much of the plastics and various recyclable materials. Before this policy, China was the end point for about half of the world’s recyclable materials in the past few decades.
According to Viola, waste transport companies lost significant revenue from recyclable raw materials after the policy change in China.
“There’s no market for it so it’s kind of a double punch,” he said.
To further exacerbate the financial problem, China last month announced an import ban on all solid waste from January.
Although waste shippers’ revenues from recycled products are falling, Chesapeake Waste Management has made a significantly lower bid for the Ocean Pines contract.
Chesapeake Waste’s suggested price of $ 19.28 per month was both lower than Republic Services’ current or pending charges.
Chesapeake Waste’s offering represents an annual saving of nearly $ 12 for residential pickup over the approved increase from Republic Services.
During the board meeting in November, the directors authorized Viola and OPA staff to negotiate and enter into contractual terms with the only two of eight waste sellers who responded to a tender for waste and recycling services.
Viola said after further discussions with Republic, which had received the last two orders as of 2014, that the current vendor revised the proposed price to $ 24.20.
“They lowered it a little,” he said.
In contrast to Republic housing costs, the new contract calls for lower prices for Ocean Pines facilities.
The new contract includes an annual cost of $ 25,143 for garbage disposal in OPA’s own buildings, compared to the current price of $ 26,525. In contrast, Chesapeake Waste had offered $ 30,840 to collect trash from association properties.
Ocean Pines attorney Jeremy Tucker is currently reviewing the renewed contract with Republic Services.
Ocean Pines residents don’t need to contract Republic Services for garbage and recycling. Alternative options are self-transport to the Berlin landfill.
Viola said that with the impending price jump anticipated, along with an overall strong Republic track record over the past six years, the recommendation was made to extend the terms despite the lower rate proposed by Chesapeake
“It’s unfortunate that it’s a little more than we expected,” he said.