Jeannette unlikely to outsource garbage collection
The City of Jeannette may need to increase fees associated with garbage collection, but according to a new study it makes little sense to outsource the work at this time.
Civic Research Alliance, the organization that is studying staffing levels and efficiency in the city, made a presentation to council this month that indicated that eliminating the sanitation department right now is not necessary.
Kerry Moyer, president of Civic Research Alliance, was asked to review the city's garbage collection first so council could use the information to form the 2014 budget.
In his presentation last week, Moyer said the 2012 total expenditures for the sanitation department were $813,235 and the total revenues were $805,209 — leading to a deficit of a little more than $8,000. Some council members said they had been led to believe the department was losing much more each year, including some rumors of losses in the hundreds of thousands, but Moyer said a review of the past several years indicated the deficit was on average less than $10,000 annually.
“So the department is not hemorrhaging money, like the $400,000 a year a former city official said it was,” said Councilman Mark Levander. “There is no dire need to outsource.”
Moyer agreed and also said the sale of city-required garbage bags only brought in around $9,000 in 2012 and this year it is expected to produce revenues of up to $60,000. If those figures hold true, the sanitation department would no longer run at a deficit in 2013 and instead would show a profit of approximately $40,000 or more.
Moyer said Jeannette's rates for residential customers is among the lowest in the area and the city offers more discounts than neighboring communities. The average cost to residents is $158.76 annually.
“Financially there is no reason to shift to a private contractor unless the annual cost to residents falls below $158.76 or if a private contractor could better maintain costs (such as equipment purchases) over time,” Moyer said.
Given the Collective Bargaining Agreement council signed with the sanitation workers, salary costs will increase a little more than $7,000 each year for the next four years of the contract. Moyer said the city's current residential rates are unsustainable due to those increases. His recommendation is for the city to increase garbage fees by a little more than $6 over the course of the next four years.
That increase would cover the salary hikes, but to cover the cost of bringing in new equipment, Moyer said he recommends raising the rates by $13 over the next four years.
The sanitation contract expires in December 2017. Moyer explained that since the workers would have to approve the dissolution of the department before that expiration that it makes sense for the city to continue to operate the garbage department at least until 2017. Council can use the next four years to explore the possibility of outsourcing the work.
Michael Foreman, the state Department of Community and Economic Development representative who has been helping Jeannette navigate the Pre-Act 47 process, said his recommendation for council is to focus on enhancing revenues from the garbage department rather than outsourcing at this time.
“You have no ability to eliminate the department without voluntary action by the union,” Foreman said. “You have to work toward revenue enhancement over the next four years. That might mean revenue increases and it might be looking at revenue collection efforts.”
Moyer told council if all residents paid their bills in 2012, the department would have brought in another $74,068 in revenues.
Kristie Linden is an editor for Trib Total Media. She can be reached at email@example.com or 724-838-5154.
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