City cuts recycling costs
Although the city touts its recycling efforts, many Chicago residents find themselves without access to the service. By the end of 2013, however, the issue will be resolved thanks to money the city saved by stirring up competition.Since implementing a competitive bidding system for recycling services, Chicago has saved $2.2 million, Mayor Rahm Emanuel announced April 5 at the Humboldt Park Boat House, 1400 N. Sacramento Ave. Those savings have allowed the Department of Streets and Sanitation and private companies to plot citywide recycling expansion.
“Competitive bidding for recycling services has saved taxpayer money and increased efficiencies while maintaining quality service,” Emanuel said. “These savings and efficiencies will help to make citywide recycling in 2013 a reality and further Chicago’s reputation as a leader in sustainability efforts. No longer will Chicago be a tale of two cities when it comes to recycling.”
The competition is among three entities: Texas-based Waste Management, New York City-based Sims Municipal Recycling and the Chicago Department of Streets and Sanitation. The collection is divided into six sectors—private companies service four and city employees handle the remaining two.
The competitive bidding system implemented in October 2011 called for private companies to submit proposals for services to the city, according to Anne Sheahan, director of Public Affairs for the Department of Streets and Sanitation.
“Essentially what the city did was call for private recycling companies to bid on certain areas of the city to provide recycling services,” Sheahan said.
The system drove companies and public workers to compete to offer the city the greatest value. The private haulers are able to offer a price of $2.70 per cart, as opposed to the city crews’ $4.77 per cart. City workers strove to close the cost difference between the two, ultimately bringing their price down to $3.28 per cart.
Sheahan said these changes drove total costs down dramatically and encouraged quality service from the competing companies.
“It’s really healthy competition,” she said. “It has served to motivate our workers to be as efficient as possible and has motivated the private industries to try and bring in the lowest price possible. We feel like it’s been a real win for the city.”
Bill Plunkett, a spokesman for Waste Management, said his company believes the competition is a benefit for taxpayers.
“We think competition is good for the city,” Plunkett said. “Clearly, it’s delivering value and savings to the city’s residents.”
According to Emanuel, there has been a 35 percent decrease in the overall cost of providing recycling services. Those savings, 10 percent greater than initially anticipated, are a result of collaborative efforts between labor unions and the Department of Streets and Sanitation to develop efficiencies in the city’s Blue Cart program.
Plunkett said for Waste Management, remaining competitive boils down to “having a sharp pencil and being able to deliver.”
“We look at the efficiencies we can bring to collection, the cost involved, make an evaluation and submit our numbers,” he said.
The final check-in for competitive bidding on unserved neighborhoods is planned for July when the mayor announces who the final providers will be based on the quality of the companies’ operations during the trial period. While both private companies have seven-year contracts, they could be terminated if found to be unsatisfactory.
“A number of scenarios could play out,” Sheahan said. “It could all go to private, everyone could keep their own [sectors] or the city could take it all back.”
Emanuel said competitive bidding for tree trimming and street marking is also planned, a development he hopes will provide taxpayers the greatest possible value.
Sheahan said the results of the new strategy have been promising for city residents.
“We’re trying to provide taxpayers with the best service possible with the resources that we have, “ she said. “[Competitive bidding] has certainly done that.”