With a new facility to be completed by August that will turn the four-employee, borough-operated Homer Baling-Landfill Facility into a transfer site, Kenai Peninsula Borough Mayor Mike Navarre is considering cost-cutting measures.
In a three-option comparison, the borough identified a savings of almost $250,000 by using a contractor to run the site. The Kenai Borough Employees Association disagrees with that approach, as do borough assembly members Mako Haggerty and Bill Smith. Haggerty represents areas of the southern peninsula and Smith represents the city of Homer.
To research possible savings, Jack Maryott, the borough’s solid waste director, examined three models, beginning with a completely run borough operation that would include transporting waste to the Central Peninsula Landfill near Soldotna.
“It was relatively easy to say it wasn’t the best model because of the cost,” said Maryott.
The next model included borough operations, borough equipment and a contractor hauling the waste to Soldotna.
“It was much more attractive. You wouldn’t have needed another employee and that’s one of the really big drivers, wages,” said Maryott of additional personnel needed to haul the waste from Homer to Soldotna.
The third option was using a contractor to operate the facility and transport the waste, as is currently done at the borough’s manned transfer facilities in Kenai, Nikiski, Seward and Sterling. Contractors also are used at the unmanned transfer sites in Anchor Point, Cooper Landing, Crown Point, Funny River, Hope, Kasilof and Ninilchik.
“We went through the process of putting it out to bid to get that number,” said Maryott of a Request for Proposal released Jan. 14. By Feb. 6, responses were submitted by Alaska Waste Connections, D&L Construction and Moore and Moore Services. Alaska Waste Connections currently operates the Kenai, Nikiski, Sterling and Seward transfer facilities, as well as the borough’s unmanned transfer sites. D & L Construction presented the low bid of $572,500. Compared with the $821,436 budgeted for the Homer Transfer Facility, there would be a savings of $248,736.
Navarre submitted on March 4 a formal notice to the Kenai Borough Employees Association of the borough management’s “intent to contract out the operations and maintenance” of the Homer Transfer Facility. Pursuant to the current Collective Bargaining Agreement with KBEA, the association had 14 calendar days or until Monday to respond.
“Basically, our response says that management has the right to contract out those services and we recognize that and we don’t refute their numbers as far as being a cost savings for doing that in house,” KBEA President Ryan Marquis told the Homer News of the association’s Jan. 18 response to Navarre.
KBEA’s letter notes the association’s concern “that the Homer community was not fully informed of the decisions being made that affect them, and therefore their desires and needs could not have been fully understood before a decision was intended to be made.” The letter also takes exception to the borough’s claim that contracting out the operation of the transfer site would provide a cost savings.
“We do believe that that same cost savings, or better, could have been realized by involving the community and the employees currently employed by the Solid Waste Department in Homer,” the letter said.
Haggerty’s objections to contracting the transfer site’s operations includes the local level of recycling.
“Homer has taken a lead in how it handles its waste stream, things like a robust recycling program that seems to continually develop,” said Haggerty. “The more we recycle, the less we put into a landfill.”
He argued that increasing recycling and reducing waste would be problematic and necessitate contract renegotiations.
“Once the contract is signed, then it kind of institutionalizes or locks in the way we deal with our waste,” said Haggerty. “The mayor will tell you we can make those changes anytime, but the truth of the matter is that even if we do make those changes, the changes won’t be easy. We have to go through a whole renegotiation of the contract every time we make a change and that means it will cost us.”
Haggerty also questioned how a contractor would be reimbursed for transferring waste.
“If they get paid by the tonnage they haul up the highway, then where’s the motivation to reduce the tonnage they’re taking to the Central Peninsula Landfill? There is no incentive,” said Haggerty.
Also on his list of arguments against contracting was the “union-busting aspect of this thing,” Haggerty said. “We’ve got four guys that work up at the site right now that are being paid a good, middle-class wage and who will replace them? … I think we’ll lose four solid, middle-class families.”
Maryott contends a contract would include the flexibility to increase or decrease activities. He used the collection of plastic bags, referred to as “plastic film” as an example.
“If, all of a sudden, there was no market for plastic film, we have the ability to say we’re going to stop collecting it with no cost. Or, if we want to say now we’ll start collecting some other commodity, we have that flexibility. They have to do it,” said Maryott. “It’s built into the contract.”
The same is true of a decrease in waste being transferred as a result of increased recycling, said Maryott.
“We’re going to divert as much waste as we can. It’s built in there. (Contractors) are required to do it. It isn’t something that’s optional,” he said of changing requirements.
Smith was uncertain that’s how it would work.
“The mayor says we can always add other services, but I think that if we have borough employees, we’ve been able to add different recycling things without increasing our costs,” said Smith. “A private contractor is a private contractor, and if the borough wants them to do extra work we’ll pay extra money for it.”
Haggerty said he isn’t ready to give up the fight against privatizing operations of the transfer site.
“I think we’re going to start to see some resistance,” said Haggerty. “I don’t know where exactly it’s going to come from, but I’m raising the specter of the whole scenario.”
Marquis met with Navarre Tuesday morning.
“He was still planning on consulting with assembly members in Homer, so I know he’s still talking to them, but I believe it’s his intent to award the contract based on a cost-savings to the borough,” the KBEA president said. “Borough administration) made their intent known to us. We gave our response. I don’t think our response will change anyone’s mind.”
Called placed to the borough mayor’s office by the Homer News were not returned by press time.
McKibben Jackinsky can be reached at email@example.com.