Towns Partner To Hold Down Trash Costs
By: Brent Runyon
Barnstable County issued a request for price quotes for regional trash transportation and disposal this week in an attempt to lower costs for individual towns.
Thirteen towns on Cape Cod, including Sandwich, Falmouth, Mashpee and Barnstable, and another 11 off-Cape towns joined together to seek bids for transportation and disposal of as much as 125,000 tons of trash a year.
The other Cape towns, Chatham, Dennis, Eastham, Harwich, Orleans, Provincetown, Truro, Wellfleet, and Yarmouth, along with Abington, Duxbury, Hanover, Hanson, Hingham, Kingston, Middleborough, Norwell, Plymouth, Rockland, and Whitman, are joining together to seek pricing for new contracts.
Of the Cape Cod towns, only Bourne and Brewster are not involved in the negotiations. Bourne disposes its municipal trash in its own landfill, and Brewster signed a separate contract to dispose of trash at SEMASS Covanta, the waste-to-energy facility in Rochester.
All the other Cape towns currently dispose of trash at SEMASS, but the contracts expire at the end of 2014.
The towns produce about 125,000 tons of trash each year, but companies could sign up to take as little as 60,000 tons a year, said Patty Daley, the deputy director of the Cape Cod Commission. The request for quotes was issued Monday and the deadline is August 9. The contracts could extend five, 10 or 20 years.
Ms. Daley said the county hopes to receive several serious bidders through this process. “We’re hoping with this round to receive some specific bids, either for transportation and disposal or just disposal of the towns’ municipal solid waste,” she said.
Most Cape towns pay $37.50 for every ton of trash disposed of at SEMASS, she said. Brewster renegotiated its contract for $70 a ton after 2015.
The expectation is that the price will go up from the current level, Ms. Daley said, but hopefully stay within an acceptable range. “We’re very excited that this is going to provide us with a lot of information going forward,” she said.
The towns are negotiating as a group, but are not obligated to sign a contract with whichever company is chosen, Ms. Daley said. The group will review responses and then decide how to proceed. One or more contracts will be negotiated and individual towns will sign contracts with the vendor, she said.
The requests for quotes has been advertised, and sent to 30 companies that have expressed interest in the contract before. Those companies include SEMASS, Waste Management, and Casella Waste Systems in Vermont.
SEMASS has provided disposal services to Cape Cod towns for more than 20 years, and offers a sound environmental option for renewable energy by incinerating trash, said Thomas J. Cippolla, business manager for SEMASS.
But Mr. Cippolla said he is not sure the company will respond to the request for quotes. The request for quotes is not a binding contract and is not guaranteed to go to the lowest bidder, he said.
“Once you put the pricing out there it does have a ripple effect, and if the ultimate use of that pricing is not really clear, there may be some reservations by some entities,” he said. “I’m not sure why any of the bidders would do that.”
Even if SEMASS does submit the lowest quote, it will still have to negotiate with individual communities, he said. The contracts will also have to be approved by each town’s board of selectmen and Town Meeting. “I think [the Cape Cod Commission] can be an advisor, but I don’t think they have the authority to negotiate for the communities,” he said.
But Ms. Daley said the county group does intend to negotiate with the selected vendor. “It’s always been the intention of the committee that we would like to negotiate a single contract with the vendor and then make that negotiated contract available to the towns,” Ms. Daley said. “We put the request for quotes out in a broad manner so we’re hoping to get responses from vendors who are interested in serving these communities.”
SEMASS has shown a willingness to work with the county group in the past, she said, even asking for an exclusive negotiating window with the county.
Still, Ms. Daley said that the towns can choose to negotiate outside of the process. “Any town is free to negotiate with any vendor that they wish,” Ms. Daley said.
Mr. Cippolla said that SEMASS has already had discussions with some of the Cape Cod towns individually, including Falmouth and Mashpee. “Most of these communities have reached out to us,” he said. “A lot of the communities are getting concerned about the clock.”
Earlier this year, SEMASS announced a deal to send the ash from the incinerator to the Bourne landfill. The 10-year-agreement is worth about $110 million to the Town of Bourne. When the Bourne landfill is full, SEMASS agreed to take the Bourne trash at a reduced rate. The two contracts together are worth about $122 million to the Town of Bourne over 30 years.
As a result of the SEMASS contracts, Bourne will not respond to the request for quotes for the entire county, said Daniel T. Barrett, general manager for the Bourne facility.
But there is room in the Bourne landfill to accept between 25,000 and 30,000 tons of solid waste annually. “It is Bourne’s intention to make all or some of this capacity available as an option to the Cape towns,” Mr. Barrett wrote in an e-mail.
“We are currently working on a potential plan to offer capacity to handle recyclables as well.”
The current market rate for trash at Bourne is $95 a ton, but the rate varies dramatically with volume as well as a willingness to sign agreements for fixed time periods, Mr. Barrett wrote.
The county started the process more than two years ago, after SEMASS attempted to re-negotiate contracts, which would have more than doubled the cost of trash disposal for the towns.
According to Carl F. Cavossa Jr., owner of Cavossa Disposal in Falmouth, the heavy favorite to win the bid is still SEMASS, because of the proximity to the Cape and the size of the company. Cavossa will not respond to the request for quotes because it cannot dispose of trash, he said.
The deal SEMASS made with Bourne was savvy, Mr. Cavossa said, because it eliminated the closest competition for trash disposal on Cape Cod and allowed SEMASS to charge more for trash disposal going forward.
“It’s a double play for SEMASS,” Mr. Cavossa said. “It takes Bourne out of the competition and then SEMASS can make it up on the other end,” he said.
The farther trash is transported the more costs will go up, he said, so large companies like Waste Management may not be able to offer a better deal to Cape towns than SEMASS, because the transportation costs are so much higher, he said.
“I think SEMASS is going to write their own ticket for the waste and they are going to rake us over the coals,” Mr. Cavossa said.
SEMASS also makes money by selling the electricity produced by the incinerator, Mr. Cavossa said. “This incinerator is being run by a company that has more money than some countries,” he said.
But because SEMASS is so close to Cape Cod, the towns could use the proximity to their advantage in negotiations, he said. Cape residents have to deal with the environmental impacts of incinerating trash from elsewhere in Massachusetts, he said. “I would think that if they played hardball with SEMASS, they could get a better price,” Mr. Cavossa said.