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Hidalgo County Sanitation ProgramRural Waste Collection Options

Department of Budget and Management 01/21/2014

Initial Sanitation Concept

Single Exclusive Franchise AgreementOne District /One Vendor to service all rural residents of Hidalgo County

ConcernDisplacement of local haulersResidents have limited choice

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Modified Sanitation Concept

Multiple Exclusive Franchise AgreementsMultiple Districts/Multiple Vendors to service all rural residents. (6 Districts)

ConcernNo guarantee of small hauler displacementChoices are still limited

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Public Hearing

08/27/13 - Public Hearing held to consider public input and commentary regarding the proposed rural solid waste collection program.

CC RecommendationMeet with potential vendors to understand their concerns and develop project recommendations4

RFI Findings

7 Vendors currently service 20,500 rural residents (56,799 total)

36% of rural households are using private haulers

64% are using a transfer station/landfill and/or illegally disposing

All haulers interviewed would be willing to pay a 5% franchise fee

Vendors willing to operate the transfer stations and submit franchise fees

Existing sanitation model is preventing haulers from increasing customer base.

Transfer stations remain open to the public

5Exclusive FranchiseAdvantages:Identical rate countywideLess vehicular trafficFewer haulers to monitorConsistent level of service

6Exclusive FranchiseDisadvantagesDisplacement of small haulersDoes not promote competitionResidents do not have a choiceDifficult for one hauler to service areas with less density due to higher operation costs

7Non-Exclusive Franchise AdvantagesPromotes competitionEnables all haulers to stay in businessAllows rural residents to choose the best options

8Non-Exclusive Franchise DisadvantagesMore vehicular trafficRate may fluctuate depending on hauler selected by rural residentMore haulers to monitor

9RecommendationsBased on the RFIs questionnaire responses and vendor interviews conducted, the following actions are recommended

Assess a 5% franchise fee to all waste haulers

Assess a fee for disposal service at the citizen collection stationsConsider privatizing/franchising or assessing a fee at the citizen collection stations

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Assess a franchise fee to all waste haulers

Utilize Non-Exclusive Franchise AgreementsOpen Market ConceptAll Waste Haulers are assessed a 5% franchise feeCompetition keeps rates low

Under a non-exclusive franchise system, rural county residents will have a choice of more than one waste hauler because the system is open to competition to all haulers that enter into an agreement. The waste haulers deal directly with the public in competing for rural resident customers. Rural residents get to choose the most economical vendor.

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Assess a fee for disposal service at the citizen collection stations

Implement a Pay As You Throw (PAYT) system Residents pay a variable rate depending on the amount of trash disposedFee will be based on volume or weightOptionsUtilize county staff to assess, collect and operate the transfer stations or;Privatize the transfer stations and collect a franchise fee

Under a Pay As You Throw (PAYT) trash program, households are charged for trash disposal based on the amount of trash they throw away, providing a direct economic incentive for residents to reduce waste. Will encourage and initiate recycling efforts

12Privatize or Franchise the citizen collection stations

Gives rural resident another option to self haul. County would have an option to collect a franchise fee from awarded vendorOr;County can assess a fee for waste disposal at the collection stations13AdvantagesAllows rural residents to choose the best options

County keeps control of the Sanitation Functions

Encourages competition

Closes the trash black market

Reduces current M/O expenditures

Increases revenues

14DisadvantagesInitial transition and support (illegal dumping)

Potential capital costs (scale or visual)

Dedicated Code Enforcement (equipment and training)15TCEQ Strategies to reduce illegal dumpingEducation and OutreachAvailable Recycling OptionsGood Code EnforcementCode Officer have to be heavily involvedTarget known bad areas firstConduct surveillance and sting operationsStiffen penalties and repercussions

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Franchise Implementation Process

Present sanitation program options and recommendations to Commissioners CourtDraft county sanitation ordinance regarding the franchising of waste haulersNotify affected haulers of planned franchise system programReceive commentary and conduct 2nd public hearingDraft Non-Exclusive Franchise AgreementsSeek Commissioners Court Approval and Authorization of ordinance and agreementsHaulers apply for the franchise agreementsCommissioners Court issues franchise agreements via Court ActionFranchisee send monthly revenue collections report as well as monthly 5% franchise feeFranchisee sends annual report to the countyCounty periodically Audits the Franchisee financial statements (via County Auditor)

17Summary of Key PointsAssess a 5% Franchise Fee to all the waste haulers in Hidalgo CountyAll vendors remain in businessVendors compete for customers Rural residents choose the best options and rates

Keep transfer stations open (2 options)Operated by county personnel Revenues would help offset M/O costs or;Fee would be based on volume or weightOperated by a Private HaulerCounty would collect an additional 5% Franchise FeeQualified employees could be absorbed by the private vendorRural residents not willing to contract can still self haul

18Key Point (Cont)Free Trash Collection is no economically feasible to County or HaulersBy assessing a fee at the transfer stations, resident choose whats more beneficialRural residents will be able to pay a smaller fee when they self haul by segregating trash and thus take less to the collection station. County will encourage recyclingHaulers will find themselves with more residents on the open market looking for waste p/u thus encouraging more businessRevenue stream over M/O could be used to offset cost attributed to Public Awareness, Clean-Up, Code Enforcement and other initiatives 19ConceptBy modifying our current sanitation functions and responsibilities, Hidalgo County will be encouraging economic development, helping to reduce fiscal deficits and encouraging environmental awareness20Questions/Comments/Suggestions

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