Minutes of the Public Hearing of the Gurnee Village Board - April 7, 2014

 

MINUTES OF THE PUBLIC HEARING

 

Public Hearing to seek comment on the advisability of awarding a franchise contract for the collection of commercial refuse and recycling to Waste Management of Illinois.

 

GURNEE VILLAGE HALL

APRIL 7, 2014

 

Call to Order

Mayor Kovarik called the public hearing to order at 7:00 p.m.

 

Other Officials in Attendance

Patrick Muetz, Village Administrator; David Ziegler, Assistant Village Administrator/Community Development Director; Bryan Winter, Village Attorney; Erik Jensen, Management Analyst; Diane Lembesis, Finance Director; Chris Velkover, Information Systems Director; Tom Rigwood, Director of Public Works; Larry Dunn, Fleet Manager; Fred Friedl, Fire Chief;  Kevin Woodside, Police Chief

 

Roll Call

PRESENT:       6- Balmes, Hood, Wilson, Ross, Park, Garner

ABSENT:         0- None

 

Commercial Waste

Hauling Franchise

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Walter Willis
Executive Director
SWALCO
1311 N. Estes
Gurnee, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Larry Groot
Groot Industries
29900 N Skokie Hwy
Lake Bluff, IL

 

 

 

 

 

 

 

Commercial Waste Hauling Franchise : Public Hearing #2

 

Management Analyst Erik Jensen reviewed a PowerPoint presentation with the Village Board, which included the following information:

 

Purpose of Tonight’s Hearing

  • Seek public feedback on award of the franchise
  • Disclosing of any franchise fees

 

What is a Commercial Franchise

  • A formal contract for waste hauling services
  • Aggregates all eligible commercial accounts under a single contract
  • Has primary benefits of:
    • Reducing service costs
    • Expanding recycling
    • Reducing traffic on local roads

Impacted Businesses

  • Most businesses would be included in this contract
  • Special exemptions may be created for certain businesses or properties
  • Those not impacted:
    • Multi-family properties
    • Temporary roll off service providers
    • Temporary construction debris removal services
    • Private construction services (those unique to the business)

Proposed Timeline

  • June 2013: Business Surveys Conducted
  • September 9, 2013: First Public Hearing held
  • October 24, 2013: RFP Issued
  • January 10, 2014: Proposals due
  • February 2014: Finalists Interviewed, Waste Management Selected
  • April 7, 2014: Second Public Hearing Held
  • August 2015: Contract begins

 

Contract Details

  • 7 year term (2015 – 2022)
  • Various refuse, recycling and organics options (each business can select those that best meet their needs)
  • Free 1x per week service on a recycling container up to 4 cubic yards in size
  • Annual cost adjustment
  • Phased in pricing for customers below contract rates
  • Extensive Customer Service standards

 

Anticipated Benefits

  • An estimated 90% of businesses will save money
  • Stabilized, predictable pricing changes
  • An estimated 70% of businesses will have free access to recycling
  • A low-cost organics option will be available to all businesses
  • More efficient routing will reduce emissions, noise and wear & tear on local roads

 

Annual Savings/Loss for Common Services

  • 90/96 Gallon Containers (1x week): $490.92
  • 2 CY Containers (1x per week): $764.52
  • 4 CY Containers (1x per week): $686.88
  • 1.5 CY Container (2x per week): $131.28
  • 2 CY Container (2x per week): -$96.00
  • 4 CY Container (2x per week): -$236.28
  • 2 CY Container (3x per week): $268.92

 

Questions:

 

Trustee Park asked how the Village will monitor the cost effectiveness of the program to determine if it saved money.  Mr. Jensen and Mr. Walter Willis – Executive Director of the Solid Waste Agency of Lake County – responded, stating the rates at the beginning of the contract are considerably lower and the annual rate increases are locked. 

 

Trustee Park asked what percentage of people that responded to the survey indicated they supported this program.  Mr. Jenson stated the survey sought to collect pricing info.  Mayor Kovarik stated she has worked to communicate the program over the past year.  Mr. Willis stated Highland Park has conducted follow-up surveys and business satisfaction has been very high.

 

Trustee Ross asked how much more the program will cost those not expected to save money.  Mr. Jensen reviewed data from the survey. 

 

Trustee Park clarified that those that fall in the 10% have the option to switch service options to one that will save them money.  Mr. Jensen confirmed that is the case.

 

Trustee Wilson asked if the Village factored in businesses that also operate outside of the Village that have negotiated their own contracts.  Mr. Jensen stated there is an exemption process available in those cases. 

 

Trustee Wilson commented that he believes this program works contrary to the free-market system.  He continued to say he hasn’t seen any letters supporting the program, only letters against.  He concluded by saying the competition should remain. 

 

Trustee Garner stated he also hasn’t seen any letters in support of the program.  He continued to say the other waste haulers are concerned that the Village is taking business from them.  He stated businesses are currently not complaining, therefore the Village should not be getting involved in it.

 

Mayor Kovarik stated the purpose is to save businesses money and get trucks off the road.  She stated it was a competitive bidding process in which other companies have won the contract in other communities. 

 

Trustee Garner asked if the Village was giving an unfair advantage to the largest hauler.

 

Trustee Balmes stated the pricing a big advantage for small businesses who don’t have much power to negotiate with waste haulers.

 

Mayor Kovarik clarified the Village never requested support letters, but had a large amount of interaction with the business community to communicate the program and keep it transparent.

 

Mr. Willis stated this is the fifth bid this year and the first one that Waste Management has won.  He said this is the first Village that Groot has sent a negative letter to business owners.  He stated when in place, the Village will have some of the lowest rates and best recycling rates in the County.  

 

Mr. Larry Groot – owner of Groot Industries – stated the Village did nothing wrong throughout the process, however, he believes franchises is a bad idea.  He stated every business needs customers.  By franchising the Village turns hundreds of customers into a single customer.  He continued to say he believes it is wrong that a municipality can cancel his customers.  He stated the waste industry can meet recycling targets without franchising.   By franchising, his business does not have the confidence to continue to make capital investments.  He stated the short-term gains are not worth the long-term damage he believes will take place.  He stated other franchises awarded have got the industry’s attention and they will be working hard to meet goals.

 

Mayor Kovarik asked for a favorable recommendation for the Board to take action at the regular Village Board meeting.

 

Attorney Winter clarified franchising is allowed under State statute.

 

It was moved by Trustee Blames, seconded by Trustee Park to favorable recommendation for the Board to take action at the regular Village Board meeting

 

Roll call,

AYE:                6- Balmes, Hood, Wilson, Ross, Park, Garner

NAY:                0- None

Motion Carried.

 

 

Adjournment

It was moved by Trustee Park, seconded by Trustee Garner, to adjourn the Public Hearing.

 

Voice Vote:      ALL AYE:         Motion Carried.

 

Mayor Kovarik adjourned the Public Hearing at 7:30 p.m.

 

 

 

Andrew Harris, Village Clerk