Waste privatization likely to save Elyria money, but would service pay the price?

ELYRIA — A study and three bids commissioned by the city show that privatizing Elyria's sanitation services would save the city and residents significant money, but fears of losing Elyria's lauded pickup services hang heavy over the conversation. In December, City Council President Vic Stewart, D-at-Large, asked city officials to look into the finances of the Sanitation Department as well as the costs of the city privatizing its trash and recycling services, a move that most other communities in the area have made. This month, the city released a study from Rea Business Advisors as well as three bids from private companies outlining what they would charge for a five-year contract — with additional option years — to carry out the city's refuse pickup services. The companies submitting bids were Republic Services, Rumpke Waste and Recycling and the Kimble Company, all of which proposed prices well below the $33.38 which Elyria residents without a Homestead Exemption currently pay per month. Purvie Smallwood, project works coordinator for the Sanitation Department, and several residents spoke at a Council meeting Monday and said that the city's Sanitation Department provides exceptional services that are worth the higher price tag. Safety Service Director Chris Pyanowski said he did not believe the conversation about the future of sanitation in the city would be a "dollar for dollar" comparison; rather, he is expecting the debate to factor in impacts on staff, city control and, most importantly, service for residents. "The process was to gather information and to review current and future costs for the Sanitation Department and looking at what a private company charge us to provide this service,'' Pyanowski said. "We have to gather that information so that an informed decision can be made about what direction to take the service. That was the intent." Any decision on the future of the Sanitation Department would have to be made by a vote of City Council. That discussion would have to begin in committee, and Stewart said it would likely go to the Strategic Planning Commission, which includes all members of Council. Rea sanitation study In 2025, Elyria instituted a $5 increase in sanitation prices for both residential and homestead rates. Homestead rates apply to those with a Homestead Exemption, a property tax reduction program under state law that applies mostly to seniors and the disabled. The increase brought the monthly sanitation charge to $33.38 for residential customers and $24.87 for homestead customers. In Elyria, those with a homestead reduction receive 25.49 percent reduction on their sanitation fees. Rea Business Advisors of New Philadelphia, which finished the study last week, said costs for the department have risen in the years since the survey, and did not show any sign of slowing over the next few years. Currently, the Sanitation Department has just over $1 million in its cash balance, and Rea estimated that if the current rates continue the department will expend all its money by early 2028. If rates remain the same through 2031, Rea projected that the department would be $5.1 million in debt. The rising costs that Rea assumed included fast-increasing costs of equipment and supplies as well as repairs and maintenance, and more moderate increases in wages, fuel and insurance. Rea proposed two main options to improve the financial standing of the department: a 3 percent or a 5 percent increase in customer rates annually. If a 3 percent increase were instituted over the next six years, the Sanitation Department would actually make money for roughly two years and then would not expend its cash balance until 2030. With a 5 percent increase over six years, the department would actually make money year over year and leave 2031 with a cash balance over $2.6 million. In its recommendations, Rea suggested the city institute rate increases of at least 5 percent in both 2026 and 2027. Beyond that, the company wrote, further increases should be reevaluated annually to avoid overcharging residents. Rea also said the city should look to slow the projected 5 percent increase in wages over the next several years, as wages currently make up 52 percent of the department's fund expenditures. "Slowing the pace of increase for waste disposal should also be a critical focus of the department," the study said. "Relative to new bids and updating contracts, the city is in a difficult position here. Landfill providers are able to increase rates while private sanitation pickup rates continue to be well under what the city needs to charge customers." Sanitation workers, like most non-management employees of the city, are members of the American Federation of State, County and Municipal Employees, or AFSCME, Local 277, and their wages and benefits are set by collective bargaining agreements. If the city were to implement these recommended changes, Rea said that residents would sustain rate increases but in a "measured, simply communicated way," there would be no reduction in services, no staff would be laid off and the department's cash balance would remain positive through the next five years. However, Rea suggested the city do more research on the idea of privatizing the service before making any of the recommended changes. According to the study, the residents in Lorain pay $20.75 for trash pickup, North Ridgeville residents pay $24.47, Avon Lake residents pay $26.88 and Avon residents pay $21.85. All those cities have privatized their pickup services. "Because (Elyria) would be very uncompetitive with surrounding cities if the recommended rate increases were approved, we believe that further investigation and research should be conducted as to the feasibility of having a private third party provide refuse collection for (Elyria) before any changes are made to the Sanitation Department," the study said. Private bids Earlier this year, Pyanowski requested bids from Kimble, Republic and Rumpke for what they would charge to take over the city's sanitation services. Those bids were returned early last month. Pyanowski required that the bids include the price for both recycling and trash pickup as well as for weekly, unlimited bulk pickup, something that Elyria residents currently enjoy and a major factor in the appreciation the Sanitation Department often receives. All the bids were designed for a five-year contract from 2026 to 2030, with three subsequent option years that would need to be agreed upon by both the city and the bidder. According to the bid request, Elyria currently has 17,208 residential customers, with 2,237 receiving homestead reductions. Republic provided projected residential unit charges for three different formatting options: one in which the city continued to use homestead reductions, one in which all residents would be charged the same regardless of homestead exemptions and a third in which the city would provide a flat discount to seniors. Rumpke and Kimble instead provided the price they would charge the city per ton of waste disposed of. To make this more comparable to current rates, Pyanowski multiplied that rate by the total tonnage of waste the city disposed of last year, 22,669 tons in 2024 (more than 45 million pounds), and divided that number by 17,208 residential customers. If any of the private solid waste disposal bids are selected, the company will charge the city directly based on tonnage each month, and the city will then bill the residents. Compared to the $33.38 that Elyria charges for residential pickup now, all three of the bidders (and all three of Republic's options) offered lower rates. The attached graph shows projected rates over the next five years, as well as Elyria's rates if a 3 or 5 percent rate hike was instituted for all five years. For simplicity, homestead rates were left off the graph and only the projected residential price per month is included. Based on Pyanowski's estimates, in 2026 Kimble would charge residents $21 a month while homestead residents would pay $15.65. These rates would climb slowly but steadily over the initial five years of the contract to a projected $23.89 and $17.80, respectively, in 2030. For Rumpke in 2026, residential dwellings would be charged $27 per month while homestead dwellings would be charged $20.82. By 2030, these prices are projected to increase to $30.37 for residential and $22.63 for homestead. Republic presented its bid as three options, but for the sake of comparison only the price from the bid which keeps homestead reductions has been included in the above graph. The Republic Services proposals are as follows: Option 1: Homestead system stays in place, 2026 rates are $18.96 for residential and $14.13 for homestead. In 2030 these same rates are projected as $22.18 and $16.53. Option 2: All residents pay the same amount, regardless of homestead status. In 2026 all residents would be charged $18.33 and in 2030 they would all pay $21.44. Option 3: An optional senior discount instead of homestead reductions. The residential price in 2026 would be $18.48 and the senior price would be $17.33. In the fifth year of the contract the projected prices are $21.62 for residential and $20.27 for seniors. All three of the bidders agreed to use Elyria's existing garbage and recycling receptacles and purchase them from the city. Sanitation support Even before the Rea study was finalized, it was well known that Elyria's sanitation rates were high compared to nearby communities. At Council on Monday, Smallwood as well as several residents and Council members said it was a worthy price to pay for the exceptional service the department provides. When Smallwood spoke at Council on Monday, he was joined in the audience by members of his sanitation crews, residents there to speak in support of them and representatives from AFSCME. Smallwood argued that in his 29 years with the department, he had frequently been called upon by members of Council to take care of whatever sanitation work they needed. He said that his crews also regularly brought out and put away trash cans for those who were old, disabled, or otherwise unable to themselves. None of these additional services, Smallwood said, could be expected from a private sanitation company. "I hope they do the right thing for the city as a whole," Smallwood said via text on Wednesday. "Listen to our citizens of Elyria that do not want this to go, and look out for us and all the men (in sanitation)." Contact Owen MacMillan at omacmillan@chroniclet.com.