Cape Coral explores taking over city's garbage service

After years of a strained relationship with garbage hauler Waste Pro that included anger from dissatisfied customers and legal battles, Cape Coral City Council is looking into providing the service itself.

Waste Pro has consistently come under fire, most recently the company settled a lawsuit with Cape Coral in August after the city withheld $800,000 worth of payment after a reduction in service because of Hurricane Ian, and a prior lawsuit in 2022 after the city imposed assessments over missed trash pick up.

Waste Pro has the sole contract for providing waste removal services for over 70,000 residential households, and the multi-million dollar contract with the city expires on Sept. 30, 2027.

The city is evaluating possibly providing in-house garbage hauling services to residential and commercial customers throughout Cape Coral.

This decision follows a committee of the whole meeting on Aug. 23, where the city council asked for additional information expanding a recently combined residential collection in-housing analysis and the commercial in-housing collection analysis report.

In 2021, the city tapped Raftelis Financial Consultants, Inc. of Charlotte, NC for "solid Waste Management Consulting Services" for $45,130, later increased to $93,385.

An amended contract, approved Wednesday, Oct. 4, brings the total payment to the consultant up to $107,250, and it will provide the necessary examinations and information the council requested.

The items include comparing three municipal-run solid waste systems and three comparable municipal solid waste systems that have recently taken over solid waste services; working with staff to develop an online community survey to gauge public interest in solid waste collection services; and providing information on dividing the city into two collections areas, interest rate sensitivity, resources needed, and pros and cons of the city taking over collection.

Their work will be completed by November 10.

Previous coverage Cape Coral, Waste Pro headed to arbitration over withheld funding

Related Cape Coral's annual assessments increase the cost to residents by $131

Taking on garbage collection would come with costs

The option to begin garbage hauling services once Waste Pro's contract expires was presented on Aug. 23 to the city council.

Raftelis was tasked in 2022 with evaluating the potential cost-of-service to do collection in-house.

It developed a 10-year financial model, which includes costs of facilities, labor, equipment, supplies, maintenance, and contingency.

The report operated under the assumption the city would continue to see growth with the number of customers growing to more than 105,000 in 2031 from more than 84,000 in 2022.

Commercial customers would go to more than 2,900 from more than 2,400 in the same period.

The estimated monthly residential fee in the fiscal year 2024 under Waste Pro is $13.58, but doing in-house collection would bring rates up to $30. The city rate would stay at a flat fee for 10 years, unlike a contractor's rate.

According to the consultants, average market rates are at $20-$25 today and will continue to grow toward $30 in three years.

These figures are preliminary and could change depending on the level of service chosen by the city.

Cape Coral would also need to buy a $10 million vehicle operations and maintenance facility, or $2.8 million for storage and maintenance facility for a separate commercial facility for the bigger containers.

Facility cost would be debt-financed for 30 years.

Labor costs would require hiring 117 to 131 city staff and an additional staffing of between 25 to 27 in the 10 years.

The cost to the city would be between $10.6 million and $16.1 million for residential pickup, and an additional $1.69 million to $2.59 million for commercial.

The figures do not include the cost of the vehicles, the cost of gas, and vehicle maintenance and insurance.

Council takes an early stance of opposing change

Most city council members said they did not want to move forward with in-house solid waste management in a previous discussion on the topic.

Councilmember Tom Hayden said he was not for bringing solid waste management in-house based on what's already been presented.

"I am not for bringing it in-house because of the cost of it, what we'd have to build to accommodate you know that many trucks, new employees, and I don't think there's not going to be enough of a rate difference to justify us doing it in-house for me," Hayden said.

When voting on the updated contract with Raftelis, Councilmember Robert Welsh questioned why the city continues to pay consultants to explore the option.

City Manager Michael Ilczyszyn said the consultant will provide more information that wasn't presented to the council, such as whether the city wants to split the city into two areas that can be serviced by more than one contractor, or even the option of splitting horticulture from solid waste hauling services.

"Those are two types of decisions related to large enterprises that we really need a subject matter expert that has the ability to analyze the impact on the market, the rates, and what amount of vehicles will be needed," Ilczyszyn said. "We will come back to you all with the output and look to close out this discussion."

Luis Zambrano is a Watchdog/Cape Coral reporter for The News-Press and the Naples Daily News. You can reach Luis at Lzambrano@gannett.com. Follow him on Twitter @Lz2official.

This article originally appeared on Fort Myers News-Press: Cape Coral v. Waste Pro: City looks at taking over garbage service