GARBAGE PICKUP AND UP: Trash hauling rates vary, jump

Dec. 24—TRAVERSE CITY — Thousands of area residents will ring in the New Year with higher trash hauling bills starting Jan. 1 because of planned rate increases from GFL Environmental Inc., the region's primary trash hauler.

Residents across the Grand Traverse region will see quarterly rate increases of 20 to nearly 40 percent starting in 2024 as GFL boosts its services fees because of rising operational costs.

Depending on the location, quarterly fees for residential trash service will increase to more than $97 in some municipalities, while others will pay in the $42 to $60 range, depending on their locations and pricing histories with GFL.

Garfield Township residents, for example, will see their trash rates increase from $43 to $60 per quarter, which touched off a series of complaints to township officials, Garfield Supervisor Chuck Korn said.

"I've had quite a few of them," Korn said, prompting the township board to recently revive discussions about contracting with a single waste hauler to lock in rates and service levels for township residents.

"I would like to see us go with a single provider," Korn said. "It's on the table and we're talking about it."

One of those residents was Geri Freedman, who was upset with the increased charges and GFL's failure to notify its customers that a price hike was on the way.

"The increase is an incredible increase, regardless of how long it's been since they raised the rates," said Freeman, who saw her quarterly charges surge 38 percent. "It's just not a way to do business and treat your customers."

Mark Bevelhymer, GFL's vice president for northern and mid-Michigan, said the company's residential rates are based on several factors, including location, housing density of the service area and historic service rates. In 2015, GFL's predecessor, locally-based American Waste, negotiated a multi-year service contract with the City of Traverse City, along with Acme and Peninsula townships, for exclusive service rights for residential waste hauling and recycling pick-up for less than $40 per quarter.

City Clerk Benjamin Marentette said the contract brought city residents stability in their waste hauling fees, but fulfilled other objectives as well.

"We also wanted to limit the number of garbage trucks going up and down the streets," Marentette said.

The city extended that contract for another five years through March 2026 before GFL acquired American Waste in early 2020 for a reported $380 million in cash and non-voting GFL shares from local brothers Michael and Edward Ascione. Their father, Edward Ascione Sr., founded Northern A-1 Sanitation Services in Kalkaska in the early 1970s.

Other municipalities, including Garfield and Long Lake townships, reached agreements with American Waste several years ago to serve as the "preferred" residential waste hauler in return for lower rates and recycling services, along with a monthly large item pick-up. But those agreements weren't binding on GFL after it purchased American Waste, township officials said.

Area residents have reported a wide range of price increases across the region. Residents in Leelanau County's Elmwood Township saw their rates increase to $97.02 per quarter from just over $79, a 22-percent increase. Elmwood residents don't receive curbside recycling service, as Leelanau County's recycling system is operated at community drop-off sites under the county's Solid Waste Management Plan.

Elmwood Township Supervisor Jeff Shaw said the township several years ago looked into contracting for trash hauling for its residents, but dropped the idea after area waste haulers threatened legal action based on the county's solid waste plan.

"We got a lot of pushback on it," Shaw said. "Essentially, they threatened to sue us, so we ended up letting it go."

But with the recent rate increases and the limited recycling services available in the township, Shaw said contracting for waste hauling services is something that officials could reconsider.

"My rates have gone up a lot it seems," Shaw said. "I can't speak for (other officials), but I think the board would be willing to look at that again ... anything we can do to help people save some money — absolutely."

East Bay Township residential customers also will pay $97.02 per quarter, and have seen rates increase more than 35 percent since the summer of 2021.

Peninsula Township customers also will experience a double-digit percentage increase starting next month, but only pay $42 a quarter for waste hauling and recycling service, in part because of its previous contract with the hauler.

GFL, based outside of Toronto, serves more than 2.3 million households across the U.S. and Canada, and more than 60,000 commercial and industrial customers across the two countries. The company employs about 6,000 workers. Its northern and mid-Michigan service footprint extends from the Flint area to the Mackinac Bridge and includes more than 30,000 residential and commercial customers, Bevelhymer said.

The company recently reported third quarter 2023 revenues totaling $1,890.0 million, an increase of 10.3 percent over 2022 third quarter revenue which it said was primarily driven by core pricing increases.

Bevelhymer, who worked his way up through American Waste before it was acquired by GFL, said there are numerous factors that play into the rate increases. Rising fuel costs have a major impact on the waste hauling industry, he said. Inflation is also driving up costs for trucks and for repair parts and supplies. A new garbage truck presently costs about $350,000, he said.

Higher interest rates are also a factor in a capital-intensive industry like waste hauling, he said.

"Interest rates have gone up 100 percent, and it's had a direct impact on the cost of doing business," he said.

Other operating costs for the industry are increasing as well. Pay rates for truck drivers have increased more than 25 percent over the past few years, Bevelhymer said, as companies have to pay more to find enough workers in a dwindling labor force.

"It was very common, pre-COVID, that you could extend these (service) contracts without worrying too much about it," he said. "Who would've thought we'd be where we're at today?"

Josh Tracey, GFL's general manager for its Traverse City office, said the company didn't send out notices to its customers on the rate hikes because the company bills in advance so customers were made aware of the rate hikes before they took effect. Sending out notices to thousands of northern Michigan customers would've created a considerable expense, officials said. A billing glitch which created a double quarterly billing for thousands of GFL customers in Garfield Township also created confusion, although GFL officials said those billing errors would be rectified by the end of the month.

Bevelhymer said there are a variety of factors that haulers use to set rates, including pricing history, residential densities of service area, the distance between stops and others. The cost of serving 500 customers in Traverse City, for example, is much lower than serving a similar number in a rural township, he said, which can result in significant pricing differences between municipalities.

"It all relates to density and how many people you're picking up," he said.

The escalating fees are creating opportunities for other local haulers to eat into GFL's customer base. Among those is Ramsey Blough of Sleeping Bear Disposal in Benzonia, who launched his company this month and has already found clients for the 500 trash totes he purchased to start the business.

He said a vast majority of those customers were dissatisfied clients of GFL.

Blough said he wants to serve Benzie County and southern Manistee County, and provide service around Traverse City, Grawn, Interlochen, the Kingsley area and southern parts of Leelanau County. He's taking reservations for more customers as he plans to expand next spring, and eventually hopes to serve about 5,000 residential and business clients, including dumpster and rolloff service for commercial accounts, and expand into recycling services.

Blough's hauling fees are $80 per quarter, with 5 percent discounts available for senior citizens, veterans, first responders and others. He said he's not interested in competing with other locally-based haulers, but hopes to create consumer options for residents who want to see more local competition in the industry.

"We're not trying to step on too many local companies," he said. "We're trying to take on the big companies and support our communities."