Free Market or Council Contracted?

Transcription

1 Free Market or Council Contracted? WasteMINZ Conference 18 October 2016 Duncan Wilson

2 Overview How did the current situation arise Market share data Case study 1: KCDC Exit and regulate Case study 2: TCC Full council service? Observations and conclusions

3 A Little Bit of History Councils used to be the exclusive providers of household rubbish collections

4 A Little Bit of History The rise of user pays Pay per bag Reduced rates burden Provided incentive to minimise waste and recycle Fair those who generate less pay less Pretty easy to administer What could possibly go wrong?

5 Market Share What CAN go in an XXXX Wheelie Bin: - Garden waste -Bottles - Household waste -Cans -Paper

6 Market Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% User Pays Bags Rates Bags Rates MGB

7 Market Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 83% 72% 37% User Pays Bags Rates Bags Rates MGB

8 Market Share 40% 35% 30% 25% 20% 15% 10% 5% 0% 2010/ / / / /15

9 Market Share What is so bad about Councils losing market share? Less income: choice is lose money or put up the price and lose more market share If lost to 240L wheeled bins this can increase the amount of waste to landfill Less control over waste services More trucks on the streets

10 Market Share Is the council service really meeting residents needs? So what to do about it? Get out of the market Rates fund services

11 Kāpiti District Council Private Market Provided Kerbside Rubbish and Recycling Services

12 Outline Background Where are we at today? Has it been successful?

13 Background Council sole rubbish bag supplier, contracted out bag collection Recycling collection partnership, including Council, formed in 2008 Private market supplied rubbish wheelie bins

14 2010 Solid Waste Bylaw and licencing system for collectors If collecting rubbish, collectors must also offer recycling service to the household

15 Many households purchased a low number of bags, but still needed to be provided with a recycling service

16 2012 strong market competition, with lower pricing on bags and bins 2013 Council exited bag market

17 Where are we at today? Private companies undertake all services (no rates funding) Cost of recycling included within the bag / bin price Now only one company providing bags, with prices increasing

18 Households get either 55L crate for mixed recyclables, or two stream service (240L recycle bin and 55L crate)

19 Bag market continues to decline Increase in smaller (80/120L) sized rubbish bins No conclusive change in rubbish or recycling volumes Resident satisfaction with kerbside services at 92%

20 Residents have many choices around service levels and prices Competitive private collection market

21 Many residents still view Council as provider of their services Council has reduced influence over these services

22 Many trucks, from different companies, on the same streets, emptying the same sort of bins, on the same day May be hard for Council to get back into providing the services

23 Is it Successful? It all depends on who you talk to Ask us in a few years when the market has settled

24 Waste Services Free Market or Council- Contracted? Tauranga City Council Experience

25 Overview How did Tauranga get where they are today Waste Assessment, S17A Service Review, Service Options Modelling, WMMP Next steps for Tauranga Lessons for others

26 History of waste services Pre-1994: Council rates-funded weekly rubbish collection, private free paper/cardboard collection Post-1994: Council user-pays weekly rubbish collection, weekly free private paper/cardboard collection Alternative private user-pays collections start, Council market share declines

27 History of waste services 2000: Private recycling collections start 2004: Te Maunga land leased for a MRF 2009: All recycling collections fully commingled 2010: Recycling collection market expands First joint WMMP (Tauranga and Western Bay) Level of Council involvement in waste collection services maintained

28 History of waste services 2014: issues emerge with commingled recycling collection and MRF operation Relatively high losses of glass due to contamination Growing risk that private sector may stop collecting glass altogether Alternative options proposed

29 Current Situation Large number of private operators Wide range of services and prices Several companies collecting from each street Poor data on collections WMMP review due by September 2016 Recycling rate average but losses high

30 Current Situation cont SWAP data shows potential for more recycling diversion and food waste High total community cost for services Lack of control of services provided and scope Very high traffic volumes at RTS especially over summer peak capacity

31 Strategic Change Waste Assessment completed Service reviewed and options modelled Case put forward outlining risk of current situation Political support for change

32 Strategic Change New WMMP adopted August 2016 Joint vision Minimising waste to landfill Key action: Council to pursue contracted services October 2016 elections new mayor and two new councillors

33 More SWAPs: Next steps Meet MfE best practice Provide confidence in data Identify any seasonal variation Present this information to the new Council New Council provides direction on way forward lots of options

34 What is the Answer? Dilemma raises a range of issues: In Good Bad Control of outcomes Cheaper for average hh Easierto configure for waste minimisation Fewer trucks on streets Well proven model Impact on rates Small hhand those who minimise well could pay more One size doesn t fit all Out Can choose service that matches needs Escape the death spiral Competition can keep prices sharp Cost disappears from rates Hard to control outcomes Licensing not proven Multiple trucks on streets More expensive for average hh

35 What is the Answer? Is there a third way? Either approach can work More important question is to ask what outcomes do you want? Good recycling/recovery rates Cost effective for ratepayers (householders) Happy residents

36 Optimise your Collections An optimal system will have the following: High recycling capacity that maximises material quality Diverts biggest fraction (organics, especially food) Constrained capacity for rubbish Maximise participation Reduce cost to households Can achieve this through rates-funded or licensed private services

37 Optimise your Collections Depends on where you are starting from In Out Still got some market share Political will Not too much rates pressure Desire for better control Nearly dead might as well kill it Lots of rates pressure Open to licensing Willing to take risk (point of no return)

38 Free Market or Council Contracted Questions?

39 Free Market or Council Contracted Thank You