Hillsborough to Consider Alternative Proposals to Rate Increases for Commercial Solid Waste Service

Press Date: 
11/1/2011

The provider of commercial solid waste services in Hillsborough is asking the town to consider some proposals as alternatives to rate increases.

In early October, Waste Industries requested a 5-percent rate increase and a one-year extension on its franchise agreement, which expires July 31. The company provides solid waste and recycling services to businesses, churches, nonprofits and multi-family housing communities in town through a franchise agreement negotiated by the Town of Hillsborough.

During its Oct. 10 meeting, the Hillsborough Board of Commissioners approved the rate adjustment, the first Waste Industries had sought since its franchise agreement started in August 2009. The commissioners tabled discussion on extending the agreement until November to allow Hillsborough businesses time to respond to a survey on solid waste services.

In a letter dated Oct. 17, Waste Industries noted that the approved 5-percent rate increase is directly related to a $5 per ton increase in tipping fees at the Orange County Landfill. Effective in July, the tipping fees increased from $52 to $57 per ton.

Waste Industries stated in the letter that the approved rate adjustment does not entirely cover the increased cost of disposal and that the franchise agreement allows an annual Consumer Price Index adjustment. The transportation index for the South Urban Region increased 6 percent in January.

In lieu of requesting an additional adjustment, the franchise operator is requesting the town:

  • Extend the current service agreement for an additional two-year period. Under the agreement, two one-year extensions are allowed. If the two-year extension is approved — which would continue the agreement through July 31, 2014 — Waste Industries will not request a Consumer Price Index adjustment through July 31, 2013.
  • Allow Waste Industries to use the transfer station it operates in Durham for disposal of solid waste. If approved, the company will immediately rescind the 5-percent increase that was approved to cover the increase in tipping fees at the Orange County Landfill. If Hillsborough is required to provide Orange County with a one-year notice of discontinued use of the landfill, Waste Industries would maintain the 5-percent increase for the time it is required to continue disposing waste in the county’s landfill.

The Town Board plans to consider the proposals in the spring when it will examine all of the town’s solid waste operations as part of the annual budget process. This will give staff time to research the following:

  • Whether the town and Hillsborough businesses could achieve greater savings by using an alternative disposal facility.
  • Whether flexibility exists in the requirement to give a year’s notice to exit the intergovernmental solid waste agreement, given that the county landfill is nearing capacity. The agreement — among Hillsborough, the county and the towns of Carrboro and Chapel Hill — requires use of the county landfill
  • Whether it is in the interest of all Orange municipalities for Hillsborough to submit a request to exit the intergovernmental solid waste agreement.
  • The potential options for solid waste collection and disposal for both residential and commercial customers, including the use of Waste Industries’ facilities.
  • The potential impact of town and/or Waste Industries trucks using alternative facilities for disposal instead of the county landfill.

In addition, the Town Board also wants to consider the responses to a current survey on the franchise. Since 2004, the town has pursued commercial solid waste franchise agreements at the request of the business community to leverage better pricing and services as a community. Each business pays the franchise operator directly, with rates based on service level and frequency. All businesses — including multi-family housing complexes — churches and nonprofits are required to use the same service provider.

The deadline for the survey — which seeks feedback on customer service and asks about future service needs and the willingness to pay rate adjustments — has been extended to Nov. 5.

Under the franchise agreement, the town must provide notice of franchise renewal or discontinuation to Waste Industries in April — within 90 days of the agreement’s expiration.