Deal to outsource Ann Arbor city compost operations to WeCare Organics approved by City Council
Ryan J. Stanton | AnnArbor.com
The vote came despite concerns raised by several residents who said it was a mistake for the city to put compost operations in the hands of a private company.
Ann Arbor resident Lou Glorie spoke at the start of Monday's meeting and said she thinks the WeCare contract offers a "rotten deal for Ann Arbor taxpayers."
"Even though the profits would be sent out of state, the responsibility for major repairs and capital improvements would reside here in Ann Arbor," she said. "It's a win-lose proposition, and the people of Ann Arbor are on the wrong end of that deal."
But city officials who favored the plan pointed to the savings — more than $400,000 a year — and said the city must be fiscally responsible in times of shrinking budgets.
"I don't see a downside," said Mayor John Hieftje, adding that WeCare offers a relatively harm-free way to reduce costs.
Hieftje said he was swayed by the fact that no city employees would lose their jobs — they'll be transferred to other city departments — and the city will continue to have control of the compost site. He said the city still will have a clean compost product, too.
The city's compost operations have struggled to bring in revenue, losing $683,000 last fiscal year. The year before, the city saw a loss of $568,000.
The city estimates a savings of at least $408,000 per year by developing a public-private partnership with WeCare Organics. But that still means some losses.
Council Member Sabra Briere, D-1st Ward, sent an e-mail to her constituents prior to Monday's meeting, saying the WeCare contract "doesn't affect compost pick-up at the curb" and is "not supposed to affect the quality or availability of compost."
"Compost for residents of Ann Arbor is guaranteed in the contract," she said.
The two council members who opposed privatizing the city's compost operations were Stephen Kunselman, D-3rd Ward, and Mike Anglin, D-5th Ward.
Kunselman pushed for postponement and said he'd like to see more citizens engaged in the decision-making process.
"Whether or not it's a good deal for the city remains to be seen," he said. "Remember, everything that we've received are all projected numbers. There's no guarantees. All we know is we're basically cutting operating expenses by cutting city staff from the operation and moving in WeCare's operation on public land. This is all land we own as taxpayers."
Kunselman said he also had concerns about details of the contract.
"One of the big concerns that I have is that other communities most likely will end up paying a tip fee that is less than what the city of Ann Arbor will have via their contract with WeCare," he said. "The principle of that, I think, is very wrong since our taxpayers have been going to pay for that facility for years and years and years."
Anglin said he's still afraid there's a chance that biosolids — sometimes called "sewage sludge" — could be brought into the city's compost facility at some point in the future.
"Down the road, if it's contaminated, we will be responsible for making it correct," he said. "I think we have to move cautiously on this."
Ryan J. Stanton | AnnArbor.com
Sue McCormick, the city's public services area administrator, said fears about biosolids are a "non-issue" because that'll never be a part of the Ann Arbor compost operation.
"This is about the least-cost way to provide the service," she said of the switch to WeCare.
Before outsourcing, Anglin suggested the city first should try to more aggressively market its compost product and raise the prices so they're more competitive. As it stands now, he said, the city is practically giving away the compost.
Tom McMurtrie, the city's solid waste program manager, said the city has attempted to do market research to find out best prices for its compost, but has lacked the ability to respond quickly to changes in the market. He suggested WeCare could do a better job.
AFSCME President Nicholas Nightwine let council members know his labor union isn't happy about losing the work at the compost site. He also raised the price issue.
"The problem with the compost center is not the product. It's not the equipment. It's not the workmanship of the employees," he said. "It's the prices set by the city managers."
Nightwine pointed out the city will continue to take losses at the compost center even under WeCare's operation — they just won't be as much each year. He asked the council to first try an in-house solution before turning the compost center over to a private company.
"Adjust the rates to the market level with a discount to Ann Arbor citizens and see how the numbers look in two years," he said. "If in two years the city is still taking a substantial loss visit this idea again."
Michael Nicholson, senior vice president of WeCare, appeared before the council and said WeCare is committed to hiring local residents and already has started a job search.
Under the contract with WeCare, the city will pay a tip fee for each ton of compost brought to the facility, starting at $19 per ton in 2011 and declining in future years.
In the first full fiscal year, it is estimated the city will pay WeCare $171,000 in tipping fees. The city plans to budget up to $200,000, though.
On the revenue side, the city will receive $1 per ton for incoming merchant tons brought to the facility, as well as 50 cents per ton for outgoing finished product. City officials estimated that will total $36,000 in the first full fiscal year.
WeCare could take over the compost center by January.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at email@example.com or 734-623-2529.