Mayors and city councils across the country are faced with the biggest budget shortfalls in history and are mired in debt. They are caught between diminished revenues caused by the recession, the tepid recovery and rising costs for municipal employees, particularly long-term pension and healthcare costs that in many cases are underfunded and in others deemed unsustainable. The debate over whether or not to privatize waste hauling is heating up.
By necessity, governments are being forced to tighten their belts to maintain critical services such as roads, police and fire. Many cities have found, and are increasingly finding, financial relief by contracting out residential waste services to private companies, not only to save money, but in many instances actually improving value to fee and tax payers while improving recycling rates. Other cities believe they run highly efficient collection operations and prefer to manage their own fleets. Still others attempt to benchmark city department performance by having them bid against private contractors. ...read more
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Demand grows for natural gas waste hauling
The sudden rise in the cost of gasoline and diesel fuel has sent shockwaves throughout the American economy. Higher fuel costs seep into every aspect of doing business and result in across-the-board price increases for consumer, commercial and industrial goods and services. It has also acutely impacted waste haulers, since capital equipment (primarily trucks) and fuel expenses represent the largest expense categories, excepting labor costs.
Waste handlers do have a basic, significant advantage over long-haul truckers, however. Since most collection routes are local, waste haulers with larger fleets have the option of daily fueling natural gas vehicles (NGV) with either compressed natural gas (CNG) or liquefied natural gas (LNG). While the up-front costs of buying new trucks or converting old ones to run on natural gas are much higher than diesel, and the investment to build a filling station is substantial, the long-term savings are driving waste haulers to natural gas, not just for fuel savings, but to comply with bid mandates. As the trend towards NGVs for trash collection continues, prices for vehicles and stations are expected to continue to decline as they have dramatically over the past few years. ...read more