Sean C. Morgan
After hearing a zealous argument from the manager of Sweet Home Sanitation in favor of basing garbage collection rates on regional consumer price index figures, the Sweet Home City Council went for it.
Council members voted 4-2 to approve an ordinance implementing a six-year rolling franchise agreement with Sweet Home Sanitation that will allow the company to increase rates for garbage collection service based on the state’s CPI each year.
The ordinance will permit a 2.1-percent increase in rates this year.
During the council’s regular meeting on July 25, voting to approve the ordinance were Mayor Greg Mahler, Dave Trask, James Goble and Diane Gerson. Voting not to approve the ordinance were Susan Coleman and Lisa Gourley. Both wanted to include a cap on how high an annual increase could be.
“I was thinking a cap might be a good idea,” Coleman said. “I think that we need to provide them with opportunity to have continuity year after year, but at the same time it would be nice to have some sort of checks and balance in place. I was thinking somewhere around 3.5 percent as a cap.”
She proposed raising it higher if Sweet Home Sanitation would agree to a bulk pickup day for items like the couches and large pieces of furniture she said she sees in yards around town.
“I’m not 100 percent against this CPI thing,” Trask said. “I would not be opposed to a maximum cap.”
“They’re a good responsible business, but our responsibility is community-first,” Gourley said. “I would be very comfortable with a cap.”
“We’ve heard concerns,” said District Manager Josh Metcalf in response. “We’ve gone above and beyond to work to address concerns, communicate, talk through them.”
Referring to CPI data collected over 27 years, Metcalf said, there are four outliers. In 1990 and 1991, the CPI exceeded 5 percent. Two years were below 1 percent. Without those, the annual CPI is in the 2.5- to 3-percent range.
“The 2.1 percent that we’re asking for tonight is 50 cents a month (for the most common service, a 35-gallon can).” Metcalf said. “If it were 5 percent, we’d be somewhere in the neighborhood of a dollar per month. I get it. There are only so many funds to go around, but taking a look at 5 percent on a mortgage payment versus 5 percent on a monthly garbage bill that’s currently $22.90 – at the end of the day, this doesn’t add additional revenue to our bottom line. It continues to provide us the opportunity to maintain our level of service that’s been expected of us, asked of us.
“As the State of Oregon, DEQ (Department of Environmental Quality) continues to evolve, there are different requirements each and every year that in order to stay in business, stay compliant, we’ve got to meet those requirements; and there’s costs associated with them.”
“And then the final piece and kind of referencing what I heard tonight about people living and working in the area — we have people that live and work in the area. We have an office in the area. We have drivers that live in the area, drivers that have been with us for years. They go to your churches, shop in your businesses. You see them. You know them by name. They volunteer for the fire department.
“By having a CPI increase, it provides us an opportunity to provide living wages for those folks. It provides rate stability for us, to keep us where we’re at. If, for any reason in any given year, we were to come before council and seek a 2.1 because that’s what we’re seeking tonight, and for some reason that wasn’t granted, what we don’t want to do is the following year come and say, can we get 5? It’s a lot easier for our customer base to take 50 cents versus a buck in a month.”
Following the discussion, the council was in a 3-3 deadlock on whether to approve the the ordinance or seek a cap on potential increases, with Trask, Coleman and Gourley in favor of a cap on the maximum annual increase.
Mahler said he could table the ordinance for further discussion later, and City Manager Ray Towry asked whether the council would be interested in suggesting a range for a cap in order to swing a vote or two.
Mahler asked Metcalf what cap he thought would be reasonable.
“I think given the sample size, at least taking a look at what’s the highest it’s been in the sample size we have would probably be reasonable in terms of just looking at it off the cuff,” Metcalf said. “What’s the highest it’s been? It’s been 5.8 in the last 27 years.”
He added that if the contract has protections on one side, protections on the other side should be considered.
With a cap at 3.5 percent, Metcalf said he was concerned that CPI might be at 4 percent the next year, 3.6 percent the following year and 3.9 percent the year after that.
“You go multiple years, year in, year out, and I talk about just maintaining where we’re at, erosion, erosion, erosion,” Metcalf said. He would love to be able to give a top performer more when they deserve more, but “hey, we’ve had our bottom line erode, and erode and erode. That’s my biggest concern.
“The vehicles we operate, that we drive down the street, I know those vehicles exceed the cost of my house. We’re driving houses down the street. There’s a lot of capital outlay for those vehicles, for the carts that we buy. There’s a lot that goes into it, so to continue to maintain where we’re at and have that rate stability to ensure that.
“Five years from now, do we know for sure you all will make up the council? I love this council, but let’s say five years from now, it’s not the right year to authorize a rate adjustment and then the following year and the following year. It provides again that stability to ensure that we can continue to provide the same level of service that’s expected of us.”
“So at 50 cents a month this year, next year it could be a dollar a month,” Gerson said. “We’re kind of caught in a bind a little bit about how the public’s going to view this. My Social Security doesn’t go up by CPI.”
“The way I look at that concern, quite frankly, is this very large sample size, there’s consistency throughout this thing for years, for decades, a couple of decades,” Metcalf said. “A larger increase might be a blip on the radar, but it won’t be the norm. It will help residents and potential businesses plan their budgets.”
Following the discussion, Trask said, “I don’t want to hold this up for another six months. I would vote to keep this the way it is.”
He moved to approve the ordinance and agreement as proposed, and the council adopted it.