November 22, 2009
What's Inside:
Landfill loses biggest customer
Deffenbaugh diverts waste disposal
Deffenbaugh diverts waste disposal
Those who see trash as treasure may have noticed that the pile of riches at the St. Joseph Sanitary Landfill didn’t grow quite as fast last month.
That’s what happens when the biggest customer takes its business elsewhere.
Starting Aug. 10, Deffenbaugh Industries diverted much of the waste it collects in the St. Joseph area to the company’s landfill in Johnson County, Kan.
Tom Coffman, senior vice president for Deffenbaugh, notified the city of the decision during a phone call Aug. 6 and with a letter the next day.
“This decision was driven solely by economic considerations,” Mr. Coffman wrote. He was unavailable for further comment.
Public Works Director Bruce Woody said lower fuel prices had made it more economical for Deffenbaugh to truck waste to its own facility than to pay to use the St. Joseph landfill. In an odd twist, cheap fuel could cost the city hundreds of thousands of dollars.
Deffenbaugh signed a four-year contract with the city in September 2007 that guaranteed the company a $30 per ton tipping fee, as long as it delivered an average of 250 tons per day each month. The fee was not a discount, but protected Deffenbaugh against future rate increases and guaranteed the city $7,500 per day in revenue.
“The letter kind of gives the specter of them taking 100 percent of their volume back to their facility, but keep in mind that we received about 20 percent of their volume before the contract,” Mr. Woody said.
August landfill statistics show Deffenbaugh delivered an average of 121 tons worth almost $3,800 each day — a drop of about $2,300 per day compared with July. If the trend continues for the 102 days the landfill will be open from September to the end of the year, the move could cost the city almost $235,000.
Deffenbaugh decreased its deliveries to the city landfill long before last month’s decision. The economic recession has caused residents to consume less, leading to lower volumes of trash. Deffenbaugh had not met its 250 ton per day quota since November 2008.
The gradual decline means the Deffenbaugh decision will not have a severe impact on city finances. When the city drew up the current year’s landfill budget, it knew to plan for a drop in revenue. As a result, plans to install new gas monitoring wells at the landfill will not change.
“We already had a pretty healthy fund balance in the landfill fund,” Mr. Woody said. “I’m not recommending that we cut back on any capital purchases.”
Clinton Thomas can be reached at clintonthomas@npgco.com.
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It's time for the citizens of this city and the surrounding areas to start utilizing locally owned companies. If everyone utilizes a local company it would be two problems solved. Local companies would see the revenues and the city's landfill would see the revenues.
So what about the contract? Are they being charged a higher "tipping" fee since they are not meeting the terms of the contract? Looks like the contract was short sighted and should have contained some guarantees for the city not just the trash hauler. Sure now they have money but what about next year at this time will they be seeking additional charges from local haulers? The incompetence in government never ends.
I'm in agreement with "Apparently So", people in St Joe can easily find another provider who will give equally as good of service at an equally good price, perhaps cheaper.
Not always. At my old place here in town, you were forced to use one company. You could call as many other companies as you wanted, but none of them would take it since they said it was in the other company's area.
I too agree that the lost revenue a negative.... operating adjustments can be made for that... but the positive is the land fill will not fill up as fast.
here is information for all of those that think the citizens in st. joseph should only buy and do busines with st, joseph business, how many of you know that for around the past five years the city of st. joseph has contracted with a trash
service from andrew county to pick up the cities trash
"Locally" owned does not always mean inside the city limits. Though, a "city" business of any type should be one located inside the city limits, and "locally" owned should quit touting themselves as St. Joseph businesses when they are clearly located outside the city limits.
With that said, trash haulers located inside the city limits, had the same opportunity to bid as the Andrew County hauler. Low bid rules. And the Andrew County hauler still uses the St. Joseph landfill.
In the case of trash hauling, most haulers take their trash to the St. Joseph landfill. (Are there some besides Deffenbaugh that don't?) The haulers also pick up trash from all over the region.
Also, I think the City's contract with Deffenbaugh was to keep some portion, if not all, of the trash that Deffenbaugh was picking up was taken to the city landfill. It only guaranteed that Deffenbaugh would use the landfill so that the revenues would continue. Though, less trash would be going into the landfill without them, it would have forced increased tipping fees to cover the losses. Monies collected today are to cover closing and maintenance issues down the road.
The question I have: When the tipping fees go up a dollar a ton, why do the haulers raise their fees up a dollar per customer stating it is a direct effect of the increased costs at the landfill. I'm positive the average household is nowhere near 1 ton of trash per month. Whenever the company raises their rates, they are publicly bashing the increased fees, but you know they are silently celebrating their windfall.