| Saving
Over 16% and Beating High Fuel Collection Costs
One contract better than 12 for
Detroit-area authority
(Southeastern Oakland
County Resource Recovery Authority, Michigan)
 The
Southeastern Oakland County Resource Recovery Authority
(SOCRRA) consists of 12 member municipalities outside
of Detroit, MI, with a total population of approximately
283,000 and covering an area of 75 square miles. In
2005, GBB was hired to assist in efforts to obtain more
competitive costs for collection, transfer station operation
and disposal services.
Backed by a commitment
to enter into a new 20-year membership agreement by
its 12 communities if certain financial objectives were
able to be met, an aggressive and very extensive RFP
was prepared and issued in June 2005 for overall long-term
service needs without regard to municipal boundaries,
individual community load and weight needs, or current
day-of-week service provisions.
In December 2005, after
a thorough evaluation of all proposals received, recommendations
were made to the Board with impressive end results:
(1) long-term agreements yielding expected overall savings
exceeding 16% as a whole (at least a 10% savings for
each community) when the proposed 2007/08 total cost
of service is compared to 2006/07, (2) assured landfill
disposal capacity, and (3) the ability to expand recycling
efforts.
 Following
the Board’s approval of the recommendations, SOCRRA
entered into 10-year contract agreements, with two five-year
extensions, with Tringali Sanitation, Rizzo Services,
and Car Trucking to provide refuse, recyclables and
yard waste collection services and with Onyx Waste Services
to provide waste transportation and disposal services.
In addition to favorable
financial considerations, the solution provides several
advantages for SOCRRA and the member communities, including:
 Maintaining
one of the two current Transfer Stations (Troy) for
future use with the ability for SOCRRA to continue
to grow its lucrative cash customer business. - Reducing SOCRRA’s operating
costs by minimizing the amount of waste transferred
through the second Transfer Station (Madison Heights)
while maintaining this facility as an emergency back-up
transfer station. This also makes the facility available
for alternative uses such as a comprehensive recyclables
drop-off center, recyclables reuse center, construction
& demolition transfer facility, or other possible
options.
- Entering contractual relationships
with vendors who are eager to perform work for SOCRRA,
thereby enhancing the ability to expand recycling
efforts in a multitude of areas, including expansion
of curbside scrap metal collection and service to
schools, churches, businesses, special events, etc.
 Obtaining
extremely competitive unit rates for servicing commercial
establishments that could promote organized collection
in key areas.- Obtaining the recommended collection
contractors' agreement to explore reducing most communities’
collection days so that refuse is not out on the curb
as many days each week in a given community.
- Locking in not only SOCRRA pricing
for 20 years but also assuring that SOCRRA has landfill
disposal capacity for this timeframe.
GBB’s Foresight:
 In
March 2004, over a year before the initiation of this
project, Bob Brickner (GBB Senior Vice President) sent
a letter to SOCRRA entitled “Comments on Potential
for Future Cost Savings.” In the letter, Mr. Brickner
highlighted that an issue that should be attractive
to SOCRRA members was “monetary savings associated
with volume purchasing and the ability to dictate terms
and conditions if the communities are associated with
a unified buying group.”
Mr. Brickner went on
with an evaluation of the potential savings of such
a strategy: “GBB is of the opinion that an average
7.5% savings might be achievable (relative
to MSW collection/disposal) under such a full-membership,
SOCRRA-sponsored full-service collection/disposal option
solicitation.”
Mission accomplished:
Overall savings exceeding 16% as a
whole (at least a 10% savings for each community) were
achieved.
Testimonial:
“This has
been a grueling three month-long clarification process
and results wouldn’t have been the same without
your facilitating and wealth of experience from which
to bounce ideas off of.”
“Even more
amazing is the fact that we exceeded our Board’s
dictate (for a 10% cut) by about $1,040,000. Who would
ever have guessed that we’d achieve a 16.2% cost
reduction by this RFP process?!”
“I thank GBB
and you personally, Bob, for your part in helping SOCRRA
achieve these monumental savings.”
Mike
Czuprenski
Operations Director-SOCRRA
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