DEPARTMENT OF PUBLIC WORKS: NORTHWEST TRANSFER STATION

7-A
DEPARTMENT OF PUBLIC WORKS: NORTHWEST TRANSFER STATION
Problem Identification:
Operating costs of the Northwest Transfer Station are high (approximately $2.5 million per year) due primarily to the maintenance of old equipment.

Recommended Action:
Utilize managed competition to select the operator of the Northwest Transfer Station. Additionally, consider as an alternative, the selling of this asset.

Classification:
Cost Savings, Organizational, Service Improvement; potential Revenue Enhancement if the decision is made to sell the asset.

Functional/Operational Area:
Bureau of Solid Waste

Estimated Annual Impact:
$1,000,000 ‘ 1,500,000 via managed competition; potentially $4,000,000 through the sale of the asset

Estimated Implementation Costs:
None

Barriers to Implementation:
Probable opposition from the municipal labor union representing potentially displaced workers.

Projected Implementation:
120 – 180 days

Next Steps:
Initiate discussions/negotiations with potential operators/buyers to determine feasibility; quantify savings and determine the best approach (e.g., sale, lease, management agreement, etc.) to be pursued.

Analysis:
The Northwest Transfer Station is located on Reisterstown Road and is intended to improve the efficiency of collections of mixed refuse by providing a location to consolidate loads for transfer to BRESCO or the Quarantine Road landfill. The station’s operating costs are high and increasing, largely due to aging equipment that requires a high level of maintenance. Maintenance problems also result from the inappropriate use of the facility by ‘small haulers’ (see Recommendation 8-E).

Utilizing managed competition to select the station’s operator could help reduce the high equipment and operating costs currently being incurred while ensuring the retention of the station for its current purpose. The City would almost certainly be the single largest user of the Station (approximately 20 percent of the City’s mixed refuse collections are processed through the station). This would place the City in a strong bargaining position with the future owner/operator.

While it is difficult to estimate the potential financial impact of the implementation of this recommendation, Bureau management believes that it could approach $1,000,000 to $1,500,000 per year. Additionally, the complete sale of the asset could result in an estimated one-time infusion of $4,000,000. This is also an option worthy of serious consideration since the City’s position as the station’s largest customer would help dictate favorable terms for the continued use of the facility.