BLOGEXCLUSIVE: Outsourcing Garbage Could Cost City Millions
- "CONCLUSION--the award of the 100% option at this time will cost the taxpayer AT LEAST $1,216,196 MORE than now. Does anyone expect that Council will see this as a "good thing??"
Take a look at this memo that was provided to me anonymously, prepared by City management for Senior City officials, and gasp! [I deleted the author's name publicly for obvious reasons but Administration will know who it is]. Outsourcing of garbage will cost us millions, not save us money! In fact, if the numbers are right, the loss itself in carrying costs of the millions it will cost us would almost equal the so-called savings we would be making by outsourcing! Double-click it to make it bigger
Obviously, this memo will have to be discredited now that it is public. I wonder who will be given that job?
The most ludicrous part as an example. The Tender documents I am sure will ask the winner to provide for new equipmnet. Who would buy our used garbage trucks? No one or not at a good price. We will write off a million or so as to its value according to the memo. My understanding is that most municipalities wait until their equipment needs replacing before they go to tender. Not Windsor with our Council's political agenda!
It will be fascinating to see how the final Administration Report presented to the Mayor and Council will read. It will be be fascinating as well to see if CUPE leadership brings up the money issues. What will be most fascinating is if Council will ignore all of this this because of the political advantage they would lose if they were seen to be backtracking in the face of those greedy CUPE [expletive deleted]. Can't have citizens inconvenienced after all for the next CUPE strike in a few years.
I just do not get it. Our garbage workers are just about the best in Canada and some want to outsource it. Hmmm, which company that does not rank as high on the list will get the work?
But look at all of the money that we will save is the knee-jerk response. We heard that in the daycare debate didn't we. It is a shame that Councillor Halberstadt does not say publicly at Council everything that he says after Council meetings in his BLOG that might give a different perspective on "savings:"
- "More than that, this strategy would staunch the flow of some 80 city workers–full-time, regular part time and temporary part time – onto the street. As it is now, temps will be separated in September, while 90 regular full-time and regular part-time workers will have bumping rights with 40 hired prior to 1993 totally protected.
HR is facing an horrendous task in placing displaced childcare workers within the corporation. This necessitates training money and knocking the city’s most junior employees out the door over the next few years. People will bump into jobs they don’t like and are not suited for, many of them lower paying. This can’t be good for efficiency.
If alternative employment is not found for all of the CUPE 543 employees with bumping rights, the contract allows the union to prevent the city from hiring some 120 summer students this year. This is virtually a certainty, according the 543 president Jean Fox. And the city would also be blocked from hiring up to 200 unpaid student and work placement positions. This can’t be good for productivity.
All of this comes at the cost of further damaging morale at City Hall. The delay and reassessment of closing three of the daycare centres would temper these emotion-sapping exercises.
The collective agreements tie the downsizing process up in knots, and I anticipate that bumping language will be a huge issue in the next round of negotiations. But that won’t come until 2012.
As for the budget issues, the seven closures will save the city $743,000 a year. That is welcome and significant going forward, but there will be little or no gain this year since the layoffs will not kick in until September.
Monday’s decision will save the city only $266,458 in salaries and day care accessories in 2010. Virtually overlooked by the media in Monday’s resolution were big-time transitional costs:
** $300,000 related to the placement of two temporary full-time employee relations assistants to assist with the placement, counseling and job-search assistance of pink-slipped employees.
** $5,500 for six additional counseling and trauma debriefing sessions through the employee family assistance program.
** $70,000 to allow all displaced employees an opportunity to complete their internal Computer Proficiency Certificate in addition to a variety of Employee Development workshops.
The cost of keeping Jefferson, Glengarry and College open is at a net city cost of $333,465 per year, less than the $375,500 for the three trauma-mitigation items listed above.
The $375,500 will be absorbed by Old Faithful – the under-funded Budget Stabilization Reserve. There will also be “temporary” utility and maintenance costs incurred prior to the disposition of the city-owned facilities. From the 400 Building and WFCU consolidation experiences, we know how “non-temporary” that is likely to be. The Glengarry facility is locked into a 99-year lease which will have to be bought out or otherwise dealt with.
We cannot forget the coterie of daycare non-union managers who will be absorbed within the corporation or given expensive severance packages.
As you can see the toll of restructuring is excruciatingly high in both human and dollar costs, although there is no doubt Monday’s decision was politically shrewd."
Politically shrewd ie be re-elected is more important it seems than people and pretend savings in the end.
And that brings me back to the garbage outsourcing debate that we will have.
Take a look at that memo again. Notice the $536,00 savings that the hardliners will gloat over and which will be plastered all over the pages and columns of the Windsor Star.
That sum is described as "the most optimistic calculation and the Savings will likely be much less." That $536K could of course be reduced by another 20% bringing the amount down to $428K. That amount would be further reduced by City management costs to what amount? Zero perhaps?
Don't look so closely at the TOTAL MINIMUM ADDED COST TO THE CORPORATION OF $1.7M.
That amount could be tripled to over $5M easily.
Add in over a million dollars in fleet and equipment losses and perhaps a higher tender price than projected along with management costs to police the contract and the elimination of the garbage worker jobs could wind up costing us close to $7M.
But of course, unless you read this BLOG and see the memo, you will never know a word of this.