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Trash pact may be sour deal for Hillsborough County businesses

TAMPA - Residential garbage rates will head lower in unincorporated Hillsborough County starting in October. For businesses, though, the situation is not nearly so clear. Under new garbage contracts county commissioners are set to approve Thursday, homeowners will pay about $20 less a year than they're paying now. Businesses won't know their rates for months, and the rates probably will vary from business to business.
That's because, under the process commissioners approved in September, the companies that submitted the lowest bids for the five residential zones also get exclusive rights to compete for the lucrative commercial sector. In theory, business owners will be able to get lower rates through competition between the three companies that won the residential business: Waste Management, Republic Services and Waste Services. Those three haulers are the same companies that handled all residential and commercial garbage collection in the county for the past 17 years. That three-headed monopoly resulted in higher, not lower, commercial waste service rates than in surrounding counties, according to a competitor, WCA Waste Collection. "They've just done a very good job of lulling the 10,000-plus businesses into a single model that says, 'This is what we have,' and they can control the market," said Brad Avery, regional marketing director for WCA. Avery said there is no incentive for Waste Management, Republic or WSI to compete aggressively. The result has been monthly collection rates that are from $108 to $121 higher on average than in the surrounding counties of Pasco, Pinellas and Manatee. "If there was an open competition … we wouldn't see our garbage increase as it has over the last 17 years," Avery said. It's hard to verify Avery's figures. The haulers don't reveal the rates they charge private companies and Hillsborough County does not ask for those figures. Denise Fairbanks of Avatar Packaging in Tampa has a 4-cubic-yard industrial trash bin — the standard size used by most convenience stores — at her business. Fairbanks said Waste Management charges her $320 a month to empty it once a week. "I'm sure there are cheaper services out there," Fairbanks said in an email. "You just have to shop." There are cheaper services, and you don't have to go far. Jeff Norman of Palace Properties LLC gets his 4-cubic-yard bin emptied once a week by the city of Tampa for $196.06 a month. Unlike Hillsborough, Manatee County bids out its commercial collection to private haulers instead of letting them negotiate contracts individually with the businesses. County officials say the process has yielded lower costs for businesses. For instance, the two private haulers who won the bidding in Manatee charge $178.26 a month for once-a-week pick-up of a 4-cubic-yard bin, almost 80 percent lower than what Fairbanks paid in Hillsborough County. Jen Bowman, who works for a commercial design company in Hillsborough, said her company recently ordered a 10-cubic-yard rollaway trash bin from Affordable Dumpster for $325 per haul. That comes to $32.50 a yard. In Manatee, the haulers charge $15.84 a cubic yard for roll-off trash bins. Dawn McCormick, a Florida spokesperson for Waste Management, said she could not comment on rates the company charges for commercial trash collection in Hillsborough. But McCormick said the new system will be competitive because businesses can choose from three haulers. "There will be the opportunity for the customers to get different quotes so there will be competition in the marketplace," McCormick said. John Lyons, director of utilities for Hillsborough County, also thinks businesses will benefit from competition among Republic, WSI and Waste Management. Lyons said all commercial contracts will end Sept. 30. Before then, the county will do an extensive outreach program notifying businesses that they can negotiate new contracts with any of the three vendors. "If I'm the John Lyons restaurant and I've got an agreement with one of these companies, on Sept. 30 at midnight, that contract ends," Lyons said. "The existing companies that have residential, even if those are the same companies, they have to start over." Avery of WCA said the company wants commissioners to open up the system to new companies to bring true competition. WCA's regional vice president, Bob Shires, wrote a Jan. 14 letter to that effect to commission Chairman Ken Hagan. "Even if the county mandates that the commercial contracts are to be void in October 2013," Shires wrote, "if the same three haulers are in the county the rates will not change for there is no incentive for them to solicit business." Hagan could not be reached for comment. But Lyons said it is unlikely commissioners will change the rules for commercial collection established in the bid documents. "I think that would undermine the whole process," he said.

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