Victoria City Council considers privatizing waste pickup
Aug. 26, 2012 at 3:26 a.m.
Updated Aug. 27, 2012 at 3:27 a.m.
As service for yard, brush and bulky waste continues running in the red, Victoria City Council will look at making changes to bring it back into the black.
Garbage pickup in Victoria could go private if the council heeds the city staff's recommendation at a budget hearing Tuesday.
Whatever the council decides, customers can expect a rate increase this year ranging from 48 cents to 98 cents.
Environmental Services Director Darryl Lesak recommends handing yard, brush and bulky collections over to Waste Management or another private company.
"We're not trying to make money, but we're not making enough money to pay for the service," he said.
The city charges $18.15 for residential trash, recycling, brush, bulky and yard waste pickup, but ends up subsidizing 67 cents per customer per month from the landfill budget.
The city is looking at three options: keeping the service public but increasing fees by 70 cents; privatizing yard waste collection and brush and bulky collection at an increase of 98 cents; or privatizing yard waste collection at an increase of 48 cents.
If the council votes to keep the service public, users could see a fee increase soon after Oct. 1. Otherwise, it could go private as early as December, Lesak said.
Privatizing the two collections would raise monthly fees to $19.13.
Because one-third of Victoria's population use either service, collections fluctuate every week, Lesak said.
Mayor Will Armstrong said there are mixed reviews to privatizing public services.
"It's something that other cities have done successfully and other cities have not," he said. "It's like any other business arrangement; it depends on who you're doing business with, the trust factor involved and the service level."
He said the variables are too great to make a statement until Tuesday's presentation.
Councilman Emett Alvarez said if the city continues providing trash service, it will need to make capital investments and purchase new equipment.
A trash truck costs about $125,000, Lesak said.
"Once we go forward with privatization, going back to the starting point would be a very significant investment if we decide to change our minds," he said. "It's not something I want to step into lightly. We need to know all the ramifications."
The trash issue is one of the final challenges to be resolved before the council approves the proposed budget and tax rate for the upcoming fiscal year, which begins Oct. 1.
Victoria residents can comment Tuesday about how they want the City Council to spend the proposed $130.78 million budget.
The council will vote whether to accept the proposed tax rate of 60 cents per $100 of assessed valuation.
The proposed tax rate is expected to collect $133 million, while the current tax rate brought in $129 million, according to the city.
The tax rate is made up of two taxes. The proposed debt rate is set at 25 cents while the maintenance and operation rate is at 35 cents.
Last year's total budget was $153.9 million with a tax rate of 65 cent per $100 of assessed valuation.
Councilman Paul Polasek said he is pleased with the proposed budget.
"This is a revenue-neutral budget," he said. "Any time we can lower the tax rate and it puts more money in the pockets of individuals, that's a plus, as long as we can continue to operate the budget efficiently."
Commercial, industrial and utility property values increased by 13.82 percent over last year, according to information from the city.
"It was higher than we expected, so the total valuation went up, which caused the actual tax rate to be set lower," he said.
Because property values are up, Polasek said they are able to lower the tax rate.
"The amount of money coming in will be basically the same as last year," he said.
He said this year's budget is smaller because there are fewer capital projects than last year.
Alvarez said the city is addressing a lot of priorities with the proposed budget, including personnel issues and maintenance to technology and equipment.
"We're able to not only give raises, but fix the compression issue (within the police department) and do a market adjustment," he said.
In trying to catch up with growth and outdated utilities, "the sign will continue to say 'Under Construction,' but that's a good thing," he said.
Armstrong said the budget is based on conservative sales tax revenue estimates.
"I am confident that our conservative estimate will give us the budget that we're looking for with some safety room, and that the budget will be completely funded," he said.
He applauded the administration and the finance department, headed up by Gilbert Reyna, for their work in preparing the budget.
"I'm excited about what's going to happen this next year," Armstrong said.