COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL

south dublin county council crest

MEETING OF SOUTH DUBLIN COUNTY COUNCIL

Monday, April 11, 2011

QUESTION NO. 5

QUESTION: Councillor C. King

To ask the Manager to provide a detailed report on the sell off of this Council's Waste Service to a private operator, stating (A) why it was deemed necessary by the Management, (B) how many customers had the Council in March 2011 in comparison to March 2010 & 2009, (C) what was the expenditure and income related to the service in those three years, (D) how much was the service sold for and (E) what will happen to waiver recipients and potential applicants after the stated twelve months grace has expired?

REPLY:

The Waste Service in South Dublin provided for a three bin system - green, brown and black.  Each of these had a fortnightly collection provided.  Tbe green bin collection was provided by Greyhound Recycling and Recovery following a tendering process by the 4 Dublin Local Authorities.  The brown bin was introduced in July 2010 and was required in order that South Dublin could comply with the EU Landfill Directive.  The Council would have had no means of disposing of waste unless it was in a position to divert brown waste from the black bin and would have had to discontinue its collection service at that point.  The effect of this then was that the Council moved to fortnightly collections of brown and redisidual waste.

Since 2008 the private sector has been operating waste services in the county.  South Dublin maintained its position of a "pay as you go" system, intially through a tag system and later through the electronic credit system.  The Council service was one of the most competitive in the market place and until 2010 the Council, more or less, retained that position.  However, a significant decline in customer numbers coupled with a reduction in presentation rates and a decline in income against a backdrop of increasing charges for disposal, treatment and haulage of waste necessitated a review of the Council's overall position as continuing to collect waste in that environment was creating an unteneble situation.

The nature of the payment system in South Dublin means that customers only pay when they present.  Therefore when a customer leaves the service the Council will only be aware of it when (a) the customer notifies the Council or (b) when a customer fails to present over a long period and when this is at variance with their previous pattern.  However, from July to September 2010 75,000 customers took delivery of brown bins.  Since that time there has been 4,268 cancellations of service.  Presentation patterns also altered - particularly with the brown bin introduction as below

Average customer presentation
Black bins only  Non-waivers Waivers Total  % total
         
Once every 2 weeks    15,906          112   16,018         21.2%
Once every 4 weeks    21,588           9,033            30,621      40.5%
Once every 4-8 weeks   11,058             5,451          16,509       21.8%
Once every 8-12 weeks     3,585            1,081          4,666          6.2%
Once every 12-26 weeks              5,155           1,567           6,722 8.90%
Once more than 26 weeks                 856              199           1,055 1.40%
         
Total  58,148     17,443            75,591          100.0%

The Council made significant changes to the service in an attempt to hold customers however, even with the introduction of the Advanced Credit System costs continued to rise.  Below is set out the deficits incurredfor the years requested:-

 

Service Area Deficits
AFS  2009
Revised Budget 2010
Budget  2011
Collection
               2,820,160
                                       2,648,600
                      3,007,600
Disposal
               4,729,014
                                       2,750,297
                      9,066,365
Landfill Levy
               1,304,224
                                       1,770,000
                      1,477,000
Processing
               2,629,266
                                       2,842,184
                          768,585
Grand Total
             11,482,664
                                     10,011,081
                    14,319,550

The Council agreed as part of the bidding process that it was a requirement that the waiver would remain in place for a 12 month period.  Existing waiver customers will therefore receive the same benefit for that period.  The Programme for Government also sets out proposals for the introduction of a national Public Service Obligation which would provide for a fee waiver scheme for low income households.  It is premature therefore to address the issue of the waiver schemes in advance of that proposal.

In relation to the consideration for the sale of the service the detailed financial terms of the sale are legally confidential however the price paid by Greyhound was the highest of the bids received and is comparable with other successful disposals of large waste collection businesses by our colleagues in other local authorities.  The final sum - including savings - will be available when all contractual obligations are resolved and when the customer numbers are verified.  Any change to the Council's budget will be brought before the Members.  It should also  be noted that the Council will not now be in receipt of approximately €4.8m income for the domestic refuse service in 2010 however this is balanced against the significant savings yet to be made.