From the Mayor’s Desk

Municipal purchasing is highly regulated by State law, specifically the NJ Local Public Contracts Law. Depending upon the dollar threshold or the type of product or service being sought, the regulations and restrictions become more and more specific and often cumbersome. Additionally, bids for municipal garbage contracts have their own set of highly regulated rules, which include a minimum 60-day bid advertisement period. 

 

The Township’s last garbage contract bid experience in 2019 was unlike anything ever experienced by anyone on our staff.  Where historically we would receive three or more bids, remarkable only one bid was submitted on a contract from our current supplier Gaeta Recycling. The value of the contract averaged approximately $1 million per year. 

 

We accepted a three-year option with Gaeta then spent the better part of the next 2 years investigating the experiences of our neighboring communities and reaching out to other refuse collection companies on how to better formulate a bid proposal, all in an attempt to make our 2022 Garbage Bid more attractive to other garbage companies and ultimately stimulate competition. 

 

In full compliance with the NJ Local Public Contract Law, the Township of Denville conducted a public sealed bid opening on June 16, 2022 for garbage collection and recycling collection/disposal services. Despite advertising statewide and taking other measures in an attempt to solicit multiple competitive bids as mentioned above, the Township once again only received one bid. The bid results for a 5-year garbage collection contract saw an increase from $106 per ton in 2022 to approximately $186 per ton in 2023, a 75% increase. The recycling collection and disposal rate saw a small year-over-year decrease of 15%. Without the ability under the NJ Local Public Contracts Law to negotiate or even reject the lowest responsive bid, the Township was left with virtually no alternatives other than to award a 5-year contract to Gaeta Recycling at its public meeting held on July 12, 2022.  As good stewards of the Public trust, when receiving only one bid on such a well-paid contract we naturally report it to the proper State authorities. 

 

As a result of the new garbage and recycling contract, the Township is required to increase its residential refuse collection fee. Denville residents will see the new rate reflected in their November 2022 utility bill, with the new refuse collection rate of $115.50 per quarter. This rate covers the cost of garbage collection and disposal, recycling collection and disposal, vegetative waste collection and disposal and the operational cost of the Denville Recycling Center.

 

In a survey of other Morris County municipalities who recently conducted public bid openings for garbage and/or recycling services, the results were similar with an alarming lack of competitiveness and increases normally exceeding 50%. Furthermore, in comparing our new rates with the current rates for two of the neighboring municipalities that have a subscription-based garbage collection service, the 2022 rates in Rockaway Township and Boonton Township are $117 per quarter and $115 per quarter for twice weekly garbage collection for Waste Management and Tassielli Disposal, respectively. It should be noted these rates for Rockaway Township and Boonton Township are strictly for garbage collection and do not account for the additional costs associated with recycling collection/disposal or vegetative waste collection/disposal, which are all incorporated into Denville’s new rate.

 

Denville has been able to keep its refuse collection rate unchanged since April 2010. However, the new 5-year contract will create an estimated $750,000 annual deficit in our refuse fee collections as compared to our associated refuse cost obligations. As such, the Township was required to implement a rate increase, which will be reflected in your November 2022 utility bill. Based upon our cost projections, Denville is confident the new rate will enable us to meet our refuse collection obligations throughout the 5-year life of our new contract, which expires on December 31, 2027.

 

Based upon our annual tonnage and even with the $106 per ton rate being paid under our current contract with Gaeta Recycling, which expires on December 31, 2022, we noted the garbage account was experiencing a shortfall and knew an increase was going to be required even if the bid price was the same as the 2019 bid. However, as disheartening as this increase may be, we are locking ourselves into a rate comparable to the current 2022 subscription rate of our neighboring communities are paying for TRASH ONLY and we feel confident that we can maintain this rate for the 5-year contract period, where they have seen annual increases in these neighboring municipalities.  We now have 5 full years to evaluate, plan, negotiate and decide if Denville would like to take control of our own destiny, pick up our own garbage or share a service with another community with garbage pickup.  It is not going to be an easy or inexpensive decision as 2 or 3 garbage trucks, manpower, workmen compensation insurance costs and dumping fees are all very expensive and big decisions that should not be made in hast.

 

On a final note, the Township Administration is keeping a careful watch on our finances during these inflationary times. The good news is all municipal departments are operating within budget and our anticipated revenues are meeting or exceeding projections. As of now, our costs associated with road resurfacing has increased by more than 20% as asphalt is heavily tied to the cost of petroleum and our natural gas budget is another concern as natural gas prices have nearly tripled since January 2022.   However, into the second half of 2022, we are in an overall good position as we move forward toward our 2023 budget cycle. 

 

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