The City of Guthrie agreed to a new 5-year deal with Waste Connections of Oklahoma, Inc. for the collection and disposal of trash (solid waste).
The contract will begin October 1, 2023 and expires on September 30, 2028. Currently, the City has a five-year contract with Waste Connections that expires September 30, 2023.
The contract shows a 15.15% residential increase to the City of Guthrie in year one and various increases for commercial containers. In the previous contract, Waste Connections was locked in at a maximum 2% rate increase. According to city officials, Waste Connections was unable to keep up with inflation costs.
The percentage rate increase proposed for years two through five in the new contract is 5% per year across the board for all customer class and categories. Previously, Waste Connections had proposed an 8% increase.
“That 15% for the residential amounts to $1.30 a month increase (to the City),” Mayor Steve Gentling said. “The 5% in years two through five is about a $0.50 increase continually for those five years.”
Now, the City must determine what amount of an increase they want to pass along to residents.
The City has not adjusted the trash rates charged to local residential and commercial businesses since September 2006. Meanwhile, the City’s trash service cost will have increased by 24% at the end of the current contract.
In 2006, the City’s markup for residential customers was 89% and 48% for commercial accounts. When compared in 2022, the markup was 54% for residential and 20% for commercial.
The City’s net revenue decreased by nearly $200,000 going from $550,000 in 2006 to $360,000 in 2022.
Moving forward, City Manager Leroy Alsup advised the council to take into consideration the rate (and future rates) of Waste Connections to the City and mark it up 55% to the customers “to catch back up.”
For residential customers with one poly cart inside city limits (which is the vast majority of the more than 4,700 customers), the proposed increase would go from $13.24 to $13.47 resulting in a 2% increase.
“That would generate us $200,000 more than if we just sit still and never raise rates,” Alsup told the council. “Eventually if we don’t raise the rates, we’ll be paying customers for us to have the privilege to use the trash service.”
The revenue generated through the trash service funds the deficit revenue to maintain and operate the Convenience Center (city dump) and provides general funding for the Guthrie Public Works Authority.
Some citizens have shared their concerns that the City should not mark up the pricing and do it at cost.
“It takes money to operate the City,” Alsup said.
Alsup shared a list of projects totaling nearly $88 million that the City needs to address, including $31M to replace 55 miles of pre-1975 water distribution lines, $25M for 22 miles of sewer lines that need replace, $12M for road replacement to Sooner Road and 19th Street and $13M to replace nine bridges.
Two other possibilities with the added income would be to add two equipment operators ($95,519.96), and two additional firefighters ($106,850.16).
The council agreed for Alsup to discuss the proposed trash rate increase with the Finance Committee, which includes council members Tracy Williams, James Long and Brian Bothroyd, and return a proposal to the council for final consideration.