Hidalgo County prepares to privatize trash collection

Hidalgo County commissioners will begin soliciting bids this spring to privatize rural trash collection, a process projected to save the county up to $6 million annually.

Hidalgo County administrators are initiating preparations to receive bids from waste management companies in an effort to have a contract in place by April. Hidalgo County has steadily moved toward privatization of trash collection, eyeing the savings from closing collection stations and revenues collected from a franchise fee.

What’s unclear at this point is what form it could take.

The county will prepare two separate bid proposals requesting a breakdown of costs per household: one for servicing the entire county and the other for specific regions, said Sergio Cruz, Hidalgo County’s budget director. The two options will allow smaller companies to compete for the regional contracts and provide a greater sampling of costs.

“We want to get some cost comparisons so the county can make the best choice,” he said.

Hidalgo County budgeted a savings of about $1 million in this year’s budget from privatization. It eventually expects to save about $5.2 million annually by closing the county’s 10 collection stations, where residents carry their own trash and tires for disposal. The county also projects to receive about $800,000 annually in a franchise fee from the private trash company or companies that receive the rights to provide service to the rural areas.

Since Cameron County became one of the first Texas counties to privatize trash collection in 2005, every one of the state’s 10 largest counties has privatized except for Hidalgo County. But Cameron County has also encountered difficulties, primarily in convincing residents that they have to pay for the service and developing a successful payment model.

Cameron County initially tried to have the water districts collect the fees on utility bills before abandoning the idea after some districts refused to cooperate for fear of losing their own customers. Today, only about half of Cameron County’s 20,000 residents pay for trash collection.

If the program is widely adopted by colonia residents throughout Hidalgo County, rural trash collection is expected to minimize illegal dumping and reduce wildfires caused by trash burning.

But there are hurdles to overcome.

At a workshop to discuss the initiative, Precinct 1 Commissioner Joel Quintanilla said he was concerned privatization would put companies out of business. Several local trash collection companies already provide garbage disposal services for households in rural areas. Privatizing would force rural residents to change to the contracted company that offers the lowest rate per household.

Although the county wants to allow companies to bid for certain zones to alleviate that concern, it’s unlikely small companies would be price competitive against a large provider like Allied Waste, which holds the Cameron County contract. Cruz said breaking rural trash collection up into smaller zones would also hike the costs for some county residents since the contractor would lose the advantage of scale.

Residents in zones farther away from a landfill, for example, would likely pay more per month than those closer to it.

Precinct 4 Commissioner Joseph Palacios said the county needs an extensive public outreach campaign for rural trash collection to be successful. With hurricane season approaching, closing collection stations before colonia residents are adjusted or enrolled to the new service could lead to widespread illegal dumping that often blocks drainage canals.

Hidalgo County has been seeking ways to cut costs amid stagnant property tax revenues. Hidalgo County spends more than $5 million each year on sanitation, including the salary of employees at the collection stations and the so-called tipping fees charged by area landfills.

Hidalgo County is also seeking to eliminate its $250,000 cost for tire disposal by finding a vendor that will pick them up for free. The vendor would then shred the tires and sell the recycled material.

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Jared Janes covers Hidalgo County government, Edinburg and legislative issues for The Monitor. He can be reached at jjanes@themonitor.com and (956) 683-4424.

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