Monday, March 02, 2009

O.K., now let's see your fastball.

About a month go, I basically acknowledged that it was softball question when I asked:
How can SDT provide private collection so much more cheaply than any of the firms provide public collection?

Speculating about a possible reason, I wrote:
The private collection would be for buildings with five or more units, so there might be some economies of scale, but $10 per unit (per month) less than Richards charges the city? The private collection wouldn't necessarily be semiautomated, so there might be some savings from using manual collection, but yesterday's Picayune featured a relevant article about the cost of semiautomated garbage collection in Kenner.

In today's Picayune, Michelle Krupa asks the same question and provides a similar answer:
Still, why does SDT charge the city at least $6.75 more per unit each month than it charges private customers for the same services? Torres said it boils down to volume and frequency.

"A lot of people who have five-plexes and six-plexes, a lot of times they don't produce the garbage compared with a large family," he said.

Unlike with the blanket city contracts, SDT negotiates with individual property owners, often charging for fewer units or for less frequent service than the city requires, Torres said.

However, I've also asked a much tougher question:
Why is garbage collection cheaper with $115 a barrel oil than with $60 a barrel oil?
Two years ago, Richards* negotiated a $22 unit price with the City of New Orleans, now it offers Jefferson Parish a $17.90 unit price.
That doesn't explain why the mayor and Veronica White negotiated higher prices for garbage collection in Orleans Parish when oil was $60 barrel than firms are offering with with oil at well over $100 a barrel.

I can guess why Stacy Head doesn't ask that particular question -- she gets into a tiff with the owner of MCCI and gets accused of racism. Instead of singling out a single businessman, she might think it prudent to question the overall cost of garbage collection in New Orleans compared to Jefferson Parish. Unfortunately, the mayor can plausibly call that an "apples to oranges" comparison. So, why don't any reporters at the Picayune, or any of the city's weekly papers, ask the "apples to apples" question?

It's not chump change, BTW. Richards' collection area covers 60,000 households. If it charged the city the same price that if offered Jefferson Parish, it would save the city almost three million dollars a year.

Just to be clear: Richards offered Jefferson a unit price of $17.90 for semi-automated service, the same service that it charges New Oleans $22 for. It offered a lower price for manual.

*Sometimes spelled Richard's. If you use the Louisiana Library Database to look up old articles, you find different Times Picayune articles for each spelling.

Isn't that what her cardboard poster tried to do? Perhaps she shouldn't have used white paper so as not to upset anyone.

It was amateurish. The girl should watch some C-SPAN. If you're going to try to use cards to play to the cameras, at least make them professional looking.
I thought the cardboard poster compared what N.O. pays for garbage collection to what Jefferson pays. Since Jefferson uses manual and N.O. uses semi-automated collection, the mayor says that's an irrelevant comparison. Jefferson took bids for both semi-automated and manual collection before deciding to go with the less expensive manual. Richards' (Richard's in some articles) bid for semi-automated was significantly cheaper than the price it charges N.O. I don't think she singled out Richards (Richard's).
Stacy was also comparing total contract price and not per household price. It inludes the "Disney-like" services in the quarter.She was also using the wrong population for unincorporated Jefferson (455,000 which is for the entire parish).

Kenner with 70,000 residents is a pretty fair comparison to the three New Orleans Contracts.

Getting to the bottom of the numbers is tricky not helped by the obvious animus between Ms. White and Ms. Head.

A much simpler Question is why is Richards getting $22 when Metro gets only $18.
Your question had occurred to me, Mominem. It's certainly the more relevant one. I guess I like the thought of Alvin Richards trying to explain why he's charging Orleans Parish a higher price for semi-automated service than he offered Jefferson when gasoline (I guess diesel fuel, in this case) was so much more expensive.
So why does Kenner get semi-automated pickup for $10 per household?
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