Monday, September 22, 2008

Guilt Free Shopping

In the WTF department, the Times Picayune reports:
Amid intense demand to collect storm debris stretching across two states, Jefferson Parish President Aaron Broussard said Monday that he has raised the price the administration pays contractors for hauling.

The increase to $12.33 per cubic yard, from $9.97 spelled out in a contract that was awarded before the storm season, went into effect Sunday, designed to sharpen Jefferson's competitive edge in vying for debris crews and to speed the pace of collecting tree branches downed by Hurricanes Gustav and Ike.

In case you don't get the WTF? reaction:
White said last week that SDT Waste & Debris, which charges $200 a ton to collect storm debris, would be called on first to handle the task. The city's other garbage collectors, Richard's Disposal and Metro Disposal, earn $30 and $60 a ton, respectively.

Is anybody still pushing the line that Orleans Parish residents should do as much of their shopping as possible in Orleans Parish? I stopped feeling that way two years ago, but, even now that any lingering personal anger has largely subsided, I really can't feel any guilt about spending money in Jefferson Parish that I could be spending in New Orleans. As a matter of fact, I do most of my grocery shopping at Terranova's or Canseco's on Esplanade, but that's a matter of convenience and supporting small businesses. I certainly don't feel any need to give the city my tax dollars. Can anybody seriously argue that I should?

For more on the subject, see Celcus (this post also) and my earlier post. Since we've heard this joke before, I'll repeat the question. Can anybody seriously argue that Orleans Parish residents, or people who work in Orleans Parish, have any kind of obligation to try to keep their tax dollars in New Orleans?

Alternate Question: Considering the fact that the city makes no apparent effort to set budget priorities and spends more for the same services than its more prosperous neighbor, how can anybody accept the budget shortfall/staff shortage excuse for anything? Jefferson Parish doesn't exactly have a reputation as a model of good government.

Update: As Al points out in the comments, $12.33 per cubic yard works out to just over $40 per ton. That still means that, at $60 and $200 per ton, two of the city contractors are being paid significantly more than Jefferson has started to pay its contractors. Those contracts were negotiated before the Ike and Gustav forced Jefferson Parish to raise its price, they were also negotiated when the price of oil was much lower. Unsurprisingly, the two contractors making pre-Ike wages don't seem to want any more work.

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The discrepancy is not as outrageous as it appears--except for SDT. You need to convert tonnage to cubic yards for an apples to apples comparison.

Loose yard waste weighs about 600 pounds per cubic yard, so Jefferson is actually paying about $41.10 per ton (more than nola is paying to Richard's) for collection.

Paying per ton is a preferred method because it provides the incentive to max out each load (e.g., really shove it in the trailer). If the contractors are paid by cubic yard, they earn more money by not compacting their loads (which can be signficant when you are talking about small tree branches).

I'm sure there is some research out there that would quantify the differences between contractors paid on a tonnage v. cubic yard basis, but it wouldn't surprise me if those paid by the ton collect 1.5 to 2 times more debris per load. If so, then Orleans is actually getting a decent deal if you discount STD, which is inexplicable.
You're right, I hastily made an apples to oranges comparison. Another Picayune article said that a ton was roughly four cubic yards, obviously it rounded up. Still, even with the adjusted figures, the city's getting a good deal from Richard's (actually pre-Ike/Gustav prices), but it's paying way too much for SDT and about 50% more to Metro than Jefferson's paying its contractors. That would explain why DRC and Richards don't seem to want any more business.
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