Dive Brief:

• Wilkes-Barre, PA, hoping to save money amid city budget concerns, issued a request for proposals to potentially privatize waste and recycling collection for residential buildings with up to four units last month. According to a report by PFM Consulting Group, the city's waste operations have been running at an annual deficit of more than $1 million since 2010, as reported by The Citizens' Voice.
• Waste Management was the only company to submit a bid — $15.9 million for three years. J.P. Mascaro & Sons requested a packet, but did not bid. County Waste also declined to bid, citing a tight timeframe and concerns that this whole process was a city bargaining tactic in labor negotiations.
• An estimated 40 Department of Public Works employees are represented by Teamsters Local 401, which is in talks for a new contract. Because these employees also have other duties, such as pothole repair and plowing, it's not immediately clear how private labor costs would compare. Wilkes-Barre's Department of Operations will be reviewing Waste Management's bid in the coming weeks.

Dive Insight:

Wilkes-Barre's needs may be relatively small compared to larger cities, at just 6,800 tons of MSW and 3,800 tons of recycling per year. Though like any city, waste and recycling collection is still a growing expense to be managed. The city is in the process of paying off a new collection truck it bought last year and also has to contend with rising labor expenses. 

Making the shift to privatization may not be an easy choice either. The lack of multiple bids could make it harder to get a competitive price. The current nature of commodities markets may also mean that companies such as Waste Management will now be charging more, or bearing less financial risk, for recycling service.

Yet compared to the ongoing costs of maintenance, collection, benefits and tip fees that Wilkes-Barre is currently bearing, the city could decide it's worthwhile to relieve itself of the responsibility. What that will mean for the current city employees doing this work and residents that have grown accustomed to a certain type of service remains to be seen. There are many examples of complex transition periods from municipal to private service, though it's far from a new trend as local governments around the country continue to make this shift in large numbers.