Hilton Head Island's trash problems continue, with some residents facing the prospect of garbage collection rates nearly tripling.
Town Council last month ended its franchise agreement with Republic Services, effective March 31, after owners of short-term rentals and condominium regimes complained of trash piling up outside their units. Unable to come up with a solution, council chose to return garbage pickup to a free-market model.
Now island residents must find new trash haulers beginning in April. For residents who stick with Republic, the cost for weekly pickup will jump from $55 per quarter to about $155, and other haulers might charge similar rates.
Mayor Drew Laughlin and town manager Steve Riley argue a price hike was inevitable. They say Republic set an artificially low rate to get the town's contract, which prevented rates from increasing more than 2.25 percent a year. For Republic, the contract turned out to be a losing proposition, so the company was eager to end the five-year agreement after only two years, and threatened to sue the town to do so, both said.
"We spent 18 months trying to figure out how to salvage the situation, with no good answers," Laughlin said Friday. "And cost of service was going to go up substantially no matter what. The only way to avoid litigation was to renegotiate the contract to allow Republic to charge more. And at end of day, that wasn't going to solve the problem, and would eventually end up where we are today.
"... Republic made some faulty assumptions and underbid the contract."
Laughlin believes rates will become more competitive after other haulers announce their pricing.
Republic has warned that costs would increase because of lost business and the town's requirement that haulers provide no-sort recycling in their base price. Still, Riley said he was shocked by the increase.
Republic spokesman Russ Knocke said rates will be marginally higher than they were before the franchise agreement, when haulers weren't required to provide recycling service.
"It was an additional charge. Today, recycling is required ... which of course affects overall operating costs," Knocke wrote in an email.
Hilton Head Plantation told its residents the gated community is attempting to negotiate with Republic to hold prices at their current rate.
Before the franchise, once-a-week trash and recycling pickup for single-family homes ranged from $77 to $101 a quarter, according to an Island Packet phone survey of island providers. Twice-a-week trash and once-a-week recycling pickup for single-family homes ranged from $80 to $130 every three months.
Russell Hightower, public affairs manager for Waste Management's South Atlantic area, said the company has not yet set its rates but expects to do so by the end of next week.
Hightower, however, said he "would not be shocked to see prices double," due to higher service costs, an amorphous customer base and the new recycling requirement.
"Under a franchise, it's easy to keep your costs low because of the large, established volume of homes that are served," he said. "The greater the density of homes, the lower the price.
"The inverse is true, as well."
Hightower said Hilton Head property and homeowners associations can help lower their rates through an exclusive provider agreement, similar to an arrangement Sun City Hilton Head has.
James Lanier, division manager for Waste Pro, was unavailable for comment Friday.
Indigo Run resident Gene Sain was among those who received a $155-a-quarter quote from Republic. Sain questions why council did not rebid the contract, with changes made to address pricing and service issues.
"It seems like the town gave up pretty quickly as a way to reach a resolution, and the result has been residents have been left in the lurch," Sain said. "It seems to me that it would have made more sense to parse the problem ... and reach some reasonable middle ground."
Sain believes the town has shirked its obligation for a "graceful transition" to the open market. He expects a surge of residents will flood the Beaufort County Convenience Center with their trash and recyclables, seeking to lower costs -- at least in the short term.
"Right now, the town is effectively saying, 'You're on your own,'" he said.
Follow reporter Tom Barton at twitter.com/IPBG_Tom.