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Date: 5/2/2022
LUDLOW – During the Ludlow Board of Selectmen’s April 26 meeting, the board approved a special revenue fund for American Rescue Plan Act (ARPA) funds and discussed an issue with the bids the Department of Public Works (DPW) received for a new trash collection contract.
To begin the ARPA discussion, Town Accountant Kim Collins said all of the town’s money could be put into a special revenue fund, which would make it easy to fund.
“When they came out with the final rule, they did a $10 million standard amount that you could take as a municipality as revenue loss. Because we were awarded $6.3 million, we can take that as a revenue loss. As long as the expenses fit under general government services, you’d be able to spend the money on,” she said.
With this fund, Collins said the board would still be required to vote on any ARPA items, but it would be listed as a line item in the budget.
“It makes it a lot easier,” Board Chair Antonio Goncalves said. “Otherwise, we would be submitting and getting that money on requisition for each particular item versus we have it and we just expense it as we vote on it and we’re not going out to a third party.”
The board unanimously agreed to create a special revenue account for the ARPA funds.
To begin the discussion about the trash collection changes Town Administrator Marc Strange said the bids for trash collection for fiscal year 2023 (FY23) came in $375,000 over what was budgeted. The current contract ends on June 30. Collins also noted that the town’s insurance policy would be going up 7 percent as opposed to the anticipated 3 percent, to make that difference the town appropriated an additional $150,000 from the levy limit to the insurance.
Collins added that one issue is the town still uses manual trash collection while may companies are shifting to automated trash pickup.
“One of the issues we are running into is nobody wants to do manual trash anymore; everybody wants to do automated trash. When you send out bids nobody wants to do three-year contracts, they want to do five-year contracts,” she said. “So, we only really have one option at this point and in looking at that option if we were to go automated with them, you would be looking at the cost of the bins that would be added into their contract, which equates to about $400,000 for the next three years.”
The total cost for the bins comes from three bins required per household which equates to about $150 per unit with 7,407 units in town.
“In my opinion, automated is going to cost less in the future. You are going to have the opportunity to go out to bid and have more people bidding on it with automated because we couldn’t even get some of them to bid manual,” she said.
Collins also broke down the potential cost increase to residents with the higher than expected bids.
“The cost per unit for the town is $307, we charge everybody $100, so a third is what the fee is funding, the rest of it is being funded by the tax rate and concern the amount the trash is going up would actually equate to $50 per household,” she said.
If the town makes the commitment to automated trash collection, Collins said there is the option to pay that portion of the contract through free cash or ARPA funds. However, even with the potential appropriation from ARPA or free cash there would be a $320,000 deficit. When it came to paying for the bins, Goncalves said he was in favor of using the ARPA funds.
Board member Manuel Silva said he was disappointed in the way the trash discussion has been handled by the DPW and Board of Public Works.
“It is disappointing to deal with DPW, we asked for several months to please meet with us to discuss the trash problem and where it is going; and now here it is, sitting in our laps so now we have to come up to the solution to this problem where we could have done it early possibly,” he said. “It’s just mind boggling.”
One solution Strange offered for the bins is applying for a grant with the Massachusetts Department of Environmental Protection (MassDEP).
“MassDEP offers grants to pay for these bins, that grant just opened two weeks ago, we sent that grant to Jesse English at the DPW. I don’t know how much that’s for, but my thought was maybe doing a one-year contract to give us some time to figure it out and if we qualify for the grant,” he said.
Once the bins have been settled, Collins said the town could also pay $110,000 out of ARPA for a stormwater study and move an excess of $50,000 from the recycling fund into the trash, leaving a $160,000 deficit, which would need to be made up out of the DPW’s budget.
Strange also suggested maintaining manual collection for another year while the details are finalized.
“It seems like doing a one-year contract for manual is the best way to go while we figure out what to do with bins so if we can get a grant to pay for those bins then we can go automated in years two and three. It’s just hard to justify throwing $400,000 at bins if we don’t own them and it’s safe to say they won’t be here by July 1,” he said.
If the town sticks with manual trash pickup the town is looking at about a $370,000 shortfall. Going this route, Strange said the town would be required to put an article out on the floor at Town Meeting to take those funds out of free cash. He added the town would still have $1 million in free cash and $5 million in stabilization.
The board did not decide on what to do about the trash collection changes but continued the discussion during its May 3 meeting.