Garbage rate hike stuns business
Kelly Hayden, vice-president of northern operations for WAM Development Group, said he met with John Oldfield, owner of Kavanaugh Brothers - the only waste removal company in town - and was shocked by what he was told.
He said the new rates show that WAM, whose properties include the Yk Centre Mall, the territorial courthouse building, and Panda Malls I and II, will have to pay $52,201 for garbage pick-up next year - up from $29,568 last year. That translates into a 77 per cent mark-up even though service is being cut to four days a week from six.
"This is crazy," said Hayden. "When it's a monumental situation like this and you're given 30 days to sign up or they'll shut off your garbage service."
On Nov. 14, city council approved a five-year contract with Kavanaugh for the city garbage contract, but left out service for commercial users, who, after 30 years, are now expected to make their own arrangements.
Hayden said he hasn't had time to figure out how much to charge his tenants because some produce much more garbage than others.
The old system was based mainly on the square-footage of the building being serviced, while the new private contract will calculate the amount of waste being produced.
Oldfield said many of the stores in WAM buildings are either busy with the Christmas shopping season or will have to scramble to get approval from head offices down south to accept the new rates.
He said WAM, who let neighbours J.J. Hobbies and the Elk's Club use their compactor, will be doing away with that courtesy from now on.
City Hall's rationale was that commercial users were being undercharged. They found that while the residential portion of the contract generated $830,000 a year and cost a mere $380,000, the commercial sector brought in only $493,000 but cost $800,000.
Hayden said the city's lack of notice, however, means Kavanaugh can charge commercial users whatever they want because there is no competition in town.
"Because they haven't given businesses enough lead time, they're pushing the market up towards Kavanaugh," said Oldfield.
According to Kavanaugh, restaurants and retail stores will likely see the biggest increases to their rates, while large-scale apartments and condominiums may actually see their rates go down.
Bruce Underhay, the city's landfill supervisor, said the six-day schedule is being cut down to four in the new year because Tuesdays have been set aside for drop-offs of recyclable material only, such as cardboard and paper; and Saturdays are out because only a solitary gatekeeper will be on shift."We're just trying to increase efficiency," said Underhay.
Commercial users, which include apartment buildings, government offices and schools, say they're not offended at having to pay their fair share, but are upset that City Hall has kept them in the dark until now, with only weeks to go before the new contract kicks in.
"I just did the budgets in August," said Darren Pelley, regional manager of Yellowknife's largest apartment rental owner, Northern Property REIT.
"For me to take this starting Jan. 1 it would be a 50 per cent increase."
Pelley said his company already raised rents this fall, and legally cannot raise them for another year to recoup their costs, which he said will be an extra $58,000 next year.
He said Northern Property will try to encourage recycling, but it will be difficult policing what people throw into their trash bins.
He's also worried, with new rules coming in limiting the number of garbage bags for single-family units down to three a week, that people will begin sneaking their extra bags into his bins.
"I can't lock them," said Pelley.
"If I got an elderly person, they can't go out and try and undo a lock."
Over at Centre Square Mall, general manager Jennifer Marchant said her new rates will either go down or stay neutral because unlike other property managers with multiple locations and bins, Centre Square uses one easy-to-load 30-cubic-yard bin.
"It's just an accounting nightmare that's all, said Marchant.
She said it's going to be difficult to calculate the volume of garbage each of her tenants throws out. Under the old system, Centre square charged tenants by the square footage they occupied.
One city incentive to get businesses to reduce the amount of trash produced is a reduced rate for cardboard disposal, which the city recycles.
The city charges Kavanaugh a tipping fee of $65 per tonne of regular garbage, but only $30 for cardboard.
Oldfield said he has about a dozen cardboard bins on order.
He said customers will have the option to go for a smaller garbage bin plus the cardboard receptacle, which will reduce costs.
Oldfield has already made his rounds to business and property owners. He said many are angry for the short notice, but it was city council's decision not his.
"They're upset at the system that it's only the end of November, and first part of December that people are finding out about the Jan. 1 start," said Oldfield.
Several companies have opted to try getting by on a reduced number of weekly pick-ups, he said.
Mayor Gord Van Tighem said he realizes the city could've provided better notice, but the changes are necessary because too much garbage is being brought to the dump.
The dump takes in more than 10,000 bales of garbage a year and the city is looking to reduce that number as it prepares for a new landfill.
"The concept that was behind it was that the those that create the bulk of the solid waste pay the bulk of the fee," said Van Tighem.
He said if all goes well and less garbage goes to the dump, residential users may see their $11 monthly solid waste levy lowered.
When asked why the city didn't simply just raise commercial rates so that they were paying their share, Van Tighem said, "good question."