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Norwalk Explains How Privatization Saves Money

NORWALK, Conn. – It isn't just that the men jumping on and off garbage trucks in Norwalk would be paid less if the Common Council approved a plan to outsource garbage pickup, city officials say. Part of the expected savings are directly related to the injuries those workers might suffer – which won't be charged to city taxpayers because the workers won't be city employees.

The city would save $360,000 in fiscal year 2012-13 if it were to outsource garbage collection, says Hal Alvord, director of the Department of Public Works. That figure would jump to $950,000 the following year.

If the plan is not approved, the council would need to add $800,000 to its 2012-13 budget, or the price of four garbage trucks. "Our newest truck is 12 years old," Alvord said. "If the truck is broken down by the side of the road or you can't get it out of the garage, the garbage isn't going to get picked up."

The cost of pickup by city workers would be $126 per household in 2012-13, Alvord said. This compares to $30 a household for recycling pickup, which is contracted to City Carting. Rowayton, which has contracted out garbage collection for decades, will pay $76 a household.

Eight public works employees are assigned to refuse. The city's garbage truck drivers get $30.64 an hour, and the laborers get $22.86 to $29.18 an hour. Private sector drivers get $20 to $23 an hour, and laborers earn $12 to $15 an hour.

The hourly rate does not include benefit costs, according to Jim Haselkamp, the city's personnel director. Alvord said benefits are equal to about 51 percent of a city worker's salary and 30 percent of a private contractor's salary.

"You can see right there, that's the basis for a big chunk of the savings," Alvord said. "Another big part of the savings that we get in Norwalk is from workers' comp from injuries."

Sanitation workers made up 10 percent of the public works staff from 2005 to 2010, but 42 percent of the workers' comp complaints came from the sanitation department. The regular sanitation claims totaled $538,000. Catastrophic claims – from employees whose injuries prevent them from returning to work – resulted in settlements of $1,206,115 to three people. A total of 1,400 work days were lost to sanitation claims.

The city's contract with AFSCME includes an incentive program. Sanitation employees leave when done they are done with their routes, working an average of 5.2 hours a day and getting paid for eight. "They're running behind the trucks," Alvord said. "They want to get done early. It's the incentive plan. They're lifting the wrong way."

One of the catastrophic claims was for a man in his 50s who underwent multiple knee surgeries, Alvord said. Finally his doctor said he wouldn't be able to return to work.

"The body isn't put together for that kind of work for a long time," Alvord said. "In the private sector, typically the people you find on the back of the truck are young people. In the public sector, in municipalities, that's not the case. Their work is based on seniority so there will be people who work on the back of a garbage truck until their mid-50s or early 60s. The body is not designed to take that kind of punishment for that many years. Eventually parts of the body just start to break."

The city expects to pay $662,542 in workers' compensation premiums for 2012-13, a 54 percent increase over 2011-12.

If the plan goes through, the eight workers would be reassigned as truck drivers and would be paid less. The city has agreed to give them a one-time lump sum payment of $7,000 as compensation, the amount of money they would lose over a year.

"We took this position on outsourcing solid waste because we had a way of continuing to provide that service to residents, to do it in a manner that provides significant savings of money and protects the jobs and health of our employees because nobody would get laid off," Alvord said.

The projected savings jump to $900,000 in the second year because the change would be phased in, he said. Officials say October would be the earliest date for the switch, as bids must be submitted and reviewed. The costs of the transition, such as the lump sum payment to workers, are also factored in.

"If the city had unlimited funds, would we be looking to do this? Probably not," Alvord said. "But we don't. The city has a tight budget."

Tomorrow: Privatization or outsourcing? City officials respond to claims made by union members.

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