By Alex Malm
At the Monday, Aug. 15, Londonderry Town Council meeting one of the agenda items was in regards to the Waste Management contract.
Town Manager, Mike Malaguti, explained the company was looking for an increase in what they are getting paid by the town due to the economic conditions.
“Costs are going up and that’s the case for all our vendors and for us at home as well,” said Malaguti.
Malaguti stated that in February they received a letter that was requesting a 10 percent extraordinary increase for the contract. He explained that in the letter they cite that it would all the compensation from the town keep pace with what the operational costs are.
Currently the contract runs through 2026 and the contract dues include inflation increases that are capped at 3 percent and are based on the CIP.
Malaguti added that there is also a clause in the contract that allows relief from the contract if one of the parties is losing money on the deal.
“The letter makes specific reference to the language in the contract,” said Malaguti.
Malaguti said that they asked for the data and for Waste Management to explain why the contract is costing them more money now due to inflation.
Malaguti said that some of the issues include supply chain issues and increases for labor costs. Malaguti said that one of the concerns is that Waste Management may be able to win the legal argument that they can leave the contract.
“On the legal side both sides have an argument,” said Malaguti.
Malaguti said that the suggestion was to come to an agreement so they can continue to keep the level of service they have.
“The trash has to get picked up,” said Malaguti.
It was pointed out by Malaguti that he felt that they would see a significant increase in cost if they were to go with a different company at this point.
Malaguti said that the proposal is to have the increases be at the end of the contract with a .5 percent increase for next year then 6.5 percent increase in 2024, two percent in 2025, and one percent in 2026. Malaguti said that the increase would cost about $596,000.
“We believe the council should consider this strongly,” said Malaguti.
Town Councilor Joe Green argued that they should look at what other companies can offer them since Waste Management is trying to force them into agreeing to a significant increase.
Town Councilor Deb Paul said she was also in favor of looking for other vendors.
“I agree that we need to look at other companies,” said Paul.
The Council agreed to seek different deals before making a final decision.
“Let’s go find out what the best deal is,” said Town Council Chairman John Farrell.