Sorting out solid waste budgets
Last summer, New York Mayor Michael Bloomberg’s decision to suspend glass and plastics recycling was taken widely as a signal that municipal waste departments were suffering. Many thought that if New York had to make severe cuts in its solid waste programs, other municipalities were sure to follow.
In fact, with the recent economic downturn, many major cities have had to deal with solid waste budget cuts. In most cases, cities are protecting the core aspects of their operations, such as picking up and disposing of garbage. Services considered to have secondary importance — recycling or special waste pick-ups — often are at risk.
Other municipal solid waste departments have been somewhat insulated from the ups and downs of the economy. Either they are supported by dedicated funds, or they have locked into long-term disposal and recycling contracts. Others are just lucky that their municipalities’ economies are not heavily dependent on more vulnerable sectors like manufacturing. Many cities and counties are simply finding ways to do more with less.
The most stable waste departments are those that are not beholden to a general budget. “Quite a few of our members operate as free-standing economic entities, where they’re not dependent on government revenues to manage their systems,” says John Skinner, executive director of the Silver Spring, Md.-based Solid Waste Association of North America. “They charge user fees to the people they collect waste from. So the economy doesn’t affect them as much as others.”
Besides, Skinner adds, solid waste management has always been a recession-resistant industry; certain amounts of waste always will be produced. “Waste generation rates are not strongly affected by the economy,” he adds. “There’s a lot of population growth throughout the country, and people move from one area to another. So some facilities have seen increases [in their revenues].”
When cities have to trim their solid waste budgets, they sometimes start with recycling programs because they have difficulty forecasting the long-term revenues from recycling, as may have been the case in New York, Skinner says. “The difficulty about recycling is that the benefits are there, but they are hard for the community to see, especially long-term benefits to future generations, such as energy savings,” he says. “That doesn’t translate into the bottom line. With the recycling markets being soft, they have a difficult time taking the long-term approach.”
Several major cities have had to really tighten their belts. Los Angeles, for example, is in a hiring freeze, which affects all departments, including sanitation. Other cities are looking to cut or trim their recycling programs. In Virginia, the Chesapeake-based Southeastern Public Service Authority currently is considering a major overhaul of the curbside recycling programs in several municipalities in the Virginia Beach area, including Norfolk, Portsmouth and Suffolk. Denver and Dallas have recently considered curbing recycling as well.
Other major cities are looking for alternatives to cutting recycling. In Atlanta, budget cuts have been so severe that Mayor Shirley Franklin has taken to enlisting businesses and volunteers for help in city clean-ups. Known as Trash Troops, the groups will help compensate for the elimination of the city’s $60,000 annual contribution to Keep Atlanta Beautiful and the Clean City Commission.
Although it is supported by an enterprise fund, the Minneapolis Department of Public Works has had its share of cost increases — primarily insurance, union pay raises, and truck and fuel costs. In response, the city has reduced the number of garbage routes from 17 to 15 and has re-evaluated equipment purchases and other opportunities for operational efficiencies, says Susan Young, the city’s director of solid waste and recycling.
The city is bidding out for several services this year, including a company to process the city’s recyclables. In light of budgetary concerns, Young is concerned that large, vertically integrated companies — those that collect, process, transport and dispose of waste (including recycling) — which also operate and benefit from landfilling trash, may selectively collect the most marketable commodities for recycling and dispose of the rest.
“Most of the recyclables processing capacity in the U.S. is controlled by companies that are maximizing their vertical integration,” Young says. “If my recyclables are processed by a vertically integrated company, there will often be pressure on the company to ‘vertically integrate’ my marginally valuable commodities [by burying them in one of its landfills instead of recycling them].”
In Houston, where the Solid Waste Department depends on a general fund, budget cuts and staff reductions have affected the department’s ability to respond to complaints and to provide other administrative services. The department also is not replacing equipment as often as it would like, and it had to close one of its four neighborhood depositories, where residents can drop off their heavy waste materials.
Yet the city has made an effort to continue its normal waste collection and curbside recycling programs. “As far as the bread and butter type services, the economy has not affected those parts,” says Marina Coryat, spokesperson for the department. “Recycling is a supplemental service, but we realize that if we cut recycling, it will have an impact for us with the garbage. They work hand in hand.”
In addition to curbside collection of recyclables, the city maintains two drop-off recycling centers that accept a wide range of materials. One of the sites collects household hazardous wastes such as oil and paint. In October, the city instituted an “extra capacity collection fee,” which charges people to dispose of any additional trash over the standard 90-gallon container. If residents need an additional can, the fee is $7.50 a month. Alternatively, residents can buy special $1 garbage bags at grocery stores or online through the city’s Web site.
Big city slickers
Other major urban solid waste departments have not been affected by the downturn in the economy. Palm Beach County, Fla., for example, has seen its waste tonnage increase the last two years, from 4.35 pounds per person per day to 4.4. It helps that this is an affluent area with few factories, whose budgets and workforces have proven to be more susceptible to downturns in the economy.
“Here in south Florida, we don’t have a lot of industry,” says Dan Pellowitz, business analyst for the Solid Waste Authority of Palm Beach County, based in West Palm Beach. “The housing industry has been doing fine, even through the economic downturn. We have a lot of tourism [which drives] the economy. We have very little manufacturing.”
Pellowitz admits that the recycling program has declined slightly in the last two years, but he attributes that to a natural plateau in the program, as well as, somewhat ironically, the volume of new construction in the area. The state’s solid waste authority simply has not been able to distribute recycling bins to all the new housing in the area yet, Pellowitz says. Once the homes have the containers, household participation in recycling, as well as actual tonnage, should rise in unison.
San Francisco also has been relatively unaffected by the economic downturn. The city’s “Fantastic Three” recycling program provides three carts for curbside pickup: blue for paper, bottles and cans; green for food scraps and other compostable material; and black for trash. The new recycling program has reached approximately 100,000 San Francisco houses and 7,000 apartment buildings, nearly doubling the recycling tonnage collected on those routes. The city has two things going for it: an economic incentive to recycle and a new recycling facility. If households reduce their garbage can size to 20 gallons from 32 gallons, they can pay a lower collection fee.
“We have sort of a pay-as-you-throw program, so we’re finding that our services are not being affected dramatically,” says Mark Westlund, spokesman for the San Francisco Department of the Environment. “We are generating less refuse overall, but we’re finding our recycling numbers climbing.” In 2002, the city reached a 52-percent recycling rate, up from 46 percent in 2001.
In March, the city opened Recycle Central, a $38 million recovery facility on San Francisco’s Pier 96 that is operated by locally based Norcal Waste Systems. “The facility enables us to more rapidly sort the materials collected residentially,” Westlund says. “This way we are able to meet the additional recycling that the city is participating in.”
For some municipalities, the saving graces in a difficult economy are user fees and drop-off recycling. In Lawrence, Kan., for example, a university town of about 90,000 people, the economy has had little effect on the solid waste program. “We are an enterprise fund [program], so we are not funded through the general taxes,” says Bob Yoos, the city’s solid waste manager. “We earn our own way, so as long as our customer base is there, we’re okay.”
It helps that the University of Kansas stimulates residential development, especially with retirees. In fact, waste revenues last year were 10 percent higher than expected. Furthermore, the city maintains a recycling rate of 30 percent, all through drop-off centers. Yoos says that the city has focused solely on the most marketable commodities — in this case newspaper, cardboard and yard waste.
He refers to the city’s method for marketing its recyclables as “the hierarchy-of-materials approach.” “We look at those materials that have the highest recycling rate,” Yoos says. “Some people are not convinced that you have a meaningful recycling program if someone doesn’t come to their curbside and take it away. Our recycling doesn’t cost us an arm and a leg, but we collect a lot of tonnage.”
Similarly, municipalities in Delaware have managed to limit the effects of an economic downturn by accepting only marketable commodities at their drop-off centers. The state does not have curbside collection. Cities save on labor costs, because residents separate their recyclables.
“People who participate are rule-obeying people, so the material is clean, and you can always find a market for it,” says N.C. Vasuki, chief executive officer of the Delaware Solid Waste Authority, based in Dover. “We look at the market first before we jump into any particular material. That’s why we’ve been able to withstand the ups and downs of the markets.”
Vasuki adds that user fees in the state have remained constant for a decade, while cities have worked to reduce the amount of soil required to cover landfills or looked for sources that will pay cities to take their soil. “Cities like New York have a totally different problem, because New York exports their garbage, so they are more subject to economic forces than those that deal with it in their own backyard,” Vasuki says.
Give me shelter
Clifton, N.J., a mid-sized town of 80,000, finds economic shelter in long-term contracts. It is only in the second year of a five-year garbage contract, although its recycling contract expires in October. Last year, the town made $200,000 on its recyclables, and it has been able to add oil, tires and electronics to its recycling program.
Wherever possible, it helps the bottom line if city labor is reduced as much as possible, says Alfred DuBois, Clifton’s recycling coordinator. The city does that by encouraging residents to reduce and reuse in their own kitchens and backyards, by collecting and composting their organic waste. Secondly, the city encourages manufacturers to package items in only the most marketable materials. That lets the city spend less time, energy and money collecting plastics that are not as likely to be marketable and are eventually hauled to the landfill.
Lastly, DuBois is a strong advocate of New Jersey instituting a bottle bill — a deposit system requiring a refundable fee on every can or bottled drink. “If we had a bottle bill in the state, it would be a lesser cost to the taxpayer, because the residents would be bringing the material directly to the drop-off centers,” he says. Right now, the city relies on residents to source-separate their glass, and the city has the space to store glass that is not moving on the market.
But if the city changed to commingled collection, it would be more difficult to keep costs down, DuBois says. “It’s getting harder because everyone is going commingled, and the day may come when we have to do it,” he says. “It would be better if the state went to a bottle bill.”
Mid-sized municipalities may be more insulated than big cities from economic woes, but rural areas and small towns may be having the toughest time, especially regarding recycling. In northern California, the Sacramento-based California Integrated Waste Management Board recently approved a reduction in the mandatory diversion goal for certain rural areas because of the economy.
For example, Modoc County and the town of Alturas, both in rural California, have suffered from a stagnant economy, a high unemployment rate, budget constraints and a hefty distance to major markets that purchase recyclable materials. To ease their burden, the state reduced the county’s diversion goal to 13 percent and the town’s to 16 percent.
In the end, the municipalities most likely to save money on solid waste services are those that get residents actively involved, either by moving their own recyclables or by paying extra for disposal. “Sometimes the only way people become conscientious about what goes into their garbage can,” Houston’s Coryat says, “is when you have fees.”
Kim A. O’Connell is a freelance writer based in Arlington, Va.
