The cost of trash collection service to the Borough is what the Borough pays for it, not what the customers pay through either periodic fees or per-bag charges.
If the Borough uses its own personnel and equipment, that cost is presumably what is reflected in the 2007 approved budget. That amount, before the “allocation of expenses” (i.e., overhead spread from other departments) is $1.26 million.
If the Borough were, for example, to contract with Mascaro, on the basis of a fixed fee per residence per month, the cost to the Borough would be the number of residences times the monthly rate.
Unless the trash hauler is paid strictly per bag, the per-bag PAYT method does not affect the overall cost to the Borough. PAYT is nothing more than a billing mechanism for recovering the real cost. If the real cost is less than the PAYT receipts, there’s a ‘profit’; if it’s less, the difference must come from tax revenues.
The Borough’s hope is that PAYT causes residents to recycle more and, generally, be less trashy. This is certainly a worthy objective. The question is whether PAYT is the way to achieve it.
Using the Borough’s own trash collection, there is very little that changes when recycling is increased and other trash volume is reduced. Reduced trash volume would reduce tipping fees, but they are $319K, only 25% of the basic sanitation department expense. Realistically, how much can we expect the trash tonnage to diminish. Remember, by the way, the PAYT method is based on volume, not weight. Has anyone heard of trash compactors?
If you cut trash tonnage by 25% (just a SWAG figure), the reduction would be about $80K, or about 6% of the total.
The other factor is the ‘recycling grant,’ which is budgeted at $69K. This is income from the state, which obviously reduces the net cost to the Borough (though not to the overall public). How much of this is attributable to the effect of PAYT is not clear. Then there’s an estimated $36K of receipts for recycled waste. Again, how much of that depends on PAYT isn’t stated. Since we already recycle to some extent, presumably both these revenue items would exist in some amount, even under the current per-residence system.
Then there’s the cost of the bags, which is estimated at $70K. Seems to wash the grant, doesn’t it?
The additional cost of administering and enforcing the PAYT scheme isn’t clear either. And the ability of the Borough to capably administer and enforce is yet another question.
If trash collection costs are a concern, maybe we should look harder at where the costs really are. There a nine full-time, two part-time, and one temporary employee in the budget. The full-time personnel account for about 90% of the basic wage cost of $427K and, since the other personnel receive few benefits, virtually all of the benefits cost. The wages and social security for the full-timers are about $389K. Add to that $113K for health insurance and $51K for vision and prescription coverage (average $18,200 annually per employee), and you get $553K. Yes, $553K annual personnel cost for a nine-person staff.
To validate PAYT, our public works department now suggests a trial, using volunteers. Of course, public works has no agenda (other than that of the Borough Manager) and the volunteers are, by definition, self-selected. A good way to assure an unbiased trial.
It’s a pleasure ‘talking trash’ with you.
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7 comments:
As you perfect your recipe of Chicken Cacciatore, we hope you will stir up a few more musings.
Oh boy, Breuer has his own blog. Now he can rample on, on the net where even more people can ignore him
When the borough suggest Pay As Your Trough Method without explore any other option my first thought was. Way are they doing this? I figured becasue it could allow them to get more money to not only to cover the cost of trash but to get additional money to cover other budget shortfalls. Has anybody say why come July 1st the porperty owner can't hire his owe trash hauler than using the borough.
Congrats for taking the step, Richard!
I KNOW this is going to be an interesting blog to visit.
You are, whether you realize it or not, an excellent teacher with that analytical mind of yours!
I know I learned from you far more than you'll ever realize.
Good luck and let the fun begin!
Anonymous 8:22 asked if a property owner could hire their own trash hauler.
My gut reaction after reading the documents posted on the Watching Phoenixville blog is that as long as you pay the $15/quarter fee to the Borough, the Borough doesn't really care what you do, as along as you use their bags to ask them to collect your trash. If you don't put out any trash or recycling for them to pick up, I can't see why they would care.
However, the advantage to a blog written by a lawyer is that hopefully, we can get a legal opinion on this question -- so I'd listen to what Richard had to say, over my gut! ;-)
In response to the person commenting at 9:16 AM today:
This blog is, as described, musings on various matters.
I do not intend it to be a source of legal advice and readers should not rely on any postings for that purpose.
I am fairly new to the area and can not say what is going on is right or wrong. But I want to share with you what happened in my former town in Western Pa. I am not saying that the two are the same but am giving you some food for thought. Our town has always been its own trash collector for as long as I can remember. Becasue of some law they needed more money but could not raise the tax milage any higher, it appears that there is a max millage that a town can impose. So then they created a trash fee. That was done for a few years, then a couple of years ago they suggested the Pay as You Throw method. Here is what upset the taxpayers. They said that people would actually save money under the new plan and that it would increase recycyling by 1/4. You still paid $25.00 per quarter, each 40 gal bag cost $2.50 if purchased at bourough hall, the price of the bags was $2.60 if purchased at a retailer. After a year the local paper did a report, some interesting facts came out. On the recycling aspect it only increased by 2% even 3 years later the 25% increase they said never came to be. A survey of 100 households found out that all of them is paying more with the Pay as you Throw, the amount of the difference between the flat rate to the PAYT was about 17% increase. If the item could not fit in a bag then it would be a bulk item pickup which meant you had to pay an extra $5 for EACH item, unless the item needed two guys to pick it up and put it in the truck. Then at that case the cost of the bulk item was $25. Rememebr this is for EACH item not for a bulk item pick up trip. Here is an example. A person puts out a computer desk (one that has a top hutch to it, they break it apart becasue it in one piece the brough would have charge $25.00 becasue needing two guys to lift it. So you have now two pieces and then there was a chair. So that is three items x $5 you would be billed $15.00 All the long many people had question about the actually cost that the borough trash service was, and people questioned how could you determine the cost of the bags and how could you figure out how many bags would be used by each household. It was interesting how they figured out how many bags a houshold need. You would think they would say depending on the size of the house would equal to certain amount of trash then would equal to a set number of bags. But for some reason in their calculations it turned out that every household would need the same amount of bags, no mater how many people in the house. Here is how they figured it out, follow closely, the cost of providing trash service was $900,000, the $25.00 per quarter per household would bring in $430,000. That leaves $470,000 divide it by $2.50 which is 188000 bags per year. Doing the math it means each home would need 3.6 bags a month. The newspaper found out the number of avergae bags that most homes used was 5 bags. Rememebr the cost of providing trash service was $900,000 the borough actually took in $1.1 mil a $200,00 over the actually cost to provide the service. So with a profit with this PAYT system you would think that maybe the following year they would have decrease the quarterly cost or the cost of the bag. NOPE they kept the cost of the bag the same but replaced the size of the bags with smaller bags. So you now need more bags therefore more money to the borough. So what happend with the extra $200,00, it went into the general fund and covers shortages in the budget. In a nut shell the PAYT method had nothing really to do with trash collection, it gave them a method of get more money becasue they had maxed out the tax millage.. I am not saying that is true for Phoenixville but maybe something to keep in the back of your mind. Has anybody asked Phoenixville what will they do if they collect more money than they need to provide for the service. FYI - When people found out that the borough was making a decent profit each year many people found their own trash hauler. Who did a better job of collection and cheaper. Well so many people went private that the borough this year is trying to figure out what to do about the trash service. Becasue it is costing them the $900,000 but they expect this year only to take in $650,000 in quater fees and the amount from selling of the bags. So they are estimating a $250,000 deficit on the trash end. Maybe the years that they had the profit they should have put the money into an escrow account to cover those years of a shortage, but no our officials don't think about things like that. So it will be interesting to see what their solution will be.
Sam Sitesr
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