How to Keep the Keys to the City

Jeremy K. O'Brien and Wayman J. Pearson

The month of January will be both exactly the same and completely different for the Solid Wastes Services Department (SWSD) in Char-lotte, N.C. The city's collection division will continue to pick up its residents' garbage while incorporating a few new words into its vocabulary such as "incentives" and "cost savings."

After a har-dwon turf battle with private haulers, Charlotte's SWSD has joined a small, but increasing number of public sector departments operating under contract.

Competition first made SWSD sit up and take notice in 1995, when the city issued a request for proposals (RFP) in an initial step to-ward portioning out its publicly-run solid waste services.

This RFP solicited regularly-scheduled, once-per-week refuse, yard waste and recycling collection service on the same day from the curb to the 33,905 residential units within the contract area and transportation of the collected waste to city-designated disposal sites.

The contractor also was required to provide bulky waste collection as needed, within one week's notification by the city or customer. The term was five years, with two, one-year renewable terms at the city's option.

One quarter of the city was at stake, but city employees were not allowed to bid. A major private hauler won the contract with a price of $5.66 per household per month.

However, when Charlotte issued a second, similar RFP for the western quarter of the city in January 1997, SWSD stunned its four competitors by underbidding them through a separate accounting division called "Solid Waste Services - Contract Collections" (SWS-ConCol). Its price, $4.87 per household per month, equated to $1.33 million lower annually than the nearest private competitor.

SWSD's Employee Plan By forming a separate entity, SWSD could mirror private sector business practices. As a result, SWS-ConCol can maximize a range of human resource performance incentives, new collection approaches and cost-efficient collection vehicles.

To provide the requested collection services, SWS-ConCol employs 28 laborers, including one full-time field service supervisor and 18 full-time sanitation equipment operators (SEO). It also will rely on four full-time laborers and four full-time equivalent temporaries to assist during peak yard waste collection times. SWS-Concol will pay SWS-Collection Division to provide reserves to cover primary collection crews during vacation, holiday and sick-leave absences.

To bolster versatility and teamwork, the employees will be cross-trained on each of the collection services.

In addition, employees are eligible for a gain-sharing program, through which they can add up to 25 percent of their base annual salary through cost savings below the proposed annual fee.

Employees work up to a 50-hour week and are paid for 40 hours at regular salary and 10 hours at premium pay. They are not paid for lunch or breaks but are required to take a daily 30-minute lunch. When all services are complete for the day, they can go home even if they didn't work 10 hours.

Collection Strategies Containerized refuse collection services are provided by seven crews, six of which are equipped with new, high-compaction, automated collection vehicles, who serve 1,053 households per crew daily.

The new automated trucks are equipped with a sweeper arm that allows for modest compaction while the truck is moving, minimizing the number of full compaction cycles and increasing route productivity.

The seventh crew is a "roving crew" and is equipped with a new, rear-loading, semi-automated collection truck. This crew serves disabled customers and the "missed collections" from the six automated crews.

Six permanent one-person crews that collect recyclables weekly are equipped with state-of-the-art recyclables collection trucks with waist-high "saddlebag" compartments. When full, these compartments are emptied mechanically into another compartment in the truck.

The vehicles have three compartments that not only separate the recyclables into plastic containers, other containers and fibrous materials, but compact the material as well.

Each recyclables crew serves a daily average of 1,062 households - a 10 percent increase over SWS's former average.

Four permanent yard waste collection crews work a once-weekly route. During the busiest nine months, each crew will be reinforced by two temporary laborers who will debag the yard waste and place it in the truck as the permanent employee drives. During the slower months, the permanent employee will drive the truck and collect the yard waste with one temporary laborer.

A single crew, with a permanent SEO, a temporary employee and two trucks, collects bulky waste. For three days each week, a rear-end loader collects items such as mattresses and oversized yard waste. On the remaining two days, a "white wares" truck picks up white goods such as discarded appliances.

The bulky waste crew's productivity level is the same as current average levels for SWSD: 1,516 households per productive collection hour. The bulky waste crew services its daily route in 711/42 hours and can assist with missed pickups.

Shiny, New Equipment SWS-ConCol is responsible for the equipment financing costs - both the principal and 5 percent interest, which is slightly above the rates the city pays for equipment lease purchase financing.

For maintenance, SWS-ConCol uses the city's Fleet and Equipment Management (FEM) services which employs 49 service technicians. These technicians are supported by a full-time professional parts staff, a $600,000 parts inventory, facilities with modern tools and equipment and a computerized equipment management information system.

SWS-ConCol's intergovernmental agreement with FEM includes guaranteed prices for preventive maintenance, routine repairs and a guarantee that it will not have any "routes standing" (i.e, routes not being serviced) due to the lack of functioning equipment.

SWS-ConCol's efficiencies have proved that if public entities keep the bottom line firmly in mind, they can provide services under a public contract with the same terms and conditions that would apply to a private contractor.

Its proposal and strategies represent the best of both worlds: public sector policies and control combined with private sector performance incentives and business practices.