City of Phoenix: From Losing To Winning

Mark O'Connor,

Since 1979, the city of Phoenix has used managed competition to determine who would provide solid waste collection services for bid areas within the city.

However, our department's early experience in competing against private companies weren't successful. After losing the first two bids, we started experimenting with equipment, routing and productivity standards to minimize equipment and personnel, and the next three bids were successful.

We boosted our competitive edge by:

* Specifying automated collection vehicles.

* Developing pre-and post-trip vehicle inspections to identify immediate and potential repairs that, when combined with a preventative maintenance program, would minimize expensive breakdowns.

* Creating time standards for designing routes, using a four-day, 10-hour work week schedule. With accurate route sizes, workloads were maximized, personnel minimized and efficiency maintained at competitive levels.

* Maintaining a high service level. While we knew that private companies were capable of bidding successfully against the city, we made certain that our service level was very high - a theory which was confirmed by high marks in resident surveys. A high level of service escalates the competition.

In addition to these operational improvements, we developed a formal training program for our new drivers with 80 hours of classroom and behind-the-wheel time, in which we cross train the drivers on automated side loaders, rear loaders used for quarterly non-contained/bulk goods collection, as well as articulated loaders used to load large piles into rear loaders.

We created a mandatory annual defensive driving class covering lockout, tag out and backing procedures, as well as operational concerns such as negotiating tight alleys. In 1994, we installed cameras in the automated side loader fleet which helped reduce backing accidents.

We compensate our drivers well: The starting hourly pay ranges from $12.25 to a maximum of $15.52, with full benefits which add approximately 34 percent in value. We offer an annual safety incentive pay of $400 ($100 can be earned each quarter) if the driver has no vehicular accidents or industrial injuries.

We recently developed an updated computer-generated program to track complaints and requests for service used by a central phone bank of solid waste personnel. In addition, e-mail and the city website increase our customer communication.

During the past few years, we standardized our fleet and thus, purchased from only one company. This year, we opened our specifications and tried different equipment brands that showed good test results and whose bid prices were substantially lower.

Most of our improvements have come from various sources. We encourage suggestions from our employees and use teams representing all levels to consider a new approach's feasibility. For example, one of our most innovative improvements is using reciprocal agreements with private companies and other cities to accept solid waste at each other's landfill or transfer facilities at a set monthly tonnage level. The arrangement required individual negotiations, but not direct costs. The savings have been substantial.

Quantitatively, success occurs when we win bids and continue to provide service at or below the amount we have committed. We also judge our success from the results of customer surveys and from their remarks at community meetings. We benchmark Phoenix's success by measuring it against cities that provide a similar level of service.

We will remain innovative in developing ways to do the job better, such as:

* monitoring operations for cost overruns;

* fine-tuning work standards, routing and equipment;

* exploring green waste programs using the current collection system;

* completing our curbside recycling program (currently at 70 percent implemented); and

* evaluating a weight-based or volume based fee program.

Most of the cities that have discussed managed competition with us would like to continue providing solid waste services. If they need help, there are enough cities that have competed successfully against private haulers to provide a foundation on how to submit a winning bid.

Refuse trucks

* 120 automated side loaders (ranging from 14 cubic yards to 31 cubic yards): pri-marily White cab and chassis, Heil 7000 body

* 28 Rear Loaders: 10 LaFrance cab and chassis, 18 White cab and chassis, 10 Heil 24-yard body, 18 Leach 24-yard body

Containers: 300-gallon containers for alley service, Heil, RMI 90-gallon containers for curbside collection: Roto, Otto, Heil and Toter

Customers: 305,000 residential

Employees: 165 equipment operators, 12 foremen, 2 superintendents

Service area:21/43 of the city

Services: Recycling, residential, uncontained/bulk trash collection is scheduled quarterly. Twice-a-week collection: 1 day for solid wastes, 1 day for recycling

Local tipping fees: $21.25