Taking It Back

John Culbertson

Conventional Wisdom holds that we are in the midst of a slow but steady march towards privatization of municipal solid waste and recycling collection services. Several sources — most of them industry-sponsored, but also independent organizations like the Los Angeles-based Reason Foundation — have long touted the benefits of privatization, such as higher productivity, flexible compensation programs to motivate labor, dedicated focus on maintaining solid waste fleets and higher utilization of capital assets. But what are the benefits of going in the other direction? Could a city or county justify converting from a contracted collection service to public collection?

At first blush, most public-sector senior managers or private haulers would likely answer with a resounding “No!” Entering any business from scratch — not to mention a significant capital investment in fleet maintenance facilities and specialized collection vehicles, recruiting and retaining a difficult-to-manage labor force, and other challenges — poses risks. Throw in a dearth of qualified operations managers, the high cost of real estate for necessary facilities, the potential backlash from the private hauling community and the standard array of bureaucratic hurdles, and the task of “municipalizing” seems daunting indeed.

However, there are certain situations where it makes sense for cities and counties to forego contract collection and municipalize their collection service. Additionally, given the recent rate hikes incurred by municipalities who are re-bidding service areas after five, seven or even 10 years under a previous contract, imagining aggressive municipalization efforts in some areas may no longer be such a stretch.

The most straightforward example of taking back collection from a private contractor arises when a municipality already provides some collection services. Jacksonville, N.C., home to marine base Camp Lejuene, implemented curbside recycling in October 2005. Although the city always has provided refuse and bulky waste collection services, it opted to contract curbside recycling services. While city leaders gave no clear reason for this decision, limited knowledge about how to handle recyclables once they were collected, and an aversion to over- or under-estimating capital investment needed to serve a city of 11,000 single-family households likely played a role. In this case, the city opted to contract the service and duly selected a private hauler to do the work.

A 2005 review of Jacksonville's collection system revealed several service issues. First, the contract hauler was able to service all customers using only one truck per day for a five-day workweek (eight-hour days). Second, a single-stream recycling facility had just opened in Onslow County, where Jacksonville is located. Third, the city's fleet maintenance department was extremely successful at economically maintaining its fleet of rear-loader collection vehicles, which easily could be used for single-stream curbside collection.

In addition, at $1.74 per household, per month, the curbside contract was costing the city $203,000. By adding a full-time curbside recycling route (one new truck with a two-man crew) and redeploying a second rear-loader crew two days per week (eight-hour days) within existing downtime, Jacksonville could provide the service for an annual savings of $85,000. Ultimately, the city assumed recycling collection in January 2007.

Kerry Terrell, Jacksonville's sanitation superintendent, says the benefits go beyond cost savings: “By taking over recycling, we have a better handle on which households are recycling and can therefore improve recycling education. We didn't have that control with a contract collector,” he says. “City recycling crews have been instrumental in increasing recycling participation from 32 to 48 percent since we took over the service.”

While this situation may be somewhat unique, market dynamics in certain parts of the country make municipalization an attractive option. This applies specifically to a city or county entering the refuse collection business without the benefit of an existing collection operation.

Municipalities interested in this switch cite concerns over the expectation of significant price increases in the coming cycle of re-bidding contracts; continued efforts from contract haulers to provide only strictly defined services under the contract; frustration with perceived aggressiveness on the part of private haulers to apply additional fees for everything from fuel, cart replacement and other account services, and pressure from the city commission.

As more municipalities consider similar action, it's still unclear whether municipalizing collection services will become a trend.

John Culbertson is a principal for MidAtlantic Solid Waste Consultants and can be reached at
[email protected].