Strategies for Bulky Waste Collection
in the City of Milwaukee
Prepared by
Anne Chapman
Rachel Johnson
Benjamin Williams
Brendan O’Brien
Carolyn Clow
For the
City of Milwaukee, Department of Administration,
Budget and Management Division
May 15, 2012
Workshop in Public Affairs, Domestic Issues
Public Affairs 869
©2012 Board of Regents of the University of Wisconsin System
All rights reserved.
For additional copies:
Publications Office
La Follette School of Public Affairs
1225 Observatory Drive, Madison, WI 53706
www.lafollette.wisc.edu/publications/workshops.html
publications@lafollette.wisc.edu
The Robert M. La Follette School of Public Affairs is a
nonpartisan teaching and research department of the University of
Wisconsin–Madison. The school takes no stand on policy issues;
opinions expressed in these pages reflect the views of the authors.
Table of Contents
iii Table of Contents
List of Figures
v List of Tables
v Foreword
vii Acknowledgments
ix Executive Summary
xi Introduction
1 Statement of Problem
2 Background
3 Regular Solid Waste Collection Schedule .............................................................. 4 Solid Waste Routes and Crews ............................................................................... 5 Other Solid Waste Collection Programs ................................................................. 5 Bulky Waste Collection in Other Cities.................................................................. 6 Overview of Policy Alternatives
6 Efficiency ................................................................................................................ 7 Fairness ................................................................................................................... 7 Ease of Implementation .......................................................................................... 7 Current Policy: Bulky Waste Collection in Milwaukee
7 Enforcement of Current Bulky Waste Collection Policy ........................................ 8 Apartment Collection (Five or More Dwelling Units) ........................................... 8 Bulky Waste Collection Costs ................................................................................ 9 Evaluation of Current Bulky Waste Collection Policy
10 Efficiency .............................................................................................................. 10 Maximize Diversion, Minimize Cost and Maximize Cost Recovery .............. 10 Maximize Neighborhood Cleanliness .............................................................. 10 Fairness ................................................................................................................. 10 Maximize Paying for Use ................................................................................ 11 Minimize Unequal Geographic Burden ........................................................... 11 Minimize Burden on Low-Income Residents .................................................. 11 Ease of Implementation ........................................................................................ 12 Option #1: Monthly Bulky Waste Collection Day
12 Efficiency .............................................................................................................. 12 Maximize Diversion and Minimize Cost ......................................................... 13 Maximize Cost Recovery ................................................................................. 17 Maximize Neighborhood Cleanliness .............................................................. 17 Fairness ................................................................................................................. 17 Maximize Paying for Use ................................................................................ 17 iii
Minimize Unequal Geographic Burden ........................................................... 17 Minimize Burden on Low-Income Residents .................................................. 18 Ease of Implementation ........................................................................................ 18 Legislative Impacts .......................................................................................... 18 Administrative Impacts .................................................................................... 19 Option #2: Volume-Based Outside-the-Cart Fees
19 Efficiency .............................................................................................................. 20 Minimize Cost .................................................................................................. 20 Maximize Cost Recovery and Maximize Diversion ........................................ 21 Maximize Neighborhood Cleanliness .............................................................. 25 Fairness ................................................................................................................. 25 Maximize Paying for Use ................................................................................ 25 Minimize Unequal Burden on Low-Income Residents.................................... 25 Minimize Unequal Geographic Burden ........................................................... 25 Ease of Implementation ........................................................................................ 26 Legislative Impacts .......................................................................................... 26 Administrative Impacts .................................................................................... 26 Option #3: No Bulky Waste Fee, Higher Solid Waste Fee
27 Efficiency .............................................................................................................. 27 Maximize Diversion ......................................................................................... 28 Minimize Cost .................................................................................................. 28 Maximize Cost Recovery ................................................................................. 29 Maximize Neighborhood Cleanliness .............................................................. 30 Fairness ................................................................................................................. 30 Maximize Paying for Use ................................................................................ 30 Minimize Burden on Low-Income Residents .................................................. 31 Minimize Unequal Geographic Burden ........................................................... 31 Ease of Implementation ........................................................................................ 31 Legislative Impacts .......................................................................................... 31 Administrative Impacts .................................................................................... 32 34 Recommendation
Appendices
35 Appendix A: Aldermanic District Demographics................................................. 35 Appendix B: Bulky Waste Collection Policies and Demographics of Other Cities
....................................................................................................................... 40 Appendix C: Enforcement and Garbage Nuisance Abatement in Milwaukee ..... 42 Appendix D: One- to Four-Unit Bulky Waste Collection Costs Due to Skid
Referrals ......................................................................................................... 42 Appendix E: Bulky Waste Collection Costs Related to Skid Referrals................ 44 Appendix F: Option #2: Volume-Based Outside-the-Cart Fee Estimates ............ 47 Appendix G: Pricing for Bulky Pickup from Selected Private Contractors ......... 51 Appendix H: Bulky Waste Cost Allocation under Option #3............................... 52 55 References
iv
List of Figures
Figure 1: Free and $50 Referrals, 2010–2011 ...................................................... 22 Figure 2: Estimated Number of Pickups, 2011 ..................................................... 22 Figure A1: Aldermanic Districts and Rental Housing .......................................... 38 Figure A2: $50 Pickups, 2008-2011 ..................................................................... 39 List of Tables
Table 1: Milwaukee Bulky Waste Collection Ordinance History .......................... 4 Table 2: Overview of Option #1:
Monthly Bulk Collection Day, Estimated Savings .............................. 12 Table 3: Cost Changes for Bulky Waste Collection, 2010–2011 ......................... 13 Table 4: Estimated Fuel Cost Reduction Attributable to 2011 Policy Change..... 14 Table 5: Projected Fuel Cost Reduction, 2013,
with Monthly Bulky Waste Collection ................................................ 14 Table 6: Estimated Fleet Direct and Fuel Cost Reduction
with Monthly Bulky Waste Collection ................................................ 15 Table 7: Estimated Staffing Cost Reduction
with Monthly Bulky Waste Collection ................................................ 16 Table 8: Estimated Cost Reduction Ranges
with Monthly Bulky Waste Collection ................................................ 16 Table 9: Proposed Schedule for Volume-Based Outside-the-Cart Fees ............... 20 Table 10: Overview of Option #2:
Volume-Based Outside-the-Cart Fees, Estimated Savings .................. 20 Table 11: Projected 2013 Bulky Waste Pickups with Volume-Based Fees ......... 23 Table 12: Projected Revenue with Volume-Based Fees, 2013 ............................. 24 Table 13: Projected Cost Reduction and Recovery Ranges
with Volume-Based Fees, 2013 ........................................................... 24 Table 14: Overview of Option #3: No Bulky Waste Fee,
Higher Solid Waste Fee, Estimated Savings and Cost Increases ......... 27 Table 15: Estimated Additional Costs and Cost Reduction Ranges
with No Bulky Waste Fee, Higher Solid Waste Fee ............................ 30 Table 16: Policy Matrix of Current and Proposed Policies,
Policy Goals, and Impact Categories ................................................... 33 Table A1: Aldermanic District Demographics,
Estimated* with One- to Four-Unit Skid Referral Data ...................... 35 Table A2: Aldermanic District Demographics,
Estimated* with Total Skid Referral Data for All Households............ 36 Table B1: Comparison Cities’ Demographics, Bulky Waste Policies .................. 40 Table D1: Number of Housing Units
Using City of Milwaukee Sanitation Service ....................................... 42 Table D2: Cost Attributable to One- to Four-Unit Residences............................. 43 Table E1: Estimated Costs Stemming
from Skid Referrals, 2008–2012, in Dollars ........................................ 44 v
Table E2: Sanitation Service Costs, 2008–2012, in Dollars ................................. 45 Table E3: Operations Driver/Worker Salaries:
DPW Sanitation Section, 2005–2012................................................... 46 Table E4: Operations Driver/Worker Salaries:
DPW Fleet Operations, 2005–2012 ..................................................... 46 Table F1: Skid Referrals, 2010–2011 ................................................................... 47 Table F2: Estimated 2011 Skid Pickups by Volume ............................................ 48 Table F3: Estimated Skid Pickups ........................................................................ 49 Table F4: Estimated Revenue ............................................................................... 49 Table F5: Estimated Cost Reduction and Recovery ............................................. 50 Table G1: Comparison of Prices from Bulky Waste Pickup Competitors ........... 51 Table H1: Current Estimated Bulky Waste Collection Cost ................................ 52 Table H2: Projected Additional Staffing Cost, 2013 ............................................ 52 Table H3: Projected Additional Fuel Costs, 2013 ................................................ 52 Table H4: Projected Fleet Direct Costs, 2013 ...................................................... 52 Table H5: Projected Disposal Costs, 2013 ........................................................... 53 Table H6: Projected Costs, 2013 .......................................................................... 53 Table H7: Calculation of Projected Cost Per Household, 2013............................ 53 Table H8: Projected Cost Increase, Cost Reduction
and Cost Recovery Ranges, 2013 ........................................................ 54 Table H9: Calculation of Solid Waste Fee for 2013 ............................................. 54 vi
Foreword
This report is the result of collaboration between the Robert M. La Follette
School of Public Affairs at the University of Wisconsin–Madison and the
Budget and Management Division of the City of Milwaukee’s Department
of Administration. Our objective is to provide graduate students at La Follette
the opportunity to improve their policy analysis skills while contributing to the
capacity of the city government to provide public services to the residents of
Milwaukee.
The La Follette School offers a two-year graduate program leading to a master’s
degree in public affairs. Students study policy analysis and public management,
and they can choose to pursue a concentration in a policy focus area. They spend
the first year and a half of the program taking courses in which they develop the
expertise needed to analyze public policies.
The authors of this report are all in their last semester of their degree program
and are enrolled in Public Affairs 869 Workshop in Public Affairs. Although
acquiring a set of policy analysis skills is important, there is no substitute for
doing policy analysis as a means of learning policy analysis. Public Affairs 869
gives graduate students that opportunity.
This year the students in the workshop were divided into six teams, three
under my supervision and three supervised by my La Follette School colleague
Professor Karen Holden. The Milwaukee-related research topics were solicited
from various city government departments by Eric Pearson, Budget and Policy
Manager in the Division of Budget and Management. The five authors of this
report were asked to recommend ways in which Milwaukee’s Department of
Public Works could increase user fee revenues or reduce costs associated with
the collection of bulky waste.
Most of the cost of solid waste collection in Milwaukee is recovered through user
fees. However, user fees only cover a small share of the costs of collecting waste
that won’t fit in the standard city garbage carts. The authors of this report conduct
a detailed analysis of three policy options designed to generate additional
revenues from and lower the cost of the collection of bulky waste.
This report would not have been possible without the support and encouragement
of city Budget Director Mark Nicolini and project coordinator Eric Pearson. A
number of other people throughout city government contributed to the success of
the report. Their names are listed in the acknowledgments section of the report.
The report also benefited greatly from the support of the staff of the La Follette
School. Cindy Manthe and Marjorie Matthews contributed logistic support, and
Karen Faster, the La Follette Publications Director, edited and managed
production of the final bound document.
vii
By involving La Follette students in the tough issues confronting city government
in Milwaukee, I hope they not only have learned a great deal about doing policy
analysis but have gained an appreciation of the complexities and challenges
facing city governments in Wisconsin and elsewhere. I also hope that this report
will contribute to the development of new DPW policies designed to recover a
larger share of the costs associated with the collection of bulky waste.
Andrew Reschovsky
May 2012
Madison, Wisconsin
viii
Acknowledgments
We are grateful to Thomas Bell, Wanda Booker, Paul Klajbor and Rick Meyers at
the City of Milwaukee, who provided valuable information and perspective
throughout the project. We also extend our sincere thanks to our colleagues and
the faculty and staff at the Robert M. La Follette School of Public Affairs. In
particular, we thank Professor Andrew Reschovsky for his guidance and Karen
Faster, Publications Director, for her exceptional editorial support.
ix
x
Executive Summary
In the face of tight fiscal constraints, the City of Milwaukee must identify
strategies to deliver cost-effective, high-quality services. One strategy that has
helped make this possible is the city’s implementation of several user fees for
solid waste collection. As part of its garbage and recycling service, the Milwaukee
Department of Public Works collects residential bulky waste, defined as waste left
outside of standard city garbage carts. The city charges property owners $50 when
they or their tenants throw away more than one cubic yard of bulky waste at a
time. Although the city recovers 95 to 100 percent of overall solid waste
collection costs through user fees, it recovers only about 10 percent of costs
through user fees for this specific service. Bulky waste collection is one of the
largest sources of unrecovered costs for the city’s solid waste collection program
as a whole.
This analysis examines Milwaukee’s current bulky waste collection policy
and three policy options: 1) a monthly bulky waste collection day; 2) a volumebased outside-the-cart fee; and 3) no bulky waste fee with a higher solid waste fee.
We assess the four policies in terms of the goals of efficiency, fairness and ease of
implementation. We estimate a policy’s expected efficiency by its ability to
maximize diversion from landfills, minimize costs, maximize cost recovery and
maximize neighborhood cleanliness. We assess a policy’s impacts on fairness by
considering how much the policy links the amount of bulky waste people throw
away to the amount they pay. We also consider the geographic distribution of the
policy’s impacts and the effects on low-income residents. Finally, we examine a
policy’s ease of implementation by considering its potential legislative and
administrative impacts. Based on our analysis, we recommend the City of
Milwaukee adopt a no-fee monthly bulky waste collection day with a limit of two
cubic yards. Of the three alternatives to current policy, this option strikes the most
favorable balance among efficiency, fairness and ease of implementation.
To implement this policy, the city would need an ordinance amendment
limiting free outside-the-cart waste to two cubic yards on a monthly scheduled
day, changing the policy from one free cubic yard per week. First, in terms of
efficiency, this policy would reduce the cost of bulky waste collection and overall
solid waste collection by about $320,000 by improving the predictability of bulky
waste pickups and speed of regular garbage collection. Reducing the monthly free
bulky waste allowance by 50 percent from four to two cubic yards would
encourage some additional waste diversion. We do not expect this proposal to
have a noticeable impact on cost recovery or neighborhood cleanliness. Second,
this policy balances competing concepts of fairness by more closely tying use to
payment, while continuing to offer free alternatives to a $50 pickup. The policy’s
specific effect on low-income residents and particular neighborhoods is
ambiguous as it depends on how residents currently use bulky waste collection
services. Finally, this policy rates well in terms of ease of implementation as it
makes incremental procedural changes that still align with current policy goals
and practices and would therefore likely appeal to members of the Common
Council and their constituents.
xi
xii
Introduction
The City of Milwaukee operates in an environment of increasing fiscal
pressures. It faces a perpetual challenge to deliver high-quality services with
limited resources due to years of shrinking shared state revenues and stateimposed limitations on property tax increases. This economic environment
forces the city to cut and control program costs by finding ways to deliver
services more efficiently or by consolidating functions and operations.
One area where the city has implemented such reforms is its solid waste
collection program in the Department of Public Works (DPW). In 2012, DPW
expects to collect solid waste and recycling for approximately 190,000 dwelling
units. These households consist of all city residences in buildings with four or
fewer dwelling units, as well as approximately 560 apartment complexes with
five or more units that contract with the city for solid waste collection
(Department of Public Works 2012h).
The city charges the owners of properties with four or fewer units a regular
solid waste fee. For 2012, the fee is $42.88 per quarter, or $171.52 per dwelling
unit for the year, and it is expected to generate about $32.5 million in revenue
(Department of Public Works n.d.b). Property owners can obtain additional
garbage carts and pay $10 per quarter per additional cart, an arrangement that
imposes more of the cost of producing garbage on the property owner.1
The city uses the solid waste fee to recover a target of 95 to 100 percent
of its overall solid waste collection program costs (Department of Public Works
n.d.b). In 2011, the city met this target, with the charge recovering about
98 percent of solid waste costs. However, in 2012, solid waste fee revenue is
projected to fall short and to recover 92 percent of overall solid waste costs.
Costs not recovered through fees must come out of the city’s general fund
(Department of Public Works 2012a and 2011a).
As part of regular, almost weekly solid waste collection, DPW picks up
a limited volume of bulky waste, the extra material placed outside standard city
garbage carts for pickup. Waste exceeding one cubic yard in volume requires
a special pickup, for which property owners are charged $50. The City of
Milwaukee’s solid waste regulations include bulky waste as one of nine
categories of solid waste and define it as discarded articles including but not
limited to furniture left outdoors on the curb or in the alley for pickup (City of
Milwaukee 2010a). With a projected cost in 2012 of $1.1 million and about
$100,000 in revenue from special pickup fees, the city’s bulky waste collection
program is one of the largest drivers of the solid waste program’s unrecovered
costs (Department of Public Works 2012a; Klajbor 2012; Bell 2012b).
This report will explore options for the city to reduce costs, increase
revenues and improve efficiencies associated with bulky waste collection. The
analysis will consider the city’s bulky waste fee structure and collection schedule
1
To encourage recycling, the city does not charge for recycling carts or collection (Department
of Public Works n.d.b).
1
for dwellings with four or fewer units and will evaluate three policy options to
make potential improvements in efficiency, fairness and ease of implementation.
Statement of Problem
Among the key factors driving bulky waste collection costs are employee
compensation (i.e., salaries and fringe benefits), which in 2012 are projected to
account for approximately 60 percent of costs. The second highest expenditure is
fleet (i.e., trucks and related equipment) and fuel costs, together projected to make
up about 15 percent of 2012 costs. A smaller but related program expense is the
disposal cost that the city pays in landfill tipping fees, projected to make up about
10 percent of the 2012 bulky waste program costs. The remaining costs consist of
overhead and operating expenses (Department of Public Works 2011a; Klajbor
2012). As the following description of bulky waste operations demonstrates, the
volume and weight of bulky waste that residents leave for DPW crews to pick up
drive costs for compensation, fleet, fuel and disposal. However, the fees users pay
for this service fall short of 100 percent cost recovery.
Bulky waste collection is one of the primary factors driving the solid
waste collection program’s relatively low cost-recovery rate is. Under current
policy, DPW crews collect up to one cubic yard of waste outside of a resident’s
garbage cart, free of charge, on their regular routes. Larger amounts of waste
involve a special pickup and extra equipment that costs about $250 for each stop.
For pickups involving more than one cubic yard of waste, the city charges $50.
Bulky waste that is too heavy for the regular crew to lift requires the special
pickup, but the property owner does not have to pay the $50 if the waste is less
than one cubic yard, approximately the size of an armchair (Klajbor, Bell and
Meyers 2012). Disposal costs (i.e., landfill tipping fees) vary with the amount of
waste residents produce. The city pays $37.03 per ton in landfill tipping fees,
including a state-imposed charge of $13 for each ton (Bell 2012b; Sandler and
Bergquist 2011). Tipping fees accounted for $11.5 million in City of Milwaukee
expenditures in 2011 (Department of Public Works 2011a). The more bulky waste
that the city collects, the more costs the city incurs for disposal.
Policy options for recouping more of the cost of bulky waste collection
must reduce disposal costs, increase revenues, improve collection efficiency or
incorporate some combination of all three elements. Because disposal costs relate
directly to the amount of waste residents throw out, policies and fee structures that
provide disincentives for producing bulky waste could reduce the city’s tipping
fee disposal costs and the cost of collection operations. At the same time, some
residents would be willing to pay higher fees to have DPW pick up more bulky
waste, rather than reduce their waste to avoid fees. In effect, these individuals
could help mitigate unrecovered costs by paying more when they use the pickup
service.
In considering any of these avenues, policymakers would need to account
for the following caveat: with any policy that imposes increased costs or disposal
constraints on residents, there is a risk that some people will respond to such costs
or restrictions by illegally dumping waste on other private properties or onto
2
Milwaukee’s estimated 3,000 city-owned vacant lots (Booker 2012). Illegal
dumping threatens public health and safety, reduces property values and harms
neighborhood aesthetics. One strategy the city has employed to reduce illegal
dumping is the installation of cameras on lots that are frequent sites for dumping.
In addition, the Common Council increased the fine for illegal dumping in 2010
from $120 to $1,500 to $5,000 per offense (Legislative Research Center 2010b).
The cost for the city to clean up illegal dumping was approximately $175,000 in
2010 and in 2011 (The Daily Reporter 2011). Because of these factors, we will
consider impacts on illegal dumping and neighborhood cleanliness, in addition to
factors that affect cost and revenue, in our analysis of bulky waste policies.
Background
The city’s bulky waste collection practices have undergone several major
changes within the past five years. Prior to 2007, the city collected unlimited
bulky waste separately from the regular solid waste routes at no charge to the
resident or property owner. The resident only needed to telephone the DPW call
center to arrange a pickup (Booker 2012). Effective January 1, 2007, the city
amended ordinances to create a $50 fee to property owners per pickup of bulky
waste exceeding four cubic yards, except for waste collected during the city’s
annual Clean and Green program described on page 5 (Legislative Research
Center 2006). When this change took effect, DPW reduced the size of sanitation
routes to allow crews to collect up to four cubic yards (about the size of two
sofas) of extra bulky waste along regular collection routes. This change resulted
in an increase in routes from 67 to 77 summer routes (Booker 2012). Calls from
residents to arrange pickups for four cubic yards or less were not necessary.
However, any amount beyond four cubic yards required the property owner to call
DPW to request a special $50 pickup.
Effective November 25, 2009, the amount of bulky waste residents could
put out before incurring the $50 charge decreased to two cubic yards (Legislative
Research Center 2009). This change expanded the size of the collection routes
and cut the number of routes to 73, each serving approximately 600 to 650
households, on average, per day (Booker 2012). Finally, effective January 1,
2011, the amount of allowable free bulky waste was reduced to one cubic yard
(Legislative Research Center 2010a). This change did not result in a change in the
number of routes or route size. In 2011, DPW observed a spike of 64 percent in
requests for $50 pickups. The department speculates that this increase likely was a
result of the reduction in allowable free bulky waste collection from two cubic
yards to one cubic yard (Bell 2012a). Table 1 summarizes the bulky waste
ordinance changes.
3
Table 1: Milwaukee Bulky Waste Collection
Ordinance History
Change
Effective Date
From free collection of all bulky
waste to $50 for more than 4 cubic
yards each week
Limit for free bulky waste reduced
from 4 to 2 cubic yards each week
Limit for free bulky waste reduced
from 2 to 1 cubic yard each week
Jan. 1, 2007
Nov. 25, 2009
Jan. 1, 2011
Source: Legislative Research Center (2010a; 2010b; 2009; 2006)
Regular Solid Waste Collection Schedule
The DPW collects solid waste on an almost weekly schedule that varies
to account for holidays and winter weather. There is a winter schedule from late
November to April and a summer schedule from April into November. During
the summer, the department guarantees garbage collection once per week and
recycling collection once every three weeks on a designated day for each
household it serves (Department of Public Works 2012e). In 2011, residential
service included 33 scheduled collection days per household (City of Milwaukee
2011) and perhaps 12 unscheduled winter pickups that occur every one to two
weeks. DPW personnel who collect solid waste are also responsible for snow and
ice removal. Holidays and severe weather limit the ability of the city to guarantee
weekly solid waste collection from the end of November to the beginning of April
(Department of Public Works 2012e). Some of the equipment used for waste
collection is also used for plowing snow and applying salt to deice roads. This
double duty necessitates flexible scheduling for waste collection (Klajbor 2012).
As part of its regular solid waste collection, DPW collects recycling on
three of its 26 recycling routes once per week rather than once every three weeks,
from about 15 percent of households. DPW collects recycling once a week on
these routes because the households use 18-gallon recycling bins, which fill up
more quickly than the 95-gallon recycling carts used by other households. The
city uses this system because households on these routes were putting garbage
into the recycling carts, leading to contamination of the contents of recycling
carts. The three-week recycling collection schedule also led to a sanitation
problem as garbage in the recycling bins accumulated and decomposed during
the three-week recycling period (Meyers 2012).
In addition, mandatory, scheduled unpaid days off for city employees,
affected the solid waste collection schedule. The city uses these furlough days
to help balance its budget by reducing labor costs. Collection does not occur on
furlough days. DPW had four furlough days in 2011: April 25, May 27, July 1
and September 2, coinciding with the Easter, Memorial Day, Fourth of July and
Labor Day holidays (Department of Public Works 2012e).
4
Solid Waste Routes and Crews
To collect solid waste, the city operates combined routes organized into
six sanitation districts based on geographic areas of the city. The routes are
characterized as combined because they involve the collection of garbage in carts
and the collection of bulky waste left outside of carts. Each route is sized to serve
600 to 650 households per day (Booker 2012). The department operates 73 routes
in the summer and 77 routes in the winter.
Each crew comprises two operations driver/worker positions. These crews
operate semi-automated solid waste collection packers. The packer’s semiautomatic functionality requires a worker to line the cart up with the lifter, a
mechanical claw-like device. The lifter picks the cart up, lifts it above the packer
and flips it over so the contents fall into the hopper. When the crew comes upon
less than one cubic yard of bulky waste left outside of a cart, DPW workers pick it
up and put it in the packer. Both the driver and worker are responsible for picking
up an item and putting it in the packer when the item is too heavy for one worker
(Booker 2012).
Sanitation crews travel streets and alleys to collect solid waste. If the
household has an alley, the collection occurs there. If the household does not have
an alley, collection occurs at the curb. All households must place their solid waste
carts and bins at their collection point by 7 a.m. For curbside service, residents
must have carts off the curb by 10 p.m. the day of service (Department of Public
Works 2012d). If residents have recycling bins, they must place them next to their
garbage carts before sanitation crews arrive on the scheduled day. Forty-seven
percent of solid waste collection occurs on streets and 53 percent occurs in alleys
(Booker 2012).
Other Solid Waste Collection Programs
To keep the city clean, the department supplements its solid waste
curbside collection with a Project Clean and Green and a Weekend Cleanup Box
program. Project Clean and Green takes place during the spring and fosters
neighborhood pride and ownership. Collection crews target one zone each week
for a free spring bulky waste pickup. Households within a targeted zone can, at no
charge, leave bulky waste such as unwanted furniture, mattresses and household
items at the collection point on the scheduled day. The program collaborates with
community organizations to coordinate cleanups, street and alley sweeping,
graffiti removal and neighborhood beautification (Department of Public Works
2012b).
For its Weekend Cleanup Box program, DPW places large boxes
throughout the city. Residents can dispose of bulky waste in these boxes free of
charge. The program makes it convenient for residents with limited access to
transportation to dispose of bulky waste without charge. The program minimizes
illegal dumping and nuisance garbage. The department plans to place 257 boxes
throughout the city during the summer of 2012. DPW staff have observed positive
community response to the program, which collected 629 tons of waste in 2010
(Bell 2012a).
5
Bulky Waste Collection in Other Cities
To explore bulky waste practices in comparable cities, we examine the ten
cities referenced in a 2009 La Follette School report studying pay-as-you-throw
policies (Hall, Krumenauer, Luecke and Nowak 2009). Of the ten cities,
Milwaukee had the second highest poverty rate (29.5 percent) and the lowest rate
of owner-occupied housing (43.6 percent). We will explore the potential impacts
related to poverty and homeownership when discussing the goal of fairness in
evaluating alternative policy options. Appendix A and Appendix B explore
demographic differences between Milwaukee and the comparison cities. Weather
is another difference. Milwaukee has an average annual snowfall of 47.3 inches,
similar to Minneapolis and Lansing, Michigan, and considerably less than Grand
Rapids, Michigan. The other comparison cities are not similarly affected by
snowfall.
Over time, the trend across these cities is a reduction in the amount and
frequency of city-provided bulky waste collection. Most comparison cities have a
scheduled collection day to facilitate planning on the part of the city and
customers. Portland, Oregon, and Sacramento and San Jose in California have
eliminated bulky waste collection, transferring that function to private contractors.
Fort Worth is the most generous, allowing up to ten cubic yards per month for
free. Minneapolis collects almost any type of bulky item and takes responsibility
for recycling and disposal of bulky waste with the goal of maximizing the amount
of waste recycled. Grand Rapids and Lansing use prepaid bulk stickers or bags to
charge for bulky waste without adding charges to customers’ utility bills. Table
B1 of Appendix B summarizes demographics and bulky waste policies of these
cities.
Overview of Policy Alternatives
The Budget and Management Division of the City of Milwaukee requests
an analysis of policy options for modifying the city’s solid waste fee system for
dwellings with four or fewer units. The aim is to reduce residential solid waste, to
allocate costs more equitably by better distributing them to higher generators of
solid waste and to increase collection efficiency. To this end, we evaluate three
policy options that focus specifically on improving the efficiency, fairness and
ease of implementation of bulky waste collection:
1. Pickup of any volume of waste left outside of the cart would cost $50, but
residents would be able to dispose of two cubic yards of bulky waste, free of
charge, once per month on a regular collection day.
2. The city would charge property owners for any outside-the-cart waste by
volume, according to a graduated fee schedule.
3. The bulky waste fee would be abolished, and the flat solid waste fee would be
increased to achieve 100 percent cost recovery of all solid waste costs,
including bulky waste collection.
6
We evaluate current policy and each option according to the following three
policy goals: efficiency, fairness and ease of implementation.
Efficiency
We measure efficiency by assessing how well each option maximizes
diversion, minimizes cost, maximizes cost recovery and maximizes neighborhood
cleanliness. For each policy option, we define a “base case” estimate of cost
reduction and projected revenue under an initial set of assumptions. We also give
a range of estimates under “conservative” and “optimistic” assumptions.
Conservative assumptions produce higher cost and lower revenue, whereas
optimistic assumptions result in lower cost and higher revenue. Changes in the
cost of solid waste collection and the amount of revenue collected may vary
independently of each other.
Fairness
We consider two types of fairness. First, we assess each option’s ability to
link the amount of waste people throw away with the fees they pay for waste
collection. The purpose is to strengthen the relationship between the volume of
waste and the fees property owners are charged. Second, we estimate the policy’s
potential to minimize any unequal burdens the policy poses for low-income
residents and residents in specific geographic areas of the city, whether they are
owners or renters.
Ease of Implementation
We measure each option’s ease of implementation according to its
legislative and administrative impacts. Legislative impacts refer to any political
or legal actions that department managers must undertake to implement the
option, such as a change in city ordinances. Administrative impacts include
changes that DPW would need to undertake in program administration to carry
out the provisions of the option, including shifts in the duties of collection crews,
changes in resource allocation or ways in which the policy would likely affect
external stakeholders such as other city departments.
Current Policy: Bulky Waste Collection in Milwaukee
Under current solid waste regulations, residents have three options for
disposing of bulky waste, depending on the amount they wish to discard and their
willingness to pay to have DPW pick it up. First, property owners and residents
must take consumer electronics and major appliances such as refrigerators,
washers, dryers or hot water heaters to one of two self-help centers where they
can dispose of the waste free of charge (Bell 2012a), or they can hire private
haulers. These items are not included in the city’s definition of bulky waste
(City of Milwaukee 2010a; Department of Public Works 2012c; Booker 2012;
Department of Public Works 2012f).
7
Second, DPW crews collect up to one cubic yard of waste placed outside
of a resident’s garbage cart, free of charge, on their regular collection routes
(Klajbor, Bell and Meyers 2012; City of Milwaukee 2010c; 2010e). On any given
regular collection day, approximately six percent of households place garbage
outside of their carts (Department of Public Works 2011b). If crews determine
this outside-the-cart waste is too heavy to pick up without a skid loader, they
make a “skid referral” and schedule the pickup internally. Such a “skid too heavy”
pickup is less than one cubic yard, and the property owner does not pay for it.
Third, if a resident has more than one cubic yard of bulky waste, DPW
crews will not pick it up during regular collection. Instead, the property owner
must telephone DPW’s call center to arrange for a $50 pickup (City of Milwaukee
2012b). DPW makes a “skid referral” and sends a crew with a skid loader to
collect the waste.
DPW collects data on both kinds of skid referrals, including date of
referral, date of resolution, type of dwelling and aldermanic district. A skid crew
consists of two workers, one who drives a regular garbage packer truck and
another who drives a salt truck towing a trailer with a skid loader on it. Skid
pickup locations are far enough apart that the skid loader, which is not fast
enough to drive long distances on city streets, must be towed on a trailer to each
pickup, unloaded from the trailer to lift the bulky waste into the packer and
reloaded onto the trailer to go to the next pickup. This lengthy process creates
considerable personnel, fleet and fuel costs that we estimate below.
Enforcement of Current Bulky Waste Collection Policy
If solid waste crews encounter bulky waste that exceeds one cubic yard on
their regular collection routes, they make note of it and the property’s location on
a combined collection (i.e., regular and bulky collection combined in one route)
sheet that they forward to their supervisor. The Sanitation Manager or Sanitation
Supervisor tags the bulky waste with a notice to the property owner to remove the
waste within three days or be subject to the $50 removal charge. If the waste is
not removed and the fee is assessed, the owner must pay the $50 charge within 30
days of billing. Failure to do so results in the charge being transferred to the
property tax bill, taking effect the date of the delinquency. The fee automatically
appears on the owner’s current or next property tax bill (Booker 2012; City of
Milwaukee 2010f). In certain cases, bulky waste placed outside of the carts is
characterized as nuisance garbage and is transferred from the purview of DPW to
the Department of Neighborhood Services (DNS), which issues nuisance
abatement orders. Refer to Appendix C for details on the process DPW and DNS
follow for addressing nuisance garbage.
Apartment Collection (Five or More Dwelling Units)
Owners of apartment properties with five or more units can contract with
the city to have DPW pick up their garbage, including bulky waste. The
Commissioner of Public Works, subject to the approval of the Common Council,
determines the monthly collection fee charged to dwellings with five or more
8
units that contract with DPW annually. This fee varies according to a formula
based on the size and type of garbage container used. Solid waste regulations
allow the Commissioner of Public Works to charge this fee so the city recovers
100 percent of those collection costs (City of Milwaukee 2010b). The fee was
originally designed to account for one bulky waste pickup per location. In reality,
some locations request numerous pickups. The department has raised the rates
over time, but such increases have not been calculated specifically to recover all
bulky waste pickup costs (Klajbor 2012). In 2011, the Common Council approved
quarterly solid waste apartment fees ranging from $217 for a two-yard top-load
container to $356 for a two-yard rear-load container (Legislative Research Center
2011). These are the only fees paid by owners of apartment buildings with five or
more units. In practice, as long as bulky waste is neatly bundled next to the
collection point (the building’s dumpster), an apartment property owner does not
pay extra for the city to remove bulky waste.
Bulky Waste Collection Costs
Cost recovery for residential bulky waste collection is low. DPW
estimates the average cost of a skid pickup to be about $250, while the city
collects $50 in revenue per pickup for most referrals. This disparity between
revenue and the cost incurred is one of the primary factors driving the bulky waste
collection program’s relatively low cost-recovery rate. Management at DPW and
the Budget and Management Division estimate that about $100,000 is recovered
from bulky waste fees while the total cost of bulky waste collection via skid
loader is about $1.1 million, including service for apartment buildings with five or
more units. To estimate the cost of bulky waste collections for only one- to fourunit properties, we compare the number of free and $50 skid referrals for one- to
four-unit dwellings with the number of skid referrals for buildings with five or
more dwelling units. About three quarters of skid referrals are for one- to fourunit residences. We assume that cost is directly proportionate to the number of
referrals. Therefore, for 2012 we estimate the approximate cost of collections via
skid loader for those units to be $809,000, about three-fourths of the total cost of
bulky waste collection involving skid loaders (see Appendix D for more detailed
calculations).
Proportionate allocation of cost by number of skid referrals is likely to
overestimate the cost to provide this service for one- to four-unit properties. Each
pickup with a skid loader from buildings with five or more units may tend to be
larger in volume than each referral for smaller residential properties, as a single
skid pickup for a larger building could contain bulky waste from residents of
more than four units of the building. However, we do not have individual-level
data relating to the volume, weight or time spent collecting each skid pickup,
which would be needed to account for this difference.
9
Evaluation of Current Bulky Waste Collection Policy
In this section, we evaluate Milwaukee’s current bulky waste collection
policy in terms of the policy goals we have defined for this analysis: efficiency,
fairness and ease of implementation.
Efficiency
Current policy does a fair job at encouraging diversion, minimizing cost
and keeping neighborhoods clean. However, it recovers very little revenue.
Maximize Diversion, Minimize Cost and Maximize Cost Recovery
The solid waste regulations do not specify a cap on the amount in excess
of one cubic yard of bulky waste that the city will pick up for $50. As a result,
residents could potentially discard an unlimited amount of bulky waste for a
fraction of the cost incurred to pick it up. Similarly, owners of apartments with
five or more dwelling units do not pay for the amount of bulky waste their
residents produce. Consequently, DPW does not recover the full cost of bulky
waste pickups through user fees. Items that generate especially high costs are
mattresses that become waterlogged or frozen to the ground, large refuse piles
resulting from residents moving and large furniture items such as sofas (Klajbor et
al. 2012; Booker 2012; Bell, Booker and Klajbor 2012).
Maximize Neighborhood Cleanliness
A fee-for-use policy for bulky waste such as the current one has the
potential to increase illegal dumping. One way to determine whether the $50 fee
and limit of one free cubic yard contribute to increased littering, nuisance garbage
or illegal dumping is to compare the trend in DNS abatement orders (such as
vacant lot cleanups) with the policy changes over time for special bulky waste
pickups. City data show that DNS abatements increased by 30 percent from 2007
to 2011. However, abatements dipped in 2008 and 2010, and increased 24 percent
in 2009 and 18 percent in 2011. DPW pickups of more than one cubic yard
increased by 64 percent in 2011. These trends do not appear to be aligned with
changes in collection fee policy summarized in Table 1. Therefore, it is
impossible to definitively tie the increase in DNS abatements to changes in bulky
waste collection policy (Bell 2012a).
Fairness
The current policy balances the two concepts of fairness to a limited
degree by tying use of bulky waste collection services to payment of modest
pickup fees.
10
Maximize Paying for Use
The purpose of the $50 charge was to impose higher fees on higher-cost
users. If not for the $50 fee applied to collection of more than one cubic yard, the
cost of collecting this waste would be borne by all property owners equally, rather
than concentrated on those who create the cost.
In addition, given the fact that owners of apartment properties with five or
more units pay no extra fee for any amount of bulky waste outside of containers,
current policy clearly falls short of this pay-for-use principle of fairness. The
result is that owners of properties with four or fewer dwelling units effectively
subsidize the costs of bulky waste collection caused by apartment residents.
Minimize Unequal Geographic Burden
Under current policy, a principal way property owners can avoid the $50
bulky waste charge is by bringing their bulky waste to one of two self-help
centers. City data show a large proportion of DPW $50 pickups and DNS
abatements are concentrated in low-income neighborhoods in and around the
central sanitation district. Pickups and abatements are less common in the
northern and southern districts. Many property owners in the central district find
transportation to self-help centers problematic and so they cannot avoid paying
the $50 fee. (Neither of the centers is in the central sanitation district.) In addition,
areas with many DPW $50 pickups and DNS abatements coincide with areas with
higher concentrations of crime, litter violations, foreclosed properties and vacant
lots, as unpublished city maps show (Booker 2012; Department of Public Works
n.d.a; Department of Public Works 2012f; Bell 2012a). To illustrate, 2,719
referrals occurred in the central sanitation district, where crime, littering, and
foreclosures are concentrated (Bell 2012a). In contrast, 290 referrals occurred in
the south sanitation district and 1,832 occurred in the north sanitation district,
according to DPW records of pickups in 2011 that incurred $50 charges
(Department of Public Works 2012g).
Minimize Burden on Low-Income Residents
Taken together, these factors could indicate that the current bulky waste
charge is concentrated on property owners and residents who are least able to bear
the cost. However, upon examination of U.S. Census data (2011), the relationship
between the number of bulky waste referrals (calls for pickup) per thousand
occupied housing units and rates of poverty is positive but not strong. The
correlation between the percentage of housing units that are rental properties and
the number of bulky waste referrals per thousand occupied housing units is weak
(for details of these calculations, see Appendix A). It is therefore difficult to draw
conclusions regarding the relationship between bulky waste disposal and
demographic patterns such as the percentage of low-income households or the
concentration of rental housing.
Furthermore, because the $50 charge is assessed to property owners, not
renters, the policy does not directly meet its pay-for-use objective when it is
11
presumably renters, not owner-occupants, who are disposing large amounts of
bulky waste. In fact, non-owner-occupied properties make up a disproportionately
large percentage of DNS abatements (69 percent) and DPW $50 pickups (62
percent). These patterns are consistent with the use of DPW and DNS services by
people living in multifamily units, including owners and renters. Although
multifamily properties make up 27 percent of residential properties, they account
for 59 percent of bulky pickup requests and 56 percent of DNS nuisance garbage
abatement orders. These patterns indicate that some rental properties and owneroccupied multifamily rental units drive a disproportionate amount of DNS and
DPW service related to bulky waste and nuisance garbage, relative to owneroccupied or single-family residences that are rented or owner-occupied (Bell
2012a). These indicators suggest that the current policy targeting owneroccupants does not impose the costs of bulky waste collection on the highest
generators of bulky waste.
Ease of Implementation
The policy described here constitutes the current policy on bulky waste
collection. It therefore requires no legislative or administrative changes.
Option #1: Monthly Bulky Waste Collection Day
Establishing a monthly bulky waste collection day would reduce the
inefficiency associated with waste placed outside carts and promote payment for
bulky waste collection by restricting free placement of items outside the cart to a
day scheduled once a month for each residential unit and capping that volume at
two cubic yards.
Efficiency
The monthly bulky waste collection option increases efficiency compared
to current policy by making pickups more predictable. The following discussion
explains how we calculated the estimated expected base cost reduction
summarized in Table 2.
Table 2: Overview of Option #1: Monthly Bulk Collection Day, Estimated
Savings
Fleet Direct and Fuel
Cost Reduction
$36,000
Staffing
Cost
Reduction
$283,000
(4 positions)
Source: Authors’ Calculations
Dollar amounts are rounded.
12
Total
Cost
Reduction
$319,000
Maximize Diversion and Minimize Cost
On the monthly bulky waste collection day, residents would be permitted
to dispose of bulky waste up to two cubic yards for free, just as they were able to
do on regular collection days from November 25, 2009, to January 1, 2011
(Legislative Research Center 2009, Legislative Research Center 2010a). This
change would cut the total monthly allowance of four free cubic yards (one each
week) to two free cubic yards per household. In addition, residents could put out
items as large as two cubic yards on that day, whereas currently residents can put
out one cubic yard each week.
Several factors determine the cost of bulky waste collection, including
fleet direct costs and fuel costs. Currently, bulky pickups are scheduled when
property owners call to arrange a pickup or when DPW crews find large amounts
of bulky waste at the curb or alley on collection day and arrange for a skid
referral. This method is a relatively inefficient way to collect bulky waste. It
requires more labor hours and fuel than a predictable schedule. We predict that
the introduction of a monthly bulky waste collection day would decrease variable
costs due to the following impacts: a) a reduction of free bulky waste collections
from four to one each month and b) a concentration of bulky waste collections on
the scheduled day, which would reduce the time regular garbage collection crews
spend collecting bulky waste.
In Table 3, we compare these categories of variable costs in 2010, when
free bulky waste collection was limited to two cubic yards per week, with the cost
in 2011, when free bulky waste collection was reduced by half, to one cubic yard
per week. We calculate that in 2011, fleet direct costs fell by 27 percent, while
fuel costs fell by 33 percent.
Table 3: Cost Changes
for Bulky Waste Collection, 2010–2011
Cost Category
Fleet Direct Costs
Fuel Costs
Diesel Fuel Cost
per Gallon
Actual
2010
$90,036
$54,029
Actual
2011
$66,126
$36,463
Percent Change
-27
-33
$2.99
$3.84
28
Sources: U.S. Energy Information Administration (2012b),
DPW Data, Authors’ Calculations
Reductions in fleet direct costs from 2010 to 2011 could be due to a
number of factors. We do not have detailed information regarding the breakdown
of fleet direct costs. The decrease could be due to a reduction in the size of the
fleet, as less demand for bulky waste collection may have facilitated a reduction
in the number of packers used. To estimate the efficiency gains of this policy, we
assume that reducing the monthly allowance of free bulky waste by half would
result in a reduction in fleet direct expenses of 27 percent.
13
As for fuel costs, DPW uses diesel packers for its routes, and the price of
diesel fuel increased by 28 percent from 2010 to 2011 (U.S. Energy Information
Administration 2012b).
If the only factors in fuel costs for bulky waste collection are the volume
of free waste allowed and the price of diesel fuel, then the reduction in allowable
bulky waste caused fuel costs to be 47 percent lower than they would have been
without a policy change (see Table 4). This assumption may be unrealistic, but it
is the best possible estimate given the information available to us.
Table 4: Estimated Fuel Cost Reduction
Attributable to 2011 Policy Change
Cost
Category
Actual
2010
Fuel
Costs
$54,029
Projected 2011 Fuel
Costs (Due to Price
Increase)
$54,029*(1.28)
= $69,157
Actual
2011
$36,463
Percent Decrease
Due
to Policy Change
100*($36,463–
$69,157)/$69,157 =
-47%
Sources: U.S. Energy Information Administration (2012b),
Authors’ Calculations
If the department implements this policy in 2013, using the projected 2013
price of diesel fuel would be appropriate to predict cost reduction under a monthly
bulky waste collection day policy. According to the U.S. Energy Information
Administration (2012a), the price of diesel fuel is expected to increase again by
7 percent from 2011 to 2013 (from $3.84 to $4.11). As shown in Table 5, we use
this percent increase to estimate the resulting increase in fuel costs. We then
calculate 47 percent of this cost to project the expected decrease in costs from this
policy change.
Table 5: Projected Fuel Cost Reduction, 2013,
with Monthly Bulky Waste Collection
Cost
Category
Fuel
Costs
Actual
2011
$36,463
Projected Cost,
2013, under
Current Policy
$36,463*(1.07)
= $39,015
Projected Cost, 2013,
with Monthly Bulky
Waste Collection Day
$39,015*(1-0.47)
= $20,678
Cost
Reduction
$18,337
Sources: U.S. Energy Information Administration (2012a), Authors’ Calculations
As mentioned, we assume that this policy option would result in an
estimated reduction in fleet direct and fuel expenses of 27 and 47 percent
respectively. The 27 percent reduction in fleet expenses would be less than the
50 percent decrease in monthly allowance of free bulky waste collections, which
is nearly the same as the 47 percent reduction in fuel costs attributable to the
policy change. Tables 5 and 6 show estimates of the resulting cost reduction.
14
Table 6:
Estimated Fleet Direct and Fuel Cost Reduction
with Monthly Bulky Waste Collection
Fleet Direct Costs
$66,126*0.27 =
$17,854
Fuel Costs
Total
$18,337
$36,191
Source: Authors’ Calculations
Fleet direct and fuel costs would probably be reduced even more than
indicated in Table 6 due to the increased predictability of monthly bulky waste
collection in terms of timing and location. We are unable to estimate the benefit
of this improvement with any accuracy with the information available to us. In
addition, we are assuming that the scale of the impact of going from two cubic
yards to one cubic yard in regular collection is comparable to the benefits of
moving from four to two cubic yards per month. We believe that the reduction in
bulky waste collection per week would be comparable to a reduction in volume
per month, but the realized change in cost could differ from our estimates.
An additional benefit resulting from this policy is the potential for
improved efficiency in bulky waste collection through lower labor costs.
Sanitation Services Manager Wanda Booker estimates that eliminating all
outside-the-cart pickups would increase the predictability of routes and allow
for a reduction of up to five crews (ten operations driver/worker positions).
However, continuing to provide outside-the-cart pickups even once per month and
expanding the free pickup volume from one to two cubic yards could increase the
number of bulky waste collections and the amount of bulky waste per pickup.
Based on previous gains in efficiency from increased outside-the-cart waste
restrictions, we estimate that this policy option would produce efficiency gains
that would allow for a net reduction of two solid waste crews (four operations
driver/worker positions).
Based on the department’s 2012 line item budget, we estimate this policy
alternative would save the city about $71,000 per position in salaries and fringe
benefits for sanitation operations driver/workers as illustrated in Table 7 (City of
Milwaukee 2012a). Two-thirds of this cost is salaries and one-third is fringe
benefits (see Appendix E for details). After almost no changes in salaries from
2008 to 2011, the 2012 budgeted salaries are 4 percent higher than in 2011. If a
similar increase occurred in 2013, the per-position costs would rise by $3,000.
Therefore, the estimated cost reduction for a two-crew (four-position) reduction
would be $283,000 to $295,000 per year.
15
Table 7: Estimated Staffing Cost Reduction
with Monthly Bulky Waste Collection
Staffing Cost Reduction
per Operations
Driver/Worker
$71,000
Number of
Positions
Eliminated
2 crews
(4 positions)
Cost Reduction
$283,000
Source: DPW Data
Dollar amounts may not add due to rounding.
In total, we estimate the cost reduction to the city from this option would
be about $320,000 per year as summarized in Table 2. Most of the savings comes
from labor. The cost of operations driver/worker positions is spread across several
program areas, not just bulky waste collection, and cannot be easily represented as
a percentage of monthly bulky waste collection cost.
To account for the inherent uncertainty associated with our estimates of
cost reduction, we consider a range of potential cost reductions along each metric,
with conservative estimates assuming lower cost reductions and optimistic
estimates assuming higher cost reductions. For labor cost reductions, we calculate
cost reduction under the assumption that fewer days of collection with outsidethe-cart waste allowed would reduce the overall workload of sanitation workers.
However, allowing for the possibility that the per-month number and volume of
bulky waste collections of more than one cubic yard could increase, we use a
range from a minimum of no labor cost reduction (no workload change) to a
maximum of four crews (eight operations driver/worker positions) based on prior
staff reductions coinciding with outside-the-cart policy changes. For fuel and fleet
cost reduction, we present a range of cost reductions based on the assumption that
these cost reductions could be as much as 50 percent greater or 50 percent lower
than our base case estimates. These ranges of cost reduction estimates are
presented in Table 8.
Table 8:
Estimated Cost Reduction Ranges with Monthly Bulky Waste Collection
Scenario
Fleet
Direct and
Fuel Costs
Base
$36,000
Conservative
$18,000
Optimistic
$54,000
Staffing Costs
$283,000–$295,000
(4 positions)
0 (0 positions)
$566,000–$590,000
(8 positions)
Source: Authors’ Calculations
16
Total
$319,000–$331,000
$18,000
$620,000–$644,000
Maximize Cost Recovery
Some of the revenue recovered by $50 charges for pickups of more than
one cubic yard may be lost in providing a monthly bulky waste collection day that
allows two cubic yards of free disposal. Conversely, reducing the volume of
monthly free collection per household by 50 percent could result in a revenue
increase because property owners need to pay for bulky waste in excess of two
cubic yards per month. Therefore, the overall effect is ambiguous. Lost revenue
from allowing two cubic yards on the monthly collection day would likely be
balanced by gains in revenue from additional special bulky waste pickups at other
times of the month. We expect the net result would not have a noticeable financial
impact on the department.
Maximize Neighborhood Cleanliness
Reducing by half the per-month allowed volume for free disposal of bulky
waste could result in an increase in illegal dumping. The annual cost of nuisance
garbage abatement appears to be unrelated to policy changes. If a relationship
exists, it is difficult to isolate. Our conversations with DPW officials confirmed
that it is very challenging to disentangle the causes of illegal dumping in terms of
who is doing the dumping and what causes an increase or decrease in citations.
We are therefore unable to quantify the effect this policy would have on the cost
of nuisance garbage abatement.
Fairness
This policy option is an incremental adjustment to current policy. The
policy further restricts the volume of free pickups per month without increasing
pickup fees.
Maximize Paying for Use
Providing a free monthly bulky waste collection day does not directly tie
usage to payment, but it does reward planning. To the extent that residents can
assist DPW in lowering collection cost by delaying elimination of bulky waste or
reducing the amount of waste they produce, it is fair for them to be rewarded. The
policy therefore performs somewhat better than current policy in terms of
increasing payment for use of the city’s bulky waste collection service.
Minimize Unequal Geographic Burden
The distribution of benefits by geographic location and income is likely to
be mixed and therefore would not produce impacts that are better or worse than
the current policy.
17
Minimize Burden on Low-Income Residents
Low-income homeowners are likely to benefit more from a free monthly
bulky waste collection day than higher-income households. For these homeowners,
a $50 charge constitutes a larger percentage of income than for higher-income
property owners. A free two-cubic-yard alternative to the $50 pickup fee would be
relatively more valuable to a property owner who has difficulty paying the fee.
Low-income renters may suffer from this policy if move-outs result in a
greater number of $50 pickup fees. If landlords are able to determine which
renters produce bulky waste, they may pass this cost onto renters by refusing to
return security deposits or administering fines for leaving behind furniture and
other household goods.
Higher-income households are generally better able to take bulky items to
self-help centers at their convenience compared to low-income households
(Klajbor et al. 2012), and higher-income households have more options for
disposing of bulky waste for less than $50. Still, allowing these higher-income
property owners to dispose of two cubic yards each month would make disposal
of such waste more convenient for them as well. Although higher-income
homeowners would benefit less from a free monthly bulky waste collection day in
relative terms (percentage of income), they might receive a greater benefit from
this service than low-income homeowners in absolute terms if they disposed of
less than two cubic yards of bulky waste more frequently than low-income
households.
Ease of Implementation
The monthly bulky waste collection day policy would require DPW to
propose an amendment to the ordinance pertaining to bulky waste collection.
DPW Sanitation Services Manager Wanda Booker indicated that as ordinances
increasingly restrict the permissible volume of garbage outside the cart, sanitation
workers have observed that residents are largely compliant and respond by
reducing the amount of garbage they place outside the cart (Bell et al. 2012).
In terms of administrative impact, this suggests that a change in ordinance
to reduce the frequency of bulky waste collections would not result in an
unmanageable number of violations.
Legislative Impacts
Ordinance amendments need approval by the Common Council. Based
on interviews we conducted with staff at DPW and the Budget and Management
Division, we believe this option is politically feasible. It is an incremental change
in the direction that DPW has been moving for several years.
In addition, the number of households affected by the policy might be
small, and therefore, such an ordinance change would affect a relatively small
segment of Common Council members’ constituencies. On any given collection
day, six percent of households that receive DPW solid waste collection services
leave waste less than one cubic yard outside the cart, according to an August 2011
18
DPW survey (Department of Public Works 2011b). Most likely, close to six
percent of households leave something outside the cart each week, but the
composition of households changes. Still, these households would have the
options of waiting to dispose of the waste until the scheduled monthly pickup,
using a self-help center or arranging for $50 skid pickup.
Although some members of the Common Council might raise concerns
that their constituents would find this policy unreasonable, others might view it as
more generous than the current policy. The amount of waste allowed outside the
garbage cart was reduced in 2007 from four cubic yards to two cubic yards and
again in 2011 from two cubic yards to one cubic yard. This policy would reduce
the free amount by half again, but would allow for free one-time disposal of
larger items (up to two cubic yards) than under the current policy. For example,
residents who wish to dispose of pieces of furniture as large as two cubic yards
(such as a sofa) could do so under this policy without charge, so long as they put
out the bulky waste on the designated day. Currently, a property owner needs to
call and arrange for a $50 pickup for furniture that is two cubic yards in size.
Administrative Impacts
Some administrative costs would be involved in changing routes, but we
do not foresee these costs being higher than under the current policy. DPW staff
members are accustomed to adapting to new rules. Furthermore, a monthly bulky
waste collection day would increase the predictability of scheduling and therefore
could lower administrative costs. If the majority of pickups occur only once a
month per route, DPW might find it easier to plan ahead and efficiently allocate
staffing and resources for bulky waste collection (Booker 2012).
This policy would, however, be difficult to implement in winter, when
holidays and unpredictable weather can shift collection off of the regular
schedule. Scheduling a bulky waste collection day would be challenging, but not
impossible, during winter when the waste collection fleet is redirected to snow
and ice removal (Klajbor 2012). From November to April, DPW could designate
a bulky waste collection week each month (instead of a specific day) and require
residents to put out the bulky waste by a certain day of the week to ensure free
pickup.
Option #2: Volume-Based Outside-the-Cart Fees
The second policy we consider is the introduction of new bulky waste
collection charges based on volume. Table 9 shows our proposed schedule of fees
that would apply to pickups that property owners call to arrange as well as to all
outside-the-cart waste left at the curb unannounced.
19
Table 9: Proposed Schedule
for Volume-Based Outside-the-Cart Fees
Volume
Less than 1 cubic yard
Between 1 and 2 cubic yards
More than 2, up to 6 cubic yards
Fee
$50
$75
$200
Source: Authors’ Calculations
Efficiency
As illustrated in Table 10, we estimate that this option would reduce
staffing costs for general solid waste collection by one crew (or two operations
driver/worker positions), a reduction of $142,000 in costs for overall solid waste
collection operations. In addition, revenue specifically from fees charged for
bulky waste collection would recover another estimated $640,000 or about 80
percent of the cost of one- to four-unit residential bulky waste collection
($809,000). The sum of the cost reduction from reduced staffing and revenue
generated from the proposed fee structure is close to 97 percent of the total cost of
collection.
Table 10: Overview of Option #2:
Volume-Based Outside-the-Cart Fees,
Estimated Savings
Sum of Cost
Staffing Cost
Cost Recovery
Reduction and
Reduction
through Fees
Recovery
$142,000
$638,000
$779,000
(2 positions)
Source: DPW Data, Authors’ Calculations
Dollar amounts may not add due to rounding.
Under current policy, the $50 fee is the same for collection of any volume
of bulky waste greater than one cubic yard. The tiered schedule of bulky waste
collection fees we consider would charge for any waste placed outside the
garbage cart, and the fees would increase with size of pickup. This policy option
would improve cost recovery for residential properties with four or fewer units
and improve collection efficiency by reducing labor costs for regular solid waste
collection. The policy would not recover the full cost of one- to four-unit
residential bulky waste collection. A tiered schedule of fees would induce some
degree of waste diversion, but we do not expect that this effect would be large.
Minimize Cost
DPW officials cite waste placed outside carts as one of the principal
factors contributing to solid waste collection costs because it slows the work of
sanitation crews on regular collection routes. By discouraging residents from
20
placing debris outside the cart through an increase in charges and elimination of
free outside-the-cart pickups, this policy of a volume-based fee should improve
solid waste collection efficiency. We are uncertain as to what degree such fees
would reduce costs, but a conservative estimate of a single crew reduction would
save the department the cost of two operations driver/worker positions, about
$142,000 (see Option #1 and Appendix E, Table E4 for details on cost calculation
for operations driver/worker positions).
Maximize Cost Recovery and Maximize Diversion
Completely recovering the cost of residential bulky waste collection
through an increase in fees alone would be relatively difficult for two main
reasons. First, fees can only be raised so much before decreased demand lowers
total revenue. Second, any resulting change in the number of referrals and the
scheduling of bulky waste collection would not necessarily reduce the cost of
bulky waste collection itself. The number of pickups outside of the regular
collection routes could increase slightly due to the elimination of free pickup for
items less than one cubic yard in volume. Whereas our first option, introduction
of a free monthly bulky waste collection, would improve bulky waste and general
solid waste collection efficiency, the establishment of volume-based fees would
reduce costs for general solid waste collection by reducing the amount of waste
outside the cart and improving overall collection efficiency. A narrow
examination of only bulky waste collection cost and revenue would not reveal the
relationship between implementation of this policy option and improved
efficiency for solid waste collection overall.
Following is a discussion of the number of bulky waste pickups the
department could expect under this policy, in addition to revenue projections from
the increased fees. We explain how we arrived at the estimates and projections
using 2010 and 2011 skid referral information and DPW collection estimates in
Appendix F. Figures 1 and 2 summarize the calculations in Appendix F and show
our estimates of the number of $50 and all outside-the-cart pickups in 2011.
21
Figure 1: Free and $50 Referrals, 2010–2011
2011 Free & $50 Pickups
2010 Free & $50 Pickups
2 Cubic
Yards Free
Too Heavy: 1,479
1 Cubic
Yard Free
Too Heavy: 794
More Than
2 Cubic Yards:
2,830
More Than
1 Cubic Yard:
4,846
`
Source: DPW Data
Figure 2: Estimated Number of Pickups, 2011
$50 Pickups: 4,846
(2010)
More Than
2 Cubic
Yards:
2,830
Outside the Cart Pickups
(2011)
Between 1
and 2 Cubic
Yards:
2,016
11,600 Daily Pickups * 45
Days + 794 "Skid Too
Heavy" Referrals =
522,794
Source: DPW Data, Authors’ Calculations
To facilitate ease of implementation, we have limited the number of
categories of fees to three. Accurate charges by volume could be challenging,
especially given the fact that sanitation workers tend to err on the side of not
charging when a pile of items is just more than one cubic yard (Klajbor et al.
2012). For this reason, we anticipate some degree of charge shifting that would
lower revenue. Table 11 shows the number of referral calls DPW could expect,
while Table 12 shows a more realistic projection of revenue that accounts for this
tendency to undercharge. Appendix F provides detail on how we arrived at our
projections in Tables 11 and 12.
22
Table 11: Projected 2013 Bulky Waste Pickups
with Volume-Based Fees
Volume
Less than 1 cubic yard
Between 1 and 2 cubic yards
More than 2, up to 6 cubic yards
Fee
$50
$75
$200
Projected
Number of
Pickups
1,500
1,800
2,300
Source: Authors’ Calculations
We estimate that although sanitation workers provide around 523,000 free
pickups that are one cubic yard or less (see Appendix F and Figure 2), demand for
such pickups would be modest when the price increases from $0 to $50. We
estimate the demand would be about 1,500 pickups, as shown in Table 11. This
number is the most uncertain of our estimates. It could be much higher or much
lower. Demand for pickup of larger volumes likely would fall slightly at higher
prices as well. But we are unsure as to exactly how many fewer pickups the
department could expect. Therefore, our estimates of demand for different
volumes contain a great deal of uncertainty. We believe that a moderate decrease
of 200 pickups, from about 2,000 (Figure 2) to 1,800 (Table 11), seems
reasonable for an increase of $25 to dispose of one to two cubic yards of waste.
For two to six cubic yards, we estimate a larger decrease of 500 pickups,
from 2,800 (Figure 2) to about 2,300 (Table 11). The maximum pickup volume is
limited to six cubic yards at the suggestion of DPW management (Booker 2012).
Although the price would be four times what it was, the $50 fee has remained
unchanged for six years, and $200 is still a reasonable price for disposing of large
volumes of waste. Property owners are not required to use the city’s bulky waste
collection service. There are numerous private providers of cleanup and junk
removal services in Milwaukee (see Appendix G for examples of such providers
and their fee schedules). Property owners could also use the self-help centers or
wait for the annual free bulky waste pickup day during the Clean and Green
program.
To account for the tendency of sanitation workers to undercharge for
bulky waste collection, we make the following adjustments:
1) Reduce the number of $200 charges from 2,300 (demanded pickups at
$200) to 2,100 (actual charges of $200);
2) Increase the number of $50 charges from 1,500 (demanded pickups at
$50) to 1,800 (actual charges of $50), to include 300 skid pickups
between one and two cubic yards in volume); and
3) Adjust the number of $75 charges (1,800) by adding 200 and
subtracting 300 (net: -100), per the above reduction and increase, for a
total of 1,700 actual $75 charges.
We show in Table 12 our projection of revenue for 2013 with these adjustments.
23
Table 12: Projected Revenue
with Volume-Based Fees, 2013
Volume
Fee
Less than 1 cubic yard
$50
Between 1 and 2 cubic yards
$75
More than 2, up to 6 cubic yards $200
Total
Projected
Number of
Charges
1,800
1,700
2,100
5,600
Projected
Revenue
$90,000
$128,000
$420,000
$638,000
Source: Authors’ Calculations
Totals may not add due to rounding.
To account for uncertainty in our assumptions, we apply ranges to the base
case shown in Table 10. In the range for cost reduction (in general solid waste
collection labor changes), we include estimates of plus or minus one crew. For
cost recovery (as measured by bulky waste collection fee revenue), we use a range
of plus or minus 50 percent. This range incorporates the different amounts of
waste collected and inconsistencies in how charges are determined. As we did for
Option #1, we include a range within the base case of Option #2 staffing estimates
to account for the possibility that salaries and benefits could rise by 4 percent or
$3,000 per person in 2013 ($6,000 per two-person crew). Table 13 gives the
conservative and optimistic ranges of cost reduction and cost recovery under
this policy option.
Table 13: Projected Cost Reduction
and Recovery Ranges with Volume-Based Fees, 2013
Scenario
Base
Staffing Cost
Reduction
$142,000–
$147,000
(2 positions)
Cost
Recovery
through
Fees
Total Cost
Reduction and
Recovery
$638,000
$779,000–
$785,000
Conservative
0
(0 positions)
$319,000
$319,000
Optimistic
$283,000–
$295,000
(4 positions)
$956,000
$1,239,000–
$1,251,000
Source: Authors’ Calculations
24
Maximize Neighborhood Cleanliness
The increased fees for higher demanders of bulky waste collection could
increase the likelihood that some residents would illegally dump their bulky
waste. In addition, any change in policy that affects behavior, such as what fees
are charged for different volumes of bulky waste, may involve a degree of
confusion among residents. We assume that the communication of a change in
bulky waste collection policy by the city would negate this concern, but this
option carries some risk to the neighborhood cleanliness policy goal. We believe
the proposed fee schedule is conservative and incremental, especially for those
who dispose of less than two cubic yards of bulky waste. As such, we believe the
proposal to establish volume-based feels poses a low threat to neighborhood
cleanliness.
Fairness
A volume-based policy does better than the current policy at charging
property owners according to their use of the bulky waste collection service.
The higher fees may place an unequal burden on low-income residents or
particular neighborhoods.
Maximize Paying for Use
This volume-based policy is designed to charge users for the amount of
benefit they derive from the city’s collection service. Increasing bulky waste
collection fees to reflect the volume of waste means heavy users pay more, which
satisfies one sense of fairness.
Minimize Unequal Burden on Low-Income Residents
This policy could be burdensome for low-income households. Although
households with vehicles are able to take garbage, furniture and recyclables to
self-help centers free of charge, many low-income households do not have
vehicles and are therefore unable to use the self-help centers. Due to data
limitations, we are unable to specify the percentage of households that are below
the poverty line and do not own a vehicle.
Minimize Unequal Geographic Burden
The highest fee of $200 is most likely to be incurred in locations of
concentrated rental properties, where residents move frequently and leave large
volumes of household items behind or at the curb. In the case of rental properties,
the city charges these fees to landlords. This allocation can be thought of as the
cost of doing business as a landlord but the policy change could nonetheless face
some opposition. As for the burden borne by renters, there is a long-standing
debate among economists regarding the incidence of property tax differentials on
rental housing rates. It is unclear to what extent these fees are passed on to renters
25
in general in the form of higher rent, higher security deposits or other means
(Carroll and Yinger 1994).
Ease of Implementation
The higher fees and lack of an accessible free option would likely make
this policy option unappealing to Common Council members. Administration of
the fee policy might prove to be somewhat challenging as well.
Legislative Impacts
As with a monthly collection day, introducing new charges would require
an amendment to the ordinance for bulky waste collection fees. Changing the fee
structure so it is based on volume would be a move in the same direction the city
has been headed for several years. It also encourages diversion and recycling,
which aligns with the mayor’s “40 by 2020” campaign.2
Disallowing any free regular disposal of bulky waste is a major change
and could face opposition from Common Council members. Occasionally,
households may have an extra garbage bag or two that does not fit in the garbage
cart, and property owners would protest a $50 charge in such cases. This is
understandable. However, property owners can request a second garbage cart for
an additional $10 per quarter. Still, households wishing to dispose of larger items
such as furniture would need to arrange for a $50 pickup or take the items to a
self-help center, free of charge. These situations are likely to remain a concern.
Therefore, this policy may be more feasible in combination with, or after
implementing, the bulky waste collection day option.
Administrative Impacts
The volume-based option would require more training for operators and
billing for more pickups. Operators would need to be trained to determine the size
of irregularly shaped pickups so that DPW could efficiently and accurately charge
the varying fees. Additionally, by assessing a fee for every bulky waste pickup,
DPW would need to issue, receive and follow up on more invoices than it
currently does. The city already provides these services. As such, this option
would require an expansion of services and not development of a completely
new procedure.
2
One of the city’s most prominent initiatives for reducing costs and generating revenues from
DPW operations is Mayor Tom Barrett’s initiative, “40 by 2020: A Clear Vision to the Future.”
Its goal is to reduce the amount of waste sent to landfills by 40 percent by the year 2020.
26
Option #3: No Bulky Waste Fee, Higher Solid Waste Fee
Our final option includes the following two elements: 1) elimination of the
$50 charge and the limit of one cubic yard of extra bulky waste and 2) an increase
in the quarterly solid waste fee with the goal of recovering all solid waste
collection costs, including bulky waste collection. This policy would result in a
return to the 2006 bulky waste collection policy. We evaluate this option to
address the perception that pay-for-service options (including current policy) may
not be as efficient, fair or manageable as would be a full-service, free bulky waste
collection policy. Under this policy, residents would need to call to schedule a
bulky waste pickup, but the volume of the pickup would be unlimited and free of
charge. Items outside the cart would not be picked up if unscheduled. To cover
the cost of bulky waste collection for one- to four-unit residences, property
owners would pay an additional $2.25 in solid waste fees per quarter, a change
from the current $42.88 per quarter to $45.13 per quarter. This additional fee
incorporates the DPW estimated bulky waste costs as well as estimated additional
expenses in staffing, fuel, fleet and disposal costs due to an increase in demand
for bulky waste collection services (see Appendix H for details). Nuisance and
abatement expenses are not included in solid waste costs used to calculate the
solid waste charge (Department of Public Works 2012a).
The solid waste charge is set annually at the discretion of the Common
Council. The existing ordinance allows for a mid-year correction in the fee, which
the Common Council would need to approve (City of Milwaukee 2010d). This
flexibility would allow the city to manage the uncertainty in predicting costs such
as fuel prices.
Efficiency
A higher solid waste fee without a bulky waste collection fee would
recover costs by incorporating the estimated costs associated with bulky waste
pickup into an increase in the solid waste charge. In addition, the estimated
reduction in nuisance expenses related to bulky waste collection provides the city
with cost reduction of almost $215,000 in the base case scenario, as shown in
Table 14.
Table 14: Overview of Option #3: No Bulky Waste Fee, Higher Solid Waste
Fee, Estimated Savings and Cost Increases
Additional
Staffing Cost
$708,000
(10 positions)
Additional
Fleet Direct
and Fuel Costs
Additional
Disposal
Costs
Total
Additional
Costs*
Nuisance and
Abatement
Cost
Reduction
$54,000
$76,000
$839,000
$215,000
*All costs are recovered through increases in the solid waste charge.
Source: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
27
Maximize Diversion
To the extent that this option allows residents to dispose of unlimited
amounts of bulky waste free of charge, the incentive to divert waste through
recycling or reduction decreases substantially. As a result, this option encourages
the opposite behavior relative to the city’s “40 by 2020” goals. The anticipated
increase in demand could be partially offset or diverted with supplemental
communication or education material to encourage residents to recycle or reuse
bulk items through donation centers. The costs and benefits of educational
programs for promotion of behavior changes are outside the scope of this
analysis. The city has incorporated outreach material for previous policy changes,
such as for the recycling program, and has observed positive response to such
changes on the part of residents (Booker 2012).
Minimize Cost
As mentioned, reintroducing unlimited free bulky waste collection would
remove the disincentive to put out bulky waste and likely result in an increase in
demand for bulky waste collection service. This increase would require changes
to management and routes to accommodate. Higher disposal costs in the form of
landfill tipping fees likely would result. According to DPW records, the disposal
costs of bulky waste have fluctuated between $100,000 and $150,000 during the
past three years (see Appendix E for estimates of bulky waste collection costs
stemming from skid referrals for 2008–2012). Although cost data prior to the
implementation of the $50 fee are unavailable, our conversations with city
officials suggest removing fees would significantly increase the volume of bulky
waste discarded.
To be conservative, we assume a relatively large increase of 75 percent in
bulky waste for this option. This assumption suggests approximately $76,000 in
additional disposal expenses (based on the 2012 estimation of disposal costs of
$101,526 shown in Appendix E). Based on our assumptions about the relationship
between bulky waste collection rates and fleet and fuel costs used in Option #1,
the 75 percent increase in demand for bulky waste collection would also imply an
increase in those expenses.
We assume a linear relationship given the existing information, and we
acknowledge there may be economies of scale for which we have not accounted.
Multiplying the efficiency gains from Option #1 by 1.5 (75/50 is 1.5), we find an
increase in fleet direct costs of 40.5 percent (27 times 1.5) and an increase in fuel
costs of 70.5 percent (47 times 1.5). We estimate these additional costs to total
about $54,000 (nearly $27,000 for fleet and $28,000 for anticipated 2013 fuel
costs). In contrast, nuisance abatement and vacant lot cleanup expenses should
decrease under this policy with free bulky waste collection. Without assuming a
relationship between higher prices and higher incidence of illegal dumping, if
there is no user fee for bulky waste pickup, anyone can call to have garbage taken
away. Therefore, we estimate these costs to be cut in half as a result of this policy.
Based on the average expense of approximately $430,000 over the past three
28
years for nuisance abatement, the lack of a bulky waste fee would result in an
annual cost reduction of $215,000.
Maximize Cost Recovery
The solid waste fee would be established annually at a level that aims to
recover 100 percent of the anticipated costs for all solid waste activities, including
bulky waste pickups. As a result, this option is the best suited to maximize cost
recovery.
We make several substantial assumptions regarding resident behavior and
reactions to this policy option, particularly related to the amount of bulky waste
that would need to be collected. To reflect these uncertainties, we consider a
broad range of required staffing and percentages by which bulky waste costs
would increase. We use a range of four to seven bulk crews (eight to 14 staff each
costing $71,000, or $74,000 with a salary increase) to account for demand
variance and a range of plus or minus 33 percent for costs related to bulky waste
collection. Change in demand affects fuel, fleet direct and disposal costs. We use
a range of plus or minus 50 percent for the reduction in nuisance and abatement
expenses. Note that the conservative estimate is a “worst-case” scenario that
implies higher costs (100 percent bulky waste increase) and lower cost reduction.
As these ranges show, uncertainty presents a challenge for determining an
incremental solid waste charge increase that would recover exactly 100 percent of
the cost of bulky waste collection. Across these three scenarios, the increase
would vary from $8.01 to $11.03 per household annually in the optimistic and
conservative cases (see Appendix H, Table H9, to view how we calculated these
per-household fees). In addition, the costs of staffing, fuel, fleet direct and
disposal could all vary independently. We apply these ranges (see Table 15) to
capture the most likely possibilities given our assumptions. Complete details of
calculations for Option #3 are included in Appendix H.
29
Table 15: Estimated Additional Costs and Cost Reduction Ranges
with No Bulky Waste Fee, Higher Solid Waste Fee
Additional
Fleet
Additional
Total
Additional Direct and Disposal Additional
Scenario
Staffing Cost Fuel Costs
Costs
Costs*
$708,000–
$839,000–
Base
$737,000 $54,000
$76,000
$868,000
(10 positions)
$991,000–
$1,165,000–
Conservative
$1,032,000 $73,000
$102,000
$1,206,000
(14 positions)
$566,000–
$653,000–
Optimistic
$590,000 $36,000
$51,000
$677,000
(8 positions)
Nuisance
and
Abatement
Cost
Reduction
$215,000
$108,000
$323,000
*All costs are recovered through the increase in the solid waste charge
Source: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
Maximize Neighborhood Cleanliness
This option may have the benefit of minimizing illegal dumping. Because
this option allows residents to dispose of unlimited amounts of bulky waste, the
incentive to illegally dump is much lower. Assuming the city could sufficiently
meet the increased demand for bulky waste collection services, neighborhood
cleanliness should improve, as the need for nuisance abatement orders would
likely decrease. Some amount of illegal dumping may still occur as a portion of
the dumping is attributable to construction debris, the fee for which is unchanged
under this option.
Fairness
In terms of charging property owners according to their use of bulky waste
collection services, this option is unfair. As discussed, there is not a strong link
between bulky waste requests and rates of poverty or rental housing, given the
available information. As such, we cannot definitively evaluate claims of fairness
with regard to how the policy would affect the burden on low-income households
or specific neighborhoods.
Maximize Paying for Use
Under this option, all residential units are charged the same solid waste
fee, regardless of how much bulky waste each household produces. This option
distributes the cost of bulky waste equally among all property owners, even for
properties that do not use, or infrequently use, the bulky waste collection service.
30
The city would be taking a step backward relative to its recent changes toward
pay-for-use policies that provide an incentive for those who use bulky waste
collection services the most to pay more than those who use the service less.
Minimize Burden on Low-Income Residents
This option would lower the burden on low-income property owners,
especially those without vehicles, who pay $50 each time they or their tenants
have bulky waste greater than one cubic yard collected. The higher solid waste fee
would slightly increase the burden on low-income property owners who do not
use the bulky waste collection service. A property owner would need to have
requested a $50 bulky waste pickup only once in about five and a half years for
this increase in the solid waste charge to be equally beneficial ($50 fee divided by
the base incremental fee increase of $9.02 per year in this option, shown in
Appendix H, Table H9, equals five years, six months and two weeks). Property
owners who use the $50 pickup service more than once (per dwelling unit) every
five and a half years would be better off under this policy. Owners who use it less
often would be better off under current policy.
Minimize Unequal Geographic Burden
Relative to current policy, this option would ease the burden of bulky
waste disposal for those who: 1) use the pickup service more than once per
dwelling unit every five and a half years, 2) do not have access to transportation
to self-help centers and 3) have relatively low income. In short, this option
provides a bulky waste disposal option that is equally accessible (and equally
burdensome) to all property owners and renters, regardless of geography or
income.
Ease of Implementation
The 2006 operations policy may provide a blueprint for administration of
this alternative to eliminate the bulky waste collection fee and increase the solid
waste fee. However, this alternative would require ordinance changes. Because of
the reversal of direction this policy represents in terms of paying for service, city
officials may be required to make a stronger case for justifying the change
compared to other policy changes that are more incremental.
Legislative Impacts
This option is a significant departure from current policy. As a result, how
Common Council members would regard this option is difficult to determine. To
the extent that increasing the solid waste fee and not charging for bulky waste
collection would improve neighborhood cleanliness, this option could garner
Common Council support. However, the increase in the solid waste fee could
meet resistance from some constituencies. Common Council votes would likely
align with the perceived interests of constituents. As discussed, the demographics
31
of each district do not strongly support speculation regarding the relationship
between income, rental properties and $50 pickups. The aldermanic demographics
maps and tables in Appendix A illustrate the complexity of the situation. The only
certainty is that this alternative would require a complete reversal of current
policy through changes to city ordinances regarding fees and DPW pickup
requirements.
Administrative Impacts
This option might result in lower costs for DNS because there likely
would be many fewer nuisance abatement orders to administer. However, the
effect would be more ambiguous for DPW. Although the increase in demand for
bulky waste collection would add an element of uncertainty, DPW could more
easily centralize the planning process. With a return to greater bulky waste pickup
demand, skid loaders could be assigned to particular areas of the city, freeing up
the salt trucks used to tow them (Booker 2012). As a blueprint to guide
reorganization of staffing, DPW could look at service levels prior to the 2007
implementation of the four-cubic-yard limit on free bulky waste collection.
The following matrix, Table 16, summarizes how each policy ranks in
terms of the policy goals that serve as the evaluative criteria for this analysis.
32
Table 16: Policy Matrix of Current and Proposed Policies, Policy Goals,
and Impact Categories
Ease of
Implementation
Fairness
Efficiency
Goal
Impact Category
Current
Policy
Bulk Day
VolumeBased Fees
No Fee,
Higher
Solid Waste
Charge
Maximize
Diversion
Medium
Medium/
High
High
Low
Minimize Cost
Medium
High
Medium
Low
Maximize Cost
Recovery
Low
Low/
Medium
High
High
Maximize
Neighborhood
Cleanliness
Medium
Medium
Low
High
Maximize Paying
for Use
Medium
Medium/
High
High
Low
Minimize Unequal
Burden on LowIncome Residents
Medium
Medium
Low
High
Minimize Unequal
Geographic
Burden
Medium
Medium
Low
High
High
High
Low
Medium
Medium
High
Low
Medium
Legislative
Impacts
Administrative
Impacts
Source: Authors
33
Recommendation
We recommend the City of Milwaukee implement our first policy option,
an amendment to the Milwaukee City Code of Ordinances limiting free outsidethe-cart waste to two cubic yards on a monthly scheduled day (or week, in winter)
to be determined by the Commissioner of Public Works. Shifting a substantial
number of bulky waste pickups to a scheduled day each month would improve the
efficiency of bulky waste collection as well as solid waste collection. A reduction
in cost due to increased efficiency of solid waste collection could be expected
with a fair degree of certainty. This policy would follow the course the City of
Milwaukee has been pursuing since 2006 and would strike a reasonable balance
between competing concepts of fairness. Residents would have a free option for
disposing of bulky waste but would be encouraged to dispose of such waste in a
way that is less costly to the city.
In light of the uncertainty of efficiency gains and low likelihood of
adoption of our volume-based fees option and our option eliminating the bulky
waste fee, we do not recommend adoption of either policy as we have defined
them. In the interest of presenting a limited number of clear policy options, we did
not evaluate combined policies. However, there are policy changes that would not
be incompatible with our policy recommendation. First, the fee of $50 for bulky
waste pickup could be increased. It has not changed in more than five years,
despite rising costs to dispose of waste. Second, volume-based fees could be
implemented in combination with a free collection day. For example, the city
could charge $50 for bulky waste of less than three cubic yards and $100 for
bulky waste of more than three cubic yards. Bulky waste of less than two cubic
yards in volume could still be collected for free on the designated monthly
collection day. This type of approach is unlikely to recover 100 percent of bulky
waste collection cost, but it would strengthen the relationship between the volume
of waste discarded and the amount paid, while retaining a reasonable free option.
34
Appendices
Appendix A:
Aldermanic District Demographics
Our report considers the issue of fairness of proposed policies to low-income
residents and to residents in particular geographic areas. The perception among city
officials is that bulky waste pickups are concentrated in areas of high poverty and
rental units. To explore this relationship, we compared U.S. Census Bureau data for
the percentage of rental properties (2011) and the percentage of low-income residents
(City of Milwaukee 2000) to DPW data for skid referrals (calls for a bulky waste
pickup) in each aldermanic district. We present our findings in Tables A1 and A2.
Table A1: Aldermanic District Demographics, Estimated*
with One- to Four-Unit Skid Referral Data
Number of Skid
Percentage of
Percentage of
Referrals per 1,000
Rental
Low-Income
District
Households, 2011
Properties, 2010 Residents***
1
55
44**
22
2
51
18
31
3
26
18
74
4
15
90
36
5
20
38
7
6
48
72
40
53
7
60
27
8
14
57
21
9
24
60
22
50
10
10
28
11
6
40
6
12
14
72
33
13
9
36
7
14
9
48
12
15
53
67
43
Average
27
58
21
Correlation with Number of
Skid Referrals per
0.21
0.56
1,000 Households (0 to 1):
Source: DPW Data; City of Milwaukee (2000); U.S. Census Bureau (2011)
*Numbers based on U.S. Census data. Overlapping census tracts excluded.
** Shaded, bolded cells denote values that are greater than the average.
*** Percentage of residents below the federal poverty line in 1999.
35
As shown in Table A1, Districts 3 and 12 have similar 2010 percentages
of rental properties (74 and 72 percent), but District 12 has a nearly 15
percentage-point higher rate of people below poverty in 1999, compared to
District 3 (33 compared to 18 percent). Although District 3 has a much lower
poverty rate, it has almost twice as many skid ($50 and “too heavy”) referrals per
1,000 households as does District 12 (26 compared to 14).
Districts 5 and 13 reflect very similar demographics in terms of percentage
of rental properties (38 and 36 percent) and percentage of low-income residents
(both 7 percent). Yet, District 5 has more than twice the number of skid referrals
per 1,000 households for buildings with four or fewer units, compared to District
13 (20 and nine referrals, respectively). The difference may be related to the type
of housing unit, such as whether a district has more single-family homes, one- to
four-unit dwellings or apartments with five or more units. To account for this
possibility, we created Table A2, which covers all referrals, including those for
apartment buildings with five or more units. Table A2 shows that District 5 has
more than three times the total skid referrals per 1,000 households as does District
13 (41 compared to 13). This discrepancy suggests that District 5 may have more
housing units in buildings with five or more units.
Table A2: Aldermanic District Demographics, Estimated*
with Total Skid Referral Data for All Households
Percentage of
Percentage of
Skid Referrals per 1,000 Rental Properties,
Low-Income
District
Households, 2011
2010
Residents***
1
64
55
22**
2
51
18
60
3
28
18
74
4
17
90
36
5
38
7
41
6
50
72
40
7
53
68
27
8
18
57
21
9
53
60
22
10
31
50
10
11
10
40
6
12
15
72
33
13
13
36
7
14
11
48
12
15
56
67
43
Average
36
58
21
Correlation with Number of Skid
0.04
0.36
Referrals per 1,000 Households (0 to 1):
Source: DPW Data; City of Milwaukee (2000); U.S. Census Bureau (2011)
*Numbers based on U.S. Census data. Overlapping census tracts excluded.
**Shaded, bolded cells denote values that are greater than the average.
*** Percentage of residents below the federal poverty line in 1999.
36
To explore these relationships with more precision, we calculated how
closely the number of referrals per 1,000 households correlated with either of the
other two demographic factors: percentage of rental properties and percentage of
low-income residents. A correlation of 1 or -1 means that the two variables are
perfectly correlated with each other, and a correlation of 0 implies that the two
variables are not at all correlated. When including only one- to four- unit
properties, we find a positive but relatively low correlation of 0.21 between
percentage of rental properties and number of skid referrals. The correlation of
0.56 between percentage of low-income residents and skid referrals indicates a
slightly stronger relationship. When we include skid referrals for apartments with
five or more units, the correlations drop significantly to 0.04 and 0.36 for
percentage of rental properties and percentage of low-income residents,
respectively.
These differences show that the demographics of interest to our analysis
are not strong predictors of the number of skid referrals. This comparison of
census data to skid referral data shows that demographic characteristics are not
sufficient to explain the number of referrals in a particular area. Although we do
not have information to explore other possibilities, other factors likely drive the
referral numbers.
Refer to Figures A1 and A2 for maps showing percentage of rental
housing by census tract as well as frequency of $50 pickups.
37
Figure A1: Aldermanic Districts and Rental Housing
Percentage of Rental Properties, 2010
(By 2000 Census Tract)
Sources: City of Milwaukee; U.S. Census Bureau (2011)
38
Figure A2: $50 Pickups, 2008-2011
Frequency of $50 Pickups
`
Sources: City of Milwaukee, DNS, DPW Data, Milwaukee Police Department
39
Appendix B:
Bulky Waste Collection Policies and Demographics of Other Cities
Table B1 presents information on bulky waste policies and demographics for ten
comparison cities. City characteristics include the percentage of the population
living below the federal poverty line, the percentage of owner-occupied housing
(U.S. Census Bureau 2010) and average annual snowfall (U.S. Department of
Commerce 2008).
Table B1: Comparison Cities’ Demographics, Bulky Waste Policies
Frequency of
Charges for Bulky Bulky Waste
City
City Characteristics
Waste Collection
Pickup
Two large
Population
382,578 Residents can
request
special
items per
Poverty
23.3%
Minneapolis,
cleanup with
week per
Owner
MN
minimum
$75
fee
household,
49.2%
Occupied
plus $181 hourly
set out with
Snowfall
49.9 inches rate.
garbage.
Population
259,841 Collection service
Poverty
7.9% for $10 per cubic
yard ($20 per
Owner
Plano, TX
Monthly.
63.0% cubic yard for
Occupied
concrete), $20
Snowfall
2.6 inches minimum fee.
Population
583,776
Poverty
18.5 % Private contractors Call in
Portland,
collect all solid
advance for
Owner
OR
waste;
fees
and
next-week
53.7 %
Occupied
items vary.
pickup.
Snowfall
6.5 inches
Population
790,390 No special bulky
Poverty
20.8% waste pickups
provided.
Not
Austin, TX
Owner
applicable.
45.1% Individuals must
Occupied
hire private
Seattle, WA
Snowfall
Population
Poverty
Owner
Occupied
Snowfall
0.9 inches contractors.
608,660 $30 per item;
14.7% $38 per item (such
as refrigerators)
48.1% containing chloro11.4 inches fluorocarbons.
40
Weekly with
trash pickup.
City
City Characteristics
Population
Poverty
Fort Worth,
TX
79.9%
Snowfall
2.6 inches
Poverty
Owner
Occupied
Snowfall
Population
945,942 Call a private
12.6% hauler to schedule
a pickup. The city
58.5% no longer provides
Trace this service.
594,833
29.5% $50 for pickup. Up
to 1 cubic yard
43.6% free with regular
weekly collection
47.3 inches
Population
Poverty
San Jose,
CA
Milwaukee,
WI
City bulk stickers
56.0% $7.50 per item.
Population
Poverty
Owner
Occupied
Snowfall
Population
Poverty
Owner
Occupied
Snowfall
Snowfall
Sacramento,
CA
30.0%
Snowfall
Owner
Occupied
Owner
Occupied
Frequency of
Bulky Waste
Pickup
Monthly.
188,040
73.2 inches
114,297 Stickers are
available at local
26.9% grocery stores for
$33.00 per sticker;
53.7% Low-income
stickers are
48.8 inches available.
466,488
No free bulky
21.5% waste pickup. Can
contact the city for
49.4% a special pickup
with a fee.
Trace
Poverty
Lansing, MI
9.1%
Owner
Occupied
Population
Grand
Rapids, MI
585,375
Charges for Bulky
Waste Collection
All solid waste
services contracted
out; less than 10
cubic yards per
household free,
$65 per 5 cubic
yards of excess
waste.
Collected
with regular
trash
collection.
Weekly
collection
with trash.
Not
applicable.
Not
applicable.
Call in
advance for
pickups of
more than 1
cubic yard.
Sources: U.S. Census Bureau (2010), US Department of Commerce (2008), Cities’ Websites
41
Appendix C:
Enforcement and
Garbage Nuisance Abatement in Milwaukee
Under the following circumstances, the Department of Public Works
(DPW) will not pick up trash left outside of carts: If garbage is not neatly placed,
stacked or bundled at the collection point (curb, alley or dumpster, in the case of
apartments), but rather scattered around the property, DPW will not pick it up.
Even if garbage is neatly stacked, DPW will not pick up waste that is on private
property not near the collection point (Klajbor 2012). Other cases where DPW
will not pick up waste placed outside for pickup include instances where residents
set out inappropriate items such as electronic devices or large appliances; fail to
place items in locations accessible to DPW sanitation crews or allow their garbage
to become scavenged and scattered such that the debris becomes a litter nuisance
(Department of Neighborhood Services n.d.). In such cases, DPW will inform the
Department of Neighborhood Services (DNS) to inspect the property and, if
necessary, issue a nuisance cleanup order to the property owner to abate the
problem within seven days after the order is mailed. At that time, DNS will
conduct another inspection. If the owner does not abate the problem, DNS will
issue a littering citation. If the problem persists, DNS will take photographs of the
nuisance and send them with the inspection order to be placed on a list on which
private contractors can bid. The cost of the privately contracted abatement plus
DNS administrative fees is then placed on the property owner’s tax bill at the end
of the year (Department of Neighborhood Services 2012).
Appendix D:
One- to Four-Unit Bulky Waste Collection Costs Due to Skid Referrals
Appendix D describes the uncertainty related to the cost of bulky waste
collection. It also details the methods and data we use to estimate the portion of
bulky waste collection costs that can be attributed to skid loader pickups by the
Department of Public Works (DPW) for 2011 and 2012.
Table D1 shows the number of housing units receiving sanitation services
from DPW using the following classification: smaller buildings with four or fewer
units and larger buildings with five or more units.
Table D1: Number of Housing Units
Using City of Milwaukee Sanitation Service
One- to Four-Unit Dwellings
182,571
Multiunit (5 + Unit) Dwellings
8,013
Source: DPW Data
Of the 190,584 units, 96 percent are in buildings with four or fewer units.
One way of estimating the percentage of bulky waste collection costs attributable
42
to smaller residences would be to apply this percentage of the total number of
units served to the total cost of collection by skid loader, $1,066,481 in 2011.
However, buildings with five or more units represent a disproportionate
share of actual skid referrals, about 24 percent. As Table D2 shows, we use
76 percent, the share of skid referrals ($50 pickups plus free, “skid too heavy”
outside-the-cart pickups) attributable to smaller buildings to estimate the
percentage of skid pickup cost attributable to residents of the smaller buildings
in 2011 and to make projections for 2012.
Table D2: Cost Attributable to One- to Four-Unit Residences
Total Cost of Skid
Pickup of Bulky
Waste, 2011
$1,066,481
Estimated Cost of
Skid Pickup of
Bulky Waste
Attributable to 1to 4-Unit
Properties, 2011
0.76 * $1,066,481
= $810,526
Number of
Skid Referrals
for 1- to 4-Unit
Properties,
2011
4,846 + 794 =
5,640
Estimated Total
Cost of Skid
Pickup of
Bulky Waste,
2012
$1,063,969
Total Skid
Referrals for All
Households,
2011
7,428
Estimated Cost
of Skid Pickup
of Bulky Waste
for 1- to 4-Unit
Properties, 2012
0.76 *
$1,063,969 =
$808,616
Source: DPW Data, Authors’ Calculations
43
Skid Referrals
Attributable to 1to 4- Unit
Properties
5,640/7,428 =
76%
Required Per-Unit
Cost Recovery
Estimate, 2012
$808,616/182,571
= 4.43
Appendix E:
Bulky Waste Collection Costs Related to Skid Referrals
This appendix estimates the costs of bulky waste collection stemming
from skid referrals. These estimates include salaries and fringe benefits for
sanitation operations drivers/workers, direct fleet and fuel costs, and landfill
tipping fees.
The breakdown of bulky waste collection costs stemming from skid
referrals is shown in Table E1. For comparison, the costs for related DPW
programs are given in Table E2. We use the fleet direct costs and fuel costs in
Table E1 to estimate the effects of each policy option for those costs.
Table E1: Estimated Costs Stemming from Skid Referrals,
2008–2012, in Dollars
Total
Salary,
Overhead
& Fringe
Disposal
2008
789,140
964,425
2009
818,575
2010
Fleet
Direct
Costs
Fuel
Costs
Total
-
54,121
100,000
1,907,686
143,281
450
66,126
36,463
1,064,896
857,627
98,665
26,680
90,036
54,029
1,127,036
2011
811,551
151,868
473
66,126
36,463
1,066,481
2012*
775,490
101,526
26,680
90,036
70,238
1,063,969
Year
Operating
Expenses
*Projected cost
Source: DPW Data
Totals may not add due to rounding.
44
Table E2: Sanitation Service Costs, 2008–2012, in Dollars
Program
Apartment
Garbage
Bulky Waste
Skid Pickups
Clean and
Green
Recycling
2008
2009
2010
2011
2012
838,782
950,937
939,068
947,224
1,907,686 1,064,896
1,127,036
1,066,481
1,063,969
203,995
382,850
302,684
366,147
6,365,936 6,366,204
5,985,967
6,530,307
6,735,807
2,901,727
3,195,015
3,410,158
305,280
359,880
285,704
412,866
449,087
412,866
1,025,282
278,995
Self-Help
2,833,733 3,177,683
Centers
Code
590,270
362,994
Enforcement
Nuisance and
Vacant Lot
583,110
429,684
Cleanups
Source: DPW Data
Totals may not add due to rounding.
For staffing costs, which are spread across department functions, we refer
to the DPW 2012 line item budget. There are two reasons for using the line item
budget salaries, listed in Tables E3 and E4, instead of the total salary, overhead
and fringe column of Table E1. First, operations driver/worker staff perform
functions not limited to bulky waste collection. Cost reductions and expenses
related to staff, then, affect the department as a whole. Second, staff costs for
bulky waste collection stemming from skid referrals, given in Table E1, are
combined with applied indirect costs (overhead).
To calculate staffing costs, we use the salaries of operations driver/worker
positions in the Sanitation Section (Table E3) to estimate changes from current
policy. Table E4 shows salaries for DPW Fleet Operations. If the positions added
or removed under a policy option would be a mix of Fleet Operations and
Sanitation (or only Fleet Operations), the estimates we provide would vary
approximately $1,000 per staff member. The projected ranges of uncertainty,
included in the efficiency section of each policy option evaluation, are far greater
than the difference in salaries between the position types.
45
Year
2005
2006
2007
2008
2009
2010
2011
2012
Table E3: Operations Driver/Worker Salaries:
DPW Sanitation Section, 2005–2012
Estimated
Estimated Estimated Salary Plus
Total
Salaries
Fringe
Fringe
Number Salaries
per
Benefits
Benefits
of
in
Worker in per Worker per Worker
Workers Dollars
Dollars
in Dollars
in Dollars
179
7,409,059
41,391
20,696
62,087
182
8,208,961
45,104
22,552
67,656
185
8,529,398
46,105
23,052
69,157
183
8,358,600
45,675
22,838
68,513
187
8,387,900
44,855
22,428
67,283
188
8,471,427
45,061
22,530
67,591
191
8,659,940
45,340
22,670
68,010
193
9,109,222
47,198
23,599
70,797
Percent
Change
n/a
9
2
-1
-2
0
1
4
Source: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
Year
2005
2006
2007
2008
2009
2010
2011
2012
Table E4: Operations Driver/Worker Salaries:
DPW Fleet Operations, 2005–2012
Estimated
Estimated Estimated Salary Plus
Salaries
Fringe
Fringe
Number
Total
per
Benefits
Benefits
of
Salaries in Worker in per Worker per Worker
Workers
Dollars
Dollars
in Dollars
in Dollars
72
2,494,573
34,647
17,323
51,970
72
3,007,664
41,773
20,887
62,660
72
3,267,480
45,382
22,691
68,073
70
3,202,160
45,745
22,873
68,618
68
3,111,460
45,757
22,878
68,635
60
2,611,301
43,522
21,761
65,283
58
2,832,058
48,829
24,414
73,243
58
2,795,663
48,201
24,101
72,302
Source: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
46
Percent
Change
n/a
21
9
1
0
-5
12
-1
Appendix F:
Option #2: Volume-Based Outside-the-Cart Fee Estimates
This appendix explains for the volume-based outside-the-cart fees option how
the estimates and projections were derived by using 2010 and 2011 skid referral
information and Department of Public Works (DPW) collection estimates.
Table F1 shows the number of outside-the-cart bulky waste referrals 2010 and
2011. First, we list free skid too heavy referrals that were less than two cubic yards
(in 2010) or one cubic yard (in 2011) that were too heavy for sanitation workers to lift
and take on the regular collection route. Because these items were small, property
owners were not charged for these pickups, but a two-person skid crew was needed.
The second column is the number of skid referrals leading to $50 fees, which occur
when a property owner calls DPW to schedule a pickup. The number of these
referrals is not an exact measure of pickups, as some calls were duplicates in the call
center database, and some fees were waived. The third category is the approximate
number of outside-the-cart items picked up free of charge as part of the regular solid
waste collection service. The DPW asked sanitation workers to record the number of
times they picked up garbage that was outside of the garbage cart for one week in late
August 2011. Workers reported they made 11,600 of these pickups, which accounts
for six percent of the city’s 190,000 households served (Department of Public Works
2011b).
Table F1: Skid Referrals, 2010–2011
Year
2010
Maximum Volume
Allowed for Free
Pickup
2 cubic yards
2011
1 cubic yard
Number of
Free Skid
Too Heavy
Referrals
1,479
Number
of $50
Skid
Referrals
2,830
794
4,846
Number of Free
Outside-the Cart
Pickups without Skid
Loader
Not available
11,600 during one
week in late August
Source: DPW Data
To estimate the number of pickups between one and two cubic yards, we
compared 2010 referral numbers with 2011 referral numbers. Although external
factors may determine the number of skid referrals, for the purpose of our analysis,
we assume that the change in number of skid referrals is due exclusively to the
change in bulky waste policy from 2010’s two cubic yards allowed outside the cart
to one cubic yard in 2011.
The number of free skid too heavy referrals fell from 1,479 in 2010 to 794
in 2011. We assume that the difference, 685, is the number of referrals that in
2010 were free, too heavy to lift and between one and two cubic yards in size.
As a result, reducing the free amount of pickup by 50 percent, from two to one
cubic yard, may have captured as much as $34,000 (approximately 685 times 50)
in 2011 revenue from pickups that would have been free in 2010. However, it is
more likely that some residents responded to the new restriction by putting out
less rather than paying the charge.
47
The number of $50 skid referrals in 2011 (4,846) was much higher than the
year before (2,830), which could be attributed in part to the shift from the free skid
too heavy category to the $50 fee for pickups between one and two cubic yards.
Another likely contributor to the 2011 increase in $50 skid referrals is the number
of property owners with waste that was between one and two cubic yards in 2010
and light enough to load on a regular collection day. These larger-volume pickups
were no longer free in 2011. We estimate the total number of pickups between one
and two cubic yards in 2011 to be 2,016, the difference between the number of
$50 skid referrals in 2011 and the number of $50 skid referrals in 2010:
4,846
- 2,830
2,016
2011 $50 skid referrals more than 1 cubic yard
2010 $50 skid referrals more than 2 cubic yards
2011 $50 skid referrals 1 to 2 cubic yards
In addition we estimate the annual number of pickups sanitation workers
do for free. During one week in August 2011, DPW recorded 11,600 outside-thecart pickups. These pickups were made along the regular routes and did not
require a skid loader. In 2011, residential service included 33 scheduled collection
days per household (City of Milwaukee 2011) and perhaps 12 unscheduled winter
pickups. We assume there are 16 weeks in winter and fewer pickups than weeks
due to winter holidays. We estimate that the total number of free bulky waste
pickups done on regular collection days is the product of 45 (33 plus 12) and
11,600: 522,000. Including the number of skid too heavy referrals (794) brings
the estimate of annual free pickups to 522,794. Table F2 shows the estimated
number of pickups at each volume in the Volume-Based Outside-the-Cart Fees
option.
Table F2:
Estimated 2011 Skid Pickups by Volume
Volume
Less than 1 Cubic Yard
Between 1 and 2 Cubic Yards
More than 2 Cubic Yards
Number of
Pickups
522,794
2,016
2,830
Source: DPW Data, Authors’ Calculations
Finally, we estimate the number of skid referrals the department would
receive under a volume-based fee policy. Determining fees with the goal of cost
recovery requires an estimate of demand for skid pickups, but the number of skid
pickups demanded would depend on the fees charged. Higher fees would result in
fewer requested pickups (and perhaps some illegal dumping).
The household behavioral response to charging for less than one cubic
yard of waste outside the cart would likely be a mix of the following actions:
paying the bulky waste fee; waiting to call for a special pickup until a larger mass
accumulates; requesting a second garbage cart for an additional $10 per quarter;
taking bulky waste to a self-help center; waiting to discard waste until a Clean and
48
Green Day; and dumping waste on other private property or city-owned lots. The
general consensus among DPW officials and staff in the Budget and Management
Division is that the vast majority of residents are law-abiding and respond to
increasingly restrictive rules by reducing the amount of waste they produce (Bell
et al. 2012). Accordingly, we predict that only a slight increase in skid pickups
would follow this policy change. Higher fees for larger volumes would likely
result in somewhat fewer skid referrals for those volumes, which would be
balanced by an increase in skid referrals due to the new charge for less than one
cubic yard of waste. Table F3 shows our estimations of demand for bulky waste
pickups at each volume under the new fee schedule.
Table F3: Estimated Skid Pickups
Estimated Number
Volume
Fee
of Pickups
Less than 1 cubic yard
$50
1,500
Between 1 and 2 cubic yards
More than 2, up to 6 cubic yards
$75
1,800
$200
2,300
Source: Authors’ Calculations
We account for the tendency of sanitation workers to undercharge (Booker
2012) by shifting 200 of the $200 charges to the $75 charge type and by shifting
300 of the $75 charges to the $50 charge type. Table F4 shows estimated revenue.
Table F4: Estimated Revenue
Number of
Volume
Fee
Charges
Less than 1 cubic yard
$50
1,800
Between 1 and 2 cubic yards
$75
1,700
More than 2, up to 6 cubic yards $200
2,100
Total
5,600
Revenue
$90,000
$127,500
$420,000
$637,500
Source: Authors’ Calculations
Table F5 summarizes the base case efficiency gains of Option #2. The
reduction in staff results in cost savings for the department generally, whereas
cost recovery is directly tied to fees for bulky waste collection. Cost recovery
alone would cover 80 percent of the cost of bulky waste collection for buildings
with four or fewer units. The sum of solid waste cost reduction and bulky waste
cost recovery for this option is 96 percent of the cost of residential bulky waste
collection.
49
Table F5: Estimated Cost Reduction and Recovery
Cost of Residential
Cost Reduction
Cost Recovery
Cost Reduction
Bulky Waste
(Staffing)
(Bulk Fee Revenue)
and Recovery
Collection
$141,594
$637,500
$779,094
$808,616
(2 positions)
Source: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
50
Appendix G:
Pricing for Bulky Pickup
from Selected Private Contractors
Milwaukee is served by a number of private “junk collection” providers.
These companies have trucks and staff available to drive to any location within
the city to collect bulky waste. The most sophisticated of these junk collectors
offer online price quotes and scheduling. Two such examples are 1-800-GOTJUNK and the Junk Shuttle. They provide pickups of most items according to a
set schedule of fees that is available online (1-800-GOT-JUNK 2012; Junk
Shuttle 2012). Customers can have their items picked up as soon as the next day
and can schedule months in advance. Pricing for these companies for pickup of
various size loads in the Third Ward (zip code 53202) appears in Table G1. A
number of smaller companies also offer bulky waste pickup services, as do
individuals who advertise on websites such as Craigslist.
Table G1: Comparison of Prices from
Bulky Waste Pickup Competitors
Load Size
1/4 load
Volume
3.7 cubic yards
1-800-GOT-JUNK
$229
Junk Shuttle
$165
1/2 load
7.4 cubic yards
$336
$240
3/4 load
11.1 cubic yards
$448
$335
Full load
14.8 cubic yards
$509
$395
Source: 1-800-Got-Junk (2012), Junk Shuttle (2012)
51
Appendix H:
Bulky Waste Cost Allocation under Option #3
The increase in the solid waste charge for bulky waste collection would
cover the estimated cost of bulky waste collection in 2012 plus any operational
costs (staffing, fuel and fleet direct costs) associated with the policy change to
eliminate the $50 bulky waste pickup fee and raise the solid waste fee. The
additional staffing is assumed to be five crews, or ten operations driver/worker
positions. Projections for 2013 are also given. Tables H1 through H5 show the
costs that this policy option would produce.
Table H1: Current Estimated Bulky Waste Collection Cost
Total Cost Allocated
Percentage Allocated
to 1- to 4-Unit
Total Cost, 2012
to 1- to 4-Unit Residences
Residences
$1,063,969
76%
$808,616
Sources: DPW Data, Authors’ Calculations
Table H2: Projected Additional Staffing Cost, 2013
2012 Operations
Number of Operations
Driver/Worker Salary
Driver/Worker Positions
and Benefits
Added
Projected Cost
$70,797
10 (5 crews)
$707,970
Sources: DPW Data, Authors’ Calculations
Table H3: Projected Additional Fuel Costs, 2013
Projected 2013,
Projected 2013,
Projected
Actual
under Current
with No Bulky
Additional Cost,
2011
Policy
Waste Fee
2013
$36,463*(1.07%) $39,015*(171) =
$36,463
$27,701
= $39,015
$66,716
Sources: DPW Data; U.S. Energy Information Administration (2012a); Authors’ Calculations
Table H4: Projected Fleet Direct Costs, 2013
Change in
Cost with 50%
Reduction in
Volume of
Multiplier for
Projected
Actual
Bulky Waste
Anticipated
Additional Cost,
2011
Collected
Change
2013
75% estimated
base growth in
$66,126 * 0.27
$17,854 * 1.5 =
$66,126
bulky waste / 50%
= $17,854
$26,781
change = 0.75 /
0.50 = 1.5
Sources: DPW Data, Authors’ Calculations
52
Table H5: Projected Disposal Costs, 2013
Projected Additional
Budgeted
Bulky Waste Disposal
Projected Additional
for 2012
Cost
Cost, 2013
$101,526 * 0.75 =
$101,526
75%
$76,144
Sources: DPW Data, Authors’ Calculations
Totals may not add due to rounding.
The total costs for bulky waste collection that we incorporate into
the fee are $1,647,213, shown in Table H6. Allocating this across Milwaukee
households, the increase in the solid waste charge is $9.02 for the year (Table
H7). Ranges of the estimated cost increases are shown in Table H8 and the
calculations for increases in the solid waste charge are shown in Table H9.
We use a range of four to seven bulk crews to account for demand variance
and a range of plus or minus 33 percent for costs related to bulky waste collection.
We use a range of plus or minus 50 percent for the reduction in nuisance and
abatement expenses.
Table H6: Projected Costs, 2013
2011
Estimated Additional
Bulk
Staffing Additional
Costs
Costs
Fuel Costs
$808,616 $707,971
$27,701
Additional
Additional
Fleet Direct Bulky Waste
Projected
Costs
Disposal Costs Total Costs
$26,781
$76,144
$1,647,213
Source: Authors’ Calculations
Table H7: Calculation of Projected Cost Per Household, 2013
Projected Annual Cost per
Household
Number of
(Total Projected Costs Divided by
Projected Total Costs
Dwelling Units
Number of Dwelling Units)
$1,647,213
182,571
$9.02
Sources: DPW Data, Authors’ Calculations
53
Table H8: Projected
Cost Increase, Cost Reduction and Cost Recovery Ranges, 2013
Additional
Nuisance and
Additional Fuel and Additional
Total
Abatement
Staffing Fleet Direct Disposal
Additional
Cost
Scenario
Costs
Costs
Costs
Costs*
Reduction
Base
$707,971 $54,482
$76,144
$838,597
$215,273
Base
$736,983 $54,482
$76,144
$867,610
$215,273
Conservative $991,159 $72,695
$101,526 $1,165,379
$107,636
Conservative $1,031,777 $72,695
$101,526 $1,205,997
$107,636
Optimistic
$566,376 $36,347
$50,763
$653,487
$322,909
Optimistic
$589,587 $36,347
$50,763
$676,697
$322,909
Source: Authors’ Calculations
*All costs are recovered through increase in the solid waste charge
Totals may not add due to rounding.
Table H9: Calculation of Solid Waste Fee for 2013
2011
Estimated
Bulky
Waste
Total
Number of Annual Cost
Collection Additional
Projected
Dwelling
Per
Scenario
Costs
Costs
Total Costs
Units
Household
Base
$808,616
$838,597 $1,647,213 182,571
$9.02
Base
$808,616
$867,610 $1,676,226 182,571
$9.18
Conservative $808,616 $1,165,379 $1,973,995 182,571
$10.81
Conservative $808,616 $1,205,997 $2,014,613 182,571
$11.03
Optimistic
$808,616
$653,487 $1,462,103 182,571
$8.01
Optimistic
$808,616
$676,697 $1,485,313 182,571
$8.14
Source: Authors’ Calculations
Totals may not add due to rounding.
54
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