City of Jellico
Solid Waste Study
By Ron Darden, Municipal Management Consultant
The University of Tennessee’s Municipal Technical Advisory Service
November 14, 2003
Background
Jellico is a city of approximately 2500 residents located in Campbell County near
Interstate 75 and the Kentucy border. The city operates a residential and commercial
solid waste service. There are 897 residential garbage customers and 74 commercial
customers providing their own commercial garbage dumpsters. The city rents dumpsters
to 3 commercial customers. Residential customers provide their own garbage containers.
The city provides curbside recycling service once per week and pays a recycle
business $125 per week to collect recycle materials. The city furnishes the truck for the
recycling. There is no charge to the customer for recycling and the recycle contractor
disposes of all materials and retains any revenues derived from the sale of the recycle
materials.
Residential garbage is collected at curbside once per week at a cost of $9.90 per
month. There are 5 residential routes and one commercial route. The minimum
commercial rate is $12.90 per month for weekly service. Minimum commercial service
is determined to be a comparable volume of garbage collected from a residential
customer. A fee of $2.10 per cubic yard is charged for commercial customers requiring
more than the minimum service with frequency computed. Commercial service is
provided 5 days per week on an as needed basis.
The city deposits the garbage at the Laurel Ridge landfill located in Lilly,
Kentucky at a cost of $22.15 per ton including a $1.75 per ton landfill tipping fee
imposed by the State of Kentucky. The Kentucky tax is not charged on commercial
deposits. Campbell County reimburses the city $18.75 per ton for residential and
commercial waste deposited at the landfill. The net cost for residential deposits is $3.40
per ton after the county reimbursement. The landfill is approximately 2 hours round trip
from the city.
The city solid waste division consists of 4 employees including the supervisor.
Drivers have the required commercial equipment operator license. The city does not
provide safety equipment for the employees and does not have an employee safety
program.
The city has three rear loading garbage trucks:


1991 in good condition
1998 in good condition

2001 in good condition
The supervisor estimates that the trucks should serve for several more years at the
current service level.
The budget includes the following:
The city deposited 1,776.47 tons of residential and commercial waste in
the landfill during October 2002 through September 2003. This equates to 148.04
tons per month. The cost per ton is $131.84.
Based upon projected revenues for residential, light commercial and heavy
commercial service the tonnage is as follows:



Residential
Light Commercial
Heavy Commercial
1048.12- 59%
124.35 - 7%
583.60 - 34%
Note: The author did not have the actual tonnage breakdown deposited at the landfill but
assumed that these figures were computed using estimated tonnage.
The residential cost per customer is:
1776.47*$22.15=$39,348.81*59%=$23,215.86 residential landfill cost per year.
Budgeted expenses of $234,203-$45,000 landfill tipping fee=$189,203 adjusted
budget. Add the residential landfill cost of $23,215.86 and the adjusted residential
budget amount of $111,629.77 and the total is $134,845.63 total residential garbage
service expense per year based upon projected revenue estimates. This equates to
$150.33 per year per customer or a cost of $12.53 per month using 897 residential
customers.
Commercial expenses similarly are $93,706.24 annually or $1,266.30 average per
year per customer or an average cost of $105.53 per month using 74 customers.
Proposed Annexation
The proposed annexation will add 677 new residential customers and three light
commercial customers. This study will use 700 residential customers for analysis
purposes. The residential costs of $134,845.63 will increase approximately 43% from
adding 677 new customers to the residential service and it will add approximately
$80,427.60 in revenues.
$134,845.63 + $57,988.62=$192,829.25 new residential costs which equates to
$122.51 per year per customer or a cost of $10.21 per month using a 1574 new customer
base. Revenues will increase by $80,427 (677*$9.90). The supervisor states that he
needs two additional laborers to provide the service to the proposed annexed area. It
appears that the 43% increase in expenses will cover the cost of the new employees. The
proposed annexation will be favorable in that the monthly cost per customer will be
reduced from $12.53 per month to $10.21 per month. Commercial service in the area is
not significant and the 3 identified customers are included in this analysis as residential.
The cost per customer is reduced by $2.32 because of a larger number of citizens paying
the cost even though a general fund subsidy is required to meet the expenses. The
general fund subsidy is reduced from $20,861 to $17,917 as a result of the proposed
annexation.
Recommendations:







Hire 2 additional garbage service workers.
The annexation is favorable in terms of solid waste services.
Develop an employee safety program.
Provide sanitation workers with safety toed shoes and fluorescent vests.
Establish an equipment replacement program for garbage trucks (Example
ordinance attached).
Increase the garbage fees over a period of two years to cover costs without
a general fund subsidy.
Redevelop residential and commercial routes.