strategies for bulky waste collection in the city of …strategies for bulky waste collection in the...

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 [email protected]

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.

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Table of Contents

Table of Contents iii

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

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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


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


Recommendation 34

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

References 55

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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

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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

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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.

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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

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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.

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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 volume-based 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.

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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 state-imposed 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).

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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

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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.

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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

Jan. 1, 2007

Limit for free bulky waste reduced from 4 to 2 cubic yards each week Nov. 25, 2009

Limit for free bulky waste reduced from 2 to 1 cubic yard each week 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).

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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 semi-automatic 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).

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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.

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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).

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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

9

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 four-unit 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 four-unit 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.

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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.

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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

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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 owner-occupied multifamily rental units drive a disproportionate amount of DNS and DPW service related to bulky waste and nuisance garbage, relative to owner-occupied or single-family residences that are rented or owner-occupied (Bell 2012a). These indicators suggest that the current policy targeting owner-occupants does not impose the costs of bulky waste collection on the highest generators of bulky waste.


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

Staffing Cost

Reduction

Total Cost

Reduction

$36,000 $283,000 (4 positions) $319,000

Source: Authors’ Calculations Dollar amounts are rounded.

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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 Actual 2010

Actual 2011 Percent Change

Fleet Direct Costs $90,036 $66,126 -27 Fuel Costs $54,029 $36,463 -33 Diesel Fuel Cost per Gallon $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.

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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

Projected 2011 Fuel Costs (Due to Price

Increase) Actual 2011

Percent Decrease Due

to Policy Change

Fuel Costs $54,029 $54,029*(1.28)

= $69,157 $36,463 100*($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

Actual 2011

Projected Cost, 2013, under

Current Policy

Projected Cost, 2013, with Monthly Bulky

Waste Collection Day Cost

Reduction Fuel Costs $36,463 $36,463*(1.07)

= $39,015 $39,015*(1-0.47)

= $20,678 $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.

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Table 6: Estimated Fleet Direct and Fuel Cost Reduction

with Monthly Bulky Waste Collection Fleet Direct Costs Fuel Costs Total $66,126*0.27 =

$17,854 $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.

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Table 7: Estimated Staffing Cost Reduction with Monthly Bulky Waste Collection

Staffing Cost Reduction per Operations Driver/Worker

Number of Positions

Eliminated Cost Reduction

$71,000 2 crews (4 positions) $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 outside-the-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 Staffing Costs Total

Base $36,000 $283,000–$295,000 (4 positions) $319,000–$331,000

Conservative $18,000 0 (0 positions) $18,000

Optimistic $54,000 $566,000–$590,000 (8 positions) $620,000–$644,000

Source: Authors’ Calculations

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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.


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.


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.


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.

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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.


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

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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.

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Table 9: Proposed Schedule for Volume-Based Outside-the-Cart Fees

Volume Fee Less than 1 cubic yard $50 Between 1 and 2 cubic yards $75 More than 2, up to 6 cubic yards $200


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

Staffing Cost Reduction

Cost Recovery through Fees

Sum of Cost Reduction and

Recovery $142,000

(2 positions) $638,000 $779,000

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

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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.

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Figure 1: Free and $50 Referrals, 2010–2011

` Source: DPW Data

Figure 2: Estimated Number of Pickups, 2011

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.

2010 Free & $50 Pickups

2 Cubic Yards Free

Too Heavy: 1,479

More Than 2 Cubic Yards:

2,830

2011 Free & $50 Pickups

1 Cubic Yard Free

Too Heavy: 794

More Than 1 Cubic Yard:

4,846

$50 Pickups: 4,846

(2010)More Than

2 Cubic Yards:2,830

(2011)Between 1

and 2 Cubic Yards:2,016

Outside the Cart Pickups

11,600 Daily Pickups * 45 Days + 794 "Skid Too

Heavy" Referrals = 522,794

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Table 11: Projected 2013 Bulky Waste Pickups with Volume-Based Fees

Volume Fee

Projected Number of

Pickups Less than 1 cubic yard $50 1,500 Between 1 and 2 cubic yards $75 1,800 More than 2, up to 6 cubic yards $200 2,300


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.

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Table 12: Projected Revenue with Volume-Based Fees, 2013

Volume Fee

Projected Number of

Charges Projected Revenue

Less than 1 cubic yard $50 1,800 $90,000 Between 1 and 2 cubic yards $75 1,700 $128,000 More than 2, up to 6 cubic yards $200 2,100 $420,000 Total 5,600 $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 Staffing Cost

Reduction

Cost Recovery through

Fees

Total Cost Reduction and

Recovery

Base $142,000–$147,000

(2 positions)$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


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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.


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.


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

26

in general in the form of higher rent, higher security deposits or other means (Carroll and Yinger 1994).


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.


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.

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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

Additional Fleet Direct

and Fuel Costs

Additional Disposal

Costs

Total Additional

Costs*

Nuisance and Abatement

Cost Reduction

$708,000 (10 positions) $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.

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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

29

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.

30

Table 15: Estimated Additional Costs and Cost Reduction Ranges with No Bulky Waste Fee, Higher Solid Waste Fee

Scenario Additional

Staffing Cost

Additional Fleet

Direct and Fuel Costs

AdditionalDisposal

Costs

Total Additional

Costs*

Nuisance and

Abatement Cost

Reduction

Base $708,000–$737,000

(10 positions)$54,000 $76,000 $839,000–

$868,000 $215,000

Conservative $991,000–$1,032,000

(14 positions)$73,000 $102,000 $1,165,000–

$1,206,000 $108,000

Optimistic $566,000–$590,000

(8 positions)$36,000 $51,000 $653,000–

$677,000 $323,000

*All costs are recovered through the increase in the solid waste charge Source: DPW Data, Authors’ Calculations



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.


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.

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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.


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.


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.


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

32

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.


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.

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Table 16: Policy Matrix of Current and Proposed Policies, Policy Goals, and Impact Categories

Goal Impact Category

Current Policy Bulk Day

Volume-Based Fees

No Fee, Higher

Solid Waste Charge

Effic

ienc

y

Maximize Diversion Medium Medium/

High High Low

Minimize Cost Medium High Medium Low

Maximize Cost Recovery Low Low/

Medium High High


Medium Medium Low High

Fairn

ess

Maximize Paying for Use Medium Medium/

High High Low

Minimize Unequal Burden on Low-Income Residents




Ease

of

Impl

emen

tatio

n Legislative Impacts High High Low Medium

Administrative Impacts Medium High Low Medium

Source: Authors

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Recommendation

We recommend the City of Milwaukee implement our first policy option, an amendment to the Milwaukee City Code of Ordinances limiting free outside-the-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.

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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

District

Number of Skid Referrals per 1,000 Households, 2011

Percentage of Rental

Properties, 2010

Percentage of Low-Income Residents***

1 44** 55 22 2 31 51 18 3 26 74 18 4 15 90 36 5 20 38 7 6 48 72 40 7 60 53 27 8 14 57 21 9 24 60 22 10 28 50 10 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 1,000 Households (0 to 1):

0.21 0.56

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.

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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

District Skid Referrals per 1,000

Households, 2011

Percentage of Rental Properties,

2010

Percentage of Low-Income Residents***

1 64 55 22** 2 60 51 18 3 28 74 18 4 17 90 36 5 41 38 7 6 50 72 40 7 68 53 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 Referrals per 1,000 Households (0 to 1): 0.04 0.36

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.

37

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.

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Figure A1: Aldermanic Districts and Rental Housing

Sources: City of Milwaukee; U.S. Census Bureau (2011)

Percentage of Rental Properties, 2010 (By 2000 Census Tract)

39

Figure A2: $50 Pickups, 2008-2011

` Sources: City of Milwaukee, DNS, DPW Data, Milwaukee Police Department

Frequency of $50 Pickups

40

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

City City Characteristics Charges for Bulky Waste Collection

Frequency of Bulky Waste

Pickup

Minneapolis, MN

Population 382,578 Residents can request special cleanup with minimum $75 fee plus $181 hourly rate.

Two large items per week per household, set out with garbage.

Poverty 23.3%Owner Occupied 49.2%

Snowfall 49.9 inches

Plano, TX

Population 259,841 Collection service for $10 per cubic yard ($20 per cubic yard for concrete), $20 minimum fee.

Monthly. Poverty 7.9%Owner Occupied 63.0%

Snowfall 2.6 inches

Portland, OR

Population 583,776Private contractors collect all solid waste; fees and items vary.

Call in advance for next-week pickup.

Poverty 18.5 %Owner Occupied 53.7 %

Snowfall 6.5 inches

Austin, TX

Population 790,390 No special bulky waste pickups provided. Individuals must hire private contractors.

Not applicable.


Snowfall 0.9 inches

Seattle, WA

Population 608,660 $30 per item; $38 per item (such as refrigerators) containing chloro-fluorocarbons.

Weekly with trash pickup.



41

City City Characteristics Charges for Bulky Waste Collection

Frequency of Bulky Waste

Pickup

Fort Worth, TX

Population 585,375 All solid waste services contracted out; less than 10 cubic yards per household free, $65 per 5 cubic yards of excess waste.

Monthly.


Snowfall 2.6 inches

Grand Rapids, MI

Population 188,040

City bulk stickers $7.50 per item.

Collected with regular trash collection.



Lansing, MI

Population 114,297 Stickers are available at local grocery stores for $33.00 per sticker; Low-income stickers are available.

Weekly collection with trash.

Poverty 26.9%

Owner Occupied 53.7%


Sacramento, CA

Population 466,488No free bulky waste pickup. Can contact the city for a special pickup with a fee.

Not applicable.

Poverty 21.5%

Owner Occupied 49.4%

Snowfall Trace

San Jose, CA

Population 945,942 Call a private hauler to schedule a pickup. The city no longer provides this service.

Not applicable.


Snowfall Trace

Milwaukee, WI

Population 594,833$50 for pickup. Up to 1 cubic yard free with regular weekly collection

Call in advance for pickups of more than 1 cubic yard.


Snowfall 47.3 inchesSources: U.S. Census Bureau (2010), US Department of Commerce (2008), Cities’ Websites

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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 Multiunit (5 + Unit) Dwellings 182,571 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

43

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

Number of Skid Referrals for 1- to 4-Unit

Properties, 2011

Total Skid Referrals for All

Households, 2011

Skid Referrals Attributable to 1-

to 4- Unit Properties

$1,066,481 4,846 + 794 = 5,640 7,428 5,640/7,428 =

76% Estimated Cost of

Skid Pickup of Bulky Waste

Attributable to 1- to 4-Unit

Properties, 2011

Estimated Total Cost of Skid

Pickup of Bulky Waste,

2012

Estimated Cost of Skid Pickup of Bulky Waste for 1- to 4-Unit Properties, 2012

Required Per-Unit Cost Recovery Estimate, 2012

0.76 * $1,066,481 = $810,526 $1,063,969

0.76 * $1,063,969 =

$808,616

$808,616/182,571 = 4.43


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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

Year

Total Salary,

Overhead& Fringe Disposal

Operating Expenses

Fleet Direct Costs

Fuel Costs Total

2008 789,140 964,425 - 54,121 100,000 1,907,686 2009 818,575 143,281 450 66,126 36,463 1,064,896 2010 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 *Projected cost

Source: DPW Data Totals may not add due to rounding.

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Table E2: Sanitation Service Costs, 2008–2012, in Dollars

Program 2008 2009 2010 2011 2012 Apartment Garbage 1,025,282 838,782 950,937 939,068 947,224

Bulky Waste Skid Pickups 1,907,686 1,064,896 1,127,036 1,066,481 1,063,969

Clean and Green 278,995 203,995 382,850 302,684 366,147

Recycling 6,365,936 6,366,204 5,985,967 6,530,307 6,735,807Self-Help Centers 2,833,733 3,177,683 2,901,727 3,195,015 3,410,158

Code Enforcement 590,270 362,994 305,280 359,880 285,704

Nuisance and Vacant Lot Cleanups

583,110 429,684 412,866 449,087 412,866

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.

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Table E3: Operations Driver/Worker Salaries: DPW Sanitation Section, 2005–2012

Year

Number of

Workers

Total Salaries

in Dollars

Estimated Salaries

per Worker in

Dollars

Estimated Fringe

Benefits per Worker in Dollars

Estimated Salary Plus

Fringe Benefits

per Worker in Dollars

Percent Change

2005 179 7,409,059 41,391 20,696 62,087 n/a 2006 182 8,208,961 45,104 22,552 67,656 9 2007 185 8,529,398 46,105 23,052 69,157 2 2008 183 8,358,600 45,675 22,838 68,513 -1 2009 187 8,387,900 44,855 22,428 67,283 -2 2010 188 8,471,427 45,061 22,530 67,591 0 2011 191 8,659,940 45,340 22,670 68,010 1 2012 193 9,109,222 47,198 23,599 70,797 4

Source: DPW Data, Authors’ Calculations Totals may not add due to rounding.

Table E4: Operations Driver/Worker Salaries: DPW Fleet Operations, 2005–2012

Year

Number of

Workers

Total Salaries in

Dollars

Estimated Salaries

per Worker in

Dollars

Estimated Fringe

Benefits per Worker in Dollars

Estimated Salary Plus

Fringe Benefits

per Worker in Dollars

Percent Change

2005 72 2,494,573 34,647 17,323 51,970 n/a 2006 72 3,007,664 41,773 20,887 62,660 21 2007 72 3,267,480 45,382 22,691 68,073 9 2008 70 3,202,160 45,745 22,873 68,618 1 2009 68 3,111,460 45,757 22,878 68,635 0 2010 60 2,611,301 43,522 21,761 65,283 -5 2011 58 2,832,058 48,829 24,414 73,243 12 2012 58 2,795,663 48,201 24,101 72,302 -1


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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

Maximum Volume Allowed for Free

Pickup

Number of Free Skid

Too Heavy Referrals

Number of $50 Skid

Referrals

Number of Free Outside-the Cart

Pickups without Skid Loader

2010 2 cubic yards 1,479 2,830 Not available

2011 1 cubic yard 794 4,846 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.

48

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 2011 $50 skid referrals more than 1 cubic yard - 2,830 2010 $50 skid referrals more than 2 cubic yards 2,016 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-the-cart 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 Number of

Pickups Less than 1 Cubic Yard 522,794 Between 1 and 2 Cubic Yards 2,016 More than 2 Cubic Yards 2,830


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

49

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

Volume Fee Estimated Number

of Pickups Less than 1 cubic yard $50 1,500 Between 1 and 2 cubic yards $75 1,800 More than 2, up to 6 cubic yards $200 2,300


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

Volume Fee Number of

Charges Revenue Less than 1 cubic yard $50 1,800 $90,000 Between 1 and 2 cubic yards $75 1,700 $127,500 More than 2, up to 6 cubic yards $200 2,100 $420,000 Total 5,600 $637,500


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.

50

Table F5: Estimated Cost Reduction and Recovery

Cost Reduction (Staffing)

Cost Recovery (Bulk Fee Revenue)

Cost Reduction and Recovery

Cost of Residential Bulky Waste

Collection $141,594

(2 positions) $637,500 $779,094 $808,616


51

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-GOT-JUNK 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 Volume 1-800-GOT-JUNK Junk Shuttle 1/4 load 3.7 cubic yards $229 $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)

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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, 2012 Percentage Allocated

to 1- to 4-Unit Residences

Total Cost Allocated to 1- to 4-Unit

Residences $1,063,969 76% $808,616

Sources: DPW Data, Authors’ Calculations

Table H2: Projected Additional Staffing Cost, 2013 2012 Operations

Driver/Worker Salary and Benefits

Number of Operations Driver/Worker Positions

Added Projected Cost $70,797 10 (5 crews) $707,970


Table H3: Projected Additional Fuel Costs, 2013

Actual 2011

Projected 2013, under Current

Policy

Projected 2013, with No Bulky

Waste Fee

Projected Additional Cost,

2013

$36,463 $36,463*(1.07%) = $39,015

$39,015*(171) = $66,716 $27,701

Sources: DPW Data; U.S. Energy Information Administration (2012a); Authors’ Calculations

Table H4: Projected Fleet Direct Costs, 2013

Actual 2011

Change in Cost with 50% Reduction in Volume of

Bulky Waste Collected

Multiplier for Anticipated

Change

Projected Additional Cost,

2013

$66,126 $66,126 * 0.27 = $17,854

75% estimated base growth in

bulky waste / 50% change = 0.75 /

0.50 = 1.5

$17,854 * 1.5 = $26,781


53

Table H5: Projected Disposal Costs, 2013

Budgeted for 2012

Projected Additional Bulky Waste Disposal

Cost Projected Additional

Cost, 2013

$101,526 75% $101,526 * 0.75 = $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 Bulk Costs

Additional Staffing Costs

Additional Fuel Costs

Additional Fleet Direct

Costs

Additional Bulky Waste

Disposal Costs Projected

Total Costs$808,616 $707,971 $27,701 $26,781 $76,144 $1,647,213


Table H7: Calculation of Projected Cost Per Household, 2013

Projected Total Costs Number of

Dwelling Units

Projected Annual Cost per Household

(Total Projected Costs Divided by Number of Dwelling Units)

$1,647,213 182,571 $9.02 Sources: DPW Data, Authors’ Calculations

54

Table H8: Projected Cost Increase, Cost Reduction and Cost Recovery Ranges, 2013

Scenario

Additional Staffing Costs

Additional Fuel and

Fleet DirectCosts

Additional Disposal

Costs

Total Additional

Costs*

Nuisance and Abatement

Cost 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


Table H9: Calculation of Solid Waste Fee for 2013

Scenario

2011 Estimated

Bulky Waste

Collection Costs

Total Additional

Costs Projected

Total Costs

Number of Dwelling

Units

Annual Cost Per

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.

55

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