If implemented, citycould lose revenue
By Bert Lehman
The city of Clintonville is currently discussing its future garbage and recycling collection options.
Clintonville City Administrator Chuck Kell presented an analysis to the Clintonville Street Committee on July 5. The analysis assumes that there are 1,657 residential customers in the city. That number was determined by using the number of active residential water meters in the city, not including apartment buildings.
To start an in-house, modernized residential garbage and recycling collection system — utilizing one person, one truck with a pick-up arm, and a cart system — would cost the city of Clintonville roughly $502,600, according Kell.
The $502,600 figure includes $315,400 for a new truck and $187,200 for carts for the garbage and recycling to be placed in.
The analysis showed that if the city borrowed the $502,600 for 10 years at 2 percent interest, payments would be $4,624 per month. When dividing this by the number of customers, it comes out to $2.79 per month per customers.
Labor, fuel and truck maintenance, landfill and recycling fees, and budget reserves would have to be added to that cost.
The cost to hire an employee to do the garbage and recycling collection would be $40,000 according to the analysis. This includes a $50,000 per year salary and fringe benefits. Eighty percent of the new employee’s time is figured for the garbage and recycling collection. The cost per month per customer would be $2.01.
Fuel and truck maintenance was estimated to be $19,219 assuming a diesel price of $2.31 per gallon for 8,320 gallons. The city would plan to set aside $5,000 each year for maintenance. The total of fuel and maintenance would be $24,219, or $1.29 per month per customer.
The cost of disposing of the garbage and recycled materials would be $4 per month per customer, according to information provided by a private hauler.
The city would also set aside $57,800 per year in a reserve development account to replace the truck and carts in 10 years. This assumes inflation of 1.5 percent in equipment per year. This equates to $3.07 per month per customer.
Add all the costs together, puts the per month per customer cost at $13.16.
The analysis concluded, “The total annual cost to the city to operate a residential refuse and recycling collection program through the Public Works Department will be approximately $261,673. This cost will be broken down between capital expenditures and annual operating costs.”
Kell told the committee that this would also have an impact on the city’s ability to stay under the expenditure restraint limit.
Currently the city of Clintonville receives $85,000-$90,000 in state revenue by staying under the expenditure restraint limit. That amount is lost if the city goes over the expenditure restraint limit.
“If you’re going to implement garbage collection, quite frankly I think you’re going to lose that revenue, so it’s not only costing what it costs you, but it’s going to cost you $85,000 more in lost revenue,” Kell said.
Kell told the committee there is a waiver available for the expenditure restraint program if a new service is added for a municipality. That waiver is applicable only if the service is transferred from another governmental unit.
“Taking it from a private sector into a governmental unit doesn’t qualify,” Kell said.
Based on current calculations, Kell said it is looking like the city will be able to increase general fund expenditures by only $37,700 in 2016 to remain qualified for the expenditure restraint revenue payment from the state.
He said running a refuse and recycling collection service will cost more than that. That $37,700 will also be needed by other budget areas like salary and health insurance increases, Kell said.
“As I see it right now I don’t really see any way that we could run a city operated service unless you are ready to give up that revenue,” Kell said.
He added that the only way to make up that lost revenue is to cut services or increase taxes.
Kell said he wasn’t sure how the city could contract the garbage and recycling collection service out to just one private hauler without it impacting the expenditure restraint revenue. Since this would require a contract with the low bidder, the city would ultimately be paid by the private hauler receiving the contract.
“If [the hauler] is paid any way through the city then it affects our expenditure restraint,” Kell said. “If we can figure out any way of doing this and have the hauler bill the residents like they do now, we might be able to get away without affecting that revenue source (expenditure restraint).”
Kell questioned whether a private hauler would be willing to agree to be under a municipal contract with rules to follow if they are also responsible for collecting the money. He said in his discussions with a private hauler, they want the city to collect the money.
“That way they’re guaranteed payment,” Kell said.
Currently the city provides licenses to four private haulers for garbage and recycling collection. The private haulers are responsible for collecting the fees from individual customers.
It is because there are trucks for four companies driving on city streets, putting wear and tear on the streets, that the committee is exploring different options.
Whether the city started its own garbage and recycling collection service or it contracted it out to one private hauler, the city would have to require all residents to use the service, which would have an impact on Clintonville Area Waste Services (CAWS), Kell said.
For the city to opt out of the CAWS agreement, it needs to give a formal resolution 18 months prior to the fiscal year the city wishes to opt out.
Kell and the committee will continue to seek more information and discuss the issue in the future.