Nonresidential collections have unique demands.
Imagine it is the winter of 1984 in Los Angeles. The Olympic Games will be held in the city this coming summer between July 28 and August 12, with the Olympic facilities open from July 14 through August 18. The Soviet Union has announced that it will boycott these Olympics. It is the first time these games will have corporate sponsors to sell “official” Olympic products. Forty-three corporate sponsors, 140 nations, 6,829 athletes, 28,742 volunteers, 9,190 members of the media, and a worldwide television audience will be there … and so will Bob Coyle.
WMX had the responsibility to collect, and Coyle would be in charge of the operation, which amounted to collecting waste a city of 50,000 people generates. That winter, Coyle took respite from his worries over finding responsible drivers and laborers for that narrow two-month period of operations to spend with his good friend, who happened, as fate had it, to be a school teacher with the upcoming summer off—and he had friends with the same schedule. So, the 1984 Olympics in Los Angeles had mathematicians, language teachers, historians, and, perhaps, a philosopher or two driving the trucks, removing the containers, handling the early mornings and late evening collections of waste from the Olympic Village.
Coyle’s experience with the Olympics may differ in scale, but many a solid waste manager has had to organize, with short notice, for the cleanup of a parade, a movie shoot, and support the waste and recycling demands of a county fair.
The contractual relationship for these services to the nonresidential client is generally provided through one of several methods: the open market (the generator hires a waste hauling firm directly), the local jurisdiction contracts or franchises the collection out to a private contractor(s), or the governing entity collects the material itself charging the generator directly or through a special tax.
When one looks around the country, it appears that the private sector overwhelmingly handles these commercial and institutional customers. Why? There certainly are rational arguments to be made for the local jurisdiction to collect downtown commercial trash and recyclables—the minimization of truck traffic and uniform fees, for example. Yet, this is not the norm, and arguments are rarely heard. Perhaps it is the variations in service demands that minimize public sector involvement in commercial collections. Perhaps, rather, the private sector had already sallied up to this crowded “blue-plate special” early and fast, leaving little room for public sector competition. Perhaps it is as simple as the generators believing they get better service from the private, and not the public, sector.
The following examples look at different arrangements with different service needs for commercial and institutional clients.
Olympic Games 365 Days a Year
Coyle moved from Los Angeles and WMX, to Las Vegas and Republic Services Inc. Republic, headquartered in Fort Lauderdale, FL, with 13,000 employees and annual revenue of over $3 billion, acquired a family trash business called Silver State Disposal in the early portion of this decade. This company had won franchise arrangements in and around the Las Vegas area. Table 1 lists the counties and the year each franchise agreement expires. In these 4 jurisdictions, Coyle is responsible for servicing 21,500 commercial customers in 105 routes, 2,800 industrial accounts in 95 routes; as well as 502,000 home collections in 211 routes.
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Photo: Republic Services Inc. |
| Front-loader in action |
Franchise Arrangements
For the privilege of this long-term exclusive franchise, the jurisdictions pay Republic $12.20 a month for twice-a-week residential curbside refuse collection, and every other week for recycling collection (self-hauls can dump at Republic’s transfer station for free), weekly bulky curbside collection, household hazardous waste collection, and operate recycling drop-off sites. These rates are set by ordinances, and the franchise agreement tethers itself to these ordinances. Commercial garbage collection is also set by ordinance. In all the jurisdictions except the City of North Las Vegas, Republic bills the residential and commercial clients directly. In northern Las Vegas, the city invoices in its water bill. Finally, Republic pays the jurisdictions 5% of the gross.
When looking at the commercial collection services Republic performs, Coyle explains that the Las Vegas Strip is home to individual resorts that are essentially “little cities” that have three to four thousand rooms and serve thousands of people for lunch and dinner each. With this flow of material 365 days a year, the resort, like a transfer station, cannot afford to be backed up with garbage. The material has to be moved offsite. These “little cities,” such as the MGM Grand Resort, “have as many as seven large compactors that are serviced as many as three times per day, seven days per week,” Coyle says.
Republic’s Vice President of Communications Will Flower says there is a growing demand for Republic to collect low, as well as high, grades of fiber. In Las Vegas, T.J. Spain of the Visitors and Convention Center asked Republic to develop a recycling program. Coyle’s team observed and tracked the disposal activities during several conventions toward the end of 2007.
As with all conventions, there is generally a flurry of activity and waste generation at the beginning, when vendors are setting up, and, again, when they are breaking down before the next convention has to set up. Between the two, material flow is steady but not unusually large.
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Photo: Rome/Floyd Recycling |
| The Rome/Floyd Solid Waste Commission has 350 commercial customers. |
Waste handlers normally moved the convention center’s waste immediately to one of Republic’s three 36-cubic-yard compactors, five 50-cubic-yard compactors, and three 75-cubic-yard tractor-trailer compactors. Food, fiber, cans, and nonrecyclable material were commingled and shipped out as fast as possible.
Republic implemented a new strategy where the waste was segregated immediately. The food waste was detoured off to the three 36-cubic-yard compactors and is taken to the Cheyenne Transfer Station for disposal while all of the other compactors are taken to the company’s materials recovery facility (MRF) in North Las Vegas, where it is separated and processed. Republic has a long-term contract with Smurfit Stone Container, and the material is shipped to Los Angeles, where the company receives the official board market price.
The result of the new recycling plan is that conventions, such as the Consumer Electronics Show—the city’s largest—reached a 55% recycling rate of the nonfood material.
On a Shoestring
Across the country, in Rome, GA, Marta Turner manages a collection operation and a sorting-and-baling operation housed in 105-year-old furniture manufacturing building with beautiful heart-pine columns that workers maneuver their bales of post-consumer material around. She started using the building as a sort facility in 1992 and began the collection in 1997. The operation has an approximate budget of $680,000 per year. The Solid Waste Commission, made up of the County of Floyd and the City of Rome, fund any budgetary shortfalls.
There are 15 paper mills in Georgia, nine of which use post-consumer fiber. Table 2 shows prices Turner received for some of her commodities In December 2007. These prices are based on official board market listings in the first week of the month plus $7.50 per ton promised by the broker. In 2007, revenues totaled $621,000.
Turner has 350 commercial customers who she collects with two rear-load packer trucks and three crew members five days a week. Customers are provided 4- by 4-foot wire cages for the old corrugated containers (OCC). The collection vehicle backs up to these cages and the workers load the contents into the hopper. A second route is for office paper and Turner provides customers with clear plastic bags to place the material in. Some customers, such as the local newspaper, have enough material for Turner to place a 40-foot-long trailer where up to 16,000 pounds are loaded into it each week.
“No one size of service fits every client,” Turner says. Her specialty is serving the collection needs of companies that generally do not produce enough to warrant the kind of service haulers in her market provide.
Even with all the headaches that come with working in a less-than-perfect building, overseeing a collection and sorting facility on a shoe string budget, Turner says she “could not have asked or dreamed that I would have such a wonderful job.”
On the other side of the waste pile is the City of Rome’s public works department. A 31-year solid waste veteran, Johnny Agan is the assistant director for solid waste collection. In 1985, the city decided to enter the commercial dumpster service to keep the market competitive. The city commission sets the rate charged, currently at $2.60 per cubic yard for the first collection and $2.20 thereafter, and it generally increases at 3.5% a year. “The revenues exceed expenses,” Agan says.
Agan collects five days a week with two front-end loaders. Customers can purchase 4-, 6-, and 8-cubic-yard dumpsters through the city at the latter’s cost. The maintenance on the trucks is done in-house with the trucks revolving out of service every five years. Agan keeps two older front-end loaders as spares.
Finding a Niche
RR Waste Solutions, as well as its parent company Red River Service Corp., is owned and managed by Jim Arrington Smith who followed his father, Weldon Smith, into the field of solid waste. Weldon had enlisted in the Army and served in World War II with the 141st Field Artillery Battalion. When he returned to Oklahoma, Weldon began building roads as a contractor for the government. His military background and contracting abilities allowed him to take advantage of a niche market, collecting refuse from military installations. In 1952, Weldon won the contract from the Department of Defense (DOD) to collect refuse at Fort Sill, OK.
In 1983, Jim Smith stepped into the role of president. A trained accountant who, like every son of a trash man, spent summers growing up working on garbage trucks and collecting refuse from clients, began to see changes in the solid waste market with large companies merging and buying each other out. Smith made a decision to enter into the municipal collection market.
Smith, and David Cooper, his business development officer, began searching for public sector niches where collection service mattered and disposal opportunities were open. “By not having a landfill in the general area of the collection service,” says Cooper “means that RR Waste Solutions has to carefully evaluate the situation so as to lower the company’s risk.” An area with a single landfill owned by a company with hauling services can internalize cost in a manner that may make collection procurement uncompetitive. “How the municipality writes the procurement,” Cooper says, “is a major factor in RR Waste Solutions’ decision to propose.”
Since the beginning of this decade, RR Waste Solutions has moved carefully into the municipal market. It still handles military bases for DOD with Fort Knox, KY, being the company’s longest-running customer, beginning in February 1996. Yet, the collection company has picked up long-term contracts with municipalities, such as Nashville, TN, (the author of this article sat across the negotiating table from Smith), where it collects 86,000 units a week.
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Photo: R&R Waste Solutions |
| R&R Waste Solutions decided against automated side-loaders. |
RR Waste Solutions found that when entering into a market, it must fine-tune its collection so as to get an edge over local haulers and national companies.
A case in point is Cameron County, TX. The County awarded a contract to RR Waste Solutions for the unincorporated areas. The company then won exclusive franchise arrangements for four small cities in the region for residential, commercial, and industrial collection of waste. This mix of residential and commercial customers in the contract provided RR Waste Solutions an opportunity to try a collection technique new for its company.
The company decided not to use its automatic side-loaders (ASLs) and, instead, began to implement front-end loader collection trucks with the Curotto collection system. The CurottoCan is an addition to a front-end loading collection vehicle. The forks of the truck slip into the metal sleeves, as they would with any dumpster, of the CurottoCan, which is a 4.6-cubic-yard container with an automated arm attached behind it with the ability to reach out 60 inches to grab carts ranging in sizes from a 32 to 106 gallons and weighing 500 pounds or less. Approximately eight residential carts can be placed into the CurottoCan before the dumpster has to be lifted and loaded into the hopper of the truck.
For less than $20,000 per unit, the CurottoCan transforms the RR Waste Solutions’ front-end loader vehicles into ASLs. The 40-cubic-yard compactor capacity of the front-end loader is larger than the company’s ASLs so the front-end loaders can make more collections before traveling to the disposal location. This system allows the company to collect the residential units in these South Texas towns, drop the CurottoCan off, and continue collecting its commercial clients all in the same truck. As Cooper puts it: “The Curotto system has allowed us to provide residential and commercial collection services simultaneously eliminating the need for two different types of trucks. This approach has saved us time and money and now, more than ever, the ability to become more competitive in similar markets across the country.”
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Photo: R & R Waste Solutions |
| R&R Waste Solutions received the DOD’s Environmental Excellence for its activities at Fort Polk, LA. |
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Photo: R & R Waste Solutions |
| The Curotto Can allows R&R’s frontend loaders to act as side-loaders. |
Paying for Itself
Since 1965, Fayetteville, AR, has been collecting recyclables and garbage from commercial generators. Currently it has 2,300 commercial accounts generating 30,000 tons a year. The service is part of the city’s solid waste and recycling division, which operates as an enterprise fund. The division also requires private haulers to sign contracts with it to provide the city with 10% of the revenues the private hauler receives from city customers.
The city’s solid waste and recycling division oversee the commercial collection operations. The city offers 2- through 8-cubic-yard dumpster collection service, self-contained compactors, and 95-gallon carts. For 2008, the projected percent of expense for both the commercial collection and commercial drop-box collections amounts to 33.4% of total projected expenses. In 2006, the division had a surplus of $736,276 after the capital and shop fund were included. The division projects that revenues and expenditures will cancel each other out for 2008.
And Now for Something Completely Different
If solid waste managers think that requests from businesses to collect different grades of post consumer material can add complications to operations, they should try having to sift through MSW sprinkled with unexploded grenades and other munitions. The DOD contracts out for the collection of garbage and recycling at military installations that sometimes demand the waste hauler to collect.
In Louisiana, Fort Polk, named after a Confederate general and Episcopal Bishop, contracts with RR Waste Solutions to do just this. The fort is 198,555 acres with 8,352 military men and women living in 8,126 housing units. At one location, Peason Ridge, known as “the Box,” military war games occur. After these activities are completed, Army personnel load up three rolloff containers and notify the contractor to haul them away. The contractor takes the material back to what the Army calls the “8300 Block” of the fort. This is the location where the contractor has a MRF to sort and process the MSW in order to reach its contractual goal of recycling 25% of each month’s total waste. If the contractor fails to reach that monthly goal, financial penalties are levied against the contractor.
Once the rolloff containers from the Box enter this facility, the contents are unloaded into an area, and visual contact of this material is mandatory because of the real chance of finding “restricted items”—things that can blow a person up. The material is placed upon a designated platform where items that conceal material underneath or within are moved, emptied, and spread out carefully … very carefully.
In 2004, the government awarded RR Waste Solutions with the Organizational Environmental Award for having an excellent rating from the federal Environmental Performance Assessment System. There have been no accidents at the 8300 Block.
Work Order, Management Incentives
Servicing the needs of commercial and institutional clients takes flexibility because the demands from these sectors are so diverse. One area where this is illustrated is in onboard software. Take, for instance, FleetMind Solutions Inc., used by RR Waste Solutions partly because of its ability to integrate well with its existing billing system called Soft-Pak.
Introduced to the waste market in 2001, FleetMind is an onboard system that supports the back-office technology of the hauler. The firm is based out of Montreal and appears, thus far, to be noticed more by private sector rather than public sector solid waste haulers, says FleetMind representative Chuck Palmer. FleetMind’s abilities fall into two categories. First, it allows the driver to make work orders for clients while doing the collection and immediately merge it into the billing system back in the main office. Second, the software tracks the activities of the truck: location, speed, oil pressure, and so on, essentially logging truck and driving habits that can be used to supplement fleet and driver management.
As much as technology can potentially enhance efficiencies, it is the manager who must utilize and promote its use to achieve the potential benefit. Private sector haulers create incentives for managers to maximize efficiency and minimize expense. RR Waste Solutions, for instance, reviews the monthly profits and loss for each operation with the managers, looking at safety incidents and equipment operations to provide monthly bonuses that the company says can go as high as $1,500 to as low as $33 per month.
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Photo: R&R Waste Solutions |
| Republic Service’s Las Vegas operation sports a nifty paint job. |
Republic also emphasizes incentive programs for managers and supervisors that include safety issues, productivity statistics, business opportunities, and service statistics (missed collections per 1,000 stops) and so on. The calculation provides hope on the part of the manager and supervisor of more money for good work.
The private sector utilizes flexible strategies to energize managers and supervisors to meet and exceed goals. The public sector needs more flexibility to attract ambitions managers to its ranks.
Anecdotally, the commercial collection activities and successes by public sector operations seen in places like Fayetteville, AR, and Rome, GA, show that the public sector can be competitive and fill a service vacuum. Yet, too often managers of public sector systems refuse to look at commercial collection opportunities even if it were to fall in line with the Las Vegas strategy to standardize collection rates while receiving a percentage of the revenue from the franchised hauler in exchange for the privilege of doing business in that market. Both Rome and Fayetteville play a stabilizing role in the local markets by offering collection services and both generate revenue the cost of those services. Fayetteville, like the Vegas area, receives a percentage of the revenue.
Perhaps these options have not traditionally been looked at because of ideological beliefs that government’s role would be better served elsewhere. Or perhaps they have been ignored because of fear of something new. But as the noose of our costly municipal pensions and healthcare burdens squeeze our solid waste budgets, solid waste managers will have to evaluate these supplemental revenue sources.