By Nancy Nevil

Nancy Nevil

It's finished. After months of work, my budget is in the city manager's office. Not that working on budgets is ever fun, but it's usually not as painful as it was this year. Budgets are tight, and I know I'm not alone.

It concerns me that during this time of economic turbulence, many cities are contemplating cutting recycling programs—New York City being the most visible example. Cities across the country are faced with large budget deficits and shrinking revenues and must wrestle with how to recover from these losses.

With this in mind, I thought I would utilize this space to discuss some “truths” as they relate to fiscal challenges.

1. Enterprise funds are an effective tool for fiscal management of solid waste systems. Rates are established based on the actual cost of providing service and include transfers to appropriate general funds to cover indirect costs. Enterprise funds are also protected against shortfalls in the general fund since they don't compete for limited tax revenues. Decisions are made based on the ability to generate sufficient revenue or contain costs. Managers have an incentive to operate more like a business—productivity improvements and increased efficiencies can help fund other needed services.

When a department has to pay the full price of a service, it can influence decisions that impact that cost. For example, workers' compensation costs paid through the general fund do not provide a solid waste entity the incentive to invest in systems that would lower costs.

Enterprise funds also provide an advantage when discussing service levels with customers—it's easy to explain the value a customer receives for the fees paid and much easier to justify fee increases.

2. Technological advances in the last 10 years have resulted in monumental changes to the collection and disposal of solid waste and the collection and processing of recyclable material. In the last two years, technology improvements at material recovery facilities have enabled the collection of recycled materials in a “single stream.” In Plano, TX, this new approach has reduced collection costs and increased material collected.

On this note, I have to mention the SWANA Recycling & Collection Symposium that was held in Houston last February. Several speakers presented excellent information on the single-stream process and evaluation criteria for decision-makers considering this option. Variables include convenience to citizens, collection cost reductions, employee benefits, types of containers used, material collected, regional material recovery facilities with volumes and contracts to justify retrofitting equipment, and markets. I'm sure this discussion will continue at WASTECON 2002 in Long Beach, CA, and at the next Recycling & Collections Symposium in Orlando, FL.

The book Reinventing Government refers to an “investment perspective” as spending money to save money. As managers we must constantly be looking for ways to improve collection and processing efficiencies, which introduces my next point.

3. Training and conferences are still important during tight budgets. As solid waste professionals, we must keep up with what is happening in our industry so we can implement changes and programs, where feasible, that benefit our employees, citizens, and environment. I have never attended a SWANA conference that didn't offer at least one idea to make our program more effective.

4. Benchmarking should be used to help managers gauge their effectiveness in providing the best services at the best cost. The process requires identifying performance measures, obtaining accurate data, and knowing the full cost to deliver services—all essential to the decision-making process.

Conducting a benchmark study can be a healthy endeavor to help identify areas that need improvement. When commenting on the suspension of New York's plastic and glass recycling program, Jordan Barowitz, spokesman for Mayor Bloomberg, stated, “There was a combination of a fiscal crisis and an ineffective program.” Benchmarking can help identify inefficiencies and provide opportunity to make improvements prior to a cut in service delivery.

On the other hand, benchmarking can also serve as a useful tool in demonstrating to elected officials that a program is efficient and cost-effective.

5. In conjunction with benchmarking, or as a separate process, organizations might evaluate their fee structures. As an example, Plano charges $12.50 per month for an extra container. This fee was implemented to provide an incentive for customers to throw away less and recycle more. In addition to bringing in $150,000 a year in revenue, it supports the PAYT system.

6. Competition can certainly work to make organizations more cost-conscious and customer-oriented. It provides an incentive for finding new ways to drive costs lower—for performance without the fat. Plano has gained the benefits of competition without competing because our philosophy has been to operate “as if” we would have to compete at any time. This philosophy encourages us to continually embrace innovation and raise the bar of excellence in performing our duties. Our business plan addresses five main goals that we feel are important to maintaining our competitive edge.

One of the five goals is to provide a defined level of customer service at a competitive net cost as compared to both private- and public-sector providers. In addressing this goal as it pertains to our recycling collection program, Plano moved from a weekly collection to a biweekly collection using a 95-gal.container. This change resulted in a more efficient collection program with a 70% setout rate and a 10% increase in the amount of material collected. In addition, the change saved $36,420 in fuel costs, $219,760 in personnel expenses, and reduced the fleet size by five trucks.

The private sector might also help augment services through partnerships. These can be of mutual benefit but might require incentives built into the franchising/contracting negotiations.

Servant leadership (empowering others to lead and sharing responsibility and authority to meet a greater goal) is always beneficial but never more so than during this difficult time. Plano's self-directed team approach and gain sharing resulted in significant savings in overtime, maintenance, and temporary labor expenses over the last two years.

Achieving success and receiving praise for exceptional work will build morale, increase productivity, and encourage creativity and continued improvement. Healthy organizations genuinely value employees, advocate for improved working conditions, respect diversity, and communicate goals. Working in a positive environment sure makes tightening the belt more tolerable!

Nancy Nevil is solid waste manager with the City of Plano, TX, and a member of MSW Management's Editorial Advisory Board.

MSW - November/December 2002