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John Nephew

Maplewood City Council Policy & Politics


Administrative Expenses and NSWMA's Double-Billing

The next group of NSWMA talking points have to do with the fact that it takes some effort for Maplewood to switch to an organized collection system, and there would be some administrative costs after switching. While this basic point is true, they still manage to get the details wrong.


This statement might mislead some readers into thinking there are no costs to the city under the current system. We currently must allocate staff resources to licensing haulers, and state law (Minnesota Statutes 115A.941(a)) requires us to enforce our mandatory collection ordinance, for example. The NSWMA doesn't mention that a reduction in the cost of administering the current system would offset some expenses of an organized system.

• No City consultant needed at a price of $60,000.

City staff gave us three scenarios for the planning phase at our February 7th workshop. (You can read the meeting packet online with the details.) They gave us options of (a) all the work being done by city staff (which would take longest, as it gets stacked on top of their other day-to-day duties and requires them to learn about a lot of technical issues in order to do it), (b) some being done by staff and some by consultants, and finally (c) just putting it all in the hands of an outside consulting firm with expertise in this area.

The last option was estimated to cost a maximum of $60,000, but we didn't have any actual bid or quote.  Its scope would include "initial kick off meetings, resolution of intent to organize, draft organized system plan, discussions and negotiations with haulers, findings and final organized system plan, public relations and advertising, and project management."

The proposed funding source was the city's SCORE grant ("Select Committee on Recycling and the Environment"), funds that can only be spent on waste reduction and related activities, not property taxes.

We haven't yet selected one approach or another, since of course it depends on first deciding to move into a planning phase.  We may also change the scope (for example, in choosing whether or how much to spend on public relations and advertising related to the process) and reduce its potential cost.

It's unfortunate that specialized expertise is needed to make sure we follow all the rules and avoid the pitfalls in the statutory organized collection process. I believe you can thank the waste hauler interest groups that lobbied to make the rules as complex as they are.  They probably figured, rightly, that the more complex and cumbersome the process was made to be, the less likely any cities would actually follow it through and the more opportunities they would have to sabotage it along the way.

• No additional City staff needed for drafting, negotiating, monitoring, and enforcing contracts.

The assumed expenditure in the previous point already included the drafting and negotiating of hauling agreements, so it appears that NSWMA is double-billing us by listing it as a staff expense as well.

Come to think of it, that recent mailing which lists both the up-to-$5000 for public hearing preparation (including, for example, the postcard that the city mailed to notify residents of the hearing) and up-to-$60,000 for the whole potential scope of work (including all of the public hearing and resolution expenses), is charging us twice for the same thing as well.  This is starting to look like a habit.

In any case, as with their shameless distortions of public opinion data, this another example warning us that we simply can't trust NSWMA to give us accurate information.

• No additional City staff needed to field complaints from citizens about contract hauler.

This is a repetition of the "monitoring, and enforcing contracts" part of the previous point. Staff addressed it in the report for our February 7th workshop:

Administration of Collection System Contracts

During the November 2010 workshop, the city council inquired about the cost of administering a collection system contract. Administrative costs vary depending on how a contract is structured, i.e., whether the contractor or the city does the billing, customer complaints, education, etc. Using the administration of the city’s recycling contract as an example, the city budgets 20 percent of one employee’s time to this administration. This is equivalent to approximately $18,000 yearly.

As I've said many times before, I want to keep the city's role minimal -- the haulers should handle billing, customer service, etc., with the city only stepping in if a problem can't otherwise be resolved or it's otherwise necessary to enforce some part of the contract.  (Our recycling contract enumerates liquidated damages for various service failures, for example.)  So I would expect the administrative load to be comparable if not less than what is involved in the recycling contract.  And as I mentioned before, organized collection would likely mean a reduction in other current city administrative expenses.

To put that up-to-$18,000-per-year in perspective, I've run various estimates on what organized collection would be likely to save for Maplewood households compared to their current bills.  I come up with numbers in the hundreds of thousands of dollars per year.  Seems to me like a pretty good return on investment, without even adding in the other benefits to the environment and our residents' health.

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