City trash fees likely increasing due to competitionby Carli Brosseau on May. 11, 2009, under Edge, Local
Private firm cleaning up at Tucson’s expense
Tucson officials estimate a transfer station opened in November by garbage giant Waste Management will siphon 100,000 tons of trash and $3 million in revenue from the city over the next year.
The lost revenue, in combination with plummeting prices for recyclables and high prices for gas, mean the 5-year-old and much scorned city garbage fee is set to go up. Landfill fees have already seen increases.
Environmental Services Department Director Andrew Quigley has asked the City Council to raise the trash fee to $14.50 per month beginning July 1.
A City Council vote on the proposed 3.6-percent increase is set to follow a public hearing June 2.
That day, the council also is slated to tentatively approve a $1.3 billion budget that, as of Friday, included $12.4 million in new or increased taxes and millions more in raised fees. The same day, the council will weigh whether to raise bus fares.
With a budget that relies heavily on sales tax receipts, the city has been struggling to pay its daily bills.
The Environmental Services Department is in similar shape, also having to contend with volatile gas and recyclables prices and relying on sources of funding that are on the decline, most notably private haulers’ landfill fees.
While the public landfill business appears on a downhill slide, Waste Management is reporting increased landfill profits.
The company stated in its first quarter earnings statement that its landfill revenues rose 3.1 percent from the same year before even as its overall earnings dropped more than 16 percent amid a recession.
Waste Management operates the largest network of landfills in the country, with 277 sites accepting more than 116 million tons of waste per year, according to its Web site.
Two of those sites are in the Tucson area, and both have represented challenges to the local governments operating nearby dumps.
A transfer station at 5200 W. Ina Road contributed to Pima County raising landfill fees last year and second-guessing the timing of the closure of its Northwest Side landfill at Tangerine Road.
The opening of Rincon Transfer Station at 5890 S. Mann Ave. in November is causing consternation among city officials because private haulers who once dropped waste at the city’s Los Reales Landfill have begun using the Waste Management facility.
Quigley estimates the shift will mean 20 percent less trash – 100,000 tons – entering the city’s Los Reales landfill next fiscal year, which begins July 1.
Waste Management Arizona spokeswoman Melissa Quillard would not say how much trash the Mann Avenue transfer station accepts. She said publicizing the information could give competitors an advantage.
But Quigley is certain a large proportion of the trash that had been going to Los Reales is now headed for ultimate disposal at Waste Management’s Maricopa and Pinal county dumps.
In a bid to recoup some of the financial losses that follow from the diverted trash, Quigley has offered cut rates to haulers that promise to deliver a set amount of waste.
He hasn’t received any responses yet, though he said haulers expressed interest when he first came up with the deal.
“Right now, we’re just waiting,” he said.
Councilwoman Nina Trasoff praised Quigley for his attempt to extend a deal to the haulers.
“I think that the money he’s going to recoup that way is a very creative approach,” she said.
Regardless of how successful the contract program is in luring haulers back to Los Reales, Environmental Services will almost definitely need other revenue to stay in the black.
That leaves the City Council with an unpopular political decision and one that brushes up against campaign promises made by at least two council members.
Both Trasoff and Councilwoman Karin Uhlich campaigned against the $14 a month trash fee four years ago, saying it was too expensive and implemented inappropriately.
They said when the fee was imposed the year before – 2004 – public comment opportunities were lacking and the waiver program for low-income city residents was inadequate.
Now they’re faced with upping the price.
“(Raising the trash fee) will never make me happy,” Trasoff said. “But it’s been demonstrated that there’s a real need and the money is used for garbage services. I can live with it so long as I know that we have a meaningful waiver program in effect.”
Uhlich takes a similar stance, though she puts the proposed increase in the context of a plan to attach fees to indexes.
“I think there seems to be support on the council to apply indexes across all city fees so that we avoid the large adjustments, which are historically more the norm,” she said.
The reason for indexing, Uhlich said, is that increases will be predictable and therefore easier to incorporate into budgets.
So that applying an index wouldn’t simply mean prices increase gradually but without any relationship to cost trends, Uhlich suggests using indexes that apply directly to the fee at hand.
A fuel index, for example, could be applied to a garbage fee because fuel is one of the primary costs in collecting trash, she said.
Councilman Rodney Glassman, like Trasoff, is not entirely opposed to indexing, though he is wary of applying indexes across the board.
“It’s important when looking at the question of indexing to consider other factors such as the economy and the actual cost of providing the services,” he said. “I support indexing as part of a pricing model but not something that can be relied upon as the sole indicator of price adjustment.”
He advocates giving department directors more leeway in setting fees and running departments more like businesses.
He also thinks the trash fee increase is a better alternative to letting garbage services suffer because there’s not enough money to pay for them.
“It’s unrealistic to think that the department can continue to provide services without adjusting their rates over time,” he said.
Councilwoman Regina Romero also seems to accept the fee increase but is less enthusiastic about using an index.
“It seems that the fees are accumulating,” she said. “At the same time, I see the budget holes.”
TRASH AT A GLANCE
Los Reales Landfill, 5300 E. Los Reales Road
Hours: 6 a.m. to 5 p.m. Monday through Saturday
Residential rates: $10 for a covered load weighing less than a ton; $30 per ton for heavier, covered loads; uncovered loads cost $5 more
Commercial rates: $30 per ton for covered loads; $5 more for uncovered loads
Waste Management’s Rincon Transfer Station, 5890 S. Mann Ave.
Hours: 7 a.m. to 3 p.m. Monday through Friday; 7 a.m. to noon Saturday
Residential rates: $38 per ton plus $14 per load for loads weighing less than 500 pounds
Commercial rates: $38 per ton plus about $5 in variable fees
Source: City of Tucson and Waste Management