How do we provide for all the services that we currently receive and drastically reduce the cost of recycling for our county?
We have to change the method by which we recycle. Currently we PROCESS our material. Specifically, when the recycling material is delivered from the resident’s curb to our recycling center, we use a very labor-intensive method to sort the various materials such as newspaper, cardboard and plastic.
Other models include SINGLE-STREAM, which is a system in which all recycled materials are collected and hauled unsorted to a processing center, instead of being sorted into separate commodities. DIRECT HAUL is another term used for taking the recycling material directly to the seller from the curbside rather than taking it to an intermediary site such as our recycling center.
During the PROCESSING of material, the blue bags are opened our employees at the recycling center, dumped onto a sorting line and each item is separated out by an employee into various bins. From there, this material is then packaged into various forms. These materials are sold to different buyers who pay us based on the quality of the material, but mostly on the price determined by the commodities market at that time. For example copper and other metals are bringing extremely high prices now. Compare that to four years ago when the metals market was severely depressed due to the downturn in the economy and the depressed auto market.
The commodities market is beyond our control. We see this in other markets not related to recycling, such as the stock market, the cattle market, gasoline prices and natural gas prices, which are down 35 percent in the last year. The high price of the commodities market is in many ways disguising the true cost of our recycling program.
We cannot control the revenue. We can however control our expenses. Labor-related costs make up 74 percent of our annual budget. To reduce the cost to our county, we have to bring our labor costs under control. The following spreadsheet is a breakdown of expenses related to salaries and benefits.
2011 – 2012 Solid Waste/Recycling Center Compensation
18 Full-Time Employees – 17 with Full Benefits
Changing our Model
We must eliminate the most labor intensive and least productive part of our operation, the sorting process. Rather than have the blue bags delivered to the Woodford County Recycling Center, we should eliminate that step by having the recycling material hauled directly to the Lexington/Fayette County Recycling Center – DIRECT HAUL. Currently, Rumpke hauls the blue bags to our center for county residents. For Versailles and Midway residents, their city workers haul the blue bags to the recycling center.
How does that work? For the county, currently we are under contract with Rumpke, a garbage contractor that picks up garbage for county residents as well as our recycling. Rumpke uses a special truck specific to only Woodford County because no other county that Rumpke contracts with uses the blue bags.
I spoke with our representative at Rumpke regarding having the recycling material hauled directly to Lexington. They determined there would be no difference in the cost from what they are currently charging if this had been in our current bid. In addition, rather than using blue bags, the company would provide 18 gallon red bins to each of their customers. This is actually preferable to Rumpke because they can use their regular trucks that compact the material rather than a “special truck” unique for Woodford County. The Lexington Recycling Center will not accept material in bags. It must be in loose form.
ADDITIONALLY, THE LEXINGTON RECYCLING CENTER TAKES GLASS. WOODFORD COUNTY DOES NOT RECYCLE GLASS. IT ALL GOES INTO A LANDFILL.
This contract ends on December 31, 2012. We will rebid this contract prior to the end of the year. We have the opportunity to rebid this contract to require the recycling material for county residents be Directly Hauled to the Lexington/Fayette County Recycling Center and for each customer in the county to receive a bin rather than having to use blue bags.
For the City of Versailles, their city workers currently pick up recycling on non-trash pickup days. They use a trailer to deliver the blue bags to the Woodford County Recycling Center. By eliminating the blue bags, they could use their garbage trucks to pick up the recycling in loose form and deliver it directly to the Lexington Recycling center. If Versailles were to receive the revenue from this recycling, it could help offset some of the costs related to transporting the material to Lexington and providing bins to the city residents. It might also provide some revenue for the city.
Midway does not have the same equipment for hauling material as Versailles. I believe we can come up with a cost-effective plan to deliver the material from the Midway resident’s curb to Lexington, whether it is through some arrangement with Versailles or through some other means. The Lexington Recycling Center is only two miles farther than the Woodford County Recycling Center from Midway. I believe there are viable options.
By having all Woodford County resident’s recycling Directly Hauled to the Lexington Recycling Center, we eliminate the $40,000 cost of the blue bags, and the expensive and labor-intensive method of sorting the material at the Recycling Center. Plus we can offer everyone who lives in Woodford County the opportunity to recycle glass.
So what does that mean for the Woodford County Recycling Center? Without the responsibility of sorting the recycling material, they will be able to perform the other services we offer such as taking solid waste and recyclable materials that are dropped off at the center. They will continue to pick up recycling from businesses, factories, schools, farms and churches. They will continue to offer the same services offered now.
What would happen if we greatly increased the amount of recycling by our residents? Under our current model, we would have to employ more people at a greater cost to the county to sort the additional material. Under the Direct Haul proposal, no additional personnel are needed because the material taken from the curb to the Lexington Recycling Center is not sorted or handled by Woodford County Recycling employees. This new plan would allow our county to greatly increase recycling without adding additional costs to our budget.
Under our current plan, 8 of the 18 full-time employees plus the 5 inmates sort material. The remaining 10 employees provide the additional services offered by our Recycling Center.
The following is a spreadsheet with an estimate of what the labor cost might be to run our Recycling Center under the Direct Haul proposal. This still leaves 5 full-time employees with benefits and 4 full-time employees without benefits. We regularly use Woodford County inmates at an average of 800 hours per month or the equivalent of almost 5 full-time Employees. Under this new plan, there will be the equivalent of 14 full-time employees including inmates to do the same services without the need to sort.
To reduce costs we must restructure the way we pay employees.
In addition, the county has used inmates from the County Detention Center at an average of approximately 800 hours per month or the equivalent of almost 5 full- time employees.
Total Number of Full-Time Equivalent Employees = 14
|
Budget Proposal for Direct Hauling Zero Revenue1 |
|
| RECEIPTS | |
| Solid Waste | $ 135,000 |
| Rumpke | $ 36,000 |
| Recycling | $ 0 |
| TOTAL RECEIPTS | $ 171,000 |
| EXPENDITURES | |
| *Non-Salary Expenses | $ (234,891) |
| Salaries | $ (252,268) |
| Benefits | $ (86,653) |
| TOTAL EXPENDITURES | $ (573,812) |
| TOTAL COST TO COUNTY | $ (402,812) |
| Total Cost to County under current 2012 Budget | $ (575,148) |
| ANNUAL SAVINGS USING DIRECT HAULING | $ 172,336 |
*Blue Bags at $ 40,000 per year not used under this proposal
1 The Lexington/Fayette Recycling Center charges $42 in fees per ton. This proposal is based on receiving $42 in revenue to offset the charges. The net result is zero revenue. This scenario is used to demonstrate that even if the county did not receive any revenue from recycling, it would still save almost $175,000 per year.
Revenue from the Lexington/Fayette Recycling Center
The scenario in the previous chart assumed that there would be no revenue from recycling. That is an unrealistic scenario, but it does show that even if there were zero revenue coming from recycling, the county would still save money because of the reduction in our expenses.
How would the county get paid for recycling?
The Lexington/Fayette County Recycling Center works with many surrounding counties and cities by receiving their recycling material and paying them in return. Jessamine, Boyle and Franklin Counties all send their recycling material to the Lexington Recycling Center. Danville and Frankfort does as well. Once the material is received by the Lexington Recycling Center, they do an initial audit on the contents and a price is determined for future deliveries.
The Lexington Recycling Center at current prices estimates that we should expect to receive NET REVENUE of $100 to $150 per ton. There is a $42 per ton charge for processing and other fees. The NET REVENUE figure is what we receive after paying the $42 charge.
Jessamine County received net revenue of $152 per ton in 2011. Boyle County received net revenue of $132 per ton last year. That does not include revenue from metals and cardboard that is sold separately from what the Lexington Recycling Center pays. My projections in the next chart at $120 per ton in NET REVENUE are very realistic in this market. There should be additional revenue from the metal and cardboard that is received at the Woodford County Recycling Center from pickups from businesses, etc. and dropped off materials.
I am also reducing the number of tons per year in my budget proposal from 1,200 to 1,000 to account for the possibility that Versailles and Midway might sell directly to Lexington. There is also the possibility that we will recycle more as a county if residents are given a permanent bin that they can keep at their homes rather than using the blue bags. In my opinion, the blue bags hinder recycling. Many residents work out of the area and are not home to be able to pick up the bags except on Saturdays. There are only three locations available and only the Recycling Center is open on Saturdays. Frankly, many residents won’t recycle if they have to make a special trip to pick up the bags. In addition, a roll of bags is limited to one per trip. The permanent bins will encourage more recycling as they decrease barriers for residents to recycle.
The two scenarios show that we can save between $172,336 and $292,336 under this new proposal. While these are just estimates, they demonstrate that the County can save an estimated $250,000 by changing the way we structure our Solid Waste/Recycling Department.
|
Budget Proposal for Direct Hauling Realistic Revenue1 |
|
| RECEIPTS | |
| Solid Waste | $ 135,000 |
| Rumpke | $ 36,000 |
| Recycling | $ 120,000 |
| TOTAL RECEIPTS | $ 291,000 |
| EXPENDITURES | |
| *Non-Salary Expenses | $ (234,891) |
| Salaries | $ (252,268) |
| Benefits | $ (86,653) |
| TOTAL EXPENDITURES | $ (573,812) |
| TOTAL COST TO COUNTY | $ (282,812) |
| Total Cost to County under current 2012 Budget | $ (575,148) |
| ANNUAL SAVINGS USING DIRECT HAULING | $ 292,336 |
*Blue Bags at $40,000 per year not used under this proposal
1 The Lexington/Fayette Recycling Center charges $42 in fees per ton. This proposal is based on receiving $162 in gross revenue per ton minus the $42 in charges. The net result is $120 per ton in net revenue. The total number of tons per year was reduced to 1,000 tons from 1,200 to account for the possibility that Versailles and Midway recycling is not included in this total.
Placing Employees in New Positions
One of the most difficult issues with making this drastic a change is the reduction in the workforce. Under my proposal, we will reduce the number of full-time employees with benefits from 17 down to 5. These are difficult decisions and how we deal with these employees is important. At the same time, we must also be willing to make changes that are necessary to make sure that we are spending our tax dollars wisely. We have an opportunity to make a change that will provide for the same level of service at significantly lower costs.
Making these changes will not happen immediately. There will be no two-week notices. Since our contract with Rumpke is not over until the end of the calendar year, we will have more than nine months to implement these changes. That gives us an opportunity to help find positions for as many people as possible.
Each year jobs become available within the county. Recycling employees can be given preference over other candidates. In addition, each year departments hire because employees leave. So attrition is also a realistic scenario at the Recycling Center as employees naturally leave to find other positions. The Recycling Center hired 5 full-time people last year many as a result of attrition. The following are positions that became available in 2011:
- Recycling FT – 5
- Road Department FT -1
- Jail FT – 1
- Jail PT – 17
- Jail PT to FT – 7
- Maintenance FT – 1
In 2011, 10 full-time positions became available in Woodford County plus several positions as a result of turnover at the Recycling Center. Each year is different, but last year we were able to fill 15 full-time positions. With more than nine months of notice, the goal is that each of these individuals will be able to find jobs within our own county or somewhere else.
Additional job training may be need such as obtaining a commercial driver’s license (CDL) to work in the Road Department. The County should consider helping to pay for additional training.
Conclusion
Woodford County spent almost $2 million for the Solid Waste/Recycling Department during the last three years. The responsibility for this cost rests squarely on the shoulders of the Woodford County Fiscal Court made up of eight Magistrates and the County Judge-Executive. The Fiscal Court approved every hiring decision by the Recycling Center, so the Fiscal Court should be responsible for correcting the financial problems. This is not an easy decision, but as elected officials we are placed in a position of public trust to make the difficult, but needed changes rather than taking the path of least resistance.
My recommendation is to approve this plan to change the method by which we recycle so that all of our recycling in Woodford County and both cities are directly hauled to Lexington. We can do this as we rebid the contract with our garbage collection provider and work with Versailles and Midway to come up with a plan for their recycling. In addition, we need to approve the restructuring of the positions at the Recycling Center and look for ways to place employees into different positions within the county as they become available.
The result will be a significant reduction in the cost to the county for Recycling Services of $250,000 per year and a slowdown of future costs related to benefits.
In addition, the residents of Woodford County, Versailles and Midway will be able to recycle glass rather than sending it to a landfill.
It will also result in the elimination of the blue bags, which cost the county $40,000 each year and replace them with permanent bins to encourage greater recycling in our county.
Recycling was never intended to be a “money making’ operation. By its very nature, recycling is intended to eliminate waste and promote the conservation of our resources. Somewhere along the way we forgot that tax dollars are also a resource that should not be wasted.
Woodford Recycling 