LM Board of Commissioners Monthly Meeting

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Wynnewoodie's picture
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2009-09-23 9:00 pm
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The monthly meeting of the Lower Merion Township Board of Commissioners will be held on Wednesday, September 23rd at 8pm in the 2nd floor Board Room in the Township administration building (75 East Lancaster Avenue).

The agenda (www.lowermerion.org/index.aspx?recordid=1497&page=51) includes a new fee structure for solid waste collection and a new debt management policy for the township.

This meeting offers the last chance to comment on the current draft of the solid waste disposal fee structure before the township secretary will be given approval to advertise its adoption as an new ordinance.

The proposed fee structure is highly regressive, punishing subscribers who generate the least waste and failing to provide any incentive for high waste volume subscribers to reduce their waste stream.

This is a terrible proposal, and I encourage all Lower Merion residents to write to their commissioners AND attend this meeting to make it clear to the BOC that they must direct Mr. Cleland to come back with a proposal that distributes the cost of eliminating the general fund subsidy over the subscriber base more equitably, and that provides a clear financial incentive for high waste volume subscribers to reduce their waste stream.

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cscott's picture
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Commissioner Dellheim has a letter in this week's Main Line Times claiming that the BOC is "striving to make trash collection fees more equitable in LM." Unfortunately, the proposal for the fee structure that was recommended to the Board by the finance committee on September 9th ("option 2") isn't equitable at all.

The solid waste disposal fee is being raised to enable full cost recovery of waste collection in LM. In part, this is a question of fairness because many residents (particularly those who own condominiums) contract refuse collection from private haulers but also pay taxes that currently subsidize the shortfall between fees and actual costs of refuse collection by the township. The BOC has mandated that the fee structure for solid waste collection by the township going forward must ensure full cost recovery, so residents who make use of private haulers will no longer have to subsidize a service that they don't use.

So far, so good.

It's in devising a fee structure to make up for the shortfall (~$900,000) that things go awry.

There are basically two schools of thought for how to spread this increased cost over the subscriber base. The simplest is to divide the cost by the number of subscribers (~16,000), and increase everyone's fee by that amount (~$56). That basically corresponds to "option 1", which was one of the three proposals considered by the finance committee on 9/9.

The second approach is to divide the shortfall by the amount of refuse (~33,000 containers) and charge each subscriber based on the amount of refuse they generate (~$27/container). This approach has the added advantage of creating a financial incentive for every subscriber to reduce their waste volume, which is beneficial both to the subscriber base (reducing disposal costs and workers compensation claims/insurance premiums and increasing recycling revenue) and the environment (less refuse to landfills; more to recycling centers or back to the soil as compost). This approach basically corresponds to "option 3", which was also considered by the finance committee on 9/9.

So, for any subscriber, the increased fee should range somewhere between equitable division (option 1) and volume-based incentive (option 3), right?

Wrong!

Consider the plight of subscribers who contract with the township for collection from a single container. They constitute 44% of the subscriber base (7045/16118) and they generate barely 20% (7045/33000 = 21.3%) of the township's waste. Not only are these the residents who generate the least waste and therefore cost the refuse & recycling division the least money, this subscriber pool also includes a disproportionate share of seniors and people on fixed incomes, so you would think that the BOC would be careful to avoid charging this group of subscribers at a higher rate than any other.

Unfortunately, that's exactly what option 2 does. Although single container subscribers are only 44% of the subscriber pool, and although they generate only 21% of the township's waste, these subscribers are expected to pay more than 60% ($556,555/$895,018 = 62.2%) of the increased fees necessary for full cost recovery under option 2. (See below for the full analysis).

Option 2 Analysis

Welcome through the looking glass, Alice!

Now consider what option 2 has in store for the township's most wasteful residents (3 - 5 containers per week). Calculating the revenue that will be generated from these subscribers under option 2 is a bit more involved, but not impossible (that's what all of the colorful stuff in the second table at the bottom of the page is for), but it's worth the trouble because the calculation makes clear that under option 2, the 30% of current subscribers who generate the majority (54%) of the township's waste are expected to cover less than 20% ($167,607/$895,018 = 18.7%) of the increased fees necessary for full cost recovery.

Curiouser and curiouser -- talk about an inverted incentive structure! (Scary thought: the BOC arrived at this upside-down and backwards fee proposal on 9/9/09; does that mean it bears the mark of the beast (666))?

Option 2 is environmentally, socially and fiscally irresponsible. It must not be approved for publication by the BOC on Wednesday. Please contact your commissioner and voice your objection to option 2, and come to the BOC meeting on Wednesday to convince all of the commissioners to oppose this a**-backwards proposal (sorry Carla).

chuck

"The best way to predict the future is to invent it." -Alan Kay

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"The best way to predict the future is to invent it." -Alan Kay

bobguzzardi's picture
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very detailed analysis, chuck scott. Unfortunately, not much time at last LMBOC to analyze.

I would also point out that 10,117 use rear yard pick up. The very capable Don Cannon estimated cost of rear pick up fee at $200 if 3000 use the service. Extrapolating, using the $200 fee, this amounts to a savings of two million dollars which is more than subsidy of $1.75 million estimated for 2009 (if I recall correctly). Even if my calculation is off by factor of 100%, fully costing rear yard pickup should save a million which lowers costs to all.

Total Solid Waste Budget is 7,000,000 and approximately 16,800 use Township pickup, that is, out of 23, 700 Households. So about 29.4% do not use service but pay for subsidizing those who do and for the rear yard pickup.

Actually trash pick up comes to about $20 a week ( 7,000,000 divided by 16,800) and that is a deal.

I am not contesting your analysis which seems thorough and careful. You may well be right and it is very helpful to any Commissioners or staffers reading this. It is certainly helpful to your fellow citizens who have to pay for this.

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bobguzzardi's picture
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I noted that you commented on Main Line Times. Thanks for this thorough and excellent analysis. and thanks for providing information to Main Line Times. Jane Dellheim has been on board for many years and has never advocated full cost recovery until recently. Is this because Commissioner Brown is raising the Debt and Budget Deficit issues?

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