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New Help for Cities Auditing Private Trash and Recycling Contractors

| Written by Neil Seldman | No Comments | Updated on Jan 21, 2014 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/cities-auditing-private-trash-recycling-contractors/

New Help for Municipal Officials: Forensic Audits of Private Trash and Recycling Contractors, and Efficiency Analysis of Municipal Trash and Recycling Programs

ILSR and Sustainable Environmental Management Company (SEMCO) have joined to make state-of-the-art analytical tools available to city and county agencies overseeing solid waste and recycling programs. ILSR president Neil Seldman, and SEMCO president Jon Michael Huls will direct this new outreach effort. Seldman and Huls have been working partners for over 30 years in the field of resource management.

ILSR is partnering with SEMCO because of its unique understanding and longstanding involvement with nonprofit organizations and agencies, to help local governments get the most recycling for the least cost.  ILSR helps local governments maximize recycling and composting, and SEMCO will be a critical asset for communities to do this.

SEMCO pioneered the field of forensic analysis of municipal refuse management firms, focusing on the efficiency and effectiveness of solid waste programming and financial management.  ILSR is now working with SEMCO to help local governments improve their waste management and recycling systems and to recover revenues where appropriate.

What is a forensic audit and why should a community consider an audit to address several important challenges facing city and county agencies.

Forensic waste auditing is an investigative practice used to identify and quantify service and fee anomalies and inconsistencies in municipal waste and recycling collection, processing and disposal systems. “Forensic” means “suitable for use in a court of law.”  It is to this standard and potential outcome that forensic waste auditors generally have to work.  Forensic waste audits can be used to resolve actual or anticipated disputes or litigation; provide for financial recovery in communities from contractors’ fraudulent or inappropriate activities; and can be very helpful in negotiation processes for municipal related contract and franchise services.

  • Evaluate the performance of hauler with respect to Agreement(s) – is your community getting the best deal in light of recent price increases? Are all services rendered?
  • Compare the performance of hauler(s) with respect to the industry standard – is the franchisee’s service comparable to nearby cities and their customers? Are prices consistent? Does your hauler attempt to burden smaller generators with higher per unit costs so they can reward larger accounts with lower prices?
  • Analyze the financial circumstances – is the City receiving services paid for? Is the community benefiting from the franchise, and do all dollars add up?
  • If the performance has been unsatisfactory, what recourse does the City have? What compensation is due?
  • Cities and counties to evaluate in-house recycling and trash collection services, or inspire local businesses to implement zero waste programs that save money or generate revenue can also use the audit process.

How successful have forensic waste audits been?

In the past few years the forensic waste audit process as proposed by ILSR and SEMCO has resulted in the following:

  • Nearly $2 million in unpaid fees collected in one city in the Los Angeles area
  • $35 million over 10 years in franchise fees generated without having to raise residential and commercial rates in a Southern California city, along with numerous upgrades in services and new programs at no additional cost to the community
  • $50,000 in rebates obtained for multifamily complexes in a city due to fraudulent collection practices
  • Avoidance of steep collection rate increases in numerous cities through the disclosure of market and industry conditions unknown to local governments but used by contractors to try to extract higher fees
  • Hundreds of thousands of dollars in added revenue from negotiated settlements on host fees for communities that bear the environmental costs of solid waste facilities
  • Over $50,000 per year in added revenue to a local business through cost avoidance and recycling, in forensic waste auditing performed under contract with a local government

ILSR was established in 1974 to provide innovative strategies, working models and timely information to support environmentally sound and equitable community development. ILSR’s program areas include recycling and economic development, broadband communications, small-scale energy production, and retail and finance.

SEMCO was established in 1995 to serve local government in all aspects of integrated environmental management. SEMCO is particularly adept at designing, implementing, and funding innovative and sustainable refuse and recycling programs.

Contact Neil Seldman at nseldman@ilsr.org

Contact Jon Michael Huls at  semco.info@sustainable-env.com.

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About Neil Seldman

Neil Seldman, Ph.D, directs the Recycling and Economic Growth Initiative. He specializes in helping cities and businesses recover increasing amounts of materials from the waste stream and add value to the local economy through new processing and manufacturing facilities. He is a co-founder of the Institute for Local Self-Reliance and is a member of ILSR’s Board of Directors.

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