ILSR has been looking into curb sort recycling in an effort to help citizens of Fayetteville, Arkansas defend their curb sort system against efforts to change to a single stream system. Follow this link to one of ILSR’s articles on the matter.
Maria Kei Oldiges, an intern with ILSR’s Waste to Wealth Initiative, helped research and analyze reports on Fayetteville’s curb sort system. She has also prepared this following report on curb sort in Centre County, PA.
Oldiges just finished her second year of graduate school at UC Berkeley where she studies international development with a specialization in solid waste.
The Centre County Recycling and Refuse Authority (CCRA) is the main waste management agency of Centre County (pop. 161,464), located in central Pennsylvania. In 2016, CCRA asked MSW Consultants, together with Willdan Financial Services, to evaluate the operational and economic feasibility of converting their current curb sort recycling system to single stream recycling (SSR) and to make rate structure recommendations. This brief will focus on the former of these two objectives. Their findings are of particular importance in the single stream vs. curb sort (or any alternative collection method) debate, as they reveal:
- key insights about the true costs and benefits of SSR
- possible best practices in recycling collection for other waste management authorities with jurisdictions of similar characteristics.
In this brief, I will explore in depth the economic and operational reasons why the study concluded that CCRRA should retain its existing curb sort system, and then discuss the implications of these findings for waste management efforts elsewhere.
The Curb Sort Recommendation
General Capital Costs
CCRRA’s current residential and commercial curb sort system entails the use of vehicles with compartmentalized receptacles for various materials, all of which are segregated at the curb. There is also a designated commercial route for cardboard pickup. Conversion to a SSR collection system would require new capital investments in the form of a new Materials Recovery Facility (MRF), automated trucks, and maintenance for both. According to industry practitioners, automated trucks are associated with higher productivity and lower injury rates compared with vehicles used for curb sort. When one compartment of a curb sort vehicle is full, the truck must tip; automated SSR trucks can wait until the entire truck is full, as there is only one consolidated vessel to contain all material types. As a result, operators can stay on their routes longer and thus be more efficient. These vehicles also ostensibly require fewer operators. The drawbacks are both obvious and subtle. Automated trucks required for SSR are significantly more expensive to purchase and maintain. Another less overt drawback is that at the point of collection, operators cannot identify contamination, as materials are hidden completely first in the cart and then in the vehicle.
Efficiency Gains are Marginal and Selective
Waste Management, the waste services behemoth in the industry, estimates a staggering 40% increase on average when converting to single stream (though this statistic does not specify conversion from what system). In the case of Centre County, MSW consultants projected that each household participating in single stream (i.e., receiving a cart) would achieve ~400-450lb diversion. Many of the households in the residential curb sort coverage are already achieving close to this, with one coverage area (State College Borough/Bellefonte) diverting nearly 500lb/HH. Taken as a whole, Centre County has achieved about 90% participation in recycling. Simply put, the relative success of the existing collection system diminishes the volume (and participation) gains of SSR and, when modeled together with the capital and operating costs, do not justify the system change.
Additionally, there are several areas of the county cannot be serviced by the automated vehicles used in SSR–the Automated Side Loader and Automated Front Loader, presumably due to the size/design of the streets. They would require other collection vehicles (specifically, 1,400 households require a pup truck, and 2,900 households require the standard rearloader, used in curb-sort.) Maintenance and operating requirements of these additional vehicles detracts from the efficiency gains of automated collection in SSR.
Finally, efficiency gains in SSR are undermined by the additional future cost of education campaigns. One consistent outcome of SSR is the increase in “wishful recycling” that occurs. Believing that all seemingly recyclable materials are accepted, participants exercise overly ambitious criteria for separating their aggregated recyclables. This contributes to the high contamination rates seen in SSR. To counteract this, CCRRA would need to implement stronger education and awareness campaigns—a further cost.
Operational Cost Savings
MSW Consultants’ report and projections reveal a significant cost savings from converting to SSR, largely in the form of labor costs and operating and maintenance costs ($1,244,000 savings from labor and $450,000 for vehicle O&M). These savings assume every-other-week collection, as the projections would only provide incremental benefit over the status quo if collection occurred at that frequency. With weekly collection, that becomes a projected $676,600 savings for labor and $565,400 for vehicle O&M. These cost savings are almost ENTIRELY NEGATED by the higher annualized capital cost of the initial investment in a single stream-capable MRF.
Overall, an every-other-week SSR system would result in an incremental net revenue gain of ~$73,000-$179,000, but only when assuming a very conservative 5% residue/contamination rate, an increase in end-market sales revenue, and every-other-week collection with larger carts. The annualized cost of capital more than doubles under weekly collection, and renders SSR entirely unfeasible at this frequency. Pro forma financial statements reveal that with conversion to SSR from curb sort, expenses shift from being comprised mostly of labor costs, to equal parts labor and vehicle operations/maintenance. Operational savings with SSR are large but they are overshadowed by the plant and equipment cost.
The Outsourcing Decision
When municipalities decide to convert to single stream, a critical consideration is the decision to either build/convert their own MRF, or to partner with an existing SSR-capable facility. Centre County has the option to partner with Lycoming County. In some cases, partnerships involve a revenue sharing arrangement. In the case of Lycoming and Centre counties, Lycoming would accept the materials without charging a processing fee but then in turn would not give Centre County any earned revenues from material sales. This zero revenue for Centre County, coupled with the transportation cost they would incur, makes the option not viable.
Losses in the form of high contamination and residue rates are typical of SSR systems. MSW Consultants’ report assumes 5% contamination. This is highly conservative (as acknowledged by the report) considering the current and historical residue rate averages of 17% and 12% respectively. Further losses can be incurred by changes in material acceptance policies. CCRRA currently accepts three different colors of glass under curb sort and successfully sells them to end markets; with SSR, glass would no longer be recoverable.
Implications beyond Centre County
The importance of accounting method
CCRRA is committed to being financially self-sufficient. Considering the costliness of recycling operations, the volatility of commodity prices for recycled materials and the financial performance of waste collection in other American municipalities, this is a huge success. CCRRA’s historical financial statements demonstrate the excellent performance of its recycling operations. In every year since 2011, adjusted net income has been between $0.5 million to $1.5 million.
CCRRA’s accounting methods have supported this financial health of their operations. Cost allocations are made based on services (e.g., disposal, collection, processing, and management & administration), then further distinguished by collection geography. They also allocate some system costs (overhead) to the various services. In this way, the true cost of service has been reflected in their rate structure over the years and rates have shifted accordingly. Several services (including residential collection) are intentionally cross-subsidized by landfill tipping fees at drop-off and the transfer station, and thus warrant differential rate increases in the future. With single stream, processing costs would increase—deepening the burden of transfer and drop-off to subsidize this cost—and net revenue from curbside would not grow commensurately. This result is made readily apparent thanks to CCRRA’s costing methods. CCRRA’s logical and consistently applied internal accounting system is an example for other waste management authorities to follow.
In Centre County, recycling is the only publicly provided waste management service. Trash collection is provided by other entities. For this reason, the economies of scale that CCRRA might otherwise reap (from the automated collection of both recycling and trash) do not exist. Other waste management authorities may find that SSR makes sense for them if they are already providing recycling and trash (and green waste, in some areas). The Centre County lesson here may be that a more creative mix (e.g., outsourcing waste collection to other entities + publicly provided recycling + curbsort design) in a waste management authority’s approach is a viable alternative to SSR.
SSR offers the most benefit when it can be implemented uniformly, which was not true in Centre County, as many households could not be serviced by automated vehicles. With non-contiguous service areas, SSR’s often-touted economies of scale do not shine.
Centre County is an excellent example of a financially sound public curb sort recycling program employing strategies that protect local economies and achieve admirably high diversion rates. They demonstrate that, contrary to the popular logic promulgated by single stream proponents, small and medium waste management jurisdictions might be better off with curb sort, for the sake of cost containment and true waste diversion.
“How We ThinkGreen | Waste Management.” Accessed April 10, 2017. http://www.wm.com/thinkgreen/how-we-thinkgreen.jsp.
“Population Estimates, July 1, 2016, (V2016).” U.S. Census Bureau QuickFacts. Accessed April 9, 2017. //www.census.gov/quickfacts/table/PST045216/42027.
Rosengren, Cole. “MRF Survey: Single-Stream Now Main Type of Processing in the US.” Waste Dive, November 7, 2016. http://www.wastedive.com/news/mrf-survey-single-stream-now-main-type-of-processing-in-the-us/429881/
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