HomeMy WebLinkAboutBack-Up DocumentsCity of Miami — Department of Solid Waste
Bulky Trash Pickup — Cost Model Results
5 Scenarios °'
• Disclaimer
• Illegal Trash
• Outsourcing
• Executive Summary
• Underlying Assumptions
• General
• Illegal Dumping
• Volume
• Productivity
• KPIs
• Outcomes per Scenario
• Next Steps
Disclaimer
• The results presented in this document should not be treated or
interpreted as final; as an estimate is used for the amount of illegal
trash being collected due to limited data available at the time of the
review. The tracking of illegal trash tonnage however has begun
• The results of this document reflect the Department's current state
• The scope of work does not formally include a comprehensive
analysis for setting a trash pickup fee only and/or reviewing the
existing $380 fee for garbage and trash pickup service
Illegal Trash - Definition
• Definition of illegal residential trash for this study:
• Trash dumped by the residents of the City of Miami who do not pay for it or
do not comply with the City Code
• Trash that originates from the City of Miami residential building, but dumped
by a contractor
• The fact that illegal trash is found and collected in residential areas
does not mean that it originates in the City of Miami
• Illegal trash is not considered significant in the 51+ unit buildings
Illegal Trash - Findings
• The current 10,000 tons is an estimate
• Recently started collecting illegal trash data
• Not all the illegal trash volume will go down
• According to the City of Miami Police about 58% is related to residential
buildings. The other 42% is related to trash coming outside of the City of
Miami
• There is a maximum reduction of 47% expected since some residents will still
not comply with the code
• Illegal trash is already being collected in the As -Is situation and is currently
included in the 1-3 unit buildings tonnage numbers
• Reduction in illegal trash will not reduce trash volume as it will become legal
trash when service is provided to buildings in the respective scenarios
Outsourcing — Price Estimates
• Third party vendors were contacted to obtain price estimates based
on projected volumes and units related to each scenario
• 10 commercial haulers were contacted
• Commercial haulers were briefed on what was needed to obtain a
price estimate
• One quote: $420 per unit including disposal and franchise fees
• Only one quote was received
• No formal RFP process was conducted
• Vendors did not have the capacity to undertake the expected operation
Outsourcing - Challenges
• Two trash picking operators working on the same routes is not
recommended due to:
• Logistical challenges related to scheduling
• Legal challenges related to who picks up illegal trash
• Lack of economies of scale resulting in a higher cost per unit
• If pickup service for additional units is outsourced, the Solid Waste
trash pickup operation will have to be downsized. Currently Solid
Waste is already picking up trash from the additional units as illegal
trash. Therefore, this volume will be lost to the 3rd party
• These two statements are specifically applicable to the 4-12 and 13-
50-unit buildings
DELIVERABLES
OUR METHODOLOGY
The methodology used for the City of Miami Solid Waste Cost Study supports
r X
Cost Analysis
Detailed insights in the cost of
trash picking service.
the following deliverables:
Scenarios
Results of 5 scenarios showing
the impact on illegal trash, cost
per unit served, budget, etc,
0
Investments/Outsourcing
Insights additional investments in
both equipment and people. For
reference high level quote of 3rd
party.
L
Trash Fee
The details of the cost study can
be used to set a trash pickup
service only fee.
ONE
COST, FTE, TONS,
KPI
• to months 2021 cost
• Extrapolated Full Year
• Direct and Indirect
• Incl. Fleet &
Depreciation
• Tons Green & Regular
• $/Ton, $/Unit, $/FTE,
Tons/FTE, Tons/Unit,
etc.
TWO
VOLUME &
LOCATION NEW
BUSINESS
• # Extra Buildings
• # Extra Units
• # Extra Tons
• Overlap with existing
routes
• Distance to disposal
locations
• Traffic
10:1Oki :I :�
ASSUMPTIONS
COST, VOLUME,
PRODUCTIVITY
• Utilization equipment
• Illegal trash volume
• Green waste ratio
• Productivity changes
• Backoffice & software
• Extra people
FOUR
DEVELOP MODEL
AND RUN
SCENARIOS
• As -Is
• % Change
• Gross & Net Tons
• Productivity effect
• FTE required
• Fleet expenses
• Disposal fees
• Inflation
• Unforeseen
• Loss of Income
• New income
COST STUDY SOLID WASTE TRASH PICKUP
CITY OF MIAMI
OUR APPROACH
FIVE
VALIDATE
RESULTS
• High level
assessment
• Detailed assessment
• Comparing scenarios
• Sanity Checks
• 3rd party quote
• Discussion with MT
Taking into account
KEY CONSIDERATIONS
RISK
Mostly reflects uncertainties and lack of detailed data & insights
ILLEGAL TRASH
What is the effect of extending the trash pickup service on illegal trash
FINANCIAL
The bottom line impact on the financials of Solid Waste / City of Miami
PRODUCTIVITY
Can SW better utilize existing equipment and people
10
1l1.1IN W :1111 :j:i•1•nL440WIVA
SCENARIOS
RISK & PRODUCTIVITY
0
S2 s1 For 51+ unit buildings there is a higher risk as the pick-up
method, roll -off or manual, Will be different from the
0Y Y current main method.
a a
Adding 4-12 and 13-50 unit buildings Will increase the
productivity due similar routes, better use of existing
equipment and people.
NEGATIVE PRODUCTIVITY
OO Size of buffet reflects # of units
11
(ISI-cenario 1 = 4-12 units
Scenario 2 - 13-50 units
Scenario 3 - 51+ units
Scenario 4 - 4-50 units (1+2)
Scenario 5 - 4+ units (1+2+3)
II►[yI111xcL1M0 1
S2
S1
S5
S4
DECREASE ILLEGAL TRASH
Q O Size of bullet reflects # of units
SCENARIOS
ILLEGAL TRASH & FINANCIAL
Projection of financial results is based on the
assumption that the extra units will be charged the new
W
a average cost per unit per year associated with each
Z
U- scenario.
W
0=
m There is currently no illegal trash issue with 51+ unit
buildings. Change of trash pick up service there could
result in more illegal trash
12
cenario 1 = 4-12 units
Scenario 2 - 13-50 units
Scenario 3 - 51+ units
Scenario 4 - 4-50 units (1+2)
Scenario 5 - 4+ units (1+2+3)
clP
5 SCENARIOS
KEY OUTCOMES & STATISTICS - TRASH SERVICE
Features
# Buildings
I
48,955
# Units
66,713
# Tons / Unit
1.19
Illegal Trash
Productivity
(Extra) Budget
I
$ 16,558,127
Cost / Unit
$ 248
A
OD
Scenario i
Scenario 2
Scenario 3
Scenario 4 (1.2)
Scenario 5 (1+2.3)
4-12 units
13-50 units
51. units
4-50 units
4+ units
3,243
635
210
3,878
4,o88
19,765.30%
14,734.22%
30,671 `46%
34,499.52%
65,170 *gar
0.90
0.76
0.76
0.84
o.8o
-27%
-20 %
+10 %
-47%
-37%
+30%
+30%
-20%
+40%
+12%
$ +3,174,176
$ +2,o69,501
$ +5,866,943
$ +4,785,688
$ +io,601,130
$ 228
$ 229
$ 230
$ 211
$ 2o6
• Illegal Trash - Estimates/ Assumptions from Police & Operations
• Productivity- Estimates/ Assumptions from Operations �" "°
Assumptions: General (1)
LA
14
A markup of 10% for unforeseen expenditures
is added
Equipment expected to be used for 12 years
Inflation set at 3%
sol'ld,--,�
waste
Department
Assumptions: Illegal Trash
• Illegal dumping is proportionally distributed between
4-12 unit and 13-50 unit buildings based on the
number of units
• Reduction due to illegal dumping already picked up
will have the same breakdown by Regular/Green as it
is now
• The reduction in citations revenue will mirror the
reduction in illegal trash
ILLES 111tL
DUMP14.0
Assumptions: 4-12 and 13-50 unit buildings
• Pickup method the same as -is
• For the 4-12 and 13-50 unit buildings it is expected that
existing assets can be mostly used.
• Some new investments required. Percentage of regular
depreciation: 70%
• Mini dump volume will not be substantially impacted
Assumptions: 51+ unit buildings
• Pickup method for 51+ unit buildings will either be Roll -Off
containers OR manual
• 104 buildings with 51-100 units 4 manual
• 106 buildings with 101+ units 4 roll -off containers
• Manual
• Crew of 3 persons
• 3.5 buildings per crew per day. 17.5 per week
• 6 crews needed. 8 crews with vacation and sickness
• Roll -off
• 1 driver
• 6.5 containers per 10 hrs. working day. 26 per week
• 4 drivers needed. 6 drivers with vacation and sickness
• 2 extra dispatchers needed in the back office
• Currently a 50/50 breakdown of buildings is expected between
manual and roll -off containers
• Substantial investments required. Percentage of regular
depreciation: 125%
• New software is required: cost/year estimated at $50k
Assumptions - Volume
Effect on volume trash
Number of units
Size units
Frequency turnover
Social status
Reduction illegal durnping
Lower volume green %-vaste pickup
Green Waste as of current Green Waste ton.
(De -)/Increase illegal dumping
+ Increase -/+ No change
++ Significant Increase - Decrease
+++ Major increase -- Significant decrease
-J
Unit buildings
1
S2
S3
S4
S5
4-12 13-50
51+
4-50
4+
+
+
++
+-
+++
100%
70%
35°
87%
63%
- 7%
-20%
10%
-47
-37%
Assumptions - Productivity
Effect on Froducdvity
Economies of scale
Better mix of pickup methods
Logistical challenges larger buildings
Risk introducting roll -off trucks
Location
Uncertainty
Unit buildings
S1 52
S3 54
55
4-12 13-50
51+ 4-50
4+
30 30
-2 40%
12
+ Increase -/+ No change
++ Significant Increase - Decrease
\,
+++ Major increase -- Significant decrease
KPI: Cost per Unit - Trash
TRASH 2O21 (Full Year) Tannage: 79,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.19
Cost
Cos on
Cos unit
Direct
$ 14,897,625
$ 187.52
$ 223.31
- Fees
$ 4,939,054
$ 62.17
$ 74,03
10096 variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio.
- Non -Fees
$ 9,959,572
$ 125.35
$ 149.27
Variable with tannage but with rounding
Indirect
$ 1,650,501
$ 20.90
$ 24.89
Total indirect cost will not change in the scenarios. Cost perton & unitwill go down in the scenarios.
total
$ 16,558,127
$ 208.42
(FullYeQr) Tons Feestfee/ton
=extrapolate d for
12 months
-Regular 42,211 53% $ 2,g32,390
- Green waste 37,235 47% $ 2,106,664
79,445 $ 4,939,054
TRASH excl. Illega 2021 (Full Year) Tonnage: 69,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.04
Cost
Cos on
Cos Unit
Direct
$ 14,275,939
$ 205.57
$ 213.99
Fees
$ 4,317,357
$ 52.17
$ 64.72
100% variable with tannage. Whether the cost per unit will change depends on the green waste to regular trash ratio.
- Non -Fees
$ 9,958,572
$ 143.40
$ 149.27
Variable with tannage but with rounding
Indirect
$ 1,650,501
$ 23.91
$ 24.89
Total indirect cost will not change in the scenarios. Cost perton & unit will go down in the scenarios.
iota)
$ 15,936,440
$ 229AN
(FullYeer] Tans Fees Fee tan
= extrapolated for
12 months
- Regular 36,g9g 53% $ 7,475,872 $57.10
- Green waste 32,W 47% $ 1,941,494 $ 55.59
59,445 $ 4,317,367 $ 62.17
21
KPI: Trash Statistics
Tors
2021
2020
2019 2018
Average
Regular
42,211.2G 5.3
45,590.15
45,736..91 61,804.49
48,835.82
Green Waste
37,234.8D 47
33,397.76
26,618.23 22,915.36
30,041.65
Total
79,446.00
781987.91
pr 72,355.14 84,719.85
78,877.47
# Units Mini Dump ).,4l not
66,713
Including Illegal Trash
Change
# Direct Trash FTE
72
Tans / Unit
Tans / FTE
Personnel Expenses Trash (excluding Mini Dump)
7,276,088
Regular Trash 0.63
586.27
Personnel Cast / FTE
101,057
Green Waste 0.56
517.15
Total 1.19
1,103.42
Fleet expenses
2,319,979
Fleet expenses / Ton
$
29.20
Excluding Illegal Trash
- Fleet MR
1.5.85
Tons / Unit
- Fleet Depreciation
13.35
Regular Trasl} 0.5.5
Green Waste G.49
Total 1. r14
Estimated yearly illegal trash picked up (tons)
10,000
13%
of trash currently picked up is illegal
14,
A Extrapolation of 10 months
22
481,944 buildings
66,713 units (households)
As -is, 2021:
1-3 unit buildings
Regular Trash
Green Waste
Tons Trash Collected
— Volume*
Tons
421211
37,235
79,446
* = extrapolated yearly numbers based on 10 months actuals
As -is, 2021:
1-3 unit buildings— Productivity
# FTEa
#Tons
Tons Trash / FTE
$ Personnel Expenses Trashy
$/FTE
72
79,446
1,103.42
$7,276,088
$101,057
* = extrapolated yearly numbers based on 10 months actuals A
a = excludes Mini Dump personnel
As -is,,
2021:
1-3 unit buildings
Personnel ExpensesR
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Share in Indirect Cost
Cost Base Trash 2021
— Financials
* = extrapolated yearly numbers based on 10 months actuals
R = includes Mini Dump personnel
$7,638,592
$1,259,080
$1,060,900
$4,939,054
$1,660,501
$ 161558,127
As -Is, 2021:
1-3 unit buildings - KPI
Cost / Ton
Cost / Unit per Year
Tons of Trash per Unit per Year:
As -Is
$
$
208
248
1.19
(Full Year) Tons Fees Fee ton
- Regular 42,211 530 2,832,390 $ 67.10
- Green waste 37,235 4 0 2,106,664 $ 56.58
79,446 4,939,054 62.17
Tons of Trash (Exc. Illegal) per Unit per Year:
As -Is
Cost / Ton $ 229
Cost / Unit per Year $ 239
.*
Using 10,000 tons as an estimate for illegal trash
(Full Year)
- Regular
- Green waste
1.04
Tons
36,898 53%
32,548 47
6 %446
Fees
2,475,872
$ 1,841,494
403170367
Fee ton
67.10
56.58
62.17
UIry 19If
Adding 4-12 unit buildings
+ 31243 buildings (+7%)
+19,765 units (+30%)
Illegal Trash will go down by ± 27%
Significant productivity improvement due to
economies of scale
Good case to extend service to 4-12 unit residential
buildings
Outsourcing is not recommended for this scenario
Scenario 1:
4-12 unit buildings - Volume
Regular Trash
Green Waste
Projected Gross Extra Tons
Reduction Illegal trash*, 27%
Reduction Green Waste
Projected Net Extra Tons
Tons
10,932
9,643
20,575
(21692)
17,883
*Illegal tonnage is already being picked up in As Is Situation. Therefore, it is excluded from tonnage of this scenario
Scenario 1:
4-12 unit buildings - Productivity
Tons/FTE
Extra FTE based on volume
Productivity Change
Reduction in FTE
Projected FTE
Projected FTE, rounded
1,103.42
16.21
30%
(4.86)
11.34
12
Scenario 1:
4-12 unit buildings
Personnel Expenses
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Unforeseen
Indexation
Loss/Increase in Income (citations)
Extra Yearly Budget Needed
- Financials
$ 1, 212, 681
$ 198, 392
$ 167,165
$ 1,112,712
$ 269,095
$ 88, 801
$ 125,330
$ 3,174,176
OUT OF SCOPE
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue - New Income based on new average cost per unit $ 228
$ 4,506,420
Net Result - Contribution to cover loss in As -Is Trash pickup service $ 1,332,244
Scenario 1:
4-12 unit buildings - KPI
As -Is Scenario 1 Change
Extra Cost Volume
Cast f Ton $ 208 $ 3,174,176 17,883 $ 177 -15%
Cost / Unit per Year 248 $ 3,174,176 19,765 $ 161 -3511
As -Is + Scenario 1 Change
T . fcost vniume
Cast / Ton $ 19,732,303 97,329 $ 203 -3%
Cast { Unit per Year $ 19,7:32,303 86,478 $ 228 -8°%
13
UIry 19If
Adding 13-50 unit buildings
+ 635 buildings (+1.3%)
+14,734 units (+22%)
I
Illegal Trash will go down by ± 20%
Significant productivity improvement due to
economies of scale
Good case to extend service to 13-50 unit
residential buildings
Outsourcing is not recommended for this
scenario
Scenario 2:
13-50 unit buildings - Volume
Regular Trash
Green Waste
Projected Gross Extra Tons
Reduction
Illegal
trash*,
20%
Reduction
Green
Waste,
30%
Projected Net Extra Tons
Tons
8,149
7,188
15,338
(21006)
(21157)
11,175
*Illegal tonnage is already being picked up in As Is Situation. Therefore, it is excluded from tonnage of this scenario
Scenario 2:
13-50 unit buildings - Productivity
Tons/FTE
Extra FTE based on volume
Productivity Change
Reduction in FTE
Projected FTE
Projected FTE, rounded
1,103.42
10.13
30%
(3.04)
7.09
8
Scenario 2:
13-50 unit buildings - Financials
Personnel Expenses
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Unforeseen
Indexation
Loss/Increase in Income (citations)
Extra Yearly Budget Needed
$ 808,454
$ 123,969
$ 104,456
$ 707,228
$ 174,411
$ 57,556
$ 93,428
$ 2,069,501
OUT OF SCOPE
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue - New Income based on new average cost per unit $ 228 $ 3,374,086
Net Result - Contribution to cover loss in As -Is Trash pickup service $ 1,304,585
Scenario 2:
113-50 unit buildin
As -Is Scenario 2 Change
Extra, Cost a'ol v e
Cost Ton $ 258 $ 2,069,501 11,175 $ 185 -11%
Cost f Unit per Year 248 2,069,501 14,734 140 -43Va
As -Is + Scenario 2 Change
Total Cost Volume
Cost Ton $ 18,627,628 90,621 $ 206
Cost / U nit per Year 18, 627,628 81,447 229 -S 0
UIry 19If
Adding 51+ unit buildings
+ 210 buildings (+0.4%)
+30,671 units (+46%)
Scenario 3:
L51+ unit buildings - Summary
LA
41
Scenario 3:
51+ unit buildings - Volume
Tons
Regular Trash 16,964
Green Waste 14,964
Projected Gross Extra Tons 31,927
Increase Illegal trash*, 10% 11000
Reduction Green Waste, 65% (91726)
Projected Net Extra Tons 23,201
*Illegal tonnage is already being picked up in As Is Situation. Therefore, it is excluded from tonnage of this scenario
Scenario 3:
51+ unit buildings - Productivity
Tons/FTE
Extra FTE based on volume
Productivity Change
• Increase in FTE
Projected FTE
Projected FTE, rounded
* Includes 2 Extra dispatchers in the back office
1,103.42
21.03
(20%)
4.21
25.23
28*
Scenario 3:
51+ unit buildings
Personnel Expenses
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Unforeseen
Indexation
Loss/Increase in Income (citations)
Extra Yearly Budget Needed
- Financials
$ 2,829,590
$ 459, 619
$ 387,275
$ 1,497,396
$ 567,388
$ 172,238
($ 46,564)
$ 5,866,943
OUT OF SCOPE
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue - New Income based on new average cost per unit $ 228 $ 7,054,330
Net Result - Contribution to cover loss in As -Is Trash pickup service $ 1,187,387
Scenario 3:
51+ unit buildings - KPI
As -Is
Cost /Ton 2u8 5,866,943 23,201 253 21 J
Cost /Unit per Year 248 5,866,943 30,671 191 -2.3
As -Is + Scenario 3 1 1 Change
Total host Volume
Cost / Ton 22,425,069 102,647 218 5V
Cost / Unit per Year 22,425,069 97,384 230 - 7 Vo
J5 \_-
Rnarin z
Adding 4-50 unit buildings
+ 31878 buildings (+8%)
+34,499 units (+52%)
Illegal Trash will go down by ± 47%
Most productivity improvement due to
economies of scale
Very good case to extend service to 4-50 unit
residential buildings
Outsourcing is not recommended for this
scenario
Scenario 4:
4-50 unit buildings - Volume
Regular Trash
Green Waste
Projected Gross Extra Tons
Reduction in Illegal trash*, 47%
Reduction Green Waste, 17%
Projected Net Extra Tons
Tons
19,081
16,831
35,912
(41697)
(21157)
29,058
*Illegal tonnage is already being picked up in As Is Situation. Therefore, it is excluded from tonnage of this scenario
Scenario 4:
4-50 unit buildings - Productivity
Tons/FTE
Extra FTE based on volume
Productivity Change
Reduction in FTE
Projected FTE
Projected FTE, rounded
1,103.42
26.33
40%
(10.53)
15.80
16
Scenario 4:
4-50 unit buildings - Financials
Personnel Expenses
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Unforeseen
Indexation
Loss/Increase in Income (citations)
Extra Yearly Budget Needed
$ 1,616,909
$ 322,360
$ 271,621
$ 1, 819, 940
$ 403,083
$ 133,017
$ 218,758
$ 4,785,688
OUT OF SCOPE
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue - New Income based on new average cost per unit $ 228
$ 7,279,289
Net Result - Contribution to cover loss in As -Is Trash pickup service $ 2,493,601
Scenario 4:
4-50 unit buildings - KPI
Cast f Torn
Cast f Unit per Year
Cost / Ton
Cast j' Unit per Year
As -is
208
248
Scenario 4
Extra Cost Volume
$ 4,7850C 88 290058 165
4,7 5, 685 34,4_99 139
As -Is + Scenario 4
Total Cast Volume
21,343,915 ' P,8,,504 '.97
21,343,2,15 ' 01,21 211
Change
- 1
-44 °a
Change
t�
UIry 19If
Adding 4+unit buildings
+ 41088 buildings (+8%)
+65,170 units (+98%)
�i
•
Illegal Trash will go down by ± 37%
Productivity improvement due to
economies of scale for smaller units
Pros and cons in extending service
to 4+ unit residential buildings
Scenario 5:
4+unit buildings - Volume
Regular Trash
Green Waste
Projected Gross Extra Tons
Reduction in Illegal trash*, 12%
Reduction Green Waste, 37%
Projected Net Extra Tons
Tons
36,045
31,795
67,840
(31698)
(11,883)
52,259
*Illegal tonnage is already being picked up in As Is Situation. Therefore, it is excluded from tonnage of this scenario
Scenario 5:
4+unit buildings - Productivity
Tons/FTE
Extra FTE based on volume
Productivity Change
Reduction in FTE
Projected FTE
Projected FTE, rounded
* Includes 2 Extra dispatchers in the back office
1,103.42
61.48
12%
(5.57)
41.79
44*
Scenario 5:
4+unit buildings
Personnel Expenses
Fleet, M&R
Fleet, Depreciation
Disposal Fees
Unforeseen
Indexation
Loss/Increase in Income (citations)
Extra Yearly Budget Needed
- Financials
$ 4,446,498
$ 781,980
$ 658,895
$ 3,317,336
$ 920,471
$ 303,755
$ 172,194
$ 10,601,130
OUT OF SCOPE
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue - New Income based on new average cost per unit $ 228
$ 13,425,020
Net Result - Contribution to cover loss in As -Is Trash pickup service $ 2,823,890
Scenario 5:
4+unit buildings - KPI
Cost { Ton
Cost f Unit per Year
Cost Ton
Cost Unit per Year
As -is
203
249
Scenario 5
Ext -a Cost VoIu111
5 10,601,1'L 52,1259 203
. 10, 601,1' 65,170 163
As -is +Scenario 5
Total Cost Volume
271150,257 131,705 206
$ 27,15 , 257 131,983 $ 206
Change
_J
Change
-17CV-
ma
Next Steps
• Update scenarios with illegal trash tonnage
• Select the most appropriate scenario
• Set rate for trash pickup service
City of Miami — Department of Solid Waste
Bulky Trash Pickup — Cost Model Results
5 Scenarios °'
• Disclaimer
• Illegal Trash
• Outsourcing
• Executive Summary
• Underlying Assumptions
• KPIs
• Next Steps
Disclaimer
• The results presented in this document should not be treated or
interpreted as final; as an estimate is used for the amount of illegal
trash being collected due to limited data available at the time of the
review. The tracking of illegal trash tonnage however has begun
• The results of this document reflect the Department's current state
• The scope of work does not formally include a comprehensive
analysis for setting a trash pickup fee only and/or reviewing the
existing $380 fee for garbage and trash pickup service
Illegal Trash - Definition
• Definition of illegal residential trash for this study:
• Trash dumped by the residents of the City of Miami who do not pay for it or
do not comply with the City Code
• Trash that originates from the City of Miami residential building, but dumped
by a contractor
• The fact that illegal trash is found and collected in residential areas
does not mean that it originates in the City of Miami
• Illegal trash is not considered significant in the 51+ unit buildings
Illegal Trash - Findings
• The current 10,000 tons is an estimate
• Recently started collecting illegal trash data
• Not all the illegal trash volume will go down
• According to the City of Miami Police about 58% is related to residential
buildings. The other 42% is related to trash coming outside of the City of
Miami
• There is a maximum reduction of 47% expected since some residents will still
not comply with the code
• Illegal trash is already being collected in the As -Is situation and is currently
included in the 1-3 unit buildings tonnage numbers
• Reduction in illegal trash will not reduce trash volume as it will become legal
trash when service is provided to buildings in the respective scenarios
Outsourcing — Price Estimates
• Third party vendors were contacted to obtain price estimates based
on projected volumes and units related to each scenario
• 10 commercial haulers were contacted
• Commercial haulers were briefed on what was needed to obtain a
price estimate
• One quote: $420 per unit including disposal and franchise fees
• Only one quote was received
• No formal RFP process was conducted
• Vendors did not have the capacity to undertake the expected operation
Outsourcing - Challenges
• Two trash picking operators working on the same routes is not
recommended due to:
• Logistical challenges related to scheduling
• Legal challenges related to who picks up illegal trash
• Lack of economies of scale resulting in a higher cost per unit
• If pickup service for additional units is outsourced, the Solid Waste
trash pickup operation will have to be downsized. Currently Solid
Waste is already picking up trash from the additional units as illegal
trash. Therefore, this volume will be lost to the 3rd party
• These two statements are specifically applicable to the 4-12 and 13-
50-unit buildings
DELIVERABLES
OUR METHODOLOGY
The methodology used for the City of Miami Solid Waste Cost Study supports
r X
Cost Analysis
Detailed insights in the cost of
trash picking service.
the following deliverables:
Scenarios
Results of 5 scenarios showing
the impact on illegal trash, cost
per unit served, budget, etc,
0
Investments/Outsourcing
Insights additional investments in
both equipment and people. For
reference high level quote of 3rd
party.
L
Trash Fee
The details of the cost study can
be used to set a trash pickup
service only fee.
ONE
COST, FTE, TONS,
KPI
• to months 2021 cost
• Extrapolated Full Year
• Direct and Indirect
• Incl. Fleet &
Depreciation
• Tons Green & Regular
• $/Ton, $/Unit, $/FTE,
Tons/FTE, Tons/Unit,
etc.
TWO
VOLUME &
LOCATION NEW
BUSINESS
• # Extra Buildings
• # Extra Units
• # Extra Tons
• Overlap with existing
routes
• Distance to disposal
locations
• Traffic
10:1Oki :I :�
ASSUMPTIONS
COST, VOLUME,
PRODUCTIVITY
• Utilization equipment
• Illegal trash volume
• Green waste ratio
• Productivity changes
• Backoffice & software
• Extra people
FOUR
DEVELOP MODEL
AND RUN
SCENARIOS
• As -Is
• % Change
• Gross & Net Tons
• Productivity effect
• FTE required
• Fleet expenses
• Disposal fees
• Inflation
• Unforeseen
• Loss of Income
• New income
COST STUDY SOLID WASTE TRASH PICKUP
CITY OF MIAMI
OUR APPROACH
FIVE
VALIDATE
RESULTS
• High level
assessment
• Detailed assessment
• Comparing scenarios
• Sanity Checks
• 3rd party quote
• Discussion with MT
Taking into account
KEY CONSIDERATIONS
RISK
Mostly reflects uncertainties and lack of detailed data & insights
ILLEGAL TRASH
What is the effect of extending the trash pickup service on illegal trash
FINANCIAL
The bottom line impact on the financials of Solid Waste / City of Miami
PRODUCTIVITY
Can SW better utilize existing equipment and people
10
1l1.1IN W :1111 :j:i•1•nL440WIVA
SCENARIOS
RISK & PRODUCTIVITY
0
S2 s1 For 51+ unit buildings there is a higher risk as the pick-up
method, roll -off or manual, Will be different from the
0Y Y current main method.
a a
Adding 4-12 and 13-50 unit buildings Will increase the
productivity due similar routes, better use of existing
equipment and people.
NEGATIVE PRODUCTIVITY
OO Size of buffet reflects # of units
11
(ISI-cenario 1 = 4-12 units
Scenario 2 - 13-50 units
Scenario 3 - 51+ units
Scenario 4 - 4-50 units (1+2)
Scenario 5 - 4+ units (1+2+3)
II►[yI111xcL1M0 1
S2
S1
S5
S4
DECREASE ILLEGAL TRASH
O O Size of bullet reflects # of units
SCENARIOS
ILLEGAL TRASH & FINANCIAL
Projection of financial results is based on the
assumption that the extra units will be charged the new
W
a average cost per unit per year associated with each
Z
U- scenario.
W
0=
m There is currently no illegal trash issue with 51+ unit
buildings. Change of trash pick up service there could
result in more illegal trash
12
cenario 1 = 4-12 units
Scenario 2 - 13-50 units
Scenario 3 - 51+ units
Scenario 4 - 4-50 units (1+2)
Scenario 5 - 4+ units (1+2+3)
cl
5 SCENARIOS
KEY OUTCOMES & STATISTICS - TRASH SERVICE
Features
# Buildings
I
48,955
# Units
66,713
# Tons / Unit
1.19
Illegal Trash
Productivity
(Extra) Budget
I
$ 16,558,127
Cost / Unit
$ 248
A
OD
Scenario i
Scenario 2
Scenario 3
Scenario 4 (1.2)
Scenario 5 (1+2.3)
4-12 units
13-50 units
51. units
4-50 units
4+ units
3,243
635
210
3,878
4,o88
19,765.30%
14,734.22%
30,671 `46%
34,499.52%
65,170 *gar
0.90
0.76
0.76
0.84
o.8o
-27%
-20 %
+10 %
-47%
-37%
+30%
+30%
-20%
+40%
+12%
$ +3,174,176
$ +2,o69,501
$ +5,866,943
$ +4,785,688
$ +io,601,130
$ 228
$ 229
$ 230
$ 211
$ 2o6
• Illegal Trash - Estimates/ Assumptions from Police & Operations
• Productivity - Estimates/ Assumptions from Operations
Assumptions
General 1
• Trash service pickup
once a week
• # of new personnel
rounded up to 1 full
time equivalent
• Extrapolation of
depreciation expenses
Assumptions
General 2
• 1o% unforeseen
expenditures are
included
• Lifetime Equipment is
set at 12 years
• The inflation rate used
is 3%
Assumptions:
Illegal Trash
• Illegal trash
proportionally
distributed between 4-
12 and 13-50 unit
buildings
• Illegal trash has same
Regular/Green trash
breakdown as legal
trash
• Reduction in citations
income will mirror the
reduction in illegal
trash
Assumptions:
4-12 & 13-50
Units
• Same pickup method
As -Is
• Similar and existing
equipment can be
used
• Relatively limited
investments, 70% of
As -Is equivalent
• Mini Dump volume will
not be substantially
impacted
COST STUDY SOLID WASTE TRASH PICKUP
CITY OF MIAMI
Engagement Scenario Assumptions
Assum tions:
51+ LFnits
• Pickup method will be
either manual or roll -
off container
• 5o% of buildings will
be manual. 8 crews of
3 people
• 5o% of buildings will
use roll -off containers.
6 drivers and 30
containers
• Relatively high
investments,125% of
As -Is equivalent
• Extra dispatchers and
software needed
KPI: Cost per Unit - Trash
TRASH 2O21 (Full Year) Tannage: 79,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.19
Cost
Cos on
Cos unit
Direct
$ 14,897,625
$ 187.52
$ 223.31
- Fees
$ 4,939,054
$ 62.17
$ 74,03
10096 variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio.
- Non -Fees
$ 9,959,572
$ 125.35
$ 149.27
Variable with tannage but with rounding
Indirect
$ 1,650,501
$ 20.90
$ 24.89
Total indirect cost will not change in the scenarios. Cost perton & unitwill go down in the scenarios.
total
$ 16,558,127
$ 208.42
(FullYeQr) Tons Feestfee/ton
=extrapolate d for
12 months
-Regular 42,211 53% $ 2,g32,390
- Green waste 37,235 47% $ 2,106,664
79,445 $ 4,939,054
TRASH excl. Illega 2021 (Full Year) Tonnage: 69,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.04
Cost
Cos on
Cos Unit
Direct
$ 14,275,939
$ 205.57
$ 213.99
Fees
$ 4,317,357
$ 52.17
$ 64.72
100% variable with tannage. Whether the cost per unit will change depends on the green waste to regular trash ratio.
- Non -Fees
$ 9,958,572
$ 143.40
$ 149.27
Variable with tannage but with rounding
Indirect
$ 1,650,501
$ 23.91
$ 24.89
Total indirect cost will not change in the scenarios. Cost perton & unit will go down in the scenarios.
iota)
$ 15,936,440
$ 229AN
(FullYeer] Tans Fees Fee tan
= extrapolated for
12 months
- Regular 36,g9g 53% $ 7,475,872 $57.10
- Green waste 32,W 47% $ 1,941,494 $ 55.59
59,445 $ 4,317,367 $ 62.17
I
J
-'-5
KPI: Trash Statistics
Tors
2021
2020
2019 2018
Average
Regular
42,211.2G 5.3
45,590.15
45,736..91 61,804.49
48,835.82
Green Waste
37,234.8D 47
33,397.76
26,618.23 22,915.36
30,041.65
Total
79,446.00
781987.91
pr 72,355.14 84,719.85
78,877.47
# Units Mini Durnp ).,4l not
66,713
Including Illegal Trash
Change
# Direct Trash FTE
72
Tans / Unit
Tans / FTE
Personnel Expenses Trash (excluding Mini Dump)
7,276,088
Regular Trash 0.63
586.27
Personnel Cast / FTE
101,057
Green Waste 0.56
517.15
Total 1.19
1,103.42
Fleet expenses
2,319,979
Fleet expenses / Ton
$
29.20
Excluding Illegal Trash
- Fleet MR
1.5.85
Tons / Unit
- Fleet Depreciation
13.35
Regular Trasl} 0.5.5
Green Waste G.49
Total 1. r?4
Estimated yearly illegal trash picked up (tons)
10,000
13%
of trash currently picked up is illegal
�G M
Extrapolation of 10 months
Next Steps
• Update scenarios with illegal trash tonnage
• Select the most appropriate scenario
• Set rate for trash pickup service