HomeMy WebLinkAboutCost Benefit AnalysisCost Benefit Analvsis of Conversion to Single Stream
CURRENT Recycling
Operations
INCREMENTAL
REVENUE/COST SAVINGS w/
Conversion
TOTAL REVENUE/COSTS
SAVINGS w/ Conversion
Estimated Incremental Increase (6) :
Recycling Tonnage (1):
3,005.78
9,987.97
12,993.75
ANNUAL REVENUE (2):
$33,394.22
$110,966.35
$144,360.56
Recycling Tipping Savings:
County Rate (3):
$65.05
TIPPING FEE SAVINGS :
$195,525.99
$649,717.45
$845,243.44
RECYCLING PERSONNEL
COSTS (4):
($359,270.10)
$158,685.00
($200,585.10)
ESTIMATED ANNUAL DEBT
SERVICE PAYMENT (5):
($770,089.12)
($770,089.12)
NET PRESENT VALUE OF
OPERATIONS:
($130,349.90)
$149,279.68
$18,929.78
(1) 3,005.78 is actual tonnage collected between April 2011 thru March 2012, which equates to 86 pounds per
household annually.
(2) $11.11 is rate currently paid by WSI to City for recyclable materials at $11.69/ton less 5% for residue.
(3) Weighted average with 80% of garbage going to resource recovery at a cost of $62.59/ton and 20% going to
transfer station at a cost of $74.91/ton.
(4) Currently there are five (5) recycling routes with ten (10) employees for an annual personnel cost of $359,270.10.
With conversation to automated single stream recycling, the number of employees can be reduced from ten (10) to
five (5) resulting in an annual personnel savings of $158,685.00; total personnel cost for the remaining employees is
annually estimated to be $200,585.10.
(5) We service 69,300 units. As part of the conversion, we will initially purchase 70,500 containers at a cost of $50.80
each for a total cost of $3,581,400.00 using our current purchasing contract. Repayment of the loan would occur on a
quarterly basis for a five year period and the interest rate is determined by a table based on the weekly published five
(5) year Constant Maturing Treasury note. On April 20, 2012, the weekly published note was 0.82, resulting in a 2.8%
interest rate being used for this analysis, yielding a total repayment amount of $3,850,445.67.
(6) The City of Miami (City) currently collects 86 pounds of recyclables per household on an annual basis. Prior to
automated single stream recycling conversion, Miami -Dade County (County) annually collected 219 pounds per
household and the City of Hialeah (Hialeah) annually collected 147 pounds per household. With conversion to
automated single stream recycling, the County now collects 375 pounds per household and Hialeah collects 413
pounds per household. For this analysis, and with the conversion, we estimated 375 pounds per household for the
City; the incremental increase is 289 pounds per household.