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HomeMy WebLinkAboutBack-Up DocumentsCity of Miami — Department of Solid Waste Bulky Trash Pickup — Cost Model Results 5 Scenarios Table of Contents • 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 the following deliverables: 7(1 Cost Analysis Detailed insights in the cost of trash picking service. Scenarios Results of 5 scenarios showing the impact on illegal trash, cost per unit served, budget, etc. 8 Investments/Outsourcing Insights additional investments in both equipment and people. For reference high level quote of 3rd party. Trash Fee The details of the cost study can be used to set a trash pickup service only fee. • • • • • ONE COST, FTE, TONS, KPI 10 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 THREE 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 FIVE VALI DATE RESULTS • High level assessment • Detailed assessment • Comparing scenarios • Sanity Checks • 3rd party quote • Discussion with MT COST STUDY SOLID WASTE TRASH PICKUP CITY OF MIAMI OUR APPROACH 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 ILLEGAL TRASH PRODUCTIVITY POSITIVE PRODUCTIVITY 0 0 • NEGATIVE PRODUCTIVITY Size of bullet reflects # of units HIGH RISK 11 SCENARIOS RISK & PRODUCTIVITY For 51+ unit buildings there is a higher risk as the pick-up method, roll -off or manual, will be different from the current main method. Adding 4-12 and 13-50 unit buildings will increase the productivity due similar routes, better use of existing equipment and people. /Scenario 1 = 4-12 units Scenario 2 - 13-50 units Scenario 3 - 51+ units Scenario 4 - 4-50 units (1+2) enario 5 - 4+ units (1+2+3_} INCREASE ILLEGAL TRASH BETTER FINANCE DECREASE ILLEGAL TRASH Q 0 Size of bullet reflects # of units 12 SCENARIOS ILLEGAL TRASH & FINANCIAL Projection of financial results is based on the assumption that the extra units will be charged the new average cost per unit per year associated with each scenario. There is currently no illegal trash issue with 51+ unit buildings. Change of trash pick up service there could result in more illegal trash %enario 1 = 4-12 units Scenario 2 - 13-50 units Scenario 3 - 51+ units Scenario 4 - 4-50 units (1+2) enario 5 - 4+ units (1+2+3)_ Features # Buildings # Units # Tons / Unit % Illegal Trash % Productivity (Extra) Budget Cost / Unit 5 SCENARIOS KEY OUTCOMES & STATISTICS - TRASH SERVICE As -Is 48,955 66,713 1.19 $ i6,558,127 $ 248 Scenario 1 4-12 units 3,243 19,765 +30r o.go -27% +30 % $ +3,174,176 $ 228 Scenario 2 13-50 units 635 14,734 +22% 0.76 -20% +30 % $ +2,069,501 $ 229 % Illegal Trash - Estimates/ Assumptions from Police & Operations % Productivity - Estimates/ Assumptions from Operations l9 Scenario 3 51+ units 210 30,671 +46% 0.76 +10% -20% $ +5,866,943 $ 230 Scenario 4 (1+2) 4-50 units 3,878 34,499.52% 0.84 -47% +40 % $ +4,785,688 $ 211 Scenario 5 (1+2+3) 4+ units 4,088 65,170 +gar 0.80 -37% +12% $ +10,601,130 $ 206 Assumptions: General (1) Trash pickup once a week for all scenarios Rounding up to 1 full FTE when it comes to hiring People Extrapolation of depreciation expenses as the type of investments will depend on the pickup method 14 Assumptions: General (2) A markup of 10% for unforeseen expenditures is added Equipment expected to be used for 12 years Inflation set at 3% 15 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 i[LEGiti. SUMPING 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 • J. 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 Unit buildings 1 52 53 54 55 4-12 13-50 51+ 4-50 4+ Effect on volume trash Number of units + + ++ +- +++ Size units -/+ -/+ -/+ -/+ -/+ Frequency turnover -/+ -/+ -/+ -,'+ Social status -/+ -/+ -/+ -i+ Reduction illegal dumping + + - / + +- ++ Lover volume green waste pickup - / + + ++ - ++ Green Waste as of current Green Waste tons 100% 70% 35% 87% 63% {De -}/Increase illegal dumping -27% -20% 10% -47% -37% + Increase -/+ No change ++ Significant Increase - Decrease +++ Major increase -- Significant decrease Assumptions - Productivity Unit buildings 51 52 53 54 55 4-12 13-50 51+ 4-50 4+ Effect on Productivity Economies of scale + + Better mix of pickup methods + + + - / "I - Logistical challenges larger buildings - / + - -- - / + - Risk introducting roll -off trucks - / + - / + - / + Location ++ ++ - ++ - / + Uncertainty -/+ -/+ - -/+ - 30 30% -2 40% 12% + Increase -/+ No change ++ Significant Increase - Decrease +++ Major increase -- Significant decrease KPI: Cost per Unit - Trash TRASH. Direct - Fees - Nora -Fees Indirect Total 2021 (Full Year) Tonnage: 79,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.19 Cost Cost/Ton $ 14,8,37,625 $ 187.52 $ 4,939,054 $ 62.17 $ 3,958,572 $ 125.35 $ 1,660,501 $ 20.90 $ 16,558,127 $ 203.42 = extrapolated for 12 months TRASH excl. Illegal' Direct - Fees - Non -Fees Indirect Total Cost/U n it $ 223.31 74.03 $ 143.27 $ 24.89 100% variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio. Variable with tonnage but with rounding Total indirect cost will not change in the scenarios. Cost per ton & unit will go down in the scenarios. (Full Yeor) Tons - Regular 42,211 53% $ - Green waste 37,235 47% $ Fees Fee/ton 2,832,390 _________ 2,105, 664 79,446 $ 4,939,054 2021 (Full Year) Tonnage: 69,446 Buildings: 48,955 Units: 66,713 Ton/Unit: Cost Cost/Ton $ 14,275,939 $ 205.57 $ 4,317,357 $ 52.17 $ 9,958,572 $ 143.40 $ 1,650,501 $ 23.91 $ 15,936,440 $ 224.48 = extrapolated for 12 months Cost/U n it $ 213.99 $ 54.72 $ 149.27 $ 24.89 1.04 100% variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio. Variable with tonnage but with rounding Total indirect cost will not change in the scenarios. Cost per ton & unit will go down in the scenarios. FullYeor] Tons Fees Fee tan - Regular 36,898 53% $ 2,475,872 $ 57.10 - Green waste 32,548 47% $ 1,841,494 $ 56..58 59,445 $ 4,317,357 $ 62.17 21 KPI: Trash Statistics Tons Regular Green Waste Total # Units # Direct Trash FTE Mini Dump p 7,•.ill not change Personnel Expenses Trash (excluding Mini Dump) Personnel Cost / FTE Fleet expenses Fleet expenses / Ton - Fleet MR - Fleet Depreciation Estimated yearly illegal trash picked up (tons) Extrapolation of 10 months 2021 42,211.20 37,234.80 79,446.00 66,713 72 7,276,088 101,057 2,319,979 29.20 1.5.85 13.35 1D,DDD 4 7%%0 F 2020 4.5,.590,15 33,397,76 78,987.91 Regular Trash Green Waste Total 2019 4.5,736..91 26,618.23 72,355.14 2018 61,804 49 22,915 36 84,719.85 Including Illegal Trash Tons / Unit 0.63 0.56 1.19 Excluding Illegal Trash Tons / Unit Regular Trash 0.55 Green Waste G.49 Total 1.04 1396 of trash currently picked up is illegal Average 48,835.82 30,041.65 78,877.47 Tons / FTE 586.27 517.15 1,103.42 As -Is 48,944 buildings 66,713 units (households) Lots-ls, 2021: -3 unit buildings —Volume` Tons Regular Trash 42,211 Green Waste 37,235 Tons Trash Collected 79,446 al * = extrapolated yearly numbers based on 10 months actuals Lots-ls, 2021: -3 unit buildings —Productivity # FTEa 72 # Tons 79,446 Tons Trash / FTE 1,103.42 $ Personnel Expenses Trashy $/FTE $ 7,276,088 $ 101,057 gal * = extrapolated yearly numbers based on 10 months actuals a = excludes Mini Dump personnel As -Is, 2021: 1-3 unit buildings —Financials KI Personnel Expenses Fleet, M&R Fleet, Depreciation Disposal Fees Share in Indirect Cost Cost Base Trash 2021 * = 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 $ 16,558,127 As -Is, 2021: 1-3 unit buildings - KPI Cost / Ton Cost / Unit per Year 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 53% $ 2,832,390 $ 67.10 - Green waste 37,235 47% $ 2,106,664 $ 56.58 79,446 $ 4,939,054 $ 62.17 Tons of Trash (Exc. Illegal) per Unit per Year: As -Is 229 $ 239 .* Using 10,000 tons as an estimate for illegal trash 1.04 (Full Year) Tons - Regular 36,898 53% - Green waste 32,548 47 69,446 Fees $ 2,475,872 $ 1,841,494 $ 4,317,367 Fee/ton $ 67.10 $ 56.58 $ 62.17 Scenario 1 Adding 4-12 unit buildings + 3,243 buildings (+7%) +19,765 units (+30%) 28 Scenario 1: L4-12 unit buildings - Summary 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 29 Scenario 1: 4-12 unit buildings - Volume Tons Regular Trash 10,932 Green Waste 9,643 Projected Gross Extra Tons 20,575 Reduction Illegal trash*, 27% (2,692) Reduction Green Waste Projected Net Extra Tons 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 1,103.42 16.21 Productivity Change 30% Reduction in FTE (4.86) Projected FTE 11.34 Projected FTE, rounded 12 Scenario 1: 4-12 unit buildings - Financials Personnel Expenses $ 1,212,681 Fleet, M&R $ 198,392 Fleet, Depreciation $ 167,165 Disposal Fees $ 1,112,712 Unforeseen $ 269,095 Indexation $ 88,801 Loss/Increase in Income (citations) $ 125,330 Extra Yearly Budget Needed OUT OF SCOPE $ 3,174,176 Revenue - New Income based on new average cost per unit $ 228 Net Result - Contribution to cover loss in As -Is Trash pickup service $ 4,506,420 $ 1,332,244 Scenario 1: 4-12 unit buildings - KPI Cost/Ton Cost /Unit per Year Cost / Ton Cost /Unit per Year As -Is $ 208 248 Scenario 1 Extra Cost Volume $ 3,174,176 $ 3,174,176 17,883 $ 177 19,765 $ 161 As -Is + Scenario 1 T+a st Vi e $ 19,732,303 $ 19,732,303 97,329 $ 203 86,478 $ 228 Change - 15% - 35% Change -3% Scenario 2 Adding 13-50 unit buildings + 635 buildings (+1.3%) +14,734 units (+22%) 34 Scenario 2: 13-50 unit buildings - Summary Illegal Trash will go down by ± 20% Si:nificant • roductivit im • rovement due to economies of scale Good case to extend service to 13-50 unit residential buildings Outsourcing is not recommended for this scenario 35 Scenario 2: 13-50 unit buildings - Volume Tons Regular Trash 8,149 Green Waste 7,188 Projected Gross Extra Tons 15,338 Reduction Illegal trash*, 20% Reduction Green Waste, 30% (2,006) (2,157) Projected Net Extra Tons 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 1,103.42 10.13 Productivity Change 30% Reduction in FTE (3.04) Projected FTE 7.09 Projected FTE, rounded 8 Scenario 2: 13-50 unit buildings - Financials Personnel Expenses $ 808,454 Fleet, M&R $ 123,969 Fleet, Depreciation $ 104,456 Disposal Fees $ 707,228 Unforeseen $ 174,411 Indexation $ 57,556 Loss/Increase in Income (citations) $ 93,428 Extra Yearly Budget Needed $ 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: 13-50 unit buildings - KPI Cost / Ton Cost /Unit per Year Cost / Ton Cost /Unit per Year As -is 2D8 248 Extra, Cost Scenario 2 Dlume 2,069,501 2,069,501 11,175 $ 185 14,734 $ 140 As -Is + Scenario 2 Total Cost Volume 5 18,627,628 $ 18,627,628 90,621 $ 206 81,447 $ 229 Change inn - 11 - 4, Change Scenario 3 Adding 51+ unit buildings + 210 buildings (+0.4%) +30,671 units (+46%) 40 Scenario 3: L51+ unit buildings - Summary Illegal Trash could go up by ± 10% Significant productivity reduction due to pickup met o • High level of logistical challenges Illegal trash is not a substantial issue 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% Reduction Green Waste, 65% 1,000 (9,726) 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 1,103.42 21.03 Productivity Change (20%) • Increase in FTE 4.21 Projected FTE 25.23 Projected FTE, rounded 28* * Includes 2 Extra dispatchers in the back office Scenario 3: 51+ unit buildings - Financials Personnel Expenses $ 2,829,590 Fleet, M&R $ 459,619 Fleet, Depreciation $ 387,275 Disposal Fees $ 1,497,396 Unforeseen $ 567,388 Indexation $ 172,238 Loss/Increase in Income (citations) ($ 46,564) Extra Yearly Budget Needed $ 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 Cost / Ton Cost /Unit per Year Cost/Ton Cost ,/Unit per Year As -Is 238 248 $ 5,866,943 $ 5,866,943 23,201 $ 253 30,671 $ 191 7TotaAs-Is + Scenario 3 l Cost Volume 22,42.5,069 $ 22,425,069 102,647 218 97,384 $ 230 45 21% -23% Change 5% -7% Scenario 4 Adding 4-50 unit buildings + 3,878 buildings (+8%) +34,499 units (+52%) 46 Scenario 4: -50 unit buildings - Summary I ega Tras wi go • own •y ± 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 47 Scenario 4: 4-50 unit buildings - Volume Tons Regular Trash 19,081 Green Waste 16,831 Projected Gross Extra Tons 35,912 Reduction in Illegal trash*, 47% Reduction Green Waste, 17% (4,697) (2,157) Projected Net Extra Tons 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 1,103.42 26.33 Productivity Change 40% Reduction in FTE (10.53) Projected FTE 15.80 Projected FTE, rounded 16 Scenario 4: 4-50 unit buildings - Financials Personnel Expenses $ 1,616,909 Fleet, M&R $ 322,360 Fleet, Depreciation $ 271,621 Disposal Fees $ 1,819,940 Unforeseen $ 403,083 Indexation $ 133,017 Loss/Increase in Income (citations) $ 218,758 Extra Yearly Budget Needed $ 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 As -Is Cost/Ton Cost f Unit per Year Cast f Ton Cost / Unit per Year Scenario 4 Extra Cost Volume 5 4,785,688 4,785,688 29,058 165 34,49 139 As -Is + Scenario 4 Total Cast Volume 5 21, 343, 815 21, 343, 815 OB,5O4 5 197 1, 21 $ 211 Change ji -44 Change Scenario 5 1 Adding 4+ unit buildings + 4,088 buildings (+8%) +65,170 units (+98%) 52 Scenario 5: 4+ unit buildings - Summary Illegal Trash will go down by ± 37% Productivity improvement due to economies of scale for smaller units ros an • cons in ex ening service to 4+ unit residential buildings 53 Scenario 5: 4+ unit buildings - Volume Tons Regular Trash 36,045 Green Waste 31,795 Projected Gross Extra Tons 67,840 Reduction in Illegal trash*, 12% Reduction Green Waste, 37% (3,698) (11,883) Projected Net Extra Tons 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 1,103.42 61.48 Productivity Change 12% Reduction in FTE (5.57) Projected FTE 41.79 Projected FTE, rounded 44* * Includes 2 Extra dispatchers in the back office Scenario 5: 4+ unit buildings - Financials Personnel Expenses $ 4,446,498 Fleet, M&R $ 781,980 Fleet, Depreciation $ 658,895 Disposal Fees $ 3,317,336 Unforeseen $ 920,471 Indexation $ 303,755 Loss/Increase in Income (citations) $ 172,194 Extra Yearly Budget Needed $ 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 f Ton Cost f Unit per Year Cost f Ton Cost f Unit per Year As -is 208 248 Scenario 5 Exta Cost Volurr 5 10,601,13,E 10,6011.2, 52,259 203 65,170 $ 163 As -Is + Scenario 5 Total Cost Volume .5 27,159,257 $ 27,159,257 131,705 206 131,883 $ 206 Change • Change 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 Table of Contents • 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 the following deliverables: 7(1 Cost Analysis Detailed insights in the cost of trash picking service. Scenarios Results of 5 scenarios showing the impact on illegal trash, cost per unit served, budget, etc. 8 Investments/Outsourcing Insights additional investments in both equipment and people. For reference high level quote of 3rd party. Trash Fee The details of the cost study can be used to set a trash pickup service only fee. • • • • • ONE COST, FTE, TONS, KPI 10 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 THREE 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 FIVE VALI DATE RESULTS • High level assessment • Detailed assessment • Comparing scenarios • Sanity Checks • 3rd party quote • Discussion with MT COST STUDY SOLID WASTE TRASH PICKUP CITY OF MIAMI OUR APPROACH 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 ILLEGAL TRASH PRODUCTIVITY POSITIVE PRODUCTIVITY 0 0 • NEGATIVE PRODUCTIVITY Size of bullet reflects # of units HIGH RISK 11 SCENARIOS RISK & PRODUCTIVITY For 51+ unit buildings there is a higher risk as the pick-up method, roll -off or manual, will be different from the current main method. Adding 4-12 and 13-50 unit buildings will increase the productivity due similar routes, better use of existing equipment and people. /Scenario 1 = 4-12 units Scenario 2 - 13-50 units Scenario 3 - 51+ units Scenario 4 - 4-50 units (1+2) enario 5 - 4+ units (1+2+3_} INCREASE ILLEGAL TRASH BETTER FINANCE DECREASE ILLEGAL TRASH 0 0 Size of bullet reflects # of units 12 SCENARIOS ILLEGAL TRASH & FINANCIAL Projection of financial results is based on the assumption that the extra units will be charged the new average cost per unit per year associated with each scenario. There is currently no illegal trash issue with 51+ unit buildings. Change of trash pick up service there could result in more illegal trash %enario 1 = 4-12 units Scenario 2 - 13-50 units Scenario 3 - 51+ units Scenario 4 - 4-50 units (1+2) enario 5 - 4+ units (1+2+3)_ Features # Buildings # Units # Tons / Unit % Illegal Trash % Productivity (Extra) Budget Cost / Unit 5 SCENARIOS KEY OUTCOMES & STATISTICS - TRASH SERVICE As -Is 48,955 66,713 1.19 $ i6,558,127 $ 248 Scenario 1 4-12 units 3,243 19,765 +30r o.go -27% +30 % $ +3,174,176 $ 228 Scenario 2 13-50 units 635 14,734 +22% 0.76 -20% +30 % $ +2,069,501 $ 229 % Illegal Trash - Estimates/ Assumptions from Police & Operations % Productivity - Estimates/ Assumptions from Operations l9 Scenario 3 51+ units 210 30,671 +46% 0.76 +10% -20% $ +5,866,943 $ 230 Scenario 4 (1+2) 4-50 units 3,878 34,499.52% 0.84 -47% +40 % $ +4,785,688 $ 211 Scenario 5 (1+2+3) 4+ units 4,088 65,170 +gar 0.80 -37% +12% $ +10,601,130 $ 206 Assumptions General 1 • Trash service pickup once a week • # of new personnel rounded up to 'full time equivalent • Extrapolation of depreciation expenses Assumptions General 2 • 10% 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 13-5o 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 • • • Assumptions: 51+ Units Pickup method will be either manual or roll - off container 50% of buildings will be manual. 8 crews of 3 people 50% 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. Direct - Fees - Nora -Fees Indirect Total 2021 (Full Year) Tonnage: 79,446 Buildings: 48,955 Units: 66,713 Ton/Unit: 1.19 Cost Cost/Ton $ 14,8,37,625 $ 187.52 $ 4,939,054 $ 62.17 $ 3,958,572 $ 125.35 $ 1,660,501 $ 20.90 $ 16,558,127 $ 203.42 = extrapolated for 12 months TRASH excl. Illegal' Direct - Fees - Non -Fees Indirect Total Cost/U n it $ 223.31 74.03 $ 143.27 $ 24.89 100% variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio. Variable with tonnage but with rounding Total indirect cost will not change in the scenarios. Cost per ton & unit will go down in the scenarios. (Full Yeor) Tons - Regular 42,211 53% $ - Green waste 37,235 47% $ Fees Fee/ton 2,832,390 _________ 2,105, 664 79,446 $ 4,939,054 2021 (Full Year) Tonnage: 69,446 Buildings: 48,955 Units: 66,713 Ton/Unit: Cost Cost/Ton $ 14,275,939 $ 205.57 $ 4,317,357 $ 52.17 $ 9,958,572 $ 143.40 $ 1,650,501 $ 23.91 $ 15,936,440 $ 224.48 = extrapolated for 12 months Cost/U n it $ 213.99 $ 54.72 $ 149.27 $ 24.89 1.04 100% variable with tonnage. Whether the cost per unit will change depends on the green waste to regular trash ratio. Variable with tonnage but with rounding Total indirect cost will not change in the scenarios. Cost per ton & unit will go down in the scenarios. FullYeer] Tons Fees Fee tan - Regular 36,898 53% $ 2,475,872 $ 57.10 - Green waste 32,548 47% $ 1,841,494 $ 56..58 59,445 $ 4,317,357 $ 62.17 KPI: Trash Statistics Tons Regular Green Waste Total # Units # Direct Trash FTE Mini Dump p 7,•.ill not change Personnel Expenses Trash (excluding Mini Dump) Personnel Cost / FTE Fleet expenses Fleet expenses / Ton - Fleet MR - Fleet Depreciation Estimated yearly illegal trash picked up (tons) Extrapolation of 10 months 2021 42,211.20 37,234.80 79,446.00 66,713 72 7,276,088 101,057 2,319,979 29.20 1.5.85 13.35 1D,DDD 4 7%%0 F 2020 4.5,.590,15 33,397,76 78,987.91 Regular Trash Green Waste Total 2019 4.5,736..91 26,618.23 72,355.14 2018 61,804 49 22,915 36 84,719.85 Including Illegal Trash Tons / Unit 0.63 0.56 1.19 Excluding Illegal Trash Tons / Unit Regular Trash 0.55 Green Waste G.49 Total 1.04 1396 of trash currently picked up is illegal Average 48,835.82 30,041.65 78,877.47 Tons / FTE 586.27 517.15 1,103.42 Next Steps • Update scenarios with illegal trash tonnage • Select the most appropriate scenario • Set rate for trash pickup service