Thursday, February 11, 2010

Solid Waste Pros/Cons - Updated

I received two emails this morning in response to my posting here. I provide answers to them as follows:

The first:

The new trash fee will be $233 (MAYBE it will go down to $220, but no guarantee).  However, all cost bases are going off the $220 number.  I feel that is a big mistake.  There is no $20 savings per resident.  There is only $7, based on the assumed current cost of trash pickup being $240.  So stickers to the dump will cost $20 now, which means the residents net cost is $13 for those wishing to use that service.  It is not a wash.

Do you know where they are getting the 800,000 from?

Let's walk through this step by step. It can be confusing and easy to mix up the numbers to end up with incorrect math. I caught one of my own mistakes as I went through this.

1 - The current annual is $244. That is 4 quarter charges of $61 dollars per quarter.
The proposal on Wednesday 2/10/10 was shown as $233
So the savings of this proposal would be $11.

Considering the Beaver St Sticker fee would increase from $10 to $20, the net savings for the approx 2500 folks considering the $11 savings for the annual curbside fee would be $1.

2 - The original proposal of the new system would $220. This does still require a Council vote but I think would be likely. More likely than not. The further savings of $24 dollars would come from use of a surplus of the Solid Waste enterprise account. Jeff Nutting has mentioned this a couple of times. Application of the surplus against the curbside fee would allow for the $220 annual fee for the next two years.

You may argue that the application of the surplus would be better used elsewhere. Those could be options to consider. Considering the cast flow and time value of money, the savings provided by the reduced fee to Franklin residents today would be better.

However, assuming the $220 becomes the new system fee, the resulting savings is $24 per resident per year.

Applying the $24 savings to the increase in the Beaver St fee it becomes better than a wash which I did claim earlier. The resident now saves $14.

Annual Curbside fees  
Current         244
Proposed 1    233
Savings 1       11
Current         244
Proposed 2    220
Savings 2       24

Beaver St sticker  
Current          10
Proposed        20
Increase       -10

3 - The $800,000 is the gross amount required to fund the totters/bins required (with some spares). Jeff Nutting has said a couple of times that the full amount may not be needed. Historically, an amount authorized for borrowing if not fully utilized can be rescinded and has been rescinded. You can check the actions for the Town Council meeting on February 3rd, where two prior bond authorizations were rescinded as no longer required.

Per Jeff it is $45 per totter/bin and we need 2 for each resident. $90 per resident at 8600 residents comes out to $774,000 or $800,000 in round numbers.

The $800,000 would be borrowed against the enterprise account to finance the purchase of the totter/bins over a five year period. This amount is included in the calculations that would still result in either the $11 savings or the $24 savings.
4 - As I went back through my notes and the Town video archives, the presentation to the Council at the January 20th meeting showed a $3 over flow sticker. Assuming the $24 savings, this would allow residents to obtain 8 overflow stickers and still break even for the year ($3 x 8 = $24).

The second:

You refer to a $20 savings in your article, but I thought the savings is only $11. Which is correct?

Actually based upon the above, my "savings of $20" is an incorrect calculation. It should be $24. It currently is $11 until the Town Council approves the budget which as I mentioned above is likely to bring it to $24.

I hope this helps to clear up some confusion around the numbers, some of which I contributed to with my own math error. 


For additional information:

1 - You can review the Town Council meetings on the video archive here

2 - You can review the solid waste presentation to the Town Council on 1/20/10 here

3 - My summary of the recent Town Council meetings covering this topic
2/10 ->
2/03 ->
1/20 ->

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