Your garbage fees pad the city's budget

Jodi Rogstad

Nov. 1, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- CHEYENNE -- Every year, millions of dollars worth of the garbage fees the city collects goes into a savings account and the city's general fund to pay for other programs.

In 2009, the city's sanitation department collected $11.04 million.

Of that, $2.9 million paid for staff and other expenses to run the sanitation department, and $3 million was diverted to its savings account, which is called the solid waste fund.

Factor in expenses for fuel and maintenance, and that left $3.4 million for the general fund.

For the past five years, a Wyoming Tribune Eagle analysis shows, $13.6 million worth of the city's sanitation fees supplemented the general fund.

City officials defend the practice, saying it has no other options to plug the budget gap. Further, the department uses other city services that mask the true operating costs.

"If it was not for sanitation fees, we'd have to cut something," city treasurer Barb Dorr said.

Mayor Rick Kaysen echoed that: "You cannot reduce a fee or tax and expect things to remain the same."

This year, cutting is not a palatable option for the city's $51.36 million budget. People are spending less, which means less sales tax revenue, which is the city's largest funding source. The city is already tightening its belt.

The city's other departments don't pay for themselves like sanitation does. Building and development almost makes enough in building permits to pay for itself. But fire and police do not.

Jim Elias is the city's public works director, the department that oversees the sanitation division.

Elias said it's a "misconception" that garbage fees more than offset the division's expenses. When people pay their garbage bill, he said, the money goes into the general fund, where it goes to departments that support sanitation services.

He wrote in a guest column in the Wyoming Tribune Eagle this week: "... Very little of the revenue collected is used to support other city departments or projects."

Elias pointed to a full-cost analysis that one of his predecessors completed for fiscal year 2008. That shows that sanitation ran a deficit of more than $100,000. It factors in $2.26 million in depreciation on vehicles. It also estimates that the division's use of other city services -- such as purchasing, city council and human resources -- was worth $1.3 million.

Fees vs. taxes

In Cheyenne, it is mandatory for those who live in a home or operate a business to subscribe to the city's garbage collection services. It says so in city code. The only way to opt out is if the property is vacant.

This type of thing is done for the public good, said Dr. Robert Schuhmann, a professor in the political science department at the University of Wyoming.

City leaders thought it would be better to collect trash for people every week, rather than to allow people to let it pile up in, say, their garages and haul it to the dump themselves, he said.

For this service, people pay a monthly fee. For Cheyenne residents who get automated pickup, that's $16 a month.

Unlike taxes, fees are one-to-one, Schuhmann said. It's "palatable" to "pay a fee and get trash collection as a result," he said.

"But it gets weird when you pay for trash and end up paying for the city attorney," Schuhmann said.

True costs?

It's difficult to get a true accounting of what it costs to run the sanitation department.

When you pay your garbage fees, the money goes into the city's general fund -- a big pot that funds everything from accounting to aquatics to the mayor's office to police to fire.

Some of the division's expenses can be accounted for, such as personnel, fuel and parts.

Others cannot. When sanitation needs to hire another worker, that falls under the city's human resources department. It does not bill sanitation for the service.

Elias said the services that sanitation uses offsets -- even eliminates -- the surplus in the general fund.

But without knowing how many hours human resources spent on hiring sanitation workers, there's no way to pinpoint just how many resources sanitation uses at other city departments.

"It is very, very difficult to get into a true cost-of-service method," Kaysen said.

The general fund provides flexibility for the city, he said.

If sanitation were separated in an enterprise fund -- making the department a standalone entity with its own budget -- it would have to pay the city for services that it uses, Kaysen said.

Say if it needed the services of the city clerk, fleet maintenance or information technology, it would have to come out of sanitation's revenues, which comes from the rate-payers.

To help sanitation cover its ongoing expenses, the city set up the solid waste fund. Every year, $3 million in garbage fees go here, along with $750,000 in composting and recycling revenues.

At the end of fiscal year 2009, which ended June 30, there was $9.9 million in that fund. Last year, the city used $1.1 million worth of this money to haul trash to a landfill in Ault, Colo. because the current city landfill is near capacity.

Nowhere to turn

It's not unusual for a governmental entity to offer a service that ends up filling gaps in its budget, Schuhmann said. The most common example of this is a government-run power company or even a state lottery system.

Kaysen said if the city lowered garbage fees, the losses would have to be made up by cutting programs or services.

Dorr said there's no other way to make up the money. The city can't raise property taxes -- the city collects the maximum 8 mills that the state allows. (To compare, Laramie County School District 1 collects 32 mills, and Laramie County collects 9.5).

Other Wyoming cities use fifth-penny sales tax dollars to supplement their budgets, Dorr said. In Cheyenne, the City Council votes on a list of specific projects before the election as a promise to voters.

The seventh-penny sales tax is an possibility, but there doesn't appear to be the political will bring that before the voters, she added.

What's next?

As the sanitation department prepares to launch its new curbside recycling program next month, both Kaysen and City Council members say they are hearing a lot from their constituents.

Many are upset that they'll have to pay a mandatory $5 monthly fee for the service.

Some residents do not want recycling, some want it but don't want to pay for it, and others want it no matter what the cost, Kaysen said.

He said they are reviewing recycling fees, though he has no timeline on when a decision will be reached. Earlier, the city's analysis showed it would cost $6.15 per person to operate.

"You take all the input, all the desires and try and model a program that's going to work, and we have to make sure it's economically viable," Kaysen said.

Newstex ID: KRTB-0045-39342226