Rolling with the Rocky Times

November 1, 1998

15 Min Read
Rolling with the Rocky Times

Lynn Merrill

Acquisitions. Mergers. Spin-offs. Consolidations. What's a solid waste collection manager to do in such challenging times? Collect the garbage, collect it efficiently and try to stay in business.

Easier said than done, right? However, across the nation, some collection managers are staying competitive despite the legislative curve balls and regional issues that make it so difficult to establish benchmarks industry-wide.

For this year's installment of the Collection Managers' Roundtable, World Wastes has invited four progressive managers - two from the private sector and two from the public sector - to discuss the issues and challenges facing the industry.

The panel of experts includes:

* David Brisson, president and owner of Great American Environmental Services, Kingsford, Mich.;

* Stan Levine, vice president of Potomac Disposal, Rockville, Md.;

* Nancy Nevil, solid waste manager for the city of Plano, Texas; and

* Lars Williams, operations superintendent for the city and county of Denver.

WW: What will be the most pressing policy issues facing solid waste collection operations in the next few years?

Brisson: Flow control is probably the largest policy-type question on the state level. Each county in Michigan regulates its solid waste individually from the rest of the state, so we still have relatively tight flow control over the waste movement.

As a hauler, I'd love to compete under normal free enterprise terms. I think most of us in this industry know that when we are allowed to compete, costs go down. Programs such as flow control keep costs and prices up.

In some cases, though, it's nice to be on the right side of flow control where you can capitalize on it. We have a few areas where we're in that position on a county-by-county basis, but on the whole, we would rather compete than protect these little pockets.

My biggest fear is that the federal government will try to circumvent the regulation with a law. I would prefer if [flow control] was left alone so that we could compete as a free enterprise.

Levine: Efficiency is going to be the key issue in collection operations because our industry is so competitive. [Efficiency means] being able to make each pick-up at the lowest possible cost and still do a good job.

Nevil: I think [the biggest issue] is going to be on the recycling end [of collection] - what [material] is picked up, how it's picked up and how often it's picked up.

I believe that's the case because of what we're seeing with the markets and with the cost of providing service. We'll have to do something to make the collection of recyclables more cost-effective.

Also, we're beginning to see some long-term repetitive lifting injuries in workers' elbow and shoulder areas [from handling recyclables]. We'll have to address that concern in a similar fashion to how we addressed the problems associated with manual refuse collection.

Williams: Considering the major buy-outs that are going on now with the larger haulers, I think we'll see more regionalization on the municipal side. Haulers will have to show customers that they're competitive by [using] pay-as-you-throw type scales on their trucks.

Privatization also will be an issue. After the shake-out with the mergers and the buy-outs, the large haulers are going for the municipalities' [business] because they are the last big chunks of consolidated areas. Municipalities will have to be competitive to keep the private haulers out.

WW: Many states have established aggressive waste diversion goals and targets with deadlines that are fast approaching. What kinds of programs for recyclables and yardwaste will collection operations need to establish to meet these goals? And how effective are the programs that are currently in place?

Brisson: Michigan has no real target at this time. It has some broad guidelines, but no laws.

Wisconsin has some of the toughest regulations in the United States. Wisconsin's primary objective has been to recycle 25 percent of its municipal solid waste. The state of Wisconsin has met those goals with separate collections.

Where there's a volume-based fee or a pay-per-bag [program], we're seeing reductions in waste volumes across the board and a push toward recycling.

For example, there are several municipalities [in Michigan] that have gone to a $1-per-bag fee. It doesn't really cover the cost [of pick-up], but there's a 50 percent reduction in the waste put out at the curb because of these pay-per-bag programs.

Levine: As far as municipalities are concerned, everyone's situation is different, depending on where the municipality is located or what the market is like for a certain recyclable material. Markets need to be developed for each material. Recyclable materials cost so much to collect that they must have a value.

When it comes to recycling, everyone has to experiment and be objective. There's no inexpensive way to do it. Recycling is labor-intensive and requires a lot of expensive equipment. If you're not getting [a good] price for the material that you're collecting, it will cost everyone money.

Nevil: Recycling is not mandatory in Texas, but we have a goal of 40 percent reduction by 2000.

Our diversion currently is at 32 percent, and we have reached that by offering separate collections for recyclables, landscape waste, clean wood and appliances with an on-going educational program.

The city of Plano did not get into recycling with the promise that we would make money. It's unfortunate that a lot of municipalities gave that impression. We look at the revenue side of recycling as just offsetting the collection cost. We're committed to the collection [of recyclables], but we're going to have to do a better job of making it as efficient as possible and reducing the cost.

While many cities do a good job with recycling education, they're not maximizing their trucks. They're providing the collection at a cost, but they're driving by homes and are not picking up what they need to be collecting because no one's out there promoting the program.

We are switching to a larger cart for recycling and will collect recycling every other week. Moving from a weekly system to an every-other-week system will be difficult. There will be a lot of homes with a big container that don't participate at the level they need to, so we plan to spend our energies trying to get those folks to recycle.

Williams: Some of the diversion goals in place around the country haven't been met. There needs to be an evaluation on what's possible and realistic.

What are the market forces in those communities [that are missing their targets]? A lot of communities don't have companies that process [recyclables]. It doesn't do any good to divert yardwaste if it's just going to sit on the ground.

As far as collection programs go, I see the industry moving away from manual recycling collection to dual, automated collection. Because of the economies of scale, I don't think we'll see three trucks driving down one street to collect recyclables, trash and yardwaste separately.

The burden of investment is on the processor. The successful processors are those that have the means and the markets to divert recyclables and yardwaste from the waste stream.

WW: What challenges do you expect to face in your operation during the next several years?

Brisson: We're still an independent [company], but we're competing against large national firms now - a considerable challenge for a small firm. I've been in the business for 25 years, and we've done well in the past. I hope that doesn't change. I don't think we could compete without owning our own landfill. Our landfill has allowed us to stay in the game.

Another challenge for us is finding good people. As we grow, we need to fill those additional slots. We're finding it difficult to find applicants because of the stigma attached to this industry.

If the old [negative] perceptions of the waste business hold true, it's our job to demonstrate that this is a good business. We need to do a better job of presenting the benefits to overcome the old picture of a garbage man dumping a can.

Levine: With all the acquisitions that are taking place, there is an opportunity for independent haulers. In order to compete against the big guys that have more capital, independent haulers need to find the best and most efficient way to collect trash.

Additionally, there also is a challenge [for independent haulers] to compete against the small, one-truck operators that have a low overhead. It's going to be tough to compete on both sides of the coin. Service is key, and while most of us do a fine job, we're not perfect.

Nevil: Automated recycling is the biggest challenge we're facing right now. The city council has approved an expansion of our pilot to 22,000 homes next year.

We have worked with Heil to come up with changes in the hopper configuration of its RapidRail truck to allow us to pick up with the single lid without having to go to split lids.

We also are focusing on an educational effort to teach residents how to keep their loads uncontaminated. We spend a lot of resources on education.

In order to get [our diversion] up to 40 percent, we're spending our resources on education instead of looking for new materials. We're trying to reach those citizens who are not already recycling or participating.

Additionally, to make our composting operation as efficient as possible, we're looking at some contracts for handling landscape waste from the private sector or from other municipalities.

We've got machinery that can handle a lot more volume than what we're handling currently.

Williams: Due to Colorado's economy, we have a tough time finding quality people to drive for us and throw trash.

One of the most difficult jobs is working off the back of a rear loader, throwing trash. McDonald's pays $8.50 an hour for a starting worker. Why should someone work off of a rear loader when he can make the same amount of money at a McDonald's?

Another operational challenge is keeping pace with the area's growth. We're adding about 60 new residents a week to our routes.

Increased automation, knowing our real cost of doing business and parlaying that into becoming more efficient will help us compete with the private haulers coming into the marketplace.

WW: Employee issues, such as recruitment, job descriptions, training on equipment and services, career development and day-to-day management can make or break a collection operation. What are you doing - and what should the industry as a whole be doing - for employees?

Brisson: We give safety and productivity bonuses. One of my managers says keeping employees in the loop - explaining why we're doing what we're doing - is helpful.

Over the past five years, we've [developed] and purchased several training programs. We also hold monthly safety seminars and strive to make each employee feel valued.

Employee productivity is key to being competitive. Clean equipment also is important, and we work on that all the time.

Michigan law requires drivers to fill out a form on the condition of their trucks in the morning and evening. It can be difficult to get the drivers to do that, but by enforcing this procedure, we demonstrate our concern about the equipment they're in.

Levine: I'm a firm believer in hiring from within and promoting employees as they prove themselves. Each person is hired for a specific job, and once he has mastered that responsibility, we will try him at a higher-level position. This allows each employee to experience more of the business. The more he contributes, the more valuable he is as an employee.

Nevil: Plano just finished a market-based compensation study on each job. When the city has done these studies in the past, it looked only at other cities.

However, this new version was a true market study that compared similar jobs in both the private and public sectors [within the metroplex].

As a result, the minimum salary rose almost $2 an hour, and we already have seen a boost in recruiting employees. [Before the study,] we were having a difficult time finding qualified drivers.

This [new salary structure] is going to do a lot, not only in recruiting candidates, but also in helping us retain employees.

We provide on-the-job training and classroom instruction, and spend anywhere from two weeks to six weeks on training, depending on the employee's qualifications.

We also have teams under each supervisor, which meet weekly. The supervisors act as a self-directed work team, which reports directly to me. This team forum allows employees to address problems, give input, clarify policies and discuss the performance of their team and of the department in general.

The improvement in employee morale and job performance has been incredible.

To keep performance high, we run a team incentive program: If employees meet certain criteria, they're eligible for gift certificates at the end of the year. We also present an "Abbey" - "Above and Beyond" - which is a cash award up to $100. The amount depends upon what the employee has done in the department.

Additionally, in the city's safety incentive program, employees are eligible for approximately $400 a year if they go without an injury or accident all year.

For our department's part, we provide the best equipment available. We have a five-year replacement program, so the equipment always is new and clean. We get a lot of input from the drivers on our specifications, which is important to the employees.

They feel good about what they do, and they're proud of the equipment they drive. We need to see a lot more of that in the industry.

Williams: We rely on a career service authority for recruitment and job descriptions, a procedure that is different from what a lot of municipalities do. We provide comprehensive training for all employees, and we cross-train the drivers and laborers to make sure that they understand each piece of equipment.

We send our employees through an extensive two-day customer service training course to teach them how to handle customers on the street.

We also have a mentoring program for our supervisor trainees. In this program, employees spend time in all facets of the operation to learn everything from handling employees and customers to understanding budgets and how personnel works.

We let our employees try to resolve customers' problems first, before they escalate to the customer service desk or to the superintendent. We're trying to get the employees involved in what goes on here so that they feel like they have a stake in the operation.

Trucks: 15 Crane Carrier/Heil 7000 automated; 28 Volvo/White - Impact side-loading dumpster, 40 rear-loading; 28 Volvo/White Leach 2RII and 10 dual-drive Leach 2RII; 14 recycle dual-drive Dempster -Volvo/White Cane Carrier

Containers: 38,000 100-gallon fully automated carts from Schaefer, Heil, El Monte; 19,000 3-yard, side-loading dumpsters

Customers: 160,000 residential

Employees: 250 peak; 200 off-peak

Service Area: Boundries of the city and county of Denver

Services: Recycling, large-item pick-up, Christmas tree recycling, leaf recycling, right-of-way mowing, graffiti removal

Local Tipping Fees: Approximately $9/ton

Tales from Denver: A female residential customer hid $10,000 in a trash can. Without knowing what the trash contained, the woman's husband put the can out for collection while she was not home. The money never was recovered.

Trucks: 17 automated refuse, Crane Carrier, Heil Rapid Rail; 17 recycling Crane Carrier, Dempster body Recycle Pak; 1 Volvo automated with modified Heil Rapid Rail for automated recycling; 8 rear loaders, Crane Carrier, Pak Mor; 1 boom truck, International with Effer body

Containers: 95-gallon Otto, Rehrig-Pacific and Schaeffer

Customers: 55,889 single-family, 79 commercial

Service Area: City of Plano, an estimated 213,263 residents as of mid-1998

Employees: 62

Services: Recycling, household hazardous waste collection/reuse, appliance recycling, bulky waste collection, weekly landscape waste collection, drop-off for textiles/ paper, old corrugated carding

Local Tipping Fees: $26.68/ton, includes transfer station and landfill costs

Trucks: 8 roll-off trucks, Mack chassis; 11 Lodal side loaders

Containers: 2,000 Zarn and American; 90-gallon carts; 160 30-yard, open-top containers

Customers: 8,000 residential, 200 commercial

Employees: 25

Service Area: Washington, D.C., metropolitan area

Services: Construction and demolition debris removal, and residential collection

Local Tipping Fees: $45/ton

Trucks: * 10 rear loaders: 20-yard and 25-yard Loadmaster with 4900 Navistar chassis

* 3 side loaders: Lodal EVO

* 6 roll-offs: McClain hoist on Mack chassis

* 1 8-axle, semi-roll-off: pulled by Western Star tractor

* 1 recycler: Loadmaster on 4700 Navistar chassis

* 7 semi-tractor trailers: Western Star and Navistar

* 2 front loaders: Lodal TC-1034 on Mack Chassis

Containers: The company uses a semi-automated cart program in some select residential areas.

Customers: Approximately 15 percent of the company's gross revenue is from door-to-door residential waste collection. The biggest part of the business comes from commercial and industrial collection.

Employees: 50 Service Area: Central, upper peninsula of Michigan and a portion of northeastern Wisconsin

Services: Recycling, construction/demolition debris recycling, business/industry/ residential collection, operates three transfer stations and a landfill, operates three "Michigan trains" grossing up to 164,000 lbs or approximately a 50 ton payload

Local Tipping Fees: Tip fees vary in the market area, depending on the waste ($25/ton to $60/ton)

Great American Story: "We operate in the area between the Lake Superior and Lake Michigan," says David Brisson, president and owner. "On average, the mountain area accumulates 60 inches of snow. Throughout the year, the temperatures range from 30 degrees below zero to 90 degrees above. This climate presents special problems for waste collection.

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