In January of this year, I formally asked my staff, my cabinet, other elected officials, community and neighborhood groups, and you to submit ideas on how to address the $45 million "gap" in the City's $450 million general revenue budget. To help gather the ideas, we held public meetings, conducted hearings, collected ideas on the Internet, and read letters and emails. One of the many ideas we received was charging explicit fees for our trash service, services that have historically been provided to some (but not all) of the City's residents for more than five decades. It was not a completely new idea. Residents of nearly all of the St. Louis County municipalities and all of the unincorporated areas of St. Louis County must pay for solid waste services.
This idea, which was discussed at the public hearings, met with little resistance, I think for two primary reasons. First, the quality and scope of the City's solid waste services is pretty impressive: two solid waste pickups per week, regular yard waste pickup, and monthly "bulky refuse" pickups. Second, charging a fee for solid waste services would allows the Refuse Division to add convenient, single-stream recycling throughout the City. Some City residents have curbside recycling now but must pay roughly $100 per year for that service alone, and other City residents use one of our 27 drop-off sites. However, most residents do not regularly use the drop-off sites because they are inconvenient. Because so few of our residents participate in these recycling programs, our citywide recycling rate now hovers at a miserable 2 percent. With these recycling enhancements, we hope to boost that rate to at least 10 percent. Without charging services fees for solid waste collection and disposal that includes recycling, the City would never be able to afford the cost of these widespread recycling enhancements.
(How will recycling work? The new single-stream recycling enhancements will place "blue" dumpsters in our alleys so that residents can take their recycling materials out to the dumpster at the same time as they take out their "traditional" trash. Paper, glass, plastics and cans can all be placed in the "blue" dumpster, eliminating the need to maintain a variety of separate recycling containers. By making recycling more convenient, we believe we can significantly increase the percentage of City household solid waste that is recycled.)
The proposed fee for all of these service (two solid waste pickups per week, including a recycling pickup as the new plan is phased in, regular yard waste pickup, and monthly "bulky refuse" pickups) is $11 per dwelling unit per month.
This rate compares very favorably with fees for solid waste disposal in most St. Louis County locations, and most County residents also have to pay extra fees for some of the services the City will include in the $11 fee. Only those residents who use the City's services will pay the fee. Many residents of larger buildings and condominium developments are already using private solid waste contractors and have for many years. These residents who use private trash services will not pay the $11 fee. The City Refuse Division has nearly completed an extensive survey of properties in the City to determine which homes use City solid waste services and which ones have private services. If a home uses City solid waste services, the fee will be stated as a separate item on the same bill that also includes fees for water services. The same customer that pays the water bill will also receive the solid waste services bill. Homes that do not have water service are officially uninhabitable, and will therefore be automatically excluded from the billing for the fees.
Frankly, it would have been nice to continue to provide quality solid waste services and add recycling enhancements at no charge. But, given a 10 percent, $45 million gap between our expected FY11 revenues and our FY11 expenses, it was (as I have repeated in this space many times) necessary to cut costs, be more efficient, charge more for our services and/or charge for more services. To minimize the pain of any one of these alternatives, the FY11 budget includes a combination of all of them. You will see a variety of cost cuts, efficiency measures and new service charges in the FY11 budget.
The budget people also thought about cutting the cost of our solid waste services. These services now cost roughly $19 million per year. The City actually experimented with cutting solid waste pickups from twice per week to once per week, but, as many of you can attest, this was not a success. They also thought about eliminating bulk refuse pickup, but I and others worried about the negative impact this would have on quality of life in our neighborhoods. So rather than degrade the quality of the services, we proposed instead to preserve them and enhance them with what we think is a modest fee, and to charge this fee only to those who use the services.
Here is some of the arithmetic involved.
The actual cost of the services the City will provide, including the enhancements, is approximately $12.35 - $13.25 per dwelling unit per month. The City is proposing to charge $11 per month for those services.
During FY11, as this service charge is being phased in, the City will not receive a full year's revenue from this service charge nor collect the fee from everyone who is supposed to be paying it. The budget analysts estimate that the City will receive approximately $11 million from solid waste fees in FY11. Approximately $8 million of this revenue will be used to continue the solid waste services that the City now provides, and $3 million will be used to enhance the City's solid waste services increasing our commitment to sustainability.
It is fair to say that changing a long-time practice was not a particularly easy call for me, nor will it be for aldermen. I do believe that it is the right call at a budget time when all calls are difficult to make.