Improving Quality: Small-town America's cost battle for automated refuse collection

Ana C. Stagg, P.E.
Director of Public Works
City of Owasso, Oklahoma
Presenter, 2006 APWA Congress

The propagation of automated technology across all sectors of our economy has sparked an upheaval in garbage collection. Automated technology manufacturers and users alike claim impressive gains in collection efficiencies while also profiting from a healthy decrease in labor costs. The steep up-front costs of deployment, though, have many small-town operators wondering: How can we afford to automate our collection fleet?

In the past 20 years, the City of Owasso, a small rural municipality in Oklahoma, has blossomed from a small farming community to a thriving suburban town. Since 1990, housing starts have grown over 500 percent and commercial building has more than doubled. And this unprecedented growth is not scheduled to stop anytime soon. Today, seven new subdivisions expected to house over 1,500 residents are either under construction or scheduled for construction in the next two years. Additional development includes the new Tulsa Technology Center, two hospital complexes, three commercial shopping centers and redevelopment of the Owasso Downtown District. Over the next five years, City officials expect the population within Owasso to increase by a perplexing 10%.

The Owasso Public Works Authority was created on January 10, 1973 to finance, develop and operate water, wastewater and refuse services. Since then, the City has provided curbside residential and commercial weekly refuse collection to its citizens. In 1980, the City took a big step by becoming the first community of its size to undertake semi-automated, single-operator, side-loading collection and provide each customer with a state-of-the-art refuse cart. Soon after, innovation stopped. Operations became routine and business-as-usual replaced strategic planning.

Before the City even recognized it, refuse collection operations received a devastating blow. Within a few months, half of its fleet became inoperable. The first casualty was a 2002 vehicle that inexplicably caught on fire and burned to the ground. Soon after, a 1998 vehicle suffered irreparable breakage to its frame and was decommissioned. Finally, simply due to old age, a 1984 vehicle stopped functioning due to a myriad of mechanical problems. The City's operational fleet was reduced to two (2003) side-loaders and one (1984) rear-loader, all equipped with semi-automated bodies.

Within a few months, personnel morale was destroyed and collection delays were the norm. To remedy the situation, City officials promptly commissioned the preparation of a comprehensive study of its refuse collection operations. The purpose of the document was to outline a plan to:

  • Enhance services provided to residential customers;
  • Provide a safer work environment for refuse collectors; and
  • Maximize process efficiencies to reduce overall refuse service costs.

Not surprisingly, the study concluded that the City's refuse collection fleet was inadequate in numbers to perform single-operator, refuse collection services. The resource study performed revealed that under most favorable conditions (equivalent to a 40-second stop), collection personnel could service a maximum of 500 stops per day, requiring a minimum of five side-loader vehicles. Surprisingly, the life-cycle cost analysis concluded that semi-automated operation—as performed since 1980 by one operator per side-loader vehicle—was the most costly of evaluated alternatives. The report also noted that the option to outsource operations—as a means to reduce collection costs via privatization—would be the least cost-effective alternative for the City of Owasso. The following provides a synopsis of the analysis presented in the report.

Case Study: Refuse Collection Efficiencies
Because of the many factors affecting collection efficiency—e.g., equipment performance, personnel proficiency, street and neighborhood layout, and travel to and from disposal sites—the number of stops achieved in a working day per route can vary significantly from city to city, and from as low as 400 to as many as 1,200.

Table 1 is presented to exemplify the differences in the number of stops observed by sample communities performing automated, semi-automated and manual refuse collection operations during an average working day. When numbers are considered, the City of Owasso's semi-automated operations ranked average-to-low on its performance per route.

However, an important factor when determining the efficiency of your operations is considering the number of workers assigned to each vehicle. While the City of Owasso staffs its semi-automated operations with a single operator, most forms of semi-automated and manual operations are typically staffed with two or more workers per vehicle. In the sample of cities above, a single worker performed automated operations, while multiple operators—per vehicle, per route—performed semi-automated and manual operations.

Manual operation is typically defined as the use of labor to manually collect, pick up and/or place curbside refuse (typically gathered in plastic bags or carts) in a rear-loading refuse vehicle. Although some haulers have abandoned this technology because of high labor costs, approximately 65% of haulers still employ rear-loading vehicles because of lower equipment costs and high stop counts. Another significant cost savings of rear-loading operations is that such do not require the use of carts.

In general, rear-loading operations are staffed with three operators: one driver and two collection technicians. As the vehicle travels, collection typically occurs from both sides of the street for an average stop cycle of 15 to 20 seconds. Thus, assuming a conversion from semi-automated operations to manual operation (15- or 20-second stop cycle) and maintaining all other variables constant, the average number of refuse households—or stops—per route could increase to 855 or 1,140, conversely. The number of refuse vehicles could be reduced by nearly 50%.

Similarly, rear-loader vehicles are less costly than similarly equipped semi-automated and automated side-loaders. On average, rear-loaders can be purchased for $50,000 and $70,000 less than their semi-automated and automated counterparts, respectively.

City of Owasso staff in the operation of a semi-automated, rear-loader vehicle (photo courtesy of the City of Owasso Department of Public Works)

Semi-automated operation is defined as the use of both labor and equipment to collect, pick up and/or place curbside refuse (typically gathered in carts) in a side-loading refuse vehicle. Primary benefits of semi-automated operations include reduction in labor costs and the uniform appearance with covered wheeled carts—which also reduce blowing trash, odors, animal scavenging and health concerns. On the other hand, a significant drawback is the need for more complex collection equipment (with higher up-front and maintenance costs) and costly carts.

The purchase price for a new semi-automated vehicle is approximately $170,000 to $200,000 each, depending on frame selection. In addition to higher initial investment, semi-automated, side-loading vehicles also command higher maintenance costs because of the complexity of the equipment. Finally, the life expectancy of a semi-automated, side-loading unit is considerably lower than that of a rear-loading unit, typically ranging between five and seven years.

City of Owasso staff in the operation of a semi-automated, side-loader vehicle (photo courtesy of the City of Owasso Department of Public Works)

In order to increase efficiencies and reduce vehicle count, each route can be equipped with two operators and dual arm side-loader vehicles. Under this scenario, and assuming simultaneous collection from both sides of the street, the stop cycle may be reduced from 50 to 25 seconds for a total of nearly 700 stops per route, per working day.

Automated operation is defined as the use of equipment to mechanically collect, pick up and/or place curbside refuse gathered in carts in a side-loading refuse vehicle. Automated operations require a single operator who performs both driving and collection activities. Pick-ups are performed from one side of the street by a mechanical arm which extends to the curbside—eliminating the safety hazards associated with the crossing of the street by operations personnel. The reported average stop cycle for this operation is between 15 to 20 seconds, or similar to those obtained by manual operations, but without the need for additional labor.

Some benefits of automated operation include higher efficiencies and reduced employee injuries and turnover. Similar to semi-automated operation, major drawbacks include high equipment up-front and maintenance costs. Additionally, to implement this technology, providers must acquire carts—at a cost of nearly $60 each—to enable the standard lifting mechanism to maneuver the cart.

The purchase price for a new automated vehicle is approximately $200,000 to $250,000 each. Automated, side-loading vehicles also command higher maintenance costs due to equipment complexity. Like the semi-automated, side-loading unit, automated units also have a much shorter life expectancy than a comparable rear-loading machine. The life expectancy for these automated units may be as low as three to five years.

A comparative analysis of refuse collection technologies was prepared for the City of Owasso based on qualitative measures. A 30-year life was selected for the life-cycle analysis because it represents the common multiplier of life-cycle cost for each of the alternative equipment. For comparative purposes, a population growth of 500 new customers per year was assumed. Each alternative necessitated the addition of new vehicles to meet population growth and vehicle replacement schedules. Additional assumptions including equipment life cycles, maintenance and labor costs are listed below.

Based on a 30-year cost analysis, privatization is the most costly alternative at nearly $80 million. Conversely, and as expected, rear-loading operation (without the use of carts) is the most cost-effective of the alternatives at approximately $30 million. Interestingly, the analysis revealed that rear-loading operations, with the use of carts, are compatible—cost-wise—with fully automated operations. Finally, it is worth noting that semi-automated operation, as performed today by one operator per vehicle, represents the second most costly alternative at nearly $42 million.

Automation: What can you afford?
In 1980, the City of Owasso implemented the use of carts to provide a uniform appearance and reduce blowing trash, offensive odors and animal scavenging. Today, the City wishes to continue that use and, therefore, the most economical alternative (rear-loading without the use of carts) could not be considered for implementation.

Among the remaining options, manual rear-loading (with carts) and fully automated operations remain the most competitive long-term alternatives because of higher productivity. Manual operation demands higher physical exertion, which generally results in high turnover, decreased attendance and frequent injuries. On the other hand, automated operations do not require manual handling of refuse, virtually eliminating lifting injuries and puncture wounds common to manual operations. Additionally, because of its lower physical demand, automated operations are likely to result in savings to the City in Worker Compensation claims.

The implementation of automated operation today would require a $1.1 million investment in new equipment and replacement carts. The existing fleet and carts could then be sold to communities still using side-loading operations. Gradual conversion to the new automated technology would minimize initial investment. Although not an attractive long-term solution, semi-automated operation staffed with two operators required the lowest initial investment at approximately $575,000. A gradual implementation would afford the option to utilize the existing equipment fleet and carts while converting to the new technology.

The merge of semi-automated and automated operations would require the City to employ additional staff, purchase one new automated vehicle and finance the retrofit of the existing fleet. Under this "merged" scenario, the fleet would consist of three semi-automated (equipped with a driver and an operator) vehicles and one new automated vehicle (equipped with one driver). One vehicle would serve as a stand-by unit, to allow for the proper maintenance and rotation of equipment. Additionally, if 100% utilization of the new automated vehicle is desired, the City must replace approximately 5,000 existing carts at an additional cost of $250,000.

The "merged" scenario assumes 700 semi-automated stops and 1,000 automated stops per working day. Staffing requirements for the combined semi-automated and automated service would require, at a minimum, four licensed drivers and two collectors for an estimated personnel cost, including benefits, of approximately $245,000 per year.

A cost analysis revealed that the gradual implementation of automated technology would yield the most economical long-term solution for the collection of refuse. The initial investment, to include the purchase of a new automated vehicle and 5,000 new carts, would be approximately $450,000. Additionally, the City would have to hire one operator at an additional cost of $27,000 per year.

To improve operations, it is recommended that the City of Owasso convert its existing semi-automated fleet to fully automated. The conversion is to occur in phases, beginning with the purchase of one new automated vehicle. The existing semi-automated fleet is to be equipped with a dual tipper and staffed with an additional operator to increase collection efficiencies.

Following the implementation of recommended operational changes, refuse collection is to be performed by one automated and two semi-automated vehicles. The existing semi-automated fleet will be replaced with automated vehicles as the equipment reaches its life expectancy. Additional automated vehicles will be added to the fleet to service the growing population.

The City of Owasso may also opt to use the retired semi-automated vehicles for the collection of yard waste until inoperable, thereby delaying the purchase of new yard waste replacement equipment.

Following the completion of the study, staff was directed to gather further empirical data to determine, without doubt, that automation would be the best mode of operations for the City of Owasso. Additionally, it was recommended that a shorter life cost analysis be performed to better estimate initial investment. Pilot studying is planned in 2006 for such a purpose. The analysis will then be revisited to confirm initial findings.

While more data was gathered and further analysis performed, current needs were addressed by retrofitting the existing three-vehicle refuse fleet with dual tippers and staffing each vehicle with two operators. In 2005, the Owasso Trust Authority approved supplemental appropriation for the retrofit of the existing fleet, purchase of new equipment and funding of additional labor. No fee increase was authorized for the implementation of the new technology. A fee study is programmed to occur in 2006 to aid in the financing of the conversion.

Surprisingly, nearly one year after the study was completed, replacement of carts remains the single, biggest obstacle standing in the way of automation for the City of Owasso. Such a one-time expenditure is now estimated at nearly $400,000—almost enough to purchase two new automated trucks. Lesson learned: "Le bon Dieu est dans le detail." ("The Devil is in the Details" is generally attributed to Gustave Flaubert (1821-80), who is often quoted as saying, "Le bon Dieu est dans le detail" (God is in the details). Ref: http://www.phrases.org.uk/bulletin_board/24/messages/694.html.)

Though it is crucial to upgrade the existing equipment and machinery for refuse collection, there is a lesson to be learned in the details of operation. Quality of life for the City of Owasso, as well as other small towns, can only be determined by the ability to make a seamless transition for its citizens. A commitment has to be made by City officials, local trust authorities, and the community itself in order to enable the initial investment of carts to provide a gradual implementation of automated refuse.

The challenge facing small towns today reflects the desire to increase quality of life while not overextending budgetary requirements. Gradual implementation, thus far, has proved to be a feasible means whereby small towns can make adjustments in operations while continuing to provide a high level of customer service. Though more studies need to be completed to ensure this transition as the optimal choice for the City of Owasso, the effect on current employees as well as incumbent citizens needs to be taken under consideration. With increases in population such as the City of Owasso has seen in recent years, measures will be taken by City officials to maximize the current operation schedules and personnel to meet the immediate needs of its citizens. The importance of long-range planning—even for refuse collection operations—is crucial for the sustainable success of small towns in America, made evident by the many recent struggles faced by the City of Owasso.

Ana C. Stagg, P.E., will give a presentation on this topic at the 2006 APWA Congress, accompanied by William N. Blair, Director of Public Works, City of Bowling Green, Ohio. Their session is entitled "Can Small-Town America Afford Automated Refuse Collection?" and takes place on Monday, September 11, at 3:00 p.m. Ana C. Stagg can be reached at (918) 272-4959 or astagg@cityofowasso.com.