Phoenix Public Works: Recycling Will Be Cut Without Rate Hike

Phoenix will be talking more about trash over the next several weeks. That’s because the city’s Public Works Department says if solid waste rates are not increased, cuts must be made.

For 10 years, the solid waste rate has been $26.80 a month. During Tuesday’s council policy session, Assistant Public Works Director Joe Giudice said, “What you could purchase in services 10 years ago for $26.80 would require $32.07 in today’s dollars just to cover for the cost of inflation.”

Over the last decade, Budget Director Jeff Barton said employee costs have increased, “The personal services costs have gone from about $45 million a year to $55 million a year.”

The population has increased, and so has the amount of trash. The Public Works Department is like the Aviation Department in that it’s supposed to cover expenses through its fees. Since the department didn’t raise rates over the last decade, it came up with money in other ways.

They pulled about $20 million from their reserve fund. They deferred capital investments like putting off getting new vehicles, and they counted on recycling revenue that’s recently dried up. Phoenix used to be able to count on between $8 million and $12 million a year by selling recyclable materials to China but last year China pretty much banned all materials. Going forward, Phoenix expects little to no revenue from selling recyclables.

The Public Works Department presented four options to council members. The first option was a $6.40 a month increase to maintain current service levels. Three options with hikes ranging from $4.75 to $5.65 a month included cuts to the city’s recycling program, which generated concern among recycling advocates who spoke during public comment

Councilman Sal DiCiccio told them he and other council members support recycling and, “These things always get sold as a recycling type of plan but it’s really not. This is not a debate about recycling, this is really a debate about pensions and internal costs, and whether the city of Phoenix can manager their own internal costs.”

But Mayor Kate Gallego responded by saying, “It’s important to understand that the additional expenditures related to recycling, particularly lost revenue from China, is larger than the pension contribution. This is absolutely about recycling. Do we want to be the largest city in the country without recycling?”

The department’s pension costs have gone from roughly $5 million a year to about $10 million, according to Barton. The drop in recycling revenue went from a high of $12 million eight years ago to an estimated $3.5 million.

The council requested 10 community meetings be held to gather public input before it takes action, which can happen no earlier than Jan. 29, 2020. By city code, Phoenix is not allowed to provide solid waste services to businesses or multi-family complexes. The city has about 400,000 residential customers.

Earlier this year, the council approved water rate increases. Starting in February 2019, the average residential user began paying $2 more per month, a 6% increase. In February 2020, the average residential customer will see a $2.37 increase.