A study has found that a 7 percent to 8 percent rate increase for Recology Ashland Sanitary Service is justified, but that the garbage and recycling company is using an inefficient mix of automated and manual pickup methods.
Correcting those inefficiencies would cost even more money, but could yield rate stability in the future, according to the study.
Doing nothing would lead to continuing significant rate increases, it found.
A 7 percent to 8 percent rate increase would be on top of an average 11 percent increase that went into effect in January.
The Ashland City Council reluctantly approved that increase to allow Recology to break even, but councilors sought an examination of the company's operations.
Bay Area-headquartered Recology bought Ashland Sanitary Service in 2009, inheriting the hodgepodge manual and automated systems.
A second rate increase would allow Recology to earn a profit of about 4 percent to 6 percent, which would be normal in the industry, said Recology General Manager Steve DiFabion.
While many other cities have moved to fully automated systems in which garbage trucks with mechanical arms lift and dump trash and recyclables, Ashland faces major challenges in moving to a fully automated system, DiFabion said.
In other cities, people head out to work, leaving residential streets largely empty. That allows automated trucks access to street curbs to lift and dump garbage and recycling carts left there by residents. The arms must have room on each side of the cart.
In Ashland, residential streets — especially those surrounding the downtown — are filled during the day with the parked cars of downtown workers and visitors.
Recology could buy another $300,000 automated garbage truck, but it likely could be used only two or three days per week, DiFabion said.
He said a better investment might be a $250,000 semi-automated truck.
With that type of truck, the driver can park in the street, get out and pull a garbage or recycling cart out from between parked cars to the truck's arms, DiFabion said.
Providing all customers with carts, which are like large rolling garbage cans, would cost about $250,000, he said.
Many residents have become used to not bringing their recycling and garbage to the curb. They expect garbage trucks to travel down long driveways or navigate narrow alleys with overgrown trees and vegetation, DiFabion said.
Some simply don't want to touch their garbage containers and won't bring them to the curb, he said.
"The whole system has to change," he said. "It can't change without investment in carts and trucks and the city backing us up that residents need to bring their carts to the street."
DiFabion said drivers could still help disabled residents and others who truly can't bring out their trash and recyclables, but the community has to stop expecting drivers to lift hundreds of garbage cans a day.
"We can't continue to have them do Herculean things," DiFabion said.
The majority of Recology Ashland Sanitary Service's workers are older than 50, he said.
Some parts of town were designed with narrow streets and limited access for garbage trucks, so Ashland probably will always need to have some manual pickup services and smaller, maneuverable trucks, he said.
The garbage and recycling services study, which was done by a Washington state certified public accountant who specializes in garbage companies, also reported that Ashland's recycling depot on Water Street costs about $120,000 annually, while collecting only a tiny fraction of recyclables in town.
Doing away with the recycling center would be a policy decision for the Ashland City Council, DeFabion said.
DeFabion said the recycling center is a social hub where people do everything from drop off recyclables to pick up free clothing to adopt homeless pets.
"I agree the economics don't look very good, but it's an awfully popular thing in town," he said.
The study found that Recology is especially losing money off its yellow bag and sticker program for residential customers who produce little trash. The cost to pick up those materials is twice what Recology charges.
The study recommended that more businesses use bigger garbage containers, which would reduce the number of times per week Recology has to drive to those businesses to collect trash.
DiFabion said Recology is helping businesses find the right-sized garbage containers where possible, but some companies — especially those on the downtown Plaza — simply don't have room for large containers.
Another major issue facing Recology is that residents continue to boost their recycling rates, which is good for the environment but bad for Recology's revenue.
DiFabion said the cost to send a driver and truck to pick up material is the same whether it's garbage or recyclables, but the company historically has only charged for trash pickup.
City councilors reviewed the report during an October study session and noted there were many issues to address.
City Administrator Dave Kanner said the city will put together a team to look at the various issues raised by the report.