[EQAB-list] quick & dirty cost:benefit analysis

[Robert G Kennedy III, PE]

COST TO HOUSEHOLDER
-------------------
increase in trash/util fee per household: $5.00 --> $7.50 per month
increased fees to City: $2.50 x 12 = $30 per year.

BENEFIT TO HOUSEHOLDER
----------------------
Givens: 11,645 households generating 14,000 tons of garbage per year.
         imputed average: 1.2 tons garbage per house per year (seems low)
         present diversion (i.e. recycling) rate: 10%, or 0.12 tons,  
or 240 lbs.

expected diversion rate due to single-stream recycling: 33%, or 792 lbs.
difference = full 792 lbs, because households not paid now for  
recycled material

Monopoly money earned by householders:
$0.25 per lb (2.5 points per lb x est. $0.10 econ value per pt)
times 792 lbs = $198.00/year

cost to green volunteers for drop-off at recycle center:
1 round trip per month x 10 miles ea.way x 20 mpg x $4.00/gal = $48/yr, OR
1 round trip per month x 10 miles ea.way x $0.585/mile GSA rate = $140/yr.
average of both methods: $94/yr.

total benefit: $292/yr

INDIVIDUAL BENEFIT:COST RATIO is $292 : $30 or approx 10:1

***

COST TO CITY
------------
zero (?).

BENEFIT TO CITY
---------------
Givens: 11,645 households generating 14,000 tons of garbage per year.
         present diversion (i.e. recycling) rate: 10%, or 1400 tons.

expected diversion rate due to single-stream recycling: 33%, or 4600 tons.
difference +3200 tons.
present tipping fee: $20 per ton, or a penny a pound.
reduced tipping cost to City due to diversion: $64,000 per year.

avoided cost of exceeding federal landfill diversion mandates: minimal  
today, may not be so forever

increase in trash/util fee per household: $5.00 --> $7.50 per month
increased fees to City: $2.50 x 11645 x 12 = $349,350 per year.

Monopoly money earned by householders: $198.00/year
assume 50% of Monopoly money is redeemed locally (may be 100%)
assume velocity of money is 3-7 turnovers per year, say 5 average.
assume 1/e "leakage" per turnover (could be only half)
sum series (1/e) + (1/e^2) + ... + (1/e^5) = 0.577
increased sales tax collection: 2.75% x $292 x 11645 x 5 x .577 = $270,004

total benefit to city: $683,354 per year.

CITY BENEFIT:COST RATIO is $683K : $0 or infinite

however, since reduced City operating expense should show up as  
reduced property tax, and assuming City income is split 95/05 all  
taxes vs. residental property tax, then reduced City expenses should  
work out to about $3 per year per household.

Note 1. It shouldn't matter if someone else is going to make money on  
your garbage, if you were going to throw it away anyway.

-- 
Robert G Kennedy III, PE
www.ultimax.com