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

[Pat Imperato]

Thanks Robert.? This is good info.? However, I lost you on the "velocity of money and leakage".? Can you provide my addled brain with a little more explanation.? Thanks.

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.?



Pat Imperato
131 Whippoorwill Dr.
Oak Ridge, TN 37830

865-272-3451 h
610-888-0456 c


-----Original Message-----
From: Robert G Kennedy III, PE <robot at ultimax.com>
To: eqab-list at discoveret.org
Sent: Thu, 4 Sep 2008 6:58 pm
Subject: [EQAB-list] quick & dirty cost:benefit analysis


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?
?
?
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