For the umpteenth time a garbage fee is being floated for City of Houston residents to help address the City current financial exigency. However, it is unlikely that a garbage fee will make any meaningful difference in the City’s finances.  Here’s why.

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The City currently collects a small percentage of refuse that Houstonians generate each day. This is because the City does not offer collection services to apartments or businesses, which must arrange for their own garbage collection and disposal. The City only collect garbage for single-family residences. According to a 2021 plan¹ produced by the City’s Solid Waste Department, single-family residences only generate about 18% of the City’s refuse. (See p. 11)

The City claims to serve 390,000 homes. But according to the Census, Houston has about 470,000 homes. The difference appears to come from various neighborhoods, mostly affluent ones, that have opted to have their garbage collected by private contractors. The City subsidizes neighborhoods that contract with private contractors by reimbursing them $6 per month, per home. In 2016, former Mayor Turner said that about 48,000 homes were subsidized by the City.

The City currently is scheduled to collect regular garbage and yard waste once a week, recyclables every other week, and heavy trash and tree waste every other month. All pick-up is at the street curb. (See p. 10) The City estimates the cost of providing this service is $18.17 per month, per home. (See Table 2-5, p. 15)

I have checked with a number of neighborhoods that contract for their garbage collection. The monthly per-home cost ranges from $15 to $34, depending on the service level. Many neighborhoods have opted for higher levels of service, including more frequent pickup and “backdoor” pickup.² In some neighborhoods, recycling pickup is not offered, and instead, residents must take their recycling to a collection site.

A critical difference between the City’s service and that of private contractors is reliability. The reliability of the City’s service is, in a word, awful. The City has struggled to maintain its collection trucks and to hire and retain collection personnel. For many years, there have been plenty of media reports about garbage sitting on the curb for days.  From what I am told, the failure to pick up garbage is the top 311 complaint.  In contrast, every neighborhood I talked to told me they have excellent service from their private contractor.

The 2021 plan recommended implementing a garbage pick-up fee of $20-25 per month and a “Clean City Fee” of $5.61 per month on all residences, apartments and businesses. The Clean City Fee would pay for operating the City’s hazard waste and electronic recycling drop-off sites, illegal dumping enforcement, and other miscellaneous waste- related expenses.³ (See p. iv)  The report estimates these two fees would bring in about $120-$140 million in new revenue annually.

However, I think it is highly unlikely to do so because there will likely be a very significant movement by neighborhoods to private contractors. About 75- 80% of residents have been willing to put up with the City’s dreadful service because, well let’s face it, it is free. However, once residents must start paying for the service, why would they do so when they can contract for private collection that will almost certainly provide them with improved and more flexible service?

It will also likely be cheaper. The closest comparable service I could find in the area, to that offered by Houston, is The Woodlands. The Woodlands just renewed their contract with Waste Management for $17.41 per home, per month. The pick-up service is slightly more frequent than the City's and there are some miscellaneous charges that add about another dollar. So, that is already below the $20-25 fee suggested by the 2021 plan.

But, as I previously mentioned, the City currently subsidizes private pick-up by $6 per month. So, if a neighborhood can contract for service at around $18 month, its cost after the subsidy would be about $12 per month or about half the cost of having the City collect its garbage. That is pretty much a no-brainer – better service at lower price.

The City could end the subsidy to make its service more competitive. But when Turner attempted to do that in 2016 it set off a political firestorm and he backed off the proposal. The political blowback from just implementing a new garbage and Clean City Fee is going to be significant already. If the subsidy is eliminated at the same time . . . well, let’s just say it is going to be ugly.

There is also the issue of equity. This is interactive map plots the garbage service for every residence in the City. You will see that it is primarily the affluent neighborhoods that already contract for private collection. The neighborhoods most likely to organize and arrange for private collection after a garbage fee is imposed will also be more affluent neighborhoods with active homeowners’ associations.

The result will be that the only poorest, least organized neighborhoods will be stuck with the City’s awful service at a higher cost. In other words, the poorest neighborhoods in the City will be shouldering most of the cost of bailing out the City financially.  The result would be incredibly unfair and regressive.

I truly appreciate the financial mess that the Whitmire administration has inherited. There are some obvious things that can be done like clawing back more of the City’s sales tax it has given to Metro and reforming the TIRZs.  But unfortunately, there are no easy answers.

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Note 1 – The 2021 plan is very comprehensive and contains a lot of data on the Solid Waste Department and waste disposal generally. There is a great deal of comparative data on other cities. There is one fundamental flaw in the report, however. It relies on a 2018 HGAC population projection which shows the City growing to 3 million by 2040. There is a widespread consensus that those projections are far too optimistic. The actual population growth is already over 200,000 behind the projection. The HGAC demographer recently told me they will be issuing a new projection later this year which will show much more tepid growth. Nonetheless, the plan was very professionally done and is a great resource. While I do not agree with some of its conclusions, I highly recommend reading the complete plan for anyone seriously interested in this subject.

Note 2 – Some neighborhoods do not like the appearance of garbage cans sitting on the street and arrange for them to be picked up in the rear of the residence.

Note 3 – There are a number of legal and operational issues around the implementation of a “Clean City Fee” but those will have to wait for another day.

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