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If valid comparisons are to be made between public and private enterprise methods of <br /> refuse collections some equitable basis must be established which takes into account <br /> all variables involved. Total annual cost to the customer is obviously important but <br /> it can be misleading unless the level of service is also considered. Differences in <br /> collection frequencies, points of collection, sanitation appearance standards and <br /> classes of refuse included must be accurately evaluated. All expenses must be included. <br /> Municipal accounting procedures sometimes fail to charge overhead costs such as office <br /> space, management salaries , fringe benefits and assistance from other staff departments <br /> such as attorney, personnel and finance. Some do not include interest on invested capital <br /> and equipment depreciation. It is therefore very difficult to compare costs between <br /> agencies who collect their own refuse and those who do it through private enterprise <br /> because total costs are generally not included in such a way that it can be readily <br /> extracted from the agency's budget. <br /> Many smaller refuse collection firms have been acquired by a group of large companies <br /> and the annual earnings of the top four are shown in the following tabulation: <br /> Revenues in Millions of Dollars <br /> Name of Firm 1974 1973 <br /> Browning-Ferris Industries $312.1 $264.2 <br /> SCA Services 166.2 122.8 <br /> Waste Management - 158.4 132.5 <br /> Sanitas Services 106.0 99.1 <br /> In some ways this is an advantage to the solid waste field because the larger firms <br /> are well financed. They can afford to do their own research and development and <br /> bring in new professionalism and innovative management to this field from the private <br /> sector. Our present contractor, Great Western Reclamation, is a subsidiary of SCA <br /> Services headquartered in Boston. <br /> Americans annually spend about $4.5 billion on disposal of solid waste. As the <br /> population of this country continues to increase so also will the quantities of solid <br /> waste material to be disposed of continue to increase. The time is coming when managing <br /> solid waste will be though of in terms of mass collection and disposal . No doubt this <br /> trend has brought about the large solid waste combines. The collection process represents <br /> about 75% of the total cost so this phase of the solid waste disposal cycle exceeds <br /> $3 billion annually in the U.S. <br /> -A) <br /> X42€60 �— at:c� P <br /> Ronald E. Wolford V Dennis Yata <br /> Director of Public Works Management Ana st <br /> Attachments: Exhibits A, B, C and D <br /> 4 <br />