April

5, 2012 The Honorable Donald G. Martin Chairman, Committee on Finance and Property City Hall Beverly, MA 01915 Dear Mr. Chairman, With the introduction and subsequent re-authorization of the quarterly trash fee in the city of Beverly, a clear precedent has been set and accepted, although perhaps begrudgingly tolerated is a better description for some, by residents and businesses to pay for curb-side trash pickup and sanitation through a combination of General Fund revenue and said trash fee. This scheme necessarily allows for the major fixed (cost of contracting with a provider for use of trucks and labor) and variable (incinerator fees linked to trash volume) components of the citys overall sanitation cost and also acknowledges the belief, rightful in my opinion, that curb-side trash pickup is a basic service that should be offered by a city and covered, at least in part if not in total, by the property taxes a resident pays. The trash fee, along with a significant effort by the citys residents to increase recycling and thus reduce the volume of waste sent to the incinerator, has been successful, in the short term, in reducing the reliance on General Fund revenues to pay for curb-side trash service and free those funds for other uses. However, I find it hard to support a change, let alone an increase, in the current fee absent fundamental changes to the funding scheme to ensure the long term sustainability of the Sanitation Enterprise Fund and without a clear understanding of the costs associated with a new, long term service contract which will not come until next year. Thus, I believe this City Council finds itself at a point where it can proactively create a long-term financing scheme in anticipation of the next contract that: 1. Creates incentive for the municipal government and the residents to both play a part in minimizing overall sanitation costs; 2. Does not create additional, unnecessary administrative burden with its implementation; 3. Stays true to the mandate that fee revenue must be no more than is necessary to pay for the cost of the related service; 4. Does not impose mandatory sticks upon users, but instead relies on tangible carrots to recognize residents and businesses in Beverly who have taken very seriously the need for increased recycling to reduce sanitation costs and encourage others to do more in the future. With these things in mind, below are potential changes to the trash fee ordinance that I believe would help provide for sustainable funding in the Sanitation Enterprise Fund, impress upon the city government the need to negotiate the best possible multi-year sanitation contract and impress upon the citys residents and businesses the continued importance of increased recycling to help minimize incinerator fees. It would also reduce the seemingly arbitrary nature of the fee amount.

1. Link sunset clause timing to sanitation contract expiration dates. This will encourage increased input from the City Council and community on negotiation and bidding of new sanitation contracts and encourage long-term planning and agreements. The current failure to link the decision on trash fees with the timing of potential sanitation cost changes created by a new contract makes the Councils bi-annual decision more about current budget needs than sustainable funding of the service. 2. Inclusion of a provision that sets the trash fee at a level where annual fee revenue during each year of the contract is equal to the contracted cost of curbside pick-up service plus of anticipated incinerator contract cost. The remaining sanitation cost would be subsidized by annual transfers from the General Fund, as is now the case. With this language in place, setting and adjusting the trash free becomes a matter of mathematics and not politics. For FY12, this approach would have called for approximately $1,700,000 in fee revenue, not far from the level achieved by the Mayors proposed modest increase with a very high likelihood that actual incinerator costs will be well below the contracted line item and create a scenario addressed in the next item. 3. Inclusion of a provision that earmarks surplus Sanitation enterprise account funds at the end of a sanitation contract period for use on road and sidewalk rehabilitation in the following fiscal year. This provision recognizes that there is a necessary tradeoff between the subsidy of sanitation from the General Fund and the alternative use of that money for other needs. Because incinerator fees can be directly reduced by increased recycling and composting, resulting in the need for a reduced general fund subsidy transfer, this change creates a clear and positive reinforcement that every item recycled and every new household and business that adopts recycling efforts leads directly to tangible savings that will be reinvested in improving city streets and sidewalks. I believe this will encourage a broad grassroots community effort to increase recycling rates by residents and businesses to collectively achieve these savings. Mr. Chairman, I hope that your committee will consider incorporating these recommendations into an improved ordinance that will best serve the people of the city and provide for a sensible, sustainable plan to pay for a service which is necessary and vital to maintaining a clean, beautiful city. Sincerely yours, Brett Schetzsle Ward 6 City Councilor Cc: Honorable City Council of Beverly Honorable William Scanlon, Mayor of Beverly Kathy Griffin, City Council Budget Analyst