Prepublication Copy
solid -waste metnagenaent
                      in
      small com.na\a.nities
                 This report (SW-28ts) was written by

                     Eric R. Zausner
          U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
                    Public Health Service
                 ENVIRONMENTAL HEALTH SERVICE
                 Bureau of Sofia* IVasfe Management
                        1970

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Single copies of this  publication  will be distributed  as  supplies  permit.  Requests  should  be

directed to the Bureau of  Solid Waste Management, Office  of Information, 5555 Ridge Avenue,

Cincinnati, Ohio 45213.
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                          -A.DST
                           for


solid -waste management


                             in


        small  oommianities



                          Eric R. Zausner'


      The increasing cosls and complexities of solid wasle col-
    lection and disposal require  new, more sophislicaled  man-
    agement techniques.  Because data on performance and the
    costs of operation and ownership are essential for the use of
    these management tools, an adequate information system is
    a prerequisite to effective management. Although cost ac-
    counting represents  only one part  of the  total  information
    system, its design, installation, and utilization can represent a
    significant step in the development of effective solid wasle
    management.
      Present information on collection and disposal activities
    and  on  associated costs is both  inadequate  and nonstan-
    dardized. The proposed system provides a guide to the type
    and quantity of information to be collected, its classification,
    and the  method of collection/ it is intended to be of use to
    municipal or private personnel  involved in  the  operation
    and ownership of solid wasle management facilities.
      Installation of a cost accounting system can aid the super-
    visor, city manager,  etc., in controlling the cosls and per-
    formance of ihe  operation, and also in  planning for ihe
    future.
      *Chief, Management Sciences Section, Operational Analysis Branch, Division of Technical
    Operations, Bureau of Solid Waste Management.

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                                                                            I
  The system described herein is designed for small com-                   |
munilies that collect and dispose  of the solid wastes gener-
ated in their jurisdiction. These communities, with popula-                   I
lions  below 25,000, will  find the system provides  adequate                   •
data without a cumbersome amount of paper work. Larger
communities may use the system also, although they may                   •
desire more information.  Because packer-truck collection
and landfill disposal is the combination most frequently en-
countered in small communities, the system was specifically                   •
designed to be effective  for these types of operations.
                     System Benefits                                        «
  Installing a cost accounting system has several important                   I
advantages.-
1.   The system facilitates orderly and efficient accumula-                   •
lion and transmission of  all relevant data. In fact, much of                   |
the recommended data is probably being collected already,
although  perhaps  haphazardly  and  inefficiently.  Hence,                   •
the added cost of installing the  system is minimal.                            •
2.   Reports  are clear and concise  and present only the data
required for effective control and analysis. Because the per-                   •
sonnel can complete and understand the reports, the system
can operate in a relatively  foolproof manner.                                 •
3.   Standard accounting classifications and terminology are                   •
used  to simplify the interpretation of results and their com-
parison with data from  previous  years or other operations.                   •
In turn, this allows analysis of relative performance and                   |
operational  changes.
4.   The system accounts for all relevant  costs of operation.                   •
5.   Accumulated data from ihe  system can over a  period of                   •
lime lead to standards of performance and efficiency.  These
standards can be used to control costs. They indicate which                   •
costs are high and the reasons. The supervisor of operations                   •
may then lake appropriate corrective action.
6.   The system includes automatic provisions  for account-                   •
ability. Cost control becomes more effective when the in-
dividual, functional activity or equipment  responsible for                   —
cost increases can be ascertained.                                             •
7.   Use of the collected  data helps in shorl-  and long-range
forecasting of operating and capital budgets.  More accurate                   •
estimation of future requirements  of equipment, manpower,                   |
cash, etc., is possible/ this, in turn, aids planning at all levels
                                                                            I
                                                                            I

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of management The dala  are also available for laler eval-
uation and analysis wilh the use of operations research tech-
niques.
3.  Wilh only  minor modifications, the system is  flexible
enough  to meet the  varying requirements of  communities
wilh operations of different size, scope, and operational pro-
cedures.
9.  Because  the system is designed specifically for  small
communities, the number of data collection and reduction
forms has been kept to a minimum to reduce paperwork.
             Cost Centers  and Cost Allocation
  Two general  types of costs are incurred by solid waste
management activities: operating costs and the  costs of  fi-
nancing and ownership.  Operating costs include labor, oil
and gas, parts and supplies, utilities, supervision, charges by
other departments, contractual  services, and  other  miscel-
laneous  expenses.  Labor costs  include direct wages,  over-
time pay, and  all associated fringe benefits.   Included  in
fringe  benefits are vacation pay, sick pay, group life and
medical  insurance, social  security payments,  and pension
contributions. Ownership  and financing costs are those as-
sociated  wilh ihe loss in value of fixed assets and the costs
of funds required to purchase and retain fixed  assels.  More
commonly, the terms depreciation and interest are used.
   Generally, most operational costs are expressed in the
terms mentioned above.  As operations become more com-
plex,  however,  a more sophisticated method of accounting
is required to facilitate analysis and control. To accomplish
this, solid waste management activities are assumed  to con-
sist of  several interrelated suboperations, each of which is
analyzed separately.   These suboperalions are usually de-
noted as cost centers because costs are accumulated separ-
ately for each of them. Analysis and control are simplified
if excessive costs  or inefficiencies can be Iraced to  a  func-
tional activity or area of the operation. Particularly in small
communities, where operations  include both collection and
disposal, cost centers  aid in delineating the functional areas
and their associated costs.
   For small communities, two cost centers, one for collection
and one  for disposal,  appear to collect adequate information
without incurring excessive accounting expenses. The Col-

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                                                                            I
lection cosl center accumulates all costs associated with ihe                  I
colleclion of solid wastes on ihe routes themselves and wilh
the hauling of these wastes from the routes lo the disposal                  •
site or sites. The Disposal cosl center accumulates all the                  |
cosls associated with the actual disposal of ihe wastes at ihe
landfill site.                                                                 •
  The operating cosls must be accurately and represenla-                  I
lively allocated lo the Iwo cosl cenlers. The allocalion of cosls
lo ihe cosl cenlers and the  relationship of these operating                  •
cosls and ihe financing and ownership cosls lo ihe lolal annu-                  '
al cosl has been illustrated (Diagram I). Although financing
and ownership cosls can be allocated to individual cosl cen-                  •
ters,  the  benefits do  not justify ihe  additional calculations.
For general analysis and  control, operating  cosls are suffi-                  _
cient for cosl cenler analysis. At infrequent intervals, when                  •
the addilional  data are required (for lease-buy decisions,
elc.), manual reconslruction  is easily accomplished.                           M
  The method of allocalion for each  type of operating cosl is                  |
as follows.  The labor cosl allocated lo the two cosl cenlers is
based on ihe number of employees and their associated cosls                  •
utilized in each cosl cenler.  Colleclion truck drivers and                  I
loaders have their associated cosls included in ihe Colleclion
cosl cenler. Scale operators  and iractor operators have  their                  •
associaled  costs assigned lo  the Disposal cost cenler.  Labor                  *
for repairs and maintenance would be assigned lo the cost
cenler that required the work. Oil  and  gasoline  could be                  I
directly  assigned to  the  equipment in the Collection and
Disposal cosl cenlers.  Parts and supplies would be charged                  _
directly to the equipment in  each cosl cenler.  Utilities would                  I
be directly assigned to the  two cost cenlers. General over-
head,  which  includes   supervision,  administration,  and                  m
charges from other  departments (payroll, accounting,  etc.),                  |
could be allocated equally lo each cosl cenler or charged on
the basis of the number of employees in each cosl cenler.                     •
  The sum of the cosls of these two  cosl cenlers is the lotal                  I
operating cost.  The  actual  system  is designed to  facilitate
the colleclion  and  later  allocalion  of  cosls  lo  these cosl                  •
cenlers.                                                                     ™
               Reports and Information Flow
  Information flows through the cost system by ihe use of                  •
reports, the vehicles lhal  transmit information  (Diagram II).
                                                                            I
                                                                            I

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             DIAGRAM  II

REPORTS AND INFORMATION FLOW
                    Wage rates, utility bills,
                    charges from other departments
rom pure
:cords or
jrvey at t
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nplemen












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Facility and
FORM 5



FORM 1

Disposal activity
FORM 2

Collection activity
FORM 3

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maintenance
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FORM 6



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The reporls can be classified as those thai are primarily used
lo collect data and those that are used to reduce and present
the data for effective management analysis and control.
Data Collection Forms
  Cost analysis and control through the preparation of peri-
odic summary reports cannot be  accomplished  without re-
cording all pertinent activity and cost information.  Data on
activities and costs not recorded at the  time they are gener-
ated are not retrievable at some later date.
  Weekly  Labor Record (Form 1).  The foreman or supervisor
records ihe labor activity daily.  One copy  is  forwarded
weekly lo  the payroll department for determining  either
weekly, biweekly, or monthly payroll checks. Another copy
is forwarded to the  accounting  department or used  by the
supervisor  for computing total  labor hours and assigning
these hours lo the various collection and disposal activities
and their related cosl centers.
  Daily Disposal Activity Report (Form 2).  All pertinent ac-
tivity at the disposal site is recorded on  this form.  The quan-
tities, sources, and  types  of solid wastes delivered lo ihe
disposal site and the routes from which il is  collected are
recorded on this form.  If cover material is delivered from
off-site, this may also be  recorded/  otherwise, the column
may be deleted.  The information is recorded  manually for
ihe entire  day. If the landfill has a scale thai automatically
records ihe weight data, that part of ihe form  would be re-
placed by the printed weight ticket. Each delivery is recorded
separately  by the weighmaster.  A second weighing of ihe
empty iruck may be taken, or ihe vehicle's tare  weight (as
determined by a licensing agency, etc.) may be substituted.
If no scales are available, estimates of  cubic yards  can be
substituted. Additional information on  equipment operation
is also recorded on the  bottom part of ihe form.
  Daily Collection  Activity Report (Form 3).  Each day ihe
collection vehicle driver records dala on the collection crew's
activity and performance.  Of particular importance is ihe
check list for equipment  operation. Many polenlial equip-
ment failures are routinely noled; this is an invaluable aid lo
the foreman in  scheduling equipment maintenance.   The
form also provides space for the data needed  lo  determine
total lime servicing routes and hauling wastes to the disposal

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1
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SIGNA
1
•Truck
ident.



|
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•

| Totals

HIRE.

Time
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| Equip.
ident.





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DAILY

Waste
source*















X

FORM 2
DISPOSAL ACTIVITY REPORT
DATF: / '

Route #
collected















X


Weight in















X

Weight out
(tare weight)















X

Amount received
Waste

















Cover material

















*Sources: R residential, 1 = industrial, C - commercial, etc.
LANDFILL EQUIPMENT UTILIZATION

Hours
in use






Hours
down






Miscellaneous
expense





Remarks (note type of expense, equipment
problems, and other important facts)





Instructions: To be completed on site by the scale operator. Bottom of form
is only to be completed on the last sheet used each day. Form to be forwarded
to the accounting department.
9 BSWM 1/70

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                                                                                                      I
                                                                                                      I
DAILY COLLECTION
Time in
Time nut


ACTIVITY REPORT
Mileage out
Mileage in




Driver:
Loader:
Loader:
Time start




Total weight
Time finish





Weight





Remarks
Route #





Nonproductive time
Hours





Cause





FORM 5|
Date / /
Truck #
Crew #
Net time
Net miles
I

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•
Gas purchased •
Check if abnormal:
Eng. temp. [ [ •
Oil press. | ^
Ammeter | 	 I •
Packer | | •
Brakes I ~~J _
Lights | | 1
Other | ]
Check if relevant
and report to supervisor: •
Personal injury
Automotive accident
Property damage
1 '
m i
n •
    Instructions:  The driver is to  complete this  form each day. "Time  out"  and
"Mileage out"  are  to  be completed  when the truck leaves the  garage in  the
morning. "Time in" and  "Mileage  in" are to  be completed at the end of the  day
when the truck is back at the  garage. When the truck reaches the  first route, the
time is noted in the "Time start" column and the route designation is also noted.
When the truck is full or the route is left for any reason, "Time finish" is entered.
Upon returning to the same route or another  (after  a trip to the  disposal site),
the next "Time start" entry is made. At the disposal site, the net weight of wastes
collected is entered.  Accidents, injuries,or  any equipment malfunctions are to
be  noted in  the  boxes provided and a  detailed  explanation given  in  the  "Re-
marks" box.
                                                                                          BSWM 1/70
                                      10
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 site, as well as ihe weights of waste collected. Data on acci-
 dents  and injuries are  also routinely noted.  Important data
 are recorded in the left and bottom margins for easy refer-
 ence and sorting.  Detailed instructions for completing  the
 form are included on the form.
   Repairs and Maintenance Record (Form 4).  Activities of
 the maintenance department and the costs incurred in main-
 taining each  collection and landfill vehicle  are recorded.
 One form is on file for each vehicle,  and entries are made
 only when maintenance  or repairs are  undertaken. Total
 costs for the department as well as the costs for each piece
 of equipment  are accumulated.  The  data are  needed  to
 assign the costs to the two  direct cost centers and to evaluate
 the efficiency  of individual collection and  disposal  equip-
 ment.
   Equipment and Facility  Inventory (Form 5).  The data on
 the costs of collection and  disposal equipment and the facil-
 ities (total costs as well as  depreciation and  interest) are  re-
 corded. The form should be completed when the accounting
 system is installed and updated only  as new  equipment is
 purchased, old equipment sold, or new facilities added or im-
provements made.
 Data Reduction and Presentation  Reports
   Reports 6 and 7 are completed  at less frequent intervals.
 These  intervals depend on the  type of  information trans-
 mitted. To be effective, certain types of control and analysis
 require more frequent feedback than other types.  These two
forms reduce the data collected in the previous five forms in
 addition to other  data  available to the accounting  depart-
 ment.
   Operations Summary Report (Form 6).  In  this report, the
 collection and  disposal activities and  their associated oper-
 ating costs are  summarized. As a cost control report, routine
and frequent preparation is critical; monthly intervals should
 be sufficient.  The accounting department prepares the report
 and forwards copies to both the supervisor and his superior
(head of the sanitation department). The  report  is particu-
larly useful for cost control,- total  unit cost,  as well  as unit
costs for the various cost centers, indicates where excessive
costs were  incurred.  In addition, various measures of effi-
ciency are presented to isolate the  cause or causes of high
                            11

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OPERATIONS SUMMARY REPORT
                                              FORM 6
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                PFRIOD: frnm
                                       to


Totals
Collection
cost
center
Disposal
cost
center

Factor
Total tons
Total operating cost
Total operating cost per ton
Labor cost per ton
Equipment operating cost per ton
Overhead cost per ton
Number of accidents
Cost per ton
Tons per direct labor hours
Equipment operating cost per ton
Average miles per hour
Tons per trip to disposal site
% Time equipment down

Cost per ton
Cover material per wastes (tons)
Tons disposed per labor hour
Tons disposed per equipment hour
% Time equipment down


Cost or quantity
for this period




















14
% Variance
from budget






X














% Variance from: •
Last period





















•
Same period
last year •



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x

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1
*
1

•
BSWM 1 70 •

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operating costs. The terms are defined on Form 6a.
  Total Cost and Revenue Summary (Form 7).  All the activi-
ties, costs, and revenues associated with collection and dis-
posal activities during the period are  compiled on this report
from the data available in  the Operations  Summary Report
(Form 6) and the Equipment  and Facility  Inventory Report
(Form 5). The combined operating, depreciation, and interest
costs represent the total cost of solid  waste  management ac-
tivities for the period.  The accounting department can com-
plete this form quarterly or semiannually and send it to the
head of the sanitation department or his equivalent.
                  Report Flow Summary
  The personnel  directly engaged  in  collection and dis-
posal activities complete  data  accumulation  forms daily.
These are transmitted periodically to  the accounting depart-
ment.  The accounting department collates  the information
received and adds additional information it already possesses
to complete  the summary report (Form 6) on  performance, ac-
tivity, and costs.  These forms are then fed back to the super-
visor for control purposes.  In addition, selected  summary
reports on total cost are complied and  forwarded to the  su-
pervisor and his immediate superior.
                    System Utilization
  Only with efficient and intensive utilization of the informa-
tion generated from the accounting  system and  forms can
the additional time, effort, and money required to implement
and maintain the system be justified.  The system's intensive
use promotes two major objectives: quality control and cost
control. Reduced costs must be accomplished without deteri-
orating  operating quality. Similarly, quality is interrelated
with the costs  of obtaining it.
  All the factors that affect the quality  and effectiveness of
the operations of a small  community can be translated into
costs. Cost control does not call  for economizing at the ex-
pense of quality. On the contrary, once a level of acceptable
operation has  been determined along with the  attendant
costs, the cost control system can help  the supervisor main-
tain that level of operation.
  Effective cost control requires timely  recognition of exces-
sive costs and identification of responsibility for the increased
costs.   Comparing unit cost with both the  current  budget
                             15

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                                                              FORM 6a
      OPERATING  COST CLASSIFICATIONS
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Labor costs                                                                   •
    Include all  wages at base pay, all  overtime pay, and
    labor fringe benefits.  Labor  fringe  benefits  include                     •
    group insurance, pension costs,  social security contri-                     ™
    bulions, vacation costs, etc.
Cover material costs                                                          I
    Include all  costs  for the delivery of cover material. If
    on-sile cover material is used, exclude this category.                       «
Equipment operating costs                                                    •
    Include oil,  gasoline, grease,  equipment repairs, and
    maintenance.                                                            •
Overhead costs                                                               |
    Include all utilities, supervisor's salary, building repairs
    and maintenance, liability and properly insurance, and                     •
charges from other departments.
                                                                BSWM 1 70
                         16
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and Ihe corresponding period last year helps indicate exces-                   •
sive cosls. The use of unit cost facilitates the analysis of costs,
independent of  changes in the level of activity.  The cost-                   •
center breakdowns help single out the responsible factor or                   |
person. This system allows both of these critical factors to be
determined/  corrective  action  may then  be  effectively                   •
initiated.                                                                    |
                            18
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