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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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
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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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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).
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DIAGRAM II
REPORTS AND INFORMATION FLOW
Wage rates, utility bills,
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:cords or
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Facility and
FORM 5
FORM 1
Disposal activity
FORM 2
Collection activity
FORM 3
Repairs and
maintenance
FORM 4
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Operations
FORM 6
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FORM 7
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Reports —
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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
1
SIGNA
1
•Truck
ident.
|
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| Totals
HIRE.
Time
weighed
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| Equip.
ident.
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1
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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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
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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
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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
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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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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. |
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I
I
I
I
I
I
I
I
I
I
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