Jersey City is Trash

Literally, residents have been complaining for years about how trash-filled the streets are.  A big contributor is the sloppy performance of the garbage collection crews. The workers regularly shot-put bags and containers across the street and leave it littered in their wake.

Per the Department of Public Works (“DPW”) director, the vast majority of complaints that make their way to his office relate to this poor performance.  A few months ago at DPW’s annual budget hearing, the issue came to a head. It’s so bad that the council devoted the majority of the budget hearing discussion solely to this topic.

In this post we’ll walk you through (1) what has happened so far, (2) what the city has gotten right/wrong, (3) how they should improve their performance and (4) how the Accountability Agenda would probably have solved this problem years ago.

1.      First, What’s Happened?

• The council is complaining about the job the solid waste vendor (Regional Industries) is doing

  • Regional has been the city’s solid waste vendor since at least 2015.

  • In 2020, the city awarded Regional a ($15M per year) contract extension after Regional was the sole bidder in the 2020 solid waste RFP. This in spite of the fact that in awarding the contract, nearly every council member complained loudly about how bad Regional had been doing. The new contract runs through August 2025.

    • The DPW director speculated that the 2020 RFP didn’t draw more competition because area garbage haulers have a tacit agreement to collude by not competing (which would be highly illegal if true!)

• The council proposed as an alternative that the city take over garbage/recycling

  • The DPW director was worried that the startup costs for the city would be $14-15M and so didn’t seriously pursue the idea

2.      How Has the City Been Addressing this Challenge?

The Good:

• Both the council and DPW have recognized that there’s a problem

• DPW has homed in on the possibility of illegal anti-competitive behavior

The Bad:

• This issue shouldn’t come up at a budget meeting at the end of the year. The council has the power to call hearings with the city departments throughout the year.

• As with most budget meetings, only 3 out of 9 council members showed up

The Ugly:

• It sounds like since the contract was awarded, besides complaining, city officials have done near zero to improve things

• Even at the DPW budget hearing, the council failed to advance a plan beyond asking Regional to improve, which they’ve been doing since 2015 with only modest improvement to show for it

3.      OK, What Should They Have Done?

a.      Getting What We Pay For

The good news is that this problem should be fully within the city’s power to fix. To see why, think about how garbage collection happens for your household. The truck pulls up and idles nearby while a walking companion worker grabs your cans and launches them in. It generally takes, at most, a few minutes for the walking companion to get from the prior household to yours, lodge your garbage and move on, at which point they move on. For bigger buildings, the per household time is likely even lower.

Since the hauling team only needs to spend a few minutes per household, the per household labor cost of hauling can’t be that great. This tells us that the city should be able to afford to increase the price paid per household without too much pain. Paying more will allow Regional to add more haulers for each shift, which will let them spend a bit more time with each pickup to more carefully place the garbage into the trucks. The volume and persistence of complaints shows that there’s a lot of resident demand for improvement, so the council should feel quite confident that residents would support the extra investment (whether through raising additional taxes or by cutting an equivalent amount of other existing services).

Indeed, it should be obvious to the council that garbage hauling isn’t all that expensive when spread across all residents, so paying a bit more for a better result should be a no-brainer. The contract’s $15M annual expense costs each household at most $140 per year (or 9 hours of work for a minimum-wage worker per year). If we assume that labor costs form half of that expense (so, $70 per year), even doubling the hauling staff would only cost each household about $6 per month (or about one roundtrip PATH ticket per month).

b.      Medium-Term Strategy: Real Performance Pay Conditions

The next contract (let’s assume with Regional) should include both this financial sweetener to pay for more staff and performance conditions. In exchange for the city paying more, Regional should have to agree to penalties for under-performance. The city can have its sanitation inspectors make surprise inspections right after a Regional shift and count pieces of garbage per area for part of the route. If agreed-upon cleanliness targets aren’t hit, Regional’s pay-out is reduced. The rest of the world discovered the magic of incentive alignment long ago, it’s time Jersey City does too!

c.      Long Run Strategy: Study Internalizing Service

In the long run, it’s the city’s job to thoroughly investigate whether haulers are illegally colluding, and if so, to take legal action. At the very least, they should be able to call other area haulers and request they either place bids at the next RFP or explain why they won’t. The city should also study whether it should bring garbage hauling in house—and include an early cancellation right in the next contract if residents want to go this route. The $15M startup costs that the DPW director cited may be acceptable if they reflect a one-time cash outlay for equipment used over half a decade or more (such that the costs would only be $3M per year).

d.      A Sense of Urgency

Finally, this shouldn’t take a decade, as the city’s existing journey with Regional has. We should be able to resolve this well before the August RFP—including if households need to be issued better garbage bins. It would be incredibly disappointing if this isn’t fully resolved to residents’ satisfaction by then.

4.     How the Accountability Agenda Would Have Solved this Problem Years Ago

As we’ve noted elsewhere, you get what you reward for, so if you have a broken reward system, you’ll have broken resident outcomes. This is one of the key things the Accountability Agenda addresses by utilizing performance pay. The key problem in this case is that under the current city investment scheme, the DPW director isn’t rewarded for (i) identifying the weaknesses in the Regional contract as a key performance bottleneck or (ii) finding a solution to the problem.

How long would it have taken an adult to find the solution above if she was paid to find it? Not long!