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The Real Cost of Managing Society’s Trash

Although most people don’t think about it, the management of solid waste is one of the most critical issues facing municipalities throughout the United States.

Challenges arise every day as society tosses out more and more wastes, the number of landfills available for use continues to decline, regulations grow and the cost of providing services increases. Financially and logistically, the management of solid waste is becoming ever more difficult.

Let’s first look at the challenge we face … you and I (and everyone else we know) toss out about 4.6 pounds of waste each day. That may not seem like much until you consider that there are about 310 million people living in the United States. All of a sudden, that tiny 4.6 pounds per person per day just grew to a massive 1.4 billion pounds of waste! More amazingly (maybe even scary) is that fact that tomorrow, society will toss away another 1.4 billion pounds of waste.

Managing society’s waste is no simple task. It’s not cheap either. When residents and municipalities see their garbage bills rise, they need to understand the complete and complex operation that is required to safely manage society’s trash and realize the regulatory environment that affects the waste industry and contributes to rising cost of waste collection, disposal and recycling.

Over the past two years, we have seen dramatic increases in the cost of providing basic waste collection and recycling services. For example, a brand new waste collection vehicle can carry a price tag of more than $250,000. The cost to fuel, lubricate and maintain vehicles has also increased. And, the costs don’t end there. Our business is labor intensive and will not be outsourced or off-shored. As wages and insurance costs grow, so does the cost of delivering services.

But perhaps the greatest costs are incurred in an area that most people never see — the landfill. Today’s landfills are complex facilities with multiple environmental protection systems in place to ensure waste is safely contained. Landfills are also heavily regulated and the cost of operating a site includes not only receiving and burying the waste today but also includes the future management of the waste for many years to come.

Even the collection vehicles that we operate are heavily regulated by the Department of Transportation, Environmental Protection Agency and others. And before anyone accuses me being anti-regulation, I want to be perfectly clear … I support strong regulations to protect and enhance the quality of the environment. I embrace regulations that are fair and make sense. But, I have also seen taxes and regulations that needlessly add cost to our services and provide no value to our customers and do nothing to protect the environment.

People need to be aware of the impact that regulations have on the cost of services they receive.

The bottom line is that the cost of trash collection and recycling service will continue to increase. Tough federal and state regulations governing solid waste disposal, more rigorous requirements for truck emissions, new taxes, increased labor, higher fuel and insurance costs, and more expensive equipment are just a few of the realities we face today. But even with all the additional costs, residential trash collection and recycling services is a great value. Indeed, for most U.S. households, the cost of recycling and waste collection is just a fraction of what is spent on utilities. Compare the cost for managing trash to that amount which Americans spend on non-essential products and services such as cable TV and Starbucks coffee and the best deal of the day is found with your trash man (or woman).

Waste collection, recycling and proper disposal are basic essential services that have long been recognized as a critical part of a community’s infrastructure. Is the work that we do taken for granted? Sure. We understand that most people just want their waste to go away — to never be seen again. Fortunately, we can make that happen. But, the reality is that the cost for our magic disappearing act is getting more and more expensive.

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Jim O'Connor serves as the chairman and chief executive officer for Republic Services. He joined the company in 1998 following a successful 26-year career with Waste Management. He was named one of the best CEOs in America by Institutional Investor Magazine every year since 2005. Mr. O'Connor plans to retire from Republic at the end of 2010, but will remain on the board of directors through June, 2011.

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  • Carl Quintanilla is an Emmy-winning reporter and co-anchor of CNBC's "Squawk on the Street," broadcast live from the NYSE.