City of Chicago Proposes Solid Waste Removal Fee

October 22, 2015

The City of Chicago’s FY2016 budget proposes to implement a monthly solid waste removal fee of $9.50 on households, which is projected to generate $62.7 million in new revenue.[1] Currently the City of Chicago spends approximately $244 million per year on solid waste removal services.

The Chicago Department of Streets and Sanitation currently provides solid waste removal services free of charge to approximately 600,000 households residing in single-family homes and apartment buildings of four units or less.[2] Chicago, New York and Boston are the only three major U.S. cities that fully fund residential waste removal services from general fund revenues and impose no charges on citizens.[3]

The Civic Federation supports Mayor Emanuel’s proposal to implement a new household solid waste removal fee. The proposed monthly fee of $9.50 that approximately 600,000 households will be charged is a reasonable user fee tied directly to a service currently funded through Corporate Fund revenues. The solid waste removal fee is one example of a user fee tied directly to the service being provided and has been broadly used by many municipalities throughout Illinois and the United States.

Many of the suburban municipalities in the Chicago area and a majority of other major U.S. cities already impose some form of user fee tied to the removal of residential solid waste. According to the U.S. Census Bureau, in FY2012 solid waste revenues ranged from 4.0% of waste removal expenses in Houston to more than 95% of expenses in Dallas, Los Angeles, Phoenix, San Antonio, San Diego and San Jose.^[4] The City of Chicago’s proposed monthly fee of $9.50 on approximately 600,000 households will recover approximately 25% of the $244.4 million in expenses related to waste removal services provided by the Department of Streets and Sanitation.

Since taking office in 2011, Mayor Emanuel and the Chicago City Council have made great strides in reforming the way the City provides waste removal services to its residents. In 2013, Mayor Emanuel successfully transitioned the entire city’s waste removal services from an inefficient ward-based system to a grid-based system, which resulted in $18 million in savings utilized to expand recycling citywide. The City’s grid-based system has reduced the average daily refuse collection truck deployment from 352 trucks to 317.[5] In 2014 the Department of Streets and Sanitation made additional adjustments to the grid-based system, which further reduced average daily truck deployment from 317 trucks to 310. The City plans to make additional adjustments in 2015 that will reduce the average daily truck deployment to 292 trucks.[6]

On July 29, 2015 the City Council passed an ordinance that repealed the “grandfather clause” for approximately 1,840 multi-unit buildings with five or more dwellings, ending the practice of providing free waste removal services by Street and Sanitation employees and transitioned those units to a private scavenger service.

In the Civic Federation’s analysis of the City’s proposed FY2016 budget, the Federation recommended that once the new fee for waste removal services is established the City should explore methods to more equitably impose the garbage fee to Chicago residents by possibly tying the fee to the number of units in each building or the volume of waste disposed of by each property classification.

Based on legislation that was introduced to the City Council Finance Committee, the new fee will be imposed at $9.50 per dwelling unit. The chart below displays the fees imposed by selected suburban municipalities in Cook County. On October 20, an amendment to the revenue ordinance was added stating that the $9.50 fee will not be subject to an increase until the year 2020.