Wednesday, December 03, 2008

McBride: Trash Irregularities Abound

(I've added links to the photographs)

Matt McBride:

You are likely aware of the recent problems between the New Orleans City Council and the Sanitation Department. At the center of the dispute is an attempt to determine which houses are actually getting serviced by the city's three main garbage contractors, SDT, Metro, and Richards on a month by month basis.
A couple of weeks ago, the Sanitation Department handed over Microsoft Excel address lists from Richards and Metro to the City Council (no SDT information was submitted). Stacy Head's office compiled a memo summarizing preliminary findings after an examination of the data. It's attached, and it provides good baseline information like rates the companies charge and how many houses they were charging for at various times over the length of the contract.
I have also received the monthly house count spreadsheets for October, 2008 for both Richards and Metro, as well as the May, 2007 sheet for Metro. I spent a lot of time over the past few days cleaning the three sheets up, and then analyzing the results. They are very interesting...
Duplicates
While media accounts and and city officials have simply counted the number of rows on these sheets and considered that equal to the number of houses, I found that was false. In fact, there are thousands of duplicate addresses buried within these lists. This is found when one cleans up the addresses and sorts them properly.
The problems with duplicate addresses seem to be far more severe with the Metro contract than with the Richards one. I analyzed the lists to isolate unique addresses. Here's what I found;
Metro, May 2007, 40,110 rows, billed for 40,000, actually 38,835 unique addresses
Metro, October 2008, 45,626 rows, billed for 45,336, actually 43,592 unique addresses
Richards October 2008, 64,101 rows, billed for 63,000, actually 63,600 unique addresses (it appears they are underbilling the city, but read on...)
So if one just looks at the number of rows compared to the number of billings, it would appear the city is actually getting houses serviced free. However, when one takes into account the inflating effect of duplicate addresses on the spreadsheets, it appears the city is paying money they shouldn't.
In October, 2008, there were about 2500 duplicate addresses between the two companies, including some addresses which appeared four times. Here's the details:
Metro May 2007:
1265 duplicates (3.2% of unique addresses)
9 triplicate addresses
1 quadruplicate address (4319 Chartres, Apt B)
Metro October 2008:
2014 duplicates (4.6% of unique addresses)
18 triplicate addresses
2 quadruplicate addresses (4319 Chartres, Apt B, and 13411 Curran)
Richards October 2008:
484 duplicates (0.76% of unique addresses)
16 triplicate addresses
1 quadruplicate address (2723 Jackson)
As the City Council memo indicates, the billing rates for Metro are $18.15 a residence. Theoretically - if the city can find a way to recoup these funds - it appears the city paid an extra $23,000 in May, 2007 and an extra $36,500 in October, 2008 to Metro. Using an average of these two numbers ($29,750), that would mean an average estimated overbilling of $375,000 per year due to duplicate addresses on Metro's contract.
What is noteworthy regarding the Metro duplicates (besides the large amount of them), is that 665 addresses that only appeared once on the May, 2007 list then became duplicate addresses on the October, 2008 list. Additionally, all but six of the 1256 duplicates on the May 2007 remain as duplicates on the October 2008 list. The remaining 99 duplicates on the October 2008 list were brand new duplicates that month, when compared to the May 2007 list.
Since the city paid for 600 fewer unique addresses than Richards says they collected from in October, 2008, it seems that the problem of duplicates on the Richards contract did not affect payments. But there are other problems with the Richards contract, as detailed below.
Multiplexes
For multi-unit buildings with more than four units, the owner is required to contract with a private trash contractor rather than signing up for the city's service. Such places should not be showing up on the lists of residences serviced on these municipal contracts. But they are.
There's more of this irregularity on the Richards contract than on the Metro one, and it only appears to be a few instances. But they are obvious.
On Richards, I found the following more-than-four-unit properties getting billed in October, 2008:
418 Pelican (eight-plex)
1015 Washington (appears to be six-plex, and - oddly - owned by the same person as 418 Pelican, a William W. Benson)
3351 Kabel (what appears to be a commercial multiplex property)
3820 3rd (six-plex)
3214 Diana (nine-plex) - I've attached a picture of this place from Google StreetView with 7 Richards cans out front. If you go on Google Maps and search on this address, and then click the little guy to see it in StreetView, you'll see an 8th can against the building. All 9 units actually show up on the Richards list.
In total, there are 35 "buildings" on the Richards list apparently receiving five or more cans, though not all have five units or more like those examples above. Some are fourplexes with duplicate addresses in individual apartments. Others are legitimate, and are artifacts of odd address assignments by the city. For example, there are 16 cans shown as assigned to 1 St. John Court. But that's because all the houses in that Bayou St John cul-de-sac have the same number address, but use letters to distinguish themselves.
Temporary trailer parks
This was one of my oddest findings. I discovered that Richards is still billing for temporary trailer parks as recently as October, 2008. It is unclear if trailer parks were even allowed to receive city trash cans under the contract. However, that question seems moot, because Richards continues to bill for them on the October 2008 list, even though (I believe) all these parks were shut down months ago. The addresses are:
Trailer park at 1605 Horace and 3220 Lawrence (trailers are all gone) - Richards appears to have been double billing this place, since both addresses are at the same corner. Looking at this place on Google Maps StreetView shows it as an empty lot when the StreetView van went by (last summer I believe). I have attached a screenshot of this. In the lower right corner, you can see the even older overhead shot from Google Maps which shows the trailers when they were there.
Trailer park at 2379 Rousseau (picture attached of Richards cans in front of trailers - note Google StreetView van passed by in 2007, so this picture is a historic document - all the trailers are now gone)
Trailer park at 9018 Dixon (picture attached of Richards cans in front of trailers - note Google StreetView van passed by in 2007, so this picture is a historic document - all the trailers are now gone)
Demolished properties
In response to an order from a federal judge, on November 13th the city finally began issuing lists of properties it has demolished and for which it received FEMA reimbursements. The latest version of the list was issued on November 26th. It covers demolitions performed by the city's contractor, DRC, between December 2007 and November, 2008 and can be found here:
This list is the most authoritative list of city-initiated demolitions, since it includes the actual date a house was demolished. I cross referenced this list against the Metro and Richards sheets for October, 2008. Here's what I found:
Metro: 67 properties with demolition dates between December 1, 2007 and October 31, 2008
Richards: 33 properties with demolition dates between December 1, 2007 and October 31, 2008
My research indicates that the rebuild rate on demolished lots is about 10 to 15 percent, meaning that the vast majority of these 100 lots are likely still empty, but the city is getting billed for trash collection at them.
I also cross referenced the Metro and Richards October 2008 lists against four other types of demolition-related lists:
a) Properties which have appeared on one of the 10 Imminent Danger of Collapse lists from September 15, 2007 until July 17, 2008. Imminent Danger of Collapse (IDC) properties are those targeted for demolition by the city because they are about to fall down, or have already fallen down.
b) Properties which have appeared on one of the 22 Imminent Health Threat lists issued by the city from March, 2007 until November 20, 2008. Imminent Health Threat (IHT) properties are those targeted by the city for demolition because they are ungutted, unsecured, have tall grass, or some combination of the three. They are not in as bad a shape as IDC properties, but they are extremely unlikely to be occupied and receiving trash service.
c) Properties which received demolition permits for anyone - private owners or the city's or Corps of Engineers' contractors - during the term of the contracts - from January 1, 2007 until October 31, 2008
d) Properties which received any demolition permits since Katrina.
Here are the results:
IDC properties
Metro - 11
Richards - 9
IHT properties:
Metro - 181
Richards - 90
Demo permits from 1/1/07 to 10/31/08:
Metro - 607; including 34 duplicates
Richards - 191; including 18 duplicates
Demo permits from 8/29/05 to 10/31/08:
Metro - 1284; including 85 duplicates
Richards - 365; including 29 duplicates
While appearance on the IDC or IHT lists, or even the existence of a demolition permit, does not necessarily guarantee that the property is gone, or unoccupied, or otherwise unsuitable for garbage collection, they are strong indicators of that unsuitability. When one adds in the estimated rebuild rate of 10-15% on demolished lots, it seems clear there seem to be very many questionable properties on both Richards' and Metro's address lists.
Conclusion
There are many irregularities in the Richards and Metro address lists provided to the City Council. While at first blush it would appear that both firms are actually underbilling the city, it would appear Metro is definitely overbilling, and Richards is borderline.
Among the irregularities are:
- thousands of duplicate addresses being counted in the billing totals,
- billing the city for apartment buildings with more than four units, commercial buildings, and non-existent trailers (even double billing a trailer park in one case)
- billing the city for properties that have been demolished, targeted for demolition by the city, determined by the city to be in imminent danger of collapse, or which have had demolition permits granted to them.
With this many irregularities, it seems the skepticism some have expressed over the contracts' cost effectiveness is justified.
Best regards,
Matt McBride

Here is a link to the helpful preliminary report from Stacy Head's office.

Is a real municipal department of sanitation out of the question? Why doesn't the city own trucks or employ a workforce? It doesn't really seem like it's been particularly cost effective to go the selfish contractor route.

Certainly one place to make a change is at the top.

5 comments:

Anonymous said...

This is wonderful work on the part of Matt McBride and you. And it's not rocket science. Why couldn't someone at the City produce this analysis? (I know, I know-- because they don't actually want to.)

E said...

This was all Matt. I can't take any credit for this.

bayoustjohndavid said...

The 2006 contracts call for private collection at any building with more than four units -- the ordinance was changed (some might argue clarified) after the contracts were signed BTW. If any of the companies have private contracts with the owners of the multiplexes and they're billing the city, it seems like a pretty clear cut case of fraud. If they're billing the city, but not the owner, it may not be deliberate fraud, but I'd guess that it's still costing the city anywhere from six to twenty-two dollars per apartment, or garbage cart, per month.

Despite the claims made by the person whose inability to communicate gives the misleading impression that she's corrupt, the old sanitation ordinance limited the amount that would be picked up to about four bags, but I don't believe the ordinance said anything about public/private pickup based on the number of units. Most fourplexes put out their garbage normally, but I assume they had the $12 sanitation fee on their water bill. I would assume that building large enough to be required to pay for private collection would not be required to pay the fee. The ordinance that was passed in late 2006 or early 2007 specified that that buildings with four or more units would not ave garbage pickup provided by the city. If that clause was in the old ordinance, I know that nobody paid attention when I lived in the Quarter in the nineties, but I didn't see it when I looked. After the new ordinance was passed, most people in four-plexes continue to put out there garbage normally, but like I said, I assume that the $12 is on every water bill in those buildings. Richards bills the city $22 for each cart at each of those buildings, Metro bills $18 per cart, but the city bills $12 per water meter. The city agreed to pay the difference on buildings with less than four units because the administrator decided that trucks that go ping were that important to the city's recovery, but the new ordinance (which was needed to make the contracts work in other ways) specified that four-plexes and larger would be required to contract for private pickup. If a fourplex has only one or two meters, but three or four carts, there obviously some extra cost to the city even if there's no deliberate fraud.

Fourplexes aren't very big. Other than to make billing easier, I really don't see why the city should pay part of the exra cost for residents of doubles, but not fourplexes. With large buildings, it's probbly less expensive to arrange for private collection. I've been curious about what would happen if the city tried to enforce the fourplex rule. At the very least, I would expect the owners of those buildings to sue to have the sanitation fee removed from their water bills.

The numbers given are approximations and I'm not 100% sure about changes to the ordinance -- if I had time to look it all up, I'd do a blog post, but it looks like a big billing mess. Also, the tipping fee issue seems to have been forgotten. Two years ago, the reporting gave the impression that the city was going to start covering the landfill fees when it hadn't before. I'll have to check on that, but if a large per centage of the city is going to be paying for private collection, the payment of landfill fees will be something to keep an eye on.

mominem said...

Great work. All someone at City Hall had to do to was make this information availible.

Can someone post the spread sheets to google docs?

I'd bet more discrepancies can be found by people checking their own neighborhoods.

mcbrid35 said...

The contracts themselves specify that pickup is confined to residences and small businesses. Residences are defined as properties with no more than four units. Small businesses are defined as businesses that generate no more than 90 gallons of waste per trash pickup period (i.e. each week).