Urban cleanliness costs: impressive gaps between cities

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An analysis of the financial information published on the websites of Swiss and European municipalities would not help. The presentations and levels of detail are too different from one accounting system to another. The costs of urban cleanliness, embedded in all activities, are not identifiable.

Does this mean that this question is of little importance? Far from it — we believe it is fundamental. Quality financial information on the issue of urban cleanliness would make it possible to agree on the "contract" between elected officials, administration and citizens. This would make it possible to determine whether the services offered meet the demand and needs of the citizens. Without it, discussions will be limited to annual budget discussions as well as investments. The budget envelope will flow from previous years, give or take one or two positive or negative changes. These differences, as well as the investments, will be discussed without putting all the benefits and the budget into perspective, or even compared to those of similar cities.

It is also an important steering tool for the administration and those in the field. It enables choices to be made on the services provided by the municipality and those that will be outsourced. It provides quantified elements on the adequacy of resources for the mission and the optimisation of these resources. How can the operating costs of a fleet of vehicles be controlled? Should in-house maintenance be provided? Are service contracts a profitable alternative? Is it beneficial to extend the use of end-of-life vehicles? What are the costs of vehicle downtime? The work of teams represents the major part of both the services delivered and the costs of cleanliness. The optimisation of these processes and the commitment of these resources would, if properly quantified, make it possible to improve recognition of work quality, the valuation of positions and working conditions.

The management of urban cleanliness is therefore a complex task. In a context where pressure on the urban environment is increasing, the road network must manage its material resources (investments, maintenance) and its teams, as well as the expectations of taxpayers and politicians. In such a situation, a private company would define its objectives and then optimise all of its resources (investments, operating costs, optimisation projects, etc.) to provide the expected services. Detailed financial information is necessary to assess the scenarios and to make informed choices with regard to the objectives to be achieved, in order to optimise the whole, and then to manage the execution. Annual budgets and investment requests, which seem to be the main instrument of communities, only provide partial, insufficient information.

The different possible approaches to assess the cost of urban cleaning

Reliable and detailed financial information on the costs of cleaning would therefore make it possible to agree on expectations and on the adequacy of resources, then to manage the implementation and measure results. This data does not currently exist. However, cities know in detail the costs associated with the collection and recovery of waste. This part of their activities is governed by the principle of taxation (or the "user fee" according to the polluter-pays principle), for which the services must legally correspond to the costs generated, which constrains the public accounts to identify them. A similar approach would therefore also be possible for cleanliness.

To obtain this information, prior work on accounting methods is necessary. Standardisation of this approach would also make it possible to generate this information at a lower cost and to compare cities with each other.

Several approaches are possible to measure the costs of cleaning:

• Field indicators (or "bottom-up"), where the commitment costs of resources are assessed individually (for example, hourly costs of machines and personnel) and then aggregated across the entire organisation. This approach is often developed by departments in order to manage and optimise their operations. It requires continuous efforts to keep the indicators up to date. Although it is a valuable tool for users, its use to compare organisations with each other is difficult, because the methods differ (definition of the cost perimeter, the level of staff entering into the rate calculations, allocations or not of certain fixed costs, depreciation, etc.).
• Public accounting (or "top-down"), where activities relating to urban cleaning are allocated to the corresponding cost centres.

The latter approach would have the advantages of starting from exhaustive accounting data and providing useful indicators without too much additional work, provided it is standardised in public accounting methods, which is not currently the case. However, the municipalities of the same country, or even more so of different countries, show significant differences in this respect. Converging towards a harmonised system implies, first of all, defining what does or does not fall within the scope of what is counted under the concept of "urban cleanliness".

The scope: what does or does not enter into the costs of urban cleaning

Activities around the maintenance of urban space, in summer and winter, and waste management are distributed differently depending on the city. Defining comparable measurement methods requires identifying these different activities and delimiting their scope:

• Waste management: These activities include the collection of solid waste (households and small businesses — industrial waste being the subject of a separate stream), their recovery (sorting system, in particular in municipal waste reception centres) then their treatment, incineration or elimination. Although in some cities the collection is made by the same resources (staff, machines, premises) as those implemented for cleanliness, which can make sense in terms of optimisation of resources, their accounting must remain separate in order to ensure the traceability of costs vis-à-vis taxation.
• Management of green spaces: Some activities of the management of green spaces overlap with those of urban cleaning, and their attribution to one or the other service will be specific to the city. Regarding their accounting, we propose to consider activities for maintaining cleanliness in parks (cleaning, management of litter bins) as well as those around trees in streets or squares, within the scope of cleanliness costs, regardless of the department that will carry them out.
• Wintering: In the majority of cases, road resources are sized for winter management, which follows strict regulations. Summer cleanliness staff will be assigned to winter maintenance and vehicles are often adapted for flexible use in summer and winter. Consequently, we propose to count the resources that are used in winter as in summer in the scope of urban cleanliness, which makes it possible to compare cities with each other. Means used for winter maintenance only (snow removal tools, road salt, etc.) will not however be attributed to cleanliness.
• Urban cleanliness: The cleaning of public spaces mainly includes the sweeping, washing, emptying and maintenance of street litter bins, cleaning of public infrastructure, cleaning of tags, graffiti and other murals, removal of unauthorised posters and everything related to littering in general. Street furniture, communication and awareness-raising actions related to cleanliness are also part of the costs of cleanliness.

The costs of urban cleaning then correspond to the costs — and sometimes to the income — of the wage costs of the workers in the field (salaries, bonuses, allowances), clothing, materials and resources, machines, rents, acquisitions, depreciation, subcontracting, communication, repayment of loans and cleaning income which fall within the defined scope.

A proposal for standardisation

In Switzerland, a harmonised MCH2 accounting model has been gradually introduced since 2008. It follows an initial effort to standardise accounting systems between municipalities, cantons and the confederation (MCH model). The aim is to meet "the requirements of the overall management of finances and the needs of management according to the principles of business economics at the administrative level". The new model is inspired by the rules of the private economy, with a balance sheet, a profit and income statement, a cash flow statement and notes.

According to Bernard Dafflon, Emeritus Professor at the University of Fribourg and expert in public finances, the scope of the MCH2 model could be significantly improved if the functional classification was adapted to trace expenses related, in particular, to waste management, urban cleanliness and green spaces according to the definition and within the limits of the scope described above. This would make it possible, at no great additional cost, to provide local authorities with management tools and to simplify case law for pricing. Proposals for the development of accounting models were made by Professor Dafflon at the Conference of Cantonal Supervisory Authorities for Municipal Finances (CACSFC), in the direction of cost accounting for cleaning costs.

Standardisation of European public accounts would allow cities to both make the cost of their cleanliness more transparent and more controllable, and to compare themselves on this point with other public authorities, with the aim of improving and encouraging good practices. Standards such as IPSAS (International Public Sector Accounting Standard) exist, but there again, it seems there is no movement to make them change direction.

So how much does it cost to clean your city?

Unless your community has an accounting system to identify costs, the answer will be difficult to obtain. A "natural" development in this direction will take time. The definition of a standardised method, on the basis of MCH2 for Switzerland or other standards for European municipalities, then its acceptance and implementation is a long process. This approach would nevertheless provide a powerful tool for piloting and comparing cleanliness policies. We can only encourage communities to work in this direction, knowing that organising the collection of data to feed these accounting systems can be energy consuming.

However, is it possible to obtain these management tools without going through a harmonised accounting system? This is possible on condition of defining a method and a scope of cleanliness. This information would allow politicians and citizens to set their expectations — what level of cleanliness at what price — to make polluters (citizens or companies) contribute if it is the will of the politician, and to improve the efficiency of the means committed. For those who would already like to have tools to calibrate their actions, it is possible to define simple and practical methods, based on field data. We applied these models to cities and measured the costs of their urban cleanliness. In our next "Clean City Lab" article, we will present concrete examples of the "bottom-up" and "top-down" approaches defined here and give the results of the application of these methods of evaluating the cost of cleanliness.