East Point staff warn sanitation fund could exceed $800,000 without revenue changes

East Point city staff told council members during a budget workshop that the sanitation operation is running a significant deficit and that, without changes to revenue collection or service structure, the current $800,000 sanitation budget is likely to be exceeded. The discussion focused on recycling contract costs, landfill tipping fees, accounting classifications and the operations cost of illegal dumping.

The chair opened the discussion on sanitation and recycling and staff estimated, based on year-to-date actuals, that utilities and sanitation lines could push next year’s sanitation-related budget to $900,000 or more if current trends continue. A staff member said, “We’re gonna go over that 800,000 budget this year if you stay on that trend track,” and urged the group to prepare forecast scenarios both with and without a rate increase so the city manager and council can decide next steps.

Agency staff described options to reduce costs, including bringing recycling services in-house. The agency official said bringing the service in-house would likely require two drivers and four laborers and new vehicles, and estimated an in-house cost near $5 per household versus current contract rates of about $7.30. The official added that vehicle purchases and service lifespans must be factored into any decision to internalize services.

Participants flagged a second primary concern: revenue allocation on combined utility bills. Staff explained apartments are charged $18.50 per unit while residents are charged $21.50, but a single combined utility bill obscures which portion of each payment covers sanitation. One staff member summarized the revenue-concerns calculus: if 8,000 homes paid $21.50, residential revenue could approach $4,000,000 — yet coding and collection practices make exact revenue attributed to sanitation unclear.

Accounting and coding issues also drew sustained attention. Staff said some lines looked negative because capitalized assets were incorrectly mixed into operating printouts and that prior budget transfers had moved money between lines without clear documentation. A committee member observed this may be responsible for much of the apparent deficit, calling it an "accounting error" possibility and urging a chart-of-accounts review and reconciliation with BSNA to correct capitalization and transfers.

Illegal dumping emerged as an immediate operating drain. Agency staff estimated removal and tipping costs for illegal dumping at roughly $3,000–$5,000 per week and reported the transfer station is charging the sanitation operation nearly $260,000 a year in tipping and related fees. Staff said pursuing a solid-waste grant (reimbursable up to about $75,000) and establishing drop-off programs for tires and bulky items could reduce illegal dumping and recover costs.

To address chargebacks between departments and to better measure operational costs, staff recommended installing a scale and tracking tonnage for department-generated loads so sanitation can bill other city departments (for example, public works or parks) rather than absorbing those costs in the general fund. Staff also proposed a tonnage-based chargeback system to be calculated one year behind, which would allow more precise budgeting.

Council and staff agreed on near-term next steps: compile counts of residential and apartment customers, run revenue forecasts with and without a rate increase, convene stakeholders to pursue the solid-waste grant and illegal-tire drop-off pilot, reconcile the chart of accounts with finance/B S N A, and present a CIP request for route reordering and required equipment at the next council meeting.

The workshop did not include any formal motions or votes on rates, contracts, or service changes; participants directed staff to prepare the data and proposals for a future council decision.