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					                                        STATE OF NEW YORK                             MARK P. PATTISON
ALAN G. HEVESI
 COMPTROLLER                 OFFICE OF THE STATE COMPTROLLER                       DEPUTY COMPTROLLER
                                         110 STATE STREET               DIVISION OF LOCAL GOVERNMENT SERVICES
                                      ALBANY, NEW YORK 12236                      AND ECONOMIC DEVELOPMENT
                                                                            Tel: (518) 474-4037 Fax: (518) 486-6479


                                              August 18, 2006


  Mr. Frank DeMayo, Supervisor
  Members of the Town Board
  Town of Liberty
  120 North Main St.
  Liberty, NY 12754

  Report Number: P6-4-48

  Dear Supervisor DeMayo and Members of the Town Board:

  One of the Office of the State Comptroller’s primary objectives is to identify areas where local
  government officials can improve their operations and provide guidance and services that will
  assist them in making those improvements. Our goals are to develop and promote short- and
  long-term strategies to enable and encourage local government officials to reduce costs, improve
  service delivery and to account for and protect their entity’s assets.

  In accordance with these goals, we are conducting an audit of seven municipalities located in
  Broome and Sullivan counties to determine whether local officials can generate cost savings for
  their residents by contracting with private refuse haulers on their behalf for refuse and
  recyclables collection services. We included the Town of Liberty in our audit. Within the scope
  of this audit, we reviewed types and associated costs of residential refuse collection services
  available to residents in the Town. The audit period was January 1, 2004 to October 27, 2005.

  This report of examination letter contains our findings and recommendations specific to the
  Town of Liberty. We discussed the findings and recommendations with local officials and
  considered their comments in preparing this report. The Town officials’ response is attached to
  this report in Appendix A. At the completion of our audit of the seven municipalities, we will
  also prepare a global report that summarizes the significant issues we identified at all of the
  municipalities audited.

  Summary of Findings

  Our audit disclosed that Town of Liberty officials could potentially save their residents a
  substantial amount of money annually by contracting with a private refuse hauler on their behalf.

  In addition, we found a number of non-financial benefits the Town could realize if officials were
  to contract for refuse collection services on behalf of their residents.
Background and Methodology

Refuse collection is a significant service that affects virtually every household. There are
generally four main options available for residential refuse collection services:

   •   Municipality using its own employees and equipment

   •   Municipality contracting with private contractors on behalf of all or a section of the
       municipality

   •   Individual households contracting with private contractors

   •   Individual households bringing their refuse to a transfer station.

There have been a number of recent reports issued indicating that local government officials can
realize substantial savings for their residents by contracting for refuse collection on their behalf.
A June 1999 study by Syracuse University’s Maxwell School reached the conclusion that in
Onondaga County the least cost-effective means of providing residential refuse service was
individual households contracting on their own behalf with private contractors. Also, a July 2002
State Comptroller report reached a similar conclusion that Monroe County residents contracting
on their own behalf paid more than twice as much as households with services provided under a
municipal contract. Again, the same conclusion was reached in a June 2005 State Comptroller
audit in the Glens Falls region where the potential annual savings to residents was estimated to
be nearly $2.5 million when local government officials contracted on behalf of their residents.

As part of our audit procedures, we gained an understanding of residential refuse collection
services in the Town by inquiry of Town officials, observation, and inspection of certain
documents and records. We also reviewed applicable laws and regulations pertaining to
municipal provision of refuse services. Our audit procedures included using 2000 Federal Census
data to determine the number of Town residents that would most benefit if Town officials
contracted for residential refuse collection. We then adjusted this data for new housing units
constructed since 2000, households estimated to be transporting their refuse to the transfer
station, and households located in mobile home parks or that are part of multi-unit dwellings
greater than four units. We made these adjustments because households using the transfer station
do not contract with private haulers for refuse collection, and because the owners of mobile
home parks or multi-unit dwellings can likely negotiate commercial collection rates that are
lower than the residential rates. We then contacted several private refuse haulers providing
service to Town residents and determined an average annual cost-per-household. We also
surveyed officials of local governments in Sullivan County that contract for refuse collection
services for their residents and determined an average annual cost-per-household for municipally
contracted refuse collection services. Based on these averages, we calculated the average annual
household savings to be applied to the number of households that could benefit from Town
officials contracting on their behalf for residential refuse collection services.




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We conducted our audit in accordance with generally accepted government auditing standards
(GAGAS). Such standards require that we plan and conduct our audit to adequately assess those
Town operations within our audit scope. Further, those standards require that we understand the
Town’s management controls and those laws, rules and regulations that are relevant to the
Town’s operations included in our scope. An audit includes examining, on a test basis, evidence
supporting transactions recorded in the accounting and operating records and applying such other
auditing procedures, as we consider necessary in the circumstances. We believe that our audit
provides a reasonable basis for our findings, conclusions and recommendations contained in this
report.

Audit Results

The refuse disposal methods in the Town are typical of the methods used by other local
governments in the region. Generally, residents have two options for disposing of their refuse:
either contracting with a private refuse hauler for collection, or transporting their refuse to local
transfer stations. Our audit assessed whether residents could realize cost savings if Town
officials contract on their behalf with private haulers for refuse collection services.

Annual Cost Savings – We determined that residents who privately contract for refuse collection
services pay on average $414 annually. In comparison, we surveyed officials of three local
governments in Sullivan County that contract for refuse collection services for their residents and
found the average annual cost-per-household was about $181; thus, we projected an annual
savings of $233 per household. After making the adjustments described above, we estimated that
there are approximately 914 households individually contracting with private refuse haulers for
refuse collection that would likely benefit if Town officials were to contract on their behalf for
such services.

If Town officials were to enter into a similar residential refuse collection contract on behalf of
their residents, it appears reasonable that a total cost savings of $212,962 to Town residents
would be realized.

Non-Financial Benefits – We also identified other non-monetary advantages the Town itself
could realize if officials were to contract for refuse collection services on behalf of their
residents. Municipal contracts with private haulers can allow Town officials to regulate certain
aspects of residential refuse collection and disposal. For example, if Town officials have flow
control concerns they may include provisions in the contracts requiring all trash collected to be
delivered to a specified disposal site. Municipal contracting also tends to limit the number of
garbage trucks operating at one time because of efficiency factors and, thus, results in less truck
traffic and noise. Furthermore, because refuse is picked up only on particular streets on particular
days, the other streets will be clear of refuse and recycling containers that could be a nuisance
especially for snow removal services. Lastly, municipal contracting could help limit the risk of
illegal dumping as residents provided with consistent and reliable refuse pick-up services are apt
to be less likely to illegally dispose of or accumulate garbage for long periods.




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Recommendation

   1. The Town Board should contract for refuse collection for Town residents.

The Town Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the
General Municipal Law, the Town Board should prepare a plan of action that addresses the
recommendation in this report and forward the plan to our Office within 90 days. We encourage
the Town to make this plan available for public review in the Town Clerk’s office. Refer to the
attached document for additional information on filing a corrective action plan. Our Office is
available to assist officials upon request. If you have any further questions, please contact the
Binghamton Regional Office at (607) 721-8306.


                                                    Sincerely,




                                                    Steven J. Hancox
                                                    Assistant Comptroller




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                                       APPENDIX A

             RESPONSE FROM TOWN OF LIBERTY OFFICIALS
The Town of Liberty officials’ response to this audit can be found on the following pages.




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