Two Ways Municipalities Can Save Money

Empty streets, wasted light
Empty streets, wasted light

by James A. Bacon

I’m sick and tired of the false choice between raising taxes and cutting services. There are many ways that enterprising localities can save money and/or generate non-tax revenue without hosing taxpayers or neglecting core responsibilities. Here are just two ideas that popped up recently.

Street lights. Every municipality in Virginia operates street lights at a collective cost of tens of millions of dollars per year. (At one point the City of Los Angeles was spending $42 million annually to monitor and maintain its 200,000 street lights.) Light pollution issues aside, street lights run up the electric bill and generate costs to monitor and replace the light bulbs. You can’t bring along a step ladder and stand on your tippy-toes — you have to use a cherry picker to replace a burned out bulb.

The good news is that there are new technologies — cost-effective LED lights and sensors that detect when no one is around and no light is needed — that can drive down the cost of lighting up the outdoors. The bad news is that buying the bulbs and installing the sensors requires an up-front capital investment that local governments often cannot afford.

One possible solution: a public-private partnership. The Washington Metropolitan Area Transit Authority (WMATA) recently contracted with Philips Electronics, a private company, to light all of its parking garages. The authority estimates it will save $2 million annually in operating expenses while maintaining a contracted-for quality of service, reports Greater Greater Washington.

If WMATA can save money, so can every Virginia locality. This is low hanging fruit. There is no friggin’ excuse for local governments not to save this money. If your local government isn’t exploring these savings, it’s time to tar and feather your city council or county board.

Landfill mining. Virginia localities have been operating landfills for decades. A few have figured out how to generate cash by tapping the methane emanating from these facilities. As metal prices have risen, the same municipal dumps also may be sitting on a small fortune in copper, aluminum and other processed minerals. In the Jefferson Policy Journal, Rob Hartwell describes how localities can turn their landfills into windfalls.

“eWaste” is the fastest growing municipal waste stream in the U.S., with thousands of computers, peripherals, printers, fax machines, televisions and mobile devices discarded each day. Twenty-five states “restrict eWaste from being dumped into landfills. Virginia is not one of them. Local governments could be monetizing this waste stream and capturing millions in revenues. Writes Hartwell:

One combined effort underway in Southeast Virginia, the Hampton Roads Urban Mining Center, would start with eCycling and move to produce fuels from municipal waste. Utilizing the latest in European technologies just now available in the U.S., the benefits from similar regional efforts across Virginia per site would be monumental, including:

Nearly $500 million worth of private sector investment.

Over 500 new direct jobs with $25/hour average wage, not counting 500 construction jobs and new transportation/hauling-related jobs.

Tax revenue streams on over $200 million annual revenue (after 3 years).

Local governments should be stumbling over themselves to strike similar deals.

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10 responses to “Two Ways Municipalities Can Save Money”

  1. William Fralin Avatar
    William Fralin

    Hey Jim. This post made me think of this article

    Thought you might find it interesting

    1. That’s another good example. I’m sure other Virginia localities are using data and analytics to predict where crime is likely to occur — I think Richmond uses these tools, too — but I don’t read much about it.

  2. I think there are two aspects to this.

    one is that you acknowledge the things that government ought to be doing but you want them to do it better..

    the other is what you think government should be doing or not – fundamentally.

    so I’ll give some hypothetical examples.

    would you think that government should contract out lighting? or how about water/sewer? or fire and rescue?

    and let me give a couple of real examples:

    1. after years or running cost overruns on food service, the school contracted it out to a private company. The result – improvement but not perfection.

    2. – after years of an Ad Hoc approach to county and schools vehicles maintenance and service -which involved contracting with private companies to do some of the tasks – they created a county level fleet maintenance facility that takes care of all county vehicles as well as all school vehicles including school buses. The result: real savings!

    I think it is a mistake to think that ALL government is inherently wasteful and incompetent because they do not have a profit motive.

    people are not necessarily happy with for-profit companies contracting with the govt to provide services. privately operation toll roads are such an example.

    1. Look, there are some very efficient, well run government departments — just as efficient as anything in the private sector. But there are many poorly run functions. (You should read about the department of Social Services in Richmond — it’s scandalous.) If someone in the private sector can do it better, why not privatize the function? That’s not to say *everything* should be privatized. But sometimes it’s easier to effect change by privatizing than trying to change the organizational culture.

      1. and there are well run and crappy run companies – and no.. not all crappy run companies go broke !

        I’m not opposed to privatizing but if it’s never been done before – I need to see some compelling evidence and an equally compelling PILOT program.

        again – this boils down to whether you believe that some things need to be done by the government or can be done by the private sector.

        if you think social services itself is poorly run – that’s different than if you fundamentally disagree with the various aspects of their mission. That’s a policy issue.

  3. DJRippert Avatar

    “Streetlights in Fairfax County are maintained by either Dominion Virginia Power or Northern Virginia Electric Cooperative (NOVEC). The Virginia Department of Transportation (VDOT) operates the streetlights along interstates and at major interchanges.”

    In fact, most municipalities in Virginia have Dominion Virginia Power maintaing their street light. In Virginia Beach (and perhaps elsewhere / everywhere) DVP owns the streetlights. Getting ownership of the streetlights back would be “politically charged” and would require SCC approval. In addition, it appears that the street lights (owned by DVP) in Virginia Beach aren’t even metered. Kind of makes you wonder how they know how much to pay Good Ole Dominion.

    C’mon, Jim … this is Virginia! A state managed by the epicenter of crony capitalism in America – Richmond. You had to guess that the guys who sell the electricity also own the streetlights! I know, let’s just ask Dominion pretty please to make the streetlights more efficient so they can sell less electricity.

    Make sure you read the cost comparison in the report I provided. City owned LED lights not only cost considerably less than Dominion’s LED product but they have much lower annual operating costs too. And guess what? Dominion’s LED product costs MORE in both purchase price and annual operating expenses than Dominion’s conventional sodium vapor street lights.

    Never a dull moment when you live in America’s most corrupt state.

  4. again.. let’s not restrict this to Virginia unless Virginia is doing things different from other states.. more badly than other states.

    VDOT is among the leaders in the country in PPTA.. and yet even here in BR, there are folks who don’t like this idea.

    this comes across to me as the standard, generic, anti-govt trope in the first place.

    are you saying that LOCAL government is inefficient (as opposed to State or Federal government)?

    what are you specifically talking about?

    most local government is pretty lean in my experience. Their biggest costs are Schools and Public Safety ( sheriff and fire/ems). Everything else is basically a fiscal gnat on a dogs butt – down in the single digits in most local budgets.

    Do you want … schools and law enforcement run by private sector companies?

    serious question…

  5. or is it state-level services that are at issue?

    I never can tell sometimes… when people complain.. it seems like they come up with a list of particulars – without any regard as to who is doing what on a functional basis…

    street lights… geeze… there are few if any done by the county itself in my area – except for their county building parking lots.. VDOT handles the traffic signals and lights on some roads. The private sector does many lights also.

    and yes, of course, you’d want all of them in all cases to use efficient stuff but isn’t this a lot like complaining that the county is providing coffee makers and microwaves in the break rooms for their employees? (We actually had a guy who ran for BOS a few years back who cited this as an example of county waste).

    the other problem I have with this – is what is the benchmark you are holding as a standard? or are you just nit-picking low hanging fruit that you really good for anything including private sector companies or even in your own home?

    I still say that one of the things that Va does that other states do not do is it requires each county, each jurisdiction to provide a standardized accounting for both revenues and expenditures – that allows us to compare the jurisdictions on a lot of spending…

    I’m specifically referring to

    and these reports allow you for your own jurisdiction to compare it’s fiscal operations with other counties as well as the state average for various things like county administration, operations, etc.

    we have this marvelous resource and for the most part – it’s never used even by folks running for office… who say they want a more efficient govt.

  6. And I’m tired of politicians and pundits who pontificate about magic wands of “just cutting the waste,” “privatization,” and “grow the pie.” I do however respect politicians who tell us the truth, that the stuff that we want costs money, and we have to cut it down or figure out how to pay for it.

    No doubt there are opportunities for government to get better, but the stories of horrid outcomes and corruption are legion in the “privatization” world. Growing the Pie is a magic wand that folks love to use when they don’t want their taxes raised. And cutting the waste? In many budgets, this is just not a significant amount of money. Furthermore, what do we even define as waste? Christmas parties and other inexpensive perks that make government jobs competitive with virtually all private sector ones?

    Folks talk about all this stuff when they don’t want to talk about serious mismatches between revenue and expenditures. Kudos to politicians who are willing to have that conversation, like the folks in Henrico County this year.

    1. DJRippert Avatar

      Jimmyj –

      I agree with some of what you say. I consider the Commonwealth of Virginia / Dominion Virginia Power relationship to be a great example of a hugely corrupt public – private partnership.

      However, on taxes – government in the United States has never spent a higher percentage of America’s GDP than it spends today. Stunningly, total government spending in the United States as a percentage of GDP is now higher than at the peak of WWII. See:

      Giving over an ever larges percentage of our economy to government has not improved employment, it has not ended poverty, it has not reduced income inequality, it has not improved our education system.

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