The management incentive is paid based on customer satisfaction surveys and independent inspections of the parking facilities. The free responses section of the survey included a range of sentiments, from enthusiastic praise of specific Republic Parking employees (“Staff is always very friendly” and “Teri and Cathy are the greatest!!”), complaints about employee job performance (“I don’t pay $12-$13 a day to be inconvenienced because your employees can’t get their job done timely!”), praise for the facilities (“Very clean and nice art work on ground floor at curved wall on the southeast comer”) and criticism of the facilities (“Please clean more. And take care of the awful smell on floor 4″). Sprinkled through the responses are complaints about parking rates. [.pdf of parking customer responses]

The rating scale responses of the survey broke down as follows: 5-Excellent (36.5%), 4 (26.3%), 3 (14.0%), 2 (9.5%), 1-Poor (6.7%), Non-Responsive (6.9%). Last year the same survey yielded the following results: 5-Excellent (22.5%), 4 (32.3%), 3 (17.9%), 2 (4.6%), 1-Poor (2.2%), Non-Responsive (20.1%). So the number of survey respondents giving a rating of 5 or 4 increased from 54.8% to 62.8%. The rating of 1 or 2 also increased, from 6.8% to 16.2%. Around 600 people responded to the survey.

The DDA’s independent parking inspector made 48 written reports to evaluate the cleanliness of the facilities systemwide last year. Average for the year was 90.48%, which is a three-point drop from last year’s score of 93.7%.

In the previous three years (2009, 2010, and 2011), the DDA board voted to award the same $45,000 incentive: [link]

Orange (left) and apple (right). The orange is larger than the apple. Its skin is bumpy in contrast to the apple's smooth covering. Also, the apple has a stem. (Photo by the writer.)

The decision came under some criticism for its initial capital costs, the possible reduction in quality of the resulting recycled material, as well as for its emphasis on coupon rewards for recycling more – which some people feared could feed back into a loop causing more consumption.

I think there are fair questions that can be asked about cost and quality.  What I missed, however, was a convincing sales pitch – one that included options within the basic idea of a single-stream system with an incentive program. In this column, I take a look at what I’d have found to be a more convincing sales pitch.

First, it’s a sales pitch that could have been more about choices than it was. Choices are a fairly strong value in American culture. It’s a strong enough value that a draft report on parking currently being written by the Ann Arbor Downtown Development Authority includes the assertion that everything in Western culture is about choice. The claim generated some dissenting views at last Wednesday morning’s meeting of the DDA’s transportation committee, but also found strong support.

We begin, though, with another powerful idea in American culture: More is better.

The Psychology of More is Better

The city’s case for single-stream recycling was based largely on the potential for increasing a key statistic: pounds-per-household of recycled material. [That's an argument that feeds into the financial case for the switch to the new system.]

Ann Arbor’s pounds-per-household number stands at 357 pounds of recycled material, compared with something like 600 and 800 pounds in Rochester Hills and Westland, respectively. Both of those cities have implemented single stream-recycling systems with coupon reward programs.

But some folks probably wondered why that statistic was considered so key to the city’s case. Those are the folks who are sometimes labeled the “left flank” of Ann Arbor’s predominantly Democratic political landscape.

After all, that pounds-per-household number for recycling is not included as a key measure in the city’s State of the Environment resource use indicators. Instead, what’s tracked are per capita numbers for landfilled waste. That’s a number that we’d like to see get smaller. Because that’s what recycling is all about, right? It’s about reducing the amount of landfilled waste.

So why were city staff talking about a statistic that they wanted make larger?

It’s actually solidly based on the way we’re programmed as human beings. We respond to the idea of “more is better” in a way that is more powerful than “less is better.” Runners who are trying to lower their times for the 5K will inevitably talk about how many more miles they’ll run in training. Food Gatherers, a local nonprofit trying to reduce the number of people who are hungry, will focus about how many more pounds of food they’ve been able to recover this year than last year.

Put another way, offense is easier to cheer for than defense. When the University of Michigan hockey team scores a goal at Yost Area, the chant goes “We want more goals!” … along with “Sieve! Sieve! Sieve! Sieve! It’s all your fault, it’s all your fault, it’s all your fault,” directed at the opposing team’s goalie. And that seems to be a fairly generic chant for hockey fans everywhere. There doesn’t seems to be generic chant for an incredible save.

On the subject of more-is-less in the environmental movement, in a blog post from three years ago, Seth Godin wrote:

As a marketer, my best advice is this: let’s figure out how to turn this into a battle to do more, not less. Example one: require all new cars to have, right next to the speedometer, a mileage [mpg] meter. And put the same number on an LCD display on the rear bumper. Once there’s an arms race to see who can have the highest number, we’re on the right track.

It’s worth pointing out that Seth Godin is a marketer of more than modest ability. He visited Ann Arbor a few years ago and made a presentation at Michigan Theater. As a result of that presentation, I now own three copies of Godin’s book, “The Dip.” That’s three out of five copies that I originally purchased as a part of admission to the presentation. If I were a better consumer, I would have passed along all five copies to other people as Godin intended, instead of just two of them. But Godin was able to log five more in his “number of books sold” column. Faced with a choice between calling myself an idiot or calling Seth Godin a genius, I’m going with Seth as marketing genius. [No, we're not taking a poll on those choices.]

So using pounds-per-household of recycling is arguably a good marketing strategy to increase recycling performance in Ann Arbor. It taps the powerful “more is better” psychology that makes us tick as human beings. And the city alluded to this idea of competition and group participation as part of the reason it would be effective. But the focus of the sales pitch was the rewards program to be administered by RecycleBank, not the psychology of “more is better.”

Numbers as Their Own Reward

If we focus on the “more is better” psychology, this is a fair question to ask: How much extra recycling behavior do you get just from keeping track, plus the “more is better” psychology? That’s a different question from the one that was actually given some discussion: How much extra recycling behavior is due just to having a larger bin with no requirement of sorting?

An alternative not presented to the city council was this: Bring just the motivational meter to the surface, without coupon rewards, by providing residents with information about how much they’re recycling per household – via the city’s website, for example. Instead, the motivational meter was  linked to the RecycleBank coupon reward system.

Given the size of the 10-year contract with RecycleBank – $2 million over the course of the contract – it’s fair to ask: What is the recycling performance differential between an incentive program based purely on providing numerical feedback to residents, versus one based on providing feedback in the form of coupons? One could imagine the pure numerical feedback approach spurring good-natured competition between people on different recycling routes, or perhaps a mechanism for settling ancient neighborhood grudges. And out of that could come greater recycling performance.

As described by the RecycleBank sales representative at the council’s March 15, 2010 meeting, a large part of what the RecycleBank contract pays for is their efforts to establish partnerships with vendors to provide coupons and to educate residents about the point system and relating it to coupons.

Why isn’t it an option to eschew the coupon program and just focus on keeping numerical track as a feedback loop – and leave RecycleBank out of the picture? It’s partly because RecycleBank equipment is a key part of the technology for keeping track. That equipment includes RFID readers mounted on the trucks – which capture participation information from the RFID tags on every curbside cart – plus the computer installed at the materials recovery center (MRF), for capturing weight data.

This equipment is what’s covered by the escape clause in the RecycleBank contract – it’ll cost the city $150,000 if it decides not to fund the program – the price of RecycleBank’s equipment.

According to RecycleBank spokesperson Melody Serafino, who spoke to The Chronicle by phone, that equipment consists of proprietary hardware and software.

So we’re outsourcing two distinct activities: (i) a proprietary technology installation for keeping track numerically of participation and truck weights, and (ii) a coupon incentive program that ties into a coupon rewards program and merchant partnership program.

Can a city choose to implement just the numerical keeping-track part? Serafino explained that RecycleBank wouldn’t necessarily completely reject the idea forever if a city were to ask for just that module, but stressed that RecycleBank was a rewards and relationships company. Their national partners would like to be a part of the relationship in every RecycleBank community, she explained. What they’re offering, she said, was a way to establish loyalty between residents and  geographically local bricks-and-mortar establishments where residents could, for example, enjoy a $5 discount on some item they’d be purchasing anyway. That would held keep local dollars local, she said.

What I wanted to see in the sales pitch to the city council and to the community was the choice to start off just with keeping track numerically of recycling performance. It would be interesting and potentially valuable to measure the effect on recycling performance when enhanced by just a numerical means of keeping track – with no coupon rewards.

To be clear, I’m not suggesting just converting to a single-stream collection system and stopping there. The idea is that we’d ask RecycleBank for just the counting system, with household data piped straight to the city website where it could be looked up by residents. It would be similar to the system already in place for tracking city water usage. [To view a daily graph of your water usage, get a copy of your water bill so that you can type in your account number, and start with the My Property page of the city's website.]

Keeping a numerical track of recycling performance is not the business RecycleBank is in. They’re in the rewards and relationship business. So keeping numerical track is simply a tool in service of those rewards and relationships. But it seems to me that RecycleBank might discover that the idea of keeping numerical track is a lucrative business, too – maybe more lucrative than rewards and relationships.

If  comparable recycling performance can be achieved just by providing people with numerical feedback on their recycling, RecycleBank could shed all their staff whose function is to establish retail partner relationships, and focus exclusively on hardware and software installations. The benefit to a city would be roughly the same, so a city would presumably be willing to pay roughly the current price. That’d be a win for RecycleBank – although they might need to contemplate a name change.

On the other hand, if RecycleBank can show that numerical feedback alone has a far lesser effect on improving recycling performance than a coupon rewards built on top of the numbers, that would also be a win for RecycleBank. They’d be able to prove: You need our people, not just our technology.

The Sales Pitch I Wanted: In converting to single-stream, we’re going to tap the “more is better” psychology. We can choose to do that in three different ways: (i) provide numerical feedback only, (ii) provide numerical feedback in the form of coupon rewards, and (iii) start with numerical feedback and add coupon rewards later if performance doesn’t meet projections. Which would we like to pursue as a community?

Activities versus Outcomes

The city’s sales pitch to the public for this more-is-better marketing strategy also missed a key point: What’s the evidence that other communities’ bigger numbers for curbside recycling translates into smaller numbers of landfilled waste in those communities?

Consider the analogous question for Godin’s scenario, where every car has a real-time miles-per-gallon indicator on the dashboard and the bumper – call it a Godin Gauge. Let’s imagine every car is equipped with a Godin Gauge, and that people standing around the water cooler brag back and forth about their mileage numbers and drivers’ miles-per-gallon nationwide gets measurably higher. Success? Well, no.

The metric for success, presumably, is still total fuel consumed per capita. And that number might still be going up, despite the Godin Gauge – if people are driving farther than ever … because they feel less guilty about driving at all … because their Godin Gauge tells them they’re getting a whopping 75 mpg.

Or consider the city of Ann Arbor’s efforts to increase bicycle lane mileage. It’s a number we can try to increase, but if our per capita vehicle-miles-traveled (VMT) keeps increasing – and it does, according to the city’s State of the Environment Report – then we cannot claim success.

It’s the difference between measuring the activities we do, and measuring the impact of those activities. At the last Ann Arbor Transportation Authority board meeting, board member Sue McCormick, who’s also public services area administrator for the city, nailed this point, when she objected that the goals and objectives for AATA’s CEO were too focused on activities and not enough on outcomes.

Monitoring our Godin Gauges is an activity. Installing bike lanes is an activity. In recycling, the pounds-per-household number is the measurement of an activity. But the outcome we should measure is landfilled waste. Measuring the activity is important, because it’s part of marketing recycling as more-is-better. However, among elected officials with the responsibility for overseeing the $6 million capital investment in single-stream recycling, the focus on the outcome of less landfilled waste was not front and center.

Back to the question that bears on outcomes: What’s the evidence that other communities’ bigger numbers for curbside recycling translates into smaller numbers of landfilled waste in those communities?

In the many months of lead time to the final vote on the single-stream incentive program, I didn’t see any member of the Ann Arbor city council insist on getting an answer to that fundamental, obvious data question. That’s a group that includes two Ph.D scientists in Carsten Hohnke and Stephen Rapundalo.

The day after the city council made the final votes to implement the single-stream plus incentive, The Chronicle posed that question to city staff in the following form:

When comparing Rochester Hills to Ann Arbor, the 600 pounds versus 357 pounds is part of the story. The other part of the story is the X pounds per household that Rochester Hills throws into the landfill, versus the Y pounds per household that Ann Arbor throws in the landfill.

Our question, currently being handled by city staff, is this: What are X and Y?

Total Waste and Apples-to-Oranges

The city, via its consultant, was eventually able to track down some information related to the question – we now have some numbers for Westland, but not Rochester Hills. [Sometimes you go to press with the numbers you have, not the numbers you wished you had.]

Recall that in round numbers Westland generates 443 (800 minus 357) additional recycling pounds-per-household. The total waste comparison between Westland and Ann Arbor looks like this:

Westland
3,117 lbs/household/year total waste (including yard waste)
1,277 lbs per capita waste (2.44 people per household)

Ann Arbor
2,590 lbs/household/year total waste (including yard waste)
1,162 lbs per capita waste (2.23 people per household)

-

Interpreting these numbers is an exercise in keeping the proverbial apples and oranges straight.

Comparing the total-waste-per-household numbers, Westland generates 527 pounds-per-household more total waste than Ann Arbor. Maybe that 527 pounds of total extra waste allows them to achieve more than Ann Arbor in recycling pounds per household? Probably not.

The fact that yard waste is included in the figure clouds the picture – what we really care about is recycled versus landfilled waste, and yard waste is not landfilled. Another apples-to-oranges factor: Westland’s numbers include pickup of “bulky” waste – like old sofas. Ann Arbor’s numbers don’t.

More importantly, comparing the per household numbers presupposes that household size in Westland and Ann Arbor is the same. It’s not. Ann Arbor’s smaller household size means that you’d expect a somewhat smaller total waste number, all other things being equal.

So comparing the per capita waste figures reduces the gap between Westland and Ann Arbor to 115 pounds [1,277 minus 1,162]. Percentage-wise, then, the average Westland household generates 20% more total waste [527 divided by 2,590], but the average individual Westlander generates only 10% more total waste [115 divided by 1,162].

So compared to the average Ann Arborite, the average Westlander has 115 pounds more trash, recycling, and yard waste removed from their curb every year.

The case for single-stream plus coupon rewards, however, was based on per household recycling numbers: 357 pounds per household compared to 800 pounds per household for Westland. Converting those numbers to per capita figures yields: 357 divided by 2.23 = 160 pounds recycling per capita for Ann Arbor; 800 divided by 2.44 = 328 pounds of recycling per capita for Westland.

So the average Westlander recycles 168 more pounds of material than the average Ann Arborite does.

Comparing the Westlander’s waste pile with the Ann Arborite’s, we know that it’s 115 pounds heavier, but the part of it that’s made of recycled material is 168 pounds heavier. So even if all the additional weight in the Westlander’s waste pile is due to recycled material – and we subtract that from the Westlander’s recycling efforts – we’d have equal-weight waste piles, but the Westlander’s pile would have 53 more pounds of recycling in it.

That’s a long story to have to tell to arrive at the conclusion that the single-stream plus coupon incentive program in Westland will improve recycling performance in Ann Arbor and thereby reduce landfilled waste.

The tale would be simpler if we had the X and Y numbers from the question we posed. It would also be simpler if the city had relied on per capita numbers, not per household numbers.

It’s important to acknowledge that apples-to-apples comparisons against other communities are not easy when it comes to solid waste. But when all that’s possible is an apple-to-orange comparison, then we need to acknowledge that.

It’s also important to recognize that the “more is better” psychology that will likely fuel the success of Ann Arbor’s new single-stream program should not be the metric of success. Success should continue to be measured as the city’s State of the Environment Report does it: per capita total waste and percentage diverted from the landfill.

The Sales Pitch I Wanted: We’re going to tap the psychology of “more is better” as a marketing tool, but we’re still going to measure success by per capita landfilled waste. Our per capita landfilled waste right now is X. We expect it to be Y after five years.

The Psychology of Harder is Better

Part of the city’s sales pitch for single-stream was based on ease and convenience – residents will no longer need to sort their recycled materials into two separate containers, and they’ll have a convenience cart with wheels, instead of two totes that have to be lifted manually. The carts won’t be an improvement for everyone – there are surely people who can manage the totes one at a time with a limited amount of material, but who will not physically be able to wrassle the carts over bumpy terrain.

But on average, wheeling a single cart out to the curb, where it will stand proudly at attention next to its blue brother – the trash cart – will make recycling in Ann Arbor easier than before. Not to mention the fact that the comparable size of the recycling cart will now convey a better message than the comparatively tiny totes: Your volume of recycled material should rival your volume of landfilled trash.

I think it would be more effective, however, to talk about how the carts will make life in Ann Arbor easier, rather than how they’ll make recycling easier.

Here’s why. Our basic idea of what makes recycling important has something to do with the fact that we think it’s virtuous. There’s an orthodoxy associated with it. It’s a good thing to do and doing it makes you virtuous. Virtue shouldn’t come easy. Virtue should be at least a little bit hard.

The idea that the things worth doing are those things that are difficult is something baked into our culture. It’s not an accident that John F. Kennedy, in his 1962 speech at Rice University in Houston, Texas, talked about the reasons for choosing to go to the moon and to take on other challenges this way:

… not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.

Granted, single-stream recycling is a bit remote from traveling to the moon.

However, at least for some of us, part of the reason we engage in an “environmentally friendly” lifestyle choice is precisely because it’s difficult, and we derive some sense of virtue from it. For example, I get around mostly by bicycle, even in the wintertime. There are myriad benefits related to my work here at The Chronicle – I never have to hunt for parking when I attend an event, and when I see sources walking down the street, I can just pull right up and chat.

But mostly the bike is about the fact that it’s hard enough that most people don’t use one for transportation. If it were easy, and half the population rode a bike, I’d probably be far less enthusiastic about it. As it is, though, part of the self-motivating story I can tell myself is that I’ve got a little extra in my pile of virtue, on account of my bicycle riding.

So when we tell old-school “left flank” recyclers that recycling will be easier, part of what they might be hearing is, “You’ll no longer be doing something that has virtue.” Or worse, “That virtuous activity you previously took so seriously, wasn’t really necessary.”

That’s why a “life will be easier” message is, I think, likely to be more effective. Even those of us who believe that certain things should be hard, will find it tough to argue that that life in general should be hard.

The Sales Pitch I Wanted: Life in Ann Arbor will be easier once we convert to single-stream recycling.

The Finances of Easier is Better

Part of that “life will be easier” message, however, needs to include some discussion of financial ease. Included in the council and staff discussion was the projected payback period for the investment in the single-stream infrastructure – carts, trucks, and improvements to the materials recovery facility (MRF). That period is projected to be around 6.75 years in an average market for recycled materials.

After that period the system will presumably continue to show the same efficiencies – compared to the current two-stream system – that allow for the payback on the investment. At the point that the investment is paid off, then, here’s a fair question: Do the increased efficiencies from the implementation of the single-stream system warrant a reduction in the city’s solid waste millage?

The city’s solid waste millage, which is levied at a rate of 2.467 mill, generates roughly $11 million a year. That millage, which appears as “City Refuse” on property tax bills, is enabled by state statute. Under that statute, a city council can enact a tax up to 3 mill in order to fund a garbage collection system.

The capital used to fund the single-stream investment came from laying aside money from this millage as a cash reserve. The October 2009 presentation to the city council put the solid waste enterprise fund at around $9 million.

So what was the capital investment to be paid back?

The October 2009 city council working session presentation gave a payback analysis for the MRF upgrade at $3,500,000  [authorized by the city council at its Nov. 15, 2009 meeting] and cart purchases at $1,281,600 [authorized by the city council at its Dec. 21, 2009 meeting].

The purchase of four additional trucks at a price of $1.2 million was authorized at the council’s Dec. 21, 2009 meeting, but was not included in the October 2009 payback analysis.

Starting in FY 2011, the payback analysis shows net returns to the solid waste fund balance of $625,000, $976,000, $1,046,000, and $796,000 for an average of $860,000 per year. The variation is due to the variability in the market for recycled material.

But taking $860,000 as an average annual savings compared to the two-stream system, we should be able to rely on that savings to persist even after the capital investment is paid back. The $860,000 savings translates into .19 mill in tax. Based on the payback analysis, then, it seems reasonable to make a tax decrease a part of the sales pitch. That’s a tax decrease that should be expected independently of the city’s possible exploration next year of a privatization option for garbage collection, which would be accompanied by a reduction in the solid waste millage.

The Sales Pitch I Wanted: In around six years, life in Ann Arbor will get a little easier due to single-stream recycling, because your taxes will go down … a little.

Cart Coda

Our two-stream recycling totes currently go to the curb about every third week. That’s often enough to keep them from overflowing from their space where the dishwasher previously sat.  I doubt that I’ll put out my single-stream recycling cart for collection every week when they’re issued in July – even though I’d get more coupon rewards for doing that. I think we’re pretty well maxed out on what we recycle. So to me, the ability to put out the recycling only every six weeks or so is reward enough.