Post #1126: TANSTAAFL, or free mulch in the Town of Vienna

Posted on April 28, 2021

This post started out as a tirade about “free” mulch, because TANSTAAFL.  The idea was to compare the value of the mulch to the value of the quality-of-life losses in houses adjacent to the Town’s mulching operation.

But in the end, I wrote this one backwards.  The important part is not this little raggedy bit of analysis that I do next.  The important part is the cost numbers that have been put in front of Town Council, shown at the end.  Unless I’m missing something, getting rid of the Town’s mulching operation seems like a total no-brainer from an economic perspective.

There ain’t no such thing as free mulch.

To an economist, there’s a weird disparity between the start and finish of the Town’s leaf mulching operation.

The start of this process imposes a significant cost on a handful of citizens.   I described that elsewhere, well over a year ago (Post #526).   One residential neighborhood in Vienna has to put up with a lot of noise and odor because the Town decided to take over an area formerly labeled as a park, and move the Town’s leaf grinding/mulching operation there.  Essentially, the Town placed an industrial-scale waste processing facility in the middle of a residential neighborhood.

The end of this process provides a benefit to a handful of citizens.  Last count, about 200 residents and several local businesses got truckloads of “free” mulch.

To be clear, nothing is free.  Some things might be pre-paid, like a “free” cell phone with a long contract.  They might be paid for by others, such “free” food from charities or government entities.  In this case, the “free” mulch is somewhere between the two.  We all pay for it via our taxes, and then it is delivered to those who want it, at no additional cost to the recipient.

Putting all other issues involved in the Towns mulching operation aside, this is interesting because we have two “missing markets”.  The Town doesn’t pay the affected citizens for the dis-amenity of the mulching operation.  And, separate, a different group of citizens doesn’t pay the Town for their mulch.

As an economist, I have to ask if we could resolve this problem by joining up those two missing markets.  Charge for the mulch, and offer the proceeds to the residents whose qualify-of-life is degraded by the mulching operation.

This is the only way to determine whether or not the current setup is a value-creating or value-destroying exercise, from the standpoint of the end consumers.  (Again, I’m ignoring all other aspects of leaf collection at this point.)  Does the value of the mulch, to the mulch consumers, exceed the value of the quality-of-life loss, to the neighborhood in which their mulch was produced?

What is the demand curve for leaf mulch?

The Town has over 200 mulch customers now, when mulch is free, and is delivered at taxpayer cost.  (This reference, page 6, .pdf).  The accounted for about 3500 cubic yards of mulch, delivered.  (Same reference, page 10, .pdf).

It’s not clear how many customers the Town would have if it began to charge for it.  For one thing, you can get free leaf mulch seasonally from Fairfax County.  (Wood mulch seems to be available year-round, but not leaf mulch.)  The downside of Fairfax mulch is that you have to pick that up yourself.  Fairfax used to maintain piles of it in many parks, but cut back on that during the pandemic.

At the other end of the spectrum, you can buy leaf mulch for $35/cubic yard, from Remington Mulch.  That would be delivered to your yard.

Given those options, it’s hard to see how many cubic yards of Town mulch would be demanded if customers had to pay for it.  Just for the sake of argument, let me assume that if they charged half the commercial rate (via Remington Mulch), they’d have about half the demand they currently have.

Under that heroic, un-tested, and data-free assumption, the Town could plausibly collect (3500/2 cubic yards x 35/2 dollars per cubic yard =) about $30,000. 

Conveniently, there are about 20 homes that directly abut the area where the leaves are ground.  As long as we’re just running a hypothetical, let me make that my target population of homes to which payment would be made, to pay for the loss of quality-of-life caused by the mulching.

So, this narrow value question boils down to this:  Would (say) the majority of affected homeowners be willing to exchange a $1500 per year payment, in return for keeping the mulch operation just as it is now?

There’s no way to tell that without asking them.  But based on my impressions from the presentations and materials that I’ve seen, I’d bet not.  I’m betting that the value of the mulch, to the end consumers of that, is substantially less than the value of the loss of quality of life to the neighborhood surrounding the mulch operation.

In round numbers, viewed solely as a source of free mulch for Town residents and others, this is probably a value-destroying operation.  The money value of the harm caused to the adjacent neighborhood plausibly exceeds the money value of the mulch that is distributed as a result.

There’s no way to know for sure unless you actually fill in those missing markets.  That is, implement such a program of using mulch revenues to reimburse homeowners in the affected neighborhood.  But that’s unlikely to happen, so all you have is the sort of guesswork that I’ve done above.  And, based on what I’ve seen — based on the anger and frustration of those most strongly affected by this — no plausible revenue stream from Town mulch sales is likely to make those residents happy with the status quo.

A weird epilogue, or, why are we even still fighting about this?

I like a decades-long bitter conflict as well as the next guy.  But honestly, either I’m mis-reading that contractor’s report cited above, or it’s well within the Town of Vienna’s ability to cease grinding leaves in that neighborhood.

That conclusion appears new, and seems to be due, in part, to the Town finally getting a plausible estimate of current costs, instead of the purely-accounts-based estimate it had been using previously.  (The prior estimate was ludicrously low compared to costs reported by other jurisdictions in this area.)

So, when I see this table, in the contractor’s report, showing current costs and costs under two alternatives:

Source:  The same document that I’ve already cited twice, above, page 16, .pdf).

I’m like, this is a no-brainer.

First, “short haul” means shutting down the grinding at Beulah Road, but still collecting leaves there.  Compared to current costs, you have an immediate cost savings if you shut down the grinding operation.  Total operating cost would fall by about $70,000 per year.  That’s almost exactly what the “Restore Beulah Road Park” advocates have been saying.

And now I finally understand why one Town Council member seems to be digging in his heels over the “free mulch” issue.  Because a) the only thing going for maintaining the current approach is that some people get “free” mulch, but b) if you look at the numbers, that “free” mulch isn’t free.  That 3500 cubic yards of mulch, that the Town gives away, actually costs the Town the $70K, the difference between the first two options above.

Second, the “Direct Haul” option shuts down both the grinding and stockpiling of leaves at Beulah Road, and (in theory) allows that to be returned fully to its prior park status.  With that option, you only get $40K in operating cost savings, and you have a big up-front capital expense.

That said, a) capital spending in this case would be covered by the meals tax (Post #1108), so this would be a net reduction in operating costs (covered by , e.g., property taxes).  And, depending on the lifetime of those trucks, that could be very nearly a wash, cost-wise, in total.  It’s not quite worth doing the calculation in full detail, but if there’s a 20-year life span, you’d be talking about a capital cost of maybe $65K/year.

In short, a total additional payment by the Town, of something like $25K per year, made out of meals tax revenues, would allow the Town remove this burden on this neighborhood and allow this eight-acre property to revert to being a park.

You will never find a cheaper source of park land in the Town of Vienna, that’s for sure.  And given the rapid run-up in real estate prices lately, there’s no doubt that the Town could easily afford to fix this long-standing problem.

With the Town of Vienna, it’s not a done deal until it’s a done deal.  And so, I suspect that the folks who have agitated for a change will need to continue to agitate, lest this get put aside and forgotten.  And, if nobody had bothered to agitate for it, I’m pretty sure the Town would have kept ignoring it, broken tub grinder or no broken tub grinder.  But I have to say, at this point, I think that agitation should pay off.

But what about the free mulch?  I would go one step further, if it were up to me.  If the Town goes with the long-haul option, we’re going to have a lot if idle trucks around.  I’d have those trucks stop off and pick up Fairfax County free leaf mulch.  And make modest piles of that readily available to Vienna residents, in the parks, as Fairfax does.  That’s not as good as having it delivered to your door, but it would be a nice gesture toward Vienna residents who use Town mulch now.