A version of the following commentary appeared in the St. Louis Post-Dispatch.
University City is facing significant budget problems this year, driven in large part by costs associated with things the city does itself that private companies could better handle. As a resident of University City who works for a free-market policy organization that often supports government privatization, you can imagine my reaction to being given the opportunity to put my knowledge to work for my hometown. “Like a kid in a Delmar-Loop candy store” would be the quickest analogy.
There are numerous problems with the finances of University City, as documented in the August 16 article in the St. Louis Post-Dispatch. Costs are rising, financial reporting is questionable, tax- and bill-collection practices are subpar, and experienced financial personnel are leaving (although perhaps the city is better off without the personnel who got the city into this situation).
The mayor doesn’t seem troubled by the problems, confident the new city manager will have the ship righted shortly. I hope he is correct. But city officials should take this opportunity to address some long-term problems by considering changes to how the city operates. University City used to be the largest city in St. Louis County by population, was second for several decades, is now third, and is trending downward.
The largest cause of University City’s financial problems is trash. The city operates its own sanitation service and doesn’t charge enough to cover its costs, because trash customers are also voters and politicians respond to incentives like everyone else. To cover the shortages, other city departments have been “loaning” money to the sanitation department for years. Of course, when Peter is loaning money to Paul, Peter often doesn’t get paid back. According to the most recent city audit in 2024, the trash service owes the general fund $2.7 million. This is on top of $1 million in unpaid trash bills the city has not collected. (My family’s trash bill is current.)
University City does not have to be in the trash business at all. Many municipalities throughout Missouri outsource trash collection. The most common system is for a city to bid out its trash collection to a private operator. Several of University City’s neighboring municipalities, including Clayton, Olivette, Overland, and Pagedale, contract with Republic Services for their residential trash pick-up. (Commercial and multifamily-building trash pick-up is usually left up to the businesses or apartment managers.) While Republic has the most municipal contracts in the county, there are several other competitors in the business (thankfully). Webster Groves, for example, contracts with Waste Management. St. Louis County contracts with multiple private haulers for various unincorporated parts of the county.
The financial benefits of outsourcing sanitation services come from the increased efficiency of the private sector and reduced long-term employment costs for the public employees. Do you think a private trash provider would have $1 million in uncollected bills? Granted, charges for the private service might have to increase. Clayton, in fact, just increased the fees for trash service in Clayton via Republic Services. That isn’t a bad thing. Services cost what they cost, and the community doesn’t benefit from artificially holding down prices or not collecting bills for political purposes. (Admittedly, the people who don’t pay their bills may benefit.)
Outsourcing trash service is not the same as washing one’s hands of it. The municipality ensures the company is living up to the service standards in the contract. Furthermore, the city must re-bid the contract at regular intervals in order to maintain the competition that drives costs down. Ballwin forgot that last part a while back when it went over a decade without re-bidding its contract with Republic Services. Without competition, the city lost the cost savings from outsourcing. Thankfully, Ballwin has since corrected that problem.
The trash service isn’t the only thing that University City should outsource or privatize. University City operates its own golf course in Ruth Park instead of contracting that out as many cities do. The public golf courses nearby in Forest Park in the City of St. Louis are all privately managed. The Ruth Park driving range owned and operated by the city has been a financial disaster in recent years due to bad management decisions.
I have lived in University City for 30 years. Being a great community doesn’t mean the city has to provide every service. University City is currently studying whether to merge its fire department operations with those of several other cities to save money. I think that is an idea well worth studying, but it would be a major, complicated change. University City should grab the low-hanging fruit of trash service and golf-course outsourcing in the meantime.
