Each budget season, multifamily operators spend weeks reviewing the numbers that will shape the next year. They look at insurance premiums, adjust payroll projections, review maintenance costs, and check contracts for ways to control spending. Even small increases can spark long discussions when spread across a whole portfolio.
But one expense often gets little attention during budgeting: waste hauling.
Many owners and managers treat waste costs like a property tax bill. The bill arrives each month, the amount is entered into the accounting system, and next year’s budget is based on this year’s spending, sometimes with a small increase for inflation.
This approach assumes operators have little control over the expense.
In fact, several factors affect waste hauling costs, and some can be changed. Container size, collection frequency, contract terms, recurring fees, and waste management all affect the final cost.
Waste is a controllable operating expense. For multifamily leaders who want to improve financial results, budget season is a good time to start treating it as such.
Why Last Year’s Waste Budget May Be the Wrong Starting Point
Of course, we know that looking at past spending is important for any budget. It sets a baseline, shows trends, and helps operators plan for future costs. But using last year’s waste costs without checking what caused them can let old inefficiencies continue into the next budget.
For example, a community might pay extra overage charges every month and start seeing them as normal. Another might pay for five collections a week, even if their containers are rarely full. In other cases, fuel or environmental fees may have gone up slowly without anyone noticing.
If these costs are just added to next year’s budget, the same issues that caused them will continue.
Regional and asset managers who oversee several communities need to figure out which costs are needed and which should be reviewed. This means understanding what services are being paid for, how they are used, and if the current setup still makes sense financially.
Budget Season Is When Small Decisions Become Annual Expenses
Timing is important, because many decisions are made before the new fiscal year starts.
Hauling contracts might be up for renewal. Collection schedules may continue without changes. Expense projections are sent for approval, and there are often few chances to make big changes after the budget is set.
A small monthly fee might not seem important when processing invoices, but it adds up over a year, especially across many communities.
For instance, an extra $150 a month at 40 communities adds up to $72,000 a year. This might be justified by the services provided, but it’s still important to know what is causing the charge.
Reviewing waste costs before budgeting gives operators time to look into these expenses before they become part of next year’s financial plan.
Three Things to Review Before Finalizing Your Waste Budget
You don’t need to completely redo every hauling contract to start a useful review. Begin by looking at three areas that can directly affect spending across your portfolio.
1. Hauler Contract Terms and Renewal Dates
Waste hauling agreements can contain renewal provisions, annual price adjustments, notice requirements, and other terms that affect an operator’s ability to make changes.
Before finalizing next year’s budget, identify when each agreement renews, whether it renews automatically, and what notice may be required to modify or terminate service.
This is very important for portfolios that operate across multiple markets. Agreements may have been negotiated at different times, under different conditions, and with different service requirements.
Understanding those terms early provides a more realistic picture of which expenses can be adjusted during the coming year and which may require longer-term planning.
2. Fuel, Environmental, and Recurring Service Fees
The basic hauling rate usually doesn’t paint a complete picture.
Fuel surcharges, environmental fees, overages, contamination charges, and other recurring expenses can influence the actual amount paid each month. Some charges are contractual, some reflect legitimate operating costs, and others may fluctuate based on service conditions.
The key is to ensure these charges are understood and accurately reflected in the budget.
Looking at several months of invoices can reveal increases that might be missed when reviewing bills one at a time. Operators should watch for recurring fees, changes in surcharges, and charges that show up across different communities.
Not every fee can or should be removed. Still, knowing which costs are predictable, which change, and which can be managed helps make financial planning more accurate.
For a closer explanation of these charges, see our earlier article, The Fees Quietly Inflating Your Waste Spend — and What Each One Means.
3. Service Levels Across the Portfolio
Waste hauling needs can change over time.
Occupancy fluctuates, recycling participation evolves, and resident behavior affects how much waste reaches centralized collection areas. Communities may also introduce valet trash, recurring bulk removal, or other services that change how waste is collected and managed.
Even with these changes, hauling setups often stay the same for years.
A portfolio-wide review should examine whether container capacity and collection frequency still correspond with actual usage. Communities experiencing repeated overages may need a different approach, while others may be paying for more service than their waste volume requires.
The goal is to review service levels across the whole portfolio, not just react to one overflowing or empty container.
Our previous article, Right-Sizing Isn’t About One Overflowing Dumpster, explores how operators can identify these mismatches and determine where service adjustments may be appropriate.
Getting a Real Number Instead of a Budget Estimate
One of the main challenges in managing waste costs is getting an accurate starting point.
For portfolios operating across multiple markets, waste charges may appear on different invoice formats, through national account arrangements, or as part of utility bills that also include water and sewer. Some communities may have clearly identified hauling expenses, while others have costs spread across several accounting categories.
This makes it hard to know exactly how much the portfolio spends on waste.
Before finishing the budget, operators should try to get a clear view of total hauling costs, cost per unit, recurring fees, service levels, and key differences between similar communities.
Ideally, this review should cover 12 months of past invoices. Looking at a full year helps account for seasonal changes, shifts in occupancy, and costs that only show up sometimes.
With this information, budget talks are more productive. Instead of assuming a community needs to spend more on hauling, leaders can confirm whether the current service is right and what’s driving the costs.
A solid starting point also makes it easier to track the financial impact of changes during the year.
The Numbers Identify the Opportunity. Operations Determine the Outcome.
Invoice reviews can show where waste costs are unusually high, where recurring fees need attention, and where hauling services may not fit current needs.
But just spotting an opportunity doesn’t guarantee savings.
A community with repeated overages may need containers leveled and staged more effectively before collection. Another may benefit from scheduled bulk removal to keep over-sized items from consuming regular waste capacity. Elsewhere, a review may indicate that hauling frequency or container capacity should be adjusted.
Making these changes takes hands-on work, coordination, and ongoing attention to waste management.
This is the difference between knowing your waste costs and actually controlling them.
Ally Waste’s WasteOps platform helps operators review historical hauling invoices across their portfolios and identify expenses worth investigating. Ally’s on-site waste management teams can then help address the operational conditions contributing to those costs.
This combination matters because a more accurate budget is only one goal. Operators also need practical ways to improve what’s happening behind the numbers.
Make Waste Part of the Budget Conversation
Waste hauling might not get as much attention as insurance or payroll, but it still deserves a careful financial review.
For multifamily ownership and management groups, the opportunity lies in questioning assumptions that have become routine. Are service levels still appropriate? Do recurring fees reflect unavoidable costs or conditions that could be improved? Are hauling agreements aligned with current community needs? Does leadership have a reliable picture of waste spending across the entire portfolio?
These are good questions to ask before signing off on another year of expenses.
The answers might show ways to cut costs, improve service, or just make the budget more accurate. Even if a cost is justified, knowing why it’s there is helpful.
As you plan for next year, waste should be part of the same discussions as other controllable expenses.
If you’re working on your next operating budget and want to better understand your waste costs, request a free waste spend audit. It’s a practical first step to see which expenses need a closer look before you finalize your budget.