Solid waste division workers Travis Lindquist, left, and Derrick Jackson empty containers into the back of a trash truck as they make their rounds Thursday on Thorn Tree Court in west Lawrence. Recommendations are being made by the city’s Sustainability Advisory Board to charge residents based on the amount of trash they throw away.

More automated trucks, more sophisticated rates and more oversight of how long city trash crews are required to work all should be considered to help reduce a $500,000 shortfall in the city’s solid waste division.

City Auditor Michael Eglinski on Friday released the results of his performance audit on the city’s trash collection operations, and said mounting deficits in the division should cause city leaders to study options for the service.

“It serves everybody in the community and it is an important service,” said Eglinski. “The financial condition it is in is troubling. We can’t continually sustain deficits.”

The city trash service has been operating at a financial loss since 2005, and the loss hit a high of $513,618 in 2008.

Among the major findings of the audit are:

• City management should study whether more automated trash trucks could reduce the overall cost to operate the systems. The automation systems available range from trucks that have mechanical arms that reach out to the curb to grab trash containers to trucks that use hydraulic lifts that eliminate the need for as much physical labor from crews. The city’s current trucks are equipped with such lifts, but the city does not require residents to use the special poly carts that can be placed on the lifts.

• A study should be conducted on whether the city would benefit by changing its rate system so that people are charged more based on the amount of trash that they throw away.

• Managers should do more to monitor an incentive system that allows trash crews to work less than an eight-hour day but still receive pay for eight hours, if they complete their routes early and to their supervisors’ satisfaction.

Eglinski said the city’s system for tracking how many hours are forgiven under that system is lacking. Trash crew employees are required to clock in and out, but managers traditionally have not created regular reports detailing how large of a gap there is between hours worked and hours paid.

Eglinski examined time cards for 1,757 workdays to estimate that sanitation crews are working about 6 hours per day. The audit, however, did not recommend the city eliminate the program. Eglinski said there are other municipal trash services that use a similar incentive, but he said city managers should have more data about the program to better evaluate it.

Eglinski said the solid waste division also needs to review its practice for handling overtime. The division pays workers overtime anytime they work more than 8 hours in a day, even if they do not work more than 40 hours in a week. That is more than federal law requires, and Eglinski said the division should have a formal written policy explaining the overtime benefit.

City Manager David Corliss said he agrees with the audit’s major findings, and said he plans to undertake a study of automation and rate issues. He also said the city is working to update the citywide system employees use to record their hours, which will make it easier to manage.

But Corliss said he does think the division’s incentive system allowing workers to leave early, has benefits for the city. He said the incentive is reasonable given the pay and working conditions of trash crews. Solid waste loaders make, on average, $36,800 per year, while solid waste operators have average salaries between $47,000 to $53,000.

“If we didn’t have the incentive, it may not be difficult to hire people, but it would be tough to retain them,” Corliss said. “People may think they can do the job, and then they start doing it and talk becomes cheap after about the third street.”

City commissioners are expected to review the audit at their Feb. 2 meeting.