Local government looking for advice on trash removal

I am sure its going to be a lot of variations, but to comment on your specific questions.
It depends on what the city expects. Do they want all 500 households serviced in one day? Twice per week pickup or 3 times per week pickup?
If you have to pick up 500 houses a day, no..... One truck wont get that. Possibly twice per week pick up, but now you need to schedule two routes at minimum. Monday & Thursday for route one....... then Tuesday & Friday for route two.
If they want 3 day a week PU, You will be working a 6 day week.
Now you have to consider what you're going to do if a tuck breaks down. You cant just run down to Ryder and rent a garbage truck.

Is the city expecting someone to cover residential & commercial accounts?
In other words, servicing a residence with a one cubic yard container (which you will have to provide more than likely).

If they expect you to service business's, schools, courthouse/jail, walmart, Car dealers, body shops etc, etc.... they will need frontend load cans as well as some will need roll-off cans, especially construction companies that build new buildings, like houses & commercial buildings within the city limits.
Some companies also will expect you to be able to take care of brush/limb/bulk item pick up. That's an extra truck & trailer.

Now you need trucks to service these specialty containers.
Frontend load garbage trucks & a truck to deliver, pick up and change out these front load cans.
Roll-off containers will need roll-off trucks obviously.

You'll need a location zoned and large enough for parking as well as office personnel & a shop to work on trucks. You WILL need a shop & mechanic... probably (plural) mechanics.

You'll need a contract with at least one landfill... possibly more landfills depending on what commercial accounts you have & the waste you intend to haul. You'll also need a person who knows the rules & regs on waste, how to handle it & deal with it & DEQ.

You're going to need several thousand $$ in the bank for federal regs including DOT inspections as you will encounter many inspections & violations per year.

Again, as I mentioned above, more than likely when the city contracts with a waste company, generally you will be responsible for providing all aspects of the service including containers.
That will be something you will have to buy MONTHS prior to providing services or collecting payment for services.
I dont know what residential containers cost but 20 years ago, they were about $75 each... X 500, plus extra containers.
Then you need an employee & a 3/4 ton truck with a trailer to to deliver, pickup & replace containers.
A rolloff container depending on size....... 10, 11, 20, 30 or 40 yard container costs in the thousands of dollars each.
Rolloff self contained food compactors for grocery stores and such are in the tens of thousands of dollars each, plus having them installed.

I haven't even touched on a lot of the behind the scene costs:
Insurance of all sorts
DOT / FMCSA
DEQ
OSHA
Workmans comp
Local, state & fed labor laws
Taxes...

And all of this will commence, weeks if not months before you pick up even one bag of trash........

Just know what your getting into. Its a highly regulated industry. And once you sign that contract, you better be able to provide the service you agree to provide or we will need to add in attorneys costs for that. You'll certainly need an attorney to help you with many things prior to a contract dispute.