Office or Solid Wasie
            Emergency Response
April 1934

 Lessons Learned About
 Unit Pricing

                           •'eanola mk an

Pay-As-Yo u -Th row

Lessons Learned About Unit Pricing of
Municipal Solid Waste
Prepared by

Janice L. Canterbury
U.S. EPA Office of Solid Waste

                                                                          I   I L.—7
               The following state, county, and local officials and private consultants contributed
               their expertise in unit pricing programs to EPA's Unit Pricing Roundtable and to the
               development of this guide:

               Nancy Lee Newell, City of Durham, North Carolina
               Peggy Douglas, City of Knoxville, Tennessee
               Barbara Cathey, City of Pasadena, California
               Bill Dunn, Minnesota Office of Waste  Management
               Nick Pealy, Seattle Solid Waste Utility
               Jody Harris,  Maine Waste Management Agency
               Jamy Poth, City of Austin, Texas
               Jeanne Becker, Becker Associates
               Lisa Skumatz and Cabell Breckinridge, Synergic Resources Corporation
               Lon Hultgren, Town of Mansfield, Connecticut
               Greg Harder, Pennsylvania Department of Environmental Resources
               Thomas Kusterer, Montgomery County Government, Maryland
               Robert Arner, Northern Virginia Planning District Commission

               Their assistance is greatly appreciated.

About This Guide    ...........    vi
Key to Symbols      	viii

PART I:  Is  Unit Pricing Right  for
Your Community?	I

What Is Unit Pricing?	2
Potential Benefits to Unit Pricing	3
Potential Barriers to Unit Pricing      ........    4
Types of Communities That Can Benefit From Unit Pricing   ....    5
Making a Decision About Unit Pricing      .......    6

PART II:  Building Consensus and Planning for
Unit  Pricing	10

Setting Goals and Establishing a Unit Pricing Team       .....    11
Addressing Barriers   ...........    12
Building a Public Consensus      .........    13
Scheduling Your Planning Activities	15

PART III:  Designing an  Integrated
Unit  Pricing Program	19

The Building Blocks	20

Volume-Based Versus Weight-Based  Programs	20
Container Options    ...........   22
Pricing  Structures    ...........   24
Billing and Payment Systems      .........   26
Accounting Options   ...........   26
Program Service Options   ..........   27
Multi-Family Housing      	29
Residents With Special Needs	30

               Putting the Blocks Together	34

               Step 1: Estimating Demand      .........   35
               Step 2: Choosing Components   .........   36

               Step 3: Estimating Costs    ..........   37
               Step 4: Developing a Rate Structure   ........   37

               Step 5: Calculating Revenues    .........   38
               Step 6: Evaluating and Adjusting the Program     ......   38

               PART IV:  Implementing and Monitoring
               Unit  Pricing	45

               Implementation Activities   ..........   46
               Public Education and Outreach   .........   47
               Reorganizing Your Solid Waste Agency's Administration      ....   50
               Developing a Schedule      ..........   52
               Program Monitoring and Evaluation    ........   52

               APPENDIXES	63

               Appendix A: Unit Pricing Roundtable Discussion: Questions and Alternatives     63

               Appendix B:  Putting the Blocks Together: Additional Examples     ...   79
               Appendix C: Definitions    ..........   83
               Appendix D: Bibliography       .........   85


In December 1992, as part of the U.S. Environmental Protection Agency's (EPA's)
efforts to disseminate information about potential solutions to solid waste
management issues, the Agency organized a gathering of experts and local officials
involved in unit pricing programs. The Unit Pricing Roundtable resulted in a
wide-ranging discussion of the benefits and barriers associated with unit pricing
programs. This guide is based on the insights gained from that meeting.

Pay-As-You-Throw: Lessons Learned About Unit Pricing of Municipal Solid Waste is designed
to help local solid waste administrators and planners, elected officials, community
and civic groups, environmental and business organizations, and  others find an
answer to the question, "Is unit pricing a viable option for our community, and, if so,
how do we implement it?"

Since communities differ in  size, demographics, governing jurisdiction, and other
factors, this guide presents lessons  learned in a variety of communities that have
implemented unit pricing.  As such, decision-makers can use the  guide to chart a
course through the issues and potential obstacles involved in launching a unit pricing
program and tailoring it to meet the specific  needs and goals of the community.

In addition to information drawn from the Roundtable, the guide is derived from
data on dozens of existing unit pricing programs in communities  of varying sizes and
demographics.  Case studies showcase differences in the types of collection systems,
fee structures, and complementary programs that can accompany unit pricing
programs. The guide also reflects information extracted from available literature, as
well  as direct advice from experts in the field.

               The process of considering, planning, and implementing a unit pricing program is a
               process of moving from general to specific notions of addressing waste management
               issues. After considering long-term solid waste goals and options and how unit
               pricing might help achieve them, decision-makers must move on to broad system
               planning and finally to specific details. This guide is designed to mirror that process
               of increasing specificity.  It  is divided into four parts:

               Part I: Is Unit Pricing Right for Your Community?
               Part I  offers an introduction to the concept of unit pricing, helps readers decide
               whether unit pricing holds  enough promise for their communities to  merit continued
               investigation and study, and provides an  overview of the organization of the guide.

               Part II: Building Consensus and  Planning for Unit Pricing
               Part II focuses on creating a framework for a successful system. It describes how to
               establish goals, build a consensus for change within the community, make a decision
               to pursue a unit pricing strategy, and perform basic planning tasks for the new

               Part III: Designing an Integrated Unit Pricing Program
               Part III introduces solid waste officials to unit pricing program options, including
               container type and size, pricing structures, and billing systems. It also presents a
               six-step process for selecting options and designing a rate structure that will best
               address the community's unit  pricing goals.

               Part IV: Implementing and Monitoring Unit Pricing
               Part IV guides communities through the  process of launching their unit pricing
               program. While implementation often requires an ongoing series of tasks, this part
               focuses  on the central issues: providing public education and reorganizing the  solid
               waste agency's administrative office. Part  IV also discusses ways to collect and
               analyze data regarding the  performance of the program.
               To meet the needs of many decision-makers, this guide has been designed to be
               modular in approach.  Solid waste officials with little experience with unit pricing will
               want to read the entire guide carefully.  Decision-makers who are somewhat familiar
               with unit pricing might want to skim Part I, while carefully studying the remainder of
               the guide.  Those individuals with a good understanding of the pros and cons of unit
               pricing might proceed directly to the design and implementation guidelines offered in
               Parts III and IV.

To help readers focus on key issues, symbols are used throughout the guide to
indicate the themes and concepts that are central to  unit pricing.  These are:
There are no universally applicable guidelines that must be followed when
developing a unit pricing program.  All unit pricing options offer their own
set of advantages and disadvantages.  When designing a unit pricing pro-
gram, decision-makers need to weigh these factors and choose the course
of action that best suits the needs of their communities.
            Involving and educating the public is key to the success of any unit
            pricing program.
One of the biggest issues associated with unit pricing programs concerns
the costs to design and implement a program.  Residents also will be con-
cerned about waste collection fees.

EPA has established a hierarchy identifying the preferred methods for
managing solid waste. At the top of the hierarchy is waste prevention.
Recycling (including composting) is the next preferred technique, used
for managing the waste that cannot be prevented.  Finally, landfilling and
combustion can  be used to dispose of the remaining waste.

Decision-makers will need to address some potential hurdles to imple-
menting unit pricing.  These include recovering expenses, increased
administrative costs, perception of increased costs being passed on to
citizens, and illegal dumping.

Is  Unit  Pricing  Right for  Your
       ver the past several years, many communities across
       the United States have found it increasingly difficult
       effectively and economically manage their municipal
       solid waste  (MSW). Against a backdrop of steadily
rising waste generation rates, many communities have seen
their local landfills closing, tipping fees rising, and prospects
for siting new disposal facilities diminishing. Other demands 01
waste management systems include growing public awareness
of general environmental issues, as well as state and locally
legislated waste  prevention and recycling goals.
In response, many communities have begun adopting new
approaches to waste management, such as collecting materia
for recycling; composting yard trimmings and other organic
materials; and conducting education programs intended to he*
residents understand the need for waste prevention and
recycling. In addition, recognizing that market-based
approaches are proving to be important tools in dealing with
environmental issues, some communities have turned to
economic incentives to encourage residents to prevent waste
whenever possible and recycle or compost the remainder.
One such incentive system is unit pricing.
                            IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?

What Is  Unit F

By encouraging residents
to prevent waste and
recycle whenever
possible, unit pricing is
helping communities to
better manage their solid
   Traditionally, many communities in the United States have paid for
waste management services through property taxes or through an annual
fee charged to each household. The cost per residence remains constant
regardless of differences in the amount of waste generated. This creates
the mistaken impression that MSW management is free.

   Unit pricing, also known as variable rate pricing or pay-as-you-throw,
is a system under which residents pay for municipal waste management
services per unit of waste collected rather than through a fixed fee. Unit
pricing takes into account variations  in waste generation rates by
charging households or residents based on the  amount of trash they place
at the curb, thereby offering  individuals an incentive to reduce the
amount of waste they generate and dispose of.

   Unit pricing programs can take two basic forms. Residents can be
charged by:

                    • Volume of waste, using bags, tags or stickers,
                      or prescribed sizes of waste cans.
                    • Weight of waste, with the municipality
                      measuring  at the curbside the amount of
                      waste set out for collection.
                       While they  operate differently from one
                    another, these systems share one defining
                    characteristic: residents who throw away more pay

                       If the basic concept of unit pricing is
                    straightforward, however, the decision to adopt
                    such a program is far from simple. To help
                    communities considering unit pricing as a solution
                    to their mounting solid waste management
                    difficulties, EPA convened a Unit Pricing
                    Roundtable, attended by  representatives from
communities that had implemented unit pricing or were actively
considering  it. EPA then organized the resulting wealth of ideas and
advice to produce this guide. EPA designed the guide to  help readers
determine whether unit pricing is a viable option for their community
and, if so, which factors to consider when  planning and implementing
such a program.


   Communities that have adopted unit pricing programs have reported
a number of benefits, ranging from reductions in waste generation to
greater public awareness of environmental issues. These benefits include:

   Waste reduction. Unit pricing can help substantially reduce the
   amount of waste disposed of in a community. Some communities
   with unit pricing programs report that unit pricing helped their
   municipality achieve reductions of 25 to 45 percent in the amount of
   waste shipped to disposal facilities.
   Reduced waste disposal costs.  When the amount of waste is
   reduced, communities often find their overall MSW management
   costs have declined as well. (A portion of the revenues previously
   spent on waste disposal, however, may need to be dedicated to
   recycling, composting, or other diversion activities.]

   Increased waste prevention. To take advantage of the potential
   savings that unit pricing offers, residents typically modify their
   traditional purchasing and consumption patterns to reduce the amount
   of waste they place at the curb. These behavioral changes have
   beneficial environmental effects beyond reduced waste generation,
   often including reduced energy usage and materials conservation.
   Increased participation in  composting and  recycling programs.
   Under unit pricing, new or  existing recycling and yard waste
   composting programs become opportunities for residents to
   divert waste for which they otherwise would pay.  Experience has
   shown that these programs  are the perfect complement for unit
   pricing: analysis of existing unit pricing systems shows that
   composting and recycling programs divert 8 to 13 percent more waste
   by weight when used in conjunction with a unit pricing program.

   Support of the waste management hierarchy. By creating an
   incentive to reduce as much waste as possible using source reduction
   and to recycle and/or compost the waste that cannot be prevented,
   unit pricing supports the hierarchy of waste management techniques
   defined by EPA.
   More equitable waste management fee structure. Traditional
   waste management fees, in  effect, require residents who generate a
   small amount of waste to subsidize the greater generation  rates of
   their neighbors. Under unit pricing, waste removal charges are based
   on the level of service the municipality provides to collect and
   dispose of the waste, similar to the way residents are charged for gas
   or electricity. Because the customer is charged only for the level of
                                             IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?

   service required, residents have more control over the amount of
   money they pay for waste management.

   Increased understanding of environmental issues in general.
   Through unit pricing, communities have the opportunity to explain
   the hidden costs of waste management. Traditional waste
   management systems often obscure the actual economic and
   environmental costs associated with waste generation and disposal.
   Once individuals understand their impact on the environment, they
   can choose to take  steps to minimize it.
Potential  Barriers to Unit  Pricing
   While there are clearly benefits associated with unit pricing
programs, there also are potential barriers. Communities considering unit
pricing should be aware of the costs and possible community relations
implications associated with the following issues:

   Illegal dumping. Some residents have strong reservations about unit
   pricing, believing it will encourage illegal dumping or burning of
   waste in their area. Communities can counter this fear with an
   effective public education program. Since most communities with
   unit pricing programs have reported that illegal dumping proved to
   be less of a concern than anticipated, providing residents with this
   information can help allay their concerns over illegal dumping.

   Recovering expenses. Since unit pricing offers a variable rate  to
   residents, the potential exists for uneven cash flow that could make it
   harder to operate a unit pricing program. To address this,
   communities must be sure to set prices at the appropriate level to
   ensure that, on average, sufficient funds are raised to pay for waste
   collection,  complementary programs, and special services.
   Administrative costs. Effectively establishing rates, billing
   residents, and collecting payments under a unit pricing program will
   likely increase a waste management agency's administrative costs.
   Communities need to set waste collection prices at a level that can
   cover these costs.
   Perception of increased costs to residents. While a unit pricing
   program offers residents greater control over the cost of collecting
   their waste, it could initially be seen as a rate increase. An effective
   public outreach campaign that clearly demonstrates the current costs
   of waste management and the potential reductions offered by unit
   pricing will help to address  this perception.
   Multi-family housing. Extending direct waste reduction incentives
   to residents of multi-family  housing can present a challenge. Since
   waste generated by these residents typically is combined in a central

   location to await collection, identifying the amounts of waste generated
   by individual residents in order to charge accordingly can be difficult.
   Communities must experiment with rate  structures and collection
   systems to encourage residents of multi-family housing to reduce waste.
   Building public consensus. Perhaps the greatest barrier to realizing
   a unit pricing program is overcoming resistance to change, both
   among citizens and elected officials. Informing residents about the
   environmental and economic costs of current waste generation patterns
   can help overcome this resistance and build support for unit pricing.
      Careful planning and design of a unit pricing program to meet
   specific community needs is the best solution to these potential
   difficulties. In particular, an effective public education program
   designed to communicate the need for unit pricing and address the
   potential concerns of residents will help  meet these challenges. (Public
   education programs are discussed in detail in Part IV of this guide.]
   Unit pricing programs work best when tailored to local needs. All types
of communities can design unit pricing programs that will help achieve the
goals of reducing waste generation and easing waste management
difficulties; large, medium-sized, and small
communities in every region of the
country have realized these benefits.
Local officials indicate that unit  pricing
programs also work well whether solid
waste services are carried out by
municipal or by private haulers.

   As a result, unit pricing has grown
significantly over the last few years. In the
1980s, only a handful of communities in
the United States operated unit pricing
programs. Now, over  1,000 communities
have unit pricing programs in place. By
January 1994, over 1,800 programs are
scheduled to be in operation. In addition,
laws in 10 states currently mandate or
encourage unit pricing programs.
                                                                             services based on
                                                                              durnfosters and
               it for
                                                IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?

   After considering this overview of the benefits and barriers to unit
pricing programs, decision-makers who believe unit pricing could
work in their community can turn to Part II of this guide and begin the
planning process. Decision-makers should carefully consider key
factors such as the types of services to offer, the associated costs, the
potential for complementary programs, the level of administrative
change necessary, and the extent to which residents will support or
oppose unit pricing.

Will this guide tell me what system to use and how to

No. This guide is intended to provide essential information about unit pricing and
to help you think about how well such a program would work in your community.
It will provide many suggestions borne of successful programs of all types and
sizes around the country. However, final decisions about whether to adopt unit
pricing, what type of system to use, and how to implement it should be made
based on local needs and circumstances.
How expensive is it to implement unit pricing?
The cost of implementing a unit pricing program is directly related to how
complex the selected system is, how it is financed, and how different it is from the
current waste removal system. Many communities have implemented unit pricing
with minimal upfront and ongoing costs. Over the long term, communities with unit
pricing programs have generally reported them to be cost-effective methods of
achieving their waste management goals.
A community introducing unit pricing may choose to use fees either to supplement
or to replace current revenue sources. While a community with a tight waste
management budget may choose to use unit pricing fees to supplement current
revenue sources, the public may resist such fees as simply an additional tax. Other
communities stress that local acceptance of a unit pricing program is greater if
current taxes, such as general or property taxes, are reduced by the amount of
the new solid waste fees.
                                                   IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?

Points  to
   Unit pricing requires residents to pay for each unit of waste that
   they dispose of. This billing arrangement is similar to fees assessed on
   other essential services (such as water and electricity), where the
   charge is based on usage.
   Unit pricing has been effective in reducing the amount of solid waste
   disposed of in all types of communities across the country.

   Communities using unit pricing in tandem with recycling and
   composting programs have found these programs increase each
   other's effectiveness.
   This guide is designed to provide basic information about planning
   and operating a unit pricing program. Decisions regarding the actual
   program you adopt will be based on your community's unique

                                                           Case  Studies
All Types of Communities Are Adopting Unit Pricing

Rural areas. Unit pricing is found in a number of rural communities. For ex;
pie, it has been implemented in High Bridge, New Jersey, which has a population
of 4,000, and in Baldwin, Wisconsin, which has a population of under 2,000.

Larger communities. While unit pricing is not yet common in the

land, California; Aurora, Illinois; Lansing, Michigan; Seattle, Washington; and a num-
ber of other communities with populations over 100,000.  In addition, state laws in
Minnesota, Wisconsin, and Washington either currently or soon will require im
mentation of unit pricing programs in communities statewide, regardless of size
(with some exceptions).

County-wide. Unit pricing also can be implemented on a county-wide basis.
Tompkins County, New York; Hennepin County, Minnesota; and King County,
Unit Pricing Cuts Down on Waste Volume
             me in waste generation from an average of 3.5 waste cans to 1.7
             lold per week after unit pricing was launched. This amount was
of complementary programs in Part III).

Most communities, however, cannot delineate what perce     of waste reduc-
tion is directly attributable to unit pricing and what percentage is due to other fac-
tors, such as new recycling programs, consumer education, or even economic
recession. Nevertheless, studies conducted over the last few years indicate consis-
tent waste reductions in unit pricing communities. For example, a study at
Duke University by Dr. Daniel Blume examined 14 cities with unit pricing. The
Wciste reductions in this study ranged from  18 to 6b percent. I he average Waste
reduction was 44 percent.
                                             IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?

Building Consensus and  Plannin,
for Unit  Pricing
                         nit pricing involves many important decisions
                         regarding how to perform and pay for solid waste
                         services. To be sure that their communities are
                         choosing the best options, many solid waste
                   agencies have initiated a planning process that helps lay
                   the groundwork for sound decisions and coordinated
                   implementation. This process helps clarify the
                   community's solid waste needs and goals, identify likely
                   barriers and methods  of overcoming them, and inform and
                   educate residents about unit pricing and how it can
                   improve solid waste management in the community.

    Solid waste management can be a confusing business, with success
measured against standards as varied as recycling diversion rates,
total costs, or even quality of media coverage. For this reason, the first
step when planning for unit pricing is to determine the goals of the
program based on a review of your community's solid waste
management needs and concerns. While goal-setting can at first seem
like an abstract exercise, clearly defined and measurable objectives for
your program are invaluable when deciding which unit  pricing
options would work best in your community. Goal-setting can help
build community consensus and facilitate efficient monitoring and
evaluation of the unit pricing program's progress.

    Although you will want to solicit input from local residents and other
interested parties before coming up with a final list of goals, it is useful to
first examine and prioritize goals  internally before introducing them to the
community. Consider holding an  internal brainstorming session to establish
a preliminary list of goals. This session could last anywhere from one hour
to half a day, depending on the size and makeup of your community, the
issues that need to be addressed in the session, and the needs  and
structure of your agency. A shorter, followup session to revisit, refine,
and prioritize goals also might be useful.

    Prioritizing goals also is important since the weight that you assign to
goals now will help you design the rate structure for the program.  (Setting
rate structures is described in Part III of the guide.) In addition, achieving
every objective on a community's list can be difficult. Consider the
tradeoffs among program costs, citizen convenience, staffing changes,  and
other factors as you prioritize your goals. Circumstances often require
compromise in one area in exchange for progress in another.

    Specific goals and objectives can vary significantly among
communities. Examples include:

    Encouraging waste prevention and  recycling. A community
    should set unit prices at levels high enough to encourage households
    to reduce waste generation and to recycle and compost. This helps to
    achieve existing recycling goals and to conserve landfill  space.
    Raising sufficient revenue  to cover municipal solid waste
    management costs.  A unit pricing program should bring in enough
    revenue to cover both the program's variable costs and its more stable or
    fixed costs. Variable costs, such as landfill tipping fees, are the expenses
    that fluctuate with changes in the amount of solid waste collected.
    Fixed costs are costs that change only rarely, such as rent for agency
    offices, or that change only after large-scale waste collection changes,
    such as the number of collection trucks needed.
                                           BUILDING CONSENSUS AND PLANNING FOR UNIT PRICING

     Establishing a
  clear set of goals
     for your unit
 pricing program is
  invaluable when
    deciding which
  program options
  will work best in
  your community.
   Subsidizing other community programs. A community might
   wish to generate revenues in excess of the actual costs for solid waste
   collection and then use those funds to enforce antilittering or illegal
   dumping laws, or to improve its recycling and solid waste infrastructure.
   Once your agency has established a list of preliminary goals, consider
setting up a unit pricing team or citizen advisory council to help you
refine and prioritize these goals. A unit pricing team typically  consists of
solid waste staff,  interested elected officials, civic leaders, and
representatives from affected businesses in the community. Team
members may be  solicited through advertisements in local newspapers
and on radio and television stations. Including these individuals in the
planning process gives the community a sense of program ownership.

   In addition, team members can help other residents in the community
understand the specifics of the program as it evolves and can provide your
agency with valuable input on residents' concerns about the program.
Members of the team also can serve as a sounding board to help ensure
strong community participation throughout the planning process.
A unit pricing team composed
of residents, civic leaders, and
town officials can help ensure
the development of a
successful unit pricing prc
   The team or council also can help your agency identify potential
barriers to implementing unit pricing in your community and consider
ways in which these barriers can be addressed. Illegal dumping and
burning of waste is one of the mostly frequently cited barriers to unit
pricing. Yet participants at EPA's Unit Pricing Roundtable and
                        communities with unit pricing programs report
                        that illegal dumping has occurred prior to
                        implementing a program and tends to persist at
                        some level, regardless of the way in which
                        residents are charged for solid waste

                           The key is to design a unit pricing program
                        that  significantly deters illegal dumping and
                        burning. Public education and enforcement
                        policies are the most effective tools in
                        addressing this barrier. Informing residents of
                        the experiences of communities with unit
                        pricing and setting up fair but aggressive
                        enforcement policies to respond to incidents of
                        illegal dumping also are essential.

   Other potential barriers to unit pricing include recovering
expenses, covering administrative costs, ensuring that unit pricing is
not perceived as  a rate increase by residents, implementing unit
pricing in multi-family buildings, addressing physical or financial
difficulties  for senior citizens, and overcoming resistance to changing

the status quo. (Part III of this guide provides an in-depth discussion of
barriers and specific strategies for overcoming them.)

    Once both the municipal solid waste agency and the unit pricing
team or council have evaluated specific goals and barriers, it is time to
unveil the program to the city at large. The team or council might
consider developing a preliminary proposal with several program options.
This proposal can serve as a basis for public discussion and help
illustrate what changes might occur.
   Public education is critical to the planning, design, and
implementation stages of a unit pricing program. In fact, education is the
linchpin holding all of these phases together. While educating the public
might at first seem unnecessary and expensive, the experiences of
communities that have implemented unit pricing programs indicate that
a good public relations program more than pays for itself.

   Such a program is effective at developing a
general consensus among residents on the need
for unit pricing. Community support is vital to the
long-term success of a unit pricing program. In
fact, communities that have implemented unit
pricing programs are nearly unanimous in listing
education and community relations as the most
important elements of a successful unit pricing
program. Public education  can combat fears and
myths  about unit pricing (such as the fear of
increased illegal dumping) and help avoid or
mitigate many potential implementation  problems.

   When first reaching out to residents during the
planning stage, don't be surprised if many
residents react with skepticism to the idea of unit
pricing.  Initial opposition  is  often related to a perception that unit
pricing will result in an additional financial burden. Opposition also
might be due simply to a natural resistance to change. Resistance to unit
pricing is especially prevalent in communities where solid waste
management  fees are hidden in general or property taxes.

   To  counter this opposition, municipal officials can inform residents
of the current difficulties associated with waste collection and
management. In particular, officials can explain the costs to residents of
the current system of waste management. Next, they could present the
goals for improving the management of solid waste in the community. In
this context, officials can introduce  unit pricing, discuss its potential for
meeting these objectives, and address any questions and concerns that
residents have expressed about the new program.


             sits in
                                           BUILDING CONSENSUS AND PLANNING FOR UNIT PRICING

                              Winning community support for unit pricing often hinges on explaining
                          how the program can achieve certain critical objectives. Discussions at
                          EPA's Unit Pricing Roundtable revealed that residents tended to support
                          unit pricing if the program achieved the waste management principles
                          about which they cared the most. Residents often develop a sense of civic
                          pride in programs that meet these objectives. Roundtable panelists strongly
                          recommended that solid waste officials devote a significant amount of
                          attention to communicating these basic principles:

                              Equity. The program should be structured so that people who
                              generate more waste pay more, while residents who prevent waste,
                              recycle, and compost are charged less.
                              Waste reduction. The program must significantly reduce the
                              community's generation of waste, increase the rate of recycling, and,
                              therefore, reduce the amount of waste requiring disposal in landfills
                              and combustors.
                              Reductions in waste management costs. By helping to alter
                              household waste generation patterns, the program should help reduce the
                              cost of collecting and disposing of the community's solid waste.
                              Municipal  improvements. The program should contribute to
                              improvements  in the quality of life in the community, such as
                              resource conservation and land preservation.
   relations as the
                              In addition to deciding what information needs to be communicated,
                          solid waste officials also should consider how best to reach residents in
                          the community. An unspecified change in waste management services
                          scheduled to occur at some future date is not likely to capture a
                          community's attention. The following activities represent some of the
                          ways in which  officials can explain the benefits of unit pricing:

                              Hold public meetings. Interactive public meetings offer solid waste
                              officials the opportunity to present the case for unit pricing. Such
                              meetings also give citizens the sense that their concerns are being
                              heard and addressed in the eventual program.
                              Prepare briefing papers for elected officials. As both shapers
                              and followers of public opinion, elected officials tend to be at the center
                              of public policy debates. Because well-informed leadership can raise
                              issues in such a way as to attract residents' interest, solid waste
                              officials might want to provide elected officials with brief summaries
                              of the issues associated with solid waste management and the likely
                              benefits of a unit pricing program.
                              Issue press releases. Press coverage of a change in the way that a
                              community pays for its solid waste collection services is inevitable.
                              Keeping key radio, television, and newspaper outlets well informed
                              of the reasoning behind the move to unit pricing can make the press a
                              valuable participant in the decision-making process and prepare the
                              community for an upcoming change.

   Work with retailers. Grocers and other retailers in your
   community can help educate citizens by displaying posters and other
   information about the new program in their stores. In addition,
   retailers can help customers generate less waste by displaying
   information about choosing waste-reduced products.
   Part IV of this guide explains additional steps that communities can
take to communicate their ideas to the public.
   Even before the final decision is made to pursue unit pricing, some
basic planning issues can be addressed. Chief among these are
legal/jurisdictional issues and timing. Generally, states extend to local
jurisdictions the authority to provide waste management services and to
charge residents accordingly. During the planning process, however,
many communities have the unit pricing team research the
municipality's legal basis for implementing a new solid waste service
pricing mechanism rather than risk discovering a problem unexpectedly
during implementation.

   Since unit pricing programs often involve a number of steps and
some complex decision-making, consider developing a timeline for
planning,  designing, and implementing your program. Based on the
experiences of communities that have successfully implemented unit
pricing, planning for unit pricing should begin at least a year in advance
of your targeted start date. You can establish goals for  the unit pricing
program and begin explaining the program to the community from 9 to
12 months before program implementation. Public  education should
continue throughout the months prior to the program and, to some
extent, after the program is underway. You can identify the legal
framework for the program at least six months before the start of a
program. A detailed suggested timeline for a unit pricing program is
provided in Part IV of this guide.
                                           BUILDING CONSENSUS AND PLANNING FOR UNIT PRICING     15

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                               /t will probably be easy to get a broad consensus that some things are "good,"
                               such as saving money or reducing disposal rates. But solid waste management in
                               general and unit pricing in particular often involve a series of tradeoffs.  For
                               example, a community may decide to sacrifice some convenience for households to cut
                               costs or to create a stronger waste-reduction incentive. Establishing goals and priorities
                               early in the planning process can make it easier to make difficult choices as they arise.
                               Municipal officials and experts agree—no unit pricing program is going to work if
                               local residents oppose  it. Since improved solid waste management requires a
                               good faith effort from residents to reduce the amount of waste they dispose of, it
                               makes sense to include  residents as equal partners.

Points  to
   Establish realistic goals for your unit pricing program that address your
   community's most pressing waste management needs.
   Involve the community in the planning process. Representatives from
   community organizations can increase acceptance of unit pricing and facilitate
   Plan for the possibility of illegal dumping or burning. In addition to explaining
   other communities' experiences with illegal dumping, let residents know about
   legal alternatives for managing and disposing of solid waste. Also explain that
   concrete steps, such as assessing penalties for violators, will be taken.
                             I   r
   Public education cannot be stressed enough. Promoting the strengths of unit
   pricing and addressing residents' concerns is critical to the success of your


   Provide elected officials with information on the benefits of unit pricing
   programs to help them address residents' concerns. Also, keep local
   officials informed of decisions made about the program as it evolves.
   Be sure to carefully research your legal authority to establish and enforce a
   unit pricing program. Based on this research and on the advice of your
   municipality's legal counsel, ordinances may be necessary to establish the program.
   Plan ahead by establishing a timeline for your program.
                                    BUILDING CONSENSUS AND PLANNING FOR UNIT PRICING

 Case Studies
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Designing an  Integrated  Unit
Pricing Program
     o this point, this guide has presented an
     overview of the major benefits and barriers to
     unit pricing, followed by suggestions on how to
     define the objectives of your program and
begin building a consensus for unit pricing in your
community. This portion of the guide introduces
issues relating to the exact structure of your
community's unit pricing program. The first half of
Part III, "The Building Blocks," discusses the
advantages and disadvantages of the specific
program components and service options from  which
you can choose. This is followed by "Putting the
Blocks Together," a six-step process to help you
design a successful unit pricing program.

                             While unit pricing is based on the simple concept that households
                          pay only for the waste they generate, designing a working program
                          requires that you consider and decide on a range of specific issues. You
                          may have already examined many of these issues, such as the potential
                          for complementary recycling and composting programs, the types of
                          solid waste services to offer, and the means by which you can provide
                          these services to residents with special needs. During the development of
                          a unit pricing program, however, viewing these issues in the context of
                          how they might affect the success of your program is important.

                             The process of selecting program components and service options can
                          begin as much as nine months before the start of a program. This part of
                          the guide points out the kinds of decisions you need to make during this
                          process, including:

                             •  Choosing a volume-based or weight-based system
                             •  Selecting containers
                             •  Examining pricing structures
                             •  Considering billing procedures
                             •  Determining service options and complementary programs
                             •  Including multi-family buildings
                             •  Accommodating individuals with special needs
                             Communities  also need to consider other factors, such as the
                          remaining life of existing containers, the cost of container replacements,
                          the preferences of customers,  and the impact of assessing additional
                          taxes or fees on households. Later in this section of the guide, a six-step
                          process for designing an actual unit pricing rate structure is presented.
                          This process should help you tailor a rate structure to local conditions.

                          Volume-Based Versus Weight-Based  Programs

                             One of the first decisions to be made when designing a unit pricing
                          program is to determine how solid waste will be measured. Based on your
                          unit  pricing goals, local budgetary constraints, and other factors, you need
                          to decide whether your system will charge residents for collection services
                          based on the weight or the volume of waste they generate. The  two systems
                          have very different design and equipment requirements.

                             Under volume-based systems, residents are charged for waste
                          collection based on the number and size of waste containers  that they
                          use.  Households are either 1)  charged directly for waste collection based
                          on the  number  of bags or cans set out at the curbside, or 2) required to
                          purchase special trash bags (or tags or stickers for trash bags) that
                          include the cost of waste collection in the purchase price.

                                                                                       PART III
   Under weight-based systems, the municipality weighs at the curbside
the waste residents set out for collection and bills for this service per
pound. The program can either require residents to use standard,
municipally supplied cans or allow them to continue using their own
cans. Weight-based systems offer residents a greater waste reduction
incentive than volume-based
systems since every pound of
waste that residents prevent,
recycle, or compost results in
direct savings. This is true no
matter how much or how little
waste reduction occurs. In
addition, residents can easily
understand this type of system
and perceive it as fair.
Weight-based systems also provide
a more precise measurement of
waste generation than
volume-based systems.

   On the other hand,
weight-based systems tend to be
more expensive to implement and operate than volume-based systems
because special equipment is required and more labor typically is
necessary to handle the more complex billing system. In addition, some
of the equipment used to weigh the waste, record the data, and bill the
customer is still experimental.  Startup costs for these systems can
include truck-mounted scales for weighing waste and some type of
system (such as bar-coding on waste cans) for entering this information
into a computer for accurate billing.

   While volume-based systems  are less costly to set up
and operate, a  potential disadvantage associated with these
systems is that residents might be tempted to compact their
waste. Some residents will compact more than others,
perhaps even using mechanical compactors. This reduces
the ability of unit pricing to offer more equitable  charges
for waste collection services and complicates the task of
identifying the impact of unit pricing on the community's
rate of solid waste generation. Additionally, depending on
the system chosen, there can be less of an incentive to
reduce waste since such reductions might not translate
into direct savings for the resident.

   Although over 1,000 communities nationwide have unit pricing
programs in place, very few have fully implemented weight-based
programs. Accordingly, the remainder of this guide focuses
predominantly on the process of designing and implementing a
volume-based unit pricing program.
For its
    onboard computer
                                            DESIGNING AN INTEGRATED UNIT PRICING PROGRAM


                                             Container Options

                                                 Communities that decide to design a
                                             volume-based unit pricing program must consider
                                             the type and size of waste collection containers on
                                             which to base their rate structure and billing system.
                                             Keep in mind that choices about containers, rate
                                             structures, and billing systems all go hand in hand.
                                             In some cases, container type will dictate the rate
                                             structure and billing system. In other cases, an
                                             established billing system (that cannot be drastically
                                             overhauled) can govern container type and rate structure.

                              A unit pricing program can be designed around the following container

                                           Under this system, households are provided with
                              single, large waste cans, often with a capacity of 50 or 60 gallons.
                              Each household is then charged according to the number of cans that
                              they use.
                                                         This system uses a set of standard,
                              graduated can sizes, often ranging from approximately 20 to 60
                              gallons in capacity. Typically, these systems operate on a subscription
                              basis, under which residents choose in advance the number and size
                              of cans they wish to use.

                                               This system uses colored or otherwise distinctively
                              marked standard-sized trash bags, typically 20 to 30 gallons in
                              capacity. Residents purchase the bags from the solid waste agency
                              through outlets such as municipal offices and retail stores. Only
                              waste that is placed in the bags is collected.

                                                           Residents purchase tags or stickers
                              from the  solid waste agency and affix them to their own trash bags.
                              The tag or sticker specifies the size of bag it covers.
                              Each system has its own specific advantages and disadvantages related
                           to such issues as 1) offering a system that residents view as equitable;
                           2) creating as direct an economic incentive for waste reduction as possible;
                           and 3) assuring revenue stability for the solid waste agency. Other issues
                           to consider when weighing the pros and cons of different container types
                           include simplicity of billing, compatibility with existing waste collection
                           services, ease of collection for work crews, sanitation and aesthetics,
                           budgetary constraints, and community solid waste goals.

                              The primary benefit of a single, large container size is revenue
                           stability. When communities use large containers, the number of cans set
                           out each week tends to remain fairly constant,  and so do revenues. The
                           primary disadvantage associated with this container choice is that
                           households that don't generate much waste have no economic incentive

                                                                                           PART III
to reduce waste. Such households are billed the same amount
whether they fill a 60-gallon can halfway or completely.

   Conversely, the principal benefit of using variable can sizes
is that even modest reductions in waste generation (for example,
one less 10-gallon waste container) can clearly translate into
savings. A disadvantage of variable cans is that they can be
inconvenient for customers who generate large volumes of waste.
In addition, to realize savings from reduced waste generation,
households must request a change in the number of cans for
which they are being billed. The solid waste agency might need
to establish an inventory and distribution system that could be
expensive to set up and maintain. Additionally, billing for this
method can be more complex in some  communities.

   Like variable cans, prepaid bags encourage greater waste
reduction than large cans if the bag size is configured so that
residents that generate less  waste pay less. Additionally,  since
residents pay for waste collection through the purchase of the
bags, there is no billing, which means  this type of system is
relatively inexpensive to implement and maintain. The primary
disadvantage associated with bags is that there is greater revenue
uncertainty than with can systems. An individual might, for
example, buy several months' worth of bags at one time and then
none for many weeks. Also, semiautomatic collection vehicles
that require residents to use a rigid container might not be able
to adapt to bag collection. Bags also can tear or be torn open by
animals, resulting in scattered trash.
   Prepaid tag or sticker systems offer many  of the same advantages as
bag systems. Chief among these is that such systems  directly encourage
waste reduction, since different stickers can be used to identify different
amounts of waste "set-outs" (the waste residents set  out for collection).
This means, however, that the solid waste agency must establish and
enforce size limits for each  type of sticker. As  with bags,  waste collection
is paid for upfront, so no billing needs to be done. Also like bags,
stickers or tags offer less revenue stability. In addition, stickers can fall
off in rainy or cold weather, and both tags and stickers can be
counterfeited or stolen.

   The advantages and disadvantages  of each of these container options
are described in more detail in Table 3-2 at the end of this chapter. You
don't have to be locked into one  type of system, however, if you plan for
the possibility of change. Some communities conduct a pilot  program in
one part of the municipality before implementing  unit pricing
communitywide. In this way, difficulties can be worked out early in the
process, when modifications are still relatively easy.
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                                            DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

    While the details of the pricing structures used in unit pricing
programs can vary greatly according to local conditions and needs, four
basic types are currently in use. These pricing structures  are described

Pricing Structures

    The main consideration in choosing among the types of pricing
structures is their impact on the stability of the  community's revenues
and on residents' waste reduction efforts. In addition, some pricing
systems  are more complex than others to administer.

    1.  The proportional (linear) rate system is  the simplest rate
structure. It entails charging households  a flat price for  each container of
waste they place out for collection. This rate structure provides a strong
incentive for customers to reduce waste.  It also is easy to administer and
bill. Careful consideration is often required, however, to select a price per
container that avoids cash flow difficulties that can hinder a new
program. While setting too high a price will increase resistance to unit
pricing, setting too low a price may cause periodic revenue shortfalls (and
can lessen the waste reduction incentive). In addition, when setting rates,
decision-makers should assume that  some level  of waste compaction will
occur. They also should plan for success, since as people begin to reduce the
amount of waste they set out, the solid waste agency will see a corresponding
drop in revenues paid for waste collection.
                          Weighing the Tradeoffs When Setting Pricing Structures

                          Decision-makers considering such issues as container choices, rate structures,
                          and service options quickly realize that all of these choices are closely related.
                          Decisions in one area will influence, or even determine, how your community
                          responds to the remaining choices.

                          When considering container options, for example, a smaller community with
                          fewer resources might favor a bag-based system because of its generally lower
                          implementation and administrative expenses. Such systems, however, have the
                          potential for revenue gaps that the community might not be able to bridge. As a
                          result, a community might prefer a two-tiered or multi-tiered  rate structure,
                          whose base fee would help prevent such instability.

                          By contrast, a larger community interested in providing a stronger incentive to reduce
                          waste might favor a  proportional or variable container rate and higher per container
                          fees. To avoid significant revenue fluctuations, such communities might choose a
                          can-based subscription system that ensures a steady cash flow.

                          There is no one best approach to unit pricing. Throughout the design process, you
                          will  need to determine the specific combination of container choices, rate
                          structures,  and service options that will maximize efficiency and enable your
                          community to meet its solid waste goals.

                                                                                           PART III
    2. With a variable container rate, a different rate is charged for
different size containers. For example, a solid waste agency might charge
households $2 for every 60-gallon can of waste set out and $1.25 for
every 30-gallon can. While this system creates a strong incentive for
residents to reduce waste, it requires that communities carefully set their
rates to ensure revenue stability. Because different rates are charged, this
system can be complicated to administer and bill.

    3. Both of these systems use a per-container fee to cover the fixed
and variable costs associated with a community's MSW management.
Other unit pricing rate structures address fixed and variable costs
separately. Two-tiered rate systems assess households both a fixed fee
and a per container fee. Under this system, a monthly flat fee is set for
solid waste services to ensure that fixed costs are covered; a separate,
per-container charge is then used to cover the variable costs. In
Pennsburg, Pennsylvania, the solid waste agency charges residents a flat
$65 per year plus $1 per 30-gallon bag of waste placed at the curb for
pickup. This system provides more stable revenue flows for the
community but offers less waste reduction incentives than proportional or
variable container rates. Some communities  use the two-tiered rate
structure as a transition system. Once decision-makers are able to gauge
customers' response to unit pricing, a proportional rate structure could
be introduced to encourage greater waste reduction.

    4. Multi-tiered rate systems charge  households a fixed fee  plus
variable fees for different container sizes. For example, a community might
charge a basic $10 monthly service fee  plus $2 per 60-gallon can, or $1  per
30-gallon bag. This rate structure offers similar advantages to two-tiered
rates and also encourage waste reduction. This type of rate structure is the
most complex, however, and could be difficult to administer and bill.
 Proportional (linear)

 Variable container


Flat rate per container

Different rates for different size containers

Flat fee (usually charged on a monthly basis)
and flat rate per container

Flat fee (usually charged on a monthly basis)
and different rates for different size containers
                                              DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

Billing and Payment Systems

   Traditional solid waste programs typically assess households a fixed
fee, raised through property taxes or periodic equal billing of all
households. Unit pricing programs use various billing/payment systems,
such as direct payment for containers, actual set-outs, and payment for
advance subscriptions.

   With a direct payment system, residents pay for solid waste services
by purchasing bags or tags from the solid waste agency. Containers can
be sold at the courthouse or city hall, at local retail stores,  or at the
hauler's office. Care should be taken to ensure that a sufficient number of
easily accessible outlets are available for residents.

   Under subscription systems, residents notify the solid waste agency
of their "subscription level," or the number of containers they anticipate
setting out each collection cycle. The customer is then billed on a regular
basis for these containers. If  customers are able to reduce the amount of
waste they generate, they can select a lower subscription level and save
money. In many programs, these  subscription fees are set at a level that
covers the purchase of a designated number of additional bags or cans for
any waste that a customer disposes of above their subscription level. This
system offers fewer fluctuations in revenues, although the waste reduction
incentive is lower Obecause residents who reduce their waste generation rate
only receive a reduction in their waste collection bill after requesting the
municipality to change the number of cans for which they pay.

   An actual set-out system bills  customers based on the actual number
of containers set out for collection. This  approach requires the hauler to
count the number of bags, tags,  or cans set out and to record the
information so that households  can be billed later.

   To address citizens' concerns about "hidden" or "double" fees, some
communities that implement unit pricing either reduce the household
tax rate commensurate with the unit pricing fee or decide not to raise the
tax base proportionately with the revenues received from unit pricing.
Meet with the citizens advisory council to work out the details for a
pricing system geared to your local needs and circumstances.

Accounting Options

   Regardless of how they  collect payment, most communities  tend to
manage the finances of their solid waste  activities as one item in the
municipal budget. A few communities, however,  are using alternative
accounting approaches to complement their unit pricing programs. One
such approach is the use of "full cost accounting." Using full cost
accounting enables a community to consider all costs and revenues
associated with a task such  as solid waste management, including
depreciation of capital costs, amortization of future costs,  and a full
accounting of indirect costs. This method  can help a community

                                                                                        PART III
establish a unit pricing rate structure that will generate the revenues
needed to cover all solid waste management costs.

   Another approach that can be used in conjunction with a unit pricing
program is the development of an "enterprise fund." Also referred to as
special districts, enterprise funds are entities that can be used to
separately manage the finances of a municipality's solid waste activities.
In this way,  the costs and revenues of unit pricing are accounted for
under a separate budget, enabling a community to better anticipate
revenue shortfalls and, when appropriate, invest surplus revenues in
beneficial waste management projects that can reduce the cost of MSW
management in the future.

Program Service Options

   The next step is to determine which solid waste services are most
important to residents. Successful programs offer an array of solid waste
services that citizens need and appreciate. The goal-setting process
described in Part  II of this guide identifies many of these services.

   Offering different services does add layers of complexity to a unit
pricing program, especially to the billing component. Yet providing such
service enhancements greatly increases overall citizen acceptance of the
program. A  carefully selected and priced service array allows a
community  to offer premium municipal solid
waste services to households that want them,
while generating sufficient revenues to  support core
solid waste collection services. The following
sections highlight some of the most popular service
options, many of which are complementary to basic
trash removal.

   Complementary  Programs

   Complementary programs are those that
enhance the unit pricing program and encourage
residents to  prevent and reduce waste. The most
common complementary programs are 1) recycling
and 2) collection  of yard trimmings for
composting. Providing recycling and composting collection services
enables both types of programs to reach their maximum effectiveness. In
fact, in many cases, recycling and composting are major contributors to the
success of a  unit pricing  program.

   Many communities already have some type of curbside collection or
voluntary  drop-off recycling program in place. Linking recycling and
composting with unit pricing provides customers with an environmentally
responsible  way to manage their waste. In addition, since the cost of
these  programs can be built in to unit pricing fees, communities  can
recover these expenses without creating an economic disincentive to
recycle. The extent of the recycling program is an important factor, as

     Providing a recycling
          &    /  &
   program in conjunction
     with unit pricing can
     further decrease the
    amount of waste your
community must dispose of.
                                             DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

                                                  well. A community will more fully realize the
                                                  benefits of offering recycling in tandem with
                                                  unit pricing if the recycling program is geared to
                                                  collect a wide range of materials (although the
                                                  availability of local markets can constrain the
                                                  types of materials a community can accept).

                           Providing for removal of yard trimmings
                       such as leaves, branches, prunings, and grass
                       clippings, and promoting backyard composting
                       and "grasscycling" (leaving grass trimmings on
                       the lawn), also will enhance the unit pricing
                       program. For example, the community of
                       Austin, Texas, mixes the yard trimmings it
                       collects from residents with sewage sludge to
                       produce compost called "Dillo Dirt," which is
                       sold to nurseries as fertilizer, and Durham,
                       North  Carolina, makes landscaping mulch from
brush. Distributing "how-to" materials can help increase the amount of
organic waste residents compost, and some municipalities even provide
their residents with free compost bins.

   In communities where weekly recycling or composting is too costly,
curbside collection can be scheduled every other week or once a month.
In addition, municipalities can encourage haulers to provide recycling
services by including a risk-sharing clause in their contracts. Such
clauses require the municipality to share with the hauler the risk of
fluctuations in the price of recyclable materials. If a recycling company
requires payment to process a certain collected material whose value had
dropped substantially, for example, the hauler and municipality would
bear these costs together. Some communities, however, might not feel
their budget would allow them to incur additional,  unexpected costs.
                              Backyard  Collections

                              Backyard collection of waste and/or recyclables can be considered as a
                           service enhancement that complements a unit pricing system. With this
                           service, haulers remove residential waste and recyclables from backyards,
                           garages, or wherever residents prefer, rather than requiring them to haul the
                           material to the curb. Residents might pay extra for this service. When
                           setting a price for backyard collection services, a community should
                           consider costs to collect waste from the curb, transport it, and dispose of it.
                           The higher charge for backyard waste removal should reflect the added
                           municipal resources required for such a service.

                              Curbside Collection of Bulky Items

                              Curbside collection of large items, such as refrigerators and other
                           major appliances, is another service that complements basic trash
                           removal. In some communities with unit pricing, residents pay extra to

                                                                                           PART III
have bulky items picked up and disposed of by the municipality. The
disposal of bulky items, which cannot fit into most unit-pricing programs'
cans or bags, can be charged for within a unit pricing system by using
printed stickers or tags that are attached to the item. To establish fair prices,
the solid waste agency can use the same collection, transportation, and
disposal cost considerations that apply to establishing prices for standard
unit pricing waste collections. The price could be set in advance of
collection, based on the owner's description of the item, or after collection,
based on the collection agency's observations.

Multi-Family Housing

    One of the biggest challenges for communities implementing unit
pricing is how to include multi-family (five units or more) residential
structures into the program. Such buildings can house a large portion of
the population, particularly in densely populated areas. Because waste
often is collected from residents of such structures per building, rather than
per unit, it might be  difficult to offer these residents a direct economic
incentive  to reduce waste with  unit pricing. To compound this problem,
because many multi-family buildings receive less convenient recycling
services than single-family housing units,  residents of multi-family
buildings might have fewer avenues for waste reduction.

    There  are several possible options to resolve multi-family barriers.
One option is to have the building manager sell bags or tags to each
resident. When households use these tags or bags, those that generate
more waste end up paying more for waste collection. Problems arise
    Tips for Accommodating Residents of Multi-Family Households

    A number of ideas were presented at EPA's Unit Pricing Roundtable to help extend to
    residents of multi-family households the direct economic incentives inherent in unit
    pricing. One suggestion was to request that building managers pass on trash collection
    savings to residents in the form of cash rebates, rent reductions, or some free building
    services, although the impact of the incentive would be diluted since it is spread over
    all the tenants in the building.

    New technologies, such as a bar code reader to identify the tenant and a scale at the
    bottom of the chute to record the weight, also were suggested as possible solutions.
    These technologies offer the potential for accurately recording the exact waste
    generation for each tenant.

    In addition, building codes for new and renovated buildings could be amended to
    require the installation of separate chutes for recycling and for garbage disposal.
    Residents also could be required to use a trash token or some type of identifying
    code to gain access to a garbage chute.
                                              DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

In some communi
backyard collection can be
arranged as a service for
disabled or elderly residents
when households do not comply with this system, however. In many
cases, residents can easily place waste in the building dumpster without
paying for a bag or sticker. Another approach is to modify the system of
placing waste out for collection in multi-family buildings. For example,
dumpsters or garbage chutes could be modified to operate only when a
magnetic card or other proof of payment is used. Such modifications can
be expensive, though. Communities with unit pricing systems in place are
experimenting with other possible solutions to the multi-family barrier. If
extending unit pricing  service to multi-family buildings is a concern in
your community, consider contacting other cities or towns that have
addressed this issue for additional ideas. (A listing of these
communities is provided in Table 3-2 at  the back of this section.)

Residents With  Special Needs

   Many communities considering unit pricing are concerned about the
special needs of physically limited or disabled citizens and those living
on fixed or low incomes. For example, some senior citizens and disabled
residents may be physically unable to move trash containers to the curb.
Communities may wish to consider offering such residents backyard
collection services at a reduced rate or at no extra charge. Such special
considerations should be factored in to your unit pricing rate structure.

   While the fees associated with unit pricing could represent a
potential problem for some residents, unit pricing systems can be
structured to allow  everyone to benefit. To  provide assistance to
residents with special financial needs, communities can reduce the
                        per-household waste collection charges by a set
                        amount, offer a percentage discount, or provide
                        a credit on the overall bill. In some cases,
                        communities with unit pricing programs offer a
                        certain number of free bags or stickers to
                        low-income residents. Some communities
                        charge everyone equally for bags or tags but
                        reduce the base service charge for low-income
                        households. Assistance also can be offered
                        through existing low-income programs,
                        particularly other utility assistance efforts.

                           These techniques allow low-income
                        households to benefit from some assistance while
                        retaining the incentive to reduce their bill for
waste services by practicing source reduction, recycling, and
composting. Communities will need to determine how to identify the
amount of assistance they will offer based primarily on the program's
anticipated revenues. As a basis for establishing eligibility for assistance,
some communities with unit pricing programs use income criteria such as
federal poverty guidelines.

                                                                                                   PART III
Revenues are fairly stable and easy to

Unlike bags, cans often work well with
semiautomated or automated
collection equipment (if cans are
chosen that are compatible with this

If residents already own trash cans of
roughly uniform volume, new cans
might not be required.

Cans may be labeled with addresses to
assist in enforcement.

Cans prevent animals from  scattering
the waste.
Cans often have higher implementation
costs, including the purchase and
distribution of new cans.

Customers have a limited incentive
to reduce waste. Since residents are
usually charged on a subscription
basis, there is no incentive not to fill
cans already purchased. In addition,
no savings are possible below the
smallest size trash can.

Relatively complex billing systems are
needed to track residents' selected
subscription level and bill accordingly.

Complex storage, inventory and
distribution systems are required to
provide  new cans to households that
change their subscription level.

A method of collecting and charging
for waste beyond subscription levels
and for bulk waste collections needs
to be established.

At the outset, residents may find it
difficult or confusing to select a
subscription level.

Nonautomated can collections tend
to require greater time and effort
than collecting waste in bags.
Using This System
Hennepin County MN

Seattle, WA

Anaheim, CA

King County, WA
(in unincorporated areas)

Marion County, OR

Pasadena, CA

Glendale, CA

Oakland, CA

Bellevue, WA

Santa Monica, CA

Duluth, MN

Richmond, CA

Walnut Creek, CA

Santa Clara, CA

Auburn, WA

Hastings, MN
                                                 DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

Using This System
Residents find bag systems easy to

Bag systems might offer a stronger
waste reduction incentive than can
systems because fees typically are
based on smaller increments of waste.

Accounting costs are lower than with
can systems, since no billing system is

Bag systems have lower distribution,
storage, and inventory costs than can
systems when bags are sold at local
retail establishments and municipal

Bag collections tend to be faster and
more efficient than nonautomated
can collections.

Bags can be used to indicate that the
proper fees have been  paid for bulky
items or white goods, since fees for
pickup of these items (above the
subscription level) often are assessed
by communities. Communities can
ask residents to attach a certain
number of bags to the items according
to the cost of disposal (for example,
two bags for a couch and three bags
for a washing machine).
Greater revenue uncertainty than
with can-based systems, since the
number of bags residents purchase
can fluctuate significantly.

If bags are sold in municipal offices,
extra staff time be will need to be

Residents might view a requirement
to buy and store bags as an

Bags are more expensive  than tags
or stickers.

Bags often are incompatible with
automated or semiautomated
collection equipment.

Animals can tear bags and scatter
trash, or bags can tear during ifting.

Unlike cans, bags are not  reused,
adding to the amount of solid waste
entering the waste stream.
Grand Rapids, Ml

Reading, PA

Lansing, Ml

St. Cloud, MN

Darien, IL

Carlisle, PA

Quincy IL

Oregon, Wl

Fallbrook, CA

                                                                                                   PART III
                                    Using This System

Tag and sticker systems are easier and
less expensive to implement than can

Residents often find tag or sticker
systems easier to understand.

These systems  offer a stronger waste
reduction incentive than can systems
because fees are  based on smaller
increments of waste.

Accounting costs are lower than with
can systems,  since no billing system is

Selling tags or stickers at local retail
establishments  and municipal offices
offers lower  distribution, storage, and
inventory costs than can systems.

The cost of producing  tags or stickers
for sae to residents is lower than for

Stickers can be used to indicate
payment for  bulky items or white
goods, since fees  for pickup of these
items (above the subscription level)
often are assessed by communities.
There is greater revenue uncertainty   Tompkins County NY
than with can-based systems, since the
                                    Grand Rapids, Ml
                                                                                    Lansing, Ml
number of tags or stickers residents    Aurora, IL
purchase can fluctuate significantly.

To avoid confusion among residents,
the municipality must establish and
clearly communicate the size limits
allowable for each sticker.

If tags or stickers are sold in municipal
offices, extra staff time will  need to be

Residents might view a requirement
to buy and store stickers or tags as an

Tags and stickers often do not adhere
in rainy or cold weather.

Extra time might be  needed at curb
for collectors to enforce size limits, n
addition, there may be no incentive for
strict enforcement if haulers are paid
based on the amount of waste collected.

Stickers left on trash at curbside could
be removed by vandals or by other
residents hoping to avoid paying for
waste services.
                                               Tags and stickers are not as noticeable
                                               as bags or other prepaid indicators.
                                                 DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

              Now that you have identified the components of unit pricing programs in
              general, you are ready to design a program that meets your community's specific
              needs and goals.  "Putting the Blocks Together" presents a six-step process that
              can  assist you in designing and evaluating your preliminary rate structure. This
              process should begin approximately six months before the start of your program.
                 Performing the Six-Step Process...

                 As you are completing these steps, be sure to keep a few basic objectives in

                     Raise sufficient revenues to cover fixed costs and variable costs.
                     Possibly raise  revenues beyond the cost of the program to cover other
                     waste management costs.  These revenues might be used for antilittering cam-
                     paigns or to discourage illegal dumping.

                     Send clear price signals to citizens to encourage waste reduction.

                     Charge appropriate fees to cover the costs of 1) recycling and other com-
                     plementary programs, 2) providing services (such as backyard collection)
                     for physically limited or disabled people, and 3) any discount pricing pro-
                     vided to low-income households.

                     Compile accurate MSW baseline data to be used when evaluating your
                     unit pricing program.

                     Design a program simple enough to keep administrative costs low and to
                     make it easy for people to  participate  in the program, thereby reducing both
                     their waste generation and their waste collection bill.
                     Also, don't forget to consider your unit pricing goals, community-specific
                     conditions, and the most promising suggestions from municipalities with ex-
                     isting unit pricing programs to ensure a program tailored to the waste man-
                     agement needs and concerns of your community.

                     PUTTING THE BLOCKS  TOGETHER
                                                                                     PART III
Estimate Total Amount of Waste Generated in the "Steady-State
       Because the amount of waste your community generates affects the level of resources
       (including trucks, labor, and administrative support) required to manage it, you need
       to accurately estimate what the community's waste generation rate will be after your
       unit pricing program is fully established. This period is referred to as the "steady-state." In
       the steady-state, residents have accepted unit pricing and reduced their waste generation
       rates accordingly, and the municipality's waste management operations have adjusted to
       new, lower waste collection requirements.
                   Transition Period
Program Monitoring

       Ensuring that the revenues received under the unit pricing program will cover the
       program's costs is a critical factor for most communities. As a result, accurately
       estimating the amount of waste collected in the steady-state is an important first step in
       determining how much money unit pricing will actually generate. To develop such an
       estimate, perform the following calculations:
                            Using your waste hauling records, estimate the amount of waste
       collected from residents last year.
                              Next, estimate the population growth trends and other
       demographic patterns in your community. Use this information to estimate the demand
       for waste management services over the next one or two years. This information can
       be developed in several ways; the box entitled "Forecasting Community Growth Trends"
       on page 31  discusses some different approaches. (Note: If you are planning special
       programs for low-income, elderly, or multi-family households, you should estimate the
       population trends of these residents or households as well.)
                                 Then, estimate the likely impact (i.e., household
       responsiveness) of unit pricing on this demand for waste services. Other communities with
       unit pricing programs in place might be a good source of information on the degree of waste
       generation reduction to be expected. Some communities have achieved 25 to 45 percent
       reductions in waste  generation rates, depending on such factors as the use of complementary
       programs, the design of the unit pricing rate structure, and the effectiveness of the public
       education effort. Be sure not to underestimate the potential success of your unit pricing
       program, especially if strong public education and complementary programs are planned.
       Underestimating waste reduction will cause you to overestimate potential revenues.
                                           DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

         Use this information on current demand, community growth, and the impact of unit pricing
         to estimate the total amount of solid waste you expect will be  generated once the unit
         pricing program has been established.
           Forecasting Community Growth Trends

           Forecasting trends in the growth of a community's population is an important step in accurately
           estimating the amount of waste generated under an ongoing unit pricing program. Typically, the
           degree of sophistication a community brings to this process will vary with the information and
           resources available.

           For example, if your community is small and you expect no change in population trends, per
           capita waste generation, and commercial or industrial growth, you could use a simple trend
           analysis to forecast growth. Your estimation of current waste generation amounts might be based
           on a waste characterization assessment, historical records from collection services and disposal
           facilities, or estimates based on similar communities' analyses. Extending these trends can
           provide an estimate of future demand for solid waste services. If you base your estimates on
           other communities' analyses, be sure to choose communities that are similar to yours in size,
           population, income distribution, urban/rural distribution, and economic base. In addition, using
           the most recent analyses available will increase the accuracy of your estimation.

           In contrast, if your community is large and you expect a change in current trends, you probably will
           need  to use a sophisticated forecasting equation that will account for all the variables you identify.
           Your solid waste agency may have collected data on a number of factors that previously have
           influenced the amount of waste generated by the community (such as housing construction, plant
           closings, household income, economic growth, and age distribution of the population). You could
           base projections of future demand for solid waste services by introducing these data into your
        Determine the Components  of Your  Unit Pricing Program
        After clarifying your community's goals and considering the pros and cons of the unit
        pricing program options described earlier in this section of the guide, you will be ready to
        determine the methods your solid waste agency will use to collect waste from residents and
        other details of your unit pricing program, including:

                       After considering their practical implications, decide whether your unit
        pricing program would be most effective using cans, bags, tags or stickers, or some type
        of hybrid system. Determine the  volume of the  containers to be used.

        f                  While most unit pricing programs will include curbside collections,
        decide whether your  program would benefit from such additional services as backyard
        collections and picking up bulky items such as white goods.

                     PUTTING THE BLOCKS  TOGETHER
                                                                                     PART III
                                                          If your community is not
        already operating programs like recycling or composting, consider whether you might
        implement them to enhance the effectiveness of your unit pricing program and to help
        meet other community goals.
        ^                                                                Determine how
        your community plans to extend the economic benefits of unit pricing to residents of
        multi-family buildings and deal with the needs of low-income residents and the elderly.
Estimate the Costs of Your  Unit  Pricing Program
        Having determined the structure of your program and the services to include, list all
        associated costs. Categories of costs can include:
                          Estimate the one-time costs your community will incur when
        implementing the unit pricing program, such as training personnel, purchasing new
        containers, and designing and implementing a new billing process.
                         Estimate  the costs your program will  incur on an ongoing basis. These
        costs include variable costs (such as landfill tipping fees) and more stable or fixed costs
        (including rent and utilities for agency offices and office supplies) that remain relatively
        constant despite fluctuations in the amount  of waste collected. Be sure to consider any extra
        costs from providing special services to certain groups. (Some communities might find it
        useful to employ full cost accounting procedures to better understand the exact costs of
        the different projects planned as part of the unit pricing program.)
Develop  a Tentative  Unit Pricing Rate  Structure
        Having determined the components of your program, you can now set a tentative rate
        structure.  At this point, the rates should be considered merely rough estimates to be
        revised and refined in light of the overall revenues they will generate and how acceptable
        the costs will be to residents. The rates you start with can be borrowed from the figures
        used by neighboring unit pricing communities offering similar services or adapted from
        price ranges found nationally. As you work through the remaining steps in the process of
        setting a rate  structure, you can determine whether the rates are appropriate and make
        adjustments accordingly. Be sure to specify any lower rates that you plan to make available to
        some portions of your community (such as discounts for low-income households).
                                           DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

Calculate  the Revenues From  Unit  Pricing
        You now have the information needed to estimate the revenues that your unit pricing
        program will generate once it has been established and residents have adjusted their
        waste generation rates accordingly. Divide the total amount of waste generated per
        month in the steady-state (estimated in Step 1) by the volume of containers, such as bags
        or cans, you established in Step 2. This provides an estimate of the number of containers
        of solid waste you expect to collect per month. Then multiply the estimated number of
        containers by the unit charge you have tentatively established in Step 4. This yields an
        estimate of the total revenues per month generated under unit pricing.
        Depending on the number of services offered and the unit pricing structure itself, these
        calculations can be simple or complex! For example, communities using cans of varying
        sizes and offering additional services  (such  as backyard waste collection) must estimate
        the revenues produced by each component of their solid waste program.  In addition, if
        low-income households are subsidized under your program, be sure to calculate the size
        of the subsidies and subtract from the expected revenues.
Evaluate and Adjust Your Preliminary  Unit  Pricing Program
        For most communities, comparing the anticipated costs of their unit pricing program
        (Step 3) against expected revenues (Step 5) will provide the critical indication of whether
        the program is viable. (It is important in this step to be able to rely on accurate baseline
        data for gauging the viability of your  program.)  If this comparison indicates that the
        costs of your unit pricing program might not be fully covered by its revenues, you need to
        review both the design of the program (Step 2) and the rates you plan to charge (Step
        4). Several revisions of program options and rate structures may be required to achieve
        a unit pricing program that most closely meets the goals established by the
        community in the planning phase (see Part II).

        Once you feel that your program  strikes a working balance between costs incurred for
        services provided and the prices residents will be charged, it might be appropriate to
        submit the program design to other municipal officials or community leaders for
        additional input. This process of review and comment can continue until a balanced
        program agreed upon by community  representatives has been established.

                                                                               PART III
The Six Steps in Action:
Designing  a Rote Structure for Community A

To illustrate the steps in action, we will follow Community A, a hypothetical town, as it designs
a rate structure for its new unit pricing program based on its own particular goals and concerns.

                                  Community A's  records show that it collected
480,000 cubic yards of solid waste from its residents last year. Municipal officials realize
that the population of the town is likely to increase next year after a large multi-use
building complex is completed. Based on population projections prepared by town
planners, officials estimate that, at the current rate, residents will generate  nearly
600,000 cubic yards of solid waste annually two years from now. Within this two-year
period,  however, officials hope their unit pricing program will have reached  its
steady-state  and residents will be generating less waste. Using data from three nearby,
demographically similar towns that have  established unit pricing programs, municipal
officials estimate that two years after implementation  of the unit pricing program the
community will  generate about 410,000 cubic yards of waste annually.
                  At this stage in the design process, municipal officials in Community
A decide to  use the median rate of the prices charged by other communities across the
country ($1.75 per 30-gallon bag). In addition, this rate is very close to the  price adopted
by the three nearby unit pricing communities for their 30-gallon containers.
                     Dividing the annual amount of  solid waste Community A expects
to generate in the steady-state (410,000 cubic yards) by the size of their waste container
(30 gallons or 0.15 cubic yards) shows that the municipality can expect to collect over
2,733,000 bags each year. By multiplying this figure by the price per bag ($1.75), officials
calculated that Community A should receive about $4,780,000  in revenues from its unit
pricing program each year.

                 Community A estimates that the annual  steady-state cost of its
program will include approximately $1,000,000 in fixed costs, such as public education
efforts,  computers and other office materials, and enforcement efforts, and
approximately $2,700,000 in tipping fees and other variable costs. Combining these
figures produces an annual steady-state  cost of approximately $3,700,000 for the
program. Additional start-up expenses also would be incurred.
                              While recognizing that their program must cover the
town's waste management costs completely, officials in Community A agreed the town
should cover any start-up costs that exceeded revenues  during the initial transition period.
Therefore, when a comparison of  the expected revenues  against the costs of the unit
pricing program showed that the program would generate excess revenues,  municipal
officials  decided to lower the price  charged per bag to $1.35. This new price would yield a
projected $3,690,000 annually, closer to the town's actual costs of maintaining the program.

                                     DESIGNING AN INTEGRATED UNIT PRICING PROGRAM       39


                                         A community can select from an impressive array of service
                                         options when mapping out a unit pricing program. After estimating
                                         the demand for services in STEP 1, communities can plan for the
                                         services they will offer in STEP 2. Some communities will want to
                                         offer services such as backyard collections, comprehensive
                                         recycling programs, and assistance to residents with special needs.
                                         Bear in mind, however, that while these projects can help promote
                                         source reduction and increase citizen enthusiasm, they also can
                                         increase the cost of your program significantly. Use STEP 3 to help
                                         estimate the costs of the services you are planning to offer.

                                                       The flip side of costs is revenues. Unit pricing
                                                       allows communities to generate the revenues
                                                       needed to pay for solid waste management services
                                                       under the new  program. In fact, when developing a
                                                       rate structure in STEP 4 and calculating the
                                                       resulting revenues in STEP 5, communities might
                                                       decide to set prices at a level above the cost of
                                                       their unit pricing program. This would further
                                                       encourage source reduction among residents and
                                                       ensure that  revenues could cover any shortfalls.
                                                       Since residents  will only support a program they
                                                       feel charges a fair price for solid waste services,
                                                       however, there are limits to this strategy.

 To be successful over the long term, your unit
 pricing program will need to carefully balance the
 services you want to include against the revenues
 that residents provide. The exact formula will
 depend upon local conditions. Use STEP 6 to
 help you compare the costs of your planned
 program against anticipated revenues. Keep
 revising your rate structure until you feel that you
 have a program that offers the services you need
 at a price residents can support.

                                                                                               PART III
Unit pricing communities agree that planning for success is important during
the design process. Some communities have found that cans as small as 10 to
20 gallons are needed! For example,  Olympia, Washington, offers residents a
10-gallon can and Victoria, British Columbia, uses a 22-gallon can as the base
service level. A number of communities using large containers (such as
60-gallon cans) are finding that these containers are too large to offer
customers meaningful incentives, but purchasing and delivering new, smaller
cans later in the program is very  expensive. In the short run, a broader range
of service can be provided by using several smaller cans. This also helps keep
the system flexible for future changes.

What pricing rates  are communities charging?
For bag systems in the Midwest and Pennsylvania, communities charge about
$1 to $2 per 30-gallon bag. For variable can programs in the Northwest and
California, towns charge $9 to $15 for the first level of service (20 to 40
gallons), with charges for additional cans of service ranging from 30tf to $15.

The key change to make is to base your billing on actual set-outs rather than
using a subscription approach. Offer smaller cans to encourage waste reduction,
and consider a bag-based system. Upgrading composting and recycling options
(including plastics collection, for example, if you don't already) also will provide
an incentive for customers to reduce waste. Communities also  universally state
that education is critical to helping customers understand and  work with the
system.  Finally, consider a weight-based program. You might find that the cost of
implementing this type of program is not prohibitive and that it can work in
tandem with your existing cans.
Some residents may tend to be sloppy about source separation regardless of
the type of solid waste pricing system. As people learn to reduce their costs by
recycling more, however, they may become more inclined to introduce
nonrecyclables in their recycling bins. Many communities have found the best
solution is a good education and enforcement program that creates a sense of
ownership among residents, supported by peer pressure against such
behavior. Some also impose a small charge for recyclable materials in their
rate structure design.
   A   Tn
                                              DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

           Points  to
               Remember that container options, complementary programs, rate
               structures, and billing systems are all interrelated. As you consider the
               different options, keep in mind the need to cover costs, keep the system
               simple and convenient, encourage waste reduction, and minimize
               administrative burdens on your agency.
              Tradeoffs must be considered as you make decisions about rate structures
              and program options. Balance, for example, the need to generate
              revenues against providing incentives for waste reduction.
               Consider complementary programs, such as recycling and collection of
               yard trimmings, to increase the effectiveness of unit pricing.
               Consider how to ensure that unit pricing's economic incentives to reduce waste
               can be extended to residents of multi-family housing in your community.
               Design your program to be flexible enough to allow for groups with
               special needs. Discount pricing or assistance programs might be
               necessary to ensure that the program encourages waste reduction without
               imposing physical or financial burdens on handicapped or low-income
               members of your community.
               Refer back to your unit pricing goals when making rate structure
               decisions. While information from other communities with unit pricing
               programs is helpful, your own community's solid waste concerns should be
               the overriding factor.

                                                                                           PART III
                                                         Case   Studies
Establishing a Rate Structure
A  View From Seattle
stable. To accomplish this, Seattle chose to adopt a two-tiered rate structure. The
message to the comr
    e price per can.
observing the
micro a
                                   ;. There tends to be bro;
                                     a lot of customers could fit their
                                     jstomers to use the micro cans.
>ort for the

use minicans
I microcan

ir waste into a
                            After eli
                                      ig to collect yard trimmings as part of our
program, we decided to set a flat fee of $3 per household per month for this service,

administration prohibitively costly. We offer bulky item pick-up for $25 per item. The
price was set to cover h;     and administrative costs.

For waste that is gi     ed above the subscription level, residents must attach a trash
paid per ton of waste they pick up, they have no incentive to leave the waste at the
curb. We estimate we forfeit anywhere from $500,000 to $1 million dollars a year on
Tags and  Stickers
A View From Illinois
One of 1
                                    •s is that, sii

Tags and stickers also are easy for <
spend at a stop costs money, the n
                                 m personnel to use. Since every second they

                                            DESIGNING AN INTEGRATED UNIT PRICING PROGRAM

                       But tags anc
                       People can :
   -s are not perfect. The hauler might not be able to find th

                                               volume very
                                                                                         ie for
                                                                                         >ly, it also
                       Experience With Weight-Based  Systems
                       A View From Formington, Minnesota, and Seattle, Washington
                       In Farmington, Minnesota, we worked for two years to develop and implement a
                       weight-based unit pricing program for our town of 5,000 residents. Our new system
                       uses fully automated trucks that require just one person per truck to hoist and weigh

                       identifies the resident's name and address. The  truck then empties the can and the
                       information is fed automatically into the billing system through an onboard computer.
                       This provides a reliable system for charging residents for waste collection by we
                       One issue we have to resolve is establishing an appropriate regulation  for the weigl
                       mechanism used in our system. After Minnesota's Weights and Measures Agency


nore consistent with pr      needs.
                                 >ased system. The
                                 ie, was tested over
                       scanner on 1
         The wei
              mber were re<
              o a personal c

                       waste 15

                       In our r
   trial sh
/ed that it was very
>ver the course of tl

                       system, however, you mi
                             itainers. Under a semiautomated
                                 •s to buy specific containers.

Implementing  and  Monitorin;
Unit  Pricing
       aving carefully planned and designed a unit pricing
       program that best reflects the needs and concerns of
       your community, you can now get started.
       Implementing a unit pricing program is an ongoing
process, requiring persistent attention to a wide range of
details. This part of the guide focuses on the central issues
concerning unit pricing implementation, including public
education, accounting, and administrative changes. Suggestions
also are included for collecting data and monitoring the
program once it is in place.
There are two distinct schools of thought about the timing of
unit pricing implementation. One maintains that unit pricing
should be implemented within a specified time frame and that
rate adjustments, complementary programs such as recycling,
and any other changes be made all at once. The other believes
that households respond better when they are asked to make
changes in small, manageable increments over time.

The final decision about which path to follow is  a local one
based on the views of your agency, the local government,
community organizations, and the households themselves. In
most towns, residents will prefer to modify their habits as
infrequently as possible. In this case, it might be easiest to
implement a package of changes all at once, rather than ask
for a series of adjustments six months apart.

   Many tasks need to be performed during unit pricing
implementation. While the exact activities vary from community to
community based on program design and local conditions, certain tasks
pertain to nearly all unit pricing programs. These include conducting
public relations and reorganizing your solid waste agency's
administrative office.  (Both of these activities are discussed in detail
below.) Other  common tasks include:

   Establishing legal authority.  Generally, to implement a unit
   pricing program, your solid waste agency needs the authority to set
   and approve waste collection rates and bill accordingly, establish an
   ordinance  mandating the use of the waste collection service, establish
   penalties for illegal dumping, and spend solid waste agency funds  for
   activities beyond those associated with traditional solid waste
   management services (for example, public education). If your
   community lacks the authority to implement and enforce any portion
   of the unit pricing program, the first step will be to draft the
   necessary ordinances in consultation with your legal counsel.

   Procuring containers. You also will need to purchase the
   necessary waste containers, bags, tags, or stickers for the  program.
   Once the size and  design specifications are established, you can seek
   vendors for the required materials. In some cases, a request for
   proposal (RFP) might be placed to solicit competing bids from several
   vendors. This can  help you procure the necessary materials at the
   least  cost to your agency. After a vendor is selected and an order
   placed, storage and distribution plans will be needed. In  particular,
   communities planning to use local retailers to distribute bags, tags, or
   stickers should identify and negotiate with local merchants to arrive
   at a mutually beneficial arrangement. Communities developing  a
   can-based  system will need to inform residents of the can options,
   have  residents select the number and size of cans they will use  (if a
   variable can system is used), and distribute the cans to all residents.
   Assisting  groups with special needs.  If your community is
   planning to assist residents with special needs, such as multi-family,
   low-income, physically handicapped, or elderly residents, you will
   need  to develop a  list of qualification criteria. In addition, you might
   need  to devise special applications and train staff to review cases.
   Procedures should be established for resolving any disputes or
   complaints that could occur during the review process. If you are
   planning to include multi-family residents in your program, consider
   planning and conducting a pilot program before you switch to unit
   pricing. In this way, different systems and technologies can be tested
   prior to launching the actual program.

    Establishing complementary programs.  If you
    have decided to launch or expand recycling or
    composting efforts, bulky waste collections, or
    other complementary programs in conjunction with
    your unit pricing program, you will need to
    coordinate the many steps involved in establishing
    these programs. Depending on the resources
    available and on local conditions, these steps could
    include purchasing or modifying existing
    equipment, hiring and training collection staff,
    identifying local markets for recyclables, and
    contracting with buyers.

    Ensuring enforcement.  Enforcement procedures
    could be established to address the possibility of
    illegal dumping or burning of waste, "borrowing" of
    tags or stickers from neighbors' bags, or nonpayment
    of fees. If necessary, enforcement staff can be hired and
    procedures developed for investigating incidents. In
    many cases,  these inspectors will need to  receive training,
    equipment,  and facilities.  Establishing special collections for certain
    wastes (such as bulky items or materials such as paints, pesticides, and
    other items considered household hazardous waste), combined with
    fines for violations, can help prevent illegal dumping or burning. Also,
    to help instill an environmental ethic in the community which can
    further reduce the potential for illegal dumping, consider establishing
    regular citizen cleanups,  "adopt-a-highway" projects, and other
    programs that will gather residents together and focus their interest on
    maintaining and improving their community.
   To ensure a successful
   As discussed in Part II, public outreach during the planning and
design stages enables decision-makers to learn more about residents'
waste management needs, to inform them of the benefits of unit pricing,
to solicit input on the goals of a unit pricing program, and to get
feedback on a tentative rate structure. Such efforts are essential for
building support among residents for unit pricing.

   During the implementation phase, the public outreach program should
have two goals: 1) to build on earlier efforts to increase public acceptance of
unit pricing and 2) to provide residents with the detailed information they
need to understand and participate in the new program. Participants at
EPA's Unit Pricing Roundtable agreed that well-informed residents are
easier to serve and more likely to be satisfied with the new program.
Building public support and providing program specifics typically begins
approximately three months before program implementation. These
activities are often continued in varying degrees throughout the program.
                                               IMPLEMENTING AND MONITORING UNIT PRICING

As part of its public outreach
program, Seattle's Solid Waste
Ut/'//'ty is conveying important
information about unit pricing
using a series of engaging
   The first step is to determine the scope and content of your
community relations effort. All such efforts need to convey to residents
the exact structure of the new unit pricing program. Be sure to relate all
essential information, including:

   • The types and costs of all services offered under the new
   • The schedule for collections.
   • The means by which fees will be collected.
   • The methods or outlets for purchasing cans, bags, tags, or
   • The penalties for noncompliance.
   When imparting this information to the community, make sure that
                         all instructions are clear and simple. Explain
                           any unit
                            pricing concepts that residents might not
                            understand. If you are producing written
                            materials, consider translating the text into
                           more than one language, depending on the
                           makeup of your community. Use
                           illustrations whenever possible to convey
                          key concepts. Sometimes local copying shops
                          or printers will donate their services to help
                         produce these materials.

                            Also, be sure to  discuss the waste
                         management goals for the community and
                         show how the new unit pricing program will
                         help meet those goals. If you had organized a
                         citizens advisory council or an informal
                         gathering of community or civic groups to
                         help you with public outreach during the
                         planning stage, you might reconvene this
                         group to plan your implementation outreach

efforts. Such a group can help you develop an  effective message and
ensure that you reach all segments of the community.

   Offer citizens information on how to alter their purchasing and
behavior patterns to prevent and reduce waste. Tips on waste prevention
options, such as reusing containers, renting seldom-used equipment, and
donating unwanted items, are useful. Encouraging residents to purchase
recyclable  items and goods with recycled content also is important. In
addition, the message is likely to have a greater impact if information on
additional  benefits, such as saving energy and preserving natural
resources, is provided. If residents make  the program's goals their goals
too, they are more likely to make long-term behavioral  changes.

   There are many ways to convey the specifics of the program to the
community. While the solid waste agency will need to decide which
methods to use and how often to repeat the message, some avenues to
consider include:

  • Introducing the program with a flyer or letter from a local official or
    recycling coordinator.
  • Enclosing inserts in utility bills that discuss the program and answer
    common questions. Direct mailings to households also can be used.
  • Developing posters or flyers for distribution in stores, libraries,
    schools, and other public places around the community. Retail
    stores will be especially valuable if your program uses bags, tags, or
    stickers that are  distributed though retail outlets. You can leave
    flyers, posters, newsletters, and other materials with these stores,
    and ensure that the retailers themselves are familiar with the
  • Producing newsletters that discuss the need for the program, answer
    questions,  and provide updates about the program's progress.
  • Establishing a telephone hotline to provide residents with
    immediate answers to their questions.
   Drafting press releases and developing media spots for radio or cable
television. Through the  media, you can reach a broad range of residents.

   Additional outreach techniques can be employed based on your
community's particular  conditions. For example, if you feel that a
specific group of residents, such as senior citizens, are not receiving
enough information to participate effectively, you might consider
reaching out to senior centers, local churches, and other institutions to
ensure that everyone is familiar with unit pricing.

   Some solid  waste  agencies opt to conduct public education
campaigns using existing inhouse staff. Others hire one or more qualified
individuals to conduct these activities or pay outside consultants to
perform public outreach. This decision is typically based on the size  of
your community, the scope of your program, and the available resources.

   Keep in mind that public outreach is an ongoing process. A
consistent flow of information, designed to  answer questions, receive
input, and communicate any changes made to the program after it has
been implemented, will help maintain interest in the program. In
addition, an ongoing campaign can continue to inform and educate
citizens about new ways to prevent or reduce waste.
                                              IMPLEMENTING AND MONITORING UNIT PRICING        49

                              Depending on their current structure and the scope of the new unit
                           pricing program, some solid waste agencies will not have to make
                           significant changes in the way they administer solid waste collection
                           services. Such communities can switch to unit pricing using only some
                           overtime work from existing employees. Other programs, however, could
                           require new administrative and accounting systems and  staff to handle
                           the changes in billing, tracking costs and revenues, managing operations,
                           and maintaining customer relations. In some cases, larger communities
                           planning more complicated unit pricing systems have found it
                           worthwhile to hire analytical, financial,  and customer service staff to
                           handle both the  transition and ongoing requirements of the program.
                              Getting Your New Administrative  Office  On Line

                              The keys to transforming your solid waste agency's administration into
                              an efficient team capable of handling its new responsibilities are:

                                 Anticipating the level of expertise that will be necessary, both during pro-
                                 gram implementation and ongoing operation.
                                 Giving funding priority to areas that hold the greatest opportunity for sav-
                                 ings or pose the greatest risk of financial problems.
                                 Meeting temporary needs during the transition with temporary help,
                                 rather than locking into a level of employment that proves excessive in the
                                 long run.
                              While the process of reorganizing an administrative system for a new
                           unit pricing program can seem daunting, performing the switch as a
                           series of steps with clear objectives in mind will help make the process
                           manageable. Generally, communities with unit pricing programs have
                           found that the process of reorganizing the administrative office should
                           take place between three and six months before the start of the program.

                              The first step is to define the new responsibilities the administrative
                           office must assume once the program has reached its steady state,  as
                           described in Part III. Consider all the functions, such as public relations,
                           customer service, economic analysis, financial management and tracking,
                           and enforcement, that the office will need to perform. With steady-state as
                           the goal, try to create a new office that matches these needs rather than
                           accommodate your goals to the skills that are available. After establishing

the functions and related skills required of your new administrative
office, you should then begin to reorganize the office to meet these

    During the process of defining new responsibilities, remember that the
unit pricing program will change the administrative office's functions
significantly. The office will be operating a revenue recovery system that
pays for the work of the solid waste agency, rather than justifying funding
levels to the municipality's budget office. The office will find it has an
unprecedented level of influence on customers' behavior through the price
signals it sends. This brings additional responsibility for the proper design
and management of these price signals. Managing these new functions
requires the office to have access to a range of skills, including:

    Economics. Developing the unit pricing rate structure and related
    forecasts of revenues, costs, and total community use of waste
    collection, recycling, and composting programs.
    Public relations.  Developing  outreach and education activities and
    managing customer service representatives. This function includes
    interaction with the general public, as well as local interest groups,
    elected officials, and the  news media.
    Financial and logistical management.  Billing households or
    collecting revenues from the sale of bags, tags, or stickers; developing
    debt management strategies; managing cash reserves; and developing
    a distribution system for  the program's cans, bags, tags, or stickers.
    Enforcement. Ensuring that households pay for the level of solid
    waste services they receive.
    In addition, several important suggestions were offered during EPA's
Unit Pricing Roundtable for organizing your administrative office's
financial operations. Be sure to establish access to a cash reserve to help the
office cover periods of unanticipated revenue reductions. Repeated
instances of revenue shortfalls, however, could signal  an imbalance
between the services offered and your program's rate structure.

    Preparing existing administrative staff for the changes that will result
from the switch to unit pricing is another important step. While the change
initially might not be viewed  positively by all employees, conveying the
positive aspects of the switch might help ease concerns. In addition to the
reorientation of the office away from traditional collection and disposal
services to a new emphasis on waste prevention, recycling, and
composting, employees should be informed of the opportunities  for staff
training and development in new areas, such as public relations and
customer service, that the new program will create.

    Furthermore, when organizing the new office, communities should be
aware that expanding the administrative office requires a delicate
balancing of resources: while allocating too much funding to the office
could cut into the savings that unit  pricing programs offer, underfunding
the office can result in inefficiencies and poor revenue recovery. This is

                                               IMPLEMENTING AND MONITORING UNIT PRICING

                          particularly true during the implementation and transition periods,
                          before the unit pricing steady-state has been reached. During this period,
                          using temporary labor or employees on loan from other municipal
                          agencies might help to cover short-term budgeting, analytical, and other
Developing a Schedule
                             Organizing the many steps involved in planning, designing, and
                          implementing a unit pricing program into a clear schedule is an essential
                          step for most communities. While the exact schedule of steps should be
                          viewed as flexible, establishing an overview of the entire process will
                          help eliminate the possibility of any serious omissions. Table 4-1
                          presents a detailed timeline for your reference. (The dates listed on the
                          timeline represent the number of months before or after program
                          implementation each step should be initiated. Program implementation
                          is defined as the date on which actual service changes begin.)

                             While the dates have been established based on the experiences of a
                          number of communities with unit pricing programs in place, local
                          conditions and needs will inevitably affect the exact timing of your
                          program's development. Many factors affect how you adapt this timeline
                          to your community's needs, including equipment changes, contractual
                          changes, financing requirements, and employment, as well as political
                          factors (such as the nature and structure of the local political process and
                          the potential existence of a perceived solid waste crisis). In most cases,
                          the level of political support  is the most important variable, routinely
                          cited by communities as responsible for either significant delays or rapid
                          progress in the implementation of their unit pricing programs. Most of
                          the remaining steps can be conducted fairly routinely in 3 to 12  months,
                          depending on system choices, size of the community, and types  of solid
                          waste collection and administration systems in place.
                             As solid waste management has grown more challenging in recent
                          years, local officials are finding that they have greater freedom to
                          develop and implement new systems for managing waste. At the same
                          time, however, their efforts also are subject to a higher level of scrutiny.
                          Within the context of tightening municipal budgets and increasing
                          demands for city services of all types, local officials must be able to
                          discuss budget needs and priorities in a compelling way, using reliable
                          data to support their case. Specifically,  a thorough process of collecting
                          and analyzing data about the performance of the unit pricing program will:

  • Provide the facts about the cost-effectiveness of the unit pricing
    program that local officials need to justify the current budget.
  • Enable planners to justify future budget
    needs by demonstrating that the new
    spending on the program could in fact
    save money in the long run.
  • Help  reassure bond rating agencies of
    the cost-effectiveness of the unit pricing
    program, thereby reducing the cost of
    financing it through bond sales.
  • Allow planners to accurately compare the
    performance of any complementary
    programs, enabling them to reallocate
    resources among the programs to increase
    the overall effectiveness of unit pricing.
  • Generate concrete, understandable, and
    accurate information that can help other
    communities considering unit pricing.
    Moreover, this data will enable solid waste agency planners to adjust
the unit pricing program to unforeseen circumstances, ensuring that the
effort and  attention paid to planning, designing, and implementing the
program will  not be wasted. Typically, program monitoring and evaluation
begins about six months before the date of unit pricing implementation,
when information on the  old waste management system is gathered. These
data will act as a benchmark against which the progress  of the unit pricing
program can be measured. Monitoring and evaluation begins as soon as the
new program is launched and continues throughout the  program.

    Data collection is the first step in program monitoring and
evaluation. While  the exact types of data a community collects will vary
from one area to another, most municipalities track:

  • Changes in the community's  waste generation rate
  • Costs incurred, both in starting up and in operating the new program
  • Revenues received under the program
    Communities often begin by collecting data on the amount of waste
disposed of, recycled, and composted before and after the program's
implementation. Estimates of the amount of material illegally dumped can
be calculated as well. To allow for a more  comprehensive analysis, the
waste generation rates can be tracked by month and year, and, if possible,
by origin and destination. In addition, the data can be further broken down
by facility, customer group (such as residential, multi-family, commercial,
or industrial), and program (for example, drop-off versus curbside services).
To gain a more accurate picture of the impact of their program, some
communities  also estimate the amount of waste that would have been
generated  in the absence of the unit pricing program.

    The specific costs that a community might want to research include
disposal costs and tipping fees; new administrative costs, including public
Collecting and analyzing unit pricing
data will help the solid waste agency
        i ILS prog/um LO
                                               IMPLEMENTING AND MONITORING UNIT PRICING

                           relations, billing and invoicing, inventory and distribution of bags, tags or
                           cans, and additional customer service staff; and direct program and service
                           costs such as wages, supplies, consultant services, and postage. Costs for
                           monitoring and cleaning up illegal dumping can be included as well.

                              In addition, to increase the usefulness of cost data, communities
                           might want to attribute different expenses to specific components of unit
                           pricing (such as administrative labor or container costs) and track these
                           separate cost categories by month and year. Be careful, however, to
                           distinguish between short-term expenses and long-term investments for
                           needed facilities and equipment. During this process, take care to
                           separate transition and startup expenses from the ongoing operational
                           costs of unit pricing. If possible,  initial capital costs should be allocated
                           over time and across programs. Collecting data on the revenues resulting
                           from unit pricing tends to be simpler. Communities typically track
                           revenues by type of program and customer category.

                              To closely track a new unit pricing program, communities also might
                           want to develop data on the number of subscribers or participants,
                           broken down into type of service and program; the service and
                           subscription levels (if  a variable  can program is used); the inventories of
                           bags or tags held by distributors or manufacturers; the weight of
                           containers set out (if possible, through surveys); and the numbers of
                           phone calls and letters and the issues raised.

                              Program evaluation can yield misleading results, however. To help
                           avoid some common data collection and evaluation mistakes, panelists at
                           EPA's Unit Pricing Roundtable recommended avoiding focusing on
                           participation rates as a measure of success. While a study of
                           participation levels can help guide program modifications, they are not
                           useful for gauging overall progress since they do not address cost issues
                           and tend not to distinguish between casual and committed participants.
                           Likewise, panelists recommended that communities also consider factors
                           beyond overall waste reduction when evaluating a program. For
                           example, intangible issues, such as dissatisfaction with the program
                           among residents of multi-family buildings, would not be reflected in an
                           analysis that focused exclusively on waste reduction numbers.
                              Tips  for Data Collection and Program Monitoring

                                 Get data from several different angles if possible (for example, waste quan-
                                 tity generation rates for both collection services and disposal facilities).
                                 Don't simply accept the numbers as they are  generated. Consider the
                                 possibility that factors such as underlying shifts in categories, definitions,
                                 or reporting might affect the accuracy of the results.
                                 Be sure to carefully track costs. Without accurate and attributable data,
                                 the impact of your cost-effectiveness evaluation will be reduced.

Customer Relations
Public outreach
Brief management and elected officials              X
Conduct focus groups on rate program design       X       X
and issues
Develop information materials for council and press             X
Hold council hearings and public hearings                     X
Public relations/education
Issue RFP for public relations firm, if needed         X
Design educational materials, bill stuffers                     X
Review/refine educational materials                                   X                                 X
Produce educational materials                                       X                                 X
Distribute educational materials                                      X                                 X

Request customer service representative (CSR)      X
computers and workspace, if needed
Advertise for CSRs                                                X
Obtain and install CSR computer equipment                          X
Hire and train CSRs                                                X
Release temporary CSRs                                                             X
Planning and Analysis
Hire rates analyst (part- or full-time)               X
Determine rate setting procedure and calculate rates             X
Refine rate structure                                               X                                 X
                                                    IMPLEMENTING AND MONITORING UNIT PRICING          55

Containers and Enforcement
Bags, tags, or stickers
Set specifications for sticker or bag and design logo     X
Issue RFP for sticker or bag manufacture             X
Select manufacturer
Negotiate with retai  outlets for sticker or           X
bag distribution
Finalize sticker or bag distribution plans
Begin selling stickers or bags in stores
Design error tags                                 X
 Issue RFP for can purchase and distribution          X
 Decide on can size and purchase containers                   X
 Have residents select can size                               X
 Distribute cans
 Replace lost, stolen, or wrong-sized cans
 Establish preliminary enforcement procedures        X
 Request equipment and facilities for inspectors       X
 Finalize enforcement procedures                            X
 Train inspectors
 Release temporary inspectors
 Special Groups
 Negotiate with welfare agencies                    X
 Develop exemption/discount criteria                X
 Determine responsible office                       X
 Create procedures for qualification, disputes, etc.              X
 Finalize criteria and procedures                              X
 Train inspectors or qualifiers                                X
 Conduct qualifications

Multi-Family Planning
Evaluate level of multi-family need                  X
Evaluate multi-family pilot options                  X
Conduct pilot program, if appropriate                        X       X
Changes to Other Programs
Determine which complementary services to offer              X
Decide funding source for new and existing                   X
complementary programs
Modify unit pricing program to cover these costs,                      X
if necessary
Modify diversion program contracts and                                                                 X
procedures as necessary
Draft final  ordinances for new program                      X
Draft ordinances, as necessary, for illegal dumping              X
and burning, recycling, and special collections
Enact ordinances                                                 X
Data Collection
Analyze information needs  and design reporting      X
Finalize procedures                              X
Conduct baseline data collection                            X                                          X
Begin postimplementation data collection                                      X                        X
Conduct data analysis and program modification                                        X                X
                                                   IMPLEMENTING AND MONITORING UNIT PRICING          57

     *A    To
                                                     II avcllUca.
                            Not all citizens find garbage fascinating, nor will they immediately understand the
                            reasons for a new waste management program. Explaining a new program more
                            than once is not rude or insulting—it's a courtesy to people who would like to
                            participate but have other things on their minds. Also, because unit pricing
                            requires that residents pay attention to details such as labeling waste containers
                            with stickers or buying bags from the municipality, hearing the message several
                            times increases the chance that all residents will get the information they need.

                            It does require a significant review of your agency's goals and structure. But this
                            examination of new needs and existing employees could lead to the discovery of
                            some previously untapped skills in your agency.
                            Select what you need from the timeline. The timeline lists the many possible kinds
                            of new activities that a unit pricing program could require. It is designed to help
                            solid waste officials think about specific activities, thereby supplementing the
                            broad concepts that are stressed elsewhere in this guide.
While many of your unit pricing decisions face budgetary constraints, data
collection is essential for planning and for ensuring cost-effectiveness. The right
kind of information can show which types of unit pricing program and rate
modifications can best meet the community's needs over time.

Points  to
   Be sure your public education campaign uses a consistent,
   simple message that clearly communicates the goals of the
   unit pricing program.
   To ease the administrative transition, clearly define the
   responsibilities of the office, the level of expertise that will be
   necessary, and any new staff that need to be brought on.
   Give funding priority to areas that hold the greatest risk of
   financial problems or hold the greatest opportunity for savings
   through effective management of limited administrative budgets.
   Establish a flexible schedule for your unit pricing program that
   reflects the political, technical, and economic concerns and issues
   in your community.
   Be sure to evaluate your program's progress periodically, including
   collecting and analyzing data on waste generation rates, costs and
   revenues, and the attitude of residents toward the program.
   To improve your data collection, make providing numbers part
   of the contract (or franchise or license agreement) with your
   haulers. Ask for monthly reporting, and provide forms and
   definitions to ensure you receive the information you require.

  Case    Studies
                           Public Education
                           A  View From Austin, Texas
                           respond to state
                               ccess, we re-
                                            behavior does not always cor-
                                            ing program a good chance
                                            ram was needed. Since
                           vey the nature of the new program to city council members, customers, and our
                           own solid waste service workers. The name we came up with was "Pay-as-You-
                           Throw," which has economic as well as environmental appeal.

                           Then, we initiated a pilot program beginning with a three-phase marketing plan to
                           reach out to the 3,000 participating single-family households. In the first phase, the
                           Preimplementation Phase, we worked very hard to sell the program in the commu-
                           nity. We lined up support from interest groups, asked city council members to talk
                           about the program, and encouraged the media to write positive editorials.

                           During the second phase, the Implementation  Phase, we had a more specific chal-
                           lenge.  We have had curbside recycling in Austin since 1982 and good experiences
                                                                    scycling program, however,
                                                                     holds, people were asking "Why
                                                         Iready recycling?"  Our biggest challenge was
                                                         further reduce waste and  encourage them to
                                                         jnction with recycling. After implementation,
                                                         veys and from direct observation of recycling
                                                         n 50 to 80 percent in  some neighborhoods
with recyclir
when we br
                       •am to the pilot he
                           The third phase of our public outreach program was the Maintenance Phase.
                           Once the program was in place, we realized it was important to continue trying
                           to raise awareness. It was during this phase that we introduced what became our
                           collectors, dates of
                           about our i
                          d othe-
                           a rise in rea<
                                            tains features on the garbage
                                            Hghborhood, discussions
                                             knew that only 15 to 25 per-
                                            However, after we provided
                                            at, our survey results showed

Administration  Staffing
A View From Dor/en, Illinois
tern to a franchise sticker system in May 1990. Their administrative staffing needs
were unchanged: one person from the city oversees the activities of the franchise
hauler. City council members and existing staff put in overtime to develop details
creased staffing needs. Research indicates that this level of small, temporary
increases in administrative needs during implementation of a new or revised
pricing pro?r3.m is typical OT msny smellier communities.
Administration  Staffing
A View From Seattle, Washington
The Seattle Solid Waste Utility, an enterprise fund, operates a variable can sub-
scription system with recycling fees and other charges embedded in the collection
rates. Billin is  erformed in cooeration with the Seattle Water Deartment at a
          o      o      ci           *p .

consulting services, mostly to assist with setting rates. Additionally, Seattle's 22
full-time customer service representatives and 9 refuse inspectors help to r
the service and enforcement needs of the new program.
                                                 IMPLEMENTING AND MONITORING UNIT PRICING          61

                                        APPENDIX A
EPA's  Unit  Pricing
Roundtable  Discussion:
Questions  & Alternatives
     his appendix presents a selection of proceedings from
     EPA's Unit Pricing Roundtable, held in December 1992.
     These proceedings include descriptions of different
     programs from around the country, experiences of solid
waste officials who have spearheaded unit pricing programs, and
ideas on managing program costs and challenges. The discussions
provided in this appendix are organized around a number of
specific questions and are divided into four general sections:
   • Getting started
   • Exploring program options, issues, and experiences
   • Integrating unit pricing and complementary programs
   • Accommodating groups with special needs
The first section explores issues involved in starting a unit pricing
program, such as education, communication, and changing the
status quo. The second section compares the essential components
of a unit pricing program, including container choices, pricing
models, and billing systems. It then moves on to financial issues,
including cash flow and enterprise funds, and discusses enforcement
issues. The third section focuses on integrating unit pricing and
complementary programs, such as yard trimmings and household
hazardous waste collection programs. The last section shares some
of the Roundtable proceedings on accommodating groups with
special needs, such as senior citizens, large families, and
low-income households.
                                             APPENDICES         63


                              Changing the Status Quo
         lo you convince citizens that unit pricing is a good idea in the first place?  That has

                Seattle, WA:  I think getting some good public support by working on it early is very important.
                              Contact not only recycling groups but also community councils, people whom you
                              might not expect to be big advocates of a unit pricing program.
                  State of IL:  The public opposition question comes up for communities that currently pay for their
                              garbage collection out of general taxes (e.g., property taxes). In a sense, that's a hid-
                              den cost,  and people perceive garbage collection as a free service. But if they have a
                              monthly bill (instead of paying through property taxes, for example), they know that
                              garbage collection costs something and there's "no free lunch." Then, in moving to
                              a unit pricing program, they can actually see that the cost of garbage collection
                              comes down. Whereas if the costs are hidden as property tax or general
         Unit Pricing Roundtable Participants
         The EPA-sponsored Unit Pricing Roundtable was moderated by Jan Canterbury of the EPA Office
         of Solid Waste and attended by over a dozen individuals who have been involved in successful unit
         pricing programs. The participants included:
           Nancy Lee Newell of the City of Durham, North Carolina
           Peggy Douglas of the City of Knoxville, Tennessee
           Barbara Cathey of the City of Pasadena, California
           Bill Dunn of the Minnesota Office of Waste Management
           Nick Pealy of the Seattle Solid Waste Utility, Washington
           Jody Harris of the Maine Waste Management Agency
           Jamy Poth of the City of Austin, Texas
           Jeanne Becker of Becker Associates, Illinois
           Lisa Skumatz and Cabell Breckinridge of Synergic Resources Corporation (SRC)
           Lon Hultgren of the Town of Mansfield, Connecticut
           Greg Harder of the Pennsylvania Department of Environmental Resources
           Thomas Kusterer of the Montgomery County Government, Maryland
           Robert Arner of the Northern Virginia Planning District Commission

                                                                           APPENDIX A
               revenue, then no matter ho wfarwaste collection costs drop, they see unitpricing as

State ofMN:  What I have found in Minnesota, and it's true with a lot of waste issues, is that we
               have the true believers and then we have the skeptics. The two groups are pretty
               much cemented before the discussion even begins. So, how do you get them to move?
               I'm not sure. But mandates at either the state, county, or city level can work.

        SRC:  Maybe one of the ways to help get past public opposition is to work with members of
               citizen groups or "green groups" to start a groundswell of support for the program.
               Have some success stories from other communities. This can help make it so that the
               politicians supporting unit pricing are going with the tide rather than bucking the system.
               Citizen Education

 id hoc citizen advisory groups, focus groups, surveys, and things of that sort
 Dt started?

  Austin, TX:  Yes, in fact, the way we introduced the program (this takes a lot of leg work but is
               extremely important) is that we contacted neighborhood and civic associations, as
               well as our recycling block leaders. Just coming up with the list of associations was a
               task. We produced an eight-minute video on unit pricing and played the video at  the
               neighborhood meetings. We had real people talking about what was about to hap-
               pen. We got a lot of feedback by showing that tape. We carried out two focus group
               surveys, including one on larger families, an issue that many people want to  hear
               more about. We experimented with soliciting feedback that was recorded on a tele-
               phone  voice mail system. This is effective because, believe it or not, people are not
               that hesitant to record their views. It is also cost-effective, since we use the telephone
               answering tree for our other programs as well. The voice mail is a call-automated sys-
               tem, so the caller presses "7" to find out when our brush pick up date is or  "2"  to
               find out how to exchange carts. Many of the  questions asked are just that simple. As
               you review your communications and outreach system, it makes sense to look into
               voice mail.
               Costs of Public  Education

  Austin, TX:  Our educational costs ranged from $6 to $8 per household per year in the early
               years. Most of those costs were start-up costs. We saved a lot of money by doing all
               of our work in-house—designing a user-friendly name and a regular way of communi-
               cating in our pilot program. However, this in-house approach meant that we were con-
               strained from using mass media such as TV and radio. We did not have the capacity
               to develop a TV commercial that said, "Here is how you participate in the new pro-
               gram." I really doubt that many communities phasing in their unit pricing program
               will find a mass  media program useful because unit pricing can require a com-
               plex explanation. Instead, we use mass media only with our generic recycling and

                  Seattle, WA:
                Pasadena, CA:
yard trimmings messages—simple messages such as "Either leave it on the lawn or compost
it." We had three full-time staff members for education. One person was assigned to pub-
lic relations, another was a graphic artist that participated in  many things, and I was the
planner. Also, we utilized volunteers (such  as recycling block leaders or neighborhood
association presidents) who provided the leg work in getting the word out. You would be
surprised how interested the volunteers are in doing something. We produced our video
out-of-house because we didn't have the  necessary cameras.

Seattle spends $3.25 per household per year on public education, but that is actually
high because a portion of that money goes to educating commercial and transfer sta-
tions.  So it's probably under $3. But  if you can piggyback some of these things, you
can reduce your costs even further. Postage is very expensive, so if you can tag post-
age for the unit pricing message along with something else, it's even cheaper.

I'd like to emphasize that  it is absolutely key to put yourself on the firing line with the
customers.  They pay the fees. When  we went to the community we assured them,
"We're not taking anything away from  you. We are giving you the opportunity to
have more control over your costs. You cut your trash  down, you cut your trash bill
down."  You need to listen, take the abuse, but then once the people  actually experi-
ence the program, they become converts, they don't want to go back. Either you take
the time up front to educate, or you  take it later  with  operational difficulties once
the program is underway.
                                 Getting Ready for Unit  Pricing
                Knoxv/7/e, TN:
My fear is that a lot of what's being discussed here may be difficult to apply to most
cities in the South. In Tennessee, for example, we did a needs assessment of all the
counties, and we found, first of all, that the waste composition was very different
from the rest of the  country. Only about 25 percent to 35 percent of the total waste
stream was residential. Also, there is no city-wide curbside recycling, very little yard
trimmings recycling,  no household hazardous waste collection, and only one regional
materials recovery facility. In addition, our landfill tipping fees average only about
$25/ton even though we have adopted Subtitle  D landfill regulations. Our land values
are just a whole lot less than other areas  of the country,  for now at least. I don't
think Tennessee is a  lot different than most states in the South.
                          EPA:   I'm glad that you raised that because one of the goals of the guide is to provide infor-
                                 mation for communities that may not yet be at the jumping off point for implement-
                                 ing unit pricing. Any comments?
                Pasadena, CA:

                Knoxv/7/e, TN:
What do you mean they are not ready?  What's your objective?

Well, to answer the first part of your question, in our needs assessment study, we
found that a third of the  counties in Tennessee didn't even have collection service,
period. So it's hard to talk about unit pricing or recycling. And one of the main rea-
sons why I wanted to go to unit pricing was to be able to  finance some of the extra
municipal solid waste programs. I can't do it right now, because every time I try

                                                                             APPENDIX  A
                 to get city council to increase property taxes to pay for curbside recycling, I'm com-
                 peting against stormwater drain programs or something else.

Mansfield, CT:  You can start implementation with a drop-off center. Our community used the closure
                 of the town's landfill to start paying by the bag at the transfer station. Any major facil-
                 ity or system change could act  as a catalyst for a unit pricing system.
  Durham, NC:
 Well, some of the South is ready, and it's because we have a very progressive state
 legislation package to push us. We have a 25 percent goal for July 1993, which not
 many of us are going to reach. And a 40 percent goal by 2001. We have to provide
 some kind of recycling for our citizens. That's spurring a lot of interest in our state,
 and a lot of people are looking at all the complementary programs.  We are trying to
 give people as many options as possible (e.g., curbside recycling and garbage collec-
 tion once a week, yard trimmings collection, a yard trimmings composting facility,
 and a bulky item pick-up). Anything other than sending it to a landfill. Our landfill is
 going to close, and our county hasn't been able to site another,  so we're going to be
 shipping our waste out of the county. So we  have a real big incentive to make sure we
 dispose of as little as possible. When you do have a crisis situation, and you have leg-
 islation that's pushing you in that direction on a state level, it can push you into the
 cutting edge of things, so it could be that you need to knock on  your state legisla-
 ture's door.
  Northern VA:
 Voluntary Versus Mandatory Programs

^vantages of voluntary programs?

 There are communities like Plantation, Florida, that have voluntary unit pricing. Volun-
 tary programs are more compatible with ideals of personal freedom, and the enforce-
 ment costs may be lower.  On the other hand, there may be less participation in
 voluntary programs. A certain amount of good will is associated with mandatory pro-
 grams, since everyone has to participate. Mandatory programs also provide a greater
 ability to cover fixed costs and less of an incentive for illegal dumping.  If you have to
 pay for at least some municipal solid waste service, then you may be less inclined to
 dump your waste.
                 Time Factors
   id program?

    Austin, TX:  Yes. We went from manual collection to sem/outomoted and estimate that the col-
                 lection cost savings will be $5.11 per household per year.  And we also went from
                 three collectors to two collectors. That might not sound like much on an individual
                 household basis, but certainly there is a cost savings.   Then, we  promote the

                                 educational message of "share your boundary with your neighbor," so we can make
                                 fewer stops in your neighborhood.

                  Seattle, WA:   I think there are economies when you're collecting minicans as opposed to toters.
                                 Toters take 20 to 45 seconds apiece, depending on what you've got. The minican
                                 takes less time than that, so there are definitely time savings. But, I think that bags
                                 are considerably faster than  either toters or minicans.
                                 Bag Programs
                  Stole of PA:   Probably the largest city in Pennsylvania that has a bag system is Allentown, but it
                                 has a limited per-bag system that is only used for grass clippings. Reading has a popu-
                                 lation of 78,000, but it has a voluntary system in which haulers are required to offer
                                 a variable rate option.  Wilkes-Barre has a population of around 48,500,  but its
                                 program applies only to residents of apartment buildings. The largest mandatory per-
                                 bag system is probably Carlisle, which has a population of around 20,000. Carlisle is
                                 followed by South White Hall Township, with a population of around 18,000. Most
                                 per-bag systems in Pennsylvania use standard size 30-gallon trash bags. And usually
                                 they put a weight limit of around 40 pounds on the bags so you can't fill them up
                                 with bricks.
                  Stole ofIL:    The advantage of stickers is that there is no billing at all. They're applicable to vari-
                                 ous types of service, types of containers, and types of waste. With a simple, uniform
                                 schedule, stickers could be ordered through the mail. Or somebody could buy 50 stick-
                                 ers at a time from a hauler or from the local grocery store. The stickers are easy to
                                 keep and they are not going to rot. Often times, the haulers can't read and write,
                                 and so stickers are very simple.  Since every second they spend at a stop is money to
                                 them, the more data collection or enforcement that you require haulers per stop, the
                                 less likely they are to do it. It's a time limit. But stickers are not perfect. The adhe-
                                 sive can be a problem. The  hauler might not be able to find them. Stickers can be
                                 stolen off of someone else's garbage bag. And maybe the biggest problem is that peo-
                                 ple could buy a year's worth of bags in January, and then not  buy anymore for the
                                 next several months. It is really hard to  have to predict people's behavior in order to
                                 forecast revenue. The largest community in Illinois that has a sticker program is the
                                 City of Aurora, which has 100,000 people.

                 Durham, NC:   Stickers are interesting because you can take a big bag that you got at the store and
                                 put your garbage in it and put a sticker on it. Then you are reusing that bag and not
                                 generating another waste product.

                                                                                         APPENDIX A
                             Pricing  Models
                Stole of/L:   In Illinois, communities tend to charge what their neighbors do. The rates vary from
                             $1 to $2 a sticker. I really think they just try it and hope that the price is in the right

               State of PA:   Most Pennsylvania communities use a bag-based unit pricing system because they see
                             examples in nearby communities.  Carlisle adopted one about three years ago,  and
                             people in the neighboring township actually began clamoring for the same. In fact,
                             they actually sued the township to give them a bag-based system instead of a flat-
                             rate system. People like unit pricing because they see it as being very fair and very

                      SRC:   A 30-percent impact on customer costs may be a threshold level at which people
                             begin responding to unit pricing. In contrast, I've seen some communities offer 90-gal-
                             lon cans as the smallest size and then charge a quarter  or a dollar for each additional
                             30 or  60 gallons. That may be unit pricing in one sense, but it certainly doesn't
                             provide much of an incentive for people to source reduce. You can also use a fairly
                             simple model and then consider some scenarios that give you an idea of what your
                             rates should be. You don't have to have a massive rates  model; there are communi-
                             ties working fine with microcomputer spreadsheets.
                             Subscription Service Changes

How do you handle it when people want  to change their service?
               Austin, TX:
            Pasadena, CA:
Do not underest/mote how many people will select the smallest cart. Right off the
bat, we went $2,100 in the hole because of all the people who were going to do the
"right thing" and picked 30-gallon carts. In other words, be prepared for your pro-
gram to become successful. Secondly, when it comes to cart exchanges, the start-up
costs for this program are really high. You really need to talk to your politicians and
everyone and get it all in a nice spreadsheet and realize that you're going to bite the
bullet for the first three to six months of the program. We offer a free cart exchange
the first time, and then $15 subsequently. But we were estimating that a total of 15
percent ended up changing in Austin. Instead of doing any surveying up front on the
carts, we had to rely on the household size for estimates.

The thing that my staff keeps  coming back to me about is the administrative cost of
making changes. Our rule is, you can't change service levels more often than every
six months. Only every six months, however, even with 27,000 customers, means that
there's somebody changing every single day. We don't charge for changing service
right now, but I think that we must begin to charge for changes in order to create a
disincentive. Soon, if you want to change, it's going to cost  you $15 to $25 to make
that change.

                  Seattle, WA:   When you start unit pricing, determine if there are certain reports that you want to
                                 be able to generate from the billing system and make sure you get that capability inte-
                                 grated in your billing system right away. Later on, this type of modification can be
                                 just horrible and extremely expensive.

                Mansfield, CT:   Mansfield originally had a private system, with the haulers doing the billing. When
                                 we implemented our unit pricing program, the town took over billing. We find that
                                 one of the side benefits is that we can lien property. The haulers have liked the sys-
                                 tem very much because they know they are going to get paid every month. And that
                                 might be a way to sell it in a community that is also planning to take over the billing.

                  Seattle, WA:   That's a double-edged sword for us.  We do our combined billing with the city's water
                                 department and drainage and waste water utility. We  do have the lien  authority and
                                 essentially can turn off the water if somebody doesn't pay their bill. The problem is
                                 that we have to deal with a lot of complaints from their customers, and it doesn't al-
                                 ways lead to the best results for us in terms of a quality billing system.

                 Stole of WIN:   In some places in Minnesota, we are using a two-tiered (fixed plus variable fee)
                                 system that is separate from the garbage collection billing system. The government
                                 co//ects some  of the fixed costs to offset it.
                                 Cash  Flow
How did you  project your ca
               Mansfield, CT:   We collect quarterly and in advance. That solves a lot of the cash flow problems.

                  Seattle, WA:   If you're tight for cash, you need to know what's coming in and what's going out. It's
                                 very important to build in lags in your billing system. There's going to be some lag
                                 time in how people respond to unit pricing,  and that tends to work to your benefit.
                                 You need to be conservative about the rate at which people reduce their solid waste,
                                 particularly customers using the extra can, especially if you have high extra can rates.
                                 And, don't underestimate the portion of the construction and demolition debris in the
                                 waste  stream. Look really hard at wood waste.  Wood waste typically comes to your
                                 transfer stations in small loads. It can disappear real fast if you don't flow control it
                                 or know what's going on with it.

                                                                              APPENDIX  A
                  Enterprise  Funds
                                                                                  costs of
    Austin, TX:   It's never easy to raise rates, enterprise or not, but from a marketing point of view, if
                  we have a program that may be a little more sophisticated than what a council mem-
                  ber had thought about doing and if we can justify that we can pay for it, certainly it's
                  easier to get quality proposals for rate changes approved. I think that is the key: it
                  must be performance-based and used to justify budgets.

 Pasadena, CA:   It also can be used as a point of leverage, in the sense that we can say we are an en-
                  terprise. We are a business and we have to charge full costs for our operations.

   Seattle, WA:   I think it's easier to get analytical staff, because  there is a perception that if you've
                  got big capital programs and big resource acquisition programs, then it tends to be
                  easier to support getting people like that. The same is true with computer systems. It
                  tends to be easier to support those, which is real helpful.

Mansfield, CT:   Our municipal solid waste enterprise fund has grown, matured,  and is now supporting
                  other activities, such as litter control. The downside to this is that policy makers may
                  look to healthy off-line funds for support in the struggle to fund various other commu-
                  nity  programs.
                  Municipal Versus Private Haulers
Mansfield, CT:   I wouldn't say more cushion, but definitely more control over costs. We took over a
                  private system and added recycling collection and still kept the rates the same. Our
                  unit pricing program provided more service for the same price as the "free market"
                  system. Mansfield contracts with two private haulers to implement its system.

 Pasadena, CA:   You can't assume that there are a lot of cushions. In  Pasadena, we operate like a busi-
                  ness and must be competitive. Now, if your municipality owns a landfill, you can find
                  a little subsidy. But, if you do full cost accounting, then you know your true cost of op-
                  eration. Then if you decide you  need a cushion, that is part of the decision-making
                  process. Another thing is, don't underestimate the sophistication of the private
                  haulers. If you work very carefully with them, then you can learn a lot together. For
                  example,  I'm working with my  commercial haulers very closely, because we have
                  commercial recycling requirements. We're planning to adopt unit pricing in the com-
                  mercial sector for the same reason—to encourage waste reduction  and recycling. So
                  commercial haulers need some  help from us, but they also should be part of the proc-
                  ess of gathering and sharing information.

    State of IL:   One of the differences between municipal systems and private haulers is that with the
                  municipal system, you have a captive audience, and you can reach economies of
                  scale. This is especially important for some of the programs we've  talked about, such
                  as Austin, Pasadena, and Seattle:  all are larger population bases where a hauler can

                                reach economies of scale. This is not the situation, however, in the Midwest. In Minne-
                                sota, Wisconsin, and Illinois, outside of the metropolitan areas, the problem is that
                                you have much smaller communities of several hundred or a few thousand people.
                                Second, many of these communities use multiple private haulers. The goal of some
                                communities is to keep every hauler in business, even if it's only one guy with one truck.

                  State of PA:  A few months ago, I talked with a group representing waste haulers from Pennsylva-
                                nia. I wasn't sure what their attitudes would be toward unit pricing. It turns out they
                                actually like the idea, but their great fear was the uncertainty and risk from having a
                                straight price per bag (proportional) program. They were much more favorable  to-
                                ward the idea of having a two-tiered system (i.e., fixed rate plus a per bag fee)  that
                                would better allow them to recover their fixed costs.
                                Ways To Use Local Ordinances

   How can your local government, city council, or state legislature help?

               Pasadena, CA:  In order to protect business for waste haulers and recyclers, communities can
                                pass ordinances that require a franchise to do business. In this way, local govern-
                                ments can help create a level playing field. We designed an  ordinance that makes
                                haulers  buy franchises from the city. We put as much flexibility into the ordinance as
                                possible, but, at the same time, established some sort of guidelines. This assures that eve-
                                ryone's working under the same terms and conditions, whether it's one person,  one
                                truck hauler, or a bigger hauling firm.

                 Seattle, WA:  Another way to help smaller haulers is by stabilizing transfer station rates and dis-
                                posal rates for reasonably long periods of time. This approach uses authority from
                                state and local governments to insulate haulers from a lot of risk.

                 State of WIN:  If your goal is to encourage source reduction, you might have to employ mandates.
                                This is especially important when budgets are tight, since both composting and recy-
                                cling cost real money. As an example, in Minneapolis and St. Paul, they enacted ordi-
                                nances that require food establishments to have food packaging that is either
                                returnable, reusable, or recyclable—that's really a cutting edge area. Also, don't for-
                                get to amend your solid waste ordinance to allow for backyard composting and set up
                                some standards and advertise them to protect against rodents and odor.
                                 Methods of Enforcement
               Pasadena, CA:
I think the key here is not to associate illegal diversion with variable rates. There is
always going to be some amount of illegal dumping, especially in hard economic
times. So you have a multitude of factors that are contributing to what is generally
called illegal dumping. The key here is education and providing alternatives such as le-
gal diversions (for example, recycling and composting) and constructive source reduc-
tion actions.

                                                                              APPENDIX A
  Stole of ME:   Enforcement efforts can be made more cost-effective through publicity. It only takes
                  one enforcement instance along with a lot of big publicity to send a loud message to
                  people who might be thinking about illegally dumping. In Maine we had a very large
                  investigation on private haulers who were hauling to other municipal landfills with
                  lower fees. The investigation was blown up in the press, with nightly TV coverage. It
                  stopped a lot of the illegal dumping in other communities.

Mansfield, CT:   We have a part-time garbage enforcement agent who works a couple days a week on
                  enforcement and public education.

  State ofMN:   In all fairness,  I want to stress that it's not unit pricing per se that is driving illegal
                  dumping.  It is  also driven by growing restrictions on what you can put in the garbage
                  can. I believe restrictions may have more effect on illegal dumping than unit pricing.
                  What People Really Do With Their Trash
Mansfield, CT:  Again, I would like to underscore that in our experience, neighbors have not put their
                 garbage in the cans of other neighbors. We have had some calls—not many—from people
                 who swore that their neighbor had put additional recyclables in front of the caller's
                 bins. We investigated and found out it was the hauler who had put all the bins on one
                 side of the street so that he could make one stop.

   Austin, TX:   We did a study that measured what households would do with garbage that could
                 not fit in their subscription cans.  Extra trash had to be labeled with stickers that
                 were purchased for $2 each. We received 554 responses to our survey and got the
                 following results:

                 • 32 percent used the stickers and paid for their excess trash disposal.

                 • 29 percent never had excess garbage and never had to use stickers.

                 • 14 percent saved their  excess garbage until the next trash pickup.

                 • 11 percent stomped the extra garbage into  their carts.

                 • 5 percent threw their extra garbage  out at  a neighbor's or friend's.

                 • 3 percent threw the extra garbage away at work.

                 We also found that most excess garbage came from households that subscribed to
                 larger, 90-gallon carts. We knew that most 90-gallon carts were purchased by house-
                 holds with five members or less, so we decided that excess garbage  was not a prob-
                 lem created by large households that might not be able to reduce waste. Instead, we
                 think some families simply choose not to  respond to unit pricing—some families decide
                 that they would rather pay more for larger carts and extra disposal than recycle
                 or reduce waste.

                                 Yard Trimmings Programs

                   Stole of/L:   Yard trimmings systems (pay-by-the-bag) can easily be implemented as programs that
                                 are complementary to unit pricing. If the household properly manages its yard trim-
                                 mings by composting or keeping grass clippings on its lawns (grasscycling), it can
                                 avoid disposal costs without much effort. Second, a yard trimmings system costs al-
                                 most nothing for the community,  except relatively low infrastructure costs. And a yard
                                 trimmings system can reduce the total amount of residential waste by up to 30 per-
                                 cent, depending on where you live and how great a quantity of yard trimmings you
                                 have initially. I would say that if you had only one program to go along with unit pric-
                                 ing, it should focus on  yard trimmings.  Illinois instituted a ban on yard trimmings.
                                 Everyone thought we'd need a lot of new compost sites and thousands of bags to
                                 pick up yard trimmings. In fact, about 60 percent of all homes started grasscycling.
                                 Overnight,  households just stopped picking up grass clippings, and costs for picking it
                                 up plummeted.

                Knoxville, TN:   In our little city, we generate 20,000 tons of large brush and limbs every year, but we
                                 haven't budgeted for composting equipment. Any suggestions?

                   State of/L:   Instead of buying chippers, you can stockpile the brush  at the compost site. It doesn't
                                 smell so you can store it for a long period of time. Also, you can rent a big chipper or
                                 tub grinder several times a year and then use your mulch for landscaping.

                Pasadena, CA:   In Pasadena, 15 to 20 percent of the population has signed up for separate collection
                                 of yard trimmings. They put out an average of 50 pounds per household per year. If I
                                 could increase my participation in this program to 30 percent and everybody put out
                                 50 pounds, then that's  a big savings on landfill tipping fees. In addition, yard trim-
                                 mings are dense compared with plastic,  which is light relative to its volume. If your ul-
                                 timate goal is to keep tonnage out of the landfill, then,  dollar for dollar, you have a
                                 lot bigger bang for the buck with  a yard trimmings program.

                  State of PA:   In Pennsylvania, many municipalities use their bag system to collect yard trimmings,
                                 too.  In Carlisle, residents put the leaves  in plastic bags and the  hauler dumps them
                                 out of the bags.  Then the hauler  actually puts the bags  back on the curb so that peo-
                                 ple can reuse the bags. And, in Allentown, they use paper bags  that break down in
                                 the composting process. Some communities use a vacuum system.  It varies from
                                 place to place,  but plastic bags are pretty widely accepted in Pennsylvania.

                   Austin, TX:   Our yard trimmings do  not get burned or go into a landfill. We mix them with our sew-
                                 age sludge and create  a  product called "Dillo Dirt" (short for Armadillo). We bag

                                                                                          APPENDIX A
                             it and sell it at nurseries or use it for our city parks. The Dillo Dirt program is very
                             popular.  People like to know that their grass will be used to deflect program costs.
                             It's not a big money maker, but it does do a little better than break even.

              Seattle, WA:  I'm surprised that people are talking about leaving their yard trimmings on their
                             lawns, because in Seattle that's not a real common phenomenon. Households either
                             compost  or use curbside collection. We distribute free compost bins, which could be
                             one reason; another could be differences in climate.
                              Recycling Programs
\A/U-iĄ- il->^ii4- -i

             Pasadena, CA:  If you don't have curbside recycling in place, you might look at other alternatives. It
                             is extremely expensive to put in curbside recycling.

            Mansfield, CT:  Well, we found a big increase in recycling participation when we went from drop-off
                             recycling to curbside pickup, so I don't think our unit pricing program would work as
                             well without curbside pickup of recyclables.

              Seattle, WA:  I think that on the issue of cost of services, you need to know, as best you can, what
                             services customers are willing to pay for. Then, if you provide a broad enough range
                             of services at different prices and levels of convenience, you can best serve the major-
                             ity of people's needs. I think people are willing to pay  for convenience, and don't un-
                             derestimate  that.
                             Also, Seattle has risk-sharing clauses built in to its recycling contract where the
                             haulers either receive an extra payment or pay us a credit, depending on whether
                             the economy indices and market prices  are good or bad. That actually increased our
                             financial exposure beyond what we like, but we felt that it was the appropriate thing
                             to do, given the state of markets right now.

                State ofIL:  For some very rural communities it is prohibitively expensive to do curbside collection
                             once a week. In central Illinois, communities have curbside collection of recyclables
                             once a month, and they found that it's actually working quite well. When they went
                             to unit pricing, they just offered refuse bag collection once a week and recyclables
                             collection once a month.
                              Household  Hazardous Waste Programs
             irograms work with a unit pricing program?

              Durham, NC:   You may be able to share expenses with other city agencies. In addition to our yard
                              trimmings, curbside recycling, and bulky item pickup programs, we have a household
                              hazardous waste program. The payment for this came from our wastewater treat-
                              ment department, not from our landfill tipping fee. The waste staff are just as con-
                              cerned about hazardous waste going into the  wastewater system as we are about it
                              going into the landfill.  We may have to change that in the future and split it, rather

                                than let them pay the whole bill. But it was a cushion for some time. We are also
                                working on a permanent collection system on a regional basis. We hope to get a four-
                                county region together and see if we can get a price break. We would set up perma-
                                nent sites and negotiate with a contractor, saying, "We're going to give you a million
                                people's worth of household hazardous waste. Can you give us a better price than
                                dealing with one county, or one city"?  Then we can reduce our costs and provide
                                more frequent service to more people.
                                Keeping the Message Simple
                  Austin, TX:   Through mass media we talk about complementary programs such as recycling and
                                our D///O Dirt program. But for unit pricing, and specifically how to participate in
                                "Pay-As-You-Throw," we targeted our audiences more directly by using direct mail, a
                                newsletter, and doorhangers. In these, we explained how to set out your wheeled
                                cart, where it should face, and how to share with a  neighbor (i.e., go ahead and pull
                                two carts together on a neighbor boundary at the yard so that it's fewer stops for the
                                collector). So, we steer topical information to specifically reach the affected audi-
                                ence. We choose to use easy terms to promote the program. It's important to keep
                                messages simple and clear.
                                Older Households
   How do you cater to the needs of senior citizens?
               Pasadena, CA:
Our older population began to have some concerns about their ability to actually
move their trash and pay for their trash. What we came up with seems to be working
well. We sent a note that said, "If you are over 62 years of age or if you are disabled,
call for special rates." Almost 10 percent of our population has called and about 5
percent are on the special rates right now. The special rate for senior citizens is a 10-
percent discount. They can choose any service option they want, because we found
that their needs  varied.
                Durham, NC:   What about the people who don't have driver's licenses, or are temporarily disabled;
                                they broke their leg and it will be six months before they are mobile again?  And,
                                also, do you go back and  check to see if the older person has died or if a young per-
                                son is now living there and getting this service?

               Pasadena, CA:   First, if they don't have a driver's license, we ask for some kind of ID card or birth
                                certificate. People send all kinds of things; they're very good about wanting to show
                                you that they qualify. Secondly, our eligibility criteria say that if there is a younger
                                person in the home that can roll the trash for the disabled, then that household does

                                                                             APPENDIX A
                 not qualify. You have to be disabled, and you can't have a caregiver who is able to do
                 this. A lot is based on trust, although we do expect that we will do some followup, de-
                 pending upon how many people subscribe to the service. As far as people with tempo-
                 rary needs, our basic message is if your need is less than six months, the administrative
                 costs of making that change are greater than the actual discount that we could pro-
                 vide.  But we do make exceptions on a one-to-one basis. Our customer service reps do
                 a tremendous amount of talking, asking a lot of questions and dissuading people. The
                 idea behind their asking questions is as  much to help as to provide disincentives to
                 taking advantage of the system. So we try to do it in a very courteous, polite way. Af-
                 ter a  while, most people get tired of answering the questions, but if they can answer
                 all the questions then we do try to help  them.
Pasadena, CA:
For 27,000 residences, we have three people. One person answers the phones out
front and dispatches on the radio for very basic questions. For more detailed ques-
tions, I have two more individuals who can respond. But, if the question is very difficult,
it goes up to another level.
                 Low-Income  Households
  Seattle, WA:   We don't have any family rates, but we do have a low-income rate. This summer we
                 qualified low-income, elderly, and handicapped customers for rate assistance. We
                 include all households who  are under the federal poverty line.

Pasadena, CA:   I would concur that if you're looking for standards, try to find something that is an es-
                 tablished standard—not something that you create for your city. That's where we had
                 problems because Pasadena is a more expensive place to live than other places in the
                 nation. It's difficult to defend a low-income standard if it's not already established.
                 Large Households
          SRC:   That is a very common question at conferences. I guess to me, that's an education is-
                 sue. People who have larger homes pay more for electricity. People who have more
                 people in the house pay more for water and more at the grocery store. The question
                 is not so much aren't we going to be hurting these families but rather should small
                 families continue to subsidize these large families? I think that you need to turn the
                 question around.

                                 Inner Cities
   What about our inner cities?
                 Seattle, WA:  Monthly reports in Seattle show that illegal dumping is more concentrated in certain
                                areas than others, and it tends to be in lower income areas of the city.

               Mansfield, CT:  Our toughest enforcement problems are in multi-family housing because of the tran-
                                sient population and difficulty in communicating with individual tenants, as opposed
                                to single-family residents.

               Pasadena, CA:  Pay special attention to any area of more transitory populations. They are going to
                                have special needs and special demands. We may need more frequent neighborhood
                                cleanups there.

                 Seattle, WA:  Also, it is effective to use community groups, and to provide grants to community
                                councils. Often, they can do it for less money, and there is a lot of community pride
                                in dealing with the problem. City government is not great at doing it, but community
                                groups can do it.
                                 Multi-Family Units
                 Seattle, WA:
               Pasadena, CA:
We've had a broad range of problems providing unit pricing to residents of multi-fam-
ily housing. These include contract relations, design, enforcement, and deciding
whether the city or haulers will serve these units. Also, if you're going to do unit pric-
ing in a big city with lots of multi-family housing, you have to have a reliable billing sys-
tem that the customer service reps can use. We've got 9 inspectors and 22 customer
service representatives, so we've got a big staff. But we have 300,000 collections a
week, so even 1 percent of that turning up as phone calls  can be a problem. We get
about 650 calls a day from customers, and we can deal with that.

I have a problem with landlords who call me when their units are empty.  They say,
"I'm not using the unit because I'm remodeling it right now, so I shouldn't have to
pay for trash." But I still have to have the same operation; I still have to pass by the
unit. So, when you set up a unit pricing program, be sure to educate your landlords
about this.

                                        APPENDIX B
Putting  the  Blocks Together:

Additional   Examples

    n Part III of this guide, a six-step process for assembling a unit
    pricing program entitled "Putting the Blocks Together" was
    introduced. The six steps demonstrated how to combine
    projections of cost, demand, and service levels in order to
arrive at a tentative rate structure for a unit pricing program. The six
steps provided a general introduction to the process of designing a
rate structure but did not demonstrate how to accommodate the
specific needs of your community when designing a unit pricing
This appendix consists of three examples to assist decision-makers in
tailoring their programs to the specific waste management goals and
needs of their communities. Each of the three examples outlines a
community goal and the modifications to the design and assembly
process considered necessary to meet that goal. The three examples

    • A community that wants  to keep revenues higher than costs as
     it moves from a traditional waste collection program to a unit
     pricing program (the transition period.

    • A community that wants  to provide complementary solid waste
     services such as a recycling collection program.

    • A community that decides to accommodate citizens with
     special needs within its unit pricing program.
                                             APPENDICES         79

                                Designing a rate structure that meets the particular goals and
                             concerns of your community is important. Use the three examples to get
                             a sense of how to customize the six-step process to better meet the
                             demands of your community.

                               • Step 1: Demand. Estimate total amount of waste generated in
                                 the "steady-state."
                               • Step 2: Services. Determine the components of your unit
                                 pricing program.
                               • Step 3: Costs. Estimate the costs of your unit pricing program.
                               • Step 4: Rates. Develop a tentative unit pricing rate structure.
                               • Step 5: Revenues. Calculate the revenues from unit pricing.
                               • Step 6: Balance. Evaluate and adjust your preliminary unit
                                 pricing program.
                                During the transition from a traditional waste management program
                             to a unit pricing program, households gradually adjust their habits to the
                             new opportunities and costs introduced by unit pricing. The demand for
                             services from local municipal solid waste agencies might settle to new,
                             lower levels during this time. The result can sometimes be a drop in
                             revenues for the local agency. Many communities introducing unit
                             pricing need to know that revenue shortfalls, however, will not be
                             excessive  during the  transition period, nor in the subsequent steady-state.

                                If a community requires the revenue from its unit pricing rates to
                             cover costs during both the transition period and the steady-state period,
                             it needs to focus on Steps 1 and 3 of "Putting the Blocks Together."
                             During Step 1, the community needs to produce a detailed and accurate
                             estimate of the degree to which households will reduce solid waste
                             generation to better anticipate changes in revenues that will result from
                             the unit pricing program. To acquire reliable estimates for this step, the
                             community can draw on the experience of other communities that have
                             introduced similar complementary programs, public education efforts,
                             container  options, and special services.

                                A detailed estimate from Step 1 will also help the community
                             accurately anticipate the rate at which costs will settle downward. In
                             Step 3, the community needs to look at how a reduction in waste volume
                             will  lower costs, such as transportation and tipping fees. Unit pricing
                             planners then need to test tentative rate structures to find the correct
                             balance between decreasing revenues and decreasing costs and to keep
                             the local solid waste  agency's revenues in line with costs during each
                             quarter of the transition period, as well as the subsequent steady-state.

                                                                                 APPENDIX B
   Communities that have a clear mandate for waste management can
sometimes pursue a program that combines source reduction and
recycling. For example, the citizens of a community might demand a
combined program of unit pricing and curbside pickup of recyclables. To
develop a rate structure that would accommodate a complementary
curbside recycling program, the community would need to accurately
identify all of its waste management costs and carefully weigh all of its
revenue-raising options to determine if such a program was feasible.

   In Step 3 of "Putting the Blocks Together," the community can
explore the potential for combining equipment, crews, billing, and
routes for both trash collection and recycling pickup. Careful scheduling
or innovative use of equipment could significantly reduce costs. The
community should also use this step to examine the financial trade-offs
of the two programs; for example, a recycling pickup program could
lower the total amount of waste being landfilled or combusted, reducing
the community's tipping  fees to help cover the costs of providing
recycling collection.

   In Step 4, the community is presented with a variety of pricing
options.  These should be examined in light of your  overall goals for unit
pricing. For example, if one of your primary goals is to significantly reduce
household waste generation, you can consider charging for all collection
services.  Setting substantial per-bag charges for both trash and recyclables
will encourage households to reduce waste. If, however, recycling is
provided for free, citizens would have less incentive to reduce the
amounts of recyclables it generates and the municipal solid waste stream
(trash plus recyclables) could actually rise in volume,  driving collection
costs up.  Another pricing option consists of setting  the per-bag charge
for trash higher than the per-bag charge for recyclables. This rate
structure encourages households to separate recyclables from other trash,
thereby reducing the portion of their household waste that the
community sends to the landfill.

   These examples show how important it is to treat unit pricing rates as
part of a  comprehensive pricing system that takes into account all  solid
waste services. Charging  citizens for both recycling and waste removal
adds complexity and cost to providing municipal solid waste services.
The alternative, however, a unit pricing rate structure that does not
integrate waste collection charges with those for curbside recycling, can
prove expensive, inequitable, and ineffective at achieving the
community's  goals.

                                A community that wishes to assist low-income households that might
                             have trouble paying for unit pricing needs to make several adjustments
                             to the basic model to develop a rate structure that meets its goals.

                                In Step 1, the community must first determine how to qualify
                             households for lower collection charges. To make this decision, the
                             community should collect information on the number of low-income
                             households that  could qualify for lower charges. The community can use
                             these numbers to adjust revenue  estimates and finally arrive at a rate
                             structure that provides sufficient revenue. Rates should be set to provide
                             an incentive for  source reduction in both low- and high-income
                             households. However, the community might anticipate that lower rates
                             for low-income households will provide less incentive to use source
                             reduction. If this is the case, estimates of the drop in demand for waste
                             collection services should be revised to meet the effect of the low-income

                                In Step 3, the community needs to examine the potentially greater
                             costs of introducing a low-income rate.  Such a rate not only will
                             decrease anticipated revenues but also require additional administrative
                             costs to identify  and separately bill low-income households.
                             Administrative costs can be kept down if an established income  cutoff is
                             used or other local agencies have already identified the low-income
                             households in the community. Rent assistance or income assistance
                             programs might have already identified the  low-income households in a

                                                   APPENDIX  C
Bulky waste items - Large items of refuse including, but not limited to, appliances, furniture,
large auto parts, nonhazardous construction and demolition materials, and trees that cannot be
handled by normal solid waste processing, collection, and disposal methods.

Commercial sector- Includes schools, hospitals, retail establishments, hotels, and

Compost - Discarded organic material that has been processed into a soil-like material used as
a soil amendment or mulch.

Construction and demolition (C&D) debris - Includes concrete, asphalt, tree stumps and
other wood wastes, metal, and bricks. (C&D debris is excluded from the definition of municipal
solid waste used by EPA and the National Recycling Coalition.)

Disposal - Landfilling or combusting waste instead of recycling or composting it.

Diversion rate - A measure of the amount of waste material being diverted for recycling/com-
posting compared with the total amount that was previously thrown away.

Enterprise fund - An independent budget dedicated for a special purpose or activity, such as
a local municipal solid waste program. The  local agency becomes reliant on the  revenue it raises
through unit pricing or tipping fees and does not receive financial support from the general fund
of the local government.

Flow control - A legal or economic means by which waste is directed to particular destina-
tions (for example, an ordinance requiring that certain wastes  be sent to a particular landfill facil-

Full cost accounting - The total accounting of all costs and  revenues involved in municipal
solid waste management, allowing for a standard treatment of the capital costs, future obliga-
tions, and indirect costs.

Household hazardous waste - Products containing hazardous substances that are used and
disposed of by individuals, not industrial consumers. These products include,  but are not limited
to, certain kinds of paints, solvents, batteries, and pesticides.

Integrated waste management - The complementary use of a variety of practices to han-
dle municipal solid waste safely and effectively. Integrated waste management techniques include
source reduction, recycling (including composting), combustion, and landfilling.
                                                          APPENDICES             83

                 Landfilling - The disposal of solid waste at engineered facilities in a series of compacted layers
                 on land that is covered with soil daily. Fill areas are carefully prepared to prevent nuisances or
                 public health  hazards, and clay and/or synthetic liners are used to prevent releases to ground

                 Municipal solid waste (MSW) - Waste generated in households, commercial estab-
                 lishments, institutions, and businesses. MSW includes used paper, discarded cans and  bottles,
                 food scraps, yard trimmings, and other items. Industrial process wastes, agricultural wastes, min-
                 ing wastes, and sewage sludge are  not MSW.

                 Participation rate - The portion of households that take  part in a given program. Often
                 refers to households actively participating in a curbside collection program for recyclable

                 Recyclables - Products or materials that can be collected, separated, and processed to be used
                 as raw materials in the manufacture of new products. The recyclable option should be available
                 to the majority of residents through curbside recycling programs or fixed recycling centers.

                 Recycled content - The portion of a package's weight (excluding coatings, ink, labels, stick-
                 ers, adhesives, or closures) that is composed of postconsumer recycled material.

                 Residential waste - Waste from single-family and multi-family residences and their yards.

                 Source reduction (Waste prevention) - The design, manufacture, purchase, or use of ma-
                 terials to reduce the amount and/or toxicity of waste. Source reduction techniques include reus-
                 ing items, minimizing the use of products that contain hazardous compounds, using only what
                 is needed, extending the useful life of a product, and reducing unneeded packaging.

                 Tipping fees - The fees, usually dollars per ton,  charged to haulers for delivering materials
                 at recovery or disposal facilities.

                 Waste generated - Sum of waste recovered  and waste disposed of.

                 Waste stream - A term describing the total flow of solid waste from homes, businesses, insti-
                 tutions, and manufacturing plants that must be recycled, burned, or disposed of in landfills; or
                 any segment thereof, such as the "residential or recyclable"  waste stream.

                 Yard trimmings - The component of solid waste composed of grass clippings, leaves,
                 twigs, branches, and garden refuse.

                                                   APPENDIX  D
Blume, D. R.  1992.  Under what conditions should cities adopt volume-based pricing for residen-
tial waste collection. Washington, DC: U.S. EPA Office of Management and Budget.

California Integrated Waste Management Board. 1991. Disposal cost fee study: final report.
Boston, MA: Tellus Institute.

Goddard, H. C. 1990. Integrating solid waste management: incentives for reduced waste, in-
creased recycling, and extension of landfill life. Proceedings from the First U.S. Conference
of MSW Management: Solutions for  the '90s. Washington, DC.

Howard, S. 1988. Financing integrated solid waste management systems. Paper presented at
the Seventh Annual Resource Recovery Conference. Washington, DC: Shearson Lehman Hut-
ton, Inc.

Hsieh, H-N. (No date.) Cost analysis of landfill and its alternatives. Unpublished paper. New-
ark, NJ: New Jersey Institute of Technology.

Jacalone, D. P. 1992. Per unit pricing: an overview of operational issues. Paper presented at
EPA's Second U.S. Conference on MSW Management: Moving Ahead. Washington, DC.

League of California Cities. 1992. Financing strategies for integrated waste management pro-
grams: answers for communities. Sacramento, CA: League of California Cities.

Repetto, R., et al. 1992. Green fees:  how a tax shift can work for the environment and the
economy. Washington, DC: World Resources Institute.

U.S. Environmental Protection Agency. 1989. Discussion and summary of economic incen-
tives to promote recycling and source reduction. Washington, DC: U.S. EPA Office of Policy
U.S. Environmental Protection Agency. 1990. Charging households for waste collection and
disposal: the effects of weight or volume-based pricing on solid waste management. NTIS
PB91-111484. Washington, DC: U.S. EPA Office of Solid Waste and Emergency Response.

U.S. Environmental Protection Agency. (No date.) Methods of predicting solid waste charac-
teristics. Stock no. 5502-0048. Washington, DC: U.S. Government Printing Office.

U.S. Environmental Protection Agency. 1990. Variable rates in solid waste: handbook for solid
waste officials, Volume 1: Executive summary.  EPA530-SW-90-084A. Washington, DC: U.S. EPA
Office of Solid Waste and Emergency  Response.
                                                         APPENDICES            85