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Office or Solid Wasie
Emergency Response
(5305)
EPA530-R-94-004
April 1934
Pay-As-You-Throw
Lessons Learned About
Unit Pricing
•'eanola mk an
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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
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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.
ii
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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
MI
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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
IV
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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.
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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
program.
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.
VI
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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:
TRADEOFFS
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.
EDUCATION
HIERARCHY
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.
vii
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Is Unit Pricing Right for Your
Community?
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?
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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
more.
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.
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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
D
IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?
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EDUCATION
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
D
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
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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.]
EDUCATION
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.
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IS UNIT PRICING RIGHT FOR YOUR COMMUNITY?
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El
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.
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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?
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Points to
remember
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
circumstances.
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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?
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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.
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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
II
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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
management.
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
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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.
frl
EDUCATION
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sits in
BUILDING CONSENSUS AND PLANNING FOR UNIT PRICING
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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.
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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
-------
& answers
wny no we need to sperm so inucn time tni iKing aoout
/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.
lot
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.
16
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Points to
remember
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
implementation.
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
program.
I••lil
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
17
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Case Studies
Three Cities Report on Illegal Dumping
In Ma
crease
ing, M
l Hiimnincr HiH not in-
ie police d>
lent
crease in illegal dumping. In fact
the city are associated with rem
ts in
?bris-
reqi
The city of I
the city's lar
than was inc
lers or
of.
reports similar findings. A survey done at
dena
individual ha
use licensed
re those ap|
to take const
ting with small
ding permit to
to the landfill.
18
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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.
DESIGNING AN INTEGRATED UNIT PRICING PROGRAM
19
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PART III
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.
20
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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
ted.
onboard computer
DESIGNING AN INTEGRATED UNIT PRICING PROGRAM
21
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PART III
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
options:
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
22
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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.
yWUMlTHU'u
SERVICE J?
.!•*• \
Large, clearly
eliminate confi
speed curbs
collection.
DESIGNING AN INTEGRATED UNIT PRICING PROGRAM
23
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PART III
El
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
below.
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.
24
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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
Two-tiered
Multi-tiered
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
25
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PART III
D
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
26
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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
E
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
27
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PART III
m
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).
D
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
28
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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
29
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PART III
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.
30
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PART III
Advantages
Disadvantages
CO
E
0)
to
03
u
Revenues are fairly stable and easy to
forecast.
Unlike bags, cans often work well with
semiautomated or automated
collection equipment (if cans are
chosen that are compatible with this
equipment).
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.
Communities
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
31
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PART III
Advantages
Disadvantages
Communities
Using This System
CO
E
to
(X)
03
CD
Residents find bag systems easy to
understand.
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
needed.
Bag systems have lower distribution,
storage, and inventory costs than can
systems when bags are sold at local
retail establishments and municipal
offices.
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
committed.
Residents might view a requirement
to buy and store bags as an
inconvenience.
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
32
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PART III
Advantages
Disadvantages
Communities
Using This System
CO
E
0)
to
u
CO
O
tw
03
Tag and sticker systems are easier and
less expensive to implement than can
systems.
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
needed.
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
bags.
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
committed.
Residents might view a requirement
to buy and store stickers or tags as an
inconvenience.
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
33
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PART III
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
mind:
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.
34
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PUTTING THE BLOCKS TOGETHER
PART III
1
Demand:
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.
TRADITIONAL
SYSTEM
Planning
Transition Period
Implementation
STEADY-STATE
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
35
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PART III
STEP
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
Services:
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.
36
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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.
3
Costs:
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.)
4
Rates:
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
37
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PART III
5
STEP
6
STEP
Revenues:
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.
Balance:
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.
-------
PUTTING THE BLOCKS TOGETHER
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
-------
PART III
Costs
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.
Revenues
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.
Balance
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.
40
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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.
vr
A Tn
DESIGNING AN INTEGRATED UNIT PRICING PROGRAM
41
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RMTIII
Points to
remember
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.
42
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PART III
Case Studies
Establishing a Rate Structure
A View From Seattle
:ion
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.
ronmental
>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
syget
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
43
-------
RMTIII
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
COV(
tions
the
InS
ham
nore consistent with pr needs.
semi-aut<
>ased system. The
ie, was tested over
scanner on 1
lator-si:
and
cycl.
The wei
mber were re<
o a personal c
and
ited
hand-du
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.
44
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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.
IMPLEMENTING AND MONITORING UNIT PRICING
45
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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
:gram,
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.
EDUCATION
IMPLEMENTING AND MONITORING UNIT PRICING
47
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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
program.
• The schedule for collections.
• The means by which fees will be collected.
• The methods or outlets for purchasing cans, bags, tags, or
stickers.
• 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
program.
• 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
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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
50
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the functions and related skills required of your new administrative
office, you should then begin to reorganize the office to meet these
responsibilities.
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
51
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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
tasks.
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:
52
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• 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
circu,
IMPLEMENTING AND MONITORING UNIT PRICING
53
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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.
54
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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
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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
56
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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
Ordinances
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
procedures
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
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vr
*A To
OUgl
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.
58
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Points to
remember
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.
IMPLEMENTING AND MONITORING UNIT PRICING
59
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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
use
•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
60
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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
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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
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APPENDIX A
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
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APPENDIX A
revenue, then no matter ho wfarwaste collection costs drop, they see unitpricing as
anaddedcost.
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
APPENDICES
65
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APPENDIX A
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
66
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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
APPENDICES
67
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APPENDIX A
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.
Stickers
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.
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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
ballpark.
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
equitable.
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.
APPENDICES
69
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APPENDIX A
Billing
w
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
e?
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.
70
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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
APPENDICES
71
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APPENDIX A
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.
72
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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
:to
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.
APPENDICES
73
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APPENDIX A
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
74
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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
APPENDICES
75
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APPENDIX A
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
nit
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
76
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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.
APPENDICES
77
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APPENDIX A
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.
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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
program.
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
are:
• 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
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APPENDIX B
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.
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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.
APPENDICES
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APPENDIX B
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
rate.
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
community.
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APPENDIX C
Definitions
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
restaurants.
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-
ity).
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
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APPENDIX C
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
water.
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
materials.
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.
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APPENDIX D
Bibliography
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APPENDICES 85
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