Local Government Guide
to the Establishment of
Solid Waste Special Assessments
Produced for the
Conference of Southern County
Associations
By
Roy F. Weston, Inc.
Nabors, Giblin & Nickerson, P.A.
Carl Vinson Institute of Government
The University of Georgia
October 1995
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£?A ^oV/B^T/o
LOCAL GOVERNMENT GUIDE TO
THE ESTABLISHMENT OF
SOLID WASTE SPECIAL ASSESSMENTS
LIBRARY
US EPA Region 4
Atlanta Federal Center
100 Alabama St., SW
Atlanta, GA 30303-3104
OCTOBER 1995
This document was produced for the Conference of Southern County Associations (CSCA) under a grant from the
U.S. Environmental Protection Agency. Additional financial contribution has been provided to CSCA by Bedminster
Bioconversion Corporation. Technical assistance was provided by Roy F. Weston, Inc., Dr. James E. Kundell, and
Nabors, Giblin & Nickerson, P. A. The State Associations participating in the Regional Solid Waste/Environmental
network include: Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia and West Virginia.
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TABLE OF CONTENTS
Section Title Page
1 INTRODUCTION 1-1
2 OVERVIEW OF SPECIAL ASSESSMENTS 2-1
3 LEGAL FOUNDATION FOR SPECIAL ASSESSMENTS 3-1
4 UNDERSTANDING THE COST OF SOLID WASTE
MANAGEMENT 4-1
5 CALCULATING THE SPECIAL ASSESSMENT 5-1
6 SPECIAL ASSESSMENT BILLING AND COLLECTION
STRATEGIES 6-1
7 SPECIAL ASSESSMENT EXAMPLE 7-1
8 SPECIAL ASSESSMENT CASE STUDY
PALM BEACH COUNTY, FLORIDA 8-1
iii
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TABLE OF CONTENTS (Continued)
LIST OF TABLES
Table No. Title Page
4-1 MSW Management Responsibilities and Types of Costs Incurred 4-3
4-2 Costs and Revenue Categories 4-4
7-1 Total Program Costs 7-3
7-2 Total Cost Basis of Solid Waste Management System with
Special Assessment Program Costs 7-4
7-3 Residential Waste Generation 7-5
7-4 Special Assessment for Restaurants 7-5
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SECTION 1
INTRODUCTION
In view of the May 16, 1994 United States
Supreme Court ruling fC&A Carbone vs. governments cad no linger
Town of Clarks.nwn. New YnAV local control to direct solid
government solid waste managers are being management
forced to reassess the manner by which solid a 1 es*
waste management services are funded. Prior
to the Supreme Court ruling, many local
governments relied on flow control, or designation measures to direct solid waste to specific
solid waste management facilities at which a tipping fee was charged which covered all or
part of the costs of the solid waste management system. By controlling the flow of the solid
waste, the local governments were assured a source of revenue for the system. These local
governments may no longer be able to rely on flow control to direct solid waste to designated
facilities. Consequently, they may no longer be able to rely on tipping fees charged at the
designated solid waste management facilities to fully cover the costs of the solid waste
management system. This dilemma has resulted in a review and analysis of alternative
funding mechanisms that can be implemented by local governments to fund solid waste
management services.
The objective of this Guide is to provide information on one of the funding mechanisms
available to local governments — special assessments. This guide is the second in a series
of two. The first guide examined the legal foundation for local governments to institute
special assessments. This guide is directed toward local governments as a tool to assist in
the establishment of special assessments to fund solid waste management services. The
Guide is divided into several sections, each of which addresses specific issues related to the
establishment of special assessments.
In the Guide, information on special assessments is presented in a number of ways — a series
of questions and answers, a detailed hypothetical example, and a case study. These are
intended to present the relevant issues on special assessments in a way that meets the needs
of someone with a limited familiarity of special assessments, while still providing sufficient
details to offer insight to those who are familiar with special assessments and are looking for
additional information.
are the available options for funding solid waste management services?
There are several methods available to local governments for funding solid waste
management services. These include:
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Ad valorem and other
taxes
There are several methods available to
local governments for funding solid waste
management services:
Revenues raised
through ad valorem
(property) or special
purpose taxes can be
~ Ad valorem and other taxes
~ User fees
~ Special assessments
used to fund solid
waste management
services with little or no limitations. However, in some states, local
governments have statutory limits on the amount of ad valorem taxes, the
amount those taxes can be increased annually, or the millage rate used to
determine the ad valorem taxes. Consequently, adding the cost of solid
waste management services to those costs already funded by ad valorem
taxes may require reductions in other services provided by the local
governments. Similarly, special purpose taxes may have limitations such
as duration which impact their usefulness. Even without statutory limits,
funding solid waste management services through ad valorem taxes may be
politically impractical or impact the local government's ability to clearly
define and articulate the full cost of solid waste management services.
• User fees
The basic premise behind a user fee is that the waste generator is charged
a fee for the use of the system. For a user fee mechanism to be effective,
the fees must be competitive with, or cheaper than, alternative management
options available to the solid waste generators (or collector) so that the
generators continue to use the system. User fees are typically charged at
the point where the generator interacts with the solid waste management
system (i.e., through a collection fee, tipping fee, etc.).
• Special assessments
Special assessments have been implemented in a number of states, most
notably in the South in Florida. This guide focuses on the use of special
assessments for funding solid waste management services. The description
of special assessments provided relies heavily on the manner in which they
have been applied in Florida. The application of special assessments in
other states will be a function of the enabling legislation in those states.
Other funding sources exist (license fees, franchise fees, etc.) but are generally not
sufficient to fund all of the costs associated with providing solid waste management
services.
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SECTION 2
OVERVIEW OF SPECIAL ASSESSMENTS
The purpose of this section of the Guide is to provide local governments with basic
information on special assessments. The definition of a special assessment is discussed,
including the distinction between a tax and a special assessment and the "special" benefit
aspects of a special assessment. Special assessments may be applied to a variety of public
services, and consequently, the discussion is not specific only to solid waste management
services. Where relevant, references to solid waste management services have been
included.
What is a special assessment?
A special assessment is a charge
A Special assessment Is a charge assessed on assessed on real property because
real property that derives a special benefit. that property, or the owner of the
property, derives a special benefit
from the expenditure of money by
the local government. For example, a property owner is assessed a fee to cover the cost
of solid waste management services provided by a local government.
What is the difference between a tax and a special assessment?
A specific or special assessment must provide a special benefit to the property assessed.
Taxes may be levied for the general benefit of the residents and the property.
Consequently, before a special assessment can be established it is necessary to clearly
identify the specific benefit that is provided.
What are the important elements in implementing a special assessment?
Implementing a special assessment involves four steps:
1) defining the special benefit received by the property owners,
2) determining the cost of the service or improvement,
3) allocating the costs, and
4) collecting the special assessment.
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What constitutes a special benefit?
The special benefit that is available to specific property owners may be government
services or improvements that potentially or actually increase the market value of the
property or enhance the use and enjoyment of the property.
The special benefit must be specific to the
property assessed and not a general benefit to the ^ special benefit must fee
entire community. As solid waste is generated on specific to the property
most if not all improved properties, the benefit assessed*
received is specific to the individual property 111^^
owners.
What costs can be recovered?
Costs that can be recovered for a specific service or improvement include all the costs
incurred by the local government for providing the service or improvement including the
cost of billing and collecting the special assessment.
How are the costs of providing the services or improvements allocated to the
property owners?
xhe specific method for allocating costs
Costs must fee allocated to the will depend on the type of service or
benefitted property owners In a fair improvement. The basic rule is that the
aild reasonable maimer* costs must be allocated to the benefited
property owners in a fair and reasonable
manner. The amount of assessment for
each property must be in proportion to the benefits received as compared to other
properties. This means that:
• exemptions from the special assessment must be limited and must be for a
specific purpose; and
• assessment payers should not be paying for the benefit received by others.
When dealing with solid waste management services, the benefits received are not related
to the value of the property. Therefore, the use of individual property values to determine
the special assessment for each property would not be considered a fair and reasonable
allocation method. The cost of providing solid waste management services is typically
allocated by the type of waste stream for which the service is provided.
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How is a special assessment collected?
Billing and collection of the special assessments can be done as part of:
• the ad valorem tax bill
• a separate assessment bill
• a utility bill
The objective is to establish a collection method that is efficient and cost-effective and
results in the collection of the special assessment with a minimum of non-payment. The
implications of non-payment of the special assessment can include the issuance of a lien
on the property or the forced sale of the property.
How are special assessments applied to solid waste management services?
A number of issues need to be covered in order to apply the concept of special assessments
to the recovery of solid waste management costs. These issues include:
• defining the benefits received from the local government providing solid
waste management services;
• understanding the costs of the solid waste management services; and
• developing a fair and reasonable cost allocation methodology.
1. Defining the special benefit.
For solid waste management, the special benefit can include the collection,
processing, and disposal of recyclables and solid waste. These services must be
available to all property owners that are assessed, though these services do not
necessarily have to be used by all assessed property owners.
2. Understanding the costs to be recovered.
The costs that can be recovered through special assessments include the full cost
of providing solid waste management services. These costs can include:
• direct labor and expenses
• indirect labor and expenses
• capital costs
• assessment program costs
The costs recovered must be those that are expended by the local government as
part of providing solid waste management services. The allocation of indirect costs
must follow generally accepted accounting practices.
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3.
Developing a cost allocation methodology.
Cost Allocation by Waste Streams — The cost of providing solid waste
management services is typically allocated by specific waste streams. The costs
can be allocated based on broad categories of solid waste such as that generated
from residential, commercial, and industrial properties. These waste streams
typically differ in composition, the management methods used, and the responsible
parties. As an example, residential waste collection, processing, and disposal may
be the sole responsibility of local government while the management of solid waste
generated by commercial businesses may be the responsibility of the generators
who contract with private parties to collect, process, and dispose of the commercial
waste.
Cost Allocation by Specific Waste Streams — Another waste stream based
approach to allocating costs is to isolate the costs of managing certain specific
waste streams, such as yard trimmings, that are part of a larger category of waste
— in this case residential waste. If a local government operates a yard trimmings
collection program that serves only a portion of its residential properties, then the
costs for the program can be allocated to the properties that receive the benefit
from the program.
Cost Allocation for Residential Property — Whether the costs are allocated based
on broad or narrow categories of solid waste, they must be allocated to the
property owners based on the benefit received. For residential property, the
benefit received is not a function of the value of the property, so an allocation
scheme based on property values is not appropriate. The typical allocation method
for residential property is based on the number of residential units on the property.
This approach assumes that the benefit received by each residence is approximately
the same.
Cost Allocation for Non-Residential Property — The method of allocating the cost
of providing solid waste management services to non-residential property is more
difficult as the range of solid waste generation sources, as well as the type of
materials across all commercial, industrial, and institutional properties within a
jurisdiction, can be quite variable. To apply special assessments to non-residential
property would require the non-residential properties be grouped into a number of
categories that have similar waste generation characteristics and management
needs.
How does a local government go about establishing a solid waste special
assessment?
Four elements need to be in place before a local government can implement a solid waste
special assessment. These elements are:
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1) the legal framework for
the local governments to
institute special
assessments,
Four elements are needed for a solid
waste special assessment:
» legal framework
» understanding of costs
> cost allocation strategy
» billing and collection strategy
2) an understanding of the
solid waste management
system costs,
3) a cost allocation
methodology for
calculating the special assessment, and
4) a special assessment billing and collection strategy.
This guide is the second in a series of two which examines the use of special assessments
for funding solid waste management services. The first guide examined the legal
foundation that exists in 13 states in the South for local governments to institute special
assessments. This guide is a tool to assist local governments in defining solid waste
management costs and the allocation methodology, billing, and collection procedures to
be used.
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SECTION 3
LEGAL FOUNDATION FOR SPECIAL
ASSESSMENTS
Four states, Arkansas, Georgia,
for solid waste management and two
of those four states, Georgia and
Florida, specifically authorize their
counties to
m ¦'
The ability of a local government to
implement a special assessment program
for solid waste management services
differs for each of the southern states
participating in CSC A. An examination of
the constitutional, statutory, and judicial
law in Alabama, Arkansas, Florida,
Georgia, Kentucky, Mississippi, North
Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Virginia, and West 11111^
Virginia, shows that each of these states
either mandate counties to be solely responsible for solid waste management in their
geographic area or mandate some county involvement in local solid waste management.
Four states, Arkansas, Georgia, Florida and Tennessee authorize their counties to impose
special assessments for solid waste management and two of those four states, Georgia and
Florida, specifically authorize their counties to collect those assessments on the annual
property tax bill.
The obvious question, with only four states specifically authorizing special assessments
for solid waste management, is whether and how the remainder of these states can also
impose special assessments for solid waste management. Each state must evaluate its own
legal scheme as it relates to county power and tax and fee requirements. A basic
framework of analysis has been applicable to each state and will make the attached state-
by-state summary useful to those states interested in providing the necessary legal
foundation for local governments to be able to institute special assessments.
What legal authority does a county need to implement a special assessment?
management, counties need authority:
~ over solid waste management
~ to impose special assessments
The first question in determining
whether a county can impose
special assessments for solid waste
management is to determine what
authority is necessary for the
county to act in a particular
manner. In the context here,
counties need authority:
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• to exercise power over solid waste management;
• to impose special assessments as a funding mechanism for solid waste
management; and,
• to collect these special assessments on the annual property tax bill.
What are the sources of legal authority?
Generally, counties have three basic sources of legal authority:
• the state constitution,
• the state legislature, and
• the state courts.
Each of these sources should be examined to determine the scope of county power.
For example, in Arkansas, the state constitution grants to counties all powers which are
not expressly prohibited by the constitution or by law. (See Arkansas Constitution,
Amend. 55, § 1). Based on this constitutional grant of power to charter counties in
Arkansas, one begins with the premise that a county can impose a special assessment for
solid waste management and collect that assessment on the annual property tax bill. The
challenge in Arkansas, then, is to find a state statute or constitutional provision which
prohibits or is inconsistent with the county's desire to impose solid waste special
assessments. Absent such a provision, a county can impose such assessments.
By way of contrast, the state constitution in North Carolina permits counties to exercise
only those powers and perform only those functions which are specifically granted by the
state legislature or can be implied from the legislative grants. (See North Carolina
Constitution, Art. VII, § 1.) The examination for North Carolina counties is the opposite
of the examination in Arkansas. One begins with the premise in North Carolina that
unless a county can find specific statutory authorization to impose solid waste special
assessments, then the county cannot impose the assessments.
In addition, the judicial interpretation of a state's constitution and legislation is significant.
For example, in Alabama, no statutory authority existed for fire districts to impose special
assessments for the fire services they provided to the properties in their districts.
However, on at least two occasions, the Alabama courts determined that the "service
charges," which were imposed by the fire districts under statutory and constitutional
authority, were in the nature of "special assessments" and should be treated as such (see.
e.g.. Holmes v. Concord fire Dist.. 625 So.2d 811 (Al.Civ.App. 1993); Dewberry
Engraving Co. v. No, Shp.lhv Co. Fire & Emergency Med. Dist.. 519 So.2d 490 (Ala.
1987)).
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How is the necessary legal authority established?
In most of the southern states, a county needs:
1. legislative authority to impose special assessments for solid waste
management, and
2. legislative authority to collect those assessments along with other annual
property taxes.
In those states where special acts have not been completely abolished, counties may be
able to receive sufficient authority to impose solid waste special assessments through a
special act. However, in almost all states, including Florida, general law authorization is
required to collect the special assessments along with annual property taxes.
Many states have not expanded the use of special assessments to services, like solid waste
management and fire protection, and maintain that special assessments can only be used
to fund improvements such as street paving or sidewalk installation. In those states where
special assessments may not be imposed for services or the courts have not yet addressed
that question, a legislative enactment authorizing counties to impose such assessments
could be judicially challenged. However, in many states, good legal arguments exist that
such a legislative enactment, while perhaps novel, would be valid. These arguments are
bolstered in states like Alabama, Georgia, and Kentucky where the courts have deemed
rates, charges, and fees to be in the nature of special assessments.
Finally, for those states which grant broad home rule powers to counties, an aggressive
approach to imposing solid waste special assessments exists. A county with authority to
act in any manner which is not inconsistent with the state constitution or state law has
broad powers. In such a situation, the county could impose a solid waste special
assessment by local ordinance. Many special assessment programs for services in Florida
have survived judicial challenge under this rationale. However, if a county is authorized
to only exercise powers and perform functions which are legislatively granted, then a local
ordinance provides insufficient authority for a solid waste special assessment without
supporting state legislation.
Thus, often the constitutional framework and judicial interpretation of county home rule
powers and financing authority is just as significant as statutory language in determining
whether a county can impose solid waste management special assessments. At the very
least, all three sources of legal authority, statutory, judicial, and constitutional should be
examined to determine the precise areas in which a county may or may not be able to
impose special assessments.
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SECTION 4
UNDERSTANDING THE COST OF SOLID WASTE
MANAGEMENT
The development of a fair and
reasonable solid waste special
assessment depends on a thorough
understanding of the solid waste
management costs.
The development of a fair and reasonable
solid waste special assessment depends on
a thorough understanding of the solid waste
management costs incurred by the local
government. The cost of providing solid
waste management services can include
costs that are normally not associated with
solid waste management activities (e.g.,
indirect costs such as the general operating and administrative costs of the local government).
In order to capture the "full cost" of solid waste management services, all costs incurred,
including indirect costs, and revenues generated that are attributable to solid waste
management need to be included.
This section provides an overview of the solid waste management services that local
governments provide and the types of costs incurred in providing these services.
What solid waste management costs can or should be recovered through a special
assessment?
The local government has some flexibility in terms of what costs it may recover through a
special assessment. If the aim is to maximize the recovery of solid waste management costs
through special assessments then the objective is to capture the full cost of providing solid
waste management services. If the local government's goal is to capture only some of the
costs to keep the assessment at a lower level, it can do so. For the purposes of this Guide,
it is assumed that the objective of the local government is to recover the full cost of
managing their solid waste system.
The cost of providing solid waste
management services can be broken
down by the type of solid waste, the
type of services provided, and by
various cost categories. The types
of materials managed by the local
government can include:
The cost of providing solid waste
management services can be broken down
by the type of solid waste, the type of
services provided* and by various cost
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• municipal solid waste (residential, institutional, commercial, and industrial)
• recyclables
• yard trimmings
• debris (construction and demolition, and land clearing)
• miscellaneous wastes (tires, used oil, batteries, etc.)
The types of services provided can include the following:
• collection
• transfer
• hauling
• processing (recycling, composting, combustion)
• disposal (landfilling)
• other (e.g., public education)
In determining the full cost of service, it is important to consider all elements of the solid
waste management system for which the local government has some responsibility. Table
4-1 presents a number of scenarios which identify the general type of service provided,
the different degrees of responsibility that the local government may have, and the general
types of costs that are incurred by the local governments.
What are the specific categories of costs that can be recovered?
Table 4-2 presents an expansive list of cost categories that can be considered when
developing a full accounting of the solid waste management system costs, as well as some
revenues generated through the operation of a solid waste management system.
Are there any accepted full-cost accounting methods for solid waste
management systems?
A number of states have developed methodologies for determining the full cost of solid
waste management services. These methodologies are useful guides in determining the
costs of a solid waste management system.
Can these full-cost accounting methodologies be applied directly to special
assessments?
These full-cost accounting methodologies were developed for different purposes. Care
must be taken when using them to determine the cost basis for a special assessment. Some
of the methodologies include avoided costs or replacement costs in the full cost analysis
which may not be appropriate when applied to special assessments. Special assessments
need to be based on the costs actually incurred by the local governments.
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Table 4-1
MSW Management
Responsibilities and Types of Costs Incurred
Type of Service | Utspvttsibffity for Service
€v$t$ Incurred by Local Governments |
Collection
Local Government Responsibility. Collection of all or a
portion of the MSW may be the responsibility of the local
government. Service is typically provided to residential
properties but may also serve commercial, institutional, and
industrial properties. Local government may have dedicated
collection staff and equipment, may contract with a private
collector, or may manage the collection activities through
licensing or franchising.
Property Owner Responsibility. Property owners mav
contract directly with private collectors for the collection of
MSW or components of MSW.
Costs incurred depend on the collection approach taken.
For municipal collection, the costs would include: direct and indirect
labor costs for collection crews, maintenance staff, and supervisors and
equipment costs (capital purchases, fuel, leases, maintenance and
repair).
For contracted collection, the local governments pay collection costs
charged by private collectors and incur additional costs for contract
procurement and oversight.
For licensing and franchise arrangements, the collection costs are paid
by the property owners. Local governments incurs costs for managing
licensing and franchise processes. |
Transfer, Processing,
and Disposal Facility
Operation
Local Government Responsibility. Operation of transfer,
processing, or disposal facilities may be performed by the
local government. The local government may also contract
with private companies to operate municipal facilities.
Types of facilities include transfer stations, MRFs,
composting facilities, waste-to-energy facilities, and
landfills.
Property Owner Responsibility. Contracts for the private
collection of MSW or components of MSW typically
includes processing and disposal.
If the local government operates a transfer, processing, or disposal
facility, then the costs incurred include the direct and indirect labor
costs, debt service, capital purchases, equipment leases and
maintenance, and other costs such as landfill closure and post-closure
care.
If the local government contracts with a private firm for the operation
of a public facility, then the costs incurred include the operator's
operation and maintenance fee, pass-through costs, and debt service
and the cost of management/monitoring of the contracted services.
Transfer. Processing
and Disposal Services
Local Government Responsibility. Instead of using a
municipal facility, the local government may contract with
a private facility to process and/or dispose of MSW or
components of MSW. Types of private facilities include
transfer stations, MRFs, composting facilities, waste-to-
energy facilities, and landfills.
Property Owner Responsibility. Tvpicallv part of orivate
collection service.
When a local government contracts with a private facility, the costs
incurred would be a per ton fee for processing and/or disposing of the
MSW or a component of the MSW. In addition to these costs would
be the cost of management/monitoring of the contracted services.
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Table 4-2
Costs and Revenue Categories
Direct Labor: Regular wages and overtime.
Benefits: FICA taxes, retirement contributions, insurance (health, life, disability), worker's compensation, and
unemployment benefits.
Professional Services: Engineering, legal, and financial services.
Utility Services: Gas, electric, water, and wastewater charges.
Communications Services: Telephone, fax, and modem charges.
Rentals/Leases: Automobiles, trucks, mobile equipment, and land.
Fuel: Gasoline, diesel, fuel oil, and propane.
Other Expendables/Oneratine Supplies: Chemicals, lubricants, and other materials.
Maintenance and Repairs: Vehicles, equipment, and structures.
Insurance and Bonds: Automobile, comprehensive general liability, etc.
Miscellaneous: Travel and per diem, printing, legal advertising, office supplies, books, publications, subscriptions,
public education, etc.
Minor Contract Services: Groundskeeping, pest control, groundwater testing, uniform rentals, etc.
Maior Contract Services: Contracted collection (MSW, recyclables, yard trimmings, etc.). contracted operation
(MRF, transfer station, landfill operation, landfill closure, waste-to-energy facility), and contracted disposal.
Indirect Costs: Portion of county/local government support costs.
Reserve Funds: Equipment repair and replacement, landfill closure, landfill post-closure care, and debt service
reserve accounts.
Minor Capital Costs: Equipment, land, and building purchases that are paid for from available funds (not paid for
through borrowing).
Maior Canital Costs: Principal and interest payments on short-term and long-term debt.
Fees: Licensing or franchise fees.
Material Sales: Revenues from the sale of recyclables and compost.
Energy Sales: Revenues from the sale of steam and/or electricity from waste-to-energy and landfill gas facilities.
Interest Earnings: Interest earned on funds in the reserve accounts and on construction funds.
Grants: State grants for supporting certain solid waste management programs and/or activities.
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Another issue relates to how reserve accounts are established to fund future costs, such as
for landfill closure and post-closure care. If the funds to pay for future activities are
being escrowed, the costs are incurred in the present and could be recovered in the present
through a special assessment. In this case, future use of the reserved funds would not be
considered a cost since it was accounted for when the funds were escrowed.
What are indirect costs?
The direct cost of providing certain specific services can be defined with some ease. If
the local government operates a landfill, then the direct landfill costs would include all
operation and maintenance costs and capital costs associated with running the landfill.
In this example, the indirect program costs would include the labor and expenses of the
public works department that are not directly related to the landfill operations and the
labor and expenses of the local government that are not incurred by the public works
department but are the result of supporting the general or specific activities of the public
works departments. If a local government has a number of solid waste management
programs or services, then all or a portion of these indirect costs can be allocated to the
individual solid waste management program.
Indirect solid waste management costs are those costs incurred that are not directly related
to operation of specific solid waste management programs or facilities. These "indirect
costs" include the costs of managing and supporting all the solid waste management
activities by those responsible for solid waste management such as a public works
department, a solid waste department, or a solid waste authority.
Other indirect costs include the labor and expense of those not directly responsible for the
solid waste management activities but who support these activities (such as the county
commissioners, county legal staff, etc.). We are calling these "other indirect costs."
A similar approach can be taken with non-program specific solid waste management
revenues. Revenues generated from specific solid waste management programs should be
used to reduce the cost of those programs Where the revenues are not related to any
specific solid waste management program, they should be allocated in some manner to the
individual programs to offset program costs.
How are the indirect costs allocated to specific programs?
There are several ways to allocate indirect
costs and non-program specific revenues Indirect costs can be allocated to
to the solid waste management programs. programs on a cost, solid waste
Indirect costs can be allocated to or specific line item
programs on a cost, solid waste quantity, allocation basis,
or specific line item allocation basis.
Other indirect costs can be allocated to
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the overall solid waste management program on a cost or on a specific line item allocation
basis. Each of the allocation methods are described below.
INDIRECT SOLID WASTE COSTS
Cost Based Allocation — A cost based allocation is one in whkb the indirect solid waste costs and
non-program specific revenues are allocated to the solid waste management programs based on
the relative net costs (expenses less revenues) of the programs. If one program represented 75
percent of the total program costs, then 75 percent of the indirect solid waste costs and non-
program specific revenues wold be allocated to that program.
Quantity Based AHocation —-A solid waste quantity based allocation is one In which the indirect
solid waste coats and non-program specific revenues are allocated to the solid waste management
programs based on the quantity of solid waste managed by each program. If one program
handled 75 percent of the total solid waste managed, then 75 percent of the indirect solid waste
costs and non-program specific revenues would be allocated to that program,
Time Based Allocation Individual indirect solid waste management costs and non-program
revenues can also be allocated to each program on a line item specific basis. For example, if the
soUdwaste management administrative staff spent 50 percent of their time addressing the needs
of a specific program, then that program would be allocated 5(1 percent «f cost of the
administrative staff.
OTHER tmimcr COSTS
Cost Based Allocation — Other Indirect costs can be allocated to the solid waste management
program based on the total cost of that program relative to the total cost of other local
government programs. If the total cost of the solid waste management program represented 2$
percent of the total cost of all the programs managed by the local government, then 25 percent
or the other indirect costs would be allocated to solid waste management programs,
Sneeiffo T,iw» item Allocation Another approach to the allocation of other indirect costs is
based on an analysis of specific line items. For example, if a country attorney spent 10 percent
of his time addressing the solid waste management needs of the country, then 10 percent of the
cost associated with the county attorney would be allocated to the solid waste management
programs as an other indirect cost.
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SECTION 5
CALCULATING THE SPECIAL ASSESSMENT
A solid waste special assessment is an
allocation of the cost of providing solid
waste management services to a given
class of property. The cost of these
services is a function of the quantity and
type (i.e., residential solid waste,
commercial waste, tires, yard trimmings,
etc.) of solid waste generated by the property and managed by the local government.
Therefore, to assess a fee to a property for the solid waste management services provided
to it, the quantity of solid waste generated by the property must be determined. As the
quantity of solid waste generated by each property is not actually measured, determining
the solid waste generated by a property requires a means other than direct weight
measurement. The alternate means of determining solid waste generation involves using
information on the property that is related either directly or indirectly to the generation of
solid waste.
A solid waste special assessment Is an
allocation of the cost of providing
solid waste management services to a
given class of property*
The methodology or methodologies employed by the local governments to determine solid
waste generation may rely on several different factors depending on the type of property
and/or the type of solid waste managed. The objective of this methodology is to estimate
the quantity of solid waste generated by the benefited properties in a fair and reasonable
manner.
The purpose of this section is to present options for determining the solid waste generation
for different properties and solid waste streams after which to go the next step and
calculate the special assessment.
What is the first step in calculating a special assessment for residential
properties?
After the solid waste management costs have
been determined, the first step in calculating
a special assessment for residential properties
is to determine the quantity of residential
solid waste generated. Determining the solid
waste generation for residential properties is
relatively straightforward. For residential
The first step in calculating a special
assessment for residential properties
is to determine the quantity of
residential solid waste generated.
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properties, solid waste is generated by the actions of the residents. Therefore, there is a
close correlation between the number of residents and the quantity of solid waste
generated. An alternative measure of solid waste generation is the number of residential
units on a property. Even though the number of residential units on a property is one step
removed from the cause of solid waste generation it is still a fair representation of the solid
waste generated by the property. In some ways, the number of residential units is a better
measure of solid waste generation than the number of residents on a property in that the
number of residential units is not likely to change over time while the number of residents
may change dramatically over a short time period.
The number of residential units is indirectly related to solid waste generation. The
distinction between direct and indirect relation is important. From a fairness standpoint,
a special assessment should be based on factors that directly cause solid waste to be
generated. From a practical (reasonable) standpoint it is often based on factors that are
indirectly related to solid waste generation but are more easily measured.
Are there any differences in solid waste generation between different types of
residential properties?
The average quantity of solid waste generated from residential properties is likely to be
similar on a per residential unit basis for various classes of residential property. This is
not to say that there are no differences between the various classes of residential property.
Differences in the average generation on a per residential unit basis may be the result of
a number of factors including the average number of people in each residential unit and
the average income of the residents.
Typical improved residential property classes used for tax purposes can include some or
all of the following residential properties:
• single family homes
• small multi-family homes
• large multi-family homes
• condominiums
• mobile homes
Unimproved residential property would not
be expected to generate any solid waste and
as such would not be included in the
computation of the special assessment. The
tax-based residential property classifications
shown above are often used directly to
determine the cost of service and compute
the special assessment.
Unimproved residential property
would not be expected to generate any
solid waste and as such would not be
included In the computation of the
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How is the solid waste generation for residential properties determined?
There is no accepted or recommended methodology for determining waste generation for
specific classes of properties. In general, the average residential solid waste generation
can be arrived at relatively easily based on the collection vehicle weight records and
demographic data (e.g., tons of solid waste collected by vehicles serving the residents
divided by the number of residents or residential units served). In many instances, the
relative difference in solid waste generation for samples of residential units in the different
classes of residential property can be determined through a close examination of solid
waste collection data, supplemented with specific demographic data.
A focused analysis of the solid waste collection data can be performed from information
on solid waste collection vehicle routes obtained from municipal and/or private waste
collectors. Working closely with the waste collectors to find collection routes that are
predominantly of one type of residential property is critical. Once reference routes have
been selected (i.e., routes that are predominantly of one type of property), solid waste
quantity data on the specific collection trucks servicing these reference routes can be used
to determine residential property solid waste generation rates.
The relative differences observed between the different classes of residential property
(e.g., an average mobile home generates 80 percent of the solid waste that an average
single family home generates) can be applied to the average residential solid waste
generation to calculate the specific generation for each class of improved residential
property.
Can special assessments for non-residential properties be approached in the
same way as for residential properties?
Unlike residential property, the commercial, industrial, and institutional classification of
property used for tax purposes has little or no relationship to the solid waste generated by
the activities on the property.
To apply special assessments to improved non-residential properties, a different property
classification system based on certain solid waste generation characteristics (e.g., quantity
or type of solid waste
generated) needs to be
employed. The classification
system can be as simple as
high, medium, low, and no
waste generation. Individual
properties would be placed in
these categories based on the
characteristics of the activity taking place on the property. An average waste generation
for each class of non-residential property (high, medium, and low waste generation)
To apply special assessments to non-residential
properties, a different property classification
system based on certain solid waste generation
characteristics needs to be employed.
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would be established based on a common factor such as square footage or number of
employees.
A local government may find that a more specific (and complex) classification scheme may
need to be put into place to adequately address non-residential solid waste generation for a
special assessment. The primary driving force for a more specific classification system is that
the special assessment must be "fair" in order to be justifiable. Several examples of a more
specific classification system are described below.
Restaurants can be classified by the dollar value of food sales or the number of
available seats.
Retail stores can be broken down in separate categories by sales volume, then further
broken down into specific types of stores (e.g., large volume retail stores divided into
two types, department stores and discount stores, each having its own sales based solid
waste generation rate).
Hotels can be broken down into several categories such as first class, medium class,
and budget. Each category of hotel would have a separate waste generation rate based
on the number of rooms in the hotel.
Once the means of classifying the commercial and industrial property has been established, the
next step is to determine the waste generation for each class of property. The average solid
waste generation for each class of property can then be determined by dividing the solid waste
generation by a factor that is related to solid waste generation (such as square footage or sales
volume) and is common to all the properties in a given class.
How is non-residential solid waste generation determined?
Solid waste from commercial, industrial, and institutional properties are typically collected in
roll-off containers provided by private waste collectors. Consequently, the data needed to
determine the solid waste generation for non-residential properties includes the type of
container, the size of the container, and the frequency of collection. The source of the data
can either be the private waste collectors or the commercial, industrial, and institutional
establishments.
One approach that a local government may consider is the development of an ordinance for
collection of non-residential waste that establishes certain levels of service for non-residential
properties. Such an ordinance could set specific container sizes and frequencies of collection
for the private collectors to follow. The property class in which each non-residential property
is placed would be based on the level of collection service for which it contracts.
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While it is often not feasible to determine the quantity of solid waste generated by all the
properties in a given property class, it is important to collect enough data to estimate the solid
waste generation with a high degree of confidence. The amount of data collected will also be
dependent on the complexity of the non-residential property classification system. A complex
property classification system will likely require a more intensive data collection and analysis
effort on the part of the local government.
The choice of which factors to use in determining the quantity of solid waste generated from
a non-residential property is critical to the overall success of special assessments for non-
residential properties and should not be treated lightly. If a special assessment is planned for
non-residential properties, then a detailed analysis of the non-residential properties should be
undertaken which looks at the type of properties, characteristics of the use of the property, and
the quantity of solid waste generated by the activities on the property.
A classification system developed only with fairness in mind may be overly complex, requiring
an inordinate amount of effort to be expended on the part of the local government in order for
it to be implemented. At some point the benefits derived from a complex classification system
are outweighed by the costs of such a system. In developing a property classification system
for special assessments, it is necessary to balance fairness with reasonableness so that the
system developed is not an undue burden to the local government yet is fair to the property
owners impacted by the special assessment.
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SECTION 6
SPECIAL ASSESSMENT BILLING AND
COLLECTION STRATEGIES
e final step in implementing a solid waste special assessment is the billing and collection
systems or the special assessment. These two activities are related as the collection
methods available are often limited by the billing method employed. An important element
o a successful billing and collection process is keeping the public involved in the
development and any periodic reviews of the special assessment, and in allowing a means
for addressing valid objections.
This section presents a discussion of the billing and collection options available, as well
as a general strategy for public participation.
What options are available for billing and collecting a special assessment?
There are three options generally available
for billing and collecting special There are three options generally
assessments. These options include the available for billing and collecting
following: special assessments,
1) as part of the ad valorem
tax bill,
2) as part of a separate assessment bill, and
3) as part of a utility bill.
The advantages and disadvantages of each option are described below.
Part of Tax Billt Special assessments may be billed along with ad valorem taxes. In this
case, the local government, in an effort to collect the non-ad valorem assessment (special
assessment) may be able to place a lien on the property being assessed. This varies from
state to state. Some states allow or authorize local government to place a lien on property
for non-payment of a special assessment, while others do not. The use of the ad valorem
tax bill process will likely involve a lengthy and formal notification process. The local
government may be required to initiate the special assessment billing process a year or
more in advance of the issuance of the tax bills.
Separate Bill. Local governments may also be able to collect special assessments
through a billing process separate from the ad valorem tax billing process. Payment of
this separate assessment bill may be enforced through a lien against the property
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depending on the local and state laws. The use of a separate billing process may be more
costly but may offer certain benefits such as a less rigorous notification process.
Part of Utility Bill. Those local governments that operate municipal utilities (water, sewer,
gas, electric, etc.) may be able to bill the special assessment as part of the utility bill. In this
case, the local government would have a more limited ability to recover special assessments
that have not been paid. The special assessment owed to the local government would be
treated in the same manner as the unpaid utility charges.
What is a common pitfall of special assessments?
It is essential to gain the confidence of the
It is essential to gain the confidence of public when implementing a special
tbe public when implementing a assessment program. The cost of not doing
special assessment program. so can be public opposition to the program
iiiMiiaaiiiiiiiiiiiiM and, ultimately, legal challenges — both of
which can delay the implementation or
continuation of needed solid waste management services and construction of solid waste
management facilities that are being funded through the special assessment program.
How is public acceptance of the special assessment program achieved?
Public acceptance of a special assessment program is achieved through a comprehensive
public involvement strategy that covers the development, implementation, and maintenance
of the special assessment program. Specific issues related to each of these areas are
described below.
Development/Implementation. A special assessment has many features that will be new
to the public. It will call direct attention to the cost of solid waste management services,
as well as place responsibility for payment of these services on the property owners in the
community. For this reason, there will likely be statutory public notices that must be
distributed. If the local community has not been involved prior to the point of the public
notices, there can be a significant negative public response.
Public involvement needs to be sought starting with the evaluation of different solid waste
funding options, of which special assessments are one. If the local government decides
to pursue special assessments, then information on the need for the special assessment, the
process for developing the special assessment, and the likely billing and collection process
need to be developed and distributed to the public.
As described in Section 5 of the Guide, the development of specific methodologies for
determining the special assessments for various property classes can be complex,
particularly for non-residential properties. The participation of the public in the
development of the property classes and allocation methodology for the special
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assessment is necessary to gain the trust of the public, particularly the commercial and
industrial sectors.
All of these activities take time. It may take one or more years to implement a special
assessment. But without gaining the support of the public up front, public opposition to the
program can easily cause the implementation to be delayed or rejected.
Program Maintenance Once a special assessment program is underway, the local
government needs to provide assistance to answer questions concerning the special assessment
and have a process delineated for addressing valid complaints and the reassessment of the
property. Questions or concerns that do not get answered quickly and efficiently serve to
antagonize the customers and lead to public opposition. Valid objections to the special
assessment that do not get addressed can lead to legal challenges to the special assessment.
In addition, early notification and involvement of the public in future changes to the special
assessment need to be incorporated in the program to keep it operating smoothly.
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SECTION 7
SPECIAL ASSESSMENT EXAMPLE
As a means of explaining special assessments and illustrating the mechanics of implementing
a special assessment program, an example has been developed around a hypothetical county.
Some basic information about the county and its solid waste management system are provided
below.
• The county has a population of 75,000 and a total of 20,000 residential units.
Fifteen thousand residential units are single-family homes and 5,000 residential
units are condominiums
• The county owns and operates a transfer station.
• A total of 55,000 tons of solid waste from residences are collected by
franchised haulers which are currently charged a tipping fee of $38 per ton at
the transfer station.
• A yard trimmings composting program was started to divert yard trimmings
from the landfill. A total of 5,000 tons of yard trimmings were brought to a
drop-off area by residents of single-family homes.
• One thousand tons of commercial waste was received at the transfer station
from restaurants. This waste was disposed of at the regional landfill.
• Other solid waste from commercial establishments and industries are collected
by private haulers and not handled at the transfer station.
• The county hauls the solid waste to a regional landfill where it is charged a
tipping fee of $25 per ton.
• The county is in the process of closing an inactive county landfill.
In this example, the county is using the franchise agreements to direct the residential solid
waste to the system. The county's ability to direct the residential solid waste to the transfer
station is called into question. In this hypothetical case, it is determined that the county can
no longer direct solid waste to the transfer station so cannot rely on tipping fees from the
franchised haulers to contribute to the solid waste management system.
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Determining Program Costs
The county reviews its funding options and decides to pursue a special assessment program.
The county establishes that it has the legal ability to charge a special assessment to recover the
costs it incurs in providing solid waste management services. The next step for the county is
to define its solid waste management system and associated costs.
The county has two discrete solid waste management programs — one for transferring and
disposing of residential and certain commercial wastes and another for processing yard
trimmings dropped of by residents. Indirect solid waste management costs were allocated to
each program based on the net direct costs of each program. The total costs for each program
are shown in Table 7-1 both on a total dollar basis and on a dollars per ton of material
managed. The program costs for the residential and commercial waste transfer and disposal
program were also allocated to each of the waste streams based on the quantity of each waste
managed.
The cost basis for a special assessment is shown in Table 7-2. The total cost basis includes
direct and indirect solid waste management costs, including the estimated cost of managing the
special assessment program.
Calculating the Special Assessment
Once the total cost basis for the solid waste management system and the total program costs
are determined, the next steps in calculating the special assessment are as follows:
1) the solid waste generation for each class of property;
2) the average cost of service for each class of property; and
3) the special assessment charged each property owner.
Solid Waste Generation.
The types of properties served by the local government are single family homes,
condominiums, and restaurants. The solid waste generation for each property was determined
based on the transfer station scale records, discussions with the franchise haulers as to the
types of properties served on each collection route, and field verification of select routes used
in the solid waste generation analysis.
The total waste generation in the past year for the residential properties is 60,000 tons. Of the
60,000 tons, 5,000 tons is yard trimmings received from single family homes. Based on a
review of the waste quantity data from the selected collection routes, the waste generation rate
from the condominiums is approximately 90 percent of the waste generation rate for the single
family homes, net of yard trimmings. The average waste generation for each type of
residential property is calculated below in Table 7-3 on the basis of an equivalent single family
home:
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Table 7-1
Total Program Costs
Transfer Station. Transportation disposal
Labor $111,000
Benefits 37,000
Repair and Maintenance 14,500
Equipment/Vehicle Leases 14,000
Fuel 8,500
Utilities 3,000
Transfer Station Debt Service 152,000
Regional Landfill Fees 1,400,000
Program Net Direct Costs $ 1,741,000
Total Program Costs $2,578,552
Total Program Costs per Ton of Waste $46.05
Cost of Managing Residential Waste $2,532,506
Cost of Managing Commercial Waste $46,046
Yard Trimmings Program
Labor S36'000
Benefits 12,000
Repair and Maintenance 10,000
Equipment/Vehicle Leases 20,000
Fuel ^
Miscellaneous 4,000
Compost Sales (1,000)
Program Net Direct Costs $82,000
Allocated Indirect Expenses (1) $39,448
Total Program Costs $121,448
Total Program Costs per Ton of Waste $24.29
(1) The basis for the allocated indirect expenses is the indirect
expenses of $898,000 less $21,000 in revenues from the
state grants.
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Table 7-2
Total Cost Basis of Solid Waste Management System
with Special Assessment Program Costs
Transfer Station. Transportation, and Disposal Expenses
Labor $111,000
Benefits 37,000
Repair and Maintenance 14,500
Equipment/Vehicle Leases 15,000
Fuel 8,500
Utilities 3,000
Transfer Station Debt Service 152,000
Regional Landfill Fees 1,400,000
Direct Program Costs $1,741,000
Yard Trimmings Program Expenses
Labor $36,000
Benefits 12,000
Repair and Maintenance 10,000
Equipment/Vehicle Leases 20,000
Fuel 1,000
Miscellaneous 4,000
Direct Program Costs $83,000
Indirect Expenses
County Landfill Closure Costs $220,000
Minor Capital Costs 1,000
Professional Services 60,000
Contracted Services 20,000
Repair and Maintenance 25,500
Equipment/Vehicle Leases 40,000
Fuel 10,500
Insurance 10,000
Utilities 3,000
Grants to Municipalities 35,000
Miscellaneous 45,000
County Indirect Expenses 263,000
Special Assessment Program Expenses 165,000
Total, Indirect Expenses $898,000
Total, Expenses $2,722,000
Revenues
State Grants $21,000
Revenues from Compost Sales 1,000
Total, Revenues $22,000
Total Cost Basis $2,700,000
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Table 7-3
Residential Waste Generation
Number of Equivalent Single Family Homes (ESFH)
Single Family Homes 15,000x 1.0 = 15,000 ESFH
Condominiums 5,000 x 0.9 = 4,500 ESFH
Total Equivalent Single Family Homes 19,500 ESFH
Residential Waste Generation per ESFH
55,000 tons of MSW / 19,500 ESFH = 2.82 tons of MSW / ESFH
Table 7-4
Special Assessment for Restaurants
Restaurant
Number
of Seats
Special Assessment
Restaurant 1
100
100 Seats x $92.09 per Seat =
$9,209
Restaurant 2
50
50 Seats x $92,09 per Seat =
4,605
Restaurant 3
125
125 Seats x $92.09 per Seat =
11,511
Restaurant 4
80
80 Seats x $92.09 per Seat =
7,367
Restaurant 5
145
145 Seats x $92.09 per Seat =
13.353
Totals:
500
$46,046
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The solid waste generation for the restaurants is computed in a similar manner, except that the
factor used to measure solid waste generation at the restaurants is the number of seats. In this
case there are five restaurants (restaurants 1 through 5) with a combined seating capacity of
500 seats. The total waste generated by these restaurants in the past year was 1,000 tons;
therefore, the waste generation per seat per year is 2 tons.
Cost of Service.
In this example, the costs of service are the solid waste management costs expressed in the
following units:
• Residential Waste — Dollars per Residential Unit
• Commercial Waste — Dollars per Restaurant Seat
The total program costs for disposing of residential and commercial waste, as shown in Table
7-4, are $2,532,506 for residential waste and $46,046 for commercial waste. The cost of
service factors for each waste stream are the number of residential units expressed as
equivalent single family homes and the number of restaurant seats. Therefore, the annual costs
of service for the residential and commercial waste are $129.87 per equivalent single family
residential units ($2,532,506 divided by 19,500 equivalent single family homes) and $92.09
per restaurant seat ($46,046 divided by 500 seats).
The total program costs for managing yard trimmings are $121,448. The yard trimmings
program only services the 15,000 single family homes in the county. The annual cost of
service for managing yard trimmings is $8.10 per single family home ($121,448 divided by
15,000 homes served).
Special Assessment.
The special assessment for each single family home is equal to $137.97 ($129.87 for the
managing of solid waste WP and $8.10 for managing yard trimmings). The special assessment
for each condominium is $116.88 ($129.87 x 0.9 for solid waste disposal). The special
assessment for each of the five restaurants is shown in Table 7-4.
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SECTION 8
SPECIAL ASSESSMENT CASE STUDY
PALM BEACH COUNTY, FLORIDA
The Solid Waste Authority of Palm Beach County (SWA) is a special district responsible for
developing and operating an integrated solid waste management system for Palm Beach
County. The SWA serves 420,000 residences (220,000 in the unincorporated areas) and
handles over one million tons of solid waste per year. The system includes a 2,000 ton per
day resource recovery plant, landfill; five transfer stations; and recycling, compost and
hazardous waste facilities. The current disposal cost at SWA facilities is $83 per ton. The
SWA also administers the franchise for residential and commercial collection of solid waste
in the unincorporated portion of the County.
In 1984 and 1987, revenue bonds totaling $420 million were approved by the Authority
Governing Board to pay for SWA facilities. As part of the Bond Indenture of Trust in 1984,
the Authority agreed to begin an assessment program as a method of ensuring bond repayment.
SPECIAL ASSESSMENT PROGRAM
The SWA implemented an assessment program in October 1990. Prior to October 1990, a per
ton tipping fee was charged to each hauler delivering solid waste to one of the SWA facilities.
This tipping fee was passed on to generators by the hauler in the price charged for dumpster
and residential collection service. Beginning in October 1990, the SWA began charging waste
generators directly for disposal services. The haulers continue to charge generators directly
for the cost to collect solid waste.
Residential and Commercial Assessments
The SWA developed a fee structure for the assessment program based on the amount of waste
disposed by several categories of residential and commercial generators. The annual tonnage
disposed by each residential and commercial category was determined by a waste generation
study. The study was conducted for an entire year to account for seasonal variation due to
such factors as a 20 percent increase in population during the winter months.
Residential Units — Every residential unit in Palm Beach County is assessed an amount
that covers 100 percent of their calculated disposal costs, including debt service and
operating costs. The assessment appears on the ad valorem section of the property tax
roll and must be paid when property taxes are paid. The amount of the disposal
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assessment depends on the category to which the residential unit is assigned, either 1)
single-family homes, 2) multi-family homes, or 3) mobile homes. An average annual
tonnage is determined for each of these categories based on the results of the waste
generation study. This tonnage is recalculated periodically to account for changes in waste
disposal habits.
Residents in the unincorporated area of the County are assessed for collection by the SWA
on the property tax roll. This collection assessment is separate from the disposal
assessment. Residents in the incorporated areas pay their municipality or private hauler
for collection. Municipalities may include the cost of solid waste collection as part of the
ad valorem tax, or they may include it on the utility bill. Private haulers invoice the
customer directly for collection. The SWA has the ability to bill for solid waste collection
on behalf of the municipalities.
Commercial Properties — Commercial properties are also assigned to categories: high-,
medium-, low-, or non-generators. Annual tonnages per square foot were determined for
each category based on the waste generation study. The commercial property assessment
is calculated by multiplying the annual tonnage per square foot by the square footage. The
assessment appears on the commercial property tax roll.
Unlike the residential assessment, the commercial assessment only covers $43 per ton of
the total disposal cost of $83 per ton. This amount is sufficient to secure revenues to pay
debt service and to provide a competitive tipping fee at SWA disposal facilities.
Governmental Assessment — Like residential properties, governmental properties are
assessed the full cost of disposal, including debt service and operating costs. However,
the assessment for governmental properties is based on container size, frequency of
collection, and the actual disposal rate.
Customer Information
The SWA keeps the public informed of assessments twice a year, once through the Truth
in Millage statement and once in the actual tax bill. There is a customer information
service and appeals process to deal with questions, complaints, and objections. However,
once the accuracy of the fee is resolved, the SWA can enforce the payment of assessments
by placing a lien on property.
Tipping Fees
When municipal and franchised haulers bring the solid waste collected from residences
(who have already paid the full cost of disposal through the assessment) to a SWA
facility, they receive a tipping fee "credit" for that portion of the solid waste. The
portion of solid waste that receives the reduced tipping fee is based on the number and
type of residential units the hauler serves, the amount of waste disposed by that category
of residential units, and the tipping fee. For example, the amount of solid waste
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generated by the average single-family home in Palm Beach County was calculated to be
1.69 tons per year. If a hauler collects from 10,000 single family homes (assuming he had
no other customers), he only pays the tipping fee for waste exceeding 16,900 tons (10,000
x 1.69).
Haulers delivering solid waste from commercial sources pay a $40 per ton fee. This fee
is set based on actual facility operating costs. This cost is covered in the fee charged
directly to commercial property owners by the haulers. Such arrangements are made
between the commercial property owner and the private hauler.
Municipal and unincorporated franchised haulers do not pay a tipping fee when solid waste
from governmental properties is delivered to SWA facilities since these properties paid the
full cost of disposal through the assessment.
APPLICATION TO OTHER LOCAL GOVERNMENTS
The following lessons from Palm Beach County can be applied when implementing similar
special assessment programs in other communities:
1. Consider other solid waste issues occurring at the same time the fee is being
implemented. Other activities may influence public response to the assessment or
divert staff attention from gaining support for the fee. An assessment is likely to
be controversial and requires considerable effort to implement. At the same time
the assessments were announced, the SWA was trying to site a landfill. In
retrospect, SWA staff believe that the controversy surrounding landfill siting made
the SWA unpopular, especially since the landfill siting was the first time many
citizens had heard of the SWA. This temporary, negative perception of the SWA
may have contributed to the objections to the assessments.
2. Allow opportunity for public input as the program is being planned; but make
sure the public has the information needed to provide useful input. The SWA
originally advertised public hearings through required avenues, such as the
newspaper, without providing much detailed information about the assessments.
As a result, the first public hearings were not well-attended.
Once every resident and business received a first class notice of the assessment (as
required by state law) and the associated penalties for non-payment (a possible lien
on property), there was an uproar. Thousands of people attended subsequent
public hearings. The most vocal opponents were business and condominium
owners that objected to the initial proposal to assess 100 percent of all disposal
fees on a tier system based solely on square footage. Businesses wanted an
opportunity to affect their bill through recycling, dumpster management, and
source reduction.
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As a result of these objections, the commercial assessment program was postponed
for a year. During this year, the SWA met with Chambers of Commerce and other
business organizations to explain the fees and gather input. When the commercial
assessment went into effect the following year, the methodology to calculate
commercial assessment was changed so that commercial generators were assessed
for approximately 50 percent (currently 52 percent) of disposal costs. Allowing
time to receive and incorporate this input led to significantly fewer objections.
3. Allow sufficient time for planning, including developing the database required
for equitable assessments and gaining public support. Delays can be costly
when repayment is involved. After a one year delay to finalize the assessments,
the SWA had to request a second year for the commercial assessments due to the
objections described above. It was difficult to get the bondholders to agree to these
delays.
4. Remind the public regularly about the fees and be available to respond to
questions and complaints. The SWA notifies generators twice per year of their
assessment, once on the Truth in Millage statement required by Florida law and
once on the actual tax bill. To respond to questions about assessments, as well as
complaints about collection service and other issues, the SWA customer
information service employs twelve people.
5. Allow a procedure for valid objections. The SWA limits appeals to those that
are inequitably treated by the assessment system. Someone who just thinks fees
are "too high" or will "put them out of business" are not considered. On average,
the SWA receives less than 20 appeals each year, only two or three of which result
in assessment changes.
A generator is assigned to a category based on the property appraisers' records.
Therefore, if he wants to challenge the category to which he is assigned, the SWA
requires that he go to the property appraiser to request a change. For other
disputes, a field representative visits the site to verify the basis of the assessment.
If there is still a discrepancy, the generator can call for hearings by independent
counsel. If the generator is dissatisfied with the outcome of the hearing, he can
take the matter to court.
6. Implement a flexible system that can adjust to necessary changes. The SWA
adjusts fees periodically to address changes. The SWA periodically redoes the
waste generation analysis and changes fees accordingly so that generators are
rewarded or penalized for changes in waste disposal practices. For example, a
waste generation update conducted in 1990 and 1991 found that the two categories
of multi-family generated about the same amount of waste, so all multi-family
generators were lumped into one fee category. In the same study, the SWA
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determined that the amount of solid waste disposed by single-family homes had
increased and assessments were raised accordingly.
The SWA also adjusts assessments as disposal costs and conditions change. For
example, the SWA raised the portion of the tipping fee that commercial generators
pay in their assessment from 50 to 52 percent as an added incentive to ensure that
the commercial solid waste is delivered to SWA facilities. This lowered the
tipping fee for haulers of commercial waste to $40 per ton.
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miilii
1024256
LIBRARY
US EPA Region 4
Atlanta Federal Center
100 Alabama St., SW
Atlanta, GA 30303-3104
DATE DUE
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