JRB No.: 2-817-03-785-05


Final Report

Prepared for;

U.S. Environmental Protection Agency
Office of Solid Waste

401 M Street, S\4
Washington, DC 20460

Prepared by;

JRB Associates
8400 Westpark Drive
McLean, VA 22102

EPA Contract No.: 68-01-6000

July, 1982


This report was prepared by Dick Richards and Edward F. Tokarski of JRB
Associates and Susan Mann of the Office of Solid Waste, U.S. Environmental
Protection Agency. Funding was provided through the Technical Assistance
Panels Program under EPA Contract No. 68-01-6000.





2.1	Mandates	 5

2.2	Contracts		

2.3	Incentives		

2.4	Summary		


3.1	Single Municipalities 		19

3.1.1	Contract or Franchise Systems	20

3.1.2	Independent Systems 		21

3.1.3	Recommended Strategy 		21

3.2	Regional/Multijurisdictional Entities 	 		22

3.2.1	Interlocal Regional Commissions	23

3.2.2	Private Ventures 		25

3.3	State Agencies	26

3.3.1	Agency with Full Authority	26

3.3.2	Agency with No Local Authority	28

3.4	Interstate Agencies 		29

3.4.1	Interstate Regional Commissions		30

3.4.2	Private Bistate Ventures 			32

3.5	Summary	33





APPENDIX B: SYLLABUS OF Community Communications, Co., Inc..

vs. City of Boulder, Colorado, et al	B-




liffiiESI	Page




An increasing number of communities, municipalities, and private industry
organizations are seriously considering capital intensive resource recovery
systems as an alternative to land disposal of municipal solid waste (MSW).
According to the U.S. Conference of Mayors (City Currents, March 29, 1982),
there are in presently 68 resource recovery facilities in the United States
that are operation, in shake-down, under construction, or in advanced stages
of planning. Forty-one additional jurisdictions are reportedly committed to
implementing some type of resource recovery project.

A growing awareness of the environmental impact of land disposal has led
to stricter regulation of this disposal method and resulted in higher costs
for land disposal. The attraction of resource recovery is its ability to
reduce the volume of material to be landfilled while offsetting a portion, of
disposal costs through the sale of recovered materials and/or energy. This
continuing increase in the expense of land disposal provides an incentive to
recover the valuable components of MSW.

Resource recovery facilities are basically manufacturing plants that use
a raw material—solid waste—process the material, and produce an end
product—energy and/or recovered materials such as refuse-derived fuel (RDF),
glass, metals, and mixed paper. Like any manufacturing plant, these
facilities must operate at or near design capacity to prove economically
successful. Figure 1 shows the effect of decreases in MSW throughput on the
net cost per ton for a hypothetical 1500 TPD mass-burning facility. Since
many of the annual operating costs of such a facility are fixed, particularly
debt service and to some extent labor, the impact on the cost per ton of
reducing the quantity of MSW processed is dramatic. Therefore, an important
factor toward economic success of a resource recovery project is that it
receives enough waste to operate at or near its capacity. The waste delivered
need not include the recoverable materials found in municipal solid waste,
such as metals, glass, corrugated paper, and newsprint. Energy recovery can
be compatible with a .source separation program to recover these materials


Figure 1. Relationship between Net Processing Cost and Waste Throughput
for a 1500 TPD Mass-burning Resource Recovery Facility


provided the system is designed to reflect any resulting change in the
composition and quantity of waste received.

Methods for ensuring that sufficient MSW is delivered to a resource
recovery facility can be categorized according to three principal types:

1.	Mandates— State legislation or local ordinances directing that all
waste generated within specified areas be delivered to identified
disposal facilities.

2.	Contracts— Agreements between facility owners and/or operators and
the organization which has control over the waste for delivery of
specified quantities of MSW.

3.	Incentives — Actions that offset existing economic conditions so as
to make delivery of waste to resource recovery facilities more
attractive to haulers.

Comprehensive analysis of the existing situation is essential to choosing
the waste control method or methods that best suit a given set of conditions.

The following sections of this report address the issue of waste flow
control, with the objective of clarifying this complex issue. Chapter 2
contains detailed discussions of flow control methods, followed (in Chapter 3)
by an analysis of the effects of various situations on these methods.

Finally, Chapter 4 stresses the importance of early planning to minimize
problems in flow control implementation. A glossary of frequently used terms
follows Chapter 4.



In developing a waste control program, waste management officials can
select from various methods in the categories of mandates, contracts, and
incentives. Methods from one or more of these groups can be combined to form
an effective waste control strategy. These methods are discussed in the
following pages.


Waste control can be achieved through legislation directing all waste
generated within a specified area to a designated site. Those haulers failing
to obey the ordinance would risk the loss of their operating licenses, fines
or other civil penalties.

The two basic qualifications for the validity of mandates are:

1.	Mandates can be enacted only by a unit of government granted the
authority to enact such legislation by the state.

2.	The mandate must be constructed so that it does not conflict with any
state and/or Federal laws.

Mandating waste control has several advantages:

1.	All waste generated within the area of concern regardless of present
collection and disposal methods is (theoretically) under control.

2.	Mandates can be enacted very early in the planning stages, requiring
little preliminary work. In order for waste stream control to be
achieved through contracts, for instance, it would usually be neces-
sary to accurately determine project economics and set a tipping fee
in order to obtain a long-term commitment from a municipality.

3.	Mandates preclude the time-consuming and complicated negotiations
among numerous parties usually required in contract negotiations.

tf mandates are the method chosen to achieve waste control, a government
unit must have authority to enact the measures, which in turn must conform to


existing constitutional and statutory provisions. The issues of authority to
enact legislation and constitutionality of mandates for waste disposal are not
well defined. In 1979, the U.S. District Court for the Northern District of
Ohio, Eastern Division, upheld a waste control ordinance enacted by the City
of Akron, Ohio, directing waste generated in the City to the City's resource
recovery facility. (Glenwillow Landfill, Inc., et al., v. City of Akron, and
Hybud Equipment Corporation, et al., v. City of Akron, 485 F.Supp. 671 (N.D.
Ohio 1979). Subsequently, Glenwillow Landfill, Inc., joined the appeal of the
Hybud Equipment Corp. to the U.S. Court of Appeals where the lower court
decision was upheld in July, 1981, Hybud Equipment Corp. v. City of Akron 654
F.2d 1187 (6th Cir. 1981). However, in January, 1982, the U.S. Supreme Court
handed down a landmark ruling on the extent to which home-rule cities are
immune to Federal antitrust laws, Community Communications, Co., Inc., v. City
of Boulder, Colorado, et al. 102 S.Ct. 382 (1982). Subsequently, the Supreme
Court vacated the Appeals Court decision in Hybud and returned it to that
court for reconsideration in light of the Community Communications v. Boulder
decision. A brief discussion of the legal issues involved in the litigation
over the Akron ordinance follows. A more comprehensive discussion of the
Glenwillow and Hybud cases is included as Appendix A.

The Akron facility was financed through $46 million in tax-exempt bonds
issued by the Ohio Water Development Authority (OWDA) and through $10 million
in general obligation (GO) bonds issued by Akron, Ohio, and Summit County,

Ohio. GO bonds were issued when problems arose in marketing the revenue
bonds. The financing arrangement was set forth in a cooperative agreement
among OWDA, the City of Akron, and Summit County. One of the clauses of that
agreement provided that the City and County would take measures to ensure that
all waste generated in their jurisdictions be taken to Akron's Recycle Energy
System (RES). The bond underwriters, Dillon, Read, and Co., also required
that the waste supply be secured in order to make the bonds more attractive
even though projections showed that the facility would be economically
competitive. In 1976, the Akron City Council passed a municipal waste control
ordinance requiring that all MSW collected within the City be taken to the RES
plant. Seeking to overturn the ordinance, haulers and landfill operators
brought suit. The County did not enact a waste control ordinancej preferring
to wait until all legal challenges to the City's ordinance were resolved.


In upholding the Akron ordinance, the Federal District Court in Ohio
ruled that control of local sanitation practices is a traditional example of
the exercise of municipal police powers granted states and cities under the
10th Amendment. Previously, local municipalities had authority over waste
flow within their jurisdictions only if that power were specifically granted
by the state. In Glenwillow, the District Court ruled that under the Ohio
Constitution, if chartered government units are given broad powers to
establish government policy within their limits, and either there is no
uniform State policy, or the State policy is to leave such decisions up to the
local government, the local government unit is empowered to regulate the
collection and disposal of solid waste within its borders. This decision
modified the traditional interpretation so that unless states specifically
reserve the right to set policy within local jurisdictions concerning waste
control, local government units granted broad powers over solid waste
management by a state constitution or legislation are, authorized to control
waste flow by mandate.

Glenwillow also resulted in a clearer decision on property rights as they
apply to solid waste. The court ruled that a waste control ordinance takes
nothing of value from waste haulers. The ordinance merely removes from the
hauler the ability to decide where waste is disposed. The court ruled that
this "right" is not a property right of haulers requiring protection and,
therefore, waste control ordinances do not deprive haulers of property without
due compensation.

The Akron ordinance concerned only waste generated within the corporate
limits of the City of Akron, Ohio. The court ruled that although the ordi-
nance may affect the interstate flow of recycled material, this effect is
related only indirectly to the ordinance. Therefore, a waste flow control
ordinance that controls only solid waste generated within a local jurisdiction
and not across state lines does not violate interstate commerce regulations.

Finally, the Akron ordinance was determined not to be in violation of the
Sherman Antitrust Act, since although it created a monopoly, the City of Akron
was in effect acting as an agent of the State and therefore could not be


regulated under Sherman. It was this element of the lower court decision in
Hybud that resulted in it being vacated by the Supreme Court. The state
action exemption under the Sherman Act is defined as applicable when a state,
as sovereign, imposes anticompetitive restraints as an act of government.

Such acts by the state are exempt from antitrust laws. The state action
exemption applies to subdivisions Cfor example, municipalities) only when the
subdivision is acting in accordance with a mandated state policy to replace
competition with regulation or monopoly service. The Supreme Court ruling in
Community Communications v. Boulder limited the extension of a state's
antitrust immunity to its subdivisions. The syllabus of this decision is
included as Appendix B. In order to benefit from this immunity, the subdivi-
sion's anti-competitive actions - such as an ordinance - must be pursuant to a


clearly articulated and affirmatively expressed state policy and must also be
actively supervised by the state.

Until the litigation in Hybud is resolved, it is uncertain what will be
acceptable as "clear articulation and affirmative expression" and "active
state supervision" regarding a state policy directing a subdivision to
displace competition with regulation or monopoly public service. In Akron's
case, it appears that OWDA's role in the project may satisfy these criteria
since the cooperative agreement with OWDA, a State agency, specifically
directed the City of Akron to carry out measures to ensure that all waste
generated within the corporate limits of Akron be delivered to RES. However,
for other municipalities and states, it may be necessary to amend the state
constitution, municipal charters, or existing state statutes (such as those
authorizing the formation of solid waste districts) to include specific
language authorizing municipalities to enact waste stream control ordinances
and designating or creating a supervisory agency. Alternatively, special
purpose legislation could be enacted by the state legislature on a case-by-
case basis. This approach could be difficult and time-consuming.

In summary, waste control ordinances must meet the following criteria:

1. An implementing municipality must have either power specifically
granted by the state to control waste within its borders or broad


powers over waste management within its borders and no specific
reservation by the state of the power to control waste flow.

2.	A mandate must be enacted at the direction of the state or a state
agency responsible for solid waste management in such a way as to
preclude regulation by antitrust laws.

3.	A mandate must not burden interstate commerce by directly controlling
the flow of out-of-state waste. Ordinances controlling the flow of
waste generated within the confines of an individual municipality do
not directly affect interstate commerce; moreover, the effect of such
ordinances on any interstate flow of recovered materials does not
represent a direct impact on interstate commerce.

4.	A mandate must serve the legitimate public purpose of assuring the
health and safety of the public by guaranteeing safe disposal of
solid waste.

When these criteria are met, mandated waste control often will be the
preferred method of flow control at the municipal level.

Currently, the most obvious disadvantage of mandated waste stream control
is the uncertain legal situation. It could take numerous court tests and
several years to resolve the legal issues raised in the Akron case. In the
meantime, any municipality adopting a waste stream control ordinance could be
vulnerable to costly and time-consuming litigation by opponents of the
ordinance. Consequently, it is recommended that mandates be used in conjunc-
tion with other waste stream control methods that make use of the designated
facility at least palatable, if not desirable, to waste generators and
haulers. In this way litigation can be avoided. Another major drawback to
mandated waste control is day-to-day enforcement. Enforcing a statute
requiring that waste be delivered to a specified facility is difficult,
especially if alternate disposal facilities charging lower tipping fees are
available within a reasonable distance. The threat of having a license
suspended or having to pay a fine may prove sufficient to ensure compliance;
however, a substantially lower fee at alternative sites may provide haulers
enough incentive to use those sites. In the latter case, effort must be made
to reduce the difference between tipping fees.


Under any circumstances, some provision is necessary for policing or
enforcing an ordinance. A limited, highly visible effort at the start of a
waste control program (for example, police or inspectors trailing waste
haulers) will demonstrate that the ordinance will be enforced if need be.
No other form of persuasion may be necessary to ensure compliance. Before
mandates are enacted as waste controls, the existing situation should be
studied to determine whether the mandate will achieve the desired result with
minimal dependence upon enforcement.

Another difficulty with mandated flow control concerns the scope of the
ordinance. For instance, an anti-scavenging law in San Diego preventing the
collection of bundled newspapers by any other than municipal employees was
struck down when the court ruled that in segregating the newsprint, the
generator attributed to it a certain value. If it has value, the newsprint
cannot be considered waste, and local waste ordinances have no effect.

Provision must also be made for "mixed" loads—those collected from both
within and outside of the mandated control area in a single vehicle. Unless
the mandate specifically states that "mixed loads" will be taken to the
designated facility, only that portion of the waste collected in the con-
trolled area need be disposed at the facility, a situation making enforcement
extremely difficult.

Consideration should be given to authorizing hauling unaer existing
community-oriented or sponsored source separation programs to ensure public
support for the project. Participants in these programs can be issued special
permits, allowing them to continue operations as long as all material
collected is brought to the recycling facility in exchange for remuneration at
some predetermined rate. The resource recovery facility is thereby assured of
public support, while the recycling programs continue to operate and generate
funds for community groups.

If the criteria of authority and constitutionality are met, and if issues
such as enforcement and scope of the ordinance are successfully addressed,
mandated waste control can be a very effective means of ensuring flow control.



A second means of controlling waste flow is long-term contracts with
generators/collectors of waste. The contract should be with the entity/
organization controlling the waste and preferably be written for the duration
of the bond period. A typical contract guarantees that unless a specified
quantity of waste is delivered over a specified time period to the facility,
the generator/collector will pay a. penalty. These "put-or-pay" contracts are
attractive because they are regular business tools familiar to waste manage-
ment officials, they have minimal impact upon the existing waste management
system, and they guarantee an assured quantity of waste for the facility.

Waste flow contracts can be negotiated among several parties. Usually,
this occurs between a resource recovery facility and municipalities. However,
some municipalities do not assume responsibility for collection and disposal,
allowing generators to contract directly with private haulers. The major
problems in contracting directly with private haulers are that the private
hauler does not, in fact, have control over the waste hauled and there is no
guarantee that the company will remain in operation over the length of the
contract. For this reason, long-term contracts negotiated directly between a
resource recovery facility and private haulers are not recommended.

Municipalities that contract with private haulers under a franchise
system to fulfill their public collection responsibilities maintain de facto
control over the waste stream. Under a franchise system, haulers are
"licensed" and permitted to collect waste in the area. The municipality
acknowledges that once waste is placed at the point of collection by the
generator, the waste becomes the responsibility (that is the property) of the
municipality. When a license is granted, the municipality may designate a
facility as the sole disposal site for municipal waste, thereby exercising its

police powers to assure the health, safety, and welfare of the citizens

	.-i However, there are some questions as to the

through proper waste disposal. However,

"tvine" the granting of licenses to using a particular
legal implications of tying	s

t be examined before deciding upon this option,
disposal site. Local laws muse


Owner/operators of resource recovery facilities can negotiate "put-or-pay"
contracts with municipalities for delivery of necessary quantities of MSW.
Participating municipalities would be responsible for controlling waste
generated within their jurisdictions. Once a decision was made to pursue
negotiations with individual municipalities, the designated implementation
authority would arrange contracts with the municipality to supply a given
tonnage of waste. In addition to designation of waste tonnages and penalty
provisions, the most important components of such contracts are the rate
schedule for tipping fees, usually based on processing costs, and the term of
the contract, recommended to be equivalent to the length of the bonding

The Refuse Energy Systems Company (RESCO) mass-burning waterwall plant
in Saugus, Massachusetts, has made extensive use of "put-or-pay" contracts of
this type. RESCO currently accepts waste from 13 municipalities under long
term contracts (20 years) and from two sanitation districts in Boston under
shorter-term contracts. The tipping fees charged these communities are
currently averaging about $16/ton (in 1980) and are adjusted each year.-
Calculation of the adjustment is based on 50 percent of the annual percentage
change in the local (Boston SMSA) Wage Survey Index (U.S. Department of Labor)
and 20 percent of the annual percentage change in the base property tax rate
of Saugus. This adjustment is applied to the original base tipping fee of
$13/ton for most contract communities. A more detailed discussion of the
Saugus, Massachusetts project has been included in Appendix C.

Contracts are preferably negotiated early in the planning stages of a
resource recovery facility. However, this may be difficult due to uncertain
economics, and, given the history of the industry, municipal officials may be
wary of entering into long-term agreements based upon a preliminary concept
for a proposed resource recovery system. This reluctance to enter into long-
term agreements that may benefit future taxpayers without providing immediate
savings, represents a major obstacle.

Finally, the success of contracts is dependent upon the participating
municipalities' having control over the waste they agree to deliver.


Municipalities providing their own collection services will have little
difficulty delivering guaranteed quantities of waste. Where private haulers
are responsible for collection, municipalities must enact measures to bring
collectors under municipal control. After careful analysis of existing
situations, municipalities may decide to enact mandates, implement franchise
systems, or use some other mechanism to gain control over privately collected
waste. Once this control has been achieved a municipality can enter into a
contract guaranteeing delivery of its waste.

Contracts are a very attractive method by which owners/operators of
resource recovery facilities can secure adequate supplies of MSW. Aside from
concerns about the long-term viability of contracts with private haulers,
there are two principal drawbacks associated with the use of contracts:

1.	Negotiation can be a time-consuming and complicated process.

2.	Any party contracting to deliver waste must have actual control over
the waste.

Contracts have been used previously by several resource recovery
projects. The Ames, Iowa, facility receives waste from 12 surrounding munici-
palities under 25-year commitments, with the net costs of disposal being
assessed on a per capita basis. Other facilities employing contracts include
the CEA facility in Bridgeport, Connecticut, and the Saugus, Massachusetts


Incentives/disincentives seek to attract waste to a resource recovery
facility by making project economics associated with using the facility more
favorable. To be effective, these methods must somehow make it more attrac-
tive for haulers to dispose of the MSW at the facility than at alternate


Incentives included in this category are:

1.	Direct financial support or tax incentives to lower tipping fees.

2.	Stricter enforcement of land disposal regulations to raise the cost
of competition

3.	Limiting of competition by closing alternate disposal sites and
limiting new licenses.

These methods are attractive because, unlike mandates, they aim to
attract waste through the existing waste management framework. MSW moves
through the system in the most economical way possible as collectors,
transportersj and waste disposal site operators attempt to maximize profits.
Incentives attract waste to a resource recovery facility by affecting the
costs incurred by collectors and transporters of MSW.

The "pre-paid user charge" is used extensively in the United States to
finance wastewater treatment plants, and is becoming of increasing interest to
resource recovery projects. Using this approach, a local government unit
directly assesses solid waste generators for solid waste disposal. These tax-
like revenues are used to support safe and sanitary disposal of the waste.
Private haulers serving generators covered by the user charge can dispose of
collected waste at a designated site for no additional charge. Since disposal
charges have already been paid, generators would pay the hauler for collection
and transport services only. Equity is achieved by basing the assessment on
waste generation rates; those generating larger quantities of waste pay larger

The consideration that an additional tax on the general population may
not be well received is one problem associated with this approach. Public
opposition may be reduced to a degree by the usually small size of the
additional burden. Moreover, if the facility is justified, a comprehensive
public awareness program describing the program, the costs and benefits of
resource recovery, the facility itself, and the need for a small user charge
will, in many instances, reduce public opposition.


A second concern is that a zero tipping fee will attract private haulers
who collect from areas not subject to the user charge. Waste quantities
disposed at the facility would increase, but at the expense of those paying
the user charge, who would be subsidizing waste disposal service for
generators in untaxed areas. Even a strict licensing and inspection program
combined with monitoring of private hauler collection routes may not be able
to prevent this. Therefore, user charges may not prove feasible for some
municipalities located within a multiple-jurisdictional area.

Although a user charge approach to waste control does not guarantee that
waste will be delivered to a facility, since there are no legal or contractual
requirements, a zero tipping fee should provide sufficient incentive to assure
Che flow of available waste to the facility.

In order to ensure a supply of waste for an incinerator where tipping
fees were substantially higher than alternative disposal sites, Montgomery
County, Ohio, enacted an ordinance directing waste to that facility. However,
the State Supreme Court ruled that the ordinance was unconstitutional since
the County did not have State authority to enact such legislation. Faced with
this loss of revenue, the County assessed a user charge of property owners and
businesses and eliminated the tipping fee. The user charge was the subject of
a subsequent suit but was upheld by the court as a means of raising revenues
necessary to support safe and environmentally sound disposal.

Another incentive is to raise the cost of competition by strictly
enforcing environmental regulations. Many land disposal facilities currently
operating in the United States do not meet the criteria of the Resource
Conservation and Recovery Act and therefore, as "open dumps", must either
upgrade their facilities or close. The costs incurred by these sites in
upgrading will raise tipping fees at the site. Where the rise is substantial,
the cost of using the resource recovery facility may become competitive with,
or less than, landfill tipping fees. Thus, waste flows to the facility due to
favorable economics. The major difference from the user charge is that the
subsidy is provided by generators indirectly in the form of increased waste
disposal fees paid to private haulers, who are charged a higher tipping fee at
the facility.


In order to use this type of incentive, the organization sponsoring the
facility must be in a position to influence those responsible for environ-
mental quality. Since most environmental regulations are enforced by state
agencies, influence must be at that level. Local governments can wield
considerable pressure through zoning ordinances. Lobbying on the state level
for strict interpretation and enforcement of existing environmental regula-
tions can also be very effective, especially if bipartisan pressure can be

The Lakeland, Florida, facility currently under construction is a good
example of environmental regulations providing a disincentive for utilization
of existing disposal sites. Lakeland expects few problems with waste stream
control, in part because over half of the waste needed is collected by the
City, but also because using the facility is economical for local haulers.
Besides shortening the hauling distances, the facility will charge a
competitive rate, somewhere below $10/ton. The existing landfill had charged
a tipping fee of $6/ton until it was forced to upgrade to meet environmental
regulations. The new tipping fee is expected to be $10 to $12/ton, making the
planned resource recovery facility economically competitive.

Still another means of limiting competition is for the implementing
organization to purchase those disposal sites in direct competition with the
facility. The sites can be used by the resource recovery facility to dispose
of residue or waste unacceptable to the facility. When more than a few sites
are involved, outright purchase of all may prove economically infeasible.

Such issues as the extent of needed remedial actions and estimated remaining
capacity must be addressed. Nevertheless, where few sites are involved, this
option may prove feasible. The Connecticut Resources Recovery Authority
(CRRA) purchased several landfills in the Bridgeport area for residue dis-
posal, and the proposed Rhode Island project will benefit from state ownership
of area landfills.


Mandates are legislative acts carried out by authorized government units
directing the flow of waste to designated disposal facilities. Mandates are


relatively easy to implement because they create monopolies and need not
depend upon competitive tipping fees to ensure delivery of all wastes
generated in an area to the designated facilities. The implementing
organization must be certain of its authority to enact a waste control
ordinance, and the ordinance must not conflict with any statutory or consti-
tutional provisions. In order to avoid violation of antitrust laws, it
appears that the involvement of state government and/or state legislation may
be necessary. Mandates can be effective methods of controlling waste flow on
the municipal and state levels, and in many instances are the preferred means
of ensuring waste stream control. The major disadvantages of mandated waste
flow control are the potential for costly and time-consuming litigation and
the need for effective enforcement.

Contracts can establish agreements between the owner/collector of the
waste and the resource recovery facility to guarantee an adequate supply of
MSW. Contracts assume that the owner actually has control over the waste.

This usually precludes contracts with private haulers. A plant's anticipated
tipping fee must be competitive with the fees of disposal alternatives for the
contract to be attractive to haulers. Negotiation of contracts is usually
time-consuming because of the complexity of the issues. Moreover, contracts
may have to be negotiated among several parties to ensure control over an
adequate supply of waste.

Incentives/Disincentives are waste control methods that use economic
means to attract waste to resource recovery facilities. The success of these
methods depends upon the facility's tipping fee being competitive with those
of existing land disposal facilities. Either subsidizing the facility or
increasing the cost of using alternative disposal sites is necessary for the
incentive/disincentive approach to be successful.




Experience indicates that successful waste control strategies are those
specifically designed to accomodate existing local conditions. Each waste
control method discussed in Chapter 2 has associated limits restricting its
use. Before a waste control strategy can be developed for a given area, the
existing situation must be carefully studied.

The advantages and disadvantages of various waste control strategies in
several narrowly defined situations are discussed in this chapter. Strategies
are recommended for achieving waste stream control in certain situations given
the type of implementing organization and legal, economic, and political
issues involved. The types of organizations considered are:

1.	Single municipality

2.	Regional/multijurisdictional entity

3.	State agency

4.	Interstate organizations

The following discussion is not designed to replace comprehensive
analysis of existing situations as a prerequisite to development of waste
control strategies. Rather, the objective is to describe individual control
methods and the issues associated with their use in specific institutional
settings. Summaries of several resource recovery projects are presented in
Appendix C to illustrate the variety of approaches that have been taken to
solve the problem of waste stream control.


"Single municipality" refers to that level of local elected government
that has public health responsibility for solid waste disposal, and includes
politically independent and self-contained units of local government, for
example, cities, towns, and incorporated villages, and can include counties
depending upon levels of responsibilities. Not included in this category are
solid waste authorities created by local or state governments. Single


municipalities are primarily concerned with waste collected, transported, and
disposed by private haulers, since waste collected by municipal services is
already under their direct control.

Private haulers are contracted to collect and haul waste through two
principle mechanisms:

1.	Contract or franchise system where the municipality contracts with or
licenses private haulers to collect waste generated within its

2.	Independent system where generators contract directly with private
haulers for collection, transport, and disposal services.

The type of mechanism used to secure private collection service influences the
success of waste control methods.

3.1.1 Contract or Franchise Systems

Under the franchise system, municipalities enter into contracts with
private haulers for collection and disposal services, or licenses collection
in the area. The duration of these contracts or licenses is usually less than
5 years, whereupon the municipality relicenses haulers or relets the contract
to the lowest bidder able to provide the requested service.

In arranging for the private service, the municipality is acknowledging
responsibility for collection and disposal of waste generated within its
borders. The process gives the municipality implicit control over the waste.
When a contract is rebid, the municipality reserves the right to choose a
disposal site for the waste. Private haulers not agreeing to this stipulation
are prohibited from bidding on the contract. Since the contracts usually
include rate increases based on disposal site tipping fees, the municipality
in effect subsidizes its own facility; under the contract, tipping fees paid
at the site by private haulers are charged by the haulers to Che municipality.
The cycle is complete when the funds reappear as tipping fees.


There is still some question as to the legality of tying collection
licenses to the use of a single disposal site. These tying arrangements
should be carefully examined before being implemented. Franchise systems can
be implemented by most municipalities. The authority for municipalities to
contract solid waste collection and disposal falls under police powers:
control ensures the health and safety of the populace.

3.1.2	Independent System

Under the independent system, generators of solid waste contract directly
with private haulers for collection and disposal services. In the absence of
all control mechanisms, waste is collected, transported, and disposed in a
manner that maximizes the profits of haulers. In this situation, municipal
officials should use mandates, and/or incentives to direct the flow of waste.

Since mandates can be used only by recognized units of government with
the authority to enact legislation, it is essential to determine which unit of
government has this authority. Criteria for determining authority to enact
mandates are described in Section 2.1.

3.1.3	Recommended Strategy

For single municipalities attempting to regulate private collection
operations, the use of mandates is recommended, along with incentives, if
necessary, to make the facility more competitive. The ordinances themselves
must be narrowly defined to avoid conflicts with constitutional and antitrust
laws and to successfully address such issues as scavenging, definition of
"solid waste", proper procedures for mixed loads, and source separation.

The only significant obstacle to mandated waste control is enforcing the
ordinance. Difficulty with enforcement will increase in direct proportion to
difference between tipping fees at the resource recovery facility and those at
alternative disposal sites. If the difference is anticipated to be large, an
incentive reducing the gap can be offered. The municipality must decide
whether to support the facility through general funds to reduce the tipping
fee to a competitive level, to force an increase in cost to the competition,


or to enact a user fee and remove Che tipping fee altogether. If the last
course of action is chosen, enforcement shifts from trying to ensure a
sufficient flow of waste to the facility to trying to prevent the disposal of
outside waste at the facility. In any event, by reducing the tipping fee to at
least a competitive level, the threat of enforcement should be sufficient to
ensure the flow of waste to the facility.

This preferred strategy has several advantages:

1.	Once authority is determined, the mandate is easily enacted.

2.	Using incentives to make the facility competitive alleviates the
problems of enforcement.

3.	Unlike contracts, mandates require no time-consuming negotiations.

4.	A mandate can be enacted early in the planning process to allow
appropriate sizing of the facility.

5.	Securing the waste stream early increases the attractiveness of the
bonds used to support construction of the facility.

For single municipalities sponsoring their own resource recovery facili-
ties, the use of mandates, in conjunction with incentives where necessary,
will ensure control of the flow of privately collected waste.


Regional/multijurisdictional entities are solid waste management organiza-
tions covering an area within one State and including several municipalities.
Historically, these organizations have taken two different forms:

1.	Interlocal regional commissions created by several adjacent munici-
palities interested in resource recovery that pool their available
waste streams to support a facility, thereby taking advantage of
economies of scale.

2.	Private ventures, organized by private firms, to create regional
resource recovery facilities to dispose of waste from several
adjacent communities. The private venture either benefits from any
profits realized from facility operation or shares the profits with a
local community.


The major differences between these regional/multijurisdictional entities
and state-authorized regional authorities like the Connecticut Resources
Recovery Authority (CRRA) are their powers over legislation and their ability
to secure funds for operations. Limits to the capabilities of regional
commissions have a dramatic effect on both the waste control methods they can
use and the preferred strategies to control waste flow,

3.2.1 Interlocal Regional Commissions

Multiple jurisdictions pooling their resources usually create a
semipublic commission, the responsibilities, autonomy, and authority of which
depend upon the implementing charter. Municipalities enter into an interlocal
agreement creating the commission to coordinate all activities necessary to
successfully implement a resource recovery program. Depending upon the scope
of the interlocal agreement, the commission may have extensive powers over
bonding, siting, contracting, management, and operation of a facility. The
issues raised in the use of each waste control method (i.e., mandates,
contracts, and incentives) by these Commissions will be discussed.

The legal authority to mandate waste flow from the communities to the
identified site exists only if:

1,	The individual towns have the authority to enact this type of
ordinance (see discussion in Section 2.1); or

2.	These powers are transferred from the municipalities to the
commission or authority.

Regional commissions do not have the power to enact mandates. The
Glenwillow decision concerned a local, intrajurisdictional waste control
ordinance; there is no precedent for interjurisdictional waste control
ordinances based on transfer of powers from municipalities to regional
commissions. Among the criteria for such ordinances are the following:

1.	The ordinance must serve a legitimate local purpose.

2.	The ordinance must be sufficiently related to a legitimate objective
of local governments.


3.	The ordinance muse not violate antitrust laws, i.e., it must be
consistent with a clearly articulated and affirmatively expressed
state policy and be actively supervised' by the state.

4.	The mandate, presumably directing waste to a facility located outside
the community where it is generated, must not conflict with any
state's right to control interjurisdictional waste flow.

These issues preclude the use of mandates by regional commissions.

Interlocal regional commissions can negotiate contracts with member
jurisdictions on a "put-or-pay" basis. The contract requires that individual
municipalities deliver a specified quantity of waste to the facility or pay a
penalty based upon the overall shortfall. CRRA used this approach for its
Bridgeport, Connecticut, project where long-term commitments to supply waste
were obtained from nine municipalities.

The use of "put-or-pay" contracts removes the responsibility for control-
ling waste flow to the municipality level. If the municipalities provide
public collection services or use a franchise system, control at the municipal
level has already been achieved. However, if substantial portions of the
waste are collected by private haulers, a waste control strategy must be
implemented by the municipality (see discussion in Section 3.1.2).

It is difficult to determine the ability of interlocal regional commis-
sions to use incentives to control waste flow. In general, interlocal
regional commissions by themselves have no taxation powers; therefore, they
cannot impose user charges. Moreover, commissions cannot use general
operating revenues to support facilities because their budgets usually
cannot encompass such an expense. While the commission may have some
influence over enforcement of environmental regulations in the area, this
influence is insufficient to guarantee the rise of disposal costs of
alternative sites. Use of this method depends on state support.

These commissions can only use incentives through close cooperation with
member municipalities. Municipalities can enact user charges and can channel
the funds to the facility through the commission. Municipalities can also


divert general operating funds to the commission which may use these funds
either to support the facility directly or to purchase competing disposal
sites. Finally, the member municipalities can combine their political power
to influence state policy and the enforcement of environmental regulations.

"Put-or-pay" contracts represent the most attractive method for
controlling waste flow available to interlocal regional commissions. Once
contracts are signed, the commission is used to coordinate implementation of
needed waste control methods on the municipal level. The commission can
coordinate local efforts to influence enforcement of environmental regulations
affecting alternative disposal sites, or can subsidize zero tipping fees by
using funds collected as user fees by municipalities. Using contracts returns
the responsibility for waste stream control to the municipal level, where
strategies are readily available.

Close cooperation by all parties is essential to contract use. Necessary
interlocal coordination of funds, siting studies, and other management activi-
ties will suffer without it. Indeed, without close cooperation, interlocal
regional commissions face almost impossible obstacles for project imple-
mentation. For example, in 1967, when the landfill serving Saugus,
Massachusetts, was closed for health reasons, the town and eight other
communities formed the North Shore Waste Disposal District (NSWDD) to develop
a regional solution to the waste disposal problem. Even with active support
from General Electric, which eventually purchased all steam from RESCO, the
NSWDD could not organize a regional waste-to-energy project, although all the
basic conditions that helped establish RESCO prevailed. The disagreements
revolved around taxation, road use, facility siting, funding, and facility

3.2.2 Private Ventures

The only means of achieving waste stream control available to private
ventures is to cultivate relationships with several municipalities so that
activities can be coordinated. The private venture then enters into
"put-or-pay" contracts with the municipalities, and the municipalities take
responsibility for guaranteeing adequate supplies of waste.


The RESCO facility in Saugus, Massachusetts, is an excellent example of a
private venture sponsoring a resource recovery facility. RESCO depends upon
numerous "put-or-pay" contracts to ensure delivery of sufficient quantities of
waste. The situation in Saugus before the establishment of RESCO was unique:
lack of available landfill capacity, no suitable alternative landfill sites,
available market, and existing high energy costs and high MSW disposal costs.
The RESCO situation proves that under the right conditions, private ventures
can successfully sponsor resource recovery facilities. The private venture
was also helped along by timely state assistance in obtaining necessary
permits and cooperation.


State agencies sponsoring resource recovery activities on a regional or
statewide basis can employ all waste control methods to develop flow control
strategies. The preferred strategy depends upon the agency's level of
authority over legislation, funding, and state policy. For the purposes of
this discussion, two levels of authority are assumed:

1.	An agency with full authority has complete control over waste manage-
ment within the state, down to and including the municipal level; it
controls funding and enforcement of environmental regulations, and
has bond authority.

2.	An agency with no authority has control over waste management in the
State down to but not including municipalities, depends upon other
units of state government for funding, and has limited influence over
environmental regulations.

3.3.1 Agency with Full Authority

Agencies granted full authority over solid waste management and resource
recovery within a State can make'use of all methods to achieve control of
publicly and privately collected waste.

State agencies with authority to enact mandates on the municipal level
can use these mandates to direct waste to a regional facility so long as
constitutional provisions are not violated. Statewide mandated flow control
programs much like that existing in New Jersey must consider interstate


commerce regulations. However, requesting a mj. ,

, . „ . .	g declaratory judgement,"

essentially a legal decmon preceding enactment of an ord i

this issue early in the planning process. Enfnr	nance, can resolve

only difficulty anticipated with regard to state	^ ^ mandate iS the

® ^ LU State flow mn t 1 J-

uuw control ordinances.

Fully authorized state agencies can also make use of "put-or-pay"

contracts with municipalities to assure deliv»>.„ r

etivery of necessary suppiies of

waste if the municipalities provide collection services n,

. - ,	,	.	vices. The contracts can

be reinforced with incentives to ma,e the contract attractive to municipal

officials. Waste flows to the facility, and the municipalities

disposal capacity for the foreseeable future A®*- h	8uaranteed

, , ..	.	'	' the use of contracts is

not recommended to control privately collected waste.

State agencies with control over taxation ,•

u	n C3n lmP°se user fees upon

generators to be served by the proposed facilitv

, . , .	y' 1501:11 Private and public

collection vehicles will be attracted to the faciw*,, v

racility where the fee is


State agencies .ay find it difficult co „se	^ ^

support a facility if the facility provides disposal service ^ a ^ ^
of the state. State legislators representing other

regions may oppose using

state funds fro. taxes imposed upon all constituents to provide services for
citizens in one region (for example, state legislators from western
Pennsylvania may object to using public funds to support a facility serving
Philadelphia). While an added tax on the citizens served might not prove
offensive to most legislators, the use of revenues generated fro. State taxes
to benefit a small portion of the citizenry may evoke strong opposition.

State agencies can use disincentives to attract waste to a regional
facility. Their position a, units of state government should allow influence
on enforcement of environmental regulations, resulting in raised tipping fees
charged by competing sites. In addition, influence over „ev ,lte petmittin8
could be used to reduce competition and increase the probability that waste
would flow to a regional resource recovery facility. Ultimately, a state
agency can assume direct responsibility for solid waste management - and thus


control of the waste stream - through purchase of the competing landfills.

This approach was taken by the Rhode Island Solid Waste Corporation by
purchasing the major landfills in the State that will become the disposal
sites for residue and unprocessable waste when the planned resource recovery
facility comes on-line.

Fully empowered state agencies can make use of either contracts with
municipalities or mandates affecting both public and private haulers to
control waste flow. The effectiveness of mandates and contracts is dependent
on the facility being economically attractive to waste haulers. State
agencies can subsidize a facility through user fees and make a facility
competitive, or they can reduce competition by purchasing alternate sites and
influencing the enforcement of environmental regulations.

3.3.2 Agency with No Local Authority

Agencies with no granted powers to enact mandates on the local level can
sometimes control the flow of waste once the waste crosses the border of the
municipality where it was generated. This is the case in Connecticut where
CRRA can determine the disposal site for waste leaving a municipality but
cannot interfere with the right of a municipality to develop a disposal
facility within its borders.

The agency may choose to lobby for a change in its charter to grant it
the power to mandate flow control. Any such attempt, however, can be expected
to meet heavy opposition from local legislators. Without very specific
authority to control waste, these types of state agencies should not attempt
to use mandate as flow control measures.

Without the power to enact mandates, state agencies with little local
authority must resort to using contracts and/or incentives/disincentives to
reduce the cost of using a facility and to attract waste. Contracts between
the agency and municipalities should be signed as early as possible after a
firm price has been set. When negotiating with municipalities, the state
agency should emphasize the assured disposal capacity of the facility and the


benefits of safe disposal and recovered materials. Contracts with private

haulers are not recommended as the sole means of controlling privately hauled

Using incentives may present some difficulty to these agencies, since
some level of state funding will probably be necessary. Environmental regu-
lations may be enforced more strictly, depending upon the level of authority
within the state agency. The Connecticut Resources Recovery Authority is an
example of a state agency with limited authority. CRRA had to sign "put-or-
pay" contracts with surrounding communities to secure adequate supplies of



Interstate agencies sponsor resource recovery facilities designed to
process waste generated in a given geographical region including two or more
states. In these instances, the agency s latitude in choosing a waste control
strategy varies, depending upon whether the waste is generated within the same
state as the facility is located, or whether the waste will cross state bound-
aries when it is transported to the facility. Interstate commerce regulations
as well as other legal and political considerations become more significant
with the transportation of waste across state lines, limiting agencies'
options for waste control.

Interstate agencies usually are established according to two types of
implementation strategies:

•	Two adjacent communities located in different states pool their
resources for a regional resource recovery facility that processes
waste from both states, and create an interstate regional commission.

•	A private venture promotes a regional resource recovery facility and
recommends it to a town or municipality, but the proposed facility
needs waste generated in another State within the region to operate at
design capacity.

The waste control methods available to each organization, depending upon
whether the waste is generated within or outside the state in which the
facility is located, will be discussed in the following sections.


3.4.1 Interstate Regional Commissions

In this	discussion, these commissions are assumed to represent several

towns within	adjacent counties located in neighboring states. These towns

have decided	to coordinate planning efforts for resource recovery and to take

advantage of	economies of scale.

The use of mandates is limited to those municipalities having the
authority to enact this type of legislation (see discussion in Section 2.1)
and located within the same state as the proposed facility. The municipality
enacts an ordinance directing the flow of waste Co the proposed facility when
it has been completed, and enters into a "put-or-pay" contract with the inter-
state regional commission.

Mandates cannot be enacted by municipalities located in a state other
than that of a proposed facility. Interstate commerce regulations must be
considered, and ordinances directing that waste cross state lines for disposal
are likely to be struck down. Moreover, the state action immunity exempting
municipalities from antitrust law may not be extended if the municipality
attempts to force transportation of waste across the state line.

Interstate regional commissions can use contracts to control municipally
collected waste. by creating the regional commission, the municipalities have
shown at least an interest in, if not an actual commitment to, resource
recovery which should facilitate negotiation of contracts. The use of
"put-or-pay" contracts does not raise any legal or political issues and is
an easy way to assure waste stream control.

The use of contracts by towns and municipalities to control privately
hauled waste, thus removing the responsibility for waste stream control from
the public regional commission, is more complex. Municipalities located in
the same state as the proposed facility can use the incentives available to
single municipalities, employing the independent system (Section 3.1.2). How-
ever municipalities in a state other than that of the facility may encounter
difficulty in using mandates and incentives to bring private haulers under


control. As discussed previously, mandate?	j • , .

f wuaiy, manoaces cannot be used Ln this situation

because of conflict with interstate commerce regulations, and incentives to
support an out-of-state facility through either taxes or general operating
funds may be opposed by citizens and/or politicians. Unless the out-of-state
municipalities can obtain local control over privately hauled waste, contracts
are not an option for waste control.

Municipalities served by an interstate regional commission can support

the use of incentives by either enacting user charge systems and transferring

the funds received to the commission or can use other funding to reduce

tipping fees. Funds have previously been transferred across state lines,

notably by bridge commissions that receive funds from contiguous states. The

only possible obstacle to transferring funds across state lines is public and

political opposition, but if citizens appreciate the need for the facility,
opposition should be minimal.

Whenever possible, interstate regional commissions should use "put-or-
pay" contracts to control waste flow. Transferring the responsibility for
waste stream control to the individual municipalities and towns, as is being
done in the New Hampshire/Vermont Solid Waste Project, greatly simplifies the
waste control process. Municipalities providing public collection services
already control waste flow. Private collection services can be controlled by
mandates (where the waste does not cross state lines) or by incentives
Careful planning can avert public opposition to interstate transport of waste.

The experience of New Hampshire/Vermont Solid Waste Project proposed for
the bistate region surrounding Claremont, New Hampshire, illustrates the
complexities of interstate programs. Twenty-six regional communities,
anticipating a disposal capacity crisis as local landfills became filled,
together formed the New Hampshire/Vermont Solid Waste Project and received
funds under EPA's Urban Grant Program. To provide additional support,
communities in New Hampshire channeled funds through Sullivan County, New
Hampshire, while Vermont municipalities participated through the Southern
Windsor County Regional Planning and Development Commission. Some of the
problems addressed by this coalition are described below.


The only regional entities with the necessary legal and financial ability
to implement a regional resource recovery program would be solid waste
districts—one in Vermont and one in New Hampshire. The formation of new
districts must conform to all existing statutory requirements. At present,
Vermont requires an initial joint survey committee and New Hampshire a
regional refuse disposal planning committee to draft district agreements.

Since three representatives of each participating municipality are required
for each committee, the Vermont committee would comprise 33 members, and the
New Hampshire committee, 45 members. Once the district agreements have been
drawn up, they would be voted on by the citizens of each participating

The kind of interstate cooperative program proposed by New Hampshire and
Vermont requires the approval, first, of both state legislatures and, second,
of the United States Congress. A bistate compact, establishing cooperative
arrangements (including financial support) between the two states for
financial and other for the management of an interstate disposal system, has
been approved by both state legislatures and is currently being considered by
the U.S. Congress. By the time Congressional approval is given it will have
taken at least 2 years to implement this compact.

Interstate regional commissions seeking to establish similar interstate
projects can anticipate confronting similar problems.

3.4.2 Private Bistate Ventures

Private ventures are severely limited in their options for waste control.

Such ventures have no authority to enact mandates; they usually have
insufficient resources to make the proposed facility competitive; and unless a
facility is competitive, contracts cannot be negotiated to ensure a supply of
waste adequate to keep the facility operating at capacity.

Private ventures must therefore convince neighboring communities of the
need for resource recovery. The weight of public opinion can influence
creation of a regional commission including members of the private venture in


kev positions, without the support of such root/in*? 	*

y	L suc" regional commissions, private

ventures have very few means of controlling waste flow other than using
secured funds to make the facility competitive.


The simplest way for any organization to achieve waste stream control is
to allocate this responsibility to the municipal level fay entering into "put-
or-pay" contracts. Municipalities can direct waste flow either by local
ordinances or through cooperation with state agencies, and can provide the
incentives necessary to attract privately hauled waste. Further, municipali-
ties have institutional and political frameworks already in place to support
resource recovery efforts. Put-or-pay" contracts place the responsibility

for waste stream control at a level where control is easiest to achieve." the
local government.

Although interstate agencies face serious problems-creation of public

interstate agencies is itself extremely complex and time-consuming—private

ventures must overcome serious financial and legal impediments to achieve

waste stream control. Interstate regional situations require careful study,

and initiation of bistate solid waste authorities must begin as early in the
planning process as possible.

in general, government unit, fate less complex and severe problems in

attaining waste stream control than those confronted by private organizations.

The level of government, local or state, empowered to enact mandates and able

to provide incentives should be assigned the responsibility for waste stream




Securing an adequate supply of MSW is only one of several elements
important to determining the success or failure of a resource recovery
project. Other important criteria are:

1.	Availability of markets for recovered energy and materials

2.	Reliability of technologies

3.	Political and environmental acceptance

4.	Economic feasibility compared with cost of alternative disposal

5.	Availability of financing

6.	Public acceptance of the project.

The success of a project depends upon careful analysis of and attention to
each of these areas.

Comprehensive planning, initiated at an early stage and conducted
properly, can ensure adequate supplies of waste for a facility. Guaranteeing
waste supply early in a project has several advantages. For example,
operating a facility at capacity improves the financial outlook of the
project and increases the attractiveness to investors of facility bonds.

There are several important considerations in planning to achieve waste
stream control. For example, a facility should be designed to process a
given, assured quantity of waste. Trying to secure sufficient waste to supply
the requirements of a facility with a preconceived design capacity complicates
waste stream control efforts.

Government units with authority to control waste flow should be included
in the planning process as early as possible to take advantage of their
ability to overcome problems associated with achieving control. If a facility
is economically competitive, contracts or mandates should be used to obtain


legal control of waste quantities. This assurance of supply increases the
attractiveness of the project to investors.

There are four basic steps to achieving waste stream control:

1.	Analysis of Existing Situation. The current waste management system
should be studied to determine:

-	public and private collection and disposal practices
public and private collection and disposal costs
alternate disposal options

potential for source separation and recycling
waste generation rates.

2.	Institutional Analysis. State constitution and local rules and
regulations should be studied to determine the levels of government
that have:

-	power to enact waste control mandates

authority to levy taxes (user fees) for disposal services

authority to enforce environmental regulations, including
permitting of solid waste disposal sites

control over economic resources sufficient to support a facility.

3.	Waste Control Strategy Development. A waste control strategy can be
designed specifically to address the local situation, based on the
analysis of the existing situation and the scope of authority of the
implementing organization. Again, the organization identified as
able to implement waste control most easily should be included in the
planning process.

4.	Waste Control Strategy Implementation. Mandates should be enacted,
contracts negotiated, and/or procedures to provide incentives
developed. Once the waste control strategy is underway, facility
design, financing, and construction phases can begin.


Operators within the exi^rfro
...	e management system arid representatives

of the private sector are crucial m eh® «,

the success of any resource recovery

project. Discussions with haulers and oth„3 in the ^
community throughout the pUming ptocess ca„	ln

achieving waste stream control and r3n j,0i

n help ensure cooperation in implementing

the program.

Achieving control over waste stream flow does not guarantee the success
of a facility; however, it improves a facility's chances for success and
increases the financial attractiveness of the project. Careful planning in
the early stages of project development can help ensure that waste stream
control is achieved in most situations.




Antitrust. Opposing or concerned with the regulation of trusts, cartels, or
similar business monopolies. These anti-competitive activities are
controlled under the Sherman Act.

Contract. A waste stream control method involving a contractual agreement for
the delivery of a specified quantity of waste between a facility owner or
operator and the party having control over that waste (usually a

Contract Collection. Collection service provided by a private firm operating
under a contract with a governmental unit. Under this approach, the
contractor owns the equipment and must meet all performance criteria
established by the contract. Such contracts are usually awarded on the
basis of competitive bidding.

Franchise Collection. Collection service provided by a private firm operating
under an exclusive franchise whereby it is licensed to operate alone in a
given area. Typically, each residence served is billed directly by the
private firm. A franchise may or may not be awarded on the basis of
competitive bidding.

Incentive. A waste stream control method that involves actions counteracting
existing economic conditions so as to make delivery of waste to the
desired facility more attractive to waste generators and/or haulers.

Mandate. State legislation or a local ordinance directing (or authorizing an
agency to direct) that all waste generated in a given area be delivered to
a designated disposal facility.

Mixed Load. A load of refuse that has been collected from residences or
commercial establishments in two or more political jurisdictions.

Municipal Solid Waste. The combined residential and commercial waste material
generated in a given municipal area. The collection and disposal of these
wastes are usually the responsibility of local government.

Put-or-pay. A contractual provision requiring a party (usually a

municipality) to deliver a specified quantity of solid waste during a
specified time period to a designated facility or pay a penalty.


GLOSSARY (Continued)

Refuse-derived Fuel (RDF). A solid fuel obtained from municipal solid waste
as a result of a mechanical process, or sequence of operations, which
improves the physical, mechanical, or combustion characteristics compared
to the unprocessed solid waste.

Resource Recovery. The extraction and utilization of materials and/or energy
from a waste stream.

Solid Waste. Discarded solid materials.

Source Separation. The segregation and collection of individual recyclable
components before they become mixed into the solid waste stream.

Waste Flow/Waste Stream Control. Authority or influence to regulate, direct
or otherwise ensure that solid waste generated within a given area is
disposed of at a designated facility.

Waste Stream. A general term used to denote the waste material output of an
area, location, or facility.



Discussion of Legal Issues Raised by the
Akron, Ohio, Waste Control Ordinance


Akron's Recycle Energy System (RES) is an RDF/dedicated boiler system
with a capacity of 1,000 tons per day (TPD). A refuse-derived fuel (RDF) is
prepared from MSW and burned in semi-suspension in a boiler specifically
designed for (or "dedicated" to) that purpose. During the winter of 1980-81,
the steam produced by the boiler supplied 100 percent of the demand of a steam
loop serving downtown Akron.

Recent problems, particularly with the pneumatic handling systems, have
required a major project reorganization. Tri-Cil, Ltd., operator of a
facility in Hamilton, Ontario, has replaced the original operator (Teledyne
National) and plant modifications are being made, including the removal of all
pneumatic separation and conveying equipment. The project was designed to
serve the City of Akron, Ohio, and Summit County, Ohio, where approximately
1,300 tons of municipal solid waste (MSW) per day is generated. This waste is
collected by City-owned and operated vehicles, private haulers under contract
to the City, and private haulers directly under contract to commercial and
industrial generators.

In the late 1960s, officials of Akron and Summit County foresaw a
shortage of disposal capacity based upon two factors:

1.	The introduction of stringent environmental regulations placing
substantial limits on the location and operation of future waste
disposal sites.

2.	The rapid filling of the only sanitary landfill in the County.

City and County waste management officials responded by initiating studies of
alternatives to land disposal. In the meantime, the City opened a new land-
fill on land it owned in the County. Lawsuits filed by nearby residents
resulted in an agreement that the new landfill would be operated for a maximum
of 5 years, with a 3-year extension if site operations were carried out in
accordance with all applicable regulations.


In 1971, Ohio Edison petitioned the Public Utilities Commission of Ohio
(PUCO) to abandon its steam heat system in Akron for financial reasons. Ohio
Edison, faced with the need for substantial new capital to meet increasingly-
stringent air pollution requirements, maintained that operating the system was
an economic burden. PUCO denied the petition.

Also in 1971, a feasibility study of a waste-to-energy system was
completed. The City's administration took the report under advisement in
1972, and in November the City Council passed a resolution inviting proposals
from engineering firms interested in the project. In April, 1973, a consult-
ing engineering firm, Glaus, Pyle, and Schomer, was retained to design a
"Recycle Energy System" (RES). In December, 1974, plans and specifications
were finished and bids on construction contracts were solicited. By February,
1975, bids on all construction contracts had been received.

Beginning in March, 1975, the City bond counsel and other financial con-
sultants began preparing plans to finance the project. One element recognized
as crucial was obtaining sufficient quantities of MSW needed to supply the
specified quantity ana quality of steam over the bond period. By mid-1975,
underwriters informed the City that the proposed RES bonds were not market-
able. The City then turned to the Ohio Water Development Authority (OWDA) to
finance the project. OWDA agreed, and construction contracts were let by
September, 1975.

In November, 1975, OWDA determined that since the City could not secure
the OWDA bonds from its general funds, the financing plan had to be restruc-
tured. Dillon, Read, and Co. were retained in 1976 and agreed to head a new
underwriting team to purchase and resell the OWDA's RES bonds. The refinanc-
ing arrangement made the bonds more marketable by renegotiating the steam
contracts to provide stronger long-term guarantees. Under this arrangement, a
$10 million project contingency fund was created to cover cost overruns. The
contingency fund comprised $5 million from Akron general obligation bonds and
$5 million from the County's general obligation money. Teledyne National was
hired to operate the facility in November, 1976, and construction began in
December of the same year.


To secure refinancing, the City, the County, and the OWDA entered into a
cooperative agreement. The cooperative agreement addressed two very important

1.	Neither the City nor the County would own or operate another MSW
disposal site if OWDA determined that such activity would prove
detrimental to the RES project.

2.	"For the Term of this Agreement, the (City of Akron) shall require
that all collectors and haulers of solid waste within the (City of
Akron) be licensed, . . . and all such licenses shall provide that
all collectors or haulers of solid waste shall dispose of all solid
waste generated within the corporate limits of the (City of Akron)
which is acceptable for disposal by the project to be delivered to
the project for disposal . . [Section 5.5(1) of the Cooperative

On October 4, 1976, the Akron City Council passed an ordinance requiring that
all waste generated within the city limits of Akron be taken to a place
designated by the proper city official. The ordinance was enacted to fulfill
the obligations set forth in the cooperative agreement.

Lawsuits were brought against the City of Akron by waste haulers, local
landfill operators, and recyclers on the grounds that the ordinance was
unconstitutional and violated antitrust laws. In 1979, the ordinance was
upheld by the U.S. District Court, Glenwillow Landfill, Inc., et al., v. the
City of Akron, 485 F.Supp. 571 (N.D. Ohio 1979), and the suit dismissed. On
subsequent appeal to the U.S. District Court of Appeals, Sixth Circuit, the
decision was reaffirmed in July, 1981, Hybud Equipment Corp., v. the City of
Akron, 654 F.2d 1187 (6th Cir. 1981). However, in February, 1982, the U.S.
Supreme Court vacated the latter decision and returned the case to the Appeals
Court for reconsideration in light of a Supreme Court ruling in a related
case, Community Commnications, Co., Inc., v. City of Boulder, Colorado, et
al., 102 S.Ct. 382 (1982).


The following discussion addresses the legal issues raised by the Akron
ordinance and the decision handed down by the U.S. District Court and U.S.


Court of Appeals. In addition, the U.S. Supreme Court decision in Community
Communications v. Boulder and its potential impact on the outcome of the Akron
case is discussed.

The plaintiffs (the haulers, landfill owners, and recyclers) in the
District Court case (.referred to as the Glenwillow decision) alleged that
certain parts of the cooperative agreement and the ordinance were illegal

1.	They violated the sections of the Sherman Antitrust Act.

2.	They restrained interstate commerce in violation of the Constitution.

3.	They deprived the plaintiffs of due process of law under the 14th
amendment to the Constitution.

4.	They took property in violation of the 5th Amendment to the
Constitution, as applied by the 14th Amendment.

The court ruled on the Sherman violations before considering the constitu-
tional issues.


It was argued that ordinances to control waste ownership and flow would
do economic harm and damage to private landfill operators, recyclers, and
waste haulers in the Akron area. The ordinances would also displace free
enterprise competition within the hauling and disposal industries. Therefore,
the waste control ordinance was vulnerable to attack as a violation of the
Sherman Antitrust Act because it may have constituted an unlawful, anti-
competitive action on the part of the implementing organization (Akron, Ohio).

In order for a waste control ordinance to be found in violation of the
Sherman Act, three conditions must be fulfilled:

1. The ordinance must be sufficiently connected with interstate commerce
to permit application of Federal statutes.


2.	The ordinance must constitute an anticompetitive practice as defined
by antitrust law.

3.	The municipalities must be unable to claim "state action immunity."

If all three of these conditions were met, the ordinance would be in violation
of Federal antitrust laws.

2.1.1	Interstate Commerce

To justify application of the Sherman Antitrust Act, waste control
ordinances must displace competition in the local market so that interstate
commerce is affected to a sufficient degree. In J.P. Mascura and Sons v. Wm.
J. O'Hara, Inc., F.2d 264 (3d Cir. 1977), antitrust violations were found to
exist, even though it was found that all parties of concern operated entirely
within the Commonwealth of Pennsylvania. The action alleged that price-fixing
and a conspiracy to allocate territories to waste haulers and landfill opera-
tors in suburban Philadelphia were in violation of Sherman Antitrust provi-
sions. The conclusion that the alleged practices substantially affected
interstate commerce was based on two factors:

1.	The quantity of equipment manufactured out-of-State purchased by
refuse haulers in the affected area would be decreased by a conspir-
acy to restrict local competition; the fact that all equipment in use
had been purchased from local dealers did not negate the relationship
of this issue to interstate commerce.

2.	Customers serviced by these haulers had out-of-state headquarters,
from which the haulers received payment for local services.

The court decided that, as a matter of economic reality, the amounts of these
out-of-state payments would be affected by a reduction in competition. There-
fore, Federal antitrust laws were found to apply.

2.1.2	Anticompetitive Activity

According to Mascuro, any connection with interstate commerce, however
vague, would justify the application of antitrust laws. For example,
purchases of equipment, insurance, etc., from companies with out-of-state


headquarters have been shown (in Mascuro) Co be a sufficient connection to
interstate commerce. Since out-of-State suppliers of equipment and purchasers
of recycled goods were involved in the RES project, the first criterion of
antitrust law violation was met, even though the ordinance regulated only
waste generated in a very limited area.

The argument that controlling waste flow is an anticompetitive practice
centers around two basic theories:

1.	Ordinances restricting disposal alternatives are monopolization of
the waste disposal business.

2.	Cooperative agreements or ordinances are devices to restrain trade.

Unlawful monopolization under the Sherman Act has been defined to consist
of the possession of monopoly power in the market, plus the intent to acquire
or use that power. Capture and exclusive use of a waste stream would, in
effect, create a monopoly for the municipality and/or the resource recovery
facility, since this situation would effectively prevent any competing
disposal sites from acquiring waste.

Capture of the waste stream might also be challenged as a restraint of
trade. It can be argued that cooperative agreements between organizations are
evidence that a conspiracy exists to restrain trade in solid waste collection
and disposal. "Tying" arrangements, in which hauler licenses are granted only
if the hauler agrees to use a city-designated facility, can also be inter-
preted as restraints of trade. In this light, both capture of the waste
stream and "tying" arrangements meet the second condition of antitrust law

The Akron waste stream control ordinance met the first two criteria for
antitrust law violations: the ordinance had sufficient impact upon interstate
commerce to allow the application of Federal antitrust laws; and since the
ordinance did, in fact, create a monopoly over solid waste industry in the
local market, it was therefore interpreted as a restraint of trade.


2.1.3 "State Action" Immunity

In order that the waste control ordinance remain in force and not violate
antitrust laws, the enacting organization must be excluded from application of
the antitrust laws under the "state action" exemption.

In examining the Akron situation, the U.S. Court of Appeals, Sixth
Circuit (hereafter refered to as the Appeals Court), found that:

1.	The OWDA is a State agency, and its power to determine State policy
in solid waste management, including the issuance of revenue bonds
for facilities like the RES, is supreme.

2.	The State has a legitimate interest in promoting safe and sanitary
methods of solid waste disposal and therefore, also can legitimately
provide financial aid to its subdivision (OWDA) in support of these

3.	By entering into the Cooperative Agreement, the OWDA was acting for
the State under express statutory authority to further State policies
for safe and secure disposal of MSW.

Based on these three findings, the court held that the OWDA and its activities
are outside the jurisdiction of the Sherman Act and fall under the "state
action exemption."

The court used two previous decisions as a basis for this judgment:

1.	Parker v. Brown, 317 U.S. 341 (1943), in which the Supreme Court
ruled that activities of a state agency at the legislative command of
the State are exempt from regulation under the Sherman Act.

2.	Bates v. State Bar of Arizona, 433 U.S. 350, 359-63 (1977), in which
the Supreme Court used three criteria to determine justification for
a State action exemption:

-	The defendant was the State and not a private party.

-	The State had an interest in protecting the public by acting in the
situation of concern.

-	The action taken in the situation of concern was clearly in keeping
with the State's policy.


3ecause Che OWDA met all Che requirements sec forch in BaCes and Parker, Che
Appeals Court held Chac Che state accion exemption applied.

The CourC also ruled ChaC Che scaCe accion exemption exCended Co che Cicy
of Akron. The home rule powers provision of che Ohio ConsciCuCion declares
ChaC cicies acC as agenCs of che Scace when chey exercise governmental powers
within cheir cicy Limics. The Ohio courcs have furcher ruled ChaC local
governmenc are responsible for regulating solid wasce management wichin cheir
borders—by monopoly, if ic is appropriace. Since Ohio has recognized chac
municipalicies may choose Co provide wasCe disposal services on a monopoly
basis, and since StaCe policy is Co allow local governments Co sec policy
wichin Cheir boundaries, che accions of che Cicy are procecced under che scace
accion exempCion.

Ic is chis aspecc of che Appeals CourC opinion ChaC must be reconsidered
in lighc of Che Supreme CourC's decision in Communicy Communicacions v.
Boulder. The Supreme CourC ruled chac, in order for a subdivision Co benefic
from a sCaCe's ancicrusc immunicy, Che ancicompecicive accion — such as a
wasCe scream conCrol ordinance — muse be pursuanC Co a clearly arCiculaCed
and affirmacively expressed scace policy and che accion musC be acCively
supervised by Che sCate. Until the licigacion in Hybud is compleCed, ic is
uncercain what will be acceptable as "clear articulation and affirmative
expression" and "active state supervision" regarding a state policy directing
a subdivision to displace competition with regulation or monopoly public
service. In Akron's case, it appears that OWDA's role may be satisfied
through the Cooperative Agreement with OWDA, a State agency, which specifi-
cally directed the City of Akron to carry out measures to ensure that all
waste generated within the corporate limits of Akron be delivered to RES.


The commerce clause of Che Constitution gives Congress the power to regu-
late commerce between the states. To determine wheCher an ordinance violaces
Che commerce clause, three criteria must be met:

1. The statute must regulate evenhandedly, with only incidental effects
on interstate commerce?


2.	The statute must serve a legitimate local purpose?

3.	There must be no alternate means of supporting this local purpose
without restricting interstate commerce?

Previous decisions [e.g., Philadelphia v. New Jersey 1137 U.S. 617
(1978); Hughes v. Oklahoma, 99 S. Ct. 1727, (1979)] have found that the
statutes judged unconstitutional attempted to supersede state boundaries. In
Philadelphia, the State of New Jersey enacted regulations to restrict the
disposal of waste generated in Philadelphia in landfills in southern New
Jersey. The regulations were judged as violating the commerce clause. In
Akron, the ordinance affected only solid waste generated within the City;
therefore, the Akron ordinance effects only intrastate activities, and any
effect on interstate commerce is indirect. Moreover, since the ordinance
affects only solid waste, any burden on interstate commerce in recyclable
goods moving between states is indirect and incidental.

In addressing the second criterion, the court in Glenwillow determined
that the waste control ordinance served a legitimate purpose by enabling
construction of a resource recovery facility and thereby assuring the safe and
efficient disposal of solid waste generated within the City.

Finally, the court in Glenwillow did not accept the plaintiffs' argument
that the City could ensure waste flow by making it economically advantageous
for haulers to use the facility. Although the City had considered offering
economic incentives as a means of ensuring the flow of waste, it eventually
determined that the ordinance would provide a guaranteed supply of waste to
the facility. The court upheld this decision and ruled that activities
designed to make a facility more economically attractive do not constitute an
alternative to mandates.

In this case, since each of the three criteria was met, the Akron
ordinance was found not to be an impermissable burden on interstate commerce.



The Constitution guarantees due process and equal protection under the
law, and that no property will be taken without just compensation. In
Glenwillow, the plaintiffs argued that: the waste control ordinance was not
sufficiently related to legitimate government objectives to meet the require-
ments of due process, and even if the ordinance does serve a legitimate public
purpose, it in effect takes their property without just compensation.

In deciding on the first argument, the court had to determine whether the
waste control ordinance, as a function of the City's police powers was
directly related to health, welfare, and safety of the residents. Akron
argued that the health, welfare, and safety of the citizens were fhe factors
motivating construction of the facility. The City based its arguments on
three facts:

1.	Health and safety are of immediate concern in landfill operations.

2.	Health and safety concerns required the City to operate a municipal
disposal facility to discourage open and random dumping.

3.	Concern for public welfare required the City to pursue an alternative
to landfilling because of increased difficulties in locating and
purchasing new sites.

The plaintiffs argued that the ordinance was enacted to promote narrow,
private financial interests without a proper public purpose.

The court decided that, based upon Akron's demonstrated difficulty in
finding new and environmentally safe landfill sites, the chronology of events,
and recommendations for studies of alternative disposal options, the City's
motivation for building the facility was not to advance private enterprise or
undertake proprietary activity. In addition, the court decided that the
involvement of private enterprise in the project (i.e., operator, bond
counsel, etc.) does not negate governmental concerns for the health and safety
of the population, and that the public, not the operator of the resource
recovery facility, would be the true beneficiary of the project and the
ordinance. Therefore, the mandate to regulate the flow of solid waste was
hela to be a legitimate use of Akron's police powers.


Finding Chat a legitimate public purpose for the ordinance existed, the
court had to determine whether the ordinance in fact authorizes taking
property for public use without just compensation. To decide this issue, the
court had to consider separately the effects on haulers and the effects on
landfill operators or other disposal facilities.

Haulers claimed that the waste constituted a valuable property to which
they gained title when they collected it. Mandatory disposal at a facility
where tipping fees might be higher than those at alternate sites was an
unconstitutional appropriation of valuable material. To demonstrate that the
waste had been taken from them without just compensation, the haulers were
required to show that the waste they collected had some value.

In Glenwillow, the court ruled that the waste control ordinance took
nothing of value from the haulers and that it only removed from the haulers
the "right" to decide where the waste should be disposed. The haulers had
expected that they would always have the right to select a final disposal
site. The court ruled this "expectation" was not a property right covered
under the Constitution, that expectations are not a legitimate claim of
entitlement, and that, therefore, waste control ordinances do not deprive
haulers of property without compensation.

In determining whether landfill or reclamation operators have property
rights violated by the waste control ordinance, the court used the same
rationale as in the ruling applying to haulers. The recycler and landfill
operator expected that waste would continue to be brought to their facilities
by haulers. This expectation was found not to be a legitimate claim of
property right or entitlement in need of protection. The waste ordinance did
not violate constitutional right to compensation. Therefore, landfill
operators/owners who lose waste to a resource recovery facility as a result of
mandated control are not deprived of any property.



In upholding the waste control ordinance on constitutional issues, the
Appeals Court in Glenwi1low decided that:

1.	The ordinance affects only waste generated within the City of Akron
and does not restrain interstate commerce.

2.	The effect on recyclable materials is only indirectly related to the

3.	. The ordinance serves a legitimate local purpose (the safe disposal of

solid waste).

4.	Economic means of controlling waste flow do not constitute viable
alternatives to mandated waste control.

5.	Mandates are a legitimate use of police powers to assure the health,
safety, and welfare of the population.

6.	Support of a resource recovery facility as a result of difficulty in
siting safe landfills does serve the public welfare.

7.	Mandates that designate disposal sites do not infringe on any
legitimate property rights of waste haulers.

8.	Mandates that direct waste away from recycling or landfill operations
do not infringe on any legitimate property rights of owners/operators
of those facilities.

The Appeals Court is reconsidering this decision in light of the Supreme
Court opinion in Community Communications v. Boulder which limits the exten-
sion of the "state action" immunity from antitrust law to municipalities. The
Appeals Court must decide whether the ordinance enacted pursuant to the
cooperative agreement with OtoDA presents a "clearly articulated and affirma-
tive expressed" State policy and whether it has been actively supervised by
the State through OWDA.



Syllabus of Community Communications Co., Inc., v.
City of Boulder, Colorado, et al.

(Slip Opinion)

NOTE: Where it is feasible, a syllabus fheadnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court out has been pre-
pared by the Reporter ox Decisions for the convenience of the reader. See
United States v. Detroit Lumber Co.. 200 U. S. c2l. 337.





No. 80-1350. Argued October 13, 1981—Decided January 13, 1982

Respondent city of Boulder is a "home rule" municipality, granted by the
Colorado Constitution extensive powers of self-government in local and
municipal matters. Petitioner is the assignee of a permit granted by a
city ordinance to conduct a cable television business within the city lim-
its. Originally, only limited service within a certain area of the city
could be provided by petitioner, but improved technology offered peti-
tioner an opportunity to expand its business into other areas, and also
offered opportunities to potential competitors, one of whom expressed
interest in obtaining a permit to provide competing service. The City
Council then enacted an "emergency" ordinance prohibiting petitioner
from expanding its business for three months, during which time the
Council was to draft a model cable television ordinance and to invite new
businesses to enter the market under the terms of that ordinance. Peti-
tioner filed suit in Federal District Court, alleging that such a restriction
would violate § 1 of the Sherman Act, and seeking a preliminary injunc-
tion to prevent the city from restrictingpetitioner's proposed expansion.
The city responded that its moratorium ordinance could not be violative
of the antitrust laws because, inter alia, the city enjoyed antitrust im-
munity under the "state action" doctrine of Parker v. Brown, 317 U. S.
341. The District Court held that the Parker exemption was inapplica-
ble and that the city was therefore subject to antitrust liability. Ac-
cordingly, the District Court issued a preliminary injunction. The
Court of Appeals reversed, holding that 'he city's action satisfied the cri-
teria for a Parker exemption.

Held: Boulder's moratorium ordinance is not exempt from antitrust scru-
tiny under the Parker doctrine. Pp. 6-15.

(a) The ordinance cannot be exempt from such scrutiny unless it con-





stitutes either the action of the State itself in its sovereign capacity or
municipal action in furtherance or implementation of clearly articulated
and affirmatively expressed state policy. Pp. 6-10.

(b)	The Parker "state action" exemption reflects Congress' intention
to embody in the Sherman Act the federalism principle that the States
possess a significant measure of sovereignty under the Federal Constitu-
tion. But this principle is inherently limited: Ours is a "dual system of
government," Parker, su-pra, at 351, which has no place for sovereign
cities. Here, the direct delegation of powers to the city through the
Home Rule Amendment to the Colorado Constitution does not render
the cable television moratorium ordinance an "act of government" per-
formed by the city acting as the State in local matters so as to meet
Parker's "state action" criterion. Pp. 10-12.

(c)	Nor is the requirement of "clear articulation and affirmative ex-
pression" of a state policy fulfilled here by the Home Rule Amendment's
"guarantee of local autonomy," since the State's position is one of mere
neutrality respecting the challenged moratorium ordinance. This case
involves city action in the absence of any regulation by the State, and
such action cannot be said to further or implement any clearly articulated
or affirmatively expressed state policy. Pp. 13-14.

(d)	Respondents' argument that denial of the Parker exemption in this
case will have serious adverse consequences for cities and will unduly
burden the federal courts is simply an attack upon the wisdom of the
longstanding congressional commitment to the policy of free markets and
open competition embodied in the antitrust laws, which laws apply to
municipalities not acting in furtherance of clearly articulated and affir-
matively expressed state policy. Pp. 14-15.

630 F. 2d 704, reversed and remanded.

Brennan, J., delivered the opinion of the Court, in which Marshall,
Blackmun, Powell, and Stevens, JJ., joined. Stevens, J., filed a
concurring opinion. Rehnquist, J., filed a dissenting opinion, in which
Burger, C. J., and O'Connor, J., joined. White, J., took no part in the
consideration or decision of the case.


Project Summaries


Capital Cost:


F inance:

Waste Stream Control:


RDF dedicated boiler
1,000 TPD design

Steam feeding downtown steam loop, recovered ferrous

$34.2 million direct construction

$17.4 million design, legal fees, construction

$ 5.2 million start-up/shakedown

$16.4 million new guaranteed capital by new operator
and principals for modifications.

City of Akron, OH - owner, primary supplier of MSW;

contributed $5 million in GO bonds.

Teledyne National - operator (recently replaced by

Tri-Cil, Ltd.).

Dillon, Read & Co. - bond underwriter.

Ohio Water Development Authority (OWDA) - principal
financier of project, with $16 million in revenue

Summit County, Ohio - third party in project financial
arrangement, with $5 million in GO bonds.

$46 million revenue bonds

$10 million general obligation bonds ($5 million—City
of Akron; $5 million—Summit County).

Ordinance requiring that all waste generated within
boundaries of city of Akron be disposed at the RES.
Ordinance enacted at urging of underwriters to improve
salability of bonds. Ordinance also required by terms
of Cooperative Agreement among City of Akron, Summit
County, Ohio, and OWDA, which provided financing for

In financial difficulty because of (1) problems associ-
ated with pneumatic handling system and (2) need for
low tipping fee to attract waste from County. New
financing arrangements among the City, OWDA, and
Tri-Cil, Ltd., of Canada, the new operator, call for
the City to provide $8.6 million, OWDA $16.4 million,
and Tri-Cil, Ltd., a large electric turbine giving the
facility electricity production capability. Plans call
for the RES to shut down for approximately 1 year to
replace the pneumatic system and install the turbine.
Waste will be landfilled, and natural gas will be used
to fire the steam-producing boilers.




Capital Cost:



Waste Supply:

Waste Control:


Mass-burning waterwall incinerator (modified Von Roil

1,200 TPD (Design);

1,500 TPD (Maximum).

Steam (625 psig; 7S5-825°F); Average 300,000 lb/hr;

maximum 370,000 lb/hr. Recovered metal from bottom
ash (approx. 50 TPD).

$38 million.

Owned by Town of Saugus, Massachusetts

Designed/built by Rust Engineering (subsidiary of
Wheelabrator-Frye, Inc.);

Finance-approved, construction-managed, and now

operated by RESCO (joint venture of Wheelabrator
Systems, Inc., and M. DeMatteo Construction Co.).

$10.5 million from each RESCO partner ($21 million

$30 million industrial revenue bonds;

Leverage lease arrangement between Saugus and RESCO.
$13 million over construction costs ($35 million)
for working capital, bond contingency fund, start-
up and equipment replacement/improvement.

$16/ton tipping fee;

Steam and ferrous metal sales.

18 municipalities currently send 1,150 TPD of MSW to

Long-term "put-or-pay" contracts with 13 "core"
communities; shorter-term contracts with two Boston
refuse collection districts and other towns and private
haulers. Contracts attractive because of guaranteed
capacity, short transport distance, competitive tipping
fee, lack of alternative disposal sites.

Saugus, Massachusetts, is currently seeking additional
guaranteed waste streams. The facility is showing a
profit after 5 years of operation. The commitment of
the RESCO partners to providing additional funds to
address equipment problems and to assuming a major
share of the risks was a major determinant of project


success. Only concern is that "put-or-pay" contracts
allow for 10% reduction of waste commitments/year, and
municipalities can start own recycling program and
still fulfill terms of contract.




Capac ity:
Produc t:

Capital Cost:


Waste Supply:
Waste Control:


Refuse-derived fuel (RDF)-producing facility using

shredding, magnetic separation, air classification,
trommelling, and ball milling, plus chemical
additives to produce powdered fuel.

1,800 TPD (Design)

2,200 TPD (Maximum)

Eco-Fuel II - powdered RDF (7,750 btu/lb);

Ferrous Metals;

Aluminum; and

$53 million.

Owned by Connecticut Resources Recovery Authority

(CRRA); designed/operated by Combustion Equipment
Associates, Inc., and Occidental Resource Recovery
Associates (CEA-OXY).

Greater Bridgeport systems bonds (revenue bonds)
through CRRA.

9 cities in area supplying 1,200 TPD to the facility.

Although CRRA is a State agency, it has no control over
waste flow. "Put-or-pay" contracts were signed with
nine local communities under interlocal agreement.
Agreement guaranteed only 1,200 TPD of waste to the
facility. Extensive regional transfer station system
would supply remaining quantities of waste.

The Bridgeport facility is currently (March 1982) shut
down. CEA filed for bankruptcy in November, 1S80,
shortly after start-up. Occidental has taken over the
facility and has proposed modifications to produce
shredded RDF.





Capital Costs


F inance:

Waste Supply:

Waste Control:


RDF-producing facility for supplemental firing in
on-site boiler, generating electricity.

300 TPD.

Coarse RDF for use as supplemental fuel in electricity
generating plant.

$186 million (RDF-processing facility—$5 million;

boiler facility, pollution control, and electrical
generating equipment and land).

RDF facility designed by Horner and Shifrin, Inc.
Operated by City of Lakeland;

owned jointly by City of Lakeland (60%) and Orlando
Utilities Commission (40%).

Municipal revenue bonds.

Approximately half from City of Lakeland, half from
private haulers.

City of Lakeland municipal collection services and

The City expects few problems in obtaining necessary
supplies of waste from private haulers. The facility
will drastically reduce transport distances and haul
times, and tipping fees will be competitive. Tipping
fees at the local landfill were $6/ton until the site
was forced to upgrade to meet environmental regula-
tions. New tipping fees are projected to be between
$10 and $12/ton.



Capac ity:

Waste Supply:
Waste Control:

Mass-burning facility (modular).

225 TPD.


11 communities in Vermont; 15 communities surrounding
Claremont, New Hampshire.

Most waste is either privately hauled or self-hauled.
Projected "put-or-pay" contracts.

This interstate project needs to create a bistate solid
waste district: first, the proposal must be studied
and approved by individual state commissions; identical
authorizing legislation must be approved by both State
legislatures, subject to approval by referendum, and
then approved by U.S. Congress before project
implementation. As of July, 1982, both State
legislatures had acted and congressional approval is
expected by September.