Environmental Finance Advisory Board
EFAB Members
Joanne Throwe, Chair
Brendt Anderson
Lori Beary
Janice Beecher
Ted Chapman
Rudolph Chow
Edwin Crooks
Lisa Daniel
Marie Roberts De La
Parra
Yvette Downs
Ted Henefin
Craig Holland
Dan Kaplan
Suzanne Kim
Pamela LeMoine
James McGoff
Chris Meister
James "Tony" Parrott
Eric Rothstein
William Stannard
Linda Sullivan
Angie Sanchez
Jennifer Wasinger
Richard Weiss
David Zimmer
Designated Federal
Official
EdChu
August 19, 2019
The Honorable Chris Hladick
Regional Administrator
United States Environmental Protection Agency
Park Place Building
1200 6th Avenue
Seattle, WA 98101
Dear Regional Administrator Hladick:
The Environmental Finance Advisory Board (EFAB or the Board) is pleased to submit the
enclosed report, Revenue Options for a Waste Backhaul Service Program in Rural Alaska.
The report presents our review and recommendations on a subject of significant
importance to the public health and environment of rural Alaskan communities. The
report is the final product of the first phase of our work project and we anticipate an
additional product during a second phase effort.
EPA Region 10's waste office initiated the project by asking the EFAB to examine
revenue options for a program to backhaul waste from rural Alaskan communities. The
EPA request included:
assessment of a range of revenue options for supporting backhaul program
operations;
identification of possible opportunities for generating program incomethrough
materials recycling; and
development of a business plan demonstrating how various fundingoptions
could progress in supporting operations.
To address the charge questions, the EFAB set up a Backhaul Alaska project workgroup
that convened a series of conference calls and met twice at full Board meetings to
discuss issues and formulate findings and recommendations. The discussions led to the
development of a cash flow projection model for local communities' Alaska Backhaul
operations and the following EFAB recommendations.
1. identify and quantify the benefits and cost savings the program creates and use
that information to strongly promote the program;
2. evaluate in greater detail the co-op model and how that might work in Alaska;
3. create a stakeholder council to evaluate and develop a workable Extended
Producer Responsibility program;
4. contact computer manufacturers to gauge their interest in the e-waste that
needs to be removed;
5. partner with veteran councils to seek volunteers for program roles;
6. identify the potential savings of using GSA disposition services; and
7. further examine the potential for, and tradeoffs of, creating fee districts.
-------
Finally, the EFAB recommends that EPA Region 10 use this report in support of its engagement with partners
in Alaska addressing backhaul program challenges. The Board recognizes that given the scope and complexity
of the backhaul issue, a cooperative effort involving federal, state, local, and non-governmental partners will
be required to advance the program.
At this time, I want to recognize the contributions of two former EFAB members to the Board's Alaska
Backhaul project and the enclosed report. These former members are Heather Himmelberger, Director of the
Southwest Environmental Finance at the University of New Mexico, and Hope Cupit, President and CEO of
the Southeast Rural Community Assistance Project. Heather and Hope co-chaired the EFAB Alaska Backhaul
workgroup and their work on the project was essential and in the finest traditions of volunteer public service.
In closing, I hope that you and the Region find our review and recommendations valuable. Thank you for the
opportunity to assist EPA through our work on this important charge. We look forward to the next phase of
Board work in support of the EPA's Alaska backhaul efforts.
Sincerely,
Joanne Throwe, Chair
Environmental Finance Advisory Board
Enclosure
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Environmental Financial Advisory Board
EFAB
Members
Joanne Throwe, Chair
Brent Anderson
Lori Beary
Janice Beecher
Theodore Chapman
Rudolph Chow
Edwin Crooks
Lisa Daniel
Marie Roberts De La Parra
Yvette Downs
Ted Henifin
Craig Holland
Daniel Kaplan
Suzanne Kim
Pamela Lemoine
James McGoff
Chris Meister
James 'Tony" Parrott
Eric Rothstein
Bill Stannard
Linda Sullivan
Carl Thompson
Angie Sanchez
Jennifer Wasinger
Richard Weiss
David Zimmer
Designated Federal
Officer
Edward Chu
Revenue Funding Options for a
Waste Backhaul Service Program in
Rural Alaska
August 2019
This report has not been reviewed for approval by the U.S. Environmental
Protection Agency; and hence, the views and opinions expressed in the
report do not necessarily represent those of the Agency or any other
agencies in the Federal Government.
Printed on Recycled Paper
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United States Environmental Protection Agency
Environment Financial Advisory Board Report
a
Revenue Options for a
Waste Backhaul Service Program in Rural Alaska
Source of Photos: Jacqueline ShirleyRural Community Assistance Corporation
andZender Environmental Health and Research Group
August 2019
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E x e c u 11v e S u m m a ry
EPA Region 10 requested that the Environmental Financial Advisory Board (EFAB or the Board)
assess revenue options for a program in rural Alaska to backhaul hazardous waste and other
materials from rural Alaskan communities to reduce the toxicity of landfill leachate and of
emissions from open waste burning. The EPA asked for a range of revenue options with the
potential for supporting backhaul program operations, identification of opportunities for
generating revenues through materials recycling, and development of a ten-year business plan
showing how the various funding options would progress.
Due to a unique classification system in Alaska, both permitted and unpermitted rural municipal
landfills are unlined, are typically uncompacted and uncovered, often use open burning as a
volume reduction method, and are often near-capacity. Most rural communities are not connected
by road to any urban area, nor to each other, and thus are left without a safe and economical way
to dispose of hazardous wastes or bulky materials. One of the few options available is the
backhauling of such materials. Backhaul refers to the shipping back of waste from rural Alaska
communities by airplanes and barges to larger communities, either in Alaska (such as Anchorage)
or outside of Alaska (such as Seattle). The complex and expensive logistics involved in waste
backhauling make this option onerous for individual communities, which average just under 350
residents. Backhauling is most efficient when coordinated by a regional entity, but the bulk of
communities are not served by a regional coordinative entity and there is currently no inter-
regional coordination to capture additional efficiencies through transboundary opportunities.
The long-term sustainability of backhaul in Alaska is uncertain. Currently, most rural Alaska
communities use an EPA grant (the Indian General Assistance Program, or IGAP) to pay for many
or all solid waste activities such as backhaul, landfill operation, and waste collection. Eligibility to
use EPA IGAP grant funds for backhaul and other waste services was slated to end after 2020, but
the Congress acted in 2018 to permit these funds to be used without a sunset date. However, these
funds are insufficient to cover all expenses and may be needed to address other environmental
needs.
The EPA gave the EFAB the charge to develop information and analysis to help Backhaul Alaska
achieve long-term financial stability. The EFAB established a Workgroup, referred to as the
"EFAB Backhaul Alaska Workgroup," to address the charge. The Workgroup identified three
main focus areas to meet the goals of the charge:
Fee-Based Programs;
Financing and Funding Options; and
Options for Involving Outside Entities.
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These three areas help address solutions in securing revenue and job opportunities for community
residents while addressing concerns related to hazardous waste disposal.
Backhaul Alaska has the potential to significantly improve the health and environment of the rural
Alaskan communities it is intended to serve. If successful, it has the potential to create jobs and
economic development both locally and throughout the state. A number of promising finance
opportunities and ventures are conceivable and worthy of further study.
A primary potential source of revenue for the Backhaul Alaska program is revenue generated from
those who receive backhaul services. However, the structuring of these fee programs requires
Backhaul Alaska to consider multiple factors. Because local governments have the purview and
authority for setting fees on waste generators within their communities, Backhaul Alaska is tasked
with establishing the service fee amount that the community is responsible for contributing.
Additionally, Backhaul Alaska must consider how to equitably assess the fee for services for those
very remote communities with low populations.
Each rural Alaska community possesses its own unique social, geographic, economic, and
infrastructure challenges and opportunities that affect the economic viability of fee-based
programs, so it is absolutely necessary for each community or regional area to examine its needs
and capabilities when considering fee-based programs. The final decision about whether there
should be a fee, what that fee structure should be, and how it will be managed should be made at
the local level.
Supporting backhaul programs through financing or third-party resources can help alleviate cost
pressures on consumers and mitigate fluctuations in program costs. The content on
www.BackhaulAlaska.org reflects significant efforts by various parties to bring solutions that are
community-based; share responsibilities among the consumer, retailer and recycler; leverage
larger scale programs; and use a phased implementation including initial pilot programs. The
EFAB agrees that removing waste from rural Alaskan communities is an 'everyone' problem that
cannot be solved simply by enhancing existing governmental programs or introducing new ones.
Recurring investment by government can demonstrate to all stakeholders that the relevant
governmental entities take the problem seriously, making it increasingly likely that others, such as
recyclers and co-op groups, will be more willing to participate.
In addition to publicly funded programs, recycling can help offset overall program costs. Recycling
is well-known for its environmental benefits, which include resource conservation, energy
conservation, and reductions in water and air pollution, including reductions in greenhouse gas
generation. However, it also has significant economic benefits, which are often overlooked.
Recycling is an important segment of the national and, potentially, state economy. It can create
jobs and saves money for generators of waste. Recycling makes both environmental and economic
sense.
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The EFAB examined opportunities for funding, including exploring recycling as a commodity and
a co-op business model. The Board also developed a cash flow projection model to assist local
communities. Other funding options are possible, and all potential options should be explored.
Creative options, such as a model similar to Adopt-a-Highway programs, have been suggested by
individuals in Alaska, and should be thoroughly explored.
There are limited options to involve outside entities in the removal of hazardous waste at various
points along the process, including:
extended producer responsibility programs where manufacturers would take a more
cradle to grave approach with their products;
neutral cost incentives that would involve tax credits or other incentives to keep from
imposing an explicit fee;
involving a federal government entity such as the military to assist communities during
routine training exercises; and
involving the state government such as tapping its ability to establish fee districts.
To help arm the Backhaul Alaska Program with the financial tools and information required to
ensure success, the following areas need further study, development, and analysis:
1. identification of options and tradeoffs for moving program fee payments from rural
Alaskan communities to the program;
2. further identification and detailing of financing options possible for the program;
3. options for organizational governance structure, including a feasibility analysis for a
potential co-op association;
4. further development of the program cash flow projection;
5. development of a model optimizing regional and rural Alaskan village storage
infrastructure for future metals, e-waste, and battery market highs with construction,
maintenance, and land space constraints;
6. the role of federal agency-funded rural development programs in paying local solid
waste programs fees to cover disposal of waste from infrastructure projects;
7. an assessment of how rural Alaska communities can best leverage their EPA Indian
General Assistance Program Grant funds and any other potential grant funding to make
funding for backhaul go further; and
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8. while estimates of rural Alaskan communities-level scrap metal, electronics, and
batteries are available, further study is needed to understand the metals market futures
that would bring net revenue to the program over and above the cost for construction
of village and hub infrastructure to store metals during times of recession.
A few of the recommendations that were developed out of the Board's efforts are presented below:
1. identify the full scope of potential benefits and cost savings related to health and environment
engendered by Backhaul Alaska, including a quantitative range where possible, and use the
information to promote the value of the Backhaul Alaska program;
2. evaluate seriously and in greater detail the possibility of a co-op model and how that might
work in Alaska;
3. develop a stakeholder stewardship council for environmental and economic strategic planning
that would evaluate and create a workable extended producer responsibility program;
4. reach out to computer manufacturers to inquire if they would be interested in the e-waste that
needs to be removed;
5. identify the detailed procedures and potential of how the use of GSA disposition services could
result in cost savings specific to the infrastructural needs of Backhaul Alaska;
6. seek out and partner with various interested veteran councils that may provide skilled
volunteers for a variety of roles; and
7. delve further into the potential for, and tradeoffs of, backhaul/solid waste fee districts.
The EFAB recommends that the EPA, particularly the EPA Region 10, utilize this report to engage with
partners in Alaska regarding the removal of backhaul from remote rural Alaskan communities. The Board
recognizes that this issue is one that cannot be solved at or by only one level of government. An issue this
complex and challenging will take a strong commitment by federal, state, local, and non-governmental
partners to address.
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Table of Contents
Executive Summary 1
1 EPA Charge Questions 10
1.1 Fee Based Programs 10
1.2 Financing and Funding Options 10
1.3 Options for Involving Outside Entities 10
2 Summary of Problem 10
2.1 Background 10
2.2 The Problem 12
3 Fee-Based Programs 12
3.1 Can a backhaul program improve environmental conditions and public health? 13
3.2 What is the most efficient use of the community contribution and how should it flow
from local to regional? 14
4 Financing and Funding Options 15
4.1 Exploring Recycling as a Commodity 15
4.1.1 Recycling Industry Jobs 16
4.1.2 Scrap Metal Potential for Revenue 17
4.2 Co-Op Business Model 17
4.2.1 Feasibility Analysis 18
4.2.2 Business Plan 18
4.2.3 Incorporation of co-op group 19
4.3 Summary of Financing and Funding Options 20
5 Options for Involving Outside Entities 21
5.1 Extended Producer Responsibility 21
5.2 Neutral Cost Incentives 24
5.3 Involving the Federal Government - Government Disposition Services 24
5.4 Involving the Federal Government - Military Recruit Training 25
5.4.1 Alaska National Guard 25
5.4.2 Joint Pacific Alaska Range Complex 25
5.4.3 Alaskan Department of Military and Veteran Affairs 26
5.4.4 Joint Base Elemendorf-Richardson 26
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5.4.5 Alaska Aerospace 26
5.4.6 Summary of Military Recruit Training Potential 27
5.5 Involving the State Government 27
5.5.1 Are there benefits to aligning this effort with the hazard mitigation or
emergency prevention programs in the state? 27
5.5.2 What are the tradeoffs for establishing fee district authorities in the
state? 28
5.5.3 What are possibilities for fee districts given Alaska's existing codes? 29
6 Conclusion 29
7 References 33
Appendix A. Community Fee-Based Programs 34
A.l Introduction 34
A.2 Understand there is a challenge that requires a local solution 34
A.3 Communicate through a collective voice 35
A.3.1 Establishing a CAC for Financing Backhaul Waste: 35
A.4 Consider the best metrics before choosing a fee 36
A.4.1 Charge per person 36
A.4.2 Charge based on household income 36
A 4.3 Charge per Household 37
A.4.4 Charge per Unit of Waste 37
A.4.5 Charge per Unit of Consumption 37
A.4.6 Charge per Unit of Consumption with Rebate for Proper Disposal 38
A.4.7 Other factors 38
A.5 Other questions to consider 39
A.5.1 Should the fee system be built to try to reduce the waste stream? 39
A.5.2. Would a higher rate bring more fraud or illegal dumping? 40
A.5.3. Should community education be considered when evaluating the rate? 40
A.5.4. Should the fee be based on each individual waste item or per trip to
disposal site? 40
A.5.5. What is the appropriate timing of implementing the fee? 40
A.6 Rate Structure/Cost Distribution 41
A.6.1 Flat rate 41
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A.6.2 Tiered rate 41
A.6.3 Variable rate, where fee increases incrementally based on need 41
A.6.4 Purchase a pass to bring backhaul waste to a drop-off depot or
collection center 41
A.6.5 Will credits or reductions be offered? 42
A.7 Rate Collection 42
A.7.1 Tie the collection to an existing fee structure 42
A.7.2 Tie the collection to a nonprofit or independent entity that can manage
the bill payment process and be accountable for collections and
distribution 43
A.7.3 Pay at the time of disposal or an advance fee at time of purchase 43
A.7.4 Phase in a fee 43
A.7.5 Regional collection or some sort of combination of collection system 43
A.8 Fee Design Considerations 43
A.8.1 Consider the financial impact on the payer of backhaul fees in terms of
fairness 44
A.8.2 A fee cannot allow too many potential payers to not pay 44
A.8.3 A fee or rate should be proportional to the burden of the haul 44
A.8.4 A fee should be stable and not subject to wide fluctuations in revenue
collection 45
A.8.5 A fee should be flexible to allow for future changes in priorities or costs 45
A.8.6 A well-organized outreach and education campaign should be part of
any fee structure 45
A.8.7 Is the administration of the fee system going to be placed out for bid or
tied to an existing entity that already implements a fee-based
program? 45
A.8.8 Has the proposed fee been vetted for legal sufficiency? 45
A.8.9 Is the proposed fee equitable and proportional to the level of service? 46
A.8.10 Is the fee set up to offer flexibility to be able to adjust to changing
conditions? 46
A.8.11 Will the fee be costly to administer during the initial set up and for
oversight? 46
A.8.12 Is the fee consistent with other local funding rates? 46
A.8.13 Is the proposed fee considered stable, i.e. consistent? 46
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A.8.14 Can the fee be used to create opportunities for improvement and/or
expansion? 47
A.8.15 Are there incentives for payers to reduce their fees? 47
A.8.16 Are you able to describe to ratepayers exactly what the fee will
cover? 47
A.8.17 Is there a start-up strategy in place to follow? 47
A.8.18 What organizational structure will administer the fee? 47
A.8.19 Could the backhaul program further economic development including
job creation? 47
A.8.20 Can a backhaul program improve environmental conditions and
public health? 47
A.9 What is the most efficient use of the community contribution and how should it be
moved? 48
Appendix B. Backhaul Alaska Business Model 50
B.l Purpose: 50
B.2 Methods: 50
B.3 Assumptions: 51
B.4 Limitations: 52
B.5 Notes: 52
B.6 Backhaul Alaska Business Model as of June 2018 54
Appendix C. Case Studies 55
C.l Bottle Bills 55
C.2 Charleston County, South Carolina 55
C.3 Prince William County, Virginia 55
C.4 North Carolina Disposal Fee 56
C.5 Oregon Paint Recycling Fee 56
C.6 Computer Recycling and Reuse 57
C.7 The Occupational Training Center (O.T.C) 58
C.8 Pearl St. Co-Op 58
C.9 Linden Hills Co-op Leadership Capacity DevelopmentLinden Hills Co-op was formed over
20 years ago by a group of Quaker families who wanted their co-op to take an active
and committed role in the growth of the independent businesses now thriving in the
Linden Hills business district in Minneapolis 59
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C.10 Take it Back NYC 60
C.ll Guam Waste Programs 61
C.12 Organization for Economic Cooperation and Development (OECD) Research 62
Appendix D. ISRI report on recycling industry jobs (State of Alaska) 64
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1 stions
The first activity of the EFAB was to discuss the charge in detail, breaking it down to several
fundamental questions that could be evaluated based on importance to the EPA and best fit to the
expertise of the EFAB members and the timeframe of the project. After much deliberation between
the EPA, EFAB members, and expert witnesses, the charge questions were grouped under three
distinct areas including: fee-based program options, financing and funding options, and involving
outside entities in supporting backhaul activities. These areas and their associated charge questions
are described in more detail below.
ised Programs
What are the best metrics to assess a service fee knowing the unique circumstances and
constraints of the backhaul program?
ancing and Funding Options
Are there other financing or funding options that should be considered beyond a fee? This
can include exploring recycling as a commodity, creating a business model or a shared
cooperative system.
tions f solving Outside Entitles
Are there opportunities to involve outside entities, such as the federal government,
industry, or product producers, in paying for backhaul?
What might these opportunities look like?
How might these activities best be leveraged?
2 Siiiiiiii fan
2.1 Background
There are approximately 200 rural, isolated, and small Alaska communities that are not on the
state's road system and must be accessed by small plane service from one of the state's rural hub
cities, which may also have limited or no road access or by boat or barge through waterways. Due
to the transportation logistics, these communities are unable to make use of regional waste
processing and storage facilities and must autonomously manage their full waste stream, which is
economically and administratively burdensome. Whether or not they have been permitted by the
State, all rural Alaska community landfills are unlined, face numerous consolidation and cover
challenges, are often at or over capacity, and allow open burning. Moreover, these remote landfills,
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designated as Class III under the state's unique delegated classification system, were not designed
to safely accept hazardous wastes.
One of the few options for managing hazardous waste is to backhaul such materials, which is the
practice of shipping waste from Alaska's remote communities by airplane or barge for disposal or
recycling to an appropriate facility in Fairbanks or Anchorage, or another outside of Alaska (such
as Seattle). The complexity of backhaul logistics make this option onerous for individual
communities. For example, while many villages may be serviced by barge one to five times each
summer, some are not, and most of these villages are not connected with any other village by road.
In the winter, the villages may be able to use ice-roads to connect to a regional hub, but these types
of roads are not reliable and only serve some of the villages. The only reliable, year-round
transportation method for goods, services, and people to and from these communities is by small
plane and the schedules for even that method are frequently disrupted by weather. In addition to
the transportation difficulties, the waste materials must be packaged according to strict
requirements or the haulers and end-facilities will not accept them.
Some communities have been able to leverage economies of scale by combining backhaul
shipments. This combination of shipments requires a complex planning effort and has worked most
efficiently when coordinated by a central regional entity in the area. However, there is currently
no cross-regional coordination to capture additional efficiencies possible in the trans-boundary
opportunities presented statewide. Additionally, there are large tracts of the state where no regional
coordinating entity exists in practice.
To address the problems associated with waste disposal and backhaul, EPA Region 10, the Alaska
Department of Environmental Conservation (DEC), the Solid Waste Alaska Taskforce (SWAT),
rural Alaska communities, industry, and other leaders have contributed to a plan to develop a
statewide backhaul service program, called Backhaul Alaska. This program seeks to coordinate
the transportation of backhaul freight in Alaska and relies on efficiencies gained through
collaboration to reduce the costs of backhaul. Ultimately, the program's goal is to serve the many
public and private entities that create waste in rural Alaska by establishing the capacity for a waste
handling and backhaul coordination service. This service would not only assure that unwanted
wastes are brought out of communities safely and efficiently, it could also provide a source of
program revenue by charging service fees.
However, options for generating revenue from recyclable material may be limited due to China's
National Sword Policy. Enacted in 2018, the policy bans mixed paper and mixed plastic recycled
material from import and establishes strict contamination requirements on inboard loads of
recyclables. These restrictions coupled with increased costs to sort materials at material recovery
facilities contribute to the current economic downturn for domestic waste and scrap material.
Alaska, like other states along the west coast, is more reliant on Chinese recycling markets than
are other states which further limits the revenue potential of recycled material. One alternative
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option for Alaskan communities is to explore a recycling program that captures high-value
commodities with relatively stronger domestic markets such as used aluminum beverage cans,
copper, and scrap metal.
2.2 The Problem
The long-term sustainability of Backhaul Alaska is uncertain. Currently, most rural Alaska
communities use an EPA grant (the Indian General Assistance Program, or IGAP) to pay for solid
waste disposal activities such as backhaul. However, the EPA IGAP funding is not sufficient for
the vast majority of villages to carry out a full backhaul program and for many villages, it is not
sufficient to carry out any backhaul. Even with the streamlining envisioned by Backhaul Alaska,
it is clear that additional funds from waste producers, consumers, processors, and/or from third
parties must be sought in order to sustain the program.
A current pilot project to assess cost variables and other factors for the program is taking place
through fiscal year 2020. Additional information and analysis are needed to ensure Backhaul
Alaska achieves long-term success and financial stability.
EPA Region 10 requested that the Environmental Financial Advisory Board (EFAB or the Board)
assess revenue options for a program in rural Alaska to backhaul hazardous waste and other
materials to reduce the toxicity of remote landfill leachate and of emissions from open waste
burning. Listed below are the activities related to Backhaul Alaska that the Board deemed most
applicable:
1. evaluate a range of revenue options and determine their capabilities and potential for
supporting backhaul program operations, including opportunities for revenue
generation through material recycling (for example, high-end scrap metal.); and
2. develop a ten-year business plan that incorporates a range of revenue sources and
outlines the work needed to make the program solvent and/or quantifies the gap
between program revenue and program costs.
ased Programs
A primary potential source of revenue for the Backhaul Alaska program is revenue generated from
those who receive backhaul services. However, the structuring of these fee programs requires
Backhaul Alaska to consider multiple factors. Because local governments have the purview and
authority for setting fees on waste generators within their communities, Backhaul Alaska is tasked
with establishing the service fee amount that the community is responsible for contributing. As
part of this already challenging task, Backhaul Alaska must consider how to equitably assess the
fee for services for those very remote communities with low populations.
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Each rural Alaska community possesses its own unique social, geographic, economic, and
infrastructure challenges and opportunities that affect the economic viability of fee-based
programs, so it is absolutely necessary for each community or regional area to examine its needs
and capabilities when considering fee-based programs. The final decision about whether there
should be a fee, what that fee structure should be, and how it will be managed should be made at
the local level. To assist the communities in making these decisions, EFAB presents several fee
options in Appendix A for local communities to consider.
Further Study: Explore tradeoffs for designing the Backhaul Alaska village fee
program to ensure it aligns with the overall program goals and serves
participating communities equitably while supporting local jobs.
Further Study: Assess how rural Alaska communities can best leverage their
EPA Indian General Assistance Program Grant funds and any other potential
grant funding to make funding for backhaul go further.
3.1 Can a backhaul program improve environmental conditions and public
health?
Protection of the public health and the environment, including subsistence grounds and waters,
will be increased with the removal of the hazardous wastes. Extending backhaul services beyond
hazardous waste to municipal waste could further improve local health and environmental benefits.
Over half of Superfund sites today are former municipal solid waste landfills, which points to the
dangers of disposing of household waste in unlined and lightly managed rural landfills. Previous
studies examining rural Alaskan landfills indicate similar health risks to those faced by
communities living near hazardous waste sites in developing countries.
Site cleanup is enormously expensive in rural Alaska due to equipment mobilization and
demobilization costs, covers, liners, and management travel. However, the public health and
environmental benefits may outweigh the total costs related to proper waste management in rural
Alaska. An accurate description of the societal costs and benefits of the program may provide
evidentiary support for greater partnering and leveraging opportunities from a wider range of
agencies, foundations, and corporations.
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Recommendation: Identify the full scope of potential benefits and cost savings
related to health and environment engendered by Backhaul Alaska, including
a quantitative range where possible, and use the information to promote the
value of the Backhaul Alaska program.
3.2 What is the most efficient use of the community contribution and how
should it flow from local to regional?
The money generated by communities as their contribution to Backhaul Alaska can be channeled
to one or a combination of functions.
Locally - the funds generated locally would support local programs.
Hub - the funds could support hub functions.
State-Level - The funds could support state-level coordination, such as logistics
coordination.
Vendor - The funds could support hauler or recycler fees.
Program - The funds could support non-designated program shortfalls
It is quite possible that funds need to move from local to regional to state to cover various
expenses, but this movement is complex, raises many questions, and is beyond the current
expertise of the EFAB.
Further Study: The question of how community revenue should be used and
moved is primary for the Backhaul Alaska program and EPA Region 10.
Revenue will be generated from the communities served and local, regional,
and statewide backhaul program costs need to be covered. Whether and how
funds are moved from the community and back again is a complicated
question and may be outside the expertise of EPA Region 10 and Backhaul
Alaska stakeholders.
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4 Financing and Funding Options
Supporting backhaul programs through financing or third-party resources can help alleviate cost
pressures on consumers and mitigate fluctuations in program costs. The content on
www.BackhaulAlaska.org reflects significant efforts by various parties to bring solutions that are
community-based; share responsibilities among the consumer, retailer and recycler; leverage
larger scale programs; and use a phased implementation including initial pilot programs. The
EFAB agrees that removing waste from rural Alaskan communities is an 'everyone' problem that
cannot be solved simply by enhancing existing governmental programs or introducing new ones.
However, recurring investment by government can demonstrate to all stakeholders that the relevant
governmental entities take the problem seriously, making it increasingly likely that others, such as
recyclers and co-op groups, will be more willing to participate.
In addition to publicly funded programs, recycling can help offset overall program costs. Recycling
is well-known for environmental benefits including resource conservation, energy conservation,
and reductions in water and air pollution, which may involve reductions in greenhouse gas
generation. However, it also has significant economic benefits, which are often overlooked.
Recycling is an important segment of the national and, potentially, state economy. It creates jobs
and saves money for generators of waste. Recycling makes both environmental and economic
sense.
Recommendations regarding backhaul should be at least cost neutral. Any unfunded program,
regulation or new factor that creates additional incremental costs cannot be borne by local
consumers without regressive effects and the creation of disincentives. Any proposed solution
imposing additional cost burdens would likely be ignored and would ultimately fail, benefitting
neither consumer nor public health and environment. Exploring recycling is one option to help
make the Backhaul Alaska program successful, as it could potentially generate revenue instead of
simply costing the program money.
4.1 Exploring Recycling as a Commodity
Recycling commodities came about due to the public awareness of the value and importance of
recycling to reduce the use of raw materials in the production of the world's goods and services.
EPA estimates that scrap recycling in the United States saves the carbon dioxide (C02) equivalent
of 410 million tons of greenhouse gas emissions annually. In addition, electronic scrap recycling
is one of the most dynamic and fastest growing segments of the scrap recycling industry. It
generated an estimated revenue of more than $5.2 billion to the U.S. economy in 2010, employed
more than 45,000 people (30,000 full-time), and collected and processed domestically more than
3.5 million used and end-of-life electronics.
To generate revenue, the backhaul program could stockpile high-end metals and recycle the
material at a time when metal markets are most favorable. If scrap is drained of fluids and toxic
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products and left in place, it does not present the health risks the Backhaul Alaska program
prioritizes. However, the logistical challenges associated with stockpiling material may outweigh
its pricing benefits. Indeed, one reason Backhaul Alaska started is because villages had no place
to put their hazardous wastes or scrap metal. Additional storage facilities and designed salvage
pads are too costly, or the required land not available. Conditions are very cramped in rural Alaskan
communities because of the high construction costs. Building a new road costs a minimum of $1.5
million per mile. The equipment to manage stored materials and the construction of a pad
impervious to climatic permafrost melt raises costs substantially.
E-waste recycling should also be considered as a resource for generating revenue to cover the
expense of backhaul. Consolidating materials at regional hubs will likely be the most advantageous
method of improving recycling rates for e-waste. Consolidation provides the economy of scale that
may generate revenue for some materials for which recyclers will not otherwise pay. Generally,
recycling e-waste avoids the costs of disposal in addition to the direct value of e-waste materials,
making it beneficial from both standpoints. However, it should be noted that there is currently no
avoided disposal cost in rural Alaskan communities because there are currently no user fees, no
practical enforcement of proper landfill closures, and new landfills are grant-financed or not built
at all. Backhaul items, other than scrap that need not be landfilled, are not a large percent of the
waste stream (all household hazardous wastes combined comprise between 1% to 5% of typical
municipal waste streams).
4,1,1 Recycling Industry Jobs
The Institute of Scrap Recycling Industries (ISRI) produces periodic reports detailing information
on the state of the U.S. scrap recycling industry. ISRI estimates 460,000 jobs are supported by the
recycling industry in the U.S. and that the industry contributes $90 billion in annual economic
benefit. The organization also tracks jobs created by exporting scrap material to overseas markets,
where scrap plastics, paper and metal are refined and processed before re-entering the
manufacturing stream. According to a study conducted by John Dunham and Associates for ISRI,
U.S. scrap exports directly and indirectly support some 162,000 U.S. jobs while having generated
$30 billion in export sales in 2010, helping the U.S. trade balance.
It is important to note that the scrap recycling industry already provides jobs in Alaska and has the
potential of generating additional revenue. There are an estimated 778 jobs supported by the
recycling industry in Alaska that pay average wages and benefits of $79,300 per year. In addition,
the scrap recycling industry in Alaska accounts for $21.23 million in federal, state and local taxes.
Partnering with Backhaul Alaska may present an opportunity for recycling entities (businesses,
NGOs, non-profit organizations) to increase the quantity and impact of recycling in Alaska. This
increase, if achieved, would also provide economic benefits to the parts of Alaska most in need -
rural Alaskan communities. This opportunity should be explored further, including whether there
is any potential funding that could help implement recycling programs to achieve these benefits.
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4.1.2 Scrap Metal Potential for Revenue
The scrap recycling industry's total economic impact in Alaska is $195.03 million. When all scrap
materials are considered, the scrap recycling industry accounts for 0.38 percent of Alaska's total
economic activity. See Appendix D on pages 67-68 for a full report from ISRI.
It should be noted that Alaska's scrap metal activity is currently urban-based. It relies on the
State's road system and rail belt along with some hub activity. Scrap-metal companies in Alaska
have evaluated the potential for generating revenue from scrap in rural Alaskan communities and
have thus far determined it is not worthwhile. However, the consolidation of materials in a hub,
barge sponsorship, and opportunistic transportation of materials all may help to tilt the balance in
favor of generating adequate revenue.
Further Study: Estimates of rural Alaskan communities-level scrap metal,
electronics, and batteries are available. Further study is needed to understand
the metals market futures that would bring net revenue to the program over
and above the cost for construction of village and hub infrastructure to store
metals during recessional times.
4.2 Co-Op Business Model
The EFAB was tasked with researching other business models. One such approach is developing
a cooperative (co-op) business model that brings communities and others together to remove the
waste in rural Alaskan communities. The cooperative form of business is a distinctive model that
has been broadly used worldwide to help groups of people obtain goods and services that would
otherwise not be available to them, and to do so in a fair and equitable way. It is, perhaps, the only
major business model that is associated with a specific set of principles and values. Properly
understood, these principles provide key insights about how to powerfully and sustainably use the
cooperative business model.
Not surprisingly, there can be some misunderstanding about how a group can best go about the
process of starting a co-op. The Board's vision of a cooperative economy is of an interdependent
dense network of rural communities that allows them to meet their needs through principled
democratic ownership of the business, and that provides care for the communities involved,
combats injustice and inequity, and promotes conscious self-governance. The cooperative
economy is embedded within and helps create a cooperative society aware of its place in a
cooperative ecology.
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A co-op provides its members the ability to improve their bargaining power by utilizing the
principle of strength in numbers. Co-ops are owned and controlled by the members, a community
of people with common interests, who in turn benefit from the convenient format. Frequently, co-
op businesses are formed to obtain better prices on local food or common products. However, other
types include consumer, worker, producer, and purchasing co-ops. Before starting a co-op, it is
highly recommended that the following documents are prepared.
1. Feasibility analysis
2. Business plan
3. Incorporation of co-op group
Recommendation: Evaluate seriously and in greater detail the possibility of a
co-op model and how that might work in Alaska. The Workgroup strongly
encourages contacting the U.S. Department of Agriculture Rural Development
Office in the state of Alaska or the National Cooperative Business Association
to connect with someone familiar with establishing cooperatives in the area.
Also contacting the Secretary of State to procure literature on the state laws
affecting co-ops is a helpful resource.
4.2.1 Feasibility Analysis
The Board recommends conducting a feasibility analysis to determine the financial impact from a
decrease or increase in changes in backhaul waste volume or operating costs. The analysis should
include factors such as facilities, logistics, equipment, expected operating costs, labor needs, cash
flow requirements, up-front capital, debt capital, debt maintenance, and whether the co-op will
operate via stock or non-stock cooperative. The analysis and business plan should then be
presented to potential members and agreed upon according to rules established by the cooperative.
Further Study: A detailed feasibility analysis of Backhaul Alaska operations is
needed so that potential co-op members understand their fees (or stocks) for
which they are responsible.
4.2.2 Business Plan
A model business plan has been developed by the EFAB that can be used by the Backhaul Alaska
group. The model narrative and assumptions are provided in Appendix B. The Board's goal is to
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ensure that this document is flexible enough to use among the many groups involved. It is the
belief of the Board that each Alaskan community will be unique.
The Board suggests that Backhaul Alaska develop a business plan and determine how to secure
financing. Although some of the financing will come from members via stocks or membership
fees, the group may be able to procure funding from financial institutions with co-op experience.
The local Rural Development Office or the National Cooperative Business Association are good
resources for exploring and implementing this process.
Further Study: Backhaul Alaska must determine their options for securing
financing. A completed business plan is needed to help identify these options
and pursue them.
Recommendation: Although some of the financing will come from fees and
other as yet unidentified mechanisms, Backhaul Alaska may be able to procure
funding from financial institutions that work specifically with co-ops. Contact
the local Rural Development Office or the National Cooperative Business
Association to start off in the right direction.
4.2.3 Incorporation of co-op group
The Board suggests that the communities incorporate a co-op. The co-op group should determine
which members would benefit from the type of co-op that is established. This can be done by
contacting neighbors, posting flyers on bulletin boards, and contacting local news outlets and radio
stations. Once interest is initiated, then it will be necessary to convene the group. Potential
members can discuss what a co-op is, the need for it, solutions, potential benefits, initial financial
investment, tax implications and potential financial risks. Based on these discussions and decide
if and how to participate.
The co-op will have to establish bylaws, which should detail membership requirements, member
duties, reasons for member expulsion, meeting protocol, elections of officers, term lengths and
dissolution of the cooperative. At a minimum, the group should ensure that those engaged can
handle the responsibility of managing the co-op. An important part of the process is that members
will need to sign a contract that everyone agrees to.
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Future Recommendation: If the feasibility analysis, and the sociocultural,
political, and infrastructure implementation considerations, indicate a co-op
model is best, incorporate the co-op and develop the necessary paperwork for
membership. The contract should detail when and how much money is due,
when products need to be picked up and the notice required for opting out of
the co-op.
4.3 Summary of Financing and Funding Options
Other financing strategies are possible with a more detailed evaluation and should be outlined to
ensure the correct set of strategies is selected. For example, Backhaul Alaska was originally
conceived by Alaska U.S. Senator Lisa Murkowski as being similar to the Adopt-a-Highway
system: in which private corporations could sponsor a barge. The framing group for Backhaul
Alaska additionally envisioned the ability of private corporations to sponsor a region or village(s).
These options are worth further evaluation, particularly given the number of resource development
investors and rural Alaskan corporations in the State.
Further study: The suite of financing mechanisms and models for Backhaul
Alaska has yet to be identified. This research is necessary to ensure the
greatest chance of program success.
Regardless of the long-term financial structure for Backhaul Alaska, given the developmental
nature of this project, funding opportunities for startup, infrastructure, and planning costs are
possible through foundations.
Recommendation: Assess whether there are opportunities to partner and
potentially receive funding from the Bill and Melinda Gates Foundation,
Google.org, or other foundation which focuses on economic opportunity,
provides tools, and financial assistance. Assess becoming a World Bank
member to gain support and awareness of the needs for backhaul in Alaska.
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tlons 1 volving Outside Entities
The Board acknowledges that rural Alaskan communities may have additional initiatives that fit
their cultural and social structures better than traditional financing and commercial approaches.
However, this report explores whether there are opportunities to involve outside entities, such as
product producers, industry, the federal government, or state government in paying for backhaul.
If there are opportunities, this section explores what some of those opportunities may look like.
ended Producer Responsibility
As stated earlier, the Solid Waste Alaska Taskforce (SWAT) is exploring whether a producer
responsibility initiative would be possible in Alaska. A producer responsibility initiative is one
where manufacturers of products would take on a cradle-to-grave responsibility and cover some
portion of the cost of backhaul. The SWAT is also looking at programs that might influence
consumers to alter purchasing practices or other behaviors that could reduce the volume and/or
costs of backhaul.
Currently, Alaska has no extended producer responsibility (EPR) laws. The types of EPR laws
already implemented in other states have product categories that include appliances that contain
refrigerants, auto switches, batteries, carpet, cell phones, electronics, florescent lighting,
mattresses, mercury thermostats, paint, pesticide containers, pharmaceuticals, and other items that
may require special disposal. Establishing an initiative of EPR guidelines would have sustainable
economic, health, and air quality benefits.
EPR requirements may encourage manufacturers to eliminate the amount and toxicity of materials
during the development of its product to minimize the complexity and cost of final disposal or
reuse. Showcasing data from other companies on their increased performance and revenues as a
result of reducing waste can incorporate the practice of Extended Producer Responsibility as a
systemic core culture. Actions and activities that could be enacted are stated in the article
"Extended Producer Responsibility: Making Green from Green" and includes increasing a
company's competitive edge, their business process, and efficiencies (Attinger, 2006).
An EPR program could potentially create significant revenue and environmental benefits for
Alaskans through a recycling program. The companies engaging and participating in this strategic
opportunity would save money by creating a partnership between the state, the government,
community and the consumer (Kaye, 2012). In addition, by working directly with the communities
negatively impacted by the waste and environmental issues, environmental concerns could be
curtailed, and environmentally friendly waste management practices could be developed and
implemented. The start of "cradle to grave" producer practices would allow the producer to better
assesses, identify, and address issues or needed change more quickly, effectively, and efficiently
for reducing the environmental impacts currently plaguing communities in Alaska, particularly
rural ones.
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A collaborative stakeholder stewardship council for environmental and economic strategic
planning could be devised with best practice approaches for statewide policy enactment. Policies
could include workforce development programs and up-skilling for sustainable economic capacity
building.
EPR diverts spent products to recycling that would otherwise be left in homes or discarded in
landfills. Not all of the collected e-waste under EPR Programs is targeted for recycling; some
materials are landfilled, and often in ways that contaminate the environment. For example, e-waste
recycling and disposal sites in Vietnam and China are associated with adverse impacts to
community health. The environmental, health, and monetary cost of non-recycled or poorly
recycled materials versus the benefit of EPR should be assessed. For rural Alaska, diverting the e-
waste, batteries, and other waste from unlined landfills with open burning will help those rural
communities. For urban Alaska, diverting materials to recycling may come with some cost to the
environment or health of a community out-of-state. These concerns can be addressed and mitigated
by developing a quality control program that targets and outlines the goals and objectives of an
EPR program.
Since Alaska only has materials recovery facilities that ship the prepared product out of state for
processing, all materials collected through an EPR program would be exported. However, there
may be potential for a reuse market in urban centers that would generate revenue and create jobs.
Habitat for Humanity already operates a re-use store for housing materials, and according to the
largest Anchorage-based electronics recycler, many items come through the waste stream that still
have a useful life and are quite valuable. "The Reuse People" located in San Leandro, California
might consider partnering to open a type of "re-Store/re-Use," or be willing to share information
on how to design a re-use location based on products and markets in Alaska.
A variant of EPR would involve creating a producer-based fee program, which would generate
funds that could be applied to recycling and backhaul activities. In this scenario, producers of
products that are contributors to the waste disposal dilemma in rural Alaska would be responsible
for collecting a fee on the products they sell. Proceeds from these fees would be transferred to state
and local governments to fund backhaul and recycling activities. An example of this approach can
be found in item 4 of Appendix C, which describes the North Carolina Disposal Fee program.
To address the needs of Backhaul Alaska, a producer fee program could assess product fees in
proportion to the environmental impact the specific products create. For example, the producer fee
imposed on a refrigerator (high waste impact due to size and refrigerant gasses) would be higher
than the fee imposed on a laptop computer. Such a program would no doubt meet opposition
because it would increase the cost of products for end users, but it would also provide an incentive
for producers to design products with lower environmental impacts in order to improve the
competitiveness of their products. The capacity of appropriate state agencies to administer this
type of program would need to be evaluated carefully prior to implementation.
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Yet another variant on this approach would be to apply a broad "environmental impact tax" on all
products (or a broad range of products) that feed into the rural waste challenge. This could have
the benefit of being simpler to administer and would be less impactful on specific product
categories and producers. It would, however, broadly increase the cost of consumer goods for the
affected communities and would certainly face political opposition.
Community opposition to these producer fee concepts could be partially addressed by offering tax
credits to individuals to offset (in part or in full) the amount of producer fees they pay each year.
However, it would be important to understand how meaningful such a tax credit would be for
lower income individuals.
Please see Appendix C of this report for EPR case studies and other related information.
Recommendation: Develop a stakeholder stewardship council for
environmental and economic strategic planning that would evaluate and
develop a workable Extended Producer Responsibility program.
Recommendation: Consider adopting enabling state and tribal legislation that
mirrors EPR policies in force in New York City. Even those that might increase
up-front costs by way of deposits would still be refundable and cost-neutral to
the consumer. If collection sites are available at or near existing retailers, it
would nearly eliminate any inconvenience to the consumer who would be
bringing their business to the retailer anyway.
Recommendation: The Backhaul Alaska program should reach out to
computer manufacturers to inquire if they would be interested in the e-waste
that needs to be removed. This could be done on an in-kind basis if the
benefits outweigh cost. See Appendix C, case study C.5.
Furthermore, consider a federal tax credit or other incentive to the commercial/retail entity to
minimize or even offset any kind of legitimate capital and operating costs undertaken by the
commercial/retail entity to support such programs. This could potentially allow even the smallest
such entities to participate, maximizing the reach of the programs. While not comprehensive for
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items such as durable goods, such policies could still be impactful in at least reducing litter and
promoting the collection of some hazardous materials.
5.2 Neutral Cost Incentives
It is important to avoid a cost increase for Alaskans to the point of political infeasibility, or
financial hardship on rural communities and low-income households. For example, bottle bills
have been tried in Alaska several times and are politically infeasible because they involve an
explicit "fee." Producers will also not be in favor of change if the costs to do so is significant.
Perhaps a federal tax credit or other incentive for the commercial/retail entity to minimize or even
offset any kind of legitimate capital and operating costs undertaken by the commercial/retail entity
to support such programs would be a way to make them politically and economically feasible. This
could potentially allow even the smallest such entities to participate, maximizing the reach of the
programs. While not comprehensive for items such as durable goods, such policies could still be
impactful in at least reducing litter and promoting the collection of some hazardous materials.
Other mechanisms that could counter or mitigate these costs should also be explored.
Recommendation: While the Workgroup highly encourages extended
producer responsibility (EPR) programs, it comes with a caveat. If such a
program results in significant cost increase to the consumer/communities,
some other mechanism must be created to counteract that increase so that
the net effect on communities is neutral or negligible.
Further Study: Identification of promising mechanisms that provide for cost
neutrality would be beneficial.
5.3 Involving the Federal Government - Government Disposition Services
A potential role for the federal government may be to leverage disposition services from the
military and/or GSA to take materials for reuse or recycling and move materials through to buyers.
This infrastructure could support Backhaul Alaska. While the Defense Logistics Agency provides
disposition services for military installations, the General Services Administration (GSA) provides
similar services for domestic agencies. Program cost matching for infrastructure can offer
significant cost savings, especially if freight is included. We are not implying that this type of use
of GSA is likely in Alaska as there may be many barriers to do so. However, it may offer a future
potential solution, so it should warrant a preliminary investigation to see if it might be possible.
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Recommendation: Identify the detailed procedures and potential of how the
use of GSA disposition services could result in cost savings specific to the
infrastructural needs of Backhaul Alaska.
5.4 Involving the Federal Government - Military Recruit Training
The EFAB investigated the potential to use military recruit training to help clean up waste in
Alaska. While this training theoretically could involve cleaning up a rural Alaska landfill, the more
likely scenario is packaging waste for the backhaul program. Cleaning landfills is highly complex
and would be difficult to do in a training environment. Packing waste is much more conducive to
a short training exercise and should be considered the more reasonable approach for using military
training. However, this type of resource should only be considered an extremely site specific, and
instance specific resource, not a long-term steady source of assistance. Within these parameters,
there may be creative opportunities to leverage military programs to help make Backhaul Alaska
program funding go further. Specific types of programs are outlined below.
5.4.1 Alaska National Guard
The Alaska National Guard could joint venture with other military branches to address areas in
which military infrastructure needs align with Alaskan community infrastructure goals. Below is
the stated purpose of the Alaska National Guard civilian education program.
"Civilian education is related directly to recruiting and retaining quality service
members, enhancing their career progression, both military and civilian, and
increasing the combat readiness
Some of the community needs could be aligned by creating programs/development projects in
support of assisting the Guard in getting their members combat ready. The Guard could provide
skilled and knowledgeable workers for needed project development goals. The potential
partnership could be presented as an "economic emergency" for Alaskans, which is part of the
stated mission of the Alaska National Guard. It is also possible that academic credit could be
provided for some of the work, bolstering the mission of the Guard.
5.4.2 Joint Pacific Alaska Range Complex
The Joint Pacific Alaska Range Complex received military construction awards totaling $400
million in 2012. These funds directly support the goals of military training and indirectly support
the state of Alaska by developing new locations that create revenue for the state. The military
provides infrastructure development based solely on the needs of the military. JPARC may
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consider additional projects that could support the communities' needs if projects are aligned with
their military agenda.
Alaskans also benefit from economic support and improved infrastructure.
Investments in the JPARC grow a stronger Alaskan economy, including
modernized and enhanced infrastructure that makes the state more attractive
for businesses and economic growth (JPARC, 2018)".
5.4.3 Alaskan Department of Military and Veteran Affairs
The U.S. Veterans Affairs office could be seeking opportunities for veterans to volunteer in
support of addressing their communities' needs. There may be an opportunity to partner with
various veteran councils, such as those who organize the veteran leadership conference.
Recommendation: Seek out and partner with various interested veteran
councils. They may provide skilled voluntarism for a variety of roles.
5.4.4 Joint Base Elemendorf-Richardson
As the largest military base in Alaska, Joint Base Elemendorf-Richardson (JBER) offers a
technical educational program for its members. JBER has multiple educational partners that
include the University of Alaska Anchorage, Embry-Riddle Aeronautics University, Central Texas
College, and Wayland Baptist University. The previously mentioned partnership could be a
learning resource in building a workforce development program, with the potential partner
opportunity for development of a new workforce model to up-skill the rural Alaska community
workforce for economic sustainability. The new workforce programs could be operated on site as
well as within the community setting, building connectedness for long-term relationships. A work
"shadowing" component could be included to strengthen the knowledge base of the workforce
program participant.
5.4.5 Alaska Aerospace
Although the aerospace arena is not operated by the military, it could be taken into consideration
and sought as a community funding partner for the Kodiak region since they are based on Kodiak
Island. They may also be able to provide other support, such as human capital and technology for
the program.
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Recommendation: Communicate with the appropriate military points of
contact for Backhaul Alaska leveraging opportunities and assess the potential
and scope of military assistance in practice.
5.4.6 Summary of Military Recruit Training Potential
Potential institutional channels exist within the Alaska-based military branches for leveraging.
However, it is not known whether these opportunities are practicable or acceptable from the
military's perspective. Prior conversations between military representatives and Backhaul Alaska
developers have generally concluded with the military only interested in cases where planned
military training aligns specifically with a Backhaul Alaska opportunity, such as a "one-off
backhaul event at the time and location of the military's choosing. The extent to which leveraging
the use of military personnel would reduce the cost burdens for the program would need to be
further explored.
5.5 Involving the State Government
The Board delved only briefly into ideas for contributions from the state government. These
included the following topics:
Emergency prevention - are there benefits to aligning this effort with hazard
mitigation or emergency prevention programs in the state beyond using the lens of
hazard mitigation as a selling point to support the program?
Establishment of fee districts - what are the tradeoffs for states to establish fee
district authorities in the state and what are considerations and recommendations for
such an effort in Alaska?
5.5.1 Are there benefits to aligning this effort with the hazard mitigation or emergency
prevention programs in the state?
The Alaska Department of Homeland Security and Emergency Management oversees emergency
management at the state level. Relevant offices/initiatives include:
1. SERC - State Emergency Response Commission - ensures that state, federal, and local
emergency planning and preparedness is established, integrated, and mutually
supportive. SERC was formed in response to concerns about oil spills but has expanded
its scope to other types of hazards in recent years. SERC "is tasked to address hazardous
materials issues and all other hazards and threats that might create an emergency
situation in Alaskan communities."
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o SERC works with local planning units to manage hazardous materials. The
following statute pertains to management of hazardous wastes:
http s: //ready. al aska. gov/ SERC/statute
o SERC works with and coordinates Local Emergency Planning Committees
(LEPCs)
2. The Alaska Department of Military and Veteran Affairs (ADMV) collaborates with the
Department of Homeland Security on hazard mitigation planning. ADMV offers
hazard mitigation grants to local governments. It is not clear if this grant could fund
local-level backhauling based on the announcement.
3. The State of Alaska Hazard Mitigation Plan is the major instrument that informs state
actions and strategy on hazard mitigation. While hazardous materials are characterized
in sec. 3-93, and analyzed in sec. 5-81, there is no explicit characterization of, nor
strategy for, hazardous waste or materials that are already landfilled or stockpiled.
4. Alaska SERC Statute on Reporting Hazardous Materials: Alaska Statute 29.35.500
Hazardous Chemicals. Materials, and Waste: This statute stipulates that "the
requirements of this section may be imposed by a municipality on a business or
government agency that handles hazardous chemicals, hazardous materials, or
hazardous wastes outside of the boundaries of the municipality if a fire or other
emergency involving the chemicals, materials, or wastes would be (1) likely to
adversely affect persons or property in the municipality; or (2) responded to by
emergency response personnel whose service area includes all or a part of the
municipality."
Recommendation: Consult with the Alaska Department of Homeland Security
and Emergency Management to see what opportunties there may be to
partner or obtain fancial resources.
5.5.2 What are the tradeoffs for establishing fee district authorities in the state?
EPA's State Funding Mechanisms for Solid Waste Programs defines multiple ways that states may
divert funds for solid waste management programs such as backhauling. The establishment of local
fee districts are one mechanism described in the reportdefined as "fees that provide money to
the local regulatory body for solid waste activities." The monies collected from fee districts
generally fund the district's local solid waste management activities. Fee districts differ from
tipping fees or surcharges because the money is retained for statutory purposes established in state
code and are collected by and for the district (whereas surcharges or tipping fees may be retained
by facility owners or even collected by the state itself). States that have established fee districts
include:
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1. Indiana: 70 solid waste management districts that both levy a tax and have district fees
that charge per ton for solid waste disposal.
2. Ohio: Solid waste districts are authorized by the state to collect tiered fees for disposal
at landfills. The tiered fee system provides lower rates for locally generated wastes,
higher rates for waste generated within Ohio, and highest for out-of-state waste. The
Ohio Revised Code stipulates the types of uses that generation fees may be used for,
including implemented solid waste management plans, education and outreach, paying
host fees to other counties, supporting health departments and supporting local law
enforcement [See Ohio Code Sec 3734.573. PRC Section 3734.57(B) OAC Rule 3745-
502-031.
5.5.3 What are possibilities for fee districts given Alaska's existing codes?
Could an ordinance similar to the Ohio example, described in Section 5.5.2 above, be adopted in
Alaska, and could it include backhauling? Alaska's solid waste law is: 18 AAC 60 Solid Waste
Management Article 6 describes user fees (pg. 84 of above document).
"The owner or operator of a solid waste disposal facility shall pay the
applicable fees as prescribed in Tables E-l, E-2, E-3, and E-4 of this subsection.
The owner or operator of a facility subject to the annual fee requirement shall
continue to pay the annual fee until the department approves termination of
the post-closure obligations under 18 AAC 60.270."
It does not appear that there is any existing rule or code that precludes the establishment of
backhaul or solid waste fee districts.
Recommendation: Delve further into the potential for, and tradeoffs of
backhaul/solid waste fee districts.
6 Conclusion
Backhaul Alaska has the potential to significantly improve the health and environment of the rural
Alaskan communities it is intended to serve. If successful, it has the potential to create local jobs
and economic development both locally and throughout the state. A number of promising finance
opportunities and ventures are conceivable and worthy of further study.
To arm the program with the financial tools and information required to succeed, the following
areas need further study, development, and analysis:
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1. identification of options and tradeoffs for moving program fee payments from rural
Alaskan communities to the program;
2. further identification and detailing of financing options possible for the program;
3. options for organizational governance structure, including a feasibility analysis for a
potential co-op association;
4. further development of the program business plan;
5. development of a model optimizing regional and rural Alaskan village storage
infrastructure for future metals, e-waste, and battery market highs with construction,
maintenance, and land space constraints;
6. role of federal agency-funded rural development programs in paying local solid waste
programs fees to cover disposal of waste from infrastructure projects;
7. options and tradeoffs for establishing fee districts to fund solid waste programs and
backhaul;
8. tradeoffs for designing the Backhaul Alaska village fee program to ensure it aligns
with the overall program goals and serves participating communities equitably while
supporting local jobs;
9. assess how rural Alaska communities can best leverage their EPA Indian General
Assistance Program Grant funds and any other potential grant funding to make funding
for backhaul go further;
10. the question of how community revenue should be used and moved is primary for EPA
Region 10 and the Backhaul Alaska program. Revenue will be generated from the
communities served and local, regional, and statewide backhaul program costs need to
be covered. Whether and how funds are moved from the community and back again is
a complicated question and outside the expertise of EPA Region 10 and Backhaul
Alaska stakeholders;
11. estimates of rural Alaskan communities-level scrap metal, electronics, and batteries are
available. Further study is needed to understand the metals market futures that would
bring net revenue to the program over and above the cost for construction of village
and hub infrastructure to store metals during recessional times;
12. a detailed feasibility analysis of Backhaul Alaska operations is needed so that potential
co-op members understand their fees (or stocks) for which they are responsible;
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13. determine Backhaul Alaska's options for securing financing (A completed business
plan is needed to help identify these options and pursue them.);
14. identification of the suite of financing mechanisms and models for Backhaul Alaska
(This research is necessary to ensure the greatest chance of program success.); and
15. identification of promising mechanisms that provide for cost neutrality would be
beneficial.
The EFAB has the following recommendations:
1. identify the full scope of potential benefits and cost savings related to health and environment
engendered by Backhaul Alaska, including a quantitative range where possible, and use the
information to promote the value of the Backhaul Alaska program;
2. evaluate seriously and in greater detail the possibility of a co-op model and how that might
work in Alaska (The Board strongly encourages contacting the U.S. Department of
Agriculture's Rural Development Office in the state of Alaska or the National Cooperative
Business Association to connect with someone familiar with establishing cooperatives in the
area. The Board also encourages contacting the Secretary of State to obtain literature on state
laws affecting co-ops.);
3. although some financing will come from fees and other as yet unidentified mechanisms,
Backhaul Alaska may be able to obtain funding from financial entities that work specifically
with co-ops (EFAB suggests starting by contacting the local Rural Development Office or the
National Cooperative Business Association.);
4. if the feasibility analysis, and the sociocultural, political, and infrastructure implementation
considerations, indicate a co-op model is best, Backhaul Alaska should incorporate the co-op
and develop the necessary paperwork for membership (The contract should detail when and
how much money is due, when products need to be picked up and the up and the notice
required for opting out of the co-op.);
5. assess whether there are opportunities to partner and potentially receive funding from the Bill
and Melinda Gates Foundation, Google.org, or other foundation which focuses on economic
opportunity, provides tools, and financial assistance. Become a World Bank member to gain
support and awareness of the needs for backhaul in Alaska.
6. develop a stakeholder stewardship council for environmental and economic strategic planning
that would evaluate and develop a workable extended producer responsibility program (EPR);
7. consider the feasibility and adoption of enabling state and tribal legislation that mirrors EPR
policies in force in New York City (Even those that might increase up-front costs by way of
deposits would still be refundable and cost-neutral to the consumer. If collection sites are
available at or near existing retailers, it would nearly eliminate any inconvenience to the
consumer who would be bringing their business to the retailer anyway.);
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8. reach out to computer manufacturers to inquire if they would be interested in the e-waste that
needs to be removed (This could be done on an in-kind basis if the benefits outweigh cost.
See Appendix C, case study C.5.);
9. while the Board highly encourages EPR programs, it comes with an important caveat (If such
a program results in significant cost increase to the consumer/communities, some other
mechanism must be created to counteract that increase so that the net effect on communities
is neutral or negligible.);
10. identify the detailed procedures and potential of how the use of GSA disposition services
could result in cost savings specific to the infrastructural needs of Backhaul Alaska;
11. seek out and partner with various interested veteran councils that may provide skilled
voluntarism for a variety of roles;
12. communicate with the appropriate military points of contact for Backhaul Alaska leveraging
opportunities and assess the potential and scope of military assistance in practice;
13. consult with the Alaska Department of Homeland Security and Emergency Management to
see what opportunties there may be to partner or obtain fancial resources; and
14. delve further into the potential for, and tradeoffs of, establishing backhaul/solid waste fee
districts.
The EFAB recommends that EPA, particularly EPA Region 10, use this report to engage with partners in
Alaska regarding removing backhaul from remote rural Alaskan communities. The Board recognizes that
this issue is one that cannot be solved at only one level of government. An issue of this complexity will
require the cooperative efforts of federal, state, local, and non-governmental partners to address.
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7 References
Attinger, Steve. (2006). Extended Producer Responsibility: Making Green from Green.
GreenBiz. https://www.greenbiz.com/blog/2006/ll/09/extended-producer-responsibility-
making-green-green
Baugh, J. (2013). Bulky item drop-off~no charge. San Antonio Express-News. Retrieved from
https://www.mysanantonio.com/news/local_news/article/Bulky-item-drop-off-no-charge-
4203663 .php
Bin Idris, D. A. (2009). Waste Management What is the Choice: Land disposal or Biofuel? In.
Business recycling case studies. Austin, TX: City of Austin Retrieved from
http: //austintexas .gov/zwease studies
Chapman, S. (2017). How to start a co-op business. Retrieved from https://bizfluent.com/how-5927966-
start-co-op-business.html
Chu, Z., Wu, Y., & Zhuang, J. (2016). Municipal household solid waste fee based on an increasing block
pricing model in Beijing, China. In.
Cooperative Development Services (2012). Starting a Co-op. Retrieved from
http://www.cdsus.coop/services/cooperative-development/starting-co-op
Dunne, L. (2004). An Investigation into Waste Taxes and Charges: University College Dublin.
Edberg, K. (Producer). Co-op 101. Retrieved from: http://cdsus.coop/sites/default/files/co-op_101.pdf
Kaye, Leon. (2012). Extended Producer Responsibility Gains Traction in the US. Guardian
Professional Network, https://www.theguardian.com/sustainable-business/extended-producer-
responsibility-united-states
KUAC, (2018), Connecting Alaska To the World. Retrieved from http://fm.kuac.org/term/joint-pacific-
alaska-range -complex
Minton, Ann P. and Randall L. Rose. (1997). The Effects of Environmental Concern on Environmentally
Friendly Consumer Behavior: An Exploration Study. Journal of Business Research, Volume 40,
Issue 1, 37-48.
Seth, K., Cobbina, S. J., Asare, W., & Duwiejuah, A. B. (2014). Household demand and willingness to
pay for solid waste management service in Tuobodom in the Techiman-North District, Ghana. In.
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Appem . . "" i in mil "" 11 \sed Programs
A.I Introduction
The main focus of this report is to develop recommendations for EPA and the Backhaul Alaska program.
To attain funding, Backhaul Alaska will set fees for services at the community level. In order to pay
Backhaul Alaska service fees, communities will need to determine how to generate that income from
households within the community. While neither EPA nor Backhaul Alaska will be responsible for
assessing the actual fees at the household levels, both groups can provide a range of options for communities
to consider. The information in this appendix is provided for that purpose - a range of options that can be
considered by communities. The EPA and/or Backhaul Alaska program can provide a copy of this
appendix to communities who may be interested in seeing the various options available to fund the program
at the household level.
One of the main considerations with any community level payment system is that it is a highly
local decision and one that needs to be developed with a lot of local input. This appendix considers
three main factors that are important to setting local fees to ensure success:
1. understand there is a challenge that requires a local solution;
2. communicate through a collective voice; and
3. consider the best metrics before choosing a fee.
Each of these considerations is described further below.
A "" .derstand th ฆ a challenge that requires a local solution
The most important step in developing local solutions to a problem is to establish general
agreement from its constituents (the potential fee payers) that there is a problem that requires a
solution. Within each community, ensuring that there is some level of consensus and general
agreement that backhauling wastes is a challenge requiring some type of local solution should be
the starting point. This includes identifying and clearly articulating the extent of backhaul waste
concerns and the need for revenue.
In most communities, residents are intimately aware of their waste problems because they see, and
often smell, their uncovered landfills every day. The vast majority of landfills are within one mile
of homes and the school. Elected leaders, respected elders, passionate community members, and
environmental staff often have the greatest success at convincing the public to pay solid waste
fees. They share a common understanding of their community's culture and they grapple with the
same harsh realities of hazardous waste risks. For those communities where, sufficient support for
fees has not been garnered, it may help to bring in experts or important stakeholders who can share
their knowledge and/or expertise about backhaul waste, the need for a financial solution (namely
rate payer fees), and the need for near-term investments to prevent the problem from worsening
and becoming more costly. Defining the problem clearly will help create a common vision that
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will lead to successful solutions. Proceeding with a common understanding of the need to backhaul
waste and of the need to generate revenue to cover shortfalls in funds can reduce resistance.
mmunicate through a collective voice
One way for communities to develop residents' understanding of the local backhaul financing need
is to establish a Citizens Advisory Committee (CAC), or another similar local group. For example,
many rural Alaska communities have Environmental Committees comprised of City and Tribal
Council members, elders, business owners, youth, and the public-at-large. The CAC can
specifically examine the issue of financing backhaul waste before choosing to implement a fee. A
potential structure of the CAC is given below.
A.3.1 Establishing a CAC for Financing Backhaul Waste:
The CAC should be initiated by either a tribal or city official, Tribal Council, or
another person of authority, such as a respected elder, to give weight and credibility
to the recommendations coming from the CAC.
Members should be comprised of citizen leaders and representatives from various
sectors of the community to represent different opinions and interests. For rural
Alaska communities these sectors are generally represented by a single
entity/institution, and include the health clinic, the school, the store, the church, the
Tribal and City Councils, and the Village Corporation1. Representatives from these
entities should be a range of ages, gender, and household income. It is important to
recruit elders and youth if they are not already represented. Additionally, other
community groups, businesses, or regional entities that may be present in the larger
communities are often helpful.
The total number of members should be as large as possible and determined by the
community establishing the CAC. Group dynamics should be considered when
determining the maximum and minimum sizes determined by the community.
The group should work to understand the gaps in the existing backhaul program and
focus on addressing how to finance these gaps in a sustainable way.
Initially, all fee options should be considered, along with the pros and cons of each as
they relate to the specific community. Once all options are assessed, the CAC will be
1 Alaska Native lands and villages are managed by regional or local, quasi-governmental, private corporate entities
known as Alaska Native Regional Corporations and Village Corporations: "(j) 'Village Corporation' means an Alaska
Native Village Corporation organized under the laws of the State of Alaska as a business for profit or nonprofit
corporation to hold, invest, manage and/or distribute lands, property, funds, and other rights and assets for and on
behalf of a Native village in accordance with the terms of this chapter." (43 U.S. Code ง 1602 - Definitions). For
additional information on these entities, refer to 43 U.S. Code Chapter 33 - Alaska Native Claims Settlement Act.
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in a better position to recommend the best option for the community to help ensure
the necessary community buy-in.
The CAC should have a good understanding of the costs associated with managing a
backhaul waste program. Every possible cost should be included in this calculation,
including operations and maintenance, contracts, administration, etc. Resources exist
to help the CAC understand these costs.
The CAC should have a good understanding of how the costs of a backhaul program
integrate with their overall solid waste management program, and the role of each line
item in attaining the community's goals of health and safety protection. For example,
a reduction in landfill operator hours to pay for battery recycling could place the
community in a worse situation than before.
nsider the best metrics before choosing a fee
Solid waste fees evolve based on costs, community acceptance, and other factors. Previously in
the United States, solid waste programs tended to be funded through a government's general funds
or other income not specifically associated with the solid waste program. Later, solid waste
program fees became standard, but they were not typically tied to the amount of waste generated
or collected, nor the level of service. Now, while not the case in rural Alaska, most programs link
fees to waste volumes and/or service level. When attempting to determine the best level of service
offered and fee basis for waste backhaul in Alaska, various metrics, as described below, may be
considered. Each should be thoroughly discussed by the CAC.
large per person,
A charge per person attempts to link a fee to the amount of waste generated. However, a per person
charge is based on the false premise that each person, regardless of age, generates the same amount
of waste, and that the amount of waste a person generates remains the same regardless of the size
of the household and level of product sharing. Household sizes in rural Alaskan communities often
change with the season or due to other undocumented changes in living arrangements. Assuming
it is the household that receives the bill, administering and tracking this metric would be difficult
due to fluctuations in household size and membership.
large based on household income.
The fee could be based on household incomes, with higher income households paying more and
lower income households paying less. This methodology relies on the belief that higher income
households have more disposable income to make purchases, which results in the production of
more waste. This theory would indicate that these higher income/higher waste producing
households should pay more. Research not specific to rural Alaska also indicates the willingness
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to pay for services is related to the level of income, with higher income levels being more willing
to pay.
While this approach may seem to have some merit, it has considerable challenges when it comes
to implementation. Monitoring and tracking income may be difficult, and it may be hard to gain
political acceptance for an approach of this type, particularly because it is alien to rural Alaskan
cultures. Structuring the fees may prove problematic since the incremental contribution may not
be linear, and household incomes may fluctuate greatly from year to year, as many jobs are
seasonal or temporary in nature. In addition, the income disparity in rural Alaskan communities
may not be sufficient for this approach to work well. Finally, while income might correlate to some
degree with the total amount of trash generated, it would tie less well with backhaul goods which
are special wastes and tend to be non-luxury items, such as vehicle batteries and electronic goods.
Rural Alaskan homes are small, and regardless of income, most households own the same number
of appliances, televisions, and computers.
large per Household
This is likely the most simplistic approach to assessing fees. A charge would be assessed per
account, regardless of size or persons per household. If a consumer is paying another utility
account such as energy or water, the fee could be assessed as part of that bill. This type of approach
is used by several villages successfully now to collect their waste fees. Residents pay a flat
environmental fee regardless of the number of trash bags produced. Access to all solid waste
services could be available to rate payers paying a mandatory solid waste fee assessed in the utility
bill. For example, in San Antonio, Texas, anyone is allowed to use the bulky waste collection
center for free with proof of residency. Parallel to this, village residents could drop off computers,
batteries, and even tires and appliances for free. A point to keep in mind is that the number of
persons per household would not be considered here. This could lead to subsidization when
households of different sizes are charged the same. However, that has not seemed to present an
issue in rural Alaskan communities, who tend to have more group-oriented attitudes.
large per Unit of Waste,
Charging by unit of waste allows for a direct relationship between consumption and cost,
potentially encouraging lower consumption, however, in rural areas with little enforcement it could
encourage illegal dumping to avoid the use fee. Additionally, this method requires significant
oversight and infrastructure, for example an appropriate scale and staff to weigh or count trash and
record it.
large per Unit of Consumption,
Charging for each unit of waste during purchase can encourage lower consumption without the
explicit link to disposal, potentially avoiding an encouragement for illegal dumping. This
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assessment may be seen as a tax and imposes a burden on the sales points for collection and
processing of a use fee. It does not make sense in rural Alaskan communities because there is often
a single local store, generally owned by the local tribal corporation. The only backhaul wastes sold
there are vehicle batteries. However, if the price is raised there, people will purchase in the hub
city, negatively affecting local revenue and potentially driving the sale of batteries to locations
where no surcharge is assessed.
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When dealing with solid waste management, reduction of the waste stream is generally always
considered a goal. The issue of reducing waste is fast becoming one of the more pressing
environmental problems and has been recognized worldwide. As a result, the concept of pay as
you throw is increasingly popular. Quantity-based fees force households to consider their own
waste production and disposal. However, the communities examined in this report generate much
less waste than in urban Alaska or the lower 48 states - as little as 1 pound per person per day,
compared with 4.5 pounds per person per day. Still, they have unlined dumpsites and are at risk of
breathing untreated waste smoke. The less trash, the less potential for health risks. Any program
that can link waste to cost of disposal sends an appropriate price signal to reduce trash generation
where possible.
In the case of Backhaul Alaska, households may find it difficult to significantly reduce their use
of the waste of interest, but maintenance of batteries, appliances, and electronics may extend
product life, thereby reducing waste generation.
A her questions to consider
A.5.1 Should the fee system he built to try to reduce the waste stream7
Education programs can be included in the cost of doing business as a means of reducing the fee.
Volume based fees send the most direct price signal. There were several options discussed in the
committee and further explained in the case studies, such as a white goods disposal fee or a paint
disposal fee, putting the responsibility of disposal during point of purchase by consumer or
producer. The issue with this type of fee is that they generally require support from national or
state law.
Reduction of waste may also take different forms. In Japan, there is a culture to not waste and there
are limited places to dispose of waste, so the philosophy of recover and reuse what you can in the
community is encouraged. For those who are resourceful, there is a place on site to separate
materials and it is encouraged to take material, glass, metal and/or other goods and repurpose them.
It is free to drop materials off and free to take them away.
Similarly, in rural Alaskan communities, using all resources is embedded in the culture. For
example, cardboard is used over and over again for anything from a table to a surface for cutting
fish. The dumpsite salvage/scrap metal pad is used as a sort of hardware store because there are no
other on-site options. A growing number of communities operate a reuse shed to provide a safe
place for residents to drop-off and pick up usable items. This number is still relatively small, but
the concept has great potential to spread if communities can overcome the limits on space and
building materials that are necessary for any new infrastructure.
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A.5.2 Would a higher rate bring more fraud or illegal dumping7
It is possible that charging higher rates would increase illegal dumping for those communities that
have forested areas and some local roads. It is a fine balancing act that communities must monitor
as their program is implemented. Education is imperative. The environmental cost to the
community where illegal dumping occurs will likely be higher than a fee over the long-term.
However, monetarily, it is unlikely that the community would ever be forced to pay for cleanup,
so in these communities, that incentive is not present.
A.5.3 Should community education be considered when evaluating the rate7
The body of research is consistent when discussing importance of community involvement. The
importance of community, community leaders and resident groups has been stressed, with the
effectiveness of community leaders based on increasing the strength of norms (Dunne, 2004).
Social norms are behaviors people expect of each other and personal norms are the actions people
feel an obligation to do. Minton and Rose (1997) found the personal norm has the most influence
on actual behavior. When people believe that an existing condition poses a threat of harm to others,
or their own personal action or inaction has the power to prevent harm, then individuals may
change their own behaviors.
While the local population in rural Alaska communities is aware of the dump and concerned about
its impact on their subsistence, it is not clear that all individuals understand the full health risk
posed by poor waste management. It is also not clear that community members believe they have
the power to change the situation themselves.
A. 5.4 Should the fee be based on each individual waste item or per trip to disposal site?
Linking a charge to weight, volume, or tag system has been shown to give people responsibility
and ownership of their waste and as a result control of their charges.
The flat fee paid in San Antonio appears to be successful as customers were getting something
(free bulky waste disposal) for what they paid for regardless if they actually used the site or not. It
was the City's method to help control illegal dumping. For Alaska, enforcement is a challenge as
landfill sites generally have no gates or fencing and are only staffed during a few hours each week
when an operator or technician is actively engaged in site operations. The volume of the
community's waste generation warrants only part-time landfill maintenance operations.
A.5.5 What is the appropriate timing of implementing the fee?
Backhaul is not needed on a regular basis. For small communities, the backhaul packaging and
shipping event itself can be just a few days once per year. The fee must be regular to consistently
support a system over the long-term. A regular fee should also keep the fee lower as it is collected
regularly over time rather than inconsistently and subject to more peaks and valleys depending on
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timing of costs. Regular fees can be accumulated in a reserve (saved) to cover periodic large costs,
such as occasional container shipments.
ucture/Cost Distribution
A.6.1 Flat rate
Under a flat rate program, all customers (household or business) would pay a flat rate for backhaul
services. This could be billed at any frequency from monthly to annually. Under this approach, it
may be appropriate to assess a different fee for businesses than households. This rate structure is
easy to understand and explain, and billing is straightforward for both separate billing and placing
the rate on another utility bill. Decisions on the billing approach (separate bill versus billed with
other utility services) will help inform appropriate billing frequency. Due to the simplicity of this
approach, distinction cannot be made for those who dispose of little versus those who dispose of
significant amounts of material. The fee would be established based on estimated program costs
and adjusted on a regular basis to account for unexpected shortfalls or savings.
A.6.2 Tiered rate
Tiered rates are more complicated and are normally assessed based on criteria such as household
size, income, or some other metric. This approach is more difficult to implement due to the need
for data specific to each customer. In addition, such data would have to be validated periodically,
and the administrative cost of such updates would need to be balanced with equity concerns as
changes occur. In addition, this approach also carries the risk of misaligning projected costs with
actual participation in the program, which could result in inadequate funding and a significant
increase in the tiered rate structure in subsequent years.
A.6.3 Variable rate, where fee increases incrementally based on meet!
A variable rate is normally established to reflect a subscription for disposing of a specified amount
of waste. With curbside solid waste collection/disposal, for example, customers subscribe to a
specified level of service (e.g., one 30-gallon can, one 90-gallon tote, etc.). This option is best in
areas where costs are well understood. This approach may be problematic for a backhaul program
given the infrequent need for the service, particularly if the fee is only for backhaul services and
not for ongoing local waste disposal. Households themselves would have difficulty determining
when their vehicle batteries and electronics would give out and thus would be unable to decide the
best service level.
A.6.4 Purchase a pass to bring backhaul waste to a limp-off depot or collection center
A per-use pass, similar to a pre-paid health club pass with a fixed number of uses per pass, offers
a simple use-related fee structure. The items being charged to the pass can be staggered. For
example, if you bring an appliance to the depot, it will cost you more than batteries or light bulbs.
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Those products with a recycle value may add a credit to your account. The community could
allocate some of the money collected towards surveillance cameras or towards an attendant. This
method of billing, along with other potential "pay as you throw" approaches, is perhaps the most
equitable, defensible, and easiest to implement of all options. However, challenges with
enforcement are a disadvantage of this structure. As most landfills are not secure, it would be a
challenge to manage illegal dumping at the site. Surveillance cameras are likely to be disabled in
some locations, particularly if successful education is not completed prior to the initiation of the
program. In addition, administrative processes would need to be developed to manage the
distribution of the passes and allow for either "reloading" of electronic passes or purchasing new
paper-based punch card passes. The former would require infrastructure to allow customers to
swipe the card at the gate/location. The latter would require an attendant to be present to punch the
card. Both require costs that would not be necessary under some of the other options discussed
herein.
A.6.5 Will cretliis or reductions be offered?
Programs that promote engagement and participation, such as credits for volunteering at the waste
site or fee reductions for payment made a year in advance, could be considered. Credits are useful
in raising awareness or as an incentive to change behavior. Credits reduce revenues, so caution
should be used when considering what can be used for credit. If credits are offered, care must be
taken to avoid fraud and there must be willingness and capacity to enforce the credit program.
Also, credits should be set up to help the system so that it manages waste or reduces overall costs.
Note, the same is true for volunteering, although this requires organization and training for all
volunteers. The community's environmental program, or other program or staff that operates the
current solid waste or honey bucket collection program, is well positioned to help manage
volunteer training and administer a credit program. Additional groups to consider would be the
local youth booster or club program, church group, search and rescue team, environmental
committee, and regional tribal consortia programs. Statewide organizations may be helpful in
designing training or setting up the credit program.
llection
As part of the consideration of a fee structure for the backhaul program, consideration must be
made regarding how the fee will be collected. Factors that should be considered include
administrative ease, enforcement, revenue stability, and cost effectiveness. The following are
potential options for structuring the billing and collection of a backhaul fee.
e the collection to cm existing fee structure.
For several of the fee structures discussed, a cost-effective method of billing could be to partner
with the electric utility or water service. As communities are served by other utilities, such as
electric cooperatives, consideration should be made as to the feasibility of the fee being placed on
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the electric bill (or other utility bill). This approach provides efficiencies in the administration of
the fee, including billing system development/maintenance, bill generation/mailing, processing of
payments, and enforcement of non-payment. Depending on applicable laws and ordinances, this
approach could provide more assurance of payment if enforcement is tied to other utility service
such as electricity or water service.
e the collection to a nonprofit or independent entity that can manage the bill
payment process and be accountable for collections and distribution.
Another option could be to contract with an independent organization to bill/collect fees from
customers. As an example, there are regional tribal health organizations throughout rural Alaska,
providing a wide range of services focused on health care of their region's communities. Many of
these organizations employ a local resident in the community to represent them, particularly in the
case of larger communities. Partnering with community organizations could be particularly
attractive for a punch card/bag/tag type fee structure, as these organizations could manage the sales
and collection of revenues.
ay at the time of disposal or an advance fee at time of purchase
This option becomes relevant for fee structure options including punch cards, bag/tag fees, etc.
Under this billing/rate approach, a process would be required to determine authorized vendors of
the cards/bags/tags, and for how sales are documented, and revenues transferred to the backhaul
program. Depending on the volume of purchases, such transfers should happen no longer than on
a monthly basis, and perhaps as often as weekly to ensure sound accounting of the revenues and
management of the revenue stream.
fiase in a fee
Depending on the level of fee required for the program, implementation of an adequate fee in the
first year may not be possible, due to the impact on household budgets. At the same time, the costs
of the program need to be planned so that sufficient funding is available as backhaul events are
scheduled. Therefore, any phase-in of the fee should be calculated and planned for with a
comprehensive business plan.
A.7.5 Regional collection or some sort of combination of collection system.
Regionally-administrated collection of materials is also possible. While the design can change if
another model is more efficient, Backhaul Alaska tentatively envisions regional collection of
materials from the port or other collection depot in each rural Alaskan community, with the local
programs administered to move materials from the households to the community collection points.
A ign Considerations
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When designing a fee for backhaul, certain things must be considered, including the following:
A.8.1 Consider the financial impact on the payer of backhaul fees in terms of fairness
As discussed above, the selected rate structure should be developed in a way that the rate payer
perceives as fair and equitable. For example, a flat rate may seem fair, but it may be perceived as
inequitable if a small household is paying the same rate as a large household. A thorough
understanding of each local community's culture and demographics can help inform the extent to
which each rate option may pose concerns. For instance, a community with a multi-generational
family may not necessarily generate more of the type of waste that is problematic and expected to
be addressed through the backhaul program. Many elders, for instance, may adhere to historical,
sustainable lifestyle and not generate such types of waste. As such, it could be perceived that such
households could be unfairly burdened under a rate structure based on household size. Again, a
thorough understanding of the community is necessary to evaluate the advantages and
disadvantages of each rate structure and to develop a structure that best meets the community's
needs.
A.8.2 A fee cannot allow too many potential payers to not pay
Given the unique demographics of many rural Alaskan communities, with households often living
a subsistence lifestyle with limited wage income, care must be taken to develop fee programs with
support for those who truly cannot afford the fee.
A.8.3 A fee or rate should be proportional to the burden of the haul
The fee should be designed to cover real costs of the backhaul. This is challenging for the backhaul
program, given that items are disposed (stockpiled) for a period of months (or years, depending on
volume received and weather conditions) until there is sufficient material to warrant a backhaul
event. During the time that Backhaul Alaska would negotiate hauling rates, such contracts could
be expected to change.
Therefore, the establishment of the fee should entail a comprehensive analysis of current and
potential future costs, including all costs associated with the program that are not recovered
through other funding sources. This analysis should include a sensitivity analysis of potential
impact due to fluctuating costs, participation rate, revenue generation (e.g., potential non-
payment/delinquencies, impact of credit/incentive programs, etc.), and/or additional costs
associated with illegal dumping. In addition, an analysis of the impact of any credit/incentive
program may have on both revenues and costs (e.g. volunteer work, which could reduce costs).
Based on this analysis, a range of fee levels can be evaluated in parallel with key assumptions
regarding such things as those evaluated in the sensitivity analysis to determine an appropriate fee
level. This analysis should then be conveyed as part of the overall communication/ education
outreach conducted before, during and after roll-out of the program.
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A.8.4A fee should he stable and not subject to wide fluctuations in revenue collection.
Stable revenue streams, fee structures, and costs are essential to ensuring a successful backhaul
program. As previously discussed, this is a challenge for the backhaul program, given the many
uncertainties in rate setting. The program should have a fee that is stable, yet flexible enough to be
adjusted over time as necessary while still avoiding "rate shock" for customers. In addition,
because materials are stockpiled over a period of time, the program should avoid having early
customers paying one fee, and late customers (for a given backhaul) paying a substantially
different fee. While funding of a reserve fund, such as a rate stabilization fund, would help
moderate fluctuations in program costs, this will need to be balanced with a perception of the
program "sitting on money." This is another important topic for customer outreach/education, so
that there is an understanding of how rates are set, and the importance of any reserve funds.
A.8.5 A fee should be flexible to allow for future changes in priorities or costs
The rate should be established in a manner that allows frequent monitoring of program costs and
revenues, allowing program managers to evaluate needs as the program evolves, and adjust the
rate(s) as necessary. A fee is designed for services provided so that the fee structure must be very
clear in terms of what the exact, tangible service is that is being offered. It should also be
proportional to the burden of providing the service.
A. 8.6 A well-organized outreach and education campaign should be part of any fee
structure
It is critical that stakeholders understand that they helped create the need for a backhaul service
and they are part of the solution. Communications and outreach should be centered on culturally
based education. One issue that may arise is that the community may not have set a waste reduction
goal. Having a collective goal can be useful as part of the overall education program.
the administration of the fee system going to be placed out for bid or tied to an
existing entity that already implements a fee-based program7
Placing the administration contract out to bid helps ensure the cost of the service is appropriate.
However, depending on the rate structure and other program elements, it may not be feasible to
have a truly competitive bidding process, as there may only be one potential bidder. In such cases,
the program managers should work with the service provider to identify costs for services and help
ensure that costs are reasonable.
A. 8.8 Has the proposed fee been vetted for legal sufficiency7
It is important that the draft fee schedule be compared to all existing national, state and local
regulations pertaining to taxation, fee implementation, and solid waste handling to determine
compatibility and to prevent legal challenges.
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A.8.9 Is the proposed fee equitable and proportional to the level of service?
It is important to review the type of wastes generated within a specific community, and by whom,
when developing a fee structure. By the community's definition of "fairness," will the waste
generators be paying their share of handling, disposal, and backhaul expenses? If not, the
community should determine if potentially inequitable payment is a concern or whether equitable
payment affects the community's ability to pay for the services they want. The equitability in terms
of waste generation among community members may not be an issue. Rural Alaskan communities
are group-oriented and do not typically view fairness in terms of individuals, or even individual
families. They also tend to see things in context, so that if a household cannot afford a fee, that
circumstance can warrant an exception. However, it is common for certain business and
institutions in rural Alaskan communities to not contribute or contribute less than their waste
amount or type might otherwise suggest. A waste stream analysis can help the community allocate
their fees.
A.8.10 Is the fee set up to offer flexibility to be able to adjust to changing conditions7
As the backhaul program in a community matures more will be learned and the fee structure will
most likely need to be adjusted over time. The structure selected at the startup should allow for
adjustment as more is learned through experience and with changing ecological conditions.
A.8.11 Will the fee be costly to administer during the initial set up and for oversight7
As with any program there will be planning, startup, and implementation expenses for a backhaul
program and careful consideration should be made to quantify these as much as possible to provide
a realistic overall cost of the program. Funding for the start-up costs should also be identified prior
to initiation of the process for set-up. Costs associated with on-going monitoring of the program
state-wide should be identified and either funded through a state-wide source or allocated to local
programs. Such allocation methodology would have to be determined, either based on population,
estimated waste generation, or other basis.
A.8.12 Is the fee consistent with other local funding rates?
Other utility rates for the community should be reviewed when determining the rates for backhaul.
These utility rates should be evaluated for fee per service and for overall cost to the customer when
added together with any additional fees backhaul may add to determine affordability for the
community.
A.8.13 Is the proposed fee considered stable, i.e. consistent?
Will the fee, if collection is consistent, bring in a stable and reliable revenue stream to the backhaul
program? The stable income stream is necessary to support program expenses, including
personnel.
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A.8.14 Can the fee he used to create opportunities for improvement and/or expansion?
The fee structure may need to include a rate to cover the cost of system or facility improvement or
program expansion if the program plan includes goals.
A.8.15Are there incentives for payers to reduce their fees?
Careful consideration should be made to incentive programs which can create community buy-in
and help alleviate economic burdens on customers, while acknowledging that this can also reduce
the revenue stream necessary to support the program.
A.8.16 Are you able to describe to ratepayers exactly what the fee will cover?
Prior to fee structure development, a backhaul program plan should be developed and formally
adopted by the community that includes the goal of the program, objectives to be achieved, tasks
to meet objectives, resources needed, implementation timeline, and assessment method.
A.8.17 Is there a start-up strategy in place to follow?
A well-designed startup process will help ensure accountability and program success.
A.8.18 What organizational structure will administer the fee?
Is there a written contract or other type of legally binding agreement? When researching options
for program fee/collection administration, consistency and longevity of work within local
communities should be considered. When an administrator has been selected, a written legal
contract should be executed.
A.8.19 Could the backhaul program further economic development including job
creation?
Job creation is a key goal of Backhaul Alaska. A community backhaul program has the potential
to create local work. The community backhaul program can also provide skills training programs
to train local residents rather than importing external workers. Workers with new skills could take
their skills to obtain employment elsewhere in the state, including to regional backhaul facilities
developed under this program.
A.8.20 Can a backhaul program improve environmental conditions and public health?
Protection of health and the environment, including subsistence grounds and waters, will be
increased with the removal of the hazardous wastes targeted by Backhaul Alaska. Extending
backhaul services to municipal waste can further improve local health and environmental benefits.
Over half of Superfund sites today are former municipal solid waste landfills, which points to the
dangers of disposing household waste into unlined and lightly managed rural landfills. Previous
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studies examining rural Alaskan landfills indicate similar health risks as those faced from
communities in developing countries living near hazardous waste sites.
Site cleanup is enormously expensive in rural Alaska due to mobilization and demobilization costs
of equipment, cover, liners, and management travel; however, the public health benefits may
reduce or outweigh the total costs related to proper waste management in rural Alaska. An accurate
description of the societal cost benefits of the program may provide fodder for greater partnering
and leveraging opportunities from a wider range of agencies, foundations, and corporations.
Recommendation: Identify the full scope of potential cost savings related to
health and environment engendered by Backhaul Alaska, including a
quantitative range where possible, and use the information to promote the
value of the Backhaul Alaska program.
A.9 What is the most efficient use of the community contribution and how
should it be moved?
The money generated by communities as their contribution to Backhaul Alaska can be channeled
to one or a combination of functions:
Locally - the funds generated locally would support local programs.
Hub - the funds could support hub functions.
State-Level - The funds could support state-level coordination, such as logistics
coordination.
Vendor - The funds could support hauler or recycler fees.
Program - The funds could support non-designated program shortfalls
Further Study: The question of how community revenue should be used and
moved is primary for EPA Region 10 and the Backhaul Alaska program.
Revenue will be generated from the communities served and local, regional,
and statewide backhaul program costs need to be covered. Whether and how
funds are moved from the community and back again is a complicated
question and outside the expertise of EPA Region 10 and Backhaul Alaska
stakeholders.
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Appeiu :ckhaul Alaska Business Model
ปse:
This model provides a brief overview of the Backhaul Alaska program business model and serves
to:
show broad financial implications of the program;
show fundraising needs; and
provide a tool for revising projections as more information becomes available.
)ds;
The major components of this model are:
aggregate regions
o This model includes nine regions: Bering Stratis, Nana, Bristol Bay, Calista, Koniag,
Doyon, Sealaska, Aleut, and Arctic Slope. The costs for each region account for all
communities and households within that region.
linear projection
o This model projects cost increases over ten years from costs at program inception in 2018
to maintenance costs according to a linear growth formula.
data from the Backhaul Alaska Budget program
o This model draws all initial costs at program inception and maintenance costs from the
Backhaul Alaska Budget program. These costs include:
ฆ Personnel
ฆ Supplies
ฆ Shipping
ฆ Trucking
ฆ Connex containers
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ฆ Fringe
o This model also draws the number of households in each region from the Backhaul Alaska
Budget program.
Summary Costs
o This model includes summary costs for each region calculated using the above listed costs.
Summary costs include:
Subtotal
Indirect
Total regional program cost/value per year
Household cost of regional program support
Total village program value
Total regional backhaul value/cost
Annual household cost of village/regional programs
Program Revenues
o This model includes program revenues projected from program inception in 2018 over a
ten-year period. Maintenance revenues at full operation are drawn from the Backhaul
Alaska Budget Program.
sumptions:
This model makes the following assumptions:
The Backhaul Alaska Budget Program cost calculations are accurate and up-to-date.
There are no capital expenses. This model accounts only for operation expenses and does not factor
in extra costs at program inception for capital, such as connex containers that are a one-time
purchase.
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There is no inflation. This model does not account for inflation over the ten-year projected growth
period for any costs except personnel.
There is a linear cost structure within each region. This model accounts for all villages and
households in the same way disregarding any differences that may alter costs.
There is a linear projection of personnel. This model projects personnel costs linearly which may
result in unrealistic costs. For example, some projected personnel costs account for less than one
half of a full-time employee.
The cost of supplies, shipping, trucking, and connex containers remains constant from program
inception onward.
n Millions;
This model is subject to the following limitations:
This model cannot be used to influence decisions on a village level. It accounts for villages and
households within a region in a uniform way and does not account for differences among villages
that may alter costs and influence decision making.
This model can only be used to influence decisions on a programmatic or regional level. It provides
enough detail on a regional level that can be used to influence regional decision-making which can
then influence programmatic decision making.
This model only includes operation expenses.
This model does not include capital expenses.
This model projects program adoption by region linearly. It assumes that all villages within a region
will join the program at once. Villages within a region will likely join the program at different
times.
This model does not account for inflation.
B.5 Notes;
Actual costs for each region would likely be less early on and increase as smaller and more
expensive villages join the program.
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Several mistakes in the Backhaul Alaska Budget Program were corrected for in this model and the
original values adjusted to fit the correct formulas. These adjusted values are highlighted in yellow
on the model. For example, the total regional program cost/value per year for the Nana region did
not equal the sum of the subtotal and indirect costs.
For some regions, the cost per household remains constant across all years. This is the case because
the number of households and other expenses increase linearly at the same rate pursuant to this
model's formula causing the per household cost to stay the same.
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B.6 Backhaul Alaska Business Model as of June 2018
The model shows the Backhaul Alaska program operating at a deficit that will increase each year from a range of approximately
$100,000 to $280,000 per year. The Backhaul Alaska program will require new sources of revenue to attain program solvency.
REVENUES
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
School Contribution
-55.699.49
-511.398 97
-517,098.46
-522,797.94
-528,497.43
-S39.S96.4G
-545.595.89
-551,295.37
-556.994.S6
Feceral ASency Waste Contributor
-52.467.OS
-54,934.16
-59.S68.32
-512,335 41
-514.802.49
-517,269.57
-519.736 65
-522.203 73
-524.670.S1
Lead Acid Battery Revenue Tota
-52485.82
-54,571.61
-56,857.46
-59.14328
-511,429.10
-513.714.92
-516,00074
-S18.286.56
-520.572.38
-522.858.20
Total Revenues
-$55,597.33
-$111,194.66
-$166,792.00
-$222,389.33
-$277,986.66
-$333,583.99
-$389,181.32
-$444,778.66
-$500,375.99
-$555,973.32
Household Cost of Regional
Program Support
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
S^Str-2
siff
9 20
S40.77
Snr
stir
S45.48
Si
fiSSi
!IHr
Capita
552.70
552.70
552.70
552 70
552.70
Koriag
5178.77
5178.77
S178.77
Day on
15
596.15
596.15
596.15
596.15
596.15
596.15
S96.15
596 15
596 15
Sea'aska
753
517.93
517.93
517.93
517.93
517.93
517.93
517.93
517.93
517.93
1 Aleut
46.49
546.49
546.49
546.49
546.49
546.49
546.49
546.49
546.49
546.49
Arctic Slope
5.93
^^ 585.93
585 93
585.93
5S5.93
585.93
585.93
585.93
585 93
58553
Program Total Cost/Total
Number of Households
$36.38
$40.33
$42.10
$43.11
$43.76
$44.22
$44.56
$44.81
$45.02
$45.19
$45.32
Program Total
2018
2019
2020
2021
2023
2024
2025
2026
2027
2028
Item
Value at full
operation
Personnel. FTE=
524 000.00
$52,400.00
$80,800.00
$109,200.00
$137,600.00
$166,000.00
$194,400.00
8222,800.00
$251,200.00
$279,600 00
$308,000.00
Fringe
$5 850.00
$18,335.00
$30,820.00
S43.305.00
$55,790.00
$68,275.00
$80.760 00
$93.24500
$105,730.00
$118,215 00
$130,700 00
Supplies (safety gear (glove. goggSes),
shrinkwrap, totes, uermiciJite. shpping to get
totes back to vfllagesi3
$2,500.00
$3,376.67
$4,253.33
$5,130.00
$6,006.67
$6,883-33
$7,760.00
$8,636.67
$9,513.33
$10,390.00
$11.266.87
Flatbed truck (insurance, fuel, and
maintenance (this truck is used to pick up
materials from airport and take to storage area
ana also to pick up materials around tovm)s
$2,000.00
$2,645.00
$3,290.00
$3,935.00
$4,580.00
$5,225.00
$5,870.00
$6515.00
$7,160.00
$7,805.00
$8,450.00
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Appendix C. Case Studies
It is recognized that the challenges of Backhaul Alaska are unique. Nowhere in the United States
are small rural communities as fully isolated and remote, and without access to regional/county
facilities. Nowhere are the hauling costs to appropriate disposal or recycling facilities as excessive,
nor the cost to build additional infrastructure and the logistics needed as daunting. However, some
similarities for various parameters exist between Alaska's struggles and other venues, and it is
illustrative to examine these cases for potential Alaska-based solutions. Note where costs are
provided, they are not intended to suggest that Alaska would achieve a similar cost structure. At
most, these costs represent a relative affordability within the local jurisdiction of the case study and
all costs would need to be reviewed in the context of rural Alaskan communities.
Bills
While not technically a form of EPR, "bottle bills" are a common related concept that is relatively
easy for the public to understand. There are programs in place in other states that have had some
successes, such as California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New
York, Oregon, Vermont and the territory of Guam. These locales have approved "bottle bill"
legislation whereby a small refundable deposit, typically 5 to 10 cents per bottle, is included in the
price of containers such as soft drinks and other beverages. The consumers receive a refund of the
deposited amount when they bring the container back for disposal, which in most cases involves
recycling. The intent of such a program in Alaska would be to create a cost-neutral incentive to the
consumer to return beverage containers to a point of sale location for collection and incorporation
into a backhaul or recycling program. To date, there have been unsuccessful attempts to start a
bottle bill in Alaska because they are considered politically infeasible because they involve an
explicit "fee." However, over time, the politics of the issue may change and allow such an approach
to be used. Furthermore, the Municipalities of Anchorage, Wasilla, and Palmer have all passed
recent plastic bag bans.
arleston County, South Carolina
Charleston County developed a holistic approach to waste services that includes a user fee that
covers a wide variety of waste services, including: curbside recycling, drop off sites and
convenience centers, waste transfer and disposal, material recovery, composting, household
hazardous waste, and administration. Fees for single family are $99 (including mobile homes);
multi-family $70 per unit (including apartments) and commercial $172 per cubic yard of garbage.
The fee is billed as part of the annual real property tax bill. While these fees may be prohibitively
high for rural Alaska communities, there may be some value in investigating fees to cover a wide
array of solid waste services.
nice William County, Virginia
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A solid waste fee was established in the rural county of Prince William, Virginia in 1998. The fee
was established to fund trash disposal, composting, recycling operations and to repay debt for the
purchase of additional land to expand the landfill. The fee is set up as a separate line item on the
property tax bill and billed semi-annually. Prince William charges different rates depending on the
type of resident. For example, single-family homes are billed $70/year, Town homes, $63/year,
mobile homes, $56/year and condos and apartments are charged $47/year. For business and non-
profits, fees are assessed based on the actual amount of refuse that is generated per year based on
actual records or by number of pickups. If this information is not available, the County will estimate
a fee based on the type and square footage of a business or non-profit. This system works for
collection at homes, but residents and businesses can opt to haul their trash to the landfill without
paying a fee for most items. This system made it easier for residents and the county.
C.4 North Carolina Disposal Fee
North Carolina imposes a $3.00 disposal fee on each white good sold within North Carolina. White
goods include refrigerators, ranges, water heaters, freezers, unit air conditioners, washing machines,
dishwashers, clothes dryers and other similar domestic and commercial large appliances. It is
essentially a disposal tax on all new white goods sold by a retailer or purchased for storage, use, or
consumption in the state. It includes all new white goods with or without chlorofluorocarbon
refrigerants and is an addition to all other taxes. The purpose of the program is to discourage the
illegal disposal of white goods and to encourage the recycle of refrigerant gasses.
The program is funded by the taxes that come from the sale of the white goods, and these funds are
redistributed back to North Carolina counties. Revenue and grants a county receive from these funds
must be spent on activities associated with white goods or management of white goods disposal and
recycling. The activities funded can be in one of three areas: 1) daily operating expenses (salaries,
training, equipment maintenance, fuel, etc.); 2) capital improvements spent on infrastructure and
equipment (concrete pads, sheds, and buildings,); and 3) clean-up of illegal dumps. Grants are
available for counties for capital improvements and to fund cost overruns.
Since the passage of the Solid Waste Management Act of 1989, in which North Carolina asked
local governments to achieve a waste reduction goal of 40% by a given date, many counties have
developed their own system of disposal and charges. For example, Wake County, North Carolina
requires each household to pay a fee of $20.
Johnston County, NC sells decals online for residents to purchase to dispose of their household
garbage. For this decal, a resident can bring one standard half-ton pickup truckload of household
garbage to the Convenience Centers once a week. Additional trips are charged an extra per-ton
disposal fee. The charge for a decal is $100 and the fine for disposing of waste without a decal is
$500.
C in Pai " " ling Fee
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Oregon's legislature enacted a program to impose a fee of 75 cents per gallon of paint that is added
to the price of the gallon of paint at the retail store. The fee is intended to support collection centers
and promote recycling options for left-over household paint. The program was supported by paint
retailers and addresses the collection, processing and disposal of leftover paint. Oregon was the first
state in the nation to pass such legislation
Oregon PaintCare is a nonprofit organization that is implementing the pilot program. The program
intends to provide awareness about the proper use of the product, reducing the leftover paint,
incentivizing buying the proper amount and properly managing what is not used. The fee is intended
to cover the costs of collection centers and recycling.
The fees range from no fee for a half-pint of paint or less to $1.60 for more than a gallon of paint.
There are 80 collection sites/retailers in Oregon in which leftover paint is stored in a bin before
being transported to Portland and sorted by good latex, not-so-good latex and oil-based paint. Dried
and empty paint cans can be thrown out with the trash. Oil-based paint is burned for energy; the
good latex paint is recycled, and the not-so-good latex is processed in California and used as an
additive in concrete.
This model, of charging a slight fee to encourage disposal and recycling of a specific product or
type of product may have some applicability for Backhaul Alaska if the issue of a "fee" could be
resolved.
" " mputer Recycling ar ฆ ise
While many computer companies may be examining the possibility of computer and computer
component recycling and reuse, this case study focuses on Dell as one example. Dell is currently
investigating the possibility of the circular economy - where waste materials are continuously
restored to use - by sourcing recycled plastic for new products, closing the loop on electronic waste
and examining packaging innovations. Through its "legacy of good" program, the company has
plans to cut waste, create more eco-friendly products and inspire its stakeholders to adopt "circular"
thinking. In particular, Dell plans to use 50 Million lbs. (22.7m kg) of recycled plastic and other
sustainable materials by 2020, create 100% recyclable or compostable packaging, and recover 2
Billion lbs. of electronic waste. In 2014, Dell sourced 4.5 Million kilos of recycled plastic to build
monitors and desktops. It also began capturing waste materials from customers' old computers to
incorporate in new products. People in 78 countries are already taking advantage of its free take-
back program to recycle end-of-life electronics, with 560 Million kilos of e-waste recycled so far.
Now, the company is transforming some of the collected plastic waste into new materials for its
OptiPlex 3030 desktop computer, creating the industry's first certified "closed loop" recycling
system. Elsewhere, Dell eliminated 20 Million pounds of packaging between 2008 and 2012,
generating more than $18m (ฃ12.3m) in cost savings. Its intention to reduce packaging waste has
seen the company replacing non-biodegradable, oil-based materials with organic alternatives such
as bamboo and mushrooms. Its wheat straw packaging uses 40% less and encourages others to see
waste as a valuable resource. Dell formed a partnership with the United Nations Industrial
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Development Organization (UNIDO) to collaborate on developing recycling models for e-waste in
developing countries. This builds on its work to empower people in Kenya to generate additional
income by collecting e-waste, and a roadmap it created for other organizations to prosper by
recycling waste.
e Occupationa , g Center
The Occupational Training Center maintains recycling collection contracts with three large military
bases in southern New Jersey. The recycling center is located at the McGuire Air Force Base (AFB)
and collects recyclables from the offices, military installations, and houses at McGuire AFB, Ft.
Dix Military Installation and Lakehurst Naval Station.
The O.T.C. military recycling facility collects and processes paper, food and beverage containers,
scrap metal, florescent lighting tubes, and tires.
The site has employment opportunities that create jobs for adults with disabilities. The recycling
team for McGuire AFB, Ft. Dix and Lakehurst consists of four specially trained individuals who
are skilled at collecting recyclables, separating and sorting recyclables, and operating baling
machines. In addition to providing recycling services to the military, this work also gives these
adults opportunities to work towards self-sufficiency, provides a sense of pride and
accomplishment, and helps create additional programs for other adults with disabilities at
O.T.C.C.7 Joint Base Langley-Eustis (JBLE)
Joint Base Langley-Eustis' America Recycles Day (ARD), a national program which began in 1997
by Keep America Beautiful, is celebrated every Nov. 15 and encourages Americans to recycle and
buy recycled products.
This day promotes environmental, social and economic benefits of recycling, and encourages
Americans to create a better, natural environment for everyone to enjoy. ARD also raises awareness
in local communities.
Recycling reduces the amount of waste going to crowded landfills, while conserving natural
resources and saving money. In 2012, Joint Base Langley-Eustis diverted roughly 1,650 tons of
recyclables, including cardboard, mixed and shredded paper, scrap metal, toner cartridges, single-
stream recyclables and mattresses. Both installations provide recycling containers at facilities to
collect single-stream recycling for weekly pickup. Single-stream recycling refers to a system in
which all paper fibers, plastics, metals and other containers are mixed in a collection truck, instead
of being sorted by the resident into separate commodities and handled separately throughout the
collection process. The JBLE also holds a recycling event on Earth Day, which is normally
celebrated in April. These types of programs that promote a focused idea may provide a model for
Backhaul Alaska to consider when thinking about ways to encourage the use of the program.
C.8 Pearl St. Co-Op
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Pearl St. Co-Op owned and operated by College Houses, and KXAN share a space-constrained
alley in West Campus. For years, both businesses managed their own waste services and struggled
to combat continuous illegal dumping. It was also commonplace for parked cars to block dumpsters,
resulting in missed pick-ups.
In 2015, College Houses' operations director, Ken Mills, attended a zero-waste conference hosted
by Austin Resource Recovery (ARR). Inspired, he began ramping up diversion efforts at his
properties and used ARR's Zero Waste Business Rebate to increase diversion during 2016 move-
out. These efforts prompted thoughts about larger illegal dumping solutions.
College Houses approached KXAN about using service consolidation as an opportunity to move
the dumpsters to a centrally shared location and build an enclosure to deter illegal dumping.
Despite upfront costs and labor, both businesses are benefiting from improved mobility in alleyway
and additional parking space for KXAN, increased service reliability (fewer missed pick-ups),
decreased monthly service costs for both businesses, minimized illegal dumping and labor/fees
associated with extra pick-ups, and increased cleanliness and safety of alley.
A tenacious operations director, a collaborative approach between the organizations and a desired
common interest to alleviate shared challenges helped make this a successful project. Involving the
hauler from the beginning and working closely throughout the process also helped ensure success.
Buy-in from the Co-Op board members and both businesses was also critical. This case study
demonstrates the benefits that can occur when organizations work together to solve a common
challenge.
, , lie ' s " , -icfersl " 1 city Development Linden Hills Co-op
was formed over 20 years ago by a groi aker families who wanted
their co-op to take an active and committed role in the growl the
independent businesses now thriving in the Linde s business district in
Minneapolis.
Over the years, the co-op's board and management have continually asked a simple but all-
important questionwhat do people want from us as an organization? In order to answer the
question, they understood they needed to continually assess their leadership capacity. The co-op
has invested in the training and opportunities that have allowed the co-op to continue to meet the
needs of their neighborhood and beyond.
The board adopted policy governance eight years ago that has greatly enhanced the leadership of
the co-op as a whole. The board is focused on improving themselves and the store and has benefited
from the strength of a succession of excellent board presidents, and the board consistently invests
in grooming people for the role.
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The Linden Hills board is also very interested in expanding their leadership to the wider food co-
op community. The board sees the expansion of their role in cooperatives as a natural part of its
evolution.
Operationally, the store benefits from this cultural emphasis on leadership. Staff are encouraged to
become leaders, to step forward and take a role in the leadership of the whole store. This is also
enhanced by the co-op's participation in the Midwest Purchasing Co-op's Leadership Development
Training a year-long management preparation program designed to enhance professionalism and
retention of excellent employees in search of a career path. The co-op has sent at least two staff
members every year for three years.
The board and staff view the work they are doing at Linden Hills as something they are "creating,"
not things that are "happening" to them. This view is attributed to a paradigm shift brought on by
consistent leadership.
ick NYC
New York City has established both voluntary and mandatory programs towards collection and
recycling of post-consumer waste as well as hazardous materials. While New York City is the
opposite of rural Alaska in terms of density, development and demographics, it is relevant because
it also involves not only successful EPR programs that take into consideration the impact to small
business, but by its very nature solid waste disposal is handled by barge and other off-site land-
filling. New York City's collection is also unique, as garbage often piles very high on city sidewalks
during peak business hours, until it can be collected overnight to minimize vehicular and pedestrian
traffic interruptions.
Mainly by way of a multitude of enabling state and local legislation that goes as far back as 1982,
New York City has some of the most comprehensive EPR laws in the United States. The "Take- It-
Back NYC" program includes mandatory programs for plastic bags, electronics and cellular phones,
rechargeable and auto batteries, sharp items such as medical needles, beverage containers, tires and
motor oil. For many items, retailers are required to have on-site collection mechanisms, such as
clearly labeled boxes or even reverse vending machines. For auto batteries ($5.00), tires ($2.50)
and beverage containers ($0.05), per-item deposits are collected when new items are purchased and
refunded when the used items are returned in an attempt at keeping the programs cost-neutral to the
end-user. All other items on this list are required to be accepted at no charge to the customer.
Exceptions are made for businesses under a certain size.
The program also has voluntary take-back programs for items containing mercury, such as
fluorescent bulbs and thermostats, as well as unused medication and for printer ink and toner
cartridges. All the guidelines were last updated in 2016 as part of the city's ultimate strategy of
moving to zero waste to landfills by 2030.
New York City does not have as profound a lower-income population as rural Alaska, but it does
have large pockets of poverty and is a microcosm of the overall income disparity in the U.S., with
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median household effective buying income (i.e. disposable or 'take-home' pay) ranging from 64%
that of the U.S. in the Bronx to 129% of the U.S. in Manhattan. Given that the five boroughs
comprise some of the most expensive real estate in the U.S., policy makers do incorporate a
sensitivity to those with lesser means in one of the highest cost of living metropolitan statistical
areas (MSA) in the U.S. Public education plays a large role too, including public service
announcements, signs and billboards prominently displayed in or near stores, and policy
recommendations such as the proposal to include an acceptable on-site waste management facilities
part of each new or remodeled multi-family residential and commercial building if the building
plans are to be approved by the city.
iiain Waste Programs
As far back as 1986, the EPA issued an administrative order directing the Government of Guam
("GovGuam") to address runoff leaching from its solid waste landfill, ultimately polluting the
Lonfit River and violating the federal Clean Water Act. The problem persisted, and the EPA and
GovGuam eventually entered into a consent decree in 2004. Because of a number of challenges that
included lack of political consensus and inadequate funding (part of which was attributed to poor
collection rates), the U.S. District Court of Guam in 2008 appointed a receiver to achieve resolution
to the consent decree.
Guam in 2011, created enabling legislation that focuses on beverage container collection and
recycling. Conceding that a 210 square mile island in the western Pacific with a median temperature
of 81ฐ F also does not appear on first glance to be a useful comparable to rural Alaska, it is important
to note that the native Chamorro population is also characterized by unemployment rates higher
and income indicators lower than that of the general population, and parts of the island are rural
and difficult to navigate. The general government's Department of Public Works has been under a
federal consent decree since 2004 and since 2008 has been in receivership. One of the factors that
led to the federal environmental infractions and receivership was the poor financial condition of the
solid waste system, in large part because of poor collections of residential service charges.
Guam, with income indicators well below that of mainland U.S., has since opened a new landfill in
2011, in 2013 put in place recycling and bulky trash collection, and in 2015 dedicated a new
household hazardous waste (HHW) facility. There is no charge to the residents of Guam for the
drop-off of household hazardous waste, as the cost of the program is embedded in the per-ton
tipping fee. Curbside recycling is also provided to existing residential solid waste customers at no
additional cost to the existing $30 per month fee. Residential customer collections are generally
good at about 99% of the $6.7 million in annual billing, which differs very materially from rural
Alaska. However, accounts receivables are substantial: as of fiscal 2016, the most recent
independently audited year for the solid waste fund, accumulated receivables were just under $1.7
million, indicating that delinquent accounts are unlikely to ever be collected, a similar challenge to
that of rural Alaska.
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Aside from the above HHW program, GovGuam created two additional programs with the
expressed intent of reducing both litter and diverting recyclable solid waste from ultimately ending
up in the new landfill. Both programs have aspects that align with EPR, but both also have
committed public sector revenue streams. In 2010, Guam passed the Beverage Container Recycling
Act, in which a 5 cent per container deposit (an amount which can be adjusted by legislative action)
is paid to GovGuam by the beverage distributor. Up to 80% of the deposit is refundable to anyone
returning the beverage containers to any approved location, rather than compelling the consumer to
return to the same store from which it was purchased. The Guam EPA (GEPA) collects 20% of the
deposit to help defray administrative costs. Forfeited deposits are returned to the program.
Guam also established a recycling revolving fund (RRF), funded from a portion of motor vehicle
registration fees and administered by GEPA. In fiscal 2018, GEPA appropriated over $2 million
from the RRF directly to the island's villages (via Guam's Council of Mayors) for litter removal,
including abandoned vehicles, white goods such as appliances, and tires. Some of the recurring
revenues from the RRF are used to pay recycling companies (currently $30 per ton). An idea to pay
consumers $5 for each tire turned in from RRF funds, rather than the current law in which Guam
residents pay a tire disposal fee of $5, has thus far not made it past the alternative ideas stage.
For larger solid waste, Guam also provides two curbside collection dates per year - free to
customers in good standing - of up to five items considered bulky or metallic waste (such as a
mattress or an appliance), also to divert these items from ultimately ending up at the landfill or
being abandoned in place. This case study shows a method that Backhaul Alaska may want to
consider that encourages local collection, jointly with producers and retailers, and eventually to
central facilities that can ultimately backhaul the waste or send it to recycling facilities.
I 11 ization for Econoir 1 " ation an velopmei '
search
The OECD has in its library a compendium of case studies, mainly in Europe and Asia, that hold
some comparability to rural Alaska in terms of lower density or poorer communities. Germany in
the mid 1990's was one of the first to introduce EPR, so it is also possible to observe and take away
lessons learned from someplace in which this has been a part of consumer and producer behavior
for decades.
The OECD defines EPR as "an environmental policy approach in which a producer's responsibility
for a product is extended to the post-consumer stage of a product's life cycle." Contributing research
(see, among others, "EPR Policies and Product Design: Economic Theory and Selected Case
Studies", Nils-Axel Braathen, 2006) notes that the most effective programs have tended to use some
combination of what OECD calls advance recycling fees (some kind of up-front cost to the
producer) and a recycling subsidy from the government. Regulations, such as Germany's
mandatory take-back laws passed in the 1990's, could be more difficult to achieve in the United
States, although have had varying degrees of success in other countries. The research goes on to
note greater success rates in places where producer responsibility organizations (PRO) are formed,
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whereby producers with common products or services collectively arrange to comply with the
government's mandatory take-back requirements, which not only creates the efficiencies of scale
but also informal infrastructure by way of coordination of efforts.
One of the more established examples of this is the waste electronics and electrical equipment
(WEEE) program in the Netherlands. WEEE Nederland is one of two of the more established Dutch
PROs, offering (for a fee) to register products for manufacturers and producers coordinate with
municipalities for the waste collection to be passed along to the recyclers. Essentially this PRO acts
as the ultimate facilitator and liaison between producer, recycler and community.
It is important to recognize that EPR programs are only one tool in the toolbox, and that academic and
other research suggests that they can be even more successful when combined with participation by the
consumer, retailer and local or regional government.
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Appen report on recycling indus' ฆ I 1 "v" iska)
An Institute of Scrap Recycling Industries (ISRI) summary report, Jobs Creation - The Scrap Recycling
Industry for the State of Alaska for 2017 is provided on the following two pages (67-68). The information
in this ISRI report provides a starting point for thinking about the possibilities of increasing the reach of
recycling into rural Alaskan communities to bring some funding to the backhaul program.
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ฎ ISRI130
Hsice of l/ie Recycling Industry
,th Jobs Creation - The Scrap Recycling Industry
Anniversary 2017 Summary Report
jT3*7 State of Alaska
The Economic Impact of the Scrap Recycling Industry in Alaska
DIRECT
SUPPLIER
INDUCED*
TOTAL
Jobs
238
250
290
778
Wages
$23,759,400
$20,809,700
$17,089,200
$61,658,300
Economic
Impact
$62,755,500
$75,374,700
$56,902,100
$195,032,300
*Re-spending by employees of industry and supplier firms.
THE SCRAP RECYCLING INDUSTRY IN ALASKA
THE SCRAP RECYCLING INDUSTRY
CREATES JOBS IN ALASKA
As the first link in the manufacturing supply
chain, the scrap recycling industry plays a
prominent role as a job creator, economic
leader, major exporter, and environmental
steward.
There are an estimated 778 jobs (FTE)
supported by the recycling industry in Alaska
that pay average wages and benefits of
$79,300.
In addition, the scrap recycling industry in
Alaska accounts for $21.23 million in federal,
state and local taxes.
More than 130 million metric tons of scrap
are recycled in the United States each year,,
providing vital raw materials to U.S.
manufacturers and helping to fuel global
growth.
SCRAP RECYCLING: A GREEN
INDUSTRY WITH A LARGE
ECONOMIC IMPACT
Recognized as one of the world's first
green industries, scrap recycling reduces
the need to deplete our natural
resources, produces significant energy
savings, and reduces the amount of
material being sent to landfill.
The scrap recycling industry's TOTAL
ECONOMIC IMPACT IN ALASKA IS
$195.03 MILLION.
When all scrap materials are taken into
account, the scrap recycling industry
accounts for 0.38 percent of Alaska's total
economic activity.
Scrap recycling in the United States
annually saves the C02 equivalent of 410
million tons of greenhouse gas emissions,
according to EPA estimates.
Prepared for ISRI by John Dunham & Associates (New York)
April 2017
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ฎ ISM 30
Anniversary
Voice of the Recycling Industry
Jobs Creation - The Scrap Recycling Industry
2017 Summary Report
State of Alaska
THE U.S SCRAP INDUSTRY CREATES AND SUPPORTS JOBS IN ALASKA
DIRECT IMPACTS
JOBS
WAGES
ECONOMIC IMPACT
Recyclers
238
$23,759,400
$62,755,500
Brokers
0
$0
$0
TOTAL DIRECT IMPACTS
238
$23,759,400
$62,755,500
SUPPLIER IMPACTS
JOBS
WAGES
ECONOMIC IMPACT
Agriculture
8
$700,400
$836,600
Mining
33
$7,105,500
$32,533,200
Construction
3
$269,300
$628,900
Manufacturing
30
$805,800
$7,745,700
Transportation & Communication
22
$1,813,000
$7,692,600
Wholesaling
10
$733,400
$2,608,100
Retailing
4
$137,300
$308,200
Finance, Insurance & Real Estate
19
$992,600
$5,264,900
Travel & Entertainment
19
$488,800
$1,230,400
Business & Personal Services
98
$7,381,200
$15,855,300
Government
4
$382,400
$670,800
TOTAL SUPPUE R IMPACTS
250
$20,809,700
$75,374,700
INDUCED IMPACTS
JOBS
WAGES
ECONOMIC IMPACT
Agriculture
3
$100,100
$175,500
Mining
10
$2,904,500
$12,523,100
Construction
3
$305,600
$749,300
Manufacturing
14
$378,300
$3,795,900
Transportation & Communication
16
$1,330,700
$6,112,000
Wholesaling
8
$535,400
$1,932,300
Retailing
38
$1,503,800
$3,037,300
Finance, Insurance & Real Estate
32
$1,707,400
$11,981,000
Travel & Entertainment
44
$1,224,000
$3,203,100
Business & Personal Services
114
$6,600,400
$12,249,800
Government
4
$397,200
$910,100
TOTAL INDUCED IMPACTS
290
$17,089,200
$56,902,100
TOTAL ECONOMIC IMPACT
778
$61,658,300
$195,032,300
TAXES
Federal
State & Local
TOTAL TAXES
Business Taxes
$12,631,400
$8,602,900
$21,234,300
Some details may not add up due to rounding.
Prepared for ISR! by John Dunham & Associates (New York) April 2017
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