There's More Than One Way To Control

Randy Thompson and C. Kent Seyfried

Good old-fashioned flow control, it seems, is a relic of the past. As legal battles rage nationwide challenging local ordinances, the days of mandating waste flow to an incinerator or waste-to-energy plant appear to be over. So what's a city to do?

Cash-strapped and in search of flow control alternatives, in April 1994 the City of Nashville, Tenn., commissioned Neel-Schaffer Inc., Nashville, to study the solid waste systems in 22 similar-sized cities. The vast majority of these cities, the consultants discovered, also were looking for solutions.

The City of Tulsa, Okla., however, had some interesting answers to some typical questions. When asked about its local mixed waste combustor's (MWC) tipping fee, for example, city officials replied that it has none. Haulers bring garbage to the WTE plant free of charge.

"If there's no charge," the consultants asked, "how do you recover your cost?" Tulsa gave a simple response: "We collect for disposal from the generator and add the fee to their monthly water bill."

The program has been in place since 1991. To date, Tulsa has not been sued for restricting interstate commerce.

Why This System? The main tenant behind Tulsa's economic flow-control system, which was developed before the U.S. Supreme Court's Carbone vs. Clarkstown decision, is simple: Solid waste disposal charges are collected at the point of generation rather than the point of disposal.

The MWC in this city of 368,330 residents has a 1,100-ton-per-day (tpd) capacity. By not charging a tipping fee, Tulsa has created a strong economic incentive for haulers to bring all of Tulsa's waste to the MWC.

If the haulers wish to take the waste to another facility, they must pay for disposal. Haulers do not bypass the system, however, because the generator already has paid for disposal in a Tulsa facility.

So why did the city implement this program in the first place? Its history is similar to other cities' experiences. With the MWC's start-up in 1986, the $15-perton tipping fee paid by commercial haulers was subsidized to compete with local landfills.

In July 1987, however, Tulsa stopped subsidizing the tipping fee. When full cost accounting measures were applied, the perton tip fee increased 40 percent to $21.

Not surprisingly, cheaper disposal was readily available in local landfills. Local ordinances directing waste to the MWC were ignored, the MWC experienced a shortfall of more than 100,000 tons per year (tpy), and even higher tipping fees resulted. The Tulsa MWC has only one client for its steam, a local refinery - so when volumes fell, steam production suffered also. Alternatives had to be developed.

Tulsa considered hiring off-duty police officers to track and fine private haulers who violated the city's flow- control agreement. They quickly realized, however, that police enforcement of flow control was impossible. Equally impossible was tracking the haulers and recording dumpster information.

As with most cities, the flow control enforcement issue moved into the courts. The time required to resolve this issue, however, likely would force the MWC into bankruptcy.

The judge overseeing the case gave Tulsa officials 90 days to develop a better program. The Public Works Department formed a work group to resolve conflicts among the business community, private haulers and city officials. Efforts were placed on developing a fair, equitable system that could survive legal challenges.

Service And Billing Although Tulsa does not have a curbside recycling program, six convenience centers are located throughout the city to collect paper, plastics, aluminum, used oil, batteries and other recyclables.

Tulsa has approximately 110,500 residential accounts and approximately 8,500 commercial accounts. Residential MSW collection is largely privatized; Tulsa Solid Waste collection trucks handle seven routes, or 22 percent of the city's residential routes. A conglomerate of private registered haulers called Tulsa Refuse Inc. (TRI) determines who collects the remaining routes.

Tulsa is an open market for the non-residential waste stream. Every month, each commercial waste generator receives two bills for solid waste. One is generated by the private hauler and reflects the service level, collection frequency, container rental, etc.

The other bill, (see Commercial Charges table on page 52) from the city, is included on the commercial water and sewer bill and reflects disposal costs, which are based on the container size, service frequency and whether the unit is a container/ compactor. If the container is full and the business places extra bagged waste at the site, it is billed on a per-bag rate.

Residential accounts receive only one collection/disposal bill (see table on page 52), with a flat monthly rate based on the service type and frequency. The charge is part of the residential water and sewer bill. Through TRI, Tulsa rebates private haulers for their residential collection and transportation costs.

As part of Tulsa's permitting process, commercial haulers must record the service level and frequency provided each month for each account. Information concerning service level changes or new accounts must be submitted by the hauler to the city's commercial account database. Haulers are not required to provide financial data, such as service charges, for each commercial account.

Tulsa has contracted with a local private landfill to dispose of waste overages in the spring and summer due to peaks in yard waste volumes. This material is collected with municipal solid waste (MSW) and transported to the incinerator. When the tipping floor exceeds its limit for waste storage, material is diverted to the designated landfill, where trucks also may dump free of charge.

When Tulsa officials "sold" this program to the commercial sector, they emphasized its cost-control benefits. Businesses have an economic incentive to reduce waste and recycle because the results of paying for the volumes generated or service level would be directly reflected in their bill.

Some Tulsa businesses such as pawn shops and liquor stores don't generate enough solid waste to justify being charged for disposal. When surveyed, officials found that those businesses had immeasurable amounts of trash, no containers and no commercial haulers. Many simply bagged their waste and disposed of it with their household waste.

System Controls Tulsa has implemented several controls to protect the economic flow-control system. Under the permitting requirements, Tulsa officials can view a hauler's account records during reasonable business hours. When a truck arrives at the incinerator for free disposal, the hauler must provide a manifest confirming the waste originates within the Tulsa service area. Tulsa officials also randomly inspect waste on the tipping floor for out-of-city waste or other prohibited materials.

Tulsa has a list of finable offenses and assessments (points) for noncompliance. Accumulation of 10 points in six months may result in a license suspension, while 20 points in 12 months may result in license revocation.

The possible violations and penalties include:

* Failure to submit monthly billing statement on due date: one point per day.

* Incorrect information on monthly billing statement: five points.

* Omission or failure to declare customer and container data on billing statement: eight points.

* Failure to delete ex-customer from billing statement: one point.

* Failure to submit trip manifest at scale house: 0.5 points.

* Failure to submit trip manifest within 24 hours after due at scale house: one point.

* Incomplete or inaccurate information on trip manifest not corrected within 72 hours: five points.

* Failure to remit charges on interjurisdictional waste in a timely manner: one point.

* Failure to label container properly, not corrected in three days: one point per account.

* Intentionally rendering a load of waste unacceptable: four points.

* Failure to comply with tare weights procedure: one point.

Tulsa's collection rate is 99 percent for all commercial accounts billed. If an account is delinquent or the solid waste bill is not paid, the customer's water is turned off.

The water/sewer bill is structured in four parts and ranked in the following order: solid waste disposal; stormwater; sewer and water.

So, if the bill is not paid in full, the water portion is considered unpaid. The solid waste division pays the Tulsa Water/Sewer Department $0.70 per account per month for billing.

Although the number of Tulsa's commercial accounts has increased 11 percent, the overall commercial monthly yardage has decreased 13 percent.

This possibly can be attributed to such factors as previously serviced containers not being larger than necessary or not being full when emptied. When Tulsa moved to the economic flow-control system, containers began to shrink in size and recycling started to increase. (Recycling containers are not assessed a fee.)

What's The Haulers' Take? Approximately 53 licensed commercial haulers operate in Tulsa. With economic flow control and the zero tipping fee, competition is based on only hauling and service. In other words, owning a landfill or disposal facility creates no advantage for a hauler. The zero tip fee effectively takes disposal costs out of the equation.

Tulsa's haulers, however, continue to express reservations about this system. For example, some feel citizens are being charged too much for disposal. Others are dissatisfied with the violation/penalty system. Because some large haulers may have 10 changes in service per day, they would rather be allowed 72 hours (instead of 24) to report the new records.

Tulsa officials answer that they must be notified immediately to ensure that the month's disposal assessment coincides with the more than 20 different monthly billing cycles for the water system.

Other large private haulers complain about the considerable staff time which must be devoted to completing the additional paperwork created by the system.

Further, one private hauler, which owned a local landfill, also complained that its landfill was being underused.

Finally, some haulers feared that their customer lists would become public under the Freedom of Information Act. To prevent city officials from releasing the lists, a permanent restraining order was issued; now, the haulers' customer lists are proprietary.

On the positive side, prior to economic flow control, Tulsa's solid waste division reportedly handled thousands of complaints every month. Today, they report a maximum of 20 complaints per month.

After four years, city officials have not raised rates, and waste generators maintain control over their disposal costs. For example, it's possible for residents going on vacation to notify the solid waste division to stop and start their garbage service - like a newspaper subscription - while the next month's bill reflects the reduced waste generation.

Tulsa's Tips For other cities considering economic flow control, Tulsa officials recommend conducting a cost-of- service analysis. This will reveal the program's financial impacts on commercial accounts and help to establish the service-container yard fees necessary to meet the program budget.

Of course, the rule of thumb is to involve city officials and private haulers from the beginning. Open, honest communication has no substitute.

Ultimately, what makes economic flow control work? Simple - the zero tip fee.

Using the equation from the "Commercial Disposal Charges" table on page 52, Tulsa officials discern how much to bill commercial accounts. For example, a business that has an eight-yard container serviced twice per week would be charged as follows:

N x Y x CF x WCF x 4.33

1 x 8 x 1 x 2 x 4.33 = 69.28 x SCY

SCY = $2.24

69.28 x $2.24 = $155.19

If the same commercial account had an eight-yard container with compaction with the same service schedule, the disposal bill would be calculated as follows:

1 x 8 x 4 x 2 x 4.33=277.12 x SCY

277.12 x $2.24 = $620.75