Does Pay-As-You Throw Pay Off?

Christina DiMartino

Although pay-as-you-throw (PAYT) has a surprisingly long history, today its momentum is increasing. Word-of-mouth is spreading far and wide, with communities hoping PAYT lives up to its promise to reduce waste and increase recycling. Additionally, communities that adopt fee-based waste collection systems are banking on PAYT's claims to generate revenue to cover rising management costs.

PAYT works, according to the U.S. Environmental Protection Agency, Washington, D.C.

"It's a simple and basic concept," says Janice Canterbury, environmental scientist with the EPA's Office of Solid Waste in Arlington, Va. "The more waste you throw, the more you pay. The more you recycle, the more you help the environment. Research findings from a 1996 through 1998 study indicate the country now enjoys a 14 percent to 27 percent reduction in waste, and a 32 percent to 59 percent increase in recycling rates."

While Canterbury says there currently are 4,000 U.S. communities with PAYT programs on record, the fact that it has taken 60-plus years for to get the ball rolling may lead some to believe that a fee-based system is not that simple.

PAYT actually began in the 1920s when a few communities in California decided there was a better way to handle residential waste. Yet despite the hindrances to implementing a PAYT program, the communities that have stuck with it say overall, it pays off.

PAYT Brings Equality "With PAYT, the incentive to compost, recycle and use less trash makes people think about how they'll manage their waste," says Mick Mercer, manager of streets and solid waste services for the city of Loveland, Colo. "[PAYT] added some equity to rates because now people know they're charged for only what they throw. It makes good common sense, and works under that same analogy as water and electric bills."

A community of 50,000 people, Loveland began its citywide PAYT program in 1993. Prior to that, households, on average, were setting out slightly more than two an a half traditional sized garbage cans weekly, and the city was charging a flat monthly fee to fund its waste collection program.

Mercer says he and the city's leaders liked the idea that PAYT could save money, but they didn't understand how the rate system worked. "We wanted to introduce curbside recycling, and we knew if we charged people on the amount of waste, it would encourage them to recycle," he says.

After examining the options, city officials opted to charge residents for trash collection by the bag - the more bags, the higher the charges - because they felt it was the most equitable system.

"If you charge a flat monthly fee, it fails to inspire people to make a strong effort to recycle," Mercer says. "Some people set out lots of trash every week, while some have very little - so it wasn't fair. Now everyone can do their own math and learn that if they continue to be wasteful, it's going to cost them." And, he adds, "the amount of recyclable materials is much higher than before."

According to city figures, in 1999, 59 percent of Loveland's residential waste stream was recycled instead of landfilled. Prior to PAYT all waste was landfilled.

The city now charges a flat monthly fee to fund its waste diversion program for curbside recycling, drop-off recycling, yard waste recycling, household hazardous waste recycling and the annual spring cleanup program. Loveland also accepts used automobile oil for free and takes it to refining recyclers.

Residents who put out a lot of trash initially balked at the change, Mercer says. But everyone now realizes the fairness of PAYT.

"People who didn't care before have taken on a new attitude," Mercer adds. "Even if their pocketbook was the initial incentive, they ultimately realized what they're doing for the economy. PAYT is a great tool for educating the public. We now have an environmentally aware community where everyone is proud of what they're helping to accomplish. We think they then try to do other things that are good for environment."

Mercer says Loveland continually tries to tweak its program by selling backyard compost bins, holding workshops to teach residents how to mulch mow and implementing other projects. "We're considering [buying] about nine dual collection trucks and deciding whether we want dual trucks or separate units to keep trash separated from recycle waste," he adds.

EPA Bullish on PAYT The EPA supports PAYT because it encompasses environmental stability, equity and economic stability [see "Three 'Es' to PAYT Success" on page 55]. Communities can reap economic rewards with PAYT, but the EPA recommends full-cost accounting so everyone can see cost breakdowns, says Joseph Lambert, PAYT and grants manager for the Department of Environmental Protection Agency (DEPA) for the Commonwealth of Massachusetts in Boston.

"The biggest problem [with PAYT] is getting the program across to the public in a way they'll understand," Lambert says. "By sharing the cost breakdown, it helps them understand how much good the program does."

Lambert conducts community outreach to encourage PAYT in his state, as well as nationwide. "It's my function to encourage cities to adopt a PAYT program," he says. "I also oversee grants to help new municipalities engage in the program. We present conferences, hold presentations and workshops here and in other states to encourage the [PAYT] program."

Massachusetts has 6.2 million residents in 351 municipalities, of which 91 have implemented PAYT. "Two more are coming on board now," Lambert adds.

The state began PAYT in 1995 with a two-tier system that encourages either a tax based or flat fee system. "It includes fixed cost; contracts, salaries, recyclables and equipment," Lambert says. "The actual waste disposal cost, the tipping fee, is based on tonnage and covers variables in transportation expenses. Communities commonly use a bag or container system, which the resident pays for. The revenues go toward education, literature and other program overhead."

State grants also can help fund PAYT, he adds. For example, in Massachusetts, "The Clean Environment Fund comes from unredeemed cans and soda bottles. This money comes back to the state, and then goes to the environment. Last year alone, Massachusetts distributed $10.2 million to municipalities and businesses to establish or upgrade recycling programs. Some communities used this money to start a PAYT system.

According to Lambert, the Massachusetts DEPA offers $5 per household to towns and cities who implement PAYT. If a town has curbside service, they receive $10 per household. The state also gives cities and towns $100,000 recycling trucks, and provides containers for every participating household.

"This incentive helps us get more cities and towns involved," Lambert explains. "We're now working with 25 municipalities who hope to begin a PAYT program. Our goal for 2001 is to have 140 municipalities involved."

Providing PAYT Funds The town of Seekonk, Mass., is one beneficiary of Massachusetts DEPA funding. Home to just under 14,000 people, the town's PAYT program began in 1993 to meet state waste bans.

Patricia S. Vieira was the first recycling coordinator in 1990, when investigation into the PAYT program began. She later served on the town's board of selectmen, at which time she consulted with the state's DEPA about PAYT issues. Although she currently works in public affairs, she remains devoted to the program's benefits.

According to Vieira, Seekonk originally had a comprehensive curbside trash program paid for by a tax-based system, which it instituted to meet state waste bans. "We moved to a flat fee per household in 1991," she says. "Everyone paid the same amount for the full cost accounting method, and the fee directly reflected the cost of providing total service to all residents."

However, Vieira says residents complained that some didn't recycle at all, others conserved more, yet everyone paid the same bill.

By 1993, "we realized the economic structure of PAYT was the way to go," Vieira says. "To meet the state's waste bans, we instituted a comprehensive curbside trash program. To inspire residents to participate, we moved to PAYT."

At the time, few communities in the country were involved in this type of program. Seekonk even created its PAYT program before the EPA had produced educational materials, Vieira says.

Using a two-tier, trash bag system, Seekonk now maintains a flat fee per household, $85.60 per year, for all fixed expenses. Residents purchase an official blue trash bag in either a package of 10, 30-gallon bags for $8.60 a package, or a package of 10 15-gallon bags for $5. Bag costs were developed through a "full cost" accounting system.

The Massachusetts DEPA provides assistance by helping to ship collected recyclables to market. "We source recycling materials separately," Vieira says. "We use a contracted vendor, who takes the materials to a site in town. The town acts as its own recycling broker - and we've secured and maintained our own market. The money comes back to the town of Seekonk."

Since it began its recycling program, the town has gradually accepted more materials, Vieira says. For example, Seekonk plans to add No. 1 plastic bottles to its list of accepted materials soon. And, occasionally, the town sells composted mulch made from its yard waste to the public, as well as uses it for community areas.

Additionally, "we've placed collection boxes throughout the town for clothing," Vieira says. "We have a crew who sorts it into reusable items for overseas markets, and the balance is sold as scrap. It was our obligation, once we moved to blue bags, to find ways to help people dispose of other items they would otherwise throw in the trash."

To provide residents an opportunity to dispose of their old appliances, furniture and other bulky items, Seekonk hosts a 'bulky waste day' between eight and 10 times per year. To access that, the city sells a $30 dollar annual pass to residents that entitles them to six visits to the landfill.

Overall, Vieira says the biggest challenge was getting people to view trash pickup like a utility. But the benefits have been huge. Seekonk has collected more than $275,000 in 1993 alone from the PAYT program, she says. "We're now considering entering into an enterprise fund with the money, but until now it's been used to offset expenses and maintain our bag and flat fee price."

Finding Added Finances The city of Wilmington, N.C.'s Solid Waste Management Division also has enjoyed economic benefits from converting to PAYT. With a population of 75,000, Bill Reed, Wilmington's superintendent of operations, says the community became involved in the PAYT program in November 1992.

"We were fortunate because ours was basically a grassroots program begun by the citizens," he says, noting that this helped eliminate some of the initial PAYT price shock. "At the time, Wilmington had the highest tipping rate in the state - $60 per ton."

According to Reed, in January 1990, the community began a comprehensive curbside recycling program, as well as separate vegetative collection. The city sold the program to the community by saying, "If you separate your trash and yard waste, and put them curbside separately, we'll be able to reduce fees for trash collection," Reed notes.

However, just the opposite was happening. "Prices were increasing constantly, and a mini-riot finally resulted," Reed says. "Citizens complained constantly about the cost of waste removal, and the town had a influx of irate citizens calling. This was the impetus that propelled us toward the PAYT program. We organized several focus groups to work with citizens, so all areas were represented."

Prior to the program Wilmington's system included twice weekly pickup. Reed says the focus groups made a presentation to the council to start a once-a-week pickup program.

"We provided carts and offered residents their choice of 90- or 40-gallon carts," he says. "They pay for the cart when they request trash pickup service. Residents were open to the idea, especially knowing it would reduce trash fees."

Reed says the town consulted with the U.S. EPA, which provided literature to help communities in the planning stages. Wilmington also looked at community programs nationwide, as far away as Oregon, to see what others were doing.

"We read and researched considerably. Trade publications were among our best sources for knowledge," he says. "We didn't reinvent the wheel - we learned from others and the PAYT office, then built a program suited to our particular needs."

Wilmington now has a volume-based PAYT. For excess trash the carts won't accommodate, residents can purchase official tags, which sell for $1 each. The city also picks up recycled materials and yard trash once a month, and bulk items once a week on request.

"If a resident requires a second pickup, we'll accommodate them, but for an extra charge," Reed says.

As a caveat, Reed cautions that when signing up for their initial trash service, residents may choose the wrong size bin, which in Wilmington's case forced them to switch a lot of carts. "They often choose the smaller cart because it's cheaper - $12.30 a month compared to $15.30 for the large cart," he says. "They don't think about what will happen when they attempt to cram 90 gallons of waste into a 40-gallon cart."

One of the greatest benefits of Wilmington's PAYT program is financial. "The city saved $400,000 the first year," Reed says. "Much of this came from renegotiating contracted waste haulers, and dropping our service needs from twice to once a month. We've also enjoyed some recycling revenues."

Customer Driven Program Like Wilmington, Athens, Ga.'s PAYT program was motivated by residents. Sharyn Dickerson, assistant solid waste director for Athens-Clark Solid Waste Department in Athens, Ga., since September 1991, says the city's citizens advisory committee launched the idea after researching other PAYT communities.

"We implemented our PAYT program in 1995," she says. "Because it had public support, it passed without hesitation."

However, Athens had to educate its residents as the city switched from charging them from a full tax base to a user fee over 18 months.

"At the beginning, some residents thought we were double charging them," Dickerson admits. "We went through a period where we had to reeducate them [explaining] they were no longer being charged on their tax bills and would save money. After four or five direct mail flyers, a lot of media coverage and public service announcements, they began adjusting to the idea."

During the 18-month switch, the finance department began deducting small amounts from the tax bill and began adding the extra charges to the water bill. The progression took about one year, and the charge remained on the utility bill for about a year. After another six months, the city began charging a user fee, then deducting the same amount from the tax bill. The PAYT program made the final billing transition in September 1995.

"At first, many people thought we were double taxing them," Dickerson says. "In hindsight, we would suggest other communities make the change immediately instead of gradually because it's too confusing for the public to grasp easily."

Since the program began, Dickerson says the number of items residents can recycle has gone up. "We began with nine items and are now recycling 19. Our participation rate in 1998 was up to 69 percent," she says. "Overall, we've seen a 72 percent increase in amount of recyclable materials collected. We've also seen a 48 percent reduction of household trash."

Dickerson also predicts residents are buying more frugally, composting and using garbage disposals.

Looking forward, Athens-Clark's solid waste department has targeted electronics recycling, office materials and other types of waste. "Commercial businesses use a tremendous amount of toner and ink jet materials," Dickerson says. "We're also looking into creating a rechargeable battery recycling program, a reuse center and a special events recycling program. Athens has lot of festivals, football and sports game events, and we're trying to implement a strong recycling system for the materials they use."

Revenue Aside,PAYT Still Beneficial The best part of PAYT is that it allows people to control their own costs and savings, says Bob Kerlinger, founder of Innovative Environmental Systems Inc., Poquoson, Va. If residents live in a tax-structured community, they likely think recycling as well as waste collection is free, he says. However, because PAYT communities pay for everything they dispose, there is an incentive to put out as little trash as possible.

Previously with the U.S. Air Force's recycling and composting program, Kerlinger helped plan Poquoson's PAYT program. He also works with other communities in the country, serves on PAYT's Task Force and lectures on the program.

"Poquoson's program began in 1991 by developing a drop-off recycling center run by volunteers," Kerlinger says. "In this area many small towns run together, so a regional center was developed for curbside recycling and we closed our drop-off center. City fathers then asked us to take a look at the trash system to see if we could make improvements."

In 1992, after eight months of volunteers investigating other community trash systems, the city's PAYT program officially began.

"When we started PAYT, our recycling rate averaged 15 percent," Kerlinger says. "At the same time we began regional curbside collection. As happens with most PAYT programs, recycling went up and trash collected went down. As opposed to the 15 percent recycling average in 1991, we increased to a 56.8 recycling percentage in 1999.

"In 1999, we picked up approximately 80,000 pounds of recyclable materials," Kerlinger continues. "That's approximately 310.5 pounds per household. When you look at the overall average, we collect more than 120 pounds more per household than the national averages. This tells you PAYT is a tremendous incentive to recycle."

Poquoson elected to go with a 32-gallon bag system. Kerlinger says the green bags have a city seal imprinted on them, and they are sold for $1.65 by local businesses. Businesses don't share in the profits of bag sales but do it as a community service with revenues from bag sales going to the city. The city uses these funds to pay for trash pickup, disposal and the recycling program.

As an added benefit, Kerlinger says PAYT has reduced costs and time spent at the curb. In fact, Poquoson has been able to reduce its number of drivers because of PAYT.

"Trash pickup is now collected by a side loader truck with one driver, compared to the three we used to have on the trucks. I've timed them and find that it only takes eight seconds from the time he stops, grabs the trash bag, throws it into the truck and drives away," Kerlinger says. Taking into account the benefits of increased recyclables and income, as well as reduced waste, labor and time, "PAYT is the most efficient way to pick up trash," he says.

The U.S. Environmental Protection Agency, Washington, D.C., supports PAYT's approach to solid waste management because it encompasses:

1. Environmental Sustainability: Communities with PAYT programs have reported significant increases in recycling and reductions in waste, primarily due to the waste reduction incentive. Less waste and more recycling means fewer natural resources need to be extracted, Additionally, greenhouse gas emissions from manufacturing, distributing, using and disposing of its remains are reduced through recycling and waste reduction.

2. Economic Sustainability: PAYT helps communities struggling to cope with soaring municipal solid waste management expenses. They can generate revenues to cover solid waste costs, including costs for recycling and composting. Residents also benefit because they can control their trash bills.

3. Equity: When trash management costs are hidden in taxes or charged at a flat rate, residents who recycle and prevent waste subsidize their neighbors' wastefulness. Under PAYT, residents only pay for what they throw away.

Successful PAYT programs bring these components together through careful consideration and planning, says Janice Canterbury, environmental scientist with the EPA's Office of Solid Waste in Arlington, Va.

For information about PAYT, visit the EPA's website: www.eta.gov/payt. The PAYT office also helps connect communities so people can learn what works in other areas of the country.

Joseph Lambert, PAYT grants manager for the Department of Environmental Protection Agency for the Commonwealth of Massachusetts, Boston, also provides program information. Call him at (617) 574-6875 or visit the DEPA website: www.state.ma.us\dep\recycle\recycle.htm.