£^3-0- a- MA55- V9S\ UMASS/AMHERST Commonwealth Massachusetts of 3iaQtib01t.b7T033 Pay As You Throw: An Implementation Guide for Solid Waste Unit-Based Pricing Programs Prepared by Massachusetts Executive Office of Environmental Affairs Massachusetts Department of Environmental Protection January 1997 Commonwealth of Massachusetts Pay-As-You-Throw: An Implementation Guide for Solid Waste Unit-Based Pricing Programs Prepared by: Executive Office ofEnvironmental Affairs Department ofEnvironmental Protection January 1997 i ACKNOWLEDGEMENTS This guide was prepared under the direction ofScott Cassel, Director ofWaste Policy and Planning for the Executive Office ofEnvironmental Affairs (EOEA). Principal authors were Denise Gaffey and Cherie Abbanat, EOEA. Special thanks go to Joseph Lambert, Regional Planner at the Department ofEnvironmental Protection (DEP), for his contributions to the direction and content ofthis guide. We are grateful to the foUovmig individuals for revievmig drafts ofthe guide: Lisa Skumatz, Skumatz Economic Research Association; Pat Vieira, Town ofSeekonk; John Fischer; EOEA, Amy Perry, MassPIRG; and from DEP: Joanne Bissetta, Edith DeMello, Robin Ingenthron, and Roy Willey. Special thanks also go to Tara Manno and Steve Lowe, DEP, for their GIS assistance, Tom Higgins, DEP, for editing the guide, and Meg Hildreth, EOEA, for assistance with, graphics and formatting. EOEA and DEP express their thanks to the U.S. Environmental Protection Agency (EPA) for permission to use portions ofthe text entitled Pay-As-You-Throw: Lessons LearnedAbout Unit Pricing (EPA530-R-94-004). Special thanks also are extended to the East Central Iowa Council ofGovernments and the Iowa Department ofNatural Resources for permission to reprint text from. Pay-As-You-Waste: State ofIowa Implementation Guidefor Unit-BasedPricing. For further information on unit-based pricing and assistance with program implementation, contact: Joseph Lambert, Regional Planner Division of Solid Waste Management Department ofEnvironmental Protection One Wmter Street MA Boston, 02108 Tel: 617-574-6875 Fax:617-556-1049 E-mail: [email protected] Printed on Recycled Paper Minimum 20 percent post-consumer content 11 ABOUT THIS GUIDE This guide provides an overview ofsolid waste unit-based pricing and assists local decision makers and citizens in implementing programs in their communities. It explains the process of planning, developing, and implementing unit-based pricing with emphasis on successful strategies employed by selected Massachusetts communities. The guide is divided into six major sections: SECTION I: TYPES OF SOLID WASTE USER FEES describes the different types ofsolid waste user fees. SECTION ADVANTAGES OF UNIT-BASED PRICING PROGRAMS II: discusses the specific advantages ofunit-based pricing. SECTION THE ELEMENTS OF UNIT-BASED PRICING PROGRAMS III: describes the design options and program elements ofsuccessful unit-based pricing programs. SECTION rV: ISSUES TO RESOLVE discusses issues that should be addressed before program implementation. SECTION V: STEPS FOR DESIGNING AlVD IMPLEMENTING A SUCCESSFUL UNIT-BASED PRICING PROGRAM provides an overview ofthe design and implementation considerations associated with establishing a unit-based pricing program. SECTION VI: BUILDING A CONSENSUS FOR UNIT-BASED PRICING describes the important process ofbuilding consensus for unit-based pricing and educating the public. A series ofappendices provide additional information: Appendix A: Unit-Based Pricing Case Studies Appendix B: Designing a Rate Structure Appendix C: Implementation Timeline for Unit-Based Pricing Appendix D: Table of75 Massachusetts Municipalities with Unit-Based Pricing Appendix E: List ofMentors Appendix F: Sample Briefing Documents Appendix G: List ofPublications, Reports, and Videos on Unit-Based Pricing and Full Cost Accoimting (available firee ofcharge from DEP) Appendix H: Glossary ofTerms While this guide provides an overview ofunit-based pricing, more extensive reports available from EOEA and DEP contain worksheets for setting rates and other important information beyond the scope ofthis guide. Planners should consult Appendix G to learn how they can obtain these materials. Planners interested in implementing unit-based pricing also are encouraged to speak with people in communities that have successfully adopted programs. The list of "mentors" cited in Appendix E is provided for this purpose; these individuals welcome your inquiries. iii TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABOUT GUIDE TfflS iii EXECUTIVE SUMMARY 1 INTRODUCTION 3 What is Unit-Based Pricing? 3 Unit-Based Pricing in Massachusetts 3 SECTION TYPES OF SOLID WASTE USER FEES 4 I: Flat Fees 4 Unit-Based Fees 5 SECTION ADVANTAGES OF UNIT-BASED PRICING PROGRAMS II: 5 Waste Reduction/Cost Control 5 Fairness 6 Increased Recycling and Composting 6 Environmental Quality 6 SECTION III: THE ELEMENTS OF UNIT-BASED PRICING PROGRAMS 7 Program Design Options 7 Specially Marked (Imprinted) Trash Bags 7 Specially MarkedStickers or Tags 9 Punch CardSystems II Subscription Systems 12 HybridPricing Systems 13 Convenient Recycling Options 14 Add-on Program Elements: Bulky Items and Yard Waste 14 SECTION IV: ISSUES TO RESOLVE 16 Perception that Fee is a Tax 16 Effects on Low-Income Households 16 Illegal Dumping 17 Administrative Costs 17 Multi-family Dwellings and Apartment Buildings 17 Mechanical Trash Compactors 19 Seasonal/Transient Populations 19 SECTION V: STEPS FOR DESIGNING AND IMPLEMENTING A SUCCESSFUL UNIT-BASED PRICING PROGRAM 20 Design a Unit-Based Pricing Rate Structure 20 Develop an Implementation Schedule 21 Options for Phasing-in a Unit-Based Pricing Program 21 Provide One Free Bag or Sticker Per Week 21 Switch to Flat Fee Pricing as an Interim Measure 22 AccountingSystem Options 22 Full Cost Accounting 23 Enterprise Funds 23 SECTION VI: BUILDING CONSENSUS FOR UNIT-BASED PRICING 24 Step Establish an In-house Unit-Based Pricing Task Force 24 1 : Step 2: Sell the Program to Key Decision Makers 24 Chart Out the Approval Process 24 Prepare Briefing Documents 25 Other Steps to Involve Key Players 25 Develop a Number ofProgram Options 26 Step 3: Gather Public Input 26 Step 4: Educate the Public 27 APPENDICES 29 VI EXECUTIVE SUMMARY This guide provides an overview ofsolid waste unit-based pricing, the system in which residents pay for municipal solid waste management services per unit ofwaste discarded rather than solely through a fixed fee or property tax. It explains the process ofplanning, developing, and implementing a unit-based pricing program with emphasis on successful strategies employed by Massachusetts communities. The Executive Office ofEnvironmental Affairs (EOEA) and the Department ofEnvironmental Protection (DEP) developed this guide to help local decision makers and citizens implement unit-based pricing in their communities. Cutting Costs, Saving Money Seventy-five communities in Massachusetts have adopted solid waste unit-based pricing. Across the country, more than 2,800 municipalities have such programs. Unit-based pricing is catching on in Massachusetts and across the nation because it makes sense! Communities with unit-based pricing save money through lower disposal costs and additional recycling revenues. They also gain control over their waste management budgets and provide secure fimding sources for additional programs, such as recycling and composting. Since residents pay directly for disposal services in proportion to their use ofthem, they have a strong financial incentive to throw away less while recycling and composting more. In Massachusetts, communities with unit-based pricing have much higher rates ofrecycling, on average, than those without it. In fact, nearly two-thirds ofthe communities with unit-based pricing received A's on their 1996 Recycling Report Cards, signifying a recycling rate of30 percent or greater. By contrast, just over one-third ofthe rest received the top grade. EOEA and DEP consider unit-based pricing to be a primary vehicle for attaining the state's 46 percent recycling goal for the year 2000. Designing a Program Pay-As-You-Throw: An Implementation Guidefor Solid Waste Unit-BasedPricing Programs provides "nuts and bolts" advice on designing and implementing a program in your community. This publication takes you through each ofthe key steps and provides suggested timelines for performing them. The guide also describes and weighs both the advantages and disadvantages of the five program types currently being used in Massachusetts: bags, stickers, pimch cards, subscription service, and hybrid pricing. The guide addresses those issues ofparticular concern to municipal officials: public perceptions that unit-based pricing isjust a new tax, worries about increased illegal dumping and the challenges ofintegrating multi-family dwellings into the new system. Massachusetts EOEA/DEP Unit-Based Pricing Guide January 1997 towns and cities with unit-based pricing in place already have dispelled many ofthe myths associated with these concerns. Gaining Local Support Another focus ofthe guide is on building consensus at the local level for unit-based pricing. Key decision makers are identified and suggestions are provided for gaining their support. Techniques for gathering input from the public and performing education and outreach about the program are provided, as well. The guide makes suggestions for designing a program that will maximize the potential for waste reduction and recycling while gaining community support. Options are given for phasing-in a program over a period oftime so residents can grow accustomed to paying directly for waste disposal. Learning from the Experiences ofOther Communities Pay-As-You-Throw: An Implementation Guidefor Solid Waste Unit-BasedPricing Programs contains numerous case studies that spotlight Massachusetts communities with successful unit- based pricing programs. Additional program details and information about how implementation hurdles were overcome can be found in the guide's appendices. The guide contains a list ofthe 75 communities with imit-based pricing, describes the type of program in place in each community, and provides contact names and numbers. Another feature is a list of "mentors" - individuals who have launched successful programs and now are willing to make themselves available for one-on-one consultations with other communities. These people are your best sources ofpractical, field-tested information. How the State Can Help The state enviroimiental agencies are another valuable source ofinformation and assistance on implementing unit-based pricing programs. EOEA and DEP have established a grant program to assist communities with "pay-as-you-throw" program startup costs. The guide provides information on eligibility and describes the application process. Also included in the guide are a list offree publications, reports, and videos on unit-based pricing and fiill cost accounting, and an order form you can use to obtain them. EOEA/DEP Unit-Based Pricing Guide January 1997