Make trash fees reflect environmental, as well as economic, values

By Chelsea Maude Avirett | May 12, 2016

The recent discussion about City Council’s approval of a revised fee structure for dumping municipal solid waste brings up an interesting question about values: Does the current MSW fee structure match the values of reducing waste that the community (presumably) has? And should it?

Currently City Council bases permit fees on covering the costs to send waste to PERC. This is an economic value that is completely divorced from any environmental impact. If City Council wants to make reducing waste a long-term goal of the city, then over the next few years it will have to revisit this question of economic versus environmental value in relation to permit fees.

The area that we think of as "the dump" is fiscally divided into multiple categories — the landfill receives construction waste, the hopper receives trash and the recycling center receives recyclables. The fee structure for each operates according to different variables — the state requires that we fill the landfill within the next few years, so the city must increase the amount of construction and demolition debris, trash is trucked out of town, which is a cost that the city incurs, but the city is working to make this revenue-neutral, and recycling can be profitable if the city can increase the recycling rate and attract a higher volume of materials than the it currently receives.

The values for these different areas are different as well: the landfill’s profit was intended to be sufficient to cap the quarry (a cost that the state will now largely cover), the hopper is intended to cover its own costs, and the recycling is considered to provide an environmental, rather than an economic, value. In other words, the value of reducing waste overall isn’t really priced into the economic model currently operating at the dump.

The hopper is the primary focus for waste reduction, because it is the one place where increasing volume has no current economic or environmental benefit. Decreasing waste has a clear environmental impact, but because the fees are intended to cover the costs, there’s little direct economic impact.

It is not immediately clear how the fee structures for disposing of MSW (the hopper) are derived, so I asked Dave St. Laurent, the director of Public Services, to explain the differences between fees for commercial haulers and residential permits. He emphasized that the current fee structure is intended to assess residents and commercial haulers equally and to ensure that both pay what it costs to handle their respective MSW. This has not been the case in the past because commercial haulers were paying the full cost to dispose of their waste, while residents’ sticker fees were subsidized from the landfill fund.

On the surface, it’s hard to see how commercial haulers and residents are paying similar fees, because the process for charging commercial haulers and residents is radically different: commercial haulers pay by volume (a tonnage fee), while residents pay based on a timeframe (annually). In order to align those costs, St. Laurent said, the department calculates how much waste comes from residents and then calculates the annual permit fee by dividing the costs by the number of residents using the service.

In other words, commercial fees are based on use (trucks are weighed coming and going), while residential fees are based on cost to dispose of waste collectively rather than individually. On the resident side, it’s impossible (without a pay-per-bag structure) to track individual usage, so the costs must be apportioned across all users.

Most residential permits are a good deal for their users. According to the EPA, we each generate about 4.4 pounds of trash a day, which is about 80 percent of a ton per year. Under the current fee structure, households with only one person would likely save money by paying per bag, but larger households (unless they actively reduce waste, which usually requires composting) are paying less than commercial haulers would. For these households, pay-per-bag may offer an environmental benefit, but it is one that would come at an economic cost.

At the moment, the most obvious ways to control waste costs are difficult: recycling is a bit of a pain and composting can be time-consuming. In their current form, neither is practical for commercial haulers. (Picture the six bags you currently need to recycle, laid out on everyone’s curb.) But the city is actively considering adopting single-sort recycling and establishing a citywide compost program.

If and when these programs become available, City Council should revisit the permit fee structure and ask hard policy questions: should we charge all users equally or actively incentivize those who reduce their personal waste? Should commercial haulers be required to recycle if they pay for the full costs to dispose of their waste?

If the goal is to reduce the city’s environmental impact, once recycling and composting are improved, City Council should actively promote pay-per-bag. Whenever pay-per-bag comes up, people are quick to argue that voters have twice voted it down. That is true. But voters have only voted down requiring that everyone use pay-per-bag.

That doesn’t mean City Council cannot or should not incentivize pay-per-bag, perhaps even lowering bag costs in order to promote their use or offering two pricing tiers for commercial haulers and lowering the cost for those who recycle. If accompanied by streamlined recycling and composting options, this allows people to control and reduce their costs along with their waste and provides, for individuals, both an economic and an environmental benefit.

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