How do they work?

I mplementing volume-based user fees in rural locales is easier, and more successful, than

conventional wisddm would have us believe.

by William M. Park l

As the “solid waste crisis” has unfolded over the last five to 10 years, most attention has been focused on urban and suburban areas, where huge volumes of solid waste and re- cyclables must be managed. Naturally then, discussions of the role of user fees in solid waste management, particularly volume- or weight-based fees, have centered on their im- plementation within a context of door-to-door garbage and recycling collection. But in some sense, collection of solid waste and recyclables in rural communities through a drop-off sys- tem poses an even greater challenge, partic- ularly from the standpoint of financing this public service and providing incentives for source reduction and recycling.

Historically, rural communities have faced relatively low solid waste management costs that in most cases were funded by general property taxes. But times have changed. Fed- eral landfill regulations and state mandates for more comprehensive collection systems and diversion of materials from landfills through recycling or other means have changed the situation dramatically, exacer- bating the inherent difficulties of small total population bases and low population densi- ties that rural communities face.

Costs have risen to the point that they rep- resent a major claim on rural community bud- gets. Rural counties, often tagged as the “re- sponsible unit of government” in state solid

waste management legislation, are in a par- haulers or by implementing what is typical- ticularly difficult situation. Because low pop- ly called a “convenience center” system. Such ulation densities limit the incentive to private a system involves a number of conveniently haulers to serve residents in outlying areas, located sites with access controlled during many rural counties have gotten into the col- open hours by an attendant, where residents lec,$on business by converting old landfill can drop off their household garbage and per- sites to transfer stations primarily for self- haps separate out a number of recyclable ma-

William M. Park is professor of Agricultural Economics and is affiliated with the Waste Management Research and Education Institute at the University of Tennessee in Knoxville. The research was con- ducted while the author was a visiting professor in the Western Rural Development Center at Oregon State University. in conjunction with the National Rural Studies Committee, a project sponsored by the Kellogg Foundation.

m 1 Resortrce Recycling January 1995

terials. As such, the question naturally aris- es about whether volume-based user fees (VB@s) could, or should, be implemented within such a system.

According to conventional wisdom, the answer to this question is. “No.” Rural solid waste managers and elected officials may readily acknowledge the two basic arguments in support of volume-based user fees, name- ly the equity of households paying in pro-

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Residents can reduce volume-based user fees by separating recyclable materials from waste.

/ Backyard composting allows resi- dents to control their user fees.

/ Special wastes (yard debris, white goods, furniture, tires, etc.) are usual- ly accepted at drop-off sites at a nominal cost, or none at all.

portion to the amount of solid waste they gen erate and the incentive such fees offer fo source reduction and recycling. Howevel most would be equally quick to point out tha volume-based fees may encourage some res idents to employ inappropriate disposal meth ods, e.g., illegal dumping or on-site bumin! or burying. They would also likely expres concern about other possible political and ad ministrative impediments.

This conventional wisdom is reflected a well by the absence of any explicit attention to the rural drop-off collection context in the several local decisionmaker guides to uni pricing that have been published in recen years. The purpose of the research reporter upon in this article is to call into question thi conventional wisdom by assessing the expe rience of several rural communities that have implemented volume-based user fees withir a drop-off collection context.

The first step involved identification o what are considered to be successful exam ples. A June 1993 article in Resource Recy clirzg (“Community adoption of variable rates

1

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An update”) indicated the number of “v;yi- able rate pricing” programs by state as of ear- ly 1993. Contact wa.Lnade with state agency personnel in those states with the highest nurn- ber of programs, as well as other persons knowledgeable about rural solid waste man. agement across the country.

Eventually, this process yielded six exam. ples within a drop-off context that varied with respect to geographic and demographic char- acteristics of the jurisdiction, as well as char- acteristics of the user fee system. Once this set of six was finalized a five-page questionnaire was sent to the person most closely involved with administration of the solid waste man- agement system and was used as an outline for an extensive telephone interview.

Contact was also made with elected off% cials or others in each community who could provide some perspective on either the polit- ical and administrative considerations in im- plementing the user fee system or the impacts of the system. both positive and negative. This article provides a summary of compa- rable information from all six case studies. More detailed information on each case study will be included in a comprehensive report to be published later.

Characteristics Information on the basic geographic and de- mographic characteristics for each jurisdic- tion is presented in Table 1. This information demonstrates the wide variation across the ju- risdictions with respect to land area, popula- tion, population density, and the estimated percentage and number of residents who use the drop-off system.

The jurisdictions portrayed here consid- ered user fee systems for a few months to more than two years before they were im- plemented. Before user fee systems were im- plemented, waste management was funded

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Geographic and demographic characteristics

tjQlJ jurisdiction

quare miles) jpulation ion density square mile) iion, percent : drop-off sites opulation z drop-off sites

Dubois Houston Lane Monroe Tift Weathersfield County County County County( 1) County Town Indiana Minnesota Oregon Wisconsin Georgia Vermont

433 576 4,620 915 269 50 36,600 18,500 298,000 37,300 35,000 2,700

85 32 65 41 130 54

50%

18,300 6,500 149,000 7,500 15,800 2,000

35% 50%

lme-based user fees implemented by 11 towns within Monroe County. William M. Park, 1994.

20% 45% 75%

:ral property tax revenues in four cas- rial property tax levy in one case and 3r parcel assessment in the other. Al- 1 the administrative and political as- If the consideration and implementa- :iod vary across the cases, and in every present an interesting story, space lim- ; do not permit a detailed discussion of .le. A common element, however, was erted effort to publicize plans to im- ,lt the user fee well ahead of time and -ate residents as to the need and logic

other commonality was that significant es were made in the solid waste man-

.

agement system at the time user fees were implemented. Dubois County, Indiana and Tift County, Georgia converted an existing waste collection drop box system to a con- venience center system, and recycling op- portunities were initiated. In Houston Coun- ty, Minnesota, collection of solid waste and recyclable materials was provided by the county for the first time. In Lane County, Oregon, existing transfer sites were secured, recycling was expanded and a recycling cred- it was introduced. In general, towns in Mon- roe County, Wisconsin implemented user fees at the time small individual town dumps were closed and were converted to transfer stations.

When the Town of Weathersfield, Vermont initiated user fees, it also expanded its set of recyclable materials collected.

The basic characteristics of each user fee system are summarized in Table 2. All ex- cept Lane County were implemented between 1990 and 1992. In terms of the “type” of sys- tem, two require purchase of a special bag, two require purchase of a token or sticker to attach to the residents’ own bag, and two re- quire cash payment at the drop-off site for the residents’ own bags. Converting the fees to a consistent basis indicates a range of $0.50 to $2.00 per 30-gallon bag. Although none of the systems charge for recyclables, Hous-

liction Dubois Houston J.&Jg Monroe Tift Weathersfield

initiated April ‘9 1 Oct. ‘91 July ‘80 ‘90-‘92 Oct. ‘92 July ‘91 of bag Own Own Own Purchased Purchased Own

nechanism Sticker Cash Cash Bag Bag Token

Jer unit of volume imum fee

,$.75/45-gal. $1.30/30-gal.(l) $2.00/32-gal.(2) $1.10/33-gal. $1.50/38-gal.(3) $1.00/30-gal. $0.75 $1.30 $6.00 $1.10 $0.45 $1.00

lit or payment for No Buy-back for $1.50 credit No No No ,cyclables aluminum for 10 Ibs. + paid at drop-off sites Yes Yes Yes Yes No No paid at municipal offices Yes No No Yes No Yes paid at stores No No No No Yes Yes

:entage of total cost 33% 26% 100%(4) Variable 63% 57% overed by fee leral property tax funding Yes Yes No Yes Yes No assessment No $.75/HWmonth No No No $25/parcel/year \

= Gallon. = Household.

Or $.07 per pound. Other rates: $12 per pickup load or $5 per cubic yard. Other bag sizes and fees: $.45 per 8 gallon and $.7.5 per 16 gallon. .4lthough the solid waste management system is self-supporting overall, the rural drop-off collection component is “subsidized” to some extent by other system components. lrce: William M. Park, 1994.

Resource Recycling January I995 m

ton County buys back aluminum and Lane County offers a $1.50 credit for users who separate out at least 10 pounds of recyclables per visit.

With regard to overall solid waste man- agement system financing, only Lane Coun- ty covers all of its solid waste management system costs with user fees, although landfill tipping fees do, to some extent, subsidize the system of drop-off sites that serve primarily rural self-haulers. VBUFs in the other sys- tems cover from 26 to 63 percent of the total solid waste management system cost, with the remainder covered by ad valorem prop- erty taxes in three cases, an annual per parcel assessment in one case, and a combination of property taxes and a monthly per household assessment in the other. These “hybrid’ ti- nancing strategies allow per bag fees to be kept at the relatively modest levels noted above, thus limiting the incentive for inap- propriate disposal.

Recyclables and special wastes Discussions of volume-based user fee sys- tems typically emphasize the importance of providing households with an opportunity to reduce their costs by separating materials for recycling. Together with source reduc- tion options such as backyard composting, VBUFs allow residents some degree of con-

trol over their “garbage bill” and can con- tribute to pub- lic acceptance of a user fee system.

The six pro- grams present- ed here accept a wide variety of recyclable materials. The basic five ma- terials - alu- minum cans, glass contain- ers, steel cans, old newspapers and old corru- gated contain- Since 1980, Lane County, Oregon has charged user fees and given recy- ers - are ac- cling credits at its rural transfer stations, such as this one in Creswell. cepted in all of the systems, and five systems accept plastics, magazines and at least one additional type of paper.

Given the variation across the jurisdictions with respect to land area and population, one would expect variation as well in the opera- tional characteristics and technologies used within the systems. As indicated in Table 3, this is indeed the case, with the number of

sites ranging from one to 15, the number of hours open ranging from about 10 to 80, and the tonnage of recyclable materials handled per site in 1993 ranging from 43 to 275 tons. Technologies used for collecting and trans- porting materials and arrangements for proc- essing and marketing also vary widely, as does the role of private sector firms in relation to these activities.

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er of drop-off sites open per week

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commendations by solid waste man- Positive impacts ing a significant difference. :nt professionals regarding treatment of While volume-based user fees are often jus- While definitive “before and after” figures 11 wastes such as yard debris, white tidied on equity grounds, one would certain- isolating the effect on solid waste tonnages %, furniture and tires generally empha- ly hope that they would reduce the amount of requiring disposal were lacking, there was ev- le importance of providing timely, con- solid waste requiring disposal, as a result of idence of small absolute reductions in three lt and low-cost options for disposal. Al- the incentives provided for separation and cases. In one other case, solid waste tonnage h the ways these special wastes are han- source reduction efforts on the part of resi- stayed roughly constant even though signif- mies across the six systems, most ac- dents. Although the information available on icant economic and population growth was lem at no or nominal cost at one or more this subject was somewhat uncertain and dif- taking place. Reported increases in tonnage off sites, thereby limiting any incentive ficult to interpret in most cases, them is a good of recyclables collected account for part of sidents to do something inappropriate, bit of evidence to suggest that the incentives the decreases in disposal tonnage, but it is im- items or materials of these sorts. provided by these user fee systems are mak- possible to know how much of the remain-

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Resource Recycling January 1995 m

I der of the decreases (/ were- due to actual 1 source reduction efforts 1 motivated by the

VBUFs and how much I was due to other factors. Although it was dif-

ficult to calculate a valid diversion or recovery rate for the rural drop-off systems alone, as noted in Table 4, three counties had computed county- wide rates for state re- ports that ranged from 20 to 34 percent. In ad- dition, information from the Town of Weathers- field indicated a diver- sion or recovery rate of about 29 percent.

Jurisdiction Dubois Houston Lane Monroe Tift Weathersfield

Participation in recycling (1) Recyclables recovered (2) Diversion/recovery rates (3)

N.A. = Not available.

65% 95% 75% N.A. 80% 85% 45 146 59 98 38 148

N.A. 34% 28% 20-25% N.A. 29%

(1) Percentage of residents using drop-off sites for garbage disposal who separate out some recyclables, based on careful head counts in Dubois and ‘IX counties and rough approximations elsewhere.

(2) In pounds per capita in 1993. For typical set of residential materials, including aluminum and steel cans, glass, plastic and various forms of paper. For Houston and Monroe counties, only countywide tonnage figures were available. Thus, ton- nage is divided by total county population, including residents served by curbside recycling collection programs. In the 0th er four jurisdictions, tonnage collected only from drop-off sites is divided by the estimated population using the sites.

13) In percent in 1993. These diversion/recovery rates are jurisdictionwide and thus include materials collected in curbside re- cycling collection programs as well as items like white goods and yard waste. Exactly what is counted may differ some- what across cases.

Source: William M . Park, 1994.

Per capita amounts of recyclables collect- ed were computed in four of the cases, based on rough estimates of the number of people using the drop-off systems. For Dubois, Lane, and Tift counties, annual recovery ranged from 40 to 60 pounds per capita. For the Town of Weathersfield, approximately 150 pounds per capita were collected in 1993. For Houston and Monroe counties, only a coun- tywide generation rate could be cpmputed, which thus included recyclahles from curb-

side recycling collection in some municipal- ities. Annual pounds per capita were 146 for Houston and 98 for Monroe.

Finally, perhaps as useful an indicator as any of the impact of VBUFs in these case stud- ies is the level of participation in the separa- tion of recyclables, measured in percent. In two of the cases, participation had been care- fully monitored or tracked over a long period of time; in three others, an estimate was made on the basis of general observations by atten-

dants and solid waste managers. The range across the five cases was 65 to 95 percent, with the average at 80 percent, which is relatively high compared to previous estimates for drop- off recycling systems elsewhere without vol- ume-based user fee systems.

Problems As noted in the introductory section, con- ventional wisdom has it that user fee systems in a rural drop-off collection system context

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I ;: bur exe me of- one eat so’ an! afl sy: th: jet P’e In: tlx

g a to en fa ar P; Se

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._ . . I . . . . I ‘-. :ly to generate senous problems m me

3f incre,ased illegal dumping and g, as well as less serious ones such as ,ive 0mpaction, use of private com- a] collection containers and out- isdiction disposal. Although at least these problems was noted as minor in

If the systems studied, in no case did vaste managers or elected officials view -oblem as serious enough to undertake iamental reconsideration of the user fee n. It is good to keep in mind, however, rese assessments are admittedly sub- e and are based on interviews with peo- osely involved with each system who iave some vested interest in portraying system in the best light. several cases, where an increase in ille- lmping occurred, a show of willingness force applicable ordinances was appar- sufficient to reduce the illegal dumping quickly to more usual levels. A typical

)ach has been to identify the responsible ’ from mail in household garbage and a letter stating that cleanup is required

certain date, with the threat of a modest .f it is not done. Some counties have pub- d names in the newspapers or required :ns to appear before a county judge. The ased burning in some cases was not nec- rily looked upon as a problem, becauSe ing of clean wood or paper is allowable

in some rural areas, almough concern was ex- pressed in some cases about burning of oth- er materials. To avoid any problems with ex- cessive compaction, Houston County insti- tuted a weight limit of 30 pounds per bag from the beginning. In several cases, minor prob- lems with use of private commercial collec- tion containers were eliminated with the use of locks. Tift County initially had some prob- lem with residents going across the county line to use unattended containers at a waste collection drop box system in a neighboring county, but those containers were soon relo- cated away from the county line.

propnate rinancing strategy ror an rural ar- eas, the experience of these rural counties and towns warrants the following conclusions. Implementing a volume-based user fee sys- tem in a rural drop-off context appears feasi- ble across a wide range of geographic and de- mographic conditions, as well as a wide range of system characteristics, without prohibitiye administrative problems or costs.

Another concern expressed often is that administration of a VBUF system in a rural drop-off context might be infeasible or pro- hibitively costly. Although minor adminis- trative adjustments have been made along the way in all of the systems, in no case were the basic administrative changes major impedi- ments. In addition, in most cases adminis- trative costs were not increased substantial- ly, because the commitment had already been made, quite separately from the VBUF ques- tion, to have attended drop-off sites. Costs associated with sale of the bags, stickers or tokens have been minimal, and no billing sys- tem is required in any of the systems.

Most residents appear willing to support (or at least accept) a volume-based user fee system if they are well informed of the need for and logic of the system in advance, and are given reasonable options for gaining some measure of control over their total bill. Hy- brid financing strategies allow per-bag fees to be kept at modest levels. Support comes more easily if VBLJFs are initiated at the time of a significant enhancement of the collec- tion system.

VBUFs within rural drop-off collection systems appear capable of motivating rela- tively high levels of participation in the sep- aration of recyclables, thus contributing to relatively high per capita generation rates for typical recyclables and countywide diversion or recovery rates.

Conclusions Although VBUFs may not be the most ap-

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