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Collection Rate Structures
in a
Zero Waste WorldRichard Gertman
Cascadia Consulting Group
NACo Waste Management Forum May 2012
The Current System
• We Pay for Garbage Service
• and Recycling is FREE…(Oops, I mean at no additional charge)
Our system revenue is from collecting garbage
• Charges based on service levels• Increase in recycling means less garbage
• More recycling means more services• More services means higher costs• But Less revenue
• Does that work for you?
So…
… How can you fund your collection programs if there is no more, or much less, garbage?
Option 1. Charge for all Collection Services
• Residential recycling is now ‘FREE’ to encourage recycling• Is free necessary to get residents to recycle • A few communities already charge for collection of recyclables
from commercial accounts
Charge by the gallon• If the cost for service is $1.00 per gallon
of garbage [$32.00 for 32‐gallons]
• And, If a household had a 32‐gallon garbage can, a 64‐ recycling cart and a 96‐gallon plant trimmings cart, the $32 required to cover the cost of services is only $0.16 per gallon
• So by composting at home, and switching to a 64‐gallon cart for plant trimmings, a resident could reduce their cost of service by $5.12 a month.
Option 1A
• An alternate rate structure might be to charge the same amount for each of the three services, so that collection of 64‐gallons of recyclables would cost the same as the collection of 32 gallons of garbage
Charge by the cart
Option 1B
Option 2. Weight Based Collection Charges
• Charging by the pound for materials collected reduces the increment of cost to a level that residents and businesses can have a direct impact on their cost of service.
Option 2
• In this alternative, each cart would be outfitted with an RFID tag to identify the cart and customer
• When the cart was emptied the weight of the contents would be electronically recorded and the customer would be billed the appropriate amount
How it works
Option 2
NO ONE, yet
• Obstacle: Accuracy of Scales• Solution: Charge for less than the recorded weight
Who is already doing this?
Option 3. Reduced Collection Frequency
• The cost of providing service is based on how many trucks must drive by each address, how often
• Reduce the number of trucks purchased, and on‐going fuel and labor expenses.
Option 3
• Weekly collection of all organics (plant trimmings, food scraps, soiled paper)
• On alternate weeks to collect recyclables and dry trash (‘non‐putrescible’ wastes bound for landfill, such as a leaky garden hose)
Weekly & Every Other Week Collection
Option 3
• Residents would still be provided three carts and be directed to put: • all ‘smelly’ wastes in the green organics cart for weekly collection
• recyclables in the blue cart• non‐recyclable, ‘non‐putrescible’ materials in
the gray/black cart
A NEW 3-Cart System
Option 4. Increased Cost for Higher Level of Service
• The rate increases would not be a straight‐line, but those with larger volume of service would pay proportionally more than for smaller volumes
Option 4
• As in an electric utility rate structure, there can be a base connection charge, a baseline use rate, and higher charges per unit of service above the baseline use rate
• If the base service charge was one‐third of the total, the fees for the collection of containerized materials would only be two‐thirds of the total;
• And, we still need to raise the same total revenue
SO… The price per cart would be lower
Option 5. Billing Based on Service Type
• Rather than a single factor rate (volume), the charges would include at least four factors: a. the cost of setting up service (billing and customer
service)b. the cost of collection of multiple containersc. the cost of processing each type of collected materials d. the cost of disposing of the garbage, and the residue
from processing recyclables and compostables
Option 5. Charges
Charges would appear on the customer bill for: • base service charge• the type of material collected• the amount of waste collected• processing the collected materials • transfer fees and landfill fees
• OR, a combination of fees
Next Steps
Modeling • How much revenue is needed• How many accounts of each
service levels• What is the revenue spread • What service changes will these
changes cause?
Supporters and Opponents
• Collection companies who have an ongoing revenue shortfall may be willing to try something new
• Recycling should be FREE!• New and different can be scary • Change is rarely embraced• Where is it already happening
