Changing the Payment Model: Pay-as-You-Throw and Financial Efficiency

Changing the Payment Model:Pay-as-You-Throw and Financial Efficiency

Mark Dancy

Sept. 10, 2015

Copyright © 2015 WasteZero2

An Outdated Payment Model

The key to effective waste diversion is in moving away from the flawed flat-fee or no-fee payment model.

Nearly all of the problems associated with trash stem from the fact that it is not priced effectively.

Waste disposal has changed… …but the paymentmodel has not.


Lack of Utility Pricing

Request2Flat Fee or No Fee1

Solid Waste $25.00

CITY OF ANYTOWNANYTOWN, USAPO BOX 1234

CITY OF ANYTOWNANYTOWN, USAPO BOX 1234

ANYTOWN, USA

Blank Check3

The flat-fee or no-fee payment model creates inefficiencies,wasting financial, operational, and environmental resources.

Electricity Gas Water

Residents pay for most utilities based on how much they use. Trash is different: In most places, trash is the last unmetered utility.


The Solution: Pay-As-You-Throw

PAYT realigns the solid waste payment model to allow people to pay for trash based on how much they generate. This creates strong economic incentives to reduce waste, saving money and resources for residents and municipalities.

Benefits of Changing the Solid Waste Payment Model:

Solid waste is reduced

Recycling increases

Collection and disposal costs drop

The environment is improved

Landfill life is extended


Cash Residents pay a set fee in cash for each bag they dispose of at a convenience or transfer station.

Variable-Rate Carts Residents choose from among different sizes of carts, paying more for the larger carts and less for the smaller ones.

OverflowResidents pay a flat fee that covers everything they can fit into a certain size cart, and then pay extra (usually by the bag) to dispose of anything that does not fit into that cart.

Stickers/Tags Residents pay by the bag by affixing a pre-paid tag or sticker to each bag of trash.

Bags Residents dispose of their waste in specialized bags approved by the municipality and clearly marked with the municipal seal or other unique instructions or information.

Types of PAYT

PAYT programs can take many different forms:

In WasteZero’s experience, bag-based pay-as-you-throw systems are the most effective.


The Bag-Based PAYT Model

• Fairest to residents• Easiest to implement• Most effective

Pay per Bag for Trash Less MSW,More Recycling

Cut Fees(when possible)

Bag-based PAYT is the most effective available means of reducing municipal solid waste.

1 2 3

• No direct cost to municipalities• Works with any collection method, automated or manual


The Most Effective Intervention

1970s—Before the Recycling Revolution

National Average,After 40 Years of

Recycling Education

Average in Cities WithWasteZero

Trash Metering

0

250

500

750

1000

1250

1,100 lbs.

900 lbs.

440 lbs.

Annual Pounds per Capita of US Household Solid Waste Disposed

40 Years

3 Months


Pay-as-You-Throw Results: MSW Reduction

WATERVILLE, MAINE54% DECLINE IN MSW IN 1 YEAR

MALDEN, MASS.52% DECLINE IN MSW OVER 5 YEARS

SANFORD, MAINE41% DECLINE IN MSW IN 3 MONTHS

WORCESTER, MASS.55% DECLINE IN MSW OVER 21 YEARS


Pay-as-You-Throw Results: Financial Impact

Program Revenue:$46.8 Million

Operational Savings: $26.3 Million

Disposal Savings: $21.4 Millio

n

Net Financial Impact:

$94.5 Million Total

Average $4.5Million per Year


Compatibility

Automated Trash Collection Single-Stream Recycling Household Organics Collection

Bag-based pay-as-you-throw programs work well across the range of existing collection models.

… as well as with any other form of existing programs municipalities consider successful.


Thank You!

Mark Dancy

President, WasteZero

[email protected]

843-655-6674

www.wastezero.com

Government & Nonprofit

Changing the Payment Model: Pay-as-You-Throw and Financial Efficiency