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Pay-As-You-Throw and Solid Waste Finance

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  • 1. Pay-­‐As-­‐You-­‐Throw   and  Solid  Waste  Finance   Joshua  Kolling-­‐Perin   Cal  Cunningham     October  22,  2013  
  • 2. About  WasteZero   •  Founded  in  1991   •  Based  in  Raleigh,  NC,  with  regional  offices  throughout  the  country  (MA,  ME,   IL,  and  SC)   •  Focused  on  delivering  best-­‐in-­‐class  municipal  waste  reducNon  programs   (100%  customer  retenNon  rate  for  programs  we  design  and  manage)   •  Work  with  approximately  800  municipaliNes  and  countless  private  customers   across  41  states   •  Designed  to  share  in  our  partners’  success—   contracts  Ne  our  payment  to   waste  reducNon  targets   •  CerNfied  as  a  B  Corp—meets  rigorous   standards  of  social  and  environmental   performance   •  Supplies  made  in  US  from  recycled  content   Copyright  ©  2013  WasteZero   2  
  • 3. Pay-­‐as-­‐You-­‐Throw  in  North  Carolina   MunicipaliFes  with  some  form  of  pay-­‐as-­‐you-­‐throw  are  nothing  new   in  North  Carolina.   Copyright  ©  2013  WasteZero   3  
  • 4. Solid  Waste—The  Last  Unmetered  UFlity   Solid  waste  is  the  only  uFlity  residents  do  not  pay  for  per  unit.   Metered   Electricity   Unmetered   Gas   Water   Trash   The  fact  that  garbage  is  an  unmetered  u=lity  leads  to   avoidable  waste  of  financial  and  environmental  resources.   Copyright  ©  2013  WasteZero   4  
  • 5. The  PAYT  SoluFon—Overview   Current  Approach   Solid  waste  and  recycling   Residents  purchase  their   All  trash  bags  are  collected   fees  or  General  Fund  dollars   own  bags  (~$0.30  each)  for   curbside  or  at  drop-­‐off   curbside/can/cart  collecFons   centers   Recycling  is  opFonal,     but  not  incenFvized   With  Bag-­‐Based  Pay-­‐As-­‐You-­‐Throw   City  may  reduce  fees  or   reallocate  General  Fund   dollars  for  disposal/ collecFon   Only  pay-­‐as-­‐you-­‐throw   bags  are  collected   curbside  or  at  drop-­‐off   centers   Behavior  changes:   waste  is  reduced   and  recycling   increases   Convenient   Copyright  ©  2013  WasteZero   Residents  purchase   municipality-­‐specific  bags   at  local  retail  stores   (typically  $1-­‐$2/bag)   Easy   Effec/ve   5  
  • 6. The  Way  Things  Work  Now   1.  Flat  Fee   2.  Request   3.  Blank  Check   CITY  OF  ANYTOWN   PO  BOX  1234   ANYTOWN,  USA   Solid  Waste  $138.00   ANYTOWN,  USA   “Fill  ‘er  up!”   CITY  OF  ANYTOWN   PO  BOX  1234   ANYTOWN,  USA   An  unfair  approach  to  those  that  recycle   Copyright  ©  2013  WasteZero   6  
  • 7. The  Pay-­‐As-­‐You-­‐Throw  Model   1.  Cut  Fees/Costs   2.  Pay-­‐As-­‐You-­‐Throw   3.  IncenFvize   What’s  Right   CITY  OF  ANYTOWN   PO  BOX  1234   ANYTOWN,  USA   ANYTOWN,  USA   Solid  Waste  $138.00   CITY  OF  ANYTOWN   PO  BOX  1234   ANYTOWN,  USA   ANYTOWN,  USA   Usually  free   A  variable-­‐rate,  equitable  approach  that  incen=vizes  people  to  recycle   Copyright  ©  2013  WasteZero   7  
  • 8. The  Steps  MunicipaliFes  Need  to  Take   1 2 3 4 Understand  Base   Solid  Waste   Infrastructure  Costs   Design  Program  to  Meet   Municipal  Goals   Pass  Ordinance   Requiring  Disposal  in   Pay-­‐As-­‐You-­‐Throw  Bags   Use  ExisFng   Infrastructure   Copyright  ©  2013  WasteZero   8  
  • 9. Immediate  and  Long-­‐LasFng  Change     Worcester  MA  ResidenFal  MSW,  1986-­‐2008   Annual  PPC   Program  IniFaFon                                 Copyright  ©  2013  WasteZero   Source:  1986-­‐2003  -­‐  City  of  Worcester      2004-­‐2008  –  Mass.  DEP   9  
  • 10. Immediate  and  Long-­‐LasFng  Change   Long  Term  (Years  2-­‐10):   Within  90  days:   Trash  tonnage  drops  to  50%  of   naNonal  average  and  someNmes  even   lower.      Bills  for  Npping  fees  plummet.   Recycling  tonnage  ofen  doubles  or   even  triples.    Revenue  from   recycled  material  increases.   Copyright  ©  2013  WasteZero   •  •  Tonnage  can  be  reduced  by  up  to  60%1.   Tipping  fees  conNnue  to  decline  and   recycling  revenues  rise  accordingly.   •  Residents  become  increasingly  saNsfied.   1Assuming  municipality  has  no  managed  waste  reducNon  program  at  incepNon.       10  
  • 11. Success  Stories   DECATUR,  GA   480  lbs.   (46%  beker  than  naFonal)   WORCESTER,  MA   450  lbs.   (50%  beker  than  naFonal)   MALDEN,  MA   480  lbs.   DARTMOUTH,  MA   (46%  beker  than  naFonal)   TIVERTON,  RI   400  lbs.   (55%  beker  than  naFonal)   500  lbs.   (44%  beker  than  naFonal)   Copyright  ©  2013  WasteZero   11  
  • 12. Case  Study—Decatur,  GA   BACKGROUND   "   While  the  City  of  Decatur  already  offered  a  recycling  program,  to  meet     state  requirements  to  reduce  landfill  deposits,  in  1997  it  recognized  a     need  to  step  up  its  waste  management  efforts.   "   The  city  rolled  out  its  new  PAYT  system  to  residents  in  1998.   —  Mail  and  outreach —  Local  media    –      Public  hearings  and  neighborhood  meeNngs    –      Three  sizes  and  colors  of  WasteZero  customized  plasNc  trash  bags   "   Residents  citywide  purchase  WasteZero  Trash  Metering™  trash  bags  in  grocery  stores,   hardware  stores,  and  municipal  offices.     "   As  a  result,  the  city  saves  more  than  $150,000  annually  and  applies  that  savings  to  fund  local   recycling  events,  raise  awareness,  and  increase  recycling  rates  even  further.       DECATUR  RESULTS  WITH  WASTEZERO:    1998  TO  PRESENT   –  –  –  –  –  42%  reducNon  in  solid  waste  tonnage   79%  increase  in  amount  of  recycling  tonnage   33%  increase  in  compost  tonnage   100%  increase  in  recycling  rate  (from  10.7%  to  22%)   More  than  $150,000  saved  in  disposal  costs  in  their  first  year  and  each  year  since   Copyright  ©  2013  WasteZero   12  
  • 13. PAYT  in  a  Small  North  Carolina  Town   1,500  eligible  households   Program  Net  Financial  Impact   1  Year   5  Years   10  Years   Program  Net  Revenue1   $66K   $333K   $718K   Disposal  Savings   $15K   $111K   $304K   Incremental  Recycling  Revenue   TBD   TBD   TBD   OperaNonal  Cost  Savings   TBD   TBD   TBD   $81K   $444K   $1.0M   Program  Environmental  Impact   1  Year   5  Years   10  Years   Tons  of  Waste  Diverted  or  Reduced   325   2,250   5,800   Tons  of  AddiNonal  Recycling   130   900   2,300   Total  Program  Net  Impact   1Net  of  program  services  and  supplies   Copyright  ©  2013  WasteZero   13  
  • 14. PAYT  in  a  Mid-­‐Size  North  Carolina  City   20,000  eligible  households   Program  Net  Financial  Impact   1  Year   5  Years   10  Years   Program  Net  Revenue1   $1.2M   $5.9M   $11.6M   Disposal  Savings   $219K   $1.6M   $4.1M   Incremental  Recycling  Revenue   TBD   TBD   TBD   OperaNonal  Cost  Savings   TBD   TBD   TBD   Total  Program  Net  Impact   $1.5M   $7.5M   $15.7M   Program  Environmental  Impact   1  Year   5  Years   10  Years   Tons  of  Waste  Diverted  or  Reduced   4,500   31,000   75,000   Tons  of  AddiNonal  Recycling   1,800   12,500   30,000   Metric  Tons  of  CO2  Reduced   8,500   59,000   141,000   Millions  of  BTUs  Conserved   71,500   494,000   1,200,000   1Net  of  program  services  and  supplies   Copyright  ©  2013  WasteZero   14  
  • 15. PAYT  in  a  Large  North  Carolina  City   100,000  eligible  households   Program  Benefits  and  Savings   1  Year   5  Years   10  Years   Program  Net  Revenue1   Disposal  Savings   Incremental  Recycling  Revenue   OperaNonal  Cost  Savings   Total  Program  Net  Impact   $11M   $750K   $250K   TBD   $12M   $55M   $5M   $2M   TBD   $62M   $114M   $13M   $5M   TBD   $132M   Tons  of  Waste  Diverted  or  Reduced   Tons  of  AddiFonal  Recycling   20,000   8,600   125,000   56,000   300,000   135,000   Average  Annual  Environmental  Impact   Incremental  tons     Natural  Resources  Diverted   13,500   of  recycling/year   Greenhouse  Gas  Emissions  Reduced   50,950     Metric  tons  of  CO2  equivalent/year   Energy  Saved   Landfill  Life  Expectancy  Increase   478,500   Million  BTUs/year   TBD   Incremental  years   1Net  of  program  services  and  supplies   Copyright  ©  2013  WasteZero   15  
  • 16. Best  PracFces  for  ImplementaFon   The  most  successful  pay-­‐as-­‐you-­‐throw  programs  are  those  that  are  implemented  with  the   understanding  that  the  municipality  is  conducFng  smart  change  management.   Resident   Engagement   •  ProacNve  outreach   •  EducaNon  campaigns   ImplementaFon   •  DedicaNng  effort  to  the  few   weeks  before  and  immediately   afer  program  commencement   Sound   Program  Design   •  Based  on  current  and  desired   infrastructure  and  technology   •  Easy  to  understand  and  adopt   Appropriate   Pricing  Model   •  Understanding  starNng  point   Ø  General  Fund,  Enterprise  Fund   or  blend?   Ø  Visible  or  hidden  fee?     •  True  costs  vs.  required  revenues   •  ResidenNal  impact   PosiFve   Feedback  Loop   •  Media  and  community   outreach  at  milestone  points,   heralding  success  of  program   In  the  aggregate,  planning  thoughHully  for   pay-­‐as-­‐you-­‐throw  is  itself  a  best  management  prac=ce.   Copyright  ©  2013  WasteZero   16  
  • 17. Ques=ons  &  Conversa=on   Copyright  ©  2013  WasteZero   17