SUMMARY MINUTES OF A WORK SESSION ON “PAY-AS-YOU-THROW”

BY THE CHAPEL HILL TOWN COUNCIL

MONDAY, APRIL 12, 1999 AT 5:30 P.M.

Mayor Rosemary Waldorf called the meeting to order at 5:30 p.m.

Council Members present were Flicka Bateman, Joyce Brown, Joe Capowski, Pat Evans, Kevin Foy, Lee Pavão and Edith Wiggins. Council Member Julie McClintock was absent, excused. Staff members present were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Town Attorney Ralph Karpinos, Public Works Director Bruce Heflin, Administrative Analyst Randy Ballard, Sanitation Superintendent Harv Howard, Assistant to the Manager Ruffin Hall, and Town Clerk Joyce Smith.

Bruce Heflin, Public Works Director, discussed the report and resolution for the Council to consider regarding the “pay-as-you-throw” (PAYT) refuse collection program. He said that the first decision to be made was whether or not the Town would have such a program. Mr. Heflin said that the report suggested a sequential listing of the decision points for the Council’s consideration of the design and implementation of the program and the list of some of the key issues.

Mayor pro tem Capowski asked Mr. Heflin how commercial people were charged for dumpsters. Mr. Heflin said that there were two classes of commercial customers: (1) compactor users who already were “pay-as-you-throw,” and (2) the majority, dumpster users, including multi-family units, who were not charged for the two collections per week.

Mayor pro tem Capowski asked, referring to page 8 of the report, what the cost of each bag of trash per month was, and if the charges could be handled like the charges for utility companies. Mr. Heflin said that each bag of trash costs $.57 per bag, and he would get back to the Council after he had done the arithmetic per month per household. He said that based on the current collection cycle the cost for each household was $9.00. Mr. Helfin said that one way to do it would be to set a flat fee of about $9.85 per month, which would cover the fixed costs, which were the same whether a house had one bag or ten bags of garbage.

Council Member Evans questioned the “Staff Comment” on page 4, which said, “We believe that the existing recycling programs could not accommodate the quantity of material we would hope to divert from landfill disposal by way of a PAYT program without significant increases in collection contract.” She questioned why the Council was talking about the program. Mr. Heflin said that Chapel Hill’s ability to reduce and divert waste was way ahead of the national average, but that there was a significant portion of the waste stream that could still be recycled and that a fair amount of material could be recycled with the expansion of the program. He said that a lot of people were not recycling mixed paper. Mr. Heflin added that the more successful the program the more strain it would put on the recycling collection program.

Council Member Evans said that therefore the cost of recycling per household would increase. Mr. Heflin agreed.

Mayor Waldorf said that it all would cost one way or another.

Council Member Brown asked how different the program would look with different goals. Mr. Heflin responded that the difference would be in how the program was charged and how the fees were set to cover the program. He said that costs could be charged for revenue production or reducing waste—each would lend itself to a different structure. Mr. Heflin said that the other difference would be how the bottom line looked at the end of the year. He said that when a program was trying to conserve and also generate revenue, it ran the risk of succeeding and lowering the units upon which it had to spread out the fixed costs. Mr. Heflin said that the more successful the program was in diverting, the fewer units it would have to spread those costs over, and then it would run the risk of not generating enough revenue to cover the costs.

Council Member Brown asked how payment would be made for the total program, and if they had considered having a dual payment system—part from taxes and part from the “pay-as-you-throw” charges. Mr. Heflin said that there were a number of ways to structure the fees, the dual payment system or a fee for service, which would cover all costs, or a set fee for all households, where a monthly or annual charge would cover the fixed costs and then the marginal costs could be paid an assessed charge through a “pay-as-you-throw” program.

Council Member Wiggins asked if the Town had a commercial recycling program, and if so, how effective it was. Mr. Heflin said that there were some programs which were funded by the private sector and some by the Orange County recycling program. He said that cardboard and some glass collection were examples of the private sector. Mr. Heflin said that it was an important component of the solid waste management program to expand commercial waste recycling.

Mayor Waldorf said that she did not see anything in the report that would address commercial waste. Mr. Heflin said that it was difficult to design a dumpster for a “pay-as-you-throw” program, especially if there were a number of users of the dumpster.

Council Member Pavão asked Mr. Heflin how long it would take the Town to prepare for such a program. Mr. Heflin responded that probably the biggest variable would be if the Council made any other changes to the collection system. He said that if it stayed with the two collections per week it could probably be done in a year’s lead time, but if the collection methods were changed it would take longer.

Council Member Evans asked if the Town could add more compactors, since they were “pay-as-you-throw.” Mr. Heflin said that the Town could add more compactors, and the Town does use some private compactors, for which it paid a tipping fee. He said that compactors cost $30,000 plus about $20,000 per year.

Mayor pro tem Capowski asked how much the average cost was for the Town to collect one dumpster’s worth of trash and take it to the landfill—what was the unit cost. Mr. Heflin said about $13.00.

Mayor pro tem Capowski asked Mr. Heflin if he could figure out what one dumpster’s worth of trash costs for the owner. Mr. Heflin said that he would. He added that there were a couple of issues that the Council might want to think about if it did adopt the program, and that was to have the cost spread out over the multiple users of a dumpster, which might be an effective tool to get users to modify their behavior.

Mayor Waldorf asked if there was a dumpster at a large complex, how it would be determined who paid.

Mayor pro tem Capowski said that someone had to be responsible for the dumpster—the manager of the complex or the homeowner’s association.

Council Member Brown asked Mr. Heflin to be more explicit when he was talking about bags—were the bags something that were bought. Mr. Heflin said that in a residential situation he would suggest that bags or tags would be easiest to administer and the most effective way to meet the goals.

Council Member Brown asked if that would apply to commercial and multi-family as well. Mr. Heflin said that the problem with the dumpster was that it was impractical to search through the whole dumpster, and he did not think it could be done and have the kind of compliance to make the system work. He felt it would be better to charge on a per collection basis.

Council Member Brown asked if the bag could be identified. Mr. Horton said that once it was put inside the dumpster it would be impractical to make that determination, and it would also be unsafe. He said that the whole dumpster would have to be dumped out onto the ground to search through it.

Council Member Brown asked could it be identified if it were a special kind of bag. Mr. Horton said that it would be covered up by other bags and the same thing would be true for tags.

Council Member Wiggins said that she had a follow-up comment about Village West, where she had lived. She said that it was a multi-family complex and there was also a very large area for recycling newspaper and glass, and that it was heavily used. She felt that if people were provided with the opportunity to recycle, they would do it. Mr. Heflin said that many multi-family complexes had been contacted and that there was participation.

Council Member Foy asked Mr. Heflin if he thought the Town was going to be able to couple the implementation of the proposed plan with a specific link that the taxpayers could see as a tax decrease. Mr. Heflin said that it would be reasonable to assume that all costs would be covered if the Town had a system where all disposal costs were charged and that the majority of the costs would be covered if the program was administered properly and enforced.

Council Member Foy said that the Town needed to make people know that the savings for reducing waste disposal would be coming out of the Town budget and would be reducing their taxes. Mr. Horton said that the Town would probably want to be conservative in the first year and have a little experience before the program was budgeted.

Council Member Brown felt it was important to the success of the program that the taxpayers know that the Town was not adding on a cost, but would be reducing taxes by a certain amount. Mr. Heflin said that some communities break out the sanitation portion of the tax bill and turn it into a charge, and then the savings of “pay-as-you-throw” was more easily apparent to the user.

Council Member Pavão asked where the Town would get the revenue to offset the loss of revenue from “pay-as-you-throw.” Mr. Heflin said that would depend on what was included in the “pay-as-you-throw” charge.

Council Member Foy said that it was his recollection that the Town would not attempt to fund everything through the program, but would only attempt to fund the cost of the disposal portion, and that they would not be paying a tipping fee, so that would still be saving.

Council Member Pavão said that his concern was how to explain this to the taxpayer, and that it seemed very complicated.

Council Member Bateman said that the Council might say that the Town’s cost would go down and that paying for fees would not be there because people would now be buying bags, then if it were successful, the Town would have to build more Material Recovery Facilities (MRF) and then the County would say that we have to now charge people for this and so there would be an increase in people’s taxes.

Council Member Brown said that she thought that in the figures that the Council had received from the discussions that all the costs had been figured in. Mr. Horton said that the costs, taking that into account, were anticipated to increase substantially. He said he believed that the Town would have to have an availability fee as well as some sort of general tax support.

Council Member Brown said that those were some of the things that had gone into the equation, and the information that Council already had.

Council Member Foy said that if the volume got up high enough for the MRFs it could be self-sustaining and thought, in the long run, the way to look at it was that the Town couldn’t afford to build a new landfill, as it would be so expensive. He felt that this would be a way to control costs.

Council Member Evans felt that in a community in which a high percentage of people rent, property owners would not reduce rental costs.

Mayor pro tem Capowski said that was why he kept going back to the utility model, which worked through the point of view of the customer and solved all the problems of the end user. He felt that the user was not going to care what the costs were, but only what a bag of garbage was going to cost.

Council Member Bateman asked the Council what it would think of putting the issue on the ballot in November to have a simple “yes” or “no” vote.

Mayor Waldorf felt that this would require a lot of public education, and asked the Town Attorney whether a ballot on this question was legal. Mr. Karpinos said that the Town could have a referendum on a tax, but not on a question.

Council Member Brown asked if the communities who do have “pay-as-you-throw” had a ballot to determine public opinion. She asked how the process worked. Mr. Horton said that in most cases the municipalities just made the decision.

Council Member Wiggins asked if the Town would have a “pay-as-you-throw” program before a MRF, or if it would be the other way around. Mr. Heflin said he believed that there should be a number of options available to the residents before the Town went to “pay-as-you-throw” and that that would argue for a MRF first.

Council Member Foy suggested that the Council try to develop a process that could move in the direction of implementing this program, but he did not think that the Town should just do it. He felt that the Town should get citizens involved and decide incrementally where it was headed. Council Member Foy said that he felt there had to be a manner for handling recyclables, but he was not sure at what point the Town was going to get a commitment from the County that it thought it needed to build a MRF or use a MRF elsewhere.

Council Member Pavão asked if there were any statistics about communities who had gone to “pay-as-you-throw” and then cancelled it. Mr. Heflin said that the program had been very successful in the Northeast, where there were very high tipping fees and the practice of paying for garbage collection was long-standing. He said that it had been easier for those communities with an economic incentive for the people, and it was practiced throughout the country, but less in the Southeast.

Council Member Pavão asked if there was information available to check the success stories. Mr. Heflin said that there was.

Council Member Brown said that a professor from Duke University had a lot of information and would make it available to the Council.

Council Member Bateman felt that there ought to be a community buy-in and not just have the government decide. She said that she felt the Town should hear from the Commissioners about their planning. Council Member Bateman said that the Council could start off with a citizens group interested in this problem and get their input and ideas on ways to educate the community, getting feedback from the community with the goal of settling this issue once and for all.

Council Member Brown said that the Town has had a citizens group, which came up with a report called “Toward Zero Garbage” about six or eight years ago, and that one of the conclusions was that “pay-as-you-throw” was the main means of waste reduction. She said that there also had been a citizens group that was part of the consultant’s group that developed the solid waste management implementation plan—a citizens group, a technical group, and a $200,000 consultant, who worked with the Landfill Owners’ Group. Council Member Brown said that “pay-as-you-throw was one of the central parts of the integrated solid waste management plan, one of the five areas of waste prevention. She said she would hate for the Council to begin again. She felt that citizen education was important to making it a success. Council Member Brown said that she would like the Council to build on what had already been done and to go forward from there.

Council Member Bateman suggested having a citizens group which would be the first phase to begin to implement this—to take the pulse of the community.

Council Member Pavão suggested that perhaps it was time to invite all those people on these former committees, who had said that “pay-as-you-throw” was the way to go, to come up with a decision as to whether to go forward with it or not. He suggested having those people take the issue out to the community, since they had already done this work and were familiar with “pay-as-you-throw.”

Council Member Wiggins liked the idea of getting citizen opinion, but felt that “pay-as-you-throw” was not the only issue to get citizens’ opinion on. She would like to expand it to put in motion a process where the Council could get citizens’ opinions on waste reduction, collection and disposal, and backyard versus curbside collection—all of which were a part of the same program.

Council Member Evans felt that the Council should let the issue go to the County and see what direction the County would be going in, because a lot of things had changed in the eight years since the citizens group studies. She said that she felt the Council might then have some indication as to which direction the Town wanted to move. Council Member Evans said that there was a need to educate the residential people to recycle such things as cardboard and mixed paper. She said that she did not think “pay-as-you-throw” was a very fair system because it was a burden on people who rent. Council Member Evans said that she felt it was just an additional cost of disposing of their garbage. She said that the Town would need extra employees to handle the billing. Council Member Evans said she was opposed to moving ahead with “pay-as-you-throw” for the present, and felt that the Council should make one change at one time—one that all could agree on.

Mayor Waldorf said that the County was going to have to work with the Town soon to make a decision to have either a combination of an increase in the County property tax to cover solid waste costs and an availability fee—one or the other, or a combination of both. She said that they were going to have to work with the Town to impose an urban area recycling district tax or fee to pay for recycling costs in the future. Mayor Waldorf was uncertain about all of these changes coming at once.

Council Member Wiggins asked Council Member Foy where they could go next. Council Member Foy said that the financial impact was, on the whole, beneficial to the community, and the next step was to take this proposal to the community, with the underlying assumption that the studies had already been made. He said that the Town should say how it would be implemented, what the pros and cons were, and the reasons why it might not be equitable. Council Member Foy felt that the newspapers could keep the issue in front of the public eye and then allow it time to evolve, so that the community could come to some kind of consensus. He said that he felt the community should be involved.

Council Member Brown asked the staff if the Town did not implement the “pay-as-you-throw” program, would the Town need to build a MRF. Mr. Horton said that if the Town continued to proceed with the usual methods of recycling that it could continue without a MRF, but that any substantial recycling effort would require a MRF. He said that the measures of reduction were a “pick and choose” method and that not all the suggestions that were in the plan would have to be implemented.

Council Member Evans pointed out that only one-third of the waste reduction was in the residential community—that the Town should concentrate on the two-thirds in the multi-family complexes and the business community. Mr. Heflin said that the plan envisioned an aggressive commercial recycling program, in addition to the expansions of the residential program.

Mayor pro tem Capowski said that if every pound of stuff that was not thrown out was recycled, and if people knew what the value of the stuff thrown out was, would they throw out less. Mr. Heflin said that this was one of the big debates in the industry. He said that in some communities there was some evidence that “pay-as-you-throw” actually caused waste to shrink, other communities showed evidence that it was just transferred to the recycling center. Mr. Heflin said that he hoped that the waste going to the landfill would be reduced as much as what was going to recycling, if not more.

Mayor pro tem Capowski felt that “pay-as-you-throw” was the only way that people were going to understand the value of garbage.

COUNCIL MEMBER FOY MOVED TO SELECT A WORKING GROUP COMPRISED OF CITIZENS, HOMEOWNERS, RENTERS, BUSINESS OWNERS, MANAGERS OF MULTI-FAMILY UNITS, NEIGHBORHOOD ORGANIZATIONS, SOMEONE WITH EXPERIENCE IN THE MANAGEMENT OF UTILITIES, COUNCIL REPRESENTATIVE(S), AND STAFF TO DEVELOP AN IMPLEMENTATION PLAN THAT FOCUSED ON COMMUNITY IMPUT AND EDUCATION, TO WORK WITH RESIDENTIAL AND COMMERCIAL PROBLEMS.

The Council decided not to vote, but to await a staff report.

Mayor pro tem Capowski stated that he wanted the citizens group to make the decisions not connected to the type of collection, i.e. curbside versus backyard. He wanted this to be a separate issue.

Council Member Evans stated that she thought this was premature.

The meeting adjourned at 6:52 p.m.

The minutes of April 12, 1999 were adopted on the 24^th day of May, 1999.

__________________________________________

Joyce A. Smith, CMC

Town Clerk