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Topics of Interest - Unit Based Pricing
Unit Based Pricing: A Short Course
UBP: What is it?
Unit based pricing (UBP) garbage collection is a simple concept: How much you pay depends on how much you throw away. The cost is based on units disposed rather than on a set fee charged to everyone or a system paid for through property taxes. Alternatively called "volume based," "variable rate" or "pay as you throw," the system treats garbage like any other utility - you pay for units used.
Units of garbage can be measured by the number of bags or cans used, by the size of container used or by weight. Weight is seldom used in residential programs because it would be costly to implement, but it is the basis for charging for disposal of industrial waste (i.e., tipping fees at landfills). Most residential systems utilize a bag or tag system.
Potential benefits of UBP systems include: reduction in waste being landfilled; increased recycling, composting, waste reduction activities; possible cost stabilization; and a more equitable system.
Potential costs of UBP include: increased illegal dumping and burning; revenue inadequacy and instability; possible increased costs; and public education costs.
Types of UBP Systems
UBP systems can be structured in a variety of ways, depending on what is best for your community. Following are short descriptions of various types of systems according to State of Iowa Implementation Guide for Unit-Based Pricing:
I. Pre-paid Bag
In this system, specially marked bags, usually in two sizes, are sold to customers through retail outlets or city offices. Only garbage in these "official" bags is collected. Often weight limits are also set on the bags. Examples of this system in the South Central Iowa Solid Waste Agency Area (SCISWA) can be found in the cities of Brooklyn, Deep River, Malcom, Montezuma and Searsboro in Poweshiek County.
In these towns, the residents are charged a basic monthly fee of $6.65 to $7.50 which covers weekly curb-side recycling services. Residents then pay $1.00 or $1.50 per bag (depending on the size). Bags are sold through local convenience and grocery stores and city offices. These cities contract with a single hauler who also collects the recyclables. Other cities may have several haulers.
Advantages:
- easy to understand
- lower cost to implement (distribution, storage and inventory of bags)
- can provide more flexible increments of waste disposal units (smaller bags, lower cost)
- clean, fast collection
- pre-paid
Disadvantages:
- must set up distribution system (retail outlets, city offices)
- uncertain revenues
- potential extra staff time for cities if bags are sold at city offices
- animals may get into bags
- must place weight restrictions on bags to prevent over-stuffing
II. Pre-paid Tag or Sticker
Like the pre-paid bags, pre-paid tags or stickers are purchased by customers at city offices or retailer outlets. Only containers and bags with the official sticker/tag affixed will be picked up by haulers.
Advantages:
- flexible size increments
- pre-paid
- easy to understand
- easier and less costly to implement than subscription systems
- cost of stickers/tags is less than bags
- can use for disposal of bulky items or white goods
Disadvantages
- revenue uncertainty
- enforcement of size limitations difficult
- not always easy for hauler to see
- tags/stickers may not always adhere to bag
- tags or stickers could be removed by vandals/thieves
III. Subscription System
Under this system residents sign up for the amount of service they want - either a certain number of bags/containers in a week or month or different sizes of containers. In the SCISWA area, Russell and Chariton in Lucas County have these systems. In Chariton, haulers provide three different sizes of totes at three rates ($11, $13, $15 per month). Any extra garbage is subject to additional charges by the haulers. Russell's system allows residents to have garbage picked up once a week, twice a month or once a month. There is a limit on how much can be discarded. The city contracts with a hauler who reports back monthly to the city the residences and type of service, plus the tonnage disposed.
Advantages:
- revenues are stable and easy to forecast
- in some systems, may not need new cans
- containers can be labeled to help with enforcement
- animal-safe containers
- not adding plastic to the landfill
Disadvantages:
- higher implementation costs with new containers
- less incentive to reduce waste because of size of container (might as well fill it up)
- complex billing system
- more difficult for haulers to keep records on the route
IV. Weight Based System
Weight based systems are very rare for residential programs because of the cost of necessary equipment to weigh and record data for each household. Most weight based systems are currently pilot projects.
Advantages:
- More precise measurement of waste. Better recycling incentive
- fair and easy to understand
Disadvantages
- requires high tech, expensive equipment
- more complicated billing system
V. Hybrid Systems
Hybrid systems offer a basic service for a flat fee and charge for extra service. For example a community may allow residents to set out 1 or 2 bags of garbage as part of their basic fee. For any more bags than that, special tags, stickers or bags must be purchased. This is the most popular kind of UBP system in Iowa.
Advantages:
- easier transition for communities to UBP
- more stable revenues
- can be implemented quickly and inexpensively
- doesn't lock in this system; can change to other system at a later date
- no new billing system needed
Disadvantages:
- no incentive to reduce waste at lowest service level
- harder for residents to understand why they must pay 2 fees
This is a quick explanation of Unit Based Pricing systems. For more information, see the list of references.
Implementing Unit Based Pricing
It is important to remember that implementing Unit Base Pricing (UBP) will not happen over night. To find the system that best fits the needs of the community, some study and input from waste haulers and the public will be needed.
The first step to implementing a plan should be to set up a committee made up of city council members, waste haulers and interested citizens. This committee should gather information, through public meetings and available resources to come up with recommendations. There are resources to help you including staff at the DNR, SCISWA and our consultants at Foth and Van Dyke. It is also helpful to talk to other cities that have already implemented UBP to get their input. Some of these resources are listed in the Resource section of this guide.
However you decide to do UBP, there are several things you will need to consider. To be effective, most cities (if not all) with UBP require garbage pick-up for every residence and business within city limits. Also, many communities enact burn bans. Mechanisms for enforcement should also be considered.
Access to recycling, though not technically required under the provisions of the law mandating UBP for our cities, is needed to give residents a place to get rid of their recyclables, so they don't have to dispose of them in the garbage.
Education, not only on the new system, but also on waste reduction, is vital as part of implementing UBP.
Resources
Other cities that have implemented UBP:
- Marshalltown (private haulers, subscription) City Manager Ed Geick, 641-754-5799
- Belmond (private haulers, bag system) City Manager Wayne Pals, 515-444-3386
- Brooklyn (contract hauler, bag system) Mayor Jim Rinehart, 641-522-7066
- Russell (contract hauler, subscription) 641-535-6281
- Chariton (private haulers, subscription) 641-774-5991
- Carroll (they don't have UBP, but they divided up the city among the private haulers for waste collection. Each has his/her own zone.) City Manager Gerald Clausen, 712-792-1000
DNR Staff
Jane Mild
515-281-5105
jane.mild@dnr.state.ia.us
Wallace State Office Bldg.
502 East 9th St.
Des Moines, IA 50319-0034
SCISWA Staff
Sara Bixby, 641-828-8545, sbixby@sciswa.org
Director
Amber Alley, 641-828-8545, aalley@sciswa.org
Education and Outreach Specialist
1736 Hwy T-17
Tracy, IA 50256
Publications
EPA's Pay as You Throw Tool Kit
Pay-As-You-Throw Helpline - toll free: 1-888-372-7298 or www.epa.gov/payt to get specific information or to order publications
Contact the Iowa Department of Natural Resources at 515-281-IDNR for latest
