R.I. Needs to Raise Cost of Municipal Trash Disposal

By KEVIN PROFT/ecoRI News staff

The $32 a ton it costs Rhode Island municipalities to tip garbage into the Central Landfill in Johnston is artificially low. For each ton of municipal waste buried, the Rhode Island Resource Recovery Corporation (RIRRC) loses $11, according to a May 2014 draft of the Rhode Island Comprehensive Solid Waste Management Plan.

This low municipal tip fee reduces the economic incentive for cities and towns to invest in waste reduction, recycling and composting initiatives, and discourages recycling and composting businesses from opening in the state. As a result, the Central Landfill — expected to reach capacity in 2038 — fills faster than necessary.

Furthermore, RIRRC compensates for the low municipal tip fee by accepting more commercial waste than it would otherwise have to, increasing the rate at which the landfill fills. Disposing of trash after the landfill closes will be “exponentially more expensive,” according to RIRRC.

With these problems in mind, RIRRC is proposing to raise the municipal tip fee for the first time since 1992. The tip fee hasn’t increased in more than two decades largely because of resistance from the League of Cities and Towns, municipal leaders and the public, which fears an accompanying municipal tax increase, according to Michael McGonagle, RIRRC’s director of planning.

RIRRC calculates that a sustainable municipal tip fee is currently about $65 per ton. The quasi-government agency has requested that the tip fee be adjusted based on projected needs every two years, rather than requesting a new fixed-price tip fee, which could lose value over time as happened with the $32-per-ton fee.

The tip fee would be determined using a formula that assumes RIRRC will bury 750,000 tons of municipal and commercial trash annually, and considers the agency’s projected expenses and revenues. Audits would ensure the agency doesn’t overestimate costs or underestimate revenue. If the formula demonstrates the need for an increase in the tip fee, that new fee would be guaranteed for the following two fiscal years.

If the formula shows the current tip fee is equal to or greater than what RIRRC requires to operate, then the current tip fee would remain in place for the following two fiscal years. Any surplus would be set aside to defer future tip-fee increases or fund necessary capital investments.

“Municipalities don’t want to pay for Resource Recovery to get fat, or see their municipal tax dollars shipped down into the general fund,” McGonagle said. “That’s understandable.

“Resource Recovery just wants to be able to pay for the operations we are required to have in place. (This formula) allows us some guarantee that the municipal tip fee can sustain our level of loading.”

The public hearing about the new tip-fee formula could be held before the end of the year, according to Sarah Reeves, RIRRC’s director of recycling services. The meeting date will be posted on the secretary of state’s website and the RIRRC website.

After the hearing, RIRRC’s board of directors could adopt the new rule early next year, and the tip fee would be raised on July 1, 2017.

McGonagle predicted the proposed rule will be resisted by the same groups that have historically resisted fee increases. They will request that the increase be phased in incrementally, he said, but RIRRC believes it has given municipalities ample time to prepare for a change.

Statewide PAYT tabled
Initially, RIRRC proposed solving its funding problems by mandating a statewide pay-as-you-throw (PAYT) program. The proposed program would have generated enough revenue to eliminate the municipal tip fee.

PAYT programs charge individual households for trash disposal based on the volume of waste they generate. This is usually achieved by requiring households to dispose of their trash in designated bags, which are significantly more expensive than regular trash bags. The programs generate revenue for waste-management services through bag sales, and incentivize households to reduce, recycle and compost their waste.

After North Kingstown, Tiverton and Middletown implemented PAYT, they experienced, on average, a 36 percent reduction in trash. Municipalities with less comprehensive PAYT programs experienced a decrease of 15 percent, according to RIRRC.

RIRRC intended to request legislative approval for the statewide PAYT program. Despite being unsure whether such approval is required by its enabling statute, RIRRC determined gaining legislative approval would reduce municipal-level resistance, according to Reeves. The proposal received significant pushback from legislators and municipalities.

Reeves said some municipalities want PAYT and know that the difficulty lies at the town/city council level. Other municipalities, she said, want to decide locally how to manage the increase in the cost of waste disposal.

RIRRC’s board also resisted the statewide PAYT idea. Reeves said implementing a fee-based program for a service previously perceived as “free” requires “tremendous political will.” As the Central Landfill approaches capacity, Reeves said attitudes toward PAYT could change.

Because of the resistance to statewide PAYT, RIRRC reverted to focusing on raising the tip fee, a process that doesn’t require legislative approval.

If the new tip fee rule is adopted, it could result in municipalities moving toward a PAYT program voluntarily, to save costs by incentivizing residents to generate less landfill-bound waste, McGonagle said. RIRRC would provide technical support to municipalities interested in implementing a local PAYT program, he added.