What is a PAYT Program?

Section I

Pay-as-you-Throw (PAYT) - A type of solid waste system sometimes called variable rate pricing or unit pricing, which provides a unique and equitable approach to financing the costs of solid waste management programs. With PAYT, the costs of solid waste management are borne directly by the generators based on the amount of waste (volume or weight) disposed. Most solid waste management systems finance programs either through fixed annual fees or from a portion of property or other local taxes. This approach results in a separation of fees and service and often leads to the perception that solid waste management is a free service.

Collection Method – The manner in which accumulated solid waste is removed from the generating source.

• Curbside – Collection of solid waste from containers placed adjacent to a thoroughfare.
  
 
• Drop-off – Consists of designated sites where residents may transport and deposit ("drop-off") their solid waste.

• Volume-Based – In this system, residents are charged for waste collection based on the number or size of waste containers that they use.  These systems can either by curbside or drop-off and generally use bags, cans or stickers/tags to charge for waste disposal.
  

• Weight-Based – These systems require the collector to weigh the garbage at the curb or drop-off center and then charge the generator by the pound collected.

• Fully Variable Pricing - A system in which all or most of the program costs are recovered through the unit fees (volume/weight) paid by system users.

 
• Hybrid System – A type of PAYT system that maintains some but not all the attributes of a true PAYT program.  There are typically two types of this system: 

 
• Incentive-Based System - Users are required to pay for material disposed; however, if the generator of the waste chooses to recycle, free or discounted disposal may be received for a set amount of material.

 
• Penalty-Based System - Users are charged to dispose of waste only if recyclables are found in the waste.

 
• Limited Base Service - In this system, customers pay a set amount per month or year for a basic level of service, such as one 32-gallon container picked up weekly.  Any additional service, such as overflow materials, requires additional payment usually in the form of additional stickers and bags.

 
• Two-Tiered Pricing - A system in which multiple fees are charged for solid waste management services.  The first fee is set to cover the fixed costs of the system such as staffing, capital purchases and general operation.  The fixed fee can be recovered through the tax base, utility bills, etc.  The second fee (unit fee) is set to cover the variable costs of the system such as disposal and possibly hauling or collection.This type of pricing system can be compared to a phone bill, in which the fixed fee would be the amount charged for basic monthly service and the unit fee would be the additional varying charges for long distance phone calls (i.e. bags, cans, or stickers utilized by each individual).

Disposal Diversion Ordinance (DDO) - any ordinance or law that prohibits or penalizes the disposal of a particular material.  For example, many North Carolina communities have disposal diversion ordinances for cardboard that prohibit or impose penalties for the disposal of cardboard in landfills.

Diversion Rate - A measure of the amount of waste material being diverted for recycling/composting compared to the total amount that was previously thrown away.

Enterprise Fund - A form of accounting that utilizes a separate fund or cost center for a specific purpose.  Enterprise funds are generally sustained by revenues generated within that program.  

Full-Cost Accounting (FCA) - Full-cost accounting or full-cost analysis determines the full cost of providing solid waste and recycling services by recognizing all direct and indirect upfront costs, operating and back-end cost.  Local governments in North Carolina are required annually to inform residents of the full costs of local solid waste management.

Material Recovery Facility (MRF)- A term commonly used for a facility that separates mixed glass and metal containers, paper and plastics and processes those materials for sale to end users.Also called an intermediate processing center or materials recycling facility.

Municipal Solid Waste (MSW) - The definition of MSW often varies from state to state:

• North Carolina MSW - Any solid waste resulting from the operation of residential, commercial, industrial, governmental or institutional establishments that would normally be collected, processed, and disposed of through a public or private solid waste management service.  Municipal solid waste does not include hazardous waste, sludge, industrial waste managed in a solid waste management facility owned and operated by the generator of the waste, or solid waste from mining or agricultural operations. 

Participation - The number or percentage of individuals or establishments that utilize a program on a regular basis.  For curbside recycling programs, participation is usually defined as the number of households that place bins/bags at the curb over the course of one to two months.

Regressive Tax - A tax that is assessed equally upon all residents regardless of income. In most instances, traditional taxes are based on income levels or property values, taking into account economic differences among individuals. PAYT is sometimes called a regressive tax due to the flat fee per unit for all residents.  This assessment of PAYT ignores the fact that this type of program allows individuals to control their disposal costs through changes in consumption habits and by maximizing waste reduction efforts. Additionally, some communities with PAYT choose to subsidize the cost of solid waste management for low-income residents. 

Reuse - Reuse targets items that are in adequate condition or of value such that they do not warrant disposal.  Reuse programs include paint exchanges, pallet exchanges and swap shops.

Solid Waste Management Hierarchy - Defined by North Carolina Statute, the solid waste management hierarchy prioritizes the option for solid waste management from most to least desirable: source reduction, recycling and reuse, composting, incineration with energy recovery, incineration without energy recovery, and finally landfill disposal. 

Source Reduction - Avoiding the creation of waste by reducing the amount or toxicity of waste before it is generated, i.e.. duplex copying and/or printing or other similar action that avoids the generation of solid waste.  Source reduction is not recycling. 

Subscription System - Generally limited to curbside collection, a subscription system requires that residents or businesses subscribe to one of varying levels of service (similar to subscribing to cable TV). The level of service is usually defined by the number and/or size of containers.