IN CITIES LARGE AND SMALL, whether residents put one bottle in their recycling bin or 50, the recycling contractor is paid the same amount. Most municipalities pay for recycling on a per-household system, relying on public outreach to increase the amount of materials collected. But Decatur, Ga., is paying its recycling contractor on a per-ton versus a per-household basis to create a financial incentive to increase collections.
Decatur, a city of 18,000 people located east of Atlanta, implemented a curbside recycling program in 1988 and reached a diversion rate of approximately 25 percent by the late 1990s. Then, in 1998, Decatur began a pay-as-you-throw (PAYT) refuse program, which has provided citizens with a financial incentive to recycle. Since the PAYT refuse program began, the amount of waste landfilled annually has dropped from more than 11,700 tons to 10,850 tons in fiscal year 2001. Before the per-ton payment system, College Park, Ga.-based Dreamsan, the city's recycling contractor, had been collecting approximately 140 tons per month of recyclables from 6,000 single-family households.
Still, a booming '90s economy meant too much waste was going into the landfill, city officials said. As the city looked for ways to boost recycling, Charles Hammonds, the city's sanitation and facilities maintenance director, considered the possibility of switching to a per-ton payment system. He had studied privatization in graduate school, remembering the principle that any management entity should align financial rewards with desired outcomes. Yet he and his staff could find no other program in the nation that had a per-ton payment system fore recycling.
The city solicited pay-per-ton recycling proposals and received 19 bids ranging from $103 to $180 per ton. Dreamsan, the city's previous contractor, won with the lowest bid. When calculated on a per-tons-collected basis, the city previously had been paying Dreamsan approximately $143 per ton.
The new contract became effective in July 2002 and has increased the average number of recyclables collected from 140 tons per month to 200 tons per month at its peak, Hammonds says. The amount of recyclables collected has averaged around 185 tons per month, which is a 30 percent increase.
“It makes sense because human beings tend to work by incentives,” Hammonds says. “If it is in our own best interests to do it, we'll do it. If not, we find something else to do. From a human behavior standpoint, it may be workable for other cities.”
Dreamsan has worked to broaden its collection base to include apartment buildings and schools, and it is continuing to search for new customers. The company collects aluminum food and beverage cans, glass bottles and jars, plastics No. 1 and No. 2, newspapers, mixed paper, chipboard, and corrugated cardboard.
Lee Judge, project manager for Dreamsan, says that a per-ton payment system would not work as well in a city where residents do not also have a financial incentive to recycle. “With the pay-as-you-throw program, there is a constant incentive for residents to recycle, which allows us to realize a constant stream of recyclables,” he says. “Responsibility falls on both sides. There has to be an incentive for both the hauler and the citizens. Decatur has done an excellent job getting the residents involved.”
Judge adds that the company has to strike a balance between collecting more recyclables and ensuring that a new recycling source is economically and logistically feasible. “Often, locations are difficult to collect from,” he says. “If specialized trucks or containers are required for collection, you may find that getting those commodities might not be cost efficient.” But the city has been supportive in these situations, he adds.
Another downside of a per-ton payment system, Hammonds says, is the incentive to cheat. “We want to maximize the amount of recycling from the city of Decatur, but a company might want to maximize the pounds collected,” he says. Because Decatur is close to Atlanta and other municipalities, city officials initially were concerned that a recycling contractor might double-dip — that is, be paid to collect another city's recyclables and then claim they were collected from Decatur.
However, Hammonds says that Dreamsan has been meticulous in its reporting and has proven to be a trustworthy company. “There is no real reason to cheat on tonnage reports because we have to be accountable to all of our municipalities for commodities collected,” Judge explains. “An unwarranted increase in one city would result in a decrease in another. The goal in all recycling programs is to increase tonnage, no matter how the hauler is compensated.”
Decatur is fortunate to have city officials, a hauler and citizens who want to do the right thing. “Decatur has an environmentally conscious and educated citizenry,” he says. “We are satisfied that it's working.”