LANDFILLS: Communities Seek New Ways To Fund MSW Programs

Dan Klusman

As industry demands increase and municipal budgets shrink, ma-ny communities are exploring alternative ways to fund landfill construction, composite liners, in- creased operating and monitoring costs and closure and long-term care requirements.

Issuing debt to finance landfill construction costs traditionally has helped to pay for new sites and capital improvements when existing funds were not available. With this method, the debt service payment is included as part of the user charges. Since most lined landfills are constructed incrementally with sufficient capacity for two to five years, future capital expenditures are foreseeable.

Several alternatives exist for capital financing. One option is to use short-term debt to be paid back o-ver the life of each incremental ex-pansion while new debt is issued for each landfill expansion phase.

User fees have gained popularity since constraints on tax hikes have prevented communities from using property taxes to fund solid waste disposal services. To meet future closing and long-term care costs and impending short-term expenditures, communities can set up a "sinking fund" as part of user fees.

Landfill tipping fees, the most popular method for funding disposal services, are structured to fi-nance landfill debt service, operation and maintenance costs, var- ious sinking funds and other services such as recycling, household hazardous wastes collection and public education programs.

Without flow control, community landfills may not receive sufficient tonnage to generate revenue to co-ver expenses. In addition, tipping fees must be priced competitively with other disposal options which do not have to finance other community programs.

Assessment fees, which are often billed directly to the user on utility bills or property taxes, are an alternative to tipping fees. While most assessment fees are sent to residences, some communities are be-ginning to apply them to commercial enterprises as well.

The assessments depend on the user's classification and reflect the amount of wastes generated. If a MSW program is funded by assessments, it can eliminate tipping fees or charge a nominal fee, which may increase the amount of waste brought to the facility.

The cost of a community's program and funding requirements determine each municipality's as-sessment fees. For example, the av-erage cost for each single-family residence in Pasco County, Fla., is $50 per year, while Palm Beach County, Fla., charges $160 per single-family residence per year for solid waste services.

Combining tipping fees and as-sessments is a viable way to fund Subtitle D improvements. This method uses tipping fees to finance a portion of the debt service payment and operating and maintenance expenses. The assessments, however, fund the remaining portion of the debt service and operating and maintenance expenses in addition to community recycling programs and other municipal sol-id waste services.

Choosing alternative funding mechanisms depends on the fee and service policies of each community. Moreover, the options a-vailable to a community vary considerably from state to state, de- pending on laws and legislation. Solid waste directors should evaluate all options to develop a fair and equitable funding program.