SOLID WASTE PROGRAM FUNDING OPTIONS

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SOLID WASTE PROGRAMFUNDING OPTIONS

• Solid Waste Advisory Committee
• Waste and Hazardous Materials Division
• October 23, 2009

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September 11, 2009, SWAC meeting accomplishments

• Discussed and re-evaluated criteria
• Discussed all funding options brainstormed at
  July SWAC meeting
• Agreed to complete an evaluation of each funding
  option as homework
• 9 responses received

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Process Goals

• Discuss level of funding necessary
• Evaluate top five funding options
• Choose funding option(s)
• WHMD will submit funding proposal outline to DEQ
  management for fiscal year (FY) 2011 on Monday
• Funding proposal write-up due November 9, 2009

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Todays Objectives

• Discuss level of activity to be funded
• Current (39 Full Time Equivalent FTE)
• Core (42 FTE)
• Future (?? FTE)
• Examine the top five funding options
• Decide which funding option(s) will be
  recommended to Governor
• FY 2011
• FY 2012

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Budget Update

• Governor signed FY 2010 DNR/DEQ budget PA 118
• Includes 1.5 million transfer from Solid Waste
  Management Fund Perpetual Care Account to Solid
  Waste Management Staff Account
• 3.1 million projected from Solid Waste surcharge
  
• Will spend 5.3 million for current program in FY
  2010

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SWMP Activities
Other Programmatic activities not being done
Required by Statute, not being done

• Solid Waste Planning - last round of Plan updates
  were initiated in 1997, completed in 2002.

• Beneficial use follow-up
• Community support for recycling
• Compost inspections
• Routine post-closure inspections at landfills
• Prohibited waste jurisdiction verification
  reviews
• Ground water monitoring audits

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Evaluation

• As homework, SWAC members evaluated all funding
  options against criteria using the following
  scale
• 0 No/ does not meet criteria
• 1 Maybe/ no strong feeling either way
• 2 Yes/ meets criteria
• Responses were compiled and averaged.

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Funding Options and SWAC evaluation

• 13.Dedicated sales tax on products that generate
  waste (9.79)
• Plastic bag tax (9.88)
• Dedicated sales tax on products that generate
  waste (9.79)
• Expanded Bottle Bill (9.6)
• Property tax on waste management systems (9.57)
• DEQ consulting fees (9.39)
• Incomplete, withdrawn or denied applications
  (8.86)
• Fee on all diverted material (8.55)
• Land application fee (8.07)
• Beneficial reuse application fee (7.83)
• Local fees back to state (7.1)
• Fees on processing scrap metal (5.38)

• Revised Penny Plan (16.9)
• Solid Waste Surcharge (13.8)
• Expanded half-back deposit (13.6)
• Generation Fee (12.7)
• Surcharge on waste at other disposal areas (12.3)
• License waste haulers (11.9)
• Review fees (11.3)
• Increased application fees (11.3)
• Inspection fees (11.2)
• Sales tax on waste disposal services (11.1)
• Deposit escheats (10.4)
• Garbage bag/ compost bag tax (10.2)

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Revised Penny Plan

• Description adds an additional 0.01 to all
  retail transactions over 2.
• Primary Payer Anyone making a purchase over 2
• Total estimated revenue 42 million
• Most recent proposal (HB 5612 of 2008) proposed
  revenue would go towards supporting recycling
  programs. A Revised Penny Plan would fund DEQ
  programs. (see next slide for more detail)
• Collection system Department of Treasury will
  collect (similar to sales tax?)
• Comments received Should be classified as a
  fee
• Where is it being done?

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Penny Plan (cont.)

• 2008 version (HB 5612) included following
  distribution
• Fifty percent of the funds will go to the local
  units of government for recycling and waste
  diversion programs operated by the local units.
  Money distributed is in proportion to the money
  spent on recycling the previous year.
• Forty percent of the funds will be distributed as
  grants to fund persons with recycling and waste
  diversion programs, including governmental and
  nongovernmental entities.
• Ten percent of the funds will be used for a
  comprehensive public litter abatement program
  that includes education about, and advocation of,
  litter abatement.
• The last signed bill analysis completed by DEQ
  staff estimated 6 additional FTEs would be
  required to administer these recycling and litter
  abatement programs.
• DEQ has not supported the Penny Plan in the past
  as it has included a provision to repeal this
  funding mechanism if the Bottle Bill is expanded.

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Solid Waste Surcharge

• Description Current solid waste surcharge for
  Type II landfills is 0.07 per cubic yard or
  0.21 per ton. As waste goes down, so does
  surcharge revenue.
• Primary Payer Landfill owners collect from
  generators
• Estimated Total Revenue past proposals have
  incorporated a graduated increase over a period
  of years.
• November 2008 proposal graduated increase
  ending at 0.37/ton over a period of five years.
  
• Increase to 7.50/ton would provide 136.9
  million based on 2008 waste data.
• Annual surcharge for captive Type III landfills
  would also be increased. (see next slide)
• Collection system already in place
• Comments received The sustainable argument
  could be addressed if the fee were increased as
  the state had increased success in utilizing
  material.
• A small surcharge might be marketable. It
  already has worked in Michigan and other states.

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Other States surcharges

• Where is it being done?
• Illinois approx 2.22/ton
• Iowa 3.25 to 4.75/ton
• Wisconsin 5.90/ton
• Ohio 3.50/ton (proposed 4.75)
• Pennsylvania 4/ton

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Solid Waste Surchargeproposed Type III fee
increases
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Expanded Half-Back Deposit

• Description A 0.10 deposit is paid on an
  expanded list of beverage containers and 0.05 is
  returned at time of redemption.
• Primary Payer Anyone purchasing a beverage
  container
• Estimated Total Revenue 400,000,000/year
• Collection system similar to current system,
  the state would just keep half
• Comments received Need allowance for and
  method to direct funds redemption/take back
  centers to take pressure off stores.
• NO. Deposits prevent comprehensive recycling
  from being implemented.
• Concern that there will be a huge education
  program needed as well as a new state program to
  manage this.
• Where is it being done? Nova Scotia has half
  back deposit on all beverage containers except
  milk.

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Generation Fees

• Description A fee is applied to all waste
  generators by type does not depend on how much
  is generated- flat fee
• Primary Payer residential, commercial and
  industrial waste generators
• Estimated Total Revenue 3 to 12/ton
• Collection system would need to be developed
• Comments received not enough info to
  evaluate.
• PAYT but it would be hard to market to the
  public.
• Where is it being done Ohio, Eaton County,
  Genesee County

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Surcharge assessed on waste disposed at other
disposal areas.

• Description Currently the solid waste surcharge
  is only assessed on waste in landfills, it is not
  charged on waste sent to municipal solid waste
  incinerators, materials sent to Material Recovery
  Facilities (MRFs), or yard clippings sent to
  registered composting facilities.
• While Michigans 3 municipal solid waste
  incinerators currently are not required to report
  waste volumes to the DEQ, the DEQ understands
  that the volumes represent approximately
• 5 percent of the total volume of solid waste
  disposed of in Michigan each year. This would
  amount to 2,855,994 cubic yards in 2008.
• According to the 2001 Recycling Measurement
  Project completed by the MRC (the most recent
  data available), approximately 5,431,026 cubic
  yards of material were processed by MRFs.
• In 2008, 1,103,897 cubic yards of yard clippings
  were at registered compost sites.

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Expanded Surcharge (cont.)

• Primary Payer Landfills, Incinerators, MRF
  owners and/or registered compost facilities
• Where is it being done?
• Estimated Total Revenue If the current
  surcharge was extended to include all listed
  disposal options it would generate an additional
  657,364 annually.
• Could assess different rates for different
  disposal options
• Collection system Already set up and working,
  would have to include Incinerators, MRFs, and/or
  registered composting facilities.
• Comments received It is fair and may encourage
  recycling since it supports a PAYT system.

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Funding Option Discussion

• Which options should we focus on?
• Can any of these work together to provide a
  portfolio approach?

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Increased Application Fees

• Description Increase construction application
  fees to be more aligned with those of the other
  states in the region.
• Require annual license fee as opposed to one fee
  every five years.
• Remove discount if renewal fee is license is
  renewed one year prior to expiration.
• Primary Payer Landfill owners
• Total Estimated Revenue unknown

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Review Fees

• Description
• Remedial Action Plans (2-3 a year). Current
  language exists in the legally enforceable
  agreements included in most RAP that allows the
  DEQ to provide a Summary of Response Activity
  Costs to the facility along with a demand for
  payment of those costs within thirty days of the
  notice, however the DEQ has chosen not to bill
  for these costs.
• Construction documentation (approx. 31 last year)
• Quarterly monitoring reports (for both active and
  closed facilities),
• Plan revisions (lechate recirculation plans,
  minor plan revisions and hydro geological
  monitoring plan revisions).
• Primary Payer Landfill owners
• Total Estimated Revenue If the DEQ began
  charging 1,500 for each RAP review, 4,500 would
  be generated annually. Charging 1,000 for each
  construction documentation review would generate
  31,000 annually

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Other DEQ Fees

• Incomplete, Withdrawn or Denied Applications
• Description If a construction fee is not
  complete the fee is returned to the applicant, if
  it is withdrawn or denied, 1/2 of the fee is
  returned to the applicant. A legislative change
  could end this practice.
• Primary Payer Landfill owners
• Estimated Total Revenue unknown
• Inspections
• Description an average of 877 compliance
  inspections are conducted each year (includes
  inspections beyond quarterly inspections).
• currently 166 licensed solid waste facilities in
  Michigan including landfills, solid waste
  impoundments, transfer stations, and processing
  facilities.
• If each of these facilities was inspected four
  times a year, this would result in 664 annual
  compliance inspections.
• 82 construction inspections and other closing and
  post closure inspections were reported last year.
• Primary Payer Facility owners
• Estimated Total Revenue unknown

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Other DEQ Fees

• DEQ Consulting Fees
• Description a consulting fee would be assessed
  technical assistance phone calls and visits
  provided by DEQ staff.
• requires increased tracking of time by the DEQ
  employee, as well as a billable system to be put
  in place.
• may be a flat hourly rate, or may vary depending
  on the experience or class of the employee
  (similar to private consulting fees).
• Primary Payer Anyone seeking DEQ consult
• Estimated Total Revenue If we assume half of all
  SWMP employees spend one hour a day providing
  technical assistance to customers, the DEQ would
  log 43,680 consulting hour a year. Billed at a
  very conservative rate of 50 an hour, this
  amount of consulting would generate 2.1 million
  annually,

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• Beneficial reuse application fees.
• Description Approximately 10 requests to
  beneficially re-use material are made each year.
  A quick survey of other states that charge an
  application fee for beneficial re-use (approx. 7
  states) charge anywhere from 50- 5,000
• Primary Payer Anyone applying for beneficial
  reuse
• Estimated Total Revenue unknown
• Land application fees
• Description The volume of material land applied
  in Michigan is unknown
• Primary Payer Anyone land applying waste
• Estimated Total Revenue Assessing a 0.21 per
  ton fee on this waste would generate 3,300
  annually.

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Beneficial Reuse
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Criteria

• Equitable
• Broad Based
• Reliable and Enforceable
• Easy to Pay and Collect
• Sustainable
• Marketable
• Encourages choices consistent with the goals of
  the Solid Waste Policy
• Provides long term funding
• Provides short term funding

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Next Steps

• Future meeting dates
• Friday, November 6 930 a.m. 3 p.m.