2. Policy Design
Ensure success by taking the time necessary to tailor the PAYT policy design specifically for your community. Some key features include:
- Full or Partial PAYT – Decide whether to implement a partial/full PAYT policy and whether to use tags or bags. In either case, robust P&E is required to introduce, maintain and enforce policy changes.
- Tag vs. Bag Requirements – Deciding on using bags vs. tags, colour, messaging, and instructions are part of the tag/bag design considerations.
- Price – Determining what price to set for each tag/bag depends on factors, such as need to save landfill space by driving down waste and willingness of residents to pay tag prices.
- PAYT Options – Other features include whether to have an expiry date and price on the tags/bags, offering various sizes of bags or requiring more tags on larger bags/containers, selling tags individually or in sheets, and how to deal with counterfeit tags.
The most important initial decision is whether to introduce a partial PAYT or full PAYT policy. To read more about each, click here. The decision depends on the characteristics of the community, resident willingness to accept a full PAYT policy and Council support.
Notably, residents tend to believe that they already pay for waste service in the mill rate so there’s a perception of a double tax unless you offer a rebate. To address this complaint, advance P&E is required showing the underlying accounting to explain that even in full PAYT systems the tag doesn’t typically cover the full service cost except in multi-residential situations.
Factors in making the choice are:
- Average number of waste bags placed out for collection, based on set out monitoring. For more information about set out monitoring click here.
- Existing waste alternatives such as strict bag limits, landfill bans, recycling, composting, yard waste and/or food waste diversion policies that permit residents to avoid waste placed at the curb. The fewer the existing alternative waste diversion services, the less likely a full PAYT policy will be well received by residents.
- The level of interest/demand by residents to reduce waste landfilled, community environmental activism and their willingness to pay for each bag of waste set out for collection.
- External factors, such as a limited remaining landfill space or a new waste management contract with higher disposal costs.
Most municipalities initially implement a partial PAYT policy. A transition to full PAYT can be adopted at some future date if required/desired. Over a number of years, the municipality may gradually reduce bag limits for free collection. This approach helps residents change their diversion behavior over time and ease into a full PAYT program.
Tag vs. Bag Design
The two alternatives commonly used by municipalities involve prepaid tags or bags.
A tag policy involves the use of official tags distributed through local retail outlets and/or municipal administration buildings or directly delivered to the householder. The majority of PAYT municipalities use tags including:
- Waterloo Region
- Town of Georgina
- City of Barrie
- City of Dryden
- Simcoe County
Use of officially marked or custom coloured bags available at local retail outlets or distributed to the householder by the municipality. Municipalities using official bags include:
- Wellington County
- Town of Prescott
- Municipality of South Dundas
- Edwardsburgh Cardinal Township
- Stone Mills Township
Tags vs. Bags Comparison
Tags are often printed in vibrant colours, (e.g. fluorescent green, pink, yellow and orange) for easier recognition by collection crews and reduced opportunity for counterfeiting.
Some municipalities choose to keep the design simple, e.g. only the municipal logo/name appears on the tag. Other municipalities show price, expiry dates, instructions on how/where to display tags, etc.
Some municipalities print serial numbers on tags, but this option is becoming less popular as most acknowledge that they don’t track tag distribution using the serial numbers and adding the sequential numbers to tags increases the initial price. Serial numbers are thought to reduce counterfeiting, however, since a single tag is typically used at each household, it is very difficult and slow for the collection contractor to check and confirm the validity of a serial number at the curb.
Sample municipal tags:
When designing prepaid bags, municipalities often choose vibrant colours (yellow) for easier recognition by collection crews and more difficulty counterfeiting. (Avoid white due to snow camouflage).
It is easier for municipalities to offer different sizes/prices of bags, vs. tags, to accommodate different waste generation behaviour. For more information click here.
Case study: Wellington County
Wellington has implemented a full PAYT policy using specially designed waste bags. Residents choose between 2 sizes of bags. Weekly collection in urban centers and bi-weekly collection in rural areas is provided. The County purchases bags with customized specifications including colour (bright yellow), sizes (30”x38” and 24”x28”), artwork, packaging and thicker plastic than many standard waste bags (1.5 true mil). Bags are sold in packages of 10 large for $20 or ten small for $15 (no HST).
Customized information printed on the large bag packaging in Wellington County follows;
In general, printing costs are lower for municipalities selling tags in sheets rather than individually. Sheet printing costs/tag can be almost half those for individual tags. The average sheet cost/tag for the sample of communities contacted was $0.027 and for those selling the tags individually, average printing costs were $0.053. In all cases, economies of scale factor into the printing costs. Selling tags in large sheets can generate complaints that the municipality is forcing residents to sink cash into unwanted tags.
Printing costs for tags are considerably cheaper than costs to buy specially marked bags.
Specialty bags must be customized to the municipality’s specifications and manufacturers must schedule specific custom production runs. Delivery, handling and storage costs are also considerably higher for bags due to their increased volume and weight vs. tags.
Setting Tag/Bag Retail Prices
Most tag/bag prices do not cover the full cost of providing waste collection and disposal service. Tag/bag prices tend to range from $1 to $3 per unit. The decision to set the price level depends on:
- The need to drive down landfilled waste and/or increase waste diversion rates.
- Willingness of the community and/or Council to support the price.
- Support for issuing exemption/free tags each year.
- The need to cover waste management costs or reduce local property tax burden.
Most communities start with a lower price and gradually increase it over time if diversion rates plateau below desired targets or waste management costs increase significantly.
Avoid overestimating residents’ actual waste set out needs and underestimating their ability to switch to alternative waste diversion services in order to reduce their use of purchased tags. Failure to do so can result in revenue shortfalls during the early phases of PAYT due to overestimation of tag revenues.
With the onset of a bag limits and PAYT policies, there may be a temporary spike in tags purchased until residents realize that they can meet the new restrictions by participating in existing local alternative waste diversion programs. Behaviour change takes time to become ingrained and over time the number of tags purchased by residents tends to decline or stabilizes.
When Simcoe launched its Partial PAYT 2 bag policy in 2005, staff found that for the first year of the program the average number of tags purchased was 2.7 tags/hh/yr. The number of tags purchased per household declined for the next two years reaching an average of 1.7 tags/hh/yr. When the County reduced the bag limit to 1 in 2009 it experienced a surge of tag sales averaging 2.3 tags/hh that year. Since 2009, tag sales have been slowly declining. The chart below shows the change in tag sales over time.
i. Price on the tag
Some communities (Durham Region, Simcoe County, City of Barrie, City of Orillia, Oxford County, Town of Meaford) do not print prices on tags to avoid reordering if the price changes. Some communities change the colour of the tag with a change in price and allow a grace period for residents to use older tags or permit trading in older tags for credit.
Other communities do print prices on tags, (Halton Region, Thunder Bay, Richmond Hill and Niagara Region), which helps ensure that vendors cannot sell the tags at a higher cost since residents can see the price on the tag at point of sale.
ii. Expiry dates on tags
Most communities do not print expiry dates on tags due to the administrative cost and tracking challenge of monitoring and replacing expired tags. This means that residents have unrestricted use of the tags.
iii. Sheets or individual tags
Tags can be retailed in sheets, individually or in combination. The advantages and disadvantages are discussed in the table below.
|Individual Tags||Sheets of Tags|
Communities that sell tags in sheets include: Halton Region, Region of Peel and Simcoe County
Communities that sell tags individually include: Niagara Region, City of Barrie
Communities selling tags both in sheets and individually include: Durham Region
Sample Halton Region Sheets:
Some communities offer different types of bags/tags to enable variable pricing. Both Wellington County and the Town of Prescott offer small and large bags that residents can buy.
- Small bags (24″ x 28″) @ 10 for $15.
- Large bags (30″ x 38″) @ 10 for $20.
Town of Prescott:
- Small plastic bags $0.75 ea. or 10 for $7.50.
- Large plastic bags $1.50 ea. 10 for $15.00.
Town of Stratford
Stratford has adapted the tag system to enable residents to set out different sizes from a small grocery bag to a 360 litre cart.
- Standard waste bag requires 1 tag at $2.50/tag
- Grocery bag requires half a tag split lengthwise ($1.25/tag)
- Cart – 120 litre requires 1 tag
- Cart – 240 litre requires 2 tags
- Cart – 360 litre requires 3 tags
Counterfeiting bags is more challenging than counterfeiting tags. That said, many communities report that counterfeiting of tags is not a serious problem.
Taking a zero tolerance approach to counterfeit or other misuse of tags (e.g. tags being torn in half or cut from neighbouring bags) will help to reduce problems over time. Collection crews must look for counterfeit or torn tags, take pictures and record the address of the resident and/or leave the bag. Municipal staff can follow up with a letter or visit to deal with a recurring problem.
City of Barrie
Barrie has experienced some problems with residents trying to counterfeit tags, which, according to staff, is increasingly easy to do with the high quality printing capabilities of modern home printers.
Despite placing watermarks on the background, residents were effectively replicating the tags. To combat this problem, the City introduced metallic blue tags, which makes counterfeiting more difficult.