Compliance - Archives and Special Collections Management - Metro Archives and Special Collections Records - Rate Review Committee (RRC) Summary

Matt Korot Mike Hoglund, Director, Solid Waste & Recycling Dean Kampfer, Waste Mgmt

Mike Leichner Tom Chaimov, Solid Waste & Recycling Mark Altenhofen, Wash. County

Councilor Rod Park convened the meeting, and meeting minutes from March 22 (which had been distributed in draft form the previous week) were approved unanimously by the Committee. Doug Anderson said he was still editing the summary of the March 15 meeting (adding information from his presentation) and they would be sent out before the next meeting.

Looking over the draft minutes for March 29, ORRA’s Dave White requested an amendment, observing that page 7 of the summary misinterpreted what he had stated at that meeting. Since the minutes were still in draft form, the correction will be made prior to adoption.

Councilor Park introduced the next agenda item, information for design of the “3^rd fee.” Tom Chaimov presented a hand-out (attached) and explained the concept of the fee. “The way I understand it, the ‘3^rd fee’ was supposed to be designed to be consistent with the cost-of-service allocation model, and recover those costs associated with private facilities. That is, recover those costs that folks... they wouldn’t otherwise incur if there were no private facilities.” Paul Matthews interjected that the fee would be fully-loaded with the overhead costs.

Mr. Chaimov explained the hand-out, and said he’d like to get the group’s comments on the design and concept of the fee. He also asked members to let him know of any other information they might need. After looking over the information, Mr. Matthews asked for more details regarding the number and types of inspections conducted by the Regulatory Affairs Division, as shown on “Attachment B, Part 2” of the handout.

Inspections vary, Mr. Chaimov explained, by the type of material facilities are permitted to take, and how complex the operation. “More complex facilities will have more complex inspections,” he said. However, some of the bigger, most complex facilities are run by well-established companies that don’t typically “break the rules;” so inspections there may not be as involved as at other facilities. “They’re subject to a high-degree of regulation.”

Referring still to Attachment B, Part 2, Mr. Chaimov explained that the figures shown in boxes tie the tonnage shown back to Attachment B, Part 1. The facilities related to those boxes, he said, are those which are subject to Metro fees and taxes. The others are exempt, he said, “...by virtue of, primarily, handling source-separated recoverable waste..”

From the audience, Steve Kraten of SW&R’s Regulatory Affairs Division added that there are exceptions. Tire processors are regulated; sludge processors are in a gray area and may be brought under regulation soon. Inspectors, he clarified, check on exempt facilities to verify that they are only accepting material that is exempt, and not surreptitiously spreading out into other activities.

Ray Phelps, referencing “Non-Metro” costs of $482,329 from the previous week’s handouts (page 4, as attached to meeting summary of March 29, 2005), asked if that entire amount is for the inspections listed on Attachment B of tonight’s handouts. Mr. Anderson explained more about the Regulatory Affairs Division. The Division handles a wide spectrum of activities, including the illegal dumping program. “The Code Enforcement Group,” he said, “...enforces Metro Code with respect to facilities, the public health and safety issues at facilities, finance issues, as well as flow-control and other factors. One of their main roles is the licensing and franchising of facilities, determination of exempt facilities,... and enforcing [those licenses].” Field inspections and desk inspections are used to that end. Additionally, Regulatory Affairs “...enforces and even prosecutes people who flout the law... For example, a ‘wild-catter’ that picks up waste from construction sites, hauls it out of the Region without paying fees, disposes of it improperly, and so forth – that’s another activity of this [Enforcement] group, and they do, and have, taken those kind of flouters all the way up to criminal prosecution.” Mr. Anderson went on to describe other aspects of the Regulatory Affairs Division, such as the auditing function that supports the Enforcement Group.

Referencing again page 4 of the handouts of March 29, Mr. Anderson pointed out that the total cost of the Division is evenly split between all regional generators (through the Regional System Fee), and the “Non-Metro” allocation, which would be in the third fee. “Last year, the reason for splitting the entire bundle I just talked about,” he said, “...was to put in the [Non-Metro cost], the functions that are directly related to inspections, license and franchise enforcement, auditing, that kind of activity.” The costs related to criminal activity, for example, remain in the RSF, Mr. Anderson explained.

Mr. Phelps asked how much it costs the system for any facility to exist, and stated that he felt the application fees are set too low, which raises the cost to the system. “The pikers should pay. If you’re spending $490,000, and half of it is for compost and roofing processors, then half of that cost ought to be borne by them.”

The group began to discuss how it would be possible – if at all – to track an individual facilities’ cost of Metro staff time, etc. in order to divide the overall cost appropriately. Mr. Phelps suggested breaking the facilities up into different classes, “...a regional transfer station is one kind of critter, [etc.]. If an inspection takes an hour at a regional transfer station... it’s a fairly easy number to drive throughout.” Councilor Park warned, however, that it’s sometimes possible to end up “...losing the money by trying to chase the money.” Citing the subject of inspections and using an example from the nursery industry, the Councilor explained that it’s important to make sure that even within ones’ own industry, each business is getting all the services that they deserve and need.

Further discussion of how it might be possible to determine the cost of individual inspections ensued. Staff time would need to be allocated, including drive-time. Simply charging for inspections can quickly become a mire because so many incidents, not merely facility types, differ. The group discussed application and license fees. Mike Miller spoke up, “It seems to me we should worry less about how to do the math, as opposed to what’s the policy – who’s going to pay, who’re we going to include – then worry about the math. I think the policy issues are the big thing.” He expressed frustration that facilities which are subject to the RSF end up, in essence, paying for the inspection of facilities that are exempt.

On request, Mr. Anderson explained the facility regulation policy to the non-industry members. “The main focus of the policy here is to ensure that facilities accepting mixed waste, i.e., disposal sites, are regulated.” These regulations ensure public health and safety, and that facilities are in compliance with their franchise conditions, he said. Along with public health and safety, Mr. Anderson continued, we need to ensure that fees and taxes are paid, and confirm compliance with contract flow guarantees. “In addition,” he said, “...we also impose a degree of social regulation in the sense of almost all the facilities are subject to minimum recovery rates. There’s also a bit of economic regulation with the local transfer stations – the famous ‘cap’ issue.”

In contrast to disposal sites, composting/yard debris facilities, roofing material processors and other “specialized processors” (tires, clean MRFs, concrete and rubble) are taking source-separated material. Historically, Metro’s policy has been minimal or no regulation of source-separated solid waste, with the exception of compost / yard debris facilities, “...which the industry invited [Metro] into in the early 1990s.” At that time, he explained, curbside yard debris programs were beginning, but there was some degree of question about whether there would be sufficient markets for the material. Because of issues such as odor, the industry was concerned that “...a bad apple or two in the bunch could tarnish the image of the entire [yard debris composting] industry. So Metro established standards for processing, enforced them through licensing and regulation.” The Regional benefit was to ensure there was a stable and growing market in yard debris facilities so that curbside programs would have a market for the material, Mr. Anderson stated. This was judged to be a regional benefit, broadly-based, and thus the costs became part of the RSF.

Metro does, Mr. Anderson noted, conduct occasional inspections of facilities taking source-separated materials to ensure they are not taking materials that would violate their exemption. “Leave them alone,” he said was the policy, “but let’s make sure we should be leaving them alone, and they’re not doing anything untoward.”

Of facilities that are outside Metro’s boundaries, Metro has an agreement with most of them, Mr. Anderson said. The policy has been “...to not enforce physical flow-control, but rather let that waste flow to other landfills so long as they operated in an environmentally sound manner, and collected Metro’s fees and taxes and remitted them. It’s a good quid pro quo.”

Mr. Phelps agreed with Mr. Anderson’s recollections. He added that if a facility is exempted because of perceived regional benefit and Metro deems it necessary to carry out inspections such as at yard debris facilities, “I’m not going to argue with that. At the same time,” he continued, “...that’s not an area where that effort should be costed.” He maintained that 100% of the system should pay it, not just private facilities. Mr. Miller said that there needs to be clear policy regarding facilities that “...are a drain on the system – they cost something and aren’t participating.”

Councilor Park said it’s the same principal as not charging facilities for recycled material.

Ms. Poyourow brought back the subject of how facilities might be grouped. For instance, facilities requiring similar frequency and expense of inspections, “...such that we might then assign costs to groups, instead of – as Councilor Park said – truck driving, [etc.]” She asked Mr. Kraten how consistent the number of inspections are at facilities from year to year. Mr. Kraten responded that the plan each year is to inspect approximately the same number of times, “...but what happens is that there may be problems at particular facilities. When there are, we need to step-up the inspections to make sure that those problems are being taken care of.” Regarding sludge processors, only one is currently under regulation. Metro is still developing its policy in this area.

Responding to Ms. Poyourow’s question about penalties for needing extra inspections, Mr. Kraten said that such penalties do not exist. “If a facility is non-compliant and enforcement action is taken, there could be a fine imposed, but it’s not directly related to the number of inspections it may take to resolve the issues.”

“Are certain types of facilities inherently more expensive to inspect than others?” Ms. Poyourow asked. Mr. Hoglund volunteered that facilities have different operations, different machinery, different processing capabilities, different materials. Having toured facilities during inspections, he said that yes, they differ in time and effort. For instance, Mr. Hoglund commented that while yard debris facilities’ inspections are normally quicker than some other types, “...if a yard debris facility is next to a creek, and they’re worried about leachate, we’re going to have to walk around the pile, look at it, figure out what’s going on, take pictures...”

Ms. Poyourow added “The cost of regulation for each facility isn’t just going to be there, walking around. It’s also all the paperwork, all the tracking... Unfortunately, all your answers suggest that it would be quite difficult to separate these into groups based on the frequency of inspection and the cost of those inspections, especially given that repeated inspections may be necessary in case of violation and they may not actually result in a fine that covers the cost.”

Mr. Kraten added that when inspections are done at certain designated facilities in Eastern Oregon and Eastern Washington, the travel time alone takes hours.

The group continued to ponder how best to handle and allocate the inspections portion of the Regulatory Affairs budget. While Waste Management’s Dean Kampfer suggested using simple math (dividing the budgeted funds by number of facilities and planned inspections), Councilor Park said that from his own experience, “It’s kind of like insurance: There’s a certain level of ‘pay to play’ we have out there, and I know everyone’s interested in keeping their costs down.” However, there’s a definite value to everyone in the system in knowing that their competition is being inspected, too. He continued, saying that a solution wouldn’t likely be found at this meeting, and a better model might include changing the ongoing franchise fees, application fees, perhaps by type of facility. These are questions that he’d like staff to look into further.

As for the idea of a flat fee per inspection, Mr. Miller felt it could be more a hardship on small facilities than large. Ms. Poyourow pointed out that the ratio of inspections to facility type varies enough that a flat fee might not be a fair idea. Councilor Park reiterated that staff would look into it and work through the potential options. He’d like to look at some other models.

Mr. Matthews felt that figures could be developed using the concept of inspection equivalents. “If you have a yard debris [facility] and that’s typically, say two hours on site, and an hour going there, and four hours at the office writing it up [for instance], versus a private regional transfer station, which is [for instance] four hours on site, four hours driving, eight hours back at the shop.” The concept would take into account, therefore, that one type of inspection is twice as much work as another type, and figures developed from there.

Referring to Attachment A, Mr. Matthews continued, pointing out that there are some items that this idea might not be the right model for. For instance, consider what the market will bear. Using yard debris as an example, Mr. Matthews illustrated, “Maybe the cost of that inspection regime might be put into the Regional System Fee – not so much to subsidize the inspections, but to subsidize that activity. [If] we’d rather have yard debris in place, and one of the costs of having yard debris in place is to provide some sort of oversight, recover that in the Regional System Fee..” Ms. Poyourow said that trying to allocate an exact cost-of-service has too many variables to be completely accurate. “It’ll be approximate, whatever we do,” she said.

Referring to out-of-region landfills that, through an arrangement with Metro, are inspected [Wasco County, Finley Buttes, Columbia Ridge, Coffin Butte, and Roosevelt], Mr. Hoglund offered that if the cost of all tonnage is allocated out, “...the drive time out to the remote landfills – because we couldn’t [site] a landfill within the Region, that might be something that you allocate across, but that would make it more complex.” That idea could be looked at internally.

There was some brief discussion of how the table in Attachment B was laid out. Mr. Phelps mentioned he prefers to stay away from using tonnage as a way to allocate costs. “Tonnage gets skewed, depending on function,” he said. He prefers the idea of clustering facilities by function and then finding the figures.

Moving the meeting forward, Councilor Park noted that if Metro Council decided to move to an all-private solid waste system, a way would still have to be found to allocate the costs. “Equal isn’t necessarily fair,” he said.

Coming to rest on Attachment A, Cost Causation, Mr. Chaimov commented that “...most of what you’ve been talking about this evening so far is the inspection [portion].” Other concepts are included in Attachment A that may warrant further discussion about their allocation to private facilities. Councilor Park asked members to forward any additional ideas for this piece to staff. Mr. Matthews said he’d prefer to go over the piece as a group, “...so that by the time we make a rate proposal, we’re pretty certain we’re comfortable with all the decisions layered on this sheet.”

Councilor Park reminded the group that the discussion of this meeting was to focus on the “third fee” concept. Did the group feel confident they could come to a conclusion on the subject by the next (and possibly final) meeting? Mr. Matthews said he sees the third fee as containing two questions, “How do you design a mechanism for recovering that cost, and what ought to be in this cost?” Depending on what is put into the cost, recovering it may be handled differently. The Councilor repeated the question of whether the group felt the issue could be concluded at this meeting and the next. Mr. Matthews said it all needs to be looked into – what should go into the third fee, what shouldn’t, etc.

“Given what I heard in the other discussion, that we don’t have the groupings, and given that we haven’t yet gone through this particular discussion, I’m trying to figure out how we get to making a recommendation on [April] 12^th so we can continue the budget process.” He’d like to get more ideas from the members, but felt that there simply wouldn’t be time to find answers to some of the questions this budget cycle.

Ms. Poyourow said it’s apparent that, “...we can’t perfectly allocate the cost of regulating these facilities to these facilities, and that we’ll have to be more approximate than that. The question of whether or not we can do that [in the time allotted] hangs on how approximate we’re willing to be.” Mr. Matthews disagreed, saying he felt the question of inspection costs could be cracked fairly easily. He wanted to make sure the other pieces were looked at, too. As for allocation, he suggested putting inspection costs into the Regional System Fee.

Ms. Poyourow agreed that Attachment B could be looked at the following week, and asked that the Regulatory Affairs Division go through the list of facilities that are inspected, and approximate how many man-hours each inspection takes. Is that something that can be estimated, she asked Mr. Kraten. Mr. Kraten said the inspectors may be able to come up with something, and Ms. Poyourow said that if so, numbers could be calculated and allocated. “Why do I have this feeling it’s never that simple?” Councilor Park said with a smile. Having gone through inspection programs with his business, he’s learned that what appears to be simple can be much more complicated than it appears at first blush.

Mr. Kampfer commented that decisions will also need to made regarding which types of facilities would be put into the Regional System Fee, such as yard debris composters, roof processors, tire processors, etc.

Councilor Park focused the Committee’s attention on the direct and indirect costs listed on Attachment A that may be put into the third fee. Mr. Chaimov recapped that,“...the third fee would recover costs that would not be incurred were it not for the existence of private facilities.”

Mr. Anderson and Mr. Chaimov explained each item very briefly for the Committee’s consideration. Looking down the list, many of the bullet points elicited little or no discussion, nor opposition. Mr. Matthews suggested putting licensing/franchising fee issues aside until next year. The concept of “front door exemption” was discussed, and Mr. Matthews felt it should not be part of the third fee. Coming upon the Regional System Fee credits, Mr. Anderson explained to the non-industry members, “When a facility delivers waste to a landfill, they will pay whatever the landfill’s tip fee is, plus the Regional System Fee and Excise Tax. Metro has a program that, based on a facility’s recovery performance – i.e., if they meet a minimum of at least 30% recovery from incoming dry waste – they’ll get a credit against that fee and tax they pay at the landfill. The purpose has changed over the years; it was originally a cost-relief issue [for private facilities when Metro’s tip fee went down]. The Council changed that a couple of years ago to be an explicit recovery-enhancement credit. It’s a credit against fees and taxes to eligible facilities when they deliver waste to a landfill, so they effectively pay less Regional System Fee and Excise Tax per ton.” The results of a study done about a year ago concluded that, “It’s inefficient in a tax-design sense, but it does result in real additional recovery – about 35-40,000 tons,” he said. Currently, it’s allocated 100% to the Regional System Fee, Mr. Anderson said. Over the years, Councilor Park commented, the program has sparked lively debate.

After further explanation, Mr. Matthews suggested discussing the Regional System Fee Credits further next year.

Working down the list into the indirect costs section, Mr. Matthews suggested that Debt Service allocation remain as-is. Regarding the indirect cost of “Metro handles most public customers and household hazardous waste,” Mr. Matthews commented that it may be in the disposal charge now, but should perhaps be in the Regional System Fee. Mr. Chaimov said that this point, and the next (Disposal/tip fees that exceed lowest unit costs) are related, because Metro takes most of the Region’s self-hauled, or “public” waste. This necessitates that Metro’s transfer stations be open longer hours to accommodate private citizens. He commented that in earlier meetings, the group maintained this “...artificially inflates rates around the Region.” According to the criteria of the third fee, therefore, “...that is a cost in the system that would not be incurred were it not for private facilities.”

The issue of whether this item was of regional benefit or only a benefit to Metro’s customers was debated. Councilor Park made the argument that if not for the longer hours, there could be more illegal dumping. Mr. Miller said that Metro would likely be open long hours regardless of private facilities. “However,” he said, “because of private facilities, you have less tonnage to spread the cost over. There could be something included into the third fee that accounts for those less tons.” Mr. Matthews felt it should be in the Regional System Fee.

Continuing the discussion, Councilor Park said that currently, tonnage is about 50% public, 50% private. “But if you were to go 3/4 private, 1/4 Metro, based upon the cost allocations and so forth, you would see an increase in the Metro tip fee. There wouldn’t be any change in services, but the cost would go up. So is that really a third fee issue, or a Regional System Fee issue?” As tonnage moves, how does it affect the system, he asked. Mr. Phelps added, “The other thing is the artificial nature of caps on the facilities. You have the benefit of more tons, so you’re open more hours.” He reiterated the point that caps prevent private facilities from taking waste from private customers.

After brief further discussion, Mr. Korot spoke up: “I feel like we can march down this line of settling the third fee, and we’re just marching down the line towards a policy problem. I think there’s a policy problem already with the cost-of-service allocation, and this just walks us further down that line. I question the benefit – we’re the Rate Review Committee, we’ve got our charge to look at the rates, but it keeps bumping into these policy issues that are completely intertwined with the disposal system issues more broadly... We can settle on the third fee, but I’m going to come back at the next meeting and say that local governments have a problem with the model as a whole. So, where does that get us?” Explaining his position further, Mr. Korot said that the allocation model last year seemed to have some consequences on the rate-payer that weren’t anticipated. Rates were driven up at private and public facilities without a correlation to programs.

Councilor Park added that he and Council President Bragdon have identified that “Metro’s price doesn’t necessarily have anything to do with the private side’s costs. Just by moving things around, without touching anything else,” he said, if Metro’s price changes, the rate-payer ends up paying more, even if that change had no effect on private facilities’ costs. The Councilor and Mr. Phelps debated this point with some vigor.

Mr. Matthews pointed out that there seems to be a disconnect: “The Rate Review Committee is looking at Metro’s rate. The local governments are looking at the disposal rates... [The problem is] we’re looking at setting the rate here – it may or may not reflect on the cost of disposal that [local governments] are looking at. That’s outside of where we need to be looking right now. I appreciate the situation, but I’m not sure that this committee can affect that.”

Mr. Anderson challenged this thought. Last year, he said, the Committee recommended a significant “sea change.” Council saw a number of fall-out issues at that time, but the Committee has seemed to disregard these. Mr. Matthews argued that whatever the cost is determined to be, the simple policy question of “Do your garbage rates in [for example] the City of Gresham reflect the true cost of providing that service if you were using someone other than Metro for disposal? Regardless of what we do here with the Metro tip fee, we’re not going to solve that problem.” Councilor Park said that it does, however, exacerbate it depending on what is done.

Mr. Chaimov reminded the group that according to the Committee’s charge, they have the authority and responsibility to review and make recommendations to Metro Council regarding both solid waste disposal rates and charges at facilities owned, operated, or under contract to Metro, and at Metro-franchised facilities.

Councilor Park said that while he understands Mr. Matthews concerns, when looking at a recommendation, Council has to take into consideration how it will affect the public. Council has to weigh the public benefits, increases, etc. “It may be at cross purposes to what a perfect model would be, because quite honestly, we’re not in a perfect system.” Even though something may seem to be the right thing to do from a modeling perspective, the policy issues are real, the Councilor said.

Mr. Korot added that a rate change of a few cents is less a problem than “...inventing a policy that has years of implications without looking at how it all pans out.” To Mr. Matthews, he directed, “I completely agree with everything that you’ve said on the specifics, and the substance and the value, absolutely – I just can’t separate it from what I know’s going to come before the Council.”

Mr. Matthews stressed that once a cost-of-service has been identified, “...if there are policy issues like you’re describing, there is nothing stopping us from making an ad hoc adjustment specifically to address a policy implication that we can specifically describe and explain to the public and the Council.” Councilor Park said he just wanted the Committee to realize that Council must take policy issues into consideration before approving rates recommended by the group.

Directing attention to a piece of the agenda packet entitled, “Notes for the FY 2005-06 Rate Recommendation,” Mr. Hoglund said this piece was created to help compare the status-quo with the full cost-of-service model. The hope was that the Committee would talk about the third fee, work that into a rate, and then weigh the ripple-affects. “Then you can form your recommendation... you’re free to move [numbers] where you want, but make sure that you understand that there are implications. You can make your recommendation, and it may not even be a unanimous recommendation, and then the Council can deal with that as they want.”

There was discussion of the next steps. Start with what the cost-of-service is, Mr. Matthews said, and then examine policies and make specific recommendations about those. Mr. Anderson and Ms. Poyourow agreed with that idea. “Let’s figure out what the number is, lock it down, and then criticize it and apply the policy filters to it and see where we have to make some adjustments,” Mr. Matthews said. This will take meetings beyond April 12, he said, but while revenue requirements have to go out for that deadline, the fee design doesn’t necessarily need to, he concluded.

Councilor Park said that if the construction of the rate is going to affect the tip fee, Council needs to know that – it affects the program budget.

Mr. Korot told the group that he met recently with other local government representatives to discuss rate issues. “There have been disconnected policy decisions made over the years that have all kinds of different impacts,” he said, “and the rate process has all kinds of different impacts. We keep making segregated decisions, without a holistic view of where the system is going and what its impact is on the users.”

The Council is having some very interesting discussions regarding the relationship between the disposal system plan and the Regional Solid Waste Management Plan (RSWMP), Councilor Park said. Policies that may be adopted may affect the future direction for years.

Mr. Matthews marveled that local governments haven’t been represented on the Committee before. He asked Mr. Korot to talk to his peers and perhaps bring back ideas that could help formulate some of the policy questions in order to help the Committee make some recommendations. “That would be the kind of recommendation that the Council could probably use,” Mr. Matthews said.

Noting that his meeting with local government peers was very fruitful and in-depth, “We don’t think we can do anything meaningful with understanding the tip fees at facilities of vertically-integrated companies,” Mr. Korot commented. “If a model like cost-of-service gets implemented and we don’t buy into the concept of the margin, there’s a simple default of simply not allowing that margin, but I don’t think that’s good policy.” Local governments, he said would like to just freeze the current allocation model and do a much deeper, systematic look at the implications. “We don’t think they’re fully considered, and we don’t think we can get to them at the collection level.”

Mr. Phelps took exception, asking if local governments will freeze their costs, as well, and there was short but spirited dialogue on that subject, as well as what the use of the word “margin” in the figures meant.

Further discussion generally commented on the night’s previous conversations. The group agreed to look at the third fee, propose a fee and let the Council change it as needed for regional policy issues.

The RRC wishes to discuss the design of the “3^rd fee,” recommended in concept last year, but not fully implemented by the Metro Council. This document and attachments provide detailed information to help inform the RRC’s discussion surrounding design of the 3^rd fee.

The idea behind the 3^rd fee, consistent with the committee’s recommended cost-of-service allocation model, is to recover from private solid waste facilities costs that are caused by the existence of private facilities in the system, i.e., costs that ratepayers would not incur were it not for the existence of private facilities. Historically, these kinds of costs have been recovered on a per-ton basis from a broad ratepayer base, via the Regional System Fee. In formulating its recommendation, the RRC may wish to consider the following discussion framework:

1. Identify the sources of costs that would be recovered most appropriately from private facilities and/or their customers;	See Attachment A
2. Identify any potential payer classes (facility & ratepayer);	See Attachment B
3. Assign costs to facility/customer classes; and	Attachments A & B
4. Recommend the basis for cost recovery for each class (e.g., per-ton, percentage, flat fee, tiered, flat plus per-ton, etc.).

To inform the RRC’s discussion, Attachment A contains information organized as follows:

• Cost Causation – Certain elements of the solid waste system cause costs that would likely not occur were it not for the existence of private solid waste facilities. This list groups direct service and program costs, such as for facility regulation, separately from indirect costs, such as tip fees that exceed unit cost.

• Other Considerations – The RRC may wish to discuss other considerations related to direct and indirect costs. A shortlist of other considerations is provided. A few blank spaces are included in the event that the RRC identifies additional considerations.

Attachment B (Part 1). Metro-Region Tonnage Accepted at Solid Waste Facilities includes a detailed tonnage summary for activities at facilities where Metro collects fees & taxes.

Attachment B (Part 2). Regulatory Classification shows tonnage throughput and the number of Metro inspections planned for the same facilities (and other fee-exempt facilities), organized according to Metro’s regulatory hierarchy.

• Metro has a long standing policy not to charge fees & taxes on recovered materials

• DEQ & local governments (LGs) regulate landfills, Metro regulates transfer stations and MRFs, LGs regulate haulers

T:\Remfma\committees\RRC\FY 05-06\Mtg5\discussion framework for 3rd fee design.doc