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Unit-based pricing (UBP), also known as variable rate pricing, user pay, or pay-as-you-throw (PAYT), is a system in which residents pay for municipal solid waste management services per unit of waste collected rather than through a fixed fee or property taxes. Thousands of communities across the United States are reducing residential solid waste volumes and costs, while boosting recycling rates and proving more equitable pricing through UBP.
This method is similar to how other utilities are priced. For example, just as with electric and water utilities charging based upon the amount of electricity or water consumed, unit-based pricing charges a household for the amount of waste collection and disposal services consumed - households generating more waste pay more. If waste management services are priced properly, households are provided a financial incentive to examine alternatives for reducing waste through source reduction and recycling.
Recognizing the potential of unit-based pricing in reducing waste, the 1994 Iowa General Assembly adopted Senate File 2300. The legislation requires that solid waste planning areas, failing to meet the 25 percent reduction goal, develop draft ordinances to be by local governments for establishing collection fees that are based on volume or the number of containers used for disposal by residents. (IA Code 455D.3(4)).
There are several benefits associated with UBP: