The study described and analysed the
municipal rate-fixing and collection process for domestic garbage clean-up
services, by applying cost-centre methodology and by assessing a real
overvaluation of rates charged in 1999 (82.3% real) and for the period
between 1997 and 1999 (around 76,8% real), in average. This situation was
generated basically by a wrong inclusion of the cost for public
thoroughfare clean-up services in the costs of domestic clean-up services
which, in turn, originated in administrative information systems that were
oriented to accounting and financial control rather than to management
control. Notwithstanding the above, when improving the rate-fixing
methodology in order to incorporate a broader depreciation definition and
include the cost of municipal capital, the overestimation resulting from
the rate would only reach 17.3% for the year 1999.
When analysing the clean-up service operation, research
revealed the existence of idle capacity in the garbage collection fleet of
vehicles, to such an extent that the simple reduction of collection
frequencies could imply a rate reduction of at least 12% --vis-à-vis the
values estimated for the year 2000. Whereas the investment aimed at the
decommissioning of the current landfill and its later extension for three
extra years could increase the cleaning rate by 24.9%, in terms of the
optimal level reached in the short run, the study revealed that if the
municipality took steps to improve rate-fixing and operation, it could
maintain cleaning rates at the present levels and reduce its real
operational deficit by 12%.
As regards the efficiency of collecting the bills for
clean-up services, it was determined that around 30% of such municipal
bills are returned by the local agency of the Post Office of Chile, as the
addressee is not found. In addition, it was revealed that a large
percentage of bills collected through the Municipal Tax collection,
represent a double billing to the same users. This points to a reality:
the exact number of municipal debtors cannot be determined accurately.
Formally, debt accumulated between 1996 and 1998, at current currency
value, reaches 420 thousand US dollars. However, around 75 thousand US
dollars could be due, in practice, to charging the same user twice.
In terms of equity in the collection of clean-up fees,
the municipal exemption policy has determined that up until now nearly 58%
of users in the commune are potentially exempt from clean-up payment. In
practice, this policy has been creating objective difficulties to the
municipality over the years, for an effective collection of the clean-up
rates. The fact that this activity has not turned into a free-of-charge
service is due to a weak municipal collection which makes it unnecessary
for users to start the exemption request procedures.
An evaluation of collection efficiency revealed that by
including cleaning services in the Land Tax bills and in Municipal Tax
bills, users paid almost 25% of service costs estimated by the
municipality and almost 35% of costs re-estimated by the study, with a
delinquency rate of just 22% and 5%, respectively. The above can be
compared to the clean-up bills, where delinquency reached 82%. To tackle
this issue, the study undertook the hypothesis that the Polluter-Payer
Principle and the different rates based on emissions do not represent good
policy guidelines for the management of household solid waste under
generalised poverty conditions. Rather, it would be more pertinent to deal
with an approach that considers environmental hygiene as a public good.
The result of this is the need for flat rates in payment for the clean-up
right and of incentives to promote recycling, on the basis of minimising
final disposal costs and to capture environmental and social externalities
generated by activities of this nature.
In this regard, the survey shows that the introduction
of recycling systems in the commune is well received by the users as a way
to contribute to environmental conservation. In general, it can be said
that for over two thirds of the population surveyed, recycling is
perceived as a "moral" issue or, in other words, there is some
willingness to pay for a cleaner environment, by classifying domestic
waste in origin. In addition, research detected that a recycling system in
the commune could at first be implemented through three systems. The first
is a network of 12 composting plants. The second is an urban agriculture
programme that incorporated composting within the houses and, in addition,
generated high social benefits in terms of food production. The third
programme consists of quarterly campaigns of recyclable, inorganic waste
collection, mainly paper, cardboard and glass containers. Cost reduction
associated to a combination of these programmes was estimated in the range
under 10%, despite the fact that they ended up by contributing a reduction
of almost 38% of municipal waste in an inter-community landfill.
Despite the above, the composting plants network
resulted in a high, social profitability, enough to allow at the beginning
the operation of a private concession modality of such services, either in
the hands of companies or non-profit social organizations.
In addition to these savings in costs, additional
discounts would be justifiable on the basis of these positive
externalities resulting from recycling. This would imply the
transformation of the current municipal subsidy for domestic garbage
collection service, into a social investment focused on participation in
the comprehensive recycling programme that has been proposed. At present,
the subsidy that is implicitly delivered by the municipal clean-up service
is equivalent to 23.6% of municipal public use services expenses and to
21,6% of municipal transfers for healthcare, education and social security
(excluding transfers from the respective ministries).
This proposal not only implies calculating rates
according to real cost and a strong municipal commitment to an effective
collection of the bills, but basically the implementation of a new
institutional attitude to support municipal collection procedures to allow
for identification and discrimination of users on the basis of their
degree of involvement in recycling. We specifically propose the
implementation of a redeemable coupon system, distributed as part of the
activities of an urban agriculture programme that contains the promotion
of classification at origin, domestic composting and, eventually, support
to recyclable, inorganic waste collection campaigns. The urban agriculture
programme should represent a means through which the municipality
encourages the users not only to incur in more cost-effective actions in
the management of domestic solid waste but also, in addition, trains them
to transform such waste into new local resources.
Some estimations for the commune of Tomé show that an
urban agriculture programme for 2.400 families in the commune, who almost
represent the total population under the poverty line, would cost 330
thousand US dollars a year. However, the net income for annual food
production was estimated at 1.1 million US dollars. This creates an
economic basis so that the contribution of the poorest families to finance
municipal clean-up activities could be increased, as the net income
generated by each user joining an urban agriculture programme, is
equivalent in average to over12 times the annual value of the clean-up
rate. From the financial point of view, if the urban agriculture programme
were incorporated as part of the costs of the clean-up service, the net
expense for the municipality would be of only 60 to 55% of the total cost,
and the rest would be transferred to users with higher paying capacity in
the commune, thus generating a re-distributive effect. In turn, the
highest municipal cost could be financed by re-directing funds and ongoing
courses, contributing to the maximisation of the social impact of policies
implemented in sectors (for example: healthcare promotion, alleviation of
poverty, etc.).