Designing and implementing a new fee can be complex. It requires legal diligence, public engagement, and technical planning. But done well, fees are a powerful tool to fund the food waste reduction programs that communities want and need.
By Eugenia Manwelyan
As cities and counties across the U.S. ramp up efforts to reduce landfill-bound waste, one major challenge consistently emerges: how to pay for effective projects and programs. Implementing effective food waste landfill diversion, whether through curbside composting, commercial diversion programs, or community education, requires sustained investment. When thoughtfully designed and legally sound, fees can offer a stable, flexible, and community-driven approach to funding food waste reduction and diversion programs. Fees can often be used in tandem with other funding approaches and can be a powerful tool to help ensure that food waste diversion is a lasting part of local climate, solid waste management, and sustainability strategies.
This article outlines how fees can be implemented and used to fund food waste reduction programs, drawing from lessons learned across jurisdictions. It will detail types of fees, key legal and administrative considerations, and real-world examples that highlight both the potential and complexity of this approach.
Image generated by ChatGPT / OpenAI, courtesy of Eugenia Manwelyan.
Understanding Fee Structure
Prior to developing a fee structure, it is essential to understand how fees fit within the broader context of municipal revenue systems. Local government revenues generally fall into two primary categories: general revenues, such as property and sales taxes, which support overall public operations; and functional, or program-specific, revenues, which are dedicated to particular services such as water, sewer, or solid waste management. Fees for food waste reduction typically fall under this second category. Within the domain of functional revenues, precise terminology is important. A 鈥渃harge鈥� refers to any billed amount, a 鈥渞ate鈥� denotes the unit cost of a service (e.g., five dollars per gallon of compost), and a 鈥渇ee鈥� represents the total amount billed to a customer, usually calculated by applying the rate to the customer鈥檚 level of service. Understanding these distinctions is critical to ensuring that fees are designed transparently and in alignment with established municipal financial practices.
While every community鈥檚 legal framework and political climate is different, fees can provide a direct, reliable revenue stream that reflects actual service costs. Unlike taxes, which tend to fund general government operations, fees are tied to specific services and must be reasonably related to the cost of providing those services. That specificity can make fees more politically palatable, legally defensible, and easier to manage over time. Fees can fund a wide range of food waste reduction strategies鈥攃ollection programs, education campaigns, infrastructure upgrades, and staffing鈥攁ll without competing with other general fund priorities.
A well-structured fee system reflects these core principles:
鈥� Cost-of-service pricing: Fees must be linked to the actual cost of providing a service.
鈥� Transparency: Residents should understand what they are paying for and why.
鈥� Legal authorization: Fees must be adopted through ordinances or resolutions, often with public input.
鈥� Regular review: Costs change over time, so fees should be evaluated and updated periodically.
In some communities, solid waste services are tax-funded, with no direct fees charged to residents. However, jurisdictions focused on aggressive waste reduction goals often find that shifting to fee-based funding creates a more stable and predictable revenue stream.
Local governments have several options when it comes to structuring fees that support food waste reduction programs, and each comes with its own set of tradeoffs. Some communities rely on flat fees, where all customers are charged the same amount regardless of how much waste they generate. While relatively simple to administer, flat fees can be regressive and offer little incentive for waste reduction. In contrast, variable fees鈥攁lso known as pay-as-you-throw鈥攖ie the cost to the volume or weight of waste disposed, encouraging residents and businesses to divert food scraps to compost. Other jurisdictions offer subscription-based composting programs, where only those who opt in pay for the service. While this model can be politically easier to adopt, it may limit participation and result in lower diversion rates. Special service fees are another tool, applied to one-time or event-based needs, such as food waste collection at festivals or community events. Lastly, some communities implement surcharges鈥攁dd-on fees to existing bills鈥攖hat are earmarked specifically to fund diversion programs or pilot initiatives. Selecting the right mix of fees depends on a jurisdiction鈥檚 goals, administrative capacity, equity considerations, and legal authority.
Image: Taz, Wikimedia Commons, CC BY-SA 3.0.
Diverse Approaches
Jurisdictions across the country have taken diverse approaches to funding food waste reduction, shaped by their local legal frameworks, political will, and infrastructure capacity. In Seattle, WA, for example, composting is not only encouraged, but also mandated. The city prohibits food waste in garbage and funds its organics program through a volumetric rate structure based on bin size鈥攔esidents who generate less garbage pay less. This creates a strong price signal and a clear behavioral incentive. This encourages residents to downsize their garbage service in favor of composting, effectively embedding food waste diversion into everyday household economics. San Francisco, a longstanding leader in zero waste efforts, blends a flat base fee with volumetric pricing, making compost and recycling cheaper than garbage bins. This tiered pricing, combined with strong enforcement, sends a consistent message that food waste belongs in the green bin, not the trash.
Other cities take a more universal funding approach:
鈥� Austin, TX, includes composting in a flat monthly base fee paid for by all residents, regardless of use. While this does not create the same direct incentive to compost, it ensures steady program funding and broad service access.
鈥� In Ann Arbor, MI, the city funds organics programs through a hybrid model: residential composting is supported in part by a climate action millage passed by voters, while commercial customers pay tiered fees. This combination of tax and rate-based revenue allows for flexibility and program expansion.
鈥� Montgomery County, OH, offers an innovative example of increasing revenue by improving the implementation of its parcel-based fees. The county applies an Annual Property Charge to all improved parcels, regardless of service level, and adds the fee directly to property tax bills. When the county discovered that it was undercharging many commercial customers due to missing tonnage data, it redesigned its billing system, resulting in nearly $2 million of additional annual revenue. That revenue can now be reinvested into new services, including food waste diversion.
These program fee examples show that there is no one-size-fits-all approach, but successful models for food waste reduction tend to share a few best practices. First, they align fees with clear behavioral incentives, either by rewarding composting or increasing the cost of waste. Second, they leverage existing billing structures, such as utility bills or property taxes, to simplify administration and increase compliance. Third, they combine strong program design with transparent public communication, helping residents understand how their fees support community-wide climate and sustainability goals. Ultimately, the most effective fee structures are those that strike a balance between financial stability, service equity, and environmental impact, all while reflecting the unique policy landscape of each jurisdiction.
Designing and Implementing Fees
Designing an effective fee to support food waste reduction requires a clear understanding of the program鈥檚 goals, the types of customers served, and the services provided. Rather than starting with the fee itself, successful jurisdictions begin by defining the desired outcomes, whether it is reducing landfill tonnage, increasing compost participation, or meeting climate targets. Then they begin to build a cost structure around those objectives. The basis for fee design should reflect the characteristics of the customer base, such as household size, business type, or property use, as well as the type and frequency of services delivered. For instance, some communities structure fees around container size or collection frequency, while others link them to property characteristics or embed them into utility bills. Regardless of the approach, fees work best when they are perceived as fair, easy to understand, and aligned with broader community goals. A well-designed fee structure not only ensures stable program funding, but also reinforces the behaviors that make food waste diversion successful.
Designing and implementing a new fee can be complex. It requires legal diligence, public engagement, and technical planning. But when done well, fees are a powerful tool to fund the food waste reduction programs that communities want and need. If your municipality is just beginning this journey, start with a clear understanding of your goals and your existing revenue structure. Define your program purpose, tie it to measurable outcomes, and explore all the public funding options available. Engage stakeholders early and often and make your case with clear data and visuals. Whether you are working with a modest pilot or a city-wide initiative, fees can be the lever that turns a great idea into a lasting program. | WA
Eugenia Manwelyan is a consultant at Raftelis, where she helps local governments implement environmental sustainability, resilience, and climate action initiatives. With more than 15 years of experience in the public and nonprofit sectors, Eugenia specializes in funding strategies, AI integration, and program implementation with a focus on food waste reduction and circular economy solutions. Want to explore how your community could use fees to fund food waste reduction programs? Reach out to Eugenia at [email protected] to schedule a
conversation.