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February 7, 2013 - 9:26am

Tom Houseknecht asserts new trash plan an attempt to skirt property tax cap

posted by Howard B. Owens in batavia, garbage collection.

From Tom Houseknecht:

There is one major problem with Mr. Molino’s most recent attempt to sell city council and the voters of Batavia on removing garbage collection from the budget and replacing the tax with a user fee. In his comparison of costs, he claims that maintaining the current trash system would require a property tax increase from the current $10.71 to $11.14 per thousand. What he does not tell anyone in this comparison is that this increase cannot happen without a public vote by the citizens of Batavia (with 60% in favor) because of New York’s 2% property tax cap. This means $10.92 is the highest the tax rate can rise to without a vote of the citizens. Many more cuts would be needed in the city budget to keep the taxes under the cap, perhaps including council’s 75% pay increase.

What I feel is happening in this change of trash/recycling collection is this – If Mr. Molino removes the trash process from the budget (effectively lowering the budget by approximately one million dollars) he is able to avoid dealing with a property tax increase of more than 2%. An increase higher than 2% would cause council to put the city’s budget out to public vote. The only other way to keep the tax rate below a 2% increase would be to make big cuts elsewhere. The biggest perceived adverse side affect to this proposal is the impact on the ARC as their collection system, that has served the city well for 28 years, is not geared to the new user fee based system. Therefore, with little time in which to craft their response to the city’s bid specification, the ARC was not the lowest bidder.

With the sideshow of the battle for the ARC and the local jobs they provide, Mr. Molino has attempted to paint his new proposal as an overall savings for the taxpayers. The problem is that we are being misled into thinking that the majority of taxpayers will experience lower costs. The reality is the lowest valued properties will pay an increased amount and the highest valued properties will receive the savings, while the majority of taxpayers will pay more in total.

I now believe that the main reason for this proposal is that it allows for minimal budget cuts, a city council raise and no public vote while passing the bulk of the increase onto the city’s lowest income citizens. When compared to what you paid in 2012, if you are assessed at $60,000, the increase in what you pay out between your taxes and the new user fee at the smallest tote size will be an additional $64 per year, however if you are assessed at $200,000 you will save $183.

Under the proposed plan, everyone assessed below $96,000 will be paying more than they did in 2012. Everyone assessed higher will receive a savings. This break-even point on assessment will move somewhat if a higher tax rate is considered as opposed to the proposed rate with user fee, but should not be compared to a rate that is higher than the city will be allowed to pass without a vote of the citizens.

I’m not disputing the fact that trash collection is an expensive service that needs to be scrutinized as part of the budgeting process. I’m also not opposed to a pay increase for council members. What I take exception to is the ruse that a user fee based system will save the majority of taxpayers money. The “Fact” sheet on the city’s own Web site makes the ludicrous claim that “close to 90% of the city's properties will experience lower costs.” Whether this is a distortion, a misrepresentation, a mistake or a lie, it is far from the truth. If it is true that the average home is assessed at $80,000.00 (as quoted from Mr. Molino’s budget presentation of 1/7/10), the majority of city taxpayers will be paying more. Whether you call it a user fee or a property tax, it is a tax that will impact those who can least afford it the most.

The trash collection/user fee issue is a ruse for the fact that the city is currently proposing an overall budget that will cause them to exceed the 2 percent property tax cap. Their proposed solution puts a greater burden on the city’s lowest income residents, grants council a 75% salary increase and throws one of our finest local human service agencies and their employees under the bus. The plan is being promoted with distortions of fact. All residents need to hold council and the city manager accountable.

As this is my second letter regarding this issue, I again want to state that I appreciate the efforts of our city leaders, especially in these trying economic times. My purpose in writing is not to attack the service of our council members, but to suggest that the facts are being presented in a way that may not be clearly understood by all taxpayers. I am a proponent of the ARC and I believe they are caught in this controversy because of city management’s goal to remove trash collection from the property tax in an effort to avoid a budget battle.

Thomas Houseknecht

Christopher Putnam
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Sounds about right for the city. Lie to, or mislead the people that dont have time to puzzle this out like Mr. Houseknecht has, because they are too busy working to make ends meet. Our little city has become a mirror of Washington DC, corrupt, lying, cheating, and self serving. Congress votes themselves a raise and we have no say. The Council votes themselves a raise and we have no say.

YOUR NOT FOOLING ANYONE ANYMORE!

YOUR NOT SERVING US, YOUR SERVING YOU!

IMPEACH MOLINO!

Eric [Rick] von...
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Tom, very well put. thanks for your diligence!!

Robert Brown
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Brilliant! Thank you Tom.

tim raines
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According to Mr Houseknecht the ARC bid is $656,126.00 higher than the Allied bid because ARC didn't have enough time to "craft" their bid.

All the bid companies where given months to submit their bids and ARC was given the most time of 4 bidders.

Why is ARC, a non profit, the highest bidder?

They should have been the lowest.

The bottom line > City of Batavia residents will save $1,200,000 from the current ARC contract over the next 5 years.

Competition equals lower prices for everything.

Cheryl Wilmet
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Now it all makes sense to me why they don't want to budge on their desire to stop using ARC. Also, when explained in simple language by Mr. Houseknecht, it definitely will be a substantial increase in what a lot of people in the city pay now. Keep pushing maybe they will finally notice most do not want a new system.

Jason Crater
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Thank you sir. Your efforts are appreciated. Hopefully we'll get a response from the City...

Mark Potwora
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Mr.Houseknecht..Why do you think that some should pay more for trash than others..It is totally irrelevant of what someones property is worth...Don't those who have the higher valued property have a voice in this....This is just your opinion that is about the 2% tax cap...It also goes the other way ..Once they lower the tax rate to 8.92 the 2% cap will be less in the following years. So they will raise taxes less..At first this whole argument was about keeping ARC. .Now its turning out to be about some not wanting to share the costs equally. ..Just because you have property assessed at 150,000 dollars doesn't mean you can afford a tax increase any more than someone assessed at 70,000 dollars.....Let ARC keep the contract but spread the cost evenly between all property tax owners...Trash does not belong in you tax bill..just like the water bill does not belong in your tax bill...Whats your answer to controlling the city budget..How do you stop these yearly tax increases...Why should someone on a fixed income but live in a house with a high assessment who only puts outs one bag a trash a week have to subsidize someone with a lower assessed house putting out 6 bags a week....

John Roach
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Take trash out of the budget and off property taxes. End city trash contracts and let everyone sign up with who they want. Want ARC fine. Want another compny, fine. You pay for who and what you want. The city should stay out of it.

Jodi Coburn
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I am with John on this. We should be able to choose who we want to do business with. If we are no longer getting this service with our tax dollars what business of the city's is it who picks up our trash. As long as we are taking responsibility for it and not leaving it around to stink up the city and attract vermin we should be able to choose. If the city can work out a deal with a company and it works for you fine but we should have the option to opt out and procure our own service.

Craig Houseknecht
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The idea of having multiple private trash companies would not work. A company could not afford to stay open, or would not have enough incentive to stay open doing business in that fashion. With that kind of equipment and overhead to provide such a demanding service as trash collection with only a fraction of the small town of Batavia's customer base it would never work. Thats why there is only one trash company per neighborhood in virtually every neighborhood in America. The city of Batavia should be focused on boosting its image, getting more people working in Batavia and more people moving here as well. To shut down the ARC's trash collection would do nothing but to hurt the city and its people in the long run. It is important to note that our City of Batavia loses money in more ways then just what is put out on the budget. Diminishing population, lower property values plus diminishing city tax revenues are far more dangerous to the city then the the extra cost of the ARC, and they are all ultimately caused by decisions such as this.

Mark Potwora
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How does the town of Batavia do it...they have a smaller population...how do you get more people to move here with a 11 dollar per thousand tax rate...

Ted Wenzka
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Mr. T. Houseknecht,
I applaud you. I believe you more than any other comments on this piece. You are a successful businessperson and one for many years. It takes a successful businessperson to see through all the smoke and mirrors. I firmly believe your assessment is correct.

Howard B. Owens
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Some points that should be made, I think.

-- If the city budget need to raise taxes over the amount permissible under the tax cap, it would not take a vote of the people to do it. The city council could override the tax cap with a 60 percent affirmative vote of the council.

-- The tax cap is not based on the tax rate. It's based on the tax levy. In any year, a local taxing jurisdiction cannot raise the levy more than two percent.The tax rate can go up 25 percent if the levy doesn't go up by more than 2 percent. (if such a thing is even possible, just exaggerating to make the point that it's the levy, not the rate that matters).

-- And two percent doesn't mean two percent. The tax cap formula is exceptionally complicated and the actual levy could go up four or five percent if certain criteria are met, or could go up much less than two percent in other circumstances. Calling it a two percent cap on taxes is really a misnomer.

-- Would the city be forced, if this wasn't on the table, to go over the tax cap? Maybe, maybe not. It would depend on the state formula, and it might also depend on whether the city was willing to make other cuts or draw more from its fund balance.

-- One bit of information I forgot to include in my story from last meeting: Molino said by city staff calculations, some 65 to 75 percent of city residents will be paying less under the new system. I'm not sure how he derives those numbers, but that's what he said.

-- If this doesn't go through, the city will not be able to pass a budget on time. What that means exactly, I'm not sure, but the budget will need to be reworked and who knows what direction the council will decide to go in.

John Roach
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The problem Tom did not cover is what do you do if we keep cost trash pick up hidden in the property taxes. Leaving it in will result in about an 11% increase in taxes, but we are only allowed a 2% increase.

And the increase is not phony. New York State has mandated the City increase the amount it has to pay Albany for the retirement fund. And the cost of health care premiums has gone up. Then add the negotiated salary increases and overall cost of good the city has to buy, and you about 11%.

Now if you drop the Economic Development Coordinator ($10,000) and canceled the Council pay raise (about $2,000)and kept in the cuts to police and fire training and overtime, you save about 3%. That leaves 6% to cut. The only way to get that, which is about $300,000, is to cut services. You would not be able to replace the 3 police lieutenants with new officers and might not be able to hire new fire fighters . Maybe somebody will retire and then you could hire, but bottom line, public safety is the only big money you can cut. Police and Fire are 50% of the total City Budget.

To me, to keep the trash in the property taxes just so some get to pay less than others, at the expense of public safety is not smart. Mark is right, if you are determined to keep ARC, as it is, then just bill everyone the true cost and be done with it.

Mark Potwora
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Mr. Houseknecht said An increase higher than 2% would cause council to put the city’s budget out to public vote.He also said ...This break-even point on assessment will move somewhat if a higher tax rate is considered as opposed to the proposed rate with user fee, but should not be compared to a rate that is higher than the city will be allowed to pass without a vote of the citizens... Howard reported that isn't true..If the city budget needs to raise taxes over the amount permissible under the tax cap, it would not take a vote of the people to do it. The city council could override the tax cap with a 60 percent affirmative vote of the council.
This was a major point in Mr. Houseknecht reasoning as to why Malino was trying to get rid of the ARC..So then what is your point Mr. Houseknecht..It will not take the vote of the citizens ...Alot of misinformation going on here...

John Roach
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Howard is right, Tom was wrong. Local governments going over the cap does not mean it goes to a public vote. The Council could vote to go over the cap with a 2/3 vote.

dennis wight
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Does this mean water rates are going up as well?

http://th-www2.thedailynewsonline.com/classifieds/ads/29780908/

Thomas Houseknecht
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The tax cap was one portion of my research and I must accept responsibility for my incorrect assertion that a public vote would be required. Mr. Owens is correct in that the governing body, with a 60% vote can exceed the tax cap. As opposed to the public voting on it, our elected representatives would have to go on record with their vote to exceed it. The public vote only applies on school taxes.

I am not necessarily opposed to the removal of trash collection from property taxes. I am opposed to it being presented as a savings for nearly 90% of city residents, when that is clearly not the case. The fact remains that removing it from property tax and adding it back as a user fee is a benefit to the higher assessed homes and commercial properties in the city and an additional burden for the lower assessed properties. The removal of it from property tax and the impact that the change will have on all property owners should be fully understood before council negatively impacts the majority of their constituents.

Mr. Owens further notes that Mr. Molino stated at the last council meeting that 65 to 75 percent of city residents will save money under the new plan. I believe this statement by Mr. Molino to be false as well as contradictory to the fact sheet posted on the city’s website that puts the number closer to 90 percent, yet another false number. The fact remains that any resident with an assessment less than $96,000 will pay more than they did in 2012 under the proposed plan and those with assessments above that number will pay less. I am making an assumption that the majority of homes are assessed below $96,000 as my research put the average assessment at approximately $80,000.

For total transparency here, I became involved in this issue as an advocate for the ARC. As a commercial property owner in the city, I would personally benefit from the lower rates as proposed. As I researched the issue, I discovered the misrepresentation to the city taxpayers that the majority would save money. Regardless of how the trash issue is resolved, no decision should be made based upon false or misleading information. I accept responsibility for the error in my letter and I would like to go on record to state that it was not my intention to mislead anyone with my statement. I stand behind the balance of the research and conclusions I have drawn in my letter.

John Roach
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Dennis,
The water rate will go up. Our water rate is really set by Monroe County. They set the rate Genesee County has to pay for water and it gets passed down.

The only way not to raise water rates is to take money out of property taxes to make up the difference. That money does not stay in Batavia, it goes to Monroe County. The $2.00 extra does stay here and is used to help pay for water line repairs.

Howard B. Owens
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Mr. Houseknecht has a valid point, as we saw from the chart we published the other day, that property owners with a lower assessed value will pay more under the proposed system.

We don't know if that's 50 percent of the property owners, or 60 percent or 40 percent, without doing a more detailed analysis of property tax records. Chances are it's on the lower end because just a few higher valued property would bring the average assessed value up quite a bit.

The other question is, should property owners with a higher assessed value continue to subsidize garbage collection for the rest of us? Mr. Houseknecht might be willing to be Warran Buffet on the issue, but not every property owner would want to do that nor can necessarily afford it even if they have the higher assessed value property.

Mr. Houseknecht's general assertion that the proposed changes help the city circumvent the property tax cap has an element of truth, I believe. But the property tax cap is a poorly drafted law that doesn't address the real issues behind high property taxes (I'm looking at you school districts). Further, without the proposed changes, the city wouldn't be just looking at busting the tax cap, but also cutting services, such as police and fire. I don't look at the proposed changes as some sort of backdoor attempt to avoid the tax cap (though as a practical matter it does avoid the tax cap), but rather an attempt to get a major expense out of the city budget and deal with a long-time complaint of many city residents (paying taxes for garbage collection).

I'm not clear on what supporters of Genesee ARC would have the city do otherwise? The current system is flawed and untenable. So what are the valid options?

John Roach
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I do not want Mr. Houseknecht to help pay for my trash pickup and I do not want to pay for somebody else.

Dave Olsen
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The bottom line in my humble opinion should be that all this should be the choice of the voters. The entire budget should be approved by the taxpayers every year. Elected bodies in NY State have assumed the position of making choices about where our tax money goes because that's why we elect them. I cannot agree with that assumption of power. They are elected to be our representatives and the oversight of government functions and try to facilitate solutions to making it more efficient. The PEOPLE make the decisions about how their money is spent. They just present their plan (budget). I'm sorry if that makes an elected officials role harder, if you don't like it....well then....don't go around in an election year, asking for money, support and telling everyone how smart you are and how a great a job you'll do. Take back your government, Batavia, it is yours you know.

Dave Olsen
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Craig; I can agree "Diminishing population, lower property values plus diminishing city tax revenues are far more dangerous to the city then the the extra cost of the ARC,..." I'd say that anyone with any common sense would agree. However, saying that multiple trash pickup companies wouldn't work is not correct. I can think of at least 3 other companies besides ARC who currently operate with 15 or 20 miles of Batavia. They wouldn't have to start a new business, they'd just add on routes, no big problem. It is my belief anyways that judging by the support ARC is getting from a lot of Batavia citizens, many will have them continue to pick up trash. Others won't, that's the beauty of a free market, and what I believe will help the city and county and even ARC the most. Free market choices, not government mandates jammed down everyone's throat. Personally, For what it's worth, I think ARC is a great organization and I am pulling for their continued good works, but again mandates are bad.

John Roach
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Craig,
Waste Management already serves a lot of people in the Town of Batavia and I am told in the Town, you can hire anyone you want. Please tell me why it can work in the Town and not the City. And they do not have to start from square one.

ARC would not have to buy any new equipment or partner with another company, helping keep their price down, and you could still have them if they meet your needs.

Kyle Couchman
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As for alternate ideas I like how locally the per bag trash/trash tag system was dismissed as too complicated. I cane from Ithaca, the city of ithaca has a much larger permanent poulation than we do here in Batavia. On top of that we had 2 major colleges. The last year I lived there the incoming freshmen between Cornell University and Ithaca college was about 22,000. Now they have a trash tag system there a 20lb bag limit per tag. Tags were available at every convenience store, grocery store city hall and even some places like coffee shops as a convenience to the public. Now teaching a third of the population every year plus the few hundred that came in and went out each semester wasn't that hard. I cant imagine locally we'd have even half of the complications of that.

With that plan everyone that wanted garbage cans or has them can continue to do so, no need for major investment on bins and such and we can keep the current recycling bins that were in use or maybe make them a lil bigger. Still cuts costs under the current plan, Jason can take the garbage tax and play games with the monies still and ARC doesnt have to factor in new bins and get new trucks lowering their costs and lowering their bid. Everyone pays fair share as its per bag.

so once again tell me where the extreme complexity is that makes this worse than what City council wants to ram down our throats now?

John Roach
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A per bag system would have work here. And if tied into a good recycle program would have been even better.

Kyle Couchman
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OMG John agreed (falls to the floor in a feint) lol

SABRINA BRINKMAN
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I do contracting for my job for the Federal Govt. I have been doing it for a long time. There are certain points that people are forgetting here. This solicitation/RFP was set aside for the lowest bidder. By the requirements of the solicitation, lowest bidder wins. PERIOD. ARC was given the opportunity to bid on this project as a priority bidder and for whatever reason didn't. Either they couldn't meet the specs of the solicitation/rfp that the city wanted or they couldn't put together the bid and didn't bid. I can't remember which at this point. Maybe it was a little of both. But the point was they didn't bid as that priority bidder. The city didn't HAVE to meet with them about this but did in an effort to continue the relationship. ARC has been given the longest period of time out of all of the bidders to submit their bid. They still came in with the highest bid. I am unclear at this point if they can still meet the requirements of the solicitation/rfp. Seems to me that the city said they couldn't (maybe something I read and I thought they can't meet it) however, ARC says they can. I have bidders tell me every day they can meet the requirements of a solicitation. But when I look at their bids, they can't. They are not even close. I have to be the one to tell them that and debrief them on that. The next thing you have to consider IF this was not a a lowest bid contract (which it is a lowest bid contract) is PRICE REASONABLENESS. Is it reasonable to pay a million + over the lowest bidder for this company? Yes they employ employees that are disabled. I feel for them, I really really do. However, there are rules and regulations that the city has to follow in the bidding process. We shouldn't just overlook them because it is ARC. ARC had ample opportunity to meet the specifications and put together a bid. They didn't. The city had to do their thing and bid this and put it out that day when no bid was turned in. So what. We are supposed to wait for ARC to turn in a bid? No bid, turn it around and get it out the next way as soon as possible. Has anyone considered that maybe these employees could be picked up for employment by the new company? There isn't anything preventing ARC from initiating a contract or an agreeement with the new company to employee these people. Not sure how the city rules are. In federal contracting, the new company that picks up the contract has to offer the position to the current employees. Right of first refusal. There is a FAR (Federal Acquisition Regulation) clause that covers that. These are just some of my observations from someone that reviews bids for a living. The points I want to make here are the bidding process has appeared to have been followed. ARC was given priority consideration and failed to turn in a bid because they couldn't meet the specs or needed more time (whatever the reason was). The city was not obligated to give them more time. There are time limitations when doing the bidding process. The process was then turned to an open competitive bid for the lowest bid wins. ARC submitted a bid and submitted the highest bid. ARC's bid is not reasonable when considering the other bids submitted. You can't justify the additional costs for ARC when compared to the other bids.

Mark Potwora
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Seems like alot of misinformation being put out there..I hope all on city council realize all the facts in this and vote accordingly.. A million dollars over the five years period is a huge amount of money . ......Great insight on the bidding Sabrina..

John Roach
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Nice job Sabrina.

Robert Brown
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More trash talk...

Let's step back and start with a problem statement then rationalize a solution for garbage collection and recycling in Batavia.

Problem: Funding the current garbage collection system in the City of Batavia is unfair on several fronts. Basically, costs are buried in the city budget which is funded through property taxes. Not all properties are required to pay property taxes and some properties that do pay taxes do not use the subsidized garbage collection system. Property taxes are driven by assessed value which has no correlation to volume of trash production or recycling. Inequities inherent in the current system allow some to dispose of trash for free or at a cheaper rate than others. Thus, some property tax payers are essentially subsidizing trash removal for their neighbors.

Solution: The only fair solution is a pay per use based system. That would require removing garbage collection from the city budget and completely dissociating usage fees from assessed property value.

OK, now how should a pay per use system be implemented? The proposed tote system is not the answer to the problem as it does not provide a 100% fair solution.

As Kyle Couchman (and others in previous threads) suggested a true pay per bag system is the solution. Coincidentally, even the proposed tote system had a caveat for paying per bag: "For residents requiring additional capacity, additional “bag tags” will be sold for $2.50 at City Hall." Here's the link to the tote system proposal for reference:

http://www.batavianewyork.com/documents/ProposedRefuseRecyclingProgramPr...

As Kyle pointed out, Ithaca uses a true pay per bag system so why not see exactly how it works there? Here's a link for Ithaca's general guidelines:

http://www.ci.ithaca.ny.us/departments/dpw/streets/solidwaste.cfm#collec...

And here's a link on tag costs and where to get them in Ithaca:

http://www.ci.ithaca.ny.us/departments/chamberlain/index.cfm#trashtags

The beauty of the system is that you truly pay for what you use - no monthly contracts, no freebies, no big deal. Simple. If you don't want to use it you don't. If you want to haul your trash somewhere yourself or partner with a friend or work with a contractor who uses totes or a dumpster or is cheaper, go for it.

And recycling is FREE! I'm assuming the collection company gets to keep all revenues generated from recycled products and therefore can keep garbage collection costs lower. YEA!

Even if Batavia decided there should be a fee to collect recyclables we could provide free drop off sites. Check out Portland Oregon - one of the most environmentally conscious cities on the planet that has free recycling centers everywhere (and by the way, Portland is huge compared to Batavia and only collects garbage biweekly).

Yes, there are logistics to work out for the city to acquire tags, distribute them to vendors, and manage the money flow. If that's the only city involvement we'd have a wonderful thing (or at least a pretty darn good thing).

We're not reluctant to change - we just want a fair solution.

Mark Potwora
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Well said Robert...hopefully if this whole thing goes down in defeat...Your plan B should be put on the table for a vote....

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