Assessment

Introduction

The Solid Waste Authority of Palm Beach County (SWA) is a dependent special district responsible for developing and operating an integrated solid waste management system for Palm Beach County, FL.  The SWA is funded entirely by user fees, the largest source of which is the non-ad valorem special assessment.  Non-ad valorem means the assessment is not based on property value.

Through this assessment, which appears on the property tax bill for every piece of developed property in the county, the SWA collects 100% of the cost of disposal of waste generated by residential property and approximately 60% of the cost of disposal of waste generated by commercial property.  The balance of the funding comes from commercial tipping fees, electric revenue, recycling revenue, interest income, and other miscellaneous sources.  The following is a brief description of the SWA's assessment program.

History

The SWA's integrated solid waste management system was initially financed in large part by $420 million in revenue issued in 1984 and 1987.  The Bond Indenture of Trust required the SWA to implement a non-ad valorem assessment in 1990 in order to provide a stable and predictable revenue stream to meet the SWA's debt service obligations.

The Florida Constitution provides for the use of non-ad valorem special assessments.  The Special Act that created the SWA (Chapter 75-473, Laws of Florida, as amended) was amended to provide the SWA with the authority to assess all residential units, commercial property, and governmental property in Palm Beach County.

The SWA contracted with a consulting firm to design the methodology for establishing a system of equitable rates.  The SWA conducted two studies: the Residential Generation and the Commercial Generation Study.  The purpose of these studies was to determine the relative generation potential of the various types of residential and commercial property.  the rate structure was based on a statistical analysis of the data collected during these studies.

The SWA sent out a first class notice of intent, published notice of a public hearing, and conducted public hearings.  Based upon the comments received at the public hearings, the residential assessment was implemented relatively unchanged in 1990, and the commercial assessment was reworked to provide greater equity and implemented in 1991.

The SWA subsequently conducted new studies and the rate structure was amended in 1998.  The new studies were necessary due to changes in the waste stream resulting form the implementation of recycling and the separate collection of yard waste.  These studies can be viewed or downloaded below.

Residential Generation Study

Commercial Generation Study

Note: Free Software Needed to View or Download these documents.

Residential Assessment

Before October 1, 1990, owners of all improved property in the county paid for disposal, which is the cost to process the waste after it is collected, directly to their waste hauler or their municipality.  The SWA then charged tipping fees to haulers for each ton of waste delivered to an SWA facility.  The municipalities included the disposal fees in the rates they charged their residential customers, typically via a utility bill or incorporated in their ad valorem taxes.  Beginning October 1, 1990, the SWA began charging residential property owners directly for these costs through a non ad valorem assessment on the annual tax bill.

Residential properties are assigned to one of four categories: single family, mobile home, multi-family with four units or less, and multi-family with five units or more.  The assessment is based on the average annual tonnage as determined by periodic waste generation studies.  The average annual tonnage, as determined by the most recent Residential Generation Study, is presented in the following table:

Category	Garbage and Trash	Vegetation
Single Family	1.10	0.85
Mobile Home	1.10	0.58
Multi-family Combined	0.71	0.00

The Assessment rates are adopted by the Governing Board each fiscal year at a Public Hearing, and are calculated based upon the adopted budget.

The SWA has a second assessment to cover the cost of waste collection for owners of residential property located in the unincorporated area of the county.  This assessment is called the Mandatory Collection Special Assessment.  These properties receive collection service by private companies who are awarded contracts by the SWA based on a sealed bid process.

Municipal residents pay for waste collection services directly to their municipality either through their utility bill or their property tax bill.

Since the SWA receives all the funds for disposal of residential waste directly from the property owners, it issues "residential credits" to the waste haulers to offset the tipping fees they are charged when they deliver it to an SWA facility.  The credits are necessary to separate pre-paid residential waste from commercial debris subject to a tipping fee.  These credits are calculated by multiplying the number of units serviced by each waste hauler in each category by the average annual tonnage per unit as shown above.

Commercial Assessment

Unlike residential properties commercial properties are only assessed for the fixed cost of disposal and pay a tipping fee for the waste delivered to the SWA's facilities to cover the variable costs.  This policy was established because there are far greater variances in waste generation between like businesses than exist among residential properties and it is practical to quantify it; businesses contract with waste haulers and pay them based upon the number of containers, size of the containers, and frequency of pick up of the containers they need for their operation.  The fees paid the hauler include an amount to cover the tipping fee the hauler will be charged by the SWA, the collection costs, container rental charges, and any special services required.

Commercial properties are assigned to one of four waste disposal categories: high, medium, low, and non-generator.  The Commercial Generation Study determines the category that a specific type of business (restaurant, hospital, retail store, etc.) is assigned to.  What type of business exists on each commercial parcel is initially determined based upon the Property Appraiser's records and is validated and adjusted, if necessary, by the SWA's field staff.  For each category, the assessment rate per square foot is multiplied by the heated square footage of the building to calculate the assessment.  If an individual parcel contains activities that fall within multiple categories, for example a snack bar, which is a high generator, within a department store, which is a low generator, the square footage is apportioned between the various uses and billed accordingly.  A fifth category exists for agricultural property, which is billed at a flat rate per acre.

Governmental Assessment

While government-owned property is generally exempt from paying property taxes, it is not exempt from paying the SWA's user fees.  Like residential properties, government properties are assessed for 100% of disposal costs.  However, rather than determining categories based on the generation study, the non-residential governmental assessment is calculated like commercial property by multiplying the actual container size times the frequency of collection, times 134 pounds per cubic yard, times the actual disposal rate as determined in the budget process.  Government owned residential property (i.e. public housing) is assessed in the same manner as privately owned residential property.

Haulers receive credits for waste generated by all governmental property.

Disputes

The customer is notified twice a year of the amount that they will be assessed, first on the Truth in Millage (TRIM) statement, and second on the actual tax bill sent by the Tax Collector.  If the customer disputes the  information on the notice the SWA sends a field representative to the property to verify the basis for the assessment.  If an error is found, for example an office assessed as a restaurant, the assessment is corrected.  If no error is found, the customer is notified, and the customer has the right to go to a hearing.

Hearings are held twice a year and governed by an independent "hearing master".  If the customer still does not find relief he can pursue the issue further in the courts.

The annual deadline for appeals is January 31st and covers the assessment for the current fiscal year only.

If you would like to receive an appeals packet, email us and include your name, address, and a daytime telephone number.  You may also call (561) 697-2700 or (866) 792-4636 toll-free from southern and western Palm Beach County.  A customer service representative will contact you.

Flow Control

Flow Control means the ability of a governmental entity to control the disposition of waste generated within its boundaries.  For the SWA, ensuring that the waste generated in the county, and the associated revenue stream, is delivered to the SWA is essential to meeting the SWA's financial obligations.  Although the SWA was granted flow control authority by the Special Act, the United States Supreme Court in its May 1994 decision in C&A Carbone, Inc. vs. Town of Clarkstown declared that Flow Control Legislation violates the Commerce Clause of the United States Constitution because such legislation potentially infringes on interstate commerce.

With the SWA's ability to exercise legislative flow control rendered questionable, the SWA now relies on economic and contractual flow control.  The United States Supreme Court discussed the viability of such measures in Carbone.  Subsequent Federal Appeals Court rulings in favor of Smithtown, NY and Babylon, NY have validated the use of contractual flow control.

The SWA uses both financial and contractual mechanisms to cause waste to be delivered to SWA designated facilities.  Because residential and governmental properties are assessed for 100% of their disposal fees, and in order for their haulers to receive credits they must bring the waste to a SWA designated facility, all residential waste should remain in the county.  This is economic flow control.

The SWA franchises the collection of solid waste and recyclables in the unincorporated area, which includes nearly half of residential property and over one third of commercial property.  These contracts, which were entered into voluntarily and incorporate collection rates determined based on designated collection points and destinations, contain substantial penalties up to and including loss of the franchise for delivering material to non-designated facilities.  this is contractual flow control.

With these two mechanisms in place, the only portion of the waste stream that is potentially at risk is the commercial waste in the municipalities.  To minimize the risk, the Authority adjusts the commercial assessment to decrease or increase the tipping fee as local markets dictate.  In the ten years since the Carbone decision the SWA has not experienced any threat to its waste stream.