The Tbilisi City Council (Sakrebulo) approved on June 24 a controversial proposal by the mayor's office of capital city to tie monthly fee for waste collection services, to electricity bills starting from July 1.

According to the new system each household in Tbilisi will have to pay five Tetri (about USD 0.03) fee for waste collection for each kilowatt of electricity consumed by household each month.

Currently (before July 1) there is flat fee for municipal waste management services amounting to GEL 2.5 per family member in each month. The fee was increased from GEL 1.2 starting from January, 2011.

Although the new method of taxing for waste collection does not necessarily mean that the fee will increase for every household, on the whole the capital city municipality will benefit from the proposal as it will lead to increase of overall income received from the garbage collection services for about two-fold.

Households in Tbilisi consume about 800-850 million kilowatts of electricity annually, according to Telasi, an electricity distributor in the capital city.

Based on these figures, after enforcement of the new method of fee collection the Tbilisi municipality will be able to receive annually GEL 40-42.5 million from providing waste management services. But at the same time,half of the fee for the socially most vulnerable part of the population will be covered by the Tbilisi government.

Number of residents registered in the capital city, according to the Tbilisi Mayor’s Office, stands at 1,127,000, which means that collection of fee for waste management services should be about GEL 33.8 million in year under the flat GLE 2.5 taxing system; but an actual fee collection is much less.

According to figures provided by the Tbilisi Mayor’s Office, in the first four month of 2011 income from the waste collection fee from households was only GEL 7.2 million, which means that annual income may be around GEL 21.6 million.

Tbilisi’s 2011 budget envisages GEL 50.8 million funding for the municipality’s unit in charge of the waste management service.

The Tbilisi Mayor’s Office says that one of the reasons behind the new system is to improve collection of fees.

According to an explanatory note attached to the proposal there is a high rate of migration into the capital city and official data about number of registered residents in Tbilisi “does not correspond to an actual number of people” living in the capital.

Although the law obliges each citizen to register at an actual address where the resident lives, this provision "in most of the cases" is not observed, which makes it difficult to accurately count actual number of household members living on a particular address, according to the document.

In an attempt to secure collection of fees, a new rule was enforced from February, 2011, according to which a household has to pay electricity, water and waste collection fees through integrated, single bill, meaning that in case of a failure to pay waste collection fee or water consumption tariff, it will lead to cutting of electricity supply.

The authorities say that the new system is "socially just", because mainly families with high income consume more electricity.

But on the other hand many of those families with high income rely less on electricity, then those with lower income, because those households can afford to install at home central gas heating systems. 

The decision will hit most of all those about 15,000 households in Tbilisi, which have no gas supply in thier houses at all. It means that those families fully rely on electricity, including for heating purposes in the winter period, significantly increasing electricity consumption, hence increasing garbage collection fee too. The city authorities say that a special project will be developed for such families under which the Tbilisi government will co-fund building gas infrastructure in such neighborhoods to secure gas supply.

The opposition members of the Tbilisi Sakrebulo, however, say tying waste collection service fees to electricity bills is unjustified, will cause fee hike for most of the Tbilisi residents; they also criticize it because the proposal does not require any additional responsibilities for the municipality itself.

“Increase of fee has nothing to do with improvement of waste collection service and its management,” said Tina Khidasheli member of the Tbilisi Sakrebulo from the opposition Republican Party.

She also said that the proposed fee calculation method is unfair, which may lead to four, or even ten-fold increase of fee for some household, extensively consuming electricity. Khidasheli also called on the Sakrebulo not to hurry

Another controversy about the new system is related to legal issues, because there is a law on local fees, emended by the Parliament in December 2010, saying that a fee for waste management service per family member should not exceed GEL 3 per month. The new method of counting fee will lead to a situation wherein some households will have to pay more than GEL 3 per family member.
 
The same law, however, also allows possibility to differentiate fee based on various criteria, including, among others, household income and amount of other public utilities consumed by a household.