Work is underway on a $1.5 million transfer station project in Yarmouth that includes a pay-as-you-throw system next year and a new recycling compactor that will significantly reduce the town’s cost to transfer materials.

Under the pay-as-you-throw system, slated to begin when the project is finished in January, all residential property owners, including those who contract privately for curbside collection, will need to use town-issued bags to dispose of trash.

Locations of where the bags will be sold will be released in the coming months. Thirty-gallon bags will cost $2 each; bundles of 20 will cost $40. Fifteen-gallon bags will cost $1.25 and bundles of 20 will cost $25.

The money generated by bag sales will pay for the transfer station improvements. Once the project is paid for, revenues will offset the town’s trash hauling and disposal costs, as well as its recycling efforts, which are currently covered by property taxes.

A new trash compactor will replace the 30-plus-year-old equipment that’s in disrepair and a new recycling compactor will lower the town’s hauling costs by 80%, according to a press release from the town. It now costs Yarmouth $35 a ton to dispose of recycling.

“We are estimating that by compacting recyclables we will see a 5:1 reduction in the number of hauls, which should generate a $25,000 to $30,000 saving in transportation costs,” Public Works Director Erik S. Street wrote in an email.

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All transfer station users will drop off trash, recycling and food waste for composting in new spaces near the bulky waste disposal area. Recycling will be dropped off at a new recycling building.

Window stickers will still be required, but there will no longer be a $25 fee. The town council on Juy 7 was to consider a proposal to reduce the window sticker fee for 2023 to $2 per vehicle

Residential property owners who contract with Casella for curbside trash collection will also need to use town-issued bags. The money residents now pay Casella only covers the cost of collecting the trash and recycling curbside and hauling it to ecomaine for disposal, according to the town. It does not cover the costs Yarmouth incurs to have trash and recycling processed at ecomaine.

Residents who rent units in properties with fewer than 10 units will also need to use town-issued bags if they use the Transfer Station or have curbside collection. Residents who rent units in apartment complexes with 10 units or more will not need to use town-issued bags, as the owners of their properties handle trash disposal.

Pay-as-you-throw has been proven to drive up recycling rates. It is used by 139 other communities in Maine, including Cumberland, Falmouth, Pownal, New Gloucester, Bath, Brunswick, Portland and South Portland.

The council unanimously approved the transfer station improvements and pay-as-you-throw system in 2019, after more than five years of discussion and dozens of public meetings.

Public Works Director Erik Street stressed that the system is a more equitable way of distributing the town’s rising trash and recycling disposal costs. The town pays $79.50 per ton to dispose of trash at ecomaine, which is more than twice as much as it costs to dispose of recycling, which costs $35 per ton.

Currently, all residents pay for the town’s trash disposal costs out of their property taxes, no matter how much they recycle.

Transfer station operations will continue as usual while the work is being done.