IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Alan Ziegler, Nicolas Bene, :

Lissette Chevalier, Jose Munoz, :

and Efrain Caban, Individually and :

on Behalf of all Similarly Situated :

Persons :

:

v. : No. 169 C.D. 2018

: Argued: December 13, 2018

The City of Reading, and Reading :

Area Water Authority :

:

Appeal of: The City of Reading :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

OPINION BY JUDGE WOJCIK FILED: August 14, 2019

This case returns to us following our remand to the Court of Common 

Pleas of Berks County (trial court) in City of Reading v. Ziegler, 142 A.3d 119 

(Pa. Cmwlth. 2016). In this appeal, the City of Reading (City) challenges the order 

of the trial court entering declaratory judgment in favor of Appellees (Residents)

1

that the City’s residential curbside recycling fee is inconsistent with the Municipal 

Waste Planning, Recycling, and Waste Reduction Act (Act 101).2 The City argues

that the trial court erred or abused its discretion by improperly shifting the burden to 

the City to defend its recycling fee; capriciously disregarding competent evidence 

 

1 The Residents are Alan Ziegler, Nicholas Bene, Lissette Chevalier, Jose Munoz, and 

Efrain Caban, individually and on behalf of all similarly situated persons. 

2 Act of July 28, 1988, P.L. 556, as amended, 53 P.S. §§4000.101-4000.1904.
2

that the City complied with Act 101; considering evidence of avoided costs of 

tipping fees; finding that any surplus of fees is inconsistent with Act 101; and 

allowing the Residents to alter their claim. For the reasons that follow, we vacate

and remand for further calculations. 

I. Background

The City is a third class city located in Berks County with a population 

of over 10,000 residents, operating under a home rule charter.3, 4 The Reading Area 

Water Authority (RAWA) is a municipal authority created under the Municipality 

Authorities Act.5 The City delegated the responsibility for solid waste planning and 

plan implementation under Section 303(d) of Act 101, 53 P.S. §4000.303(d), to 

RAWA. The Residents either reside or maintain a place of business in the City and 

have paid recycling fees to the City or RAWA. 

Under Act 101, cities of the third class operating under a home rule 

charter with populations over 10,000 are required to implement a recycling program. 

Section 1501(a) of Act 101, 53 P.S. §4000.1501(a). Pursuant thereto, the City 

enacted ordinances establishing its recycling program. In March 2014, the City 

revised its recycling program by enacting Ordinances 20-2014 and 21-2014, which 

are the subject of this appeal. 

 

3

See 123 The Pennsylvania Manual 6-5, 6-7, 6-46, 6-57 (2017); Emert v. Larami 

Corporation, 200 A.2d 901, 902 n.1 (Pa. 1964) (“Courts will take judicial notice of geographical 

facts such as the county in which a town or city is located.”) (citations omitted).

4 The City is designated as financially distressed under the Municipalities Financial 

Recovery Act, commonly referred to as Act 47, Act of July 10, 1987, P.L. 246, as amended,

53 P.S. §§11701.101-11701-712. 

5

53 Pa. C.S. §§5601-5623.
3

Ordinance 20-2014 amended Chapter 496, Part 2 of the City’s Code of 

Ordinances (Code), which pertains to the storage and collection of solid waste. 

Reproduced Record (R.R.) at 1031a-34a. Specifically, it eliminated a separate 

recycling fee and instituted a “Curbside Waste Collection Fee” (Curbside Fee) to 

cover the combined costs of collecting municipal waste,

6

recyclable materials,

7 and 

organic waste.8 

Ordinance 21-2014 amended Chapter 212 of the City’s Code governing

fees by setting the Curbside Fee at $303.10 per property per year. R.R. at 1036a37a. Imbedded in the Curbside Fee is a service fee for recyclables of $91.83

(Recycling Fee). The Recycling Fee applies to owners of residential properties with 

four or fewer units. Although owners are permitted to opt out of the City’s curbside 

 

6 The Code defines “municipal waste” as 

Any garbage, refuse, industrial lunchroom or office waste and other 

material including solid, liquid, semisolid, or contained gaseous 

material resulting from operation of residential, municipal, 

commercial or institutional establishments or from community 

activities and which are not classified as residual waste or hazardous 

waste as herein defined. The term does not include source-separated 

recyclable materials or organic waste.

Section 496-201 of the Code. 

7 The Code defines “recyclable materials” as “[t]hose recyclable materials specified by the 

City for separate collection in accordance with this Part. Such materials may include, but not be 

limited to, aluminum cans, ferrous and bimetal cans, glass containers, plastic bottles and 

containers, mixed paper, white goods, major appliances, televisions, tires and large auto parts.”

Section 496-201 of the Code. 

8 The Code defines “organic waste” as “[l]eaves, garden residues, grass clippings, 

shrubbery and tree trimmings and similar materials.” Section 496-201 of the Code.
4

municipal waste service by securing the services of a private hauler, they are not 

permitted to opt out of the City’s curbside recycling service. R.R. at 1032a-33a. 

In June 2014, the Residents filed a class action complaint against the 

City and RAWA (collectively, the City), challenging the Recycling Fee. In Count

I, the Residents sought a declaratory judgment that the Recycling Fee is “in violation 

of the laws of the Commonwealth,” namely, Act 101 and the Solid Waste 

Management Act (SWMA).

9

 R.R. at 17a. In Count II, the Residents sought a 

preliminary injunction enjoining the City from billing for current or future Recycling 

Fees and from pursuing the collection of any Recycling Fees currently outstanding. 

Id. In Count III, the Residents sought compensatory and punitive damages as well 

as reasonable attorney fees. Id. By joint request and agreement of the parties, the 

trial court considered only Count I and deferred disposition of the other two counts. 

On December 5, 2014, the trial court ruled that the Recycling Fee was 

permissible and entered an order granting judgment in favor of the City. The trial 

court later amended its order to facilitate interlocutory appeal to this Court. 

On appeal, an en banc panel of this Court vacated the order and 

remanded the matter to the trial court for further analysis consistent with our recent 

decision in Waste Management of Pennsylvania v. Department of Environmental 

Protection, 107 A.3d 273 (Pa. Cmwlth. 2015). In particular, we directed the trial 

court to consider whether the City’s Recycling Fee will have a negative impact on 

the recycling program’s financial self-sufficiency, as that term is used in Act 101, or 

a deleterious effect on the efficiencies of the City’s recycling program. The remand 

also contemplated input on these questions from the Department of Environmental 

Protection (DEP).

 

9 Act of July 7, 1980, P.L. 380, as amended, 35 P.S. §§6018.101-6018.1003.
5

On remand, the trial court interpreted this Court’s opinion “to mean that 

if the [R]ecycling [F]ee is permitted without limits, it will relieve the City of an 

incentive to increase the program’s efficiency and pursue other appropriate sources 

of funding.” Trial Court Op., 1/2/18, Finding of Fact (F.F.) No. 3. “[W]hether 

recycling fees violate state law depends upon the particular implementation and 

amount of such fees because ‘the ultimate financial self-sufficiency of the 

[recycling] program’ and making sure the program is ‘as efficient as it could be’ are 

. . . ‘obvious purposes of Act 101.’” Trial Court Op., at 8 (quoting Ziegler, 142 

A.3d at 130). “If a recycling fee works against those purposes, it is inconsistent with 

Act 101 and thus preempted.” Id. The trial court then held additional evidentiary 

hearings and considered briefs and arguments of the parties. 

Based on the evidence and arguments presented, the trial court found 

that Section 496-208 of the Code, as amended by Ordinance 20-2014, provides for 

the Curbside Fee to be set as follows: 

The Director of Public Works shall submit an annual 

report by October 1 to City Council detailing projected 

expenses and revenues for the upcoming year and 

recommend a service fee to cover all costs associated with 

the collection and removal of all curbside waste. The 

report shall specifically detail the amount of the curbside 

waste fee that is imposed to cover the costs associated with 

the collection of municipal waste, which shall be used to 

determine the amount of the fee imposed upon owners of 

[the properties that permissibly opt for private collection 

of municipal waste]. 

F.F. No. 8 (emphasis added). Section 212-136 of the Code, as amended by 

Ordinance 21-2014, sets the specific fees each year and currently describes the fee 
6

variants more clearly as “[c]ombined billing rate for municipal trash and recycling 

service” and “[b]illing rate for recycling service only.” F.F. No. 9.10 

The trial court found that DEP does not review municipal recycling 

programs to assess self-sufficiency or efficiency, and has no opinion as to the City 

recycling program’s efficiency level. The Berks County Solid Waste Authority 

likewise does not play a role in reviewing or assessing the City’s recycling program 

and has no opinion about the City program’s efficiency. The City has never formally 

asked DEP or the Berks County Solid Waste Authority for advice or assistance in 

operating or assessing its recycling program. The City has not conducted its own 

comprehensive studies or analyses of recycling program options or efficiency. To

the contrary, over the course of Court proceedings on remand, the City repeatedly 

discovered additional and sometimes inconsistent and unclear information about its 

own program costs. F.F. Nos. 10-13.

DEP’s contribution to municipal efforts toward recycling program selfsufficiency consists of a single technical report, Building Financially Sustainable 

Recycling Programs, dated April 2005, and other technical studies such as one dated 

January 2015, concerning the feasibility of the City’s baler for processing recycled 

paper. F.F. No. 14. DEP also issued the “DEP Act 175 Recycling Program Plan, 

July 2004 Working Draft.” F.F. No. 15. This document provides commentary 

explaining several perspectives on the concept of program self-sufficiency:

[A] local program can be understood as self[-]sufficient if 

its economic,social, and environmental benefits exceed its 

costs, whether or not all of these costs and benefits are 

 

10 In February 2018, the City enacted Ordinance 6-2018 amending Chapter 496, Part 2 of 

the Code clarifying that the Curbside Fee only covers the costs of its recycling program “that 

exceeds the amount available through Act 101 grants, the marketing and sale of recyclable 

materials, and any other Act 101-approved revenue source.” See Appellant’s Brief, Appendix F. 
7

reflected in the municipality’s budget. At the local level, 

considerable benefits are experienced, even if they are not 

all reflected as direct recycling benefits on the 

municipality’s balance sheet. Finally, and more narrowly, 

a local program can be understood as self-sufficient if its 

economic benefits to the municipality’s budget are equal 

to or exceed its costs to the municipality’s budget.

F.F. No. 15. This document emphasizes assessing self-sufficiency by taking into 

consideration costs and benefits that may not appear on balance sheets, including 

“the avoided costs of disposal and tax revenue,” and further notes that a program’s 

income includes “proceeds from the sale of recyclable materials, fees and avoided 

disposal costs, where they can be realized.” F.F. No. 16.

The City operated its recycling program “in house” from 2014 through 

February 2017. The City’s funding for the recycling program mainly came from the 

Recycling Fee, periodic grants under Act 101 and the marketing and sale of 

recyclable materials. In 2014 and 2015, the Recycling Fee was $91.83 per property;

in 2016, it was $95.04. The City recouped approximately $2.3 million of its 

recycling costs through the annual assessment. The marketing and sale of recyclable 

materials accounted for approximately $100,000 per year. Grant money varied by 

year and was not available every year. See F.F. No. 17, 18, 22. 

According to the City’s ledgers, the City’s recycling program generated 

a surplus for the years 2014-2016: 

Year Costs Grants Sales User Fees Surplus

2016 $2,140,859.00 $7,815.00 $76,997.00 $2,529,117.00 $473,070.00

2015 $2,295,019.00 $127,515.00 $91,342.00 $2,324,947.00 $248,785.00

2014 $2,323,304.00 $98,682.00 $110,221.00 $2,388,891.00 $274,490.00
8

See F.F. No. 18. The trial court found that in each year from 2014 through 2016, the 

user fees collected, standing alone, without including grants or sales of recyclables, 

exceeded the total costs of the City’s recycling program. 

However, in prior years, the recycling program ran a deficit. 

Specifically, in 2013, the program ran a deficit of $57,854; a deficit of $958,914 in 

2012; and a deficit of $468,253 in 2011. In 2010, the program operated at a surplus 

of $104,127. The trial court noted that it was not clear what efforts, if any, the City 

made to operate the program as efficiently as possible during the deficit years. F.F. 

Nos. 20, 21.

As of March 2017, the City began outsourcing its recycling program 

(along with collection of waste, which was already outsourced) under a three-year 

fixed rate contract with BFI Waste Services of Pennsylvania (BFI). As a result, the 

City no longer markets and sells the collected recyclable materials; rather, BFI is 

now responsible for disposing of all waste and recyclables collected and may itself 

sell the recyclable materials. F.F. Nos. 19-24.

Under the contract, the City pays BFI $3,499,359.36 per year, which 

consists of $2,642,745.60 for curbside trash collection at an estimated 20,640 units 

and $856,613.76 for curbside recycling collection at an estimated 26,636 units. 

There is also a $41,700 education component. When the outsourcing contract with 

BFI went into effect in March 2017, the City reduced its Recycling Fee to $74.04. 

F.F. Nos. 25-26. 

The City did not factor prior surpluses into the new rate, but instead 

applied those surpluses against deficits in prior years. The City anticipated a surplus 

in 2017, which it intended to use for some estimated transitional costs. The City 

retained some responsibilities and costs of the recycling program despite the contract 
9

with BFI, including purchasing and providing collection containers, administering 

fee collection and customer service, and conducting leaf and yard waste collection. 

The City anticipates an upcoming cost of $1.2 million to provide new collection bins

to approximately 26,636 units (a cost of approximately $45 per bin). Tipping fees 

and apportioned employee salaries for the City’s handling of leaf and yard waste 

costs the City approximately $326,000 per year. F.F. Nos. 27-30. 

The trial court determined that the City did not meet its obligation to 

consider ways to increase the efficiency and self-sufficiency of its recycling program 

without reliance on a fee. The City did not conduct comprehensive studies of its 

recycling program options. For years, the City collected fees that were greater than 

the total program costs, and it did not properly account for those surpluses in setting 

fees for future years. The fees were sufficient to cover all costs of its recycling 

program, which is inconsistent with Act 101. The City did not timely explore 

outsourcing to a private contractor, which ultimately proved to be a significantly 

cheaper alternative to its in-house recycling program. Before entering the private 

contract with BFI, the recycling program was less efficient and less self-sufficient 

than it could have been. The trial court concluded that the fees the City imposed 

enabled it to operate its recycling program without properly pursuing Act 101’s 

purposes of efficiency and self-sufficiency. 

Upon concluding that the City’s recycling fees were inconsistent with 

Act 101 as evidenced both by the amount of the fees exceeding the costs of recycling 

even before adding in revenue from sales of recyclables and Act 101 grants, and by 

the language of Ordinance 20-2014 itself permitting fees to “cover all costs 

associated with the collection and removal of all curbside waste,” the trial court did 

not entertain any specific calculation of realizable avoided costs or the precise 
10

appropriate fee amount generally. The trial court noted that the exact extent to which 

avoided costs should have lowered the fees is an issue for future proceedings on 

damages. The trial court also declined to consider monetary damages at this juncture

because the parties agreed to have the court rule solely on Count I -- the declaratory 

judgment count -- before proceeding with other aspects of the case. Accordingly, 

the trial court entered declaratory judgment in favor of the Residents. This appeal 

now follows.11 

II. Issues

The City raises five issues for our review. First, the City contends that 

the trial court erred by misapplying a burden shifting analysis and placing the burden 

on the City to prove that its Recycling Fee as authorized by Ordinances 20-2014 and 

21-2014 complied with Act 101. Prior decisional law clearly holds that the burden 

of proof always lies with the party challenging the reasonableness of a fee and never 

shifts to the municipality. Second, the City argues that the trial court disregarded

credible evidence proving the City’s compliance with Act 101. Third, the City 

claims that the trial court erred by considering evidence of avoided costs of tipping 

fees as a factor in determining that the City’s Recycling Fee is inconsistent with Act 

101. Fourth, the trial court abused its discretion and committed an error of law in 

finding that any surplus of fees in proportion to the costs of the recycling program is 

inconsistent with Act 101. Finally, the City maintains that the trial court erred by 

allowing the Residents to alter their claim thereby exceeding the scope of both the 

 

11 Our review in a declaratory judgment action is limited to determining whether the trial 

court’s findings are supported by substantial evidence, whether an error of law was committed or 

whether the trial court abused its discretion. Pennsylvania Independent Waste Haulers Association 

v. Township of Lower Merion, 872 A.2d 224, 227 n.13 (Pa. Cmwlth. 2005).
11

declaratory judgment claim and the trial court’s August 1, 2014 order limiting these 

proceedings to the disposition of Count I of the Complaint only.

III. Discussion

A. Burden of Proof

First, the City argues that the trial court improperly used a shifting 

burden of proof requiring the Residents to show only that the City had a surplus of 

fees for certain years before shifting the burden to the City to show that the City’s 

Recycling Fee is consistent with Act 101. This is contrary to case law requiring the 

party challenging an ordinance to show the ordinance’s invalidity. The Residents

failed to prove facts supporting their claim. The Residents produced no expert 

testimony that the amount charged had a negative impact on the efficiencies of the 

recycling program. In fact, the trial court never found that the Residents met their 

burden of proof or that the evidence proved that the City’s Recycling Fee had a 

negative impact on the financial self-sufficiency of the City’s recycling program. 

“[O]rdinances are presumed to be valid and those who challenge their 

validity carry a heavy burden to establish their invalidity.” Fisher v. Viola, 789 A.2d 

782, 785 (Pa. Cmwlth. 2001); accord Chrin Brothers, Inc. v. Williams Township

Zoning Hearing Board, 815 A.2d 1179, 1184 (Pa. Cmwlth. 2003). A rebuttable 

presumption is not absolute or unassailable. Commonwealth v. McNeil, 439 A.2d 

664, 667 (Pa. 1981); Kiskadden v. Department of Environmental Protection, 149 

A.3d 380, 402 (Pa. Cmwlth. 2016), appeal denied, 168 A.3d 1281 (Pa. 2017). It is 

merely an assumption until it is disproved. Kiskadden, 149 A.3d at 402. 

For instance, in a tax assessment appeal, the validity of the tax 

assessment is presumed. Beaver Gasoline Co. v. Zoning Hearing Board of Borough 

of Osborne, 285 A.2d 501, 504 (Pa. 1971). However, where the taxpayer presents 
12

evidence drawing the validity of that tax assessment into question, the taxing 

authority may no longer rely upon the presumption, but is required to present 

evidence in support of the assessment to sustain its validity. Id. Similarly, in 

criminal cases, the Commonwealth is entitled to a presumption of the sanity of the 

criminal defendant. Id. But, once the defendant introduces evidence drawing his 

sanity into question, the Commonwealth may no longer rely upon that presumption, 

but is required to prove sanity, as it must every other element of the case, by 

affirmative evidence. Id. Likewise, where a zoning ordinance is challenged, a

municipality is entitled to a presumption of its validity. Id. But, once a permit 

applicant presents evidence that there was a total ban on the proposed use, the 

municipality must present evidence to establish the validity of the total ban in terms 

of public interest. Id.

Similarly, where the reasonableness of a fee is challenged, the party 

challenging the fee bears the burden of proving it is unreasonable. M & D 

Properties, Inc. v. Borough of Port Vue, 893 A.2d 858, 862 (Pa. Cmwlth.), appeal 

denied, 906 A.2d 1197 (Pa. 2006). However, “[t]he burden does not shift to a 

municipality to prove that a challenged fee is reasonable; it always remains the 

burden of the challenger to show that the fees are unreasonable.” Id. 

The trial court applied the burden analysis applicable to ordinances

here. The City was entitled to a presumption that its ordinances, which authorized

the assessment and collection of a Recycling Fee, were valid. The trial court placed 

the burden on the Residents to show that the City’s ordinances were inconsistent 

with Act 101’s purposes and provisions. More particularly, pursuant to this Court’s 

remand directive, the Residents bore the burden of proving that the City’s ordinances

had a negative impact on the recycling program’s financial self-sufficiency, as that 
13

term is used in Act 101, or a deleterious effect on the efficiencies of the City’s 

recycling program. Ziegler, 142 A.3d at 139. 

To that end, the Residents showed that Ordinance 20-2014 permitted a 

Recycling Fee that covered “all costs” of recycling and, as applied, the fee alone 

covered the cost of the program and generated surpluses for multiple years. In so 

doing, the Residents showed that the program was not as efficient as it could be 

thereby drawing the validity of the ordinances authorizing the fee into question. As 

this Court has explained, where a fee covers all costs associated with the recycling 

program, it does not encourage waste reduction and marketing of recyclables, nor 

does it use planning, grants or other incentives to attain increased efficiency contrary 

to Act 101’s purposes. Ziegler, 142 A.3d at 129. 

Based on the Residents’ evidence, the trial court found that the fee 

charged and collected was high enough to cover all of the program costs and enabled 

the City to ignore the statutorily favored funding from grants and sales of recyclables 

in contravention of Act 101. Once the Residents presented evidence tending to show 

that the ordinances had a negative effect on the efficiency and self-sufficiency of the 

recycling program, it was up to the City to rebut this evidence. In other words, the 

City could no longer rely on the presumption of the ordinances’ validity, and it was 

required to rebut the Residents’ evidence in order to prevail. Upon review, the trial 

court correctly assigned the burden of proof. 

B. Disregard of Evidence

Next, the City contends that the trial court abused its discretion by 

failing to consider evidence and arguments relating to the City’s Recycling Fee and 

program costs. The City discovered evidence that it had significant leaf and yard 

waste collection costs that should have been accounted for in the recycling fund, but 
14

were assessed to the City’s general fund. The trial court accepted the City’s evidence 

that the leaf and yard waste collection program costs $326,000 per year, but the court 

did not include these costs when calculating that the City had a surplus in the 

recycling program. Yard waste falls within the definition of recycling. There is no 

explanation why the trial court ignored this evidence. 

In addition, the City contends that the trial court erred by disregarding 

the City’s argument that grants under Section 904 of Act 101, 53 P.S. §4000.904, 

should not be counted in the City’s surplus. Section 904 grants are not limited in 

use to recycling programs and may be used for any municipal purpose. To the extent 

that the trial court considered Section 904 grants as a revenue source, any surplus 

should be reduced by the amount of Section 904 grant money received. 

Further, the City asserts that the trial court failed to include in its 

calculations those years in which the City lost money in the recycling program. The 

trial court cannot consider surpluses only and must consider deficits too. The trial

court also did not consider future program costs (e.g., replacement recycling bins 

costing $1.2 million). The City claims that when all of the revenue and costs from 

the six years of the recycling program that appear in the record are considered, the 

City actually operated its program at a net deficit. 

As fact-finder, the trial court maintains exclusive province over matters 

involving the credibility of witnesses and the weight afforded to the evidence. In re 

Penn-Delco School District, 903 A.2d 600, 608 (Pa. Cmwlth. 2006), appeal denied, 

921 A.2d 499 (Pa. 2007). The trial court is free to believe all, part, or none of the 

evidence presented, and is likewise free to make all credibility determinations and 

resolve conflicts in the evidence. Boro Construction, Inc. v. Ridley School District, 

992 A.2d 208, 218 n.16 (Pa. Cmwlth. 2010). As a result, this Court is prohibited 
15

from making contrary credibility determinations or reweighing the evidence in order 

to reach an opposite result. Penn-Delco, 903 A.2d at 608.

In fact, we are bound by the findings of the trial court which have 

adequate support in the record so long as the findings do not evidence capricious 

disregard of competent and credible evidence. Leon E. Wintermyer, Inc. v. Workers’

Compensation Appeal Board (Marlowe), 812 A.2d 478, 487 (Pa. 2002). “Review 

for capricious disregard of material, competent evidence is an appropriate 

component of appellate consideration in every case in which such question is 

properly brought before the court.” Id. Capricious disregard occurs only when the 

fact-finder deliberately ignores relevant, competent evidence. Id. 

1. Leaf and Yard Waste

After the August 2017 hearing, the City discovered it had significant 

leaf and yard waste collection costs that should have been accounted for in the 

recycling fund, but were assessed to the City’s general fund. The Residents filed a 

motion in limine to preclude this evidence. The trial court did not rule on the motion, 

but did consider the City’s evidence regarding yard waste and leaf collection. 

In fact, the trial court found that this service costs the City 

approximately $326,000 per year. Despite this finding, the trial court did not factor 

this evidence into its surplus analysis. The trial court found that the City accounted 

for this expense in the City’s general fund, not in the City’s recycling program fund. 

By including this expense in the general fund, it was paid for by property taxes, not 

by user fees, Act 101 grants or the sale of recyclable materials. R.R. at 1575a. 

However, “leaf waste” clearly falls within the definition of recycling. 

Section 103 of Act 101, 53 P.S. §4000.103. Costs related to leaf waste are 
16

attributable to the recycling program, regardless that the City accounted for this 

expense in its general fund. By excluding evidence directly related to the actual 

costs of the recycling program, the trial court did not present a complete or accurate 

picture of what it actually costs the City to operate its recycling program. Thus, we 

conclude that the trial court erred by excluding these expenses in its calculations and 

efficiency analysis. 

2. Section 904 Performance Grants

As for the Section 904 performance grants, the trial court found that 

from years 2014 through 2016, the user fees collected – standing alone, without the 

inclusion of grants or sales of recyclables – exceeded the total costs of the recycling 

program. The trial court reached this determination regarding the fees irrespective 

of the performance grants. 

Notwithstanding, as the City points out, Section 904 grants, unlike 

those under Section 902 of Act 101,

12 are not limited in use to recycling programs 

 

12 Conversely, Section 902 grants are limited for the development and implementation of 

municipal recycling programs. Specifically, Section 902 authorizes DEP to:

[A]ward grants for development and implementation of municipal 

recycling programs, upon application from any municipality which 

meets the requirements of this section. The grant provided by this 

section may be used to identify markets, develop a public education 

campaign, purchase collection and storage equipment and do other 

things necessary to establish a municipal recycling program. The 

grant may be used to purchase collection equipment, only to the 

extent needed for collection of recyclable materials, and mechanical 

processing equipment, only to the extent that such equipment is not 

available to the program in the private sector. The application shall 

be made on a form prepared and furnished by [DEP]. The 

application shall explain the structure and operation of the program 

and shall contain such other information as [DEP] deems necessary 
17

and may be used for any municipal purpose. 53 P.S. §4000.904(d)(6) (“the grant 

funds awarded under this section may be expended by the municipality on any 

expense as determined in the discretion of the municipality”) (emphasis added). 

There is no requirement for the City to apply Section 904 grants to its recycling 

program. Because the City chose to apply its Section 904 grants to its recycling 

program, the trial court properly factored this money into its analysis.

13

 Thus, we 

discern no error in this regard. We note that the City’s use of this unrestricted grant 

money towards its recycling program is evidence that the City is using any means 

available to attain “financial self-sufficiency, as that term is used in Act 101.” 

Zeigler, 142 A.3d at 139. 

3. Past Deficits

As for the deficit years, the trial court found that the program ran a 

deficit in the years 2011-2013. The trial court found that it was “not clear what 

 

to carry out the provisions and purposes of this act. The grant under 

this section to a municipality required by section 15011 to 

implement a recycling program shall be 90% of the approved cost 

of establishing a municipal recycling program. The grant under this 

section to a municipality not required by section 1501 to implement 

a recycling program shall be 90% of the approved cost of 

establishing a municipal recycling program. In addition to the grant 

under this section, a financially distressed municipality, as defined 

in section 203(f) of the act of July 10, 1987[, P.L. 246, as amended,

53 P.S. §11701.203(f)], known as the Financially Distressed 

Municipalities Act, that is required by section 1501 to implement a 

recycling program shall be eligible for an additional grant equal to 

10% of the approved cost of establishing a municipal recycling 

program.

Section 902 of Act 101, 43 P.S. §4000.902(a).

13 Where a municipality chooses to use such funds for non-recycling purposes, Section 904 

grants should not be factored into the analysis as a revenue source. 
18

efforts, if any, the City made to operate the program as efficiently as possible during

the deficit years.” Trial Court Op. at 6. The trial court did not apply deficits in its 

calculations. Again, the purpose of the remand order was to determine the efficiency 

of the recycling program. The uncontroverted evidence demonstrates that the City 

ran a deficit in some years. Those deficits had to be recouped in future years. We 

conclude that the trial court erred by not considering deficits in its calculations. 

4. Anticipated Costs

The City also presented evidence that the current fee contemplates 

anticipated costs. Specifically, the City presented testimony that it expects to incur 

a $1.2 million expense in replacing recycling bins for all 26,636 customer

households. If the City were to apply all $1.2 million to any single year, it would

require the City to add approximately $46 to each customer’s recycling bill. R.R. at 

1277a. The City’s managing director testified that the City is considering amortizing 

that cost over a three-or five-year period. R.R. at 1274. Despite finding that the City 

anticipates an upcoming cost of $1.2 million to provide new collection bins, F.F. No. 

29, the trial court did not consider this sum in its analysis or offer any explanation 

as to why anticipated costs could not be used to offset the amount of revenue

generated. In this regard, the trial court erred. 

The purpose of the Ziegler test is to determine the efficiency of the 

recycling program. The trial court found that the user fees covered all costs of 

recycling and generated surpluses and, thus, were contrary to Act 101. However, 

the trial court’s calculations disregarded key data regarding actual costs of the 

program. By not considering the City’s leaf and yard waste collection costs, prior 

years’ deficits or anticipated program costs, the trial court did not capture an accurate 
19

and complete picture of the program’s efficiency. Consequently, we are unable to 

determine whether the Recycling Fee is consistent with or contrary to Act 101. Thus, 

it is necessary to vacate and remand for proper consideration of this evidence and 

further calculations that include the disregarded data. 

C. Avoided Costs of Tipping Fees

Next, the City contends that the trial court erroneously considered 

tipping fees14 that the City avoids paying when determining whether the City’s 

Recycling Fees were consistent with Act 101. The City maintains that the Recycling 

Fees would have increased had the City not avoided the tipping fees. Moreover, the 

City argues that consideration of avoided costs of tipping fees has no place in the 

discussion of whether the City’s assessment and collection of its Recycling Fee had 

a negative impact on its recycling program. 

Section 1712(a) of Act 101, 53 P.S. §4000.1712(a), provides 

“[p]rogram costs are excessive when reasonable and necessary costs of operating the 

program exceed income from the sale or use of collected material, grant money 

received from the department pursuant to section 902 and avoided costs of municipal 

waste processing or disposal.” Section 1712(a) merely serves as an affirmative 

defense to certain types of enforcement actions brought by DEP. 

53 P.S. §4000.1712(a). However, there is scant reference to avoided costs elsewhere 

in Act 101. 

 

14 A tipping fee is the charge levied upon a given quantity of waste received at a waste 

processing facility. “The ‘tipping fee’ includes state-mandated fees set forth in Act 101 and other 

solid waste laws. The ‘tipping fee’ may vary depending on the hauler, the time of year, market 

conditions, the volume of waste a particular hauler regularly delivers to the facility, the payment 

history of the hauler and whether or not the hauler pre-pays the ‘tipping fee.’” Pennsylvania Waste 

Industries Association v. Monroe County Municipal Waste Management Authority, 80 A.3d 546, 

549 (Pa. Cmwlth. 2013). 
20

Notwithstanding, this section appears to reflect the General Assembly’s 

intention that avoided costs are a factor in determining the efficiency and selfsufficiency of a recycling program. According to DEP, “a program can be 

understood as self[-]sufficient if its economic, social, and environmental benefits 

exceed its costs, whether or not all of these costs and benefits are reflected in the 

municipality’s budget.” F.F. 15. Recycling and diverting waste from overburdened 

landfills certainly serves an economic, social and environmental benefit. See Section 

102 of Act 101, 53 P.S. §4000.102. However, avoided tipping costs are not a 

revenue source or a cost. Rather, they are merely costs that the City did not incur. 

In other words, they are not realized. As such, avoided costs would have no effect 

on whether the City’s assessment and collection of its Recycling Fee had a negative 

impact on its recycling program. 

Upon review, the trial court “did not entertain any specific calculation 

of realizable avoided costs or the precise appropriate fee amount generally.” Trial 

Court Op. at 12 (emphasis added). Thus, we discern no error in this regard.15

D. Surplus of Fees

Next, the City argues that a surplus that is reasonably commensurate 

with the costs of the recycling program is consistent with Act 101. The law states 

that any fee is valid if the revenue generated by the fees is reasonably commensurate 

with the costs incurred. The trial court summarily concluded that any surplus is 

 

15 Insofar as the trial court indicated that “[t]he exact extent to which real avoided costs 

should have lowered the fees is an issue for proceedings on damages,” for purposes of judicial 

economy, we note that avoided costs would not result in lower fees. Trial Court Op. at 12. 

However, because the trial court did not reach the damages stage of the proceedings or determine 

what extent, if any, avoided costs would have on the Recycling Fee, we find no error in this regard. 
21

inconsistent with Act 101, without regard to whether the fees were disproportionate 

to the costs. 

Recently, this Court held:

A municipality cannot impose a tax upon a business under 

the guise of exercising its police power, and, therefore, a 

license fee will be struck down if its amount is “grossly 

disproportionate to the sum required to pay the cost of the 

due regulation of the business.” Flynn v. Horst, 51 A.2d 

54, 60 (Pa. 1947). “The party challenging a license fee has 

the burden of proving that the fee is unreasonable.” 

Thompson v. City of Altoona Code Appeals Bd., 934 A.2d 

130, 133 (Pa. Cmwlth. 2007). “All doubt must be resolved 

in favor of the reasonableness of the fee, since the 

municipality must be given reasonable latitude in 

anticipating the expense of enforcing the ordinance.” Id.

Costa v. Allentown, 153 A.3d 1159, 1165 (Pa. Cmwlth. 2017). A demonstration of 

surpluses alone would not defeat the reasonableness of the fee. See id. This Court 

has held that “fees charged by a municipality for services rendered are proper if they 

are reasonably proportional to the costs of the regulation or the services performed.” 

M & D Properties, Inc. v. Borough of Port Vue, 893 A.2d 858, 862 (Pa. Cmwlth. 

2006) (emphasis added). 

Although these cases are certainly instructive, they do not involve 

application of Act 101. Act 101, as interpreted by this Court, requires the courts to 

examine the efficiency of the recycling program and whether attendant user fees 

impact the efficiency and self-sufficiency of the recycling program. Ziegler, 

142 A.3d at 130; Waste Management, 107 A.3d at 287. 

Here, the trial court found that the Residents demonstrated that the 

ordinances permitted a Recycling Fee that covers all costs of the recycling program 
22

and, as applied, the Recycling Fee covered all costs of recycling and generated 

surpluses that were not considered by the City in setting the fee. 

As discussed above, the trial court erred in its calculation of a surplus. 

Until a new calculation is made, it is unclear whether the fee generated a surplus 

over multiple years. Moreover, while a surplus may be indicative of inefficiency 

under Act 101, such may be offset by other factors, including evidence regarding 

amortization of anticipated costs. 

E. Alteration of the Residents’ Claims

Finally, the City argues that the trial court erred by allowing the 

Residents to argue that the fee was excessive, a claim not raised in their complaint. 

In Count I of the complaint, the Residents merely claimed that the City’s fee was 

inconsistent with Act 101, not excessive. The trial court should have precluded the 

Residents from proceeding on its new excessive fee argument without amending its 

complaint to include this new claim. By allowing this new claim to move forward, 

the trial court deprived the City the opportunity to present preliminary objections or 

conduct full discovery. 

On remand, this Court directed the trial court to consider whether the 

curbside recycling fee will have a negative impact on the recycling program’s 

financial self-sufficiency, as that term is used in Act 101, or a deleterious effect on 

the efficiencies of the City’s recycling program. Ziegler, 142 A.3d at 139. As the 

trial court found, “[c]onsideration of the amount of the fee and related financial 

details was thus necessary to comply with the remand and give a final answer to the 

question of whether the City’s fee is permissible.” Trial Court Op. at 2. 

Consideration of whether the fee was inconsistent with Act 101 requires an 

examination of whether the fee was excessive or unreasonable in relation to actual 
23

costs of the program. We note that a fee is unreasonable if it is used by a 

municipality purely to generate revenue with little regard to the recycling program’s 

efficiency or the goals of Act 101.

IV. Conclusion

For these reasons, we vacate and remand insofar as the trial court’s 

calculations did not include leaf and yard waste collection costs, prior year’s deficits 

or anticipated program costs, and we affirm in all other respects.16

MICHAEL H. WOJCIK, Judge

 

16 We also note that funding recycling programs has become a difficult matter. Pursuant 

to Ziegler, the goal of Act 101 is to have recycling programs that maximize funding available from 

Act 101 grants, sales from recyclables and alternative resources to attain increased efficiency. 

Ziegler, 142 A.3d at 129. Act 101 has a laudable but unrealistic goal of self-funding. Id. at 137. 

As this Court recognized in Ziegler, self-sufficiency may be beyond the capabilities of 

municipalities and recognized that user fees, which are not prohibited by Act 101, are used to fund 

recycling programs. Id. Since its enactment, the recycling market has essentially collapsed. The 

ability to sell recyclable material has decreased dramatically. See R.R. at 1676a. As a result, 

recycling has become much more costly to local governments. Nevertheless, it is the function of 

the General Assembly, and not this Court, to reexamine Act 101 and the hardship that it is placing 

on municipalities and to develop new ways to encourage and incentivize waste reduction. See, 

e.g., Pa. Const. art. II, §1 (“The legislative power of this Commonwealth shall be vested in a 

General Assembly[.]”); Tosto v. Pennsylvania Nursing Home Loan Agency, 331 A.2d 198, 202 

(Pa. 1975) (“It is the province of the legislature, not the judiciary, . . . to determine the means 

necessary to combat public problems, for with means as with ends, the legislature, which is more 

responsive to the people and has more adequate facilities for gathering and assembling the requisite 

data, is in a better position to evaluate and determine alternative approaches.”) (citation and 

internal quotations omitted).
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Alan Ziegler, Nicolas Bene, :

Lissette Chevalier, Jose Munoz, :

and Efrain Caban, Individually and :

on Behalf of all Similarly Situated :

Persons :

:

v. : No. 169 C.D. 2018

: 

The City of Reading, and Reading :

Area Water Authority :

:

Appeal of: The City of Reading :

O R D E R

AND NOW, this 14th day of August, 2019, we VACATE the order of 

the Court of Common Pleas of Berks County, dated January 2, 2018, and REMAND 

for additional calculations in accordance with the foregoing opinion, and AFFIRM 

in all other respects. 

__________________________________

MICHAEL H. WOJCIK, Judge