HomeMy WebLinkAbout1993-07-06; City Council; 12303; 1993-1994 SOLID WASTE SERVICES RATES7
1993-94 SOLID WASTE SERVICES RATES
Adopt Resolution No. 73-/?/
based on a $43/ton landfill disposal fee.
establishing 1993-94 Solid Waste Services
ITEM EXPLANATION:
In July, 1992 the City Council approved a Solid Waste Services Rate Index Syst h January, 1993 the Council approved base solid waste services rates based approved system. The Index System provided for an in-depth financial analysis (
Waste Management (CWM) every thee years (Public Utility Approach) to e
costs, profits and rates. In the years between the in-depth analyses, the soli
service rates would be annually adjusted using predetermined indexes (
It is now the time to review the solid waste services rates and apply the app
indexes to determine the 1993-94 solid waste services rates. During the past y
indexes for wages and operations and maintenance costs have experience
increases, 1.64% and 2.15%, respectively. However, the disposal index has ir
significantly with the County Board of Supervisors May 18,1993 approval of a :
increase (from $28/ton to $43/ton) in the landfill tip fee. Application of the
results in an increase in the base single farnily residential solid waste services r
$12.67/month to $14.22/monthY an increase of $1.55 or 12.26%.
In its May 18 action, the Board of Supervisors also adopted a surcharge that w
applied to waste that was not committed through the Interim Participation As
Since that agreement was not approved by all cities, the Board of Supervisors cj
Staff has also evaluated the impact of the $58/ton tip fee and $65/ton tip fee
you-go) in the attached Exhibit 3, Alternative Tip Fee Solid Waste Semi
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FISCAL IMPACT:
The impact of the recommended action as well as the $58/ton and $65/ton tip
displayed below:
The solid waste fee assumes that the proportion of yard waste to municipal wz
remained the same since the beginning of the program. At the completion of 1
year of the yard waste program (September, 1993) an audit will be condu
determine the over all annual proportion of solid waste to yard waste.
proportions change, the solid waste services fee may also change.
If the proportions change significantly, staff will return to Council with a recom
adjustment to the fees to assure Coast Waste Management is not adversely in If the proportional change is insignificant changes in the fee will be addressec
rate review for 1994.
Currently, the City's solid waste program administration fee is set at 1.1% of tl
solid waste services rate, and serves as a revenue source for the Solid Was1
(SWF). The solid waste administration fee supports the City's solid waste 1 efforts which include administration of the refuse and recyclables contract, 1
development, public information and education efforts, litter control, bai
composting and a portion of the support required for the North County Soli(
Management Agency and regional solid waste issues. The fee generates appro3
$6,000 revenue to the Solid Waste Enterprise Fund each month, and will j
proportionately to the approved rate increase. At this the, the SWF also
revenue from two grants provided by the County of San Diego, the Technical As
Program (TAP) Grant and the Tonnage Grant. It is uncertain at this time wh
not the County of San Diego will continue these grant programs. The fee alor
currently adequate to fund the adopted 1993-94 SWF budget. To entirely f
adopted 1993-94 SWF, based on a $43/ton tip fee, the fee would need to inc
approximately 2.5%, or an additional 204: on the residential rate.
The franchise fee currently generates approximately $18,300 general fund rever
month, and increases proportionately with the adopted rates. This figure will
again when the franchise fee increases to 4.0% on March 1, 1994.
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PAGE 3 OF AB# 3.3@
EXHIBITS:
1. Resolution No. 73- /yf
2.
3.
4. Rate Indexes
5.
Proposed 1993-94 Solid Waste Services Rates Study
Alternative Tip Fee Solid Waste Services Rate Comparison
North County Cities Rate Comparison
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RESOLUTION NO. 93-198
A RESOLUTION OF THE CITY' COUNCIL OF THE CllY OF CARL
SERVICES RATES FOR THE CTIY OF CARLSBAD
CALIFORNIA, ESTABLISHING THE 1993-94 MONTHLY SOLID V
WHEREAS, the City of Carlsbad is responsible for the provisir
designated recyclables, and yard waste collection services to promote the I
and general welfare of its citizens; and
WHEREAS, the City of Carlsbad may contract for such services; a
WHEREAS, the City of Carlsbad has contracted with Coast Waste
Inc. for refuse, designated recyclables, and yard waste collection services w
and
WHEREAS, Coast Waste Management, Inc. is in the business of I
disposing of refuse and can continue to provide the necessary refuse collc
to the citizens of Carlsbad; and
WHEREAS, Coast Waste Management, Inc. is in the business of
marketing recyclable goods as designated by the City Manager and ca
provide the necessary recyclables collection services to residential ar
customers; and
WHEREAS, Coast Waste Management, Inc. is in the business of
disposing of source separated yard waste and can continue to provide the
waste collection services to residential and commercial customers; and
WHEREAS, the City of Carlsbad has determined that an increase
services rates is necessary at this time; and
NOW THEREFORE, BEZT RESOLVED, by theCity Council of the (
as follows:
1.
2.
The above recitations are true and correct.
The Solid Waste Services rate for once-a-week collectiol
refuse, designated recyclables, and yard waste shall be $1~
inclusive of the City Solid Waste Adminstration fee.
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3. The Solid Waste Sedces rate for Special Residential CoUec
shall be $16.90 per month, inclusive of the Solid Waste Ad
fee.
The City Solid Waste Administration fee for residential and
customers shall be 1.1% of the base solid waste services rat
The Solid Waste Services Rates for commercial refuse collecti
of the City Solid Waste Administration fee, shall be:
4.
5.
NUMBER OF PICKUPS PER WEEK
No. of 3 4 - 5 Bins - 1 - 2 - -
1 $86.71 $161.10 $235.49 $309.88 $384.27
COMMERCYU. CAN STOPS
1 xweek $23.29/month
2 x Week $46.56/month
3 x Week $69.85/month
4 x Week $93.12/month
5 x Week $1 16.40/month
6. The charge for designated commercial recyclables collectiot
be determined by Coast Waste Management, Inc. and apI
Utilities and Maintenance Director on a case-by-case bas
upon materials collected, but in no case shall this char2
charge for commercial refuse collection.
The following rates shall apply to special pickups of refuse
a. The delivery charge for roll-off boxes shall be $39.:
b. The rate for all classes of roll-off boxes shall be
landfill disposal fees and City Solid Waste Adminisi
Roll-off boxes which are not dumped a minimUm of
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c.
shall be assessed a charge of $3,00 per day. Gusto
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more than one dump from a roll-off box shall be 1
original $39.50 delivery charge. This refund may bt
of a credit on the customer's account.
8. The rate for special haul bins (3 cubic yard bins which re
collection or are rented for seven days or less) shall be as f
a. 1 bin delivered:
b.
c.
The residential and commercial Solid Waste Services Ratt
hereby shall be effective June 15, 1993.
The rates and charges established by this Resolution s
effective day supersede rates previously established.
PASSED, APPROVED AND ADOPTED by the City Council of the Ci
2 bins delivered same trip:
3 bins delivered same trip:
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at its regular meeting held on the 6th day of JULY
following vote, to wit:
AYES: Council Members Lewis, Stanton, Kulchin, Nyg
NOES: None
ABSENT: None ~
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ATTEST:
i ALETHA L. RAUTENKRANZ, City clerld
(SEAL)
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PROPOSED 1993-94 SOD WASIE SERVICES RATES STUDY
On July 7,1992, the City Council approved a Rate Index System to evaluate solic
services rates increase requests. The approved Rate Index System, developed
firm of Hilton Farnkopf & Hobson (HFH), utilized a Combined Public Utili
analysis of the hauler's financial records to establish a base rate, based on prt
costs and an agreed upon profit margin. An Indexed Rate approach, using agree
indexes, would be used to evaluate rate increase requests in subsequent year
Indexed Rate would be used for two years subsequent to the base year, then i
in-depth Public Utility financial analysis would be undertaken (July, 1995) to that profits were not in excess of the agreed upon percentage. Any proposl
increases would be presented to the City Council for their consideration and ap
The indexes established by the Rate Index System are:
Indexed Rate methodology. This approach involves conducting an in-depth fii
For Wages and Benefits: The percent change in Average Hourly Eai
Transportation and Public UtiZities, as published in Employment and Ead
the Bureau of Labor Statistics, U.S. Department of Labor; and,
For Disposal Costs: The annual percentage change in the disposal tip fee
charged to dispose of refuse; and,
For ODerations and Maintenance Costs: The percent change in the P
Price Index - Transpurfatiun Equipment, as published in Producer Price Ind
the Bureau of Labor Statistics, U.S. Department of Labor.
At that same meeting, City Council also directed HFH to assist in the prepari
base solid waste services rates. HFH conducted an in depth analysis of Coas
Management's financial records to establish a 1992-93 base year rate bs
projected costs, and the agreed upon profit (modified 9%). On January 12,19'
Council approved the rates as recommended by HFH. These rates included a su
to compensate for tip fee increase costs incurred prior to the new rates goi
effect. This surcharge amounted to 384: per month on the residential rate, and
suspended on June 30, 1993, prior to adjusting the rates for 1993-94.
On May 18, 1993, the County Board of Supedsors approved a tip fee hcrea
$28/ton to $43/ton. This action precipitated the first application of the Rat
System. The agreed upon indexes were applied to the appropriate segment
rates, and the proposed rates are outlined in Exhibit 3. Due to recent events,
fee is uncertain. Staff has prepared proposed rates under a variety of scenari
Discussion
WAGES & BENEFITS AND OTHER EXPENSES:
The index for the Wages and Benefits portion of the rate increased by 1.64% du
period from April 1992 through April 1993 (the most recent data available
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results in a 74: increase in the residential rate. The index for Operatior
Maintenance (Other Expenses) portion of the rate increased 2.15% during tha
period, resulting in a 94 increase in the residential rate.
DISPOSAL FEES:
The Wages and Benefits and Other Expenses portions of the rate increase
constant in all three scenarios since the indexes remain constant in each cast Disposal portion of the rate is much more nebulous, since disposal itself is unc
North County landfill capacity is dwindling. Efforts to expand the San Marcos I
have been underway for quite some time by the County of San Diego. The Cow
needed to secure financing for the San Marcos Landfill expansion effort as well a
a new North County Landfill. The County requires what was referred to a
control" from the cities to secure the needed financing.
Representatives from all cities and the County have been laboring for several 1
to amve at a solution. The most recent comdttee to tackle this project was th
Waste Participation Agreement Steering Committee, comprised of elected offici2
each region. Their efforts resulted in what was called the "interim agreement
interim agreement varied from its predecessors in that it required cities to corn
SO%, rather than loo%, of their flow, and the Waste Commission to be formed
be advisory to the County. The interim agreement required signatures of all 1
to be valid. On May 25,1993, the City Council voted unanimously to reject the
agreement, becoming the first city to render the agreement invalid.
Since the agreement is now void, the County Board of Supervisors offered to a
a revised participation agreement which does not require all cities to sign for 7
The revised deadline was June 22, 1993. The City of Carlsbad approved the
interim agreement, with the addition of conditions. It is not known at tl
whether the Board of Supervisors will accept the conditions placed by Carls
whether Carlsbad will be subject to any surcharges.
There are three known tip fees under consideration by the County Board of Sup€
A tip fee of $43/ton was approved prior to the rejection of the interim agreemc
is to become effective July 1, 1993. Since the rejection of the interim agreem
Board is considering two other options: a tiered tip fee, and a pay-as-you-go 1
In the tiered tip fee scenario, non-signatory cities would be subject to an "e(
risk" surcharge. This surcharge is equal to 50% of the tip fee ($43/ton), excl
solid waste facility/mitigation fees, and is expected to result in a total of $58
fee. The Board is anticipated to adopt this fee on June 29, 1993. Should th
adopt a pay-as-you-go methodology, the tip fee is expected to be $65/ton
jurisdictions. Since disposal costs are unknown at this time, staff has provided
of the impact under all three scenarios.
At this juncture, the County of San Diego offers the only immediate disposal
approved an agreement for consultant serarices to assist in the preparation of a
At its May 21, 1993 meeting, the North County Solid Waste Management
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for proposals for alternative disposal options.
disposal option agreements would be at least 60 to 90 days in the future.
PROFIT:
Profit is maintained at 9%, which increases the residential rate by IO$. It is hl
to note that profit is not allowed on disposal cost increases above $23/ton, tl
real rate of return is actually between 6.6% and 7.6%, depending on the adop
fee.
FRANCHISE FEE:
The franchise fee is currently set at 3.5% of the solid waste services rate, prior
addition of the fee. The increased rates result in an increase to the residential fri
fee portion of the rate of 144: under a $43/ton tip fee scenario. The franchise
General Fund revenue source.
CITY SOLID WASTE ADMINISTRATION FEE:
Currently, the fee is set at 1.1% of the basic solid waste services rate, and sen
revenue source for the Solid Waste Enterprise Fund (SWEF). The fee m
proportionately to the entire rate.
RATE:
All of the above items result in a residential solid waste services fee of $14.22 as
a $43/ton tip fee. This is an increase to the customer of $1.55 (12.26%), anc
hcrease of $1.93 (15.70%) after accounthg for the suspended surcharge. A 9
tip fee results in a $15.20 residential rate, an increase to the customer ol
(19.97%) and a real increase of $2.91 (23.68%). Commercial rate increase
between 13.65% and 35.89%, depending on disposal costs. Since disposal is a
proportion of the roll-off box rates, these rates feel the impact of the disposal ir
the most, with increases estimated from 26.28% to 62.76%, depending on the s(
However, any potential dtei
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Alternative *Fee Solid Waste Services a Comparison
@ $43/ton
Disposal Fee (> $23/ton) * $0.3 1 $1.24 $3.66 $14.64 $20.00 Disposal Fee (Yard Waste) $0.92 $1.51 $0.00 $0.00 5 $0.00
0 ther Expenses $3.96 $4.05 $21.50 $21.96 $54.04 Franchise Fee *$0.38 $0.52 $2.3 1 $3.15 $7.94 Profit $1.05 $1.15 $6.32 $6.40 $21.07 Basic Rate $12.16 $14.07 $73.08 $8m $251.32 ! Administration Fee $0.13 $0.15 $0.82 $0.94 $2.80
Totalcharged toCustomers $12.67 $la $7- $86.71 $25a ! Percent Increase 12.26% 13.65%
Wages & Benefits Disposal Fee (e $23/ton) $1.42 $1.42 $16.84 $16.84 $92.00
Surcharge $0.38 $0.00 $2.44 $0.00 $0.00
@ $%/ton
Wages & Benefits Disposal Fee (C $23/ton) $1.42 $1.42 $16.84 $16.84 $92.00
0 ther Expenses $3.96 $4.05 $21.50 $21.96 $54.04
Profit $1.05 $1.16 $6.32 $6.44 $21.07 Basic Rate $12.16 $1- $73.04 $9m $2= Administration Fee $0.13 $0.17 $0.82 $1.07 $2.80
Total Charged to Customers $12.67 $15.20 $76,30 $98.28 $25m Percent Increase 19.97% 28.81%
Disposal Fee (> $23/ton) * $0.31 $2.16 $3.66 $25.62 $20.00
Disposal Fee (Yard Waste) $0.92 $1.5 1 $0.00 $0.00 $0.00
Franchise Fee $0.38 $0.55 $2.3 1 $3.57 $7.94
Surcharge $0.38 $0.00 $2.44 $0.00 $0.00
@ $65/ton
Wages & Benefits Disposal Fee ( < $23/ton) $1.42 $1.42 $16.84 $16.84 $92.00
Disposal Fee (> $23/ton) *
Other Expenses $3.96 $4.05 $21.50 $21.96 $54.04
Profit $1.05 $1.16 $6.32 $6.46 $21.07 Basic Rate $12.16 $1- $7- $102.56 $251.32
Administration Fee $0.13 $0.17 $0.82 $1.13 $2.80
Total Charged to Customers $12.67 $1- $76.30 $103.68 $25m Percent Increase 23.56% 35.89%
$0.31 $2.60 $3.66 $30.75 $20.00
Disposal Fee (Yard Waste) $0.92 $1.51 $0.00 $0.00 $0.00
Franchise Fee $0.38 $0.57 $2.3 1 $3.76 $7.94
Surcharge $0.38 $0.00 $2.44 $0.00 $0.00
*
** Disposal Fees on roll-off boxes are based on actual cost. Disposal costs are estimated
Disposal Fees in excess of $23/ton are not subject to profit.
for display purposes.
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JU~Q 1,1993 - Management Analyst City of Carlsbad 2075 Las Palmas
Carlsbad, California 92009
Dear Julie:
Here are the indices you need to adjust refuse collection rates:
brill992 bLrn !kchi
Transpurtation Equipment 130.2 133.0 2,11 Producer Price Index -
Avg Hourly Earnings - Transportation & Public Utilities $13.43 $13.65 1.61
Please call me if you have any questions.
Very truly your^, L=++6!-
David fr, Davis Associate
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