HomeMy WebLinkAbout6.1 Adoption of Rates for Garbage Collection, Disposal, and Recycling Services Provided by Amador Valley Industries and Establishing the 2024-25 Annual Assessmentr
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
DATE: .Line 25, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
Agenda Item 6.1
SU B.JECT: Adoption of Rates for Garbage Collection, Disposal, and Recycling Services
Provided by Amador Valley Industries and Establishing the 2024-25 Annual
Assessment
Prepared by: JayBaksa, Finance Director
EXECUTIVE SUMMARY:
The City Council will consider adopting two separate resolutions establishing the garbage rates
effective July 1, 2024 and establishing the Fiscal Year 2024-25 refuse -related property tax
assessment.
STAFF RECOMMENDATION:
Conduct a public hearing, deliberate, and adopt the Resolution Approving and Establishing the
Collection of Minimum Residential Garbage and Recycling Service Fees for Fiscal Year 2024-2025;
and adopt the Resolution Amending the Schedule of Service Rates for Integrated Solid Waste
Services.
FINANCIAL IMPACT:
The annual rate adjustment for the Fiscal Year 2024-25 will result in a 0.92% increase for all rates.
The residential garbage and recycling service fees, which are collected on the Property Tax bill as
an annual assessment, will increase by $0.39 per month on the required residential 32-gallon can
to a total of $42.92 per month. The proposed commercial rate increases vary based on the service
level selected. The proposed rate of $208.26 represents the average service level for a one -yard
bin collected once per week.
Page 1 of 5
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DESCRIPTION:
Background
In January 2005, the City executed an Agreement with Amador Valley Industries, LLC (AVI) for
service that began July 1, 2005 and continued to June 30, 2020. On June 16, 2020, the City Council
approved an Amended and Restated Agreement with AVI to extend the term to 2035, address
capital equipment replacement needs, and incorporate local and state requirements. In addition, a
new rate model approach was agreed to that addresses annual rate adjustments, component cost
separation, and regular financial reviews. The financial reviews are to be done by a third -party
administrator every three years to confirm reasonableness and to ensure that an industry
standard level of operating margin is being maintained by AVI.
Financial Review
As part of the Fiscal Year 2024-25 rate adjustment, the City engaged HF&H Consultants, LLC, to
perform the financial review. The review included components summarized in Table 1.
Area
Financial Statement
City Fees
Tonnage Reports
Route Operation
Revenue Review
Billing Review
Contractor Compensation
Calculation
Table 1. Financial Review Results
Summary
Reviewed audit and verified amounts with
supporting documentation.
Verified correct amount was remitted to
City.
Verified amounts of annual/quarterly
tonnage reports with supporting
documentation.
Reviewed route information for
Statistics reasonableness by comparing City to other
similar jurisdictions.
Reviewed revenue by utilizing customer
subscription data and service rates to verify
AVI's audited financials.
Reviewed 45 invoices through different
customer classes to test for systemic billing
errors.
Findings
No Discrepancies
No Discrepancies
No Discrepancies
No Discrepancies
No Discrepancies
No Discrepancies
Reviewed prior two years rate calculations. No Discrepancies
Compensation Review
The rate approach included in the Agreement was the periodic review of AVI's financial
statements to verify AVI's compensation is consistent with an operating ratio not greater than
90%, which is the industry standard. To accomplish this, HF&H reviewed AVI's audited financials
for Fiscal Year 2022-23 to determine the revenue requirement needed to meet the 90% operating
margin. During the review it was found that actual revenue collected during FY 2022-23 was
$292,182 higher than was necessary to maintain the 90% operating margin (Table 2).
Page 2 of 5
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Total Revenue
Required
Table 2. Audited Revenue Requirement for FY 2022-23
FY 2022-23 (Actual) FY 2022-23 (Audited) Difference (+/-)
$26,362,772 $26,070,590 ($292,182)
True -Up Calculation
To account for this difference, HF&H conducted two calculations. First, the Fiscal Year 2022-23
revenue requirement identified in the audit of $26,070,590 was used as the updated baseline and
the Fiscal Year 2023-24 revenue requirement was recalculated. This was then used to calculate
the annual adjustment for the upcoming Fiscal Year 2024-25 rates, resulting in the recommended
revenue of $28,782,204, as shown in Table 3. A detailed description of these calculations is
provided in the report by HF&H included as Attachment 4.
Total Revenue Required
Table 3. Updated Revenue Requirements
FY 2022-23 (Audited) FY 2023-24 (Audited)
$26,070,590 $27,695,830
FY 2024-25
$28,782,204
Annual Rate Adjustment Calculation
The Agreement contains a provision that rates must be reasonably forecasted to provide AVI with
an appropriate level of compensation based on a formula detailed in the Agreement. The
forecasting methodology compares customer counts between the two most recent calendar years
to calculate revenue generation based on the level of services provided multiplied by the
appropriate rates. Rates are adjusted as appropriate across all service sectors to meet the
calculated revenue requirement as set forth by the rate model.
City Staff have worked closely with HF&H throughout the financial review and agree with all
information presented including the updated revenue requirement and the Fiscal Year 2024-25
rate adjustment. As required in the Agreement, the City has provided AVI with information
showing the rate calculations and assumptions. Section 5.13.1 states "...the final decision of the
rate structure rests solely with the City." The proposed rate structure for Fiscal Year 2024-25 is
estimated to meet the compensation requirement of $28,782,204. This compensation is possible
as a result of a proposed 0.92% average increase to all categories.
Detailed Comparison of Current and Proposed Rates
Attachment 5 compares the proposed rates to the current rates for service levels that represent a
majority of the subscribers in the City. The proposed rates would be effective July 1, 2024.
Page 3 of 5
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Competitiveness of Dublin Rates with Neighboring Agencies
Historically, Staff has included a comparison of the Dublin rates compared to rates charged for
similar services in surrounding communities. This comparison has focused solely on the garbage
rates, as historically, recycling and organic waste were seen as smaller complimentary services.
This is no longer true with the implementation of SB 1383, as well as other regional and statewide
laws. Looking specifically at garbage rates no longer offers a clear "apples to apples" comparison.
For example, Livermore now charges recycling at 80% of the garbage rate, Castro Valley a rate of
67% the garbage rate, and San Ramon at 50%, where Dublin charges 25%. The same pattern is
now occurring with Organic Waste, in which Dublin charges 50% of the garbage rate and Castro
Valley charges 124% of the garbage rate, but as regulations change and options for disposal
become more limited these services have become more expensive and cities are adjusting for that
reality.
Overall, Dublin remains competitive, and the services offered are at least comparable to, and are
often better than, the surveyed cities especially when factoring the type of service (garbage,
recycling, organics, etc.), that is being provided. The current three -city comparison is provided as
Attachment 6 and, like last year, Staff has included Castro Valley Sanitation District in place of
Pleasanton, to include three service areas that offer similar services. The Pleasanton costs and cost
structure have become an outlier in the Tri-Valley and when incorporating their costs into an
"area average", made it appear that Dublin was significantly higher. In reality, Dublin is
competitive with the other two cities examined (Livermore and San Ramon). Pleasanton's costs
have been included for reference but are not included in the three -city average calculation.
Minimum Residential Garbage Service
All properties in the City are required to subscribe to a weekly minimum garbage service (Dublin
Municipal Code Section 5.32). This minimum service includes weekly curbside collection of a 32-
gallon garbage container, up to two organic waste carts including food scraps (96 gallons each),
up to two recycling carts (96 gallons each), recycling collection of used oil and filters, an annual
household hazardous waste drop-off event, and three on -call bulky waste pick-ups per year.
Residents desiring larger garbage carts are billed directly by AVI for the incremental rate
difference. The City pays AVI for the service cost of the minimum residential service with monies
collected from the property tax bill.
The City Council will need to establish the annual fee, which is collected with the property tax bill
for residential properties, separately from the rates for other levels of service. The proposed fee
for basic residential service for Fiscal Year 2024-25 is $515.04, which is collected in two
installments on the property tax bill. This equates to $42.92 per month, which is $4.68 per year
($0.39 per month) more than the rate levied in Fiscal Year 2023-24, as shown below.
Page 4 of 5
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Table 4. Historical Annual Fee for Minimum Garbage Service
Collected with the Property Tax Bill
Proposed Annual Monthly
2022-23 2023-24 2023-24 Change Change
$486.72 $510.36 $515.04 $4.68 $0.39
This base rate includes $0.45 per month to cover the cost associated with the collection being
included on the property tax bill. These funds are not paid to AVI but are retained by the City to
offset the administrative cost in preparing the tax roll. In addition, the cost of collection and
delinquencies for the basic service is expected to be covered by prior year fund balance, penalties
and prior year taxes collected by the County Tax Collector, and interest on funds held prior to
payment to the Company.
STRATEGIC PLAN INITIATIVE:
None.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
A notice was placed in the East Bay Times on June 8, 2024 and June 15, 2024, notifying the
community of the City Council's consideration of the proposed rates, and the City Council Agenda
was posted.
ATTACHMENTS:
1) Resolution Approving and Establishing the Collection of Minimum Residential Garbage and
Recycling Service Fees for Fiscal Year 2024-25
2) Resolution Amending the Schedule of Service Rates for Integrated Solid Waste Services
3) Exhibit A to the Resolution - Proposed Adjustment to Garbage Company Rates
4) Memorandum - Review of AVI's Compensation - Final Report - Dated June 6, 2024
5) Proposed vs. Current Rates
6) Local Area Rate Comparison
Page 5 of 5
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Attachment I
RESOLUTION NO. XX - 24
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AND ESTABLISHING THE COLLECTION OF MINIMUM
RESIDENTIAL GARBAGE AND RECYCLING SERVICE FEES FOR FISCAL YEAR
2024-2025
WHEREAS, the City of Dublin is mandated by the State of California, under AB 939
and SB 1016, to reduce the amount of solid waste going into the landfill; and
WHEREAS, through the Mandatory Garbage Subscription Ordinance and other
means, the City of Dublin is taking a proactive stance to meet the State Mandated Goals; and
WHEREAS, the goal of the Mandatory Garbage Subscription Ordinance is to protect
the health and welfare of the community, to provide recycling services to all residential
property owners, and to equally share the costs of these programs by mandating that every
residence contributes towards the cost of the service made available; and
WHEREAS, minimum service includes service described in the current Agreement with
the franchised waste hauler, Amador Valley Industries (AVI); and
WHEREAS, the City Council has considered this action as part of a noticed public
hearing on June 25, 2024.
NOW, THEREFORE, BE IT RESOLVED that, the City Council of the City of Dublin
does hereby approve and establish the collection of minimum residential services fees by the
City on the property tax bill as shown in Exhibit A, which is attached hereto and hereby
incorporated by reference.
BE IT FURTHER RESOLVED that City Staff are hereby authorized to undertake all
administrative tasks to implement the assessments, including, but not limited to an agreement
with Alameda County for collection, which may provide payment to Alameda County of its
reasonable costs of collection not to exceed 1.7% of the total amount levied.
{Signatures on the following page}
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 1 of 4
6
Attachment I
PASSED, APPROVED AND ADOPTED this 25th day of June 2024, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 2 of 4
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Attachment I
Exhibit A
City of Dublin
RESIDENTIAL MINIMUM GARBAGE / RECYCLING SERVICES
(Collected With Residential Property Tax Bills)
Basis of Fees
The City has negotiated a multi -year agreement with Amador Valley Industries (AVI) requiring
a rate adjustment to the residential minimum garbage/recycling services collected with the
property tax bills. The current annual fee of $510.36 per year will increase $4.68 for a total of
$515.04 for Fiscal Year 2024-2025. The annual assessment equates to a monthly increase
of $0.39, from $42.53 to $42.92. The Amended and Restated Agreement with AVI sets the
compensation for the Agreement Year that begins July 1, 2021 and provides for annual
adjustments to the rates based upon annual changes in three separate indices, two of which
are maintained by the Bureau of Labor Statistics (Refuse Rate Index), plus pass -through
disposal costs, for waste, recyclables and organics. The three indices account for cost
changes in the following categories: growth in services; labor; and all other costs. In addition,
the Agreement allows for a third -party administrator to review costs and revenue every three
years to confirm reasonableness and to ensure that an industry standard level of operating
margin in being maintained by AVI.
In order to determine the fee, the City estimates the total revenue required to pay AVI for the
Minimum Service to all residential units that are eligible to use the service, according to the
terms of the agreement. The specific factors considered in this calculation include the
following components: the residential rate for Minimum Service; estimated number of housing
units affected by the fee; costs associated with the collection of the fee as part of the Property
Tax Bill; estimated delinquencies; estimated revenues from late payments and interest
earnings; and funds available from collections in a prior year.
Affected Parcels
Chapter 5.32 of the Dublin Municipal Code requires the protection of the health, safety, and
welfare of the community by requiring that all parcels obtain minimum weekly garbage service.
Residential housing units are billed for the cost of Minimum Garbage Service, which is
included with the annual property tax bill. This fee only applies to residential units which have
individual garbage containers and are not serviced by central bins. This does include duplexes
and other attached housing types, which receive individual service.
Households subject to this fee, which only receive Minimum Service, will not be billed by the
Garbage Company. Amador Valley industries will bill customers each quarter for additional
services, if a household selects weekly garbage collection of a container larger than the 32-
gallon container included in the Minimum Service Level.
Services Provided By the Fee
Minimum service includes weekly curbside collection of: one 32 gallon garbage container; up
to two 96 gallon organic waste carts; up to two 96 gallon recycling carts; used oil and filters;
an annual household hazardous waste drop off event; and three on -call bulky waste pick-ups
per year.
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 3 of 4
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Attachment I
Amount of the Fee
The annual amount of the assessment includes the cost of collection as well as the cost of
services over the entire year. The City makes the payment to Amador Valley Industries based
upon the current rate allowed for Minimum Residential Service.
TYPE OF HOUSING UNIT
Each Single Family Residence
Each Condominium / Townhouse Unit
Each Duplex (2 Units)
Each Duplex (5 or More Units)
ANNUAL FEE
$ 515.04
$ 515.04
$ 1,030.08
$515.04 times the
number of units
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 4 of 4
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Attachment 2
RESOLUTION NO. XX - 24
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AMENDING THE SCHEDULE OF SERVICE RATES FOR INTEGRATED SOLID WASTE
SERVICES
WHEREAS, the City of Dublin executed a Collection Service Agreement with Amador Valley
Industries (AVI) on January 12, 2005; and subsequently executed five amendments to the agreement;
and
WHEREAS, the Agreement requires the City Council to adopt a rate schedule, which is
estimated to produce a specified revenue amount as identified in the Agreement; and
WHEREAS, the City Council adopted the initial rate schedule with Resolution 68-05 at a noticed
public hearing on May 3, 2005 and the Agreement provides that the City Council is responsible for
establishing all rates; and
WHEREAS, on September 10, 2020, the City of Dublin executed an Amended and Restated
Collection Service Agreement (Amendment) with Amador Valley Industries (AVI) extending the
Collection Service Agreement for another 15-year term; and
WHEREAS, the Amendment with AVI provides for an adjustment to the rates each July 1st in
accordance with specified formulas; and
WHEREAS, the State of California passed Senate Bill (SB) 1383, requiring among other rules
and regulations, the need to reduce the amount of organic waste being disposed in landfills, as well as
an increase in the reporting requirements documenting these efforts; and
WHEREAS, the parties anticipated in the Amendment that SB 1383 would require rate increases
to reflect additional costs incurred by AVI arising from SB 1383, and it required the parties to negotiate
in good faith on a rate adjustment. The City has met and conferred with AVI, to develop programs and
costs to comply with SB 1383, which are included in the required rates; and
WHEREAS, the City has calculated the required rate adjustment necessary to generate the
agreed to compensation and applied not more than a 0.92% adjustment to the residential, commercial,
roll -off, and other collection service rates and construction and demolition debris rates; and
WHEREAS, on June 25, 2024, the City Council conducted a noticed public hearing prior to the
adoption of the new rate schedule.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby
adopt the Rate Schedule attached hereto, marked Exhibit A and by reference made a part hereof.
BE IT FURTHER RESOLVED that, while AVI may not charge a rate for these services in excess
of the established rates, nothing shall prohibit AVI from charging a rate less than the established
amount.
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 1 of 2
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BE IT FURTHER RESOLVED that, upon the effective date, July 1, 2024, this resolution shall
supersede all previous resolutions adopting rates for solid waste services, and the rates adopted by
this resolution shall continue from year to year.
PASSED, APPROVED AND ADOPTED this 25th day of June 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-24, Item 6.1, Adopted 06/25/2024 Page 2 of 2
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Attachment 3
Exhibit A to the Resolution
2024/2025 PROPOSED ADJUSTMENT TO GARBAGE COMPANY RATES
Affected Parcels
Chapter 5.32 of the Dublin Municipal Code requires for the protection of the health safety and welfare of the community that all parcels obtain minimum weekly
garbage service. Amador Valley Industries, Inc. is the authorized garbage collection and disposal firm operating within the City. The agreement between the City of
Dublin and Amador Valley Industries, Inc. provides that the City shall adopt a rate schedule which is estimated to allow the Company to achieve a fixed amount of
annual revenue. Therefore, the adoption of these fees will affect all parcel owners. Rates are effective July 1, 2024.
Basis of Fees
The City has negotiated a multi -year agreement with Amador Valley Industries, Inc. The Company may request a change in rates based upon a formula which
includes: changes in the Refuse Rate Index; Increased Regulatory Fees; and changes in the total tons delivered to the Landfill. In addition the Company may under
specifc criteria request an extraordinary adjustment. The additional costs of each of these components has been allocated to the three classes of service:
Residential; Commercial Bin Service; and Drop Box/Compactor.
RESIDENTIAL RATES
Company Minimum Residential Collection Rate: Applies separately to each single family unit as well as each unit within a duplex or other attached housing,
which receives individual garbage collection services. The rate applies to the initial 32 gallons of garbage capacity, including once per week collection and disposal;
Weekly Curbside Residential Recycling; and Weekly Curbside Green Waste Recycling; Large Item Collection Service; and access to an Annual HHW drop-off
event. All containers are provided by the Company.
Minimum Monthly Rate : $ 42.92 (Rate includes $0.45 retained by City for preparing tax roll / collection.)
Residents may select a larger garbage container for an additional fee which is shown below:
64 Gallon Garbage Container: Minimum Cost Plus $35.92 per month (Total = $ 78.84 per month)
96 Gallon Garbage Container: Minimum Cost Plus $71.85 per month (Total = $ 114.77 per month)
Residents may request a second garbage container which will be charged at the same rate as a first container based on the size
Second Container: requested.
Additional Large Item Collection: Residents may request additional large item collection services for a fee of :
COMMERCIAL AND MULTI -FAMILY BIN SERVICES (FRONT-END-LOADERI
$ 28.22 per Cubic Yard
Commercial Can Service: Offered at locations unable to accommodate a commercial bin or with volumes deemed insufficient to utilize a commercial bin. Monthly
rate includes bin rental and once per week collection and disposal.
32 Gallon Container: $48.67 64 Gallon Container: $89.39 96 Gallon Container: $130.02
Commercial Bin Service Rates
Rates shown on the following page are monthly rates based upon bin size and frequency of service. Rates include collection, disposal, and bin
rental.
12
ATTACHMENT 3
Exhibit A to the Resolution
Size # Times Size # Times
# Yards Per Wk Base Monthly Rate # Yards Per Wk Base Monthly Rate
1 1 $208.26 4 1 $833.04
1 2 $468.34 4 2 $1,717.90
1 3 $728.42 4 3 $2,602.76
1 4 $988.50 4 4 $3,487.62
1 5 $1,248.58 4 5 $4,372.48
1 6 $1,508.66 4 6 $5,257.34
2 1 $416.52 6 1 $1,249.56
2 2 $884.86 6 2 $2,550.94
2 3 $1,353.20 6 3 $3,852.32
2 4 $1,821.54 6 4 $5,153.70
2 5 $2,289.88 6 5 $6,455.08
2 6 $2,758.22 6 6 $7,756.46
3 1 $624.78 7 1 $1,457.82
3 2 $1,301.38 7 2 $2,967.46
3 3 $1,977.98 7 3 $4,477.10
3 4 $2,654.58 7 4 $5,986.74
3 5 $3,331.18 7 5 $7,496.38
3 6 $4,007.78 7 6 $9,006.02
Organic material is charged at 50% of the Commercial Service rate.
Recycled Material is charged at 25% of the Commercial Service rate.
OTHER COMMERCIAL SERVICES: Rates for additional requested services.
Container Push: $ 18.97
Lock & Key: $ 11.39
Excess Waste (Cu. Yd): $ 62.18 per Cubic Yard
Excess Cart Exchange: $ 18.97
Excess Bin Exchange: $ 75.79
Excess Bin Cleaning: $ 94.67
SMALL COMPACTOR SERVICE: Rates for small compactors serviced as a commercial account on a regular route shall be billed by container size at the rate of
two times the stated rate above for loose garbage.
HANDY HAULER:- One-time placement and collection of a 4 cubic
yard bin, including one week container rental filled no higher than
water level: $272.48
Additional Bin Rental Per Week: $62.96 Per Week
Cost For Additional Dump: $197.53 Per Pick-up
Excess Per Yard If Filled Above Water Level $62.18 Per Cubic Yard
DROP BOX / COMPACTOR RATES: Cost shown is on a per pick-up basis and is based upon the load not exceeding water level (Excess is charged the same rate).
Additional Miscellaneous charges may also apply.
Rate Per Cubic Yard: Non -Compacted: $58.60 Compacted: $117.20
Organic material is charged at 50% of the non -compacted or compacted rate as appropriate.
MISCELLANEOUS DROP BOX CHARGES
Relocation of Drop Box
Weekly Drop Box Container Rental - After 1st Week
Cancel Auto Pick-up Without Notice
Handy Hauler Extra Week Rental
Standby Time
$161.06 Per Request
$62.96 Per Week
$202.89 Per Event
$62.96 Per Week
$264.44 Per Hour
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ATTACHMENT 3
Exhibit A to the Resolution
CONSTRUCTION & DEMOLITION (C&D) DEBRIS BOX SERVICES
C&D Debris Box Service: Costs shown are on a per pick-up basis
l Material Type Cubic Yards Rate
(Concrete & Asphalt
Per Yard Clean $131.77
Clean 6 $790.62
Mixed 6 $946.24
Cardboard
Per Yard Clean $26.36
Clean 20 $527.20
Clean 30 $790.80
Clean 40 $1,054.40
1Dirt
Clean 6 $790.17
Mixed 6 $946.24
1 Drywal l
Per Yard Clean $63.06
Clean 20 $1,261.20
'Material Type Cubic Yards Rate
Front End Loader
Per Yard $51.71
Mixed 4 (1/2 Full) $103.42
Mixed 4 $206.84
Mixed 6 (1/2 Full) $155.13
Mixed 6 $310.26
Mixed 7 (1/2 Full) $180.99
1 Metal
Metal 20 $614.81
Metal 30 $702.66
Metal 40 $878.35
Stucco
Per Yard Clean $131.77
Clean 6 $790.62
Mixed 6 $946.24
Mixed C&D
Wood Per Yard $54.47
Per Yard Clean $26.36 Mixed 15 $817.05
Clean 20 $527.20 Mixed 20 $1,089.40
Clean 30 $790.80 Mixed 30 $1,634.10
Clean 40 $1,054.40 Mixed 40 $2,178.80
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HF H CONSULTANTS LLC
590 Ygnacio Valley Road, Suite 105
Walnut Creek, California 94596
Telephone: 925/977-6950
MEMORANDUM
Attachment 4
Managing Tomorrow's Resources Today
Northern California
Southern California
www.hfh-consultants.com
To: Shannan Young, Environmental and Sustainability Manager — City of Dublin
From: Rob Hilton, President — HF&H Consultants
Dave Hilton, Senior Project Manager— HF&H Consultants
Copy to: Debbie Jeffery, Manager — AVI
Date: June 6, 2024
Subject: Review of AVI's Compensation — Final Report
HF&H Consultants, LLC (HF&H) provides the enclosed report on our due diligence compensation review
(Review) to verify Amador Valley Industries, LLC (AVI)'s compensation under the Amended and Restated
Collection Service Agreement (Agreement) between the City of Dublin (City) and AVI. This report presents
the scope of our due diligence review, the findings of our review, proposed conditions to the
compensation of AVI based on our review, and our recommendations.
Scope of Work
We performed the following procedures as part of our review:
• Reviewed AVI's actual eligible costs during the prior rate period (FY 22/23), including the review of
financial statements, tonnage reports, route operation statistics, and other supporting
documentation to verify the accuracy and practicality of the costs associated with the Agreement;
• Verified the revenue generated from customer billings in order to assess the reasonableness and
accuracy of the gross rate revenues as reported by AVI;
• Reviewed the current customer subscription data received from AVI multiplied by the current rated
in order to calculate revenue received;
• Tested a limited judgement sample of commercial and residential customer accounts to verify the
rates matched the current City -approved rate schedules;
• Applied the RRI methodology to convert 2023/24 eligible expenses into 2024/25 dollars; and,
• Determined the City's revenue requirement.
Findings
HF&H reviewed financial statements from AVI to verify AVI's compensation is consistent with an operating
ratio not greater than 90%. This included reviewing financial statements, tonnage reports, route operation
15
HF H CONSULTANTS LLC
MEMORANDUM
Page 2 of 9
Attachment 4
Managing Tomorrow's Resources Today
statistics, customer subscription, and other supporting documents. HF&H compared these financial ratios
to what is allowed. Based on this review and the information obtained for AVI, HF&H has provided the
results of this analysis to ensure that rate payers are not over -funding this operating ratio through
collection rates.
HF&H reviewed the following sections described below:
Cost and Expenses Determination
Financial Statement
HF&H reviewed AVI's audit financial and verified the amounts with supporting documentation. HF&H
reviewed operating expenses in the audited financials to actuals for the year to test the audited financials
were accurate. We found no discrepancies during this section of the review.
City Fees
Section 4.04 of the Agreement states Contractor shall make payment to the City of a franchise fee,
administrative fee, and such other fees as may be specified. Monthly fee remittances to the City were
recalculated and verified per the language in the Agreement. We found no discrepancies during this
section of the review.
Figure 1: Summary of Fees Recalculated by HF&H
Date Franchise Fee
Administration
Fee
C&D Fee Total City Fees
Total
Tonnage Reports
Jul -22 $ 235,209 $ 100,701 $ 43,094 $ 379,005
Aug-22 244,302 104,594 42,129 391,025
Sep-22 233,662 100,039 69,119 402,820
Oct-22 294,646 126,148 51,049 471,844
Nov-22 254,444 108,936 44,506 407,885
Dec-22 232,311 99,460 51,156 382,928
Jan-23 921,892 394,694 38,756 1,355,342
Feb-23 259,306 111,018 33,329 403,652
Mar-23 326,979 139,991 22,766 489,735
Apr-23 253,144 108,380 47,380 408,903
May-23 913,823 391,239 25,578 1,330,640
Jun-23 233,543 99,988 49,110 382,640
Jul-23 258,916 110,851 11,068 380,835
Aug-23 240,537 102,982 38,565 382,085
Sep-23 266,976 114,301 44,589 425,865
$ 5,169,689 $ 2,213,322 $ 612,194 $ 7,995,205
HF&H reviewed AVI's annual and quarterly tonnage reports to the City and verified the amounts with
supporting documentation. HF&H recalculated the tonnages in the reports and selected 40 weight tickets
16
HF H CONSULTANTS LLC
MEMORANDUM
Page 3 of 9
Attachment 4
Managing Tomorrow's Resources Today
to verify the correct weight and tipping fee is applied. AVI provided the receipt with the correct tonnage
and rate amounts. We found no discrepancies during this section of the review.
Route Operation Statistics
HF&H reviewed AVI's submitted operation statistics form for reasonableness and accuracy. We compared
approximate jurisdictions to AVI's account, labor, and route information. Account information matched
the subscription data provided. We reviewed route information for reasonableness by comparing route
hours and the efficiency of lifts per route to jurisdictions with similar ratios. We found no discrepancies
during this section of the review.
Revenue Review
HF&H reviewed customer services data to determine the accuracy of gross rate revenue reported by AVI.
We utilized customer subscription data from AVI and multiplied by the 2022 service rate to verify AVI's
audited financial. HF&H reviewed the reasonableness of AVI's method of calculating revenue and
performed our own build-up of rate revenue based on actual fiscal year 2022-2023 revenue and
determined the accuracy. We found no discrepancies during this section of the review.
Billing Review
HF&H reviewed 45 total invoices provided by AVI to test for systemic billing errors. We tested 15
residential, 15 multi -family, and 15 commercial class customers and noted the correct charge for each line
item. We found no discrepancies during this section of the review.
Figure 2: Billing Testing
Customers
Accounts Number of
Tested Errors
Residential
Mulit-Family
Commercial
Total
15
15
15
45
0
0
0
0
Contractor Compensation
HF&H worked with AVI to adjust the current fiscal year (FY) 2022 — 2023 to reflect the audited financials
and removal of excess profit. Figure 3 shows prior years rate application with HF&H's agreed
compensation amounts in FY 6/30/23 column. AVI is in agreement with HF&H regarding the methodology
of the financial review and the calculation of projected compensation elements moving on.
Exhibit 2 states the methodology used in calculating the following eight elements: 1. Collection
Compensation Element; 2. Commercial Recycling Incentive Element; 3. Disposal Compensation Element;
4. Container Compensation Element; 5. Recycling Material Diversion Compensation Element 6. Organic
Waste Diversion Compensation Element; 7. Vehicle and Administration Element; 8. Fee Compensation
17
HF H CONSULTANTS LLC
MEMORANDUM
Page 4 of 9
Attachment 4
Managing Tomorrow's Resources Today
Element. HF&H review AVI's FY2023 and FY2024 rate application. No discrepancies in calculation were
found during this section of the review.
Figure 3: HF&H True Up Compensation
For Rate Change Effective
Approved Budget for
Contractor Compensation
Collection Compensation Element Excluding Officer Compensation
Collection Compensation Element - Officers Compensation Frozen
Commercial Recycling Compensation Element
Commercial Recycling Compensation Element Reduction Amount Frozen
Disposal Compensation Element Standard Formula
Container Compensation Element 321,578 330,711
Recycling Material Diversion Compensation Element
Recyclable Material Processing Cost (7/1/21- 6/30/22) 1,216,902
Recyclable Material Processing Cost (7/1/22-6/30/23) Calc 1,196,893
Organics Compensation Element All ORG Calc 1,101,963 653,628
HFH True Up Step 1
AVI Rate Model
7/1/2022 7/1/2023
FY 6/30/23 FY 6/30/24
Current Needed
Calculated
Contractor
Contractor Compensation
Compensation Ref. Page 2
$ 13,537,422 $ 14,892,240
840,000 840,000
421,795 $451,194
(421,795) (421,795)
1,353,693 1,338,234
Commercial Food Waste Compensation Element Calc - 336,200
Vehicle & Admininistration Asset Replacement Element 1,611,549 1,611,549
Total Costs before Franchise Fees 19,983,107 21,228,854
6. Fee Compensation Element
Franchise Fee
Admin Fee
Total
7 Total Calculated Compensation
Add Cost of Mid Year Dump Rate Changes
Less Former City Organic Subsidy
Rounding
Required Compensation from Rates
Forecasted Revenue using Current Rates and
Required Rate Increase
Average Rate Increase Percentage
City Fees
Current Needed
16.35% 16.35%
7.00% 7.00%
23.35% 23.35%
Dec. 2022
6,087,483 6,466,976
26,070,590 27,695,830
$ 26,070,590 $ 27,695,830
26, 873, 349
$ 822,481
3.06%
18
HF H CONSULTANTS LLC
MEMORANDUM
Page 5 of 9
Attachment 4
Managing Tomorrow's Resources Today
Methodology of Rate Adjustment
The following sections summarizes HF&H's process in calculating the rate adjustment factor. We adjusted
the financials to address the true up necessary from the compensation review. HF&H follows the
methodology set forth by the Agreement to forecast FY24-2025 rate adjustment. HF&H recommends a
0.92% in rate adjustment following methodology of AVI's FY2024 rate application:
Refuse Rate Index Adjustment (RRI)
Article 5.05.1.1 of the Agreement contains a detailed methodology for incorporating index and labor
changes in the annual rate adjustment to find the value of the RRI factor. The calculation begins with the
percent change in Labor according to the Teamster Union Local 70 Contract, vehicle maintenance index,
and consumer index. We found the operating cost categories using the audited financials. The cost of
the total expenses is used to find the weight of each cost category in relation to total cost. The weighted
percentage of the costs are multiplied by the by the percentage change in the calculated indexes to get
an RRI factor. The RRI factor used in AVI's submitted application is 4.06%.
Commercial Recycling Compensation
Article 5.05.7.4 of the Agreement states the commercial recycling compensation element shall be the
initial commercial recycling compensation element stated in Article 5.05.7.3 minus the commercial
recycling compensation reduction amount of $421,795. Article 5.05.7.3 states the annual commercial
recycling compensation element adjustment shall be calculated by multiplying the commercial recycling
compensation element times (one plus the sum of the RRI factor and the ATG (annual tonnage growth)
factor). The forecasted commercial recycling compensation element is $47,717 ($469,512 - $421,795).
Adjusting Rates to Reflect Changes in Landfill / Disposal Cost
Article 5.05.3 states annual disposal compensation element adjustment shall be calculated by
multiplying the disposal compensation element times (one plus the AT (annual tonnage) factor and
multiplying the result, (the disposal compensation element adjusted for growth), times (one plus the
ATF (annual tip fee) factor) as show in Exhibit 2. The growth of tonnage has decreased resulting in an
annual tonnage factor of -6.98% and the annual tipping fee factor is 1.82% based on the growth of
approved tip fee. The forecasted disposal compensation element is $1,267,481.
Container Compensation Element
Article 5.0535 states the container compensation element represents the amortized cost of carts and
bins over the lifetime of the Agreement and shall not be adjusted except to account for customer
growth through the use of the AG (annual growth) factor. The AG factor for year end 2023 is 1.31%.
Prior year container compensation of $330,771 is multiplied by the AG factor to get FY2024 cost. The
forecasted container compensation element cost is $335,043.
Recycling Material Diversion Compensation Element
Article 5.05.8 of the Agreement states recycling materials division compensation element is calculated
annually by multiplying (a) the actual tonnage of recyclable materials delivered by contractor in prior
19
HF H CONSULTANTS LLC
MEMORANDUM
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Attachment 4
Managing Tomorrow's Resources Today
calendar year (January 1— December 31) by the anticipated per -ton tip fee to be charge by such MRF
during the subsequent Agreement year. The forecasted recycling materials division compensation
element cost is $1,157,932.
Organic Waste Diversion Compensation Element
The organic waste is made up of two categories, commercial food waste and all other organic waste.
Both categories will be calculated in the same manor. Article 5.05.9 of the Agreement states organic
waste materials division compensation element is calculated annually by multiplying (a) the actual
tonnage of organic waste materials delivered by contractor in prior calendar year by the anticipated per -
ton tip fee to be charge by the organic waste processing facility during the subsequent Agreement year.
The forecasted commercial food waste cost is $426,423 and all other organic waste $675,540.
Vehicle and Administration Element
Article 5.18 of the Agreement states beginning July 1, 2020 the baseline Vehicle and Administration
Asset Element shall be set at $1,595,575. That amount was increased to $1,611,549 to account for
additional costs associated with SB 1383. The baseline amount shall not be subject to the annual rate
adjustment. The forecasted vehicle and administration element cost is fixed at $1,611.549.
Fee Compensation Element
Article 5.05.6 states fee compensation shall always be equal to the sum of the collection element,
disposal compensation element, and container compensation (base compensation) divided by [1 minus
the sum of the then current fee percentages] minus the base compensation. The fee compensation is
made up of the franchise fee and administrative fee.
Article 4.04.1 states the franchise fee percentage shall 16.35% with respect to revenue received for
services performed by contractor after June 30, 2021 and during the remaining term of this Agreement
unless adjusted by the City. Article 4.04.2 states the administrative fee percentage shall be 7.00% with
respect to revenue received for services performed by contractor after June 30, 2021 and during the
remaining term of this Agreement unless adjusted by the City. The forecasted fee compensation
element is $6,720,645.
Rates Projected to Meet Total Compenstion
The following table summarizes the difference in AVI's FY22-2023 audited financial total compensation
of $26,070,590 to provide franchised services and AVI's proposed cost for FY24-2025. Based on our review
of the compensation and methodology of the application described in this report, we have determined
that a recommended 0.92% overall rate increase is consistent with the rate -setting methodology
described in the Agreement.
20
HF H CONSULTANTS LLC
MEMORANDUM
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Attachment 4
Managing Tomorrow's Resources Today
Figure 4: 2 Year Forecast of Collection Service Compensation
Collection Compensation Element
Collection Comp. Element - Officer Compensation
Commercial Recycling Compensation Element
Com. Recycling Comp. Element Reduction Amount
Disposal Compensation Element
Container Compensation Element
Recycling Materials Diversion Compensation Element
Organic Waste Diversion Compensation Element
Vehicle and Administration Asset Element
Fee Compensation Element
Total Costs
FY 22-2023
$13,537,422
$840,000
$421,795
($421,795)
$1,353,693
$321,578
$1,216,902
$1,101,963
$1,611,549
$6,087,483
$26,070,590
FY 24-2025
(Proposed Costs)
$15,699,874
$840,000
$469,512
($421,795)
$1,267,481
$335,043
$1,157,932
$1,101,963
$1,611,549
$6,720,645
$28,782,204
Absolute Percent
Change Change
$2,162,452 16%
$0 0%
$47,717 11%
$0 0%
($86,212) -6%
$13,465 4%
($58,970) -5%
$0 0%
$0 0%
$633,162 10%
$2,711,614 10%
21
HF H CONSULTANTS LLC
MEMORANDUM
Page 8 of 9
Figure 5: RRI Methodology
For Rate Change Effective
Approved Budget for
Contractor Compensation
Attachment 4
Managing Tomorrow's Resources Today
Collection Compensation Element Excluding Officer Compensation
Collection Compensation Element - Officers Compensation Frozen
Commercial Recycling Compensation Element
Commercial Recycling Compensation Element Reduction Amount Frozen
Disposal Compensation Element Standard Formula
Container Compensation Element 330,711 335,043
Recycling Material Diversion Compensation Element
Recyclable Material Processing Cost (7/1/22- 6/30/23) 1,196,893
Recyclable Material Processing Cost (7/1/23-6/30/24) Calc 1,157,932
Organics Compensation Element Calc 653,628 675,540
Commercial Food Waste Compensation Element Calc 336,200 426,423
Vehicle & Admininistration Asset Replacement Element 1,611,549 1,611,549
HFH True Up Step 2
AVI Rate Model
7/1/2023 7/1/2024
FY 6/30/24 FY 6/30/25
Current Needed
Calculated
Contractor
Contractor Compensation
Compensation Ref. Page 2
$ 14,892,240 $ 15,699,874
840,000 840,000
451,194 $469,512
(421,795) (421,795)
1,338,234 1,267,481
Total Costs before Franchise Fees 21,228,854 22,061,559
City Fees
6. Fee Compensation Element I Current NeededI
Franchise Fee 16.35% 16.35%
Admin Fee 1 7.00% 7.00%
Total 23.35% 23.35% 6,466,976 6,720,645
7 Total Calculated Compensation
Add Cost of Mid Year Dump Rate Changes
Less Former City Organic Subsidy
Rounding
Required Compensation from Rates
Forecasted Revenue using Current Rates and
Required Rate Increase
Average Rate Increase Percentage
Dec. 2023
27,695,830 28,782,204
$ 27,695,830
$ 28,782,204
28, 520, 902
$ 261,302
0.92%
22
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MEMORANDUM
Page 9 of 9
Attachment 4
Managing Tomorrow's Resources Today
Recommendation
After review of AVI's financial statements, tonnage reports, route operation statistics, contractor
compensation and other supporting documentation, we recommend the City adopt a 0.92% rate increase
applied it all rates in accordance with Article 5 of the Agreement.
23
Attachment 5
Proposed vs. Current Rates
(Selected Service Levels Representing Most Common Subscriptions)
COMPARISON OF SELECTED RATES
Current (2023/2024) vs Proposed (2024/2025)
Proposed
Increase over
Current Proposed 2023/2024
Residential -Monthly Rates Rate 2024/2025 $ %
Minimum Residential (32) Gallon $42.53 $42.92 $0.39 0.92%
64 Gallon Residential $78.12 $78.84 $0.72 0.92%
96 Gallon Residential $113.72 $114.77 $1.05 0.92%
Sample rate categories represent 100% of residential customers
Commercial -Monthly Rates
32 Gallon Cart
64 Gallon Cart
96 Gallon Cart
1 Yard - 1 time / wk
2 Yard - 1 time / wk
3 Yard - 1 time / wk
3Yard -2times /wk
4 Yard - 1 Time / wk
4 Yards - 2 times / wk
$48.23
$88.58
$128.83
$206.36
$412.72
$619.08
$1,289.51
$825.44
$1,702.23
$48.67 $0.44 0.92%
$89.39 $0.81 0.92%
$130.02 $1.19 0.92%
$208.26 $1.90 0.92%
$416.52 $3.80 0.92%
$624.78 $5.70 0.92%
$1,301.37 $11.86 0.92%
$833.03 $7.59 0.92%
$1,717.89 $15.66 0.92%
Represents 75% of 2023 commercial customers
Drop Box - Rates Per Service
20 Yard Loose $1,161.40 $1,172.08 $10.68 0.92%
30 Yard Loose $1,742.10 $1,758.13 $16.03 0.92%
40 Yard Loose $2,322.80 $2,344.17 $21.37 0.92%
Represents 87% of 2023 non -compacted Drop Box Subscriptions
30 Yard Compacted $3,484.20 $3,516.25 $32.05 0.92%
Represents 16% of the 2023 compacted Drop Box Subscriptions
Handy Hauler Available To Residents $270.00 $272.48 $2.48 0.92%
24
Attachment 6
LOCAL AREA RATE COMPARISON
2024 Garbage Rate Comparison Survey (Prepared: June 6, 2024)
Comparison With Proposed Rates
Proposed
Reference 3 City Dublin % Proposed Current % Increase
Residential Pleasanton Livermore Castro Valley San Ramon Average Basic Rate From Avg Rate over Prior FY
1 Can Residential (32-35 Gallon) $ 31.55 $ 44.60 $ 53.39 $ 50.78 $ 49.59 $ 42.92 -18.30% $ 42.53 0.92%
1 Can Residential (64-70 Gallon) n/a $ 66.26 $ 92.73 $ 83.61 $ 80.87 $ 78.84 -2.51% $ 78.12 0.92%
1 Can Residential (90-96 Gallon) $ 55.04 $ 103.47 $ 132.04 $ 133.17 $ 122.89 $ 114.77 -6.61% $ 113.72 0.92%
Residential Notes:
Dublin: Basic rate includes 32-gallon garbage can (weekly pick-up);Weekly 64-gallon organics can; Weekly 64-gallon curbside recycling can;
lager size and/or additional organic and recycling carts available free upon request; compost give -back and 3 on -call bulky waste clean-ups per
year including items such as electronic waste, household batteries, tires, white and brown goods.
Livermore: FY 2023-24; Basic rate includes 32-gallon garbage can (weekly pick-up); Weekly 96-gallon organics can;
Weekly 96-gallon curbside recycling can.
San Ramon: Calendar Year 2024 Rates, Basic rate includes 32-gallon garbage can (weekly pick-up); Two weekly 64-gallon green waste can supplied by Company. ;
at no extra cost; Two 64-gallon curbside recycling and organics cans or 96-gallon can available at no extra cost, and 3 special clean-ups per year.
Castro Valley: Fiscal Year 2023-24 Rates - 32 Gallon Service includes 32 gallon trash cart, 32 gallon green/food scrap cart and 32 gallon recycling cart.
96 Gallon service inlcudes a 96 gallon trash cart, 96 gallon green/food scrap cart and a 96 gallon recycling cart. Residents can request an additional recycling cart at no additional cost
Pleasanton: FY 2023-24 Rates; 35 Gallon Service includes 35 gallon trash cart, 96 gallon green/food scrap cart and 96 gallon recycling cart. 96 Gallon service includes a 96 gallon trash cart, 96 gallon green cart
and a 96 galon recycling cart. Both services have weekly pickups
Reference 3 City Proposed % Proposed Current % Increase
Commercial Pleasanton Livermore Castro Valley San Ramon Average Dublin From Avg Rate over Prior FY
1 Yard - 1 time / wk $ 141.23 $ 130.71 $227.00 $ 249.37 $ 202.36 $ 208.26 2.91% $ 206.36 0.93%
2 Yard - 1 time / wk $ 282.42 $ 261.40 $397.84 $ 463.17 $ 374.14 $ 416.52 11.33% $ 412.72 0.93%
3 Yard - 1 time / wk $ 423.66 $ 392.12 $552.06 $ 641.25 $ 528.48 $ 624.78 18.22% $ 619.08 0.93%
3 Yard - 2 times / wk $ 882.55 $ 816.84 $1,004.58 $ 1,282.54 $ 1,034.65 $ 1,301.37 25.78% $ 1,289.51 0.93%
4 Yard - 1 Time / wk $ 564.89 $ 522.83 $847.49 $ 783.71 $ 718.01 $ 833.03 16.02% $ 825.44 0.93%
4Yards-2times/wk $ 1,176.77 $ 1,089.14 $1,617.05 $ 1,567.45 $ 1,424.55 $ 1,717.89 20.59% $ 1,702.23 0.93%
Castro Valley: charges 67% of the commercial garbage rate for recycling and 124% for organics
Dublin: charges 50% of the regular commercial rate for Organics and 25% for commercial recycling
San Ramon: charges 50% of the regular commercial rate for commercial recycling and organics
Livermore: charges for recycling and organics at 80% of the regular commerical rate.
Pleasanton: Charges 80% of the commercial rate for recycling and organics
Drop Box
20 Yard Loose $ 1,148.00 $ 780.49 $1,041.73 $ 1,627.88 $ 1,150.03 $ 1,172.08 1.92% $ 1,161.40 0.93%
30 Yard Loose $ 1,527.81 $ 1,134.61 $1,670.45 $ 1,871.63 $ 1,558.90 $ 1,758.13 12.78% $ 1,742.10 0.93%
40 Yard Loose $ 1,907.61 $ 1,488.74 $2,227.07 $ 2,115.33 $ 1,943.71 $ 2,344.17 20.60% $ 2,322.80 0.93%
30 Yard Compacted $ 2,667.19 $ 3,012.89 $3,109.17 $ 3,142.37 $ 3,088.14 $ 3,516.25 13.86% $ 3,484.20 0.93%
Pleasanton: Charges a $388 monthly rental fee
Livermore: rates do not include the cost of disposal/processing, which is assesed after collection. Staff has included an estimate cost with the above for comparison.
San Ramon: charges a one ton minimum; Staff has included a probable disposal cost for comparison purposes.
Every effort has been made to assure the accuracy of the information and comparison of similar levels of service according to our understanding of other agency rates.
Adoption of Rates for
Garbage Collection, Disposal,
and Recycling
June 25, 2024
DUBLIN
CALIFORNIA
26
Background
• Agreement with AVI provides for an annual rate
adjustment.
• Adjustments are based on CPI Indexes, number of
billed units serviced, tonnage collected and disposal
fees.
• Third Party Financial Review (every three years).
• Results in a 0.92% ($0.39 per month) increase.
Dublin Rates
• City of Dublin Basic Residential Service - $42.92
• Basic Residential Services is included on Property Tax.
Current Year
Rates
Proposed
Rates
Monthly
Difference
Annual
Difference
$42.53
$42.92
$0.39
$4.68
Financial Review
• Engaged HF&H
• Two Part Review
— Review operations and related documents
—Compensation review (audited financial
statements)
Financial Review
• Partl —Review operations and related documents
— Financial Statements
— City Fees
— Tonnage Reports
— Route Operation Statistics
— Revenue
— Billing
— Contractor Compensation Calculation
• No Discrepancies Found
30
Financial Review
• Part 2 —Compensation Review
- Industry Standard 90% operating margin
- HF&H determined revenue exceeded 90% threshold by
$292, 182.
FY 2022-23
(Actual)
FY 2022-23
(Audit)
Difference (+1-)
Total Revenue
Required
$26,362,772
$26,070,590 ($292,182)
31
Financial Review
• Reduced revenue requirements for FY 2022-23
and FY 2023-24 to calculate FY 2024-25.
FY 2022-23
(Audited)
FY 2023-24
(Audited)
FY 2024-25
Total Revenue
i Required
$26,070,590
$27,695,830 $28,782,204
32
Annual Rate Adjustments
• Refuse Rate Index Adjustment (RRI)
— Based on changes to four Consumer Price Index (CPI), weighted based on AVI's
annual costs.
• Annual Growth (AG)
— Compares revenue at two points in time (PriorYear -January & December) to
capture increase in number of units served. Note: If change is negative, set at
0%.
• Approved Tip Fee (ATF)
- Increase in per ton charges for landfill fees for waste.
• Annual Tonnage (AT)
— Change in amount of year -over -year total refuse disposed (Garbage, Organics,
Recycling).
33
Overview of Cost Elements
I. Collections Element
Cost associated with the collection of garbage, organics and recycling
including:
• Salaries & Benefits
• Equipment Operation & Maintenance
• Material Processing
• General Administration Costs
• Operating Ratio
— Annual Adjustment Calculated
• RRI Increase (RRI) &Annual Growth (AG)
34
Overview of Cost Elements
2. Commercial Recycling Elements
— To incentivize AVI to increase commercial recycling
— Annual Adjustment calculated
• RRI Increase (RRI) and Annual Tonnage (AT)
3. Container Compensation Element
— Represents the cost of replacing carts and bins
— Annual Adjustment calculated
• Annual Growth Factor (AG)
35
Overview of Cost Elements
4. Waste Disposal
— City has agreement with Waste Management
— Annual Adjustment Calculated
• Annual Tonnage (AT) and Annual Tip Fee (ATF)
5. Recycling Disposal
— Recyclable Material processed at ACI — San Leandro
• City does not have an agreement (Pay Market Rate)
— Annual Adjustment Calculated
• Annual Tonnage (AT) and Annual Tip Fee (ATF)
36
Overview of Cost Elements
6. Organics Disposal
— Non -Commercial Organics processed at Waste Management
Central Valley Compost or Altamont Pass Organic Facility
— Commercial Organics processed at Recology's Blossom Valley
Facility
• AVI has 3-year agreement in place
— Annual Adjustment Calculated
• Annual Tonnage (AT) and Annual Tip Fee (ATF)
37
Overview of Cost Elements
7. Vehicle and Administration Element
— To capture all costs associated with replacing 2/3rds of fleet and all
other capital assets
— Costs will be reconciled once vehicles are purchased
— Not updated by annual adjustments
8. Fee Element
— Amount paid to City for franchise and administrative fee
— Adjusted annually based on a percentage of AVl's revenue
38
Annual Rate Adjustment
Elements
FY 2023-24
(Audited)
FY 2024-25
(Proposed)
MCollection Element'- $15,732,240
Commercial Recycling
Compensation Element
Disposal Compensation
Element
Container Compensation
Element
$29,399
$1,338,234
$330,71 1
Recycling Disposal Element
$1,196,893
Organics Disposal Element
$989,828
Vehicle and Administration
Element
$1,61 1,549
Fee Compensation Element
$6,466,976
$16,539,874
$47,717
$ I,267,481
$335,043
$1,157,932
$1,101,963
$1,61 1,549
$6,720,645
Difference
$807,634
$I8,318
($70,753)
$4,332
($38,961)
$I 12,135
$0
$253,669
.7
DUBLIN
CALIFORNIA
1
Total
$27,695,830
$28,782,204
$1,086,374
39
Recommendation
• Conduct the Public Hearing, Deliberate and Approve
the Resolution Amending the Schedule of Service Rates
for Integrated Solid Waste Services; and
• Approve the Resolution Approving and Establishing the
Collection of Minimum Residential Garbage and
Recycling Service Fees for Fiscal Year 2024-2025.
40