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Home My WebLink About6.1 Garbage, Disposal, Recycling RatesSTAFF REPORT DUBLIN CITY COUNCIL DATE: June 7, 2011 TO: Honorable Mayor and City Councilmembers FROM: Joni L. Pattillo, City Manager File # CITY CLERK � Q 3 SUBJECublic Hearing: Adoption of Rates for Garbage Collection, Disposal, and Recycling Services Provided By Amador Valley Industries and Establishing the 2011-2012 Annual Assessment Prepared By: Roger Bradley, Senior Administrative Analyst EXECUTIVE SUMMARY: The Agreement for solid waste services between the City and Amador Valley Industries (AVI) requires the City to adopt a rate schedule, which is estimated to produce a specified revenue amount as identified in the Agreement. The City has also adopted an Ordinance which requires all parcels in the City to subscribe to weekly minimum garbage service. For residential properties that are serviced with individual containers, the City collects the annual cost of minimum service with the property tax bill. The City Council will consider adopting two separate resolutions establishing the garbage rates effective July 1, 2011 and establishing the Fiscal Year 2011-2012 refuse related property tax assessment. FINANCIAL IMPACT: The current cost of the minimum required residential can (32 gallon) would increase by $0.66 per month to $18.65 per month. As discussed in this report, this is collected on the Property Tax bill as an annual assessment of $223.80. When compared to the Tri-Valley cities of Livermore, Pleasanton, and San Ramon, the $18.65 monthly fee is 27% below the Tri-Valley average monthly rate of $25.64. The proposed Dublin commercial rate increases vary based on the service level selected. The proposed rate of $361.84 represents the average service level for a four -yard bin collected once per week and is 16% below the Tri-Valley average rate of $430.11. RECOMMENDATION: Staff recommends that the City Council: 1) Open the Public Hearing; 2) Receive the Staff Report and public testimony; 3) Close the public hearing; 4) Deliberate; 5) Adopt the Resolution Amending the Schedule for Service Rates for Integrated Solid Waste Services; and 6) Adopt the Resolution Amending and Establishing the Collection of Minimum Residential Garbage and Recycling Service Fees for Fiscal Year 2011-2012.(R6ARL /7/ G'1 Submitted y Reviewed By L-----Revieiwffi,ei By Sr. Administrative Analyst Administrative Services Director Assistant City Manager tezi Page 1 of 3 ITEM NO. 6.1 �� DESCRIPTION: In December 2004, the City executed a Collection Service Agreement with Amador Valley Industries (AVI) for service that began July 1, 2005. In June 2010, the City Council approved an extension of the agreement term, which will continue through June 30, 2020. The Agreement between the City and AVI requires the City to adopt a rate schedule, which is estimated to produce a specified revenue amount as identified in the Agreement. The Agreement provides for an annual adjustment to the total revenue based on economic indices applied to the base cost that was part of AVI's original proposal. The adjustment formula also factors in growth in the number of customers and disposal tonnage. The City has also adopted an Ordinance which requires all parcels in the City to subscribe to weekly minimum garbage service. For residential properties that are serviced with individual containers, the City collects the annual cost of minimum service with the property tax bill. This minimum service includes: weekly curbside collection of a 32 gallon garbage container; up to finro (2) organic waste carts, including food scraps (96 gallons each); up to two (2) 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 minimum residential service with monies collected from the property tax bill. GARBAGE RATE CALCULATION Garbage Rate Background The current garbage rates became effective July 1, 2010. The Agreement with AVI provides a process for addressing the compensation generated from all rate classes on an annual basis. The Agreement establishes a total annual revenue requirement for AVI with the City retaining responsibility for establishing the rates for all categories. 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 within the Agreement. The forecasting methodology compares customer counts between the finro 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. 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 2011-2012 is estimated to meet the compensation requirement of $9,310,839. This compensation is possible as a result of a proposed 3.65% increase to the residential rate category, a 12.78% increase to commercial, drop box, and other services, and a proposed 8.52% increase in the Commercial Recycling Compensation Element. A detailed description of the methodology required by the Agreement is included as Attachment 1. Detailed Comparison of Current and Proposed Rates Attachment 2 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, 2011. Page 2 of 3 Competitiveness of Dublin Rates with Neighboring Agencies As shown in Attachment 3, the proposed City of Dublin rates remain very competitive compared to rates charged for similar services in surrounding communities. In all cases, Dublin's services are at least comparable, and they are often better than the survey cities. For example, Pleasanton does not offer any bulky waste pick-ups, and Livermore and San Ramon charge extra for many items, such as electronic waste and appliances, which AVI will pick up free of charge for Dublin residents. Therefore, the City of Dublin customers receive more services. For most rate categories, the proposed City of Dublin rates are similar and in all cases below the average of the Tri-Valley agencies surveyed. Annual Fee for Minimum Residential Garbage Service The City Council will need to establish the annual fee, which is collected with the property tax for residential properties, separately from the rates for other levels of service. The Proposed fee for basic residential service for Fiscal Year 2011-2012 is $223.80, which is collected in finro installments on the property tax bill. The proposed annual cost equates to $18.65 per month. This is a$0.66 per month increase (3.65%) over the rate levied in Fiscal Year 2010-2011. This base rate includes $0.25 per month, which is collected for the purpose of funding the cost associated with collection of the property tax bill. These funds are not paid to AVI. In addition, the cost of collection and delinquencies for the basic service are expected to be covered from the following sources: 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. Historical Annual Fee for Minimum Garbage Service Collected with Property Tax Bill 2009/10 2010/11 Proposed 2011/12 $171.00 $215.88 $223.80 Staff recommends that the City Council adopt the Resolution establishing the Fiscal Year 2011- 2012 solid-waste-collection rates (Attachment 4) and adopt the Resolution establishing the annual assessment for the required minimum level of garbage service (Attachment 5). NOTICING REQUIREMENTS/PUBLIC OUTREACH: A notice was placed in the Valley Times on May 28, 2011 and June 4, 2011, notifying the community of the City Council's consideration of the proposed rates. ATTACHMENTS: 1. Methodology Used For Fiscal Year 2011-2012 Rate Adjustment 2. Proposed vs. Current Rates 3. Tri-Valley Rate Comparison 4. Resolution Amending the Schedule of Service Rates for Integrated Solid Waste Services 5. Resolution Approving and Establishing the Collection of Minimum Residential Garbage and Recycling Service Fees For Fiscal Year 2011-2012 Page 3 of 3 / llv METHODOLOGY USED FOR FISCAL YEAR 2011-2012 GARBAGE RATE ADJUSTMENT~ IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst How Adiustment Factors Are Applied to Elements That Comprise Total Compensation The Agreement with AVI, as structured with the Company, initially provides a lump sum figure to provide all services in the Agreement. The initial rates were established to generate the annual revenue based on the initial level of customers. As new customers are added, .the Company also receives revenue for those services. In accordance with section 5.14 of the Agreement, the Company retains any compensation in excess of what is calculated. If actual compensation is less than calculated, the Company is not entitled to any additional revenues. Annually, there is a process established where a revised total compensation figure is developed. This calculation takes into consideration changes in the number of accounts serviced as well as adjustments to four elements. The Agreement divides compensation provided to AVI into the following five Elements: 1. Collection Compensation Element 2. Commercial Recycling Element 3. Disposal Compensation Element 4. Container Compensation Element 5. Fee Compensation Element 1. Methodoloqv for Adiustinq Rates to Reflect Chanqes In Collection Costs The Agreement with AVI contains a very detailed methodology for incorporating economic changes into the annual rate adjustments. Specifically, two calculations are made as part of a larger formula. The first is the Refuse Rate Index Adjustment (RRI) and the second an Annual Growth (AG) factor. On July 1, 2011, the agreement provides for an annual adjustment to Collection Compensation. The Agreement also details the time period to be used in making the annual adjustments. Steps Required to Calculate the RRI Factor The weighted RRI factor cannot exceed 10%, and it is calculated based on the weighted percentage change in specific indices multiplied by the costs associated with key company expenses. The following tables provide a summary description of how these factors are interrelated: STEP 1: INDICES USED IN RRI CALCULATION Operating Cost Category Index Used % Index Change @ To Produce A Wei hted Ad'ustment 1213112010 LABOR Labor - Teamsters Union Local 70 Contract 6.63°/a VEHICLE REPLACEIVIENT Transportation Equipment-Truck & Bus Bodies _0.23% Sold Se aratel w u141301 VEHICLE MAINTENANCE Machinery & Equipment-Parts, Attachments 2 97% and Accessories w u11440378 ALL OTHER Consumer Price Index - All Urban Consumers: San Francisco-Oakland-San Jose, CA 1.58% cuura422sa0 ~ ~! ~~,~~ ~ 1 ATTACHMENT 1 ~ ~~ METHODOLOGY USED FOR FISCAL YEAR 2011-2012 GARBAGE RATE ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst The Company provides the City with their expenditures in each of these areas over Calendar Year 2010. These costs are AVI expenses and exclude disposal costs or fees paid to the City. The total costs for the year are used to determine the weighting to be applied for each of the indices. The following table shows the actual weighting used in the 2011/12 calculation. STEP 2: RRI WEIGHTING FACTOR BASED ON RELATIONSHIP TO TOTAL COSTS Operating Cost Category AVI $ % Total Expenses re orted Wei htin Factor LABOR $ 2,428,969 43.24% VEFiICLE REPLACEMENT 382,382 ~ 6.81 % VEHICLE MAINTENANCE 930,786 16.57% ALL OTHER 1,875,219 33.38% TOTAL 5,617,356 100% As mentioned earlier, these factors are applied on a weighted basis. The index factor for each cost category is multiplied by the weighting factor. The result will produce the RRI, which per the agreement cannot exceed 10%. The following table shows the 2011/12 results: STEP 3: RRI CALCULATION (CANNOT EXCEED 10%) [Index Change multiplied By Weighting Factor] Operating Cost Category % Index % Total RRI Change @ Expenses 12/31/2010 (Weighting Index Change Factor) X Wei htin Factor LABOR 6.63% 43.24% 2.87% VEHICLE REPLACEMENT -0.23% 6.81 % -0.02% VEHICLE MAINTENANCE 2.97% 16.57% 0.49% ALL OTHER 1.58% 33.38% 0.53% TOTAL 3.87% Steps Required to Calculate the Annual Growth (AG) Factor The Annual Growth factor uses a formula that compares revenue at two points in time. The "Beginning Calculated Revenue" equals the current rates multiplied by the census of January 2010. This is compared to the "Ending Calculated Revenue". The Ending Calculated Revenue is equal to the current rates multiplied by the December 2010 number of accounts served. The adjustment reflects increases in the number of billed units served. The methodology is relatively straight forward. The Agreement with AVI included an exhibit which lists various service events. For example, it included the number of single family basic service units, number of commercial bins by size, and frequency of service, etc. These are then 2 ATTACHMENT 1 1~ METHODOLOGY USED FOR FISCAL YEAR 2011-2012 GARBAGE RATE ADJUSTMEN IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst multiplied by the appropriate monthly rate. Residential service is a bundled rate for recycling and garbage and, therefore, recycling is not included in the calculation. Moreover, each single family unit is calculated at the Basic Rate regardless of whether they may have multiple recycling or green waste bins. Conversely, this is the first year that the commercial recycling census has been included within the growth factor calculation. For the purpose of calculating growth, commercial recycling bins are considered to have the same rate as commercial garbage bins with the increase in bins from year to year factored within this formula. For the 2011/2012 adjustment, the Agreement provides for the calculation to be done based on the actual Coflection census data as of January 2010 and as of December 2010. The rates used for this comparison are the rates in effect on July 1, 2010. The 2011/2012 calculation showed that the "Beginning Calculated Revenue", or the revenue collected by AVI all services provided for that month, based on the January 2010 census was $960,705 and the "Ending Calculated Revenue" based on the December 2010 census was $936,212. This results in a 2011/2011 Annual Growth Factor of -2.55%. [$936,212 - $960,705 =-$24,493; -24,493/960,705 =-.0255] Because the agreement does not allow for negative growth, the AG Factor will be set to 0.00%. Application of RRI and AG to Collection Compensation Element The 2010/2011 Collection Compensation Element was $5,655,122. In accordance with the Agreement, this amount is first adjusted by the Annual AG Factor [5,655,122 (1+.000) _ $5,655,122] and then that total is escalated by the RRl factor. [$5,655,122 * 1.0387 = $5,873,975]. This amount then flows into the projected total compensation shown in Section 6 of this report. 2. Methodoloqv for Adiustinq Commercial Recvclinq Compensation The City has agreed to provide a compensation amount to AVI for the City's Commercial Recycling Program. This amount is escalated each year by the RRI factor, which is calculated as described above, and the growth in commercial recycling tonnage. The commercial recycling growth is calculated based on the total tonnage at the end of each calendar year over the total tonnage for the previous. For Calendar Year 2009, the total recycling tons collected was 1,989.88. In 2010, AVI collected 2,082.35. This results in a increase of 5.14% (2,082.35 - 1,989,88 = 92.47; 92.47 / 1,989.88 =.0465). Thus, the Commercial Recycling Growth Factor is 4.65%, which is added to the RRI factor with the combination of the factors used to inflate the previous year's Commercial Recycling Program compensation amount (0.0465 + 0.0387 = 0.0852; $259,263 * 0.0852 = $22,081; $259,263 + $22,081 =$281,344). This amount then flows into the projected total compensation shown in Section 6 of this report. 3 ATTACHMENT 1 METHODOL Y ~ '~ OG USED FOR FISCAL YEAR 2011-2012 GARBAGE RATE ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst Commercial Recvclinq Compensation Continued AVI Commercial Recyclin Compensation for FY 2011-2012 Commercial RRI Rec clin Com ensation Element Year Recycling F t AVI C Effective Tons Growth ac or omp Date 2005 1418 Base Year $150,000 2006 1454 2.55% 3.60% $159,225 2007 1832 25.94% 2.89% $205,130 7/1/2008 2008 2097 14.53% 5.00% $245,189 7/1 /2009 2009 1990 0.00% 5.74% $259,263 7/1/2010 2010 2082 4.65% 3.87% $281,344 7/1 /2011 3. Methodoloav for Adiustina Rates to Reflect Chanaes In Landfill / Disposal Costs Landfill disposal costs are established under a separate agreement between the City of Dublin and Waste Management, Inc. AVI is required to use the disposal facility designated by the City. AVI makes the payments for disposal costs and pays the price negotiated by the City under the separate agreement with Waste Management. Since these are expenses incurred by AVI, these costs must also be considered in setting the rates. The landfill component has the following two factors that impact the rates: 1) Tip Fee Factor, and 2) Annual Tonnage Factor. Approved Tip Fee(ATF) Factor In 2011/2012, the cost per ton for landfill fees will increase by $0.62 per ton. The increase comes from two separate categories: increases in governmental regulatory fees and increases as provided in the Disposal Agreement with Waste Management. The ,increase in regulatory fees is $0.20 per ton. The increase as provided in the disposal agreement with Waste Management is $0.42 per ton. Therefore, the total disposal cost for 2011/2012 will be $33.51 per ton. Of this amount, $19.14 (58% of the per ton fee) is related to regulatory fees and $14.37 reflects the portion paid to Waste Management for landfill services. The portion paid to Waste Management can increase only as provided in a Disposal Agreement befinreen the City and Waste Management. The regulatory fees are levied by other agencies such as StopWaste.Org; County Local Enforcement Authority; California Department of Resources Recycling and Recovery; Household Hazardous Waste Fees; County Business License; etc. This results in an ATF Factor of 1.89%. [2010 Rate =$32.89 /ton and 2011 Rate =$33.51 /ton. $33.51 - 32.89 = 0.62; 0.62 / 32.89 = 0.0189]. Annual Tonnage (AT) Factor The tonnage increase for the 2011/12 adjustment is based on disposal reports for the period January 1, 2010 - December 31, 2010 and is the summation of the monthly tonnages over this period. This amount is then compared against the previous year's disposal tonnage. The 4 ATTACHMENT 1 METHODOLOGY USED FOR FISCAL YEAR 2011-2012 GARBAGE RATE ADJUSTMEN~ /`~ ~ IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst total disposal in 2010 was 23,987 tons, and in 2009, it was 24,384 tons. This results in an AT Factor of -1.63%. [23,987 - 24,384 = -397; -397 / 24,384 = - 0.0163). ~ Application of ATF and AT Factors to Disposal Compensation Element The Landfill Compensation Element was $802,007 in 2010. In accordance with the Agreement, this amount is first adjusted by the Annual AT Factor [(802,007 *-0.0163) + 802,007 =$788,934] and then that total is escalated by the ATF factor. [$788,934 * 1.0189 = $803,845]. This amount then flows into the projected total compensation shown in Section 6 of this report. 4. Methodoloqv Addressinq Container Compensation Element This element represents the amortized cost of carts and bins over the life of the agreement. The allowed amount is modified by the AG facto"r. As noted above, this factor was calculated at 0.00% for the 2011/12 adjustment. For the 2010/11 adjustment, the amount designated for the Container Element was $194,981. Adjusting this amount by the AG Factor, there will be no increase in the calculated amount to be recovered from the rates in 2011/12. 5. Methodoloav Addressinq Fee Compensation Element As part of the Agreement with the City of Dublin, AVI is required to remit franchise taxes and certain fees to the City of Dublin based on a percentage of its revenue. Therefore, as the company rates go up the Fee Element must also be adjusted in order to recognize the fees to be paid on the new revenue. The Fee Compensation Element shall equal: 1. (Collection + Commercial Recycling Element + Disposal + Container Elements) _ "base compensation" 2. "base compensation" is divided by (one (1) minus the "Current Fee Percentage") [Where the "Current Fee Percentage" = 23.35%] 3. subtract "base compensation" from the obtained value For 2011/12, the Fee Compensation Element Calculation is as follows: (5,873,975 + 281,344 + 803,845 + 194,981) _ $7,154,145 (base compensation) $7,154,145 / (1- 23.35%) _ $7,154,145 / (76.65%) $7,154,145 / 76.65°!0 = $9,333,523 $9,333,523 - $7,154,145 = $2,179,378 The adjusted total compensation for the Fee Element is shown in Section 6 below. 6. Citv Process of Developinq Rates Proiected to Meet Total Compensation As discussed above, certain adjustment factors are applied to each area. The starting point is the base compensation from the previous agreement year as required under the Agreement. 5 ATTACHMENT 1 _ ~ / METHODOLOGY USED FOR FISCAL YEAR 2011 2012 GARBAGE RATE ADJUSTMENT ~~ IN ACCORDANCE WITH AGREEMENT BETWEEN CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES Report Submitted To: City Council June 7, 2011 Prepared By: Roger Bradley, Senior Administrative Analyst The adjustment methodology is shown in the table below. As the table shows, the Fiscal Year 2011-2012 rate adjustment process results in the need to.establish rates at a level expected to generate $9,333,523 in revenue. This amount is $316,728 more than the compensation generated as part of the rate adjustment for Fiscal Year 2010-2011 or the previous year. Prior to establishing the compensation that will be generated from the rates, an adjustment is made for grant revenues that reduce the Company's operating eost. The amount of revenue required from rates is partially offset by one grant. A$350,000 grant was obtained at the beginning of the agreement to reduce the cost of implementing a natural gas truck fleet. The total grant is amortized over the initial 7-year period of the Agreement and, therefore, $50,000 is credited against required revenue in 2011/12. This will be the last year this credit will be added to the rate structure. The final step in developing the rates is to test the total annual expected revenue to the Company, when the rates are increased by different amounts. It is necessary for the adjustment to be at a level so that the total annual projected compensation to the Company will equal $9,333,523. The calculation for Fiscal Year 2011-2012 is performed using the customer subscription figures as of December 2010. Staff has determined that a 3.65% rate increase to residential rates and a 12.78% increase to commercial, drop box, and other service categories will generate the required revenue. It is not possible to exactly match the targeted annual revenue given the various subscription levels and fees. The test calculation shows that when the grant funds of $50,000 are added to the new rates that the total projected compensation is $9,333,686. An additional cost of $27,316 was included in the rate compensation model to offset costs in the timing of landfill fee increases, which have been paid by AVI and were not included in the 2010/11 rate model. Historical Comparison of Compensation Elements 2009/2010 - 2011/2012 Compensation Element 2009/2010 Compensation 2010/2011 Compensation Absolute Change Percent Change 2011/2012 Proposed Com Absolute Change Percent Change Collection $ 5,348,139 $5,655,122 $306,983 5.74% $5,873,975 $218,853 3.87% Commercial Rec clin ~ 245,189 $259,263 $14,074 5.74% $281,344 $22,081 8.52% Dis osal $ 765,098 $802,007 $36,909 4.82% $803,845 $1,838 0.23% Container $ 194,981 $194,981 $0 0.00% $194,981 $0 0.00% Fee $ 1,211,293 $2,105,422 $894,129 73.82% $2,179,378 $73,956 3.51 % TOTAL $7,764,700 9,016,795 $1,252,095 16.13% $9,333,523 $316,728 3.51% 6 ATTACHMENT 1 ~ (~ ~ (Selected Service Levels Representing Most Common Subscriptions) COMPARISON OF SELECTED RATES Current (2010/11) vs Proposed (2011 /12) Proposed Increase over Current Proposed 2010/2011 Residential - Monthiv Rates Rate 2011/2012 $ % Minimum Residential (32) Gallon $17.99 $18.65 $0.66 3.67% 64 Gallon Residential $33.04 $34.25 $1.21 3.66% Sample rate categories represent 96% of residential customers Commercial - Monthlv Rates 1 Yard - 1 time / wk $80.21 $90.46 $10.25 12.78% 2 Yard - 1 time / wk $160.42 $180.92 $20.50 12.78% 3 Yard - 1 time / wk $240.63 $271.38 $30.75 12.78% 3 Yard - 2 times / wk $501.22 $565.27 $64.05 12.78% 4 Yard - 1 Time / wk $320.84 $361.84 $41.00 12.78% 4 Yards - 2 times / wk $661.64 $746.19 $84.55 12.78% Sample rate categories represent 77% of commercial customers Drop Box - Rates Per Service 20 Yard Loose $451.40 $509.00 $57.60 12.76% 30 Yard Loose $677.10 $763.50 $86.40 12.76% 40 Yard Loose $902.80 $1,018.00 $115.20 12.76% Represents 74 % of non-compacted Drop Box Subscriptions 30 Yard Compacted $1,353.30 $1,526.40 $173.10 12.79% Represents 32% of the compacted Drop Box Subscriptions Handy Hauler $104.95 $118.36 $13.41 12.78% Attachment 2 ATTACHMENT 3 - RATE COMPARISON 2011 Garbage Rate Comparison Survey (Prepared May 19, 2011) Comparison With Proposed Rates Proposed Dublin % Proposed C urrent Residential Livermore Pleasanton San Ramon Average Basic Rate From Avg Rate 1 Can Residential (32-35 Gallon) $ 22.96 $ 29.13 $ 24.84 $ 25.64 $ 18.65 -27.27% $ 17.99 1 Can Residential (64-70 Gallon) $ 48.34 n/a $ 43.24 $ 45.79 $ 34.25 -25.20% $ 33.04 1 Can Residential (90-96 Gallon) $ 80.21 $ 34.57 $ 69.20 $ 61.33 $ 49.85 -18.71% $ 48.09 % Dublin Customers Covered By Sample Rate Categories: 100% 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 andlor additional organic and recycling carts available 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: Basic rate includes 35-galion garbage can (weekly pick-up); Weekly 96-gallon organics can; Weekly 64-gallon curbside recycling can; and 3 on-call clean-ups per year . San Ramon: Basic rate includes 35-gallon garbage can (weekly pick-up); Weekly 96-gallon green waste can supplied by Company; Weekly 64-gallon curbside recycling can, and 3 special ciean-ups per year. % Increase over Prior FY 3.67% 3.66% 3.66% Pleasanton- effective October 2009: 35 Gallon Service includes 35 galion trash cart, 64 gallon greenlfood scrap cart and 96 gallon recycling cart. 96 Gallon service inlcudes a 96 gallon tresh cart, 64 gallon green/food scrap cart and a 96 gallon recycling cart. Both services have weekly pick up. Residents still have the option to drop off recyclables at the transfer station to recieve credit on their PGS invoice proivdeded that the recyclabes weigh 75 Ibs or more. no special curbside clean-ups . 3 City Proposed % Proposed Current % Increase Commercial Livermore Pleasanton Sa n Ramon Average Dublin From Avg Rate over Prior FY 1 Yard - 1 time / wk $ 103.30 $138.59 $ 115.19 $ 119.03 $ 90.46 -24% $ 80.21 12.78% 2 Yard - 1 time / wk $ 206.58 $277.00 $ 213.93 $ 232.50 $ 180.92 -22% $ 160.42 12.78% 3 Yard - 1 time / wk $ 309.87 $395.79 $ 296.13 $ 333.93 $ 271.38 -19% $ 240.63 12.78% 3 Yard - 2 times / wk $ 645.53 $731.97 $ 592.30 $ 656.60 $ 565.27 -14% $ 501.22 12.78% 4 Yard - 1 Time / wk $ 413.17 $515.29 $ 361.86 $ 430.11 $ 361.84 -16% $ 320.84 12.78% 4 Yards - 2 times / wk $ 860.70 $963.53 $ 723.73 $ 849.32 $ 746.19 -12% $ 661.64 12.78% % Dublin Customers Covered By Sample Rate Categories: 71% . __ , . _.._, .. : _, _. . ._. w_ __, . Dublin's rates include free commercial recycling San Ramon's rate does not include the cost of commercial recycling as the amount varies depending on the hauler used Livermore charges for recycling at 15% of the regular commerical rate. Drop Box 20 Yard Loose $ 429.85 $517.20 $ 664.56 $ 537.20 $ 509.00 -5% $ 451.40 12.77% 30 Yard Loose $ 644.77 $775.80 $ 689.86 $ 703.48 $ 763.50 9% $ 677.10 12.77% 40 Yard Loose $ 859.70 $1,034.40 $ 715.14 $ 869.75 $ 1,018.00 17% $ 902.80 12.77% 30 Yard Compacted $ 1,934 32 . __ . _ __ .. . .. $1,551 60 .w_ . . .. $ . ._ 847.91 .~ , ..._ $ ~. 1 444 61 _. . . _ ...._._. $ _ _... 1,526 40 . _ .. ...~.. - - _ 6% , _ $ .. 1,353~.30 . 12.80% . __ ____ . % Dublin Custome~s Coveted BySample Rate Categories: 84% ~ ~ Livermore rates do not include the cost of disposal/processing, which is assesed after collection. 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. (~O ~ ATTACHMENT 3 ~ b~ l~ RESOLUTION NO. XX - 11 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 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, the Agreement with AVI provides for an adjustment to the rates each July 1St in accordance with specified formulas; and WHEREAS, the City has calculated the required rate adjustment necessary to generate the agreed to compensation and applied not more than a 3.7% adjustment to the residential rates, and not more than a 12.8% adjustment to commercial, roll-off, and other collection service rates; and WHEREAS, on June 7, 2011, 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, upon the effective date, July 1, 2011, 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 7th day of June, 2011, by the following vote: AYES: NOES: ATTACHMENT 4 1 ~~ l~ ABSENT: ABSTAIN: ATTEST: Mayor City Clerk ~l ~~ 2011l12 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, 2011. 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. 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. Company Minimum Residenlial 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 : $ 18.65 (Rate includes $0.25 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 $15.60 per month (Total -$ 34.25 per month) 96 Gallon Garbage Container: Minimum Cost Plus $31.20 per month (Total -$ 49.85 per month) Residents may request a second garbage container which will be charged at the same rate as a first.container based on the Second Container: size requested. Additional Large Item Collection: Residents may request additionat large item collection services for a fee of : $12.25 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: $21.15 64 Gallon Container: $38.83 96 Gallon Container: $56.48 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. Rate Resolution Exhibit A I l~ a Size iF Times Size # Times # Yards Per Wk Base Monthly Rate # Yards Per Wk Base Monthly Rate 1 1 $90.46 4 1 $361.84 1 2 $203.43 4 2 $746.19 1 3 $316.40 4 3 $1,130.54 1 4 $429.37 4 4 $1,514.89 1 5 $542.34 4 5 $1,899.24 1 6 $655.31 4 6 $2,283.59 2 1 $180.92 6 1 $542.76 2 2 $384.35 6 2 $1,108.03 2 3 $587.78 6 3 $1,673.30 2 4 $791.21 6 4 $2,238.57 2 5 $994.64 6 5 $2,803.84 2 6 $1,198.07 6 6 $3,369.11 3 1 $271.38 7 1 $633.22 3 2 $565.27 7 2 $1,288.95 3 3 $859.16 7 3 $1,944.68 3 4 $1,153.05 7 4 $2,600.41 3 5 $1,446.94 7 5 $3,256.14 3 6 $1,740.83 7 6 $3,911.87 Organic material is charg ed at 75% of the Commercial Service rate. OTHER COMMERCIAL SERVICES: Rates for additional requested services. Container Push: $ 8.23 Lock & Key: $ 4.94 Excess Waste (Cu. Yd): $ 27.01 per Cubic Yard Excess Cart Exchange: $ 8.23 Excess Bin Exchange: $ 32.92 Excess Bin Cleaning: $ 41.13 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: Additional Bin Rental Per Week: $27.36 Per Week Excess Per Yard if Filled Above Water Level $118.36 Cost For Additional Dump: $85.81 Per Pick-up $27.01 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: $25.45 Compacted: $50.88 Organic material is charged at 75% of the non-compacted or compacted rate as appropriate. MISCELLANEOUS DROP BOX CHARGES Relocation of Drop Box $69.95 Per Request Weekly Drop Box Container Rental - After 1st Week $27.36 Per Week Cancel Auto Pick-up W ithout Notice $88.13 Per Event Handy Hauler Extra Week Rental $27.36 Per Week Standby Time $114.86 Per Hour Rate Resolution Exhibit A l3 I~ RESOLUTION NO. XX - 11 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN **********~ APPROVING AND ESTABLISHING THE COLLECTION OF MINIMUM RESIDENTIAL GARBAGE AND RECYGLING SERVICE FEES FOR FISCAL YEAR 2011-2012 WHEREAS, the City of Dublin is mandated by the State of California, under AB 939, to reduce the amount of solid waste going into the landfill; and WHEREAS, through the Mandatory Garbage 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 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, in accordance with California Constitution Article XIII C(Proposition 218) Section 6(2), the City provided written notice to all affected property owners on March 18, 2005 prior to adopting the 2005/2006 rate structure which included a provision for future increases based on changes in specified indices as outlined in the agreement with AVI; and WHEREAS, the City Council has considered this action as part of a noticed public hearing on June 7, 2011. . 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. ATTACHMENT 5 1 1 ~ ~ PASSED, APPROVED AND ADOPTED this 7th day of June, 2011, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor 1 1 ~ 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 $215.88 per year will increase $7.92 for a total of $223.80 for 2011-2012. The annual assessment equates to a monthly increase of $0.66, from $17.99 to $18.65. The Agreement with the Company provides for annual adjustments to the rates based upon annual changes in five separate indices, four of which are maintained by the Bureau of Labor Statistics (Refuse Rate Index), plus pass-through disposal costs. The five indices account for cost changes in the following categories: labor; fuel and oil; vehicle replacement; vehicle maintenance; and all other costs. In order to determine the fee, the City estimates the total revenue required to pay the Garbage Company for Minimum Service to all residential units that are eligible to use the service, according to the terms of the agreement with AVI. 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 receiv.e 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. - Exhibit A 3 !~ ~~ ~ 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 ANNUAL FEE Each Single Family Residence $ 223.80 Each Condominium / Townhouse Unit $ 223.80 Each Duplex (2 Units) $ 447.60 Each Duplex (5 or More Units) ~223.80 times the number of units