HomeMy WebLinkAboutItem 6.1 - 3184 AVI Annual Rate Adoption
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STAFF REPORT
CITY COUNCIL
DATE: June 16, 2020
TO: Honorable Mayor and City Councilmembers
FROM:
Linda Smith, City Manager
SUBJECT:
Adoption of Rates for Garbage Collection, Disposal, and Recycling
Services Provided by Amador Valley Industries and Establishing the 2020-
21 Annual Assessment
Prepared by: Jay Baksa, Assistant Administrative Services Director
EXECUTIVE SUMMARY:
The City Council will consider adopting two separate resolutions establishing the
garbage rates effective July 1, 2020 and establishing the Fiscal Year 2020-21 refuse-
related property tax assessment.
STAFF RECOMMENDATION:
Conduct the public hearing, deliberate, and adopt the Resolution Amending the
Schedule of Service Rates for Integrated Solid Waste Services; and adopt the
Resolution Approving and Establishing the Collection of Minimum Residential Garbage
and Recycling Service Fees for Fiscal Year 2020-21.
FINANCIAL IMPACT:
The annual rate adjustment for the Fiscal Year 2020-21 will result in a 21.83% increase
for all rates. The rate increase includes the costs associated with the Sixth Amendment
to the Collection Service Agreement between the City of Dublin and Amador Valley
Industries, LLC, which is included on the June 16, 2020 City Council agenda as a
separate item, as well as adjustments for CPI index increases and costs such as labor
and waste disposal. The residential garbage and recycling service fees, which are
collected on the Property Tax bill as an annual assessment, will increase by $6.29 per
month on the required residential 32-gallon can to a total of $35.11 per month. When
compared to the Tri-Valley cities of Livermore, Pleasanton and San Ramon, the $35.11
monthly fee is 1.82% below the Tri-Valley average monthly rate of $35.76. The
proposed Dublin commercial rate increases vary based on the service level selected.
The proposed rate of $170.36 represents the average service level for a one -yard bin
collected once per week and is 13% above the Tri-Valley average rate of $150.29.
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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 continues to June 30, 2020. At the
meeting of August 21, 2018, the City Council discussed a request by AVI to begin
negotiations with the City to extend the agreement in order to make necessary
investments in new equipment over the next several years. The City Council directed
Staff to bring back a review of the existing contract arrangement, along with a brief
discussion of potential focus areas of contract negotiations. That item was brought back
to the City Council on November 8, 2018, highlighting the main components that would
be included in a contract extension, including capital equipment replacement,
operational cost increases, and incorporation of future local and state requirements. The
City Council then directed Staff to proceed with negotiations on a contract extension. At
the April 21, 2020, meeting Staff presented the terms of the final contract negotiations.
The result of those negotiations is a Sixth Amendment to the Collection Services
Agreement (Amendment) which is presented in a separate item on the June 16, 2020
City Council agenda. The rates presented in this Staff Report are in accordance with the
Amendment.
Setting the New Baseline
The Amendment includes a re-set of baseline compensation, with a rate structure that is
flexible enough to adapt to changes in the refuse and recycling markets. The cost
elements contained in the original agreement have been m odified, and new elements
have been added. Costs for capital equipment replacement, operational cost increases,
additional program costs, and the incorporation of future local and state requirements
were calculated and applied to the baseline compensation. It should be noted that the
creation of new elements shifts costs that would have otherwise been factored into
other elements.
Original Cost Elements vs. Updated Cost Elements
Original Cost Elements Updated Cost Elements
Collection Element Collection Element
Commercial Recycling Element Commercial Recycling Element
Disposal Element Disposal Element
Container Element Container Element
Fee Element Fee Element
(NEW) Recycling Disposal Element
(NEW) Organics Disposal Element
(NEW) Vehicle and Administration Element
Page 3 of 4
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, 2020.
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. These comparisons, included
in Attachment 3, show that the proposed City of Dublin rates remain competitive
compared to rates charged for similar services in surrounding communities. It should be
noted that these comparisons are not necessarily like for like; for example, San Ramon
is in the beginning of implementing a new long term agreement, and Livermore has
delayed adjusting their rates due to COVID-19 (and for their commercial customers
Livermore now charges recycling at 75% of the garbage rate). Overall, Dublin still
remains competitive and the services offered are at least comparable to, and are often
better than, the surveyed cities. For instance, San Ramon and Livermore charge extra
for many items, such as electronic waste and appliances, which AVI will pick up at no
additional cost for Dublin residents.
Minimum Residential Garbage Service
All properties in the City are required to have 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 2020 -21 is
$421.32, which is collected in two installments on the property tax bill. This equates to
$35.11 per month, which is $75.48 per year ($6.29 per month) more than the rate levied
in Fiscal Year 2019-20, as shown here:
Historical Annual Fee for Minimum Garbage Service Collected with
Property Tax Bill
2018-19
2019-20
Proposed
2020-21
Annual
Change
Monthly
Change
$313.08 $345.84 $421.32 $75.48 $6.29
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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.
Resolutions
Included in this Staff Report (Attachments 4-6) are the annual resolutions that, with City
Council adoption, will establish the solid waste collection rates and the required
minimum level of garbage service for the next fiscal year.
STRATEGIC PLAN INITIATIVE:
None.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
A notice was placed in the East Bay Times on June 6, 2020 and June 13, 2020,
notifying the community of the City Council’s consideration of the proposed rates.
ATTACHMENTS:
1. Methodology Used for Fiscal Year 2020-21 Annual 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. Exhibit A to the Resolution
6. Resolution Approving and Establishing the Collection of Minimum Residential
Garbage and Recycling Service Fees for Fiscal Year 2020-21
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 1
Contractors compensation for amended agreement year that begins July 1, 2020
The Sixth Amendment to the Collection Service Agreement (Amendment) between the City of
Dublin and Amador Valley Industries, LLC, provides for an amount of compensation as a
lump sum figure for the agreement year that begins July 1, 2020. The total compensation was
calculated by identifying the cost of implementing the terms and conditions of the Amendment
and then applying the annual rate adjustment to those costs. The costs in the Amendment as
agreed upon were as follows:
Updated Cost Element Cost Of Terms of Amendment
Updated Cost Elements FY 2019-20 FY 2020-21
(Amendment Costs)
Collection Element $10,007,091 $12,626,531
Commercial Recycling
Compensation Element
$607,266 $0
Disposal Compensation
Element
$1,295,959 $1,295,959
Container Compensation
Element
$272,645 $308,481
Extraordinary Adjustment $2,572,716 $0
(NEW) Recycling Disposal
Element
N/A
$1,484,670
(NEW) Organics Disposal
Element
N/A $370,659
(NEW) Vehicle and
Administration Element
N/A $1,595,575
Fee Compensation Element $4,495,043 $5,386,455
TOTAL $19,250,720 $23,068,330
How Adjustment Factors Are Applied to Elements That Comprise Total Compensation
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 seven elements. The Amendment divides compensation
provided to AVI into the following eight Elements:
1. Collection Compensation Element
2. Commercial Recycling Incentive Element
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 2
3. Disposal Compensation Element
4. Container Compensation Element
5. Recyclable Material Diversion Compensation Element
6. Organic Waste Diversion Compensation Element
7. Vehicle and Administration Element
8. Fee Compensation Element
1. Methodology for Adjusting Rates to Reflect Changes In Collection Costs
The Amendment 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 factor. On July 1, 2020, the Amendment 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
(To Produce A Weighted Adjustment)
% Index Change @
12/31/2019
LABOR Labor - Teamsters Union Local 70 Contract 7.53%
VEHICLE REPLACEMENT Transportation Equipment-Truck & Bus Bodies
Sold Separately (wpu141301) 5.31%
VEHICLE MAINTENANCE Machinery & Equipment-Parts, Attachments
and Accessories (wpu11440378) 4.01%
ALL OTHER Consumer Price Index - All Urban Consumers:
San Francisco-Oakland-Hayward, CA
(CUURS49BSA0)
3.31%
The Company provided the City with their expenditures in each of these areas over Calendar
Year 2019. 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 FY 2020-21
calculation.
STEP 2: RRI WEIGHTING FACTOR BASED ON RELATIONSHIP TO TOTAL COSTS
Operating Cost Category AVI $
reported
% Total Expenses
(Weighting Factor)
LABOR $4,738,408 42.00%
VEHICLE REPLACEMENT $296,530 2.63%
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 3
VEHICLE MAINTENANCE $2,374,551 21.05%
ALL OTHER $3,872,450 34.32%
TOTAL $11,281,939 100%
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 FY 2020-21
results:
STEP 3: RRI CALCULATION (CANNOT EXCEED 10%)
[Index Change multiplied By Weighting Factor]
Operating Cost Category % Index
Change @
12/31/2019
% Total
Expenses
(Weighting
Factor)
RRI
Index Change
x
Weighting Factor
LABOR 7.53% 42.00% 3.16%
VEHICLE REPLACEMENT 5.31% 2.63% 0.14%
VEHICLE MAINTENANCE 4.01% 21.05% 0.84%
ALL OTHER 3.31% 34.32% 1.14%
TOTAL 5.28%
Steps Required to Calculate the Annual Growth (AG) Factor
The AG factor uses a formula that compares revenue at two points in time. The “Beginning
Calculated Revenue” equals the current rates multiplied by the census as of the beginning of
January 2019. This is compared to the “Ending Calculated Revenue”. The Ending Calculated
Revenue is equal to the current rates multiplied by the December 2019 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 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. 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 FY 2020-21 adjustment, the Agreement provides for the calculation to be done based
on the actual collection census data as of January 2019 and as of December 2019. The rates
used for this comparison are the rates in effect on July 1, 2019.
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 4
The 2019 calculation showed that the “Beginning Calculated Revenue”, or the revenue
collected by AVI for all services provided for that month, was $2,189,135 and the “Ending
Calculated Revenue” was $2,215,739. This results in an Annual Growth Factor for FY 2020-
21 of 1.22%. [$2,215,739 - $2,189,135 = $26,604; $26,604/$2,189,135 = 0.0122]
Application of RRI and AG to Collection Compensation Element
The FY 2020-21 Collection Compensation Element as calculated from the Amendment was
$12,626,531. In accordance with the Amendment, the total Collection Compensation Element
is broken into two amounts. 1) The amount that is to be included as part of the annual rate
adjustment $11,786,531 (Adjusted Amount); 2) The amount that will not be adjusted annually
and will be set at $840,000 for the term of the Amendment (Set Amount). The Adjusted
Amount is first adjusted by the AG Factor [$11,786,531 * (1+.0122) = $11,930,327] and then
that total is escalated by the RRI factor. [$11,930,327 * (1 + .0528) = $12,560,247]. The
Adjusted Amount is then added to the Set Amount ($12,560,247 +$840,000 = $13,400,248).
This amount then flows into the projected total compensation shown in Section 9 of this
report.
2. Methodology for Adjusting Commercial Recycling 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. As part of
the negotiation of the Amendment, the City and AVI agreed that this element will be reset, in
a which a $607,266 credit is applied to the annual compensation amount as described below.
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. In years where the total tonnage has
decreased, the growth factor is set at 0%. For Calendar Year 2019, the total recycling tons
collected was 3,007.27. In 2018, AVI collected 3,162.94. This results in a decrease of 4.92%
(3,007.27 – 3,162.94= -155.67; -155.67 / 3,162.94 = -0.0492). Thus, the Commercial
Recycling Growth Factor is 0%, as discussed above, 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 (0.0 + 0.0528 = 0.0528; $607,266 * 0.0528 = $32,063;
$607,266 + 32,063 =$639,329; $639,329 - $607,266 = $32,063). This amount then flows into
the projected total compensation shown in Section 9 of this report.
3. Methodology for Adjusting Rates to Reflect Changes 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
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 5
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 FY 2020-21, the cost per ton for landfill fees will increase by $1.25 per ton as provided in
the disposal agreement with Waste Management . The increase for disposal is $1.18, and
$0.06 is due to increases in governmental fees. Therefore, the total disposal cost for FY
2020-21 will be $42.25 per ton. Of this amount, $19.74 (47% of the per ton fee) is related to
regulatory fees and $22.51 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 between 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 2.87%. [2020 Rate =
$42.25/ton and 2019 Rate = $41.07/ton → 42.25 – 41.07 = 1.18; 1.18/41.07 = 0.0287].
Annual Tonnage (AT) Factor
The tonnage increase for the FY 2020-2021 adjustment is based on disposal reports for the
period January 1, 2019 – December 31, 2019 and is the summation of the monthly tonnages
over this period. This amount is then compared against the previous year’s disposal tonnage.
The total disposal in 2019 was 32,662 tons, and in 2018, it was 31,554 tons. This results in
an AT Factor of 3.51%. [32,662-31,554= 1,108; 1,108 / 31,554 = 0.0351].
Application of ATF and AT Factors to Disposal Compensation Element
The Landfill Compensation Element was $1,295,959 in 2018. In accordance with the
Agreement, this amount is first adjusted by the Annual AT Factor [($1,295,959 * 0.0351 =
45,488) + $1,295,959 = $1,341,447] and then that total is escalated by the ATF factor.
[($1,341,447 * 0.0287 = $38,499) + $1,341,447 = $1,379,947]. This amount then flows into
the projected total compensation shown in Section 9 of this report.
4. Methodology Addressing 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 factor. As noted above, this factor was calculated
at 1.22% for the FY 2020-21 adjustment. For the FY 2020-21 adjustment, the amount
designated for the Container Element was $308,481. Adjusting this amount by the AG Factor,
there will be an $3,763 increase in the calculated amount resulting in $312,244 to be
recovered from the rates in FY 2020-2021. [$308,481 * (1 + .0122) = $312,244].
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 6
5. Methodology Addressing the Recyclable Material Diversion Compensation Element
Section 5.05.08 of the Amendment prescribes the process for calculating the annual
adjustment for the Recyclable Materials Diversion Compensation Element. The City shall
calculate the actual tonnage of delivered recyclable material for processing in the prior
calendar year by the anticipated per-ton tip fee to be charged during the subsequent
Agreement Year
Calendar 2019 Recycling Tonnage = 8,480
Anticipated Per-Ton Tip Fee =$150.00
Recyclable Materials Diversion Compensation Element = $1,272,002
This amount then flows into the projected total compensation shown in Section 9 of this
report.
6. Methodology Addressing Organic Waste Diversion Compensation Element
Section 5.05.09 of the Amendment prescribes the process for calculating the annual
adjustment for the Organic Waste Diversion Compensation Element. The City shall calculate
the actual tonnage of actual organic waste delivered for processing to an Organic Waste
Processing Facility in the prior calendar year by the anticipated per-ton tip fee to be charged
during the subsequent Agreement Year
Calendar 2019 Recycling Tonnage = 9,470
Anticipated Per-Ton Tip Fee =$37.00
Organic Waste Diversion Compensation Element = $350,399
This amount then flows into the projected total compensation shown in Section 9 of this
report.
7. Methodology Addressing Vehicle and Administration Element
Section 5.18 of the Amendment states that beginning July 1, 2020 the baseline Vehicle and
Administration Asset Element shall be set at $1,595,575. The baseline amount shall not be
subject to the annual rate adjustment. The Vehicle and Administration Element can be
adjusted, but only under the terms as prescribed under sections 5.18 and 5.18.1 of the
Amendment.
Vehicle and Administration Baseline Compensation = $1 ,595,575
Sections 5.18/5.18.1 Adjustments = $0
Vehicle and Administration Element $1,595,575
This amount then flows into the projected total compensation shown in Section 9 of this
report.
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 7
8. Methodology Addressing 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+
Recyclable Materials + Organic Waste + Vehicle and Administration) = “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 FY 2020-21, the Fee Compensation Element Calculation is as follows:
($13,400,248+$32,064+$1,379,947+$312,244+1,272,002+$350,399+$1,595,576) =
$18,342,480 (base compensation)
$18,342,480 / (1- 23.35%) =$18,342,480 / (76.65%)
$18,342,480 / 76.65% = $23,930,176
For FY 2020-21, the calculated fees payable to the City are:
$23,930,176 – $18,342,480 = $5,587,696
The adjusted total compensation for the Fee Element is shown in Section 6 below.
9. City Process of Developing Rates Projected to Meet Total Compensation
Prior to establishing the compensation that will be generated from the rates, an adjustment is
made for grant revenues or other agreed upon amounts reducing operating costs. The
amount of revenue required from the rates is partially offset by one item: a $48,875 agreed
upon amount to reduce the cost of collection services for the Dublin Unified School District;
therefore, $48,875 is credited against required revenue in FY 2020-21.
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 compens ation to the Company
will equal $23,930,176. The calculation for Fiscal Year 2020-21 is performed using the
customer subscription figures as of December 2019.
Updated Cost
Elements
FY 2019-20 FY 2020-21
(Amendment
Costs)
FY 2020-21
(Proposed Costs)
METHODOLOGY USED FOR FISCAL YEAR 2020-21 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 16, 2020
Prepared By: Jay Baksa, Assistant Administrative Services Director
ATTACHMENT 1 8
Collection Element $10,007,091 $12,626,531 $13,400,248
Commercial Recycling
Compensation
Element
$607,266 $0 $32,064
Disposal
Compensation
Element
$1,295,959 $1,295,959 $1,379,947
Container
Compensation
Element
$272,645 $308,481 $312,244
Extraordinary
Adjustment
$2,572,716 $0 $0
(NEW) Recycling
Disposal Element
N/A
$1,484,670 $1,272,002
(NEW) Organics
Disposal Element
N/A $370,659 $350,399
(NEW) Vehicle and
Administration
Element
N/A $1,595,575 $1,595,575
Fee Compensation
Element
$4,495,043 $5,386,455 $5,587,696
TOTAL $19,250,720 $23,068,330 $23,930,176
Attachment 2
Proposed vs. Current Rates
(Selected Service Levels Representing Most Common Subscriptions)
COMPARISON OF SELECTED RATES
Current (2019/20) vs Proposed (2020/21)
Proposed
Increase over
2019/2020
Current Proposed
Residential -Monthly Rates Rate 2020/2021 $ %
Minimum Residential (32) Gallon $28.82 $35.11 $6.29 21.83%
64 Gallon Residential $52.95 $64.50 $11.55 21.81%
96 Gallon Residential $77.07 $93.88 $16.81 21.81%
Sample rate categories represent 100% of residential customers
Commercial -Monthly Rates
32 Gallon Cart $32.69 $39.82 $7.13 21.81%
64 Gallon Cart $60.03 $73.12 $13.09 21.81%
96 Gallon Cart $87.32 $106.36 $19.04 21.80%
1 Yard - 1 time / wk $139.86 $170.36 $30.50 21.81%
2 Yard - 1 time / wk $279.72 $340.72 $61.00 21.81%
3 Yard - 1 time / wk $419.58 $511.08 $91.50 21.81%
3 Yard - 2 times / wk $873.96 $1,064.55 $190.59 21.81%
4 Yard - 1 Time / wk $559.44 $681.44 $122.00 21.81%
4 Yards - 2 times / wk $1,153.68 $1,405.27 $251.59 21.81%
Represents 80% of 2019 commercial customers
Drop Box - Rates Per Service
20 Yard Loose $787.00 $958.60 $171.60 21.80%
30 Yard Loose $1,180.50 $1,437.90 $257.40 21.80%
40 Yard Loose $1,574.00 $1,917.20 $343.20 21.80%
Represents 84% of 2019 non-compacted Drop Box Subscriptions
30 Yard Compacted $2,361.00 $2,875.80 $514.80 21.80%
Represents 15% of the 2019 compacted Drop Box Subscriptions
Handy Hauler Available To Residents $182.99 $222.90 $39.91 21.81%
TRI-VALLEY RATE COMPARISON2020 Garbage Rate Comparison Survey (Prepared: June 2, 2020)Proposed3 City Dublin % Proposed Current % IncreaseResidentialLivermore Pleasanton San Ramon Average Basic Rate From Avg Rate over Prior FY1 Can Residential (32-35 Gallon) 38.85$ 26.87$ 41.56$ 35.76$ 35.11$ -1.82% 28.82$ 21.83%1 Can Residential (64-70 Gallon) 58.18$ n/a 71.69$ 64.94$ 64.50$ -0.67% 52.95$ 21.81%1 Can Residential (90-96 Gallon) 91.42$ 46.89$ 114.17$ 84.16$ 93.88$ 11.55% 77.07$ 21.81%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: As of July 1, 2019; increases expected July 2020 have been delayed due to COVID-19 - Basic rate includes 32-gallon garbage can (weekly pick-up); Weekly 96-gallon organics can; Weekly 96-gallon curbside recycling can.San Ramon: As of January 1, 2020, Basic rate includes 32-gallon garbage can (weekly pick-up); Weekly 64-gallon green waste can supplied by Company. ; Additional 64-gallon can is available at no extra cost; Weekly 64-gallon curbside recycling can or 96-gallon can available at no extra cost, and 3 special clean-ups per year.Pleasanton: As of July 1, 2019 - 35 Gallon Service includes 35 gallon trash cart, 96 gallon green/food scrap cart and 96 gallon recycling cart. 96 Gallon service inlcudes a 96 gallon trash cart, 96 gallon green/food scrap cart and a 96 gallon recycling cart. Both services have weekly pick up. 3 City Proposed % Proposed Current % IncreaseCommercialLivermore Pleasanton San Ramon Average Dublin From Avg Rate over Prior FY1 Yard - 1 time / wk 116.72$ $120.34 213.81$ 150.29$ 170.36$ 13.35% 139.86$ 21.81%2 Yard - 1 time / wk 233.43$ $240.67 397.13$ 290.41$ 340.72$ 17.32% 279.72$ 21.81%3 Yard - 1 time / wk 350.16$ $361.01 549.82$ 420.33$ 511.08$ 21.59% 419.58$ 21.81%3 Yard - 2 times / wk 729.44$ $752.05 1,099.68$ 860.39$ 1,064.55$ 23.73% 873.96$ 21.81%4 Yard - 1 Time / wk 466.88$ $481.35 671.97$ 540.07$ 681.44$ 26.18% 559.44$ 21.81%4 Yards - 2 times / wk 972.59$ $1,002.74 1,343.96$ 1,106.43$ 1,405.27$ 27.01% 1,153.68$ 21.81%Dublin's charges 50% of the regular commercial rate for Organics and 25% for commercial recyclingSan Ramon's rate does not include the cost of commercial recycling as the amount varies depending on the hauler used.Livermore charges for recycling and organics at 75% of the regular commerical rate. Drop Box20 Yard Loose 702.63$ $647.26 1,395.74$ 915.21$ 958.60$ 4.74% 787.00$ 21.81%30 Yard Loose 1,021.69$ $970.89 1,604.73$ 1,199.10$ 1,437.90$ 19.91% 1,180.50$ 21.81%40 Yard Loose 1,340.76$ $1,294.52 1,813.67$ 1,482.98$ 1,917.20$ 29.28% 1,574.00$ 21.81%30 Yard Compacted 2,707.48$ $1,941.79 2,765.65$ 2,471.64$ 2,875.80$ 16.35% 2,361.00$ 21.81%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 comparisonSan 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.Comparison With Proposed RatesATTACHMENT 3
ATTACHMENT 4
1
RESOLUTION NO. XX - 20
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 identifi ed 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 June 16, 2020, the City of Dublin will consider a Sixth
Amendment to the Collection Service Agreement (Amendment) with Amador Valley
Industries (AVI) extending the Collection Services Agreement for another fifteen years;
and
WHEREAS, the Amendment will establish AVI’s compensation for the
Agreement Year July 1, 2020 through June 30, 2021; and
WHEREAS, the City has calculated the required rate adju stment necessary to
generate the agreed to compensation for the Agreement Year July 1, 2020 and applied
not more than a 21.83% adjustment to the residential, commercial, roll-off, construction
and demolition debris, and other collection service rates; and
WHEREAS, on June 16, 2020, 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 heret o, 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.
2
BE IT FURTHER RESOLVED that, upon the effective date, July 1, 2020, 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 16th day of June, 2020, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
Affected Parcels
Minimum Monthly Rate : 35.11$ (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:$29.39 per month (Total = 64.50$ per month)
96 Gallon Garbage Container:$58.77 per month (Total = 93.88$ per month)
Second Container:
Additional Large Item Collection: $ 23.08
32 Gallon Container:$39.82 64 Gallon Container:$73.12 96 Gallon Container:$106.36
Commercial Bin Service Rates
2020/2021 PROPOSED ADJUSTMENT TO GARBAGE COMPANY RATES
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, 2020.
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.
per Cubic Yard
Rates shown on the following page are monthly rates based upon bin size and frequency of service. Rates include collection, disposal, and bin
rental.
Residents may request additional large item collection services for a fee of :
RESIDENTIAL RATES
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.
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 .
COMMERCIAL AND MULTI-FAMILY BIN SERVICES (FRONT-END-LOADER)
Minimum Cost Plus
Minimum Cost Plus
Residents may request a second garbage container which will be charged at the same rate as a first container based on the size
requested.
Attachment 5 - Rate Resolution Exhibit A
Size # Times Size # Times
# Yards Per Wk # Yards Per Wk
11 41
12 42
13 43
14 44
15 45
16 46
21 61
22 62
23 63
24 64
25 65
26 66
31 71
32 72
33 73
34 74
35 75
36 76
OTHER COMMERCIAL SERVICES: Rates for additional requested services.
Container Push:15.52$
Lock & Key:9.32$
Excess Waste (Cu. Yd):50.86$ per Cubic Yard
Excess Cart Exchange:15.52$
Excess Bin Exchange:62.00$
Excess Bin Cleaning:77.45$
$222.90
Additional Bin Rental Per Week: $51.50 Per Week $161.59 Per Pick-up
Excess Per Yard If Filled Above Water Level $50.86 Per Cubic Yard
Rate Per Cubic Yard: $47.93 Compacted: $95.86
Organic material is charged at 50% of the non-compacted or compacted rate as appropriate.
MISCELLANEOUS DROP BOX CHARGES
Relocation of Drop Box $131.75 Per Request
Weekly Drop Box Container Rental - After 1st Week $51.50 Per Week
Cancel Auto Pick-up Without Notice $165.97 Per Event
Handy Hauler Extra Week Rental $51.50 Per Week
Standby Time $216.32 Per Hour
Base Monthly Rate Base Monthly Rate
$170.36 $681.44
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.
$808.61
$1,021.36
Cost For Additional Dump:
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.
$2,256.27
$3,278.43
Non-Compacted:
HANDY HAULER:- One-time placement and collection of a 4 cubic
yard bin, including one week container rental filled no higher than
water level:
$7,367.07
$2,427.43
$3,662.34
$4,897.25
$6,132.16
Organic material is charged at 50% of the Commercial Service rate.
Recycled Material is charged at 25% of the Commercial Service rate.
$383.11
$595.86
$2,171.49
$2,724.96
$1,064.55
$1,618.02
$1,234.11
$340.72
$723.83
$1,405.27
$2,129.10
$2,852.93
$3,576.76
$4,300.59
$511.08
$1,022.16
$2,086.71
$3,151.26
$4,215.81
$1,106.94
$1,490.05
$1,873.16 $5,280.36
$6,344.91
$1,192.52
Attachment 5 - Rate Resolution Exhibit A
C&D Debris Box Service: Costs shown are on a per pick-up basis
Material Type Cubic Yards Rate Material Type Cubic Yards Rate
Concrete & Asphalt Front End Loader
Per Yard Clean $110.25 Per Yard $43.27
Clean 6 $661.50 Mixed 4 (1/2 Full) $86.54
Mixed 6 $791.72 Mixed 4 $173.08
Mixed 6 (1/2 Full) $129.81
Cardboard Mixed 6 $259.62
Per Yard Clean $22.05 Mixed 7 (1/2 Full) $151.45
Clean 20 $441.00
Clean 30 $661.50 Metal
Clean 40 $882.00 Metal 20 $514.42
Metal 30 $587.92
Dirt Metal 40 $734.92
Clean 6 $661.14
Mixed 6 $791.72 Stucco
Per Yard Clean $110.25
Drywall Clean 6 $661.50
Per Yard Clean $52.77 Mixed 6 $791.72
Clean 20 $1,055.40
Mixed C&D
Wood Per Yard $45.57
Per Yard Clean $22.05 Mixed 15 $683.55
Clean 20 $441.00 Mixed 20 $911.40
Clean 30 $661.50 Mixed 30 $1,367.10
Clean 40 $882.00 Mixed 40 $1,822.80
CONSTRUCTION & DEMOLITION (C&D) DEBRIS BOX SERVICES
Attachment 5 - Rate Resolution Exhibit A
ATTACHMENT 6
1
RESOLUTION NO. XX - 20
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 2020-21
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, 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 Fiscal Year 2005-06 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 16, 2020; and
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.
2
PASSED, APPROVED AND ADOPTED this 16th day of June, 2020, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
Exhibit A
3
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 $345.84 per year will
increase $75.48 for a total of $421.32 for Fiscal Year 2020-2021. The annual
assessment equates to a monthly increase of $6.29, from $28.82 to $35.11. The
Amended and Restated Agreement with AVI sets the compensation for the Agreement
Year that begins July 1, 2020 and provides for annual adjustments to the rates based
upon annual changes in five separate indices, three of which are maintained by the
Bureau of Labor Statistics (Refuse Rate Index), plus pass-through disposal costs, for
waste, recyclables and organics. The five indices account for cost changes in the
following categories: growth in services; labor; vehicle replacement; vehicle
maintenance; 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 pa y 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 co llections
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
4
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.
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 $ 421.32
Each Condominium / Townhouse Unit $ 421.32
Each Duplex (2 Units) $ 842.64
Each Duplex (5 or More Units) $421.32 times the
number of units