HomeMy WebLinkAbout6.1 Adoption of Rates for Garbage Collection, Disposal, and Recycling Services Provided by Amador Valley Industries and Establishing the 2021-22 Annual Assessment (2)STAFF REPORT
CITY COUNCIL
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Agenda Item 6.1
DATE:June 15, 2021
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 2021-22 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, 2021 and establishing the Fiscal Year 2021-22 refuse-related property tax
assessment.
STAFF RECOMMENDATION:
Conduct the public hearing, deliberate, adopt the Resolution Approving and Establishing the
Collection of Minimum Residential Garbage and Recycling Service Fees for Fiscal Year 2021-22,
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 2021-22 will result in a 9.34% 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 $3.28 per month on the required residential 32-gallon can
to a total of $38.39 per month. The proposed Dublin commercial rate increases vary based on the
service level selected. The proposed rate of $186.27 represents the average service level for a
one-yard bin collected once per week.
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 (Agreement) with AVI, which extended the term
of the agreement until 2035, addressed capital equipment replacement needs and started
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incorporating local and state requirements. In addition, as part of the Amendment, a new rate
model approach was agreed to that addresses annual rate adjustments, component cost
separation, and regular financial reviews, to help deal with the volatility of the market in which
haulers now operate. The rates presented in this Staff Report are in accordance with the
Agreement.
Annual Adjustment
The current garbage rates became effective July 1, 2020. 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 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.
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 2021-22 is estimated to meet the
compensation requirement of $23,939,196. This compensation is possible as a result of a
proposed 9.34% average increase to all categories. A detailed description of the methodology
required by the Agreement is included as Attachment 4. The Fiscal Year 2021-22 calculation is
unique, in that the compensation requirement increased only $9,021 or 0.04% from Fiscal Year
2020-21, but the proposed rate increase is 9.34%. The primary factor contributing to the
proposed increase is COVID-19 related closures, which resulted in businesses both stopping
service as well as downsizing the service received. For example, as restaurants transitioned to
take-out only, the need for service remained but the volume and frequency were reduced. Since
the agreement requires a total annual revenue requirement, even though costs only increased
0.04%, the loss of customers and total service results in an increase to the rates to meet the
compensation requirement.
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, 2021.
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. The current comparison is included as Attachment
6. It must be noted that the comparison is no longer an “apples to apples” comparison. For
example, Livermore now charges recycling at 75% of the garbage, Pleasanton at 80%, and San
Ramon at 50%, where Dublin charges 25%. In the past, most cities did not charge for recycling,
but as recycling became more expensive to process and dispose of, cities increased the cost for
that specific service and incorporated fees that reflect that change. In contrast, Dublin has
historically had a blended rate, where customers would have one fee based on the amount of
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garbage collected. Depending on the type of service a customer receives, Dublin’s cost may be
lower than the Tri-Valley average. The Tri-Valley city that is most comparable to the City of
Dublin’s fee structure is San Ramon, as shown in Attachment 6. 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 subscribe 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 2021-22 is $460.68, which is collected in two
installments on the property tax bill. This equates to $38.39 per month, which is $39.36 per year
($3.28 per month) more than the rate levied in Fiscal Year 2020-21, as shown here:
Historical Annual Fee for Minimum Garbage Service Collected with
Property Tax Bill
2019-20 2020-21
Proposed
2021-22
Annual
Change
Monthly
Change
$345.84 $421.32 $460.68 $39.36 $3.28
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 1-3) 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.
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STRATEGIC PLAN INITIATIVE:
None
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
A notice was placed in the East Bay Times on June 5, 2021 and June 12, 2021, notifying the
community of the City Council’s consideration of the proposed rates. 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 2021-22
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) Methodology used for Fiscal Year 2021-22 Annual Garbage Rate Adjustment in Accordance
with Agreement Between City of Dublin and Amador Valley Industries
5) Proposed vs. Current Rates
6) Tri-Valley Rate Comparison
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Attachment 1
1
RESOLUTION NO. XX - 21
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
2021-22
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 15, 2021.
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.
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PASSED, APPROVED AND ADOPTED this 15th day of June, 2021, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
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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 $421.32 per year will
increase $39.36 for a total of $460.68 for Fiscal Year 2021-22. The annual assessment
equates to a monthly increase of $3.28, from $35.11 to $38.39. 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 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 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;
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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 $ 460.68
Each Condominium / Townhouse Unit $ 460.68
Each Duplex (2 Units)$ 921.36
Each Duplex (5 or More Units)$460.68 times the
number of units
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Attachment 2
1
RESOLUTION NO. XX - 21
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 June 16, 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 fifteen-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 City has calculated the required rate adjustment necessary to
generate the agreed to compensation and applied not more than a 9.34% adjustment to
the residential, commercial, roll-off, construction and demolition debris, and other
collection service rates; and
WHEREAS, on June 15, 2021, 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.
BE IT FURTHER RESOLVED that, upon the effective date, July 1, 2021, 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.
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PASSED, APPROVED AND ADOPTED this 15th day of June 2021, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
1651
Affected Parcels
Minimum Monthly Rate : 38.39$ (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:$32.13 per month (Total = 70.52$ per month)
96 Gallon Garbage Container:$64.26 per month (Total = 102.65$ per month)
Second Container:
Additional Large Item Collection: $ 25.24
32 Gallon Container:$43.54 64 Gallon Container:$79.95 96 Gallon Container:$116.29
Commercial Bin Service 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.
2021/2022 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, 2021.
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
Attachment 3
Exhibit A to the Resolution
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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:16.97$
Lock & Key:10.19$
Excess Waste (Cu. Yd):55.61$ per Cubic Yard
Excess Cart Exchange:16.97$
Excess Bin Exchange:67.79$
Excess Bin Cleaning:84.68$
$243.72
Additional Bin Rental Per Week:$56.31 Per Week $176.68 Per Pick-up
Excess Per Yard If Filled Above Water Level $55.61 Per Cubic Yard
Rate Per Cubic Yard: $52.41 Compacted: $104.82
Organic material is charged at 50% of the non-compacted or compacted rate as appropriate.
MISCELLANEOUS DROP BOX CHARGES
Relocation of Drop Box $144.06 Per Request
Weekly Drop Box Container Rental - After 1st Week $56.31 Per Week
Cancel Auto Pick-up Without Notice $181.47 Per Event
Handy Hauler Extra Week Rental $56.31 Per Week
Standby Time $236.52 Per Hour
$558.81
$1,117.62
$2,281.59
$3,445.56
$4,609.53
$1,210.32
$1,629.21
$2,048.10 $5,773.50
$6,937.47
$1,303.89
$1,536.51
$2,327.94
$3,119.37
$3,910.80
$4,702.23
$418.89
$651.51
$2,374.29
$2,979.45
$1,163.97
$1,769.13
$1,349.37
$372.54
$791.43
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.
$2,466.99
$3,584.61
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:
$8,055.09
$2,654.13
$4,004.37
$5,354.61
$6,704.85
Organic material is charged at 50% of the Commercial Service rate.
Recycled Material is charged at 25% of the Commercial Service rate.
Base Monthly Rate Base Monthly Rate
$186.27 $745.08
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.
$884.13
$1,116.75
Attachment 3 - Rate Resolution Exhibit A 1653
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 $120.55 Per Yard $47.31
Clean 6 $723.30 Mixed 4 (1/2 Full) $94.62
Mixed 6 $865.67 Mixed 4 $189.24
Mixed 6 (1/2 Full) $141.93
Cardboard Mixed 6 $283.86
Per Yard Clean $24.11 Mixed 7 (1/2 Full) $165.59
Clean 20 $482.20
Clean 30 $723.30 Metal
Clean 40 $964.40 Metal 20 $562.47
Metal 30 $642.83
Dirt Metal 40 $803.56
Clean 6 $722.89
Mixed 6 $865.67 Stucco
Per Yard Clean $120.55
Drywall Clean 6 $723.30
Per Yard Clean $57.70 Mixed 6 $865.67
Clean 20 $1,154.00
Mixed C&D
Wood Per Yard $49.83
Per Yard Clean $24.11 Mixed 15 $747.45
Clean 20 $482.20 Mixed 20 $996.60
Clean 30 $723.30 Mixed 30 $1,494.90
Clean 40 $964.40 Mixed 40 $1,993.20
CONSTRUCTION & DEMOLITION (C&D) DEBRIS BOX SERVICES
Attachment 3 - Rate Resolution Exhibit A 1654
METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
1
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 eight elements.
1.Collection Compensation Element
2.Commercial Recycling Incentive Element
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.
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 @
12/31/2020
LABOR Labor - Teamsters Union Local 70 Contract 0.34%
VEHICLE MAINTENANCE Machinery & Equipment-Parts, Attachments
and Accessories (wpu11440378)
0.00%
ALL OTHER Consumer Price Index - All Urban Consumers:
San Francisco-Oakland-Hayward, CA
(CUURS49BSA0)
1.72%
The Company provides the City with their expenditures in each of these areas over Calendar
Year 2020. 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 2021-2022
calculation.
Attachment 4
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METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
2
STEP 2: RRI WEIGHTING FACTOR BASED ON RELATIONSHIP TO TOTAL COSTS
Operating Cost Category AVI $
reported
% Total Expenses
(Weighting Factor)
LABOR $4,892,750 42.34%
VEHICLE MAINTENANCE $2,558,831 22.14%
ALL OTHER $4,103,481 35.52%
TOTAL $11,555,062 100%
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 2021-2022
results:
STEP 3: RRI CALCULATION (CANNOT EXCEED 10%)
[Index Change multiplied By Weighting Factor]
Operating Cost Category % Index
Change @
12/31/2020
% Total
Expenses
(Weighting
Factor)
RRI
Index Change
x
Weighting Factor
LABOR 0.34%42.34%0.14%
VEHICLE MAINTENANCE 0.00%22.14%0.00%
ALL OTHER 1.72%35.52%0.61%
TOTAL 0.75%
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 2020. This is compared to the “Ending Calculated Revenue”. The Ending Calculated
Revenue is equal to the current rates multiplied by the December 2020 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
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METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
3
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 2021-2022 adjustment, the Agreement provides for the calculation to be done
based on the actual collection census data as of January 2020 and as of December 2020.
The rates used for this comparison are the rates in effect on July 1, 2021.
The FY 2021-2022 calculation showed that the “Beginning Calculated Revenue”, or the
revenue collected by AVI for all services provided for that month, was $2,700,556 and the
“Ending Calculated Revenue” was $2,390,023. This results in a FY 2021-2022 Annual
Growth Factor of -11.50%. [$2,390,023 - $2,700,556 = $-310,533; $-310,533/$2,700,556 = -
0.1150]. Per Section 5.05.1.2 of the Agreement, if the percentage change is negative, that
year’s Annual Growth Factor is set at 0%.
Application of RRI and AG to Collection Compensation Element
The FY 2020-2021 Collection Compensation Element as calculated was $13,400,248. In
accordance with the Amended and Restated Agreement, 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 $12,560,248 (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 [$12,560,248 * (1+.00) =
$12,560,248] and then that total is escalated by the RRI factor. [$12,560,248 * (1 + .0075) =
$12,654,450]. The Adjusted Amount is then added to the Set Amount ($12,654,450
+$840,000 = $13,494,450). 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 for the Amended and Restated Agreement, the City and AVI, agreed that this
element would be reset, in a which a $607,266 credit is applied to the annual compensation
amount as described below. The FY 2021-2022 Commercial Recycling Compensation
Element final calculation was the following ($639,329 - $607,266 = $32,063).
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 2020, the total recycling tons
collected was 2,712.98. In 2019, AVI collected 3,007.27. This results in a decrease of 9.79%
(2,712.98 - 3,007.27= -294.29; -294.297 / 3,007.27 = -0.0979). 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
1657
METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
4
Program compensation amount (0.0 + 0.0075 = 0.0075; $639,329 * 0.0075 = $4,795;
$639,330 + $4,795 =$644,125). ($644,125 - $607,266 = $36,859) 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
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 2021-2022, the cost per ton for landfill fees will increase by $1.17 per ton as provided in
the disposal agreement with Waste Management, the increase for disposal is $1.13 and
$0.04 is due to increases in governmental fees. Therefore, the total disposal cost for FY
2021-2022 will be $43.42 per ton. Of this amount, $19.78 (45.5% of the per ton fee) is related
to regulatory fees and $23.64 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 2.77%. [2021 Rate =
$43.42/ton and 2020 Rate = $42.25/ton 43.42 – 42.25 = 1.17; 1.17/42.25 = 0.0277].
Annual Tonnage (AT) Factor
The tonnage increase for the FY 2021-2022 adjustment is based on disposal reports for the
period January 1, 2020 – December 31, 2020 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 2020 was 30,260 tons, and in 2019, it was 32,260 tons. This results in
an AT Factor of -7.35%%. [30,260-32,662= -2,401.28; 2,401.28/ 32,260 = -0.0735].
Application of ATF and AT Factors to Disposal Compensation Element
The Landfill Compensation Element was $1,379,947 in 2020. In accordance with the
Agreement, this amount is first adjusted by the Annual AT Factor [($1,379,947 * -0.0735 = -
$101,426) + $1,379,947 = $1,278,521] and then that total is escalated by the ATF factor.
[($1,278,521 * 0.0277 = $35,415) + $1,278,581 = $1,313,936]. This amount then flows into
the projected total compensation shown in Section 9 of this report.
4. Methodology Addressing Container Compensation Element
1658
METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
5
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 0.00% for the FY 2021-2022 adjustment. For the FY 2021-2022, the amount designated for
the Container Element was $312,244. Adjusting this amount by the AG Factor, since there
will be no change in the calculated amount, leaving the Container Element at $312,244 to be
recovered from the rates in FY 2021-2022. [$312,244 * (1 + 0.00) = $312,244].
5. Methodology Addressing the Recyclable Material Diversion Compensation Element
Section 5.05.08 of the Amended and Restated Agreement 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 2020 Recycling Tonnage = 8,784
Anticipated Per-Ton Tip Fee =$146.58
Recyclable Materials Diversion Compensation Element = $1,287,588
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 Amended and Restated Agreement 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 2020 Recycling Tonnage = 8,801
Anticipated Per-Ton Tip Fee =$35.08
Organic Waste Diversion Compensation Element = $308,741
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 Amended and Restated Agreement 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
1659
METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
6
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.
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 2021-2022, the Fee Compensation Element Calculation is as follows:
($13,494,450+$36,859+$1,313,936+$312,244+1,287,588+$308,741+$1,595,576)
= $18,349,394 (base compensation)
$18,349,394 / (1- 23.35%) =$18,349,394 / (76.65%)
$18,349,394 / 76.65% = $23,939,196
For FY 2021-2022, the calculated fees payable to the City are:
$23,939,196– $18,349,394 = $5,589,802
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 2021-2022. An additional credit
of $335 was included in the rate compensation model to offset less than anticipated costs in
1660
METHODOLOGY USED FOR FISCAL YEAR 2021-2022 ANNUAL GARBAGE RATE
ADJUSTMENT IN ACCORDANCE WITH AGREEMENT BETWEEN
CITY OF DUBLIN AND AMADOR VALLEY INDUSTRIES
Report Submitted To: City Council June 15, 2021
Prepared By: Jay Baksa, Assistant Administrative Services Director
7
the timing of landfill fee increases, which have been paid by AVI and were not included in the
FY 2020-2021 rate model.
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 $23,939,196. The calculation for Fiscal Year 2021-2022 is performed using the
customer subscription figures as of December 2020.
Updated Cost
Elements
FY 2020-21 FY 2021-22
(Proposed
Costs)
Absolute
Change
Percentage
Change
Collection Element $13,400,248 $13,494,450 $94,202 0.70%
Commercial
Recycling
Compensation
Element
$32,064 $36,859 $4,795 14.95%
Disposal
Compensation
Element
$1,379,947 $1,313,936 ($66,011)(4.78%)
Container
Compensation
Element
$312,244 $312,244 $0 0.00%
Recycling Disposal
Element
$1,272,002 $1,287,588 $15,586 1.23%
Organics Disposal
Element
$350,399 $308,741 ($41,658)(11.89%)
Vehicle and Admin
Asset Replacement
Element
$1,595,575 $1,595,575 $0 0.00%
Fee Compensation
Element
$5,587,696 $5,589,802 $2,106 0.04%
TOTAL $23,930,176 $23,939,196 $9,021 0.04%
1661
Attachment 5
Proposed vs. Current Rates
(Selected Service Levels Representing Most Common Subscriptions)
COMPARISON OF SELECTED RATES
Current (2020/21) vs Proposed (2021/22)
Proposed
Increase over
2020/2021Current Proposed
Residential -Monthly Rates Rate 2021/2022 $%
Minimum Residential (32) Gallon $35.11 $38.39 $3.28 9.34%
64 Gallon Residential $64.50 $70.52 $6.02 9.33%
96 Gallon Residential $93.88 $102.65 $8.77 9.34%
Sample rate categories represent 100% of residential customers
Commercial -Monthly Rates
32 Gallon Cart $39.82 $43.54 $3.72 9.34%
64 Gallon Cart $73.12 $79.95 $6.83 9.34%
96 Gallon Cart $106.36 $116.29 $9.93 9.34%
1 Yard - 1 time / wk $170.36 $186.27 $15.91 9.34%
2 Yard - 1 time / wk $340.72 $372.54 $31.82 9.34%
3 Yard - 1 time / wk $511.08 $558.81 $47.73 9.34%
3 Yard - 2 times / wk $1,064.55 $1,163.97 $99.42 9.34%
4 Yard - 1 Time / wk $681.44 $745.08 $63.64 9.34%
4 Yards - 2 times / wk $1,405.27 $1,536.51 $131.24 9.34%
Represents 75% of 2020 commercial customers
Drop Box - Rates Per Service
20 Yard Loose $958.60 $1,048.20 $89.60 9.35%
30 Yard Loose $1,437.90 $1,572.30 $134.40 9.35%
40 Yard Loose $1,917.20 $2,096.40 $179.20 9.35%
Represents 85% of 2020 non-compacted Drop Box Subscriptions
30 Yard Compacted $2,875.80 $3,144.60 $268.80 9.35%
Represents 17% of the 2020 compacted Drop Box Subscriptions
Handy Hauler Available To Residents $222.90 $243.72 $20.82 9.34%
1662
TRI-VALLEY RATE COMPARISON2022 Garbage Rate Comparison Survey (Prepared: June 1, 2021)Proposed3 City Dublin % Proposed Current % IncreaseResidentialLivermore Pleasanton San Ramon AverageBasic Rate From Avg Rateover Prior FY1 Can Residential (32-35 Gallon)39.24$27.33$ 42.05$ 36.21$ 38.39$ 6.03% 35.11$ 9.34%1 Can Residential (64-70 Gallon)58.77$n/a72.54$ 65.65$ 70.52$ 7.41% 64.50$ 9.33%1 Can Residential (90-96 Gallon)92.34$47.69$ 115.53$ 85.19$ 102.65$ 20.50% 93.88$ 9.34%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 January 1, 2021; 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, 2021, 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 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, 2020 - 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 CityProposed % Proposed Current % IncreaseCommercialLivermorePleasanton San Ramon Average DublinFrom Avg Rateover Prior FY1 Yard - 1 time / wk117.89$$122.39 241.29$ 160.52$ 186.27$ 16.04% 170.36$ 9.34%2 Yard - 1 time / wk235.76$$244.76 448.11$ 309.54$ 372.54$ 20.35% 340.72$ 9.34%3 Yard - 1 time / wk353.66$$367.15 620.28$ 447.03$ 558.81$ 25.01% 511.08$ 9.34%3 Yard - 2 times / wk736.73$$764.83 1,240.67$ 914.08$ 1,163.97$ 27.34% 1,064.55$ 9.34%4 Yard - 1 Time / wk471.55$$489.53 757.97$ 573.02$ 745.08$ 30.03% 681.44$ 9.34%4 Yards - 2 times / wk982.32$$1,019.79 1,516.01$ 1,172.71$ 1,536.51$ 31.02% 1,405.27$ 9.34%Pleasonton charges 80% of the commercial rate for recycling and organicsDublin's charges 50% of the regular commercial rate for Organics and 25% for commercial recyclingSan Ramon's charges 50% of the regular commercial rate for commercial recyclingLivermore charges for recycling and organics at 75% of the regular commerical rate. Drop Box20 Yard Loose711.86$$658.26 1,412.24$ 927.45$ 1,048.20$ 13.02% 958.60$ 9.35%30 Yard Loose1,022.34$ $987.40 1,696.18$ 1,235.31$ 1,572.30$ 27.28% 1,437.90$ 9.35%40 Yard Loose1,340.76$ $1,316.53 1,931.75$ 1,529.68$ 2,096.40$ 37.05% 1,917.20$ 9.35%30 Yard Compacted2,707.48$ $1,974.80 2,716.72$ 2,466.33$ 3,144.60$ 27.50% 2,875.80$ 9.35%Pleasonton charges a $360 monthly rental feeLivermore 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.Comparison With Proposed RatesAttachment 61663
Item 6.1:
Adoption of Rates for Garbage
Collection, Disposal, and
Recycling
City Council
June 15, 2021
1664
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.
•Results in 9.34% increase for all rates.
1665
Dublin Rate
•City of Dublin Basic Residential Service -$38.39
•Basic Residential Services is included on Property Tax
Current Year
Rates
Proposed
Rates
Monthly
Difference
Annual
Difference
$35.11 $38.39 $3.28 $39.36
1666
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 (Prior Year -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).
1667
Overview of Cost Elements
1.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)
1668
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)
1669
Overview of Cost Elements
4. Waste Disposal
•City has a long term contract 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)
1670
Overview of Cost Elements
6. Organics Disposal
•Organics processed at Waste Management Power Harvest
•City does not have an agreement (Pay Market Rate)
•Annual Adjustment Calculated
•Annual Tonnage (AT) and Annual Tip Fee (ATF)
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
1671
Overview of Cost Elements
8) Fee Element
•Amount paid to City for franchise and
administrative fee
•Adjusted annually based on a percentage of
AVI’s revenue
1672
Rate Calculation
Elements FY 2020-21 FY 2021-22
Proposed
Difference
Collection Element $13,400,248 $13,494,450 $94,202
Commercial Recycling
Compensation Element $32,064 $36,859 $4,795
Disposal Compensation
Element $1,379,947 $1,313,936 ($66,011)
Container Compensation
Element $312,244 $312,244 $0
Recycling Disposal Element $1,272,002 $1,287,588 $15,586
Organics Disposal Element $350,399 $308,741 ($41,658)
Vehicle and Administration
Element $1,595,575 $1,595,575 $0
Fee Compensation
Element $5,587,696 $5,589,802 $2,106
Total $23,930,175 $23,939,196 $9,021
1673
Rate Calculation
•FY 2021-22 Proposed Costs increased by $9,021
(0.04%).
•Rates increased by 9.34% due to cancellation of
service and reduction in service levels due to
COVID-19 restrictions.
1674
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 2021-22.
1675
Thank You
1676