HomeMy WebLinkAboutItem 6.4 WasteMgmt AdjustRates CITY CLERK
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 3, 2003
SUBJECT: Public Hearing: Adoption of Adjustment of Rates for Garbage Collection,
Disposal, and Recycling Services Provided By Waste Management
Prepared by: Jason Behrmann, Administrative Analyst
EXHIBITS ATTACHED: 1. Rate Comparison
2. Comparison of Selected Rates Current versus Proposed
3. Resolution Adopting Rates
RECOMMENDATION: 1. Open the Public Heating
2. Receive the Staff Report and public testimony
3. Close the public heating and deliberate
4. Adopt Resolution
FINANCIAL STATEMENT: The amount of the proposed rate increase varies depending on the type
of service received. There is no proposed increase for residential curbside or drop box customers. It is
proposed that the rates for commercial customers increase by approximately 2.99%. The proposed rates will
be effective July 1, 2003.
DESCRIPTION:
The current garbage rates became effective July 1, 2002. In accordance with the Agreement with Waste
Management (WM) the adopted rates were scheduled to be reviewed for a rate adjustment July 1, 2003. The
amount of the allowed adjustment was calculated in accordance with a specific formula.
Agreement with Waste Management
The agreement between the City of Dublin and WM requires the City to adopt a rate schedule, which is
estimated to produce a specified revenue amount. The target revenue amount is determined in accordance
with a specific schedule and formula. The annual adjustment takes into account (a) Changes in the Consumer
Price Index; (b) Changes in Landfill Regulatory Fees; (c) changes in number of subscribers and (d) an
adjustment for the number of tons placed in the landfill. After incorporating these adjustment factors, WM
reviews the calculation of the proposed rates to determine whether the schedule is anticipated to meet the
adjusted revenue requirement. The formula places a 5% annual cap on the growth of total revenue estimated
to be received by WM.
Total Estimated Revenues Required
Based upon the formula in the existing agreement, the growth in revenue from Fiscal Year 2002-2003 to
Fiscal ear 2003-2004 is 4.52%. The total annual revenue required under the Agreement for the period from
July 1, 2003 through June 30, 2004 is approximately $4,942,498. Using the current subscriber census with the
COPIES TO: Patrick Gavin, District Manager WM
current rates, the Company is projected to generate $4,728,653 in revenue. This results in the need for the
proposed rate structure to generate an additional $213,845, which will make up the shortfall.
This calculation includes the one dollar per ton Conditional Use permit (CUP) Fees imposed on the Altamont
Landfill as part of the settlement of litigation over the expansion of the landfill. The City Council previously
approved Agreements with the City of Pleasanton and Alameda County, whereby Dublin agreed to pay the
fees in exchange for an assurance that monies spent on open space in the western hills would be split equally
among open space in Pleasanton and Dublin. The second of these two agreements was signed in January 2002
and it was anticipated at the time that the fees would be inclUded in WM's 2002-2003 rate application.
However the fees were not included in the Company's 2002-2003 rate application and Staff did not realize
this omission prior to the adoption of rates. Therefore, in order to observe the Agreements with Pleasanton and
Alameda County, Staff has included the $1.00 per ton fee in the 2003-2004 rate calculations and also added a
retroactive payment of $32,710 for the fees that should have been included in the 2002-2003 calculations.
These fees are included in the total required revenue calculations of $4,942,498.
Measure D Funds Used to Minimize Rate Increase
The City currently offsets a portion of the Residential Recycling Program's cost with a separate payment of
Measure D Funds. This includes both the Single Family and the Multifamily recycling programs. The level
of Measure D funding varies from year to year as sho~vn below, depending on the measure D fund balance and
the required revenue increase.
1999-2000 $89,000
2000-2001 '$89,000
2001-2002 $100,000
2002-2003 $48,000
The Fiscal Year 2003-2004 contribution is proposed at $188,362. This assumption has been included in
developing the proposed rates. This year's proposed Measure D contribution eliminates the need for a
residential rate increase. Staff is proposing this larger than normal contribution because the City will be
receiving significant excess food waste revenue that will be used to replace the Measure D funds that are
normally used to fund recycling programs.
As part of the Fiscal Year 2002-2003 rate calculations, the City included a rate component to pay for the
commercial food waste program. According to the Agreement, the City will receive payment from WM in
August 2003 for the difference between commercial food waste revenues and expenses during Fiscal Year
2002-2003. This revenue can only be used for recycling or garbage related programs. The City anticipates
significant excess revenues, potentially in excess of $170,000 in Fiscal Year 2002-3003. This is due to the fact
that the Agreement with Waste Management to implement a commercial food waste program was not
finalized and approved until September 2002. Additionally, it took several months to create marketing
materials and sign up businesses for the program. The first commercial food waste route began in January
2003. Most of the excess revenue was generated in the first six months of Fiscal Year 2002-2003. Now that
the program is fully operational, the City anticipates that the costs of the program will more closely match
revenues.
Detailed Comparison of Current and Proposed Rates
The proposed rate structure is estimated to approximate the Total Target Compensation of $4,942,498. The
actual percentage increase in the proposed rate category depends on the type of service. For Fiscal Year 2002-
2003 it is proposed that residential and drop box rates remain unchanged while commercial rates increase by
approximately 2.99%.
As has been the case for the past several years, the City's commercial rates are significantly lower than the
commercial rates of surrounding jurisdictions. The low commercial rates make it difficult to encourage
recycling. Typically businesses are more likely to recycle when the cost of recycling is much lower than the
garbage service. Last year's commercial rate increase has made it somewhat easier to sell the financial benefits
of recycling, as evidenced by a 15% increase in commercial recycling accounts from a year ago. However the
203 commercial recycling accounts still represent less than 1/3 of all commercial accounts. Even with the
increase, Dublin's commercial rates are at least 24% lower than the Th-Valley average (See Attachment 1).
Attachment 2 compares the proposed rates to the current rates for service levels, which represent a majority of
the subscribers in the City. The proposed rates would be effective July 1, 2003.
Competitiveness of Dublin Rates with Neighboring Agencies
As shown, in Attachment 1, the proposed City of Dublin rates remain very competitive compared to rates
charged for similar services in surrounding communities. In most cases, the City of Dublin service levels are
at least comparable, and often better than the survey cities. For example, Pleasanton offers Residential Green
Waste collection only every other week. Therefore, the City of Dublin residential subscribers receive more
services. For most rate categories, the proposed City of Dublin rates are well below the average of the Tri-
Valley agencies surveyed.
Recommendation
Attached to the Agenda Statement is a Resolution (Attachment 3), which will establish the Adjusted Waste
Management Rate Schedule in accordance with the Franchise Agreement, under which the Company operates
in the City of Dublin.
Staff recommends that the City Council conduct a Public Hearing and adopt the Resolution.
2003 Garbage Rate Comparison Survey
(Prepared By City of Dublin May 2003)
Printed: 5/22/2003 16:09 # Dublin Proposed % Proposed Current % Increase
Residential Livermore Pleasanton San Ramon Average Dublin From Avg Rate over 2001/2002
1Can Residential (32-35 Gallon) $ 10.00 $ 22.30 $ 11.50 $ 14.60 $ 10.15 -30% $ 10.15 0.00%
2 Can Residenfial (64-70 Gallon) $ 22.30 $ 16.73 $ 19.52 $ 18.65 -4% $ 18.65 0.00%
% Dublin Customers Covered By Sample Rate Categories: 97%
Residential Notes:
Dublin: Basic rate includes 35-gallon can supplied by LDD (weekly pick-up);Weekly 64-gallon green waste can supplied by
LDD; Weekly 64-gallon curbside recycling collection; and 3 special curbside clean-ups per year.
Livermore: Basic rate includes 35-gallon can supplied by LDD (weekly pick-up);Weekly 64-gallon green waste can supplied by
LDD; Weekly 64-gallon curbside recycling collection; and 3 on-call clean-ups per year,
San Ramon:Basic rate includes 35-gallon can supplied by Garbage Co. (weekly pick-up); Weekly 96-gallon green waste can supplied by Company;
Weekly curbside recycling, and 3 special clean-ups per year.
Pleasanton: Basic rate includes 90-gallon can (recycling + garbage) supplied by company (weekly pick-up); 64-gallon green waste can
(picked up every other week); no separate container for recyclables; 1 extra green-waste pick-up per year; no special'curbside clean-ups.
3 City Proposed % Proposed Current % Increase
Commercial Livermore Pleasanton San Ramon Average Dublin From Avg Rate over 2002/2003
1 Yard- 1 time/wk $ 47.00 $ 84.33 $ 70.00 $ 67.11 $ 43.46 -35% $42.20 2.99%
2 Yard- 1 time/wk $ 94.00 $ 168.55 $130.00 $ 130.85 $ 86.92 -34% $84.40 2.99%
3 Yard- 1 time/wk $ 141.00 $ 240.82 $180.00 $ 187.27 $130.38 -30% $126.60 2.99%
3 Yard- 2 times/wk $ 288.00 $ 445.36 $360.00 $ 364.45 $271.58 -25% $263.71 2.99%
4 Yard- 1 Time/wk $ 188.00 $ 313.54 $220.00 $ 240.51 $173.84 -28% $168.80 2.99%
4 Yards- 2 times / wk $ 384.00 $ 586.26 $440.00 $ 470.09 $358.50 -24% $348.11 2.99%
% Dublin Customers Covered By Sample Rate Categories: 75%
Drop Box
20 Yard Loose $ 228.17 $ 314.80 $300.00 $ 280.99 $261.00 -7.t% $261.00 0.00%
30 Yard Loose $ 342.25 $ 472.20 $450.00 $ 421.48 $391.50 -7.1% $391.50 0.00%
40 Yard Loose $ 456.33 $ 629.60 $600.00 $ 561.98 $522.00 -7.1% $522.00 0.00%
30 Yard Compacted $ t,026.75 $ 944.40 $900.00 $ 957.05 $783.00 -18% $783.00 0.00%
% Dublin Customers Covered By Sample Rate Categories: 84%
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.
ATTACHMENT 2 -~ u~
COMPARISON OF SELECTED RATES CURRENT
vs PROPOSED
Proposed
Current Proposed % Increase over
Residential -Monthly Rates Rate 2002/2003 2001/2002
Minimum Residential (35) Gallon $10.15 $ 10.15 0.00%
64 Gallon Residential $18.65 $ 18.65 0.00%
Sample rate categories represent 97% of residential customers
Additional Green Waste Recycling Can: $4.00 per can per month - (no change)
Multi-Family Recycling (per unit): $ 0.60 $ 0.60 0.00%
Commercial -Monthly Rates
1 Yard - 1 time / wk $42.20 $ 43.46 2.99%
2 Yard - 1 time / wk $ 84.40 $ 86.92 2.99%
3 Yard - 1 time/wk $ 126.60 $ 130.38 2.99%
3 Yard - 2 times / wk $ 263.71 $ 271.58 2.99%
4 Yard - 1 Time / wk $ 168.80 $ 173.84 2.99%
4 Yards - 2 times / wk $ 348.11 $ 358.50 2.99%
Sample rate categories represent 75% of commercial customers
Drop Box - Rates Per Service
20 Yard Loose $ 261.00 $ 261.00 0.00%
30 Yard Loose $ 391.50 $ 391.50 0.00%
40 Yard Loose $ 522.00 $ 522.00 0.00%
Represents 88% of 2002 non-compacted Drop Box Subscriptions
30 Yard Compacted $ 783.00 $ 783.00 0.00%
Represents 68% of the 2002 compacted Drop Box Subscriptions
Handy Hauler Available To Residents $ 60.70 $ 60.70 0.00%
ATTACHMENT 2
RESOLUTION NO. - 2003
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 adopted on June 13, 1995, a Franchise Agreement with Waste Management
of Alameda County; and
WHEREAS, the City Council also adopted Resolution 75-02 on June 4, 2002, which established service
rates to be effective July 1, 2002; and
WHEREAS, the Agreement provides for consideration of the seventh adjustment to the rates in accordance
~vith specified formulas to be effective July 1, 2003; and
WHEREAS, the City Council has considered this action as part of a noticed public hearing on June 3, 2003.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby adopt
the Rate Schedule attached hereto, marked Exhibit A and by reference made a part hereof.
BE IT FURTHER RESOLVED that, upon the effective date, July 1, 2003, 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 3rd day of June, 2003.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
ATTACHMENT 3
PROPOSED ADJUSTMENT TO GARBAGE COMPANY RATES
Affected Parcels
Chapter 5.32 of the Dublin Municipal Code requires for the protection of the health safety and welfare of the community
that all parcels obtain minimum weekly garbage service. Waste Management is the authorized garbage collection and
disposal firm operating within the City. The agreement between the City of Dublin and Waste Management 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 ~vill affect all parcel owners. Rates are effective July 1, 2003.
Basis of Fees
The City has negotiated a multi-year agreement with Waste Management. The Company may request a change in rates
based upon a formula which includes: changes in the Consumer Price Index; Increased Regulatory Fees; and changes in
the total tons delivered to the Landfill. The additional costs of each of these components has been allocated to the three
classes of service: Residential; Commercial Bin Service; and Drop Box/Compactor.
RESIDENTIAL RATES
Company Minimum Residential Collection Rate: Applies separately to each single family unit as well as each unit
within a duplex or other attached housing, which receives individual garbage collection services. The rate applies to the
initial 35 gallons of garbage capacity, including once per week collection and disposal; 3 annual special curbside clean-
ups; Weekly Curbside Residential Recycling; and Weekly Curbside Green Waste Recycling (64 gallon container). All
containers are provided by the Company.
Company Minimum Monthly Rate: $10.15
Residents may select a larger garbage container for an additional fee which is shown below:
64 Gallon Garbage Container: Minimum Cost Plus $ 8.50 per month (Total = $18.65 per month)
96 Gallon Garbage Container: Minimum Cost Plus $17.00 per month (Total = $27.15 per month)
Special Residential Services
Large Accumulations: $11.80 per cubic Yard
Special Pick-Ups: $12.80 minimum per pick-up
Additional Green Waste Container: $4.00 per container
COMMERCIAL AND MULTI-FAMILY BIN SERVICES (FRONT-END LOADER)
Excess Rate For Waste Which Exceeds water level: $13.05 per cubic yard
Commercial Can Service: Offered at locations unable to accommodate a commercial bin or with volumes deemed
insufficient to utilize a commercial bin. Monthly rate includes bin rental and once per week collection and disposal.
35 Gallon Container: $10.15 64 Gallon Container: $18.65 96 Gallon Container: $ 27.15
Multi-Family Recycling Service: Multi-Family rates for Recycling are charged by the Company on the number of
units located in the complex.
Monthly Cost: $ 0.60 per unit
Commercial Bin Service Rates
Rates shown on the following page are monthly rates based upon bin size and frequency of service. Rates include
collection, disposal, and bin rental.
EXHIBIT A
Size # # Times Base Monthly Size # # Times Base MotIthly
YARDS Per Wk Rate YARDS Per Wk Rate
1 1 $43.46 4 1 $173.84
1 2 $97.74 4 2 $358.50
1 3 $152.02 4 3 $543.16
1 4 $206.30 4 4 $727.82
1 5 $260.58 4 5 $912.48
4 d $1,097.14
2 1 $86.92 6 ! $260.76
2 2 $184.66 6 2 $532.34
2 3 $282.40 6 3 $803.92
2 4 $380.14 6 4 $1,075.50
2 5 $477.88 6 5 $1,347.08
3 1 $130.38 ? t $304.22
3 2 $271.58 '7 2 $619.26
3 3 $412.78 '7 3 $934.30
3 4 $553.98 ? 4 $1,249.34
3 5 $695.18 ? 5 $1,564.38
SMALL COMPACTOR SERVICE: Rates for small compactors serviced as a commercial account on a
regular route shall be billed by container size at the rate of two times the stated rate above for loose garbage.
HANDY HAULER - One-time placement and collection of a 4 cubic yard bin, including one week container rental
filled no higher than water level: $60.70
Additional Bin Rental Per Week: $10.70 per week Cost For Additional Dump: $44.00 / pick-up
Excess Per Yard If Filled Above Water Level $13.05 per cubic yard
DROP BOX / COMPACTOR RATES
Cost shown is on a per pick-up basis and is based upon the load not exceeding water level (Excess is charged the same
rate). Additional Miscellaneous charges may also apply. Rate Per Cubic Yard: Non-Compacted: $13.05
Compacted: $26.10
MISCELLANEOUS DROP BOX CHARGES
[ Drop Box Flasher Initial Placement of Drop Box Stand-By Time [
$12.75 per placement $25.00 $85.10 per hr.
Weekly Drop Box Container Rental Cancel Auto Pick-Up
Relocation of Drop Box After 1 st Week Without Notice
$38.10 per request $14.90 Per Week $48.00