HomeMy WebLinkAboutStudy Session Item #2, Supplemental Communication - Resident5/17/2017
Residential and Commercial
Trash Collection Rates----,
May 15, 2017
Solid Waste Franchise
• City has a long term, exclusive franchise with
Rainbow Environmental Services (a division of
Republic Services)
• Commercial trash and recycling services
• Residential trash and recycling services
• The Agreement provides a formula for an
adjustment to rates due and effective annually on
July 1 — the same weighted formula is used to adjust
each type of rate.
bUFFLEr#ENTAL
C00 MMUNOCATION
Meeft Date:
-��
Agenda Item No.• 1
5/17/2017
Solid Waste Franchise Formula
LANDFILL HAULERS
CPI INDEX RATE PER COST OF
MARCH TON CNG FUEL
2015 243.74 32.90 1.91
2016 247.87 32.96 2.06
2017 254.53 33.50 2.25
AMf CHANGE 6.66 0.54 0.19
% CHANGE 2.68% 1.64%J 9.38%
WEIGHTING 76% 16% 8% 100%
APPLIED TO % CHANGE 2.04 % 0.26 % 0.74% 1 3.04%
• CPI Index
The Los Angeles -Orange -Riverside County index for All Urban Consumers from the
U.S. Bureau of Labor Statistics —the most local index available
• Landfill Rate per Ton
The City's contract rate with County of Orange -adjusted annually
• Hauler Cost of CNG Fuel
Rainbow's actual cost for natural gas, electricity and compression based on their March
expense and converted to a per gallon equivalent
Commercial vs. Residential
Commercial Services
Provided to businesses,
apartment buildings, condos
Customer contracts directly
with Rainbow for services
Rainbow bills and collects from
customers
Residential Services
Provided to single-family
residences and small multi-
family apartment buildings (<5
dwelling units)
City charges customers for
service on the municipal
account statement that includes
water and sewer
City pays Rainbow monthly
2
5/17/2017
Commercial Rates
• Commercial rates are reviewed annually and any
increase or decrease is calculated per formula
• Rate schedule is presented to City Council prior to
implementation
• This year, the schedule of rates will include
commercial recyclable and commercial food waste
collection rates
Commercial Recyclable Collection
Mandatory Commercial Recycling (MCR)
• City is required by state law to offer recycling
programs to certain businesses, including multi-
family Chapter 476, Statutes of 2011, Chesbro, AB 341)
• Rainbow sorts commingled commercial trash at
MRF, therefore all businesses comply with the
mandate
• Business may choose to source separate and
MCR rates will be included in Commercial Rate
Schedule this year
3
5/17/2017
Commercial Organics Recycling
Mandatory Organics Recycling (MORe)
• Certain businesses are required by state law to
source -separate and recycle organic waste
• (AB 1826 Chesbro , Chapter 727, Statutes of 2014)
• Local jurisdictions are required to offer programs
and notify affected businesses
• New and different from our typical recycling
programs
• Organics are not a commodity with value like glass,
aluminum, paper, cardboard
• Expensive to handle and recycle, must be separate from
other recycling streams
Residential Rates �
• The city sends about 45,000 utility bill statements
monthly to trash customers
• In addition to a full-time field service representative
the city provides billing, payment and collection
processing, and call center services
• Residential rates are reviewed annually and any
increase or decrease due to Rainbow is calculated
based on formula provided in the Franchise
Agreement
• Rate charged to customers is adopted by City
Council resolution
• establishes the maximum rate chargeable to customers
• ratifies the formula provided in the Solid Waste
Franchise Agreement plus CPI
4
5/17/2017
Notification to Affected Customers
• Affected residential customers were notified by mail
of the proposed rate change and may submit a
written protest until June 5
• The process for notification and receiving objections
to proposed rate change is being followed as
established by Proposition 218
Proposed Residential Rate Change
• Increase $o.6o per residence per month for City
services implemented over the next 3 years
• $0.2o effective July 1, 2017
• $0.2o effective July 1, 2018
• $0.2o effective July 1, 2019
• Public Works staff worked with Finance to review
the Refuse Enterprise Fund
• Increase is necessary to eliminate deficit and reduce
potential General Fund subsidy
5
5/17/2017
Refuse Fund History
• In 2003, Council approved a rate increase of $0.22
to fund city costs
• From $1.03 to $1.25 per residence per month
• This has not been increased for 14 years
• In 2011, an increase of $0.30 was not approved
• Since 2003, local area CPI-U has increased 33 %
overall
• Proposed increase of 16% per year over 3 years is
similar to what annual CPI adjustments might have
provided since last increase 14 years ago
Refuse Fund Health
• Fund is projected to have deficit balance of
approximately $565,000 based on the CAFR as
of September 30, 2016
• Increase to ratepayers proposed over 3 years to
smooth impact to customers
5/17/2017
Residential Rate Change - Rainbow
• July 1, 2016 — Increase of $0.29 contractually due to
Rainbow was deferred to on or about Nov. 1, 2017
• July 1, 2017 — Increase of $0.47 contractually due to
Rainbow will also be deferred to on or about Nov. 1,
2017
• Last rate change to Rainbow was effective July 2015
- a decrease of $0.04 per residence per month
• Public hearing on the residential rate is
scheduled for the June 5 City Council meeting
Questions?
iA