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HomeMy WebLinkAbout19- Burns McDonnell - Solid Waste Rate Study Proposal BURNS`WDONNELL. -i L� To PROPOSAL FOR SOLID WASTE RATE STUDY �i SUBMITTED TO CITY OF BOZEMAN DATE FEBRUARY 15, 2019 BURNS&ME-DONNELL February 13,2019 Robin Crough City Clerk City of Bozeman 121 North Rouse Ave,Suite 200 Bozeman,MT 59771 Re: Solid Waste Rate Study—Proposal Dear Ms.Crough and Members of the Evaluation Committee: The City of Bozeman faces several financial and operational challenges with its solid waste system.Key issues include the need to develop rates that are equitable and cost of service based,as well as rates that will absorb the financial requirements associated with the extensive growth and the interest in potentially expanding recycling and composting initiatives. To prepare a solid waste rate and fee study,the City of Bozeman(City)is seeking a partner that possesses: ► A combination of financial and operational solid waste expertise; ► A proven track record of evaluating cost of service and industry benchmarks and successfully implementing rate adjustments;and ► Working knowledge of the operation-0 and financial requirements associated with recycling and composting programs. Having extensive experience in all three areas,Burns&McDonnell is that partner. When other cities in the U.S. have faced financial and operational issues with their solid waste systems,many have turned to Burns&McDonnell for sound,independent advice.Our reputation is based on our ability to provide an objective evaluation of a city's solid waste system,with a focus on sound technical and business solutions.In alignment with the City's proposal requirements,the following highlights our capabilities: Prior Regional Experience Accelerates Understanding Key Issues:The leaders of our project team have completed solid waste financial and planning studies for many communities in Montana and nearby states. For example,Seth Cunningham and Scott Pasternak completed the 2012 solid waste rate study and recycling and transfer station feasibility study for the City of Bozeman.Matt Evans was a lead author of the City of Billings'2014 solid waste master plan and we've recently been selected to complete a solid waste rate study for Billings. Seasoned Project Team Focused on Solid Waste Rate Studies Provides a Proven Methodology:Our team will be led by Scott Pasternak,Matt Evans and Seth Cunningham,who have focused their careers providing financial, operational and business consulting to our solid waste clients.Working together since the early 2000s at their former firm and at Burns&McDonnell,they have led solid waste financial studies for many communities across the U.S, focusing on western states.They will be supported by a team of consultants and engineers experienced with solid waste projects for local governmental clients. Financial Focused Methodology Provides Accurate and Timely Results:Our proposed approach is consistent with similar cost of service study projects our team members have completed for municipal clients. Due to our experience and capacity of our solid waste and resource recovery team,we can meet the City's schedule requirement with staff focused on solid waste cost of service studies. Experience with Recycling and Composting Operations Provides Key Insight: A key aspect of our solid waste and resource recovery consulting services includes supporting local governmental clients that have a need to evaluate options to establish or enhance recycling and composting programs. For example,we recently assisted Cheyenne(WY),Denver(CO),Georgetown(Co),Washington County(MN),Weatherford(TX)and Johnson County(KS)with evaluating options to increase diversion of yard trimmings and/or food scraps. 8911 Capital of Texas Highway\Building 3,Suite 3100\Austin,TX 78759 0 512-872-7130\F 512-872-7127\burnsmcd.com j Ms.Robin Crough February 13,2019 Page 2 The history of our staff with the City of Bozeman extends to the 2012 for several solid waste financial and feasibility projects.Because we have worked closely with the City over the years,we understand the key financial I'I challenges you are facing.We are looking forward to renewing our relationship with you as Burns&McDonnell. Please contact Scott Pasternak at(512)872-7141 if you need more information or have any questions. Sincerely, r Scott Pasternak Project Manager f I ` i I i I 8911 Capital of Texas Highway\Building 3,Suite 3100\Austin,TX 78759 O 512-872-7130\F 512-872-7127\burnsmcd.com 1 r i i I Table of Contents 1. Basic Information.................................................................................. 2 2. Firm Experience.................................................................................... 3 Solid Waste and Resource Recovery Consulting History................................... 3 History of Performing Solid Waste Financial Studies.........................................4 3. Proposed Team.................................................................................... 11 Qualifications of Assigned Personnel....................................................................11 Tasks and Availability 15 4. References............................................................................................16 ClientReferences ....................................................................................................16 CurrentCommitments ............................................................................................17 Example of a Recent Rate Study...........................................................................17 S. Work Summary ....................................................................................18 Understanding of Project Objectives ...................................................................18 Scopeof Work and Deliverables...........................................................................18 6. Work Plan and Project Schedule .....................................................25 Estimated Hours ProjectSchedule.....................................................................................................26 7. City-Furnished Documentation ........................................................27 ATTACHMENTS: A- PERSONNEL RESUMES B- EXAMPLE RATE STUDY C- REQUESTED CHANGES TO PROFESSIONAL SERVICES AGREEMENT BURNS * MSDONNELL.. 1. BASIC INFORMATION Firm Background Founded in 1898,Burns&McDonnell is a 100 percent employee-owned,full-service engineering, architecture,construction,environmental and consulting solutions firm.With a mission unchanged 6YO00 since 1898—make our clients successful—we partner with you to solve your toughest challenges PROFESSIONALS efficiently and safely.We bring an ownership mentality and work as an extension of your staff because we are not successful unless and until you are. ' ' EMPLOYEE—OWNED Our more than 6,000 professionals around the world bring extensive experience in a wide range of planning,scientific,architectural and engineering disciplines.We have people with the knowledge FOUNDEDIN and background to complete virtually any project and address any challenges—whether known or 1898 unforeseen—in a timely,integrated and efficient manner.This translates into project consistency, lower costs and successful projects. MORE ' THAN JIJ Being 100 percent employee-owned means we each have a stake in superior performance and a OFF,commitment to excellence that translates into successful clients.Because of this,we are regularly recognized by numerous professional organizations and publications throughout the country for our technical knowledge, superior client service and as a top place to work,including consistently ranking as one of Fortune magazine's 100 Best Companies to Work For. Client Satisfaction.We also have been recognized with a prestigious Premier Award for Client Satisfaction by the Professional Management Journal(PSMJ)for six consecutive years.The honor is based on an independent survey of our clients,who evaluated our performance in seven areas: Helpfulness,Responsiveness,Quality,Accuracy,Schedule,Budget,Scope,and Fees.We received PSMP. a rating of"exceeded client expectations"in all categories.We will utilize these strengths and PREMIER AWARD client commitment to successfully complete your projects. FOR CLIENT SATISFACTION We have more than 50 offices across the United States,including •� �® a project-based office in Gillette, ♦® �� Wyoming,and around the world. a com- �+ We bring our experienced and �6 f® ®♦® knowledgeable professionals Sam- l anywhere you need us,whether for �' �� ®�•r® periodic site visits or full ♦® ®'• ®+ relocations,to best serve your =. 0;w ®' ♦ ♦® needs and the needs of your mnw%® f311311• projects.When necessary,we also ♦® ♦® �� establish project offices to provide + 1 1 1 resources in proximity to you for local,responsive service. �• Contact Information Our project team will be led by Scott Pasternak,the primary contact,who has previous experience with the City of Bozeman conducting a solid waste rate study in 2012 and recycling and transfer station feasibility study in 2013.He can be reached at J 512-872-7141 or via email at saasternak@bumsmcd.com. 1. Basic Information BURNS 1%ME-DONNELL_ 2. FIRM EXPERIENCE SOLID WASTE AND RESOURCE RECOVERY CONSULTING HISTORY MANAGING SOLID WASTE NOW, FOR THE FUTURE Since 1970,the Burns&McDonnell Solid Waste and Resource SOLID WASTE AND Recovery Practice has successfully completed hundreds of financial, 'ROVER RROVERY EXPERIEN(E operational and engineering solid waste and recycling projects.We are Cost of Service _nd _ te Design prepared to apply our experience to make this a successful project for DebtSupport the City of Bozeman. Business and Financial Analysis Collection and Facility Operational Distinguished from financial only focused consulting firms,Burns& Reviews ). Assessments McDonnell combines technical and financial skills with innovative Routing W Landfill Engineering Permitting problem solving in everything we do—from cost of service analysisb. Benchmarking to operational reviews—to help the City of Bozeman find the best Procurement. Franchising and solution for your community.We focus on advising municipal clients Contracting on the business side of solid waste management,as well as the Ordinance Solid . technical aspects. Waste Minimization and Recycling Public involvement RATE ANALYSIS AND FINANCIAL STUDIES Stakeholder Outreach Understanding costs,revenue,and rates is critical to making Implementation and Transition Assistance financially sound decisions concerning solid waste utilities. Burns& McDonnell brings this understanding to each of our projects and is a leading provider of financial studies and analyses to public utility systems.We have developed a broad variety of rate models that allow solid waste clients to determine cost of service.We bring the operational and technical expertise required to understand an entity's solid waste system and the financial,accounting,and rate setting knowledge necessary to generate accurate and equitable rate structures. RECYCLING AND COMPOSTING OPERATIONS A key aspect of our solid waste and resource recovery consulting services includes supporting local governmental clients that have a need to evaluate options to establish or enhance recycling and composting programs. For example,we recently assisted Cheyenne }� (WY),Denver(CO),Georgetown(Co),Washington County(MN), !I Weatherford(TX)and Johnson County(KS)with evaluating options to increase diversion of yard trimmings and/or food scraps. COMPREHENSIVE SOLID WASTE OPERATIONAL REVIEWS When other cities in the United States have faced financial and operational challenges with their solid waste systems,many have turned to Burns&McDonnell to provide sound,independent advice. Our reputation is based on our ability to provide an independent, Our work for cities such as Cheyenne, objective evaluation of a city's solid waste system. Our staff have Sheridan, Denton, Tempe,Amarillo, Corpus specifically evaluated residential and commercial collection,yard Christi, Denton, El Paso, Garland and Midland waste,fleet maintenance and routing systems. have included in-depth evaluations of commercial solid waste systems. lBurns&McDonnell specializes in technically-based management consulting services for the utility industry—including solid waste management.We are recognized in the solid waste industry for our independent expertise in advising owners on rate `M[-DONNELL_ 2. Firm Experience BURNS I I i studies,operational performance,enhancement and contractual issues for solid waste and recycling services.We are nationally recognized for saving clients millions of dollars via innovative contracting,funding,operating and business process strategies,as well as for being a national recycling and waste minimization leader. ON-CALL PROFESSIONAL SERVICES Burns&McDonnell maintains many on-call professional agreements for local governmental clients within the U.S.We Presently have agreements for solid waste and recycling professional consulting services for the following cities and counties. COUNTIESCITIES ► Columbia,MO ► Larimer County,CO ► Grand Forks,ND P. Butler County,KS G ► Williston,ND ► Crow Wing,MN ► Amarillo,TX ► Lyon County,MN ► Dallas,TX ► McKenzie County,ND ► El Paso,TX ► Campbell County,WY ► San Antonio,TX ► Fremont County(District),WY ► Sheridan,WY HISTORY OF PERFORMING SOLID WASTE FINANCIAL STUDIES Financially sound decisions about solid waste utilities require an understanding of costs,revenue and rates.Our solid waste team has experience providing financial studies and analyses of public solid waste management projects and systems.Unlike er most firms that p P form these studies we combine the operational and technical knowledge required to understand your solid waste system with the financial,accounting and rate-setting knowledge to generate accurate and equitable itable rate structures. We have developed a broad variety of complex financial models that analyze cost of service determinations,evaluate feasibility issues and support the issuance of debt(e.g.revenue bonds).We supply the understanding of costs,revenue and program feasibility that is critical to helping you make financially sound decisions.Representative project team experience is listed below. We have provided descriptions for blue highlighted projects within this section. P. Matanuska-Susitna Borough,Alaska ► City of Olathe,KS ► City of Corpus Christi,TX ► North Slope Borough,AK ► City of Salina,KS ► City of Dallas,TX ► City of Little Rock,AR P. Johnson County,KS ► City of Denton,TX ► City of Fayetteville,AR ► City of Bozeman,MT ► City of El Paso,TX ► City of Coolidge,AZ ► City of Grand Forks,ND ► City of Garland,TX ► City of Casa Grande,AZ ► City of Williston,ND ► City of Lufkin,TX ► City of Glendale,AZ ► McKenzie County,North ► City of Midland,TX I ► City of Goodyear,AZ Dakota ► City of San Antonio,TX ► City of Phoenix,AZ ► City of Bartlesville,OK ► City of Weatherford,TX I ► City of Tempe,AZ ► City of Oklahoma City,OK ► Fort Bliss,TX 1 ► City of Tucson,AZ ► City of Owasso,OK ► Region 2000,VA ► City of Tulsa,OK ► City y of Cheyenne,WY ► Town of Queen Creek,AZ I ► Cochise County,AZ ► City of Austin,TX ► City of Sheridan,WY 1 ► Pima County,AZ ► City of Sioux Falls,SD ► Fremont County Solid Waste ► City and County of Denver,CO ► City of Big Spring,TX Management District,WY ► Colorado Department of ► City of College Station,TX Public Health and the Environment 2. Firm Experience BURNS`ME-DONNEL.L.. AA i CITY OF BOZEMAN, MONTANA I SOLID WASTE COST OF SERVICE AND RATE DESIGN STUDY Key members of our proposed project team(Scott Pasternak and Seth Cunningham) conducted a comprehensive solid waste cost of service study for residential and commercial services. Since many years had passed since the City's last rate increase, h there was a substantial under recovery.The Study included a five-year financial °""`°�" - S�DER4l1ry - r0 , projection based on an evaluation of the key cost centers associated with each _$2-Z332 program and the cost recovery methodology selected for each service. The Study provided the City with a detailed understanding of the current costs for the solid NO waste system,as well as a projection for the next five years.With an understanding of the need for a rate increase,the City Council adopted the needed rates for the next five years. In addition to the cost of service analysis for its current solid waste operation,we identified the potential for significant cost savings through a variety of potential operational changes. These potential changes include various combinations of enacting operational changes,increasing rates,and reducing or exiting certain services(e.g.,commercial collection). Following completion of the cost of service study,our team evaluated the financial feasibility of a transfer station and recycling services. ` CITY OF SHERIDAN, WYOMING I SOLID WASTE COST OF SERVICE AND RATE DESIGN STUDIES Asa long-time client,we have completed multiple solid waste projects under an ----- - -- on-call agreement. The City of Sheridan provides an array of solid waste _tom services including residential and commercial collection,recycling,yard waste ' management and landfill. Since 2014,we have provided solid waste cost oft:'w" service and rate studies for the City's Solid Waste Enterprise Fund. These studies have included developing an understanding of the existing solid waste operations,maintenance,and capital costs and working with staff to develop a cost forecast for the designated planning period. We worked closely with City staff considering a number of factors to finalize the rate recommendations and present to City Council. Key issues included addressing rate equity between residential and commercial customers and forecasting long term landfill capital costs. Following the presentation of the findings and recommendations to the City I Council,the rates were adjusted as recommended by City staff. CITY OF CHEYENNE, WYOMING I MULTIPLE SOLID WASTE FINANCIAL, OPERATIONAL AND PLANNING STUDIES Burns&McDonnell is presently developing a solid waste management plan and cost of service study for the City. The cost of service study is focused on evaluating the full - costs and developing rate recommendations for residential,commercial and landfill operations. Previously,we evaluated the City of Cheyenne's residential and i commercial solid waste and recycling collection systems. The study recommended multiple changes focused on enhancing financial performance,including changing from 5-day per week to 4-days per week residential collection,expanding front load -- commercial collection customers,adding an additional yard waste collection route,and getting a new routing and fleet maintenance program system. I _ I `MSDONNELL.. 2. Firm Experience BURNS CITY OF GRAND FORKS, NORTH DAKOTA I SOLID WASTE COST OF SERVICES AND RATE STUDIES The City of Grand Forks provides a range of solid waste services including residential and commercial collection,yard waste management,recycling services via contract,and landfill disposal.Since 2014,we have provided comprehensive solid waste cost of service and rates studies for the City Public Works Department. The studies have included characterizing the revenue requirements and costs and recommending residential and commercial collection rates,along with landfill disposal rates. Key issues have included 1)how to allocate the costs of baling the City's refuse and 2)identifying and recommending equitable rates for single family and multi-family -famil customers. The outcomes from the studies continue to be used to adjust p rates and provide a basis for intermediate and short-term financial planning. CITY OF SIOUX FALLS,SOUTH DAKOTA (MULTIPLE FINANCIAL, ENGINEERING AND OPERATIONAL PROJECTS Burns&McDonnell regularly provides rate studies,capital planning i estimates and recycling evaluations for the City of Sioux Falls. Annually,the Project Team reviews the landfill's expenses and revenues,and recommends rate adjustments to adequately fund the landfill's operations.We have completed the permitting,design and construction oversight of cell construction and leachate treatment ponds and multiple leachate and LFG management system expansions at the Facility for the past 14 years.We have also provided the permitting,design and construction documentation for yard waste composting,a customer convenience center, appliance and tire staging area,a maintenance building and stormwater management systems. All landfill,leachate and LFG systems have successfully operated in the harsh,windy South Dakota winters. One of the most significant projects for the City has been the planning,contract negotiation,design,permitting,and construction of a LFG reuse project that sends 2,000 cubic feet per minute of renewable fuel through an 11-mile pipeline to a local ethanol plant. This project won the 2009 USEPA Landfill Methane Outreach program award. CITY AND COUNTY OF DENVER, COLORADO I SOLID WASTE AND RECYCLING FINANCIAL AND DIVERSION STUDY The City and County of Denver developed the Master Plan for managing Solid Waste in 2010. The City is seeking to increase its recycling rate from the current 18 percent to meet or exceed the Plan's 34 percent recycling rate by 2020. In d Burns&McDonnell to provide an independent assessment of the programs and costs that would need 2017,the City retained to be implemented and/or improved to achieve the recycling rate goal. This work included developing an Excel-based model to conduct"what-if'scenarios to compare potential materials diversion and program costs. Following the analysis,Denver retained Burns&McDonnell to develop an implementation plan for deployment of staff,equipment and integration of new software. Key analysis addressed for Denver included: P. Financial and Operational Analysis: Evaluated the City's solid waste and recycling program costs and operations. ► Benchmarking: Documented successful and unsuccessful programs nationally,including statistical correlation between billing rates and recycling quantities. ► Sensitivity Analysis: Developed a detailed,Excel based decision making tool/pro forma based on the City's operational and financial metrics that allowed for extensive sensitivity analyses. ► Software Integration: Procurement of new work order management and billing system software. FREMONT COUNTY SOLID WASTE DISPOSAL DISTRICT, WYOMING I SOLID WASTE FINANCIAL AND ENGINEERING CONSULTING This scope of work was part of a long-term objective to create a more efficient,financially stable,and environmentally sound District for the multiple landfills and other solid waste facilities.The project included:financial/CIP model review,landfill capacity audits and technical engineering assistance.The City needed to implement operational changes to improve the efficiency of the facilities and reduce overall expenses.Burns&McDonnell was able to improve the District's operations and ` long-term financial sustainability by providing an understanding of long-term operational and capital costs.We developed a 2. Firm Experience BURNS`MEDONNELL.. robust cost and revenue model for the District that calculates the current cost of service for over 40 cost centers. The model also projects future reserve account balances,which the District Board use to make financial decisions CITY OF WILLISTON, NORTH DAKOTA I LOST OF SERVICE AND RECYCLING PLAN For the rapidly changing community of Williston,North Dakota,Burns&McDonnell completed a solid waste cost of service and recycling program study. The cost of service study reviewed landfill and collection services costs,revenues,future program needs and staff and equipment operations. The cost of service identified the current cost of service for residential, commercial,landfill,and yard waste operations and recommended appropriate rate adjustments. The recycling plan evaluated options,and provided recommendations,for implementing a new curbside recycling collection program for the City. CITY OF AMARILLO, TEXAS I SOLID WASTE COST OF SERVICE AND OPERATIONS REVIEW The City of Amarillo(City)retained Burns&McDonnell to complete a cost of service study and operational review of the City's solid waste and recycling operation in 2017,as a follow-on to a 2015 study,via an on-call contract with the City. A key portion of the study focused on identifying critical issues and recommended solutions,as summarized below: ► Residential Collection:Found that routes were unbalanced across certain days of the week and seasons,resulting in staffing and equipment strains. Recommendations focused on optimizing staffing levels and more technology driven routing solutions. ► Commercial Collection:Evaluated the competitiveness of the commercial collection operation,since the City competes with the private sector for customers. Identified strategies for the City to retain and increase market share. ► Fleet Replacement and Maintenance:Evaluated life-cycle costs for vehicle maintenance and replacement. Included capital and operations and maintenance costs in financial model. ► Financial Benchmarking:Concluded that rates were competitive with peer communities,even though services levels in Amarillo typically exceeded the other cities. NORTH SLOPE BOROUGH, ALASKA I SOLID WASTE AND WATER COST OF SERVICE AND RATE DESIGN STUDY Burns&McDonnell has completed multiple utility cost of service and rate design studies and operational reviews for the North Slope Borough. We recently completed a solid waste cost of service and rate design study that addresses the solid waste landfill and commercial collection operations. A key aspect of this i study addresses the issuance of more than$10 million of debt via revenue bonds. As an entity that is regulated by the Regulatory Commission of Alaska(RCA),our financial analysis is subject to review and approval by the Attorney General and review by contesting parties.Our team also completed a water and wastewater cost I of service study that included issuing more than$60 million in revenue bonds. CITY OF BIG SPRING, TEXAS I SOLID WASTE LOST OF SERVICE, OPERATIONS AND ROUTING STUDY Burns&McDonnell completed a systemwide cost of service,operational and routing study,seeking to improve operational efficiencies and to identify opportunities to decrease costs in 2014. Operations included in the review address residential and commercial refuse collection,fleet L' maintenance and landfill operations. Key findings included developing a financial plan that will fund development of new residential and commercial routes,which are projected to decrease operational and capital costs.Burns&McDonnell also developed new residential and commercial routes for the City,as illustrated in the figure to the left. BURNS`M9DONNELL.. 2. Firm Experience CITY OF COLLEGE STATION, TEXAS I COMMERCIAL AND RESIDENTIAL COST OF SERVICE STUDIES The City's solid waste department is the exclusive provider of solid waste and recycling collection services for single-and multi-family residential units and commercial businesses,including dumpsters,carts and roll-offs. The City retained Burns &McDonnell to complete a cost of service study for the City's solid waste and recycling system from 2016-2017. The cost of service and rate design study consisted of the following primary tasks: i P. Cost of Service Analysis and Five-Year Forecast:Identified costs for key programs over a five-year timeframe ► Program Revenue Stream Analysis and Rate Design:Developed multiple rate alternatives,with a focus on meeting fund balance requirements P. Benchmarking to Other Service Providers:Benchmarked 10 other cities,including several cities with large universities similar to College StationF CITY OF CORPUS CHRISTI, TEXAS I COLLECTION FINANCIAL AND OPERATIONAL FEASIBILITY III Burns&McDonnell completed an $60,000 analysis to assist the City evaluate iwhether to enter the commercial $s0,000 collection business. Our study provided $40,000 LEGEND guidance on the operational and End of Front-line Life $30,000 Actual Automated financial requirements to provide _et_ __ ____ _._ side-loader commercial solid waste and recycling $20,000 Maintenance Cost services. Based on a prior solid waste Benchmark Range $10,000 —Average Annual rate and operational study our team Maintenance Cost members completed for the City,we $0 0 1 2 3 4 5 6 7 B 9 were also able to help the City evaluate optimal times for replacement of Key findings regarding the evaluation of the annual maintenance costs for side the loaders focused on transitioning the City to a more consistent vehicle collection vehicles,as illustrated by replacement schedule. adjacent graphic. I! CITY OF DALLAS, TEXAS I MULTIPLE SOLID WASTE FINANCIAL AND OPERATIONAL PROJECTS For more than 10 years,members of the Burns&McDonnell project team have provided a wide range of solid waste consulting services to the City of Dallas,including multiple on-call agreements. Key projects have included the following: Cost of Service,Rate Design and Landfill Market Analysis Study:Burns&McDonnell is completing a comprehensive solid waste cost of service and rate design study for the City of Dallas,which provides residential collection and landfill services. Highlights of the project include: ► Financial Modeling for Enterprise Fund:Since the City recently established its solid waste enterprise fund,we developed revenue requirements and 10-year forecast that included costs associated with landfill closure and multiple reserve funds I ► Client Excel Model:Model enables the City to evaluate multiple scenarios going forward ► Landfill Market Analysis:Provided the City with a market analysis that provides insight on how the City can increase landfill rates in the future to increase revenue i ► Revenue Enhancement:Evaluating multiple new strategies to increase revenue from landfill customers that utilize more landfill resources than other customers. BURNS`MSDONNELL.. 2. Firm Experience Refuse,Fleet Maintenance and Brush and Bulky Collection Financial and Operations Review: Burns&McDonnell evaluated key staffing,equipment and financial issues for the Sanitation Department. The purpose of this analysis was to identify recommendations that can be implemented to increase efficiencies and decrease costs,as well as to provide opportunities to increase diversion from the disposal stream. Our efforts include obtaining benchmarking data from other cities.Key elements include: ► Residential Refuse and Recycling:Feasibility of alternative collection approaches to increase efficiency,focusing on serving customers curbside and with alleys I ► Fleet Maintenance:Comprehensive review of fleet maintenance operations and j' F costs i ► Brush and Bulky:Feasibility of alternative collection approaches to increase Iefficiency and diversion CITY OF DENTON, TEXAS I MULTIPLE OPERATIONAL, FINANCIAL AND PLANNING PROJECTS For more than 10 years,members of the Burns&McDonnell project team have provided a wide range of solid waste Ifinancial and operational studies to the City of Denton.Key projects in the past five years have included the following: Comprehensive Cost of Service Study:Burns&McDonnell recently completed a cost of service study for the Solid Waste Department.This analysis provided the City with an updated understanding of its financial competitive assessment for its commercial,residential refuse,recycling and brush collections and landfill operations. We also evaluated key cost drivers for maintenance of the City's fleet. Strategic Solid Waste and Recycling Plan:In 2017,Burns&McDonnell completed a strategic plan for the City's Solid Waste and Recycling Department.The purpose of the plan was to assist the City with prioritizing key issues and developing j specific strategies that will allow for successful implementation,including a goal of 40 percent recycling. !I CITY OF LUFKIN, TEXAS I COMPREHENSIVE COST OF SERVICE STUDY The City of Lufkin retained Burns&McDonnell to conduct a cost of service and rate design study for the Solid Waste and Recycling Department's operations to determine the financial sustainability of the current residential and commercial solid waste and recycling rates.In addition to using the study to adjust rates for the residential and commercial services,the City also planned to use the study to provide ' direction to future of its recycling processing operation.The City offers residential(single-family) and commercial(including multi-family)refuse and recycling services,roll-off services,and special collections services.The City is unique for a city of its size in that it owns and operates its Iown material recovery facility(MRF). Key analysis included: ► Financial Analysis:Determined that the current residential rate under-recovered relative to the cost of service for providing refuse,recycling and bulk collection service. The City had not had a residential rate increase since 1999 and a !` rate adjustment was needed to avoid drawing down on the City's operating reserve. ► Rate Alternatives:Provided two approaches to revising rates:a one-time flat rate increase and a phased in rate approach ► Cost Saving Recommendations:Identified multiple cost saving measures in its special collections operations, residential refuse and recycling routes,and residential recycling service offerings ► Benchmarking:The proposed policy measures were supported by benchmarked cost data and policies from cities in multiple states Based on the successful completion of the cost of service study the City of Lufkin approved an increase to its residential rate to achieve financial sustainability.Even with the rate increase,Lufkin remains one of the lowest priced residential refuse and I recycling providers in the East Texas region. l BURNS`MSDONNELL_ 2. Firm ExperienceA � l CITY OF MIDLAND, TEXAS COMPREHENSIVE COST OF SERVICE AND OPERATIONAL REVIEW Following requests from - rthe private sector for the City of Midland to consider privatization of �= the City's solid waste collection and landfill operations,the City retained project team members to complete a comprehensive solid waste assessment and cost of service study of commercial and residential collection and disposal services.Key aspects of the review included: P. Reviewed key issues for primary operational areas(residential and commercial collection,landfill,etc.) ► Identified key changes to decrease cost and increase revenues ► Evaluated whether City should consider privatization ► Evaluated feasibility of key changes to the collection operation ► Full cost accounting approach provided"apples to apples"comparison to comparable solid waste operations ► Financial plan focused on developing capital reserves and CIP for future landfill projects MWe identified the cost of service for each of the City's operations and benchmarked Midland's cost of service against similar operations in the United States.Based on our financial and operational review,we developed alternative operational options to decrease cost and increase operational efficiency. Following our presentation to the City Council,the City is confident that its solid waste operations are efficient and financially sound. CITY OF SALINA, KANSAS COST OF SERVICE STUDY AND BUSINESS PLAN Burns&McDonnell completed a cost of service and business plan for the City of Salina E in 2017. The study is focused on evaluating the financial feasibility for the city to transition to citywide fully-automated refuse and single-stream recycling collection operations. ±s� We provided the City with a 10-year pro forma that details the cash flows associated with making these changes. Following a workshop with their City Commission,this study was requested by the City Council and Manager based on the success of an initial recycling feasibility study completed by our project team. Experience with Public Utility, Municipal and Co-Op Clients in Montana Burns&McDonnell has 20 years of experience serving various public utilities and municipalities in Montana.A representative list of clients has been provided below. i P. Associated Electric Coop,Inc. P. Basin Electric Power Coop,Inc. ► Bonneville Power Administration ► Central Montana Electric Power Cooperative,Inc. ► Great Falls,Montana P. Montana-Dakota Utilities Company ► Northwestern Energy I. P. Western Area Power Administration E3IJRNS`M9D0NNELL_ 2. Firm Experience I 3. PROPOSED TEAM QUALIFICATIONS OF ASSIGNED PERSONNEL Qualifications of Assigned Personnel Successful completion of this project will require a team that not only has solid waste financial expertise,but also has a thorough understanding of of '• solid waste operational issues.To meet these diverse needs,the Montana individuals proposed for this project have been selected based on their experience providing a full range of solid waste financial and operational Scott consulting services to municipal clients.Burns&McDonnell is Project Manager proposing a project team with comprehensive experience collaborating with local governments. tumatt Evans, PE SOLID WASTE RATE EXPERIENCE PROVIDES PROVEN METHODOLOGY Senior Technical Advisor, Our Project Team will be led by Scott Pasternak,Seth Cunningham and Matthew Evans,who have focused their careers providing financial, operational,technical and business consulting to our solid waste clients. p In fact,Scott and Seth led the 2012 solid waste rate study for the City of 11 Financial Analysts Bozeman.Working together since the early 2000s,they have led solid waste financial studies and operational reviews for many communities across the U.S.,as highlighted in Section 2.The methodology proposed _ th ham, PE for the City has been used by our project team to complete multiple Koller,• � similar cost of service,rate design and financial studies. The Gerron organizational chart identifies the roles for our project team members. Eric Weiss Biographical descriptions of our project team are included in this Jonathan section. Resumes for the key project team leaders(Scott,Seth and Matt)are included in Attachment A. Scott Pasternak I Project Manager a M.S., Community and Regional Planning, Environmental Planning and Public Finance Concentration B.A., Government, Minor: Business Scott Pasternak leads Burns&McDonnell's Financial and Operational Solid Waste and Resource Recovery Practice. Since the 1990s,he has worked with local and regional governments to solve challenging technical and financial solid waste management and recycling issues.Over this time period,he completed hundreds of projects for clients across the United States. Prior to joining Burns&McDonnell,he was the Solid Waste Practice leader for R.W.Beck where he was employed from 2000 to 2013. From 1995 to 2000,he was a solid waste planner for the Texas Commission on Environmental Quality(TCEQ). He past Director for SWANA's Planning and Management Division and serves on the Editorial Advisory Board for MSW Management. ► Regional Solid Waste Experience:Scott has led or contributed to a number of solid waste financial,planning and operational studies for governmental clients in the region. He has managed multiple solid waste cost of service and feasibility studies for the City of Bozeman. For Cheyenne,he contributed to residential and commercial operational reviews and is presently a technical advisor for the on-going cost of service study and solid waste management plan. He also led development of a statewide solid waste management plan for Colorado,which included extensive financial analysis. He's also contributed to recent financial and operational studies for Denver. 3. Proposed Team BURNS`ME-DONNELL. I ► Financial/Cost of Service: He has completed more than 75 financial feasibility and cost of service studies for solid waste clients.These projects have been completed as stand-alone studies,as well as in conjunction with operational reviews.Representative clients have included Bozeman,Cheyenne,Denver,Little Rock,Pulaski County Solid Waste Management District,Amarillo,Austin,Corpus Christi,Dallas,Denton,El Paso,Huntsville,Irving,Midland,Oklahoma City,Olathe,Phoenix,San Antonio,Tucson and Tulsa. All of these projects have included the development of complex Excel-based models. He has also led multiple projects for clients like the North Slope Borough,Alaska and Region 2000,Virginia in support of efforts to issue debt(e.g.revenue bonds). ► Collection and Landfill Operational Reviews:Scott is nationally recognized for conducting operational reviews focused on reducing costs and increasing operational efficiencies,often resulting in multimillion-dollar benefits to clients. Operations addressed have included commercial and residential refuse,recycling and bulky waste collection,as well as facilities such as transfer stations,MRFs and landfills. Many projects have addressed evaluating multiple commercial and/or residential collection system options. Representative projects have included the following cities: Fayetteville,Little Rock,Austin,Amarillo,Bartlesville,Corpus Christi,Dallas,Denton,El Paso,Fort Worth,Glendale, - Irving,Killeen,Midland,Norman,Olathe,Owasso,Phoenix,San Antonio,Shreveport,Tempe,Tulsa and Victoria. ► Elected Official Engagement: He has completed solid waste financial and operational projects that have involved extensive communication with elected officials and/or Boards. Many of these projects—for clients such as Bozeman, Tulsa,Dallas,Tempe,Denton,Olathe,El Paso and San Antonio—have focused on critical solid waste financial issues and have received key approvals. u Seth Cunningham, PE I lead Financial Consultant MBA Finance B.S., Mechanical Engineering Seth Cunningham,PE,is a project manager with more than 20 years of experience for financial and operational recycling and solid waste consulting engagements,serving clients across the United States. Possessing both business and engineering degrees,Seth is able to provide clients creative,yet fiscally I a� responsible,solutions to technical problems.With his unique background and diverse skill set,he is able to bridge the information gap that often exists between the business and technical side of the operation.Seth has gained a thorough understanding of waste and recycling issues through his management of projects that have addressed a range of solid waste management practices,including landfills,transfer stations,composting,material recovery facilities,collection (refuse,recycling,green waste,brush/bulky),and waste to energy.He is presently the Technology Committee Chair for the Collection and Transfer Technical Division for the Solid Waste Association of North America. ► Regional Solid Waste Experience: Seth has led or contributed to a number of solid waste financial,planning and operational studies for governmental clients in the region. He was the lead consultant for a solid waste cost of service studies for the cities of Bozeman,Denver and Sheridan. For Cheyenne,he is presently assisting on the on-going cost of service study and solid waste management plan. In 2016,he led the economic modeling for a statewide plan for the Colorado Department of Health and the Environment that is focused on evaluating the costs and funding options for landfill infrastructure. ► Financial/Cost of Service:He has provided cost of service and financial feasibility services to over 30 clients covering a ` range of collection,landfill,transfer station,recycling facility and other solid waste services.He has provided financial analysis for multiple projects for clients like the North Slope Borough,Alaska and Region 2000,Virginia in support of efforts to issue debt(e.g.revenue bonds). Representative clients have included the cities of Amarillo,Austin,Bartlesville, Bozeman,College Station,Dallas,Denton,Denver,El Paso,Garland,Little Rock,Lufkin,Midland,North Texas Municipal Water District,Phoenix,Santa Fe,Sheridan,Sioux Falls,Tempe and Tulsa.All of these projects have included the development of complex Excel-based models. ► Collection and Facility Operational Reviews:He has conducted a range of commercial and residential collection and solid waste facility operational reviews that were focused on streamlining existing operations,introducing new cost- , � 3. Proposed Team BURNS I&NICDONNELL- i effective programs,and increasing revenue opportunities. Operations addressed have included commercial and residential refuse,recycling and bulk collection,as well as facilities such as transfer stations,MRFs and landfills. Representative projects have included clients in the following cities:Amarillo,Bartlesville,Cochise County,Glendale,Dallas,Denton,El Paso,Fayetteville,Garland,Little Rock,Lufkin,North Texas Municipal Water District,Phoenix,Pima County, Shreveport,Tempe,Tulsa,Victoria and Weatherford. ► Landfill Financial and Operational Planning: Seth managed a significant number of landfill projects that have advised clients on key landfill planning and financial issues. For example,he completed a financial analysis for the City of Dallas that guided City Council's decision to offer discounted rates in exchange for multi-year tonnage commitments. He u' completed a similar study for the City of Garland in 2017. For the City of El Paso,he evaluated the financial and technical viability of purchasing land to expand the landfill. Matthew Evans, PE I Senior Technical Advisor B.S., Civil Engineering -- Matt Evans is a civil engineer who specializes in solid waste management solutions.He specializes in solid waste planning and regularly provides master plan,facility review and financial analysis consulting services to municipal clients.In addition to planning,he manages landfill development,permitting,design and construction projects.Matt has extensive solid waste infrastructure evaluation and design experience and ` has completed transfer stations,compost facilities,landfill gas utilization systems and recycling facilities. I f ► Regional Solid Waste Experience: Matt was a lead team member of the City of Billings Solid Waste Plan in 2013, identifying future options for City's solid waste collection,recycling and landfill services. Additionally,Matt has worked with communities across the rocky mountain region,assisting them in providing efficient solid waste management services that align with their community's solid waste and diversion goals. Communities that Matt has worked with in the region include:Williston,North Dakota;Cheyenne,Wyoming;Vermillion,South Dakota;and Fremont County, Wyoming. ► Financial/Cost of Service: Efficient solid waste and recycling services are something that all communities that provide these services strive for. Matt has lead project teams in developing financial and cost of service models for communities, identifying revenue requirements for the various solid waste services provided. Matt has lead the recommendation of new rate structures to adequately fund these services. ► Collection and Facility Operational Reviews:Matt evaluated collection and facility operations in Cheyenne,Wyoming; Big Spring,Texas;and Amarillo,Texas. These reviews identified methods for providing more efficient collection services,through rebalancing of routes,changing from five 8-hour day weeks to four 10-hour day weeks,to converting commercial collection routes from rear-load trucks to front-load trucks that are more cost effective. ► Landfill Permitting,Design and Construction: Matt has performed engineering services for landfills across the country,and around the world. He has designed landfill cells,compost pads,residential drop-off areas,leachate ponds, and landfill gas collection and reuse systems. Additionally,he has provided third party review of landfill and landfill gas operations,recommending improvements to maximize efficiency,improve customer service,and methods to extend the life of these valuable community assets to provide cost effective,environmentally sound and operator friendly facilities. Tonya Koller, PE I Financial Consultant and Landfill Engineer B.S., Civil Engineering Tonya Koller,PE,is a civil engineer with 10 years of consulting experience. Tonya has completed ~! numerous cost-of-service studies,rate fee assessments,and other financial analyses for solid waste clients as well as benchmarking of solid waste systems. Tonya also provides facility siting and design,cost estimating,permitting,environmental monitoring and reporting,and construction management services for municipal solid waste facilities. Key experience includes: 3. Proposed Team E3URNS*%: NELL.. ► Regional Solid Waste Experience:Regionally,Tonya has assisted Campbell County,Wyoming with an airspace optimization study for maximizing site design,financial considerations and operational understandings as well as completed the lifetime permit for the facility to incorporate these changes. Tonya has also assisted McKenzie County, North Dakota with facility master planning,permitting,and facility design and construction. Tonya has also completed cost-of-service studies for the City of Sheridan,WY and Williston,ND. ► Financial/Cost of Service:Tonya completed multiple projects for financial modeling and evaluation of solid waste systems including:cost-of-service studies for Williston,Sheridan,Grand Forks,Coolidge,and Sioux Falls Landfill;and financial assurance calculations for Denton,Crow Wing County Landfill,Lyon County Landfill,Sioux Falls Landfill, McKenzie County Landfill,Coolidge,and Madison County;and tip fee assessments for the McKenzie County Landfill, Grand Forks,Sioux Falls Landfill,Lyon County Landfill.Also completed financial feasibility(including pro formas)for evaluation of feasibility of ongoing operations at a waste-to-energy facility(Barron,WI),development of a contaminated soil landfill within a quarry(Sioux Falls,SD),development of a processed engineered fuel facility(Huron,SD),and analyzing cost of recycling implementation(Crow Wing County,MN). _ ► Collection and Landfill Operational Reviews:Tonya has contributed to a number of collection and landfill operational I review for clients such as Amarillo,Coolidge,Bastrop and Missouri City. She also assisted the City of Minneapolis evaluate commercial collection options such as organized collection,exclusive and non-exclusive franchises,districting and municipalization. ► Landfill Permitting,Design and Construction:She has designed and oversaw construction for numerous landfill cells, leachate treatment ponds,and landfill closures all of which included the development of financial cost estimates.Ms. Koller also has developed capital level cost estimates for several landfills(McKenzie County,Grand Forks,Sioux Falls, Lyon County,Crow Wing County,Denton)as part of the tip fee(pro forma)assessments.Completed numerous 1 permitting applications,response to permit requirements,and regulatory correspondence for ongoing landfill operations. 1111 Experience completing operations plans and waste acceptance guidelines for operations.Ms.Koller excels at working with regulatory agencies on behalf of her clients. l Gerron Blackwell I Financial Analyst MBA Finance B.S., CADD Gerron specializes in financial modeling,financial analysis,forecasting and valuation assessment.Specific experience includes the projections of revenues and expenses,normalization of test period data,analyses of customer class load characteristics,development of customer class cost allocation factors,design of cost-of- service rates and calculations of revenue under proposed rates.Analyses performed include development of revenue I requirements forecasts,cost-of-service analysis,consolidation of customer classes,and various modifications to the rate design structure. Eric Weiss I Financial Analyst B.S., Integrated Engineering,Arts and Sciences Eric Weiss has served both public and private sector clients by working on solid waste strategic and business planning projects,project due diligence and financing and procurements for waste collection,processing and disposal systems.He provides technical and subject matter expertise in supporting the planning, development,implementation,operation and optimization of solid waste management systems,and all integrated components. He has contributed to multiple reports that have been utilzied to support financing Imultiple solid waste systems. 9 I . I l BURNS`MSDONNELL_ 3. Proposed Team Jonathan Ghysels I Financial Analyst ..�,a B.A., Economics Jonathan is a fmancial analyst in our solid waste and resource recovery practice. He is presently contributing to solid waste rate studies for the cities of Billings,Litte Rock and Dallas. Prior to joining Burns& McDonnell he worked for a Credit_Suisse AG as a global markets controls analyst. TASKS AND AVAILABILITY This section identifies the tasks assigned to each individual and percentage of time individual is intended to serve on the project. We have organized this information based on the categories included in our organizational chart on page 11. The percentage of time is based on a project schedule of approximately 90 days. For the financial analyst role,we have listed multiple project team members as we will collaborate together to complete the study in a timely manner;the estimated percentage of time is based on two people. ROLE PROJE(T TEAM TASK RESPONSIBILITIES PER(ENTAGE OF TIME FOR MEMBER(S) M iL PROJE(T DURATION Proj ect Scott Pasternak Responsible for all tasks,ultimately resulting 15 percent Manager in successful adoption of new rates. Will participate in Commission meetings. Senior Matt Evans Provides reviews and insight at key points 5 percent Technical during the project. Advisor Lead Financial Seth Cunningham Responsible for leading financial analysis 15 percent Consultant and rate development. Financial Tonya Koller,Gerron Responsible for Excel modeling,drafting 25 percent Analysts Blackwell,Eric Weiss, report and PowerPoint presentation. Jonathan Ghysels l BURNS 1%MSDONNELL. I i 4. REFERENCES CLIENT REFERENCES We have built our reputation by providing clients with solutions that are based on sound principles,economic feasibility,and innovative thinking without losing sight of budget and schedule considerations and constraints. Below is a list of references we encourage you to contact for more insight on our project performance and dedication.These references have worked with us on numerous solid waste financial,planning and operational projects,and can provide you with honest feedback about our work and services. City of Bozeman,Montana' Kevin Handelin VSolid Waste Division Superintendent 406-582-3238 kandelin@bozeman.net City of and County of Denver, Colorado Charlotte Pitt Solid Waste and Recycling Manager 303-446-3413 Charlotte.Pitt@denvergov.org City of Grand Forks,North Dakota LeabRae Amundson Solid Waste Manager 701-738-8744 lmundson@grandforksgov.com City of Denton, Texas Tina Ek Financial Administrator- Solid Waste and Recycling Department 940-349-8056 Tina.Ek@cityofdenton.com City of Cheyenne, Wyoming Matt Theriault Public Works Engineer 307-637-6279 mtheriault@cheyennecity.org I W.Handelin was the primary point of contact when Scott and Seth completed the 2012 Solid Rate Waste Study for the City of Bozeman while employed at their previous firm. 4. References BURNS,M�D®NNELL_ CURRENT COMMITMENTS Our proposed project team's current solid waste financial studies and their estimated completion dates include: JURISDI(TION CONTACTAND NUMBER LENGTH I f ENGAGEMENT City of Dallas,Texas Kelly High:(214)670-4485 October 2018—March 2019 Town of Queen Creek, Ramona Simpson:(480)358-3831 September 2018—March 2019 Arizona City of Little Rock, Warren Atkins:(501)888-4581 January 2019—April 2019 Arkansas North Slope Borough, Report complete,assisting with regulatory Fadil Limani:(907)538-4940 approval process until May 2019 Alaska City of Denver,Colorado Charlotte Pitt:(303)446-3413 February 2019—July 2019 I ---T7 City of Billings,Montana' Stacey Teague:(406)237-6222 February 2 119—June 2019 I I EXAMPLE OF A RECENT RATE STUDY Burns&McDonnell has included a copy of the Cost of Service and Rate Design Study for the City of College Station,Texas. This study is unique in that it was completed in two phases. Burns&McDonnell initially focused on the City's commercial collection operation. It was determined during the commercial collection study that there were significant subsidies between the residential and commercial collection operations despite the City wanting each operation to be self-sufficient. Burns& McDonnell then completed the cost of service analysis for the residential collection operation and updated the commercial collection analysis(based on new budget data)and developed one draft report that combined both analyses. The City ultimately adopted rates similar to the"Scenario 1"rates from Section 3 of the report. I 'Burns&McDonnell is presently in the process of finalizing an agreement with the City of Billings to complete a solid waste rate study. 4. References BURNS MCDONNELL.. P S. WORK SUMMARY UNDERSTANDING OF PROJECT OBJECTIVES The City of Bozeman(City)provides a comprehensive array of solid waste and recycling services for residential and commercial customers. Since the City of Bozeman completed its last solid waste rate study in 2012,there is a need for the City to develop a new study that provides an understanding of the adequacy of current rates,as well as insight on how to adjust rates in the future to maintain the financial integrity of the solid waste system. To communicate our understanding of the project objectives and outcomes,we have developed the following draft scope of work to complete a solid waste rate study for the City. The purpose of this study is to provide the City with an understanding of the full costs of existing Solid y Waste Division operations and to develop a long-term financial plan. I Burns&McDonnell's philosophy is to deliver services to you that are comprehensive and provide the highest level of quality and professional integrity. Our conclusions and recommendations will be supported by appropriate data and analyses,with comparisons made to both the internal metrics and the solid waste industry.This section provides a methodology of the I approach Burns&McDonnell proposes to accomplish the City's objectives for this type of engagement. The basic tenets of our project approach have been time tested through the successful conduct of numerous comprehensive solid waste financial studies for public entities throughout the nation.We have successfully developed financial studies that have often resulted in the development of sustainable,long-term rate recommendations. We are open to discussing the contents of the scope of work to provide a study that best meet your needs. SCOPE OF WORK AND DELIVERABLES This section describes our specific scope of work and deliverables on a task by task basis. i Phase 1 Project Initiation & Management TASK IA: INITIAL DATA REQUEST& REVIEW I Following receipt of the Notice to Proceed,Burns&McDonnell will provide the City with a detailed preliminary data I request that will encompass data needs for completing the study. The data request will itemize our needs for understanding the operational and financial considerations that must be addressed. While the anticipated data request is too detailed to list in this proposal,the following summarizes key data that we will request from the City: ► Copies of the ordinances,regulations,policies and agreements governing the current finances of the solid waste operation ► Supporting documentation used in the computation of all solid waste fee I ► Historical solid waste fees available from the City ► Historical and current budgets ► Billing data ► Contracts and other inter-governmental — agreements ► Personnel rosters f ► Inventory of equipment ► Solid waste revenue ► Reserve fund balances 5. Work Summary y BURNS�MSDONNELL. AA i This task also includes organization and preliminary analysis of all data received.We recognize that the City may not have all information requested readily available or may track information differently than requested. We will work with the appointed project manager to arrive at reasonable substitutes for the key data,if needed. TASK 16: ESTABLISH A PROJECT TASK FORCE In order to get the best information possible and increase buy-in for the outcomes of this project,we recommend that the City establish a Project Task Force(PTF)to participate throughout the process. The PTF would ideally include 5—7 key representatives from diverse roles and levels of responsibility within the City,including senior management. Based on experience applying this approach with other local governments,it is our general recommendation that participants include: ► Solid Waste Manager ► Public Works Director(or designee) ► City Manager(or designee) j ► Finance Director(or designee) ► Key solid waste managers for collection operations The PTF will participate in the kick-off meeting,help facilitate data collection,provide feedback on preliminary findings,and provide support to our project team throughout the project. By involving a variety of individuals with a wide range of skills and responsibilities,a complete picture of the solid waste system can be developed more quickly. The diverse experience and concerns of the participants will help identify problem areas and contribute meaningful input to the solutions. Full participation from the PTF members should also be expected to increase buy-in and will speed implementation of the project findings. TASK 1C: KICK-OFF MEETING & PROJECT MANAGEMENT Prior to commencing the study,members of the project team will conduct a kick-off conference call and then an on-site kick-off meeting with key City Understanding staff. The purpose of the initial conference call will be to plan for the kick- &Goals off meeting and site visit. At this kick-off meeting we will discuss the Ar Create AII Confirm City project work plan,key issues to be addressed,key findings from previous CommunicationA engagements as well as confirm the timing associated with the various KICK- project tasks. OFF MEETING l We will discuss our initial data request(as previously described)that we will IF confirm have provided to the City staff 7 to 14 days prior to the kick-off meeting. F Schedule Information Burns&McDonnell will provide the agenda and any handout materials at least two days in advance. ---TAssignments— During the meeting,we will also identify primary contacts for our project team and the City and establish protocol for the exchange of information and the resolution of issues that arise in the normal course of this engagement. The kick-of meeting will provide a forum for To facilitate effective communication between project team members and the establishing clear communication for the City throughout the course of this project,Burns&McDonnell will: project. ► Schedule and participate in periodic conference calls as needed to discuss project matters(as identified in the specific tasks of this scope of work) ► Provide periodic status updated via electronic format ► Be available for other communication(s)as needed 5. Work Summary • BURN S`MEDONNELL.: I h PHASE 1 DELIVERABLES P. Preliminary data request ► Electronic copies of the kick-off meeting agenda,handouts,and follow-up summary ► Participation of Burns&McDonnell project manager and key staff in conference call and on-site kick-off meeting Phase 1: Cost of Service & Rate Study A cost of service study provides a clear understanding of the current operation's cost of providing service.This methodology is consistent with other financial studies Burns&McDonnell has completed for communities across the United States. TASK 2A: CURRENT COST OF SERVICE ANALYSIS A"Test Year"is a common term in cost of service studies that refers to an adjusted fiscal year budget that is used as a basis for determining cost of service and setting rates. The Test Year should be representative of typical conditions,with I adjustments for any unusual or one-time expenses.Any projected non-recurring expenses or revenues will be identified and incorporated into the financial forecast. Burns&McDonnell will work with the City to develop an accurate Test Year revenue requirement reflecting the revenue required to meet all operating and maintenance(O&M)costs,debt service I (including coverage and reserve requirements),working capital requirements,and capital expenditures. The goal of this task will be to document the current full cost of the City's various solid waste services and to allocate these Icosts to the appropriate cost centers. As part of this task,Burns&McDonnell will: ► Review current and historical financial data collected as part of Task 1 ► Summarize and analyze the current solid waste fees ► Develop a revenue requirement for the"Test Year,"which includes,but not limited to,the following types of costs: o Operational and maintenance o General fund and administrative overhead o Capital equipment and facility costs(current and future needs) o Current and anticipated long-term liabilities and debt obligations(and associated debt-coverage ratios) o Working capital and reserve funds requirements ► Work with the City to define cost centers:Cost centers will be based on the primary services provided by the Solid Waste Division and will be refined based on input from City staff. A preliminary listing of cost centers may include:Residential Garbage,Residential Compost,Brush and Tree Trimming,Bulky Item,Single-stream Recycling,Commercial Dumpster,Commercial Roll-off,Disposal,and Administration No. Work with the City to allocate test year costs to the cost centers in the cost allocation model ► Develop an infrastructure and vehicle/equipment replacement analysis to account for growth and replacement ► Assist the City in developing or modifying a cost allocation strategy that captures capital,debt,operations,and maintenance costs,as well as indirect costs(administration and overhead)for each of the targeted services ► Allocate cost centers to customer classes' ► Determine billing units and calculate the cost of service 'Customer classes will include residential,commercial and landfill customers and may include other customer group as determined during the study. BURNS`M9DONNELL_ 5. Work Summary • RequirementsGross Revenue Adjustments . This figure describes the process to develop the , Test Year Revenue Requirement and to allocate the expenses to appropriate cost centers. Allocate o Cost Centers Residential Residential , Tree Bulky Single-stream Garbage p o Commercial Commercial ministration Dumpster Roll-off For equipment and personnel that serve more than one function,we will assist City staff in the development of an appropriate strategy to allocate those costs among the programs being evaluated. It will be imperative to work closely with financial and i operational personnel during the cost allocation process to confirm that all direct and indirect costs are apportioned in an appropriate and meaningful way among the programs being evaluated,which will be critical given the broad range of services and operations. TASK 2A DELIVERABLES ► Meeting with City staff(same trip as the kick-off meeting) ► A Test Year revenue requirement ► Calculation of the Test Year cost of service ► Conference call with City staff to discuss results of Task 2A TASK 213: FORECASTED COST OF SERVICE ANALYSIS, PROGRAM REVENUE STREAM ANALYSIS, BEN(HMARKING AND RATE DEVELOPMENT This task will include four primary objectives:(1)to develop a five-year forecast;(2)to determine current revenue generation and review billing methods;(3)financial benchmarking;and(5)fee structure methodology and rate development. Five-Year Forecasted Cost of Service In addition to calculating the current cost of service for the Test Year,Burns&McDonnell will project the future cost of service for a five-year time frame and will allocate these costs to the appropriate cost centers. While we understand that the City is requesting rate recommendations for the next two fiscal years,developing a five-year forecast provides additional insight on rate design. Burns&McDonnell will work in conjunction with the City to develop an accurate five-year revenue requirement and billing unit forecast. To develop the five-year revenue requirement for the City,Burns&McDonnell will examine historical budgets and audited financials and,utilizing input from City staff,will develop a forecast that incorporates"known and measurable"changes for the forecasted period. Burns&McDonnell will analyze the assumptions used in projecting the f I' BURNS`M�®®NNELL. 5. Work Summary { �1 I II I revenue requirement and billing units,including,but not limited to,growth rate,inflation rates,increase in contractual obligations,and capital improvement plans for fleet,equipment and facilities.We will also develop the following schedules as a part of the five-year forecast: ► Fleet replacement:Specific to equipment,we will collaborate with the City to develop an equipment replacement strategy for the five-year forecast. ► Debt service and capital improvement plan(CIP):Will account for existing debt and anticipate future CIP needs. P. Reserve funds:There is a need for capital and operating reserve funds.We will review existing balances and account for additional amounts that may be needed. Review Revenue Generation from Existing Customer Classes and Review Billing Methods Burns&McDonnell will evaluate how much revenue is currently generated by the current fee structure from the existing customer classes to determine if revenues generated are sufficient to recover the cost of service assigned to each customer class. We will assess the overall revenue requirement compared to revenue generated under the current fee structure and y rates. We will complete this analysis based on a review of revenue received by the City for the various services provided. PWe will independently estimate how much revenue should be generated by the current billing units to estimate whether any under-recovering is occurring. This analysis will provide the City with an understanding of how current rates are either over- or under-recovering compared to the cost of service. I Financial Benchmarking This effort will reflect efforts to benchmark key costs and rates from other communities,building from a similar project we are developing for the City of Billings. Burns&McDonnell will prepare an analysis of current costs and solid waste rates being charges by all major cities in Montana and several in surrounding states for major customer classes-such as residential,commercial and landfill.Since we have previously s� z performed similar solid waste financial/rate analyses for several El Paso Rates: Low and Flat other cities in the multi-state j 1 $29.00 - yl region,we bring a working knowledge of existing rate 527.00 structures,as well as a familiarity 525.00 i - - - ---with the other City's solid waste $23.00 —----.-. ----- -----_------------ operations,which may help S21.00 explain why some city s rates are --nu:un(o.9s1 00 higher/lower than others. In ce,pescn lrc(s.3 , . S37.00 ... -- ----.- .. s - -- oaoa:(23%) Municipal addition to providing information on the rates,we can provide $35.00 —To sen(2.0%) r 1--Mfington(3.3�1 1 information on the cost of service j--RWorlh(0.7:q $33.00 ! — Ie_ 1 PEnate or Managed based on other cost of service _ 1__or1,3.5<" EI Paso ! — 1 competition i , rnoenR(z.r) ( studies we have completed. For $11-00 1__Tnna(2.ra) example,we have data on the cost $9.00 ry�y mood elvie ryooa ry0,,o �otiti votiti �oti�, per collection for front-load collection for multiple cities. The Rate for some intermediate years are based on interpolated data beMeen known rates following figure shows how we recently communicated This figure is a slide from a PowerPoint presentation to City Council in the City of El Paso. information to the City of El Paso The City was interested in privatization of residential refuse services. Our internal benchmarking data from other peer cities showed that the rates for El Paso had been City Council regarding residential comparatively low for an extended number of years. Following our presentation,the solid waste rates. Council discontinued its interest in privatization. I BURNS`MG DON NELL_ 5. Work YAA it I Fee Structure Methodology and Rate Development The objective of this task is to develop proposed rates that meet the needs and objectives of the solid waste system for the next five years.Burns&McDonnell will assess the existing rate structure for its historical performance,overall equity,and ability to meet City objectives for future solid waste rates.Prior to developing specific rates,we will provide an overview of several proven approaches to municipal solid waste fund rate design and implementation. Rate alternatives for each rate category will be developed based on our industry experience and collaboration with the PTF. For each alternative,rates will be designed to generate adequate revenues in accordance with the financial forecast results, reflect the results of the cost of services analysis,and further the objectives of the City for the utility systems.The pros and cons of each alternative will be evaluated;including compatibility with the City's billing system.Pricing objectives could include but would not be limited to: P. Escalation Strategies—For communities that have a need for increases,rates can be designed to be phased in at once or over an extended period of time. We will provide the City with an understanding of the financial implications associated with the timing of the proposed increases. ► Meeting Revenue Requirements in a Stable and Predictable Manner—Regardless of the outcome of the rate design process,rates must produce sufficient revenues to meet both the short-term and long-term financial needs and 6` business objectives of the City.► Fee Structure Equity—To the greatest extent possible,rate design will be based on cost of service principles and will not unduly subsidize certain customers or rate classes at the expense of others.We will specifically align rates with the cost of service for each of the major customer classes. P. Environmental Sustainability—Simply put,rates send pricing signals to customers.These pricing signals should promote efficient use of the City's resources and increase customer understanding of the cost associated with the various products and services provided by the City. WE will specifically examine the variable rates presently in l place for residential and commercial services. ► Simple and Understandable—From a public relations perspective,simple and easy to understand rate structures are a benefit in that the City will be able to clearly communicate the relationship between the cost of service and customer use. In addition,Burns&McDonnell is knowledgeable about statutory regulations affecting cost of service and rate development and will design rates accordingly.If desired by the City,annual inflationary adjustments may be considered to provide a means by which future adjustments may be indexed and adjusted automatically.This will effectively allow the City to systematically incorporate marginal rate increases. TASK 2B DELIVERABLES P. A"base case"five-year revenue requirement forecast and fleet replacement schedule ► The calculation of the cost of service in each year ► Revenue projections ► Financial benchmarking ► Conference call to discuss findings and rate recommendations ► Rate design recommendations for the next five years for each customer class Phase 3: Report Preparation and Presentation TASK 3A: DRAFT REPORT Upon completion of the analyses outlined above,Burns&McDonnell will develop a Draft Report outlining recommendations and conclusions in a clear and concise manner.The report will include detailed recommendations [ for changes,if any,to current practices and/or procedures. The report will include an implementation schedule for 1. BURNS�MSDONNELL.. 5. Work Summary i timely and coordinated execution of all essential aspects of the report.Burns&McDonnell is committed to making sure the City thoroughly understands the recommendations in the Draft Report.Burns&McDonnell will provide the findings to the City staff and allow these individuals sufficient time to have their concerns and/or questions addressed. Burns& McDonnell will have a conference call with City staff to discuss the report. Burns&McDonnell will request that written comments be provided as one submittal from City staff to facilitate consensus regarding staff comments. TASK 313: FINAL REPORT Upon receipt of City staff recommendations and comments,Burns&McDonnell will make appropriate changes and provide the City with a Final Report. We will issue the Final Report within three weeks of receiving comments from the City. TASK 3(: DEVELOP POWERPOINT AND CONDUCT CITY COMMISSION MEETING Burns&McDonnell will develop a PowerPoint presentation that summarizes the key findings of the study. Burns& McDonnell will attend and present findings and recommendations from the report at a City Commission meeting or workshop.Burns&McDonnell will support the presentation of results and recommendations of the study.One PowerPoint presentation and handouts will be developed for use by the City to communicate the analysis,key findings and rate recommendations. TASK 3D: ASSIST WITH PLAN IMPLEMENTATION (OPTIONAL) If requested,we will be prepared to assist the City in implementing any new or revised rate schedules,to include attendance at several anticipated rate hearings.Upon request from the City,we will develop a specific scope of work and fee for these services. PHASE 3 DELIVERABLES ► Electronic version of the Draft Report ► One conference call to discuss the Draft Report ► Printed and one electronic version of the Final Report ► PowerPoint presentation ► Participation in City Council Meeting or workshop 5.Work Summary BURNS`M5®®NNELL.. 6. WORK PLAN AND PROJECT SCHEDULE Based on the scope of work included in Section 5,this section provides estimates of the number of hours for our project team to complete the study,as well as a schedule for the timely completing of the project. ESTIMATED HOURS The following table provides an outline of the services to be provided and includes the number of hours by task and positions identified on the organizational chart provided in Section 3. Hours Task Project Senior Lead Financial Manager Advisor AnaIVst AnalVst Phase 1:Project Initiation&Management TASK IIA: INITIAL DATA REQUEST&REVIEW 2 4 10 TASK 1B: ESTABLISH A PROJECT TASK FORCE TASK 1(: KICK-OFF MEETING &PROJECT MANAGEMENT 6 6 8 Phase 2:Cost of Service&Rate Study TASK 2A: CURRENT COST OF SERVICE ANALYSIS 16 2 12 60 TASK 2B: FORECASTED COST OF SERVICE ANALYSIS, PROGRAM REVENUE STREAM ANALYSIS, BENCHMARKING AND RATE DEVELOPMENT 5-Year Forecasted Cost of Service Analysis 6 1 8 20 Review Revenue Generation from Existing Customer Classes and 4 8 12 Review Billing Methods Financial Benchmarking 6 2 4 20 Fee Structure Methodology and Rate Development 8 10 16 Phase 3:Report Preparation and Presentation TASK 3A: DRAFT REPORT 6 2 8 20 TASK 3B: FINAL REPORT 4 4 8 TASK 3C: POWER POINT AND PRESENTATION 10 1 4 8 Total 68 8 68 182 l BURNS ,M�DONNELL. 6. Work Plan and Project Schedule I i i PROJECT SCHEDULE We have developed the following schedule based on assuming that we will receive a Notice Proceed no later than March 1, 2019. We understand that decisions on the rates that will be adopted need to occur no later than May 20,2019,as the City will update the City's rate schedules in June/July 2019. We will specifically collaborate with the City to provide final recommendations for the rates not later than May 20,2019;and will provide the draft report in later in May or early June. The final report and PowerPoint presentation will be developed within three weeks of receiving comments to the draft report. March April May June . Initial Data Request Submitted to the City Initial Conference Call . Establish Project Task Force Kick-off Meeting Current Cost of Service Analysis Develop 5 Year Forecast and Fleet Replacement Schedule Review Revenue Generation from Existing Customer Classes and Review Current Billing Systems Financial Benchmarking Fee Structure Methodology and Rate Development Recommended rates to be finaNled no later than May 20. Draft Report Final report to be delivered 3 weeks .Deliver Final Report after receiving City';comments. March April May June O Meetin s Worksho S Phase 1:Project Initiation Phase 2:Cost of Service and Phase 3:Report Preparation g � p -and Management Rate Design -and Presentation R N. BURNS`M�DONNELL_ 6. Work Plan and Project Schedule • i i 7. CITY-FURNISHED DOCUMENTATION Section 5 of our submittal provides a draft scope of work for the City's consideration.Within the proposed scope of work,we have described the expected input and support from the City's resources. Successful completion of a solid waste rate and fee study will require key input and support from the City. Based on the scope of work,we have summarized this information for each of the three phases in the scope of work. Phase 1 Project Initiation & Management ► Task IA:Initial Data Request&Review:Provision of key data needed for the project. ► Task 113:Establish A Project Task Force:Key City staff to participate in key meetings and review of analysis,as described in the scope of work. P. Task 1C:Kick-Off Meeting&Project Management:Members of the Project Task Force(PTF)to participate in the meeting. Phase 1: Cost of Service & Rate Study ► Task 2A:Current Cost of Service Analysis:Meetings with PTF members to define cost centers,make adjustments to the revenue requirement,and allocate costs,personnel and equipment to cost centers. We will also ask City staff to review the analysis via Excel worksheets and to have a conference call to discuss any potential updates to the analysis. P. Task 211:Forecasted Cost of Service Analysis,Program Revenue Stream Analysis,Benchmarking,and Rate Development:Similar to efforts described in Task 2A,we will continue to collaborate with the PTF to seek input to inform the five-year forecast. For the benchmarking,we will ask the City to confirm(with our perspectives)the cities to be included. In developing the proposed rates,we will discuss ideas for the rate alternatives and request feedback options to be developed. This will involve multiple discussions with the PTF. Phase 3: Report Preparation and Presentation ► Task 3A:Draft Report:We will request that the PTF review the draft report and provide one set of written comments. We would also request that City staff participate in a conference call to discuss the draft report. !' P. Task 311:Final Report:We will request that the PTF review the final report to confirm that changes from the draft h report have been addressed. P. Task 3C:Develop PowerPoint and Conduct City Commission Meeting:We will request that City staff facilitate the discussion for the presentation to be presented by Burns&McDonnell. 7. City-Furnished Documentation BURNS`MSDONNELL.. I ' BURNS`MSDONNELL ATTACHMENTS eUnxs�=ooxNEu. � Am PERSONNEL RESUMES I BURNSMGDONNELL Solid Waste Cost of Service and Rate Design Study CITY OF COLLEGE STATION Home of Texas A&M University City of College Station, TX Final Report 10/12/2017 1 I ! ! _ 1 (This page intentionally left blank) ! I ! l ! l ! SETH CUNNINGHAM, PE, LEED° AP (continued) waste transfer and waste incineration.Based on the initial study,Seth conducted a more detailed analysis of the feasibility and financial impact of transferring ownership and operations of two landfills to a regional authority.He then assisted with the implementation of the regional authority and developed the solid waste management plan for the authority.Seth currently provides ongoing financial planning support for the Authority. Commercial and Residential Collection Solid Waste and Recycling Cost of Service Study I City of Lufkin,Texas Project manager who completed a Solid Waste Cost of Service and Rate Design Study for the city's comprehensive solid waste and recycling operation.Services included residential refuse collection,residential recycling collection,commercial refuse collection,commercial recycling collection,roll-off collection,brush/bulk collection,event collection and recycling. Solid Waste and Recycling Cost of Service Study and Operational Review I City of Amarillo, Texas Project manager who conducted a Solid Waste Cost of Service Study and operational Review for the City's solid waste and recycling operation.Services include residential refuse collection,residential recycling collection,commercial refuse collection,commercial recycling collection,roll-off collection,brush/bulk collection,landfill and transfer station. Commercial and Residential Collection Solid Waste Cost of Service and Rate Design Study I City of Denton, Texas Project manager who completed a Solid Waste Cost of Service and Rate Design Study to determine the true cost to the City for providing solid waste services to residents and businesses in the City of Denton.Services included residential refuse and recycling,brush and bulky,commercial refuse and recycling,commercial roll-off,C&D recycling,landfill and household hazardous waste. Commercial and Residential Collection Solid Waste Cost of Service/Collection Routing Study I City of Big Spring, Texas Financial analyst who participated on the project team who focused on the funding of a significant capital improvement plan while the City was in the midst of transitioning from the general fund to an enterprise fund.Seth assisted the City with determining the appropriate balance of rate increases and debt.He also provided general QA/QC to other aspects of the financial model. Commercial and Residential Collection Solid Waste Cost of Service and Rate Design Study I City of Tempe,Arizona Financial analyst who completed a cost of service analysis to develop recommended rates for the City of Tempe.The City had been relying on a historically fund balance and needed to manage rate increases to avoid depletion of the fund balance while also staying competitive on the open market for commercial collection. Mixed Waste Processing Economic and Policy Study I American Forest &Paper Association Financial analyst who interviewed a number of key stakeholders,including:mixed waste processing facility operations, paper mills,and other buyers of recovered fiber to understand the impacts and limitations of recovering fiber from mixed waste processing facilities as compared to single-stream material recovery facilities.The project team then developed a comprehensive economic model that considered processing costs,collection costs,recovery rates and markets for recovered I material.Seth and the team also evaluated funding mechanisms that could impact the financial feasibility of mixed waste I processing facilities. OTHER FINANCIAL STUDIES ► Solid Waste and Water Cost of Service Study I North Slope Borough,Alaska-Financial Analyst ► Analysis of Appliance Recycling I Association of Home Appliance Manufacturers—Financial Analyst ► Landfill Financial Study I City of Garland,Texas—Project Manager BURNS`M-D®NN� I= AA � .. I I I SETH CUNNINGHAM, PE, LEED° AP (continued) ► Joint MRF Annual Audit I Waukesha County and City of Minneapolis,Wl—Project Manager ► Solid Waste Business Road Map I Matanuska-Susitna Borough,Alaska—Financial Analyst ► Collection Cost of Service and Collection Feasibility Analysis I City of Bartlesville,Oklahoma-Project Manager ► Solid Waste Cost of Service and Rate Design Study I Pima County DEQ-Project Manager ► Municipal Landfill Valuation I Confidential Client-Financial Analyst SOLID WASTE OPERATION REVIEWS Seth has conducted a range of collection and solid waste facility operational reviews that were focused on streamlining existing operations,introducing new cost-effective programs and increasing revenue opportunities.Operations addressed include commercial and residential refuse,recycling and bulk collection,as well as facilities such as transfer stations,MRFs and landfills.Representative projects include: ► Solid Waste Collection and Fleet Evaluation City of Dallas,Texas—Project Manager ► Material Recovery Facility Quarterly Audits City of San Antonio,Texas—Project Manager ► Solid Waste Business Plan I North Texas Municipal Water District-Project Manager ► Transfer Station Evaluation I City of Dallas,Texas-Project Manager ► Brush and Bulky Collection Operations Review I City of Dallas,Texas-Project Manager _ ► Solid Waste Operations Review City of Garland,Texas-Project Manager N ► Solid Waste Operations Review City of Denton,Texas-Project Manager N ► Solid Waste Operational and Financial Review I City of Little Rock,Arkansas-Project Manager ► Operational Analysis of the 27th Avenue Transfer Station I City of Phoenix,Arizona-Project Manager ► Residential Solid Waste Collection Study I City of Tulsa,Oklahoma-Financial Analyst ► Review of Brush and Bulky Collection and Residential Collection I City of Victoria,Texas-Project Manager ► Transfer Station Best Management Practices)Houston-Galveston Area Council of Governments-Project Manager ► Solid Waste Collection Operations Review I City of Shreveport,Louisiana-Analyst ► Solid Waste Collection Operations Review I City and County of Honolulu,Hawaii-Analyst ► Solid Waste Disposal Options and MRF Operations Review I City of Lufkin,Texas-Project Manager CONTRACT PROCUREMENT SERVICES Seth has guided a number of municipal clients through the procurement process for the selection of collection,landfill, compost and recycling services. Representative projects include: ► Transfer Station Procurement I City of Olathe,Kansas-Assistant Project Manager ► Single-Stream Material Recovery Facility Procurement I City of Dallas,Texas-Assistant Project Manager ► Landfill Operations Procurement I City of Little Rock,Arkansas-Project Manager ► Solid Waste Collection Procurement City of Bastrop,Texas-Project Manager ► Solid Waste Collection Procurement City of Coppell,Texas-Financial Analyst ► Landfill Procurement Assistance I City of Victoria,Texas-Project Manager ► Landfill Gas to Energy Procurement I City of Victoria,Texas-Project Manager ► Composting Procurement I City of Victoria,Texas-Project Manager ► Development of Solicitation for Bid for Managed Competition Process I City of Edmond,Oklahoma-Project Manager BURNS`MSD®NNELL. 4�4 MATTHEW J. EVANS, PE Senior Technical Advisor Mr.Evans is a civil engineer providing engineering services and solutions in solid waste management.He EDUATION is an experienced solid waste planner and engineer, BS, C Engineering providing consulting services to clients including the REGISTRATIONS preparation of solid waste master plans,facility reviews,and financial analysis.Mr.Evans has also been the project manager and lead engineer for the Solid Waste Association of North development,permitting,design,and construction of America (SWANA) MN Land of a variety of solid waste facilities including landfill Lakes Chapter, Board cells,landfill gas collection and processing systems, to scale house facilities,leachate management systems,yard waste drop-sites, SPECIALTIES compost pads and organics management transfer stations. Project Management k Landfill Mr.Evans focuses on his clients'understanding the project issues and Construction management executing solutions that best meet their operational,financial,and scheduling - • . nner Remediation needs.He has demonstrated hands-on involvement and has served as an _ Feasibility advocate for clients before regulatory agencies. SOLID WASTE PLANNING Solid Waste Management Plan* I City of Billings 21 YEARS OF Billings, Montana Senior Planner prepared a Solid Waste Management Plan for the City of Billings.The scope of the project included an ` evaluation of the existing solid waste facilities and recommendations for improving their overall solid waste and recycling system. Key parts of the City's system that were reviewed included:yard waste management,waste disposal alternative analysis,leachate management practices,future landfill cell orientation,existing facility layout,and final cover contours. The project also included an evaluation of the feasibility for a future landfill expansion onto adjacent City property. Integrated Solid Waste Management Plan* I County of Kaua'i Kaua'i, Hawaii Project Engineer completed a yard waste and organics processing facility feasibility review that included evaluation of applicable processing options,conceptual layout designs,and cost estimate preparation. Also as part of this project,Mr. Evans completed a landfill capacity assessment and operational review of the Kekehaha Landfill.Work included an onsite landfill facility assessment,interviews with County staff,and volume and capacity calculation projections.Cost estimates and associated impacts to County tipping fees were also completed. Integrated Solid Waste Management Plan I City of Cheyenne _ Cheyenne, Wyoming Project Manager developing a solid waste plan focused on full cost accounting of existing operations at the City's transfer ncy and cost of the City's residential and station,landfill,and compost facility. The plan also reviews operational efficie commercial waste and recycling collection programs. The plan is scheduled to be completed by the end of 2019,with continued support and reporting related to the plan for a period of two years. BURNS`M� DK�lil�lELL- 1 MATTHEW J. EVANS, PE (continued) SOLID WASTE PROGRAM AND FINANCIAL EVALUATION Lost-of-Service Study I City of Big Spring Big Spring,Texas Analyst completed a Cost-of-Service study to allocate costs to the appropriate cost centers and determine associated costs relative to residential and commercial solid waste collection rates. Cost-of-Service Study I Fremont County Solid Waste Disposal District Lander, Wyoming ice study to allocate costs to the appropriate cost centers and determine associated costs Analyst completed aCost-of-Sery dro relative to tipping fees.The District includes the County landfills, residential with a twenty-year review of revenues and expenses. sites. He es. 1 also developed a rate fee model to provide Solid Waste Cost of Service I City of Williston landfill Williston, North Dakota aluating the City's solid waste collection and landfill costs which had changed considerably Project Manager led a team in ev early 2010's. Study included rate adjustment recommendations. in the wake of the oil boom in the I Landfill Tipping Fee Consulting` I City of Sioux Falls Sioux Falls, South Dakota updated a tipping fee model to provide the City with review of revenues and expenses Analyst developed and regularly .Mr.Evans also completed aCost-of-Service study to allocate costs to encumbered to date along with year-end projections the appropriate cost centers and determine associated costs relative to tipping fees. COLLECTIONS ASSESSMENT Operational Assessment' I City of Sheridan Sheridan, Wyoming sting solid waste management operations and recycling program and prepared a report with Project Manager reviewed the exi financial rate forecast and recommendations of alternative methods for solid waste disposal and recycling programs.The fproject team presented various recycling and curbside options to the City.The types of recyclables that could be collected I were analyzed and a recommended approach to develop marketing materials for presentation to citizens was developed.Part of this evaluation also included summarizing the costs and determining a schedule for implementing such a program. Solid Waste Collections Operations Assessment I City of Amarillo Amarillo,Texas Senior Planter evaluated route efficiency,staffing and equipment levels. Recommended addition of two new routes based 1 on City growth projections and time and motion data collected in the field as part of an on-site audit of the City's collection operations. Solid Waste Collections Operations Assessment I City of Big Spring Big Spring,Texas Senior Planner performed collection route observations,providing recommendations for greater collection efficiency. Worked with City GIS staff to develop new route maps for the City's residential and commercial solid waste collection. BURNS QMGDONNELL AA - BURNS`MSDON NELL, TE STUDY . Bm EXAMPLE RA i - I d 6 SCOTT PASTERNAK Project Manager Scott Pasternak serves as a leader in Burns& „• McDonnell's Solid Waste Practice,which focuses on SPECIALTIES advancing the solid waste and recycling programs for Financial Feasibility and Cost of governmental entities.Since the 1990's he has worked - Studies with local,regional and government agencies to solve W Strategic. challenging technical and financial solid waste Planning WasteSolid Operations _ • management and recycling issues.Over this time period, Performance Optimization E he has completed hundreds of projects for clients across the United States. Recycling. - • Geographically,he has worked for governmental clients in 19 states.Prior Conversion Technologies to joining Burns&McDonnell,he was a national leader within SAIC's • 'Negotiations ment and • ntract (formerly R.W.Beck)Solid Waste Practice from 2000 to 2013.From 1995 to 2000,he was a solid waste planner for the Texas Commission on EDUCATION Environmental Quality(TCEQ). BA. Government with Honors Regionalms. Community and FINANCIAL AND COST SERVICES • " nning Scott has completed more than 75 economic,financial feasibility and cost of service studies for solid waste clients.He has developed a broad variety of rate models that allow solid waste clients to determine cost-of-service 24YEARS OF EXPERIENCE and evaluate competitiveness versus the private sector. Solid Waste Cost of Service and Feasibility Study I City of Bozeman, Montana Project Manager who conducted a comprehensive solid waste cost of service study for residential and commercial services. In addition to the cost of service analysis for its current solid waste operation,he identified the potential for significant cost savings through a variety of potential operational changes.Following completion of the cost of service study,Scott evaluated the financial feasibility of a transfer station and recycling services. Solid Waste Cost of Service Study and Operational Review I City of Cheyenne, Wyoming Senior financial analyst who contributed to an operational review of the City's residential and commercial collection operations. Presently serving as a technical adviser for a comprehensive solid waste cost of service study. Residential Solid Waste Service Options and Financial Evaluations I City of Denver, Colorado Technical advisor to the City of Denver,who evaluated options to implement a solid waste fee that would include a variable rate structure.Scott advised client on developing a cost of service model,developing a billing system,business strategy and implementation steps. Multiple Solid Waste and Recycling Planning Projects I Johnson County, Kansas Project manager of multiple solid waste financial and planning projects for Johnson County,including a solid waste rate study,Johnson County MSW Landfill Capacity Analysis,and potential solid waste and recycling technology analysis. IPresently managing the County's Solid Waste Management Plan. I Multiple Solid Waste and Recycling Financial and Planning Projects I City of Olathe, Kansas Project manager who developed solid waste rate study for residential and commercial sectors.Scott evaluated options and BURNS &MGDONNELL.. SCOTT PASTERNAK (continued) assisted City with implementing single-stream recycling.He conducted a transfer station operation,hauling and disposal procurement for the City of Olathe.In addition to developing the procurement documents,Scott also developed the strategy that allowed the City to achieve a substantial cost decrease relative to the City's prior contract. Solid Waste Financial and Operational Analysis/Business Plan I City of Salina, Kansas Lead financial analyst who identified operational requirements and developed financial model for the transition to a fizlly- automated refuse and single-stream recycling collection system.Scott developed revenue requirements and 10-year pro formas that detail the cash flows. Sanitation Cost of Service and Rate Design Study I City of Dallas,Texas Technical adviser who developed a comprehensive cost of service and rate design study that evaluated costs and provided recommendations on designing rates that will balance efforts to increase recycling with rate stability. Key efforts addressed accounting for key financial metrics associated with the City's transition to an enterprise fund. Solid Waste Rate Design Study, Fleet Maintenance Study and Operational Review I City of Weatherford, Texas Project manager who conducted multiple projects to help improve the financial and operational performance for the City's solid waste and recycling operations.Scott led a citywide fleet study focused on evaluating fleet maintenance options. Solid Waste Cost of Service and Rate Design Study I City of Denton,Texas Senior technical advisor who conducted a Solid Waste Cost of Service and Rate Design Study to determine the true cost to the City of providing solid waste services to residents and businesses in the City of Denton.Services included residential refuse and recycling,brush and bulky,commercial refuse and recycling,commercial roll-off,C&D recycling,landfill and household hazardous waste. OTHER FINANCIAL STUDIES ► Matanuska-Susitna Borough,Alaska ► City of Owasso,Oklahoma ► North Slope Borough,Alaska ► City of Bozeman,Montana ► City of Fayetteville,Arkansas ► City of Amarillo,Texas ► City of Little Rock,Arkansas ► City of Austin,Texas ► City of Casa Grande,Arizona ► City of Big Spring,Texas ► City of Coolidge,Arizona ► City of College Station,Texas y ► City of Goodyear,Arizona ► City of Corpus Christi,Texas ► City of Glendale,Arizona ► City of El Paso,Texas ► City of Phoenix,Arizona ► City of Grand Prairie,Texas ► City of Tempe,Arizona ► City of Huntsville,Texas ► City of Tucson,Arizona ► City of Irving,Texas ► Town of Queen Creek,Arizona ► City of Killeen,Texas ► Collier County,Florida ► City of McKinney,Texas _ ► Dalton/Whitfield,Georgia ► City of Midland,Texas ► City and County of Honolulu,Hawaii ► City of San Antonio,Texas ► Winchester Municipal Utility,Kentucky ► City of Lynchburg,Virginia ► City of Oklahoma City,Oklahoma ► Region 2000 Services Authority,.,Virginia 1 BURNS`MSDONNELL.. i SCOTT PASTERNAK (continued) SOLID WASTE OPERATION REVIEWS processing and Scott has assisted many communities in evaluating their existing solid waste and recyclingcollection,p g disposal systems;identifying opportunities to improve operations in effective and efficient manners.These projects have included studies that develop and/or improve the efficiency of residential and commercial collection systems.His recommendations have allowed clients to save millions of dollars.Representative projects include: ► Residential Solid Waste Collection Study I City of Tulsa,Oklahoma ► Residential and Commercial Operations Review I City of Amarillo,Texas ► Comprehensive Operations and Financial Review City of Big Spring,Texas ► Comprehensive Operations and Financial Review City of El Paso,Texas ► Comprehensive Operations and Financial Review City of Midland,Texas ► Comprehensive Operations and Financial Review City of Corpus Christi,Texas ► Flow Control Feasibility Study I City of Corpus Christi,Texas ► Strategic Solid Waste Redistricting Plan I City of Phoenix,Arizona ► Comprehensive Operations and Financial Review I City of Coolidge,Arizona ► Residential Refuse Operations and Routing Review i City of Shreveport,Louisiana ► Comprehensive Operations and Financial Review I City of Glendale,Arizona ► Brush/Bulky and Transfer Station Operations and Financial Review I City of Dallas,Texas ► Comprehensive Operations Review I City of Denton,Texas ► Solid Waste and Recycling Collection Operational Review City of Irving,Texas ► Comprehensive Operations Review City of Killeen,Texas ► Comprehensive Operations Review City of Austin,Texas ► Brush/Bulky and Commercial Collection Operations Review and Financial Analysis I City of Tempe,Arizona ► Single Stream MRF Operations Review I City of Lufkin,Texas ► Municipalization Study I City of Del Rio,Texas ► Solid Waste Audit of Private Hauler I City McKinney,Texas P. Residential Operations Review JCity of Temple,Texas RECYCLING, WASTE MINIMIZATION AND CONVERSION TECHNOLOGIES Scott has guided multiple clients in evaluating and implementing programs to increase recycling.His areas of focus include single-stream,mixed waste processing,commercial recycling,and composting conversion technologies.Representative projects include: ► Single Stream Recycling Public-Private Partnership Analysis I City of Olathe,Kansas ► Recycling Feasibility Study City of Salina,Kansas ► Recycling Feasibility Study City of Owasso,Oklahoma ► Comprehensive Recycling and Emerging Technology Study I City of Fayetteville,Arkansas ► Conversion Technology Feasibility Study I City of San Antonio,Texas ► The Economic Impacts of Recycling I Texas Commission on Environmental Quality ► Conversion Technology Workshop I Houston-Galveston Area Council(H-GAC) ► Resource Recovery Feasibility Study and Implementation I City of Dallas,Texas ► Regional Recycling Rate Study I North Central Texas Council of Governments(NCTCOG) ► Recycling Ordinance and Design Guidelines I NCTCOG ' ► Recycling Workshops Development I Houston-Galveston Area Council(H-GAC) BURNS`MSDONNELL.. II SCOTT PASTERNAK (continued) ► Organics Waste Management Best Management Practices H-GAC ► Organics(Food and Yard Trimmings)Collection Program Implementation I City of San Antonio,Texas ► Food Waste Pilot Program and Compost Facility Design I City of Denton,Texas ► Multi-family Recycling Study I City of Fort Worth,Texas ► C&D Material Recovery Siting and Feasibility Study I North Texas Municipal Water District ► Material Recovery Facility Public I Private Partnership Analysis I City of Austin,Texas ► Material Recovery Facility Feasibility Study I City of San Antonio,Texas ► Regional Recycling Transfer Station Feasibility Study I City of Huntsville,Texas ► Study to Increase Waste Minimization Efforts—Capital Area Planning Council of Governments(CAPCOG),Texas SOLID WASTE STRATEGIC,MASTER AND BUSINESS PLANNING rI With a master's degree in community and regional planning,Scott started his career as a solid waste planner for the TCEQ, where he developed the statewide solid waste strategic plan and annual report for the State of Texas.Since becoming a consultant in 2000,he has advised many local and regional governments on solid waste planning issues.He is past Director tative for the Planning and Management Technical Division for the Solid Waste Association of North America. Represen projects include: ► Solid Waste Management Plan I Johnson County,Kanas ► Colorado Integrated Solid Waste and Materials Management Plan I Colorado Department of Public Health and Environment ► s Assessment�Pulaski County Solid Waste Management District,Arkansas Regional Solid Waste Plan and Need ► Resource Recovery Planning and Implementation Study I City of Dallas,Texas ► Solid Waste Management Plan I City of San Antonio,Texas► Strategic Solid Waste and Recycling Management Plan I City of Denton,Texas ► Solid Waste Master and Business Plan I City of El Paso,Texas ► Strategic Plan to Achieve 40%Recycling Rate I City of Phoenix,Arizona ► Solid Waste Authority Feasibility and Implementation I Region 2000 Services Authority,Virginia M PROCUREMENT AND CONTRACT NEGOTIATIONS ,Scott has authored a best management practice Nationally regarded for his procurement expertise was originally d vel ped for the North guidebook al Texas Council of articles on procurement.The best management guidebook Governments,and the content was updated in 2015 as part of a workshop for the Houston-Galveston Area Council. Scott has managed more than 30 solid waste and recycling procurements representing local governments for collection,recycling fprocessing and disposal operations.Representative projects include: ► City of Olathe,Kansas I Recycling processing services,transfer station operations and disposal services ► City of Missouri City,Texas I Residential and commercial refuse,recycling and bulk collection services ► liection services City of CoppelBastrop,Texas1,Tex Residential and commercial refuse,recycling and bulk co City of Bastrop, Residential and commercial refuse,recycling and bulk collection services ► � ► City of Lewisville,Texas I Recycling processing services ► City of San Antonio,Texas I Recycling processing and privatization evaluation of recycling processing services ► Cities of Mesa and Tempe and Town of Gilbert,Arizona I Regional recycling processing,disposal and vegetative waste services ► ial and commercial refuse,recycling and bulk collection services City of Georgetown,Texas I Resident I , AA BURNS WSDONNELL- SCOTT PASTERNAK (continued) ► City of Fort Worth,Texas I Evaluation of multiple solid waste contracts and recycling processing procurement ► The Woodlands,Texas I Residential and commercial refuse,recycling and bulk collection services ► City of Cedar Park,Texas I Residential and commercial refuse,recycling and bulk collection services ► City of Waco,Texas I Alternative disposal technologies ► Town of Queen Creek,Arizona I Residential refuse,recycling and bulk collection services ► City of Victoria,Texas I Privatization of city-owned landfill ► City of Tulsa,Oklahoma I Residential refuse and recycling collection,recycling processing and energy recovery/disposal services ► City of Tucson,Arizona I Recycling processing services ► City of Austin,Texas Privatization evaluation of recycling processing services f I I I ( l I L BURNS IM�DOM N ELL.. SETH CUNNINGHAM, PE, LEED° AP Lead Financial consultant Seth Cunningham is an experienced Project Manager SPEICIALTIES for financial and operational consulting engagements, r, serving clients across the United States. Seth has •st of Set vice amD earned both business and engineering degrees and StudiProject s -formance therefore is able to provide clients creative,yet fiscally '+ Strategic Planning responsible,solutions to technical problems.His Financial Planning unique background and diverse skill set enables him to Asset Program Valuation bridge the information gap that often exists between OtDerations & Pet the business and technical sides of operation. OlDtimization • Seth applies his financial and engineering experience to projects in a Procurement Analyses range of industries,including municipal solid waste(MSW),water and Recycling Program Design the upstream oil&gas industries. Specific to the MSW industry,SethSt-IstainabilitYPlanning has gained a thorough understanding of waste and recycling issues from managing projects that addressed a range of solid waste management ' ' practices,including landfills,transfer stations,composting,material recovery facilities,collection(refuse,recycling,green waste, brush bulky)and waste to energy.The following provides representative projects Seth has completed during his career. REGISTRATION FINANCIAL AND COST STUDIES I- Professio Seth has completed more than 50 economic,financial feasibility and cost of service studies for solid waste clients.He has developed a broad 4YEARS variety of rate models that allowed his clients to make key financial I 20YEARS OF EXPERIENCE decisions. Solid Waste Cost of Service and Feasibility Study I City of Bozeman, Montana Lead financial analyst who contributed to a comprehensive solid waste cost of service study for residential and commercial services.In addition to the cost of service analysis for its current solid waste operation,he evaluated the potential for significant cost savings through a variety of potential operational changes. Solid Waste Cost of Service and Feasibility Study I City of Sheridan, Wyoming Lead financial analyst who contributed to a comprehensive solid waste cost of service study for landfill operations and residential and commercial services.Seth also communicated the findings to the City Council. Solid Waste Cost of Service and Feasibility Study I City of Cheyenne, Wyoming Senior financial analyst who is contributing to a comprehensive solid waste cost of service study for residential and commercial services,as well as transfer station and landfill operations. Colorado Integrated Solid Waste and Materials Management Plan I Colorado Department of Public Health and Environment Financial analyst and planner who developed a comprehensive evaluation of the current state of Colorado's waste disposal 1 and materials management practices.He evaluated the transfer station and landfill infrastructure across the state,with an emphasis on evaluating costs. l BURNS �MSDONNELL. SETH CUNNINGHAM, PE, LEEDO AP (continued) Residential Solid Waste Service Options and Financial Evaluations I City of Denver,Colorado Lead financial ana to implement a solid waste fee that would include a variable rate structure for lyst who evaluated options City of Denver.Seth led the development of a cost of service model that provided the financial evaluation of various solid waste,recycling and composting collection service options. Solid Waste Financial and Operational Analysis/Business Plan I City of Salina, Kansas Lead financial analyst who identified operational requirements and developed a financial model for the transition to a fully- automa ted refuse and single-stream recycling collection system.He developed revenue requirements and a 10-year pro forma as that detail the cash flows. Commercial and Residential Collection Cost of Service and Rate Design Study I City of College Station, Texas Project manager who conducted a solid waste cost of service and rate design study for the City of College Station's commercial collection operation.The City was concerned with whether it was fully recovering its cost of providing services and the potential impact on its operating reserves. The study included front-load collection, cart collection and roll-off collection.After completion of the commercial collection rate study, Seth completed a residential cost of service analysis so that the City could evaluate rates and working capital balances across the City's two operations. Multiple Solid Waste and Recycling Financial and Planning Projects I City of Olathe, Kansas ` Lead financial analyst and planner who conducted transfer station operations,hauling and disposal procurement for the City of Olathe.In addition to developing the procurement documents,he developed the strategy that allowed the City to achieve a substantial cost decrease relative to the City's prior contract.Seth also previously assisted with evaluating recycling options and a cost of service study. Multiple Solid Waste and Recycling Financial and Planning Projects I Johnson County, Kansas E Financial analyst and planner who contributed to multiple solid waste financial and planning projects for Johnson County, including a solid waste rate study,solid waste management plan,the Johnson County MSW Landfill Capacity Analysis and potential solid waste and recycling technology financial analysis. Txas Sanitation Cost of Service and Rate Design Stud cost City service and of Dal Tate design study to evaluate current costs and provide Project manager who developed a comprehensive recommendations on designing rates that would balance efforts to increase recycling with rate stability. I Solid Waste Cost of Service and Operational Review I City of Little Rock,Arkansas Project manager who conducted a cost of service analysis and operational review of the City's solid waste operation.He helped the City determine its options for improving the efficiency of its operations or potential options for privatization.The financial review included a cost of service analysis for the City's solid waste system. I Recycling Financial and Operational Review I City of Fayetteville,Arkansas Analyst that conducted a financial and operational review of the City's curbsort recycling collection program and baling facility to evaluate opportunities to reduce costs or increase revenues.Seth also evaluated the feasibility of a processing line to sort mixed construction and demolition materials into individual commodities. Regional Solid Waste Planning and Financial Analysis I Region 2000 Virginia Regional Commission Project manager who conducted a financial analysis of several waste disposal alternatives including regional cooperation, IBURNS *MC®ONNELL. AA Solid Waste Cost of Service and Rate Design Study Table of Contents TABLE OF CONTENTS Page No. EXECUTIVE SUMMARY 1.0 INTRODUCTION 1.1 Project Approach ................................................................................................. 1-1 1.1.1 Data Requests........................................................................................ 1-1 1.1.2 Project Kick-Off Meeting..................................................................... 1-1 1.1.3 Ongoing Staff Communications ........................................................... 1-2 1.2 Report Organization............................................................................................. 1-2 1.3 Current Services and Rates......................................................... ......................... 1-3 1.3.1 Commercial Dumpster Service.............................................................1-3 1.3.2 Commercial Cart Service...................................................................... 1-3 1.3.3 Commercial Roll-Off Service............................................................... 1-4 1.3.4 Residential Collection Service...................................................... 2.0 COST OF SERVICE..........................................................................................2-1 2.1 Methodology Overview............. ...........................................................2-1 2.2 Development of the Test Year Revenue Requirement........................................2-2 2.2.1 Selection of the Test Year................ . ..................................................2-2 2.2.2 Relationship between the Budget and the Revenue Requirement........2-2 2.3 Development of the Revenue Requirement Forecast.............................. 2-4 2-3 2.4 Allocation of Costs to Cost Centers........................................................ 2.5 Allocation to Customer Classes...........................................................................2-5 2.5.1 Commercial Customer Classes.............................................................2-5 2.5.2 Residential Customer Classes...............................................................2-6 2.6 Determination of Billing Units ............................................................................2-6 2.6.1 Dumpster Customers....................................................... 2.6.2 Commercial Cart Customers.................................................................2-7 2.6.3 Roll-Off Customers...............................................................................2-7 l2.6.4 Residential Customers ..........................................................................2-8 2.7 Calculation of the Cost of Service.......................................... 2.7.1 Commercial Dumpster Refuse............................................................. 2-8 l2.7.2 Commercial Cart Refuse.....................................................................2-10 2.7.3 Commercial Roll-Off Refuse..............................................................2-11 2.7.4 Residential Collection.........................................................................2-11 .................................................... - 3.0 RATE DESIGN........................................ ......3-1........3-1 l 3.1 Net Revenue from Current Rates...............................................................••. ......3-2 ` 3.2 Working Capital...................................................................................................3-3 3.3 Recommended Rates............................................................................................3-4 3.3.1 Scenario 1...................................................................................... 3.3.2 Scenario 2..............................................................................................3-4 I City of College Station,TX TOC-1 Burns&McDonnell Table of Contents Solid Waste Cost of Service and Rate Design Study 3.3.3 Scenario 3....................................................... .......................3-5 3.3.4 Summary of Select Rates.............................................­......................3-6 e and Working Capital with Recommended Rates...........................3-6 3.4 Net Revenu. .........................3-6 3.4.1 Scenario I.................................................... .......................3-7 3.4.2 Scenario 2................................................... ..3-8 3.4.3 Scenario 3................................................ 3-8 3.4.4 Comparison of Working Capital Balances ...........................................3-9 3.5 Key Findings and Recommendations ................................................................ 4-1 4.0 BENCHMARK ANALYSIS..................................................... ..... ...4-1 4.1 Methodology............................................................................. 4-1 4.2 Commercial Services Benchmarking................................................................... .....4-2 4.2.2 Commercial Dumpster Service.............................................................4-3 4.2.3 Commercial Cart Service................................................................. ...4-4 4.2.4 Commercial Roll-off Service............................................................. .....4-5 4.3 Residential Services Berichmarking .......................................................... .... ....4-6 4.3.1 Benchmark Analysis Key Findings .......................................................4-6 4.3.2 Residential Rates and Services Comparison.........................................4-7 4.3.3 Residential Refuse Collection Service.............................................. 4.3.4 Residential Curbside Recycling Collection Service.............................4-8 4.3.5 Residential Yard Waste Collection Service..........................................4-9 4.3.6 Residential Bulky Waste Collection Service......................................4-11 4.3.7 Residential Brush Collection Service.................................................4-12 4.4 Street Sweeping ........................................................................................****.....4-13 TOC-2 Burns&McDonnell City of College Station,TX Solid Waste Cost of Service and Rate Design Study Table of Contents LIST OF TABLES AND FIGURES Page No. Table 1-1: Current Commercial Dumpster Monthly Rates.......................................................................1-3 Table 1-2: Current Commercial Cart Monthly Rates................................................................................1-4 Table 1-3: Current Residential Rates........................................................................................................1-4 Table 2-1: Projected Revenue Requirement.............................................................................................2-4 Table 2-2: Revenue Requirement by Cost Center.....................................................................................2-5 Table 2-3: Recovery Basis for Commercial Cost Centers by Customer Class.........................................2-6 Table 2-4: Commercial Dumpster Collection Billing Unit Forecast........................................................2-7 Table 2-5: Commercial Cart Collection Billing Unit Forecast.................................................................2-7 Table 2-6: Commercial Roll-Off Collection Billing Unit Forecast..........................................................2-8 Table 2-7: Residential Collection Billing Unit Forecast...........................................................................2-8 Table 2-8: Commercial Dumpster Refuse Cost of Service.......................................................................2-9 Table 2-9: Commercial Dumpster Refuse Cost of Service Matrix(FY 2018).......................................2-10 Table 2-10: Commercial Cart Refuse and Recycling Cost of Service....................................................2-10 Table 2-11: Commercial Front-Load Refuse Cost of Service Matrix.....................................................2-11 Table 2-12: Commercial Roll-Off Refuse Cost of Service.....................................................................2-11 Table 2-13: Single-Family Residential Cost of Service..........................................................................2-12 Table 2-14: Monthly Single-Family Residential Cost of Service—FY 2018.........................................2-12 Table 3-1: Over(Under)Recovery by Customer Class—Current Rates..................................................3-1 Table 3-2: Multi-family Revenues Retained by Residential Collection Program—Current....................3-2 Table 3-3: Allocation of Working Capital Balance..................................................................................3-2 Table 3-4: Working Capital Reserve Balance—Current Rates.................................................................3-3 Table 3-5: Recommended Rate Adjustments and Multi-Family Revenue Share—Scenario 1 ................3-4 Table 3-6: Recommended Rate Adjustments and Multi-Family Revenue Share—Scenario 2................3-5 Table 3-7: Recommended Rate Adjustments and Multi-Family Revenue Share—Scenario 3 ................3-5 Table3-8: Summary of Select Rates.........................................................................................................3-6 Table 3-9: Annual Net Revenue and Working Capital Balance—Scenario 1 ..........................................3-7 Table 3-10: Annual Net Revenue and Working Capital Balance—Scenario 2........................................3-7 Table 3-11: Annual Net Revenue and Working Capital Balance—Scenario 3 ........................................3-8 Figure 3-1: Comparison of Working Capital Balances.............................................................................3-9 Table 4-1: Summary of Benchmark Cities...............................................................................................4-2 Table 4-2: Commercial Dumpster Benchmark Analysis Summary..........................................................4-3 i Table 4-3: Commercial Cart Benchmark Analysis Summary...................................................................4-4 Table 4-4: Commercial Roll-off Benchmark Analysis Summary.............................................................4-5 Table 4-5: Residential Base Rates and Services.......................................................................................4-7 Table4-6: Refuse Collection....................................................................................................................4-8 Table 4-7: Curbside Recycling Collection................................................................................................4-9 I Table 4-8: Yard Waste Collection...........................................................................................................4-10 Table 4-9: Bulky Waste Collection.........................................................................................................4-11 Table 4-10: Brush Collection..................................................................................................................4-12 Table 4-11: Street Sweeping. ..4-14 I City of College Station,TX TOC-3 Burns&McDonnell Table of Contents Solid Waste Cost of Service and Rate Design Study APPENDIX I Schedule IA: Commercial Test Year Schedule 1B: Residential Test Year Schedule 2A: Commercial Five-Year Forecast Schedule 2B:Residential Five-Year Forecast Schedule 3: Commercial Dumpster Cost of Service Schedule 4: Commercial Cart Cost of Service P Schedule 5: Commercial Roll-off Cost of Service Schedule 6:Residential Cost of Service �i Schedule 7:Revenue Reconciliation with Current Rates Schedule 8:Recommended Rates Scenario 1 Schedule 9:Recommended Rates Scenario 2 d Schedule 10:Recommended Rates Scenario 3 { I I p I I ( l Burns&McDonnell City of College Station,TX TOC-4 Solid Waste Cost of Service and Rate Design Study Executive Summary EXECUTIVE SUMMARY The City of College Station,Texas(City)retained Burns &McDonnell to conduct a solid waste cost of service and rate design study(Study)for the Sanitation Division(Sanitation)of the city's Public Works Department. The Study was completed in two phases. In 2016,Burns&McDonnell completed the analysis for the commercial collection operation. In 2017,Burns&McDonnell completed the analysis for the residential collection operation and updated the analysis for the commercial collection operation. The purpose of this study was to determine the total cost of providing commercial and residential refuse and recycling services,equitably distribute the cost to customers and design rates to safeguard the financial integrity of the operation. This report provides a discussion of the methodology utilized to conduct the analysis,the cost of providing services as determined by the analysis and recommended rates. Report Organization This report is organized into four sections,plus this Executive Summary and an Appendix containing.the financial schedules. Section 1 includes an overview of the services provided and the current rates. Section 2 focuses on the cost of service analysis and includes an overview of the methodology utilized to determine the cost of service for the City's commercial and residential refuse program as well as the cost of service based rates. Section 3 provides the projected financial impact of the current rates. In addition, Section 3 presents three scenarios for recommended rates. Section 4 compares the City's commercial and residential collection programs to several benchmark cities. Commercial and Residential Services The following provides a short description of each of the primary collection services. Section 1 provides the current rates for the services. Commercial Dumpster Service r collection and disposal services for two,four and eight cubic The City provides commercial dumpste I yard(CY) containers and two,four and six CY containers with compactors.Dumpster collections may occur between one and six times per week,depending on the customer's needs. I The City charges for this service in one of two ways. Businesses and some multi-family units pay a Imonthly fee based for commercial dumpster service based on the container size and frequency of 1 collection. In addition,some multi-family complexes are charged on a per-unit basis and the City determines the number of containers and frequency of collection. Currently,the revenue generated from } City of College Station,Texas 1 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary multi-family customers is retained by the residential collection program even though the services are provided by the commercial collection operation. Commercial Cart Service The City also provides commercial cart services for refuse via 90,300 and 400 gallon carts.Like commercial dumpster service, collections may occur between one and six times per week depending on the customer's needs. For multi-family complexes with a total of four or more units,the monthly fee is billed on a per-unit basis. Commercial Roll-Off Service The City provides collection and disposal services for 20, 30 and 40 cubic yard roll-off open top and lcompactor containers. There is a fee for each pull plus a disposal charge based on the current landfill fee. I The disposal fee only increases if the landfill fee charged to the City increases. Customers are also responsible for a daily container rental charge. For Northgate Promenade customers that share the use of ltwo 40 CY roll-off compactors, customers pay for each use of the compaction with a minimum monthly fee. Residential Collection Service The residential operation provides services to single-family residences and multi-family residences with four units or less. Services include weekly collection of refuse,recycling,bulky items,and brush. Residents can request an additional cart for an additional monthly charge. As mentioned under commercial dumpster service,there is also a monthly fee per unit for some multi- family residences with greater than four units. This revenue is retained by the residential collection operation even though the services are provided with commercial collection crews. Street Sweeping City staff from the Sanitation Division provides street sweeping services in the City. The vehicles and personnel are part of the residential collection operation,but the street sweeping services are provided in areas that are considered both residential and commercial. Therefore,the cost for this service was I allocated between residential and commercial customers. In prior years,there was a transfer into the Sanitation budget to offset a portion of these costs, but this transfer was discontinued starting in FY 2018. Revenue Requirement and Adequacy of Current Rates Table ES-1 summarizes the revenue requirement for each of the cost centers identified for the study. The cost centers are organized by commercial and residential services. City of College Station,Texas 2 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary Table ES-1: Revenue Requirement by Cost Center Cost Center FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Commercial Administration $937,929 $975,452 $1,003,223 $1,032,384 $1,049,635 Dumpster Service $1,356,681 $1,566,249 $1,624,882 $1,686,237 $1,728,556 Commercial Cart Service $346,062 $409,371 $413,019 $372,426 $381,737 Roll-off Service $369,049 $404,319 $418,575 $400,130 $410,618 Disposal $691,408 $705,236 $719,340 $733,727 $748,402 Street Sweeping $114,216 $128,142 $126,153 $123,100 $129,598 Residential Administration $1,257,008 $1,304,639 $1,339,145 $1,382,810 $1,404,840 Residential Refuse $1,276,056 $1,667,162 $1,639,648 $1,597,923 $1,754,272 Residential Recycling $1,006,619 $1,028,837 $1,050,084 $1,071,772 $1,093,808 Bulky $823,283 $897,365 $895,869 $889,660 $927,450 Brush $503,056 $541,472 $543,382 $543,068 $564,149 Disposal $563,583 $574,855 $586,352 $598,079 $610,041 Street Sweeping $181,959 $204,144 $200,975 $196,111 $206,464 Total Revenue Requirement 1 $9,426,909 1 $10,407,243 $10,560,648 $10,627,427 $11,009,569 1. Excludes disposal costs for roll-off customers since the actual disposal cost is paid by the roll-off customer and does not need to be recovered in the cost per pull. All of the residential cost centers are recovered by one customer class,which consists of single-family residences and multi-family residences with four or fewer units. Table ES-2 summarizes how the cost centers were allocated to the three commercial customer classes. Table ES-2: Recovery Basis for Commercial Cost Centers by Customer Class Dumpster Cart Roll-off Administration ✓ ✓ ✓ Dumpster Service ✓ Cart Service `� Roll-off Service ✓ Disposal ✓ `/ ✓ Street Sweeping `/ '� ✓ Burns&McDonnell evaluated the net rate revenue by comparing the revenue requirement to the projected revenue using the current rate structure. Table ES-3 summarizes this evaluation for each customer class and Schedule 6 in the Appendix provides additional detail. A positive number means the City is generating sufficient rate revenue from the customer to fully cover the cost of service. A negative City of College Station,Texas 3 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary number means the City's current rates do not fully cover the cost of service. Based on the current rate structure,the City is expected to under-recover its cost of service in FY 2018 and beyond if no rate adjustments are made. Table ES-3 is based on current rates and does not account for any rate increases the City has contemplated prior to this cost of service and rate design study. Table ES-3 shows separate totals for commercial and residential and then the combined total. Figure ES-1 shows the information for each customer class in a graphical form. Table ES-3: Over(Under) Recovery by Customer Class—Current Rates Customer Class 7$39,8T05 ($165,353) 202019 FY 2020 FY 2021 FY 2022 Commercial Customers Dumpster Service ($202,210) ($265,551) ($279,764) Cart Service ($292,831) ($365,644) ($364,680) ($304,454) ($3121456) Roll-off Service ($182,233) ($217,569) ($236,782) ($213,932) ($228,462) Commercial Over(Under) Recovery ($435,260) ($748,566) ($803,671) ($783,937) ($820,682) Residential Over(Under)Recovery $154,466 ($337,124) ($256,478) ($160,465) ($319,687) Total Over(Under) Recovery 280,794 1,085,690) ($1,060,149) ($944,402) ($1,140,369) 1 ($ ) ($ 1. The projected under recovery is based on keeping current rates constant and does not account for any rate increases the City has contemplated prior to this cost of service and rate design study. Figure ES-1: Net Revenue—Current Rates ■Comm Dumpster ■Comm Cart Roll-off ■Residential $200,000 $300,000 Nl W WMI FY 2018 FY 201 FY 202 FY 2021 Y 2022 I. ($100,000) I, ($200,000) ($300,000) ($400,000) City of College Station,Texas 4 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary Currently,revenue generated from multi-family customers for services provided by the commercial collection program is retained by the residential collection program. This results in a more substantial under-recovery for the commercial collection program compared to the residential collection program. Table ES-4 shows the annual revenues for commercial collection program services retained by residential collection program. This includes both revenues billed on a per-unit basis(currently$6.75 per unit per month) and customers charged based on a specific service level(e.g.,6 cubic yards,twice per week). The rate recommendations discussed in Section 3.3 include increased sharing of this revenue from residential to commercial collection. Table ES-4: Multi-family Revenues Retained by Residential Collection Program—Current Customer Class FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Per-Unit Customers $1,199,702 $1,223,696 $1,248,170 $1,273,133 $1,298,596 Service Level Customers' $358,950 $366,129 $373,452 $380,921 $388,540 Total $1,558,652 1 $1,589,825 1 $1,621,622 $1,654,054 $1,687,135 1. Includes customers that dumpster and cart services based on a specific collection frequency for a specific container size. Recommended Rates Section 3 provides a summary of the rates that Burns&McDonnell recommends in order for the City to fully recover its revenue requirement through the five-year forecast. Burns &McDonnell has developed three different rate scenarios for consideration by the City. The scenarios vary in the timing and amount of rate adjustments,but all include revenue sharing between residential and commercial collection for the revenue generated from multi-family customers. Tables ES-5 through ES-7 summarize the rate changes and multi-family revenue sharing for each of the three rate scenarios. These tables show the adjustments on a percentage basis. Schedules 8 through 13 in the Appendix show the detailed rate adjustments for each year of the five-year forecast and resulting net lrevenue and working capital balances. While the commercial collection operation shows a significant under-recovery,much of it is due to providing services(and therefore incurring expenses)to multi-family residences and the revenue from those customers being credited to the residential collection operation. The rate scenarios focused on transferring some of the multi-family revenue to the commercial collection,but also include rate increases for roll-off customers and small rate increases for commercial front-load and cart customers. The residential collection operation has a projected under-recovery based on the current rates,and transferring City of College Station,Texas 5 Burns&McDonnell Executive Summary Solid Waste Cost of Service and Rate Design Study some multi-family revenue to the commercial collection operation will increase that under-recovery. Therefore,the rate scenarios include increases to both the single-family rate and the multi-family unit fee. Any rate increases shown for FY 2018 would take effect July 1,2018. All other rate increases would take effect at the beginning of the fiscal year(October 1). Scenario 1 Table ES-5 shows the rate adjustments,on a percentage basis,for the five-year forecast under Scenario 1. Scenario 1 includes rates increases for roll-off customers,single-family residential customers and extra cart service in FY 2018(last three months of the year)and FY 2020. Scenario 1 also includes rate increases for commercial front-load and cart customers in FY 2020. All multi-family revenue associated with front-load and cart service(charged by service level)is transferred to the commercial collection operation and a portion of the revenue generated from the multi-family unit fee is transferred to the commercial collection operation. Table ES-5: Recommended Rate Adjustments and Multi-Family Revenue Share-Scenario 1 Customer Class FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Commercial Collection Front-Load Dumpster Rate 0.0% 0.0% 5.0% 0.0% 0.0% 0.0% 0.0% 5.0% 0.0% 0.0% Commercial Cart Rate Roll-off Pull Fee 15.0% 0.0% 15.0% 0.0% 0.0% Residential Collection 11.1% 0.0% 6.3% Single Family Rate 10.9% 0.0% 6.3% 0.0% 0.0% Extra Cart Rate 11.1% 0.0% 3.3% 0.0% 0.0% Multi-Family Unit Rate Multi-Family Revenue Shared with Commercial 15% 15% Unit Fee 0% 15% 15 Front-Load 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Carts Scenario 2 Table ES-6 shows the rate adjustments, on a percentage basis,for the five year forecast under Scenario 2. l Scenario 2 has the same rate increases for commercial and roll-off customers as Scenario 1. It also includes the same revenue sharing for multi-family revenue. However,where Scenario 2 differs from Scenario 1 is that Scenario 2 includes one rate increase for single-family residential customers and multi- family unit-rate customers in FY 2018 (for the last three months of the year),but no further rate increases. Burns&McDonnell City of College Station,Texas 6 Solid Waste Cost of Service and Rate Design Study Executive Summary Table ES-6: Recommended Rate Adjustments and Multi-Family Revenue Share-Scenario 2 Customer Class FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Commercial Collection Front-Load Dumpster Rate 0.0% 0.0% 5.0% 0.0% 0.0% Commercial Cart Rate 0.0% 0.0% 5.0% 0.0% 0.0% Roll-off Pull Fee 15.0% 0.0% 15.0% 0.0% 0.0% Residential Collection Single Family Rate 16.3% 0.0% 0.0% 0.0% 0.0% Extra Cart Rate 15.8% 0.0% 0.0% 0.0% 0.0% Multi-Family Unit Rate 14.8% 0.0% 0.0% 0.0% 0.0% Multi-Family Revenue Shared with Commercial Unit Fee 0% 15% 15% 15% 15% Front-Load 100% 100% 100% 100% 100% Carts 100% 100% 100% 100% 100% Scenario 3 In Scenario 3,there is one-time rate adjustment for all commercial and residential customers in FY 2018 (for the last three months of the year). Table ES-7: Recommended Rate Adjustments and Multi-Family Revenue Share-Scenario 3 Customer Class 72.5% 8 FY 2019 FY 2020 FY 2021 FY 2022 Commercial Collection Front-Load Dumpster Rate 0.0% 0.0% 0.0% 0.0% Commercial Cart Rate 2.5% 0.0% 0.0% 0.0% 0.0% Roll-off Pull Fee 25.0% 0.0% 0.0% 0.0% 0.0% Residential Collection Single Family Rate 16.3% 0.0% 0.0% 0.0% 0.0% Extra Cart Rate 15.8% 0.0% 0.0% 0.0% 0.0% Multi-Family Unit Rate 14.8% 0.0% 0.0% 0.0% 0.0% Multi-Family Revenue Shared with Commercial Unit Fee 0% 15% 15% 15% 15% Front-Load 100% 100% 100% 100% 100% Carts 100% 100% 100% 100% 100% City of College Station,Texas 7 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary Summary of Select Rates Table ES-8 shows a summary of recommended rates for all three scenarios for residential customers,the unit fee for multi-family customers and the pull fee for roll-off customers(excludes disposal). For commercial dumpster customers,Table ES-8 shows only the rate for those customers who receive service twice per week for an eight cubic yard container. The pull fee for roll-off is per occurrence. The remaining fees are monthly fees. Table ES-8: Summary of Select Rates Customer Class FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Scenario 1 Single-Family Residential $16.00 $16.00 $17.00 $17.00 $17.00 Multi-Family Unit Fee $7.50 $7.50 $7.75 $7.75 $7.75 Commercial Dumpster(8CY,Twice per Week) $283.00 $283.00 $297.15 $297.15 $297.15 Roll-off Pull Fee $175.95 $175.95 $202.34 $202.34 $202.34 Scenario 2 Single-Family Residential $16.75 $16.75 $16.75 $16.75 E$7.75 Multi-Family Unit Fee $7.75 $7.75 $7.75 $7.75 Commercial Dumpster(8CY,Twice per Week) $283.00 $283.00 $297.15 $297.15 $297.15 Roll-off Pull Fee $175.95 $175.95 $202.34 $202.34 $202.34 Scenario 3 Single-Family Residential $16.75 $16.75 $16.75 $16.75 $16.75 Multi-Family Unit Fee $7.75 $7.75 $7.75 $7.75 $7.75 Commercial Dumpster(8CY,Twice per Week) $290.08 $290.08 $290.08 $290.08 $290.08 Roll-off Pull Fee $191.25 $191.25 $191.25 $191.25 $191.25 Comparison of Working Capital Balances Figure ES-2 summarizes the resulting working capital balances from the three rate scenarios. Without any rate increases,the working capital balance decreases rapidly over the five-year forecast. All three rate scenarios end the five-year forecast above 15 percent,but Scenarios 1 and 2 fall below 15 percent during the five-year forecast. Scenario 1 falls the most,followed by Scenario 2. Scenario 3 is projected to remain above 15 percent for the entire five-year forecast. City of College Station,Texas 8 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary Figure ES-2: Comparison of Working Capital Balances ■Current Rates ■Scenario 1 Scenario 2 ■Scenario 3 ` 20.0% Target=15% V 15.0% 10.0% 5.0% 0.0% - • FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 -5.0% -10.0% -15.0% I -20.0% I -25.0% -30.0% I Key Findings and Recommendations l • The current rates for residential and commercial collection are not sufficient to fully recover the l projected revenue requirement over the five-year forecast period. Without any rate increases,the Sanitation Division will operate at a deficit in each year of the forecast. • There is a significant amount of revenue(approximately$1.6 million)recognized by the residential collection operation for services that are provided by the commercial collection operation. • Rate Scenarios 1 and 2 are projected to fully-recover the five-year revenue requirements on a cumulative basis,but are projected to produce annual deficits in the short term that cause the working capital balance to temporarily fall below the 15 percent target. Scenario 3 maintains a combined working capital balance above the 15 percent target for the five-year forecast,but the balance for the commercial operations is projected to fall below the 15 percent target in FY 2021 and 2022. City of College Station,Texas 9 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Executive Summary • All rate scenarios include some amount of the multi-revenue being shared with the commercial collection operation. Over time(beyond the five-year forecast)the Sanitation Division should continue to work toward all of the multi-family revenue being recognized by the commercial collection operation. • Based on the Benchmark Analysis presented in Section 4,the Sanitation Division provides a high level of service with rates lower than many of the benchmark cities. The rate increases discussed in this section would still place the City's rates in the low to average range when compared to the benchmark cities. I I I I I 1 City of College Station,Texas 10 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Introduction 1.0 INTRODUCTION The City of College Station,Texas(City)retained Burns&McDonnell to conduct a solid waste cost of service and rate design study(Study)for the Sanitation Division(Sanitation)of the City's Public Works Department. The Study was completed in two phases. In 2016 Burns&McDonnell completed the analysis for the commercial collection operation. In 2017 Burns&McDonnell completed the analysis for the residential collection operation and also update the analysis for the commercial collection operation. The purpose of this study was to determine the total cost of providing commercial and residential refuse and recycling services, equitably distribute the cost to customers and design rates to safeguard the financial integrity of the operation. This report provides a discussion of the methodology utilized to conduct the analysis,the cost of providing services as determined by the analysis and recommended rates. 1.1 Project Approach The goal of a cost of service and rate design study is to determine the fees required to adequately recover 1 the costs of providing collection services. Burns&McDonnell developed a series of key tasks that I provided the foundation for the conduct of the study.The methodology will be discussed in Section 2 of this report. Burns&McDonnell utilized the following sources of information regarding the City's current Isystem and financial requirements. J1.1.1 Data Requests Burns&McDonnell submitted detailed data requests to the City to collect historical and background information on operations and practices.The information requested included: • Detailed financial reports and budgets • Solid waste ordinances • Personnel rosters I • Customer data • Solid waste tonnage reports • Fleet inventory and costs 1.1.2 Project Kick-Off Meeting Burns&McDonnell held a kick-off meeting with City staff on November 4,2015 to initiate the commercial collection phase of the Study. Burns&McDonnell held a similar meeting on January 4, 2017 for the residential collection phase of the Study. Burns& McDonnell City of College Station, TX 1-1 Solid Waste Cost of Service and Rate Design Study Introduction These meetings served as a forum to confirm the scope of services, discuss the data already collected and to be provided, allocate personnel and equipment to cost centers and finalize the cost centers to be used. 1.1.3 Ongoing Staff Communications During the course of the study,Burns&McDonnell communicated via email and conducted several conference calls with City staff.This communication provided the opportunity for Burns&McDonnell to review project progress,verify assumptions and receive input from City staff. 1.2 Report Organization This report is organized into four sections,including this section, an Executive Summary and Appendix. Section 2 focuses on the cost of service analysis and includes an overview of the methodology utilized to determine the cost of service for the City's commercial and residential collection programs as well as the cost of service based rates. Section 3 provides the projected financial impact of the current rates. In addition, Section 3 presents three options for recommended rates, as well as describes several policy issues. Section 4 compares the City's current collection programs to several benchmark cities. Since the commercial and residential studies were conducted as separate studies and then combined into a single report,there are two versions of some schedules(e.g.,Schedule IA and Schedule 1B)to provide the Idetailed information from each study. The report sections are listed below. • Executive Summary • Section 1 —Introduction • Section 2—Cost of Service Analysis • Section 3—Rate Recommendations • Section 4—Benchmark Analysis • Appendix—Schedules o Schedule IA: Commercial Test Year Io Schedule 1B: Residential Test Year o Schedule 2A: Commercial Five-Year Forecast o Schedule 213: Residential Five-Year Forecast o Schedule 3: Commercial Dumpster Cost of Service o Schedule 4: Commercial Cart Cost of Service o Schedule 5: Commercial Roll-off Cost of Service o Schedule 6:Residential Cost of Service o Schedule 7:Revenue Reconciliation with Current Rates o Schedule 8:Recommended Rates Scenario 1 1-2 Burns & McDonnell City of College Station,TX P Introduction Solid Waste Cost of Service and Rate Design Study o Schedule 9:Recommended Rates Scenario 2 o Schedule 10:Recommended Rates Scenario 3 1.3 Current Services and Rates The remainder of this section provides a description of the current commercial refuse services that the City provides to businesses and multi-family units and the rates for the services. i 1.3.1 Commercial Dumpster Service I The City provides commercial dumpster collection and disposal services for two,four and eight cubic yard(CY)containers and two,four and six CY containers with compactors.Dumpster collections may occur between one and six times per week,depending on the customer's needs.Table 1-1 lists the fmonthly dumpster rates based on container size and collection frequency. ITable 1-1: Current Commercial Dumpster Monthly Rates Collection Frequency(Collections per Week) I Container Size 1x 2x 3x 4x 5x 6x 2 CY $132.00 $174.00 $212.00 $250.00 $290.00 $336.00 4 CY $166.00 $220.00 $271.00 $329.00 $386.00 $436.00 8 CY $20.4.00 $283.00 $362.00 $439.00 $519.00 $595.00 2 CY Compactor $138.00 $274.00 $412.00 $549.00 $684.00 $822.00 ` 4 CY Compactor $184.00 $370.00 $554.00 $739.00 $925.00 $1,110.00 6 CY Compactor $248.00 $499.00 $748.00 $997.00 $1,245.00 $1,494.00 1. One customer receives commercial refuse service via 3 CY compactor six times per week. The monthly rate is the$747.00. The rates in Table 1-1 apply to businesses and some multi-family complexes. In addition,some multi- family complexes are charged on a per-unit basis and the City determines the number of containers and frequency of collection. The monthlyfee is$6.75 per unit for these customers. Currently,the revenue generated from multi-family customers is retained by the residential collection program even though the services are provided by the commercial collection operation. 1.3.2 Commercial Cart Service The City also provides commercial cart services for refuse via 90,300 and 400 gallon carts.Like commercial dumpster service,collections may occur between one and six times per week depending on the customer's needs.The monthly fees for 300 and 400 gallon carts are the same.For multi-family complexes with a total of four or more units,the fee for 300 and 400 gallon cart service is$6.75 per City of College Station, TX 1-3 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Introduction month per unit.The fees for commercial cart service for other commercial customers is shown in Table 1- 2 lists based on cart size and collection frequency. Table 1-2: Current Commercial Cart Monthly Rates Collection Frequency (Collections per Week) Container Size 1x 2x 3x 4x 5x 6x 90 gallon $18.00 $37.00 $55.00 $72.00 $90.00 $106.00 300/400 gallon $132.00 $174.00 $212.00 $250.00 $290.00 $336.00 1.3.3 Commercial Roll Off Se rvice The City provides collection and disposal services for 20,30 and 40 cubic yard roll-off open top and compactor containers. The fee for a collection(pull)is$153.00 plus the current per ton landfill disposal charge. Customers are also responsible for a daily container rental charge of$3.28 for a 20 CY roll-off, $3.51 for a 30 CY roll-off and$3.74 for a 40 CY roll-off.For Northgate Promenade customers that share the use of two 40 CY roll-off compactors,the monthly rate is the greater of$3.16 per cycle(i.e. use of the Northgate Promenade compactor roll-off)or$14.95 per month. 1.3.4 Residential Collection Service The residential operation provides services to single-family residences and multi-family residences with four units or less. Services provided for the monthly rate of$14.40 include weekly collection of refuse, recycling,bulky items, and brush. Residents can request an additional cart for$10.10 per month. IAs mentioned in Section 1.3.1,there is also a monthly fee of$6.75 per unit for some multi-family residences with greater than four units. This revenue is retained by the residential collection operation 1 even though the services are provided with commercial collection crews. Table 1-3 summarizes the current residential rates. Table 1-3: Current Residential Rates Service Current Monthly Rate Single-Family Rate $14.40 Extra Refuse Cart $10.10 I, Multi-Family Unit Fee $6.75 l ! Burns &McDonnell City of College Station, TX 1-4 Solid Waste Cost of Service and Rate Design Study Cost of Service 2.0 COST OF SERVICE This section describes the tasks involved in conducting the refuse cost of service analysis.Before describing each of the tasks in detail,Burns&McDonnell provides a brief overview of the overall methodology. This section of the report also describes the cost of service for commercial and residential refuse services. 2.1 Methodology Overview This overview provides the background necessary to understand how data compiled in each task provides the information required to determine the cost of service and fees that will adequately recover the cost of I service. • Development of the Test Year Revenue Requirement—The first task in conducting the cost of service analysis is the development of an annual revenue requirement for a Test Year.The revenue requirement represents the total revenue that commercial collection operations will need to recover during a year in order to fund all expenses associated with the provision of services. Burns&McDonnell worked with City staff to select a period that reflected the typical operation of the commercial refuse system. City staff and Burns&McDonnell selected the FY 2017 budget as the basis of the Test Year.'Burns&McDonnell then reviewed the financial data and worked lwith City staff to make any adjustments to costs to make them representative of a typical year. I The resulting Test Year(FY 2017)was used as the basis for forecasting expenses for the five- year forecast,FY 2018 through FY 2022. I • Development of the Revenue Requirement Forecast—After developing the revenue requirement for the Test Year,Burns&McDonnell worked with City staff to project changes in costs due to inflation, salary increases,new equipment,new customers,etc. This resulted in the five-year revenue requirement forecast. • Allocation of Costs to Cost Centers—Burns&McDonnell worked with staff to assign and allocate costs to various cost centers.The cost centers represent the primary commercial and residential collection services provided by the City,and are listed in Section 2.4. • Allocation to Customer Classes—Burns&McDonnell grouped the cost centers based on the lcustomer classes that represent ratepayers in the City's system. The revenue from ratepayers 1, must recover all the expenses incurred by the City to provide commercial and residential The commercial collection cost of service originally used the FY 2016 budget as the basis for the Test Year,but was updated using the FY 2017 budget. Burns&McDonnell City of College Station,TX 2-1 Solid Waste Cost of Service and Rate Design Study Cost of Service collection services. The customer classes include commercial dumpster,commercial cart,roll-off and residential. • Determination of Billing Units—Burns &McDonnell identified the appropriate billing units for each customer class.Billing units includes only active accounts that generate revenue and not vacant residences that do not receive services. • Calculation of the Cost of Service—Burns&McDonnell distributed the costs for each customer class across the appropriate billing units to determine the cost of service for each customer class. • Revenue Reconciliation and Rate Development—Section 3 addresses the revenue reconciliation and rate development. Burns&McDonnell compared the current commercial and residential collection program revenue to the revenue requirement to determine for which services the City is over-or under-recovering the cost of service. In addition,Bums &McDonnell developed recommended rates to fully recover the cost of service,including the funding of working capital reserves at appropriate levels, over the five-year forecast period,based on three rate options. I2.2 Development of the Test Year Revenue Requirement I2.2.1 Selection of the Test Year In developing the Test Year revenue requirement for the City,Burns&McDonnell used the FY 2017 proposed budget as the basis for the Test Year. Burns&McDonnell and City staff reviewed each line of the budget to determine whether any adjustments were required for FY 2017 to represent a typical year. Schedules IA and 1B in the Appendix provides the detailed Test Year. 2.2.2 Relationship between the Budget and the Revenue Requirement Burns&McDonnell would like to emphasize that there is a fundamental difference between a budget and a revenue requirement.The budget represents the costs associated with operations that directly support the commercial and residential collection programs.The City,like most other municipal operations,has I several operational budgets within the Sanitation Division.However,there are typically more service offerings than budgets and people and other resources may often be shared between operations.The revenue requirement shows the cost for each service offering, independent of the budgets. In addition,the revenue requirement focuses on the revenue that must be generated through rates. The revenue requirement is net of non-rate revenues that are included in the budget.These revenue offsets reduce the overall amount that the City must recover from the rates charged to customers. Categories of the revenue offsets include items such as interest income. City of College Station,TX 2-2 Burns& McDonnell i Solid Waste Cost of Service and Rate Design Study Cost of Service 2.3 Development of the Revenue Requirement Forecast In addition to developing the Test Year revenue requirement,Burns&McDonnell forecasted the annual revenue requirement for FY 2018 through FY 2022. In order to develop this forecast,Burns& McDonnell projected how costs would change over the years due to factors such as inflation. A 2.5 percent annual inflation rate was applied to the following categories of costs and accounts: • General • Salary and benefits • Vehicle fuel and maintenance costs • Vehicle capital costs A 2.0 percent annual increase was applied to commercial dumpster and cart customer accounts and residential accounts. Since historical roll-off collection data showed that the number of pulls varies up and down each year,Burns&McDonnell keep the number of roll-off pulls constant over the five-year forecast. Given the disposal contract the City has with the landfill,the disposal cost,on a per-ton basis, was also kept constant. Based on discussions with City staff,Burns&McDonnell also included increases to health insurance of 20 percent in FY 2018 and 10 percent in FY 2019,then 2.5 percent for the remaining years. In addition to forecasting cost increases due to inflation,Burns&McDonnell accounted for contributions to the vehicle replacement fund based on City-provided projections over the five-year forecast. Table 2-1 shows the revenue requirement for the five-year forecast for commercial,residential and then the combined operations.Non-departmental expenses represent approximately 17 percent of the total departmental revenue requirement. Non-departmental expenses that contribute to the revenue requirement include general and administrative charges, general fund transfer and general obligation debt service. The detailed composition of the forecast is provided in the Appendix, Schedule 2. I. l City of College Station, TX 2-3 Burns & McDonnell Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-1: Projected Revenue Requirement FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Commercial Collection Operating Expenses $3,167,561 $3,515,234 $3,611,819 $3,628,400 $3,718,862 Non-Departmental) $700,043 $726,410 $746,877 $773,749 $784,482 Revenue Offsets 2 ($52,259) ($52,875) ($53,503) ($54,144) ($54,798) Revenue Requirement-Commercial $3,815,345 $4,188,769 $4,305,193 $4,348,004 $4,448,546 Residential Collection Operating Expenses $4,607,747 $5,177,334 $5,185,510 $5,171,483 $5,438,342 Non-Departmental) $1,006,786 $1,044,110 $1,072,915 $1,110,909 $1,125,650 Revenue Offsets z ($2,969) ($2,969) ($2,969) ($2,969) ($2,969) Revenue Requirement-Residential $5,611,564 $6,218,474 $6,255,455 $6,279,422 $6,561,023 Total Residential and Commercial Operating Expenses $7,775,308 $8,692,567 $8,797,329 $8,799,883 $9,157,205 Non-Departmental) $1,706,829 $1,770,520 $1,819,792 $1,884,657 $1,910,132 Revenue Offsets z ($55,228) ($55,844) ($56,473) ($57,114) ($57,768) Total Revenue Requirement $9,426,909 $10,407,243 $10,560,648t $10,627,427 $11,009,569 1. Includes City general and administrative charges,transfers to the General Fund,bad debt and other non-departmental expenses. 2. Includes interest income,revenue from the sale of recyclables and rental revenue. 2.4 Allocation of Costs to Cost Centers The City provides a number of different services to its commercial and residential customers. To determine the costs for each service,there is a need to allocate costs to cost centers that represent the primary refuse services provided. These categories were determined through a series of discussions with City staff and are as follows (listed separately for commercial and residential): Commercial Residential • Administration • Administration • Dumpster Service • Refuse • Cart Service • Recycling • Roll-off Service • Bulky • Street Sweeping • Brush • Disposal • Street Sweeping • Disposal Burns&McDonnell included disposal as a separate cost center so that the direct costs for collection could be tracked separately from the disposal cost. City of College Station,TX 2-4 Burns&McDonnell Solid Waste Cost of Service and Rate Design Study Cost of Service Identification of the total costs associated with each cost center was a critical step in determining adequate rates that reflect the cost of providing service. These costs were isolated by cost center in order to fully recover the total revenue requirement by matching those customers that utilize the service with the actual costs associated with that service. Table 2-2 identifies the cost of providing service for each cost center for FY 2018 through FY 2022. The allocation of cost centers to customer classes is discussed further in Section 2.5. Table 2-2: Revenue Requirement by Cost Center Cost Center FY 2018 FY M19 FY 2D20 FY 2021 FY 2D22 Commercial Administration $937,929 $975,452 $1,003,223 $1,032,384 $1,049,635 Dumpster Service $1,356,681 $1,566,249 $1,624,882 $1,686,237 $1,728,556 Commercial Cart Service $346,062 $409,371 $413,019 $372,426 $381,737 lRoll-off Service $369,049 $404,319 $418,575 $400,130 $410,618 Disposals $691,408 $705,236 $719,340 $733,727 $748,402 Street Sweeping $114,216 $128,142 $126,153 $123,100 $129,598 !. I, Residential Administration $1,257,008 $1,304,639 $1,339,145 $1,382,810 $1,404,840 f I` Residential Refuse $1,276,056 $1,667,162 $1,639,648 $1,597,923 $1,754,272 ! Residential Recycling $1,006,619 $1,028,837 $1,050,084 $1,071,772 $1,093,808 Bulky $823,283 $897,365 $895,869 $889,660 $927,450 Brush $503,056 $541,472 $543,382 $543,068 $564,149 Disposal $563,583 $574,855 $586,352 $598,079 $610,041 Street Sweeping $181,959 $204,144 $200,975 $196,111 $206,464 Total Revenue Requirement $9,426,909 1 $10,407,243 $10,560,648 $10,627,427 $11,009,569 I 1. Excludes disposal costs for roll-off customers since the actual disposal cost is paid by the roll-off customer and does not need to be recovered in the cost per pull. 2.5 Allocation to Customer Classes After calculating the costs for each cost center over the five-year forecast period,the costs were then allocated to customer classes. This assists in identifying the appropriate customers to be charged for each service provided. . 2.5.1 Commercial Customer Classes The following lists the customer classes for commercial refuse services. 1 • Dumpster City of College Station, TX 2-5 Burns& McDonnell I i Solid Waste Cost of Service and Rate Design Study Cost of Service • Cart • Roll-off Table 2-3 summarizes how the expenses associated with each cost center were allocated to the commercial customer classes. Table 2-3: Recovery Basis for Commercial Cost Centers by Customer Class Dumpster Cart Roll-off Administration ✓ ✓ ✓ Dumpster Service ✓ Cart Service ✓ Roll-off Service ✓ Disposal ✓ ✓ ✓ Street Sweeping ✓ ✓ ✓ 2.5.2 Residential Customer Classes There is only ones customer class for residential services. All single-family residences and multi-family residences with four or fewer units receive weekly refuse,recycling,brush and bulky collection. In addition, any differences between the cost of street sweeping and the reimbursement the Sanitation Division receives for providing this service must be recovered through the residential customers. 2.6 Determination of Billing Units In order to calculate the appropriate user fees, it was necessary to determine the proper number of annual billing units for various customer classes. Burns&McDonnell received billing data for each customer class from City staff and determined the cost of service by dividing the revenue requirement by the appropriate billing units. 2.6.1 Dumpster Customers Commercial dumpster customers are provided refuse collection via two,four and eight CY containers and two, four and six CY containers with compactors. Dumpster collection frequency ranges from once per week to six times per week. Table 2-4 shows the projected billing units for commercial dumpster customers assuming a two percent Iannual growth rate. I City of College Station, TX 2-6 Burns& McDonnell � I Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-4: Commercial Dumpster Collection Billing Unit Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Annual Containers Collected 154,399 157,487 160,637 163,850 167,127 Annual Container Volume Collected(CY) 1,208,145 1,232,308 1,256,954 1,282,093 1,307,735 2.6.2 Commercial Cart Customers Commercial cart customers are charged based on the number of refuse carts. As with dumpster customers,the collection frequency ranges from once per week to six times per week. Table 2-5 shows the projected billing units for commercial cart customers assuming a two percent annual growth rate. Table 2-5: Commercial Cart Collection Billing Unit Forecast FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 90 gallon Annual Carts Collected 31,824 32,460 33,110 33,772 34,447 Annual Cart Volume Collected(CY) 14,181 14,464 14,754 15,049 15,350 300 gallon Annual Carts Collected 38,560 39,331 40,118 40,920 41,739 Annual Cart Volume Collected(CY) 57,275 58,420 59,589 60,780 61,996 400 gallon Annual Carts Collected 7,797 7,953 8,112 8,274 8,440 Annual Cart Volume Collected(CY) 15,441 15,750 16,065 16,386 16,714 I Total Annual Carts Collected j 78,181 1 79,745 81,339 82,966 84,626 I Total Annual Cart Volume Collected(CY) 86,897 88,635 90,408 92,216 94,060 2.6.3 Roll-Off Customers I Commercial roll-off customers are provided refuse collection via 20,30 and 40 CY roll-off open top containers and compactor containers.Most customers,with the exception of those that used the compactors in the North Gate Promenade, are billed a fee each time the container is pulled and hauled to the landfill. These customers also pay a rental fee for containers and initial delivery and set-up fee.The containers are either collected on a scheduled basis or on an as-needed(on-demand)basis.Table 2-6 shows the projected billing units for commercial roll-off customers. Since the variability of the number of pulls year to year,Burns&McDonnell kept the number of roll-off pulls constant over the five-year forecast. . I City of College Station, TX 2-7 Burns& McDonnell i i Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-6: Commercial Roll-Off Collection Billing Unit Forecast Roll-Off Pull Type FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Scheduled Compactor 1,327 1,327 1,327 1,327 1,327 Open-Top 58 58 58 58 58 Demand Compactor 371 371 371 371 371 Open-Top 610 610 610 610 610 Total Number of Pulls 7 2,3667 2,366 2,366 2,366 2,366 2.6.4 Residential Customers Table 2-7 shows the number of projected residential accounts,the number of those accounts that receive Iextra cart service and the number of multi-family units that are charged the monthly unit fee for collection services. Table 2-7: Residential Collection Billing Unit Forecast i FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 I Residential Accounts 22,889 23,347 23,814 24,290 24,776 J Extra Cart Service Accounts 2,081 2,122 2,165 2,208 2,252 Units for Multi-Family Unit Fee 14,811 15,107 15,410 15,718 16,032 I, l 2.7 Calculation of the Cost of Service IBurns&McDonnell determined the cost of service for the various solid waste services. The cost of service rates are not the rates Burns&McDonnell recommends be adopted by the City. The � I recommended rates are provided in Section 3. 2.7.1 Commercial Dumpster Refuse Table 2-7 lists the projected cost of service for commercial dumpster customers for the five-year forecast based on frequency of collection and container size.The cost of service rate for commercial dumpster customers is comprised of two components that,together,fully recover the cost of service: l • Frequency of collection:Used to recover the cost of collection operations as well as other indirect and overhead expenses. I • Volume of disposal capacity: Measured in cubic yards collected and used to allocate disposal costs and container maintenance. City of College Station, TX 2-8 Burns& McDonnell I- Solid Waste Cost of Service and Rate Design Study Cost of Service In addition to the information in Table 2-8, Schedule 4 in the Appendix provides a complete rate matrix for the five-year forecast period based on frequency of collection and container size. Table 2-8: Commercial Dumpster Refuse Cost of Service FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Per Collection Costs Direct Cost $1,431,474 $1,650,580 $1,708,329 $1,770,658 $1,817,420 Indirect Costs $614,188 $641,950 $663,601 $708,007 $719,721 Total Collection Costs $2,045,662 $2,292,530 $2,371,930 $2,478,665 $2,537,141 Number of Collections 154,399 157,487 160,637 163,850 167,127 Cost of Service per Collection $13.25 $14.56 $14.77 $15.13 $15.18 Volume-Based Costs Disposal . $626,048 $638,569 $651,340 $664,367 $677,654 Cubic Yards Collected 1,208,145 11232,308 1,256,954 1,282,093 1,307,735 Disposal Cost per CY $0.52 $0.52 1 $0.52 $0.52 $0.52 Total Dumpster Cost of Service $2,671,710 $2,931,098 1 $3,023,270 1 $3,143,032 $3,214,795 To identify the monthly cost of service rate,both the per-collection and volume-based cost components need to be considered: • Cost per Collection($13.25 in FY 2018)times the number of collections per month,PLUS • Cost per Cubic Yard of Capacity($0.52 in FY 2018)times the capacity of the container times the number of collections per month. For example, in FY 2018 an eight cubic-yard front-load dumpster collected three times per week(13 collections per month on average)would result in a monthly rate of: • $13.25 * 13+ • $0.52 * 8 * 13 = • $226.33 per month Table 2-9 presents the dumpster cost of service for each service level in FY 2018. I I2 There is a difference between this value and the value that appears in Table 2-9 and in Schedule 4,due to differences in rounding. I City of College Station, TX 2-9 Burns& McDonnell I Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-9: Commercial Dumpster Refuse Cost of Service Matrix(FY 2018) Collections per Week Container Size 1 2 3 4 6 6 2 CY compactor $70.89 $141.77 $212.66 $283.54 $354.43 $425.32 3 CY compactor $77.62 $155.24 $232.87 $310.49 $388.11 $465.73 4 CY compactor $84.36 $168.72 $253.08 $337.44 $421.79 $506.15 6 CY compactor $97.83 $195.66 $293.50 $391.33 $489.16 $586.99 2 CY $61.90 $123.81 $185.71 $247.62 $309.52 $371.42 4 CY $66.39 $132.79 $199.18 $265.58 $331.97 $398.37 8 CY $75.38 $150.75 $226.13 $301.51 $376.88 $452.26 2.7.2 Commercial Cart Refuse Table 2-10 lists the projected cost of service for commercial cart customers for the five-year forecast. Table 2-10: Commercial Cart Refuse and Recycling Cost of Service FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Per Collections Costs Direct Costs $365,140 $431,413 $434,229 $391,072 $401,362 �- Indirect Costs $156,667 $167,787 $168,677 $156,372 $158,944 Total Collection Costs $521,807 $599,199 $602,906 $547,444 $560,306 INumber of Collections 78,181 79,745 81,339 82,966 84,626 Cost of Service per Collection $6.67 $7.51 $7.41 $6.60 $6.62 I Volume-Based Costs Disposal $65,360 $66,667 $68,000 $69,360 $70,747 Cubic Yards Collected 86,897 88,635 90,408 92,216 94,060 IDisposal Cost per CY $0.75 $0.75 $0.75 $0.75 $0.75 Total Cart Cost of Service $587,167 $665,866 $670,906 $616,805 $631,054 IThe cost of service for commercial refuse carts varies on the number of carts serviced. Similar to the commercial dumpster cost of service,the cart refuse cost of service is calculated by the cost of service per collection multiplied by the number of collections per month plus the monthly volume collected multiplied by the disposal cost per cubic yard. Table 2-11 presents a cost of service matrix for the different service levels in FY 2018. I. _ I City of College Station, TX 2-10 Burns& McDonnell Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-11: Commercial Front-Load Refuse Cost of Service Matrix Collections per Week Container Size 1 2 3 4 5 6 90 gallon $30.37 $60.75 $91.12 $121.50 $151.87 $182.25 300 gallon $33.76 $67.53 $101.29 $135.05 $168.82 $202.58 400 gallon 1 $35.38 1 $70.75 $106.13 $141.51 $176.89 $212.26 2.7.3 Commercial Roll-Off Refuse Table 2-12 lists the projected cost of service for commercial roll-off refuse customers for the five-year forecast. The cost of service includes the revenue requirement for the roll-off collection(pull), as well as a share of indirect costs. The cost per pull is projected to range between$226 and$250,plus the cost of disposal.The pull and indirect costs is the cost of service for commercial roll-offs regardless of container size. Table 2-12: Commercial Roll-Off Refuse Cost of Service FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Direct Costs $389,395 $426,088 $440,071 $420,163 $431,728 Indirect Costs $167,074 $165,716 $170,946 $168,004 $170,970 Total Revenue Requirement $556,468 $591,804 $611,017 $588,167 $602,698 Number of Pulls 2,366 2,366 2,366 2,366 2,366 Cost of Service per Pull 1 $235.19 $250.13 $258.25 $248.59 $254.73 1. Excludes the disposal cost. Customers pay the actual disposal cost based on the tons hauled and the cost per ton at the landfill. 2.7.4 Residential Collection Table 2-13 lists the projected cost of service for single-family residential customers for the five-year forecast.This rate also applies with multi-family residences with four or fewer units. City of College Station, TX 2-11 Burns& McDonnell Solid Waste Cost of Service and Rate Design Study Cost of Service Table 2-13: Single-Family Residential Cost of Service FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Administration $1,257,008 $1,304,639 $1,339,145 $1,382,810 $1,404,840 Refuse $1,276,056 $1,667,162 $1,639,648 $1,597,923 $1,754,272 Recycling $1,006,619 $1,028,837 $1,050,084 $1,071,772 $1,093,808 Bulky $823,283 $897,365 $895,869 $889,660 $927,450 Brush $503,056 $541,472 $543,382 $543,068 $564,149 Disposal $563,583 $574,855 $586,352 $598,079 $610,041 Street Sweeping $181,959 $204,144 $200,975 $196,111 $206,464 Total Revenue Requirement $5,611,564 $6,218,474 $6,255,455 $6,279,422 $6,561,023 Households(HH) 22,889 23,347 23,814 24,290 24,776 Cost of Service per Month $20.43 $22.20 $21.89 $21.54 $22.07 i I Table 2-14 shows the monthly residential cost of service on per household basis for cost centers. i Table 2-14: Monthly Single-Family Residential Cost of Service—FY 2018 IFY 2018 Administration $4.58 I Refuse $4.65 Recycling $3.66 i Bulky $3.00 Brush $1.83 f Disposal $2.05 i I Street Sweeping $0.66 Total Cost of Service per Month $20.43 i I I I I I i I City of College Station,TX 2-12 Burns& McDonnell �: t