HomeMy WebLinkAboutJuly 9, 2012_Solid Waste Rate Study_7.pdf1
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kevin Handelin, Solid Waste Superintendent Debbie Arkell, Director of Public Services
SUBJECT: Solid Waste Rate Study
MEETING DATE: July 9, 2012
AGENDA ITEM TYPE: Action
RECOMMENDATION: The purpose of this agenda item is to receive and review the Solid
Waste Rate Study with the consultants and staff, ask the consultants questions about the report, and discuss the recommended options provided in the report. The consultant will present the information via internet conferencing. The Commission should provide direction to staff on
which options and policy issues, if any, they desire the staff to bring back for further
Commission discussion and consideration.
RECOMMENDED MOTION: I move to accept the Solid Waste Rate Study presented by SAIC Energy, Environment & Infrastructure, LLC and direct staff to return to the Commission
by August 27, 2012 with their recommendations based on tonight’s discussion.
BACKGROUND: In July 2011 we entered into a Professional Services Agreement with SAIC Energy, Environment & Infrastructure, LLC (hereafter SAIC) for the preparation of a Solid Waste Services Rate Study. The purpose of the study was to determine the total cost of
providing solid waste services for the four services offered by the Solid Waste Division
(automated, dumpster, roll-off and curbside recycling), equitably distribute the cost among
customers, and design rates to safeguard the financial integrity of the Division. SAIC established a “test year” using current costs and revenue, and used these numbers as a
starting point. Revenue and expenses were then forecasted out five years by taking into account
the City’s growth rates and inflation. Expenses were allocated to various service categories and
customer classes in an effort to better understand the actual cost of providing each service. CONSULTANT RECOMMENDED OPTIONS Table ES-2, Revenue Projections Based on Current Rates, on page ES-3 of the Study, projects
each solid waste service will have an under-recovery for each year of the forecast if the rates and
operations are left unadjusted. The study recognizes the Division operates in a competitive
100
2
environment and proposes a variety of options for rate adjustments to provide recovery of our
costs. The Division has made many adjustments over the past several months to improve
efficiencies and reduce costs, and will continue to pursue other cost saving opportunities. The
recommended options follow and are listed on Table ES-9 on page ES-8 of the Study: Table ES-9 SAIC’s Recommended Prioritization for Solid Waste Options
Section Option Priority Timeline/Notes 3.2.2 1) Reduce Dumpster Collection Costs High Immediate 3.2.3 2) Reduce Roll-off Collection Costs High Immediate 3.2.3 3) Increase Roll-off Daily Rental Rates High Next 12 months 3.2.3 4) Increase Roll-off Rates Medium Next 12 months 3.2.4 5) Add 400 Recycling Customers Medium Immediate 3.2.4 6) Pursue District Refunding Medium Next 12 months 3.2.1 7) Increase Automated Collection Rates Medium Immediate or next 1 – 3 years (policy
decision) 3.2.2 8a) Gradually Increase Dumpster Collection Rates Low After cost reduction
efforts 3.2.2 8b) Immediately Increase Dumpster Collection Rates Low After cost reduction efforts 3.2.4 9) Pursue General Fund Stabilization for Curbside
Collection
Low Policy decision 3.2.2 10) Discontinue Commercial Recycling Program Low Policy decision 3.2.2 11) Discontinue Commercial Dumpster Collection Low Policy decision
POLICY AND OPERATIONAL ISSUES In addition to the options listed above, other policy issues relating to the solid waste utility are discussed in Section 4 and are summarized on page ES-9 of the report. The Commission should
review and discuss these issues and provide direction on which of these issues, if any, they
would like staff to further investigate.
FISCAL EFFECTS: The fiscal effects will vary depending on which options, if any, the Commission chooses to pursue.
ALTERNATIVES: As suggested by the City Commission.
Attachment: Final Report – Solid Waste Rate Study
101
102
103
104
105
106
107
108
109
110
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175