14-L
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Len Gorecki, Assistant City Manager / Director of Public Works
SUBJECT: Consideration and possible action to approve CR&R Incorporated’s 2023 annual rate adjustment request for solid waste collection services.
DATE: August 28, 2023
EXECUTIVE SUMMARY
This action would approve CR&R’s 2023 annual rate adjustment request based on percentage changes to the indices specified in Agreement File No. 399.2 (the “Franchise Agreement”) and the Proposition 218 estimated rates for Rate Year 2023.
RECOMMENDATION TO CITY COUNCIL
1) Approve CR&R’s 2023 annual rate adjustment request; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The recommended action to approve the 2023 annual rate adjustment request would increase solid waste rates charged to customers as follows:
Service Category Percentage Increase
Cart 5.7%
Bin 5.6%
Roll-off Box – Service 0.7%
Roll-off Box – Processing 3.8%
The impact on the typical monthly charges would be as follows:
Service Current Rate New Rate (effective 9/1/23)
Standard Cart $27.82 $29.40
3-yard Bin (1x per week) $218.80 $231.03
1 Staff Report – 2023 Solid Waste Rate Adjustment
August 28, 2023
BACKGROUND
On April 11, 2011, the City entered into a Revised and Restated Franchise Agreement with CR&R Incorporated for Solid Waste Management Services . The services include residential automated curbside collection, multi-family and commercial refuse and recyclable bin collection, and roll-off refuse and recyclable material processing and collection. The Franchise Agreement set the initial maximum rates that CR&R cou ld charge and it allows for CR&R to submit annual rate adjustment requests in writing, in accordance with the methodology established by the Franchise Agreement, which takes into account changes in industry indices for fuel, labor, equipment, disposal and transformation.
The annual rate adjustment request is subject to the City Council’s approval; however, the City Council’s discretion is limited to determining whether the adjustment request accurately reflects the Franchise Agreement’s methodology. The m ost recent rate adjustment was implemented on September 1, 2022 for Rate Year 2022 which runs from September 1, 2022 through August 31, 2023.
On May 31, 2023, CR&R submitted an annual rate adjustment request for Rate Year 2023, which will begin September 1, 2023 and end August 31, 2024.
ANALYSIS
1. 2023 Proposed Rates. Based on staff’s review of CR&R’s annual rate adjustment request, we found that CR&R accurately implemented the adjustment methodology contained in the Franchise Agreement and that CR&R’s proposed rates do not exceed the Proposition 218 estimated rates for Rate Year 2023; resulting in the following percentage changes to the service categories:
Service Category Percentage Change
Cart 5.7%
Bin 5.6%
Roll-off Box – Service 0.7%
Roll-off Box – Processing 3.8%
Based on the percentage changes above, the impact on the typical monthly charges would be as follows:
Service Current Rate New Rate (effective 9/1/23)
Standard Cart $27.82 $29.40
3-yard Bin (1x per week) $218.80 $231.03
2. Proposition 218 Proceedings. The rates proposed by CR&R are below the maximum rates approved pursuant the 3 -year Proposition 218 protest proceeding that was held on March 22, 2021. Therefore, a Proposition 218 proceeding is not require d as part of the 2023 rate adjustment. The maximum rates approved as part of that proceeding remain valid until August 31, 2024.
ATTACHMENTS:
CR&R 2023 Annual Rate Adjustment Request ............................................................... 3 2023 Solid Waste Rate Schedule………………………………………………………….…11 2 3
A B C D
Line
Adjustment Factor Index Old Index Value New Index Value Percent Change In
Index (Column B /
Column A - 1)
Maximum Allowed
Percentage Change
1 Labor (1)161.793 181.089 11.9%100.0% 2 Fuel (2)175.297 97.529 -44.4%5.0% 3 Equipment (3)154.750 159.540 3.1%100.0% 4 Disposal - landfill (4)33.930 37.17 9.5%5.0% 5 Disposal - surcharge - - 0.0%100.0% 6 Transformation (5)100.000 105.00 5.0%100.0% 7 All Other (6)287.504 301.836 5.0%100.0%
E F G H
Line
Adjustment Factor Index Initial Cost
Component (8)
Cost Factor
Category Weighted
as % of Component
Total (9)
Percent Change in
Index (from lower of
Column C or D)
Total Weighted
Change
8 Labor (1)24.2%11.9%2.9%
9 Fuel (2)3.3%-5.0%-0.2%
10 Equipment (3)14.7%3.1%0.5%
11 Disposal (4)9.8%5.0%0.5%
12 Disposal - surcharge 0.0%0.0%0.0%
13 Transformation (5)22.3%5.0%1.1%
14 All Other (6)25.7%5.0%1.3%
15 Total 100%6.1%
I J K L
Line Rate Category Current Customer
Rate
Total Weighted
Percentage Change
(from Column H)
Rate Increase or
Decrease
(Column I x Column
J)
Adjusted Monthly
Rate (Column I +
Column K)
17 Standard Service 24.80$ 6.1%1.51$ 26.31$ 37 Extra Refuse Cart 9.81$ 6.1%0.60$ 10.41$ 18 Extra Recycling Cart 4.09$ 6.1%0.25$ 4.34$ 19 Extra Green Waste Cart 4.09$ 6.1%0.25$ 4.34$ 20 Special Pickup - bags 8.18$ 6.1%0.50$ 8.68$
M N O P Q
Line
Adjustment Factor Index Cost Component
(Column F)
Percentage Change
as Applied to Rate
Adjustment (Column
G)
Increase In Cost
Components
(Column M x Column
N)
Cost Component
Increased (Column
M + Column N)
Cost Components
Reweighed to Equal
100%
20 Labor (1)24.2%11.9%2.9%27.1%25.6%
21 Fuel (2)3.3%-5.0%-0.2%3.1%2.9%
22 Equipment (3)14.7%3.1%0.5%15.2%14.3%
23 Disposal (4)9.8%5.0%0.5%10.3%9.7%
24 Disposal - surcharge 0.0%0.0%0.0%0.0%0.0%
25 Transformation (5)22.3%5.0%1.1%23.4%22.1%
26 All other (6)25.7%5.0%1.3%26.9%25.4%
27 Total 100.0%106.1%100.0%
(1)Employment Cost Index, PCU562111562111, waste collection, waste collection (2)PPI, WPU0531 not seasonally adjusted, Fuels and related products and power, Natural gas, effective 9/1/15 (3)PPI, PCU336120336120, Heavy duty truck mfg
(4)Gate rate at Disposal Site, capped at CPI from line item 6. (5)Gate rate at transformation facility
(6)CPI for All Urban Consumers (CIP-U), CUUR0000SA0, all items index - US city average Step Four: Reweight Cost Components
Bellflower
2023 Rate Adjustment
Single Family Rate Calculation (Excluding Franchise Fee) Step One: Calculate percentage change in indices
Step Two: Determine Components
Step Three: Apply percentage change to rates
4 A B C D
Line
Adjustment Factor Index Old Index Value New Index Value Percent Change In
Index (Column B /
Column A - 1)
Maximum Allowed
Percentage Change
1 Labor (1)161.8 181.1 11.9%100.0% 2 Fuel (2)175.3 97.5 -44.4%5.0% 3 Equipment (3)154.8 159.5 3.1%100.0% 4 Disposal (4)33.93 37.17 9.5%5.0% Disposal - surcharge - - 100.0% 5 Transformation (5)100.00 105.00 5.0%100.0% 6 All Other (6)287.504 301.836 5.0%100.0%
E F G H
Line
Adjustment Factor Index Initial Cost
Component (8)
Cost Factor
Category Weighted
as % of Component
Total (9)
Percent Change in
Index (from lower of
Column C or D)
Total Weighted
Change
7 Labor (1)19.5%11.9%2.3%
8 Fuel (2)2.6%-5.0%-0.1%
9 Equipment (3)11.8%3.1%0.4%
10 Disposal (4)25.5%5.0%1.3%
Disposal - surcharge 0.0%0.0%0.0%
11 Transformation (5)19.4%5.0%1.0%
12 All Other (6)21.2%5.0%1.1%
13 Total - 100%6.00%
I J K L
Line Rate Category Current Customer
Rate
Total Weighted
Percentage Change
(from Column H)
Rate Increase or
Decrease
(Column I x Column
J)
Adjusted Monthly
Rate (Column I +
Column K)
14 3 yard bin, 1 pickup / week 194.98$ 6.0%11.70$ 206.68$ 15 3 yard bin, 2 pickups / week 276.18$ 6.0%16.57$ 292.75$ 17 3 yard bin, 3 pickups / week 357.41$ 6.0%21.44$ 378.85$ 17 3 yard bin, 4 pickups / week 439.68$ 6.0%26.38$ 466.06$ 18 3 yard bin, 5 pickups / week 508.69$ 6.0%30.52$ 539.21$ 19 3 yard bin, 6 pickups / week 589.88$ 6.0%35.39$ 625.27$ 20 Bulky Item Pickup 32.42$ 6.0%1.95$ 34.37$
M N O P Q
Line
Adjustment Factor Index Cost Component
(Column F)
Percentage Change
as Applied to Rate
Adjustment (Column
G)
Increase In Cost
Components
(Column M x
Column N)
Cost Component
Increased (Column
M + Column N)
Cost Components
Reweighed to Equal
100%
19 Labor (1)19.5%11.9%2.3%21.9%20.7%
20 Fuel (2)2.6%-5.0%-0.1%2.5%2.3%
21 Equipment (3)11.8%3.1%0.4%12.2%11.5%
22 Disposal (4)25.5%5.0%1.3%26.7%25.3%
Disposal - surcharge 0.0%0.0%0.0%0.0%0.0%
23 Transformation (5)19.4%5.0%1.0%20.4%19.2%
24 All other (6)21.2%5.0%1.1%22.3%21.0%
25 Total 100.0%105.9%100.0%
(1)Employment Cost Index, PCU562111562111, waste collection, waste collection (2)PPI, WPU0531 not seasonally adjusted, Fuels and related products and power, Natural gas, effective 9/1/15 (3)PPI, PCU336120336120, Heavy duty truck mfg
(4)Gate rate at Disposal Site, capped at CPI from line item 6. (5)Gate rate at transformation facility
(6)CPI for All Urban Consumers (CIP-U), CUUR0000SA0, all items index - US city average Step Four: Reweight Cost Components
Bellflower
2023 Rate Adjustment
Bin Rate Calculation (Excluding Franchise Fee)
Step One: Calculate percentage change in indices
Step Two: Determine Components
Step Three: Apply percentage change to rates
5 A B C
Line
Adjustment Factor Index Old Index Value New Index Value Percent Change In
Index (Column B /
Column A - 1)
1 Service Component (Pull Rate)
2 Labor (1)161.8 181.1 11.9% 3 Fuel (2)175.3 97.5 -44.4% 4 Equipment (3)154.8 159.5 3.1% 5 All Other (4)287.504 301.836 5.0% 6 Processing Cost Components (4)287.504 301.836 4.0%
D E F G
Line
Adjustment Factor Index Initial Cost
Component (6)
Cost Factor
Category Weighted
as % of Component
Total (7)
Percent Change in
Index (from Step
One, Column C)
Total Weighted
Change
7 Service Component (Pull Rate)
8 Labor (1)2.6%11.9%0.3%
9 Fuel (2)11.8%-5.0%-0.6%
10 Equipment (3)25.5%3.1%0.8%
11 All Other (4)0.0%5.0%0.0%
12 Service Component Total -$ 39.9%n/a 0.5% 13 Processing Cost Components (4)100.0%4.0%4.0%
H I J K
Line Rate Category Current Monthly
Customer Rate
Total Weighted
Percentage Change
(from Column G)
Rate Increase or
Decrease (Column I
x Column J)
Adjusted Monthly
Rate (Column I +
Column K)
14 Standard Roffoff Box 179.64$ 0.5%0.90$ 180.54$ 15 Compactor Rolloff Box 224.64$ 0.5%1.12$ 225.76$ 17 Mixed Waste Processing / Ton 68.30$ 4.0%2.73$ 71.03$ 17 Inert C&D Processing / Ton 17.98$ 4.0%0.72$ 18.70$ 18 Recyclables Processing / Ton -$ 4.0%-$ -$ 19 Green Waste Processing / Ton 44.91$ 4.0%1.80$ 46.71$ 20 Organics Processing / Ton 105.21$ 4.0%4.21$ 109.42$
L M N O P
Line
Adjustment Factor Index Cost Component
(Column F)
Percentage Change
as Applied to Rate
Adjustment (Column
G)
Increase In Cost
Components
(Column L x Column
M)
Cost Component
Increased (Column L
+ Column N)
Cost Components
Reweighed to Equal
100%
20 Labor (1)2.6%11.9%0.3%2.9%7.2%
21 Fuel (2)11.8%-5.0%-0.6%11.2%27.8%
22 Equipment (3)25.5%3.1%0.8%26.2%65.0%
23 All Other (4)0.0%5.0%0.0%0.0%0.0%
24 Total 39.9%40.4%100.0%
(1)Employment Cost Index, PCU562111562111, waste collection, waste collection (2)PPI, WPU0531 not seasonally adjusted, Fuels and related products and power, Natural gas, effective 9/1/15 (3)PPI, PCU336120336120, Heavy duty truck mfg
(4)CPI for All Urban Consumers (CIP-U), CUUR0000SA0, all items index - US city average Step Four: Reweight Cost Components
Bellflower
2023 Rate Adjustment
Rolloff Rate Calculation (Excluding Franchise Fee)
Step One: Calculate percentage change in indices
Step Two: Determine Components
Step Three: Apply percentage change to rates, up to 3%
6 7
8 9
10 11
12 13
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