Item-1.-Reso-MSS-Rates-Application — Fairfax City Council, November 1, 2023

FAIRFAX TOWN COUNCIL MEETING

STAFF REPORT
AGENDA ITEM #1
MEETING DATE November 1, 2023
PREPARED FOR Mayor and Town Council
PREPARED BY Heather Abrams, Town Manager
Janet Coleson, Esq., Town Attorney
SUBJECT Adopt a Resolution Approving Maximum Rates Collected by Marin Sanitary Service for Solid Waste Services to be Effective January 1, 2024

RECOMMENDATION
1) Conduct public hearing;
2) Adopt a resolution approving maximum rates collected by Marin Sanitary Service for Solid Waste Services to be effective January 1, 2024 in the Town of Fairfax

BACKGROUND
Fairfax Town Code Section 8.08.110 (as adopted during the course of Council’s December 1, 2021 meeting), provides that the Town Council may, with or without inviting bids therefor, “…enter into a contract with any responsible individual, firm or corporation for the collection, removal and delivery for Disposal, Recycling or processing of Solid Waste collected and accumulated within the Town, under the terms and conditions as may be prescribed by the Town Council; and the right to make the collection shall be exclusive to the contractor, who shall be designated as the Franchisee/Authorized Collector under the provisions of this chapter.” The Town of Fairfax entered into such a franchise agreement with Marin Sanitary Service and an amendment was approved by the Town Council during its special meeting of January 20, 20201 that extended the agreement for 10 years and simplified and streamlined the annual rate setting methodology to approve stable and predictable rates, and a firm basis for rate control in future years (the “Agreement”).

All of the jurisdictions in Marin that have similar agreements with MSS work together to share information and reduce costs: the City of San Rafael, City of Larkspur, the Towns of Ross, San Anselmo, and Fairfax, the Las Gallinas Valley Sanitary District, and the County of Marin. This Marin franchisors’ group meets throughout the year to collaborate on oversight of MSS’s operations and works together to conduct a single annual rate review analysis rather than each jurisdiction having to conduct and pay for a separate review.

DISCUSSION
In accordance with the Agreement, Marin Sanitary Service submitted an application for rate review, requesting an increase in service charges to be effective January 1, 2024 (Attachment A). The City of San Rafael retained R3 Consulting Group, Inc. (“R3”) as an independent consultant on behalf of the Franchisors’ group and the Town, and R3 reviewed the rate application in accordance with the rate-setting methodology set forth in the Agreement.

The review yielded a calculated rate adjustment of 4.68%, with resultant 2024 rates shown in Attachment B. The consultant’s report is provided as Attachment C to this Staff Report. 1 https://www.townoffairfax.org/meetings/town-council-meeting-january-15-2020/#/tab-agenda 2 In accordance with the requirements of the Agreement, as well as state law, the Town of Fairfax posted a notice of the November 1, 2023 public hearing in the three designated places in Town, as well as on the Town website, advising that this public hearing to consider the requested increase would be held on November 1, 2023 and that any person interested, including all persons owning property within the Town, was invited to appear and be heard on the matters set forth in the public hearing notice.

FISCAL IMPACT
Rates are paid directly by MSS’s customers in Fairfax.

ATTACHMENTS
A. MSS 2024 Combined Service Area Rate Application Letter B. MSS 2024 Rate Sheet
C. Consultant’s Independent Review of Marin Sanitary Service’s 2024 Rate Application D. Proposed Resolution

ATTACHMENT A

Marin Sanitary Service
Combined Service Area Rate Application

COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE ADJUSTMENT INDEXED YEAR - RATE YEAR 2024
MSS Marin
Service Area Franchisor's San Rafael Larkspur County San Anselmo LGVSD Fairfax Ross Total Group Total
Collector Operations 33,462,857 28,727,406 18,249,610 4,586,992 2,852,086 3,182,147 2,441,216 1,553,304 597,502 Garbage Landfilling and Organics Processing 5,738,948 4,684,469 2,975,895 747,983 465,079 664,079 398,080 390,400 97,432 Change in Law - AB 1826 Costs (7,695) (6,606) (4,197) (1,055) (656) (732) (561) (357) (137) Change in Law - SB 1383 Costs 410,854 352,546 223,017 57,535 38,324 38,798 26,521 19,510 7,148 Subtotal for Profit Calculation 39,604,963 33,757,814 21,444,325 5,391,456 3,354,833 3,884,291 2,865,255 1,962,857 701,945 Collector Profit (90.5% Operating Ratio) 4,157,427 3,543,638 2,251,062 565,954 352,165 407,743 300,773 206,046 73,685 Recyclable Materials Processing 1,402,781 1,180,290 749,801 188,460 117,180 144,253 100,299 78,239 24,549 Interest 722,474 653,297 415,019 104,314 64,860 44,456 55,516 24,721 13,588 Zero Waste Marin Fees 735,888 620,628 394,265 99,098 61,617 73,206 52,740 42,054 12,908 Franchise Fees 5,831,924 4,989,907 2,980,219 771,058 928,516 575,296 178,221 266,721 131,893 Other Agency Fees 2,476,169 2,314,669 1,480,601 568,400 265,668 84,000 - 77,500 - Annual Rate Revenue Reconciliation 533,181 558,036 354,503 89,103 55,402 29,439 47,421 (54,294) 11,607 Extraordinary Item - Recycling Property Insurance 162,574 136,783 86,894 21,841 13,580 16,720 11,624 9,070 2,845 Total 2024 Rate Revenue Requirement 55,627,383 47,755,063 30,156,689 7,799,684 5,213,821 5,259,405 3,611,849 2,612,914 973,020 Total 2023 Rate Revenue Requirement 52,565,320 45,105,302 28,533,184 7,361,189 4,903,281 4,963,841 3,393,112 2,496,176 914,538 2024 Rate Revenue Adjustment 5.83% 5.87% 5.69% 5.96% 6.33% 5.95% 6.45% 4.68% 6.39%

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

RESIDENTIAL REFUSE COLLECTION RATES
Rate increase: 4.68%
Effective date: 01/01/2024
Weekly Service Rates (Billed Quarterly)
Monthly Rate Quarterly Rate Monthly Rate Quarterly Rate 20 gallon cart $41.58 $124.74 $48.54 $145.62
32 gallon cart $49.84 $149.52 $58.23 $174.69
64 gallon cart $99.72 $299.16 $116.48 $349.44
96 gallon cart $149.56 $448.68 $174.71 $524.13
Low income - 20 gal** cart $33.26 $99.78 $38.83 $116.49 Low income - 32 gal** cart $39.87 $119.61 $46.58 $139.74 Low income - 64 gal** cart $79.78 $239.34 $93.18 $279.54 Low income - 96 gal** cart $119.65 $358.95 $139.77 $419.31 Additional Organics Cart Rental $2.64 $7.92 $2.64 $7.92 (35 or 64 gallon cart)
Additional Split Cart Rental $2.64 $7.92 $2.64 $7.92
(64 or 96 gallon cart)
Additional Monthly Charges Monthly Fee Quarterly Fee
(per cart, each way)
Distance 5' - 50' $7.44 $22.32
Distance Over 50' $14.80 $44.40
*Residential Customers may request one additional Organic Waste Cart, for a total of two, as part of the service **Must meet PG&E CARE program eligibility requirements. 20% discount on regular rates.

Additional Service Fees per Occurrence Fee
Return Fees - Off day $25.00
Return Fees - Same day $10.00
Resume Service/Late Fee $35.00
Contamination (cart) any size cart $30.00
Overload/Overweight (cart) $25.00
Extra bag garbage $15.00
Steam Clean (cart) $15.00
Special Collection $35.00
Special Handling (Bulky items) $30.00
Bulky item fees per item Fees Vary
Cart Strap Set-up Admin Fee $25.00
20 Gal Cart Replacement Fee $55.00
32 Gal Cart Replacement Fee $60.00
64 Gal Cart Replacement Fee $65.00
96 Gal Cart Replacement Fee $75.00
64 Gal Split Cart Replacement Fee $90.00
96 Gal Split Cart Replacement Fee $100.00

ONE TIME SERVICE FEES REOCCURING CHARGES
Residential Service (Bundled service includes 1 landfill (garbage) cart, 1 organic waste cart*, & 1 Recycling split cart )
Flat rate Hill Rate
NOTE: We may not be able to accommodate any collection requests NOT at the curb due to a variety of factors including safety, accessibility, and efficiency. Requests to be assessed and approved by Route Manager.

ATTACHMENT B

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

COMMERCIAL REFUSE MONTHLY COLLECTION RATES
Rate increase: 4.68%
Effective date: 01/01/2024
Garbage 1 23456
20 gallon cart* $49.97 $99.94 $149.91 $199.88 $249.85 $299.82 $11.53 32 gallon cart $58.80 $117.60 $176.40 $235.20 $294.00 $352.80 $13.57 64 gallon cart $117.60 $235.20 $352.80 $470.40 $588.00 $705.60 $27.14 96 gallon cart $176.40 $352.80 $529.20 $705.60 $882.00 $1,058.40 $40.71 1 yard bin $293.11 $493.81 $694.25 $895.09 $1,095.71 $1,296.33 $67.64 2 yard bin $490.05 $868.32 $1,246.46 $1,624.64 $2,003.08 $2,381.21 $113.09 3 yard bin $687.16 $1,243.02 $1,798.72 $2,354.59 $2,910.12 $3,365.14 $158.58 4 yard bin $980.50 $1,809.63 $2,561.98 $3,314.32 $4,066.63 $4,818.96 $226.27 5 yard bin $1,106.92 $2,021.68 $2,898.28 $3,774.83 $4,651.46 $5,528.01 $255.44 6 yard bin $1,233.31 $2,233.72 $3,234.55 $4,235.37 $5,236.28 $6,237.10 $284.61 10 yard roll-off $2,055.52 $3,722.87 $5,390.90 $7,058.95 $8,727.12 $10,395.17 $474.35 18 yard roll-off $3,699.94 $6,701.16 $9,703.65 $12,706.10 $15,708.83 $18,711.31 $853.83 20 yard roll-off $4,111.02 $7,445.73 $10,781.83 $14,117.90 $17,454.26 $20,790.34 $948.70 25 yard roll-off $5,138.78 $9,307.17 $13,477.28 $17,647.37 $21,817.82 $25,987.93 $1,185.87 Organics (F2E or Compost) 1 23456
Additional One
Time Empty/On
Call
32 gallon $22.96 $45.92 $68.88 $91.84 $114.80 $137.76 $5.30 64 gallon $45.89 $91.78 $137.67 $183.56 $229.45 $275.34 $10.59 1 yard $160.34 $320.68 $481.02 $641.36 $801.70 $962.04 $37.00 2 yard $320.68 $641.36 $962.04 $1,282.72 $1,603.40 $1,924.08 $74.00 3 yard $481.00 $962.00 $1,443.00 $1,924.00 $2,405.00 $2,886.00 $111.00 10 yard roll-off $1,438.85 $2,877.70 $4,316.55 $5,755.40 $7,194.25 $8,633.10 $332.04 18 yard roll-off $2,589.93 $5,179.86 $7,769.79 $10,359.72 $12,949.65 $15,539.58 $597.68 20 yard roll-off $2,877.72 $5,755.44 $8,633.16 $11,510.88 $14,388.60 $17,266.32 $664.09 25 yard roll-off $3,597.14 $10,791.42 $10,791.42 $14,388.56 $17,985.70 $21,582.84 $830.11 Garbage Compactors (Per empty)
Roll-off Compactor Tipping fee per ton $195.52 Roll-off Compactor Hauling charge $249.80 Stationary FL (Per Compacted Yard) $126.42 Roll-off Compactor Special handling Rates Vary Service Fee Details
Lock $25.00 Monthly fee
Box rental Fees Vary Minimum Bimonthly fee
Minimum Load ML Fees Vary
Distance < 50ft $7.44 Monthly fee per cart, each way
Distance > 50ft $14.80 Monthly fee per cart, each way
On Call rate only available with approval from Route Manager Commercial Service Fees Fee
Return Fee - BIN $75.00
Return Fee - CART -same day $10.00
Return Fee - CART -off day $25.00
Late Fee/Resume Service Fee $35.00
Contamination (BIN) $50.00
Contamination (CART) $30.00
Overload/Compaction (BIN) $60.00
Overload/Compaction (CART) $25.00
Additional Empty/Bag Garbage $15.00
Additional Empty BIN Fees vary
Extra Bag Yard Waste $15.00
Steam Clean (1-6 yard BIN) $95.00
Steam Clean (CART) $15.00
Steam Clean (COMPACTOR/ROLL-OFF) $225.00
Lock Set-up Admin Fee $25.00
Lock Single Use Fee $5.00
Lock Purchase Fee $20.00
Lock Bar Bin Set-up Fee $75.00
Overweight Charge Per Ton* $205.00
20 Gal Cart Replacement Fee $55.00
32 Gal Cart Replacement Fee $60.00
64 Gal Cart Replacement Fee $65.00
96 Gal Cart Replacement Fee $75.00
64 Gal Split Cart Replacement Fee $90.00
96 Gal Split Cart Replacement Fee $100.00
Bin Repair/Replacement Fee** Fees vary
*Boxes exceeding 300lbs/yard
**Fees vary by size up to $1,200, not to exceed current replacement value.

NOTE: All container types and sizes may not be available at all locations depending on a variety of factors including safety, accessibility, and efficiency. Requests to be assessed and approved by Route Manager.

ONE TIME SERVICE FEES REOCCURING CHARGES
Collections per Week
Monthly fee
Additional One
Time Empty/On
Call
Other Charges
* Customers must have a sufficient level of service for the volume of material generated. Requests for 20gal carts require assessment and approval of a Route Manager.

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

MULTI-FAMILY DWELLING REFUSE MONTHLY COLLECTION RATES
Rate increase: 4.68%
Effective date: 01/01/2024
Garbage 1 23456
20 gallon cart* $42.36 $84.72 $127.08 $169.44 $211.80 $254.16 $9.78 32 gallon cart $49.84 $99.68 $149.52 $199.36 $249.20 $299.04 $11.50 64 gallon cart $99.72 $199.44 $299.16 $398.88 $498.60 $598.32 $23.01 96 gallon cart $149.56 $299.12 $448.68 $598.24 $747.80 $897.36 $34.51 1 yard bin $293.11 $493.81 $694.25 $895.09 $1,095.71 $1,296.33 $67.64 2 yard bin $490.05 $868.32 $1,246.46 $1,624.64 $2,003.08 $2,381.21 $113.09 3 yard bin $687.16 $1,243.02 $1,798.72 $2,354.59 $2,910.12 $3,365.14 $158.58 4 yard bin $980.50 $1,809.63 $2,561.98 $3,314.32 $4,066.63 $4,818.96 $226.27 5 yard bin $1,106.92 $2,021.68 $2,898.28 $3,774.83 $4,651.46 $5,528.01 $255.44 6 yard bin $1,233.31 $2,233.72 $3,234.55 $4,235.37 $5,236.28 $6,237.10 $284.61 10 yard roll-off $2,055.52 $3,722.87 $5,390.90 $7,058.95 $8,727.12 $10,395.17 $474.35 18 yard roll-off $3,699.94 $6,701.16 $9,703.65 $12,706.10 $15,708.83 $18,711.31 $853.83 20 yard roll-off $4,111.02 $7,445.73 $10,781.83 $14,117.90 $17,454.26 $20,790.34 $948.70 25 yard roll-off $5,138.78 $9,307.17 $13,477.28 $17,647.37 $21,817.82 $25,987.93 $1,185.87 Organics 1 23456
Additional One
Time Empty/On
Call
Additional Organics Cart Rental $2.64 $5.28 $7.92 $10.56 $13.20 $15.84 NA (35 gallon cart) after 4 TOTAL carts per cart per
month
Additional Organics Cart Rental (64 gallon $2.64 $5.28 $7.92 $10.56 $13.20 $15.84 NA (64 gallon cart) after 4 TOTAL carts per cart per
month.
1 yard $160.34 $320.68 $481.02 $641.36 $801.70 $962.04 $37.00 2 yard $320.68 $641.36 $962.04 $1,282.72 $1,603.40 $1,924.08 $74.00 3 yard $481.00 $962.00 $1,443.00 $1,924.00 $2,405.00 $2,886.00 $111.00 Garbage Compactors (Per empty)
Roll-off Compactor Tipping fee per ton $195.52 Roll-off Compactor Hauling charge $249.80 Stationary FL (Per Compacted Yard) $126.42 Roll-off Compactor Special handling Rates Vary Service Fee Details
Lock $25.00 Monthly fee
Box rental Fees Vary Minimum Bimonthly fee
Minimum Load ML Fees Vary
Distance < 50ft $7.44 Monthly fee per cart, each way
Distance > 50ft $14.80 Monthly fee per cart, each way
On Call rate only available with approval from Route Manager MFD One Time Service Fees Fee
Return Fee - BIN $75.00
Return Fee - CART -same day $10.00
Return Fee - CART -off day $25.00
Late Fee/Resume Service Fee $35.00
Contamination (BIN) Per Yard $50.00
Contamination (CART) $30.00
Overload/Compaction (BIN) $60.00
Overload/Compaction (CART) $25.00
Additional Empty/Bag Garbage $15.00
Extra Bag Yard Waste $10.00
Additional Empty Garbage Fees vary
Steam Clean (BIN) $95.00
Steam Clean (CART) $15.00
Steam Clean (COMPACTOR/ROLL-OFF) $225.00
Lock Set-up Admin Fee $25.00
Lock Single Use Fee $5.00
Lock Purchase Fee $20.00
Lock Bar Bin Set-up Fee $75.00
Overweight Charge Per Ton* $205.00
20 Gal Cart Replacement Fee $55.00
32 Gal Cart Replacement Fee $60.00
64 Gal Cart Replacement Fee $65.00
96 Gal Cart Replacement Fee $75.00
64 Gal Split Cart Replacement Fee $90.00
96 Gal Split Cart Replacement Fee $100.00
Bin Repair/Replacement Fee** Fees vary
*Boxes exceeding 300lbs/yard
**Fees vary by size up to $1,200, not to exceed current replacement value.

NOTE: All container types and sizes may not be available depending on a variety of factors including safety, accessibility, and efficiency. Requests to be assessed and approved by Route Manager.

NOTE: Minimum service level is 32 gallons per unit or equivalent volume. Decrease to 20 gallon per unit is subject to company review and approval.

NOTE: Up to four (4) Organics carts provided at no additional charge. Additional carts may be rented for a nominal monthly fee.

REOCCURING CHARGES
Collections per Week Additional One
Time Empty/On
Call
Other Charges

ONE TIME SERVICE FEES
Monthly fee

FINAL REPORT
Town of Fairfax
Submitted electronically on October 22, 2020
submitted electronically: October 6, 2023
Review of Marin Sanitary Services’
2024 Rate Application

ATTACHMENT C
450 14th Street, Suite 350, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com October 6, 2023
Heather Abrams
Town Manager
Town of Fairfax
142 Bolinas Road
Fairfax, CA 94930
submitted vía email: [email protected]
SUBJECT: Final Report – Review of Marin Sanitary Service’s 2024 Rate Application Dear Ms. Abrams,
R3 Consulting Group, Inc. (R3) is pleased to submit this report detailing the results of our review of Marin Sanitary Service’s (MSS’s) 2024 rate application for the Town of Fairfax.

This review was conducted pursuant to R3’s engagement with the seven agencies (Agencies) served by MSS, including the City of San Rafael, City of Larkspur, County of Marin, Las Gallinas Valley Sanitary District, Town of Ross, Town of Fairfax, and the Town of San Anselmo.

This report summarizes results from our review of MSS’s 2024 indexed rate application per the streamlined rate setting methodology established in 2019. The methodology is described in the amended Exhibit B to the Franchise Agreement that the Town holds with MSS. * * * * *
We appreciate the opportunity to be of service to the Town. Should you have any questions regarding this report or need any additional information, please do not hesitate to reach out directly.

Sincerely,
Jim Howison | Sr. Managing Consultant
R3 Consulting Group, Inc.
925.768.7244 | [email protected]

FINDINGS
Town of Fairfax | Review of MSS’s 2024 Rate Application Page 1 of 4 Executive Summary
On August 31, 2023, MSS submitted its application for an increase to its solid waste rates, to be effective January 1, 2024. This is an indexed year rate adjustment, which primarily projects compensation due to MSS based on the applicable water-sewer-trash CPI Index (WST). Based on our review of the rate application, R3 concurs with MSS’s calculated 2024 rate revenue requirement of $2,612,914, which is $116,739 higher than the 2023 rate revenue requirement of $2,496,176. The corresponding adjustment to the Town’s solid waste rates for 2024 is 4.68%, based on January 1, 2024 effective date.

Table 1: 2024 Rate Adjustment Summary
2023 2024 Dollar
Change
Percentage
Change
Adjustment
to Rates
Collector Operations 1,479,337 1,553,304 73,967 5.00% 2.96% Garbage Landfilling and Organics Processing 362,287 390,400 28,113 7.76% 1.13% State Compliance Database Subscription 714 (357) (1,072) -150.00% -0.04% SB 1383 Compliance 18,663 19,510 847 4.54% 0.03%
Profit Calculation 195,354 206,046 10,692 5.47% 0.43%
Recyclable Materials Processing 21,828 78,239 56,411 258.43% 2.26% Interest 23,544 24,721 1,177 5.00% 0.05%
Zero Waste Marin Fees 40,469 42,054 1,585 3.92% 0.06%
Franchise Fees 247,259 266,721 19,462 7.87% 0.78%
Other Agency Fees 77,500 77,500 0 0.00% 0.00%
Annual Rate Revenue Reconciliation 23,590 (54,294) (77,884) -330.16% -3.12% Recycling Property Insurance 7,801 9,070 1,269 16.27% 0.05% SB 1383 Negotiations and Implementation
Support (2,171) 0 2,171 -100.00% 0.09%
Total Annual Rate Revenue Requirement 2,496,176 2,612,914 116,739 4.68% 4.68% Town of Fairfax | Review of MSS’s 2024 Rate Application Page 2 of 4 2024 Rate Adjustment Details
Collector Operations
Collector Operations compensates MSS for labor, benefits, general and administrative, depreciation and lease, maintenance, fuel and oil. Per Exhibit B, compensation for Collector Operations is adjusted using the CPI index for Water and Sewer and Trash Collection. R3 used publicly available Bureau of Labor Statistics data to verify the calculated increase of 5.0% to Collector Operations. Per Exhibit B, the rate adjustment is subject to a 2.5% minimum and a 5% maximum rate cap for MSS’s collection operations.

The result is $1,553,304 in Collector Operations for the Town in 2024, which is an increase of $73,967 compared to 2023.

Garbage and Organics Tipping Fees
Garbage Landfilling and Organics Processing tipping fee projections are calculated using actual tonnages collected from January 1 through June 30, 2023, which are then annualized to project total 2023 tonnages. Those tonnages are then multiplied by the projected 2024 tipping fees calculated in accordance with Exhibit B. This is based on the actual per ton tipping fees for each waste stream category, or if unavailable, projected tipping fees are calculated using the current year per ton tipping fees escalated by the change in WST— subject to a minimum increase of 2.5% and a maximum increase of

5.0%.

R3 reviewed MSS’s projected 2024 tons and the 2024 per ton tipping fees for residential garbage, residential green waste/organics, commercial garbage, commercial mixed waste for processing, commercial food scraps, and MSS-served Agencies’ waste delivered to MSS. Per Exhibit B, R3 confirmed that MSS materially correctly projected tons by category using annualized actual tons for the first six months of the current rate year and, as actual tipping fees are unavailable, applied the 5.0% WST adjustment to project 2024 per ton tip fees. The result is $390,400 in Garbage and Organics Tipping fees for the Town in 2024, which is an increase $28,113 compared to 2023.

Database Subscription for Compliance with State Law
The rate setting methodology allows for the recovery of additional revenues associated with costs for changes in law and/or new State mandates. For increased operating expenses due to State Laws, including AB 1826 and SB 1383, MSS has included in its rate application a line item for a compliance database. Zero Waste Marin has assumed responsibility for the tracking and reporting of materials. MSS discontinued its subscription to Recyclist and received a refund. Compared to 2023 costs declined - $1,072. For 2024 the Town’s portion of that credit totals $357.

Compliance with SB 1383
MSS is requesting continued revenue in association with SB 1383 with the goal of increasing compliance with the State of California’s organics state mandate(s). The company will continue to provide compliance monitoring and inspection services, contamination monitoring, outreach and education, and reporting functions on behalf of the Town. The total 2024 revenue recovery for these new SB 1383 compliance measures for MSS is $19,510 for an increase of $847 or 4.54%.

Profit Calculation
R3 reviewed the calculation of MSS’s profit, which is a function of total allowable operating expenses ($1,962,857 for the Town) divided by the contractually set operating ratio of 90.5% and subtracting the same sum, rounded to the nearest dollar. MSS’s actual profit achievement will vary depending on the company’s real revenues and expenses; as such, profit is not guaranteed. The result is $206,046 in Calculated Profit for the Town in 2024, which is an increase of $10,692 compared to 2023. The increase is due to increases in allowable operating expenses, which were described in the previous sections of this report.

Town of Fairfax | Review of MSS’s 2024 Rate Application Page 3 of 4 Recyclable Materials Processing
A net recyclable materials processing cost is calculated each year to share the risks and rewards of changing recycling markets between rate payers and MSS. Per Exhibit B, the Recyclable Materials Processing cost is escalated by the annual change in the WST and that amount is then divided by the number of all tons of recyclable materials processed at Marin Recycling Center from July 1 of the prior rate year through June 30 of the current rate year.

The recyclable materials revenue amount is calculated based on 90% of the total revenue received by the Marin Recycling Center for recyclable materials, which is then divided by the number recyclable material tons processed at Marin Recycling Center. The calculation does not include income or tons from recyclable materials processed for third parties or agencies that were not customers of MSS or the Marin Recycling Center as of December 31, 2018. For Rate Year 2024, the resulting Net Recyclable Materials Processing Cost Per Ton is $78.87, an increase of $60.15 from the 2023 value of $18.72. This increase is due to changes in the value of recyclable commodities sold by MSS. The result is $78,239 in Recyclable Materials Processing costs for the Town in 2024, which is an increase of $56,411.

Interest
Interest is based on MSS’s actual interest from its loan amortization schedules for actual and projected capital expenditures for services under the Agreement as of the last base year review in 2019. This is increased in the same manner as Collector Operations, as described above, via WST annually.

The result is $24,721 in interest for the Town in 2024, which is an increase of $1,177 compared to 2023.

Zero Waste Marin Fees
Zero Waste Marin Fees are set as a pass through as government fees and, per Exhibit B to the agreements, changes in such fees result in appropriate adjustments to rates to compensate MSS for increases or decreases in such fees. Zero Waste Marin fees included in the annual indexed rate applications for the MSS service area are set to be equal to the current Zero Waste Marin Fee assessments for the current fiscal year, with 100% of the MSS hauler fees passed through to the MSS Agencies, and with none of the MSS Transfer Station fees passed through to the MSS Agencies. The result is $42,054 in Zero Waste Marin Fees for the Town in 2024, which is an increase of $1,585 compared to 2023.

Franchise Fees
Franchise Fees are calculated by multiplying the applicable franchise fee percentage by each agency served by MSS by the revenues projected for each that Rate Year. The Town’s Franchise Fee is 10% of gross revenues. The result is $266,721 in Franchise Fees for the Town in 2024. Franchise Fees fund the costs of compliance with State laws, management and administration of the Town’s Agreement with MSS, and compensate the Town for the value of the property rights conveyed to MSS via the Agreement.

Other Agency Fees
Other Agency Fees are calculated and applied to each of the Agencies based on the specific fees set by those Agencies. MSS pays the Town a $77,500 Vehicle Impact Fee to cover the cost of road impacts from MSS’s solid waste collection vehicles.

Annual Rate Revenue Reconciliation
The Rate Revenue Reconciliation item is to reconcile the projected rate revenue from the 2022 rate adjustment to the actual revenue collected through rates charged during the 2021 rate year. MSS experienced a credit of $54,294 in 2022 billed revenues in the Town compared to the 2022 revenue requirement. That amount is therefore included in the 2024 rate application.

Town of Fairfax | Review of MSS’s 2024 Rate Application Page 4 of 4 Recycling Property Insurance
Property insurance for recycling processing facilities have gone up across the country for circumstances outside of MSS’s control. MSS has previously and separately briefed the Agencies on this item, and R3 is aware of the market circumstances surrounding it. R3 finds that this extraordinary item is supported and reasonable. The result is $9,070 in Recycling Property Insurance for the Town in 2024, which is an increase of $1,269 compared to 2023.

Funding for SB 1383 Contract Negotiations and Implementation The MSS served Agencies have contracted with R3 to provide support for negotiation of an amendment to the MSS franchise agreements with the Agencies, effectuating the new services, terms and conditions for SB 1383 compliance. That contract also includes a contingency for support to the Agencies in implementing SB 1383 in 2022. R3’s expenses for that work were budgeted at $44,380 but then determined that services were not needed. The Town of Fairfax’s portion of $2,171 was fully received in 2023.

Survey of Comparable Rates
Figure 1 illustrates R3's survey of solid waste rates as of October 2023 for agencies located throughout Marin County. These survey results are presented as an indication of the reasonableness of the resulting rates for 2024. For comparison purposes, agencies serviced by MSS are designated in green and represent the proposed pricing for 32-gallon cart, including the current rate increase. Other, non-MSS service agencies are designated in blue and are current pricing, though price increases are expected for 2024 as well. The average cost for the 30–35-gallon cart for non-MSS service agencies is represented by the grey line is $55.18. The 32-gallon cart is projected to cost $49.84 per month for the flat regions of the Town. The 2024 Hill Rate for the 32-gallon cart is projected at $58.23 per month. The Town’s commercial rates for a 3-cubic yard bin serviced one time per week will be $687.16 compared to $656.44 the previous year.

Figure 1: Comparison of MSS’s 2024 Rates to Other Marin County Agencies $55.18
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RESOLUTION 23-__

A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF FAIRFAX

APPROVING MAXIMUM RATES TO BE COLLECTED BY MARIN SANITARY SERVICE FOR SOLID WASTE SERVICES EFFECTIVE JANUARY 1, 2024, IN THE

TOWN OF FAIRFAX
WHEREAS, Fairfax Town Code Section 8.08.110 (effective January 1, 2022) provides that the Town may enter into an exclusive contract with any responsible individual, firm or corporation for the collection, removal and delivery for disposal, recycling or processing of solid waste collected and accumulated within the Town, under the terms and conditions as may be prescribed by the Town Council; and WHEREAS, the Town of Fairfax has entered into such an agreement with Marin Sanitary Service for the provision of solid waste and recycling services (the “Franchise Agreement”); and
WHEREAS, in accordance with the Franchise Agreement, Marin Sanitary Service may submit an application to the Town for an increase in garbage and recycling service rates; and
WHEREAS, Marin Sanitary Service has submitted an application for rate review, requesting an increase in service charges to be effective January 1, 2024; and WHEREAS, the Town conducted an independent review of the rate application in accordance with the rate-setting methodology set forth in the Franchise Agreement; and WHEREAS, the new rate schedule proposed by Marin Sanitary Service is attached hereto and incorporated herein as Exhibit A; and
WHEREAS, in accordance with the requirements of the Franchise Agreement, as well as state law, the Town of Fairfax posted a notice of the November 1, 2023 public hearing in the three designated places in Town as well as on the Town website; and WHEREAS, the Town Council of the Town of Fairfax held a public hearing on November 1, 2023, to consider the requested increase, at which time any person interested, including all persons owning property within the Town, was invited to appear and be heard on the matters set forth in the public hearing notice; and WHEREAS, Fairfax Town Code Section 8.08.030 (effective January 1, 2022) provides that solid waste collection service charges will be set forth in a resolution of the Town Council,
NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Fairfax as follows:

ATTACHMENT D
SECTION 1. The recitals set forth above are adopted as findings of the Town Council.

SECTION 2. The Town Council has reviewed the rate schedule requested by Marin Sanitary Service, as set forth in Exhibit A hereto, and finds that the proposed rates and charges are not discriminatory or excessive and will be in compliance with applicable laws.

SECTION 3. The Town Council hereby adopts the rate schedule set forth in Exhibit A, with such new rates effective as of the 1st day of January 2024.

The foregoing Resolution was duly passed and adopted at a special meeting of the Town Council of the Town of Fairfax held in said Town on the 1st day of November 2023 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:
________________________________
Chance Cutrano, Mayor
Attest: ________________________
Michele Gardner, Town Clerk

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

EXHIBIT A TO RESOLUTION

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

TOWN OF FAIRFAX

EXHIBIT C - SCHEDULE OF RATES

NOTE: All container types and sizes may not be available depending on a variety of factors including safety, accessibility, and efficiency. Requests to be assessed and approved by Route Manager.

NOTE: Minimum service level is 32 gallons per unit or equivalent volume. Decrease to 20 gallon per unit is subject to company review and approval.

NOTE: Up to four (4) Organics carts provided at no additional charge. Additional carts may be rented for a nominal monthly fee.

REOCCURING CHARGES
Collections per Week Additional One
Time Empty/On
Call
Other Charges

ONE TIME SERVICE FEES
Monthly fee

Fairfax City CouncilNovember 1, 2023

Fairfax City Council
November 1, 2023