Review of MSS 2024
Rate Application
November 1, 2023
Garth Schultz & Jim Howison
SLIDE
1 1. Rate Adjustment Methodology
2. Rate Compensation Overview
3. 2024 Rate Adjustment
4. Rate Comparison
5. Q&A and Rate Adoption
AGENDA
SLIDE
2 Rates are Sole Compensation to MSS
⎻ Rates are the only source of funding for MSS’s solid waste and recycling collection, processing, recovery and disposal services Cost of Service Increases Every Year
⎻ Costs for these services tends to increase annually
• Labor wages and benefits
• Vehicles, fuel, parts and equipment
• Processing, recycling, composting and disposal
• Governmental fees and unfunded state mandates
⎻ Important (and required) environmental programs like recycling and composting are more costly than landfill disposal
Annual Rate Increases Fund Cost Increases
⎻ Contract with MSS sets the terms of annual adjustments ⎻ Adjustments are CPI-like, setting amount paid to MSS
⎻ MSS is incentivized to control costs
Rate Adjustment Methodology
SLIDE
3 CPI-like Rate Adjustments
⎻ Annual changes based on streamlined formulas since 2020 ⎻ Result has been stable and predictable changes in rates (even through the uncertainty of the COVID-19 pandemic)
Rate Adjustment Methodology
-5%
0%
5%
10%
15%
20%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Year
Annual Rate Adjustment 10-Year Average
SLIDE
4 Collection Operations (60.0%)
⎻ Programs and services provided by MSS @ 4.42% CPI increase Processing, Recycling and Disposal (14.6%)
⎻ Garbage, recycling and and organics services provided by MSS and others based on changing tonnages and CPI
⎻ Normal increases are offset by improvements in recycling markets State and Local Compliance (17.0%)
⎻ Mandatory SB 1383 organics recovery and climate pollutant reduction programs, services, education and reporting
⎻ Regional programs and services provided by Zero Waste Marin ⎻ Contract management, administration, compliance with State laws and use of government property
Profit Allowance (8.4%)
⎻ Normal industry standard profit margin; investments; risks ⎻ Profit is not guaranteed
Rate Compensation Overview
SLIDE
5 2024 Rate Adjustment
Rate Adjustment Effective January 1, 2024
⎻ 4.68% increase to MSS rates in Fairfax
⎻ Equates to increase of $2.23 per month for most residential customers (32-gallon garbage subscription)
⎻ Residential customers who qualify for low-income rate will receive 20% discount (based on PG&E CARE Program)
⎻ Changes to commercial rate changes will vary and can often be avoided through better recycling and waste reduction SLIDE
6 Rate Comparison
Monthly 32-gallon Residential Rates
$55.18
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
SLIDE
7 Q&A and Rate Adoption
Q&A
Rate Hearing and Adoption