Consent Calendar Item 4k
STAFF REPORT
City Council Consent Item
DATE: June 21, 2022
TO: Honorable Mayor and Council Members
FROM: Merritt Perry, City Manager
SUBJECT: Solid Waste Collection Franchise Rate Adjustment Request STAFF RECOMMENDATION:
Staff recommends that the council approve the solid waste rate adjustment requested by Recology, Inc. to reflect the Consumer Price Index increase for the coming fiscal year.
EXECUTIVE SUMMARY:
The City of Fortuna entered into a franchise agreement with Eel River Disposal in 1998 for solid waste and recycling and collection. The franchise agreement was transferred to Recology, Inc. in 2017. The term of the franchise agreement currently ends in 2025.
In accordance with Sections 2.03.06, and 2.03.07 of the franchise agreement, rates may be adjusted annually based Consumer Price Index (CPI) for the rates effective on July 1 of the following year. A copy of those sections are shown in Table 1, below. The consumer price index is based on the All Urban Consumers, West-C index determined by the Bureau of Labor Statistics of the United States Department of Labor (CPI Index) and the month identified for annual comparison is March.
The CPI Index increase between March 2021 and March 2022 was 9%. Recology submitted a rate adjustment request to the City reflecting the CPI Index increase of 9% increase to their solid waste collection and disposal rates in accordance with the provisions of the Franchise agreement.
A copy of the request and the calculation are attached to this staff report. The net increase to solid waste collection rates is less than the CPI, as recycling rates reduced because the tonnage of recyclables and the processing fees both are expected to be lower in the next fiscal year.
The proposed rates shown with the current rates are presented on page 7 of the Recology Adjustment request. The cost of the 32-gallon can with the proposed rates in Fortuna is still lower than all of the other communities in the Eel River Valley.
Consent Calendar Item 4k
Table 1. Sections 2.03.06 and 2.03.07 of the Franchise Agreement between the City of Fortuna and Recology, Inc.
City staff has reviewed the requested increase for accuracy and has determined that the request meets the provisions of the Franchise Agreement for this type of adjustment.
Under the provision of paragraph 2.03.07i, the City Manager has the authority to approve CPI increases of less then or equal to 3%. However, the City Council must approve any annual CPI adjustment greater then 3%. Therefore, this item is presented to the Council for approval.
Consent Calendar Item 4k
RECOMMENDED COUNCIL ACTION
Approve the solid waste rate adjustment requested by Recology, Inc. to reflect the Consumer Price Index increase by Consent Agenda vote.
ATTACHMENT:
5/16/2022 Recology Rate Adjustment Request and Calculation