Business Item 5f
STAFF REPORT
City Council Business Item
DATE: June 5, 2023
TO: Honorable Mayor and Council Members
FROM: Merritt Perry, City Manager
SUBJECT: Solid Waste 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 2022 and March 2023 was 5.2%. Recology submitted a rate adjustment request to the City reflecting the CPI Index increase of 5.2% 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 more than the CPI, as recycling fee increased for the Samoa Recycling Facility, and increased costs for residual solid waste transferred to HWMA increasing (as indicated in the letter from Ms. Wise).
Business Item 5f
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.
Business Item 5f
RECOMMENDED COUNCIL ACTION
1. Receive staff report and review questions with staff
2. Open Public Comment
3. Close Public Comment
4. Motion to approve the solid waste rate adjustment requested by Recology, Inc. to reflect the Consumer Price Index increase. Voice vote.
ATTACHMENT:
5/5/2023 Recology Rate Adjustment Request and Calculation