Solid Waste Management Division
Service Rates Update
Need for Rate Update:
Last rate increase was applied in Sept ember 2009 from 2007 adopted rate schedule Number of residential acc ounts have grown 16%, but revenues have only increased 14% Operational expenses have incr eased dramatically over the last fourteen years: tipping fees, fuel, labor, fleet maintenance, and carts are 80% of expenses and are up 30%
Expense 2012 2023 Difference Change
Tipping Fees $6.5 million $7.4 million $856,000 +13%
Fuel $927,000 $1.6 million $660,000 +71%
Labor $11.6 million $14.1 million $2.6 million +22%
Fleet Maintenance $4.3 million $7.1 million $2.8 million +65% Collection Carts $741,000 $954,000 $213,000 +29%
Collection Truck, ea. $261,500 $595,700 $334,200 +127%
Pickup Truck, ea. $32,305 $51,100 $18,795 +58%
The Division’s revenues are primarily generated through user fees and charges for service to residents.
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Labor Tipping Fees Fuel Fleet Maintenance
All Other Expenses Vehicle Purchases Revenue Operating Reserves Solid Waste Management Division
Service Rates Update
Assumptions for Updated Rates:
Maintain current levels of service
Replace aging collection fleet and use lease-to-own purchase for costly vehicles: collection trucks, sweepers & claws
Incrementally replenish 45-day operating reserve fund by end of 5-yr rate plan period Include costs for:
o Fresno Sanitary Landfill ($2.5MM FY24)
o SB 1383
o O&M Facility
Add new one-time per year bulky item pick up by appointment beginning FY26 $5 million intradepartmental loan (FY24) from Wastewater Management Division Proposed Increase to Service Rates for Residential Solid Waste Projected Year-End Residential Operating Reserve Balance
Solid Waste Management Division
Service Rates Update
Comparison of Rates to Neighboring Service Areas & Municipalities*** Agency Monthly Rate*
Oakland $154.10
Fresno County (Mid Valley)** – High $98.89
San Jose $59.19
Sacramento $53.86
Stockton $52.82
Modesto $51.25
Merced $49.06
Fresno County (Mid Valley)** – Low $47.51
Selma $45.00
Clovis $39.10
Madera $38.72
Los Angeles $36.32
Fresno – Proposed $30.87
Bakersfield $22.00
* Rates based on trash cart and recycled/gr een cart, 96-gallon or largest size. ** Range based on zone, and effective 9/1/2023
*** Information compiled in May 2023
Affordability Credit
DPU will propose replacement of exis ting low-income senior citizen rate with low-income affordability credit that will be available to all that qualify. Eligible customers would submit documentation they qualify for:
PG&E’s California Alternate Rate s for Energy (CARE) Program One of Fresno County’s human services progr ams, such as the Supplemental Nutrition Assistance Program (SNAP), the Women, Inf ants, and Children (WIC) Program, the National School Lunch Program (NSLP), or
Medi-Cal Program.
The Solid Waste Affordability Credit Program (S WACP) is currently being developed and will be presented to Council for approval in a separate acti on at the Council meeting at which the 2025 Rate Plan Prop 218 public hearing will be held. The proposed value of the SWACP for a qualified account holder has not yet been finalized.
Without a Rate Update:
Secure funding from the General F und, impacting other City services, or Cost cutting measures, reducing se rvices to residential customers
Agenda Item seeks:
Council direction to initiate Prop 218 process
Following this direction:
o Print and mail notice and protest card ; customer receipt March 18, 2024 o 45-day after receipt hold public hearing on May 2, 2024 Final count of protest cards
Council discussion
Council action
o If approved, implement new rates July 1, 2024
[date]
[location]
Department of Public Utilities
Community Outreach Workshop
1 WELCOME
City Council Meeting
December 14, 2023
v05
WELCOME
Solid Waste Management
Division Rate Update
1. Solid Waste Management Division
(SWMD) Provided Services
2. SWMD’s Current Cost Realities and
Financial Health
3. Rate Study and Updated Rates
4. Today’s Requested Action
2 Today’s Discussion
Solid Waste
Management
Division
• 119,000 customers
• 4 collection days per
week
• 64 daily collection
routes
• 353,000 carts
– Gray – Solid Waste
– Blue – Recycling
– Green – Organics
3 Residential Program
Solid Waste
Management
Division
4 Additional Services
Free Dump Days
Citywide Litter
Control Activities
Operation Clean Up
Recycling Education
& Outreach
Free Shred Days
Solid Waste
Management
Division
5 Current Service Levels
Standard Service:
$25.37 per month
96-gallon
recycling
96-gallon
green
waste/
organics
96-gallon
trash
Alternate Service:
$19.20 per month
96-gallon
recycling
96-gallon
green
waste/
organics
64-gallon
trash
• Service Accounts
– 103,000 in 2012
– 119,000 today
• Revenues
– $28,356,483 in FY2012
– $32,234,917 in FY2023
• Waste Tonnage
– 231,340 tons in FY2012
– 260,263 tons in FY2023
Accounts, Waste Volume,
and Annual Revenue
6 0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
2010 2012 2014 2016 2018 2020 2022 2024
Accounts
Revenue
Revenue Accounts
Solid Waste
Management
Division
The current solid waste rates were
last updated in 2009 and based on a
rate plan adopted in 2007.
Cost Reality:
Continued Cost Increases
7 Expense 2012 2023 Difference % Change
Tipping Fees $6.5 million $7.4 million $856,000 +13%
Fuel $927,000 $1.6 million $660,000 +71%
Labor $11.6 million $14.1 million $2.6 million +22%
Fleet Maintenance $4.3 million $7.1 million $2.8 million +65% Collection Carts $741,000 $954,000 $213,000 +29%
Collection Vehicles $261,500 $595,700 $334,200 +127%
Pickup Trucks $32,305 $51,100 $18,795 +58%
Operational expenses have increased dramatically over the last fourteen years: tipping fees, fuel, labor, fleet
maintenance, and carts comprise 80% of expenses and have increased 30%
• 1.3 million miles per year
across entire 176 vehicle fleet
• 109 collection trucks operate
in severe duty environment
• 25% of fleet is beyond
expected 8-year service life
• Deferred needed
replacements in 2023
Cost Reality:
Need to Catch Up Vehicle Replacements
8 • Under USEPA enforcement action
• City required to collect and treat landfill gas and groundwater • $2.5M included in FY24 budget for regrading and treatment improvements
Cost Reality:
Fresno Sanitary Landfill Regulatory Action
9 • SB1383 is California’s Short-Lived
Climate Pollutant reduction
regulation
• Requires reducing landfilling of
green waste and organics
• Public education, collection,
and composting will require
more effort
Cost Reality:
SB1383’s Additional Cost Pressure
10 Overall Financial Situation
11 $0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Labor Tipping Fees Fuel Fleet Maintenance Vehicle Purchases All Other Expenses Revenue Operating Reserves Annual Revenue
• Loan from wastewater utility in FY 2024
– To cover current expenses and make the Division whole • Maintain current level of service
– Weekly curbside collection of solid waste, recyclables, and green waste/organics carts
• One Operation Clean Up event per year
– On scheduled dates set by the City
• Adds bulky item pickup by appointment in FY 2026
– One curbside bulky item collection per year, by appointment Rate Study: Model Assumptions
12 • SB 1383 Short-Lived Climate Pollutant reduction regulation costs – Compliance, monitoring, and reporting requirements
• Improvements for DPU O&M Facility
– SWMD’s anticipated portion of improvements
• Fresno Sanitary Landfill improvements
– In accordance with USEPA enforcement action
• Replacement of aging fleet
– Lease purchase of costly vehicles: Collection vehicles, sweepers, and claws
• Replenish 45-day operating reserve fund by FY2029
Rate Study: Model Assumptions
13 • FY 2025 proposed rate adjustment will:
– Provide for an overall increase in revenue
– Realign rates to reflect current costs of service for each service level
• FY 2026 – FY 2029 rates:
– Rates for each service level will increase at the same percentage each year
Rate Study: Cost of Service
14 Rate Study: Proposed Rates
15 Container Size Current FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 96-gallon Solid Waste Service $25.37 $30.87 $35.50 $38.70 $41.99 $45.24 $ Change $5.50 $4.63 $3.20 $3.29 $3.25
64-gallon Solid Waste Service $19.20 $28.12 $32.34 $35.25 $38.25 $41.21 $ Change $8.92 $4.22 $2.91 $3.00 $2.96
ADDITIONAL CONTAINERS
96-gallon Solid Waste Cart $10.25 $8.26 $9.50 $10.36 $11.24 $12.11 $ Change ($1.99) $1.24 $0.86 $0.88 $0.87
64-gallon Solid Waste Cart $7.43 $5.50 $6.33 $6.90 $7.49 $8.07 $ Change ($1.93) $0.83 $0.57 $0.59 $0.58
96-gallon Recycling Cart $3.74 $3.47 $3.99 $4.35 $4.72 $5.09 $ Change ($0.27) $0.52 $0.36 $0.37 $0.37
96-gallon Green Waste Cart $3.87 $4.95 $5.69 $6.20 $6.73 $7.25 $ Change $1.08 $0.74 $0.51 $0.53 $0.52
Rate Study: Rates Comparison***
16 Agency Monthly Rate*
Oakland $154.10
Fresno County (Mid Valley)** – High $98.89
San Jose $59.19
Sacramento $53.86
Stockton $52.82
Modesto $51.25
Merced $49.06
Fresno County (Mid Valley)** – Low $47.51
Selma $45.00
Clovis $39.10
Madera $38.72
Los Angeles $36.32
Fresno – Proposed $30.87
Bakersfield $22.00
Notes:
* Rates based on trash cart
and recycled/green cart,
96-gallon or largest size.
** Rate range based on zone
and effective 9/1/2023
*** Information compiled in
May 2023
Fresno’s Current Rate:
$25.37
• Replacement of low-income senior citizen rate with a
Solid Waste Affordability Credit Program
– In compliance with Prop 218
– Will mirror the existing Water Affordability Credit Program • Would be combined into a single application with the same eligibility requirements, which includes qualification for:
– PG&E’s California Alternate Rates for Energy (CARE) Program – One of Fresno County’s human services programs such as the Supplemental Nutrition Assistance Program (SNAP), the Women, Infants, and Children (WIC) Program, the National School Lunch Program (NSLP), or
– Medi-Cal Program
– To be presented during Public Hearing on May 2, 2024
Affordability Considerations
17 • Community Meetings
– Four public meetings held
over two-week period
– Reviewed SWMD’s
services and current rates
– Discussed current cost
realities
– Provided an overview of
Prop 218 rate-setting
process
Community Relations
18 Website: www.fresno.gov/prop218
E-Mail: [email protected]
Phone: (559) 621-8218
For Additional Information:
Timeline
19 Dec 14, 2023: City Council considers initiating Prop 218 process
March 18, 2024: Prop 218 Notices delivered to property
owners and customers
May 2, 2024: Public Hearing and final protest deadline July 1, 2024: New rates go into effect
Today’s Requested Action
20 • Requesting Council authorization to move forward
with Prop 218 rate-setting process
– No action on rates
• If not authorized to move forward:
– SWMD will need subsidy from City’s General Fund,
impacting other City services; or
– Additional cost-cutting measures will need to be taken which will impact SWMD’s services to residential customers