LINDA VISTA-ANNANDALE ASSOCIATION
P. O. Box 94364
Pasadena, CA 91109
Via Email: Glendale City Clerk’s Office
September 12, 2022
City Council
City of Glendale
613 E. Broadway, 2nd Floor
Glendale, CA 91206
Re: Meeting of September 13, 2022
Agenda Item 8.b.: Update on Scholl Canyon Landfill Operations and Closure
Honorable Mayor and Councilmembers:
The Linda Vista-Annandale Association (LVAA) appreciates this opportunity to comment on Scholl Canyon Landfill closure proposals.
What is the Linda Vista-Annandale Association (LVAA)?
LVAA is the Neighborhood Association which advocates for the part of the City of Pasadena directly adjacent to the City of Glendale’s Scholl Canyon Landfill, the Special Recreation Area, and the proposed Biogas Renewable Generation Project (the Project).
LVAA is dedicated to the improvement and development of the Linda Vista -Annandale neighborhood area of Pasadena, and the promotion of the general welfare of our residents.
Our neighborhood includes, and LVAA represents, approximately 1,330 single-family homes located in the City of Pasadena. In addition to these “sensitive receptors,” our neighborhood also includes an important educational institution near Glendale and the Landfill, the Art Center College of Design Hillside campus. To the east and south, our neighborhood, including the Art Center, is immediately adjacent to, and in some places nearly abuts, the Scholl Canyon Landfill. In fact, several Pasadena streets and 211 of 249
residential properties are specifically referred to and considered in the Project Environmental Impact Report (EIR).
The Scholl Canyon Landfill Should Be Closed and Converted to Recreational Use in Accordance With Glendale’s Previously Adopted Policies, Goals and Objectives.
LVAA supports closing the Landfill in accordance with Glendale’s previously adopted policies, goals, and objectives, that is, the Landfill should be closed upon reaching current capacity (estimated to occur in December 2025) or December, 2025, whichever is earlier. In no event should the closing date be extended, or the Landfill expanded any further.
Failure to close the Landfill upon reaching current capacity appears neither to have been envisioned nor intended by the basic “social contract” with adjacent Glendale residents when the Scholl Canyon Landfill was originally approved, including updated approvals. The agreement with the residents and voters of Glendale was to allow the Landfill until no longer functional, and then to enable the Landfill area to transition to full passive, open space, and recreational use for the benefit of the public. All planning documents and previous public policy decisions, including Zoning, support this process and conclusion. Eventual, full passive recreational use has been and is the expectation of the area’s residential neighbors, including those of us located in the City of Pasadena.
Here for your review are relevant sections of Glendale’s General Plan, the foundational document that should guide all your policy decisions including Landfill closure.
Glendale General Plan: Recreation Element.
Goals, Objectives, and Policies -- Objective 1: Incrementally expand the quantity and quality of recreational experiences for residents and visitors to the City of Glendale now and far into the future.
Objective 1, Policy 1: The City shall provide a range of recreational opportunities to meet the needs, desires and interest of all population groups in the city. 212 of 249
Objective 1, Policy 3: The City shall enhance and expand existing recreational facilities in response to community needs.
Existing Recreational Facilities Section – Scholl Canyon: When Scholl Canyon sanitary landfill has reached capacity, the remaining 250 to 280 acres which have been utilized for the landfill will become available for park improvements and open space. (Emphasis Added.)
Glendale General Plan: Open Space and Conservation Element.
Issues and Opportunities – First Paragraph, second, third sentences:
The juxtaposition of industrial, intensive commercial, high density residential, suburban and open space lands requires decisions regarding the effect each land use classification has on the others. This is especially true for those uses that abut open space and conservation areas.
Policy 2: The City shall provide a variety of outdoor recreational opportunities to all residents.
Opportunity and access are consistent with the needs of an increasingly diverse population for a variety of recreational experiences.
Goals and objectives Introduction -- Second Paragraph, second sentence:
The accumulation of open space is a public asset and is a result of City policy aimed at acquiring this significant resource for the environmental, educational, recreational and conservation benefits it provides.
Goal 2: Protect vital or sensitive open space areas including ridgelines, canyons, streams, geologic formations, watersheds and historic, cultural, aesthetic and ecologically significant areas from the negative impacts of development and urbanization.
Goal 2, Objective 4: Provide incentives to defer development that is inconsistent with future acquisition priorities or other objectives of this plan.
Further, as stated in the Staff analysis, the Joint Powers Agreement (JPA) requires the construction of parks/recreational facilities on the landfill premises after the closure of the Landfill.
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Conversion of the Landfill to extensive active and passive recreational use has the potential to be of great recreational and economic benefit to Glendale and the immediate region, including West Pasadena and other jurisdictions adjacent to Glendale. Considering the uncertain future for recreation in Pasadena’s Central Arroyo as the City moves relentlessly to commercialize the Central Arroyo, and the many years it will take for the recovery of the Upper Arroyo (Hahamongna) from the Sediment Removal project, LVAA is very aware of the interest in our area in the recreational future of the Landfill property. Recreational opportunities for regional users will mean more visitors to the area and to Glendale and more positive economic impacts for Glendale.
We urge you to “stay the course” and close the Landfill when current capacity is reached, and then proceed to plan for, develop and implement a visionary plan for the use of the entire Landfill site for recreational use.
Thank you for your consideration of our comments.
Sincerely,
Nina Chomsky
Nina Chomsky, LVAA President
cc: LVAA Board of Directors
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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Solid Waste Collection Rates and Commencement of Proposition 218 Notice and Public Hearing Process for the Purpose of Adopting New Solid Waste Collection Rates for Single-Family and Small Multi-Family Customers
1. Motion authorizing staff to commence the Proposition 218 Notice and Public Hearing Process for the purpose of adopting new solid waste collection rates for single-family and small multi-family customers
COUNCIL ACTION
Item Type: Action Item
Approved for September 13, 2022 calendar
EXECUTIVE SUMMARY
Refuse collection rates were last revised twelve years ago in 2010. In consideration of significant factors driving cost increases, including China’s ban on recyclables, state mandates under SB 1383 and the pending closure of Scholl Canyon Landfill, as well as increases in projected operating and capital expenses, additional revenues from solid waste collection rates are necessary. To fully fund the City’s solid waste operations over the next five years, the City’s collection rates must be increased over several years, as detailed in the Analysis section.
Although the City’s solid waste collection rates need to be increased, the same trends that are creating upward pressure on the City’s rates are also impacting all other jurisdictions in California. Even with the proposed rate adjustment, Glendale’s new rates for residential and multi-family of less than 5 units, will be lower than many cities within Los Angeles County, for similar solid waste collection services. 215 of 249
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COUNCIL PRIORITIES
Environmental Stewardship: Establishment of solid waste collection rates commensurate with the cost of operations and regulatory compliance ensures resources are available to sustain optimum integrated waste services to the community, and achieve compliance with State regulations and laws. These rates fund programs that divert recyclable and organic materials from the landfill, as well as edible food recovered for the food insecure members of the community.
RECOMMENDATION
Authorize staff to proceed with the Proposition 218 notice and public hearing process for the purpose of adopting new solid waste collection rates for single-family and small multi- family (2-4 units) customers.
BACKGROUND
Since 2010, Public Works Department Integrated Waste Division has experienced significant increases in general operational costs, including substantial costs associated with the unfunded mandates required with the implementation and ongoing management of recent State laws; most notably the SB 1383 compliance demands.
Over the last twelve years, these additional costs include overall expenditures for general integrated waste operations, which have increased over 46 percent (approximately $8 million/year). Along with the general cost of providing solid waste collection services going up over this twelve-year period, the Scholl landfill tipping fee has only increased by over 25 percent over this time frame.
Further, over the past five years, a volatile recycling market has resulted in the City having to move from the paradigm of being paid for recyclable commodities, which resulted in an approximate annual revenue of $345,600, to one where the City is having to pay for the processing of the recyclable materials that costs an average of $518,400 annually, resulting in a net annual cost impact of approximately $864,000.
Compounding the general increases in expenditures over the past twelve years and the cumulative impact of annual inflation, was the impact of franchising the City’s commercial services while continuing to provide service for the remaining single-family residential customers, and multi-family customers with two to four dwelling units. While discontinuing municipal services to commercial customers reduced operational costs, it also reduced revenue. The reduction in the City’s overall solid waste customer base brought about by franchising the business and large multi-family customer sectors has resulted in the City having fewer customers over which it is able to allocate its fixed costs.
Moreover, in addition to the major factors above that are driving the need for a rate increase, the City is in the midst of complying with the most sweeping changes to State solid waste regulations in the last thirty years. Among several new laws that have 216 of 249
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impacted the City’s general operations, administrative duties, and regulatory responsibilities, including AB 341, AB 1826, and AB 1594. The latter of which, for example, began effective January 1, 2020, and mandated that California could no longer consider the use of green material as alternative daily cover for diversion credit, so the City had to begin hauling these materials to a separate location and paying to have this material recycled.
Most significantly, SB 1383 is bringing about several fundamental changes to municipal solid waste management.
Under SB 1383, all local jurisdictions must arrange for the collection of organics, ensure that edible food is recovered, conduct education and outreach, purchase a certain amount of organic content products, secure access to organic processing capacity, and conduct extensive monitoring, compliance, and enforcement activities. As a result, solid waste rates throughout the State are increasing significantly. Glendale is no exception as projected expenditures associated with these unfunded mandates have and will continue to rise.
Historically, State mandates have burdened Glendale’s municipal waste management operations. The requirements to divert green waste, and now organic waste materials as part of SB 1383, has resulted in daily service routes that take substantially longer to complete, requiring additional overtime and staff fatigue. Public Works recently embarked upon a program to optimize and right-size routes under a one pass system, where refuse, recycling and organics are serviced separately by drivers specifically assigned to collect and directly haul that solid waste commodity for processing at a respective facility. While this program has solved many operational programs attributable to overly long routes, it also increased the number of weekly routes and need for additional drivers and side- loading refuse trucks.
Further, staff is preparing for the imminent closure of the Scholl Canyon Landfill, which is expected to take place within the next three to five years. Once the Landfill is closed, the City collected refuse will also have to be diverted to another location within the region for processing and disposal. In anticipation of this, staff has been examining several options and alternative destinations for this displaced waste stream. Preliminary analysis of the costs associated with this transition are anticipated to result in an operational increase of over $1.4 million per year and an initial capital expense of $640,000 (to purchase the two new vehicles). Operational costs are expected to include an approximate 68% per ton increase in tipping fees for refuse material, two additional daily routes to accommodate the increased distance to the refuse processor, which will result in the need for two additional truck operators, and increased fuel, maintenance, and depreciation costs for the aforementioned vehicles. See Table 1 below:
Table 1 – Rate impacts of SCLF closure
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In April 2022, the City authorized MSW Consultants, a solid waste consultant, to prepare a detailed Cost of Services Study (COSA) to determine a rate structure that accurately reflects the cost of providing these waste management services including collection, diversion programs, outreach, and disposal. The final COSA is attached as Exhibit 1 and demonstrates the need for proposed waste adjustments.
To adequately fund the ongoing refuse and recycling related programs, staff proposes the rate increases detailed in the analysis below with the initial rate increase taking effect on January 1, 2023 pending the public hearing recommended for approval by Council this evening.
ANALYSIS
The City’s refuse collection rates, which were last increased in 2010, do not accurately reflect the City’s current cost of service. As a result, the initial rate adjustment on January 1, 2023, will restructure the rate schedule to ensure that they more accurately reflect the City’s actual cost of service for each service type. Not all City customers will receive the same initial rate adjustment. For example, single family residential customers with a 64- gallon container will initially receive a $17.58 increase. However, single-family customers with a 96-gallon container will initially receive an $15.01 increase. After the rates are restructured in January 2023, customer rates will be adjusted across the board by the same percent each year thereafter on July 1st.
The Rate Adjustment Table (Exhibit 2) shows the current and proposed rates for customers with most common levels of service. The proposed rates are the result of an evaluation of the current and future financial performance of the City’s solid waste operations, as reflected in the COSA prepared by MSW consultants.
The same trends that are creating upward pressure on the City’s rates are also impacting all other jurisdictions in California. Even after the City’s rates are adjusted, they are expected to be lower than many other jurisdictions within LA County, for similar solid waste collection services. A comparison of the City’s proposed initial single-family rate to those in other jurisdictions in the region is shown below in Chart 1.
FY 2025 FY 2026 FY 2027 FY 2028 Total
Incremental Landfill Disposal Cost: $717,174 $1,434,347 $1,434,347 $3,585,868Cost of 2 new trucks $640,000 $640,000Total Incremental Cost $4,225,868 Residential Rate Revenue $22,335,226 $24,362,440 $26,571,420 $73,269,086Incremental Cost as Percent of Revenue 5.8% Projected 96 gal SFR rate $56.28 $60.78 $65.64Incremental Cost as Percent of Revenue 5.8% 5.8% 5.8%Impact on Rates $3.25 $3.51 $3.79 218 of 249
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Chart 1 – Rate Comparison – Monthly Rate for Single-family Collection Service
Proposition 218 requires the City to satisfy various requirements on the use and collection of solid waste rates, and sets procedural requirements that must be met to increase said rates. Prop. 218 imposes substantive restrictions on the imposition and use of property- related fees, where the revenues derived from the fee or charge cannot exceed the funds required to provide the property-related service; the revenues derived from the fee or charge cannot be used for any purpose other than that for which the fee or charge was imposed; and the amount of the fee upon any parcel or person cannot exceed the proportionate cost of the services attributable to that parcel. Cal. Const., Art. 130, Sec. 6(b)(1)- (3).
Prop. 218 requires that written notice of the proposed property-related fee or charge (Prop. 218 Notice) be mailed to the record owner of each identified parcel within the jurisdiction. Prop. 218's definition of property ownership includes tenants where the tenant is directly liable to pay the fee or charge at issue. The Prop 218 Notice must state: that a fee increase is proposed; the amount of the proposed increase; the basis for the calculation of the proposed fee; the reason for the fee. The Prop. 218 Notice must also provide the date, time, and location of the proposed public hearing on the proposed fee or charge (Prop. 218 Hearing).
If written protests to the proposed fee or charge are received by a majority of the parcels prior to the date and time of the Prop. 218 Hearing, the rates at issue will not increase. If written protests are not received by a majority of the parcels, the City Council may adopt the proposed rate changes. If adopted, the proposed rates will go into effect thirty days after the date of adoption.
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For the foregoing reasons, it is respectfully recommended and requested that the City Council authorize staff to proceed with the issuance of the Prop. 218 Notice.
STAKEHOLDERS/OUTREACH
Following Council's setting the public hearing, staff will promptly mail a letter to property owners and current customers notifying them of the public hearing date, and will update the Public Works website to provide more detailed information about the proposed rate change.
FISCAL IMPACT
Prior to the franchising of commercial waste hauling services, the City built up a fund balance in the Refuse Fund of over $30 million due to savings from positions being held vacant and vehicle replacements delayed in anticipating of the transition to services to private haulers. After commercial franchising was implemented on December 1, 2021, service for single-family and multi-family 2-4 units has been covered by this fund balance despite the cost of these services far exceeding current rates. As shown in the COSA, without a rate adjustment this fund balance is projected to be depleted in 2024.
Staff recommends the fee increases presented on the Rate Adjustment Table (Exhibit 2). The justifications for these increases are demonstrated in the Exhibit 2 of the COSA. Once implemented, based upon projected revenues relative to O&M and necessary capital expenditures, staff estimates this rate increase will result in the cash balance in the Refuse Fund balancing out with a revenue reserve of $6.1 million projected for FY 2024, and remain balanced in a range between approximately $3.8 million and $6.3 million over the following fiscal years through FY 2028.
This action is necessary to address rising operational costs and to ensure that revenues are keeping pace with required capital expenditures.
ENVIRONMENTAL REVIEW
This item is considered a ministerial activity and therefore, not subject to CEQA review.
CAMPAIGN DISCLOSURE
This item is considered a ministerial activity and therefore, not subject to Campaign Disclosure.
ALTERNATIVES
Alternative 1: Approve Motion authorizing staff to commence the Proposition 218 Notice and Public Hearing Process for the purpose of adopting new solid waste collection rates for single-family and small multi-family customers.
Alternative 2: Take no action, which will result in depletion of the cash balance in the Refuse Fund by early FY 2024, and Glendale’s solid waste management service will be operating in a deficit.
Alternative 3: Consider any other alternative not proposed by staff. 220 of 249
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ADMINISTRATIVE ACTION
Prepared by:
Dan Hardgrove, Assistant Director of Public Works
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS / ATTACHMENTS
1. Cost of Service Analysis by MSW Consultants for the City of Glendale
2. Rate Adjustment Table
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M O T I O N
Moved by Council Member ________________________________, seconded by Council Member __________________________________, that the Council of the City of Glendale authorizes staff to commence public notification and public hearing process in compliance with Proposition 218 for the purposes of considering new Solid Waste Collection Rates for Single-Family and Small Multi-Family Customers.
Vote as follows:
Ayes:
Noes:
Absent:
Abstain:
F:FileNetCopy\Dorine\Council\motion authorizing commencement of Prop 218 Notice and Hearing process 222 of 249
Exhibit 1
SOLID WASTE COST OF SERVICE STUDY
[FINAL DRAFT]
SEPTEMBER 7, 2022
PREPARED BY
SOLID WASTE CONSULTANTS
TO LOCAL GOVERNMENT
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PAGE INTENTIONALLY LEFT BLANK
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SOLID WASTE RATE STUDY
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY 1
2. APPROACH AND LIMITATIONS 7
2.1 STUDY APPROACH 7
2.2 LIMITATIONS 7
3. FINANCIAL PLAN 8
3.1 COMPARISON OF PROJECTED REVENUES WITH REVENUE REQUIREMENT 8
3.2 PROJECTED OPERATING RESULTS IF RATES ARE NOT ADJUSTED 8
3.3 PROJECTED OPERATING RESULTS WITH PROPOSED RATE ADJUSTMENTS 10
3.4 PROJECTED LONG-TERM OPERATING RESULTS WITH PROPOSED RATE ADJUSTMENTS 11
4. RATE DESIGN 13
4.1 REVENUE REQUIREMENT 13
4.2 RATE DESIGN METHOD 13
4.3 RATE DESIGN CALCULATIONS 14
4.4 PROJECTED RATE REVENUE BASED ON PROPOSED RATE ADJUSTMENTS 18
5. PERCENT OF CUSTOMERS AFFECTED 22
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Table of Tables
Table 1 – Proposed Monthly Rates .................................................................................................... 5 Table 2 – Projected Operating Results – Without Rate Adjustments .............................................. 8 Table 3 – Projected Capital Expenditures .......................................................................................... 9 Table 4 – Analysis of Cash Without Rate Adjustments ..................................................................... 9 Table 5 – Projected Operating Results – With Rate Adjustments .................................................. 11 Table 6 – Analysis of Cash With Proposed Rate Adjustment ......................................................... 11 Table 7 – Projected Revenue Requirements ................................................................................... 13 Table 8 – Allocated Rate Revenue Target ........................................................................................ 14 Table 9 –Operating Cost Statistics ................................................................................................... 16 Table 10 – Direct Cost for Each Level of Service ............................................................................. 17 Table 11 – Indirect Cost and Sum of Total Cost for Each Level of Service ..................................... 18 Table 12 – Summary of Automated Cart Rate Revenue ................................................................. 19 Table 13 – Summary of Frontload Bin Rate Revenue ..................................................................... 20 Table 14 – Summary of Rate Revenue and Reconciliation to Revenue Requirement .................. 21 Table 15 – Percent of Customers Affected ...................................................................................... 22
Table of Charts
Chart 1 – Rate Comparison – Monthly Rate for Single-family Collection Service ........................... 6 Chart 2 – Projected Operating Results Without Rate Adjustments ............................................... 10 Chart 3 – Projected Operating Results With Rate Adjustments .................................................... 12
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1. EXECUTIVE SUMMARY
The City generates revenue to pay for its solid waste collection service costs through rates charged to its residential customers. The City separately records its revenues and expenses for its solid waste operations in the solid waste enterprise fund. The solid waste enterprise fund maintains a cash balance to fund its ongoing ope rations. The revenues of the solid waste enterprise fund are intended to fully cover the City’s current and future solid waste operating and capital costs, and maintain its cash balance. Although the City’s operating costs have increased due to inflation, and other significant factors, the City has not increased the solid waste rates it charges to its customers since 2010.
In addition to solid waste collection service, the City provides citywide street sweeping service, and citywide bulky item collection (including public right -of-way collection) . The City also fulfills several other responsibilities such as oversight of the Glendale Recycling Center, customer outreach and educ ation, CalRecycle regulatory compliance, and maintenance of the closed Brand Park Landfill.
Significant Factors Driving Cost Increases
China Ban on Recyclables
At the beginning of 2018, China reduced the level of acceptable contamination in the recyclable material it received, and limited the type of recyclable materials it would accept. As a result, the worldwide market value of recyclables decreased significantly, reducing the revenue that solid waste service providers (including the City) previously used to offset their operating costs. This market disruption continues to create upward pressure on the City’s operating costs.
Commercial Franchising
The City recently implemented significant changes to the solid waste collection services it provides in the City . In December 2021, the City implemented a franchise system for businesses, and for large multi -family complexes with five (5) or more units. Under the franchise system, four (4) private haulers now provide exclusive collection service in four (4) separate geographic areas of the City. The City is now only responsible to collect waste and recyclables from single -family customers, and from small multi-family customers with two (2) to four (4) dwelling units.
In previous years, rates for residential collection services have not been set at a rate to fully recover costs associated with those services. Furthermore, the rates for residential and multi-family of 2-4 units have not changed since 2010. The reduction in the City’s overall solid waste customer base brought about by franchising the business and large multi-family 227 of 249
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customer sectors has resulted in the City having fewer customers over which it is able to allocate its fixed costs. This has resulted in additional upward pressure on the cost per unit for the remaining residential customers.
SB 1383
In addition to the significant change brought about by the franchising of the commercial waste sector, the City is in the midst of complying with the most sweeping changes to State solid waste regulations in the last thirty years. SB 1383 establishes statewide methane reduction targets, and is bringing about several fundamental changes to municipal solid waste management.
Under SB 1383, all local jurisdictions must arrange for the collection of organics, ensure that edible food is recovered, conduct education and outreach, purchase a certain amount of organic content products, secure acc ess to organic processing capacity, and conduct extensive monitoring, compliance and enforcement activities. As a result, solid waste rates throughout the State are increasing significantly.
Closure of Scholl Canyon Landfill
The Scholl Canyon Landfill is expected to permanently close around December 2025. After the landfill closes, the City’s trucks will be required to travel farther to empty their loads, and may be required to use a disposal facility with a higher tipping fee. As a result, the City expects it will be required to purchase two additional route vehicles, and incur additional operating costs to use a more distant landfill. These expected additional operating costs will create additional upward pressure on the City’s solid waste rates.
Industry Trends
Additionally, there are several current trends in the solid waste industry that are creating extraordinary cost increases. These trends include shortages of refuse truck drivers, supply chain delays in the purchase of trucks, and increased costs for raw materials such as steel used to manufacture trucks and containers.
Required Rate Adjustments
Operating Cash
As a result of the impact of these industry trends, the China Ban, the cost of complying with SB 1383, and the divestiture of its business and large multi-family operations, the revenue and cost structure of the City’s solid waste enterprise fund has changed significantly. To meet the current 228 of 249
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and future financial obligations of the solid waste enterprise fund, the City must increase the rates it charges to its single family and small multi-family residential customers. If the City does not increase current collection rates, and rates remain at their current levels, the cash balance in the enterprise fund will be completely depleted in early FY 2024 (July to September 2023).
Collection Rates
To fully fund the City’s solid waste operations over the next five years, the City’s collection rates must be increased on average by approximately 95% on January 1, 2023, followed by annual increases of 25% and 25% in July of 2023, and July 2024, respectively. In July 2025, 2026 and 2027, collection rates will need to be increased by 8% each year.
In addition, the City’s rates, which have not increased since 2010, do not accurately reflect the City’s current cost of service. As a result, the initial rate adjustment on January 1, 2023, will restructure the rate schedule to ensure that the rates more accurately reflect the City’s actual cost of service. As a result, not all customers will receive the same initial rate adjustment. For example, as shown in Table 1 on page 5, single-family residential customers with a 64-gallon container will initially receive a 150% increase. However, single-family customers with a 96- gallon container will initially receive an 82% increase. After the rates are restructured in January 2023, customer rates will be adjusted across the board by the same percent each year on July 1st. Table 1 on page 5 shows the current and proposed rates for customers with most common levels of service. The City is seeking approval of these rates for the next five years.
Although the City’s rates need to be significantly increased, the same trends that are creating upward pressure on the City’s rates are also impacting all other jurisdictions in California. Even after the City’s rates are adjusted, they are expected to be reasonable in relation to rates for similar solid waste collection service in other jurisdictions. A comparison of the City’s single- family rate to those in other jurisdictions is shown in Chart 1 on page 6.
Proposition 218
The City’s collection rates are subject to Article XIII D, Section 6 of the California Constitution (Proposition 218). When setting property-related user fees (such as solid waste collection rates), local jurisdictions must satisfy the following requirements:
• Revenues derived from the fee or charge must not exceed the funds required to provide the property-related service;
• Revenues derived from the fee or charge must not be used for any purpose other than that for which the fee is imposed;
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• The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership must not exceed the proportional cost of the service attributable to the parcel.
The City is required to set a public ‘majority protest’ hearing, and provide all customers and property owners with at least 45 days prior notice of the proposed rates. Unless a majority of customers object to the proposed rates, the City Council may adopt the proposed rates at the public hearing upon a majority vote.
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Table 1 – Proposed Monthly Rates
Description Current Rate
Proposed
Rate Effective
January 1,
2023
Proposed
Rate Effective
July 1, 2023
Proposed
Rate Effective
July 1, 2024
Proposed
Rate Effective
July 1, 2025
Proposed
Rate Effective
July 1, 2026
Proposed
Rate Effective
July 1, 2027
Automated Cart Service - Single Family
Monthly Rate Standard 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $17.58 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 150% 25% 25% 8% 8% 8%
Monthly Rate - Standard 96 gallon cart $18.34 $33.35 $41.69 $52.11 $56.28 $60.78 $65.64 Adjustment Amount $15.01 $8.34 $10.42 $4.17 $4.50 $4.86 Adjustment Percent 82% 25% 25% 8% 8% 8%
Automated Cart Service - Multi-family 2-4 unts
Monthly Rate - Standard 64 gallon cart $14.82 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $14.48 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 98% 25% 25% 8% 8% 8%
Monthly Rate - Standard 96 gallon cart $18.34 $33.35 $41.69 $52.11 $56.28 $60.78 $65.64 Adjustment Amount $15.01 $8.34 $10.42 $4.17 $4.50 $4.86 Adjustment Percent 82% 25% 25% 8% 8% 8%
Monthly Rate - Additional 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $17.58 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 150% 25% 25% 8% 8% 8%
Front Loading Bin Service - MFR 2-4 units
Monthly Rate - One cubic yard bin 1/week $33.00 $89.17 $111.46 $139.33 $150.48 $162.52 $175.52 Adjustment Amount $56.17 $22.29 $27.87 $11.15 $12.04 $13.00 Adjustment Percent 170% 25% 25% 8% 8% 8%
Monthly Rate - Two cubic yard bin 1/week $45.35 $114.74 $143.42 $179.28 $193.62 $209.11 $225.84 Adjustment Amount $69.39 $28.68 $35.86 $14.34 $15.49 $16.73 Adjustment Percent 153% 25% 25% 8% 8% 8%
Monthly Rate - Three cubic yard bin 1/week $58.15 $140.31 $175.39 $219.24 $236.78 $255.72 $276.18 Adjustment Amount $82.16 $35.08 $43.85 $17.54 $18.94 $20.46 Adjustment Percent 141% 25% 25% 8% 8% 8%
Front Loading Bin Service - MFR 2-4 units - Additional Pickups Monthly Rate - One cubic yard bin 1/week $22.63 $89.17 $111.46 $139.33 $150.48 $162.52 $175.52 Adjustment Amount $66.54 $22.29 $27.87 $11.15 $12.04 $13.00 Adjustment Percent 294% 25% 25% 8% 8% 8%
Monthly Rate - Two cubic yard bin 1/week $22.63 $114.74 $143.42 $179.28 $193.62 $209.11 $225.84 Adjustment Amount $92.11 $28.68 $35.86 $14.34 $15.49 $16.73 Adjustment Percent 407% 25% 25% 8% 8% 8%
Monthly Rate - Three cubic yard bin 1/week $22.63 $140.31 $175.39 $219.24 $236.78 $255.72 $276.18 Adjustment Amount $117.68 $35.08 $43.85 $17.54 $18.94 $20.46 Adjustment Percent 520% 25% 25% 8% 8% 8%
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Chart 1 – Rate Comparison – Monthly Rate for Single-family Collection Service
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2. APPROACH AND LIMIT A TIONS
2.1 Study Approach
This cost of service study consists of a financial plan analysis, and a rate design analysis.
• Financial Plan Analysis – The ‘big picture.’ This analysis considers the total amount of current and projected operating and capital expenditures, available cash, any planned debt financing, and required debt service coverage requirements. The result of this analysis is the projected revenue requirement, which is matched with the projected rate revenues from the proposed rates. This ensures that the City will generate sufficient revenues to meet its financial obligations.
• Rate Design Analysis – This analysis identifies the cause-and-effect relationship between the activities undertaken and resources used to provide various levels of service. Rates are designed to reflect the cost of service and proportionality requirements of Proposition 218.
2.2 Limitations
The financial plan analysis is subject to certain limitations. The pro-forma projections in the financial plan are based on assumptions regarding future inflation, and planned capital expenditures, etc. There will usually be differences between projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Moreover, these projections were prepared for the sole use of the City for the purpose of analyzing the City’s solid waste rates. They are not intended to be used for any other purpose.
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3. FINANCIAL PLAN
3.1 Comparison of Projected Revenues with Revenue Requirement
The financial plan for the solid waste enterprise fund compares the projected rate revenues with the projected revenue requirement (the enterprise fund’s projected operating expenses net of any use of cash balance). The enterprise fund’s projected operating results were projected over a five-year period under two scenarios. Section 3.2 below shows the projected operating results assuming that rates are not adjusted and remain at current levels. Section 3.3 further below shows the projected operating results assuming that rates are adjusted to generate revenue that will meet the enterprise fund’s financial obligations over a five-year period.
3.2 Projected Operating Results if Rates are Not Adjusted
Table 2 below shows the operating results for the solid waste enterprise fund if rates are not adjusted. Table 2 shows that the enterprise fund is currently experiencing an annual shortfall, which is expected to grow significantly over the next five years, if rates are not adjusted.
Table 2 – Projected Operating Results – Without Rate Adjustments
Table 3 on the following page shows a breakdown by asset type of the projected capital expenditures included in the projected operating results.
Description Actual
FY 2020
Actual
FY 2021
Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Revenues:
Rate Revenue $17,397 $17,347 $11,404 $6,589 $6,654 $6,721 $6,788 $6,855 $6,923 Other Revenue 7,808 6,409 6,703 3,924 3,685 3,901 4,135 4,169 4,284 Total $25,204 $23,756 $18,108 $10,513 $10,340 $10,622 $10,922 $11,024 $11,208 Expenditures:
Labor $9,955 $8,649 $6,108 $9,147 $7,776 $7,907 $8,040 $8,175 $8,313 Vehicles 4,100 3,635 3,584 3,723 3,656 3,150 3,213 3,277 3,343 Disposal/Processing 5,925 7,552 6,301 7,000 7,000 8,000 8,717 9,434 9,434 Overhead 4,351 5,844 4,754 4,706 4,793 4,787 5,060 5,338 5,662 Total Operating Expenses $24,330 $25,681 $20,748 $24,576 $23,224 $23,844 $25,030 $26,225 $26,752 Operating Surplus/(Shortfall) 874 (1,925) (2,641) (14,064) (12,884) (13,222) (14,108) (15,201) (15,545) Capital Expenditures (111) 0 6,350 1,220 3,231 990 816 4,737 3,670 Total Expenditures $24,219 $25,681 $27,098 $25,796 $26,455 $24,834 $25,846 $30,962 $30,423 Total Surplus/(Shortfall) $985 ($1,925) ($8,991) ($15,284) ($16,116) ($14,212) ($14,924) ($19,938) ($19,215) (in 000s)
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Table 3 – Projected Capital Expenditures
Table 4 below analyzes the annual change in cash resulting from the projected annual shortfalls in the enterprise fund. Table 4 shows how the beginning cash balance is reduced by the annual shortfall. Table 4 shows that without adjusting its current rates, the enterprise fund is expected to deplete its cash balance sometime in early fiscal 2024 (probably July – September 2023).
Table 4 – Analysis of Cash Without Rate Adjustments
Chart 2 on the following page shows how the annual operating results are projected to change the balance in the enterprise fund’s operating cash over t he next five years if rates are not adjusted.
Description Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Sweepers $834 $1,244 $911
Route Vehicles 4,705 830 1,516 640 434 3,476 3,198
Medium Duty Vehicles 50 40 122 32 123
Containers 111 350 350 350 350 350 350
Land Improvements 650 0 0 0 0 0 0
Total Capital Expenditures $6,350 $1,220 $3,231 $990 $816 $4,737 $3,670 (in 000s)
Description Actual
FY 2020
Actual
FY 2021
Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Cash Reserve:
Beginning Cash $38,763 $35,621 $31,258 $24,800 $9,516 ($6,600) ($20,812) ($35,736) ($55,674) Operating Surplus/(Shortfall) 874 (1,925) (2,641) (14,064) (12,884) (13,222) (14,108) (15,201) (15,545) Capital Expenditures 111 0 (6,350) (1,220) (3,231) (990) (816) (4,737) (3,670) Other Changes to Cash (4,127) (2,438) 2,533 0 0 0 0 0 0 Ending Cash $35,621 $31,258 $24,800 $9,516 ($6,600) ($20,812) ($35,736) ($55,674) ($74,889) (in 000s)
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Chart 2 – Projected Operating Results Without Rate Adjustments
The red and blue bars in Chart 2 represent the relationship between operating expenses and current revenues, respectively. These show how the annual shortfall reduces the operating cash (green line) over time. Chart 2 graphically shows how, if rates are not adjusted, the cash balance in the solid waste enterprise fund will be completely depleted sometime during fiscal 2024.
3.3 Projected Operating Results with Proposed Rate Adjustments
Table 5 on the following page shows the operating results for the solid waste enterprise fund if rates are adjusted. (Table 5 is comparable to Table 2, which shows the projected operating results without the rate adjustments). Table 5 shows that, if rates are adjusted, the enterprise fund will start to generate a surplus beginning in fiscal 2026.
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Table 5 – Projected Operating Results – With Rate Adjustments
Table 6 below analyzes the annual change in operating cash resulting from the projected annual shortfalls and surpluses in the enterprise fund assuming that rates are adjusted. (Table 6 is comparable to the analysis of cash balances in Table 4, which shows the impact on cash balances if rates were not adjusted). Table 6 shows that, if rates are adjusted, the cash balance in the enterprise fund is expected to decrease significantly in fiscal years 2023 and 2024, and range between approximately $3.8 million and $6.2 million over the following fiscal years.
Table 6 – Analysis of Cash With Proposed Rate Adjustment
3.4 Projected Long-term Operating Results with Proposed Rate Adjustments Chart 3 on the following page shows how the annual operating results are projected to change the balance in the enterprise fund’s operating cash over the next five years if rates are adjusted. (Chart 3 is comparable to Chart 2, which showed the projected operating results if rates and tip fees were not adjusted). Chart 3 shows how, if rates are adjusted, the cash balance in the solid Description Actual
FY 2020
Actual
FY 2021
Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Revenues:
Rate Revenue $17,397 $17,347 $11,404 $9,718 $16,221 $20,477 $22,335 $24,362 $26,571 Other Revenue 7,808 6,409 6,703 3,924 3,685 3,901 4,135 4,169 4,284 Total $25,204 $23,756 $18,108 $13,642 $19,906 $24,379 $26,470 $28,531 $30,856 Expenditures:
Labor $9,955 $8,649 $6,108 $9,147 $7,776 $7,907 $8,040 $8,175 $8,313 Vehicles 4,100 3,635 3,584 3,723 3,656 3,150 3,213 3,277 3,343 Disposal/Processing 5,925 7,552 6,301 7,000 7,000 8,000 8,717 9,434 9,434 Overhead 4,351 5,844 4,754 4,706 4,793 4,787 5,060 5,338 5,662 Total Operating Expenses $24,330 $25,681 $20,748 $24,576 $23,224 $23,844 $25,030 $26,225 $26,752 Operating Surplus/(Shortfall) 874 (1,925) (2,641) (10,934) (3,318) 535 1,440 2,306 4,103 Capital Expenditures (111) 0 6,350 1,220 3,231 990 816 4,737 3,670 Total Expenditures $24,219 $25,681 $27,098 $25,796 $26,455 $24,834 $25,846 $30,962 $30,423 Total Surplus/(Shortfall) $985 ($1,925) ($8,991) ($12,154) ($6,550) ($455) $623 ($2,431) $433 (in 000s)
Description Actual
FY 2020
Actual
FY 2021
Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Cash Reserve:
Beginning Cash $38,763 $35,621 $31,258 $24,800 $12,646 $6,096 $5,641 $6,264 $3,833 Operating Surplus/(Shortfall) 874 (1,925) (2,641) (10,934) (3,318) 535 1,440 2,306 4,103 Capital Expenditures 111 0 (6,350) (1,220) (3,231) (990) (816) (4,737) (3,670) Other Changes to Cash (4,127) (2,438) 2,533 0 0 0 0 0 0 Ending Cash $35,621 $31,258 $24,800 $12,646 $6,096 $5,641 $6,264 $3,833 $4,267 (in 000s)
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waste enterprise fund will be positive over the next five years. Chart 3 shows that, assuming rates are adjusted, the enterprise fund will be able to meet its current and future financial obligations.
Chart 3 – Projected Operating Results With Rate Adjustments
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4. RA TE DESIGN
In this analysis, cost-based collection rates were designed for each level of service to achieve the revenue requirement. Rates were designed by identifying the ‘cause-and-effect’ relationship between the activities or use of resources (cost drivers), and the resulting costs incurred. As a result, the individual customer rates reflect the cost of service and proportionality requirements of Proposition 218.
4.1 Revenue Requirement
The revenue requirement is the total rate revenue that the enterprise fund must generate to meet its annual financial obligations. These obligations include covering its operating and capital expenditures, and maintaining its cash balance. The revenue requirement is comprised of operating and maintenance costs, and rate-funded capital expenditures, net of any other or non- rate revenues. Non-rate revenues include items such as grants, interest income, and AB 939 Fees, etc. The revenue requirement is decreased in years when the City uses its cash balance to help fund its operations; the revenue requirement is increased in years when the City increases its cash balance. Table 7 below shows the enterprise fund’s projected revenue requirements over the next five years. The annual revenue requirements in Table 7 are derived using the total annual expenditures and other revenue in Table 5, and the annual change in cash in Table 6.
Table 7 – Projected Revenue Requirements
4.2 Rate Design Method
Cost-based collection rates were designed by identifying the cost types associated with each of these cost ‘drivers’:
• Route Operating Cost - the time it takes to travel from stop to stop in the service area.
This cost was allocated among customers based on the number of pickups. For example, a multi-family customer with three bin pickups per week is allocated three times as much of this cost as a customer with one pickup per week.
Description Actual
FY 2020
Actual
FY 2021
Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Revenue Requirement
Total Expenditures $24,219 $25,681 $27,098 $25,796 $26,455 $24,834 $25,846 $30,962 $30,423 Increase/(Decrease) in Cash ($12,154) ($6,550) ($455) $623 ($2,431) $433 Other Revenue (3,924) (3,685) (3,901) (4,135) (4,169) (4,284) Total Rate Revenue Requirement $9,718 $16,221 $20,477 $22,335 $24,362 $26,571 (in 000s)
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• Disposal/Processing Tip Fe e Cost – the cost of fees per ton incurred at disposal and processing sites. This cost was allocated among customers based on the amount of container capacity serviced per week. This is because the amount of container capacity serviced per week is a reasonable measure of the relative weight of waste collected and delivered to the landfill.
• Overhead – Indirect costs such as buildings, utilities, general and administrative costs were allocated proportionately based on the amount of direct cost allocated to each level of service.
4.3 Rate Design Calculations
Table 8 below, and Table 9, on the following pages show the 10 steps used to calculate the proposed cost-based rates according to the rate design method.
Table 8 – Allocated Rate Revenue Target
Column A B
Description Projected
FY 2023
Percent of
Total
Expenditures
Total Expenditures:
1 Labor $9,146,655
2 Vehicles 4,943,469
3 Subtotal - Route Operating Cost 14,090,124 54.62%
4 Disposal/Processing 7,000,000 27.14%
5 Overhead 4,706,259 18.24%
6 Total Expenditures $25,796,383 100.00%
7 Total Expenditures $25,796,383
8 Deduct Other Income (3,923,800)
9 Adjust for Increase (Decrease) in Cash (12,154,176)
10 Add 1/2 year new rate revenue due to mid
year rate adj 3,129,656
11 Total Annual Rate Revenue Target $12,848,063
Allocated Revenue Requirement:
12 Route Operating Cost $7,017,682 54.62%
13 Disposal/Processing 3,486,397 27.14%
14 Overhead 2,343,984 18.24%
15 Total Allocated Rate Revenue Target $12,848,063 100.00% Step 3 - Allocate Total Revenue Target to Cost Pools based on Percent of Total Expenditures
Row
Step 1 - Organize Total Cost into Cost Pools (Route Operating; Disposal/Processing; and Overhead)
Step 2 - Determine Total Annual Revenue Target
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Table 8 shows how the rate revenue target for the initial rates is calculated. For the initial rates only, the rate revenue target is different fro m the revenue requirement. The revenue requirement is the total amount of rate revenue needed for the enterprise fund to meet its financial obligations. For fiscal 2023, the revenue requirement is the $9,718,000 shown in Table
7. The annual rate revenue target that the initial rates are designed to generate is the $12,848,063 shown on Row 15 in Table 8.
Step 1 in Table 8 organizes the enterprise fund’s total expenditures for the base year (FY 2023) into three pools of cost: 1) Route Operating Cost, 2) Disposal/Processing Cost, and 3) Indirect Costs.
Step 2 in Table 8 shows the total amount of targeted annual rate revenue that the initial rates are designed to generate. However, because the initial rates will be implemented midway during the fiscal year (January 1, 2023), this total annual targeted revenue amount will not be fully achieved. It is an annual target amount of revenue the initial rates are designed to achieve. To determine the annual revenue target amount for the first adjustment, an amount equal to 50% the new rate revenue is added to the revenue requirement for fiscal 2023. This is the $3,129,656 amount on Row 10 in Table 8. The total annual rate revenue target is $12,848,063 on Row 11 in Table 8.
Step 3 in Table 8 shows how the annual rate revenue target is allocated among the three cost pools based on their proportionate share of total expenditures. Table 8 also shows that Indirect Costs are 18.24% of total cost. This percentage will be used further below to assign indirect costs to the rates in Step 9 in Table 11.
Table 9 on the following page shows the operating cost statistics used to calculate the rates. Step 4 in Table 9 shows the calculation of the total number of gallons (on which Disposal/Processing Cost is assigned to the rates), and the total number of stops (on which Route Operating Cost is assigned to the rates). An equivalent stop factor was used to increase the weight of the stops for front loading bin service to reflect the fact that front loader routes take more time per stop than automated side loader routes.
Step 5 in Table 9 shows the calculation of the average Disposal/Processing Cost per Gallon, and the average Route Operating Cost per stop. The average Disposal/Processing Cost per Gallon is derived by dividing the Annual Disposal/Processing Cost Revenue Target (from line 13 of Table 8) by the total number of gallons per year. The average Route Operating Cost per stop is derived by dividing the Annual Route Operating Cost (from line 12 of Table 8) by the total number of stops per year.
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Table 9 –Operating Cost Statistics
Table 10 on the following page shows the calculation of the Disposal/Processing Cost, and the Route Operating Cost, for each level of service. Step 6 in Table 10 calculates the monthly Disposal/Processing Cost per unit for each level of service by multiplying the average Disposal/Processing Cost per gallon by the gallons per month.
Step 7 in Table 10 calculates the monthly Route Operating Cost per unit for each level of service by multiplying the average Route Operating Cost per Stop by the stops per month. Step 8 in Table 10 calculates the direct cost per unit by combining the Disposal/Processing Cost per unit and the Route Operating Cost per unit.
Column A B C D E F G
Description Gallons
per Unit
Number
of Units
Gallons per
Month
Gallons per
Year
Number
of Stops
per Month
Stop
Adjustment
Factor
Stops per
Year
Automated Cart Service - Single Family
1 Standard 64 gallon cart 64 5,333 1,479,019 17,748,224 23,110 1 277,316 2 Standard 96 gallon cart 96 18,691 7,775,456 93,305,472 80,994 1 971,932 Automated Cart Service - Multi-family 2-4 unts
3 Standard 64 gallon cart 64 8,594 2,383,403 28,600,832 37,241 1 446,888 4 Standard 96 gallon cart 96 266 110,656 1,327,872 1,153 1 13,832 5 Additional 64 gallon cart 64 194 53,803 645,632 841 1 10,088 Front Loading Bin Service - MFR 2-4 units
6 One cubic yard bin 1/week 202 56 49,019 588,224 243 3 8,736 7 Two cubic yard bin 1/week 404 123 215,332 2,583,984 533 3 19,188 8 Three cubic yard bin 1/week 606 24 63,024 756,288 104 3 3,744 Front Loading Bin Service - Additional Pickups
9 One cubic yard bin 1/week 202 6 5,252 63,024 26 3 936 10 Two cubic yard bin 1/week 404 6 10,504 126,048 26 3 936 11 Three cubic yard bin 1/week 606 7 18,382 220,584 30 3 1,092 12 Total 33,300 12,163,849 145,966,184 144,300 1,754,688 Step 5 - Use Allocated Revenue Requirement to Calculate Average Disposal Cost per Gallon; Average Route Operating Cost per Stop Average Disposal Cost per Gallon
13 Annual Disposal/Processing Revenue Requirement $3,486,397 (from Row 13 in Step 3)
14 Gallons per Year 145,966,184
15 Disposal/Processing Revenue Requirement per Gallon $0.0239 Average Route Operating Cost per Stop
16 Annual Route Operating Revenue Requirement $7,017,682 (from Row 12 in Step 3)
17 Stops per Year 1,754,688
18 Annual Route Operating Revenue Requirement per Stop $4.00 Step 4 - Calculate Total Number of Annual Gallons and Stops Row
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Table 10 – Direct Cost for Each Level of Service
Table 11 on the following page calculates the indirect cost per unit, and summarizes the cost per unit of all three types of cost to arrive at the cost-based rate for each level of service. Step 9 calculates the indirect cost per unit based on indirect cost as a proportionate share of total cost from Row 14 of Table 8. Step 10, the final step, combines the cost per unit of the Disposal/Processing Cost, Route Operating Cost, and the Indirect Cost to arrive at the cost per unit for each level of service. These cost per unit amounts are found in the proposed monthly rates in Table 1, and are used to recalculate the annual rate revenue in Table 12 and Table 13.
Column A B C D E F G H I
Description Gallons
per Unit
Gallons
per Month
per Unit
Cost per
Gallon
Disposal
Processing
Cost per
Month
Equivalent
Stops per
Unit
Stops per
Unit per
Month
Cost per
Stop
Route
Operating
Cost per
Month
Total Direct
Costs
Step 8 - Sum
of Disposal
and Route
Operating
Cost per
month
Automated Cart - Single Family
1 Standard 64 gallon cart 64 277 $0.0239 $6.62 1 4.33 $4.00 $17.33 $23.95 2 Standard 96 gallon cart 96 416 0.0239 9.94 1 4.33 4.00 17.33 27.27 Automated Cart - Multi-family 2-4 units
3 Standard 64 gallon cart 64 277 0.0239 6.62 1 4.33 4.00 17.33 23.95 4 Standard 96 gallon cart 96 416 0.0239 9.94 1 4.33 4.00 17.33 27.27 5 Additional 64 gallon cart 64 277 0.0239 6.62 1 4.33 4.00 17.33 23.95 Front Loading Bin - MFR 2-4 units
6 One cubic yard bin 1/week 202 875 0.0239 20.91 3 13.00 4.00 51.99 72.90 7 Two cubic yard bin 1/week 404 1,751 0.0239 41.81 3 13.00 4.00 51.99 93.81 8 Three cubic yard bin 1/week 606 2,626 0.0239 62.72 3 13.00 4.00 51.99 114.71 Front Loading Bin - Additional Pickups
9 One cubic yard bin 1/week 202 875 0.0239 20.91 3 13.00 4.00 51.99 72.90 10 Two cubic yard bin 1/week 404 1,751 0.0239 41.81 3 13.00 4.00 51.99 93.81 11 Three cubic yard bin 1/week 606 2,626 $0.0239 $62.72 3 13.00 $4.00 $51.99 $114.71 Row
Step 6 - Calculate Disposal/Processing cost per
month for each level of service
Step 7 - Calculate Route Operating Cost per
Month for each level of service
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Table 11 – Indirect Cost and Sum of Total Cost for Each Level of Service
4.4 Projected Rate Revenue based on Proposed Rate Adjustments
Table 12 on the following page, Table 13 on page 20, and Table 14 on page 21 show how the proposed rates, when extended by the number of customers at each level of service, meet the City’s annual projected revenue requirements in Table 7. Table 12 shows the recalculation of the revenue requirement for automated cart rates, Table 13 shows the recalculation of the revenue requirement for frontload bin rates, and Table 14 summarizes the total revenue requirement from each of these tables.
Table 12 shows that the rates implemented on January 1, 2023 would typically generate approximately $12,848,000 in annual revenue. However, because they are being implemented at the midpoint in the fiscal year, they are projected to only generate approximately $9,178,000 during fiscal 2023. This amount corresponds with the 2023 revenue requirement in Table 7.
Table 14 shows the average increase in revenue in each year. In FY 2023, the proposed rates are projected to increase annual revenue an average of 95%. In each of the fiscal years after FY 2023, the average annual growth in revenue includes an additional 1% to reflect the volume growth in the number of customers.
A B C D E F G
Total Direct
Costs
Indirect
cost as
percent of
total cost
Indirect
Cost per
month
Disposal
Processing
Cost per
Month
Route
Operating
Cost per
Month
Indirect
Cost per
month
Total Cost
of Service
per month
23.95 18.24% $5.35 $6.62 $17.33 $5.35 $29.30
27.27 18.24% 6.08 9.94 17.33 6.08 33.35
23.95 18.24% 5.35 6.62 17.33 5.35 29.30
27.27 18.24% 6.08 9.94 17.33 6.08 33.35
23.95 18.24% 5.35 6.62 17.33 5.35 29.30
72.90 18.24% 16.27 20.91 51.99 16.27 89.17
93.81 18.24% 20.93 41.81 51.99 20.93 114.74
114.71 18.24% 25.60 62.72 51.99 25.60 140.31
72.90 18.24% 16.27 20.91 51.99 16.27 89.17
93.81 18.24% 20.93 41.81 51.99 20.93 114.74
114.71 18.24% $25.60 $62.72 $51.99 $25.60 $140.31
Step 9 - Calculate Indirect cost per
month for each level of service
Step 10 - Summarize Dispoal/Processing,
Route Operatng and Indirect Cost per month
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Table 12 – Summary of Automated Cart Rate Revenue
Current
Rates
Proposed
Rates
Effective
January 1,
2023
Proposed
Rates
Effective
July 1, 2023
Proposed
Rates
Effective
July 1, 2024
Proposed
Rates
Effective
July 1, 2025
Proposed
Rates
Effective
July 1, 2026
Proposed
Rates
Effective
July 1, 2027
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Customer Count
Automated Cart Service - Single Family
Standard 64 gallon cart 5,333 5,333 5,386 5,440 5,494 5,549 5,604 Standard 96 gallon cart 18,691 18,691 18,878 19,067 19,258 19,451 19,646 Automated Cart Service - Multi-family 2-4 unts
Standard 64 gallon cart 8,594 8,594 8,680 8,767 8,855 8,944 9,033 Standard 96 gallon cart 266 266 268 270 272 274 276
Additional 64 gallon cart 194 194 196 198 200 202 204
Monthly Rates
Automated Cart Service - Single Family
Standard 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Standard 96 gallon cart 18.34 33.35 41.69 52.11 56.28 60.78 65.64 Automated Cart Service - Multi-family 2-4 unts
Standard 64 gallon cart 14.82 29.30 36.63 45.79 49.45 53.41 57.68 Standard 96 gallon cart 18.34 33.35 41.69 52.11 56.28 60.78 65.64 Additional 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Annual Rate Revenue
Automated Cart Service - Single Family
Standard 64 gallon cart $750,033 $1,875,102 $2,367,470 $2,989,171 $3,260,140 $3,556,465 $3,878,865 Standard 96 gallon cart 4,113,515 7,480,458 9,444,286 11,922,976 13,006,083 14,186,781 15,474,761 Automated Cart Service - Multi-family 2-4 unts
Standard 64 gallon cart 1,528,357 3,021,681 3,815,381 4,817,291 5,254,557 5,732,388 6,252,281 Standard 96 gallon cart 58,541 106,458 134,075 168,836 183,698 199,845 217,400 Additional 64 gallon cart 27,284 68,211 86,154 108,797 118,680 129,466 141,201 Total Annual Automated Cart Rate Revenue $6,477,731 $12,551,910 $15,847,366 $20,007,072 $21,823,157 $23,804,945 $25,964,508 Description
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Table 13 – Summary of Frontload Bin Rate Revenue
Current
Rates
Proposed
Rates
Effective
January 1,
2023
Proposed
Rates
Effective
July 1, 2023
Proposed
Rates
Effective
July 1, 2024
Proposed
Rates
Effective
July 1, 2025
Proposed
Rates
Effective
July 1, 2026
Proposed
Rates
Effective
July 1, 2027
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Customer Count
Front Loading Bin Service - MFR 2-4 units
One cubic yard bin 1/week 56 56 57 58 59 60 61
Two cubic yard bin 1/week 123 123 124 125 126 127 128
Three cubic yard bin 1/week 24 24 24 24 24 24 24
Front Loading Bin Service - Additional Pickups
One cubic yard bin 1/week 6 6 6 6 6 6 6
Two cubic yard bin 1/week 6 6 6 6 6 6 6
Three cubic yard bin 1/week 7 7 7 7 7 7 7
Total Customers 222 222 224 226 228 230 232
Monthly Rates
Front Loading Bin Service - MFR 2-4 units
One cubic yard bin 1/week $33.00 $89.17 $111.46 $139.33 $150.48 $162.52 $175.52 Two cubic yard bin 1/week 45.35 114.74 143.42 179.28 193.62 209.11 225.84 Three cubic yard bin 1/week 58.15 140.31 175.39 219.24 236.78 255.72 276.18 Front Loading Bin Service - Additional Pickups
One cubic yard bin 1/week 22.63 89.17 111.46 139.33 150.48 162.52 175.52 Two cubic yard bin 1/week 22.63 114.74 143.42 179.28 193.62 209.11 225.84 Three cubic yard bin 1/week $22.63 $140.31 $175.39 $219.24 $236.78 $255.72 $276.18 Annual Rate Revenue
Front Loading Bin Service - MFR 2-4 units
One cubic yard bin 1/week 22,176 59,920 76,239 96,974 106,540 117,014 128,481 Two cubic yard bin 1/week 66,937 169,356 213,409 268,920 292,753 318,684 346,890 Three cubic yard bin 1/week 16,747 40,410 50,512 63,141 68,193 73,647 79,540 Front Loading Bin Service - Additional Pickups
One cubic yard bin 1/week 1,629 6,420 8,025 10,032 10,835 11,701 12,637 Two cubic yard bin 1/week 1,629 8,261 10,326 12,908 13,941 15,056 16,260 Three cubic yard bin 1/week $1,901 $11,786 $14,733 $18,416 $19,890 $21,480 $23,199 Total Annual Frontload Bin Rate Revenue $111,019 $296,153 $373,244 $470,391 $512,151 $557,583 $607,008 Description
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Table 14 – Summary of Rate Revenue and Reconciliation to Revenue Requirement
Description Projected
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
Annual Automated Cart Rate Revenue $6,477,731 $12,551,910 $15,847,366 $20,007,072 $21,823,157 $23,804,945 $25,964,508 Annual Frontload Bin Rate Revenue 111,019 296,153 373,244 470,391 512,151 557,583 607,008 Total Annual Rate Revenue $6,588,750 $12,848,063 $16,220,610 $20,477,463 $22,335,308 $24,362,529 $26,571,515 Average Percent Increase in Rate Revenue
(includes 1% for customer growth after FY 2023 95% 26% 26% 9% 9% 9% Reconcile to Revenue Requirement:
Annual Rate Revenue $12,848,063 $16,220,610 $20,477,463 $22,335,308 $24,362,529 $26,571,515 Less: Revenue attributable to mid-year rate adjustment ($3,129,656) Revenue Requirement $9,718,407 $16,220,610 $20,477,463 $22,335,308 $24,362,529 $26,571,515 247 of 249
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5. PERCENT OF CUSTOMERS AFFECTED
Table 15 below shows the current rate, and the rate proposed to become effective January 1, 2023 along with the amount of the increase and percent change. The right-hand column shows the portion of total customers that will be affected by each percent change of rate adjustment.
Table 15 – Percent of Customers Affected
Description Current Rate
Proposed Rate
Effective
January 1, 2023
Adjustment
Amount per
Month
Percent
Adjustment
Number of
Customers
Affected
Percent of Total
Customers
Affected
Automated Cart Service - Single Family
Standard 64 gallon cart $11.72 $29.30 $17.58 150% 5,333 16.0% Standard 96 gallon cart $18.34 $33.35 $15.01 82% 18,691 56.1% Automated Cart Service - Multi-family 2-4 unts
Standard 64 gallon cart $14.82 $29.30 $14.48 98% 8,594 25.8% Standard 96 gallon cart $18.34 $33.35 $15.01 82% 266 0.8% Additional 64 gallon cart $11.72 $29.30 $17.58 150% 194 0.6% Front Loading Bin Service - MFR 2-4 units
One cubic yard bin 1/week $33.00 $89.17 $56.17 170% 56 0.2% Two cubic yard bin 1/week $45.35 $114.74 $69.39 153% 123 0.4% Three cubic yard bin 1/week $58.15 $140.31 $82.16 141% 24 0.1% Front Loading Bin Service - Additional Pickups
One cubic yard bin 1/week $22.63 $89.17 $66.54 294% 6 0.0% Two cubic yard bin 1/week $22.63 $114.74 $92.11 407% 6 0.0% Three cubic yard bin 1/week $22.63 $140.31 $117.68 520% 7 0.0% Total 33,300 100.0%
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EXHIBIT 2 – RATE ADJUSTMENT TABLE
Description Current Rate
Proposed
Rate
Effective
January 1,
2023
Proposed
Rate
Effective
July 1, 2023
Proposed
Rate
Effective
July 1, 2024
Proposed
Rate
Effective
July 1, 2025
Proposed
Rate
Effective
July 1, 2026
Proposed
Rate
Effective
July 1, 2027
Automated Cart Service - Single Family
Monthly Rate Standard 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $17.58 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 150% 25% 25% 8% 8% 8%
Monthly Rate - Standard 96 gallon cart $18.34 $33.35 $41.69 $52.11 $56.28 $60.78 $65.64 Adjustment Amount $15.01 $8.34 $10.42 $4.17 $4.50 $4.86 Adjustment Percent 82% 25% 25% 8% 8% 8%
Automated Cart Service - Multi-family 2-4 unts
Monthly Rate - Standard 64 gallon cart $14.82 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $14.48 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 98% 25% 25% 8% 8% 8%
Monthly Rate - Standard 96 gallon cart $18.34 $33.35 $41.69 $52.11 $56.28 $60.78 $65.64 Adjustment Amount $15.01 $8.34 $10.42 $4.17 $4.50 $4.86 Adjustment Percent 82% 25% 25% 8% 8% 8%
Monthly Rate - Additional 64 gallon cart $11.72 $29.30 $36.63 $45.79 $49.45 $53.41 $57.68 Adjustment Amount $17.58 $7.33 $9.16 $3.66 $3.96 $4.27
Adjustment Percent 150% 25% 25% 8% 8% 8%
Front Loading Bin Service - MFR 2-4 units
Monthly Rate - One cubic yard bin 1/week $33.00 $89.17 $111.46 $139.33 $150.48 $162.52 $175.52 Adjustment Amount $56.17 $22.29 $27.87 $11.15 $12.04 $13.00 Adjustment Percent 170% 25% 25% 8% 8% 8%
Monthly Rate - Two cubic yard bin 1/week $45.35 $114.74 $143.42 $179.28 $193.62 $209.11 $225.84 Adjustment Amount $69.39 $28.68 $35.86 $14.34 $15.49 $16.73 Adjustment Percent 153% 25% 25% 8% 8% 8%
Monthly Rate - Three cubic yard bin 1/week $58.15 $140.31 $175.39 $219.24 $236.78 $255.72 $276.18 Adjustment Amount $82.16 $35.08 $43.85 $17.54 $18.94 $20.46 Adjustment Percent 141% 25% 25% 8% 8% 8%
Front Loading Bin Service - MFR 2-4 units - Additional Pickups Monthly Rate - One cubic yard bin 1/week $22.63 $89.17 $111.46 $139.33 $150.48 $162.52 $175.52 Adjustment Amount $66.54 $22.29 $27.87 $11.15 $12.04 $13.00 Adjustment Percent 294% 25% 25% 8% 8% 8%
Monthly Rate - Two cubic yard bin 1/week $22.63 $114.74 $143.42 $179.28 $193.62 $209.11 $225.84 Adjustment Amount $92.11 $28.68 $35.86 $14.34 $15.49 $16.73 Adjustment Percent 407% 25% 25% 8% 8% 8%
Monthly Rate - Three cubic yard bin 1/week $22.63 $140.31 $175.39 $219.24 $236.78 $255.72 $276.18 Adjustment Amount $117.68 $35.08 $43.85 $17.54 $18.94 $20.46 Adjustment Percent 520% 25% 25% 8% 8% 8%
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