Solid Waste Consultants
To Local Government
41760 Ivy St., Suite #203
Murrieta California 92562
951.694.4001
www.msw-consultants.com 1 of 5
Memorandum
Date: June 18, 2024
To: Shea Eccleston - City of Glendale
From: David Davis - MSW Consultants
Subject: 2024 Mid-year review of 2023 Solid Waste Cost of Service Study Executive Summary
We compared the revenue and expense amounts for fiscal 2024 projected in the 2023 Cost of Service Analysis (COSA) with updated mid -year revenues and expenses for fiscal 2024.
Based on our review, we found that revenues for fiscal 2024 are expected to be approximately $683,000 lower than the amount projected . However, expenditures in fiscal 2024 are expected to be approximately $3,222,000 lower than the amount projected. As a result, the shortfall in fiscal 2024 is expected to be approximately $ 7,520,000 instead of $10,824,000.
The cash balance in fiscal 2024 was originally projected to be $5,753,000. However, due to the more favorable shortfall, the cash balance is expected to be $9,057,000.
Findings - Revenue
Revenues in fiscal 2024 are projected to be less than projected by approximately $80,000, or
0.5%, primarily due to:
• Residential refuse fees being lower than expected due to month of July being billed at the previous rates. The City bills in arrears.
• Franchise fees being higher than expected due to greater gross re ceipts from private haulers.
Exhibit 1
Solid Waste Consultants
To Local Government
41760 Ivy St., Suite #203
Murrieta California 92562
951.694.4001
www.msw-consultants.com 2 of 5
• Other revenues being lower tha n expected due to a delay in the receipt of a host fee reimbursement from the County of Los Angeles
A variance analysis of revenue for fiscal 2024 is shown below in Table 1.
Table 1 – Variance Analysis – Revenue
Recyclables state grant $50,000 $3,000 ($47,000) -94.0% State grants 0 30,000 30,000 NA
Merchant fee charges 0 (1,371) (1,371) NA
Commercial refuse fees 0 113,522 113,522 NA
Residential refuse fees 12,518,625 11,928,481 (590,144) -4.7% Commercial bin srv multi units 0 337,125 337,125 NA
Commercial bin srv business NA
Refuse bin drop off fees 0 30,116 30,116 NA
Sale of recyclables 0 72,000 72,000 NA
AB 939 fees 3,800,000 4,665,674 865,674 22.8%
Private hauler permit fees 44,000 2,776 (41,224) -93.7% Miscellaneous revenue 3,000 8,348 5,348 178.3%
Interest income 230,113 367,478 137,365 59.7%
Sales of property 15,000 63,818 48,818 325.5%
Host Fee Reimbursement 880,000 0 (880,000) -100.0%
Total $17,540,738 $17,620,966 $80,227 0.5%
Revenue Category FY 23-24
Updated Difference Percent
Difference
FY 23-24
Originally
Projected
Solid Waste Consultants
To Local Government
41760 Ivy St., Suite #203
Murrieta California 92562
951.694.4001
www.msw-consultants.com 3 of 5
Findings - Expenditures
Expenditures are projected to be less than projected by approximately $3,222,000 or 11.4%, primarily due to:
• Salaries being approximately $570,00 less than projected , and overtime being approximately $689,000 greater than projected, due to vacancies.
Contract services being approximately $3,933,000 less than projected. Contract services are projected to be less than projected due to:
• Processing costs for organic waste b eing approximately $1.1 million less tha n projected due to lower volumes and less participation in organics recycling than expected.
• Disposal costs being approximately $1.4 million less than projected due to lower than expected disposal volumes.
• Universal waste recycling costs being approximately $142,000 less than projected due to lower volumes of batteries and other electronic waste. • Legislative tracking databased and SB 1383 compliance audit costs bei ng approximately $133,000 less than projected due to cost being lower than estimated. • Franchise hauler performance review costs being approximately $ 75,000 less than projected that was delayed until fiscal 2025.
• Regulatory site compliance costs being approximately $220,000 less than projected. • Zero waste plan update costs being approximately $150,000 less than projected due to the project being postponed until after the Scholl Canyon Landfill closes.
A variance analysis of expenditures is shown on the following pages in Table 2.
Solid Waste Consultants
To Local Government
41760 Ivy St., Suite #203
Murrieta California 92562
951.694.4001
www.msw-consultants.com 4 of 5
Table 2 – Variance Analysis – Expenditures
Salaries $4,459,188 $3,888,989 ($570,199) -12.8%
Additional pay persable 8,423 9,631 1,208 14.3%
Additional pay non-pers 70,509 79,492 8,983 12.7%
Overtime 100,000 788,792 688,792 688.8%
Hourly wages 172,123 102,544 (69,579) -40.4%
Vacation and compensatory time 139,580 120,735 (18,845) -13.5% Sick leave 31,814 28,170 (3,645) -11.5%
OPEB Funding Exp 27,407 24,147 (3,259) -11.9%
Other benefits 13,410 130,239 116,829 871.2%
Life insurance 6,633 6,149 (484) -7.3%
Disability insurance 18,801 16,745 (2,056) -10.9%
Vision insurance 11,698 10,616 (1,082) -9.2%
Medical insurance 952,657 712,778 (239,879) -25.2%
Dental insurance 26,605 24,783 (1,821) -6.8%
Unemployment insurance 2,268 2,438 170 7.5%
Workers compensation insurance 510,611 454,910 (55,701) -10.9% Medicare 71,263 66,993 (4,271) -6.0%
PERS retirement 1,775,030 1,629,489 (145,542) -8.2%
PERS cost sharing (106,447) (96,480) 9,966 -9.4%
Salary charges in (out) 0 140 140
Auto allowance (592) 5,255 5,847 -988.2%
Contractual services 10,035,298 6,101,915 (3,933,383) -39.2% Advertising 0 462 462
Janitorial services 0 3,306 3,306
Postage 4,700 7,294 2,594 55.2%
Travel 2,000 2,000 0 0.0%
Laundry and towel service 18,500 15,962 (2,538) -13.7%
Training 76,500 76,500 0 0.0%
Computer software 0 2,700 2,700
Regulatory 157,200 157,200 0 0.0%
Membership and dues 6,000 8,010 2,010 33.5%
FY 23-24
Originally
Projected
Expense Category Difference Percent
Difference
FY 23-24
Updated
Solid Waste Consultants
To Local Government
41760 Ivy St., Suite #203
Murrieta California 92562
951.694.4001
www.msw-consultants.com 5 of 5
Table 2 – Variance Analysis – Expenditures (continued)
Recommendation
Although the enterprise fund ’s expenses are significantly less than projected, many of these variances are related to expenses that have been delayed and will be incurred in the ne ar future. Therefore, we recommend that the City continue with the 45% rate adjustment.
Office Supplies 10,000 8,199
General supplies 330,000 59,387 (270,613) -82.0%
Printing and graphics 6,000 33,753 27,753 462.5%
Uncollectible accounts 60,000 100,480 40,480 67.5%
Miscellaneous 3,100 15,769 12,669 408.7%
Utilities 72,180 49,871 (22,309) -30.9%
Cost allocation charge 852,924 852,924 0 0.0%
Fleet equipment rental charge 3,604,050 3,604,049 (1) 0.0% ITD service charge 722,614 748,650 26,036 3.6%
Building maint service charge 80,316 80,316 0 0.0%
Liability Insurance 460,293 406,381 (53,912) -11.7%
GWP Municipal Billing 481,553 481,553 0 0.0%
Capital outlay 1,790,000 1,790,000 0 0.0%
Equipment 2,525,000 2,525,000 0 0.0%
Construction
Asset capitalization 0 0 0
Furniture and equipment 45150 10,000 0 (10,000) -100.0% Maintenance & Operation 43050 (474,490) 0 474,490 -100.0% PERS vacant positions 42705 6,406 0 (6,406) -100.0%
Repairs to equipment 44100 77,500 0 (77,500) -100.0%
Small tools 45300 1,000 0 (1,000) -100.0%
Projected Underexpenditures (845,727) 0 845,727 -100.0% Total $28,365,098 $25,141,438 ($3,221,859) -11.4%
Expense Category Percent
Difference
FY 23-24
Updated Difference