{{section.number}}{{item.number}}
CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Solid Waste Collection Rates Update
1. Motion to note and file this report on the Solid Waste Collection Rates Update
COUNCIL ACTION
Item Type: Consent
Approved for June 25, 2024 calendar
EXECUTIVE SUMMARY
On January 31, 2023, the City Council passed a motion to restructure the rates for the solid waste collection system. At the time the City Council requested annual updates on the implementation of the new approved rate structure.
MSW Consultants developed the original Cost of Services Analysis (COSA) that was the basis for the 5-Year refuse rate adjustment plan approved by the City Council. MSW Consultants analyzed actual revenue and expenditures for FY 2023-24 to evaluate how they measured against the COSA projections and projected the future solvency of the fund.
MSW Consultants determined that actual expenditures are approximately 11.3% below and revenue is 0.5% below projections. With imminent significant costs projected, proceeding with the next July 1, 2024, adjustment is recommended by MSW Consultant per their memorandum to the City of Glendale dated June 17, 2024, and attached as Exhibit 1.
RECOMMENDATION
That the City Council approve note and file this report on the Solid Waste Collections Rate Update.
2{{section.number}}{{item.number}}
5 2
9 2
ANALYSIS
The City Council approved 5-years of rate adjustments, with the first having been applied on July 1, 2023, at various percentages dependent upon cart size, The remaining increases are scheduled to be applied on July 1st of years 2024, 2025, 2026 and 2027 at an increase rate of 45%, 25%, 10%, 10%, for all /any cart size, respectively.
The revenue from the rate increases do not exceed the funds required to provide the residential solid waste customers with solid waste collection service, (California Constitution, Article XIIID, Section 6(b)(1)), the revenue derived from the residential solid waste collection rates are not being used for any other purpose than that for which they are imposed (California Constitution, Article XIIID, Section 6(b)(2)), and the rates imposed do not exceed the proportionate cost of the services attributable to that parcel. (California Constitution, Article XIIID, Section 6(b)(3)).
Based on the MSW Consultant’s analysis of actuals and revenue, for FY 2023-24 revenue is projected to fall 0.5% or $80,000 lower than what was projected in the 2023 COSA.
This shortfall is the result of lower than anticipated revenue from residential refuse fees from delayed posting of payments under the new rates as well as a delay in payment of the host fee reimbursement from the County of Los Angeles. This was partially offset by higher than anticipated franchise fee revenue.
MSW Consultants projected expenditures to fall 11.4% or $3,222,000 lower than what was projected in the 2023 COSA. This shortfall means projected year-end expenditures will be approximately $25,141,438 instead of $28,365,098, due largely to lower than expected contractual services and salaries costs.
Contractual Services were lower than anticipated due to lower than projected disposal cost actuals for various materials such as refuse, organics, recyclables, and batteries.
Industrywide, tonnage produced from new organics programs specifically, has proven lower than anticipated and additional outreach is needed to boost overall participation in these new programs. Other factors include several high-cost programs such as the franchise hauler performance review, that were delayed until FY 2024-25 and implanted programs, such as the recycling app, that ultimately cost less than projected. In addition, salary costs were lower than anticipated due to vacancies.
Despite these variances from the COSA projection, the fund balance trend remains similar to the original COSA. Additionally, an annual budget deficit for FY 2024-25 of $7,520,000 is projected. Therefore, the consultant recommendation is for the City of Glendale to continue with the adjustment scheduled for July 1, 2024.
STAKEHOLDERS/OUTREACH
In conjunction with the original COSA and rate adjustments, extensive notification was provided to all residential refuse customers as required by state law.
FISCAL IMPACT
3{{section.number}}{{item.number}}
5 2
9 2
There is no fiscal impact associated with this report.
ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is not subject to the California Environmental Quality Act (“CEQA”) and, therefore, an environmental review is not required pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15272(a) and 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3 because CEQA does not apply to the establishment, modification, restructuring, or approval of rates and other charges by public agencies for purposes such as those set forth herein.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Do not approve a motion to note and file this report and provide direction to staff regarding residential refuse rates.
Alternative 2: The City Council may consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Daniel Hernandez, Interim Director of Public Works
Prepared by:
Orlando Urquidez Jr., Senior Public Works Management Analyst Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1. 2024 Memo from MSW Consultants on Glendale COSA Update
2. 2023 Glendale Cost of Services Study
3. Rate Adjustment Table