Solid Waste Cost of Service and Rate Study
City Council Hearing – June 20, 2023
Cost of Service Study - Background
Long Beach Solid Waste Rates
• Did not propose rate adjustments in 2020 or 2021 due to COVID-19 • Proposition 218 hearing August 23, 2022
• Phase 1 - September 1, 2022 adjustment - approved
• Single Family – 19%
• Commercial – 29%
• Phase 2 - Proposed January 1, 2023 adjustment
• Proposed Single Family – 19%
• Proposed Commercial – 40%
• City Council asked for 2nd part of rate adjustment to be phased-in 2 Cost of Service Study – Effects of Delayed Rate Adjustment Effects of January’s Delayed Rate Adjustment
• Approximately $5M lost revenue, year to date, in FY 23 • Approximately $840K in lost revenue every month since January Current Phased-In Rate Adjustment Proposal
• July 1, 2023
• Single Family 11%
• Commercial 24%
• October 1, 2023
• Single Family 11%
• Commercial 24%
3 Refuse Fund Reserves
• Refuse Fund reserves have decreased every year, except for FY 20 due to the solid waste rate adjustment that took place that year. Bad debt and rising costs, such as increased disposal costs, have resulted in year- end deficits
• Current Refuse Fund reserve balance approximately 1.5 months 4 Cost of Service Study - Findings
• Existing Rates do not generate sufficient revenue to cover cost of service
• Without a rate adjustment, the Refuse Fund may be exhausted by early FY 24
• State-mandated diversion programs require additional funding for implementation (SB1383 – Organics Diversion)
• Bad Debt has dramatically increased since FY 20
• Study assumes operation will finish 4.5% under budget each year 5 Projected Operating Reserve Fund Balance
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Refuse Fund – Bad Debt
• The dramatic increase in Bad Debt, since FY 20, has contributed to the Refuse Fund reserves not being at a healthy level
• Refuse utility was not included in Federal assistance that was issued to other utilities
• Refuse collection must be provided regardless of whether payment is made by rate-payers
8 Increases to Expenditures
INCREASES ASSOCIATED WITH SOLID WASTE COLLECTION
ITEM FY 20 FY 21 FY 22 FY 23
$ Increase
since FY 20
% Increases
since FY 20
Refuse Fund Expenditures Budget $52.5M $54.2M $58.8M $67M $14.5M 28% Fleet Budget $7M $7.7M $8.2M $10.9M $3.9M 56%
SERRF Budget $10.6M $10.8M $11M $11.7M $1.1M 10%
TI Budget $2.1M $2.6M $2.9M $2.7M $600K 29%
Personnel Budget $16.4M $16.6M $18.5M $21.1M $4.7M 29%
9 Disposal Costs
*potential rate
10 Proposed Rates – Single Family (96-gallon container) *effective 7/1/23
**effective 8/1/23
11 Proposed Rates – Commercial Accounts
*Does not include organics
**effective 7/1/23
Jurisdiction/ City
2 YD Bin
1X/wk
3 YD Bin
1X/wk
4 YD Bin
1X/wk
Long Beach - Current 142.84$ 183.26$ 287.37$ Pasadena N/A 196.06$ N/A
Long Beach - Proposed JUL '23 176.87$ 227.09$ 356.43$ Anaheim 232.16$ 260.18$ 294.83$
Long Beach - Proposed OCT '23 219.07$ 281.46$ 442.17$ Los Angeles* 274.19$ 295.73$ 317.27$
San Jose 306.71$ 343.80$ 380.88$
Burbank** 333.47$ 382.93$ 432.75$
Santa Barbara** 277.66$ 416.49$ 555.32$ Oakland** 568.55$ 775.48$ 973.30$
Torrance
Sacramento
City does not offer Commercial Services
City does not offer Commercial Services
Commercial Solid Waste Bins
12 Current and Future Services
Current Services Provided
• Solid Waste and Recycling collection
to approximately 118,000 accounts
on a minimum weekly basis
• Twelve Special (Bulky) Collections
• Hazardous Household Waste drop-off
• E-Waste Collection
• Waste Diversion Programs
• Public Education
Expanded Services to be
Provided
• Organics (food and green) waste
collection for Commercial accounts
• Administrative, Enforcement and
Education staffing to ensure
compliance with State laws (SB 1383)
• Food Recovery program –
enforcement, education and capacity
planning edible food generators and
food recovery agencies
13 FY 23 Support
FY 23 approved positions are required to meet State laws SB 1383 (Short-Lived Climate Pollutant: Organic Waste Methane Emission Reductions), AB 1826 (Mandatory Commercial Recycling) and AB 341 (Mandatory Organics Recycling) All Accounts
• Recycling contract
• 8 positions
• Administrative support
• Enforcement programs
• Education components
Commercial Accounts
• Staffing and operational
requirements for collection of
commercial organics waste:
• Refuse Operators – 8 FTE
• Refuse Supervisor – 1 FTE
• Operating Costs
14 Cost of Service – What is NOT included
• Residential Organics Collection – Single Family and Multi-Family • Phased implementation
• Operational Costs
• Positions
• Vehicles
• Disposal
• Rebalancing of current solid waste routes
• Cost of reloading and transportation of organic material to meet State diversion requirements
• Property to house additional staff and vehicles
• Another rate adjustment will be needed in 2024 to fund these costs 15 SB1383 – Implementation Impacts (Operational)
• Shortage of Candidates
• Class B drivers license
• Compensation
• Supply chain issues
• Solid Waste Collection Trucks
• 12-24 month lead time to acquire refuse vehicles
• ESB has chosen a different chassis than is used by current fleet of refuse vehicles due to availability, 13-14 month acquisition lead time • City Council approved a preliminary order of 10 trucks, for residential organics collection
• Carts
• Lack of local infrastructure for disposal of organic material 16 Current Challenges with Solid Waste Collection
Delays in Solid Waste Collection
Causes
• Staffing shortages
• Attrition
• Vacancies
• Injuries
Solutions
• Hiring incentive program
• Staff Recognition
• Job Fair
17 Proposition 218 Requirements
Proposition 218 requires a simply majority of 50 percent of the affected parcels, plus one. 118,512 notices of the proposed rate adjustments were mailed to all city-serviced solid waste property owners and customers in Long Beach. Absent a majority protest (i.e. 50 percent +1, or 59,257 protests), the City Council may approve the final adoption of the proposed rates at this hearing.
18 Recommendation
Receive the supporting documentation into the record; receive public comment pursuant to Proposition 218; direct the City Clerk to tabulate the written protests and report the results of the tabulation to the Mayor and City Council during the June 20, 2023 hearing; and, if a “majority protest” is not established, conclude the public hearing and adopt a Resolution establishing the Solid Waste Service Rates under a two-step rate adjustment. (Citywide)
Thank you
Dikran Melkonian
Manager, Environmental Services Bureau
Deputy Director, Public Works Department
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