PISMO BEACH
2025 Solid Waste Rate
Adjustment & New Rate
Adjustment Methodology
January 21 , 2025
Jordan Muratsuchi
Z3CONSULTING GROUP, INC.
RESOURCES • RESPECT• RESPONSIBILITY
A
Recommended Actions
Receive presentation on recommended adjustments to
solid waste rates effective January 1 , 2025, and new rate adjustment methodology.
y Conduct public hearing
y Adopt resolution authorizing recommended solid waste rates effective January 1 , 2025
y Approving Amendment #3 to Agreement with SCSS, incorporating the new rate adjustment methodology via Exhibit
SLIDE
1 Executive Summary
y Solid waste services are critical services and are required for health and safety as well as compliance with State laws. s The City's solid waste collection operations are contracted out to South County Sanitary Service (SCSS) and are funded through solid waste rates.
r Rate revenues are adjusted per the City's rate setting methodology — every 3 years based on SCSS' actual costs and otherwise annually by CPI .
y The City may authorize up to 5-years of solid waste rate adjustments at a time — there are no ongoing automatic adjustments outside of Council authorization.
SLI 2 DE Z3
Executive Summary
y Existing rate adjustment methodology is outdated, was originally established in 1994.
r The last cost-based adjustment occurred in 2022, with CPI adjustments in 2023 and 2024.
r SCSS submitted a cost-based rate adjustment application for 2025, per existing methodology and schedule.
y The City, along 9 other Agencies in San Luis Obispo County and SCSS' parent company (Waste Connections), all see benefit in a new approach to annual rate adjustments.
SLIDE Z3
3 1 1I KIM ; • • •
2025 Cost-Based Rate Adjustment
Projects future costs based on recent actual costs per audited financial statements
Increases in organics processing costs
Increases in landfill disposal costs
Inflation-related increases in collection costs
Revised approach to corporate overhead
Updated profit allowance
SLIDE 4 Z3
2025 Adjustment & Methodology
2025 Cost Projections
S mi&
■ Beach
• • Adjustment
Collection Services $2,0757482 $2,095,751
Profit Allowance 1801477 188,618
Post-Collection Services 11180,703 1 ,180,703 Agency Fees 3671397 3671397
Total Cost Projections : i - 358329470
�m 61 1
Revenue at Prior 2024 Rates 3,6729906 37672,906 I W7 IN
Franchise Fee Adjustment Factor 0.40% 0.48%
2025 Adjustment & Methodology
2025 Rate Adjustment Outcomes
Original Adjustment, per 1994 Rate Manual 3.97%
AL A
Revised Depreciation Schedule -1 .33%
Revised Approach to Corporate Overhead 1 .51 %
Service Enhancements 0.37%
Updated Profit Allowance 0.22%
Recalculated Fees 0.08%
Revised Adjustment for 2025 Methodology F8 21 Pop
SLIDE
6 2025 Adjustment & Methodology
2025 Monthly Residential Rates
Service Level 0 2025 Difference
-
32-Gallon Cart $23.76 $24.91 $1 . 15
64-Gallon Cart $47.56 $49.85 $2.29
96-Gallon Cart $71 .33 $74.77 $3.44
Service Enhancements 2025 Adjustment & Methodology Customer Assistance Program: 20% low-income
discount provided to residential customers using 32-gallon cart service (or below) and using existing District practices on low-income relief for their offered utility type services.
Free Bulky Waste Collections: No charge collection for one bulky item during clean-up weeks.
Annual Cart Exchange: Once annual exchange of a
residential garbage, recycling, or organics cart per customer account.
SLIDE Z3
8 2025 Adjustment ; Methodology
Overall Look Solid Waste Costs
Franchise Fee
10% _
Post-Collection
Services — Collection
0 SLIDE
° � Services
54%
Profit Allowance /
5%
2025 Adjustment & Methodology
New Rate Adjustment Methodology
Enhances rate stability, predictability, fairness and transparency, ease of administration, and
cost-effectiveness.
Capped CPI adjustments to SCSS Collection and
Post-Collection Services — 2% floor, 5% ceiling with roll-overs.
Revenue balancing mechanism — surplus or shortfall
revenues carries forward to future years.
Less frequent cost-based adjustments — no more
frequently than every 5 years.
Extraordinary adjustments.
SLIDE Z3
10 1 . A,
Residential: 32-Gallon Cart Rates (Monthly)
$60
$50
$40
$30
$20
$10
$0
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SLIDE
11 Regional Comparison
Residential: 64-Gallon Cart Rates (Monthly)
$90
$80
$70 — —
$60
$50
$40
$30
$20
$10
$0
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SLIDE
12 Regional Comparison
Residential: 96-Gallon Cart Rates (Monthly)
$140
$120
$100
$80
$60
$40
$20
$0
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SLIDE
13 Regional Comparison
Commercial: 2-CY Bin Rates (Monthly)
Most Common Service
$350
$300
$250
$200
$150
$100
$50
$0
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SLIDE
14 •IMM4ZI1 1MiTobiliz•
1 . Conduct public hearing.
2. Adopt resolution authorizing recommended
solid waste rates effective January 1 , 2025.
3. Approve Amendment #3 to Agreement with
SCSS, incorporating the new rate
adjustment methodology via Exhibit.
SLIDE 15 Z-5
PISMO BEACH
Questions?
January 21 , 2025
Jordan Muratsuchi, Sr. Consultant
CONSULTING GROUP, INC.
RESOURCES • RESPECT• RESPONSIBILITY