1 City of Sanger
Refuse Rate Study
December 19, 2024
City Council Meeting
Dan Bergmann, P.E.
IGService
[email protected]
Tonight’s Purpose:
1. Present proposed increased refuse rates to city council, including rationale for the rates.
2. Ask for support to issue a Proposition 218-compliant rate increase notice to all customers and property owners.
2 “Cost of Service Rate Study”
• Rates collected are kept within refuse enterprise
• Rates collected are not more than necessary
• Rates charged to customers are proportional to the cost to serve them: “All customers are not equal.”
• Customers must be notified and may protest
3 Rate Setting Process
1. Current financial status: Revenue, Expense, Cash
2. Projection of costs over five-year planning period
3. Determine cost by rate class
4. Reset rates
4 Background
• City council approved Mid-Valley agreement last meeting • Mid-Valley increases average 30 percent
• Mid-Valley introduced commercial recycle fees
• Existing customer rates unchanged for over 10 years
• Disposal enterprise: No debt and minor assets
5 Revenue, Expenses, and Fund
Balance: Looking Back
• Disposal enterprise revenue around $3.2M per year
• Expenses similarly constant around $3.0 M per year
• Result: Fund balance has been growing over time, now approximately $3.4M
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Revenue, Expenses, and Fund
Balance: Looking Forward
• Revenue must be increased primarily to cover Mid-Valley increases
• First full year increase is $670,000, or 25% overall
• Subsequent increases are four percent per year to 1)
follow inflation and 2) result in net positive cash flow at the end of five years.
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1 2 3 4 5
FY25/26 FY26/27 FY27/28 FY28/29 FY29/30
Projected Projected Projected Projected Projected
Gross Revenues 25% 4% 4% 4% 4%
Revenue from Rates $3,636,000 $3,782,000 $3,933,000 $4,090,000 $4,254,000 Recycle Line Item (From Res & MF Rates) - - - - - Recycle (from Mid Valley based on weight) - - - - - Street Sweeping 118,000 118,000 118,000 118,000 118,000 Other Revenue/Penalties 72,000 74,000 76,000 78,000 80,000 3.0% Impact Fees ("Major Facilities Fees") 15,000 15,000 15,000 15,000 15,000 Interest Income 60,000 60,000 60,000 60,000 60,000
Total Gross Revenues $3,901,000 $4,049,000 $4,202,000 $4,361,000 $4,527,000 Operating Expenses1 Inflation
Salaries and Benefits $84,000 $88,000 $92,000 $97,000 $102,000 5.0% Payments to Mid Valley 3,150,564 3,245,000 3,342,000 3,443,000 3,546,000 3.0% Professional Services - Sweeping Contract 89,600 92,300 95,100 98,000 100,900 3.0% Professional Services - Other 7,200 7,400 7,600 7,800 8,000 3.0% Fees and Filings 50,000 52,000 54,000 56,000 58,000 3.0% General & Administration 378,000 389,000 401,000 413,000 425,000 3.0% Franchise Fees 189,000 195,000 201,000 207,000 213,000
Insurance 15,000 15,000 15,000 15,000 15,000 3.0%
Other Expenses 50,000 52,000 54,000 56,000 58,000 3.0%
Taxes in Lieu - - - - - Total Operating Expenses $4,013,364 $4,135,700 $4,261,700 $4,392,800 $4,525,900 Net Income -$112,364 -$86,700 -$59,700 -$31,800 $1,100
Cash and Investments $3,323,907 $3,237,207 $3,177,507 $3,145,707 $3,146,807 Fund Balance: $3.4M
• Reserve Policy states three months expenses: $950,000 • Also says to hold benefits of the asset sale to Sunset Waste: $435,000
• Even so, still leaves over $2M
• Potential uses: 1) Alley repair from truck damage, 2) refund customers, likely single-family
10 Rate Design
• Defined customer classes are single-family and
commercial.
• All Mid-Valley fees are increased consistent percentages to cover city overhead costs and a franchise fee
component for giving Mid-Valley the exclusive right to
operate in Sanger
• The single-family percentage increase above Mid-Valley’s fee is slightly higher than the commercial increase
because of the added burden of customer services to
single-family (6,700 single-family vs 450 commercial)
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Rates
• Single-Family rates increase five percent
• Billing line item $3.15 recycle charge removed
• Commercial rates increase an average of 37 percent
• Commercial recycle rates are introduced
• Street sweeping unchanged at $1.43 per customer
• Rates are set to be increasing over five years
• (See pages 154 and 155 of city council agenda packet for complete proposed rates)
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7/1/26 7/1/27 7/1/28 7/1/29
Rate Code Description % Change New
Rate 4% 4% 4% 4%
Single-Family Service
001 Standard 95 Gallon 3-Cart Service $27.57 5.0% $28.95 $30.11 $31.31 $32.56 $33.87 001-1 Senior 3-Cart Service 25.07 0% 25.07 26.07 27.12 28.20 29.33 002 Extra 95 Gallon - Any Type 24.42 -56% 10.71 11.14 11.58 12.05 12.53 Commercial Land Fill
03 Commercial - 90 gal 1x wk 38.22 -32% 25.99 27.03 28.11 29.23 30.40 30 Commercial - 90/95 gal 1x wk 18.50 28% 23.68 24.63 25.61 26.64 27.70 31 Commercial - 90/95 gal 2x wk 23.50 73% 40.66 42.28 43.97 45.73 47.56 32 Commercial - 90/95 gal 3x wk 28.50 103% 57.86 60.17 62.58 65.08 67.68 33 Commercial - 90/95 gal 4x wk 33.50 120% 73.70 76.65 79.71 82.90 86.22 34 Commercial - 90/95 gal 5x wk 38.50 133% 89.71 93.29 97.02 100.91 104.94 36 Commercial 1 yd 1x wk 47.00 58% 74.26 77.23 80.32 83.53 86.87 37 Commercial 1 yd 2x wk 84.99 63% 138.53 144.08 149.84 155.83 162.06 38 Commercial 1 yd 3x wk 126.00 63% 205.38 213.60 222.14 231.02 240.27 Commercial 1 yd 4x wk n/a New Rate 248.64 258.59 268.93 279.69 290.87 40 Commercial 1 yd 5x wk 200.00 68% 336.00 349.44 363.42 377.95 393.07 42 Commercial 2 yd 1x wk 85.40 33% 113.58 118.13 122.85 127.76 132.87 43 Commercial 2 yd 2x wk 167.87 33% 223.27 232.20 241.49 251.15 261.19 44 Commercial 2 yd 3x wk 244.33 33% 324.96 337.96 351.48 365.53 380.16 45 Commercial 2 yd 4x wk 322.67 33% 429.15 446.32 464.17 482.74 502.05 46 Commercial 2 yd 5x wk 389.15 33% 517.57 538.27 559.80 582.20 605.48 48 Commercial 3 yd 1x wk 115.58 33% 153.72 159.87 166.27 172.92 179.83 4/1/25
Proposed Rates
Current
Rates
City of Sanger Refuse Rates
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Next Steps
With City Council support, issue Proposition 218-
compliant notices no later than February 1, 2025
Hold rate hearing during March 20th City Council
meeting, including count of protests provided from the
notice issued. City Council votes to approve new rates. New rates effective April 1st, coincident with Mid-Valley fees increasing
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