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CITY OF DUBLIN
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: January 10, 1994
SUBJECT:
PUBLIC HEARING: Consideration of 1994 Adjustment To
Garbage Rates Requested By Waste Management Alameda
County (WMAC - formerly Oakland Scavenger Company)
(Prepared by:paul S. Rankin, Assistant city Manager)
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EXHIBITS ATTACHED: 1./'Memorandum dated December 29, 1993 from the
Assistant city Manager, Detailing Major Findings
by the Independent Rate Review Consultants.
2.~ Letter dated October 22, 1993 from Livermore
Dublin Disposal requesting increase in CUrbside
Recycling Rate.
3. Analysis of Proposed Rates On Basic Residential
Service Paid For By Property Tax Assessment
4. Comparison of Proposed 1994 Rates To Surrounding
Communities
5. ~1993 Agreement For Provisional Charges Related To
Closure Post Closure Expenses At The Altamont
Landfill
6. ~ Resolution Extending The Term Of A Provisional
Agreement Related To Closure and Post Closure
Maintenance Of The Altamont Sanitary Landfill.
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RECOMMENDATIOJ: ~ 1.
2.
3.
4.
Resolution Amending The Schedule of Service Rates
Allowed To Be Collected Under The Solid Waste
Franchise Agreement
Open the Public Hearing.
Receive the staff Report and Public Testimony.
Close the Public Hearing and deliberate.
Adopt the Resolutions.
FINANCIAL STATEMENT: The proposed adjustments vary depending on the
type and frequency of service. It is anticipated that the adjustments will
produce revenues approximately 7.6% higher than those collected by the
company in 1993. The most significant factor in this adjustment is the
imposition of Alameda County Measure D, which results in a $6.00 per ton
fee being collected at the landfill to support recycling activities
countywide. See report for a more detailed explanation.
DESCRIPTION: In July of 1993, Waste Management of Alameda County
(WMAC) submitted a request for increased rates. As is consistent with
prior years, the detailed information was submi tted to the Joint Refuse
Rate Review Committee (JRRRC). This Committee is comprised of various
jurisdictions serviced by WMAC. The commi ttee has proven to be a cost
effective means to jointly analyze the annual rate application. The
portion of the rate adjustment attributable to the city of Dublin, was
calculated by the Company as equivalent to an 8% increase in revenues.
The Company collects solid waste in the City of Dublin under a franchise
agreement, which currently runs to March of 1996. The terms of the
agreement authorize the C1 ty council to establish all garbage rates for
services provided in the Ci ty . The agreement also provides that the
revenue derived by the Company must cover their estimated expenses plus a
reasonable rate of return. f
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ITEM NO. 6. 7
COPIES TO:D. Borges, LDD General Mgr.
D. David MacDonald,WMAC Exec V.P.
CITY CLERK
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ANNUAL INCREASE IN FRANCHISED REVENUE REQUIRED
Exhibit 1 contains both the staff analysis and the Executive Summary, of
the report prepared for the JRRRc by the Consulting firm of Hilton Farnkopf
& Hobson (HFH). This Exhibit reviews various factors and changes which
impact the request by the Company for an increase. Based uV?n the review
bv HFH and the JRRRC recommendation on allowed ComDany prof1t. the amount
of the required rate increase is less than the ComDany requested. The
report recommends that the Ci ty of Dublin adjust rate schedules, in a
manner which is projected to produce an increase in franchised Company
revenues of 7.6% in 1994, as compared to the projected 1993 revenues.
In order to produce the increased Company Revenue , the city of Dublin must
increase rates charged by WMAC, to produce approximately $ 154,777 in
additional revenue.. The following outlines the basis for this change:
Projected 1994 Expenses $ 2,341,000
Less: Estimated 1993 Revenues S 2.186.223
Increased Revenue Requirement: S 154.777
This figure relates only to franchised operations and does not include
increased costs associated with Recycling Programs.
This report will highlight the proposed methodology used in the primary
rate categories (i.e. Residential, Commercial, and Drop Box). Staff has
compared the revenue generated under current rates with revenue generated
by proposed rates. The Company has not provided data for some of the minor
service categories such as Commercial Cans and Handy Hauler. These
services do not represent a significant portion of the Company annual
revenues. Therefore, the impact of adjustments on these minor service
areas are not anticipated to materially affect the overall projections.
MAJOR FACTORS CONTRIBUTING TO THE INCREASED COSTS
A major factor contributing to this increase, is the cost of Measure D fees
levied at the Landfill. The 1994 WMAC projections for 1994 Expenses,
estimate that the annual cost of Measure D to Dublin ratepayers will be $
163,123. Based upon the amount revenues must be increased, it appears that
the current rate structure is already covering a portion of the Measure D
expense. The city of Dublin has not previously adjusted rates
specifically to cover Measure D expenses. These charges were only
reinstated last August, and the Company has recovered the short term impact
from existing revenues.
The second component affecting costs is the Residential Special Clean-ups.
In 1993, the "Basic Residential Rate" was assumed to include $ 1.06 per
month for this service. Actual costs in 1993 were closer to $ 1.31 per
month per household. The impact of this is discussed further in the
following section.
METHODOLOGY USED TO SPREAD THE REOUlRED REVENUE INCREASE AMONG MAJOR
SERVICE CATEGORIES - RESIDENTIAL / COMMERCIAL BIN SERVICE / DROP BOX
As previously noted, the cost of Residential special Clean-ups have a
direct impact on the need for additional revenue. The following explains
the methodology used by Staff to determine the amount related to this
special service.
Assumed Clean-up Cost InclUded In 1993 Residential Rate
The 1993 Residential rates were established with a component
representing the cost of the four special clean-ups, applied to the
first can - "Basic Service". The philosophy was that all customers
had the same opportuni ty to utilize these clean-ups. The cost was
calculated at $1.06 per household per month. This was based upon the
tonnage collected in 1992 and did not account for company profit. The
rate was established using Company estimates of labor, vehicle, and
landfill direct costs only.
Increased Tonnaqe Collected At 1993 Clean-ups
In 1993 the Company collected a total of 1416 tons at the four clean-
ups. This amounted to a 17.9% increase over the amount collected in
1992. Based upon the increased tonnage, the actual 1993 direct
Company expenses were approximately $80,129. This figure has been
adjusted to exclude the Measure D costs, which were only assessed on
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the October Clean-up. The annual cost of the four 1993 Clean-ups
(excluding Measure D) would result in a charge of $1.23 per unit per
month.
Cost of Including A Factor For Allowed Profit In Clean-up Component
As previously explained, the 1993 calculation did not include a factor
for Company profit. As discussed in Exhibit 1 (page 5), the JRRRC has
recommended a simpler method of calculating the amount of allowed
profit. It is calculated as 6.75% of the total Company expenses.
(The JRRRC Consultants have calculated that this is equivalent to an
after tax profit of 4.3%) Application of this factor to the Clean-up
Component would increase the amount attributable to Special Clean-ups
by approximately $0.08 per unit per month.
The following summarizes the combined impact of adjusting the portion
of the Basic Residential Rates attributable to Special Clean-ups:
Proposed 1994 Component: [Based upon actual 1993 tonnage of 1416 tons
and allocation of regulated profit.]
$ 1.23 Direct costs, excluding Measure D
.08 Allocation of Regulated Profit
$ 1.31 per household per month
Total Component
Less: Current 1993 Component:
ADDITIONAL MONTHLY COST:
<$ 1.06> per household per month
$ 0.25 per household per month
Annual Revenue To Be Generated From Increased Clean-up Component
As shown below, of the total required revenue increase $ 16,230 is
directly attributable to the Residential sector. Therefore, Staff has
reduced the total revenue requirement by this amount, before
allocating the remainder to the various service sectors.
$ 0.25 x 12 months = $ 3.00 per year per household
5,410 total households x $ 3.00 = $ 16,230
Allocation of Adjusted Revenue Requirement Among Major Service TYnes
The following calculation describes the net amount which must be
generated after accounting for increased Clean-up costs.
Total Additional Revenue Required:
Less: Portion attributable to Clean-ups:
Amount To Be Allocated:
$ 154,777
< 16.230>
$ 138,547
As previously noted it is assumed that this amount is directly
attributable to Measure D, which is assessed at the landfill on a per
ton basis. The Company has projected the following tonnage for 1994
by service category:
PROJECTED 1994 WMAC DISTRIBUTION OF TONNAGE
TO BE COLLECTED IN THE CITY OF DUBLIN
Residential
7,225 Tons
26.6%
$ 36,854
Commercial
11,781 Tons
43.3%
$ 59,991
Drop Box
8,181 Tons
30.1%
TOTAL
27,187 Tons
100.0%
$ 41,703
$ 138,548
The final line of the Table shown above, allocates the New Revenue required
to meet Company expenses (net of the portion allocated to the cost of
Clean-ups) among the major service areas on a per ton basis. Staff has
taken these "Target Figures" and attempted to structure revised rates,
which will raise the additional revenue for each of the major service
categories.
RESIDENTIAL RATES COLLECTED ON THE PROPERTY TAX BILL
For the customer who currently receives single can "Basic Service", the
consideration of this adjustment will not have an immediate effect.
Beginning with Fiscal Year 1993/94, the City Council levied an assessment
on the property tax bill to cover the annual cost of single can service,
including special clean-ups and recycling. The formula used for developing
the annual assessment included a projected mid - year adjustment. Prior to
August of 1994 the City council will consider the annual assessment amount
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for Fiscal Year 1994/95. As discussed later in this report staff will be
recommending that a portion of that assessment be underwritten by Measure D
Revenue received by the city, to support Recycling programs and activities.
The item currently before the city council relates to the amount the
Company can charge for this "Basic Service". This amount is eventually
paid by the city to the Company, from assessments collected by the County
Tax Collector. As described in Exhibit 3, it does appear that sufficient
monies should be collected on the Property Tax Bill in Fiscal Year 1993/94
to cover the proposed increase.
PROPOSED RESIDENTIAL RATE ADJUSTMENTS
The "Basic Monthly Residential Rate" paid by the city to WMAC provides the
following services: Collection and Disposal of 1 can on a weekly basis; 4
Special Clean-ups; and Weekly curbside Recycling. The following chart
compares the Proposed Rates to the current Rates, based upon the individual
components.
COMPARISON OF COMPONENTS ATTRIBUTABLE TO ALLOWED SERVICE RATE FOR BASIC
SERVICE 1993 vs. Proposed 1994
1 Can Collection & Disposal
4 Quarterly Clean-ups
CUrbside Recycling
Total Per Month
1993
$ 5.60
1.06
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$ 8.00
Proposed 1994
$ 5.95
1.31
L...ll
$ 8.63
Cost Collection & Disposal
Of Each Additional Can
$ 5.60
$ 5.95
There are currently a total of 8,086 cans which are serviced at 5,410
different households. The breakdown of customers is as follows:
CURRENT CENSUS OF RESIDENTIAL CUSTOMERS BY SERVICE TYPE
1 Can 2 Can 3 Can 4 Can 5 Can
, 2,933 2,293 171 11 2
% 54.2% 42.4% 3.2% 0.2% *
(* Amount is not significant i.e. less than one tenth of a percent)
The Proposed Residential Rate structure is projected to generate additional
annual franchised revenues in the amount of $ 50,191. This amount can be
broken down as follows:
Amount Generated By Increasing Clean-Up component:
Amount Generated By Increasing Cost Per Can $0.35:
TOTAL :
$ 16,230
S 33.961
$ 50,191
The change in curbside Recycling Program costs is discussed in the
following section. The amount generated on the "per can increase" is
slightly less than the "Target Amount" of $ 36,854. For Billing purposes
the Company prefers rates Which are rounded to the nearest nickel. The
actual difference is less than 0.45% and is considered immaterial.
INCREASE IN RESIDENTIAL CURBSIDE RECYCLING COMPONENT
The curbside recycling program is ~ a franchised activity.
provides for an annual adjustment ~n accordance with the
Consumer Price Index.
The agreement
change in the
The CUrbside Recycling Program is currently included as part of the "Basic
Service" for residential customers. As a non-franchised acti vi ty , the
Company has assumed the market risk and is not guaranteed a return on its
investment. As part of the "Basic Garbage Service", the full cost of this
program is eventually paid by the city with monies generated from the
special assessment.
As noted in Exhibi t 2 the Company has requested an increase in the
Recycling component of 3 cents per household per month. This increase
would be in accordance with the existing agreement. As a non-franchised
activity additional revenue generated by this increase will not affect the
total change in required Company revenue.
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As discussed in Exhibit 3, at the time that the city considers an
Assessment for Fiscal Year 1994/95, Staff will also be recommending
supporting the cost of "Basic service" with Measure D. Revenue. This would
serve to reduce the amount which would otherwise need to be levied.
Adequate information is unknown at this time to identify a specific level
of subsidy.
HISTORICAL COMPARISON OF PROPOSED RESIDENTIAL RATES
The 1993/94 annual property tax assessment for "Basic Garbage service is
$110.22. In addition to WMAC expenses this amount also includes: County
Collection Fees, Estimated Delinquencies, and Computer Charges associated
with preparing the assessment. An analysis of these costs is discussed in
Exhibit 3.
Exhibit 3 estimates a projection of the impact of the proposed rate change
on next years assessment. Based upon certain assumptions it is estimated
that the annual assessment will need to increase by 2.76%, for the single
can customer. This calculation does not take into consideration any
unexpended monies remaining from the 1993/94 assessment. and anv subsidy
from city Measure D revenues.
The following compares only the rates which the Company is paid and is
allowed to collect. It does not account for the full cost incurred by the
1 can "Basic service" customer, since as discussed earlier, the entire
annual assessment is not paid to the Garbage Company.
COMPARISON OF AUTHORIZED MONTHLY COLLECTION RATES FOR 1 AND 2 CAN SERVICE
(Note: In 1993 These categories represented 96.6% of Residential customers)
% with This
Service Level
54.2%
1 Can
1992
$ 7.90
1993
$ 8.00
ProDOsed 1994
$ 8.64
2 Can
42.4
$14.20
$13.60
$14.59
OVer a two year period the amount the company was allowed to charge for
single can service, will have increased by an average of 4.7% per year.
The level of increase for two can service is much less at an average of
1.4% per year, for the two year period from 1992 to 1994.
PROPOSED ADJUSTMENT TO COMMERCIAL BIN SERVICE RATES
Commercial Bin Service is the typical type of service obtained by most
businesses. Also, some of the Multi - Family projects utilize a central
bin for trash disposal. The containers come in a variety of sizes and the
business may have them emptied from one to five times per week.
The current rate structure has two components. A monthly fee per yard
which includes: Bin Rental, Collection, and Disposal once per week. The
current monthly rate is $24.10 per yard. This means that if you have a
four yard bin the rate is ( 4 times $24.10), or $96.40. The second
component is a frequency factor, which is approximately 25% of the monthly
cubic yard rate ($6.05). This amount is added for each piCk-Up scheduled
beyond once per week. For example, a One Yard Bin serviced three times per
week will pay:
3 x $24.10
2 x $ 6.05
Total Monthly Rate
72.30
12.10
84.40
The frequency factor is intended to assure that the most efficient service
is obtained. For example, if a business can accommodate a 3 Yard Bin on a
once per week service schedule, this is more efficient than a 1 Yard Bin
serviced three times per week.
Staff has found that an increase of $ 1.30 per cubic yard will be
sufficient. This will increase the monthly rate for a 1 Yard Bin, from
$24.10 to $25.40. In order' to maintain a consistent approach with past
practice, the frequency factor was recalculated based upon a per cubic yard
rate of $25.40. This results in a proposed Frequency Factor of $6.45 for
each additional piCk-Up.
Based upon the current subscriber levels, this adjustment is projected to
generate addi tional annual franchised Company revenue in the amount of
$57,288, as compared to the "Target" of $ 59,991. This difference is
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considered immaterial, as it represents less than 0.25% of the total
Commercial Revenue.
HISTORICAL COMPARISON OF COMMERCIAL BIN SERVICE RATES
In 1993, the City Council implemented a rate decrease for commercial bin
service. The service levels compared below represent 80% of the current
commercial subscribers.
City Of Dublin Comparison Of Monthly Commercial Rates
1992 1993 Proposed 1994
1 yd Bin Once per week $ 27.70 $ 24.10 $ 25.40
1 yd Bin Twice per week 60.95 54.25 57.15
2 yd Bin Once per week 55.40 48.20 50.80
2 yd Bin Twice per week 116.35 102.45 107.95
3 yd Bin Once per week 83.10 72.30 76.20
3 yd Bin Twice per week 171.75 150.65 158.75
4 yd Bin Once per week 110.80 96.40 101.60
4 yd Bin Twice per week 227.15 198.85 209.55
6 yd Bin Once per week 166.20 144.60 152.40
6 yd Bin Twice per week 337.95 295.25 311.15
As illustrated by the comparison, the Proposed 1994 rates remain below the
rates levied in 1992.
METHODOLOGY FOR DROP BOX RATE ADJUSTMENT
The Drop Box business is probably the most unstable component of the total
garbage company operations. This service is more costly than commercial
bin service, since the truck must haul a single container to the dump
before servicing the next account. Drop Box Rates are paid each time the
bin is serviced, whereas the Commercial Rates shown above, were for monthly
service. (The Commercial account is being serviced 4.33 times for a flat
monthly rate as compared to Drop Box service, which is billed for each
collection.) The service also tends to fluctuate with the economy, since
this is the service provided for construction debris.
Last year some of the city's larger Apartment complexes, switched to this
type of service. The owner has installed a compactor, and uses his own
personnel to consolidate the loose garbage at a central compactor si te.
The current rate structure charges twice the cubic yard rate for compacted
garbage, as opposed to loose garbage. This accounts for the greater weight
and increased landfill costs. Other agencies also set the compacted rate
at twice the loose rate per yard.
The Company only had limited data on the usage of drop box service for
1993. As previously noted the service can also fluctuate greatly depending
on economic and other factors.
In the past the city Council has established the rate for Drop Box service
at 15 percent above the equivalent of a single yard collected and disposed
of by Commercial CUstomers. For example,
Monthly Commercial Bin Rate For 1 Yard = $24.10
Monthly Rate Times 12 = $289.20 per year
Annual Rate Divided by 52 wks = $5.56 cost per yard each pick-up
Therefore, the Commercial customer is paying the equivalent of $5.56 per
yard if the monthly rate is translated into a cost based upon a single
collection.
$ 5.56 + 15% = $6.39
[Actual 1993 Drop Box Rate was rounded
to $6.40/yd]
Based upon the significant revenue which must be raised from this class of
service, Staff is recommending that the specific 15% differential from
Commercial rates be abandoned. Instead, it is proposed that the city adopt
a flat rate of $8.05 per yard for loose debris and $ 16.10 per yard for
compacted waste. This recommendation is based upon the need to generate
adequate revenue from this service to cover the increased cost of Measure
D. As noted earlier in this report the portion of the increased revenue
allocated to Drop Box Service was, 30.1% of the total additional revenue
requirement. The proposed rates also discontinue any application of a
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frequency factor for this service. Since the Drop Box will have a higher
overall rate, customers are already encouraged to utilize the most cost
effective service level.
Based on the limited data available from the company, this change ~s
projected to generate on an annual basis an additional $ 41,266 1n
additional franchised Company revenue. This figure is very close to the
"Target" figure of $ 41,703.
HISTORICAL COMPARISON OF DROP BOX SERVICE FEES
In 1993, the Drop Box rate was increased by a flat amount of 50 cents per
piCk-Up, regardless of the container size. Therefore, this is the first
significant adjustment in two years.
CITY OF
DUBLIN COMPARISON OF DROP BOX RATES
1992 1993
$ 95.15 $ 95.65
95.15 95.65
133.55 134.05
197.55 198.05
261.55 262.05
Proposed 1994
$ 112.70
112.70
161.00
241.50
322.00
6 Cubic Yd Dirt Box
14 Cubic Yd Container
20 Cubic Yd Container
30 CUbic Yard Container
40 Cubic Yard container
Excess Rate Per Yard If
Bin Is Filled Higher Than
Water Level
$ 6.40/yd
$6.40/yd.
$12.80/yd plus
$6.05 per
piCk-Up
$8.05/yd
16.10/yd
Compacted Rate Per Yard
$ 12.80/yd plus
$5.55 per
piCk-Up
On a percentage basis this class of service will be experiencin9 the
greatest change in rates. The total change on a per yard bas1s is
approximately 25.8%, Which is primarily attributable to the cost of Measure
D. Drop Box service also has considerable weight, which is then spread
amongst a relatively small number of customers. As shown Exhibit 4, the
Proposed Dublin Drop Box rates are competitive when compared to surrounding
communities.
COMMERCIAL CAN SERVICE
A small number of businesses receive service based upon an individual can,
as opposed to a large container. Due to the small number of accounts .the
proposed adjustments will not have a material effect on the total
franchised Company revenue. These customers are offered the choice of can
size as opposed to the Residential Service, which is based on a standard 32
gallon can.
The proposed rate provides for an incremental increase based upon the
additional cost of Measure D. The increase on the 32 Gallon Can is the
same as the portion of the increase for Residential CUstomers, which is not
attributable to Special Clean-ups(i.e. $0.35).
COMMERCIAL CAN MONTHLY SERVICE RATES
32 Gallon
40 Gallon
45 Gallon
48 Gallon
1992 Rate
$ 7.10
8.90
10.00
10.15
Proposed 1993
$ 7.45
9.35
10.50
10.70
HANDY HAULER SERVICE
Staff is recommending minor adjustments to this service. This is typically
used by homeowners for small clean-up projects. The service prov1des a 4
yard Bin which can be placed for up to one week. After one week the
customer is billed addit10nal charges.
The Proposed Rate is based upon components included in the proposed Drop
Box Rate Schedule. The following shows the proposed methodology:
4 yds @ $8.05 per Yard
Bin Placement Cost
Total 1 wk Rental
$ 32.20
12.80
$ 45.00 vs current charge of $44.55
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The following are miscellaneous changes also associated with the Handy
Hauler Service:
6.40/yard
Proposed 1994
$ 10.00
$ 32.20
8.05/yd
Additional Weekly Rental Cost
Cost of An Additional Dump
Excess Charge for More Than
4 Yards Placed In Bin
1993 Rate
$ 9.00
31.15
COMPARISON OF RATES TO SURROUNDING COMMUNITIES
It is important that the rates be established in relation to the services
provided. However, from an Economic Development point of view the rates
should not be established in a manner which unnecessarily adds to the cost
for businesses to operate. staff has conducted a comparison of rates for
the surrounding communities, which is attached as Exhibit 4.
In comparing rates for Service it becomes somewhat difficult if the type of
services provided are not identical. For example, Pleasanton and San Ramon
use automated residential collection, which may produce a cost savings.
Also, Dublin and Livermore provide 4 curbside Clean-ups per year, San Ramon
provides 3 per year and Pleasanton provides only 1. The one in Pleasanton
is restricted to garden waste only. The frequency and extent of these
clean-ups adds to the total cost of service.
Direct comparisons are also difficult due to differences in the cost of
disposal or other programs, which may be subsidized by the rate structure.
CUrrently, Contra Costa County pays a much higher rate for landfill
disposal at a Contra Costa County facili ty. Another factor which can
affect rates are the Franchise Fees which are paid by the company based
upon the billed revenues. The average franchise fee levied by JRRRC
jurisdictions is 8.41%. The city of Dublin is well below this level at
4.8%. This is obviously reflected in the lower cost of garbage service in
the City of Dublin.
overall, the city of Dublin will continue to have a competitive rate
structure. FOllowing San Ramon's anticipated rate increase, the ci ty of
Dublin will continue to have the lowest cost service, as compared to
surrounding cities, for the equivalent of one and two can customers. Only
184 households in the city of Dublin subscribe to a higher service level.
As noted in Exhibit 4, the city also remains extremely competitive in the
Commercial and Drop Box sectors.
It appears that the proposed 1994 Rate Schedule will continue to offer a
high level of service at a competitive rate. The revised rates are also
projected to generate Company revenue, sufficient to meet the City'S
obligations in the Solid Waste Franchise Agreement.
ALTAMONT LANDFILL CLOSURE 1 POST CLOSURE MAINTENANCE COST
As part of the 1993 rate review, the city council authorized a special
agreement with the Company. The agreement specified that certain parts of
the company Revenue ($1.66 per ton) were attributable to costs associated
with the closure of the Altamont Landfill.(See Exhibit 5) The charges were
intended to be provisional until the parties negotiated a specific
agreement on this issue. The Ci ty council authorized the JRRRC to
negotiate towards a model agreement, which would then be presented to the
city council for its consideration. The Provisional Agreement anticipated
that these negotiations would be complete by November 1, 1993.
The negotiations have extended beyond the original time frame, although the
parties believe that they can be finalized by March 31, 1994. Exhibit 6 is
a Resolution which would approve an amendment to the original agreement.
The amendment will extend the provisions of the original agreement, through
March of 1994. Staff would recommend that the city Council adopt this
Resolution.
CONCLUSION
Staff has prepared an Amendment to the Garbage Rate ReSOlution, which will
implement the changes identified in this report (Exhibit 7). The following
summarizes the annual change required to franchised Company revenue, as
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compared to the projected increase in revenues to be generated by the
Proposed 1994 rates.
Amount 1994 Franchised Revenue Must Increase
Over 1993 Revenueln Order To Cover Current Operations
$ 154,777
Projected 1994 Increase From Clean-Up Increase $
Projected 1994 Increase From Residential
Projected 1994 Increase From Commercial
Projected 1994 Increase From Drop Box
Total Projected Increased Franchised Revenue $
16,230
33,961
57,288
41.266
148,745
It should be noted that the pro~ections are based upon the data now
available and that final results wlll most likely differ. In addition to
revenue fluctuations, the Company may also have changes in expenditures.
These variances will be recorded in the Balancing Account, discussed in
Exhibit 1, and considered in the next rate application.
staff recommends that the City Council conduct a Public Hearing, and adopt
the Resolution amending the rates. This will increase revenues below the
amount originally requested by the Company, however, it is consistent with
the findings of the JRRRC Report. It is also recommended, that the city
Council adopt the Resolution, related to the Closure / Post Closure
Provisional Agreement.
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CITY OF DUBLIN
MEMORANDUM
TO:
FROM:
RE:
city Council
Paul S. Rankin, Assistant city Manager
Detailed Analysis of 1994 Waste Management of Alameda County
(WMAC) Rate Application And Basis For city Of Dublin 1994
Adjustments
EXHIBITS:
A: Executive summary of 1994 Rate Review of Oakland scavenger
Company (Prepared By: Hilton Farnkopf & Hobson at the
direction of the Joint Refuse Rate Review Committee [JRRRC])
B: Table 2-2 1992 Actual Revenues vs. 1993 Projected Revenue
(Excerpt from JRRRC Report Described In Exhibit A)
DATE:
December 29, 1993
PURPOSE
The purpose of this memorandum is to discuss significant findings of the
independent review of the Oakland Scavenger company 1994 Rate
Application. Please note that recently the Company announced a change
in the name of the Company to Waste Management of Alameda county (WMAC).
The city of Dublin is serviced for collection from the Livermore ,Dublin
Disposal Division of WMAC. All waste is transported directly to the
Company's Altamont Landfill.
The information contained in this detailed report, is intended to
provide background information for the rate adjustments to be considered
by the City Council at a Public Hearing on January 10, 1994.
JOINT REFUSE RATE REVIEW COMMITTEE (JRRRCl
A member of the City of Dublin staff, participates in the JRRRC. This
is a joint effort by agencies serviced by WMAC to review rate
applications. The Committee funds the cost of these services from the
rates collected by the Company. The Committee issued a report prepared
by Hilton Farnkopf & Hobson (HFH) , which reviews the projected 1994
Company revenues and expenses. The report was prepared in response to a
request by the Company to receive additional revenue to support its
operations. Exhibit A is a summary of the report.
In 1993 the membership of the JRRRC changed. The city of Livermore
discontinued its participation due to the structure of a newly
negotiated Franchise Agreement with WMAC. Also, the cities of Fremont,
Newark and union city elected to send only one delegate to the meetings.
These cities are currently in the process of determining the process for
securing services under a new franchise agreement within the next year.
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VARIATION FROM PRIOR YEAR ESTIMATES
The rate review process currently relies on estimates and projections
Which can differ from the final outcome. For example, the company
submitted its 1994 Rate Application in July of 1993. This requires the
Company to estimate Revenues and Expenses for a large portion of the
year. Therefore, it becomes important to look back at the prior year
(i.e. 1992) and see how the projections matched the final figures. Key
areas of variance are described below:
Revenues Collected By Company: In 1993, the city council
reduced the rates for Residential Service and commercial Service.
In addition a 2% Administrative Fee was added to account for
increased Staff time required for Waste Management program
Administration. The target of the rate decreases was to reduce
revenues to the Company by a total of $ 175,000 in 1993.
The projections for 1993 are that revenues to the Company will be
reduced by approximately $164,877. This breaks down as follows:
1993 TARGETED REVENUE DECREASE COMPARED TO REVISED PROJECTION
Residential
Commercial Bin Service
Drop Box
Total projected Revenue
Change
Targeted S <Reduction>
<$ 20,000>
< 155,000>
No Adj. To Rates 1993
Projected 1993
<$ 1,957>
< 177,287>
+ 14,367
<$ 155,000>
<$ 164,877>
NOTE: Exhibit B provides the detail to the information presented.
Overall, the Company is projected to receive 6.37% less revenue
than the rate adjustments were targeted to provide. This
difference can be made up through surplus revenues collected in
prior years, which are maintained in the "Balancing Account".
Expenses Incurred Bf the Company: For the City of Dublin major
expense categories ~nclude; Landfill Costs and Livermore Dublin
Disposal (LDD) COllection/Operating costs.
In 1992, the final Landfill costs were within 0.2% of the amount
projected in last year's rate application. This was a favorable
difference with costs running slightly less than expected.
In 1993, Landfill costs are projected to vary significantly from
the projections contained in last year's report. The changes
reflect both unforeseen costs as well as savings. The total net
difference is approximately $984,000 on a company wide basis at the
Altamont Landfill.
Additional Major Landfill costs Include: Imposition of Measure
o Fees at $6 per ton. This added $2.173 million in expenses.
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The company incurred savings from the projections for: Cell
Amortization, Landfill Maintenance, and Closure / Post Closure
Costs. These types of costs are driven by the amount of waste
disposed of. Franchised operations at the Altamont used 69,000
tons less capacity than originally projected. The company also had
favorable public revenue at the Altamont, with approximately
$143,000 more in collections than projected. As previously noted,
the net difference between the additional costs and the reduced
expenses were $984,000 in additional costs.
MEASURE 0 EXPENSE: Because this line item is a significant
contributor to the adjustment required for Dublin rate payers,
additional information is presented. The city of Dublin along with
other parties had originally challenged and obtained a Superior
Court ruling that the fee could not be levied. The proponents of
the Measure obtained a court of Appeals ruling that the Measure was
valid on March 191 1993. Attempts at a California Supreme Court
hearing were unsuccessful and the $6.00 per ton fee was reimposed
on August 11, 1993 at the Altamont Landfill.
Past actions on rates in the city of Dublin had never directly
raised rates to address the Company expense for Measure D. All
Measure D costs for the limited period that it was previously in
place were recovered by the Company, from the existing rates or the
Balancing Account.
Now that the company will be incurring Measure D costs on an on-
going basis it is important to assure that the rate structure will
support these increased costs. As shown in the following chart,
the level of this surcharge is significant compared to all other
Regulatory Fees collected at the Landfill on a per ton basis.
COMPARISON OF REGULATORY LANDFILL FEES WITH AND WITHOUT MEASURE 0
0.750
Per Ton Fees Levied
Followina Measure D
$ 0.600
0.750
state Eastin Tax
(Landfill Closure)
State AB 939 Tax
(Funds State Waste Mgt Bd)
Local Enforcement Agency
Inspection Fee (Alameda County
Health Surcharge)
Alameda county Waste Mgt
Authority
Alameda County Household
Hazardous Waste Fee
(county Environmental Health
Program)
Measure D Recycling Board
Per Ton Fees Levied
Prior To Measure 0
$ 0.600
0.094
0.094
1. 500
1. 500
TOTAL
1. 250
0.000
$ 4.194
1. 250
6.000
$10.194
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As shown above, the inclusion of Measure 0 increased regulatory
fees by 143 percent. Based upon the projected disposal by the city
of Dublin in 1994 Dublin rate payers will incur $ 163,123 in
Measure D costs in calendar Year 1994.
variance In Projection Of collection Division Operating Costs: As
previously noted, the city of Dublin is serviced from the Livermore
Dublin Division of WMAC. Dublin is currently the only JRRRC member
which is served by this division. The Company had significant
operating expenses in 1992, which resulted in higher than projected
expenses. The most significant components included:
(a) A $40,000 increase in operating expenses due to;
underground tank remediation and security expenses at their
Livermore facility.
(b) A $36,000 increase in personnel related costs due to final
settlement on a worker's compensation claim.
(c) A $25,000 increase in office expenses due to the addition
of one customer service representative.
In 1993 the operating expenses projected at the time of the rate
application submittal net of adjustments by the consultants are not
anticipated to vary significantly.
The net im~act of these events have been taken into consideration
in project~ng the funds available in the Balancing Account.
variance In Projection Of Balancing Account: The Balancing Account
is utilized by the Company to capture any revenues in excess of
allowed expenses or any shortfall in revenues. In the later
situation the rate payers have contributed less than what the
Company is owed. On a company wide basis the net amount in the
Balancing Account shows WMAC is owed as of the end of 1992, a total
of $12.402 million dollars from the rate payers. The city of
DUblin is one of only two JRRRC members which had a surplus
Balancing Account in 1992. This means that the Company was
retaining monies in excess of allowed expenses.
Adjustments to the 1992 Balancing Account projection are shown on
Page 9 of Exhibit A. During the last rate review the company was
projecting that there would be a surplus of $212,000 for the city
of Dublin. The actual amount after all adjustment's were made was
a $153,000 surplus. The Consultant's have projected that for the
city of Dublin that the Surplus Balancing Account will increase to
$193,000 by the end of 1993. As noted the final numbers can vary
significantly from projections.
In considering the 1993 rates the city council did not rely on the
use of the Balancing Account to contribute towards the current
operations. The reasons for this approach included the following
elements:
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(a) The estimated surplus is based largely on projections and
the final amount available may vary greatly.
(b) The company is capable of tracking the surplus including
interest earnings to assure that the full amount will be used
to the benefit of the rate payers.
(c) outstanding issues such as the final negotiation of
closure post closure costs and economic factors exist. These
factors may eventually impact the amount of revenues which
must be generated.
(d) If the city lowers rates to fully deplete the Balancing
Account in one year, a significant rate increase will follow
in the next year. This is due to the fact that the revenues
collected directly from rate payers will be artificially low
during the period while the Balancing Account is used to
subsidize current operations.
Ideally, if the monies in the Balancing Account are used to
subsidize operations, this should be done over multiple years.
This would tend to stabilize rates and avoid a significant
spiking of rates.
similar precautions are recommended with the current rate
adjustment scenario. Primary is the fact that the Closure / Post
Closure negotiations are incomplete.
CALCULATION OF REGULATED PROFIT
In the 1993 report, staff recommended that the JRRRC consider a
different format for the calculation of profit which would accrue to the
company. In prior years this was based upon a "Return on Equity" (ROE).
Once the Oakland Scavenger Company was purchased by Waste Management
Inc., the Company "Equity" became somewhat distorted. This was further
impaired with the city of Livermore pulling out of the JRRRC. If the
Committee continued to use ROE, some calculation would be required to
assign a portion of the company "Equity" to Livermore.
Instead the committee decided to review the amount of allowed profit as
a ratio of pre tax operating expenses. (i.e. if a ratio of 90% were
used and the Company had pre-tax operating expenses of $100 million, the
Company would be allowed profit of $10 million.)
Based upon a review of reasonable data the JRRRC recommends that the
allowed pre-tax operating ratio for 1994 be established at a ratio of
93.25% on total expenses. This will generate total company regulated
profits which are $ 3,567,000 less than the amount requested by the
Company in their rate application. It does represent a $ 822,000
increase over the amount allowed in 1993.
In determining the proper level the JRRRC established a range from 87%
to 96%. The Committee considered returns of similarly regulated
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companies and an assessment of the Companies services. The recommended
pre-tax ratio of 93.25% translates into an after tax profit of 4.3%. As
a regulated Company with a guarantee of a return on its operating costs
this amount is projected to be reasonable.
It is important to note that there are legitimate reasons why this level
of profit may vary significantly from earnings experienced on a company
wide basis by large waste companies. Typically these companies have a
mixture of operatin9 conditions which may include both regulated and
unregulated activitles. Often the companies diversification may include
high risk activities such as hazardous waste collection or other non
waste related activities. The JRRRC did recognize WMAC improved
responsiveness to the jurisdictions and its implementation of
recommendations in recommending an increase in the regulated profit over
the amount allowed in 1993.
Company Reqpest For Increase In Rates
The company has requested that the city of Dublin adjust rates in a
manner which would produce 1994 revenues, which are 8% more than the
Projected 1993 Revenues. The JRRRC Consultants have reviewed the data
submitted and have found that a 7.6% increase in revenue will generate
revenues necessary to cover anticipated expenses. This amounts to a
total annual amount of $ 154,777. It is up to the city to determine the
appropriate adjustments by customer class, such as Residential,
commercial Bin Service, and Drop Box Service.
An increase in company Revenue by 7.6% assumes that the city will not
rely on the Balancing Account to subsidize current operations. This
recommendation was previously discussed earlier in this memorandum.
Staff has projected the annualized increase in revenue from various rate
scenarios over the current rate structure. It appears that accounting
for the Measure D costs in the three rate categories, plus an adjustment
for the Special Residential Clean-ups will generate increased annual
revenues of approximately $ 148,745. The methodology for these
adjustments is discussed fully in the staff Report related to this item.
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FINAL REPORT
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1994 RATE REVIEW
OF OAKLAND seA VENGER COMPANY
(t.~t~~fT)
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November 24, 1993
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This draft report is printed on recycled paper
and is printed on both sides to reduce waste.
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HILTON FARNKOPF & HOBSON
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SECTION I - EXECUTIVE SUMMARY
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Background
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At the conclusion of our review of Waste Management of Alameda County's (WMAC's,
formerly Oakland Scavenger Company) 1993 rate appli<:ation, we determined the
necessary rate adjustment for each jurisdiction in order to meet either the 1993 revenue
requirement (current year operations) or the 1993 revenue requirement plus the 1992
balancing account (eliminate balancing account). For comparison purposes, we have
summarized in Table 1-1 the rate adjustments approved by jurisdiction, by service type
and the projected actual percentage change in revenues achieved during 1993. In
addition, Table A~1 in the Appendix compares our recommendations from the 1993 rate
review to the rate adjustments approved by 'each jurisdiction.
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During 1993, the Committee has been dealing with several significant issues - the
transition of the chairmanship of the Committee to the City of Oakland, the completion
of the accounting and route audit study by R. W. Beck, and the negotiation"of a long~
term agreement regarding landfill closure and post~closure maintenance expense.
These issues are summarized below. "
Committee Changes
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In the spring of 1993, Mr. Paul Causey, General Manager of the Ora Lorna Sanitary
District and Chairman of the Committee, resigned to take on new responsibilities at the
Delta Diablo Sanitary District in Contra Costa County. Mr. Gary Breaux, Finance
Director for the City of Oakland, was elected as chairman, with the City of Oakland
once again acting as lead agency for the Committee.
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Earlier in the year, the City of Livermore announced that it had negotiated a new long-
term agreement with WMAC and would be pulling out of the Committee. Thus, total
Committee membership dropped to twelve agencies. Also, the City of Fremont
representative announced that he would also represent the Cities of Newark and Union
City at the Committee meetings.
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Accounting and Route Audit Study
Based on one of our recommendations in the 1991 management and operations review,
the Committee retained the engineering firm of R. W. Beck and Co. to perform a route
audit and a review of the reasonableness of WMAC's decentralization of the accounting
and maintenance functions. The Beck report was completed and distributed to the
Commi ttee in October 1993.
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Landfill Closure/Post.Closure Negotiations
HF&H and Hanson, Bridgett, et a1., were retained by the Committee to assist it in
negotiating an agreement for the treatment of estimated landfill epc costs. In 1992, the
jurisdictions entered into a preliminary agreement that permitted WMAC to place in
escrow an amount equal to $1.66 per ton for cpe costs for the Altamont Landfill and
$3.45 per ton for epc costs for the Durham Road Landfill, pending the conch.J.sion of
the negotiations. Those negotiations are in the final stages, but, as of the writing of this
report, it is unclear whether an agreement will be reached. (See further discussion of
this issue in Section VII, Other Issues.)
Scope of Review
In 1991, the Committee directed WMAC to prepare the 1992 and future rate
applications on a jurisdictional basis. Our review was conducted in accordance with
the scope of work outlined in our June 18, 1993, proposal to the Committee.
The scope of our review did not comprise an audit of WMAC's financial statements.
Such an audit is performed by the firm of Armanino, Jones, & Lombardi.
Our review was of WMAC's July 15, 1993, projections ,of the results of operations for the
three years ending December 31, 1996. The actual results of operations will usually
differ from projections, because events and circumstances frequently do not occur as
expected, and that difference may be significant.
Major Findings
1992 Final Balancing Account
The fillal1992 Balancing Account is $12,402,000, or $1,494,000 higher than previous
projections.
During the 1993 rate review, actual results for 1992 were known only through
September. The 1992 balancing account was projected based on this partial year's
actual results.
In its current rate application, WMAC reports that the final 1992 balancing account
deficit was $12,977,000, or an increase of $2,069,000 over their previous projection, as
adjusted by us during last year's rate review. As shown in Table 1-2, the increase is
made up of a revenue shortfall of $1,223,000 and an increase in expenses of $846,000.
Table 1-2 also summarizes our adjustments made this year reducing WMAC's reported
1992 balancing account by $575,000.
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WMAC 1994 Rate Application
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Revised 1993 Balancing Account by Turisdiction
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The projected final 1993 balancing account will be $13,165,000, or $4,644,000 higher
than previous projections.
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Our December 10, 1992, report projected a December 31, 1993, combined balancing
account deficit of approximately $8,521,000, prior to any rate adjustments. In their 1994
rate application, WMAC projects that the final 1993 balancing account deficit will be
$12,767,900, or an increase of $4,247,000 over our previous projections. Table 1-3
summarizes the revenue and expense changes made by WMAC and our adjustments,
increasing WMAC's projected balancing account by $397,000. The $4,247,000 variance
reported by WMAC is made up of three components:
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1. Increases in expenses (+$5,038,000); plus
2. Carryover from the change in the 1992 deficit balancing account (+$2,069,000);
offset by
3. Jurisdiction-approved rate increases, net of service reductions that result in
revenue decreases (-$2,860,000).
1994 Projected Revenue Requirement by Tl.;lrisdiction
WMAC requested rate adjustments by jurisdiction, effective January 1,1994, ranging
from no increase to a 42% increase. WMAC calculated the rate increases to amortize
the balancing accounts over three years, except for the Tri-Cities, whose contracts
expire August 31, 1994, and the City of Oakland, which approved a 5% increase for
1994 at the time that 1993 rates were approved.
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Projection Methodology
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WMAC projected their expenses in a manner consistent with that used in previous
years. May 1993, year-to-date expenses were obtained from the general ledger and
escalated for the remainder of 1993. An escalation factor was then applied to the 1993
expenses to project 1994 expenses, and so on.
Expenses were escalated. based on a general inflation factor of 4%. For those expenses
that were not expected to increase with inflation, WMAC recalculated the annual
expense in a lump sum adjustment. Revenue based fees, including franchise fees and
other jurisdictional surcharges, were projected using 1994 projected revenues, including
requested rate increases, multiplied by each jurisdiction's fee percentages.
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Revenues were projected based on actual results during the first five months of 1993,
plus anticipated results to the end of the year. Note, however, that 1994 revenue
projections do not include any projected rate adjustments.
Regulated Profit
The projected 1994 post-tax return on equity of 16% requested by WMAC results in a
post-tax profit of $6,727,000, an increase of $2,632,000 over the amount allowed in 1993
by the Committee. This is equivalent to a pre-tax profit of $10,557,000, or a pre-tax
operating ratio of 90.3%.
Revenue and Expense Adjustments
The proposed adjustments increase WMAC's projected 1993 expenses by $568,000 and
reduce projected 1994 expenses by $869,000 and reduce WMAC's projected 1992 and
1993 revenues by a combined $91.4,000.
We reviewed WMAC's 1993 and 1994 projections for reasonableness. During the
course of our review, we identified areas that we believe warrant adjustment because of
one of the following reasons: "
. Actual revenues and expenses through July 199~, do not support WMAC's
projection of 1994 revenues and expenses;
. Errors were made in the calculation of the projections; or,
. Allocations between franchised and non-franchised operations or among the
franchised agencies were calculated improperly.
Regulated Profit
The Committee set the allowed 1994 pre-tax operating ratio at 93.25% on total
expenses, or $3,567,000 less than requested by WMAC.
This year, the Committee accepted our recommendation to change the basis upon
which the allowed profit is calculated from a return on equity to a pre-tax operating
ratio. This change was made for the following reasons:
1. To enhance the comparability of the allowed return to those returns being
allowed by other jurisdictions that regulate profit; and,
2. To simplify the calculation of allowed profit (which had been complicated by the
escalating equity balance since the purchase of WMAC by Waste Management,
Inc., the implementation of a jurisdictiop-based rate application, a working
capital adjustment, an adjustment for equity associated with the non-franchised
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activities at the Altamont Landfill, and the departure of the Livermore operation
from the franchised operations).
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During each rate review, the Committee determines a reasonable rate of return to be
allowed WMAC in the coming year. That determination is based on several factors,
including:
· The returns achieved by publicly-held solid waste management companies;
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. The returns achieved by private waste management companies as reported in
the annual Robert Morris Associates' (RMA) survey;
· The returns granted by other regulatory agencies to solid waste companies; and,
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· The Committee's assessment of the quality of service provided by WMAC to the
jurisdictions' rate payers.
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This year, the Committee determined that, based on the above factors, the, reasonable
pre-tax operating ratio for 1994 ranged from 87% to 96%. Further, the Committee
determined that, based on the use of a balancing account which guarantees the allowed
profit and the Committee's assessment of WMAC's performance during the past year,
WMAC be allowed a pre-tax operating ratio of 91.6% on expenses net of re~enue-based
fees, which is equivalent to a 93.25% pre-tax operating ratio on total expenses, or an
after-tax profit of approximately 4.3%.
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1994 Overall Rate Adjustment Required
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The required rate adjustments by jurisdiction to meet current operating expenses and
eliminate the balancing account in one year range from a decrease of 27.9% to an
increase of 49.9%.
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After consideration of the adjustments noted above, varying rate increases are required
to reimburse WMAC for the cost of operations, provide the allowed profit, and
eliminate the balancing account deficit in one year.
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Rate adjustments for each jurisdiction will differ based on whether it is relatively more
or less expensive to service its customers and whether previously required increases
have been implemented. Table 1-4 shows the rate adjustment required for 1994
operations, after adjustments to expenses and allocation of profit. Table 1-5 shows the
calculation of the rate adjustment required to eliminate the deficit balancing account by
December 31, 1994, for each jurisdiction. These jurisdictional rate adjustments range
from a decrease of 27.9% in the Ora Lorna Sanitary District to a 49.9% increase in
Newark.
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We recommend that each jurisdiction should adjust its rates (where a deficit balance is
present) by an amount that falls somewhere between the rate adjustment shown on line
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9 of Table 1-4, and the rate adjustment shown on line 9 of Table 1-5, depending on the
number of years assumed to make up the deficit balance. (WMAC requested that the
deficit balance be spread over three year:s to eliminate the deficit balances by December
31, 1996.) Note, however, that in determining the 1994 rate adjustment, there are two
outstanding issues that, when resolved, will impact each jurisdiction's future revenue
requirement:
. The determination of the allowable portion of estimated landfill closure and
post-closure maintenance costs; and,
. The incorporation of recommendations from R. W. Beck's study of the
decentralization of WMAC's accounting and maintenance functions and the
performance of route audits.
Recommendations
Our policy and rate recommendations for the 1994 rate application are summarized
below:
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1. The Committee should require WMAC to improve its accounting controls for
recording advance account transactions. (The advance accounts are used to record
cash disbursements made by WMI corporate on behalf of the local division and to
record cash received from local rate payers that is forwarded to WMI corporate.)
2. CPC costs, as projected by WMAC, should be included in the calculation of 1994
rate scenarios. The inclusion of both 1993 and 1994 epe costs and the approval of
the 1994 rate increase should be dependent upon the conclusion of negotiations for
an agreement regarding the handling of the epe funds collected through the rates.
3. The Committee should perform a detailed review of franchise fee payments by
WMAC (similar to the review performed by the Committee in 1987) as part of the
next rate review.
4. The Committee should reserve the right to make retroactive adjustments, if
necessary, to each jurisdiction's balancing account during the 1995 rate review, to
reflect the implementation of the recommendations accepted by the Committee.
5. The Committee should inform WMAC no later than January 1, 1994, if it plans to
disallow any capital projects proposed by WMAe and included in the franchised
rate application.
6. The Committee should require an agreed-upon procedures review of WMAC's cost
allocation methodology between franchised and non-franchised activities and
among the franchised jurisdictions, to ensure that the allocations are being
performed properly.
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7. The Committee should develop procedures for the multi-year rate application,
revise the rate review manual, and direct WMAC to prepare the 1995 rate
application in accordance with the new procedures.
8. Each jurisdiction should adjust its rates based on consideration of the rate
adjustments shown on Tables 1-4 and 1-5. We have summarized our recom-
mendations below:
a. For those jurisdictions that require a rate increase for current operations (Table
1-4, line 8), we recommend that rates be increased by an amount that falls
between that on Table 1-4, line 8, and on Table 1-5, line 9.
b. For those jurisdictions that require a rate decrease for current operations, but
require a rate increase to eliminate the balancing account, we recommend that
rates be increased by an amount that falls between zero and the percentage
shown on Table 1-5, line 9.
c. For those jurisdictions that require a rate decrease on Table 1-4, line 8, and on
Table 1-5, line 9, we urge caution to avoid causing large rate increases next year.
In some cases it may not be appropriate to decrease rates, depending on the
degree of the decrease indicated, and each individual jurisdiction's goals and
objectives for future rate adjustments. Note, however, that in determining the
1994 rate adjustment, there are two outstanding issues that, when resolved, will
impact each jurisdiction's future revenue requirement:
. The determination of the allowabl~ portion of estimated landfill closure and
post-closure maintenance costs; and,
. The incorporation of recommendations from R. W. Beck's study of the
decentralization of WMAC's aC,counting and maintenance functions and the
performance of route audits.
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Table 1-1
1993 Rate Adjustments vs. Projected-Actual Revenue Changes
Residential Commercial Drop Box Total
Rate Revenue Rate Revenue Rate Revenue Revenue
Change Change(5) Change Change(5) Change Change(5) Change
Alameda 3.3% (1) 1.8% 9.5% 10.1% 9.5% -6.3% 3.9%
Albany 15.0% 9.3% 15.0% (2) 19.7% 15.0% (2) 13.2% 11.1%
Castro Valley 4.0% 4.8% 4.0% 4.1% 4.0% -2.5% 3.8%
Dublin -1.1% (3) -0.3% -12.0% (4) -13.8% 0.0% 3.4% -7.0%
Emeryville 7.0% 8.2% 7.0% 7.8% 16.5% -0.9% 5.3%
Fremont 0.0% -1.3% 0.0% 0.6% 0.0% 1.0% 0.0%
Hayward -9.3% -12.2% -2.3% -7.4% -2.3% 1.8% -6,5%
Newark 10.0% 7.8% 15.0% 12.0% 25.0% 30.4% 16.7%
Oakland 20.7% 12.5% 20.1% 27.4% 26.2% 2.0% 13.0%
Oro Luma -3.9% -5.2% 0.0% -2.2% 0.0% 9.2% -2.0%
Piedmont 30.0% 20.0% 30.0% 23.0% 30.0% 16.4% 19.5%
Union City 14.3% 10.6% 14.4% 17.4% 14.3% 15.2% 14.2%
(1) 3.256% increase to first can; 7.143% increase to second can.
(2) Rate adjustments varied by rate category.
(3) Lump sum reduction of $20,000, plus additional 2% surcharge.
(4) Lump sum reduction of $155,000.
(5) Between Actual 1992 Revenues and Projected 1993 Revenues.
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Table 1-2
Reconciliation Between Prior Year HF&H Projections,
Current Year WMAC Projections, and
Current Year HF&H Projection
1992. Balancing Account ($000'5)
WMAC
Projection Revenue Expense
Last Shortfall Increase WMAC HF&H HF&H
Jurisdiction Year (Increase) 1 (Decrease) 1 Final Adj.'s2 Final
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I
- Alameda 210 (17) 201 394 (220) 174
Albany 398 (17) 9 390 5 395
i
I Castro Valley 356 34 59 449 (41) 408
Dublin (212) (4) 112 (104) (49) (53)
I Emeryville 167 (8) 26 185 (2) 183
I
-
Fremont 1,054 32 (397) 689 114 803
"-"] Hayward 655 38 (51) 642 204 846
!
Newark 561 21 (35) 547 24 571
I
'_] Oakland 7,034 1,199 756 8,989 (555) 8,434
Oro Lorna (327) (14) 79 (262) (110) (372)
.~.J_ Piedmont 396 (3) 82 475 (9) 466
I
J Union City 616 ~) -2 583 ~ 648
: Total3 10,908 1,223 846 12,977 (575) 12,402
-
1 See discussion of changes at pages 19 to 40.
, 2 See discussion of adjustments at page 41.
3 Some minor differences are due to rounding; excludes Livermore.
I
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.
Table 1-3
Reconciliation Between Prior Year HF&H Projections,
Current Year WMAC Projections, and
Current Year HF&H Projection
1993 Balancing Account ($000'5)
WMAC
Projection Revenue Expense
Last 1992 Shortfall Increase WMAC HF&H Adj's2 HF&H /
Jurisdiction Year Changes 1 (I ncrea se ) 1 (Decrease) 1 Proj. 1992 1993 Proj.
Alameda 160 184 (261 ) 332 415 (220) (148) 48
Albany 516 (8) (156) 47 399 5 15 419
Castro Valley 304 93 (99) (83) 215 (41) 15 189
Dublin (488) 108 171 92 (117) (49) (27) (193)
Emeryville 161 18 (142) (152) (115)' (2) (14) (131)
Fremont 939 (365 ) 136 789 1,499 114 301 1,914
Hayward (460) (13) 826 (940) (587) 204 921 539
Newark 937 (14) (487) 143 579 24 80 683
Oakland 7,246 1,955 (2,221) 4,471 11,451 (555) (448) 10,449
Oro Lorna (1,821) 65 95 (83) (1,744) (110) 201 (1,653 )
Piedmont 573 79 (209) 11 454 (9) 2 446
Union City 454 (33) (513) 411 319 65 72 457
Total3 8,521 2,069 (2,860) 5,038 12,768 (575) 397 13,165
1 See discussion of changes at pages 19 to 40.
2 See discussion of adjustments at page 41.
3 Some minor differenq~s are due to rounding.
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_~outh Front Road
Livermore, California 94550
510/447-1300
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A Waste Management Company
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'-,~:C6\VED
OCT 25 1993
C\TY OF DUBLIN
October 22, 1993
Mr. Paul S. Rankin
Assistant city Manager
city of Dublin
100 civic Center Plaza
Dublin, CA 94568
Dear Paul:
Per our recycling agreement with the city of Dublin,
under Section VI, we may request an annual adjustment to
our recycling fee based on the Consumer Price Index.
During the last twelve months, the Consumer Price Index
rose 1.9%. Please review the' attached table. This would
increase the reCYCling fee by three cents per month.
with the city of Dublin's approval, we would like to
increase the recycling fee to $1.37 on January 1, 1994.
Please review the table' and call me to discuss this
matter~
Sincerely,
Q1~
Dan B~tges
Division president
and General Manager
DB/wr
attachment
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EXHIBIT 3
PRELIMINARY ANALYSIS OF PROPOSED 1994 GARBAGE RATES AND THEIR IMPACT ON THE
AMOUNT LEVIED ON THE PROPERTY TAX FOR BASIC SERVICE
The purpose of this Exhibit is to ascertain any significant funding problems
which may be encountered as a result of the Proposed 1994 Resident~al Rate
structure. This analysis was completed with the limited information
available. A more thorough review will be possible at the time that the city
council is requested to establish the 1994/95 annual assessment.
Analysis Of 1993/94 Basic Assessment vs. Preliminary Projected cost
As previously noted, the City Council decision to adjust rates at this time
will not immediately affect the Single Can customer. The purpose of this
section is to com.pare the proposed rates wi th the amount included in the
Annual Assessment. staff have also completed a rough estimate of the
potential impact on the assessment for next Fiscal Year (1994/95), which will
not be levied until mid 1994.
The 1993194 Annual Assessment for BasIc Garbage Service totals $110.22 per
household per year. This equates to approximately $9.19 per month. column A
below, provides a breakdown of the components which went into projecting the
annual assessment required. column B displays the 1993/94 WMAC costs based
upon the 1993 Rates for 6 months plus the Proposed 1994 Rates for 6 months.
These are monies which will be paid by the city from. the Property Tax
assessments collected for residential property owners. Column C is a
projection for Fiscal Year 1994/1995.
1 Can Garbage collection
wI Special Clean-ups
Column A
Actual Assessment
For FY 1993/94
$ 86.10
Column B
Estimated cost
For FY 1993/94
$ 83.58
16.26
$ 99.84
$ 5.22*
CUrbside Recycling
Subtotal portion of
Assessment Pd To Co.
16.38
$ 102.48
$ 5.22
Allowance For Delinquency
County Collection Cost &
Computer Processing
2.52
$ 110.22
2.52*
$ 107.58
TOTAL
column c
Projected Cost
For FY 1994/95
$ 88.55
16.69
$ 105.24
$ 5.39
2.63
$ 113.26
*Due to the lack of accurate data on delinquencies at this time, the
analysis assumes delinquencies and collection costs will be as
originally budgeted.
As shown above, in Fiscal Year 1993/94 amount assessed should be capable of
supportin<<1 the Proposed. 1994 rates. If delinquencies do not exceed the
amount or~ginally projected, there would be a small surplus available, which
would be used to offset the amount of the assessment required for 1994 /
1995.
,
.
.
Preliminary Projection Of Assessment Reauired For 1994/95
Staff has also calculated a potential 1994/95 assessment scenario based upon
the proposed rates. In this calculation it was assumed that no prior year
surplus funds would be available. The County Collection Cost was assumed to
be 1.7% and a 5% delinquency factor was used. A 3% inflationary factor was
added as a rough estimate of any inflationary increase in rates effective
January 1995..
Taking the factors mentioned in the previous paragraph into consideration,
would result in a Fiscal Year 1994/95 annual assessment of $ 113.26. This
would be a 2.76%% increase over the assessment for the previous year. As
noted this projection is extremely rough due to the lack of sufficient data
available at this time. As discussed below, the city Council will also have
the ability to offset the increase with Measure 0 revenue..
=:ii~ ~~i~Y ~~d~ite A Po~ion Of The Servi~es Funded BY The
~_ __5_____ 9- S__l. e _$es-;;ment W1th Measure D Funds
The city will be receiving Measure D funds from the Alameda County ReCYCling
Board.. Although local rate payers are contributing towards Measure 0 on a
per ton basis, the allocation to the city is made on a per capi ta basis.
CUrrent estimates project that the city of Dublin will receive approximately
$150,000 in the first full year that these funds are distributed.. It is
important to note that the legislation which created Measure D provides for a
dramatic reduction in the City'S allocation, beginning in March of 1995.. At
that time it is projected that the city would only receive $ 95,000 on an
annual basis.
Due to the potential volatility of this revenue source Staff would not
recolDlllend excessive use of Measure D funds for operating expenses. It may be
more appropriate to consider one time capital costs in order to avoid future
rate spiking. However, eligible uses of these funds include the provision of
Recycling Progra:ms. As noted above, the 1993/94 Basic Garbage Assessment
includes $ 16.26 per household in Recycling program costs. At the time that
the city council Considers future assessments, it would be possible to
consider underwriting a portion of the cost with Measure 0 funds.
Staff has not recommended a Measure D expenditure Plan at this time due to
the need to consider a variety of factors.. This should include but may not
be limited to: How the funds are used to support programs in all sectors
(residential, mUlti-family, and commercial); Projected future rate increase
for both the curbside and Multifamily programs; and An analysis of the
projected Measure 0 Revenues. It is anticipated that this type of
information should be available in the upcoming months.
At the time that the City council considers the 1994/1995 Basic Garbage
service Property Tax Assessment, staff will recommend a specific level of
Measure D funding.
"
.~
.
E:xh.ibit. 4
Comparison of Proposed 1994 Dublin Garbage Rates To The Cities Of Livermore 1
Pleasanton 1 and San Ramon
RESIDENTIAL
Proposed Dublin*
Livermore**
San Ramon
Pleasanton
(1 Can) or
32 Gallon
$ 9.19
9.64
N/A
N/A
(2 Can) or
60 Gallon
$ 15.14
17.99
11.98***
N/A
(3 Can) or
90 Gallon
$ 21. 09
26.34
14.50***
18.93
* Dublin Rate for the first can of service is based upon dividing the
1993/94 Annual Property Tax Assessment of $110.22 by 12 months.
The proposed additional can cost is $5.95 per can. The amount
associated with the Annual Assessment includes collection costs and
other fees which are not passed on to the Company. 96% of all
Residential Customers subscribe to either 1 or 2 can Service.
** Livermore has service levels which are currently comparable to the
City of Dublin. Collection is completed by the same firm as
Dublin, however, disposal occurs at the BFI Vasco Road facility.
*** San Ramon Anticipates a rate increase in the 1st Quarter of 1994.
San Ramon Staff have indicated that the amount of the increase
could be as high as 30%. This would result in a 60 Gallon can rate
of $15.57 and a 90 Gallon Rate of 18.85.
N/A Means that this level of service is not available.
COMMERCIAL
The following categories of Commercial Service are representative of the
service level, used by 80 percent of Dublin Commercial customers.
Once / Week Collection
1yd 2yd 3yd 4yd 6yd
$25.40 $50.80 $76.20 $101.60 $152.40
33.46 66.90 100.35 133.80 200.70
71.59* 143.09* 204.45* 266.19* 378.17
115.00 185.00 261.00 338.00 491.00
Proposed Dublin
Livermore
Pleasanton
San Ramon
Twice / Wk Service
Proposed Dublin
Livermore
Pleasanton
San Ramon
$57.15
80.80
**
198.00
$107.95
147.70
**
363.00
$158.75
214.60
378.09*
523.00
$209.55
281. 50
497.71*
682.00
$311.15
415.30
725.53
1013.00
* Phone Quotation by Pleasanton Garbage Service. City does not
regulate or set container fees. Other rates shown for
Pleasanton are based upon city Resolution plus $30.81 Monthly
Container Rental.
** Company indicated that it would encourage a different bin size
at once per week.
DROP BOX SERVICE
20 Yard
30 Yard
Proposed Dublin
Livermore
Pleasanton
San Ramon
$ 161. 00
167.00
267.20
364.38
$ 241.50
250.50
400.80
546.53
Proposed city of Dublin
Livermore
Pleasanton
San Ramon
HANDY HAULER
$ 45.00
49.73
75.51
service Is Not Offered
-.
.
,-
RESOLUTION NO. 14 - 93
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
***************************
APPROVING AGREEMENT FOR PROVISIONAL CHARGES
FOR THE CLOSURE AND POST CLOSURE MAINTENANCE
OF ALTAMONT SANITARY LANDFILL
WHEREAS, Oakland Scavenger Company (OSC) is responsible for
the collection and disposal of waste in the City of Dublin pursuant
to a franchise agreement dated March 10, 1986 (as amended); and
WHEREAS, the waste collected pursuant to this agreement is
placed in the Altamont Landfill; and
WHEREAS, the revenues collected by OSC are established
pursuant to rate schedules approved by the City Council; and
WHEREAS, the Joint Refuse Rate Review (JRRRC) reviews requests
by OSC for inclusion of specified expenses through the rate
structure; and
WHEREAS, the JRRRC provides recommendations to the elected
b?dies of the member jurisdictions; and
WHEREAS, OSC has requested ratepayer reimbursement of certain
Landfill Closure/Post Closure (CPC) expenses as part of the 1993
Rate Application; and
WHEREAS, the JRRRC recommends that the final determination of
CPC costs shall be the subject of further negotiations with OSC; and
WHEREAS, the JRRRC anticipates the use of a subcommittee to
negotiate a model Final Closure Post Closure Agreement; and
WHEREAS, the City Council will have an opportunity to review
and adopt the final agreement; and
WHEREAS, the JRRRC has developed. a "provisional Agreement"
(Exhibit A) attached hereto and by reference made a part hereof; and
WHEREAS, the agreement specifies the issues which are to be
negotiated between the parties and the handling of CPC funds
collected during the negotiations and prior to execution of a Final
Agreement; and
WHEREAS, the 1993 JRRRC Rate Review Report dated December 10,
1992 already incorporates the CPC for 1993 into its recommendations.
) ,
NOW, THEREFORE, BE IT'RESOLVED that the City Council of the
City of Dublin does hereby approve the Agreement for provisional
Charges for the Closure and Post Closure Maintenance of Altamont
Sanitary Landfill (Exhibit A) and the Mayor is hereby authorized to
execute said agreement on behalf of the City.
H'~>~' "., ,., ~ _. .. .-. 5
......-.~. . ;" ,,-"" i~"'''''''l ~1. ...."..
'I; iiU1'~V~.J~[Jfj
.""., ..,.) ~':"'d"" .'.'
1I,..w;....~ '+o;._.;.J......_ 1;.1 .oj
.
.
BE IT FURTHER RESOLVED that the City Council acknowledges that the
Joint Refuse Rate Review Committee will utilize a subcommittee to
negotiate a Model Agreement for the final resolution of Closure/Post
Closure costs. The Model Agreement shall be submitted to the City
Council for its review and approval before becoming effective.
PASSED, APPROVED AND ADOPTED this 11th day of January, 1993.
AYES:
Councilmembers Burton, Houston, Howard, Moffatt, and
Mayor Snyder
NOES:
None
ABSENT:
None
/~~~
/ May r
mEST~t_GL
c't Clerk
a: reso14.agenda#11
I I
.
.
AGREEMENT FOR PROVISIONAL CHARGES
FOR THE CLOSURE AND POST-CLOSURE MAINTENANCE
OF ALTAMONT SANITARY LANDFILL
THIS AGREEMENT is made and entered into as of this
("city") and oakland Scavenger Company, a California corporation
11th day of January
, 1993 between the city of Dublin
("OSC") .
THE PARTIES AGREE AS FOLLOWS:
1. RECITALS
This Agreement is entered into in light of the
I
I.
following facts and circumstances:
A. city and ose entered into an Agreement dated.
March 10, 1986
(the "Franchise Agreement") pursuant to which
city granted osc a franchise to collect and dispose of refuse
from within city, and ase undertook to collect and dispose of all
refuse in accordance with law.
B. Refuse collected by OSC from within city is
disposed of at the Altamont sanitary Landfill ("Altamont")
operated by OSC and located in eastern Alameda county.
c. osc has disposed and noW disposes at Altamont
refuse from other communities besides city, located both within
and outside of Alameda County. asc states that the Alameda
county communities whose refuse is now disposed of at Altamont
are, including city, the city of Alameda, the city of Albany,
castro Valley sanitary District, the city of Dublin, the city of .
; I
1
76863.5
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.
Emeryvil1e, the city of Hayward, the city of Oakland, Oro Lorna
sanitary District, and the city of piedmont.
D. Each of these nine agencies is a member of the
Alameda County Joint Refuse Rate Review Committee ("Committee").
pursuant to the Franchise Agreement, and to parallel provisions
in the franchise agreements of the other member agencies, the
Committee evaluates annual applications from OSC for adjustments
to the rates which it is authorized to charge to residents and
businesses in the member agencies' jurisdictions who receive
refuse collection service from osc. city considers the
committee's report and recommendation and periodicallY takes
action to adjust rates which OSC may charge residents and
businesses ("ratepayers") in city.
E. osc is required by California law, including
regulations of the California Integrated Waste Management Board
("CIWMB"), 14 california Code of Regulations sections 17760-
17796, 18250-18277; and the state Water Resources Control Board,
23 california Code of Regulations sections 2580-81, to develop,
have approved, and then implement plans for the closure of
Altamont and for its long term post-closure monitoring and
maintenance. The CIWMB regulations also require OSC to comply
with one or more methods of demonstrating financial
responsibility for its closure and post-closure responsibilities
(14 california Code of Regulations sections 18280-18297).
2
76863.5
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tit
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F. asc contends that proper accrual for the costs of
closure and compensation for compliance with state law are
necessary and proper expenses relating to operation of Altamont.
G. asc has requested the committee to recommend to
its member agencies that asc be authorized to increase rates
charged to ratepayers to cover the costs of complying with these
closure/post-closure requirements at Altamont. city states that
the Committee has, through engineering and financial consultants,
evaluated the feasibility and adequacy of asc's closure and post-
closure plans, and the reasonableness of asc estimates of the
costs thereof. It has also investigated a methodology by which
the closure/post-closure expenses which would be paid for by
ratepayers of Committee member agencies, including city, can be
Altamont. These investigations are sUbstantially completed, but
limited to their fair share based on their proportionate usage of
the Committee's findings as to these items have not been
translated into definitive agreements between the member agencies
and OSC. Moreover, there are issues associated with city's
desire to insure that revenues paid by its ratepayers to asC
intended to cover closure/post-closure expenses are in fact
utilized for those purposes, and these issues are related to the
method of financial assurance which QSC intends to utilize and
have approved by CIWMB. It is expected that the discussion and
definitive resolution of these issues between city and OSC and
between other Committee member agencies and OSC will require at
least 10 months.
l ..
3
76863.5
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.
H. city wishes to approve, on a provisional and non-
precedential basis, an increase in the rates which osc may
charge, the additional revenues from which would be dedicated to
closure/post-closure expenses. The purpose of this Agreement is
to specify the issues which are to be further negotiated between
the parties and the handling of funds generated by the
provisional rate increase during the negotiations prior to
execution of a definitive agreement.
2. NEGOTIATION OF AMENDMENT TO FRANCHISE AGREEMENT.
(a) city and OSC agree to seek to negotiate in good
faith an amendment to the Franchise Agreement (the "Amendment
Agreement") that will address the following issues and such other
matters as the parties may agree upon:
(1) The method by which OSC will demonstrate the
availability of financial resources to conduct closure and post-
closure maintenance activities under Chapter 5, Article 3.5 of
Title 14 of the california Code of Regulations with regard to
Altamont, including, without limitation, the type and terms of
financial assurance that osc will provide;
(2) The method by which OSC will seek to allocate
closure and post-closure maintenance costs among all cities and
other users (both within and outside Alameda county) who use or
have used Altamonti
(3) The portion of the closure .and post-closure
maintenance expenses for Altamont to be borne by ratepayers of
citYi
,.
I'
4
76863.5
-'
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.
(4) The amount, if any, that QSC may collect from
ratepayers of city for the specific purposes of providing the
required financial assurance described in paragraph 2(a) (1) above
and funding for the closure and post-closure expenses, and the
period over which such amount would be collected; and
(5) The method by which the provisional charges
that are collected on an interim basis pursuant to Paragraph 3
below will be applied to payment of closure and post-closure
maintenance expenses and for other purposes as described in
Paragraph 4(c) below.
(b) city may appoint the committee as its
representative in the negotiations contemplated by this
Paragraph 2. Upon receiving written notice of such appointment,
OSC shall recognize and deal with the committee as the city's
representative. Notwithstanding such appointment, however, the
Amendment Agreement will not become effective unless and until it
has been approved by city directly and signed by an authorized
officer of city.
(c) city and QSC will commence such negotiations
promptly following execution of this agreement, and will seek to
execute a definitive agreement amending the Franchise Agreement
with respect to the matters described above no later than
November 1, 1993 (the "Designated Amendment completion Date.")
(d) By agreeing to enter into such negotiations, city
does not explicitly or implicitly agree or acknowledge that it or
the ratepayers in city are in any way responsible for closure or
/ t'
5
76863.5
.
.
post-closure maintenance expenses at Altamont or for providing
funds for such expenses. By agreeing to enter into such
negotiations, QSC does not implicitly or explicitly agree that
city or its ratepayers are not liable in full for such expenses
or for providing funds.
3. PROVISIONAL CHARGES.
(a) city will authorize osc to charge ratepayers in
city provisional charges in the amounts set forth in Schedule A
attached hereto (the "provisional Charges") for periods
commencing on or after January 1 , 1993, and ending on or
prior to the Designated Amendment Completion Date or on such
other date as may be specified in the Amendment Agreement. ~ity
agrees to take whatever steps are necessary to amend its rate
schedule to include the Provisional Charges. The schedule of
provisional Charges has been designed to yield OSC with an amount
of approximately One Dollar and Sixty-Six Cents ($1.66)/ton of
refuse collected from ratepayers in city during the term of this
Agreement. The preceding amount has been selected by city
without reference to the amount of rate increase, if any, that
may ultimately be agreed upon by the parties. OSC may collect
the Provisional Charges in addition to the charges that it is
otherwise permitted to collect under the Franchise Agreement. The
amounts collected as Provisional Charges shall be held separately
and used by OSC only in accordance with the provisions of this
agreement.
," i
6
76663.5
.
.
(b) OSC agrees and acknowledges that city's
authorization of the collection of the provisional charges at
this time is for a limited purpose. OSC further acknowledges
that city's authorization of such collections is not an express
or implied admission or agreement of city that its ratepayers are
responsible for closure or post-closure maintenance expenses or
must contribute to such expenses. The city acknowledges that
OSC's agreement to collection of the provisional Charges as
provided for in this Agreement is not an express or implied
admission or agreement by OSC that the city and its ratepayers
are not liable in full for closure or post-closure maintenance
expenses and contribution for such expenses.
4. ESCROW ACCOUNT.
(a) OSC shall establish and maintain throughout the
period required by this Agreement a separate interest bearing
account with union Bank or with such other bank as may be
approved in writing by city in its discretion (the "Bank") into
which shall be deposited all Provisional Charges collected by OSC
(the "Escrow Account"). All funds and other property rights held
in the EscroW Account, including earnings thereon, are referred
to hereinafter as the "Escrow Funds." The Escrow Account shall
be a passbook savings account or a time deposit with the Bank
with a maturity not later than twelve (12) months from the date
of deposit. OSC shall seek to secure the highest available
interest offered by the Bank on the Escrow Account within the
confines of the preceding sentence. All Provisional Charges
/'
7
76863.5
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.
collected in a month shall be deposited in the EscroW Account not
later than ten (10) days following the end of the month. No
later than the time the EscroW Account is opened, osc will secure
the agreement of the Bank that said account may not be amended,
terminated or modified without the written agreement of city.
OSC shall provide a copy of this Agreement to the Bank. city
shall not be subject to any claim or liability to QSC or any
other person as a result of its approval or disapproval of any
bank with which QSC seeks to establish the Escrow Account.
(b) Escrow Funds, and any part thereof, may be
withdrawn or disbursed from the Escrow Account only upon the
joint signatures and at the joint direction of an authorized
representative of each of city and QSC. until changed by written
,notice from the naming party to the other, the authorized
representative of each shall be the individual holding the
position named in paragraph 5(d) hereof.
(c) All Escrow Funds shall be the property of OSC, but
shall be used only for payment of closure and post-closure
maintenance expenses for Altamont as specified in the Amendment
Agreement, if any. If no Amendment Agreement is entered into
between city and OSC by the Designated Amendment completion Date,
or if such agreement does not expressly deal with the disposition
of the Escrow Funds, said funds shall be disposed of as follows:
(1) If at the time the EscroW Funds are to be
distributed osc has established a trust for performance of
closure and post-closure maintenance obligations at Altamont
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76863.5
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pursuant to the rules and regulations of the CIWMB, the Escrow
Funds shall be distributed to said trust promptly following the
Designated Amendment Completion Date. Any cash, funds or
property so contributed shall be considered to have been paid
toward satisfaction of any amounts theretofore or thereafter
required to be contributed by city's ratepayers for closure and
post-closure expenses, to the extent of the Escrow Funds so
distributed.
(2) In the event that no trust fund has been
established as described in subparagraph (1) above, the Escrow
Funds shall be released to OSC promptly following the Designated
Amendment completion Date. In that event, the aggregate amount
permitted to be collected by OSC from ratepayers for the fiscal
year of the Franchise Agreement that next commences after the
date of distribution shall be reduced by the amount of the
distributed Escrow Funds (inCluding interest earned), and said
reduction shall be implemented by an appropriate proportionate
reduction in the rates that would otherwise be authorized for
said period.
(d) OSC shall keep accurate records with respect to
all Provisional Charges and funds held in the Escrow Account,
including records with respect to earnings thereon. Monthly,
while the Escrow Account is maintained, and within thirty (30)
days following the closing of said account, OSC shall render a
written accounting to city of the funds collected and held in the
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76063.5
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account and transactions in said account since the last
accounting.
(e) Except as expresslY set forth in section 4(c) of
this Agreement, OSC shall have no right, power or authority to
assign, transfer, alienate, encumber, or hypothecate its interest
in the Escrow Account in any manner, nor shall its interest be
subject to claims of OSC's creditors or liable to attachment,
execution or process of law, it being the agreement of the
parties that the funds held in the Escrow Account have been
collected and can be used for only closure or post-closure
maintenance expenses for Altamont and for such other purposes as
are permitted by this agreement.
s. GENERAL.
(a) This agreement shall be binding on the parties
hereto, and the successors and assigns of each.
(b) Except as specificallY provided herein, the
Franchise Agreement remains in full force and effect and
unmodified hereby.
(c) In the event either party commences any legal
action to enforce its rights hereunder, the prevailing party in
such action shall be entitled to recover from the other its costs
and expenses, including reasonable attorneys fees, incurred in
connection with such action.
(d) Any notice or other communication required or
permitted by this agreement to be delivered to or served on any
party to this agreement shall be deemed properlY delivered to,
/.
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76863.5
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served on, and received by the party when personally delivered to
the party, or, in lieu of such personal service, three (3) days
after the notice or communication has been deposited in the U.S.
mail, postage prepaid, addressed to the party at the following
address:
Oakland Scavenger Company
2000 Embarcadero, suite 300
oakland, CA 94606
Attention: Ex LC "nUL v{C'f:. -r...a:.s....oi-J~
city of Dublin
100 Civic Plaza (P.O. Box 2340)
Dublin, CA 9456H
Attention: City Manager
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
!I rTEST: ~,,(J( ~ ~L
C t..LelZK.
CITY;;dIN
BY: ~*.
Peter W. Snyder
Its: Mayor
OAKLAND SCAVENGER COMPANY
Its:
~~V:~
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76863.5
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Schedule A
Provisional Charges
The provisional charges shown below have been calculated by dividing the
Agency's projected 1993 franchised tons (including allocated public tons) by
the total projected 1993 franchised tons and multiplying the quotient by the
projected 1993 closure and post-closure expense included in asc's 1993 rate
application. The result is the Agency's ~roportionate share of the projected
1993 closure and post-closure expense, which is equivalent to $1.66 per
projected ton of solid waste disposed in 1993. The Agency's proportionate
share of the projected 1993 closure and post-closure expense is then divided by
the projected 1993 gross collection revenues at current rates before any 1993
rate adjustment. The quotient is the estimated percentage of projected 1993
gross collection revenues that are required for 1993 closure and post-closure
expense.
The Agency's actual 1993 closure and post-closure expense will be calculated
by ase on a monthly basis by multiplying the Agency's actual tonnage for the
preceding month by $1.66 per ton. ase will deposit $1.66 per ton into the
Agency's Escrow Account referred to in Section 4 of this Agreement.
Agency: Dublin
Projected
1993
Tonnal!e
Proportionate
Closure and
Post-Closure Exuense
Projected
1993
Revenue
Closure and
post-closure Expense
As % of Revenue
25,347
$41,955
$2,357,000
1.78%
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RESOLUTION NO..
- 94
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
***************************
EXTENDING THE TERM OF A PROVISIONAL AGREEMENT WITH OAKLAND SCAVENGER CO.
RELATED TO CLOSURE AND POST CLOSURE MAINTENANCE OF THE ALTAMONT SANITARY
LANDFILL (AS ORIGINALLY APPROVED BY RESOLUTION 14-93)
WHEREAS, On January 11, 1993 the City council adopted Resolution
No. 14-93, authorizing an agreement with Oakland Scavenger Company
(OSC); and
WHEREAS, OSC is now known as Waste Management of Alameda County
(WMAC); and
WHEREAS, the city accepted the recommendation of the Joint Refuse
Rate Review committee that certain Landfill Closure/Post Closure costs
should be the subject of further negotiations; and
WHEREAS, the purpose of the agreement was to specify issues to be
negotiated and the handling of certain funds pending the outcome of the
negotiations; and
WHEREAS, it was anticipated in the agreement that final resolution
of these matters would be complete by November 1, 1993; and
WHEREAS, the parties have indicated that the negotiations will need
to be extended to March 31, 1994; and
WHEREAS, an amendment has been prepared in which, both parties
would agree to extend the terms of the agreement to March 31,1994.
NOW, THEREFORE, BE IT RESOLVED that the city council of the city of
Dublin, does hereby authorize the Mayor to execute the amendment,
attached hereto as Exhibit A and by reference made a part hereof..
PASSED, APPROVED AND ADOPTED this 10th day of January, 1994.
AYES:
NOES:
ABSENT:
Mayor
ATTEST:
city Clerk
rrt\f;~'1~~f.j) ~~i.'
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EXTENSION OF AGREEMENT FOR PROVISIONAL CHARGES
FOR THE CLOSURE AND POST-CLOSURE MAINTENANCE
OF ALTAMONT SANITARY LANDFILL
,! ,/
THIS AGREEMENT is made and entered into as of this 1st
day of November 1993 between the city of Dublin ("city") and
waste Management of Alameda county, Inc., a California
corporation, formerly known as Oakland Scavenger Company
("WMAC") .
WHEREAS, the parties entered into an "Agreement for
provisional Charges for the Closure and post-Closure Maintenance
of Altamont Sanitary Landfill" dated as of January 11, 1993
("Provisional Charges Agreement"); and
WHEREAS, the provisional Charges Agreement committed
the parties to seek to negotiate an amendment to the refuse
collection Franchise Agreement between the parties covering a
number of issues related to the financing of the closure and
post-closure maintenance of the Altamont Sanitary Landfill
( "Al tamont"); and
WHEREAS, the provisional Charges Agreement also
authorized WMAC to collect provisional Charges (in the amount of
approximately $1.66 per Ton) during the course of these
negotiations and to deposit funds so collected in an interest
bearing Escrow Account; and
WHEREAS, the Provisional charges Agreement contemplated
that negotiations would result in a definitive agreement being
concluded by November 1, 1993 and provided for the disposition of
Deccmber 13. 1993
137153.4
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the funds in the Escrow Account on that date if no agreement was
reached; and
WHEREAS, the parties have, through their
representatives, met, exchanged information, and negotiated in
good faith, but have been unable to resolve all issues. As a
result, a definitive agreement amending the Franchise Agreement
to address closure and post-closure maintenance of Altamont has
not been executed; and
WHEREAS, the parties believe it is in their best
interests to allow a further, but limited, period of time within
which to conclude the negotiations and, if possible, execute a
definitive agreement; and
WHEREAS, the parties therefore wish to extend the term
of the provisional Charges Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
section 1. Extension of provisional Charges Agreement
The parties agree to extend the term of the provisional
charges Agreement until March 31, 1994. To effect this
extension, the reference to "November 1, 1993" in section 2(C) of
the provisional Charges Agreement is amended to read "March 31,
1994." All references in the provisional Charges Agreement to
the "Designated Amendment Completion Date" shall be understood to
mean March 31, 1994. The parties agree to continue to seek to
negotiate in good faith an amendment to the Franchise Agreement
that will address the issues listed in Section 2 of the
Provisional charges Agreement.
137153.4
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December 13. 1993
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section 2
WMAC will continue to be authorized to charge ratepayers
./
provisional charges in the amounts set forth in Schedule A to the
Provisional Charges Agreement through March 31, 1994, which amount
will continue to be calculated as $1.66 per Ton. WMAC shall continue
to deposit all sums so collected in the Escrow Account.
section 3
All other terms and conditions of the provisional Charges
Agreement shall continue in full force and effect, except as amended
by section 1 hereof, and shall apply to the extended term and to the
interpretation and enforcement of this Extension Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Extension Agreement as of the date first above written.
CITY OF DUBLIN
Attest:
By:
city Clerk
Its:
GEMENT OF ALAMEDA COUNTY, INC.
,,:;;~f,,<f/
By:
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Its:
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137153.4
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Deeember 13, 1993
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RESOLUTION NO. - 94
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
********************************
AMENDING SCHEDULE OF SERVICE RATES FOR SOLID WASTE COLLECTIONI
ESTABLISHING A MINIMUM SERVICE LEVEL FOR RESIDENTIAL CUSTOMERS
AND
DESIGNATING THE POINT OF COLLECTION FOR SINGLE FAMILY COLLECTION
WHEREAS, the city of Dublin adopted on January 11, 1993
Resolution No. 15-93 which established garbage service rates in
accordance with the 1993 Rate Application; and
WHEREAS, on February 22, 1993 the city council adopted
Resolution No. 26-93, which established a Multi-Family Recycling
Program Fee; and
WHEREAS, on May 24, 1993 the city council further amended the
Rate Schedule by adopting Resolution No. 69-93, which addressed
service changes and implemented the collection of certain
Residential Services as a Property Tax Assessment; and
WHEREAS, a notice announcing a public hearing on the proposed
1994 rate adjustment has been published on December 31, 1993 and
January 6, 1994, as required by the Government Code; and
WHEREAS, Oakland Scavenger Company (OSC) [now called waste
Management of Alameda County (WMAC)] has submitted a 1994 rate
application to the Joint Refuse Rate Review committee (JRRRC) in
accordance with the franchise agreement between the city and OSC;
and
WHEREAS, the JRRRC has recommended rate adjustments based upon
jurisdictional cost of service in a report dated November 24, 1993;
and
WHEREAS, the JRRRC has recommended that the allowed profit be
established on an Operating Ratio basis for 1994; and
WHEREAS, the JRRRC has submitted a rationale in the 1994
report substantiating the Regulated Profit recommendation; and
WHEREAS, in accordance with Section VI of an agreement dated
April 24, 1990 between the city, OSC, and Livermore Dublin Disposal,
certain charges for curbside recycling are allowed; and
WHEREAS, in accordance with the Curbside Recycling Agreement,
beginning in January of 1994, the Company is authorized to collect
$1. 37 per month per household for the curbside recycling service;
and
WHEREAS, the city Council has conducted a pUblic hearing on the
matter on January 10, 1994; and
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WHEREAS, the Solid Waste Ordinance and
Waste Collection and Disposal require the city
a rate schedule and point of collection
residences.
Agreement regarding
council to designate
for single family
NOW, THEREFORE, BE IT RESOLVED that the city council of the
city of Dublin does hereby resolve as follows:
1. Beginning January 1, 1994, the Rate Schedule attached
hereto, marked "Exhibit A" and by reference, made a part hereof,
shall be the official rate schedule until further rescinded or
amended.
2. Beginning January 1, 1994, the cost for curbside recycling
collection shall be $1. 37 per month per residence. This charge
shall be included in the base level of service for residences as
shown in Exhibit A.
3. As described above, this rate reV1Slon is based upon the
recommendation of the Joint Refuse Rate Review Committee findings in
the review of Oakland Scavenger company's 1994 Rate Application
(dated November 23, 1993).
5. The city council finds that the JRRRC recommendation for
an Operating Ratio of 93.25%, used to calculate regulated profit, is
supported by information in the 1994 Review of the Rate Application
Report (November 23, 1993), representing a reasonable return on
investment and, as such, is incorporated into the proposed rate
structure.
6. The city council of the city of Dublin supports the
inclusion of necessary funds in the OSC's rate application to fund
the operations of the JRRRC in 1994.
7. Said rates are in accordance with the city of Dublin Solid
Waste Management Ordinance and the Agreement between the city of
Dublin and Oakland Scavenger Company.
8. The content of this Resolution shall supersede Resolution
No. 69-93 adopted the 24th day of May, 1993.
PASSED, APPROVED AND ADOPTED this 10th day of January, 1994.
AYES:
NOES:
ABSENT:
Peter W. snyder, Mayor
ATTEST:
Kay Keck, City Clerk
a:ResoI5.ag#14
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EXHIBIT A
CITY OF DUBLIN
RATES FOR GARBAGE COLLECTION & DISPOSAL SERVICES CONDUCTED PURSUANT TO A
FRANCHISE AGREEMENT BETWEEN THE CITY OF DUBLIN AND
OAKLAND SCAVENGER COMPANY
[Now Called Waste Management of Alameda County]
I. EFFECTIVE DATE
The rates shown for the collection of refuse within the City of Dublin
are effective as of January 1, 1994.
II. RESIDENTIAL SERVICE
A. Minimum Residential Collection Cost
Minimum residential service shall apply separately to each unit
within a duplex or other attached housing, which receives
individual garbage collection services. The rates shown below
shall apply to the initial can of service and include once per week
collection and disposal of the standard sized container.
Additional services described in Section IV are also provided as
part of the minimum service. The rate shown includes $1. 37 (one
dollar and thirty-seven cents) charge for weekly Curbside
Recycling.
32 gallon container (standard container)
Monthlv Cost
$ 8.63
B. Payment and Billinq for Minimum Residential Service
city shall make arrangements to collect assessments on the property
tax bill for all services identified in Section A above. Further,
paYment for said services shall be made to Company by city pursuant
to agreements and ordinances regUlating solid waste collection.
C. Additional container Collection Costs
Once per week collection of each additional container beyond
service provided under "(A)" above:
32 gallon container (Standard Container)
$ 5.95
D.
Special Services
Large accumulations:
Special Pick-ups:
$8.05 per cubic yard
$12.00 minimum per pick-up
III. DESIGNATION OF POINT OF COLLECTION
For Single Family Residential Service, the above rates shall be for
"back yard service" for regular garbage service. The term "back yard
service" shall mean the container(s) shall be on the outside of and in
close proximity to the structure being served, and at a location which
is the customer's option. Padlocks or other devices which deny the
Collector reasonable access will relieve said collector from
responsibility of such collection. The Curbside Residential Recycling
Program requires that containers be placed in location which can be
easily seen and readily accessible, within five feet from the curb.
IV. ADDITIONAL SERVICES PROVIDED IN RATES
The above rates shall include four (4) annual residential cleanups.
Dates of said cleanups shall be at the discretion of the City upon
reasonable notice to the Company. The rules regulating the special
cleanup shall be approved by the Contractor and the Director. The
Contractor shall separately account for costs associated with this
service and report information as requested by the City.
V. COMMERCIAL AND MULTIFAMILY BIN SERVICE
A. The following rates include collection, disposal, and bin rental at
commercial establishments and mUltifamily projects serviced by
centralized bins. The rates shown are for a monthly period. All
charges are based upon bins being filled no higher than water
level.
Excess rate for waste which exceeds water level: $8.05 per yard.
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Freauencv Monthly Rate
l/week $ 25.40
2/week $ 57.15
3/week $ 88.90
4/week $120.65
5/week $152.40
l/week $ 50.80
2/week $107.95
3/week $165.10
4/week $222.25
5/week $279.40
l/week $ 76.20
2/week $158.75
3/week $241.30
4/week $323.85
5/week $406.40
l/week $101.60
2/week $209.55
3/week $317.50
4/week $425.45
5/week $533.40
l/week $152.40
2/week $311.15
3/week $4'69.90
4/week $628.65
5/week $787.40
l/week $177.80
2/week $361. 95
3/week $546.10
4/week $730.25
5/week $914.40
Volume of Service
1 Yard
1 Yard
1 Yard
1 Yard
1 Yard
2 Yard
2 Yard
2 Yard
2 Yard
2 Yard
3 Yard
3 Yard
3 Yard
3 Yard
3 Yard
4 Yard
4 Yard
4 Yard
4 Yard
4 Yard
6 Yard
6 Yard
6 Yard
6 Yard
6 Yard
7 Yard
7 Yard
7 Yard
7 Yard
7 Yard
B. Commercial Can Service
commercial locations subscribing to service on a per container
basis shall be charged the following monthly rates according to the
size of the container serviced:
32 Gallon container (Standard container)
40 Gallon container (Oversized Container)
45 Gallon container (Oversized Container)
48 Gallon container (Oversized container)
C. MUlti-Family Recycling Service
Monthly Cost
$ 7.45
$ 9.35
$10.50
$10.70
MUlti-Family Rates for Recycling are charged by the Company on the
number of units located in the complex.
MonthlY Cost
$1. 26 per unit
VI. HANDY HAULER
The following rates apply to the collection of a 4 cubic yard Handy
Hauler Collection Bin.
Total Cost for Placement, One Week
Bin Rental & Disposal of container
filled no higher than water level
$45.00
Rental Cost beyond first week
$10.00 per week
Cost for Additional Dump
Excess Charge for Bin Filled higher
than water level
$32.20
$8.05 per yard
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VII. DROP BOX
.
The following rates shall be charged for drop box services rendered.
The cost shall be on a per pick-up basis and costs are based upon the
load not exceeding the water level. certain miscellaneous charges as
noted in subsecti~n (H) may also apply.
A.
B.
C.
D.
E.
F.
G.
6 Cubic Yard Container (Dirt/Rock/Debris)
The pick-up cost of this container
shall be the same as the 14 yard
container due to the weight accommodated.
14 Cubic Yard Container
$8.0S/cubic yard
20 Cubic Yard Container
$8.0S/cubic yard
30 Cubic Yard Container
$8.0S/cubic yard
40 Cubic Yard container
$8.0S/cubic yard
Excess Rate Per Yard
If container loaded above water level
Compacted Rate Per Yard
For service and collection of compacted
materials, the total rate shall include
cubic yard rate.
Rate per Base pick-up
$112.70
$112.70
$161. 00
$241. 50
$322.00
$8.05 per
cubic yard
$16.10 per
cubic yard
H. Miscellaneous Charqes
The following charges are in addition to the container charges
described above.
1.
2.
3.
Flasher Charge
Initial Placement Charge
Weekly Container Rental Fee
Beyond 1st Week
Daily container Rental Fee
After First Week
Stand-by Time
Relocation Fee
Cancellation of Automatic Collection
at End of Rental Period.
4.
5.
6.
7.
$10 . 55 PER PLACEMENT
$23.00
$11.90*
$1. 70/day*
$77.00 per hour
$31.50 per request
$41. 90
*Note: This charge is waived if the following service
frequency is maintained:
Service Level
6 yard/14 yard/20 yard
30 yard
40 yard
a:ExbtAGar.agenda #14
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Freauency
4 pulls/month
3 pulls/month
2 pulls/month