Loading...
CC 2013-05-14_09.b. So County Sanitary Service Solid Waste Rate IncreaseFROM: STEVEN ADAMS, CITY MANAGER �A CONSIDERATION OF - • M SOUTH COUNTY SERVICE FOR INTEGRATED SOLID WASTE COLLECTION RATE INCREASE RECOMMENDATION: It is recommended the City Council adopt the attached resolution approving the South County Sanitary Service (SCSS) integrated solid waste collection rate increase. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: There is no cost to the City or impact on staff resources related to the proposed action. There will be a minor increase in franchise fee revenue from the increase. BACKGROUND: On November 12, 1997, the City entered into a franchise agreement with South County Sanitary Service for collection, diversion and disposal of solid waste. On August 24, 1999, the City also entered into a franchise agreement with SCSS for recycling services. The agreements specify procedures for rate adjustment requests, review and approval. At the June 10, 2008 meeting, the City Council approved an Amended and Restated Solid Waste Collection, Recycling and Greenwaste Franchise Agreement (Franchise Agreement) with SCSS, which extended the franchise for a 15 -year period. Per the franchise agreement, rate review is established in accordance with the "City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates" (Manual). The Franchise Agreement allows for a base rate adjustment every three years and interim rate increases in the other years. In interim rate periods, the operator is limited to increases resulting from inflation, tipping fee adjustments, and franchise or regulatory fee increases. During base rate years, the operator is able to request adjustments due to changes in other operational costs as set forth in the Manual. Item 9.b. - Page 1 CITY COUNCIL INTEGRATED SOLID WASTE 4 MAY 14, i The City last received and approved a 5.15% interim year rate increase from SCSS in December 2011. On September 26, 2012, the City received a base rate increase request of 3.2 %. At the January 8th meeting, staff presented alternative rate structures and the Council selected one of the options that included the addition of a 20- gallon bin. Public notice was distributed per the requirements of Proposition 218. However, at the March 12th meeting, the public notice was found to be flawed, the operator was requested to re- notice the public hearing for May 14th, and the operator was directed to remove the 20- gallon bin option and return to the existing rate structure. ANALYSIS OF ISSUES: The City contracted with consultant Bill Statler to prepare a review of the rate increase request to determine if it complies with the provisions of the City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates. Mr. Statler has expertise on rate adjustments since he was responsible for development of the manual when he served as the Director of Finance for the City of San Luis Obispo. A copy of the review is attached and Mr. Statler will present the findings at the City Council meeting. He has determined the basis for the rate increase request is consistent with the Manual. As a result, staff recommends approval. The review was contracted for jointly with the City of Pismo Beach, City of Grover Beach and Oceano Community Services District. The rate increase has been approved by each of the other jurisdictions. There were no increases in 2009, 2010 and 2012. Part of the 5.15% interim rate increase in 2011 was due to arrangements to compost greenwaste material at the Engel & Gray facility in Santa Maria, which received prior approval from the Council at the recommendation of the San Luis Obispo Integrated Waste Management Authority. The proposed change in rates for residential accounts is as follows: 32- Gallon Container: Current Rate - $15.47 New Rate - $15.97 64 Gallon Container: Current Rate - $20.11 New Rate - $20.75 96 Gallon Container: Current Rate - $24.76 New Rate - $25.55 Notices of the proposed rate increase were mailed to record property owners (and tenants responsible for the account) more than 45 days prior to the public hearing. If, at the conclusion of the public hearing, written protests against the proposed rate increase are received from a majority, the City may not adopt the proposed rates. There are currently 6,075 accounts. Therefore, 3,038 would represent a majority. At the time the report was prepared, there were four protest letters received. The City Council consistently places a high priority on ensuring that increases in rates, fees and taxes levied on the City's residents are minimized as much as possible. While the Rate Setting Process and Methodology Manual provides limited discretion to the Council when reviewing individual rate increases, it is important to emphasize the efforts Item 9.b. - Page 2 CITY COUNCIL INTEGRATED SOLID WASTE RATE INCREASE MAY /:. /. PAGE by Council to institute rate increase protections into the process and Franchise Agreement. The Rate Setting Process and Methodology Manual was designed to ensure that the operator can only be reimbursed for appropriate and reasonable costs through their rates. Most importantly, a clause was added to the Franchise Agreement by the Council when it was renewed that provides the City with the ability to terminate the Agreement if rate increases ever exceed the cumulative cost of living increase up to that date. As a result, while the operator would otherwise be allowed a 5.4% increase under the provisions of the Rate Setting Process and Methodology Manual, they have requested only a 3.2% increase due to the COLA limitation. ALTERNATIVES: The following alternatives are provided for the Council's consideration: - Adopt a Resolution approving the rate increase of 3.2 %; - Continue the item and request additional information; - Do not approve an increase if justification cannot be found in the rate review; - Do not approve the increase if a majority of protests are received; - Provide staff direction. ADVANTAGES: Approval of the rate increase is consistent with the terms of the existing Franchise Agreement. Quality of service provided by South County Sanitary Service has been good. Therefore, the recommended action will enable continuation of uninterrupted refuse collection and recycling services at a reasonable fee level. DISADVANTAGES: While staff believes the fee increase request is reasonable and complies with the terms of the Franchise Agreement, any increase in fees results in a negative financial impact to the City's residents. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: South County Sanitary Service was required to mail notices to all customers and property owners 45 days prior to the public hearing per Proposition 218 and related implementation regulations. A copy of the Proposition 218 notice is attached, which was reviewed by the City Attorney prior to distribution. A copy of all protest letters received will be distributed to the Council. Attachments: 1. Interim Year Rate Increase Request 2. Solid Waste Rate Review 3. Proposition 218 Public Notice Item 9.b. - Page 3 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ESTABLISHING INTEGRATED SOLID WASTE COLLECTION SERVICE RATES WHEREAS, the City of Arroyo Grande establishes rates and charges for solid waste, recycling and green waste collection services pursuant to Public Resources Code Section 40059 (a) and AG MC §§ 8.32.100 and 8.32.210. WHEREAS, South County Sanitary Service, Inc. has submitted a rate increase application (the "application ") in accordance with the City's franchise agreements for solid waste, recycling and green waste collection services; and WHEREAS, the application has been comprehensively reviewed in accordance with the City's rate - setting policies; and WHEREAS, notices of the proposed rate increase were sent to property owners and tenants in accordance with the requirements of Proposition 218 and a public hearing was held on May 14, 2013 to consider protests against the proposed rate increase; and WHEREAS, it was determined at the conclusion of the public hearing that a majority protest to the proposed rate increase does not exist. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: The application for a rate increase is hereby approved and the integrated solid waste, recycling and green waste collection service rates set forth in Exhibit "A" attached hereto and incorporated herein shall become effective on June 1, 2013. On motion of Council Member and on the following roll call vote, to wit: AYES: NOES: ABSENT: , seconded by Council Member the foregoing Resolution was passed and adopted this day of , 2013. Item 9.b. - Page 4 RESOLUTION NO. PAGE 2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Item 9.b. - Page 5 EXHIBIT A SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Service Description Pickups Per Week Current Monthly Rate Effective 11 -1 -2011 Proposed Rate Adjustment % Proposed Monthly Rate Effective 06/01/2013 RESIDENTIAL: 32 Gallon Waste Wheeler 1 $15.47 3.20% $15.97 64 Gallon Waste Wheeler 1 $20.11 3.20% $20.75 96 Gallon Waste Wheeler 1 $24.76 3.20% $25.55 TWO -64 Gallon Waste Wheelers 1 $29.40 3.20% $30.34 ONE 64 & ONE 96 Gallon 1 $34.06 3.20% $35.15 TWO -96 Gallon Waste Wheelers 1 $38.70 3.20% $39.94 Garbage extras (per bag) $4.38 3.20% $4.52 Extended Vacation Service $12.55 3.20% $12.95 Residential customers must use the waste wheelers provided by the garbage company. Notations in parenthesis () refer to information found at the end of this rate schedule, on page 4. APARTMENTS, TRIPLEX, DUPLEX Rates are the same as commercial rates (below). COMMERCIAL DUMPSTERS - ALL AREAS: 1 yd dumpster 1 $76.42 3.20% $78.87 1 yd dumpster 2 $111.50 3.20% $115.07 1 yd dumpster 3 $146.62 3.20% $151.31 1 yd dumpster 4 $187.91 3.20% $193.92 1 yd dumpster 5 $220.92 3.20% $227.99 1 yd dumpster 6 $262.22 3.20% $270.61 1 yd dumpster 7 $318.72 3.20% $328.92 1.5 yd dumpster 1 $86.74 3.20% $89.52 1.5 yd dumpster 2 $134.221 3.20% $138.52 1.5 yd dumpster 3 $189.99 3.20% $196.07 1.5 yd dumpster 4 $247.79 3.20% $255.72 1.5 yd dumpster 5 $301.48 3.20% $311.13 1.5 yd dumpster 6 $340.72 3.20% $351.62 1.5 yd dumpster 7 $398.95 3.20% $411.72 2 yd dumpster 1 $97.07 3.20% $100.18 2 yd dumpster 2 $163.13 3.20% $168.35 2 yd dumpster 3 $231.28 3.20% $238.69 2 yd dumpster 4 $305.59 3.20% $315.37 2 yd dumpster 5 $377.87 3.20% $389.97 2 yd dumpster 1 6 1 $423.30 3.20% $436.85 2 yd dumpster 7 1 $492.18 3.20% $507.93 3 yd dumpster 1 $115.62 3.20% $119.31 3 yd dumpster 2 $218.88 3.20% $225.88 3 yd dumpster 3 305.591 3.20% $315.37 3 yd dumpster 4 $398.51 3.20% $411.26 3 yd dumpster 5 $472.86 3.20% $487.99 3 yd dumpster 6 1 $563.70 3.20%1 $581.74 3 yd dumpster 7 1 $720.00 3.20%1 $743.03 Item 9.b. - Page 6 SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Service Description Pickups Per Week Current Monthly Rate Effective 11 -1 -2011 Proposed Rate Adjustment % Proposed Monthly Rate Effective 0610112013 COMMERCIAL DUMPSTERS - ALL AREAS Con't : 4 yd dumpster 1 $144.55 3.20% $149.18 4 yd dumpster 2 $256.04 3.20% $264.23 4 yd dumpster 3 $367.53 3.20% $379.29 4 yd dumpster 4 $472.86 3.20% $487.99 4 yd dumpster 5 $584.36 3.20% $603.06 4 yd dumpster 6 $693.81 3.20% $716.01 4 yd dumpster 7 $883.58 3.20% $911.85 6 yd dumpster 1 $216.83 3.20% $223.77 6 yd dumpster 2 $384.06 3.20% $396.35 6 yd dumpster 3 $551.30 3.20% $568.94 6 yd dumpster 4 $709.29 3.20% $731.99 6 yd dumpster 5 $876.54 3.20% $904.59 6 yd dumpster 6 $1,040.72 3.20% $1,074.02 6 yd dumpster 7 $1,325.37 3.20% $1,367.78 8 yd dumpster 1 $289.10 3.20% $298.35 8 yd dumpster 2 $512.08 3.20% $528.47 8 yd dumpster 3 $735.06 3.20% $758.58 8 yd dumpster 4 $945.72 3.20% $975.98 8 yd dumpster 5 $1,168.72 3.20% $1,206.12 8 yd dumpster 6 $1,387.62 3.20% $1,432.02 8 yd dumpster 7 $1,767.16 3.20% $1,823.71 The rates shown above include the monthly container rental fee and a semi - annual dumpster cleaning. The rates are the same for bins and garwoods, when volume is identical. Bins and garwoods are types of containers used for recycling. COMMERCIAL GARBAGE CANS - ALL AREAS: 1 Can* 1 $18.58 3.20% $19.17 2 Cans * 1 $39.23 3.20% $40.49 3 Cans * 1 $45.44 3.20% $46.89 4 Cans * 1 $57.80 3.20% $59.65 Garbage extras (per bag) 1 $4.381 3.20% $4.52 Garbage extras (per yard) 1 $9.231 3.20% $9.53 Commercial Waste Wheeler rent $3.381 3.20% $3.49 Compactors (per yard) $12.431 3.20%1 $12.83 * Maximum volume and weight per garbage can : 33 gallons / 80 pounds MISCELLANEOUS CHARGES - ALL CUSTOMERS: Overstacked Garbage & extra bags Minimum /unit each $4.38 3.20% $4.52 Overstacked Greenwaste & extra bags Minimum /unit each $2.19 3.20% $2.26 Overstacked Blue Bin & extra bags Minimum /unit each $2.19 3.20% $2.26 Item 9.b. - Page 7 SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Service Description Pickups Per Week Current Monthly Rate Effective 11 -1 -2011 Proposed Rate Adjustment % Proposed Monthly Rate Effective 06/01/2013 commodity) IN ADDITION TO STANDARD GARBAGE RATES per month $10.94 3.20% $11.29 Monthly charge for additional 96- gallon green waste service per month $3.03 3.20% $3.13 Extended Vacation Service per month $10.19 3.20% $10.52 Waste wheeler cleaning each time 16.311 3.20% $16.83 Trip charge each time $10.94 3.20% $11.29 Non - payment downsize service each time $10.94 3.20% $11.29 wheeler each time $10.94 3.20% $11.29 Non - payment reconnect service each time $26.29 3.20% $27.13 Small item pickup (TV, toilet) each $25.66 3.20% $26.48 Appliance pickup - residential each $36.17 3.20% $37.33 Larger than residential appliance or glass, glass doors, or plate glass $0.00 Item 9.b. - Page 8 SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Service Description Pickups Per Week Current Monthly Rate Effective 11 -1 -2011 Proposed Rate Adjustment % Proposed Monthly Rate Effective 06/01/2013 $0.00 Garbage extras on your scheduled pickup day per yard $9.23 3.20% $9.53 Garbage extras -NOT ON YOUR SCHEDULED PICKUP DAY per yard $25.48 3.20% $26.30 Commercial Waste Wheeler rent per month $3.38 3.20% $3.49 Re- deliver bin on stopped acct each time $31.38 3.20% $32.38 Large Compactors (> 4 yards) per yard $12.48 13.38% $14.15 Small Compactors (4 yards & below) assume 3 to 1 compaction 3 times garbage rate Sunday Service (in additional to arba a service level ) per month $54.76 3.20% $56.51 Recycle bin rental per month $6.09 3.20% $6.28 Stand by time per hour $52.58 3.20% $54.26 Extra bin cleaning $48.93 3.20% $50.50 Damage /Destruction of bins or waste wheelers Short Term Dumpsters: Delivery & Pickup -Bin $31.38 3.20% $32.38 Delivery & Pickup -Waste Wheeler $10.94 3.20% $11.29 Rental Per Day $2.32 3.20% $2.39 Empties Per Yard $25.47 3.20% $26.29 Mattress: Twin Each $11.84 3.20% $12.22 Double Each $21.96 3.20% $22.66 Queen Each $30.40 3.20% $31.37 King Each $35.49 3.20% $36.63 Late Fee 8 Per Month $5.00 $5.00 ADDITIONAL INFORMATION ALL CUSTOMERS: Late Fees are imposed for residential customers over 30 days delinquent and commercial customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill. Please recycle, its cheaper and it helps the Community achieve its AB939 goal to reduce waste. Any additional recycling services are charged out at 50% of the garbage rate. Item 9.b. - Page 9 Attachment 1 South County Sanitary Service .. • 1pipiii - 11 Kallegn!''iIiiiii • 141112:111471MA NRMWE Mille-MA 13! City of Arroyo Grande Steve Adams PO Box 93421 Arroyo Grande, CA 93421 September 26, 2012 Enclosed please find a 2013 Base Year Rate Adjustment Application, asking for a 3.2% increase. The rate - making model shows the actual calculation coming in at 5.4 %. Due to the language in our contract limiting increases to the cumulative total of Bureau of Labor colas the maximum allowable increase is 3.2 %. Over the four year period from 2010 to the projected 2013 our revenues have gone up approximately $733,000. The 2011 increase of 5.15% accounts for $521,000 and growth of $212,000. Expenses have increased by $829,000, led by landfill ($318,000), Fuel ($212,000), franchise fees ($199,000), and all other operating costs ($200,000). There were no increases in 2009, 2010 and 2012. There was a 5.15% increase in late 2011. Due to the time lag from request to effective date, I would ask that you name a consult to perform the review as soon as possible. I can make myself available to the consultant or council members to answer any questions. Thank you Tom Martin General Manager Item 9.b. - Page 10 i r South County Sanitary Service i Base a Adjustment p p Summary 1. Rate Increase Requested Rate Schedule Single Family Residential 2. Economy Service (1 - can curb) 4. Standard Service (2- can curb) 5. Premium Service (3 - can curb) • V ZLOYCOUCIRAU94 Requested Increase 3.2% Rate Schedule' Current Increased Adjustment New Rate Rate (a) Rate $ 15.47 $15.97 $15.97 $ 20.11 $20.75 $20.75 $ 24.76 $25.55 $25.55 (a) Calculated rates are rounded up to the nearest $0.01. 6. Multiunit Residential and Non - residential Certification Rate increases of 3.2% will be applied to all rates in each structure with each rate rounded to the nearest $0.01 To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the Rate Setting Manual. Name: Tom Martin Title: Division Vice - President Signature: Date: 09/25/12 Fiscal Year. 1 -1 -2013 to 12 -31 -2013 Pg. 1 of 6 Cost Per Gallon $0.50 $0.32 $0.27 Item 9.b. - Page 11 South County Sanitary Service BASE YEAR 2013 RATE ADJUSTMENT A LICATIN Financial Information 6. Direct Labor 7. Corporate Overhead 8. Office Salaries 9. Other General and Admin Costs 10 Total Allowable Costs 11, Operating Ratio 12. Allowable Operating Profit 13. Tipping Fees 14. Franchise Fees 15. AB939 Fees 16. Lease Pmts to Affiliated Companie 17. Total Pass Through Costs Historical Current Projected $2,893,508 $2,922,444 $299,373 Base Year 1 2010 2011 2012 2013 2014 (from Pg. 4) Section I- Allowable Costs $2,726,360 $2,796,767 $2,836,773 $2,893,508 $2,922,444 $299,373 $302,666 $312,351 $317;661 $320,838 $574,483 $642,361 $563,031 $574,292 $580,035 $3,680,287 $3,814,924 $3,793,176 $3,806,849 $3,886,792 $7,280,503il $7,556,718JI $7,505,331 il $7,592,310 1 $7,710,108jj Section II- Allowable Operating Proftt 97.0% 101.8% 96.8% 92.0% 93.0% $229,036 ($131,603) $249,699 $660,200 $580,331 Section III -Pass Through Costs $1,526,234 $1,718,522 $1,844,193 $1,844,193 $1,862,635 $1,072,163 $1,097,433 $1,191,972 $1,271,258 $1,296,683 $0 $0 $0 2.010% $0 $0 $0 $0 $0 _... -....- $0 $2,598,397 1 $2,815,955 $3,036,165 $3,115,451 $3,159,3!8jl §ection:L' • :'Bev' `n' `` ai'rement:'•:�:�: ::`•`: � : :�:::`•:��: E�`�i�i�i��` '� E 18. Revenue Requirement $10,107,936 $10,241,070 $10,791,195 $11,367,961 $11,449,757 19. Total Revenue Offsets $10,107,936 $10,241,070 $10,791,19511 $10,841,060 $11,013,200 (from Page 3) Section' V - Net Shortfall (Surplus) 20. Net Shortfall (Surplus) 21. Total Residential and Non - residential Revenue without increase in Base Year (pg.5, line 76) 22. Percent Change in Residential and Non - residential Revenue Requirement 23. Franchise Fee Adjustment Factor (I - 6 percent) Limitation due to cumlative increases 24. Percent Change in Existing Rates $526,901 $10,709,403 $10,709,403 $10,709,403 4.9% 4.9% 4.9% 90.000% 94.000% 92.700% 5.40% 5.21% 5.29% - 2.200" 2.010% - 2.090% 3.20'% 3.20% 3.20% Fiscal Year. 1 -1 -2013 to 12 -31 -2013 Pg'1 °A;u - page 12 South County Sanitary Service Base Year 'Kate 'Adjustment Application Revenue Offset Summary Sectlou vii - t2eve►ue Offsets . Residential Revenue (without increase in Base Yr.) 28. Single Family Residential Multiunit Residential Dumpster 29. Number of Accounts 30. Revenues 31. Less Allowance for Uncollectible Resid Accot 32. Total Residential Revenue $5,888,672 $6,005,760 1 $6,332,725 6,351,090 $6,478,112 intss L $0]j $5,888,672 $6,005,760 $6,332,725 1 $6,351,090]1 $6,478,112 Non - residential Revenue (without increase in Base Yr.) Account Type Non - residential Can 33. Number of Accounts 34. Revenues Non - residential Wastewheeler 35. Number of Accounts 36. Revenues 10 1 10 1 77F011 10-] Historical Current Projected $15,005:]l $15,155 Base Year 2010 2011 2012 2013 2014 Residential Revenue (without increase in Base Yr.) 28. Single Family Residential Multiunit Residential Dumpster 29. Number of Accounts 30. Revenues 31. Less Allowance for Uncollectible Resid Accot 32. Total Residential Revenue $5,888,672 $6,005,760 1 $6,332,725 6,351,090 $6,478,112 intss L $0]j $5,888,672 $6,005,760 $6,332,725 1 $6,351,090]1 $6,478,112 Non - residential Revenue (without increase in Base Yr.) Account Type Non - residential Can 33. Number of Accounts 34. Revenues Non - residential Wastewheeler 35. Number of Accounts 36. Revenues 10 1 10 1 77F011 10-] 10 $5,419:]l $5,448 1 $14,899 11 $15,005:]l $15,155 2181 2201 1 221221 $366,794 $368,804 $151,014 $152,086 11 $153,607 Non - residential Dumpster 37. Number of Accounts 1 1925 ]1 1912 1 711907 1907 38. Revenues $3,800,790 $3,816,704 $4,270,699 $4,301,021 $4,344,031 39. Less: Allowance for Uncollectible Non -resid $0 l0 _$011 $0 1 $ ] 40. Total Non - residential Revenue 11 $4,173,00 $4,190,956 $4,436,612 1 $4,468,112 $4,512,79 45. Interest on Investments $46,262]1 $21,81fll $21,858 $21,858 $22,295 46. Other Income �_:] $22,544 $ $0 �_ $0 47. Total Revenue Offsets $10,107,93 $10,241,070 $10,791,195 11 $10,841,060 $11,013,200 Fiscal Year: 1 -1 -2013 to 12 -31 -2013 Pg. 3 of 6 Item 9.b. - Page 13 South County Sanitary Service Base Year Rate Adjustment li ti Cost Summary for Base Year Section VIII -Base Year Cast Allocation Description of Cost BASE YEAR 2010 2 2012 2013 Labor Payroll Taxes $2,527,980 $2,591,830 $2,627,462 $2,680,011 11 $198,380 $204,937 $209,311 $213,497 48. Total Direct Labor $2,726,360 $2,796,767 $2,836,773 1 $2,893,508 49. Corporate Overhead Less limitation (enter as negative) $516,009 $483,655 $479,800 $489,396 ($216,636) ($180,989) ($167,449) ($171,735) Total Corporate Overhead Office Salary Payroll Taxes $299,373 $302,666 $312,351 $317,661 $540,665 $593,655 $523,690 $534,164 $33,818 $48,706 $39,341 $40,128 50. Total Office Salaries Allocated expenses Bad Debt Bond expense Computer services Depreciation on Bldg and Equip Depreciation on Trucks /Containers Drive Cam fees Dues and Subscriptions Gas and oil Interest Expense Laundry Legal and Accounting Miscellaneous and Other Office Expense Operating Supplies Other insurance Other Insurance - medical Other Taxes Outside Services Postage Public Relations and Promotion Permits Rent Telephone Tires (included in repairs) Travel Truck Repairs Utilities 51. Total Other Gen /Admin Costs 11 $574,483 $642,361 $563,031 $574,292 $0 $0 $0 $0 $6,723 $1,971 $31,034 $31,655 $10,845 $9,082 $8,417 $8,585 $1,141,895 $1,022,230 $907,609 $876,307 $27,749 $28,404 $33,363 $34,030 $4,476 $3,944 $3,670 $3,743 $704,088 $839,934 $916,427 $916,427 $24,913 $30,001 $21,408 $21,836 $12,876 $20,751 $16,575 $16,907 $3,517 $4,924 $6,184 $6,308 $151,980 $148,023 $155,677 $158,791 $22,209 $24,674 $25,969 $26,488 $ 482,977 $ 482,256 $489,358 $499,145 $ 487,373 $ 532,191 $ 559,173 $ 575,948 $29,512 $23,909 $19,618 $20,010 $42,948 $101,096 $45,697 $46,611 $8,379 $15,192 $13,235 $13,500 $3,941 $3,871 $2,829 $2,886 $79,688 $75,431 $75,056 $76,557 $54,768 $55,343 $56,050 $57,171 $25,473 $24,668 $23,166 $23,629 $94,533 $123,657 $112,571 $114,822 $5,384 $8,129 $0 $0 $241,139 $221,426 $256,142 $261,265 $12,901 $13,817 $13,948 $14,227 $3,680,287 F_ $3,814,924 $3,793,176 $3,806,849 52. Total Tipping Fees 53. Total Franchise Fee 54. Total AB 939 /Regulatory Fees 55. Total Lease Pmt to Affil Co.'s 56, Total Cost Fiscal Year: 1 -1 -2013 to 12 -31 -2013 i'g- 4 ?e o,�, _ Page 14 South County Sanitary Service Base Year Rate Adjustment Application Base Year Revenue Offset Summary Description of Revenue Residential Revenue (without increase in Base Yeai) 57. Single Family Residential Multiunit Residential Dempster 58. Number of Accounts 59. Revenues Section VII- Revenue Offsets Foe Information Purposes Only Overall Total I Franchise Total Refuse Collection Non - franchise Arroyo I Pismo I Grover I Unincorporated Total _$6,351,090', $67351,090 $1,289,298 I $864,086 $872,876 IF $3,324,830 MENM - - -- 1 = - - - - -■ 60. Less Allowance for Uncollectable s i $0 61. Total Residential Revenue $6,351,090' $6,351,090 $1,289,298 $864,086 $872,876 $3,324,830 $0 Non - residential Revenue (without increase in Base Yeas) Account Type Non- resiaenuai k-an 62. Number of Accounts 63. Revenues Non - residential Wastewheeler 64. Number of Accounts 65. Revenues Non - residential Dempster 66. Number of Accounts 67. Revenues 48 48 26 121 101 876 1 $15,005 $15,005 $7,741 $4,959 $2,305 1 $1,579,704 1 $131,657 157 157 1 58 551 44 876 3 $152,086' 11 $152,086 11 $40,088 $89,503 1 $22,495 1 $1,579,704 1 $131,657 19,531 1950 397 294 383 876 3 $4,361;021 $4,169,364 $1,014,670 1 $882,940 1 $692,050 1 $1,579,704 1 $131,657 68. Less: Allowance for Uneollectibie Non - residential Accounts 69. Total Non - residential Revenue 11 `$4,468,111-11 $1,062,499 $977,402 $716,850 $1,579,704 $131,657 74. Interest on Investments $21,85$' $21,858 $0 75. Other Income o 1 $0 76. Total Revenue Offsets $10,841;060 $10,709,403' $2'',351,797 $1,841,488. $1,589,726 $4,904,534 $131,657 Fiscal Year: 1 -1 -2013 to 12 -31 -2013 P_p. 5 of 6 Item 9.b. - Page 15 South, County Sanitary Service Base Year Rate Adjustment Application Operating Information Historical Current Projected -0.3% 5,585 0.5% Percent Percent Percent Base Year Percent 2010 Change 2011 Change 2012 Change 2013 Change 2014 +Seetlon IX-Operating Data Residential Accounts 77. Arroyo Grande Grover Beach Pismo Beach Oceano CSD Nipomo CSD County 78. Routes - Garbage 79. Routes - Recycling 80. Direct Labor Hours 5,594 0.1% 5,600 -0.3% 5,585 0.5% 5,615 0.0% 5,615 4,025 0.9% 4,062 -0.1% 4,058 1.2% 4,108 0.0% 4,108 3,581 0.8% 3,609 -1.0% 3,574 0.5% 3,592 0.0% 3,592 1,623 0.6% 1,633 1.7% 1,660 1.2% 1,680 0.0% 1,680 3,682 1 0.8% 3,710 2.0% 3,786 0.1% 3,789 0.0% 3,789 5,345 2.7% 5,488 5.8% 5,804 -2.1% 5,683 0.0% 5,683 23,850 1.1% 24,102 1.5% 24,467 0.0% 24,467 0.0% 24,467 10 -20.0% 8 0.0% 8 0.0% 8 0.0% 8 6 0.0% 6 0.0% 6 0.0% 6 0.0% 6 331280 -12.5% 29,120 0.0%9,120 14,560 0.0% 29,120 0.0% 29,120 Non - residential Garbage Accounts 80. Arroyo Grande Grover Beach Pismo Beach Oceano CSD Nipomo CSD County 81. Routes - garbage Routes - recycling 82. Direct Labor Hours 496 -1.2% 490 -3.1% 475 1.3% 481 0.0% 481 463 -1.9% 454 -4.4% 434 0.7% 437 0.0% 437 361 1.7% 367 -1.1% 363 -0.6% 361 0.0% 361 205 1.0% 207 -1.9% 203 1.5% 206 0.0% 206 197 13.2% 223 -2.7% 217 -0.9% 215 0.0% 215 480 -3.3% 464 -2.6% 452 0.7% 455 0.0% 455 •2,202 0.1% 2,205 -2.8% 2,144 0.5% 2,155 0.0% 2,155 6 0.0% 6 -16.7% 5 0.0% 5 0.0% 5 2 0.0% 2 0.0% 2 0.0% 2 0.0% 2 16,640 0.0%11 16,640 -12.5%11 14,560 t77 0.0% 14,560 1 0.0%11 14,560 Recyclable Materials - All areas- Commingled Recycling (in tons) Accounts 83, Tri- Cities Nipomo /Oceano CSD 84. County 7,829 0.2% 7,841 1 0.7% 7,894 0.0% 7,894 0.0% 7,894 2,878 0.2% 2,883 1 0.7% 2,902 0.0% 2,902 0.0% 2,902 921 0.2% 922 1 0.7% 929 0.0% 929 0.0% 929 1 11,628 1 0.2 %1 11,646 1 0.7 %1 11,725 1 0.0 %1 11,725 1 0.0 %1 11,725 Recyclable Materials - All areas -Green waste Recycline Routes Tons Collected Direct Labor Homy 4 0.0% 28.7% 4 0.0% 2.0% 4 0.0% 7.9% 4 0.0% 0.0% 4 8,400 10,809 11,026 11,894 11,894 10,400 0.0% 10,400 0.0%1 10,400 20.0% 12,480 0.0% 12,480 Garbage Tons Collected r42,880 -8,9%1 39,063 1 3.5% 40,417 1 0.0%1 40,417 1 0.0%1 40,417 Fiscal Year. 1 -1 -2013 to 12 -31 -2013 P_q. 6 of 6 Item 9.b. - Page 16 • 1 San'tary Service SOLID WASTE RATE REVIEW 1 tt, ffi�l- Attachment 2 Item 9.b. - Page 17 Solid Waste Rate Review December 1 Report Purpose Overview of Findings Rate Recommendations Rate Summary for Residential Customers Background Rate Review Workscope Revenue and Rate - Setting Objectives Cost Accounting Issues Financial and Operational Overview Costs by Type Revenues by Source Service Accounts by Type Rate - Setting Process and Recent Rate History Rate - Setting Methodology Are the Costs Reasonable? Detailed Cost Review Trends in External Cost Drivers Rates in Comparable Communities What Is a Reasonable Return on These Costs? Cost Categories Preparing the Rate Request Application Implementation Optional Cost of Living Limit Coordination with Other Agencies Summary 'D ► 1, Base Year Rate Request Application from South County Sanitary Service 1 1 2 2 2 3 4 4 7 7 7 7 8 9 9 9 10 10 -. 11 11 12 12 13 13 13 Item 9.b. - Page 18 , - • n • •'. •. X, i1- 1,f �:• � it i December 18, 2012 South County Sanitary Service SOLID -f E RATE REVIEW For the Communities of Arroyo Grande, Grover Beach, Oceano and Pismo Beach The purpose of this report is to review the rate increases requested by South County Sanitary Service (SCSS) for the Cities of Arroyo Grande, Grover Beach and Pismo Beach and the Oceano Community Services District, and to make rate recommendations to these four agencies as appropriate. SCSS provides similar services to each of these agencies under formally approved franchise agreements that regulate rates and establish procedures for considering rate increases. Because the financial information for SCSS is closely related for these four agencies, this report jointly reviews rate requests and provides recommendations for each of them. OVERVIEW OF FINDINGS ® SCSS has fully provided the supporting documentation required for rate requests under the franchise agreements in Arroyo Grande, Oceano, Pismo Beach and Grover Beach. SCSS's complete rate adjustment application is provided in the Appendix. ® SCSS provides a broad level of high - quality service to these four agencies— including garbage, recycling and green waste collection and disposal as well as hauler - provided "waste wheeler" containers for all three services —at very competitive rates compared with many other communities. In fact, even with the proposed rate increase, rates in these four agencies will be among the lowest of those surveyed. ® SCSS has done a good job of managing costs and revenues, especially in light of cost pressures in key areas such labor, insurance, fuel and fleet replacement costs. -1- Item 9.b. - Page 19 Rate Recommendation It is recommended that the governing bodies of each agency adopt SCSS's requested Base Year rates for 2013, which reflect a 3.2% across - the -board rate increase for all four agencies. As discussed in greater detail below, this is less than the rate increase of 5.4% that would otherwise be allowed under the adopted rate - setting methodology due to an optional process set forth in the franchise agreements. Optional Cost of Living Limit. Along with establishing the rate review methodology, Section 8.3 of the franchise agreements provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase (assuming it was submitted in accordance with the rate - setting methodology). It is important to note that this provision does not directly limit rate increase requests by SCSS to an amount that may be less than that allowed under the rate - setting methodology. However, subjecting the franchise agreement to possible termination if the rate request is greater than the cost of living threshold provides a strong incentive for SCSS to do so. As detailed below, the cost of living increase threshold for SCSS to avoid triggering the potential for termination is 3.25 %. Its requested increase of 3.2% is slightly below this amount. Rate Summary for Residential Customers Table 1 summarizes the current and proposed rates for single - family residential (SFR) customers. As reflected in this summary, the increases will be very modest. For example, for collection of a 32- gallon garbage container (the most common SFR service level) as well as separate waste wheelers for recycling and green waste, the proposed monthly rate will increase by 45 cents on average for the four agencies. LC , • ,� l In September 2012, SCSS submitted a "base year" rate request for 2013. Its rate request was prepared in accordance with the rate review process and methodology formally set forth in its franchise agreements with Arroyo Grande, Grover Beach, Oceano and Pismo Beach. In establishing a rate- setting process and Table 1. Single Family Residential Rates methodology, each of these franchise agreements specifically references the City of San Luis Obispo's Rate Setting Process and -2- Item 9.b. - Page 20 Container Size (Gallons) 32 64 96 r e ¢ e Arroyo Grande $15.97 $20.75 $25.55 Grover Beach 14.47 19.57 24.64 Oceano 12.94 18.62 36.43 Pismo Beach 14.21 28.42 42.63 24.76 Arroyo Grande 15.47 20.11 Grover Beach 14.02 18.96 23.88 Oceano 12.54 18.04 35.30 Pismo Beach 13.77 27.54 41.31 Arroyo Grande 0.50 0.64 0.79 Grover Beach 0.45 0.61 0.76 Oceano 0.40 0.58 1.13 Pismo Beach 0.44 0.88 1.32 methodology, each of these franchise agreements specifically references the City of San Luis Obispo's Rate Setting Process and -2- Item 9.b. - Page 20 Methodology Manual for Integrated Solid Waste Management Rates. This comprehensive approach to rate reviews was adopted by San Luis Obispo in 1994, and establishes detailed procedures for requesting rate increases and the required supporting documentation to do so. It also sets cost accounting standards and allowable operating profit ratios. As noted above, the financial information for Arroyo Grande, Grover Beach, Oceano and Pismo Beach is closely related. For this reason, these four agencies jointly contracted with William C. Statler (who has extensive experience in evaluating rate requests in accordance with the adopted methodology) in November 2012 to evaluate SCSS's rate increase application. This is the fourth Base Year analysis performed under this rate - setting methodology. The first was prepared in September 2001; second in August 2004; and the third in 2007. As discussed below, several Interim Year rate reviews have prepared since then, most recently in 2011. Franchise Agreement Summary Historically, each agency has had its own approach to determining service levels and adopted differing franchise agreements accordingly. While these became similar beginning in 1999, in 2008 the Cities of Arroyo Grande, Grover Beach and Pismo Beach adopted renewed Table 2. Franchise Agreement Effective Dates franchise agreements, followed by the Arroyo Grande June 10, 2008 Oceano Community Service District in Grover Beach July 7, 2008 Summer 2010, which are the same in all key Oceano July 14, 2010 provisions: Pismo Beach June 3, 2008 ® Each agency contracts with SCSS for garbage, green waste and recycling; and SCSS provides the container (waste wheelers) for each service. ® Each agreement is for 15 years. ® As noted above, each agency has adopted the same rate - setting methodology, including the option of terminating the agreement within nine months following approval of the requested rate increase if it exceeds the cost of living threshold. ® All agencies have adopted franchise fees of 10 %. This report addresses four basic questions: • Should SCSS be granted a rate increase? And if so, how much? • How much does it cost to provide required service levels? • Are these costs reasonable? • And if so, what is a reasonable level of return on these costs? -3- Item 9.b. - Page 21 The following documents were closely reviewed in answering these questions: • Franchise agreements and amendments for each agency • Audited financial statements for SCSS • City of San Luis Obispo's Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (Rate Manual) • SCSS rate increase application and supporting documentation • Follow -up interviews, correspondence and briefings with agency and SCSS staff • Rate surveys of Central Coast communities 0 s, ! IM111 J urel l " In considering SCSS's rate increase request, it is important to note the revenue and rate setting objectives for solid waste services as set forth in the franchise agreements via the Rate Manual. Revenues. These should be set at levels that: • Are fair to customers and the hauler. • Are justifiable and supportable. • Ensure revenue adequacy. • Provide for ongoing review and rate stability. • Are clear and straightforward for the agency and hauler to administer. Rate Structure. Almost any rate structure can meet the revenue principles outlined above, and generate the same amount of total revenue. Moreover, almost all rate structures will result in similar costs for the average customer: what different rate structures tell us is how costs will be distributed among non - average customers. The following summarizes adopted rate structure principles for solid waste services: • Promote source reduction, maximum diversion and recycling. • Provide equity and fairness within classes of customers (similar customers should be treated similarly). • Be environmentally sound. • Be easy for customers to understand. COST ACCOUNTING ISSUES Or: Who's Paying What? As noted above, SCSS's financial operations for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are closely related. Keeping costs and revenues segregated is further complicated by the fact that SCSS, as a subsidiary of Waste Connections Incorporated (which acquired the parent company in April 2002), shares ownership with the following local companies: San Luis Garbage Company Mission Country Disposal Morro Bay Garbage Service -4- Item 9.b. - Page 22 • Coastal Roll -Off Service • Cold Canyon Land Fill Additionally, within the South County, SCSS's service area includes: • City of Arroyo Grande • City of Grover Beach • City of Pismo Beach • Oceano Community Services District • Nipomo Community Services District • Avila Beach Community Services District • Other unincorporated areas in the South County such as Rural Arroyo Grande Cost Accounting System Between Companies. Separate "source" accounting systems are maintained for each company. Moreover, audited financial statements are prepared for each company by an independent certified public accountant; and SCSS's auditors have consistently issued "clean opinions" on its financial operations. In short, good systems are in place to ensure that the financial results reported for SCSS do not include costs and revenues related to other companies. Additionally, virtually all of the financial operations of SCSS and its affiliated companies are regulated by elected governing bodies such as cities, special districts and the County. Within the SCSS Service Area. Within the SCSS service area, a combination of direct and allocation methodologies are used in accounting for costs and revenues between communities. In general, revenues are directly accounted for each franchising agency, while costs are allocated using generally accepted accounting principles. Cost Accounting Findings. The accounting and financial reporting system used by SCSS is reasonable and consistent with generally accepted accounting principles and practices. It treats similar costs similarly (such as collection and disposal, where there are no significant differences in service levels and unit costs between the four agencies), while recognizing community differences (such as different franchise fee rates). Because the financial operations of SCSS are closely related for all of the communities it serves, there are significant advantages to performing concurrent reviews. Area of Possible Concern. While the service characteristics and resulting per unit costs are the same for Arroyo Grande, Grover Beach, Oceano and Pismo Beach, this is unlikely to be true for the other areas in South County serviced by SCSS. Because of their lower densities, collection costs are probably higher in these areas, but these are not accounted for separately by SCSS. On the other hand, there are three mitigating factors that reduce this concern: • Higher rates. Depending on service type, rates are up to 30% higher in these areas, recognizing the higher collection costs for similar services. In short, these rate differentials significantly mitigate "equity" and cost accounting concerns. - 5 - Item 9.b. - Page 23 �.. Solid Wasfe Rate Review Smaller percentage of accounts. The four agencies covered by this report account for about two - thirds of the accounts serviced by SCSS. Accordingly, while there may be "cost per account" differences in these other areas, they account for a smaller portion of SCSS operations. ® About 40% of revenues from non - residential accounts. 41% of SCSS revenues come from non - residential accounts, which have the same rate structure and similar service- versus- cost characteristics throughout the SCSS service area. If costs for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are so similar, why are the residential rates so different? The short answer is: history and different approaches to rate structure philosophies. History Until 1999, service levels under the franchise agreements with SCSS between these four agencies were significantly different. The rates in place at that time became the basis for subsequent rate reviews. Rate Structure Principles Most significantly, each agency has adopted different rate structure principles to recover similar costs. For example, Pismo Beach has adopted a rate structure for its residential customers that more closely reflects a "pay -as -you- throw" philosophy under which the "per gallon" costs for 32, 64 and 96 gallon containers are the same (for example, a 64- gallon container costs twice as much as a 32- gallon one.) This results in lower monthly costs for 32- gallon customers and relatively higher rates for 64 and 96- gallon customers. On the other hand, Arroyo Grande has adopted rates that do not have as much difference between container sizes (but still offer an incentive for smaller containers over larger ones), recognizing collection economies of scale for larger versus smaller containers. In this case, 32- gallon containers in Arroyo Grande are more expensive than in Pismo Beach, but 64- gallon containers are less. Both rate structures have their strong points: in the case of Pismo Beach, rates are more reflective of disposal costs, whereas in Arroyo Grande they are more reflective of collection costs. But the important point is that the revenue generating capability is the same even though the rates are different. Non- Residential Rates Lastly, non - residential rates (which account for 41% of SCSS revenues) are similar in all four agencies: it is only in residential rates that there are significant differences between communities. -6- Item 9.b. - Page 24 While detailed financial and service information is provided in the SCSS rate request application (Appendix), the following summaries their actual costs, revenues and account information for 2011 (the last fiscal year for which there are audited financial statements at this time) for all areas serviced by them. Costs by Type. Total expenses for 2011 (after deducting for non - allowable and limited costs as discussed later in this report) were $10.4 million. As reflected in Table 3, just four cost areas accounted for slightly over 75% of total costs: ® Direct labor and contract collection services: 28% ® Vehicle operations and maintenance (including insurance and depreciation): 22% ® Tipping fees (landfill, recycling and composting costs): 16% ® Franchise fees: 11% Revenues by Source. Total revenues in 2011 were $10.2 million —about $171,000 less than expenses. As reflected in Table 4, 58% of SCSS's revenues come from single - family residential accounts. Services to multi- family residential and non- residential customers account for 41 % of their revenues, with a very small part (1 %) from other revenues such as interest earnings. Service Accounts by Type. While single- family residences account for 58% of revenues, they represent 92% of total accounts (Table 5). This reflects the fact that per account, multi - family and non - residential customers generate more solid waste than single- family residential customers (and thus more revenue per account). Table 3. Costs By Type: $10.4 Mullion ❑ Other Costs 13% & ® Direct Labor & ead Overhead Outside 10% Services 28% ❑ Franchise Fees 11% ® Vehicle Operations & (3 Tipping Fees Maint 16% 22% -7 Item 9.b. - Page 25 Solid Waste 12ate Review Under the Rate Manual, the rate - setting process follows a three -year cycle: ® Base Year. The first year of the cycle —the Base Year— requires a comprehensive, detailed analysis of revenues, expenses and operating data. This information is evaluated in the context of agreed upon factors in the franchise agreements in determining fair and reasonable rates. As noted above, the last Base Year analysis for SCSS under this approach was prepared in August 2007. ® Interim Years. In both the second and third years, SCSS is eligible for Interim Year rate adjustments that address two key change factors: changes in the consumer price index for "controllable" operating costs; and changes in "pass- though costs" (primarily tipping fees), which SCSS does not control (they are set by the County Board of Supervisors). These adjustment factors are "weighted" by the proportionate share that these costs represent of total costs. For example, in the current Base Year analysis for 2013, controllable costs account for 71 % of total costs, with pass through costs (tipping and franchise fees) accounting for 29 %. The rate review for the two Interim Years requires less information and preparation time than the Base Year review, while still providing fair and reasonable rate adjustments. As discussed in the 2011 Interim Year review, SCSS did not request a rate increase in 2010 (which would have been the "normal" cycle to do so), and accordingly, did not submit a Base Year rate application. However, SCSS did submit a rate request in 2011, using an Interim Year methodology. The reasonableness of using the resulting "hybrid" approach was discussed in detail in the 2011 Interim Year report, which concluded that this approach was reasonable given the circumstances. However, that report recommended that the next rate review use the Base Year methodology. SCSS has followed this recommendation; and with the 2013 rate application, SCSS is now back on the "normal" three year cycle. Accordingly, Interim Year rate requests can be anticipated for 2014 and 2015. Rate Increase History. The following summarizes the Interim Year rate increase requests submitted by SCSS since the last Base Year review in 2007: Table 6. Recent Rate Increase History Agency Base Year Review 2007 Interim Year Reviews 2008 2009 2010 2011 Arroyo Grande 3.00% 0.00% 0.00% 0.00% 5.15% Grover Beach 3.00% 0.00% 0.00% 0.00% 5.15% Oceano 3.00% 0.00% 0.00% 0.00% 5.15% Pismo Beach " 2.90% 0.00% 0.00% 0.00% 5.15% In 2007, the franchise fee rate in Pismo Beach was 6% compared with 10% in the other three agencies, and as such, its rate increase was slightly less. In July 2011, Pismo Beach adopted a 10% franchise fee, bringing it in alignment with the other three agencies (as well as most other agencies in San Luis Obispo County). In implementing the 10% rate, Pismo adopted an added 3.9% increase beyond the interim year rate increase of 5.15% requested by SCSS. -8- Item 9.b. - Page 26 Solid Waste Rate Review Placed in the context of the modest rate increases for the past five years, the proposed rate increase of 3.2% reflects a high level of rate stability and price containment for SCSS customers. Are the Costs Reasonable? The first step in the rate review process is to determine if costs are reasonable. There are three analytical techniques that can be used in assessing this: ® Detailed review of costs and service responsibilities over time. ® Evaluation of external cost factors, such as general increases in the cost of living (as measured by the consumer price index). ® Comparisons of rates with other communities. Each of these was considered in preparing this report, and the following summarizes the results. Detailed Cost Review In its rate application, SCSS provides detailed financial data for five years: • Audited results for the two prior years (2010 and 2011). • Estimated results for the current year (2012, which have not yet been audited). • Projected costs for the Base Year (2013). • Estimated costs for the following year (2014). This allows for a detailed analysis of changes in key cost components such as labor, repairs, fuel, insurance and tipping fees. In this case, its submittal shows that overall SCSS has done a good job of containing costs. Excluding pass- through costs (like tipping fees and franchise fees, which SCSS does not control), very modest cost increases in "controllable" cost are projected: Table 7. Cost Trend Summary Not surprisingly, fuel costs are the only significant cost increase, rising by 9.1 % in 2012 but projected to level -off in 2013. The only other significant changes are related: as depreciation expenses decrease due to an aging fleet (down by 11.2 % in 2012 and another 3.4% in 2013), IMI Item 9.b. - Page 27 Actual Estimated Projected Percent Increase 2011 2012 2013 2012 2013 Direct Labor 2,796,767 2,836,773 2,893,508 1.4% 2.0% Allowable Corporate Overhead 302,666 312,351 317,661 3.2% 1.7% Office Salaries 642,361 563,031 574,292 - 12.3% 2.0% Depreciation 1,022,230 907,609 876,307 - 11.2% -3.4% Truck Repairs & Tires 345,083 368,983 376,087 6.9% 1.9% Fuel & Oil 839,934 916,427 916,427 9.1% 0.0% Insurance 1,014,447 1,048,531 1,075,093 3.4% 2.5% Other Costs 593,230 551,626 562,935 -7.0% 2.1% Total Controllable Costs $7,556,718 $7,505,331 $7,592,310 -0.7% 1.2% Not surprisingly, fuel costs are the only significant cost increase, rising by 9.1 % in 2012 but projected to level -off in 2013. The only other significant changes are related: as depreciation expenses decrease due to an aging fleet (down by 11.2 % in 2012 and another 3.4% in 2013), IMI Item 9.b. - Page 27 truck repairs are estimated to increase by 6.9% in 2012, with a modest increase of 1.9% projected in 2013. Trends in External Cost Drivers The most common external "benchmark" for evaluating cost trends is the consumer price index (CPI). For the most recent year available (October 2011 to October 2012), the U.S. city average for all urban consumers (U.S. CPI -U) increased by 2.2 %. The controllable cost decrease of 0.7% in 2012 and projected increase of 1.2% in 2013 compare favorably with this CPI benchmark. Rates in Comparable Communities Lastly, reasonableness of rates (and underlying costs) can also be evaluated by comparing rates with comparable communities. However, survey results between "comparable" communities need to be carefully weighed, because every community is different. For example, even in the South County where service levels and costs are very similar, there are rate differences. In short, making a true "apples -to- apples" comparison is easier said than done. Nonetheless, surveys are useful assessment tools —but they are not perfect and they should not drive rate increases. Typical reasons why solid waste rates may be different include: • Franchise fees and AB 939 fee surcharges • Landfill costs (tipping fees) • Service levels (frequency, quality) • Labor market • Operator efficiency and effectiveness • Voluntary versus mandatory service • Direct services provided to the franchising agency at no cost, such as free trash container pick -up at city facilities, on streets and in parks • Percentage of non - residential customers, and how costs and rates are allocated between customer types • Revenue collection procedures: Does the hauler or the city bill for service? And what are the procedures for collecting delinquent accounts? • Services included in the base fee (recycling, green waste, containers, pick -up away from curb) • Different rates structures • Land use and density (lower densities will typically result in higher service costs) • Mix of residential and non - residential accounts With these caveats, the following summarizes single - family residential rates for other cities in the Central Coast area compared with the proposed rates for SCSS. As reflected below, even MDR Item 9.b. - Page 28 with the proposed rate increases, Arroyo Grande, Grover Beach, Oceano and Pismo Beach will have among the lowest rates among the agencies surveyed. Table 8. Sinele- Family Residential Rate Survev: December 2012 Summary: Are the costs reasonable? Based on the results of the three separate cost - review techniques -trend review, external factor review and rate comparisons- SCSS's costs are reasonable. What Is a Reasonable Return on these Costs? After assessing if costs are reasonable, the next step is to determine a reasonable rate of return on these costs. The rate- setting method formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their franchise agreements with SCSS includes clear criteria for making this assessment. It begins by organizing costs into three main categories, which will be treated differently in determining a reasonable "operating profit ratio:" Controllable Costs (Operations and Maintenance) • Direct collection labor ® Fuel • Vehicle maintenance and repairs ® Depreciation • Insurance ® Billing and collection Pass - Through Costs • Tipping fees • Franchise and "AB 939" fees (recycling, source reduction, household hazardous waste programs) • Payments to affiliated companies (such as leases, trucking charges and AB 939 fees) Excluded and Limited Costs • Charitable and political contributions ® Non -IRS approved profit- sharing plans • Entertainment ® Fines and penalties • Income taxes ® Limits on officer compensation -11- Item 9.b. - Page 29 Container Size (Gallons) 30-40 60 -70 90 -101 Atascadero $20.04 $35.16 $49.41 Morro Bay 14.33 28.66 42.99 Paso Robles 26.42 34.57 38.13 San Luis Obispo 12.61 25.22 37.81 Santa Maria n/a 25.49 28.91 San Miguel 27.15 42.60 58.45 Templeton 23.80 34.80 38.80 ® W ® W ® W Arroyo Grande 15.97 20.75 25.55 Grover Beach 14.47 19.57 24.64 Oceano 12.94 18.62 36.43 Pismo Beach 14.21 28.42 42.63 Summary: Are the costs reasonable? Based on the results of the three separate cost - review techniques -trend review, external factor review and rate comparisons- SCSS's costs are reasonable. What Is a Reasonable Return on these Costs? After assessing if costs are reasonable, the next step is to determine a reasonable rate of return on these costs. The rate- setting method formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their franchise agreements with SCSS includes clear criteria for making this assessment. It begins by organizing costs into three main categories, which will be treated differently in determining a reasonable "operating profit ratio:" Controllable Costs (Operations and Maintenance) • Direct collection labor ® Fuel • Vehicle maintenance and repairs ® Depreciation • Insurance ® Billing and collection Pass - Through Costs • Tipping fees • Franchise and "AB 939" fees (recycling, source reduction, household hazardous waste programs) • Payments to affiliated companies (such as leases, trucking charges and AB 939 fees) Excluded and Limited Costs • Charitable and political contributions ® Non -IRS approved profit- sharing plans • Entertainment ® Fines and penalties • Income taxes ® Limits on officer compensation -11- Item 9.b. - Page 29 Solid Waste Rate Rey�ew After organizing costs into these three categories, determining "operating profit ratios" and overall revenue requirements is straightforward: ® The target is a 92% operating profit ratio on "controllable costs." Pass - through costs may be fully recovered through rates, but no profit is allowed on these costs. ® No revenues are allowed for any excluded or limited costs. In the case of SCSS, 71% of their costs are "controllable costs" subject to the 92% operating profit ratio (or 8% of total allowable "rate base" revenues); and 29% are pass- through costs that may be fully recovered from rates but no profit is allowed. No recovery is allowed for excluded costs. Preparing the Rate Request Application Detailed "spreadsheet" templates for preparing the rate request application — including assembling the required information and making the needed calculations —are provided in the Rate Manual. SCSS has prepared their rate increase application in accordance with these requirements (Appendix); and while there are minor variances, the financial information provided in the application for 2010 and 2011 closely ties to its audited financial statements. (The differences are immaterial.) Implementation The following summarizes key implementation concepts in the adopted rate - setting model: ® The "92% operating profit ratio" is a target; in the interest of rate stability, adjustments are only made if the calculated operating profit ratio falls outside of 90% to 94 %. In the case of this Base Year application, it clearly does. ® There is no provision for retroactivity: requested rate increases are "prospective" for the year to come; there is no provision for looking back. This means that any passed shortfalls from the target operating profit, as there were in 2010, 2011 and 2012, cannot be recaptured. ® On the other hand, if past ratios have been stronger than this target, then the revenue base is re -set in the Base Year review. ® As discussed above, detailed Base Year reviews are prepared every three years; Interim Year reviews to account for focused changes in the consumer price and tipping fees are prepared in the two "in- between" years. ® Special rate increases for extraordinary circumstances may be considered. This has never occurred in any of the agencies that use this rate - setting methodology. -12- Item 9.b. - Page 30 Solid Waste Rate Review The result of this process is an allowed rate increase of 5.4 %. However, as discussed below, based on additional rate containment provisions in the franchise agreements, SCSS has requested a rate increase of 3.2 %. As noted above, Section 8.3 of the franchise agreements provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase (assuming it was submitted in accordance with the rate - setting methodology). While this provision does not directly limit rate increase requests by SCSS to an amount that may be less than that allowed under the rate - setting methodology, subjecting the franchise agreement to possible termination if the rate request is greater than the cost of living threshold provides a strong incentive for SCSS to do so. As detailed below, the cost of living increase threshold for SCSS to avoid the potential for triggering early termination is 3.25 %. Its requested increase of 3.2 % is slightly below this amount. Calculation of the CPI Threshold Measured by changes in the U.S. CPI -U from August 2009 through August 2012 (the most recent annual period available to SCSS at the time it submitted its rate application), the cumulative increase setting the threshold is 6.74 %. As part of the 2011 rate review process, SCSS received an rate increase that was subject to this limit of 3.45 %, (Note: Of the 5.15% rate increase requested in 2011, increased green waste transportation costs accounted for 1.70% . This portion is not subject to the CPI threshold.) This leaves 3.25% available to SCSS without triggering an option for early franchise agreement termination. SCSS has requested an increase of 3.2 %, which is slightly less than this amount. SCSS has submitted similar rate requests to the three other agencies that regulate rates and services in the other South County areas that they serve: the County of San Luis Obispo, Avila Beach Community Services District and the Nipomo Community Services District. These agencies are likely to act on the requested rate increases within the next two months. SUMMARY Based on the rate - setting policies and procedures formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their franchise agreements, this report concludes that: ® SCSS has submitted the required documentation required under its franchise agreements with the four agencies. -13- Item 9.b. - Page 31 w Solid Waste Rate Review ® SCSS's costs are reasonable. ® Its rate application supports an increase of 5.4 %, which meets the "reasonable return" criteria set forth in the franchise agreements. ® The requested rate increase of 3.2% is under the "trigger" that would allow the four agencies the option of early termination of their franchise agreements. Accordingly, this report recommends adoption of the 3.2% rate increase requested by SCSS. ATTACHMENT Appendix: Base Year Rate Request Application from South County Sanitary Service -14- ® a ® 0 e ® m 0 Item 9.b. - Page 32 -�-VASE YEAR RATE REQUEST I a. Arroyo Grande lb. Grover Beach 1 c. Oceano 1d. Pismo Beach Supporting Schedules 2. Financial Information: Cost and Revenue Requirements Summary 3. Revenue Offset Summary 4. Cost Summary for Base Year 5. Base Year Revenue Offset Summary 6. Operating Information Item 9.b. - Page 33 South County Sanitary Service �- -r r - kv n r a V y.. �.. i « 1 � U �• 3 ' � �`�v�'''" � � "�„ rFi ia.'X��t m .�: 1. Rate Increase Requested x =' ' 'SS"''."'""'ca ": "s"tx" . i• '�txfi•.� � nA^ � I i M - ih.�ia�•• ���t Current Increased Adjustment New Cost Per Rate Schedule Rate Rate (a) Rate Gallon Single Family Residential 2. Economy Service (I - can curb) 4. Standard Service (2- can curb) 5. Premium Service (3 - can curb) $ 15.47 $ 15.97 $15.97 $ 20.11 $20.75 $24.75 $ 24.76 $25.55 $25.55 (a) Calculated rates are rounded up to the nearest $0.01. 6. Multiunit Residential and Non- residential Rate increases of 3.2% will be applied to all rates in each structure with each rate rounded to the nearest $0.0I a' ..:irr; , ...:.isia,.� - �?•.,.,.,. „,,.{,,.E4k'.i < °4'.a •... ,.,c F,A s ..- «-. .:•,rx. To the best ofmy knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the Rate Setting Manual, Name: Tom Martin Title: Division Vice - President Signature: Date: 09/25/12 Fiscal Year: 1 -1 -2093 to 12 -31 -2013 PS. 7 of $0,50 $0.32 $0.27 Item 9.b. - Page 34 South County Sanitary Service 2013 Base Year Rate Adjustment Application Ems" I . Rate Increase Requested ;< IN ' u �!R'� "�" .a: � _.y�� ..".4'.µr':'.:: xc � '< ':fi '. o•�;.rfu 3.2% Current Increased Adjustment New Cost Per Rate Schedule Rate Rate (a) Rate Gallon Single Family Residential 2. Economy Service (I - can curb) 4. Standard Service (2- can curb) 5, Premium Service (3 - can curb) 3 14.02 $14.4 $14.47 $ 18.96 $ 19.57 $19.57 $ 23.88 $24.64 $24,64 (a) Calculated rates are rounded up to the nearest $0.01. 6. !Multiunit Residential and Wan - residential Rate increases of will be applfed to all rates in each structure with each rate rounded to the nearest $0.01 To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the Rate Setting Manual. Name: Tom Martin Title: Division Vice - President Signature.: Date: 09125/12 Fiscal Year: 1 -1 -2013 to 12- 31,2013 p, 1 of B South County Sanitary Service $0,45 $0,31 $0.26 Item 9.b. - Page 35 2013 Base Year Rate Adjustment Application Summary OCEANO COMMUNITY 1. Rate Increase Requested KMIEC Rate Schedule Single Family Residential 2. Economy Service (I - can curb) 4. Standard Service (2- can curb) 5. Premium Service (3 - can curb) j•✓a- ,.,:., ^ L'.ujT N ;, �'^5, ,x;" . �^' n'fl •. Current Increased Adjustment New Cost Per Rate Rate (a) Rate Gallon $ 12.54 $ 1 2.94 $12.94 $ 18.04 $1 8.62 $18.62 $ 35.30 $36.43 $36.43 (a) Calculated rates are rounded up to the nearest $0.01. 6. Multiunit Residential and Non? residential Rate increases of 3,2 . will be applied to all rates in each structure with each rate rounded to the nearest $0,01 . d � ?'n. ' _ .. •�"�':t. xa.rw:itu�.+:�;t... Y_ �. � - ��1,•` a�%�a�:Y.• °' " ?:�.rrr� To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions• provided by the Rate Setting Manual. Name: Tom Martin Title! Division Vice-President Signature: pate: 09/25/12 Fiscal Year. 1-1 -2013 to 12 -31 -2013 .—Pg. 1 of 6 South County Sanitary Service $0.40 $0.29 $0.38 Item 9.b. - Page 36 South County Sanitary Service 2013 Base Year Rate Aajustment Application 1. Rate Increase Requested xi...,t.''•':..;,�. •.:. ;..i � ...:.: ,c r- x,�N,.a,,.'•st_,'r���:�� �'f3. - :o ' •;:. s, •_ ��;:a.. �_. i,.,,._,.:i.:'.,..;;: :. -'`r`.P: :eyss•XH� � � .. .(1'i: ^• �1rh'jl;_ axy" .J:.(":�:t�:, "'• :lY�p uu 3.2% Current Increased Adjustment New Cost Per Rate Schedule Rate Rate. (a) Rate Gallon Single Family Residential 2. Economy Service (1 - can curb) 4. Standard Service (2- can curb) 5, Premium. Service (3 -can curb) $13.77 $14.21 $14.21 $27.54 $28.42 $28.42 $41,31 $42,63 $42.63 (a) Calculated rates are rounded up to the nearest $0.01, 6. Multiunit Residential and Non- residential Rate increases of 3,2% will be applied to all rates in each structure with each rate rounded to the nearest $O,OI t,:.; z.'.• Y; iM$' "�..sAya;.s..f•:''i'.(:��:: r:. +� _aQc?. ,� 7F^ ,tl z �:u':..sir- :. {.�;,sr�:?F .,yx:�t:ic .w;Ji•.vi:..Ca, ira,»......` To the best of my knowledge, the data and information in this application is complete, accurate, and consistent with the instructions provided by the bate Setting Mahual. Name: Tom Martin Title: Division Vice- President Signature: Date: 09125/12 Fiscal Year. 1 -1 -2013 to 12 -31 -2013 PC- 1 of a $0.44 $0,44 $0.44 Item 9.b. - Page 37 South County Sanitary ,Service BASE YEAR 2013 RATE TAPPLICATION Fill aitcial Infor+r: ado it _ Historical Current Projected $2,893,SQ3 $2,922,444 $299,373 AB939 Fees Base Year $317,661 $320,838 2010 2011 2012 2013 2014 .i1,.�..:'.i' >`x:�.''1• ?a... 6. Direct Labor 7. Corporate Overhead 8. Otiiee Salaries 9• Other General and Admin Costs 10 Total Allowable Costs IL Operating Ratio 12, Allowable Operating Protit (from Pg. 4) $2,726,360 $2,796,767 $2.836,773 $2,893,SQ3 $2,922,444 $299,373 AB939 Fees $312,351 $317,661 $320,838 $574,483 Total Pass Through Costs $563,031 $574,292 $580,035 $3,680,287 $7,2801503 4"S302,66fi6 3,793.176 7,505,331 $3,806,849 $3,8$6,792 $7,592,310 $7,710,108 p w ' '':; ., J;':: •fi1:l:;,'r •a� .,.„�' e ala''Cly�o il��.,a .,�`.�' ._ �<'��� 5,'6�" t 13. Tipping Fees 14. Franchise Fees 15. AB939 Fees 16. Lease Pints to Affiliated Companie IT Total Pass Through Costs $1,526,234 $1,718,522 $1,844,1931 $1,844,1931 y $1,862,635 $1,072,163 51,097,433 $1,191,972 $1,271,258 $1,296,683 $0 $0 $0 92.700% 5.29% $0 $0 $2,598,397 $0 $0 $2,815,955.L $3,036,165 $0 $3,115,451 $0 $3,159,318 ! V isiieriau� , t.� 18. Revenue Requirement $10,107,936 $10,241,070 $10,791,195 $11,367,961 $11,449,757 19. Total Revenue Offsets $l0,1fl7,936 $10,241,070 $10,791,195 $10,841,060 $11,013,200 20. Net Shortfall (Surplus) 2l • Total Residential and Non - residential Revenue without increase in Base Year (og.5, line 76) 22• Percent Change in Residential and Non- residential Revenue Acquirement 23. Franchise Fee Adjustment Factor (1 - 6 percent) Limitation due to cumiative increases 24. Percent Change in Existing Rates $526,901 $10,709,403 $10,709,403 $10,709,403 4.9% 4,9% 4.9% 90.000% 5.40% 94,000% 5.21% 92.700% 5.29% -2,20% -2.010%1 2.09004) 3.20% 3.20% Fiscal Year; 1.1 -2013 to 12 -31 -2093 pg. 2 of 6 Item 9.b. - Page 38 Historical Current Projected $4,468,112 $4,512,793 Base Year 45. 2010 2011 2012 2013 2014 Residential Revenue (without increase in Base Yr.) 28. Single Family Residential Multiunit Residential Dumpster 29. Number of Accounts 30. Revenues 31. Less Allowance for Uncollectible Resid Aecot 32. Total Residential Revenue 005,7601i $6,332;72511 $6,351,090°1 $6,478,112 _Non - residential Revenue (without increase in Base 17r,) Account Type Non - residential Can 33. Number of Accounts 10 34. Revenues $5,419 Non - residential Wastewheeler 35. Number of Accounts 36. Revenues Non - residential Dumpster 37. Number of Accounts 38. Revenues 39. Less; Allowance for Uncollectible Non -resid 101 10 II 10 11_10 43 1 $14,899 11 $15,005 $1 5,155 IL192511 L9121 190711 190711 19071 $3,800,790 $3,816,704 $4,270,699 $4,301,021 $4,344.031 40. Total Non - residential Revenue i $4,173,002 $4,190,956 $4,436,612 $4,468,112 $4,512,793 45. Interest on Investments $46,26211 .$21,810 $21,858 $21,858j/ $22,295 46. Other Income 47, Total Revenue Offsets Fiscal Year. 1 -1 -2013 to 12 -39 -2013 P . 3 of 6 Item 9.b. - Page 39 f e ♦ e y Labor Payroll Taxes 48. Total Direct Labor 49. Corporate Overhead Less limitation (enter as neg, Total Corporate Overhead Office Salary Payroll Taxes 50. Total Office Salaries U Allocated expenses Bad Debt Bond expense Computer services Depreciation on Bldg and Equip Depreciation on Trucks /Containcr Drive Cam fees Dues and Subscriptions Gas and oil Interest Expense Laundry Legal and Accounting Miscellaneous and Other Office Expense Operating Supplies Other insurance Other Insurance - medical Other Taxes Outside Services Postage Public Relations and Promotion Permits Rent Telephone Tires (included in repairs) Travel Truck Repairs Utilities Total Other Gen /Admin Costs 52. Total Tipping Fees 53. Total Franchise Fee 54, Total AB 939 /Regulatory Fees 55. Total Lease Pmt to Affil Co.'s 56. Total Cost SASE YE 2010 AR Z011 2012 2413 1i $2,527,980 $2,591,830 $2,627,462 $2,680,011 $198,380 $204,937 $209,311 $213,497 $2,726,360 $2,796,767 $2,836,773 $2.893.508 483,655 $479,800 $489,39(, 180,989) ($167,449} {$1X,735 302,666 $312.351 $317,661 $540,665 $593,655 1 $523,69011 $534,164 $33,818 $48,706 $39,341 $40,128 $574,483 $642.361 $503,031 $574.292 Fiscal Year 1 -1 -2013 to 12 -31 -2013 Pg. 4 of 6 Item 9.b. - Page 40 South County Sanitary Service Base '( r Rate ju nt Application Base Year Revenue Offset Summary Description of Revenue 57, 58, 59. 60. 61. tit. 63. 64. 65. Residential Revenue For Information Purposes Only (without increase in Base Year) Single Family Residential ^' ",d• a� x $6.351,090 $],289,298 5864,086 $872,876 $3,324;830 Multiunit Residential Dumpster Number of Accounts Revenues Less Allowance for Uncollectable W, $0 Total Residential Revenue Non - residential Dumpster cp; . $6,351;490 $1,289,298 $864,086 5872,876 $3,324,834 $0 1 Nor- residential Revenue (without increase in Base Year) Account Type Number of Accounts (Non- resinennal t-an 876 3 Number of Accounts Revenues 4811 26 12 t0 Less: Allowance for Uncoilectible Revenues ;. ' ; e$3 S 0t7a" $15,445 $7 741 $4,959 $2,305 Non - residential Wastewlieeler Total Nan - residential Revenue Number of Accounts ? '. `t; ��°titii?_. fi; 157 58 551 44 $0 75, Revenues t 1 c7 nQf, enn n4u I mon em I can wnr Item 9.b. - Page 41 Non - residential Dumpster 66. Number of Accounts ' ^` '.; a't' ' " _. ;� <.i....� 1 1950 397 294 383 876 3 67. Revenues ? <47'�Sjti�fli's $4,169,364 $1,014,670 $882,940 $692,054 $1,579,704 $131,657 68, Less: Allowance for Uncoilectible Non - residential Accounts ? 4X;fA} •( $U 69. Total Nan - residential Revenue . _;, Sj.' $4,336,455 $1,062,499 5977,402 $716,850 1 $1 4 $]3l 657 74. Interest on Investments $�8F 521,858 $0 75, Other Income 76. Total Revenuo Offsets Fiscal Year, 1 -1 -2013 to 12 -31-2013 P . S of G Item 9.b. - Page 41 South County Sanitary Base Year Rate Adjustment Application Operating Information 77. Arroyo Grande Grover Beach Pismo Beach Oceano CSD Niporno CSD County 78, Routes - Garbage 74, Routes - Recycling 80. Direct Labor Hours Historical L Current Pro'ected 5,600 -0.3% cent Percent L2-L" Percent Base Year Percent 010 nge 24lt Change 2012 Change 2013 Change 2014 t.1.J. 8J@ 1 S! _,I l., 5,594 0.1% 5,600 -0.3% 5,585 0.5% 5,615 0.0% 5,615 4,025 0.9% 4,062 -0.1% 4,058 1.27/. 4,108 0,0% 4.108 3,581 0.8% 3,609 -1.0% 3,574 0.5% 3,592 0.0% 3,592 1,623 0.6% 1,633 1.7% 1,660 1.2% 1,680 0.0% 1,680 3,682 0,8% 3,710 2.0% 3,786 1 0.1%1 3,789 0.0% 3,789 5,345 2.7% 5,488 5.8' /0 5,804 -2,1% 5,683 0.0% 5,683 23,850 1.1% 24,102 1.5% 24,467 0.0% 24,467 0.0% 24,467 10 - 20.0% 8 0.0% 8 0.0% 8 0.0% 8 6 0.0% 6 0.0% 6 0.0% 6 0.0% 6 33,280 1 -12,5-/,,Il 29.1200.0 °, /0 1 29,120 0.0% 29,120 0.0 % 29,120 Nan - residential Garbage Accounts 80, Arroyo Grande Grover Beach Pismo Beach Oceano CSD Niporrto CSD County 81. Routes - garbage Routes - recycling 82. Direct Labor Hours 496 -1.2% 490 -3,1%1 475 1.3% 481 0.0% 481 463 -1.9% 454 -4.4% 434 017% 437 0.0% 437 361 1,7% 367 -111% 363 -0.6% 361 010% 361 205 1.0% 207 -1,9% 203 115% 206 0.0% 206 -2.7% 217 -0.9% 215 0.0% 215 464 -2.6% 452 0.7% 455 0.0% 455 In223 2,205 -2.8% 2,144 0,5% 2,155 0.0% 2.155 6 2 16,640 - 16,7% 0.0% -12,5% 5 2 14,560 0.0% 0.0% 0,0% 5 2 14,560 0,0% 0.0% 0,0% 5 2 14;560 i Recyclable Materials - All areas - Commingled Recycling (in tons) Accounts 83. Tri- Cities Nipomol0ceano CSD 84, County 7,829 0.2% 7,841 0,7% 7,894 0.0% 7,894 0.0%11 7,894 2,878 0.2% 2,883 0.7% 2.902 0.0% 2,902 0.0% 2,902 921 0,20,.. 922 0.70% 929 0.0% 929 0,0% 929 11,628 0.2% 11,646 0.7% 11,725 0.0% 11,725 0.0% 1I,725 Recyclable Materials - All areas- Greenwaste Recrelinr Routes Tons Collected Direct Labor Hours 4 0.0% 4 8,400 28.7% ]0809 10,400 0.0%1 10,400 0.0% 2.0% 0.0% 4.. 0.0% 4 7.9% 11,894 20.0% 12,480 010% 0.0% 0.0 °.�0 4 11,026 10,400 11.894 12,480 Garbage Tons Collected I 42,880 -8.9% 39,063 3.5% 40,417 0.0% 40,417 0.0% 40,417 Fiscal Year. 1.1.2093 to 92 -31 -2013 F . 6 of 6 Item 9.b. - Page 42 ATTACHMENT 3 CITY OF ARROYO GRANDE NOTICE OF PUBLIC HEARING REGARDING PROPOSED SOLID WASTE RATE INCREASE Dear Property Owners and Tenants - Customers: This notice is intended to inform you that the City of Arroyo Grande ( "the City ") will hold a public hearing regarding solid waste disposal rate increases (the "Proposed Rate Increase ") proposed by South County Sanitary Service ( "the Garbage Company ") for properties and customers receiving solid waste services within the City. The Proposed Rate Increase will be considered by the Arroyo Grande City Council at the date, time and location specified below. Consistent with the requirements of Proposition 218, this notice also provides you with the following information: Date, Time and Place of the Public Hearing Majority Protest Procedures a Reason for the Proposed Rate Increase Basis Upon Which the Proposed Rate Increase is Calculated Proposed Rate Increase Amounts NOTICE OF PUBLIC HEARING A Public Hearing for the Proposed Solid Waste Rate Increases within the City limits will be held on: (The public meeting originally scheduled for March 12, 2013 was delayed to comply with legal notification requirements) Date: May 14, 2013 Time: 6:00 pm Place: Arroyo Grande City Council Chambers, 215 East Branch Street, Arroyo Grande, CA At the Public Hearing, the Arroyo Grande City Council will consider all public comment in support and in opposition of the Proposed Rate Increase and whether or not a Majority Protest exists pursuant to the California Constitution (below). If approved, the Proposed Rate Increase would become effective June 1, 2013. MAJORITY PROTEST PROCEDURES Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Increase to the City Clerk before the close of the Public Hearing referenced above. • An owner(s) of property (parcel(s)) receiving solid waste service within the city limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving solid waste services; and A Tenant(s) whose name appears on the Garbage Company's records as the customer of record for the corresponding parcel receiving solid waste service within the city limits (tenant- customer). A valid written protest must contain a statement that you protest the increase in solid waste rates, the address OR Assessor's Parcel Number (APN) of the parcel or parcels which receive solid waste service and must be signed by either the owner or the tenant - customer of the parcel or parcels. One written protest per parcel shall be counted in calculating a majority protest to the proposed solid waste rate increase subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e -mail or by facsimile. Verbal protests will not be Item 9.b. - Page 43 counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the City Clerk before the close of the Public Hearing referenced above. Written protests regarding the solid waste rate increase may be mailed to: City of Arroyo Grande Attn: City Clerk 300 East Branch Street Arroyo Grande, CA 93420 Written protests may also be personally delivered to the City Clerk at Arroyo Grande City Hall located at 300 East Branch Street, Arroyo Grande, California. If valid written protests are presented by a majority of owners and /or tenants - customers of parcels receiving solid waste service within the city limits, then the City will not adjust/increase the solid waste rates. Only one protest per parcel will be counted in determining whether or not a majority protest exists. REASON FOR THE PROPOSED RATE INCREASES The Proposed Rate Increases (amounting to an increase of approximately 3.2% for residential services) are necessary for the Garbage Company to continue to provide safe, environmentally sound and reliable solid waste removal, transportation and disposal services to the citizens of the City of Arroyo Grande. The increases requested by the Garbage Company are due to increasing operational costs. Several factors have contributed to these increased costs, including, but not limited to, the rising costs associated with the operation of a garbage company, increased costs associated with operation and fuel for vehicles, ongoing maintenance, increased labor costs, increased landfill rates, increased green waste fees, and increased costs associated with meeting more stringent State and Federal regulations. BASIS UPON WHICH THE PROPOSED RATE INCREASE IS CALCULATED The Proposed Rate Increases are based on the following cost increases incurred by the Garbage Company: 1. The Proposed Rate Increase is based on increased costs for fuel, for vehicles, ongoing maintenance, and increased Garbage Company labor costs. A copy of the 2013 Base Year Rate Adjustment Application, which provides additional information on the proposed rate increase is available at the City Clerk's office located at 300 East Branch, Arroyo Grande, CA PROPOSED RATE INCREASE AMOUNTS The following charts provide a summary of the current solid waste rates and the Proposed Rate Increases Item 9.b. - Page 44 SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Service Descri tlon Pickups Per Week Current Monthly Rate Effective 11 -1 -2011 Proposed Rate Adjustment % ' Proposed Monthly Rate Effective' 06/01/2013 RESIDENTIAL: 32 Gallon Waste Wheeler 1 $15.47 3.2% $15.97 64 Gallon Waste Wheeler 1 $20.11 3.2% $20.75 96 Gallon Waste Wheeler 1 $24.76 3.2% $25.55 TWO -64 Gallon Waste Wheelers 1 $29.40 3.2% $30.34 ONE 64 & ONE 96 Gallon 1 $34.06 3.2% $35.15 TWO -96 Gallon Waste Wheelers 1 $38.70 3.2% $39.94 Garbage extras (per bag) $4.38 3.20% $4.52 Extended Vacation Service $12.55 3.20% $12.95 Residential customers must use the waste wheelers provided by the garbage company. Notations in parenthesis () refer to information found at the end of this rate schedule, on page 4. MISCELLANEOUS CHARGES - ALL CUSTOMERS: Overstacked Garbage & extra bags Minimum /unit each $4.38 3.20% $4.52 Overstacked Greenwaste & extra bas Minimum /unit each $2.19 3.20% $2.19 Overstacked Blue Bin & extra bags Minimum /unit each $2.19 3.20% $2.19 In yard service (per can or commodity) IN ADDITION TO STANDARD GARBAGE RATES per month $10.94 3.20% $11.29 Monthly charge for additional 96- gallon green waste service per month $3.03 3.20% $3.13 Extended Vacation Service per month $10.19 3.20% $10.52 Waste wheeler cleaning each time $16.31 3.20% $16.83 Trip charge each time $10.94 3.20% $11.29 Non-payment downsize service each time $10.94 3.20% $11.29 Non - payment redeliver waste wheeler each time $10.94 3.20% $11.29 Non-payment reconnect service each time $26.29 3.20% $27.13 Small item pickup (TV, toilet each $25.66 3.20% $26.48 Appliance picku - residential each $36.17 3.20% $37.33 Larger than residential appliance or glass, glass doors, or plate lass $0.00 $0.00 Garbage extras on your scheduled pickup day er and $9.23 3.20% $9.53 Garbage extras -NOT ON YOUR SCHEDULED PICKUP DAY per yard $25.48 3.20% $26.30 Item 9.b. - Page 45 Commercial Waste Wheeler rent I per month $3.38 3.20% $3.49 Re- deliver bin on stopped acct each time $31.38 3.20% $32.38 Large Compactors > 4 yards) per yard $12.48 13.38% $14.15 Small Compactors (4 yards & below ) assume 3 to 1 compaction Sunday Service (in additional to garbage service level) per month $54.76 3.20% $56.51 Recycle bin rental per month $6.09 3.20% $6.28 Stand by time per hour $52.58 3.20% $54.26 Extra bin cleaning $48.93 3.20% $50.50 Damage /Destruction of bins or waste wheelers Short Term Dumpsters: Delivery & Pickup-Bin $31.38 3.20% $32.38 Delivery & Pickup -Waste Wheeler $10.94 3.20% $11.29 Rental Per Da $2.32 3.20% $2.39 Empties Per Yard $25.47 3.20% $26.29 Mattress: Twin Each $11.84 3.20% $12.22 Double Each $21.96 3.20% $22.66 Queen Each $30.40 3.20% $31.37 King Each $35.49 3.20% $36.63 Late Fee (8) Per Month $5.00 $5.00 Late Fees are imposed for residential customers over 30 days delinquent and commercial customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill. Please recycle, its cheaper and it helps the Community achieve its AB939 goal to reduce waste. Any additional recycling services are charged out at 50% of the garbage rate. FURTHER INFORMATION If you have questions about the Proposed Rate Increase, please contact Tom Martin at 489 -4246. APRIL 22-26, 2011 Item 9.b. - Page 46 3 times garbage rate Waste Connections, Inc. is pleased to offer its customers the convenience of paying their bills online at www.wasteconnections.com What is WCI eBilling? • WCI eBilling allows you to conveniently receive and pay bills on the Internet. It is fast, secure, and offered at no extra charge! • Convenience: No More buying stamps or writing checks • Flexibility: We email you when a new bill is ready. You can access and pay your bill from anywhere, any time. • Control: You have control over when you pay your bill. What do I need to enroll? • A copy of your paper bill • Your checking account number and routing number (both are printed on your checks)/ or your valid credit card. • An E -mail address • A computer with Internet access. Your browser must have 128 bit encryption. Is it Secure? ® We are committed to keeping any information you submit to us safe, secure, and private. WCI eBilling uses safeguards including 128 bit secure socket layer (SSL) encryption and password protection to ensure the security of your transactions and personal information. To Enroll On -Line: You will need a Garbage bill Log onto www.wasteconnections.com Click on Online Bill -Pay — Top right side of screen Click on Click here to go Directly to online bill pay Under New Users "click the Enroll button" Enter Account Number Enter Invoice Number Your invoice number is located below your account number at the upper right hand corner of your bill At Payment Information Check one Box: Add a Bank Account or Add a Credit Card Enter payment information Click on Enroll after entering your information How to set up for recurring payments: Log on to www.wasteconnections.com At the Home Screen Click on Pam in the blue box under "Waste Connections, Inc" Click on Add Recurring Payment button Select Account No. (if not already filled in) Select Payment Account (hit down arrow to choose) Automatic payment is the Default and Preferred option Click Submit (This will not pay the current invoice if one is due, you will have to make a one - time payment.) How to make a one -time payment: Log on to www.wasteconnections.com Enter your user name and password At the Home Screen Your most recent invoice will be showing. Under Action click on the View/Pay Bill button This will take you to another screen. Hit the down arrow to select payment account you are paying from Select when you would like bill to be paid Select Pay Now You will get a Confirmation Number when payment is complete Item 9.b. - Page 47 CITY OF ARROYO GRANDE NOTICE OF PUBLIC HEARING REGARDING PROPOSED SOLID WASTE RATE INCREASE Dear Property Owners and Tenants - Customers: This notice is intended to inform you that the City of Arroyo Grande ( "the City ") will hold a public hearing regarding solid waste disposal rate increases (the "Proposed Rate Increase ") proposed by South County Sanitary Service ( "the Garbage Company ") for properties and customers receiving solid waste services within the City, The Proposed Rate Increase will be considered by the Arroyo Grande City Council at the date, time and location specified below. Consistent with the requirements of Proposition 218, this notice also provides you with the following information: Date, Time and Place of the Public Hearing Majority Protest Procedures Reason for the Proposed Rate Increase Basis Upon Which the Proposed Rate Increase is Calculated Proposed Rate Increase Amounts NOTICE OF PUBLIC HEARING A Public Hearing for the Proposed Solid Waste Rate Increases within the City limits will be held on: Date: May 14, 2013 Time: 6:00 pm Place: Arroyo Grande City Council Chambers, 215 East Branch Street, Arroyo Grande, CA At the Public Hearing, the Arroyo Grande City Council will consider all public comment in support and in opposition of the Proposed Rate Increase and whether or not a Majority Protest exists pursuant to the California Constitution (below). If approved, the Proposed Rate Increase would become effective June 1, 2013. MAJORITY PROTEST PROCEDURES Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Increase to the City Clerk before the close of the Public Hearing referenced above. • An owner(s) of property ( parcel(s)) receiving solid waste service within the city limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving solid waste services; and A Tenant(s) whose name appears on the Garbage Company's records as the customer of record for the corresponding parcel receiving solid waste service within the city limits (tenant- customer). A valid written protest must contain a statement that you protest the increase in solid waste rates, the address OR Assessor's Parcel Number (APN) of the parcel or parcels which receive solid waste service and must be signed by either the owner or the tenant - customer of the parcel or parcels, One written protest per parcel shall be counted in calculating a majority protest to the proposed solid waste rate increase subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e -mail or by facsimile. Verbal protests will not be counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the City Clerk before the close of the Public Hearing referenced above. Item 9.b. - Page 48 Written protests regarding the solid waste rate increase may be mailed to: City of Arroyo Grande Attn: City Clerk 300 East Branch Street Arroyo Grande, CA 93420 Written protests may also be personally delivered to the City Clerk at Arroyo Grande City Hall located at 300 East Branch Street, Arroyo Grande, California. If valid written protests are presented by a majority of owners and /or tenants - customers of parcels receiving solid waste service within the city limits, then the City will not adjust/increase the solid waste rates. Only one protest per parcel will be counted in determining whether or not a majority protest exists. REASON FOR THE PROPOSED RATE INCREASES The Proposed Rate Increases (amounting to an increase of approximately 3.2% for each category of service except for large compactors, which are proposed to increase by 13.38 %) are necessary for the Garbage Company to continue to provide safe, environmentally sound and reliable solid waste removal, transportation and disposal services to the citizens of the City of Arroyo Grande. The increases requested by the Garbage Company are due to increasing operational costs. Several factors have contributed to these increased costs, including, but not limited to, the rising costs associated with the operation of a garbage company, increased costs associated with operation and fuel for vehicles, ongoing maintenance, increased labor costs, increased landfill rates, increased green waste fees, and increased costs associated with meeting more stringent State and Federal regulations. BASIS UPON WHICH THE PROPOSED RATE INCREASE IS CALCULATED The Proposed Rate Increases (are based on the following cost increases incurred by the Garbage Company: 1. The Proposed Rate Increases are based on increased costs for fuel, for vehicles, ongoing maintenance, and increased Garbage Company labor costs. A copy of the 2013 Base Year Rate Adjustment Application, which provides additional information on the proposed rate increase is available at the City Clerk's office located at 300 East Branch, Arroyo Grande, CA Item 9.b. - Page 49 PROPOSED RATE INCREASE AMOUNTS The following charts provide a summary of the current solid waste rates and the Proposed Rate Increases SOUTH COUNTY SANITARY SERVICE RATE INCREASE EFFECTIVE JUNE 1, 2013 CITY OF ARROYO GRANDE Rates are the same as commercial rates 1 yd dum ster 1 $76.42 3.20% $78.87 1 yd dum ster 2 $111.50 3.20% $115.07 1 yd dum ster 3 $146.62 3.20% $151.31 1 yd dum ster 4 $187.91 3.20% $193.92 1 yd dum ster 5 $220.92 3.20% $227.99 1 yd dum ster 6 $262.22 3.20% $262.22 1 yd dum ster 7 $318.72 3.20% $328.92 1.5 yd dum ster 1 $86.74 3.20% $89.52 1.5 yd dum ster 2 $134.22 3.20% $138.52 1.5 yd dum ster 3 $189.99 3.20% $196.07 1.5 yd dum ster 4 $247.79 3.20% $255.72 1.5 yd dum ster 5 $301.48 3.20% $311.13 1.5 yd dum ster 6 $340.72 3.20% $351.62 1.5 yd dum ster 7 $398.95 3.20% $411.72 2 yd dum ster 1 $97.07 3.20% $100.18 2 yd dum ster 2 $163.13 3.20% $168.35 2 yd dum ster 3 $231.28 3.20% $238.69 2 yd dum ster 4 $305.59 3.20% $315.37 2 yd dum ster 5 $377.87 3.20% $389.97 2 yd dum ster 6 $423.30 3.20% $436.85 2 yd dum ster 7 $492.18 3.20% $507.93 3 yd dum ster 1 $115.62 3.20% $119.31 3 yd dum ster 2 $218.88 3.20% $225.88 3 yd dum ster 3 $305.59 3.20% $315.37 3 yd dum ster 4 $398.51 3.20% $411.26 3 yd dum ster 5 $472.86 3.20% $487.99 3 yd dum ster 6 $563.70 3.20% $581.74 3 yd dump ster 7 $720.00 3.20% $743.03 COMMERCIAL DUMPSTERS - ALL AREAS Can't : ' 4 yd dum ster 1 $144.55 3.20% $149.18 4 yd dum ster 2 $256.04 3.20% $264.23 4 yd dum ster 3 $367.53 3.20% $379.29 4 yd dum ster 4 $472.86 3.20% $487.99 4 yd dum ster 5 $584.36 3.20% $603.06 4 yd dumpster 6 $693.81 3.20% $716.01 Item 9.b. - Page 50 4 vd dumpster 1 7 1 $883.58 1 3.20% 1 $911.85 6 yd dum ster 1 $216.83 3.20% $223.77 6 yd dum ster 2 $384.06 3.20% $396.35 6 yd dum ster 3 $551.30 3.20% $568.94 6 yd dum ster 4 $709.29 3.20% $731.99 6 yd dum ster 5 $876.54 3.20% $904.59 6 yd dum ster 6 $1,040.72 3.20% $1,074.02 6 yd dum ster 7 $1,325.37 3.20% $1,367.78 3.20% $3.38 3.20% $3.49 3.20% 8 yd dum ster 1 $289.10 3.20% $298.35 8 yd dum ster 2 $512.08 3.20% $528.47 8 yd dum ster 3 $735.06 3.20% $758.58 8 yd dum ster 4 $945.72 3.20% $975.98 8 yd dum ster 5 $1,168.72 3.20% $1,206.12 8 yd dum ster 6 $1,387.62 3.20% $1,432.02 8 yd dum ster 7 $1,767.16 3.20% $1,823.71 The rates shown above include the monthly container rental fee and a semi - annual dum ster cleaning. The rates are the same for bins and garwoods, when volume is identical. Bins and garwoods are types of containers used for recycling. 1 Can* 1 $18.58 3.20% $18.58 2 Cans * 1 $39.23 3.20% $40.49 3 Cans * 1 $45.44 3.20% $45.44 4 Cans * 1 $57.80 3.20% $59.65 $10.94 3.20% $11.29 Monthly charge for additional 96- gallon green waste service Garbage extras (per bag) $3.03 $4.38 3.20% $4.52 Garbage extras (per and $10.19 $9.23 3.20% $9.53 Commercial Waste Wheeler rent 3.20% $3.38 3.20% $3.49 3.20% Compactors (per and $12.43 3.20% $12.83 * Maximum volume and weight per garbage can : 33 gallons / 80 pounds each time MISCELLANEOUS - ALL CUSTOMERS. Overstacked Garbage & extra bas Minimum /unit each $4.38 3.20% $4.52 Overstacked Greenwaste & extra bas Minimum /unit each $2.19 3.20% $2.19 Overstacked Blue Bin & extra bags Minimum /unit each $2.19 3.20% $2.19 In yard service (per can or commodity) IN ADDITION TO STANDARD GARBAGE RATES per month $10.94 3.20% $11.29 Monthly charge for additional 96- gallon green waste service per month $3.03 3.20% $3.13 Extended Vacation Service per month $10.19 3.20% $10.52 Waste wheeler cleaning each time $16.31 3.20% $16.83 Trip charge each time $10.94 3.20% $11.29 Non-payment downsize service each time $10.94 3.20% $11.29 Non - payment redeliver waste wheeler each time $10.94 3.20% $11.29 Item 9.b. - Page 51 Non-payment reconnect service each time $26.29 3.20% $27.13 Small item pickup (TV, toilet each $25.66 3.20% $26.48 Appliance pickup-residential each $36.17 3.20% $37.33 Larger than residential appliance or glass, glass doors, or plate lass $0.00 $30.40 3.20% $31.38 $0.00 $32.38 $35.49 Garbage extras on your scheduled pickup day per yard $9.23 3.20% $9.53 Garbage extras -NOT ON YOUR SCHEDULED PICKUP DAY peryard $25.48 3.20% $26.30 Commercial Waste Wheeler rent per month $3.38 3.20% $3.49 Re- deliver bin on stopped acct each time $31.38 3.20% $32.38 Large Compactors > 4 yards) per yard $12.48 13.38% $14.15 Small Compactors (4 yards & below) Sunday Service (in additional to garbage service level) Recycle bin rental Stand by time Extra bin cleaning Damage /Destruction of bins or waste wheelers Short Term Dumpsters; Delivery & Pickup -Bin Delivery & Pickup -Waste Wheeler Rental Empties assume 3 to 1 compaction 3 times garbagf rate per month $54.76 3.20% $56.51 per month $6.09 3.20% $6.28 per hour $52.58 3.20% $54.26 Double $48.93 3.20% $50.50 $22.66 Queen Each $30.40 3.20% $31.38 3.20% $32.38 $35.49 $10.94 3.20% $11.29 Per Da $2.32 3.20% $2.39 Per Yard $25.47 3.20% $26.29 Mattress: Twin Each $11.84 3.20% $12.22 Double Each $21.96 3.20% $22.66 Queen Each $30.40 3.20% $31.37 King Each $35.49 3.20% $36.63 Late Fee (8) Per Month $5.00 $5.00 Late Fees are imposed for residential customers over 30 days delinquent and commercial customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill. Please recycle, its cheaper and it helps the Community achieve its AB939 goal to reduce waste. Any additional recycling services are charged out at 50% of the garbage rate. FURTHER INFORMATION If you have questions about the Proposed Rate Increase, please contact Tom Martin at 489 -4246. Item 9.b. - Page 52