CC 2016-03-22_10a Solid Waste Collection Rates PresentationSolid Waste Collection Service Rates
March 22, 2016
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July 30, 2015 City received “base year” rate increase request of 3.25% and proposal for two “interim year” increases.
October 13, 2015 Public Hearing to consider the rate increases was
held.
Discrepancy in Proposition 218 notice
Concern about calculation that determines if rate increases have exceeded cumulative CPI
Continued until tonight to provide noticing with
the correct rates
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Components of the Base Year rate increase
1.34% is based on increased costs for fuel, vehicles, ongoing maintenance and labor.
0.81% is based on a $2.25 per ton increase in tipping fees at the landfill.
1.10% is based on implementing
an Organics Program.
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Interim Year Increases
SCSS proposes a 3-year rate increase. Interim years (2017 and 2018) would increase by:
Change in CPI (unknown at this time)
Known changes in tipping fees at the landfill (0.79% for
2017 and 0.77% for 2018)
Approval eliminates need for Interim Year reviews
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Organics Program
AB 1826 requires diverting organic waste from landfills to an authorized composting facility.
Long-term plan would build an anaerobic digestion plant that would service San Luis Obispo
County
This would begin Mid-2017
Located on Waste Connections yard in San Luis Obispo
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Rate increase safeguards
The Franchise Agreement governs rate increases
It provides language that gives the Council the option to terminate the Agreement if rate increases are too high
It defines this as exceeding
the cumulative change in CPI
Not all costs are included in the calculation to determine if the rates have exceeded the change in CPI
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Amendment to the Agreement
Council considered an Amendment to the Franchise Agreement that would exclude the increases in tipping fees associated with the landfill expansion project from the calculation. (Item
9c tonight).
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Consultant Review
City contracted with Bill Statler to review the rate application
Presented findings October 13, 2015, which have not changed
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Allowed Revenue Increase
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Consultant Report Conclusion
Costs are reasonable
Proposed rate increase meets “reasonable return” criteria
Requested rate increase of 3.25% is slightly less than allowable increase of 3.67%
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Recommendation
Adopt a Resolution establishing integrated solid waste collection service rates to become effective April 1, 2016, January 1, 2017 and January 1, 2018
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Rate History
2.4% annual increase
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CPI Threshold Calculation
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