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HomeMy WebLinkAboutRes 88-80 New Refuse Rates Effective July 1988 INTEROFFICE MEMORANDUM CITY OF PALM DESERT DATE : July 14, 1988 TO: CITY MANAGER , HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL FROM : ASSISTANT CITY MANAGER SUBJECT: REFUSE RATE INCREASE FOR FISCAL YEAR 1988-89 Recommendation: That the City Council adopt Resolution No. 88-80 establishing new refuse rates for the City effective July 1988 . Background: In accordance with the exclusive contract to perform refuse services between the City and Palm Desert Disposal , Palm Desert Disposal has requested a rate increase. The contract provides that the contractor may petition the City for any adjustments to refuse rates to cover increases in contractor ' s cost of operation within the City. The agreement also provides that the contractor shall provide documentation to the City which allows the City to determine whether a rate increase is warranted. In a letter dated April 29, 1988 , Palm Desert disposal submitted a rate increase request with accompanying information which showed that total expenses for the company for operations for the year ending March 31 , 1988 over the year ending March 31 , 1987 , had increased by 15 . 9%. However , a portion of that increase has been attributed to expanded services , i . e . , the company picked up more households and more businesses, etc . The increase being requested by Palm Desert Disposal , therefore, only amounts to 5 . 7%. The City' s auditor , Richard Byrne, has requested to review the documentation and in the letter attached , the Auditor indicates that the requested rate increases are warranted. Therefore, Resolution No . raises all refuse rates for both residential and commercial 5 . 7% across the board. In addition to the rates for the provision of services the Company is allowed to pass through those costs that are imposed for the use of the County dumps by the County of Riverside. The County has celplp,rXed,_, ain increase in the dump fees effective August 1 , IRIS$.,:,,.yif�t c� tdt-ay ': 41%. Attachment B represents the current feed . ? in.g ch-a-rged _for- •:bbth. residential and commercial and the proposed dump fee to collect h p p e ough monies to allow the company to G-i*eri;ttie expenses of the dump fee. ti NO: 11.1 �S p y 5,010E2 /drkS0,6 So ..II A37TA Na VERIFIE;,. L6, Original on -File • The current resolution allows the refuse company to pass through any dump fee costs to the users and it also allows the company to charge a 10% processing fee for the collection and payment of such fees . The combined increase by both Palm Desert residents and business owners is 9. 4%. This combined increase represents the 5 . 7% increase for basic service and 41 % increase in County dump charges . Carlos L . Ortega Assistant City Manager mh Attachments G�I ATTACHMENT A RESOLUTION NO. 88-80 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, SETTING REFUSE COLLECTION SERVICE RATES WITHIN THE CITY OF PALM DESERT AND RESCINDING RATES ESTABLISHED UNDER RESOLUTION NO. 87-78 WHEREAS, on the 10th day of September , 1981 , the City of Palm Desert , California , authorized an Exclusive Contract to Perform Refuse Collection Services to Palm Desert Disposal ; and WHEREAS, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert that effective the 1st day of July, 1988, Resolution No. 87-78 is hereby rescinded; and BE IT FURTHER RESOLVED that effective the 1st day of July, 1988, the schedule of refuse collection service rates is hereby amended to reflect the following : 1 . Individual Residential Charges A . Once weekly pickup - 6 cans , bags or bundles 1 . Curb Service $6. 25 per month 2 . Walk- In Service 8 . 15 per month B. Each additional can : 1 . Curb Service 3 . 40 per month 2 . Walk- In Service 4 . 00 per month Note : Walk- in service shall not exceed 60 feet from curb . There shall be an additional charge for distance beyond 60 feet as follows : For each additional 20 feet or part thereof, a charge of 62 cents per unit of 20 foot distance shall be charged. If the distance from the curb to the can is 90 feet , the charge will be $ 1 . 05 additional per month . 2 . Multiple Dwellings : A. Central one-stop location of trash : Curb : 1 . First Unit $6. 25 per month CITY OF PALM DESERT RESOLUTION NO. 88-80 Page 2 Multiple Dwellings (Contd) 2 . Each Additional Unit 3 . 40 per month Walk- In : 1 . First Unit 8 . 15 per month 2 . Each Additional Unit 5. 30 per month B. Other than central location of trash : Curb: 1 . First Unit 6. 25 per month 2 . Each additional unit 4. 00 per month Walk- in : 1 . First Unit 8. 15 per month 2 . Each additional unit 6.85 per month 3 . Mobile Home Parks A. Central Building/Walk- In 7 . 30 per unit Service B. Central Building/Curb 5 . 20 per unit Service 4 . Commercial Rates will be as follows : Time 2-Yard 3-Yard 4-Yard 6-Yard Per Week Bin Bin Bin Bin 1 36. 35 45 . 35 60 . 65 91 . 00 2 60 . 65 74 . 40 92 . 40 138. 55 3 85 . 10 104 .85 126. 30 189. 45 4 109. 20 131 . 70 160 . 25 240 . 35 5 133 . 50 162 . 25 194. 30 291 . 40 6 182 . 00 190 . 90 223 . 25 334 .85 Pick up 12 Yard 20 Yard 30 Yard 40 Yard Per Week Dirt Box Dropoff Dropoff Dropoff 1 $56. 80 $61 .85 $83 . 85 $99. 25 1 CITY OF PALM DESERT RESOLUTION NO. 88-80 Page 3 No rental maintenance will be charged for the first seven ( 7 ) days . The rate of $2 . 50 per day will be charged after the seventh ( 7th ) day. 5 . Special Haul $7 . 50 first fifteen minutes of loading time only and $2 . 75 per each additional five minutes . 6 . Bulky Household Items Bulky household items that , because of their size or weight ( such as furniture , T . V . ' s appliances , etc . ) cannot be collected on regular routes shall be collect- ed based on the Special Haul rate. 7 . Start Fees A $ 10 . 00 restart fee may be charged to all customers who had prior service , discontinue same and then resume service. 8. Unusual Conditions For collections requiring special equipment or other- wise not set forth in this Agreement , rates may be charged as shall be agreed upon by the Contractor and the customer . BE IT FURTHER RESOLVED that a surcharge is hereby allowed to cover the County of Riverside Waste Disposal gate fee; and 1 . That Palm Desert Disposal shall notify their customers that the surcharge is added to the basic service rate. 2 . That such a surcharge will be in effect on August 1 , 1988 . 3 . That Palm Desert Disposal shall cause to be prepared by an independent audit firm within 60 days after March 31st of every year , a financial statement clearly indicating the fees paid to the County of Riverside pursuant to the waste disposal gate fee program and the increased revenue received as a result of imposing the surcharge . 4 . That the surcharge be adjusted after the audit report is furnished to the City according to the amount of revenue generated as compared to the actual cost of CITY OF PALM DESERT RESOLUTION NO. 88-80 Page 4 disposal plus 10 % for an administrative overhead allowance. Any audit- identified surplus shall be used as a credit for the ensuing fiscal year surcharge revenue account . The City Manager is hereby authorized to negotiate a fair surcharge based on the information provided. 5. That the City of Palm Desert shall not include revenue received from the surcharge in gross receipt subject to franchise fees . PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert , California , on this 14th day of July , 1988 , by the following vote, to wit : AYES : NOES : ABSENT: ABSTAIN : JEAN M . BENSON , MAYOR ATTEST: SHEILA R. GILLIGAN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA resoluti ATTACHMENT B CITY OF PALM DESERT PROPOSED DUMP FEE RATE INCREASES RESIDENTIAL : Service Current Rate Proposed Rate Curb Service . 80 1 . 05 Yard Service . 80 1 . 05 COMMERCIAL : 2-Yard Bin Pick up Per Week Current Rate Proposed Rate 1 3 .85 5 . 45 2 7 . 70 10 .85 3 11 . 55 16 . 30 4 15 . 40 21 . 75 5 19 . 25 27. 20 6 23 . 10 32 . 60 3-Yard Bin Pick up Per Week Current Rate Proposed Rate 1 5 . 75 8 . 10 2 11 . 55 16. 30 3 17 . 30 24 . 45 4 23 . 10 32 . 60 5 28 . 85 40 . 75 6 34 . 65 48 . 90 4-Yard Bin Pick up Per Week Current Rate Proposed Rate 1 7 . 70 10 .85 2 15 . 40 21 . 75 3 23 . 10 32 . 60 4 30 . 80 43 . 50 5 38 . 45 54 . 30 6 46 . 15 65 . 15 ATTACHMENT B Page 2 r 6 Ya d Bin Pick up Per Week Proposed Rate 1 16 . 30 2 32 . 60 3 48 . 90 4 65 . 25 5 81 . 45 6 97 . 75 Palm Desert Disposal, Inc. @ f 0 V SI 161;1h 41-575 Eclectic Street \ P.O. Box 3876 DL� I II A Waste Management Company Palm Desert,California 92261-3876N!!!!7 619/324-1741 — + j I +I H April 29, 1988 City of Palm Desert P.O. Box 1977 Palm Desert, CA 92260 Attn: Carlos Ortega Dear Carlos: Per our contract to perform refuse collection services to Palm Desert, Palm Desert Disposal respectfully request for a rate increase review of it' s commercial and residential service. SECTION S 1. The Contractor may petition the City for a rate adjustment as a result of increases in Contractor' s cost of operations within the City. In such an event, the Contractor shall provide documentation relative to the average per unit cost of service which may be tested and audited in order to make a decision on this increase. The City may review such data or retain an independent Certified Public Accountant or Licensed Public Accountant at Contractor' s expense to review such data. 2. Contractor shall make its records, reports, and methods of accounting available to the auditor in order to allow the independent auditor to review Contractor' s accounting systems, procedures, and costs. Such reviews shall be conducted by the auditor at any time during normal business hours as directed by the City. The auditor shall have access to the cost data for Contractor' s total operation as well as to the portions thereof relating to the City of Palm Desert, if the auditor reasonably deems such information to be relevant to his duties pursuant to this Contract. 3. Any report from the auditor to the City resulting from the auditor' s review of Contractor' s records shall be limited to a letter of compliance relating to accounting procedures and to the identification of Contractor' s costs, and shall not set forth Contractor' s actual operating results. The auditor shall also make such recommendations as he deems necessary as to the adequacy of Contractor' s data collection methods, and as to the availability and sufficiency of this information including direct and indirect costs of operation. Auditor shall furnish the City with his opinion as to whether the increase is supportable by Contractor' s records. 1;;;;;S A Waste Management Company ‘4!!!!PF 9 P Y City of Palm Desert April 29, 1988 Page 2 4. Any rate increase granted shall not exceed an amount necessary to allow Contractor the recovery of such costs increase, past and future, as are determined by the auditor. I have enclosed the material the contract requires to substantiate an increase. In addition, the county landfill is proposing price increase effective July 1, 1988. This increase has not yet been approved by the Board of Supervisors and thus cannot be addressed in this request. Upon formal notification of this increase, we will be submitting a second request reflecting the landfill , effects only. If you have any questions or comments regarding this matter, please contact; me. Thank-you for your cooperation. Respectfu jJ submitted, • / jrtiI 1 ' Raymond P �'urke General Manager RPB:cyn encls. r 11;i2S A Waste Management Company N!!!!:7 9 p Y PALM DESERT DISPOSAL RATE INCREASE ANALYSIS CITY OF PALM DESERT March 31 , 1987 March 31 , 1988 % Increase TRUCK OPERATING COST 288,864 429,939 48.8% LABOR COST & FRINGES 1 ,569,012 1,989,314 26.8% REPAIRS & MAINTENANCE 827 ,154 879,267 6.3% DEPRECIATION 579,938 813,061 40.2% PROPERTY MAINTENANCE COSTS 143,001 172,998 21.0% INSURANCE COSTS 306,584 323,289 5.4% MISCELLANEOUS HAULING 538,479 672,234 24.8% ADMINSTRATIVE 1 ,065,972 1 ,344,763 26.2% ANNUALIZATION OF ADDITIONAL CONTRACT 398,486 -0- -- TOTAL EXPENSES 5,717 ,500 6,624,865 15.9% AVERAGE UNITS 12,303 13,493 9.7% ANNUAL UNITS 147 ,644 161,920 9.7% ANNUAL COST/UNIT 38.72 40.91 5.7% • p @ \z/ 231988 THOMAS, BYRNE & SMITH AN ACCOUNTANCY CORPORATION U. IL/ CERTIFIED PUBLIC ACCOUNTANTS June 20, 1988 Donald L.Thomas, C.P.A. D. Richard Byrne,C.P.A. 4362 Orange Street V.C. Smith,Jr., C.P.A. Riverside, California 92501 Allen C. Harrison, C.P.A. (714)682-4851 Mr. Carlos Ortega Assistant City Manager City of Palm Desert Palm Desert, California 92261 Dear Mr. Ortega: Pursuant to our discussion we have reviewed the books and records of Palm Desert Disposal relative to a request for an increase in refuse collection rates. Our review of the books and records and the resulting operating statements of Palm Desert Disposal, excluding costs for franchise fees, management fees, etc. , indicate the following: FYE 3-31-87 FYE 3-31-88 Increase Total Cost of Expenses $4,337,891 $5,466,108 26.01 Average Units Serviced 38,627 45,400 17.53 Total Cost Per Unit 112.30 120.40 7.21 The results of our review were discussed with Palm Desert Disposal personnel and we understand they concur. We found the staff members of Palm Desert Disposal very cooperative and cordial during our review. If you have any questions in regard to our review, within the agreed constraints, please feel free to contact our office. Respectfully submitted, THOMAS, BYRNE & SM TH An Accntancy Co oration e;// By: D. Richard Byrne Certified Public Accountant DRB/dj THE- COUNTY OF RIVERSIDE DOUGLAS M. ISBELL Director 4/1 May 31, 1988 (b,r -) v, `' iviA ' Bruce Altman, City Manager `�;�1 ': City of Palm Desert613 � 73-510 Fred Waring Drive gcFRy,` Palm Desert, CA 92260 WASTE DISPOSAL GATE FEES On May 31, 1988, the Board of Supervisors approved an increase in the Basic Disposal Fee at the County ' s landfills from $8. 50 to $12. 00 per ton effective August 1, 1988 . The Board retained the current minimum charges for autos and pickup trucks of $3 . 00 and $4. 00 per load while establishing a $5 . 00 minimum for all other vehicles . The Board also increased the Hard-to-Handle Disposal Fee from $14 . 00 to $17 . 50 per ton of refuse with a minimum charge of $8 . 00 per vehicle; and increased the Tire Disposal Rate from $14 . 00 to $35 . 00 per ton while retaining the Basic Disposal Fee for an individual with 4 or less tires . It is estimated that this adjustment in disposal fees represents an increase to the average homeowner ' s refuse collection bill of approximately 60 to 75 cents per month. This estimate is based on the assumption that the average household generates between 80 and 100 pounds of refuse per week . We recognize that this generation factor varies throughout the County and individual refuse haulers may be able to provide specific data for your city. The Board further decided to defer any change in Sunday operations at the Highgrove, Coachella, Edom Hill, and Lamb Canyon Landfills until after January 1, 1989 . If we can provide any additional information, lase hesitate to give Maureen Marshall a call at ( 714) 785-6081 .do not Douglas M. Isbell Director DMl :mfa 11728 Magnolia, Suite A • Riverside, CA 92503 • (714) 785-6081