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HomeMy WebLinkAboutResolution 2011-47 Burrtec Producer Price Index and Gate / Disposal Fee IncreaseCITY OF PALM DESERT SPECIAL PROGRAMS DEPARTMENT STAFF REPORT REQUEST: CONSIDERATION OF REQUEST BY BURRTEC WASTE AND RECYCLING FOR APPROVAL OF THE ANNUAL PRODUCER PRICE INDEX (PPI) AND COUNTY OF RIVERSIDE GATE/DISPOSAL FEE INCREASES SUBMITTED BY: Frankie Riddle, Director of Special Programs DATE: June 9, 2011 CONTENTS: 1. Letter from Burrtec dated May 5, 2011, requesting Annual Rate Increase 2. Exhibit 3: New Residential Rate, Commercial, and Roll- off Rates 2. Exhibit 4A-C: New Residential, Commercial, and Roll -off Rates Adjustment 3. Resolution No. 2011-47 Recommendation By Minute Motion approve the following: 1. Approve the proposed 4.07% PPI rate increase and 0.31 % gate/disposal fee increase from $39.04 to $39.16 per ton; and 2. Waive further reading and adopt Resolution No. 2011-47 approving the new adjusted rate schedule of fees (Exhibit 3 for residential, commercial, and roll -off) for the collection, recycling, and disposal of municipal solid waste and residential/commercial recycling contained in Contract No. C27410 - Solid Waste Management Services. Discussion Per the Solid Waste and Recycling Franchise Agreement, Burrtec may request an annual rate increase based on the Producer Price Index (PPI) utilizing the January 2010 to December 2010 time period. In 2010, the City utilized a portion of its Recycle Funds (AB939) to offset the rate increase to Palm Desert residents, which dropped the $8.25 fee paid to the City through Burrtec to $6.02. This option was considered as a result of the significant increase that STAFF REPORT BURRTEC ANNUAL SOLID WASTE RATE INCREASE JUNE 9, 2011 PAGE 2 would have been placed on residents at an economically depressed time. However, this year's increase is only $.34 per month for a 96 gallon container. In addition, with the decrease in Recycle Fees from $8.25 to $6.02, the City receives less funds to cover costs associated with solid waste and recycling activities that are undertaken each year. Given the financial challenges, as a result of the sluggish economy, and the reduced Recycle Funds (AB939) fee that the City receives, the City is now spending approximately double of that received each year. Therefore, staff recommends that City Council approve the rate increase to residents as proposed. Fiscal Analysis The proposed rate increase(s) will not have a negative impact to the City's General Fund. Submitted By: rl--< I ", - Frankie 'ddle, Director of Special Programs Approval: n M. Wohlmuth, City Manager CITY COUNCIL ACT ION APPROVED DENIED RECEIVED OTHER -47 MEETING DATE AYES: NOES: ABSENT: InfUL :ABSTAIN: one .� VERIFIED BY: Original on File with City Clerk's Office as amended, to reflect that the City's AB 939 Fund to absorb the Residential Rate increase, with City staff directed to reevaluate/lessen how the AB 939 fund is being spent otherwise. RESOLUTION NO. 2011-47 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING THE NEW ADJUSTED RATE SCHEDULE OF FEES (EXHIBIT 3A-C FOR RESIDENTIAL, COMMERCIAL, AND ROLL - OFF) FOR THE COLLECTION, RECYCLING, AND DISPOSAL OF MUNICIPAL SOLID WASTE AND RESIDENTIAL/COMMERCIAL RECYCLING CONTAINED IN CONTRACT NO. C27410 — SOLID WASTE MANAGEMENT SERVICES WHEREAS, on the 1st day of June 2009, the City entered into an exclusive contract with Burrtec Waste and Recycling, LLC and approved the Agreement at its meeting of May 21, 2009. WHEREAS, Burrtec now provides solid waste collection and residential and commercial recycling services to the residents and businesses within Palm Desert; and WHEREAS, the franchise agreement sets forth rates for solid waste collection and recycling services within the City of Palm Desert as provided in Exhibits 4A, 413, and 4C and commencing on the second year of said agreement, new rates may be applied at 100% of the PPI with a 5% cap unless otherwise approved, and to become effective July 1st of each year; and WHEREAS, the Riverside County Waste Resources Management District (RCWRMD) sets the landfill tipping fees and effective July 1, 1996, reduced the landfill tipping fee from $38.50 to $30.00 per ton; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, as follows: SECTION 1: That the City Council of the City of Palm Desert, California, rescinds all previous resolutions. SECTION 2: The annual rate increase shall be 100% of PPI with a 5% cap. SECTION 3: That the City Council of the City of Palm Desert, California, effective July 1, 2011, ratifies the 4.07% solid waste collection and residential recycling service increase requested by Burrtec Waste and Recycling as provided for in the Franchise Agreement. SECTION 4: That the County of Riverside has increased the per ton disposal fee at the transfer stations/landfills from $39.04 to $39.16, an increase of $.12. Resolution No. 2011-47 SECTION 5: The City Council of the City of Palm Desert, California, approves the new rate increases for 2011, as reflected in Exhibit 3 to become effective July 1, 2011. SECTION 6: Burrtec shall forward to the City, on a monthly basis, an amount equal to $6.02 per ton in tipping fees as provided for within the City's Franchise Agreement and directed to the "Waste and Recycling Fee." SECTION 7: All other solid waste service rates, services, 8% franchise fee, any other fees, reports, etc., shall be in accordance with the Agreement currently in effect. PASSED, APPROVED, AND ADOPTED this 9th day of June, 2011, by the City Council of the City of Palm Desert, California, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA JEAN M. BENSON, MAYOR 2 BURRTEC WASTE & RECYCLING SERVICES "We'll Take Care Of It" May 5, 2011 Ms. Frankie Riddle Director of Special Services Programs City of Palm Desert 72-510 Fred Waring Drive Palm Desert, CA 92260 RE: 2011Rate Adjustment Dear Ms. Riddle, Please fine the attached rate sheets for your review and approval. The Producer Price Index from December 2009 to December 2010 was 4.07%. The Riverside County Waste Management Department approved an Edom Hill gate fee increase of 0.31% the rate will go from $39.04 a ton to $39.16 a ton. I am available at your convenience to discuss the rate adjustment request. Sincerely, Mike Veto Director of Municipal Services 41-575 Eclectic Street • Palm Desert, California 92260 • 76" ?40-5901 • Fax; 760-,:�40-2732 • www.6urrtecdesert,com City of Palm Desert EXHIBIT 3 Commercial Service Rates - Current Container Size Pickups er Week 1 2 3 4 5 6 Commercial Refuse Cart $ 11.01 $ 22.01 $ 33.02 $ 44.02 $ 55.03 $ 66.03 Commercial Greenwaste Ca $ 8.60 $ 17.18 $ 25.78 $ 34.37 $ 42.96 $ 51.42 2 Cubic Yards $ 69.97 $ 122.69 $ 175.82 $ 228.38 $ 281.32 $ 368.28 3 Cubic Yards $ 92.16 $ 164.65 $ 214.78 $ 302.65 $ 375.53 $ 448.19 4 Cubic Yards $ 126.69 $ 212.62 $ 301.40 $ 390.53 $ 500.11 $ 561.13 6 Cubic Yards $ 192.01 $ 322.77 $ 458.19 $ 593.51 $ 717.18 $ 853.97 "Locking Bin Fee $ 8.32 $ 16.64 $ 24.97 $ 33.29 $ 41.61 $ 49.93 --Locking Bin Fee is a monthly charge WSW on numoer or picK ups per weeK 2-Yard - Extra Empty $ 32.75 3-Yard - Extra Empty $ 44.87 4-Yard - Extra Empty $ 60.63 6-Yard - Extra Empty $ 90.96 Temporary front end load bin - initial delivery, pickup, and disposal $ 121.27 Temporary front end load bin - additional dumps $ 121.27 (Extra Empty Contaminated Recycling Container ( (Extra Empty Charge) Charge) Re -Start Fee - following voluntary or involuntary suspension of service $ 17.79 Returned Check Fee $ 18.51 Bin Cleaning/Enclosure Clean-up Charge (for overflowed bins, after required warnings) $ 36.41 Emergency Service - hourly rate for one crew member and one collection truck $ 88.42 Commercial Service Rates.-- Effective 7/1/2011 Multiplier: 102.91 % Container Size Pickups 7er Week 1 2 3 4 5 6 Commercial Refuse Cart $ 11.33 $ 22.65 $ 33.98 $ 45.30 $ 56.63 $ 67.95 Commercial Greenwaste Ca $ 8.85 $ 17.68 $ 2653 $ 35.37 $ 44.21 $ 52.92 2 Cubic Yards $ 72.01 $ 126.26 $ 180.94 $ 235.03 $ 289.51 $ 379.01 3 Cubic Yards $ 94.84 $ 169.45 $ 221.04 $ 311.46 $ 386.47 $ 461.24 4 Cubic Yards $ 130.38 $ 218.81 $ 310.18 $ 401.90 $ 514.68 $ 577.47 6 Cubic Yards $ 197.60 $ 332.17 $ 471.53 $ 610.80 $ 738.07 $ 878.84 "Locking Bin Fee $ 8.56 $ 17.12 $ 25.70 $ 34.26 $ 42.82 $ 51.38 "Locking Bin Fee is a monthly charge baseo on numoer or pK:K ups per WeeK 2-Yard - Extra Empty $ 33.70 3-Yard - Extra Empty $ 46.18 4-Yard - Extra Empty $ 62.40 6-Yard - Extra Empty $ 93.61 Temporary front end load bin - initial delivery, pickup, and disposal $ 124.80 Temporary front end load bin - additional dumps $ 124.80 (Extra Empty Contaminated Recycling Container Charge - Bin Charge) Re -Start Fee - following voluntary or involuntary suspension of service $ 18,31 Returned Check Fee $ 19.05 Bin Cleaning/Enclosure Clean-up Charge (for overflowed bins, after required warnings) $ 37.47 Emergency Service - hourly rate for one crew member and one collection truck $ 91.00 5/5f2011 EXHIBIT 3 City of Palm Desert Roll off Service Rates - Current Standard Refuse Pull Charge (c) Standard Greenwaste/Construction & Demolition Pull Charge (c) ;tor Pull Charge (c ) Disposal Charge aste Disposal Charge ction and Demolition $ 125.85 $ 119.53 $ 203.09 actual cost (a) actual cost (b) Charge actual cost (c) Rental Fee Per Day $ 8.34 (a) The disposal charge per ton includes both the landfill tipping fee (actual cost) and the (b) Temporary roll off customers may be charged a delivery charge, a pull charge, plus four tons of (c) Roll -off customers may be charged a box rental fee after seven (7) business days if there has been Additional Services Description Rate Roll -Off Delivery or Relocation Charge $ 17.83 Returned Check Fee $ 18.55 Roll off Service Rates - Effective 7/1/2011 Multi 104.07% Standard Refuse Pull Charge (c) $ 130.97 Standard Greenwaste/Construction & Demolition Pull Charge (c) $ 124.39 Compactor Pull Charge (c) $ 211.36 Landfill Disposal Charge actual cost (a) Greenwaste Disposal Charge actual cost (b) Construction and Demolition Disposal Charge actual cost (c) Rental Fee Per Day $ 8.68 (a) The disposal charge per ton includes both the landfill tipping fee (actual cost) and the City's recycling fee of $8.25 per ton. (b) Temporary roll off customers may be charged a delivery charge, a pull charge, plus four tons of disposal. If disposal tonnage is less than four tons or greater than four tons, the customer will be credited/charged accordingly. (c) Roll -off customers may be charged a box rental fee after seven (7) business days if there has been no pulls within the 7-day period. Roll -off customers who are using roll -off for recycling purposes are not charged this fee. AAA;Finn!%1 Car%Y;d-Pc Description Rate Roll -Off Delivery, Relocation Charge, Re -Start Fee Returned Check Fee $ 18.56 $ 19.31 5/5/2011 cn I t 0q�q1 �l�m 28 O LO A 2 ao r+ O to to to to EA EA UR V3 EA FA can, C N R E E B NG 7 7 R R C L roi.vo d (D U) yL 'O "O C G .9 .R.. y O O a C C y' Y G cr ci E E E E�p 3 SV1 LLL = C c ai 0 w ' D m m m U a m d is m ; E � UUCP _ F, c y � r E E m C T 1Q0 t`N') N (A fn A N < <J a X 2 � m m a a 0 Ck � � o to to fA to Nam,. Vf EA to to to � O m t p di C to �p: U P o7 a� U c 'n ai R v% ^R a N N R V U M E �' E E E c �,.a E ro E o 0 0 E a00!d! 0 0 5A Vf'A to to <A to cA v3 cY C v� y N C U E E O N L d c (O d C a (A 8 .E E E e 3Um jj 9 -2U LL _ C c C R i0 R g1 N m Y 0 E E co O O S m W rNi'rn in a s t9 v a m L N O r W 4 n L R L 29 U 0 � O R N C L E c w o � w E rob L U 0 C U A � E L ° m � a Y E � R Cl) M .'r7 qdq �IIIOT � � oo tO 6R cA c!3 i .~-� to Mp tii) � N 00 90 iR cA to I VA dW H4 A to C N �p •Y C �yy �O U�� a D_ �0 2 R U U pN � U 7 Cr G YY 0 99 ci 00 R (c)M E U` C7 (9 7 o a c O 17 E ° � CO 0)(D0i a ¢ v 2 ¢ ¢ ¢ q 414 N 1 Iwo, ti tn - H3 EA EA n H3 (A N Q c wE y W �y a ` yo o V `m W � � y N � c S c L �� w U U W 7 7 c Y 0 E E w V o � x R o FS v� � as va FA u o O W U_ C m VC V b � VI � o m a d 6i w 0 �i C {gyp aL3 0 c Q g 'Q x b ICY R U N ID'aR cE = y N • U � C U y LL C 7 N a l0 p § U 4 pR, 0 R. 3 L o WAR V d c y c r E 0 E E U o 03 ; U R � M m m c K U 0 b EXHIBIT 4A Residential Rates Adjustment City of Palm Desert Rate Adjustment - July 1, 2011 StepOne: Deduct franchise fees from gross rate revenue Revenue Component incl ing franchise fees Annual Amount a Gross Residential Rate Revenue $3,061,590 Residential Franchise Fees (b) $193,751 Residential Rate Revenue Net of Franchise Fees $2,867,839 Revenue Component (net of Franchise Fees) Annual Amount Percentage of Rate Revenue Net of Franchise Fees Residential Rate Revenue Net of Franchise Fees (c) $2,867,839 100,00% Less: Actual Residential refuse Disposal Expense $526,117 18.35% Less: Actual Residential Recycling Fees $113,5881 3.96% 77.69% Residential Service Revenue $2,228,135 _Lw. — :.. -dCucfinenf Eu4nrc Rate Component Adjustment Factor Old New Index Change Percent Change d Disposal Tipping Fee per Ton $ 39.04 $ 39.16 0.31 % 0.31 % Recycling Fee per ton $6.02 $6.02 0.00% 0.00% Producer Price Index (Capped at 5%) 176.9 184.1 4.07% 4.07% Components of Actual Revenue Component Weight a Rate Component Percent Change Weighted Rate Adjustment Refuse Disposal 18.35% 0.3% 0.056% Recycling Fee 3.96% 0.0% 0.000% Service 77.69% 4.1 /0 3.162/o 100.00% 3.219% Total Current Monthly Rate Weighted Rate Rate Change Adjusted Service (g) (Example Only) (h) Adjustment (i) Monthly Rate 0) 90-gallon automated cart collection $10.58 3.219% $0.34 $10.92 Manual curbside collection $11.64 3.219% $0.37 $12.01 Walk-in service fee $8.741 3.219% $0281 $9.02 (a) For the twelve months ending the December before the July 1 rate adjustment. (b) Franchise fee is 8% of gross revenue less disposal fees and per ton recyciing fees. (c) From Step One above. (d) "Index Change" multiplied by "Allowable Portion of Index Change." (e) From "Percentage of Rate Revenue Net of Franchise Fees" in Step Two. (f) From last column in Step Three. (g) Not all rate categories are shown in this example. (h) The weighted rate adjustment should be applied to the total rate, including Franchise Fee portion of the rate. (i) From weighted rate adjustment in Step Four. a"Current Monthly Rate" plus "Rate Change." 5/5/2011 "12011 EXHIBIT 4B Commercial Bin Rates Adjustment City of Palm Desert Rate Adjustment - July 1, 2011 Ste One: Deduct franchise fees fromgross- rate revenue Revenue Component(including franchise fees Annual Amount a Gross Commercial and Multi-Famiy Rate Revenue $3,744,908 Commercial and Multi -Family Franchise Fees (b) $213,788 Commercial and Multi-Familly Rate Revenue Net of Franchise Fees $3,531,120 Two: Revenue Component (net of Franchise Fees) Commercial and Multi -Family Rate Revenue Net of Franchise Fees (c) Less: Actual Commercial and Multi -Family refuse Disposal Expense Less: Actual Commercial and Multi -Family Recycling Fees Commercial and Multi -Family Service Revenue /sing tees, ano service Annual Amount Percentage of Rate of Franchise 100.00% 25.57% 69.63%I biep i nree: balU-Lu l u. l ` ,.,,,,,, Rate Component Adjustment Factor Old New Index Change Percent Change Disposal Tipping Fee per Ton $39.04 $39.16 $6.02 0.31 % 0.00% 0.31 0.00% Recycling Fee per ton $6.021 176.9 184.1 4.07°% 4.07% Producer Price Index (Capped at 5% Four. Components of Actual Revenue Recycling Fee Service Total percentage cha a in si le family rates Component I Rate Component Percent Change I Weighted Rate 1 6% 0.31 % 0.08% 5% 0.00% 0.00% n°/" 4.07% _ 2.83% ste rive: A wer Hasa 1rvnaa Q -..- I Current Monthly Rate Weighted Rabe Rate Change Adjusted Service (g) (Example Only) (h) Adjustment (i) Monthly Rate 0) One 3-yard bin once per week $92.16 2.91 °% 2.91% $2.68 $4.80 $94.84 $169.45 One 3-yard bin twice per week $164.65 $214.78 2.91 % $6.26 $221.04 One 3-yard bin three times per week $302.65 2.91 % $8.81 $311.46 One 3-yard bin four times per week $448.19 2.91 % $13.05 47 $461.24 One 3-yard bin five times per week $$44.87 2.91 % $$1.31 $461.24 One 3-yard bin sic times per week 2.91 % $1.31 ,Extra 3-yard empty$44.87 (a) For the twelve months ending the December before the July 1 rate aajusrmera. (b) Franchise fee is 8% of gross revenue less disposal fees and per ton recyciing fees. (c) From Step One above. (d) "Index Change" multiplied by "Allowable Portion of Index Change." (e) From "Percentage of Rate Revenue Net of Franchise Fees" in Step Two. (0 From last column in Step Three. (g) Not all rate categories are shown in this example. (h) The weighted rate adjustment should be applied to the total rate, including Franchise Fee portion of the rate. () From weighted rate adjustment in Step Four. 0) "Current Monthly Rate" plus "Rate Change." 5/5/2011 k mr k a £ r f - #I � 2— o @ E D In / E - r V� Ecm 0 k O t � 7 WFL O e 0 © k 0v Is � 2 2 k � � q 7 q . . �■■Lei n 2_—�q J% #a# m k \