For Utilities Commission Meeting [May 18, 2021]
TO: Honorable Utilities Commission Members
APPROVAL: Thomas J. Crowley, P.E., Utilities Manager
FROM: Amy Crow, Administrative Analyst
Title
Request Utilities Commission to Recommend that City Council Approve Municipal Solid Waste Collection, Recycling and Disposal Service Rates for Fiscal Year 2021/2022, Effective July 1, 2021.
(ACTION)
Body
BACKGROUND:
In April 1996, Council approved a franchise agreement for trash collection that included a curbside mixed recyclables program to meet the mandates of AB 939, and unlimited green waste removal. Resolution No. 4217 established the base residential and commercial disposal rates. The franchise agreement allows the franchise hauler to request rate adjustments based on changes in the Consumer Price Index (CPI) and changes in operating costs, such as landfill tipping fees and mandated programs.
In July, 2020, Burrtec Waste Industries proposed to defer the 2020/21 rate adjustment and the cost recovery for both residential tax roll and residential direct bill customers to the 2021/2022 cycle. The intent was to recover the 2020/2021 costs in the 2021/2022 cycle which in effect results in a deferred cost recovery and true-up adjustment. Burrtec’s generous deferral offered relief to ratepayers caused by the economic stress from COVID-19 by delaying the effective date one year.
ANALYSIS/DISCUSSION:
On June 11, 2019, the City Council conducted a Public Hearing in accordance with Proposition 218 procedures and adopted a Three Year Municipal Solid Waste Collection, Recycling and Disposal Rates for Fiscal Years 2019/2020 through 2021/2022.
This year’s Residential rates include the following components.
• No CPI adjustment to the 2021/2022 Residential Hauler Fee component
• Deferment Stabilization Fee is revised to recover the 2020/2021 adjustments over two full years, 2021/2022 and 2022/2023 rate cycles
• Change in the WDA disposal rate from $39.12 to $38.00
This year’s Commercial rates include the following components.
• CPI adjustment to the 2021/2022 Commercial Hauler Fee component
• Change in the WDA disposal rate from $39.12 to $38.00
Residential Rate Options
Table 1 shows the 2019/2020 and 2020/2021 deferred rates for residential tax billed customers. Additionally, are the 2021/2022 rate adjustments which include half of the Monthly Deferred Amount from the 2020/2021 rate review cycle. The other half of the Monthly Deferred Amount will be recouped during the next rate review cycle for 2022/2023. The adjustment includes no change to any City fees including the Pavement Maintenance Fee for 2021/2022. Attachment 1 provides the full rate analysis summary.
Table 1
Residential Rate Options
Commercial Rate Options
Table 2 below shows the most common Commercial Service rates with the various 2021/2022 rate adjustments. The adjustments include no change to any City fees including the Pavement Maintenance Fee for 2021/2022.
Table 2
Commercial Rate Options
ENVIRONMENTAL IMPACT:
In accordance with Section 15273 of the California Code of Regulations, CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies which the public agency finds are for the purpose of meeting operating expenses.
GENERAL PLAN CONSISTENCY:
Approval of this action complies with the City of Rialto General Plan Goals and Policies:
Policy 3-10.1: Encourage additional recycling in all sectors of the community.
Policy 3-10.4: Continue to educate the community regarding the benefits of solid waste diversion and recycling, and maintain programs that make it easy for all residents and businesses to work toward City waste reduction objectives.
FINANCIAL IMPACT:
Operating Budget Impact
Refuse revenue is collected by Burrtec Waste Industries. The City derives revenues from the adopted rates including Household Hazardous Waste (HHW) and AB 939 fees, which the City uses to fund the Household Hazardous Waste programs and for public education on recycling and protection of the environment.
Revenues as presented with no changes in the fee amounts are estimated as follows:
• AB 939 funds are estimated to be $302,016/year and will be credited to Account No. 212-400-7150-7544.
• HHW funds are estimated to be $309,810/year and will be credited to Account No. 212-400-7150-7542.
• Franchise fees are estimated to be $1,523,695/year and will be credited to Account No. 010-400-0001-7116.
• With the current PMF rates, annual PMF revenues are anticipated to remain fixed at $1,562,712 for the 2021/2022 fiscal year.
Capital Improvement Budget Impact:
Annual PMF revenues of $1,562,712 are estimated for the 2021/2022 fiscal year. These funds support the residential street pavement maintenance program, Project number 200805 proposed for FY2020.
RECOMMENDATION:
Staff Request Utilities Commission to Recommend that City Council Approve Municipal Solid Waste Collection, Recycling and Disposal Service Rates for Fiscal Year 2021/2022, Effective July 1, 2021.