RPVCCA_CC_SR_2013_06_04_02_UWS_Solid_Waste_&_Recycling_Rate_Adjustment
PUBLIC HEARING
Date: June 4, 2013
Subject: Residential Solid Waste and Recycling Rate Adjustment for
Universal Waste Systems, Inc. for FY 13-14
Subject Property: Citywide
1. Declare the Hearing Open: Mayor Brooks
2. Report of Notice Given: City Clerk Morreale
3. Staff Report & Recommendation: Senior Administrative Analyst Ramezani
4. Public Testimony:
Appellant: N/A
Applicant: N/A
5. Council Questions:
6. Rebuttal:
7. Declare Hearing Closed: Mayor Brooks
8. Council Deliberation:
9. Council Action:
RANCHO PALOS VERDES
2-1
CrTYOF RANCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
Project Manager:
HONORABLE MAYOR & CITY COUNCIL MEMBERS
LES M. JONES, II, INTERIM DIRECTOR OF PUBLIC WO~
JUNE 4, 2013 ~
RESIDENTIAL SOLID WASTE AND RECYCLING RATE
ADJUSTMENT FOR UNIVERSAL WASTE SYSTEMS,
INC. FOR FY 13-14 (Supports 2013 City Council Goal of
government efficiency, fiscal control and transparency)
CAROLYN LEHR, CITY MANAGER o9--
Lauren Ramezani, Senior Administrative Analyst YJf-'
RECOMMENDATION
Approve the cap on permissible rates that Universal Waste Systems, Inc. (UWS) can
charge single-family and multi-family residential customers in FY 13-14.
BACKGROUND
The City has exclusive single-family and multi-family residential solid waste and recycling
agreements with EDCO Disposal Corporation (EDCO) for 95% of the City and Universal
Waste Systems, Inc. (UWS) for the remaining 5% of the City, concentrated in the coastal
and landslide areas. Both agreements commenced on July 1, 2010 and will terminate on
June 30, 2017. Additionally, both agreements have an extension option of up fo 36-
months, at the City's sole discretion.
The City establishes an annual cap on the permissible rates EDCO and UWS can charge
their residential customers. Per their residential agreements, EDCO and UWS are eligible
for annual adjustments. The only permissible rate adjustments are those outlined in the
Agreement. The rate adjustments are based on changes to national published price
indices and solid waste disposal facilities' gate rates. The rate adjustment requests are due
to the City by March 30 of every year. EDCO and UWS both submitted their requests for
rate adjustments for FY 13-14 prior to that deadline.
During the 2009 residential contracts procurement process, one of the City's goals was to
provide identical Citywide caps on rates for automated curbside collection. Therefore,
when City Council approved UWS's residential agreement in 2009, that approval was
contingent on the cap for UWS's automated curbside rates matching the cap for EDCO's
automated curbside rates.
2-2
UWS Request for Rate Adjustment FY 13-14
June 4, 2013
Page2
The proposed cap on authorized FY 13-14 automated curbside rates are discussed in
EDCO's staff report. Therefore, per the agreement, UWS would match EDCO's current
and future capped rates. EDCO's request is addressed in a separate staff report.
Staff placed notices of the public hearing in the Palos Verdes Peninsula News on May 23,
and May 30, 2013.
DISCUSSION
This report will focus entirely on UWS's other residential collection services which are
non-automated and include: manual unlimited backyard, residential manure, and multi-
family bin collection and service.
Subcommittee Meeting: On May 8, 2013, staff met with the Solid Waste Subcommittee
(Subcommittee) comprised of Mayor Pro Tern Duhovic and Councilman Campbell. After
review of the exhibits, discussions with staff and UWS representative, the Subcommittee
approved staff's recommendation to bring this rate adjustment request to the full City
Council for consideration.
Similar to EDCO, UWS's City approved rate adjustment methodology (RAM) has two cost
components: 1) Disposal Cost Component and 2) Service/Collection Cost Component. The
RAM is based on the average percentage changes, both increases and decreases, for 12
months. For rate adjustments effective FY 13-14, the calendar year 2012 (January 2012 to
December 2012) is considered. Once approved, the authorized cap on rates is effective
July 1, 2013, which is 6 months later.
1) Disposal Cost Component: UWS's disposal cost increases are based on the percentage
increases at the Puente Hills County owned landfill for the calendar year 2012. In 2012,
disposal costs at Puente Hills for solid waste material did not increase and remained
$38.41/ton. Therefore the percentage change is 0%.
2) Service/Collection Cost Component: UWS's service/collection cost increases are based
on the percentage increases/decreases in several national indices from the U.S.
Department of Labor, Bureau of Labor Statistics for calendar year 2012. These indices are
identical to the ones used by EDCO, which are specifically tailored to solid waste collection
operations. UWS's collection cost component is 0.4%.
UWS's total weighted residential rate adjustment, which reflects both disposal and service
cost components, is 0.4%. Therefore, in accordance with these indices, lack of change in
the landfill gate rate, and per the provisions in their agreement, UWS is requesting an
increase of 0.4% in the cap on permissible rates for manual unlimited backyard, manure,
and multi-family bin services in FY 13-14. This 0.4% is not in addition to EDCO's 1.2%
requested rate increase. The 0.4% is for separate and different (non-automated) collection
services provided by UWS. Comparatively, due to higher fuel costs, in FY 11-12 UWS's
rate increase was 2.5%, and in FY 12-13 it was 1.7%.
W:\LAUREN\STAFFRPT\REFUSE\2013\UWS rate adjustment fy 13-14 2 .docx 2-3
UWS Request for Rate Adjustment FY 13-14
June 4, 2013
Page3
This requested increase allows UWS to adjust their rates to reflect the cost increases they
incurred in 2012. There are no additional costs or surcharges added to their requested rate
increase. Examples of UWS's proposed rates for FY 13-14 are listed below:
Service Level Current Cap Proposed Cap on Proposed Cap Proposed Cap on
Single-family on Monthly increase in Monthly on Monthly Monthly Rates for
Rates Rates for Rates for Seniors
FY 12-13 FY 13-14 FY 13-14 FY 13-14
Manual Unlimited $57.34 $0.23 $57.57 $51.81
Backyard
Manure 32-gal can $20.85 $0.08 $20.93 $18.84
The multi-family accounts would have a similar proposed increase cap of 0.4%. For
example, the cap on the permissible rate for a 3-yard bin picked up once a week would
increase by $0.40/month from $100.10/month to $100.50 /month.
In conclusion, if approved UWS's automated curbside services would increase 1.2% similar
to EDCO's, while their other non-automated services would increase 0.4%. Staff and HOR
Engineering, the City's AB 939 consultant, have reviewed the data and calculations
provided by UWS, and found them accurate. (See attached spreadsheets for proposed
authorized cap on rates for all single and multi-family service levels).
Recycling Rebate to Customers: Previously UWS provided the City an annual Recycling
Rebate of $16,000, which was deposited in the Beautification-Recycling Fund. In
November 2012, Council approved issuing a rebate to residential ratepayers. This rebate
results in a credit of $1.31 per month per customer/unit and is retroactive to January 1,
2013. Thus, UWS's July statement will include a line item reflecting a 6-month retroactive
credit of $7.86 (January to June 2013) and a quarterly credit of $3.93 (July to September
2013). The minor difference in UWS's monthly credit amount compared to EDCO is due to
the difference in the ratio of the number of UWS customers to its contractual annual
recycling revenue due to the City, as compared to EDCO's.
Fee Distribution/Allocation: UWS currently pays the City 12% of its gross receipts for
Collector Fee (estimated at $39,000/year) and 3% for Environmental Fee (estimated at
$9,000/year). The allocation of the fees among City funds will be similar to EDCO's. As
mentioned in EDCO's staff report, one Subcommittee member suggested issuing an
additional credit for the increased portion of the City's FY 13-14 fees which totals $375.
FISCAL IMPACT
Approving staff's recommendation would permit UWS to increase customers' FY 13-14
rates by up to 1.2% for automated and by up to 0.4% for manual unlimited backyard,
manure and multi-family bin services. This would also result in an increase in the Collector
Fee of approximately $300 and Environmental Fee of approximately $75.
Attachments: Exhibit 5-A, Spreadsheet with UWS's current and proposed rates,
Various Indices
W:\LAUREN\STAFFRPT\REFUSE\2013\UWS rate adjustment fy 13-14 2 .docx 2-4
Row
1
2
3
4
5
Row
6
7
8
9
10
11
Row
12
13
14
15
16
17
18
Adjustment Factor
Labor (hrly rate)
Fuel (natural gas)
Equipment
EXHIBIT SA (Unlimited Manual Backyard, Manure and Multi-Family Bins)
Universal Waste Systems, Inc. (UWS)
RATE ADJUSTMENT FORMULA· Effective 7/V2013
(Rates reflect Unlimited manual backyard, manure, and multi-family bin services)
Step One: Calculate pereentage change in indices
A B c
Old Index Value (prior New Index Value Pereent Change In
Index year's "New Index") FY FY13-14 Index ((Column B/
12-13 Column A) -1)
(1) $21.80 22.80 4.6%
(2) 171.6 118.3 -31.1%
(3) 131.2 134.4 2.4%
Disposal Component (Puente Hills) (4) $38.41 38.41 0.0%
All Other (5) 225.01 229.78 2.1%
Step Two: Determine components
D E F
Cost Component Pereent Change In Total Weighted
Adjustment Factor Weighted as a% of Index Change
Component Total (6) (from Column CJ (Column D x E)
Labor (1) 23.8% 4.6% 1.1%
Fuel (2) 6.1% -31.1% -1.9%
EQuipment (3) 17.2% 2.4% 0.4%
Disposal (4) 16.4% 0.0% 0.0%
All Other (5) 36.5% 2.1% 0.8%
Total Rate Adjustment 100% 0.4% FY 13-14 Rate Increase
Step Three: Apply pereentage change to rates
G H I J
Existing Customer Total Weighted Rate Increase or Adjusted Rate
Rate Category Rate Percentage Change Decrease (Column H x (Column H + Column
FY12-13 (Row 13, Column F) Column I) J) FY13-14
Residential Service (Unlimited $ 57.34 0.4% $ 0.23 $ 57.57 Manual Backvard)*
32 Gallon Manure $ 20.85 0.4% $ 0.08 $ 20.93
3 Yd Bin, lx week $ 100.10 0.4% $ 0.40 $ 100.50
3 Yd Bin 2x week $ 128.16 0.4% $ 0.51 $ 128.67
Extra Pickup - 2 vd $ 15.64 0.4% $ 0.06 $ 15.70
Extra Bulkv Item (Multi-Family) $ 26.07 0.4% $ 0.10 $ 26.17
Extra Bin Oeaning (Multi-Family) $ 26.07 0.4% $ 0.10 $ 26.17
•A limited number of customers have a Phase-in Select rate of$ 55 per Section 8.6 of agreement in FY 13-14.
Step Four. Re-weight cost components
K L M N 0
Cost Component Pereent Change as Cost Components Increase in Cost Cost Component
Row Adjustment Factor Index Weighting Applied to Rate Components (Column Increased (Column K + Reweighted to Equal
(Column DJ Adjustment KxColumnL) ColumnM) 100% (to be used for
used for FY 12-13 (ColumnE) FY13-14)
19 Labor (1) 23.8% 4.6% 1.1% 24.9% 24.8%
20 Fuel (2) 6.1% -31.1% -1.9% 4.2% 4.2%
21 Equipment (3) 17.2% 2.4% 0.4% 17.6% 17.5%
22 Disposal (4) 16.4% 0.0% 0.0% 16.4% 16.3%
23 All Other (5) 36.5% 2.1% 0.8% 37.3% 37.2%
24 Total 100.0% 100.4% 100.0%
UWS Rate Adjusbnent Request FY 13-14
(1) Driver A/B hourly rate from Agreement between local haulers and Package and General Utility Drivers Local Union 396, International Brotherhood of Teamsters.
(2) Producer Price Index, WPU 0531 not seasonally adjusted, Fuels and related products and power, natural gas -average annual change.
(3) Producer Price Index, PCU336120336120, Heavy duty truck manufacturing -average annual change.
(4) Gate rate at the Disposal Facility, or gate rate at Puente Hills Landfill, whichever charge per ton is less.
(5) Consumer Price Index for All Urban Consumers (CUUROOOOSAOLlE), all items less food and energy index -U.S. city average -average annual change.
(6) This column comes from Column 0 of the previous year's rate adjustment worksheet.
Note: UWS's curbside rates have to match EDCO's curbside rates and EDCO's % of increase.
uws 2-5
Universal Waste Systems, Inc.
Current Single-Family Rates *
FY 12-13 Effective 7 /1/2012
Monthly Manual Service Rates
Unlimited Manual Backyard Service for refuse,
recycling, and green waste ** -per home per
month
Mahure 32-gal customer-provided can (per can
per month)
$57.34
$20.85
Monthly Automated Cart Service Rates *""
One each Refuse, Recycling, and Green Waste Cart,
rate based upon Refuse Cart size:
Refuse Cart 35-gallon 64-gallon 96-
Size: vallon
Standard $18.51 $23.81 $29.11
Service, based
on refuse cart
size
Additional $6.36 $8.49 $10.61
Refuse Cart
Additional n/a n/a n/a
Recycling Cart
Additional $2.12 n/a $4.25
Green Waste
Cart (over three , ___ ,_,
Other Cart Rates and Services (Charged in Addition to Mc;mthly
Cart Service Rates)
Backyard Service -per home per month, all cart $6.54
sizes
Senior Rate Reduction 10%
Low-Income Rate Reduction 5%
Annual Payment Rate Reduction 5%
Additional Special Overage Pickup for $5.31
Automated Cart Customers (in excess of two
pickups per year), per pickup
Additional Bulky Item pickups (in excess of three $26.53
free pickups per dwelling unit per year), per item
Cart Exchange (after free-exchange period), per $15.92
reouest
Cart Re-delivery Fee (if carts are pulled for non-$26.53
payment, one charge for redelivery of all carts)
Re-Start Fee -after voluntary suspension of $15.92
service, if carts have not been pulled, per re-start
*These rates are maximum not to exceed (capped) rates.
•• Per Section 6.8 of agreement, phase-in select rate of $55/month. This phase-in ends June 30, 2013.
""** Per Section 6.7 of agreement1 UWS automated cart rates to match EDC01s
antnmalPci rart ralP~.
W:\LAUREN\STAFFRPnREFUSE\2013\UWS rate increase req 2013 rev 5-1final.xis1 5/28/2013
uws
City Of Rancho Palos Verdes
FY 13-14 Proposed Rate Adjustment -Residential
Universal Waste Systems, Inc.
Proposed Single-Family Rates*
FY 13-14 Effective 7 /1/2013
Monthly Manual Service Rates
Unlimited Manual Backyard Service for refuse, $57.57
recycling,. and green waste -per home per
month Increase
Manure 32-gal customer-provided can (per can $20.93
1permonth)
Monthly Automated Cart Service Rates ***
One each Refuse, Recycling, and Green Waste Cart,
rate based upon Refuse Cart size: Increase
Refuse Cart 35-gallon 64-gallon 96-gallon
Size:
Standard $18.73 $24.10 $29.46
Service, based
on refuse cart
size
Additional $6.44 $8.59 $10.74
Refuse Cart
Additional free free free
Recycling Cart
Additional $2.15 n/a $4.30
Green Waste
Cart(over
1 ... ___ ---~'
Other Cart Rates and Services (Charged in Addition to Monthly
Cart Service Rates)
Backyard Service -per home per month, all $6.62
cart sizes
Senior Rate Reduction 10%
Low-Income Rate Reduction 5%
Annual Payment Rate Reduction 5%
Additional Special Overage Pickup for $5.37
Automated Cart Customers (in excess of two
pickups per year), per pickup
Additional Bulky Item pickups (in excess of $26.85
three free pickups per dwelling unit per year),
lperitem
Cart Exchange (after free-exchange period), per $16.11
reauest
Cart Re-delivery Fee (if carts are pulled for non-$26.85
payment, one charge for redelivery of all carts)
Re-Start Fee -after voluntary suspension of $16.11
service, if carts have not been pulled, per re-
start
*These rates are maximum not to exceed (capped) rates.
** Per Section 6.7 of agreement, UWS automated cart rates to match EDCO's
;•111tnma1Prl rart rah•~
uws
Manual Unlimited Backyard,
~Manure,MF
Automatea
1.20% Cart service
uws
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City Of Rancho Palos Verdes
UWS FY 13-14 Proposed Rate Adjustment -Residential
EXHIBIT 4 EXHIBIT 4
Universal Waste Systems, Inc. Universal Waste Systems, Inc.
Multi-Family Multi-Family
CURRENT RATES* for FY 12-13 PROPOSED RATES* for FY 13-14
,n, -----th> d ------------------------o. 2013 for July 1, 2012 through J -~----, -----
Monthly Bin Rates
No. Pickups per week
Container Size 1 2 3 4
2-yard $71.94 $100.29 $128.13 $142.48
3-yard $100.10 $128.16 $156.27 $184.36
4-yard $114.20 $142.24 $184.41 $227.57
Manure 3-yard $130.31
Recycling No charge
bin/cart
Other Bin Service Rates -Per Month
Bin Service 1 2
Locking Bin $7.42 $9.26
Service
Scout Vehicles $27.46 $47.15
Bin Push-Out $41.65 $74.15
Service (35 feet
or further)
Additional Service Charges
Portuguese Bend Beach Oub -beach litter
container collection per month (not to exceed)
Bin Cleaning Per Bin
Bin Overage Oean-up (following one written
warning) Per Clean Up
Additional Bulky Item pickups (in excess of three
free pickups per dwelling unit per year) Per Item
Emergency Service Rates -one crew and one
collection truck (Per Hr)
Fees FY12-13
Amount
Collector
Environmental
No. Pickups per week
3
$10.56
$66.44
$100.12
Rate Per Service
$2,084.85
$26.07
$26.07
$26.07
$88.61
12% of gross Receipts
3% of gross Receipts
4
$11.86
$85.94
$126.12
5
$184.32
$227.53
$274.94
5
$13.16
$105.45
$152.11
6 Extra Pickups
$21241 $15.64
$255.78 $26.07
$318.58 $36.49
$26.07
6
$14.46
$124.95
$178.11
FoU ----h> -------d ------------for July l, 2013 through J 30. 2014 -------. ---
Monthly Bin Rates
No. Picknps per week
Container
Size 1 2 3 4
2-yard $7223 $100.69 $128.64 $143.05
3-yard $100.50 $128.67 $156.90 $185.10
4-yard $114.66 $142.81 $185.15 $228.48
Manure3-$130.83
vard
Recycling No charge
bin/cart
Other Bin Service Rates -Per Month
Bin Service 1 2
Locking Bin $7.45 $9.30
Service
Scout Vehicles $27.57 $47.34
Bin Push-Out $41.82 $74.45
Service (35
feet or
"·-•'---'
Additional Service Charges
Portuguese Bend Beach Oub -beach litter
container collection per month (not to exceed)
Bin Oeaning Per Bin
Bin Overage Oean-up (following one written
warning) Per Oean Up
Additional Bulky Item pickups (in excess of
three free pickups per dwelling unit per year)
Per Item
Emergency Service Rates -one crew and one
collection truck (Per Hr)
Proposed Fees FY 13-14
Amount
Collector
Environmental
No. Pickups per week
3
$10.60
$66.71
$100.52
Rate Per Service
$2,093.19
$26.17
$26.17
$26.17
$88.96
12% of gross Receipts
3% of gross Receipts
4
$11.91
$86.28
$126.62
5 6 Extra Pickups
$185.06 $213.26 $15.70
$228.44 $256.80 $26.17
$276.04 $319.85 $36.64
$26.17
5 6
$13.21 $14.52
$105.87 $125.45
$152.72 $178.82
Recvcline: Rebate $16,000 I Rebated directly to customers effective 1/1/2013 "~'clinit Rebate $0 As of 1/1/2013, the amount is rebated to UWS Customers at $1.31/mo per unit per customer ,
•The rates are maximum not to exceed {capped) rates * The rates are maximum not to exceed (capped) rates
W:\lAUREN\STAFFRPl\REFUSE\2013\UWS rate Increase req 2013 rev S-1final.xis2 5/28/2013 uws
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Series Id: WPU0531
Not Seasonally Adjusted
Group: Fuels and related products and power
Item: Natural gas
Base Date: 198200
Download:
~""'"Year,= ='Yu~-~ ·Mar . "pr·•·.·.•·.··.
~ 2003 193.5 216.5 330.1 201.9
~ 2004 242.3 ' 231.2 208.1 218.7
~ 2005 252.4 253.2 257.4 298.2
~ 2006 403.4 317.6 283.6 277.4
l 2007 241.7 295.5 298.1 288.4
' ~ 2008 293.4 332.4 362.7 384
~ 2009 229.4 ~ 175.9 146.8 138.7
~ 2010 244.4 231.2 204.3 168.8
~ 2011 179.6 183 165 178.6
~ 2012 132.4 115.3 104.7 92.3
~ 2013 144.0(P)
..,,,/ ...
211.2
241.4
278.2
275.8
301.9
437
135.6
175.8
182.4
89.4
uws
"'""':':' /
................. ) •. Aug i ~' •·. .. · .......• oc;t Nov ""'llec"' AnnuaTl B
237.4 219.4 195.4 202.4 184.1 181.2 200.6 214.5 ~
270.7 257.5 249.8 212.8 222.1 306.7 289.5 245.9 ~
260.5 296 316 417.3 492.7 486.4 416 335.4 E
240.9 241.7 284 263.4 176.6 ~ 292.9 307 280.3 ~
304.7 274 241.3 216.8 248.6 ~ 282.3 292.1 273.8 ~
449.5 489.9 355.7 306.9 257 217.2 242 344 ~
140.2 151.5 147.8 123.3 154 181.5 195.1 160 §
178 195.4 194.3 157.7 159.6 143.9 176.7 185.8 ~
183.9 184 182.5 167.1 158.4 148.3 144.4 171.4 ~
102.1 115.6 125.9 115.4 125.5(P) 145.6(P) 156.0(P) 118.3(P) i
~ i
W : Preliminary. All indexes are subject to revision four months after original publication. !
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Change -53.1
% -31%
2
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Producer Price Index Industry Data
Series Id: PCU336120336120
Industry: Heavy duty truck mfg
Product: Heavy duty truck mfg
Base Date: 200312
uws
http://data.bls.gov/pdq/SurveyOutputServlet;jsessionid=0706792B720C799F2371DAOFA93A6D7A.tc_instance4
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Change 3.2
% 2.4%
2
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Consumer Price Index -All Urban Consumers
Series Id: CUUROOOOSAOL 1 E
Not Seasonally Adjusted
Area: U.S. city average
Item: All items less food and energy
Base Period: 1982-84=100
uws
Change 4.747
% 2.1%
2
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0
uws
EXHIBIT SB
Tip Fees
2010 through 2013
Actual Actual Actual Projected
7 /1/2010 7 /1/2011 7 /1/2012 7 /1/2013
Puente MSW $ 38.26 $ 38.26 $ 38.41 $ 38.41
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