RPVCCA_SR_2011_06_21_03_Residential_Solid_Waste_&_Recycling_Rate_Adjustment_EDCO
RANCHO PALOS VERDES
PUBLIC HEARING
Date: June 21, 2011
Subject: Residential Solid Waste and Recycling Rate Adjustment for EDCO
Disposal Corporation for FY11-12
Subject Property: Citywide
1. Declare the Hearing Open: Mayor Long
2. Report of Notice Given: City Clerk Morreale
3. Staff Report & Recommendation: Senior Administrative Analyst Ramezani
4. Public Testimony:
Appellants: N/A
Applicant: EDCO Disposal Corporation
5. Council Questions:
6. Rebuttal:
7. Declare Hearing Closed: Mayor Long
8. Council Deliberation:
9. Council Action:
W:\AGENDA\Public Hearing Formats\public hearing format Council- EDCO Form 25.doc
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CITY OF RANCHO PALOS VERDES
REVIEWED:
Project Manager:
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
HONORABLE MAYOR &CITY COUNCIL MEMB~ERS~
RAY HOLLAND,DIRECTOR OF PUBLIC WORKS
JUNE 21,2011
RESIDENTIAL SOLID WASTE AND RECYCLING RATE
ADJUSTMENT FOR EDCO DISPOSAL CORPORATION
FOR FY 11-12
CAROLYN LEHR,CITY MANAGER o.f2.-
Lauren Ramezani,Sr.Administrative Analyst I:t<-
RECOMMENDATIONS
1.Approve the maximum permissible rates that EDCO Disposal Corporation can
charge single-family and multi-family customers in FY 11-12.
2.Increase the City's FY 11-12 Collector and Environmental Fees,paid by EDCO,by
$16,835 and $4,255,respectively.
BACKGROUND
The City has exclusive residential solid waste and recycling agreements with EDCO
Disposal Corporation (EDCO)and Universal Waste Systems,Inc.(UWS).Both
agreements commenced on July 1,2010 and will terminate on June 30,2017.
Additionally,both agreements have an extension option of up to 36-months,at the City's
sole discretion.
The City sets the cap for the maximum allowable rates EDCO can charge.Per their
residential agreements,EDCO and UWS are eligible for annual adjustments in the
maximum permissible rates they can charge.The increases are based on national
published price indices and solid waste disposal facility gate rates.Such requests are
due to the City by March 30 of every year.EDCO and UWS both submitted their requests
for rate adjustments for FY 11-12 prior to that deadline.A Notice of this Public Hearing
was published in the Palos Verdes Peninsula News on June 9,and June 16,2011.
UWS's request is addressed in a separate staff report.
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EDCO Public Hearing
June 21,2011
P'age 2
DISCUSSION
EDCO's City approved rate adjustment methodology (RAM)has two cost components:a
Disposal Cost Component and a Service/Collection Cost Component.
Disposal Cost Component:EDCO's disposal cost increases are based on the percentage
increase at the County owned landfills from January 1,2010 to January 1,2011.
Disposal costs at Puente Hills for solid waste did not increase.However,Puente Hills'
disposal rate for green waste increased 15%,from $19.95/ton to $22.95/ton.EDCO has
a contract with Orange County landfill until 2016,which had a gate rate increase of one
cent, from $22.12/ton to $22.13/ton.EDCO's average weighted disposal cost component
increased 5.2%.
Service/Collection Cost Component:EDCO's RAM calculates the rate adjustment by
including published national indices from the U.S.Department of Labor,Bureau of Labor
Statistics.They are specifically tailored to solid waste collection operations.They
include:Producer Price Index for fuel (natural gas)and heavy-duty truck manufacturing,
and the Consumer Price Index (CPI).The hourly labor costs are based on approved labor
union contracts.The RAM is based on the average percentage changes for 12 month
(January 2010 to December 2010),with new maximum permissible rates effective on July
1 of the following year.EDCO's average weighted collection cost component increased
3..2%.
Approximately 27%of EDCO's costs are related to disposal and 73%with service/
collection.Therefore,EDCO's total weighted residential rate adjustment,which reflects
both disposal and service cost components,is 3.7%.Examples of EDCO's proposed
maximum rates are listed below:
Service Level Current Proposed Proposed Proposed Max.
Single-family Max. Max.increase Max.Monthly Rates for
(trash cart)Monthly in Monthly Monthly Seniors
Rates Rates for Rates for (10%discount)
FY 10-11 FY 11-12 FY 11-12 FY 11-12
Curbside 35-gallon $17.44 $0.65 $18.09 $16.28
Curbside 64-gallon $22.44 $0.83 $23.27 $20.94
Curbside 96-gallon $27.44 $1.02 $28.46 $25.61
The multi-family accounts would also experience a similar 3.7%increase in the cap.For
example,the maximum rate for a 2-yard bin picked up once a week,would increase by
$2.88/month from $77.76/month to $80.64/month.
Staff and SCS Engineers,the City's AB 939 consultant,have reviewed the data and
calculations provided by EDCO,and found them accurate.(See attached spreadsheets
for proposed maximum permissible monthly rates for all single and multi-family service
levels).
W\LAUREN\STAFFRPl\REFUSE\2011\EDCO rate adjustment fy 11-12 final .doc 3-3
EDCO Public Hearing
Ji.me 21,2011
Page 3
Furthermore,the neighboring City of Rolling Hills Estates recently approved a residential
solid waste and recycling rate increase averaging 5.4%(reflecting FY 09/10 and 10/11).
EDCO representatives will be available at this Council meeting to answer questions.
Fee Distribution/Allocation:EDCO currently pays the City an annual Collector Fee of
$455,000.The agreement automatically results in the City fees increasing by the same
percentage as the maximum rate increase.If staffs recommendations were approved,
the City's Collector Fee would increase 3.7%,from $455,000 to $471,835 (or by $16,835)
in FY 11-12.The distribution of the fee is at the discretion of the City Council.Staff
proposes continuing the Collector Fee's FY 10-11 allocation for FY 11-12:
Collector Fee Fund Current Current Proposed Proposed
Allocation Percentage Amount Increase Amount
FY 10-11 FY 10-11 FY 11-12 FY 11-12
General Fund-Various 70%$300,000 $11,100 $311,100
Waste Reduction Fund 30%$155,000 $5,735 $160,735
Total 100%$455,000 $16,835 $471,835
Additionally,staff recommends continuing depositing 100%of the Environmental Fee into
the Stormwater Quality Fund for NPDES program implementation,mandates and street
sweeping.The FY 11-12 fee would increase by $4,255,from $115,000 to $119,255.
Finally,EDCO provides the City an annual Recycfing Rebate of $280,000,which is
deposited in the Beautification-Recycling Fund.This amount is based on the current
California Redemption Value (CRV)of beverage containers,and will change only when
California changes its CRV amounts.The CRV amounts have not changed since 2007.
ALTERNATIVE
The City Council may change the proposed Collector Fee,Environmental Fee,and/or
Recycling Rebate distribution as otherwise deemed appropriate.
FISCAL IMPACT
Approving the staff recommendations would:
. •Increase EDCO's FY 11-12 maximum permissible rates for single-family and
multi-family customers by 3.7%.
•Automatically increase the City's FY 11-12 Collector Fee by $16,835,and the
Environmental Fee by $4,255.
Attachments:EDCO's rate adjustment calculations
W:\LAUREN\STAFFRPTIREFUSE\2011\EDCO rate adjustment fy 11-12 final .doc 3-4
Current Maximum Rates Effective 7N2010
Monthly 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:"allan
Standard $17.44 $22.44 $27.44
Service
Additional $6.00 $8.00 $10.00
Refuse Cart
Additional Free Free Free
Recycling Cart
Additional $2.00 nja $4.00
Green Waste
Cart (above
three)
Other Cart Rates and Services (Charged in Addition to
Monthly Cart Service Rates)
Backyard Service -per home per month,all $6.16
cart sizes
Pup Service -per home per month,all cart $5.14
sizes
Backyard and Pup Services -per home per $8.22
month,all cart sizes
Senior Rate Reduction 10%
Low-Income Rate Reduction 5%
Annual Payment Rate Reduction 5%
Additional Special Overage Pickup for $5.00
Automated Cart Customers,per pickup (in
excess of two pickups per year)
Additional Bulky Item pickups (in excess of $25.00
three free pickups per dwelling unit per year),
'per item
Cart Exchange (after free-exchange period),$15.00
er reQuest
Cart Re-delivery Fee (if carls are pulled for $25.00
non-payment,one charge for redelivery of all
carts)
Re-Start Fee -after voluntary suspension of $15.00
service,if carts have not been pulled,per re-
start
..Including all fees retained by,or paid to,City.
EDCO Disposal Corporation
Rate Adjustment for FY 11-12
Proposed Maximum Rates Effective 7/112011
Monthlv 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:"allan
Standard $18.09 $23.27 $28.46
Service
Additional $6.22 $8.30 $10.37
Refuse Cart
Additional Free Free Free
Recycling Cart
Additional $2.07 nja $4.15
Green Waste
I~:~\above
Other Cart Rates and Services (Charged in Addition to
Monthly Cart Service Rates)
Backyard Service -per home per month,all $6.39
cart sizes
Pup Service -per home per month,all cart $5.33
sizes
Backyard and Pup Services -per home per $8.52
month,all cart sizes
Senior Rate Reduction 10%
Low-Income Rate Reduction 5%
Annual Payment Rate Reduction 5%
Additional Special Overage Pickup for $5.19
Automated Cart Customers,per pickup (in
excess of two pickups per year)
Additional Bulky Item pickups (in excess of $25.93
three free pickups per dwelling unit per year),
eritem
Cart Exchange (after free-exchange period),$15.56
'oer reouest
Cart Re-delivery Fee (if carls are pulled for $25.93
non-payment,one charge for redelivery qf all
carls)
Re-Start Fee -after voluntary suspension of $15.56
service,if carls have not been pulled,per re-
start
Including all fees retained by,or paid to,City .
..
Increase 3.70%
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EDCQ Disposal Corporation
Rate Adjustment for FY 11-12
EXHIBIT 4 ..
EDCO Disposal Corporation
Proposed FY 11-12 MAXIMUM RATES*
--~........-....~.-----~.......1---,----~~...."J-.'---,--•
Monthly Bin Rates
Pickups per week
Container
Size 1 2 3 4 5 6 Extra Pickups
2-vard $80.64 $112.38 $144.12 $159.99 $207.61 $221.24 $57.51
3-vard $112.41 $144.15 $175.90 $207.65 $255.24 $265.30 $67.10
3-yard w l $224.81 $288.31 $351.78 $415.29 $510.48 $530.58 $134.20
comnactor
4-vard $128.34 $160.02 $207.65 $255.28
$311.Q1 $330.55 $76.69
4-yard wi $256.67 $320.05 $415.31 $510.55 $619.89 $661.10 $155.45
comnactor
6-vard $160.08 $214.74 $255.29 $302.91 $352.03 $368.03 $115.03
Recycling No charge
binicart
EXHIBIT 4
EDCO Disposal Corporation
CURRENT MAXIMUM RATES*(FY 10-11)
h-~_._.._.----'_._--_._..1---,-----...---'J--'-~-'----'
Monthly Bin Rates
Pickups per week
Container
Size 1 2 3 4 5 6 Extra Pickups
2-yard $77.76 $108.37 $138.98 $154.28 $200.20 $213.35 $55.46
3-vard $108.40 $139.01 $169.62 $200.24 $246.13 $255.83 $64.71
3-yard wi $216.79 $278.02 $339.23 $400.47 $492.27 $511.65 $129.41
compactor
4-vard $123.76 $154.31 $200.24 $246.17 $299.91 $318.76 $73.95
4-yard wi $247.51 $308.63 $400.49 $492.33 $597.77 $637.51 $149.90
compactor
6-vard $154.37 $207.08 $246.18 $292.10 $339.47 $354.90 $110.93
Recycling No charge
bin/cart
Other Bin Service Rates -Per Month
Pickups er week
Bin Service 1 2 3 4 5 6
Locking Bin $6.H $8.22 $9.24 $10.2 $12.33 $13.35
Service
Scout Vehicles $25.68 $45.19 $64.71 $84.22 $103.7 $123.2
Bin Push-Out $43.14 $77.03 $105.7 $130.44 $159.20 $190.01
Service (35
feet or further)
Other Bin Service Rates -Per Month
PickullS per week
Bin Service 1 2 3 4 5 6
Locking Bin $6.39 $8.52 $9.58 $10.65 $12.79 $13.84
Service
Scout Vehicles $26.63 $46.86 $67.10 $87.34 $107.58 $127.81
Bin Push-Out $44.74 $79.88 $109.70 $135.27 $165.09 $197.04
Service (35
feet or further)
Additional Service Charges Rate Per
Service
Bin Cleaninl!Per Bin $45.00
Bin Overage Clean-up (following one written $20.00
warning)Per Clean Up
Additional Bulky Item pickups (in excess of $25.00
three free pickups per dwelling unit per year)
Per Item
Emergency Service Rates -one crew and one $85.00
collection truck (per Hr)
Additional Service Charges Rate Per
Service
Bin Cleaninl!Per Bin $46.67
Bin Overage Clean-up (following one written $20.74
warning)Per Clean Up
Additional Bulky Item pickups (in excess of $25.93
three free pickups per dwelling unit per year)
Per Item
Emergency Service Rates -one crew and one $88.15
colIection truck (per Hr)
.".Induding all fees retained by,or paid to,Oty..".Including all fees retained by,or paid to,Oty.
3.7%increase
.7%increase
No change
Proposed fees FY 11-12
Amount
ColIector $471,835 I,
Environmental $119,255 13
Recyclinl!Rebate $280,000 Ir
Fees FY 10-11 Amount
Collector $455,000
EnvirOninental $115,000
Recydinl!Rebate $280,000
W:\LALJREN\Solid Wastf!\HALJlER5\fDrO\FY 10·11\R::Itp Atiill~for 11_1 J\ronv of RPV ~y C;R:::Ih.llr!hlctmpnt :>n11 C::"hmiccinn".fin:>I'?\vic e;/1:lnn1111.:lQ 01111
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EDCO Disposal Corporation
Rate Adjustment for FY 11-12
EXHIBIT5A
RATE ADJUSTMENT FORMULA -Effective 7N2011
Step One:Calculate percentage change in indices
ABC
Adjustment Factor Index
Service Component
Old Index Value
(prioryear's "New
Index")
2010
New Index Value
2011
Percent Change In
Index «Column B/
ColumnA)-1)
Labor (hrly rate)
Fuel (Natural Gas)
Equipment
All Other
II Disposal Component (5)$22.64 I $23.81
3.2%
15.7%
3.0%
1.0%
5.2%
D
Step Two:Determine components
E F G
Adjustment Factor
Service Component
Cost Component
Weighted as a %of
Component Total (6)
Percent Change In Total Weighted Change Total Weighted Change,Index (from ColumnC)(Column D x E)Subject to Increase Cap
Labor
Fuel
EqJlipment
All Other
Service Sub-Total
IIDisposal Sub-Total
29%
8%
21%
42%
100.0%
100%
3.2%
15.7%
3.0%
1.0%
5.2%
0.9%
1.3%
0.6%
0.4%
3.2%
5.2%
3.2%(7)
5.2%(8)
Total Rate Adjustment
Service
Disposal
Total Rate Adjustment
73%
27%
100%
H
Step Three:Apply percentage change to current rates
I J
2.3%
3.7%
K
Rate Category
Existing Customer Total Weighted Rate Increase or Adjusted Max.Rate
Maximum Rate Percentage Change Decrease (Column H x (Column H +Column J)
FY 2010/11 (Row 13,Column F)Column I)FY 2011/12
Residential Service -64 gal :'$.:':"'///:"':"':::$.iAA::::3.7%$0.83 $ 23.27
L
Step Four:Re-weight cost components
M N o P
Adjustment Factor
Cost Component
Index Weighting (Column
D)
Percent Change as
Applied to Rate
Adjustment
(Column E)
Increase in Cost Cost Component
Components (Column L Increased (Column L +
x Column M)Column N)
Cost Components
Reweighted to Equal
100%(To be used for
FY2012/13)
Labor
Fuel
Equipment
All Other
Service Sub-Total
Service Component
Disposal Component
(1)
(2)
(3)
(4)
29.0%
8.0%
21.0%
42.0%
100.0%
73.0%
27.0%
3.2%
15.7%
3.0%
1.0%
3.2%
5.2%
0.9%
1.3%
0.6%
0.4%
2.3%
1.4%
29.9%
9.3%
21.6%
42.4%
103.2%
75.3%
28.4%
29.0%
9.0%
20.9%
41.1%
100.0%
72.6%
27.4%
Total 100.0%103.7%100.0%
(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)Consumer Price Index for All Urban Consumers (CUUROOOOSAOL1E),all items less food and energy index -u.s.city average -average annual change.
(5)As determined in Exhibit 5B.
(6)Based on EDCO's Proposal in 2009.After the first rate adjustment,this column comes from Column P of the previous year's rate adjustment worksheet
(7)Service component change is limited to 6%in anyone year.
(8)Disposal Increase capped atlO%.
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