Loading...
CC - Item 3A - Consolidated Disposal Services Rate Increase 2007• 0 ROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: ANDREW C. LAZZARETTO, CITY MANAGE DATE: NOVEMBER 14, 2006 SUBJECT: PUBLIC HEARING: CONSIDERATION OF CONSOLIDATED DISPOSAL SERVICES RATE INCREASE FOR SERVICES DURING CALENDAR YEAR 2007 SUMMARY At the October 24th Council Meeting, a public hearing was scheduled for November 14th to consider Consolidated Disposal Services request for an increase in their residential rates of 6.61% and commercial rates of 7.64% to be effective January 1, 2007. These rates include a, one time only, additional increase to cover the extraordinary increase in gas prices over the past year. At that same meeting the Council approved amendment No. 4 which changed the annual adjustment date from August 1st to January 1St and granted the City Manager authority to implement the annual rate increase, provided it does not exceed the formula in the agreement. Staff Recommendation Staff recommends that the City Council, after opening the public hearing and taking comments, close the public hearing and approve the rate increase, effective January 1, 2007. ANALYSIS The current agreement between the City and CDS includes an annual cost of living formula that is based on a combination of the consumer price index (70%) and the Puente Hills Landfill increase (30%). Since the price of fuel has increased 45.5% from June 2005 to August 2006, CDS is requesting a one time additional charge to cover this. The increase in residential rates with the fuel factored in would result in an increase from $15.24 to $16.25. Background On September 27, 2005 the City Council approved CDS's request for their annual rate adjustment which amounted to an increase of 3.7% for residential and 4.3% for commercial. The monthly residential rate went from $12.00 to $12.44. In a separate action at that meeting, the Council continued CDS's request for a fully automated green APPROVED FOR CITY COUNCIL AGENDA: y"'~" City Council Meeting November 14, 2006 Page 2 of 3 waste and residential recycling program, including changes in the bulky item pick-up program. The City Council discussed their request for a fully automated pick-up program at the October 11th Council Meeting. Also included in their proposal was a year round bulky item pickup program that would take place on the same day as the trash pick-up. Residents would be limited to 25 items per year and would be required to call 24 hours in advance. E-waste and tires would be considered bulky items. After discussing the item at length, the City Council continued the item to the November 22nd meeting. At the November meeting the City Council approved the year round bulky item pick up, effective January 1, 2006. The Council also approved an automated residential recycling program effective May 1, 2006. The green waste program remained a manual system. The action resulted in residential rates increasing from $12.44 per month to $15.24 per month. At the June 13, 2006 Community Development Commission Meeting, a representative from the Sanitation District gave the Commission a presentation on the challenges facing our cities and counties in the disposal of solid waste. It was their opinion that it was unlikely that new landfills or extensions of current sites will be approved. This has a direct impact on both cities and the solid waste industry. Landfill tipping fees will continue to increase and since they are 30% of the formula, we expect continued increases in trash rates. As indicated in the attached CDS letter, the Puente Hills Landfill went from $18.13 to 22.65 per ton on January 1, 2005. A year later it went to $24.43 per ton and it will go to $26.20 per ton effective January 1, 2007. Discussion At the previous Council Meeting of October 24th, the CDS representative distributed a list of abandoned commercial bulky items that had not been charged; and commercial bulky items that had been billed to the respective property owners. Subsequently the Mayor brought to our attention that the list indicated a charge of $25 per item which was contrary to the figure stated by the CDS representative and which was not listed in the proposed rate schedule. Please note that the new rate schedule lists the $25 charge under the commercial rates. Considering the major increase in gas prices over the past year, staff is recommending that CDS be granted the opportunity to recover some of their additional fuel related costs. As indicated in their attached letter, this will be a one time charge unless they experience the same situation. PUBLIC NOTICE PROCESS This item has been noticed through the regular public hearing notification process. i 0 0 City Council Meeting November 14, 2006 Page 3 of 3 Attachment A: Letter from CDS dated October 19, 2006 Attachment B: Revised Rate Schedule Submitted by: CONSOLIDATED DISPOSAL SERVJCE • A Subsidiary of * REPLARX SERVICES, INC. October 19, 2006 12495 E. C ft 6uem Mr. Andy Lazrar'etto Long Beach ca 90805 City Manager City of Rosemead FaMmoe (WZ 531-4710 8838 East Valley Blvd. _ Rosemead, CA 91770 RE: Application for Adjustment of Waste Collection and Disposal Rates for year 2006-2007 Dear Mr. Lazzaretto: Consolidated Disposal Service hereby submits its annual request for adjustment of the waste collection and disposal rates for the City of Rosemead. This application is based on the franchise agreement's formula for rate adjustments based on CPI and disposal fee increases. Furthermore, Consolidated makes its revised request with the understanding that the Bighorn decision does not make Article X99 procedures applicable to the requested increase and that we are prepared to bear the risk attendant on proceeding in this manner. i As per our contract with the City of Rosemead and Consolidated Disposal Service, CDS has consistently used the rate adjustment formula set forth in the Franchise Agreement with a yearly rate adjustment effective date of August 1". Consolidated Disposal Service respectfully request your consideration in changing the yearly rate adjustment effective date from August 1" to January 1", due to the fact that in 2004, the County Sanitation District changed their yearly gate fee increase date from July 1" to January 1'`. Therefore, Consolidated Disposal Service request that the Rosemead City Council consider amending our contract to change the yearly effective date of our rate adjustment from August la to January 1st or to the date in which the Sanitation District changes their yearly gate fee increase. Consolidated Disposal Service requests the following rate adjustment with a new effective date of January 1, 2007. The Consumer Price Index reported by the Department of Labor Bureau of Statistics for the Los Angeles-Anabeim-Riverside area for period June 2005 to August 2006, has increased by 5.58%. Unfortunately, the cost of fuel continues to rise. In June 2005 thru August 2006 fuel increased by 45.5%, as per the US Department of Energy, Retail On-Highway Diesel Prices. In the event that fire! continues o drop, this fuel adiustment regtit will be a one time request. Also, the Sanitation District raised its disposal fee on January 1, 2005 at Puente Hills Landfill from $18-13 to $22.65 per disposable tons. They again increased their gate fee on January 1, 2006 to $24.43 per ton and will increase to $26.20 on January 1, 2007. The South Crate Transfer Facility has also increased their rates from $36.55 per ton to $38-22 per disposable tonnage and the Commerce Waste to Energy • ®..1CG MCCW=r,MM 0 0 • Facility increased their gate fee from $42.00 ton to $53.00 per ton. We therefore, submit the following rate adjustment for your review and approval. Rate Adjustment Formuls CnmmereW Tlie rare adjustments formuki to be applied is as follows: • Consolidated respectfully requests that the City Council consider this rate adjustment application and that the new rates be approved to take effect January 1, 2007. Thank you for your consideration in this matter. Should you have any question regarding this application or any other matter, please do not besitate to call me at (562) 663-3453. Sincerely, Richard FierTo Director of Community Affairs 0 Enclosures - Work Sheets B& Aditt"meut Formula Rcsidcntial The rate adjustmcnts formula to be applied is as follows: Consolidated Disposal Service requests that the rate adjustment of 6.61% as computed above be applied uniformly to all residential customers and 7.64% to all commereiaLlindustrial customers in the City of Rosemead. Please refer to the attached page for a computation of rates. • C New Rates Residential Rates: Category C urrent Rate New Rate Single Family Dwelling - Residential Curbside one 100 Gal Cart) $ 15.24 $ 16.25 Multiple Family Dwelling-Detached Units On A Single Lot: First Unit $ 15.24 $ 16.25 Each Additional Unit $ 12.31 $ 13.13 Multiple Family Units - Attached Units (Apartments and Condos) And Mobilhome Parks: First Unit $ 15.24 $ 16.25 Each Additional Unit $ 10.02 $ 10.68 Special Qualified Senior Citizen Hardship Rate / For Residential Curbside Service $ 10.14 $ 10.81 Special Qualified Handicapped Citizen / Backyard Collection Rates For Single Family Residences: $ 15.24 S 16.25 To ! .:ualified Senior;Handica ed Citizen / Backyard Collection Rates $ 10 14 $ 10.81 Additional 100 Gallon Cart $ 2.14 $ 2.28 Special One-Time Pick-Up Cost For Pick-Up And Disposal Of Appliances, Furniture And Bulk Items No Charge No Charge Residential - Special One-Time Drop-Off And Collection of A 3-Cubic Yard Bin Pick U / Delivery Charge $ 54.98 $ 58.61 Each Dump $ 22.18 $ 23.65 Total $ 7716 $ 82.26 Residential - Special One-Time Drop-Off And Collection of A 10 to 40 Cubic Yard "Roll-Off" Container $ 430.19 $ 458.62 Overweight 7 Ton Limit $ 52.66 $ 56.14 Daily Rental After Seven Days Without A Dump $ 15.00 $ 15.99 Dead Run $ 75.00 $ 79.96 Commercial Rates 3 Cubic Yard Bins CURRENT RATE Without Scout Scout 1 Da P/U 100.27 110.29 2 Da P/U 152.19 167.38 3 Da P/U 206.48 227.11 4 Da P/U 261.15 287.26 5 Da P/U 322.65 354.92 6 Da P/U 369.59 406.58 NEW RATE Without Scout Scout 1 Da P/U 107.93 118.71 2 Da P/U 163.81 180.16 3 Da P/U 222.25 244.45 4 Da P/U 281.09 309.20 5 Da P/U 347.29 382.02 6 Da P/U 397.81 437.63 1 1/2 Cubic Yard Bins CURRENT RATE NEW RATE I I Without Scout Scout 1 De P/U 67.47 74.21 I Without Scout k Scout lDay P/U 72.62 79.88 Category Current Rate New Rate Commercial - One-Time Drop-Off And Collection Of A 3-Cubic Yard Bin Pick U / Delivery Charge $ 67.30 72.44 Each Dump $ 35.13 37.81 Total $ 102.43 110.25 Commercial - Special One-Time Drop-Off And Collection of A 10 to 40 Cubic Yard "Roll-OPP Container $ 392.35 422.31 Overweight 7 Ton Limit $ 50.12 53.95 Dail Rental After Seven Da Without A Dump $ 15.00 16.15 Dead Run $ 75.00 80.73 Commercial - Special One-Time Drop-Off And Collection Of A 30 Cubic Yard Compactor Container $ 519.72 559.41 Overweight 9 Ton Limit $ 50.12 53.95 Dail Rental After Seven Da Without A Dump $ 15.00 16.15 Dead Run $ 75.00 80.73 Commercial - Special Automated Service for Qualified Commercial, Limited Use Customers. Max 2-96 gallon cans 1 time per week $ 68.27 73.48 Bulky Item Pick - Up and Disposal of Appliances, Furniture and other such Office Items. 1-2 Items $25.00, 3-5 Items $50.00, 6-10 items $100.00. Over 10 Bulky Items Customer must order a 40 Cubic Yard Roll-Off at current rate.