CC - Item 4B - Staff Report Request from Consolidated Disposal Services S E M F
{4 y stafteport
TO: HONORABLE MAYOR
AND MEMBERS
ROSEMEAD CITY COUNCIL
FROM:11NK G. TRIPEPI, CITY MANAGE
DATE: JULY 20. 1999
RE: REQUEST FROM CONSOLIDATED DISPOSAL SERVICES, INC. FOR ANNUAL
ADJUSTMENT OF RESIDENTIAL AND COMMERCIAL REFUSE RATES
Consolidated Disposal Services, Inc. (CDS)has requested an increase in residential and commercial
refuse rates. The request is in accordance with the Second Amendment to the City's franchise
agreement with CDS, as approved by the City Council in June 1996.
The Agreement specifies that the contractor is entitled to an annual rate adjustment pursuant to the
formula stated in the Second Amendment (attached). The increase requested by the contractor is
based on the rate-of-change indicated in the June 1999 Consumer Price Index(CPI)report(70%) and
the annual adjustment of landfill tipping fees established for County landfills by the Sanitation
Districts of Los Angeles County (30%). The rate-of-change according to the June 1999 CPI report
is 2.0%for the Los Angeles-Riverside-Orange County area. The basic waste disposal rate established
by the County Sanitation Districts for the Puente Hills Landfill increased from $17.86 to $18.05 per
ton.
Consolidate Disposal uses, both, the Puente Hills Landfill and South Gate Transfer Station for
disposal of all solid waste and greenwaste collected in Rosemead. The company attempts to use the
Puente Hills facility whenever possible. However, the landfill generally accepts the maximum
tonnage allowed by mid day,thus forcing refuse haulers to utilize other facilities, such as the County
Transfer Station in South Gate. Because the tipping fees are different at Puente Hills for household
solid waste and greenwaste, and because some of the refuse collected in the City is disposed at the
South Gate Transfer station, CDS is seeking a rate adjustment that reflects that differential. The
following is a breakdown of actual tonnages disposed and the tipping fees charged by the respective
landfills: _
COUNCIL. AGENDA
JUL 2 7 jggg
ITEM No -F�
1999/2000 CDS Rate Adjustment
July 20, 1999
Page 2.
°AA=e New Rate %Change Total Disposed Total Increase
Puente Hills Landfill $17.86 $18.05 1.06% 56% 0.59%
South Gate Transfer Station $29.21 $30.21 3.42% 40% 1.37%
Greenwaste $11.50 $11.00 -4.35% Total
0.18 8%
Based on those totals,the formula for an increase in the residential and commercial refuse rates is as
follows:
CPI .70 x 2.0% 1.4%
+ Tipping Fees .30 x 1.8% 0. %
Rate Adjustment 1.9%
Current Rate $9.67
x %of Rate Adjustment 1.9%
Amount of Increase .183
Current Rate $9.67
+ Amount of Increase for 95/96 $ .18
1998/99 Residential Refuse Rate $9.85
It should be noted that these rates do not include the $.76 per month residential refuse surcharge that
went into effect in April 1993 to help defray the litigation and settlement costs associated with the
Transportation Leasing lawsuit. The actual cost to residents, including that fee would be $10.61 per
month. The net increase on residential refuse bill would be $.18 per month per household.
The rates for commercial refuse collection services and other services specified in the Franchise
Agreement are detailed in"Attachment A." Attached also is a copy of the June 1999 CPI report and
a copy of the Second Amendment to the City's franchise agreement with CDS.
RECOMMENDATION:
It is recommended that the City Council approve the request by Consolidated Disposal Services,Inc.
for a 1.9% adjustment in residential, commercial and industrial refuse rates effective August 1, 1999.
Attachments
ccmemo celsrts99.fgr
C`T NSOLIDATED
ser V C es
July 19, 1999
'2919 rgeq:za-r.w1
Same Frspn:_x
Sent Via Fax
Original to Follow By MailT9 n0n`rse=imas:.
Mr.Frank G.Tripepi
City M.uaager
City of Rosemead
8838 East Valley Boulevard
Rosemead,CA 91770
RE: Application for Adjustment of Waste Collection and Disposal Rates
Dear Mr. Tripepi:
CDS hereby submits its annual request for adjustment of the waste collcaion and disposal
rates to the City of Rosemead, This application k based on the franchise agreement's
allowance for annual rate adjustments based on CPI and disposal fee increases.
This rate adjustment has been calculated using the formula specified in the Franchise
Agreement which weighs the CPI at 30% and the tipping fees at 70%.
Rate Adjustment Formula
The rate adjustment formula to be applied is as follows:
Weighted Cost Adjustment
Value Increase % Percentages
Consumer Price Index _ 70% x 2.0% = 1.4%
Disposal Tipping Fees 30% x 1.8% = 1 .5%
Total Adjustment _ I ( 1.9%
Explanation of Cost Changes
1. Consumer Price Index: The CPI reported by the U.S_ Department of Labor, Bureau of
Labor Statistics for the Los Angeles-Anaheim-Riverside area is 2.0% for the last 12
months, as of the month of June, 1999, as stipulated in the Franchise Agreement.
2. The Los Angeles County Sanitation Districts has approved an increase in tipping fees to
take effect on July 1, 1999. The waste disposal rate will be increased by 50.19 per ton at
`.1r Hint. l :.ip,.p, •_ is Lao,
the Puente Hills Landfill. This will increase the base rate from $17.86 per ton to$16.05
per ton or 1.06%.
Rate Adjustment Request
CDS requests that the rate adjustment of 1.9% as computed above be applied uniformly to
residential,commercial/industrial rates charged in the City. Please refer to Attachment A
for a computation of rates.
CDS respectfully requests that the City Council consider this rate adjustment application and
that the new rates be approved to take effect August I, 1999.
Thank you for your favorable consideration in this matter as it aides CDS in continuing to
provide high quality service.
Should any questions arise regarding this application, please call me at (562) 663-3453.
Sincerely,
it— /el—I
Richard Fierro
Director of Community Affairs
/rap
cc Mark Bozajian
Brad Berren
Dave Ault
Enclosures-Work Sheet
LA County Sanitation District Rate Increase Letter
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3-30-1999 3:56PM FROM P. 1
, tan. a.�,,�,al. COUNTY SANITATION DISTRICTS
• OF LOS ANGELES COUNTY
1955 Workmen MITI Road, Whiter,CA 90601.1400
Moiling Address:PO. Box 4998, Whiter.CA 90607.4998 CHARLES W. CARRY
Telephone: 1562)699-7411,FAX: 1562)699.5422 Chief Engineer and General Manager
March25, 1999
File:31R-10.10
Dear City Manager/City Administrator.
New Rate,for Solid Waste Transfer and Disposal Facilities
The Sanitation Districts have adopted an ordinance which establishes new rates to be charged at the
Puente Hills,Spadra and Calabasas Landfills and the South Gate Transfer Station effective July 1, 1999.
The municipal solid waste rates at the Puente Hills and Spadra Landfills will increase$1.10/ton.
The increase is comprised ofS1.00hon in the basic rate to offset increased operating costs,and 50.10/ton for
the County's business license tax. The minimtutr,hard-to-handle,tires,special handling rates and the pull-off
charges at these facilities will include related increases. The rates at the South Gate Transfer Station will
increase 51.00/ton due to increased operating costs. These are the Ststgeneral increases in the Districts'
basic operating rates at the Puente Hills end Spadra Landfills since 1991,and at the South Gate Transfer
Station since 1929. Other increases have been due to fees and taxes paid to other agencies and to pay the cost
of redirecting some waste to Orange County.
•
The municipal solid waste rates at the Calabasas Landfill will increase S1.10/ton. The increase is
comprised of 51.00/ton in the basic rate to fund projects and expenditures required by the special use permit
recently issuedbytheNational Park Service and to offset increased capita]and operating costs,and 50.10/ton
for the County's business license tax The minimum,hard-to-handle,tires,and special handling rates and
the pull-off charge will include related increases. The rates at the Scholl Canyon Landfill will not increase.
A copy of the new rate schedule is enclosed. Should you desire any additional information,please
feel free to contact me.
Very truly yours,
Charles W. Carry
Stephen R.Ma n,Head
Solid Waste Management Department
SRM:ea
Enclosure
3-30-1999 3:57PM FROM P_ 2
COUNTY SANITATION DISTRICTS OF LOS ANGFI FS COUNTY
• Y. , a . - as ; I I a . Iv at - . 7a : . . • a as S
•
pFFF:CTJVE JULY I 1999
BATE
SFADRA LANDFILL. Pomona""' -
Municipal Solid and Inert Waste $18.05 hon
Hard-to-Handle Bulky Items 24.10 hon
Tires 44.45 /ton
Special Handling 40.05 /ten
Minimum Charge 17.00 pa load
Full-Offs - - 21.45 each
Segregated Uncontaminated Green Waste H.00 hon
pUPNI'E H51.IS T.ANDFIrJ , Whinier" ' 518.05 /ton
Solid and Inert Waste 24.10/ton
Hud-to-Handle Bulky Items 24.10 /ton
Handlingm 40-05 lion
MiMinimum
SpecialmCharge 17.00 per load Se21.45 each
Segregated Uncontaminated Green Wase 11.03 /ten
SOUTH GATE TRA NSFFR STATION,South Gate"
Municipal Solid and ken Waste $30.21 /ton
Hard-to-Handle Bulky Items 35.71 /ton
Minimum Charge 17.50 per load
4f ROLL(-ewers'T ANDFII I , GlendaleO1o'
Municipal Solid and Inert Waste ' 827.13 /ten
Hard-to-Handle Bulky horns 33.45 /ton
Tires 47_25 hon
Special Handling40.64 /ton
Minimum Charge 26.50 pm load
Pull-Offs26.45 each
Segregated Uoconraminated Green Waste 12.65 lion
- CALABASAS LANDFTL1Waste
825.17 Ilan
Municipal Solid and Inert -
Hard-to-Handle Bulky Items • 31.22 /ton
Tires . 44.42 hon
Special Handling 38.92 /ton
Minimum Charge 25.00 per load
Pull-Offs 2515 each
Segregated Uncontaminated Green Waste 12.10 /toe
•
COMMERCE REFUSE TQFNF.BGY FACILITY, Commerce1O
Refuse 533.00 /tan
Minimum Charge27.00 pa load
Documentation Destruelion 33.00 hon plus
435.00 per load
$OIRHFAST RPsOIIRCF RRCOVERY FACT! ITY fSFQHFI, Long Beach"
- Municipal Solid and Inert Waste(1-ton minimum) 528.88 /ton
Uncovered Loads Capable of Producing Litter: Spadra,hem Hills,Calabasas,South Gate-S4.40/ton surcharge:$4.40 minimum
Scholl Canyon-54.60/ton surcharge; $4.60 minimum
Commerce-S4.00/ton surcharge;$4.00 minimum
Non-manifested Tie Loads: Spadra,Puente Min,Calabasas•54.40hon surcharge;54.40 minimum
Sehull Canyon-54.60/ton surcharge;54.60 minimum
U'All races excluding pull-offs and green waste rates include the following fees:
California Integrated Solid Wasta Management Fee: SI.34 per ton
Los Angeles County Solid Waste Management Fee: 50.86 per ton
Los Angeles County Department of Health Services Regulatory Service Fee: $0.14 per ton
U'All rates and surcharges include the Los Angeles County Business License Tax:
10%of gross receipts,excluding state and local fees and taxes
's'All rates and surcharges include the City of Glendale•Scholl Canyon Landfill Assessment:
15%of gross receipts:vehicles owned and operated by the City of Glendale are exempt
"Rates effective March 2, 1998.
's'Rate effective July I, 1998.
SECOND AMENDMENT TO
EXCLUSIVE REFUSE COLLECTION AND RECYLCING
FRANCHISE AGREEMENT
This Agreement made and entered into this 25th day of June, 1996 by and between the
CITY OR ROSEMEAD, a municipal corporation, hereinafter referred to as "City" and
CONSOLIDATED DISPOSAL SERVICE, INC. hereinafter referred to as "Contractor" hereby
amends that certain agreement made and entered into effective August 1, 1991 and amended
effective January 11, 1994 between the parties, hereinafter referred to as "Agreement".
NOW THEREFORE, the City and the Contractor agree as follows:
1. The second paragraph of the Agreement is hereby revised to read as follows:
The City and Contractor agree each with the other that Contractor shall
have sole right to collect, had and dispose of all refuse and conduct a
comprehensive recycling program in the City of Rosemead for a term
commencing August I, 1996 and expiring July 31, 2001, provided however, that
commencing August 1, 1997 and every year thereafter, automatic one year
extensions shall be applied to said Agreement so that the term of this Agreement
shall thereafter remain at a constant five years, subject to the rights of the parties
to terminate the Agreement set forth in paragraph P.
2. Paragraph F - Collection Rates and Billing is hereby revised to read as follows:
F. COLLECTION RATES AND BILLING
- 1. The City and Contractor, as part of this Agreement, fix and determine uniform
rates that shall be charged by the-Contractor for the collection and removal of
refuse. The rates thus fixed and determined shall remain in effect for the period
prescribed or until changed pursuant to the provisions hereof. The Contractor
shall not charge or collect any fees or rates other than the fees or rates thus fixed
and determined.
2. The City Council shall,not more frequently than once per year, authorize a rate
- adjustment by application of the following formula and procedure to then current
rates:
1
The total rate paid by customers is comprised of two components:
A. Disposal Cost. The disposal cost component consists of tipping fees paid to
and established by operators of landfills. The Contractor has no control over the
tipping rates established by the County Sanitation District or private landfill
operators.
B. Collection Cost. The collection cost component consists of the Contractor's
costs for the collection and hauling of waste.
Collection Cott rate freeze. Contractor agrees that there will be no increase in the
collection cost component for residential customers effective prior to August 1,
1997. Except for the rate freeze on the collection cost component for residential
customers, the following rate adjustment formula shall apply:
Contractor shall be entitled to rate adjustments, effective on the anniversary date
of the franchise (August 1) based upon the following formula:
.70 x increase in Consumer Price Index,All items, 1982-84 = 100
(Los Angeles-Anaheim-Riverside) from the base month
(commencing June, 1991) to the following year's comparison
month (June, 1992, June 1993, etc.) plus .30 x the percentage
change in tipping fees to arrive at the percentage adjustment to be
applied to all rates herein authorized.
Allowable adjustments, based upon tipping fees, shall be based upon the rates as
established by the Los Angeles County Sanitation District.
Example:
FACTOR %CHANGE %OVERALL COSTS TOTALS
CPI 4.7% x.70 339
DISPOSAL 10.00% x.30 3.00
Adjustment percentage 6.29
City and Contractor agree that the disposal cost component has been increasing as
a percentage of the overall costs of waste removal. If the Contractor's disposal
costs continue to escalate as a portion of the overall cost, Contractor may apply to
the City Council to increase the percentage of rate adjustment, currently 30%,
assigned to disposal costs. Upon the commencement of commercial Material
.cie L.Et. _ CrriCE_ i_ _ _ _
Attachment A
City of Rosemead Rale Adjustment Request
1999-2000
Residential Rates:
Category Current New
Rate Rate
Single Family Dwelling- Residential Curbside (one 100 Gal Cart) $ 9.67 $ 9.85
Multiple Family Dwelling-Detached Units On A Single Lot: First Unit $ 9.67 $ 9.85
Each Additional Unit $ 7.81 $ 7.95
Multiple Family Units-Attached Units (Apartments and Condos)
And Mobilhome Parks: First Unit $ 9.67 $ 9.85
Each Additional Unit $ 6.35 $ 6.47
Special Qualified Senior Citizen Hardship Rate/For Residential
Curbside Service $ 6.43 $ 6.55
Special Qualified Handicapped Citizen /Backyard Collection Rates
For Single Family Residences: $ 9.67 $ 9.85
Additional 100 Gallon Cart $ 1.66 $ 1.69
Special One-Time Pick-Up Cost For Pick-Up And Disposal Of
Appliances, Furniture And Bulky Items $ 12.33 $ 12.57
Residential -Special One-Time Drop-Off And Collection of A
3-Cubic Yard Bin
Pick Up/Delivery Charge $ 45.93 $ 46.84
Each Dump $ 15.70 $ 15.98
Total $ 61.64 $ 62.82
Residential- Special One-Time Drop-Off And Collection of A 10 to
4D Cubic Yard 'Roll-Oft'Container $ 334.00 $ 340.39
Overweight 7 Ton Limit $ 37.26 $ 37.92
Daily Rental After Seven Days Without A Dump $ 15.00 $ 15.00
Dead Run • $ 75.00 $ 75.00
Commercial Rates
3 Cubic Yard Bins
CURRENT RATE NEW RATE
Without Without
Forklift Forklift Forklift Forklift
1 Day P/U 70.21 77.23 1 Day P/U 71.56 78.71
2 Day P/U 106.57 117.21 2 Day P/U 108.61 119.45
3 Day P/U 144.59 159.03 3 Day P/U 147.36 162.08
4 Day P/U 182.87 201.15 4 Day P/U 186.37 205.00
5 Day P/U 225.93 248.53 5 Day P/U 230.26 253.29
6 Day PIU 258.80 284.70 6 Day P/U 263.76 290.15
1 1/2 Cubic Yard Bins
CURRENT RATE NEW RATE
Without Without
Forklift Forklift Forklift Forklift
1 Day P/U 47.25 51.97 1 Day P/U 48.15 52.96
Category Current New
Rate Rate
Commercial- One-Time Drop-Off And Collection Of A 3-Cubic Yard Bin
Pick Up I Delivery Charge $ 57.90 $ 59.04
Each Dump $ 27.03 $ 27.51
Total $ 84.93 $ 86.55
Commercial- Special One-Time Drop-Off And Collection of A 10 to
40 Cubic Yard 'Roll-Offf Container $ 274.74 5 260.00
Overweight 7 Ton Limit $ 37.26 $ 37.92
Daily Rental After Seven Day Without A Dump $ 15.00 $ 15.00
Dead Run $ 75.00 $ 75.00
Commercial- Special One-Time Drop-Off And Collection Of A 30
Cubic Yard Compactor Container $ 363.93 $ 370.90
Overweight 9 Ton Limit $ 37.26 S 37.92
Daily Rental After Seven Days Without A Dump $ 15.00 $ 15.00
Dead Run $ 75.00 $ 75.00
Commercial- Spedal Barrel Service for Qualified Commercial,
Limited Use Customers. Max 2-35 gallon cans 1 time per week $ 47.80 $ 48.72
Jan Feb Mar Apr May Total
Total 2960.79 2806.23 3554.25 3730.09 3442.28 16493.64
Greenwaste 65 63.82 37.11 244.77 285.08 695.78
Puente Hills 1926 1902.02 2018.73 2278.32 1780.17 9905.24
Puente% of total 65.1% 67.8% 56.8% 61.1% 51.7% 60°/
Green % of total 2.2% 2.3% 1.0% 6.6% 8.3% 4%
Puente less green 62.9% 65.5% 55.8% 54.5% 43.4% 56%
Weighted Cost Adjustment
Value Increase Percentage
Consumer Price Index 0.7 X 2.0% = 1.4%
Disposal Tipping Fee 0.3 X 1.8% = 0.5%
1.9%
Tonnage Old New %change Weight Total Increase
Puente Landfill $ 17.86 $ 18.05 1.06% 56% 0.59%
South Gate Trans $ 29.21 $ 30.21 3.42% 40% 1.37%
Greenwaste $ 11.50 $ 11.00 -4.35% 4% -0.18%
1.78%
Jun-98 Jun-99 %change
CPI 162.2 165.4 2.0%