HomeMy WebLinkAboutItem 3a - Setting Service Rates for Collection of Residential Refuse and Recycleables
DATE: May 16, 2017
TO: Honorable Mayor and City Council
FROM: Tom Tait, Public Works Services Director
By: Vanessa Hevener, Environmental Services Officer
SUBJECT: RESOLUTION NO. 7165 SETTING SERVICE RATES FOR THE
COLLECTION OF RESIDENTIAL REFUSE AND RECYCLABLES
PURSUANT TO SECTION 5120.7 OF THE ARCADIA MUNICIPAL CODE
Recommendation: Adopt
SUMMARY
In accordance with the Residential Refuse and Recycling Agreement, Waste
Management Inc. (“WM”) is entitled to receive annual rate adjustments that are subject
to staff review and City Council approval. Waste Management has submitted a request
to adjust the single family and multi-family refuse rates by 1.55% for Fiscal Year 2017-
2018. Even with the proposed rate adjustment, the City’s residential refuse rates will
remain among the lowest 1/3 in the San Gabriel Valley compared to cities with similar
services. It is recommended that the City Council approve Resolution No. 7165, which
will set service rates for the collection of residential refuse and recyclables.
BACKGROUND
In June 2016, the City Council approved a five-year rate adjustment schedule in
accordance with Proposition 218 requirements. This is the second year of the approved
five (5) year rate adjustment schedule for single-family and multi-family rates based on
the rate adjustment formula. In October 2013, the City amended its existing contract
with WM which extended the term for an additional five years through June 2021. The
original contract was set to expire in June of 2017. The amended contract requires that
WM receive City Council approval for annual rate adjustments subject to a standardized
formula. The rate adjustment formula consists of three weighted indices: Consumer
Price Index (CPI) (65% of the total); Disposal/Green Waste Facility Index (30%); and
Producer Price Index (PPI) for fuel (5%). Resolution No. 7165 is attached for adoption
and includes, as part of the Resolution, the proposed rate schedules.
Setting Residential Refuse and Recyclable Service Rates
May 16, 2017
Page 2 of 3
DISCUSSION
On March 31, 2017, WM submitted a request for a service rate adjustment. The CPI
change was measured from the annual average for calendar year 2015 and 2016
specific to the Los Angeles-Riverside-Orange County statistical area. The
Disposal/Green Waste Facility index is based on WM’s actual collection costs for trash
and green waste and the ratio of trash and green waste generated by single-family and
multi-family properties in the City. The Producer Price Index (“PPI”)for fuel, as
published by the United States Department of Energy, is calculated based
proportionally on the fuel used by the vehicles in service.
Table 1 shows the percentage breakdown and weighted amount that is accounted for in
each index that makes up the total CPI adjustment:
Table 1: Rate Adjustment Formula
Adjustment due
Relative Weighted Rate
% % of % of to change in
Rate Component Weight Adjustment
CPI Fleet Tonnage indices/change
of Rate Percentage
in disposal fees
Service – CPI 75% 1.41 % 65% 0.92%
Fuel Alternative 100% 2.74% 5% 0.14%
Municipal
Disposal/
55% 2.03% 0.33%
Solid Waste
Green
30%
Waste
Greenwaste 45% 1.21% 0.16%
Facility
Total 1.55%
100%
Last year, a $0.94 pass thru fee for all residential green waste was imposed to address
WM’s increased operational and hauling costs due to the Huanglongbing (“HLB”) pest.
The fee will remain in effect, as the California Department of Food & Agriculture has not
lifted the HLB quarantine area which includes the City of Arcadia. The Huanglongbing
pest, also known as citrus greening disease, destroys fruit production, producing bitter,
inedible fruit, and is ultimately fatal to citrus trees (there is no cure). The State requires
that green waste generated inside of a quarantine area be separated from all other
green waste and taken to either a landfill or composting facility which has been certified
by the State to accept the quarantined green waste. In the event that the quarantine
area is lifted, the pass thru fee will be removed from the customer’s bill.
Setting Residential Refuse and Recyclable Service Rates
May 16, 2017
Page 3 of 3
Staff worked with WM representatives and thoroughly reviewed and verified all rate
adjustment data. WM has successfully demonstrated their commitment to working with
the City, as well as their ability to provide the most efficient and effective refuse and
recycling services to Arcadia residents. In addition, WM has shouldered the costs of
programs previously paid for by the City, including the Sharps Waste program;
hazardous waste materials collection generated by both residents and the City;
enhanced commercial/multi-family recycling outreach/education; and pre-defined rates
for emergency collection and disposal services. Based on the contractor’s service
record and continuing satisfactory performance, staff concurs with WM’s request for a
1.55% rate adjustment for single and multi-family refuse collection services, effective
July 1, 2017.
Additionally, the attached refuse rate survey conducted in early March 2017 indicates
that the City of Arcadia’s refuse rates are among the lowest in the San Gabriel Valley,
even with the proposed rate increase and the HLB quarantine fee.
ENVIRONMENTAL ANALYSIS
Refuse rates are exempt from the requirements of the California Environmental Quality
Act as specified in Title 14, Section 15273 of the California Administrative Code.
FISCAL IMPACT
Residential refuse and recycling collection service rates is a fee-for-service that is paid
directly to the contractor by the residential customer. The proposed rates will not impact
the City’s budget; however, customers will experience a 1.55% increase in fees in the
coming year.
RECOMMENDATION
It is recommended that the City Council find that Resolution No. 7165 is exempt from
the requirements of the California Environmental Quality Act; and adopt Resolution No.
7165 setting service rates for the collection of residential refuse and recyclables
pursuant to Section 5120.7 of the Arcadia Municipal Code.
Attachments: Resolution No. 7165
Residential Refuse Rate Survey
Single Family Residential
Refuse Rates Survey
March 2017
(Current)
City Total Monthly Rate
South Pasadena $43.04
Pasadena $40.99
San Gabriel $34.37
Temple City $33.51
Sierra Madre $32.10
Covina $29.89
West Covina $29.72
Monrovia $28.79
Diamond Bar $27.10
San Dimas $27.48
Monterey Park $27.40
Azusa $25.44
Arcadia (proposed rate) $24.25
Arcadia (current rate) $23.17
Baldwin Park $22.40
Alhambra $21.99
Duarte $21.16
La Verne $21.10