HomeMy WebLinkAboutItem 2a - Setting Service Rates for Collection of Residential Refuse and Recyclables
DATE: May 15, 2018
TO: Honorable Mayor and City Council
FROM: Tom Tait, Public Works Services Director
By: Vanessa Hevener, Environmental Services Officer
SUBJECT: RESOLUTION NO. 7213 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. W aste Management has submitted a request
to adjust the single family and multi-family refuse rates by 2.25% for Fiscal Year 2018-
2019. 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 Re solution No. 7213, which
will set service rates for the collection of residential refuse and recyclables.
BACKGROUND
In June 2016, the City Council approved a contract amendment with WM for a five-year
rate adjustment schedule in accordance with Proposition 218 requirements. This is the
third year of the approved rate adjustment schedule for single-family and multi-family
rates. 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. 7213 is attached for adoption and includes, as part of the
Resolution, the proposed rate schedules.
Resolution No. 7213 setting Residential Refuse and
Recyclable Service Rates
May 15, 2018
Page 2 of 4
DISCUSSION
On February 28, 2018, W M submitted a request for a service rate adjustment. The CPI
change was measured from the annual average for calendar year 2016 and 2017
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 used for the final component of
the adjustment formula.
Table 1 shows the percentage breakdown and weighted amount that is accounted for in
each index that makes up the rate adjustment:
Table 1: Rate Adjustment Formula
Rate Component %
CPI
% of
Tonnage
Adjustment due
to change in
indices/change
in disposal fees
Relative
Weight
of Rate
Weighted Rate
Adjustment
Percentage
Service – CPI 75% 2.79% 65% 1.36%
Fuel - Alternative 5.92% 5% 0.30%
Disposal/
Green
Waste
Facility
Municipal
Solid Waste 56% 1.96%
30%
0.33%
Greenwaste 44% 2.00% 0.26%
Total 100% 2.25%
For the past two years, 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 accep t 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.
Resolution No. 7213 setting Residential Refuse and
Recyclable Service Rates
May 15, 2018
Page 3 of 4
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 cost 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. WM has also been a community
partner by providing services above and beyond the contract terms including providing
trash/recycling services during special community events (.e.g., Taste of Arcadia,
Downtown Business Association Patriotic Festival, Arcadia Firefighters Association
Pancake Breakfast, etc.). In accordance with the Residential Refuse and Recycling
Agreement, Waste Management is entitled to an annual rate adjustment subject to rate
adjustment criteria in the Agreement. Based on the contractor’s service record and their
commitment to providing excellent refuse and recycling services, staff concurs with
WM’s request for a 2.25% rate adjustment for single and multi-family refuse collection
services, effective July 1, 2018.
Additionally, a refuse rate survey conducted in April 2018 shows that the City of
Arcadia’s refuse rates are among the lowest one-third of cities surveyed in the San
Gabriel Valley, even with the proposed rate increase and the HLB quarantine fee. Many
of the cities listed have not increased their refuse rates for FY 2018-19.
Residential Refuse Rate Survey
Resolution No. 7213 setting Residential Refuse and
Recyclable Service Rates
May 15, 2018
Page 4 of 4
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the
environment. Thus, this matter is exempt under CEQA.
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 2.25% increase in fees in the
coming year. For the average residential customer, this increase will be approximately
$0.50 per month.
RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 7213 setting service rates
for the collection of residential refuse and recyclables pursuant to Section 5120.7 of the
Arcadia Municipal Code.
Attachment: Resolution No. 7213