AgdaPkt 2000-02-28 - Laserfiche WebLink

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5 r)-¡ REPORT To the Honorable Mayor and City Council From the City Manage r February 28, 2000 Subject Solid Waste Collections Rate Increase Recommendation It is recommended that the City Council approve a $1.21 monthly increase for typical residential customers who have one 40-gallon container picked up once a week and continue a lifeline rate with no increase for a single residential 20-gallon container, and approve an amendment to our solid waste collection ordinance to provide for a statutory limit of three years for refunds on solid waste collection accounts. Background Each year the franchised solid waste collection agent, Browning Ferris Industries (BFI): submits a rate request application to the South Bayside Waste Management Authority (SBWMA) of which Redwood City is a member. The SBWMA is a joint powers authority consisting of 11 public agencies which comprise the contiguous BFI service area from Burlingame to East Palo Alto and which acts as a collective bargaining agent on behalf of member jurisdictions. The SBWMA engages a consultant, Hilton, Farnkopf, and Hobson, to review the rate application for compliance with the rate setting methodology contained in the franchise agreement. Hilton, Farnkopf and Hobson determined that a 22.5% rate increase was required for 1999 due to revenue shortfalls in 1997 and 1998. Rather than raise rates 22.5% in 1999, the Council elected to increase rates 16% in an effort to spread the required 22.5% increase over two years. The difference (6.5%) between the 1999 required rate increase of 22.5% and the actual rate increase of 16% is being included in the recommended rate increase for 2000. A copy of the staff report on which the Council relied for approving the 16% rate increase in February 1999 is attached for your review. Along with this 6.5% increase is an additional 2.4% which is needed to cover increased operating costs due to inflation, higher landfill disposal costs, and the implementation of several recycling programs needed to assist in meeting our state-mandated solid waste diversion goal of 50% by year 2000. The total recommended rate increase is 8.9%. Under the rate setting methodology contained in the City's franchise agreement with BFI, BFI earns about five cents profit for each one dollar of revenue they receive. n. ~--_._._._..lrn._.