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7.A. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> January 9, 2012 <br /> SUBJECT <br /> Solid Waste Collection Rate Increase <br /> RECOMMENDATION <br /> Approve, by resolution, a 7.81 % increase in the rates for solid waste and recycling <br /> collection effective January 10, 2012 <br /> BACKGROUND <br /> The South Bayside Waste Management Authority (SBWMA or RethinkWaste) and its <br /> Member Agencies are closing the first year of the new collection services provided by <br /> Recology San Mateo County. The transition to these new services in 2011 has been <br /> significant in not just the expanded scope of services but also on diversion as residential <br /> recycling has increased 30%, organic materials collection has increased 30% and solid <br /> waste generation is down 19%. In addition to the roll-out of new services with <br /> Recology, 2011 has marked the grand opening of the Shoreway Environmental Center <br /> in San Carlos. The new collection services now include more convenient weekly <br /> collection of single stream recycling, organic materials (yard trimmings and food scraps) <br /> and solid waste. <br /> Compensation Methodology <br /> Notably, the 2012 rate year also signifies a substantial change in the contractor <br /> compensation approach with the final transition from the cost-plus methodology of the <br /> prior collection services franchise agreement with Allied Waste/Republic Services to a <br /> fixed cost (i.e., base cost plus index adjustments) methodology included in the <br /> Franchise Agreement with Recology San Mateo County. <br /> As described in the SBWMA Final Report on Review Of 2012 Recoloqv San Mateo <br /> Countv Compensation Application approved by the SBWMA Board on September 22, <br /> 2011, Recology's compensation adjustment for 2012 followed the new adjustment <br /> process (a copy of this report can be found on the SBWMA website at <br /> www.rethinkwaste.orq). To arrive at the 2012 collection contractor compensation, four <br /> cost factors were into consideration: (1) inflation; (2) wage rates and benefits for <br /> employees covered by collective bargaining agreements; (3) capital equipment costs; <br /> and (4) customer account and service levels. Note: depreciation expense is fixed after <br /> the first year, and Collective Bargaining Agreement (CBA) cost categories are adjusted <br />