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Sept 2019 Solid Waste Rates 9.11 ;' \ � • 1, y�� a ! ��, - :t ��' � 1 o asRate Proposal September 2019 October 2019 LCU Board Agenda • Utility rate setting process review • Revenue requirement • Cost of service • Proposed rates • Benchmarking 2 Utility Rate SeProcess Revenue Cost of Requirement Service Rate Design Allocation How much Which portions How customers revenue do the should each are billed for their rates need to customer pay, costs of service? generate? and why? 3 ;' \ � • 1, y�� a ! ��, - :t ��' � Revenue Requ *ire' - 01 t Revenue Requirement Approach • Test Year used FY 2018 Actual results as starting point • Made known and measurable adjustments • Update salary and salary-related costs to FY 2020 Budget • Annualized routine replacement of all vehicles and equipment • Estimated debt service (new issue for recycling containers) • Estimated annual post-closure care ($500,000) • Projected fee for disposal at Amador Ave. Transfer Station ($44. 10 per ton) • Other miscellaneous operating costs • Test Year does not include recycling contract cost or revenues s SummaryRevenue Requirement in FY 2018 FY 2019 Actual Projection Test Year (TY) Operating & Maintenance Expenses $ 13,233,190 $ 15,966,242 $ 12,032,232 Levelized Equipment Replacement 1 ,200,000 713,375 1 ,185,627 Levelized Building Improvements 10,231 250,202 130,000 Annualized Debt Service on Recycling Containers - - 375,697 TY Operating Reserve Fund Contributions - - 130,974 Uncollectible expense 62,963 132,749 62,345 Total Revenue Requirement $ 14,506,383 $ 17,062,568 $ 13,916,875 (Less) Other Non-Rate Revenue (484,475) (564,425) (547,967) Net Revenue Requirement $ 14,021 ,908 $ 16,498,143 $ 13,368,908 Rate Revenue at Current Rates $ 13,937,461 $ 14,970,578 $ 12,028,654 Additional Funding Needed $ 84,447 $ 1,527,565 $ 1,340,254 6 OperatingCosts (withoutdepreciation r debt servic e) $18.0 $15.3 $16.0 $14.5 $14.4 $14.0 $12.7 $12.0 o $10.0 $8.0 $6.0 $4.0 $z.0 — S- FY 2016 Actual FY 2017 Actual FY 2018 Actual Test Year Personnel Repairs and Maintenance Other Operating Expense Shared Service Expense Transfer - Contingency Fund Transfer - Landfill Post-Closure Transfer - Equip Replacement Total Test Year does include the cost of the recycling contract in the graph for comparison purposes 7 Equipment Purchases FY 2016 FY 2017 FY 2018 Test Year Contributions $ 1 ,650,000 $ 1 ,650,000 $ 1 ,200,000 $ 1 , 185,627 Sale of Property 215,600 308,800 35,000 124,866 $ 1 ,865,600 $ 1 ,958,800 $ 1 ,235,000 $ 1 ,310,493 Purchases (797,852) ( 1 ,451 ,832) ( 1 ,774,787) ( 1 ,310,493) Net for Year $ 1 ,067,748 $ 506,968 $ (539,787) $ - 8 Revenue Requirement by Service mo� Net Revenue Requirement Summary by Service Category a) Residential Recycling only Administration $ 1 ,945,068 includes the debt service on Container Collection 2,340,711 recycling containers (all Residential Recycling (containers) a 375,697 other recycling costs have been removed from the Brush Collection 176,186 revenue requirement) Bulky Collection 741 ,426 b) Community Benefit includes Landfill Post-Closure 500,000 the cost of collecting and Commercial Dumpster Collection 1 ,772,426 disposing of dumped Commercial Roll-Off Collection 1 ,000,267 materials (public nuisance) Refuse Disposal 3,310,940 Composting 504,827 Clean Fill 353,910 Residential Container Maintenance 126,673 Commercial Container Maintenance 186,413 Community Benefit b 34,365 Total $ 13,368,908 9 ;' \ � • 1, y�� a ! ��, - :t ��' � •� ..fie Costof S ontain r eCostof S Allocation Billing Basis Test Year Units Basis COS Units Direct Cost Components # of Res and Comm Container Collection $ 2,340,711 35,866 Carts $ 5.44 per month Residential Recycling (containers) 375,697 33,174 # of Res Customers 0.94 per month Brush Collection 176,186 33,174 # of Res Customers 0.44 per month Bulky Collection 741 ,426 33,174 # of Res Customers 1 .86 per month Composting Green Waste Tons 197,818 33,174 # of Res Customers 0.50 per month Residential Container # of Res and Comm Maintenance 126,673 35,866 Carts 0.29 per month $ 3,958,511 # of Res and Comm Administration Direct RR $ 1 ,015,971 33,611 Cust $ 2.52 per month # of Res and Comm Community Benefit Direct RR 17,950 33,611 Cust 0.04 per month Annual capacity in per gal capacity Landfill Post-Closure Refuse Tons 183,522 172,821,376 gallons 0.0011 per week Annual capacity in per gal capacity Refuse Disposal Refuse Tons 1 ,215,264 172,821,376 gallons 0.0070 per week $ 2,432,707 Direct and Indirect Costs $ 6,391,218 11 ContainerCost ofService ( cont . ) Monthly Cost of Service Residential Residential Residential Extra Commercial Commercial 96-Gal 64-Gal 96-Gal 96-Gal 2x 96-Gal Container Container Container Container Containers Direct Cost Components Container Collection $ 5.44 $ 5.44 $ 5.44 $ 5.44 $ 10.88 Residential Recycling (containers) 0.94 0.94 - - - Brush Collection 0.44 0.44 - - - Bulky Collection 1 .86 1 .86 - - - Composting 0.50 0.50 - - - Residential Container Maintenance 0.29 0.29 0.29 0.29 0.59 Indirect Cost Components Administration $ 2.52 $ 2.52 $ - $ 2.52 $ 2.52 Community Benefit 0.04 0.04 - 0.04 0.04 Landfill Post-Closure 0.44 0.29 0.44 0.44 0.88 Refuse Disposal 2.93 1 .95 2.93 2.93 5.85 Total $ 15.41 $ 14.29 $ 9.10 $ 11.66 $ 20.76 12 Dumpster CostofService Allocation Billing Basis Test Year Units Basis COS Units Direct Cost Components Commercial Dumpster Annual Collection $ 1 ,772,426 47,388 collections $ 37.40 per pickup Commercial Container Annual Maintenance 186,413 47,388 collections 3.93 per pickup $1 ,958,840 Indirect Cost Components Annual Administration Direct RR $ 502,746 47,388 collections $ 10.61 per pickup Annual Community Benefit Direct RR 8,882 47,388 collections 0.19 per pickup Annual per CY Landfill Post-Closure Refuse Tons 240,716 270,906 capacity (CY) 0.89 capacity Annual per CY Refuse Disposal Refuse Tons 1 ,593,995 270,906 capacity (CY) 5.88 capacity $2,346,339 Direct and Indirect Costs $ 4,305,178 13 Dumpster ervice Per Collection 2 CY 4 CY 1 .5 CY 2 CY 3 CY 4 CY 6 CY 8 CY CompactCompact Direct Cost Components in a Dumpster Collection $ 37.40 $ 37.40 $ 37.40 $ 37.40 $ 37.40 $ 37.40 $ 37.40 $ 37.40 Container Maintenance 3.93 3.93 3.93 3.93 3.93 3.93 3.93 3.93 MR Indirect Cost Components Administration $ 10.61 $ 10.61 $ 10.61 $ 10.61 $ 10.61 $ 10.61 $ 10.61 $ 10.61 Community Benefit 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 Landfill Post-Closure 1 .33 1 .78 2.67 3.55 5.33 7.11 5.33 10.66 Refuse Disposal 8.83 11 .77 17.65 23.54 35.30 47.07 35.30 70.61 Total $ 62.29 $ 65.68 $ 72.45 $ 79.22 $ 92.77 $ 106.31 $ 92.77 $ 133.40 14 Roll -Off CostofService Allocation Basis Test Year Billing Units Basis COS Units Direct Cost Components _ , _ Commercial Roll-Off Annual Collection $ 1 ,000,267 3,835 collections $ 260.83 per pickup r 01"irect Cost Components Annual Administration Direct RR $ 256,723 3,835 collections $ 66.94 per pickup Annual Community Benefit Direct RR 4,536 3,835 collections 1 .18 per pickup Annual Landfill Post-Closure Refuse Tons 75,761 3,835 collections 19.76 per pickup per ton (pass- Refuse Disposal Refuse Tons 501 ,682 11,376 Annual Tons 44.10 through) $ 838,702 Direct and Indirect Costs 9MM 15 Roll -Off Cost ofService ( cont . ) Per Collection Direct Cost Components Commercial Roll-Off Collection $ 260.83 Indirect Cost Components Administration $ 66.94 Community Benefit 1 .18 Landfill Post-Closure 19.76 Total $ 348.71 Disposal is a pass-through cost based on the actual weight of the load 16 Clean FillCost of Servi ce Allocation Billing Basis Test Year Units Basis COS Units Direct Cost Components M Clean Fill $ 353,910 47,000 Annual Tons $ 7.53 per ton Indirect Cost Components Administration Direct RR $ 90,833 47,000 Annual Tons $ 1 .93 per ton Community Benefit Direct RR 1 ,605 47,000 Annual Tons 0.03 per ton $ 92,438 Direct and Indirect Costs $ 446,348 17 Clean FillCost ofService ( cont . ) Per Ton pirect Cost Components Clean Fill $ 7.53 IMW Indirect Cost Components Administration $ 1 .93 Community Benefit 0.03 18 tinCostof ompos g Drop-OffOnly) ( Commercial Allocation Basis Test Year Billing Units Basis COS Units Direct Cost Components Green Annual Composting Waste Tons $ 307,008 1 ,971 Tons $ 155.76 per ton Indirect Cost Components Annual Administration Direct RR $ 78,795 1 ,971 Tons $ 39.98 per ton Annual Community Benefit Direct RR 1 ,392 1 ,971 Tons 0.71 per ton $ 80,187 Direct and Indirect Costs $ 387,195 19 tinCostof ompos g Drop-OffOnly) ( Commercial Per Ton Direct Cost Components Composting $ 155.76 Indirect Cost Components Administration $ 39.98 Community Benefit 0.71 Total $ 196.45 20 ;' \ � • 1, y�� a ! ��, - :t ��' � Proposed Rate Proposals - Full Cost Increase from Current Proposed Current Rates Rates $ Residential Standard Service 96 gallon container $ 13.25 $ 15.25 $ 2.00 15.1 Additional 96-gallon container 9.00 9.00 - 0.0% Compact Saver Service 64-gallon container 11 .25 13.25 2.00 17.8% Extra Poly Cart Service Pickup Charge 13.25 15.25 2.00 15.1 Commercial - MIN One 96-gallon poly container $ 27.80 $ 28.00 $ 0.20 0.7% Two 96-gallon poly container 55.60 56.00 0.40 0.7% 1 .5 cubic yard container 64.00 70.00 6.00 9.4% 2.0 cubic yard container 75.00 82.00 7.00 9.3% 3.0 cubic yard container 85.00 93.00 8.00 9.4% 4.0 cubic yard container 95.00 104.00 9.00 9.5% 6.0 cubic yard container 113.00 124.00 11 .00 9.7% 8.0 cubic yard container 126.00 138.00 12.00 9.5% 2.0 cubic yard compactor 75.00 90.00 15.00 20.0% 4.0 cubic yard compactor 116.00 130.00 14.00 12.1 Commercial Roll-Off Roll-Off Pull Fee $ 162.80 $ 170.00 $ 7.20 4.4% 22 Rate Proposals - ' ull Cost ( cont . Increase from Current Current Proposed Rates Rates $ % Other Quarter Grappler Truck load $ 108.25 $ 108.25 $ - 0.0% Half Grappler Truck load 217.07 217.07 - 0.0% Full Grappler Truck load 434.14 434.14 - 0.0% Extra Dumpster Service Charge 50% of the monthly rate for a single weekly pick up Roll-Off Relocation Fee 30.00 30.00 - 0.0% Commercial Green Waste Drop-Off 22.70 25.00 2.30 10.1% Clean Fill Drop-Off/Roll-Off 3.96 4.36 0.40 10.1% 23 Rate Proposals - Alternate Full Cost (with -assthrow h disposal )p g Base Disposal Total Residential Per Month Standard Service 96-gallon container $ 12.32 $ 2.93 $ 15.25 Additional 96-gallon container 6.07 2.93 9.00 Compact Saver Service 64-gallon container 11 .30 1 .95 13.25 Extra Poly Cart Service Pickup Charge 12.32 2.93 15.25 Commercial Per Month One 96-gallon poly container $ 25.07 $ 2.93 $ 28.00 Two 96-gallon poly container 50.14 5.86 56.00 Per Collection 1 .5 cubic yard container $ 61 .17 $ 8.83 $ 70.00 2.0 cubic yard container 70.23 11 .77 82.00 3.0 cubic yard container 75.35 17.65 93.00 4.0 cubic yard container 80.46 23.54 104.00 6.0 cubic yard container 88.70 35.30 124.00 8.0 cubic yard container 90.93 47.07 138.00 2.0 cubic yard compactor 54.70 35.30 90.00 4.0 cubic yard compactor 59.39 70.61 130.00 24 Rate Proposals - Phase In Opj *lor Increase from Increase from Current Current Current Year 1 Year 2 Rates Rates a $ % Rates $ % Residential Standard Service 96-gallon container $ 13.25 $ 14.25 $ 1 .00 7.5% $ 15.25 $ 2.00 15.1% Additional 96-gallon container 9.00 9.00 - 0.0% 9.00 - 0.0% Compact Saver Service 64-gallon container 11 .25 12.25 1 .00 8.9% 13.25 2.00 17.8% Extra Poly Cart Service Pickup Charge 13.25 14.25 1 .00 7.5% 15.25 2.00 15.1% Commercial 1 .5 cubic yard container 64.00 67.00 3.00 4.7% 70.00 6.00 9.4% 2.0 cubic yard container 75.00 78.50 3.50 4.7% 82.00 7.00 9.3% 3.0 cubic yard container 85.00 89.00 4.00 4.7% 93.00 8.00 9.4% 4.0 cubic yard container 95.00 99.50 4.50 4.7% 104.00 9.00 9.5% 6.0 cubic yard container 113.00 118.50 5.50 4.9% 124.00 11 .00 9.7% 8.0 cubic yard container 126.00 132.00 6.00 4.8% 138.00 12.00 9.5% 2.0 cubic yard compactor 75.00 82.50 7.50 10.0% 90.00 15.00 20.0% 4.0 cubic yard compactor 116.00 123.00 7.00 6.0% 130.00 14.00 12.1% a) The bold rates are ones that change between Year 1 and Year 2; all other rates are set at the ultimate rate proposed in Year 1 25 Phase- In Rate Impact ___,&est YeaA j Year IJAIR Year 2AA Operating & Maintenance Expenses $ 12,032,232 $ 12,032,232 $ 12,032,232 Levelized Equipment Replacement 1 ,185,627 1 ,185,627 1 ,185,627 Levelized Building Improvements 130,000 130,000 130,000 Annualized Debt Service on Containers 375,697 375,697 375,697 Additional funds needed for operating fund balance target 130,974 130,974 130,974 Total Revenue Requirement $ 13,854,530 $ 13,854,530 $ 13,854,530 Plus Uncollectible expense 62,345 62,345 62,345 (Less) Other Non-Rate Revenue (547,967) (547,967) (547,967) (Less) Solid Waste Rate Revenue (12,028,654) (12,722,331 ) (13,363,479) Additional Revenue Required for Expenditures $ 1 ,340,254 $ 646,577 $ 5,429 Debt Service $ 780,315 $ 780,315 $ 780,315 Coverage Test Net Revenues with Additions in Test Year and without in Years 1 and 2 $ 1 ,884,644 $ 1 ,238,067 $ 1 ,879,215 Net Revenues Required for Min Coverage (1 .6x min) 1 ,248,504 1 ,248,504 1 ,248,504 Additional Funds Needed for Coverage $ - $ 10,438 $ - Debt Service Coverage Ratio 2.4 1 .6 2.4 Funding Available for Equipment Replacement and Building Improvements $ $ 669,050 $ 1,310,198 Delayed Capital Spending f 646,577 5,429 26 ;' \ � • 1, y�� a ! ��, - :t ��' � Benchmark*ing Benchmarking Standard Residential Rate Comparison $30.00 $25.00 $20.00 $19.54 $17.00 -1 $13.25 $15.25 $15.25 $15.19 0 $15.00 $14.25 $10.00 $5.00 0��� �+ o1�0 \ a�0 28 Benchmarking Expected Residential Bill Impacts $18.00 $16.00 $15.25 $15.25 I $14.00 $13.25 $14.25 $13.25 $13.25 $11.25 $12.25 I $12.00 0 $10.00 m $8.00 C- 0 $6.00 $4.00 $2.00 Standard 96-Gallon Container Compact Saver Service 64-Gallon Container ■Current Proposed Year 1 ■Proposed Year 2 ■Full Cost 29