The URL can be used to link to this page

Home My WebLink AboutReso 73-16 Garbage RatesRESOLUTION NO. 73-16 A RESOLUTION APPROVING MORRO BAY GARBAGE SERVICE BASE -YEAR RATE ADJUSTMENT APPLICATION AND ADJUSTING SOLID WASTE COLLECTION RATES THE CITY COUNCIL City of Morro Bay, California WHEREAS, the City Council adopted Resolution 48-01 approving the Garbage, Recycling and Greenwaste Franchise Agreement with Morro Bay Garbage Service (MBGS) for collection services effective January 1, 2002, and setting the initial rates for collection for residential and commercial customers; and WHEREAS, pursuant to Article 8.4, the City will use the guidelines and approach outlined in the City of San Luis Obispo's "Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates," and WHEREAS, on August 29, 2016, MBGS District Manager, Patrick Fenton, submitted a base year rate adjustment application in conformance with the franchise agreement and rate setting manual requesting a 3.96% increase to solid waste collection rates effective January 1, 2017; and WHEREAS, notices regarding the requested rate increase and interim rate increases for January 1, 2018, and 2019, were sent on September 30, 2016, to all property owners and customers and a public hearing regarding that matter was held on November 15, 2016; and WHEREAS, sufficient protests were not received to prevent the rate increase; and HEREAS, a review of the Base Year Solid Waste Rate Adjustment Application has been completed in accordance with the adopted solid waste rate setting policies. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Morro Bay, Section 1. The City Council approves the Morro Bay Garbage Service's Base Year Rate Adjustment Application to increase the solid waste collection rates by 3.96% as outlined in Exhibit A, effective January 1, 2017. Section 2. The City Council approves the increase in solid waste collection rates effective January 1, 2018, and January 1, 2019 as follows: a. Increase, if any, in the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers U.S. City Average published by the U.S. Department of Labor, Bureau of Labor Statistics for the month of June, 2017, for January 1, 2018, and June 2018, for January 1, 2019; b. Increase of 0.67% effective January 1, 2018, and 0.66% effective January 1, 2019, for increases in landfill disposal cost; and c. Increase, if any, in the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers U.S. City Average published by the U.S. Department of Labor, Bureau of Labor Statistics for increases in AB939 fee cost. Resolution No. 73-16 Page 2 PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 15th day of November 2016 by the following vote: AYES: Irons, Headding, Johnson, Smukler NOES: None ABSENT: Makowetski ABSTAIN: None E L. IRONS, ATTEST: AANASWANSON, City Clerk Resolution No. 73-16 Exhibit A Page 1 of 8 Cite of Morro Bay Janeen Burlingame 595 Harbor Street Morro Bay, CA 9')442 August 29, 2Q1£i Enclosed, please find tlzc 2Q17 lr3ase Year Rate 1'�djustrzzez�t A17plicatian asking fora 3.9u°r'n incacase. vlanagement reviewed and accepts responsibility for the rate application. The application is based uPon management's judgement of the most likely set of conditions and course of action. All sinnificant relevant information is made available at any time and assumptions are reasonable and are accurate. 1'hc main dritis€r of the base year rats: adjustment is a ne4�� 2Ql � Automated Side Loader (C'�t'rj tn�ck. Mis represents 2.77% of the; overall requested rate as the truck is required for the replacement cif a 2004 Automated Side Loader. Per approved language in the franchise extensi on all trucks must be 12 years or never to operate in Morro Bay. Further, replacing an Gild diesel truck with CNG, reduces carbon emissions in the city, :'anyon I..andfill i11 nc�t pass tlzrou�h a tipping fcc increase for ZQ37. `l'hi4 for l[orro i3a rate payers. Patrick.. Fenton District l�'lanaeer Morro Bay Garbage Resolution No. 73-16 Exhibit A Page 2 of 8 Morro Bay Garbage Base Year Rate Adjustment Application Summary Requested Increase Base Year Rate Application Price Increase �� 3.96 1. Rate Increase Requested Rate Schedule Current Increased Adjustment New Cost Per Rate Schedule Rate Rate (a) Rate Gallon "Per Month Single Family Residential 2, One 32 gallon waste wheeler container $16.49 $0.65 $17.14 $0:54 3, One 64 gallon waste wheeler container $32.98 $1,31 $34.29 $0.54 4. One 96 gallon waste wheeler container $49.47 $1496 $51.43 $0,54 $1.31 Avg. Monthly Increase (a) Calculated rates are rounded up to the nearest$0,01. 5_ Multiunit Residential and Commercial Rate increases of 3.96°/o will be applied to all rates in each structure with each rate rounded to the nearest $0,01 . Price Increase Breakdown 0.85% Allowable Costs 0,34% Pass Through Casts 2.77% New 2016 Automated Side Loader Truck (CNG) 3.96% Base Year Rate Application Price Increase l Certification t i i'i'o the best of my knowledge, tie data and information in this application is complete, accurate, and consistent with the instr=ctions provided by the Rate Setting Manual_ f Name: Pat is nto Title. district Manager Signature: Date: 08/29/16 P . I of 6' Resolution No. 73-16 Exhibit A Page 3 of 8 Morro Bay Garbage Base Year Rate Adjustment Application Historical Current Projected Financial Information BaseYear 2014 1 2015 2016 2017 2018 (from Pg. 4) MINN Section I - Allowable Gusts 6, Direct Labor $648,002 $655;163 $689.384 $703,172 $717,235 7, Corporate Overhead $56,943 $57,935 $57,880 $58,516 $59;687 8. Office Salaries $126,999 $82,788 $86,655 $88,388 $90,155 9. Other General and Admin Costs $671,557 $640,421 $709,751 F $7611682 $776 916 10 Total Allowable Gusts $1,503,502 $1,436,307 $1,543,670 $1,611,758 $1,643,993 Section If - Allowable Operating profit 11. Operating Ratio WIN 103.7%a 95.2% 94.2°! 92,0%1 92.0% 12. Allowable Operating Profit ($53,924) $71,741 $94:950 $140,153 $142,956 Section III - Pass Through Costs 13. Tipping Fees $326,587 $358,$51 $363,911 $352;185 $359,229 14. Franchise Fees $227,474 $2395711 $248,815 $253,791 $258,867 15. AB939 Fees $23,323 $23,832 $24,888 $25,386 $254893 16. Lease Pmts to Affiliated Companies $13t908 $14,325 $14,877 $15,323 $15,630 17. Total Pass Through Costs $591,298 $636,719 $652,491 1 $646,685 $659,619 Section IV - revenue Requirement 18. Revenue Requirement 52,39$,596 $2,446,568 19. Total Revenue Offsets $21040,875 $2,144,7667 $2,291,110 $2,316,258 $2,341,737 (from Page 3) 1111 Section V - Net Shortfall (Surplus) � $82,338 20, Net Shortfall (Surplus) Section VI - Percentage Change in Rates 21 Total Residential and Commercial Revenue without Increase in Base Year (pg.3,lines 19+39) $2,311,330 224 Percent Change in Residential and Commercial Revenue Requirement 3,56% 23. Franchise Fee Adjustment Factor 90% _24. Percent Change in Existing_ Rates 3.96% P 2 of 6 . Resolution No. 73-16 Exhibit A Page 4 of 8 Morro Bay Garbage Base Year Rate Adjustment Application Revenue Offset Summary Section VII - Revenue Offsets Historical Current Projected Residential Revenue Base Year vithouP increase in Base Year) 2014 2016 2016- 2017 2018 25, Single Family Residential $1,017,030 $1,073,067 1,130,627.63 $1,143,065 $1,155,638 Multiunit Residential Dumpster 26, Number of Accounts (} 0' 01 0 0 27. Revenues $o so $0 $0 $0 28, Less Allowance for Uncollectible Resid Accounts $0 $0 $0 1 $4 1 $0 29, Total Residential Revenue $1,017,080 $1,073,067 $1,130,828 $1,143,{365 $1,1 5,638 Commercial Revenue (without increase in Base Year) Account Type; Commercial Can 30 Number of Accounts 30 30 0 0 0 31_ Revenues $46,862 $48,288 $0 $o $0 Commercial Wastewheeler 32. Number of Accounts 136 1361 1411 141 142 33. Revenues $85,469 $88,033 $91,27Q $91,270 $92;274 Commercial Container 34, Number of Accounts 362 364 389 389 388 35. Revenues $878,170 $936,837 $1,064,284 $ 1,076,995 $1,088,842 36. Less: Allowance for Uncollectible Commercial $0 $0 $0 $o $0 37. Total Commercial Revenue $1,010,501 $1,673,138 $1,155,554 $ 1,168,265 $1,181,116 38. Interest on Investments _ $11,068 ($4,296)1 $2,372 1 $2,372 1 $2,398 39. Other Income $2,225 $2,858 $2,557 $2,557 $2,585 40, Total Revenue Offsets $2,040,875 $2,144,767 $2,291,110 $2,316,258 $2,341 737 P .3of6 Resolution No. 73-16 Exhibit A Page 5 of 8 Cost oummary for Base Year Description of Cast Labor Payroll Taxes 41. Total Direct Labor 42. Corporate Overhead Less limitation {enter as negative Total Corporate Overhead Office Salary Payroll Taxes 43, Total Office Salaries iRanortizationtAliocation Bad Debt Bond Depreciation Drive Cam fees Dues and Subscriptions Gas and Oil Insurance Insurance - Allocated Exp. Laundry and Uniforms Legal and Accounting Miscellaneous and Other Office Operating Supplies Other Taxes Outside Services Permits and Licenses Postage Public Relations and Promotions Relocation Telephone Ti res Transportation -Related Parties Travel Truck Repairs Utilities 44. Total Other Gen/Admin Costs 4 5, Total Tipping Fees 46. Total Franchise Fee 47, Total AB 939, egulatory Fees 48, Total Lease Prnt to Affil Co.'s 49. Total Cost :. � - •s •ss • Section {till - Base Year Cost Allocation 2014 ! 2015 $601,431 $609,906 $46$72 $45,257 $r,48, 002 $655,.163 $98,475 $104,812 ($411532) {$461877 $56,943 $57,935 $123,977 $79',319 $3,022 $3,469 $126;999 $82;788 Base Year 2016 2017 $642,2?8 $655,124 $470106 .............................._ $48;048 $689,384 $703,172 $1b0,010 51Oi,11Q {$42,130j ($42,593) $57,8$0 $58,516 $82,031 $83,672 $4,623 $4,716 �. $86,665 $88,388 $0 $0 $0 $0 $476 $523 $221 $226 $150 $1,140 $2,140 $2,183 $148,882 $144,065 146,025 $174,176 $53273 $5162 $5,476 $5,585 $1,313 $900 $860 $877 $168,330 $121,046 $113,158 $115,421 $127,543 $153,444 $171,915 $175,353 $72,552 $55,700 $41,365 $425192 $3,478 $5,414 $4,207 $4,291 $14,294 $14,816 $14,475 $14,765 $31678 $2>678 $2,694 $2,748 $30,345- $32;338 $33,926 $34,605 $4,362 $3,555 $3,650 $3,723 $7,021 $5,691 $51876 $55994 $4,871 $3,548 $64,052 $77763 $9,665 $9,742 $10,803 $11,020 $2;444 $4,153 $4,932 $5,031 $845 $496 $178 $182 $0 $5,102 $3,370 $3,513 $5,333 $3,914 $4,764 $4,859 $13,166 $152761 $15,369 $15,676 $550 $825 $1,375 $15403 $295 $273 $3,023 $3:083 $43,222 $45,143 $50,687 $51,701 $3,469 $4,992 $5,210 1$5,314 $671,557 $640,421 $709,751 $761,682 $326,587 $358,851 $363,911 $352,185 $227,474 $239,711 $248,815 5253,791 $23,328 $23,832 $24,888 $25,386 $13,908 $141325 $14,877_ _ $15,323_ $2,094,799 $2,073,026 $21196,160 $2,258,443 Resolution No. 73-16 Exhibit A Page 6 of 8 Morro Bay Garbage Base Year Fate Adjustment Application Base Year Revenue offset summary Section IX - Revenue Offsets Description of Revenue Overall Franchise Refuse Collection Total Total City of ttlorra Bay CPI Growth state Parks Residential Revenue without increase in ,base Year) 50. Single Family Residential 11143,065 11143,065 1130,628 123437 Multiunit Residential bumpster 51. Number of Accounts - - - 52. Revenues 5 - $ $ $ $ 53. Less Allowance for Uncollectable - - - - 54, Total Residential Revenue $ 1,143,066 $ 11143„065 $ 11130,628 $ Commercial Revenue without increase in Base Year) Account Type: Commercial Can 55. Number of Accounts 0 0 0 Oi 0 56. Revenues $0 s0 $o $0 _ $0 Commercial Wastewheeler 57. Number of Accounts 141 141 141 0 0 58 Revenues $91,270 $91,270 $91,270 $0 $0 Commercial Container 59. Number of Accounts 389 388 388 0 1 60. Revenues $ 1,076,995 $ 1,011,841 $ 999,130 $ 121711 $ 65,154 61. Less: Allowance for Uncollectible Commercial Accounts F F F PFF 14 $0 $0 $0 $0 $0 62. Total Commercial Revenue $1,168,265 S9,iD3,111 $1,060,400 $12,711 $65,154 63. Interest on investments $2,372 $2,372 $25372 $0 $0 64. Omer Income $2, i57 $2,557 $2,557 $0 $0 65. Total Revenue Offsets $2,316,258 $2,251,104 $2,225, 356 $25,1�18 $65,154 P,5of6 Resolution No. 73-16 Exhibit A Page 7 of 8 Morro Bay Garbage Base Year Rate Adjustment Application operating information Historical Current Projected Percent Percent Percent Base Year Percent 2014 Change 2015 Change 2016 Change 2017 Change 2018 Section X - Operating Data 66, Municiple Solid Waste - Morro Residential Accounts Commercial Accounts Bay 4,583 526 0.3% 0.6% 41597 529 0.5% 01% 41618 530 0.6% 0.0% 4,646 530 0.6% 0:0% 4,674 530 67. 68, 69. Routes Tons Collected direct Labor Hours 3 7;231 L 6,240 0.0% 6.9% 0.0% 3 7;730 6,240 O.O%a 2.6%0 1 0.0%1 3 7,928 61240 0.0% -2.6% 0.0% 3 7,722 6,240 G,O% 1.0°la 0.0°f° 3 71799 61240 70, 71, 72. Commingled Recyctables - Accounts Routes Tons Collected Direct Labor }lours Morro Bay 5;109 2 1,522 4,160 0.3%o 0.0% -3;3% 0.0% 5J26 2 1,472 41160 0.4%0 0.0% 3.1% 0.0% 5,148 2 1,517 4;160 0.5% U%° 1.0% 040% 5,176 2 1,532 4,160 0.5%° 050%° 1.0%a 0.0% 5,204 2 1,547 4,160 73, 74. 75, Green Waste and Organics Accounts Routes Tans Collected Direct Labor Hours - Morro Bay 5109 1 11747 21080 O.3% 0.0% -1 &2%° U%l 5,126 1 11430 21080 0.4%p 0.0% 24.1 % O.0%° 5,148 1 11775 23080 0.6% OP0% 17.1 O. % % 55176 1 21079 2,080 0.5% 0.0%n 2.0%0 0.0% 51204 1 2,120 2,080 P91 6 of 6' Resolution No, 73-16 Exhibit A Page 8 of 8 Morro Bay Garbage ase Year Rate Adjustment Application v1vpvse l %Jgtw day Single Family Residential One 32 gallon waste wheeler container One 64 gallon waste wheeler container One 96 gallon waste wheeler container Atas�adero Single Family Residential One 32 gallon waste wheeler container One 64 gallon waste wheeler container One 96 gallon waste wheeler container 'Garbria Single Family Residential One 32 gallon waste wheeler container One 64 gallon waste wheeler container One 96 gallon waste wheeler container ',LC3S {)sUS Singie Family Residential One 32 gallon waste wheeler container One 64 gallon waste wheeler container One 96 gallon waste wheeler container Paso Rubles ;Single Farr�ly Residentiaf One 02 gallon waste wheeler container One 64gallonwaste wheeler container One 96 gallon waste wheeler container San Lids Obispo Single Family }?esider7tial One 32 gallon waste wheeler container One 64 gallon waste wheeler container One 96 gallon waste wheeler container Monthly Rate Survey Current Rate $16.49 $32:98 $49.47 Current Rate $20.63 $36.15 $46470 Current Rate $19.83 $39;66 $59.49 Current $19.23 $29.51 $38.89 Current Rate $28.79 $37.71 $41.60 Current Rate $14.12 $28.25 $42.37 Increased Rate $0.65 $1.31 $1496 Increased Rate $M0 $aoo $0.00 Increased Rate $0.00 $0.00 $0.00 Increased Rate Increased Rate $0.00 $0.00 $0.00 Increased Rate $0.00 $0.00 Adjustment Adjustment. (a) Adjustment (a} AdJustrnent (a) Adjustment (a} Adjustment New Rafe $1T14 $34;29 $$1:43 New Rate $20.63 $36.15 New Rate $19.23 $29.51 New Rate $28.79 $37.71 $41.60 New $14.12 $28.25 $42.37 l oll