HomeMy WebLinkAboutAgenda Report - November 25, 19873
, I ?Ty tDL'hCTI MEET?'dG
NOVEMBER 25, 1987
REFUSE RATE The Lodi City Council continued its review of the Solid
STUDY Waste Study and discussed policy issues and the various
elements that go into the development of a rate structure.
CC -22(b)
CC -54 No formal action was taken by the Council.
M E M O R A N D U M
TO: The Honorable Mayor and
Members of the City .-:;ticil
9,nM - City Manager
DATE: November 13, 1987
SUBJ: Policy Discussion on Solid haste Collection, Transport and Disposal
The topic for discussion at the Shirtsleeve Session to be held Tuesday, November
17, 1987, is the City of Lodi's refuse collection service. Mr. Dave Vaccarezza,
of Sanitary City Disposal Co., 1rc., the City's contract hauler, will be in
attendance to participate in the discussion, answer questions, and generally
assist the City Council by providing whatever information on his company's
operations the Council should desire.
Early last year the County of San Joaquin advised all haulers and agencies in
the County that it would be uniformly imposing a $2.00 per cubic yard gate fee
on all refuse brought to the Harney Lane Sanitary Landfill. The $2.00 charge
went into effect for the City of Lodi industrial customers in July, 1986. At
the request of the City Council in the spring of last year, the County agreed to
delay the imposition of the $2.00 gate fee for the commercial and residential
customers in the City of Lodi until January 1, 1987. Since then the gate fee
has been increased to $2.45 per cubic yard effective September 1, 1987. The
reason for the request was to allow the City time to conduct an in-depth
evaluation of the City's refuse service and rate structure. On the staff
recommendation, and with Mr. Vaccarezza in agreement, the City retained the firm
of Eljumaily-Butler Associates, of Santa Rosa, recognized experts in the field
of waste management, to perform this review and evaluation. The project leader
was Mr. Duane Butler, a senior partner, well respected in this specialized
field. The firm came highly recommended. This undertaking was a ponderous one,
and as a result, extremely frustrating to all those involved. The assignment
was not an easy one and the development of the necessary information was very
time consu.ing. The report was distributed to the City Council earlier this
year.
The Honorable Ptayor and
Members of the City Council
May 8, 1987
Page 2
The purpose of this Shirtsleeve Session is to provide the City Council with an
opportunity to discuss policy issues and of the various elements that go into
deveiopment of a rate structure. A number of policy items will have to be
addressed in the process. Among these are:
Do we bring the industrial community under the franchise?
(at the present time it is not)
There are advantages and disadvantages to this action. On the
plus side is the fact it gives the City Council greater
flexibility in setting the rate schedule throughout the
residential, commercial and industrial communities now and in the
years to come. It also provides uniformity of service and
prevents "rate wars" in that segment of our community. the down
side is that it eliminates the freedom of choice of hauler for the
industrial segment. But that freedom does not now exist in the
residential and commercial segments. The matter of reusable
materials and by-products will also have to be addressed.
What should be the term of the franchise? Five years? Ten?
Twenty? Should it be a rolling seven-year franchise with the
ability to extend year -by -year to a maximum of 15 years?
The advantages of a shorter franchise period is that it gives the
City Council the opportunity to review the refuse operation at
more frequent intervals and has a tendency to hold any hauler more
accountable for his operation. The disadvantage is that it does
not foster the kind of stability one would like to see in this
type of operation. Obviously, the reverse can be said of the
longer franchise period. The stability is there, but is it in
the best interest of the City and its citizens to enter into very
long-term commitments? Of course, contracts can always be
terminated for cause, but that is usually a laborious and complex
legal undertaking. The consultant's report recommends a rolling
seven-year Franchise.
Should the residential rates be partially underwritten by
commercial and/or industrial service?
If there is to be some support for the residential rate, what
should be the level of that support?
Should we continue with rear yard service (current service
levels) or should we consider the implementation of mandatory
curbside autom,ted or semi -automated service?
' h,e Hon—,ra bli e "ay or a!;U
:Members of the City Council
�'ay 8, 1.9,87
Page 3
1t is easy to look at "the going rate" in other communities in the area and
establish a rate structure based on that approach. In some cities its done
primarily in that fashion and that is not necessarily all bad. In fact, when
all is said and done, there must be some consideration for what will be
acceptable to the community, sophisticated formulae notwithstanding. However,
the various components of the rate structure will vary from one city to another
and a direct comparison can be misleading.
For the City Council's information, the following rate information is presented:
Residential Refuse (ore -can service)
I981 53.85
1982 4.05 + 5.2G
1983 4.45 + 9.9%
1984 4.87 + 9.4m
The current rate for residential refuse (one -can service) is that which was
established by the City Council in 1984. It should be noted that the rate for a
commerci3l one -yard bin was adjusted during the years noted above at
approximately the same percentages.
The purpose of Tuesday morning's session is not to get into the specifics of a
rate adjustment. That topic and the accompanying refuse collection ordinance
and franchise agreement will be brought to the City Council at a later date,
hopefully in the immediate future. Rather, as I mentioned earlier, the purpose
of this meeting is to continue our review of the overall operation and to devote
some time to the consideration of what are key policy issues.
TAP:br
T'XTA.07A C UNC279
REIs'IBURSEMENT OF DUMP FEES
FROM
CITY OF LODI
MONTH AMOUNT
JANUARY 1987
$26,854.00
FEBRUARY 1987
$25,110.00
MARCH 1987
$27,136.00
APRIL 1987
$29,474.00
MAY 1987
$28,168.00
JUNE 1967
$28,344.00
JULY 1987
$283-992.00
AUGUST 1987
$25,270.00
SEPTEMBER 1987
332,626.65
OCTOBER 1987
$34,175.05
TOTAL
$286,149.70
SUMMARY
The following is an evaluation ,of the several activities which,
together, comprise the solid waste collection and transporr,tion
network for the City of Lodi. The evaluation took the form of an
operational survey of residential, commercial and industrial waste
collection, review of the transfer operation, and of the wood fuel
composting and recycling operation. Rates for service based on
the Contractor's 1986-87 and 1987-88 budgets ha--- been calculated
based on the costs of operation, profit, disposal charge and
municipal franchise fee.
Rates for each type of service are examined and discussed. The
report also contains a draft Franchise Agreement and a draft
update of the City Code which have already been provided. The
Agreement suggests a franchise which can ':e extended year -by -year,
thereby resulting in a "rolling" mui ti -year agreement. The
franchise may be terminated for cause, or allowed to expire in a
set period.
A key element of the commendations for 1987-88 is the inclusion
of industrial refuse service in the franchise. Commercial
container rental is also included in the recommended 1987-88
rates. This would brig all- solid waste activities under
franchise. The Draft Agreement calls for all rates to be revieweo
on a periodic basis with intervening adjustments based on a cost
of living factor.
Residential rates have been prepared for a continuation of rear
yard service, and alternatively, for curbside wastewheelers.
Rates have also been computed for commercial container collection
service including container rental, and for collection of
industrial roll -off bins. The residential rate may include
support from other users.
It has not been recommended that the public support continuation
of either the cr-mposting project or the wood fuel reclamation
operation. The Czntractor has terminated both of these operations
and does not plan to undertake them unless economically and
practically feasible. The recycling center i:; proposed to stay in
operation.
All rates have been computed to indicate the amounts required to
cover actual costs, and the impact of 8% franchise fees (I5% as
current, less 7% paid to the County), various rates of profit, and
52.00 per cubic yard dump fee (replaces the 7% formerly remitted
to the County).
-2-
If per -can residential rates were adopted without support f rom
elsewhere in the system, the unsupported rates would be $9-07,
511.87 and $14.68 respectively for 1, 2 and 3 can service at a
contractor's pro -it margin of 10% before taxes.
A curbside wastewheeler service is also examined. Unsupported
rates of 514.00 per month are justified at 10%profit before
taxes. The report describes one sample of a supported rate, $9.50
per month, and the resultant commercial and industrial
contributions which would be necessary.
Commercial rates are recommended to about double including
provision for $2.00 per cubic yard dump fee at the landfill and
container rental. Rates vary based on the number of containers
and the frequency of collection.
It is likely that some policy decisions will be required to
establish allowable contractor's profit, type of residential
service to be rendered, and the amount and manner of provision of
any infusion of funds from other users to help support residential
rates. Sample calculations are provided which, together with the
information contained in the various tables, can be used to
determine alternative rates to the specific examples shown.
-3-
r
POLICY ITEMS
s� The following are policy items which reflect on the recommendations
:i contained in this report.
1.
Execution the draft Franchise Agreement, provided
separately, brings industrial --waste disposal under the rate
setting aegis of the City.
2.
The draft Franchise Agreement provides for a 7 -year rolling
franchise rather than for a. set number of years, with the
ability to extend, year -by -year, for a maximum of 15 years.
3.
Decide whether residential rates should be partially
underwritten by commercial and/or industrial service.
4.
If the decision is to provide support to the residential rates,
the level of support must be selected, and the degree of
support to be provided by other users must be determined.
5.
A determination should be made concerning the continuation of
rear yard service (current service levels) or whether
f
mandatory curbside automated service is to be selected.
I
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TABLE I
RECOMMENDED RESIDENTIAL RATES PER MONTH
Rear yard service
Recommended:
Individual can rates. No rate support.
I can S 9.07 per month
2 cans $11.87 per month
3 cans $14.68 per month
CTrbaid- wastpwheeler service
Recommended: Flat rate, 90 gallon wastewheeler, $9.50 per
month. Requires rate support.
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RECOMMENDATIONS
Subject to the policy decision's which effect the matters discussed
in this report, the following is recomur.ended:
1. Amendments to the municipal'. code be adopted enabling the
execution of a Franchise Agreement, and enabling the City
Council to adopt fees by resolution. A draft amendment has
been provided separately.
2. Execute a Franchise Agreement with Lodi Sanitary City
Disposal, Inc. to include residential, commercial and
industrial service. A draft agreement has been provided
separately.
3. Adopt per can rates at a selected level of contractor profit
before taxes. Rates may either be self—supporting or receive
support fr.)m elsewhere within the system. See Table 1.
4. As an alternative, move to a flat rate of $9.50 per month for
mandatory curbside wastewheeler service. Requires rate
support. See Table 1.
5. Adopt commercial rates such as shown on Table 2 with tha
appropriate support of the residential service. (Example is
10% Contractor's profit before taxes.)
6. Adopt industrial rates such as shown on Table 3 with the
appropriate support of the residential service. (Example is
103 Contractor's profit before taxes.)
-7-
Transfer & Recycling Center
November 16. 1987
Lodi City Council
Citv of Lodi
222 West Pine Street
Lodi. CA 95240
Re: Waste Cart Survev
Californira Waste Removal Systems
Dear Madame ,favor and Honorable Councilmemt:ers:
On October 15. 1987. a survey of 1.988 Lodi residents
currently using waste cart service ::as con.duc_ted by California
Waste Removal Systems. Waste cart service has been offered to
Lodi residential customers for over three vears. The results
were gathered and compiled through November 13. 1987. (See the
attached questionnaire.) Of those customers surveyed. 990 or
49.8% responded. The findings of this survey are presented for
your review and consideration. Of those who returned their
questionnaires. 367 had specific additional comments which have
been categorized as follows:
I. POSITIVE FEEDBACK
A. Large capacity - ideal for combining garbage. lawn and
garden rubbish.
B. Less noise - no clanging of conventional metal cans and
lids.
C. Animal proof - no knocked over cans and unsanitary
conditions.
D. Ease of handling - conveniently rolled about -
vounesters and seniors can handle.
E. Durabilitv - Well built waste carts versus low grade
conventional cans and plastic bass.
II. CUSTOMER CONCERNS
A. Benefits of Citv-wide implementation.
B. Cost of program.
C. Placement of containers.
Transfer & Recycling Center
Based on the results of the survey and the above comments.
the conclusions of those currently usine waste carts indicate a
strone Dreference to remain with their roll-out collection
system as well as an overwhelming recommendation for the City
Council to endorse city-wide implementation of such a Droeram.
From a collection comDanv oersnective. a uniform automated
collection system would reduce worker iniuries. provide fast and
efficient service. and replace the immediate need for new
eeu.iDment and labor costs. Start un costs for such a system
would be off -set by nominal future requirements for labor and
equipment.
CALIFORNIA WASTE REMOVAL SYSTEMS
1333E. Turner Road / Post Office Sox 319 / Lodi, CA 95241-0319 / (209} 369-8274 '
.... .. :.. •.a: ,..,c:. .-,.;, `-Lys
Transfer & Recycling Center
Dear Valued Customer:
California Waste Removal Systems has offered waste cart (waste
wheeler) service to the residents of Lodi for nearly three ,years
now. Since You are one of our customers who has used the waste
cart, we would like to ask you for your opinion about the waste
cart system. Please complete this form and send it back in the
enclosed stamped self-addressed envelope, no later than 0ctober
31, 1987. Your opinion is very important to us.
Ve would like you to tell us how you like using your waste cart
and how you compare this new service with Your old standard
backyard can service.
i . ) `Such No Not As '.Iuch
Better
Capacity 7577
F.ase to `love to the Curb 86ro
Spilled Trash 67'Z
Better
Difference
Good As
t•Jorse
18/
05
02%
00
10
020
01i
017.
19%
13%
01%
00%
Animals/Rodents getting 70% 13h 16% 00% 01
Into Contents
Odors 51% 22% 25% 02% 00%
Neighborhood Appearance 68% 20% 08% 03% 01%
on Collection Day
2.) Would you buy plastic bag liners for the waste cart, if
offered by our company, at a cost of 30 cents a piece? YES 257- NO 75%
3.) Would you advise the Lodi City Council to implement waste
cart collection throughout Lodi? YES 70% NO 30%
Thank you for participating in our pilot program. If you have
any additional comments, they would be appreciated.
TOTAL NUMBER OF SURVEYS SENT: 1,988
TOTAL NUMBER OF SURVEYS RETURNED: 990
1333E. Turner Road / Post Office Sox 319 / Lodi, CA 95241-0319 1 (209} 369-8274