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CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
SR 2017-074
June 6, 2017
Consent Agenda

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Sharon Friedrichsen, Director of Budget and Contracts

APPROVED BY: Chip Rerig, City Administrator

SUBJECT: Consideration of a resolution approving the rates charged by GreenWaste Recovery


for the collection of franchised solid waste, recycling and organics

RECOMMENDATION

Adopt a resolution approving the rates charged by the Citys franchised hauler, GreenWaste Recovery, for the
collection of solid waste, recycling and organics effective July 1, 2017.

BACKGROUND / SUMMARY

On June 17, 2014, Council approved a franchise agreement with GreenWaste Recovery (GWR) for the
collection of solid waste, recycling and organics, subsequent to a multi-year competitive request for proposals
process for collection services. The franchise agreement became effective on July 1, 2015 and includes a
prescribed formula to determine the amount the rates may be adjusted annually by the hauler. This formula
includes the cost of disposal (tipping fee) at the Monterey Regional Waste Management District (MRWMD)
facility in Marina as well as cost adjustments for GWR for labor, fuel and other operating costs. Based on this
formula, the rates are scheduled to increase by 5.3% for residential customers, 3.6% for commercial
customers and .09% per pull for construction and demolition (roll off).

Part of the rate increase is attributed to the MRWMD disposal fees. The MRWMD, of which the City is a
member, operates the landfill and the anaerobic food digester to help the City, and the region, meet State
diversion requirements. The MRWMD disposal fees have not been increased since January 1, 2014. The new
fees are required to fund operating expenses, capital projects and to meet assumptions associated with capital
project bonds. Capital projects, such as the expanded materials recovery facility that sorts collected materials,
are required to meet current State regulatory requirements to divert 65% of construction and demolition (C&D)
materials from the landfill as well as the long-term State objective to divert 75 % of all materials, including
organics, from the landfill by 2020. Per the agreement, the cost of disposal is an allowable pass through cost
that is factored into the rate adjustment. The disposal cost allocated to the residential rate is about 1.3% while
the commercial rate is around .09%. Cost for the disposal of C&D are increasing by 8.3%.

The remaining portion of the rate adjustment is based on the cost of processing by the hauler. Processing
costs are based on inflation for fuel, labor and other operating costs as well as the change in tonnage over the
prior year. Compared to last year, solid waste tonnage is up 14.5%, yard trimming increased 32.7%, food
waste tonnages rose 229.7% and C&D grew by 46. 9%. Conversely, recycling tonnage is down by 2.7%, and,
unlike the other categories, increased recycling tonnage helps to mitigate a rate increase. The amount of the
rate adjustment attributed to the hauler for processing is 4% for residential, 2.7% for commercial and .09% for
the pull fee for a C&D roll off container.
In totality, the GWR rate adjustment reflects an increase of 5.3% for residential customers, 3.6% for
commercial customers and .09% per pull for construction and demolition roll off (plus actual per ton disposal
cost). The rates by sector and service are included as Exhibit A of the attached resolution.

As shown on Exhibit A, the rate adjustments are based on sector as each sector has a differing level of
participation. This approach helps to avoid any intentional effort to have one sector subsidizing the rates of
another sector and is consistent with the approach utilized last year. Overall, tonnage has increased and the
rate adjustment is greater for residential this year as residential accounts participate in solid waste, recycling
and yard waste services, and are the primary driver for the increase in yard waste trimmings. The commercial
sector is more varied with some businesses paying for recycling, some for organics and others having both
types of service.

While the franchise agreement currently requires the City Council to approve the annual rate adjustment, the
rate adjustment is based upon inflationary indexes, disposal fees and actual tonnage. As this methodology is
prescribed within the agreement, Council has the option to approve the rate or disagree with the calculation.
City staff, in tandem with the MRWMD staff and HF&H Consultants, a specialized solid waste consultant that
works exclusively for local governments, has reviewed the methodology, and finds the methodology to be
consistent with the franchise agreement. While the franchise allows the City to initiate a rate adjustment based
upon a cost-based methodology, akin to a true up, staff recommends Council wait a minimum of one more
year before utilizing this provision of the agreement. Therefore, staff recommends Council approve the sector
based rate adjustment, which becomes effective on July 1, 2017, in accordance with the agreement.

FISCAL IMPACT

For context, a residential customer with a 32-gallon trash cart, will now pay $31.90 a month for solid waste,
recycle and yard trimming service, as compared to the current rate of $30.29 a month, or roughly $19 more a
year. Commercial rates vary based upon size of the cart, frequency of service collection and type of service.

PRIOR CITY COUNCIL ACTION

Council approved a rate adjustment in June 2016.

ATTACHMENTS

1. Resolution approving the rates charged charged by the Citys franchised hauler, GreenWaste
Recovery, for the collection of solid waste, recycling and organics effective July 1, 2017
Attachment 1

RESOLUTION 2017-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-


SEA APPROVING RATES TO BE CHARGED BY GREENWASTE RECOVERY
EFFECTIVE JULY 1, 2017 FOR COLLECTION OF FRANCHISED SOLID WASTE,
RECYCLING AND ORGANICS
WHEREAS, the City of Carmel-by-the-Sea (City) entered into a franchise agreement
with GreenWaste Recovery, Inc. (GWR) on June 17, 2014 for solid waste, recycling, and
organics collection services for the period of July 1, 2015 through June 30, 2030; and,
WHEREAS, Section 8.2 of the franchise agreement requires, and Exhibit E1 to the
agreement describes the process for, an annual inflationary adjustment to customer rates on
July 1 of each year, based on agreed-upon cost indices, changes in tipping fees at the Monterey
Regional Waste Management District, and actual tonnage of materials collected by GWR; and,
WHEREAS, the application of the formulas required by the franchise agreement result in
different rate increases for each and every service level; and,
WHEREAS, consistent with the provisions of Section 8.2.C of the franchise agreement,
both the City and GWR have agreed on an alternative approach that adjusts rates by the same
percentage for all customers within each sector of customers, thereby preserving the current
relationship and structure of the rates within each sector to one another; and,
WHEREAS, GWRs calculation of the rate adjustments have been reviewed by City staff
and City staff finds the calculations to be accurate and consistent with the methodology and
requirements of the franchise agreement.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF
CARMEL-BY-THE-SEA:

Approve an adjustment to rates authorized to be charged by GWR under the franchise


agreement as shown in the attached Exhibit A to become effective on July 1, 2017.

PASSED AND ADOPTED BY THE CITY OF COUNCIL OF THE CITY OF CARMEL-BY-THE


SEA this 6th of June 2017, by the following roll call vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:

SIGNED: ATTEST:

_______________________
Steve G. Dallas, Mayor Ashlee Wright, City Clerk
Resolution Exhibit A

Franchise Agreement Exhibit G-3


Rates Effective July 1, 2017
(All rates are monthly unless stated otherwise)

ResidentialSolidWasteCollectionRates
ServiceLevel SolidWaste Recycling Organics
20GalBack/Side $28.71 Included Included
32GalBack/Side $31.90 Included Included
64GalBack/Side $50.43 Included Included
96GalBack/Side $63.93 Included Included
Notes:
SeeExhibitB1forspecificserviceavailability

Commercial/MultiFamilySolidWasteCollectionRates
Frequency
ServiceLevel 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week
32GallonCart $32.29 $64.60 $81.91 $99.58 $117.14 $158.04
64GallonCart $62.19 $101.22 $140.41 $179.61 $264.81 $336.25
96GallonCart $76.71 $144.26 $214.13 $269.99 $346.70 $440.01
1CubicYardBin $177.12 $333.13 $455.87 $573.03 $690.21 $877.42
2CubicYardBin $260.27 $520.16 $780.45 $1,041.79 $1,227.18 $1,306.38
3CubicYardBin $368.51 $650.20 $910.31 $1,126.67 $1,300.71 $1,560.60
4CubicYardBin $490.29 $806.88 $1,300.60 $1,620.58 $1,764.23 $1,907.89
2CubicYardCompactor $284.71 $569.04 $853.76 n/a n/a n/a
3CubicYardCompactor $405.16 $723.52 $1,020.29 n/a n/a n/a
4CubicYardCompactor $539.16 $904.63 $1,447.23 n/a n/a n/a

Commercial/MultiFamilyRecyclingCollectionRates
Frequency
ServiceLevel 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week
64GallonCart $9.33 $15.18 $21.06 $26.94 $39.72 $50.44
96GallonCart $11.51 $21.64 $32.12 $40.50 $52.01 $66.00
1CubicYardBin $26.57 $49.97 $68.38 $85.95 $103.53 $131.61
2CubicYardBin $39.04 $78.02 $117.07 $156.27 $184.08 $195.96
3CubicYardBin $55.28 $97.53 $136.55 $169.00 $195.11 $234.09
2CubicYardCompactor $10.55 $21.04 $31.60 n/a n/a n/a
3CubicYardCompactor $12.54 $12.06 $8.34 n/a n/a n/a
4CubicYardCompactor n/a n/a n/a n/a n/a n/a

Commercial/MultiFamilyFoodWasteCollectionRates
Frequency
ServiceLevel 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week
64GallonCart $46.64 $75.91 $105.31 $134.71 $198.61 $252.19
96GallonCart $57.53 $108.19 $160.60 $202.50 $260.03 $330.01
1CubicYardBin $132.84 $249.85 $341.90 $429.77 $517.66 $658.07
2CubicYardBin $195.20 $390.12 $585.34 $781.34 $920.39 $979.78

Commercial/MultiFamilyYardTrimmingsCollectionRates
Frequency
ServiceLevel 1x/week 2x/week 3x/week 4x/week 5x/week 6x/week
64GallonCart $46.64 $75.91 $105.31 $134.71 $198.61 $252.19
96GallonCart $57.53 $108.19 $160.60 $202.50 $260.03 $330.01
1CubicYardBin $132.84 $249.85 $341.90 $429.77 $517.66 $658.07
2CubicYardBin $195.20 $390.12 $585.34 $781.34 $920.39 $979.78
3CubicYardBin $276.38 $487.65 $682.73 $845.00 $975.53 $1,170.45

RollOffCollectionRates(PerPull)
Material
ServiceLevel MSW REC YT C&D
10YD $452.37 $452.37 $452.37 $452.37
20YD $497.31 $497.31 $497.31 $497.31
30YD $617.95 $617.95 $617.95 $617.62
40YD $738.59 $738.59 $738.59 $738.59
PerTon $64.37 $45.98 $37.36 $64.37


AdditionalServiceRates
Service Sector ChargePerEvent*
CartRentalAllSizes RES $3.05
CartReplacement RES $61.00
ReDeliveryorReStart RES $25.42
CartCleaning RES $25.42
NonScheduledCollection RES $19.32
CardboardSticker COM $9.45
DifficulttoServiceCart COM $1.02
DifficulttoServiceBin COM $3.05
LockingBin COM $50.83
CartReplacement COM $61.00
CartCleaning COM $25.42
BinSwapCleaningorRepainting COM $76.25
BulkyRecyclable RES/COM $20.33
BulkyNonRecyclable RES/COM $25.42
BulkyEvent RES/MFD $30.50
CoveredBox RO $76.25
DriverTimeperHour RO $111.83
DryRunorRelocation RO $76.25
ExtraDays RO $25.42
*Note:ApplicationoffeesshallbeasdescribedinFranchiseAgreement