HomeMy WebLinkAbout121520-08.1
ADMINISTRATIVE STAFF REPORT 8.1
TO: Mayor and Town Council December 15, 2020
SUBJECT: Consider proposed Solid Waste and Recycling for 2021 (Rate Year 7) and
forward a recommendation for a 4.5% rate increase to the RecycleSmart
Joint Powers Authority
BACKGROUND
Danville is a member of RecycleSmart, a Joint Powers Authority (JPA) which provides solid
waste and recycling services for Danville, Lafayette, Moraga, Orinda, Walnut Creek, and a
portion of Contra Costa County. The JPA was formed in 1994 to capitalize on economies of
scale, reduce service delivery costs and help meet state-mandated solid waste diversion
requirements. Through the JPA, the Town has been able to keep service delivery costs low
for Danville residential and commercial ratepayers.
The JPA is currently entering into Rate Year 7 (2021) of service under the current ten-year
franchise agreement. Republic Services and Mt. Diablo Recycling currently service over
15,000 residential accounts within the Town.
The RecycleSmart Board sets solid waste rates annually for residential and commercial
services. The goals of the annual rate setting process are to; 1) maintain rates that are as
competitive as possible for Danville ratepayers; 2) ensure that sufficient revenues are
available to meet revenue requirements called for under the franchise agreement; and 3)
maintain sufficient reserves to ensure long term rate stability. The Town's two
representatives on the 12-member RecycleSmart Board of Directors are Councilmember
Stepper and Vice Mayor Arnerich.
RecycleSmart will adopt 2021 rates at their public hearing on January 28, 2021. New rates
become effective March 1, 2021. Each member jurisdiction of the JPA is responsible for
recommending its own rates to the RecycleSmart Board of Directors.
DISCUSSION
Annual rates are set based upon the costs associated with delivering solid waste and
recycling services including: compensation for Republic Services and Mt. Diablo Recycling,
maintaining appropriate reserve levels, RecycleSmart administrative costs, franchise fees
and vehicle impact fees that are charged to partially mitigate the impacts that refuse
collection vehicles have upon the Town's public streets.
Solid Waste and Recycling 2 December 15, 2020
Rates for 2021
The total revenue required to meet Danville's service delivery requirements for 2021 is
$11,419,222. To meet the revenue requirement, a rate increase of 4.5% is recommended. The
recommended adjustment will ensure that sufficient reserves are maintained to fund any
unanticipated costs and provide for rate stability moving forward. Recommended 2021 rate
increases for the other JPA member agencies are forecast to range from 4.4% to 7%.
Table 1 illustrates the year over year rate impact associated with the recommended 4.5%
increase. Monthly rates for Residential service would increase by $1.26 to $3.53, while the
Commercial service rates would increase by $7.92 to $23.77. These rates would generate total
revenues of $11,419,222.
Table 1
Proposed 2021 (Rate Year 7) Rates
2020 2021 $ Change
Monthly Monthly per
Type of Service
Residential (weekly)
Rates Rates Month
20 gallon $ 28.10 $ 29.36 $ 1.26
32 gallon $ 31.15 $ 32.55 $ 1.40
64 gallon $ 52.98 $ 55.36 $ 2.38
96 gallon
Commercial (weekly)
$ 78.65 $ 82.18 $ 3.53
1 cubic yard $ 176.08 $ 184.00 $ 7.92
2 cubic yard $ 352.12 $ 367.97 $ 15.85
3 cubic yard $ 528.20 $ 551.97 $ 23.77
Reserves
Reserves are maintained and utilized to fund any unanticipated costs and to stabilize
current and/or future rates charged to ratepayers. Danville's 2021 reserves are projected to
be $2,769,917, equivalent to 24.3% of the 2021 revenue requirement. This amount includes
the Town's share of proceeds received by RecycleSmart from the sale of recyclable materials.
Rate Year 7 is the last year the Town will be receiving proceeds from the sale of recyclable
materials. For 2021, Reserves are drawn down by $410,858 in order to reduce the
recommended rate increase for Rate Year 7.
Franchise and Vehicle Impact Fees
A 10% franchise fee is charged to the service providers for exclusive franchise rights granted
to deliver the service. For 2021, the Town will receive $846,851 from franchise fees. Vehicle
impact fees are charged to offset impacts of service vehicles upon Town streets and roads.
A December 2017 Refuse Vehicle Street Maintenance Cost Analysis prepared for Danville
Solid Waste and Recycling 3 December 15, 2020
Rates for 2021
through the JPA updated and quantified the impacts to Town streets and infrastructure
attributable to solid waste and recycling collection services.
This analysis determined that these vehicles account for approximately 38.6% of the total
impact that a typical Town street experiences. At the Town's current pavement management
and street maintenance funding levels, the analysis identified approximately $1.34 million
per year in attributable impacts associated with the refuse vehicle traffic. For 2021, vehicle
impact fees will generate $846,851 that will be used to partially offset the Town's Pavement
Management and Street Maintenance costs.
PUBLIC CONTACT
Posting of the meeting agenda serves as notice to the general public. A copy of this staff
report was provided to RecycleSmart.
FISCAL IMPACT
Proposed 2021 rates would generate estimated revenues of $11,419,222 sufficient to fund all
service delivery and related costs for all Danville residential and commercial customers.
Projected franchise fees of $846,851 and vehicle impact fees of $846,851 will meet or exceed
the Town’s 2020/21 Operating Budget estimates.
RECOMMENDATION
Approve proposed Solid Waste and Recycling Rates for 2021 (Rate Year 7) and forward a
recommendation for a 4.5% rate increase to the RecycleSmart Joint Powers Authority.
Prepared by:
Diane Friedmann
Assistant to the Town Manager
Reviewed By:
Joe Calabrigo
Town Manager
Attachment: 2021 Rate Comparison
Solid Waste and Recycling 4 December 15, 2020
Rates for 2021
2021 Rate Comparison
* Reflects 2021 Proposed Rate
32-gal.Recycling Yard Waste
Jurisdiction $/Mo.Frequency Frequency
Piedmont $90.35 Weekly Weekly
El Cerrito $58.60 Weekly Weekly
Orinda $51.05 Weekly Weekly
Kensington $49.04 Weekly 2x per month
San Ramon $41.56 Weekly Weekly
Richmond $41.18 Weekly Weekly
Moraga*$41.10 Weekly Weekly
Hercules $40.15 Weekly Weekly
Livermore $38.85 Weekly Weekly
Lafayette $37.29 Weekly Weekly
Pinole $37.21 Weekly Weekly
West CC County $36.60 Weekly Weekly
Concord $35.15 Weekly Weekly
San Pablo $33.59 Weekly Weekly
Antioch $31.92 Weekly Weekly
Danville $29.36 Weekly Weekly
Clayton $29.26 Weekly Weekly
Pleasant Hill $29.17 Weekly Weekly
Brentwood $28.90 Bi-weekly Bi-weekly
Martinez $28.83 Weekly Weekly
Dublin $28.82 Weekly Weekly
County $27.87 Weekly Weekly
Walnut Creek $24.94 Weekly Weekly