HomeMy WebLinkAbout011023-08.1
ADMINISTRATIVE STAFF REPORT 8.1
TO: Mayor and Town Council January 10, 2023
SUBJECT: Consider proposed Solid Waste and Recycling rates for 2023 (Rate Year 9)
and forward a recommendation for an 8% 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 9 (2023) 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
Morgan and Councilmember Arnerich.
RecycleSmart will adopt 2023 rates at their public hearing on January 26, 2023. New rates
become effective March 1, 2023. 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
Solid Waste and Recycling 2 January 10, 2023
Rates for 2023
and vehicle impact fees that are charged to partially mitigate the impacts that refuse
collection vehicles have upon the Town's public streets.
The total revenue required to meet Danville's service delivery requirements for 2023 is
$12,493,978. To meet the revenue requirement, a rate increase of 8.0% 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 2023 rate
increases for the other JPA member agencies are forecast to range from 4.8% to 8.0%.
Table 1 illustrates the year over year rate impact associated with the recommended 8.0%
increase. Monthly rates for Residential service would increase by $2.40 to $6.71, while the
Commercial service rates would increase by $15.01 to $45.04. The recommended rate
adjustment, combined with the use of $367,163 in reserve funds will generate revenues of
$12,493,978.
Table 1
Proposed 2023 (Rate Year 9) Rates
2022 2023 $ Change
Monthly Monthly per
Type of Service
Residential (weekly)
Rates Rates Month
20 gallon $ 29.95 $ 32.35 $ 2.40
32 gallon $ 33.20 $ 35.86 $ 2.66
64 gallon $ 56.47 $ 60.99 $ 4.52
96 gallon
Commercial (weekly) $ 83.82 $ 90.53
$ 6.71
1 cubic yard $ 187.68 $ 202.69 $ 15.01
2 cubic yard $ 375.33 $ 405.36 $ 30.03
3 cubic yard $ 563.01 $ 608.05 $ 45.04
Reserves
Reserves are maintained and utilized to fund any unanticipated costs and to stabilize
current and/or future rates charged to ratepayers. Danville's 2023 reserves are projected to
be $2,043,730, equivalent to 16.4% of the 2023 revenue requirement. For 2023, Reserves are
drawn down by $367,163 in order to reduce the recommended rate increase for Rate Year 9.
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 2023, the Town will receive $936,283 from franchise fees. Vehicle
impact fees are charged to offset impacts of service vehicles upon Town streets and roads.
Solid Waste and Recycling 3 January 10, 2023
Rates for 2023
A December 2017 Refuse Vehicle Street Maintenance Cost Analysis prepared for Danville
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 2023, vehicle
impact fees will generate $868,803 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 2023 rates would generate estimated revenues of $12,493,978 sufficient to fund all
service delivery and related costs for all Danville residential and commercial customers.
Projected franchise fees of $936,283 and vehicle impact fees of $868,803 will meet or exceed
the Town’s 2022/23 Operating Budget estimates.
RECOMMENDATION
Approve proposed Solid Waste and Recycling Rates for 2023 (Rate Year 9) and forward a
recommendation for an 8.0% rate increase to the RecycleSmart Joint Powers Authority.
Prepared by:
Cat Bravo
Management Analyst
Reviewed by:
Joseph A. Calabrigo
Town Manager
Attachment: 2023 Rate Comparison
Solid Waste and Recycling 4 January 10, 2023
Rates for 2023
2023 Rate Comparison
Jurisdiction
32-gal.
$/Mo.
Recycling
Frequency
Yard Waste
Frequency
Piedmont $95.55 Weekly Weekly
El Cerrito $60.13 Weekly Weekly
Orinda $59.47 Weekly Weekly
Kensington $49.04 Weekly 2x per month
Richmond $45.20 Weekly Weekly
San Ramon $42.05 Weekly Weekly
Hercules $43.65 Weekly Weekly
Moraga $44.55 Weekly Weekly
Livermore $40.63 Weekly Weekly
Lafayette $41.69 Weekly Weekly
Martinez $38.80 Weekly Weekly
Pinole $40.63 Weekly Weekly
Dublin $38.39 Weekly Weekly
West CC County $40.11 Weekly Weekly
Concord $38.57 Weekly Weekly
San Pablo $36.86 Weekly Weekly
Danville - Scenario 8.00% $35.86 Weekly Weekly
Danville - Current $33.20 Weekly Weekly
Clayton $30.58 Weekly Weekly
County $30.86 Weekly Weekly
Brentwood $29.77 Bi-weekly Bi-weekly
Pleasant Hill $31.66 Weekly Weekly
Walnut Creek $28.18 Weekly Weekly
* Reflects 2023 Proposed Rate