HomeMy WebLinkAboutMINUTES - 10202009 - C.41RECOMMENDATION(S):
1. AUTHORIZE the filing and evaluation of a Base Year Rate Application for solid waste
and recycling collection services provided to unincorporated area customers served under
the County's Franchise Agreement with Garaventa Enterprises.
2. DIRECT the Conservation & Development Director or designee(s) to concurrently
evaluate proposed restructuring of residential collection services and identify associated rate
change recommendations for consideration by the Board of Supervisors, consistent with the
approach used for similar restructuring of residential collection services and rates that was
most recently approved by the Board.
FISCAL IMPACT:
No impact to the County General Fund. The costs for County DCD staff time and any
related consulting services pertaining to these matters would be covered by existing solid
waste collection franchise fees.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 10/20/2009 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Deidra Dingman
925-335-1224
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the
Board of Supervisors on the date shown.
ATTESTED: October 20, 2009
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc: Silvio Garaventa Jr.
C.41
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development Director
Date:October 20, 2009
Contra
Costa
County
Subject:BASE YEAR RATE APPLICATION & RELATED ACTIONS - WASTE COLLECTION IN THE AREAS
GOVERNED UNDER COUNTY'S FRANCHISE AGREEMENT WITH GARAVENTA ENTERPRISES
BACKGROUND:
The County has a solid waste collection Franchise Agreement with Garaventa Enterprises
(hauler) for service to the following unincorporated areas:
• Bay Point (portion*)
• Brentwood, unincorporated
• Oakley (portion**)
• Discovery Bay
• Knightsen
* Portion of Bay Point falls within the area served under the County’s Franchise with
Allied Waste
** Portion of Oakley falls within the area controlled under the Ironhouse Sanitary District
Franchise
County’s Rate Setting Manual
In 1998, the County Board of Supervisors adopted the "Rate Setting Process and
Methodology Manual" to be used for rates charged for solid waste/recycling collection
service provided by Garaventa Enterprises pursuant to the County's Franchise
Agreement. This Rate Manual includes specifics related to the timing and steps involved
with submission and consideration of two types of rate applications, "Base Year Rates"
and "Interim Year Rates". According to the Manual, the hauler is to submit a Base Year
Rate Application once every four years and the hauler is allowed to submit Interim Year
Rate Applications annually in the intervening years.
The Base Year Rate setting process requires that a detailed rate change application be
submitted by the hauler along with the most recent financial audit and supplemental
financial and operational information. Using the detailed financial data provided, County
staff with the assistance of selected financial services consultant (NewPoint Group) will
review designated cost categories to determine the appropriate rate adjustment. The major
cost categories include:
• Direct Labor Costs
• Tipping Fees
• Corporate and Local General and Administrative Costs
• Household Hazardous Waste Program Costs
• Trucking and Equipment
• Allowable Profit
• County’s Franchise Fee
The Interim Year Rate Review is less rigorous than that carried out in a Base Year. The
Interim Year Adjustments are calculated based on a weighted increase in controlled and
uncontrolled costs, including tipping fees, regulatory charges and Consumer Price Index
adjustments. The hauler is not required to submit audited financial data with the interim
year rate application. Additionally, the Manual and the County’s Franchise Agreement
provide the hauler with the right to request special consideration for certain extraordinary
rate changes in Interim Years. Specifically, Section 9 of the Franchise states in part,
”In the event that the Contractor must make significant changes in its operations or
experiences significant changes in costs or revenue not under its control, Contactor may
submit a rate application. Contractor shall provide documentation for the need for such
rate application relative to those changes. The application will thereafter be considered
by the Board.”
History of Solid Waste Collection Rate Increases
The current rates charged to customers served under the County/Garaventa Franchise
Agreement were approved by the Board in August 2008, following review and
consideration of the haulers Interim Year Rate Application which was accompanied by
their request for additional increase to cover "extraordinary fuel cost increases". Below is
a brief summary of rate increases approved by the County since 2003 in the Garaventa
Service Area:
• 2003: Base Year Rates approved = average residential & commercial rate increase of
7.66% and residential rates were standardized
• 2004: Interim Year Rates approved = increase of commercial rates by an average of
11.79% (actual increases ranged between 2% - 25% depending on the level of service)
and commercial rates were standardized
• 2005: Interim Year Rates approved = residential and commercial increase of 3.89%
• 2006: Interim Year Rates approved = residential and commercial increase of 2.69%
• 2007: Base Year Rates approved = residential and commercial increase of 6.44%
• 2008: Interim Year Rates approved = residential and commercial increase of 6.71%
(1.66% of this increase resulting from recommended increase in response to request for
consideration of extraordinary fuel costs)
Request to Consider Base Year Rate Application
The last Base Year Rate Application submitted by Garaventa Enterprises was in 2007,
therefore according to the Manual the next Base Year would normally fall in 2011.
However, the County DCD received a letter from Garaventa Enterprises dated July 3,
2009 which expresses potential intent to submit a Base Year Rate application, because
"an interim increase will not be substantial enough to provide adequate revenues given
the changes that have occurred with the local economy." The letter also indicates that
Garaventa Enterprises "respectfully request the Board of Supervisors to consider a
service restructuring to include automated garbage service, along with single stream
recycling service and green waste container pick up.” Lastly, it explains that the program
would require capital investment for additional wheeled carts.
Staff recommends that the Board allow submission and consideration of a Base Year
Rate application which could be evaluated in conjunction with the hauler proposals to
restructure services and extend franchise.
Staff anticipates using a similar approach in developing recommendations related to
service changes and related rate restructuring as that used by staff which was the basis for
service and rate changes approved by the Board in 2008 applicable to the customers
served by Allied. Staff will work with Garaventa Enterprises to maximize consistency in
the approach used, considering that only a portion of the households in Bay Point are
served by Garaventa Enterprises while the remaining households are served under the
County’s franchise with Allied.
ATTACHMENTS
Letter 7/3/09