HomeMy WebLinkAboutMINUTES - 11232010 - D.3RECOMMENDATION(S):
1. ACCEPT report from NewPoint Group dated November 3, 2010 regarding their review
of the 2011 Interim Rate Application submitted by Richmond Sanitary Service. (EXHIBIT
A)
2. APPROVE a solid waste collection service rate increase of 2.0%, effective January 1,
2011, for customers in the unincorporated areas served by Richmond Sanitary Service under
the County’s Franchise Agreement.
FISCAL IMPACT:
No impact to the County General Fund. North Richmond Waste and Recovery Mitigation
fee revenue.
BACKGROUND:
The County has a solid waste collection franchise agreement with Richmond Sanitary
Service (RSS) for service to the following unincorporated areas:
Bayview
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 11/23/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I
Supervisor
Mary N. Piepho, District III
Supervisor
Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
ABSENT:Gayle B. Uilkema, District II
Supervisor
Contact: 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: November 23, 2010
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc: Lorna Thomson
D. 3
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development Director
Date:November 23, 2010
Contra
Costa
County
Subject:Recommended 2011 Interim Rate Change for unincorporated customers served by Richmond Sanitary
Service (RSS)
Bayview
BACKGROUND: (CONT'D)
East Richmond Heights
El Sobrante
Montalvin Manor
North Richmond
Rollingwood
Tara Hills
The County’s RSS Service Area includes portions of Supervisorial Districts I and II.
NewPoint Group Review
The County entered into an agreement with NewPoint Group to review the Interim Year
Rate Change Application submitted by RSS. NewPoint Group conducted their review
consistent with the applicable provisions of the rate setting manual approved by the
County for use in the RSS Service Area. The result of NewPoint Group’s review is
contained in their letter report dated November 3, 2010 which is attached as EXHIBIT A.
Residential Collection Rates
There are two components which together comprise the actual monthly rate charged to
customers in the County’s RSS Service Area.
Integrated Resource Recovery Facility Rate Component
The first component is the Integrated Resource Recovery Facility (IRRF) rate (hereinafter
referred to as IRRF Rate), which is set by the West Contra Costa Integrated Waste
Management Authority (WCCIWMA) and not subject to the approval of the County. The
IRRF Rate includes the transfer and disposal costs and this rate is set each year by the
WCCIWMA. The IRRF Rate component is passed onto all customers served by RSS.
The WCCIWMA Board is expected to consider several different IRRF Rate options with
increases ranging between 3.35% -8.88% at their meeting on November 18, 2010 (see
IRRF Rate options below).
Range of Monthly IRRF Rate Increases Being Considered by the WCCIWMA
Cart
Size
Monthly IRRF Rate Increases for
2011
20
gallon $ 0.56 – 0.88
35
gallon $ 0.72 – 1.28
65
gallon $ 1.38 – 2.42
95
gallon $ 2.06 – 3.62
Service Rate Component (set by the County)
The second component is the service rate, which is set by the County and subject to our
rate review process. The service rate component has not increased for the County’s RSS
Service Area since January 1, 2009. Rather than instituting a residential service rate
decrease of 4.11% for customers in the unincorporated areas served by Richmond
Sanitary Service effective January 1, 2010, service rates were left unchanged. The
recommended reduction is now being treated as a credit to offset a portion of this year’s
proposed increase.
Recommended Residential Service Rate Increase
The County's rate setting manual requires rates to be set in advance of the year they are
ulitmately charged. 2011 will be an interim rate review so service rates are tied to the
changes in the Consumer Price Index (CPI). The County will undertake a more thorough
analysis of actual costs next year when a Base Year rate review will occur (they are
scheduled every fourth year). If the CPI has materially overstated or understated the
hauler's actual change in costs, adjustments can be made during the Base Year rate review.
The recommended 2.0% Service Rate increase is applied to controlled costs (all costs
other than the IRRF rate), in accordance with the County’s rate setting manual.
Controlled costs are adjusted based on the change in the Consumer Price Index (CPI),
which increased by 0.95%. An adjustment factor of 3.90% has been added to account for
the disparity in the projected CPI calculation for 2010 versus the actual CPI for that
specified time period. Republic Services, under the terms of the Franchise Agreement, is
obligated to pay a 5% franchise fee to the County. This fee has also been factored into
this Interim Year Rate Review and thus, increases the controlled costs from 5.80% to
6.11%. However, the recommended service rate increase for 2011 is only 2.0% after
accounting for the 4.11% rate reduction credit for 2010.
The table below summarizes the per cart costs of the recommended increase of the
Service Rate.
Cart Size
MONTHLY SOLID WASTE SERVICE RATE
Existing
Service Rate
Recommended 2.0%
Service Rate Increase
Recommended 2011
Service Rate
20 gallon $ 18.63 $ 0.37 $ 19.00
35 gallon $ 19.23 $ 0.38 $ 19.61
65 gallon $ 37.46 $ 0.75 $ 38.21
95 gallon $ 55.58 $ 1.11 $ 56.69
ATTACHMENT: Exhibit A – Letter report from NewPoint Group dated November 3,
2010
CONSEQUENCE OF NEGATIVE ACTION:
The County would not be able to meet the requirement set by the North Richmond Waste
and Recovery Mitigation fee Joint Expenditure Planning Committee.
CHILDREN'S IMPACT STATEMENT:
Not Applicable.
CLERK'S ADDENDUM
ACCEPTED report from NewPoint Group dated November 3, 2010 regarding their
review of the 2011 Interim Rate Application submitted by Richmond Sanitary Service.
(EXHIBIT A); APPROVED a solid waste collection service rate increase of 2.0%,
effective January 1, 2011, for customers in the unincorporated areas served by
Richmond Sanitary Service under the County’s Franchise Agreement.
ATTACHMENTS
Exhibit A - Letter Report from NewPoint Group