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MINUTES - 06231998 - D6
Contra TO: BOARD OF SUPERVISORS Costa FROM: DENNIS M. BARRY, AICP County COMMUNITY DEVELOPMENT DIRECTOR DATE: lune 23, 1998 SUBJECT: ADOPT CHANGES TO SOLID WASTE COLLECTION RATES CHARGED TO CUSTOMERS IN UNINCORPORATED COUNTY SERVED BY BROWNING-FERRIS INDUSTRIES THROUGH THE FRANCHISE AGREEMENT WITH THE COUNTY. SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS ADOPT the residential Solid Waste rate changes as recommended by'NewPoint Group, Solid Waste Consultants, for the unincorporated area served by Browning-Ferris Industries (BFI)which includes Household Hazardous Waste charges for Rodeo and Bay Point and a 5 percent Franchise Fee (Regulatory Service Charge) for residential and commercial solid waste service in the unincorporated area served by BFI. DIRECT the Community Development Department to perform the following tasks in order to institute recommendations suggested by the Solid Waste Consultants,'NewPoint Group, and to comply with the County's Solid Waste goals. A. Simplify and standardize the types of service offered in the eleven unincorporated areas so that all customers have the same services. B. Redesign the rate structure and standardize the rate schedules in the eleven unincorporated areas in order to provide all customers with the same rates. There may be some differences for hard to service areas where'smaller trucks are necessary. C. Institute variable can rates in accordance with the County's source reduction goals as outlined in the County's Source Reduction and Recycling Element (SRRE). CONTINUED ON ATTACHMENT: X YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEN'C ATION OF B ARD COMM' APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON JUNE 23, 1998 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE ABSENT: ABSTAIN: BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Linda Moulton (9251335-1238) ATTESTED 0 cc: Community Development Department (CDD) PHIL BAT EL.OR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By , DEPUTY LMI:mb J:�groups\cdadpooftariorie\conserva\ratchngs.bo ADOPT CHANGES TO SOLID WASTE COLLECTION RATES CHARGED TO CUSTOMERS IN UNINCORPORATED COUNTY SERVED BY BROWNING-FERRIS INDUSTRIES THROUGH THE FRANCHISE AGREEMENT WITH THE COUNTY. June 23, 1998 Page 2 D. Institute green waste service in accordance with the County's SRRE. E. Expand recycling to include all materials listed in the County's materials Diversion Ordinance (Ordinance No. 92-105). F. Before instituting the above service changes, survey all the unincorporated areas as to service preferences and incorporate suggestions into the service plan as appropriate. A survey would help facilitate the redesign of services and rates and help staff understand how customer behavior might change in response to changing rate structure and services. FISCAL IMPACT NO impact to the general fund. Instituting a Franchise Fee will generate funds for Solid Waste programs. BAC GROU'NDIREASONS FOR RECOMMENDATIONS TIONS On June 3, 1997, the Board of Supervisors voted to authorize the Community Development Director to execute a contract with NewPoint Group to develop a solid waste rate setting process and methodology manual to be used to facilitate a;rate review which had been requested by Brown-Ferris Industries (BFI). On May 19, 1998, the Board voted to accept the rate setting methodology manual developed by NewPoint Group for residential solid waste charges in the unincorporated areas outside of Central Contra Costa Solid Waste Authority (CCCSWA) which are served by BFI. On August 12, 1997 the Board authorized the Community Development Director to execute a contract for a solid waste rate review for the above mentioned unincorporated County area. NewPoint Group has completed the Solid Waste review and the rate application, the procedure, the results and recommendations are shown in Exhibit 1. The unincorporated areas effected by this rate review include: Part of Bay Point Unincorporated area near Concord Alhambra Valley Morgan Territory Unincorporated area North of Lafayette Rodeo Mountain View Pacheco Unincorporated area in Central Sanitary Area/Clyde/Pleasant Hill Canyon Tassajara As of January 1998, BFI was serving a total of 6,720 residential customers within these areas. The areas with the fewest customers were Canyon (29), Concord (38) and Tassajara(67) and the areas with the greatest number of customers were Rodeo(2,067) Mountain View (1,617) and Bay Point (1,414). The number of accounts for each unincorporated area is shown in the Rate Review appendix in Table Exhibit B-2 (shown here as Attachment 1). Within the eleven unincorporated areas, currently there are 44 unique service types depending on the service area (Attachment 2) ranging from one 20 gallon can without cleanups to three 95 gallon carts with 2 yearly cleanups. Of these 44 possible service types, there are actually 39 different types of service being used by customers although nearly half of the customers (3,221) had service with 32 gallon containers, every other weep recycling and 2 clean-up days per year. ADOPT CHANGES TO SOLID WASTE COLLECTION RATES CHARGED To CUSTOMERS IN UNINCORPORATED COUNTY SERVED BY BROWNING-FERR[S INDUSTRIES THROUGH THE FRANCHISE AGREEMENT WITH THIS COUNTY. June 23, 1998 Page 3 Current charges for type of service vary between unincorporated areas. For example. 20 gallon can rates vary from a low of$14.95 to a high of$16.00; 32 gallons from $15.15 to $18.93 (with senior rates varying from$10.70 to 14.55); 64 gallons from $15.50 to $36.70; and 95 gallons from $18.15 to$47.03. Most areas have recycling every other week and 2 clean-ups per year. The reasons for the many variations in service type and charges stem from the historical rate structures and types of service which were in place when BFI took over from Pleasant Hill Bayshore Disposal. NewPoint Group analyzed financial statements from BFI and projected the revenue and expense requirements as shown in the rate review in Exhibit 111-3. The projected revenue requirement for the base year of 1998 is $3,905,588 which allows a 90% operating ratio. This would imply a 7.97 percent overall rate increase in the unincorporated areas. Three of the unincorporated areas have not had a rate increase since 1990 or 1991 and five areas had rate decreases in 1995 due to reductions in tipping fees. Exhibit IV-1 in the rate report(shown as Attachment 3) shows the historical changes in 32 gallon can rates. Between 1992 and 1997, the annual compound rate in the Consumer Price Index (CPI)for San Francisco-Oakland -San Jose was 2.38 percent per year. On a compounded basis the CPI increased 12.5 percent over the five year period. BF1 is allowed in its franchise agreement with the County to increase rates by an amount up to the full CPI, without a rate change application submitted to the County. BFI hasn't requested a CPI rate change in the three years since the franchise agreement became effective. NewPoint Group found that the 7.97 percent rate increase is reasonable and represents the result of shifting BFI to a more accountable, rigorous, and formal rate setting process and methodology, (page IV-3). Another reason why rates are increasing is that the Unincorporated County franchise fees are being initiated into the 1998 projected base year calculations. In recommending the implementation of the rate change NewPoint Croup considered four factors in assessing how to implement the recommended unincorporated County rate increase (page IV-4). 1. The current unincorporated rate structure is complex. 2. County staff has expressed an interest in simplifying the current rate structure while incorporating service changes to help meet AB939 goals.' 3. Because this is the first formal rate review the rate change should be explainable and implementation should be straight forward. 4. Rate change must be equitable to rate payers. NewPoint Group evaluated six alternatives and recommends spreading the total revenue requirement equally across the number of rate payers. The proposed rate structure would result in a $1.51 increase per customer per month and the absolute rate increase is shown in the rate review in Appendix H, Exhibit H-1. It is shown here as Attachment 4. This alternative not only had the advantage of being very straight forward but also tended to partially equalize rates (ie: those with the lowest rates had slightly higher percentage increases). Customers in Rodeo and Bay Point have an additional revenue requirement for a Household Hazardous Waste Program (HHW) which benefits only those two areas. The Community Development staff needs direction from the Board' to implement the ADOPT CHANGES TO SOLID WASTE COLLECTION RATES CHARGED TO CUSTOMERS IN UNINCORPORATED COUNTY SERVED BY BROWNING-FERRIS INDUSTRIES THROUGH THE FRANCHISE AGREEMENT WITH THE COUNTY. ,lune 23, 1998 Page 4 changes into the rate and service structures that have been recommended by NewPoint Group and other service rate changes that are consistent with the County's AB939 goals (ie: expanded service to include green waste and additional recycling materials; variable can rates) and return to the Board with recommendations by the spring of 1999. County staff and BFI would coordinate design and implementation of a survey which would ask customers about their preferences for service which would help in the restructuring of services and rates. Attachment I* Exhibit B-2 Number of Accounts for Unincorporated Contra Costa County areas Attachment 2* Exhibit B-2 Existing Residential Rate Structure for unincorporated Contra Costa service areas Attachment 3* Exhibit N-1 Historical Rate Changes in Unincorporated Contra Costa areas Attachment 4* Exhibit H-1 Proposed Residential Rate Structure for unincorporated areas serviced by BFl Exhibit 1 Review of Browning-Ferris Industries Solid Waste Rate Application *Attachments 1-4 are tables contained within Exhibit 1 ......... ATTACHMENT 1 Number of Am""for Uoloo"mied Cortre CwU Couty Arm Ser rked by M unt M 8eyebm o)kpno ImL-growsW Porro irdn im 1 :: ' :: . •'14:af:'•' •.yA.illt3•• 1-003.1.. il. Ww 7 E WA i 1 t•if01111. Tb flow f E WA 3 i hir�ara tb low • I WA 1.101rn 14 eow I.yYr I WA i• .. , .. .. .•.M Wa 1-33M0.. Ya rw 1 i WA apt 30 /33Nr.. Ya ww 1 2WA 1.23fur..AW.IS YY ww i 7 WA Nf l.31� IAr 1Ww 131/ 3WA 1 >r 37 143 SAW Ya low E 3 WA m 12 303 M N IS" ,-no" Yr ow ir4r 2 WA p3 sN hit Ka Ya W. War I WA i.33.Wlspr�p. Ya •.... Ya: :"• 3 .Yr I . WA: !Z . .... ...iy72 . . : .' ' '. . ' ... ..... . . .. . ... .... .... . .. ..., ... ' 3 .. O aMa Ya ow [ I WA W w rm.a Ya am 1 E WA N f S? 01.0.14A Ya ww S 3 WA 3 I •Wa Ya rnw3 I WA K 34 • Y 131 ro OIW. VW w lrYr 3 WA Q C .311/a""i.. Yr d7M' liar WA1 1 ... .... .... .... .... ... .... .•. .......... . ....... .... .... ...... ... alV Ya 11. t 3 WA i / 01r.. Ya rw 1 3 WA 3 3 >MM Ya ow 3 3 WA • 1 - S ara YM row 1 3 WA 3 i sfa•la Yr am u.rr... W,% O .... ... .... .... ... ...i ... ..... ..... .... ..... ....-�'} ........ .... >i ilre. Ya rw 1 3 WA ums" Ya row 3 3 WA •.ra Yr row I i WA - 6.000.. Ya row. t►rr 7 WA .... .. ... ..... ... :•rt 040w W. 14 ra11E iWl f fI 13 4440r— W rif Law 3 RS 131 I7r I.Yarrrr f4 row f.00 i fL33 sn 173 IMPraad Ut row boo 3 U& M W 3S 1..1. Iii3Mrta"OWM LWi ro0r 1.rn 3 fWk •$ 33 N :. h7301rIaaA W ew b'"3 um N N I-*wAiw.w Www r.11 2 f3.i0 OIO I3 113 132 39 a. 031 14S VAN am it row r.w 2 U1! 3" S 3•• t•M Ti4.r11t.IWW13 %1 rD;w Y•a ! lYE i .. ... .... .... ... . ...... :1,Irf ... .1 •rare .._. ... .I.... .• ... . .. .... 3 .. ... 3-W miho 16 mw bow 2 Mae to of ..fir!.n•Y.._. .�!. .�. .i W. ... .. ..... .•.'.'.'.'.•'.'.'.'.'.'.'..'.'.'.'.'.'........ ....�.............. .,...... ...... ..... ............ .,... ..... ............... .,.. ............. ...... ...... ...... ........ ...... 3 31rIa•r1 fb row r•a. 3 ICAO 1 aYfratr 1b row rar 3 w . '. .';' '.;' ......t.•.' j ..7 5 j. ATTACHMENT 3 �. 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Alhambra Valley $18.00 4/1/95 $21.50 8/1/94 -16.28 Bay Point $16.75 9/1/91 $10.00 4/1/85 67.50 Canyon' $18.93 3/1/96 N/A N/A N/A Tassajara' $16.70 3/1'/96 N/A N/A N/A Concord-Uninc. $18.00 2/1/95 $19.00 11/1/94 -5.26 Morgan Territory $18.00 2/1/95 $21.50 8/1/91 -16.28 Mountain View $17.83 4/1/95 $18.55 7/1/91 -3.88 Pacheco $15.15 2/1/90 $14.15 8/l/89 7.07 Pleasant Hill/Clyde $15.15 2/1/90 $14.15 8/1/89 7.07 Rodeo $16.60 2/1/95 $18.40 1/1/94 -9.78 'New as of March, 1996. Papt 1Y-2 ATTACHMENT 2 u3tb2corpronMRd+COCA98 ca"Cowdy Area Sm v ed by rIRmm Int D bpo W tae,-Wvwuiat irmb bdmtm �4 if91� cmiod I.J Anna avow Awry ` - SMalaa w. I.nsOr W ww 2 S WA 8 K* i U." i UA 1-mrso )b ww 1 i WA E Kn t�E 1•MaYw S4 am • 3 WA Um t•lIL ItA 1•M•IWs Lk OW qrr 2 WA • 22.t/ ISM 1•Aalb Ta+ K i 2 WA .._ ". ..22.0 - .. .. 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" .txg" '�'e4 " 1 � � � �• � : �t� ti g�- � f Review of Browning-Ferris Industries, Inc. - d Pleasant Hill Bayshore Disposai, Inc. k � x Solid Waste Rate Application ` Ivoi 4 a r March 13, 1998 NewPoint Group) Management Consultants March 13, 1998 Dr. Linda Moulton Contra Costa County Community Development Department 651 Pine Street 4th Floor,North Wing Martinez, California 94553-0095 Regarding: Review of Browning-Ferris Industries Inc.- Pleasant Hili Bayshore Disposal,Inc. Solid Waste Rate Application Dear Dr. Moulton: NewPoint Group is pleased to present the Contra Costa County Community Development Department(County)with our final report titled, "Review of Browning- Ferris Industries Inc. -Pleasant Hill Bayshore Disposal, Inc. Solid Waste Rate Application. " This final report represents results of our first base year rate review of Browning-Ferris Industries Inc. -Pleasant Hill Bayshore Disposal, Inc. (BFI-PHBD). This review was conducted in accordance with guidelines provided in the 1998 Rate Setting Process and Methodologyfor Residential Solid Waste Charges(Rate Setting Manual), available under separate cover. This review moves BFI-PHBD from essentially a non rate-regulated environment to a regulated one, and incorporates a formal,rigorous, and accountable process for reviewing and adjusting residential solid waste rates. Currently, BFI-PHBD services nine(9)distinct geographic areas within unincorporated County. Many of these areas have historically evolved with different rates and associated service levels. .Among the principal tasks NewPoint Group performed were: ❑ A review of fiscal year ended September 30, 1994 through 1997 revenues and costs Ll A rate survey of eleven other neighboring jurisdictions Benchmarking of reasonable levels of corporate and local overhead costs and operating profits ❑ Adjustments to the financial data provided by BFI-PHBD to reflect waste industry practices ❑ Recommendations for implementation of a proposed rate change. This report recommends an equitable and justifiable residential refuse collection rate. The rate is competitive with rates of other similar neighboring jurisdictions. The rate also • 2555 Third Street,Suite 215,Sacramento,coiifomia 95818 + Phone:(91 b)442-0508 • Fax:(918)442-0714 NewMint Group Management Consultants Dr. Linda Moulton Page 2 March 13, 1998 covers BFI-PHBD's allowable costs of operations and allows BFI-PHBD to earn a reasonable profit. We recommend that the County increase rates to each residential customer by$1.51 per customer,per month. BFI-PHBD has not had a rate increase for most unincorporated County areas since 1990 and 1991. This rate change is the result of(1) inflationary increases in costs, (2) a new allowable profit methodology, and(3)the County charging a franchise fee for the first time. This rate change corresponds to a 2.5 to 14.5 percent actual increase in rates, depending upon the particular service level and unincorporated County geographic area. We also recommend the County consider redesigning the current complex rate structure within the next year to make services and rates more uniform for all BFI-PHBD- serviced areas, and to introduce new services required for meeting AB 939 recycling objectives. In the future,we also suggest that the County separately perform a review to asses the costs of transfer station,transportation, and disposal services. If you have any questions concerning this report,please do not hesitate to contact myself at(916)449-3510,or Mr. Erik Nylund at(510)338-0104. Thank you for the opportunity to serve Contra Costa County. Very truly yours, NEWPOINT /GROU'P,INC. L.lii�c�d s►--2e�sOA. Gibson,Ph. . �r Director Table of Contents COVER LETTER SECTION PAGE EXECUTIVE SUMMARY..............................................................................E-1 L INTRODUCTION AND BACKGROUND ..........................................................I-1 A. BACKGROUND OF REVIEW...............................................................I-1 B. GOALS AND OBJECTIVES OF REVIEW................................................I-2 C. SCOPE OF REVIEW...........................................................................I-2 II. RATE SETTING PROCESS...........................................................................II-1 A. BASE YEAR PROCESS.......................................................................II-1 B. 199$ BASE YEAR RATE APPLICATION..............................................II-2 C. INTERIM YEAR PROCESS..................................................................II-2 III. REVIEW OF RATE CHANGE APPLICATION FOR 1998.................................III-1 A. BACKGRUND OF 1998 BASE YEAR REVIEW....................................III-1 B. REVIEW OF BFI-PBBD ALLOCATION METHODOLOGY......................III-2 C. REVIEW OF REVENUES, COSTS, AND PROFITS...................................III-5 D. COMPONENTS OF SINGLE CAN RATE ................................................III-13 IV. IIECOMMENDED RATE CHANGE................................................................N-1 A. RECOMMENDED RESIDENTIAL RATE CHANGE...................................IV-1 B. WHY RATES ARE INCREASING?........................................................N-1 C. IMPLEMENTATION OF RATE CHANGE................................................IV-4 D. COMPARISON OF RATES AND SERVICES TO OTHER IURISDICnONS.................................................................................IV-6 E. OTHER REcommENDATIONS............................................................IV-7 . ..... .................................. .......I'll-.......-.........I...... ....................... ........-............. . . ...................................... List of Exhibits ExmBff PAGE I-1 BROWNING-FERRIS INDUSTRIES, INC. -PLEASANT HILL BAYSHORE DISPOSAL, INC. UNINCORPORATED CONTRA COSTA COUNTY REFUSE COLLECTION SERVICE AREAS...................................................................1-3 H-1 TM41NG OF CONTRA COSTA COUNTY RATE SETTING PROCESSES................II-3 III-1 CURRENT BFI-PHBD ALLOCATION METHODOLOGY.................................IH-3 Ill-2 SCHEDULE OF NEwPoiNT GROUP FINDINGS..............................................IH-6 111-3 SumAARY OF ADjusTmENTs To BFI-PBBD REVENUES AND EXPENSES................................................................................................HI-12 111-4 COMPONENTS OF THE SINGLE CAN RATE...................................................III-14 IV-1 HISTORICAL RATE CHANGES IN UNINCORPORATED CONTRA COSTA COUNTYAREAS.......................................................................................IV-2 ............. .................................. (41 List of Appendices APPENDix PAGE A. BFI-PHBD RATE APPLICATION......................................................................A-1 B. RATE STRUCTURE AND NUMBER OF ACCOUNTS..............................................B-1 C. SUMMARY OF TOTAL REVENUES AND EXPENSES............................................0-1 D. SERVICE AREA REVENUES AND EXPENSES......................................................D-1 E. BFI-PIMD TONNAGE....................................................................................E-1 F. SURVEY OF SIMILAR JURISDICTIONS...............................................................F-1 G. COMPARATIVE LOCAL, REGIONAL, AND CORPORATE GENERAL AND ADI,.MSTRAnvF-COSTS ................................................................................G-1 H. PROPOSED RESIDENTIAL RATE STRUCTURE ....................................................H-1 I. COMPARATIVE SURVEY OF FRANCHISE FEES CONDUCTED By CONTRA COSTA COUNTY ...............................................................................I-1 _.. _ _ ......................................................... T. EXECUTIVE SUMMARY _. .. ................................................ Executive Summary Contra Costa County(County)recently comparative survey of eleven other similar engaged NewPoint Croup Inc. to develop a jurisdictions to the unincorporated County. residential solid waste rate setting methodology As a result of our review,we recommend for the County, and to perform the first formal that the County increase unincorporated residential rate review of Pleasant Hill County residential rates by$1.51 per Bayshore Disposal,Inc.,a wholly owned customer,per month. To implement this subsidiary of Browning-Ferris Industries of rate increase,we recommend that the County California,Inc. which is a wholly owned uniformly increase each rate within the subsidiary of Browning-Ferris Industries,Inc. (hereafter known as BFI-PHBD). The focus of existing rate structure$1.51',per month. This our review was on residential refuse collection uniform absolute rate change is equitable toratepayers,and acts to bring existing divergent rates. rates within each rate category closer together. This report represents results of the first The$1.51 per customer,per month,absolute review of BFI-PHBD. Our review was rate increase results in an actual percentage performed consistent with guidelines provided rate increase ranging from 2.5 percent to 14.5 in the County's 1998 Rate Setting Process and percent. Average unincorporated County Methodology Manual for Residential Solid rates for 32 gallon containers will increase 9.3 Waste Charges(hate Setting Manual),which percent,64 gallon containers will increase 7.2 is available under separate cover. In the past, percent,and 95 gallon containers will increase no formal rate setting process or methodology 5.9 percent from current average rates. for BFI-PHBD existed. This$1.51 per customer,per month rate BFI-PHBD provides service to nine increase corresponds to an overall 7.97 geographic areas located within the percent increase in the 1998revenue unincorporated County. On August 1, 1995, requirement. The revenue requirement is BFI-PHBD signed a twenty(20)year franchise defined as the sum of allowable costs,pass- agreement with the County to provide these through costs, and allowable operating profits. services, extending through July 31,2015. Our review findings reduced the 1998 The current unincorporated County revenue requirement by$541,530, resulting in residential rate structure is complex. This rate a base year 1998 revenue requirement of structure evolved based on unique historical $3,905,588. Without any of our adjustments, circumstances in an essentially non rate- County residential rates would have needed to regulated environment. Consequently,the rate be increased by as high as twenty percent. structure has multiple service types and significantly different rates by area. This rate increase is caused by a combination of: (1)inflationary adjustments to Our objective of this first formal base year BFI-PHBD expenses,(2)new County rate review ofBFI-PHBD was to establish fair franchise fees,and(3)an allowable company and equitable residential rates which will cover profit component. BFI-PHBD also has not BFI-PHBD's operating costs and provide a had a rate increase for many areas in the reasonable profit to the hauler. To conduct our unincoroprated County since 1990 and 1991. review we used our experience in the waste From 1992 through 1997,the Consumer management industry, drawing from an Price Index(CPI)increased'12.5 percent,on extensive database of industry benchmarks and an aggregate basis. Thus an argument could practices. We also relied on results of a be made that an increase as high as 12.5 NewPoint Group Page is-1 D• 6 Executive Summary percent is merited. However,from BFI-PHBD to provide a return to the hauler to historical data we could not determine that(1) compensate the hauler for its investment past rates were aligned with the costs of in the business. In the waste management service,and(2)whether expenses increased at industry,the operating ratio is typically a level consistent with the CPI. Thus we used on a before interest and tax basis. believe a 7.97 percent overall increase is more 0 Franchise fog-this will be the first year reasonable because it reflects a more that the County collects a franchise fee accountable,formal, and rigorous rate setting from BFI-PHBD. The franchise fee will approach. equal five(5)percent of gross revenues. Major findings from NewPoint Group's Gross revenues will include all residential, review of BFI-PHBD are described below: commercial,and light industrial refuse and © Tipping fees-Tipping fees are fixed for recycling revenue. Franchise fees will be unincorporated County customers at a pass through expense lwhich does not $51.24 per ton,with a cap on the allowable earn profit. component. Tipping fees up to$43.08 per NewPoint Group also has the following ton are allowable with profit. Tipping fees three additional recommendations as a result between$43.08 and$51.24 per ton are a of our review of BFI-PHBD: pass through expense,and do not earn a p Redesign the Rate Structure-We profit. Support for this figure is in BFI- recommend that the County immediately PHBD's current preferred Central County proceed over the next one year,by March tipping fee of$43.08 per ton. of 1998,with a redesign of the existing C• General and administrative casts- complex unincorporated County residential Corporate and local general and rate structure. A goal of this effort should adanninistrative(G&A)costs were capped at be for the County to simplify the structure 13.2 percent of revenues,consistent with with the intent of providing all benchmark data from a survey of seven unincorporated County customers similar other similar waste management companies services and rates. over a three year period. This redesigned rate structure would allow • Non-allowable coats-Consistent with the the County to incorporate new services such industry,we recommend that the County as a mini-can rates and a yardwaste disallow: program. Costs and impacts of these • A$202,237 expense for amortization programmatic and service changes will need Of franchise purchases to be assessed and fairly incorporated into a revised rate structure. • A$203,727 in interest expense U Review Transfer Station, • A$93,003 benefit for income tax Transportation,and Landfill Costs- expenses. The is a unique case where BE owns and CI Allowable operating profit-We operates both the transfer station and recommend that the County use an landfill used to dispose of unincorporated operating ratio ranging from 88 to 92 County waste. This rate review did not percent,with a target of 90 percent. In this encompass a cost-of-service study for the first base year,we establish the operating transfer station and landfill. We ratio at 90 percent,on an earnings before recommend a review to assess the costs of interest and tax basis(EBIT). This 90 providing transfer station,transportation, percent operating ratio is equivalent to an and landfill disposal to unincorporated 11.1 percent return on allowable operating County ratepayers. expenses. This operating ratio is designed Page E-2 NewPoint Group .............. ................. .............. I. INTRODUCTION AND BACKGROUND 1. Introduction and Background Contra Costa County(County) has jurisdiction to regulate collection, contracted with NewPoint Group Inc. to removal, and disposal of all solid waste, and help develop a residential solid waste rate the recycling of all material. setting methodology for the County, and to The County engaged NewPoint Group in perform the first formal residential rate ,Tune of 1997, to initiate a'County rate setting review of one of its municipal solid waste process and methodology. Throughout the collection haulers, Pleasant Hill Bayshore later part of 1997,the County attempted Disposal, Inc. Pleasant Hill Bayshore unsuccessfully to solicit participation from Disposal, Inc., is a wholly owned subsidiary other east and central County haulers in the of Browning-Ferris Industries of California, hopes of establishing a common County- Inc., which is a wholly owned subsidiary of wide methodology for those entities not Browning-Ferris Industries, Inc. (hereafter already under formal rate regulation. In late known as BFI-PHBD). This report August of 1997, the County engaged represents results of the first base year NewPoint Croup to conduct this first residential rate review for BFI-PHBD. generation rate review of BFI-PHBD using Our review was performed consistent the County rate setting process and with guidelines provided in the County's methodology. The County and BFI-PHBD 1998 Rate Setting Process and Methodology elected to wait and use complete fiscal year Manual for Residential Solid Waste Charges ending September 30, 1997, information for (Rate Setting Manual), which is presented this rate review. The fiscal year 1997 under separate cover. The Rate Setting information was not available until late- Manual principally establishes a process for January of 1998. submitting rate applications for rate changes BFI-PHBD provides service to the and for reviewing rate change applications. following nine geographicareas located The remainder of this introductory section is within unincorporated Contra Costa County: organized as follows: 1. Alhambra'galley(includes North A. Background of Review Lafayette) B. Goals and Objectives ofReview Review 2. gay Point C. Scope of Review. 3. CanyonlTassajara 4. Concord-unincorporated areas A. Background of Review 5, Morgan Territory BFI-PHBD has an exclusive franchise 6. Mountain View with the County to collect, and remove for disposal and recycling, all residential and 7. Pacheco commercial, and light industrial solid waste, 8. Pleasant Hill -unincorporated including recyclable materials. BFI-PHBD areas/Clyde has a twenty year franchise with the County, beginning with an effective date of August 1, Town of Rodeo. 1995, and ending July 31, 2015. The County NewPoint Group Paige 14 ................. _ __... __ ........ . _ _ .. ..... ...._.._. ......... -..._..._ .... ......... .................. ............. . ......... ................ .............................................. i.introduction and Background Exhibit 1-1 on the following page, allow a reasonable profit to the hauler. provides a map of these nine service areas. However, this profit level is not guaranteed. Most of these nine geographical areas have different rate structures which offer unique services and different rates. The array of C. Scope of Review service types include on-property service The scope of work for this project is options, Senior rates, mini-can rates, and based on requirements of the rate setting varying degrees of multiple can services. process which is documented in the Rate Exhibit B-I in Appendix B, summarizes the Setting Manual. The base year process rate structures for these geographic areas as describes eleven(11) steps, seven(7)of of January 1998. For purposes of this which are the responsibility of the County. report, North Lafayette is considered part of BFI-PHBD is responsible for the other four Alhambra Valley, and Canyon and Tassajara (4) steps. are combined. NewPoint Group assumed the role of the All waste collected from unincorporated "County" in the rate review process. We County areas is disposed of at the Contra completed the following activities during the Costa Solid Waste Transfer Station and course of our review: Recovery, a related party to BFI-FHBD. ❑ Verified that BFI-PHBD provided The Contra Costa Solid Waste Transfer and Recovery disposes of all waste at Keller adequate information for this first Canyon Landfill, also a related party to BFI- base year rate application PHBD. ❑ Determined that data presented by BFI-PHBD in their application was B. Goals and Objectives of Review mathematically correct andconsistent The Rate Setting Manual specifies that ❑ Reconciled fiscal year 1997 the primary goal of the rate setting process financial information to a 1997 and methodology is to determine fair and internal audit equitable residential refuse collection charges which provide a reasonable profit level to ❑ Compared actual 1994, 1995, BFI-PHBD. Fairness is demonstrated 1996, and 1997 financial results through a rigorous review of BFI-PH.BD's ❑ Reviewed and assessed impacts of actual revenues and expenses. Charges also combined transfer station and must be justifiable and reasonable. landfill disposal costs There is no contractual obligation by the ❑ Analyzed significant historical County to provide the hauler with a fluctuations in major cost constitutional fair rate of return through this categories review process. Rather, the County reviews ❑ Examined the relationships between. revenues, costs, and profits as a basis for financial and operatinginformation recommended changes to residential refuse for reasonableness collection charges. Charges should be sufficient to cover costs of operations and NewPoint Groupo Page i-Z .........................-.1111'',_.. _. _ ............................................................. EXHIBIT 1-1 Browning-Ferris Industries, Inc. - Pleasant Hili Bayshore 'Disposal, Inc. Unincorporated Contra Costa County Refuse Collection Service Areas • •�:,r 'v!: �., �.�.My.�,'h:•'•'..ne;. / ,y.'ydM e � yh. .i�F:' '` '�� ��J.✓Y.•'tlj,..�:�.•,�5:�� ��ii{ }j "T'�({,�t � rM '�✓ 'f44 hl% 'pMr:'�,'"s1`1,1'X.`41'`v!:':R�'Y:i++X✓"'.�f+t+ ''�}{ iVf'k,Y/s,,.{'. by �,{ { fl i { f` 1 W7!; _ .. ....... ................ ... 3c Y ... .4. ............ IN, .............. ------------ ; . ..•x :. Pago k3 1. Introduction and Background Benchmarked BFI-PHBD against in the transition. Modifications to the rate recently published publicly-held and structure to establish a uniform rate schedule privately-held financial results so as to simplify the structure,establish a CI Conducted a survey of rates and variable can system, and incorporate profit levels in other similar additional recycling services were not part of communities. this initial rate review engagement. These additional modifications to the rate structure Our review does not represent a financial are envisioned as future steps in the audit of BFI-PHBI . The County decided to transition process. focus the first BFI-PHBD rate review on The remainder of this report addresses residential(versus commercial) solid waste the findings and recommendations of our charges. However, the County can regulate 1998 base year review of residential refuse both residential and commercial rates collection rates in the County. There are through its franchise agreement with BFI- three report sections that follow: PHBD. The County and BFI-PHBD mutually a Section II -Rate Setting Process agreed to set current charges based on O Section III -Review of Range existing rate structures and services, and Change Application for 1995 known financial results. The intent was to Q Section IV-Recommended Rate transition BFI-PHBD to a regulatory rate Change. review process, and make the company appendices to financially whole from a revenue requirement Also,there are nine(9} perspective during this first step this report. NewPalnt Croup Page 1-4 II. RATE SETTING PROCESS �, to 11. Rate Setting Process In May 1998, Contra Costa County This section also summarizes how the first Board of Supervisors adopted the Rate base year rate application was assembled. Setting Process and Methodology Manual The remainder of this section is organized as for Residential Solid Waste Fees. .The follows: manual was completed with assistance from A. Base Year Process NewPoint Group,with input from the BFI- PHBD. Prior to adopting this manual,no B. 19913 Base Year Rate Application formal rate setting process or methodology C. Interim Year Process. existed in the County. Included in the manual is a formal structure for establishing residential refuse A. Base Year Process collection charges. The County elected to Base year rates are established every focus on residential garbage and curbside four years,beginning with this first base collection of recyclable materials, and not year, 1998. The base year process requires focus its rate regulation on commercial that the hauler submit a detailed rate change charges. Residential charges represent application with the most current financial recovery of allowable costs and a reasonable audit and other supporting financial and profit to the hauler for providing refuse and operating data. curbside recycling collection services. This rate application is,carefully reviewed The manual establishes rate change and analyzed by the County. The review is policies,provides application forms, conducted in accordance with formal step-by- specifies reporting formats,and identifies step procedures specified in the manual. In required supporting documentation. the base year-residential,commercial, light Procedures for requesting,reviewing,and industrial, and curbside recycling costs are adopting residential rate changes also are combined. However,residential and specified• commercial and light industrial revenues are The process is set up to(1) encourage reported separately. long-term rate stability and mitigation of The 1998 base year rate application rate impacts to ratepayers and(2)provide an reviewed and documented in this report is incentive to the hauler to improve operations the first base year application submitted by performance so as to increase profitability. BFI-PHBD. The second base year rate Thus,annual CPI-based rate increases while setting will occur in 2001 for rates that will allowed, are not encouraged using this go into effect on January 1 2002. process. Also, there is no formal, or In this first base year rate review for conceptual,balancing account whereby 1998, a financial audit is not required by the projected revenues and costs are"balanced" County. Subsequent base year rate with actual revenues and costs. Finally, applications must include audited financial there are no retroactive rate adjustments except under conditions of party's default statements. For example, in the second base in the process. year rate application for 2002,BFI must include relevant audited financial statements Two rate change processes exist: the base year process and interim year process. Each of these processes is described below. NewPoint Groupe Page 11-1 Il. Rate Setting Process for fiscal year ended September 30, 2004. presented in the Rate Change Application Year-to-date information will be required for (Column 3). These adjusted figures were fiscal year 2401. Further, in subsequent utilized to project 1998 results (Column 4). base years,BFI-PHBD will complete and Section III of this reports details these submit a rate application to initiate this base adjustments, year rate review process. C. Interim Year Process B. 1998 Base Year Rate Application In each of the interim three years For this first base year,NewPoint Group between base years,rate changes follow a worked with BFI-PHBD to help complete its streamlined process. Interim year rate rate change application. A copy of this changes are based on the annual percentage application is provided in Appendix A. change in a composite index of the BFI-PHBD provided fiscal year ended following three items: September 30, 1996 and September 30, 1997 © Change in the most recent actual, data to NewPoint Group. NewPoint Group not forecasted, San Francisco- worked with BFI-PHBD to transfer this Oakland-San Jose Metropolitan exact financial data without modifications or Consumer Price Index, applied to adjustments to the application. This specific costs of the franchise transferred data appears in the application as hauler(i.e., costs other than "prior year" 1996(Column 1) and"current year" 1997(Column 2). tipping fees) Because this was the fuChange in tipping fees andst base year, and regulatory costs estimated to the County was introducing a new rate occur in the next interim year setting process,NewPoint Group simultaneously both reviewed BFI-PHBD O An adjustment for the franchise data and made adjustments to these data, fee,which is based on a based on the newly adopted County process. percentage of total revenues Our adjusted figures for 1997 also are generated from residential service. Exhibit II-1,on the following page,summarizes the timing of the rate setting process. Page II-Z NewPoint Groupe EXHIBIT II-1 Timing of Centra Costa County (tate Setting Processes Ems-- - Bdift Year Every 4 Y is Ban xwr 8 maths (Spa gxumt' interim Zaterim �nitn �'�`� Ix�erim Year 1 Year 2 Year 3 Year I .:WX . . Ba�C Year Application 1997 1998 1999 2000 2001 2002 2003.... Year Paye 11.3 __.._.. ............................................................ . .................................. III. REVIEW OF RATE CHANGE APPLICATION FOR 1998 _.__. ........ _.. _._._.. _ s lll. Review of Rate Change Application for 1998 This section provides a summary of Further details of this finding are provided in NewPoint Group's review of BFI-PHBD's Section C of this chapter. Fiscal year 1994 base year rate change application for 1998. and 1995 disposal expenses did not appear to We identify our findings and the impact of have this allocation issue. these findings on County ratepayers. This We also determined that not all of the section also details major categories of County areas had been included in this revenue and costs. Findings from this preliminary 1996 data set. For example, section are translated into our revenue in this first data set was nearly$1 recommendations for a rate change in million below total unincorporated County Section IV. revenue included in the final 1996 submission The remainder of the section is organized by BFI-PHBD. as follows: BFI-PHBD resubmitted revised fiscal A. Background of 1998 Base Year Review year end 1996 data incorporating NewPoint B. Review of BF'1 PHBD Allocation Group recommendations. BFI-PHBD made Methodology these same modifications to its fiscal year 1997 financial information. Fiscal years end C. Review of Revenues, Costs, and 1994, 1995, 1996, and 1997 BFI-PHBD Profits statement of operations are included in D. Components of Single Can Rate. Appendix C. NewPoint Group then worked with BFI- A. Background at`1998 PHBD to assemble the first base year rate Base Year Review change application. We transferred exact Initially BFI-PHBD submitted an revenue and expense information provided by unaudited statement of operations for fiscal BFI-PHBD into the appropriate revenue and year end September 30, 1996 to support a expense categories of the rate change rate change. NewPoint Group examined this application. We did not audit any of these preliminary set of financial results which financial results provided by BFI-PHBD. indicated that BFI-PHBD was operating at a A copy of the application is provided in $708,912 loss on unincorporated County Appendix A. Informationprovided in operations. If a rate change was granted Column 1 (prior Year Information-FY based upon this original set of data, it could 1996)and Column 2 (Current Year have a resulted in a substantial double digit Information-FY 1997)of the application is rate increase to unincorporated County entirely BFI-PBBD's. ratepayers. After inputting data into the first two Based on further examination of this columns of the rate change application, 1996 data, we determined that BFI-pHBD NewPoint Group reviewed these results for was allocating to the Courcy the full impact consistency with the Rate Setting Manual,of a loss on operations from its transfer station and landfill. This approach was County policies, and with waste management industry practices. We adjusted fiscal year inconsistent with a.policy of charging County 199?data#o reflect our review findings. ratepayers a set tipping fee{i.e., $51.24 per Information provided in Column 3 {Adjusted ton}on all County tonnage disposed. Current Year Information FY 1997) Page 01-1 NewPoint GroW Ill. Review of Rate Change Application for 1998 reflects NewPoint Group's adjustments to ❑ Danville BFI-PHBD's rate change application. Next, ❑ Lafayette NewPoint Group used fiscal year 1997 U Moraga information to project revenues and expenses ❑ Orinda for the Base Year Projected Information 1998 (Column 4). ❑ Unincorporated Contra Costa County BFI-PHBD is on a fiscal year ending (portions other than those regulated by September 34th accounting cycle. We the County's Community Development assumed for rate setting purposes that BFI- Department) PHBD fiscal year end data will approximate ❑ Walnut Creek. calendar year results. Thus, data in Columns CCCSWA-regulated areas amounted to I through 3 of the application is fiscal year approximately 35.7 percent, of total 1997 end September 34th data, while data in revenues. BFI-PHBD recently started Column 4 is estimated for the calendar year servicing these areas when it won a ending December 31, 1998, competitive bid in March of 1996. BFI- B. Review of BFI-PHBD PHBD maintains entirely separate accounting Allocation Methodology records for these CCCSWA operations. No NewPoint Group reviewed the revenues and expenses for CCCSWA areas methodology used by BFI-PHBD to allocate are allocated between CCCSWA and Non- revenues and expenses to unincorporated CCCSWA areas. For purposes of this report County areas. How revenues and expenses we can think of CCCSWA areas as a were allocated to specific unincorporated separate business. Because CCCSWA areas County areas in the past in many cases had have separate accounting systems we did not little bearing on actual rates charged to these need to review this portion of BFI-PHBD's customers. Rather, rates charged to business. unincorporated County ratepayers were The remaining fifteen(15) areas are based on other factors. For example, certain identified as"Non-CCCSWA" areas in rates are based on existing rates which were Exhibit III-1. A total of nine of the fifteen charged to customers at the time BFT-PHBD areas are the unincorporated County areas acquired a franchise. which are the focus of this review. BFI- BFI-PHBD provides waste management PHBD also serves the following six areas: services to twenty-one(21)distinct areas as ❑ Antioch shown in Exhibit M-1 on the following ❑ Benicia page. Unincorporated Contra Costa County U Castro Valley(recycling represents a relatively small portion of services only) overall BFI-PHBDbusiness. ❑ Clayton In addition to the nine unincorporated ❑ Martinez County areas that are the subject of this review, BFI-PHBD also provides waste ❑ Pleasant Hill. management services to six areas regulated PHBD also provides industrial services by the Central Contra Costa Solid Waste to various refineries and businesses in Contra Authority(CCCSWA), and six other Non- Costa County. These six non-CCCSWA CCCSWA areas. The six areas regulated by areas and the industrial business represents the CCCSWA are: 53.6 percent of total 1997 revenues. "Other NewPoint GroW Page 111-2 EXHIBIT M-1 Current BFI - P'HBD Allocation Methodology .............: ......................,,::::.::•:.:-rJ:�:�:Jri:::.:.r::{:iJ:+:i.;•;i:::,�.i::;�,%?.;iiJ},:JJ:}, ::.>:•. ::::...::.:::>:;:::;<:>�:it:F:i::J:::r:.:i:.J:: :. ...e:::n.:.:..::::::::n::.:iv. n:. .::::y::::r•ii::is}:v:is•• .. ..., ::.:.......:.::::.�nrti•J`:•iy;::;:ni;.;}•i:•}•r:./:.,J'::p':.v,.,;:.�::.J':.:.�::.:.�:::.:�.�::.�:::;:;f,•r..�:..?::.;•:::i}:::::::r:::..:•.r::'r.;v,::.•-:•.�.:v.w:;.•::.:::J:r:::.:.::. �i}Jii::??•}+}:<:?:.}'::v;::.:._.i'.i}FYr+}}}!}rJ..Si�;:;•.-:•:.-::,:...:..v:::,:r::•,..:....,ry+?}::.::..v:.:.;.:.,..::r.:.:.::•.;:•.r:r:.::.r:,.;,:.�•r::. i:}:::4:i:;:ry;ti;?.i:?•F:•:L?;:pJ%i::+:•i::,.:r.}:•}}JJi�•}:ti• : F •�J J ,.",. } .............:.:........:.... ..'��:• 14� ,,..�.....•.'. Ri:iRi�R�E:1ii7i1R116f�%��. .. Zseparatecounting ating) :.r... :r. :•:ii �.} .i • ;.;.. -:....ti.:Ji is?:� .......:%) -:J.•:i::..�•.?M/ .•�� :�i?:inS:::i<�:':<%%%::%%%::�:{:: ............:. ............ r�+y .............. ✓.... ;::}{•:i::ti::•%%%;ilii}:;ii:':i::�':'•::�; iij:i:ii:::•r:if��ii<%• • Danville • Lafayette • Morgaa • Orinda • Unincorporated Countya • Walnut Creek /Noparate Accounting Allocations) v:Y �•�::;};:'.ti:�:;:�?�.;:f:is i::{i: v'i i}:>i;%S?^;pjg!?'y`i'i:,':•r2 :`.'•ir• `:ji> i�:�i::: :i':t is is i;`y;•y;?•f`,:i•:,if«'k': • Alhambra Valley • Antioch • Bay Point • Benicia • Canyon/Tassajara • Castro Valley(Recycling) • Concord-Uninc. • Clayton • Morgan Territory • Martinez • Mt.View • Pleasant Hill • Pacheco • Pleasant Hill-UnincJClyde • Rodeo A portion of unincorporated Contra Coag County is regulated by the CCCSWA. These areas include Alamo, Blackhawk, and Diablo. ° SFl-PHBD also provides service to certain non-regulated industrial customers. Page 111-3 _.. ......................................................................................... 111. Review of Rate Change Application for 1988 Services" identified in Exhibit III-1 are Volume for each service area is primarily associated with recycled material determined using a combination of actual sales, street sweeping activities, and buyback truck weight tickets at the,transfer station, center operations. and BFI-PHBD's Route Master Distribution The remainder of this section examines Report. Laborers perform their routes and how BFI-PHBD allocates revenues and drive their trucks to be weighed at the expenses for Non-CCCSWA areas to transfer station. Trucks are weighed and unincorporated County areas. waste volumes are recorded by individual routes. The Route Master Report includes Revenues the percentage of time per route which is BFI directly assigns revenue to each of spent on a particular service area and service the unincorporated County areas. BFI's type(e.g., Rodeo-Commercial). BFI- billing system codes revenue by the PHBD s internal accounting system jurisdiction in which the customer lives. multiplies Route Master Deport percentages Typically customers are billed in advance of by the volume by route results to determine services provided. Revenue is recognized in volumes by service area and service type. the month it is earned. Results of BFI-PHBD's allocation Expenses methodology have not produced consistent historical financial results by unincorporated BFI-PHBD allocates total Non- County area. We examined unincorporated CCCSWA expenses to each area using the County area revenues and expenses for fiscal allocation.bases identified for each major years 1994 through 1997,when BFI-PHBD expense category in'fable III-1, below. was not rate-regulated. For each County Other than expenses which are assigned area, annual changes in revenues and directly, all indirect expenses are allocated expenses for fiscal years 1994 through 1997 based on volume. are provided in Appendix C. Table III-1 We observed significant changes in year- BFI—PHBD to-year revenues and expenses for each of Allocation Methodology the nine unincorporated Count areas rP Y u1c Camtoio find throughout the four year non-rate regulated Direat Expenses period. Some of these variations can be Amortization Direct explained. For example, according to BFI- Direct Labor Direct` PHBD, significant decreases in Mt. View Disposal Fees Direct and Rodeo revenues and expenses which Franchise Fees Direct occurred between 1995 and 1997 are the Indirect Fvenses result of portions of theseunincorporated Corporate overhead Volume County areas becoming incorporated. Depreciation Volume Similarly, as a result of tipping fees General and Administrative Volume Interest Expense Volume decreasing during 1995, rates were Other Operating Expense Volume decreased in Alhambra Valley, Concord, Mt. Professional Fees Volume View, Morgan Territory, and Rodeo. This Supervisory Volume explains significant reductions in BFI-PHBD ` mIdEquipment Volume disposal fees, and associated revenues, ' Based on employee time spent on a route(from between 1394 and 1995. BFI-PHBD's Route Master system) NewPolnt Group Page 111.4 ....................... ._ . ......................................................................................... . ...................................... M. Review of Rate Change Application for 1998 We did not perform a detailed review of requirement is equal to the sum of the the remainder of these year-to-year line item following. variations in revenues and expenses. We did p Total allowable costs not use trends from this four-year period as a basis for projecting 1998 base year revenues 0 Allowable operating profits and expenses. U Total pass through costs. Because BFI-PHBD was not rate- A summary of the revenuerequirement is regulated during the 1994 through 1997 provided in lines 27 through 30 of the rate period,we did not pursue further explanation change application in Appendix A. for area specific variations. However, in the next base year under the new rate regulated A summary ofthirteen',NewPoint Group environment, BFI-PHBD must explain year- findings are provided in Exhibit III-2, on to-year increases in revenues and expenses the following page. Findings are shown as which exceed the Consumer Price Index adjustments to the revenue requirement in (CPI), or changes which are negative. 1996, 1997, or 1998. However, these adjustments in total ultimately are reflected We examined total unincorporated in the base year 1998 revenue requirement. County financial results(i.e., all nine areas As shown in Exhibit III-2 the 1998 revenue combined)against a basic operating metric requirement is$541,530 lower as a result of of tonnage to determine reasonableness. adjustments to BFI-PHBD revenues, costs, How total unincorporated County figures and profits. Had these adjustments not been compare with an operating metric such as made unincorporated County rates may have tonnage is more relevant than area specific increased as high as twenty percent. The costs and revenues because rates are set remainder of this section details each of our based upon BFI-PHBD's revenue thirteen findings. requirement for total County operations. For fiscal 1997, we determined that Revenues without any NewPoint Group rate setting 1, Residential Revenues adjustments to 1997 data, expenses were about 3.7 percent higher than the NewPoint Group projected residential unincorporated County's relative share of revenue as of January 1, 1998 using the most tonnage, and revenues nearly 4.8 percent recent rate structure and number of accounts lower than the relative share of total by rate category provided in Appendix B. tonnage. NewPoint Group review findings, Residential revenue is projected to be which are described in the section C of this $1,531,601. chapter, align costs and revenues to Net Impact: essentially correct this disparity. C. Review of Revenues,Costs, [Increase in 1997 revenue requirement of and Profits $60,742] This section describes NewPoint Group 2. Recycling Revenues adjustments to the base year rate change In the early part of 1998,BFI-PHBD has application. Adjustments are expressed indicated that recyclable material scrap prices based on their impact to BFI-PHBD's are sufficient only to cover the costs of revenue requirement. The revenue transporting this material to a processing Page 111-5 NewPoint Group ill. Review of Rate Change Appiicattton for 1998 Schedule of NewPoint Group Findings .:...:.:::.:..:..:.:.. f moi:S.+•::h¢iii r.?:�rii+f Fii F i :::?•:::F.•............J.....•.lJ::::::r. � n•.::r::•i:..iJ:,.;rr.:{':':•:is::::. ..:...::.:::::.::..::::..:.:.:.:.:•..... =F.F.. -:•F::l.'F,•:::�'r:::J. ifr:?•}:??!{•i:...n..........n.:riF.:?i'F.-:.�•l•i:;: .. ................... .,.,.,..:.;;:.... 'i:::ii:;;•:::r;ii}ii:=::?v}::•}i}✓.y:i}vii}}}}•}:.;::.•:;..}:•}:}:•}i i::i:•;,r ..... .. •}:.i:,:::ii�.e'Si: .. ... n,. r:i•i:':;:i,:i:h'L;:::v.;..;J:.:..:'....:•;;•.iii::•..::•::..::.:....... r. •.......J... .. ...:.:....i.....;;•r.:r?r .J :_.- :.:::.n::•}...::}}i::•::.},:•v;}'.::r:ism:::;:}:::}::.v;..}.?.^:v:•::rr:;2:::'r'.•'i.?i::} ::•$::::::}: i5 ::•:}}iii: "{i:;`v i}ii i::::ii:-iii'i•:;:i:4i}:F: y� 1 Residential Revenues $ 0 50,742 $ 0 $ 50,742 2 Recycling Revenues 0 0 29,537 29,537 3 Refinery Revenues 107,490 107,490 4 Direct Labor 0 0 0 0 5 Tipping Fees- 1996 (550,000) 0 0 (550,000) 6 Tipping Fees-1998 0 0 (22,185) (22,185) 7 General and Administrative 0 (141,731) 0 (141,731) Costs 8 Amortization 0 (202,237) 0 (202,237) 9 Interest Expense 0 (203,727) 0 (203,727) 10 Income Tax Expense 0 93,003 0 93,003 11 Franchise Fees 0 0 132,409 132,409 12 Refinery Expenses (93,722) (93,722) 13 Allowable Profit 0 0 348,891 348,891 Total $ (650,000) $ (393,950) $ 502,420 $ (541,530) NewPoint GroW Page 111-8 Ill. Review of Rate Change Application for 1998 facility. Thus, the recycled material sales may be adjusted, even if wages increased five figure(which is net of transport costs)on a percent,the overall County revenue year-to-date basis for 1998 is $0. We requirement would only increase about one averaged the amount BFI-PHBD received in percent. We recommend that BFI-PBBD fiscal year 1997 of$59,074, and the submit a rate change for an extraordinary expected $0 for fiscal year 1998(based on cost increase if labor costsmaterially year-to-date results), to project $29,537 for increase the revenue(consistent with the calendar year 1998. policy which is specified in the County's Net Impact. Rate Setting Manual). [Increase in 1998 revenue requirement of Net Impact: $29,537] [No impact on revenue requirement] 3. Refinery Revenues 5. Tipping Fees-- 1996 For rate setting purposes, the County and In the first set of data provided to BFI-PHBD agreed to remove the refinery NewPoint Group, BFI-PHBD included $1.87 business(e.g., Shell Oil)from rate million in tipping fees for 1996. BFI-PHBD regulation. This refinery business is indicated that it allocated the loss for its generally in the commercial and light transfer station and landfill operations to the industrial sectors. We have reduced both County. Prior to final submission of financial revenues and expenses [see Finding#12]to data for 1996 and 1997 based on NewPoint account for this policy. Group's recommendations,BFI-PBBD Net Impact: updated tipping fees to reflect a uniform tipping fee charged to unincorporated [Increase in 1998 revenue requirement of County ratepayers on all tonnage collected. $107,490] For 1997, BFI-PHBD calculated tipping fees charged to County ratepayers using the Expenses published gate rate of$51.24 per ton. As a 4. Direct Labor result,total tipping fees for 1997 are$1.22 million, nearly 33 percent lower than the Labor costs declined by nearly six percent initial $1.87 million 1996 figure. between 1994 and 1997, however labor costs are at an acceptable percentage of total costs Net Impact: (at just over 21 percent). Essentially, we [Reduction in 1996 revenue requirement of believe that labor costs remained flat over the approximately$650,000] period. 6. Tipping Fees- 1998 A significant factor in evaluating future Tipping fees charged to County ratepayers labor costs will be the union labor contract reflect costs of operating the Contra Costa which was up for renewal in February, 1998, Solid Waste Transfer Station and Recovery Currently, BFI-PHBD is negotiating with (CCTR)and the costs of the Keller Canyon labor unions over aspects of the contract. Landfill. The published gate rate charged to We are unable to obtain results of these labor public self-haul customers for this facility is negotiations prior to currently$51.24 per ton(up to one ton). completion of this rate review. Though we do not know to what degree labor wages Page 111-7 NewPoint Group M. Review of Rate Change Application for 1998 Treatment of tipping fees for this first Using this 13.2 percent average as a cap for generation base year requires a balance the combination of Corporate and Local between fairness to the ratepayer and to BFI. G&A for 1997, the adjusted Corporate and Tipping fees typically are approximately one- Local G&A amount equals i 13.2 percent of third of the costs of a waste hauler's business. total 1997 revenues of$3,817,132, or If these costs are treated as a pass-through to $503,861. The difference between our use the hauler, profit levels can be reduced such of revenue versus costs to calculate G&A is that there is no incentive to operate the profit. By using the G&A cap as a percent business. of revenue rather than costs, we are allowing Because the County is essentially moving BFI-PHBD a slightly higher amount of G&A from a non rate-regulated, to a rate-regulated than our survey data would suggest. environment, we recommend that for this first Net Impact. generation review the County establish a cap [Reduction in 1997 revenue requirement of on tipping fees to be allowed with profit at $141,731] $43.08 per ton. We recommend that the County allow disposal fees in excess of$43.08 8. Amortization per ton as a pass through expense. Support Consistent with the waste management for this figure is in BFI's current preferred industry, we recommend that the County Central Contra Costa County tipping fee of disallow amortization of franchise purchases. $43.08 per ton. By capping tipping fees with The operating ratio is designed to provide a profit at $43.08 per ton, the revenue return to the hauler sufficient to compensate requirement is reduced by the incremental BFI-PBBD for its investment in the business. amount of profit which would be allowed on tipping fees above$43.08 per ton. Net Impact: Net Impact: [Reduction in 1997 revenue requirement of [Reduction in 1998 revenue requirement of $202,237] $22,185] [Equal to $199,664 (line 11 of 9. Interest Expense application)]=0.90— [$199,664] BFi-PHBD is charged interest in 7. General and Administrative Costs intercompany balances at a rate of eleven percent. We recommend that the County Rather than consider corporate and local disallow this interest expense. Consistent general and administrative(G&A)costs with the waste management industry, the separately, we aggregated the two, and operating ratio is typically used on a before evaluated the reasonableness of total G&A interest and tax basis. The operating ratio costs. The combination of Corporate G&A allowed is intended to provide the hauler ($174,031) and Local G&A($471,561) with sufficient returns to pay its debt and proposed by BFi is equal to $645,592, or equity holders. In cases'where the operating 16.91 percent of 1997 BFI revenues. From ratio used is on an after interest basis,the NewPoint Group's research on eight operating ratio often is adjusted upward(i.e., separate hauling companies over a recent the hauler earns less profit)to account for three-year period shown in Appendix G interest as an allowable expense. (sixteen separate data points), total G&A Disallowing interest expense also costs ranged from 10.8 to 16.4 percent of eliminates artificial incentives for the hauler total costs, with an average of 13.2 percent. NeWPoint C roupa Page 111-8 Ill. Review of Rate Change Application for 1998 to finance its operations using either debt or recently,these sanitary districts charged equity financing. In other words, a customers franchise fees and set rates. As a company's financing decisions are reaction to the increasing need for the independent of the amount of profit earned. County to monitor AB 939 diversion Net Impact: requirements, the County elected to exercise [Reduction in 1997 revenue requirement of its franchise authority for these two areas in $203,727] 1995. The County cited County Ordinance 91-31, which requires that providers of 10.Income Tax Expense waste handling service in the County to We recommend that the County disallow obtain franchises from the County. This income tax expense. The operating ratio is action resulted in lawsuits between the typically provided on a pre-tax basis. To County and each sanitary district: Mt. View allow income tax expense would Sanitary District v Boars'of Supervisors, unnecessarily add complexity to the rate County of Contra Costa, and Rodeo Sanitary review process. Because BFI-PBBD had a District v. Board of Supervisors, County of benefit provision for income tax in 1997 of Contra Costa. In January'1998, the Solano $93,003,this finding results in an increase in County Superior Court ruled that the County the revenue requirement. "exercised valid police powers" under Net Impact: Ordinance 91-31. The sanitary districts have [Increase in 1997 revenue requirement of appealed these rulings. However, the $93,403] County has elected to move forward with its franchise authority and collect franchise fees. 11.Franchise Fees In support of this franchise fee, the County Base year 1998 will be the first year that conducted a survey of franchise fees charged by the County collects a franchise fee from BFI- other neighboring jurisdictions. Results of this PHBD. The franchise fee will equal five survey are provided in Appendix I. Franchise percent of gross revenues. Gross revenues will fees generally are charged on a percent of gross include all residential, commercial, and light revenue basis, and in almost all cases are equal industrial refuse and recycling revenue. to, or greater than, 5 percent of gross revenues. Franchise fees will be a pass through expense Net Impact: which will not earn profit. For 1997, franchise fees are estimated at [Increase in 1998 revenue requirement of $132,449] $195,279. In the past, BFI had paid franchise fees to(1)the Central Sanitary 12. Refinery Expenses District(for the Pleasant Hill unincorporated For rate setting purposes,the County and area), (2)Mountain View Sanitary District, BFI have agreed to remove the refinery and (3)Rodeo. A total of$62,870 was paid business(e.g., services to Shell Oil)from to these three entities in fiscal year ended rate regulation. This refinery business is September 30, 1997. These franchise fees of generally in the commercial and light $62,870 are no longer allowed in the rate industrial sectors. base. However, BFI-PHBD will continue to remit these fees to the entities above until the Net Impact: appeals process is complete. [Reduction in 1998 revenue requirement of Rodeo and Mountain View historically $93,722] were regulated by sanitation districts. Until Page I11-9 NewPoint tlroW __. . ._. ......... ............_. .. _ �-D-tem 111. Review of Rate ChangeApplication for 1998 Profit U Laidlaw 13.Allowable Profit U Mid-American Waste Systems We recommend the County use an ❑ Philip Environmental operating ratio ranging from 88 to 92 U Sanifill percent, with a target of 90 percent for all of its base year rate setting. In this first U United Waste Systems base year, we will establish the operating U USA Waste Services ratio at 90 percent before interest and tax (EBIT). This 90 percent operating ratio is U Waste Management International equivalent to an 11.1 percent return on U Western Waste Industries operating expenses. The operating ratio is U Waste Management Technologies. the most commonly used method for refuse rate regulation. Our recommended Table M-3, shows that the weighted operating ratio is supported by recently average operating ratio on an EBIT available information for publicly-held (earnings before interest and tax)basis companies, privately-held companies, and between 1994 and 1996 was 86.8 percent, neighboring jurisdictions. while the average operating ratio during As support for a target operating ratio the same period was 93.7 percent, The of 90 percent for BFI-PHBD we compared data for this period indicates that a few recent financial data available for public larger companies performed better than the and privately held waste management average company, thus decreasing the companies. Because available financial weighted average. Operating ratios data is for combined collection, increased for 1996 alone(i.e., profit levels transportation, and disposal operations, the decreased)for the weighted average corresponding operating ratios are lower measure. The weighted average operating than businesses providing exclusively waste ratio in 1996 was 94.1 percent, and the collection services(i.e, without disposal). average operating ratio was 90.2 percent. Operating ratios for collection operations Due to the recent significant acquisition alone are generally higher than for disposal and merger activity in the waste operations alone because disposal management industry, some of these companies require greater returns due to companies have merged or been acquired the significant environmental and by other companies. Namely,Philip and regulatory risks of operating landfills. Sanifill were acquired by USA Waste. We reviewed financial information for Likewise,Laidlaw was acquired by Allied twelve publicly-traded companies between Waste Industries. However, we believe 1994 and 1996. The twelve companies that the historic data for these companies included: represents the best available information for publicly-held companies. At the time U Allied Waste Industries of this writing, USA Waste Services plans U American Waste Services to merge with Waste Management U Browning Ferris Industries International. NewPoint Group* Page 111-10 Ill. Review of Rate Change Appiication for 1898 Table III-3 Table M-4 Publicly-Meld Robert Morris& Associates Waste Management Companies Operating Ratios' Average Operating Ratios' (1994 to 1996) (1994 to 1996) l � f Fes/ i'•i ' F F 1994 300 90.7% 1995 325 90.2% 1994 to 12 86.8% 93.7% 1996 304 90.7°1° 1996 ' For SIC Code 4953,Refuse Systems,on an 1996 12 94.1°10 90.2°10 earnings before interest and tax basis(EBI*1). On an earnings before interest and tax basis In our survey of other similar (E$rI)' jurisdictions provided in Appendix F, the average operating ratio for neighboring We also reviewed data published by jurisdictions is currently 87.4 percent. Robert Morris& Associates(RMA). RMA However, non-CCCSWA entities averaged publishes its"Annual Statement Studies" for 90.1 percent. The tower CCCSWA an array of industries, including privately- operating ratio of 85.2 percent is based on held waste management companies. RMA that jurisdiction not allowing profit on data is for companies doing business as tipping fees. refuse systems(SIC Code 4953). These are systems"primarily engaged in the collection Net Impact: and disposal of refuse by processing or [Increase in 1998 revenue requirement of destruction or in the operation of $348,891] incinerators, waste treatment plants, landfills, Results of NewPoint Group findings are or other sites for disposal of such materials." summarized in Exhibit III-2, on the following This data"does not include companies page. The total projected revenue requirement primarily engaged in collecting and for basic year 1998 is $3,905,588, as transporting refuse without disposal." As summarized on Exhibit III-3, on the next page. shown in Table U14, the operating ratio, on Rather than as high as a twenty percent increase an EBIT basis, of over 300 companies (as might have occurred without NewPoint surveyed in each of the three years from Group adjustments), we believe a 7.97 percent 1994 to 1996,ranged from 90.2 to 90.7 increase in unincorporated County rates is more percent. reasonable. Implementation of this rate increase is discussed in more detail in the following chapter. Page 111-11 Newpoint Groue .................................... ...............................I..................................... ................................................... ................................ EXHIBIT 111-3 Summary of Adjustments to BFI-PHBD Revenues and Expenses (1997 and 1998) OF11 NewPoInt NewPoInt Prior to Group Group Franchise Projected Adjustments Adjustments Adjusted Adjustments Foes Base Year (1997)2 (1997) 0997) 0998) (1998) (1998) Revenue Residential $ 1,592,343 (60,742) $ 1,531,601 $ 0 $ 0 $ 1,531,601 ------------------ ------------------ --------- ------------------------- --------------- ----------------- Commercial and Light 2,165,715 0 2,165,715 (107,490) 0 2,058,225 Industrial .................. .....................................................I---------------- ----------------- Recycling 59,074 0 59,074 (29,537) 0 29,537 Total Revenues $ 3,817,1321, (60,742) $ 3,756,390 (137,027) $ 0 $ 3,619,363 Allowable Expenses Direct Labor $ 833,712 $ 0 $ 833,712 $ 0 $ 0 $ 833,712 ..................... --------------- ----------------- ---------------------------------- ----------------- Tipping Fees(up to1,215,830 (199,664) 1,016,166 0 0 1,016,166 $43.08 per ton) Corporate and Local 645,592 (141,731) 503,861 0 0 503,861 G&A Trucking and 508,933 0 508,933 0 0 508,933 Equipment ------------------ ------------------ ---------------- ................ ................ ................. Depreciation and 542,726 (202,237) 340,489 0 0 340,489 Other Operating Costs .................. .................. ................ ................ ---------------- .._.._...-------- Franchise Fees 62,870 (62,870) 0 0 0 0 ------------------ --------------- ----- ---------------- ---------------- --- ............. Services Provided to 1 30,577 0 30,577 0 0 30,577 the County Less Refinery 1 0 0 0 (93,722) 0 (93,722) Expenses .................. .................. .............................. .............. ......... ------- Interest Expense203,727 (203,727) 0 0 0 0 ------------------ ------------------ ---------------------------------- ---------------- ----------------- Income Tax Expense (93,003) 93,003 0 0 0 0 (Benefit) Pass Through Expenses County Administrative 0 0 0 0 21,738 21,738 Fee .................. .................. ................ ---------------- ------ --------- ----------------- Tipping Fees(in 0 199,664 199,664 0 0 199,664 excess of$43.08 perton) Franchise Fees 0 0 0 0 195,279 195,279 ------------------ ------------------ ------------- ------------------------------------------------------- Total Expenses $ 3,950,964 (517,562) $ 3,433,402 (93,722) $ 217,017 $ 3,556,697 Profit(Loss) $ (133,8327 N/A $ 322,988 N/A N/A $ 348,891 Total Revenue N/A N/A N/A N/A j N/A $ 3,905,598 Requirement Includes the impact of the 1996 reduction in Upping fees of approximately$650,000(Finding#3) These figures tie to the Summary of Revenues and Expenses for Fiscal Year End September 30, 1997 (Exhibit C-1). NewPofnt Group® Page 111-12 ....................... 17) . (0 Ill. Review of Rate Change Application for 1998 D. Components of Corporate and Local General and Single Can Rate Administrative Costs include accounting, There are a number of cost components office space rental, utilities, office supplies, which are included in rates for residential and legal services, insurance, postage, etc. for commercial service. Using the single can BFI-PHBD. These costs are identified as rate as an example, the pie chart in Exhibit Corporate and Local General and III-4 on the following page, shows the major Administrative Costs(Line 3), Services components of the projected 1998 rates, and Provided to the County(Line 6), and County the relative costs of each component. Administrative Fees(Line10)of the Reference is made to the base year rate application. change application included in Appendix A. Trucking and Equipment includes Categories of costs are described below: depreciation and leases oftrucks, fuel Direct Labor includes compensation of the expense, licenses, parts,tires, and associated repair and maintenance expenses. These waste removal staff; including regular time, costs are identified as Trucking and overtime, payroll taxes, and associated benefits. This category corresponds to Equipment(Line 4)and Depreciation and Direct Labor(Line 1)of the application. Other Operating Costs(Line 5)of the application. Tipping Fees include all charges for the Profit is any revenue which exceeds disposal of solid waste at a landfill or transfer expenses(allowable expenses plus pass station, which are currently set at $51.24 per through expenses). The operating ratio ton. A cap on the allowable expense portion method is used to determine allowable profit, of tipping fees is set at $43.08 per ton. The as discussed in the profit analysis section of remaining fees between$43.08 and $51.24 this report. Profit is shown in Line 9 of the per ton are a pass-through expense. These tipping fees also include transportation costs application. from the transfer station to the landfill. This County's Franchise Fee is 5.0 percent of category corresponds to Tipping Fees with total residential/curbside recycling, Profit (Line 2)and Tipping Fees without commercial, and light industrial revenues. Profit (Line 11) of the application. Use of these funds includes development of programs and compliance'with State waste reduction requirements. Franchise fees are shown in Line 23 of the application. a Page 11143 NowPoint Group® EXHIBIT III-4 Components of the Single Can Rate Franchise Fees Profit 5% 9% "tfw` , Direct Labor SS S e5 21% .'h#aY.r5r'b'ti' t•}{2 R4R h' tM: 7}, ,sfi 5 R ¢ s tG7 d{ R4 0r� ''rf k�a•,:k t{:a 9'}b 4'};f}s��r':.r 'rxr}:9:.aS#;,. ;y; `:'y,{{4.,•r,•;r.;':,5}r.,}+R�Radfi'h{yr.. •�S4v'v '•'rt. .}x}7 f a 7Rr?' R..4';t,•k•�:;},.x+.r,.;a{#r'.{tar.,+.+.•Y,,:;�is��•:":�•;;•::r,.;tr,{•• E<S7v 7'•}✓rar A:857 'rS:'+.'•{:•$'•S'' +f:>}iY.+,:;'v,:S',•:•�,:;i+}r}}7�v,hv ;{S}X:fi`r;:;t�r,:rhvalry;::h'7�v:3�+,• +.S''S'.7S a57}''{ :{•t}'�'ry 7`•}:•?I7+ 475;•: ''nS+ vr{': D:7S..:::SS+F,vSS.•5,.,., ;•:;'R,.,.k.` {.d'v7,7.:r•%7a;.:. ..$}v✓.'frfY,.SS::afy:+S 'r`,}4+•:{{S✓,: N Trucking an :r.at Equipment 21% Corporate and Tipping Fees 31% Luca! G&A 13% Trucking and Equipment Direct Labor L' J Prat Tipping Fees L Franchise Fees OM Corporate and Local G&A Pape 111-14 IV. RECOMMENDED RATE CHANGE IV. Recommended mate Change In the previous chapter we detailed A. Recommended Residential NewPoint Group's findings from our review Rate Change ofBFI-PHBD's 1998 base year rate change As summarized in the previous chapter, application. We presented these findings and in the base year rate change application, based on the impact to BFI-PHBD's 1998 the total projected revenue requirement for revenue requirements. In this chapter we this first base year 1998 is$3,905,588 (Line provide our recommendations for a 30 of the application). However,total residential rate change. The revenue projected 1998 residential, commercial, light requirement from the previous chapter is industrial,and recycling revenues are now translated into the real impact on $3,619,363 (Line 21). residential rates. We identify the timing of previous rate Based on the projected revenue changes by unincorporated County areas and requirement and revenues, and assuming no changes in rates, BFI-PHBD will operate explain why rates are increasing. Wechanges a total shortfall in 1998 of$286,225 describe our recommended approach for (Line 24). From a revenue requirement implementing this rate increase after perspective, all residential, commercial, and considering a number of alternative light industrial rates would need to be approaches. The current overall rate increased by 7.97 percent'..[28+6,225 structure is complex with large variations in 3,589,826 (Line 25)]to make BFI PHBD rates across geographic areas. whole in calendar year 1998. Implementation of a rate increase must be fair and equitable to all ratepayers. B. 'Why hates are Increasing? We also compare proposed new BFI-PHBD has not had a rate increase to unincorporated County rates with those account for inflation, for most charged in other similar jurisdictions. Finally, unincorporated County areas, dating as far we provide the County and BFI-PHBD back to 1990 and 1991. BFI-PHBD reduced additional recommendations resulting from rates recently to account for decreases in our review. This section is organized as tipping fees from over$75 per ton to $51.24 follows. per ton at the Contra Costa Solid Waste A. Recommended Residential Rate Change Transfer Station. The most recent rate changes for each County area are B. Why Rates are Increasing? summarized in Exhibit IV-1,on the following page, for 32 gallon can service. C. Implementation of Rate Change This exhibit shows rate reductions in 1995 for Alhambra Valley, Concord, Morgan D. Comparison of Rates and Services to Territory,Mt. View, and Rodeo. The Other Jurisdictions exhibit also identifies dates of previous rate increases in early 1990 and late 1991 for Bay E. Other Recommendations. Point, Pacheco,and Pleasant Hill/Clyde. N"Point GroW Page IV4 EXHIBIT IV-1 Historical Rate Changes in Unincorporated Centra Costa County Areas r z r.n,r .r.. ........................F.:;•:.::i:•r:•:v:•X.•:r:.•:::...:.:....x:•n•::..::::.:'?.:•::•r.:.:r.rr,:.}Y:?sS'F'}�:'�}f.•✓r•F• rx::':•`•:'?i^'••:::...x:r. z.,....r>v:::.x:::::n.....rn:.r.f.•::r::•..i,•::..:,. 3 v.}, r:r.,.;.};v}:f}i: ::....:r.,............r......... .}. •w.:r::r.•::::::v:,::•.!}}:•?::•:::::.•:.:�:•:::::::::::::w.:.:....•;.:.•:•::u:v:::::::::..•::::::.:..::..:..::w}r.•r:.n;•...:.•:v,r.r:.;..:r:r< :}.. -n.•.{:•::::... .....::.:v:.........:.::•::.�.Yr::_:.:•.:x:.::w:•:r::.r .::r:r•...::...; .r.•,.r{., r..:..•.{.f .,:.yv.�v:::.:L•rn 4:i�•}}::::::i:r:::::r::::::;v•:i rt�iF:':.++:.•:.•Fr..'_-_-:i{:.C- ,;?.;.5'.}v.;.:•::::•}:.,r.:..}}:•::::.:�::::::r:...:::::::.�:::rv•v:.... ......4�....... ......... .rY r.•T:•r .rF r.::.••:::.z...r....:.........:e..•.:4 p.,•:�:;:;.r.:1.?-:i+f •:v n •ii?:.:}}:}:i: :.}:....:::.,}}:• }....;...:_::•..:•;.:.:.:�.:.3';T,:% ;a • .r ..4.,.r...: ._:...r..............:. ,: Sr..:. ..................r...:. .... .n:r}::::::•, .:.;r.ry:f;r.,r.,rr...b.�i•.{.::rn:?�;i•:..•:•";J?•.:� ..� .., ::.....r.........r.,r......r.rr}r rr r. ...u..z...r�r.............n:.•:}. ......,.,.....: ..;.: :..x•}.z...,r If. .a....... ........ r.:r. .::::::::::::. .:r..:,:.r.::......•;.:}}n..:......,r..:...•.z•l:;r,fr:.}• ' r.t"r•: •..}.Y.,x.yr:.i-....i:v:.•:::::..w:r:::.:::.:r:rr:r:.•.J:.' F•:'. L.L•::}>}:{:;i.;.�;.,}., .,i+}?i•}:�$.:.;v..:::::::: :,�'... R.. }pr l:YF;r Alhambra Valley $18.00 4/1/95 $21.50 8/1/94 -16.28 Bay Point $16.75 9/1/91 $10,04 4/l/85 67.50 Canyon' $18.93 3/1/96 N/A N/A N/A Tassajare $16.74 3/1/96 N/A N/A N/A Concord -Uninc. $18.40 2/1/95 $19.00 11/1/94 -5.26 Morgan Territory $18.00 2/1/95 $21.50 8/1/91 -16.28 Mountain View $17.83 4/1/95 $18.55 7/l/91 -3.88 Pacheco $15.15 2/1/90 $14.15 8/1/89 7.47 Pleasant HilUClyde $15.15 2/1/90 $14.15 8/1/89 7.47 Rodeo $16.64 2/l/95 $18.40 1/1/94 -9.78 'New as of March, 1996. Page IV-2 _. .... . ......... .......1.11.1 _ IV.Recommended Rate Change Between 1992 and 1997, the annual An argument could be made that the percentage change in the Consumer Price County should allow BFT-PHBD a rate Index, San Francisco-Oakland-San Jose change as high as 12.5 percent based solely region(CPI)increased an average compound on this historical change in CPI. However, rate of 2.38 percent per year, as shown in due to inconsistency in historical time series Table IV-1 below. On a compounded basis financial data, and because BFI-PHBD has the CPI increased 12.5 percent over this five- not previously been rate regulated, we year period. BFI-PHBD, in its current cannot determine that(1)existing rates are franchise agreement with the County aligned with the costs of service, and(2) (effective in 1995)is allowed to increase whether historical BFI-PHBD costs have rates by an amount up to the full CPI, changed consistent with the CPI. We believe without a rate change application submitted that a 7.97 percent rate increase is and reviewed by the County. reasonable, and represents the result of Table IV-1 shifting BFI-PHBD to a more accountable, Consumer Price Index rigorous, and formal rate setting process and San Francisco-Oakland-San Jose methodology. All-Urban Consumers Other reasons why rates are increasing (September 30 Year End) are(1)that controllable operating costs were A escalated in the base year, (2)a prescribed allowable profit level of 9U percent was temc�ad I997 P Yr tette x►f pd implemented, and (3)unincorporated County erM, t franchise fees were initiated. .. 1992 143.7 1993 146.5 1994 149.4 1995 152.3 1996 156.3 1997 161.6 Page IV-3 NewPoint Group IV.Recommended Rate Change C. Implementation of Rate Change identified six(6)alternative ways to NewPoint Croup considered four factors implement the proposed rate change: in assessing how to implement the 1. Absolute change in rates - spread the recommended unincorporated County rate total revenue requirement equally across increase. First, the current unincorporated the number of ratepayers County rate structure is complex. This rate 2. Percentage change in rates- apply the structure has multiple service types across 7.97 percent rate change equally across the nine geographic areas. Rates vary all ratepayers' current rates significantly in different areas for the same service. For example, 32 gallon rates are as 3. Absolute change in rates across each low as$15.15 per customer, per month, in rate category- spread the total revenue Pacheo and as high as$17.83 per customer, requirement proportionally over the per month, in Mt. View. Even larger number of customers in each rate differences within a rate category occur for category(e.g., 32 gallein) higher service levels. For example, in Bay 4. Judgment - apply the rate change on a Point one 95 gallon cart is$19.75 per judgment basis with the intent of customer, per month, but in Rodeo that same equalizing rates for similar services 95 gallon cart is$26.55 per customer per provided month. 5. Unit pricing-incorporate the rate Second,the County has expressed an change into a rate structure that results in interest in simplifying the current rate each additional can of service costing the structure while incorporating service changes same as the first can(i.e.,the one can to help meet AB 939 goals. At a minimum, rate multiplied by two would equal the the County in the future would like to move two can rate) toward uniform rates charged to customers in the same rate category. The County also 6. Variable can system -incorporate the would like to implement a variable can or rate change into a new rate structure that unit pricing rate structure. Both BFI-PBBD provides incentives for customers to and the County also expressed interest in reduce waste generation, adding a yardwaste program to increase Next we evaluated each of the six diversion. alternatives and ultimately selected Third, we wanted the rate change to be Alternative 1. Below, we describe reasons explainable to the ratepayers. Because this is why the other five alternatives were not the first formal rate review, unincorporated chosen. County ratepayers will not be familiar with Alternative 2 continues to perpetuate such a process. Adding complexity to the existing differences in rates within a rate implementation of a rate change might category. Because the rate structure has unnecessarily complicate the process. rates which vary significantly by areas for the Fourth, the rate change must be equitable same service,this alternative was less to ratepayers. An overriding goal was that desirable. Alternatives 3 and 4 are difficult no one ratepayer should be treated to explain, require extensive support, and differently than another ratepayer. As a involve arbitrary judgment. result of these factors,NewPoint Group NewPoint Group Page 1V-4 IV.Recommended Rate Change Alternatives 5 and 6 result in dramatic $1,653,670 (the projected 1998 changes to the existing rate structure. Rate base year residential structure changes cause potential shifts in revenue of$1,531,601 service levels demanded and associated (Line',14)multiplied by customer behavior. The County and BFT- the percent change of PHBD agreed that without a separate 1.0797) additional study, the rate structure should Less 1 531.601 (Line',14) not be changed now as part of this first base year rate setting process. However, both Equals $ 122,069 incremental change in parties agreed that the rate structure should residential revenue be simplified within a year after completing requirement this rate review based on further review and Next, the incremental $122,069 revenue study. requirement is divided by the number of We recommend the County implement residential customers of 6,720, and divided the rate change using Alternative 1. by 12 months per year, to obtain a$1.5112 Alternative 1 is the easiest to understand and customer. per month increase. The proposed is most equitable to unincorporated County rate structure with this $1.51 absolute rate ratepayers. This alternative is fair to all increase is shown in Appendix H. ratepayers because it spreads the revenue This absolute rate change of$1.51 per requirement equally over each ratepayer. customer per month will result in a Alternative 1 also allows the County to bring percentage increase in individual rates rates closer together within each rate ranging from as low as 2.5 percent to as high category. For example, if a$15 rate for a 32 as 14.5 percent dependingupon the service gallon container in Area A increased $1 to level and the area. Percentage rate changes $16, a$16 rate for a 32 gallon container in for typical service levels are shown in Table Area B would also increase$1 to$17. IV-2: Before the rate change the difference in 32 gallon rates was 6.7 percent(($16- Table IV-2 $15)/$15). After the rate change the Proposed Percent Changes difference in rates is 6.3 percent ($17- in Average Rates $16)/$16. Alternative 1 has the effect of For Typical Service Levels bringing the 32 gallon rates in Areas A and B closer ose together. g er. After selecting Alternative lw e ..:32 gallon :. :.; 16.28 .'.9.3%:. determined the dollar value of the monthly increase in the residential rate. We calculated °n �t 7.2% the incremental change in the residential 95 gallon 25.59 5.9% revenue requirement. This change in residential revenue requirement is equal to $122,069 and is calculated as follows: Page IV-5 NewPoint Group IV.Recommended Rate Change In accordance with the franchise $825,317), and a$7,229 increase for Rodeo agreement, residential rates charged by BFI- corresponds to a 0.87 percent change PHBD represent maximum rates. We have ($7,229 divided by$834,729). calculated the rate change for BFI-PHBD to In summary the rate changes on a percentage meet the revenue requirement under the and absolute basis by area are. assumption that BFI•PHBD will charge these maximum rates. If BFI-PHBD charges rates Bay Point 8,52 a rcenrease(7.97 below these maximum rates and fails to meet percent plus 0.55 percent), or its revenue requirement, the County is not a$1.53 per customer per responsible for making up any future revenue month increase inadequacies resulting from lower than Rodeo 8.848.84 RercenAin grease(7.97 maximum rates charged. In no case will percent plus 0.87 percent), or BFI-PHBD be entitled to recover past a$1.75 per customer per uncollected revenues through a balancing month increase account or future increases in rates. The rate setting methodology is designed such that All Others 7,97.p�r.��tt. ingm, , or a rates are as closely aligned with costs of moot per customer per service as possible. month increase For Rodeo and Bay Point we added an D. Comparison of Rags and Services to additional revenue requirement for a Other Jurisdictions Household Hazardous Waste program Unincorporated County rates were (HHW)which benefits only those two compared with survey data from eleven other unincorporated areas. Consistent with a jurisdictions. Results of the survey are letter from the County on December 12, summarized in Appendix F. Exhibit F-2 1997 to BFI-PHBD concerning the HIS shows residential rates for each of the areas program, we added $11,054 per year to surveyed. Exhibit F-4 compares proposed cover this program. We split this figure rates of each unincorporated County area based on County's figures for households, with average residential rues of those and Bay Point is assigned 34.6 percent of the jurisdictions surveyed. In summary, total, or$3,825, and Rodeo is assigned 65.4 proposed County rates are generally higher percent of the total, or$7,229. Additionally, than average for lower service levels, and are Bay Point is charged$685 for a Battery lower than average for higher service levels. program(BOPA),for a total additional For example, rates for one 32 gallon revenue requirement of$4,510(i.e., $3,825 container are nearly 23 percent greater than plus$685). average rates while rates for one 96 gallon Based on the 1997 total residential, container are over 16 percent less than commercial, and industrial revenue figures of average. This is explained largely because $825,317 for Bay Point and $834,729 for the six CCCSWA jurisdictions, which are Rodeo, we determined the additional rate part of the eleven surveyed, have adopted change required for each area. A$4,510 unit pricing rate structures(i.e.,the rate for a increase for Bay Point corresponds to a 0.55 95 gallon cart is three times the rate for a 32 percent change($4,510 divided by gallon container. f NewPoint Group Page#V-8 IV.Recommended Rate Change Based on the frequency distribution of This redesigned rate structure would unincorporated County residential allow the County to incorporate new customers, and the percentage differences services such as a mini-can rates and a the proposed rates differ from the average, yardwaste program. Costs and impacts we conclude that BFI-PHBD rates are of these programmatic and service slightly higher than market averages. This changes can be assessed and fairly conclusion is limited by lack of available data incorporated into a revised rate structure. on the frequency distribution of customers in To facilitate this redesign, we the other areas surveyed. recommend that the County and BFI- Existing commercial rates, prior to a rate PHBD conduct a survey of County change, are shown in Exhibit F-5. Existing customers to understand how customer commercial rates are below average for all behavior might change in response to a bin sixes and frequency of collection, with changing rate structure and services. the exception of the one cubic yard bin Further, BFI PHBD and the County picked up one and two times per weep, should pilot proposed new programs which is currently 9.3 and 5.2 percent above over the next year to understand their average, respectively. Because the County is cost and rate impacts. not explicitly regulating commercial rates as p Review Transfer Station, part of this rate review, we have not shown Transportation, and Landfitl Costs - commercial rates with a proposed rate The is a unique rate setting case where change. However, we believe these HFI owns and operates both the comparative relationships generally will hold transfer station and landfill used to for unincorporated County areas, after a dispose of unincorporated County commercial rate change. waste. This rate review did not encompass a cost-of-service study for E. Other Recommendations the transfer station and landfill. Thus, NewPoint Group has the following two we cannot determine true landfill and additional recommendations as a result of transfer station costs which should be our review of BFI-PHBD: charged to unincorporated County Redesign the Rate Structure-We ratepayers. Instead, we utilize a Ci market-based tipping fee of$51.24 per recommend that the County immediately proceed over the next one year by ton. We understand that though in the .March past tipping fees were regulated,they of 1999, with a redesign of the existing are not currently. We recommend a complex unincorporated County review to assess the Costs of providing residential rate structure. A goal of this transfer station, transportation, and effort should be for the County to landfill disposal to unincorporated simplify the structure with the intent of County ratepayers. providing all unincorporated County customers similar services and rates. Page IV-7 MewPoint Croup ......... ......... ......._. ...... ................__..... ......... ......... ......... ............._. .. ......... ......... ......... ......... ..................................................................................... • Gv APPENDIX A _1111._. ........ .11.11. _ ........... ............ _....... .. 1111._. _1111 _... . _ _1111.................................. Appendix A BFI-13'1-113I3 Rate Application Appendix A includes the that this application has been used. completed rate application for BFI- Information provided in this PHBD. For this first year rate review, application is for the following four(4) NewPoint Group worked with BFI- years: PHBD to obtain documentation to support the revenues and expenses C7 Prior Year— 1996 included in the application. In future © Current Year— 1997 base years, BFI-PHBD will submit this ❑ Current Year—Adjusted— 1997 application to initiate the base year rate setting process. This is the fust year Ci Base Year Projected—1998. NewPoint Groupe Page A-1 "D_ to Base Year Rate Change Application Rnanciai Information Ad*MW Bw Year Prior Year Current Year Current Year Projected information Information irdom"Ition treonnation FY 1996 a) FY 1997# FY 1997>a i99e 1. Direct Labor $ $43,674 $ 833 712 f$ 833,712 $ . ;8 712 2- Tipping Fees(Pro&Moved up to$43.06 per ton) 1,387,597 1,215,830 1.016,166 t,011i;#66 3. CorpOrake and Local general and Administrative Costs 648,450 645,592 # 503,861 503,881 4. Trucking and Equipment 552,122 50$,833 508,933 ;:;801�Lt23 5. Depreciation and Other Operating Costs 513,987 542;726 340,•489 340489 6 Services Provided to County 181,322 174,031 30,577 3WOh57 68. Less $ 7. Total Allowable Costs(Lines i +2+3+4+5+6) IS 4,085152 S 392 8 0'S 3,233,738 3183722 001- 8. Operating Ratio(0.90) WA NIA i NIA 00 9. Allow"Operating Profit[(Line 7+0.9)-Line 7)) WA WA I WA 5348 891 10. County Administrative Fee 21,738 11. Mppina Fees Pass throw h between$43.08 and$51.24 r ton 199 664 199664 12. Total Pass Through Costs(without Franchise Fees)(Lines 10+11) S ;$ 199,884 221402 Total Allowable Costs(Lina 7)plus Allowable Operating Profit(Lina 9)plus Total Pass 13. Through Casts(without Franchise Fees)(Una 12) NIA 1 WA NIA 3710 309 14. Residential Revenue 15. Less Allowance for UncollectIble Residential Accounts 16. Total Residential Revenue(without Rate Change In Base Year) r s 1,57'6,647; t 2343 IS 1531601 S y t 17. Commercial and Light industrial Revenue 2,.185,715 18. Less Allowance for Uncollectible Commercial and Light Industrial Accounts 188. Leas Refinery Revenue 1 19. Total CommerdallUght industrial Revenue(without Rate Change in Base Year) 2.552, 8 I 2,16 715 iS 211605,715, S 2058.225 20. Recycled Material Sales 131,081 081 I 69 74 4 -537 21. Total Revenue(lines 16+19+20) 1_5,,_4260,426 i S 1817,132 .S 3,756,390 3 619 363 22. Net Shortfall(Surplus)without franchise Fees(line 13-Lina 21) 23. Residential/Commercial/Light Industrial Franchise Fees(see calculation below) I 57WIT$ 8 70;S 52,870 1 79 24. Net Shortfall(Surplus)with Franchise Fees(Unes 22+23) 25. Total Residential/Commerciat/Ughrt Industrial Revenue Prior to Rate Change(Unes 18+19) 5 26. Percent Change in Existing Residential/Commercial/Light Industrial Rates(Line 24+Lina 25) f hise tees are set by the Count).at 5pairent of tto revenue requirement 27. Total Allowable Costs(Lim 7) S 31 018for Awa equations with one unknown,and iderVy franchise fees as X �> 28. Allowable Operating Profits(Line 9) 3it31Equation 1) Revenue Requirement x 0.05 a X 29. Total Pass Th h Coats with Franchise Fees Linea 12+23 416$82 Equation 2) Revenue Reguimment a Lira 13+X,or$3,710,309+X 30. 1998 Revenue Requirement(Lines 27+28+29) 3 ft to equatiotion 2)into equation 1)aro solve for X10.309+X)x 0.05 a X,or X a$196,279 War:190 , APPENDIX E Appendix B Rete Structure and Number of Accounts Exhibit B-1 of Appendix B is the Average and weighted average rates are residential rate structure as of January provided for information purposes. 1998 (prior to any rate changes Exhibit B-2 details the number of proposed in this review)for accounts by rate structure category. As unincorporated County areas. Currently of January, 1998, there were a total of the rate structure is highly non-uniform 6,720 accounts in the County, with over across County areas. This variability is one-half using 32-gallon service and due largely to area specific historical another one,quarter using;64-gallon rate setting and service needs. service. Exhibit B-3 is the estimated Ultimately the County would like to base year 1998 revenue and is the move to a more uniform rate structure product of accounts(Exhibit B-2) with similar and enhanced services multiplied by rates(Exhibit B-1). across all unincorporated County areas. NewPoint Groue Page B4 Exhibit B•1 EsW23g RAWdmd4a Pjov S&udwe for U#hworp4rmood Coeur cats county Arta SrrvkW by Plmw Ails Ssprhero I7*mml Ise._Wvw#Wg Farris Ind-W&4 Inc. Oso i tOYY7 Nw#:: L�j AIirYMe► MNIMe��'. NaOM - .»wee twAwe *.M omomgr l•lairdlr No ww 2 1 WA 1 Kdo 2-20iiat No 8064' 1 2 WA f lY.S} tiW 1-20ptlw Ne BOW a 2 WA Moo Mod I4.o0 3.20ttiw I% MW fPa4 2 WA s "Ao IS.ti 1•Jlplae "lir No I 2 WA f-s2 paw Yw BW1 2 WA 13.13 SIAS 1.npUw Yw sm I 2 WA t7AS 1Xn !up"Mawwry YM BON' I 2 WA 10.71 14M 1.52p1kr 'Clark BOW U& 2 WA Itl3 10.70 17.0 1•,2 FAM Yw 1" 2 2 WA 14.73 IAse I2.40 10.40 Iim I7.S3 idl 6*0 Yw am Uear 2 WA Itis itis 0..12 swo Y. Na %par 2 WA 13.30 IS.is i•31ptw tdelri Yw WW f1paV 2 WA 14.33 14.}3 St,is- .S2 p1Iw Yr No I 2 WA •S2/edt Yu 1M 1 2 WA 2Y.l3 : SSSS X52 pow Yw am 1 2 WA nA 3 n'M 1112 rtiw(0w * Yw ww 1 2 WA 21,f6. 25J6 -updaa Y. ww 2 2 WA 1173 }1.30 $t.ie 300 21.se SLJS SS paw Yr mm Vpar 2 WA 22.11 JIM S2 PH"adakt7. ....Yr 1(114 ,up.a3' 2 WA St40 .. _ 20.40 d20iiae Yw Sar 1 2 WA XM 1W I 2 WA 11.15 SI.H "I V"= Ya ww 2 2 WA 22.73 43,40 OA0 OA0 3SAs x3.71 5*S vam Xw BON 1 1 WA 47.n 47A3 5201w Yu I" Lipa S. 2 WA SL70 17:x11 2pllr Yw 8W 12 WA : ...40.31 40."S2prwa Ya BCW 2 2 WA As0 Am SSp{4r Y. BON 1 2 WA 41.42 4I.O. 32piao Xw 8UM upw3' 2 WA x.71 54.71 'akiY t.4/p14w Deer Ne Ne sort: 2..: - LLt - U.f4 17,18 IA34 kii psr art No 1W bate 2 a" 17.10 : 17.Ss. 1+44 So"aM Ne ww ban 2 U.31 70.X1 20.l0 1•i4pewan Vet $614 ban 2 U* t1,.K X70 51.40 10.17 1+44 pace and(00RW6 Vet am bow 2 va k7:73 IsM ISAe 1.43 paw an No No fan 3 0.40 Mis MIS 1-piVaws we BW dawn 2 n.40 2 3 wS ).45parwn Ne ww boon 2 0.40 11.73 21.00 21:40 21.00 11A4 31.0 40.71 5141 1.13 ptweart Ne BOW fawn 2 flak 2[.35 i�pi ptwr aet(torw} to HOW batt 2 Uok 28.SP Las 144 SdW No 36N Lawn 2 34.78 SA2e 24.2a 54.20 SL73 40.40 +tipaetw N. tiny Shan x: si.10 40.73 f4.i4 hJO 64.30 2.3lpikrww We 805► bac 2 twk 17.70 47.70 parr No am b." I soles 41.13 10000 Net .43 swift we No saw ban 2 trek _tA.f3 tAO Nett. a6N-skor7 wr,e.et 1111.8 wy.+erk. C4w4pe-.p to trade#wMeW. CtypioppaeeMs4 t'a4teewYpimim0#4wrere4rpvidM 4rre er kep ad5rdrewe 1w rte eeleede w nataiey wiardrl Caekeenee 1re+MM ar Sx SOew 52.0edlw"ew'oer„iw.EPt rete s0.W nyeta■aw w resod. —Da tfv Exhibit B-2 Number of Accounts for Unineorporatei Contra Costa County Areas Service!by Pleasant Hill Baysbort Dbp"W lime.-Browning Penis Industries,lima (Jsaaary 1991) `iowi• ? ? ::::.i:::::::::::: :::sitirr+,: :''• :?rkrs: .:.::.s.a�r�w�.r..,.,,..... .... ...... ....Y. .... ... ........ 1.3D 9N1�'• N. Crow 22 WA 1-14 p8.. N. low 1 2 WA f 7 1-Wpv.. N. now 6 2WA 1 } 1.77SdW N. low U4.S' 2 WA 14 14 t•32 WIN 204 ............ :'. ,1 3.. .WA:' ... .... ..... ... .... ... ... ..... ...'.'u ..... ....,'#. 143 A.U. Y. BW f 2 WA SH 30 1.320*4YN aoW t I WA 735 735 Id2W1.'U.'W YN am i I WA I94 In 1.32WW. Lim sow L" 2 WA t M 17 1.33 sew. Y. Ww 2 2 WA Ain II m M 46 1.027 1.32.11. Y. now U.b$' 2WA 4" 9'If 542 a.ik. Y. 1f. user 3 WA 1.331WIN...... ,Y.!, .fq'M. ,L.,e S' 2 WA72 ..... Y. VA. ...... ..'.'4331 4 ' 42 Wb. V. tiM 17 WA 79 70 JS WI.. Y. " I I WA 59 i 57 2.32.Ik./.N.7 Y. Ww t 2 WA 2 2 2429.13. Y. mw 2 2WA s 35 4 24 t1p4 2.3394- YN am WNr 2 WA R R 2 97NW7,__ .Y.!. .®DX, ,i1p,.3 2 WA t ........ ... .... .... .... .... ... ... .... .... .... ...... ....'321 Wks Y. W 1 2 WA y y 3.32"P. Y. aw 12 WA 7 3 32 WIt. Y. Dow 2 2 WA a - i 1 3.32 to. Y. now 1 2 WA 2 1 3.31.paa......... Yr B3W U..S' 2 WA .. .6 . . .'.... •' .. . . .• ... .... ..... ............. ... .. 32 pan. Yr .' 2. WA . ..... .... ..... ...':'.I} 422 2A. Y. sow 22 WA t i 32WW YN am 1 2 WA - 32WM Y. 4oW IkbS 2 N/A tit..Iw nut.'. .'•fY. Ne 4.Nt.. '.•.3.'. '.'�.' ,.. ... ..... .. .... ..•.'i' ... .... ...'.12 140 WI..r.t N. Ba 1.— 2 71.35 114 1K I.4d I." N. a w batt 2 72.35n 122 tea ad"are th* fx)w ban. 2 Wk 947 77 33 IA04 144 Wb.artprr.t Wk BOW kart 2 tisk ae 33 „ 1.95 WW.v •.No N. It wt.. _'.' .:'xi. : ... .... .... .... ... .... IR 192 1.97 pa.ars N. aw bwt 7S7.W 19 19 t•97 WIN Net 71. ODW last 2 &3-006W 23 117 112 27 M 14 }M 9se..Nd N. BCI. 7...tt 2 tkk 234 1 L4 lhd� 3 2 .. ... ... ... .... ... .... .... ...... ..:'.1397 ............ ..... ............ ............ ..... .. f.Wk.Nw N. Biw . 2•ff.alts N.k�.� .,.N..• ,�$SW b—.� .•.-1•.'...K1q. .'.'.1e••...•.•._.• ...•:'' ..'.'3". SS 245 0,15-a".... .N9. ,say. b p-�t. ...i.... P4. _... ............1.............. -..... ........ ...van.are tie f49w la ml 2 7499 1 .. - - } WIN Nm N. aOM.' brR 2 l5tt t ......... ......_. . _....... .............. ......... ......... ......... _ __............................._........................................... . _ _ _. ......... ......... ......... _ .......................................................... . ................................... Exhibit B-3 Estimated Annual Revenue for Unincorporated Contra Costa County Areas Serviced by Pteasant HUI Baysbore Disposal Inc.-Browning Ferris tudustrim Inc. {1948} an. y�_� � .................... I-tD o" No SOW 2 2 VA . 179 - 5 179 1-20 pu- Ne BOW 1 2 wA 718 _ $18 I.20 Vu- Na SOW o 2 ww 192 _ _ 192 I-sopor..........!'IP.... ?...W,b?'. ..?.. MA ... ....... ...... .......:. ...... ...�?7. 1.19 nticw...... •.•. «.'•.•. •.• :•:•'<•. ':a .. A:• .. .. .. r i3di3 ... •.•IS�Ml3 1.7E08. Y. EW 1 2 N/A - _ 70338 70.!38 1-32"" V. BOW 1 2 WA 117,201 . 157,267 1.32 da0oe 184eMr/ Y. BON 7 2 WA - - 73,423 25,413 1-31 MD. LIM BOW lktt 2 WA - . . - 227 7.211 7,42 1.32091. Y. BOW 2 2 WA 139.273 2,392 17.432 94N 19.432 - _ _ 269,433 1.32 adwb YM EDW U9b!' 2 Ww - - . 173.377 _ 136337 1.32 Yllm Y. No U9m 5 2 WA 1.228"(SrW! Y- BOW ElovP 2 WA . 13371 ... ...., ... .... .... ,•, No.. :':•2.. wA .. .... .. r•r� ....-. 143 •32 VA. Ya Ew t 2 WA 11,7!2 . 19.791 242 Wl- Yr EON I 2 WA - _ 21.793 - . 401 =IN 1•3201.iWn) Yr 60W 1 E WA 607 407 2.11 Y. EON 2 2 WA 11.0% f,072 14% 7.4" K705 -3201. Y. sow UO k.S' 2 WA 14N2 . 1002 ,32 PON ff!!ig7... ..YK. .POW. Up w T.....2....,ALA. ....'.......•.......'...... ? 347 3.3240. :•.YM.... .. ..I.' .._.. NiA.: .. .. .. .. .. ..._ .......isi .. •i: : 30) 3.32 Wiaa V. EU' 1 2 WA - 1,130 L00 3.32 Wow Y. PAW 2 E WA 1,390 !4 . _ .1" 3.3E W1ao V. BOW 1 2 t" 1.129 13" :... .................. .. .. 1064 2,066 .3201. Y. Bw 1 a •3201. Yr BOW 2 2 WA - 702 - - _ . 702 bx o i. Yr EON 1 1 Ww _ -31 Wi. Y-, •EOW...Up.0 3'• 1 WA I.49o19ea ort .' .•. •.N. .'.U• .'r2Llk.•. r •. ..: .... ..= .' 'pd - 1520 ..... 1704 1-61 i'Ilkr a3n Ne EW 1.- 2 5235 _ 29.140 - 24.140 1.64 adko t N. WW 161.1 2 5235 - 124401 - IMA01 144 mum ort UA BOW 1. 2 U& _ . 235,1,7 11331 9490 244516 I At Wbo ate(law) L%k SOW 4-n 2 Usk .. .... ... ... ... .. .. ':'181.95'6. 7-933dYw aott.•... •.Na ..No •IeaaK•. •�•2 SS.W� _ _ .12316 '....- ..•._ 23214 1.9!WWortn No EW hart 2 $3.00 - 6403 _ 4437 i•9la"ort No EOW 4art 2 53.00 134110 SJ% 29AN 293N 6.394 • 39.70"7 - - - 243.613 3-9!Wiaa art Ne BOW 19.1.1 2 tAk _ 7414S . 2.61! 71,830 i-951YW art 9lrirr) NO EON 164.111 E ulk . _ _ b7g . . 6" .... .... ME N4: it Wim away..'.. •.•N. .•.EOW•. In wN •.$,., .....84.78 ... .:<'sl+i....`�. .. .. .. .... ..... k303 .... .... ... .... .. .. •::1.0c x-93wdka ewe..... 'r.�.•..•.��•..'••ma.n.. ...,t;•:..:56.be•: :'••i.i90':.•�''3.Sii �'::�.�� ...' ..... ua'E •93 itlfae aaM Na EOW L art 2 L'ok - 372 372 ..... %..'.'.'s.'..•.•.,r.•rr••••• 4855- .. ... ..... ..,1 3.98-tine nem •�Po .EON io e4e1 ....$ •.59.00 712 . - _ 741 3.93491h-. 7•to EDW >a rat 2 134k 7' a% Si6727 1017096273 4+655 72334 461 D26 7 fl9d 125664 4S SIS •I'.58• 14?70 l 31#01 i _. _.._. ......... ...._._.. _ ........ ........._.. . ......... ......... ......... ....._... _....... ..... .._. ......... ......... ......... ..................................................................................._...........__._. ...................................... APPENDIX C Appendix C Summary of Tata! Revenues and Expenses Appendix C provides a summary of Total unincorporated County revenues and expenses for unicorporated revenues and expenses aro shown as a Contra Costa County areas served by percentage of total BFI-PHBD revenues BFI-PHBD. This financial information and costs(excluding Central Contra was reconciled to audited financial Costa Solid Waste Authority areas). For statements for fiscal year ended fiscal year 1997,the County represented September 30, 1997(Exhibit C-1). For approximately 13.3 percent of PHBD fiscal years ended September 30, 1994 revenue(without CCCSWA areas)and through September 30, 1996(Exhibits 15.2 percent of PHBD expenses(without C-2 through C4),this information was CCCSWA areas). None of the financial not audited. information in this appendix has been adjusted for rate setting purposes. j NewPoint Group's Page C-1 Exhibit C-1 Contra Cosh County Unincorporated Areas Served by Pleasant Hill Sayshore Disposal,Inc. Su14ura4Y 6f R9t14nues and ftp1na14 (YW End ak4 30,4i17j .. ......., ..•............... ) ..,..... ....... )wariy0d :lAtrlq :PW14210: t;4Al""A .. .....•. ::: ::•:-::•:•:•::•::•:::: !/!>p!a :<is::: ::•aMsFi' :Q{}trtet(: :.:,{:,: •:X1pg4q..r..{._..:{.{{...:..{.....{{{. Yi ai tbCn!::118 1} :Gdsleilkd 7 aiL Yirr►::PitNt eo:: !t' :>:7 :•:AYsai:: ::Titan. na�vt4xw commarmt i 10,977 S 955,637 i . S 130.271 S 10,590 S 4,414 S 330,510 i 35 AU S 207= S 1,432,664 5 6932,886 14.67% Raeidrntlal 112,613 323.620 7.271 56,406 15,014 45,540 406.076 130,601 404,743 1.502,343 13,401217 11.43% 448/4x6 12.752 140.266 3.947 75.211 68,777 - 21S.W4 04.147 122,587 753,061 4,756,003 15,41% Aa0YWQ 2980 5474 00 74 575 26A64 Wan 10.174 $9,074 326,400 18.10% tom i 136,631 S 435.144 S 41914 i 40,40 S 60.04 i 50.634 i 666,366 S 694,441 i 154.7x6 f S,t,f,tri i 30.40.401 13 r.•. .v............... ..... ..... .... .... ..... ..... ...... .... ..... ..... ...... ....... D*PNW S 40.886.S 253,423 S 17,683 $ 66,407 S 46= S 16.001 S 401244 1 106,743 S 246,360 i 1.216.830 S 7,619,005 15.06% rlkvdtear 41,696 1761701 20.379 36.310 21.152 24,750 242AN 72,031 MAN 833,712 4,Si2,940 16.07% Frandi"(ees - 01364 49 10,333,07 621870 252 ,6976 2.37% TAM*.bv and OWAPmer4 19,074 103,547 762 26,2x'6 13,232 0,438 170,166 40,173 105,424 506933 3,170,137 16.01% DePWA46M and allwmmndm 9.764 55,283 521 0,OW 6.486 4,304 158.166 2PA24 75,361 361,543 11980987 17.94% 00WOPW 6n0 axpaner TA" 37,t42 2,100 10,356 803 3,440 05,745 18.114 MAN t01,443 1,427.006 1140% GLA LOW 17.639 67,032 8.198 23.049 6,019 6,406 100,206 40.756 102,560 471,661 2,076,34 16.40% COW" 0.186 34,212 2.615 10,404 4.664 2,766 61,716 19266 32,161 174,031 1.011905 1721% cityaetvwe 11,505 - • - 15,040 - 3,072 30,577 - NO w Pmkuw ter _ t3.4551 b.ao% TOW S 143,530 S 766,664 3 82AU S 213,121 S 1W9W S 72,133 S 4AW,7N S 342,436 6 536,478 4.3.610,!49 S 2434 , 4.06 16.4ft .............................. ...•..•..• .............. k"" $ 43,W f W.GU $ 0 ,241 1,21% S 64i (134") S(21,411) 6 (340.464) i 281.614 i (:,74% S (23.1011 i 3.414.137 UtarmZXPW" S 6,230 $ 6,013 S 4,349 S 17,016 S T•686 i 4901 $ 83.131 i 24,766 i 46,534 S 293,747 1,681,133 12.12% Inaom4(Laaa►Safm kwoma Tax i (1290) S S7,7N S (44A6q $ 36963 S (40.6381 S(26.54% $ (401.06) 6 237,00 i (50,284) S =&A" i 1.834,064 -10. 80ne t(PmYW*n)for Intwmt Tax 5.014 (23,606 18.670 (14.684) 81581 10'94 1661470 (071190) $0,618 93.003 302,020 3050% No"Mum tLON) S (712151 6 34,102 S MAN► S 21.30 6 (12946) S t149S6) i 1234,05) S INA" S (46.1671 S (133.232) i 1,624944 4,1.1 .•.•.•..•.•.•.•.-.•rr.•.•.•.•.-....•...•.•..•................ . ....... •.•.•.•.•. •.. •.•r.-.•.•..•.•.•.•.•.•.• ..... •.•.•.•.•.•.•. .•.•.•.,- .•.•.•.•.•.•..•.-.-.-.-.•.• .•. •.•.•.- .•.-.•.,-. ,•.•.•.•. •.•.•. rtatlw 8817 103.1% 91.3% 176.0% 76.0%. 1142% 134.6% 124.6% 44.4% 106. 101.6% 60.4% S i 61 Exhibit C-2 Contra Costa County Unincorporated Areas Served by Pleasant Hill Bsyshore Disposal,Inc. S tmmry of Revenues and Expenses (Year End fit,39,15"6) ;.;. NBD o . 7Upatts:sbta. Ssnftii�i ;:#s#rktl; i4iitegan; '.PeroaMof :... ...:.... : ....•.•. ...•.'':. :�: PWsSt .DI$ttldt.'•:.�. > T .•1ltaif:Sk..tiaO!lido •rRbdiO. .. 'td11d.: .':�11MMil:i :•:�!N55D.•:� Revenue COrr>merefat S 11241 S 386,493 S 135,510 1 12058 $ On S 331,116 $ 380,40 S 216,096 S 1,451.646 R"dendal 103,615 323,618 531790 1SAW 44,922 410.234 127,284 497,3" 1476.647 Rdl•off 11.762 148,4155 11,152 981006 536,333 $3,424 173,070 1.100,852 R--ding 61167 16,154 am 106 2.213 $5.210 222,948 27.4564 131,011 Total $ 134016 f ".!lea f 271x"! f "A.= f 41,166 S 1338,1!6 6 154307 f 11!!66 S 4,MA" $ 27,77390 Operating Expenses..•............... DIapOWi f 30.516 S 206254 S 61.268 $ 48,606 S 30,316 $ 5275W S 137572 S 231,425 $ 1,367597 Direct labor 41,704 164,153 35,015 21,814 18.726 292,797 68537 171.644 843,871 FnwvAae less 8,461 t5AW 32,04 57,390 Tnuldng and equipment MOSS 108,982 24,66 14521 0.307 200,013 51.131 116."4 552,132 t36precletion and smortmatim 13,478 71201 12.684 11,360 SAM 111,041 43,064 $3,742 424249 Ottw Operating expenses 9,831 561700 14,677 6,516 4,490 107,260 31AM 821612 :286245 5;36A Local 17,362 97,336 20,563 11,653 7,441 182,117 5540 113,63 465.126 Corporate SAI? 35,185 IIAN 5,037 3,816 572"79 151827 31,072 lei= Cay servkm 10,336 11,180 5.797 271!93 Professional fees 46 as - 12 453 73 208 a" Total S 144,442 f $14214 $ 214,111 f 125.307 S $1,112 S 1,644,276 1 .430,707 f 1514,863 t 421407 f 25,441.3114 1 opstating income:•>:...... ........ 11 (11AV) i =170 t..st,7ai,,i..( 6) $ t21.+� $(20&.�'H.$1621eo9 .=.•si.ios g'..41.70 t.'2,U2,i$i i.m Interest Expense S 11,012 It 70.229 f 17.142 $ 10,052 f 6,021 S 114,331 $ 31,ta6 S 82,Ot7 322.000 1,932,724 10. lncom(Loss)Before Income Tax S 112 AU) f (4036$► S 3900 It (34,271 f (36,473) S (3224'tlq f 1&2,404 $ (4.9121 S 010.211) $ 300,436 .70.15% (meat(Provtmon)for Irloom Tax 9,196 18.104 (tun) 151960 14.544 132,t9O (92,468) 2,014 114,66 124076 94.11 Net income 4Loes) 1 (13233) $ 12&,$661 S 23.364 s (21,47) S (20,63!) s (1$62363 It ".914 It (3,164) f (in $ 521,06 131. . '................ . .noRal" .. .. . ....-- Operad MIT 107.4% 47.311 73.6% 1219% 136.3% 113.0% 17.41A 13.31( M f0A% t Exhibit C-3 Contra Costa County Unincorporated Areas Served by Pleaaant Hill Sayshore Disposal,Inc. Summary of Rwenues end Expaaas {Year Snd sept 70.1985) �:RH80:wi'•: :':'::'•:':'• ;idtYiri45ii ;SYtfltarj; t!!>bfctl: ii(orgait- :: COi SYSi4: -: rtiiitot ... ::};;;:;; :. :•Viii $rl.P111M :D1►ti1Ct} T MC V(ehi•' PiiCM6+5 •iAjjjjjo. ..Taw iliyi*:::!•:•PMBO::• Revenue CAmmerdel $ 12.307 $ 270,716 i /42,424 S 17,1711 S 8,310 S 765,342 S 367,477 3 224,633 S 1,605397 Re4kiential '103,625 462,61 62,963 24,411 45,224 MAW 116,343 493,641 2.056.136 PON-off 13,112 135.343 64,097 60,876 - 368,340 $7,510 161,075 M5203 Recydn9 12,866 33,477 1,663 217 4,607 121,706 47.716 53,015 275,2&4 Total S 141!16 3 1rOg yd7 $ 281,167 $ 122,633 S. 88,144 S 7,s08 478 i 121,Ow f $72,364 S 8,061.921. i 27,777.88 t 6n0� ................. ...... Opeas Disposal S 36,07 $ 2812.670 S $6,847 $ 86278 S 15,584 S 601,440 S 130,660 S 262,665 S 1,474,960 Direct labor 36.27$ 135,275 3$,513 20,940 45,783 =AV 63.0$6 166,425 849,176 Frallch"fen 7,562 15.000 33,433 554t5 Tnm*ft and equipment 161155 96,363 25,186 14,323 6.732 213,$20 56,728 99,621 534,031 Oeproc abon and amo tl7a6on 12,510 74,734 17,$412 14,741 SA521 179,041 41,969 761994 425AM Othwoperatingwomnses 9.066 $0.191 10,78 7,562 3,621 102,701 25,170 56,71e 26621$ G&A Local 12,460 76,627 161549 10,000 5,.356 178,961 47,SM 90,164 439,890 camorate 5,746 41,466 11,774 074 2,1$0 72.043 27,336 38,241 200,140 Oty service 5.051 We 4,637 16.649 PnAgeakwW feaa 61 17.680 2.311 20;028 Total S U2,523 i 766,3.'18 S 2%;`14 S /30,'478 S 4$281 S 1,72$,611 $ 4$5.793 $ 875,417 S 4263.841 i 25,417AS 1e. operating wtoo 4e ::..............:' •i.• $.617 i 117,048 S •86,941..5 ..(7.861► $ •2,$46 S 264.718 S 211,26$ 1 $5.847 $ 7$1,380 f..2.310,383 .. ..33.40. . IntermlLxpenee $ 9,837 S 70,976 S 20,153 S 10,911 S 3,6181 S 123,313 S 38=0 $ $6,455 342071 1,92ef7S 17.73 income(toss)Before Income Tax S (7150) S 4$,72 3 44.4$0 8 (14A11% S 48M S 161.402 $ MAU S 33.462 8 4314,694 S 436,465 1$1 8arient{Provision)for Income Tax 71637 (21,$17) (18,405) 7.50 3251 (75,730) (70.607) (15,714) (18q,M (91.321) 226.1 Net Incor"((.Ase) S 5,617 1 24.448 S 24,484 S 118,#4! i 2,442 $ Wan S 19;4,171 $ 17.778 $ 254,26 $ 341.154 73.s1 •iOperatingRattos'i................ EBR 93,2% 85.1% 015.9% 165.0% $4.09c $3.41% 46.5% iea% 81.4% 94 Exhibit C4 Contra Costs County UrdnwrporatM Areas$awed by Pleasant MI Sayshora Disposal.Inc. swmwv of ltlwnua sed E7 PMW IYW and SMD.30.Is" WI!mfb4t ; :.ai6ikrry ;b R2k9t:::Iq!drV+ui:•::!:•i::,>:.:.:{: }::>:<:.:.:: :plillFStiyb:: Prstisiffot: ay ...•.4464: .. ..:{..F... Nevrrtef6 lY`rOt120161f D ! i 916,10 3 1213M D 11446 • 12444 D 63639 1 300044 i 3364.002 D 2,M417 flrsfdfmOW imm 376,336 6931 16.476 46400 406417 t44AM win 27NAM Tr 6471 1VAN to3A67 Ni61 663 221.746 VADO ts3.910 MAN RrLYC;f11Q 2471t71Q 1,r14 371 240D 746444 37310 41413 niA1s Tilfrl tJ!1f D a141u r 341;446{ t3RDt7 f 11.346 s i31r46r s WNtA!6 D i,w,ir t sus!.iw s,t91,w 4tA Exa6nras:............. ...... 13MAsssF D MAN D 301046 D Mpg 4 0,917 6 11" 6 7"AYs 6 216.100 6 440.460 41 6.077.46 (�f7rU 764474 36.726 170,M6 USM 17.04 0.746 336."1 761,766 talus sU.203 Fi IN fm - - f4j" - . 14412 - uAts 46X1, TnNsi&fp rnd rs111017fU1t 16.314 674" 30400 41476 DA10 321462 4040 00.646 Is7:971 611d r7110fd1OM 42A20 7.06 11.700 %A74 DAM iMAk 49404 0437 461Ap !)d11t 010M3di12t s%M911rr 7.02 46.364 140 6066 3AM 102.1616 36,10 M0M slum GiA . Load f3AM 00,10 16.576 2461 DAN 46L7M PASS 0.366 41.40 cOfgO" /AO 42AM 13342 %A7f toil aim 96462 "AM 232766 c4V 3s SAW 1,07 4360 PrOADMI10"6s6s - 443 I'm - - of 240 3A T 7Aat Taw 9 40AM l 406.006 $ 214436 1 19138 t r6.3N i 14R6M D 06.116 t 1 p4H6 1 4,620,744 t 27AM4N View OprrrtU70MiCOiM.•r...........•••• .• p107M 3....T4N•D ...73446 6 till, f.•.'09'41 ,•4.361 3'•�•�•m," 4.4....(14.61.9 . •. 420./36 D.. .•i067AM ANN r. 7f11s7Mti:rpetllr D K311 s "440 6 DIA47 D ".126 3 6,144 3 "tr0 D 40476 1 40,m 482210 2311,700 20. itlrrm6 P-c"I asAOrs hfns466 Tax f f"AM) s ("A" D 4.410 D (440446 1 111.2141 D 314,710 3 91,414 D llama t 011,41A t OMAN SAM Dwaflt(Pmv46wn)w Incmnw Tax 13421 31477 Mist) 7.714 4.144 f".201 3.710 two NAM 612207 Lot 171ca"M 04") t p131q 6 (46.60{2 as" 6 (11,1"f 64614 6 40,336 9 Was 1 014441 1 OAb { f17A71) BMT 1794% 40 467% "Li% 1M,S% 44.411 t4A% iY ft i _. _........ ......... ....._... _ ........ ......... .. ......... ......... ......... .._.............. _ _. ... ._..._ _....... ......... ......... ......._.. ................................................................................................... ................................ APPENDIX D Appendix D Service Area Revenues and Expenses Appendix D includes a year-to-year Revenues and expenses by area comparison of unincorporated County varied greatly from year-to-year between area revenues and expenses for fiscal fiscal years 1994 and 1997when BFI- years ended September 30, 1994 through PH 3D was not under formal rate September 30, 1997. A summary exhibit regulation. In most cases,year-to-year is provided for each of the following nine changes by area between 1994 and 1996 areas(as Exhibits D-1 to D-9): either exceeded the percent change in the ❑ All unincorporated County areas CPI, or decreased. For all (aggregated) unincorporated County areas between 1994 and 1997, BFI-PHBD represented ❑ Alhambra Valley that total revenues decreased just over 29 ❑ Bay Point percent,while costs decreased 22 percent (Exhibit D). We did not do a detailed Cl Concord -Unincorporated audit to explain year-to-year variation by ❑ Morgan Territory area, however we believe these variances ❑ Mt. View can be explained by the methods used by BFI-PHBD to allocate revenues and ❑ Pacheco expenses. Accordingly,we did not place ❑ Pleasant Hill, Unincorporated/Clyde weight on financial activity prior to fiscal year 1997, and instead focused our ❑ Rodeo. efforts to evaluate fiscal year 1997 data. A year-to-year comparison was not We used this 1997 data as the basis of provided for the Canyon/Tassajara area as our base year projection for 1998, this became a separate service area in 1996. NewPoint Qroue Page D-1 Exhibit D-1 Contra Costa County All Unincorporated Areas surnmery of Revenues and Expenses (Year End sept,30th) >� 1964 916 i9118 - $6 '=1996 97 ' 199T 97 Revenue Commercial $2,064,217 42.4% 51,808,397 -19.7% $1,451,848 -1.3% $1,432,654 -30.6% Residential 2,224,005 -7.6% 2,058.138 -23.3% 1,576,647 1.0% 1,592,343 -28.4 Roti-Cil 870,633 6.3% 925,203 19.0% 1,100,852 -33.4% 733,061 -15.8% Recycling 221,415 24.3% 275,285 -62A% 131,081 -64.9% 59,074 -73.3% TOW $6,380,270 -84% $6,069'1,021 -164% $4,260,426 -10.4% 3,817,132 -29.1% Operating Expentses Disposal $2,077.$70 -29.0% $1,474,990 -7.3% $1,387,597 -11.1% $1,215,830 -41.5% Direct labor 885,333 -4.1% 849,178 -0.70/0 843,874 1.2% 833,712 -5.8% Franchise fees 59,521 -6.9'% 58,015 2.5% 57,390 9.$% 62,870 5.6% TruclUng and equipment 533,378 0.3% 534,931 3.2% 552,122 -7.8% 508,933 -4.8% Depreciation and amortization 431,837 -1.4% 425,602 -0.3% 424,269 -17.1% 351,543 -18.8% Other operating expenses 255,098 4.4% 288.218 12.0% 298,285 -364% 191,183 -25.1% G&A - NIA - NIA - NIA - NIA Local 468,152 -6.0% 439,690 10.3% 485,128 -2.8% 471,561 0.7% Corporate 226,789 41.9% 200,140 -19.4% 181,322 7.9% 174,031 -23.3% City service 5,323 212.6% 16,649 68.1% 27,993 9.2% 30.577 474.4% Professional fees 7,843 162.0% 20,028 -96.6% 877 -100.0% - NIA Total $4,960,744 -13.8% $4,393,641 -1.5% $4,218,637 -9.0% $3,840,240 -22.4% Operating income $ 429,826 81.9% $ 781,380 44.7% $ 41,789 -188.3% $ (23,108) -105.4% Interest Expense 452,941 -24A% 342,571 .6.0% 322,000 36.7% $ 203.727 -55.0% Income(Loss)Before Income Tax $ (23,416) -1974.1% $ 438,809 -163.9% $ (260,211) -19.1% $ (226,836) 888.8% Benefit(Provision)for income Tax 41,038 -648.1% (163,883) •162.6% 114,888 -".1% $ 93,003 128.8% Not Income(Loss) $ 17,67.3 1346.6% $ 264,626 -164.9% $ (166,326) -19.1% $ (133,832) -859.4% Change in Consumer Price Index 1.9% 2.6% 3A% Operating Ratio ESIT 91.3'/. 81.8% 99.0% 100.6% ( GLJ#ity Exhibit D-2 Contra Costa County Alhambra Valley Summary of Itmnww and Expenses (Year End Sept+30th) 1894 $6 1916 86` 1899 97 1997 %C 94.9? Revenue Commercial $ 9 136644.4% $ 12,307 -8.7% $ 11,241 -2.4% $ 10,977 121886.7% Residential 111,570 -7.1% 103,625 0.2% 103,815 8.7% 112,813 1.1% Rolloff 91511 37.9% 13,112 -10.1% 11,782 8.2% 12,752 34.1% Recycling 9,871 30.3% 12,866 -51.9% 6,187 -51.7% 2,989 -89.7% Total $130,961 6.4% $141,910 .6.3% 9133,025 44% 139,531 6.5% Operating Expenses Disposal $ 70,085 -44.9% $ 38,607 -5.4% S 36,518 11.3% Z 40,838 -42.0% Direct labor 38,700 -1.1% 38,279 9.0% 41,704 0.7% 41,9% 8.5% Franchise fees - WA - WA - WA WA Tricking and equipment 15,254 5.9% 16,155 23.1% 19.888 0.4% 19,974 30.9% Depreciation and amortization 12,633 -1.0% 12,510 7.7% 13,478 -27.6% 9,764 -22.7% Other operating expenses 7,809 19.2% 9.066 9.5% 9,931 -26.0% 7,345 -3.5% CAA - N/A - WA - WA - WA Local 12,954 -3.8% 12,460 39.3% 17,362 1.5% 17,629 36.1% Corporate 5,696 0.9% 5,746 -4.0% 5,517 12.1% 6,186 8.6% City service - WA - WA - WA - WA Professional fees - N/A - WA 46 -100.0% - WA Total 9162,931 -18.5% ;132,823 9.8% 9144,442 -0.6% $143,530 -11.9% Operating Income $(31,870) -128.4% $ 9,087 -226,614 $(11,417) -86.0% $ (3,999) -87.5% Interest Expense 11,376 -13.5% 9,837 11.9% 11,012 -25.3% 8.230 -27.7% Income(Lose)Before Income Tax S(43,346) -98.3% $ (750) 2890.6% $(22,429) .45.6% 3(12,229) -71.8% Benefit(Provision)for income Tax 12,578 -39.3% 7,837 20.4% 9,196 -45.5% 5,014 -60.1% Net Income(Loss) $(30,786) -122.4% t 6,897 -292.1% S(13,233) -".$% $ (7,215) -76.6% Change In Consumer Price index 1.9% 2.6% 3.4% persting Ratio DEBIT 1 119.6% 93.2% 107.9% 102.856 ........... .............+..'.".'.J.�..]......J./�............ Exhibit D-3 Contra Costa County Bay Point Summary of Revenues and Expenses (Yaw End Sept.301>h) g g _g. 189/ 95 1893 96 19911 97 1997 97. Revenue Commercial $365,198 -25.9% $270,716 31.7% $356,463 -0.2% $355,837 -2.6% Residential 370.290 25.0% 462,951 -30.1% 323,688 0.0% 323,620 42. Roll-off 157,620 -14.2% 135,243 7.3% 145,083 -3.3% 140,286 41.0% Recycling 22,857 46.5% 33,477 -51.8% 16,154 -65.5% 5,574 -75.6% Tata! $915,965 4.6% $902,367 -6.$% $841,388 48% $25,317 -9.9% Operating Expenses Disposal $391,519 -27.8% $282,679 -5.8% $266,254 -4.8% $253,423 -35.3% Direct labor 170,546 -9.0% 155,225 5.8% 164,153 7.6% 176,701 3.16% Franchise fees - N/A - N/A - NIA - I NIA Truddng and equipment 93,614 6.2% 99,383 9.6% 108,892 -4.9% 103,547 10.6% Depreciation and amortization 75,808 -1.4% 74,734 4.7% 78,208 -29.3% 55,283 -27.1% Other operating expenses 46,334 8.3% 50,191 17.1% 58,769 -36.8% 37,142 -14.8% G&A - N/A - N/A N/A - NIA Local 88,102 -13.1% 76,527 27.2% 97,336 40.0.1. 87,632 -0.5% Corporate 42,554 -2.6% 41,466 -15.2% 35,185 -2.8% 34,212 -19.60!. city service 36 13936.1% 5,053 104.6% 10,336 91.9% 11,565 132025.0% Professional fees 443 -81.7% 81 4.9% 85 -100.0% - NIA Total $906,856 -113.66A $785,339 4.3% $818,218 -7.3% $759,504 -16.4% Operating income $ 7,009 1570.0% $117,048 -811.11% $ 22,170 1196.9% $ 63,812 839.0% Interest Expense 84,989 -16.5% 70,976 -1.1% 70,229 -88.6% 8,013 -90.6 Income(Lose)Before Income Tax $(77,9$0) -158.1% $ 46,072 -204.3% $ (4$,069) -220.3% $ 57,789 -174.1% Benefit(Provision)for Income Tax 31,972 -167.6% (21,617) -191.2% 19,704 -220.3% (23,698) -174.1% Not Income(Loss) $(46,008) -i53.2`/* $ 24,455 -216.0% $(2$,355) -220.3% $ 34,102 -174.1 Change In Consumer Price Index 1.9% 2.6% 3.4% Operating Rada ESIT 98.2% 85.!°h 87.3% 91.3°le Exhibit D4 Contra Costa County Concord -Uninc. Summary of Revenues and Expenses (Year End Sept 30th) 9 1994 96 3993 93 191 97 1997 97 Revenue Commercial $ 19,994 -14.1% $ 17,179 -24.6% $ 12,959 -18.2% 10,599 -47.0% Residential 18,175 34.3% 24,411 -36.3% 15,560 2.3% 15,914 -12.4% Roll-off 89,991 -10.2% 80,826 -15.9% 68,008 1.1% 68,777 -23.6% Recydhg 221 -1.8% 217 -51.6% 105 -29.2% 74 -66.4% Total $128,3$1 .4.6% $122,633 -21.2% S 93,632 -1.3% 96,384 -25.7% Operating Expenses Disposal $ 63,347 -11.2% $ 56,278 -11.9% $ 49,606 -8.7% $ 45,283 -28.5% Direct labor 17,548 19.3% 20,940 4.2% 21,814 -3.0% 21,152 20.5% Franchise fees - N/A - NIA - NIA - WA Trucking and equipment 11,878 20.6% 14,323 1.4% 14,521 -8.9% 13,232 11.4% Depreciation and amortization 14,414 2.3% 14,741 -2.6% 14,360 -34.0% 9,485 -34.2% Other operating expenses 5,935 27.8% 7,582 12.3% 8.516 -30.9% 5,883 -0.9% G&A - NIA - NIA - N/A - N/A Local 9,981 0.2% 10,000 16.5% 11,653 -23.5% 8,919 -10.6% Corporate 8,071 -21.0% 6,374 -21.0% 5,037 -7.6% 4,654 -42.3% City service - NIA - N/A - N/A - N/A Professional fees - N/A - N/A - N/A - N/A Total $131,174 -0.7% $130,238 -3.9% $126,807 -13.6% $108,308 -17.2% rating Income S (2,793) 172.31A S (7,305) 279.7% $(28,813) -54.1% S(13,244) 374.2% Interest Expense 16,120 -32.3% 10,911 -7.9% 10,052 -23.5% 7,686 -52.3% Income(Loss)Before income Tax $ (18,913) -2.1% $(18,613) 110.2.1* $(38,927) -45.2% $(20,930) 10.7% Benefit(Provision)for Income Tax 7,754 -2.1% 7,592 110.2% 15,960 -48.2% 8,581 10.7% Not Income(Loss) $ (11,169) -2.1% S(10,924) 110.2°/6 S(22,967) 43.2% $(12,349) 10.7% Chang*in Consumer Price Index 1.9°,4 2.3•/6 3.4% Eng Ratio EBIT 103.1% 105.87* 123.04 112.2•/ _.. _.. .. . Exhibit D-5 Contra Costa County Morgan Territory Summary of Revenues and Expenses (Year End Sept.30th) gVag 95- 19% 95 1995 96 199* 97 1997 97 Revenue Commercial $ 12,844 -35.2% $ 8,319 -45.6% $ 4,525 -2.5% $ 4,414 -65.6% Residential 45,955 -1.6% 45,224 -0.7% 44.922 1.4% 45,545 -0.9 Roll-off 903 -100.0% - N/A - N/A - NIA Recycling 2,565 79.4% 4,602 -51.9% 2,213 -60.4% 875 -65.9 Total S 62,267 -6.6% $ 58,145 41.2% $ 51,$60 •1.8% '$0,834 -18.4% Operating Expenses Disposal $ 31,353 -50.3% $ 15,584 95.0% $ 30,386 -37.8% $ 18.901 -39.7% Direct labor 13,740 14.9% 15,783 25.0% 19,728 25.5% 24,759 80.2 Franchise fees - N/A - NIA - NIA - N/A Tn *ing and equipment 6,429 4.7% 6,732 38.3% 9,307 1.4% 9,438 46.8% Depreciation and amortization 5,849 -0.5% 5,821 12.7% 6,562 -33.2% 4,384 -25.1% Other operating expenses 3,358 13.8% 3,821 22.0% 4,660 -26.2% 3,440 2.5% G&A - N/A - N/A - NIA - N/A Local 5,032 6.4% 5,355 39.0% 7,441 14.2% 8,495 68.8% Corporate 2,576 -16.2% 2,160 39.6% 3,016 -8.3% 2,766 7.4% City service - N/A - N/A - N/A - N/A Professional fees - NIA - N/A 12 -100.0% - N/A Total $ 68,337 -19.1% S 55,256 46.8% S 81,112 -11.0% $ 72,183 5.6% lopmting income S (6,070) -147.81A $ 2,889 -1119.5% $(29,452) -27.8% $ (21,348) 251.7% Interest Expense 5,144 -28.1% 3,698 62.8% 6,021 -33.6% 4,001 -22.2% Income(Lose)Before Income Tax $(11,214) -92.8% $ (809) 4284.8% $(35,473) .28.5% $ (25,349) 126.1% Benefit(Provision)for Income Tax 4,598 -29.3% 3,251 347.4% 14,544 -28.5% 10,394 126.1% Net Income(Lass) $ (6,616) -136.9% $ 2,442 -957.0% $ (20,929) -28.5% $(14,955) 126.1 Chang*in Consumer Price Index 1.9% 2.0% 3.4% Operating Ratio EBIT 108.9% 94.0% 138.3'h 129.6'b Exhibit D-6 Contra Costa County Mt.View Summary of Revenues and Expenses (Year End Sept 30th) - a 1994 95 11986 88 1988 87 4997 97 Revenue Commercial S 935,202 -18.2% $ 765.342 -58.3% $ 334,418 1.5% S 339,519 -63.7% Residential 969,017 -22.1% 754,988 -45.7% 410,234 -1.0% 408,078 -58.1% Rolloff 229,749 58.2% 363,340 48.2% 538,333 -60.0% 215,354 -6.3% Recycling 104,961 16.0% 121,706 -54.6% 55,210 -48.8% 28,354 -73.0% Total $2,238,929 -10.4% $2,005,376 -31.3% $1,338,196 26.1% 888,306 -55.8% Operating Expenses Disposal $ 751,638 -20.0% $ 601,480 -12.3% $ 527,569 24.0% 3 401,214 -48.6% Diractlabor 329,141 1.2% 332,927 -12.1% 292,797 -17.2% 242,539 -26.3% Franchise fees 14,000 7.1% 15,000 0.0% 15,000 32.3% 19,849 41.8% Tricking and equipment 221,092 -3.3% 213,820 -6.50/c 200,013 -10.4% 179,166 -19.0% Depreciation and amortization 180,894 -1.0% 179,041 -4.0% 171,941 -8.0% 158,195 -1211% Other operating expenses 102,168 0.6% 102,794 4.35x0 107,250 -38.7% 65,745 -35.7% G&A - N/A - N/A - N/A - N/A Local 182,584 -2.0% 178,981 -9.4% 162,117 2.6% 168,295 -8.9% Corporate 80,945 -11.0% 72,043 -20.5% 57,279 7.8% 61,716 -23.8% City service 3.410 104.1% 6,959 70.4% 11,860 26.85'0 15,040 341.1% Professional fees 628 2708.3% 17,636 -97.4% 453 -100.05'0 - N/A Total $1,866,500 -7.8% S 1,720,681 -10.1% S 1,848,279 •76.3% $1,309,759 -29.8% Operating Income S 372,429 -23.6% 3 284,715 -173.1% $ (208,884) 64.8% 5 (320,454) 186.0% Interest Expense 161,663 -23.7% 123,313 -7.3% 114,331 -27.3% 83,131 -48.6% Income(Coes)Before income Tax S 210,766 -23.4% $ 161,402 -288.8% $ (322,415) 28.2% 5 (403,688) -291.5% Benefit(Provision)for Income Tax (67,380) 12.4% (75,730) -274.6% 132,190 25.2010 165,470 -345.8% Net income(toss) $ 143,386 -40.3% $ 85,872 -322.0% S (180,226) 2112% 5 (238,116) -286.1% Change In Consunner Price Index 1.9% 2.6% 3.45G Operating Ratio ESIT 80.1•h 83.6% 1 113.6% 124.5% , _. _. .. ... .......................................... -2), Exhibit D-7 Contra Costa County Pacheco Summary of Revenues and Expanses (Year End Sept 30th) g 1994 95 1986 96 1996 9T 1987 117 Revenue commercial $ 385,844 0.5% S 367.477 3.6% S 380,840 -3.1% S 368,812 0.8% Residential 114.600 3.3% 118.343 7.6% 127,294 2.8% 130,861 14.2% Rolloff 87,803 -0.1% 87,510 -4.7% 83,424 12.9% 94,147 7.5% Recycling 37,383 27.7% 47.719 -51.9% 22.949 -53,796 10,823 -71.8010 $ 606430 24% $ 621,049 -1.1% S 614,307 -1.6% 604,443 -0.2% Operating Epensea - Disposal S 208,105 -36.6% S 130,680 5.3% $ 137,572 -23.1% $ 105,743 48.7% Direct labor 101,795 -18.4% 83,088 7.8% 89,537 -49.6% 72,031 -29.2% Franchise fees - N/A - WA - WA WA Trucking and equipment 80,882 -3.2% 58,728 -1.0% 58,131 -15.4% 49,173 -18.9% Depreciation and amortization 43,504 -3.6% 41,959 2.7% 43,084 -31.5% 29,524 -32.1% Other operating expenses 28,158 -10.8% 25.170 25.8% 31,600 42.7% 18,114 -35.7% G&A - N/A - WA - N/A - N/A Local 51,285 -6.7% 47,834 15.2% 55.083 -11.5% 48,756 -4.9% corporate 30,030 -25.80/0 22,338 -30.0016 15,827 23.4% 19,288 -35.8% City service - N/A - N/A - N/A - WA Professional fees 2,453 -100.0619 - WA 73 -100.0% - NIA Total $ 623,990 -21A% $ 409,783 5.1% $ 430,707 -20.5% S 342,626 -34.6% Operating Income $ 61,440 169.4% $ 211,256 •13.1% S 493,600 42.6% $ 261,616 221.5% Interest Expense 59,979 -36.3% 38,228 -18.4% 31,196 -20.6% 24,788 -58.7% Income{Loss)Wore income Tax S 21,461 706.2% $ 173,028 -11.9% S 152,404 86.6% S 237.050 1004.8% Benefit(Provision)for Income Tax 81799 -905.7% (70,897) -11.9% (82,488) 55.6% (97,i90) -1204.8% Net Income(Loss) $ 30,260 237.6% $ 102,131 -12.0% $ 89,916 63.6% S 139,659 362.2% Chang*In Consumer Price Index 1.9'X6 2.6'X. 3.4% parsting Ratio ESIT 84.5% 1 48.694 67.4% 23.6% _. ... . ............................................... Exhibit D-8 Contra Costa County Pleasant Hili -Uninc./Clyde Summary of Revenues and Expenses (Year End Sept.30th) ;C 411 g....:.::::::::::::::::::..'...Si ..- S1 ..- .....fig:... ............... •...........•.•.•.,..:..•.•..,.: :::199+t::: ':::: 5:::: >::1l95.:: .;:: »:: ':.:11198:5: ..•..i47.>.:' >;:1119X'::: :`': T:<: Revenue Commercial $131,264 8.5% $142,424 -4.9% $135,510 -0.2% $135,271 3.1% Residential 52,239 1.4% 52,953 1.6% 53,790 3.2% 55,498 6.2% Roll-off 102,901 -18.3% 84,097 -3.5% 81,152 -7.3% 75,211 -28.9% Recycling 1,644 2,4% 1,683 -51.9% 809 -49.3% 410 -75.1% Total $288,048 -2.4% $281,157 •3.5% $271,2$1 1.8% 288,390 -7.5% Operating Expenses...................... Disposal $ 94,432 -8.0% $ 88.847 1.6% $ 88,269 -2.1% $ 86,407 -8.5% Direct labor 2$,548 37.5% 38,513 -3.9% 35,095 3.5% 36,319 38.8% Franchise fees 14,106 -46.3% 7,582 25.1% 9,486 -1.4% 9,354 -33.7% Trucking and equipment 21,455 22.0% 26,169 -4.6% 24,956 13.1% 28,226 31.6% Depreciation and amortization 15,798 12.7% 17,802 -27.6% 12,894 -30.2% 9,006 -43.0% Other operating expenses 9,889 10.0% 10,878 34.9% 14,677 -29.5% 10,355 4.7% G&A - N/A - N/A - N/A - N/A Local 18,876 -1.7% 18,549 10.8% 20,553 12.1% 23,049 22.1% Corporate 12,242 -3.8% 11,774 -27.1% 8,589 21.1% 10,404 -15.0% City service - N/A - N/A - N/A - N/A Professional fees 1,092 -100.0% - N/A - N/A - N/A Total $214,438 0.8% $216,114 -0.7% $214,519 -0.7% $213,121 -0.6% Operating income #`'73,$10 -11.8% $ 65,043 -118% $ 5$,742 -6.1% $ '53,269 -27.6% .................... Interest Expense 24,447 -17.6% 20,153 -14.9% 17,142 -0.7% 17,016 -30.4% Income(Loss)Befors income Tax S 49,1$3 -8.7% S 44,890 -11.8% $ 39,$00 -8.$% $ 36,253 -26.3% Benefit(Provision)for income Tax (20,157) -8.7% (18,405) -11.8% (16,236) •8.5% (14,864) -26.3 et income(Loss) $ 29,006 -8.7% S 26,485 -11.8% S 23,3$4 -8.5% $ 21,389 -26.3% Change in Consumer Price Index'.... Operating Ratio......................... EBIT 63.7`1. 69.9% 73,$% 75.0% Exhibit D-9 Contra Costa County Rodeo Summary of Revenues and Expenses (Year End Sept 30th) it - '1994- 95 1998 98 1998 97 1997 97' Revenue Commercial $ 233,662 -4.0% t 224,633 -3.8% $ 218,090 -4.1% $ 207,225 -11.4 Residential 542,159 -9.0% 493,641 0.60/o 497,344 -0.5% 494,743 -8.8% Roll-off 192,355 -16.3% 161475 7.5% 173,070 -29.2% 122,587 -36.30/0 Recycling 41,913 26.5% 53,015 48.2% 27,454 -62.9% 10,174 -75. Total $1,010,289 -7.7% $ 933,394 .2.0% S 913,988 -8.7% 834,729 -17.4% Operating Expenses Disposal S 469,191 -44.0% $ 262,855 AM% '# 231,425 8.5% $ 246,360 -47.5% CNrocx labor 187,315 -11.2% 188,425 7.5% 178,848 10.60,0 197,835 5.6% Franchise fees 31,415 6.4% 33,433 -1.6% 32,904 2.3% 33,667 7.2% Trtx*ft and equipment 102,994 -3.3% 99,621 16.9% 116,414 -9.4% 105,424 2.4% Depreciation and amortization 82,937 -4.8% 78,994 6.0% 83,742 -10.0% 75,381 -9.1% Otlw operating expenses 51,849 9.8% 56,716 10.8% 62.862 -34.7% 41,058 -20.5% GSA - N/A - N/A - WA - NIA Local 99,338 -9.2°h 90,184 26.00/0 113,583 -9.7% 102,589 3.3% corporate 44,675 -14.4% 38,241 -18.8% 31,072 3.8% 32,191 -27.9% City service 1,877 147.0% 4,637 25.0% 5,797 -31.5% 3,972 111 A% Professional fees 3,027 -23.7010 2,311 -91.0% 208 -100.00br - N/A Total $1,074,418 -22.4% $ 833,417 2.8% i 858,853 -2.1% i 838,478 -22.0% Operating Income $ (84,129) -254.3% $ 99,947 -42.3% $ 87,106 -106.8% $ (3,749) -94.20 Interest Expense 89,223 -28.8% 65,455 -5.3% 62.017 -25.0% 46,534 -47.8'Ya In"me(Lose)Before income Tax $ (183,382) -121.8% $ 33,492 -114.7% $ (4,912) 923.7% $ (50,283) -67.2% Benefit(Provision)for income Tax 62,874 -125.0% (15,714) -112.8% 2,014 923.6% 20,616 -67.2% K Income(Loss) i (80,478) -119.7% i 17,778 -116.3% $ (2,898) 923.7% i (28,887) -87.2% hanSe M Consumer Price Index 1.9% 2.6% 3.4% Ratio Eaff 106.0% 88.1% 93.3% 100.6% _. _._.. I _ APPENDIX E s . 6- Appendix E BFI-P'HBD Tonnage Exhibit E-1 in Appendix E includes Tonnage data is derived from BFI- a summary of BFI-PHBD tonnage for PHBD route master reports and weighed fiscal year end September 30, 1997. loads reported from the Contra Costa Tonnage data is included for residential, Transfer and Recovery Station. County commercial, and industrial sectors for tonnage for fiscal year 1997 was 23,588 three separate portions of BFI-PHBD tons, or 8.77 percent of total PHBD business: tonnage of 268,864 tons. Of this p Non- CCCSWA-County amount, 45 percent was residential, 33 percent commercial, and 22 percent p Non- CCCSWA-Non-County industrial waste. CCCSWA. NewPoint Groupa Page E-1 ..... _ Exhibit E-1 Pleasant Hilt Bayshore Disposal, Inc. Summary of Tonnage by Service Area (Year End Sept.30,1997) Resuioader SidelmW Total Rearloader 5ideioadar alai Total Ansa Res Mal Residential Residential Commercial Commorcral Fmntioader Commercial Industrial Total W13D-Non4CCSWA Gusty Alhambra Valley 614.83 - 614.83 48.13 - - 48.13 91.08 754.04 y Point 2,010.60 6.71 2,017.31 562.54 2.64 1,300.82 1,866.00 968.34 4,851.65 anyonlTasaajara 223.15 0.50 223.65 87.73 - 909.58 997,29 112.12 1,333.06 Concord 183.79 16.18 199.97 72.46 3.66 4.00 WW2 611,47 891.56 Morgan Territory 309.57 - 309.57 44.70 - - 44.70 - 354.27 View 3,844.65 22.61 3,867.26 151.03 0.77 2,018.78 2,170.58 1,384.80 7,422.64 Pacheco 463.56 - 463.56 94.83 4.74 1,061.10 1,160.67 327.39 1,951.62 Pleasant Hill-Uninc. 293.05 - 293.05 13.05 - 625.68 638:.73 749.33 1,681.11 Rodeo 2,740.60 - 2,740.60 709.52 - - 709.52 897.81 4,347.93 ubtotal County 10,683.80 46.00 10,729.60 1,783.99 11.81 5,919.94 7,715.74 5,142.34 23,887.88 Percent of Total County 45.5% 32.7% 21.8% on-County Antioch 1,873.67 28,693.52 30,567.19 642.37 1,343.73 11,226.41 13,212.51 8,588.44 52,368.14 &eescia 7,401.18 44.95 7,446.13 $02.51 10.05 7,013.10 7,825.66 5,128.13 20,399.92 Clayton 4,382.73 641.86 5,024.59. 318.51 24.06 - 342..57 924.71 6,291.87 martinez 9,079.70 0.92 9,080.62 658.36 6.30 5,232.07 5,896.73 5,103.80 20,081.15 Pleasant Hill 5,857.96 8,189.32 14,047.28 1,166.40 132.62 7,526.62 8,825.64 4,471.12 27,344.04 Indust-Refineries - - - - - 7,448.73 7,448.73 rtaltocated - 4.40 4.40 - - 136.76 136.76 1,191.77 1,332.93 Subtotal Non-County 28,595.24 37,674.97 86.170.21 .31588.15 1,518.78 31,134.96 38,239.87 32,85$.70 135,266.78 Percent of Total Non- nty 48.9% 26.8% 24.3 Subtotal PHBD-Non CCCSWA 39,279.04 37,820.97 76,900.01 5.372.14 1,578.57 37,054.90 43,955.61 37,999.04 158,854.88 torrent of Total PHBD- Non CCCSWA 48.4% 27.7% 23. PH8D-CCCFWA CCSWA-County 1,917.64 9,433.49 11,351.13 350.28 126.55 2,533.95 3,010.78 2,081.14 16,443.05 DafviNe 1,928.96 9,899.25 11,828.21 333.94 - 3,091.13 3,425.07 4,420.64 19,673.92 Laybyette 3,003.34 4,051.64 7,054.98 311.75 18.59 4,262.36 4,592.70 2,326.16 13,973.64 Moraga 769.14 2,519.58 3,288,72 281.74 35.15 1,996.80 2,313.69 1,521.62 7,124.03 Orinda 2,736.11 2,973.49 5,709,60 103.85 9.16 1,651.22 1,76423 1,387.37 8,861.20 Walnut Creek 2,553.38 8,667.13 11,220.51 1,145.70 183.55 20,285.99 21,615.24 11,097.61 43,933.36 Subtotal PHBD- CCCSWA 12,508.57 37,844.68 50,453.18 2,527.26 373.00 33,821.45 36,721.11 22,834.54 110,009.40 Percent of Total PHSO- CCCSWA 45. 314 20.8 Total 82,187.61 75,168.85 127,353.16 1 7,899,40 1,901.57 70,876.35 80,677.32 60,833.8$ 268,884.08 Percent of Total 47.4% 30.0% 22.6% APPENDIX E Appendix F Survey of Similar Jurisdictions Appendix F includes results of our • Orinda survey of similar jurisdictions. Unincorporated County Jurisdictions included in the survey are listed below: • Walnut Creek ❑ Contra Costa Solid Waste ❑ Antioch Authority ❑ Clayton • Danville ❑ Concord • Lafayette ❑ Martinez • Moraga ❑ Pleasant Hill. NewPoint Groue Page F-1 EXH BIT F-I QQ fR� VVRR W NG� �n ,QQn a dddSSS VS d� C lei a� JJSS caw s66.. to � � •Yah == � � � s� N � �_ : � � e .c < < < � ♦�Me{ W W � N � F c i4 i °g 1� yQ{ pb 6 Y ' '► � GI3 � � f(J IT ''"N 7+ .� ♦'+ d � x K x X X z K r" � .� dl 00 r � yy� The 'n x }� nevi � `b Q' H � •� _. •�•• a v'r N Va7 NO Naba N O ChII37t1 1-2C� ooo N t N f Vi fri T V'$ 49 00 i19 < d d :;: N d .•.•.a+. z Z h Z N mZ z . M r7. +Gi d Q Q Qom" Q .•.•'G' 'j et O N h Z z Z z z z ':• rZ Y5 z Yf vi of v� ': d d �f d d d •:• < d .� z z ci ci Z z �. z z z z C �, a :�: �:� mar• � '� � ',' v a er• cn �> a � a• � d d d d `' d v, w et v, N rpt O C11 ... N M CC tV ye� vi z z , Z :•: z .,.i 06 z Ct d d d d cc *�+ _ � c; ry .o N oo �o 00 4"L1 er :< Z z z z fl CO p• S N P`1 N N h t- — M d A `� 00 '�: •! t .r. e+� Nh t_i e+i� NCq sf z z z z •:• z z z z:.:�: N ... N et • N ao th v1 r: O0 er z z N .•• .� M V' N M �D C+ .• N N M h . .ami JAI �, v, v, a 0 :- r� ww t+ v� N +n :'- a 0 oo er ON - m r a m r; Trr ori N vi z z z Q Cl ^ N :: N N Wl m of •: W, 0� oo r• :: o 0o %0 ® !V N M N N R •: `G r• M t4z Z z z r� 00 ... ..» ,.. 4 o as '` C. C C C 04 3C C C tl NM 01 •;• a N +* h w o aua V 0 o c c co cc t � � L 9a Oa +O�a ba:'. Oa O/J ba �f„'a•. t 1 f ,. EXHIBIT F"3 R vs R �C 49 Cri +t C6 .•.• C v) O� CA v c� is oo +d o oc 00 �c ;: cs r N 0® C> v, 00 e} N N v5 00 N V'1 M R 10 N el 4 00 fi91 O R N •:-: 00 00 ;; 00 N N N9 C19 V- ' ` :•:: v� N N N iyf Gal IS C p .� Q 4 Q Q 00 vi Z tri ri r } GT M O CT Oo R a f- a a N M w N R M M �C 00 et R 00 a✓ R U'1 ey1U`1 try �D P`1 8 V"1 a S G7 S o c tri e o a c C5 vi o v; V' Ch 2 00 '.-. Q1 00 00 � ':•: M d' M tl'1 K! N C4 N V1 :•:• M N M 'W VJ 00 1-4 �1 4111 mm C ... CSS ' ' ev vi 00, t-* r 00 ro w!• C1 :•: Ko en m M v M 0T N N M Ir 00 E 64 a :, ?1 .00 tR 8 $ 888 p a.r a N +n R C vi 00 N co c3 •::: M .r M a, N p N V .• M tl fV •.•. M N M t! 00 OWN C�7. %W fA Ito s�1 Mrl :(�} „ a e••i v'r M +n O CR a W1 h y 00 �C et 00 C N 00 R •:•: M of M CT N N C et +T :•:• M N M et tiD 00 v, app kn ..... R •!` N eY N 'tea• Oa0 M N M 4t �C 000 - CN ON X +O M Ot 00 O a O S 8 8 Lr R of N 'et er CT 00 .•.' M -} M v `1 N IMI N �1' �+ N 00 •:•: M N M tt 00 41x1 © H N h N . .. .G 0 4 c? u M u :• a, cr u � u .. � cs 1n N a n a EXHIBIT F-4 L Lo N Or• 00 M � M Y V M Y1 'L7 y uiv, v a e� o la < G ;ppryry !A Z .•:•:1`' � � ;:_:;z � � � •... w� v� n� O h O: .N EXHLBrr F-5 R8 S8 z3;:.:. xz� �xxz .;.:.a... y, 01 o°i ' �6.. Y M vim.'.'.' < < < < �Ky d U 94 Of < a < t < < < < +� y„ ZS it a GLT. ►9 W5 Fi .. ,.• � �0, e4i �i, nr .: V � r' a a < <:•:': �c < < <''' d d d < d a z I y(,,' a W "pp' M•'•'• � '� � 'k°:;�;: yjK S<S `fity �t < !�C ys r4i wi :•:•: .'4, ��q +`�, +F�n° w $ :�i fin'• a• b', _..__... ............. . _. .. ........ ........ _. _. __.. ......... .... . . _._.. ..... ..................... APPENDIX G r .. _. .......... Appendix G Comparative Local, Regional, and Corporate General and Administrative Costs Exhibit G-1 in Appendix G provides a year period from 1994 to 1996 for a total of comparative set of data for determining a 16 data points. The average local,regional, reasonable level of total BFI-PHBD general and corporate overhead for the three year and administrative costs. This data was period was 13.2 percent of total expenses. obtained for seven companies over a three NewPoInt Group's Page G-1 = ( EXHIBIT G-1 Comparative Local, Regional, and Corporate G&A Allocation Expressed as a Percent of Expenses (1894 to 1996) 1994 1895 1886 WMAC 14.6% 14.1% 13.5% WMAC- Fremont 10.8% VSS 11.6% 11.3% 13.3% RSS 13.7% 14.7% 10.8% CDS 11.7% 16.1% SARR 16.4% 0SWD 16.1% Sunset 10.4% 11.4% Average 12.5% 13.8% 13.0% Average of 1994-1996 13.211A APPENDIX H Appendix H Proposed Residential Rate Structure Appendix H provides the proposed summary of estimated annual revenues with unincorporated County residential rate the absolute rate range of$1.51 per structure with an absolute rate change of customer per month. This increase results $1.51 per customer per month. This$1.51 in an estimated$1,653,670 in total change is applied uniformly to each rate in residential revenue for base year 1998. the rate structure. Also included is a NewPoint Groue Page H-1 6�s EXHIBIT H-1 s 40 x '^°.^."..:or: �tiv�atia:aoo6,-. ,dr.�•,a3e"�c'°ax�.r�iFv' n<M.s:r€$.41"tv'e d`+o"��5::°:Fedi.".'.".�' �1�nw�ie'�J�a:•v�4r`"b:��''i► G a M $ � N M W g < a « a«« «a< <a<a<aa aaaaa < aa < g g zzxz'z3Z zzzz3x z3x`3z zzw g , a � �^ NNN N... NNN NNN NN N NNNNN NN' NNNNN NNNN NNNNN NNN NN N :: NN '.NN ss —. N� 'P52.9A .ASSAM A a SJR d33 3 33333 3 333 3 333 . 0333 -'0333 3 33 >33 00 0 , �� ooc� o�a ���` oo� � dao mww �wwww w wu�iwww �cduww �r�u�t� - a� lid eN+`I Al 6 - t EXHIBIT H-2 t Id m '"`^"'�'�10"d�41o�',`.`,S� �'�''e�n"�w'"�^'.nv,N+o� .. ••:":�iii���b"��.�Nnnspe,...�.. .., g , gas �c a a n U U e 'O L � zz`«z< a �s aN N N N N N N N N N N N N N N N N N N N N N N N N N -N N N N N N N N N N N N N y{ �■+ : may+ r+ y :':!� sus s � sss as <AA It t I N N N N M M m eN,F T'7 fN+,s M m M tNn M '7 eN+S rN.f M tNR M wNi Y Y Y._ P P a a Y moi' -A N N N H A Ig A .......... __ EXHIBIT H-3 m t m S Ci 77 w <-r w a � a v . Sap N � M • r , 1 . , t 1 , , • , a , , , , a . , . , • . , t , , 1- , , , , , r • , , • • F h o ti o: rf . • , , . , . , , , aa „ • • . . , . . .. 'D ►� ° � «« a «<««< « <«« ««< «« „� - 888 � $ $ zzzz xzzzzzzzz zzzzzzz zzzzz zzzz2 VkwN 2 a PAIV Ig NNHN HNHNMNNNN NNNNNNN NHNNH N N N N N Nrh ch NNN s9 As 3333 1 9oozo z° �000 ' no z `8 $ 91 w a• - A IL ����i. �MeN+7 rNn,Hw rNn m.Nn,Nn n�nrNn��w�eNn rNin�eryn M. aHwnnn YY �� Y: a�f�� �. �'q` �p APPENDIX I _....... .._...... 1.111 . 1111. ....... ...... ........ ............__....... . .__..... ......... _111.1._. ...... . ......... ... Appendix I Comparative Survey of Franchise Fees Conducted By Contra Costa County Appendix I includes a survey of percentage of gross revenues of the hauling franchise fees collected by 21 other similar company. Only five of the 21 surveyed jurisdictions to unincorporated Contra charge a flat fee. Of the remaining 16,a Costa County. This survey was conducted total of eight,or 50 percent collected 5 by the Contra Costa Community percent of gross revenues,and another six, Development Department. In general most or 33 percent,collected an amount greater jurisdictions calculated franchise fees as a than 5 percent of gross revenues. NewPoint Group Page 1-1 __ _. . _ .. ......... .... ......... ..... .................._.__................. .......__. ....... ..._...... .....__.... ......... ...... _._. . .. _. EXHIBIT I-1 Franchise Fee Survey Performed by Centra Costa County i:'i'�:.`•:•F:•?::::r:•i is;:ii ilii :]FY �(�, :,:::,.:x::y.:..::.:':;..,.,�..,........�:.•v:,:..............v•.;...•,;. ::.i... .:i:?;?rryivi;•}.?•:}:i}}:ii:;:v:v:i}:}::::+�:y•}:v:4:::?Ji::^:??J:?;:•is?:}:::•:y:;i;%?;}:.{••i::;:f::;• ..•::;:.v:::,;v;:::.v:,:•::.r•i:�$�:•i;;i;:;=:;•-:}:^}}iii}}}}:::}:}i$iiii}iii}j}i'r':ti}i'r'i}i:•}:�'r'}:•:fi v:•:}:}:}:.:r:•: y ::. :.:: :.. •:::,..f.:.........y�;:. f::.:;.^trvfrff:::v;......•t::;:::::r:::•:.+.•r:v::.v:..r:x:::::::::.: .....:•:r::::: � r:::::;�.;• ...;:r::•:::::...yr.v...;.4::..}vv;^.;..-.:......}:i}:.iiia?•:•}:?•:}:?•Y.;.?.}:.}'::.n...., :.. t.:}.}..:r..:.,n...•r.......r.f...r...,......,.n................:.......:.......:.....r.r .....r.r.}.r...... .......1..:�::::?•.:t:C..... :.'fr...,,..,.. ...:•.:::;r,::::•::.v•x. :,:..?...........v.•::,,.::v.,..hy................. .;.;.;.;...:•;:::...::::::::::.i'6'v'•:i}i•:{L•;'•}}>}'fi'• :=;:}i:::�;}:•:•:�::::?G•};�:4i:}iii}.., ,;:,.::r.+:}is;,'r'v:a:r.,.v,f,,;{,::.:`r...;'?r:S:3:�:Si;:::>::;;;iii}i}}}:;^}i}:n:}}}:•}:^::;.�.'r:?;.}}}.::n•i::.}}:•....:::::.}}}:•}:oy..i:y::.•r..t.}i.:.:'......:. ... .vf:,v:f;-:::v.•:••.�...::::.v:.:rr...,., ......v::::::nv::::4::::::}:}::::::::::.v::::.v;::::•i}:•i}ii:4:;::::;:}i::::.v:,v;:•:::::i•ii:=}:•}:::::::..:.::f.;:r:f:.v:r.v:..,...,... .y ii:::•::?.................:.......... wJ{:.;.:.:..rr. .}t??v:di}i;.}}}?;.;?;::i?':}i:•i?}i}"•:}}:.:{.}v: .:..v:rrr.•r:::.:.•:....:.:.v:r:::r.-.v:rnr.•.:::::::::::.:::rr:::nv:::.::v:::::::::::::::::::::. ..... .. ,.. ,�....«....�.�,.::::::. ev:.:=:::._...:;::?..-.:nvr::rr,:::t.r.s, v:v:::::::.:v::.•::::.r:......:::r:::::::::r........ }::::r::i,�:i=i}:�:::}:•:•}: v•:: .... .. ;.:.....y v:.fv,.Y•.•::.v:::•r:r.w::::.v::}ii}}::•::v::::::::::^:i??•i:•:??:ii}ij}ii:•i;•}>i:v:.•r:.:•f:.:t:::.�,:•::.•:: c. :.:..,,r.;'v`•}::::.•.:•:.:•:::x::.v:.:...........d::;::{•}'•i}}.}•:.v:::::::;::v:;::•::::::r:;:;n vii::..iii:>.?i�ii;:i::.i•:;}:.:}::}.j?;:ri.•y:i:?= Vim::::: ....4.e.n.:::::r:.w:::::::::::.i::r..{::::v:::::.. .....r.......r.,,r:..:..}:;}?;r......................�...,................ r..........:=ir.v:w:^.:.�::•-:::::::•:.-::::::i.:::•........rv•:•.:n:v::r::.:.•.^•..w:.:::.i•^:.v:::::.•.w;::i::::::::::::::::::.::::.v.v:.v.:::::n.r:t:.v::v.::v.:.....:...........................................f..,s••::..,..,.v.:;. :}.v.....n........ti...y....t.�..�y..,........v:v ?.:}i}wi'.^i:.::.:'..,.•,}i:>si'.•i:....��� Y•t:E�i!is3Sill;`: 3iif3ri::3i::: as3'E>'isi�i% :'�ic:`i;3i; i;i;i;;:iif .�.•. Antioch X $ 140,970 Central Contra Costa Solid Waste Authority: Danville 5% 199,000 Lafayette 5% 105,000 Moraga 5% 70,000 Orinda 5% 96,002 Walnut Creek 9% 536,000 Unincorporated County 5% 140,000 Clayton 5% 40,000 Concord X 800,000 EI Cerrito 6.5% 170,000 Hercules X 62,500 Ironhouse Sanitary District 2% 40,000 Kensington 5% 30,000 Martinez 10% 440,000 Pinole X 38,496 Pittsburg 7% 464,137 Pleasant Hill 10% 441,000 Richmond 2.5% 208,500 San Pablo X 120,000 San Ramon 10% 275,000 Unincorporated West County 5% 90,504 ,