STAFF REPORT. Consideration of Request Submitted by Athens Services for Rate Adjustment SUMMARY

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1 City of San Gabriel STAFF REPORT Date: To: From: Subject: June 16, 2015 Steven A. Preston, City Manager /\. Thomas C. Marston, Finance Directo~ Consideration of Request Submitted by Athens Services for Rate Adjustment SUMMARY For many years, the City has contracted with Athens Services to provide residential and commercial waste disposal services to the residents and businesses of San Gabriel. In accordance with the terms of the contract, it is necessary for the Council to endorse all proposed rate adjustments. The most recent rate schedule was adopted by the City Council in June Staff recommends that the Council approve a rate schedule for Athens Services providing allowable rates the Company may charge for its services within the City of San Gabriel. I. BACKGROUND For many years, the City has contracted with Athens Services to provide residential and commercial waste disposal services to the residents and businesses of San Gabriel. In accordance with the terms of the contract, it is necessary for the Council to endorse all proposed rate adjustments. The most recent rate schedule was adopted by the City Council in June An amended and restated agreement to the contract with Athens Services was approved by the City Council on October 17, 2000, amended on December 5, 2006 and amended most recently on January 7, The 2006 Amendment initiated an automated residential collection program that incorporated the processing of all residential and commercial waste, exclusive of green waste, through the Materials Recovery Facility. This program was

2 implemented on February 1, The 2014 Amendment addressed the closure of the Puente Hills landfill and provided for a significantly different new disposal methodology that includes using American Organics in Victorville, building a companion material recovery facility in both Irwindale and Sun Valley, purchasing heavy equipment, transfer trailers and tractors that enable the transport of waste to San Bernardino County landfills. There are three components to the refuse rates; 1) Operations, 2) Disposal, and 3) City Fee. Athens Services is proposing a 2.4 7% increase to both the operations and disposal components of the rates. This 2.47% increase includes a 2% increase attributable to the final of the three phase special rate increase approved with the January 7, 2014 Amendment and a.47% CPI increase. The City Fee is not adjusted by the Athens contract, but is addressed each year through the City's Budget process. This Fee has not been recommended to be increased. Operations Component The Operations component is comprised of collection, transportation and processing costs, each are subject to the final phase of the three phase rate adjustment as well as to the annual increase or decrease in the Consumer Price Index for the previous 12-month period (May through April.) As previously mentioned, the Consumer Price Index adjustment is.4 7% and the final phase of the three phase rate adjustment is 2% for a total operations increase of 2.4 7%. Disposal Component The Disposal component is comprised of greenwaste and rubbish disposal costs, both of which are subject to the final phase of the three phase rate adjustment as well as to the annual increase or decrease in the Consumer Price Index for the previous 12-month period (May through April.) Consistent with the implementation of the amended and restated agreement, Athens Services has proposed a 2.47% disposal rate increase. This is based on the Consumer Price Index adjustment of.47% and the final phase of the three phase rate adjustment of 2% for a total disposal increase of 2.47%. City Fee Component City monthly fees, currently $3.59 for residential and $12.47 for commercial, fund wasterelated activities including street sweeping, waste reduction, recycling, construction, maintenance and operation of waste systems and potential landfill litigation costs. Current charges are funding these activities; therefore there is no proposal to increase City fees. II. ANALYSIS The automated residential and commercial rate adjustments proposed by Athens Services are in accordance with the previously agreed upon terms and conditions of the contract.

3 Athens Services is recommending rate increases become effective July 1, 2015 for commercial and bin service customers and August 1, 2015 for residential. While each refuse customer can make a selection as to the level of service and associated costs, the most common residential service requested is for the automated 90/90 curbside service and the most common commercial service requested is for a 3 yard (one-time per week collection.) The effect of the Athens rate change on these most common classes of service will be a $.73 per month or a 2.2% increase to residential customers and a $4.50 monthly or 2.3% increase for commercial. The table below shows the current and proposed rate structure for these most common classes of service. Current Proposed Residential Commercial $33.05 $ $33.78 $ III. RECOMMENDATION Staff recommends that the City Council endorse the rate adjustments proposed by Athens Services for its services not to exceed the attached rate schedule effective July 1, 2015 for bin service and commercial customers, and August 1, 2015 for residential customers. IV. EHIBITS City of San Gabriel Rate Schedule, July 2015 City of San Gabriel Rate Adjustment, July 2015

4 Athens S May 28,2015 Steven A. Preston City Manager City of San Gabriel 425 S. Mission Drive San Gabriel, CA Valley Blvd. P. 0. Box City of Industry, CA Fax (626) (626) Re: Annual Rate Review Mr. Preston: In accordance with the Amended and Restated Agreement between the City of San Gabriel (City) and Athens Services (Athens), and pursuant to the Third Amendment to the Agreement, we have adjusted the rates for waste services, as referenced in the attached Exhibit, to be effective July 1, The base rates have been adjusted based on the percentage change in the Consumer Price Index (CPI) from April 2014 to April 2015 of.4 7%. In addition, and pursuant to Item #4 of the Third Amendment, the base rates have also been adjusted by an additional 2.00% on top of the CPI adjustment. As a result, the base rates have been adjusted by a total of2.47%, to be effective July 1, Please handle the administrative processing of this annual rate review to make the rates effective July 1, can be reached at (626) to answer any questions or to discuss this rate review. As always, we appreciate our relationship with the City of San Gabriel and will continue providing exceptional waste & recycling services to the residents and businesses in the City. Sincerely, Christian Warner Controller Enclosure Cc: Thomas Marston, Finance Director, City of San Gabriel Johnnie Perkins, Executive Vice President, Athens Services

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6 CITY OF SAN GABRIEL RATE SCHEDULE JULY 2015 SERVICE OPERATIONS COMPONENT GREENWASTE RUBBISH TOTAL COMPONENT COMPONENT COMPONENT NET CITY TOTAL RATE FEE RATE SINGLE FAMILY 90/90 CURB90/ CURB60/ ETRA GREEN 8.44 ETRA BLACK CONTAINER ECHANGE ROLLOUT SERVICE MULTI-FAMILY BIN I 10 OR MORE UNITS PLUS PER BIN COMMERCIAL 3 YARD I COMMERCIAL 2 YARD COMMERCIAL 1.5 YARD COMMERCIAL I YARD I BARRELS (CUSTOMER) EACH ADDITIONAL 9.48 BARRELS (FURNISHED) EACH ADDITIONAL ROLL OFF D o I

7 CITY OF SAN GABRIEL RATE ADJUSTMENT JULY 2015 APRIL 2014 CPI APRIL 2014 CPI %CHANGE: LAST PHASE IN % TOTAL% CHANGE TO RATES % 200% 2.47% SERVICE CURRENT 247% COLLEC & CPI TRANSP. ADJ COLLEC& TRANSP. CURRENT PROCESS 2.47% CPI ADJ PROCESS TOTAL OPERATIONS COMPONENT CURRENT G/WASTE DISP 241% LIFILL ADJ G/WASTE DISP. CURRENT RUBBISH DISP 247% LIFILL ~ RUBBISH DISP. TOTAL COMPONENT NET RATE SINGLE FAMILY 90/90 CURB 90/90 CURB 60/ I I II ETRA GREEN ETRA BLACK CONTMNERECHANGE ROLLOUT SERVICE II MULTI-FAMILY BIN I I 0 OR MORE UNITS PLUS PER BIN I COMMERCIAL 3 YARD I I COMMERCIAL 2 YARD I I COMMERCIAL 1.5 YARD COMMERCIAL I YARD I II BARRELS (CUSTOMER) EACH ADDffiONAL BARRELS (FURNISHED) EACH ADDffiONAL ROLL OFF

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