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Home My WebLink About07/28/2015 02 Refuse & Recyling Rate Study DiscussionBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 2. For Meeting of: July 28, 2015 ITEM TITLE: Refuse & Recycling Rate Study Discussion SUBMITTED BY: Scott Schafer, Public Works Director Loretta Zammarchi, Refuse & Recycling Manager - (509) 576-6421 SUMMARY EXPLANATION: The following items have been enclosed for the Refuse Study Session: 1. Study Session Memorandum 2. Refuse Rate Study PowerPoint 3. Recycling Article - "American recycling is stalling, and the big blue bin is one reason why" Chris Bell of Bell & Associates, Inc. conducted the Rate Study and will be in attendance for the presentation. Resolution: Ordinance: Other (Specify): Contract: Contract Term: Start Date: End Date: Item Budgeted: Amount: Funding Source/Fiscal Impact: Strategic Priority: Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: RECOMMENDATION: City Manager ATTACHMENTS: Description CI Study Session Memorandum CI Refuse PowerPoint Presentation El Recycling Article Upload Date 7/22/2015 7/22/2015 7/20/2015 Type Cover Memo Presentation Backup Materliall STUDY SESSION MEMORANDUM July 28, 2015 TO: Honorable Mayor, Members of the City Council, and Tony O'Rourke, City Manager FROM: Scott Schafer, Director of Public Works Loretta Zammarchi, Solid Waste and Recycling Manager SUBJECT: Rate Study for Solid Waste and Recycling Program The following information is being provided as a resubmission and review of the Solid Waste and Recycling's Program Rate Study and to re-evaluate the implementation of a citywide curbside recycling program. In the fall of 2014, the Solid Waste and Recycling Division presented a rate request to Council. The request was based upon a rate study that showed an annual deficit of nearly $300,000 within the Solid Waste Division due to the fact that rates have not been adjusted since 2008. The City Council decided to defer any Refuse rate increases until 2015. In addition to those findings, a small scale pilot project was conducted in the summer of 2014 to test assumptions and validate cost estimates for a recycling program. Since the fall 2014 presentation a few changes have taken place. • The Solid Waste's Divisions budget was cut by $316,000. • The Fall Leaf Program was eliminated. • The Solid Waste Code Enforcement Position and operations were not funded for 2015. The decision eliminated the ability of the SW Division to address illegal dump remediation in a timely manner. The Code Division has identified 368 dumps within the City that require attention. • The Revenue Fund Balance has fallen to 0.92% with a reserve balance of $54,000. A 12% or 45 day operating reserve, approximately $700,000, is policy per the 2013 City of Yakima Financial Management Policy & Stewardship of Public Funds Report. • At the current rate of expenditures, the projected fund balance will be a deficit of $110,000 by year end. • The Division is experiencing high maintenance and repair costs due to deferred maintenance of and age of its fleet. • The inflation rate has increased 14% since the last rate increase in 2008. • The cost method for assessing the value of recyclable materials has changed with processors requiring the cost for processing be reflected in the recycling fee. Refuse Program Objective To provide residential services that are fair and equitable to all residents by establishing collection rates at the cost of service. The proposed rates have incorporated an additional $1.30 per customer per month to replenish the depleted fund balance to the directed 12% operating reserve. We are requesting rate increases for the following residential collection services. Description Current Rate 32 gallon garbage $10.00 96 gallon garbage $17.02 64 gallon yard 96 gallon yard debris debris $7.01 $12.82 Proposed Rate $15.76 $18.06 1 discontinue 1 $14.82 $ Increase $5.76 $1.04 $2.00 # of Customers 7,858 17,789 1 1,036 1 5,426 The following table breaks out the number of customers for each service and the proposed rate increase impact. Level of Service # of Customers % of customers Current Rate Proposed Rate $ • 32 gal SW 2,706 11% $10.00 $15.76 $5.76 196 gal SW 16,479 64% $17.02 $18.06 $1.04 32 gal SW & 64 gal YD 920 4% $17.01 Discontinued 96 gal SW & 64 gal YD 116 <1 % $24.03 Discontinued 32 gal SW & 96 gal YD 4,232 17% 22.82 $30.58 $7.76 96 gal SW & 96 gal YD 1,194 5% 29.84 $32.88 $3.04 Bin/Dumpster collection rates need to increase by 12.6% from their current rates. The following table summarizes the increases for the various container sizes collected once -a -week. Container Size Current Proposed $ Increase 2 YD Weekly $18.88 I $21.26 $2.38 4 YD Weekly $30.20 $34.00 $3.80 6 YD Weekly $41.53 r $46.76 I $5.23 Ready -to -Serve (Fix Expense) The fixed cost of the refuse collection system in Yakima is recognized as the ready to serve rate, which is $7.53 per customer per month. The cost is incorporated into the rates; however, residents that choose not to have collection services would be assessed this Ready -to -Serve fee which is similar to other enterprise funds such as Water/Irrigation and Wastewater. The Ready -to -Serve pays for the infrastructure of the Refuse Division, i.e., carts, trucks, etc. Diversion Programs The City could expand yard debris collection to all residents that generate yard debris and organic material. A 96 gallon cart would be provided to customers for collection every -other -week. The additional cost for all residents would be $5.51 a month, which is $9.31 less than the proposed 96 gallon yard debris subscription rate. This rate is lower than the subscription because the program cost is allocated over the entire residential customer base. The following table compares the rates. SW Volume Solid Waste Yard Debris Total Current al -la cart Rates Bundled Rate 32 gallon garbage 96 gallon garbage 32 gallon garbage 96 gallon garbage $15.76 $18.06 $15.76 $18.06 $14.82 $14.82 $5.51 $5.51 $30.58 $32.88 $21.27 $23.57 If Yakima did implement a city-wide yard debris program, most residents would not require the 96 gallon cart for waste collection and could choose to downsize to a smaller cart. For future consideration, the City would introduce every -other -week single stream curbside recycling as well as yard debris collection as a sustainable solid waste management alternative to disposal. Recycling and yard debris collection would alternate from week to week with materials collected in a 96 gallon roll cart. The cost for the services is $6.22 for single stream recycling and $5.51 for yard debris collection. Total bundled monthly rate for these two services is $11.73. The following table summarizes the estimated rates for the program. The rates assume customers would be invoiced for all services; however, participation would not be mandatory. Recycling commodity prices has weakened considerably since 2014. SW Volume Solid Waste Recycling Yard Debris Total Current al -la cart Rates 32 gallon garbage $15.76 $10.16 $14.82 $40.74 96 gallon garbage $18.06 $10.16 $14.82 $43.04 Bundled Rate 32 gallon garbage $15.76 $6.22 $5.51 $27.49 96 gallon garbage $18.06 $6.22 $5.51 $29.78 Note 1 - Recycling service provided by Yakima Waste Systems if al -la cart; by City of Yakima if bundled (phased in) 1 CITY OF YAKIMA SOLID WASTE DIVISION 2015 COLLECTION RATE REVIEW CITY OF YAKIMA PRESENTATION OVERVIEW Budgeted 2015 and Projected 2016 Costs Projected 2016 costs compared to revenues Current cash balance of Fund 471 / City policy Detailed cost comparison for each level of service Ready -to -Serve Community Cleanup / Illegal Dump Remediation Future diversion programs Council questions and input CITY OF YAKIMA SOLID WASTE DIVISION FISCAL POSITION • 2015 Budget • Revenues $5,831,599 • Expenses $5,856,268 Deficit $24,699 Increased costs due to inflation and annexation SW Fund balance is $54,468 as of 7-1 1-15 Last rate increase in 2008 Inflation Rate since 2008 approximately 14.1% 3 CITY OF YAKIMA SOLID WASTE DIVISION FISCAL POSITION Revenues Expenditures Income / (Loss) Cash Balance (7/11/15) 2015 Budget $5,831,599 $5,856,268 $(24,669) $54,468 2016 Projected $5,898,836 $6,220,756 $(321,920) $(267,452) FINANCIAL MANAGEMENT POLICY & STEWARDSHIP OF PUBLIC FUNDS Reserve Funds will maintain an operating reserve of 12% or 45 days. • These funds will strive to fund capital replacement reserves to accumulate sufficient funds to replace assets when needed to avoid service disruptions. 12% of 2015 Expenditures is $702,752 45 days of 2015 Expenditures is $722,066 Current balance in Fund 471 is $54,468 (0.93% or 3.3 days) REFUSE FLEET Truck Description Count 2000 Crane Carrier McNeilus 37 yd. frontloacl 2000 GMC Wayne 10 yd. Tomcat SL — Private Drives 2004 Peterbilt Wayne 27 yd. CurbtenderASL 2005 Peterbilt Wayne 27 yd. CurbtenderASL 2006 Peterbilt Wayne 27 yd. CurbtenderASL 2006 Peterbilt Wayne 32 yd. CurbtenderASL 2007 Peterbilt Labrie Automizer ASL 2009 Crane Carrier Whittke Frontload 2009 Peterbilt Labrie Expert 2000 ASL 2011 Peterbilt Wayne 27 yd. CurbtenderASL 2012 Peterbilt Wayne 27 yd. CurbtenderASL 2013 Mack Heil 612-3057 ASL 2014 Mack Heil Frontloader 2014 Mack Rearloader 2015 Mack Heil 612-3057 ASL Total Collection Trucks 1 1 3 1 1 1 1 1 2 2 2 3 1 1 1 22 • The SW Division runs 14.5 daily collection routes • The life expectancy for a refuse collection truck is 7 years. • Over 40% of the City's Refuse fleet is past its useful life. PROPOSED RESIDENTIAL SOLID WASTE COLLECTION RATES Cost Labor Expense Collection Expense Admin Expense Interfund Transfers Disposal Truck Replacement Cart Replacement Total Collection Cost 471 Fund Replenishment WA Refuse Tax (5.1 % of Rate) Utility Tax (15% of Cost) 96 gal SW 32 gal SW $ 2.93 $ 2.93 $ 2.56 $ 2.56 $ 1.63 $ 1.63 $ 1.02 $ 1.02 $ 3.46 $ 1.73 $ 1.66 $ 1.66 $ 0.60 $ 0.43 $ 13.86 $ 11.96 $ 1.30 $ 1.30 $ 0.72 $ 0.62 $ 2.18 $ 1.88 Cost of Service Monthly Rate $ 18.06 $ 15.76 $ ♦ from current rate $ 1.04 $ 5.76 % ♦ from current rate 6.1% 57.6% PROPOSED RESIDENTIAL SOLID WASTE COLLECTION RATES Description 32 gallon Solid Waste r 96 gallon Solid Waste Current Rate Proposed Rate $ Increase # of Customers $10.00 $15.76 $5.76 7,858 $17.02 $18.06 $1.04 17,789 PROPOSED RESIDENTIAL YARD DEBRIS COLLECTION RATES Cost 96 gal YD Labor Expense $ 4.26 $ 2.16 Admin Expense $ 2.26 Interfund Transfers $ 0.78 Disposal $ 1.09 $ 1.41 Cart Replacement $ 0.75 Total Collection Cost $ 12.72 WAB&O Tax (1.5%) $ 0.19 Utility Tax (15% of Cost) $ 1.91 Cost of Service Monthly Rate $ 14.82 $ ♦ from current rate $ 2.00 % ♦ from current rate 15.6% *Staff is recommending discontinuing the 64 gallon service Collection Expense Truck Replacement PROPOSED RESIDENTIAL YARD DEBRIS COLLECTION RATES Description 64 gallon Yard Debris 64 gallon Yard Debris to allon 96 gall Yar Current Rate Proposed Rate $ Increase Customers $7.01 Discontinued Discontinued 1,036 $7.01 $14.82 $7.81 $12.82 $14.82 $2.00 5,426 PROPOSED MULTI -FAMILY / BIN COLLECTION RATES Projected expenses for multi- family and bin collection are estimated to exceed revenues by 12.6%. Estimated Revenue Labor Expense Projected 2016 $ 490,000 $ 134,840 Collection Expense $ 181,435 Disposal / Processing $ 97,378 Admin Expense $ 20,966 Interfund Transfers / Taxes Total Rate Projected Deficit Requested Bin Rate Increase $ 117,290 $ 551,911 (61, 911) 0 12.6/0 PROPOSED MULTI -FAMILY / BIN COLLECTION RATES ontainer Volume 2 Yard / lx week 4 Yard / 1 x week 6 Yard / 1 x week Proposed $18.88 $30.20 $41.53 $21.27 $34.02 $46.78 $ Increase $2.39 $3.82 $5.25 Cost PROPOSED READY -TO -SERVE RATE The fixed cost of the residential refuse collection system in Yakima are included in the ready -to -serve rate. Equipment Expense $ 2.56 Administration Expense $ 1.63 Truck Replacement $ 1.66 Cart Replacement $ 0.43 City Utility Tax $ 0.94 Ready -to -Serve Rate $ 7.22 ILLEGAL DUMPS AND COMMUNITY CLEAN UP COSTS / RATE SW Division has remediated 63 illegal dump sites in 2015. The average cost to clean up each site is $89. The Code Division has identified an additional 368 sites requiring attention. Community clean-up costs are estimated at $5,600 each. 1MI'F Illegal Dump Remediation Annual Cost Community Clean-ups (8 events) Total Clean-up Cost Monthly Cost Monthly Customers (residential and multi -family) Additional Monthly Cost per Customer $38,100 $44,800 $82,900 $6,900 26,039 $0.26 PROJECTED RATES FOR RESIDENTIAL DIVERSION PROGRAMS Combined EOW Recycling and Yard Debris Collection Cost Recycling Yard Debris Total Labor Expense $ 1.20 $ 1.20 $ 2.40 $ 0.96 $ 0.76 $ 1.73 $ 0.67 $ 0.67 $ 1.34 Recycling /Yard Debris Processing $ 0.68 $ 0.60 $ 1.28 Reduced Disposal $ (0.36) $ (0.15) $ (0.51) $ 0.80 $ 0.61 $ 1.41 $ 1.37 $ 1.04 $ 2.41 Total Collection Cost $ 5.33 $ 4.72 $ 10.06 Collection Expense Admin Expense Truck Lease Cart Lease WA B&O Tax (1.5%) $ 0.09 $ 0.08 $ 0.17 Utility Tax (15% of Cost) $ 0.80 $ 0.71 $ 1.51 Cost of Service Monthly Rate $ 6.22 $ 5.51 $ 11.73 *EOW = Every Other Week CITY COUNCIL QUESTIONS Questions Page 1 of 6 the thasbingtort post D.C. Politics American recycling is stalling, and the big blue bin is one reason why By Aaron C. Davis June 20 Tucked in the woods 3o miles north of Washington is a plant packed with energy -guzzling machines that can make even an environmentalist's heart sing — giant conveyor belts, sorters and crushers saving a thousand tons of paper, plastic and other recyclables from reaching landfills each day. The 24-hour operation is a sign that after three decades of trying, a culture of curbside recycling has become ingrained in cities and counties across the country. Happy Valley, however, it is not. Once a profitable business for cities and private employers alike, recycling in recent years has become a money -sucking enterprise. The District, Baltimore and many counties in between are contributing millions annually to prop up one of the nation's busiest facilities here in Elkridge, Md. — but it is still losing money. In fact, almost every facility like it in the country is running in the red. And Waste Management and other recyclers say that more than 2,000 municipalities are paying to dispose of their recyclables instead of the other way around. In short, the business of American recycling has stalled. And industry leaders warn that the situation is worse than it appears. "If people feel that recycling is important — and I think they do, increasingly — then we are talking about a nationwide crisis," said David Steiner, chief executive of Waste Management, the nation's largest recycler that owns the Elkridge plant and 50 others. [Five ways Americans should — and shouldn't — recycle] The Houston-based company's recycling division posted a loss of nearly $i6 million in the first quarter of the year. In recent months, it has shut nearly one in 10 of its biggest recycling facilities. An even larger percentage of its plants may go dark in the next 12 months, Steiner said. 11 1 /1 1/] 1:.: _/_ ..1: ... ..4..ii:..... ..«a 4L... L.: 711L1'11)1 G Page 2 of 6 The problems of recycling in America are both global and local. A storm of falling oil prices, a strong dollar and a weakened economy in China have sent prices for American recyclables plummeting worldwide. Environmentalists and other die-hard conservation advocates question if the industry is overstating a cyclical slump. "If you look at the long-term trends, there is no doubt that the markets for most recyclables have matured and that the economics of recycling, although it varies, has generally been moving in the right direction," said Eric A. Goldstein, a lawyer with the Natural Resources Defense Council who tracks solid waste and recycling in New York. "And that's without factoring in the external impact of landfilling or anything else," he added. "There aren't a Int of people sayi g, `Semi more material to landfills."' Still, the numbers speak for themselves: a three-year trend of shrinking profits and rising costs for U.S. municipalities — and little evidence that they are a blip. Trying to encourage conservation, progressive lawmakers and environmentalists have made matters worse. By pushing to increase recycling rates with bigger and bigger bins — while demanding almost no sorting by consumers — the recycling stream has become increasingly polluted and less valuable, imperiling the economics of the whole system. "We kind of got everyone thinking that recycling was free," said Bill Moore, a leading industry consultant on paper recycling who is based in Atlanta. "It's never really been free, and in fact, it's getting more expensive." The prnhlem with blue bins Many of the problems facing the industry can be traced to the curbside blue bin — and the old saying that if it sounds too good to be true, it just might be. Anyone who has ever tossed a can into a bin knows what's supposed to happen: Anything recyclable can go in, and then somehow, magically, it's all separated and reused. The idea originated in California in the 199os. Environmental advocates believed that the only way to increase participation in recycling programs was to make it easier. Sorting took time and was messy. No one liked it. So-called Material Recovery Facilities, or MRFs, were created to do what consumers wouldn't. httn•//www wachinatnnnnct rum/lural/rlr-nnlitirc/ameriran-rervelino-ic-ctallincr-anti-the-hi 7/16/701 5 Page 3 of 6 With conveyers, spinning flywheels, magnets and contraptions that look like giant Erector Sets, companies found that they could recycle almost everything at once. Lightweight newspaper and cardboard were sent tumbling upward, as if in a clothes dryer. Glass, plastic and metal fell into a series of belts and screens. Automation was adopted to sort, bale and send to manufacturers all those tons of paper, bottles and cans. From the start, it was hard to argue that glass should have been allowed in the curbside mix. It's the heaviest of recyclables but has always been of marginal value as a commodity. In the rough-and-tumble sorting facilities, a large share of it breaks and contaminates valuable bales of paper, plastic and other materials. Today, more than a third of all glass sent to recycling facilities ends up crushed. It is trucked to landfills as daily cover to bury the smell and trap gases. The rest has almost no value to recyclers and can often cost them to haul away. In recent years, the problem of contamination has spread beyond glass. The problem was exacerbated when municipalities began increasing the size of bins, believing that bigger was better to keep more material from landfills. Consumers have indeed been filling the bigger bins, but often with as much garbage as recyclable material. With the extra room, residents stopped breaking down cardboard boxes. Because a full shipping box sometimes fits inside, even with foam and plastic wrap attached, all of it more frequently shows up at sorting facilities. Residents have also begun experimenting, perhaps with good intentions, tossing into recycling bins almost anything rubber, metal or plastic: garden hoses, clothes hangers, shopping bags, shoes, Christmas lights. That was exactly the case last year, when the District replaced residents' 32 -gallon bins with ones that are 5o percent larger. [D.C. said it was recycling — it wasn't.] "Residue jumped a ton," said Hallie Clemm, deputy administrator for the city's solid waste management division. In fact, so much nonrecyclable material was being stuffed into the bins that after an audit by Waste Management last fall, the share of the city's profit for selling recyclables plummeted by more than 5o percent. 1 +b.o 1,; 7/1 X11111 G Page 4 of 6 That has driven up the city's processing price for recyclables to almost $63 a ton — 24 percent higher than if it trucked all of its recycling material, along with its trash, to a Virginia incinerator. The D.C. Council recently approved a payment of $1.2 million to Waste Management for the contract year that ended in May. In 2011, the city made a profit of $389,000. Little demand for newsprint A large part of the problem for recyclers is lalling global commodity prices — a phenomenon largely out of recyclers' hands. But the negative impact of that trend is amplified by the contents of most recycling bins, because the composite of what Americans try to reuse has changed dramatically over the past decade. Dwindling have been the once -profitable old newspapers, thick plastic bottles and aluminum cans that could be easily baled and reused. With oil prices driving up transportation costs, manufacturers have engaged in a race to make packaging more lightweight. Coffee cans disappeared in favor of vacuum-packed aluminum bags; some tuna cans went the same way. Tin cans and plastic water bottles became thinner, too: The amount of plastic that once came from 22 bottles now requires 36. There was an even more pronounced drop in newsprint. Long a lucrative recycling commodity, it's not a key commodity market. In its place is something known as mixed residential paper: the junk mail, flattened cereal boxes and other paper items that these days can outweigh newspaper in a one -ton bale. One bright spot has been an increase in cardboard. Analysts say that with more people buying items through online merchants, cardboard can account for up to 15 percent of cities' recyclable loads — more than double that of a decade ago. The demand for that paper and cardboard, however, remains at a near -decade low. In China, containerboard, a common packaging product from recycled American paper, is trading at just over $400 a metric ton, down from nearly $1,000 in 2010. China also needs less recycled newsprint; the last paper mill in Shanghai closed this year. [China doesn't even want to buy our garbage anymore] With less demand, Chinese companies have become pickier about the quality. httn7//www washinortnnnnst cum/lural/rte-nnliticc/ameriran-rervnlina-ic-ctallina-anrl-the-hi 7/1(,/7(11 S Page 5 of 6 Last week in Elkridge, an inspector from a Chinese company studied bales of paper being loaded into shipping containers bound for the port of Baltimore and, eventually, Asia. If the inspector found more than five nonpaper items protruding from any one side of the bale, it was rejected, forcing workers to break down the material and send it all back through the processing facility. The lightweight vacuum packs for food and paper -thin plastic bottles are increasingly part of the problem. They are so light that they get blown upward with the paper. "We've seen economic downturns in the value of material in the past, but what's different now is that the material mix has changed," said Patty Moore, head of California-based Moore Recycling Associates, which specializes in plastic recycling. "The problem is, to get the same value out of your scrap, you have to shove a whole lot more material through the facility. That was fine when scrap values were high, but when they dropped, we realized it's expensive to push all of this lightweight stuff through, and we're in trouble." Brent Bell, Waste Management's vice president for recycling, said the company has yet to see municipalities abandon recycling, and the company is maintaining its ability to recycle whatever cities send their way. But it is downsizing its operation and expecting little increase in recycling rates nationwide. Last week, the Environmental Protection Agency announced a nationwide tally for recycling in 2013 that showed overall recycling had contracted for a second straight year, to 34.3 percent of the waste stream. With those trends, Bell said the company is beginning tough discussions with cities about what it sees as a long-term economic reality: Cities must bear more of the financial impact of falling commodity prices. That's the only way, Bell said, for recyclers like his company to invest in the business. Steiner, Waste Management's chief executive, went further. "We want to help our customers, but we are a for-profit business. We won't stay in the industry if we can't make a profit," he said. Clemm, the District's recycling chief, said small efforts can begin to turn the tide. The District must begin by getting more garbage out of its recycling stream. "Residents have a way to influence this by making sure they are recycling right," she said. Another possibility is to follow the urgings of the environmental community by expanding recycling programs to include composting — the banana peels and grass clippings degrading in landfills that by some estimates have become the nation's third -biggest source of methane gas contributing to global warming. • ,/_.1 41.,. 1.: 1/14/ln1c Page 6 of 6 Composting is partly credited with the success of such cities as San Francisco, Portland and Seattle in increasing the share of the waste stream that is recycled each year. There are also a few encouraging signs downstream in the recycling market. A recycled -plastics company in Troy, Ala., processes more than 50o million pounds of recycled material annually from plastic bottles — and with 45o employees, the company is growing. In the Midwest, another company opened two additional facilities this month to feed an Indiana paper mill that churns out ioo percent recycled cardboard. Turning a profit on the initial, dirty task of sorting and processing the nation's recyclables, however, may take a larger overhaul, said Patty Moore. Governments may need to set standards or even consider taking over part of the process to better encourage investment and ensure that profits remain a public benefit. "If we're going to be serious ahnut secondary -materials management we're really going to haveto arldrP3s it as a state or preferably national level," she said. "We need to harmonize what we're doing and make it work in a way that we're not spending all this money and spinning our wheels." Aaron Davis covers D.C. government and politics for The Post and wants to hear your story about how D.C. works — or how it doesn't. lion•//xxrcxrxxr xxraehincrtnnnnct rnm/1 nralIdr. c/amariran_raryrlinrs_ic_etallinrr-anii_thP-i-ti 7/1 /7111 S Distributed at the Meeting 31Y -g(" MEMORANDUM DATE: July 27, 2015 TO: The Honorable Mayor and City Council Tony O'Rourke, City Manager FROM: Cindy Epperson, Director of Finance and Budget RE: Refuse Utility Tax Utility tax is the 3rd leg in the "chair" that supports General Government operations. The 4 categories of revenue that make up roughly 25% of the total are Property Tax, Sales Tax, Utility Tax, and "all other". The largest component of General Government is Public Safety—Police, Fire, Municipal Court, Prosecution, Indigent Defense, and Dispatch. In 2012, because of the need to shore up public safety services, City Council adopted a 6% increase in the utility tax for Water (14% to 20%), Wastewater (14% to 20%), Refuse (9% to 15%), and Stormwater (0% to 6%). As demonstrated in the attached spreadsheet, the cumulative annual increase in the total utility tax tied to the additional 6% is about $2.6 million in 2014, while the increase in Public Safety expenditures through 2014 is $5.8 million --more than twice the amount of the additional tax. Therefore, all of the utility tax increase is being used for public safety purposes. Total by Utility 2011 Rate Internal: Water 14% Wastewater 14% Refuse 9% Stormwater Subtotal City Util. Outside Nob Hill Water 14% Yakima Waste 10% Total City of Yakima Wastewater, Water, Refuse, Stormwater In Lieu Utility Tax Analysis 2010 Actual 2011 Actual Total 2012 Actual New 6% Total 2013 Actual New 6% Total 2014 Actual New 6% Old rate Old rate Old rate $ 977,222 $ 951,036 $ 1,661,565 $1,204,635 $ 456,930 $ 1,636,242 $1,145,369 $ 490,873 $ 1,706,475 $1,194,533 $ 511,943 2,156,011 1,978,323 3,508,656 2,543,775 964,880 3,665,226 2,565,658 1,099,568 3,934,890 2,754,423 1,180,467 444,115 433,062 766,375 485,371 281,004 823,578 494,147 329,431 872,194 523,316 348,878 - - 129,962 129,962 129,977 129,977 129,557 129,557 3,577,348 3,362,421 6,066,558 4,233,781 1,832,777 6,255,023 4,205,174 2,049,849 6,643,116 4,472,272 2,170,844 328,326 343,446 523,092 379,242 143,850 569,972 398,980 170,992 604,070 422,849 181,221 321,325 322,054 504,053 330,785 173,268 516,282 322,676 193,606 535,966 334,979 200,987 $ 4,226,999 $ 4,027,920 $ 7,093,703 $4,943,808 $2,149,895 $ 7,341,277 $4,926,831 $ 2,414,446 $ 7,783,152 $5,230,099 $ 2,553,052 Public Safety Spending Police $22,045,777 Fire 9,255,216 Municipal Court 1,206,063 Prosecution 736,137 Indigent Defense 467,697 Transfer for Dispatch 975,000 $22,412,167 8,747,587 1,151,934 705,058 471,740 890,000 $24,470,231 9,419,820 1,173,261 732,202 487,601 840,000 Total 34,685,890 Change -Amount Change -Percent 34,378,486 (307,404) -0.9% 37,123,115 2,744,629 8.0% $25,923,174 9,709,330 1,330,831 891,482 541,656 920,000 39,316,473 2,193,358 5 9% $26,240,592 10,383,878 1,288,302 989,406 604,480 710,000 Inc since '11 $ 3,828,425 1,636,291 136,368 284,348 132,740 (180,000) 40,216,658 $ 5,838,172 900,185 2.3%