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Home My WebLink About10/18/2016 08 Refuse and Recycling Information xs .1 s. n. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 8. For Meeting of: October 18, 2016 ITEM TITLE: Information regarding refuse and recycling SUBMITTED BY: Scott Schafer, Director of Public Works Loretta Zammarchi, Solid Waste and Recycling Manager SUMMARY EXPLANATION: See attached. ITEM BUDGETED: STRATEGIC PRIORITY: APPROVED FOR SUBMITTAL: i py City Manager STAFF RECOMMENDATION: BOARD /COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type refuse 10111/2016 r Memo D support does 10/11/2016 Ocher Memo ° - , 1- 4 DEPARTMENT OF PUBLIC WORKS Fruitvale Blvd., Yakima, Washington tk '> a I nformational item DATE: October 11, 2016 TO: Honorable Mayor, Members of the Ci duncil, Cit Manager FROM: Scott Schafer, Director of Public Works N. Loretta Zammarchi, Solid Waste and Recycling Manager SUBJECT: Follow Up Memorandum Regarding City of Yakima Refuse Rates, Recycling and Bundling of Refuse Services and the Privatization of the Refuse Collection This memorandum is in response to comments made at the September 27, 2016 Study Session following discussions on a Refuse Rate increase. City Council members wanted more information pertaining to recycling and bundling of Refuse services. In addition, evaluating the possibility of privatizing the services of the City of Yakima Refuse Division. Proposed Refuse ate increase In order for the City Refuse Division to provide residential services that are fair and equitable to all residents, refuse rates need to be established based upon cost of service to ensure: • Reliable and sustainable services • Operating Reserve Fund to equal or exceed 12% or 45 days • Capital Replacement Reserve Fund sufficient to replace equipment to avoid service disruption. • Cost of service adjustments to incorporate inflation and increased operational costs • Adhere to City financial policies The original Strategic Initiative for Refuse was a proposal for a 7.0% rate increase for 2017 for expenses relating to anticipated increases in Yakima County landfill tipping fees and other operational costs effective January 1, 2017. The proposal also included a 2.5 % rate increase in 2018 and 2019. Attached is Exhibit A — City of Yakima Refuse Division's proposed Strategic Initiative for a Pass - Through Rate Increase associated with Yakima County Tipping fees. Yakima County Public Services Solid Waste Division has advised the City that they have completed a rate study for their current and future needs of their landfill. The proposed solid waste disposal rates for 2017 will increase approximately 13% over the 2016 rates. Attached is Exhibit B — Yakima County Solid Waste Division's proposed landfill rate increase effective January 1, 2017. Yakima Mr Administration 575 -6 005 • Equipment Rental 575 - • Parks & Recreation 575-6020 Refuse 5'75-6005 Street 5'75-6005 • Traffic 575 - Transit 575-6005 1994 Per the directive at the September 27, 2016 Study Session, the Refuse Division is also evaluating other options such as a 3.7% rate increase in 2017, 3.1% in 2018 and 3.0% in 2019. Implementing a rate increase less than the 7.0% will however defer the purchasing of needed equipment and building of the required operating reserves. Deferment of adequate rate increases will only serve to significantly increase the financial needs and immediate costs of the City's collection assets; while placing the entire infrastructure in immediate jeopardy. Having an appropriate rate structure and available funding to support the maintenance, repair, and replacement of the infrastructure is crucial in protecting public health and promoting economic development. Attached is Exhibit C — Refuse rate comparison of local municipalities as of April 2015. Recycling & Bundling of Services The City must overcome many challenges in order to implement a City-wide curbside recycling program. The rate structure must support covering the cost of service by addressing rising inflation costs, collective bargaining agreement obligations, and the restoration of the Refuse Operating Reserve Fund to a proper funding level. Current market conditions are not favorable for recyclable materials at this time. The global market has changed with a majority of the recyclable materials no longer a source for revenue in offsetting a portion of operational costs. In addition, a Request for Proposals (RFP) will need to be conducted to identify and secure a vendor that is willing to take the City's recyclable materials at a cost to be determined. Most importantly, upfront capital required of the Solid Waste Division to fund the carts, trucks, and additional staff to implement the recycling program and expansion of the yard waste service is not an option under its current financial status. We know that approximately $1 million in carts will need to be invested towards this program. In addition, the roll-out for City-wide curbside recycling will need to be planned accordingly and will require to be phased in over a couple of years once funding for the recycling program has been secured prior to implementing the program. However, the first priority is for the City's Solid Waste and Recycling Division to recover once a proper rate structure is adopted, by eliminating budget deficits, improving its fleet and allowed to become financially sound to ensure current and future success. Attached is Exhibit D — October 20, 2015 memo — Summary of the Refuse Study Session Follow Up Memorandum and 2015 Refuse Rates and Exhibit E — July 28, 2015 memo — Rate Study for Solid Waste and Recycling Program Having a strong utility such as Refuse is key to economic development for the City of Yakima. According to a recent economic study, the City rated poorly in the area of sustainability largely due to the fact that the City of Yakima is not offering curbside garbage recycling; only the recycling of yard waste. However, curbside garbage recycling is available by subscription with Yakima Waste, a private company. Less than 10% of the refuse customers within the City limits currently utilize this service. The Refuse Division conducted a very successful 3-month curbside garbage recycling pilot program in 2014; proving that the City can implement a City-wide curbside recycling program for its residents. Once the City has a recycling infrastructure in place (carts, trucks, staff), a contract with a vendor to accept the recyclables, and a 12% operating reserves to ensure financial stability, we could proceed in exploring an Every-Other- Week (EOW) garbage/recycling collection service. Ultimately, it is our goal to offer both curbside recycling and yard waste with garbage at a bundled rate structure; reducing overall costs to our customers. Recycling from an economic perspective is vital in attracting new businesses to Yakima. Many companies operate their business model under a mandate to operate only in ecological and environmental conscience areas where recycling is occurring as a major determining factor when selecting a new site in which to locate. Privatization of Refuse Services Refuse is an Enterprise Fund that provides an essential service to the community of Yakima generating nearly $1.9 million per year to the City's General Fund as indicated in the table below: Refuse 2016 Budget • Interfund — In Lieu of Tax $ 934,200.00* (15% of Refuse revenue transferred to General Fund) • Interfund Chgs — City Svcs $ 318,625.00 (amount paid for legal, Admin, purchasing, etc.) • EQR Repair — Labor $ 282,000.00 (amount paid to City Shop for repairs) • Interfund Chgs — customer sery $ 238,100.00 (amount paid towards Utility Billings) • Interfund — P/W Admin $ 73,021.00 (amount paid towards Public Works for Admin) • Interfund Chgs — Ga/Plant $ 43,956.00 (amount paid towards Public Works utilities, repairs) Total $ 1,889,902.00 * The In Lieu of Tax of approximately $ 934,200 would need to be assessed on the private provider of the services to continue to fund the City's General Fund. The Interfund Charges of approximately $ 673,702 would suddenly become an expenditure to the City's General Fund to avoid layoffs of essential City Hall positions. In addition, the Equipment Rental Repair Charges of approximately $282,000 would no longer be applicable; leading to the need to layoff at least two mechanic positions within Equipment Rental. Attached is Exhibit F - February 1, 2016 memo — Follow Up Memorandum Regarding Questions Raised on Privatization of the City Refuse Collection If the City seeks to privatize the services of the Refuse Division, it would also need to include the physical removal of "illegal dumps." The City would need to fund the indirect costs associated with how the City will administer the contract. As part of the administration of the contract, a City employee would need to collect and enter illegal dump complaints into the City's system for reporting, tracking, and disseminating the sites to the contractor. The City would also have to monitor the contractor to ensure that work is completed with the proper reports filed; resolving the issue. In 2015, the City responded to and cleaned 245 illegal dumps at no additional cost to the City's refuse rate payers. It was entirely funded by existing refuse rates. Attached is Exhibit G — August 3, 2015 memo — Study Session Follow-Up Questions pertaining to the cost to contract out illegal dumps. The memo also looks at what would it cost to implement a program that looks like Olympia's model (every other week collection of garage, recycling and organics) and what would it cost to reduce the 32-gal cost from $5.76 to $2.50 or $1.04. Privatization of Refuse would not save any money for the City or to its residents. It would actually decrease the amount of available funds within the General Fund. It would require the City to contract out services to respond to all illegal dumping activities and to provide community clean up events. The financial impact to the City residents as refuse customers, would be significant. In the case of residents on fixed-incomes, it could be devastating to continue with the required refuse service and without the City Council's ability to assist. The new provider would need to incorporate the City's In Lieu Tax in addition to providing a profit margin for the "for-profit" company. In addition, the build out of the infrastructure required for the company to provide this service would need to be ramped up at the expense of its customer base. This would include additional staff, trucks, carts and bins. Future rate increases would be implemented by the private company without the approval from City Council. Exhibit A PUBLIC WORKS / REFUSE 2017 STRATEGIC INITIATIVE PASS THROUGH RATE INCREASE / YAIIIMA COUNTY TIPPING FEES BUDGETED / UNBUDGETED PROPOSAL This initiative proposes a 7.0% rate increase in Refuse rates for 2017 for expenses relating to anticipated increases in landfill tipping fees and other operational costs effective January 1, 2017. The following table summarizes the expected cost increases for residents with a 96 gallon cart. There are 18,626 customers (72%) that have a 96 gallon cart for waste collection and 7,370 customers (28%) that have a 32 gallon cart for collection. Cost Component 2016 2017 $ A % Labor Cost $2.76 $2.87 $0.12 4.3% Collection Operations $4.70 $4.87 $0.1.7 3.5% Disposal $3A6 $3.90 $0A4 12.7% Customer Service $0.63 $0.63 $0.00 0.0% Management & Administration $0.90 $1.10 $0.20 223% Public Works & Billing and Finance $1.01 $1.04 $0.03 25% Allocation Utility Tax / WA Refuse Tax $332 $3,64 $033 9.9% Fund Reserve $ 155 $ $- 0 . 0 % Total Rate $18.32 $19.60 $1.28 7.0% City of Yakima Solid Waste and Recycling Division (SWRD) makes every effort to excel in quality solid waste management for the 93,000 residents of Yakima. The core business of SWRD is to provide weekly curbside residential garbage and yard waste service to approximately 26,000 residential customers who generate an average of 35,000 tons of waste per year. As part of the Interlocal Agreement with Yakima County, the City of Yakima utilizes the county's Terrace Heights Landfill to dispose of its waste. Yakima County Public Services Solid Waste Division has advised the City that they have completed a rate study for their current and future needs of their landfill. The proposed solid waste disposal rates for 2017 will increase approximately 13% over the 2016 rates. The proposed rates will cover the operational expenses, closure/post closure and capital costs for the Yakima County landfills. Yakima Utility Tax and Washington Refuse Tax will increase proportionately to the rate increase because both taxes are calculated on the assessed collection rate. The combined taxes comprise 18.6% of the total rate charged to the residential rate payers; the utility tax is 15% and the refuse tax is 3.6%. The impact of these two fees is $0.33 per month for the customers with a 96 gallon cart. Labor and operational costs wil increase due to the City's labor agreement, increases in employee health insurance, outside repair and maintenance cost for the collection fleet and general liability insurance. The proposed rate increase will include the addition of a Solid Waste Supervisor to its Division to accommodate past growth in service areas and integration of the new Cayenta utility billing, electronic routing and mobile management systems. The addition of a Solid Waste Supervisor wil allow for the current supervisor to address daily operation duties such as customer service issues, complaints, solid waste violations, safety issues, accident follow ups, address illegal clean ups, fleet maintenance issues and supervision of the maintenance workers. The new supervisor position will address the electronic routing implementation, on-going maintenance of the system and supervision of route drivers. The rate impact from the hiring of the SW Supervisor is $O.22 per residential customer per month in 2017; however, the cost per customer is expected to decrease in 2018 with the full implementation of the electronic routing and mobile management system. Rate increases in 2018 and 2019 are projected at 3.6% and 3.5% respectively; however, the collection efficiencies are expected to reduce costs by 1% in 2018 and 2019. In other words, the cost of the SW Supervisor in 2017 will be offset by the system savings of $O.21 per customer. Savings bm2OlMia estimated ut$O.22 and beyond. The rate impact for the 96 gallon customer over the next three year are summarized in the following table. k 2016 2017 2018 2019 96 gallon rate $l� �2O.lO $ Increase Increase 7.0% 2.6% Proposed Residential Rates for 2017 through 20I9 Year 2016 2017 2018 2019 96 gallon rate - Solid Waste $18.32 $19.60 $20.10 $20.60 32 gallon rate - Solid Waste $16.02 $17.15 $17.60 $18.05 96 gallon rate - Yard Waste $14.90 $15.95 $16.35 $16.75 96 gallon rate - 2nd Yard Waste $7.40 $7.90 $8.10 $8A0 Extra Can $4.23 $4.50 $4.60 $4.70 The following table details the proposed increase for container services for 2017. The increase is 7% over the current collection rates. Current 2016 Rates Container Size Col. Frequency 2 YD 4 YD 6 YD Proposed 2017 Rates Container Size Col. Frequency 2 YD 4 YD 6 YD 1 $23.04 $36.68 $50.33 2 $36.96 $63.88 $91.55 3 $50.88 $91.08 $132.77 4 $64.80 $118.28 $173.98 5 $78.72 $145.48 $215.20 IMPACTS 1. Fiscal Impact — The proposed 2017 Yakima County landfill tipping fee will be an additional yearly cost of $134,000 to the City. The remaining cost increase are comprised of labor and operational costs of approximately $299,000. The overall fiscal impact to the Refuse Division is $433,000. Projected cost increases in 2018 and 2019 are approximately $170,000 each year. 2. Proposed Funding Source — Refuse customers / Refuse operating fund. Rate increase of 7% for all refuse collection rates in 2017. Proposed rate increases in 2018 and 2019 are 2.5% of the prior year's collection rate 3. Public Impact — This initiative will impact the public though a pass through rate increase to cover the increased cost of landfill disposal. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — City ordinance revising the Refuse rate schedule will be required. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. . . Exhibit B Yakima County Public Services Solid Waste Division Material Description Current Rate as of Proposed Baseline 1/1/2010 Rate as of 1/1/2017 * * Garbage Tipping Fee per ton $ 32.00 $ 36.00 Minimum Fee $ 8.00 $ 10.00 Clean Yard and Wood Waste per ton $ 16.00 $ 18.00 Minimum Fee $ 5.00 $ 6.00 Septage per ton $ 12.00 $ 14.00 Tires Passenger Tires per each up to 20 $ 1.50 $ 2.00 More than 20 passenger tires per ton $ 150.00 $ 158.00 Truck (semi) per each $ 7.50 $ 8.00 Implement/Tractor per each $ 15.00 $ 16.00 Heavy Equipment $ 75.00 $ 79.00 Mixed Tires and Large Loads per ton $ 150.00 $ 158.00 Animals Small (Under 200 pounds) per each In at Garbage Rate In at Garbage Rate Large ( Over 200 pounds) per each In at Garbage Rate In at Garbage Rate Asbestos per ton $ 60.00 $ 68.00 Appliances per each $ 5.00 $ 5.00 Special Handling per yard $ 2.00 $ 2.00 Minimum Fee $ 10.00 $ 11.00 Unsecured Load 1-3 yards $ 5.00 $ 6.00 Unsecured Load over 3 yards $ 15.00 $ 17.00 Dirt Cover Material per ton $ 9,50 $ 11.00 * Rates include State Refuse Tax As Applicable Exhibit D MEMORANDUM October 20, 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: Summary of the Refuse Study Session Follow Up Memorandum Below is a brief summary to City Council as to why the City is unable or recommends not implementing the following items from the Refuse Study Session Follow Up Memorandum: City of Olympia Model Implementing a residential garbage service that models the City of Olympia, would be a significant budgetary increase for the City of Yakima's Refuse Division. It would require providing residential garbage service every other week as opposed to weekly pick-ups customers currently rely upon, by eliminating their 32 gal containers and upsizing to a 96 gal container. The Refuse Division would need approximately $448,000 upfront to either purchase or arrange to lease to own the carts to accomodate the customers currently utilizing the 32 gal carts. This approach is financially unfeasible for the City of Yakima in its current state. In addition, the City of Olympia subsidizes their "every other week" residential garbage service to cover their fixed-overhead costs through the revenue collected from their commercial garbage customers. Unfortunately the City of Yakima chose to give up the commercial garbage service and associated revenue to Waste Management in 1952. Staff strongly recommends not to implement garbage service such as the City of Olympia. Water Shut-off to resolve Refuse Delinquencies City Legal reported that typically a lien and foreclosure process is different for each type of utility service and since the City "bundles" utility billing for its customers (Water/Wastewater/Refuse), the City is not at liberty to impose one lien/delinquency collection method in order to collect on a different type of utility. Low Income Assistance Program Implementing a low income assistance program for Refuse will require that it be equally applied to each of the other utilities (Water/Wastewater). This will increase the need for subsidization on behalf of the majority of the citizens. In addition, becomes an unfunded administrative obligation in maintaining and tracking each account to ensure participates are and remain eligible for such a program; costing each utility more to administer this program. Staff recommends not to implement a Low Income Assistance Program. Contracting Out Illegal Dump Cleanups Contracting out the services for illegal dumps will require selecting a contractor through the RFP process. Direct costs for labor in the physical removal of the material during cleanups in addition to the tipping fees at the landfill, will dictate the terms of the contract. In addition, indirect costs such as reporting, tracking, and directing the contractor of the illegal dumps will also apply as the City would need to monitor the work of the contractor and their reports to ensure work is completed to the satisfaction of the City. An "amount not to exceed" would need to be determined; resulting in some of the illegal dumps not being addressed due to the limitation of funds within the contract. In the end, a significant amount of work and expenses is needed to contract out the services for illegal cleanups. The responsibility and costs remain with the City. Funding to implement such a program was cut from the 2015 budget and continues to be unavailable to the Refuse Division. If the rate increase proposal is approved, only the cost of tipping fees at the landfill is covered to a limited extent. Staff strongly recommends not contracting out the services for illegal dump cleanups. Cost Reduction of 32-Gallon Carts Reducing the cost of the 32-gallon cart instead of implementing the true cost of service, will require that the additional cost be placed onto the 96-gallon cart to ensure adequate funding is available to cover the cost of service for the Refuse Division. Increasing the cost and the associated subsidy of the 96-gallon cart too much, will force individuals to downsize to the 32-gallon cart without a reduction in the volume of their garbage. This usually creates problems for the Refuse drivers as customers tend to overfill the 32- gallon carts because they do not want to pay the higher cost of the 96-gallon cart. In doing so, carts become compacted making it extremely difficult for the drivers to properly empty the carts into the trucks. Overfills also contribute to unsightly conditions and potential code violations. Staff recommends eliminating any form of subsidy by charging the true cost of service for each specified sized cart. MEMORANDUM October 20, 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: 2015 Refuse Rates The City of Yakima's Solid Waste and Recycling Division has not had a rate increase applied to its operational costs since 2008. Since that time, an inflation rate exceeding 14% has been allowed to deplete the Division's reserves. Collection rates regulated by the Washington Utilities and Transportation Commission in the unincorporated areas of Yakima County were adjusted twice during this same period for Waste Management (Yakima Waste Systems). Current rates for waste collection services do not cover the cost of service. In a work session in April 2014, City Council was notified of the issue when the cost for residential services were presented for discussion. In the fall of 2014, staff followed up by presenting a rate request to Council. The request was based upon a Rate Study conducted by Bell and Associates, Inc., that illustrated an annual deficit of nearly $300,000 within the Solid Waste Division due to the fact that rates have not been adjusted since 2008 and rates implemented over previous years were not set at the costs of service. In addition to those findings, the results of a small scale pilot project that was conducted in the summer of 2014 to test assumptions and validate cost estimates for a recycling program were presented. The City Council decided to defer any Refuse rate increase until 2015 and directed staff to eliminate approximately $300,000 from its 2015 budget which included its Refuse Code Enforcement Officer position, abatement of litter and debris accumulating in alleyways and in the public right of way; shopping cart collection and removal, illegal dump and community clean ups events and the Fall Leaf Bag Collection Program. During a Study Session on July 28, 2015, the Solid Waste and Recycling Division presented an updated rate increase proposal based on current cost of service and an anticipated deficit of $321,000 for fiscal year 2016. The Division also presented a bundled rate fee proposal for weekly garbage and every-other-week recycling and yard waste collection. It was discussed that in order to provide residential services that are fair and equitable to all residents, collection rates need to be established based upon cost of service to ensure: • Reliable and sustainable services • An operating reserve of 12% or 45 days • Fund capital replacement reserves sufficient to replace assets (trucks) when needed to avoid service interruption. • Adjustments for inflation and increase operational costs • Adhere to financial management policies and steward of public funds The condition of the City's Refuse fleet was also discussed. Staff emphasized their concerns that currently 40% of its Refuse collection trucks have exceeded their life expectancy of 7 years; leading to significant maintenance costs. That number increases to 55% in 2016. To avoid disruption in serving our customers, staff is evaluating renting or leasing to own vehicles to improve the health of our fleet. The poor condition of the Refuse fleet is directly attributed to the lack of proper funding to this Division. Without clear direction from City Council at the conclusion of the July 28, 2015 Study Session, and the need to implement a rate structure that supports the cost of service, staff is proposing the following rate increase: Proposed Action City Council approves the proposed Refuse rates as outlined in Table 1 and 3 below with rates becoming effective December 3, 2015. This option adds $0.26 per cart into the rate structure for residential garbage to cover the cost of tipping fees at the landfill associated with illegal dump and /or community clean ups. Table 1 - Proposed Residential Collection Rates Effective December 3, 2015 Description 32 gallon 96 gallon 64 gallon 96 gallon garbage garbage yard debris yard debris Current Rate $10.00 $17.02 $7.01 $12.82 Proposed Rate $16.02 $18.32 discontinue $14.82 $ Increase /month $6.02 $1.30 $2.00 # of Customers 7,858 17,789 1,036 5,426 of Customers 31% 69% 4% 21% In an effort to insure that refuse rates are fair and equitable to all, the rate for the 32 gallon cart has been adjusted to reflect the true cost of service. A majority of the rate payers, 69% who utilize the 96 gallon cart, are subsidizing the rates for the customers who utilize a 32 gal cart. What appears to be a higher increase to the 32 gallon cart is an adjustment to reflect the true cost of service. The two main costs contributors that differentiate the cost of service is the higher disposal cost for the 96 gallon cart and the cart replacement cost. As such, taxes also contribute to the difference in the overall cost of service. All other costs remain the same for both cart sizes. Table 2 on the following page differentiates the cost of service in more detail between the 96 gallon cart and the 32 gallon cart. Table 2 - Cost of Service Detail for Solid Waste Cart Collection Cost '6 gal Cart 32 gal Cart Labor Expense $2.93 $2.93 Collection Expense $2.56 $2.56 Admin Expense $1.63 $1.63 Inter -fund Transfers $1.02 $1.02 Disposal $3.46 $1.73 Truck Replacement $1.66 $1.66 Roll Cart Replacement $0.60 $0.43 Total Collection Cost $13.86 $11.96 471 Fund Replenishment $1.30 $1.30 WA Refuse Tax (5.1% of Collection Cost) $0.72 $0.62 Utility Tax (15% of Collection Cost) $2.18 $1.88 Illegal Dump / Com Clean -Ups $0.26 $0.26 Cost of Service Monthly Rate $18.32 $16.02 Table 3 - Proposed Bin Collection Rates Effective December 3, 2015 Description 2 Yd. Bin 4 Yd. Bin 6 Yd. Bin Current Rate $18.88 $30.20 $41.53 Proposed Rate $21.53 1 $34.28 $47.04 $ Increase /month $2.65 $4.08 $5.51 # of Customers 278 13 21 The additional $0.26 per cart charge will generate approximately $77,000 per year. This will assist in covering the costs associated with the tipping fees at the landfill for illegal dump and /or community clean ups. It does not however, fund a position that was lost in the 2015 Budget cuts and does not allow the Refuse Division to effectively address illegal clean ups in a timely manner. Illegal clean ups will continue to be addressed based on staff availability. Proposed Action includes the following: • Discontinue 64—Galion Carts Discontinuing the 64- gallon cart aids in standardizing cart inventory: adding efficiency and cost savings to the Refuse Division. • r Ready Serve Rate - The proposed Ready - to - Serve rate is $7.22 and represents the fixed cost of the res refuse collection system such as carts, trucks, etc. Residents that choose not to have collection services, -Le,, Snowbirds, would be assessed this Ready - to - Serve fee which is similar and consistent with other City enterprise funds such as Water /Irrigation and Wastewater. • Overfill Fees - The overfill fee for carts is currently $2.35 and is being; proposed to be increased to $2.51. The proposal for bin overfill fees is $13.73 from the current $12.26. • Call Charge — A call - back charge in an amount of $12.90 shall be imposed each time a customer requests refuse collection service at a time other than the regularly scheduled time. This is an increase from the current $12.06, • General House Keeping Revisions within the Ordinance for clarification and efficiency purposes¢ Recycling/ Bundled Rates Staff strongly recommends delaying the implementation of a City -wide curbside recycling program and the associated bundled rate structure which would incorporate both curbside recycling and yard waste with garbage. Staff would: bring this back to City Council for consideration later in 2016. There are many factors for City Council to consider. Current market conditions are not favorable for recyclable materials. The global market has changed with a majority of the recyclable materials no longer a source of revenue in offsetting a portion of operational costs. In addition, an RFP will need to be conducted to identify and secure a vendor that is willing to take the Citv's recyclable materials at a cost to be determined. Most importantly, the upfront capital required of the Solid Waste Division to fund the carts, trucks, and additional staff to implement the recycling program and expansion of the yard waste service is not an option under its current financial status. In addition, the roll - out for City - wide curbside recycling will need to be planned accordingly and will be required to be phased in over a couple of years once funding for the recycling program has been secured prior to implementing the program. However, the first priority should be for the City s Solid Waste and Recycling__ Division to recover once a proper rate structure is adopted, by eliminating budget deficits, improving its fleet and allowed to become financially sound to ensure current and future success. Recommendation Deferment of adequate rate increases will only serve to significantly increase the financial needs and immediate costs of the City's collection assets; while placing the entire infrastructure in immediate jeopardy. Having an appropriate rate structure and available funding to support the maintenance, repair, and replacement of the infrastructure is crucial in protecting public health and promoting economic development. It is therefore staff's recommendation to City Council to approve the collection rate increase as proposed above while deferring curbside recycling/bundled rate for discussion in 2016. This would provide the City's Solid Waste and Recycling Division with the proper funding levels required to financially recover and continue delivering this vital service to our community. Exhibit E 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. 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 32 gallon 96 gallon 64 gallon yard 96 gallon yard garbage garbage debris debris Current Rate $10.00 $17.02 $7.01 $12.82 11 Rate $15.76 $18.06 discontinue $14.82 $ Increase $5.76 $1.04 $2.00 # of Customers 7,858 17,789 1,036 5,426 The following table breaks out the number of customers for each service and the rate increase impact. Level of Service # of % of Current Proposed $ • Customers customers Rate Rate 32 gal SW 2,706 11% $10.00 $15.76 $5.76 96 gal SW 16,479 64% $17.02 7 $18.06 $1.04 32 gal SW & 64 gal YD - 920 4% $17.01 1 Discontinued 96 gal SW & 64 gal YD 116 <% $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 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 $21.26 $2.38 4 YD Weekly $30.20 $34.00 $3.80 6 YD Weekly $41.53 $46.76 $5.23 Ready -to -Serve 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 rate. 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. Current al -la cart Rates Bundled Rate SW Volume 32 gallon 96 gallon 32 gallon 96 gallon garbage garbage garbage garbage Solid Waste $15.76 $18.06 $15.76 $18.06 Yard Debris $14.82 $14.82 $5.51 $5.51 Total $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. Current al -la cart Rates Bundled Rate SW Volume 32 gallon 96 gallon 32 gallon 96 gallon garbage garbage garbage garbage Solid Waste $15.76 $18.06 $15.76 $18.06 Recycling ' $10.16 $10.16 $6.22 $6.22 Yard Debris $14.82 $14.82 $5.51 $5.51 Total $40.74 $43.04 $27.49 $29.78 Note 1 - Recycling service provided by Yakima Waste Systems Exhibit F Informational item DATE: February 1, 2016 TO: Honorable Mayor, Members of the City Council, Interim City Manager FROM: Scott Schafer, Director of Public Works Loretta Zammarchi, Solid Waste and Recycling Manager SUBJECT: Follow Up Memorandum Regarding Questions Raised on Privatization of the City Refuse Collection This is a memo in response to comments made at the Audience Participation segment of the January 19, 2016 City Council Meeting by Mr. Jim Scoggins regarding privatization of the City of Yakima Refuse Division. As this comment is tied to the recently adopted Refuse Rate increase of 2015, the memo includes supporting documentation presented to City Council in 2015. BACKGROUND OF SERVICES PROVIDED The mission of the Solid Waste and Recycling Division is to protect the public health and safety of the City and all residents of the City by providing quality municipal solid waste services that are efficient, cost effective and environmentally responsible. The Refuse Division is responsible for collection and disposal of all garbage, yard waste and other debris for residential customers within the City of Yakima and from all City-owned facilities. The approximate annual tonnage collected is 32,000 tons. The City of Yakima provides automated refuse carts to approximately 25,647 residential customers for weekly refuse collection. The customer has the option of using a 32 or 96- gallon cart. Carry out service is available for those wishing to have their cart collected from a location other than the curb or alley line. Weekly yard waste collection utilizing a 96 gallon cart is available to City residential customers from March 1st through November 30th of each year. The yard waste service is an optional service and currently consists of approximately 6,462 accounts. During the winter months, customers are encouraged to retain the yard waste cart for use in the spring. Metal bins are available to City-owned facilities, multi-family residential units, and other premises where large amounts of refuse accumulate and need to be collected. The bins can be emptied multiple times throughout the week, depending upon the need of the customer. Temporary bins in two, four and six-yard capacity are also available to any City resident needing to clean up their property or to dispose of large amounts of debris that normally cannot be collected with their regular refuse service. 1 The Refuse Division has several special event recycling containers available for use to recycle plastic bottles and aluminum cans during special events, such as the Yak-Attack Soccer Tournament, the Folk Life Music Festival and the Hot Shots Basketball Tournament. The use of the recycling containers significantly reduces the amount of debris being taken to the landfill. In addition, the Division cleans and closes illegal dumps when staffing is available and provides assistance in community clean ups. The Solid Waste and Recycling Division is an Enterprise Fund that is required to maintain an operating reserve of 12% or 45 days. RATE INCREASE BACKGROUND PRESENTED TO COUNCIL ON NOV. 3, 2015 The City of Yakima's Solid Waste and Recycling Division has not had a rate increase applied to its operational costs since 2008. Since that time, an inflation rate exceeding 14% has been allowed to deplete the Division's reserves. Collection rates regulated by the Washington Utilities and Transportation Commission in the unincorporated areas of Yakima County were adjusted twice during this same period for Yakima Waste Systems, YWS. The City's current Refuse Rates for waste collection services do not cover the cost of service. In a work session in April 2014, City Council was notified of the issue when the cost for residential services were presented for discussion. In the fall of 2014, staff followed up by presenting a rate request to City Council. The request was based upon a Rate Study conducted by Bell and Associates, Inc., that illustrated an annual deficit of nearly $300,000 within the Solid Waste Division due to the fact that rates have not been adjusted since 2008 and rates implemented over previous years were not set at the costs of service. In addition to those findings, the results of a small scale pilot project that was conducted in the summer of 2014 to test assumptions and validate cost estimates for a recycling program were presented. The City Council decided to defer any Refuse Rate increase until 2015 and directed staff to eliminate approximately $300,000 from its 2015 budget which included its Refuse Code Enforcement Officer position, abatement of litter and debris accumulating in alleyways and in the public right of way; shopping cart collection and removal, illegal dump and community clean ups events and the Fall Leaf Bag Collection Program. During a Study Session on July 28, 2015, the Solid Waste and Recycling Division presented an updated rate increase proposal based on current cost of service and an anticipated deficit of $321,000 for fiscal year 2016. The Division also presented a bundled rate fee proposal for weekly garbage and every-other-week recycling and yard waste collection. It was discussed that in order to provide residential services that are fair and equitable to all residents, collection rates need to be established based upon cost of service to ensure: + Reliable and sustainable services + An operating reserve of 12% or 45 days + Fund capital replacement reserves sufficient to replace assets (trucks) when needed to avoid service interruption. + Adjustments for inflation and increase operational costs + Adhere to financial management policies and steward of public funds 2 The condition of the City's Refuse fleet was also discussed. Staff emphasized their concerns that currently 40% of its Refuse collection trucks have exceeded their life expectancy of 7 years; leading to significant maintenance costs. That number increases to 55% in 2016. To avoid disruption in serving our customers, staff is evaluating renting or leasing to own vehicles to improve the health of our fleet. The poor condition of the Refuse fleet is directly attributed to the lack of proper funding to this Division. On November 3, 2015, the Yakima City Council approved a Refuse Rate increase. However, the rate increase did not reinstate and fund the previous budget cuts made in late 2014. RESPONSE TO PRIVATIZATION ISSUES All garbage is local. Because of the unique nature of each community and city, refuse is handled differently. Some cities contract out collection services while some maintain control over their collection services. The rate increase approved by Council in 2015 reflects rates set at the cost of providing the service. • The City of Yakima only collects from residential customers. It does not collect from the commercial class. This has always had a direct impact on revenue collected for the City. • The Refuse Division does not operate for a profit. Instead, reinvests back into our community's infrastructure. As a Utility, the Division is required by law to maintain a 12% reserve. We do not have private shareholders, rather our shareholders are our citizens. Every effort is made to provide safe, efficient, affordable and environmentally sound collection service to our community. • In the Annual Citizens Survey, the Refuse Division has been rated among the top services provided by the City for the past three years. • Privatization can equal loss of flexibility in collection and planning. It can lead to less service and longer response time. • The 32 gallon cart did see a significant increase with the rate increase. The 32 gallon cart rate had been subsidized by the 96 gallon cart rate for many years. The rate of service for the 32 gallon cart should have been $13.42 but was kept at $10. This was an effort to keep costs down during the economic downturn of 2008. The recent rate increase adjusts the 32 gallon cart to reflect the cost of providing the service and eliminate any subsidy. The majority of the residents of the City utilize a 96 gallon cart. • Our aging fleet is a result of deferring purchases and major repairs due to the lack of proper funding of this Division. Postponing a rate increase for operations and capital for over 7 years has had a significant impact on our fleet. The Division will be rotating in new vehicles to replace the worn trucks that have higher maintenance costs. • Privatizing one City service would have a significant negative impact to the remaining City services since City Departments are intricacy tied. Refuse is tied 3 to Utility Billing which is tied to Water, Irrigation and Wastewater. Refuse is also tied to the Maintenance Shop which is then tied to Streets, Transit and other City Departments. Public Works is a highly integrated system; making it difficult to cut out one part without affecting the other Divisions. • In 2009 the Utility Tax charged to the Refuse Division increased from 9% to 15% to fund additional YPD Officers. This was a simple pass through fee that did not go towards Refuse operations or capital. The Utility Tax is an on -going tax charged to all City Enterprise Divisions such as Water, Wastewater, and Refuse to assist in funding the General Fund. • The Utility Tax is incorporated and reflected within the Refuse Rates. • Potential degradation of quality of service for lower rates. In 2015 the Solid Waste Division cleaned and closed 245 illegal dumps; these clean ups were funded by the Refuse Rates. • In 2015 the Solid Waste Division conducted 1 community clean up. RATES PROPOSED AND ADOPTED BY CITY COUNCIL City Council approved the proposed Refuse rates as outlined in Table 1 and 3 below with rates becoming effective December 6, 2015. The rate increase was necessary to address past deferred operation and capital expenses and the pending deficit. This option added $0.26 per cart into the rate structure for residential garbage to cover the cost of tipping fees at the landfill associated with illegal dump and /or community clean ups. It does not however, fund a position that was lost in the 2015 Budget cuts and does not allow the Refuse Division to effectively address illegal clean ups in a timely manner. Illegal clean ups will continue to be addressed based on staff availability. Table 1 - Proposed Residential Collection Rates Effective December 6, 2015 Description 32 gallon 96 gallon 64 gallon 96 gallon garbage garbage yard debris yard debris Current Rate $10.00 $17.02 $7.01 $12.82 Proposed Rate $16.02 $18.32 I_ discontinue $14.82 $ Increase /month $6.02 $1.30 $2.00 # of Customers 7,858 17,789 1,036 5,426 % of Customers 31% 69% 4% 21% In an effort to ensure that Refuse Rates are fair and equitable to all, the rate for the 32 gallon cart has been adjusted to reflect the true cost of service. A majority of the rate payers, 69% who utilize the 96 gallon cart, are subsidizing the rates for the customers who utilize a 32 gal cart. What appears to be a higher increase to the 32 gallon cart is an adjustment to reflect the true cost of service. The two main costs contributors that 4 differentiate the cost of service is the higher disposal cost for the 96 gallon cart and the cart replacement cost. As such, taxes also contribute to the difference in the overall cost of service. All other costs remain the same for both cart sizes. Table 2 differentiates the cost of service in more detail between the 96 gallon cart and the 32 gallon cart. Table 2 - Cost of Service Detail for Solid Waste Cart Collection Cost 96 gal Cart 32 gal Cart Labor Expense $2.93 $2.93 Collection Expense $2.56 $2.56 Admin Expense $1.63 $1.63 Inter -fund Transfers $1.02 $1.02 Disposal $3.46 $1.73 Truck Replacement $1.66 $1.66 Roll Cart Replacement $0.60 $0.43 Total Collection Cost $13.86 $11.96 471 Fund Replenishment $1.30 $1.30 WA Refuse Tax (5.1% of Collection Cost) $0.72 $0.62 Utility Tax (15% of Collection Cost) $2.18 $1.88 Illegal Dump / Corn Clean -Ups $0.26 $0.26 Cost of Service Monthly Rate $18.32 $16.02 Table 3 - Proposed Bin Collection Rates Effective December 3, 2015 Description 2 Yd. Bin 4 Yd. Bin 6 Yd. Bin Current Rate $18.88 $30.20 $41.53 Proposed Rate $21.53 $34.28 $47.04 $ Increase /month $2.65 $4.08 $5.51 # of Customers 278 13 21 5 Exhibit G STUDY SESSION FOLLOW UP MEMORANDUM August 3, 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: Study Session Follow-Up Questions The following information is being provided as a follow to the question raised in the Study Session on July 28t 2015. • Cost to Contract Out Illegal Dumps • What would it cost to implement a program that looks like Olympia's model • What would it cost to reduce the 32 gal cost from $5.76 to $2.50 or $1.04 COST TO CONTRACT OUT ILLEGAL DUMPS There are many aspects that the City of Yakima (City) may want to consider regarding the contracting out of illegal dump clean ups. The following are points one may want to focus on: Administrative costs — How are administrative cost covered? BACKGROUND The Solid Waste and Recycling Division (SWD) receives complaints from citizens, Yak Back and Code Administration (Code) If Code receives a complaint, a Code Enforcement officer inspects and inputs the illegal dump location into the City's database (Paladin) for reporting and tracking purposes. Code then passes on the illegal dump site information to the Refuse Division for clean-up. Due to the budget cuts in 2015, the Solid Waste Code Enforcement Officer was eliminated as well as funding for illegal dump and community clean ups. This makes responding to illegal dump clean ups by the SWD very difficult. The SWD completes approximately 80 service orders a day or approximately 20,800 a year. A service order is a citizen's request for some type of refuse service. This entails cart/bin delivery; empting or exchanging. Staff is required to shift from their daily duties of completing service orders to rate payers to trying to address illegal dumps. This disruption in service orders has a direct impact on the customer service, customer satisfaction due to delay in services requested and on income generated from services. If the City seeks to contract out the physical removal of illegal dumps it would need to keep in mind the need to fund (indirect costs) how the City will administer the contract. As part of the administration of the contact, a City employee would need to collect and enter illegal dump complaints into Paladin and/or other databases for reporting, tracking, and disseminating sites to the contractor. The City would also have to monitor the contractor to insure that work is completed and that proper reports are filed. 1 ' ~ - Below is an example of iliegal dumps reported to the SWD in one day • 517 north 24th Ave. - kitchen cabinet out by the Street. • 519 north 25th Ave. in the alley there's a pile of brush and misc. • 2409 Englewood theres a pill of brush by the street and the other items in the yard. • 1102 south 8 Street brush in t e alley. • 1109 south 7th Street Iarge pile of wood in the alley. • 1512 south 1 Ave. pile of brush bythe road. • 1523 south 2 Ave. couch — carpet — mattress — etc. • 003 south 3 m Ave. in the alley wood. • 7 south 16th Ave. by the bus stop fiesta food shopping cart by the bus stop store needs contacted. — • 122 north 1 8th Ave. Iow Iimbs clear view problem • 1113 Cherry in alley Yakima waste carts overfull to close to the pole; don't believe there being dumped bunch together. • Roy's Market — there are always piles of garbage dumped there. There's a lot there now. How Many Illegal Dumps Will Be Contracted Out for Clean Up? The average cost of an illegal dump clean-up for the City is approximately $90.00. To date, the SWD has cleaned and closed 63 iliegal dumps at a cost of $5.573.14. The City's Code Division has an additional 368 open iliegal dump sites. The Code Division only identifies iliegal dumps; they do not perform clean-up. The cost for clean-up includes personnel, equipment, tipping fees and the administrative costs associated with iliegal dump cleaning, closing and tracking. The table below shows the current charges for iliegat dump clean-up. Given the nature of iltegal dumps it is impossible to come up with an exact number that a contractor would be required to clean-up. We can estimate that it could be 850 illegal dumps yearly by using the number of current dump sites at a cost of $77,000 a year for the SWD to continue to address iliegal dumps. These are only p jections as the final cost is dependent upon the actual amount/tonnage collected and disposed. TippinglDisposal Current City of Yakima Solid Waste Labor and Equipment Costs Fees Equipment Total without Rear $ Per Person/Hr RearLoader* Totals Flatbed/Pickup Loader *Rear Loader is a specific type of garbage truck that can handle large volumes of waste. For efficiency, the Solid Waste Division utilizes the rear loader when it responds to a large illegal dump clean up or multiple site cleanups. It was difficult to find an example of a local illegal dump clean up contractor without going to a full RFP/RFI. The City's Purchasing Department was helpful in locating a few examples. • The City's Code Administration has contracted for board-up/clean-up of abandon properties at approximately $50/hour. 2 • The City of Concord, CA awarded a contract for ite — not to exceed $15.000. The contract was paid by a state grant. This would equate to 100 sites cleaned using the City of Yakima $90/cean-up costs. • According to Dept. of Labor & Industries, prevailing wage would be required under chapter 39.12 R[)VV. Prevailing wage Iocally are estimated below. � '| —= Tipping/Disposal Prevailing Wage Labor Costs Fees Personnel Wage Per Hour Equipment Totals Supervisor $30.65 $36.00 $66.65 Laborer $24.69 24.69 Total Not Including 55.34 36.00 91.34 $32.00 Tipping fee EXAMPLE OF GENERAL REQUIREMENTS -SCOPE OF WORK FOR ILLEGAL DUMP CLEAN UP The initial Scope of Work for contracting out illegal dump clean up would include but not be limited to the following. Work includes, but is not limited to, providing all |abor, nnmtoha|8, equipment, tools and services required to identify, debris clean-up and removal of illegally dumped waste within the city's right ofxxmyo. The primary purpose of this scope of work is to maintain the public health, aafetv, and well-being of the community and to restore the public areas to the city to dump-free condition in the shortest time period possible. The contractor shall not be paid to hand|a, process or dispose of debris that in unrelated to illegal dump clean ups. The contractor shall furnish and pay the costs, including sales tax and all other applicable taxes and fees, of all the necessary materials and shall furnish and pay for all the labor, tools, equipment, transportation and disposal cost. All equipment and vehices utilized shall meet all requirements of Federal, State and local regulations including, without limitation, all Department of Transportation safety regulations, and are subject to the approval of the city, Contractor is responsible for determining and complying with applicable requirements for securing loads while in transit. At a minimum, contractor shall assure that all Ioads are transported without threat of harm to the general pub|io, private property and public infrastructure. Contractor shall be responsible for establishing and scheduling collection routes in consultation with the city departmentiCodelSWD. 3 All debris collected from illegal dumps sites shall be taken to an approved solid waste landfill. There will be no dump aitms, debris staging areao, or debris transfer within the city limits, nor will there debris be permanently or temporarily stored or placed within the city limits. Contractor shall be responsible for the conduct and action of all employees and subcontractors. Contractors employees shall not exhibit any pattern of discourteous behavior to the public. Contractor should be prepared for potentiatly adverse working conditions. Contractor shall only bill the City for material that originates within the City. Proof collection site and Iandfill tickets wUl be required. The City shall provide monitoring and inspections as necessary to determine contract performance, which may include, but is not limited to, on-site inspection and metering of operations, and inspections of operating records during Contractor's operating hours. Contractor shall designate to the city key personnel having responsibilities for coordinating work activities with the city, and shall inform the city of any changes iri such personnel. Any environmental samples, analyses or remediation actions required as a result of contractor's equipment, operations or activities shall be the full responsibility of the contractor. Debris that is classified as hazardous or toxic is not included in the scope of work. Hazardous or toxic materials or waste includes, but is not limited to petroleum products, asbestos electrical transformers, and known or suspected hazardous materials. The contractor must demonstrate proof of experience in iden1|h/ing, cm||gcting, removing, disposing and reporting iliegal dump clean ups. The contractor shall provide proof of worker's compensation insurance for all employees. The contractor, shall submit proof of general liability insurance which shall remain in full force and effect throughout the term of the Contract in an amount specified by the City. Given the administrative responsibilities of the job for both the SWD and code compliance and the risk that would be affiliated with clean-ups and the oversight necessary with a contract, it is likely that contracting for Ulegal dump ctean up would not save the City money. In addition, riote that the current budget does not allocate any money for illegal dump clean-up at present whether in house our contracted out. For the Solid Waste Division to continue with illegal dump and community clean ups it is estimated that $O.26 would need to be added to the proposed rate increase. 4 WHAT WOULD IT COST TOR IMPLEMENT A PROGRAM THAT LOOKS LIKE OLYMPIA'S MODEL? As directed by Council, the City of Yakima's solid waste staff followed up with staff from the City of Olympia Waste ReSources Division to learn more about their current program. Waste ReSources collects garage, recycling and organics from single family properties using carts and automated side load trucks. Waste ReSources also collects from multi - family residences and commercial accounts. The total container count for garbage collection (2013 data) is 13,617; 14,472 for recycling and; 7,505 for organics. The garbage and recyclables for residential customers for the City of Olympia are collected on an every other week schedule, By contrast, the current container count for the city of Yakima is 25,647 for refuse and 6,462 for yard waste. The City does not collect from multi - family residences over 4 units nor does it collect refuse from the commercial sector. The City's solid waste staff inquired with Waste ReSources staff what they thought would be required to implement a similar program in Yakima. The response received was it is not a matter of cost as it is a matter of what recycling infrastructure do you have in place? Olympia's model is based on having a robust recycling program in place; access to a vendors and an on -going planning process. Ron Jones from ReSources stated that while looking at the Olympia model may be a framework, it is not a comparable project for any one community as all garbage is local. What is efficient and effective in one community may not work in another. Collection rates are not just set on arriving at a number to cover costs. They are set on an existing integrated system, the current level of service required to meet immediate needs and future projected levels of service projected to meet future needs. If the City of Yakima had a recycling infrastructure in place, i.e. trucks, vendor to accept recyclables, 12% reserves to cover the unexpected downturns, it could explore Every- Other -Week (EOW) garbage /recycling collection. This would require a long term commitment to planning with community stakeholders involved in a number of pilots to test the EOW model. Given that the variables are too numerous to give firm numbers, hypothetically, the cost could be the $6.22 as presented in the Bundled Rate presented to City Council at the July 28th study session. Projecting EOW garbage /recycling collection costs at this time is impossible but planning /exploring it in detail in the coming years can be accomplished. The following tables summarizes the estimated costs for Yakima and compares the current cost of service to Olympia. Bundled Rate EOW Garbage /Recycling SW Volume 32 gallon garbage 96 gallon garbage Solid Waste $15.76 $18.06 Recycling 6.22 $6.22 Total $21.98 $24.28 ' 5 • City of Olympia Collection Bundled Collection Rates COS per Rate per Monthly Subscription Overall Monthly Subscriber Subscriber Difference Percent' Costs Revenues Difference 20- gallon cart, every other week $ 15.40 $ 8.78 $ (6.60) 14% $ 28,100 $ 16,400 $ (12,300) 35- gallon cart, every other week $ 17.10 $ 15.21 $ (1.90) 28% $ 65,300 $ 58,100 $ (7,300) 35 -gallon cart, 1 pickup /week $ 26.50 $ 33.43 $ 6.90 <1% $ 300 $ 400 $ 100 65- gallon cart, every other week $ 20.20 $ 20.76 $ 0.60 54% $ 148,900 $ 153,100 $ 4,100 65- gallon cart, 1 pickup /week $ 32.60 $ 66.86 $ 34.20 <1% $ < 100 $ 100 $ < 100 95- gallon cart, every other week $ 23.90 $ 35.94 $ 12.00 4% $ 12,900 $ 19,300 $ 6,500 95- gallon cart, 1 pickup /week $ 40.00 $ 108.68 $ 68.70 <1% $ 300 $ 800 $ 500 Single - Family Bundled Garbage and Recycling - Monthly Totals $ 256,400 $ 248,100 $ (8,400) Annual Totals $3,077,000 $2,977,000 $ (100,000) WHAT WOULD IT COST TO REDUCE THE 32 GAL COSTS FROM $5.76 TO $2.50 TO $1.04? If the collection rate for 32 gallon service is set at a rate less than the cost of service, the rate for 96 gallon service need to increase over the cost of service to offset the revenue deficiency. At the cost of service, the monthly revenue generated is $442,561. To maintain this level of required revenue, a subsidy is required of the 96 gallon customers. The following table summarizes the subsidy for each incremental increase for the 32 gallon garbage cart and the rate required for the 96 gallon garbage cart in order to achieve the required revenues. Description Customers Current Cost of Increase Increase Increase Rate Service by $1.04 by $2.50 by $3.00 32 Gallon 7,800 $10.00 $15.76 $11.04 $12.50 $13.00 96 Gallon 17,700 $17.02 $18.06 $20.14 $19.50 $19.28 Monthly Revenue $442,561 $442,590 $442,650 $442,656 If the 32 gallon cost is increased from $10 to $11.04, the 96 gallon cart would need to be increased by $2.08 (12 %) over the current rate. If the 32 was increased to $12.50, the 96 gallon cart would need to be increased by $1.44 (8 %) to $19.50. If the 32 were increased to $13.00, the 96 would be increased by $1.22 (7 %) to $19.28. 6 One aspect that is not considered is how many customers will migrate to the 32 gallon from the 96 gallon garbage cart. Assuming 10% of the customers downsized to a 32 gallon cart, the increase required on the 96 is an additional $0.30 for the $1.04 increase and $0.10 for either the $2.50 or $3.00 increase. 7 PRIVILEGED AND CONFIDENTIAL: COVERED BY THE ATTORNEY-CLIENT AND A WORK PRODUCT PRIVILEGES MEMORANDUM TO Honorable Mayor Cawley and Members of the City Council Tony O'Rourke, City Manager FROM Jeff Cutter, City Attorney DATE: July 31, 2015 SUBJ: Water shut-off to resolve refuse delinquencies There has been some recent consideration of means by which delinquent refuse accounts could be collected by the City. One method that has been discussed involves shutting off water service to residences that have failed to pay their refuse removal charges. While this action would no doubt result in some fairly timely resolution of the refuse charge delinquency, it would likely also generate some undesirable legal recourse against the City. The reason for the negative reaction is that the methods available to municipalities to collect delinquent utility bills 'is very specifically addressed in statute. Unfortunately, the means of collecting, typically through a lien and foreclosure process, is different for each type of utility service and the City is not at liberty to impose one lien/delinquency collection _method in order to collect on a different type of utility, For water service delinquencies RCW 35.21.300 provides for a "pseudo-lien'' method of collecting the past due balances by allowing the City to discontinue water service when an account becomes delinquent. This is a "self-help" lien that does not require recording with the County but rather provides a very immediate effect that is generally very successful in gaining payment on the utility. Wastewater and sewer liens are addressed in RCW 35.67,200 and .210, providing that a lien for past due sewer service bills shall be recorded with the County in the same manner as is prescribed for mechanic's liens, and foreclosed in the same fashion. For sewer service liens the statutes also provide an alternative means of collection that municipalities may use in situations where the municipality also provides the water service to the property that is delinquent on the sewer service bill, RCW 35.67.290 establishes a means in such cases to allow the municipality to shut off the water service to a property that is delinquent on sewer utility charges as a means of enforcing the sewer charge lien and collecting the delinquent fees, Unfortunately, for refuse charge delinquencies there is no similar provision, RCW 35.21.140 provides that liens for delinquent refuse disposal accounts shall be recorded with the County Auditor and foreclosed in the time and manner prescribed for labor and material liens. There is no alternate method provided for preserving or collecting refuse liens. The fact that the City includes all utilities in one billing statement does not eliminate the distinctions between methods of collection permitted by statute for each type of utility. If the delinquency exists in the water or sewer account, then service disconnect is justified. If the refuse charge k at issue, then recording a lien for the delinquent amount in accord with the statutory provisions is the only accepted means of collecting it Zammarchl Loretta From: Dean, James Sent: Friday, July 31, 2015 11.36 AM To: Schafer, Scott, Zammarchi, Loretta Subject: Delinquent account info. Attachments: collection sent since 2010 xis delinquent acct info,pdf Scott and Loretta, Attached are three documents containing the info requested by Council The collections sent document shows the number of accounts referred to collection since 2010 the only problem with it the system does not let me sod this by refuse only accounts so the total number is for all the utilities including irrigation. Also there is no way to pull a report showing how much of that has been collected thru the collection agency because it just shows as a payment on the account and can't filter on who made the payment. The Account aging Summary Report files show the total amount of money owed to each utility. The over 1 year column would represent anything owed from July 1 2014 and older back to the last write off of date 2008. The council report of accounts to be written off breaks down by utility how much debt was written in 2014 for the the year 2008, This represents less than 1% of the total revenue collected for the Utilities and is pretty consistent with has been written off in previous years. Hope this helps and let me know if you need anything else. James Dean City of Yakima Utility Services Manager 509-576-6615 (o) 509-576-6649 (f) F LY YKM E6 ;0 E6 0 6 0 d ■, 1 YM'OSS'OSOS 0 MMO -0 00 0 M 0000M 158'169'ESS - ISM ' SE 'MEE'IMS ' M9 °° O,O1'MOS ' MMy x p7.E.s E ' . , t ! 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City of Yakima Office of Neighborhood Development Services • .... To: Housing Staff and Related Associated Nonprofit Agencies From: AngelicatONDS Subject: 110MhirCDBG Federal Niedian Income Guidelines Date: June I, 2015 , the following income guidelines:, issued annually by the United States Department of Housing and Urban Development, will show eligible income levels for applicants in the Single-Family, Senior/Disabled, First Time Homeownership and New Construction liorneownership programs. All the applications received after this date will be approved using the updated income guidelines, ) Current ROME/CDBG Pr o irani Federal Median income Guidelines Family Size 1 2 1 4 5 6 1. 100% $40,600 $46,400 $52,200 S57.900 $62,600 $67 200 371 800 , , , 80% 832,450 $17,050 $41,700 $46,300 $50,050 ' $53,750 557,450 65% S26,390 830,160 533.930 $37,635 $40,690 643,680 846,6 5035 920,300 823200 $26,100 ' 628,950 531.300 533,600 i $35,900 4 4 3035 812,151) $13,900 $15,650 ' 517,350 $18.750 $20,150 521,350 Fair Market Rent a 1.. 1 Number of Bedrooms 0 1 3 3 4 $490 tii RP $769 $1027 81 ,240 .~ , ~. . ~ p ' '` ' | ' \�/ � ' � � 1 City ��K Olympia ) L'[]�)|f(]� c ,.(��.l�[�(,.[}/l �'��/�� -- ' ' ' ' -- v r - ' ^~ A �� __- APPLICATION FOR 2015 LIFELINE RATE FOR UTILITY SERVICES The City of Olympia offers a Lifeline rate on utihty services for customers who quaIfy s: • Low ncome AND disabled OR • Low ncome AND over 62. This rate applies to residential customers nn|y, Lifeline rates are 50% of the standard utility rate for water, sewer, storm water and solid waste, Once a customer qualifies for this program, the Lifeline rate becomes effective on the next billing cycle and must be renewed every year in order to maintain qualification. The combined household income must be less than the amounts listed b Members of Household Combined Household Income** 1 $25,050 2 $28,600 3 $32,200 4 $35,750 The income amounts for eligibility are reviewed and updated annually, **For households with more than 4 family members please call for income limits. Along with the complete application, please include the followirig items: •:. Proof of income for all members of household A copy of your tax return for the preceding catendar year or yearly social security statement (if you are not required to file and this was the only income) must be provided, Bank statements are no/occepted as proof. c IF VOU DID NOT FILE 4 TAX RETURN, PLEASE EXPLAIN THE REASON: _ ___ __ _� •> Proof of identification and age (usually in the form of driver's license or state issued ID) .:. Proof of disability in the form of � Social security disability statement . 1. , A parking placard ID card issued by the Washington State Department of Licensirig for certain debilitatirig conditions (Not alt conditions are covered in this requirement). For assistance in completing this application, please contact Utility Billing ot 360-753'8340. ,xLy� mAvo* �. �� " CITY wA,.46Fn . "' • ° 11 1 [J New Application Utiity Account Number: _ __�� Name (Lost Nome) (First Nome) Service Address: " _�___ Mailing Address: ��~=_~��=~�_ =___~ Of different than service address) Telephone N If using a parking placard ID card, please initial the following stating that the parking placard ID card was issued for one of the reasons listed, (As stated by K[VV4629.OlU) • Has such severe disability that the person cannot walk without the use of or assistance from a brace, cane, another person, prosthetic device, wheelchair, or other assistive device; • Uses portable oxygcn: • Is restricted by lung disease to such an extent that forced expiratory respiratory volume, when measured by spirometry is less thari one iter per second or the arterial oger tensiori is Iess than sixty mm/hg on room air at rest; • Has limited mobility and has no vision o whose vision with correcti'e lenses is so Iimited that the person requires alternatjve rnethods or skills to do efticieritly those things that are ord!nary done with siht by persons with normal vision; • Has an eye condition of a progressive nature that may lead to blindness: • Impairment by cardiovascular di5ease or cardc condition to the extent that the p erson * s functional limitations are classified as class m ar IV under sandards accepted by the American Heart Association; Initial here: Number uf residents inhousehold: Please Iist names and ages; Dependant? Employed? (List any additional o^a blank page) Yes No Yes No Yes No Yes No Yes No Yes No— Yes No Yes No Do you rent at this address or nvvn7 Continued on the reverse If you are a renter, who is the owncr? DECLARATION OF COMBINED TOTAL YEARLY HOUSEHOLD INCOME rt. Total Soda l Security for all members of household rtr Total Federal Civil Service, Railroad or Military Retirement rtr Veterans benefits rtr Other retirements, pensions and annuities ird Total wages, salaries, tips and consulting fees rt. Total unemployment and public assistance $ v v v rti. AM other interest received $ ®) Total gross income from trusts, royalties, estates and dividends $ rtr Total gross income from rentals, farm, partnerships or businesses $ rib Total capital gains (less sale of residence for reinvestment in new residence + AU other income $ (List source) rtr Less amount paid directly to nursing home for care of spouse or amount paid for in home care. TOTAL COMBINED YEARLY INCOME FOR ALL HOUSEHOLD MEMBERS $ Please remember to include proof for all the income listed above. Failure to provide will cause a delay and/or possible denial of application. (we) declare under penalty of perjury under the laws of the State of Washington, that the foregoing is true and correct. Verification of any of the information contained in this application may be obtained from any source named herein, Signature Date . P rogram L tine Rate The City of Olympia offers a Lifeline Rate on utilities services for customers who qualify as 1 ow - nc o m e and disabled. OR low-income senior citizens (age 62 and o\ er). This rate applies to residential customers only. Lifeline Rates are 50% ()U tile standard utility rate for Water, Solid Waste, Sewer, and Stormwater, One you qualify for this proh,ratn, the Li reline Rate becomes effective on your next billing cycle. Who is Eligible: Eligible customers must meet guidelines for low-income and disabled, or low-income and o\er the age of 62. For the purpose ofour Lifeline Rate, low income is defined as 50% below the median family income for Thurston County. tiouse Income Liniits: Combined households income must be less than the amount listed below for the number of Person( s) per Family • 1 Person in the family no more than $25.050 • 2 People in the family no more than $2S,600 • 3 People in the family no more than $32,200 • 4 People in the family no more than 1;35,750 Applying for the Program: Please attach the following items. • Proof of income. A copy of your tax return for the precedin2, calendar year must he pro' ded F or residents who do not file an IRS tax return, vou must provide documentation of all income, • Complete die ,) .