HomeMy WebLinkAboutCity Council Resolution 95-01 RESOLUTION 95 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SARATOGA MODIFYING RATES FOR SOLID WASTE
MANAGEMENT SERVICES
WHEREAS, the City of Saratoga has contracted with the Green
Valley Disposal Company, Inc. for the collection of garbage,
rubbish and recycling in the City; and
WHEREAS, the Green Valley Disposal Company, Inc. has
successfully bid an expanded recycling contract with the City of
Saratoga which will have an affect of the rates; and
WHEREAS, the City has accepted the performance audit
prepared by Hilton, Farnkopf, Hobson (incorporated herein by
reference) making various recommendations regarding the cost
basis for sector allocations under the City's Franchise Agreement
with Green Valley Disposal Company; and
WHEREAS, Green Valley Disposal Company, Inc. has requested a
rate modification for refuse collection services in the City of
Saratoga; and
WHEREAS, the City Council has reviewed and considered all
staff reports, other reports and documents submitted to it
regarding the rate modification request; and
WHEREAS, the City Manager has examined the proposed
modification and recommended that the rates should be modified in
accordance with Exhibits "A", "B" and "C";
WHEREAS, the City Council makes findings as shown on the
attached Rate Adjustment Findings, as shown on Exhibit "D"; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SARATOGA
DOES HEREBY RESOLVE AS FOLLOWS:
1. The rates for residential hard-to-serve solid waste
management services in the City of Saratoga shall
increase as shown on Exhibit "A" effective February 1,
1995.
2. The rates for drop-off box solid waste management
services in the City of Saratoga shall increase as
shown on Exhibit "B" effective February 1, 1995.
3. The rates for special handling fees in the City of
Saratoga as shown on Exhibit "C" shall be effective
February 1, 1995.
1
BE IT FURTHER RESOLVED that Resolution 93-033 be repealed.
PASSED AND ADOPTED at a regular meeting of the City Council
of the City of Saratoga, California, held on the 4th day of
January, 1995, by the following vote.
AYES: Councilmembers Jacobs, Moran, Tucker, Wolfe and Mayor Burger
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST: ~ 'MaYaerA( U '
Deputy City
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3~N 03 '95 13|22 SClR~TOB~ 034 P02
EXHIBIT "A"
FISCAL YEAR 1995 - 96 RESIDENTIAL SERVICE RATF.,S
TYPE OF SERVICE NUMB~ 'I~$-CURB 199~-96 OF CANS DISTANCE RATE
................. 0'- '$' ....... i5 27 '
i $ .
2 30.53
3 45.80
4 61.06
5 76.33
I 6' - 130' 2S.95
2 51.90
3 77.85
4 103.81
5 I29.76
............... ..... .............a6. ,i"'
2 73.27
3 109.91
4 146.55
5 I83.19
tIARD*TO*SERVE
I O' '- ~' 23.97
2 47.93
3 71.90
4 95.87
~ 119.83
..........6' 130 ' ~4.65''
2 69.31
3 103.96
4 138.61
5 173.26
i' .... > ~'30'' ' 4'5~34 ........
2 90.68
3 136.02
4 181.35
S 226.69
3*Pt, I 83 ' 95 1,=1: 0r-, $1~ATOiBA 838
EXI-IIBIT "B"
FISCAL YEAR 1995-96 COMMERCIAL SERVICE RATES
BIN SIZF-
# OF DUMPS
ImF_.~ WEF. K 11/3 cu yds 2 cu yds 3 cu yds 6 cu yds
1 99.22 140.31 197.61 396,55
2 171.26 24699 359.15 718.37
3 242.85 30?. 59 520.50 I, 040.83
4 3 14.54 461.32 681.96 1363.54
5 399.52 568. !)8 843.04 1684.20
6 457.91 842.96 1,004.31 2008.62
COMlvlERCIAL CAN
$12.33
FISCAL YEAR 1995-96 DP, OP-OFF BOX RATES
BOX
SIZE
6 cu yds IS cu ycls 30 cu yds 40 cu yds
4:58.02 349.!)? 512.82
1. ~Includes disposal ofl.5 ions ofclebris. More than 1.5 tons is charBed at 58,90/ton.
2. Includes dispossl of 4.5 tons of'debris. More than 4.5 tons is charged $58.90/ton.
3. Includes disposal of 5.5 tons of debris. More than 5. S tons is charBed at 58.90/ton.
~AN 03 'gS 18:~7 SARATOGA 038 Pe2
EXHIBIT
SPECIAL HANDLING FEES
CO~RCIAL/RESIDENTIAL:
Charges: 13 Return trip $15,00
23 Reinstate service $10.00
33 Return bin =tier non-payment $25.00
43 Paim bin :$25.00
S) Steam clean bin (once free every 6 months) $25.00
COMMERCIAL:
Charges: Extra pickup: n:~ plus 20%
4,33
Credits= Missed pickup: ~
4.33
DROP OFF BOX:
Charges: 13 Relocate box $25.00 (resident changes location)
23 Return trip $25,00 (box blocked or not ready)
33 Steam clean packer $100.00
Charges: 13 F. xtra pickup:.xaaathl.y_f, hzg~ + 20°,4
4,33
23 Special pickup: fist 3 cubic yds $45,00, $20.00 each additional yard
33 Bulky items pickup: $30.00 ~rst 2 items, $8.00 each additional item, additional
$30.00 for each re~gented unit
Credit: 1 ) Vacation stop: no charBe if 4 week minimum
2) r_med pickup: muur,
4.33 "
EXHIBIT D
RATE ADJUSTMENT FINDINGS
The City Council for the City of Saratoga finds as follows
with regard to the rate base and rates adopted under its
franchise with Green Valley Disposal Company:
1. Green Valley Disposal Company submitted total 1993-
1994 budgeted expenses of $12,518,230.
2. Of the $12,518,230 in budgeted expenses for fiscal year
1993-1994, $20,584 of administrative expenses was
allocable to services performed for the Green Team,
which does not provide serve to the City of Saratoga.
3. The sum of $3,067 in employee cost is also allocable to
services provided for the Green Team.
4. Approximately $6,974 in advertising and promotional
expenses in unnecessary due to the exclusive nature of
Green Valley Disposal Company's franchise.
5. Green Valley Disposal Company alleges to have expended
a represented $141,347 in consultant fees in connection
with the present rate review. Substantially all of the
information provided by BCI is related to information
required to be submitted by the franchises as part of
any request for review of service rates, pursuant to
Section 6(D) of the Agreement. This information is to
be provided at no cost to the City.
6. Interest on the cost of the performance audit in the
amount of $333 should be added to the fiscal year 1993-
1994 expenses submitted by Green Valley.
7. The 1993-1994 expenses submitted by Green Valley
understated franchise fees by $47,874.
8. The total 1993-1994 operating costs for Green Valley
Disposal, after considering the foregoing adjustments
are:
Labor $3,960,451
Operating Cost 1,642,745
Depreciation and Interest 655,024
Administrative Costs 530,396
9. In addition, Disposal Costs for 1993-1994 were
$4,427,815.
10. Franchise fees for 1993-1994 were $1,338,881.
1
11. The total Adjusted Budget for 1993-1994 is $12,555.312.
12. The total Projected Budget for Green Valley Disposal
Company for the 1994-1995 fiscal year is $12,941,500,
broken out as follows:
Labor $4,038,425
Operating Costs 1,700,241
Depreciation and Interest 655,024
.Administrative Costs' 503,951
Disposal Costs 4,664,081
Franchise Fees 1,379,778
13. Of the Projected Budget of $12,941,500, the sum of
$1,104,945 is attributable to areas outside the service
areas of Campbell, Los Gatos, Monte Sereno, Saratoga,
and County Area 3.
14. The Projected 1994/95 Budget for the service areas of
Campbell, Los Gatos, Monte Sereno, Saratoga, and County
Area 3 is:
Operating Costs
Labor $3,700,216
Operating Costs 1,550,362
Depreciation and Interest 593,489
Administrative Costs 459,516
Qther Costs
Disposal Costs 4,270,134
Franchise Costs 1,262,838
15. Green Valley Disposal Company is not at risk for
increases in disposal fees and franchise fees, which
costs are not associated with Green Valley's
productivity, efficiency or qualify of service.
16. The Saratoga City Council has authorized a base
disposal fee at Guadalupe Landfill of $26.60 per ton.
17. Guadalupe Rubbish Disposal Company, the owner of
Guadalupe Landfill, is owned and operated by the same
four stockholders who own Green Valley Disposal
Company.
18. In the 1994-1995 fiscal year, surcharges of $16.36 per
ton will be assessed on the solid waste over and above
the approved disposal fee.
19. At the time Saratoga entered its Franchise Agreement
with Green Valley in March of 1983, no surcharges
existed on solid waste disposal.
20. The first surcharge on solid waste disposal was not
initiated until the 1987-88 Fiscal Year, and the total
of all surcharges remained de minimus at less than
$1.00 per ton until the 1990-91 Fiscal Year.
21. In the 1990-1991 fiscal year, the surcharges on
disposal fees rose to $5.08 per ton. In the fiscal
year, the City disallowed profits on the increase in
disposal fees.
22. In the 1992-1993 fiscal year, surcharges on disposal of
solid waste Jumped to $15.99 per ton; and in the 1994-
1995 fiscal year, the surcharges are calculated to be
$16.36 per ton. In fiscal year 1992-1993 fiscal year,
the West Valley Cities applied an average before tax
percentage profit from fiscal years 1986-1992 in order
to preclude a windfall on the increase in surcharges.
23. It is inappropriate to provide profits on disposal fee
surcharges.
24. 1994/95 disposal tonnage is anticipated to decline to
108,568 from the four West Valley cities due to
implementation of new recycling and yard waste
services.
25. Green Valley Disposal Company is an S Corporation.
26. An S Corporation does not pay any Federal taxes, and
pays only a 'one and one-half percent (11/2%) State
income tax. The effective tax rate on the shareholders
is thirty-five percent (35%).
27. The pretax operating ratios recently allowed by some
twelve other California jurisdictions range from 87% to
93%. Of these jurisdictions, the South Bay Transfer
Station Authority most closely resembles Saratoga's
franchise with Green Valley Disposal Company in that it
has a long term Franchise Agreement, guarantees the
return to its franchisee by a balancing account, and
represents relatively stable communities in San Mateo
County.
28. The South Bay Transfer Station Authority provides a 91%
Pre Tax Operating Ratio, and excludes profits on
disposal fees and franchise fees.