Memorandum

City of Lawrence

Public Works

 

TO:

Diane Stoddard, Interim City Manager

Casey Toomay, Assistant City Manager

FROM:

Charles F. Soules, Director of Public Works

Tammy Bennett, Assistant Public Works Director

DATE:

June 5, 2015

RE:

Solid Waste Division rates for 2016

 

Per the Public Works budget transmittal memo to the City Manager in May, the department respectfully requests the 2016 budget without a solid waste rate increase, with the understanding that some fund balance may be required to meet operational needs in 2016.

 

Below is the information provided with the budget submittal to the City Manager’s Office:

 

Curbside recycling was implemented in 2014. Revenues from recycling rebates have been drastically lower than projections due to depression in the international commodity markets. Ed Mullins projected rebates based on five-year market average was approximately $38 per ton. To date in 2015, we have received $0 per ton.

 

The Solid Waste Division budget submittal has expenditures higher than revenues. Of that “overage,” $360,000 is due to contingency funding. Five trash trucks have been included for replacement, with another seven fleet units deferred. Landfill rates are budgeted to increase 3.5 percent. In 2016, staff anticipates landfill rates will be $28.98 per ton, recycling tipping fees will continue to be $45 per ton. If recycling commodity markets do not rebound, and it is not acceptable for fund balance to support 2016 operations, funding set aside in equipment reserve could be used to complete purchases in 2016.

 

2016 projected revenues

$ 12,032,425

2016 projected expenditures (total)

$ 12,719,201

2016 projected expenditures (excluding contingency)

$ 12,359,201

2014 fund balance forward (unaudited)

$  3,155,309

 

As an enterprise fund, Solid Waste fund generates sufficient revenue to cover operations. Rates are set by ordinance and are not “elastic,” meaning revenues don’t rise as other prices do. Historically, we have tried to make small, consistent adjustments in our rates to minimize impact on customers. With the significant service changes in 2014, the department requests to hold rates steady this year. Staff will be able to evaluate a full year of operational costs of the new programs in 2015.

 

Solid Waste rate information:

Current solid waste rate information is summarized below:

Residential Rates

Standard residential monthly (65G cart)

Residential with 95G cart

Residential with 35G cart

Additional trash cart fees

Low-income, elderly rate

$ 17.75

$ 19.75

$ 16.25

$   3.00 / 4.00 (65G / 95G)

$  6.21

Commercial

Minimum commercial rate

$ 22.15

 

Dumpster and roll-off rates by size and frequency of collection (see attached)

 

 

Residential services include:

·         Weekly collection of solid waste

·         Bi-weekly collection of single-stream recycling (beginning October 2014)

·         Weekly collection of yard waste (March thru December)

·         Up to five tires per year collected curbside

·         Bulk item collection, including appliances

·         Household hazardous waste disposal through drop-off program

·         Special services, such as electronic waste drop-off events

 

There have been significant changes in solid waste services over the last three years, following the recommendations of the Solid Waste Task Force. The division implemented roll-out containers in 2012, to increase worker safety and move toward automation. At that time, we transitioned to a pay-as-you throw style system. In 2014, route days were changed for approximately 50 percent of residential customers and curbside recycling was implemented. Understanding these changes provides context for rates changes over the last few years.

 

 

2015

2014

2013

2012

2011

2010

Standard residential rates – 65G

$17.75

$14.94

$14.94

 

 

 

  Optional service – 95 gallon cart

$19.75

$16.94

$16.94

 

 

 

  Optional service – 35 gallon cart

$16.25

$13.44

$13.44

 

 

 

Residential trash services

 

 

 

14.94

14.55

13.85

Minimum commercial

 

 

 

21.71

21.14

20.13

 

Performance measures:

During a performance audit completed in 2010, the City auditor recommended including performance measures and benchmarking data in our annual rate memo. These were provided to the City Commission earlier this spring, but are attached here as per the auditor’s suggestion.