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Home My WebLink AboutPresentation - Agenda Item 5B - PSDS Rate Increases -101421DISCUSSION OF SOLID WASTE AND RECYCLING RATE INCREASES Item 5B Palm Springs City Council October 14, 2021 CURRENT WASTE AND RECYCLING SERVICES WASTE AND RECYCLING FEES City Fee Component Service Fee = Hauler Service Fee + Solid Waste Handling Fee + Diversion Facility & Sustainability Fee + State Administration Fee + City Admin Fee + City Franchise Fee $.08$.74 $.18$1 ANNUAL RATE ADJUSTMENT Consumer Price Index changes to reflect changes in overall prices of labor and goods –applied to Hauler Service Fee Material Handling changes to addresses latest cost of handling all materials, including disposal costs (tipping fee) and processing fees for recyclable and organic material –applies to Solid Waste Handling fee REQUESTED ADJUSTMENT (MONTHLY) Residential Economy Residential Walk -in Residential Estate Commercial First Bin (3cyd) Current Rate $18.38 $23.98 $61.18 $166.94 Add for 2021 Annual Adjustment $2.86 $2.25 $7.59 $17.63 •Applied to January and April bills. •In July, this increase is adjusted downward by half to form basis for 2022/2023 rates, because the monthly charges above should have started in July 2021. EXTRAORDINARY RATE ADJUSTMENT Contractor may request an adjustment to Maximum Service Fees at reasonable times other than that allowed in Section 10.4 in the event of extraordinary changes in the cost of providing service under this Agreement B. Extraordinary Costs. Changes in operating costs brought about by unforeseen circumstances beyond the control of the Contractor. E. Value of Recyclables. Change in the value of Recyclables from the values assumed by Contractor’s proposal. EXTRAORDINARY RATE ADJUSTMENT RATIONALE Recycling market collapse Devaluation of recyclable materials Increases in processing fees for recyclables Began in earnest in 2016, but especially more recently in 2019 EXTRAORDINARY RATE ADJUSTMENT IMPACT Material Handling changes to addresses latest cost of handling all materials, including disposal costs (tipping fee) and processing fees for recyclable and organic material –applies to Solid Waste Handling fee EXTRAORDINARY RATE ADJUSTMENT IMPACT (MONTHLY) Residential Economy Residential Walk-in Residential Estate Commercial First Bin (3cyd) Current Rate $18.38 $23.98 $61.18 $166.94 Add for ERA $4.65 $3.13 $11.89 $31.34 •Applied to January and April bills. •In July, this increase is will be eliminated. POTENTIAL OVERALL IMPACT TO CUSTOMERS Residential Economy Residential Walk-in Residential Estate Commercial First Bin (3cyd) Current Rate $18.38 $23.98 $61.18 $166.94 Add for 2021 Annual Adjustment $2.86 $2.25 $7.59 $17.63 Add for ERA $4.65 $3.13 $11.89 $31.34 January Billing Rate $25.89 $29.36 $80.66 $215.91 LONGER-TERM PERSPECTIVE Residential Economy Residential Walk-in Residential Estate Commercial First Bin (3cyd) Current Rate $18.38 $23.98 $61.18 $166.94 Add for 2021 Annual Adjustment $2.86 $2.25 $7.59 $17.63 Add for ERA $4.65 $3.13 $11.89 $31.34 January Billing Rate $25.89 $29.36 $80.66 $215.91 Decrease for 2021 Annual Adjustment $(1.43)$(1.13)$(3.80)$(8.82) Decrease for ERA $(4.65)$(3.13)$(11.89)$(31.34) Effective Starting Rate for July 2022 $19.81 $23.58 $64.97 $175.75 Example Add for SB 1383 in July 2022 $6.42 $8.37 $21.36 $7.70 Projected July billing rate before 2022 annual adjustment $26.23 $31.95 $86.33 $183.45 NEXT STEPS Issue Prop 218 notice Hold Hearing on either or both on December 9 Special meeting may be needed if approvals are delayed