SR - RES-11011 - REVISED RATES SOLID WASTE COLLECTION AND DISPOSAL SERVICES1. SUBJECT
Resolution No. 11011 — A Resolution of the City Council of the City of Orange approving
revised rates for solid waste collection and disposal services.
2. SUMMARY
On July 14, 2009, the City of Orange entered into an Integrated Solid Waste Services Agreement
(Agreement) with CR &R Environmental Services (CR &R). The Agreement became effective on
February 1, 2010. The Agreement stipulates that CR &R may request an annual rate adjustment
provided that their request is submitted in writing and received by March 30 of each calendar year.
The Agreement also stipulates that specified residential and commercial rates be within the lowest
one third of all cities in Orange County which provide a comparable solid waste service. If
approved, the rates recommended in Resolution No. 11011 will become effective on July 1, 2017.
3. RECOMMENDED ACTION
Adopt Resolution No. 11011.
4. FISCAL IMPACT
None
15. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community —
d. Analyze future fiscal needs and potential revenue opportunities.
4. Provide outstanding public service —
d. Provide facilities and services to meet customer expectations.
1 6. GENERAL PLAN IMPLEMENTATION
Infrastructure Element Goal 2.0 Reduce the amount of waste material entering regional landfills
with an efficient and innovative waste management program.
Policy 2.1: Provide sufficient levels of solid waste service throughout the community.
Policy 2.2: Expand outreach and education regarding recycling opportunities to all city
customers.
Policy 2.3: Develop programs that encourage residents to donate or recycle surplus furniture, old
electronics, clothing, and other household items rather than disposing of such
material in landfills.
Policy 2.4: Expand outreach and education to all city customers regarding residential collection
of household hazardous wastes including paint containers, electronics, household
chemicals, motor oils, and pesticides
7. DISCUSSION AND BACKGROUND
Introduction
In accordance with the Agreement between the City of Orange and CR &R, CR &R submitted a
request with supporting documentation for a July 1, 2017 rate adjustment. The Agreement between
the City and CR &R stipulates that CR &R is entitled to an annual rate adjustment provided they
submit their request in writing by March 30 (Attachment A) and such adjustment is in accordance
with the Residential and Commercial Rate Adjustment Model (Model). CR &R submitted their
request for a rate adjustment on March 30, 2017. Based on their March 30 submittal and review
by staff, CR &R's rate adjustment request is correct and in compliance with the Agreement and
consistent with the parameters of the Model.
Rate Request Analysis
The rate adjustment request that CR &R submitted to the City is based upon their application of
the Model. The Model utilizes changes in hourly labor rates, landfill disposal fees, and changes
in the PPI and CPI to calculate a multiplier that can be applied to all residential and commercial
solid waste service rates. Ultimately, the Model was created to establish criteria that the City and
CR &R have agreed to for the verification, recommendation and establishment of equitable solid
waste service rates.
CR &R is requesting an adjustment of residential and commercial solid waste collection rates of
1.70%. Following review of their March 30 submittal staff concurs the rate adjustment
request is correct and in compliance with the Agreement and consistent with the parameters
of the Model.
ITEM 2 6/13/17
Lowest One -Third Rate Stipulation
In addition to the utilization of the Model to calculate rates, the Agreement stipulates that
CR &R's residential rates for residential curbside and commercial service must be in the lowest
one -third of all Orange County cities providing comparable solid waste services. For residential
service, cities that provide fully automated collection using three carts, one each for trash,
recyclables, and green waste, are considered comparable.
Currently, there are 30 cities in Orange County that provide comparable cart service, and 33
cities that provide similar bin service. In order to meet the lowest one -third threshold, there must
be twice as many cities with higher rates as there are with lower rates. When CR &R's rate
adjustment request is compared against similar Orange County cities, the residential rates are the
third lowest and the commercial rates are the lowest. Over the last two decades, the City's
residential and commercial rates continue to rank among the lowest one -third of comparable
Orange County cities (Attachments C and D). Moreover, if the Model calculated a rate that was
greater than the lowest one - third, CR &R would have to reduce their residential and commercial
rates to equate with the lowest one - third.
When the franchise with CR &R began on February 1, 2010, the initial residential rate was
$11.42 /month. In the seven years that CR &R has provided the City's recycling and trash
collection operations, solid waste collection rates have increased by $1.53 (If the $1.53 increase in
the rate for CR &R's collection of residential solid waste were averaged over the first seven years
of the Agreement, the increase would amount to 1.7% annually).
Recommendation
Approve Resolution No. 11011 which includes the approved residential and commercial solid
waste collection rate schedule for all services under the Agreement. The rates recommended in
Resolution No. 11011 will become effective on July 1, 2017 and will be incorporated into the
City's Master Schedule of Fees and Charges. The CR &R rate adjustment request has been
reviewed by City staff and confirmed with CR &R staff for its accuracy.
8. ATTACHMENTS
• Resolution No. 11011
• Attachment A: CR &R Request for Annual Rate Adjustment
• Attachment B: Comparative Solid Waste Rate Schedule
• Attachment C: Orange County Residential Solid Waste Rate Comparison
• Attachment D: Orange County Commercial Solid Waste Rate Comparison
RESOLUTION NO. 11011
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ORANGE APPROVING REVISED
RATES FOR SOLID WASTE COLLECTION AND
DISPOSAL SERVICES.
WHEREAS, the Orange Municipal Code and Public Resources Code Section 40059
authorize the City to revise rates for solid waste collection and disposal services by resolution;
and
WHEREAS, the Integrated Solid Waste Management Agreement (Agreement) between the
City of Orange and CR &R Incorporated (CR &R) provides for an adjustment based on a rate
adjustment formula, which is stipulated in the Agreement; and
WHEREAS, the Agreement requires CR &R to guarantee that the Company's comparable
rate for certain services will be in the lowest one -third of the rates being charged for similar services
in comparable cities in Orange County; and
WHEREAS, the attached rate adjustment request from CR &R will be effective July 1, 2017.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Orange hereby
resolves as follows:
The attached solid waste rate adjustment shall be approved and incorporated into the City's Master
Schedule of Fees and Charges, with all rates effective July 1, 2017.
Adopted this day of , 2017.
ATTEST:
Mary E. Murphy
City Clerk of the City of Orange
Teresa E. Smith
Mayor of the City of Orange
ITEM 4 6/13/17