11.04 Solid Waste Revised Rates1. SUBJECT
Resolution No. 11075 — 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 Enviromnental Services (CR &R). The Agreement became effective on
February 1, 2010. The franchise agreement stipulates that CR &R may request a rate adjustment
provided that their request is submitted in writing and received by March 30 of each calendar
year. The franchise 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 recommended rates mentioned in Resolution No. 11075 will
go into effect on July 1, 2018.
3. RECOMMENDED ACTION
Adopt Resolution No. 11075.
4. FISCAL IMPACT
Since CR &R is now responsible for receivables and payables of residential and commercial
accounts, there is no fiscal impact to the City.
15. STRATEGIC PLAN GOAL(S) J
2. Be a fiscally healthy community —
d. Analyze future fiscal needs and potential revenue opportunities.
4. Provide outstanding public service —
b. Provide facilities and services to meet customer expectations.
16. 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.
17. DISCUSSION and BACKGROUND I
Introduction
In accordance with the Agreement between the City of Orange and CR &R, CR &R submitted a
timely and properly documented rate adjustment request to become effective on July 1, 2018. The
Agreement stipulates CR &R's rate adjustment must also be in accordance with the City's
Residential and Commercial Rate Adjustment Model (Model). Based on their March 28
submittal, and review of documentation by staff, CR &R's rate adjustment request is correct and in
compliance with the Agreement and congruent with the parameters of the Model.
Rate Request Analysis
The Model utilizes changes in hourly labor rates, landfill disposal fees, and changes in the
Producer Price Index and Consumer Price Index to calculate a multiplier that is applied to all
residential and commercial solid waste service rates. The Model established agreed upon criteria
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
3.2% and 3.13 %, respectively. Table 1 below, and Attachment B, depict the effect of CR &R's
proposed rate adjustment request for basic residential and commercial service.
ITEM 2 06/12/18
Table 1: Comparison of Current and Requested CR &R Solid Waste
Collection Rates
Not only are the City's commercial and residential solid waste rates among the lowest in Orange
County, despite a substantial increase in landfill tipping fees, CR &R's City of Orange 2018
proposed solid waste collection rates are lower than Waste Management's 2010 rates (Table 2).
Table 2: Comparison of Current CR &R Requested and 2010 Waste
Management Monthly Solid Waste Collection Rates
CR &R Monthly Rate
Service
Current
Requested Rate
Residential Cart
$13.18
$13.60
Commercial Bin'
$52.97
$54.63
1 3- cu. yard trash bin collected once per week
Not only are the City's commercial and residential solid waste rates among the lowest in Orange
County, despite a substantial increase in landfill tipping fees, CR &R's City of Orange 2018
proposed solid waste collection rates are lower than Waste Management's 2010 rates (Table 2).
Table 2: Comparison of Current CR &R Requested and 2010 Waste
Management Monthly Solid Waste Collection Rates
Lowest One -Third Rate Stipulation
The franchise agreement stipulates CR &R's rates for residential curbside and commercial service
be in the lowest one -third of the 30 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.
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 (Attachment D). Moreover, even if the Model calculated a
rate that was greater than the lowest one - third, CR &R would be required 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. During the eight years that CR &R has provided the City's recycling and trash
collection operations, monthly solid waste collection rates have increased by $2.18 (Note: If the
$2.18 increase in the rate for CR &R's monthly collection of residential solid waste were averaged
over the first eight years of the agreement, the increase would amount to 2.4% annually).
If approved, Resolution No. 11075 (Attachment A) includes the approved residential and
commercial solid waste collection rate schedule for all services under the Agreement as
Attachment C. The recommended rates will become effective on July 1, 2018 and will be
ITEM 3 06/12/18
Monthly Rates
Service
Current CR &R
Request
2010
Waste Management
Residential Cart
$13.60
$14.78
Commercial Bin'
$54.63
$93.50
'3- cu. yard trash bin collected once per week
Lowest One -Third Rate Stipulation
The franchise agreement stipulates CR &R's rates for residential curbside and commercial service
be in the lowest one -third of the 30 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.
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 (Attachment D). Moreover, even if the Model calculated a
rate that was greater than the lowest one - third, CR &R would be required 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. During the eight years that CR &R has provided the City's recycling and trash
collection operations, monthly solid waste collection rates have increased by $2.18 (Note: If the
$2.18 increase in the rate for CR &R's monthly collection of residential solid waste were averaged
over the first eight years of the agreement, the increase would amount to 2.4% annually).
If approved, Resolution No. 11075 (Attachment A) includes the approved residential and
commercial solid waste collection rate schedule for all services under the Agreement as
Attachment C. The recommended rates will become effective on July 1, 2018 and will be
ITEM 3 06/12/18
incorporated into the City's Master Schedule of Fees and Charges. City staff has reviewed the
rate adjustment request and h as confirmed its accuracy with CR &R.
18. ATTACHMENTS
• Resolution No. 11075
• Proposed Rate Schedules for Solid Waste Collection
CR &R Detailed Solid Waste Collection Rate Schedules
• Orange County Residential Solid Waste Rate Comparison
• Orange County Commercial Solid Waste Rate Comparison
ITEM 4 06/12/18
RESOLUTION NO. 11075
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,
2018.
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, 2018.
ADOPTED this 12 day of June, 2018.
Teresa E. Smith, Mayor, City of Orange
ATTEST:
Mary E. Murphy, City Clerk, City of Orange