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crrY oF Finance Department
Interoffi'ice Memoraridum
WASHINGTON
To: Municipal Secvices & Finanoe Committees .
From: Shelley Coleman, Finance Director
' CC: Pete Lewis, Mayor .
Date: October 12, 2010 ,
Re: Solid Waste Rate Analysis .
The Finance Department recently conducted an analysis:to defermine a rate increase for,solid waste
customers. The Waste Management collection fees to the Cify increase annually,.but the: last solid
waste rate increase for customers was in February 2007.
Since 2007, WM collection fees to the City have increased a total of 7.8%.and those costs have been
subsidized by the Solid Waste Fund Balance. The current solid waste contract with Waste
Management (WM) expires December 31, 2012.
Revenues have also decreased due:to the economic downfurn: We may only see a minor revenue
increase when the economy recovers. Revenues will most likely remain down for years to come
because of sustainability and waste reduction efforts.
The rate model estimates a` 2010 ending Fund Balance of $672;755, excluding revenues from late
, penalties and fees which total approximately $120,000. Without a customer rate increase, the Fund
Balance will be eliminated within the next two years.
The followin4 rate options.are proposed:. '
• Option A- 6% increase in 2011, 6% increase in 2012; and 6% increase in 2013
e Option B- 9% increase in 2011, 9%o increase in 2012, and 9% increase in 2013
• Option C-12% increase in 2011, 4% increase in 2012, and 4% increase in 2013
e Option D-13% increase in 2011, 4.5% increase in 2012, and 4.5% increase in 2013
• Option E-14% increase in 2011, 3% increase in2012, and 3% increase in 2013
Page 1 of 2
AUBURN * MORE THAN YOU IMAGINED
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The following assumptions were made to develop the rate options:
2011' .
Consumer:Price Index (CPI),decrease of 0.06%
B&O Tax increase of 0 3% .
2012 :
Estimated CPI increase of 1.38%
Esfimated King County Tipping Fee increase from $95/ton to $105/ton
2013
Estimated CPI increase of'2% .
Assumes operating under same WM contract
lncluded in vour agenda packef are:
o Rate Model - Option A v Rates - Option A
• Rate Model - Option B
~ Rates - Option B
• Rate Model - Option G ~ Rates - Option C
• Rate Model - Option D - . ~ • Rates - Option D .
• Rate Model - Option E ~ Rates - Option E
m 2010 Waste Management Contraet and City-6illed Rate"s
2011 Solid Waste Administration Budget 1 . . -
Page 2 of 2
AUBURN * MORE THAN YOU IMAGWED
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SOLID WASTE FUND .
WORKING CAPITAL 2007 - 2010
Estimated
2007 2008 2009 2010
Ending Working Capital $ 3,035,185 $ 2,695,161 $ 1;399,901 $ 800,406
WC Change $ (340,024) $ (1,295,260) $ (599,495)
WC Change due to 13% Utility Tax $ (165,934) $ (805,924) $ -
WC Change due to irate subsidization $ (174,090) $ (489,336) $ (5991495)
Total WC Change - $ 340,024$ (11295,260) $ (599,495
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WASTE MANAGEMENT SERVICE AREA - BILLED BY CITY OF AUBURN -
_ 2005 City 2007 City Percent
Rate Rate Increase
RESIDENTIAL
1 1'0 Gallorr Microcan $3.81 4.38 15%
l 20 Callon Minican $7J4 8.90 15%
1 32 Gallon Can `$9.83 11.30 15%
1 35 Gallon Contractor Cart $12.08 13.89 15%
1 64 Gallon Contractor Cart $21.72 24.97 15%
1 96 Gallorr Contractor Cart $30.27 34.80. 15%
132 Gallon Extra $9.42 10:83 15%
Yard Debris Service
Basi'c Yar:d ,Debris Service $6.48 - 7.45 15% '
COMMERCIAL ,
1 T:O Gallon Microcan 4.00 4.60 15%
1 20 Gallon Mini'carr 8.13 9.35 15%
1 32 Gallon Can 12.24 14.07 15%
64 Gallon Contcactor Car.t - 19.74 22.69 15%
96 Gallon Contractor Cart 27.24 31.32 15%.
1 Yard Confainer, ]i icku" /week 85.36' 98.14 15%
1.5.`Yard "Container, T'icku /week 1 13.10 130:03 115%
2~Yard Container, 1 ieku /w.eek 129:31 148:67 15%
- 3 Yard Container, 1 icku /week 179:92 206.85 15%
4 Yard Container, l icku /week: . 225.28 259:00 15%
- 6 Yard Container, 1 icku /week 319.28 367.07 15%
8 Yard Container, 1 icku /week 401.82 461.97 15%
ROLLOFF.
Permanent Dro Box Haul Fees 98.66 120.23 22°6 .
Permanent Com actor'Haul Fees 119.70 145.87 22%
Tem orar Dro -box Haul Fees 118.38 144.27 22%
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2005 to 2007 City Rates.xlsWM 2007 Rates 10/18/2010