solid waste franchise agreement - city of milpitas · franchise agreement -review november 14, 2016...
TRANSCRIPT
Solid Waste Franchise Agreement
Background – City/MSI Inc. Solid Waste Franchise Agreement
Rate Adjustment Process
Solid Waste Rates
Average & Sample Residential Rates
Average & Sample Multi-family Rates
Average & Sample Commercial Rates
Public Outreach
Franchise Agreement Amendment No. 3
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Franchise Agreement - Review
November 14, 2016 – Approved Franchise Agreement with Milpitas Sanitation, Inc. (MSI)
Agreement term is 15 years - expires August 31, 2032
Citywide collection and hauling of solid waste, organics, and recycling materials
Amendment No. 1: March 21, 2017, changed start date of Waste Management services to December 1, 2017
Amendment No. 2: October 17, 2017, clarified entities providing post-collection services as Approved Facilities
Proposed Amendment No. 3: Recommend Approval
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Rate Adjustment Process Franchise Agreement - Exhibit D allows for annual rate adjustments.
Specifies annual rate adjustment applications are submitted and approved by the City Manager or designee.
Rate adjustments are Index-Based for all years except years 4,7, and 12.
Years 4, 7, and 12 are Cost-Based Adjustments.
Rate adjustment applications are submitted October for Index-Based Years, and August for Cost-Based Years for approval each December and effective each January 1.
Delayed approval of rate increase allows MSI to retroactively bill customers.
The Franchise Agreement caps the index-based rate adjustment at 5%. A cost-based adjustment greater than 5% requires Council approval.
The Rate Adjustment as approved is 4.26%, effective January 1, 2019.
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Solid Waste Rates
The approved 4.26% Rate Adjustment results in a cost increase for residential and commercial customers.
Residential increase ranges from $2.06 to $6.05 per quarter depending on cart size.
Example: 45 gallon cart service cost will increase from $123.57 to $128.83 -$5.26 per quarter.
Milpitas continues to have the lowest residential solid waste rate within Santa Clara County.
Average monthly single family rate per gallon for 12 cities within Santa Clara County and the City of Fremont is $1.00/gallon compared to Milpitas at $0.72/gallon.
Reasons for Rate Increase: Changes in Industry Index, increase in costs for services including labor, fuel, equipment, and processing costs.
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Average Residential Rate5
Residential Rates6
Garbage Cart Size
Current Quarterly Rate
Quarterly Rate; 4.26% Increase
Amount of Increase per Quarter
19-gal 96.66 100.78 $4.12
26-gal 105.06 109.54 $4.48
45-gal 123.57 128.83 $5.26
67-gal 141.96 148.01 $6.05
19-gal* 48.33 50.39 $2.06
26-gal* 52.53 54.77 $2.24
Single Family Split Cart ServiceBasic Weekly Service with Food Scraps, Recyclables & Yard Trims
* Senior Rate
Average Multi-family Rate7
Multi-family Rates
Garbage Bin Size
Current Monthly Rate
Monthly Ratewith 4.26% Increase
Amount of Increase per Month
1 yard 1x-week
337.24 351.60 $14.36
2 yard 1x-week
528.36 550.84 $22.48
4 yard 1x-week
881.80 919.36 $37.56
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Top Three Service LevelsBasic Weekly Service with Food Scraps, Recyclables & Yard Trims
Average Commercial Rate9
Commercial Rates
Garbage Bin Size
Current Monthly Rate
Monthly Ratewith 4.26% Increase
Amount of Increase per Month
2 yard 1x-week
733.48 764.72 $31.24
4 yard 1x-week
1,238.96 1,291.76 $52.80
4 yard 2x-week
2,427.36 2,530.76 $103.40
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Top Three Service LevelsBasic Weekly Service with Food Scraps, Recyclables & Yard Trims
Public Outreach11
City and MSI websites provide updated rate information
Courtesy notice of rate increase through local newspaper & City social media
Rate increase courtesy notices posted at City facilities
MSI residential quarterly newsletter issued January – February
Bill insert for Multi-family & Commercial accounts in January
Proposed Amendment No. 3
Routine minor Amendments to the contract are required to update tables, facilities, and indices to ensure agreement reflects services rendered.
Amendment No. 3 is now recommended for approval:
Section 4.5.A., Collection Services to City Facilities – collection services for all City facilities are offered at no additional cost.
Exhibit D, Table 2 Detail Index Information – Updates required measurement indices to conform with current US Bureau of Labor Statistics.
Exhibit D-1, Index-Based Rate Adjustment Methodology – Aligns specified agreement costs, depreciation, and interest expenses for amortization over full 15 year agreement term.
Exhibit F, List of City Facilities – Adds the McCarthy Pump Station and City property under SR-237 bridge to list of City facilities for collection services.
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