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File Number: 22-334 <br />created to reflect changes in cost by focusing on six cost categories within the Consumer Price <br />Index specific to the solid waste industry: Labor; Diesel Fuel; Vehicle Replacement; Vehicle <br />Maintenance; Disposal and All Other. Apart from special rate adjustments in 2015 related to the <br />Material Recovery Facility labor issue, and the special rate adjustment in 2019, the RRI has been <br />used to modify rates since 2010. <br />Rate Increases 2010-2021 <br />Year Rate Reason <br />2010:2.88%Annual rate adjustment per Amendment 10 <br />2011:1.12%Annual rate adjustment per Amendment 10 <br />2012:5.50%Annual rate adjustment per Amendment 10 <br />2013:1.82%Annual rate adjustment per Amendment 10 <br />2015:4.01%Special rate adjustment per Amendment 11 <br />2015:8.49%Special rate adjustment per Amendment 12 <br />2017:1.65%Annual rate adjustment per Amendments 10, 11 & 12 <br />2018:3.41%Annual rate adjustment per Amendments 10, 11 & 12 <br />2019 7.89%Special rate adjustment per Amendment 13 <br />2020 4.42%Annual rate adjustment per Amendments 10, 11 & 12 <br />2021 .89%Annual rate adjustment per Amendments 10, 11 & 12 <br />On June 17, 2019, the City Council approved ACI’s request for a special rate adjustment of <br />7.89% effective October 1, 2019, as Amendment 13 to the Franchise Agreement. The rate <br />request included 3.78% annual rate adjustment, .39% to manage the financial impact of the <br />Chinese government’s National Sword policy (affecting recycling markets), and 3.72% to <br />implement a new commercial organics collection route as mandated by state and local law. <br />At the meeting in 2019, staff indicated that ACI would come back to the City Council with a <br />request for a modification to the annual rate adjustment methodology , to be applied to rates <br />effective July 1, 2020, and thereafter. On March 2, 2020, staff and ACI presented a proposed rate <br />adjustment methodology intended to capture the true cost of operations and reflect costs <br />associated with changes in law, such as SB 1383. That proposed Amendment 14 (March 2, <br />2020) was not approved by the City Council. <br />The existing annual rate adjustment process (RRI) has not accurately reflected ACI’s true costs <br />and was established prior to any state or local recycling/composting mandates . <br />Analysis <br />Proposed Amendment 14 provides for a 5.69% increase on all rates. The elements of the <br />increase are: <br />·.80% increase to conduct education, outreach, and reporting requirements as mandated <br />by state law SB 1383 (see Attachment A) <br />·.16% increase for incremental labor increases at the Material Recovery Facility as <br />specified in Amendment Eleven and Twelve of the Agreement <br />·1.11% net decrease for recycling revenue share as specified in Amendment Ten of the <br />Agreement <br />Page 2 City of San Leandro Printed on 5/11/2022