05162022 Council Meetings Agenda Packet

Home

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