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CITY COMMISSION AGENDA ITEM |
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Department: |
Public Works Department |
Commission Meeting Date: July 11, 2017 |
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Staff Contact: |
Tammy Bennett, Assistant Public Works Director |
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Recommendations/Options/Action Requested: |
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Adopt on first reading Ordinance No. 9370, amending Sections 9-412.1, 9-412.2, 9-412.3, 9-412.4, 9-412.5, 9-412.6, 9-413, and 9-4A-110 of the Code of the City of Lawrence, Kansas, 2015 Edition, and amendments thereto, pertaining to the collection, removal, transportation, and disposal of solid waste. |
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Executive Summary: |
Ordinance 9370 adjusts rates for solid waste services three percent. During study sessions on both the 2017 and 2018 budgets, staff discussed the solid waste rate change of three percent for services. The rate increase equates to $0.55 per household per month for residential customers, or $6.60 per year. Note, the rate adjustment is based on the standard service level. A complete chart of rate changes contained in the ordinance is attached.
The rate adjustment is part of a multi-year strategy to establish adequate funding to sustain quality solid waste services while minimizing annual impacts to the rate payers. As an enterprise fund, the Solid Waste fund must generate sufficient revenue to cover operations. Rates are set by ordinance and are not “elastic,” meaning revenues do not rise as other prices (e.g. landfill fees) do. Small, consistent adjustments in rates minimize the impact on customers from sporadic large increases like those experienced in the past. Please find attached, the five-year financial forecast completed by the Finance Director, presented to the City Commission in early June.
Solid waste collection is a labor and equipment intensive endeavor, with significant material disposal contracts in place. Driving cost factors include wages, benefits (particularly health care and KPERS), and the overall inflation in the cost / complexity of equipment. The division continues to focus on automation, increasing technology, and worker safety. As a result, the Solid Waste Division will eliminate two vacant solid waste loader positions in the 2018 budget. Rising costs offset this staffing reduction though. Contract rates for various material streams adjust annually. Landfill rates increase 3.5 percent per year. Recycling tip fee increases are variable, anticipated to be 3 percent per year. An additional $310,000 is budgeted for landfill, HHW disposal, and Materials Recovery Facility (MRF) fees. Revenues for recycling material rebates are relatively low due to depression in the international commodity markets.
Division staff and managers continue to focus on route efficiency, productivity, and optimizing staff levels. The goal is to provide valuable services to the customers in the most sustainable ways, while maintaining quality, trained staff who stay as safe as possible on the job.
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Strategic Plan Critical Success Factor |
Safe, Healthy, and Welcoming Neighborhoods Innovative Infrastructure and Asset Management Core Services Sound Fiscal Stewardship |
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Fiscal Impact (Amount/Source): |
The rate changes in the ordinance equate to approximately a 3 percent increase in revenue to fund Solid Waste services in 2018. The 2018 revenue projection is $372,000 (2.8 percent) more than the 2017 projected revenue, not including interest on investments. The following points highlight the impact on rate payers.
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Attachments: |
Solid Waste Rate Information (rates, services, comparison chart) |
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Reviewed By: (for CMO use only) |
☐TM ☐DS ☐CT ☒BM |