Memorandum

City of Lawrence

Public Works

 

 

TO:

Tom Markus, City Manager

Brandon McGuire, Assistant to the City Manager

Bryan Kidney, Finance Director

FROM:

Charles F. Soules, Director of Public Works

Tammy Bennett, Assistant Public Works Director

DATE:

March 29, 2018

RE:

Downtown solid waste rate structure

 

Background

Public Works staff highlighted the need to complete a comprehensive rate study when presenting to the City Commission in January 2018. The comprehensive study will be included in the 2019 budget proposal.

 

Due to a number of errors discovered in billing for downtown businesses and the limitations of the current model, Public Works staff recommends proceeding with phase 1 of the rate study to examine the core model for downtown within the next 90 days.

 

Approximately 9.5 blocks of the downtown area have a unique rate structure based on square footage and use, due to the space constrictions in alleys and need to provide shared containers in the downtown area. Outside this small area, rates are based on size of container and frequency of collection. The downtown shared container rate model has not been revised since at least 1978. Rates have been adjusted by percentage increases along with all other community rates, but there has been no analysis of the fundamental structure. Since 1978, the nature and character of businesses downtown have changed. Downtown now has a diverse array of retail, services, restaurants, and entertainment venues. The rate structure does not address the differences in trash generation based on usage in this limited area.

 

The inherent flaws in the rate model were highlighted recently. In response to some customer concerns about the rates proposed for the commercial single stream recycling pilot project, Solid Waste staff reviewed 18 downtown shared container accounts and found that 15 accounts were being billed at incorrect rates. Those discrepancies were corrected, and letters were sent to the customers explaining the change. Staff immediately undertook a comprehensive audit of all the 9.5 block area. Approximately 150 of 191 businesses audited are being charged at incorrect rates, almost all lower than the rates that should have been applied under the model. The errors have likely accumulated over a period of many years. Public Works identified points where the internal process was breaking down and established procedures to eliminate the possibilities for future errors. In the spirit of full transparency, the Public Works Department is responsible for auditing downtown rates and acknowledges the burden of the errors are our responsibility.

 

Plan to move forward:

Addressing the rate structure for the core area must move forward as expediently as possible.

 

1.    Contract for professional consulting services to establish a rate model for the designated area of downtown where space constraints require shared container use and daily collection. (Note, commercial rates outside this area are established by the business based on the size of container and frequency of collection needed to serve them.)

2.    Recommendation for rate structure will be completed in 90 days.

3.    Downtown businesses will be notified of the process. Staff and the consultant will schedule times to meet with downtown businesses to discuss the nuances of the proposed models and equity of services with similar businesses outside this core area.

4.    Staff and the consultant will provide a recommendation to the City Managerís office on the updated rate structure and method for handling billing changes. The recommendation will include a process to address past billing issues.

5.    The comprehensive rate analysis and review for the entire solid waste system will move forward in 2019, if approved in the budget process.