2020 Solid Waste Rates Presentation to Regional Waste Advisory Committee July 2020
When are rates typically adjusted? $98.35/ton $97.45/ton $107.20/ton JUL OCT JAN DEC Recommend .90¢/ton increase to $8.85/ton increase the Excise Tax to the Tip Charge 2
Why no rate increase in July? Unclear what impact COVID Tonnage appeared to was having on tonnage be in a steep decline ? Did not want to raise costs Tonnage appears to have shifted with economic uncertainty to residential 3
Budget reduction impacts? • Budget reductions taken in FY19-20 and FY20-21 did not have significant impact on rates but did reduce pressure on rate increase • Primary impact on rates was pushing out rate increases necessary to cover debt service to finance future capital improvements • Originally, anticipated issuing bonds in FY21 – now deferred ? • Fewer tons (new forecast coming) 4
What do rates cover each year? $45M PUBLIC OPERATIONS staff & major contracts REGIONAL PROGRAMS $36M Programs, grants, partnerships & projects GENERAL GOVERNMENT $18M excise tax $99M TOTAL 5
Rate components and charges 1 2 3 Metro All ratepayers All transfer station customers (disposed tonnage) (incoming tons) • Transaction charges • Regional system fee • Enhancement (host) fees • Tonnage charges • Excise tax • DEQ fees 6
Solid waste fund reserve balance $53M as of July 1, 2020 Restricted funds • Landfill closure = $5.6M • Pollution remediation (GASB 49) = $5M Assigned reserves • Capital reserves = $6M • Renewal & Replacement = $5M • Rate stabilization = $3M • Operating reserves = $11M $36M as of July 1, 2021 7
Rate increase components recommended 1 Tonnage fees Transaction fees 2 Regional system fees 8
Rate components 1 Tonnage fees include • Charge on each ton of waste • Covers operation of: ‐ Transfer stations ($16M) ‐ Disposal ($9M) ‐ Transport/fuel ($13M) ‐ Organics/compost ($3M) • Increased cost of running Metro South of $4M annually 9
Rate increase components recommended 1 Tonnage charge/fees recommended increases • $64.41 to $69.51/ton (increase of $5.10/ton) • Metro customer charge • Private transfer stations likely to follow suit 10
Rate components 2 Regional system fee includes • Charge on every ton of solid waste disposed • Paid by ratepayer/customers at all facilities • Remitted to Metro by transfer station, MRFs, landfills, generators and all persons disposing of waste in a landfill • Used to fund regional solid waste programs 11
Rate increase components recommended 2 Regional system fee recommended increases • Increase of $3.75/ton from $18.58 to $22.33/ton • Charge on all disposed tons • Reflect program costs in approved FY20-21 budget 12
Other charges: transaction fees Transaction fee recommended increase • Reflect actual costs • 5% increase in self-haul customers • Traffic control/load checks (asbestos) • Automatic scale from $2 to $2.50 a transaction • Staffed scale from $10 to $13 a transaction 13
Other charges: transaction fees Transaction fees include • Charged on each customer transaction at Metro TS • Commercial customers = automated scale ($2) • All other customers = staffed scale ($10) 14
Proposed minimum load charge increase Increase of $4 Proposed minimum load charge of Current minimum $32 load charge of $28 15
What won’t increase? • Excise tax (automatic 0.90 cent increase in July) • DEQ fees ($1.89/ton) • Enhancement fees ($1.00/ton) 16
What does this all mean ? Current Increase Proposed Tonnage fee $64.41 $5.10 $69.51 Regional system fee $18.58 $3.75 $22.33 Excise tax $12.47 NA $12.47 DEQ fee $1.89 NA $1.89 Enhancement (host) fee $1.00 NA $1.00 TOTAL TIP FEE $98.75 $8.85 $107.20 (9%)
Other charges Current Increase Proposed Transaction fee (automated) $2 $ .50 $2.50 Transaction fee (scalehouse) $10 $3.00 $13.00 Minimum charge $28 $4.00 $32.00
Tip fee impact on curbside rates $32.55 + $0.57 = $33.12 1.7% proposed new monthly a month increase increase billing 19
Tonnage charge covers new costs $4M increase to Recology contract at MSS (Operational cost increases and fewer tons) $1M increase for traffic control at MSS $500K new green fuel program 20
Regional system fee covers $3M I&I grant program $9M capital to buy future facility sites $4M capital for food processing equipment at Metro Central $2M in grants/partnerships, staff, and Regional Waste Plan 21
Other rate related issues to consider • Tonnage allocations o Mid-year adjustment for Metro to retain 40% of wet tons o Goals-based allocation development/implementation in 2021 • Rate transparency o Next step is 3 rd party audit of private transfer stations o Recommend no audit at private transfer stations if the stay at or below public station rates • New solid waste facilities o Cornelius land purchase in 2020 o Clackamas County land purchase in 2021 o RFP for design and build of facilities in FY21-22 22
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