HomeMy WebLinkAboutEDCO Disposal Corporation - Rate Adjustment and Recycling Program - 1992City of National City, California
COUNCIL AGENDA STATEMENT
MEETING DATE July 28, 1992
AGENDA ITEM NO. 2
ITEM TITLE RESOLUTION APPROVING THE ESTABLISHMENT OF A MULTIFAMILY
RECYCLING PROGRAM, A COMMERCIAL/INDUSTRIAL RECYCLING PROGRAM,
A YARD WASTE PROGRAM, AND APPROVING A TRASH SERVICE RATE
INCREASE FOR EDCO DISPOSAL CORPORATION
PREPARED BY C. R. Williams, Jr� DEPARTMENT Public Works
EXPLANATION
See attached.
Environmental Review x N/A
Financial Statement
Increased costs will be borne by citizens. Franchise fee increase from
2% to 5% will accrue to city general fund.
Account No.
STAFF RECOMMENDATION
Approve rates as submitted.
BOARD/COMMISSION RECOMMENDATION
N/A
ATTACHMENTS (Listed Below)
1. EDCO letter
2. Explanation and summary
3. Outside audit firm report
x Resolution No. 92-145
A-200 (Rev. 9/80)
RESOLUTION NO. 92-145
RESOLUTION OF THE CITY COUNCIL OF HE CITY
OF NATIONAL CITY APPROVING THE ESTABLISHMENT OF A
MULTIFAMILY RECYCLING PROGRAM, A COMMERCIAL/INDUSTRIAL
RECYCLING PROGRAM, A YARD WASTE PROGRAM, AND
APPROVING A TRASH SERVICE RATE INCREASE
FOR EDCO DISPOSAL CORPORATION
follows:
The City Council of the City of Naitonal City does hereby resolve as
WHEREAS, the last trash service rate increase for EDCO, the City's
franchised trash hauler was in May 1991; and
WHEREAS, the County of San Diego is expected to raise its rate for waste
disposal effective October 1, 1992, and the City Council has approved that this type
increase be treated as a pass -through cost to trash subscribers; and
WHEREAS, additional services are being requested of EDCO, to wit,
multifamily recycling, commercial/industrial recycling and yard waste diversion as
provided for in Ordinance No. 92-2029, adopted on April 28, 1992; and
WHEREAS, the new trash service rates will be comparable to those of
surrounding cities.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of National City that the proposed rate schedule, a copy of which is attached hereto as
Exhibit "A," is hereby approved, effective July 1, 1992.
PASSED and ADOPTED this 28th day of July, 1992.
ATTEST:
Lori Anne Peoples
City Clerk
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney
George H. Waters, Mayor
COUNCIL AGENDA S. EMENT
ITEM TITLE RESOLUTION OF THE CITY COUNCIL APPROVING THE
ESTABLISHMENT OF A MULTIFAMILY RECYCLING
PROGRAM, A COMMERCIAL/INDUSTRIAL RECYCLING
PROGRAM, A YARD WASTE PROGRAM, AND APPROVING
A TRASH SERVICE RATE INCREASE FOR EDCO
DISPOSAL CORPORATION
EXPLANATION
SUMMARY
The contractor's request for increased trash rates for
FY 93 contains the contractually established Consumer Price
Index (CPI) increase, plus an amount to cover the pass -
through tipping fee from the county, and an increase in the
franchise fee paid to the city from 2% of gross to 5% of
gross.
In addition, adjustment is made to account for the
decrease in value of recyclable materials experienced in
FY 92 and anticipated for FY 93.
Increases are also being sought to cover the costs of
additional programs that the contractor is being required to
accomplish in accord with state -levied AB 939 and county -
established requirements. These include multifamily
recycling, commercial/industrial recycling, and a 6-month
pilot - 3 months citywide green materials diversion program.
The total amount of increase is 16.3% over current rates and
results in a single-family rate of $11.75/month (vice the
present $10.10/month) and an increase in cost for one
3 cu. yd. dumpster one time per week to $73.00/month (vice
the present $62.65/month).
A special rate for SENIOR CITIZENS (persons who are head -of -
the -household and are 60 years of age or older) is in effect
at $9.55/month, and the trash bag purchase by senior
citizens at $1.25/bag is still effective.
The cost of "FREE" services including the twice -a -year yard
cleanup, the city trash at no cost, the street side trash
can program, the bulky -item -by -appointment, and the
refrigerator door program are all included in the rate being
requested.
-2-
I. The existing contract with EDCO provides for an annual
fee review, based upon changes in the Consumer Price
Index, and for pass -through charges for county tipping
fee charges.
II. The picture is clouded this year because consideration
of some additional factors is required, each of which
puts an upward pressure on the rate:
a. The county tipping fee is going up.
b. The franchise fee is scheduled to increase from
2% to 5% •effective July 1, 1992.
c. The market for recyclables has deteriorated.
d. We are requesting additional services.
III. To discuss these individually:
TIPPING FEE. This is the amount that the county
charges customers for dumping trash at county
landfills. This year, the tipping fee increases from
$23.00 per ton to $28.00 per ton (a 20%+ increase)
effective September 1, 1992. This increase will add
about $0.62 per month for a single family which is
about 6.14% of the total increase being requested.
FRANCHISE FEE. Although originally scheduled to
increase from 2% to 5% last year, that increase was
deferred to July 1, 1992. The AB 939 program
(California Integrated Waste Management Act) will
require funding in FY 93. This would be an
appropriate source to meet the additional costs. The
increase will add a 3.6% increase or about $0.58/month
for single-family with commensurate increase for multi-
family and commercial. (The increase from 2% of gross
to 5% of gross is larger than 3% because we will be
dealing with a higher gross in FY 93.)
RECYCLABLES MARKET. For the FY 92, we required the
contractor to use the proceeds of sale of recyclables
to offset the cost of the program, with the amount
subject to adjustment based upon both the tonnage
recycled and the price for recyclables. We projected
that 712.5 tons would be collected and sold (based
upon the results of the pilot program) and that it
would bring an average of $58.75 per ton for an offset-
ting income of $41,858. This was the figure used to
reduce the cost of the curbside recycling program.
-3-
Actually, 782.65 tons have been recycled, but the
average sales value has been only $38.39/ton,
resulting in the offset income being only $30,045 vice
the $41,858 planned, a net loss of $10,893.
This represents a 0.4% increase or about $0.04 per
month for single-family with a commensurate increase
for multifamily and commercial.
The FY 93 picture is even more bleak. The 790 tons
remains the same, but the average value is projected
at $35.00/ton. This will generate about $27,650
income, against the $41,850 projection upon which the
FY 92 rate was based - a loss of offset of $14,200.
This will represent a further 0.4% increase or about
$0.04/month increase for single-family with a
commensurate increase for multifamily and commercial.
The net adjustment is 0.44% for FY 92 and 0.9% for FY
93, a total of 1.38% or $0.14 per single-family. This
price volatility will continue for the next few years.
Some recyclables presently have negative values!
ADDITIONAL SERVICES
Multifamily Recycling. This program will start
on a pilot basis July 1, 1992 as per prior plan-
ning, with full-scale voluntary in February 1993,
and mandatory to start July 1, 1993. The value
of recyclables sold will accrue to the city in
the same manner as the curbside program. This is
unestimated at present due to the unknown success
level of the program and the volatility of the
values. It is anticipated that the avoided
tipping costs will offset the costs of the
program. The pilot will give us a good
indication as to what will happen in the February
full scale.
- Commercial Recycling. This program is on a
virtual one-on-one customer basis, since each
customer has different needs. The present
contract permits rate adjustments by EDCO to take
into account the varying values of recyclables
from varying businesses. The intent here is to
give maximum flexibility where a business' bottom
line was significantly affected. Since the value
of recyclables will affect the rate charged,
funds realized from the sale of commer-
cial/industrial recycled materials will remain
with the contractor.
-4-
- Green Wastes. These are essentially lawn
clippings and landscape trimmings, and are a
significant portion of the waste stream. It is
necessary to ensure that this type material is
diverted from the landfill. The county charges
only $15.50 per ton to dump yard wastes vice the
$23.00 now, and $28.00 for FY 93.
OUTSIDE AUDITING FIRM REPORT. The contract with EDCO
requires a report from an outside auditing firm (to be
(to be selected by the city and paid by contractor).
The highly esteemed firm of Deloitte & Touche was
selected, and their report is attached hereto.
To meet target dates established in the California
Integrated Waste Management Plan (under development),
and to meet the county's requirement, a six-month 500-
home pilot program for yard wastes will be started
October 1, 1992. The wastes will be collected on the
same day as present trash service but will be done in
a separate truck. The net cost of this program
(including the offset for lesser cost for dumping yard
waste) will be $9,652.
The full-scale program, scheduled to start
April 1, 1993, will cause a significant change in EDCO
operations including route and equipment charge, but
with little impact on customer routes. The costs for
this program involve the cost differential for
handling yard wastes versus the normal trash runs
which is about $14,272 per month, including a $4,300
offset due to the lesser cost of dumping the yard
wastes vice normal trash (and including the 5%
franchise fee). This increased cost will be effective
for April, May and June 1993 as stated above.
Cost for the yard waste 6-month pilot and the 3-month
citywide is projected at $9,652 for the pilot and
$42,816 for the citywide, for a FY total of $54,229 -
with Franchise fees.
(If this cost were annualized, a full year of the yard
waste program would cost $180,000.)
IATIONAL CITY RATE SCHEDUL
8-1-92
E H IT "A"
BOX TYPE REFUSE SERVICE
NUMBER COLLECTION YARDS PER CURRENT _PROPOSED
OF BINS FREQUENCY MONTH MONTHLY MONTHLY
RATE _ RATE
1 1 13 62.65 73.00
1 2 26 100.85 117.50
1 3 39 139.00 161.90
1 4 52 177.20 206.40
1 5 65 215.40 250.90
1 6 78 253.50 295.30
1 7 91 313.85 365.60
2 1 26 127.30 148.30
2 2 52 200.95 234.10
2 3 78 276.00 321.50
2 4 104 354.35 412.80
2 5 130 410.65 478.35
2 6 156 467.60 544.70
2 7 182 549.30 639.90
3 1 39 134.25 156.40
3 2 78 294.75 343.35
3 3 117 403.25 469.75
3 4 156 467.95 545.10
3 5 195 604.95 704.70
3 6 234 728.15 848.20
3 7 273 898.35 1,046.50
4 1 52 227.75 265.30
4 2 104 371.10 432.30
4 3 156 514.85 599.75
4 4 208 602.90 702.30
4 5 260 778.40 906.75
4 6 312 876.85 1,021.44
4 7 364 1,154.90 1,345.35
5 1 65 270.60 315.20
5 2 130 448.85 522.85
5 3 195 627.35 730.80
5 4 260 770.40 897.45
5 5 325 925.15 1,077.70
5 6 390 1,116.70 1,300.85
5 7 455 1,369.95 1,595.85
6 1 78 313.15 364.80
6 2 156 526.55 613.40
6 3 234 739.90 861.90
6 4 312 851.45 991.85
6 5 390 1,030.95 1,200.95
6 6 468 1,254.75 1,461.65
6 7 546 1,543.10 1,797.55
NATIONAL CITY RATE SCHEDULE
8-1-92
- EXHIBIT "A"
CURRENT PROPOSED
RUBBISH AND GARBAGE (COMMERCIAL_ MONTHLY MONTHLY
AND INDUSTRIAL ESTABLISHMENTS) RATE RATE
Up to (2) 40 gallon containers
One time per week -per month
Up to (2) 40 gallon containers
Two times per week -per month
Up to (2) 40 gallon containers
Three times per week -per month
Up to (2) 40 gallon containers
Four times per week -per month
Up to (2) 40 gallon containers
Daily (six days/Monday thru
Saturday) 39.15
Additional or unusual accumulation
of rubbish (per cubic yard) 7.10
11.85 13.80
18.85 21.95
24.25 28.25
29.95 34.90
45.60
8.25
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single family
properties.
For the second and for each additional
residential unit in multiple dwellings
which do not exceed four units
2. TRAILER PARRS AND MOTELS (5.00 MINIMUM)
One time per week, per unit, per month
3. APARTMENT HOUSES (NO MINIMUM)
One time per week, per unit, per month
4. SENIOR CITIZEN -RESIDENTIAL
Per month
EXHIBIT "A"
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
10.10 11.75
7.60 8.85
7.15 8.30
7.10 8.25
8.20 9.55
J
667-01 Fderat Boulevard£
OC�`� � lemon GroverCalifornio:.92Q45 (f 191287=7555
July 20, 1992
City of National City
1243 National Ave.
National City, CA 92050
Honorable Mayor and Members of the City Council:
The refuse collection, recycling agreement, between the
City of National City and EDCO Disposal, provides for
certain periodic rate adjustments. Annually the rate
increases on July 1st by the amount of the local Consumer
Price Index, with a 6% maximum cap. The contract also
allows for a pass through of changes in the county tipping
fees.
The County of San Diego decided to initiate a tipping
fee increase of $5.00 per ton effective September 1, 1992,
the normal tipping fee change date was July 1, 1992.
The City of National City had a scheduled an increase
in the franchise fee from 2% to 5% effective July 1, 1992.
This effective date has been changed to August 1, 1992.
The cost of the tipping fee increase and franchise fee
increase have been amortized over the eleven month period
from August 1, 1992 to June 30, 1993.
The County is further mandating several recycling
programs starting at various dates in the future. A
commercial collection program, a multi -family program and
separate yard waste collection. The yard waste collection
must be implemented by March 31, 1993. Current plans call
for us to commence a six month pilot collection of
segregated green waste, from approximately 500 homes, on
October 1, 1992,. to be followed by a green waste program
city wide. We have projected the cost of the pilot yard
waste program, and suggest we spread the expense over the
fiscal year with the amortized rate commencing August 1,
1992.
Enclosed are financial information and projections from
our auditors, Alder, Green and Hasson, and reviewed by your
auditors, Deloitte and Touche. The review results in a
residential rate of $11.77 and 16.49% raise for the
commercial rates.
Please approve the attached rate schedule to be
effective August 1, 1992.
Thank you for your consideration of these proposals.
Also enclosed, are plans and implementation dates for multi-
family and commercial recycling programs. Council and
staff's input is welcome and encouraged.
Sincerely,
EDCO DISPOSAL CORPORATION
dba/National City Rubbish
Edwar Burr
President
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single family
properties.
For the second and for each additional
residential unit in multiple dwellings
which do not exceed four units
2. TRAILER PARRS AND MOTELS (5.00 MINIMUM)
One time per week, per unit, per month
3. APARTMENT HOUSES (NO MINIMUM)
One time per week, per unit, per month
4. SENIOR CITIZEN -RESIDENTIAL
Per month
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
10.10 11.75
7.60 8.85
7.15 8.30
7.10 8.25
8.20 9.55
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE (COMMERCIAL
AND INDUSTRIAL ESTABLISHMENTS)
Up to (2) 40 gallon containers
One time per week -per month
Up to (2) 40 gallon containers
Two times per week -per month
Up to (2) 40 gallon containers
Three times per week -per month
Up to (2) 40 gallon containers
Four times per week -per month
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
11.85 13.80
18.85 21.95
24.25 28.25
29.95 34.90
Up to (2) 40 gallon containers
Daily (six days/Monday thru
Saturday) 39.15
Additional or unusual accumulation
of rubbish (per cubic yard) 7.10
45.60
8.25
NATIONAL CITY RATE SCHEDULE
8-1-92
BOX TYPE REFUSE SERVICE
NUMBER COLLECTION . YARDS PER CURRENT PROPOSED
OF BINS FREQUENCY MONTH MONTHLY MONTHLY
RATE .RATE
1 1 13 62.65 73.00
1 2 26 100.85 117.50
1 3 39 139.00 161.90
1 4 52 177.20 206.40
1 5- 65 215.40 250.90
1 6 78 253.50 295.30
1 7 91 313.85 365.60
2 1 26 127.30 148.30
2 2 52 200.95 234.10
2 3 78 276.00 321.50
2 4 104 354.35 412.80
2 5 130 410.65 478.35
2 6 156 467.60 544.70
2 7 182 549.30 639.90
3 1 39 134.25 156.40
3 2 78 294.75 343.35
3 3 117 403.25 469.75
3 4 156 467.95 545.10
3 5 195 604.95 704.70
3 6 234 728.15 848.20
3 7 273 898.35 1,046.50
4 1 52 227.75 265.30
4 2 104 371.10 432.30
4 3 156 514.85 599.75
4 4 208 602.90 702.30
4 5 260 778.40 906.75
4 6 312 876.85 1,021.44
4 7 364 1,154.90 1,345.35
5 1 65 270.60 315.20
5 2 130 448.85 522.85
5 3 195 627.35 730.80
5 4 260 770.40 897.45
5 5 325 925.15 1,077.70
5 6 390 1,116.70 1,300.85
5 7 455 1,369.95 1,595.85
6
6
6
6
6
6
1
2
3
4
5
6
7
78 313.15 364.80
156 526.55 613.40
234 739.90 861.90
312 851.45 991.85
390 1,030.95 1,200.95
468 1,254.75 1,461.65
546 1,543.10 1,797.55
EDCO DISPOSAL CORPORATION
RATE REVIEW FOR
THE CITY OF NATIONAL CITY
JULY 16, 1992
10920 Wilshire Boulevard
Suite 1200
Los Angeles
California 90024
Telephone: (310) 208-1200
Telecopier: (310) 208-4978
Member:
American Institute of
Certified Public Accountants
California Society of
Certified Public Accountants
Private Companies Practice
Section, AICPA, Division
for CPA Firms
REPORT IN CONNECTION WITH RATE REVIEW
Alder,
Green
& Hasson
Certified Public Accountants
Board of Directors
Edco Disposal Corporation
At your request, we have applied the procedures enumerated below to the information provided related
to the contract with the City of National City. These procedures, which were agreed upon by Edco
Disposal Corporation, were performed solely to assist you in preparing a Rate Review for the City of
National City. This report is intended solely for your information and for those involved in the rate
making process for the City of National City contract; and should not be used for any other purpose.
We performed the following agreed -upon procedures, the results of which are attached:
1. We computed the Consumer Price Index increase required at July 1, 1992.
2. We computed the rate increase required for the tipping fee increase by the County of San
Diego effective September 1, 1992.
3. We assembled the results of the Curbside Recycling program as provided by management and
computed the shortfall relative to the April 29, 1991 Rate Review, and the forecasted shortfall
for the fiscal 1993 contract year.
4. Management provided an analysis of the proposed Green Waste Program for integration in the
rate calculation. We performed no specific procedures to this analysis.
5. We computed the effect on the rate for the increase relative to items 1-4 above to be
recovered over an eleven month period: August 1, 1992 through June 30, 1993.
6. We computed the effect on the rate for the Franchise Fee increase from 2% to 5% effective
August 1, 1992.
Because the above procedures do not constitute an audit conducted in accordance with generally
accepted auditing standards, we do not express an opinion on any of the accounts or items referred
to above. In connection with the procedures referred to above, no matters came to our attention that
caused us to believe that the specified accounts or items should be adjusted. Had we performed
additional procedures or had we conducted an audit of the financial statements in accordance with
generally accepted auditing standards, matters might have come to our attention that would have been
reported to you. This report relates only to the accounts and items specified above and does not
extend to any financial statements of Edco Disposal Corporation taken as a whole.
ALDER, GREEN & HASSON
July 16, 1992
Los Angeles, California
EDCO/NATIONAL CITY
COMPUTATION OF RATE ADJUSTMENT
Under the terms of the Collection of Rubbish and Trash contract between the City of National City and
Edco disposal Corporation, dated September 25, 1990; applications for rate- changes are to be
submitted on an annual basis with the effective dates modified to July 1. Due to the timing of the
tipping fee rate increase from the County of San Diego; our rate modification request is effective
August 1. The corresponding increases, computed on a service year basis ending June 30, 1993 are
therefore adjusted to reflect an eleven month recovery period. In addition to the rate review, the City
has requested cost proposals for certain additional services to be implemented during the year
beginning July 1, 1992.
Analysis of Impact of Rate Increase
on Rates Effective August 1, 1992
for the Service Year July 1, 1992 through June 30, 1993
% of 1992
Forecasted
Revenue Residential Commercial
Current Existing Rate $ 10.10 $ 62.65
Consumer Price Increase -
1991 Year (Note 1) 2.14% 0.22 1.34
Tipping Fee Increase 6.14% 0.62 3.85
Unrecovered Sales Revenue
from Sales of Recyclabies 0.44% 0.04 0.28
Adjustment for Current Sales
Price of Recyclabies 0.94% 0.10 0.59
SUB -TOTAL
Add: Green Waste Program
SUB -TOTAL
Adjust Increase Percentage to
Eleven Month Period
9.66%
1.95%
11.08 68.70
0.20 1.22
11.61%
1.06%
11.28 69.92
0.10 0.67
SUB -TOTAL 12.67% 11.38 70.59
Less: Current 2% Franchise Fee (2.00%) (0.20) (1.25)
Add: 5% Franchise Fee 5.82% 0.59 3.65
Note 1:
TOTAL RATE 16.49% $ 11.77 $ 72.99
The Consumer Price Index for the San Diego County area was 3.1 % in January 1992.
This percentage has been reduced for the proportion of the existing rate that relates
to tipping fees.
-2-
EDCO/NATIONAL CITY
ANALYSIS OF COMPUTATION OF RATE INCREASE
FOR THE TIPPING FEE INCREASE
Tipping fee rates will increase $5.00 per ton effective September 1, 1992. The total tipping fee cost
projected for the 1993 service year is $1,013,000. The tipping fee cost for the year ended June 30,
1992 was $848,000 at $23 per ton, or an increase of $165,000.
The collection revenue projected for the twelve months ending June 30, 1992 is $2,686,336.
The percentage of increase attributed to tipping fee increase is $165,000/2,686,366 or 6.14%
-3-
EDCO/NATIONAL CITY
ANALYSIS OF CURBSIDE RECYCLABLES
FOR THE YEAR ENDING JUNE 30, 1992 (Projected)
The results of the Curbside Recycling program for the year ending June 30, 1992 (projected)and the
corresponding rate adjustment calculations are as follows:
PER APRIL 25, 1991 RATE REVIEW
Tons to be Recycled Forecast 712.5
Forecasted Revenue from Sales of Recyclables $41,858
Average Sales of Recyclables $58.75 per ton
ACTUAL RESULTS
Tons Recycled 782.65
Average Revenue Rate $38.39 per ton
Resultant Revenue from Sales of Recyclables $30,045
Revenue Shortfall ($41,858 - $30,045) $11,813
Revenue Shortfall as a Percentage of
Total Revenue (% of $2,686,336) 0.44%
FORECAST FOR FISCAL 1993 OPERATING YEAR
Tons to Be Recycled 782.65
Revenue Rate (Average of May and June 1992
Actual Revenue Rates) $21.16
Resultant Revenue from Sales of Recyclables $16,562
1992 Projected Revenue $41,858
Revenue Shortfall $25,296
Revenue Shortfall as a Percentage of
Total Revenue 0.94%
-4-
EDCO/NATIONAL CITY
GREEN WASTE SERVICE
GREEN WASTE SERVICE
Cost of Pilot Program
Cost of Regular Service for Three Months
(3 x $14,272)
$ 9,652.00
42, 816.00
TOTAL COST WITHOUT FRANCHISE FEE 52,468.00
% OF PROJECTED COLLECTION REVENUE
OF $2,686,336 1.95%
TOTAL COST WITH FRANCHISE FEE 55,229.00
% OF $2,686,336 2.06%
COST OF REGULAR SERVICE PER MONTH 14,272.00
TOTAL COST WITH FRANCHISE FEE 15,023.00
AVERAGE COST PER HOME (7,300) (Note 1) $ 2.06
NOTE 1: The cost per home of $2.06 would be the monthly charge for regular green waste service
per home; if residential service were charged 100% for the service. The annual cost of fiscal year
1992-1993 increases or adjustments if allocated between residential and commercial would be
$180,276/$2,686,336 or 0.067% or $0.68 for residential and $4.20 for commercial.
-5-
EDCO/NATIONAL CITY
GREEN WASTE SERVICE
Effective April 1, 1993
The company currently utilizes three routes: one route with a 3-axle truck with a two man crew for
four days and one man for one day and two routes with a 2-axle truck with a one man crew.
The present cost is calculated on a nine hour day at the following hourly rates:
$125 for 3-axle truck with a two man crew
$115 for 3-axle truck with a one man crew
$100 for 2-axle truck with a one man crew
• Plus Tipping Fee
With no change, the route cost would be:
3-axle route - 4 days 158 hours @ $125 $ 19,750
3-axle route - 1 day 40 hours @ $110 4,400
2-axle route - 5 days 396 hours @ $90 35,640
TOTAL COST PER MONTH 59,790
Route cost on green waste service is estimated to utilize three 3-axle trucks for 9.5 hours per day with
two man crews. Cost would be:
627 hours @ $125 per hour or 78,375
DIFFERENCE 18,585
AVOIDED TIPPING FEE
7,300 Homes at 22 Pounds x 4.3 Weeks or 94.6
Pounds per Home per Month for a Total of
690,580 Pounds or.345 Tons x $12.50 ($28.00
less $15.50) Savings Per Ton
(4,313)
NET ADDED COST $ 14,272
-6-
EDCO/NATIONAL CITY
ANALYSIS OF RATE INCREASE
Dumping Increase 6.14%
Consumer Price Index 2.14%
Curbside Recycling 1.38%
Green Waste 1.95%
Recovery of Increase over Eleven Months 1.06%
Franchise Fee Rate Increase from 2% to 5% 3.82%
TOTAL 16.49%
-7-
EDCO/NATIONAL CITY
ANALYSIS OF CURBSIDE RATE INCREASE
Amount Percentage
Cost from Last Year {Before 2% Franchise Fee) $ 137,732
Revenue Shortfall 1991/1992 11,813 8.6%
Revenue Adjustment 1992/1993 25,296 18.4%
Consumer Price Index Effect 4,270 3.1 %
TOTAL COST 1992/1993 $ 179,111
TOTAL COST 1991/1992 $ 137,732
TOTAL $ 41,379 30.1%
-8-
•
Deloitte &
Touche
Suite 1900 Telephone: (619) 232-6500
701 "B" Street ITT Telex: 4995722
San Diego, California 92101-8198 Facsimile: (619) 237-1755
July 17, 1992
Mr. C. R. Williams, Jr.
Public Works Department
City of National City
2100 Hoover Avenue
National City, California 91950-6599
Dear Mr. Williams:
We have applied certain agreed -upon procedures, as discussed below, to accounting records
and other items as related to EDCO Disposal Corporation ("EDCO"), as requested by you to
assist you in evaluating your contractual relationship with EDCO. It is understood that this
report is solely for your information and is not to be referred to or distributed for any purpose
to anyone who is not a party to the contractual relationship with EDCO, the City's refuse
collection contractor, or the City of National City (the "City").
The procedures we performed, which relate to your proposed fiscal 1993 refuse rate
adjustment, are summarized as follows:
1. We read EDCO's compiled financial statements for the nine months ended February 29,
1992, and its audited financial statements for the year ended May 31, 1991. We inquired
of Alder, Green & Hasson (independent certified public accountants for EDCO) and Ed
Burr (President of EDCO) as to any changes in accounting principles or policies and
methods of application which might affect the fiscal year 1993 refuse rate adjustment for
the City.
During the performance of this procedure, we noted that certain allegations have been
made against EDCO by third parties in connection with customer overcharges. We
understand that these items were discussed with you by EDCO. No additional procedures
have been performed by us in relation to these allegations.
2. We obtained and reviewed information which supports the Consumer Price Index
adjustment as calculated by EDCO.
3. We reviewed EDCO's calculation of franchise fees due to the City for the period from
July 1, 1991 to April 30, 1992, to ascertain that they were calculated based on revenues
as reported in EDCO's underlying financial records and that were in accordance with
contractual requirements.
Member
r%
Uri International
4. We reviewed franchise fee remittances made to the City by EDCO for the period from
July 1, 1991 to April 30, 1992 to ascertain that they were made on a timely basis.
5. We reviewed San Diego County landfill fee increases projected during the fiscal year
1992 rate review process. We agreed actual tipping charges and tons of waste to
supporting documentation for 5 judgmentally selected days from the period from July 1,
1991 to June 30, 1992.
6. We reviewed the reasonableness of projected fiscal year 1993 San Diego County landfill
fee increases on the fiscal year 1993 rate adjustment calculation.
7. We reviewed the calculation of under- or over -recorded revenues from the sale of
recyclables for the period from July 1, 1991 through June 30, 1992.
8. We agreed total tons of recyclable materials sold to underlying accounting records and
related work tickets for 2 judgmentally selected months.
9. We discussed the current price of recyclables, used for calculating the projected fiscal
year 1993 rates, with Coy Smith of San Diego Recycling. It should be noted that
supporting documentation was not available to enable us to agree current prices of
recyclables to outside invoices.
10. We compared the calculation of green waste service pilot program to another similar pilot
program currently under consideration by another municipality serviced by EDCO.
11. We reviewed the calculation of the franchise fee and the effect of its increase to 5 % on
the fiscal year 1993 refuse rate adjustment calculation.
12. The City's annual rate adjustment is primarily based on changes in the Consumer Price
Index. Accordingly, no fee per subscriber calculation was performed as the rate
adjustment is not based on any given number of customers.
13. We performed a review of insurance in force to ascertain that coverage levels are in
compliance with contractual requirements.
In connection with the procedures referred to above, no matters came to our attention that
caused us to believe that the specified accounts or the fmal calculation of items noted above, as
they relate to the Alder, Green & Hasson rate review for the City dated July 16, 1992, should
be adjusted.
Because the above procedures do not constitute an audit made in accordance with generally
accepted auditing standards, we do not express an opinion on any of the accounts or items
referred to above. Had we performed additional procedures or had we made an audit of
financial statements in accordance with generally accepted auditing standards, matters might
have come to our attention that would have been reported to you. This report related only to
the accounts and items specified above and does not extend to any financial statements of
EDCO, taken as a whole.
Ve
ry truly yours,
•
CITY OF NATIONAL CITY
INTERDEPARTMENTAL MEMORANDUM
Date: 7-29-92
To: CITY CLERK
From: PUBLIC WORKS DIRECTOR
Subject: Revised Trash Rate
Attached is the revised trash rate approved by Council 7/28/92.
It is revised Exhibit "A" to Resolution 92-145.
CRW.:abc
Attachments
SN 11000 5M 5184
C. R\ WILLIAMS,.JR.
Public Works Director
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single family
properties.
For the second and for each additional
residential unit in multiple dwellings
which do not exceed four units
2. TRAILER PARRS AND MOTELS (5.00 MINIMUM)
One time per week, per unit, per month
3. APARTMENT HOUSES (NO MINIMUM)
One time per week, per unit, per month
4. SENIOR CITIZEN -RESIDENTIAL
Per month
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
10.10 11.10
7.60 8.55
7.15 8.05
7.10 8.00
8.20 9.25
EXHIBIT "A"
NATIONAL CITY RATE SCHEDULE
8-1-92
CURRENT PROPOSED
RUBBISH AND GARBAGE (COMMERCIAL MONTHLY MONTHLY
AND INDUSTRIAL ESTABLISHMENTS) RATE RATE
Up to (2) 40 gallon containers
One time per week -per month
Up to (2) 40 gallon containers
Two times per week -per month
Up to (2) 40 gallon containers
Three times per week -per month
Up to (2) 40 gallon containers
Four times per week -per month
Up to (2) 40 gallon containers
Daily (six days/Monday thru
Saturday) 39.15
Additional or unusual accumulation
of rubbish (per cubic yard) 7.10
11.85
18.85
24.25
29.95
13.35
21.25
27.30
33.75
44.10
8.00
• M •
•
,TIONAL CITY RATE SCHEDUL1.
8-1-92
BOX TYPE REFUSE SERVICE
NUMBER COLLECTION YARDS PER CURRENT PROPOSED
OF BINS FREQUENCY MONTH MONTHLY MONTHLY
RATE . RATE
1 1 13 62.65 70.60
1 2 26 100.85 113.65
1 3 39 139.00 156.60
1 4 52 177.20 199.65
1 5 65 215.40 242.70
1 6 78 253.50 285.60
1 7 91 313.85 353.60
2 1 26 127.30 143.45
2 2 52 200.95 226.40
2 3 78 276.00 310.95
2 4 104 354.35 399.25
2 5 130 410.65 462.70
2 6 156 467.60 526.85
2 7 182 549.30 618.90
3 1 39 134.25 151.25
3 2 78 294.75 332.10
3 3 117 403.25 454.35
3 4 156 467.95 527.25
3 5 195 604.95 681.60
3 6 234 728.15 820.40
3 7 273 898.35 1,012.15
4 1 52 227.75 256.60
4 2 104 371.10 418.10
4 3 156 514.85 580.10
4 4 208 602.90 679.30
4 5 260 778.40 877.00
4 6 312 876.85 987.95
4 7 364 1,154.90 1,301.25
5 1 65 270.60 304.90
5 2 130 448.85 505.70
5 3 195 627.35 706.85
5 4 260 770.40 868.00
5 5 325 925.15 1,042.35
5 6 390 1,116.70 1,258.20
5 7 455 1,369.95 1,543.50
6
6
6
6
6
6
6
1
2
3
4
5
6
7
78 313.15 352.85
156 526.55 593.25
234 739.90 833.65
312 851.45 959.35
390 1,030.95 1,161.55
468 1,254.75 1,413.75
546 1,543.10 1,738.60
RESOLUTION NO. 92-145
RESOLUTION OF THE CITY COUNCIL QF THE CITY
OF NATIONAL CITY APPROVING THE ESTABLISHMENT OF A
MULTIFAMILY RECYCLING PROGRAM, A COMMERCIAL/INDUSTRIAL
RECYCLING PROGRAM, A YARD WASTE PROGRAM, AND
APPROVING A TRASH SERVICE RATE INCREASE
FOR EDCO DISPOSAL CORPORATION
follows:
The City Council of the City of Naitonal City does hereby resolve as
WHEREAS, the last trash service rate increase for EDCO, the City's
franchised trash hauler was in May 1991; and
WHEREAS, the County of San Diego is expected to raise its rate for waste
disposal effective October 1, 1992, and the City Council has approved that this type
increase be treated as a pass -through cost to trash subscribers; and
WHEREAS, additional services are being requested of EDCO, to wit,
multifamily recycling, commercial/industrial recycling and yard waste diversion as
provided for in Ordinance No. 92-2029, adopted on April 28, 1992; and
WHEREAS, the new trash service rates will be comparable to those of
surrounding cities.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of National City that the proposed rate schedule, a copy of which is attached hereto as
Exhibit "A," is hereby approved, effective July 1, 1992.
PASSED and ADOPTED this 28th day of July, 1992.
ATTEST:
Lori Anne Peoples
City Clerk
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney
lot l.(/
George H.'Waters, Mayor
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single family
properties.
For the second and for each additional
residential unit in multiple dwellings
which do not exceed four units
2. TRAILER PARKS AND MOTELS (5.00 MINIMUM)
One time per week, per unit, per month
3. APARTMENT HOUSES (NO MINIMUM)
One time per week, per unit, per month
4. SENIOR CITIZEN -RESIDENTIAL
Per month
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
10.10 11.10
7.60 8.55
7.15 8.05
7.10 8.00
8.20 9.25
EXHIBIT "A"
NATIONAL CITY RATE SCHEDULE
8-1-92
RUBBISH AND GARBAGE (COMMERCIAL
AND INDUSTRIAL ESTABLISHMENTS)
Up to (2) 40 gallon containers
One time per week -per month
Up to (2) 40 gallon containers
Two times per week -per month
Up to (2) 40 gallon containers
Three times per week -per month
Up to (2) 40 gallon containers
Four times per week -per month
Up to (2) 40 gallon containers
Daily (six days/Monday thru
Saturday) 39.15
Additional or unusual accumulation
of rubbish (per cubic yard) 7.10
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
11.85
18.85
24.25
29.95
13.35
21.25
27.30
33.75
44.10
8.00
•
♦•
NATIONAL CITY RATE SCHEDULE
8-1-92
BOX TYPE REFUSE SERVICE
NUMBER COLLECTION YARDS PER CURRENT PROPOSED
OF BINS FREQUENCY MONTH MONTHLY MONTHLY
RATE RATE
1 1 13 62.65 70.60
1 2 26 100.85 113.65
1 3 39 139.00 156.60
1 4 52 177.20 199.65
1 5 65 215.40 242.70
1 6 78 253.50 285.60
1 7 91 313.85 353.60
2 1 26 127.30 143.45
2 2 52 200.95 226.40
2 3 78 276.00 310.95
2 4 104 354.35 399.25
2 5 130 410.65 462.70
2 6 156 467.60 526.85
2 7 182 549.30 618.90
3 1 39 134.25 151.25
3 2 78 294.75 332.10
3 3 117 403.25 454.35
3 4 156 467.95 527.25
3 5 195 604.95 681.60
3 6 234 728.15 820.40
3 7 273 898.35 1,012.15
4 1 52 227.75 256.60
4 2 104 371.10 418.10
4 3 156 514.85 580.10
4 4 208 602.90 679.30
4 5 260 778.40 877.00
4 6 312 876.85 987.95
4 7 364 1,154.90 1,301.25
5 1 65 270.60 304.90
5 2 130 448.85 505.70
5 3 195 627.35 706.85
5 4 260 770.40 868.00
5 5 325 925.15 1,042.35
5 6 390 1,116.70 1,258.20
5 7 455 1,369.95 1,543.50
6
6
6
6
6
6
6
1
2
3
4
5
6
7
78 313.15 352.85
156 526.55 593.25
234 739.90 833.65
312 851.45 959.35
390 1,030.95 1,161.55
468 1,254.75 1,413.75
546 1,543.10 1,738.60
Passed and adopted by the Council of the City of National City, California,
on J u 1 y 28, 1992 by the following vote, to -wit:
Ayes: Councilmen
Nays: Councilmen
Absent: Councilmen
Abstain: Councilmen
AUTHENTICATED BY:
Dalla, Inzunza, Van Deventer, Zarate, Waters
None
None
None
GEORGE H. WATERS
By:
Mayor of the City of National City, California
lo
Cit Clerk of the City of NationallCC y, California
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and cor-
rect copy of RESOLUTION NO.....9.2.-. 4 `z.. of the City of National City,
Calif., passed and adopted by the Council of said City on ... J.lt]...y...2.8....19 9 2
(Seal)
By:
City Clerk of the City of National City, California
Deputy