City Council Study Session Agenda and Packet 2017 04 11

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SUBJECT: DATE: SOLID WASTE SERVICES DISCUSSION APRIL 11, 2017 PAGE 5 OF 6 Solid Waste Fund Fees In the last half of 2016 the City implemented a new chart of accounts to budget by Program and Sub -Program and clarify the City's key operational areas. During this process, departments allocated expenses to various Sub Programs based on estimates from best available information at that time. The allocation of expenses in the City Manager's Office, Information Technology, and Parks and Recreation related to solid waste activities in those areas impacted the historical operating balance of the Fund. Updating the 5 Year Financial Plan for the fund to reflect these increased expenses indicates it is necessary to revise fees to generate adequate fund reserves. On March 31, 2017, the Utility Committee discussed the new expenses and updated fees. The Utility Committee and staff recommend an increase of the existing Administrative Fee for the Single Hauler Residential Program and the addition of a new fee for Yard Waste Services. Based on Utility Committee comments, staff proposes increasing the Single Hauler Residential Administrative Fee from $1.55 per month to $2.35 per month. This fee incorporates overhead that is specific to the Single Family Hauler program for contract management, utility billing, and customer service. These costs are distributed across 5,283 accounts. Based on Utility Committee comments, staff also proposes a new Yard Waste Services fee of $0.25 per month, to fund services related to the ongoing tree branch drop off and leaf pick up programs that are performed by Parks and Recreation and Public Works staff. This fee would be applied to all 8,500 Utility Billing Single Family Equivalent (SFE) accounts. Setting this fee in this manner provides for costs being distributed across all residential customers citywide, instead of just those customers who are in the Residential Single Hauler program. This would include HOA and Multifamily. The methodology proposed is the same as the methodology used for billing the Boulder County Hazardous Materials Management Facility Fee. If the new Yard Waste Services Fee is not implemented it will be necessary to increase the Administrative Fee by $2.75 per month to generate adequate reserves. Pros: The Sub -Program budget more accurately allocated costs based on activities related to the services being provided. The new fees would more accurately reflect cost recovery for services related to refuse, recycling, and compost within the Solid Waste Enterprise Fund. Cons: The Sub -Program budget allocated costs makes it necessary to increase the Solid Waste Administrative Fee and implement a new Yard Waste Services Fee to reflect all costs of service. CITY COUNCIL COMMUNICATION 7