5.9. SR 10-13-2003TO:
FROM:
DATE:
SUBJECT:
Item 5.9.
MEMORANDUM
Mayor and City Council
Stephen Rohlf, Building and Environmental Administrator
October 13, 2003
Consider Refuse Service Fees
Due to a past tax rebate and a one time grant Sherbttrne County awarded the city for its
curbside recycling program, the residential refuse service fund has had a surplus. The city
tries to only break-even for this service, so refuse service bills were kept at a lower rate than
the actual cost of the service to bring this balance down.
Staff correctly calculated that the surplus in the fund balance would be eliminated and an
increase in the fee for refuse service would be needed in July of 2003. Last November the
Council approved an increase of $1.00 per stop for all can sizes. However, due to
miscommunication with Elk River Municipal Utilities (who do the billing), the increase has
not yet been added to the refuse service bills.
Good accounting practices dictate that the fund balance should equal one month's worth of
accounts payable, which is calculated to be approximately $80,000 for the estimated 5,800
users of this service by the end of 2004. Because the July 2003 increase was not
implemented, the refuse service fund balance is down to approximately $45,000.
Staff's new recommended fees, listed below, results in an increase in the fund balance of
approximately $38,000 in the next year. The city's contract with its haulers (BFI and Randy's
Sanitation) expires in October of 2004. Staff anticipates the haulers requesting an increase
after this current five year contract expires. It is hoped that the refuse service fund balance
will be at an amount that it should be by the time the hauler contract expires and it may
work out that increase in fees recommended at this time off-sets an expected increase in the
rates the haulers request.
Staff is recommending the following refuse service rate increases be implemented starting
for November's service (note: for comparison, staff has added a column which shows the
rates Randy's Sanitation's charges elsewhere in Sherbume Count3, for private refuse service):
Container Current Proposed Increase
Size Rate Rate Month
Private Refuse Service
32 Gallon $9.60 $10.60 $1.00 N/A
Bi-weekly
Introductory High End
32 Gallon $11.25 $12.75 $1.50 $10.95 $18.00
Weekly
60 Gallon $12.75 $14.25 $1.50 $11.95 $20.00
Weekly
90 Gal]on $14.25 $16.50 $2.25 $13.95 $23.00
Weekly
2-90 Gal]on $24.25 $27.25 $3.00 N/A
Weekly
Attached to this memo is a spreadsheet provided by Lori Johnson, Finance Director, which
shows the amount of subsidy, by container size, the city is currently providing. Staff did not
recommend the amount of the increase in the fees completely proportional to the amount of
subsidy. The 32 gallon bi-weekly service tends to be elderly people on fixed income so a
lower increase is recommended. The current amount of subsidy for the 32 gallon weekly
assumes only 32 gallons of refuse is being placed in these containers each week. It is staff's
experience that this is the most abused container size due to over stuffing, so a larger
increase is recommended. Lastly, the increase to the 90 gallon container is recommended at
a slightly higher rate to economically encourage recycling in the hopes of reducing service to
a 60 gallon container.
Staff will be present at Monday night's meeting to answer any questions on this issue.
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