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					San Juan County Solid Waste:

          Funding
            Solid Waste Funding

   Current Solid Waste Revenue
       Rate Structure used to collect revenue
   Cost of Service
   Current Funding Problems
   Solutions
      Current Revenue Sources
   Primary Source of Revenue is Garbage
    Tipping Fee (86.6%)
   Excise Tax is used to Support Capital
    Expenses (9.8%)
   Grants (HHW, Litter, Composting)(1.7%)
   Recycling Revenue (2%)
   Miscellaneous Fee Revenue (HHW,
    unsecured loads)
                          Service Rate
                  By Customer Class April 2008

   Self Haul
       $7.50 per can
       $278 per ton
            10% to Capital Fund (Disposal District)
            3.4% to State Refuse Tax
   Town of Friday Harbor
       $187 per ton (largest SJI customer)
            None to Capital (except portion of fund shift)
   San Juan Sanitation
       $187 per ton (effective rate)
            $157.40 Tipping fee
            + 10% of Gross Revenue to Capital Fund
                          Service Rate
                                  continued

   Recycling Customers
       Drop off at transfer stations NO FEE
       Post Office junk mail NO FEE
   Other Customers
       HHW Collection
            Annual collection events MINIMUM FEE
            Facilities for Used Oil, Anti-freeze, vehicle batteries NO FEE
       Litter Control
            Roadside, beaches, volunteer coordination NO FEE
       Other Subsidized Activities
            Composting workshops, e-waste events, weed control, lions club
             reuse NO FEE
Rate History
                                                        DOLLARS




                                                        -
                                                             100,000
                                                                       200,000
                                                                                 300,000
                                                                                           400,000
                                                                                                     500,000




       (400,000)
                   (300,000)
                               (200,000)
                                           (100,000)
                                              Jan-96
                                              Apr-96
                                              Jul-96
                                              Oct-96
                                              Jan-97
                                              Apr-97
                                              Jul-97
                                              Oct-97
                                              Jan-98
                                              Apr-98
                                              Jul-98
                                              Oct-98
                                              Jan-99
                                              Apr-99
                                              Jul-99
                                              Oct-99
                                              Jan-00
                                              Apr-00
                                              Jul-00
                                              Oct-00
                                              Jan-01
                                              Apr-01
                                              Jul-01
                                              Oct-01
                                              Jan-02




DATE
                                              Apr-02
                                              Jul-02
                                              Oct-02
                                              Jan-03
                                              Apr-03
                                              Jul-03
                                              Oct-03
                                              Jan-04
                                              Apr-04
                                              Jul-04
                                              Oct-04
                                              Jan-05
                                              Apr-05
                                                                                                               SAN JUAN COUNTY SOLID WASTE FUND BALANCE




                                              Jul-05
                                              Oct-05
                                              Jan-06
                                              Apr-06
                                              Jul-06
                                              Oct-06
                                              Jan-07
                                              Apr-07
                                               Jul-07
                                               Oct-07
        Factors that Control Rates
   Cost of Infrastructure
       Land, Buildings, Equipment
       Debt on Capital
       Maintenance of Infrastructure

   Cost of Operations
       Collection
       Processing
       Disposal
       Overhead
           Factors that Control Costs
   Policy
   Level of Service
   Efficiency of Operation
   Geography
   Variable Costs
       Labor
       Ferry Service
       Disposal, Transportation and Processing Contracts
Cost of Service
                Cost Allocation

   How to calculate the appropriate share of
    costs
       Based on Tonnage?
       Based on Time?
       Based on number of Trips?
     Rate Development Concepts
   Revenue Requirements – compares revenue to
    expenses to determine overall rate.
   Cost of Service - determines revenue
    requirements for customer classes based on
    level of service.
   Rate Structure – method used to allocate the
    cost of service to various customer classes,
    based on the governing bodies policies, that
    balances revenue and expenses.
           Revenue Problems

   No Revenue for new capital facilities
   No Revenue for equipment replacement
   No Operating Reserve
   Increases in recycling can drive up cost
    without providing increased revenue.
    Recommended Full Cost Accounting
       Changes From 2005 Analysis

   Fund Capital and depreciation costs at
    approximately $167,000 per year (further
    definition of need)

   Establish a Reserve equal to a minimum of
    two months operations plus one year of
    capital i.e. $620,000
    Potential Rate Structure Changes
              (2005 recommendations)

   Increased Minimum Fee For Self Haul
    ($9.58 or $11.67)
   Initiate an Administration Fee ($7.04)
   Charge an excise tax per developed parcel
    to support Recycling, Reserves and Capital
   Charge A Tipping Fee For Recycling
            Rate Structure Issues
   Recycling Subsidy
       Garbage classes pay for most recycling costs
   Self Haul Services
       Transfer cost are higher for self haul due to
        low volume per trip
   Discount Rates for Large Customers
   Which Class Will pay for Capital and
    Reserve
            Recycling Subsidy

   Reduces impediments
   Encourages separation from garbage
   People that choose not to recycle still pay
    for the public benefit of the system.
                Self Haul Services
   Issues
       Small volume of waste
       Relatively high service time on site
       Less manageable regarding timing

   Cost of Service Analysis (2005)
       $6.16 per can based on weight
       $9.58 per can based on service time @ facility
       $11.67 per can if administration is based on number
        of trips to the transfer station
Discounted Rates For Large Volume
            Customers
   Town and Franchise pay less
       Do not pay for the recycling portion of the
        program
       Cost less to provide transfer service due to
        large loads
       Town does not contribute directly to the
        capital fund (operations does support capital)
Options for Rate Structure Change

   Tipping Fees
       Users Pay by Weight or Volume
       Administrative Fee
   Taxes
       General Property Tax
       New Parcel Tax
       Increase Existing Excise Tax
       Could apply to all residents of Disposal District or only
        to users of the system
              Base Rate Concept

   Many public utilities have a two tiered rate
    structure:
       Base Rate – All customers pay. Covers fixed
        costs and infrastructure. May cover cost of
        recycling system and other “free” services.
       Volume Rate – Customers pay according to
        how much they use the system. Covers
        operating costs.
             Applying a Base Rate
   Apply to all potential customers
       Parcel Fee
   Apply only to current users
       Excise Tax
       Administration fee
   Apply only for specific services
       Fee for use of recycling services

   Apply to all services
       Annual fee to use facilities
    Costs included in a base rate?

   Debt Service
   Future Capital Facilities and Equipment
   Creating a Reserve Fund
   Landfill Monitoring
   Recycling Program
   Subsidized Services
                  Per Parcel Example
Cost of Service                        Total Cost       All Parcels            Developed Parcels

Garbage Transport & Disposal                 $982,285
Garbage Transfer                             $562,334
Debt                                         $260,057                 $14.66              $26.10
Administration                               $203,926                 $11.49              $20.47
Recycle Transport & Processing               $153,036                  $8.63              $15.36
Recycle Transfer                             $123,905                  $6.98              $12.44
HHW and Litter                               $106,579                  $6.01              $10.70
Landfill Monitoring                           $90,277                  $5.09               $9.06
Engineering and Professional Service          $83,368                  $4.70               $8.37
Taxes                                         $70,890

                                                                      $57.56             $102.50

Capital                                      $167,000                  $9.41              $16.76
Reserve                                       $83,000                  $4.68               $8.33

Total Parcel Fee                                                      $71.65             $127.60
Administrative Fee Example
               Questions to Answer
   Method for funding Capital and Reserve?
       Through Tipping Fee or Base Rate?
       If Base Rate
            Excise, Parcel, Administrative Fee etc.
   Which Services Should a Base Rate Cover?
       Capital, Reserve, Recycling etc.
            Cost of Services
                                    2006         % of    Cost Per
Activity                         Expenditure     Total     Ton

Garbage Transport & Disposal          $982,285    37%      $81.38
Garbage Transfer                      $562,334    21%      $46.59
Debt                                  $260,057    10%      $16.95
Administration                        $203,926     8%      $13.29
Recycle Transport & Processing        $153,036     6%      $46.79
Recycle Transfer                      $123,905     5%      $37.88
HHW and Litter                        $106,579     4%       $6.95
Landfill Monitoring                    $90,277     3%       $5.89
Engineering and Professional           $83,368     3%       $5.43
Taxes                                  $70,890     3%       $4.62

Total                               $2,636,657

Cost per Ton Garbage                                      $181.11
Cost per Ton Recycle                                      $137.80

Average Fee Required                                      $218.43
                   Rate Structure
   What services require a fee
        Garbage Tipping (95% of Revenue)
        Appliances, Household Hazardous Waste
   Who pays the tipping fee (Customer Class)
        Self haul
        Town (partial rate)
        Franchise hauler (partial rate + percent of gross income)
   What is “Free”
        Recycling
        Weed disposal
        Litter Disposal

				
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Description: Rate Presentation Slide