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HomeMy WebLinkAboutMS MSS Rates 2011CITY OF SAN RAFAEL AGENDA ITEM NO.: 15m MEETING DATE: February 7, 2011 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Management Services Prepared by: Stephanie Lovette Interim City Manager Approval Economic Development Coordinator SUBJECT: CONSIDERATION OF THE MAXIMUM RATES THAT CAN BE COLLECTED BY MARIN SANITARY SERVICE FOR REFUSE AND RECYCLABLE MATERIAL COLLECTION AND DISPOSAL SERVICES, TO BE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. RECOMMENDATION: ACCEPT RATE RECOMMENDATIONS AND ADOPT RESOLUTION ESTABLISHING MAXIMUM RATES COLLECTED BY AND SERVICES PROVIDED BY MARIN SANITARY SERVICE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. BACKGROUND: Each year, the City Council holds a public hearing to set the maximum collection rates that can be collected by Marin Sanitary Service in the City of San Rafael. The "Background" section of this staff report will illustrate the overall context for the rate setting process. In general, the context includes 1) the Franchise Agreement with Marin Sanitary which includes the methodology for rate setting, 2) the environmental initiatives and goals of the City, and 3) Marin Sanitary's services and programs. Franchise Agreement between City of San Rafael and Marin Sanitary Service California cities are allowed to regulate local refuse and recycling services under Article XI of the California Constitution and the CA Public Resources Code and to collect a franchise fee. The City of San Rafael has a franchise agreement with Marin Sanitary Service ("MSS") for refuse collection and recycling services. The revenue -based methodology used to set the annual rates is contained in the Amendment and Restatement Agreement ("Franchise Agreement") approved by the City Council on September 4, 2001. The Franchise Agreement sets forth the services to be provided by MSS, the rate setting methodology and the franchise fee paid to the City of San Rafael. The City and MSS first entered into a written agreement in 1966. The latest Amendment and Restatement Franchise Agreement occurred in 2001. The Franchise Agreement also contains provisions for automatic annual extensions if certain conditions are met. FOR CITY CLERK ONLY File No.: —14.3 - 3�- City Council Meeting: 20/ Disposition: f g-50 `1111DA) a /S/0 y Page 2 As required under the current Franchise Agreement, the City Council holds an annual public hearing to set the maximum collection rates that can be charged by MSS for services outlined in said Agreement. Notice of the public hearing is published twice in the Marin Independent Journal and mailed to all names on file with the City Clerk. Information on the maximum annual rate that MSS can collect is available at the City Clerk's office during the 10 days prior to the public hearing. The proposed rate information is also provided directly to the San Rafael Chamber of Commerce, the Business Improvement District, and other interested parties. The refuse collection rates are based on the contractor's costs of operations for wages and benefits, disposal, fuel, equipment and lease expenses and certain allowable miscellaneous expenses. The Franchise Agreement provides for a detailed review of MSS' operations every three years. In the interim two-year period, annual summary reviews are conducted based on the last detailed analysis. Summary reviews also incorporate the use of indices, analyze key expense components such as disposal costs and make sure revenue requirements are satisfied. The proposed rate levels for 2011 are based on a summary review. The last detailed review occurred in 2010. Several of the surrounding cities and special districts also have contracts with MSS that utilize a similar rate setting methodology. Therefore, San Rafael, Larkspur, Ross, the County of Marin including within the Ross Valley Sanitary District boundaries, and the Las Gallinas Sanitary District ("the Franchising Agencies") have joined together in a Franchisors Group to share information and reduce costs. San Anselmo and Fairfax have participated in meetings of the Franchisors Group and are considering joining the group in the future. The Franchising Agencies met on three occasions over the last few months to review MSS's rate proposals and the work of the consultant conducting the rate review. The results of the rate review are presented in the "Analysis" section of this report. Environmental Initiatives San Rafael is a member of the Marin Hazardous and Solid Waste JPA, which is the group charged with complying with the California Integrated Waste Management Act of 1989. The goal of the Act is to reduce the flow of materials to landfills. The JPA Board is made up of city and town managers and the county administrator. The JPA is staffed by the Marin County Public Works Department. The JPA also has a local task force made up of representatives from industry, the environmental community and Marin's cities, towns and special districts. The City Council recently appointed Elissa Giambastiani to serve as the City's representative to the local task force. The JPA is funded by tipping fees at Redwood Landfill. The JPA funds the Hazardous Waste Facility located at the Marin Resource Recovery Center in San Rafael. The JPA also sponsors bulb and battery recycling programs and medical sharps disposal programs. The JPA has recently released its final Zero Waste Feasibility Study and is in the process of undertaking implementing actions from Phase One of the Study. These actions are being undertaken on a countywide basis. The City's Climate Change Action Plan also included policies to reduce material consumption and increase resource reuse. City staff is in the process of implementing the initial programs in the Climate Change Action Plan. Programs and strategies from both Plans have been discussed at City Council meetings and study sessions and are therefore not included in this report on collection rates. Page 3 MSS has achieved full compliance with the California Air Resources Board requirements to reduce public exposure to diesel smoke and particulates by replacing and retrofitting the equipment fleet, thereby reducing air pollution in San Rafael. Marin Sanitary Services and Programs MSS's services and programs are best described by presenting residential and .commercial services separately. The following provides information on recycling, refuse container sizes, and food waste for each. Residential Customers MSS accepts all numbered plastics, glass, metals and paper from all customers. San Rafael residential customers receive weekly recycling collection services. Single family households are provided a dual sort recycling can. Multi -family buildings can receive dual sort cans or separate recycling containers depending on area available for can storage. MSS offers San Rafael single-family residential customers a variety of can sizes 20 gallon, 32 gallon, 64 gallon, and 96 gallon. The majority of residential customers (71 %) utilize a 32 gallon can. Smaller households, seniors and intense recyclers benefit from the 20 gallon can which costs about 85% of the 32 gallon rate. 478 of San Rafael residential customers (3.92%) have switched to the 20 gallon can. This is an increase from 3.44% of 20 gallon can customers in 2011. The remainder of the residential customers in San Rafael use 64 gallon cans (23.41%), a slight decrease from 25% in 2010 or 96 gallon cans (1.94%), a slight decrease from 2.99% in 2010. The percentages also reflect a total decrease of 37 residential accounts in 2011. MSS codes 1-4 units as residential households so some of the customers with larger cans may be apartments and other multi family residences such as group homes. Currently all multi family units in the City are required to have a minimum 32 gallon service for each unit. MSS is proposing a pilot program to provide for an intensive recycler rate in multi -family buildings of 10 or fewer units. One of the restrictions of the program will be that the building contains only studio or one bedroom units. MSS estimates that 12% of the local waste stream is made up of organic waste including food waste. MSS is proposing to institute a residential food waste collection program in 2011. Southern Marin refuse haulers instituted a residential food waste program in 2010 and MSS conducted a pilot program in the Ross Valley North (County) in 2010. MSS made a presentation on the proposed program at the January 3, 2011 City Council meeting. The program would only be available to customers in single family residences for this first year. Customers would be encouraged to place residential food waste in the green waste cans. Due to the addition of food waste in the green can, the pick up schedule would be increased from bi-weekly to weekly. The mixed yard and food waste collected by MSS would be delivered to Northern Recycling Compost -Zamora Facility for composting. The Zamora facility currently receives and composts the contents of the green cans collected in the Franchise area. The Zamora facility is located in Yolo County and is owned by MSS and three other partners. The facility is fully permitted to compost both food and green waste. The compost is sold to the surrounding agricultural uses. There are no closer permitted and available composting locations for this material (See Exhibit D). The permitted composting allocation at Redwood landfill has some composting but the permit limits the amount of material and the site is at full permit capacity. The tipping fee at the Zamora facility is slightly lower that the cost at Redwood. MSS is not charging customers additional fees for transporting the material to Zamora. Page 4 Edgar & Associates prepared a Greenhouse Gas Emissions Comparison between Redwood Landfill and Zamora in December 2010. MSS estimates the franchise area produces 11,484 tons of green waste per year and will produce 1,044 tons of food waste with the new program. The current Redwood Landfill permit limits the amount of food waste accepted for composting and cannot accept an additional 1,044 tons of food waste. Therefore, the study assessed the impact of introducing an additional 1,044 tons of food waste into the Redwood landfill. The study found a net greenhouse gas benefit from composting food waste at Zamora due to avoided emissions, even when considering the fuel emissions expended on the round trip from San Rafael to Zamora. Commercial Customers Commercial customers receive separate recycling containers. MSS also provides free cardboard pickup. The frequency of the cardboard pickup schedule is tailored to meet the needs of the individual customer. MSS has introduced an enhanced commercial recycling program to increase the commercial diversion rate. The program includes a staff member dedicated to working with businesses and annual waste audits to help identify additional diversion opportunities. Increased recycling can also assist in reducing refuse bills by diverting more into recycling containers and reducing the size of the regular refuse container. MSS also offers commercial customers a variety of container options ranging from 32, 64 and 96 gallon cans to yard bins. The yard bin options are 2, 4, 5, 18, 20, and 25 yards. The bins can be picked up from one to six times per week. Staff and MSS anticipate instituting a commercial food waste to energy program in 2012 in conjunction with the Central Marin Sanitation Agency (CMSA). This proposed program is a result of a Methane Capture study that evaluated the feasibility of adding processed food waste into the CMSA digesters to produce power for the plant. The study was funded by a grant from PG&E, which was matched by CMSA funding. The City of San Rafael also provided a small amount of funding. The study showed that the project was technically feasible, had a reasonable capital cost payback period (5-7 years), and provided tangible benefits to CMSA and MSS and their customers, the local landfill, and the environment. The significant benefits identified included: a reduction of food waste being disposed at the local landfill thus reducing the generation and release of greenhouse gases; utilization of CMSA existing infrastructure's unused treatment capacity; increase in CMSA's energy self-sufficiency with the extra power production; and a cost savings to CMSA and its customers due to CMSA purchasing less natural gas and electricity. The study results were presented to the CMSA Board, the County of Marin, the San Rafael City Council, and the five other cities and towns in the CMSA service area. Overall, the project has received unanimous support from the elected representatives, with the six cities/towns passing resolution of support for continued exploration. The Marin Hazardous and Solid Waste JPA Zero Waste Report and the City's Climate Change Action Plan also included initiatives to convert organic waste to energy. Commercial food recycling is being evaluated by many Bay Area cities. However, San Francisco is the only City that has fully instituted a commercial food waste program. East Bay MUD is the leader in the food waste to energy arena. EBMUD has been accepting food waste from commercial producers and using it to power the sanitation plant for a number of years. Page 5 ANALYSIS: While the "Background" section set the general context of the rate setting process, this section will specifically examine this year's rate recommendations. Over the past ten years, the approved annual increase in Marin Sanitary rates have ranged from less than one percent to over 8%. The Franchising Agencies have utilized the services of HF&H Consultants, LLC, (HFH) for several years to review the MSS rate proposal. MSS reimburses the City for the consultant's fees for the rate review. Additional consultant services, requested by the local jurisdictions, are paid by the Franchisors' Group. The MSS submitted a rate proposal for 2011 with a proposed 9.55% increase over 2010 rates. HFH evaluated the MSS rate proposal and recommended several adjustments resulting in an overall 6.50% increase for the Franchising Agencies. MSS is also proposing a new program to collect residential food waste. This program, discussed below, results in an additional 4.39% rate increase. The total proposed increase is 10.89%. The full rate review and proposed adjustments are contained in the HFH Report ("Exhibit B"). The table below contains a summary of the rate increase components. Current Operations Benefits 0.71% Fuel 0.79% Disposal 3.05% Other Operating Costs 0.16 Revenue shortfall from 2010 2.11% Franchise Fees and projected 2011 Revenue Shortfall 6.50% Residential food waste 4.39% Total 10.89% MSS does not anticipate an increase in disposal tonnage. The increase in disposal expense shown above is due to an increase of disposal fees at Redwood Landfill in 2010, which occurred after the 2010 rate review. This adjustment is consistent with previous years' methodology. The revenue shortfall, shown above, is due to a reduction in the number of commercial accounts and customers moving to smaller can sizes. The rate review utilizes the actual number of customers and service levels as of September to establish the rates for the following year. MSS assumes both the positive and negative fluctuations in the revenue projections. MSS is not compensated for losses due to decreases in the number of accounts or service levels after the September date. Conversely, increased revenues due to reduced operating costs are held by MSS until the next rate adjustment. In recent years, revenues have been less than projected and MSS has not achieved the profit projected in the rate review. Also shown above is the recommended increase for the proposed residential food waste program. This program is part of a larger strategy to move towards zero waste. MSS's current diversion rate is about 75%. The City's construction recycling requirements and MSS carpet recycling program are expected to boost the rate to about 78%. Enhanced commercial recycling, introduced, in 2010, would increase the rate to about 84%. The proposed residential food waste program would increase it to about 87% (and more over time as the program is fully established). The future proposed commercial food waste program with the CMSA could raise the overall rate to 90% or beyond. Page 6 The City's consultant estimates that an 85% diversion rate by 2020 will result in an emissions decrease of 22,500 metric tons of CO2. Reaching an 85% diversion rate by 2015 would result in an additional emissions reduction of 11,200 metric tons. With the above recommendation, the cost of a 32 gallon can would be increased less than three dollars per month, from $24.95 to $27.67. The cost of commercial service for a 96 gallon can picked up twice a week would be increased from $148.83 to $165.03. Businesses with a vigorous recycling program could reduce their regular can size or pickup schedule resulting in lower rates. As part of conducting the rate application review, the franchising agencies asked HFH to conduct a survey of Bay Area refuse haulers. The actual survey results from our neighboring communities are presented on Attachment 4 of the HFH Report. It summarizes the survey data for residential 30-35 gallon can weekly service with weekly curbside recycling and bi-weekly green waste pickup. Attachment 4 shows that the 2011 proposed MSS rates of $27.67 in San Rafael is slightly higher than the Marin County average of $26.95. There are proposed rate increases in San Anselmo and Fairfax, which, if approved, would increase the Marin County average by about $2.00. The San Rafael rates have traditionally been in line with rates in other Bay Area jurisdictions. Attachment 4 of the HFH Report also identifies the City's three -yard commercial bin, (once a week) service to those of all Bay Area cities and agencies with similar services. San Rafael is lower than the average of other Bay Area jurisdictions with similar services. As in previous years, staff is recommending that the 10.89% increase be applied across the board to all residential, multi family and commercial service accounts. Actual rates for all customers are provided as "Exhibit "C" to this report and to the MSS Amended Agreement. The above recommended rate increase has already been presented to the governing boards of others in our Franchising Group. The Las Gallinas Sanitary District discussed the rates on January 6th and will hold their public hearing on February 10th. The Town of Ross discussed the rates on January 13th and continued the item to the next Town Council meeting on February 10tH The Town of Fairfax discussed the rates on January 12th and has scheduled the public hearing for March 2"d. Larkspur has scheduled their public hearing for February 16tH. San Anselmo and the County of Marin's public hearings are expected to take place this month. FISCAL IMPACT: Exhibit C contains the complete rate request. As shown in Exhibit C, the 10.89% overall increase is applied to all customer types and service options. If approved, these rates are projected to satisfy the City's contractual obligations to meet the MSS revenue requirement to cover San Rafael refuse and recycling service costs, including franchise fees. OPTIONS: The City Council may choose to: 1. Accept the staff recommendation to institute the maximum MSS rate increases and allocations recommended in the HFH Report pursuant to the rate setting methodology set forth in the current Franchise Agreement and shown in Exhibit C retroactive to January 1, 2011. 2. Not accept the findings of the HFH Report and the staff recommendation and establish different maximum rates. The rates ultimately adopted must meet the requirements of the Franchise Agreement. Page 7 ACTION REQUIRED: Staff recommends the Council accept the report and adopt the Resolution as presented. ATTACHMENTS Exhibit A: City Council Resolution Exhibit B: HFH Consultants, LLC, Review of MSS 2011 Rate Application Exhibit C: 2011 Rate Schedule Exhibit D: Composting Facilities serving the Bay Area Exhibit E: Affidavit of Publication RESOLUTION NO. 13104 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ESTABLISHING MAXIMUM RATES COLLECTED BY MARIN SANITARY SERVICE FOR REFUSE AND RECYCLABLE MATERIAL COLLECTION AND DISPOSAL SERVICES, TO BE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. WHEREAS, the City of San Rafael and Marin Sanitary Service have entered into a written Amendment and Restatement Agreement dated September 4, 2001; and WHEREAS, Section 3(B) of the Amendment and Restatement Agreement provides for maximum rates allowed to be collected by Marin Sanitary Service to be amended from time to time by the City Council; and; WHEREAS, Exhibit "C" of the Amendment and Restatement Agreement provides for approved rate setting tables, as amended, to be included as part of this Agreement; and; WHEREAS, Marin Sanitary Service has submitted a rate application request using the methodology outlined under Section 3(A) of the Amendment and Restatement Agreement; and WHEREAS, the City of San Rafael has conducted a review of said rate application and produced a report recommending some rate and fee adjustments, and 1 RESOLUTION NO. 13104 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ESTABLISHING MAXIMUM RATES COLLECTED BY MARIN SANITARY SERVICE FOR REFUSE AND RECYCLABLE MATERIAL COLLECTION AND DISPOSAL SERVICES, TO BE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. WHEREAS, the City of San Rafael and Marin Sanitary Service have entered into a written Amendment and Restatement Agreement dated September 4, 2001; and WHEREAS, Section 3(B) of the Amendment and Restatement Agreement provides for maximum rates allowed to be collected by Marin Sanitary Service to be amended from time to time by the City Council; and; WHEREAS, Exhibit "C" of the Amendment and Restatement Agreement provides for approved rate setting tables, as amended, to be included as part of this Agreement; and; WHEREAS, Marin Sanitary Service has submitted a rate application request using the methodology outlined under Section 3(A) of the Amendment and Restatement Agreement; and WHEREAS, the City of San Rafael has conducted a review of said rate application and produced a report recommending some rate and fee adjustments, and WHEREAS, the City of San Rafael has determined that such rate and fee adjustments are proper, in the best interest of all citizens, and will promote public health, safety and welfare. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES RESOLVE, DETERMINE AND ORDER AS FOLLOWS: The following schedule of maximum rates and fees, attached hereto as "Exhibit C' are hereby approved to be collected by Marin Sanitary Service for refuse and recyclable material collection and disposal services, to be effective, retroactive to January 1, 2011. Said "Exhibit C" shall be incorporated as the revised "Exhibit C' and shall be included as part of the Amendment and Restated Agreement dated September 4, 2001. I, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Tuesday, the 7th of February, 2011, by the following vote, to wit; AYES: Councilmembers: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: Councilmembers: None ABSENT: Councilmembers: None �5 G , 4e, ESTHER C. BEIRNE, City Clerk EXHIBIT C MARIN SANITARY SERVICE CITY OF SAN RAFAEL RATE SCHEDULE Rates Effective: 01/01/2011 Rate Increase: 10.89% $ 22.10 $ 19.93 $ 2.17 10.89% 2011 2010 2011 2011 4.34 10.89% Rates are per month unless otherwise specified. Proposed Rate RATE INCREASE % [NCR. Low Income - 64 gallon can - hill 50.18 45.26 Residential 10.87% *Must meet Federal HUD Voucher Standards. Standard Base Rates 1.32 0.14 10.61% Residential customers only 20 gallon can - flat* $ 23.52 $ 21.21 $ 2.31 10.89% 32 gallon can - flat 27.67 24.95 2.72 10.90% 64 gallon can - flat 55.34 $ 17.61 49.90 $ 1.92 5.44 10.90% 10.90% 96 gallon can - flat 83.01 22.43 74.85 2.44 8.16 10.88% 10.90% 20 gallon can - hill* 26.64 24.02 2.62 10.91% 32 gallon can - hill 31.34 28.26 3.08 10.90% 64 gallon can - hill 62.68 56.52 6.16 10.90% 96 gallon can - hill 94.02 84.78 9.24 10.90% *New rate in 2008. For single family residential $ 24.95 $ 2.72 10.90% 64 gallon can - flat customers. Subject to account review by MSS. 49.90 5.44 10.90% 96 gallon can - flat Low Income Rates* Low Income - 32 gallon can - flat $ 22.10 $ 19.93 $ 2.17 10.89% Low Income - 64 gallon can - flat 44.20 39.86 4.34 10.89% Low Income - 32 gallon can - hill 25.09 22.63 2.46 10.87% Low Income - 64 gallon can - hill 50.18 45.26 4.92 10.87% *Must meet Federal HUD Voucher Standards. 1.46 1.32 0.14 10.61% Residential customers only Other Services Compacted 32 gallon $ 55.34 $ 49.90 $ 5.44 10.90% Compacted 64 gallon 110.68 99.80 10.88 10.90% Distance 5-50' 3.60 3.25 0.35 10.77% Distance over 50' (per 50' each can) 7.27 6.56 0.71 10.82% Additonal Yard Waste Cart Rental* 1.46 1.32 0.14 10.61% *One (1) additional company -provided cart per customer Discontinued Rates** Senior rate - flat** (Bi -weekly service) $ 19.53 $ 17.61 $ 1.92 10.90% Senior rate - hill** (Bi -weekly service) 24.87 22.43 2.44 10.88% **Customers with these rates prior to 2005 will keep existing rate type. No new customers wil be added with this rate type. Apartments 32 gallon can - flat $ 27.67 $ 24.95 $ 2.72 10.90% 64 gallon can - flat 55.34 49.90 5.44 10.90% 96 gallon can - flat 83.01 74.85 8.16 10.90% 32 gallon can - hill 31.34 28.26 3.08 10.90% 64 gallon can - hill 62.68 56.52 6.16 10.90% 96 gallon can - hill 94.02 84.78 9.24 10.90% ***Rates are per container, per # of pickups/wk ***Minimum of one can per unit 1/7/2011 1 of 5 San Rafael - Exhibit C Rate Sheet -20 EXHIBIT C EXHIBIT C MARIN SANITARY SERVICE CITY OF SAN RAFAEL RATE SCHEDULE Rates Effective: 01/01/2011 Rate Increase: 10.89% 2011 2010 2011 2011 Rates are per month unless otherwise specified. Proposed Rate RATE INCREASE % INCR. Apartments (cont.) FL 2 yd bin 1 x/week $ 262.61 $ 236.82 $ 25.79 10.89% FL 2 yd bin 2 x/week 601.93 542.82 59.11 10.89% FL 2 yd bin 3 x/week 911.15 821.67 89.48 10.89% FL 2 yd bin 4 x/week 1,225.83 1,105.45 120.38 10.89% FL 2 yd bin 5 x/week 1,546.04 1,394.21 151.83 10.89% FL 2 yd bin 6 x/week 1,871.71 1,687.90 183.81 10.89% FL 3 yd bin 1 x/week $ 341.81 $ 308.24 $ 33.57 10.89% FL 3 yd bin 2 x/week 626.43 564.91 61.52 10.89% FL 3 yd bin 3 x/week 952.01 858.52 93.49 10.89% FL 3 yd bin 4 x/week 1,285.81 1,159.54 126.27 10.89% FL 3 yd bin 5 x/week 1,627.84 1,467.98 159.86 10.89% FL 3 yd bin 6 x/week 1,978.12 1,783.86 194.26 10.89% FL 4 yd bin 1 x/week $ 487.63 $ 439.74 $ 47.89 10.89% FL 4 yd bin 2 x/week 898.66 810.41 88.25 10.89% FL 4 yd bin 3 x/week 1,364.38 1,230.39 133.99 10.89% FL 4 yd bin 4 x/week 1,841.17 1,660.36 180.81 10.89% FL 4 yd bin 5 x/week 2,286.24 2,061.72 224.52 10.89% FL 4 yd bin 6 x/week 2,827.67 2,549.98 277.69 10.89% FL 5 yd bin 1 x/week $ 527.46 $ 475.66 $ 51.80 10.89% FL 5 yd bin 2 x/week 1,044.05 941.52 102.53 10.89% FL 5 yd bin 3 x/week 1,586.67 1,430.85 155.82 10.89% FL 5 yd bin 4 x/week 2,143.00 1,932.55 210.45 10.89% FL 5 yd bin 5 x/week 2,713.08 2,446.64 266.44 10.89% FL 5 yd bin 6 x/week 3,296.87 2,973.10 323.77 10.89% FL 6 yd bin 1 x/week $ 618.18 $ 557.47 $ 60.71 10.89% FL 6 yd bin 2 x/week 1,252.86 1,129.82 123.04 10.89% FL 6 yd bin 3 x/week 1,903.99 1,717.01 186.98 10.89% FL 6 yd bin 4 x/week 2,571.61 2,319.06 252.55 10.89% FL 6 yd bin 5 x/week 3,255.70 2,935.97 319.73 10.89% FL 6 yd bin 6 x/week 3,956.24 3,567.72 388.52 10.89% RL 1 yd bin 1 x/week $ 172.10 $ 155.20 $ 16.90 10.89% RL 1 yd bin 2 x/week 346.95 312.88 34.07 10.89% RL 1 yd bin 3 x/week 524.57 473.05 51.52 10.89% RL 1 yd bin 4 x/week 704.91 635.68 69.23 10.89% RL 1 yd bin 5 x/week 887.98 800.78 87.20 10.89% RL 1 yd bin 6 x/week 1,073.81 968.36 105.45 10.89% (No longer offered to new customers) 1/7/2011 2 of 5 San Rafael - Exhibit C Rate Sheet -,201 I EXHIBIT C MARIN SANITARY SERVICE CITY OF SAN RAFAEL RATE SCHEDULE Rates Effective: 01/01/2011 $ 66.63 $ 60.09 $ 6.54 10.88% Rate Increase: 10.89% 262.61 236.82 25.79 10.89% 2011 2010 2011 2011 59.25 10.89% Rates are per month unless otherwise specified. Proposed Rate RATE INCREASE % INCR. FL 2 yd bin 4 x/week 1,234.07 1,112.88 Apartments (cont.) 10.89% FL 2 yd bin 5 x/week RL 2 yd bin 1 x/week $ 263.31 1,406.59 $ 237.45 153.18 $ 25.86 10.89% 10.89% RL 2 yd bin 2 x/week 526.79 1,706.46 475.06 185.83 51.73 10.89% 10.89% RL 2 yd bin 3 x/week 798.44 $ 73.77 720.03 $ 8.03 78.41 10.89% 10.89% RL 2 yd bin 4 x/week 1,075.57 308.24 969.94 33.57 105.63 10.89% 10.89% RL 2 yd bin 5 x/week 1,546.04 573.99 1,394.21 62.51 151.83 10.89% 10.89% RL 2 yd bin 6 x/week 1,871.71 874.90 1,687.90 95.28 183.81 10.89% 10.89% FL Compacted Rate Per Yard $ 65.87 per yard $ 59.40 129.06 $ 6.47 10.89% 10.89% Commercial 1,504.61 163.85 10.89% FL 3 yd bin 6 x/week 2,033.02 1,833.37 32 gallon can $ 27.50 10.89% $ 24.80 $ 119.72 $ 2.70 $ 107.96 10.89% 64 gallon can 55.00 10.89% 49.60 487.63 5.40 439.74 10.89% 96 gallon can 82.50 10.89% 74.40 901.41 8.10 812.89 10.89% Compacted 32 gallon 55.00 10.89% 49.60 1,372.62 5.40 1,237.82 10.89% Compacted 64 gallon 110.00 10.89% 99.20 1,857.65 10.80 1,675.22 10.89% Bags (32 gallon) 27.50 10.89% 24.80 2,224.61 2.70 2,006.14 10.89% ""Rates are per container, per # of pckups/wk 10.89% FL 4 yd bin 6 x/week 2,868.87 2,587.13 FL 2 yd bin per pickup $ 66.63 $ 60.09 $ 6.54 10.88% FL 2 yd bin 1 x/week 262.61 236.82 25.79 10.89% FL 2 yd bin 2 x/week 603.31 544.06 59.25 10.89% FL 2 yd bin 3 x/week 915.27 825.39 89.88 10.89% FL 2 yd bin 4 x/week 1,234.07 1,112.88 121.19 10.89% FL 2 yd bin 5 x/week 1,559.77 1,406.59 153.18 10.89% FL 2 yd bin 6 x/week 1,892.29 1,706.46 185.83 10.89% FL 3 yd bin per pickup $ 81.80 $ 73.77 $ 8.03 10.89% FL 3 yd bin 1 x/week 341.81 308.24 33.57 10.89% FL 3 yd bin 2 x/week 636.50 573.99 62.51 10.89% FL 3 yd bin 3 x/week 970.18 874.90 95.28 10.89% FL 3 yd bin 4 x/week 1,314.16 1,185.10 129.06 10.89% FL 3 yd bin 5 x/week 1,668.46 1,504.61 163.85 10.89% FL 3 yd bin 6 x/week 2,033.02 1,833.37 199.65 10.89% FL 4 yd bin per pickup $ 119.72 $ 107.96 $ 11.76 10.89% FL 4 yd bin 1 x/week 487.63 439.74 47.89 10.89% FL 4 yd bin 2 x/week 901.41 812.89 88.52 10.89% FL 4 yd bin 3 x/week 1,372.62 1,237.82 134.80 10.89% FL 4 yd bin 4 x/week 1,857.65 1,675.22 182.43 10.89% FL 4 yd bin 5 x/week 2,224.61 2,006.14 218.47 10.89% FL 4 yd bin 6 x/week 2,868.87 2,587.13 281.74 10.89% FL 5 yd bin per pickup $ 127.63 $ 115.10 $ 12.53 10.89% FL 5 yd bin 1 x/week 527.46 475.66 51.80 10.89% FL 5 yd bin 2 x/week 1,060.82 956.64 104.18 10.89% FL 5 yd bin 3 x/week 1,616.99 1,458.19 158.80 10.89% FL 5 yd bin 4 x/week 2,190.29 1,975.19 215.10 10.89% FL 5 yd bin 5 x/week 2,780.77 2,507.68 273.09 10.89% FL 5 yd bin 6 x/week 3,388.40 3,055.64 332.76 10.89% 1/7/2011 3 of 5 San Rafael - Exhibit C Rate Sheet -201 I EXHIBIT C MARIN SANITARY SERVICE CITY OF SAN RAFAEL RATE SCHEDULE Rates Effective: 01/01/2011 Rate Increase: 10.89% 2011 2010 2011 2011 Rates are per month unless otherwise specified. Proposed Rate RATE INCREASE % INCR. Commercial (cont.) FL 6 yd bin per pickup $ 145.51 $ 131.22 $ 14.29 10.89% FL 6 yd bin 1 x/week 626.20 564.70 61.50 10.89% FL 6 yd bin 2 x/week 1,272.98 1,147.97 125.01 10.89% FL 6 yd bin 3 x/week 1,940.38 1,749.82 190.56 10.89% FL 6 yd bin 4 x/week 2,628.35 2,370.23 258.12 10.89% FL 6 yd bin 5 x/week 3,336.90 3,009.20 327.70 10.89% FL 6 yd bin 6 x/week 4,066.07 3,666.76 399.31 10.89% RL 1 yd bin 1 x/week $ 178.60 $ 161.06 $ 17.54 10.89% RL 1 yd bin 2 x/week 360.61 325.20 35.41 10.89% RL 1 yd bin 3 x/week 546.09 492.46 53.63 10.89% RL 1 yd bin 4 x/week 734.99 662.81 72.18 10.89% RL 1 yd bin 5 x/week 927.31 836.24 91.07 10.89% RL 1 yd bin 6 x/week 1,123.08 1,012.79 110.29 10.89% (No longer offered to new customers) RL 2 yd bin 1 x/week $ 270.49 $ 243.93 $ 26.56 10.89% RL 2 yd bin 2 x/week 547.85 494.05 53.80 10.89% RL 2 yd bin 3 x/week 832.06 750.35 81.71 10.89% RL 2 yd bin 4 x/week 1,123.16 1,012.86 110.30 10.89% RL 2 yd bin 5 x/week 1,559.77 1,406.59 153.18 10.89% RL 2 yd bin 6 x/week 1,892.29 1,706.46 185.83 10.89% FL Compacted Rate Per Yard $ 65.87 per yard $ 59.40 $ 6.47 10.89% RO 10 yd box per pickup 207.30 $ 186.94 $ 20.36 10.89% RO 10 yd box 1 x/week 882.56 795.89 86.67 10.89% RO 10 yd box 2 x/week 1,806.12 1,628.75 177.37 10.89% RO 10 yd box 3 x/week 2,771.82 2,499.61 272.21 10.89% RO 10 yd box 4 x/week 3,778.14 3,407.11 371.03 10.89% RO 10 yd box 5 x/week 4,825.66 4,351.75 473.91 10.89% RO 10 yd box 6 x/week 5,914.34 5,333.52 580.82 10.89% RO 12 yd box per pickup 1 $ 248.77 1 $ 224.34 1 $ 24.43 1 10.89% 1/7/2011 4 of 5 San Rafael - Exhibit C Rate Sheet -20 11 EXHIBIT C MARIN SANITARY SERVICE CITY OF SAN RAFAEL RATE SCHEDULE Rates Effective: 01/01/2011 Rate Increase: 10.89% 2011 2010 2011 2011 Rates are per month unless otherwise specified. Proposed Rate RATE INCREASE % INCR. Commercial (cont.) RO 18 yd box per pickup $ 373.17 $ 336.52 $ 36.65 10.89% RO 18 yd box 1 x/week 1,585.22 1,429.54 155.68 10.89% RO 18 yd box 2 x/week 3,244.59 2,925.95 318.64 10.89% RO 18 yd box 3 x/week 4,978.07 4,489.20 488.87 10.89% RO 18 yd box 4 x/week 6,785.69 6,119.30 666.39 10.89% RO 18 yd box 5 x/week 8,667.45 7,816.26 851.19 10.89% RO 18 yd box 6 x/week 10,623.35 9,580.08 1,043.27 10.89% RO 20 yd box per pickup $ 414.62 $ 373.90 $ 40.72 10.89% RO 20 yd box 1 x/week 1,761.37 1,588.39 172.98 10.89% RO 20 yd box 2 x/week 3,605.10 3,251.06 354.04 10.89% RO 20 yd box 3 x/week 5,531.19 4,988.00 543.19 10.89% RO 20 yd box 4 x/week 7,539.64 6,799.21 740.43 10.89% RO 20 yd box 5 x/week 9,630.50 8,684.73 945.77 10.89% RO 20 yd box 6 x/week 11,803.70 10,644.51 1,159.19 10.89% RO 25 yd box per pickup $ 518.27 $ 467.37 $ 50.90 10.89% RO 25 yd box 1 x/week 2,463.91 2,221.94 241.97 10.89% RO 25 yd box 2 x/week 5,043.12 4,547.86 495.26 10.89% RO 25 yd box 3 x/week 7,434.50 6,704.39 730.11 10.89% RO 25 yd box 4 x/week 10,133.93 9,138.72 995.21 10.89% RO 25 yd box 5 x/week 12,944.23 11,673.04 1,271.19 10.89% RO 25 yd box 6 x/week 15,865.29 14,307.23 1,558.06 10.89% RO Compacted Rate Per Yard $ 65.87 $ 59.40 $ 6.47 10.89% Lock Charges - single pickup $ 4.01 $ 3.62 $ 0.39 10.77% Lock Charges - weekly pickup 18.25 16.46 1.79 10.87% Compacted refuse w/o recyclables 65.87 per yard 59.40 6.47 10.89% Compacted refuse with recyclables 54.27 per yard 48.94 5.33 10.89% Refuse per yard - per pickup 25.45 22.95 2.50 10.89% Box Rental - 1 yard 53.88 48.59 5.29 10.89% Box Rental - 2 yard 60.65 54.69 5.96 10.90% Box Rental - 3-5 yard 67.08 60.49 6.59 10.89% Box Rental - 6 yard 75.80 68.36 7.44 10.88% Box Rental - 10 yard 89.44 80.66 8.78 10.89% Box Rental - 18 yard 179.23 161.63 17.60 10.89% Box Rental - 20 yard 181.87 164.01 17.86 10.89% Box Rental - 25 yard 189.50 170.89 18.61 10.89% Return Trip Charge 39.44 35.57 3.87 10.88% Steam Clean Bin Charge 79.03 71.27 7.76 10.89% Overweight Charge Per Ton*** 148.59 134.00 14.59 10.89% "'Comm'I boxes exceeding 300lbs/yard 1/7/2011 5 of 5 San Rafael - Exhibit C Rate Sheet -20i 1 December 29, 2010 This document is printed on 100% post consumer content recycled paper 201 N. Civic Drive, Suite 230 Walnut Creek, California 94596 Telephone: 925/977-6950 Fax: 925/977-6955 www.hfh-consultants.com December 29, 2010 Mr. Jim Schutz Interim City Manager City of San Rafael 1400 Fifth Avenue San Rafael, CA 94915 Mr. Mark Williams District Manager Las Gallinas Valley Sanitary District 300 Smith Ranch Road San Rafael, CA 94903 Mr. Gary Broad Mr. Daniel Schwarz Town Manager & Planning Director City Manager Town of Ross City of Larkspur 31 Sir Francis Drake Blvd. 420 Magnolia Avenue Ross, CA 94957 Larkspur, CA 94939 Managing Tomorrow's Resources Today Robert D. Hilton, CMC John W. Farnkopf, PE Laith B. Ezzet, CMC Richard J. Simonson, CMC Marva M. Sheehan, CPA Mr. Michael Frost Deputy Director of Public Works County of Marin 65 Mitchell Blvd Suite 200-B San Rafael, CA 94903 Reference Number: 53793 Subject: Review of Marin Sanitary Service's 2011 Rate Application Dear Messrs. Schutz, Williams, Schwarz, Frost, and Broad: This report documents HF&H Consultants, LLC's (HF&H) findings and recommendations from our review of Marin Sanitary Service's (MSS) application for a 9.55% increase to its solid waste rates, effective January 1, 2011 (Application), submitted to the Cities of San Rafael and Larkspur, the Town of Ross, the County of Marin, and the Las Gallinas Valley Sanitary District (LGVSD) collectively referred to as the "Franchisors". Findings Current Services Based on our review of the Application, we determined that a total increase of 6.50% to current rate revenues is necessary to compensate MSS for its expenses and provide it the agreed-upon level of profit for its current operations. This lower -than -applied -for increase is based on several adjustments to MSS' rate calculation (agreed upon by MSS management and HF&H) as described in Section IV of the report and reflected in Attachments 2 and 3. The 6.50% rate increase is primarily due to the net increase in operating costs resulting from the application of the changes in the applicable Consumer Price Indices (CPI), increases in workers compensation benefits resulting from new premium rates, and an increase in disposal/processing costs resulting from a significant one-time downward adjustment in prior year due g i � irr �on��s�tyJJi/�r�7m+ w���Mb�eaVi on p Managing HF'H� 'pONSULTA �� Tomorrow'sToday Marin Franchisors Group December 29, 2010 Page 2 of 4 to over projecting disposal tons in the rate setting process for 2009. Disposal projections for 2010 did not require a similar adjustment. New Services The Franchisors desire to continue increasing the volume of materials diverted from the landfill. Therefore, the Franchisors requested that MSS submit a cost proposal to include collection of foodwaste from its residential customers. MSS presented a program where the residents place foodwaste in the green waste container and the combined foodwaste and green waste container would be collected on a weekly basis and delivered to the composting site at Zamora. MSS projected the net additional costs in 2011 to be $1,056,000 which would require an additional 5.02% increase to rates. Based on our review of the cost proposal, we determined an increase of $922,268 is necessary to compensate MSS for its expenses and provide it the agreed-upon level of profit. The decrease results primarily from the reduction of one route offset by a revision to truck maintenance costs and the omission of franchise fees in its original calculations. Historically, MSS's compensation adjustments have been spread over the entire Franchisors' customer base (residential and commercial customers). If the adjustment for the collection of residential foodwaste follows historical procedures, a 4.32% adjustment to all rates is required. If the adjustment is applied to only the residential and apartment customers, then a 9.75% to the residential and apartment rates is required. The following table summarizes the recommended rate increase: Aghk Managing Tomorrow's Today Marin Franchisors Group December 29, 2010 Page 3 of 4 Rate Increase Components Foodwaste Collection Foodwaste Adjustment to Residential & Collection Apartment Customers Only Residential & Adjustment to Entire Apartment Commercial Customer Base Rates Rates Current Services Benefits 0.71% 0.71% 0.71% Fuel 0.79% 0.79% 0.79% Disposal 3.05% 3.05% 3.05% Other Operating Costs* -0.16% -0.16% -0.16% 4.39% 4.39% 4.39% Franchise Fees and Projected 2011 Revenue Shortfall 2.11% 2.11% 2.11% 6.50% 6.50% 6.50% New Services Residential Food Waste Collection 4.39% 9.75% 0.00% Total Rate Increase 10.89% 16.25% 6.50' ' Includes wages, depreciation, other vehicle -rel ated costs, general &administrative costs (e.g., public education, customer service, etc.) and various otheroperating costs. Survey of Coanparable Rates Attachment 4 shows the results of HF&H's survey of solid waste rates as of September 2010 for jurisdictions located throughout the Bay Area. We have applied the increase for current services (6.50%) and the additional increase of 4.39% for the residential foodwaste collection for a total of 10.89% to the existing rates for purposes of comparing the Franchisors' rates to other jurisdictions. Agencies noted with an asterisk (*) will be considering rate adjustments to be effective January 1, 2011. The percentage changes for these agencies are not known at this time. Consequently, their rates have not been adjusted. It should be noted many of the jurisdictions listed do not have residential organics programs. The Franchisors' residential rates for a 32 -gallon container range from $24.58 (LGVSD) to $27.97 (Larkspur). The survey shows the Franchisors' average residential rate for 32 -gallon service ($26.83) is in the middle of the other Marin County jurisdictions. Of the eight Marin County jurisdictions, four of the jurisdictions 32 -gallon container rates are higher than the Franchisors' average and four jurisdictions are lower. The rates for Fairfax and San Anselmo do not reflect an increase for 2011 at this time. Attachment 5 compares the Franchisors' residential rates for a 32 -gallon container to the average Marin County rate and all other jurisdictions' average rate for similar service. %1%%%i, � �a �s,navlrv�m�nvo»��mgVr,�Wlrc 'HF.H� ?�rONSCJLT%A Managing Tomorrow's Resources Today Marin Franchisors Group December 29, 2010 Page 4 of 4 The Franchisors' commercial rates for a 3 cubic yard bin serviced one time per week range from $341.81 (San Rafael) to $356.63 (Larkspur). The average rate for the Franchisors is $352.05 which is the median of the other four Marin County jurisdictions that have this level of service. Two jurisdictions have higher rates and two jurisdictions have lower rates. The rates for Fairfax and San Anselmo do not reflect an increase for 2011 at this time. Attachment 6 compares the Franchisors' commercial rates for a 3 cubic yard bin serviced one time per week to the average Marin County rate and all other jurisdictions' average rate for similar service levels. We caution the Franchisors that this survey is presented for information only. They should not draw conclusions from this information because rate comparisons are intrinsically difficult and often misleading. This difficulty results from differences in issues such as: 1. The services provided; 2. The terrain in which the service is performed; 3. Disposal costs; 4. Rate structures; and, 5. Governmental fees (e.g., franchise fees, vehicle impact fees, etc). We would like to express our appreciation to the MSS management and staff for their assistance. In addition, we express our appreciation to each of you for assistance and guidance during the course of the review. Should you have any questions, please call me at 925-977-6952. Very truly yours, HF&H CONSULTANTS, LLC Robert D. Hilton, CMC President Marva M. Sheehan, CPA Vice President cc: Mr. Joseph Garbarino, Marin Sanitary Service Mr. Joseph J. Garbarino, Marin Sanitary Service Ms. Patricia Garbarino, Marin Sanitary Service Mr. Neil Roscoe, Marin Sanitary Service HF&H Client Files Franchisors of Marin Sanitary Service Table of Contents Review of Marin Sanitary Service's 2011 Rate Application TABLE OF CONTENTS SECTION I. BACKGROUND.........................................................................................1 Description of Current Services................................................................................. 1 New Service - Residential Foodwaste Collection....................................................... 1 SECTION II. RATE REVIEW APPROACH.................................................................... 3 Scopeof Work........................................................................................................... 3 Limitations................................................................................................................. 4 SECTION III. MARIN SANITARY SERVICE'S PROJECTION METHODOLOGY — CURRENT SERVICES............................................................................ 5 Revenues................................................................................................................... 5 Expenses................................................................................................................... 5 Profit.......................................................................................................................... 6 SECTION IV. PROPOSED ADJUSTMENTS — CURRENT SERVICES ........................ 7 Adjustments to 2011 Projected Revenues................................................................. 8 Adjustments to 2009 and 2010 Projected Expenses—, ..... ...... ...... ...... ..... 8 Adjustments to 2011 Projected Expenses................................................................. 9 SECTION V. NEW SERVICES - RESIDENTIAL FOODWASTE COLLECTION .........11 MSSCost Proposal................................................................................................... 11 HF&H Review Steps................................................................................................ 12 HF&H Adjustments.................................................................................................. 12 SECTION VI. RATE ADJUSTMENT............................................................................14 Rate Adjustment........................................................................ 14 ATTACHMENTS Attachment 1— Marin Sanitary Service Rate Application Summary Attachment 2 — HF&H Consultants Adjustment Summary Attachment 3 — Adjusted Rate Application Summary Attachment 4 — Rate Survey Attachment 5 — Chart of Residential 32 -Gallon Rates Attachment 6 — Chart of Commercial 3 Cubic Yard Rates HF&H Consultants, LLC i December 29, 2010 This Page Intentionally Left Blank Franchisors of Marin Sanitary Service Section I. Background Review of Marin Sanitary Service's 2011 Rate Application SECTION I. BACKGROUND Description of Current Services Marin Sanitary Service (MSS) provides solid waste, recyclable materials, and yard waste collection and processing services to the residents and businesses of the Cities of San Rafael and Larkspur, the Town of Ross, the County of Marin, and the Las Gallinas Valley Sanitary District (LGVSD) collectively referred to as "Franchisors". In addition, MSS and its related entities (Marin Resource and Recovery (MRR) and the Marin Resource Recovery Center (MRRC)), provide solid waste, recyclable materials, and yard waste collection and processing services to the residents and businesses of San Anselmo, the north area of the Ross Valley Sanitary District (RVSD), Fairfax, and San Quentin prison. MSS also provides non -franchised debris box, street sweeping, and document shredding services to residents and businesses throughout the County of Marin that contract for their services. MSS delivers refuse collected from waste generators within the Franchisors' service area to the MSS transfer station then transports it to the Redwood Sanitary Landfill (Redwood). MSS delivers recyclable materials to the MRR, where materials are processed and marketed. MSS delivers recyclable -rich loads of refuse (typically commercial) and separated yard waste loads (collected from residents), along with public self -haul loads to the MRRC where recyclable materials are extracted from the waste stream, processed, and marketed. The MRRC delivers residual waste, the materials remaining after the recyclable materials are extracted, to the transfer station. This residual waste is transferred to Redwood. Yard waste is delivered to Northern Recycling Compost — Zamora (Zamora), located in Yolo County, for composting. New Service .- Residential Foodwaste, Collection In early 2010, MSS introduced a pilot composting collection program allowing certain residential customers to include foodwaste with their yard waste. The pilot has been well received and MSS plans to extend this service to its remaining customers beginning in March 2011. State regulations mandate that this comingled material be collected weekly, therefore MSS is required to expand its weekly yard waste service to the areas it serves. MSS currently uses four full size rear load packer trucks and one small rear load packer truck for yard waste collection in LGVSD, San Rafael, Ross, Kentfield, the County of Marin, and Larkspur. The current every other week yard waste collection has each truck operating an even route one week and an odd route the following week. Customers will be informed of the acceptable list of food items allowed in the yard waste carts by distributing can hangers, which will include the list in the Quarterly newsletter and the MSS website. The customer service department will temporarily increase its resources to help customers during the roll out of this new program. 1 December 29, 2010 Franchisors of Marin Sanitary Service Section I. Background Review of Marin Sanitary Service's 2011 Rate Application This comingled material will be processed in the same way as regular yard waste and will be delivered to Zamora for composting. December 29, 2010 Franchisors of Marin Sanitary Service Section II. Rate Review Approach Review of Marin Sanitary Service's 2011 Rate Application SECTION II. RATE REVIEW APPROACH Scope of Work Rate Adjustment Methodology The Rate Index Methodology was developed and approved in 2001. This method was used to determine 2011 rates. The results from the 2010 rate review are adjusted by changes in certain indices (e.g., CPI, employment cost index and the transportation index). Also, new projections of certain costs (e.g., disposal expense, fuel expense, workers' compensation expense, depreciation, interest expense, and fees imposed by the Marin County Hazardous and Solid Waste Management Joint Powers Authority (JPA)) and revenues (e.g., collection rate revenues) are made to adjust the results from the 2010 review to determine the 2011 rates. The Franchisors engaged HF&H in August 2010 to perform a limited review of the Application in accordance with the Rate Index Methodology. The scope of this review is described in our engagement letter dated August S, 2010. These procedures included the following activities: • Reviewing MSS' Application to determine completeness, mathematical accuracy, and reasonableness and logical consistency of the assumptions supporting the projected revenues and expenses; • Reviewing and testing projected revenues to ensure that they are consistent with past trends and anticipated conditions; • Reviewing MSS' calculation of rate year 2011 indexed expenses by comparing them to the calculated expenses for 2010 which were established in HF&H's prior report, and the calculated changes to the applicable indices; • Reviewing other projected expenses including depreciation, interest, disposal and recyclables/yard waste processing expenses by evaluating the reasonableness of MSS' estimates for these expenses based on historical trends and MSS management's plans; • Reviewing MSS' calculation of projected profit for compliance with the procedures and mathematical accuracy; • Reviewing the appropriateness of MSS' allocation of revenues and expenses among the Franchisors and other service areas; • Reviewing our recalculation of MSS' projected results of operations and our recommendations with MSS and the Franchisors representatives; and, 3 December 29, 2010 Franchisors of Marin Sanitary Service Section II. Rate Review Approach Review of Marin Sanitary Service's 2011 Rate Application • Preparing a written report that documents our findings and recommendations. I imitations Our review was substantially different in scope than an examination in accordance with Generally Accepted Auditing Standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. However, Chiao Smith and Associates has issued an unqualified opinion of MSS' 2009 financial statements. There are related party transactions included in MSS' 2011 projections at rates that have been discussed and allowed by the Franchisors in previous reviews and therefore we did not review the underlying basis for such rates. Our conclusions are based on the review of MSS' projections of its financial results of operations. Actual results of operations will usually differ from projections because events and circumstances frequently do not occur as expected and the difference may be significant. 4 December 29, 2010 Franchisors of Marin Sanitary Service Section III. MSS' Projection Methodology — Current Services Review of Marin Sanitary Service's 2011 Rate Application SECTION III. MSS' PROJECTION METHODOLOGY — CURRENT SERVICES On September 30, 2010, MSS submitted the Application to the Franchisors requesting that solid waste collection rates be increased by 9.55%, effective January 1, 2011 (Application). The following describes MSS' methodology for projecting 2011 revenues and expenses. Reirenues Route Revenues MSS initially projected its 2011 route revenues in the amount of $23,575,932 by annualizing the revenues received through June 2010 and calculating franchise fees payable to each jurisdiction in accordance with the franchise agreements. Additionally, MSS included a 2.32% ($546,962) reduction to the projected route revenues. MSS based the percentage reduction on its analysis of the previous four year period (2007 through projected 2010) of the actual revenue billed vs. the revenue requirement. In MSS' opinion route revenues will continue to decline and the existing projection methodology does not reflect the anticipated decline. Under the accrual method of revenue accounting, bad debt is recorded when it has been determined an account is uncollectible. MSS has collection procedures in place to attempt to collect the past due accounts. MSS projected a reduction of $55,190 to the accrued route revenues for bad debts from uncollectible accounts. This amount was determined by annualizing the actual write-off of uncollectible accounts for the seven months ending June 2010. Non -Regulated Revenues MSS projected 2011 non-regulated revenues of $11,544 by annualizing revenues received for the six months ending June 2010. The non-regulated revenues are disposal fees received at the transfer station for the transfer, transport, and disposal of solid waste from the MRRC and Household Hazardous Waste facility. Expenses MSS projected its 2011 expenses for each expense category by: • Wages. Multiplying 2010's allowed wages and salaries expense by 1 plus the 1.4% change in the San Francisco -Oakland -San Jose Metropolitan Consumer Price Index (Urban Wage Earners) from June 2009 to June 2010. • Benefits. Multiplying 2010's allowed benefits expense by 1 plus the 2.5% change in the Employment Cost Index -Benefits (Private Industry Workers) from June 2009 to June 2010. 5 December 29, 2010 Franchisors of Marin Sanitary Service Section III. MSS' Projection Methodology — Current Services Review of Marin Sanitary Service's 2011 Rate Application • Disposal Fees. Annualizing the June 2010 YTD disposal expense. MSS does not anticipate a change in disposal tonnage. However, it has included a 1.1% increase in its per -ton disposal fee at Redwood in accordance with the agreement between MSS and Redwood, effective January 1, 2011. Consistent with prior years, an adjustment is made to the 2009 disposal expense to reflect the difference between the projected and actual disposal expense for 2009 and the difference between the 2010 projections done in 2009 and the revised 2010 projections done as part of the current rate application process. HF&H has recommended these adjustments in prior years. For the 2011 Application, MSS calculated the adjustments and included them in their initial Application. MSS proposed an increase of $19,834 to adjust the 2009 disposal expense to actual and an increase of $127,651 to update its projection of 2010 disposal expense. • Fuel. Multiplying 2010's allowed fuel expense by 1 plus the 7.7% increase in the Consumer Price Transportation Index — Motor Fuel (All Urban Consumers) from July 2009 to July 2010. • Maintenance. Multiplying 2010's allowed maintenance expense by 1 plus the 1.9% change in the Consumer Price Transportation Index — Motor Vehicle Maintenance and Repair (All Urban Wage Earners) from July 2009 to July 2010. • Depreciation/Lease. Taking the sum of existing equipment depreciation plus depreciation for the remaining 2010 capital expenditures less remaining adjustments for fully depreciated assets plus projected depreciation on capital expenditures for 2011. MSS included the amortization of financing fees associated with the California Pollution Control Financing Bonds issued in 2006. MSS adjusted the truck depreciation for the non -franchised use of vehicles based upon the trucks actual route hours spent in non -franchised areas. Also included was the lease expense on existing equipment and an adjustment for G&A and shop. • Other Operating/G&A. Multiplying 2010's allowed other operating/G&A expense by 1 plus the 1.1% change in the San Francisco -Oakland -San Jose Metropolitan Consumer Price Index (All Urban Consumers) from June 2009 to June 2010. • Interest. Interest expense was calculated using amortization tables to calculate the actual interest portion of future debt (loan and bond) payments. MSS included the interest on their working capital line of credit. Profit MSS calculated its 2011 profit of $2,115,321 by applying a 90.5% pre-tax operating ratio to its 2011 total projected expenses that are eligible for profit. 6 December 29, 2010 Franchisors of Marin Sanitary Service Section IV. Proposed Adjustments — Current Services Review of Marin Sanitary Service's 2011 Rate Application SECTION IV. PROPOSED ADJUSTMENTS - CURRENT SERVICES The following is a summary of HF&H's proposed adjustments to MSS' projected 2011 revenues, expenses, and profit. Exhibit 1 Marin Sanitary Service - Rate Adjustment Calculation As Adjusted By HF&H ($000's Unless Otherwise Indicated) Projected YE 12/31/2011 REVENUES 1. Route Revenue at Current Rates Projected By MSS 23,029 2. Route Revenue Adjustment 504 3. Adjusted Gross Route Revenues 23,533 4. Less: Franchise Fees Projected By MSS (at current route revenue) (2,276) 5. Recalculation of Franchise Fees Based on Revenue Adj. Above (48) 6. Adjusted Franchise Fees (2,325) 7. Less: Vehicle Impact Fees Projected by MSS (196) 8. Adjusted Net Route Revenue (Line 3 +Line 6 +Line 7) 21,012 9. Plus: Non -Regulated Revenues Projected by MSS 12 10. Total Projected Net Revenues (Line 8 +Line 9) 21,023 EXPENSES 11. Operating Expenses Eligible for Profit Projected by MSS 20,151 12. HF&H Operating Expense Adjustments 13. Wages Expense - 14. Benefits Expense 83 15. Fuel Expense (91) 16. Depreciation Expense (111) 17. Other Operating / G&A Expenses (4) 18. Adjusted Operating Expenses 20,028 19. Profit at 90.5% Operating Ratio Projected by MSS 2,115 20. Recalculation of Profit Based on 90.5% Operating Ratio (13) 21. Adjusted Profit 2,102 22. Interest Expense Projected by MSS 266 23. HF&H Interest Expense Adjustment (7) 24. Adjusted Interest Expense 259 25. Total Revenue Requirement (Lines 18+ Line 21 + Line 24) 22,389 26. Surplus / (Deficit) (Line 10 - Line 25) (1,365) 27. Rate Adjustment 6.50% 7 December 29, 2010 Franchisors of Marin Sanitary Service Section IV. Proposed Adjustments — Current Services Review of Marin Sanitary Service's 2011 Rate Application Adjustments to 2011 Projected Revenues Route Revenue Adjustments (Line 2): HF&H recommends an adjustment of $503,750 to increase projected route revenues. MSS' projection methodology of annualizing June 2010 YTD route revenues less 2.32% for forecasted decline of revenue resulted in 2010 estimated revenues of $23,028,970. HF&H projected future route revenues by using an additional three months of actual data. Annualizing September YTD actual route revenues and projecting the remaining months of 2010 using the monthly average of the third quarter 2010 actual revenues. Consistent with the methodology used in previous rate applications, HF&H did not utilize any adjustment factor for MSS' forecasted decline of revenue. Historically, MSS has assumed the risk of both positive and negative fluctuations in the revenue projections. Rates are set for 2011 assuming the current year's (2010) level of subscription remains consistent. In recent years the economic downturn has prompted customers to downsize subscription levels in an effort to reduce their expenses thereby producing less than anticipated revenue to cover MSS's cost and compensation for providing service. Conversely should the economy pick up and growth occur, then revenue and compensation to MSS would be greater than projected until the next years projections are reviewed. In addition, HF&H tested rates after the 2010 rate increase for each member agency to verify that MSS implemented the correct rate adjustment. The rate adjustments for the franchised jurisdictions were effective January 1, 2010 with the exception of the County and the County RVSD accounts which were effective February 9, 2010. HF&H tested accounts from each member agency as selected at random from the August 31, 2010 billing information provided by MSS, to verify the correct rates were billed. HF&H found no exceptions for the tested accounts. Franchise Fee Adjustment (Line 5): HF&H recommends increasing Franchise Fees by $48,302 due to the increase in route revenues recommend above. Adjusbirnent's to 2009 and 2010 ProJected Expenses Fuel Expense (Line 15): HF&H recommends decreasing 2009 and 2010 diesel fuel expense for a net total decrease of $30,144, due to the following: • A $14,499 decrease to reflect the over -reimbursement of 2009 diesel fuel expense compared with the actual diesel fuel expense. The average diesel fuel price for 2009 of $2.41 per gallon was less than the $2.45 per gallon projected at the time of the review of the 2010 rate application; and, • A $15,645 decrease to 2010 diesel fuel expense resulting from a downward revision in projected average annual fuel cost to $2.90 per gallon from $2.95 per gallon. HF&H multiplied the base gallons of 286,737 (determined in the detail year review completed in 2009) by the average price per gallon of $2.90. Even though the volatility of diesel fuel prices has leveled off, the projected increase may over- or under -project actual diesel fuel expenses for 2010. The most recent diesel fuel price was $2.91 per gallon at the end of 8 December 29, 2010 Franchisors of Marin Sanitary Service Section IV. Proposed Adjustments — Current Services Review of Marin Sanitary Service's 2011 Rate Application August 2010; however, in April the price per gallon reached $3.11. The actual price paid by MSS will be reflected in the rate -setting process for 2012. Adjustrrients to 2011, �Pirojected Expenses Benefits Expense (Line 5): HF&H recommends increasing MSS's benefits expense by $82,743 due to an increase in workers' compensation premiums for 2011. Subsequent to MSS submission of the Application, the final premium quotes were made available by the insurance carrier. HF&H recalculated the workers compensation expense using the updated premium information and experience modification factor. Fuel Expense (Line 15): HF&H recommends a $60,819 decrease in the 2011 projected diesel fuel expense. The decrease results from HF&H and MSS using different methodologies for projecting fuel expense. MSS projected the 2011 fuel expense by using the results from the 2010 review less any prior period adjustments and multiplying by one plus the change (a 7.7% increase) in the Consumer Price Transportation Index — Motor Fuel (All Urban Consumers) for the most recent 12 month period ending July 2010. HF&H projected the 2011 diesel fuel expense by using the projected fourth quarter 2010 price of $2.96 per gallon (a 2.7% increase from the adjusted 2010 projected price of $2.90 per gallon) multiplied by the base year gallon usage of 286,737. Even though the volatility of diesel fuel prices has leveled off, the projected decrease may over- or under -project actual diesel fuel expenses for 2011. The projections for 2011 will be reviewed as part of the rate -setting process for 2012. Depreciation/Lease (Line 16): HF&H recommends a $111,054 decrease in depreciation expense, due to the following: • A $2,366 decrease to reflect the adjustment to the roll -off truck depreciation for the portion of time used in the Non -franchised area; • A $17,759 decrease to reflect the adjustment to residential and commercial truck depreciation for the portion of time used in the Non -franchised area; • A $23,813 decrease to reflect the adjustment of asset lives for trucks purchased with bond proceeds to seven years (from the five years used in the MSS' fixed asset system); • A $55,431 decrease to reflect the adjustment of asset lives for trucks purchased with traditional bank financing to five years (from seven years to match the asset lives to the financing term consistent with past practice); • A $5,369 decrease for the non-regulated portion of depreciation for two G&A assets acquired in 2006 that were included in error; • A $1,018 increase for the inclusion of depreciation expense on a portion of the Soft -Pak billing system's cost that was not included in MSS' fixed asset system; and, • A $7,334 decrease for shop vehicle depreciation attributed to the Non -franchised areas. 9 December 29, 2010 Franchisors of Marin Sanitary Service Section IV. Proposed Adjustments — Current Services Review of Marin Sanitary Service's 2011 Rate Application Other Operating/G&A Expenses (Line 17): HF&H recommends decreasing the JPA expense by $4,373. Utilizing the rate per ton of $6.59, as provided by the JPA, HF&H recalculated the amount due to the JPA. Profit (Line 20): Due to the adjustments recommended above, HF&H recommends decreasing MSS' profit by $12,979 based on a 90.5% operating ratio. Interest (Line 23): HF&H recommends a $6,776 decrease to interest expense, due to the following: • A $23,646 increase to reflect the adjustment for a new line of credit/working capital that MSS did not include this account in their Application; • A $1,742 decrease for the department 500 allocation associated with the addition of the new line of credit mentioned above; • A $60,410 decrease for the change to the Non -Franchised interest allocation for Non - Franchised Vehicles resulting from an error in MSS' Application; and, • A $31,730 increase to the MSS projection of interest to be paid on new vehicle capital purchases that will be financed during the remainder of 2010 and 2011. 10 December 29, 2010 Franchisors of Marin Sanitary Service Section V. New Services - Residential Foodwaste Collection Review of Marin Sanitary Service's 2011 Rate Application SECTION V. NEW SERVICES - RESIDENTIAL FOODWASTE COLLECTION MSS Cost Proposal MSS submitted a cost proposal for the collection of residential foodwaste in the franchised area. The collection of foodwaste commingled with yard waste requires the yard waste collection to be performed on a weekly basis. Yard waste is currently collected every other week in the franchised area, except for a pilot program operating in the LGVSD. MSS estimated the new service expansion would require five additional yard waste routes and additional capital cost of approximately $1.5 million. The services are expected to begin March 1, 2011. MSS calculated the annual cost to provide the service and then adjusted the revenue requirement to include ten months of costs. The impact on the rates would be an additional 5.02% increase. MSS' cost proposal is shown below: Marin Sanitary Service Residential Yard Waste Collection Proposed Costs Operating Expenses Wages Benefits Disposal Fees Fuel & Oil Maintenance Expense Depreciation/Leases Other Operating/ G&A Operating Profit Interest Expense Franchise Fees (Average %) MSS Annual Revenue Requirement Ten Months Revenue Requirement 2010 Projected Route Revenues CaVculated Rate Adjustment 90.5% Exhibit 2 $ 362,531 266,359 93,000 96,250 183,384 112,000 $ 1,113,524 116,889 36,965 $ 1,267,378 $ 1,056,148 $ 21,023,467 5.02% 11 December 29, 2010 Franchisors of Marin Sanitary Service Section V. New Services - Residential Foodwaste Collection Review of Marin Sanitary Service's 2011 Rate Application I' F&.j° Review S,teps HF&H reviewed MSS's cost proposal to determine if the costs were reasonable when compared to MSS operations and industry standards. HF&H performed the following steps as part of the review: 1. Compared the proposed truck hours to the current truck hours to determine similar productivity; 2. Recalculated labor costs based on wages and benefits per the current collective bargaining agreement; 3. Requested quotes for new truck purchases ; 4. Recalculated interest based on truck costs and interest rates used in base review; 5. Compared the maintenance costs per truck hour to the similar costs from the detailed rate review performed in 2009 for reasonableness; 6. Reviewed additional general and administrative costs for reasonableness; 7. Recalculated profit; 8. Recalculated the franchise fee component; and, 9. Recalculated the percentage increase. HF&H Adjustments HF&H proposes the following adjustments: Wages and Benefits: Based on the current productivity levels, it was determined that only four additional routes were needed. MSS proposed five additional routes. Therefore, the wages and benefits have been reduced by $123,663 and $182,715, respectively. Disposal Fees: MSS did not propose a reduction to disposal fees for the anticipated tonnage diverted from the landfill. After discussions with MSS, a reduction of 915 tons (3%) is expected for 2011. The percentage is lower than most programs in the Bay Area. However, the program is not for a full twelve months and it will take some time for full participation. Additionally, the disposal and processing costs for 2011 will be reviewed as part of the 2012 index rate review. The processing rate for green waste and foodwaste is $3.14 less per ton than the MSW disposal rate. Therefore, disposal costs have been reduced by $2,873. Fuel and Oil: The reduction of one route created a reduction to fuel and oil expenses of $30,600. Maintenance Expenses: MSS initially proposed maintenance expenses for five routes that cost an average of $1,200 per month. Upon further review, MSS noted the $1,200 was incorrectly used and proposed $2,875 per month. The costs include tire, parts and supplies, and the allocation of the shop costs (personnel, equipment, etc). HF&H reviewed the new costs and compared them to the actual costs from the 2009 detail rate review and found the additional costs to be reasonable, resulting in an increase in maintenance costs of $100,500 for five routes. However, it was determined that only four routes are required for the new service resulting in a reduction of $39,350. Therefore, maintenance expense has been adjusted for a net increase of $61,150. Depreciation/ Leases: Due to the reduction of one route, one fewer truck will need to be purchased. Therefore, depreciation has been reduced by $36,677. 12 December 29, 2010 Franchisors of Marin Sanitary Service Section V. New Services - Residential Foodwaste Collection Review of Marin Sanitary Service's 2011 Rate Application Other Operating / G&A: MSS included costs for a part-time customer service / public education coordinator, public education material, postage and a contingency for unanticipated costs. It is not unusual for there to be unanticipated costs; however, since MSS was not able to specifically identify such items, G&A has been reduced by 50% of the contingency or $12,500. Profit: Due to the adjustments recommended above, HF&H recommends decreasing MSS' profit by $24,018 based on a 90.5% operating ratio. Interest: The reduction of one route results in one less truck to be financed. Therefore, interest has been reduced by $7,393. Franchise Fees: MSS did not include franchise fees in the compensation calculation. HF&H used an average Franchisors' franchise fee percentage of 9.885% and increased franchise fees by $99,561. The following is a summary of HF&H's proposed adjustments to MSS' projected expenses, and profit for the additional services. MSS Annual Revenue Requirement $ 1,267,378 _L_(160,656) $ 1,106,722 Ten Months Revenue Requirement $ 1,056,148 $ (133,880) $ 922,268 2010 Projected Commercial & Residential Route Revenues $ 21,023,467 $ 21,023,467 Calculated Rate Adjustment 5.02% 4.39% Ten Months Revenue Requirement $ 922,268 2010 Projected Residential Route Revenues $ 9,459,395 Calculated Rate Adjustment - Residential Rates Only 9.75% 1.3 December 29, 2010 Exhibit 3 Marin Sanitary Service Residential Yard Waste Collection Adjusted MSS Proposed HF&H Proposed Costs Adjustments Costs Operating Expenses Wages $ 362,531 $ (123,664) $ 238,867 Benefits 266,359 (83,644) 182,715 Disposal Fees - (2,873) (2,873) Fuel & OK 93,000 (30,600) 62,400 Maintenance Expense 96,250 61,150 157,400 Depreciation/Leases 183,384 (36,677) 146,707 Other Operati ng / G&A 112,000 (12,500) 99,500 $ 1,113,524 $ (228,807) $ 884,717 Operating Profit 90.5% 116,889 (24,018) 92,871 Interest Expense 36,965 (7,393) 29,572 Franchise Fees (Avera ge%) - 99,561 99,561 MSS Annual Revenue Requirement $ 1,267,378 _L_(160,656) $ 1,106,722 Ten Months Revenue Requirement $ 1,056,148 $ (133,880) $ 922,268 2010 Projected Commercial & Residential Route Revenues $ 21,023,467 $ 21,023,467 Calculated Rate Adjustment 5.02% 4.39% Ten Months Revenue Requirement $ 922,268 2010 Projected Residential Route Revenues $ 9,459,395 Calculated Rate Adjustment - Residential Rates Only 9.75% 1.3 December 29, 2010 Franchisors of Marin Sanitary Service Section VI. Rate Adjustment Review of Marin Sanitary Service's 2011 Rate Application SECTION VI. RATE ADJUSTMENT Rate Ad justmei,it Current Services Based on a revenue requirement of $22,388,647 for the calendar year 2011, resulting from our recommended adjustments to MSS' projected expenses and profit for the current services, we recommend a rate increase of 6.50%, effective January 1, 2011. This rate increase of 6.50% results primarily from: 1) An overall net increase in operating costs, primarily from: benefits increase due to increased workers compensation rates; fuel price increases; and increased disposal costs resulting from a significant downward adjustment (approximately $330,000) in the prior year not repeating in the current year. In setting the rates for 2010, reductions to the disposal expense were primarily the result of the reconciliation of 2009 disposal expense projected in 2008 to the actual 2009 disposal expense. Similar adjustments for declines in volume from prior years did not occur in the current year review. 2) A decrease in projected revenue due to a decrease in actual subscription revenues vs. projected 2010 revenues. New Services Based on an additional revenue requirement of $922,268 for residential foodwaste collection services resulting from our recommended adjustments to MSS' projected expenses and profit, we recommend an additional rate increase of 4.39% if the revenue requirement is applied to both the residential and commercial customer base. An additional rate increase of 9.75% to the residential and apartment customer base is necessary if the costs for the new program are to be included solely in the residential and apartment rates. The rate increase will provide the additional equipment, labor, public outreach, and other costs necessary to implement the foodwaste collection program in the franchised area. The following table shows the components of the rate increase: 1.4 December 29, 2010 Franchisors of Marin Sanitary Service Section VI. Rate Adjustment Review of Marin Sanitary Service's 2010 Rate Application Rate Increase Components Foodwaste Collection Foodwaste Adjustment to Residential & Collection Apartment Customers Only Residential & Adjustment to Entire Apartment Commercial Customer Base Rates Rates Current Services Benefits 0.71% 0.71% 0.71% Fuel 0.79% 0.79% 0.79% Disposal 3.05% 3.05% 3.05% Other Operating Costs* -0.16% -0.16% -0.16% 4.39% 4.39% 4.39% Franchise Fees and Projected 2011 Revenue Shortfall 2.11% 2.11% 2.11% 6.50% 6.50% 6.50% New Services Residential Food Waste Collection 4.39% 9.75% 0.00% Total Rate Increase 10.89% 16.25% 6.50% *Includes wages, depreciation, other vehicle -related costs, general & administrative costs (e.g., public education, customer service, etc.) and various otheroperating costs. 15 December 29, 2010 Q w m w V N V N N r-1 m N O O V1 O m a m m M a` a N to N w m r` to O N c 00 R .--i .-1 N N N 1-1 M to to O N m r\ m O al C c N R k to 11 O ' 'i C m C to to O O f0 w w w O N V m V i\ r, .--1 w m r, " to to to .--1 tD N M 00 N 00 tD tD N n m lD �i to .--1 00 lO 00 LD a to m p O .--1 lD to m N m m .--1 r-1 N to O O N r•1 N to M m O tDN V N N N O N N m rn N0 O O rl t" r N N N N `-' N N N � N m m tO O N m to O 11 LO n 1 N ti O O O O t\ V to In m tb N l0 N m r` NI a O lD M O -4 to tD v O . -1 n l0 r to O M N Vl M .--1 r, C rl at m lD N to � o v m LO to m m rl m v tri tri rl co Co 00 tri ai M 7 DD M m -4 r-1 N M t0 N N m N .--1 m '-1 m `-' w N LD N LD N N uo .-1 to to to N n co m to ry O m m00 '-t M a R a' .--1 C 00 N m 00 t0 of m N r1 W M to .--1 tD r-1 m m O N N 11 M ul M V' ti .--t 00 to m to m LD N to Ui C N CO N -Zr CO O N 00 w 00 LO N N t!1 n r, r\ 00 m O O ; M W ry LD m V m r- v V .-1 00 ul O n O to rl N C V V '7 M �f ri ri ri ri ri ri ri w m 00 m N N N w N m -4 N N N O m m to lD m V LD V m e4 to m N N r1 m r1 O m rl m n n 00 N V N C N O O m N to f` N r\ m n al R R to to N to m N O n V r\ to tD to c0 t0 LO r-1 a V M m N N O 0C M to O N N V m r-1 N R R V' m a N m N t\ Ln m m to C V). 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DO 00 M 00 N lD 00 a Oo "" N Cf '•i W m n VI e-4 O mwLo n M a v oa m mm n w 00 N M a rl m rl rl O w00 VI L6 Di N o n V n N .... m l0 .m-1 VI O N N [t M a [t me a v o n a lDLn w n "I ID o o Ln lD lD m N a n o N o0 C C o0 O .� n n .� rr 0o ri ri m oo v D v v a ri m v n .a -r -i m y =r Ln H m I VI DI n n a N n OI Ln n Ln rn o0 m o a m rn N m 00 w oo m o o a n a rn DI o rl o VI V m m n N n m O N n n0 wN "" "" VI n Ln N rn N N N lD N rl O1 V' N N a N w M MVI lD N N O n m m LO a0 .4 m O lD a m n a to I Vt M a m rr o 00 o v r: o m ro, c o N mm .M-1 N Cr Val O-1 R ri V V} m o O m a oo m m m N a F, VI O O n oo N M m O m cllD VI lD oo n l0 Vt M O W o m m V o V1 VI .-1 m V] m m oo m o l0 0o a.a. 2. m m n rl O T n oo r oo m N N N r o An N m00 m n VMI O a l0 -T O N o oo lD rr '-i L rr rn m 0 0 0 o N�T m m o n N v n n rl w m n o1 M N o rl l0 VI m N DI VI `-' O -1 to N a N N N o N N N Lq V7 O QI o o ao o N a to Dn1 n n C DI Lq at oo m y lD ti 1• M N O N DI N rl N O Ln m ti c 0 m N ti ri N N N NI -r DI m N VI w rmn Ib a 'M-1 m Ln Q1 a to n M N N m In In n o .4 rn v M rr in in n in n m in o a LD ono oo n N a v 14 ri ri N n �'-� 00 LD a N O N N VI n O lO O lD N o0 LD N m Vi m N N n V] LD Ln a a a rr o LD m a Kr Ln cn N DI DI lD N olO ri v r, Ch ri ri m a to o .� lD m m M rn M m N n O DI VI VI r, 0 C DI m DI o m V1 00 DI N VI N m M n n n N N rl tD n n m Vl O oo cNfn O V cT C N rr v to m oo O Lr n m lnD -Zr -Ni lD lD N n m VI 00 N N O Zi m m o D1 D1 N n a N a L'i co c Eco E c N ca N Ln N J cu C 5 E N = LA ` r `Dai E u N 0 R Q C N N N} l 2 C J i H L fa c u 7 j - G Q Q 2 N A W m tt C [ = o< Q ucu a v N O N E Yn N Ln -i m m n V7 O R lmD v o N c 00 lD rr It VI N VI fn 0 0 00 o N Ct m m o r` N ral ln0 L m N mO1 lnn �% `M" 0 0 ri LD N C N O N N W VI O n Ln a M ID O n I r1 N m a m 00 rr M M M M N W o0 N N DI l0 N M N M VI lO o V1 o N 1D tD r+1 N r» ri LO N N me In N M a V In o a lo Ln O M a m 0 m m M m m In r a v rr lD to rr o oo Vl QI QI rl N 1p .N.. DO 00 M 00 N lD 00 a Oo "" N Cf '•i W m n VI e-4 O mwLo n M a v oa m mm n w 00 N M a rl m rl rl O w00 VI L6 Di N o n V n N .... m l0 .m-1 VI O N N [t M a [t me a v o n a lDLn w n "I ID o o Ln lD lD m N a n o N o0 C C o0 O .� n n .� rr 0o ri ri m oo v D v v a ri m v n .a -r -i m y =r Ln H m I VI DI n n a N n OI Ln n Ln rn o0 m o a m rn N m 00 w oo m o o a n a rn DI o rl o VI V m m n N n m O N n n0 wN "" "" VI n Ln N rn N N N lD N rl O1 V' N N a N w M MVI lD N N O n m m LO a0 .4 m O lD a m n a to I Vt M a m rr o 00 o v r: o m ro, c o N mm .M-1 N Cr Val O-1 R ri V V} m o O m a oo m m m N a F, VI O O n oo N M m O m cllD VI lD oo n l0 Vt M O W o m m V o V1 VI .-1 m V] m m oo m o l0 0o a.a. 2. m m n rl O T n oo r oo m N N N r o An N m00 m n VMI O a l0 -T O N o oo lD rr '-i L rr rn m 0 0 0 o N�T m m o n N v n n rl w m n o1 M N o rl l0 VI m N DI VI `-' O -1 to N a N N N o N N N Lq V7 O QI o o ao o N a to Dn1 n n C DI Lq at oo m y lD ti 1• M N O N DI N rl N O Ln m ti c 0 m N ti ri N N N NI -r DI m N VI w rmn Ib a 'M-1 m Ln Q1 a to n M N N m In In n o .4 rn v M rr in in n in n m in o a LD ono oo n N a v 14 ri ri N n �'-� 00 LD a N O N N VI n O lO O lD N o0 LD N m Vi m N N n V] LD Ln a a a rr o LD m a Kr Ln cn N DI DI lD N olO ri v r, Ch ri ri m a to o .� lD m m M rn M m N n O DI VI VI r, 0 C DI m DI o m V1 00 DI N VI N m M n n n N N rl tD n n m Vl O oo cNfn O V cT C N rr v to m oo O Lr n m lnD -Zr -Ni lD lD N n m VI 00 N N O Zi m m o D1 D1 N n a a LR a L'i 00 N 00 rl m N N •D N a C > W � N E u c M E c Q ucu E Yn CL N D:. m 7 U X W y R d N o. o a! Q •� c D w O. c OJ c 4! H w N L° °Ja m s 01 c e a cu E m; li v 'c as E c w « 07! w v y `y m v> p c a \ :° m = ar S a m v a wv E z w C x cu to cua! CL 12 cr r cu z lu N a! C 0 0 u N -m a, d C L v ad O > In r K u_ al LL O .-1 rl �• ~p N Q X N W C W •-r u u r0 al N D. O. Q C m N u O N a� N C � N O L0 aJ 7 im K N LL N 61 m C m Q t D a1 a x c v y v x a > ar75 ° m c a y a s ad o t- w v 5 03 c F z u r 3 m 0 li G C 0 O x N CL 0 C K x J J Z Z u ' 1 cu yd containers not available. Rates reflected hereare for 1.5 cu.Vds. 2 City has one rate for unlimited residential solid waste callection from customer -provided containers 'Largest residential can Is 45 gallon 4 Smallest Commercial Bin Is 2 yd. 'Largest commercial bin is 2 yards. Attachment 4 Bay Area Rate Survey - With Franchisors Group Residential Foodwaste Collection Rn s. Sinele-Familu Commercial IYD Bin IYD Bin 3YD Bin 3YO 01. Jurisdiction County 30-35G.I. 60-6413al. 90.96G.I. lx week 3v week jd&ML.. 3v week City of Alameda Alameda 5 3095 $ 51,67 $ 72 17 S 117.21 35EL66 $ 35164 S 1,075,99 City of Albany Alameda 5 2477 $ 4182 $ 6087 98.73 S 29619 296.21 S BEIS 63 City of Berkeley (District 1 & 2) Alameda S 2756 $ 55.10 $ 8262 S 133.47 S 376,07 5 36938 5 1,097.15 City of Aa,kd.y (District 3) Alameda $ 29,09 $ 58.14 $ 0720 S 133..47 S 376,07 369.311 S 1,097.15 City of Dublin Alameda S 1799 $ 33,04 S 4909 5 80.21 $ 280,55 240.,63 5 761 B1 City of Emeryville Alameda S 1181 $ 23.51 S 35.41 S 69.59 $ 208,77 $ 208.79 $ 62637 City of Fremont Alameda S 25.71 S 28.16 $ 41..44 73.89 S 21155 $ 166.10 $ 489,17 City of Uvermare- Alameda $ 19.29 S 42.40 S 70.36 9061 5 282.69 $ 27162 S 866.03 City of Newark Alameda $ 20.89 36,99 $ 53.08 $ 8I.89 $ 226,19 S 216,65 5 590.87 City of Oakland- Alameda S 27.68 S. 6036 $ 93.00 $ 129-95 $ 41157 S 340.70 $ 1,073.93 Cit y at Piedmont'' Alameda S 47.71 $ 55.70 $ 65.26 S 149.64 S 421.81 N/A WA City of Pleasant.. Alameda S 29.13 N/A S 3457 $ 122,73 S 321,20 $ 350.49 $ 945.,69 City of San Leandro Alameda S 23.22 $ 38..64 $ 54.05 S 101,80 S 307,75 S 30775 S 92128 City of Union City Alameda 5 36,58 S 64.19 S 91.110 $ 114.15 $ 31527.$ 299,13 S 81522 Castro Valley Sanitary District Alameda 30.89 S 56 65 S 76.45 S 218.54 $ 65557 S 581,62 5 1,.630.29 Oro Loma Sanitary District (LI & 2) unincoris Alameda & Hayward- Alameda $ 12.15 $ 2434 $ 36.49 $ 94.98 S 221,50 S 23130 S 611,27 Oro Loma Sanitary District 11.3) San Leandro' Alameda S 13.67 5 27.71 $ 41.5131 $ 108,17 S 252,27 5 26191 $ 69612 City of Richmond Contra Costa S HAS 5 54,33 $ 80.92 $ 193.06 S 48932 S 439.83 5 1,ZCi3L97 City of San Pablo Contra Costa 27.57 5 52,53 S 78.24 $ 205,27 S 521.71 S 477,96 S 1312.82 City of El Cerrito Contra Costa S 34.04 5 68,08 N/A $ 200.08 S 546,49 N/A WA City of Hercules Contra Costa 20.01 S 49,46 $ 71.57 214,27 $ 543,38 5 496.03 $ 1,362,65 City of Pinole Contra Cast. 28.80 S 51.20 $ 74.27 219.29 555,26 S 55525 $ 1,39030 UnInmri, -West Contra Costa Contra Costa 29.36 $ 5631 S 03.85 $ 19940 505.84 S 45399 $ 1,242,7B Town of Fairfax- Marin 22.53 45,06 $ 67.59 $ 132..40 313,65 S 310.45 $ 812,60 Town of San Anselmm" Marin S 23.13 S 46,28 $ 69.43 N/A N/A 379,52 S 1,138,61 City of BelvedereMarIn $ 32.67 N/A N/A S 161611 $ 446.62 N/A WA City of NovatoMarla 17.22 $ 3442 $ 51.63 NIA N/A S 22433 $ 556.61 City of S.-Ift. Marin S 3Z 10 S 64.15 S 96.25 $ 12665 S 379,96 379,96 5 1,139,87 To.. ofTb.r.n" Marin $ 3026 N/A N/A $ 14390 39295 N/A N/A Town of Corte Madera". Marin 5 2553 N/A N/A $ 11942 32224 NIA N/A City of Mill Valley- Marin 32.16 N/A N/A $ 14246 363,45 N/A WA City of San Rafael Maria S 27.67 $ 55,33 S 83.00 $ 178,60 54609 341,82 S 970,18 Las Gallinas County Maria 5 24.58 $ 49 17 73.75 5 17603 52B 59 356,20 S 99420 City of Larkspur Marin S 2797 $ 5593 S 83.90 $ 17757 53256 5 356,63 935.10 Town of Ross Marin 26.90 S 5380 $ 80.71 NIA N/A S 345.42 $ 1,03615 County (RVSD.S) Marin S 27.30 S 5679 S 88.59 $ 230.34 583.96 5 356.21 5 935.40 County - Marin Franchisors' Group Marl. S 26.54 55.20 $ 86.12 N/A NIA $ 356.00 929.61 City of C..Pb.1 It Santa Clara 5 21.08 42,16 S 63.24 S 105.55 319.64 5 211.10 S 63918 City of Cupertino" Santa Clara $ 21.33 4266 S 63.99 S 124.40 $ 373.23 S 199.05 597,14 City of Los Altos Santa Clara S 28.11 S 5623 $ 84.34 S 110.31 $ 330.94 $ 330.94 S 992.82 City of Mania Serena' Santa Clara $ 25.29 S 5057 5 75.86 $ 144.56 5 437.85 $ 289.12 S 875.70 Ci ty of Mountain Vi-- Santa Clara $ 19.95 37.90 $ 56.135 $ 102.75 $ 308.35 $ 291.10 S 839..55 City of Pal. Alt. Santa Clara $ 32.96 67.84 $ 101.76 S 209.04® $ 562.20® S 480.38 S 1,386.17 City of San Jose Santa Clara S 27.50 $ 55,00 $ E12.50 N/A NIA N/A N/A City of Santa Clara Santa Clara 20.65 S 30.W 5 39.55 S 60.86 $ 176.08 $ 170.45 5 483.76 City of Sunnyvale Santa Clara S 28.70 S 3505 $ 41.40 5 115.00 S 34499 S 288.59 5 865.77 City of Saratoga' Santa Clara 5 22.44 S 44.06 S 67.33 S 142.70 $ 432.40 $ 285.40 S 864.81 Town of Los Altus Hills Santa Clara 5 34.65 S 69,30 S 103.94 $ 87.24 $ 183.71 S 136.50 S 31918 Town of Los G.t.,t' Santa Clara S 20.62 S 4124 $ 61.86 115.98 S 351.33 S 231.97 70267 ' 1 cu yd containers not available. Rates reflected hereare for 1.5 cu.Vds. 2 City has one rate for unlimited residential solid waste callection from customer -provided containers 'Largest residential can Is 45 gallon 4 Smallest Commercial Bin Is 2 yd. 'Largest commercial bin is 2 yards. J Ln o+ I I to N Ln I iol- UD N I I I C ii1- I i ' N Nv � .Ln ai N I 1 I cn i& 1!0 o a I I M I ' I c O C u p P4 I N iiF , � l(2 -0 aJ 01 I I � ' I I I N I I I I ' I o I I I ' rz N I ' I I I ' I I I 1 I oo I ' '" ' N I I I 1 � 1 ' I ' I 1 I I ' N N LI I to I I I I 0 0 0 0 0 0 CD CD� -U+� LRUOW .aad $ CL c o cL� C7 1 L O c An 7 L O U U c ro Li 0 3 7 o_ Y J O .T+ U Mn C M U tn ro c io ul �o J �4) N=. (O C (O 0 U c O MA (a `J O_ Ln O N a, ru o� u 41 QjE O (� y 3 tn O u O t0 � U CU fD CU c E N E O LA U `J -O o m m LA O c aJ in - aJ .2 E a, D" vim, ai Q > �. o r C: ai E u u Q C _O O U Y Gl O 3 L CL w E H L R } U_ U M R �U L E E O U L w d.� f 0 0 0 0 0 0 0 0 CD N � LL CD M N CD O M M M M M M M M if} ift ift if)- iii ift iff- i!4 44UOW JOd $ s v C O u O w. O C 3r O CL Ln Y rn J O CJ r� C u Ll �o f0 Lo rn J f w m C ro V) 4- 0 Z - u c v E LnQ v Ln rru 3 O O m C: v v L �3 ----------------- \ �k� \) f7 ! \ - _ k ( / /- � ) . , ( ( , ; ) E ( § i \ @ / ; E t /l IQ Marin Independent Journal Legal No 0003825330 CITY OF SAN RAFAEL 150 Alameda del Prado NOTICE OF Pt18LIC Wfll 6 PO Box 6150 Novato, California 94948.1535 The City Council of the City of S an Rafael will hold a public hearing: (415) 382-7335 PURP05E: legals@marinij corn Public Hearing: To consider a request by Marin Sanitary Service for a rate increase for refuse col- lection and recycling services and adaption of Resolution amending agreement setting maximum rates for the year 2011. SAN RAFAEL,CITY OF MondaYl FMebpuAr 7,2011,at8:00p.m. PO BOX 151560/CITY CLERK, DEPT OF PUBLIC %FifhAvenCouncil amber, 1400 Fifth Avenue, San Rafael WORKS,1400 FIFTH AVE WHAT WILL HAPPEN: SAN RAFAEL CA 94915-1560 You may comment on the proposedResolution, The City Council will consider all public testimony and will then decide whether to approve the Res- olution. PROOF OF PUBLICATION IF YOU CANNOT ATTEND: You may send a letter to Esther C.Beirne, City Clerk, Clty of San Rafael, P.O. Box 151560, San Rafael, Cd 94915-1560. You may hand 2015.5 C.C.P. also deliver a letter to the City Clerk prior to the meeting. FOR MORE INFORMATION: STATE OF CALIFORNIA You may contact Stephanie Lovette, Economic Development Coordinator, at (415) 485-3383. Office hours are Monday through Friday, 8:30 am. to 5:00 County of Marin pm. SAN RAFAEL CITY COUNCIL /s/ ESTHER C. BEIRNE FILE NO. 0003825330 ESTHER C. BEIRNE, City Clerk no. 27 Jan. 21, 28, 2011 I am a citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years, and not a party to or interested in the above matter. I am the principal clerk of the printer of the MARIN INDEPENDENT JOURNAL, a newspaper of general circulation, printed and published daily in the County of Marin, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of the County of Marin, State of California, under date of FEBRUARY 7, 1955, CASE NUMBER 25566; that the notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit 1/21/2011, 1/28/2011 1 certify (or declare) under the penalty of perjury that the foregoing i5 true and correct 31t day of January, 2011. Da?te'dy Athis 14_s Signature PROOF OF PUBLICATION EXHIBIT E CITY OF SAN RAFAEL ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. 11 SRRA / SRCC AGENDA ITEM NO.All—P DATE OF MEETING: 2/7/2011 FROM: _Stephanie Lovette DEPARTMENT: Economic Development DATE TITLE OF DOCUMENT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ESTABLISHING MAXIMUM RATES COLLECTED BY MARIN SANITARY SERVICE FOR REFUSE AND RECYCLABLE MATERIAL COLLECTION AND DISPOSAL SERVICES, TO BE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. Department Hea (signature) *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL / AGENCY APPROVED AS TO FORM: AGENDA ITEM: City Manag (signature) City Attorney (signature) NOT APPROVED REMARKS: City of San Rafael City Council Contact Form Thank you for visiting the City of San Rafael website. This form is available to facilitate contacting our Mayor and Councilmembers concerning topics of interest to the community. Please contact the City Manager's office at 415-485-3070 for any additional assistance. * First Name steve * Last Name ziman Address 1 Address 2 City san rafael State ca Zip Code 94901 Phone Number * Email Address * Send email to (select one) Mayor Albert J. Boro * Please enter your questions/comments below I am writing to support the item to approve the rate increase for MSS (Resolution Establishing Maximum Rates Collected by Marin Sanitary Service for Refuse and Recyclable Material Collection and Disposal Services to be Effective Retroactively to January 1, 2011 (CM). As a relatively new resident of San Rafael, I was surprised and disappointed that we did not have such a program in place. Having lived in San Francisco for 35 years prior to my move, I can speak first hand how their program reduced the overall waste going into my garbage can. Moreover, given the size of my yard in San Francisco and my yard now, which is at least three times as large, twice a month collection of our green cans just is insufficient. I urge you and the Council to support this rate hike. City of San Rafael City Council Contact Form Thank you for visiting the City of San Rafael website. This form is available to facilitate contacting our Mayor and Councilmembers concerning topics of interest to the community. Please contact the City Manager's office at 415-485-3070 for any additional assistance. * First Name Lisa * Last Name Moskow Address 1 Address 2 City San Rafael State Zip Code 94901 Phone Number * Email Address * Send email to (select one) Councilmember Barbara Heller * Please enter your questions/comments below We would like the "smart" meter issue to be on the city council agenda. We would like the city council to officially endorse Huffman's AB 37 bill in the state legislature. M RESOLUTION NO. 13104 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ESTABLISHING MAXIMUM RATES COLLECTED BY MARIN SANITARY SERVICE FOR REFUSE AND RECYCLABLE MATERIAL COLLECTION AND DISPOSAL SERVICES, TO BE EFFECTIVE RETROACTIVELY TO JANUARY 1, 2011. WHEREAS, the City of San Rafael and Marin Sanitary Service have entered into a written Amendment and Restatement Agreement dated September 4, 2001; and WHEREAS, Section 3(B) of the Amendment and Restatement Agreement provides for maximum rates allowed to be collected by Marin Sanitary Service to be amended from time to time by the City Council; and; WHEREAS, Exhibit "C" of the Amendment and Restatement Agreement provides for approved rate setting tables, as amended, to be included as part of this Agreement; and; WHEREAS, Marin Sanitary Service has submitted a rate application request using the methodology outlined under Section 3(A) of the Amendment and Restatement Agreement; and WHEREAS, the City of San Rafael has conducted a review of said rate application and produced a report recommending some rate and fee adjustments, and WHEREAS, the City of San Rafael has determined that such rate and fee adjustments are proper, in the best interest of all citizens, and will promote public health, safety and welfare. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES RESOLVE, DETERMINE AND ORDER AS FOLLOWS: The following schedule of maximum rates and fees, attached hereto as "Exhibit C' are hereby approved to be collected by Marin Sanitary Service for refuse and recyclable material collection and disposal services, to be effective, retroactive to January 1, 2011. Said "Exhibit C" shall be incorporated as the revised "Exhibit C' and shall be included as part of the Amendment and Restated Agreement dated September 4, 2001. I, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Tuesday, the 7th of February, 2011, by the following vote, to wit; AYES: Councilmembers: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: Councilmembers: None ABSENT: Councilmembers: None ESTHER C. BEIRNE, City Clerk