- Meeting Date:
- 05/31/2016
- From:
- Patrick Bourque, Public Works Section Director
Information
TITLE:
RECOMMENDED ACTION:
2) Read Ordinance No. 2016-26 by title only for the final time
3) City Clerk reads Ordinance No. 2016-26 by title only (if approved above)
4) Adopt Ordinance No. 2016-26
Executive Summary:
Historically, Multifamily Residential Properties have been considered residential properties that were serviced by the City. The rates for service have been the same as commercial customers because of the type of containers used to service them. Those rates were established using a flat, across the board calculation for a per yard cost recovery. Solid Waste performed an evaluation of our routes, comparing the service time of standard commercial accounts to the service time of multifamily residential accounts. We discovered that, due to the efficiencies created by having multiple containers at one service address, we gain efficiencies in service time for multifamily residential properties, allowing for consideration of a rate structure that better accounts for collection density and waste volume.
In addition there are a number of proposed general revisions to the Solid Waste Code proposed that will update antiquated language, such as the rate escalator provision, improve and include definitions related to current operations, and include the residential glass collection guidelines, which are currently practiced but not addressed in the current code.
Financial Impact:
Solid Waste is recommending that we adjust our rates to allow for this efficiency and to remain competitive. As we adjust multifamily residential rates to remain competitive with collections, the estimated collection revenue reduction is approximately $66,000/year, if all accounts are retained and no new accounts are obtained. Competition created by Legislation may also create some account loss.
Under the current collections structure, Multifamily Residential customers comprise 46 percent of its total commercial tonnage taken into the landfill, generating an estimated tipping fee of $560,000 per year. Losing all multifamily residential collections runs the risk of dropping our waste tonnage collected at the landfill below our break-even tonnage target.
Connection to Council Goal and/or Regional Plan:
Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics.
Has There Been Previous Council Decision on This:
Options and Alternatives:
Background/History:
Historically, the City has been responsible for solid waste collection to all residential properties in the city. On April 1st, 2015 the Governor signed into law legislation amending Arizona Revised Statutes Section 49-746 establishing Multifamily Residential Properties as its own class of customer similar to commercial accounts. The amendment allows private waste haulers the opportunity to compete for solid waste collection services to Multifamily Residential Properties. This law goes into effect June 30, 2016.
Here is the complete legislation:
1 Be it enacted by the Legislature of the State of Arizona:
2 Section 1. Section 49-746, Arizona Revised Statutes, is amended to
3 read:
4 49-746. Private enterprise recycling and solid waste
5 management; definitions
6 A. A municipality of this state shall not prohibit or unreasonably
7 restrain a private enterprise from delivering RECYCLING OR SOLID WASTE
8 MANAGEMENT SERVICES TO THE MUNICIPALITY OR TO commercial, or industrial
9 recycling services or commercial or industrial solid waste management
10 services OR MULTIFAMILY RESIDENTIAL PROPERTIES within or to the municipality.
11 B. The municipality shall prescribe rules for the delivery of
12 recycling AND SOLID WASTE MANAGEMENT services and FOR commercial, or
13 industrial solid waste management services AND MULTIFAMILY RESIDENTIAL
14 PROPERTIES that promote availability of these services and promote
15 competition in the delivery of these services.
16 C. FOR THE PURPOSES OF THIS SECTION:
17 1. "DWELLING UNIT" HAS THE SAME MEANING PRESCRIBED IN SECTION 33-1310.
18 2. "MULTIFAMILY RESIDENTIAL PROPERTIES" MEANS ANY REAL PROPERTY THAT
19 HAS ONE OR MORE STRUCTURES AND THAT CONTAINS FIVE OR MORE DWELLING UNITS FOR
20 RENT OR LEASE THAT ARE SUBJECT TO TITLE 33, CHAPTER 10.
21 Sec. 2. Effective date
22 Section 49-746, Arizona Revised Statutes, as amended by this act, is
23 effective from and after December 31, 2015.
Key Considerations:
Solid Waste performed an evaluation of our routes. We compared the service time of standard commercial accounts to the service time of multifamily residential accounts. We discovered that, due to the efficiencies created by having multiple containers at one service address, the service time for multifamily residential properties is more efficient.
Solid Waste is recommending that we adjust our rates to allow for this efficiency and to remain competitive. As we adjust multifamily residential rates to remain competitive with collections, the estimated collection revenue reduction is approximately $66,000/year, if all accounts are retained and no new accounts are obtained. Competition created by Legislation may also create some account loss.
Key Considerations For Landfill:
Under current collections structure, Multifamily Residential customers comprise 46 percent of its total commercial tonnage taken into the landfill, generating an estimated tipping fee of $560,000 per year. Losing Multifamily Residential collections runs the risk of dropping the City's daily tonnage below the landfill operation's break-even point.