Residential Rates
The residential rate paid by a resident of Allen to the City of Allen for typical solid waste and household hazardous waste services is currently $15.59 per month and there is no proposed change to this rate.
Residential rates paid by the City to Community Waste Disposal (CWD), the City's franchise waste services provider, are subject to the following annual rate increases:
- An annual Consumer Price Index (CPI) increase.
- An annual increase to compensate CWD for increased/decreased yard waste and brush collection expenses.
The Department of Labor CPI for the one-year period ending March 2017, showed a CPI increase of 2.2%. This CPI translates to an increase in the City's monthly payment to CWD for residential services of $0.16 per month per home served. CWD's expenses for yard waste and brush collection has decreased by $0.01 per month. The yard waste and brush costs reflect the savings from ending the free compost program. Combining these results is a net increase in payment to CWD of $0.15 per residential account per month.
The increase also results in additional payments to CWD of $0.09 for each additional trash poly cart per month, and $0.05 for each additional recycle poly cart per month.
The net change to CWD's charges is an increase in charges to the City of about $55,000 in Fiscal Year 2018 that will be accommodated in the budget process. CWD's Market Adjustment letter is provided as an attachment.
Commercial Rates
There are no proposed changes to commercial waste services fees in this Rate Resolution.
Commercial waste services accounts are billed directly to the customer by CWD. CWD then provides a payment to the City from the funds they collect to reimburse the Solid Waste Fund for waste disposal costs and provide the City a 15% franchise fee payment on commercial services.
According to the current CWD contract that runs through May 31, 2019, commercial rates are only affected by two factors:
- Adjustment to the disposal cost component of CWD's charges that is charged by the North Texas Municipal Water District. City Staff dictates the disposal costs that CWD collects from commercial customers in the Rate Resolution. Because NTMWD's solid waste rates have leveled out at $38.25 per ton and the fact that the Solid Waste's Fund Reserve is healthy, there is no need to consider a disposal cost adjustment this year.
- The City's contract with CWD allows for a Variable Fuel Adjustment Fee (VFAF). When VFAF is in effect, it is adjusted monthly and causes an increase in commercial fees. Beginning June 1, 2017, the VFAF is not initiated until diesel fuel prices are above $4.45 per gallon. The April 25, 2017, US Department of Energy (DOE) report on diesel fuel prices reflects a cost of $2.23 per gallon. There is a considerable buffer before a diesel fuel VFAF would again come into effect ($4.45-$2.23 = $2.22 buffer). However, should diesel fuel process exceed the $4.45 level, passing along the VFAF is automatic based on contract terms. The VFAF Table is provided in the Rate Resolution.
Summary
The strength of the Solid Waste Fund's fund reserve and projected revenue and expenses allows the City to maintain current commercial and residential waste services rates except for the cost of replacing lost trash or recycling poly carts. The adjustments on the proposed ordinance reflect the CPI driven increase in payments to CWD for residential charges and the new poly cart reimbursement costs.