Residential Rates

The residential rate paid by a resident of Allen to the City of Allen for typical solid waste and household hazardous waste (HHW) 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 franchised 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 2018, showed a CPI increase of 2.9%.  This CPI translates to an increase in the City's monthly payment to CWD for residential services of $0.21 per month per home served.  CWD's expenses for yard waste and brush collection has decreased by $0.02 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 $0.19 per residential account per month.

The increase also results in additional payments to CWD of $0.12 for each additional trash poly cart per month, and $0.06 for each additional recycle poly cart per month.  The customer charges for additional residential trash and recycle poly carts are allowed to increase by the CPI factor.

The CPI adjustment also applies to reimbursement for lost 95-gallon poly carts. The new replacement cost is up $2.25 to $79.96 for replacing a lost cart.  Carts are replaced due to normal wear and tear at no expense to the customer.

The City discounts the current waste services rates (trash, recycling, and HHW) by 20 percent for senior citizens beginning at age 65.  The new Rate Resolution reflects the continuation of this discounted cost.  This savings currently generates about $86,000 in annual cost savings to Allen seniors.

The net change to CWD's payments from the City is an increase in charges to the City of about $66,000 in the next year.  Staff will accommodate this in the FY 18-19 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 the proposed 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, costs are adjusted monthly based on the VFAF Table in the Rate Resolution.  When in effect, the VFAF causes an increase in commercial fees.  Beginning June 1, 2018, the VFAF is not initiated until diesel fuel prices are above $4.50 per gallon.  The Diesel fuel prices as reflected on the current US Department of Energy (DOE) report on diesel fuel prices reflects a cost of $2.94 per gallon.  There currently exists a $1.56 buffer between current DOE cost and the cost where a diesel fuel VFAF would again come into effect ($4.50-$2.94 = $1.56 buffer).  However, should diesel fuel prices exceed the $4.50 level, passing along the VFAF is automatic based on current 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 typical residential waste services rates to customers.  The costs for extra residential 95-gallon poly carts and for replacing lost trash or recycling poly carts does go up by the CPI increase.  The adjustments on the proposed resolution reflect the CPI driven increase in payments to CWD for residential charges.  Our last residential rate increase for typical services (one trash and one recycle cart) was on June 1, 2010.

Staff projects that the Solid Waste Fund will maintain its fund reserve above 120 days of reserve through the end of FY18.  This is despite the fund absorbing the CPI driven additional residential service fees paid to CWD, but not passing a rate increase along to our citizens.  This fact is in large part driven by the North Texas Municipal Water District providing stable disposal fees for many years.

Staff recommends the City Council approve the attached resolution that sets new rates and fees for commercial and residential solid waste, recycling, and household hazardous waste services.

I make a motion to adopt Resolution No. _______________ that sets new rates and fees for commercial and residential solid waste, recycling, and household hazardous waste services.