Residential Rates
The residential rate paid by a resident to the City of Allen for typical solid waste and household hazardous waste (HHW) services is currently $15.59 per month. There are no changes proposed to this rate.
Residential rates paid by the City to Community Waste Disposal (CWD), the City's franchised waste services provider, are subject to rate adjustments driven by the Department of Labor Annual Consumer Price Index (CPI). The Department of Labor CPI for the one-year period ending March 2020, showed a CPI increase of 1.0 percent.
This CPI translates to an increase in the City's monthly payment to CWD for residential services of $0.08 per month per home served. The City also reimburses CWD for the disposal of home yard wastes for composting. The cost adjustment for this service is based on "compostable" tons taken to the transfer station. This compost adjustment is a $0.03 per month increase per home served. In total, CWD's reimbursement for residential services is increasing $0.11 per month.
The CPI increase raises the payments to CWD for each additional trash poly cart by $0.04 per month, and for each additional recycle poly cart by $0.02 per month.
The CPI adjustment also applies to reimbursement for lost 95-gallon poly carts. The new replacement cost increases by $0.71 bringing the cost to $82.94 for replacing a lost cart. CWD replaces trash and recycling carts due to "fair wear and tear" at no expense to the customer.
The total 12-month cost adjustment for CWD payments due to CPI payment adjustments is about a $40,000 expense increase in the next 12-months.
The City discounts the current residential waste services rates (trash, recycling, and HHW) by 20 percent for senior citizens beginning at age 65. The proposed Rate Resolution reflects the continuation of this discounted cost. This savings currently generates about $102,408 in annual cost savings to 2,744 Allen seniors. The number of participating seniors is up by 294 in the last year.
The North Texas Municipal Water District (NTMWD) Solid Waste member cities include Allen, Plano, Richardson, McKinney and Frisco. Every member city offers slightly different waste services, so comparing charges to customers is not a direct comparison. However, the average cost for typical residential services among the five member cities is now $16.61 per month. The costs vary from $15.00 to $21.00 per month. Allen's monthly residential cost of $15.59 is very competitive with the residential charges of other NTMWD Solid Waste System Member Cities.
Commercial Rates
Commercial waste services rates to customer will increase by 1 percent based on the Department of Labor (DOL) Consumer Price Increase (CPI) increase for the last year. The new rates are shown on CWD's attached Appendix and in the new Rate Resolution that is effective June 1, 2020.
CWD directly bills commercial waste services to the customer. CWD provides a 15% franchise fee payment to the City from the charges they collect. The City programs these payments to help fund operational street maintenance to offset the wear and tear caused by commercial waste vehicles on the streets of Allen.
Besides the CPI adjustment, commercial rates are affected by changes in the waste disposal cost charged by NTMWD. The District's solid waste disposal rates have been stable at $38.25 per ton; and will continue at this level at least through Fiscal Year 2021. Therefore, there was no need to consider a disposal cost adjustment when developing the new commercial waste services rates.
Summary
Residential. The strength of the Solid Waste Fund's reserves and projected revenue and expenses allows the City to maintain the current residential waste services rates to customers despite the CPI adjusted payment increase to CWD. Our last residential rate increase for typical services (one trash cart, one recycle cart, and household hazardous waste collection) was on June 1, 2010.
Commercial. Due to favorable contract terms and the consistent NTMWD waste disposal cost, commercial costs have only increased by modest amounts since 2010. This year's small 1 percent commercial rate increase continues the trend of modest commercial rate increases.