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. On the utility bill, this charge appears as $15.02 for solid waste service and $0.57 for HHW services.  There are no changes proposed in the proposed rate resolution to the residential rate charged to citizens.  $15.59 has been the residential waste services rate since June of 2010.  

Seventy-four (74) percent of waste services revenues go to pay two (2) large operational costs. First, they pay the North Texas Municipal Water District (NTMWD) for waste disposal costs that fund the operation of the Transfer Stations and the Regional Disposal Facility.  Second, the funds pay Community Waste Disposal (CWD), the City's franchised waste services provider for trash, recycle, yard waste, and bulk waste collections.  Our current contract with CWD runs through May 31, 2024.  CWD has provided Allen's waste services since 1997.
 
Residential waste services paid to CWD are contractually 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 annually in March 2021 for all goods and services in the Dallas, Fort Worth, and Arlington area is the basis for cost adjustments.  For the one-year period ending March 31, 2021, the indicator showed a CPI increase of 3.4 percent.  
 
This CPI translates to an increase in the City's monthly payment to CWD for residential services of $0.26 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 $0.29 per month, from $7.63 to $7.92 per month.  For the year beginning June 1, 2021, when the new rate resolution takes effect, this represents about a $104,000 increase in payments to CWD. 
 
The CPI increase raises the payments to CWD for each additional trash poly cart by $0.15 per month, and for each additional recycle poly cart by $0.08 per month.
 
The CPI adjustment also applies to reimbursement for lost 95-gallon poly carts. The new replacement cost increases by $2.82 bringing the cost to $85.75 for replacing a lost cart. CWD replaces trash and recycling carts due to "fair wear and tear" at no expense to the customer.
  
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 $109,512 in annual cost savings to 2,925 Allen seniors. The number of participating seniors is up by 181 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 residential 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 $17.33 per month. The costs vary from $15.59 to $19.40 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 paid by customers directly to CWD are also contractually subject to rate adjustments driven by the Department of Labor Annual Consumer Price Index (CPI).  Commercial waste services rates to customer will increase by 3.4 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 attachment and in the new Rate Resolution that is effective June 1, 2021.

CWD provides a 15% franchise fee payment to the City's General Fund from the commercial waste charges they collect.  These payments help fund operational street maintenance to offset the wear and tear caused by commercial waste vehicles on the streets of Allen.

Besides the Franchised Waste Services provider's CPI adjustment, commercial rates can also be 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 through Fiscal Year 2022.  Therefore, there was no need to consider a disposal cost adjustment when developing the new commercial waste services rates that become effective June 1, 2021.

Summary

Residential. The strength of the Solid Waste Fund's reserves and projected revenue and expenses for FY22 allows the City to maintain the current residential waste services rates to customers despite the CPI adjusted payment increases 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 3.4 percent commercial rate increase is the largest since 2010. 

Staff projects that the residential rate changes will increase the Solid Waste Fund expenses to pay CWD by about $104,000 in the next 12-month period.  The Solid Waste Fund will maintain its fund reserve at the upper end of the guideline 90 to 120 days of reserve through the end of FY21.

Staff recommends that the City Council adopt a Resolution establishing rates and fees for commercial and residential solid waste, recycling, and household hazardous waste services.

I make a motion to adopt Resolution No. ________________ establishing rates and fees for commercial and residential solid waste, recycling, and household hazardous waste services.