HomeMy WebLinkAboutAgenda Statement 1978/09/12 Item 10CITY OF CHULA VISTA
COUNCIL AGENDA STATEMENT
Item No. 10
For meeting of 9/12/78
ITEM TITLE
SUBMITTED BY
ITEM EXPLANATION
(4/5TH'S VOTE REQUIRED YES NO x )
Resolution No. 9247 set September 12, 1978 as the date for consideration of
Chula Vista Sanitary Service's request fora rate increase. Staff has
concluded its rate study and our findings are contained in the attached report.
Chula Vista Sanitary Service requested a rate increase for its service to
residents based on the 80% increase in landfull fees, effective October 1,
1978, a 6% labor cost increase, effective August 1, 1978, and general
operating cost increases since the last rate increase was granted on
September 1, 1977.
The Finance Office examined the audited financial statements, the projections
for the fiscal years ending March 31, 1979, and March 31, 1980, and supporting
material presented by Chula Vista Sanitary Service on September 1, 1978. Based
on this review, this Office completed a rate study which indicates that the
new rate schedule is justified.
Agreement
Resolution x
EXHIBITS -
Ordinance
Plat Notification List
Other Reoort ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
N/A
STAFF RECOMMENDATION
Approval.
BOARD/COMMISSION RECOMMENDATION
N/A
COUNCIL ACTION
Uy tf~ `Cite CC~InCii cif
Ch~ria Vista, C~~;forria
~~ ~
Dated '' ~.2 ~P
Resolution ~ ~ ~~1Revising the Chula Vista Sanitary Service's Collection
Rates and Establishing a New Schedule
Public Hearing - Consideration of Rate Increase for Chula Vista Sanitary
Service
Acting Director of Finance
F o rm A-113 (Rev. 5/77)
i
DEPARTMENTAL CORRESPONDENCE '
DATE : September 8 , 1978
To: Lane F. Cole, City Manager
VIA: Eugene R. Asmus, As~stant City Manager
FROM: Rene P. Franken~Acting Director of Finance
SUBJECT: Rate Study - Chula Vista Sanitary Service
Chula Vista Sanitary Service has requested a rate increase for its service
to residents and commercial or industrial users based on the 80% increase in
landfill fees, effective October 1, 1978, a 6% labor cost increase, effective
?u:ust 1, 1978, and general operating cost increases since the last rate
increase was granted September 1, 1977.
The Finance Office has examined the audited financial statements for the
fiscal year ended March 31, 1978, the projection for the fiscal years
ending March 31, 1979 and March 31, 1980, and supporting material presented
by Chula Vista Sanitary Service on September 1, 1978. Based on this review,
this office completed a rate study which indicates that the new rate schedules*
representing an llq increase for residential and bin service, is justified.
This recommendation is based on the following points:
1. A 32.5 monthly increase to residents as a "pass-through" cost due to
landfill fee increases. (Exhibit I )
2. A $1.625 monthly increase for bin service as a "pass-through" cost
due to landfill fee increases. (Exhibit I }
3. An overall 6.5% increase in actual and estimated costs from March 31,
1978 to March 31, 1979, excluding landfill increases. (Exhibit II)
4. Comparative review of residential rates offered by other firms in
the sanitation field. (Exhibit III)
5. Rate of return on investment of the two largest rubbish companies:
Waste Management Inc., 10.9 as of December 31, 1977
Browning & Ferris Industries, Inc., 7.5q as of September 30, 1977
Chula Vista Sanitary Service actual return for fiscal year 1978 was
4.290; the projected returns for fiscal years 1919 and 1980 are 8.8%
and 6.6q respectively. (Exhibit IV)
* Exhibits V, VI, VII
C~,.ty o~ Chu~.a V.~b~a, Ca.2~.~ann~,a
A ~~~ 9~~ 7
Exhibit I '
Chula Vista Sanitary Service
Calculation of Residential and Bin
Service "Pass-Through" Increases
RESIDENTIAL
Increase in Landfill Fees for
Each 35 Cubic Yard Truck $ 15,00
Average Number of Units Per Truck =200.00
$ .075
Average N!~~ber of ',leeks P=~ ;n ~~ "=.__ `~'_
"Pass-T!^~^~_^~~~ ,,,,.} ~~ ~~.
Increase in Landfill Fees for
Each 35 Cubic Yard Truck $15.00
Average Number of Bins Per Truck 540.00
$ ,375
Average Number of Weeks Per Month x 4 1 3
"Pass-Through Cost $1,625
9~~ ~
Ex~hi bi t I I '
Chula Vista Sanitary Service, Inc.
Comparative Summary Income Statement
Fiscal Years Ended 3/31/78; 3/31/19; 3/31/80
Actual Projected Projected
Income 1977-78 1978-79 1979-80
Commercial $ 635,217 $ 756,460 $ 804,170
Residential 591,103 699,640 739,920
Contract Hauling 38,622 41,770 41,770
Total Income $1,264,942 $1,497,870 $1,585,860
Expenses
Salaries & Wages $ 490,177 $ 538,480 573;
Payroll Taxes &
3a?~ef":s 89;540 l01 ;640 106,110
Landfill Fees 93,796 195,990 251,990
Depreciation 87,031 65,763 65,760
Equipment Leases 4,529 4,950 4,950
Insurance 42,175 67,180 71,130
Miscellaneous 425,095 434,580 449,500
Total Expenses $1,232,443 $1,408,580 $1,519,990
Pre-Tax Profit $ 32,499 $ 89,290 $ 65,870
Income Taxes 9,575) 37,390) 24,046)
After Tax Profit $ 22,924 $ 51,900 $ 41,824
Return on Investme nt 4.2q 8.8% 6.6%
~~~ 7
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Exhibit IV
Chula Vista Sanitary Service, Inc..
Calculation of Return on Investment
Actual Projected Projected
1977-78 1978-79 1979-80
$32,499 $89,290 $65,870
9,575 37,390 24 046
$22,924 $51,900 $41,824
$267,897 $290,821 $342,721
22,924 5i,9~0 4l,°%=
Y~:v,::aj w~::u,uuG $25G,000
$540,821 $592,721 $634,545
22,924 51,900 41,824
4.20 8.8~ 6.6q
Pre Tax Profit
Income Taxes
After Tax Profit
Total Capital
Beginning of
Period
Add: After Tax rrotit
Total Capital
~.~;c ~ . Period
Long-Term uebt
Basis for Calculation
of Return on Investment
Return on Investment
Percent of Return
on Investment to
Investment
~1~~
Exhibit .V
('tII~~L:~ Vl.i'1':A ~atti`1'1':\K~~ til~;f~.A'lt'I~: iZ~1't'1~; ~C~Ill~;l)LiI.L: - Il~~~,'ll 1'1{'t~ UPS
Tape, of Se•r•eice ~~'iotei.hly lt~ltr~
~ - -
l~'antily Kc;idenii<.tl 1'r•ol>~>r•tic:~ 4.00
The ~e'cond ,cnd foi• c~.+ch ,ieicliti<~nrel r~~~irae>r:ti,+l
unit in nntltihle.• d~a~ellin~ ~1~hie~li du eu~t exct•cc.l
four units 2. 55
For c~ornnrerc.ial, industrial and large tnrtli.il~l.e
users the i'ollow irrr :
IZU13I3ISII ONLY: Cornme~rcial or .Itrciustrial I~:stal~lishments
LTp to (2) 40 gal. contains>T•:-: onr> tin<<~ w~•c>1•:i~- 4. 00
Up to (2) 40 gal. containers twu tirne5 weekly 7. 35
Up to (2) 40 gal. containers three times weekly 10. 75
'~`Up to (2) 40 gal. containers four times weekly 15. 85
'`l.~p Lo {•~/' 4~ ~"_i~. i:Lirlt:li:;l T 7 ,_,:'_ii~' iv .i. . , ._..... ~'~i
~~These services are generally not utilised.
Additional or unusual accumulations of r•ubbisli 2. 00
cu, •.:.
Trailer Parks and Motels (Central Locution)
MinirtTUm per month 6. 80
Two times weekly 2.25/unit
Three tiTneS weekly 2. 85/tTnit
Daily pick up (6 timErs <.r wcel:) 4. 00/unit
Trailer Pat•l:s (Individual Can 5crvicc~)
One collection weekly ~~ 2. 55/unit
Two collections wc~~kly 3.40/unit
Apartment houses (Multil.,le I)wr•]lin,~ ovcr• 4 ut~~it:;)
with central locatiot_i
One collection weekly 2. 55/unit
Two collections weekly 3.40/unit
COMiV1F.1tCI:'1L G:1Rf3.~~CL: lt~'I'1~:~:
Up to (1) 30 gal. container two c•ollcctions weekly
Up to (1) 30 gal. container three collections weekly
Up to (1) 30 gal. container daily (6 days)
Up to (2) 30 gal. containers thr•ee,~collections weekly
Up to 30 gal containers daily {6 days)
7. 95
11.35
34. 00
28. 35
68. 00
i~~t 7
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273
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156
`L03
260
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130
195
GGU
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309
455
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234
312
398
488
568
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WEEKLI'
PICKUPS
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Exhibit VI
1 Mll~'t~lilM~ MAXIMUM
5.5. I)U v7. 75
353. O(1 45. 50
u~l. ?;~ 63. 75
£;'i'.l.5 1 U2. 50
1(16. 75 123. 75
77. 7:i 84. `l_5
i~ 7. ? 5 1 ]..1.50
] 22.:0 143. 25
148. OU 174. 00
182. 75 '~ ~ ~'. ~5
~' i l . `i0 24i~. UU - -
5'i..;n
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2U~;. '!5 244. OU
257. 2 i '?84. Iii
203. 00 345. 50
77. 25 90. 5U
1 `~4. 50 144. 00
171.75 201.00
`~17. 75 `L 53. 75
`L67.00 310. 75
3,35. 00 392. 75
374. 25 435. ?5
`>`}. 25 110. 50
1 51.75 176. 75
208. 75 22£3. ?5
'?G5. 00 309. O0
.~r52. ri0 409.25
`1~'(-• 00 494. 50
458. 75 537. 50
111.. 75 130. 75
178.50 207.75 ^
245. 00 284. 75
311. 50 361.75
403.25 474. 00
50`?. 50 587. 50
538. 50 629.25
,;,:
•
WEEKLY
S
PICKUPS
n4UN'1'IILLY
1
13
2
26
3
39
4
26.00
5
:,3;_i. U0
6
78
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91
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6
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4
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398
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488
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568
465.00
350.75
392.75
•
()LA)
YARDS
MINIINAI!N1
n4UN'1'IILLY
MINIMIfi%l
13
:_)1.'2:
CHULA VISTA SANITARY SERVICE, INC. ~~
311 F Street
Post Office Box 967
Chula Vista, California 92012 SCA
(714) 427-7700 SERVICES
August 24, 1978
City Council
City of Chula Vista
276 Fourth Avenue
Chula Vista, Ca. 92010
~~
Gentlemen:
On August 22, 1978, the County Board of Supervisors adopted a resolu-
tion increasing landfill disposal fees 80%, effective October 1, 1978.
All of the wastes collected within the City of Chula Vista are deposited
in the county landfill, and will be subject to this increase, but we have
not yet developed the specific impact upon individual households or com-
mercial customers. In addition, the CPI for San Diego has increased
8. 2% since our last rate increase was granted.
The purpose of this letter is to request the council to schedule a public
hearing on our forthcoming rate increase request. Timely action is
required in order that any rate adjustments may be reflected in our 4th
quarter billing, which is normally prepared during the last week of Sep-
tember.
We regret this extremely short notice, but know that you are aware that
this situation is beyond our control. Please be assured that our specific
request and supporting documentation will follow at the earliest possible
time. (See attachment for approximate increases. )
Our staff is available for discussion of this issue at your convenience.
Yours truly,
~r
`~ ~ ~~
~~..
Ji~ri`~ Reid, Manager
CHULA VISTA SANITARY SERVICE, INC.
cc: Lane Cole, City Manager
atth :
~~-~ ~
1~ttachment to:
City Council
August 24, 1978
In light of the fact that we were unsure of the exact amount of the pro-
posed landfill increase by the county until August 22, we are not pre-
pared at this time to present a complete package in support of our rate
increase request. However, the 80% upward adjustment in landfill costs
and the increase in our cost of operations due to the CPI increases of
8. 2% over the past year will result in the need for additional revenue of
about 122 to 14%, or about 45~ per household.
~~F