HomeMy WebLinkAboutReso 1982-11010 11010
RESOLUTION NO.
RESOLUTION OF THE CITY OF CHULA VISTA REVISING
THE CHULA VISTA SANITARY SERVICE COLLECTION RATES
The City Council of the City of Chula Vista does hereby
resolve as follows~
WHEREAS, pursuant to Section 9 of Ordinance No. 1993
granting a franchise tO Chula Vista Sanitary Service, it is
mutually agreed that the City Council of the City of Chula Vista
shall have the authority and duty from time to time during the
term of said franchise to review, act, establish and modify the
rates and charges the Grantee may charge or collect from either
single family residential, multiple family residential, commercial
or industrial users, and
WHEREAS, in accordance with Resolution No. 11000, the
City Council has heretofore held a public hearing on Tuesday,
September 21, 1982, at the hour of 7:00 p.m. in the Council
Chambers of the City of Chula Vista to hear testimony regarding
the rate schedule charges by said Grantee for the collection and
disposal of garbage, trash and disposable material, and
WHEREAS, after hearing all such testimony and con-
sidering said testimony, the City Council finds from the evidence
submitted that the rates existing at the time of the public
hearing are insufficient and substantially at variance from those
rates for said services being performed in other communities in
San Diego County, and
WHEREAS, based upon said evidence, the City Council has
determined that said rate schedule should be increased as set
forth in Exhibit "A", attached hereto and incorporated herein by
reference as if set forth in full.
NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Chula Vista does hereby establish the rate schedule as
set forth in Exhibit "A".
BE IT FURTHER RESOLVED that said rate schedule shall be
in effect for commercial or industrial service and residential
service as of October 1, 1982.
BE IT FURTHER RESOLVED that the Chula Vista Sanitary
Service is directed to prepare for City review an audited
statement of the business operations of said company based upon
the newly adopted rate schedule on or before June 1 of each year.
Presented by Approved as to form by
Gordon K. Grant, Director George D. Lindberg, City
of Finance Attorney
ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, CALIFORNIA, this 21st day of September
19:~ 2 , by the following vote, to-wit:
AYES: Councilmen Moore, McCandliss, Scott, Cox, Malcolm
None
NAYES: Councilmen
None
ABSTAIN: Councilmen
None
ABSENT: Councilmen
~y~lo~e City of Chula Vista
~ City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) ss.
CITY OF CHULA VISTA )
I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chulo Vista, California,
DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. llOlO ,and that the some has not been amended or repealed.
DATED
(seal) City Clerk
l C
CC-660
EXHIBIT "A"
MANDAIORY
CHULA VISTA SANITARY SERVICE, INC.
Hand Pickup Rate Schedule
10/1/82
Amount of Old % of New
Type of Service Increase Rate Increase Rate
Family Residential Properties .20 5.40 3.70 5.60
The second and for each additional
residential unit in multiple dwelling
which do not exceed four units .45 3.55 12.68 4.00
For con~ercial, industrial and large
multiple users the following:
RUBBISH ONLY: Commercial or Industrial Establishments
Up to (2) 40 Gal. containers one time weekly .80 5.40 14.81 6.20
Up to (2) 40 Gal. containers two times weekly 1.30 9.95 13.07 11.25
Up to (2) 40 Gal. containers three times weekly 1~90 14.60 13.01 16.50
*Up to (2) 40 Ga]. containers four times weekly 2.80 21.35 13.11 24.15
*Up to (2) 40 Gal. containers daily (6 days) 3.90 29.85 13.07 33.75
*These services are generally not utilized.
Additional or unusual accumulation of rubbish .40 2.90 13.79 3.30
cu. yd. cu. yd~
Trailer Parks and Motels (Central Location)
Minimum per month 1.20 9.25 12.97 10.45
Two times weekly .45 3.25/unit 12.16 3.70/unit
Three times w~ekly .55 4.05/unit 13.58 4.60/unit
Daily pick up (6 times a week) .75 5.70/unit 13.16 6.45/unit
Trailer Parks (Individual Can Service)
One collection ~eekly .50 3.50/unit 14.29 4.00/unit
T~vo col 1 ecti on s ~eekly .65 4.70/uni t 13.83 5.35/uni t
Apartment Houses (Multiple Dwelling over
4 units) ~-~ith central location
One col ] ecti on ~eekly .45 3.55/uni t 12.68 4. O0/uni t
Two collections weekly .60 4.65/unit 12.90 5.25/unit
Commercial Garbage Rates
Up to (l) 30 gal. container two
collections weekly 1.40 10.70 13.08 12.10
Up to (1) 30 gal. container
three collections ~.~eekly 2.00 15.35 13.03 17.35
Up to (1) 30 gal. container daily (6' days) 5.85 44.95 13.01 50.80
Up to (2) 30 gal. containers three
collections weekly 4.85 37.25 13.02 42.10
Up to (2) 30 gal. containers daily (6 days) ll.60 89.10 13.02 100.70
Exhibit ~A"
NON-MANDATORY
CHULA VIS!A SANITARY SERVICE, INC.
Hand Pickup Rate Schedule
10/1/82
Amount of Old % of Ne~
Type of Service Increase Rate Increase Rate
Family Residential Properties .54 5.40 lO.O 5.94
The second and for each additional'
residential unit in multiple dwelling
which do not exceed four units .45 3.55 12.68 4.00
For co~ercial, industrial and large
multiple users the following:
RUBBISH ONLY: Commercial or Industrial Establishments
Up to (2) 40 Gal. containers one ti~e weekly .80 5.40 14.81 6.20
Up to (2) 40 Gal. containers two times weekly 1.30 9.95 13.07 11.25
Up to (2) 40 Gal. containers three times weekly 1.90 14.60 13.01 16.50
*Up to (2) 40 Gal. containers four times weekly 2.80 21.35 13.11 24.15
*Up to (2) 40 Gal. containers daily (6 days) 3.90 29.85 13.07 33.75
*These services are generally not utilized.
Additional or unusual accumulation of rubbish .40 2.90 .13.79 3.30
cu. yd. cu. yd.
Trailer Parks and Motels (Central Location)
Minimum per month 1.20 9.25 12.97 10.45
Two times weekly .45 3.25/unit 12.16 3.70/unit
Three times weekly .55 4.05/unit 13.58 4.60/unit
Daily pick up {6 times a week) .75 5.70/unit 13.16 6.45/unit
Trailer Parks (Individual Can Service)
One collection ~eekly .50 3.50/unit 14.29' 4.00/unit
Two collections weekly .65 4.70/unit 13.83 5.35/unit
Apartl~ent Houses (Multiple Dwelling over
4 units)with central location
One collection weekly .45 3.55/unit 12.68 4.00/unit
Two collections weekly .60 4.65/unit 12.90 5.25/unit
Commercial Garbage Rates
Up to (1) 30 gal. container two
collections weekly 1.40 10.70 13.08 12.10
Up to (1) 30 gal. container
three collections weekly 2.00 15.35 13.03 17.35
Up to (1) 30 gal. container daily (6 days) 5.85 44.95 13.01 50.80
Up to (2) 30 gal. containers three
collections weekly 4.85 37.25 13.02 42.10
Up to (2) 30 gal. containers daily (6 days) 11.60 89.10 13.02 100.70
September 14, 1982
To: Lane Cole, City Manager
Via: Eugene R. Asmus, Assistant City Manager
From: Gordon K. Grant, Director of Finance
Subject: Rate Study - Chula Vista Sanitary Service, Inc.
The Finance Department has completed a rate study for the Chula Vista Sanitary
Service in order to determine if the requested rate increase by the company
was justified. The rate study was based on an examination of the audited
financial statements for the fiscal years ended March 31, 1980, 1981, and
1982. Projections for 1983 were also reviewed.
It is my recommendation that the City adopt the proposed new rates as shown on
Exhibit VI effective October l, 1982. The new rates will. give the company a
return on investment in the 9% - 10% range considered appropriate in previous
rate reviews and result in rates that are comparable and competitive with
current rates in surrounding cities.
The following exhibits have been prepared to provide the information I feel is
necessary to consider the adoption of the proposed new rates:
Exhibit I - Comparative Summary of Income Statements
This schedule shows fiscal years 1980, 1981, 1982 actual return on
investment and the projected return for 1983. The 7.72% return shown for
fiscal year 1982 resulted primarily from the following factors:
1. Income increased by 13.4% as a result of the 8% rate increase
approved by the City Council on August l, 1981.
2. Total expenses increased by 20.8% compared to the 13.1% increase in
fiscal year 1981. This was due principally to the following:
A. Landfill fees increased by 44.7% in fiscal year 1982 as compared
to the 7.5% increase in fiscal year 1981. This was due to the
40% increase i n landfill fees approved by the County Board of
Supervisors on July l, 1981.
I,'~- i/~/0
Lane Cole -2- September 14, 1982 ~
B. Depreciation increased 21.6% as a result of the purchase of the
following new equipment.
4 New Trucks $356,318
Containers 14,371
Automobiles and Other Vehicles 9,150
Communication Equipment 4,335
Compactors 9,841 $394,015
C. Miscellaneous expenses increased by 18.7% due mainly to
increases in interest expense and vehicle related expenses.
D. Payroll taxes and employee benefits increased by 41.8% due to
increases in Social Security taxes and Group Insurance totaling
32%.
The projection for the 1982-83 fiscal year for mandatory and non-mandatory
service is based on six months of actual experience and six months
estimated if the new rates are approved effective October l, 1982.
As shown on Exhibit I, the return on investment is projected to decrease
compared to fiscal year 1981-82. This is because the requested rate
increase will be in effect for six months during fiscal year 1982-83 --
instead of eight months as in the previous fiscal year. We feel that
projected expenditures are conservative when compared to fiscal years 1980
and 1981. If actual expenditures exceed our projections, the return on
investment will be lower.
The single largest increase in expenses in fiscal year 1982-83 is in
insurance. This is due to the additional coverage needed for the four new
trucks purchased during 1981-82.
Exhibit II - Analysis of Miscellaneous Expense
The projected growth in miscellaneous expenses in fiscal year 1982-83 over
fiscal year 1981-82 for non-mandatory and mandatory service is estimated
at 8% and 11% respectively.
In both the non-mandatory and mandatory service expenses to maintain
vehicles and the substantial increase in franchise fees from 2% to 4-1/2%
to the City represent most of the projected increases.
Exhibit III- Income and Expense Analysis
The proposed new rates to realize the projected income for commercial or
industrial were used based on a comparative review made with other
sanitation companies in the surrounding area and found to be competitive.
X- If of O
Lane Cole -3- September 14, 1982
The only undetermined rate to yield a 9%-10% return on investment is for
single family residences. Mandatory rates for residential service for
fiscal year 1983 would have to be $6.42 for a 9% return and $6.64 for a
10% return.
Non-mandatory rates for residential would have to be $6.70 for a 9% return
and $6.94 for a 10% return. Both rates are higher than the $5.94 and
$5.60/month rate requested by the Company.
Exhibit IV - Calculation of Return-on-Investment
The proposed new rates, if approved, would be effective for only six
months of the company's fiscal year and therefore results in a projected
return on investment of 5.39% for non-mandatory service and 3.66% for
mandatory service. On an ann,ualized basis the estimated rate of return on
investment would be 10.78% for non-mandatory service and 7.32% for
mandatory service.
Exhibit V - Comparative Analysis of Residential Service Rates
The last rate increase for the seven cities surveyed was on July 1, 1981,
and no increases are proposed for 1982.
The average residential rate in the cities surveyed is $5.82 per month.
Our $5.94 or $5.60 per month rate will be comparable to the prevailing
rates in the other cities.
Exhibit VI - Chula Vista Sanitary Service, Inc. Proposed Rate Schedule
The schedule shows the old and new rates for both the mandatory and
non-mandatory service based on the proposed rate increase.
GG: nr
WPC 0039G
Exhibit III
CHULA VISTA SANITARY SERVICE, INC.
INCOHE-EXPENSE ANALYSIS
FISCAL YEAR 3/31/82
MANDATORY NON-MANDATORY
FISCAL YEAR 1982-1983 FISCAL YEAR 1982-1983
e 9% After e 10% After @ 9% After e 10% After
Taxes Taxes Taxes Taxes
After Tax Profit 87,384 98,172 87,384 98,172
Expenses:
Salaries & Wages 798,200 798,200 790,400 790,400
Payroll Taxes & Emp. Benefits 159,650 159,650 158,100 158,100
Landfill Fees 493,700 493,700 481,650 481,650
Depreciation 195,900 195,900 195,900 195,900
Equipment Leased 8,000 8,000 8,000 8,000
Insurance 97,400 97,400 97,400 97,400
Miscellaneous 854,300 854,300 826,750 826,750
Total Expenses 2,602,650 2,602,650 2,558,200 2,558,200
Income Tax Due 32,858 45,543 32,858 45,543
Total Expected Return Plus
Expenses 2,722,892 2,746,365 2,678,442 2,701,915
Income
Commercial & Industrial
Rubbish Collection 1,313,600 1,313,600 1,313,600 1,313,600
Contract Hauling 182,000 182,000 182,000 182,000
Total 1,495,600 1,495,600 1,495,600 1,495,600
Required Income From Single
Family Residences 699,346* 722,819' 654,896* 678,369*
Average Number of Single
Family Residences 18,150 18,150 16,295 16,295
Annual Income per Single
Family Residence 38.53 39.82 40.19 41.63
Divided by Number of Months 6 6 6 6
Rate for Single Family Residences 6.42 6.64 6.70 6.94
* Reduced by $527,946 to reflect amounts already collected.
Exhibit IV
CHULA VISTA SANITARY SERVICE, INC.
SCHEDULE OF CALCULATION OF RETURN ON INVESTMENT
FISCAL YEARS ENDED 3/31/80; 3/31/81; 3/31/82; 3/31/83
ACTUAL ACTUAL ACTUAL PROJECTED 1982-1983
1979-1980 1980-1981 1981-1982 NON-MANDATORY MANDATORY
Pre Tax Profit 48,304 183,940 68,253 46,087 30,736
Income Taxes [5,355] [58,980] -0- -O-
After Tax Profit 42,949 124,954 68,253 46,087 30,736
Total Capital Beginning
of Period 347,395 390,344 515,298 583,551 583,551
Add: After Tax Profit 42,949 124,954 68,253 46,087 30,736
Total Capital End of
Period 390,344 515,298 583,551 629,638 614,287
Long Term Debt 250,000 300,000 300,000 225,000 225,000
Basis for Calculation
of Return-on Investment 640,344 815,298 883,551 854,638 839,287
Return on Investment 42,949 124,954 68,253 46,087 30,736
Percent of Return on
Investment 6.7% 15.30% 7.72% 5.39% 3.66%
AO-/ft>lO
Exhibit VI
NON-MANDATORY
CHULA VISTA SANITARY SERVICE, INC.
Hand Pickup Rate Schedule
10/1/82
Amount of Old % of New
Type of Service Increase Rate Increase Rate
Family Residential Properties .54 5.40 10.0 5.94
The second and for each additional
residential unit in multiple dwelling
which do not exceed four units .45 3.55 12.68 4.00
For commercial, industrial and large
multiple users the following:
RUBBISH ONLY: Commercial or Industrial Establishments
Up to (2) 40 Gal. containers one time weekly .80 5.40 14.81 6.20
Up to (2) 40 Gal. containers two times weekly 1.30 9.95 13.07 11.25
Up to (2) 40 Gal. containers three times weekly 1.90 14.60 13.01 16.50
*Up to (2) 40 Gal. containers four times weekly 2.80 21.35 13.11 24.15
*Up to (2) 40 Gal. containers daily (6 days) 3.90 29.85 13.07 33.75
*These services are generally not utilized.
Additional or unusual accumulation of rubbish .40 2.90 13.79 3.30
cu. yd. cu. yd.
Trailer Parks and Motels (Central Location)
Minimum per month 1.20 9.25 12.97 10.45
Two times weekly .45 3.25/unit 12.16 3.70/unit
Three times weekly .55 4.05/unit 13.58 4.60/unit
Daily pick up (6 times a week) .75 5.70/unit 13.16 6.45/unit
Trailer Parks (Individual Can Service)
One collection weekly .50 3.50/unit 14.29 4.00/unit
Two collections weekly .65 4.70/unit 13.83 5.35/unit
Apartment Houses (Multiple Dwelling over
4 units) with central location
One collection weekly .45 3.55/unit 12.68 4.00/unit
TWO collections weekly .60 4.65/unit 12.90 5.25/unit
Commercial Garbage Rates
Up to (1) 30 gal. container two
collections weekly 1.40 10.70 13.08 12.10
Up to {1) 30 gal. container
three collections weekly 2.00 15.35 13.03 17.35
Up to (1) 30 gal. container daily (6 days) 5.85 44.95 13.01 50.80
Up to (2) 30 gal. containers three
collections weekly 4.85 37.25 13.02 42.10
Up to (2) 30 gal. containers daily (6 days) 11.60 89.10 13.02 100.70
~ -//0 lED
MANDATORY
CHULA VISTA SANITARY SERVICE, INC.
Hand Pickup Rate Schedule
10/1/82
Amount of Old % of New
Type of Service Increase Rate Increase Rate
Family Residential Properties .20 5.40 3.70 5.60
The second and for each additional
residential unit in multiple dwelling
which do not exceed four units .45 3.55 12.68 4.00
For commercial, industrial and large
multiple users the following:
RUBBISH ONLY: Commercial or Industrial Establishments
Up to (2) 40 Gal. containers one time weekly .80 5.40 14.81 6.20
Up to (2) 40 Gal. containers two times weekly 1.30 9.95 13.07 11.25
Up to (2) 40 Gal. containers three times weekly 1.90 14.60 13.01 16.50
*Up to (2) 40 Gal. containers four times weekly 2.80 21.35 13.11 24.15
*Up to {2) 40 Gal. containers daily {6 days) 3.90 29.85 13.07 33.75
*These services are generally not utilized.
Additional or unusual accumulation of rubbish .40 2.90 13.79 3.30
cu. yd. cu. yd.
Trailer Parks and Motels (Central Location)
Minimum per month 1.20 9.25 12.97 10.45
Two times weekly .45 3.25/unit 12.16 3.70/unit
Three times weekly .55 4.05/unit 13.58 4.60/unit
Daily pick up (6 times a week) .75 5.70/unit 13.16 6.45/unit
Trailer Parks {Individual Can Service)
One collection weekly .50 3.50/unit 14.29 4.00/unit
Two collections weekly .65 4.70/unit 13.83 5.35/unit
Apartment Houses (Multiple Dwelling over
4 units) with central location
One collection weekly .45 3.55/unit 12.68 4.00/unit
Two collections weekly .60 4.65/unit 12.90 5.25/unit
Commercial Garbage Rates
Up to (1) 30 gal. container two
collections weekly 1.40 10.70 13.08 12.10
Up to {1) 30 gal. container
three collections weekly 2.00 15.35 13.03 17.35
Up to (1) 30 gal. container daily (6 days) 5.85 44.95 13.01 50.80
Up to (2) 30 gal. containers three
collections weekly 4.85 37.25 13.02 42.10
Up to {2) 30 gal. containers daily (6 days) 11.60 89.10 13.02 100.70
CHULA VISTA SANITARY SERVICE, INC.
Bin Service Rates
10/1/82
OLD MINIMUM NEW MINIMUM OLD MAXIMUM NEW MAXIMUM
WEEKLY YARDS AMOUNT OF % OF AMOUNT OF % OF
~NS PICKUP MONTHLY PRICE INCREASE PRICE INCREASE PRICE INCREASE PRICE INCREAS
1 13 30.00 3.00 33.00 lO.O0 36.25 3.65 39.90 lO.O
2 26 51.25 5.15 56.40 10.05 59.50 5.95 65.45 10.0
3 39 71.25 7.15 78.40 10.04 83.50 8.35 91.85 10.0
4 52 93.00 9.30 102.30 10.00 108.50 10.85 119.35 lO.O,
5 65 114.50 11.45 125.95 lO.O0 134.00 13.40 147.40 10.0,
6 78 140.50 14.05 154.55 lO. O0 161.75 16.20 177.95 lO.O
7 91 162.00 16.20 178.20 10.00 188.00 18.80 206.80 lO.O~
1 26 55.00 7.15 62.15 13.00 63.25 8.25 71.50 13.0,
2 52 100.50 10.05 110.55 lO.O0 110.25 ll.05 121.30
3 78 129.50 16.85 146.35 13.01 145.75 18.95 164.70 13.0~
4 104 163.00 21.20 184.20 13.01 187.50 24.40 211.90 13.0'
5 130 196.50 25.55 222.05 13.00 227.25 29.55 256.80 13.0m
6 156 242.00 31.45 273.45 13.00 277.25 36.05 313.30 13.0m
7 182 283.00 36.80 319.80 13.00 324.00 42.10 366.10 12.9!
1 39 77.75 11.65 89.40 14.98 90.75 13.60 104.35 14.9!
2 78 131.75 19.65 151.50 14.91 149.25 22.40 171.65 15.0'
3 ll7 179.25 26.90 206.15 15.01 223.00 33.45 256.45 15.0(
4 156 226.75 34.00 260.75 14.99 260.00 39.00 299.00 15.0(
5 195 276.50 41.50 318.00 15.01 319.00 47.85 366.85 15.0(
6 233 340.25 51.05 391.30 15.00 372.00 55.80 427.80 15.0(
7 274 388.75 58.30 447.05 15.00 451.50 67.75 519.25 15.0i
1 52 lOl.O0 15.15 116.15 15.00 118.25 17.75 136.00 15.01
2 104 166.25 24.95 191.20 15.01 188.25 28.25 216.50 15.01
3 156 229.50 34.45 263.95 15.01 262.75 39.40 302.15 15.0(
4 208 291.50 43.75 335.25 15.01 331.50 49,75 381.25 15.01
5 260 356.50 53.50 410.00 15.01 406.00 60.90 466.90 15.0(
6 312 442.75 66.40 509.15 15.00 513.25 77.00 590.25 15.0(
7 364 496.75 74.50 571.25 15.00 569.50 85.45 654.95 15.0(
1 65 123.00 18.45 141.45 15.00 144.50 21.70 166.20 15.0~
2 130 205.25 30.80 236.05 15.01 231.00 34.65 265.65 15.0(
3 195 280.75 42.10 322.85 15.00 299.00 44.85 343.85 15.0(
4 260 356.50 53.50 410.00 15.01 404.00 60.60 464.60 15.0(
5 325 442.75 66.40 509.15 15.00 534.75 80.25 615.00 15.01
6 409 556.25 83.45 639.70 15.00 646.50 96.98 743.48 15.0[
7 455 610.25 9t.55 701.80 15.00 702.50 105.40 807.90 15.0(
1 78 147.00 22.05 169.05 15.00 171.00 25.65 196.65 15.0C
2 156 237.50 35.65 273.15 15.01 271.50 40.75 312.25 15.01
3 234 326.25 48.95 375.20 15.00 372.00 55.80 427.80 15.0C
4 312 415.75 62.35 478.10 15.00 486.00 72.90 558.90 15.0C
5 398 540.00 81.00 621.00 15.00 61g.50 92.95 712.45 15.0C
6 488 669.50 100.45 769.95 15.00 768.00 115.20 883.20 15.0C
7 568 734.50 110.20 844.70 15.00 891.00 133.65 1024.65 15.0C
~rage increase for minimum price = 13.7638%
~rage increase for maximum price = 13.7674%
i~- ffO{~3