IV.6. Proposed Refuse and Recycling Rates Increases; Harkess (CR2015-144)December 1, 2015 Council Report 2015-144
PROPOSED REFUSE AND RECYCLING RATE INCREASES
Proposed Action
Staff recommends adoption of the following resolution: Move to adopt Resolution No. 2015-092 which increases
refuse and recycling rates effective January 1, 2016.
Adoption of this motion will result in increasing the refuse rates by $1.00 per service level to $17.85 for a 30-
gallon container, $21.85 for a 60-gallon container, $25.30 for a 90-gallon container, and the recycling rate from
$4.50 to $5.00 per month effective with the January 2016 billing.
Overview
Refuse Fund
– The present refuse and recycling rates have currently do not fully fund the operation of the refuse
and recycling programs. Operating costs overall have increased from $844,713 in 2013 to an estimated $940,973
in 2016 primarily due to contractual obligations and fuel related costs. Currently the disposal fees are subsidizing
the recycling program in addition to the yard waste/leaf, bulk and brush collection programs.
Primary Issues to Consider
How will the increased rates effect the residents in the City of Hopkins?
Why is the rate increase recommended?
What are the proposed capital and equipment projects?
Staff Recommendation
To provide funding for the operation, debt and capital needs of refuse funds finance recommends approval of the
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resolution. The change in rates would take effect January 1, 2016.
Supporting Information
Resolution No. 2015-092
Refuse 2016 budget
Refuse CIP Cash Flow analysis
Christine M. Harkess, CPA, CGFM
Finance Director
Financial Impact: $55,800 refuse Budgeted: Y/N X N
Source: Refuse Fund
Related Documents (CIP, ERP, etc.): __CIP and 2016 Budget__ Notes: __ __________________
Additional Information Regarding Rate Increases
Rate Increases and Effect on Residents
Refuse & Recycling
- Refuse rates were last increased in 2013. As a result of the 2016 budget process
and an analysis of increasing operational costs of contractual arrangements and fuel related costs a
refuse rate adjustement was proposed. The rate increase will afect a residential customers at all levels
by $1.00 a month for refuse and $0.50 a month for recycling. There is no effect on businesses as the
city does not service commercial customers.
Factors impacting the Recycling budget is the loss of Hennepin County recycling grants that previously
totaled about $24,000 per year, a loss of recycling rebates as the market for recyclables has decreased a
continued increase of the recycling contract and an increase in the cost of recycling containers provided
to customers. Despite the rate increase we are still projecting an estimated loss of $21,000 in the
recycling program.
Factors impacting the disposal budget are personnel costs, vehicle parts, repairs and maintenance. In
addition the fees generated from the disposal program subsidize the bulk pick-up, yard waste and brush
programs. These programs have a nominal (bulk pick-up, yard waste) or no fee (brush pick-up) but are
a vital service provided to residents.
Why are the Rate Increases Recommended ?
The nominal rate increases are needed to fund the operations of the Refuse Fund so that we can continue
to provide these services to the residents at a reasonable rate.
What are the proposed capital improvement projects?
Refuse Fund
– Planned capital acquisitions include cost participation in the PW garage upgrade,
replacement of the overhead doors and replacement of the wash bay roof. Equipment needs over the
next five years include a swap loader scheduled for replacement in 2018. All equipment scheduled for
replacement is re-evaluated before a final commitment is made for replacement.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2015-092
REFUSE DISPOSAL AND RECYCLING RATE INCREASES
WHEREAS
, the City of Hopkins has established Ordinance No. 92-707, City Code section
605.04 which defines refuse charges for collection services; and
WHEREAS,
the ordinances authorizes refuse disposal and recycling rates to be set forth
by council resolution; and
WHEREAS,
it is estimated the present disposal and recycling rates are not sufficient to cover
current and future operating expenses for the refuse programs;
NOW, THEREFORE
, be it hereby resolved that the City Council of the City of Hopkins hereby
sets the service charge for the Refuse Disposal and Recycling Programs at the following rates to be paid
to the City upon billing therefore as follows:
The refuse rates at $17.85 for a 30 gallon container, $21.85 for a 60 gallon container; and $25.30
for a 90 gallon container.
The recycling service charge for all users on the system at $5.00 per month, per recycling unit.
EFFECTIVE DATE
: The provisions of this resolution shall be effective January 1, 2016.
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Adopted by the City Council of the City of Hopkins, Minnesota, this 1 day of December 2016.
_______________________________
Eugene J. Maxwell, Mayor
ATTEST:
___________________________________
Amy Domeier, City Clerk
DEPARTMENT - REFUSEFUND 717
REVENUE AND EXPENSE DETAIL SUMMARY
11/18/2015
ActualActualActualBudgetBudgetPercent
CODE20132014201520152016Change
REVENUES
400Charges for Services$893,583$908,441$840,851$909,700$ 6.14%965,567
356County Grant24,584 24,645 27,956 25,000 - -100.00%
370Interest Earned(1,791) 9,314 9,698 2,500 3,000 20.00%
449Recycling Rebate8,214 1,405 102 1,600 1,600
409Miscellaneous12,006 11,796 10,216 11,000 11,000
TOTAL$936,596$955,602$888,823$949,800$ 3.30%981,167
EXPENSE
Salaries and Employee Benefits
500Regular Employees168,696 164,459 157,224 224,091 230,719 2.96%
501Overtime-Regular Employees6,165 6,381 6,841 8,800 7,600 -13.64%
503Part-Time Employees19,460 16,488 17,105 17,700 18,300 3.39%
524SL Converted/LTD1,024 1,109 1,037 1,752 1,818 3.77%
525P.E.R.A. Contribution12,350 12,312 10,528 17,419 17,874 2.61%
526F.I.C.A. Contribution14,362 13,998 11,669 19,121 19,632 2.67%
527Employee Health Benefit Plan25,841 24,832 20,112 39,738 43,304 8.97%
531Workers' Compensation Insurance6,996 5,699 6,534 6,287 5,950 -5.36%
535Paid Leave Accrual2,842 2,799 2,099 2,780 2,883 3.71%
TOTAL257,737 248,076 233,149 337,688 348,080 3.08%
Materials, Supplies and Services
540Office Supplies964 942 1,144 1,250 1,250
541Uniforms/Clothing730 807 85 700 700
542General Supplies1,612 4,179 2,491 3,350 2,900 -13.43%
543Equipment & Vehicle Parts19,748 38,881 67,288 12,500 22,500 80.00%
549Motor Fuels & Lubricants23,058 21,534 16,824 21,800 22,300 2.29%
550Minor Equipment20,813 10,366 12,016 16,000 16,000
560Postage4,015 4,977 3,135 5,075 5,075
563Maint. & Repair - Equip/Vehicles9,054 24,908 535 6,000 11,500 91.67%
568Printing- - - 300 300
580Audit4,500 4,500 4,500 4,500 4,500
581Advertising and Publication- 496 (496) 1,750 1,150 -34.29%
582Expert & Professional Services- - - - -
583Other Contractual Services118,459 114,155 105,447 121,340 131,340 8.24%
584Telephone - Local2,241 2,132 1,726 1,900 2,000 5.26%
587Radio- - - - -
605Disposal Charges118,422 138,169 115,578 130,750 132,800 1.57%
622Administrative Fee134,114 100,599 88,492 117,989 105,894 -10.25%
623Garage - Labor & Burden33,894 32,382 20,935 23,000 33,000 43.48%
630Training30 462 297 1,000 600 -40.00%
633Dues and Memberships150 150 - 200 200
635Travel/Mileage- 5 - 100 50 -50.00%
636Conference Fees300 240 - 300 300
637Meals and Lodging- - - - -
639Subscriptions and Publications20 - - 100 50 -50.00%
644Taxes & Licenses250 248 250 285 285
651Fleet Liability2,198 2,309 1,617 2,156 2,424 12.43%
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DEPARTMENT - REFUSEFUND 717
REVENUE AND EXPENSE DETAIL SUMMARY
11/18/2015
ActualActualActualBudgetBudgetPercent
CODE20132014201520152016Change
EXPENSE, (cont.)
Materials, Supplies and Services, (cont.)
652General Liability13,732 14,629 10,907 14,637 14,775 0.94%
662Refunds and Reimbursements- - - - -
680Depreciation53,673 47,909 39,160 56,000 56,000
TOTAL 561,976 564,980 491,932 542,982 567,893 4.59%
TOTAL OPERATING EXPENSE
$819,713 $813,057 $725,081 $880,670 $915,973 4.01%
OPERATING INCOME (LOSS)
142,546116,883 163,742 69,130 65,194 -5.69%
DEPT 48940 NON-OPERATING
930Transfers Out25,000 25,000 12,500 25,000 25,000
REFUSE FUND INCOME (LOSS)
$91,883$117,546$151,242$44,130$40,194-8.92%
DEPT 48950 CAPITAL OUTLAY - MEMO
450Proceeds from Sale of Assets$- $- $- $- $-
740Motor Vehicles- - 232,515 204,800 -
760Computers- - - - -
790Other Equipment - - - - -
TOTAL$- $- $232,515 $204,800 $- -100.00%
REFUSE UTILITY SUMMARY
Refuse Utility Revenue Total$936,596 $955,602 $888,823 $949,800 $981,167 3.30%
Refuse Utility Expense Total844,713 838,057 737,581 905,670 940,973 3.90%
Refuse Utility Net Income(Loss)91,883 117,546 151,242 44,130 40,194
20152016
Monthly Refuse rate
20132014ActualBudgetBudget
30 gallon16.8516.85 16.85 16.85 17.85 5.93%
60 gallon19.8520.85 20.85 20.85 21.85 4.80%
90 gallon23.1524.30 24.30 24.30 25.30 4.12%
Monthly Recycling rate
4.254.00 4.50 4.50 5.00 11.11%
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REFUSE FUND - WORKING CAPITAL PROJECTION
ActualProjectedProjectedProjectedProjectedProjectedProjected
2013201420152016201720182019
Working Capital Beginning Year
621,737773,023923,958920,477986,9851,221,8711,354,261
Revenues:
Operating Revenues
Refuse Collectionx730,947734,161x784,161784,161x834,161834,161884,161
Recycling Rates138,161x147,206147,206x155,306155,306x163,406163,406
Bulk Collection12,63116,85812,00012,00012,00012,00012,000
Yard Waste11,7039,71010,00010,00010,00010,00010,000
Recycling rebates8,2141,40530,00030,00030,00030,00030,000
Miscellaneous (penalties)12,14712,30410,00010,00010,00010,00010,000
Grants24,58424,64518,00017,50017,00016,50016,500
Gain on sale of assets0
Interest3,8218,3794,6204,6024,9356,1096,771
Net Incr (Decr) in FV of Inv
Total Revenues942,208954,6681,015,9861,023,5691,073,4011,082,1761,132,838
Expenditures:
Operation Expense766,042781,849789,667805,461813,515829,786838,084
Transfer Out
Capital Outlay per ERP204,800101,60095,000
Capital Projects per CIP25,00018,000
Capital Lease (PW Facility)25,00025,00025,00025,00025,00025,00025,000
Total Expenditures791,042806,8491,019,467957,061838,515949,786881,084
Change in available funds151,166147,819(3,481)66,508234,886132,390251,754
Inventory change1203,116
Working Capital Ending Year773,023923,958920,477986,9851,221,8711,354,2611,606,015
Rate History
1989 $15.102016 - PW Garae Urade
gpg
1991 $17.252019 - PW - Replace Overhead Doors
1995 $11.00-14.45 refuse2020 - PW - Replace Wash Bay Roof
$2.25 recycling fee
2002 $2.75 recycle fee
2005 $13.20, 15.90, 17.25, refuse
2008 $3.25 recycling fee
2009 $15.85, 18.55, 21.25, refuse
2009 $3.50 recycling fee
2010 $3.75 recycling fee
2011 $16.85, $19.85, $23.15 refuse
2012 $4.00 recycling fee
2013 $16.85, $20.85, $24.30 refuse
2014 $4.25 recycling fee
2015 $4.50 recycling fee
did not implement
2015 $18.85; $21.85; $25.15 refuse -
2016 $5.00 recycling fee
2016 $17.85; $21.85; $25.30 refuse
2018 $4.75 recycling fee
2019 $20.85; $23.85; $27.15 refusewillneed to revisit these rate projections with 2017 ERP
2020 $5.00 recycling fee