Memo - Refuse Fund Report and Discussion
..
Public Works Department
Memorandum
To:
From:
Honorable Mayor and Members of the City Council
Steven J. Stadler, Public Works Direct~
Penny Cleve, Solid Waste Coordinato~
Copy:
Rick Getschow, City Manager
Date:
May 7, 2008
Subject:
Refuse Fund Report and Discussion
Purpose: To present: 1) the current condition and expected future trend of the refuse
fund; 2) program-specific costs and revenues; and 3) comparison of Hopkins services
and costs with neighboring cities and private haulers. Also, we'd like to discuss various
options for increasing revenue and decreasing expense.
Background: The refuse fund reported a small net income loss in 2007. Future
projections show a consistent trend of operating and capital expenses exceeding
revenues. Future rate increases and/or expense reduction will be necessary to keep
this fund solvent.
The City provides full refuse services, including: weekly refuse curbside pickup, bi-
weekly recycling curbside pickup (by contract) and a drop-off service, yardwaste and
brush drop-off service, yard waste and brush curbside pickup, two bulk drop-off events
per year, and weekly bulk curbside pickup (appliances by contract). Monthly fees are
charged to each resident for weekly residential refuse and biweekly recycling curbside
service. All other services are charged as individual user fees and added to the
resident's utility bill. However, user fees fall far short of paying for these services.
Currently, the monthly fees for refuse pickup service subsidize the other programs - the
actual 2007 subsidy was about $200,000. Still, the fund is expected to have an income
loss of $100,000+ in 2008.
Current condition and future trend of fund + program-specific costs & revenues:
See attached working capital projection and refuse program summary spreadsheet,
program revenue & expense charts, and service comparison spreadsheets.
"
Options to increase revenue
- Raise refuse service fee: A 3% rate increase yields about $16,000
- Charge more at bulk drop-off program: A $10 - $20 per vehicle charge could increase
fees by $6 - $1 OK/year
- Change curbside yard waste pickup program to a subscription program with an
additional monthly YW service fee. Difficult to implement. Could generate up to
$50,OOO/year in additional revenue depending on participation rate.
- Raise per bag yard waste fee: Raise from $2/bag to $4/bag yields about an $8,000
revenue increase assuming no change in participation
- Raise brush pickup fees, currently $8 - up to 5 CY, $20 - up to 17 CY and $30 - up to
30 CY: small revenue increase: $4,000 +/-
- Increase recycling fee: $0.50/ month increase = $20,000
Options to decrease expenses
- Discontinue YW curbside pickup program in the summer (June - August): estimated
$4,000 reduction
- Reduce YW pickup program to biweekly, matching recycling schedule: estimated
$5,000 reduction
- Reduce curbside bulk pickup service to biweekly, matching recycling schedule:
estimated $5,000 reduction
- Decrease length of free spring YW & brush pickup services to just the first week of
May each year (2008 free pickup services were from April 21 - May 8): estimated
$2,500 reduction
...
REFUSE FUND - WORKING CAPITAL PROJECTION Revised 5-7-08
Actual Actual Actual Projected Projected Projected Projected Projected Projected
2005 2006 2007 2008 2009 2010 2011 2012 2013
Working Capital Beginning Year 252,065 277,109 266,196 230,536 120,773 116,076 (80,827) (117,691) (155,970)
Operating Revenues 705,138 687,127 683,527 706,600 R 756,600 G 756,600 756,600 772,600 R 827,600 G
Miscellaneous 16,000 8,695
Grants 22,667 22,282 21,920 23,000 23,000 23,000 23,000 23,000 19,000
Interest 6,295 15,592 14,992 10,374 . 5,435 5,223 (3,637) (5,296) (7,019)
Total Sources 750,100 725,001 729,134 739,974 785,035 784,823 775,963 790,304 839,581
Operation Expense 694,678 671,830 686,739 749,737 764,732 780,026 787,827 803,583 811,619
Transfer Out
Capital Outlay (per ERP) 4,971 41,228 52,681 75,000 0 176,700 0 0 0
Capital Lease (pW Facility) 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000
Total Uses 724,649 738,058 764,420 849,737 789,732 981,726 812,827 828,583 836,619
Change in available funds 25,451 (13,057) (35,286) (109,763) (4,697) (196,903) (36,864) (38,279) 2,962
Inventory change (407) 2,144 (374)
Working Capital Ending Year 277,109 266,196 230,536 120,773 116,076 (80,827) (117,691) (155,970) (153,008)
Rate History
1989 $15.10
1991 $17.25 G = Garbage fee. increase
1995 $11.00-14.45 refuse R = Recycling fee increase
$2.25 recycling fee
2002 $2.75 recyclefee Notes -
2005 $13.20, 15.90, 17.25, refuse 2006 Capital outlay - $9,000 for computer software upgrade; $20,000 refuse containers
2008 $3.25 recycling fee 2007 Capital outlay - 50% oflog truck (remainder in ERP)
2009 $15.85, 18.55,21.25, refuse 2008 Capital outlay - swap loader - $57,000; dumpsters - $12,000; refuse carts $6,000
2012 $3.75 recycling fee 2009 Capital outlay - Refuse truck
2013 $16.85, 19.85,23.15 refuse
REFUSE BUDGET - PROGRAM SUMMARY
YTD 12/31/2007
2004 Actual 2005 Actual 2006 Actual 2007 Actual 2007 Budget 2008 Bud et
Pro!!ram Revenues Expenses Revenues Expenses Revenues Expenses Revenues Expenses Revenues Expenses Revenues Expenses
Bulk Collection 13,935 42,4] 5 13,899 57,932 11,590 39,364 12,568 57,]60 10,000 50,324 10,000 50,065
Yard Waste 8.024 82,601 ] 1,671 8 ] ,307 11,436 64,830 11,099 70,755 18,000 94,967 16,000 99,167
Brush 0 58,337 0 67,954 0 6] ,834 0 71,433 0 86,097 0 88,992
Recycle 119,252 128,611 134,815 13] ,847 122,065 148,]45 125,926 156,002 124,600 159,393 140,100 ]71,367
RefuselDisposal 485,300 374,9] 8 573,715 400,452 579,911 400,220 579,541 376,889 583, I 00 404,778 583,100 436,146
SUBTOTAL 626,5 I 0 686,883 734,100 739,492 725,002 714,393 729,133 732,239 735,700 795,559 749,200 845,737
Transfers Out '.~ 25,000 25,000 25,000 25,000 25,000 25,000
TOTAL 626,510 711 ,883 734, 100 764,492 725,002 739,393 729,133 757,239 735,700 820,559 749,200 870,737
Net Income/(Loss) 7J) (30.,392) (14,39 t) (28, I Uo) i .:',~)7)
Capital Outlay - memo only 52,681
Cash Balance 12/31 476,016 326,779 274,609 240,345
...
SW 2007 REVENUE/EXPENSE BY PROGRAM
$600,000
$575,000
$550,000
$525,000
$500,000
$475,000
$450,000
$425,000
$400,000
$375,000
$350,000
$325,000
$300,000
$275,000 J.
$250,000
$225,000 -
$200,000
$175,000
$150,000
$125,000
$100,000 ..
$75,000
$50,000
$25,000 -
$0
REFUSE - CURBSIDE RECYCLING - CURBSIDE
(including
parks/beach/mall)
BULK
Y ARDWASTElBRUSH
'-
iii TOTAL REVENUE
[1] TOTAL EXPENSE
2007 SW EXPENSE/REVENUE COMPARISON
$775,000
$750,000
$725,000
$700,000
$675,000
$650,000
$625,000
$600,000
$575,000
$550,000
$525,000
$500,000 -
$475,000
$450,000
$425,000
$400,000
$375,000
$350,000
$325,000
$300,000
$275,000
$250,000
$225,000
$200,000
$175,000
$150,000
$125,000 -
$100,000
$75,000
$50,000
$25,000
$0
TOTAL REVENUE
TOTAL EXPENSE
OYARDWASTE/BRUSH
OBULK
m RECYCLING - CURBSIDE
[l REFUSE - CURBSIDE (including
parks/beach/mall)
..
2007 SW NET EXPENSE/REVENUE
$220,000
$210,000
$200,000
$190,000 .
$180,000 ."
$170,000 .
$160,000 -
$150,000 .
$140,000 .
$130,000 .
$120,000 .
$110,000 ."
$100,000
$90,000
$80,000
$70,000 .
$60,000 ."
$50,000.
$40,000
$30,000
$20,000
$10,000 .
$0 -
-$10,000 .
-$20,000 .
-$30,000 .
-$40,000
-$50,000 .
-$60,000 .
-$70,000
-$80,000 r'
-$90,000 '>>
-$100,000 .-',.
-$110,000 .
-$120,000 .
-$130,000 .
-$140,000
-$150,000 .
PROGRAM
1m REFUSE - CURBSIDE (including
parks/beach/mall)
19 RECYCLING - CURBSIDE
ImSULK
1m Y ARDWASTE/BRUSH
The spreadsheet below compares the residential services offered by the three commercial waste haulers currently
licensed in the City of Hopl<ins to the services that the City of Hopkins offers.
. Waste Management .. BFI .. Randy's Sanitation City of Hopkins
Monthly Base Fee for 32 gal. - $13.95 32 gal. - $13.95 35 gal. - $8.90 32 gal. - $13.20
Refuse Services 64 gal. - $14.95 68 gal. - $14.95 65 gal. - $14.90 64 gal. - $15.90
96 gal. - $16.95 95 qal. - $15.95 95 Qal. - $20.65 95 gal. - $17.25
Monthly Base fee for $5.50 per Household Incl. in refuse cost $3.95 per Household $3.25 per Household
Recycling Services
Appliance Collection Regular - $35.00 $35.00 per appliance Not offered - must call $25.00 per appliance
AlC - $40.00 appliance recvcler
Bull< Collection Furniture - $40.00 minimum $30 a cubic yard $25.00 per item or
$2.00 to $35.00 Furniture ~ $25.00 per % cubic yard
Per item $2.50 to $75.00
Yard Waste Brush Subscription - * Subscription - .. Subscription - Not available
Collection- April- Nov. unlimited April - Nov. unlimited April - Nov. unlimited qty. -
Subscription Service qtv. - $72/vear Qtv. - $74/vear $50/vear
Yard Waste/Brush Call in $3/yard waste bag Call in $3/yard waste bag None Early May through mid
Collection Sticker or Call in or branch bundle or branch bundle with a $6 October -
minimum $2.00 per yard waste bag,
.. Bagged yard waste and .. Bagged yard waste and Tuesday brush pick up on
branches in bundles less branches in bundles less call in basis - brush $8,
than 2 feet in diameter & 4 than 40 pounds, $20, $30 and up based on
feet long, quantity.
Yard Waste Brush - None None One free fall bagged Free bagged yard waste &
Free Collection leaf/yard waste pick up for call in brush mid April thru
all customers first week of May
Qty unlimited Free bagged yard waste
3rd week in October
through mid November,
one free brush pick up day
The City Hopkins provides a free yard waste and brush drop off location for their residents from mid May through
November. City also offers a free recycling drop off center.
Twice a year the City of Hopkins offers a Bulk Drop Off event. Recyclable and non recyclable items are accepted. All
items are accepted free of charge with the exception of appliances. There is a $20 charge per appliance.
'I, Hauler is currently charging fuel Surcharge - % of fuel increase that exceeds base price; current surcharges have
been $3.50 - $5.00 a month
YARD WASTE/BRUSH/BULK
SERVICE COMPARISON
BY CITY
SERVICES PROVIDED ST. LOUIS PARK MINNETONKA EDINA EDEN PRAIRIE HOPKINS I
I
FREE YARD WASTE PICK UP None None None None 3 Weeks in sorino
4 Weeks in fall
FREE YARD WASTE DROP OFF None 3 days in the Sorino None Once a year Mav throuoh November
2 days in the Fall at Bulk event.
YARD WASTE PICK UP FEE ($) Must choose option .. Priv contractor Priv Contractor Priv contractor $2 Per baa
City contract waste/recvcle Mav throuah November
FREE BRUSH PICK UP None None None None 3 Weeks in sprinq
1 Day in fall
FREE BRUSH DROP OFF None Apr thr Nov. None Once a year May throuqh November
Mon, Tues, Sat at Bulk event' Wed & Sat
BRUSH PICK UP FEE ($) City contract waste provider Priv contrator Priv contractor Priv contractor $8. $20, $30
I Year around
BULK ITEM PICK UP City contract waste provider Priv contractor Priv Contractor Priv contractor $25 Per item or 3/4 CY of material
. Year around
.
FREE BULK ITEM DROP OFF None Some items free at the None Some items free 3 Dav sprino event (see below)
two annual events . at annual event * 3 Day fall event (see below)
BULK ITEM DROP OFF FEE ($) None Two a year None One a year Fee for appliance at above event $20
fee based' fee based' Fee for appliance at above event $20
City contract wastelrecycle contractor - Yard Waste/Brush included in City waste fee, Bulk fee contractor
Priv contractor - Resident include yard waste/brush service in contract with rivate refuse contractor for additional fee
Priv contractor" Resident calls private contractor for bulk pick ups for fee
I
. See attached fee schedule I ... '.'
...../ ...... .. .... I T F '.. >...> .
.. No qrass c:lippinq option.lowers collection. fee bv$3.00.