19 - Laserfiche WebLink

PGS maintains that it has not received the revenue needed to adequately fund its operations. Rate Adjustment Analysis for Existing Services Staff and the Subcommittee have reviewed the status of these reserves and cost centers and determined that at this time, additional review is necessary prior to making a final recommendation on the appropriate rate adjustment. However, it has determined that at least 12% of the requested adjustment amount is justifiable and therefore, it is forwarding this matter to the City Council for its consideration at this time. A summary of the 12% is as follows: 2.36% to address governmental regulatory costs (none of which are assessed by the City) associated with the refuse operations. Currently, PGS is assessed regulatory fees of approximately $15.46 per ton for material dumped at the Vasco Road landfill. As such, the associated rate adjustment is viewed as a pass through from PGS to the regulatory agencies including the Alameda County Waste Management Authority. The rate revenue resulting from this adjustment will be assigned to the Regulatory Reserve. 4.94% to address dump fee related costs including recently adopted and projected increases at the Vasco Road Landfill. While PGS has historically had some negotiating ability with these fees, it was informed in December 2007, that fees would increase from $29.89 to $37.00 (+24%) effective January 2008. PGS also anticipates rates will increase by an additional 6% to 10% during this rate term. As a result, this rate adjustment represents a pass through from PGS to the landfill. The rate revenue resulting from this adjustment will be assigned to the Refuse Collection Reserve. 2.00% to address compliance with clean air regulations. Essentially, new state and federal regulations require PGS to convert its vehicles to clean fuel. As a result, PGS purchased four compressed natural gas (CNG) vehicles in 2008 and projects it will purchase three additional CNG vehicles each year for the remainder of this rate period. The rate revenue resulting from this adjustment will be assigned to the Refuse Collection Reserve. 2.7% to address general inflationary pressure related to operating costs, including wages, fuel, insurance, and repairs over the projected three year rate period. While staff and PGS are still negotiating the actual amount that should be assigned to general operating expenses, the recommended amount is supported by staff at this time. The rate revenue resulting from this adjustment will be assigned to the Refuse Collection Reserve. As indicated above, final negotiations will most likely result in an additional rate increase to offset the cost of existing services. However, at this time the 12% represents an amount that can be recommended by staff to offset identified expense increases that will be incurred by PGS. While staff and the Subcommittee continue reviewing the Page 3 of 7