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City of Palo Alto
City Manager's Report
TO:
ATTENTION:
----------------~
HONORABLE CIn' COl'NeiL
Finance Committee
FROM: CITY MA~GER
AGENDA DATE: Matc. 20, 1995
DEPARTMEll/T: Public Work5
CMR:119:95
SUBJECT: Rduse Tuell C<l.t of Service Study
REPORT IN BRIEF
This repo<t deIaiI. the pr<lp05<d scope C!f servi<:es for the re~ cost C!f service study
apprO'Vtd and funded in the 1994-95 Re~ Fund operating budget This study was among
those the Vmance Coounittee indWoted it wished 10 review in draft foon prior 10 staff
soliciting request for proposal
BACKGROUND
The City CoonciI sets refuse collection rates and sc~es for all classes "r customers, In
addition 10 refuse cclIect>cn fees, ilie rates include funds fo< all solid waste programs (i.e.
inaterial. recovery', street sweeping. landfill operatiollS. regulatory programs. bonsehold
hazardous" waste and long-tenD. dioposal commitments); <.ajlital projects; and landfill closure
and post closure. ..... a result of hom regulatory mandates and expanding solid waste
programs. Palo Alto'. rates have increased significantly in the last 1eJl yean.
During (be las! few years, residents and the C.ouncil hav. expressed coocem on both !he cost
of refuse collection and the rates charged for w.JSe related services.
DISCUSSION
The goals of Phase I of this request for proposal are to:
I. Develop cost of services melbocIology and calculate cost of senKOS by category (i. e.
col!ec!ioo, disposal, ~1ing, sweeping. <:oolp<l»"ling, haz.ardons waste •• dministration
and support);
i. Develop cost alIocatioo melbocIology for allocating cost of services to cust"",.r class
(i.e, residential Rl, R2. 10, el<:., commercial. industrial), including the development
of a typical bill at full cost of seme .. ;-.emized by cost compooen!S; and
3. Review the current customer ol=s and reromrnend revisions or expansion of rate
schedules si.'lliIar '" other romrnunities in the greater San francisco Bay Are. (L<.
multi-family more than 10 units. mobile homes, hospilal. go\'ernm<n~ research and
manufacturing). .
Phase n of the scope of .. ",ices is proposed 10 include the foll""'ing:
....... 0
,.-;
.-" ,
o
I. Evaluale Ill< efficiencycfPaI()A/Io Sanitation Company (PASCO) services, including
an analysis of routes, schedules, _ and maintenance of eQui pmeot and {adlities;
2, Evaluale !he level of rost and profil foe PASCO compared 10 OIher refuse collection
firms in 1hc San francisco Boy Area.
3. Evalum Ih<: current CO<IIpensatioo fonnula and compare k "ith other formulas used
in the San Francisco Bay hea fo.-de!emlining profit, and recommend 1hc most
appropriate ODe, including basis for determination;
4. Rev'.ew for approptiateness and define 1hc ~ent list of allowable tests in the refuse
collection agteemp!ts with PASCO and make recommendations for additions and
deletions; and
S. Complete an arulIysis of the rales schedules both current and proposed (PIuse I)..
..mcJt would compare rates with other sinular juris<fJCtions offering sinular ser."kes
(i,e. backyard collection, recy<:Jing, composring, street sweeping, wmmercial
recycfmg).
POLlCXJMPLICATIONS
There are no policy implications related to this report.
FISCAL IMPACT \
Phase I funding of $60,000 is included in the 1994-95 refuse fund operating budget; Phase
11 woold require the addition of $60,000 in lbe proposed 1995-% refuse fund operating
budget .
f,NVIRONMENTAl. ASSF.ssMENT
There is DO esvVonmental assessment re~::ired rot-ap:>cova! of this funcfmg request
~TEPS FOLWWING APPRQV AL
SIaff will pttpaJ< I request for proposal for sclicitation to coosultant> and retum I<> CollnC11
with • rccOOlmended consu.ltant
A ITACHlIfENIS
None
PREPARED BY, J',flChael Miller, Deputjf Director Public Wods Operations
DEPARTMENT HEAD REVIEW: 4JsFR~ -
Director of Public W O<ks
CITY MAN.4.GER APPROVAL: EF'i:CNG ,
CL'Manager
Pal'! 2 ofl