29 - Adopt Residential Solid Waste Collection Rates

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Excerpt from August 28, 2023 Agenda Memo BUDGET.- Current UDGET: Current Solid Waste Rates — The City currently provides residential solid waste for $16.59 / month. We have not raised the rates in over 10 years, but instead have been "cannibalizing" the portion going to the General Fund that assists with street maintenance in order to balance the solid waste fund. In the Proposed FY23/24 Budget, this amount is being dropped from $210,000.00 to $70, 000.00 which follows a similar trend in recent years. Should the City continue with its residential trash service, rate increases will be inevitable for FY24/25 as it is foreseen that the trend for increase in solid waste costs will not only consume the remaining portion still going to the General Fund, but require more funding. Those rates have not been calculated. CARDS Rates — CARDS is indeed the lower rate for residential pickup as well as overall lower matrix for commercial dumpster. Lynn Lantrip will provide details on these rates in the presentation. City of Paris Administrative and Landfill Fees — Pursuant to the bid and contract, while commercial solid waste will be billed by the third party provider (CARDS), the City will continue to bill for residential solid waste. The primary purpose behind this is to ensure compliancy with payment by connecting the bill to the overall utility bill for disconnect purposes. With this, so as to prevent the Water and Sewer fund from subsidizing administrative time and expense (labor, postage, software fees, etc.) tied to providing this service to our solid waste customers, an administrative fee must be applied. We will also continue to have a city employee who, among other duties, will act as a municipal liaison with the company and citizens. Our contract has numerous terms and conditions that must be monitored and managed on a routine basis (not full- time, but still regularly), which will be delegated to Edwayne Samis who will serve in this liaison role. A portion of his salary should therefore come from solid waste revenue instead of General Taxes or Water/Sewer Fund. Likewise, the City's current solid waste fund is supporting several expenses that will continue on even after outsourcing is complete. First, the City has a long-term contract for residential solid waste at the Blossom Landfill. The City enjoys tremendous rates through this contract, therefore CARDS will deliver the trash to the landfill and the landfill will continue to bill the City for payment (CARDS' rate is strictly pickup and delivery, it does not include landfill service fees), which is estimated to be approximately $350k due to historical data. Second, the City is continuing to work through TCEQ post -closure procedures of the old municipal landfill on north Stillhouse Road. This is strictly a solid waste expense, and therefore the revenue should continue to come from solid waste users, which is typically budgeted at $100k each year. In total, we estimate needing approximately $530k annually (likely to incrementally increase over time) to cover these costs. At this time, given the average number of accounts we have, we estimate needing approximately $5.82/month/account to cover our estimated costs, to which we are recommending rounding up to $6.00/month/account. This figure can change at any time by future City Councils should we determine it to be more than enough or, not enough. However, our