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23 Informational item only
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Last modified
8/23/2012 11:09:04 AM
Creation date
7/25/2008 3:30:42 PM
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AGENDA
Item Number
23
AGENDA - Type
MISCELLANEOUS
Description
Municipal Solid Waste Services Full Cost Accounting Workbook
AGENDA - Date
7/28/2008
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If a city is establishing rates for residential customers, these rates are usually calculated "per <br />household." If a city is establishing rates for commercial customers that use the larger commercial <br />containers, these rates are usually determined based on the size of the container and frequency of <br />pickups. Each city will need to determine the appropriate billing units for each of the solid waste <br />services offered to its customers (e.g. $ per household, $ per container, $ per ton, $ per gallon, etc.). <br />a city provides oniy residential service and divides its program costs (Form B, line 1) by number of <br />households served (Form B, line 2) this will provide the annual cost per household for each program. <br />By summing the annual costs per household for each program, the city can then determine the total <br />annual cost per household for all solid waste services. An example is as follows: <br />Collection <br />Disposal <br />Recycling <br />Total <br />Total Full Cost <br />$1,000,000 <br />$1,250,000 <br />$750,000 <br />$3,000,000 <br />Billing Units <br />18,000 <br />18,000 <br />18,000 <br />18,000 <br />(households served) <br />Annual Cost Per Billing Unit <br />$55.56 <br />$69.44 <br />$41.67 <br />$166.67 <br />The annual cost per househoid is $166.67. In order to recover the full cost of providing these <br />services, the city will need to establish a monthly customer charge ot $13.89 ($166.67 / 12 <br />months). - " <br />The rates calculated in this example assume the city will bill its residential customers a flat monthly <br />charge per household for solid waste services. In other words, all customers pay the same amount. In <br />the past few years variable rates or "Pay-As-You-Throw" rates have become increasingly more <br />commonplace in the United States. Variable rate fee structures are just now beginning to be <br />implemented by a few cities in Texas. While relatively few cities in Texas have put in place a variable <br />rate fee structure, they are gaining attention because the rate structure encourages res'tdents to <br />minimize the amount of waste they generate. Using a variable rate structure, the more garbage a <br />household generates the larger that customer's garbage bill. While a description of how to develop <br />variable rates is beyond the scope of this workbook, use of this workbook will allow the city to <br />determine its full cost of providing solid waste services. This information can then be used to assist the <br />city in developing variable rates for its solid waste services. , <br />C. Customer Class Cost Summary (Form C) <br />The Customer Class Cost Summary will only be used by those cities that offer a solid waste program to <br />more than one customer class. This form is similar to the Program Cost Summary (Form A), with the <br />exception that this form is used to assign costs between customer classes, instead of between <br />programs. Once these costs have been assigned, the city may then use Form B, lines 4-6 to calculate <br />the solid waste rates, by customer class. <br />10 <br />• 00020jf <br />
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