36 - Rate Increase Request on Landfill Services AgreementItem No. 36
Memorandum
TO: Mayor, Mayor Pro Tem & City Council
FROM: Grayson Path, City Manager
SUBJECT: Landfill Services Agreement
Rate Increase Request
DATE: September 25, 2023
BACKGROUND:
On September 13, 2021, the City Council approved a Landfill Services Agreement with Waste
Connections Lone Star, Inc. for use of the Blossom Landfill for our residential waste. The City,
and/or its contractor, shall use this landfill for the disposal of municipal solid waste. This
agreement took effect October 11, 2021 and has a term of ten (10) years. Section 6 of this
agreement sets the rates as follows:
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Furthermore, section 6(d) states that the base rates shall remain fixed for the first two years
(10/11/21 — 10/11/23) while section 6(e) addresses how rates may change during the term of this
agreement:
STATUS OF ISSUE:
Waste Connections Lone Star, Inc., d/b/a Sanitation Solutions, has requested a rate increase of
5.00%, the maximum cap allowed in the language. Their request has been included in your packet.
Upon reviewing their request and examining section 6(e), while their calculations were incorrect
due to what appears to be a clerical error as well as looking only at a 12 month window instead of
the contractual 24 month window, we have performed our own analysis and determined that a 5%
rate increase is indeed appropriate under the terms of the agreement. I have included a draft letter
response to WCLS to this effect to address the error — for documentation purposes, authorize the
5% rate increase (tentative to City Council approval), as well as to request the payment of the
annual $5,000.00 donation pursuant to section 12 of the agreement; which according to our
records, we have not received to -date.
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BUDGET:
The new rates are shown in the WCLS letter to the City of Paris. Under the terms of the recently
approved Solid Waste Agreement with CARDS Dallas, LLC, the City will be charging a $6.00 per
month Administration and Landfill Fee to residents for the disposal of solid waste at the landfill.
This fee did not incorporate the 5% rate increase as it was not known at the time this would be
received, however, we did build in to our calculations some contingency and based on our re-
calculation using a 5% rate increase, our proposed $6.00 monthly fee should suffice. Should. this
prove incorrect, then we will present a fee adjustment to the City Council at a later date. The
current annual estimated expense for landfill fees, both at the landfill and at the South Church
Street location, is approximately $325,000.00. This of course is heavily dependent upon the
amount of solid waste produced by our community.
OPTIONS
1. Approve the Waste Connections Lone Star, Inc., d/b/a Sanitation Solutions, request for a
Landfill Service Agreement rate increase of 5%.
2. Request additional information, further negotiation, and/or reject their request and advise
City Staff as how to respond.
RECOMMENDATION:
1. Approve the Waste Connections Lone Star, Inc., d/b/a Sanitation Solutions, request for a
Landfill Service Agreement rate increase of 5%.
September 26, 2023
Woodie Brantley
Municipal Marketing Representative
Sanitation Solutions
PO Box 6190
Paris, TX 75461
Mr. Brantley,
We are in receipt ofyour letter, dated September 1, 2023 in reference to "Price Increase Request"
for the Landfill Services Agreement between the City of Paris and Waste Connections Lone Star,
Inc. After reviewing your letter as well as reviewing the landfill agreement, we have the following
comments to provide.
Item #1— Prince Increase Request
The following caption is from your letter:
The following is the calculation used to derive the increase percentage:
Last posted index for the month of May — 2022
274.196
Last posted index for the month of May — 2023
288.006
Index Increase
13.810
Percentage Increase
5.04%
Effective combined increase percentage
5.00%
(According to agreement)
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You further included the following worksheet:
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Upon review of Section 6(e) of the agreement, we are to utilize "the Consumer Price Index, for
the Dallas, Texas area for All Urban Consumers, All Items, Not Seasonally Adjusted, Based Period
December 1983 = 100" to determine the basis for rate increases. This information, listed in the
below table, was found at the following website: u�ul eau ofLana l oir taIii!stk IIS :u •
(https:Hdata.bls.gov/timeseries/CUURS37ASAO?am p%253bdata_tool=XGta ble&output-view=d
ata&include_graphs=true).
CPI for All Urban Consumers (CPI -U)
Original Data Value
Series Id:
CUURS37ASA0
May - 2023
287.133
Index Increase
12.937
Percentage Increase
4.72%
Not Seasonally Adjusted
Series Title:
All items in Dallas-FortWorth-Arlington, TX, all urban
Area:
Dallas -Fort Worth -Arlington, TX
Item:
All items
Base Period:
1982-84=100
Years:
2013 to 2023
Year
Jan Feb
Mar Arm
May Jun
Jul ? Aug
Sep Oct
Nov Dec
Annual
HALF1
HALF2
2013
213.696.
216.465'
215.670
216.979
217.068,
215.450
215.995
215.550
216.441
2014
216.291
218.715
219.590
219.543
219.380
217.188
218.392
218.469
218.316
2015
214.899
217.487
218.484'
218.676_
217.507
217.104
217.500
217.375
217.625
2016
217.164'
218.877
220.717
221.507
221.923
222.259'
220.677
219.223
222.132
2017
223.082
223.782
225.264
225.613
229.056
229.352
226.103
224.203
228.003
2018
229.132
230.272
234.034
233.570
234.563
234.487
232.788
231.570
234.007
2019
233.915
236.495
237.485
238.891
239.815
238.768
237.732
236.420
239.045
2020
238.935
238.865
236.317
239.888
240.658
239.544
239.081
237.910
240.253
2021
242.513
246.995
251.228
253.319
254.950
257.394
251.620
247.420
255.820
,2022
261.499
269.347
274.196
277.005
278.297
279.000
273.855
269.525
278.184
2023
281.117
284.862
287.133
288.006
284.846
This information appears to match your table, except your table appears to have skipped the
March 2023 data, moving May and July data up to March and May respectively.
If the goal is to use the most current information, if we update the information you provided us
with the correct information using July 2022 -July 2023, we have the following:
July - 2022 277.005
July- 2023 288.006
Index Increase 11.001
Percentage Increase 3.97%
If the goal is to use the May information, if we update the information you provided us using May
2022 - May 2023, we have the following:
May - 2022
274.196
May - 2023
287.133
Index Increase
12.937
Percentage Increase
4.72%
With the above stated, upon review of Section 6(e) of the agreement, it states, "The first CPI
calculation shall include the ercenta a than a for the first twent four month eriod. Every year
after, it shall be for a twelve month period from Anniversary date to Anniversary date."
Therefore, if we utilize the language in the contract, the calculation, using the most current CPI
information (July 2023), would be:
July - 2021 253.319
July - 2023 288.006
Index Increase 34.687
Percentage Increase 13.69%
Cap per Agreement 5.00%
With the above said, we do believe a 5.00% rate increase is in line with the terms of the
agreement, as you have requested. Said increase may begin on October 11, 2023.
Item #2 — Donation
Upon further review of the Landfill Agreement, pursuant to Section 12, Waste Connections Lone
Star, Inc. "further agrees to donate $5,000.00 cash per year to the City,..." Upon a review of our
records, we have not received this donation from you for either 10/11/21 — 10/11/2022 or
10/11/22 —10/11/23. Please remit this donation of $10,000.00 to the City of Paris at your earliest
convenience. We greatly look forward to putting this money to good use. The intended goal is
for this payment to be made each year without request. However, if Waste Connections would
prefer that the City of Paris officially request that this donation be made, please consider this our
official request that this amount be paid each year throughout the life of this agreement.
We likewise would like to thank you for your partnership through our Landfill Service Agreement
and we look forward to our continued work together,
Sincerely,
Grayson Path
City Manager
SOLLPHONS
Septemberl , 2023
Mr. Grayson Path, Honorable Mayor and
Councilmembers
City of Paris
135 S. E. 1st Street
P.O. Box
Paris, Texas 75460
Ref: Price Increase Request
Honorable Mayor and City Council:
Sanitation Solutions would like to take this opportunity to thank you for allowing us to
service the solid waste needs for the Paris, Texas community. As you are aware, on the
second anniversary of the effective date, the Base Rate is increased or decreased in
accordance with the most recently published CPI index.
This is in accordance with the solid waste landfill agreement of Article 6, Paragraph E,
of page 5 of 14, which refers to the right to request increases in the base rates based on
the same percentage as the consumer price index. We present our request in
anticipation that the city will consider and approve a 5.00% increase based on the most
recent CPI data. (Copy attached) The requested increase will be effective October 11,
2023.
The following is the calculation used to derive the increase percentage:
Last posted index for the month of May — 2022 274.196
Last posted index for the month of May — 2023 288.006
Index Increase 13.810
Percentage Increase 5.04%
Effective combined increase percentage 5.00%
(According to agreement)
Attached are copies of the worksheets detailing the increases.
Please feel free to contact me should you have questions or comments regarding our
request.
Again, we appreciate your business and look forward to continuing our relationship with
the City of Paris and its citizens.
Mr. Woodie Brantley
Municipal Marketing Representative
Base Rates:
Contractor shall charge City the following rates for receiving and disposing of Waste
Material at the landfill ("Base Rates"):
Currenty Rates Pr000sed Rates
(i) Compacted waste Materials $29.51 $30.99
(ii) Curbside pickup of Bulky waste $10.00 $10.50
(iii) Construction and demolition material $19.36 $20.33
(iv) Brush Trucks (Uncompacted) $6.06 $6.36
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