The City of Tulare provides solid waste services to residential, commercial, industrial, and institutional customers located within the City. In November 2016, R3 Consulting was retained to perform analyses of the solid waste operations, routing, vehicle impact fees, finances and rates of the current operations and services, and to recommend any necessary rate adjustments.
Rate Study Background
The goal of the study is to ensure that each line of business (Residential, Commercial, Roll-Off and Street Sweeper) generates revenues to cover the cost of service for each line of business. The study was also designed to generate revenue to meet reserve requirements, and provide revenue for operational and capital improvements.
The last solid waste rate increase was adopted for three years (2009-2011) implemented in 2009 and competed in 2011. There was no formal rate analysis performed by a third party consultant to establish those rates. Solid waste rates have remained at current levels since 2011.
Why do a rate study?
The City of Tulare is committed to providing high quality, reliable solid waste service at the lowest possible rates for its citizens. It is critically important for the City to continually maintain, repair, and improve the assets it holds and to keep pace with ever increasing operating costs. In recent years, the City has grown and taken on additional customers. The primary landfill previously used has been closed, causing longer tonnage deliveries to a landfill site further away. The City has absorbed the additional service impacts of growth and increased landfill travel without expanding staffing to address these impacts, or increase rates to address the costs related to these impacts. These costs include labor to service increased route sizes, longer landfill trips, and increased maintenance and fuel costs. In addition, the daily operations of solid waste have negatively impacted the quality of the City’s streets. This is an expense that was never fully identified or funded in the past, but has now been identified, and it has been proposed that it be included as an operating cost for solid waste.
The proposed rates will be used to ensure that the utility collects sufficient revenue to cover fixed expenses, to fund capital improvements, and to increase reserves used to fund ongoing repair and replacement of the solid waste operations in order to maintain reliable service in future years.
Over the next five years, the City plans to make operational and capital improvements to the solid waste operations. The proposed rates will help implement these improvements. These improvements include increasing staffing to meet the City’s growth since the previous rate increases in 2011, funding city street maintenance to combat the negative impact solid waste has on city streets, and increasing operational efficiencies by implementing technological improvements to solid waste.
The proposed rates are calculated using the costs associated with providing residential solid waste and street sweeping services. These costs include, but are not limited to, operations, maintenance, and required repairs and/or replacement and operations expansion. Beginning in July 1, 2021 and carrying forward annually, rates for Residential, Commercial and Roll Off services will be increased by a percentage based on the Consumer Price Index (CPI). These increases are to keep rates in line with inflationary increases. The CPI increases are currently estimated at 3% and are based on the City’s regional location within the U.S. Department of Labor Bureau of Labor Statistics.
Other Related Documents
If you have any questions about the proposed rate changes or would like to see more information about data used for the study, please contact Benjamin Siegel at (559) 684-4382 8:00 a.m. to 5:00 p.m. Monday through Friday.