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San Juan County Solid Waste: Funding

San Juan County Solid Waste: Funding. Solid Waste Funding. Current Solid Waste Revenue Rate Structure used to collect revenue Cost of Service Current Funding Problems Solutions. Current Revenue Sources. Primary Source of Revenue is Garbage Tipping Fee (86.6%)

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San Juan County Solid Waste: Funding

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  1. San Juan County Solid Waste:Funding

  2. Solid Waste Funding • Current Solid Waste Revenue • Rate Structure used to collect revenue • Cost of Service • Current Funding Problems • Solutions

  3. Current Revenue Sources • Primary Source of Revenue is Garbage Tipping Fee (86.6%) • Excise Tax is used to Support Capital Expenses (9.8%) • Grants (HHW, Litter, Composting)(1.7%) • Recycling Revenue (2%) • Miscellaneous Fee Revenue (HHW, unsecured loads)

  4. Service Rate By Customer Class April 2008 • Self Haul • $7.50 per can • $278 per ton • 10% to Capital Fund (Disposal District) • 3.4% to State Refuse Tax • Town of Friday Harbor • $187 per ton (largest SJI customer) • None to Capital (except portion of fund shift) • San Juan Sanitation • $187 per ton (effective rate) • $157.40 Tipping fee • + 10% of Gross Revenue to Capital Fund

  5. Service Rate continued • Recycling Customers • Drop off at transfer stations NO FEE • Post Office junk mail NO FEE • Other Customers • HHW Collection • Annual collection events MINIMUM FEE • Facilities for Used Oil, Anti-freeze, vehicle batteries NO FEE • Litter Control • Roadside, beaches, volunteer coordination NO FEE • Other Subsidized Activities • Composting workshops, e-waste events, weed control, lions club reuse NO FEE

  6. Rate History

  7. Factors that Control Rates • Cost of Infrastructure • Land, Buildings, Equipment • Debt on Capital • Maintenance of Infrastructure • Cost of Operations • Collection • Processing • Disposal • Overhead

  8. Factors that Control Costs • Policy • Level of Service • Efficiency of Operation • Geography • Variable Costs • Labor • Ferry Service • Disposal, Transportation and Processing Contracts

  9. Cost of Service

  10. Cost Allocation • How to calculate the appropriate share of costs • Based on Tonnage? • Based on Time? • Based on number of Trips?

  11. Rate Development Concepts • Revenue Requirements – compares revenue to expenses to determine overall rate. • Cost of Service - determines revenue requirements for customer classes based on level of service. • Rate Structure – method used to allocate the cost of service to various customer classes, based on the governing bodies policies, that balances revenue and expenses.

  12. Revenue Problems • No Revenue for new capital facilities • No Revenue for equipment replacement • No Operating Reserve • Increases in recycling can drive up cost without providing increased revenue.

  13. Recommended Full Cost Accounting Changes From 2005 Analysis • Fund Capital and depreciation costs at approximately $167,000 per year (further definition of need) • Establish a Reserve equal to a minimum of two months operations plus one year of capital i.e. $620,000

  14. Potential Rate Structure Changes(2005 recommendations) • Increased Minimum Fee For Self Haul ($9.58 or $11.67) • Initiate an Administration Fee ($7.04) • Charge an excise tax per developed parcel to support Recycling, Reserves and Capital • Charge A Tipping Fee For Recycling

  15. Rate Structure Issues • Recycling Subsidy • Garbage classes pay for most recycling costs • Self Haul Services • Transfer cost are higher for self haul due to low volume per trip • Discount Rates for Large Customers • Which Class Will pay for Capital and Reserve

  16. Recycling Subsidy • Reduces impediments • Encourages separation from garbage • People that choose not to recycle still pay for the public benefit of the system.

  17. Self Haul Services • Issues • Small volume of waste • Relatively high service time on site • Less manageable regarding timing • Cost of Service Analysis (2005) • $6.16 per can based on weight • $9.58 per can based on service time @ facility • $11.67 per can if administration is based on number of trips to the transfer station

  18. Discounted Rates For Large Volume Customers • Town and Franchise pay less • Do not pay for the recycling portion of the program • Cost less to provide transfer service due to large loads • Town does not contribute directly to the capital fund (operations does support capital)

  19. Options for Rate Structure Change • Tipping Fees • Users Pay by Weight or Volume • Administrative Fee • Taxes • General Property Tax • New Parcel Tax • Increase Existing Excise Tax • Could apply to all residents of Disposal District or only to users of the system

  20. Base Rate Concept • Many public utilities have a two tiered rate structure: • Base Rate – All customers pay. Covers fixed costs and infrastructure. May cover cost of recycling system and other “free” services. • Volume Rate – Customers pay according to how much they use the system. Covers operating costs.

  21. Applying a Base Rate • Apply to all potential customers • Parcel Fee • Apply only to current users • Excise Tax • Administration fee • Apply only for specific services • Fee for use of recycling services • Apply to all services • Annual fee to use facilities

  22. Costs included in a base rate? • Debt Service • Future Capital Facilities and Equipment • Creating a Reserve Fund • Landfill Monitoring • Recycling Program • Subsidized Services

  23. Per Parcel Example

  24. Administrative Fee Example

  25. Questions to Answer • Method for funding Capital and Reserve? • Through Tipping Fee or Base Rate? • If Base Rate • Excise, Parcel, Administrative Fee etc. • Which Services Should a Base Rate Cover? • Capital, Reserve, Recycling etc.

  26. Cost of Services

  27. Rate Structure • What services require a fee • Garbage Tipping (95% of Revenue) • Appliances, Household Hazardous Waste • Who pays the tipping fee (Customer Class) • Self haul • Town (partial rate) • Franchise hauler (partial rate + percent of gross income) • What is “Free” • Recycling • Weed disposal • Litter Disposal

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