HomeMy WebLinkAboutAGENDA BACKUP 07-20-89
.
Centrl._ Contra Costa Sanitar.~District
BOARD OF DIRECTORS
SUBJECT
AUTHORIZATION FOR P.A. 89-22 (DANVILLE) AND P.A. 89-23
(DANVILLE) TO BE INCLUDED IN A FUTURE FORMAL ANNEXATION
TO THE DISTRICT
ineer
I
1
1
I
Danv ill e 1 Law rence Moran, etux
(98Bl) 1600 Camino Amigo Road
I Danv i 11 e CA 94526
1201-191-001 (0.43AC)
1
I
Danv ill e 1 Debra M. Cecaci
(9803) 1182 La Questa Drive
I Danv ill e CA 94526
216-160-08 (0.78 AC)
POSITION
..
SUBMITTED BY
Denni sHall,
Associate En
P a rce 1
No.
Area
89-22
89-23
PAGE 1 OF 3
PAPER
BOARD MEETING OF
NO.
Jul
III. CONSENT CALENDAR 9
DAT'i1uly 11, 1989
TYPE~tAANEXATION
FOR PROCESSING
INITIA TING DEPT./DIV.
Engineering Department/
Construction Division
Ow ne r
Address
Parcel No. & Acreage
Remarks
Lead
Agency
Existing house - failing
septi c system. Owner must
connect to public sewer.
District to prepare
"Notice of Exemption"
CCCSD
Existing house - failing
septic system. Owner must
connect to public sewer.
District to prepare
"Notice of Exemption"
CCCSD
I W. A. Wal deck, etux
1171 La Questa Drive
Danville CA 94526
216-151-003 (0.85 AC)
RECOMMENDATION: Authorize P.A. 89-22 and 89-23 to be included in a future formal
annexation.
INITIAT7PrV
1302A-9/85 D H
REVIEWED AND RECOMMENDED FOR BOARD ACTION
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P.A. 89.22
.
CentrA. Contra Costa Sanitar) District
BOARD OF DIRECTORS
PAGE 1 OF 2
POSITION
PAPER
BOARD MEETING OF
July 20, 1989
NO.
III. CONSENT CALENDAR 10
SUBJECT
DATE
ACCEPT THE CONTRACT WORK FOR THE HOLCOt-e COURT SEWER
RELOCATION PROJECT, PHASE II, IN WALNUT CREEK; (DP 4215)
AND AUTHORIZE FILING OF THE NOTICE OF COMPLETION.
July 11, 1989
TYPE OF ACTION
ACCEPT CONTRACT
WORK
SUBMjJTED ax . k
Kon K Ilmcza
Senior Engineer
INITIATING DEPT./DIV.
Engineering Department/
Construction Division
ISSUE: Construction has been completed on the Holcomb Court Sewer Relocation
Project, Phase II, in Wal nut Creek <DP 4215) and the work is now ready for
acceptance.
BACKGROUND: The project work consisted of the abandonment of an interim pump
station (installed as Phase I in 1986) and the installation of 192 lineal feet of
eight-inch gravity sewer main with two manholes and appurtenances (see Attachment
1). The new gravity sewer main included a 36-lineal foot section of eight-inch
concrete 1 i ned and coated (CL&C) pi pe crossi ng the new San Ramon Creek bypass
channel. This project is described in more detail in the 1988-89 Capital
Improvement Budget beginning on page CS-50.
Andes Construction, Inc. of Oakland was issued a Notice to Proceed on June 2,
1989. The contract completion date was August 2, 1989. Diligent contractor
efforts resulted in all work being completed by June 30, 1989. There were no
change orders issued on the project.
It is appropriate to accept the contract work at this time. A detailed accounting
of the project costs will be provided to the Board at the time of close out.
Since the District was required to perform the sewer relocation work to
accommodate flood control improvements, all costs associated with the project will
be reimbursed by the Contra Costa County Flood Control District.
RECO~ENDATION: Accept the contract work for construction of the Hol comb Court
Sewer Relocation Project, Phase II, in Walnut Creek <DP 4215), and authorize the
filing of the Notice of Completion.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
INITI~TING DE[DIV.
flllf
~8
1302A-9/85
RSK
JSM
\
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~
" '"
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HOLCOMB COURT SEWER
RELOCATION PROJECT
(PHASE II)
District Project: X4215
Attachment
7/89
1
2523.9/88
.
CentrL Contra Costa Sanitar~ .Jistrict
BOARD OF DIRECTORS
PAGE 1 OF 2
POSITION
PAPER
BOARD MEETING OF
J ul 20
1989
NO.
III. CONSENT CALENDAR 1
SUBJECT
DATE
ESTABLISH A POLICY FOR QUITCLAIMING OF EASEMENTS
J ul 12, 1989
TYPE OF ACTION
ESTABLISH POL ICY
SUBMITTED BY
Jay S. McCoy
Construction Division Manager
INITIA TING DEPT.lDIV.
Engineering Department/
Construction Division
ISSUE: At the June 1, 1989, meeting of the Board of Directors, the Board
requested staff to prepare a policy for quitclaiming of easements.
BACKGROUND: The current policy for quitclaiming easements has evolved over many
years. The practice is to receive requests for quitclaiming easements, collect a
processing fee (currently the fee is based on actual cost with an $87 minimum),
verify that the existing easement and sewer (if present) can be eliminated, and
process the quitcl aim to the Board for acti on. In some cases, exi sti ng sewers
must be relocated at the expense of others to eliminate the need for the existing
easement.
At the June 1 Board meeting, the value of easements which are proposed for
quitclaiming was discussed. The following policy has been developed in accordance
with that discussion:
It is the pol icy of Central Contra Costa Sanitary District for the Board to
consider quitclaiming rights, title, and interest which the District may
have in existing sanitary sewer easements upon receipt of a quitclaim request
in accordance with the following:
1. Requesters must pay a quitclaim processing fee (which may be set and
adjusted by the Board from time to time).
2. Requesters must reimburse the District for the val ue of the existing
easement.
a. If the District purchased the easement, the current val ue of the
easement will be established, and the District must be reimbursed for
that val ue. In establ ish i ng the current val ue of the easement, the
Board may consi der:
o The value of the proposed easement;
o The value of severance as it pertains to the existing easement;
o The value of the existing facilities;
REVIEWED AND RECOMMENDED FOR BOARD ACTION
RAB
SUBJECT
POSITION PAPER
ESTABLISH A POLICY FOR QUITCLAIMING OF EASEMENTS
PAGE
DATE
2
OF
2
July 12, 1989
o The cost or value of the replacement facilities; and,
o Other factors which the Board deems appropriate.
b. If the existing easement had been dedicated to the District at no
cost, the District will not attempt to collect the val ue of the
easement when quitcl aimed, except as specifically di rected by the
Board.
Staff will follow the practice noted above and incorporate the recommended policy
so that the value of existing easements will be collected for those instances when
the District has purchased the easements. This pol icy wil 1 be added to the
Engineering Department's Policy Manual.
RECOMMENDATION:
Establish a policy for quitclaiming of easements.
---------
13028-9/85
.
Centra~ ~ontra Costa Sanitary .Jistrict
BOARD OF DIRECTORS
PAGE OF
POSITION
PAPER
BOARD MEETING OF
July 20, 1989
NO.
SUBJECT
III. CONSENT CALENDAR 12
DATE
ADVISE THE BOARD OF THE CLOSE OUT OF STAGE 5B-PHASE I
PROJECT, DP 3762, AND THE CATHODIC PROTECTION O&M PLAN,
DP 20075
TYPE OF ACTION
INFORMATIONAL
SUBMITTED BY
Curtis W. Swanson
Principal Engineer
INITIATING DEPT./DIV. Engineering Division
Engineering Department
ISSUE: All work has been completed on the Stage 5B Phase I Project, DP 3762, and
the Cathodic Protection Operations and Maintenance Plan, DP 20075.
BACKGROUND: The Stage 5B Phase I Project expanded the capacity of the Treatment
Plant from 30 to 45 Mgd. Included under the DP 3762 project account are costs for
planning and design of the project, purchase of some equipment, and construction
of chlorination, dechlorination and standby power improvements. The majority of
the plant expansion was constructed under a separate project account. The
authorized budget for this project was $1,943,325. The total cost was $1,851,396
which is $91,953 less than the budget.
Under District Project 20075, a master operation and maintenance manual was
prepared for the new and existing cathodic protection systems at the Treatment
Plant, certain pump stations and force mains. O&M manuals are typically prepared
for new facilities or equipment. However, the cathodic protection manual was more
comprehensive in that it covered both the new system as well as existing systems
which did not have an O&M manual. An orientation session about the O&M manual was
conducted with Plant Operations Department staff as part of this project. The
authorized budget for this project was $45,000. The total project cost was
$40,658 which is $4,342 less than the budget.
The total cost for both projects was $1,892,054 which is $96,295 less than the
budget. Closing these two projects will result in $96,295 being returned to the
Treatment Plant Program of the Capital Improvement Budget.
RECOMMENDATION: This item is presented to the Board of Directors for information
only. No action is necessary.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
INITIATI
{)to
1302A-9/85
DRW
jrY RAB
.
Centre.. Contra Costa Sanitar~ ..listrict
BOARD OF DIRECTORS
PAGE 1 OF 27
POSITION
PAPER
BOARD MEETING OF
J ul 20, 1989
NO.
IV. SOLID WASTE
1
SUBJECT
RECEIVE ADDITIONAL INFORMATION TO CONSIDER THE
APPLICATIONS FOR REFUSE COLLECTION RATE INCREASES
SUBMITTED BY VALLEY WASTE MANAGEMENT, ORINDA-MORAGA
DISPOSAL SERVICE, INC., AND PLEASANT HILL BAY SHORE
DISPOSAL
DATE
J ul Y 14, 1989
TYPE OF ACTION
CONSIDER RATE
APPLICATIONS
SUBMITTED BY
INITIATING DEPT./DIV.
Walter N. Funasaki, Finance Officer
Administrative/Finance & Accounting
ISSUE: At the public hearings conducted on July 6, 1989 to consider the
applications for rate increases submitted by the three refuse collectors franchised
by the District, additional information was requested by the Board of Directors for
receipt on July 20, 1989.
BACKGROUND: After conducting publ ic hearings on each of the three rate
appl i cations, the Board del i berated the issues i dentifi ed, and requested Di strict
staff to provide certain additional information. Consideration of the rate
applications were continued to the July 20, 1989 Board Meeting at which the
information requested would be reviewed.
The additional information requested is summarized by refuse collector in the
following Position Paper attachments:
Valley Waste Management
Attachment I - Acme Landfill Disposal Expense
At the July 6, 1989 Board Meeting, the Board was provided with the effect
on the revenue requirement and representative collection rates if the
forecasted di sposal expenses were reimbursed to the refuse coll ector at
cost, with no profit. The refuse collector indicated that if the revenue
requirement were determined on that basis, the effective operating ratio
would be 96 percent and the Return on Equity would be 18.3 percent. The
Board requested that the effect on the revenue requi rement and
representative collection rates be provided based on producing effective
operating ratios of 94 and 95 percent; the resultant Return on Equity and
Gross Profit were also requested. The information requested is presented
on this attachment.
Attachment II - Prior Year Net Expense Charge
The allowability of the prior year net expense charge of $389,000,
primarily representing the effect of the Acme landfill disposal fee
increase in the prior rate-setting period, was considered. The $389,000,
plus profit of $24,830, represent 4.75 percent of the 24.20 percent
increase in revenue required if collected from all service categories as a
~I-
~?'V~.4J
WNF
REVIEWED AND RECOMMENDED FOR BOARD ACTION
INITIATING DEPT./DIV.
1302A-9/85
PM
SUBJECT
RECEIVE ADDITIONAL INFORMATION TO CONSIDER THE
APPLICATIONS FOR REFUSE COLLECTION RATE INCREASES
SUBMITTED BY VALLEY WASTE MANAGEMENT, ORINDA-MORAGA
DISPOSAL SERVICE, INC., AND PLEASANT HILL BAY SHORE
DISPOSAL
POSITION PAPER
PAGE 2 OF 27
DATE
July 14,1989
surcharge. The surcharge on the single-can residential rate is 6S cents.
The Town of Danville requested that consideration be given to transferring
the surcharge on the resi denti al si ngl e-can service to the multi pl e-can
service rate to encourage recycling and mitigate the impact of the rate
increase on senior citizens who predominantly receive single-can service.
The effect on the single and muliple-can service rates under both
assumptions are presented on this attachment.
Orinda-Moraga Disposal Service, Inc. realized a 96.7 percent operating
ratio in the prior period. A determination of the amount of the prior year
net expense charge for Valley Waste Management which, if allowed for
recovery in the current period, woul d produce a 96.7 percent operati ng
ratio for the prior period was requested. The amount so determined of
$236,000 and the surcharge on the si ngl e-can and mul i pl e-can rates under
the two assumptions described above are also presented on this attachment.
Attachment III - Net Incremental Expense Of Recycling Program
This attachment summarizes the features of the Valley Waste Management
recycling program. District staff recommends approval of full-scale
implementation, and the establishment of a monthly charge of 9S cents per
residential customer. The refuse collector should be required to maintain
separate records for the recycl i ng program to permit determi nati on of the
actual net incremental expense during the current rate-setting period.
Based on the actual results obtained, the Board may wish to consider
incorporating into next year's rate-setting process the allocation of some
portion, or all, of the net incremental expense of the recycling program to
commercial accounts.
Attachment IV - Return On Net Tangible Fixed Assets
An explanation of the Return on Net Tangible Fixed Assets of 42 percent for
the current rate-setting period was requested. The explanation is provided
on this attachment.
Orinda-Moraga Disposal Service, Inc.
Attachment V - Acme Landfill Disposal Expenses
At the July 6, 1989 Board Meeting, the Board was provided with the effect
on the revenue requirement and representative collection rates if the
forecasted Acme 1 andfi 11 di sposal expenses were reimbursed to the refuse
collector at cost, with no profit. The effective operating ratio produced
thereby would be higher than 94 percent, reflecting the lo~er gross profit
margi n provi ded. The Board requested that the effect on the revenue
requirement and representative collection rates be provided based on
13028-9/85
SUBJECT
RECEIVE ADDITIONAL INFORMATION TO CONSIDER THE
APPLICATIONS FOR REFUSE COLLECTION RATE INCREASES
SUBMITTED BY VALLEY WASTE MANAGEMENT, ORINDA-MORAGA
DISPOSAL SERVICE, INC., AND PLEASANT HILL BAY SHORE
DISPOSAL
POSITION PAPER
PAGE 3
OF 27
DATE
July 14, 1989
producing effective operating ratios of 94 and 95 percent; the resultant
Return on Equity and Gross Profit were also requested. The information
requested is presented on this attachment.
Attachment VI - Prior Year Net Expense Charge
Although not requested in the rate application, the surcharge on collection
rates which would be required to provide recovery of $87,000, primarily
representing the effect of the Acme landfill disposal fee increase in the
prior rate-setting period, was presented in response to Board interest. If
the $87,000, plus profit of $5,553, are collected from all service
categories as a surcharge, the increase in collection rates required would
increase from 17.50 percent to 20.25 percent. The surcharge to be added to
the si ngl e-can resi denti al rate woul d be 20 cents. Tho effect on the
residential single and multiple-can service rates if the respective
surcharges were added to all service rates, or if the surcharge on the
single-can residential service were transferred to the multiple-can service
rate, is presented on this attachment.
Attachment VII - Net Incremental Expense of Recycling Program
This attachment summarizes the features of the Orinda-Moraga Disposal
Service recycling program. District staff recommends the establishment of
a monthly charge of 95 cents per residential and commercial customer. The
refuse collector should be required to maintain separate records for the
recycli ng program to permit determination of the actual net incremental
expense during the current rate-setting period. Based on the actual
results obtai ned for the current period, the Board may wi sh to consi der
incorporating into next year's rate-setting process the allocation of a
greater portion of the net incremental expense of the recycling program to
commercial accounts.
Pleasant Hill Bay Shore Disposal
Attachment VIII - Recycling Program
Th i s attachment summarizes the features of the Pl easant Hill Bay Shore
Disposal recycling program. The refuse collector does not seek to obtain
the net incremental expense of the recycl i ng program through the current
rate-setting process. The refuse collector should be required to maintain
separate records for the recycling program to permit determination of the
actual net incremental expense during the current rate-setting period.
In a letter dated July 12, 1989, which is provided with this Position
Paper, Mr. Ken D. Little, representing Pleasant Hill Bay Shore Disposal,
i ndi cates agreement with the process for a reconsi deration of coll ection
rates within the current rate-setting period, if forecasted disposal
13028- 9/85
SUBJECT
RECEIVE ADDITIONAL INFORMATION TO CONSIDER THE
APPLICATIONS FOR REFUSE COLLECTION RATE INCREASES
SUBMITTED BY VALLEY WASTE MANAGEMENT, ORINDA-MORAGA
DISPOSAL SERVICE, INC., AND PLEASANT HILL BAY SHORE
DISPOSAL
POSITION PAPER
PAGE 4 OF 27
DATE
July 14, 1989
expenses change significantly upon Acme landfill ceasing operations. Mr.
Little implies that the setting of recycling program rates within the
current rate-setting period instead of at the beginning of the period
should similarly be available.
The District staff requested projected operating results of the recycling
program for use in determining the net incremental expense for the current
rate-setting period. We were advised by this refuse collector that it was
not seeki ng reimbursement of the net expense because of its concern "that
the cost of regulation may exceed benefits derived"; however, it believes
that the recycling rate should be set quarterly to account for fluctuations
in market prices of recyclables.
The District's established annual rate-setting procedures are intended to
be applied consistently for all of its franchised refuse collectors and
extend to the setting of all collection rates. District staff believes a
quarterly setting of the recycling component of the collection rates to be
unnecessary as the changes to the initially-determined recycling rate would
not be significant enough to warrant a more frequent than annual review.
Di strict staff has prev iousl y recommended a departure from customa ry rate-setti ng
procedures used by the Di strict due to the general uncertai nty surroundi ng the
disposal expenses to be incurred by Valley Waste Management and Orinda-Moraga
Disposal Service when the Acme 1 andfill ceases operations. A reconsi deration of
the collection rates established for these refuse collectors in the current
rate-setting process should be permitted if a significant change to the forecasted
disposal expenses during the current rate-setting period occurs as a result of the
implementation of successor disposal fees. The establishment of the collection
rates on the basis of existing disposal fees and reconsideration of such rates
within the rate-setting period when a significant uncertainty is dispelled affords
an appropriate balancing of the interests of the rate-paying public and those of the
refuse collectors.
Additional correspondence received since July 6, 1989 from Mr. Ken D. Little,
representing Orinda-Moraga Disposal Service, Inc. and Pleasant Hill Bay Shore
Disposal, and the general public are provided with this Position Paper.
RECOtI4ENDATION: Consider the additional information provided and establish the
respective collection rates for Valley Waste Management, Orinda-Moraga Disposal
Service, Inc. and Pleasant Hill Bay Shore Disposal effective July 1, 1989.
13028-9/85
Attachment I
Valley Waste Management
Acme Landfill Disposal Expenses
(Disposal Expenses Based on $47/Ton)
Single Pe rce nt Return
Operating Ratio Can Increase on Gross
Nominal Effective Rate Required Equity Profit
Profit on Disposal
Fees Allowed 94% 94% $16.10 24.20% 24.95% $680,000
Profit on Di sposal
Fees Not Allowed:
Alternative (A) 94% 96% $15.75 21.60% 16.16% $453,000
Alternative (B) 91.0% 94% $16.10 24.20% 24.95% $680,000
Alternative (C) 92.5% 95% $15.90 22.91% 20.56% $567,000
Alternative (A)
Alternative (B)
Alternative (C)
Disposal expenses are reimbursed at cost, without profit;
therefore, the effective operating ratio is 96 percent and
gross profit is 4 percent, if a 94 percent operating ratio is
appl i ed to all operati ng expenses, other than di sposal
expenses, in determining the revenue requirements.
Disposal expenses are reimbursed at cost, without profit; a 91
percent operating ratio is required to be applied to all
operating expenses, other than disposal expenses, to produce a
6 percent gross profit, or an effective operating ratio of 94
percent.
Di sposal expenses are reimbursed at cost, without profit; a
92.5 percent operating ratio is required to be applied to all
operating expenses, other than disposal expenses, to produce a 5
percent gross profit, or an effective operating ratio of 95
percent.
SSS/Rate Setting #3/VWM-Att I
Attachment II
Valley Waste Management
Prior Year Net Expense Charge
(Disposal Expenses Based on $47/Ton)
Prior Year Net Expense Charge:
$389,000
If Allowed Currently, Will Provide A Prior
Year Operating Ratio Of:
94%
If A Prior Year Operating Ratio Of 96.7%
Were To Be Obtained, The Prior Year Net
Expense Charge Allowed Would Be:
$236,000
$389,,000/941
$236,,000/96.71
Surcharge On
Single & Multiple
Multiple Cans Cans
Surcharge On
Single & Multiple
Multiple Cans Cans
Single-Can Rate
$.65
$.25
$1 .40
$.40
$.15
$.85
Multiple-Can Rate
Effect of Surcharge on:
Single-Can Rate:
Current Rate $12.95 $12.95 $12.95 $12.95
Increase, Excluding
Surcharge 2.50 2.50 2.50 2.50
Surcharge Per Above .65 .40
$16.10 $15.45 $15.85 $15.45
Multiple-Can Rate:
Current Rate $ 5. 85 $ 5. 85 $ 5. 85 $ 5. 85
Increase, Excluding
Surcharge 1.15 1.15 1.15 1.15
Surcharge Per Above .25 1.40 .15 .85
$ 7.25 $ 8.40 $ 7.15 $ 7.85
SSS/Rate Setting #4/VWM-Att II
Attachment III
Valley Waste Management
Net Incremental Expense of Recycling Program
Recycling Program Description:
Weekly residential curbside collection
of newspaper, glass bottles, aluminum
cans, and PET plastic containers in
three stackable plastic bins.
Implementation Schedule:
Three-month pilot program of 3,600
residences completed in June 1989.
Upon approval by the District, full-
scale implementation to be completed
in six months.
Communities:
Pil ot Program:
and Alamo
Danville, Lafayette,
Full-Scale Program: Entire Valley
Waste Management service area
Net Incremental Expense:
95 cents per month per residential
customer
Staff Proposal:
The Incremental Expense of 95 cents
per month is based on 1 i mited pil ot
program results, real ization of less
than optimal sales prices for
recyclables due to lack of storage
capacity, and surveys of other similar
recycling programs.
It is proposed that separato records
of revenues and expenses for the
recycling program be maintained during
the current rate-setting period. Based
on the more accurate determination of
the Net Incremental Expense produced,
the Board may wi sh to consi der
apportioning to commercial accounts
some portion, or all, of the net
expense of the recycling program in
the next rate-setting period.
SSS/Rate Setting #3/VWM-Att III
Attachment IV
Valley Waste Management
Return On Net Tangible Fixed Assets
At the July 6,1989 public hearing, a Board inquiry was made regarding
the 42 percent Return on Net Tangible Fixed Assets reported on Attachment
I of the District analysis prepared by Price Waterhouse.
Prior to January 1, 1988 when Valley Waste Management came into existence
with the acquisition of the net assets of Valley Disposal Service, Inc.
by a subsidiary of Waste Management, Inc., fixed assets of Valley
Disposal Service were depreciated using accelerated and straight-line
depreciation methods for financial statement and rate application
purposes. As of January 1, 1988, assets were restated to fair market
values and the difference between the assets, net of liabilities, and the
purchase price was recorded as Goodwill. Fixed assets of Valley Waste
Management are depreciated on a straight-line basis. However, for refuse
collection rate-setting purposes, fixed assets are carried at historical
cost and continue to be depreciated using the accelerated and
straight-line bases. As a result of the continued use of historical cost
and accelerated depreciation, the net book value of fixed assets is lower
than would otherwise occur if depreciation were wholly on a straight-line
basis. Additionally, purchases of new trucks were defGrred in
anticipation of implementation of an automated collection system. The
lower net book value of fixed assets produced accounts for the unusually
high rate of return.
Price Waterhouse will present additional supporting information on this
issue, which was still being developed as of this writing, at the July
20, 1989 Board Meeting.
SSS/RAte Setting#3/VWM-Att IV
Attachment V
Orinda-Moraga Disposal Service. Inc.
Acme Landfill Disposal Expenses
(Disposal Expenses Based on $47/Ton)
S i ngl e Percent Return
Operating Ratio Can Increase on Gross
Nominal Effective Rate<l> Required Equity Profit
Profit on Disposal
Fees Allowed 94% 94% $16.40 17.50% 46.40% $245,000
Profit on Disposal
Fees Not Allowed:
Alternative (A) 94% 95.4% $16.15 15 .76% 33.09% $184,000
Alternative (B) 92.2% 94% $16.40 17.50% 46.40% $245,000
Alternative (C) 93.5% 95% $16.20 16.28% 37.05% $202,000
Alternative (A)
Alternative (B)
Alternative (C)
Note: <1>
Di sposal expenses are reimbursed at cost, without profit;
therefore, the effective operating ratio is 95.4 percent and
gross profit is 4.6 percent, if a 94 percent operating ratio is
appl ied to all operating expenses, other than di sposal
expenses, in determining the revenue requirements.
Disposal expenses are reimbursed at cost, without profit; a 92.2
percent operating ratio is required to be applied to all
operating expenses, other than disposal expenses, to produce a
6 percent gross profit, or an effective operating ratio of 94
percent.
Disposal expenses are reimbursed at cost, without profit; a
93.5 percent operating ratio is required to be applied to all
operating expenses, other than disposal expenses, to produce a 5
percent gross profit, or an effective operating ratio of 95
percent.
Single-can rate shown is the City of Orinda rate.
SSS/Rate Setting #3/0-M Att V
Attachment VI
Orinda-Moraga Disposal Service, Inc.
Prior Year Net Expense Charge
(Disposal Expenses Based on $47/Ton)
Prior Year Net Expense Charge:
$87,000
If Allowed Currently, Will Provide a
Prior Year Operating Ratio of:
94%
Surcharge On
Single & Multiple
Multiple Cans Cans
Single-Can Rate
Multiple-Can Rate
$.35
$.15
$.75
Effect of Surcharge on:
Single Can Rate:
Current Rate $13.95 $13.95
Increase, Excluding
Surcharge 2.45 2.45
Surcharge Per Above .35
$16.75 $16.40
Multiple-Can Rate:
Current Rate $ 6.45 $ 6.45
Increase, Excluding
Surcharge 1.15 1.15
Surcharge Per Above .15 .75
$ 7.75 $ 8.35
SSS/Rate Setting #3/0-M Att VI
Attachment VII
Orinda-Moraga Diposal Service, Inc.
Net Incremental Expense of Recycling Program
Recycling Program Description:
Weekly residential curbside collection
of newspaper, glass bottles, aluminum
cans, and P.E.T. plastic containers in
three stackable plastic bins.
Implementation Schedule:
Board approval for the
program was given on April
Full-scale implementation
uled to begin in September
recycling
6, 1989.
is sched-
1989.
Communities:
City of Orinda and Town of Moraga
Net Incremental Expense:
95 cents per month per residential
and commercial customer
Staff Proposal:
The Net Incremental Expense of 95 cents
per month is based on projections of
operating results, pilot program
results of another District-franchised
refuse collector which realized less
than optimal sales prices for
recyclables due to lack of storage
capacity, and surveys of other similar
recycling programs.
It is proposed that separate records
of revenues and expenses for the
recycling program be maintained during
the current rate-setting period. Based
on the more accurate determination of
the Net Incremental Expense produced,
the Board may wi sh to consi de r
apportioning to commercial accounts
a greater portion, or all, of the net
expense of the recycling program in
the next rate-setting period.
SSS/Rate Setting #3/0-M Att VII
Attachment VI II
Pleasant Hill Bay Shore Disposal
Recycling Program
Recycling Program Description:
Weekly residential curbside collection
of newspaper, glass bottles, aluminum
cans, and P.E.T. plastic containers
using one plastic bin. Curbside
collection will occur in all of Zone
3, except the community of Clyde where
drop-off bins would be used.
Implementation Schedule:
Board approval for the recycl ing
program was given on January 26, 1989;
the drop-off recycling program for the
community of Cl yde was approved on a
three-month trial basi s. The recy-
cling program was implemented in June
1989.
Communities:
Communities of Pacheco and Clyde
Net Incremental Expense:
None. The refuse collector notified
the District that it did not seek
reimbursement for the Net Incremental
Expense in the current rate-setting
process; however, the collector
believes that the Net Incremental
Expense charge shoul d be set
quarterl y.
Staff Proposal:
Separate records of revenues and
expenses for the recycling program
should be required to be maintained
during the current rate-setting
period. Based on the more accurate
determination of the Net Incremental
Expense produced, and whether the
refuse collector decides to seek
reimbursement at that time or not, the
Board may wish to consider
apportioning some portion, or all, of
the net expense of the recycling
program to commercial accounts in the
next rate-setting period.
The determination of the Net
Incremental Expense of the recycl i ng
program should be incorporated in the
District's established annual schedule
for consideration of changes to refuse
collection rates.
SSS/Rate Setting #3/PH-Att VIII
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July 5, IS
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Central Contra Costa Sanitary District
Attention Recyclable Wastes Division
5019 I mhoff Place
Martinez, CA
" 'I I ,0 lid
~ . 1 . ,I
l' f . ",.',1
Dear Sirs:
Recently there has been an upscaled effort on your part to coHect
recyclable material in my neighborhood. A truck fiUed with glass,
newspapers, and aluminum cans every Wednesday morning to my house to
pick up any of these items that I have saved during the course of a week. I
didn't realize it before but I could have recycled a lot before this project
started! We receive a total of 14 newspapers a week, consume a dozen soft
drinks, and occasionally drink some bottled beverages. This creates a lot of
excess waste that I. a consumer, have no use for, but you change it back into
usable material.
Before having my reusable material picked up by one of your trucks, I
had to take it to specially located recycling bins. I felt this was a hassle, just
Hke many other people did. I didn't see why I had to spend my time to aid
someone else in making money. Now I don't have that problem. You have
provided me with three containers, one for each type of waste, which I place
out on my driveway once a week. This is much easier for me and I bet you
get much more material to recycle.
I'm sure a lot of money was invested into this project, but I know it will
payoff in the long run. With the amount of waste recycled, much space is
saved in quickly fiJling land fiUs. This wiU provide cheaper raw material in
the coming years, give us a HttJe more precious time to find other land fiH
sites, and give consumers, like myself, the satisfaction of helping solve a
major problem.
I commend your efforts and hope for continued success in your efforts.
Yours truly
~Ii
Venu Kotamraju
Student of Acalanes High School
P.s. Mr. Grodin, owner of VaHey Waste Management. is my neighbor. What
coincidence!!"'"
8tePben 3t. minton 3r.
3471 ~rackbau>k 9?oab
fafavette. ~a. 94549
RIECfEDYlElO
JUL 13 1989
CCCSD '-i1."'~
~"~!'.t'.T,.RY Of THr' 1'1'1", r. ,
Ju 1 y 11, 1989
Board of Directors
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553-4392
Re: Rate Increase Hearing
Firstly, my thanks for hearing me and delaying your decision on this most
comp I ex matter.
Secondly, since Mr. Skaggs reserved the right to have the last comments at the
public hearing, I would request your indulgence it permitting me to respond to
his comments about my presentation and to comment further on a few items which
were possibly beyond the scope of the hearing.
PROFITABILITY
Profit level is certainly "in the eye of the beholder". Mr. Skaggs is the seller
and in his eye, VWM's profit is too low. To my eye, as the buyer, his profit is,
and/or wil I be too high if his rate request or the Staff's recommendation is
adopted.
Mr. Skaggs mentioned that he had supplied the Board with evidence supporting his
position. I have not seen it, but if it consists mainly of experience from other
subsidiaries of Waste Management, Inc., it is specious. In my remarks at the
previous interim rate hearing, I referred to an article appearing some time
previously in the Wall Street Journal stating in essence that WMI was the
darling of Wall Street because of its profitability and potential. It mentioned
that much of WMI's success was due to its unusual record of securing substantial
rate increases from rate setting agencies. (The article may be available through
Staff files or those of VWM- it takes about 30 days to get a copy from the WSJ
Research Dept. in New York City.)
A friend of mine mentioned recently that he had bought WMI stock four years ago
and was pleased that it had quadrupled in value. The attached copy of the most
recent Standard and Poors data sheet on WMI certainly bears out my friend's
statement and furnishes additional insight into WMI's operations and
profitability. If the profits from VWM are indeed below those of WMI's other
subsidiaries, you are al I to be congratulated!
Another friend who is a native of this area has told me that the garbage haulers
in San Francisco have become multi-millionaires and the private family
franchisees in this area are certainly not poor...Garbage is not only a big
business, but a profitable one, particularly considering the income from
unregulated dumps. (Would VWM continue to be interested in its contract if they
were facing dumping in municipal dumps? If the answer is yes, then they must
feel that the contract is profitable.) Also. the attached article from The Wal I
Street Journal Centennial edition on WM is interesting in that it is singled out
along with a few other companies showing unusual future potential.
WMI stock closed at 53 on July 10...during the period of 1971 though 1987. its
high was 48 1/2 and its low was 5/16...
ACME FILL
Perhaps the Board and Counsel were as surprised as I was to hear Mr. Skaggs
announce to Acmeis lawyer and the public that he could not find cause for
litigation of Acme's actions. He also gave us a brief lecture on the lawyeris
responsibility to the court to not bring frivolous action. This was certainly my
first notice that VWM had looked at the matter. He further suggested that The
Springhill Valley Assn. ask any of its members who are lawyers to study the
situation for cause. Perhaps this idea results from his experience as President
of The East Bay Municipal Utility District and the suit filed by customers of
that utility.
I can only approach and Judge the Acme "can of worms" as a layman. If it looks
like a dog, acts like a dog and barks like a dog- it is a dog. Acme looks like a
monopoly, acts like a monopoly and speaks like a monopoly..........
I believe that monopolies are only legal if they are established by a lawful
authority for the common good. They are subject to regulation in pursuance of
that common good. The problem goes well beyond Mr. Skaggs statement that Acme
has hung out i~sign, posted its price and says you can dump here or not.
Acme has not been established as a legal monopoly nor has it been regulated to
date. Its actions in controlling where VWM can dump and shifting its owners dump
points to less expensive facilities resulting in unreasonable fees to VWMiS
customers is unconscionable if not il legal.
WMI is not inexperienced in antitrust suits (refer Standard and Poors sheet and
past Wall Street Journal articles on a suit in Southern California against WMI).
It is not in VWM's financial interest to pursue legal relief unless:
1. They are promised reimbursement through rates from the Board, or
2. The Board joins in the action. or
3. The Board refuses to reimburse VWM for excessive dump fees in the new rate
structure.
If the Board fol lows Staff recommendation to give VWM a profit on Acme fees, VWM
has a financial dis-interest in lowering the fees. If profit is not al lowed on
fees. at least VWM remains neutral.
If the Board has not done so already, I suggest they obtain expert antitrust
counsel to determine independantly if cause exists for action against Acme and
the party or parties who have standing. It would also be interesting to learn in
what type of action the customers of VWM have standing.
RECYCLING
Either intentionally or unintentially, Mr. Skaggs misconstrued my remarks on
newspaper burning. It was clear to me and, I believe, clear to the Board. that I
was illustrating that newspapers could be burned if an approved incinerator was
in operation at times when scrap paper was in surplus. could not be sold and
would therefore have to alternately be dumped. The Board has probably seen the
informatIve article in the July 6. 1989 edition of the Contra Costa Times. page
15A describing successful incineration units in operation and complying with
"pollution laws" (Mr. Skaggs' words.)
Further. we learn that there is a bil I in the legislature designed to greatly
encourage the use of recycled paper, offering various tax incentives to users
and replacing the lost tax revenues with monthly charges to garbage customersl
bi II s! ! !
**********************
After further reflection. I have two additional comments:
1. The Board should seriously consider requesting the Grand Jury investigate the
County/s garbage problems in general and the Acme situation in particular.
2. The Board should request Staff to prepare a long term plan with the objective
of the County's Sanitary Boards and the Board of Supervisors joining in
establishing a municipal utility to own and operate facilities to piCk up and
dispose of our waste. Only with such control and cooperation can we solve the
current and future prOblems in a manner in the pUblic interest.
Sincerely,
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Waste Management 2428M
NYSE Symbol WMX Optlonl on Phil. (Feb-May-Aug-Nov) In SAP 500
Price Ringe P-E Rltlo Dlvldlnd Yield SIP Ranking Beta
Mar. 9'89 1989
427/. 447/e-4()3/. 21 0.48 1.1% A 1.22
Summary
Thll company II thl natlon'l largllt provldlr of comprlhlnllvl wlltl managlmlnt IIrvlcel oNerlng
coUlctlon and dllPOII' IIrvlc.. for rllldlntla~ commlrclal and Indultrlal ganlratorl of loUd, liquid,
chemica', nuclear and hazardOUI walt... GOOCl laming I growth II expected to continue for the nlxt
IIverll yearl, reflecting further expanllon of lolld waltl operltlonl and Itrong S1alnl for the Chemical
Waite Management unit.
Current Outlook
Earnlngl for 1989 may rill to $2.45 a lharl from
the $2.05 reported for 1988.
An Increa.. In the $0.12 quartlrly dtYkIend It PO"
Ilble In m1cH989.
Revenues for 1989 !Ire anticipated to rise over
20%, reflecting additional acquisitions of local
haulers, more municipal contracts. continued geo-
graphic expansion, and higher prices. The toxic
waste disposal business will benefit from capacity
additions and a greater number of wastes ex-
cluded from land disposal. Margins should improve
as the year progresses. Long-term prospects ap-
pear favorable, based on the company's leader-
ship position and the strong growlh seen for the
solid waste .disposal industry.
Revenues (Million $)
Quarter: 1989
Mar. ...................
Jun. ....................
Sep. ...................
Dec. ...................
1988
768
887
938
973
3,566
1987
584
658
757
759
2,758
1986
433
491
528
565
2.018
Revenues for 1988 (preliminaryl rose 29% from
those of the prior year. Pretax Income was up
28%. Alter taxes at 37.8%, versus 44.0%, net
income advanced 42%, to $2.05 a share from
$1.46. Results for 1988 include a $0.05 a share
nonrecurring gain.
Common Share Earnings ($)
Quarter: 1989 1988 1987 1986
Mar. ................... EO.51 0.42 0.31 0.22
Jun. .................... EO.63 0.51 0.37 0.26
Sep. ................... EO.65 0.57 0.39 0.29
Dec. ................... EO.66 0.55 0.39 1.00
E2.45 2.05 1.46 1.76
Per Share Data ($)
eo IIIII 1 eo
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1083 111I4 1085 ,- 1087 I- I II8ll
Important Developments
Nov. '88- WMX sold publicly $1.6 billion principal
amount of subordinated zero.coupon liquid yield
option notes. due 2012, at $250 per $1,000 note.
The notes are e)(changeable for common shares of
the company's 81%-owned Chemical Waste
Management subsidiary at $29.04 a share. Net
proceeds of some $396 million would be used lor
the retirement of debt and acquisitions.
Aug. '88_ The company completed an agreement
with Henley Group to form a new company,
Wheelabrator Technologies Inc., through the
merger of all of WMX's waste-to-energy assets
with Henley's 8O%-owned Wheelabrator
Technologies subsidiary. WMX has a 22% interest
in the new company, which is the leading waste.to.
energy firm with assets and annual revenues of
over $1 billion.
Next larnlngl rlportllpected In mld-May.
Yr. End Dec. 31 1988 '1987 '1986 1985 '1984 '1S183 '1882 ~1981 '1980 '1979
Tangible Bk. Val. NA 5.53 4.64 3.24 2.37 3.28 2.91 2.20 1.68 1.16
Earnings 2.05 1.46 1.76 0.86 0.74 0.63 0.60 0.49 0.36 0.26
Dividends 0.45 0.36 0.27 0.22'/z 0.19'/. 0.16 0.12'1. 0.09'1, 0.07'1. 0.05'12
Payout Ratio 22% 25% 15% 26% 26% 25% 22% 19% 20% 21%
Prices-High 42'/. 48'/z 297/e 19 12 15'Iz 14 1 ()3/. 8'12 37/.
Low 31'/, 27'1. 17'1. 107/e 671. 9'/1 6'/2 6'/1 3 2'1.
PIE Ratio- 21-15 33-19 17-10 22-13 16-9 25-15 23-11 21-13 23-8 14-8
011. II oriq reptd. Ad, tor .lk. diY(e) oI100Cil> Apt. 1l1e1. lOOCil> Dee. 11185. 2OO'Ib Jun. IlMl1. ,. Ren.cte merge< Of .c:qui.~ion. E-E.tim.led.
HA-Ho! AVllllble.
Standard NYSE Stock Reports "arch 17, 19S9 Standard & Poor'a Corp.
Vol. 5e/No. 53/ Sec. 20 ~ . _ _ t ....... ear, AI......1looonotl 25 Broadway, NY, NY 10004
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2428M Wal Management, Inc.
Income Data (Million $)
Ye.r '!l. ()per.
Ended Inc. 01 HeIBel. EfI. T.I '!l. Hellne.
Dec. 31 Ren. ()per.lne. Ren. Cap. EIIl. Depr. Inl Exp. Tu" Rele Meline. of Ren.
'1987 2.758 876 31.8 558 232 40.6 584 44.0% 327 11.9
~8L1,Ql~_~59 32.7 ~18 181 534 507 26.9% 371 18.4
1985 1.625 506 31.1 365 140 642 318 46.0% '172 10.6
'1984 1.315 382 29.1 386 109 53.1 248 42.5% 143 10.8
'1983 1,040 296 28.5 219 85 24.7 209 42.5% 120 11.6 ~.
'1962 967 288 29.7 220 74 21.9 196 45.5% '107 11.0
'1981 773 226 29.3 145 63 14.4 154 45.6% 84 10.9
'1960 560 163 29.1 142 48 10.0 101 45.8% 55 9.8
'1979 382 112 29.4 109 37 7.4 68 45.8% 37 9.6
'1978 307 87 28.4 79 28 6.9 53 47.8% 27 8.9
Balance Sheet Data (1IllIIon .)
Curr. Total RelOn Long Comnton TotallnY. '!l. LT Debt RelOn
Dec. 31 Cllh AaMls UIb. RatIo AaMb AaMb T,"" Debl E~ CapItal of Cap. E~
1987 20 599 590 1.0 3.351 10.4% 468 1,885 2,634 17.7 18.5%
1986 198 638 474 1.3 2,795 14.3% 403 1,580 2,196 18.3 26.7%
1985 25 504 Jbf 1.4 2,26; 7.9% 483 1,137 1,780 272 16.6%
1984 9 445 356 1.2 1,966 8.6% 489 888 1,497 32.7 17.1%
1983 52 367 233 1.7 1,338 9.5% 168 768 1,039 16.2 16.7%
1982 86 358 198 1.8 1,170 10.2% 166 664 914 18.2 19.0%
1981 88 273 172 1.6 833 11.5% 128 418 812 20.9 22.5%
1980 37 144 101 1.4 575 10.7% 103 301 449 22.8 21.2%
1979 6 86 81 1.1 407 9.6% 79 196 308 25.5 20.2%
1978 23 92 61 1.5 344 8.2% 70 163 260 27.1 19.0%
,
Data as orig rep1d 1. Relli>cta me<oe< or Ieqv;.ilioll 2. Refledl I~ing chlnge
Business Summary
This company is the nation's largest provider of
comprehensive waste management services. Reve.
nue and pretax profit breakdown in 1987:
Revs. Prolits
North American group.........
Chemical waste group ........
!!1ternational group.............
75%
20%
5%
The Waste Management of North America group
collects, processes and disposes of solid waste in
46 states, the District of Columbia, and three Ca.
nadian provinces. In 1987 operations in California,
Florida and Illinois accounted for about 26% of
revenues. The company also provides street clean-
ing services. markets portable lavatories, and
builds wastewater treatment plants and waste-to'
energy facilities.
Chemical Waste Management (81 %.owned)
processes and disposes of toxic wastes. Facilities
mclude the nation's largest commercial toxic
waste incinerator in Chicago and other treatment
and disposal centers throughout the country. Re.
medial clean-up of abandoned sites is also per.
formed. Chem-Nuclear provides low-level radioac-
tive waste management services.
Dividend Data
72%
27%
1%
Dividends were initiated in 1976. A dividend rein'
vestment plan is available. A "poison pill" stock
purchase right was adopted in 1987.
~-----.----~-"-.- ----...--..-----
AmI. 01 Date EI-dlvd. Slock 01 Payment
Oivd. S Oecl. Date Record Date
o t 2 May 27 Jun. 16 Jun. 22 Jul. 7'88
O. t2 Aug. 15 Sep. 15 Sep. 21 Oct. 6'88
012 Nov. 29 Dec. t5 Dec. 21 Jan. 5'89
0.12 Feb. 13 Mar. 16 Mar. 22 Apr. 6'89
Next dividend meeting: May '89.
Finances
The company believes it will be faced in the nor-
mal course of business with fines and penalties for
remedial work at its landfill aites. WMX has been
subiec\ to I11titrust investigations in its solid waste
operations.
Capitalization
Long T.nn Debt: $953,174,000.
Minority 'ntere.t: $125,376,000.
Common Stock: 225,733,575 aha. ($1 par).
Institutions hold approximately 58%.
Shareholders of record: 18,200.
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Off\c1-3003 BlIlteflleld Rd. Oak Brook. HI 60521 TeI-(312) 572<<100 Ctwmn & CEO-D. L Bunlrock. Prll-P. B Rooner Seer-H. A.
Gelz SVP & CFO-D. F. Flynn. VP-Tr... & m.ator ContKI-J_ E Koenig D1n-O l Buntrock. J E Dempsey. 0 N. Emmonl. D. F.
Flynn. P H. Huizenlle. l L Morgan. P Ptdef7~n. J R. ~')<l. P B Rooney. A. TrowllnClge T~1eI Agent & RegIItr.-Hema Trull &
Savin.g~f!a!.~,E>~~IOO ~~. in Oeiaw"6 III lil6e. E..,I-30.650
"fo11t~h()(\ n.a. ~ obU..d horn ~c.. ~ to be~. ~ it. eecwacy and oompieteneu.re ftOt ou,a,.nteed Mtct\8_ Y. P&ui
A12 THE WALL STREET JOURNAL CENTENNIAL EDITION
A Select Few Leaders For the '90s
I
Waste Management Inc.
Oak Brook, lU.
Long ago, Waste Management discov-
ered how to turn trash to cash. Now the
world's biggest waste hauler is pursuing a
new form of garbage alchemy.
With communities beset by growing gar-
bage disposal woes, Waste Management
has moved swiftly to become the nation's
largest recycler. Until recently, waste in-
dustry experts had consigned recycling to
the realm of environmental dreamers, at
best a means to buff up the industry's tar-
nished image. But the scaie of Waste Man-
agement's recycling effort is already sig-
naling a major change in the way America
could be handling its waste by the next
century.
Consider this: Some 150 million tons of
residential and commercial solid waste are
produced in the U,S. each year-enough
scrap aluminum, paper, iron and glass to
replace enormous amounts of costly virgin
commodities. Already, the volume of recy-
cled material is huge. The No. 1 export
shipped from New York and Boston, for
example, is recycled paper. It would take a
line of dump trucks stretching from New
York City to Cleveland to contain all the
plastic recovered annually from soda bot-
tles and milk jugs.
Waste Management officials talk enthu-
siastically about the company's role as a
high-volume generator of recycled com-
modities, circulating material back into
society, not just hauling it away. "Up to
now we've been recycling and reprocessing
on a bench scale," says Harold Gershowitz,
Waste Management's executive vice presi-
dent. Mr. Gershowitz foresees recycling as
a both praiseworthy and profitable enter-
prise as markets for recycled materials de-
velop over the next 10 to 15 years.
It is no coincidence, of course, that
Waste Management's interest in recycling
is growing at a time when many cities
have concluded that the expense of dump-
ing or burning trash is spiraling out of
control. Pressed to the wall to find alterna-
tives to overflowing landfills, a number of
cities hope to recycle 25% of their trash in
the next decade.
Some are aiming even higher. Seattle,
for example, wants to recycle 60% of its
garbage by the beginning of the next cen.
tury. Says Seattle solid waste official Tim-
othy Kroll: "By the year 2000 most cities
will find that recycling is their NO.1 tool to
manage waste."
Should that happen, companies like
Waste Management could end up right
alongside power and water utilities as an
essential municipal service.
LITTLE & SAPUTO
ATTORNEYS AT LA W
PETER T. SAPUTO
GISELLE A. JURKANIN
KEN D. LITTLE
49 QUAIL COURT, SUITE 311
WALNUT CREEK, CA 94596
t
(415) 944-5000
FACSIMILE
(415) 944-1112
July 12, 1989
Walter Funasaki
Contra Costa Central
Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Re: Pleasant Hill Bay Shore Disposal
1989 Rate Application Hearing; Potential Mid-year Review
Dear Walter:
At the hearing held on July 6, 1989, the Board discussed the
uncertainties surrounding the various disposal fees for the
foreseeable future. In particular, it was noted that under the
present circumstances it is most likely that some dramatic change
in disposal costs may occur within this rate year. The Board then
discussed the desirability of a mid-year review of the rates should
the disposal fees change dramatically whether by increase or
decrease. Mr. AIm noted that the franchise agreements neither
specifically provide for such a review nor prohibi t it. He
advised, upon mutual agreement between the District and the
collectors, that such a review could occur. The Board then
expressed its desire to obtain the agreement of the collectors for
such a mid-year review.
This letter, then, constitutes the agreement of Pleasant Hill
Bay Shore Disposal ("collector") to a mid-year (interim) review of..
the collection rates should there be any substantial change in the
disposal costs t whethp.r b~T increase or decrease. The mechanism for
ini tiating such review is not clear. Presumably, should the
disposal rates dramatically increase, the collectors will apply for
a review. Similarly, should the disposal cost dramatically
decrease, the Board would be interested in seeking a review. In
any event, it is the collectors understanding that the Board, and
now itself, mutually agree that such a review may occur on the
happening of either circumstance.
The collector also just commenced a recycling program in
Pacheco. Insufficient information was available to warrant a rate
increase request at the time of the annual review. The collector
has suggested that a review at a later date when more information
is available would be more appropriate. This would seem to be in
line with the Board's current position on mid-year review as well
Walter Funasaki
July 12, 1989
Page 2
as the franchise agreement.
enclosed.
A copy of the prior letter is
We trust that this letter accurately sets forth the agreement
of the parties. If for some reason the Board does not agree that
this is the understanding, please notify us immediately.
Very truly yours,
LITTLE & SAPUTO
x ~ rj. {J7d/
Ken D. Little
KDL/mk
cc: Pleasant Hill Bay Shore Disposal
I
.
'-.
"
LITTLE & SAPUTO
A TTORN"'T!i .4 r loA M'
"ETER T. SArUTO
GISELLE A. JURKANIN
Kr::-.: [) LITTLE
49 QUAIL COURT, SUITE 111
WALNUT CREEK, CA 94S96
(415) 944-5000
F.4C~/'\/JJ.F:
(415) <)4-t-JII~
June 2, 1989
Walter Funasaki
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Re: Recycling Program
Dear Walter:
This letter
'..:h i ch YOl: ;, ~.}: c~d
recycling program
commencing, so the
1S 1n reply to your letter dated May 24, 1989, 1n
rcn dJditicmal updated inforr:laticn ;)hout. t~lC:
in Zone 3. As you know, the program is Just
information available is essentially the same.
After careful consideration, Pleasant Hill Bay Shore Disposal
("PHBD") has decided not to seek reimbursement for the expenses
incurred in the recycling program at this time. That is, it does
not seek any rate adjustment for the expenses of the recycling
program. This decision is based upon a sincere effort to keep
costs down for their customers.
The area involved in this recycling program is so small that
PHBD fears that the cost of regulation may exceed benefits derived.
Accordingly, it feels the pUblic's interest is best served if PHBD
absorbs the increased overhead cost (to be offset solely by any
revenue that might be produced). By not seeking to be reimbursed
for expenses incurred, the rate review process should be
significantly reduced at proportionally greater cost saving. That
cost saving can be passed on to customers by way of slowing the
rate increase in collection rates.
PHBD reiterates its position that it is more fair to customers
to review recycling costs more frequently, such as quarterly. This
would permit a more accurate tracking of market prices for
recyclables. The recycling surcharge could be based on market
fluctuations (up or down) at the end of each quarter. This single
factor should require little staff time. Limiting adjustments to
annual reviews, while convenient to the District, may result in
inflated rates for longer periods of time. After some experience
less review may be possible.
This letter should not be construed to mean that PHBD does not
intend to cooperate with CCCSD in operating the recycling program.
Nothing could be further from the truth. In fact, it intends to
l
~
Walter Funasaki
June 2, 1989
Page 2
comply fully with the terms and conditions of t:he
agreement with respect to the recycling program. PHBD
making an effort to reduce the costs to customers while
the service the District requires.
Very truly yours,
LITTLE & SAPUTO
~..~--
/ ~n ~~.\. Little
cc: Sue McNulty Rainey, President
franchise
is simply
providing
LITTLE & SAPUTO
PETER T. SAPUTO
GISELLE A. JURKANIN
KEN D. LITTLE
A TTORNEYSAT LAW
49 QUAIL COURT, SUITE 311
WALNUT CREEK, CA 94596
;;-
(415) 944-5000
FACSIMILE
(415) 944-] 11 2
July 12, 1989
Walter Funasaki
Contra Costa Central
Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Re: Orinda-Moraga Disposal Service, Inc.
1989 Rate Application Hearing; Potential Mid-year Review
Dear Walter:
At the hearing held on July 6, 1989, the Board discussed the
uncertainties surrounding the various disposal fees for the
foreseeable future. In particular, it was noted that under the
present circumstances it is most likely that some dramatic change
in disposal costs may occur within this rate year. The Board then
discussed the desirability of a mid-year review of the rates should
the disposal fees change dramatically whether by increase or
decrease. Mr. AIm noted that the franchise agreements neither
specifically provide for such a review nor prohibit it. He
advised, upon mutual agreement between the District and the
collectors, that such a review could occur. The Board then
expressed its desire to obtain the agreement of the collectors for
such a mid-year review.
This letter, then, constitutes the agreement of Orinda-Moraga
Disposal Service, Inc. ("collector") to a mid-year (interim) review..
of the collection rates should there be any substantial change in
the dispcaal :::osts, \'!heth2r by increac~ or decrease. The mechanism
for initiating such review is not clear. Presumably, should the
disposal rates dramatically increase, the collectors will apply for
a review. Similarly, should the disposal cost dramatically
decrease, the Board would be interested in seeking a review. In
any event, it is the collectors understanding that the Board, and
now itself, mutually agree that such a review may occur on the
happening of either circumstance.
Walter Funasaki
July 12, 1989
Page 2
We trust that this letter accurately sets forth the agreement
of the parties. If for some reason the Board does not agree that
this is the understanding, please notify us immediately.
Very truly yours,
LITTLE & SAPUTO
KDL/mk
cc: Orinda-Moraga Disposal Service, Inc.
LITTLE & SAPUTO
ATTORNEYSATLAW
RECEIVED
PETER T. SAPUTO
GISELLE A. JURKANIN
KEN D. LITTLE
49 QUAIL COURT, SUITE 311
WALNUT CREEK, CA 94596
JUL 1 ~'1989
(415) 944-5000
FACSIMILE
(415) 944-1112
July 19, 1989
eee:;:>
AO:.~::-':::7rih T::;N
VIA MESSENGER
Roger Dolan
General Manager
Contra Costa Central Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Re: Pleasant Hill Bay Shore Disposal
Rate Application - Residential/Commercial subsidy In
Rates
Dear Roger:
At the end of our presentation at the public hearing held on
July 6 for the rate applications for the current period, I
suggested to the Board that they might direct the staff to work
with Pleasant Hill Bay Shore Disposal ("PHBD") to adjust the rates
internally to correct the current subsidy of the residential rates
by commercial rates. After the meeting, you indicated that this
might not have been entirely clear to the Board. This letter
amplifies those remarks.
Simply adjusting the rates across the board on a percentage
basis (which is normally the policy) will result in the highest
commercial rates in the County. PHBD believes that this might lead
to some drop-off in usage which would ultimately lead to even
higher residential costs as a result. PHBD believes it would be
better to have the residential, commercial and box accounts all pay
for their own costs. Stated_~not~e~ w~y~ ratQer than applying a
94% operating ratio overall to total revenue requirements, it would-
be preferable to apply such a ratio to each category individually
to ensure that each category is not subsidized by another.
Attached to this letter as Exhibit "A" is a spread sheet that
divides revenue and operating expenses into four (4) categories.
The categories are residential, commercial, box, and total. The
statistics used on this spread sheet are those used by the staff
for this rate application period (which PHBD,asserts are too low).
That spread sheet shows that the residential service taken alone
will yield a loss of nearly $9,000. While the commercial will
yield income of approximately $41,000 and the box accounts income
of approximately $3,000.
Roger Dolan
July 19, 1989
Page 2
From the spread sheet, the following can be derived:
Residential
Total Expense $133,811
Franchise Fee $667
Total Residential Expenses $134,478
Revenue At Current Rates $119,700
Revenue At Rates Suggested By CCCSD Staff $125,5501
Revenue Required to Achieve a 94% Operating
Ratio $143,019
Rate Increase Percentage Required To
Produce a 94% operating Ratio 19.5%
Staff Computed Rate At Approximately 4.89%
Yields A Single Can Rate Of $13.45
A Non-Subsidized Residential Rate Should Be $15.30
Similarly, to produce an operating ratio of 94% in the other
two categories, commercial and box, the commercial revenues should
equal $328,398, and the box revenues should equal $116,178. This
means that the box rates should increase only 8.5% for a rate of
$238.70 while the commercial rates should be frozen rather than
raised. This could result in a potential excess revenue of nearly
2% in the commercial accounts. However, rather than reducing the
commercial accounts, we believe it would be more advisable to
simply leave the rates "as is". so as to offset any potential drop
in box revenues which are subject to spot usage.
We trust this helps to explain more fully the proposal as
suggested at the last public hearing. We believe the proposal has
merit and is a worthwhile policy. Please note that the proposal
is revenue neutral and will not result in additional income to
PHBD.
IThis rate will result in a projected revenue loss of 8.928%
or approximately 4.89% rate increase over the present rates.
Roger Dolan
July 19, 1989
Page 3
Again, thank you for your interest in this subject and your
kind consideration and cooperation in making the information
available to the Board.
Very truly yours,
LITTLE & SAPUTO
KDL/mk
enclosure
cc: Pleasant Hill Bay Shore Disposal
Board of Directors
Walter Funasaki
~~_.
~ -
-1
Kie . 1 tIe