HomeMy WebLinkAboutAGENDA BACKUP 05-05-83
Central Contra Costa Sanitary District
BOARD OF DIRECTORS
NO.
IV-l
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
DATE
April 26, 1983
TYPE OF ACTION
SUBJECT
CONDUCT PUBLIC HEARING TO CONSIDER APPLICATION
FOR REFUSE COLLECTION RATE INCREASE
PUBLIC HEARING
SUBMITTED BY
Walter Funasaki
INITIATING DEPT./DIV.
Administrative
ISSUE: A public hearing is to be held on May 5, 1983 to consider an
appl ication by Orinda-Moraga Disposal Service, Inc. to increase its refuse
collection rates in Zones 1 (Orinda) and 1A (Moraga).
BACKGROUND: At the April 21, 1983 Board Meeting, the Board of Directors
scheduled a publ ic hearing on May 5, 1983 to consider Orinda-Moraga Disposal
Service, Inc. IS rate increase appl ication.
Publ ic notices have been scheduled for publication in two newspapers of general
circulation during the two weeks preceding the public hearing date in compliance
with statutory requirements.
RECOMMENDATION: Conduct a publ ic hearing on Orinda-Moraga Disposal Service, Inc. 's
refuse collection rate increase appl ication on May 5, 1983, and determine
appropriate rate schedules and implementation dates.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
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ANALYSIS OF ORINDA-MORAGA DISPOSAL SERVICE, INC.
RATE INCREASE APPLICATION
Orinda-Moraga Disposal Service, Inc. (Orinda-Moraga) submitted its appli-
cation for refuse collection rate increases on March 24, 1983. The rate
increase of 12.3% which has been applied for is requested to be made
effective lias soon as possib1e". Orinda-Moraga was last granted a 10.1%
rate increase effective April 1, 1981.
District staff has performed an analysis of Orinda-Moraga's rate increase
application. The overall objective of the analysis was to evaluate the
reasonableness of the expense projections contained in the application
and, after giving effect to rate-setting adjustments, compute the
percentage increase in revenue required to produce a 95% operating ratio.
Approach to the Analysis
The analysis was completed by performing the following tasks:
Review the rate increase application for completeness and
internal accuracy.
Review the st~tement of operations for the calendar year ended
December 31, 1982 provided in the rate increase application,
and verify its accuracy by comparison to unaudited financial
statements prepared by Orinda-Moraga's certified public
accountant.
Review the projected statement of operations for the fiscal year
ended March 31, 1984 submitted in support of the rate increase
appl ication.
Based on the results of the analysis, the projected expenses for the
fiscal year ended March 31, 1984 submitted by Orinda-Moraga are considered
to be reasonably stated.
Summary of Schedules Included
A. Statement of operations for the year ended December 31, 1982, and
projected expenses for the fiscal year ended March 31, 1984. In this
statement, adjustments are made to certain expenses to el iminate ex-
penses not allowed for rate-setting purposes, and restate expenses
which are treated differently for financial statement presentation
than for rate-setting purposes.
B. Rate adjustment analysis, showing the percentage increase in revenue
which would produce a 95% operating ratio. This analysis also shows
the return on investment produced by the revenue increase.
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C. Schedule of comparative increases in expenses. This schedule compares
increases in projected expenses to those of two prior years by major
categories of expenses.
D. Comparative ratio analysis schedule. This schedule shows operattng
ratios, return on investment, and rate increases requested and computed
for the projected period and the prtor year.
E. Schedule of residential and commercial service rates for Orinda-Moraga
and other refuse collectors in the Bay Area.
Explanation of Significant Expenses
Orinda-Moraga's total expenses are projected to increase by 8.4% during the
fiscal year ended March 31, 1984. Expenses which are projected to increase
greater than 5% are explained on the page following the statement of operations
schedule. These explanations provide adequate substantiation for the figures
they support.
Acme Landfill Corporation Dividends
The stockholders of Orinda-Moraga, and other refuse collectors operating in
central Contra Costatounty, own the Acme Landfill Corporation (Acme). As
the ownership shares in Acme are held in the names of the stockholders of
Orinda-Moraga, dividends of $9,000 in 1982 and $36,000 in 1981 were received
by them directly and are not recorded in the Orinda-Moraga financial
statements.
Acme's dumping charges increased from $1.OO/cubic yard to $1.25/cubic yard
on April 1, 1983. A review of charges of other nearby dump sites dtsclosed
that Acme's charges are amoung the lowest.
Implementation of Consultant's Suggestions
On April 7, 1983, the Board of Directors determined that the following
suggestions by Price Waterhouse were to be implemented in the analysis of
the present rate increase application:
A. Operational information should be included as part of the rate appli-
cation.
Orinda-Moraga provided the following operational information for use in
the rate application analysis:
Number of customers by zone, by class
Number of tIps at Acme Landfill
Number of drivers and helpers by zone
Number of revenue producing trucks by zone
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B. Franchise fees should be excluded from allowable operating expenses in
calculating the revenue requirement under the Operating Ratto method,
and should then be added to the revenue requirement so determined to
produce the total revenue requirement.
Franchise fees were excluded from allowable operating expenses and the
revenue requirement shown on the rate adjustment analysis schedule was
determined as described above.
C. Return on Equity as a method of calculating allowable profit should be
provided to the Board in addition to the customary Operating Ratio
calculation.
The computation of Orinda-Moraga's allowable profit under the Return
on Equity method using a 20% rate of return is presented below:
Stockholders. equity as of December 31, 1982:
Capital Stock
Capital contributed in excess
of par value
Retained Earnings
Total Stockholders' Equity
Rate of return
Net Income, after
income taxes
Add back estimated
income taxes
Income before income taxes
(Allowable profit)
Operating expenses as adjusted, per
statement of operations
Add: Franchise fees $5,400
I nterest and bank
Charges $9,597
Less: Interest
paid to
stock-
holders (1,020) 8,577
Allowable profit
Revenue required
Revenue provided by Other Income, etimated
Revenue required, net
Projected revenue
Increase in projected revenue required
Percentage increase in revenue required
-3-
$ 6,000
11 ,987
143,379
$1 61 ,366
20%
$ 32,273
3,500
$ 35,773
1,747.955
13,977
1 .761 ,932
35,773
$1 ,797,705
10,000
1 ,737,705
1 ~ 699, 149
$ 88,556
5.2%
The use of the Return on Equity method produces a percentage increase in
revenue required of 5.2%, which is lower than the 8.6% increase determined
under the Operating Ratio method. A 20% rate of return was used in the
return on equity calculation in consideration of Price Waterhouse~s
suggested 14% to 20% range and the following industry and general business
rates of return:
1982 average 90-day Treasury Bill
rate
11.1%
Industry Return on Equity %:
Browning - Ferris
Waste Management
1981
19.4
22.5
1980
17.4
21.2
D Officers' compensation should be reviewed for reasonableness by re-
ferring to industry compensation guides.
The compensation of Orinda-Moraga's officers was reviewed and is
considered reasonable.
"
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Explanation of projected increases in expenses greater than 5%
Wages and Employee Benefits - projected increases are based on the
union contract currently in effect, which extends through
December 31, 1985 and increased worker's compensation insurance
rates.
Payroll Taxes - projected increases are based on wages and
increase in proportion to wages.
Dumping Charges - projected increase is based on Acme Landfill
Corporation's dumping charge increase from $1.00 to $1.25 per
cubic yard effective 4/1/83.
!"
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r-'NDA-MORAGA DISPOSAL SERVICE, II~
RATE ADJUSTMENT ANALYSIS
Fiscal Year Ended March 31, 1984
Actual revenue, year ended December 31, 1982
$1,699,149
Projected revenue, fiscal year ended March 31, 1984
$1 ,699, 1 49
$1,747,955
Projected operating expenses,
as adjusted, fiscal year ended March 31, 1984
Projected revenue required to produce
95% operating ratio
$1,839,953
Add: Projected franchise fee
Projected revenue required,
adjusted for projected franchise fee
5,400
$1,845,353
Increase in projected revenue required,
fiscal year ended March 31, 1984
$ 146,204
Projected net income
$ 91,998
Percentage increase in projected revenue
required
8.6%
Percentage increase computed
Percentage increase applied for
8.6%
12.3%
Investment Base:
Accounts Receivable
Fixed Assets
$ 108,823
420,630
$ 529,453
Projected Return on Investment
17.4%
~7"',
~
~
ORINDA-MORAGA DISPOSAL SERVICEJ INC.
COMPARATIVE INCREASES IN EXPENSES
OVER PRIOR 12 MONTH PERIOD
Proj. FYE 3/31/84 Actual VE 12/31/82 Actual VE 12/31/81
Expense Increase Expense Increase Expense Increase
Operating Expenses Amount % Amount ! Amount 1
Labor $ 45J468 7.2 33,051 5.6 51,137 9.4
Employee Benefits 43,323 28. 1 11 ,982 8.4 (2,062) (1.4)
fuel 7,662 5.0 4,840 3.3 25,559 20.8
All Other 38,544 5.7 59,883 9.7 102,332 19.8
Total $134,997, 8.4 109,756 7.3 176,966 13.3
"
-8-
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ORINDA-MORAGA DISPOSAL SERVICE, INC.
COMPARATIVE RATIO ANALYSIS
1982 and 1983
1982 Operating Ratio 94.9%
1982 Return on Investment 16.3%
1983 Percentage Increase 8.4%
in Projected Operating Expenses
1983 Rate Increase Requested 12.3%
1983 Rate Increase Computed 8.6%
1983 Projected Return on Investment 17.4%
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Central Contra Costa Sanitary District
BOARD OF DIRECTORS
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
NO. V-2
Ma 5 1983
DATE
April 28, 1983
SUBJECT APPROVE AMENDMENT TO SUBCONTRACTORS LISTED BY DALZELL
CORPORATION FOR DISTRICT PROJECT NO. 3433, PUMP STATIONS
RENOVATI ONS
TYPE OF ACTION
SUBMITTED BY
Jay S. McCoy
INITIATING DEPT.!DIV.
Construction & Services Division
ISSUE: A subcontractor which was not I isted on Dalzell IS bid documents will do
work on District Project 3433.
BACKGROUND: By law, changes in subcontractors or new subcontractors on District
projects must be approved by the Board of Directors. Dalzell Corporation will use
Mountain Cascade for excavation and sewer work on the pump station renovation
project. Such use was not anticipated when bids were submitted. Hence, Mountain
Cascade was not I isted by Dalzell originally. It is now necessary to approve
Mountain Cascade as a subcontractor on the subject project.
RECOMMENDATION: Approve Mountain Cascade as a subcontractor on District Project 3433.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
,2fjJ RAB
BOARD OF DIRECTORS
NO.
May 5, 1983
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
DATE
SUBJECT
A ri I 26
TYPE OF ACTION
8
PROPOSED INCREASE IN FRANCHISE FEE
ASSESSED TO REFUSE COLLECTORS
SET FRANCHISE FEE
SUBMITTED BY
Walter Funasaki
INITIATING DEPT./DIV.
Administrative
ISSUE: District staff proposes that the expense of the recently completed review
of the District's refuse collection rate-setting procedures by Price Waterhouse
be recovered by increasing the franchise fees assessed to Valley Disposal Service,
Inc., Orinda-Moraga Disposal Service, Inc., and Pleasant Hill Bayshore Garbage
Disposal Company.
BACKGROUND: The District has charged the three franchised refuse collectors an
aggregate sum of $20,000 per year since 1978, which is allocated to the refuse
collectors on the basis of residential customer counts. This franchise fee is
intended to defray District expenses in administering the franchises, including
the review of refuse collection rate increase appl ications.
The expense of the review of the District's rate-setting procedures by the
consulting firm of Price Waterhouse totaled $13,250. Suggestions made by Price
Waterhouse in its report have been approved by the Board for implementation in
the District's rate-setting process.
District staff believes it to be appropriate to charge the refuse collectors for
the expense of the consultant's review by increasing the existing aggregate
franchise fee by $4,417 for the next three fiscal years beginning July 1, 1983.
RECOMMENDATION: The annual franchise fee assessed to refuse collectors should be
increased by $4,417 for three fiscal years beginning July 1, 1983, to defray the
expense of the consultant's review.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
IN~~ DEPT./DIV. .
~~
WF
~i')
BOARD OF DIRECTORS
NO. VI-2
Ma 5 1983
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
DATE
SUBJECT
A ril 29 1983
TYPE OF ACTION
1983-1984 EQUIPMENT BUDGET
BUDGET REVIEW
Walter Funasaki
INITIATING DEPT./DIV.
Administrative
SUBMITTED BY
ISSUE: The 1983-1984 Equipment Budget is being submitted for initial review by
the Board of Directors. The Equipment Budget is scheduled for Board approval on
May 19, 1983.
BACKGROUND: The 1983-1984 Equipment Budget is assembled by department, and
contains a description and justification for each equipment request. As a
result of the increase in the cost limit for equipment items from $100 to $250,
only requests for single items, or a set of items, which cost $250 or more are
included in the 1983-1984 Equipment Budget.
As has been the practice in the past, a 10% allowance for minor capital purchases
has been included in the Equipment Budget. However, the 10% allowance has been
computed on a District-wide basis in 1983-1984 whereas, in the past, the
allowance was developed on a departmental basis. Purchases from this allowance
which are $1,000 or less would be permitted upon approval by the General Manager-
Chief Engineer.
A summary of the 1983-1984 departmental requests in comparison to the approved
equipment budgets for the three preceding fiscal years is provided. Additionally,
a summary of equipment by functional groupings is attached.
RECOMMENDATION: Review the 1983-1984 Equipment Budget, and calendar for approval
at the May 19, 1983 Board Meeting.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
INI~ING DEPT./DIV. .
&6-~~F
<c(sD
Cent
BOARD OF DIRECTORS
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
NO. VI-3
Ma 5 1983
5/3/83
DATE
SUBJECT
RECEIVE CORRESPONDANCE REGARDING NOTICE OF MEETING FROM
BUILDING INDUSTRY ASSOCIATION
TYPE OF ACTION
Receive Request
SUBMITTED jlY .
Llyde M. Hopklns
INITIATING DEPT./DIV.
Administrative
BACKGROUND:
The current and past practices of staff in regard to glvlng notice of
meetings at which oral or written presentations concerning District
fees and/or service charges are consistent with Section 54 992 of the
Government Code as mentioned in the attached correspondence.
RECOMMENDATION: Receive correspondance from the Building Industry
Association and instruct staff to comply with request.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
CMH
.....~tlN CAL,/:.
o~'\'" O.p~
~ ;y
B I R
BUILDING INDUSTRY ASSOCIATION
EASTERN DIVISION
BUILDING INDUSTRY ASSOCIATION
1280 BOULEVARD WAY #211, WALNUT CREEK, CA 94595
(415) 932-8884 (415) 444-8711
Marcl1 15, 1983
President and Members of the Board
central Contra Costa Sanitary District
5019 Imhoff place
Martinez, CA 94553
~ II C IE 8 V Ii D /)r'~ r
MAR 1 7 1983 fY'/
cccso c73
SEC"~ARY OF THE plSTRJQT 1".A
, .;,,)
e.G, /t/V1~
~ r.J.~t/
.~(~ '.""'l.-
J'ufl
Dear President and Members of the Board:
Section 54992 (Chapter 13, Part 1 of Division 2 of Title 5, of the
Government Code) includes a provision that requires that notice of
the time and place of the meeting, at which oral or written pre-
sentations may be made on a new fee or service charge, or an
increase in an existing fee or service charge, shall be mailed at
least 14 days prior to the meeting to any interested party who
files a written request with the local agency for such notice.
This section further provides that at least 10 days prior to the
meeting, the local agency shall make available to the public:
(1) data indicating the amount of cost, or estimated cost, required
to provide the service for which the fee or service charge is
levied; and (2) the revenue sources anticipated to provide the
service, including general fund revenues.
Please consider this our formal request to receive by mail both
the meeting notice and the data on any fee or charge matter, as
now required by state law.
Thank you for your compliance with this request.
(!;:Jt2/'(J &
DEAN P. LA FIELD
Executive Vice President
DPLF!g
HEADQUARTERS
REGIONAL OFFICES: (415) 828-9230
Dublin
WEST SAY
(415) 574-5705
San Mateo
SOUTHERN
(408) 243-5889
Santa Clara
NORTHERN
(707) 664-8150
Rohnert Park
AFFILIATED WITH NATIONAL ASSOCIATION OF HOME BUILDERS AND CALIFORNIA BUILDING INDUSTRY ASSOCIATION
Central Contra Costa Sanitary District
BOARD OF DIRECTORS
NO.
May 5, 1983
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
DATE
Apri 1 28, 1983
SUBJECT APPROVAL OF AMENDMENT NO. 13 TO THE TASK A AGREEMENT WIT
METCALF & EDDY FOR ENGINEERING STUDIES. RETURN $6,360
TO THE SEWER CONSTRUCTION FUND.
TYPE OF ACTION
APPROVE CONTRACT
AMENm1ENT
SUBMITTED BY
Joye Kurasaki, Associate Engineer
INITIATING DEPT./DIV.
Engineering Division
ISSUE
Board approval is required to amend the Metcalf & Eddy Task A Agreement.
Amendment No. 13 would return $6,360 to the sewer construction fund.
BACKGROUND
Amendment No. 13 is required in order to bring the Metcalf & Eddy
Task A Agreement into compliance with SWRCB requirements.
As part of Amendment No.3 to the Task A Agreement, Metcalf & Eddy (M&E)
was authorized to perform six engineering studies. During the course
of their work, the scope and the level of effort for three of the studies
were modified. As a result, a cost ceiling increase is required for two
of the studies and a cost ceiling reduction for one study. District
staff has negotiated a contract amendment with M&E for the changes (see
attached sheet for the cost breakdown). The net effect is a $6,360
reduction in the M&E Task A cost ceiling which is due to District staff's
efforts to reduce engineering costs. M&E has completed all of the
engineering studies.
RECOMMENDATION
Authorize the General Manager-Chief Engineer to execute Amendment No. 13
to the Task A Agreement. Return $6,360 to the Sewer Construction Fund.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
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METCALF & EDDY
TASK A AGREEMENT
ANENDMENT NO. 13
ENGINEERING STUDIES
Amend.
A-13 Cost Cost
Cost Ceiling Ceiling
Item Ceiling Increase Reduct. Comrent
l. Raw Sewage Pump Test $13,378
2. Primary Effluent &
Final Effluent Pump
Test $16,336 ($9,213) Reduce scope of
work
3. Filter Backwash Report $ 7,367
4. Air Main Inspection $19,442
5. Concrete Wall Panel
Inspection $16,192 $ 853 Increased level
of effort
6. OUtfall Inspection $15,034 $2,000 Increased level
of effort
TOTAL $87,749 $2,853 ($9,213)
Net Amendment No. 13 = 9,213 - 2,853 = $6,360 reduction
I
BOARD OF DIRECTORS
NO.
May 5, 1983
POSITION PAPER
VIA: ROGER J. DOLAN
General Manager-Chief Engineer
DATE
Apri I 29, 1983
TYPE OF ACTION
SUBJECT
APPROVE A CONTRACT WITH H. J. DEGENKOlB, ASSOCIATES AND
AUTHORIZE $10,700 IN SEWER CONSTRUCTION FUNDS FOR THE
DESIGN OF WASTE HEAT BOilER SEISMIC RESTRAINTS
APPROVE CONTRACT AND
AUTHORIZE FUNDS
SUBMITTED BY
Joye Kurasaki, Associate Engineer
INITIATING DEPT./DIV.
Engineering Division
ISSUE: Board approval is required to execute a contract with H. J. Degenkolb,
Associates, and to authorize sewer construction funds for the design of Waste
Heat Boiler Seismic Bracing.
BACKGROUND: As part of the Stage SA Completion Project, H. J. Degenkolb, Associates,
conducted a seismic evaluation of major equipment in the Solids Conditioning
Building (SCB) and the treatment plant structures. The results of their study
indicated that several structures and pieces of equipment required additional
seismic bracing or anchoring.
Two major equipment items requiring seismic bracing are the Waste Heat Boilers
(WHB's). The two WHB's are part of the Multiple Hearth Furnace (MHF) system
which is scheduled to be tested during August and September, 1983.
District staff has negotiated a contract with H. J. Degenkolb, Associates to
design the seismic restraints for the WHB's. The estimated cost of this contract
is $9,890. The estimated design cost is within the compensation guidelines
prepared by the American Society of Civil Engineers given the size and nature of
the project and the difficulties encountered when designing around existing
structures. H. J. Degenkolb, Associates were selected to prepare this design
because of their highly regarded expertise in seismic engineering and their
famil iarity with the seismic bracing problems at the treatment plant.
The project schedule will provide for the installation of the WHB seismic bracing
prior to the MHF testing. The construction cost for the bracing is estimated at
$SO,OOO. The work on the remaining structures and equipment which were identified
as requiring additional seismic bracing will be done at a later date after the
MHF test program has been completed.
District force account costs to coordinate and administer this contract are
estimated at $810. Thus, the total authorization. that is requested is $10,700.
RECOMMENDATION: Authorize the General Manager-Chief Engineer to execute the
contract with H. J. Degenkolb, Associates and authorize $10,700 in sewer
construction funds for design of seismic bracing of the Waste Heat Boilers.
REVIEWED AND RECOMMENDED FOR BOARD ACTION
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INITIATING DEPT ./DIV.