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Home My WebLink AboutCFW Solid Waste FundCode Compliance Department Solid Waste Fund Policy and Fee Review Brandon Scott Bennett, Code Compliance Director December 3, 2019 Purpose 2 •Overview of Services •Financial Review •Challenges •Policy Goals •Policy Considerations •Next Steps Enterprise Fund Review •On June 25, 2019, City Council received updates on the Stormwater, Solid Waste & Environmental Funds •Policy discussions for the Solid Waste and Environmental Protection Funds continue •This presentation focuses on the Solid Waste Fund Enterprise Fund Rate Review Solid Waste Fund 5 •Adopted in 1982 to fund: •Federal and State mandates for solid waste collection and disposal services including: •Resource Conservation and Recovery Act –EPA cradle to grave control of solid and hazardous waste including reduction and reuse policies •Texas Health & Safety Code: 361 Solid Waste Disposal Act •Environmentally safe/ compliant waste collection and disposal operations •Provide solid waste services that assign costs and fees for users of the service •Fast Facts: •29 million annual service collections •188,793 tons of residential garbage/recycle collected at curb •35,821 tons of residential garbage/recycle collected at drop off stations 6 Weekly Garbage Pay as you throw (volume based rates) 1.$22.75 = 96 gallons 2.$17.50 = 64 gallons 3.$12.50 = 32 gallons Weekly Recycling Separate bin provided at no additional charge to the customer Weekly Yard Waste Collected and turned into mulch versus filling the landfill Curbside Services: 231,000 Residential Customers Monthly Bulk Large oversized items that do not fit in garbage cart Additional bulk pick up can be scheduled for an extra fee 7 Value Added Residential Services 4 Drop-off Stations Excess household waste Larger garbage items Small equipment Electronics Recycling Scrap Metal and Materials Shredding Brush –FREE Mulch Hazardous Waste Goodwill Donations Environmental Collection Center Household Hazardous Waste “Help Yourself Shelf” –Reuse options Additional Services Collection after Major Storm Cleanup Collection after neighborhood projects 8 Blended Commercial and Residential Services Illegal Dump Collections & Investigation Litter Abatement & Homeless Camp Clean-up Street Sweeping Dead Animal Collection Code Enforcement •3,186 illegal dump tons collected •3,374 litter sites cleaned •850 tons of litter collected •6,000+ roadway miles swept annually •6,000+ dead animals collected annually •40% of Code Enforcement Officers •Specialty Support for Nuisance Abatement City Landfill 9 •City Owned –Operated by Republic Services •MWBE Subcontractor •22 Year Shelf Life (Based on Current Volume) •Accepts Commercial/Residential Waste •Yard Waste Mulched Onsite •976,000 Tons Processed 2019 •FY2019 Lease Revenue: $4.2 mil Landfill Intake Analysis 10 Non-City: 36% Intake Volume FY 2009: Residential Customer Focus City Residential: 24% Intake Volume Non-City: 76% Intake Volume FY 2019: Commercial Customer Focus *City Residential includes less than 1% City facility waste City Residential 64% Intake Volume Landfill Volume Analysis 11 - 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00 60,000.00 70,000.00 80,000.00 Southeast Landfill Tons by Month City Tons Non-City Tons Linear (City Tons)Linear (Non-City Tons) Non-City Waste Contract Amendment Goes into Effect December 2009 59 Year Landfill Life December 2019 22 Year Landfill Life Non-City Waste Consumes 37 Years of Life in 10 years 12 Interpolation of Market Rate over timeRecycle Credit Landfill vs Recycle Revenue Over Time 13 Landfill vs Recycle Revenue Over Time 2008 2019 Difference Revenue 4,748,932 1,813,554 (2,935,378) Expense 1,870,706 2,684,903 814,196 Net 2,878,226 (871,348)(3,749,574) Recycle CreditInterpolation of Market Rate over time Current Financial Situation •Last rate increase 2006: 13 Years •Population Change:+35% •Trash Carts In-Service:+51% •Total Inflation*:+29% •Increased Service Demands/Delivery Examples •Homeless camp abatement:+210% (FY2020 Costs $570,051) •Litter abatement & enforcement sweeps:+294% (FY2020 Costs $1,137,864) •Adopted FY2020 Budget Deficit: ($6.9M) projected deficit to grow annually •Current Expenses and projected expenses will exceed operating revenues for the foreseeable future 14 * Inflation calculated from 2006 to 2019 (Federal Reserved CPI) 15 Solid Waste Fund 5 Year Trend Unaudited Adopted 2016 2017 2018 2019 2020 Total Revenue $ 59,164,135 $ 60,294,867 $ 62,126,181 $ 62,048,127 $ 62,504,438 Operating Expenses 56,884,355 58,333,960 62,263,919 66,042,764 68,837,479 Pay Go Capital 3,542,081 5,790,500 2,989,166 1,780,000 575,000 Total Expenditures 60,426,436 64,124,460 65,253,085 67,822,764 69,412,479 Source /(Use) of Net Position $ (1,262,301)$ (3,829,593)$ (3,126,904)$ (5,774,637)$ (6,908,041) Net Position* $ 22,786,387 $ 18,956,794 $ 15,829,890 $ 10,055,253 $ 3,147,212 * -Operational Net position ending FY2016; subsequent years based on budgetary operational impact -does not factor capital fund, debt fund, OPEB, and other year-end entries. Commercial Waste Revenue 1% Miscellaneous Revenue 1% ECC -Disposal Fee 1% Cont Reqd Educ Pymts 2% Container Hauling Fee 4% Landfill Lease Revenue 6% Residential Billing Revenue 75% 16 Where Does the Money Come From? FY2020 Approved Budget Revenue Amount Percentage Residential Billing Revenue $ 51,785,072 75% Landfill Lease Revenue 3,816,611 5% Container Hauling Fee (Grants of Privilege)2,978,433 4% Cont Reqd Educ Pymts 1,134,315 2% ECC -Disposal Fee 800,245 1% Miscellaneous Revenue 765,450 1% Commercial Waste Revenue 573,036 1% Interest Earnings 234,023 0% Yard Cart Sales 145,000 0% Bad Debts Recovered 126,327 0% Non-Compliant Brush/Bulk 75,038 0% Scrap Metal Revenue 30,000 0% Compliant Brush/Bulk 22,103 0% Waste Vehicle Permit 18,785 0% Revenue Total 62,504,438 90% Use Of Fund Bal/Net Position 6,908,041 10% FY2020 Approved Budget Total $ 69,412,479 100% 17 Where Does the Money Go? Residential Services Contracts, 67% Convenience Centers, 5%Container Hauling Pass- through, 4% Total Solid Waste Administration, 4% Recycling Expense, 3% Code Field Ops, 3% Gen Fund Adminstrative Cost, 2% Code Environ Collection Center, 2% Utility Billing, 2% Litter Abatement and Enforcement, 2% Illegal Dump Clean-up, 2% Neighborhood Stability Section, 1% Pay and Go Capital, 1% Homeless Camp Abatement, 1% Debt Service, 1% SW Outreach, 1% FY2020 Approved Budget Expenses Amount Percentage Residential Services Contracts $ 46,194,317 67% Convenience Centers 3,549,421 5% Container Hauling Pass-through (Grants of Privilege)2,978,433 4% Total Solid Waste Administration 2,878,859 4% Recycling Expense 1,881,576 3% Code Field Ops 1,769,604 3% Gen Fund Administrative Cost 1,553,739 2% Code Environ Collection Center 1,360,015 2% Utility Billing 1,299,098 2% Litter Abatement and Enforcement 1,137,864 2% Illegal Dump Clean-up 1,129,746 2% Neighborhood Stability Section 874,791 1% Pay and Go Capital (Vehicle replacement)575,000 1% Homeless Camp Abatement 570,051 1% Debt Service 504,988 1% SW Outreach 453,629 1% Dead Animal Pickup 238,458 0% Street Sweeping 198,124 0% Keep Fort Worth Beautiful 145,159 0% PILOT 119,607 0% FY2020 Approved Budget Total $ 69,412,479 100% 18 Operational and Financial Analysis •2013 Comprehensive Collection and Recycling Analysis –Contract Negotiations •2017 Comprehensive Solid Waste Plan –Updated and Added Commercial/Industrial Waste •2018 NTCOG Regional Landfill Review •2019 Matrix Staffing Analysis •2019 -2020 Collection, Recycling and Landfill Analysis –Burns and McDonnell Consultants •Residential Collection Service Levels, Costs, Contract Considerations and Options •Recycling Costs, Forecast, Contract Considerations and Options •Landfill –Full Analysis of Value, Contract Considerations, Diversion, Life and Options 19 Challenges •Program-Funding Alignment –Expenses for some programs (litter control, street sweeping, etc.) need to be reviewed to determine the most appropriate funding source •Balanced Budget –Current revenues are not sufficient to cover current service levels/expenses and capital requirements •Sustainable Rates –Rates are not currently structured to cover the existing and corresponding costs incurred within the fund (Curbside Collection, Landfill Tipping Rate, Grant of Privilege, etc.) •Life of Landfill –Existing contract and tipping fees encourage high use of landfill for more than residential waste. •Landfill Waste Streams –Construction & Demolition debris along with higher volumes of commercial waste is reducing the life of the landfill •Future Landfill Planning –Current revenue structures are not sufficient to build a capital reserve for future landfill/disposal requirements •Cost of Recycling –Revenue from recycling material is not sufficient to cover recycling expenses 20 Policy Goals 1.Sustainable Fund: Maintain a solvent and sustainable Solid Waste Fund 2.Service Alignment: Align services with the most appropriate funding source 3.Market Rates: Ensure competitive market rates for all revenue streams 4.Program Cost Recovery: Fully recover program costs and capital 5.Landfill Life: Maximize the life of the landfill 6.Landfill Reserve: Ensure funding for replacement of the current landfill 21 Policy Options: Transfer Services to Environmental Fund Programs Currently in Solid Waste FY2020 Adopted Budget Policy Goals Alignment Litter Abatement and Enforcement $1,137,864 Sustainable Fund Service Alignment Market Rates Program Cost Recovery Homeless Camp Abatement $570,051 Sustainable Fund Service Alignment Market Rates Program Cost Recovery Illegal Dump Clean-up $1,129,746 Sustainable Fund Service Alignment Market Rates Program Cost Recovery Street Sweeping $198,124 Sustainable Fund Service Alignment Market Rates Program Cost Recovery Keep Fort Worth Beautiful $145,159 Service Alignment Total (FY 2020 Dollars):$3,180,944 22 Program Component Policy Consideration FY2020 Adopted Budget Policy Goals Alignment Grant of Privilege Increase Rate (Currently 5% of Gross Receipts) $2,978,433 Sustainable Fund Service Alignment Program Cost Recovery Solid Waste Franchise Fee Implement Franchise or Similar System New –Under Review Sustainable Fund Service Alignment Market Rates Program Cost Recovery Commercial Cart Collection Increase Monthly Rate (Currently $23.00 per Month) $573,036 Sustainable Fund Service Alignment Market Rates Program Cost Recovery Policy Options: Improve Commercial Revenue Collections 23 Policy Options: Landfill Intake Revenues, Rates and Replacement Program Component Policy Consideration FY2020 Adopted Budget Policy Goals Alignment Landfill Replacement (20 Years)Replace, Regional Partnership, Privatize Under Review Sustainable Fund Market Rates Program Cost Recovery Landfill Life Landfill Reserve Add On Landfill Tipping Fee New Fee to Cover Replacement and Commercial System Costs New -Under Review Sustainable Fund Market Rates Program Cost Recovery Landfill Life Landfill Reserve Prohibit Construction and Demolition Waste at City Landfill Extend Landfill Life (less volume/less revenue) New -Under Review Sustainable Fund Landfill Life Landfill Reserve Landfill Gas Extraction Partner with Republic Services to extract/sell gas from Landfill New -Under Review* Sustainable Fund Service Alignment Market Rates Program Cost Recovery Landfill Reserve *Estimated annual value of $450,000 and requires two to three year development schedule 24 Policy Options: Revenue Program Component Policy Considerations FY2020 Adopted Budget Policy Goals Alignment Residential Cart Collection Current Rates: $12.50, $17.50, $22.75 / Month $51,785,072 Sustainable Fund Market Rates Program Cost Recovery Residential Recycling Collections Frequency of Collections & Types of Recycling Material Under Review Sustainable Fund Market Rates Program Cost Recovery Landfill Life Comprehensive Solid Waste Plan Start, Stop and Continue Review Under Review Sustainable Fund Service Alignment Market Rates Program Cost Recovery Landfill Life Landfill Reserve 25 Program Component Policy Consideration FY2020 Adopted Budget Policy Goals Alignment Residential Cart Collection (Waste Management) *Extend, Adjust and Extend, Rebid, Franchise *Current contract runs through March 2023. Can be extended two more 10 year periods. $36,986,661 Sustainable Fund Market Rates Program Cost Recovery Recycle Processing (Republic Services) *Extend, Adjust and Extend, Rebid, Combine with Collections *Current contract runs through March 2023. Can be extended two more 5 year periods. $1,881,576 Sustainable Fund Market Rates Program Cost Recovery Landfill Life Landfill Reserve Policy Options: Expenses -Contract Renewals/Rebid 26 Next Steps •Complete Operational and Financial Audits with Consultant o Operational Audits Complete: December 2019 o Comprehensive Landfill Audit Complete: April 2020 •Report back to City Council on Consultant Findings: Second Quarter FY2020 27 Questions? Solid Waste Rate History 28 1982 1984 1986 1989 1990 1992 1994 1997 1998 1999 2001 2002 $5.50 $6.10 $6.35 $6.85 $8.85 $9.80 $10.30 $11.00 $11.50 $11.75 $12.50 $13.75 Trash Cart Size 2003 2004 2006 2008 -2012 2014 2015 -2019 32 Gallon $8.00 $11.45 $12.75 Recession $12.50 (0.25)Contract Savings 64 Gallon $13.00 $16.45 $17.75 $17.50 (0.25) 96 Gallon $18.00 $21.45 $22.75 $22.75 Commercial (Carts) $23.00 $23.00 $23.00 $23.00