Fleet Financing

The city plans to increase the garbage collection rate; discharge study approved

City staff are proposing a fee increase for garbage collection services and the city commission will hold a public hearing on the proposal at its April 19 meeting.

Paul Skubinna, the director of public works, briefed commissioners on the costs, needs and operations of the remediation program and the proposed fee increase at their April 5 meeting.

The City’s Public Works Department annually reviews and analyzes the funding needs of the Sanitation Fund to ensure adequate funding for day-to-day operations, capital improvements, debt service and emergencies.

The City proposes an increase in the garbage collection rate

The last residential and commercial rate increase for garbage collection services was in March 2020.

Meanwhile, department costs have increased due to increased operating, equipment, fuel and landfill costs, Skubinna said.

Staff recommends a $1.35 increase for garbage pickup from $13.65 to $15 per month.

The rate for seniors would increase by 93 cents, from $9.57 to $10.50 per month.

The additional pickup fee would increase by $4, from $11 to $15 per month. Picking up a major appliance would increase by $4, from $16 to $20.

The cost of a 3-yard commercial container, which is the most commonly used in the city, would increase by $6.60, from $66.20 to $72.80 per month.

Cardboard recycling would increase by $2 from $20 to $22 per month.

The City is considering investigating landfill options

Staff recommends that the city maintain the monthly vacant business rate of $5 and increase the flat rate surcharge for overweight containers by $10 from $105 to $115 per month, as well as increase the empty running fee by $5 from $50 to $55 per month.

If approved, the new rates will take effect May 1.

Skubinna said about 87% of the city’s residents use the city’s sewerage services, leaving about 13% of residents as customers of the Republic’s services. Republic is the city’s private company that owns the landfill. It used to be Montana Waste Systems.

Skubinna said he believes the city’s market share has grown over the years and the upcoming sewer and utility bill merger will attract more customers for the convenience.

The city’s sanitation rates remain among the lowest in the state, according to a chart from the city’s public works department.

The city’s utility division is also recommending a change to the late penalty from 60 days to 30 days, which means an unpaid utility bill would receive a penalty before the next bill is generated, according to staff. the city.

“The increases are necessary to continue to provide required collection and disposal services as well as to fund capital improvements, particularly fleet replacement and maintenance, and to meet debt service requirements. Additional staff may be needed in the future. The rate increases will provide the flexibility to hire staff as needed,” according to the staff report.

According to city staff, the cost of fuel has increased by 24% and will continue to increase. Staff expect fuel expenses to increase by approximately $100,000 this year.

The cost of equipment has also increased, according to staff.

Proposed rate increase for garbage collection [2019]

The sanitation department needs to purchase a residential sideloader and a commercial dump truck and the cost of these two vehicles was $400,000 in the past.

That cost is now $506,000 and the price continues to rise, according to city staff.

Skubinna said sanitation vehicles are “notorious” for high wear given their usage and maintenance costs can be high, so they are working on developing a fleet replacement cycle for reduce the average age of their vehicles.

In 2016, the city went into debt to buy a large chunk of new vehicles all at once because interest rates were low and their maintenance costs high.

This brought the average age of the residential sewerage fleet down to around five years, which Skubinna says is a good place to be.

City’s sanitation division updates fleet to cut maintenance costs, proposes rate hike [2019]

Skubinna said their 2016 projections of maintenance cost savings from purchasing new vehicles stayed pretty close and the city saved about $1.5 million.

But now the interest rates aren’t as low and the costs are still going up, so they’re working on a plan to buy a few vehicles a year and adjusting the rates is part of that equation, he said. -he declares.

Landfill costs are also increasing and driving up costs to the city.

The city contracts with Republic Services for use of the landfill and the current contract expires in 2024 with some extension options. But the contract comes with automatic inflation factors based on the consumer price index.

The stipulated compensation owed by the city for disposal is a base rate plus an annual escalation of 1 times the consumer price index multiplied by the previous year’s base rate, according to city staff.

The pandemic has caused the CPI to rise, and according to the February 2022 press release from the United States Bureau of Labor Statistics, “the index for all items rose 7.9% for the 12 months. ending in February. The 12-month increase has grown steadily and is now the largest since the period ending January 1982.”

Proposed rate increase for garbage collection [2017]

The discharge agreement stipulates that the percentage increase in the base rate cannot exceed 7%.

“As such, the city could face large increases in the base rate for disposal in future years due to an increase in the CPI,” according to city staff.

At the April 5 meeting, commissioners also approved a professional services agreement with Advanced Engineering and Environmental Services, Inc., AE2S, not to exceed $155,217.

AE2S and its sub-consultant Jacobs, formerly CH2M Hill, will conduct the first phase of a solid waste study.

The overall study is a “planning-level feasibility study that evaluates alternatives for the disposal of the city’s solid waste,” according to the staff report.

Landfill disposal fees have increased and are expected to continue to increase, according to city staff.

Lease approved for city-owned property near Manchester exit [2019]

“Therefore, the city would like to write a report that outlines and evaluates alternative options for the city to consider for solid waste disposal, including privatization, maintaining the status quo, or constructing a new waste disposal site. municipal landfill. Phase 1 of the study consists of compiling feasible alternatives and performing a fatal flaw analysis or initial review,” according to the staff report.

Skubinna said they hope to have this study completed by the end of the year and will present it to the commission in a working session to discuss the results and consider options.

The tonnage of waste collected by the city has also increased, according to city data.

In the first two months of 2022, the city hauled nearly the same tonnage of trash to the landfill as all of 1992, Skubinna said.

The landfill now costs $2.33 per ton more than in 2020 at $30.31, an increase of 8%, according to city staff.