Case Studies

Project Background

The City of Sunnyvale contracts with a private hauler to provide residential and commercial solid waste, recyclable materials, and green waste collection services. In accordance with the franchise agreement with the private hauler, the hauler is required to submit a calculation of its projected compensation for each forth-coming rate year. The City requires verification of the requested compensation and has contracted with HF&H exclusively since 1997 to perform the review and ensure the hauler’s compensation calculation submitted is accurate and in accordance with the franchise agreement.

In 2008, the City needed to update the then current structure of rates and charges. The City of Sunnyvale needed to conduct a thorough, forward looking Cost of Service Rate Study of more than 300 rates charged for various types and levels of services provided to the City’s residents and businesses.

Additionally, the City wished to develop an updated a user-accessible cost of service study model along with a report detailing how the model was developed; instructions on interpreting the model for use by City staff and all information necessary for Public Works and Finance staff to understand the factors used to derive the new rates. This model was used by the City’s Finance Director to prepare proposed rates for fiscal year 2008/09 and formed the basis for subsequent rate reviews over the next 5 years.

In 2014, in light of both the current state of the economy and changes that occurred in debris box activity the model needed to be updated in order to accurately reflect the current financial needs of the City’s Solid Waste enterprise.

Project Results

HF&H developed a user-friendly comprehensive cost-of-service rate model for the City and successfully assisted in the process of updating the model for continued use.

For the most-recently completed rate review (Fiscal Year 2016-2017), the company submitted its contractor compensation application in the amount of $20,437,174. HF&H reviewed the application and recommended decreasing the contractor payment to $19,962,552, a savings of $474,622 to the City and City’s rate payers.