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West Bay Sanitary District
Solid Waste Rate Model Update (2017)
The District wanted to update its solid waste and recycling collection rate model to reflect 2018 projected results and also look at longer term projections with an emphasis on rates covering costs by customer type (e.g., residential, commercial). The current rate model was developed by HF&H in 2011 and revised in 2016.
The 2016 model provided an in-depth analysis using truck volume capacity as another variable along with disposal.
HF&H updated the District’s rate model to derive the necessary rate increase by customer class: residential and commercial. We then determined the revenue requirements for the residential customer class by size of container (20 gallon, 32 gallon and 96 gallon). The following summarizes the assumptions for each of the two rate scenarios:
- Scenario #1 – Maintains the current rate structure and rate relationships between service levels and provides sufficient revenue to cover projected operating costs by customer class. Residential and commercial rates would be adjusted by two different percentages.
- Alternative Scenario #2 – Developed an Equivalent Cart Factor and presented alternative rates to each of the residential cart sizes and a 5% decrease to the commercial rate. Projected adjustments to both customer classes over a four-year period.
- Ultimately, the Board chose to raise the 20-gal carts by 25.2%, the 32-gal carts by 9.4% and decreased the 64-gal and 95-gal rates by 2.3% and 4.5% respectively. The Board also chose to reduce the commercial rates by 5%.