Agenda - 04-29-2002 - 3b - Laserfiche WebLink

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4 • Commercial sector already accustomed to the relatively new system started in current year • Requires no personnel changes • Likely that existing commercial garbage collection assets would be able to absorb workload increases related to continued growth in Meadowmont and Southern Village. Disadvantages • Does not reduce costs for commercial service • Does not generate significant revenues (most businesses have opted for the basic service at no fee) Option 2 —Continue present service, adding a new fee for all collection services We have developed a fee structure for fiscal 2002-03 for all service options. A basic service fee of$750 is suggested for the standard eight cubic yard container serviced once each week if the Council wishes to impose such a fee. The table of complete proposed commercial service fees is attached. If we were to make the new fee for once weekly collections effective October 1, 2002, then we calculate that the fee revenues for next year would be $390,000, which is a conservative estimate. This is based on allowing a safety factor of 25% given our experience with current revenue history. We had assumed that most businesses would need a second weekly collection, for which they would pay a fee. In fact, almost all of these businesses have opted for the one weekly collection at no fee. Accordingly, we have allowed a 25% margin for businesses to select other options, including use of private vendors. This compares to our original estimated revenue of $90,000 for next year based on present fees for extra collections. The annualized amount using the new basic service fee of$750 would be $480,000; that for nine months is $390,000 as noted above. We propose a fee of $750 because we believe it would be a reasonable price for service that would compare favorably with private sector pricing. Charging at or near our actual cost would likely allow private companies to undercut our pricing and to take over much of the local market. That would have a deleterious effect upon our revenue for the year and would, we believe, cause the waste to leave Orange County. We believe that waste collected by private companies would, for the most part, be taken to private landfills or transfer stations. Private companies that control their own disposal or handling facilities are able to take their collected waste at a much lower price than the Orange County landfill's fees. The loss of this waste would, we believe, have a negative effect on the County's solid waste operations. We also believe that the County would believe that we had failed to comply with the spirit of the interlocal agreement concerning solid waste management. That agreement stipulated that participants would send the waste under their control to the County landfill. Causing the commercial waste to leave the landfill on such short notice would create difficulties for the County in terms of programming, financing and orderly planning.