Summary
To: Town Commission
From: Ashley L. A. Bernal
Date: 8/3/2021
______________________________________________________________________
Subject: Proposal of Solid Waste Rate Increase
Summary: In preparation for the upcoming budget year, staff has completed analyses on revenues and expenditures. Within these analyses, it became apparent that the Solid Waste fund has carried a deficit of around $125,000, which has been filled over time utilizing operational savings, reductions in fleet size, staff size and use of reserve. At this time, staff is seeking to have discussion of strategies to close this deficit, as there is currently $101,800 differential between revenues and expenditures. The chart below illustrates the continuing differential if you strip away reserves and amounts for capital equipment.
Year
Revenue (Less Reserve)
Expense
Difference
2017
$839,900
$954,300
($114,400)
2018
$869,000
$1,224,853
($355,853)
2019
$815,111
$941,650
($126,539)
2020
$881,850
$1,005,550
($123,700)
2021
$922,168
$1,047,318
($125,150)
Previous Commission Action: Amending Ordinance 526 for a 5% increase in Solid Waste rates in 2019.
Background/Problem Discussion: Staff has identified several strategies to close the gap. Essentially, the options are backfill with reserve, institute a rate adjustment, or eliminate recycling, or a combination of any of the three prior options. The first option is to continue subsidizing the deficit with reserves, a solution which is extremely temporary, but the fund does enjoy significant operating reserve (Greater than $800,000 unaudited) inclusive of amounts held for current vehicle replacement.
Second, the town can immediately raise the rate by about 14%, which is reflective of the gap or pursue a stair step approach, which is common in other cities. In the event of a multi-year increase approach in, there are multiple options to choose from. Attached to this item is a breakdown of estimated revenues and expenditures based on each of thes...
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