Rates for residential and senior citizen customers will go up 23 percent. Commercial rates will increase 28 percent. The increase becomes effective Jan. 1.
The city’s sanitation department has been losing money for nearly two years, said Joe Duffy, Williams’ assistant city manager and finance director.
According to a report provided to the City Council, sanitation costs have increased in recent years and now dwarf the generated revenue.
The sanitation department lost more than $96,000 in fiscal year 2001 and nearly $90,000 the following year, the report states.
To break even, the city would have needed to increase that revenue by 25 percent. The council actually chose to raise rates slightly more than that in order to fund future improvements in the department.
New equipment, such as a new garbage truck, are some of the capital improvements the department will use the extra money for.
The sanitation department generates revenue from both residential and commercial customers, as well as from fees collected at the city’s transfer station and Lake Ellen. The county reimburses the city 30 percent of the transfer station’s annual operating costs.
By analyzing data from the last two years, city officials have determined that residential and commercial customers accounted for 63 percent of solid waste volume, while those who take trash to the transfer station accounted for 37 percent.
The city also figured out customers from each group were not paying their proportionate share, Duffy said.
Commercial users were found to be generating 42 percent of the volume, but were paying 49 percent of the revenue. Residential users generate 39 percent of the volume, and pay 48 percent of the revenue. Transfer station users generate 19 percent of the volume and only pay three percent of the revenue, the report states.
“The transfer station is where we’re losing money,” Duffy said.
Duffy proposes an increase to keep the city at a break-even level. Rates would go up 14 percent for commercial users and nine percent for residential customers.
Transfer station users, however, would see a 753 percent increase, according to the report.
Right now, the city charges $3 per cubic yard of garbage. To break even, that rate would have to increase to almost $9, the report states.
The last rate increase was in 1998, Duffy said.
The city’s cost to haul a open-top trailer of garbage, the way trash is transported to the landfill from the transfer station, costs about $450 per load.
However, right now the city collects only about $89 per load, for a loss of nearly $32,500 per year.
Not only are the city’s current rates too low, but transfer station employees have not been able to consistently collect the correct fees. Right now, employees estimate load sizes and charge $3 per cubic yard of waste.
“The problem is that some people are getting charge one amount from one guy and another the next time,” Duffy said.
The city’s solution is to install permanent scales and charge by weight. This should enable sanitation staff to charge more accurately and consistently, Duffy said.
The initial costs for installing the scales and for onsite improvements related to the scales would run around $30,000.
“The investment on the scales would be recouped inside a year,” Duffy said.
The city would enclose the transfer station facility with chain-link fencing and would change how traffic is routed through the gate area.