ANALYSIS:
RESIDENTIAL FEES:
There are currently two components to the Sanitation residential fee. The first is the contractual obligation to the waste haulers which is subject to a Consumer Price Indexing (CPI) capped at 3%. The second is a combination of City services which is currently a flat fee and recycling collection provided to residents which is a pass-through from Miami-Dade County which is also tied to CPI and capped at 3%.
The Sanitation Division pays $3.52 for recycling under the Memorandum of Understanding to Interlocal Agreement between Miami-Dade County (County) and City of Miami Beach (City) for Inclusion in the Miami-Dade County Curbside Recycling Program (the Program) executed January 28, 2009. Under Section VI: Payments paragraph three states the following:
“During the first fiscal year (between October 1, 2008 and September 30, 2009) of this Interlocal Agreement and annually thereafter through the final year of the Agreement, the unit prices paid by the Municipality to the County for the services to be provided will be adjusted by the percent change in the Consumer Price Index (CPI), All Urban Consumers, South Urban, All items, annual average during the previous Service Year, not to exceed three percent (3%) based on the change in such Index from October 1 through September 30 of the previous year. The source of the consumer price indices applied in the annual adjustment to the Collection Payment shall be the U. S. Bureau of Labor Statistics. Each adjustment shall be in effect for the following 12-month period. The Amount paid per Household shall be extended to all Households served based on the Household counts provided by the County in accordance with provisions of this Agreement.”
Since 2008 when the County began collecting single stream recyclables, the City has absorbed these costs from the City portion of the bill with no increase in price to residents during these tough economic times. Miami-Dade County is proposing a $0.10 or 2.71% CPI increase to the recycling fee for the fiscal year 2019 which will increase the fee from $3.52 per month per household to $3.62 per month effective October 1, 2018. The Sanitation Division can no longer subsidize the recycling fee; and are requesting that the County recycling fee be passed onto the residential utility bill separately from waste service fee and the future City portion of the fees adjusted annually based upon the April CPI for Miami/Fort Lauderdale/West Palm Beach. The result is a rate increase of $3.62 per month per household being proposed to sanitation fees for single family and multi-family residences. The following chart illustrates the difference in current and proposed fees charged to residents for solid waste services.
The City of Coral Gables and the Village of Key Biscayne provide a similar level of service as the City of Miami Beach. In comparison the City of Coral Gables charges an annual fee of $750 and the Village of Key Biscayne’s annual fee $645 as compared to the City of Miami Beach proposed annual fee of $542.16. This increase keeps the City of Miami Beach fees below other municipalities as shown on the comparative annual fee chart below:
The Sanitation Division has a contractual obligation with Progressive Waste Solutions, Inc. to provide for residential waste service. The cost of this service to the City is currently $25.12. The difference between the costs to provide the service for single family units, $41.56 and the cost to the City, $25.12 is $16.44. This difference is used to fund litter control services, illegal dumping, pre/post storm related debris removal and administrative fees related to management of the contract and billings. The current cost to the City for residential waste services to multi-family dwellings with eight units of less is $37.13. The difference between the cost to provide the service for multi-family dwellings, $37.13 and the cost to the City $25.12 is $12.01 which is also used to fund litter control services, illegal dumping, pre/post storm debris removal and administrative fees related to management of the contract and billings.
The City is currently in the Request for Proposal (RFP) No. 2018-024-WC process with the three vendors that have responded to the inquiry. Bid proposal prices are subject to negotiation. The following rates have been proposed for single family and multi-family residences respectively:
Franchise Fees (Commercial):
The City Commission adopted Ordinance No. 90-2742 providing for Non-Exclusive Waste Contractor Franchise Agreements on October 1, 2003. Chapter 90 of the Miami Beach City Code, Section 90-221 provides for regulations, fees and procedures, and specifies that the City has the option of raising the franchise fee once yearly, said raises not to exceed two percent (2%). The last increase to the franchise fees per Resolution 2007-26658 increased the franchise fee from 16% to 18% effective October 1, 2007. This fee increase affects solid waste franchisees that provide service to commercial accounts and multi-family units.
Increasing the franchise fee from eighteen (18%) percent to twenty (20%) percent will generate additional revenue in the sanitation budget of approximately $84,000.
Multiple municipalities were contacted regarding their franchise fee rates. The municipalities that responded are listed below. This increase keeps the City of Miami Beach fees at or below other municipalities as shown in the comparison fee chart provided:
Increase the roll-off permit fee from 18% to 20%:
The City Commission adopted Ordinance No. 2008-3616 on September 17, 2008 amending the on-street and off street permit fee for roll-off waste containers serviced by licensed contractor’s from 16% to 18% of the licensee’s total monthly gross receipts. Currently the roll-off contractor’s monthly gross receipts are approximately $515,740. This equates to $92,833 per month that the City is collecting on their monthly gross receipts.
Historically, the on-street and off-street permit fees for roll-off waste containers has been the same fee as the franchise fee charged to solid waste contractors. The fee increase will affect solid waste licensees that provide roll-off service to commercial and residential accounts. This fee has not been increased in 10 years. The additional revenue collected of approximately $20,000 will assist in offsetting the Sanitation Division’s operational deficit.
The Administration proposes a cost recovery mechanism to promote long-term sustainability by the implementation of a direct pass-through of County and contractual services as well as implementation of a CPI adjustment on the City component of residential fees for single and multi-family units. This indexing would be automatically implemented to offset the effects of inflation on the cost of providing sanitation services.