Brevard County Manager, Commissioner On Proposed Garbage Rate Increase

BREVARD COUNTY, Florida --  The Brevard County Manager's office is proposing a garbage collection rate hike from the current $125.70 to $151 annually over the next 7 years for single-family residences in unincorporated Brevard County.  The proposed rate increase will be up for consideration by the Brevard County Board of Commissioners at 9 a.m. in Viera, Florida on August 20, 2013.  

County Commissioners will then have to consider what the appropriate amount of the overall increase should be, whether Brevard should be locked-in a rate for 7 years; and if locked-in, whether the rate will be fixed or gradually increased.

Regardless of the amount of rate hike approved by the County, Waste Management's "contractual annual rate adjustments are in accordance with the Consumer Price Index, as established by the U.S. Department of Labor, Bureau of Labor Statistics," Waste Management Community Affairs Manager Amy Boyson said in an email.  "Waste Management will bill the county $10.55 per month/per home, which amounts to $126.60 per year, for garbage, recycling, and yard waste collection service.  Any annual rate adjustments thereafter will be based on the current Consumer Price Index."

What this means is that the County would retain the difference between the proposed $151 collected from residents and the amount it pays to Waste Management.  Under the current $151 proposal, the County would retain the most in the first contract year and the least in the last contract year when more is paid to Waste Management.

The $151 proposal is a significantly higher increase than CPI or a 3% cap if Fiscal Year 2013-14 is used as the base year:

The rate hike coincides with a proposed 10.54% increase to the Solid Waste Department's budget by the County Manager.   Over $1 million of the proposed increase consists of an extra $338,000 in Recycling Operating Reserves and $755,000 in Disposal Operating Reserves when compared to last year.  $20 million in the Solid Waste Capital Improvements Budget is also proposed to occur within the next year (which is $8 million more than last year.)

Because Waste Management was unable to locate a materials recycling facility in Cocoa after nearby residents complained earlier this year, Waste Management might locate its facility at the County landfill - but a decision by Waste Management has not been announced.  

"Waste Management is considering multiple locations within Brevard County," Boyson said.  "We expect to announce the selected location in the coming weeks."

Anticipating that the Waste Management would select the Central Services landfill as the site for the materials recycling facility, the County Manager's office stated in its recommended budget that planned construction of a $4.3 million new scale house and entrance road has been moved up to occur in the 2013-14 Fiscal Year.

After the notice of the proposed rate increase was mailed to unincorporated Brevard County residents, the internet has been abuzz with criticisms of the rate increase. So Brevard Times reached out to Brevard County Manager Howard Tipton to answer some of the issues raised by residents.  

Additionally, Commissioner Trudie Infantini, the most outspoken opponent of the proposal, gave her responses to the same issues:

QUESTION:   During your presentation supporting the choice of Waste Management as the contract winner at the February 19, 2013 Brevard County Commission meeting, one of the factors you cited was the economic impact of a Consumer Price Index (CPI)-based annual raise and referred to the recent 1.82% historic CPI with no mention of a proposed rate hike to $151.   Was the $151 (or similar) rate hike above CPI being discussed by the County Administration prior to  the February 19th meeting?

TIPTON: Short answer - Yes.  Solid Waste Management Director Euri Rodriguez discussed with the Board how he would approach the cost allocation at the January 8, 2013 County Commission meeting. 

From the January 8, 2013 Commission Meeting Minutes:

Mr. Rodriguez provided the Board with a PowerPoint Presentation providing information of the five firms that submitted proposals...  He continued to say each proposal is based on the 2012 Collection Billing Units (CBU's) submitted to the Tax Collector; CBU's were increased at onehalf a point per year for projection purposes; and the 11.5 percent Cost of Living Adjustment (COLA) in the RFP was spread equally over the seven-year life of the contract. He stated recycling revenues are shown, but are not deducted from the cost, because of its variability; all CBU's and annual costs are rounded off; and under all options, and assessment notices will have to be sent to all homeowners to indicate increases.

Although a brief part of the overall discussion, there was no reaction from the Board on this approach.  The staff decision was to recommend a structure similar to the one currently in use.

INFANTINI:  "No reaction" is not an indication to go forward without seeking input and approval.  Never have I seen this done in the past.   Most of the overhead costs are because we collect the waste management fee for them [Waste Management].  If we didn’t attach it to the tax bill people could decide for themselves whether or not to have waste collection at their residence.  This is mandatory because the County makes it that way. The overhead is $300,000. 

QUESTION: Critics contend that the rate hike is placing the burden on unincorporated Brevard residents to finance landfill projects for the benefit of the whole county.  Why shouldn't financing be spread across all residents through general revenue financing?

TIPTON: Let’s be clear.  There are two assessments for Solid Waste – collection and disposal.  This Waste Management contract and resulting assessment is for the collection of trash/recycling/yard waste in the unincorporated areas.  We have a separate disposal fee (which at $56 is lower than it was in 1993) that is paid by all Brevard County residents for landfill projects related to the disposal of the material.  We can’t and don’t mix the funds together.  To do otherwise isn’t just an ethics issue, it a legal issue. 

Stockton Whitten pulled together the following the other day that I think is helpful in explaining the assessment:

"The assessment rate (charge to the customer) is derived from taking all of the revenues of the Collection fund and subtracting all of the expenses.  Those rates, which assume an annual 3% increase in the contractor payment, are represented in the chart below in the row labeled “Annual (Revs – Expends).”  

Second, please keep in mind that the current assessment rate has been level since Fiscal Year 2009. Employing the same methodology that was used to establish the current leveled rate, staff proposed an assessment rate based on an amortization of the total cost of the contract, reduced to equal annual payments over the term of the contract. The staff proposal freezes the assessment rate to the customer for the next seven years, in the same manner that the rate has been frozen for the last five years. The end result is a stabilization of the charge to customers and reduction of the rate necessary to fund the service in the later years of the contract. The proposed leveled rate is represented in the chart below in the row labeled “Level”. As you can see in the chart, if rates are not leveled, but rather increased incrementally from year to year, the rates during the last three years of the contract term would be higher than the proposed level rate.

Rate Scenario
Annual (Revs – Expends)

If the current assessment rate had not been amortized and leveled in this same manner, but rather increased incrementally from year to year, the present annual rate to residents would be significantly higher than $125.70. Thus, rather than characterizing the proposed rate as a 20% increase from FY2013 to FY2014, it is more accurate to describe the proposed rate as representing a 20% increase from FY2009 to FY2020. The average annual increase over that period is only 1.68%. 

The staff proposal is in keeping with the past methodology for establishing the assessment rate, and provides one of the lowest rates for similar services in Central Florida with no rate increases for seven years. However, it is not the only alternative and there are several options available to the Board when setting the actual assessment rate. The Board can, at the hearing, accept the staff proposal. Alternatively, the Board could adopt an assessment rate structure with incremental annual increases, or a rate based upon a shorter period than the contract term. Additionally, the Board could adjust the proposed assessment rate by projecting annual contract adjustments at a rate lower than the maximum 3% utilized, or by reducing reserve levels.”

INFANTINI:  The rate is supposed to be $126.60.  If you add 3% to that you get $130.40.  Where is he getting his numbers?  We are one of the highest in the five counties presented.  Why do we mandate collection? If we didn’t here are the counties we are higher than: See my attachment from COUNTY’s powerpoint!

QUESTION: What's your best pitch as to why the rate hike should go forward?

TIPTON: In terms of the proposed rate structure, what we’ve put out there is one way to meet the increased costs of the collection service and is similar to past approaches.  We clearly recognize that there are a number of different ways to approach the cost structure and we’ll implement whichever direction the County Commission takes.  But if you want to compare Brevard’s proposed annual rate with those surrounding counties that mandate garbage collection (Indian River County does not), we are very competitive today and even more so over the next 7 years while providing a higher level of service:






INFANTINI: My staff found out lots more information about the comparing of counties.  They [the County Manager's Office] didn’t compare apples with apples.  They compared apples to horseshoes.  What we found was the amount being billed county to county was not less.  

Our county is proposing charging the highest rate possible for all seven years rather than starting a lower rate such as $129, and we have to add in the solid waste disposal fee we add on your tax bill (which is another $57), the other counties do not tack that cost on.  The additional cost is absorbed into the solid waste collection cost.  Mr. Tipton failed to disclose that fact. Plus, one county allows you to pick the level of service you want, twice a week collection or once a week collection.  


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