HomeMy WebLinkAbout2022-06-21 - Public Works Sub - Agenda Packet
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June 21, 2022 – 5:00 P.M.
Public Works Subcommittee Agenda
Special Meeting
City Hall, Rains Conference Room
10500 Civic Center Drive, Rancho Cucamonga, CA 91730-3801
This is the time and place for the general public to address the Public Works Subcommittee on
any item listed on the agenda. State law prohibits the Subcommittee from addressing any item not
previously included on the Agenda. The Subcommittee may receive testimony and set the matter
for a subsequent meeting. Comments are to be limited to five minutes per individual.
C1. Approve and File Minutes of: September 15, 2021.
C2. Review Biennial Franchise Waste Hauler Report, Completed in Accordance with
the City’s Franchise Waste Hauler Agreement.
C3. Review and Provide Feedback on Proposed Franchise Agreement Amendment, and
Rate Adjustment Request related to Senate Bill 1383.
D. ADJOURNMENT
I, Linda A. Troyan, MMC, City Clerk Services Director, or my designee, hereby certifies that a true,
accurate copy of the foregoing agenda was posted on June 16, 2022 at least twenty-four (24) hours
prior to the meeting per Government Code 54954.2 at 10500 Civic Center Drive, Rancho
Cucamonga, California, and on the City’s website.
Linda A. Troyan, MMC
City Clerk Services Director
City of Rancho Cucamonga
C. ITEM(S) FOR DISCUSSION
A. CALL TO ORDER
A. Roll Call: Kennedy Hutchison
B. PUBLIC COMMUNICATIONS
If you need special assistance or accommodations to participate in this meeting, please contact the City
Clerk’s Office at (909) 774-2023. Notification of 48 hours prior to the meeting will enable the City to make
reasonable arrangements to ensure accessibility.
STAFF REPORT
RECOMMENDATION:
Staff recommends the Public Works Subcommittee receive and file the Biennial Franchise Waste Hauler
Review, completed on May 17, 2022 by R3 Consulting Services Group, Inc.
BACKGROUND:
The City performed a review of the Franchise Waste Hauler, Burrtec’s, compliance under the Franchise
Waste Hauler Agreement, per the terms of Section 8.2.6. The review period covered January 1, 2020,
thorough December 31, 2020.
The review specifically audited diversion tonnage, collection, transportation, recycling and processing of
solid waste, residential and commercial billing, and accuracy of franchise fee payments. A consultant that
specializes in solid waste contracts, compliance audits, rate reviews, and zero waste planning methods,
was selected to review these specific categories, and provide a summary of findings and recommendations
to the City.
The consultant that was selected is R3 Consulting Group, Inc. (consultant). Per the agreement, the first
audit was scheduled to be performed in 2018, and then biennially for the term of the agreement. The audit
began in September 2021 and continued through May 2022.
ANALYSIS:
During the review, the consultant found minor discrepancies in tonnage reporting and billings, which have
a correspondingly minor effect on billing amounts and tonnage reported. The consultant also found that
Burrtec met its diversion requirement during the review period.
The consultant’s further findings and recommendations to the City are:
1. R3 found that Burrtec’s tonnage reporting was not fully verified, due to tonnages missing from Bulky
Item Allocation, T-Bin Allocation, Street Sweeping data, MRF Floor Sort, Temporary Bins, and
Schools Allocation. This only accounted for 3.3% of total tonnages. R3 concluded that no
adjustment to monthly tonnage reporting to the City is necessary.
2. R3 concluded that Burrtec met the required 30% diversion requirement, per the Agreement.
3. R3 recommended that Burrtec complete a route audit according to the provisions of the Agreement
Section 4.11. The City is currently working with Burrtec on, and expect to receive a draft report by
August 1, 2022.
DATE: June 21, 2022
TO: Public Works Subcommittee
FROM: Jason C. Welday, Director of Engineering Services/City Engineer
INITIATED BY: Linda Ceballos, Environmental Programs Manager
SUBJECT: Review Biennial Franchise Waste Hauler Report, Completed in Accordance with
the City’s Franchise Waste Hauler Agreement.
PUBLIC WORKS SUB-COMMITTEE STAFF REPORT – FRANCHISE WASTE HAULER REVIEW
June 21, 2022
Page 2
4. R3 reviewed the rates from 2020, the City approved adjusted rates in June 16, 2021, and were
effective July 1, 2022. R3 found that Burrtec is correctly billing customers according to the approved
rates, with the exception of four accounts. The total among them was not greater than $.03 off. The
City will request that Burrtec correct this discrepancy.
5. The consultant also reviewed the franchise fee payments made by Burrtec to the City, to confirm
accuracy of payments. The City receives 15% of all gross receipts each quarter from Burrtec, and
0.75% of gross receipts to fund the management operations of the Household Hazardous Waste
Facility. It was concluded that the calculations for the franchise fee payments were done correctly.
Staff has reviewed the recommendations and findings from the consultant and will not require further action
or inquiry from Burrtec.
FISCAL IMPACT:
Per the franchise agreement, Burrtec is to reimburse the City for the cost of the review performed by the
consultant, and thus has no net impact on the General Fund.
COUNCIL GOAL(S) ADDRESSED:
This item aligns with Promoting and enhancing a safe and healthy community for all by providing
services to ensure a healthy and safe environment.
ATTACHMENTS:
Attachment 1 – Final Report: Review of Hauler Diversion Reporting and Billing Accuracy.
ATTACHMENT 1
Service Description Approved
Rate Burrtec Rate Error Reason R3 Comment Suggested Action
CT-3yBin-2x 324.72 $324.73 Not charged correctly This rate is not the approved rate To be corrected by Burrtec
CT-6yBin-3x 771.24 $771.27 Not charged correctly This rate is not the approved rate To be corrected by Burrtec
Locking Bin 12.33 $12.34 Not charged correctly This rate is not the approved rate To be corrected by Burrtec
Table 3: Summary of Non-Approved Rates Charged to Customers by Burrtec
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STAFF REPORT
RECOMMENDATION:
Staff recommends the Public Works Subcommittee review and provide feedback on a proposed
amendment to the franchise agreement and rate adjustment request related to Senate Bill 1383
in preparation for presentation to City Council for consideration.
BACKGROUND:
Senate Bill 1383 (SB1383) was signed into law in September 2016 to help reduce short-lived
climate pollutants to address climate change. California Department of Resources Recycling and
Recovery (CalRecycle) has found that 50% of the waste California disposes in landfills is organic
waste. According to CalRecycle, twenty (20) percent of California’s methane emissions comes
from landfills and organics such as food scraps, yard trimmings, paper, and cardboard. The state
legislature and CalRecycle see SB1383 as an opportunity for implementing widespread change
and reduction in short-lived climate pollutants. To meet the statewide goal of reducing 75% of
organic waste disposal by 2025, the state developed regulations that require local jurisdictions to
adopt and enforce organic waste recycling beginning January 1, 2022.
The City Council recently adopted Ordinance 989, adding Chapter 8.15 (Mandatory Organics
Waste Disposal Reduction) to Title 8 Health and Safety to the Rancho Cucamonga Municipal
Code, incorporating the requirements of SB1383. In addition to the ordinance, some of the SB
1383 requirements have already been implemented, including mandatory food waste recycling
for businesses and procurement of recycled organic products, like mulch and compost, in City
landscape areas.
Some of the new programs the City is now required to implement for SB1383 compliance include
residential collection of food waste for both single-family and multi-family residents, a new
procurement policy to include specific tracking and record keeping requirements for procurement
of recycled organic waste products, and edible food recovery program for Tier I and Tier II edible
food generators. Additionally, the City is required to implement expanded record keeping,
enforcement, route reviews, waste audits, and outreach and education.
As a result of the new requirements, the franchise waste hauler, Burrtec Waste Industries, Inc.
(Burrtec) has submitted a written request to adjust rates and amend the franchise agreement to
incorporate SB1383 requirements.
DATE: June 21, 2022
TO: Public Works Subcommittee
FROM: Jason C. Welday, Director of Engineering Services/City Engineer
INITIATED BY: Linda Ceballos, Environmental Programs Manager
SUBJECT: Review and Provide Feedback on Proposed Franchise Agreement Amendment,
and Rate Adjustment Request related to Senate Bill 1383.
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Some of the key items in the proposed amendment include:
1. Residential food waste collection services for single-family and multi-family residents.
2. Additional container sizes for low-volume food waste generators.
3. A request for an off-cycle rate adjustment in 2022 for SB 1383 related costs.
4. A change to the rate methodology.
5. A new SB 1383 fee incorporated into the rates.
6. Elimination of the Extraordinary Rate Request Process, replaced with a requirement to
conduct a disposal and processing cost study no less than every five years.
The Household Hazardous Waste Fee (HHW Fee), collected by Burrtec and paid to the City to
offset the cost of disposal of the household hazardous dropped off by residents at the City’s
collection facility, does not cover full cost of disposal. As a result, the City has proposed an
increase to the HHW Fee portion of the rate to reduce the fund shortfall.
The amendment and rate adjustment proposal have been reviewed by staff and will be submitted
to the City Attorney for review after feedback and/or suggested changes from the Subcommittee
are incorporated. The rate adjustment proposal and methodology are also under review by a
consultant.
ANALYSIS:
Burrtec’s request for an amendment to the agreement was prompted by the prescriptive
requirements of SB 1383 and the City’s obligation to be in compliance with the regulation. The
City has not yet implemented citywide collection of residential food waste or set rates. Commercial
food waste collection has been in place since 2011, however, the current commercial rates only
cover cost of collection and disposal, and do not include SB 1383 related requirements, such as
edible food recovery program, procurement requirements, or expanded record keeping, route
reviews, or education and outreach. Because SB 1383 requirements are new, there is some
uncertainty regarding the stability of processing costs, as well as costs associated with
implementing the requirements. The City and Burrtec have had extensive discussions related to
cost impacts of SB 1383 and the challenges of the current rate methodology. The result of those
discussions are the proposed changes to the key elements of the amendment as described below:
Rate Period
The rate period in the current agreement allows for Burrtec to request a rate adjustment on a 24-
month cycle to cover increases in costs for providing solid waste services. Burrtec’s initial
proposal included a request to change the rate adjustment schedule from biennial to annual cycle
to address increases in costs more regularly. An annual rate review process takes a considerable
amount of staff time to manage the formal rate review process, make the required Proposition
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218 public hearing notifications, and respond to protests from rate payers. Therefore, staff is
proposing and Burrtec has agreed to a hybrid approach. The proposed amendment would include
an off-cycle rate adjustment in 2022 to adjust rates to include residential and multi-family food
waste collection, adjust landfill and disposal costs, add the new SB1383 fee, and new services
related to SB1383 requirements, and adjust the HHW fee. It should be noted that the off-cycle
rate adjustment does not include adjustments to Burrtec’s direct service costs such as labor and
equipment to providing and managing hauling services. Further, the amendment maintains the
24-month rate review cycle but would permit Burrtec to request an additional increase for each
upcoming off-cycle year based on projected cost increases. Each 24-month rate review would
include a look-back review to determine if the immediately prior mid-cycle increase aligned with
actual cost increases for that year. Any variation found in the look-back review would be
accounted for in the next rate review.
Rate Methodology
The existing rate methodology includes a five (5) percent cap on the overall rate from the prior
rate period. Burrtec requested that landfill and disposal costs be removed for the cap for the
reasons mentioned previously. It is important to consider that Burrtec does not have control over
the landfill or disposal costs as they are provided by third party service providers. Burrtec
additionally requested that the service fee portion of the rate (Burrtec’s direct costs, overhead,
and profit) be adjusted annually for CPI or five (5) percent, whichever is less. The proposed
methodology for calculating rates includes the pass through of landfill, disposal costs, franchise
fee and HHW fee. The rate review methodology would also include the previously mentioned
lookback provision on the disposal and processing costs as well as the SB1383 fee, at start of
each rate review period (to start in 2025 for 2024 increase). Rate stabilization and carry forward
of previously capped disposal and processing costs would be eliminated as unnecessary with the
removal of the cap on these elements of the rate. The 2023 rate packet would include 2023 actual
increases and 2024 estimates for Proposition 218 public hearing process.
• SB1383 Fee
The SB1383 fee would cover the costs of the SB 1383 requirements that are not service
related, such as, Edible Food Recovery Program, procurement of recovered organic
products, outreach, record keeping, and enforcement. Due to the unknown nature of
starting a new citywide program with limited historical information, the SB1383 Fee has
been estimated and will be adjusted in future rate reviews as more information is available.
Costs for hauling, disposal, and processing of organic products are included in the base
rate for solid waste service. See Attachment 2.
• HHW Fee
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The proposal includes an increase to the Household Hazardous Waste Disposal Fee, from
.75% to 1.75%. The 1% increase would offset the costs associated with the growing cost
of household hazardous waste disposal. This program has been successfully utilized by
hundreds of residents each week for many years and works to eliminate hazardous waste
products from homes in the City resulting in safer and healthier living for our residents.
Extraordinary Rate Request
As a result of the proposed changes to the rate methodology, the Extraordinary Rate Request
process, which applied to a cap on the disposal and processing fees, is proposed to be replaced
with a requirement to conduct a disposal and processing cost study no less than every five years.
Cost of the study to be conducted by a consultant of the City’s choosing. Burrtec would reimburse
the City for the cost.
Proposed Off-Cycle Rate Adjustment
The proposed adjusted rate for standard residential barrel service has the most significant
increase due to the implementation of food waste collection as displayed in chart below. All
proposed rates are displayed in Attachment 1. Attachment 3 provides the detailed breakdown of
the residential rate.
Account Type Current Rate Proposed Rate
Adjusted
Difference
Residential $ 29.01 $ 35.06 20.85%
Senior Residential $ 19.44 $ 23.49 20.83%
Multi-Family Barrel $ 27.76 $ 29.78 7.28%
Multi-Family Bin* $ 249.88 $ 269.68 7.92%
Commercial* $ 249.88 $ 257.23 2.94%
*Multi-family bin and commercial rates vary by bin size and frequency of service.
Next Steps
Staff will work with the consultant, Burrtec, and the City Attorney’s office to incorporate feedback
and recommendations from the Public Works Subcommittee into the various documents and
contract amendments and prepare proposed rates for the Proposition 218 hearing for City Council
consideration according to the following schedule:
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Action Date
Public Hearing Notification: Burrtec to mail out 45-
day public hearing notification to rate payers. City to
advertise Public Hearing in an advertisement in The
Daily Bulletin.
Mail public hearing notices by July 1, 2022
Newspaper advertisement on July 1, 2022
Hold public hearing. City Council Meeting on August 17, 2022
Effective date for adjustment if approved by City
Council.
September 1, 2022
FISCAL IMPACT:
The City receives a franchise fee from Burrtec, paid quarterly, which equals fifteen percent (15%)
of the gross receipts received by Burrtec. The franchise fee amount is expected to change as the
proposed adjusted rate is revised.
ATTACHMENTS:
Attachment 1 – Exhibit ‘A’- Proposed Solid Waste Collection Rate
Attachment 2 – Senate Bill 1383 Cost Breakdown
Attachment 3 – Residential Rate Worksheet
Current Rate
Proposed
Rate Current Rate
Proposed
Rate
Residential Barrel Service Commercial Trash & Recycling Bin Service
Includes 1 barrel each for trash, recycling, green waste Includes 1 trash & 1 recycling bin, same size & frequency
Residential customers are billed every 2 months Size Freq
Standard 29.01$ 35.06$ 1.5 yrd 1 142.50$ 146.52$
* Senior 19.44$ 23.49$ 1.5 yrd 2 222.07$ 228.48$
* Primary acct holder 60yr, of age or older are eligible to apply 1.5 yrd 3 300.46$ 309.23$
35-Gallon Barrel 23.41$ 24.36$ 1.5 yrd 4 379.53$ 390.65$
27.76$ 29.78$ 1.5 yrd 5 458.59$ 472.11$
Additional Trash Barrel 8.09$ 8.19$ 1.5 yrd 6 538.24$ 554.15$
Additional Recycling Barrel 1.63$ 1.65$ 2 yrd 1 164.47$ 169.15$
Additional Green Waste Barrel 4.18$ 4.23$ 2 yrd 2 264.87$ 272.61$
Backyard Pull-Out Service 54.34$ 55.01$ 2 yrd 3 365.64$ 376.41$
Bear Proof Barrel (+ Regular Barrel)15.10$ 15.29$ 2 yrd 4 464.27$ 478.04$
Temporary Bins 117.38$ 118.82$ 2 yrd 5 562.93$ 579.69$
Dump and Return 117.38$ 118.82$ 2 yrd 6 662.22$ 682.01$
Bulky Items (in excess of 4 collections/5 items per collection)3 yrd 1 207.38$ 213.42$
- Trip Charge 34.00$ 34.42$ 3 yrd 2 340.96$ 351.09$
- Per Item Charge 12.47$ 12.62$ 3 yrd 3 475.28$ 489.55$
* Multi-Family-Per-Unit (95 gal trash/recycle & 15 gal organics)3 yrd 4 609.10$ 627.50$
Residential Trash Bin Service (incl Recycling & 95 gal. Organics Service)3 yrd 5 742.92$ 765.45$
Size Freq 3 yrd 6 877.46$ 904.10$
1.5 yrd 1 142.50$ 158.98$ 4 yrd 1 249.88$ 257.23$
1.5 yrd 2 222.07$ 240.94$ 4 yrd 2 421.74$ 434.41$
1.5 yrd 3 300.46$ 321.68$ 4 yrd 3 593.33$ 611.33$
1.5 yrd 4 379.53$ 403.11$ 4 yrd 4 764.84$ 788.12$
1.5 yrd 5 458.59$ 484.56$ 4 yrd 5 936.31$ 964.91$
1.5 yrd 6 538.24$ 566.61$ 4 yrd 6 1,108.11$ 1,142.03$
2 yrd 1 164.47$ 181.61$ 6 yrd 1 317.39$ 326.91$
2 yrd 2 264.87$ 285.07$ 6 yrd 2 563.59$ 580.80$
2 yrd 3 365.64$ 388.86$ 6 yrd 3 809.80$ 834.70$
2 yrd 4 464.27$ 490.50$ 6 yrd 4 1,056.34$ 1,088.94$
2 yrd 5 562.93$ 592.14$ 6 yrd 5 1,302.55$ 1,342.81$
2 yrd 6 662.22$ 694.46$ 6 yrd 6 1,548.67$ 1,596.65$
3 yrd 1 201.45$ 219.78$
3 yrd 2 337.99$ 360.52$
3 yrd 3 474.57$ 501.30$ Commercial Trash & Recycling Barrel Service
3 yrd 4 585.60$ 615.83$ Rate includes 1 trash & 1 recycling barrel
3 yrd 5 714.28$ 748.52$ Size Freq
3 yrd 6 843.71$ 881.92$ 95Gal 1 35.75$ 36.78$
95Gal 2 57.82$ 59.51$
Multi-Family Trash, Recycling Bin Service, & 95 Gallon Organics Cart 95Gal 3 80.04$ 82.40$
Size Freq 95Gal 4 102.09$ 105.19$
1.5 yrd 1 142.50$ 158.98$ 95Gal 5 124.11$ 128.00$
1.5 yrd 2 222.07$ 240.94$ 95Gal 6 146.26$ 150.92$
1.5 yrd 3 300.46$ 321.68$
1.5 yrd 4 379.53$ 403.11$
1.5 yrd 5 458.59$ 484.56$ Commercial Compactor Trash with Recycling Bin Service
1.5 yrd 6 538.24$ 566.61$ Includes 1 trash & 1 recycling bin, same size & frequency
2 yrd 1 164.47$ 181.61$ Size Freq
2 yrd 2 264.87$ 285.07$ 3 yrd 1 319.07$ 325.91$
2 yrd 3 365.64$ 388.86$ 3 yrd 2 527.52$ 538.29$
2 yrd 4 464.27$ 490.50$ 3 yrd 3 737.07$ 751.86$
2 yrd 5 562.93$ 592.14$ 3 yrd 4 945.88$ 964.65$
2 yrd 6 662.22$ 694.46$ 3 yrd 5 1,154.61$ 1,177.31$
3 yrd 1 201.45$ 219.78$ 3 yrd 6 1,364.53$ 1,391.22$
3 yrd 2 337.99$ 360.52$ 4 yrd 1 385.81$ 393.89$
3 yrd 3 474.57$ 501.30$ 4 yrd 2 654.06$ 667.17$
3 yrd 4 585.60$ 615.83$ 4 yrd 3 922.19$ 940.32$
3 yrd 5 714.28$ 748.52$ 4 yrd 4 1,190.15$ 1,213.32$
3 yrd 6 843.71$ 881.92$ 4 yrd 5 1,458.12$ 1,486.29$
4 yrd 1 249.88$ 269.68$ 4 yrd 6 1,726.24$ 1,759.42$
4 yrd 2 421.74$ 446.87$ 6 yrd 1 513.53$ 523.95$
4 yrd 3 593.33$ 623.78$ 6 yrd 2 903.89$ 921.55$
4 yrd 4 764.84$ 800.58$ 6 yrd 3 1,294.15$ 1,319.03$
4 yrd 5 936.31$ 977.37$ 6 yrd 4 1,684.27$ 1,716.37$
4 yrd 6 1,108.11$ 1,154.49$ 6 yrd 5 2,074.38$ 2,113.72$
6 yrd 6 2,464.63$ 2,511.20$
Multi-Family*
ALL RATES ARE BILLED MONTHLY UNLESS OTHERWISE NOTED
Service Type Service Type
EXHIBIT A
CITY OF RANCHO CUCAMONGA, CALIFORNIA
2022 PROPOSED REVISED SOLID WASTE RATES
ATTACHMENT 1
Current
Rate
Proposed
Rate Current Rate
Proposed
Rate
Additional Recycling Bin Service - Existing Accounts Only Green Waste Multi Family / Commercial Bin Service
Not available to accounts established after 6/30/2017 Size Freq
Size Freq 3 1 181.53$ 185.17$
3 yrd 1 64.53$ 66.08$ 3 2 289.24$ 294.61$
3 yrd 2 115.91$ 118.82$ 3 3 397.75$ 404.86$
3 yrd 3 156.33$ 160.52$ 3 4 505.74$ 514.58$
3 yrd 4 198.41$ 203.86$ 3 5 613.67$ 624.23$
3 yrd 5 239.36$ 246.07$ 3 6 722.40$ 734.71$
3 yrd 6 281.63$ 289.61$ Green Waste Multi Family / Commercial Barrels
Size Freq
Additional Recycling Services - New Accounts 35Gal 1 n/a 38.88$ new
Bin Size Freq 35Gal 2 n/a 64.46$ new
1.5 yrd 1 113.02$ 113.31$ 35Gal 3 n/a 85.71$ new
1.5 yrd 2 163.13$ 163.94$ 35Gal 4 n/a 107.32$ new
1.5 yrd 3 212.05$ 213.38$ 35Gal 5 n/a 137.27$ new
1.5 yrd 4 261.64$ 263.48$ 35Gal 6 n/a 149.93$ new
1.5 yrd 5 311.22$ 313.57$ 65Gal 1 n/a 42.21$ new
1.5 yrd 6 361.40$ 364.30$ 65Gal 2 n/a 71.03$ new
2 yrd 1 125.16$ 125.65$ 65Gal 3 n/a 95.51$ new
2 yrd 2 186.28$ 187.46$ 65Gal 4 n/a 120.35$ new
2 yrd 3 247.75$ 249.65$ 65Gal 5 n/a 153.54$ new
2 yrd 4 307.10$ 309.73$ 65Gal 6 n/a 169.43$ new
2 yrd 5 366.45$ 369.79$ 95Gal 1 45.14$ 45.55$
2 yrd 6 426.46$ 430.51$ 95Gal 2 76.94$ 77.59$
4 yrd 1 171.29$ 172.53$ 95Gal 3 104.47$ 105.31$
4 yrd 2 264.56$ 267.34$ 95Gal 4 132.34$ 133.38$
4 yrd 3 357.55$ 361.86$ 95Gal 5 168.47$ 169.80$
4 yrd 4 450.47$ 456.32$ 95Gal 6 187.51$ 188.94$
4 yrd 5 543.36$ 550.74$
4 yrd 6 636.56$ 645.49$
6 yrd 1 199.51$ 201.60$ Food Waste Service - Bins
6 yrd 2 327.81$ 332.23$ Size Freq
6 yrd 3 455.60$ 462.35$ 2 yrd 1 312.34$ 327.00$
6 yrd 4 583.38$ 592.48$ 2 yrd 2 574.03$ 602.82$
6 yrd 5 710.79$ 722.22$ 2 yrd 3 818.86$ 862.17$
6 yrd 6 838.20$ 851.94$ 2 yrd 4 1,065.21$ 1,123.03$
Barrel Size Freq 2 yrd 5 1,343.19$ 1,415.44$
95Gal 1 n/a 26.95$ new 2 yrd 6 1,555.48$ 1,642.35$
95Gal 2 n/a 39.86$ new Food Waste Service - Barrels
95Gal 3 n/a 52.92$ new Size Freq
95Gal 4 n/a 65.89$ new 15 Gal 1 n/a 46.26$ new
95Gal 5 n/a 78.87$ new 15 Gal 2 n/a 79.21$ new
95Gal 6 n/a 91.96$ new 15 Gal 3 n/a 107.84$ new
15 Gal 4 n/a 136.82$ new
Trash Roll-Off Service 15 Gal 5 n/a 174.15$ new
* 10 Yard 652.49$ 666.25$ 15 Gal 6 n/a 194.19$ new
* 20 Yard 652.49$ 666.25$ 35 Gal 1 n/a 61.23$ new
* 40 Yard 652.49$ 666.25$ 35 Gal 2 n/a 109.05$ new
* 40 Yard Compactor 952.62$ 968.04$ 35 Gal 3 n/a 152.53$ new
* Roll-Off and compactor service rate is charged per service 35 Gal 4 n/a 196.37$ new
Recycling Roll-Off Service 35 Gal 5 n/a 248.58$ new
* 10 Yard - Inert (6Tons) 258.20$ 264.89$ 35 Gal 6 n/a 283.48$ new
* 40 Yard - C&D (8Tons) 202.31$ 207.56$ 65 Gal 1 79.92$ 83.62$
* 20/40 Yard - Recycling 202.31$ 207.56$ 65 Gal 2 146.54$ 153.73$
* 40 Yard - Recycling Compactor 202.31$ 207.56$ 65 Gal 3 208.71$ 219.53$
* 40 Yard - Wood/Green Waste 202.31$ 207.56$ 65 Gal 4 271.23$ 285.67$
* Roll-Off service rate is charged per service and subject to 65 Gal 5 342.12$ 360.17$
disposal and processing fees charged by ton. Also subject to 65 Gal 6 395.67$ 417.37$
Transportation Fee, if customer request haul to specific location
Push-Out Rates, per container, per service frequency
Additional Services Distance Freq
Extra Pick-up (Barrel) 23.31$ 23.60$ 0 - 25 ft All N/C
Extra Pick-up (Bin) 49.18$ 49.78$ 26 - 50 ft 1 45.03$ 45.58$
Extra Pick-up (Compactor) 98.37$ 99.58$ 26 - 50 ft 2 90.06$ 91.17$
Extra Pick-up (FW Barrel) 66.75$ 67.57$ 26 - 50 ft 3 135.10$ 136.76$
Bin Lock 12.95$ 13.11$ 26 - 50 ft 4 180.14$ 182.36$
Steam Clean - Per Container 175.00$ 177.15$ 26 - 50 ft 5 225.16$ 227.93$
Contamination Fee 49.18$ 49.78$ 26 - 50 ft 6 270.20$ 273.52$
Illegal Hauler Impound Fee - Per Day 105.00$ 106.29$ Over 50 ft 1 90.05$ 91.16$
Additional Roll Off Services Over 50 ft 2 180.12$ 182.34$
- Dry/Run Relocation Fee 69.85$ 70.71$ Over 50 ft 3 270.17$ 273.49$
Tilthopper Rental 45.30$ 45.86$ Over 50 ft 4 360.22$ 364.65$
End Dump (Hourly Rate) 202.46$ 207.72$ Over 50 ft 5 450.27$ 455.81$
* Subject to actual Disposal & Processing Fees Over 50 ft 6 540.34$ 546.99$
*Roll Off Rental Fee 27.73$ 28.07$
* Per Day after 7 days if not scheduled for weekly service
- Flat Bed 395.63$ 400.50$
ALL RATES ARE BILLED MONTHLY UNLESS OTHERWISE NOTED
Service Type Service Type
EXHIBIT A
CITY OF RANCHO CUCAMONGA, CALIFORNIA
2022 PROPOSED REVISED SOLID WASTE RATES
ATTACHMENT 2
Burrtec Waste Industries, Inc
City of Rancho Cucamonga
Residential
Effective 9/1/22
Current 2022
2021-2023 Revised
Components Rate Rate
Service 15.45$ a/15.45$ a/
(Trash 95Gal/ GW-Org 95Gal / Recyc 65Gal)
Recovering prior Shortfall 0.24
Shortfall (to hold Max Allowed)(0.45)
Net Service 15.24$ 15.45$
SB1383 Compliance Fee 0.77$
1) Landfill / Disposal Transfer 5.63 5.68
2) Green Waste Disposal 3.43
2b) Mixed Organics Disposal 5.22
3) MRF Fees 2.02 2.07
Disposal/Processing Total 11.08$ 12.97$
Recovering prior Shortfall 1.50
Shortfall (to hold Max Allowed)(3.38)
Franchise Fees 15.0%4.35 5.25
HazMat Fees 0.75%0.22 1.75%0.61
City Fees Total 4.57$ 5.86$
Total 29.01$ 35.06$
Changes vs Current Rate 1.38$ 6.05$
4.99%20.85%
Senior Rate 19.44$ 23.49$
(Trash 95Gal/ GW-Org 95Gal / Recyc 65Gal)
Memo
Maximum Contractual Increase 5.00%
Maximum Allowed Rates 29.01$
2019-2020 2021
a/ Avg CPI comparing 2 years 4.74%0.00%
1) Landfill / Disposal Transfer
West Valley Fee per Ton 50.47$ Est 50.88$ 2021
Annual Refuse Tons/House 1.3395 1.3395
Weekly Lbs/House 51.52 51.52
Disposal Component per Home 5.63$ 5.68$
2) & 2b) Disposal Green Waste Mixed Organics
West Valley Fee per Ton 52.48$ Est 80.00$
Annual GW Tons/House 0.7832 0.7832
Weekly Lbs/House 30.12 30.12
Disposal Component per Home 3.43$ 5.22$
3) Recycling
Recycling (Rev)/Cost per Ton 70.12$ 2020 71.92$ 2021
Annual Recycling Tons/House 0.3456 0.3456
Weekly Lbs/House 13.29 13.29
Processing Component per Home 2.02$ 2.07$
Total Disposal/Processing 11.08$ 12.97$
ATTACHMENT 3
FINAL REPORT
City of Rancho Cucamonga
Submitted electronically on October 22, 2020
Submitted electronically: May 17, 2022
Review of Hauler Diversion
Reporting and Billing Accuracy
6/21/2022 Public Works Subcommittee - Additional Material
405 14th Street, Suite 350, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com
May 17, 2022
Ms. Marissa Ostos, MPA
Management Analyst
City of Rancho Cucamonga
10500 Civic Center Drive, Rancho Cucamonga, CA 91730
submitted via email: marissa.ostos@cityofrc.us
SUBJECT: Final Report – Review of Diversion Reporting and Billing Accuracy
Dear Ms. Ostos,
R3 Consulting Group, Inc (R3) is pleased to submit this final report containing the methodology and
findings for the review of diversion reporting and billing accuracy of the City of Rancho Cucamonga’s
(City) franchised waste hauler, Burrtec Waste Industries, Inc. (Burrtec).
The City and Burrtec entered into an Integrated Solid Waste Management Services Agreement
(Agreement), effective July 1, 2016, for the collection, transportation, recycling, processing, and
disposal of solid waste and other services performed within the boundaries of the City. The City
requested an audit of the Diversion Tonnage reports provided by Burrtec and an audit of billing
accuracy. The review period for this audit is January 1, 2020 through December 31, 2020.
Over the review period, R3 found minor discrepancies in tonnage reporting and billings, which have a
correspondingly minor effect on billing amounts and tonnage reporting. R3 also found that Burrtec met
its diversion requirement during the review period. The recommendations from our prior report have
been implemented by Burrtec to the extent such recommendations were requested by the City.
* * * * *
We appreciate the opportunity to complete this audit on behalf of the City. Should you have any
questions regarding our methodology or findings, or need any additional information, please do not
hesitate to reach out directly.
Sincerely,
Rose Radford | Sr. Project Manager
R3 Consulting Group, Inc.
415.347.9536 | rradford@r3cgi.com
TABLE OF CONTENTS
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy TOC
1. Review of Waste Generation and
Diversion Reporting
page 1
2. Review of Billing Accuracy
page 4
3. Review of Franchise Fees Paid
page 6
Exhibit 1:
Rate Analysis
separate excel file
1. REVIEW OF WASTE GENERATION &
DIVERSION REPORTING
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 1 of 7
Methodology and Findings
The R3 found that Burrtec’s accounting systems for tonnage reporting are complex, detailed, and
interconnected among the hauling unit’s franchises and the tonnages consolidated at West Valley
Material Recovery Facility (MRF), the transfer station used by Burrtec. Burrtec has been responsive and
provided data that allows review of the tonnages collected in Rancho Cucamonga; however, incidental
amounts of material are collected and reported that were not able to be fully verified.
Additionally, this year, Burrtec was not able to provide a full back-up for the calculation methodology that
“wraps up” into the full tonnage report. Consequently, we took a different approach to verifying tonnages
this year. This year’s review was facilitated by Burrtec providing significantly improved information
sources for the tonnage verification. However, because of the missing data points that tie the incidental
tonnages, we were unable to trace every data point for the audit months to the tonnage report.
The tonnages missing from our audit accounted for 3.3% of the total tonnages reported, and are
comprised of:
》 Bulky Item Allocation
》 T-Bin Allocation
》 Street Sweeping
》 MRF Floor Sort
》 Temporary Bins
》 Schools Allocation
R3 reviewed reasonableness and accuracy of tonnage reporting by performing the following steps:
1. Analyzed Burrtec’s monthly Waste Generation and Diversion Reports and identified months that
contain anomalies (discrepancies and/or unusual fluctuations) in reporting. February 2020 was
selected for the detailed audit as a month with 86% of the total tonnage reported on the average
month in 2020. This tonnage downturn may be associated with the onset of the COVID-19
pandemic, which began around that time.
2. Requested a detailed weight ticket record from Burrtec for February 2020, as well as randomly
sampled month of June.
3. Used a sample size calculator and a random number generator to establish a statistically
significant sample size that was pulled and tested digitally. Burrtec’s weight ticket tracking system
contains around 2,700 weight tickets per month. The weight ticket record contains a variety of
information including route number, date, weight, and the destination facility (which is usually the
West Valley MRF, which is the transfer station used by Burrtec to transfer most material hauled in
Rancho Cucamonga). R3 sampled a statistically significant sample of 351 weight tickets.
R3 pulled weight tickets and compared the values of the tonnages in the source documentation to
the tonnages on the weight tickets. We found no significant anomalies between the full printout
copies of the weight tickets and the weight ticket record during the weight ticket sampling. No
adjustment to monthly tonnage reporting is necessary.
4. Requested additional information that was needed to tie the weight ticket record to the monthly
reporting. Burrtec applies several adjustments to the weight ticket tonnages in their reports to
each jurisdiction served by the hauling division (which also includes the franchises of Upland and
Fontana, as well as some non-franchised customers, mainly on-call debris boxes). These
adjustments include the following:
a. Allocation of weight ticket tonnages by sector and by franchise where applicable. An
allocation by franchise was only needed for a few routes.
i. The hauler represented that the tonnages for each weight ticket were allocated
according to two different methodologies, depending upon whether the route was
Review of Waste Generation & Diversion Reporting
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 2 of 7
residential or commercial. For single-family residential routes, which sometimes
are shared with multi-family residential, the routes are allocated by number of
customers (ex. Route 492, which serves 3% multi-family residential customers,
and 97% single-family residential customers). For commercial/multi-family
customers, the route is allocated by volume served (ex. Route 43, which is a
route shared among multi-family and commercial customers, and some schools).
R3 finds that this allocation methodology is sound and reasonable.
ii. Although we were not able to analyze the subscription data for the route
allocations provided by Burrtec this year, during our audit for 2019 we compared
the route allocations provided for January – March 2019 to the subscription data
provided for January 2019 to assess accuracy of the allocation methodology.
Discrepancies were within an acceptable margin of error given expected
fluctuations in subscriptions over time.
b. Examined weight ticket record in “dump” system. After allocation of the weight ticket
tonnages by sector and franchise, the weight ticket tonnage is “split” into two or more-line
items in Burrtec’s “dump” system. R3 was only provided the parts of the “dump” system
that relate to reported tonnages for Rancho Cucamonga. The allocations provided by
Burrtec were reflected in the tonnage reporting.
c. Tied the itemized weight ticket record, which was provided by Burrtec post-allocation by
franchise and material type, to the monthly report for February 2020. Note that Burrtec’s
system is not able to show all the split commodities and that the split percentages are
entered manually in the notes section. Similarly, there were three tickets that showed
multiple commodity types on the sample tickets and just one in the report; again, this is
because their system can’t show the split commodities and the split percentages are
entered manually in the notes section. No adjustments necessary.
d. Assessed diversion rate reported in monthly reports. Per the Agreement’s requirements,
Burrtec calculates its diversion rate in monthly reports after deducting residuals. Burrtec
provided a description of their process for conducting these waste characterizations as
follows:
Random loads are set aside through the course of a week to be processed
(residential and commercial are processed separately on different days);
The loads are set aside from the balance of the material for processing;
The sort line/bunkers are cleared and emptied of any material; and
The material is run across the line and each commodity is weighed.
This establishes the characterization that will be in place until the next
characterization is done.
It should also be noted that Burrtec does complete a separate waste characterization for
each item on the list of diverted tonnages in the monthly report, and the waste
characterization results were provided in a separate document to R3 for February 2020.
The commercial recycling residual was reported as 35.14%, but in the back up
documentation provided by Burrtec, it was 35.86%. This change does not affect the
overall diversion % for February, which remains 30.37%.
For each residual amount reported in the monthly report, R3 confirmed that one of the
following applied:
o Burrtec provided back-up waste characterizations for nearly all the residuals
included in the report.
o No waste characterization was provided, but no tonnages were reported (waste
characterization would not be possible with no material collected).
o For a few, residual amounts in the report is based on a verbal statement from the
operator of the facility (green waste and street sweeping based on statement by
Review of Waste Generation & Diversion Reporting
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 3 of 7
West Valley MRF’s Compost Facility; transformation and C&D processing based
on operator statements; etc.).
During our review of the selected month, February 2020, R3 was able to positively affirm that Burrtec is
following the basic requirements of the Agreement regarding calculation of their diversion rate, including:
》 No self-haul tonnages were included in the report, which is in alignment with Agreement Section
4.14.1.
》 Diversion by percentage is correctly calculated by taking the total diverted tons over the total
hauled tons in each of the review months. No adjustment is necessary.
R3 did not examine and is not able to make findings about the accuracy of the following:
》 The tonnage reported by AB 939/CalRecycle reporting program codes.
The accuracy of the diverted tonnage and revenue reported in the recyclable materials marketing reports;
while Burrtec did provide detailed waste characterizations for residential, multi-family, and commercial
customers by month for February 2020, the data did not include sufficient information to tie out the
monthly report. This verification could be included in a future audit, if desired by the City.
The accuracy of the recording system for incidental, small-quantity materials reported in monthly reports,
such as Christmas Light Collection data.
Diversion Requirement
R3 reviewed Burrtec’s monthly reports to the City for the review period. Section 4.14 of the Agreement
requires that the diversion requirement of 30% be achieved over each calendar year after 2016. Table 1,
below, shows the net diversion as reported by Burrtec in each month of the review period of calendar
year 2020, demonstrating that Burrtec met the 30% diversion requirement in each month and exceeded
the requirement by 3.92% for the entire year. It should be noted that while the diversion achieved by
Burrtec is generally in line with diversion rates for similar communities in the City’s area, diversion still
shows significant potential for improvement. In other words, better diversion performance is possible.
Table 1: Net Diversion by Month During Review Period
2020
January 30.69%
February 30.37%
March 36.17%
April 37.06%
May 36.96%
June 34.29%
July 32.25%
August 32.17%
September 33.66%
October 34.16%
November 35.05%
December 34.15%
Total for Calendar Year
Total 33.92%
2. REVIEW OF BILLING ACCURACY
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 4 of 7
Methodology and Findings
R3 reviewed Burrtec’s billing to customers served under the Agreement to determine if ratepayers were
charged correctly for services provided by Burrtec during the review period, January 1, 2020 through
December 31, 2020. The rates charged in April 2020 were compared to the rates for service approved by
the City effective January 1, 2020.
For this review, R3 compared the rates for service charged by Burrtec to the approved rates by
undertaking the following steps for the review month of April 2020:
》 Compared subscription data to approved rates.
》 Compared billings to subscription data.
》 Compared payments recorded by Burrtec to billings.
》 Compared gross revenues recorded by Burrtec to historical gross billings reported to verify
accuracy.
In summary, R3 found:
》 Burrtec’s subscription record matched approved rates, with a few exceptions (detailed below):
– Burrtec mischarged a total of 4 customers during the month of April 2020. The total amounts
mischarged was not ever greater than $0.03.
》 Burrtec is charging some customers rates that are not City-approved but are based on other
approved rates. For instance, residential bin rates (likely for multi-family customers) do not exist for
1.5 CY, 2 CY, or 3 CY containers. Burrtec used commercial bin rates for these customers. The City
has included rates for those subscription sizes in the 2021 rate schedule, and accuracy for these
specific rate categories can be assessed during the next audit that includes January 2021. A table
summarizing the number of customers for each rate category in the sample months is provided
below.
Table 2: Number of Residential Customers with Bin Service
Billing Month 1.5 YD Bin 2 YD Bin 3 YD Bin
Apr-20 6 7 14
May-20 6 7 16
》 Burrtec is correctly billing customers according to the rates reflected in the subscription data.
》 Burrtec is recording payments that reflect Burrtec’s billing record.
》 Itemized statement of payments is similar in magnitude to gross revenues reported during the
review period, at $2,895,215 in April 2020 and $1,635,607 in May 2020.
In most cases, Burrtec is correctly charging its customers City-approved rates. R3 provided the findings
of this audit to Burrtec and asked for the company’s response regarding the customers charged rates
that were not approved or using another approved rate code. Burrtec responded to these questions
promptly and resolved the more unusual rates reported through site visits. Table 3, next page, presents
Burrtec’s responses and R3’s suggested action for each of the non-approved rates. For detailed
information regarding the rates Burrtec charged compared to the current rates in effect, please see
Exhibit 1 to this report.
Review of Billing Accuracy
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Table 3: Summary of Non-Approved Rates Charged to Customers by Burrtec
Service Description Burrtec Rate Approved Rate Error Reason Suggested
Action
CT-3yBin-2x $324.73 $324.72 Not charged correctly Correct error
CT-6yBin-3x $771.27 $771.24 Not charged correctly Correct error
Locking Bin $12.34 $12.33 Not charged correctly Correct error
In addition to residential and commercial accounts, billed bimonthly and monthly respectively, Burrtec bills
customers for debris boxes and compactors on an on-call basis. For this review, R3 chose one random
customer identification number pulled from the April 2020 customer transaction list for each of the debris
box and compactor rate codes and asked Burrtec to provide an invoice confirming the amount billed to
the customer. Burrtec provided invoices for the chosen customers and R3 confirmed that the debris box
and compactor rates were charged to customers correctly.
The Agreement allows the City to expand the audit further if the results of this audit show Burrtec has
incorrectly billed 2% or more of its customers. Upon completion of this audit, R3 found Burrtec to be
incorrectly billing about 0.01% of customers for the April 2020 billing period, so no expansion is
necessary.
In summary, R3 has found that Burrtec’s billing accuracy is high, with errors occurring in about 0.01% of
transactions.
3. REVIEW OF FRANCHISE FEES PAID
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 6 of 7
Methodology and Findings
R3 reviewed the franchise fees paid to the City by Burrtec for the review period from January 2020 to
December 2020. Burrtec pays the City a franchise fee and a household hazardous waste (HHW) fee on
a quarterly basis (on April 30, July 31, October 31, and January 31 of each year). If fees are not paid
within 30 days of the due dates, then Burrtec is required to pay a penalty of 10% of the amount owed for
the quarter.
Franchise fees and the HHW fee are calculated on a basis of gross receipts that Burrtec receives each
quarter. Gross receipts are defined in the Agreement as:
“Any and all monies received from Billings, and compensation in any form, of Contractor
or subsidiaries, parent companies or other Affiliates of Contractor, for the Collection and
transportation of Solid Waste pursuant to this Agreement, including, but not limited to,
Customer fees for Collection of Solid Waste, without subtracting Disposal fees, City fees
or other fees or any other cost of doing business.”
Franchise fees are paid on 15% of all gross receipts each quarter. The HHW fee is assessed on 0.75% of
gross receipts during the quarter. In addition to normal fee calculation and payment, Burrtec may be
subject to an increase in franchise fee amounts from 15% of gross receipts to 17% of gross receipts in
the event the hauler is not able to meet the diversion requirements stated in the Agreement.
R3 reviewed the detailed documentation and summaries of gross receipts provided by Burrtec and was
able to tie gross receipts to the amount reported to the City, as shown in Table 3, on the following page.
In summary, R3 has concluded that Burrtec:
》 Paid franchise fees based on reported gross receipts using the correct calculations;
》 Correctly reported gross receipts during the second quarter of 2020;
》 Paid Household Hazardous Waste fee based on gross receipts using the correct calculations;
》 Paid fees to the City on time for each of the payment quarters; and
》 Met the diversion requirements for the audit period and is not subject to the franchise fee
increase described in Section 4.14 of the Agreement.
Review of Franchise Fees Paid
City of Rancho Cucamonga | Final Report – Review of Diversion Reporting and Billing Accuracy 7 of 7
Table 3: Variance Between Gross Receipts Detail and Amounts Reported to City
BID Bill Group Service
Type
Q2 2020 Customer
Detail Data
Q2 2020 R3
Recalculation Variance
2448 RCUC-MF(2-4)-Bbl-Perm Residential $109,851.76 $109,851.76 $0.00
2469 YUK-MF(2-4)-Bbl-Perm Residential $20,721.15 $20,721.15 $0.00
2450 RCUC-Res-Bbl-Perm Residential $1,002,834.32 $1,002,834.32 $0.00
2472 YUK-Res-Bbl-Perm Residential $1,754,686.36 $1,754,686.36 $0.00
2488 RCUC-Res-HOA Residential $22,947.24 $22,947.24 $0.00
Liens Residential $0.00 $0.00 $0.00
2449 RCUC-MF(5+)-Bin-Perm Commercial $572,108.86 $572,108.86 $0.00
2444 RCUC-Com-Bin-Perm Commercial $1,761,814.69 $1,761,814.69 $0.00
2445 RCUC-Com-Bin-Tmp Commercial $53,026.82 $53,026.82 $0.00
2465 YUK-Com-Bin-Perm Commercial $655,721.48 $655,721.48 $0.00
2473 YUK-Res-Bin-Perm Commercial $12,682.99 $12,682.99 $0.00
2471 YUK-MF(5+)-Bin-Perm Commercial $502,051.33 $502,051.33 $0.00
2466 YUK-Com-Bin-Tmp Commercial $96,418.81 $96,418.81 $0.00
2481 RCUC-Res-Bin-Perm Commercial $2,193.48 $2,193.48 $0.00
2467 YUK-Ind-RO-Perm Roll-off $204,968.82 $204,968.82 $0.00
2446 RCUC-Ind-RO-Perm Roll-off $910,144.92 $910,144.92 $0.00
2447 RCUC-Ind-RO-Tmp Roll-off $143,114.45 $143,114.45 $0.00
2468 YUK-Ind-RO-Tmp Roll-off $83,172.19 $83,172.19 $0.00
2441 RCUC-BB-Ind-RO-Perm Roll-off $7,716.01 $7,716.01 $0.00
Grand Total $0.00
Percent Variance 0.00%