Despite strong opposition from a Graeagle resident, the Board of Supervisors took the first step Sept. 17 in approving a rate increase for garbage customers in eastern Plumas County.
InterMountain Disposal Inc. sought a 2.62 percent rate hike, which means roughly 50 cents to 70 cents per month for weekly pickup service.
The increase doesn’t apply to city of Portola residents because the city has a separate contract for garbage service.
Ricky Ross, co-owner of InterMountain Disposal, asked for the increase to capture the 10 percent rate of return guaranteed by his contract with the county.
The average rate of return for the years 2008 – 2012 was 2.46 percent. The average rate of return for Feather River Disposal during that same time period was 14.58 percent.
However, Graeagle resident Mark Mihevc argued that InterMountain Disposal’s rate of return was artificially lower because equipment costs and profit-sharing were included in the company’s expenses.
“The most problematic issue is equipment,” Mihevc said, arguing that the contract calls for InterMountain “to furnish the equipment.”
Supervisor Jon Kennedy, and John Kolb, representing the public works department, explained that the contract provision means that the garbage company, not the county, is responsible for providing equipment. It doesn’t mean that the cost incurred to supply the equipment isn’t a legitimate business expense.
Supervisor Lori Simpson added, “The forensic audit said equipment rental is an authorized expense.”
Both InterMountain Disposal and Feather River Disposal undergo annual audits, but InterMountain Disposal underwent a forensic audit in 2010, which Ross described as akin to “having the auditor move in with you” as every financial and management practice is scrutinized.
As for profit-sharing, Mihevc said, “It seems like this expense could be abused.”
Supervisor Kennedy agreed that he had some questions regarding profit-sharing for the employees, which was $87,000 last year.
“We need more information on that,” Kennedy said.
Ross said he has profit-sharing because “you want employees to stay around.”
He added that the federal government oversees the expenditure and that it is legal.
“There’s no doubt profit-sharing is legal,” Mihevc said. “But should it be at the ratepayers’ expense?”
Mihevc also noted that it is less expensive to have garbage service in Reno, where customers there also receive curbside recycling, which InterMountain Disposal does not provide.
Kennedy countered that the cost of doing business is less in Reno, where the “cost per customer is cheaper” because of the proximity of homes. He cited winter conditions as another disadvantage for InterMountain Disposal.
“It’s not easy here,” Kennedy said.
For his part, Ross said that part of the reason that his revenue is less than what it could be is because many businesses don’t have mandatory commercial pickup as required by the county.
Kolb said mandatory pickup isn’t enforced because the county doesn’t have a code compliance officer.
Supervisor Lori Simpson asked Mike Clements, of Feather River Disposal, who was in the audience, if he had a similar problem.
Clements said that he didn’t have the same issue, and Kolb said that it’s more problematic for InterMountain Disposal because that coverage area “is too close to Reno.”
Mihevc concluded his remarks by telling the supervisors, “I’m trying to save the ratepayers money. There’s all sorts of weird information. My job is to present it to you; you make the decisions.”
The board voted unanimously to waive the first reading of the ordinance, paving the way for the rate increase. A second reading of the ordinance is scheduled for Oct. 1.
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