After much discussion at a recent special meeting of city council, a rate increase of 14.31 percent was approved for waste management services, effective Jan. 1, 2023. This rate increase will affect residents and businesses in the city of Portola.
The rate increase is in line with the revised and amended franchise agreement between Intermountain Disposal (IMD) and the City of Portola, with IMD being entitled to an annual rate adjustment for changes in the cost of doing business.
The most recent increase request included a carry-over amount set forth in the franchise agreement from the previous year but did not meet the entire requested amount from Richard Ross, owner at IMD. “We are never excited to come in for an increase this sizeable, but we have to pay for operations and expenses along the way,” Ross said when expressing a request for an increase of 16.85 percent.
A year ago, the calculated Consumer Price Index or CPI/Fuel increase was 7.72 percent. The rate increase was capped at 5 percent for 2022. The remaining 2.72 percent of the CPI/Fuel increase was rolled over to the 2023 rate increase.
This aligns with verbiage in the franchise agreement between the city and IMD, which states in section 5.3 of the agreement that in the event the change in the rate increase is greater than five percent in any given rate year, then the percentage increase in excess of the five percent shall be carried over to the next rate year, subject to the five percent maximum annual increase.
It is also noted that the company may petition the city for a waiver of the rate adjustment cap if the calculated increase exceeds five percent annually for two consecutive years.
Transfer station fee increase
The Plumas County Board of Supervisors approved a fee increase of 8.91 percent at the Delleker Transfer Station, effective July 5, 2022. IMD requested an additional increase for 2023 of 2.54 percent. The last increase of disposal fees at the Delleker Transfer Station was in 2019.
In conjunction with IMD’s request to raise refuse collection fees in Portola for that transfer station increase, city staff requested, and received, a complete copy of the company’s latest compiled financial statement. The document pertaining to this item states in part that “review of IMD’s full financial statement by staff allowed city staff to provide a statement to the city council that the rate increase request in 2019 for the rise in transfer station fees appeared to be true and correct. City staff requested IMD provide a complete financial statement – as was done in 2019 – however the company declined to issue the statement.”
It goes on to state that as such, city staff cannot state the proposed increase of 2.54 percent of refuse collection rates for the rise in transfer station fees is true and correct.
IMD also requested that an additional 1.25 percent be added to refuse collection fee increase for the period of July 5 to December 31, 2022 due to the rise in transfer station fees. “The 1.25 percent is to cover expenses and tipping fees at the Delleker transfer station that we have been paying,” Ross said. “It would carry until the next time there is an increase in fees, and we could then adjust it off of that point.”
Ross noted that IMD lost revenue in paying out additional tipping fees, which are the costs associated with taking a load of garbage from a truck to be weighed and dumped in Delleker at the transfer site. The payment goes to Intermountain Disposal county division, at $94 a ton, according to Ross.
“Expenses are going up astronomically in the United States,” Ross explained. “We are seeing it in fuel – in our area I believe fuel went up around 42 percent this year. Things like that are triggering this increase, but we do have to operate, perform and pay for expenses along the way.”
Portola Councilmember Stan Peiler asked if IMD would be willing to settle for something lower, noting that many area residents were already struggling financially.
“The reason I would stick to that number is that this is a national CPI index,” Ross said. “With the rollover from last year, we carried all last year without receiving that increase which already put us behind. I worry that if we don’t receive that increase, we will get even further behind, which could be detrimental to the services we provide. Our number one game plan is to provide the best service we can to the city without having to change things because we just can’t afford it anymore.”
Ross noted that without increases, you do fall behind and get into a bind. “That would be detrimental to the health and safety of the City of Portola,” he added. “It would go from $13.13 a month to $15.35 for a 32-gallon waste cart,” Ross explained.
City Public Waste Consultant Tom Valentino then noted that the city had not received a notice about the rate increase until October of this year.
“I think that IMD and city staff were in agreement about the 11.59 CPI increase and the 2.72 percent roll over from the prior year increase, but the transfer station rate increase of 2.54 percent we are not 100 percent comfortable with. We requested more information from IMD, for whatever reason they have not provided that to us- specifically their certified financial statements we could review here rather than go into their office,” Valentino expressed.
“It is contractually binding that the city of Portola come to the office to review those reports,” Ross responded. “We’ve had proprietary information get out – we still haven’t been able to get anyone to come over here. I don’t think IMD should be punished for a lack of city staff coming over to look at the paperwork.”
Interim City Manager Jon Kennedy clarified that there is no language stating that the city must go to the IMD office to inspect said financial statements. Kennedy also noted that there was room for improvement in best practices between IMD and the public when it comes to things such as billing.
Ross noted that he had worked diligently with the city since 2020 on this process and gained much ground in the attempt to make everything transparent. “All forward progress kind of just got halted when the last city manager left,” Ross said. “Things have been changed through the years that have muddied the waters, and I thought we were working very well to get those waters cleaned up with the city infrastructure committee.”
“The increase would come out to about $24 a year,” Councilmember Phil Oels commented.
One woman commented that IMD had a monopoly on the area, noting that the increase would negatively impact all Portola residents.
After some further discussion, council moved to approve a rate increase of 14.31 percent for waste management services provided by Intermountain Disposal unanimously by roll call vote. “I appreciate your time,” Ross closed.
For more information visit www.cityofportola.com .