Workshop Item Joe Huss, Finance Director/Asst. City Manager
Title
Title
2022 Proposed Sanitation Fund Budget
end
Background
The Sanitation Fund accounts for the city’s refuse and recycling program. Walters Recycling and Refuse, Inc. provides refuse collection and recycling services for all Blaine residents. The current contract term, which was extended in 2019, is from January 1, 2016 through June 30, 2024.
Revenues
Over 96% of the revenue required to operate the Sanitation fund comes from charges for service. Given the increases in expenses as described above and the expectation that the increases will continue into the future, combined with the lack of credits received from recycling commodities, the quarterly rate charged to households will increase by $1.50 ($0.50/month) for all container sizes in budget year 2022. This is consistent with the five-year budget plan as presented to Council last year. The budget as proposed will result in a projected $128,400 increase in fund reserves in 2022. A healthy fund reserve is particularly important in this operation, considering the relative volatility of the market.
Expenditures
The proposed budget for 2022 and the accompanying five-year plan show a healthy position associated with the business of waste collection and disposal. The terms of the new contract with Walters directs that the basic monthly waste and recycling collection charges per household will increase by 39 cents. This increase, combined with the expectation that the customer base will increase by 250 households, results in an increase in budgeted expenses of $178,560 over 2021 projections. Because of the closure of the Great River Energy facility, collected waste continues to be hauled to a landfill for disposal. Tipping fees at the landfill are expected to increase $1.75 per ton. As a result, waste disposal expenses are budgeted to increase $74,000. The more volatile point in the model is in how recyclable material will be disposed, and how much it will cost. The 2021 model assumed a per ton commodity fee of $37.60, however Walters has been able to remarket curbside recyclables resulting in an average net year to date revenue of $16.06 per ton. The updated model assumes a net zero rate of expenditures per ton for recyclables in 2022. The attached budget document proposes 2022 budgeted expenses of $4.8 million; a $126,000 increase over the 2021 budget.
Staff Recommendation
Request council discussion and direction regarding the proposed 2022 Sanitation Fund Budget.
Attachment List
PowerPoint
Writeup