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APR 3 X990 BooK 19 Pf�u 745 <br />The Board reviewed the following memo dated 3/23/90: <br />DATIE: MARCH 23, 1990 <br />TO: JAMES E. CHANDLER <br />COUNTY ADMINISTRATOR <br />FROM: TERRANCE G. PINTO <br />DIRECTOR OF UTILITY SERVICES <br />STAFFED AND <br />PREPARED BY: JOSEPH A. BAIRD <br />BUDGET DIRECTOR <br />HARRY E. ASHER <br />ASSISTANT DIRECTO OOF UTILITY SERVICES <br />CINDY E. WHITE O,C:L-*� <br />FRANCHISE COORDINATOR <br />DEPARTMENT OF UTILITY SERVICES <br />SUBJECT: HARRIS SANITATION RESIDENTIAL RATE INCREASE AND <br />INCREASE IN FRANCHISE FEES FROM ONE PERCENT TO SIX <br />PERCENT ANNUALLY <br />BACKGROUND: <br />Harris Sanitation, Inc., currently charges a garbage collection fee of <br />$5.25 per house to their residential customers. They would like to <br />raise this rate to $8.50, an increase -of -62%. The County's franchise <br />agreement with Harris (Resolution No. 82-50, Section 14) gives us the <br />authority to review any proposed changes in their residential rates. <br />An analysis of their request is presented below. <br />In addition, the Department of Utility Services deems it necessary to <br />increase franchise fees for Harris Sanitation, Inc., from one percent <br />to six percent annually. <br />ANALYSIS: <br />Revenue: <br />1. In analyzing and comparing revenues from year to year, a <br />substantial decrease in residential income was noticeable from <br />1986 to 1987, both in dollars and as a percentage of all income. <br />Upon further review, we found that tipping fees were eliminated <br />for residential garbage in that year. The savings that resulted <br />($2.65 per house), was passed on to Harris, customers in the form <br />of lower rates, thereby lowering total residential income for the <br />company. <br />2. Although it initially appeared that the number of residential <br />customers was not increasing over the years, further analysis <br />showed that Harris tended to bill mobile home parks on one bill <br />rather than by individual units, thus skewing the tally downward. <br />Counting these homes as separate units along with other <br />residences reveals an actual growth of 23.4%. <br />Expense: <br />1. Labor costs in the form of drivers and helpers have risen only <br />6.1% since May 1987, a conservative increase. <br />18 <br />