East Bay Sanitary, the company that has been El Cerrito's waste hauler since 1941, provides service at a cost that compares favorably with waste haulers in surrounding localities, says a staff report that recommends extension of the city's contract with the firm until 2025.
The recommendation goes before the City Council at its meeting tonight, Tuesday.
The current contract expires in 2018, and the proposed extended contract would include several revisions that could save money for the city and residents while also providing improved service, the staff report says.
The proposal before the council tonight does not address the rates that residents will pay on their future bills from East Bay Sanitary, said Melanie Mintz, manager of the city's Environmental Services Division.
"We expect that the whole package will result in lower rates than without the extension. We are still working out all the variables," she via email in response to Patch. "Solid waste rates are reviewed each year by Council in December and if the franchise extension is approved tomorrow night, we will be able to put all those variables into our rate models and discuss them, for the upcoming year, at the December meeting."
Existing rates paid by El Cerrito residents for garbage and green waste service compare favorably with other nearby jurisdictions, the staff report said. Perhaps the most comparable nearby city in terms of service is Albany, whose "solid waste collection rates have increased in recent years and now, on average, are greater than El Cerrito’s collection rates for residential subscribers," the report says.
A table comparing El Cerrito's rates with seven other jurisdictions is included in the staff report, which is attached to this article.
The new package was formulated following a review last year of existing rates and operations by an outside consultant, R3 Consulting Group Inc., that identified several opportunities for improved efficiencies, according to the staff report.
The city then engaged in negotiations with East Bay Sanitary to come up with terms of the new agreement. Changes include extra costs to the company, including a reduced profit margin for the company by having East Bay Sanitary increase its operating ratio to 90.5 percent from 89 percent, a freeze on company officer salary next year, and an increase in the company's annual franchise fee to 12 percent from 10 percent, resulting in an estimated increase of about $100,000 to the city's general fund yearly, according to the staff report.
The new pact also includes the company's "increasing its customer service hours via phone, email, and walk-in to its El Cerrito offices and running a website with online bill payment by checking accounts" and the company "providing other new services, including container cleaning and labeling, brochure distribution, electronic waste collection, and increased on-call services," the report says.
The new agreement would also help offset revenue losses suffered by the company in the shift by many customers to smaller 20-gallon garbage cans, according to the staff report.
A more complete description of the terms and council resolution are included in the report.
"These terms represent the culmination of several months of good faith negotiations by the City and the Company," the report says. "If approved by the City Council, the Fifth Amendment to the Franchise Agreement will serve to establish a greater level of partnership between the Company and the City, and by taking away the revenue losses associated with migration to smaller cans, the partnership includes the Company being an active partner in encouraging greater participation in recycling, green waste and other diversion programs."
The City Council meeting begins at 7 p.m. at City Hall.
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