TOWN OF VIEW ROYAL COUNCIL REPORT: 2023-2027 GARBAGE AND HOUSEHOLD FOOD WASTE COLLECTION USER FEES

2023-2027 GARBAGE AND HOUSEHOLD FOOD WASTE COLLECTION USER FEES

RECOMMENDATION:

THAT the report dated April 25, 2023, from the Director of Finance titled “2023-2027 Garbage Collection and Household Food Waste User Fees” be received.

PURPOSE:

To consider a bylaw authorizing an amendment to Fees and Charges Bylaw No. 958, 2016, that would establish user fees for garbage and household food waste collection for the five years from 2023 to 2027.

TIME CRITICAL:

Garbage and food waste collection user fees are billed on the property tax notice mailed in the last week of May each year. The associated bylaw establishing the rates should be adopted no later than May 15 to allow sufficient time for implementation in the property tax billing system.

EXECUTIVE SUMMARY:

The 2023-2027 Financial Plan predicts that nearly $714,000 will be required to provide garbage and food waste collection in accordance with Collection and Disposal of Residential Garbage and Household Food Waste Bylaw No. 745, 2009 (attached). Staff have determined that the garbage and food waste collection fees currently set by Bylaw 958 would result in a shortfall of revenue to meet projected expense.

Staff recommend an increase of $24 per dwelling unit (from $226 to $250) for 2023. The 2023-2027 Financial Plan that was communicated to the public starting March 13, 2023, predicted an increase of $27 per household; however, increased user counts and updated predictions of costs have resulted in a recommendation for a reduced rate increase.

Fees and Charges Bylaw No. 958, 2016 was amended in 2022 to include not only the current year garbage and food waste collection fee, but also a schedule of fees for each of the four years afterward (up to 2026). Adopting a five-year rates bylaw helps to communicate future rate increases to ratepayers and may result in efficiencies of staff effort. Staff recommend updating the predicted rates for 2024 through 2027 based on predicted costs of delivering garbage and food waste collection services. Rates are expected to increase by $10-15 in each of the years 2024 to 2027.

BACKGROUND:

At its April 18, 2023, meeting Council approved in principle the proposed 2023-2027 Financial Plan that includes estimates for the garbage and household waste collection service, funded by user fees. Garbage and household waste collection costs are based on estimates to deliver the service regulated by Collection and Disposal of Residential Garbage and Household Food Waste Bylaw No. 745, 2009 (attached). This regulatory bylaw establishes the parameters of the service, including the frequency of service (weekly), the types of service (curbside and onsite), definition of dwelling unit, how users will be billed, and other regulations. Costs to deliver the service include those required for the garbage collection contract, landfill tipping fees, and administrative expenses for the five years of the financial plan.

The Community Charter section 194 permits Council to impose a fee in respect of a municipal service and requires the municipality to make available to the public, on request, a report respecting how a fee was determined. This report describes the various components that factor into the recommended garbage and food waste collection fees.

DISCUSSION:

Costs

The budget for the Town’s garbage collection and disposal services was $628,453 in 2022. Total user fees collected for the year were $638,939, however, costs totaled $623,945, resulting in a $14,993 surplus. This surplus was required to offset a 2021 deficit of $13,555.

Staff analyzed the cost drivers of this service, including the contract for garbage and food waste collection service, and known and projected landfill tipping fee rate increases. Landfill tipping fees for organics increased to $140 per metric tonne in 2022 from $120 in the prior year. The Capital Regional District has signalled that tipping fees are likely to increase in 2024. Both solid waste and organics volumes have been projected based on historical volumetric patterns.

Total costs for the garbage and household food waste collection service are anticipated to be $713,689 in 2023 and rise to $818,220 by 2027.

User fees

In 2022, garbage user fees were $226 per dwelling unit for curbside collection and $452 per dwelling unit for onsite collection. From 2016 to 2021, garbage user fees for curbside collection increased $2 – $3 per dwelling unit annually. This level of minimal annual increase became unsustainable in the economic climate of 2022, and rates were increased from $191 to 226, an increase of $35, that year.

Costs for collection represent about 60% of total per unit service costs and are established in a contract with the service provider to the end of 2026. Because this cost component is relatively predictable, staff recommend Council continue to establish user fees for the five-year period of the financial plan. This would provide a level of certainty for homeowners and allow for advance planning. User fees may be amended by bylaw if in any year staff become aware of a significant variance in projected costs, ensuring user fees recover the cost of providing the service.

Garbage collection user fees have been projected for the five years from 2023 to 2027 based on 2,806 dwelling units with curbside collection and 8 units with on-site collection. Contract rates to provide on-site collection are close to double that of curbside collection, therefore user fees for this high level of service are based on twice the curbside collection rate.

The proposed annual rate per dwelling unit for 2023 is $250 for curbside collection and $500 for on-site collection. This represents an increase of $24 for most users and $48 for the 8 users with onsite collection. After 2023, the annual increase is projected to be $10-$15 per year per dwelling unit for curbside collection.

The fee for extra bag decals increased from $3.00 to $3.50 in 2022, and no change to this fee is recommended for 2023 or for the five-year term.

The recommended 2023 rates are projected to result in $709,500 user fee revenue. The $4,189 shortfall between this amount and the 2023 projected costs of $713,689 is expected to be covered by the net effect of new users coming into the service or slightly lower volumes of waste than projected. Any actual surplus or deficit realized will influence next year’s rate recommendation.

Regional comparisons

Within the Capital Regional District, six of the thirteen municipalities provide curbside collection service for their residents. Of the six municipalities with curbside service, only Sidney and View Royal provide weekly garbage collection, while Esquimalt, Oak Bay, Saanich, and Victoria provide biweekly service. User fee comparisons are useful to the extent that the service (weekly versus biweekly) is comparable, among other factors such as whether yard and/or food waste is included and how the service is delivered (by contractor or municipal staff).

Curbside garbage collection user fees range from $128 to $287 in 2023 for the municipalities that provide the service, with View Royal falling in the middle of that range. Note this comparison does not reflect estimates for residents who use a private garbage collection service.

Curbside Garbage Collection User Fees

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The recommendation in this report has no significant direct impact to View Royal’s sustainability or climate change.

FINANCIAL IMPLICATIONS:

There are no additional financial implications other than those described in other sections of this report.

ALTERNATIVES:

Council may choose to amend the garbage and food waste collection rates to an amount different from that recommended. Doing so would likely result in a greater service deficit or surplus, to the extent that the approved rates result in user fee revenue that is sufficient to fund the costs to provide the service.

Council may wish to explore the option of reducing the frequency of garbage and food waste collection to biweekly, instead of weekly. If this is of interest, a future staff report would inform Council of the implications of that option, including any financial penalties associated with amending the garbage collection contract before the end of the term.

CONCLUSION:

Staff recommend garbage collection user fees be implemented as set out in Bylaw 1115 (draft attached) for the five-year term from 2023 through 2027 to recover the cost of providing the service. Residents will see the garbage user fee as a separate line on their annual tax notice mailed near the end of May. Bylaw 1115 must be adopted at the May 9, 2023, Council meeting to implement the rate change in time for 2023 tax notice production.

ATTACHMENTS:

1. Collection and Disposal of Residential Garbage and Household Food Waste Bylaw No. 745, 2009
2. Fees and Charges Bylaw No. 958, 2016, Amendment Bylaw No. 1115, 2023