Rate Reviews

Central Contra Costa Solid Waste Authority (CCCSWA)

Cost of Service and Rate Review

1994 - 2009

Client Needs

The CCCSWA has relied on HF&H to provide them with expert rate review consulting for over 10 years. In accordance with the franchise agreements between the City and WMAC and Allied, the annual adjustments to the Company's compensation is determined using one of two methodologies:

1. An index-based adjustment, where the haulers’ approved compensation from the prior year is adjusted by various CPI’s (i.e., Fuel Index for fuel costs, Urban Wage Earners for labor costs, etc.); or,
   
   
2. A cost-based adjustment, where the haulers’ compensation is calculated by forecasting costs based on actual results from the most-recently completed rate period, reviewed and adjusted for non-allowable costs.

For over ten years, HF&H has performed the CCCSWA’s annual rate review of:

1. Waste Management of Alameda County's (WMAC’s) rate adjustment application for the collection, processing, and marketing of recyclable materials and organic materials and
   
   
2. Allied Waste Industries (Allied’s) rate adjustment application for the collection and disposal of solid waste.

HF&H Solutions

1. Discussion of policy and program issues with the CCCSWA Board and WMAC’s and Allied’s representatives;
   
2. Application compliance testing and consistency testing;
   
3. Testing for mathematical accuracy;
   
4. Testing for logical consistency;
   
5. Verifying the reasonableness of projected costs for the implementation of a new holiday tree collection program;
   
6. Identifying an alternative methodology for allocating;
   
7. Assisting the Authority with alternative rate scenarios to set rates by customer types, and establishing extra services rates (i.e., backyard service rates, commercial push-out rates, bin replacement fees, and hard-to-serve rates);
   
8. Review projected revenues; and,
   
9. The calculation of a reasonable profit.

Results

As a result of our review conducted in 2003, the hauling companies’ combined compensation request of $31,657,000 was reduced to $26,814,000, a $4,972,000 savings to the rate payers within the Authority’s service area.