Rate Reviews

City of Pasadena

Residential Rate Structuring

1998 and 2002

Client Needs

The City of Pasadena provides automated residential refuse and green waste services to customers and contracts for recycling collection.  The City wanted to restructure their existing solid waste collection rates in order to recover the cost of providing new services, assure rates charged reflect the cost to provide service, and to increase the participation in the City’s waste diversion program.   

HF&H Solutions

HF&H developed a rate model which calculated the necessary rates by customer type (i.e., residential solid waste customer, residential green waste customer, commercial solid waste customer using bins, etc.) based on City-provided number of customers and their current level of service.  We compared the current customer account data to previous year’s data and reported any significant variances to the City.

Rates for each customer type were based on the current customer count and the allocated costs to provide the services, to ensure customers paid for their proportionate share of the total costs for the services they were receiving. HF&H developed several different scenarios, including: 1) just funding current operations and 2) funding various new and expanded diversion-related programs.

Results

• The City’s reserve fund was operating with a budget deficit.  The new rates calculated by HF&H resulted in an operating budget surplus which allowed the City to begin building adequate reserves to help mitigate future rate increases, if necessary;
• Existing rates were not aligned with the cost of service; therefore, rates were revised to better reflect the cost of service;
• The City was able to implement and fund new diversion-related services which increased quantities of recycling and decrease materials going to the landfill;
• The new rates successfully transitioned customers to smaller refuse containers; therefore, resulting in increased recycling.