The city will soon be looking for public input into a pair of proposed utility rate increases, one for refuse (garbage) pick-up and another for the local sewer rate. The issue was discussed last week, when the city council received an enterprise funds report from IGService, the same company that prepared the rate increase report for the water department portion of the city utility bill last year.
As Dan Bergman from IGService told the council, enterprise funds are intended to be self-sufficient, or self-supporting. As of this year, the refuse fund no longer pulls in as much money as the service is costing, despite the fact that Corcoran’s bill is higher than most surrounding communities. The sewer department continues to cover its expenses, but no money has been set aside for capital improvements—and those need to be addressed. Bergman is expected to come back to the council’s Nov. 14 meeting with a presentation of proposed rate increases, along with a pair of different scenarios for the council to consider. One of those two is switching the community to 96-gallon cans for refuse (the larger cans area already in place for recycling and green waste, with some residents also already possessing—and paying for—the larger can for garbage. A second scenario would take a franchise fee that is being paid by the refuse contractor and placing that money in the general fund, rather than putting it back into the refuse fund to lower overall expenses. As noted by Bergman, the franchise fees are supporting the enterprise, not the general fund, and increasing costs have exhausted the cash surplus in the fund. He also let the council know that the last rate increase for the fund occurred in 2007. With the department continuing to operate in a deficit, this year the refuse fund will lose $64,000. That figure goes up to $162,000 by fiscal year 2020. In order to correct that trend, Bergman said the city needs a five percent increase in refuse funds right away. The IGService proposal currently calls for the charge of a 64-gallon refuse can to go up from $25 per month to $29 per month. The cost of the 96-gallon refuse can would remain at $31.60 per month for residential customers. Under the new plan, residential customers would be less than the current rate for additional cans.
For commercial users, rates for smaller bins would be increased, while rates for larger cans would be reduced. Bergman said some commercial users could reduce their costs by switching from a small bin to a pair of 96-gallon cans. Corcoran users currently pay about $32 a month for refuse service, with a 96-gallon can; those with the smaller can pay about $25 per month. Compared to other Kings County residents, Lemoore charges approximately $23 a month and Hanford, with its new rate structure, will pay about $25 a month beginning next July. Both those cities provide their own garbage pick-up, including the trucks, while Corcoran’s service is contracted. Bergman said those cities have been able to purchase garbage trucks with grant funds. Comparisons to other cities show Corcoran users pay currently already pay more than Avenal, Parlier, Visalia, Sanger, Coalinga and Tulare. Helping Bergman come up with the new proposed rates was Richard Gress, owner of Tule Trash, which has the local contract. Tule is currently in escrow to sell to American Refuse, whose ownership also helped Bergman. Cost reduction options for refuse also included a 20 percent senior discount; reducing costs of community clean-ups; further reducing general government overhead costs; and getting a cost reduction from the Kings Waste and Recycling Authority from $75 per ton to $70 per ton. Bergman said an increase in the sewer enterprise fund is fueled by the need to complete capital projects. Some of those projects were recently announced by city staff. While th4 fund can make ends meet operationally with no rate increase, there is no money left to tackle the capital funds, which include reconstruction of lift station 14, budgeted this year at a cost of $500,000; completion of the west lagoon at the sewer plant, $1 million; and sewer main replacement, a multi-year project with a pricetag of $1.4 million. Bergman said impact fees can be used to fund a portion of those projects; howeer, the city will still need to raise about $2 million in the next few years to tackle those projects. Several other smaller projects are also in the planning stages, including rehab of several lift stations, upgrades to pumps and new control panel for the plant generator and an an upgrade to the digester treatment system.