2007-26658 ResoRESOLUTION NO. 2007.-26658
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, FOLLOWING A DULY NOTICED
PUBLIC HEARING AND THIRTY (30) DAYS' PRIOR NOTICE TO THE
CITY'S FRANCHISE WASTE CONTRACTORS, AS REQUIRED
PURSUANT TO SECTION 90-221 OF THE CITY CODE, RAISING THE
FRANCHISE FEE PAID TO THE CITY BY ITS FRANCHISE WASTE
CONTRACTORS FROM THE CURRENT FEE OF SIXTEEN PERCENT
(16%) OF THE FRANCHISEE'S TOTAL MONTHLY GROSS RECEIPTS
FOR WASTE REMOVAL IN THE CITY, TO EIGHTEEN PERCENT (18%)
OF SAID GROSS RECEIPTS; WITH SAID RAISE TO BECOME
EFFECTIVE ON OCTOBER 1, 2007.
WHEREAS, pursuant to the provisions established in Chapter 90, Article IV,
Division 3, Sections 90-221 through 90-255 of the Miami Beach City Code, the City
issues franchise to private waste contractors for residential and commercial waste
collection and disposal throughout the City of Miami Beach; and
WHEREAS, pursuant to Section 90-221 of the Miami Beach City Code, the City
Commission may adopt a resolution once yearly, raising the amount of the franchise fee
currently paid to the City by private waste contractor franchisees, raising said fee by up
to two percent (2%) of the franchisees' total monthly gross receipts; and
WHEREAS, the current fee of sixteen percent (16%) has been in effect since
October 1, 2003, therefore the City has not raised said fee in four (4) years; and
WHEREAS, hauling and disposal costs have increased for the City's private
waste contractors which require the City to adjust the household garbage and trash
collection fee by the contractually mandates Consumer Price Index or three percent
(3%) to be effective on October 1, 2007; and
WHEREAS, the Administration hereby recommends that the franchise fee be
raised from the current fee of sixteen percent (16%) of the franchisee's total monthly
gross receipts for waste removal within the City of Miami Beach, to a fee of eighteen
percent (18%) of said receipts, said raise to be effective on October 1, 2007; and
WHEREAS, as required pursuant to Section 90-221 of the City Code, a public
hearing to consider the aforestated increase was duly noticed and held on September
26, 2007, with thirty (30) days' prior notice of said hearing provided to the City's
franchise waste contractors.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission, following a duly noticed public hearing and thirty (30) days' prior notice to
the City's franchise waste contractors, as required pursuant to section 90-221 of the
T:\AGENDA\2007\sep2607 budget\Regular\SanitationFranchiseFeeReso.doc
City Code, raising the franchise fee paid to the City by its franchise waste contractors
from the current fee of sixteen percent (16%) of the franchisee's total monthly gross
receipts for waste removal in the City, to eighteen percent (18%) of said gross receipts;
with said raise to become effective on October 1, 2007.
PASSED and ADOPTED this 26th day of
ATTEST:
CITY CLERK
Robert Parcher
APPRO`!ED AS TO
FORM & LANGUAGE
t~ FOR EXECUTION
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llavla llermer
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Raising the Franchise Fee Paid to the City By Private Waste Contractors From the Current
Sixteen Percent to Eighteen Percent of the Franchisee's Total Monthly Gross Receipts From Waste
Removal in the City and raising the Household Sanitation Fee by the contractual CPI amount of three
percent (3%).
Key Intended Outcome Supported:
Ensure expenditure trends are sustainable over the long term
Supporting Data (Surveys, Environmental Scan, etc.): Survey of the Franchise Fees of the cities of
Miami, North Miami, North Miami Beach, South Miami.
Issue:
Shall the Mayor and the City Commission raise the private waste collection Franchise Fee and the
Household Sanitation Fee?
item Summaryircecommenaation:
The City Commission adopted Ordinance No. 90-2742 providing for Non-Exclusive Waste Contractor
Franchise Agreements on October 1, 2003. Chapter 90 of the Miami Beach City Code, Section 90-221
provides for regulations, fees and procedures, and specifies that the City has the option of raising the
franchise fee once yearly, said raises not to exceed two percent (2%). Pursuant to City Code, the
Franchisees were given a 30 day notice prior to the proposed increase. The additional revenues collected
in the amount of approximately $400,000 per year will cover the cost incurred for the increase in County
disposal costs and the increase in collection contract cost.
This fee increase affects Solid Waste Franchisees that provide service to commercial accounts and multi-
family units. Because of the varied type of accounts serviced, it is difficult to provide an average cost
increase per account. However, as an example, the average cost of waste disposal per yard is $7.75; there
fore, a twenty (20) unit complex that has a two yard container that is being serviced twice a week could incur
an increase of $4.20 per month or $0.21 monthly per unit. The two percent (2%) increase will keep Miami
Beach at the low end of rates charged by other area municipalities.
The three percent (3%) increase in the household garbage and trash collection fee is due to the contractual
Consumer Price Index clause of the private waste haulers contract. The index reflects increases in hauling
and disposal costs of the contractors. The City absorbed the increases in each of the previous two (2)
years, but since Sanitation is an Enterprise Fund, it must pass cost increases to its customers. Therefore,
the residential solid waste yard trash and bulk waste fee will be increased three percent (3%) in FY08; this
represents a $0.68 increase to a monthly residential bill. The additional revenues collected will be
approximately $54,000 per year.
The Administration recommends approval of the Resolution.
Adviso Board Recommendation:
Financial Information:
Source of Amount Account A "roved
Funds• 1
2
O I Total
Financial Impact Summary: The increase in the franchise fee is estimated to generate annual revenues
of $400,000 and the increase of the household sanitation fee will enerate $54,000 in annual revenues.
Cit Clerk's Office Le islative Trackin
Keith Wilder ext. 6192
Si n-Offs•
De artment t Assistant a a er Cit Ma er
FHB JMG
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m MIAMIBEACH
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,i4GE~fDA ITEM R7Ff
DATE 9-ab o~
m MIAMIBEACH
Cify of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor David Dermer and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager `~
DATE: September 26, 2007 ~"
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, FOLLOWING A DULY NOTICED PUBLIC HEARING
AND THIRTY (30) DAYS' PRIOR NOTICE TO THE CITY'S FRANCHISE WASTE
CONTRACTORS, AS REQUIRED PURSUANT TO SECTION 90-221 OF THE
CITY CODE, RAISING THE FRANCHISE FEE PAID TO THE CITY BY ITS
FRANCHISE WASTE CONTRACTORS FROM THE CURRENT FEE OF
SIXTEEN PERCENT (16%) OF THE FRANCHISEE'S TOTAL MONTHLY GROSS
RECEIPTS FOR WASTE REMOVAL IN THE CITY, TO EIGHTEEN PERCENT
(18%) OF SAID GROSS RECEIPTS; WITH SAID RAISE TO BECOME
EFFECTIVE ON OCTOBER 1, 2007.
ADMINISTRATION RECOMMENDATION
Adopt the resolution.
BACKGROUND
Under Chapter 90 of the Miami Beach City Code, Section 90-221 provides for regulations, fees, and
procedures, and specifies that the City has the option of raising the Franchise Fee once yearly, said
raises not to exceed two percent (2%) and shall be imposed only by resolution after a public hearing
and thirty days prior notice to all Franchise Solid Waste Contractors.
Under the terms of the contract between the City of Miami Beach and Waste Management, Inc. of
Florida, the compensation paid by the City shall be adjusted upwards or downwards according to the
Consumer Price Index, All Urban Areas (CPI-U) with an annual maximum adjustment of three
percent (3%).
ANALYSIS
As a point of comparison, the following table lists, in ascending order, the residential solid franchise
fee percentage rates of several local municipalities:
City of Miami
City of South Miami
City of North Miami
City of North Miami Beach
City of Miami Beach
22%
20%
20%
20%
18% (Proposed Increase)
September 26, 2007
Sanitation Franchise Fee Memo
Page 2 of 2
The proposed Franchise Fee increase from sixteen percent (16%) to eighteen percent (18%) will
generate additional estimated revenue of $400,000 per year. This additional revenue will be used to
partially offset the increased operational costs and the increased expenses caused by the County's
increase in solid waste disposal fees.
This fee increase affects solid waste franchisees that provide service to commercial accounts and
multi-family units. Because of the varied type of accounts serviced it is difficult to provide an
average cost increase per account. However, as an example, the average cost of waste disposal
per yard is $7.75; therefore, a twenty (20) unit complex that has a two yard container that is being
serviced twice a week could incur an increase of $4.20 per month or $0.21 monthly per unit per
month.
The two percent (2%) increase will keep Miami Beach at the low end of rates charged by other area
municipalities.
The three percent (3%) increase in the household garbage and trash collection fee is due to the
contractual Consumer Price Index clause of the private waste haulers contract. The index reflects
increases in hauling and disposal costs of the contractors. The City absorbed the increases in
each of the previous two (2) years, but since Sanitation is an Enterprise Fund, it must pass cost
increases to its customers. Therefore, the residential solid waste,~yard trash and bulk waste fee will
be increased three percent (3%) in FY08; this represents a $0.68 increase to a monthly residential
bill. The additional revenues collected will be approximately $54,000 per year.
CONCLUSION
The Administration recommends approval of the Resolution.
JMG/RCM/FHB
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