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Resource Recovery proposes fee hike starting in 2013

Monday, May 7, 2012 by Michael Kanin

The head of the City of Austin’s Resource Recovery department is calling for a change in rate structure that would, if implemented, bring about another rate increase for Austin residents. Bob Gedert had indicated in June, 2011, that the organization would seek to raise rates its rates for fiscal year 2013.


Gedert discussed the change during this week’s presentation on the department’s proposed budget for FY2013. As part of the PowerPoint, Gedert also revealed that his department would like to construct three new North Austin buildings: A north household hazardous waste drop-off, a north fueling center, and a north service center.


“Sometime this summer, Council will be presented with a package of inventory and facility needs on city structures, and we’re part of that package,” he told Council members. “Part of our unmet needs is our presence up north.”


The new Resource Recovery rate structure would split, rename, and increase the fixed portion of ratepayers’ bills. What is now a lump, $8.75 fee known as the base rate would rise 25 cents to $9. Ratepayers would see the fee on their bills as two separate charges, one for recycling services and the other for composting.


Gedert noted that curbside composting wouldn’t be available until 2016. However, he argued that equipment costs associated with changes to the trucks that will collect the compost necessitate the fee that would go into effect in FY2013. He added that the cost associated with the composting ramp-up would be reduced after those changes were made. He did not say whether the fixed fee would correspondingly drop.


That increase would be coupled with a revised trash fee of 18 cents per gallon of the four types of trash carts – 21, 32, 64, and 96 gallons –  that the city provides to its residents. In addition to the 25 cent fixed fee raise, customers who use the 21 gallon version would see a monthly three cent increase, users of the 32 gallon bin would see their bills go up each month by $1.26, the 64 gallon would rise every month by $1.77, and the 96 gallon would increase per month by $3.01.


Per gallon rates would continue to go up until 2017. By that point, they will have doubled to 36 cents a gallon. That would result in an eventual monthly $3.81 hike for 21 gallon users, a monthly $7.02 rise for the 32 gallon cart, a monthly $13.29 increase for ratepayers with a 64 gallon bin, and a monthly $12.61 hike for users of the 96 gallon receptacle.   


Gedert told Council members that the new rates would help Resource Recovery rebalance its books. “We have a five-year plan to resolve this imbalance,” he said. “Our revenues are not keeping pace with the expenditures. My first line of defense for the first two years being here in Austin has been cost efficiencies…I have not come before you with a rate increase because I wanted to get our expenditures in line before I justify a rate increase.”


“I am now before you saying that I will need a cost increase – a bump up in the revenues – to help off-set this structural defect,” he continued.


Gedert added that the new rates would also deliver more bang for the cost-incentive approach employed by Resource Recovery to reduce that amount of the city’s trash. “This approach that you see (here)…is a more pure pay-as-you-throw,” he said. “It’s equivalent to the kilowatt hour rate on a electric utility bill, where you can turn off your lights, reduce your electric consumption, (and) reduce your expenses.”


For evidence that the hike might sit well with ratepayers, Gedert pointed to a 2011 survey which concluded that 39 percent of Austinites would be willing to pay an additional $10 to help the city reach its zero waste goals. The study also concluded that 10 percent of city residents would pay an additional $5, and four percent would pay an additional $2.


Council Member Bill Spelman pointed out that, even with the results of the survey, half of the city wouldn’t be willing to pay higher rates to further Austin’s zero waste initiative. “The budget presentation showed that (Resource Recovery) is on a fast track toward an ambitious goal,” Spelman told In Fact Daily via email. “We know Austin residents will be facing increases in water and electric rates, and many local governments are talking about property tax increases, too. I think we need to proceed cautiously toward the Zero Waste goal so that we don’t overburden ratepayers.”

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