14-084.02 Sunshine Recyclers: 2017 Solid Waste Disposal Rates sioian.••Oe
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11707 E Sprague Ave Suite 106 • Spokane Valley WA 99206
509.921.1000 ♦ Fax: 509.921.1008 •cityhall@spokanevalley.org
October 12, 2016
Marc B. Torre
President
Sunshine Recyclers, Inc. dba Sunshine Disposal&Recycling
2405 North University Road
Spokane Valley,WA 99206
Re: 2017 Solid Waste Transfer, Transport,and Disposal Rates, Contract 14.084.01
Dear Marc,
We would like to thank Sunshine Recyclers, Inc. ("Sunshine") for its solid waste transfer,
transport, and disposal services this past year. The first two years of the City of Spokane
Valley's (the "City") agreement with Sunshine (the "Agreement") for such services has been
successful for the City and our citizens and we look forward to our ongoing partnership.
2017 Rate Based on CPI
This letter is in regard to the rates for 2017. All capitalized terms herein shall have the
same meaning as set forth in the Agreement unless otherwise defined. As you are aware,
pursuant to Section 5.3 of the Agreement, Sunshine is entitled to an automatic increase in
the Service Fee and Organics Fee equal to:
90% of the percentage change in the average CPI for the 12 month period July 1
through June 30 of the calendar year the adjustment becomes effective as compared
to the CPI average for the preceding twelve month period and multiplying the result
by the then applicable Service Fee and Organics Fee.
The rate increase is effective December 1, 2016,and each December 1 thereafter. Pursuant
to our discussions, we understand that this automatic increase will result in an increase of
1.433% to the Service and Organics Fees, which would result in increased rates as follows
prior to the inclusion of the 3.6% refuse tax:
Service Fee: $94.54 per ton (from $93.20 per ton) + additional administrative fee
amount
Service Fee minimum: $15.62 (from$15.40)
Organics Fee: $51.38 per ton (from$50.65 per ton)
Organic Fee minimum: $10.28 (from$10.13)
Administrative Fee
Further, pursuant to Section 5.4, Sunshine is required to pay the City an administrative fee
of$125,000. This fee may be "added, as applicable, to the fees set forth in Section 5.2, as
adjusted, to make up the total tipping fees that [Sunshine] charges." The additional rate
shall be "based upon the annual projected tonnage of Acceptable Waste." The City and
Sunshine originally agreed upon an additional amount of$2.75 per ton to be added to the
rates to provide for the administrative fee, which was based upon an initial estimate of
45,500 tons.
Administrative Fee Overage
During 2015 Sunshine collected 63,411 tons instead of collecting the estimated 45,500
tons. Based upon that amount, Sunshine collected approximately $49,380 more than the
$125,000 administrative fee owed to the City pursuant to the Agreement. The Agreement
does not specify how overages shall be accounted for. However,since the amount added to
the Service and Organics fees shall be set "as applicable" and is based upon the projected
tonnage, the City requested that Sunshine incorporate the $49,380 overage into its rate to
be applied towards the administrative fee due to the City in 2016. By applying the overage
towards the administrative fee owed in 2016,and using a projected tonnage of 60,000 tons,
Sunshine then collected $1.55 per ton in order to provide the full $125,000 administrative
fee.
Sunshine is now projecting that it will collect 67,000 tons in 2016 as compared to the
60,000 tons that was previously estimated, which will leave the remaining administrative
fee overage collected in 2015 at$16,767. The remaining overage of$16,767 is equal to the
original administrative fee overage collected in 2015 ($49,380) less the amount applied to
rate adjustments in 2016 ($21,150) less the amount applied to maintain the minimum
service charge in 2015 and 2016 at $15.20 (total of$4,363 for 2015 and $7,100 for 2016).
The City hereby requests that Sunshine incorporate $11,200 to maintain the minimum
service fees as set forth below and the remaining$5,567 overage into the rate to be applied
towards the administrative fee due to the City in 2017. By applying the overage towards
the administrative fee owed in 2017, and using a projected tonnage for 2017 of 69,000
tons, Sunshine would then be required to collect $1.73 per ton in order to provide the full
$125,000 administrative fee.
2017 Rates
By our calculations, this will result in customers seeing a net increase in the Service Fees of
1.60% and will reduce the minimum Service Fee by 1.30%. The 2017 rates would then be
as follows:
Service Fee: $94.54 per ton + $1.73 (administrative fee) = $96.27 per ton ($99.74
per ton including the 3.6%refuse tax)
Service Fee minimum: $14.48 ($15.00 including the 3.6%refuse tax)
Organics Fee: $51.38 per ton (from$50.65 per ton)
Organics Fee minimum: $10.28 (from $10.13)
Refuse tax of 3.6%does not apply to yard waste.
These adjustments will go into effect in accordance with the Agreement as of December 1,
2016.
If you are in agreement with administrative fee rate, Service Fee and Service Fee minimum
as set forth herein,please sign below to acknowledge the receipt and concurrence to set the
rates as provided herein. Please return two copies to the City for execution. A fully
executed original copy evidencing the agreement between the City and Sunshine for the
new rates will be mailed to you for your files. This letter shall supplement the Agreement
solely as provided herein, but shall not otherwise amend or modify the Agreement and all
terms of the Agreement shall remain in full force and effect.
Very truly yours,
CITY OF SPOKANE Catf,e1A,VALLEY
Mark Calhoun,Acting City Manager
ATT S • APPROVED AS TO FORM:
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Christine Bainbridge, City Clef Office
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City Attorney
ACCEPTED AND AGREED:
CONTRACTOR
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