LA WATCHDOG--Our cash strapped City is eyeing new sources of revenue to offset the adverse impact of Covid-19 on the City’s seven economically sensitive taxes* that provide over 72% of the City’s General Fund revenue in a normal year.
Near the top of the list is an increase in our Solid Waste Fee (see below) that is included in our bimonthly bill from the Los Angeles Department of Water and Power. This fee to homeowners and multifamily homes (2 to 4 units) pays for the weekly pick up of our trash (black barrels), recyclables (blue), lawn and tree trimmings (green), and horse manure (brown).
According to the Supporting Information provided by the City Administrative Officer to the Budget and Finance Committee, the Solid Waste Resources Revenue Fund is receiving a $25.5 million subsidy from the General Fund. The Fund transferred $84.2 million of the $109.7 million the City claimed as the full reimbursement amount.
This year, the City is expecting revenue from the Solid Waste Fee of $287 million. This fee will be paid by 530,000 single family residences and 220,000 multifamily homes. Therefore, to raise an additional $25.5 million needed to eliminate the General Fund subsidy will require a rate increase of 8.8%, from $36.32 to around $39.50 a month for basic service to a single family home.
The City may be justified in increasing our fees since the last fee increase was in 2008 under Mayor Villaraigosa. From September of 2006 to September of 2008, Villaraigosa increased our rates four times, tripling our rates from $11 to $36.32 a month. One of his justifications was that the new revenue would provide additional funding to hire additional police, a ruse that was later exposed by Controller Laura Chick.
But before Bureau of Sanitation, the City Council, and Mayor Garcetti raise our rates, we deserve a detailed, well written, easy to understand analysis of the program’s staffing and cost structure. This would include not only direct costs of labor and fringe benefits, but also of capital costs (interest and principal payments); outstanding debt; the condition of its equipment; projections for the next five years; the various department, divisional, and administrative overhead charges; the basis for the $109 million reimbursement amount; and the calculation of the monthly fee. We will also need an understanding of the program’s efficiency when benchmarked against other comparable public and private operations.
Of course, we would expect a robust and transparent discussion involving this increase in our Solid Waste Fee.
*The City’s seven economically sensitive taxes are property, utility (power, gas, communications), business, sales, hotel, documentary transfer, and parking occupancy.
Per the Bureau of Sanitation, “the Solid Resources Fee not only funds the collection of solid waste, it pays for salaries, direct and indirect overhead, equipment, ancillary equipment, refuse and recycling containers and vehicles, landfill costs, whether for disposal or for resource recovery facilities or refuse to energy and fuel facilities or closure of City owned facilities, development, acquisition, construction, operation and maintenance of equipment, alternative fuel infrastructure, buildings or facilities used in the collection, recycling, recovery of waste resources and/or disposal of solid waste or storage of solid waste related equipment, transfer facilities, resource recovery facilities or transfer equipment, maintenance of transfer facilities or equipment, or for facilities and equipment used in the recovery of waste resources in the form of energy, alternative fuels or manufacturing feedstocks.”
It is rumored that there are numerous brown barrels installed on the third and fourth floors of City Hall.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. He can be reached at: firstname.lastname@example.org.)