Presentation for Solid Waste and Wastewater cost of service results follow-up 

Council Conference Room
Thursday, December 9, 2021 | 4:30 p.m.
Cost of Service follow-up for Wastewater and 
Solid Waste
1

Additional Cost of Service (COS) Analysis 
• Wastewater
• Solid Waste
• Next Steps – Implementation Timeline
Agenda
2

Wastewater COS 
Additional Analysis
3

FY2021-22 Revenue at Existing Rates 
Compared to COS Results ($millions)
Customer Class
FY 2021-22 
Revenue 
Recovery at 
Existing Rates 
FY 2021-22 
Revenue
With 4% and
100% COS 
Required
$
Revenue 
Change
Required % 
Revenue 
Change
Single Family
$26.3 
$23.1 
($3.2)
-12.2%
Multifamily
$3.3 
$4.5 
$1.2 
36.4%
Non-Residential
$16.2 
$20.0 
$3.8 
23.5%
Total
$45.8 
$47.6 
$1.8 
4.0%
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
4

FY 2021-22 Revenue at Existing Rates with 4% increase 
Across the Board Compared to COS ($ millions)
Customer Class
FY 2021-22 
Revenue 
With 4% 
Across the 
Board 
FY 2021-22 
Revenue
With 4% and
100% COS 
Required
$
Revenue 
Change
Required % 
Revenue 
Change
Single Family
$27.4 
$23.1 
($4.3)
-15.7%
Multifamily
$3.4 
$4.5 
$1.1 
32.4%
Non-Residential
$16.8 
$20.0 
$3.2 
19.0%
Total
$47.6 
$47.6 
$0.0 
0.0%
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
5

COS 5-Year Transition Plan
• It took us many years to get out of alignment, so we will 
not correct alignment in one year
• A 5-year projection of revenue requirements was 
completed, which included additional projected rate 
increases needed
• Recommendation to transition over 5 years with 
following options
• Be at 50% COS alignment by year 5
• Be at 75% COS alignment by year 5
• Be at 100% COS alignment by year 5
6

FY 2025-26 COS Post Transition Results at 
50% COS ($ millions)
Customer Class
FY 2025-26 
Revenue at 
Existing Rates
FY 2025-26 
Revenue With 
Rate Increases 
and 50% COS
Difference 
from COS
Indicated 
Revenue 
Adjustment
Single Family
$25.7 
$29.4 
$3.7 
14.4%
Multifamily
$3.2 
$3.8 
$0.6 
18.0%
Non-Residential
$21.0 
$25.1 
$4.1 
19.6%
Total 
$49.9 
$58.3 
$8.4 
16.9%
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
7

FY 2025-26 COS Post Transition Results at 
75% COS ($ millions)
Customer Class
FY 2025-26 
Revenue at 
Existing Rates
FY 2025-26 
Revenue With 
Rate Increases 
and 75% COS
Difference 
from COS
Indicated 
Revenue 
Adjustment
Single Family
$25.7 
$27.0 
$1.3 
5.2%
Multifamily
$3.2 
$4.3 
$1.1 
33.3%
Non-Residential
$21.0 
$27.0 
$6.0 
28.5%
Total 
$49.9 
$58.3 
$8.4 
16.9%
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
8

FY 2025-26 COS Post Transition Results at 
100% COS ($ millions)
Customer Class
FY 2025-26 
Revenue at 
Existing 
Rates
FY 2025-26 
Revenue With 
Rate 
Increases and 
100% COS
Difference 
from COS
Indicated 
Revenue 
Adjustment
Proposed 
Revenue 
Adjustment
Single Family
$25.7 
$24.7 
($1.0)
-4.2%
0%
Multifamily
$3.2 
$4.8 
$1.6 
50.3%
45.6%
Non-Residential
$21.0 
$28.8 
$7.8 
37.2%
33.6%
Total 
$49.9 
$58.3 
$8.4 
16.9%
16.9%
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
9

FY 2025-26 COS Post Transition Results 
compare 50%, 75% and 100% COS ($ millions)
Customer Class
FY 2025-26 
50% COS Rate 
Adjustment
FY 2025-26 
75% COS Rate 
Adjustment
FY 2025-26 
100% COS Rate 
Adjustment
Single Family
$29.4 
$27.0 
$24.7
Multifamily
$3.8 
$4.3 
$4.8 
Non-Residential
$25.1 
$27.0 
$28.8 
Total 
$58.3 
$58.3 
$58.3 
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
10

FY 2025-26 COS Post Transition Results 
compare 50%, 75% and 100% COS ($ millions)
Customer Class
FY 2025-26 
50% COS Rate 
Adjustment
FY 2025-26 
75% COS Rate 
Adjustment
FY 2025-26 
100% COS Rate 
Adjustment
Single Family
14.4% 
5.2% 
0%
Multifamily
18.0% 
33.3% 
45.6% 
Non-Residential
19.6% 
28.5%
33.6%
Total Over-all % Change
16.9% 
16.9% 
16.9% 
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
11

COS 5-Year Transition Plan to 50% COS Rates
Customer Class
FY 
2020-21
FY 
2021-22
FY 
2022-23
FY 
2023-24
FY 
2024-25
FY 
2025-26
FY 
2025-26 
W/O COS
Residential Base*
$27.32 
$28.24 
$28.24 
$29.67 
$29.67 
$31.18 
$31.92
Multifamily Base*
$9.76 
$10.22 
$10.22 
$10.92 
$10.92 
$11.66 
$11.40
Non-Residential
Volumetric**
$3.49 
$3.66 
$3.66 
$3.92 
$3.92 
$4.19 
$4.08
Customer Charge
$7.65 
$8.02 
$8.02 
$8.59 
$8.59 
$9.19 
$8.94
*   Monthly Charge per Dwelling Unit
** Per 1,000 Gallons
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
12

COS 5-Year Transition Plan to 75% COS Rates
Customer Class
FY 
2020-21
FY 
2021-22
FY 
2022-23
FY 
2023-24
FY 
2024-25
FY 
2025-26
FY 
2025-26 
W/O COS
Residential Base*
$27.32 
$27.65 
$27.65 
$28.15 
$28.15 
$28.68 
$31.92
Multifamily Base*
$9.76 
$10.57 
$10.57 
$11.84 
$11.84 
$13.17 
$11.40
Non-Residential
Volumetric**
$3.49 
$3.73 
$3.73 
$4.11 
$4.11 
$4.50 
$4.08
Customer Charge
$7.65 
$8.17 
$8.17 
$8.97 
$8.97 
$9.82 
$8.94
*   Monthly Charge per Dwelling Unit
** Per 1,000 Gallons
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
13

COS 5-Year Transition Plan to 100% COS Rates
Residential Remains at Current Rates Through FY26***
Customer Class
FY 
2020-21
FY 
2021-22
FY 
2022-23
FY 
2023-24
FY 
2024-25
FY 
2025-26
FY 
2025-26 
W/O COS
Residential Base*
$27.32 
$27.32 
$27.32 
$27.32 
$27.32 
$27.32 
$31.92
Multifamily Base*
$9.76 
$10.82 
$10.82 
$12.47 
$12.47 
$14.21 
$11.40
Non-Residential
Volumetric**
$3.49 
$3.77 
$3.77 
$4.21 
$4.21 
$4.66 
$4.08
Customer Charge
$7.65 
$8.27 
$8.27 
$9.22 
$9.22 
$10.23 
$8.94
*   Monthly Charge per Dwelling Unit
** Per 1,000 Gallons
***Residential revenue above COS is used to adjust the multifamily and nonresidential class rates
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
14

FY 2025-26 COS Post Transition Results compare 
50%, 75% and 100% COS
Customer Class
FY 
2025-26
50% COS
FY 
2025-26
75% COS
FY 
2025-26
100% COS***
FY 
2025-26 W/O 
COS
Residential Base*
$31.18 
$28.68 
$27.32 
$31.92
Multifamily Base*
$11.66 
$13.17 
$14.21 
$11.40
Non-Residential
Volumetric**
$4.19 
$4.50 
$4.66 
$4.08
Customer Charge
$9.19 
$9.82 
$10.23 
$8.94
*   Monthly Charge per Dwelling Unit
** Per 1,000 Gallons
***Residential revenue above COS is used to adjust the multifamily and nonresidential class rates
Transition to COS over 5-year period including 4%, 6%, and 6% increases needed in financial plan
15

SFR Inside City Bill COS Impact
Based on FY 2021-22 rates for Chandler; the comparison cities are FY 2020-21 rates
Wastewater Rates
16

Multi-Family Inside City Bill COS Impact
Assumes 150 Units
Based on FY 2021-22 rates for Chandler; the comparison cities are FY 2020-21 rates
Wastewater Rates
17

Non-Residential Inside City Bill COS Impact
Assumes 200,000 Gallon Usage on 2” Meter
Based on FY 2021-22 rates for Chandler; the comparison cities are FY 2020-21 rates
Wastewater Rates
18

Industrial Inside City Bill COS Impact 
Assumes 312,000,000 Gallon Usage on 8” Meter
Based on FY 2021-22 rates for Chandler; the comparison cities are FY 2020-21 rates
Wastewater Rates
19

Policy Decision: 
Wastewater 
Transition over 5 years to 50%, 75%, or 
100% COS for all customer classes
20

Solid Waste COS 
Additional Analysis

Solid Waste COS Analysis
Fund Balance Information
22
•
“Minimum reserve” is the minimum amount of fund balance our financial policy requires us to maintain to ensure business 
continuity should there be a major revenue shortfall, or unplanned operating or capital need. Best practice is to maintain a more 
robust reserve
•
Post Closure reserve is required by statute to allow for funding of future unplanned capital projects should the need arise due to 
the closure of the landfill
Includes first year 
6% Increase
Excludes first year 
6% Increase

Solid Waste COS Analysis
COS Actions 
Project team analyzed multiple alternatives and found  consensus 
around two (2) fee policy options for consideration
• Fee policy option #1: A) Charge for use of RSWCC 
B) Limit “free” bulk collection 
• Fee policy option #2: Eliminate alleyway service
Council direction was to evaluate additional options:
• Evaluate monthly cost increase for those with alleyway services
• What would rate effect be with one free visit to RSWCC annually
• What would rate effect be with two free bulk pick-ups annually
23
Monthly Residential Fee $17.95

Solid Waste COS Analysis
Policy Option#2:  Alleyway Service
24
Equity Issues
• Contractor charges City more for alleyway service
• Curbside customers pay same amount as 
alleyway customers
• Alleyway container costs are significantly higher 
than curbside containers
• Alleyway receives higher level of service (larger 
bins / more convenience)
Options
• Eliminate alleyway service
• Net reduction of $153k annual cost
• Eliminates ~1% rate increase over 5-year period
• Charge recipients for cost of service
• Adds $1.61 to monthly bill for those with alley 
service
• Generates $153k 
• Eliminates a ~1% rate increase over 5-year 
period

Solid Waste COS Analysis
Policy Option #1A:  Charge for Use of RSWCC
25
Equity Issues
• Only 10% of customers use RSWCC 
more than 1x a year
• Only 18% of materials assessed a fee
• 85% of cost to operate RSWCC funded 
from monthly user fee ($1.55/month)
Options
• Charge for trash and green waste
• Adds $595k revenue
• Reduces monthly bill by $0.64
• Offer one free visit per year
• Reduces revenue to $382k
• Monthly bill would reduce by 
$0.41
Existing
Proposed
Base Fee
$0.00 
$10.00 
Tip Fee Rate
$50/ton
$50/ton
($0.025/lb.)
Fee Notes
0 - 200 lbs free
0 - 400 lbs free
Fee 
Application
C&D/Manure 
only
All Waste Streams 
Except Recycling
Average Bill
Existing
Proposed
Avg. Load 
(lbs.)
Trash
$0.00 
$10.00 
283.58 
Green Waste
$0.00 
$10.00 
301.98 
Construction
$15.70 
$20.70 
827.96

Solid Waste COS Analysis
Policy Option #1B:  Limit “Free” Bulk Collection
26
• 20% of households 
request bulk 
collections annually
• Approximately 5% of 
customers request 
service more than 1x 
per year

Solid Waste COS Analysis
Policy Option:  Limit “Free” Bulk Collection
Equity Issues
• Contractor charges City bulk collection $30 per 
pickup
• 5% of customers request service >1x a year
• $1.20 of the monthly user fee used to subsidize 
service
Options-
• Offer one free pickup per year accommodates 
95% of households
•
Policy change would generate $217k and reduce 
monthly rate by 1.3% or $0.23
• Offer two free pickups per year accommodates 
98% of households
•
Policy change would generate $61k and reduce 
monthly rate by 0.4% or $0.07
27

Solid Waste COS Analysis
Option Recap
28
Fee policy options
• Remove alleyway service
• Charge for alleyway service
• Charge for use of RSWCC
• Charge for use of RSWCC with 
one free visit
• One “free” bulk collection
• Two “free” bulk collections
FY 2021/22 Baseline is at current rates, FY 2025/26 includes 6%, 5%, and 
5% increases needed in financial plan, as well as the revenue sources 
identified in first presentation, then this presentation

Monthly Residential Solid Waste Fee
Comparison Survey
*Based on FY 2021-22 rates for Chandler, with comparison cities shown at FY 2020-21 rates
**Alley users would have a rate $1.61 higher with this option putting them at $20.81 per month
+6%
+3.5%
+3%

Strategy/Timeline
Implementation Steps
Time Frame
Work Sessions with Mayor and Council
Nov 1 & Dec 9, 2021
Public  Outreach – Single Family, Multi Family, Landscape (HOAs, Golf 
Courses, Schools), Non-Residential & Industrial
Dec 2021-Jan 2022
Feedback to City Manager/Council on Results of Outreach
February 24, 2022
Adopt Notice of Intention to Increase Rates
March 24, 2022
Conduct Public Hearing for Water, Reclaimed Water, Wastewater, and Solid
Waste Rate Increases
May 12, 2022
Introduce Ordinance to Increase Water, Reclaimed Water, Wastewater, and 
Solid Waste Rates
May 12, 2022
Adopt Ordinance to Increase Water, Reclaimed Water, Wastewater, and 
Solid Waste Rates
May 26, 2022
Date COS Rates Become Effective 
July 1, 2022
30

Questions?
31