In a $33.5 million enterprise fund (proposed expenditure budget for City Fiscal Year 2019/20), the are numerous projected changes to revenues and expenditures. That said, the three main “drivers” of the proposed rate increases are:
- Contract Costs: In 2018, the Napa City Council approved a 14-year extension of the collection and processing agreement with Napa Recycling & Waste Services, LLC (NRWS). This contract extension provided for new (or refurbished) refuse and recycling vehicles, new collection and processing equipment and increased NRWS labor costs. The net increased cost is approximately $2.1M per year with additional pre-known (“fixed”) increases of $561K from City Fiscal Year (FY) 2019/20 to FY2020/21 and $334K from FY2020/21 to FY2021/22.
- Declining Material Sales: With China’s “National Sword Policy” among other factors, revenue from the sales of recyclable materials has declined drastically in recent years. As compared to City FY2011/12, the projected average price per ton for FY2018/19 has declined by 55% from $121 per ton to $54 per ton. Unfortunately, this ongoing revenue loss of $1.2-$1.4M per year is expected to continue for the foreseeable future.
- Capital Improvements: In 2016, the City of Napa issued $12.5M in solid waste revenue bonds for necessary facility/system capital improvements. Approximately $8M of bond proceeds went towards a new “covered” composting system, while $2M will be used for an upgraded stormwater management and treatment system and the remaining $2.5M of bond funds addressing legally-required covers (roofs) for processing and storage areas to comply with facility and stormwater discharge permits. The cost of annual debt service for the bond is just under $900K/year.