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GreenWaste says it needs higher rates because people are producing less garbage

The Portola Valley Town Council approved a 5.58 percent rate increase for recycled materials and garbage collection in Portola Valley starting July 1. The increase is identical to that approved earlier in June by the Woodside council.

GreenWaste Recovery Inc. out of San Jose serves both communities with weekly collection of garbage, recyclable materials and compostable materials. In presentations to the councils, company officials noted that customers are producing less garbage -- the key to the current rate structure. In both cases, GreenWaste asked for 8.58 percent increase and was refused.

The rate structure is old, said Emily Hanson, GreenWaste's director of business development and communications. It's a vestige of the days when people needed incentives to recycle, and collection companies responded by making recycling and yard waste collection free. "As the industry has evolved, we still have a cost based on garbage volume," she told the Portola Valley council. "We're trying to catch-up the rate model to match the processing system."

Because rates are based on the garbage component, customers can put out any number of carts of recyclable and compostable materials and it does not affect the fee, Ms. Hanson said. Frequent shoppers at Amazon.com, a generator of packaging waste, are being subsidized, Mayor Ann Wengert noted.

GreenWaste's expenses have also risen faster than the consumer price index. According to statistics provided by the company, health insurance premiums have gone up 39 percent and diesel fuel up 54 percent over the last five years. (The U.S. Energy Information Administration shows California diesel fuel prices rising 48.5 percent since 2009.)

Costs for transporting compostable materials are up 14 percent, and while composting effectively recycles materials that would otherwise rot in landfills, the company is lucky if it can give it away, Ms. Hanson said.

Meanwhile, revenues from selling recyclables, a volatile market that depends on the state of the Chinese economy, dropped 13.5 percent between 2011 and 2013, she said.

What's next

One goal for the new rate structure, Ms. Hanson said, is an innovative, sustainable volume-based fee, or "Pay as you throw." Another is using the methane from the composting process to fuel the trucks -- when the current fleet is replaced and if trucks of the right size are equipped with natural-gas engines, said Frank Weigel, the chief operating officer.

When might a new rate structure be ready, Mayor Ann Wengert wanted to know. Perhaps three months, Ms. Hanson said. Worst case would be January 2015, she added. Collecting waste material is "an incredibly complex business," she said at one point.

Councilwoman Maryann Moise Derwin wondered why the town held back on the other 3 percent. To give GreenWaste an incentive to figure out a better rate structure, Town Manager Nick Pegueros said.

"We certainly don't, from our perspective, want to be seeing you losing money," Ms. Wengert said.

Comments

Posted by Jim, a resident of Portola Valley: other
on Jul 3, 2014 at 10:34 am

So, if people are recycling more, why doesn't that offset the garbage rate? Sounds like BS to me. More recycling = more revenue for the garbage company . . . but that doesn't count toward anything????? Please explain.


Posted by Bill, a resident of another community
on Jul 3, 2014 at 5:28 pm

Jim,

you're assuming that recycling revenue is substantial enough to offset the loss of garbage collection revenue. If people are going from 1 32 gallon can to 1 mini-can service, for example, that's a difference of over $10 per month for that customer. If you think that most customers are setting out recyclables that will fetch an additional $10 of replacement revenue per month, I suggest you visit one of the places where you can trade recyclables for cold, hard cash and see what $10 looks like :-)

That was the smallest revenue drop I could spot with a casual glance at the rate chart. Most service reductions reduced revenue substantially more. If people are putting out less garbage and adjusting their service to reflect it, I could see Greenwaste feeling a bit of a pinch.


Posted by lame, a resident of Portola Valley: other
on Jul 4, 2014 at 2:32 pm

That is a really lame article title. The garbage company has fixed costs, like driving the garbage trucks around every week, regardless of how much garbage they pick up. They have every right to adjust their rates to cover their actual costs.


Posted by Ugh, a resident of another community
on Jul 6, 2014 at 8:04 am

Proof positive there is no pleasing these people...produce too much waste, prices go up, do not produce enough, prices go up...and good luck dreaming up an arbitrary "just right" amount. They do the same with water use.

I am guessing those in Woodside and PV can afford this, but the same thing happens all over where those who really can't afford it have to pay more. If you have to raise prices due to operating costs, say so...don't blame the customer for being better at doing what you want...producing less waste. Sigh.


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