County garbage and recycling assessments to rise over three years to cover increasing expenses, with 17% jump planned in 2020 fiscal year

Staff continuing to work on switch to single-stream recycling, as City of Sarasota has done

This chart shows the proposed increases in garbage and recycling fees. Image courtesy Sarasota County

In August 2018, Scott Schroyer, then Sarasota County’s Public Utilities Department director, talked with the County Commission about increasing the annual assessment for recycling paid by homeowners in the unincorporated areas of the county.

He also discussed a plan to switch to single-stream recycling, instead of making residents separate paper goods from other materials. Yet, that change failed to happen on the timeline he indicated.

On June 19, during the second day of the commission’s annual, intensive budget workshops, Interim Public Utilities Director Mike Mylett offered an explanation about the subsequent inaction. And, based upon the current situation, instead of a 7% increase in homeowners’ annual recycling collection assessment, the jump will be 17% in the next fiscal year for garbage and recycling collections.

The new fiscal year will begin on Oct. 1.

The funds are needed to cover higher expenses for recycling, Mylett pointed out.

On July 10, the commission is scheduled to approve a formal Not to Exceed Notice reflecting the new, total yearly assessments. For a single-family homeowner, the expense will rise from $159.48 a year to $186.59 a year in the 2020 fiscal year.

Staff also proposes another overall increase of 17% in the 2021 fiscal year, which would put the assessment for garbage and recycling collections at $218.31. Then, projections call for the assessment to go up another 7% in the 2022 fiscal year, for a total of $233.59.

According to a chart Mylett showed the commissioners on June 19, the owner of a condominium would see his or her rate rise from $134.94 this fiscal year to $157.88 in the FY20 and then to $184.72 in FY21. With the final, proposed 7% increase in FY22, the assessment would climb to $197.65.

If only the 7% increase that Schroyer discussed in August 2018 were approved, Mylett pointed out, the Public Utilities Department would have insufficient reserve funds to cover the expanding gaps projected between revenue and expenses over the coming years.

A chart shows garbage and recycling rates in neighboring counties. The numbers on the left reference the number of times per week that collections are made. Image courtesy Sarasota County

The reason behind the request for the larger uptick in assessments? “The recycling market has changed dramatically over the last couple of years,” Mylett explained to the board.

In 2017, he noted, recycling was a revenue generator for the county. The average market value for the sales of materials, after they had been separated and processed, was $93 per ton, he said. The county was paying just $52 a ton for its work to put the materials on the market.

Then, he told the board, beginning in late 2017 and continuing into this year, the county’s expenses for recycling began rising. This year, Mylett pointed out, the county is paying $177.28 per ton for recycling, but it can get only $58 per ton from materials it sells. “Overseas markets are no longer accepting recyclables in the quantities that historically have been provided.”

“If we tried to absorb the total recycling expenses [with just the 7% increase discussed in August 2018],” Mylett added, “it’s unsustainable. We would be eating into our reserves …”

By implementing rate assessment adjustments over three years, he said, the Public Utilities Department will be able to start recovering its reserve fund balance in the 2022 fiscal year.

A graphic Mylett showed the board estimated the fund balance would recover to about $2.7 million in the 2022 fiscal year and then climb to $5.9 million in FY24.

The single-stream switch

A graphic shows the impact on the Public Utilities Department budget with the new assessments. Image courtesy Sarasota County

Staff did issue a Request for Proposals for single-stream recycling, Mylett continued, and it received two bids. In August, he said, he expects to be back before the board to seek approval of a contract with a company called Single Stream Recyclers LLC of Sarasota, which will call for the county to pay $125 per ton. “That is almost a 150% increase over historically what we have paid for recycling.”

Provided the commission approves that contract, he said, new 65-gallon recycling carts will be rolled out to residential customers in the second quarter of the 2020 fiscal year, which would be in early 2020.

Commissioner Christian Ziegler, who pointed out that he lives in the city of Sarasota, noted that since that municipality switched to single-stream recycling earlier this year, the amount of goods people are putting out for collection has increased dramatically. He asked Mylett whether county staff has factored in the expectation that the same situation will occur with single-stream recycling in the unincorporated parts of the county.

“We have, Commissioner,” Mylett replied.

The original projection was a 25% increase, Mylett added. Then county staff consulted with City of Sarasota staff, he noted. “The city saw almost a 60% increase in volume …” Therefore, Mylett said, the latest model calls for a jump of about 50% for the county.

“I think you’re going to see it skyrocket in the county,” Ziegler responded.

This is how the Public Utilities budget would be affected if the County Commission approved only a 7% increase in assessments. Image courtesy Sarasota County

In terms of handling the proposed county rate increases, Mylett continued, staff plans to come back to the commission to seek approval of the necessary rate adjustments in the 2021 and 2022 fiscal years.

“I’m very happy to see your report here done publicly,” Commissioner Nancy Detert told Mylett. “This particular staff member is doing what we asked,” she added: “being open, being transparent, warts and all.”

To Mylett, she said, “Give us prep time if you see red flags in the future. … It’s up to this side of the table to do our job,” so residents continue to receive the services to which they have become accustomed.

“We will continue to evaluate opportunities to minimize cost increases,” Mylett responded, “and still maintain a viable enterprise.”

He then noted a chart staff had created, showing expenses for garbage and recycling services in neighboring counties. “Even with our increases,” Mylett said, “we’re still right in the middle of where our neighboring communities will be.”
“It is what it is,” Chair Charles Hines said of the need for higher assessments.