City keeps garbage rates even after bringing billing back in-house

The City of Whitefish is keeping garbage rates flat even after taking over billing from its contractor for garbage collection services.

City Council last week approved the garbage rate of $10.78 for a standard weekly residential pick up.

City Manager Dana Smith said the rates have been structured to cover the cost of service provided by Republic Services and for the cost for the city to administer billing and provide customer service.

“We don't want our customers' rates to be affected at this point by the transition,” Smith said. “We will complete a service analysis later to look at our costs and make sure the charge reflects our costs.”

Smith noted that the city has reserve funds it can utilize if costs are higher than the garbage fee.

The residential rate of $10.78 includes $9.50 for collection and an administrative fee of $1.28. This fee is lower than the city’s previous administrative fee of $1.93 in 2015 before it handed over garbage billing to its contractor.

City Council in January approved a new five-year contract with Republic Services for collection of garbage, but chose to move the responsibility of billing for garbage services to the city beginning next month.

The monthly commercial rate for one cart is $17.14 or for a 300-gallon container the rate is $36.02, both for weekly pickup. Both of these costs include a $4.50 administrative cost.

In 2015, the city charged a commercial administration fee of $5.50 per business. Republic Services charged an administration fee for commercial service of $6.20.

It’s anticipated that some commercial customers may see a decrease in their monthly garbage rates, Smith notes.

The administration fees are projected to generate about $80,000 each year to pay for billing and customer service. Based upon prior years, a typical year would require about $100,000 in costs including personnel expenses, software, mailing costs and supplies.

Smith said while there is about a $30,000 shortfall anticipated a cost of service analysis will need to be completed to ensure that rates are set at the appropriate amount based upon changes.

“With cash reserves of approximately $47,000 in the solid waste fund, the city is prepared to manage this transition at the proposed rates,” Smith said.

The city anticipates completing a detailed cost of service analysis for garbage billing prior to the annual rate review by City Council in September.