Trash talk about rate increases
Mono County Board of Supervisors reviews fees
On Tuesday, Dec. 17, the Mono County Board of Supervisors met for the final meeting of its calendar year.
Mammoth Disposal and Bishop Waste Plant General Manager Rick Vahl, along with Mono County Solid Waste Superintendent Tony Dublino, addressed the Board in an attempt to garner support for raising the floor rate established by local purveyors of waste disposal.
A “floor rate” is simply a baseline budgetary measure (like the minimum wage) implemented to protect small local businesses from predatory rates that may be implemented by larger, more resource-rich companies. The floor rate is the minimum-maximum amount that a company may charge in order for these local waste disposal businesses to stay competitive and profitable.
Just as with most other businesses, there are costs associated with rising inflation. The two determining factors in rising inflation are the Consumer Price Index (CPI) and the Producer Price Index (PPI). The CPI and PPI are both reported on by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor.
The BLS collects, analyzes and evaluates various essential economic information to support public and private business-related decision making.
On average over the last year the CPI has increased 1.2% and 1.7% in relation to waste disposal here in the United States. In light of this, Superintendent Dublino proposed franchise amendments to the contracts that Mono County has with D&S and Mammoth Disposal/Bishop Waste that would increase the floor rates.
Board Member Larry Johnston asked Superintendent Dublino why an increase was needed if PPI costs were down. According to the BLS, the PPI program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services.
However, other costs are associated with the operation of running a waste disposal company, and those costs are attributed to rising CPI costs as well as inflation. “The last CPI increase that we experienced was back in April of 2011,” said Dublino. At that time, waste disposal companies misunderstood the Board and raised their rates without the Board’s approval. This was such a benign event that the rates were eventually retroactively reinstated by the Board anyway.
Waste disposal in Mono County is predicted to see a .29 cent rate increase per household, per month in 2014. This may appear nominal and non-consequential to the average layperson, however, considering the number of households being serviced over the course of a year, the number in question gains prominence.
Dublino approached the Board with a sense of urgency and was promptly met with opposition.
Supervisor Tim Fesko suggested that perhaps this issue should have been brought forth to the Board earlier in the year.
“This proposal has been queued up in our process for awhile,” Dublino told the Sheet, “We’ve been waiting on the Board of Supervisors to add our proposal to their agenda.”
Small businesses often operate on such a small profit margin that not allowing for this rate increase and failing to maintain a solid baseline could negatively affect one of the few year round, full time positions available in Mono County. As Supervisor Johnston put it, “the floor rate tends to be a defacto rate and is not arbitrary at all.”
The difference can be as monumental as whether or not people get bonuses or raises.
Supervisor Fred Stump wondered if “The County might be blamed for these rate increases?” Supervisor Fesko asserted that the rate increase seemed arbitrary to him and raised concerns for setting prices for businesses. Fesko argued, “The reality is a 1.7% increase in the floor will not create a predatory situation.” Fesko went on to state that he understood the need for a floor rate, yet he simply couldn’t support setting a floor rate at this time.
