For City Council Meeting [June 11, 2019]
TO: Honorable Mayor and City Council
APPROVAL: Sean Grayson, Interim City Administrator
FROM: Robert G. Eisenbeisz, P.E., Public Works Director/City Engineer
Title
Request City Council to Conduct a Public Hearing and Adopt a Resolution No. 7491 Approving the Municipal Solid Waste Collection, Recycling and Disposal Service Rates for Fiscal Years 2019/2020 through 2021/2022.
(ACTION)
Body
BACKGROUND:
In April 1996, Council approved a franchise agreement for trash collection, a curbside mixed recyclables program to meet the mandates of AB 939, and unlimited green waste removal. Resolution No. 4217 established the base residential and commercial disposal rates. The franchise agreement allows the franchise hauler to request rate adjustments based on changes in the Consumer Price Index (CPI) and changes in operating costs, such as landfill tipping fees.
ANALYSIS/DISCUSSION:
On July 8, 2014, the City Council conducted a Public Hearing in accordance with Proposition 218 procedures and adopted the Five Year Municipal Solid Waste Collection, Recycling and Disposal Rates for Fiscal Years 2014/2015 through 2018/2019. These rates incorporated a new Commercial Recycling Program and implemented the Pavement Maintenance Fee (PMF). The Proposition 218 Five Year Approved Rates end this year.
Organic Material Recycling (Commercial Accounts) Update Summary
On October 2014 Governor Brown signed AB 1826 Chesbro (Chapter 727, Statutes of 2014) <http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1826&search_keywords>, which required mandatory commercial organics recycling throughout the State. The act defines organic waste as food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food-soiled paper waste mixed in with food waste. Starting April 1, 2016, this act required businesses that generate more than 8 cubic yards of organic waste per week to arrange for recycling services for their organic waste. On January 1, 2017, the state lowered the threshold to include businesses that generate 4 cubic yards of organic waste per week. Starting January 1, 2019, the new threshold included all businesses that generate 4 cubic yards of solid waste per week.
Why Require Organics Recycling?
One strategy to achieve California's aggressive greenhouse gas (GHG) emission reduction goals and solid waste diversion goals is to implement mandatory organic material recycling. California disposes approximately 30 million tons of waste in landfills each year, of which more than 30 percent is divertible for compost or mulch. Organic waste such as green and food materials are recyclable through composting and mulching, and through anaerobic digestion, which can produce renewable energy and fuel. Reducing the amount of organic materials sent to landfills and increasing the production of compost and mulch are part of the AB 32 (California Global Warming Solutions Act of 2006) Scoping Plan <http://www.arb.ca.gov/cc/scopingplan/scopingplan.htm>. Reducing organic wastes sent to landfills is also necessary to meet California's 75 Percent Initiative, which sets an ambitious goal of 75% recycling, composting, or source reduction of solid waste by 2020. The State implemented a new compliance measurement metric using pounds per person per day, or (PPD). Based on this metric, Rialto’s most recent diversion PPD is 3.5 with a target of 5.7 PPD. Rialto complies with the current PPD requirements.
Burrtec Waste (Burrtec) has developed commercial organic processing programs that include composting and anaerobic digestion to comply with AB 1826. The proposed commercial rates incorporate food waste diversion programs including modified watertight trucks and containers, education and outreach, and program administration. AB 1826 compliance efforts also include promotion of best use alternatives such as food rescue programs. The City updated Cal Recycle staff on Rialto’s progress with diverting food waste, and Cal Recycle acknowledged the City’s organic waste program demonstrates a good faith effort towards compliance. The commercial rates include the food waste program and the recycling program.
Burrtec serves approximately 1,200 commercial and multi-family customers. Utilizing the state approved service based methodology, Burrtec estimates that there are 196 customers (130 commercial and 66 multi-family) affected by the organics legislation at the 4 cubic yard threshold. The estimated 4 cubic yard organics threshold customer count represents 16% of the total. The 4 cubic yard threshold became effective on January 1, 2017.
The equalized food waste rate approach encourages participation to all commercial customers at a reasonable rate. It is similar to the commercial recycling program where all customers assume the cost for program operations regardless of the obligation to subscribe. Ultimately, it offers an affordable program that will help the City comply with the law while reducing organic disposal at the landfill and reducing greenhouse gas emissions.
Multi-Family Bulky Item Collection Program
This year’s review also includes an update to the multi-family bulky item collection program. Last year, the City approved a multi-family (MF) bulky item collection program that provided 52 hours per week of MF bulky item collections based on a MF bulky item collection route, Burrtec driver observations and customer call-ins. Staff anticipated that this program would greatly reduce illegal dumping that is prevalent near multi-family locations requiring City forces to arrange pick up on a regular basis. Based on the 6 month period of July through December 2018, 372.37 tons were collected. December program results were 82.29 tons.
Prior to this program, multi-family establishments were to call Burrtec to schedule and pay for bulky item collections. Burrtec records showed that a small percentage of multi-family locations actually requested these services. This data leads us to believe that the majority of the illegal dumping in the surrounding allies, being picked up by City Staff, could be attributed to the Multi-Family complexes not requesting the Bulky Item Pick-Ups from Burrtec.
Pavement Maintenance Fee
The proposed rates do not include any increase to the pavement maintenance fee. At the current rates, the estimated revenue is $1,550,000 for the 2019/2020 fiscal year. The City will use these funds for the annual residential street slurry seal program.
Table 1 shows the Pavement Maintenance Fee Revenue received over the last five years since implementation:
Table 2 lists the road maintenance projects that used pavement maintenance fees as a major source of funding. Attachment 1 provides a detailed list of the streets funded with the pavement maintenance fee.
Residential Rate Options
Table 3 shows the current residential rates (including the tax roll billing discount rates) with the 2019/2020 rate adjustments. The adjustment includes no change to any City fees including the Pavement Maintenance Fee for 2019/2020. Attachment 2 provides the Prop 218 Notice and the rate summary for 2019/2020, 2020/2021 and 2021/2022.
Commercial Rate Options
Table 4 below shows the most common Commercial Service rates with the various 2019/2020 rate adjustments. The adjustments include no change to any City fees including the Pavement Maintenance Fee for 2019/2020.
Economic Development Committee Review
The Economic Development Committee (EDC) received a presentation on the proposed rates at its March 27, 2019, meeting, and supported the recommendation to increase municipal solid waste collection, recycling and disposal service rates for Fiscal Years 2019/2020, 2020/2021 and 2021/2022.
Utility Commission Review
At its April 2, 2019, meeting, the Utilities Commission received a presentation on the proposed rates, and recommended that the City Council approve the proposed increase.
ENVIRONMENTAL IMPACT:
In accordance with Section 15273 of the California Code of Regulations, CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies which the public agency finds are for the purpose of meeting operating expenses.
GENERAL PLAN CONSISTENCY:
Approval of this action complies with the City of Rialto General Plan Goals and Policies:
Policy 3-10.1: Encourage additional recycling in all sectors of the community.
Policy 3-10.4: Continue to educate the community regarding the benefits of solid waste diversion and recycling, and maintain programs that make it easy for all residents and businesses to work toward City waste reduction objectives.
FINANCIAL IMPACT:
Operating Budget Impact
Refuse revenue is collected by Burrtec Waste Industries. The City derives revenues from the adopted rates including Household Hazardous Waste (HHW) fees, and AB 939 revenues, which are used to fund the City’s Household Hazardous Waste programs and for public education on recycling and protection of the environment.
Revenues as presented with no changes in the fee amounts are estimated as follows:
• AB 939 funds are estimated to be $356,134.66/year and will be credited to Account No. 212-400-7150-7544.
• HHW funds are estimated to be $356,134.66/year and will be credited to Account No. 212-400-7150-7542.
• Franchise fees are estimated to be $1,365,171.10/year and will be credited to Account No. 010-400-0001-7116.
• With the current PMF rates, annual PMF revenues are anticipated to remain fixed at $1,550,000 for the 2019/2020 fiscal year.
Capital Improvement Budget Impact:
Annual PMF revenues of $1,550,000 are estimated for the 2019/2020 fiscal year. These funds support the residential street slurry seal program, Project number 200805 proposed for FY2020.
RECOMMENDATION:
Staff recommends that City Council:
• Conduct the Public Hearing and receive public testimony;
• Consider protests received and determine if a majority protest has occurred pursuant to California Government Code Section 53755 and Section 6 of Article 13D of the California Constitution;
• On the basis that a majority protest has not occurred, adopt a Resolution Approving Municipal Solid Waste Collection, Recycling and Disposal Service Rates for fiscal years 2019/2020 through 2021/2022;
• and increase revenue budget as indicated by the resolution.