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HomeMy WebLinkAboutItem 10c - Public Hearing for Solid Waste Service RatesPublic Hearing to Adopt Solid Waste Service Rates June15, 2021 Page 1 of 5 DATE: June 15, 2021 TO: Honorable Mayor and City Council FROM: Tom Tait, Public Works Services Director By: Vanessa Hevener, Environmental Services Manager SUBJECT: RESOLUTION NO. 7364 SETTING SERVICE RATES FOR THE COLLECTION OF RESIDENTIAL AND MULTI-FAMILY SOLID WASTE AND RECYCLABLES PURSUANT TO SECTION 5120.7 OF THE ARCADIA MUNICIPAL CODE FOR FISCAL YEARS 2021-22 THROUGH 2025-26 Recommendation: Adopt SUMMARY On April 6, 2021, the City Council directed the Public Works Services Department (“PWSD”) to follow Proposition 218 (“Prop 218”) balloting procedures to establish solid waste service rates and conduct a public hearing. Proposition 218 requires the mailing of a written notice detailing the proposed rate adjustment to all property owners and tenants who are responsible to pay the refuse bill. The City is proposing to adjust the solid waste service rates for five fiscal years. The proposed rates for FY 2021-22 include a step rate increase to account for the mandated organics waste recycling program going into effect mid-year on January 1, 2022, for single-family customers. Starting July 1, 2021, the proposed monthly residential rates for standard service (96-gallon trash, 64-gallon green waste and 64-gallon recycling carts) will be $30.91 and will increase by $2.66 on January 1, 2022. Similarly, the proposed multi-family rates for a 3-yard split bin (trash and recycling) dismount service will be $179.23 per month and will increase to $200.69 with the addition of an organics cart starting on January 1, 2022. Even with the proposed rate increase, excluding the newly-added Franchise Fee, Arcadia’s rates will remain in the lowest 1/3 as compared to other cities in San Gabriel Valley with similar services. Public Hearing to Adopt Solid Waste Service Rates June15, 2021 Page 2 of 5 It is recommended that the City Council conduct a public hearing and, if there is no majority protest, adopt Resolution No. 7364 authorizing the proposed rate adjustments for Fiscal Years 2021-22 through 2025-26. BACKGROUND Waste Management (“WM”) has been the City’s exclusive residential and multi-family refuse and recycling hauler since 1999 and has consistently provided excellent service. The Residential Refuse and Recycling Agreement (“Agreement”) was executed in March 2009 and included a seven-year term, which expired on June 30, 2016. In October 2013, the City Council executed the First Amendment to the Agreement for an additional five years through June 2021. During the past year, PWSD has been negotiating with WM on extending the Agreement. Subsequently, on April 6, 2021, the City Council conceptually approved the Second Amendment to the Agreement with Waste Management Inc. at a study session of the City Council. The new agreement would include the following:  Establishment of a Franchise Fee – a fee that the City can charge to the franchisee in exchange for the privilege of receiving the franchise – of 3%, which will be added to the new proposed rates;  New and/or enhanced services such as a community mulch giveaway event; two community document shredding events; bins for tree trimming and miscellaneous debris removal at sites designated by the City; trash and recycling collection for five (5) non-City events;  Ten-year term expiring on June 30, 2031;  Compliance with new laws and regulations (AB 341, AB 1826, and SB 1383 ) requiring cities and counties, including the City of Arcadia, to develop and implement new stringent organics recycling programs impacting all solid waste generators. DISCUSSION The proposed rates include a step rate increase to account for the mandated organics waste recycling program going into effect mid-year on January 1, 2022, for single-family customers. The chart below shows the proposed monthly residential rates of $30.91 for the standard service of 96-gallon trash, 64-gallon green waste, and 64-gallon recycling carts starting July 1, 2021, that will increase by $2.66 on January 1, 2022, when the mandated organics regulations take effect. In addition, the proposed multi-family rates for a 3-yard split bin (trash and recycling) dismount service will be set at $179.23 per month starting July 1, 2021, and will increase to $200.69 with the addition of an organics cart starting on January 1, 2022. Public Hearing to Adopt Solid Waste Service Rates June15, 2021 Page 3 of 5 Current Rate Effective Date Trash/ Recycling Green Waste/ Organics (Jan. 2022) Total Single- Family $26.03 (Standard) July 1, 2021 to December 31, 2021 $23.14 $7.77 $30.91 January 1, 2022 to June 30, 2022 $23.14 $10.43 $33.57 Multi-Family $142.67 (1-3yd Trash only Dismount Service) July 1, 2021 to December 31, 2021 $179.23 $0.00 $179.23 January 1, 2022 to June 30, 2022 $179.23 $21.46 $200.69 A new rate Adjustment Formula will be used to determine the annual percentage rate adjustment required starting in Fiscal Year 2022-23. The new Rate Adjustment Methodology Formula includes only two indices: a Disposal/Diversion Component and a Service Component. In previous versions of the Agreement, three separate indices were used. The new methodology is easier for all parties and interested persons to understand and more accurately reflects cost parameters to the waste hauler. The Disposal/Diversion Component consists of costs for tipping fees charged at landfills for trash, tipping fees charged at composting facilities for green waste/food waste, and recycling fees at processing/recycling facilities. Under the new Rate Adjustment Methodology, the Disposal/Diversion Component is 40% of the weight in the calculation of the new rate. The Service Component is based on monthly percent changes in the Consumer Price Index (“CPI”) for Los Angeles-Long Beach-Anaheim between the current year and the prior year, and is given a 60% weight in the calculation of the overall adjustment of the new rate. The City of Arcadia currently has one of the lowest residential refuse rates in the San Gabriel Valley because the City was able to retain a provision in the Agreement which states that Arcadia’s refuse rates cannot exceed the lowest 1/3 of all cities in the San Gabriel Valley with similar services excluding the 3% Franchise Fee – a rarity in solid waste contracts. Exhibit “2” highlights the refuse rate survey conducted in May 2021 for cities with similar services in the San Gabriel Valley. The survey shows that Arcadia’s rates will remain in the lowest 1/3, excluding the 3% Franchise Fee, as compared to other cities in San Gabriel Valley and this is especially true given that many of the other cities have not yet increased their rates to include the costs associated with the organics recycling regulations. Public Hearing to Adopt Solid Waste Service Rates June15, 2021 Page 4 of 5 Prop 218 Notice and Implementation of New Rates On April 28, 2021, PWSD mailed approximately 19,180 notices to all residential and multi- family property owners and/or customers informing them of the proposed refuse rate adjustment, date of the public hearing, and their right to file a written protest. In addition, a notice of the Public Hearing was published in the Arcadia Weekly on May 31, 2021, and June 7, 2021. To facilitate submittal of written protests, the City has set up a drop-box outside of the City Manager/City Clerk’s Office for property owners or customers of record. Protests placed in the drop-box will be accepted until the close of the Public Hearing, at which point the City will close the drop-box and tabulate all valid protests to determine whether a majority exists. At the time of writing, the City has received four (4) valid written protests (and one e-mail submission, which will not be counted as a valid written protest) opposing the rate increase (See Exhibit “3” copies of all written protest letters received). In accordance with Prop 218, public comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest. All written protests against the rate increase are to be considered during the Public Hearing and, following the closure of the Public Hearing, if there is no majority protest, it is recommended that the City Council adopt the proposed solid waste rate adjustment schedule for Fiscal Years 2021-22 through 2025-26. ENVIRONMENTAL IMPACT The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, as it can be determined with certainty that it will have no negative impact on the environment. Thus, this matter is exempt under CEQA. FISCAL IMPACT Residential refuse and recycling collection service rates are considered a fee-for-service that is paid directly to the contractor by the residential customer. The proposed rates include a 3% Franchise Fee, which is expected to generate $228,000 annually to fund activities paid out of the General Fund. This amount was not included in the original budget documents delivered to the City Council in May. RECOMMENDATION It is recommended that the City Council determine that this item is exempt under the California Environmental Quality Act (“CEQA”); and that the City Council conduct a public hearing, and if there is no majority protest, adopt Resolution No. 7364 setting service Public Hearing to Adopt Solid Waste Service Rates June15, 2021 Page 5 of 5 rates for the collection of residential refuse and recyclables pursuant to Section 5120.7 of the Arcadia Municipal Code, for Fiscal Year 2021-22 and annual rate adjustments for Fiscal Years 2022-23 through 2025-26 with Waste Management, Inc. Attachments: Resolution No. 7364 Exhibit “2” – Refuse Rate Survey Exhibit “3” – Protest Letters  $0.00$5.00$10.00$15.00$20.00$25.00$30.00$35.00$40.00$45.00Exhibit 2 ‐Residential Refuse Rate SurveyMay 2021 (Arcadia rates exclude 3% Franchise Free)