Full Text
Date: To: From: Subject: December 19, 2011 El Cerrito City Council Garth Schultz, Environmental Analyst Melanie Mintz, Environmental Services Manager Karen Pinkos, Assistant City Manager AGENDA BILL Agenda Item No. 6 Proposed Integrated Waste Management Fees and East Bay Sanitary Commercial & Extra Residential Green Waste Collection & Processing Rates Effective January 1, 2012 ACTIONS REQUESTED 1. Conduct a public hearing and upon conclusion adopt a Resolution fixing and setting rates for the Integrated Waste Management (IWM) fee, effective January 1, 2012. 2. Conduct a public hearing and upon conclusion adopt a Resolution setting maximum allowable commercial green waste and extra residential green waste collection and disposal (processing) rates, effective January 1, 2012. BACKGROUND & ANALYSIS Integrated Waste Management Fee In 1990 the City of El Cerrito established the Integrated Waste Management (IWM) fee to cover Integrated Waste Services including the City-run operations of the El Cerrito Recycling Center, curbside collection of recyclable materials, and other waste collection, reduction, recycling and environmental programs operated by the Environmental Services Division (ESD). The IWM fee is collected by East Bay Sanitary Company (EBS) as part of the garbage bills, and are then transferred in whole to the City of El Cerrito's Integrated Waste Services fund. Over the past several years the City Council has considered and adopted several increases to the IWM fee. Prior to 2006 the IWM fee had not been increased in 13 years. As part of the FY 2011-12 Operating Budget the City Council reviewed and approved a 1 0-year Financial Plan (Plan) for the IWM fund that includes a projected 5% increase in IWM fee revenue for FY 11-12. Staff is proposing to implement the projected increase, effective January 1, 2012. Though the IWM fund is currently on track to out-perform budget assumptions, uncertainties about the economy, timing for completion of the new Recycling and Environmental Resource Center, and the fact that the adopted 1 0-year Plan assumed a planned revenue deficit of $182,568 in FY 11-12, staff is recommending that the Council proceed with the 5% IWM fee increase. ---PAGE BREAK--- Agenda Item No. 6 The 1 0-year Plan balances over- or under- collection of revenues relative to expenses. If the IWM fund does out perform budget assumptions, it will decrease the revenue deficit amount in the current fiscal year, resulting in more favorable revenue-to-expense ratios in the 10-year Plan. Any such changes will be calculated and projected with annual review of the 10-year Plan during the City's annual budget process. State Requirements for Commercial and Multifamily Recycling in 2012 Unlike past years, wherein IWM fee increases have been applied evenly across all rate classes, staff is proposing to achieve the 5% IWM revenue increase via proportionally smaller increases to residential rates (e.g. 20-gallon, 35-gallon, and 64-gallon garbage containers) and higher increases to commercial bulk refuse rates (e.g. 1 and 2 cubic yard containers). This change in approach for 2012 is attributable to anticipated increases in the amount of commercial recycling that will need to be collected in 2012, due to State passage of AB 341 (Chesbro) which established requirements for minimum commercial recycling participation (including multi-family dwellings greater than 5 units). Per the requirements of the legislation, which is being implemented by CalRecycle, businesses (including multi-family dwellings) that generate more than four cubic yards of commercial solid waste per week will need to subscribe to recycling service starting July 1, 2012. Initial analysis by ESD staff shows that there are approximately 80 such businesses in El Cerrito, and approximately 3 7% of those businesses that would be subject to the requirements of AB 341 do not currently participate in the City's recycling program. ESD staff is working to refine these figures and determine how it will accommodate an increase in commercial recycling in 2012. Staff is also planning to provide direct outreach and support to all El Cerrito commercial entities to ensure that they (and the City) will achieve early compliance with the requirements of AB 341. While staff does not anticipate any changes to operational expenses due to an increased emphasis on commercial recycling collection, outreach, and support, the proportion of staff work that is dedicated to commercial activities compared to residential activities will increase. Furthermore, commercial recycling activities require a higher level of staffing, e.g. more than once per week pick up and a driver plus a helper; this higher level of staffing isn't fully reflected in the current pricing structure. The proposed 2012 IWM fees reflect this change in work-load priorities, while also providing a price signal that will support business interests to reduce, reuse, recycle, or compost their waste. As proposed, the 2012 IWM fees will increase the percentage of commercial IWM fee revenues relative to total IWM fee revenues from 29.6% in 2011 to 31.7o/o in 2012. East Bay Sanitary Rate Review and Commercial Green Waste Rates In contrast to the IWM fee (which the City sets and charges and EBS collects), EBS sets and charges the rates for garbage and green waste collection, and the City authorizes the maximum rates that EBS may charge, pursuant to City of El Cerrito Municipal Code Chapter 8.12. Per agreement between the City and EBS made in 2011, the City is currently conducting a full review of the Company's operations, expenses, revenues and rates. This review is still underway, with anticipated completion in early 2012. As a result of negotiations arising out of the review process, no changes to EBS' s regular garbage and green waste collection rates are currently being proposed. Staff will Page 2 ---PAGE BREAK--- Agenda Item No. 6 schedule a presentation of the results of the rate review process and negotiations once the process has been completed. It is anticipated that a rate increase, if necessary, will be approximately 1% on EBS' s garbage and green waste collection rates. Per the City's request, EBS has proposed providing daily collection of green waste (including yard debris, food scraps, and other accepted compostable items) from commercial solid waste subscribers, including all businesses (including private schools) and multifamily dwellings over four units. Currently, multiple weekly pickups of green waste are not available to commercial subscribers. This service will be available to businesses who wish to subscribe to this service, with daily pickup available Monday through Friday, starting in January 2012. The green waste material will be collected utilizing existing green waste collection capacity. The rate EBS has proposed includes collection and disposal of acceptable green waste, and is significantly less costly than equivalent garbage collection and disposal rates. Comparison of Garbage Cart Service and Commercial Green Waste Rates 35-gallon cart (per once weekly pickup) 64-gallon cart (per once weekly pickup) Garbage (includes IWM and all processing costs) $38.10 74.57 Commercial Green Waste (includes green waste processing only) $25.22 48.80 These same rates will also be extended to residential solid waste subscribers (single family and multifamily four units or fewer) who request additional green waste containers, in addition to the single 64 gallon container currently provided to all such subscribers in the existing rates. Additional green waste collection carts for residential subscribers will include once weekly pickup of materials. It is anticipated that both residential and commercial subscribers who participate in green waste collection may be able to reduce the size of their garbage containers. Change to Environmental Services Division Staffing Model In conjunction with the proposed IWM fee rate adjustment, ESD staff is requesting City Council authorization to reinstate a Forklift Operator position that was previously included in the Division's position listing in the FY 2008-09 Operating Budget, not filled, and then subsequently removed from the position listing in FY 201 0-11. During the time. that the Forklift Operator position was included in the Division's position listing, it was intentionally left unfilled because there was uncertainty about what the labor need of the Division would be leading up to, during, and following the construction of the new Recycling and Environmental Resource Center. Since 2009, ESD has utilized temporary labor services to provide needed assistance on commercial recycling routes and in the drop-off recycling operation at the Recycling Center. In preparation for establishing new and improved drop-off recycling collection operations and programs at the new Center, ESD staff has developed several changes to its staffing model. These include the reinstatement of the Forklift Operator position, Page 3 ---PAGE BREAK--- Agenda Item No. 6 filling a vacant entry level Recycling Maintenance Worker position in lieu of filling the recently vacated Lead Worker position, reducing part-time operational labor, and increasing part time customer service labor, all resulting in greater emphasis on customer service and material quality. The new staffing model also includes a change recently implemented by ESD operational staff from a 4 day per week (10 hour shifts) to a 5 day per week (8 hour shifts) schedule. This change improves the Division's ability to operate recycling collection routes and drop-off recycling programs and enables better management of all operators without the need for a Lead Worker position. Overall, the proposed action to add one full-time position ·to the Division's head count (an increase from 9 to 1 0 FTEs) will have no net budget impact in the current fiscal year and will enable the Division to dedicate one full time customer service shift in the public drop-off area at the new Recycling and Environmental Resources Center, seven days a week. Increased on-site customer service presence in the recycling drop-off area is critical to providing programs that collect hard-to-recycle materials such as carpeting, paint, electronics, fluorescent bulbs (and more) at the new facility. Not only will this new approach create a more welcoming, educational, and supportive environment for all drop-off recycling patrons, it will help to reduce material contamination and on site illegal dumping. Additionally (as estimated below) this new staffing model will increase the relative value of recyclable materials collected on site through better front- end management of materials and more back-end capacity to add value through processing (e.g. baling, sorting, etc.). The changes are summarized in the table below: Annual Labor Costs (includes benefits, taxes, and workers compensation costs) Current Proposed Lead Worker (currently vacant) $93,324 Entry Level Driver (new hire to fill vacancy) $74,127 Weekend attendants (part time labor) 18,063 Route I yard helper (temporary labor contract) 30,000 Entry Forklift Operator (additional position) 66,378 Overtime costs savings (due to schedule change) 25,500 20,000 Customer service interns (part time) 34,425 51,638 Labor Cost Subtotal 201,312 212,143 Additional revenue from better material quality 10,400 (conservative $200 additional revenue per week) Total Budget Impact $201,312 $201,743 FINANCIAL CONSIDERATIONS The proposed maximum IWM fees to be effective January 1, 2012 are included in Attachment 1. Adoption of the proposed fees will result in no total change to solid waste services rates for residential subscribers, and will result in a 2.77 - 2.87% increase in total rates for commercial subscribers. Commercial subscribers who elect to participate in green waste collection will be charged additional rates for that service, but they may be able to offset the additional cost of this service via changes to their garbage service subscription levels. Page 4 ---PAGE BREAK--- Agenda Item No. 6 The request to reinstate the Forklift Operator position (and thereby increase the ESD full time position count from 9 to 1 0) will have no net budget impact in the current fiscal year. Projections of full-time staffing costs assume hiring at bottom of pay scale. Any future impacts to salary and benefit costs (e.g. COLAs, benefits, merit increases) attributable to this position are assumed to be completely off-set by ongoing savings to overtime costs, increased value of materials and decreased costs of handling contamination and illegal dumping. Staff will include these assumptions in conjunction with the FY 2012-13 budget adoption process. ENVIRONMENTAL CONSIDERATIONS The services being covered by the proposed 2012 IWM fee and EBS Commercial Green Waste rates will enable El Cerrito to continue to reduce its environmental impact via further reductions in the amount of solid waste sent to landfill. The commercial green waste collection services and rates being proposed will enable diversion of tons of compostable material from landfills. The ability to provide greater on-site customer service at the Recycling and Environmental Resource Center will enable expanded collection of hard-to-recycle materials, including some hazardous waste materials. LEGAL CONSIDERATIONS Notices of public hearing were publicly posted per Ordinance 84-5 and Resolution 84-29 on December 6, 2011 and were published in the December 9, 2011 and December 14, 2011 editions ofthe West County Times. Reviewed by: Scott Hanin, City Man~ Attachments: 1. 2012 Garbage, Green Waste and Recycling Rates 2. Resolution 2011-XX (IWM Fee) 3. Resolution 2011-YY (EBS Commercial Green Waste Collection Rates) Page 5 ---PAGE BREAK--- The City of El Cerrito Agenda Item No. 6 ~~Attachment 1 EL CERRITO\~~ ENVIRCNMENT 2012 Solid Waste Collection, Processing and Disposal Rates Residential and Commercial Dollar Change Over Previous Year Over Previous Year %Change in EBS Collection 1 Integrated Waste Management (IWM) Fee: and Recycling Collection, Processing and Disposal Rates 2012 Total The IWM Fee covers curbside recycling collection for El Cerrito residents and businesses and supports the daily operations of the El Cerrito Recycling Center. The Fee is assessed on each trash container collected by East Bay Sanitary Company. 2 Integrated Resource Recovery Facility URRFl Rate: The IRRF Rate, which is set by the West Contra Costa County Integrated Waste Management Board, covers the cost of garbage disposal, green waste processing, and other associated services provided by the West Contra Costa Integrated Waste Management Authority, a.k.a. RecycleMore (www.recyclemore.com). 3 Bulk Refuse Rates (Commercial Subscribers): Actual bills for bulk refuse collection reflect the container size (in cubic yards), times the 1-yard bulk refuse collection rate plus the 1-yard IWM Fee plus the 1-yard IRRF Rate, times the number of pickups per week, times the number of weeks per year (52) divided by the number of months per year (12), plus the Container Rental. Collection rates for compacted refuse are the same as the rates for bulk refuse collection. Actual bills per pickup of compacted refuse reflect the container size (in cubic yards), times the 1-yard bulk refuse collection rate plus the 1-yard IWM Fee, plus the Per-yard compacted refuse disposal rate (which was last set at $57.75, effective January 1, 2010). ---PAGE BREAK--- The City of El Cerrito 2012 Green Waste Collection and Disposal Rates Green Waste Collection and Disposal Rates for Commercial and Multifamily (more than four units) Number of Picku Week 2 3 4 Extra Green Waste Collection and Disposal Rates for Single family and Multifamily (four units and fewer) Number of Additional Green Waste Containers 2 3 5 5 ENVIRONMENT ---PAGE BREAK--- RESOLUTION 2011-XX Agenda Item No.6 Attachment 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO FIXING AND SETTING RATES FOR THE INTEGRA TED WASTE MANAGEMENT FEE EFFECTIVE JANUARY 1, 2012 WHEREAS, the City of El Cerrito has established an Integrated Waste Management Fee (IWM Fee) for Integrated Waste Management Services provided by the Environmental Services Division (ESD), including operation of the El Cerrito Recycling Center, curbside collection of recyclable materials, and other waste collection, reductio.n, recycling and environmental programs; and WHEREAS, the City Council of the City of El Cerrito sets and charges the IWM Fee, and the Fee is collected by East Bay Sanitary Company as part of the garbage bills and transferred in whole to the City ofEl Cerrito's Integrated Waste Services fund; and WHEREAS, the City has reviewed and considered financial information as a part of the regular budget process to determine whether an IWM Fee increase is warranted and justified, and has also reviewed the Integrated Waste Service fund 1 0-year Financial Plan; and WHEREAS, the City intends to provide improved customer service at the new Recycling and Environmental Resources in part by reinstating a Forklift Operator position within the ESD, without impact to the current fiscal budget or 10-year Plan; and WHEREAS, the City Council intends to adopt the IWM Fee to be effective January 1, 2012, thus making it possible to keep the ESD's Integrated Waste Management Services as an on-going concern. NOW THEREFORE BE IT RESOLVED, by the City Council of the City of El Cerrito that the rates for the IWM Fee shall be as follows, effective January 1, 2012: Garbage 2012 IWM Fees Container Size Fees based on Garbaf!e Container Size 20-gallon cart fee) $8.54 35-gallon cart fee) 8.64 64-gallon cart fee) 17.29 1-yard bulk refuse (per garbage pickup) 12.97 2-yard bulk refuse (per garbage pickup) 25.94 ---PAGE BREAK--- Agenda Item No. 6 Attachment 2 BE IT FURTHER RESOLVED, that the Environmental Services Division is authorized to reinstate the Forklift Operator position and increase its position listing from 9 to 10 full time employees. I CERTIFY that at a regular meeting on December 19, 2011, the City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on December XX, 2011. Cheryl Morse, City Clerk Approved: William C. Jones III, Mayor ---PAGE BREAK--- RESOLUTION 2011 - YY Agenda Item No.6 Attachment 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ESTABLISHING MAXIMUM ALLOWABLE COMMERCIAL GREEN WASTE AND EXTRA RESIDENTIAL GREEN WASTE COLLECTION AND DISPOSAL RATES EFFECTIVE JANUARY 1, 2012 WHEREAS, the City of El Cerrito and East Bay Sanitary Company ("Company") have entered into that certain Franchise Agreement dated September 2, 1997 (as amended, the "Franchise Agreement"); and WHEREAS, per the City's request, the Company has proposed rates to provide services for the collection and disposal ( composting) of green waste, including yard debris, food scraps, and other accepted compost items as determined by the City, from commercial solid waste service subscribers; and WHEREAS, commercial solid waste service subscribers include all businesses, multifamily dwellings over four ( 4) units, and private schools in El Cerrito; and WHEREAS, this is an optional service being made available to commercial solid waste subscribers for up to five day per week collection, Monday through Friday, starting in January,2012;and WHEREAS, the rates for collection of additional green waste containers for residential solid waste service subscribers, which includes single family and multifamily dwellings four ( 4) units and fewer, above the weekly collection of one 64 gallon green waste container currently provided within the scope of existing collection rates have not previously been set by the City. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of El Cerrito that the maximum rates that East Bay Sanitary Company may charge for commercial green waste and extra residential green waste collection and disposal services provided by the Company are as follows, effective January 1, 2012: Commercial and Multifamily (greater than 4 units) Pickups per week (Monday through Friday) Green Waste Container 1 2 3 4 5 Size 35-gallon $25.2~ $50.44 $75.66 $100.88 $126.10 rate) 64-gallon 48.80 97.60 146.40 195.20 244.00 rate) ---PAGE BREAK--- Agenda Item No. 6 Attachment 3 Extra Residential (single family and multifamily 4 units and fewer) Weekly collection of additional green waste containers (above weekly collection of one 64 gallon green waste container currently provided at no additional cost to residential subscribers) Green Waste Container 1 2 3 4 5 Size 35-gallon $25.22 $50.44 $75.66 $100.88 $126.10 rate) 64-gallon 48.80 97.60 146.40 195.20 244.00 rate) I CERTIFY that at a regular meeting on December 19, 2011, the City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on December XX, 2011. Cheryl Morse, City Clerk Approved: William C. Jones III, Mayor