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AGENDA BILL Agenda Item No. 6 Date: December 18, 2012 To: El Cerrito City Council From: Garth Schultz, Environmental Analyst Melanie Mintz, Environmental Services Manager Karen Pinkos, Assistant City Manager Subject: Proposed Integrated Waste Management Fees and East Bay Sanitary Garbage & Green Waste Collection and Processing Rates Effective January 1, 2013 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, 2013. 2. Conduct a public hearing and upon conclusion adopt a Resolution setting maximum allowable East Bay Sanitary (EBS) garbage and green waste collection, disposal and processing rates, effective January 1, 2013. 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). IWM fee revenues are collected by East Bay Sanitary Company (EBS) as part of the garbage bills, and are transferred in whole to the City of El Cerrito’s Integrated Waste Management 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 2012-13 Operating Budget the City Council reviewed and approved a 10-year Financial Plan (Plan) for the IWM fund that includes a projected 5% increase in IWM fee revenue for FY 12-13, effective January 1, 2013. Staff is proposing to implement the projected increase since the IWM fund is currently on track to meet operating budget assumptions for FY 12-13. The Plan currently projects 2012 IWM fee revenue collections of $1,679,056; the proposed 2013 IWM fees were calculated to meet this projection. The fees are set given current EBS subscription levels (on which the fees are charged). ---PAGE BREAK--- Agenda Item No. 6 Page 2 East Bay Sanitary Garbage and 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 based upon maximum rates authorized by the City, pursuant to City of El Cerrito Municipal Code Chapter 8.12. With the exception of rates for new commercial green waste services that were added on January 1, 2012, EBS rates have not increased since January 1, 2011 pending completion of a Rate and Operations Review. The City and EBS recently completed the Rate and Operations Review that culminated in Council’s adoption of a Fifth Amendment to the Franchise Agreement (Resolution 2012-89, November 20, 2012). The Amendment provides for lower rates, greater services, and an extension of the Franchise Agreement through December 31, 2025. The Review process resulted in the development of the EBS 2013 Rate Application (see Agenda Packet for November 20, 2012, Agenda Item No. 7(A), Attachment 2b). The Rate Application stipulates EBS expenses that can be charged via rates, the sum of which total to a 2013 Revenue Requirement – less disposal and processing costs – of $3,866,466. The proposed 2013 EBS collection rates were calculated to meet the Revenue Requirement figure given current subscription levels. At the end of next calendar year, any over (or under) collection of rate revenue (based on subscription levels) will offset (or increase) next year’s rate revenue requirement via the Balancing Account established by the Fifth Amendment. Figure 1 – 2013 EBS rate and IWM fee Calculation Garbage Container Size 12/4/12 Container Census 2013 EBS rates (proposed) EBS 2013 Projected Revenue 2013 IWM fees (proposed) IWM 2013 Projected Revenue 20 Gallon 3,272 $16.13 $633,328 $8.75 343,560 35 Gallon 6,260 23.08 1,733,770 8.75 657,300 64 Gallon 484 45.66 265,193 18.00 104,544 35 Gallon (GW) 1 25.22 303 - - 64 Gallon (GW) 45 48.80 26,352 - - Commercial + Rental 722.5 yards 144.21 1,104,364 63.66 551,932 Debris Box NA Market 103,288 75.00 21,912 Total Projection 3,866,598 1,679,248 Revenue Requirement 3,866,446 1,679,056 ---PAGE BREAK--- Agenda Item No. 6 Page 3 Figure 2 – IWM fees by year Garbage Container Size1 2013 IWM fee (proposed) 2012 IWM fee 2011 IWM fee 20 Gallon $8.75 $8.54 $8.37 35 Gallon 8.75 8.64 8.37 64 Gallon 18.00 17.29 16.74 One Cubic Yard 63.66 56.20 50.66 Two Cubic Yards 127.31 112.41 101.31 Compacted per Yard 63.66 56.20 50.66 Debris Box per Load 75.00 75.00 75.00 Figure 3 – EBS rates by year Garbage Container Size2 2013 EBS rate (proposed) 2012 EBS rate 2011 EBS rate 20 Gallon $16.13 $13.64 $13.64 35 Gallon 23.08 21.61 21.61 64 Gallon 45.66 41.58 41.58 One Cubic Yard 144.21 126.30 126.30 Two Cubic Yards 273.54 238.65 238.65 Compacted per Yard 365.13 348.87 348.87 35 Gallon GW 25.22 25.22 NA 64 Gallon GW 48.80 48.80 NA 1 In previous years bulk commercial fees/rates (e.g. one yard, two yard, and compacted) were listed as weekly fees/rates. This created confusion among some rate payers and businesses, and made commercial rates difficult to calculate. All proposed January 1, 2013 fees/rates are now listed as rates, which is the standard method used in other communities. 2 EBS Rental Rates are included in the one and two yard rates listed. Footnote 1 also applies to Figure 3. ---PAGE BREAK--- Agenda Item No. 6 Page 4 FINANCIAL CONSIDERATIONS The proposed IWM fees and EBS rates to be effective January 1, 2013 are included in Attachment 1 (2013 Solid Waste Collection and Disposal Rates) and, respectively, in Attachments 2 and 3 (Resolutions). Adoption of the proposed combined IWM fees and EBS rates, along with the already adopted Integrated Resource Recovery Facility (IRRF) rates3, will result in total cost increases of $2.90 for 20 gallon customers (33% of residents), $1.89 for 35 gallon customers (63% of residents), and $5.42 for 64 gallon customers of residents). Bulk commercial collection costs will increase $26.96 to $53.00 per month for once weekly pickup of garbage (including recycling fees). There are no proposed increases to commercial green waste collection costs. ENVIRONMENTAL CONSIDERATIONS The services being funded by the proposed 2013 IWM fee and EBS rates will enable El Cerrito to continue to reduce its environmental impact via further reductions in the amount of solid waste sent to landfill, and improved access to safe disposal for toxic or hazardous materials. Specifically, the increased IWM fees will enable the ESD to continue expanding and improving the range of services offered via curbside collection and at the Recycling + Environmental Resource Center – potentially including paint and other household hazardous waste (HHW) materials in FY 13/14. The EBS rates made possible by the extended Franchise Agreement will support increased diversion of waste materials from local landfills via increased on-call services for residential customers, in- depth diversion site visits with commercial subscribers, and a rate structure that reduces or eliminates EBS disincentives to get waste (e.g. recyclable and green) out of garbage cans. LEGAL CONSIDERATIONS Notices of public hearing were publicly posted per Ordinance 84-5 and Resolution 84-29 on December 7, 2012 and were published in the December 8, 2012 and December 13, 2012 editions of the West County Times. 3 The IRRF Rate, which is set by the West Contra Costa County Integrated Waste Management Board and charged by East Bay Sanitary, covers the cost of garbage disposal, green waste processing, (HHW) programs, and other associated services provided by the West Contra Costa Integrated Waste Management Authority, a.k.a RecycleMore (www.recyclemore.com). 2013 Rates were set via Board Resolution No. 12-2 on November 18, 2012. ---PAGE BREAK--- Agenda Item No. 6 Reviewed by: Scott Hanin, City Manager Attachments: 1. 2013 Garbage, Green Waste and Recycling Rates 2. Resolution 2012-:XX (IWM Recycling fees) 3. Resolution 2012-YY (EBS Garbage and Green Waste Collection rates) Page 5 ---PAGE BREAK--- Container Size EBS Rate IRRF Rate1 IWM Fee2 2013 Total Cost 2012 Total Cost $ Change in Cost 20 Gallon "Mini-can" $ 16.13 $ 5.11 $ 8.75 $ 29.99 $ 27.09 2.90 $ 35 Gallon Cart 23.08 8.16 8.75 39.99 38.10 1.89 64 Gallon Cart 45.66 16.33 18.00 79.99 74.57 5.42 Container Size EBS Rate IRRF Rate1 IWM Fee2 2013 Total Cost 2012 Total Cost $ Change in Cost 35 Gallon Cart $ 25.22 $ - $ - 25.22 $ $ 25.22 $ - 64 Gallon Cart 48.80 - - 48.80 48.80 - Weekly Collection of Recycling, Green Waste, and Garbage Residential Rates I Single Family Homes and Multi-family Dwellings up to 4 units Residential Solid Waste Services include weekly collection of recycling (grey), greenwaste (green), garbage (blue); limited free on-call collection of larger quanities from your home; free access to the regional Household Hazardous Waste (HHW) Facility, and all services at the El Cerrito Recycling + Environmental Resource Center. Additional recycling carts are available at no extra cost. The City of El Cerrito 2013 Solid Waste Collection, Processing and Disposal Rates 2 Integrated Waste Management (IWM) Fee: 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. 1 Integrated Resource Recovery Facility (IRRF) 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, household hazardous waste (HHW) collection programs and other associated services provided by the West Contra Costa Integrated Waste Management Authority, a.k.a RecycleMore (www.recyclemore.com). Cost based on garbage container size Cost based on size of additional green waste container(s) Extra Green Waste Containers (one 64 gallon container serviced weekly included in above rates) Agenda Item No. 6 Attachment 1 ---PAGE BREAK--- Container Size EBS Rate IRRF Rate1 IWM Fee2 2013 Total Cost 2012 Total Cost $ Change in Cost 20 Gallon "Mini-can" $ 16.13 $ 5.11 $ 8.75 $ 29.99 $ 27.09 2.90 $ 35 Gallon Cart 23.08 8.16 8.75 39.99 38.10 1.89 64 Gallon Cart 45.66 16.33 18.00 79.99 74.57 5.42 One Cubic Yard 144.21 33.41 63.66 241.27 214.31 26.96 Two Cubic Yards 273.54 66.82 127.31 467.67 414.67 53.00 Compacted per Yard 365.13 - 63.66 428.79 405.08 23.71 Roll-off / Debris Box Container Size 1 2 3 4 5 6 20 Gallon "Mini-can" $ 29.99 $ 59.98 $ 89.97 $ 119.96 $ 149.95 $ 179.94 35 Gallon Cart 39.99 79.98 119.97 159.96 199.95 239.94 64 Gallon Cart 79.99 159.98 239.97 319.96 399.95 479.94 One Cubic Yard 241.27 453.21 665.15 877.09 1,089.03 1,300.97 Two Cubic Yards 467.67 891.51 1,315.35 1,739.19 2,163.03 2,586.87 Container Size 1 2 3 4 5 35 Gallon Cart 25.22 50.44 75.66 100.88 126.10 64 Gallon Cart 48.80 97.60 146.40 195.20 244.00 2 Integrated Waste Management (IWM) Fee: 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. The City of El Cerrito 2013 Solid Waste Collection, Processing and Disposal Rates 1 Integrated Resource Recovery Facility (IRRF) 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). Market Rate + $75 IWM Fee per Load - Call EBS at 237-4321 for pricing. Multiple Weekly Collections of Garbage Cost based on garbage container size and number of pickups per week Green Waste Collection Cost based on green waste container size and number of pickups per week Pickups per week Pickups per week Commercial Rates I Businesses and Multi-family Dwellings over 4 units Commercial Solid Waste Services include minimum weekly collection of recycling, garbage and services at the El Cerrito Recycling + Environmental Resource Center. Recycling container size and frequency of pickup do not affect collection rates. Green waste collection and HHW services are available at extra cost. Once Weekly Collection of Garbage Cost based on garbage container size ---PAGE BREAK--- Agenda Item No. 6 Attachment 2 RESOLUTION 2012–XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO FIXING AND SETTING RATES FOR THE INTEGRATED WASTE MANAGEMENT FEE EFFECTIVE JANUARY 1, 2013 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, reduction, 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 of El 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 Management fund 10-year Financial Plan; and WHEREAS, the City Council intends to adopt the IWM Fee to be effective January 1, 2013, thus keeping the ESD’s Integrated Waste Management functions 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, 2013: Garbage Container Size IWM Fee 20 Gallon Cart $8.75 35 Gallon Cart 8.75 64 Gallon Cart 18.00 One Cubic Yard 63.66 Two Cubic Yards 127.31 Compacted per Yard 63.66 Debris Box per Load 75.00 I CERTIFY that at a regular meeting on December 18, 2012, the City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: * * * * * ---PAGE BREAK--- Agenda Item No. 6 Attachment 2 IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on December XX, 2012. Cheryl Morse, City Clerk Approved: Greg Lyman, Mayor ---PAGE BREAK--- Agenda Item No. 6 Attachment 3 RESOLUTION 2012 – XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ESTABLISHING MAXIMUM ALLOWABLE RATES FOR THE COLLECTION OF GARBAGE AND GREEN WASTE EFFECTIVE JANUARY 1, 2013. WHEREAS, the City of El Cerrito and East Bay Sanitary Company (the Company) have entered into that certain Franchise Agreement dated September 2, 1997 (as amended, the “Franchise Agreement”); and WHEREAS, the Company has submitted a request for rate increases to be effective January 1, 2013, and that such increases were calculated pursuant to the methodology established in the Fifth Amendment to the Franchise Agreement, dated December 14, 2012; and WHEREAS, the Company’s collection rates have not increased since January 1, 2011; and WHEREAS, the rate adjustments submitted to the City have been reviewed for accuracy, consistency with the adjustment methodology, and reasonableness by the City’s Environmental Analyst, Environmental Services Manager, the Assistant City Manager, and the City Manager; and 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 services provided by the Company are as follows, effective January 1, 2013: Garbage Container Size EBS Rates 20 Gallon Cart $16.13 35 Gallon Cart 23.08 64 Gallon Cart 45.66 One Cubic Yard per weekly pickup 114.88 One Cubic Yard rental 29.33 Two Cubic Yards per weekly pickup 229.71 Two Cubic Yards rental 43.83 Compacted per Yard per weekly pickup 365.13 35 Gallon Green Waste 25.22 64 Gallon Green Waste 48.80 I CERTIFY that at a regular meeting on December 18, 2012, the City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ---PAGE BREAK--- Agenda Item No. 6 Attachment 3 IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on December XX, 2012. Cheryl Morse, City Clerk Approved: Gregory B. Lyman, Mayor