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AGENDA BILL Agenda Item No. 5(H) Date: August 19, 2014 To: El Cerrito City Council From: Garth Schultz, Operations + Environmental Services Division Manager Yvetteh Ortiz, Public Works Director/City Engineer Subject: Payment of El Cerrito’s share of the West Contra Costa Integrated Waste Management Authority Budgeted Operating Expenses ACTION REQUESTED Adopt a resolution authorizing payment of $99,762 for the City of El Cerrito’s share of the Contra Costa Integrated Waste Management Authority budgeted operating expenses for Fiscal Years 2013-14 and 2014-15. BACKGROUND AND ANALYSIS The City of El Cerrito (the City) is a member of the West Contra Costa Integrated Waste Management Authority (Authority) and a party to the Joint Powers Agreement that created the Authority in 1991. The Authority provides a variety of services to its member agencies (which includes El Cerrito, Richmond, San Pablo, Pinole, Hercules, and the unincorporated areas of West County). The Authority sets an annual Operating Budget that projects program expenses and revenues (Attachment The services provided by the Authority as a part of its Operating Budget currently include management and administration of State mandated AB939 recycling diversion reporting and programs, regional household hazardous waste (HHW) collection programs, and other outreach and education to residents, businesses, schools, and community groups. Historically, and per the terms of the Authority JPA Agreement, the City and all other parties to the Joint Powers Agreement have funded Authority Operating Expenses via a portion of the Integrated Resource Recovery Facility (IRRF). Fees that were set by the Authority and charged on garbage bills paid by residents and businesses. However, with the December 31, 2013 expiration of the Integrated Resource Recovery Agreement, the Authority ceased setting IRRF Fees as of January 1, 2014. While other Authority members included a mechanism to fund Authority operating expenses in their new negotiated post-collection agreements with solid waste processor Republic Services, the City’s adopted Post-Collection Agreement with Republic Services (Resolution No. 2013-54) did not include such a mechanism, opting instead to pay its share of Authority expenses via other means. Unlike the other Authority member agencies, the City already has an established Integrated Waste Management (IWM) Fund that receives revenues from Council- ---PAGE BREAK--- Agenda Item No. 5(H) Page 2 adopted IWM Fees that are charged on solid waste collection bills in the City, from which the City’s share of Authority operating expenses can be paid. The City’s expenses, as previously paid directly by ratepayers to the Authority via the IRRF Rates, is calculated based on the City’s proportionate tonnage of the Authority’s municipal solid waste (e.g. MSW or garbage) tonnage, approximately 8% annually. By drawing its share of the Authority’s operating expenses from the IWM Fund instead of including it as an element of the City’s Post-Collection Agreement, the City will be able to more effectively respond to changes to its share of Authority expenses without collecting more revenues than necessary from El Cerrito ratepayers. Requesting Council action to authorize the City Manager’s issuance of the required payments to the Authority has not been necessary in the past, the City’s share of Authority expenses had been paid by rate payers via their garbage bills, and then remitted by the post-collection services provider to the Authority. By paying the Authority directly from the City’s IWM Fund, as outlined above, the City will use funds collected from ratepayers to pay Authority expenses directly. This does not change the nature of the City’s relationship to the Authority, nor the terms of the JPA Agreement; rather, this new arrangement is simply a change in how the City’s share of Authority expenses are remitted to the Authority. Because direct payment by the City to the Authority has not previously been required, and because the payment amounts exceed the City Manager’s spending approval limits, Council authorization for the payments is being requested. Staff anticipates that this methodology could be applied in future years, however it will be prudent to review and update this methodology, and codify it via formal agreement with the Authority, for any payments to the Authority due in subsequent fiscal years. The City’s share of the Authority’s Fiscal Year (FY) 2013-14 budgeted operating expenses from January 1 through June 30, 2014 (after the Authority ceased setting IRRF Fees) is calculated to be $39,9851. An invoice from the Authority is included as Attachment 2. The City’s proportionate share of the Authority’s FY 2014-15 budget is currently estimated to be 8% of the Authority’s total projected operating expenses of $747,209, or $59,777. STRATEGIC PLAN CONSIDERATIONS Approval of proposed payments to the Authority fits in with Goal F (Foster environmental sustainability citywide) of the City’s Strategic Plan, adopted March 2013. Specifically, approval of the proposed payments will result in the continuation of waste diversion and reduction programs provided to the City by the Authority, which is consistent with the “Reducing the amount of waste generated in El Cerrito” strategy listed in Goal F. 1 Via the Authority’s previously established calculation method of proportionately allocating costs to member agencies based on each member agency MSW percentage/ ---PAGE BREAK--- Agenda Item No. 5(H) ENVIRONMENTAL CONSIDERATIONS Approval of the proposed payments will allow the continuation of waste diversion and reduction programs currently provided to El Cerrito by the Authority. FINANCIAL CONSIDERATIONS Funding of $39,985 for FY 2013-14 expenses was approved in the FY 2013-14 adopted budget allocation from the Integrated Waste Management Fund. Funding for FY 2014- 15 projected expenses of $59,777 is available the current year's adopted budget in the Miscellaneous Professional Services allocation from the Integrated Waste Management Fund. LEGAL CONSIDERATIONS The City Attorney has reviewed the proposed action and found that legal considerations have been addressed. Scott Hanin, City Manager Attachments: 1. Resolution 2. Invoice for El Cerrito's Share of Remaining FY 2013-2014 Operating Budget Expenses 3. FY 2014-2015 Authority Operating Budget Page 3 ---PAGE BREAK--- Agenda Item No. 5(H) Attachment 1 RESOLUTION 2014–XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO TO APPROVE PAYMENT TO THE WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY (AUTHORITY) OF EL CERRITO’S SHARE OF THE AUTHORITY’S BUDGETED OPERATING EXPENSES FOR FISCAL YEARS 2013-2014 AND 2014-2015 WHEREAS, the City of El Cerrito (City) is a member of the West Contra Costa Integrated Waste Management Authority (Authority) and a party to the Joint Powers Agreement that created the Authority in 1991; and WHEREAS, the City and all other parties to the Joint Powers Agreement have historically funded Authority operating expenses via a portion of the Integrated Resource Recovery Facility (IRRF) Fees that were set by the Authority and charged on garbage bills paid by residents and businesses; and WHEREAS, with the expiration of the Integrated Resource Recovery Agreement on December 31, 2013, the Authority ceased setting IRRF Fees, effective January 1, 2014; and WHEREAS, the Authority continued operations as guided by its adopted Fiscal Year 2013-2014 Operating Budget from January 1, 2014 through June 30, 2014; and WHEREAS, the City did not include a mechanism to pay its share of Authority operating expenses as a part of its Post Collection Agreement with Republic Services approved via Resolution No. 2013-54 as other Authority member agencies have done; and WHEREAS, the City’s share of the Authority’s Fiscal Year 2013-2014 budgeted operating expenses from January 1, 2014 through June 30, 2014 are calculated to be $39,985; and WHEREAS, funding was approved in the adopted FY 2013-14 budget from the Integrated Waste Management Fund; and WHEREAS, the City’s share of the Authority’s Fiscal Year 2014-2015 budgeted operating expenses from July 1, 2014 through June 30, 2015 are estimated to be $59,777; and WHEREAS, funding is available in the adopted FY 2014-15 budget in an allocation from the Integrated Waste Management Fund for Miscellaneous Professional Services. NOW THEREFORE BE IT RESOLVED, by the City Council of the City of El Cerrito, that it hereby approves payment of El Cerrito’s share of Fiscal Years 2013-2014 and Fiscal Year 2014-2015 Authority operating expenses in the amount of $99,762. . ---PAGE BREAK--- Page 2 BE IT FURTHER RESOLVED, that this Resolution shall become effective immediately upon passage and adoption. I CERTIFY that at a regular meeting on August 19, 2014 the City Council of the City of El Cerrito 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 of El Cerrito on August X, 2014. Cheryl Morse, City Clerk APPROVED: Janet Abelson, Mayor ---PAGE BREAK--- June 18, 2014 Mr. Garth Schultz City of El Cerrito 10890 San Pablo A venue El Cerrito, CA 94530 Dear Garth, Enclosed is the first invoice for the 2014 JPA Operating Account revenue allocation for the City of El Cerrito. As we discussed, your intention was to incorporate the JPA portion of the post- collection rate administered by the City of El Cerrito and have the City pay it directly to the Authority. The revenue allocation (based on tons) for calendar year 2014 is $79,970 and the first semi- annual payment is $39,985. Please make the check payable to the West Contra Costa Integrate Waste Management Authority and remit payment to: RecycleMore Attn: Accounts Receivable 1 Alvarado Square, Bldg 5 San Pablo, CA 94806 If you have any questions or need additional information feel free to call me at (510) 215-3127. Thank you. Sincerely, c~ Chris Lehan Executive Director r WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY One Alvarado Squa~e San Pablo, CA 94806 t [PHONE REDACTED] f 510.236.16.36 info@ recyc I e more.co m www. recyc I em ore .com Agenda Item No. 5(H) Attachment 2 ---PAGE BREAK--- BILL TO: City of El Cerrito 10890 San Pablo Avenue El Cerrito, CA 94530 DATE PROJECT INVOICE 6/20/14 JPA Post-Collection Fee DESCRIPTION WCCIWMA Revenue Allocation semi-annual payment REMIT PAYMENT TO: RecycleMore Attn: Accounts Receivable 1 Alvarado Square, Bldg 5 San Pablo, CA 94806 QTY One Alvarado Square San Pablo 1 CA 94806 INVOICE# 06202014 RATE Total TERMS Net 30 AMOUNT $39,985 $39,985 0 WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY [PHONE REDACTED] [PHONE REDACTED] • info@ recyc I e more .com www.recyclemore.com ---PAGE BREAK--- Agenda Item No. 8.5 Agenda Report recycle more WEST COMTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITV Date: To: From: Subject: June 12,2014 West Contra Costa Integrated Waste Management Authority Board Chris Lehon, Executive Director Proposed Fiscal Year 2014-2015 Authority Operating Budget ACTIONS REQUESTED Consideration of ADOPTION OF PROPOSED RESOLUTIONS NO. 14-01 and 14-02 adopting the Fiscal Year (FY) 2014-15 Authority Operating Budget BACKGROUND Attached is the proposed FY 2014/2015 budget This proposed operating budget is for direct expenses such as: personnel salary and benefits, contractor services, community support grants, direct program expenditures, etc. Every year, the Board reviews its public agency operating budget during April and May and approves the final budget for the upcoming fiscal year at its June meeting. In preparation for the Budget workshop, The Internal Operations Committee (Directors: Bates, Lyman and Romero) met with the Executive Director to discuss budget planning in December 2013. In January, staff presented a draft Operating Fund Budget to Board of Directors (Board) based on comments and input from the Internal Operation Committee. The next step involved (April and May 2014) revising JPA programs and services by staff and members (Murray, Myrick, and Valdez) of the Waste Reduction and Recycling Committee (WRRC) and their comments and recommendations were incorporated into this report. The funds for the Operating Fund Budget are primarily generated from fees that are included in customer solid waste rates set by the Board each year and collected by Republic Services and the City of El Cerrito. The Fiscal Year 2014/15 Operating Fund Budget expenses (Attachment 2- 2) are estimated to total $747,209 or 36 percent less than 2013/14 fiscal year budget ($1,168,119). These expenses would result in an end-of-year operating fund account balance of $821,359 as of June 30, 2015. It is projected that the 2013/14 budget will come in at $915,426 expended, which is 21 percent less than anticipated, leaving a $756,581 account balance as of June 30, 2014 Agenda Item No. 8.5 Pagel o£3 S:\Agenda\2ffi4\June\BudgetRpt2014v2.docx Agenda Item No. 5(H) Attachment 3 ---PAGE BREAK--- Agenda Item No. 8.5 As stated above, the revenue for the Operating Fund is primarily derived from fees contained in the customer solid waste rates. The fees approved by the Board in October 2013 for Rate Year 2014 totaled $1 million. Actual operating expenses are projected to be lower than budgeted amount included in the rate setting for 2014 and therefore, post collection fee revenue will be adjusted when rates are set for calendar year2015. Fiscal Year2014-15 Highlights Personnel Services Expenses include staff salaries and benefits of $491,512, which is 28 percent decrease from the FY 2013/14 budget. The proposed budget includes staff reductions from six Full Time Equivalents (FTE) to four FTEs. The decreases in Personnel Services are primarily due to staff reductions. Employee CalPERS contributions increased from three to five percent (Resolution 12-2). Management and Administration (Rent and Utility, Materials and Supplies) Include memberships and subscriptions, office supplies, postage, reprographics, travel, training and equipment purchases. Expenses for this category total $82,297, which is 8 percent decrease from the amount budgeted for fiscal year 2013/2014. This includes financial services provided by the City of Hercules: $19,217 and office and storage rent of $35,857. Professional Services Include legal services, auditing services, and other consulting expenses. Expenses for this category total $86,000, which is a 49 percent decrease from last year's budget. This decrease is largely due to fewer contracted educational vendor services for schools and eliminating $50,000 for post collection procurement services that were completed by December 2013. Program Direct Expenses and Grants Expenses include residential and commercial programs, the home composting and organics, mandatory commercial recycling and HHW. Expenses for this category total $87,400 which is a 50 percent decrease from Fiscal Year 2013/2014 budget. This decrease is largely due to onetime startup cost for the residential food scraps program in three additional jurisdictions and production of fewer outreach brochures and flyers. Agenda Item No. 8.5 Page2of3 S:\Agenda \2014\June\ Budget Rpt2014 v2.docx ---PAGE BREAK--- Agenda Item No. 8.5 2014-15 Proposed Budget Program Descri~tions Percentage Amount Management & Administration 31.0% $231,789 Post -Collection 9.3% $ 69,846 Household Hazardous Waste 9.3% $ 69,532 General AB 939 Program Activities 16.9% $ 63,515 Regional Programs 4.2% $ 15,706 Business Programs 11.1% $ 41,578 Commercial Organics 5.9% $ 22,109 Residential Organics 6.4% $ 24,109 School Programs 23.4% $ 88,048 Grants Programs 9.3% $ 34,849 Special Events 11.7% $ 44,061 Education & Public Information 11.2% $ 42,067 Grand Total 100.0% $747,209 FISCAL IMPACT The proposed budget is $747,209. The Authority's revenue requirement is approximately 8.9 percent of the post collection rate. RECOMMENDED ACTION ADOPTION OF PROPOSED RESOLUTION NO. 14-01 and 14.-02 adopting the FY 2014-15 RecycleMore Operating Budget. Submitted by: CluisLehon Executive Director Attachments: Proposed Resolution 14-01, Exhibits and Resolution 14-02 Agenda Item No. 8.5 S:\Agenda\2014\June\BudgetRpt2014 v2docx Page3of3 ---PAGE BREAK--- RESOLUTION NO. 14- 01 RESOLUTION OF THE BOARD OF DIRECTORS OF THE WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY APPROVING THE REVISED FISCAL YEAR 2014/2015 AUTHORITY BUDGET WHEREAS, the West Contra Costa Integrated Waste Management Authoqt;r ("Authority'') is required to adopt annual Operating Budgets; WHEREAS, the Authority Board of Directors reviewed the Fiscal Year 2013/2014 Estimate-to- Close, the Revised Fiscal Year 2014/2015 Budget at a public workshop held on May 8, 20 14; NOW, THEREFORE, the Board ofDirectors of the West Contra Costa Integrated Waste Management Authority resolve as follows: Section 1. The Revised Fiscal Year 2014/2015 Budget set forth in Exhibit A attached hereto is approved. ATTEST: CHAIR OF THE BOARD Bobby Peregrino, Authority Secretary Cecilia Valdez Date I hereby certify that the foregoing Resolution was adopted by the Board of Directors of the West Contra Costa Integrated Waste Management Authority at its meeting on June 12, 2014 by the following vote: AYES: Directors:. _ NOES: Directors: _ ABSENT: Directors: Bobby Peregrino, Authority Secretary ---PAGE BREAK--- EXHIBIT A TO RESOLUTION NO. 14-01 WCCIWMA PROPOSED FISCAL YEAR 2014/2015 BUDGET Recycling Special Operating Revenue Fund Fund TOTAL OPENING FUND BALANCE- July 1, 2014 $ 756,581 $ 3,989,505 $ 4,746,086 REVENUES Revenue from Post-Collection Rates 810,406 810,406 Interest Income 1,580 8,000 9,580 Total Revenues 811,986 8,000 819,986 EXPENDITURES Personnel Services 491,512 491,512 Professional Services Contracts 86,000 86,000 General Expense 82,297 82,297 Program Direct Expense 67,400 67,400 Grant Awards 20,000 20,000 Capital Outlay Total Expenditures 747,209 747,209 PROJECTED YEAR-END FUND BALANCE- June 30, 2015 $ 821,359 $ 3,997,505 $ 4,818,863 [EMAIL REDACTED]/4/20143:39 PM ExhibitA-1 ---PAGE BREAK--- 6/4120143:41 PM EXHIBIT A TO RESOLUTION NO. 14·01 (continued) WCCIWMA PROPOSED REVISED FY 2014/2015 OPERATING FUND EXPENDITURES BUDGET (INCLUDING USED OIL AND HOUSEHOLD HAZARDOUS WASTE GRANT) TOTAL Management Post- General OPERATING Used Oil/ FY2014/15 &Admin. AB939 Collection Fund HHW Fund FUND Bud!!et (D=A+B+C) (F=D+E) (H = F+G) Personnel Services: Salaries and Benefits $ 137.492 $ 245,243 $ 57,746 $ 440.480 $ 51,032 $ 491,512 $ 4,000 $ 495,512 Sub-total $ 137.492 $ 245,243 $ 57,746 $ 440.480 $ 51,032 $ 491,512 $ 4,000 $ 495,512 Professional Services: General Legal Counsel Services $ 4,500 $ 11.400 $ 9,600 $ 25,500 $ 4,500 $ 30,000 $ $ 30,000 Professional Technical Assistance 10,000 2,500 12,500 6,000 18,500 . 18,500 Graphics Design 2,000 2,000 2,000 . 2,000 Workshops 25,000 25,000 25,000 . 25,000 Web Site 2,000 2,000 2,000 . 2,000 Other Professional Services 7,500 1,000 8,500 8,500 . 8,500 Sub-total $ 12,000 $ 51.400 $ 12,100 $ 75,500 $ 10,500 $ 86,000 $ $ 86,000 General Expenses: MileagefTravei/Board Stipends $ 4,500 $ $ $ 4,500 $ $ 4,500 $ $ 4,500 Membership Dues & Subscriptions 2,500 2,500 2,500 2,500 Printing and Copying Charges 3,240 3,240 3,240 3,240 Office Supplies and Expenses 2,500 2,500 2,500 . 2,500 Employee Training/Seminars 500 500 500 . 500 Postage/Overnight Delivery 500 500 500 . 500 Office Equip./Computer Main!. 1,500 1,500 1,500 . 1,500 Insurance 6,139 6,139 6,139 . 6,139 Telephone 3,144 3,144 3,144 . 3,144 Payroii/H.R. Services 2,700 2,700 2,700 . 2,700 ControllerfTreasurer Services 19,217 19,217 19,217 . 19,217 Office/Other Rent 35,857 35,857 35,857 . 35,857 Sub-total $ 82,297 $ $ $ 82,297 $ $ 82,297 $ $ 82,297 Program Direct Expenses: Employee ExpensesfTravel $ $ 1,150 $ $ 1,150 $ 750 $ 1,900 $ . $ 1,900 Supplies and Equipment 6,000 6,000 . 6,000 Copying, Printing and Advertising 13,250 13,250 1,250 14,500 48,000 62,500 Outside Services 15,500 15,500 15,500 22,500 38,000 Miscellaneous 1,500 1,500 1,500 . 1,500 Promotional Items 28,000 28,000 28,000 28,000 56,000 Sub-total $ $ 59.400 $ $ 59.400 $ 8,000 $ 67.400 $ 98,500 $ 165,900 Grant Awards $ $ 20,000 $ $ 20,000 $ $ 20,000 $ . $ 20,000 Capital Outlay: Office Furniture & Equipment $ . . Sub-total $ $ $ $ $ $ . $ $ Total Operating Fund Expenditures $ 231,789 $ 376,Q43 $ 69,846 $ 677,677 $ 69,532 $ 747,209 $ 102,500 $ 849,709 Percent of Total 31.0% 50.3% 9.3% 90.7% 9.3% 100.0% ExhibitA-2 ---PAGE BREAK--- EXHIBIT A TO RESOLUTION NO. 14 • 01 (continued) WCCIWMA FISCAL YEAR 2014/2015 BUDGET AB939 PLANNING AND IMPLEMENTATION General Program Regional Business Commercial Residential School Education & Activities Programs Programs Organics Organics Programs Grants Program Special Events Public Info. Total Personnel Services: Salaries and Benefits $ 42,415 $ 9,706 $ 35,478 $ 16,109 $ 16,109 $ 55,298 $ 14,749 $ 29,811 $ 25,567 $ 245,243 Sub-total $ 42,415 $ 9,706 $ 35,478 $ 16,109 $ 16,109 $ 55,298 $ 14,749 $ 29,811 $ 25,567 $ 245,243 Professional Services: General Legal Counsel Services $ 10,500 $ $ 600 $ $ 300 $ $ $ $ $ 11,400 Professional Technical Assistance 10,000 10,000 Graphics Design 1,000 1,000 2,000 Workshops 5,000 20,000 25,000 Web Site 2,000 2,000 Other Prof. Svs/Special Events 1,000 1,000 Sub-total $ 20,500 $ $ 1,600 $ $ 5,300 $ 20,000 $ $ $ 4,000 $ 51,400 Program Direct Expenses: Employee Expenses/Travel $ 100 $ 250 $ $ $ 200 $ 250 $ 100 $ 250 $ $ 1,150 Copying, Printing and Advertising 250 500 2,500 10,000 13,250 Outside Services 10,000 3,000 2,500 15,500 Program Operations 500 1,000 1,500 Promotional Items/Campaigns 5,500 4,000 6,000 2,500 10,000 28,000 Sub-total $ 600 $ 6,000 $ 4,500 $ 6,000 $ 2,700 $ 12,750 $ 100 $ 14,250 $ 12,500 $ 59,400 Grant Awards $ 20,000 $ 20,000 Total AB939 Expenditures $ 63,515 $ 15,706 $ 41,578 $ 22,109 $ 24,109 $ 88,048 $ 34,849 $ 44,061 $ 42,067 $ 376,043 Percent of Total 16.9% 4.2% 11.1% 5.9% 6.4% 23.4% 9.3% 11.7% 11.2% 100.0% 6/4/20143:42 PM Exhibit A· 3