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Item 22c Staff Report Public Hearing to Consider Solid Waste Managament Issues: c) Solid Waste Management Programs and Rate Structure FactorsTOWN OF LOS GATO$ COUNCIL AGENDA REPORT DATE: November 30, 1994 TO: MAYOR AND TOWN_COUNCI FROM: TOWN MANAGER SUBJECT: COUNCIL AGENDA DATE: 12-5-94 ITEM NO. PUBLIC HEARING TO CONSIDER SOLID WASTE MANAGEMENT ISSUES: c) SOLID WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS RECOMMENDATION: 1. Open the Public Hearing, receive public testimony on solid waste management rate structure factors. 2. Continue the Public Hearing to January 3, 1995. REPORT OBJECTIVE: This report provides Council and interested community members information on solid waste management services and costs. The following outlines the report: I. BACKGROUND A. Program Objectives B. Fiscal lmpact C. Community Education II. DISCUSSION A. Overview B. Solid Waste Management Program Elements 1. Refuse Collection 2. Landfill Costs 3. Residential Curbside Recycling 4. Multi -Family Recycling 5. Commercial Cardboard Recycling 6. Town -Operated Solid Waste Management Programs C. Rate Structure Factors PREPARED BY: Regina A. FaI Community Se - • rector RAF:dr CSD04:A: \CNCLRPTS\RECYCLNG. RAT ATTACHMENT$: See page 9 for list of attachments. DISTRIBUTION: See page 9 for distribution list. Reviewed by: Attorney Clerk Finance COUNCIL ACTION/ACTION DIRECTED TO: Revised: 11/30/94 4:30 pm reasurer PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: PUBUC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 I. BACKGROUND: A. PROGRAM OBJECTIVES The impetus for the Solid Waste Management Program comes from the following: 1. Meet Customer Demand Growing citizen awareness of environmental issues including the problems of refuse disposal has increased demand for expanded recycling services. A significant percentage of our community members recognize the need to institute and participate in recycling programs to protect and conserve our environment, conserve natural resources and defer increased disposal costs. 2. State Mandate The Recycling Program history: The State adopted AB 939 requires municipalities to adopt plans listing strategies to reduce landfilled waste; these plans are called Source Reduction and Recycling Elements (SoRRE). Our SoRRE was adopted by Council about two years ago after the required public hearings. The SoRRE states that we will expand our recycling program to collect a variety of materials including mixed paper and yard waste. The current Residential Curbside Recycling Agreement with Green Valley Disposal Company (GVDC) expires on February 1, 1995. To assure continued curbside recycling services and obtain competitive proposals, the five West Valley jurisdictions (Campbell, Los Gatos, Monte Sereno, Saratoga and Santa Clara County) jointly issued a Request For Proposals (RFP). GVDC and Browning Ferris Industries submitted proposals. GVDC was selected because it offered lower prices. Recycling and residential yard waste services are scheduled to begin February 1, 1995. The recently executed agreements with GVDC for the expanded program to collect mixed paper and yard waste comply with the Town's SoRRE. AB 939 requires all jurisdictions in the State to divert 25 percent of their municipal waste stream by January 1, 1995, and 50 percent by January 1, 2000. The Town diverted about 18 percent of its waste stream in 1991, which is the base line year for purposes of calculation. Since tons disposed has decreased only 0.4 percent, an additional seven percent diversion is required to comply with AB 939. The only way to meet the 1995 mandate is to recycle yard waste and mixed paper. AB 939 specifies that jurisdictions may be subject to a $10,000 per day fine for non- compliance. Staff from the California Integrated Waste Management Board indicate that penalties would not be assessed if the jurisdiction demonstrates a good -faith effort to comply. Conversations with Board staff indicate that the contracted recycling and yard waste services to begin February 1, 1995, demonstrate that good faith effort. PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: PUBLIC HEARING TO CONSIDER SOLID WASTE MANAGEMENT ISSUES; C) SOLID WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 3. Lengthen Landfill Life and Contain Disposal Fees Extending the life of the landfill will assist in postponing the need to seek other more distant disposal sites when the current site is full. Reducing tons disposed also lowers total disposal costs. Refuse disposal fees alone have increased from $18.49 per ton in July 1988 to $42.59 per ton July 1, 1992. Costs for disposal will increase if another landfill is developed locally or if refuse must be transported to a distant landfill site. This will result in higher rates. B. FISCAL IMPACT The Fiscal Year 1994-95 Operating Budget assumes that all solid waste management costs are bome by the ratepayers. All new programs must be paid for by the ratepayers unless Council funds them with General Fund money. C. COMMUNITY EDUCATION Community members are provided a number of opportunities to give input regarding the Solid Waste Management Program: 11-7 Council Committee meeting to discuss final audit report and rate structure alternatives 11-14 Educational Forum; 7:30 p.m. Neighborhood Center 11-17 Community Services Commission meeting to discuss new services and rate factors. 11-21 Council Public Hearing to consider Performance Audit 12-5 Council Solid Waste Management Public Hearing: a. Performance Audit b. Base Rates c. Town's SWM Program 12-19 Public Hearing continued. 1-3-95 Council sets solid waste management rates 1-10-95 GVDC notifies customers of rate increases effective February 1, 1995 Postcards were sent to 9,000 addresses inviting residential and commercial customers to the November 14 forum. The postcard also offered a fact sheet and over 450 have been mailed. In addition, Public Hearing notices were printed in The Los Gatos Weekly -Times. The Mercury News Extra Section contained an article regarding the forum in its November 9, 1994, issue. Approximately 50 people attended the forum. Most attendees were seniors; all identified themselves as residential customers except a representative from The Terraces. People asked a number of questions about what can and cannot be recycled under the new program. It was difficult to gauge response to the services. Although the participants are understandably not eager to pay increased rates, the impression was that most attendees understood the basis. Forum comments included: charge more for the second can than the first; and have a senior rate. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: PUBLIC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 These comments will be addressed in the report regarding solid waste management rates. II. DISCUSSION: A. OVERVIEW The Town has a comprehensive Solid Waste Management Program including the programs listed below. A summary of program costs Is attached (Attachment 3). 1. Refuse Collection 2. Landfill Costs 3. Residential Curbside Recycling 4. Multi -Family Recycling 5. Commercial Cardboard Recycling 6. Town -Operated Solid Waste Management Programs B. SOLID WASTE MANAGEMENT PROGRAM ELEMENTS 1. REFUSE COLLECTION COSTS In accordance with the franchise agreement, the cost of refuse collection services are established following a review process by the Rate Review Committee (RRC) consisting of representatives of the Cities of Monte Sereno, Campbell, Saratoga, and Town of Los Gatos. The Committee meets independently and then together with representatives of Green Valley to discuss and negotiate the cost of providing refuse collection services to our communities. Savings measures are also reviewed with the goal of reducing expenditures and thereby reducing costs to ratepayers. The GVDC budget for FY 1994-95 is evaluated in detail In the Performance Audit and corresponding Council Report also presented to Council November 21, 1994. GVDC currently disagrees with the Performance Audit's conclusions on allowable costs. The two remaining issues are: 1). the profit calculation elements; and 2). compensation to GVDC for consultant's fees. 2. LANDFILL COSTS The total increase in tipping costs has increased from $18.49 per ton effective July 1, 1988, to $42.59 effective July 1, 1992. Taxes and surcharges for regulatory requirements have increased from $0.07 in July 1, 1988, (less than one-half of one percent) to $15.99 in July 1, 1992. Surcharges comprised approximately 38 percent of total tipping fees. The RRC is working with Guadalupe representatives to determine a disposal fee for Council consideration. Until discussions have been completed, budgeted IandfiI costs have been calculated using the July 1, 1992, Guadalupe base fee (its fee excluding surcharges), plus surcharges effective July 1, 1994: $26.60/ton (July 1, 1992, base rate) + $16.36/ton (current surcharges) = $42.96/ton. A breakdown of taxes and fees related to disposal costs is attached as Attachment 1. PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: PUBUC HEARING TO CONSIDER SOLID WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 3. RESIDENTIAL CURBSIDE RECYCLING SERVICE COST a. Current Services Curbside Recycling has been provided to Los Gatos residents since February of 1990. The cost of $0.82 per household per month is included In residential rates. Pursuant to Council action, GVDC began collecting HDPE plastic (milk and water) jugs in January 1992. The cost is an additional $024/household or $22,500/year. GVDC agreed to keep the cost faced through the term of the agreement which expires February 1995. b. Expanded Recycling Services The West Valley jurisdictions jointly issued a Request For Propnsals (RFP), for expanded recycling services. Subsequently, each jurisdiction has entered into an agreement with Green Valley Disposal Company for recycling and residential yard waste services to begin February 1, 1995.. Attachment 2 provides a summary of materials to be collected. In addition to materials currently collected, the vendor will collect mixed paper, small scrap metal items, milk and juice cartons, aseptic cartons, styrofoam, and various plastic bottles with a #1-7 on their bottom. Collecting mixed paper from all residences and public facilities is a major component of AB 939 compliance. Los Gatos' SoRRE indicates that mixed paper accounts for 28 percent of our waste stream. Services to collect and recycle yard waste are included in the agreement with GVDC because this material makes up about 30 percent of the residential waste stream. This estimate is based on a mid-1991 waste composition survey that was conducted at the disposal site to determine which materials (e.g., yard waste, paper, plastics, glass and metals) make up the Town's waste stream. This proportion may have increased since that time because the survey was performed during drought conditions when water rationing was in effect. 4. MULTI -FAMILY RECYCUNG a. Los Gatos began offering recycling services to residents of mufti -family units in January 1991. Annualized costs for FY 1994-95 are $89,700. Services to multi -family dwellings will mirror those provided to single family dwelling residents (one to four units) with two exceptions: 1) multi -family residents will not receive individual bins; due to space restrictions, collection containers will be placed next to refuse bins at each complex; and, 2) motor oil will not be collected. b. Used Oil Collection The RFP's intent was to provide, to the extent possible, recycling services for multi -family dwellings that are comparable to the services provided PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: PUBUC HEARING TO CONSIDER SOLID WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 single -far -My dwellings. Toward that end, firms were required to submit in their proposal a fee per multi -family complex to collect used oil from multi- family dwellings as a service that could be included at the discretion of the jurisdictions. GVDC proposed that a locked cabinet be placed on the premises of each participating complex. The cabinet would meet all State regulations (eg: secondary containment), and a key would be provided to each manager/owner who would dispense clean jugs on request. The owner/manager would be required to contact GVDC to request pickups of the full Jugs and provide replacement jugs, as needed. Contracts would be prepared by GVDC for each participating complex. After further analysis, used oil collection is not proposed for multi -family dwellings at this time because the Tri-County Apartment Association requests that this service not be implemented since it reports that many complexes represented by that organization prohibit car repair and maintenance activities on their premises due to concems for oil spillage and proper cleanup. Instead, residents in multi -family dwellings who wish to recycle their oil will be asked to continue to deliver it for recycling using any of the following alternatives: service stations (eg: Jiffy Lube) that are certified by the California Integrated Waste Management Board (CIWMB) to accept used oil for recycling. Residents will receive, on request, a rebate of $0.04 per quart of oil accepted. Residents may call 1-800-553-2472 to obtain names, addresses and phone numbers of the most convenient centers to deliver their used oil for recycling. the county -wide household hazardous waste turn -in events scheduled in the West Valley jurisdictions three times per year. Residents may also deliver their used oil to any other event scheduled in another jurisdiction in this County as long as they have an appointment. In addition, plans have begun to establish three regional centers in Santa Clara County for residents to deliver their car batteries, used oil, and paints. Tentatively selected sites for the centers are located in Sunnyvale, San Jose, and the South County area. 5. COMMERCIAL CARDBOARD RECYCUNG Cardboard wi 1 continue to be collected from businesses. The cost is based on the number of commercial bins in the jurisdiction. The annualized cost for FY 1994-95 is $87,260. 6. SOUD WASTE MANAGEMENT FUND Implementing residential curbside recycling in February 1990 marked the beginning PAGE 7 MAYOR AND TOWN COUNCIL SUBJECT: PUBLIC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES; C) SOLID WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 of the Town's integrated approach to solid waste management. The Town's Solid Waste Management Program was expanded to include Household Hazardous Waste Collection, Multi -Family Recycling, and Commercial Cardboard Collection. Adoption of AB 939 has resulted in additional requirements to be met by jurisdictions. a. Staff Support Salaries and benefits are charged to the program: .25 FTE Community Services Director and .15 FTE Administrative Secretary. For FY 1994-95, this cost will total $29,000. b. West Valley Cooperative Agreement The West Valley Cities entered into an agreement in November 1990 to establish a cooperative Solid Waste Management program. The program pools resources and avoids duplication of effort. Vera Dahle-Lacaze has been hired through the program. Her primary responsibility is to assist the West Valley Cities with meeting AB 939 requirements. The Town's shared cost for FY 1994-95 is estimated at $35,000. c. AB 939 Source Reduction and Recycling Plans required by the State have been distributed for review. Cost for FY 1994-95 projects is estimated at $34,640. d. Tanner Program The County provides services to meet Hazardous Materials Advisory Committee objectives as outlined in the Town's agreement with the County. Workshops are held, information and referral is provided to businesses and households, public information is disseminated, and regulations are streamlined. The cost for FY 1994-95 is $1,590. e. Household Hazardous Waste The Town participates in a county -wide HHW collection program. Participation in the program meets State requirements and provides residents with a more convenient method for disposing of HHW. Approximately 300 Los Gatos households participate in HHW events annually. The Town allocated $60,000 to the program for FY 1994-95; it is charged approximately $100 for each participating household. f. Recycling Center Costs to operate the recycling center were incorporated into the fund with the Town's FY 1993-94 operating budget. PAGE 8 MAYOR AND TOWN COUNCIL SUBJECT: PUBLIC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 g. Business Services To recover overhead costs including but not limited to office space, staff services (attorney, finance, manager's offices) , the fund is charged a 17.3 percent fee. h. Recycling Fee Staff anticipates a reduction in franchise revenues of about 10 percent. Town's recycling agreement with GVDC allows GVDC to collect a recycling fee on the Town's behalf. This will begin FY 1994-95. C. RATE STRUCTURE FACTORS To encourage recycling Council has adopted a rate schedule for the residential structure in which the charge for each can of refuse is the same. The current rate is $6.65 per can of refuse; this includes all associated recycling costs and a portion of the Town's program. The same policy was used in estimating new refuse collection rates for the educational forum. The estimated residential per -can rate is Attachment 4 to this report. It assumes the current rate structure wherein the same amount is charged for each can. The first column of numbers shows haw the current rate of $6.65 per can is established using 1992 revenue requirements and distributing the dollars over 15,341 cans. The second column calculates the per -can cost at $10.68 using the new revenue requirement and distributing the costs over 15,341 cans. The third column assumes that 80 percent of all residential customers will be paying for only one can of refuse; as a result, the number of cans over which the costs can be distributed is decreased to 9,340, and the estimated per -can rate is $18.00. Better estimates will be presented January 3, 1995, after a Rate Base (budget) is adopted for GVDC. The recommended rate structure will be based on input from the public forum and calls and correspondence to the Town. The structure will: charge more for the second can than the first; have a senior rate for households eligible for and receiving SSI. The rate will be about two-thirds the regular rate; increase side yard, backyard, and hard -to -serve surcharges to a cost recovery rate; Include residential recycling and yard waste collection costs in the refuse rates (spreading the cost over the total number of cans collected in the Town); and allow no discount to residential can customers who do not participate in the recycling program. Staff will also provide an alternative which only charges residents using yard waste collection services for the program. PAGE 9 MAYOR AND TOWN COUNCIL SUBJECT: PUBLIC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES; C) SOUD WASTE MANAGEMENT PROGRAMS AND RATE STRUCTURE FACTORS DATE November 30, 1994 ENVIRONMENTAL ASSESSMENT$: This is not a project as defined under CEQA, and no further action is required. FISCAL IMPACT: The proposed operating budget for FY 1994-95 assumes that all Solid Waste Management costs will be borne by the ratepayers. ATTACHMENTS: 1. Disposal Fees 2. City/Town Sponsored Recycling Services 3. SWM Service Costs Summary 4. Estimated Residential Rates DISTRIBUTION: John Snelham, 247 Old Adobe Road, Los Gatos 95030 Gerard Wen, GVDC, P.O. 573 University Avenue, Los Gatos 95030 Bill Helms, City of Campbell Vera Dahle-Lacaze, Monte Sereno Carolyn Lehr, Monte Sereno Paula Reeve, City of Saratoga NOTE: Report sent to residents and commercial customers that have requested a fact sheet (approximately 450 addresses). ATTACHMENT 1 DISPOSAL FEES 7/1/88 7/1/89 1/1/90 7/1/90 7/1/91 7/1/92 7/1/93 7/1/94 Base Rate: 18.42 19.89 19.89 22.24 24.78 26.60 26.60 26.60 Tipping Fee Surcharges: S.C. County Inspection - .16 .16 .29 .29 .29 S.C. County Planning .07 .15 .15 .15 .15 .15 .22 .29 Eastin Bill .65 .65 .65 .65 .60 .60 AB 939 - .50 .75 1.00 .75 .75 - AB 1220 1.34 S.J. Business Tax - 3.00 3.00 13.00 13.00 13.00 S.J. Inspection Tax - .24 .20 .20 .58 .58 S.J. AB 939 .25 .00 .00 .00 S.C. County AB 939 Fee _ _ _ 1.00 1.00 1.15 Total Surcharges 0.07 .96 1.46 5.08 5.54 15.99 16.15 16.36 Total Per Ton Disposal Costs 18.49 20.85 21.35 27.32 30.32 42.59 42.75 42.96 csd04:A: \Cndrpts\Recycln2. P ro Attachment 2 N -ati d m 2 y 0 a) o 2 =- C c co y 5 a) a) 0{ O N N Y �,,. U a N CO O U N O f0 U y y a) a) m 0 L" " N 0 LO T c a) T 7 7 7 7 7 > ii++ = C a) C .a C C C C C O- V 3 COC T3 -O co L 0 L. C C C C C Ia. 0 d V W E o. o) < < < < W at co) 0 0 0 0 0 d cn ci cb v� to CD a U a d t E 4 al L- dg -o a> o U a7 N coO -0 N a) a) E a) co a) ca fl i 0 a 13 0_ a < < W* 'a -o a a) a) C) C) 7 7 7 7 C C C C C C C C 0 0 0 0 U 0 0 U Businesses 0 a) c a 0 U N a7 .0 c0 0 tr -o a) a) U C a) a) U V -a u 73 V a) a) T - - v 0 7 CD " C C C C C C C .7 CU CD CD 0 CISa a o O a 0.-0 L. C C C C C C 0 0 0 0 0 0 Q Q < < < W 4t c.)U U 0 0 0 C.) .O+ N .(0 c 0 0 O a) O 7 CO CO • la 13 N C 0 CO —I f0 C CO O E O U t0 c0 C V O CO c0 E co N O 0 (7 0 0) 7 a) ro V c`0 U O O O a V) O a) C V N c0 Q .y N N= J 0 0 U W U O o 12 75 v n o CD 0 N 0 >. aI a) D- U O C7 C C C C C C U cc0 n. y tea) 0) 0) M U E N C= 0 0 C C C C C C -Oo a) 0. 'o 'O -o 'a 13 O' a) an d .cE 0 d f0 0 0 0 0 0 0 -0 W co o < Q Q < W m U U) 7 u) co 0 U U 0 0 U U < .c m E m 0) -^ui co Q O_ 0 l0 O a) L N a) O c0ea C 76 t 0- O. O. u (0 O C) O_ -O C .6 C C c0 CO - CO co 0 CD E m cca 0) .0 0. c � a) .a C co cp U O e (0 O c0 O_ O Ul C 0 X (0 Y U E CO CO -V) O O O C C 0 N co E N T c O O C C a) cC0 o — o C (O (0 71 7 C CD 7 —y 0 Q.�L C t0 — - 0) C 7 0) (%a°,) Milk and juice cartons with gabled top Aseptic cartons o 0" .o 0 N_ CO 0 c0 L 13 173 to cnd�as z 0 E a) CO y a C a) 0 no c0 O L L CO cr, C cc) a� o .2-..E. a) o g-y .3 O. E : is > 'E .N',-0 ai co Y m c $ W V 0 c0 O O C 2 Y .0 0 A E G cn m v U L 7 = aci E 743 c a .m 'E m ai n( ayi£ E.0 y E 2-o as • x c C C 0 p 0 CO 0 a c E O .0Q. 0 c0 a) O 0 W 0_ V_7u)73 O Newspaper, including inserts Corrugated Cardboard Steel ("tin") cans and bimetal containers Used Motor Oil Yard Waste (grass clippings, leaves, prunings, Christmas trees, etc.) Christmas trees REVENUE SUMMARY SOLID WASTE MANAGEMENT PROGRAM GVDC Programs Refuse Collection Residential Curbside Multi -family Recycling Yard Waste Collection Commercial Cardboard Collection FY 1994-95 Budgeted Undetermined $196,560 71,395 217,780 54,260 Attachment 3 Page 1 FY 1995-96 Estimates Undetermined $332,620 89,700 552,680 87,270 Town Programs Staff Support 29,000 29,000 W.V. SWM 35,000 35,000 AB939 34,640 34,640 Hhld.Haz. Waste Col. 60,000 60,000 Tanner Program 1,590 1,590 Recycling Center 14,240 14,240 Business Services 30,180 30,180 Recycling Fee 12,500 30,000 Notes: These are expenses, not revenues; expenses for Town Programs reflect the Town's operating budget. However, the recycling fee is a new fee to replace lost franchise revenues. 11-30-94 CSDO4:A:\SOLIDMST\CURRENT.PR1 Attachment 3 Page 2 SOLID WASTE MANAGEMENT PROGRAM: REVENUES BY SECTOR PROGRAMS RESIDENTIAL Refuse Collection Residential Curbside Yard Waste Collection HHW Collection Solid Waste Management COMMERCIAL Refuse Collection Multi -family Recycling Commercial Cardboard Collection Solid Waste Management DROP OFF BOXES Refuse Collection Solid Waste Management TOTAL COSTS CSD04:A:\SOLIDMST\CURRENT .pr 2 ESTIMATED MONTHLY COST PER CAN ATTACHMENT 4 #cans 15,341 15,341 9,340 1992 current 2/1/95 Refuse Collection $1,050,000 $5.69 $5.70 $9.37 Residential Curbside Recycling $102,200 to $332,620 $0.56 $1'.81 $2.97 ($1.06 to $3.43/hsld) Yard Waste Collection $0 to $522,680 ($5.39/hsld) Household Hazardous Waste $0 $2.84 $4.67 $40,000 to $60,000 $0.21 $0.33 $0.54 ($0.41 to $0.62/hsld) SWM Program $35,000 to $50,000 $0.19 $0.27 $0.45 ($0.36 to $0.52/hsld) TOTAL $6.65 $10.95 $18.00 C SD 15 A:\memos\chart.can