2010050303 - Proposed Refues Collection Rate Changes.~pW N OF
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tas c os COUNCIL AGENDA REPORT
DATE: April 22, 2010
MEETING DATE: 5/3/10
ITEM NO:
TO: MAYOR AND TOWN COUNCIL
FROM: GREG CARSON, TOWN MANAGER O ~`
_~~~
SUBJECT: PROPOSED REFUSE COLLECTION RATE CHANGES
RECOMMENDATION:
For information, only. Any feedback on this item should be directed to Council Member Rice,
the Town's representative on the West Valley Solid Waste Management Authority Board.
BACKGROUND:
The purpose of this report is to provide Council with background information regarding refuse
collection rate increases to be considered by the West Valley Solid Waste Management
Authority at its May 6, 2010 meeting. Council Member Rice will be voting on the issue as the
Town's representative on the Board; he has requested that this report be placed on the Council
agenda in order to provide Council an opportunity to inform his vote.
In the early 1980's, the four West Valley cities of Campbell, Los Gatos, Monte Sereno, and
Saratoga entered into separate, identica120 year contracts with Green Valley Disposal Company
(GVDC) for the collection of solid waste in their communities. Each of those contracts required
that a 10% franchise fee be paid to the cities for the life of those agreements. In addition to the
franchise fees, GVDC also collected solid waste surcharge fees on behalf of each of the cities.
These solid waste surcharge fees provided fiinding for staff costs of solid waste program
management, AB 939 diversion activities, contracts for street and parking lot sweeping, solid
waste collection in public areas, and a small amount for street maintenance related to the impact
of collection vehicles on the street system. In 1997, these GVDC contracts were assigned to the
newly created West Valley Solid Waste Management Authority (WVSWMA) to administer on
behalf of the four West Valley cities.
Upon expiration of the original contracts and extensions, WVSWMA entered into a new seven
year collection contract with West Valley Collection and Recycling, LLC, (WVCR) to
PREPARED BY: Regina A. Fa
Community S s Director
Attorney
ty Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: PROPOSED REFUSE COLLECTION RATE CHANGES
APRIL 22, 2010
commence on March 1, 2007. The new contract includes a provision that prescribes the franchise
fee percentages to be paid monthly to each of the cities in addition to individual street
maintenance vehicle impact fees. The contract also allows. the franchise fees and street
maintenance vehicle impact fees to be changed at any tune by the Authority or by any of the
cities.
WVSWMA and the cities determined that under the new contract the solid waste surcharge fees
would be replaced by increased franchise fees. The current franchise fee of 16.5% was
established in 2007 with the new WVCR collection contract and provides approximately
$1,000,000 annually to Los Gatos' General Fund, which covers the costs of all services formerly
funded by the previous contract's combination of franchise fees and solid waste surcharge fees.
DISCUSSION:
The WVCR contract provides that collection rates for each fiscal year of the contract be
proposed annually by WVCR and ratified by the WVSWMA Board. The Board action is usually
taken at the May quarterly meeting in order that the new rates can be effective on July 1.
Projected increased funding requirements for mandated solid waste collection,.. diversion, and
recycling efforts have prompted discussions between the West Valley Cities Solid Waste
Technical Advisory Committee (TAC) and WVSWMA Executive Director Scott Hobson
regarding a potential increase in solid waste franchise fees for FY 2010/11.
In FY 2010/11 and beyond, Santa Clara County city staffs will be increasingly involved in
aggressive solid waste program development,. including mandatory commercial recycling,
expanded household hazardous waste collection, possible food waste collection, plastic bag. and
polystyrene bans, Municipal Regional Permit. storm water trash removal mandates,. and. a zero
waste action plan.
A summary of existing collection rates for a typical residence in each of the cities in Santa. Clara
County, together with existing solid waste franchise fee rates in those cities is shown on
Attachment 1. Los Gatos'' monthlyrate of $19.65 for weekly collection of a single 35 gallon
container, with. unlimited recycling and yard waste collection, is substantially below the
countywide average of $24.55 for equivalent service. Bay Area franchise fees currently range
from 10% to 35% with most falling in the range of 10-20% (Attachment 2.) The proposed rate,
including an increase in the franchise fee to 19%, would bring the monthly rate for weekly refuse
collection of a 35 gallon can from $19.65 to $20.67, still far below the countywide average.
Executive Director Scott Hobson's report to the WVSWMA Board at the May 6, 2010 meeting
will include all contractually required rate component adjustments together with a recommended
franchise fee of 19% for all of the four West Valley cities.- The WVSWMA Agreement with
WVCR allows each of the cities to have different franchise fee percentages if desired. The
proposed action was considered by the Campbell and Saratoga City Councils; Council Members
supported the franchise fee adjustment.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: PROPOSED REFUSE COLLECTION RATE CHANGES
APRIL 22, 2010
CONCLUSION:
Based on the extensive discussions between the West Valley Cities Solid Waste Technical
Advisory Committee (TAC) and WVSWMA Executive Director Scott Hobson, staff
recommends that Los Gatos support his recommendation that the franchise fee for all four cities
be raised to 19%. This move would keep Los Gatos residents' solid waste collection fees below
the County average, while raising some additional funds for the Town to work on the many new
solid-waste related mandates and programs, such as mandatory commercial recycling, expanded
household hazardous waste collection, possible food waste collection, plastic bag and
polystyrene bans, Municipal Regional Permit storm water trash removal mandates, and a zero
waste action plan. Without substantial redistribution of resources from existing programs, the
Town would not be able to achieve any of these goals without additional funding, such as would
be realized through an adjustment of the franchise fee.
ENVIRONMENTAL ASSESSMENT:
The recommended action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
Collection rate adjustments for FY 2010/11 will include contractually required landfill disposal
increases (estimated at $0.03/household), CPI-based collection cost increases (estimated at
$0.28/household), a $0.03/household increase in the vehicle impact fee, and a $0.04 franchise fee
resulting from these contractual increases totaling an estimated $0.38/household for a typical
single family home. The estimated single family rate would adjust from $19.65 to $20.04
without any other changes.
A franchise fee adjustment would add approximately $0:30/household for each 1% increase to
the current fees. Scott Hobson's recommended franchise fee adjustment to 19% would increase
that typical single family collection rate from $20.00 to $20.67, still substantially below the
average in Santa Clara County. The new rate would increase Los Gatos' franchise fee receipts
by approximately $150,000, from the current year estimate of approximately $1 million to
$1,150,000.
Attachments:
Attachment 1 -Summary of Existing Collection Rates
Attachment 2 -Current Franchise Fee Rates in Other Bay Area Cities
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Attachment 1
SANTA CLARA COUNTY CITI>=5
3/02/2010 SOLIi~ WASTE COLLECTON RA~"ES/ FRANCISE FEES
EXISTING/MO EXISTING
RES 35 GAL FRAN.FEE
CAMPBELL $19.5$ 16,50%
CUPERTINO $20.23 12%
GILROY $26.22 9.50%
LOS ALTOS $28.11 10%
LOS ALTOS HILLS $33.77 10%
LOS GATOS $19.65 16.50%
MILPITAS $30.11 12%
MORGAN HILL $24.03 15.50°/n
MOUNTAIN VIEW $17.55 20%
PALO ALTO $31.00
SAN JOSE $27.50
SANTA CLARA $17.05 10°/n
SARATOGA $21.37 16.50%
SUNNYVALE $23.79
AVERAGE $24, 55 13.50°/n
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