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DATE:
TO:
FROM:
SUBJECT:
MEETING DATE: 9/17/07
ITEM NO:
COUNCIL AGENDA REPORT
September 7, 2007
MAYOR AND TOWN COUNCIL
PAMELA JACOBS, INTERIM TOWN MANAGER P,*1 COUNCIL DISCUSSION REGARDING WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD CONSIDERATION OF HARD-TO-
SERVICE RATES EFFECTIVE JULY 1, 2008
RECOMMENDATION:
Council discussion regarding West Valley Solid Waste Management Authority Board
consideration of hard to service rates effective July 1, 2008.
BACKGROUND:
Collection Contract
The Town contracts for solid waste collection and disposal services through the West Valley
Solid Waste Management Authority (Authority), a joint powers entity consisting of the following
four member agencies: Town of Los Gatos, City of Campbell, City of Monte Sereno, and City
of Saratoga. The Authority Board of Directors includes one Council representative from each
agency; Council member Glickman is the Los Gatos Board member, and Council member
Wasserman is the alternate. Authority staff services are provided by HFH Consultants.
Report Purpose
The purpose of this report is to provide Council with information about the Authority's process
for setting collection service rates for hard-to-service customers to be effective July 1, 2008, and
to ask Council to provide feedback to the Town's Authority representative regarding the rate
structure. The Authority is scheduled to consider hard-to-service customer rates at its November
1 meeting.
PREPARED BY: Regina A` Community Services Director
Reviewed by: Assistant Town Manager Town Attorney
Clerk Administrator Finance Community Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: COUNCIL DISCUSSION REGARDING HARD-TO-SERVICE RATES
September 7, 2007
DISCUSSION:
Hard to Service Rates
As Council has discussed at previous meetings, the Authority executed a contract with West
Valley Collection and Recycling (WVC&R) for collection services that began March 1, 2007.
The Authority's contract with Green Valley Disposal Company expired at the end of February.
One of the issues the Authority has been managing during the transition in solid waste service
providers is the increase in residential accounts designated hard-to-service. Green Valley used
such a designation and charged a premium to serve these accounts, which were primarily hillside
residences - though no official definition was ever given. WVC&R has defined hard-to-service
as any location that cannot be served by its standard-size collection vehicle (28 cubic yards of
capacity) and must instead be served by a smaller collection vehicle (14 cubic yards of
capacity). Generally, these smaller vehicles must be used because of the width of the access
road, turning space available, or overhanging trees or wires which would interfere with the
automatic collection arm. A premium is charged to serve these residences, as the smaller
collection vehicle must make twice the number of trips to the landfill each day to empty out,
thereby increasing the cost of service on a per-account basis.
WVC&R initially designated 1,054 Los Gatos accounts as hard-to-service; in comparison, Green
Valley had about 510 hard-to-service Los Gatos accounts. Town and WVC&R staff received
many calls from residents contesting their hard-to-service status. In response, WVC&R sent out
supervisors, including General Manager Paul Nelson, to work individually with residents to
determine if a standard-size collection vehicle could indeed be used to service their home.
Working creatively, WVC&R was able to remove the hard-to-service designation from 290
residences. The net increase is about 254 hard-to-service accounts.
Hard to Service Rate Setting Process
The West Valley Solid Waste Management Authority has held two special meetings to review
this issue. At its June 21 meeting, the Authority Board reviewed a report from the Executive
Director on the history of hard-to-service accounts in the West Valley cities and options for
addressing concerns expressed by customers designated as hard-to-service under the new
contract. The options presented ranged along a continuum from doing nothing to eliminating the
hard-to-service designation altogether. The Board also took testimony from twenty-eight
residents from Los Gatos, Monte Sereno, and Saratoga. The Board unanimously approved a
resolution (1) reducing the hard-to-service rates in Los Gatos, Monte Sereno, and Saratoga by
$2.00 per month retroactive to March 1, 2007, and (2) directing the Executive Director to
evaluate the impact of eliminating the hard-to-service rate on regular residential customers' rates
in each jurisdiction.
At its second special meeting held on August 21, the Board received an informational report on
the impact of eliminating the hard-to-service rate (Attachment 1). Based on that report and public
testimony, the Board agreed to agendize the matter of hard-to-service rates for its regular
meeting on November 1. In the meantime, West Valley Collection & Recycling continues to
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: COUNCIL DISCUSSION REGARDING HARD-TO-SERVICE RATES
September 7, 2007
work with individual residential customers to make physical arrangements, where possible, to
allow for collection of their solid waste using the regular collection vehicle at the regular
collection rate.
Rate alternatives
The Agency's Executive Director recommends that the rate structure adopted by the Board stay
in place; with this strategy, the additional cost of serving customers designated as hard to service
will continue to be borne by those ratepayers. Although other options exist, the alternative being
considered by the Board is to allocate the cost of this service to all ratepayers.
Information regarding rates, the number of customers, and rate change impacts are included in
the attached report prepared by the Agency's Executive Director. The number of hard-to-service
accounts has decreased slightly since the report was written. As a result, if the Board chooses to
spread the hard-to-service premium over all customers, the increase will be slightly less than
what the report estimates. The number of hard-to-service Los Gatos accounts currently stands at
about 760; this is an increase of about 250 accounts compared to accounts under the previous
service contract.
The rate for weekly collection service (32 gallon can) is $17.88/month. The hard to service rate
is $23.50. Customers qualifying as low income are eligible for a discounted rate of $21.51.
These rates are within the range of rates charged by neighboring cities for similar services.
CONCLUSION:
The Authority Board will consider whether to leave the existing rate structure in place or to
spread the additional costs of serving hard-to-service customers among all rate payers. This
issue will be considered by the Board at its regular meeting scheduled for November 1, 2007.
Council discussion and any additional public input is requested by the Authority member to help
guide his vote.
ENVIRONMENTAL ASSESSMENT:
This action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
No fiscal impact is anticipated. Franchise fees received from WVC&R will change only if the
total service fees collected by the company change.
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: COUNCIL DISCUSSION REGARDING HARD-TO-SERVICE RATES
September 7, 2007
Attachments:
West Valley Solid Waste Management Authority Board Memo: Hard-to-Service Accounts and
Rates
2. Emails from community members
Distribution:
Scott Hobson, Executive Director, West Valley Solid Waste Management Authority
Paul Nelson, General Manager, West Valley Collection and Recycling
Marva Sheehan, HFH Consultants
Kurt Voester, Los Gatos Resident
Richard Ruh, Los Gatos Resident
Attachment 1
WEST VALLEY
SOLID WASTE MANAGEMENT
AUTHORITY
Date: August 14, 2007
AGENDA ITEM No. 5
MEETING DATE: A UGIisT 21. Z=
AGENDA REPORT
To: West Valley Solid Waste Management Authority Board
From: Executive Director
Subject: Hard-to-Service Accounts and Rates
RECOMMENDED ACTION
Discuss eliminating the hard-to-serve collection rates by increasing the regular
collection rates.
DISCUSSION
At a Special Meeting on June 21, the Board reviewed a report summarizing the history
of hard-to-serve (HTS) accounts in the West Valley Cities, comparing the HTS rates to
others in the San Francisco Bay Area, and outlining alternative approaches to the
current rate system. The Board also heard testimony from 28 residents regarding the
HTS classification and rates. At the meeting, the Board directed West Valley Collection
& Recycling (WVCR) to reduce the HTS rate by $2.00 per month retroactive to March 1,
2007 and asked the Executive Director to evaluate the impact of eliminating the HTS
rate on the regular residential collection rates in each jurisdiction.
HTS Accounts Update
At the June 21 meeting, I reported that for its first billing, WVCR had 1,458 HTS
customers, or 311 more than anticipated in the RFP. Because WVCR converted some of
these FITS customers to regular service subsequent to the first billing, WVCR had a
total of 1,413 HTS customers as of June 21. Since that meeting, WVCR has converted or
agreed to convert an additional 138 customers (including all of the Los Gatos Woods
development) to regular service, leaving a total of 1,275 HTS customers remaining. On
a net basis, there remain 128 more HTS customers now than were reported by GVDC
under the previous contract.
WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT
Page 2of 4 August 21, 2007
Eliminating the HTS Rate Classification
Residential collection rates are calculated by WVCR by first determining the amount of
revenue required to be collected from each jurisdiction based on the number of
customers in each jurisdiction. The revenue required is then allocated among each
jurisdiction's rate payers in accordance with the rate policies approved for that
jurisdiction. Thus, if the HTS rate classification were eliminated, the total cost of
serving residential customers in each jurisdiction, both regular and currently FITS,
would be spread over all residential customers in that jurisdiction. The effect would be
to decrease the rate for the current HTS customers and increase the rate for all regular
customers.
Tables 3-5 show the rate impact in the three cities with HTS customers assuming that
rates are adjusted at the beginning of the rate year. (Because of the rate methodology
described above, there is no impact on Campbell residents.) If rates were adjusted
mid-year to be retroactive to the beginning of the rate year, the increases would be
larger than those shown in the tables.
Table 3
Rate Impact on
35-Gallon Regular Collection Rate
Table 4
Rate Impact on
65-Gallon Regular Collection Rate
WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT
Page 3of 4 August 21, 2007
Table 5
Rate Impact on
95-Gallon Regular Collection Rate
Recommendation
I recommend that the Board leave the current HTS rates in place, based on the
following:
1. There is a cost basis for the rate differential - that is, the HTS accounts cost
more to service.
2. The rates of over 17,000 residential customers would be increased by 1.6% to
2.8% to provide a rate reduction to 1,275 customers, most of whom have
been paying the HTS rate for many years.
Nevertheless, should the Board wish to eliminate the HTS rate differential, I
recommend that the new rates be effective July 1, 2008, in connection with the next
contractual rate adjustment. When rates were adjusted on March 1, rate payers were
told that the rates would be effective through June 30, 2008. Contractual disposal fee
increases were not passed through to the rate payers on July 1 (but will be paid from
jurisdiction funds) in an effort to hold to this representation. To increase rates mid-
year would be contrary to this pledge.
DOCUMENTS ATTACHED
None.
WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT
Page 4of 4 August 21, 2007
FISCAL IMPACT
No impact on Authority funds.
L. Scott Hobson
Executive Director
Attachment 2
To: <cpage@saratoga.ca.us>
Cc: <cwright@montesereno.org>; <sglickman@losgatosca.gov>;
<donb@cityofcampbell.com>
Sent: Saturday, September 01, 2007 2:02 PM
Subject: West Valley Solid Waste Management Authority
Dear Board Members,
One of the requirements for a healthy community is that its garbage and
trash is picked up regularly. We no longer have a choice whether to use
this service or not; each household has a responsibility to the community
at large to dispose of its garbage weekly and to pay its share of the
cost. I don't expect to pay more than my neighbor nor should he expect to
pay more than me. If I live on a wide street why should I pay less for
this important community function than my neighbor who happens to live on
a narrow street?
I believe each household should pay the same amount for garbage service.
I urge you to eliminate the surcharge for those areas deemed "hard to
serve".
Thank you.
Kurt Voester
14251 Burns Way
Saratoga, CA
From: "Wendy Palmer and Richard Ruh"
To: <sglickman@losgatosca.gov>
Sent: Tuesday, August 28, 2007 9:31 PM
Subject: Garbage Whiners!
Hi Steve,
One solution for the garbage rate increase whiners is to produce less
garbage!
Recycle and get a smaller garbage can than they had before.
We've got two adults and two LG HS students in our house. Our garbage
bill went down with the new service since we now can have a shorty 20
gallon half garbage can. We pay less than we used to pay for the old 32
gallon service. (I haven't seen any other red button handle 20 gallon
cans in town, yet, however.)
We never had more than a grocery bag full of garbage, with recycling and
a compost pile. We've been subsidizing all the garbage slobs these years
and finally have a chance to be rewarded for polluting less.
No, I don't care to subsidize the polluters and people who live in
exclusive estates.
Let people pay their fair share.
Richard Ruh