STAFF REPORT TO THE CITY COUNCIL. The Mayor and Members of the City Council

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2 STAFF REPORT TO THE CITY COUNCIL DATE: Regular Meeting of September 9, 2014 TO: SUBMITTED BY: SUBJECT: The Mayor and Members of the City Council Jeff Brown, Interim Public Works Director Plastic Bag Ordinance Supplemental Report RECOMMENDED ACTION: Second reading and adopt an ordinance adding Chapter 11 to Title 5 of the Hercules Municipal Code regulating the use of plastic carryout bags and recyclable paper carryout bags and promoting the use of reusable bags within the city DISCUSSION: The Ordinance has been changed to reflect the following changes that the City Council made at the August 26, 2014 Council meeting. Section 5D1 has been changed to be ten cents ($0.10) Section 5D2 was removed and the remaining items in the section have been renumbered. The reporting requirement has been changed to once per year. The dates for first reading and adoption have been corrected. ATTACHMENTS: Attachment 1 Ordinance September 9, 2014 Page 1

3 STAFF REPORT TO THE CITY COUNCIL DATE: Regular Meeting of August 26, 2014 TO: SUBMITTED BY: SUBJECT: The Mayor and Members of the City Council Jeff Brown, Interim Public Works Director Plastic Bag Ordinance Supplemental Report RECOMMENDED ACTION: Waive the first reading and hold a Public Hearing on an ordinance adding Chapter 11 to Title 5 of the Hercules Municipal Code regulating the use of plastic carryout bags and recyclable paper carryout bags and promoting the use of reusable bags within the City, and consider proposed modifications to the draft ordinance FISCAL IMPACT OF RECOMMENDATION: The City may avoid unknown future costs due to litter control and complying with the Municipal Regional Permit as a result of the Ordinance. BACKGROUND: When this matter was last presented by staff at the March 11, 2014 Council meeting, Councilmember Romero asked whether the proposed fee that the retail establishment collects from the customer for each paper bag can be remitted to the City, rather than collected and spent by the retailer. Councilmember Romero suggested that if the City collected the fee, the City could use the fee to fund certain specific programs, such as an educational campaign, and the enforcement of the violations and penalties provisions of the ordinance. Consideration of the proposal was deferred in order to allow staff and the City Attorney to address whether Councilmember Romero s proposed modification would be considered a tax requiring voter approval. DISCUSSION: According to the City Attorney, beginning with Proposition 13 in 1978, several state laws have been passed that impose the requirement for voter approval of special, general, and property related August 26, 2014 Page 1

4 taxes. Proposition 218 in 1996 put in place a requirement for majority approval for general taxes and property owner approval for assessments and property related fees and charges. Proposition 26, passed in 2011, is intended to reclassify as taxes many of the regulatory fees imposed to mitigate the adverse health, environmental, and other societal effects of regulated activities, so that voter approval is now required for many such regulatory fees. The City Attorney has noted that in the Proposition 26 Implementation Guide issued in April 2011, the League of California Cities specifically cautioned against a city collecting a carryout paper bag fee. To the extent any portion of the collected fee is used to cover other costs besides reasonable regulatory costs, such use of the fee may be deemed a special tax requiring 2/3 voter approval under Cal. Constitution Art. XIIIC, Sec. 2(d). Given that staff considers the regulatory cost of enforcing the ordinance to be minimal, the collection of the fee by the City would impose an administrative burden that outweighs the benefit to the City. Legally, the burden would be on the City to show that the fees were not spent in a manner that would trigger Prop. 26 voter approval requirements. The League s Implementation Guide further notes that, [i]f such a fee were restructured as a minimum price for bags to be charged and retained by the retailer, Proposition 26 may not apply. (Proposition 26 Implementation Guide, League of California Cities, April 2011, page 31.). In line with this assessment, and to minimize potential for a Prop. 26 challenge, the City Attorney recommends against the city collecting the fee. Allocating How the Fee is Spent. In recent communications with staff and the City Attorney, Councilmember Romero has also suggested that the City designate how much should be spent on each of the designated activities to be funded by the fees collected. The draft ordinance includes the following provision: All monies collected by a Retail Establishment under this ordinance will be retained by the Retail Establishment and may be used for any of the following purposes: a. costs associated with complying with the requirements of this ordinance, (10%) b. actual costs of providing Recycled Paper Carryout Bags (40%), or c. costs associated with a Retail Establishment's educational materials or education campaign encouraging the use of reusable bags (10%), if any. d. fund reusable bags give-aways during limited-time store promotions (40%). In red is the percentage of the fee that Councilmember Romero would like to see allocated to that activity. According to the City Attorney, the listed activities provided in the draft ordinance are suggestive, and due to concerns that mandating how much of the fee must be spent on a particular activity may trigger Proposition 26 requirements, the allocation to the various activities should remain suggestive. The City can designate how it would prefer the monies be spent, and provide target percentages for the retailer, but this should be a recommendation and not a requirement. We August 26, 2014 Page 2

5 can proceed with specific target percentages as long as they are recommended and not mandated, per the City Attorney s advice. Limiting the Carry-out Bag Fee. Councilmember Romero would also like to set the carryout bag fee at $.05 and remove the provision for an increase to $.10 after two years. This is a policy call, as there is no legal requirement for increasing the initial $.05 fee to $.10 after two years. This is a policy matter to be determined at the discretion of the City Council. Mr. Lejon with Recycle More has indicated he will be present at the meeting to explain why the model ordinance which has been adopted in San Pablo, Richmond and El Cerrito, Was drafted with the $.05 to $.10 transition in order to encourage consumers to significantly change their behavior and consistently use reusable bags. Reporting Requirements. Councilmember Romero has also requested that the retailers should be required to submit compliance reports twice a year, rather than once a year, and that staff prepare a proposed reporting form for informational purposes. We can proceed with a reporting schedule of twice a year and a draft reporting Form is provided for informational purposes as Attachment 2. ENVIRONMENTAL CONSIDERATIONS: If adopted, the Single-Use Bag Ordinance would reduce single-use bag litter on Hercules streets and public spaces, reduce the presence of single-use bags in storm drains and creeks (the City is required to eliminate trash in stormwater per the Municipal Regional Stormwater Permit), and reduce waste management inefficiencies attributed to single-use bags. CONCLUSION: Should the Council agree to incorporate some or all of the recommendations from Councilmember Romero, the attached draft ordinance can be modified by motion of the Council to include those changes. ATTACHMENTS: Attachment 1 Ordinance Attachment 2 Draft Reporting Form August 26, 2014 Page 3

6 STAFF REPORT TO THE CITY COUNCIL DATE: Regular Meeting of March 11, 2014 TO: SUBMITTED BY: SUBJECT: The Mayor and Members of the City Council Jeff Brown, Interim Public Works Director Plastic Bag Ordinance RECOMMENDED ACTION: Waive the first reading and hold a Public Hearing on an ordinance adding Chapter 11 to Title 5 of the Hercules Municipal Code regulating the use of plastic carryout bags and recyclable paper carryout bags and promoting the use of reusable bags within the City. FISCAL IMPACT OF RECOMMENDATION: The City may avoid unknown future costs due to litter control and complying with the Municipal Regional Permit as a result of the Ordinance. DISCUSSION: Californians use 19 billion single-use plastic bags a year and throw away an estimated 600 plastic bags per second. Litter pollution on streets and in gutters, storm drains, creeks, and San Francisco Bay is a major environmental quality and compliance concern in Hercules and the entire Bay Area. Certain components of litter including single-use bags have been identified locally, regionally, and state-wide as being particularly problematic. Single-use bags, especially those made of plastic, are difficult to keep from becoming litter, are unsightly when littered, and can be challenging to remove from the environment once littered. Over 79 cities and counties in California have adopted single-use bag ordinances in order to reduce bag litter and promote environmental sustainability. Current single-use bag ordinances typically prohibit the distribution of single-use plastic bags in retail establishments at the point of sale and require retail establishments to charge the customer a fee on single-use paper bags. The Cities of El Cerrito, Richmond and San Pablo adopted a single-use bag ban that started January 1, March 11, 2014 Page 1

7 The City of Hercules is a member of the West Contra Costa Integrated Waste Management Authority (RecycleMore) comprised of the Cities of El Cerrito, Hercules, Pinole, Richmond and San Pablo and Contra Costa County. In 2011, the Hercules City Council declared support for a regional approach to the development and potential implementation of a single-use bag ordinance. RecycleMore took the lead in developing a model ordinance and commissioning an Environmental Impact Report (EIR) that could be utilized by RecycleMore s member agencies. This provided for a coordinated, cost-effective effort that leveraged the partnership of member agencies under RecycleMore and will lead to greater environmental benefit under an ordinance regional in scope. RecycleMore finalized the model single-use bag ordinance in late 2012 and completed and certified the EIR in The EIR detailed many areas in which regional implementation of the model ordinance would have a beneficial environmental impacts, while not causing any significant environmental impacts on the whole. The RecycleMore Board of Directors has recommended the model ordinance for individual adoption by member agencies. Member agencies have the option to modify portions of the model ordinance to make its provisions appropriate for their respective communities. Proposed Single-Use Bag Ordinance The model ordinance was adapted from Alameda County, the County of Los Angeles and City of San Jose ordinances and includes the following: Prohibit the distribution of single-use plastic bags in retail establishments at the point of sale for all retail establishments except restaurants and non-profit charitable reusers. This includes department stores, clothing stores, liquor stores, book stores, specialty stores, drug stores, convenience stores, etc. Restaurants, take-out food establishments, or any other businesses that receive their revenue primarily from the sale of food cooked or otherwise prepared at the establishment would be exempt from the Ordinance. Requires retail establishments to charge all customers a minimum of five cents ($0.05) for each paper bag distributed at the point of sale; Two years after the ordinance is enacted, require retail establishments to charge all customers ten cents ($0.10) for each paper bag distributed at the point of sale; Require that paper bags distributed to customers by retail establishments contain at least 40 percent post-consumer recycled content. Provide for a penalty to the business owner of $100 for the first violation, $250 for the second violation within one year, and $500 for the third and any additional violation within one year as infractions of the Hercules Municipal Code. Exempt from the provisions of the Ordinance plastic or paper bags without handles that are used by customers or the retail establishment to protect or contain raw meat, fresh produce, March 11, 2014 Page 2

8 food prepared at the establishment, or other goods that must be protected from moisture, damage, or contamination, and that are typically placed inside a carryout bag at the point of sale. Enforcement of the Ordinance is expected to be largely complaint based and will be conducted via administrative citation. The City Manager may designate enforcement officers to issue administrative citations. Penalties for non-compliance start at $100 for the first violation and can be up to $500 per violation. Staff proposes the following timeline: March 11, 2014: First reading of the ordinance by City Council. March 25, 2018: Second reading of the ordinance and adoption by City Council. September 25, 2014: Ordinance implementation. ENVIRONMENTAL CONSIDERATIONS If adopted, the Single-Use Bag Ordinance would reduce single-use bag litter on Hercules streets and public spaces, reduce the presence of single-use bags in storm drains and creeks (the City is required to eliminate trash in stormwater per the Municipal Regional Stormwater Permit), and reduce waste management inefficiencies attributed to single-use bags. ATTACHMENTS: Attachment 1 Ordinance March 11, 2014 Page 3

9 Attachment 1 ORDINANCE NO. AN ORDINANCE OF THE CITY OF HERCULES ADDING CHAPTER 11 TO TITLE 5 OF THE HERCULES MUNICIPAL CODE REGULATING THE USE OF PLASTIC CARRYOUT BAGS AND RECYCLABLE PAPER CARRYOUT BAGS AND PROMOTING THE USE OF REUSABLE BAGS WITHIN THE CITY OF HERCULES NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERCULES DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Chapter 11 is hereby added to Title 5 of the Hercules Municipal Code. CHAPTER 11. TITLE 5. REGUULATIONS ON THE USE OF PLASTIC CARRYOUT BAGS AND RECYCLABLE PAPER CARRYOUT BAGS SECTION 2. DEFINITIONS When used in this article the following terms shall mean or include: a. Carryout Bag means a bag other than a Reusable Bag provided at the check stand, cash register, point of sale or other point of departure for the purpose of transporting food or merchandise out of the establishment. Carryout Bags do not include bags without handles provided to the Customer to transport produce, bulk food or meat from a produce, bulk food or meat department with in a store to the point of sale. b. "Customer" means any person purchasing goods from a Retail Establishment. c. Nonprofit Charitable Reuser means a charitable organization, as defined in Section 501(c)(3) of the Internal Revenue Code of 1986, or a distinct operating unit or division of the charitable organization, that reuses and recycles donated goods or materials and receives more than fifty percent (50%) of its revenues from the handling and sale of those donated goods or materials. d. "Operator" means the person in control of, or having the responsibility for, the operation of a Retail Establishment, which may include, but is not limited to, the owner of the Retail Establishment. e. "Person" means any natural person, firm, corporation, partnership, or other organization or group however organized. f. "Plastic Bag" means any bag made predominantly of plastic derived from either petroleum, ethylene derived from natural gas, or a biologically-based source, such as corn or other plant sources, which is provided to a Customer at the point of sale. Plastic bags includes: compostable and biodegradable bags but does not include Reusable

10 Attachment 1 Bags, Produce Bags, or Product Bags. g. Public Eating Establishment means a restaurant, take-out food establishment, or any other business that receives 90% or more of its revenue from the sale of Prepared Food to be eaten on or off its premises. h. "Postconsumer Recycled Material" means a material that would otherwise be destined for solid waste disposal, having completed its intended end use and product life cycle. "Postconsumer Recycled Material" does not include materials and by-products generated from, and commonly reused within, an original manufacturing and fabrication process. i. Prepared Food means foods or beverages which are prepared on premises by cooking, chopping, slicing, mixing, freezing, or squeezing, and which require not further preparation to be consumed. Prepared Food does not include any raw, uncooked meat product or fruits or vegetables which are chopped, squeezed or mixed. j. "Produce Bag" or "Product bag" means any bag without handles used exclusively to carry produce, meats, or other food items to the point of sale inside a Retail Establishment or to prevent such food items from coming into direct contact with other purchased items. k. "Recyclable" means material that can be sorted, cleansed, and reconstituted using available recycling collection programs for the purpose of using the altered form in the manufacture of a new product. "Recycling" does not include burning, incinerating, converting, or otherwise thermally destroying solid waste. l. "Recycled Paper Bag" means a paper bag provided at the check stand, cash register, point of sale, or other point of departure for the purpose of transporting food or merchandise out of the establishment and that meets all of the following requirements: (1) contains no old growth fiber, (2) is one hundred percent (100%) recyclable overall and contains a minimum of forty percent (40%) Postconsumer Recycled Material; (3) displays the words Reusable and Recyclable" in a highly visible manner on the outside of the bag; (5) and displays the percentage of Postconsumer Recycled Material used; and (6) the name and location of the manufacturer. m. "Reusable Bag" means a bag with handles that is specifically designed and manufactured for multiple reuse and meets all of the following requirements: (1) has a minimum lifetime of 125 uses, which for purposes of this subsection, means the capability of carrying a minimum of 22 pounds 125 times over a distance of at least 175 feet;; (3) is machine washable or capable of being cleaned and disinfected; (4) does not contain lead, cadmium, or any other heavy metal in toxic amounts as defined by applicable State and Federal standards and regulations for packaging or reusable bags (5) if made of plastic, is a minimum of at least 2.25 mils thick. n. Retail Establishment means any commercial establishment that sells perishable and

11 Attachment 1 nonperishable goods including, but not limited to, clothing, food and personal items directly to the Customer; and is located within or doing business within the geographical city limits of the City of Hercules. Retail Establishments does not include Public Eating Establishments or Nonprofit Charitable organizations. o. Single-Use Carryout Bag means a bag other than a Reusable Bag provided at the check stand, cash register, point of sale or other point of departure for the purpose of transporting food or merchandise out of the establishment. Single-Use Carryout Bags do not include bags without handles provided to the Customer to transport produce, bulk food or meat from a produce, bulk food or meat department with in a store to the point of sale. SECTION 3. PLASTIC CARRYOUT BAGS PROHIBITED a. No Retail Establishment shall provide a Single-Use Carryout Bag to a Customer at the check stand, cash register, point of sale or other point of departure for the purpose of transporting food or merchandise out of the establishment except as provide in this Ordinance. b. This prohibition applies to bags provided for the purpose of carrying away goods from the point of sale and does not apply to Produce Bags or Product Bags. SECTION 4. PERMITTED BAGS All Retail Establishments shall provide or make available to a Customer only Recycled Paper Carryout bags or reusable bags for the purpose of carrying away goods or other materials from the point of sale, subject to the terms of this ordinance. Nothing in this ordinance prohibits Customers from using bags of any type that they bring to the Retail Establishment themselves or from carrying away goods that are not placed in a bag, in lieu of using bags provided by the store. SECTION 5. REGULATION OF RECYCLED PAPER CARRYOUT BAGS a. Any Retail Establishment that provides a Recycled Paper Carryout Bag or Reusable Bag to a Customer must charge the Customer a minimum charge of 5 cents ($0.05) for each bag provided, except as otherwise provided in the ordinance. b. Two years after the ordinance is enacted a Retail Establishment may make available for sale to a Customer a Recycled Paper Bag for a minimum charge of ten cents ($0.10) c. All Retail Establishments must indicate on the Customer receipt the number of Recycled Paper Carryout Bags provided and the total amount charged for the bags. d. All monies collected by a Retail Establishment under this ordinance will be retained by the Retail Establishment and may be used for any of the following purposes:

12 Attachment 1 1. Costs associated with complying with the requirements of this ordinance, 2. Actual costs of providing Recycled Paper Carryout Bags, or 3. Costs associated with a Retail Establishment's educational materials or education campaign encouraging the use of reusable bags, if any. 4. Fund reusable bags giving-aways during limited-time store promotions. e. All Retail Establishments must report to the City Manager (or Other Designee), on an annual basis, the total number of Recycled Paper Carryout Bags provided, the total amount of monies collected for providing Recycled Paper Carryout Bags, and a summary of any efforts a Retail Establishment has undertaken to promote the use of reusable bags by Customers in the prior year. Such reporting must be done on a form prescribed by the City Manager, and must be signed by a responsible agent or officer of the Retail Establishment confirming that the information provided on the form is accurate and complete. All reporting must be submitted no later than 45 days after the end of each calendar year. f. If the reporting required is not timely submitted by a Retail Establishment, such Retail Establishment shall be subject to the fines set forth. SECTION 6. USE OF REUSABLE BAGS a. All Retail Establishments must provide Reusable Bags to Customers, either: 1. For sale; or 2. At a minimum charge of 10 cents ($0.10) per bag during limited-time store promotions. 3. Exemptions would be made for sanctioned reusable bag giveaway events that are intended to promote the use of reusable bags not exceeding a total of 90 days in any consecutive 12-month period. b. Each Retail Establishment is strongly encouraged to educate its staff to promote reusable bags and to post signs encouraging Customers to use reusable bags. SECTION 7. EXEMPT CUSTOMERS A Retail Establishments may provide at the point of sale, free of charge, either reusable bags or Recycled Paper Carryout Bags or both, at the Retail Establishment's option, to any Customer participating either in the California Special Supplemental Food Program for Women, Infants, and Children pursuant to Article 2 (commencing with Section ) of Chapter 1 of Part 2 of Division 106 of the Health and Safety Code or in the Supplemental Food Program pursuant to Chapter 10 (commencing with Section 15500) of Part 3 of Division 9 of the Welfare and Institutions Code, the State Department of Social Services Food Stamp program, other

13 Attachment 1 government-subsidized purchase programs for low-income residents. SECTION 8. ENFORCEMENT AND VIOLATION-PENALTY a. The City Manager and/or his/her agent have primary responsibility for enforcement of this ordinance. The City Manager is authorized to promulgate regulations and to take any and all other actions reasonable and necessary to enforce this ordinance, including, but not limited to, investigating violations, issuing fines and entering the premises of any Retail Establishment during business hours. Other City staff may assist with this enforcement responsibility by entering the premises of a Retail Establishment as part of their regular inspection functions and reporting any alleged violations to the City Manager. b. If the City Manager determines that a violation of the ordinance has occurred, he/she will issue a written warning notice to the Operator of a Retail Establishment that a violation has occurred and the potential penalties that will apply for future violations. c. Any Retail Establishment that violates or fails to comply with any of the requirements of the ordinance after a written warning notice has been issued for that violation shall be guilty of an infraction. d. If a Retail Establishment has subsequent violations of the ordinance that are similar in kind to the violation addressed in a written warning notice, the following penalties will be imposed and shall be payable by the Operator of the Retail Establishment to the City of Hercules: 1. A fine not exceeding one hundred dollars ($100.00) for the first violation after the written warning notice is given; 2. A fine not exceeding two hundred dollars ($200.00) for the second violation after the written warning notice is given; or 3. A fine not exceeding five hundred dollars ($500.00) for the third and any subsequent violations after the written warning notice is given. e. A fine shall be imposed for each day a violation occurs or is allowed to continue. f. All fines collected pursuant to the ordinance shall be deposited in the Solid Waste Management Fund to assist the department with its costs of implementing and enforcing the requirements of the ordinance. g. Any Retail Establishment Operator who receives a written warning notice or fine may request an administrative review of the accuracy of the determination or the propriety of any fine issued, by filing a written notice of appeal with the City Manager no later than 30 days after receipt of a written warning notice or fine, as applicable. The notice of appeal must include all facts supporting the appeal and any statements and evidence,

14 Attachment 1 including copies of all written documentation and a list of any witnesses that the appellant wishes to be considered in connection with the appeal. The appeal will be heard by a hearing officer designated by the City Manager. The hearing officer will conduct a hearing concerning the appeal within 45 days from the date that the notice of appeal is filed, or on a later date if agreed upon by the appellant and the City of Hercules, and will give the appellant 10 business a days prior written notice of the date of the hearing. The hearing officer may sustain, rescind, or modify the written warning notice or fine, as applicable, by written decision. The hearing officer will have the power to waive any portion of the fine in a manner consistent with the decision. The decision of the hearing officer is final and effective on the date of service of the written decision, is not subject to further administrative review, and constitutes the final administrative decision. SECTION 9. SEVERABILITY If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision will not affect the validity of the remaining portions of the ordinance. The CITY COUNCIL hereby declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of this ordinance would be subsequently declared invalid. SECTION 10. NO CONFLICT WITH FEDERAL OR STATE LAW Nothing in this ordinance is intended to create any requirement, power or duty that is in conflict with any federal or state law. PUBLICATION AND EFFECTIVE DATE This Ordinance shall be published in accordance with applicable law, by one or more of the following methods: a. This Ordinance shall be published in accordance with applicable law, by one or more of the following methods: 1. Posting the entire Ordinance in at least three (3) public places in the City of Hercules, within fifteen (15) days after its passage and adoption; or 2. Publishing the entire Ordinance at least once in the West County Times, a newspaper of general circulation published in the County of Contra Costa and circulated in the City of Hercules, within fifteen (15) days after its passage and adoption; or 3. Publishing a summary of the Ordinance prepared by the City Attorney in the West County Times and posting a certified copy of the entire Ordinance in the office of the City Clerk at least five (5) days prior to the passage and adoption, and a second

15 Attachment 1 time within fifteen (15) days after its passage and adoption, along with the names of those City Council Members voting for and against the Ordinance. This Ordinance shall go into effect six (6) months after the date of its passage and adoption. THE FOREGOING ORDINANCE was first read at a regular meeting of the Hercules City Council on the twenty-sixth day of August 2014, and was passed and adopted at a regular meeting of the Hercules City Council on the ninth day of September 2014, by the following vote of the Council: AYES: NOES: ATTEST: ABSTAIN: ABSENT: Myrna L. de Vera, Mayor Margaret S. Roberts Administrative Services Director/City Clerk

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