6/10/2015 Item #10C Page 1

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1 MEETING DATE: June 10, 2015 PREPARED BY: Bill Wilson, Management Analyst DEPT. DIRECTOR: Glenn Pruim DEPARTMENT: Public Works CITY MANAGER: Lawrence A. Watt, Interim SUBJECT: PUBLIC HEARING AND CONSIDERATION OF RESOLUTION APPROVING SOLID WASTE COLLECTION RATES RECOMMENDED ACTION: Conduct a Public Hearing, and if the final tabulation of written protest votes does not represent a majority of property owners/customers, adopt Resolution Approving Solid Waste Collection Rates. STRATEGIC PLAN: Organizational Efficiency and Effectiveness FISCAL CONSIDERATIONS: If approved, the average residential customer s monthly bill will increase by $0.16. Residential customers subscribing to the lower volume (35-gallon container) service will see a $0.11 monthly increase. Commercial rates will increase according to the level of service (less than 1% on average). If the new rates are approved, revenue from franchise fees paid to the City by EDCO is anticipated to increase by approximately $4,259 in Fiscal Year 2016 (from $425,906 to $430,165). BACKGROUND: The City s Solid Waste Franchise Agreement with EDCO Waste and Recycling Services (EDCO) establishes the methodology for establishing rates for residential and commercial solid waste collection. On March 17, 2015, as required under terms of the Franchise Agreement, EDCO notified the City of an increase in the Consumer Price Index and Disposal Fee, and requested a rate increase effective July 1, 2015 (Attachment 1). The complete list of proposed rates was included with this letter. On April 17, 2015, in accordance with Proposition 218 requirements, notification of the proposed increase to solid waste collection rates was mailed to 18,097 property owners and trash customers in 6/10/2015 Item #10C Page 1

2 the City of Encinitas (Attachment 2). Property owners and customers opposed to the proposed rate increase were directed to submit written protests to the City Clerk. If written protests from a majority of property owners (9,049) are not received, the rate increase shall be considered for approval by the City Council. As of June 1, 2015, one valid written protest letter had been received. A final tabulation of protests received will be provided at the Public Hearing at the June 10, 2015 City Council meeting as protests will be accepted by the Clerk in the Council Chambers through the end of the Public Hearing. ANALYSIS: Solid waste collection rates are established annually. In accordance with the City s Solid Waste Franchise Agreement with EDCO, Solid Waste Collection Service Rates may only be increased because of landfill disposal fee increases, cost of living increases or because of extraordinary circumstances. EDCO s last rate increase was in July, The City s Solid Waste Collection Service rates have three components: the base rate, the disposal fee and the Household Hazardous Waste (HHW) fee. Adjustments to the disposal fee and the base rate are being requested at this time. No change to the HHW fee is proposed. Adjustments to the base rate are based on changes in the Consumer Price Index (CPI). As specified in the Franchise Agreement, the CPI adjustment is based upon the Los Angeles-Anaheim-Riverside Index for All Urban Consumers for the previous twelve month period (December to December of each year). The December 2013 Index was and the December 2014 Index was , a change of points in the Index (0.73%). The CPI adjustment is applied to the base rate only. The disposal fee increase is calculated separately from the CPI adjustment. This increase is determined following provisions contained in the Regional Solid Waste Association (RSWA) Disposal Agreement, of which the City is a member agency. Effective July 1, 2013, the disposal fee for solid waste originating in the City of Encinitas and hauled by EDCO was $45.79 per ton. Effective July 1, 2014, the disposal fee increased to $46.28 per ton, an increase of $.49 per ton or 1.07%. In accordance with provisions in the RSWA Disposal Agreement, the disposal fee will not increase July 1, EDCO did not request an increase in rates effective July 1, This increase is being applied to the disposal fee component of the rate effective July 1, The following tables show the current and proposed monthly Solid Waste Collection Service Rates for the three most common levels of service. If approved, this rate increase will be effective on July 1, Gallon Residential Cart Current Proposed Base Rate $ 9.89 $ 9.97 Disposal $ 2.73 $ 2.76 Fee HHW Fee $.21 $.21 Total $ $ Change $.11/month 6/10/2015 Item #10C Page 2

3 95-Gallon Residential Cart 3-Yard Bin Commercial (1x/week) Current Proposed Base Rate $ $ Disposal $ 4.19 $ 4.23 Fee HHW Fee $.21 $.21 Total $ $ Change $.16/month Current Proposed Base Rate $ $ Disposal Fee $ $ HHW Fee $.33 $.33 Total $ $ Change $ 0.88/month ENVIRONMENTAL CONSIDERATIONS: The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a project under Section 15378(b)(5) of CEQA Guidelines. The action involves an organizational or administrative activity of government that will not result in the direct or indirect physical change in the environment. ATTACHMENTS: 1. EDCO Notification of Rate Increase 2. Proposition 218 Notice of Public Hearing 3. Resolution Approving Solid Waste Collection Rates 6/10/2015 Item #10C Page 3

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10 City of Encinitas Proposed Solid Waste Collection Service Monthly Rates Effective Date: July 1, 2015 The following tables show the current and proposed monthly Solid Waste Collection Service Rates for the three most common levels of service. Your service level may not be reflected here. 35-Gallon Residential Cart Current Proposed Base Rate $ 9.89 $ 9.97 Disposal Fee $ 2.73 $ 2.76 HHW Fee $.21 $.21 Total $ $ Change $0.11/month 95-Gallon Residential Cart Current Proposed Base Rate $ $ Disposal Fee $ 4.19 $ 4.23 HHW Fee $.21 $.21 Total $ $ Change $ 0.16/month 3-Yard Bin Commercial (1x/week) Current Proposed Base Rate $ $ Disposal Fee $ $ HHW Fee $.33 $.33 Total $ $ Change $ 0.88/month Consumer Price Index Calculation Previous CPI (December 2013) Current CPI (December 2014) Change points Percentage Change 0.73% City of Encinitas Office of the City Clerk 505 South Vulcan Avenue Encinitas, CA Notice of Public Hearing On Solid Waste Collection Service Rate Increase June 10, :00 PM Encinitas City Hall Council Chambers 505 South Vulcan Avenue Encinitas, CA /10/2015 Item #10C Page 10

11 Notice of Public Hearing NOTICE IS HEREBY GIVEN pursuant to Article XIIID of the California Constitution (Proposition 218) that the City of Encinitas will hold a Public Hearing on June 10, 2015 at 6:00 p.m. at 505 South Vulcan Avenue, Encinitas, California in the City Council Chambers to consider a proposed increase in Solid Waste Collection Service Rates for City of Encinitas customers. This mailing serves as notice for the proposed July 1, 2015 Solid Waste Collection Service Rate increase. Public Hearing Information The purpose of the hearing is to consider all written protests against the proposed increase to the rates and charges to the parcel for which you are shown as owner or customer of record. Written protests may be submitted by mail to the Office of the City Clerk, 505 South Vulcan Avenue, Encinitas, CA Written protests will also be accepted in person at the public hearing, so long as they are received prior to the conclusion of the public comment portion of the public hearing. All protests must be written, contain the original signature of the property owner or customer of record and provide a description of the property (address and/or Assessor Parcel Number). Only one written protest per address will be accepted. Protests sent by , facsimile or other electronic means will not be accepted. Oral comments at the public hearing will not qualify as formal protests unless accompanied by a written protest. At the conclusion of the public hearing, the City Council will receive a final tabulation of all written protests received by the City Clerk. If a majority of written protests from property owners and customers of record is not received, the rate increase may be approved by the City Council as specified in the City s Solid Waste Franchise Agreement. Explanation of Solid Waste Collection Service Rate Increase Solid waste collection rates are established annually. These services are provided in the City of Encinitas by a private contractor (EDCO) under an exclusive franchise agreement. The contractor, under the terms of their agreement with the City, collects, transports, processes and disposes of all solid waste, recyclables and yard waste which is generated or accumulated within the City. Solid Waste Collection Service Rates may only be increased because of landfill disposal fee increases, cost of living increases or because of extraordinary circumstances. The contractor s right to adjust the Solid Waste Collection Service Rate is contingent upon the contractor providing written notice containing a revised schedule of rates to the Director of Public Works. The Director of Public Works is required to review the proposed change and the reasons for the change with the contractor. The contractor has provided this notice to the City and the proposed rate increase has been reviewed and confirmed by the Director of Public Works. If approved by the City Council, the new rates will be effective on July 1, Rates are calculated in accordance with the rate formula established in section 8.3(A) of the franchise agreement. The rate formula has two components. They are the Disposal Fee and the Consumer Price Index (CPI) Adjustments. The Disposal Fee Adjustment is determined by provisions contained in the Regional Solid Waste Association (RSWA) Disposal Agreement, of which the City of Encinitas is a member agency. Effective July 1, 2015, the disposal fee for solid waste originating in the City of Encinitas and hauled by EDCO will increase from $45.79 to $46.28 per ton (1.07%). Effective July 1, 2015, the CPI Adjustment is 0.73%. The effect of this formula on the three most common levels of service is detailed on the reverse side of this notice. For residential customers, the proposed rate adjustment, if approved, amounts to an increase of $0.11 per month for the 35-gallon container and $.16 per month for the 95-gallon container, an increase of less than 1 percent. A complete list of proposed rates for all levels of service will be available for public review prior to the public hearing. Solid waste collection rates last increased July 1, Questions? If you have questions about the proposed Solid Waste Collection Service Rate increase, please call /10/2015 Item #10C Page 11

12 RESOLUTION NO A RESOLUTION OF THE CITY OF ENCINITAS CITY COUNCIL APPROVING SOLID WASTE COLLECTION RATES WHEREAS, on April 25, 1996, the City entered into a Solid Waste Franchise Agreement ( Agreement ) with Mashburn Waste and Recycling Services, Inc., to provide residential, commercial and industrial trash and recycling collection services; WHEREAS, in 1998, ownership of Mashburn Waste and Recycling Services was transferred to EDCO Waste and Recycling Services, Inc.; WHEREAS, Section 8 of the Agreement authorizes an annual rate review and specifies the formula used to calculate rate changes; WHEREAS, in a letter dated March 17, 2015, EDCO Waste and Recycling Services, Inc. has requested an increase in the residential and commercial solid waste collection rates to be effective July 1, 2015; WHEREAS, Proposition 218 was adopted in November 1996 and amended the California Constitution by adding Articles XIII (C) and (D), establishing procedures and requirements for imposing or increasing existing, property-related fees and charges; WHEREAS, a public hearing must be held no less than 45 days after mailing of written notice to the record owner of each identified parcel upon which the fee or charge will be imposed; WHEREAS, if written protests against the proposed fee or charge are presented by a majority of owners of identified parcels, the public agency shall not impose the fee or charge; WHEREAS, on April 17, 2015, the City of Encinitas mailed a notice of a public hearing regarding the proposed solid waste collection rates to all affected property owners and customers, pursuant to Section 6(a) of Article XIII(D) of the California Constitution ( Proposition 218 ); WHEREAS, a public hearing was held on June 10, 2015, on the proposed solid waste collection rates; WHEREAS, at the public hearing held on June 10, 2015, the City of Encinitas considered all protests against the solid waste collection rates; WHEREAS, at the public hearing held on June 10, 2015, the written protests against the solid waste collection rates received by the City Clerk did not constitute a majority of owners of identified parcels. ATTACHMENT 3 6/10/2015 Item #10C Page 12

13 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Encinitas as follows: 1. The above recitals are true and correct. 2. The City of Encinitas City Council approves the solid waste collection rates as set forth in Exhibit A, to become effective July 1, 2015 and remain in effect until further adjustments made by City Council action. PASSED AND ADOPTED by the City Council of the City of Encinitas this 10th day of June, 2015, by the following roll call vote: AYES: NAYS: ABSENT: ABSTAIN: ATTEST: Kristin Gaspar, Mayor Kathy Hollywood, City Clerk ATTACHMENT 3 6/10/2015 Item #10C Page 13

14 City of Encinitas Residential and Commercial Monthly Trash Rates (effective July 1, 2015) RESIDENTIAL Service Level Current Rate 35 gallon cart $ gallon cart $19.75 Yard Stop A $31.08 Yard Stop B $37.41 Yard Stop C $47.10 COMMERCIAL MULTI-FAMILY FLOWER GROWERS Service Level Current Rate Service Level Current Rate Service Level Current Rate 2 Yard Bin 2 Yard Bin 2 Yard Bin 1 x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ Yard Bin 3 Yard Bin 3 Yard Bin 1 x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ Yard Bin 4 Yard Bin 4 Yard Bin 1 x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ Yard Bin 5 Yard Bin 5 Yard Bin 1 x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $1, Yard Bin 6 Yard Bin 6 Yard Bin 1 x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $ x week $1, x week $1, x week $ x week $1, Roll-Off Containers $237.63* * Plus Disposal Fee $46.28/ton RESOLUTION EXHIBIT A 6/10/2015 Item #10C Page 14