HomeMy WebLinkAboutReso 2019-128RESOLUTION NO. 2019-128
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A REQUEST BY THE CITY’S
FRANCHISED WASTE COLLECTION SERVICES PROVIDER,
REPUBLIC SERVICES, TO INCREASE SERVICE FEES FOR
SOLID WASTE AND RECYCLING SERVICES, BASED ON
EXCEPTIONAL CIRCUMSTANCES
WHEREAS, in 2014 the City and Republic Services entered into an amended and restated
solid waste and recycling franchise agreement to provide collection services to all residential and
commercial properties in Chula Vista (the “Agreement”); and
WHEREAS, the Agreement permits Republic to charge fees for its service, subject to
maximum rates established in the contract, requires Republic to pay the City a 20% franchise fee
and an additional 5% AB939 fee that is used for recycling and waste reduction programs and
education, both of which Republic may pass -through to customers, and provides that Republic
may request City approval of a fee increase due to extraordinary circumstances beyond Republic’s
control; and
WHEREAS, recent Chinese government policies to reduce the amount of recyclable
material the country purchases have created a slowdown in global recycling markets which in turn
has increased processing costs and decreased recyclable material prices; and
WHEREAS, China introduced a new policy referred to as the National Sword law which
significantly restricts and limits recyclable material imports into their nation; and
WHEREAS, the effects of the National Sword law were particularly felt in recycling
markets in the western United States due to the reliance on Pacific export markets; and
WHEREAS, Republic Services is the City’s franchise solid waste hauler and said company
provided supporting information that demonstrated a net revenue of $58.56 per ton of recyclable
material in June 2014 to a net cost of $16.68 per ton in February 2019; and
WHEREAS, as a result of the above circumstances, Republic Services has requested City
approve a rate increase of 6.1%, pursuant to the “extraordinary circumstances” provision of the
Agreement; and
WHEREAS, the proposed rate increase would be subject to the 20% franchise fee and 5%
AB939 fee that Republic is required to pay to the City and Republic has proposed that these fees
be passed-through to rate payers, making the total proposed rate increase 7.6% on al l ratepayers;
and
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Resolution No. 2019-128
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WHEREAS, the proposed rate adjustment in the amount of 7.6% per service account would
cover additional costs of processing recyclable materials as well as loss of material value from sale
of recyclable material; and
WHEREAS, the rate adjustment will allow Republic Services to continue providing strong
recycling programs in Chula Vista and help the City comply with State of California recycling
requirements; and
WHEREAS, under Section 7.4 of Republic Services’ current contract, the entity is entitled
to annual rate increases for commercial and residential ratepayers in accordance with regional
Consumer Price Index standards; and
WHEREAS, City staff will continue to monitor recycling markets to determine if changes
in the recycling industry warranting a rate reduction.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista,
that it:
1. Approves Republic’s request for a rate increase to a maximum of 7.6% to be imposed
on Republic’s Chula Vista ratepayers, conditioned on the City retaining the ability to
reduce the rate when it determines that market conditions warrant a reduction; and
2. Directs staff to continue to monitor recycling industry market conditions , conduct a
quarterly review of the rates in light of the then-current market conditions, and return
to City Council when market conditions warrant a reduction in the rates; and
3. Directs City staff to proceed with conducting the proceedings necessary prior to the
implementation of the proposed rate increases.
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Presented by Approved as to form by
Eric C. Crockett Glen R. Googins
Director of Economic Development City Attorney
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 18th day of June 2019 by the following vote:
AYES: Councilmembers: Diaz, Galvez, McCann, Padilla, and Casillas Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
Mary Casillas Salas, Mayor
ATTEST:
Kerry K. Bigelow, MMC, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Kerry K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2019-128 was duly passed, approved, and adopted by the City Council at a regular
meeting of the Chula Vista City Council held on the 18th day of June 2019.
Executed this 18th day of June 2019.
Kerry K. Bigelow, MMC, City Clerk
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