HomeMy WebLinkAbout2021/09/14 Trash Rate increase item
v . 0 03 P a g e | 1
September 14, 2021
ITEM TITLE
Waste Collection Rate Adjustment: Approving a Rate Adjustment for Waste Collection in Order to Cover
the Costs of Compliance with Organic Waste Reduction Regulations (SB 1383)
Report Number: 21-0145
Location: Citywide
Department: Economic Development
Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California
Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no
environmental review is required.
Recommended Action
Adopt a resolution approving Republic Service’s request for a rate adjustment for combined collection of
food waste and other organic waste and directing staff to conduct the proceedings necessary prior to the
implementation of the adjustment.
SUMMARY
Senate Bill 1383 (Lara, Chapter 395, Statutes of 2016), was signed into law establishing methane emissions
reduction targets of short-lived climate pollutants (SLCP). This law requires all jurisdictions in the State to
establish new organic waste collection programs that prevent the disposal of organic waste into landfills.
Senate Bill 1383 enhances the State of California’s greenhouse gas reduction efforts. The decomposition of
organic waste in landfills creates methane gas emissions, a powerful greenhouse gas which is up to 80 times
more harmful to the atmosphere than carbon dioxide.
The City has worked with the City’s franchise solid waste hauler, Republic Services, to review and evaluate
an appropriate rate adjustment to residential and commercial service fees in order to the implement a food
and organic waste collection program that will meet the requirement of SB 1383. The proposed increase is
subject to City Council approval, and a public hearing pursuant to Proposition 218.
ENVIRONMENTAL REVIEW
2021/09/14 City Council Post Agenda Page 69 of 428
P a g e | 2
The Director of Development Services has reviewed the proposed activity for compliance with the California
Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under
Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment;
therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
Recent California Legislation
In September 2016, Governor Brown signed into law SB 1383 (Lara, Chapter 395, Statutes of 2016),
establishing a statewide methane emissions reduction target to reduce emissions of short-lived climate
pollutants (SLCP). Actions to reduce short-lived climate pollutants are essential to address the many impacts
of climate change on human health, especially in California's most at-risk communities, and on the
environment.
SB 1383 establishes a target to achieve a seventy-five percent (75%) statewide reduction in the disposal of
organic waste in to landfills by 2025. The law requires all cities and counties in the State of California to
establish a new collection program that will divert all organic waste from landfill disposal, establish an edible
food rescue programs, procure large amounts of organic waste, conduct extensive education, outreach,
monitoring and enforcement on non-compliant entities. Annual reporting will be submitted to the
Department of Resources Recycling and Recovery (CalRecycle) who will oversee compliance with SB1383.
Methane emissions resulting from the decomposition of organic waste in landfills is a significant source of
greenhouse gas (GHG) emissions. Organic materials accounts for a significant portion of California's overall
waste stream. Approximately twerty percent (20%) of methane gas emissions in California come from
landfills. SB 1383 will help to reduce the amount of organic waste Chula Vista residents and business send to
the landfill resulting in emission reductions that aligns with the City’s Zero Waste Plan and Climate Action
Plan. Like most jurisdictions in the state, Chula Vista sends a large amount of organic waste to the landfill.
According to a 2015 Waste Characterization Study conducted almost seventy five percent (75%) of Chula
Vista’s waste stream is compostable and nearly twenty nine percent (29%) of this waste stream is food waste.
(Attachment 1 – SB1383 regulation)
Preparing for Compliance
The City of Chula Vista has had a yard and garden waste collection service since 1990. The material collected
is chipped and screened and sold as mulch, however food and other organic waste has not been accepted in
the current program. To Comply with SB 1383 the City will need to require the addition of a food waste
collection system for both residents and businesses. In anticipation of SB 1383 the City partnered with
Republic Services in 2014 on a two-year pilot program to collect and process food waste. The two-year
program contained a residential component of approximately 600 homes and a business component with
participation by grocery stores, restaurants, and cafeterias.
The two-year pilot program provided data and information that has helped the City and Republic to
overcome various challenges before launching the proposed large-scale program being proposed in January
2021/09/14 City Council Post Agenda Page 70 of 428
P a g e | 3
2022. Lessons learned during the pilot program included collection and processing methods, equipment
needs, educational outreach approaches and preliminary cost estimates for the implementation of a
permanent program.
For the City to comply with SB 1383, Republic Services will need to implement a program to collect food
waste from Chula Vista residents and businesses and then process this waste stream into compost. The
launch of a food waste collection system will require an initial cost of over $11 -million-dollars that will
include, but not limited to the following:
1. The residential component will allow the placement of food waste in yard waste carts/bins. The
collected material will be transported to a newly constructed composting facility at the Otay Landfill
where preliminary screening and grinding will allow for size reduction. The reduced material will
then be placed directly in the composting process or mixed with other feedstocks to create the ideal
composted product. In addition, residents will also be able to place in soiled paper products, like
paper plates, paper cups, paper towels, napkins and food-soiled cardboard products like pizza boxes.
2. Food waste from businesses will be collected separately and will be transported to a pre-processing
facility at the Otay Landfill which will reduce contamination and adjust the particle size, moisture
content, and carbon/nitrogen ratio to optimal conditions for composting. Compost feedstocks will
range from 100 percent yard waste to a 50/50 blend of yard waste and other organic waste. Republic
Services composting operations at the Otay landfill will use the GORE® covered aerated static pile
(CASP) composting system. This system provides the best available environmental control
technology and utilizes forced aeration and a semipermeable membrane cover to selectively
influence the composting process. The composting process involves three phases that will take
approximately eight weeks to complete.
3. Republic Services will purchase and deliver approximately 15,000 green carts to Chula Vista
residents who currently do not have a green waste cart at their homes, purchase six additional
collection trucks, and 3,000 new commercial collection bins.
4. Republic will employ a Recycling Coordinator to provide program education to residents and
businesses in both English and Spanish.
5. SB1383 requires the City to procure up to 13,920 tons of compost per year to meet the procurement
requirement. Republic will provide compost to the City free of charge which will help the City to meet
its procurement requirements of SB1383. The compost will be used i n all City approved projects,
such as compost give-a-way events, in City parks, medians and open spaces.
6. One kitchen food caddie will be provided, upon request, to all residential customers including multi-
family dwellings.
7. Republic will offer $50,000 per year in endowments to food rescue organizations in the City of Chula
Vista to help with edible food rescue requirements of SB1383.
8. Expansion of the “oops” tag program to commercial generators will reinforce proper recycling and
provide education on contamination.
9. In compliance with SB 1383’s container contamination minimization and reporting standards
Republic will provide yearly route reviews for prohibited container contaminants and will perform
waste composition studies at least twice per year in two distinct seasons of the year.
2021/09/14 City Council Post Agenda Page 71 of 428
P a g e | 4
10. Republic and the City will deploy an extensive education campaign to familiarize residents and
businesses on the new program requirements and education of all self-haul generators in the City of
Chula Vista through promotional materials at the Otay Landfill.
In addition, Republic has launched a new digital platform known as "RISE" (Republic Integrated Solution
Experience) which modernizes operations, streamline tasks and offers greater visibility of services rendered
on their customer portal. This new system allows Republic to capture and document issues at the point of
service.
Proposed rate adjustment for residential ratepayers
The Franchise Agreement (Agreement) between the City of Chula Vista (City) and Republic Services
(Republic) was approved by the Chula Vista City Council in September 2014. This agreement grants Republic
the exclusive rights to collect and dispose of solid waste and recyclable material from residential and
commercial properties within the City’s jurisdictional boundaries. The Agreement also allows Republic to
charge fees for waste collection services subject to maximum rates established in the contract, requires
Republic to develop collection programs to help the City comply with new waste reduction and recycling
laws and allows Republic to request City approval for service fee increases to cover program development
costs. Per the Agreement, Republic is required to pay the City a 20% franchise fee and an additional 5% AB
939 fee that is used for waste reduction and recycling education programs. Operationally, the Agreement
provides Chula Vista residents additional collection services at no additional cost. These services include:
Weekly large and bulky collection for up to 10 items,
Two (2) landfill passes per year,
Two (2) yard waste passes per year,
Missed collection service,
A most-favored nation rate price protection
Residential rates not to exceed a 90% County average, and
Cart or bin replacements.
Additionally, the contract requires Republic to provide the following services at no costs:
• Trash, yard waste and recyclable materials collection for all City facilities,
• Disposal for all public works-type projects,
• Collection service for designated public place containers, and
• Trash and recycling collection services annually for two large-venue public events of the City’s choosing.
Republic is also required to maintain equipment (vehicles) in optimal and assigned conditions, respond to
requests and complaints in a timely period and ensure that the City always complies with all disposal and
waste diversion directives required by State law. The term of the current Agreement is ten years, which
terminates on June 30, 2024, and provides an ability to extend the Agreement by an additional seven (7)
years on the same terms and conditions.
Republic Services proposal for residential customers includes an increase in cost that varies depending on
the level of service being provided. Residents with the smallest trash cart (32-gal) will see a monthly service
fee increase of $2.79 per month, residents with the middle size cart (64-gal) will see a rate increase of $3.61
per month and those with the largest cart (96-gal) will see a rate increase of $4.26 per month.
2021/09/14 City Council Post Agenda Page 72 of 428
P a g e | 5
Republic Services also proposes to remove the $1.50 per month green waste for residents who currently rent
a green waste cart from Republic. Moving forward the green cart rental fee will not be charged to customers.
Currently 43,000 commercial customers rent a green waste cart from Republic.
Example: Residents who rent a green waste cart and have a 32-gal trash cart will see an increase of $2.79
minus the omitted green waste cart rental fee of $1.50. Therefore, when deleting the rental fee these
residents would experience a net increase of $1.29.
The table below shows the proposed rate adjustment compared to the service level at each home:
A comparison of rate increases from various local cities was performed for the middle 64 -gal residential
trash rate. The proposed rate adjustment in Chula Vista as shown below is 8% less than the average increase
of other local cities.
Comparison rate increase for Chula Vista: $3.61 (64-gal trash cart service)
Encinitas $4.86 National City $3.00
La Mesa $3.64 Poway $4.42
Lemon Grove $3.74 Market Average $3.93
Proposed rate adjustment for multifamily properties.
Multi-family properties pay for as-needed trash collection services in addition to being required to pay a
monthly per-dwelling unit fee for recycling and yard waste services. The per-unit fee covers the costs of
unlimited recycling and yard waste collection services, yet it is divided into two categories. For complexes
only needing recycling collection they are charged a $2.83 per unit fee. Complexes needing both recycling
and yard waste collection services are charged a per unit rate of $4.63. This fee structure is unique to Chula
Vista and was created to ensure compliance with recycling regulation.
Republic Services is proposing to adjust the monthly per-unit rate for both recycling and yard waste
collection from $4.63 to $5.74 to provide food waste and organics waste collection. Most multifamily
properties in Chula Vista only pay the $2.83 per unit rate for recycling services as most opt to have their
landscapers haul away their yard waste. The City and Republic staff will work with multifamily property
owners and managers to adjust services that fit their needs while also complying with the requirement of
SB1383. Space constraint compliance waivers can be issued and are allowed per SB1383 regulation.
New service and rate for commercial food waste generators
Food waste collection for Chula Vista businesses will be provided as a new collection service. This new
service will be offered in two container sizes (64-gal carts and 2-yard bins). Not every business will be
required to have food waste collection service. SB 1383 allows for minimum generation and space constraint
compliance waivers to be issued. The program is designed to capture heavy generators of food waste and
other organic waste to have a prescribed collection service in addition to their current trash and recycling
Current rate for each level of service Proposed adjustment New rate plus
increase
32-gal trash cart service $18.37 per month $2.79 $21.16 per month
64-gal trash cart service $23.79 per month $3.61 $27.40 per month
96-gal trash cart service $28.01 per month $4.26 $32.27 per month
*Rate includes collection of trash, mixed recycling, and mixed organics.
2021/09/14 City Council Post Agenda Page 73 of 428
P a g e | 6
collection services. City and Republic staff will visit each identified food and organic waste generator in the
City to work with business owners and managers to add the appropriate service and look for ways to adjust
current services that will create greater efficiency and control costs. An example of an identified heavy
generator would be a restaurant with a high frequency of trash collection services. In this example there may
be an opportunity to add food waste collection while reducing their trash collection services. Staff will also
take the opportunity to provide educational resources to restaurants on the new program’s procedures and
requirements.
Proposed new service for commercial food waste collection:
Food waste per container quantity and service frequency proposed pricing
Container Quantity 64-gal commercial food waste
cart cost
2-yrd commercial food
waste bin cost
1 container $99.49 $187.51
2 containers $147.40 $257.08
3 containers $195.32 $326.65
4 containers $243.23 $396.22
5 containers $291.14 $465.80
6 containers $339.05 $535.37
Service collection Frequency
1 day per week $99.49 $187.51
2 days per week $198.98 $375.01
3 days per week $397.96 $750.03
4 days per week $795.92 $1,500.05
5 days per week $1,591.85 $3,000.10
City staff reviewed the proposed rate changes, verified compliance with state laws, and ensured equitable
value for each level of service being provided. The review was performed factoring in the twenty five percent
(25%) franchise fee that Republic Services pays the City so that the analysis would be an equitable
comparison to fees from other cities. These cities were chosen as a sampling of other cities serviced by EDCO
waste, the waste collection contractor that services the most cities in the County. Staff also analyzed the rate
proposal and determined that it is reasonable and not in excess of what is necessary to cover the costs for
the new services to process food waste and other organic waste into compost. The analysis determined that
the rates proposed by Republic Services are comparable to other programs but are still 8-9% below the
average of the local cities analyzed. The table below shows the comparison
Comparison of proposed commercial food waste rate collected 1 x per week while factoring in a
25% franchise fee
64-gal food waste cart collected
1X per week
2-yrd food waste bin collected 1X
per week
Chula Vista $99.49 $187.51
Encinitas $109.92 $202.39
La Mesa $111.27 $198.37
Lemon Grove $109.87 $208.95
National City $111.70 $212.72
Poway $106.19 $191.00
Market Average $109.79 $194.24
Compared to newly
proposed Chula Vista rate
9% less 8% less
2021/09/14 City Council Post Agenda Page 74 of 428
P a g e | 7
Staff recommends approval of the proposed rate adjustments for Chula Vista residents and businesses. The
new program will make it possible for Chula Vista to comply with the jurisdictional requirements of SB 1383,
will assist the State reach its methane reduction target and implement the City’s climate action goals.
Program cost increases for this purpose are not unique to Chula Vista. The League of California Cities
conducted a study in December 2020 and determined that out of the 194 cities that responded, 92% of them
anticipate a solid waste and recycling rate increase in the next three years. Seventy Percent (70%) of survey
participants anticipate an increase of up to a 20% rate increase to comply with SB 1383.
(Attachment 2 - League of CA Cities Survey of waste service costs).
Approval of the resolution will trigger a Proposition 218 hearing process that will have to be conducted
before the proposed rate adjustment goes into effect. That process will include sending notice of the
proposed increase to all property owners, Republic’s Chula Vista customers of record and conducting a public
“majority protest” hearing at least 45 days later, in accordance with the requirements of Proposition 218. If
less than a majority of affected property owners protest the increase, it will go into effect.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and
consequently, the real property holdings of the City Council members do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware and has not been informed by any City Council member, of any other fact
that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
If approved, the proposed action will generate approximately $555,000 during the second half of the fiscal
year in additional revenue to the general fund from collected franchise fees.
ONGOING FISCAL IMPACT
If approved, the proposed action will generate approximately $1,110,000 in additional revenue to the general
fund from collected franchise fees.
ATTACHMENTS
Attachment 1 - SB1383 regulation
Attachment 2 - League of CA Cities Survey of waste service costs
Staff Contact:
Manuel Medrano, Environmental Services Manager
2021/09/14 City Council Post Agenda Page 75 of 428