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Home My WebLink About2007/03/06 Item 8 CITY COUNCIL AGENDA STATEMENT ~\~ CITY OF :~CHULA VISTA 3/6/07, Item ~ ITEM TITLE: RESOLUTION DIRECTING STAFF TO BEGIN THE PUBLIC PROCESS, AS REQUIRED UNDER PROPOSITION 218, TO INCREASE THE AB 939 FEE TO FULLY FUND THE STATE MANDATED WASTE DIVERSION AND RECYCLING PROGRAMS AS PROVIDED FOR UNDERAB 939, THE WASTE MANAGEMENT ACT DIRECTOR OF GE~L SERVICES ~Y<J. CITY MANAGER (/1 4/5THS VOTE: YES D NO ~ SUBMITTED BY: REVIEWED BY: BACKGROUND AB 939, lmown as the Waste Management Act of 1989, requires cities and counties to divert 50% of the waste going to the landfills. AB 939 was an unfunded mandate, which provided for jurisdictions to charge for the programs and services required to meet this goal. Public Resources Code 4190: "A city, county {,} or city and county may impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a countywide integrated waste management plan prepared pursuant to this chapter. The fees shall be based on the types or amounts of solid waste, and shall be used to pay the actual costs incurred by the city or county in preparing, adopting, and implementing the plan, as well as in setting and collecting the local fees. In determining the amounts of the fees, a city or county shall include only those costs directly related to the preparation, adoption and implementation of the plan and the setting and collection of the local fees. A city, county, or city and county shall impose the fees pursuant to Section 66016 of the Government Code." Public Resources Code 41902: "A local agency may directly collect the fees authorized by this chapter or may, by agreement, arrange for the fees to be collected by a solid waste hauler providing solid waste collection for the city or county. " Events have occurred which have place substantial strain on the City of Chula Vista's AB 939 funds. First, State grants no longer allow for Household Hazardous Waste (HHW) disposal costs to be paid for with State grant funds. The State grants had been covering up to $100,000 in disposal costs at the City's Household Hazardous Waste Drop-off Facility located at the Public Works Yard, 1800 Maxwell Road, Chula Vista, 91911. Then in February 2006, the temporary disposal exemption for residentially generated waste batteries, fluorescent lamps, and small electronic devices reached its sunset. These items have been identified as toxic and are banned from disposal in municipal solid waste landfills. They must be specially handled 8-1 3/6/07, Item~ Page 2 of 4 through collection events, recycling centers and/or at the Household Hazardous Waste Drop-off Facilities. The disposal/operating costs at the HHW drop-off facility increased 100% as a result of the increased traffic and corresponding HHW disposal volumes from this change in the law. The Household Hazardous Waste Program, which is just one (1) offorty-seven (47) programs the Environmental Services Division of the General Services Department oversees, now requires approximately $200,000 for disposal costs, almost half of the Division's budget. Finally, the landfill diversion goal of 50% was not met for 2005. Chula Vista diverted between 46-48% of the waste from the landfill for this time period. This number has been in steady decline from the high of 54% in 2001. After discussions with California Integrated Waste Management Board (CIWMB), Chula Vista staff identified several waste reduction/diversion and recycling program components, which need to be implemented, including a Construction and Demolition Debris Recycling Ordinance. Diversion Year Percentage 2001 54% 2002 52% 2003 51% 2004 50% 2005 48% Staff is requesting to move forward with the fee increase as described above. If not, then the alternative would be to request an appropriation of $450,000 from the General Fund to the General Services - Environmental Services budget to fund the State Mandated Waste Diversion and Recycling Programs. ENVIRONMENTAL REVIEW Not applicable. RECOMMENDATION That Council adopt the resolution directing staff to begin the public process, as required under Proposition 218, to increase the AB 939 fee to fully fund the State mandated waste diversion and recycling programs as provided for under AB 939, the Waste Management Act. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The City of Chula Vista first implemented the AB 939 fee in fiscal year 1994-95 as 1% of the gross receipts collected by the franchise hauler and forwarded to the City on a monthly basis. The AB 939 fee is equitably distributed across commercial, industrial and residential customers, based on their level of service. This fee was implemented knowing that as recycling program needs developed, adjustments could be made. Additionally, staff anticipated supplementing these funds with State and local grant funds as they were available. In fiscal year 1998-99 the fee was increased from 1 % to 2% to fund Household Hazardous Waste components of the City's AB 939 plan. San Diego County lost the revenue source it used to support Regional HHW Programs for all County residents when they sold the landfills to a private company. This placed more of the funding burden on the local jurisdictions. In 2003 the City increased the AB 939 fee by one-half percent (up to 2.5%) as a response to regulation changes that banned Cathode Ray Tubes (CRTs) such as televisions and computer monitors from landfill disposal, as they had been deemed hazardous. The funding increase also went to cover other AB 939 program enhancements such as commercial and industrial recycling and Space Allocation Ordinance development, implementation and administration, ensuring that adequate recycling and solid waste 8-2 3/6/07, Item~ Page 3 of 4 collection and storage space is designated in new projects and/or remodel projects, both public and private. Once again events have occurred which have placed more program funding burdens on the local jurisdictions requiring an increase in funding either from the General Fund or increased AB 939 fee: loss of grant funding; banning of specific items from landfills; not achieving the State mandated 50% landfill diversion goal for 2005. Chula Vista's AB 939 fee is collected on the gross receipts for waste services by the Contracted Hauler and forwarded to the City monthly. The fee is equitably distributed across commercial, industrial and residential customers, based upon their level of service. It is a pass-through fee, meaning the Contractor only collects the fee on behalf of the City and does not receive any portion or percentage of these fees. The current AB 939 fee is 2.5%, which equates to the following on a monthly invoice. . 32 gal cart = $.30 per month . 64 gal cart = $.39 per month . 96 gal cart = $.45 per month . 3 cubic yd commercial bin, serviced 1 time per week = $2.18 per month For fiscal year 2006-07, the 2.5% AB 939 fee will generate approximately $450,000. These funds are supplemented with various grant funds from the California Integrated Waste Management Board and the California Department of Conservation - Division of Recycling for AB 939 program specific work tasks (Used Motor Oil and Filter Recycling, Bottle and Can Recycling, Anti-litter Program, etc.). An AB 939 fee increase from 2.5% to 5% will generate an additional approximate amount of $450,000, totaling $900,000 annually and would equate to the following on a monthly invoice: . 32 gal cart = an increase from $.30 to $.60 per month . 64 gal cart = an increase from $.39 to $.78 per month . 96 gal cart = an increase from $.45 to $.91 per month · 3 cubic yd commercial bin, serviced 1 time per week = an increase from $2.18 to $4.35 per month The funding received from the proposed increased would be use to: . Offset the current funding short fall in the Household Hazardous Waste Program . Open the HHW facility one additional day during the week (as needed to meet the volume demands); or . Provide several, one-day special events to collect batteries, fluorescent lamps and electronics in different sections of the city · Development, implementation and administration of the Construction and Demolition Debris Recycling Ordinance . Increase various recycling program documentation/reporting requirements and associated administration . Backyard composting program composting bins; . Commercial and industrial "Zero Waste - $top Wa$ting Resources" Program technical assistance and workshops . Assisting in developing commercial food waste and organics recycling infrastructure to divert these materials from the landfill. . Stricter waste reduction and recycling requirements for Special Events including after event reporting 8-3 3/6/07, Item-8-- Page 4 of 4 The City Attorney's office has reviewed this proposed rate increase in light of Proposition 218 and has determined that refuse service rates have been specifically exempted from the voter approval requirements. Instead, these fees are subject to the majority protest requirement that includes a written notice to the recorded property owner of each parcel and a public hearing at least 45 days after the notice is mailed. The public notice will include the amount of the proposed fee, the basis for the calculation, the reason for the fee, and the time, date and location of the public hearing. The fees cannot exceed the funds required to provide the service; shall not be used for any purpose other than that for which the fee is imposed; shall not exceed the proportional cost of the service attributable to the property; and the fee must be for service that is actually used by or immediately available to the property owner. If Council approves ofthe concept of the fee increase, staff will develop the public notice plan and calendar the item for the corresponding public hearing. If approved, the fee adjustment would take place at the annual rate adjustment date for the respective customer service segments: Large Quantity Generators (commercial and industrial services) would go into effect July 1, 2007; Small Quantity Generators (residential cart services) would go into effect September 1, 2007. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section I 8704.2(a)(1) is not applicable to this decision. FISCAL IMPACT The fee increase would potentially generate $450,000 in additional revenue, which would be used to offset increased program costs thus generating a positive impact to the General Fund. ATTACHMENTS None. Prepared by: Lynn France, Conservation Coordinator, General Services Department M:\General Services\GS Administration\Council Agenda\Environmental\AB 939 Fee Increase Al13 rev 2, 2.27-07.doc 8-4 RESOLUTION NO. 2007-_ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DIRECTING STAFF TO BEGIN THE PUBLIC PROCESS, AS REQUIRED UNDER PROPOSITION 218, TO INCREASE THE AB 939 FEE TO FULLY FUND THE STATE MANDATED WASTE DNERSION AND RECYCLING PROGRAMS AS PROVIDED FOR UNDER AB 939, THE WASTE MANAGEMENT ACT. WHEREAS, Assembly Bill 939 (AB939), known as the Waste Management Act of 1989, requires cities and counties to reduce and divert 50% of the waste going to landfills; and, WHEREAS, the City of Chula Vista has not met the 50% waste reduction and diversion goal for 2005; and WHEREAS, the State Grants for Household Hazardous Waste no longer provide funding for the proper handling and disposal of Household Hazardous Waste; and WHEREAS, in February 2006 residentially generated waste batteries, fluorescent lamps, and electronic devices were deemed toxic and were banned from municipal landfills; and WHEREAS, these events have increased AB 939 costs beyond the current funding level, impacting the General Fund; and, WHEREAS, AB 939 authorizes jurisdictions to charge fees for the cost to implement, operate and administer the waste reduction/diversion and recycling programs. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista authorizes City staff to begin the public process, as required under Proposition 218, to increase the AB 939 fee to fully fund State mandated waste diversion and recycling programs as provided for under AB 939 - the Waste Management Act, and bring forward to Council as an agenda item for formal adoption. Presented by Approved as to form by Jack Griffin Director of General Services 8-5