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HomeMy WebLinkAbout1994/08/16 Item 13 COUNCIL AGENDA STATEMENT Item 13/i. Meeting Date 8/16/94 TITLE: PUBLIC HEARING Consideration of Program Changes to Residential Yard Waste Recycling Services From an Options Program to a Universal Mandatory Rate Structure (1(.,1~ RESOLUTION Approving a Universal Residential Yard Waste Collection Rate Change to $1.48 Per Single-Family Home , f/ Deputy City Manager Krempl &; Conservation Coordinator ~Vl City Manager [} (4/Sths Vote: Yes_ NoX) SUBMITTED BY: REVIEWED BY: The City's residential yard waste collection program began 1/1/94 as a unique "options" program which allows single-family residents the choice of how they will participate, based on their own assessment of their yard waste needs. Options provided included: I) ongoing and regular collection- subscription for weekly service through Laidlaw, 2) occasional or seasonal collection- $1 stickers entitle resident to pick -up by Laidlaw as needed, 3) no yard waste- no action needed. A review of the participation, costs and revenue of the first six months of the voluntary "options" program show that costs are far exceeding revenue and continuation of the program is dependent upon a rate adjustment to cover collection and processing costs. Attachments A, B and C are letters from Laidlaw (7/18/94,7/26/94 and 7/27/94) requesting consideration of an amendment to the yard waste fee structure effective 9/1/94 which would involve a change to a universal mandatory rate structure to be spread to all single-family residents. This report discusses the pros and cons of making such a change, the field audit and research conducted by City staff which supports the recommendation, implications of not approving a rate change, and the specific actions and public outreach services to which Laidlaw is committed in order to ensure as smooth. a transition as possible. RECOMMENDATION: Approve the resolution changing the residential yard waste program to a universal mandatory rate structure and changing the rate to $1.48 per single family home effective 9/1194. An alternative would be to delay this increase until 10/1/94 or such time as the San Diego Solid Waste Authority increases tipping fees for non-member cities. This action is not recommended for reasons described herein. BOARD/COMMISSION RECOMMENDATION: Not applicable. \ ~A- \ Page 2, Item Il>A Meeting Date 8/16/94 DISCUSSION: When the current yard waste program was originally approved in September, 1993 to begin in January, 1994, the voluntary "options" program appeared to offer Chula Vista residents a unique opportunity to have control over their costs based on their needs. Although the "options" concept was a positive attempt to offer alternative levels of service in an era of ever increasing diversion mandates and commensurate costs, the approach was quite new and had no "track record" of actual performance. It was clear that close monitoring of the program's results would be important to determining effectiveness and provide guidelines for appropriate changes. In addition, to assure as much flexibility as possible for the City to respond to needed changes, Council directed at the time that the Chula Vista Municipal Code be amended to allow changes in fees for this program by resolution. The amendment included the alternative to change (by resolution rather than further ordinance changes) to a "universal mandatory rate structure such that all residential units using the waste collection system would pay the same fee regardless of whether or not they are using the yard waste recycling services." [CVMC 8.23.230(D)(2)] Program Challenges In mid-June 1994, Laidlaw formally approached the City regarding the results of the first six months of operation. They suggested that such serious problems could only be mitigated by a complete program change to a universal rate structure. Staff requested a written proposal with documentation of the problems encountered in the program in its present form (Attachment A). In summary, the most significant problems from the company's view are illustrated by the following facts: o Collection services revenues (from subscription and sticker sales) for January through June 1994 totalled $54,774 while processing costs for dropping the material at a composting facility totalled $72,666, a net loss of $17,892; and o The $17,666 net loss does not include operational costs for that same six months, exacerbating the loss to an even greater degree. To illustrate the critical nature of the program's financial liabilities, Laidlaw's 7118/94 letter indicated that to keep the sticker program at $1, subscription rates would have to be raised from $2/month to $15.95/monthjust to address program costs. To help provide an objective measurement of the problems from the City's perspective, the Conservation Coordinator: o Worked with Laidlaw to conduct a one week refuse field audit to determine how many ofthe households are continuing to mix yard waste in refuse containers instead \ ~A.- 2... Page 3, Item 13 A Meeting Date 8/16/94 of choosing one of the City's options for properly recycling it; and o Conducted a comparison survey of yard waste program components and costs for other cities within the County. Staff Analysis of the Program's Current Status Laidlaw provided additional records which indicate that a total of 1,000 residents out of 26,000 were routinely tagged for putting yard waste in their refuse containers during the program's first six months. The one week refuse field audit in July 1994 indicated that 1084 residents continued to violate the City's mandatory yard waste ordinance by mixing yard waste with their refuse. A projection of these numbers helps to partially explain why the actual green waste diversion during the first six months of the program (3,300 tons) is below an estimate of what we could have expected (6,500 tons) based on waste stream studies. In short, it appears that there is evidence that an important amount of the City's residential yard waste is not being diverted from the landfill through the options available. Some of it is ending up in the landfill because it is mixed in with refuse. Additionally, staff from other City departments (Public Works, Nature Center, Building and Housing/Code Enforcement, and Police) report a general observation that illegal dumping has increased during the past year. Staff also conducted a survey of the other city yard waste collection programs in the County (Attachment D). That attached survey shows that the Chula Vista program is unique. It is one of only two purely "optional" programs in the County. The other "optional" program (City of Santee) is successful because it is part of a "pay as you throw" refuse rate system that provides financial incentives to recycle and dis-incentives for commingling yard waste with refuse. The survey demonstrates that the average Chula Vista participant is setting out twice the weight of yard waste for collection than the average County participant. However, because of the small number of participants Chula Vista's total program only diverts half of what it should for a city with its potential participants. Additionally, the survey data shows that, when adjusted for cost component factors (such as franchise fees, subsidies from refuse collection and container costs, etc.), the rates throughout the County range from $1.00 to $2.53. Laidlaw's proposed universal rate of $1.48 per household would place the City's rate as the third lowest program rate among the 17 cities. Conclusions The clean up for illegal disposal often involves Code Enforcement and Public Works personnel and significantly increases the ultimate cost to residents and businesses. The survey demonstrates that universal yard waste programs throughout the County have cost-effectively produced greater I~A-3 Page 4, Item I~A Meeting Date 8/16/94 diversion than Chula Vista's "option" approach. The survey suggests that at least 400 to 700 more tons of yard waste can be diverted from Chula Vista's residential refuse collection each month. The diversion of an additional 400 tons of residential yard waste represents 4% towards the State's 25% and 50% diversion goals and a potential savings of up to $30 per ton in avoided disposal costs. A universal program will provide all of Chula Vista's residents with a convenient and environmentally responsible method of recycling yard waste. It will reduce the incentive to illegally dispose of yard waste and control the costs associated with illegal disposal. The rates being proposed appear reasonable. The proposed change is major but can be expected to greatly benefit the City as an entire community. While the proposal is recommended, staff also pursued with Laidlaw a number of concerns regarding implementation of such an important departure from the program which was first introduced to the public less than a year ago (See Attachment Band C.) Proposed Program The first concern is an accurate understanding about how the collection services will change. If the staff recommendation is accepted, participants will receive two large, permanent, yard waste identification stickers which can be placed on standard refuse containers. When residents require service they simply place one or more containers with yard waste at the curb in a manner that the sticker can be seen from the street. Additional containers and bundles may still be placed for collection behind the identified containers. Residents who have purchased or rent a Laidlaw yard waste cart may continue to use it. Laidlaw will pick up yard waste carts at no cost for those residents who wish to stop using them. Laidlaw will also provide full credit to customers who wish to return yard waste carts purchased from Laidlaw, or the $1 yard waste "option" stickers during the first 120 days of the program. Additionally, Laidlaw will credit customers a 50% refund if they choose to return their used composting bins (purchased from Laidlaw) during the same period. Program Transition Laidlaw has also committed to taking several steps to insure a smooth transition between programs. Those steps include, but are not limited, to some of the following: . Pre-delivery of two yard waste identification stickers with a public education hand-out in English and Spanish that explains the new program, . Placement oftwo ads highlighting the yard waste program changes in a local newspaper, . Placement of at least one ad in local Hispanic media, \ ~ ~'1 Page 5, Item 13A Meeting Date 8/16/94 . Distribution of public service announcements to leading Hispanic organizations regarding the changes to the yard waste program, . A concurrent or follow-up message in refuse bills regarding the yard waste changes, . Aggressive tagging of residents that place yard waste in their refuse containers, (tags are designed to provide directions for compliance with the Mandatory Recycling Ordinance.) Alternatives Finally, because of the seriousness of the proposed change, staff reviewed possible alternatives with Laidlaw: maintaining the program at current levels and eliminating the program. Because of the program losses, Laidlaw has said that without a speedy resolution to the problem they cannot maintain the program at current levels and would have to immediately withdraw the entire program. Elimination of the program is not in the best interests of either the City or the rate payers. If the program were eliminated, all rate payers would receive a rate increase of at least 64 cents per month, the approximate cost of disposing of yard waste at $55 per ton with their refuse instead of collecting it separately and composting it at $25 per ton. Additionally, the City would need to develop and implement an alternative program that could replace the 6% overall diversion currently achieved by the yard waste program and the 12% to 17% diversion the program is ultimately projected to achieve. Impact of Delaying a Change As indicated in the "recommendation" section of this report, an alternative to the change effective 9/1/94 as requested by Laidlaw would be to grant the effective date of the change but delay implementation of the increase to coincide with the tip fee increase expected 10/1/94. This alternative is not recommended for two main reasons: . Actual impacts of the ti? fee increase will probably not be known for a few more weeks. Staff needs to evaluate the non-member contract rate options released by the Solid Waste Authority (SW A) on 8/11/94 in light of the viability of alternatives. Council deliberation on the issue is necessary and the SW A has set a 9/15/94 deadline. A "daily rate" (other than the 3r5 and 10 year contract rates offered) will be determined after the 9/15/94 deadline by negotiation. . Placing all increases on one bill may create more of a burden for the rate payers. Changes to the rates for yard waste and curbside recycling effective 9/1/94 would appear in the September billing and cover a two month period. Tip fee increases which may subsequently be determined effective 10/1/94 can be delayed until the November billing. Without this 13 A-'s Page 6, Item I~A Meeting Date 8/16/94 incremental approach, residents would receive a November bill with four months increase for yard waste and three months increase for landfill charges (tip fee.) FISCAL IMP ACT: If the staffrecommendation is accepted, all 26,000 residential customers will receive weekly yard waste service. Assuming that the reduction in the residential curbside recycling rate proposed in Item # 13 b. at this Council meeting is aooroved, the fiscal impact of the yard waste program change is best illustrated by its effect on three different segments of residential (single-family homes) customers. Approximately 18,300 current non-participating yard waste customers will receive a monthly rate increase of $.88. Approximately 4,200 current monthly subscribers to weekly service will receive a $1.12 per month rate reduction in their current refuse bills. Approximately 3,500 customers currently using the sticker option will receive weekly service for $.12 per month less than what they would have paid for once a month use of the sticker option. Current rate (eff. 711194: Refuse $15.07, Recycling $1.10) . . . . . . . . . . . . Yard waste (eff. 9/1/94). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Curbside recycling rate reduction (eff. 9/1/94-- if approved under Item# 13 b.) $16.17 . . 1.48 Total. . . . . . . . . . . . . . . . . . . . Monthly increase to 18,300 rate payers . <.60> $17.05 . $ .88 Current refuse/recycling rate . . Current yard waste monthly rate Total. . . . . . . . . . . . . . . Less proposed Rate . . . . . . . Monthly savin\ls to 4,200 rate payers. $16.17 $ 2.00 $18.17 . <$17.05> . $1.12 Current refuse/recycling rate . . . . . . . . . . . . Yard waste sticker rate (once a month average use) Total. . . . . . . . . . . . . . . . . . . Less Proposed Rate . . . . . . . . . . . Monthly savin\ls to 3,500 rate payers. $16.17 . .$..lJill $17.17 . <$17.05> . . . $ .12 mtm:c revyrdw$.cas Attachments IS A - <.c RESOLUTION NO. J? /, I ? RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A UNIVERSAL RESIDENTIAL YARD WASTE COLLECTION RATE CHANGE TO $1.48 PER SINGLE-FAMILY HOME WHEREAS, the City's residential yard waste collection program began 1/1/94 as a unique "options" program which allows single-family residents the choice of how they will participate, based on their own assessment of their yard waste needs; and WHEREAS, a review of the participation, costs and revenue of the first six months of the voluntary "options" program show that costs are far exceeding revenue and continuation of the program is dependent upon a rate adjustment to cover collection and processing costs; and WHEREAS, staff proposes an amendment to the yard waste fee structure effective 9/1/94 which would involve a change to a universal mandatory rate structure to be spread to all single- family residents. NOW, THEREFORE, BE IT RESOLVED the City council of the city of Chula vista does hereby approve a Universal Residential Yard Waste Collection Rate change to $1.48 er single amily home effective 9/1/94. Presented by George Krempl, Deputy city Manager /3.19 -, Attachment A 8SL11!J8S8 LAIDLAW WASTE SYSTEMS INC. July 18, 1994 City of Chula Vista George Krempl, Deputy City Manager 276 Fourth Avenue Chula Vista, Ca 92010 In recent weeks we have reviewed and discussed a variety of issues pertaining to the current yardwaste program in Chula Vista and the immediate need to amend the service fee structure to support the program costs. As you know, the yard waste program was implemented in January of this year with program participation being voluntary. The participation projections developed by Laidlaw and City staff under the voluntary program were important as they determined service pricing levels which would support program costs. Unfortunately, participation levels are below those projected leaving monthly revenues far below program costs. Participation projections were forecasted as follows: Poculation Base - 26.000 Revenue Curbside Monthly Subscription Service 13,000 @ 2.00/Mo = $26,000 II Sticker Program 6,500 @ 1.001Wk = $28,167 III Backyard Composting 6,500 @ -0- = -0- $58,167/Mo Actual participation levels are referenced on the attached worksheet - City of Chula Vista Yardwaste Summary. As you can see, actual monthly subscription and sticker participation levels in June totaled 7,667, while monthly subscription projections alone totaled 13,000. Because we are well into the summer season, it is also likely that voluntary participation is at peak levels. Through the six month period (January - June) collection service revenues have totaled $54.774 while associated disposal 8364 CLAIREMONT MESA BLVD" SAN DIEGO. CALIFORNIA 92111 (619) 278.6061 FAX (619) 278.7528 @ \~~- ~ costs have totaled $72.666. This represent a loss at the net revenue line of $17.892. Remaining operational costs to provide the service further deteriorate the financial picture. To help assess future opportunities and program options Michael Meecham, Conservation Coordinator for the City. completed a County survey detailing yardwaste services provided to other cities. while Laidlaw conducted a one week service audit of the residential waste stream. The service audit was completed using the support of the Urban Corp for the week ending July 15th. Urban Corp representatives inspected residential waste stream containers prior to service. Containers having more than 10% yardwaste mixed with regular waste were noted. Additional opportunities for the week totaled 1.087 while daily numbers varied from 172 to 321. This one week sampling was then used to make projections for future diversion opportunities in the calculations for a new program and rate structure. As you can see, an immediate change in the yardwaste program is needed to provide financial rationale for Laidlaw to continue this service. Spreading necessary operating costs among only the current participants would only serve to penalize those who have taken the responsible position to participate. As an example - if the sticker program remained at current pricing levels, monthly subscription rates to address program costs would increase from $2.00/Mo to $15.95. Monthly Program Cost $70,352.09 June Sticker Usage (3,475 x1.001 3.475.00 Difference $66.877.09 + June Subscription Customers 4,192 Revised Subscription Rate $ 15.95 Laidlaw does not see a voluntary participation schedule as a practical solution. It also does not appear to be a viable alternative selected by other County cities surveyed. Laidlaw Waste Systems would propose a standard household customer charae rate of $1.48 based on the attached worksheet - City of Chula Vista Yardwaste Contract Rates. Detail explanation for component items are provided on the worksheet. Additional diversion is based upon service audits and original household generation estimates. Corresponding charges were made to processing costs and landfill diversion amounts. This charge would eliminate the sticker program which has fallen short of expectations and served as a source for several service issues or problems. Customers with outstanding stickers will have purchase costs credited against their account upon returning directly to Laidlaw Waste Systems. The City of Chula Vista would be , ~~~9 credited or refunded directly for sticker purchases made for resale to residents. The refund period would extend through the first 60 days of the transition period. We would propose an effective date no later than SeDtember 1. 1994. Realizing the initial program provided for purchase of backyard composters, Laidlaw would provide for specific customer exemptions for those customers who have purchased composting units from Laidlaw. When those specific customers of record relocated within the City they would then become participants of the standard program. New residents to the service location would also become customers of the program. This would provide for a reasonable transition for customers who purchased Laidlaw composters to not be penalized. They would still have the option to join the program. Also enclosed is a worksheet reflecting diversion credits realized for the first six months of operations - City of Chula Vista Yardwaste Contract Analvsis. Diversion credit for the program through June total $47.225.24. Because of the significant program costs and revenue shortfall, Laidlaw would propose the credit to be applied to partially offset the operating costs experienced by Laidlaw. We ask for your timely review and response to address the serious financial concerns experienced by Laidlaw with the yardwaste program. Again, we would look for full resolution by September 1, 1994. Please call should yo have additional questions. , ~ Ji Weaver arket General Manager Laidlaw Waste Systems, Inc. I~A-\o 7-15-9<1 LWS - SAN DIEGO CITY OF CHULA VISTA YARDWASTE CONTRACT RATES SIX MONTH PROGRAM REVIEW FU.f:C'V'M' CONTRACT CURRENT PROPOSED REVENUE REVENUE RATE COST COMPONENTS: OPERATING COSTS $1.05 $2.49 $2.03 PROCIOSSING COSTS $0.55 $0.72 $0.56 (B) FRANCHISE FEES $0.11 $0.17 $0.12 TOTAL YARDWASTE RATE $1.711 (A) $3.38 I $2.711 RATE SOURCES: LANDFILL DIVERSION DIVERSION SHORTFALl/(OVERAGES) ($0.94) $0.00 ($1.24) $0.00 ($1.23) (C) $0.00 CUSTOMER CHARGE RATE Iti1l'/'R[lS'i! ~,W"'":::''' .......... ", '~'>:"':";:':': " ,', .':' I~I 1--: ~! 41,16711 5,67211 26,000 II MONTHLY NUMBER OF UNITS II $19,195.6611 II $70,460.00 II TOTAL MONTHLY REVENUE II $70,352.0911 (A) STICKERS MONTHLY TOTAL TOTAL COST OF OPERATIONS: $1.27 $2.66 NUMBER OF UNITS 28,167 13,000 41,167 TOTAL REVENUE $35,772,09 $34,580.00 $70,352.09 TOTAL YARDWASTE RATE I $1.71 1 . TOTAL COSTS OF OPERATION PER COUNCIL AGENDA STATEMENT 9/14/93, ITEM #14,PG5 (B) PROJECTED TONS X $25{TON (C) PROJECTED TONS X $55{TON PROJECTED TONNAGE: JUNE YTD AVG TONSIMONTH ~41 ADDITIONAL TONS: 1087 X 17LBS X 4.33WKS/2000LB 40 PROJECTED TONNAGE: 581 \ ~A. \ \ - ()>> f - t-' FlLE:CVVW LWS - SAN DIEGO CITY OF CHULA VISTA YARDWASTE SUMMARY SIX MONTH PROGRAM REVIEW 7-15-94 TOTAL WEEKLY YARD WASTE CUSTOMER~ YARD WASTE MONTHLY YARD WASTI YARD WAST TOrAL 0lIWf CCNTAtlER RENTCON~"ER S1DCERS USED UNITS TONS lBSIUNIT I ORIGINAL PROJECTION 13,0001 13,000 1 01 26,1671 41,1671 901 1 43.771 JANUARY '94 2,796 230 2,567 FEBRUARY '94 2,940 223 2,716 MARCH '94 3,566 260 3,306 APRil '94 3,774 261 3,513 MAY'94 4,210 274 3,936 JUNE'94 4,192 266 3,924 SIX MONTH TOTAL I 21,46111 1,51611 19,9651 1,307 1,322 1,961 2,121 2,363 3,475 I 12,5491 4,103 4,262 5,529 5,695 6,573 7,667 I 34,03~ I 5,~ II (35,495jl II I SIX MONTH AVERAGE II 3,56011 (9,420jl 3,32611 II 2,09211 II u~111 25311 I VARIANCE TO PROJECTION II 243 265 597 694 736 669 3246 54111 II (36011 II 116.44 133.73 215.94 235.45 224.55 179.73 I 190.771 190.7711 147.0011 FltE:CVYW LWS - SAN DIEGO CITY OF CHULA VISTA YARDWASTE CONTRACT ANALYSIS SIX MONTH PROGRAM REVIEW 7-15-94 MONTHLY SUBSCRIPTION STICKERS NET # UNIT # UNIT CONTRACT[ ACTUAL SHORTFALU UNITS RATE UNITS RATE REVENUE DIVERSION (OVERAGE) JANUARY '94 2,796 52,198.51 ($4,374.00) ($2,175.49) FEBRUARY '94 2,940 52,297.54 ($5,130.00) ($2,832.46) MARCH '94 3,568 52,884.61 ($10,746.00) ($7,861.39) APRIL '94 3,774 $3,063.51 ($14,574.00) ($11,510.49)1 MAY'94 4,210 $3,416.61 ($15,498.00) ($12,061.39) JUNE'94 4,192 $3,704.97 ($14,469.00) ($10,764.03). SIX MONTH TOTAL 21,461 $17,565.76 ($64,791.00) ($47,225.24) I ~ /1.- 1 ~ LH1LiLHw WH.:..:>IL ,-,1~',LII.-.J ,LL.- ,''-'.~ Attachment B 8881!!Oe; LAIDL.AW WASTE SYSTEMS INC. J July 26. 1994 City of Chula Vista Michael Meacham, Conservation Coordinator 276 Fourth Avenue Chula Vista, CA 92010 Michael: Thank you for your follow-up call regarding my July 18th correspondence for the Chula Vista Yardwaste Program. Answers to those questions and clarification requested are provided below. Let me begin by again stressing the urgency to reach both a service and financial resolution for the program for implementation no later than SeDtember 1. 1994. Through six months (January - June '94), Laidlaw has experienced a financial loss In excess of $147,000 in providing the yardwaste service program to Chula Vista. Immediate resolution Is needed to continua the program beyond September 1, 1994. Sticker Proaram Residents with unused stickers will have purchase costs credited against their accounts upon returning any unused stickers directly to Laidlaw Waste Systems. Credits will be provided through the first two billing cycles (120 Days) beginning no later than September 1. 1994. Backyard ComDosting Backyard composting is an important part of any yardwaste program but does not provide total resolution for a complete diversion program. Branches, palm fronds, and other larger yardwaste materials still require alternatives available through a yardwaste program. Accordingly, we recommend a program of participation charges to all residents consistent with other Cities in the County. A 50% credit refund can be issued to those customers of record who may wish to return the Toro Com poster purchased through Laidlaw. This option replaces the previous action recommendation. 8364 CLAIREMONT MESA BLVD.. SAN DIEGO, CALIFORNIA 9211 1 (619) 278-6061 FAX (619)278-7528 G> I 3 A- 1"\ LAIDLAW WASTE SYSTEMS TEL No .1-619-278-7528 JuJ 2b.~4 l1:U ~<O.UU'j ~.Uj J Protections In our discussion you asked for comments on how realistic the participation and diversion numbers are In building the proposed customer charge rate of $1 .48. This number is very realistic based on actual participation In January '94 through June '94, landfill rates in July. processing rates for October ($25/ton), and audit results from June. We would anticipate additional reductions in the rate charged in the next review cycle. Cart Rental/Car Purchnes Those customers no longer requesting the yardwaste cart currently rented from Laidlaw, merely call and cancel service. We will pick up at no charge. Those customers of record who have purchased yardwaste carts can return them for full value to Laidlaw. DlSDOSIII Cost Clarification Clarification was requested on the .72,666 disposal cost number. This number represents direct dispOSlll costs to Laidlaw for disposal of collected yardwaste to the processing Cllnter. No operation expenses are included. Again, through six months of operation disposal costs alone have exceeded the revenues billed by .17.892. This loss of .17,892 Is at the net revenue line. Total losses with operational costs applied for the same periOd total over t147.000! Yardwaste Re-Dlverslon You requested financial Impact on re-dlverslon of yerdwaste back to the regular waste stream. Using average monthly diversion of 541 tons and the potential County rate, monthly waste rates would Increase as follows: If Landfill Gate Rata ill $55.00/ton $250.00 -$ 25.00 Landfill Rate - County Processing Rate O.R.I. $225.00 x 541 Tons + 26,000 Residents = $4.68 Per ResidentlMonth These projections only reflect landfill rate Impact on the potential waste rate. Additional costs for investments made by Laidlaw (Le. trucks, containers, ate) would further impact effects of canceling the program. \ ~ p..- \oS LrllLJLHIJJ WH~It. :::'(:':,iLI'I..;; ILL IW.l l'.J.j--....rC. rJLQ .!l,. '" 1.)..)4 ..l. 1. J. "-- 11'. . '_!'.' _} I It is clearly evident of the program's pOSitive benefits to support the City of Chule Vista's efforts to exceed AB939 mandates. j New Proaram ImDlementetlon In general terms, wa would propose a curbside program providing a yardwaste decal to all residents to be placed on their own standard 33 gallon collection container. Any yardwaste material would be placed in the container to be collected on the same day as regular weste. The container would be placed approximately 3 feet away from their regular trash with the "Yardwaste Recycling" label facing the curb for clear identification. Additional containers or bundles could be staged behind the marked container. In those weeks when no yardwaste is generated, the contelner could be used for regular waste. The label would not face the curb and the container would be placed with other regular waste containers. Wa would continue to make the carts available for purchase or rental as they are in the current program. Michael, we continue to support diversion whether through yardwaste or other curbside programs. We must do so addressing all progrem costs to Laidlaw. Our losses, under the current yard waste program, cannot continue. An immediate change is required to continue the program beyond September 1. 1994 Please let me know if you have any further questions. JW/mc cc: Dan Higgins George Krempi Sandy Snyder l3A- \ ~ LAIDLAW WASTE SYSTEMS TEL No.1-619-2?~-?528 JuJ 21.94 14:U4 No.Ul? P.02 ~ ) Attachment C f.:tC [( 7/:1.7/ qq VI({ r-l - 84'0884'8 LAIDLAW WASTe SYSTeMS INC. CItY of Chula Vista Michael Meacham I Conservation Coordinator 276 Fourth Ave Chula Vista, CA 91910 Mlchaei, As a result of our conversation this morning regarding the yardwaste program, the following itemS are offered for clarification or modification to my letter dated June 26th: .Each resident can be provided with 2 stickers for use on yardwaste collection containers. Those containers provided by the customer will not exceed 60lb each and will be In eccordance with requirements of current municipal code. . The buy back period for yard waste containers at full price and com posters at 50% of original price will be 2 billing periods or 120 days from September 01, 1994. Cencellatlon of cart rental remains an open option of the program. .Publlc education will be an important part of the transition process. As dlscused we would provide twO new media items In consecutive weeks. Communications would be made locally in the Star News and The Baja California Newspaper to reach both Spanish and English speaking customers. A separate mailing would elso be made to residents detailing the new program outline, along with the new yardwaste container decals. My thanks for your follow up support on this Important issue. jw:dh Jim Weaver ::r- c0~ 6364 CLAIREMONT MESA BWD.. SAN DIEGO, CALIFORNIA 92111 (619) 276-(l()61 FAX (619) 27..7&28 (i) I ~ A - \1 - ().) 1? - 00 YARD WASTE COLLECTION SURVEY CITY JlNIVERSAL OR TONS PER MONTH NUMBER OF AVERAGE TONS MONTHLY RATE QPTIONAL PARTICIPANTS PER P ARTICIP ANT Carlsbad U 533 15000 0.036 $2.25 Chula Vista 0 735 7500 .098 2.00 26000 .028 Coronado U 116 4500 0.026 2.53 Del Mar U 50 1500 0.033 1.95 EI Cajon N/A N1A N/A N/A Encinitas U 554 15500 0.036 1.40 Escondido U 1100 23000 0.048 1.60 Imperial Beach U 190 4600 0.041 1.002 La Mesa' U 154 10500 0.015 1.92 Lemon Grove' U 60 7000 0.009 1.97 San Marcos U 175 6600 0.027 N/A Santee 0' 310 7000 .044 2.502 11000 .028 Solana Beach U 155 3600 0.043 1.91 Vista U 505 13000 0.039 N/A National City U 165 6700 0.025 ($2) Oceanside4 0 1300 26000 .050 2.702 34000 .038 Poway 0 415 11500 0.036 N/A TOTALS OR 13/4 6517 160000 0.041 2.03 AVERAGES ;to> M- M- '" n ::>" 3 ro ::> M- - <:::> 'DOLLAR PER MONTH MORE FOR INCREASE FROM 64 TO 96 GALLON OR ADDITIONAL CART 'INCLUDES APPROXIMA TEL Y $1.00 CONTAINER COSTS 3 ESTIMATES, Y ARD WASTE LOADS ARE NOT WEIGHED. 'OCEANSIDE APPLIES UNIVERSAL AND ALLOWS WRITTEN EXEMPTIONS WIPROOF IN JANUARY ONLY. COUNCIL AGENDA STATEMENT Item '/3,-8 Meeting Date 8/16/94 TITLE: PUBLIC HEARING Consideration of Rate Changes to Residential Curbside Recycling Services For Single Family Households SUBMITTED BY: RESOLUTION 1,C.z.o Approving Rate Schedules for Residential Curbside Recycling Services Cv Deputy City Manager KremjJl Conservation Coordinator ~\il\ REVIEWED BY: City Manager} (4/5ths Vote: Yes_ NoX) The rates for single-family households' curbside recycling services have not been reviewed in two years since the only change to the overall refuse and recycling rate during that time has been to pass through the increased cost of County landfill tip fees, Chula Vista Municipal Code 8,23,210 provides for specific rate review procedures for this program which allow for certain estimated revenues to be applied to the program costs, with adjustments for comparisons for estimated to actual costs to be made periodically, In accordance with those procedures, the successful participation of residents and the increasing avoided landfill costs now result in a recommended reduction to the single-family rate from $1.10 to $,50 per month and corresponding reductions for senior citizens from $,75 to $.35 month, RECOMMENDATION: Approve resolution changing rates for single-family household curbside recycling services effective 9/1/94 or at the same time as a change in rates for the yard waste recycling program. BOARD/COMMISSION RECOMMENDATION: Not applicable. DISCUSSION: The City has done its best to explain to residential refuse/recycling rate payers that the substantial rate increases that they have recently experienced are a result of the County's solid waste operations and are neither controlled by, nor benefit, the City or Laidlaw. The City does, however, control and manage the development and implementation of residential recycling, yard waste and refuse collection services. Approximately three and a half years ago the City implemented a single family residential curbside program, The City Council's decision to move forward on a program, the efficient and effective design and implementation of the program, and the participation of rate payers have combined to provide the opportunity to reduce rates at this time. \~&-I Page 2, Item 138 Meeting Date 8/16/94 Rate Structure The recommended rate reduction can be attributed primarily to the rate structure established at the commencement of the program in 1991 and illustrated in Attachment A. The operating costs of the program are reduced by the following estimates: o Material sales- the value to be paid in the marketplace for all materials collected at the curbside; o Landfill diversion- the avoided cost of sending the collected materials to the marketplace rather than the landfill; and o Program ll"rants- full value applied for any grants received specifically for the purpose of reducing operational costs. After the first year of operation, and at each rate review period thereafter, the estimated amounts described above were compared to actual amounts and a resulting adjustment ("rate shortfall/overage") was derived. As this process continues, the rate structure provides residents with a mechanism that: o Puts all of the revenues from material sales back into the program to partially defray the operating expenses; o Defrays expenses even more by giving credit for participation-- as the tonnage collected goes up, and landfill costs increase, this diversion credit increases; and o Allows credit for a County grant received four years ago for capital investment (truck) to continue to be allocated until the amortization period is complete. Following this rate structure, the base unit rate is recommended to change from $1.21 per month per household to $ .93 per month. With adjustments, i.e. comparisons of the last period's estimated to actuals, the final rate is recommended to change from $1.10 per month per household to $ .50 per month. In 1991, the City also made provisions for a senior citizen discount of 35% of the determined base unit rate. Using this formula, the senior citizen rate will decrease from $ .75 per month to $. 35 per month if the staff recommendation is approved. 1~~-2.. Page 3, Item~ Meeting Date 8/16/94 Conclusion The ability of the City and Laidlaw to continue to lower recycling and refuse rates will depend primarily on the increased participation of all citizens in the current source reduction and recycling programs. One way to increase the opportunity for participation and diversion tonnage is to expand the target list of recyclable materials. Adding materials to existing programs in the future will often require a reinvestment of program savings, however, that reinvestment can pay substantial dividends in the form of even lower refuse and recycling rates for the rate payer, and greater enviromnental benefit for the entire City. FISCAL IMPACT: If accepted, the staff recommendation will lower rates $.60 for approximately 26,000 single family homes, duplexes and tri-plexes in the City of Chula Vista. That portion of the solid waste system that the City can control: the collection and marketing of recyclables and the collection of refuse can continue to be reduced annually, if the diversion efforts of residents increase and programs expand to include additional recycling and source reduction opportunities. Current rate (refuse $15.07 and recycling $1.10, effective 7/1194) Yard waste (effective 9/1I94-if approved under item # llJ!.J. Subtotal. . . . . . . . . . . . . . . . . . . . . . . . $16.17 .1.48 . 17.65 Projected rate . . . . . . . . . . . . . . . . . . . . . . . . . Less recommended curbside recycling rate reduction (effective 9/1194) Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17.65 <.60> $17.05 mtm:c curb$94.cas Attachment 13B-~ Attachement "A" g081!!8S8 LAIDLAW WASTE SYSTEMS INC. July 19, 1994 Stephanie Popek Snyder Principal Management Assistant City of Chula Vista 276 Fourth Avenue Chula Vista, Ca 91910 Dear Stephanie: Enclosed are the revised Curbside Recycling Schedules. As requested the CPI Adjustment has been removed from the rates. The Material Sales and Landfill Diversion adjustments have been updated to reflect actual results as follows: Material Sales Landfill Diversion Actual 9 month average (5/93 - 01/94) Actual 7 month average (5/93 - 11/93) In addition, the Franchise Fee Component has not been changed although the customer charge rate will decrease. It has been left as a constant component of the rate in order to reflect Council's direction that franchise amounts not change. After your review of the proposed rates, please let me know if additional information is needed. 4~ Daniel P. Higgins Market Area Controller DPH/mc cc: G. Krempl M. Meacham J. Weaver 8364 CLAIREMONT MESA BL VD . SAN DIEGO. CALIFORNIA 92111 (b191278-6061 FAX (6191 278-7528 \~B. '-I CITY OF CHULA VISTA RESIDENTIAL CURBSIDE RECYCLING CONTRACT RATES FOR THE FORTY ONE MONTHS ENDED: JUNE 3D, 1994 YEAR 4 RATE EFFECTIVE 7 -1 - 94 7 IQ ~~ FILE: CVREC794 YEAR 3 RATE I----~----- I RATE MODIFICATIONS! BASE RATE I ADJ r-YE:R I RATE RATE BASIS . COST COMPONENTS: >_______ __ ... ___~__. ....__~_.._.__.. "M___ _ OPERATING COSTS $1 _68 '~~:~~H~~~~:;ION~~--_~=j ~_ ~=-;~:~~ rl-----TOTAL_RECYCLlNG RATE - -: 1- $188 RATE SOURCE: MA TERIAL SALES LANDFILL DIVERSION r----------_'.________________ PROGRAM GRANTS i-- I sAsTuN Ir" RATE r:::1J.?U I_RJ\JI:_SJ1 ORTF A L},.L{ 0 VE flJA ~~~L__ ___ U.1i\TERIA~SALES___n__ f-- _ (Q.03) I LAN[)i'LL DIVERSIO~______J L_J!<l.QI3J I I CUSTOMER CHARGE RATE [::JI.joi SENIOR CITIZEN RATE_[oo$o.isll $1.68 I -----'--j $O.llJ $0.09 i FIXEO RATE COMPONENT $1.881 [ ($0.28)j' I ($0.37) l=~-X$O.(2)1 ($0.02 (~0.27 $0.00 1HJm ACTUAl9 MOS AVO RATE 1~193 1/1/41 ACTUAL 7 MOS AVO RATE (5/\13 110'1/31 PROGRAM GRANTS ($0.28)' I- I $0.925 VR 4 WtTHOUTPRIOR YEAR ADJ L~O.o~~ ($0.39211 RATE (OVERAGE) ADJUSTMENT RATE (OVEAAGE) ADJUSTMENT li- - $0.(;0.' YEAR 4 BilLING RATE --~~-~~-~:~.t_~??o SENIOR DISCQUN!. \~&-S r.'".,", FILECVF>EC7P RECYCLING CONTAACT ACCOUNTING MONTH COLUMN FEBRUARY 1991 MARCH. 1991 APRil. 1991 MAY 1991 JUNE,1991 JULY. 1991 AUGUST 1991 SEPTEMBER. 1991 OCTOBER. 1991 NOVEMBER. 1991 DECEMBER. 1991 JANUARY, 1992 FEBRUARY, 1992 MARCH,1992 APRIL. 1992 # UNITS ''I 22,831' 22.831 24.331 24.331 24.331 24.331 24,331 24,331 24.487 24.487 24.487 23,329 23.329 23,329 24.657, MAY 1992 24,657 JUNE 1992 24.657 * 17 MONTH TOTALS: - JULY 1992 AUGUST 1992 SEPTEMBER ~992 OCTOBER 1992 NOVEMBER 199? DECEMBER ~992 JANUARY, 1993 FEBRlJARY, 1993 MA.RC:" 199.~ APRi~ 1993 MAY, 1993 JUNE 1993 JULY 1993 .4.UGUST,1993 SEPTEMBE" 1993 OCTOBER,1993 NOVEMBER. 1993 DECEMBER 1993 JANUARY. 1994 FEBRUARY 1994 MARCH \994 ()J rP I 6"" 24.657 24.657 24.657 25.895 25.895 25895 25.781 25.781 25,781 25.928 25,928 25,928 26199 26,199 26,199 26,033 26,033 26,033 26,035' 26.035; 26.035 APRil :994 26.112 MAY 1994E5T 26,112 JUNE 1994E5T 26,112 '* 24 MONTH TOTALS: CONTRACT REVENUE IBI. 9'3240 913240 973240 9.13240 973240 9.73240 9.73240 9,73240 9.79480 979480 979480 933160 9.33160 933160 9,86280 9,86280 9,86280 $16352680 ? 903~6 5,90396 590396 725060 725060 /25060 121868 121868 ! 21858 'ZS984 T2S984 725984 733572 733572 7,33572 728924 T26924 7.28924 7.28980 728980 7.28980 ;31136 131136 T,31136 $173.57760 ** 41 MONTH TOTALS: f $337,20440 PER SUB- UNIT CONTRACT ~-~!._- 0,40 3,00000 0.40 3,000.00 0.40 3,000.00 0.40 3,000.00 040 3.000.00 040 3.000.00 040 3.000.00 0.40 3,00000 040 3,00000 040 3.00000 040 3000.00 0.40 3.000.00 0.40 3000.00 040 3.000.00 0.40 3.00000 040 3.00000 0.40 3.000,00 $5100000 028 028 028 028 028 028 0.28 028 0.28 J.28 '28 028 028 028 CU8 028 028 0.28 0.28 028 028 028 028 0.28 3.00000 3,000.00 3,000.00 3,000.00 3,00000 3 000 DC 3,00000 3.00000 3.00000 3.00000 3.00000 3.000.00 300000 3.00000 3,00000 3.00000 3.00000 3.00000 3.00000 3.00000 3.00000 3.00000 300000 3.00000 .----- $7200000 CllY OF CHULA YISTA RESIDENTIAL CURBSIDE RECYCLING CONTRACT ANALYSIS FOR THE FORTY ONE MONTHS ENDED: JUNE 30. 1994 PROCEEDS NET YEAR 2 & 3 COMMINGUNG SHORTFALl} RATE REVIEW ADJUSTMENT (OVERAGE) ADJUSTMENT 10) (1168738) (10.302.95) (21,757.96) (20,585.07) (15,73673) (13,834.11) (14.90115) (11.662.80) (12.720.13) (11.14312) (12.16135) (9.47665) (8.85994) (9.48009) (11.549.07) 18.31187} _.\2.0980.19) ($21515056) (16,30118) (11.74621) (11.73512) (11.04842) (1123058) '(08734) ',1193640) 1776863) (1093011) (100:;222) 759' 91) (821377) 18184 39} (8.27104) (920503) {8,82315} (1044494) (12,34265) (12.08581) (11-18379) (1167483) (1123770) (11.23770) (11.237.70) ($25455062) ---.l~ (1.38936) (115123\ (1.31013) (1.27912) (1.25526) (1.259.85) (1.20509) (1.371.00) (1,557.23) (1,41110) (1,174.84) (1.56435) (140962) (1.54972) (1.538022. ($20,425.92) sooo I~~C+D+E] . 445.02 1.82945 (9,025,56): (7,85267)1 (3,004.33), (1,101,71)! (2,166.75): 1.069.60 ' 74.67 1.651.68 633.45' 2.854.95 3.471.66; 2.85151 1.313.73 4.550.93 1.88261 ($523.76) NET RATE SHORTFALLJ(OYERAGE) TO DATE: NET RATE SHORTFALLJ(OYERAGE) TO DATE PER UNIT: YEAR 4 RATE ADJUSTMENT PER UNIT (OYER 12 MONTHS): YEAR 4 MONTHLY BASE RATES: (6.397.22)! (1.842.25)! (1.831.16)! (79782)! (979.98~ 16326 (1.717.72)' 2,4S005 (71143} (1.16174) , 516.70 735.94 87221 809.42' (129.16} 261.00; (1.52670) (3,610.64}i (3,20711}i (2,068.83)! (2.949,38)! (2,33596)! (2.476.06) __._@.~~~.!.!51 ($29,3ge.94) i~~o~_~OO_ _ ($469,701 i8jnS20,425jJtJ~~~_~}_0~j He, .O.~.!)IAJ ($050) ($523.76)1 739.71 739.71 73971 77685 77685 77685 77343 77343 77343 777.84 77784 77784 78597 78597 785.97 78099 78099 78099 781.05 781.05 78105 , 78336 783.36 783.36; I . .'- -\ ~-- $18,07jf4Jj !l__ (C, YEAR . RATE REVIEW ADJUSTMENT '0' CONTRACT REVENUE __.Lt!L._ 4.56620 4.56620 4,866.20 4,86620 4,86620 4.66620 4.86620 4.86620 4,897.40 4.89740 4,69740 4.66580 4,66560 4.66580 4.93140 4.931.40 4,93140 $81.81340 912309 9.12309 912309 9.58115 9S81!:> 958'1:; 953897 9.538.97 90.3897 9.0.9330 859336 959336 9.69363 9.69363 9,69363 9,63221 9.63221 963221 9.632.95 9.63295 963295 966144 966144 9.66144 ($29,398.94~ $229.37040 I ($29,398,94~i cr31=1'.~~:3'89]' IF+G] !1($11,325.10~ r . ($0.43], r '-l$if.04j. PER UNIT ACTUAL !~!~] It] 020 (4.62096) 020 (4,07356) 0.20 (5,649,68) 0.20 (5,345.12) 0.20 (4.975.56) 0.20 (7,071.35) 0.20 (7.252.S9) 0.20 (708653) 0.20 (7.82736) 0.20 (7.35517) 0.20 (8,25125) 0.20 (7,466.26) 020 (7.076.48) 020 (8,69998) 0.20 (9.571.91) 020 (8.915.72) 0.20----.i~.??1.62} ($120.46312) 037 037 0.37 0.37 037 0.37 0.37 0.37 037 037 0.37 0,37 037 0,37 0.37 0.37 037 0.37 037 0.37 0.37 0.37 0.37 037 (8,965.17) (11.20000) [10,87492) (10.916.36) (12.477 64) (11,36530' (11.38452) (10.64000\ (12.83492) (12,24608) (11.0205;:) (12.65656) (18.14256) (18,75230) (18,86668) (17,72331) (19,63S9S1 (22,50534) (17,55647) (17,39608) (20,60302) (16,02259\ (18.72736) (1~~?? .~t:iL (5363,261071 NET SHORTFALl} (OVERAGE) II!.:..~- (54.76) 492.62 (78348); (47892): (109.36): (2,205,15); (2,386.39)1 (2.220.33)! (2.929.96): (2,457,77): (3.353.85)1 (2.80046)' (2.41268)' (4,034.18), {4,640.51j' (3.984.32): _(4,290,22), ($36,649.72) 157.92' (2,076.91): (1,751.83)! (1,335.21): (2,89649) (1804.21)' (1.845.55): (1,101.03)1 ! (329595): (2652.72), (1.42716): (3.063.20)j (8.448.93)j (9,058.67)! (9,173.05)1 (8.091.10)! (10,003.74)! (12,873.13)1 (7.923:52)1 (7.763.13)! (10.970.07)1 , (8.361 15)1 I (9.065.92)! ~,?~5.9.~}1 ($133,e90.67) YEAR 2&3 RATE REVIEW ADJUSTMENT '"' I ($38,649.72) 1.97256 1,972 56 1.97256 207160 2.0716U 2.07~ 60 2.06248 2.062.48 2.052.48 2,07424 2,Q742<1 2,07424 2.09592 2.09592 2.09592 2,08264 2.08264 2,082.64 2.08280 2.08280 2082.80 2.08896 208896 2.08896 YEAR 4 RATE REVIEW ADJUSTMENT '" ($133'690~6 $;O~943.8~) L_lS'.;'3:t89067l ,----, _.----,--- lJ+KI ..'.~~22~ . .71 _c-=-~~!!1 !_~",{~~463,724.19j~. ~!Z~~,,42:~~1 t _lV.AI -($0.64) RESOLUTION NO. 17J,~O RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING RATE SCHEDULE FOR RESIDENTIAL CURB RECYCLING SERVICES WHEREAS, the rates for single-family household's curbside recycling services have not been reviewed in two years since the only change to the overall refuse and recycling rate during that time has been to pass through the increased cost of County landfill tip fees; and WHEREAS, Chula vista Municipal Code 8.23.210 provides for specific rate review procedures for this program which allow for certain estimates revenues to be applied to the program costs, with adjustments for comparisons of estimates to actual costs to be made periodically; and WHEREAS, in accordance with those procedures, the successful participation of residents and the increasing avoided landfill costs now result in a recommended reduction to the single- family rate from $1.10 per month to $.50 per month and corresponding reductions for senior citizens from $.75 to $.35 per month. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby approve the rate schedule of $.50 per month for single-family residential curbside recycling services and $.35 per month for senior citizens for residenti curbside recycling services effective 9/1/94. George Krempl, Deputy City Manager Bruce M. Attorney city' Presented by t C:\rs\recycle.red 13{J-i