HomeMy WebLinkAbout2016-05-24 - AGENDA REPORTS - FRANCHISED SOLID WASTE SVCS (2)0
meeting, although the City Council's discretion shall be limited to determining, based on
substantial evidence, whether the requested maximum rate adjustment meets the requirements as
set forth herein."
On May 24, 2011, the City negotiated additional residential and commercial diversion programs
to be added to the Franchise Agreements. The diversion programs included a Super Saver
Program, which provides a financial incentive for increased recycling and use of smaller waste
carts, small recycling carts for businesses lacking space for full-size bins, and litter/abandoned
item abatement from the public right-of-way.
Waste Management
The City of Santa Clarita (City) review of Waste Management's proposed rate adjustment
determined a 3.88 percent increase is in line with the methodology outlined in the Franchise
Agreement. This total adjustment includes the extraordinary rate adjustment of 2.5 percent along
with a 1.38 percent adjustment based on price indexes, which include labor, fuel, equipment and
disposal. In 2011, with the addition of the new diversion programs, the City Council authorized
the City Manager to execute the Amended and Restated Franchise Agreement to include an
extraordinary rate adjustment for rate year 2016-2017, which is in addition to the previously
agreed upon annual rate adjustments. This will be the last extraordinary rate adjustment for
Waste Management. The annual rate cap is limited to 6 percent.
With the approval of the proposed rate change, the new single-family monthly rate would
increase by $0.85 to $22.80 from the current rate of $21.95, effective July 1, 2016. However,
according to Section 6.5.2 of the Franchise Agreement, the maximum rates for standard
residential services shall remain below all incorporated jurisdictions, including unincorporated
Los Angeles County (County), with source separated franchised collection services in the Santa
Clarita Valley.
Currently, the standard single-family service rate for unincorporated areas in the Santa Clarita
Valley is $22.35 for the rate year 2015-2016. At this time, staff does not have the proposed 2016-
2017 service rates for the County. Therefore, the initial rate adjustment will be $22.34 based on
the current rate year 2015-2016 standard single-family service rate for the County, in accordance
with Section 6.5.2 of the Franchise Agreement. Once the County rate is known for rate year
2016-2017, the residential service rate will be adjusted in accordance with the Franchise
Agreement once the new County rates take effect. The final adjusted rates will not be made until
the new County rates take effect, and in accordance with 5. 1.1 of the Franchise Agreement, after
residential customers are notified 30 days prior to the adjustment. In regard to multifamily rates,
the difference in rates from what is proposed by staff and the letter submitted by Waste
Management is due to rounding corrections. Attached is a summary of the Method of
Adjustment for Waste Management for this annual rate adjustment described in Section 6.4 of
the Franchise Agreement.
Burrtec
The extraordinary rate adjustment resulting from the 2011 negotiations was approved by the City
Council until 2015-2016 rate year. Therefore, Burrtec is not entitled to an extraordinary rate
adjustment for the 2016-2017 rate year. The City's review of Burrtec's proposed rate adjustment
determined a 1.45 percent increase is in line with the methodology outlined in the Franchise
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Agreement. The annual rate cap is limited to 6 percent. This new rate would be effective
July 1, 2016. With the approval of the proposed rate change, the new rate for a three -cubic -yard
bin, serviced once a week, will increase by $1.16 to $81.38 per month from the current rate of
$80.22. Attached is a summary of the Method of Adjustment for Burrtec for this annual rate
adjustment described in Section 6.4 of the Franchise Agreement.
In October 2014, Governor Jerry Brown signed Assembly Bill (AB) 1826, encouraging
businesses to recycle their organic waste beginning April 1, 2016, depending on the amount of
waste generated per week. Organic waste, also referred to as organics, is food waste, green
waste, landscape and pruning waste, non -hazardous wood waste, and food -soiled paper waste
that is mixed in with food waste. This law phases in the recycling of commercial organics over
time. Reducing the amount of organic materials sent to landfills and increasing the production of
compost and mulch are part of the AB 32 (California Global Warming Solutions Act of 2006)
Scoping Plan.
Staff requests the City Council consider approving the requested rates for Burrtec (rate sheet
attached) for commercial organics recycling service. Local businesses can choose to divert their
organic waste in any number of ways, including recycling organic waste through Burrtec, selling
the organic waste to a third -party hauler, donating their food to food banks/food rescues, back
hauling organic waste to a processing facility, composting on site, or donating the food waste for
livestock feed. The City is required to provide outreach and education to businesses about AB
1826. Staff will also review the program each year and provide data to California Department of
Resources Recycling and Recovery, as required by the statute. If the voluntary organics
recycling rates are approved, staff will review this voluntary program on an annual basis, as part
of future agenda items considering solid waste rate adjustments.
Burrtec's services run six days per week for trash, green waste, and recycling. The rate sheet in
the Amendment shows only Monday through Saturday service, as no commercial customers
require Sunday services at this time.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
None
ATTACHMENTS
Waste Management Resolution
Waste Management Rate Methodology
Waste Management Request Letter
Burrtec Resolution
Burrtec Rate Methodology
Burrtec Request Letter
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