HomeMy WebLinkAbout1992-04-29 - AGENDA REPORTS - REFUSE FRANCHISE AGMT (2)CITY OF SANTA CLARITA
INTEROFFICE MEMORANDUM
TO: Mayor Klajic and Councilmembers
FROM: Jeff Kolin, Deputy City Manager
DATE: April 29, 1992
SUBJECT: REFUSE FRANCHISE AGREEMENT
Overview
The residential integrated waste management agreement granted to Atlas, Blue Barrel, and
Santa Clarita Disposal companies gives them exclusive collection rights to all residential solid
waste, greenwaste, and recyclables in the City of Santa Clarita. The contract provides:
single family residents with weekly refuse collection of one 90 gallon toter, two 32 gallon
barrels or sacks, collection of two 2' x 4' bundles of greenwaste, and twice a month
collection of their recyclables; multi -family residents with weekly refuse collection as well as
the placement of an appropriate number of recycling containers at their complex; and the
following "free" special collection programs - Pride Week cleanup day, Christmas Tree
Recycling, Telephone Book Recycling, and Special Pickups. For detailed information on
these programs see Attachment A.
The City's recycling program is currently serving approximately 31,000 single family
households with a 70% participation rate, and 9,000 multi -family households. In addition to
the aforementioned programs, Silver Circle Recycling Awards are given out each quarter to
participating recyclers, thanking them for a job well done. (Attachment B)
Franchise Fee
The Franchise Fee is defined as the fee or assessment paid to the City by a hauling company
solely because of its select status as Grantee. A Franchise Fee of of ten percent (10%) of the
Grantee's gross revenues shall be paid to the City fifteen (15) days after the end of each
calendar month beginning January 1, 1992 and continuing thereafter for the duration of the
agreement.
Franchise Fees were originally slated to provide the City with funding for an annual
Household Hazardous Waste Roundup and to pay for road maintenance required to offset
the impact of heavy refuse vehicles on City streets. Subsequent to the adoption of the
franchise, the county imposed an $.86 per ton solid waste management fee at all landfills
located in unincorporated areas of the county; $.56 of this $.86 fee is earmarked to fund a
mobile HHW collection program that could begin serving our City before the end of the
year. Franchise funds originally targeted for an HHW Roundup could, therefore, -be made_
available for other solid waste programs.
Agenda Item:
Page 2
Landfill Tipping Fees
Section 21, subsection A, article 3 of the Franchise states that the grantee may recover from
each customer a pro -rata portion of gate, tipping, AB 939, local enforcement agency, and
other fees charged by landfills which may increase after the date of the agreement.
Reference Attachment C for a detailed breakdown of the tipping fee increases at the landfill
since the franchise agreement went into effect on May 1, 1991.
Rate Adjustments
Section 21, subsection B states that service rates. may also be increased/adjusted annually to
reflect changes in the producer price index (PPI): This action would be predicated by a City
Council resolution and become effective on January 1 of each calendar year. The PPI
adjustment shall be equal to the amount derived by multiplying the previous rate by the
percentage increase/decrease in the PPI during the previous calendar year. The first PPI
adjustment was scheduled to occur January 1, 1992.
Commercial Refuse & Recycling Collection
In order to fully comply with AB 939, the California Integrated Waste Management Act of
1989, the City must now determine the appropriate tack to take in regards to the collection of
commercial and industrial refuse. Several options are available, foremost among them the
issuance of permits to operate in the City, an open bid process, or the award of a
commercial hauling franchise to all existing commercial refuse service providers, absent the
bid process.
Current economic conditions must be taken into consideration when this decision is made.
Public Works staff continues to receive numerous calls from citizens regarding the residential
franchise agreement and monthly service charges. Awarding a commercial franchise
contract to any, or all, of our franchised residential haulers, or to companies currently
collecting commercial refuse in the City could conceivably stabilize residential rates. A
complete evaluation of the strengths and weaknesses of each approach, including proposals
from existing franchise holders; is essential prior to determining the final approach for
commercial and industrial refuse collection.
It has been determined that more information is necessary before a viable decision can be
made concerning the award of a commercial collection franchise. Staff recommends that the
consulting firm of Hilton, Frankopf & Hobson be engaged to conduct a comprehensive rate
review and disposal fee study. This firm provides service exclusively to government
agencies and specializes in solid waste rate setting, cost of service studies, budgeting and
financial planning. Their expertise will result in a study that will provide Council with a
solid economic analysis and a comparison, made by an objective outside consultant, of the
strengths and weaknesses of the various approaches available to the City. This document
could also be referenced in response to citizen complaints pertaining to the selection process
that will be utilized by the City.
Page 3
ATTACEOW ENT A
1. Pride Week
During a one week period each year designated as Pride Week, a special collection day is
scheduled enabling residents to dispose of bulky items such as sofas, appliances, lumber, and
scrap metal at no charge. These types of bulky items are not collected at the curb per the
franchise agreement, and residents must, therefore, pay for a special pickup. Large refuse
collection bins are sited and taken to the landfill at no charge by the haulers, but disposal
charges at the landfill are paid for by the City. Pride Week 1992 is scheduled for April 21 -
April 27, with Saturday April 25 scheduled as a "free collection day" at six designated
locations throughout the city.
2. Christmas Tree Recycling
Christmas Trees are to be collected at the curb and at multi -family complexes, at no charge,
for two consecutive weeks immediately following Christmas Day each year. Our 1991
Christmas Tree Recycling program collected and chipped, for reuse as mulch or firebreak
material, 263 tons of Christmas Trees that previously would have been landfilled. This
program was a real success, generating positive feedback from the public and excellent press
coverage. Total cost to the City was $244.51 to have posters and flyers printed.
3. Telephone Book Recycling
Phone Books are to be collected at no charge and recycled once each year. Our November
1991 "mid -year" Telephone Book Recycling program collected over 2 1/2 tons of directories
for recycling. This year's program is scheduled to run from May 4 to May 15 immediately
following the April distribution of directories throughout the City, and includes the collection
of phone books at the curb, at multi -family units, and at six drop-off sites located
strategically throughout the City.
4. Special Pick -Ups
Atlas, Blue Barrel, and Santa Clarita Disposal companies provide 25 free "Special Pick-ups"
during each calendar year. This enables the City to allocate a free refuse pickup for
residents of the City in need of assistance.
ATTACEIMENT B
The Silver Circle Recycling Award Program entails the presentation of a $150 Savings Bond,
paid for by the hauler, to a selected resident of a multi -family and single family household in
each of the three franchised areas. The recipient also receives a Certificate of Appreciation
from the City and has their name engraved on a permanent plaque that hangs in City Council
Chambers.
Page 4
When the residential franchise went into effect on May 1, 1991 tip fees at the landfill were
$24.25 per ton and single family residents throughout the City were charged $16.85 per
month for service. On July 1, 1991 due to the imposition of new taxes at the landfill, the
monthly service charge was increased to $17.81,
Santa Clarita's three franchised hauling companies are asking permission from the City to
increase their monthly charges for refuse collection predicated on increased tip fees
(disposal charges) at Chiquita Canyon landfill. Following is a scenario of increases at the
landfill since May 1, 1991. Please note that the haulers have signed three year contracts
with Laidlaw which reward them with lower tip fees than those paid by regular credit
customers or cash customers at the gate.
May 1. 1991
When the franchise went into effect May 1, 1991 tip fees at the landfill were $24.15 per ton.
This represents a base rate of $20 per ton plus $4.15 in fees which break down as follows:
a. 12 % L. A. County business tax on base rate plus all fees/assessments
b. $1.00 annual CIWMB fee (Sher)
C. $.60 quarterly CIWMB fee (Fastin)
July 1. 1991
In July, landfill tip fees decreased as the CIWMB annual fee was reduced $.25. The tip fee
was $23.75 per ton, representing a base rate of $20 per ton plus $3.75 in fees which break
down as follows:
a. 12% L.A. County business tax on base rate of $20 plus all fees/assessments
b. $.75 annual CIWMB fee
C. $.60 quarterly CIWMB fee
September 15, 1991
In September landfill tip fees were increased to reflect a new L.A. County HHW fee, and a
$.04 Dept. of Health Services Local Enforcement Agency Inspection fee. The new tip fee
was $24.45 per ton, representing a base rate of $20 per ton plus $4.45 in fees which break
down as follows:
a. 11 % L. A. County business tax on base rate of $20 plus all fees/assessments
b. $.75 annual CIWMB fee
b. $.60 quarterly CIWMB fee
d. $.86 L. A. County Household Hazardous Waste fee
e. $.04 Dept, of Health Services LEA. inspection fee retroactive to August 1991
Page 5
May 1. 1992
In May, the tip fee will be increased to $28.89 per ton. This represents a base rate of $24
per ton, plus $4.89 in fees which break down as follows:
a. 11 % L.A. County business tax on base rate of $24 plus all fees/assessments
b. $:75 annual CIWMB fee
C. $.60 quarterly CIWMB fee
d. $.86 L.A. County Household Hazardous Waste fee
e. $.04 L.A. County Dept. of Health Services tax
Please note that the new disposal rate for Blue Barrel, per their contract with Laidlaw, went
into effect April 1, 1992 and does not go into effect for Atlas and Santa Clarita Disposal
until May 1, 1992.
PDL/agnda492