HomeMy WebLinkAboutAGENDA REPORT 2018 1219 REG CCSA ITEM 08BCITY OF MOORPARK,
CALIFORNIA
City Council Meeting
of 12/19/2018
ACTION Adopted Reso No.
2018-3774, rescinding Reso
Nos. 2018-3704 and 2018-3719
BY M. Benson
B. Public Hearing to Consider a Resolution Establishing New Maximum Solid Waste
Rates to be Effective January 1, 2019, and Rescinding Resolution Nos. 2018 -
3704 and 2018-3719. Staff Recommendation: 1) Open the public hearing,
accept public testimony, and close the public hearing; and 2) Adopt Resolution
No. 2018-3774, adopting new maximum solid waste rates to be effective January
1, 2019. ROLL CALL VOTE REQUIRED
Item: 8.B.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Teri Davis, Program Manager
DATE: 12/19/2018 Regular Meeting
SUBJECT: Public Hearing to Consider a Resolution Establishing New Maximum
Solid Waste Rates to be Effective January 1, 2019, and Rescinding
Resolution Nos. 2018-3704 and 2018-3719
BACKGROUND
Moorpark Municipal Code Section 8.36.350 grants the City Council the authority to
establish, by resolution, a ceiling on the charges a solid waste franchisee may charge
for solid waste services at the conclusion of a public hearing. At the June 6, 2018 City
Council meeting, Council granted an exclusive Franchise Agreement to USA Waste of
California, Inc., a subsidiary of Waste Management Holdings, Inc. (Waste
Management), for the collection, management, and disposal of solid waste and
recyclables within the City limits. On July 1, 2018, the new Franchise Agreement
became effective as did new maximum allowable solid waste rates that Waste
Management could charge.
DISCUSSION
Prior to the July 1, 2018 rate increase, the solid waste fees had not increased since
January 1, 2011, as the solid waste franchisees agreed to voluntarily defer rate
increases until new agreements, or as it turned out, one exclusive new Franchise
Agreement, was negotiated. The rates that went into effect on July 1, 2018 were
essentially the 2018 rates intended to be implemented for the entire calendar year of
2018 but actually went into effect for only half of 2018 and ratepayers were relieved of
paying the 2018 increase throughout the entire year. The new Franchise Agreement
allows Waste Management to request an increase in the maximum rates on or before
November 15 of each year, beginning with November 15, 2018. On November 14,
2018, the City received such a request from Waste Management.
Item: 8.B.
21
Honorable City Council
12/19/2018 Regular
Page 2
The Franchise Agreement contains an explicit formula to be used whenever the
maximum rate is recalculated and takes into consideration a calculation of the
Consumer Price Index (CPI) which is defined by the United States Bureau of Labor
Statistics as “a measure of the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services”. The calculation,
referred to as the CPI adjustment in this report, specifies using 70% of the amount
derived by multiplying the previous (the current) maximum rate times the CPI
percentage rate for the September Los Angeles-Long Beach-Anaheim area compared
to the prior year. The calculation also considers a percentage of the adjusted tipping
fee. The tipping fee typically increases each January and in 2019, the Simi Valley
Landfill and Recycling Center (SVLRC) will be charging franchise haulers a tipping fee
of $65.45 per ton, which includes the County’s $3.15 surcharge, for the disposal of
collected solid waste material into the landfill. The tipping fee is set by SVLRC and is
intended to cover costs and provide profit for allowing materials to be hauled to, and
processed at, the landfill. The formula in the Franchise Agreement for the annual
adjustment is limited to no more than a 5% increase per year unless a justifiable
extraordinary adjustment is requested by Waste Management.
Pursuant to the Franchise Agreement, an extraordinary adjustment can be requested by
Waste Management when certain conditions exist, including impacts from recyclable
materials market conditions. The California solid waste industry is required to comply
with new contamination standards recently established by the Chinese government
whereby recyclable commodities may only have a certain amount of contamination, or
the recyclable will not be accepted in China. For example, a recyclable pizza box
should be mostly cardboard without food waste material attached. This results in
domestic recycling companies, such as Waste Management, spending more for
processing collected material prior to exporting the material to China, driving up the cost
of doing business. A secondary condition affecting costs is that recycling companies
are expected to have fewer options to sell materials, thereby reducing the prices
previously received. Waste Management is only requesting an extraordinary adjustment
for residential rates to account for the added expenses of cleaning recyclable materials
prior to export. This extraordinary adjustment will add $0.17 to the residential CPI
adjustment. Even though Waste Management is forgoing a request for an extraordinary
adjustment on commercial rates, the same extraordinary pressures that apply to
residential recyclables affect commercial recyclables.
Waste Management originally requested an extraordinary adjustment for both
residential and commercial rates, to compensate for the rising costs of processing
recyclable material coupled with a decrease in the value of recyclable material, which
would have increased rates by more than 5%, ranging from approximately 7 – 40% rate
increase, for commercial customers. During discussions between staff and Waste
Management, both parties agreed that additional large increases on commercial
recycling rates, especially when rates were recently increased by quite a large margin in
July, would be burdensome. For example, some commercial users would experience
22
Honorable City Council
12/19/2018 Regular
Page 3
an increase of more than $300 per month. The decision was made by Waste
Management to request the extraordinary adjustment for residential rates only. The
requested rate increase using the CPI adjustment is under 5% for all services. With an
extraordinary adjustment of $0.17 per month added to all residential service accounts,
the increase for residential services will still fall below a 5% increase. Waste
Management determined the extraordinary adjustment of $0.17 by taking the $5.00 per
ton, or 10% of $50.00 per ton, increase for processing recycled material during 2018
and applying it to the tonnage of residential recyclable material typically collected. The
$0.17 is expected to provide approximately $20,000 more than the CPI adjustment to
Waste Management in 2019 and will be used as compensation for the escalating costs
associated with processing recyclable materials.
Table 1 illustrates a snapshot of the proposed rate increase based off of the request for
increase the City received from Waste Management. All of the maximum rates being
proposed are provided in Exhibit 1 of the attached resolution.
Table 1: Comparison of Moorpark Current and Proposed Rates
Customer Type Current
Rate
Proposed
Rate Difference Percentage
Residential, Standard Service $30.63 $31.95 +$1.32 4.3%
Residential, Standard Service
Senior $25.64 $26.77 +$1.13 4.1%
Commercial Trash
(3.0-cu. yd. bin, 1x/ week) $168.50 $175.07 +$6.57 3.9%
Commercial Recycling
(3.0-cu. yd. bin, 1x/week) $113.75 $116.88 +$3.13 2.8%
Inflation is on an upward swing, which is why the request for a rate increase is relatively
large. The Moorpark Franchise Agreement is similar to the Simi Valley Franchise
Agreement with GI Industries, a subsidiary of Waste Management Holdings, Inc. Simi
Valley will also be considering a 2019 rate increase this month. Simi Valley’s proposed
rates are expected to include a $1.35 increase from $29.88 to $31.23 for standard
monthly residential services. The City of Thousand Oaks anticipates a 2019 rate
increase for standard monthly residential services from $32.35 by $1.17 to $33.52.
Even though Thousand Oaks has higher rates, the increase is lower than Moorpark’s,
because Moorpark has slightly higher Assembly Bill 939 (AB 939) fees and franchise
fees. AB 939 requires, among other things, the City to implement a solid waste
management plan, maintain the plan, inspect facilities, and divert recyclables from
landfills. AB 939 allows the City to impose AB 939 fees in solid waste rates that
reimburse some of the City’s costs for implementing AB 939 requirements. A benefit of
having higher AB 939 and Franchise fees is that Moorpark can continue providing more
23
Honorable City Council
12/19/2018 Regular
Page 4
services such as E-Waste and Paper Shredding days and Neighborhood Enhancement
Cleanups.
The majority of the proposed rate increases reflect a change of 2.75 - 3.9%, and none
of the proposed rates exceed 5%. After applying the proposed rate increase, Moorpark
solid rates will still be among the lowest in the region, and residents will still continue to
receive greater services as described above.
Staff concurs with Waste Management’s assessment of escalating costs associated
with exporting recycled materials and recommends the City Council approve the
proposed rates which include an adjustment for CPI and an additional adjustment
related to recycling for residential rates.
FISCAL IMPACT
By increasing the solid waste rates, the City will see a very slight increase in the
franchise fee paid by Waste Management to the City.
STAFF RECOMMENDATION ROLL CALL VOTE
1) Open the public hearing, accept public testimony, and close the public hearing; and
2) Adopt Resolution No. 2018-____, adopting new maximum solid waste rates to be
effective January 1, 2019.
Attachment: Resolution
24
RESOLUTION NO. 2018-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, UPDATING THE SOLID
WASTE COLLECTION SERVICE FEE SCHEDULE AND
RESCINDING RESOLUTION NOS. 2018-3704 AND 2018-
3719
WHEREAS, the City provides residential and commercial solid waste and
recycling collection services; and
WHEREAS, Moorpark Municipal Code Section 8.36.350 grants the City Council
the authority to establish, by resolution, a ceiling on the amounts of charges a
franchisee may charge for solid waste at the conclusion of a public hearing; and
WHEREAS, on June 6, 2018, the City Council granted an exclusive Franchise
Agreement to USA Waste of California, Inc., a subsidiary of Waste Management
Holdings, Inc. (USA Waste), for the collection, management, and disposal of solid waste
and recyclables within the City limits; and
WHEREAS, the Franchise Agreement allows USA Waste to request a rate
increase in November of every year in which the Franchise Agreement is in effect; and
WHEREAS, USA Waste submitted to the City a request for a 2019 rate increase
in compliance with the Franchise Agreement; and
WHEREAS, at a duly noticed public hearing on December 19, 2018, the City
Council took public testimony, closed the hearing, and declared its intention of
maintaining reasonable rates for collection, management, and the disposal of solid
waste and recyclables within the City limits, with the revised rates to be effective on
January 1, 2019.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Effective January 1, 2019, the maximum solid waste service rates
that may be charged by a franchisee shall be as shown in Exhibit 1.
SECTION 2. The annual Self-Haul Exemption Permit fee shall continue to be
$60.00 for the initial application for an annual Self-Haul Exemption Permit and $30.00
for an annual Self-Haul Exemption Permit renewal. Residents who qualify as seniors,
age sixty-two (62) or older, receive a twenty percent (20%) discount on both the initial
application for an annual Self-Haul Exemption Permit and renewal fees.
SECTION 3. This resolution shall be effective on January 1, 2019.
SECTION 4. Resolution No. 2018-3704 is hereby rescinded in its entirety upon
the effective date of this resolution.
25
Resolution No. 2018-____
Page 2
SECTION 5. Resolution No. 2018-3719 is hereby rescinded in its entirety upon
the effective date of this resolution.
SECTION 6. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 19th day of December, 2018.
________________________________
Janice S. Parvin, Mayor
ATTEST:
___________________________________
Maureen Benson, City Clerk
Attachment: Exhibit 1 – Maximum Rates Effective January 1, 2019
26
Resolution No. 2018-____
Page 3
EXHIBIT 1 – MAXIMUM SOLID WASTE COLLECTION SERVICE RATES
EFFECTIVE JANUARY 1, 21019
Residential Service Rates
BASE SERVICE
Option A1: Regular Full Service Rate .............................................. $ 30.6331.95 per
month
• 64-gallon trash cart
• 64-gallon recyclables cart
• 96-gallon yard trimmings cart
Option A2: Senior Full Service Rate (62+ years) ............................. $ 25.6426.77 per
month
• 64-gallon trash cart
• 64-gallon recyclables cart
• 96-gallon yard trimmings cart
Option B1: 32-Gallon Service Rate .................................................. $ 25.6426.77 per
month
• 32-gallon trash cart
• 64-gallon recyclables cart
• 64-gallon yard trimmings cart
Option B2: Senior 32-Gallon Service Rate ....................................... $ 21.4622.44 per
month
• 32-gallon trash cart
• 64-gallon recyclables cart
• 64-gallon yard trimmings cart
Option C1: Limited/No Yard Trimmings Rate ................................... $ 21.8022.78 per
month
• 32-gallon trash cart
• 64-gallon recyclables cart
• No yard trimmings cart
Option C2: Senior Limited/No Yard Trimmings Rate ........................ $ 21.4622.44 per
month
• 32-gallon trash cart
• 64-gallon recyclables cart
• No yard trimmings cart
27
Resolution No. 2018-____
Page 4
SERVICE UPGRADES
1. Trash Service Upgrades
a. Upgrade trash cart from 32-gallon to 64-gallon ............ $ 3.353.48 per
month
(Only available with Options C1, C2)
b. Upgrade trash cart from 64-gallon to 96-gallon ............ $ 3.353.48 per
month
(Only available with Options A1, A2)
c. Additional 64-gallon trash cart ..................................... $ 5.595.81 per
month
(Only available with Options A1, A2)
d. Additional 96-gallon trash cart ..................................... $ 8.949.29 per
month
(Only available with Options A1, A2)
2. Recycling Service Upgrades
a. Upgrade recycling cart from 64-gallon to 96-gallon ..... $ 1.121.15 per
month
b. Additional 64-gallon recycling cart ............................... $ 2.792.91 per
month
c. Additional 96-gallon recycling cart ............................... $ 3.353.50 per
month
d. Downgrade recycling cart from 64-gallon to 32-gallon . No Rate Change
3. Yard Trimmings Service Upgrades
a. Upgrade yard trimmings cart from 64-gal. to 96-gal. .... $ 2.232.32 per
month
b. Additional 96-gallon yard trimmings cart ...................... $ 3.353.48 per
month
OTHER CHARGES
Customer Service Level Changes .......................................... $ 5.856.01 per
request
Move In/Move Out Service ..................................................... $ 18.7819.51
Additional Bulky Item Pickup .................................................. $ 28.2229.00 per
item
(Two pickups of up to three items each per year are free)
28
Resolution No. 2018-____
Page 5
Commercial Service Rates
DISCARD BIN RATES
Option A: One 1.5 Cubic-Yard Discard Bin
a. Pick up one time per week ................................................ $151.07156.96 per
month
b. Pick up two times per week ............................................... $255.59265.55 per
month
c. Pick up three times per week ............................................ $360.10374.14 per
month
d. Pick up four times per week .............................................. $464.55482.66 per
month
e. Non-contracted 1.5 cubic-yard pickup ............................... $ 64.0066.5
f. Compacted 1.5 cubic-yard pickup ..................................... $302.14313.92
Option B: One 3.0 Cubic-Yard Discard Bin
a. Pick up one time per week ................................................ $168.50175.07 per
month
b. Pick up two times per week ............................................... $290.42301.74 per
month
c. Pick up three times per week ............................................ $413.87430.01 per
month
d. Pick up four times per week .............................................. $534.23555.06 per
month
e. Pick up five times per week ............................................... $656.15681.73 per
month
f. Pick up six times per week ................................................ $778.06808.39 per
month
g. Non-contracted 3.0 cubic-yard pickup ............................... $ 72.7175.54
h. Compacted 3.0 cubic-yard pickup ..................................... $336.99350.13
Option C: One 4.0 Cubic-Yard Discard Bin
a. Pick up one time per week ................................................ $185.89193.14 per
month
b. Pick up two times per week ............................................... $325.18337.86 per
month
c. Pick up three times per week ............................................ $464.58482.69 per
month
d. Pick up four times per week .............................................. $603.91627.46 per
month
e. Pick up five times per week ............................................... $743.24772.22 per
month
f. Pick up six times per week ................................................ $882.64917.05 per
month
g. Non-contracted 4.0 cubic-yard pickup ............................... $ 81.3484.51
h. Compacted 4.0 cubic-yard pickup ..................................... $371.78386.27 29
Resolution No. 2018-____
Page 6
64-Gallon Foodwaste Cart
a. Pick up one time per week ................................................ $ 62.7165.17 per
month
b. Pick up two times per week ............................................... $125.42130.35 per
month
c. Pick up three times per week ............................................ $188.15195.54 per
month
d. Pick up four times per week .............................................. $250.86260.72 per
month
e. Pick up five times per week ............................................... $313.57325.89 per
month
RECYCLING/COMPOSTING BIN RATES
Option A: One 1.5 Cubic-Yard Recycling or Composting Bin
a. Pick up one time per week ................................................ $ 82.5884.85 per
month
b. Pick up two times per week ............................................... $165.23169.78 per
month
c. Pick up three times per week ............................................ $247.78254.60 per
month
d. Pick up four times per week .............................................. $330.39339.49 per
month
e. Pick up five times per week ............................................... $412.97424.34 per
month
f. Pick up six times per week ................................................ $495.60509.24 per
month
g. Non-contracted 1.5 cubic-yard pickup ............................... $ 56.8758.44
Option B: One 3.0 Cubic-Yard Recycling or Compost Bin
a. Pick up one time per week ................................................ $113.75116.88 per
month
b. Pick up two times per week ............................................... $227.37233.63 per
month
c. Pick up three times per week ............................................ $341.21350.60 per
month
d. Pick up four times per week .............................................. $454.81467.33 per
month
e. Pick up five times per week ............................................... $568.65584.30 per
month
f. Pick up six times per week ................................................ $682.36701.14 per
month
g. Non-contracted 3.0 cubic-yard pickup ............................... $ 79.2081.38
Option C: One 4.0 Cubic-Yard Recycling or Compost Bin
30
Resolution No. 2018-____
Page 7
a. Pick up one time per week ................................................ $140.17144.03 per
month
b. Pick up two times per week ............................................... $280.40288.12 per
month
c. Pick up three times per week ............................................ $420.59432.17 per
month
d. Pick up four times per week .............................................. $560.84576.28 per
month
e. Pick up five times per week ............................................... $701.00720.30 per
month
f. Pick up six times per week ................................................ $841.25864.41 per
month
g. Non-contracted 4.0 cubic-yard pickup ............................... $ 97.33100.01
TEMPORARY BINS/ROLL-OFF DROP BOXES
Temporary 3.0 Cubic-Yard Bin ............................................... $133.68138.89
Redelivery and Reinstatement ................................................ $ 31.2932.15
Roll-Off Disposal Bin .............................................................. $231.24240.26
(Plus Landfill/Recycling Fee)
Roll-Off Recycling Bin ............................................................. $231.24237.61
(Market Value Negotiable)
Roll-Off Compactor ................................................................. $462.48480.51
(Plus Landfill/Recycling Fee)
Roll-Off Recycling Compactor ................................................ $462.48475.21
(Market Value Negotiable)
31
Resolution No. 2018-____
Page 8
MISCELLANEOUS SERVICES
A. Scout Service .................................................................... Case by Case
B. Special Bin Lids (Locking/CBL) (one-time fee) .................. $ 35.3536.32
C. Deodorizing/Replacing Bin (1x per calendar year) ............ No Charge
D. Additional Deodorizing/Replacing Bin ............................... $ 35.3536.32
E. Charge for Returned Checks ............................................. $ 17.6818.17
F. Charge for Delinquent Payments ...................................... $ 5.896.05
G. Credit Card Convenience Fee (by Phone) ........................ $ 5.896.05
H. Extra Pick Up .................................................................... $ 3.563.70 per
bag
$ 5.926.15 per
cart
I. Extra Collection on Non-Scheduled Pick Up Day .............. $ 29.6430.80
J. Residential Cart Re-Delivery Fee ...................................... $ 31.2932.15
K. Temporary Roll-Off Extra Day Fee .................................... $ 11.8612.19 per
day
(post 7 days, trash only)
L. Temporary 3.0 Cubic-Yard Bin Rate ................................. $ 11.8612.19 per
day
(post 7 days, trash only)
M. Permanent Customer Roll-Off Extra Day Fee ................... $ 11.9012.23 per
day
(post 30 days, trash only)
N. Solid Waste Bin Locking/Unlocking Fee ............................ $ 23.8124.47 per
month
O. Overage Fee ..................................................................... $ 10.0010.28
P. Contamination Fee ............................................................ $100.00102.72
32