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City Council Agenda
Item No. 4
May 23, 2000
TO: Mayor and City Council
FROM: General Services Director
SUBJECT: Recycling Service Fee
Recommendation
Approve the attached resolution authorizing the recycling service fee to be set at $2.26 per month
per residential unit effective July 1, 2000.
BackEround
Since 1990, the Council has authorized an annual recycling service fee (formerly known as a
"recycling surcharge ") to fund the additional expenses associated with meeting the State
recycling mandates.
The State required cities to achieve a 25% recycling rate by December 31, 1995 (which the City
did), and a 50% rate by December 31, 2000. A fine of up to $10,000 per day could be imposed
on cities which fail to make the 50% mandate.
Resolution 90 -47 set the first recycling service fee at $0.74 per month for FY 90 -91. During the
subsequent eight years, the fee slowly increased to $2.17 per month in 1999.
The recycling service fee for 1997 was $1.28 per month and reflected a one time monthly rebate
directed by the Council as a result of savings achieved by the renegotiation of the recycling
contract.
The current recycling service fee is $2.17 per month per residence and was adjusted with Council
approval in June 1999.
Historically, the calculation of the fee has been tied to the difference of costs between landfill
disposal and recycling expenses. Miscellaneous recycling related costs (public education, waste
studies, plan development, and staff time) were added to this total, which is then divided by the
number of units serviced.
Two significant factors will affect the proposed FY 00 -01 amount of the recycling service fee: a
CPI adjustment of 2.3 %, which is a provision of the recycling contract, and the new staffing of a
recycling coordinator. Landfill fees remain the same for FY00 -0 1 following a 1997 County -City
agreement that stabilized landfill fees for a ten -year period.
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Discussion
Staff estimates that approximately 40,500 tons of solid waste will be generated by City residents
using City trash services in FY 2000 -01. The cost to collect, transfer, recycle, and dispose of the
solid waste is estimated to be $4,441,437. Of that total, up to $1,543,050 will be paid to CRT,
Inc. for transferring, recycling, and disposal of the solid waste stream. $742,864 of the
$1,543,050 is the additional cost solely attributable to recycling and will be collected as a
recycling service fee from approximately 27,330 residences on a monthly basis.
The City currently pays $37.55 per ton of solid waste to CRT Inc. of Stanton for processing our
solid waste stream, recycling a minimum of 25% of the waste, and transporting and disposing of
the residue in a County landfill. A CPI adjustment of 2.3% results in a new CRT Inc. fee of
$38.10 per ton. The CPI adjustment is multiplied by a lower base rate ($23.80 per ton) and not
the $37.55 rate resulting in the $38.10 ton rate. The use of the base rate is a part of the contract
language that sought to apply CPI increases only to the CRT, Inc. base net cost of operation and
not to County landfill fees.
The proposed FY00 -01 Budget contains the new staffing of a Recycling Coordinator position.
The position was deleted in the mid- 1990's due to budget constraints. Funding for the new
position ($80,514) includes salary and benefits, vehicle, work station, radio /telephone, and a
computer. The estimated additional cost per household for the position and operating equipment
is $.24 per month. The position is considered vital in achieving the State mandate of 50%
recycling by December 31, 2000 and each successive year.
The attached resolution provides for a recycling service fee of $2.26 for FY 00 -01.
Annual Cost Disclosure - The Orange County Grand Jury conducted a study of "Solid Waste
Reduction Programs" in late 1997. The Grand Jury recommended that all cities in the County
publish an annual cost disclosure of refuse collection activities to their residents. As a result of
an earlier staff report, Council directed on April 27, 1998 the full disclosure of refuse collection
costs during the annual recycling surcharge process.
Accordingly the monthly refuse collection costs are published as follows:
FY 96 -97 (Actual)
$ 12.52 /per residence
FY 97 -98 (Actual)
$ 12.28 /per residence (Recycling contract rebate)
FY 98 -99 (Actual)
$ 11.95 /per residence (Decrease in estimated refuse tonnage)
FY 99 -00 (Estimated)
$ 12.96 /per residence
FY 00 -01 (Proposed)
$ 13.31 /per residence
Very respectfully,
David E. Niederhaus
Attachment: Resolution No. 00- — Modifying a Recycling Surcharge and Rescinding
Resolution No. 99 -39
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RESOLUTION NO. 2000-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH MODIFYING A RECYCLING SERVICE FEE
AND RESCINDING RESOLUTION NO. 99-39.
WHEREAS, the State of California has determined that the amount of solid waste
generated in the State, coupled with the diminishing landfill space and the potential adverse
environmental impacts of landfilling, create an urgent need for State and local agencies to enact and
implement aggressive new integrated waste management programs; and
WHEREAS, the Legislature has mandated each City and County to reduce the amount of
solid waste disposed of in landfills by recycling at least 50% of the solid waste stream by the end of
2000; and
WHEREAS, the Newport Beach City Council has enacted an ordinance which authorizes the
imposition of a recycling service fee subject to certain limitations; and
WHEREAS, the City of Newport Beach has entered into a written contract with CRT Inc.
pursuant to which the latter will accept the City's waste stream, recycle at least 25% of the contents,
and transport the remaining waste to a disposal site approved by law. The City Council has
determined that contracting with a private recycler represents the most economical way of satisfying
recycling requirements, will ensure that more waste is recycled than pursuant to curbside programs
which require resident's sorting of recyclables, and is much less costly than acquiring the equipment
and hiring the personnel necessary to implement a curbside recycling program; and
WHEREAS, the City Council has determined that approximately 40,500 tons of solid waste
will be generated during Fiscal Year 2000 -01, that the cost of collecting, hauling, recycling, and
disposing of that amount of solid waste would be $4,441,437, that the fees to be paid to CRT Inc.
pursuant to the Recycling Agreement will be $1,543,050 and that the additional cost attributable
solely to recycling is $742,864; and
WHEREAS, the City Council has determined that the residential solid waste stream
collected by City personnel is generated by, at most, 27,330 households. Accordingly, the additional
costs incurred by the City in conjunction with the recycling program can be recovered by imposing a
recycling service fee of $2.26 per month or persons receiving trash services from the City. This fee
represents the minimum amount the City could charge to recover the estimated reasonable cost to
provide recycling services for the City.
WHEREAS, the new recycling coordinator position is necessary to achieve the State
recycling mandate by managing all aspects of the City's recycling program.
NOW, THEREFORE, the City Council of City of Newport Beach resolves as follows:
1. Pursuant to the provisions of Chapter 2.30 of the Newport Beach Municipal Code, a
recycling service fee of $2.26 per month is hereby imposed, effective July 1, 2000.
2. The recycling service fee shall be the obligation of the person or persons responsible
for the payment of water service if water is supplied to the property by the City of Newport Beach
and, if water is not supplied by the City of Newport Beach, the fee shall be the responsibility of the
owner of the property; and
3. The recycling service fee shall not be paid by persons or businesses whose rubbish is
collected by private haulers nor shall any portion of the fee collected be used to defray expenses that
would be incurred by the City in collecting, hauling, and disposing of solid waste.
4. Resolution No. 99 -39 is hereby rescinded.
ADOPTED this 23rd day of May, 2000.
MAYOR
ATTEST:
CITY CLERK