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HomeMy WebLinkAbout24 - Recycling Service FeeCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 24 July 22, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department David E. Niederhaus, Director, 949 - 644 -3055, dniederhaus(aD-city.newport- beach.ca.us SUBJECT: Recycling Service Fee ISSUE: Should the City approve Resolution No. 2003- authorizing the recycling service fee to be set at $2.66 per month per residential unit effective August 1, 2003 and rescind Resolution No. 2002 -39? RECOMMENDATION: Approve Resolution No. 2003- authorizing the recycling service fee to be set at $2.66 per month per residential unit effective August 1, 2003. Rescind Resolution No. 2002 -39. DISCUSSION: Background: Since 1990, the City Council has authorized an annual recycling service fee 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 and a 50% rate by December 31, 2000. A fine of up to $10,000 per day could be imposed on cities that fail to make the 50% mandate or a reasonable effort. City recycling rates for 1995 and 2000 were 51 % and 49 +% respectively. The recycling rate for 2001 was 49.7 %. The State granted the City attainment of the recycling goals in 2000 and 2001. Recycling Service Fee July 22, 2003 Page 2 City Resolution 90-47 set the first recycling service fee at $0.74 per month for FY 90 -91. During the subsequent twelve years, the fee has slowly increased to $2.46 per month in 2002. The only exception was the recycling service fee for 1997, which was $1.28 per month. It reflected a one time monthly rebate to residents receiving monthly City refuse collection services directed by the Council as a result of savings achieved by the renegotiation of the recycling contract. The current recycling service fee is $2.46 per month per residence and was adjusted by Council resolution in June 2002. 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, recycling plan development, and staff time) were added to this total, which is then divided by the number of residential units serviced by City collection crews. The only factor that will affect the proposed FY 03 -04 amount of the recycling service fee is a CPI adjustment of 3.7 %, which is a provision of the recycling contract. Landfill disposal fees remain the same for FY 03 -04 following a 1997 County -City agreement that stabilized landfill fees for a ten -year period. Staff estimates that approximately 39,500 tons of solid waste will be generated by City residents using City trash services in FY 03 -04. The cost to collect, transfer, recycle and dispose of the solid waste is estimated to be $5,181,643. Of that total, up to $1,660,000 will be paid to CRT, Inc. for transferring, recycling, and disposal of the solid waste stream. $856,633 of the $1,660,000 is the additional cost solely attributable to recycling activities or programs and will be collected as a recycling service fee from 26,793 residences on a monthly basis. The City currently pays $39.83 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 3.7% results in a new CRT, Inc. fee of $40.79 per ton. The CPI adjustment is multiplied by a lower base rate ($26.08 per ton) and not the $39.83 rate. The use of the base rate is a part of the contract language that staff sought to apply CPI increases only to the CRT, Inc. base net cost of operation and not to County landfill fees. The attached resolution provides for a recycling service fee of $2.66 per month for FY 03 -04 and a rescinding of Resolution No. 2002 -39. Recycling Service Fee July 22, 2003 Page 3 Newport Coast residents are exempt from the recycling surcharge since their refuse collection and associated services are provided by private contract. The City pays for residential refuse services for all Newport Coast single - family residences. This item was originally scheduled for the June 24, 2003 City Council Meeting. However, tt was brought to our attention that the number of homes being serviced by City refuse crews was possibly different than the number of homes that were being billed the recycling service fee. Additional field and office time was needed to ensure that the proper number of homes are being billed at the correct recycling service fee rate. City staff has verified the number of homes being serviced by City refuse crews and has verified that the number of homes serviced equals the number of homes being charged the recycling service fee. 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 City residential refuse collection costs during the annual recycling surcharge process. Accordingly, the monthly refuse collection costs are published as follows: FY 00 -01 (Actual) $13.31 /per residence FY 01 -02 (Actual) $13.33/per residence FY 02 -03 (Actual) $13.40 /per residence (Includes Newport Coast) FY 03 -04 (Proposed) $14.20 /per residence (Includes Newport Coast) Prepared by: Jere n& Hammond, Mana ement Assistant Submitted by: David E. Niederhaus, Director Attachments: Resolution No. 2003 -_ Modifying a Recycling Surcharge and Rescinding Resolution No. 2002 -39. RESOLUTION NO. 2003- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH MODIFYING A RECYCLING SERVICE FEE AND RESCINDING RESOLUTION NO. 2002-39. 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 39,500 tons of solid waste will be generated during Fiscal Year 2003 -04, that the cost of collecting, hauling, recycling, and disposing of that amount of solid waste would be $5,181,643, that the fees to be paid to CRT Inc. pursuant to the Recycling Agreement will be $1,660,000 and that the additional cost attributable solely to recycling is $856,633; and WHEREAS, the City Council has determined that the residential solid waste stream collected by City personnel is generated by, at most, 26,793 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 $2.66 per month on 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. follows: NOW, THEREFORE, the City Council of City of Newport Beach resolves as Pursuant to the provisions of Chapter 2.30 of the Newport Beach Municipal Code, a recycling service fee of $2.66 per month is hereby imposed, effective August 1, 2003. 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. 2002 -39 is hereby rescinded. ADOPTED this 22nd day of July, 2003. AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSTAINED, COUNCIL MEMBERS ABSENT, COUNCIL MEMBERS MAYOR ATTEST: CITY CLERK