Resolution No. 7506 Setting Refuse and Recyclable Service Rates June 7, 2022
DATE: June 6, 2023
TO: Honorable Mayor and City Council
FROM: Paul Cranmer, Public Works Services Director
By: Briget Arndell, Environmental Services Manager
SUBJECT: RESOLUTION NO. 7506 SETTING SERVICE RATES FOR THE
COLLECTION OF RESIDENTIAL REFUSE AND RECYCLABLES
PURSUANT TO SECTION 5120.7 OF THE ARCADIA MUNICIPAL CODE FOR FISCAL YEAR 2023-24
CEQA: Not a Project
Recommendation: Adopt
SUMMARY
In accordance with the Residential Refuse and Recycling Agreement, Waste Management Inc. (“WM”) is entitled to receive annual rate adjustments that are subject to staff review and City Council approval. W aste Management has submitted a request to adjust the single family and multi-family refuse rates by 7.62% for Fiscal Year 2023-24 to accommodate the increase in services due to SB 1383 mandates . Even with the proposed rate adjustment, the City’s residential refuse rates will remain among the lower half of rates in the San Gabriel Valley compared to cities with similar services. It is recommended that the City Council approve Resolution No. 7506 , which will set service rates for the collection of residential refuse and recyclables.
BACKGROUND
Waste Management (“WM”) has been the City’s exclusive residential and multi -family refuse and recycling hauler since 1999. The Residential Refuse and Recycling Agreement (“Agreement”) was executed in March 2009 and included a seven-year term, which expired on June 30, 2016. I n October 2013, the City Council executed the First Amendment to the Agreement for an additional five years through June 2021. On June 15, 2021, the City Council approved the Second Amendment to the Agreement with WM and approved a five -year rate adjustment schedule in accordance with Proposition 218 requirements. The new agreement included the following:
• An Administrative Fee – a fee that the City can charge for administering the contractor agreement;
• New and/or enhanced services such as a community mulch giveaway event; two community document shredding events; bins for tree trimming and miscellaneous
Resolution No. 7506 Setting Refuse and Recyclable Service Rates June 7, 2022
debris removal at sites designated by the City; and trash and recycling collection for five non-City events;
• 10-year term expiring on June 30, 2031;
• Compliance with new laws and regulations (AB 341, AB 1826, and SB 1383) requiring cities and counties, including the City of Arcadia, to develop and implement new stringent organics recycling programs impacting all solid waste generators.
The amended contract also required that WM receive City Council approval for annual rate adjustments subject to the new rate adjustment formula. The new rate Adjustment Formula included two indices: a Disposal/Diversion Component and a Service Component. The new methodology is easier for all pa rties and interested persons to understand and more accurately reflects cost parameters to the waste hauler. This is the second year of the approved rate adjustment schedule for single -family and multi-family rates.
DISCUSSION
On March 31, 202 3, WM submitted a request for a service rate adjustment . The Disposal/Diversion Component consist s of costs for tipping fees charged at landfills for trash, tip ping fees charged at composting facilities for green waste/food waste, and recycling fees at processing/recycling facilities, and is 40% of the weight in the calculation of the new rate. The Service Component is based on monthly percent changes in the Consumer Price Index (“CPI”) for Los Angeles-Long Beach-Anaheim between the current year and the pri or year and is given a 60% weight in the calculation of the overall adjustment of the new rate. Table 1 shows the percentage breakdown and weighted amount that is accounted for in each index that makes up the rate adjustment:
Table 1: Rate Adjustment Formula
Rate Component Weight of Rate Adjustment Due
To Change In
Indices
Weighted Rate
Adjustment
Percentage
Disposal/Diversion 40% 7.87% 3.15%
Service 60% 7.46% 4.47%
TOTAL 7.62%
Staff worked with WM representatives and thoroughly reviewed and verified all rate adjustment data. In accordance with the Residential Refuse and Recycling Agreement, Waste Management is entitled to an annual rate adjustment subject to rate adjustment criteria in the Agreement. Waste Management’s request for a 7.62% rate adjustment for single and multi -family refuse collection services will be effective July 1, 2023 . As an example, the single-family refuse rate will increase from $33.46 to $35.98.
Resolution No. 7506 Setting Refuse and Recyclable Service Rates June 7, 2022
Exhibit “A” highlights the refuse rate survey conducted in May 2023 for cities with similar services in the San Gabriel Valley. The survey shows that Arcadia’s rates will remain in the lower half of rates as compared to other cities in San Gabriel Valley.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines , as it can be determined with certainty that it will have no negative impact on the environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
Residential refuse and recycling collection service rates are considered a fee-for-service that is paid directly to the contractor by the residential customer. The proposed rates will not impact the City’s budget ; however, customers will experience a 7.62% increase in fees in the coming year.
RECOMMENDATION
It is recommended that the City Council determine that this item is exempt under the California Environmental Quality Act (“CEQA”) ; and adopt Resolution No. 7 506 setting service rates for the collection of residential refuse and recyclables pursuant to Section 5120.7 of the Arcadia Municipal Code for Fiscal Year 2023-24.
Attachments: Resolution No. 7506
Exhibit “A” – Refuse Rate Survey
1 Exhibit "A"
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
SGV Refuse Rates 2023