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June 14, 2022
ITEM TITLE
Organic Waste Collection Service Rates: Approve New and Adjusted Rates for Organic Waste Collection Services to Cover the Costs of Compliance with the State of California’s Organic Waste Reduction Regulations and Amend the City’s Master Fee Schedule Accordingly.
Report Number: 22-0008
Location: Citywide
Department: Economic Development
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines.
Recommended Action
Council conduct the public hearing, receive tabulated results of written protests, consider all written protests, and if the number of written protests submitted is less than a majority of the parcels duly noticed, adopt the resolution accepting the results and approving the proposed new and adjusted rates for organic waste collection services. If approved, Staff also recommends that the Council approve an update to the City’s Master Fee Schedule, Chapter 17, Solid Waste & Recycling, to reflect the approved maximum rates.
SUMMARY
In order to meet the State of California’s methane emission reduction targets for short -lived climate pollutants, Senate Bill 1383 (SB 1383) requires local agencies to establish new food recovery and organic waste collection programs to prevent the disposal of organic waste into landfills. The City has worked with the City’s franchise solid waste hauler, Republic Services (Republic), to review and evaluate appropriate new and adjusted rates to implement a food recovery and organic waste collection program that meet s the requirements of SB 1383. On September 14, 2021, the City Council conditionally approved a request from Republic for proposed new and adjusted organic waste collection service rate s. As a condition to the new and adjusted rates taking effect, Council directed staff to conduct proceed ings necessary to implement the proposed new and adjusted rates. This Item is intended to meet that directive and allow for Council to receive tabulated results of written protests, consider all written protests , and if the number of written P a g e | 2
protests submitted is less than a majority of the parcels duly noticed, adopt a resolution accepting the results and approving the proposed new and adjusted rates.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA) and it has been determined that the activity is not a “Project” as defined under Section 15378 of the state CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
On September 14, 2021, the Chula Vista City Council conditionally approved a request from Republic Services (Republic) to implement new and adjust ed rates for organic waste collection services as mandated by SB 1383 regulations for residential and commercial customers. Republic’s proposed new and adjusted rates are based on the projected costs to implement the organic waste collection service program. City staff, in conjunction with City’s third-party consultant, reviewed and analyzed the proposed new and adjusted rates and determined them to be equitable rates for the level of service being provided. See Attachment A – Hidden Resources’ Comprehensive Analysis of Republic Services’ Proposed Food Waste Collection Rates and Operations Plan and Attachment B - September 14, 2021 City Council Meeting, Item 7.1, Staff Report and Resolution. As with other solid waste collection rates, Republic will continue to be responsible for the billing and collection of the organic waste program rates. As a condition to the rates becoming effective, Council directed staff to conduct proceedings necessary to implement the proposed rates. See Attachment B. The public notice and public hearing that are the subject of this Item are intended to meet that directive.
On November 15, 2021, Chula Vista property owners and Chula Vista Republic Services customers of record were provided notice, via United State s Postal Service mail , of a public hearing scheduled for January 11, 2022 to consider proposed new and adjusted organic waste collection service rates for residential and commercial services. The hearing notice started a period for property owners and customers to protest the proposed new or adjusted rates, and provided information on how to submit a protest.
The public hearing was originally scheduled for January 11, 2022 but was thereafter continued and ultimately canceled and a new public hearing was subsequently scheduled and noticed for June 14, 2022.
Chula Vista property owners and Republic Services customers of record within Chula Vista were again provided notice, via United States Postal Service m ail, of the public hearing scheduled for June 14, 2022 to consider the proposed new and adjusted organic waste collection service rates for residential and commercial services. See Attachment C – June 14, 2022 Public Hearing notice At the duly noticed pub lic hearing on June 14, 2022 , the City Council will receive a final tabulation of and consider written protests received by the City Clerk. If the number of written protests submitted is less than P a g e | 3
a majority of property owners duly noticed, the proposed new and adjusted rates may be approved by the City Council.
Approving the new and adjusted rates is necessary for compliance with SB 1383 regulations. The new and adjusted rates will allow Republic to implement the organic waste collection service program needed for the City comply with SB 1383 mandates and avoid enforcement actions by the State of California against the City, including potential penalty amounts of up to $10,000 per day. The regulations require the City to have an available program as of January 1st of 2022 and the City may be subject to accumulated penalties dating back to the beginning of 2022. See Attachment D – SB1383 Regulations.
Approval of the new and adjusted rates will enable Republic to launch a fully SB 1383-compliant organic waste collection service program to collect and process food waste and other organic waste placed by residents and businesses in currently available green yard waste carts/bins. The collected material will be transported to a newly constructed composting facility at the Otay Landfill to be processed into soil - amending compost material that can be used by the agricultural and land management industries. Using compost in agricultural and land management practices helps soil retain moisture, bring back lost nutrients, and sequester carbon that otherwise would be released into our atmosphere. Food waste from businesses will be collected separately and will be transported to a pre-processing facility being constructed at the Otay Landfill which will reduce contamination and adjust the particle size, moisture content, and carbon/nitrogen ratio to optimal conditions.
Benefits to the City upon approval of the new and adjusted rates. As part of the launch of the new organic waste collection service program , Republic Services will also provide the City with additional resources to comply with other elements of the SB 1383 regulations. SB 1383 requires the City to buy and use 13,920 tons of compost per year. Republic has agreed to provide that amount of compost to the City at no cost. The compost will be used in all City -approved projects, compost give away events, and in City parks, medians, trails, and open spaces. Receiving this material at no cost wil l allow the City to avoid costs of purchasing these materials, resulting in operating cost savings for the Public Works and Community Services Departments.
Republic will also distribute a kitchen food caddie to every single -family and multi -family residential customer. Kitchen caddies are kitchen countertop containers that are used to collect and store food waste to then deliver contents to outdoor food and yard waste containers. Giving residents a container at no cost has proven successful in other programs around the State. The caddies also serve as a daily visual reminder of the importance separating food waste from trash.
Another SB 1383 mandate is to ensure that there are sufficient edible food recovery resources in the City. In order to help comply with that mandate, Republic will offer $50,000 per year in assistance to food recovery services and organizations in Chula Vista. This will assist edible food recovery services and organizations to secure funding for resources such as refrigerated vehicles, storage, technology, and staff to help collect edible food from local generators like supermarkets, restaurants, and food distributors, and properly store and distribute edible food to Chula Vista residents in need.
Republic will also assist the City with container contamination minimization and oversight standards set forth in SB 1383 regulation s. Republic will provide yearly route reviews for prohibited container contaminants or will perform waste composition studies at least twice per year. Republic will also deploy P a g e | 4
an extensive education campaign to familiarize residents and businesses with the new program requirements through promotional materials to be distributed periodically . These resources will further assist the City to comply with the education elements of the SB 1383 regulations.
City staff, in conjunction with a third-party City consultant, reviewed and analyzed Republic’s proposed new and adjusted rates to ensure that the rates do not exceed what is reasonably anticipated to be necessary to cover the costs required to provide the new organic waste collection services mandated by SB 1383 . The review was performed by factoring in the twenty five percent (25%) franchise fee that Republic pays the City so that the analysis would be an equitable and accurate comparison to fees and rates from other cities. The review further included a comparative analysis of other cities within our region that were serviced by companies like EDCO Recycling and Disposal, the waste collection contractor that services the most other cities in the County. Staff, in conjunction with the third-party City consultant, analyzed the new and adjusted rate proposals and determined that they were reasonable and did not exceed what is reasonably anticipated to be necessary to cover the costs for the new organic waste collection services, including the requisite capital expenditures and other one-time and on -going expenses needed to timely and adequately commence and implement the program. The analysis further determined that the new and adjusted rates are comparable to other programs throughout the state, but still 8 -9% below the average of the local cities analyzed. The technology and processing to be used by Republic was also evaluated by City staff and the City’s third-party consultant who further determined that the costs associated with providing the new organic waste collection services were comparable to the investment in e quipment and resources. The evaluation also determined that this technology was the most effective to process Chula Vista’s material to provide a value -added compost.
It is important to reiterate that the proposed organic waste collection program is necessary to comply with the SB 1383 regulations and avoid State of California enforcement that could escalate to the imposition of fines against the City in an amount of up to $10,000 per day. Additionally, C alRecycle, the State agency responsible for the oversight and enforcement of this regulation has officially notified the City of its non - compliance status because the City has not fully approved organic waste collection service rates, and has referred the City to its Enforcement Branch for further investigation.
Staff recommends that Council conduct the public hearing, receive tabulated results of written protests, consider all written protests, and if the number of written protests submitted is less than a majority of the parcels duly noticed, Council adopt the resolution accepting the results and approving the proposed new and adjusted organic waste collection service rates. The new and adjusted rates identified in this Item relate solely the organic waste collection service program identified herein and do not re-adopt any other solid waste collection rates previously approved or adopted. If approved, the new and adjusted rates would be effective on July 1, 2022 and would be subject to minist erial, automatic increases on an annual basis for a period not-to-exceed five (5) years.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real propert y holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware and has not been informed by any C ity Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
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CURRENT-YEAR FISCAL IMPACT
If approved, the proposed action will generate approximately $555,000 during the second half of the fisc al year in additional revenue to the general fund from collected franchise fees.
ONGOING FISCAL IMPACT
If approved, the proposed action will generate approximately $1,110,000 in additional revenue annually to the general fund from collected franchise fees.
ATTACHMENTS
Attachment A - Hidden Resources’ Comprehensive Analysis of Republic Services’ Proposed Food Waste Collection Rates and Operations Plan
Attachment B – September 14, 2021 City Council Meeting, Item 7.1, Staff Report and Resolution Attachment C – June 14, 2022 Public Hearing notice
Attachment D – SB1383 Regulations
Staff Contact: Manuel Medrano, Environmental Services Manager