TO: City Council
FROM: Ryan Smoot, City Manager
PREPARED BY: Gary Y. Sugano, Assistant City Manager
MEETING DATE: November 7, 2023
SUBJECT: Discussion and Consideration of Solid Waste Rate Adjustments for the Years Covering 2024-2028 (Prop 218 Public Hearing)
RECOMMENDATION
1) Hold a protest hearing to accept testimony and written protests against the increased fees. Ask the City Clerk to tabulate the protests. If the number of written protests received is not sufficient to constitute a majority protest, make a finding that there is no majority protest by property owners within the assessment area; and 2) Adopt Resolution No. 2023-28, adjusting solid waste rates.
BACKGROUND
On September 5, 2023, the City Council approved an amended agreement with Athens Services which included a proposed rate adjustment subject to the Prop 218 hearing this evening.
The primary driver in negotiating a new solid waste agreement is the additional cost associated with the State’s SB1383 (Organics Recycling) requirements. The State’s goal is a 75% reduction in organic waste disposal to landfills by 2025. Athens Services (and the City) are required to provide organic waste collection to residential and commercial customers (including proper disposal of such waste), conduct education and outreach, establish an edible food recovery program and monitor compliance and conduct enforcement as necessary. With approval of the amended agreement, organics collection for residential customers will begin on January 1, 2024.
Solid Waste and Recyclable Material Collection provisions are contained in the Lomita Municipal Code, Title 5, Chapter 3 (Integrated Waste Management). Proposition 218 requires that the fees and charges imposed on a parcel may not exceed the proportional special benefit conferred on that parcel and that has guided the negotiation of maximum collection rates proposed to be approved tonight. As required by state law, Item No. PH 9a
CITY OF LOMITA
CITY COUNCIL REPORT
the City sent out a notice of the proposed rate increases and the hearing this evening to all affected property owners on September 22, 2023. As of the date of finalizing this report, the City has received 5 written protests against the increase and a total of 10 phone calls and/or emails. Excluding the written protests, the majority of inquiries by the customer emails/calls indicated that they were not opposed to the rate increase but had questions regarding the proposed rate structure.
Summary of Proposed Rate Changes
(1) Authorizing a 5.5% increase for residential collection services effective January 1, 2023 (and each July 1 thereafter through June 30, 2028) due to additional costs associated with the State of California SB1383 (Organics Recycling) requirements. (2) Authorizing various increases for multi-family and commercial collection services effective January 1, 2024 (and 8.5% each July 1 thereafter through June 30, 2028) due to additional costs associated with the State of California SB1383 (Organics Recycling) requirements.
Methodology for Annual CPI-Related Increases
As part of the approved amended agreement, beginning on July 1, 2024, and annually each July 1 thereafter, Athens Services shall receive an annual adjustment of the current rates. The annual adjustment shall be the percentage increase of the Consumer Price Index for Trash and Garbage Collection (CUUR0000SEHGO2) U.S.
City Average (not seasonally adjusted) as may be amended or renamed and replaced from time to time by the United States Bureau of Labor Statistics (“Trash CPI”) for the 12-month period of March of the current year to March of the prior year, plus one percent (1%) (i.e., Trash CPI+1) (“Annual CPI Adjustment”). This was agreed upon in exchange for the removal of a provision in the original agreement allowing Athens to request extraordinary rate increases to recover its costs.
State law requires that customers receive notice of annual CPI increases before they are effective, even though another majority protest hearing would not be required until July 1, 2028. Therefore, if the annual rate increase is approved, the City and/or Athens Services will notify customers of any adopted increase which becomes effective on July 1, 2024 and each July 1 thereafter through 2028.
For residential customers (5 or fewer units), the rate adjustment through June 30, 2028 is shown below (this service is bundled and includes a solid waste, recycling and organics bin):
For commercial customers, the initial rate increase will vary based on bin size and whether or not the commercial customer qualifies for an exemption from organics recycling. As part of the roll-out, Athens will be working with each individual commercial customer to tailor the required services to their specific needs. While some commercial customers rates may increase, others may actually see a decrease based on the services required.
The new rate structure will be a bundled rate as opposed to the current a-la-carte rate structure. The bundled rate will include a solid waste bin, regular recycling bin and an organics bin. Commercial customers who are exempt from organics collection would receive a reduced rate from the bundled rate for that service. The bundled rate structure will allow the City to achieve 100% compliance with State requirements for commercial and organics recycling.
Commercial Bundled* Rate includes 3-yard Solid Waste Bin, 1.5-yard Recycling Bin and 96-gallon Organic Cart
Current 1/1/24 7/1/24 7/1/25 7/1/26 7/1/27
Comm.
Rate
(Monthly)
$301.32 $337.00 $365.65 $396.73 $430.45 $467.04
* Establishment of bundled rates for commercial will allow the City to achieve compliance with regular and organics recycling requirements per CalRecycle
Default commercial bundle sizes are as follows for each bin category (Solid Waste Bin/Recycling Bin/Organics Bin):
Solid Waste Bin Recycling Bin Organics Bin
65 Gallon 65 Gallon 65 Gallon
96 Gallon 96 Gallon 65 Gallon
1 Yard 96 Gallon 65 Gallon
2 Yard 1 Yard 65 Gallon
3 Yard 1 ½ Yard 65 Gallon
4 Yard 2 Yard 1 Yard
6 Yard 3 Yard 1 Yard
2 Yard Compactor 1 Yard 65 Gallon
3 Yard Compactor 1 ½ Yard 65 Gallon
4 Yard Compactor 2 Yard 1 Yard
Customers will be able to size up or down depending on their solid waste related needs.
Commercial Outreach/Audits by Athens Services
Currently, the majority of commercial customers receive solid waste collection service and in some cases recycling but not organics. Under the bundled rate plan, and as required by the State, each commercial customer will receive a solid waste, recycling and organics bin. It can be anticipated that some of the current waste stream will be diverted to the recycling and organics bins instead of it all being placed in the solid waste bin (thus reducing the capacity need of the solid waste bin).
If the rate adjustment is approved this evening, Athens Services will mobilize their recycling coordinators to conduct outreach to and audits of the services received by each commercial customer to determine appropriate bundle to meet their needs. In many cases, commercial customers will be able to reduce the size of their solid waste bins and/or be exempt from organics collection.
Rate Comparison (Residential and Commercial)
The analysis is provided for general comparison purposes only. It is difficult to do an apples-to-apples city-to-city comparison as some services and levels may vary greatly which can impact costs (# of customers in the residential/commercial base, free/cost for bulky item pick-ups, special event services, discounted or special services for seniors, term of agreements will vary, etc.). For this reason, this review is limited (to the extent possible) to general and common services. It is also worth noting that many cities are in a similar situation to Lomita and are currently negotiating the impacts of SB1383 and other amendments to their agreements.
Rate Comparison – Single Family Residential
City Hauler Monthly Rate
as of July 2023
Comments
Artesia CRR $26.29
Cerritos Athens $24.76
Covina Athens $44.35
Lawndale Republic $31.80
Lomita Athens $33.18 Proposed as of 1/1/24
Long Beach Self $40.87
Norwalk Athens $23.43
Paramount Athens $21.46 Currently negotiating SB1383 rate increase
Rancho
Palos Verdes
EDCO $40.99
Torrance Self $38.29
Rate Comparison – Typical Commercial (3 Cubic Yard Container – 1 Pickup per Week) City Hauler Monthly Rate
as of July 2023
Comments
Artesia CRR $374.74 65 gallon organics cart
Cerritos Athens $355.96 1 CY recycling and 65 gallon organics cart
Covina Athens $441.59 1.5 CY recycling and 60 gallon organics cart
Lawndale Republic $220.40
Lomita Athens $337.00 Proposed as of 1/1/24
Long Beach Self $281.46 Proposed as of 10/1/23
Norwalk Athens $308.92
Paramount Athens $242.98 Currently negotiating SB1383 rate increase; rate for organics collection not
established
Rancho
Palos Verdes
Open Market Varies
Torrance Open Market Varies
Public Outreach and Communications
Over the past year, the City has begun conducting initial outreach to residential and commercial customers regarding the State’s organic recycling requirements and future implementation. This included communications through the city newsletters, social media and a dedicated webpage for SB1383 resources and an explainer video which can be found here: https://Lomitacity.com/sb1383/.
As we fully roll out organics recycling starting January 1, 2024, there will be an on-going coordinated public outreach and communication effort involving the City, Athens Services and Tripepi Smith to all residents and businesses. It will take time to educate the public in the proper separation of solid waste, recycling and organics.
Enforcement Ordinance
Per State Law, each jurisdiction is required to adopt an enforcement ordinance to ensure compliance with the State’s SB1383 organic recycling requirements. The State’s model ordinance, which was adopted by the City in January 2022, shifts enforcement responsibility to the individual jurisdictions. The enforcement entities would be the City and the City’s hauler Athens Services. Starting on January 1, 2024, jurisdictions with an enforcement ordinance will have the ability to impose penalties for noncompliance on generators.
Conclusion
If the Council does not receive written protests from a majority of the affected parcels (the City mailed notices to 4,520 parcels and a total of 2,261 protest letters would need to be received to reach a majority protest), the Council may approve the rate adjustment as summarized in Exhibits A of the resolution. Only one protest per parcel will be accepted.
Any increases (CPI-related or otherwise) proposed after June 30, 2028 will require a new Prop 218 hearing and notice.
OPTIONS:
1) Do not adopt the resolution.
2) Give staff alternative direction.
FISCAL IMPACT
If approved, the first proposed increase would take effect on January 1, 2024. The City would see a nominal increase in the City’s franchise fees.
ATTACHMENTS
1) Resolution with Rate Sheets
2) Prop 218 Public Notice
Prepared by: Approved by:
__ ______
Gary Y. Sugano Ryan Smoot
Assistant City Manager City Manager
RESOLUTION NO. 2023-28
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LOMITA,
CALIFORNIA, INCREASING SOLID WASTE COLLECTION RATES
WHEREAS, as a result of regulations implementing Senate Bill (SB) 1383 Senate Bill 1383 (Short-lived Climate Pollutants (SLCP): Organic Waste Methane Emissions Reductions) that took effect January 1, 2022, organic waste can no longer be able to be disposed of in the landfill and organic waste collection services must be provided to all residents and businesses; and; and
WHEREAS, to comply with these the SB 1383 requirements, the City of Lomita (the “City”) negotiated with its waste hauler, Arakelian Enterprises, Inc. dba Athens Services, to provide the necessary services; and
WHEREAS, on September 5, 2023, the City Council approved the First Amendment to the Agreement for Solid Waste Collection Services with Athens Services to implement organic waste programs and street sweeping services beginning January 1, 2024; and
WHEREAS, the rate structure for the monthly solid waste service fees has three customer classes: (i) single family (up to 4 units); (ii) multi-family (5 units or more); and (iii) commercial; and
WHEREAS, the rate structure for refuse, recycling and organics collection is based on the container size, type of service, and frequency of collection; and WHEREAS, the City has determined that it is necessary to impose new, increased or modified rates for its solid waste service charges (collectively herein, the “Charges”); and
WHEREAS, the City is conducting this hearing in accordance with the California Constitution, Article XIII D, Section 6 (“Article XIII D”) out of an abundance of caution and without conceding its applicability to solid waste service; and WHEREAS, pursuant to Article XIII D, such Notice is required to be provided to the affected property owners and customers not less than 45 days prior to the hearing on the proposed rate increases; and
WHEREAS, the City mailed the notice in accordance with Article XIII D and the hearing was held on this day, November 7, 2023; and
WHEREAS, at the hearing the City Council heard all oral testimony, and considered all written materials and written protests concerning the establishment and imposition of the proposed rate increases to the Charges, and at the close of the hearing the City did not receive written protests against the establishment and imposition of the proposed rate increases to the Charges from a majority of the record owners or property upon which the Charges are proposed for imposition or any tenants Attachment No. 1
Resolution No. 2023-28
directly liable for the payment of the Charges (i.e., a customer of record who is not a property owner); and
WHEREAS, the City Council now desires to establish and impose the proposed Charges.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LOMITA,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The above recitals are all true and correct and are incorporated herein.
Section 2. The City Council hereby adopts the Charges for solid waste collection services at the maximum rates on January 1, 2024, as set forth in Exhibit A, attached hereto and incorporated herein by this reference.
Section 3. For the fiscal year beginning July 1, 2024, and annually thereafter on July 1 through June 30, 2028, the maximum rates in Exhibit A shall be adjusted by a Consumer Price Index (“CPI”) adjustment and supplemental adjustment as described below.
CPI Adjustment. For the fiscal year beginning July 1, 2024, and annually thereafter on July 1 through June 30, 2028, the maximum rates provided in Exhibit A shall be automatically adjusted annually based upon the annual percentage change from March of the prior year to March of the current year in the CPI for Trash and Garbage Collection (CUUR0000SEHG02), United States City Average (not seasonally adjusted), as determined by the United States Bureau of Labor Statistics, plus one percent (1%).
Supplemental Adjustment. In addition to the CPI adjustment above, a supplemental adjustment shall be applied, for the fiscal year beginning July 1, 2024, and annually thereafter on July 1 through June 30, 2028, as follows:
(1) The rates in Exhibit A for Single Family Residential Premises, inclusive of multi-family premises of 4 units or less, will be subject to a supplemental adjustment of five and one-half percent (5.5%) each year; and
(2) The rates in Exhibit A for Commercial premises, inclusive of multi-family premises of 5 units or more, will be subject to a supplemental adjustment of eight and one-half percent (8.5%) each year.
Section 4. To the extent any Charges established by this Resolution are inconsistent with any Charges previously adopted by the City Council, it is the explicit intention of the City Council that the Charges adopted pursuant to this Resolution shall prevail.
Resolution No. 2023-28
Section 5. The City Clerk or designee is directed to send out an annual notice of any applicable increase authorized above as required under Government Code Section 53756.
Section 6. The City Council hereby finds that the administration, operation, maintenance, and improvements of the solid waste collection system, which are to be funded by the Charges, are necessary to maintain solid waste services within the City’s service area. The City Council further finds that such Charges are necessary and reasonable to fund the administration, operation, maintenance, and improvements of the solid waste collection system. Based on these findings, the City Council hereby determines that this Resolution is statutorily exempt from the requirements of CEQA pursuant to California Public Resources Code section 21080(b)(8) and State CEQA Guidelines section 15273(a). The documents and materials that constitute the record of proceedings on which these findings have been based are located at 24300 Narbonne Ave., Lomita, CA 90717. The custodian for these records is the City Clerk of the City.
Section 7. If any section, subsection, subdivision, sentence, clause, or phrase in this Resolution or any part thereof is for any reason held to be unconstitutional or invalid, ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Resolution or any part thereof. The City Council hereby declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.
Section 8. This Resolution take effective immediately upon adoption and will remain effective unless repealed or superseded.
Section 9. The City Manager or his or her designee is hereby authorized to take all actions necessary to implement this Resolution.
PASSED, APPROVED AND ADOPTED this 7
th day of November 2023.
_____________________________
Barry Waite
Mayor
ATTEST:
______________________________
Kathleen Horn Gregory, MMC, City Clerk
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
Resolution No. 2023-28
September 22, 2023
CITY OF LOMITA - NOTICE OF PUBLIC HEARING
TO CONSIDER A PROPOSED INCREASE IN RATES FOR SOLID WASTE SERVICE
CHARGES
NOTICE IS HEREBY GIVEN that the City Council of the City of Lomita (the “City”) will conduct a Public Hearing on November 7, 2023, at 6:00 p.m., in the Council Chambers at 24300 Narbonne Avenue, or as soon thereafter as the matter may be heard, to consider: (1) adopting CPI-related adjustments to all rates and charges for solid waste collection and disposal applicable to the Assessor Parcel Number for which you are shown as the property owner and/or tenant for the period January 1, 2024, to June 30, 2028, pursuant to Government Code Section 53756; (2) for residential rates, authorizing a 5.5% increase to cover increases in costs (per the attached rate sheets) and; (3) for multi-family residential and commercial rates, an increase of
8.5% to cover increases in costs (per the attached rate sheets). If approved, these rates, charges, and adjustments will be effective January 1, 2024.
PROPOSED SOLID WASTE RATES AND CHARGES
(INFLATION AND OTHER RATE ADJUSTMENTS FOR THE PERIOD
JANUARY 1, 2024, to JUNE 30, 2028)
All current solid waste service rates include a collection and a disposal component. In accordance with the franchise agreement, the proposed rate adjustments would cover the period from January 1, 2024, through June 30, 2028, as follows:
1. For the 2024–2028 period (specifically January 1, 2024, to June 30, 2028), the overall rate increase including both the collection and disposal components is as follows: (1) for residential rates, a 5.5% increase to cover increases in costs and; (2) for multi-family residential and commercial rates, an increase of 8.5% to cover increases in costs.
2. For the 2024–2028 period (specifically July 1, 2024, to June 30, 2028), on an annual basis, the City may authorize annual inflation adjustments in solid waste service fees, rates, & charges, reflecting increased costs of providing such services. The annual adjustment shall be the sum of the percentage increase of the Consumer Price Index for Trash and Garbage Collection (CUUR0000SEHGO2) U.S. City Average (not seasonally adjusted), as the same may be amended or renamed and replaced from time to time by the United States Bureau of Labor Statistics (“Trash CPI”) for the 12-month period from March of the current year to March of the prior year, plus one percent (1%) (i.e., Trash CPI+1%). Thirty days prior to any adjustment pursuant to the schedule, customers will receive a notice to that effect before implementation of the new rates.
These adjustments are reflected in further detail in Exhibit “A” to this Notice. If approved, these increased rates will be effective January 1, 2024. Current solid waste rates can be found on the City’s website at https://lomitacity.com/wp-content/uploads/2023/06/2023-2024-Rate-Exhibit.pdf.
The automatic inflationary adjustments noted above are authorized pursuant to Government Code Section 53756.
PUBLIC HEARING AND PROTESTS
Any property owner or any tenant (i.e., a customer of record) directly responsible for the payment of solid waste service fees may submit a written protest to the proposed rate changes to the City’s solid waste service rates; provided, however, only one protest will be counted per identified parcel. Any written protest must: (1) state that the identified property owner or customer of record is in opposition to the proposed solid waste rate changes; (2) provide the location of the identified parcel (by assessor’s parcel number or street address); and (3) include the name and signature of the property owner or customer of record submitting the protest. Written protests may be submitted by mail or in person to the City Clerk at 24300 Narbonne Avenue, Lomita, CA 90717, or at the Public Hearing (date and time noted above), provided they are received prior to the conclusion of the public comment portion of the Public Hearing. Any protest submitted via e-mail or other electronic means will not be accepted. Please identify on the front of the envelope for any protest, whether mailed or submitted in person to the City Clerk, Attn: Public Hearing on Solid Waste Rate Changes.
IF YOU DO NOT OBJECT TO THE ADJUSTMENTS, NO ACTION IS REQUIRED.
The City Council will hear and consider all written protests and oral comments on the proposed rate changes at the Public Hearing. Oral comments at the Public Hearing will not qualify as formal protests; only a written protest will count for the purposes of determining whether a majority protest exists.
Upon the conclusion of the Public Hearing, if written protests against the proposed rate changes as outlined above are not presented by a majority of property owners or tenants of the identified parcels subject to the proposed rate increases, the City Council will be authorized to adopt the rate changes.
This protest hearing is being conducted in accordance with Article XIIID of the California Constitution (also referred to as Proposition 218). Please note that a rate protest proceeding is not an election. To ensure transparency and accountability in the rate protest tabulation, protests shall constitute a disclosable public record from and after the time they are received. The City is conducting this Proposition 218 majority protest proceeding out of an abundance of caution and without conceding the applicability of Proposition 218 to Solid Waste Service.
For further details regarding the basis and reasons for the proposed rate changes to the City’s solid waste service fees or for any questions you may have regarding the proposed fees to be imposed on your parcel, please contact Gary Sugano, Assistant City Manager at (310) 325-7110, x121.