City Council July 18, 2023
AGENDA REPORT TO: Jestin D. Johnson FROM:Erin Roseman City Administrator Finance Director SUBJECT:Mandatory Delinquent Trash Fees 2022-2023DATE:July 5, 2023 City Administrator Approval Date: RECOMMENDATIONStaff Recommends That City Council Conduct a Public Hearing and Upon Conclusion Adopt A Resolution 1) Accepting and Confirming Reports of the Special Assessments for Delinquent Trash Service Fees, With Administrative Charges, for the Monthly Periods of April, May, June, July, August, September, October, November, December of 2022, and January, February, March of 2023, and the Quarterly Periods of July- September 2022, October–December 2022, January-March 2023, and April-June 2023; 2) Overruling Any Protests and Objections Related to the Special Assessments Included in Said Report and Imposing the Special Assessments; and 3) Directing the Notice of Special Assessment Charges be Turned Over to the County Tax Collector for Collection EXECUTIVE SUMMARY Staff recommends the adoption of the proposed resolution, which authorizes the levy of special assessments for delinquent trash fees, charges, and recording of said special assessments to the Alameda County Tax Collector and Auditor Controller for inclusion on the next property tax roll, August 10, 2023. The special assessments are made pursuant to the Oakland Municipal Code (“OMC”) Chapter 8.28 and the Mixed Materials & Organics Collection Services Contract (the “Contract”) executed on July 15, 2015, between the City of Oakland (the City) and Waste Management. All fees, charges, and due dates are detailed on customer invoices and delinquency notices. The action before the City Council pertains only to delinquent Waste Management accounts and does not include California Waste Solutions, Inc. (CWS) Push Rate charges. CWS Push Rate charges are billed on a separate account as an ancillary charge and are not part of the normal Waste Management billing that is subject to the special assessment. Delinquent account holders have until August 10, 2023, to pay an outstanding bill prior to the assessment being rolled to the County for inclusion on the property tax roll. BACKGROUND / LEGISLATIVE HISTORY Prior to July 1, 2015, the City purchased delinquent accounts receivable from Waste Management for trash collection services provided to residential properties. The City, as owner of the delinquent accounts, collected the delinquent trash fees and charges by placing liens Jestin Johnson (Jul 7, 2023 09:32 PDT)
Jul 7, 2023
Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 2 City Council July 18, 2023
against subject properties. The lien process is a mechanism to secure the debt owed to the City and avoid interruption of trash collection services to residential properties. The process was changed under the new Contract; per the Contract, the City no longer purchases delinquent accounts from Waste Management, nor does it place liens on subject properties. Instead, the City now places a special assessment levy on the annual property tax bill of the subject property, as a method to secure the City’s mandatory refuse administrative fee as allowed under the OMC Section 8.28.250 and Waste Management’s delinquent trash collection service invoices. Significant noticing dates of the Waste Management agreement are provided in Table 1, below. Table 1: Waste Management Agreement – Significant Noticing Dates Dates Noticing Action Day 1 Waste Management sends initial invoice to customer.Day 45 Waste Management sends delinquency notice to customer and may apply late fees. Day 61 Waste Management sends final delinquency notice to customer with a past due balance notifying them of the termination of service on 90th day if account is not paid in full.Day 91 The City subscribes on customer’s behalf for the abatement of the trash nuisance and imposes a cost recovery administrative fee. Day 100 The City sends a Special Assessment Notice to the subject property owner informing them of the City’s subscription for garbage service on their behalf and notice of administrative and Council hearings. A list of subject properties is provided to the City Clerk for approval of the report and imposition of the special assessments after consideration at a public hearing . From the date of the initial Waste Management Invoice to the public hearing, property owners have approximately 190-195 days to resolve their delinquency. In accordance with the contract, Waste Management provides the City with a list of accounts for which it will terminate service for non-payment. The list includes assessor’s parcel number, service address, and the delinquent amount. Pursuant to O.M.C. Section 8.28.220, following an administrative hearing, a report of the proposed special assessments is submitted to the City Council. Both a paper and an electronic copy of the delinquent accounts are furnished to the City Clerk for public viewing following each administrative hearing. ANALYSIS AND POLICY ALTERNATIVES Waste Management notified the City of delinquent accounts for twelve (12) periods: April 2022, May 2022, June 2022, July 2022, August 2022, September, October, November, December 2022, January, February, March 2023 (monthly), and July through September 2022, October through December 2022, January through March 2023, and April through June 2023 (quarterly).
Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 3 City Council July 18, 2023
On May 15, 2022, August 15, 2022, November 15, 2022, and February 15, 2023, Waste Management sent quarterly customers a delinquency notice advising of their unpaid invoices and potential late fees for the quarterly period of April through June 2022, July through September 2022, October through December 2022, and January through March 2023. For monthly customers, the delinquency notice was sent on the last day of the monthly billing cycle. On June 1, 2022, September 1, 2022, December 1, 2022, and March 1, 2023, Waste Management sent a final delinquency notice to subject property owners advising them of termination of service on the 90thday if no payment was received, and subsequent subscriptionfor garbage service by the City of their delinquent accounts. On July 19, 2022, October 17, 2022, January the City sent a Special Assessment Notice to subject property owners advising them of the City’s subscription for garbage service to their delinquent accounts. Pursuant to O.M.C. Chapter 8.28.210, the City held an administrative hearing, and each affected property owner was notified of the administrative hearing. The administrative hearings were held on August 2, 2022, November 1, 2022, December 6, 2022, February 7, 2023, and on May 23, 2023, to hear protests and resolve any inconsistencies or inequities regarding the delinquent mandatory trash fees prior to the public hearing before the City Council. Due to the Alameda County Shelter in Place Order issued on March 16, 2020, the City of Oakland mailed to the affected property owners an Administrative Hearing Questionnaire that allowed for written protest of and to resolve any inconsistencies and inequities regarding the delinquent mandatory trash fees prior to the public hearing before the City Council. Administrative hearings were conducted via Zoom August 2, 2022, November 1, 2022, December 6, 2022, February 7, 2023, and on May 23, 2023, for all affected property owners who submitted a questionnaire or requested a hearing via telephone. Of the original list of 18,220 delinquencies, 1,715 cases were resolved and removed. A resolution has been prepared confirming and authorizing the special assessment levy for all fees and charges should they remain unpaid at the time of submission or transfer of recording to or by the County Assessor. These delinquent accounts do not include the CWS Push Rate charges. The list of delinquent accounts subject to the special assessment levy has been filed with the City Clerk in both paper and electronic format. The Finance Department mailed 16,505 postcards to remind property owners of this public hearing. The postcard date is June 15, 2023 and offered another administrative hearing on June 27, 2023 to address billing issues and to hear protests on June 27, 2023. The special assessment process ensures that residential and commercial garbage is picked up, whether the garbage bill is paid to Waste Management or not and ensures that the City of Oakland is in alignment with the Citywide Priority of holistic community safety.
Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 4 City Council July 18, 2023
Table 2 below reflects the Waste Management billing periods, service fees and City Administrative Charges. Table 2: Total Charges by Billing Period Billing Total Count Delinquent Charges City Admin Charges Total Delinquent Charges MonthlyApril 2022 60 $58,930.08 $6,960.00 $65,890.08 May 2022 67 $61,435.66 $7,772,00 $69,207.66 June 2022 64 $61,693.57 $7,424.00 $69,117.57July 2022 63 $61,220.45 $7,308.00 $68,528.45 August 2022 63 $59,866.97 $7,308.00 $67,174.97 September 2022 66 $79,736.48 $7,656.00 $87,392.48 October 2022 70 $62,767.77 $8,120.00 $70,887.77 November 2022 85 $78,552.95 $9,860.00 $88,412.95 December 2022 70 $61,516.51 $8,120.00 $69,636.51 January 2023 66 $85,270.95 $7,656.00 $92,926.95 February 2023 64 $74,274.32 $7,424.00 $81,698.32 March 2023 71 $87,817.54 $8,236.00 $96,053.54 Monthly Total 809 $833,083.25 $93,844.00 $926,927.25 Quarterly July – September 20221 2,276 $587,773.68 $264,016.00 $851,789.68 October – December 20225,181 $1,328,365.59 $600,996.00 $1,929,361.59January- March 2023 4,062 $1,105,847.89 $471,192.00 $1,577,039.89April-June 2023 4,177 $1,160,479.89 $484,532.00 $1,645,011.89Quarterly Total 15,696 $4,182,467.05 $1,820,736.00$6,003,203.05Grand Total 16,505 $5,015,550.30 $1,914,580.00 $6,930,130.30 Property owners owe Waste Management delinquent trash collections services totaling $5,015,550.30 and owe City Administration Fees totaling $1,914,580.00 for these service periods. In accordance with O.M.C. Chapter 8.28, upon Council adoption of the proposed resolution, the City will levy all unpaid charges and fees on the Alameda County Property Tax Roll, and deposit all payments received through the property tax roll in the City’s Mandatory Trash Fund (1700). 1 Quarterly Waste Management billings comprise three (3) months of service for residential customers.
Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 5 City Council July 18, 2023
FISCAL IMPACTIf the City fails to collect or recover its cost covering administration fees, the City’s Mandatory Trash Fund (1700) may lose a total of $1,914,580.00, and the Fund will become negative. As a result, the General Purpose Fund will need to cover the costs associated with this program until such time as the City Council authorizes the special assessments and the cost covering administrative fee is recovered from the delinquent property owners. PUBLIC OUTREACH / INTERESTProperty owners were notified and an administrative hearing for delinquent mandatory trash bills was held on August 2, 2022, November 1, 2022, December 6, 2022, February 7, 2023, and on May 23, 2023, to hear protests and resolve any inconsistencies or inequities raised by property owners regarding the non-payment of delinquent trash charges. Property owners were afforded the opportunity to complete an Administrative Hearing Questionnaire to protest and resolve any inconsistencies or inequities for account research prior to the hearing, however submission of the questionnaire was not mandatory. As a result of the administrative hearing process, 1,715 cases were removed from the list. The public hearing is considered the time at which the City Council formally opens the hearing and ends when the City Council formally closes the hearing during a City Council meeting. At the public hearing, the Council will hear the City Administrator’s report on delinquent trash service fees and proposed assessments, along with any objections or protests which may be raised by any of the property owners or other interested persons regarding the delinquent charges for trash services rendered. COORDINATION In coordination with the Finance Department, Revenue Management Bureau, Finance Department, Budget Bureau, Oakland Public Works, and Department of Race and Equity, this agenda report, resolutions, and supporting documents have been reviewed and/or approved for fiscal implications. SUSTAINABLE OPPORTUNITIES Economic: The collection of delinquent trash charges has no economic impact. Environmental: There are no environmental opportunities resulting from the recordation of special assessments. Race & Equity: The ordinance may have some Race & Equity opportunities based on the delinquency rate in Council District 6 & 7 compared to other council districts during the same period. However, the current contract requires that the vendor picks up residential garbage no matter the property owner’s payment history ensuring that neighborhoods that would historically Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 6 City Council July 18, 2023
be subject to blight are not overburdened with increased Illegal dumping and excess litter. Collection of the delinquent trash charges helps to ensure that the trash is collected throughout Oakland no matter the racial or economic makeup of the residents or the ability to pay. Table 3 reflects the number of delinquent parcels per Council District.Table 3: Delinquent Parcels by Council District Council District3rdQuarter 22022 Delinquent Parcels4thQuarter 2022 Delinquent Parcels 1stQuarter 2023 Delinquent Parcels 2ndQuarter 2023 Delinquent ParcelsCouncil District 1 266 533 410 432Council District 2 175 386 300 312 Council District 3 191 394 344 345 Council District 4 247 603 408 413 Council District 5 264 608 500 517Council District 6 647 1,429 1,152 1,172 Council District 7 654 1,368 1,134 1,153 Unspecified323 52 39 34 Total 2,467 5,373 4,287 4,378 2 The quarterly delinquent periods are allocated as the following: 3rd quarter delinquent parcels consists of April, May, June 2022 monthly and July through September 2022 quarterly; 4th quarter delinquent periods consists of July, August, September 2022 monthly and October through December 2022 quarterly; 1stquarter delinquent parcels consists of October, November, December 2022 monthly and January through March 2023 quarterly; 2ndquarter delinquent parcels consist of January, February, March 2023 monthly and April through June 2023 quarterly. 3 “Unspecified” are parcels that Geographic Informational Systems (GIS) mapping was not able to determine based on supplied parcel number and service address.
Jestin D. Johnson, City AdministratorSubject: Mandatory Delinquent Trash Fees 2022 Date: June 5, 2023 Page 7 City Council July 18, 2023
ACTION REQUESTED OF THE CITY COUNCILStaff Recommends That City Council Conduct a Public Hearing and Upon Conclusion Adopt A Resolution 1) Accepting and Confirming Reports of the Special Assessments for Delinquent Trash Service Fees, With Administrative Charges, for the Monthly Periods of April, May, June, July, August, September, October, November, December of 2022, and January, February, March of 2023, and the Quarterly Periods of July-September 2022, October–December 2022, January-March 2023, and April-June 2023; 2) Overruling Any Protests and Objections Related to the Special Assessments Included in Said Report and Imposing the Special Assessments; and 3) Directing the Notice of Special Assessment Charges be Turned Over to the County Tax Collector for Collection. For questions regarding this report, please contact Sherry Jackson, Revenue and Tax Administrator, at (510) 238-7480. Respectfully submitted, ERIN ROSEMAN Director of Finance Finance Department Reviewed by: Sherry Jackson Revenue and Tax Administrator Rogers Agaba Assistant Revenue and Tax Administrator Prepared by: Nicole Welch, Revenue Operations Supervisor Revenue Management Bureau