Placentia City Council
AGENDA REPORT
TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
FROM: DEPUTY CITY ADMINISTRATOR/ PUBLIC SERVICES AND INFRASTRUCTURE DATE: JULY 19, 2022
SUBJECT: ANNUAL SOLID WASTE HANDLING SERVICES RATE ADJUSTMENT AND RELATED RESOLUTIONS FOR FISCAL YEAR 2022-23
FISCAL
IMPACT: There is no direct fiscal impact to the City's General Fund Budget associated with the recommended actions.
SUMMARY:
In 2010, the City entered into a Franchise Agreement ("Agreement") with Republic Waste Services of Southern California, LLC ("Republic") for solid waste collection services. Per the existing Agreement, solid waste rates are to be reviewed annually to determine if any adjustments are warranted based on changes in the Consumer Price Index ("CPI"). Staff and representatives from Republic discuss each year potential adjustments to solid waste rates paid by residents and businesses. The last residential and commercial rate adjustment took effect on July 1, 2021.
On June 6, 2022, Staff presented the proposed annual rate increase to the City Council Sewer, Refuse and Recycling Ad -Hoc Committee who reviewed the rate adjustment analysis and recommended that the rates be presented to the full City Council for its consideration. On June 7, 2022, the City Council adopted Resolutions R-2022-37 and R-2022-38, which approved the initiation of the Proposition 218 public hearing process to adjust these fees and set a Public Hearing for July 19, 2022, to discuss the rate adjustments and adopted written protest procedures. The required 45 -day notice was mailed to 11,710 record property owners of single- family residence parcels in the City. The notice informed property owners about the proposed rate increases, the scheduled public hearing, and procedures for submitting a written protest (Attachment 5).
This action recommends that the City Council conduct a public hearing to consider a resolution approving the adjusted Solid Waste Handling Services Rates for Fiscal Year ("FY") 2022-23, to be effective on July 1, 2022; authorize the placement of revised residential rates on the County of Orange tax roll for FY 2022-23; and approve Amendment No. 13 to the Agreement.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
2.a.
July 19, 2022
City Council Agenda
July 19, 2022
1. Open the Public Hearing concerning the Solid Waste Handling Services, Rate Adjustment and related resolutions for Fiscal Year 2022-23; and
2. Receive the Staff Report, consider all public testimony, ask questions of Staff; and
3. Close the Public Hearing and direct the City Clerk to tabulate the written protests and report the results of the tabulation to the City Council; and
4. Adopt Resolution No. R-2022-53, a Resolution of the City Council of the City of Placentia, California, approving the Amended Fee Schedule for Solid Waste Handling Services for Fiscal Year 2022-23; and
5. Adopt Resolution No. R-2022-54, a Resolution of the City Council of the City of Placentia, California, authorizing and determining residential solid waste handling service charges and directing placement thereof on the Orange County property tax rolls for Fiscal Year 2022-23; and
6. Approve Amendment No. 13 to the Amended, Revised and Restated Agreement for Solid Waste Handling Services between the City of Placentia and Republic Waste Services of Southern California, LLC; and
7. Authorize the City Administrator to execute all the necessary documents, in a form approved by the City Attorney.
DISCUSSION:
On July 20, 2010, the City entered into an Agreement with Republic for solid waste and recycling services. Per Section 24.3 of the Agreement, Republic is entitled to request a general annual rate adjustment to account for inflation each year. The agreed upon methodology for making this adjustment is determined by the CPI for the Los Angeles County Area as stated in Section 24.3 of the Agreement. Republic can adjust the rates in July of each year based upon the change in CPI for all Urban Consumers for the 12 -month period ending January 31 of each year. Staff and representatives from Republic confer each year to discuss potential adjustments to solid waste rates paid by residents and businesses. The last residential and commercial rate adjustment took place on July 1, 2021. Per the terms of the agreement, the proposed adjustment to residential and commercial rates would be effective July 1, 2022.
ALTERNATIVE OPTIONS:
Proposed Rates for FY 2022-23
The proposed refuse rates for Fiscal Year ("FY") 2022-23 (Attachment 4) include rate adjustments based upon the following:
1) Annual Rate Adjustment per CPI per Section 24.3 of the Agreement 2) Increase in the Orange County Landfill Tipping Fees per Section 24.5 of the Agreement
City Council Agenda
July 19, 2022
Annual Rate Adjustment per CPI for January 2022
In accordance with the City's current waste hauling Franchise Agreement with Republic, the company is entitled to request a general annual rate adjustment to account for inflation. The agreed upon methodology for making this adjustment is determined by the CPI for Los Angeles County -Orange County Area as stated in Section 24.3 of the Agreement. Republic can adjust the rates in July of each year based upon the change in CPI for all Urban Consumers for the 12 - month period ending January 31 of each year. The change in CPI for the most recent 12 -month period was 7.5%.
Orange County Landfill Tjopind Fees
Another component of the rate includes landfill "tipping fees", which are passed through directly to the customer. Beginning in 2010, the County of Orange ("County") increased the landfill gate tipping fees from $22.00 per ton to $31.37 per ton. Per the Waste Disposal Agreement with the County of Orange, the county disposal fee is adjusted each July 1 according to the change in CPI— All Urban Consumers, All Cities for the 12 -month period ending October 31 of each year.
The change in CPI for the most recent 12 -month period was 6.2%. In 2021, the landfill gate tipping fees were increased again to $36.09 per ton. For FY 2022-23, the County will increase the fee to $38.34, which represents a 6.2% increase from the FY 2021-22 fees.
Proposed FY 2022-23 Rates
The following two (2) tables provide a summary and breakdown of the proposed single-family residential waste rates for FY 2022-23.
Proposed Residential Waste Rate Summary — FY 2022-23
1 Residential Rate
Single -Family (Monthly)
Single -Family (Annual)
Current Rate
$28.81
$345.72
Proposed Rate
$33.47
$401.64
Rate Change
$4.66/month
$56.04/year
Single -Family Residential Rate Breakdown — FY 2022-23
Rate Component
Current Base Service Fee
Green Waste Processing Fee
CPI Adjustment of 7%
Current Landfill Disposal Fee
Landfill Disposal Fee Adjustment of 6.2%
City Refuse & Recycling Coordinator Fee
Total Proposed Rate
*Rounded to nearest hundredth
Monthly Amount
$25.42
$2.25
$1.94
$3.38
$0.21
$0.28
$33.47*
City Council Agenda
July 19, 2022
The following two (2) tables provide a summary and breakdown of the proposed commercial waste rates for FY 2022-23. This table only reflects the most commonly utilized rates for discussion purposes. Attachment 4 includes the full rate schedule for both residential and commercial refuse services.
Proposed Commercial Waste Rates Summary — FY 2022-23
Commercial Rate
3 -Yard Trash Bin
1 3 -Yard Recycling Bin
1 2 -Yard Organics Bin
Current Rate
$185.68
$158.87
$144.90
Proposed Rate
$198.16
$169.68
$154.65
Rate Change
$12.48/month
$10.81/month
$9.75/month
Proposed Commercial Waste Rate Breakdown — FY 2021-22
Commercial
Rate
3 -Yard
Trash Bin
3 -Yard
Recycling
Bin
2 -Yard
Organics
Bin
Current
Base
Service
Fee
CPI
Adjustment
of 7%
$157.19 $11.00
Current
Landfill
Disposal
Fee
$27.06
Rate Component
Landfill Organics
Disposal Recycling
Fee Component
Adjustment Adjustment
of6.2% of0%
$1.69 $0.00
$157.44 $11.02 N/A N/A N/A
$125.66 $8.80 $18.09 $1.13 $0.00
City Refuse Total
& Proposed
Recycling Rate
Coordinator
Fee
$1.22 $198.16
$1.22 $169.68
$0.97 $154.65
Proposition 218 Procedures
In addition, to the provisions established in the Franchise Agreement, the City's ability to adjust rates is governed by Proposition 218. In 1996, California voters approved Proposition 218 which requires a specific process for cities to impose or increase certain types of fees. The provisions of Proposition 218 set forth in Article XIII D of the California Constitution provides that certain types of "Property Related Fees" are subject to a "majority protest" process.
The provisions of Proposition 218 set criteria for property -related fees for refuse, water, and sewer services. The fees must be set so that:
• The revenues generated by the fee do not exceed the cost of service. • No property owner's fee exceeds his/her proportionate share of the costs. • The City does not impose a property -related fee for a service that is not available to the property owner.
Under Proposition 218, the City's refuse collection fees are considered "Property Related Fees", since the fees are paid by property owners via the property tax roll. In other cities, refuse collection fees are either billed directly to each customer by the waste hauler or they are collected as part of the water utility bill. Proposition 218, and subsequent legislation AB 1260, defines the process for establishing or adjusting property -based fees. The process requires a
City Council Agenda
July 19, 2022
notice of the proposed fee be sent to all property owners in the City and 45 days after the notice is sent, a public hearing be conducted by the City Council. During the 45 -day period and until the close of the public hearing, a property owner may protest the fee by submitting a written protest. If more than 50% (fifty percent) of the property owners of record in the City protest the fee, the City Council would be prohibited from enacting the fee change.
The City Council Sewer, Refuse & Recycling Ad -Hoc Committee met with City Staff on June 6, 2022, to discuss the proposed schedule of rates. The Committee discussed the justification for the increase and found that it is consistent with the Agreement. On June 7, 2022, the City Council adopted Resolutions R-2022-37 and R-2022-38; set a public hearing for July 19, 2022 and adopted written protest procedures. On June 9, 2022, the required 45 -day notice was mailed to 11,710 record property owners of single-family residence parcels in the City. The notice informed property owners about the proposed rate increases, the public hearing, and procedures for submitting a written protest (Attachment 5). As of July 14, 2022, the City Clerk had received three (3) written protests. A total of 5,856 protests must be received to constitute a majority.
If there is no majority protest vote, Staff is recommending that City Council adopt the attached Resolutions and Amendment to the Franchise Agreement if no majority protest vote exists.
FISCAL IMPACT:
There is no General Fund fiscal impact associated with the requested action. The cost for providing solid waste services to the City's residents and businesses are covered by the customer rates established by the City's franchised hauler and paid by those receiving the services.
Prepared by: Reviewed a
Elsa Robin6on
Management Analyst
Damien R. Arrula
City Administrator
Luis Estevez
Deputy City Administra or
City Council Agenda
July 19, 2022
Attachments:
1. Resolution No. R-2022-53 - Approving Solid Waste Collection Rates for FY 2022-23
2. Resolution No. R-2022-54 - Authorizing Residential Billing on Orange County Tax Roll
3. Amendment No. 13 to Amended, Revised, and Restated Agreement for Solid Waste Handling Services
4. Proposed FY 2022-23 Solid Waste Collection Rate Schedule
5. Proposition 218 Notice of Public Hearing
6. Presentation — Solid Waste Amendment and Rate Increase