City of Wasco Council Agenda, February 8, 2022
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IMPORTANT NOTICE REGARDING FEBRUARY 8, 2022 COUNCIL MEETING As emergency conditions persist in the City, specifically, a state of emergency remains in effect related to COVID-19, community transmission of COVID-19 in Kern County has rapidly increased from Low to High due to the highly contagious variants of COVID-19, which has emerged, Kern County officials are imposing and recommending measures to promote social distancing, requires masking by all, regardless of vaccination status, in an effort to slow the continuously high trends in and level of transmission of COVID-19 throughout the State and Kern County. The City Council determine that the presence of COVID-19 and the increase of cases due to the COVID variants will continue to cause conditions of peril to the safety of persons within the City that are likely to be beyond the control of services, personnel, equipment, and facilities of the City, and has affirmed a local emergency exists and re-ratified the proclamation of state of emergency by the Governor of the State of California. In compliance with AB 361, Brown A ct public meetings will be conducted utilizing Zoom Video Communications. To participate in the meeting from the comfort of your own home or office, download Zoom on any phone or computer device and enter meeting ID# (see below for more information) . The teleconferenced meeting allows the City to continue to conduct essential business and comply with CDC recommendations to protect the public and City employees, practice social distancing and limit exposure.
Listen to the meeting live via zoom
Member of the public may participate in the meeting by joining the Zoom Webinar via PC, Mac, iPad, iPhone, or Android device using the URL:
https://us02web.zoom.us/j/87180246362
Listen to the meeting live via telephone
The public may participate via phone only (without a computer/ smart device) by dialing the below numbers:
Dial Number: 1-669-900-9128
Meeting ID: 871 8024 6362
ALL PARTICIPANTS WILL BE MUTED AUTOMATICALLY UPON ENTERING THE MEETING. THE CITY CLERK WILL UNMUTE THOSE WHO WISH TO SPEAK AT APPROPRIATE TIMES. PLEASE KEEP YOURSELF ON MUTE WHEN NOT SPEAKING. SPEAKERS ARE LIMITED TO TWO (2) MINUTES.
AGENDA
Special City Council Meeting
and Successor Agency to the
Former Redevelopment Agency
Tuesday, February 8, 2022 – 6:00 pm.
Via Zoom Webinar
www.cityofwasco.org
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City of Wasco Council Agenda, February 8, 2022
Verbal Participation using Zoom
Please use the " Raise Hand " button to request to speak. Raised hands will only be acknowledged during the Public Hearing and Public Comment sections of the agenda and when the Meeting's presiding officer requests public comments.
Verbal Participation over the phone
Please dial *9 to "raise your hand " to request to speak. Raised hands will only be acknowledged during the Public Hearing and Public Comment sections of the agenda and when the Meeting's presiding officer requests public comments. Please be advised you will be called on by the phone number you are calling from.
Submitting written comments:
You can also submit your comments via email to [email protected] such email comments must be identified by adding the Agenda Item Number in the email's subject line. Every effort will be made to read your comment into the record; however, they are limited to two (2) minutes. If a comment is received after the agenda item is heard but before the meeting is adjourned, the comment will still be included as a part of the record of the meeting but will not be read into the record.
American Disability Act Accommodations:
Meetings are accessible to people with disabilities. Requests in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting and its materials. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting or who have a disability and wish to request an alternative format for the meeting materials should contact the City Clerk at [email protected] or call 661-758- 7203. Every attempt will be made to swiftly address each request. (28 CFR 35.102–
35.104 ADA Title II)
SPECIAL MEETING – 6:00 pm
1) C
ALL TO ORDER: Mayor
2) R
OLL CALL: Mayor Reyna, Mayor Pro Tem Pallares, Council Members: Garcia, Lynch, Martinez
3) FLAG SALUTE: Mayor
4) P
UBLIC COMMENTS: PLEASE REFER TO PAGE ONE (1) FOR INSTRUCTION INFORMATION 5) S
PECIAL AGENDA ITEMS:
a. Co
nceptually approve a 5-year residential and commercial solid waste rate ad
justment schedule, subject to final review and approval April 2022, Review residual expense data, and Approve the Associated Draft Proposition 218 Notice f
or a public hearing to adopt rates April 2022. (Villa)
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City of Wasco Council Agenda, February 8, 2022
6) CLOSED SESSION: None
7) CL
OSED SESSION ACTIONS: None
8) ADJ
OURNMENT:
Thi
s is to certify that this agenda was posted at Wasco City Hall on February 7, 2022. The agenda is also available on the City website at www.cityofwasco.org _______________
_______________________
Maria O. Martinez, City Clerk
All agenda item supporting documentation is available for public review in the city website www.cityofwasco.org and the office of the City Clerk of the City of Wasco, 746 8 th Street, Wasco, CA 93280 during regula r business hours, 7:30 am – 5:00 pm Monday through Thursday and 8 –5 pm Friday (closed alternate Friday 's), following the posting of the agenda. Any supporting documentation related to an agenda item for an open session of any regular meeting that is distributed after the agenda is posted and prior to the meeting will also be available for review at the same location and available at the meeting. Please remember to turn off all cell phones, pagers, or electronic devices during Council meetings.
The City of Wasco does not discriminate on the basis of disability in the access to, provision of, or employment in its programs and activities pursuant to 29 United States Code Section 12132 and California Civil Code Section 54.
Information regarding the rights provided under the Americans with Disabilities Act (ADA) may be obtained from the City Clerk's Office.
If
you need special assistance to participate in this meeting, please contact the City Clerk 's Office at (661) 758- 7215 to make reasonable arrangements to ensure accessibility to this meeting. Telephone (661) 758-7215 Requests for assistance should be made at least two (2) days in advance whenever possible. 3 of 11
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STAFF REPORT
City of Wasco
TO: Honorable Mayor and Council Members
FROM: M. Sco tt Hurlbert, City Manager
Tom Schroeter, City Attorney
Luis Villa, Public Works Director
Isarel Perez-Hernandez, Finance Director
DATE: February 8, 2022
SUBJECT: Conceptually approve a 5 -year residential and commercial solid waste rate adjustment schedule, subject to final review and approval April 2022, Review residual expense data, and Approve the Associated Draft Proposition 218 Notice for a public hearing to adopt rates April 2022
RECOMMENDATIONS
1. Conceptually approve a 5 -year residential and commercial solid waste rate adjustment schedule, subject to final review and approval in April 2022 (Attachment 1, Scenario 2A-NEW).
2. Review residual expense information requested at the December 14, 2021 Special Council Meeting.
3. Approve the associated Draft Proposition 218 Notice for a public hearing to adopt rates in April 2022 (Attachment 2).
BACKGROUND
A comprehensive rate study of revenues and expenditures for the Sanitation Enterprise fund was presented to the City Council on January 17, 2012 with RESO No. 2012-2834 for approval. The City has op erated for nine years without a comprehensive rate study.
Consequently, the City engaged R3 Consulting Group (R3) to develop a Solid Waste Enterprise Fund 10 -year financial model and evaluate various rate adjustment options (scenarios) for the next five years.
To comply with SB 1383 the City needs to provide residential recycling service to all residential accounts and commercial recycling and organic waste collection to all accounts unless they qualify for a de minimis or limited storage space waiver. The City is in 4 of 11
the process of finalizing the negotiation of a franchise agreement with American Refuse to provide those additional residential and commercial services that the City needs to comply with SB 1383.
The City’s residential rate ($28.12/month) is at the higher end of the average residential rate in the region and that rate does not include residential recycling services, which the City needs to implement to comply with SB 1383. Residential recycling service will add an additional $5.28 per month t o the current residential rate assuming biweekly collection and $8.28 for weekly collection,
The Division is projecting a $900,000 (~30%) revenue shortfall for FY 21-22. While the Division entered FY 21-22 with a health operating reserve balance of $3.4 million, without a rate adjustment that reserve will be completely exhausted within two years. For the Division to remain financially viable significant additional revenue is needed to address the current 30% revenue shortfall, the additional costs associ ated with the required residential recycling and commercial recycling and organics collection s ervices, the necessary replacement of collection vehicles that have outlived their useful life , and other cost increases.
DISCUSSION
Outsourcing of Solid Waste Collection Services
There are pros and cons of operating municipal solid waste collection services or franchising those services to the private sector. One of the major advantages of municipal services is the direct control of the City’s solid waste collection system and the elimination of the need to manage a private sector operator. With that total control , however, also comes total responsibility for the safety, regulatory compliance, and finances of that system.
While the City needs to increase rates at this time, it may also wish to consider outsourcing the City’s municipal solid waste operations to the private sector as a potential means for reducing solid waste rates. The City of Shafter recently outsourced its municipal operations to American Refuse. The associated residential rate ($27.16/month) is less than the City’s current residential rate ($28.12) without accounting for any increase to the City’s rate to provide for required residential recycling services. In short, this $27.16 rate already reflects the proposed rate increases needed to meet SB 1383 requirements.
That $27.16/month rate also includes a 15% franchise fee to the City. Assuming American Refuse or another private sector hauler could provide similar residential rates, and competitive commercial rates there could be a net financial benefit to both the City and its ratepayers For example, this most closely compares with the proposed rate of $33.74 under recommended Scenario 2A-NEW (Attachment 1), which accounts for the removal of the residential rate subsidy and phasing of the rate increases.
City Council directed Staff on December 14, 2021, to further analyze the residual monetary impacts of outsourcing sanitation services. Staff requested outsourced rates for both residential and commercial services from American Refuse. An analysis of City costs that would remain if solid waste services were outsourced was also conducted by 5 of 11
the City and R3 (e.g., street sweeping costs, City support staff costs for billing, customer service, etc.). The rate increase associated with outsourced operations was then projected and compared to the rate increase associated with ongoing City/Hybrid services. That analysis found approximately $469,000 in retained expenses. The analysis also took into account the Franchise Revenue, resulting in a net shortfall of approximately $132,000.
Consequently, outsourced services would allow the City to reduce the initial projected rate adjustment by 50%, resulting in an annual savi ngs to rate payers. In the event that the City proceeds with outsourcing services, there would be a continued net Enterprise shortfall for approximately six years.
If the City were to outsource operations it is recommended that any such contract award require the selected contractor to:
1. Offer employment to all qualified displaced City employees;
2. Provide medical and dental coverage and a matching 401K retirement program;
3. Maintain the former City employees’ seniority levels; and
4. Honor all existing prescheduled vacation time.
Proposition 218 Noticing
Under Proposition 218 adopted by the voters in June 1996, mailed notices regarding any proposed water, sewer or solid waste rate increases must be provided to all affected customers at least 45 days before they can be considered at a public hearing by the Council for adoption. If protests are received from a majority of customers by the public hearing, the rate increases cannot go forward. The Council can adopt lower rates at that time without re-noticing but it cannot adopt higher ones.
For multi-year rate increases such as those proposed, only one rate notice and hearing is required for adoption, as long as the multi -year increases are clearly presented in the notice.
Schedule
The following summarize the proposed rate adoption steps and schedule.
When What
February 08,2022 Special Council Study Session
• Conceptually affirm preference for Scenario 2A-NEW
• Review requested retained expense data.
• Review/Approve draft Proposition 218 rate notice
February 11, 2022 Mail Proposition 218 rate notices (at least 45 days before rate hearing) April 05, 2022 Regular Council Meeting (public hearing): Approve multi-year rate increase
July 1 • Implement first of across-the-board residential and commercial rate increases
• Begin implementing recycling/organics waste program
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FISCAL IMPACT
Increase to residential and commercial solid waste rates in July 2022, ensuring fiscal solvency for the City’s solid waste enterprise fund.
ATTACHMENTS
1. Summary of Rate Adjustment Scenarios 2A and 2A-New
2. Draft Proposition 218 Notice
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cumulative
3/1/2022 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 increase Residential Rate Adjustment 10.0% 10.0% 10.0% 10.0% 10.0% 5.0% 69% Commercial Rate Adjustment 65.0% 20.0% 10.0% 10.0% 10.0% 5.0% 177% Annual Surplus / Shortfall (642,188)$ (861,683)$ (616,028)$ (335,769)$ (17,147)$ 85,077$ FYE Operating Reserves 2,739,730$ 1,878,047$ 1,262,019$ 926,250$ 909,103$ 994,180$ Residential Rate 30.93$ 34.03$ 37.43$ 41.17$ 45.29$ 47.55$ Commercial Rate 1 Metal Bin 2XWK 372.37$ 446.85$ 491.53$ 540.68$ 594.75$ 624.49$ cumulative
3/1/2022 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 increase Residential Rate Adjustment 0.0% 20.0% 17.0% 10.0% 10.0% 5.0% 78% Commercial Rate Adjustment 0.0% 85.0% 17.0% 10.0% 10.0% 5.0% 180% Annual Surplus / Shortfall (900,071)$ (999,472)$ (504,910)$ (213,540)$ 117,306$ 226,253$ FYE Operating Reserves 2,481,847$ 1,482,375$ 977,465$ 763,925$ 881,231$ 1,107,484$ Residential Rate 28.12$ 33.74$ 39.48$ 43.43$ 47.77$ 50.16$ Commercial Rate 1 Metal Bin 2XWK 225.68$ 451.36$ 496.50$ 456.15$ 600.76$ 630.80$ Scenario 2A - Weekly Residential Recycling
Scenario 2A NEW - Weekly Residential Recycling
Updated Scenario 2A-NEW Compensating for Delayed Implementation Scenario 2A Presented on December 14, 2021 Special Council Meeting 8 of 11
Notice of Proposed Solid Waste Rate Changes
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Notice to Property Owners of Public Hearing Regarding
Proposed Solid Waste Rate Changes
Hearing Date & Time: ________, 2022 at _____ p.m.
Hearing Location: Wasco City Council Chambers
746 8th St, Wasco, CA 93280
Why are you receiving this notice?
The City of Wasco (the “City”) is mailing this notice to you because you are a solid waste customer directly liable for payment of solid waste service fees, or are the owner of record of a property that receives solid waste services.
This notice describes proposed rate changes to be assessed to recover cost of providing solid waste service to City customers, and provides a notice of a public hearing to be held on XXXX, 2022 regarding these proposed changes.
Monthly solid waste service fees are the primary source of revenue used to pay for all aspects of the solid waste operations that provide services to customers. Expenses for those services include, but are not limited to, operations and maintenance, debt service, major and minor capital improvements, administration, as well as costs related to prudent long‐term operational, capital planning and financial management of the systems. Financial management would include maintaining adequate fund reserves and planning for contingencies.
Why are Rate Increases needed?
T
he City of Wasco is committed to providing high quality, reliable solid waste service at the lowest possible rates for its citizens. Rates have not been increased in the past 5 years and costs over that time have increased significantly. In addition, SB 1383 (Short ‐li
ved climate pollutants) requires the City to implement new residential and commercial services at considerable additional expense. To provide for the ongoing viability of current operations, and fund the additional SB 1383 residential and commercial services rate increases are necessary.
Wha
t do the new rates look like?
Table 1 below identifies the Residential and Commercial rate increases that are currently set to be assessed over the next five years. As shown, an initial commercial rate adjustment is to become effective on July 1, 2022 rate increase to both residential and commercial rates. Annual rate adjustments to become effective on July 1st of each of the following four years are also shown. The city reserves its authority to record or enforce a lien on properties.
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Notice of Proposed Solid Waste Rate Changes
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Table 1
Proposed Annual Rate Adjustments
<Assumes recommended Scenario 2A-New>
DESCRIPTION CURRENT 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 Residential 20% 17% 10% 10% 5%
Commercial 85% 17% 10% 10% 5%
REFUSE 1 HOUSE $ 28.12 $ 33.74 $ 39.48 $ 43.43 $ 47.77 $ 50.16 REFUSE 2 HOUSES $ 56.24 $ 67.49 $ 78.96 $ 86.86 $ 95.54 $ 100.32 XTRA BLK CONTAINER $ 11.40 $ 13.68 $ 16.01 $ 17.61 $ 19.37 $ 20.34 XTRA GREEN CONTAINER $ 11.40 $ 13.68 $ 16.01 $ 17.61 $ 19.37 $ 20.34 100 GALLON CART X 2 $ 37.61 $ 69.58 $ 81.41 $ 89.55 $ 98.50 $ 103.43 100 GALLON CART X 5 $ 94.04 $ 173.97 $ 203.55 $ 223.90 $ 246.29 $ 258.61 1/4 ‐ 300 GAL CONT 2XWK $ 28.22 $ 52.21 $ 61.08 $ 67.19 $ 73.91 $ 77.60 1/3 ‐ 300 GAL CONT 5XWK $ 94.05 $ 173.99 $ 203.57 $ 223.93 $ 246.32 $ 258.64 1/2 ‐ 300 GAL CONT 2XWK $ 56.44 $ 104.41 $ 122.16 $ 134.38 $ 147.82 $ 155.21 1/2 ‐ 300 GAL CONT 5XWK $ 141.05 $ 260.94 $ 305.30 $ 335.83 $ 369.42 $ 387.89 1/8 ‐ METAL BIN 2XWK $ 28.22 $ 52.21 $ 61.08 $ 67.19 $ 73.91 $ 77.60 1/8 ‐ METAL BIN 5XWK $ 70.54 $ 130.50 $ 152.68 $ 167.95 $ 184.75 $ 193.98 1/4 ‐ METAL BIN 2XWK $ 56.44 $ 104.41 $ 122.16 $ 134.38 $ 147.82 $ 155.21 1/4 ‐ METAL BIN 5XWK $ 141.05 $ 260.94 $ 305.30 $ 335.83 $ 369.42 $ 387.89 2/3 ‐ 300 GAL CONT 2XWK $ 75.23 $ 139.18 $ 162.84 $ 179.12 $ 197.03 $ 206.88 2/3 ‐ 300 GAL CONT 5XWK $ 188.07 $ 347.93 $ 407.08 $ 447.79 $ 492.56 $ 517.19 3/4 ‐ 300 GAL CONT 2XWK $ 84.64 $ 156.58 $ 183.20 $ 201.52 $ 221.68 $ 232.76 3/4 ‐ 300 GAL CONT 5XWK $ 211.57 $ 391.40 $ 457.94 $ 503.74 $ 554.11 $ 581.82 1‐ 300 GAL CONT 2XWK $ 112.85 $ 208.77 $ 244.26 $ 268.69 $ 295.56 $ 310.34 1‐ 300 GAL CONT 5XWK $ 282.10 $ 521.89 $ 610.61 $ 671.67 $ 738.83 $ 775.77 1/2 ‐ METAL BIN 2XWK $ 112.85 $ 208.77 $ 244.26 $ 268.69 $ 295.56 $ 310.34 1/2 ‐ METAL BIN 5XWK $ 282.10 $ 521.89 $ 610.61 $ 671.67 $ 738.83 $ 775.77 REFUSE 1.5 CY 2XWK $ 113.17 $ 209.36 $ 244.96 $ 269.45 $ 296.40 $ 311.22 1 ‐ METAL BIN 2XWK $ 225.68 $ 417.51 $ 488.48 $ 537.33 $ 591.07 $ 620.62 1 ‐ METAL BIN 5XWK $ 564.19 $ 1,043.75 $ 1,221.19 $ 1,343.31 $ 1,477.64 $ 1,551.52
How do you file a protest or participate in the public hearing? Any property owner of a parcel subject to City solid waste service fees or any tenant directly responsible for the payment of solid waste service fees (i.e., a customer of record) may submit a written protest to the proposed rate changes. Only one protest will be counted per identified parcel. Should there be property owners who own multiple properties and wish to submit a protest letter, they may list those properties with the respective parcel number on one letter and each parcel will be counted provided there were no other letters received for that parcel.
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Notice of Proposed Solid Waste Rate Changes
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Every written protest MUST include ALL of the following to be counted:
(1) State that the identified property owner or customer of record is in opposition to the proposed rate changes;
(2) Provide the location of the identified parcel by including the street address or assessor’s parcel number (APN);
(3) Include the name and signature of the property owner or customer of record submitting the protest.
Written protests may be submitted by mail to the City Clerk at 746 8th St, Wasco, CA 93280, in person to the City Clerk, or at the Public Hearing (date and time noted above). Regardless of how the written protest is submitted, it must be received by the City 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 written protest, whether mailed or submitted in person to the City Clerk, that the enclosed protest is for the Public Hearing on the Proposed Rate Changes ‐ Solid Waste Service Fees.
The City Council will hear and consider all written and oral protests to the proposed rate changes at the Public Hearing. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest. Upon the conclusion of the Public Hearing, there will be no more written protests accepted and no more testimony taken and the City Council will consider adoption of the proposed rates for residential and commercial solid waste services described in this notice. If written protests against the proposed rates, as outlined above, are not presented by a majority of property owners or customers of record, the City Council will be authorized to impose the proposed rates. If adopted, the rates for solid waste will be in effect on the dates shown in Table 1.
If you have any questions about the proposed rate changes or would like to see more information about data used for the study, please contact ________________8:00 a.m. to 5:00 p.m. Monday through Friday. Additional information and documents related to the proposed rate changes can be found on the City of Wasco ’s website at www.cityofwasco.org/xxxxx .
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