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HomeMy WebLinkAboutItem 8.2 MeasrDRecyclPrgmExp .. . . CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: May 9, 1994 SUBJECT: Proposed Measure D Recycling Program Expenditures for Fiscal Year 1994-95 (Prepared by: Paul S. Rankin, Assistant City Manager/Administrative Services Director) EXHIBITS ATTACHED: NONE RECOMMENDATION: 1. Receive Staff Report and provide direction. 2. Direct Staff to establish a Public Hearing date for setting revised /7A.~ garbage/recycling fees. ~ 3. Direct Staff to prepare any necessary agreements with Livermore-Dublin Disposal to implement the multi-family recycling subsidy. FINANCIAL STATEMENT: Staff has presented proposed programs to be funded by Measure D Recycling Revenue. If implemented the annual recycling fee would be reduced by 38% which would result in a reduction in the total annual garbage/recycling assessment of approximately 5.5%. Multi Family property owners would experience a decrease in recycling costs of 40.6% per dwelling unit. DESCRIPTION: In January of 1994, the City Council conducted a Public Hearing which adjusted garbage rates for all classes of service provided by Livermore-Dublin Disposal. A major factor in the need for a rate increase was due to the reinstatement of Measure D recycling fees in August of 1993. Prior to this date, collection of the fees had been suspended due to pending litigation related to the validity of the charge. At the time that the rate adjustments were presented, Staff indicated that at a later date a report would be prepared to recommend that a portion of the current recycling program cost, be underwritten by the new Measure D revenues received by the City of Dublin. Allocation of Measure D Fees to Individual Cities The legislation implementing Measure D contains specific formulas for the distribution of a portion of the fees back to individual agencies to support recycling and source reduction programs. The Measure D fee collected at the landfill is $6/ton of garbage disposed in the landfill. Alameda County Waste Management Authority (ACWMA) estimates that approximately $8 million per year will be generated from this revenue source. Under the legislation, 80% of these monies are distributed back to cities on a population basis (Le. $6.4 million of the total estimated $8 million). This formula will change in March of 1995. At that point, only 50% of the revenues collected will be returned to cities. Given that there will be a known decline in this revenue funding source, Staff is cautious in recommending the excessive use of these funds for on-going program operating costs. Anticipated New Programs In the Future It is anticipated that new programs will be required to meet the State requirements under AB 939. Given that the current franchise agreement with Livermore-Dublin Disposal runs through March of 1996, it is anticipated that either a contract amendment or a new contract would be required to implement new programs. Staff has noted that in surrounding cities which have implemented new collection programs, there is a substantial capital cost irl operating these new servicesi therefore, it may be appropriate to reserve a portion of the Measure D revenues to offset the future costs of new programs. This concept will be discussed further elsewhere in this report. Prior Use of Measure D Monies In the past, the City of Dublin has used Measure D monies to provide a credit to single family residential customers which pay for a curbside recyc;ling program, as well as a grant to underwrite a portion of the container costs fo~ the multi-family recycling program. Both of these expenditures were undertaken on a one- time basis, and did not provide on-going support to these programs. The City also used a portion of the funds in 1992/93 to support Staff costs associated with planning and implementing recycling programs. The City also supported a home composting bin subsidy program. COPIES TO: CITY CLERK FILE ~ ITEM NO. 8. ,'2 .. . . In the Fiscal Year 1993-94, Staff has also been working to identify businesses to participate under an ACWMA program which assists business customers in analyzing their waste stream and identifying additional recycling opportunities. Analysis of Estimated Measure D Funds to be A vaUable Current estimates of revenues available identify approximately $114,800 will be available in the Measure D fund at the conclusion of the current fiscal year. Staff estimates that in fiscal year 1994-95, the City will receive an additional $150,000 in Measure D revenue to be utilized for recycling and source reduction programs. As previously noted, due to the formula upon which Measure D monies are distributed, the City will experience a significant reduction in Measure D revenue beginning in Fiscal Year 1995-96. Provided that the total Measure D dGtlars collected at that time remain constant with current collections, Staff estimates that the City's annual allocation will be approximately $90,000, beginning in Fiscal Year 1995/96.. It must be noted that these projections are extremely preliminary, given the fact that no one can predict the impact of economic activity or State-mandated disposal reductions on the total amount of waste which will be delivered to the landfills. If the amount of waste delivered declines significantly, there would be corresponding reductions in Measure D revenues available to cities. Proposed Programs To Be Supported By Measure D In 1994/95 The following programs are recommended to be funded with Measure D revenue in the 1994-95 budget: 1. Christmas Tree Mulching Program - $2,500 In the past, a local Boy Scout troop has requested City of Dublin assistance in an annual fund-raiser where they collected and mulched Christmas trees in an effort to keep them out of the landfill. For their December, 1993 event, the Boy Scouts elected not to seek City participation in the project, and therefore no funds were expended. Staff is recommending that $2500 be programmed for this purpose in the upcoming fiscal year. The actual authorization to expend the funds would be subject to City Council approval of a specific itemized request presented by the Boy Scouts or any other group interested in performing this type of service for Dublin residents. 2. Commercial Recycling - $3,000 Staff is recommending that the City continue its efforts to work with commercial enterprises, to identify means by which they can reduce the quantity of garbage placed in the landfill. ACWMA has made arrangements through a master agreement with a consultant who will analyze commercial garbage and attempt to assist identifying appropriate ways to deal with the waste. 3. New Program Development Project - $42,000 As has been previously mentioned, the current City agreement with Livermore-Dublin Disposal expires in March of 1996. In order to have a new agreement and systems in place, Staff is recommending that the programs be developed and providers identified in Fiscal Year 1994-95. In order to accomplish this, it is anticipated that consultant expertise will be necessary in developing a request for proposal and assisting with negotiating the final terms with a provider. Staff is estimating that a budget of $69,000 should be provided for consultant services. Given that a portion of this service may be involved with the provision of general garbage service, it would be inappropriate to pay for the entire amount from Measure D monies. Staff has been advised that a majority of the time expended on new agreements is related to requirements for recycling and source reduction programs as part of the contract; therefore, Staff has anticipated that 70%, or approximately $42,000 of this line item, would be funded from Measure D monies in fiscal year 1994-:95. As mentioned, the primary purpose of this is to develop and implement new recycling programs. 4. Proposed Residential Recycling Subsidy - $48,500 As previously noted Staff is cautiously recommending on-going operational subsidies for recycling programs with Measure D monies. The direct result of this change will be to lower the cost of garbage service to residential consumers. Currently, the equivalent of $1.37/month of the basic residential garbage cost is related directly to the weekly curbside recycling program( This equates to approximately $16.44/year, which is included in the basic single family garbage assessment collected on the annual property tax bill. Based on an analysis of available and future revenue it appears possible to have the City pay the equivalent of $0.52 per month of residential recycling program operating costs with Measure D revenues. Residential customers would therefore be charged $O.S5/month or $10.20/year for recycling services. This represents a savings of 38% on recycling fees and an overall savings of 5.5% on a residential customer's annual garbage/recycling assessment. . . . The current cost of the multi-family recycling program is $1.28/month/unit or $15.36/year/unit. The multi-family program charges are collected monthly in arrears. With the Measure D subsidy, the cost to Multi- family operators would be $0.76/month/unit or $9.12/year/unit. Multi-family owners would experience a 40.6% decrease in their annual recycling costs. This should help to offset a portion of the increase experienced with the rate adjustments implemented last January. Since, the program is about to finish it first full year of operation, it should be noted that this program will be due for an increase, which is based upon CPI. Staff does not anticipate that the increase will exceed $0.03 per unit per month. Preliminary Indication of Impact On Residential Basic Garbage Assessment Single Family resi~ntial garbage customers pay for the service through an annual property tax assessment. Included in this assessment are the following components: weekly backyard collection of one 32 gallon garbage container, 4 special quarterly clean-ups, weekly curbside recycling collection, and County collection cost including an allowance for delinquencies. In Fiscal Year 1993-94 the annual assessment was $110.22 per household. Staff has evaluated the impact of the proposed subsidy plus estimated Fiscal Year 1993/94 assessments in excess of estimated expenses. It appears that the City Council will be able to levy an annual assessment in Fiscal Year 1994/95 for Single Family customers of $104.50. This represents a 5.5% decrease from the annual cost levied last year. The actual levy of the revised fee and supporting documents will need to be presented at a future meeting following a Public Hearing. A vailability Of Additional Measure D Funds Staff does not recommend programming all available Measure D funds at this time due to the uncertainty about the precise cost or types of programs, which may be offered in the near future. It is anticipated that some of this information will become clearer with the New Program Development Project proposed to be undertaken in Fiscal Year 1994/95. For example the initial cost of providing each homeowner with a separate cart for lawn clippings under a composting collection program, could cost in excess of $300,000. Capital costs as well as operating costs of new programs will need to be considered as the City addresses State Mandates to reduce the amount of garbage taken to the landfill. There will also need to be programs which address other sectors producing waste within the community. Conclusion The purpose of presenting this report at this time was to obtain conceptual input for the purpose of preparing the Budget for the Waste Management activity. Staff will need to take input from this meeting and develop the necessary agreements and implementation documents. Staff recommends that the City Council: 1. Receive Staff Report and provide direction on the proposed programs. 2. Direct Staff to establish a Public Hearing date and present a report to implement the residential recycling fee subsidy program. 3. Direct Staff to prepare and present for City Council approval any necessary agreements with Livermore-Dublin Disposal, to implement the multi-family recycling subsidy. a:59Recycl.doc. paul