HomeMy WebLinkAboutItem 7.1 PrtyTxBasicGarbageSvFee
~
.
.
CITY OF DUBLIN
"
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: April 26, 1993
EXHIBITS ATTACHED:
Collection of Basic Garbage Service
Fees on Property Tax Bills
(Prepared by: Paul Rankin, Assistant City Manager)
1/9hronology of Development of the Mandatory Garbage Ordinance.
2. /Basis for Establishing a Mandatory Garbage Ordinance.
SUBJECT:
RECOMMENDA TION~ l ~ Deliberate and direct staff to provide public notice and bring back the
,\IJ'I' necessary resolutions to carry out City Council policy.
FINANCIAL STATEMENT: The Action which the City Council takes will dictate the financial impact.
DESCRIPTION: On December 14, 1992 the City Council opened the public hearing on the
establishment of an administrative fee for the imposition of liens pursuant to the Mandatory Garbage
Ordinance. The City Council received the Staff Report and public testimony. The public hearing was
then continued to January 11, 1993. The continuance allowed for a more in-depth discussion of the
Mandatory Garbage Ordinance.
The City Council selected Option 3 and directed staff to return with further information. The descriptions
which follow were summarized from the January 11, 1993 Staff Report. The City Council has essentially
three options from which to direct S~aff to take action. These were previously reviewed by the City
Council at a Public Hearing on January 11, 1993.
1) Direct Staff to begin enforcement of the Mandatory Garbage Ordinance already adopted and administer
liens accordingly. In February 1992, the City Council passed a resolution implementing the
Mandatory Garbage Ordinance. This directive would necessitate that staff reintroduce
procedures to establish an administrative fee for placing liens on properties. There were
between 40 to 60 delinquent accounts which were subject to the lien process, when the City
Council considered the issue in January. These delinquencies were generated from services
rendered from March 1992 through June 1992. Under the Mandatory Garbage Ordinance, the
Company can not discontinue service on delinquent accounts. This assures protection of the
health and safety of neighborhoods.
2) Repeal the Mandatory Garbage Ordinance. This action would require staff to bring back the
appropriate resolutions repealing the Mandatory Garbage Ordinance. There are implications
associated with this action which should be noted.
a)
There would be an impact 0 residential rates. When the law went into effect on
February 28, 1992, there were 308 units without service. As of October, there were 85
customers subscribing as Super Recycler; therefore, it appears that a large number
who were not previously customers subscribed to the standard 32 gallon can service.
Based upon the 1993 rates, residential garbage collection would produce $24,450 less
in revenue to Oakland Scavenger Company. This represents approximately 3.8% of
the total projected residential revenue.
"
It would not be expected that expenses would be reduced by an equal amount since a
large part of the residential cost of service is overhead and labor. These costs do not
decrease with less subscribers because the truck must still pass these homes. The
difference is that the remaining rate payers would experience an increase to account
for significant portion of the estimated lost revenue of $24,450. If the entire reduction
in revenue was spread on the first can of 5,000 estimated remaining subscribers, rates
would increase by approximately 40 cents per month. These calculations were based
on certain assumptions and there is no means to determine the accuracy; however,
Staff believes that they are conservative estimates of the impact on revenue from
residential customers.
"
1
b)
Increased staff time or consultant time to revise the Source Reduction and Recycling
Element which identifies the Mandatory Garbage Ordinance as a mechanism to
--------------------------
to.. r _________
ITEM NO.
1.1
COPIES TO: Dan Borges, Livermore Dublin Disposal
CI~
FILE 8 I 0 0
. .
reduce solid waste going into the landfill and provides for all residents to participate
in the curbside recycling program.
.
.
,"
c) The payment for recycling and special clean-ups would no longer be shared by all
households which benefit.
d) There may be some complaints from residents who voluntarily complied with the
Mandatory Garbage Service and have paid for service since implementation.
e) There may be increased incidents of illegal dumping. As previously reported the
Health Department supports the Mandatory Garbage Ordinance.
3. Direct Staff to bring back the necessary resolutions to implement a system by which residents would be
charged for basic garbage service on their property tax bill. The background, issues and process to
accomplish this action is described below.
At the January 11, 1993 City Council meeting, a continued public hearing was held to discuss
administrative fees for liens levied under the Mandatory Garbage Ordinance. Comments were heard
from the public related to the Mandatory Garbage Ordinance and the City Council considered the
options. The City Council approved a motion directing staff to prepare the necessary documents to place
an appropriate rate for basic service on the property tax bills. The basic garbage service includes weekly
pick up of one 32 gallon container, curbside recycling, four (4) special clean-ups, county and
administrative fees.
As shown in Exhibit 1, the development of the Mandatory Garbage Ordinance has taken place over a long
period of time. This was enacted to address programs mandated by State Law as well as a means of
addressing equity issues in spreadhlg the cost of service across the entire community which receives a
benefit. Exhibit 2 discusses some of the basic reason for undertaking the Mandatory Garbage Ordinance.
This includes a discussion of the inclusion of the program in the adopted Source Reduction and Recycling
Element (SRRE).
Garbage Service on the Property Tax Bill
j
"
"
~;I
.~1
l
..
The impact on residential customers will vary depending on the level of service received. Customers
who currently have the typical one can service (one 32 gallon container) would no longer be required to
pay Livermore Dublin Disposal (LDD) on a quarterly basis. The break down of customers and their level
of service is as follows:
,'I
.'
Service Number of Percentage of 32 Gallon Number of Percentage of
Level Customers Total Customers Service Level Customers Total Customers
20 Gallon 85 2% 1 Can 2,339 44%
40 Gallon 37 1% 2 Can 2,372 45%
45 Gallon 259 5% 3 Can 192 4%
4 Can 20
5 Can 1
.;
. ,
:',1
:1
'1
l
,"
.:
':1
1
The cost of service would be included in their semi-annual payment to the County for property taxes. If a
customer has a higher level of service, i.e. two (2) 32 gallon containers or more, they would still be
charged for the basic service level on their property taxes. Charges for additional service (i.e. the second
can) would be billed by LDD directly and paid on a quarterly basis. Property taxes are assessed on a
Fiscal Year basis (July - June).
, '
I'!
Placing the first can of garbage service, curbside recycling and the four special clean-ups on the property
tax bill would require several steps to complete. The steps involved in the process are as follows:
The City passes resolutions implementing the program and revising the rate schedule
setting the rates to be charged. The resolution implementing the program is submitted to
the County which then gives the City a reference number under which the fee is charged.
Revise the Franchise for garbage collection and disposal and the Recycling Agreement with
Livermore Dublin Disposal (LDD), to identify the City's role in collection and payment of
the basic service level.
Similar to assessment districts such as the street lighting assessment district, staff utilizes a
computer service to specify the properties to be charged the fee. The fee would be charged
to all single family residential units which receive backyard garbage service. Multi-Family
1"-
f..
,.
units with centralized bin service and commercial customers would not be impacted by this
program.
.
.
:
4. The computer service company submits a magnetic tape to the County Tax Assessor's Office
by August 10, for the current fiscal year. In short, the fee which would be charged on the
property tax bill submitted August 10, 1993 would cover July 1993 through June 1994.
Property taxes are typically paid by the resident or their lender in two payments in
December and April.
5. The City would receive the payment from the County once the assessments are collected
minus County collection fees. The City normally receives the majority of these funds in
December and April.
6. A schedule, as specified in the revised agreement with Livermore Dublin Disposal, would be
implemented to pay Livermore Dublin Disposal for their services.
7. The City Budget will need to reflect the collection of assessments as revenue and the
amounts paid to LDD as expenses. Based on 5300 customers the total expense reflected in
the 1993/94 budget would be $580,720.
The City Staff time in assessing all properties will be reduced from the process of only placing liens on
delinquent properties. In addition, some members of the public had previously questioned why there
should be any exemptions in the mandatory garbage ordinance Exemptions are granted when a property
produces no solid waste. The Ordinance provides for vacant residences. The proposed process will
eliminate exemptions and all residential property owners will pay for basic service.
Changes to the Current Service DeliveI:)" Method
The current method of operation allows the residential customer to choose between a number of service
levels. These service levels, listed below, include curbside recycling.
20 Gallon Container (super recycler)
32 Gallon Container (standard service)
40 Gallon Container
42 Gallon Container
45 Gallon Container
Because of level of complexity posed by levying different service levels, the Super Recycler Rate and
other rates can not be offered when placing the fee on the property tax bill. Under the proposed
program all service levels would be based on one 32 gallon container. Residential customers would, of
course, be allowed to order extra can service which would be billed by LDD directly. This actual reflects
only a small numb.er ofresidents. Approximately 90% of the customers have one or two 32 gallon can
service.
Rates for Service
Since placing the garbage fee on the property tax bill is structurally different from the current program,
the rate charged must be adjusted. The rate is built by using the estimated cost of service. There are
several factors which will be unknown at the time the rate is established. Therefore, the actual rate
charged on the property tax bill will be an estimate and future assessments will need to be adjusted in
arrears. For example, if annual costs in Fiscal Year 1993-94 are less than estimated, the FY 1994/95
assessment would be reduced to eliminate any surplus. If there is a deficit, the future assessment
calculations would factor in any necessary recovery of the prior year shortfall.
Two specific factors which have not been included are: Measure D and the Alameda County Business
License Tax proposed to be $0.95 per ton. At this time the reality of these charges are uncertain and
depend on the outcome of the court case and the County Board of Supervisors actions.
Delinquency charges, i.e. property owners not paying their taxes, will vary based on the actual number of
delinquencies for a given fiscal year. The estimated rates assume a delinquency rate of 5%.
.,
"
i
Livermore Dublin Disposal has also indicated that since they will be paid in arrears for their services,
they will be losing interest on that money. LDD states that this will also impact rates. Rough estimates
produced by LDD indicate a loss of approximately $7000 per six months of service. This translates into
an additional charge of $0.22 per month for each residential customer. The exact cost of this lost revenue
will be subject to documentation and submittal of detailed information in the company's rate application.
The estimated cost is listed as "LDD Adjustment" in the table below.
"
,
The rate for January. June 1994 assumes a 3% increase for recycling and a 5% increase for collection and
disposal costs. This is due to the agreement between the City and Livermore Dublin Disposal. The
.
.
recycling agreement is adjusted annually based upon changes in the CPI, while garbage collection is
based upon operating costs, plus a reasonable return on investment.
"
The following table provides information on estimated rates for the Fiscal Year 1993-94. The annual cost
of the Assessment Program Service Method is then compared to the annual cost of the Current Service
Method.
Fiscal Year 1993-94
Estimated Estimated
Monthly Rate Monthly Rate
July -Dec. Jan -June
(Includes Estimated (Includes Inflation
Service expenses) Increases)
Single Can Collection/ 6.78 7.11
Disposal Service
Recycling 1.34 1.38
Computer Service 0.03 0.03
County Fees 0.14 0.15
Delinquent Fees. 0.43 0.45
LDD Adjustment 0.22 0.22
Total Mthlv Charge 8.94 9.34
Yearly Cost for
Basic Service - FY 1993-94
Annual Payment using the
Assessment Service Me,thod
$109.68
Annual Payment under
the Current Service Method
adjusted for inflation
for 1/94 -6/94
. $98.22
The cost of Basic Service under this program continues to be very competitive. The Company is
providing weekly collection and disposal as required by City Ordinances. The minimum charge at the
Pleasanton Transfer Station for Dublin residents is a minimum of $10 per visit. Even if a Dublin resident
only took their waste to the Transfer Station once every two weeks, the cost would be $260 per year.
Residents receiving backyard service, once a week receive a higher level of service for half the cost to
dispose of the waste themselves.
Recommendation: Deliberate and direct staff to provide public notice and bring back the necessary
resolutions to carry out City Council policy.
I'~
'1
;
j
,\ ~
,
,~
.." ,
,'...
" .
.
.
CHRONOLOGY OF DEVELOPMENT
OF MANDATORY GARBAGE ORDINANCE
Prior to the development of this Ordinance, residents were required to
dispose of accumulated garbage on a weekly basis. It was only legal
to haul waste from a single residence. All other hauling was required
to be conducted by the franchised waste hauler, with limited
exceptions for items such as landscaping and demolition debris.
Januarv 1. 1990 AB 939 became effective. This state Law requires
that cities develop plans to reduce the amount of solid waste placed
in the landfill. The reductions must equal 25% in 1995 and 50% in the
year 2000. Failure to meet these requirements could result in fines
levied against the City of up to $10.000 per day.
December 10. 1990 City Council approved a Memorandum of understanding
to allow the Waste Management Authority to secure the services of a
Consul tant to prepare the Source Reduction Recycling Element (SRRE)
for all of the member agencies.
Auqust 26. 1991 City Council reviewed the Preliminary Draft SRRE at a
City Council meeting.
The draft plan identified as a short-term program, the inclusion of
all single family homes in the curbside recycling program through the
adoption of an ordinance requ1r1ng the minimum level of garbage
service for all households. This results in an assurance that
curbside recycling is e~tended to each household. No comments were
received related to mandatory recycling.
October 10. 1991 - City Council conducted a public hearing on the
draft SRRE. No change was made to the inclusion of the mandatory
program in the SRRE.
December 23. 1991 Pursuant to previous direction by the City
Council, Staff presented information to the City Council on the issue
of mandatory garbage service. Based upon the information, Staff was
directed to prepare the necessary ordinances and present them at a
public hearing.
January 13. 1992 - City Council conducted a public hearing on the
proposed Mandatory Garbage Ordinance. The Ordinance was introduced
and an amendment to the franchise agreement was approved. Once
approved, all non-subscribers would have until March 16, 1992 to
subscribe.
January 17. 1992 - A total of 418 special notices were mailed to
addresses not identified as current LDD customers. The notice advised
of a public hearing to obtain input on the proposed Ordinance and
explained how the system would work.
Januarv 27. 1992 - The City Council conducted a second public hearing.
As a result of the special notice, Staff reported that they received 3
telephone inquiries. (Two persons took care of their own garbage and
EXHIBIT ~
, .
.
.
one was a garbage company employee.) Three members of the public
representing 2 households addressed the City Council on this item.
The Ordinance was passed on a majority vote.
February 10. 1992 The City Council adopted by resolution an
administrative procedure for Requesting an Exemption from Mandatory
Garbage.
March 23. 1992 - The City Council adopted the Final Source Reduction
Recycling Element required under state Law. This document included as
a recycling program the extension of garbage service (including
curbside recycling) to each household.
July 13. 1992 staff reported that 38 customers requested an
exemption, 6 were automatically granted as vacant homes under the
Ordinance. Staff was directed to proceed with processing exemption
requests under the explicit language of the Ordinance, which only
provides for exemptions when no garbage is generated or produced.
-:1
Auaust 24. 1992 Five of the households which had filed for
exemption appealed the Staff denial to the City Council. The Staff
determination was that an exemption was not warranted under the
language of the Ordinance. The City Council upheld 4 of the denials
and approved 1 exemption.
..i
December 14. 1992 - Staff presented a report at a public hearing on
the establishment of an administrative fee for levying liens. One
member of the public spoke at the hearing in objection to the fee and
one member spoke in support of a fee. The public hearing was
continued to January 11, 1993 to consider issues surrounding the
imposition of the Mandatory Garbage Ordinance.
January 11, 1993 - Staff presented a report at a public hearing on the,
establishment of an administrative fee for levying liens and
discussing issues relating to the Mandatory Garbage Ordinance. Two
members of the public spoke at the hearing objecting to the Mandatory
Garbage Ordinance. Staff was directed to prepare documents to place a
fee for garbage service on the property tax roll. This fee will be
equivalent to the cost of one can service, recycling, the four special
clean-ups, county fees, and administrative costs.
PSR/lss a:lllChron.doc.agenda#11
, ,',
"
',\
,I
BASIS FOR THE ESTABL~ENT OF A MANDATORY GARBA~RDINANCE IN THE CITY
OF DUBLIN
. state Law (AB 939) required that the City adopt a plan to reduce
the amount of waste placed in the landfill. The City can face
$10,000 penalties if it does not meet state requirements.
. The adopted Source Reduction Recycling Element identifies that one
recycling program to be implemented is the extension of curbside
recycling to all residences. This is included as one component in
the basic garbage rate for each household.
. State Law requires that cities exert greater control over
accounting for waste generated in the community. This includes
tracking waste by the type of generator (i.e. residential,
commercial, etc.).
. The entire community benefits from recycling programs; therefore,
it is appropriate to share the cost. If recycling programs are not
in place, the City may not-meet mandated goals and could face
penalties. The entire community benefits from the avoided cost of
locating and developing new landfills, if the existing ones are
filled prematurely.
.
Weekly garbage service benefits the health, safety and welfare of
the entire community.
.
The agency responsible for enforcement of health laws related to
garbage accumulation supported the change.
.
Prior to establishment of the mandatory ordinances, local laws
required residences to dispose of garbage on a weekly basis. There
was not any mechanism to assure compliance with this law.
.
If an individual hauled their own garbage on a weekly basis to the
closest licensed facility, they would spend more than $34 per
month. The monthly cost of receiving service at their home is
proposed to be $8.00 per month or less depending on the level of
service.
. Availability to regular service should reduce incidents of illegal
dumping in commercial dumpsters and avoid increased costs of
disposal to local businesses.
. The cost of service includes special clean-ups, which occur on a
quarterly basis. It is difficult for the collector to identify
non-subscribers, who may benefit from the program without
contributing any revenue for the service.
. For small generators the City developed a Super Recycler rate which
offers regular waste collection, curbside recycling, and special
clean-ups for $6.90 per month or $1.59 per week (rate proposed in
January, 1993).
.
The Ordinance contains prov1s10ns pursuant to state Law which allow
for the recovery of delinquencies through a lien process. Without
this process, uncollectible accounts are written off as a Company
operating expense. This results in delinquencies being paid by
those customers who are paying for their service.
PSR/lss a:lllMand.doc.Agenda#11
EXHIBIT J