| | | | | | | |  | CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
Staff Report |
June 4, 2024
ORDERS OF BUSINESS |
| | | | | | | | TO:
| Honorable Mayor and City Council Members
| SUBMITTED BY:
| Mary Bilse, Environmental Programs Manager
| APPROVED BY:
| Chip Rerig, City Administrator
| | SUBJECT: | Resolution 2024-044 approving a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective July 1, 2024, and approving Amendment No. 3 to the Memorandum of Understanding between ReGen Monterey and Member Agencies for Fiscal Year 2024/25 |
|
| | | | | | | | | RECOMMENDATION: | | Adopt Resolution 2024-044 approving a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective July 1, 2024, and approving Amendment No. 3 to the Memorandum of Understanding between ReGen Monterey and Member Agencies for Fiscal Year 2024/25. |
|
| | | | | | | | | BACKGROUND/SUMMARY: |
Solid Waste, Recycling, and Organics Collection Rate Adjustment Calculation
On June 17, 2014, Council approved a Franchise Agreement (Agreement) with GreenWaste Recovery (GWR) for the collection of solid waste, recycling and organics, subsequent to a competitive Request for Proposals selection process. The Agreement became effective on July 1, 2015 and expires on June 30, 2030. The Agreement includes a prescribed formula to determine annual rate adjustments by GWR, effective each year on July 1. This index-based formula includes the cost of disposal and processing (“tipping fee”) at the ReGen Monterey (formerly known as Monterey Regional Waste Management District) facility in Marina, inflationary indexes for adjustments to GWR labor and operating costs, regional implementation of SB 1383 (further discussed below), and the City’s Franchise Fee of 13%.
HF&H Consultants, LLC (HF&H) was retained by ReGen Monterey to review GWR’s request for an adjustment to customer rates, effective July 1, 2024 (Attachment 2). The rate review resulted in a 3.59% rate increase due to labor and material inflationary indices for the period reviewed. ReGen Monterey originally estimated the City’s rate increase to be 3.95%, but after review, it was reduced to a 3.59% rate increase.
Rate Adjustment Approval
While the Agreement requires the City Council to approve annual rate adjustments, the rate adjustment is based upon disposal fees and actual tonnage, inflationary indexes for GWR labor and operational costs, and cost for the City’s Franchise Fee and other regulatory fees. City staff, in tandem with ReGen Monterey staff and HF&H, finds the rate calculation methodology to be consistent with the Agreement. Therefore, staff recommends Council approve Resolution 2024-044 (Attachment 1) and rate adjustment, which becomes effective on July 1, 2024, in accordance with the Agreement.
Memorandum of Understanding (MOU) for Regional SB1383 Implementation
In November 2020, CalRecycle issued regulations to implement Senate Bill (SB) 1383, with the goal to reduce the amount of organic material being landfilled by 75% by 2025. CalRecycle regulations place significant responsibility for implementation on local municipalities, including food waste collection from all residential and commercial customers, public education and outreach, enforcement, developing or increasing the capacity of edible food recovery programs, and purchasing recycled organic material such as compost.
In response to the SB 1383 regulations, ReGen Monterey’s Technical Advisory Committee (TAC), which is comprised of staff from each Member Agency including the City, waste haulers in the ReGen Monterey service area, and ReGen Monterey, have been working collaboratively to implement program changes to meet the regulations.
The Member Agencies determined ReGen Monterey has the expertise and resources necessary to implement shared activities on the Member Agencies’ behalf, and agreed to reimburse ReGen Monterey for proportionate shares of designated annual costs incurred by ReGen Monterey for these activities under the MOU regarding assistance with compliance with SB 1383. Elements of the regulations that are being managed by ReGen Monterey under guidance of the TAC are similar to last year and include public outreach, contamination monitoring, enforcement, reporting, and edible food recovery programs. The regional costs for implementation of SB 1383 under this MOU are included in the collection rates charged by GWR. The MOU Amendment No. 3 is included as Attachment 3.
The City’s share of regional costs for implementation of SB 1383 in Fiscal Year (FY) 2024/25 is $11,225. This amount is reflected as an agency fee in the solid waste, recycling, and organics collection rate adjustment. |
|
| | | | | | | | | FISCAL IMPACT: | The new collection rates reflect an increase of 3.59 % and are included as Exhibit A in Resolution 2024-044 (Attachment 1). The 3.59% rate increase is due to labor and material inflationary indices for the period reviewed. The cost of SB 1383 implementation is also included in the fees.
For context, a residential customer with a 32-gallon trash cart will now pay $53.78 a month for solid waste, recycling and yard trimming service, as compared to the current rate of $51.91 a month, or $22.44 more per year. Commercial rates vary based upon the size of the cart, frequency of collection, and type of collection service.
The City’s share of regional cost to ReGen for FY 2024/25 will increase from $9,486 to $11,225. This cost will be covered in the Public Works/Environmental Programs operating budget.
The City’s Franchise Fee of 13% for FY 2023/2024 was estimated at $443,074 and for next FY 2024/25, the franchise fee is estimated at $458,996. |
|
| | | | | | | | | PRIOR CITY COUNCIL ACTION: | In June 2021, Council approved GWR’s imposition of a 2% formula-based rate adjustment for the collection of solid waste, recycling and organics. GWR’s rate increase was primarily due to the creation of a $72,600 fund to buffer anticipated costs of SB 1383.
In November 2021, Council amended the City’s Solid Waste and Materials Recovery Ordinance (Chapter 8.16) to address the new requirements of SB 1383. In December 2021, Council amended the Franchise Agreement with GWR to comply with SB 1383 and approved a 3.76% extraordinary rate increase to cover the additional operational costs associated with SB 1383.
In June 2022, Council approved a 2.14% increase for GWR for the collection of solid waste, recycling and organics. Council also approved Amendment No. 1 to the MOU between the Monterey Regional Waste Management District and Member Agencies for FY 2022/23 regional costs associated with SB 1383.
In June 2023, Council approved a 3.71% increase for GWR for the collection of solid waste, recycling and organics. Council also approved Amendment No. 2 to the MOU for FY 2023/2024. |
|
|