COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

December 7, 2006

BOARD MEETING DATE:

January 9, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Neil R. Cullen, Director of Public Works

SUBJECT:

Proposed Criteria for Providing Garbage Service in the Unincorporated Areas that are within the South Bayside Waste Management Authority’s Service Area - Burlingame to Menlo Park

Recommendation

Adopt a resolution:

1)

Approving the criteria for providing garbage service pursuant to uniform garbage franchises that are proposed to be negotiated between member agencies of the South Bayside Waste Management Authority (SBWMA) and private collector(s) beginning in January 2011; and

2)

Directing the Director of Public Works to contact known homeowners associations or advisory agencies in the unincorporated areas to:

a)

Advise them that their area is within the SBWMA service area, and that the criteria that will be used to determine the level of garbage/recycling/organic material collection service (Collection Service) that will be provided in their area either by a franchise agreement or without a franchise agreement, is as stated in this report; and

b)

Explain the difference between franchised and non-franchised garbage collection.

Vision Alignment

Commitment: Responsive, effective and collaborative government.

Goal 22: County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.

The adoption of a uniform franchise agreement by each agency that franchises garbage collection in the SBWMA service area can provide the most cost affective service to the rate payers while maximizing the amount of material that is diverted from landfills through recycling and other programs.

Background

Previous Board Action

Became a member of the SBWMA in 1982, which is comprised of 12 jurisdictions: Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Hillsborough, Menlo Park, Redwood City, San Carlos, the City of San Mateo, the County of San Mateo, and the West Bay Sanitary District.

Entered into a franchise agreement with subsequent amendments with BFI, now Allied Waste (Allied), for Collection Services in the North Fair Oaks Area (County Service Area No. 8 – [CSA8]).

History

The SBWMA owns and contracts for the operation of the San Carlos Transfer Station and Recyclery (Shoreway Facilities) that serves the service areas of the agencies that comprise the SBWMA. The Authority also manages the debt service related to the facilities. Each member agency has its own franchise agreement with Allied /BFI for Collection Services within their jurisdictions; and the SBWMA provides coordinated waste management related staff services to the member agencies including rate review and recycling program services.

The SBWMA, in February 2006, initiated a five and one half (5-1/2) year contractor selection process on behalf of its member agencies that can result in new franchises for Collection Services in each member agency’s area. They are also developing a new contract for the operation of the Shoreway Facilities that would also commence on January 1, 2011.

The SBWMA formed a Programs and Facilities Committee (PAF) and Process and Contracts Committee (PAC) (collectively, Committees) comprised of various board members and staff from member agencies. The Committees have reviewed various program, service, procurement process, and contracting issues and formulated recommendations for the SBWMA Board’s consideration. The SBWMA Board evaluated the Committees’ recommendations at its October 2006 meeting, and all member agencies, except the Town of Hillsborough, agreed to a criteria for developing Collection Services that will be provided in the member agencies respective areas through individual franchise agreements.

Garbage service in CSA8 is provided via a franchise agreement between the County and Allied; and garbage service in the unincorporated areas of West Menlo Park, Menlo Oaks, and Ladera is provided via a franchise agreement between Allied and the West Bay Sanitary District. It is envisioned that the County and West Bay will negotiate new franchise agreements for these respective areas.

However, there are currently unincorporated areas in the SBWMA service area that currently receive Collection Services by Allied, but which are not covered by a franchise agreement. They include Burlingame Hills, San Mateo Highlands and Baywood Park (Crystal Springs area), Harbor Industrial, Devonshire Canyon, Palomar Park, Oak Knoll, Kensington Square, Emerald Lake Hills, and the Sequoia Tract.

Historically, property owners in the unincorporated unfranchised areas were charged the same garbage rates as property owners in the adjoining city’s franchised area. However, this changed on June 1, 2006, as Allied increased the collection fees by 11.4 percent (11.4%) for all the customers in the unincorporated areas that are not covered by a solid waste franchise agreement, as collection rates are not regulated in these areas.

Discussion

Minimum Level of Service to be Provided

The SBWMA Board of Directors approved the following criteria to be used in developing uniform franchises for its member agencies, except Hillsborough:

Service Area Proposals: The SBWMA service area will be divided into two (2) collection districts for the purpose of receiving proposals - Belmont/Foster City north to the northern limits of Burlingame; and San Carlos/Redwood City south to the County limits. Portola Valley and Woodside are not included, as they are not member agencies of SBWMA and receive garbage service from another hauler.

All collected solid waste, recyclables, plant material and commercial food wastes will continue to be delivered to the Shoreway Facilities.

Minimum Residential Program:

Ø

Weekly collection of garbage at the curb.

Ø

Weekly collection (rather than the current bi-weekly collection) of recyclables and yard waste at the curb.

Recycling - Single-stream recyclables collection services (all recyclables - bottles, cans, and mixed paper, placed in one [1] container rather than the current dual-stream collection in which recyclables are separated by the customer by material type and placed in two [2] containers).

Contractor’s Compensation - Cost plus profit set by detailed reviews every third year with indexed adjustments in interim years.

Contract Term - Initial seven (7) year term with the right to extend to twenty (20) years.

Performance Standards - Included in the franchise agreement; still to be finalized.

Competitive Wages and Worker Retention - Language will be included in the franchise requiring competitive wages; and the retention of existing workers will be required for at least the first 90 days of contract.

Use of Alternative Fuels - The use of the Best Management Practices will be encouraged as the types of vehicles that will be on the market is changing due to various California Air Resources Board regulations.

Other Provisions

We are proposing that County standard contract provisions including employee jury service, non-discrimination and equal benefits be included in the County franchise agreements.

The franchises will include other provisions such as additional service. However, it is envisioned that additional service will be franchise specific, with each agency’s franchise listing the associated fees for the additional service.

Hillsborough is considering back yard service as the minimum level of service for its service area. However, this is subject to ongoing discussions with SBWMA and the Town.

Franchised and Non-Franchised Areas

Historically, there has been little difference between the service in a franchised or non-franchised unincorporated area, as the unincorporated area was receiving the same Collection Services for the same price as the adjoining city’s franchised area. A franchise was issued for CSA8 in they early 1980’s to address a health issue as approximately one-third of the single-family residents in the area were rental properties, and renters were not subscribing to garbage service.

Recently, Allied raised its rates in the unfranchised areas with no review since property owners are free to contract for this service with any service provider. However, historically, there is usually only one (1) provider in an area.

The recent Supreme Court decision in the Bighorn-Desert View Water Agency (Bighorn) litigation, confirmed that all property related fees or increases in property related fees are subject to the public hearing/majority protest process established by Proposition 218 (Article XIIID of the State Constitution). New fees or future fee increases cannot be adopted if there is a majority protest. Counsel for SBWMA concluded that a conservative approach to setting garbage collection charges associated with garbage franchises is to consider them subject to the State Constitutional provisions. Therefore, franchising of areas for Collection Services will necessitate the individual notification/public hearing/majority protest rate setting process, similar to what was used in conjunction with the recent proposed sewer rate increases in the sewer/sanitation districts governed by your Board. However, a recent Attorney General’s opinion leads us to believe that service can be terminated if the ratepayers reject the charges for service. The following is a summary of differences:

Description

Area Franchised

Area Not Franchised

Service is Mandatory

Yes, however, County Ordinance Code allows for self-haul.

No.

Minimum Service Level Defined

Yes.

No, however, it is proposed to be defined for the SBWMA service area with or without a franchise.

Additional Service Can Be Obtained for a Fee

Yes.

Yes.

Must Contract with Franchise Hauler

Yes, however, County Ordinance Code allows for self-haul.

No.

Rates Set by County

Yes.

No.

Rates Reviewed by County

Yes.

No.

County Collects Fees

No.*

No.

County Charges Fee to Administer Franchise

Yes.

No.

Rates Subject or Public Hearing and Protest

Yes.

No.

County Provides Oversight on Complaints Regarding Service

Yes.

No.

Franchise Service Area

Burlingame Hills,
San Mateo Highlands and Baywood Park (Crystal Springs area), and Harbor Industrial would be grouped into one (1) franchise in the north; and Devonshire Canyon, Palomar Park, Oak Knoll, Kensington Square, Emerald Lake Hills, and the Sequoia Tract will be grouped as one (1) franchise in the south. CSA8 will continue with its own franchise.*

Not applicable.

*

We assume the County will continue to collect garbage fees on the tax bill only in CSA8.

A resolution has been approved as to form by County Counsel.

Fiscal Impact

There is no fiscal impact associated with the recommended action. Charges will be established for Collection Services in those areas that are franchised and which the ratepayers will be required to pay after January 1, 2011, if your Board approves a franchise(s).

There is no direct impact to the General Fund. However, Collection Service charges are part of the facilities charges that are paid by both General Fund and non-General Fund supported departments.