COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

October 1, 2010

BOARD MEETING DATE:

October 19, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Garbage and Recyclables Collection Rates in the Unincorporated Franchised Areas within the South Bayside Waste Management Authority

RECOMMENDATION:

Adopt a Resolution:

1.

Setting December 7, 2010 at 9:00 a.m. at your regularly scheduled Board meeting, as the time and place for a public hearing on the garbage and recyclables collection rates for the unincorporated franchised area within the South Bayside Waste Management Authority service area, exclusive of County Service Area No. 8 (North Fair Oaks) and West Bay Sanitary District; and

2.

Directing the Director of Public Works to send a notice of the proposed collection rate to each affected property owner.

BACKGROUND:

On July 14, 2009, your Board adopted Resolution No. 070189, which set the garbage and recyclables collection rates in County Service Area No. 8 (CSA-8) for FY 2009-10 and FY 2010-11.

On October 20, 2009, your Board adopted Resolution No. 070423 which approved a new franchise agreement with Recology San Mateo County (RSMC) to provide services for the collection of recyclable materials, organic materials, and solid waste. These services will be provided to CSA-8 and the unincorporated franchised area within the South Bayside Waste Management Authority service area, exclusive of CSA-8 and West Bay Sanitary District (County franchised area) from January 1, 2011 through December 31, 2020. The County franchised area is comprised of the following communities: Burlingame Hills, San Mateo Highlands and Baywood Park [Crystal Springs area], Harbor Industrial, Devonshire Canyon, Palomar Park, Oak Knoll, Kensington Square, Emerald Lake Hills, Sequoia Tract, Peninsula Golf Club, and Trailer Ranchero.

DISCUSSION:

Under the new agreement with RSMC, the County franchised area will receive significant service improvements that will include “automated” collection services, single stream recycling, and food scrap collection. It is anticipated that these services will increase program effectiveness, be more convenient for 4,900 residential and 190 commercial customers, and will increase diversion of solid waste from the landfill.

The South Bayside Waste Management Authority (SBWMA) is developing recommended garbage and recyclables collection rates (rates) for its member agencies’ consideration at the SBWMA Board meeting on November 19, 2010. Due to the timing of the SBWMA rate recommendation process and because CSA-8 has rates in place we are proposing rates only for the new County franchised area at this time. We plan to bring recommended rates to your Board for CSA-8 at a future date once the SBWMA has completed the rate review and recommendation process. However, the Unscheduled Service fees, set by this process, will apply also to CSA-8. The County has not previously set rates in the County franchised area as these areas were not previously covered by a franchise agreement. Rates for this area must be established before RSMC begins providing collection service.

The process to be followed for adopting the garbage and recyclables collection rates includes:

1.

Adopt a resolution of the proposed collection rates.

2.

Hold a public hearing and receive testimony on the proposed rates.

Article XIIC and XIID of the State Constitution (Proposition 218), requires notices be sent to property owners alerting them of the public hearing to consider any new or increased property related fees, and a mechanism for rejecting the fees via a “majority protest” at the public hearing. We are recommending that your Board direct us to notify each affected property owner of the proposed rates by mail and to explain that protests to the rates must be in writing.

If there were a successful majority protest, the Board would be prevented from setting the rates.

The proposed rates are listed in Exhibit A to the Resolution and represent a nine percent (9%) rate increase from the existing rates set by Allied Waste. The rate increase is predominately due to new collective bargaining agreements, new collection service trucks, and customers migrating to lesser garbage collection service levels. The recommended rates reflect a five percent (5%) franchise fee that will be paid to the County from RSMC’s direct customer billing of the collection service charges. The Department will evaluate the rates at six and twelve-month intervals after RSMC begins providing the service to ensure that the rates are adequate to generate the revenue required to pay for all costs associated with the collection and disposal service.

The franchise agreement included fees for Unscheduled Services (Attachment Q of the Franchise Agreement) that we are recommending your Board reaffirm through the rate adoption process attached as Exhibit B to the Resolution. The Unscheduled Services are generally those additional services that are specifically requested and paid for by the ratepayer, in addition to the basic collection service and charges. The Unscheduled Service fees will apply to CSA-8 and the County franchised area once RSMC begins providing service. The Unscheduled Service fees are not property related and therefore not subject to the Prop 218 rate setting requirements.

The Franchise Agreement allows for specific adjustments in RSMC’s compensation during the first three years to reflect the change in service collection methods and provision of service to a new area. Subsequent annual adjustments will be based on the consumer price index and are anticipated to be modest, which should provide additional rate stabilization.

RSMC, SBWMA, and the County have been working collaboratively to implement an effective outreach program to educate customers within the service area about the new services. The Department will also outreach to those customers in CSA-8 who choose to maintain their collection service preference and will be affected by the Unscheduled Services fees (e.g. Backyard service vs. curbside service). In addition to the current outreach, the County has notified customers through a property owner letter of the upcoming changes in service, posted information on the Department’s website regarding the new service, and has scheduled evening public meetings on November 4, 2010 at the Fair Oaks Community Center and December 2, 2010 at the Belmont Library to discuss the changes in service.

County Counsel has reviewed and approved the Resolution as to form.

Approval of this action will contribute to the Shared Vision 2025 outcome of a Collaborative Community by continuing to promote regional solutions as a SBWMA member agency while informing and engaging residents in the process to adopt garbage and recyclables collection rates for the County franchised area.

FISCAL IMPACT:

The proposed rates reflect a nine percent (9%) increase over the current rates. The SBWMA will complete their rate review in November 2010; however, the projected average rate increase for the SBWMA member agencies is approximately 16%.

We estimate that it will cost approximately $5,000 ($1 per rate payer) to prepare, print and mail individual notices to each property owner. This cost will initially be paid for by the Solid Waste Fund, which will be reimbursed from the franchise fees later this fiscal year.