COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

November 18, 2010

BOARD MEETING DATE:

December 7, 2010

SPECIAL NOTICE/HEARING:

Complied Required Notification

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

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

RECOMMENDATION:

Adopt a Resolution adopting the garbage and recyclables collection rates for the Unincorporated Franchised Areas within the South Bayside Waste Management Authority service area, exclusive of County Service Area No. 8 (North Fair Oaks) and West Bay Sanitary District.

BACKGROUND:

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 (SBWMA) 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.

On October 19, 2010, your Board adopted Resolution No. 071108, which set 9:00 a.m. on December 7, 2010, in your Chambers as the time and place for a public hearing regarding the adoption of the proposed garbage and recyclables collection rates for the County franchised area.

DISCUSSION:

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 on January 1, 2011. 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 rate includes 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 SBWMA developed and presented recommended garbage and recyclables collection rates to their member agencies at the SBWMA Board meeting on October 28, 2010. Their recommendation for the County franchised area was a four and one half percent (4.5%) rate increase. The Department has conducted a detailed independent review and analysis of the customer base, existing and anticipated service levels, and revenue requirements specifically for the County franchised area. We have determined that a nine percent (9%) rate increase is necessary to meet the anticipated revenue requirements. The Franchise Agreement with RSMC requires that interest be paid by the County on any balance owed to RSMC resulting from adopted rates that are insufficient to meet the revenue 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 services to the service area. Subsequent annual adjustments will be based on the consumer price index and are anticipated to be modest, which should provide additional rate stabilization.

The Franchise Agreement included fees for Unscheduled Services (Attachment Q of the Franchise Agreement) that 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 the County franchised area and CSA-8 once RSMC begins providing service. The Unscheduled Service fees are not property related fees and therefore not subject to the Proposition 218 rate setting requirements and are attached as Exhibit B to the Resolution.

We plan to commence the rate setting process for CSA-8 at your Board meeting on December 14, 2010 such that rates are approved by the beginning of March of 2011.

The Department complied with the public outreach and process outlined in the October 19, 2010 Board Report by completing the following:

1.

Sent letters dated October 1, 2010 to each property owner describing the changes in service, posted information on the Department’s website regarding the new service, held evening public meetings on November 4, 2010 at the Fair Oaks Community Center and December 2, 2010 at the Belmont Library to discuss changes in service, and published a Notice of Public Hearing in a newspaper of general circulation once per week for two consecutive weeks prior to the hearing.

2.

Articles XIIC and XIID of the State Constitution (Proposition 218) require that a notice be sent to property owners alerting them of the public hearing to consider any new or increased property related fees. In compliance with the law, 6,000 letters were sent to property owners via mail on October 22, 2010, that included information about the proposed rates, the date and time of the public hearing, and the process for rejecting the fees via a “majority protest” at a public hearing.

At the time this report was prepared, the Department had received five (5) valid written protests on the proposed garbage and recyclables collection rates. We will report to your Board on any written protests that are received up to and including the date and time of the public hearing.

The process for adopting the Garbage and Recyclables Collection Rates is:

1.

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

2.

After considering all written and oral objections to the proposed rates, close the public hearing and determine if there is a majority protest to the proposed garbage and recyclables collection rates.

3.

If there is a majority protest, terminate the consideration of adopting rates for garbage and recyclables in the County franchised area.

4.

If there is not a majority protest, adopt the resolution and set the garbage and recyclables collection rates for the County franchised area effective January 1, 2011.

If a majority protest occurs, the Board would be prevented from adopting the rates.

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:

There is no direct impact to the General Fund. The proposed rates reflect a nine percent (9%) increase over the current rates. The SBWMA has recommended an average rate increase of 16% to their member agencies.