Inter-Departmental Correspondence

Department of Public Works



January 28, 2011


February 15, 2011


Complied with Required Notification





Honorable Board of Supervisors


James C. Porter, Director of Public Works


Adoption of Garbage and Recyclables Collection Rates in County Service Area No. 8 (North Fair Oaks)



Acting as the governing board of the County Service Area No. 8, adopt a Resolution adopting the garbage and recyclables collection rates for County Service Area No. 8 (North Fair Oaks).



On June 16, 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 (SBWMA) service area, exclusive of CSA-8 and West Bay Sanitary District from January 1, 2011 through December 31, 2020.


On December 14, 2010, your Board adopted Resolution No. 071184, which set 9:00 a.m. on February 15, 2011, in your Chambers as the time and place for a public hearing regarding the adoption of the proposed garbage and recyclables collection rates for CSA-8.

Rate Adoption Procedures

The process to be followed for adopting the Garbage and Recyclables Collection Rates includes:



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



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.



If there is a majority protest, terminate the consideration of adopting rates for garbage and recyclables in CSA-8.



If there is not a majority protest, adopt the Resolution and set the Garbage and Recyclables Collection Rates for CSA-8, effective March 1, 2011.



Under the new franchise agreement with RSMC, customers in CSA-8 began receiving weekly “automated” collection services, single stream recycling, and food scrap collection on January 1, 2011. RSMC is utilizing new collection service trucks with automated arms and therefore require that customers place their carts near the curb or roadway for collection. It is anticipated that these services and collection methods will increase program effectiveness, be more convenient for 2,603 residential and 535 commercial customers, and will increase diversion of solid waste from the landfill.

Public Outreach and Notification of Proposed Rates

The Department completed the public outreach process, as outlined in the December 14, 2010 Board Report, which included the following:


In compliance with Articles XIIC and XIID of the State Constitution (Proposition 218), 3,226 letters were sent to property owners via mail on December 29, 2010, that included information about the proposed rates, the date and time of the public hearing, and the process for rejecting the rates via a “majority protest” at a public hearing.


Informational brochures describing the upcoming changes in service and an Unscheduled Services fee schedule were sent to every property owner in CSA-8. Additionally, information was sent to each customer participating in backyard service to ensure that they were aware that continuation of such service would be subject to additional fees, unless a fee waiver is approved based on the customer’s physical ability to transport carts to the curb.


Informational presentation to the North Fair Oaks Municipal Advisory Council at their December 2, 2010 meeting regarding the proposed rates and the rate setting process.


Public meetings were held at the Fair Oaks Community Center and the Belmont Library to discuss the changes in service.


Public hearing notice was published in a newspaper in a newspaper of general circulation.


Information regarding the new service has been posted on the Department’s public website


At the time this report was prepared, the Department had not received any 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.


Proposed Rates

The Department has conducted a detailed independent analysis of the customer base, existing and anticipated service levels, and revenue requirements specifically for CSA-8 and determined that no increase in the rates for commercial bin service is required. However, the Department is recommending a five percent (5%) rate increase for residential parcels and commercial parcels with cart service.


The proposed rates are listed in Exhibit A to the Resolution and would become effective on March 1, 2011. The charges based on the rates will appear on the property owner’s tax bill for FY 2011-12 for all parcels with residential dwellings, pursuant to County Ordinance Codes 4.04.200 and 4.04.220. Commercial parcels will continue to be billed by the service provider. Additionally, any Unscheduled Services requested by the customer will be billed directly to the customer by RSMC. The rate increases are predominately due to new collective bargaining agreements, new collection service trucks, and the cost of providing weekly service to all three carts for residential customers. The recommended rates also reflect an increase from three (3%) to five percent (5%) in the franchise fee that will be paid to the County.

Franchise Agreement Requirements
The franchise agreement with Allied Waste expired on December 31, 2010 and allowed SBWMA members to maintain a balancing account with the contractor. The purpose of the balancing account was to track the prior year’s surplus or insufficient revenue for services that were provided. A portion of the last two rate increases for CSA-8 has been applied to reducing the shortfall in the balancing account with Allied Waste in anticipation of the contract term ending. The amount currently due to Allied Waste for the 2009 revenue shortfall for CSA-8 based on SBWMA’s reconciliation of 2009 actual and projected 2010 costs is $28,000. The franchise agreement with RSMC does not allow for the member agencies to maintain a balancing account, therefore, the rates must be set to adequately pay for the cost for the collection services provided by RSMC each year. The recommended rates for CSA-8 include sufficient revenue to pay off the outstanding amount of $28,000 in the balancing account for the 2009 rate year.
The last six months of Allied Waste’s contract costs (July through December of 2010) have been projected based on the actual costs incurred in providing collection services to CSA-8 customers from January through July 2010. A final adjustment for costs will occur in 2011 to close the franchise agreement with Allied Waste. Any remaining shortfall in the balancing account will be factored into future rates for 2012. 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 rate 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.

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 garbage and recyclables solutions and engage the community in the process to adopt garbage and recyclables collection rates for County Service Area No. 8.



The proposed rates reflect a five percent (5%) increase over the current rates for residential dwellings and commercial parcels utilizing cart service, and no increase in rates for commercial parcels that subscribe to bin services. Through SBWMA’s rate review process, the average rate increase for the SBWMA member agencies is approximately 16%.