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SR-9B (5) . ~ 98 . > . EPWM:CP:TD:sm:srtonfee Council Meeting: August 2, 1994 Santa Monica, California AUG 0 2 1994 TO: Mayor and city Council FROM: City staff SUBJECT: A Resolution Establishing a Monthly Refuse Tonnage Surcharge on Private Refuse Haulers serving the Commercial/Industrial Areas within The City INTRODUCTION This report recommends that the City Council pass a resolution imposing a monthly tonnage surcharge of $13.35 per ton on all refuse collected by private haulers from the commercial and industrial districts within the City. This surcharge will help the City finance continued waste-diversion compliance methods associated with AB 939, the Solid Waste Management Act of 1989, as well as help fund the expansion of city-sponsored recycling programs in the commercial and industrial areas. ~ACKGROUND On January 1, 1990, the Solid Waste Management Act of 1989 (AB 939) became law. This law requires, under penalty for noncompliance, that each City in the state reduce its 1990 base-year generation of solid waste by 25% as of January, 1995 and by 50% as of the year 2000. The city of Santa Monica has for several years operated an aggressive solid waste diversion program. The additional waste diversion efforts in the commercial sector will build upon and expand these existing efforts. AUG 0 2 199't 1 98 f i . . , . DISCUSSION Despite the successful expansion of our waste-diversion efforts, the city has achieved to date an approximate 14% waste diversion rate. In order to increase this to the 1995 state-mandated 25% rate, two areas need enhancement: Our public education and outreach activities must be significantly increased; and the Santa Monica Recycling Program must be expanded into the commercial and industrial areas. A Waste Generation Analysis conducted in 1989 indicated significant diversion potential in this sector, especially with the commodities of mixed paper and cardboard. Thus far, all the costs of Santa Monica's waste diversion efforts have been borne solely by City-serviced customers. Those customers in the commercial and industrial sector who choose to subscribe to private hauler service are not obliged to pay any of the charges associated with the city.s overall environmental program efforts designed to achieve state-mandated waste diversion goals. This has resulted in giving private haulers a competitive advantage in setting lower rates and in limiting the city's fiscal ability to sustain and expand waste diversion programs. In order to correct this situation, on July 12, 1994 the Santa Monica city Council amended Municipal Code section 5.08.430(f) to provide for imposing a fee surcharge on private refuse haulers serving the commercial industrial sector. The attached resolution which is presented for Council adoption will implement this fee on 2 , . private refuse haulers. Many other cities within the state have promulgated surcharges on private haulers to help finance AB 939 compliance efforts. These surcharges usually take the form of a percentage of monthly revenues collected by individual private haulers. In a meeting held last year with private waste hauler firms serving Santa Monica, representatives from these firms expressed their preference for a monthly "tonnage-based-surcharge" in lieu of a total revenue- based surcharge similar to what they pay in other jurisdictions. city staff concurs with this methodology for computing the proposed surcharge. To establish a fee structure which generates revenue sufficient to finance the expansion of recycling programs into the commercial/industrial sector, staff is recommending a $13.35 per ton surcharge on all refuse collected by private haulers servicing the commercial/industrial sectors within the city. Private haulers will be required to submit total monthly tonnage reports to the Solid Waste Division along with the commensurate payment. All permitted private haulers in the City have been notified by letter regarding the proposed surcharge resolution. FINANCIAL/BUDGE,:/? IMPACT Assuming a total projected volume of 36~OOO tons per year, the projected annual revenue from this new surcharge is approximately $480,000. These revenues will be deposited in revenue account 27- 500-441-00000-0529-10000. Staff has determined this amount to be 3 ~ . . adequate to fund City-sponsored recycling services for the customer-base serviced by the private refuse haulers as well as to support the administration of AB 939 compliance and expanded public education and outreach programs in those areas. The recently adopted budget for FY 1994-95 projects total revenues of only $354,000 from this surcharge due to the delay in its implementation until October 1, 1994. Staff has analyzed the $354,000 revenue projection and recommend it be increased by $6,000 to $360,000 which will more accurately reflect the proposed revenue stream. RECOMMENDATION It is recommended that 1) the city council adopt the attached resolution establishing a surcharge of $13.35 per ton on all refuse handled by private refuse haulers servicing commercial and industrial customers in the City, and 2) increase the revenue budget at account 27-500-441-00000-0529-10000 by $6,000 for a total of $360,000. Prepared by: Craig Perkins, Director, Environmental & Public Works Management Tom Dever, Solid Waste Operations Manager 4 ---- ~ . ,- RESOLUTION NO. 8800 (CITY COUNCIL SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ESTABLISHING A SURCHARGE FEE ON PRIVATE REFUSE HAULERS SERVICING THE COMMERCIAL AND INDUSTRIAL SECTORS WHEREAS, Municipal Code Section 5.08.250 allows a monthly fee for general City Sanitation services to be set by resolution; and WHEREAS, Municipal Code Section 5.08.430(f} allows for the establishing of a refuse service surcharge on private refuse haulers serving the commercial and industrial sectors; and WHEREAS, a study has determined that sanitation service fees must be established and revised in order to promote waste diversion efforts and recover all city costs for providing sanitation services; and WHEREAS, the fees established by this resolution are no more than necessary to recover the costs of the services provided, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: section l. A monthly refuse surcharge of $13.35 per ton will be assessed on all private refuse haulers operating within the City as of October 1, 1994. - -- ----- , " - . Section 2. The city Clerk shall certify to the adoption of this Resolution, and thenceforth the same shall be In full force and effect. APPROVED AS TO FORM: k~~~ MARSHA J . S MOUTRIE city Attorney - --- --- . ... " Adopted and approved this 2nd of August, 1994 9 ~yor I hereby certify that the foregomg Resolutlon 8800 (CCS) was duly adopted at a meetmg of the City Council held on the 2nd of August, 1994 by the followmg vote. Ayes; Councllmembers' Abdo, Gerner, Olsen, Rosenstelll,Vazquez Noes; Councllmembers Holbrook Abstam: Councllmembers None Absent Councilmembers: Greenberg ATTEST' ~~/~ ~. City Clew