That the City Council:
A. Conduct a public hearing on a resolution amending the Master Schedule of Fees pertaining to refuse collection fees; and,

B. APPROVE AND ADOPT RESOLUTION NO. _______ ENTITLED: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA, CALIFORNIA, AMENDING THE MASTER SCHEDULE OF FEES PERTAINING TO REGULATED REFUSE COLLECTION FEES CHARGED BY CR&R TO ITS CUSTOMERS.

In 2016 the California legislature adopted SB 1383, which required the California Department of Resources Recycling and Recovery (CalRecycle) to develop regulations to reduce organics in landfills as a source of methane.  These regulations impose numerous requirements on public and private agencies, including cities, commercial businesses, commercial edible food generators, trash haulers, self-haulers, food recovery organizations, and food recovery services, as well as residential and commercial customers.  The intent of SB 1383 is to support the achievement of statewide organic waste disposal reduction targets. Toward that end, SB 1383 requires that cities implement a variety of new monitoring and reporting measures which has resulted in increased costs for both cities and their waste haulers.

In response to this new law, the City Council approved the implementation of an SB 1383 compliant Single-Family Organics Collection Program in October 2019, as well as approving an associated refuse rate structure to fund the cost of this new program. In order to now fully comply with all remaining provisions and requirements of SB 1383, staff recommends the implementation of enhanced Outreach and Monitoring Programs to refuse services and operations, and an associated change to the multi-family and commercial refuse rate structure to fund the cost of these programs, as well as other recommended service enhancements. The proposed program will have no impact on the previously approved single-family residential organics program or rate structure that is currently in effect. Additionally, the City does not directly impose refuse charges on commercial and multifamily customers served by CR&R (the exclusive provider of these services in the City), but does regulate the rates charged by CR&R to its customers.
 
The proposed rate adjustment takes into consideration the cost to implement SB 1383 mandates for multi-family and commercial refuse customers, as well as several additional programs that, while not required by SB 1383, are recommended by staff to enhance refuse services and operations.
Costs related to SB 1383 mandated requirements include the following:

Print and Mailing
SB 1383 requires cities to transmit an annual notice of SB 1383 related legal requirements to all residential and commercial customers.  In addition, a "Tier 1" and "Tier 2" edible food generator notice is also required to be mailed annually.  The law requires that the notices by made available by public agencies in any non-English language spoken by a substantial portion of the public who are provided organic waste collection services by that agency.  For the La Habra community, staff recommends notices be produced and mailed out in English, Spanish, and Korean.

Existing CR&R Recycling Coordinator Position
The City's contract waste hauler, CR&R, currently assigns a dedicated recycling coordinator position at their firm to cover the City of La Habra, limited to 20 hours per week. The general duties of this position are to provide outreach to CR&R customers and act as a liaison to City staff.  Due to the increased task and responsibilities associated with SB 1383's expanded reporting and compliance requirements, CR&R is proposing to increase the dedicated hours of this position from 20 hours per week to 40 hours per week. 

Reporting
Pursuant to SB 1383, cities are required to conduct expanded monthly, quarterly, and annual reports to CalRecycle.  The City has already contracted with an outside consultant to prepare and provide these additional services; therefore, these costs are not included in the proposed rate increase.

Waste Characterizations
SB 1383 regulations require waste characterization studies to be conducted to help develop a capacity planning report.  A waste characterization study consists of random samples of trash collected within the community to determine the types of debris disposed of by residential and business customers. These studies would need to be periodically conducted by CR&R.  CalRecycle will schedule two characterizations during the next four years, then two additional studies during the next decade. The results of the studies will become part of the capacity planning effort that is required by law.  New program costs would include monitoring services, waste evaluations, and the sampling of materials.
 
Route Audits / Container Inspections
SB 1383 requires cities to conduct “a sufficient number of route reviews and inspections of entities...to adequately determine overall compliance with this chapter.”  In order to satisfy this mandate, cities and waste haulers will be required to periodically inspect trash containers for contamination.  To comply with this new law, CR&R and City staff will conduct route reviews, conduct outreach to customers, identify contamination, and employ mitigation efforts.  Route reviews will continue to be performed to assess how well residents and businesses comply with SB 1383 regulations.

Edible Food Recovery Program
A primary focus of SB 1383 is the establishment of an edible food recovery program.  To help ensure compliance with legal mandates imposed by SB 1383, CR&R will contract with Abound Food Care, a food recovery organization with whom the City already has an established relationship with to help conduct education, outreach, and recordkeeping.  Abound Food Care has a strong history of working with local non-profits to divert edible food away from the trash collection system and into food banks and donation centers. Staff in the City's Community Services Department have worked closely with both Abound Food Care and Public Works staff to ensure the City remains on track to comply with this new provision of SB 1383.

Container Color
All recycling bin lids will need to be changed to meet SB 1383 regulation requirements for refuse bins. 

In addition to the mandated program changes described above, staff is also recommending several additional optional program/service changes for multi-family/commercial customers' refuse service to help satisfy trash diversion goals.  These include the following:

Bulky Item Program Enhancements
Over the past several years the community has experienced a significant increase in illegal dumping of trash and debris on City streets, alleys and parkways.  In response, both the City and CR&R have dedicated an increasing amount of staff hours to address this problem and respond to complaints of illegally dumped items. To help address this challenge, staff recommends expanding the City's existing bulky item program to now include both multi-family and commercial customers.

Currently, as part of the basic residential cart trash service, all residential cart customers are entitled to four bulky item pickups each year. As part of these bulky item pickups, single-family residential customers may dispose of either four large items or 20 plastic bags or trash or green waste per pickup. This same type of service is not currently offered to multi-family or commercial customers.  If multi-family or commercial customers currently wish to schedule a bulky item pick up, they are charged $40.71 for the first item collected and an additional $20.33 for each item thereafter.  This cost and inconvenience may be serving as a disincentive for multi-family and commercial customers to arrange for proper bulky item disposal, which may be contributing to the increase in illegal street dumping.
 
Under the proposed adjustments to the bulky item program, it is recommended that multi-family residential customers receive the same type of bulky item pick-up service offered to single-family residential customers, so that the number of bulky item pickups for multi-family customers would correspond to the number of units in the property.  For example, a 20-unit apartment complex would be eligible for up to 80 bulky item pickups per year. Any additional bulky item collections over this new limit would then be charged at the applicable extra item rate.  Commercial customers would continue to be charged the same rate as currently exists; however, they would be entitled to two bulky item pickups per year rather than one. Staff believes this change may incentivize multi-family customers and property managers to make more frequent appointments for bulky item pickup, with the goal of having less illegal dumping occur. 

Organics Rate Structure Change
It is proposed that the organics refuse rate, which currently run at approximately 110% of the normal refuse rate, be set at 75% of the normal refuse rate.  The intent of this recommended change is to incentivize businesses and multi-family residential units to recycle their organics and help the City meet SB 1383 compliance regulations.  This method of providing a discount for organics waste bins is recommended by CalRecycle and the 75% level is common among other Orange County cities providing this type of service.

Recycling Rate Structure Change
It is proposed that the recycling refuse rate, which is currently 50% of the normal refuse rate, be set to 75% of the normal refuse rate.  This adjustment will more accurately reflect the true costs of the recycling service that is being provided and staff anticipates the change will not be a disincentive for businesses to reduce trash generation and maintain program compliance.  Setting the recycling refuse rate at 75% of the normal refuse rate is also a common practice among other Orange County cities.
 

A table and graph describing the City of La Habra’s current and proposed refuse rate for a commercial 3-yard bin for once a week service and how it compares to other Orange County cities is shown in Attachment 2.
Summary of Multi-Family Resident and Business Calls and Protest Letters:
The City has been conducting notice, protest and hearing proceedings with respect to the proposed rate increase to CR&R’s customers in the manner set forth in Proposition 218.  The fact that it has done so should not be construed as an admission by the City that it is required by Proposition 218 to conduct such proceedings or that Proposition 218 applies to these rates. Staff mailed notices through a mailing service company on December 19, 2021, providing notice 50 days before the public hearing.

As part of this process, the City Council should consider all protests against proposed changes in fees.  If written protests against the proposed fees are presented by a majority of owners (over 50 percent) of identified parcels that receive commercial/multifamily service, the fees should not be approved. A total of 877 notices were mailed to all commercial and multi-family customers with bin or commercial cart service.  Single-Family Residential customers and multi-family customers with residential cart service did not receive notices because single-family rates are not affected by the proposed rate changes being considered at this public hearing.  For this public hearing, the City would need to receive 439 written protests in order for a majority protest to exist.

At the time this report was prepared, staff received a total of two calls related to the rate notice.  Neither caller was protesting the proposed rate adjustments; both were on general questions regarding the notice itself.  Staff received no protest letters regarding the notice.

The table below presents a summary of written protests that have been received:
         

Note: Only one official protest is allowed per parcel.

If approved by the City Council, the proposed refuse rate adjustments are estimated to generate additional new revenues of approximately $163,426 per year to offset the new required and optional program costs.