That the City Council:
A. Schedule a public hearing on proposed rate adjustments for commercial and multi-family refuse rates charged by CR&R to be held on Monday, February 7, 2022; and,

B. Direct staff to prepare and mail notices to all La Habra commercial and multi-family property owners regarding the scheduling of a public hearing on Monday, February 7, 2022, to consider the proposed rate adjustments for the City's Refuse Fund.

In 2016 the California legislature passed Senate Bill (SB) 1383, which requires the California Department of Resources Recycling and Recovery (CalRecycle) to develop regulations to reduce organics in landfills as a source of methane.  The regulations developed and adopted by CalRecycle place numerous new 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. These regulations are intended to support achievement of SB 1383's statewide organic waste disposal reduction targets. Furthermore, SB 1383 requires the implementation of a number of new monitoring and reporting measures to enforce these new regulations, which will result in increased costs for the City and its waste hauler. To offset these new costs, staff recommends adjusting refuse rates in 2022.
 

The proposed rate adjustment takes into consideration the cost to implement SB 1383 mandates, 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 are made available in any non-English language spoken by a substantial number of the public that is provided organic waste collection services by the 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 has a recycling coordinator position that is dedicated to La Habra for 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 increase of duties associated with SB 1383 reporting and compliance, CR&R is proposing to increase the dedicated hours of this position to La Habra 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 cities to conduct waste characterization studies 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 adequately assess how well SB 1383 regulations are being complied with by residents and businesses.

Edible Food Recovery Program
A large portion of SB 1383 is dedicated to the establishment of an edible food recovery program.  To help ensure compliance with law, CR&R will contract with Abound Food Care, a food recovery organization with whom the City has an established relationship, to help conduct education, outreach, and recordkeeping. Abound Food Care has 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. To that end, the Community Services Department has been an important partner, closely working with Public Works Department 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 bin color.

In addition to mandated program changes required by SB 1383, staff is also recommended a series of additional program/service changes for the City's multi-family/commercial refuse customers in order to satisfy trash diversion goals. These include the following:

Bulky Item Program Enhancements

Illegal dumping has increased citywide over the past five years and both CR&R and City staff have dedicated more staff, time and effort to address this growing problem.  Based on a review of the type of illegal dumping that has been occurring, staff recommends expanding the City's bulky item pick up to include 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 per year.  As part of these bulky item pickups, residents may dispose of either four large items or twenty plastic bags or trash or green waste. However, this same service is not currently offered to multi-family or commercial customers. If those customers wish to schedule a bulky item pick up, they must pay $40.71 for the first item picked up, and then $20.33 for each additional item. This cost and inconvenience may be serving as a disincentive for multi-family and commercial customers to arrange for proper bulky item disposal.
 

Under the proposed adjustments to the bulky item program, staff recommends that multi-family residential dwellings receive the same type of bulky item service as offered to single family residential account holders, 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 and any pickups beyond that would 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 will incentivize multi-family residents and property managers to make more frequent appointments for bulky item pickup and result in less illegal dumping. 

Organics Rate Structure Change
It is proposed that the City's organics 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 ensure SB 1383 compliance. This method of providing a discount for organics waste bins is recommended by CalReycle and the 75% level is fairly common among other Orange County cities providing this service.

Recycling Rate Structure Change

Staff proposes that the recycling refuse rate, which is currently 50% of the normal refuse rate, be set to 75% of the normal refuse rate. This will more accurately reflect the true costs of the recycling service that is being provided. Staff expects that the rate will still encourage businesses to reduce trash generation and maintain program compliance. Setting this rate at 75% of the normal refuse rate is fairly common 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.

Prior to authorizing the new rates, the City will conduct a noticed public hearing and accept protests against the proposal. This process will mirror the process that would be required by Proposition 218 if the waste charges were imposed by the City. Staff has prepared a sample notice showing the proposed rate adjustments as Attachment 1.  If approved, the public hearing will be set for Monday, February 7, 2022.