MEETING DATE: 5/8/2018
DEPARTMENT: RESOURCE MANAGEMENT AGENCY
DEPT HEAD/DIRECTOR: John Guertin
AGENDA ITEM PREPARER: Kevin McCarthy, IWM Technical Lead Manager
SBC DEPT FILE NUMBER: 142
SUBJECT:
RESOURCE MANAGEMENT AGENCY - J. GUERTIN
Landfill Ad Hoc Committee’s Recommendation to Reduce In-County Waste Tipping Fee Rates at the John Smith Road Landfill.
SBC FILE NUMBER: 142
RESOLUTION NO: 2018-18
AGENDA SECTION:
REGULAR AGENDA
BACKGROUND/SUMMARY:
Summary
The Landfill Ad Hoc Committee, comprised of Board Chair Botelho and Vice-Chair Muenzer, met on March 15, 2018 and is recommending a reduction in waste tipping fee rates for In-County customers reflective of either Option A or Option B as follows:
Option A:
- Franchise (“Packer”) rate reduced from current $44.75 per ton to $34.00 per ton;
- Public Refuse rate reduced from current $62.75 per ton to $56.00 per ton; and
- Roll Off Refuse rate reduced from $57.00 per ton to $56.00 per ton.
Option B:
- Franchise (“Packer”) rate reduced from current $44.75 per ton to $23.00 per ton;
- Public Refuse rate reduced from current $62.75 per ton to $46.00 per ton; and
- Roll Off Refuse rate reduced from $57.00 per ton to $46.00 per ton.
The Landfill Ad Hoc Committee decided that it is important to lower the In-County waste tipping fee rates to be more equitable with the rates that adjoining (out-of-county) communities pay. For example, the Cities of Gilroy and Morgan Hill, through a long-term disposal agreement through June 30, 2030 with Waste Connections, currently pay $23.00 per ton for franchise tons disposed at John Smith Road Landfill (JSRL) as compared to the In-County franchise rate (“Packer”) of $44.75 per ton. Option A cuts the difference in half between the Gilroy and Morgan Hill rate vs. the In-County rate whereas Option B matches the rate.
The proposed reduction in the Public Refuse rate (the rate for users who bring their garbage directly to JSRL) from $62.75 per ton to $56.00 per ton under Option A would lower the rate back to the Public rate that was in effect in 2010 when the current landfill operating agreement was approved. The Public rate under Option A will also be consistent with the Public rate charged at the publicly-owned Monterey Peninsula Landfill in Marina.
The Option B rate scenario for the Public loads would bring the rate down to $46.00 per ton which is in line with the Public rate at the publicly-owned Billy Wright Landfill new Los Banos. The Rolloff Refuse rate would also be lowered to $46.00 per ton which is likely to generate new business at the JSRL.
The In-County waste tipping fee rate reductions will result in the following rate impact:
Option A: In-County franchise residential rates will decrease approximately 5%, the In-County franchise commercial rates will decrease approximately 7%, and the In-County Public rate will decrease approximately 12%.
Option B: In-County franchise residential rates will decrease approximately 9%, the In-County franchise commercial rates will decrease approximately 14%, and the In-County Public rate will decrease approximately 31%.
Background
The current Landfill Operating Agreement between the County and Waste Connections (dba Waste Solutions Group of San Benito, LLC) grants the County with the “sole right to set and adjust the In-County Waste Tipping Fees.”
Historically, the In-County waste tipping fee rates have not been adjusted very frequently or significantly over the past ten years. The franchise tipping fee rate was last adjusted July 1, 2015 from $43.00 per ton to the current rate of $44.75 per ton. Prior to that, the franchise rate was last adjusted in 2009. The public refuse rates were last adjusted July 1, 2015 from $61.00 per ton to $62.75 per ton and prior to that in 2013 they were increased from $57.00 to $61.00 per ton.
BUDGETED:
SBC BUDGET LINE ITEM NUMBER:
CURRENT FY COST:
No impact; This is a non-General Fund item.
STAFF RECOMMENDATION:
It is recommended that the Board of Supervisors:
Discuss and approve either Options “A” or “B”
Option “A”: Adopt Resolution 2018- approving a reduction in In-County waste tipping fee rates at the JSRL for San Benito County Franchise (“Packer”), Public Refuse, and Roll Off Refuse customers with new rates effective July 1, 2018 as follows: Franchise (“Packer”) rate of $34.00 per ton; Public Refuse rate of $56.00 per ton; and Roll Off Refuse rate of $56.00 per ton;
Option “B”: Adopt Resolution 2018- approving a reduction in In-County waste tipping fee rates at the JSRL for San Benito County Franchise (“Packer”), Public Refuse, and Roll Off Refuse customers with new rates effective July 1, 2018 as follows: Franchise (“Packer”) rate of $23.00 per ton; Public Refuse rate of $43.00 per ton; and Roll Off Refuse rate of $43.00 per ton.
ADDITIONAL PERSONNEL: No