RESOURCE MANAGEMENT AGENCY

Adopt Resolution setting a public hearing for June 11, 2019 and approving issuance of a Proposition 218 Notice for adopting the proposed maximum allowable solid waste collection rates with Recology San Benito County, effective July 1, 2019.

SBC FILE NUMBER: 142

RESOLUTION NO: 2019-40

Current solid waste rates were established through a competitive procurement process for a new Franchise Agreement commencing November 1, 2018 that was awarded to Recology San Benito County. The new Franchise Agreement included several program improvements and significant changes to recycling and organics collection programs for residents and businesses to meet state mandates AB 939, AB 341, AB 1826 and SB 1383. Per the new Franchise Agreement, solid waste rates are adjusted on an annual basis using a prescribed index-based methodology.  Year over year changes in a consumer price index and a fuel index are primarily used to adjust current solid waste rates to proposed new maximum solid waste rates. Actual changes in disposal and processing costs (“pass through costs”) are also included in the annual rate adjustment process, though such changes aren’t included in the annual rate adjustment process until calendar year 2020. The maximum allowed rate adjustment for non-disposal and processing costs is capped each year at 5% with any excess above the 5% carried over to the next rate year. Proposition 218 Noticing Process Upon Board approval, a Proposition 218 notice (attached) will be sent to all San Benito County unincorporated property owners to inform them of the proposed maximum allowable solid waste collection rates effective July 1, 2019.  A public hearing will be held at least 45 days after the notice is received by the affected rate payers with a proposed hearing date of June 11, 2019.  The Proposition 218 noticing process is intended to provide rate payers advance notice and an opportunity to file a formal protest regarding the potential new solid waste rates.  While the courts have not yet ruled that Proposition 218 applies to solid waste collection rates, in an abundance of caution, the County is following the “majority protest” proceedings set forth in Proposition 218. Statements of protest will be accepted through the public hearing on June 11, 2019.  At the end of the public hearing, the County Clerk will tally and report the qualifying written protests.  The Board of Supervisors will then certify that the written protests in opposition to the new solid waste collection rates meets or does not meet the 50 percent protest threshold.  In accordance with Article XIIID, Section 6, of the California Constitution, a "majority protest" exists if written protests against the proposed fee or charge are presented by a majority of owners of the identified parcels".  If a majority protest is not received, the Board of Supervisors may then approve adoption of the solid waste collection rates.  If a majority protest is received, the Board of Supervisors cannot increase the rates, and the rates will remain unchanged. The proposed new rates will pay for collection and disposal of garbage; collection and processing of all recyclable items, yard waste, and food scraps; seasonal recycling programs; and public education activities to meet state regulatory requirements. These services are available to County residents and businesses. The rates are established to increase recycling and composting to meet state mandates and divert materials from landfill. The proposed maximum allowable rate adjustment is 4.3% which was calculated using an index-based methodology summarized below in the table. The components in the rate adjustment process include two operating components (labor and other non-fuel and fuel) and disposal and processing costs. The index calculations for the operating components totaled 5.6% and the disposal and processing costs were not adjusted this year per the Agreement. When you combine these component index adjustments (math not shown below) you get an overall rate adjustment percentage of 4.3%.

Adopt Resolution setting a public hearing for June 11, 2019 and approving issuance of a Proposition 218 Notice for adopting the proposed maximum allowable solid waste collection rates with Recology San Benito County, effective July 1, 2019.