RESOURCE MANAGEMENT AGENCY - H. MAVROGENES

Continue to September 22nd meeting at which time the Board will be requested to adopt a Resolution approving solid waste collection rates.

SBC FILE NUMBER: 142

It is requested that the Board continue this matter to September 22nd, as staff is continuing to work with Recology on this matter. No action will be taken at today's meeting.

Staff met with Recology staff Phil Couchee and Carl Mennie, the City Managers of Hollister and San Juan Bautista via zoom on July 14 2020 to discuss options for a rate increase deferral. At this meeting, Regional Agency staff requested that Recology provide additional options to staff; Recology has requested additional time to provide these options, therefore, this item is continued until September 22nd.  

June 16, 2020 Agenda:

Current solid waste rates were established through a competitive procurement process for a new Franchise Agreement that was awarded to Recology San Benito County.  On November 1, 2018, the new Franchise Agreement commenced and 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 annual basis using a prescribed index-based methodology.  Year over year changes in a consumer price index and a fuel index are used to adjust the solid waste rates to the proposed new maximum solid waste rates. Actual changes in disposal and processing costs (“pass through costs”) are included in the annual rate adjustment process. 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. The proposed maximum allowable rate adjustment for the July 1, 2020 through June 30, 2021 is 4.5% which was calculated using the index-based methodology included in the franchise agreement; the components in the rate adjustment process include two operating components (labor and other non-fuel and fuel) and disposal and processing costs. The attached Public Notice hearing notice includes the new rates and the prior rates.

Proposition 218 Noticing Process

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 are accepted through the public hearing date on June 16, 2020.  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 would 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.

On April 21, 2020 the San Benito County Board of Supervisors adopted a resolution authorizing and directing staff to send a Proposition 218 notice of the proposed maximum allowable solid waste collection rates and the opportunity to submit written protests to affected rate payers and such a notice was mailed by Recology San Benito County to property owners and rate payers within the unincorporated County of San Benito on April 29, 2020.

The Board of Supervisors will hold the public hearing on June 16, 2020 to consider the proposed rates and receive any protests received. At the public hearing, the Board of Supervisors will hear and receive all oral and written protests. At the conclusion of public testimony, the Board of Supervisors will close the public hearing and hear the protest count from the Clerk of the Board and determine if there is a majority protest, which is 50% plus one.  If there is not a majority protest, the Board of Supervisors would approve the maximum allowable Solid Waste Rates set forth in the Public Hearing Notice, rates are effective July 1, 2020 to June 30, 2021.

Continue to September 22, 2020, at 9:00 a.m., at which  meeting the Board will be requested to adopt a Resolution approving solid waste collection rates.