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HomeMy WebLinkAbout7.3 Mandatory Recycle Single Use Ban~~~~ Off' nU~~~ /ii ~ 111 L~~ - ~ ~~~ DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL CITY CLERK File #810-60 February 21, 2012 Honorable Mayor and City Councilmembers ~~ Joni Pattillo, City Manager ° ~' Report on StopWaste.Org Mandatory Recycling and Single-use Ban Ordinances Prepared by Prepared by Roger Bradley, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council will determine whether to participate in two Countywide ordinances adopted by the Alameda County Waste Management Authority. The first ordinance places a mandate on businesses and multi-family dwellings to recycle all recyclable and compostable materials, and prohibits them from placing such materials in a garbage container. The second ordinance bans single-use bags from being used within the County and requires that businesses begin charging their customers a fee for giving out reusable bags. FINANCIAL IMPACT: Staff estimates that the Mandatory Recycling Ordinance could raise the cost of garbage collection for Dublin Businesses by as much at 50%. The Single-use Bag Ban would raise costs for businesses to acquire reusable bags, but would be offset by the revenue received from a new charge for reusable bags. RECOMMENDATION: Staff recommends that the City Council deliberate and, if desired, adopt the resolution opting out of one or both of the Alameda County Waste Management Authority ordinances. r'~.. Submitted By Assistant to the City Manager DESCRIPTION: Reviewed By Assistant City Manager On November 1, 2011, the City Council received a report on two proposed ordinances under consideration by the Alameda County Waste Management Authority ("ACWMA" or "StopWaste.Org") (Attachment 1). The first ordinance is a Mandatory Recycling Ordinance and the other aSingle-use Bag Reduction Ordinance. On January 25, 2012, the ACWMA adopted both ordinances. The ACWMA has included, within both ordinances, a provision that Alameda Page 1 of 4 ITEM NO. 7.3 County jurisdictions must decide whether to opt in or opt out of one or both of the ordinances before March 2, 2012. The following will outline each ordinance and their impacts. Mandatory Recycling Ordinance The proposed StopWaste.org Mandatory Recycling Ordinance would require all Alameda County multi-family properties and businesses that generate four cubic yards or more of garbage per week to segregate recyclable materials by July 1, 2012 (Phase 1) and would require all Alameda County multi-family properties and businesses to segregate organic materials by July 1, 2014 (Phase 2) for recovery. As indicated in the attached Staff Report, there are significant risks for the City in participating in the ACWMA ordinance. In particular, the Mandatory Recycling Ordinance may have a significantly negative impact on the City's rate structure, necessitating a large rate increase for commercial businesses. Staff had preliminarily estimated that a Mandatory Recycling Ordinance could raise commercial rates by as much as 50%, if Dublin's rate structure were to remain unchanged. Also, a change in law of this magnitude could trigger a franchise agreement provision requiring the City to renegotiate contractual provisions with the City's waste hauler and landfill disposal contractors to restructure the rates and/or modify other provisions within these agreements. Staff has not changed its opinion of these risks to the rate structure. A Mandatory Recycling Ordinance will shift materials and revenue away from garbage collection and would result in revenue shortfalls for the City's franchise hauler AVI, necessitating steep rate increases to recover the lost revenue. This is due to the fact that the City has a bundled rate for garbage service, where residents and businesses pay for the cost of garbage with recycling being provided at no additional cost. Thus, forcing businesses to increase recycling, which of course has positive environmental benefits, reduces the only element within the rate structure that generates revenue, garbage collection. This problem could be solved by establishing a rate for collecting recycling, but this would be a significant departure from the City's current rate structure. It is Staff's opinion that the ACWMA's Mandatory Recycling Ordinance will have an adverse impact on small businesses within the City of Dublin. In particular, businesses that generate less than four cubic yards of waste each week would not be forced to recycle as they are low volume generators. In order to gauge the impact on small businesses, Staff entered a scenario into the rate model where businesses under the ordinance reduce their garbage service by half and bring their recycling up to compensate for the lost garbage capacity. For example, a large store that generates 42 yards of waste each week could theoretically reduce its service by half to perhaps 22 yards per week of garbage and 22 yards of recycling and save $1,000 a month. This would force smaller businesses, which generate only three yards of garbage per week, to pick up the loss, raising their bill by nearly $135 a month. The garbage bill for the smaller business would increase from approximately $3,300 per year to about $4,900, and the annual bill for the larger would decrease from $47,000 to $35,000. As of December 2011, there are 294 (45%) service accounts that generate less than 4 cubic yards of service per week, which would be exempt from the ordinance. There are an additional 365 (55%) service accounts that generate 4 or more cubic years of waste each week, which would be impacted by the ordinance. To date, only the Castro Valley Sanitary District has opted out of the mandatory recycling ordinance, and based on conversations with representatives from the other County jurisdictions, Staff expects that other County jurisdictions will opt out of the ordinance. Page 2 of 4 The Mandatory Recycling Ordinance contains an "opt-out" provision enabling a jurisdiction to exclude its service area from the requirements of the Mandatory Recycling Ordinance. Should the City decide to opt out of the ordinance, the City could decide to opt in sometime in the future. As Staff reported previously, the State of California has passed mandatory recycling legislation that requires every business to at least subscribe to recycling services, but it does not require any particular level of performance. The State law will, of course, have an impact on the City's rate structure, although Staff expects that it will be much less severe than what would occur under the ACWMA ordinance. Thus, Staff would recommend that the City Council take a wait-and-see approach to the ACWMA ordinance, where the City allows the rate effects of the State law to cycle through a few rates adjustments, with the potential for the City to opt into the ACWMA ordinance at an appropriate point in the future. To opt out of the ACWMA Mandatory Recycling Ordinance, the City Council will need to adopt a Resolution (Attachment 2) excluding its service area from the ordinance. Single-use Bag Ban In addition to the Mandatory Recycling Ordinance, the ACWMA has adopted aSingle-use Bag Reduction Ordinance, which is intended to reduce the volume of single-use bags distributed in Alameda County and reduce negative impacts to the environment caused by bag litter and bag landfill disposal. The ACWMA Single-use Bag Reduction Ordinance bans all single-use carryout bags and imposes a minimum 10-cent-per-bag fee for recycled-content paper bags and for reusable bags. Retailers will retain the per-bag fee to offset costs, and they would be required to note any charges for bags on their customers' receipts. The proposed Single-use Bag Reduction Ordinance would take effect on January 1, 2013 and apply to retail establishments that either sell food products or have a pharmacy, which would impact approximately 30 of the City's businesses. Restaurants and nonprofit charitable reuse organizations would be exempt. The proposed Single-use Bag Reduction Ordinance could reduce litter and have other benefits for the City of Dublin. Supporting aSingle-use Bag Reduction Ordinance would help meet the requirements of the Municipal Regional Stormwater Permit ("MRP") as plastic and paper bags can be found in storm sewers and catch basins which drain into waterways and ultimately the Bay. In particular, the City of Dublin, under the requirements of the MRP, is required to reduce the amount of trash and litter discharged through its storm drain system by 40% by 2014. Staff would propose to meet this requirement, in part, by participating in the County-wide ban of single-use plastic bags, which would provide the City a 10% reduction credit in reducing its current trash load. The City's current trash load is 12,813 gallons. The 10% reduction that could be achieved by the plastic bag ban would equal a reduction of 1,281 gallons of litter removed from the City's creeks and waterways. In the event the City Council chooses to not participate in the bag ban, the 10% reduction associated with the ban could not be used, and the City would need to achieve a reduction of 1,281 gallons of litter per year by other means. The most likely measure would be installation of trash screens or filters in the storm drain system. If the City were to install trash capture devices in the commercial/ retail area, which has the highest trash generation rate of any land use (30 gallons per acre per year), this would require treatment of 43 acres. At a cost of $2,000-$10,000 per acre for treatment, the cost to treat the 43 acres would be a one-time capital expense of $86,000-$430,000, as well as ongoing maintenance costs of $10,000-$20,000 per year. The costs of the trash capture devices, as well as the annual maintenance costs, would come from the City's General Fund. Page 3 of 4 Staff believes that participation in the Single-use Bag Reduction Ordinance can save the City money as well as provide environmental benefits. Staff recognizes that such a ban would be foreign for Dublin residents and shoppers as bags would no longer be free of charge. While perhaps not overly significant, due to the low cost of the per-bag-fee, shoppers could go to the City of San Ramon instead of Dublin to escape paying the fee or the need to bring their own bags to stores. If it is the City Council's choice to opt out of the Single-use Bag Reduction Ordinance, the City Council would need to adopt a Resolution (Attachment 3) excluding its service area from the ordinance. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. November 1, 2011 Staff Report. 2. Resolution opting out of Phase I of the ACWMA Mandatory Recycling Ordinance #2012-1. 3. Resolution opting out of the ACWMA Single-use Bag Reduction Ordinance #2012-2. Page 4 of 4 ~~~~ Off' nU~~~ /ii ~ 111 L~~ - ~ ~~~ DATE: TO: FROM: STAFF REPORT CITY COUNCIL CITY CLERK File #810-60 November 1, 2011 Honorable Mayor and City Councilmembers ~~ Joni Pattillo, City Manager ° ~' SUBJECT: Report on Proposed StopWaste.Org Mandatory Recycling and Single-use Ban Ordinances Prepared by Roger Bradley, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council will receive a report on two proposed Countywide ordinances being prepared by the Alameda County Waste Management Authority (StopWaste.org). The first ordinance would place a mandate on businesses and multi-family dwellings to recycle all recyclable and compostable materials, and prohibit them from placing such materials in a garbage container. The second ordinance would ban single-use bags from being used within the County and require that businesses begin charging their customers a fee for giving out reusable bags. FINANCIAL IMPACT: The exact financial impact of the proposed ordinances is unknown at this time. Staff will need additional time to complete the financial analysis and has asked StopWaste.org to delay the Authority Board's consideration of the ordinances to allow each city additional time to consider and analyze the impact. The final drafts of these ordinances will not be available until November 4, 2011. RECOMMENDATION: Staff recommends that the City Council receive the report and discuss the potential impacts of said ordinances on the City of Dublin. .~~ ~ ~.. Submitted By" Assistant to the City Manager ~, Reviewed By Assistant City Manager Page 1 of 5 ITEM NO. 8.3 DESCRIPTION: The Alameda County Waste Management Authority ("ACWMA") Board and the Source Reduction and Recycling Board are known collectively as StopWaste.org and function as one agency to provide waste management and program planning services in Alameda County. The ACWMA Board consists of one elected official from each of the seventeen member agencies. The City of Dublin is currently represented by Councilmember Hildenbrand with Councilmember Biddle as the alternate. The ACWMA operates according to the terms of a 1992 Joint Exercise of Powers Agreement ("JPA") for the management of waste. According to the JPA, the ACWMA has the power to enact countywide ordinances and is also responsible for preparing planning documents to meet state requirements, implementing countywide diversion programs, and determining landfill disposal needs. In 2010, the ACWMA approved a Strategic Plan covering aten-year time period to define programs and efforts conducted by StopWaste.org. The Strategic Plan identified several goals to more effectively manage discards by the year 2020, including a goal that less than 10% of the materials found in an individual garbage container be readily recyclable and compostable materials. As part of the implementation of the Strategic Plan, two policies, a Mandatory Recycling Ordinance and aSingle-use Bag Reduction Ordinance, are being proposed by StopWaste.org staff and will be considered by the ACWMA Board on November 16, 2011. Mandatory Recycling Ordinance According to StopWaste.org staff, a Mandatory Recycling Ordinance is necessary to achieve the Strategic Plan goal that less than 10% of readily recyclable and compostable materials are disposed of, but instead that as much of this material be recovered as possible. The purpose of this Ordinance is to intensify landfill diversion efforts beyond the baseline gained through public education and voluntary recycling. A Mandatory Recycling Ordinance is also expected to help jurisdictions meet their own diversion goals and comply with the State of California mandatory recycling regulations. On October 9, 2011, Governor Brown signed AB 341, which is a Statewide mandatory recycling law. The State law applies to all businesses with 4 or more cubic yards of weekly service, and it applies to multi-family dwellings with 5 or more units. The State law mandates participation in a recycling program and leaves out any kind of performance standards. Simply, it requires a business to arrange fora "basic" level of recycling service, which is not defined, and would not punish a business if a recyclable item was found in the garbage. Staff believes that this is a good first step in the process of shifting behavior by mandating that a recycling option be available. Staff has received complaints in the past from commercial and multi-family tenants that want to recycle but unfortunately could not because their property owners had decided not to allow it. In essence, AB 341 creates a "right to recycle," without mandating the intensity of recycling effort. Staff is concerned that a performance mandate at this point in the process will create an immediate shift in behavior, which is of course the intent of the threshold, while having significant financial and contractual consequences. In addition, AB 341 establishes a Statewide diversionary goal of 75% by 2020, but specifically states that there is no punishment/penalty Page 2 of 5 established for any city that does not meet this threshold. Thus, the goal is aspirational, and not a performance mandate. The proposed StopWaste.org Mandatory Recycling Ordinance would require all Alameda County multi-family properties and businesses that generate four cubic yards or more of garbage per week to segregate recyclable materials by July 1, 2012 (Phase 1) and would require all Alameda County multi-family properties and businesses to segregate organic materials by July 1, 2014 (Phase 2) for recovery. Reporting and recovery requirements described in the Mandatory Recycling Ordinance also pertain to Alameda County facilities that accept garbage from those generators of waste that independently haul materials from covered jurisdictions to the landfill or transfer station. In general, Staff is supportive of a Mandatory Recycling Ordinance as it would help increase diversion, thereby, conserving resources and showing sound environmental stewardship. In fact, over the past few years, the City has worked diligently to achieve the City Council goal of 75% of waste diverted from landfill by 2010. In 2010, the City of Dublin had a State reported diversion rate of 75%, obtaining the significant goal. A Mandatory Recycling Ordinance would, of course, help the City continue to build on this great success. The Mandatory Recycling Ordinance would also aid Dublin in complying with the aforementioned State regulation. Although diverting recyclable and organic materials away from the landfill continues to be of long-term importance to the protection of resources and the environment, a Mandatory Recycling Ordinance may also have a number of negative impacts, particularly with regard to rate increases. Staff has preliminarily estimated that a Mandatory Recycling Ordinance could raise commercial rates by as much as 50%, if Dublin's rate structure were to remain unchanged. Also, a change in law of this magnitude could trigger a franchise agreement provision requiring the City to renegotiate contractual provisions with the City's waste hauler, Amador Valley Industries ("AVI"), and the City's landfill disposal contractor, Waste Management, to restructure the rates and/or modify other provisions within these agreements. Currently, recycling and organics collection costs are heavily subsidized by garbage rates. A Mandatory Recycling Ordinance will shift materials and revenue away from garbage collection and result in revenue shortfalls for the City's franchise hauler AVI, necessitating steep rate increases to cover the cost of collection services. This is due to the fact that the City has a bundled rate for garbage service, where residents and businesses pay for the cost of garbage with recycling being provided at no additional cost. As a result, the individual resident has an incentive to reduce his or her garbage can size by adding recycling, saving money, with the collective group picking up the lost revenue from the garbage service reduction during the next annual rate increase. Alternatively, rates could be restructured to increase revenue by establishing a charge for recyclables and charging more for organics collection to recoup the costs from the increased diversion. Therefore, the Mandatory Recycling Ordinance, as proposed by StopWaste.org, will inevitably raise rates for all customers just to cover the cost of the current collection services To illustrate mitigation concerns, let suppose that AVI's annual revenue is $120 from 10 accounts that pay $1 per month. Further, Resident A is able to reduce his garbage can size by adding more recycling and will now pay only $0.50 per month. This is a loss to the system of $6.00 annually, which will have to be made up by the group. The $6 is then divided up across the 10 accounts at the next rate increase, with the new monthly rate for the 9 accounts at $1.05, and a reduced rate of $0.55 for the one customer with a smaller can. The annual revenue is still $120, but the migration of the one customer to a smaller can, has been redistributed across the Page 3 of 5 whole. This type of system works well for small incremental changes, but for large scale shifts in behavior it starts to fall apart, especially for those that are already at a point that they can't reduce garbage any further. For example, if everyone shifts equally, then everyone could perhaps end up paying close to the same amount, but be receiving less service. Those residents and businesses that were not able to shift services would end up paying more in garbage fees to compensate for their neighbors. Thus, residents and businesses that have tried to be good recyclers from the beginning would be penalized and pay for their neighbors lack of effort. Staff can try to segregate out the revenue shortfalls from increased commercial recycling to ensure that the costs are borne solely by the commercial sector alone, but it will be difficult if not impossible to separate the costs out completely, thereby, ensuring that the residential sector does not bear any of the rate burden associated with the proposed ordinance. According to a preliminary draft of the Mandatory Recycling Ordinance, StopWaste.org staff will be responsible for enforcement and action will be taken only if approved by the City Manager of the affected jurisdiction. However, the Ordinance language is sufficiently vague on this point and could result in a loss of local control on solid waste and recycling issues. Exceptions to the Ordinance are at the sole discretion of StopWaste.org staff and are only allowed if amulti-family property or business owner can demonstrate that financial hardship or space constraints prohibit recycling and organics recovery. The Mandatory Recycling Ordinance draft language contains an "opt-out" provision enabling a jurisdiction to exclude its service area from Phase 1, Phase 2, or all of the requirements of the Mandatory Recycling Ordinance. However, opting-out of the Mandatory Recycling Ordinance could further reduce grant funding for recycling programs in Dublin. Declining consumption and waste disposal due to the recession has already reduced grant funds generated from fees on garbage disposed in the landfill. Dublin's grant monies have declined from a high of approximately $220,000 annually to approximately $140,000 in FY 2011-2012. Funds could deteriorate further or may be eliminated altogether if Dublin were to opt-out of the Countywide Mandatory Recycling Ordinance, because the Ordinance requirements may be tied to grant funding via a proposed definition of adequate commercial recycling scheduled for consideration by the Alameda County Source Reduction and Recycling Board in early 2012. If adequate commercial recycling were to be defined by the adoption of a Mandatory Recycling Ordinance, this would require Dublin to approve the Mandatory Recycling Ordinance or face losing most or even all of its recycling program grant funding. Although staff has reviewed a first draft of the Mandatory Ordinance language, a final draft of the Ordinance is not expected to be circulated until November 2nd. Therefore, given the considerable rate impacts of a Mandatory Recycling Ordinance, more time is necessary for a thorough evaluation prior to an ACWMA Board vote in order to fully assess the potential impacts on the City's current franchise contract and rates as well as the economic impact on businesses and residents. Single-use Bag Ban In addition to the above, StopWaste.org staff is proposing aSingle-use Bag Ban Ordinance, which is intended to reduce the volume of single-use bags distributed in Alameda County and reduce negative impacts to the environment caused by bag litter and bag landfill disposal. Studies estimate that two million single-use bags are given away daily in Alameda County. Single-use carryout bags, especially plastic bags, have been identified as a large component of litter in the marine environment damaging wildlife and impacting sensitive habitat. Single-use Page 4 of 5 bags are also a large component of the waste stream occupying valuable landfill space. According to the California Department of Resources Recycling and Recovery ("CalRecycle"), over 150,000 tons of paper bags and more than 120,000 tons of plastic bags were disposed of in 2008. It is important to note that, because of the lighter weight of plastic bags, these numbers represent a considerably greater volume of plastic bags compared to paper bags. To address litter impacts and disposal issues, on November 16, 2011, the ACWMA Board will consider aSingle-use Bag Reduction Ordinance, banning any single-use carryout bag and imposing a minimum 10-cent-per-bag fee for recycled-content paper bags and for reusable bags. Retailers would be entitled to keep the per-bag fee, and they would be required to note any charges for bags on their customers' receipts. The proposed Single-use Bag Reduction Ordinance would take effect on January 1, 2013 and apply to retail establishments that either sell food products or have a pharmacy. Restaurants and nonprofit charitable reuse organizations would be exempt. StopWaste.org staff would oversee enforcement of the Single-use Bag Reduction Ordinance. Transactions involving assistance programs, specifically the Women, Infants, and Children ("WIC") program, would not be subject to the 10-cent-per-bag fee, and plastic bags used to contain raw meat or produce would be exempted. The proposed Single-use Bag Reduction Ordinance could reduce litter and have other benefits for the City of Dublin. Supporting aSingle-use Bag Reduction Ordinance would help meet the requirements of the Municipal Regional Stormwater Permit since plastic and paper bags can be found in storm sewers and catch basins which drain into waterways and ultimately the Bay. The exact financial impacts of a Mandatory Recycling Ordinance and a Single-use Bag Reduction Ordinance are unknown at this time since final language has not yet been circulated by StopWaste.org staff. Opting-out of the Mandatory Recycling Ordinance may reduce or eliminate grant funds used to support the City's recycling programs. Approximately $140,000 of grant funds may be at risk if the City were to opt-out of an adopted Countywide Mandatory Recycling Ordinance. Staff has less concern with the Single-use Bag Reduction Ordinance, depending on the final ordinance language, and will keep the City Council informed of any significant deviations from the summary provided herein. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: None. Page 5 of 5 RESOLUTION NO. XX - 12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *********** OPTING OUT OF PHASE I OF THE ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY (ACWMA) MANDATORY COMMERCIAL RECYCLING ORDINANCE #2012-1 WHEREAS, Ordinance #2012-1 is an Ordinance requiring actions to reduce landfilling of recyclable and organics solid waste from businesses, multi-family residences, and self-haulers; and WHEREAS, the City of Dublin is one of seventeen (17) member agencies composing the ACWMA; and WHEREAS, pursuant to the terms of Ordinance #2012-1 by the ACWMA, "Any Member Agency by a resolution of its governing body may, prior to March 2, 2012, choose to exclude its service area from Phase I of this Ordinance"; and WHEREAS, the City of Dublin has reviewed Ordinance #2012-1 and determined that at this time, it would like to be excluded from the agencies and service areas named in Ordinance #2012-1. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin is opting-out of Phase I of Ordinance #2012-1 by the ACWMA, and, therefore, the City of Dublin's service area will be excluded from the service areas described by the Ordinance. PASSED, APPROVED AND ADOPTED this 21st day of February, 2012, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor ATTACHMENT 2 RESOLUTION NO. XX - 12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *********** OPTING OUT OF THE ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY (ACWMA) SINGLE-USE BAG REDUCTION ORDINANCE #2012-2 WHEREAS, Ordinance #2012-2 is an Ordinance regulating the use of carryout bags and promoting the use of reusable bags; and WHEREAS, the City of Dublin is one of seventeen (17) member agencies composing the ACWMA; and WHEREAS, pursuant to the terms of Ordinance #2012-2 by the ACWMA, "Any Member Agency by a resolution of its governing body prior to March 2, 2012 may choose to exclude its service area from the Ordinance"; and WHEREAS, the City of Dublin has reviewed Ordinance #2012-2 and determined that at this time, it would like to be excluded from the agencies and service areas named in Ordinance #2012-2. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin is opting-out of Ordinance #2012-2 by the ACWMA, and, therefore, the City of Dublin's service area will be excluded from the service areas described by the Ordinance. PASSED, APPROVED AND ADOPTED this 21st day of February, 2012, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor ATTACHMENT 3