Due to changes in state recycling regulations, monthly trash rates will be increasing by $2.83 per resident or more depending on negotiations between the city of Fullerton and Republic Waste Services. Laith Ezzet with HF&H consultants gave a short presentation on SB 1383 and the preliminary negotiated rates that have been developed with Republic at the November 15, 2022 City Council meeting.
“By way of background, SB 1383 was California’s short-lived climate pollutant reduction law. Its purpose is to get methane out of the atmosphere, and it established targets to reduce organic waste by 75% by 2025. The law itself was adopted in 2016, and then it took a few years to develop the rules and the services as the requirements were phased in starting January 1, 2022,” said Ezzet.
The city of Fullerton applied for a notice of intent to comply, giving Fullerton a grace period of January 1 of 2024 for compliance.
“We started by looking at what we call a gap analysis,” said Ezzet, “looking at all the elements, to determine whether it’s in the city code or programs that would need to be implemented to comply with SB 1383. We finished that in December of 2020. Then we began negotiations in the spring of 2021 with Republic Waste Services, and those took nearly a year. We completed the rate negotiations in March of 2022, and the city attorneys are developing an amendment to implement those, and that is in process.”
“Some of the key changes that customers will see when the programs are finally implemented is a Residential Food Waste Program,” said Ezzet. “Everybody in the state has to have a residential food waste program. The way they’ll do it is you’ll mix your green waste and your food waste together in the same container. Republic will process it at special composting facility. Commercial food waste has already been contracted for, though not every customer has subscribed to it yet. You do have the program in your franchise agreement.”
“There’s also edible food recovery elements that are part of it the recycling outreach and contamination monitoring. There were some other programs that we were asked to look at. These are not required by SB 1383, but are things that the staff thought the Council might be interested for expanding or enhancing services in the city,” Ezzet said, “One was to add an additional week to the holiday tree program. Currently people have two weeks to dispose of trees. This would add a third week to be able to collect the trees. The second was to have a shred event, twice a year, where you can bring in your tax papers or other documents and bankers boxes and they would be shredded on site. Those are usually very popular programs. They don’t cost a lot of money. There would be a provision for every two years to do an audit of the contractor to ensure they’re doing the things they are supposed to be doing.”
“There’s a proposal for Republic Services to take over the billing on the residential side which is currently done by the city. Lastly. after the initial negotiations were done, the city added another request to try to get downtown areas cleaned up. That request for proposal was submitted to Republic on July 20, and we’ve not received a proposal from them at this time,” Ezzet continued.
“Before I go over the rate impacts, I want to share with you an e-mail the city got last night from Republic Services. It said, “I [representative for Republic Services] wanted to write regarding the proposed rates from March related to SB 1383 after discussing with our finance team. Those March rates are unapproved at this time and will need to be revisited with additional negotiation if necessary given the time that has passed.”
“I don’t have more information from them other than what they sent, so there may be some further negotiations,” Ezzet said.
“The city’s current base rate is $24.74 [including residential billing fees of $0.74]. Green waste disposal will add an additional increase of $2.83, bringing the total to $27.57. This is for the mandatory programs. The SB 1383 programs add another $0.81 for the optional services. If Republic takes over the billing, the estimate is $0.76 per home per month. There may be some savings for the City. Staff will be looking at that,” said Ezzet, “Terms of the scheduled city’s goal is to provide the draft amendment being prepared by Rutan and Tucker next month to finish those negotiations after the start of the year and bring back to council for your consideration in the spring. Starting the new services in July, so that they can be fully rolled out in full compliance by January 1 of 2024.”
Mayor Fred Jung asked, “This is a pretty aggressive timeline are we that far along in the negotiations where you can see this happening in a meaningful way?”
“The rates were done last March, so short of any surprises from Republic, it could absolutely be done,” said Ezzet.
Mayor Protem Bruce Whitaker asked, “Part of having Republic do the billing directly to customers would allow for more customization. I mean, once Republic’s doing the billing, they have the option to offer different size containers. Otherwise, all customers pay the same whether they use services by volume or anything, right?”
“We’re really talking about rate structures, and the city can set those up the way they would like to. You have to negotiate them, obviously, regardless of whether you do the billing or Republic does one rate structure.”
Councilmember Ahmad Zahra asked, “How will this be implemented for apartment buildings?”
“If it’s an apartment building that has individual cart service, which some do, that would be treated like a single-family customer, but if they have bin service, they’ll be treated like a commercial customer, so they would have a shared container for their organics,” said Ezzet.
Ezzet asked, “Do you want us to continue on the billing as far as looking at moving that to Republic?”
Jung said, “Let’s do a minor dive into that. How does that benefit the city and the residents and the ratepayers when we don’t do the billing and Republic does it?”
Councilmember Jesus Silva asked, “Given that e-mail from Republic, are we going to have to now go back and renegotiate or restart the conversations?”
Ezzet said, “We had negotiated a deal with the local division, and corporate approved it. That was a number of months ago. Now it may need to be resubmitted to corporate for their approval again and perhaps that’s the issue. It may come back fine, but it may not, and I know the e-mail that the city got wasn’t from a financial person or from a controller. It was from the municipal liaison, so we’ll just have to see. City of Brea got the same e-mail. They were also going to the City Council tonight just as Fullerton is, so Republic wanted to put that on the record a few hours before the City Council meetings were held. Some of the cities are already done, City of Yorba Linda went to Council and approved. Their program was in place by July. City of Garden Grove completed their program, and it started July.”
Silva asked, “And then just one last thing. Your slides indicated that if Republic takes over billing, it’s going to cost the residents an additional $0.76. Is that correct?”
Ezzet said, “That is what Republic would be compensated for doing it. We’ll need to see if there are savings for the city not having to do it.”
Silva asked, “But I mean that $0.76 would come from each individual resident right?”
Ezzet said, “That’s correct.” The study session was adjourned.
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