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Home My WebLink AboutD-4 Staff Report - AB 1826 Mandatory Commercial Organics RecyclingSCHEDULED ITEM D-4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: DON PENMAN, INTERIM CITY MANAGER FROM: LOUIE F. LACASELLA, SENIOR MANAGEMENT ANALYST DATE: JANUARY 16, 2018 SUBJECT: CONSIDERATION OF COMPLIANCE ACTION PLAN OUTLINING THE CITY’S INTENT TO COMPLY WITH AB 1826 MANDATORY COMMERCIAL ORGANICS RECYCLING SUMMARY: In October 2014, Governor Brown signed Assembly Bill (AB) 1826, which required that on and after January 1, 2016, local jurisdictions across the state implement an organic waste recycling program to divert organic waste generated by businesses, including multifamily residential dwelling that consist of five or more units. This law also required businesses to start recycling organic waste on and after April 1, 2016. While AB 1826 requires jurisdictions to include multifamily residences in their implementation plan, multifamily dwellings are not required to have a food waste diversion program. CalRecycle has requested that the City provide by January 31, 2018, an organics program compliance plan which includes a definite time line for implementation of the new law. Athens Services, the City’s franchise waste hauler, is proposing an AB 1826 program for the City that will divert organic materials from landfills to reduce greenhouse gas emissions. The proposed action approves a compliance action plan outlining the City’s intent to comply with AB 1826, through the implementation of an organics waste recycling program, which includes authorizing organics rates at the annual refuse rate adjustment set for June to become effective July 1, 2018. RECOMMENDATION: Staff recommends the City Council take the following actions: 1) Approve a compliance action plan outlining the City’s intent to comply with AB 1826, through the implementation of an organics waste recycling program, which includes authorizing organics rates at the annual refuse rate adjustment set for June to become effective July 1, 2018. DISCUSSION: Building upon the requirements of Assembly Bill (AB) 341 (Mandatory Commercial Recycling), which mandated commercial waste recycling, the State of California is now mandating organic recycling under Approved Council Meeting 1/16/2018 Compliance with AB 1826 (Mandatory Commercial Organics Recycling) January 16, 2017 Page 2 AB 1826. As a result of the signing of AB 1826 into law, the new mandatory organic recycling requirements will be phased in over several years and will assist the State in meeting its recycling goal of 75% by 2020. Requirements for organic recycling depend on the amount of organic waste generated weekly by the business. Over time, more businesses will be required to comply because the organic waste threshold that triggers additional compliance will be lowered. Below, please find the implementation schedule as mandated by law and the current number of Azusa businesses affected by each period: Why Require Organics Recycling The goal of AB 1826 is to help California achieve aggressive recycling and greenhouse gas emission goals. California landfills take in about 30 million tons of waste each year, of which more than 30% is organic. The State has determined that these organics should be composted or used to produce renewable energy rather than going into landfills. Greenhouse gas emissions resulting from the decomposition of organic waste in landfills have been identified as a significant source of emissions contributing to global climate change. City Responsibility In addition to impacting businesses and large multi-family complexes, the City is required by state law to implement an organic waste recycling program “that is appropriate for that jurisdiction and designed specifically to divert organic waste generated by businesses” that are required by AB 1826 to implement organic waste recycling. The City is now responsible for reporting on the progress of implementing the program as part of its annual report due to CalRecycle. The program required to be implemented by cities targeted to commercial organic waste generators may include, but is not limited to, implementing a mandatory commercial organic waste recycling ordinance, enforcement provisions, or requiring a program through a franchise agreement. CalRecycle has requested that the City provide by January 31, 2018, an organics program compliance plan which includes a definite time line for implementation. If the City fails to provide CalRecycle with a plan, the City may be perceived as not making a “good faith effort” to comply with the law, potentially exposing the City to fines of up to $10,000 per day for non- compliance. City’s Organic Waste Recycling Program To meet the State mandates described above, Staff recommends approving a compliance action plan which outlines the City’s intent to adopt an organic waste recycling program through the City’s franchise agreement with Athens. The City operates under an exclusive waste hauling franchise agreement that authorizes Athens to provide solid waste collection and disposal services in the City. The franchise agreement grants Athens the exclusive right to collect solid waste from residential and non- Date Threshold to Arrange for Organic Waste Recycling Services Current Businesses Affected in Azusa April 1, 2016 Businesses that generate 8 cubic yards of organic waste per week 3 January 1, 2017 Businesses that generate 4 cubic yards of organic waste per week 4 January 1, 2019 Businesses that generate 4 cubic yards of commercial solid waste per week 311 January 1, 2020 Businesses that generate 2 cubic yards of commercial solid waste per week (the 2 cubic yard requirement only takes effect if CalRecycle determines that statewide disposal of organic waste in 2020 has not been reduced by 50% of 2014 levels). 606 Compliance with AB 1826 (Mandatory Commercial Organics Recycling) January 16, 2017 Page 3 residential customers in the City. Solid waste is defined in the franchise agreement to include food waste and paper waste, both of which are now considered to be organic waste under AB 1826. The franchise agreement also grants Athens the exclusive rights to collect recyclable materials from commercial and industrial customers to the extent materials are added by the State. Recyclable materials are defined to include green waste, which is also organic waste under AB 1826. In addition, the franchise agreement requires Athens to comply with the requirements of the Integrated Waste Management Act, including diversion requirements. The program will consist of Athens offering organic waste recycling services to businesses that are required to implement an organic waste recycle program under AB 1826, and may charge businesses that utilize such services rates approved by the City Council. Additionally, the program will consist of Athens reporting of organic waste generators, compiling information regarding organic waste recycling facilities, conducting public education and outreach. The program does not require or authorize Athens to provide organic waste recycling services to single family residential customers or other customers that are not required by AB 1826 to recycle organic waste. The expansion of organic waste recycling services within the City may be considered and authorized by future action by the City Council. Organic Waste Recycling Service Rates In order to implement an organic waste recycling program to meet the state mandate, the City Council would need to authorize the collection of additional fees related to commercial organic waste recycling services. Authorizing the collection of additional fees would provide the funding mechanism for a business to comply with AB 1826 by obtaining organic waste recycling service through Athens. Without the adoption of rates, Athens is unable to charge for and provide this service as it’s not currently included in the Franchise Agreement between Athens and the City. For businesses required to obtain organic waste recycling service, they will utilize a 64 gallon barrel through Athens. Athens has already assisted a number of their client cities (Irwindale, Monterey Park, Sierra Madre, South Pasadena and West Covina) in adopting this same program over the last year as well as currently working with a number of their other client cities (Glendora, Hermosa Beach, Montebello, San Marino and Temple City) to implement this year. Below please find Athens’ proposed monthly organic waste recycling program rates: *Per AB 1826, effective January 1, 2019, all commercial customers that generate 4 or more cubic yards of solid waste per week will be required to arrange for organic waste recycling services. With this change in potential qualifying commercial customers, the total cost of providing organics services, will be reexamined by Athens. The proposed monthly organic rates by Athens, does not assume full participation by the required businesses. As a result, Athens will meet and confer with City Staff to determine if rates need to be adjusted effective January 1, 2019. If an adjustment is necessary and justified, proposed Athens Organics Rates, will be presented to City Council for approval in compliance with Proposition 218. Athens’ Proposed Monthly Organic Rates* Pick-Up/Week 64 Gallon Barrel Franchise Fee AB 939 Fee Total Rate 1 $104.54 $11.64 $0.75 $116.91 2 $182.51 $20.28 $0.75 $203.54 3 $260.49 $28.94 $0.75 $290.18 4 $338.47 $37.61 $0.75 $376.83 5 $416.45 $46.27 $0.75 $463.47 6 $494.43 $54.94 $0.75 $550.12 Compliance with AB 1826 (Mandatory Commercial Organics Recycling) January 16, 2017 Page 4 Athens charges the same base rate for a 64 gallon barrel of organics to all its client cities. The only exception is for those cities that included an organic program in a newly negotiated franchise agreement or past agreements, which have since had rate adjustments. The total rate for service is different at each City as its dependent on the City’s franchise agreement. Businesses would be paying the organic rate in addition to their monthly trash bill. Current trash rates in Azusa range from $131.65 to $415.80 a month depending on the number of days of service and cubic yards (Attachment 3). The City's franchise agreement with Athens Services permits rate adjustments due to changes in the law after providing detailed information supporting the proposed rate adjustment at a public meeting. Staff is recommending that the City Council consider the organic rates at its annual refuse rate adjustment scheduled for June of 2018, so Staff can work with Athens, possibly utilizing a consultant if needed, to ensure the proposed pricing and program is a good fit for the community and to provide time to comply with Proposition 218 and continue to educate businesses on the new law. Proposition 218 requires the City to provide certain notification of new or increased assessments, charges and user fees, and in certain cases, requires a balloting and election of property owners prior to implementing any new or increased assessments, charges and user fees. The City Attorney has advised that based on the requirements of Proposition 218 all refuse rate adjustments must be approved at a public hearing with a notice to the public 45 days in advance of the hearing. Athens will present the proposed organic program in more detail to the City Council at a future Study Session. The proposed compliance action plan also includes outreach efforts by Athens as well as the City to educate the business community on the new law. FISCAL IMPACT: There is no fiscal impact associated with the proposed actions. However, elements of the compliance action plan which include authorizing organic rates would result in additional revenue received by the City through Franchise Fees and AB 939 Fees. Prepared by: Reviewed and Approved: Louie F. Lacasella Don Penman Senior Management Analyst Interim City Manager Attachments: 1) AB 1826 Compliance Action Plan 2) Athens’ Proposed Rates 3) Current Rates for Residential, Multifamily and Commercial