Waive the Second Reading and Adopt Ordinance No. 603, an Ordinance of the City Council of the City of Livingston Establishing Rates for Solid Waste Service Fees

Meeting Date APRIL 02, 2013

Agenda Item #8. Waive the Second Reading and Adopt Ordinance No. 603, an Ordinance of the City Council of the City of Livingston Establishing Rates for Solid Waste Service Fees

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Note from TheGardeningSnail. There may be a few textual goofs, gaffs, and gremlins in the text below. If in doubt, check the pages above.

STAFF REPORT

AGENDA ITEM: Waive the Second Reading and Adopt Ordinance No. 603, an Ordinance of the City Council of the City of Livingston Establishing Rates for Solid Waste Service Fees.

MEETING DATE: April 2, 2013

PREPARED BY: Jose Antonio Ramirez, City Manager

REVIEWED BY: Jose Antonio Ramirez, City Manager

RECOMMENDATION:

Staff recommends that the City Council waive the second reading and adopt Ordinance No. 603, an Ordinance of the City Council of the City of Livingston establishing rates for solid waste service fees.

BACKGROUND:

City of Livingston determined to undertake a rate study to analyze the revenue requirements and the rate structure that should be adopted to proportionately allocate the costs of providing solid waste service to its solid waste customers. The rate study was prepared by Hansford Economic Consulting Inc., and has been on file at Livingston City Hall since February 1, 2013. The rate study determined that a rate increase is warranted because the existing solid waste system revenues are, and will be, insufficient to cover current and projected operations and maintenance costs of the City’s solid waste program.

In order to determine the appropriate rates that City customers would pay, the City Council also decided to competitively bid the residential and commercial solid waste and auxiliary services. The City issued a request for proposals on July 2, 2012. The City of Livingston held a mandatory pre-bidders conference on August 6, 2012 and had seven interested parties in attendance. By the August 15, 2012 deadline, the City of Livingston received written proposals from four waste haulers (Turlock Scavengers, Gilton Solid Waste Management Inc., Mid Valley Disposal and Sunset Waste Systems). The proposals were taken into consideration by Hansford Economic Consulting Inc.

Staff developed a matrix incorporating all pertinent information from all the haulers and provided it to City Council, the Stakeholders Committee and the rate consultant. The Stakeholders Committee and a couple of Council Members took the time to tour the above-mentioned waste haulers and hear presentations.

On November 6, 2012, after hearing presentations from the interested waste haulers, the City Council selected Gilton Solid Waste Management Inc. to administer all aspects of solid waste services in the City. Gilton Solid Waste Management will assist the City in monitoring the City’s waste to ensure compliance with goals set by the State of California Department of Resources Recycling and Recovery (CalRecycle) and AB 939, SB 1016 legislative mandates.

With the rate analysis done and the solid waste hauler selected, the City had all the information needed to set the rates that would cover the cost of providing solid waste collection services.

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ANALYSIS

In 1996, California voters approved Proposition 218, the "Right to Vote on Taxes Act," which added Articles X111C and XIIID to the California Constitution. Since its adoption, various court cases in 2005 and 2006, most notably Bighorn-Desert View Water Agency v. Verjil; Richmond v. Shasta Community Services District, and the Howard Jarvis Taxpayers Association v. City of Fresno, extended the application of Proposition 218 from general taxes and assessments to utility user fees provided by public agencies (i.e., sewer, water and waste collection, etc.).

Although there is an argument that solid waste collection service fees ("Solid Waste Service Fees" or

"Service Fees") within the City of Livingston are not subject to Proposition 218 because the services are

provided by a private solid waste hauler and not the City, the City Council and the City Manager have

decided to follow the process detailed by Proposition 218 in order to promote transparency and

involvement by City property owners and customers.

The rate study, which was done to study appropriate rates and to satisfy Proposition 218, determined that

existing solid waste system revenues are, and will be, insufficient to cover current and projected

operations and maintenance costs of the City’s solid waste system (the "System"). The study determined

that increases to the schedule of rates for the City’s Service Fees are necessary for a five-year period to

generate revenues sufficient to cover the City’s ongoing costs of the System’s operations, maintenance,

and capital facilities.

Since the City must generate revenues in an amount sufficient to cover the City’s ongoing costs of the System’s operations, maintenance, and capital facilities, the City Council determined to initiate the Proposition 218 process.

California Constitution article XIII D, section 6 ("Article XIII D") requires that prior to imposing any

increase to the Service Fees, the City shall provide written notice (the "Notice") by mail of the proposed

increases to the Service Fees. Notices are to be sent to the record owner of each parcel upon which the

increases to the Service Fees are proposed for imposition, and any tenant directly liable for payment of such Service Fees, the amount of the rates for the Service Fees proposed to be imposed on each parcel,

the basis upon which the rates for the Service Fees were calculated, and the reason for the rate increases

to the Service Fees. The Notice must also indicate the date, time and location of a public hearing (the

"Hearing") on the proposed rate increases to the Service Fees. Pursuant to Article XIII D, such Notice is

required to be provided to the affected property owners and any tenant directly liable for the payment of

the Service Fees not less than forty-five days prior to the Hearing on the proposed rates.

On February 1, 2013, the City provided the Notice to the affected property owners and tenants of the

proposed rate increases to the Service Fees in compliance with Article XIII D, which indicated that the

Hearing was to be held on March 19, 2013. At this hearing, the Council listened to staff’s analysis

regarding the rates being proposed, listened to testimony and took other written protests prior to the close

of the public hearing. The Council received eight written protests and at the end of the public hearing, the

Council determined that a majority protest did not exist; therefore, the Council was free to adopt the new

rates.

The City Council is presented with an Ordinance establishing the new rates. The City Council decided to do all rate increases by ordinance; however, since Livingston Municipal Code section 8-2-43 requires that solid waste collection rates be set by resolution, the Council adopted Resolution No. 2013-7 at the March 19, 2013, regular meeting.

Further, since a previous Merced Superior Court case involving the increase of water rates required that

the Ordinance be adopted by two-thirds of the City Council, the Council has agreed that all increases

should receive the two-thirds vote. There is an argument regarding this vote requirement and the

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adoption process that the Court required, however, the Council has expressed its wishes to hold itself to a high standard and only impose higher rates that are adequate and that most of the City Council agrees on. Both the attached Ordinance and adopted Resolution require a two-thirds vote.

Although the rates are being established by both a Resolution and an Ordinance, the intent is to have both establish rates at the same time. Since ordinances require two readings and a 30-day wait period after adoption for the rates to be effective, the previously adopted Resolution indicates that the approval of the Solid Waste Service Fees under the Resolution are contingent on the adoption of Ordinance No. 603, and shall be in effect on May 3, 2013.

ATTACHMENTS:

I . Ordinance No. 603, establishing rates for solid waste service fees

2. Proposition 218 Notification Letters

3

ORDINANCE NO. 603

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LIVINGSTON ESTABLISHING RATES FOR SOLID WASTE SERVICE FEES

WHEREAS, in 1996, California voters approved Proposition 218, the "Right to Vote on Taxes Act," which added Articles X111 C and XIIID to the California Constitution; and

WHEREAS, various court cases in 2005 and 2006, most notably Bighorn-Desert View Water

Agency v. Verjil; Richmond v. Shasta Community Services District; and the Howard Jarvis Taxpayers Association v. City of Fresno, extended the application of Proposition 218 from general taxes and assessments to utility user fees (i.e. sewer, water and waste collection, etc.); and

WHEREAS, although there is an argument that solid waste collection service fees ("Solid Waste Service Fees" or "Service Fees") within the City of Livingston are not subject to Proposition 218 because the services are provided by a private solid waste hauler and not the City, the City Council and the City Manager have decided to follow the process detailed by Proposition 218 in order to promote transparency and involvement by City property owners and customers. Accordingly, the City does not waive its right to conduct Solid Waste Service Fee increases without following the Proposition 218 procedures; and

WHEREAS, the City of Livingston determined to undertake a rate study to analyze the revenue requirements, and the rate structure that should be adopted to proportionately allocate the costs of providing solid waste service to its solid waste customers. The rate study was prepared by Hansford Economic Consulting Inc., and has been on file at Livingston City Hall since the notices to property owners and customers were sent out on February 1, 2013; and

WHEREAS, the City of Livingston determined it was also necessary to issue a request for proposals ("RFP") for solid waste collection services in order to pass on the lowest rates possible. The City issued an RFP on July 2, 2012. The City received four proposals to the RFP which provided information useful in the rate study; and

WHEREAS, the City of Livingston intends to contract with Gilton Solid Waste Management Inc., ("Gilton") for solid waste collection services. Gilton offered the lowest rates for solid waste collection services; and

WHEREAS, the rate study determined that existing solid waste system revenues are, and will be, insufficient to cover current and projected operations and maintenance costs of the City’s solid waste system (the "System"); and

WHEREAS, the City must generate revenues in an amount sufficient to cover the City’s ongoing costs of the System’s operations, maintenance, and capital facilities; and

WHEREAS, the rate study determined that increases to the schedule of rates for the City’s solid waste service fees, ("Service Fees") are necessary for a five-year period to generate revenues sufficient to cover the City’s ongoing costs of the System’s operations, maintenance, and capital facilities; and

WHEREAS, the revenues derived from the proposed Service Fees will not exceed the fundsrequired to provide the solid waste services and shall be used exclusively for the System; and

Ordinance No. 603 Page 1 of 4

WHEREAS, the amount of the proposed Service Fees will not exceed the proportional cost of the service attributable to each parcel upon which they are proposed for imposition; and

WHEREAS, the proposed Service Fees will not be imposed on a parcel unless the solid waste services are actually used by, or immediately available to, the owner of the parcel; and

WHEREAS, California Constitution article XIII D, section 6 ("Article XIII D") requires that prior to imposing any increase to the Service Fees, the City shall provide written notice (the "Notice") by mail of the proposed increases to the Service Fees to the record owner of each parcel upon which the rate increases to the Service Fees are proposed for imposition, and any tenant directly liable for payment of such Service Fees, the amount of the rates for the Service Fees proposed to be imposed on each parcel, the basis upon which the rates for the Service Fees were calculated, the reason for the rate increases to the Service Fees, and the date time and location of a public hearing (the "Hearing") on the proposed rate increases to the Service Fees; and

WHEREAS, pursuant to Article Xl II D such Notice is required to be provided to the affected property owners and any tenant directly liable for the payment of the Service Fees not less than forty-five days prior to the Hearing on the proposed rates; and

WHEREAS, on February 1, 2013, the City provided the Notice to the affected property owners and tenants of the proposed rate increases to the Service Fees in compliance with Article

XIII D; and

WHEREAS, the Hearing was held March 19, 2013; and

WHEREAS, at the Hearing, the City Council heard and considered all oral testimony, written materials, and written protests concerning the establishment and imposition of the proposed rate increases to the Service Fees; and

WHEREAS, upon close of the Hearing, the City did not receive written protests against the establishment and imposition of the proposed rate increases to the Service Fees from a majority of the affected property owners and tenants directly liable for the payment of the Service Fees; and

WHEREAS, Livingston Municipal Code section 8-2-43 requires that "monthly customer collection charges for single-family units, multi-family units, commercial units, industrial units, institutional units and Government units shall be set by Resolution of the City Council"; and

WHEREAS, this Ordinance and Resolution No. 2013-7 shall supersede all other previous resolutions and ordinances that may conflict with, or be contrary to, this Ordinance and

Resolution No. 2013-7 respecting the rates for Service Fees described more particularly herein.

THE CITY COUNCIL OF THE CITY OF LIVINGSTON DOES ORDAIN AS FOLLOWS: SECTION

1. RECITALS

The foregoing recitals are true and correct and made a part of this Ordinance. SECTION 2. SOLID WASTE SERVICE FEE ADJUSTMENT

The City Council of the City of Livingston does hereby approve the Solid Waste Service Fees set forth in the attached Exhibit A. The City Council hereby authorizes and directs the City Manager to implement and take all actions necessary to effectuate the rates for the Service Fees set forth herein.

Ordinance No. 603 Page 2 of 4

SECTION 3. CEQA

The approval of this Ordinance is not a project within the meaning of the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., "CEQA," and 14 Cal. Code Reg. §§ 15000 et seq., "CEQA Guidelines"). Further, pursuant to CEQA Guidelines section 15273 and Public Resources Code § 21080(b)(8), this Ordinance is not subject to CEQA because CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies for certain purposes, including for the purpose of meeting operating expenses. This Ordinance does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If the Solid Waste Service Fees are used for any project that would have such effect, the City will undertake the required CEQA review for that particular project.

SECTION 4. SEVERABILITY

If any provision of this Ordinance, or the application thereof to any person or circumstance, is held invalid, the remainder of the Ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.

To this end, provisions of this Ordinance are severable. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid or unenforceable.

SECTION 5. EFFECTIVE DATE

This Ordinance shall become effective thirty (30) days after its final passage and adoption.

Introduced: March 19, 2013

Passed and Adopted: April 2, 2013

RODRIGO ESPINOZA, Mayor of the City of Livingston

ATTEST:

State of California )

County of Merced )

City of Livingston )

I, hereby certify that the foregoing Ordinance was duly introduced at a Regular Meeting of the City Council of the City of Livingston on March 19, 2013, and was regularly passed and adopted by the City Council of the City of Livingston this 2nd day of April, 2013.

AYES:

NOES:

ABSENT:

ABSTAIN:

Ordinance No. 603 Page 3 of 4

ANTONIO SILVA, City Clerk

of the City of Livingston

2055488.2

Ordinance No. 603 Page 4 of 4

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