HomeMy WebLinkAbout18 - Conduct a Proposition 218 Public Hearing and Consider a Residential Recycling Fee Rate IncreaseCITY OF
NEWPORT BEACH
City Council Staff Report
TO:
FROM:
PREPARED BY:
PHONE:
TITLE:
ABSTRACT:
March 23, 2021
Agenda Item No. 18
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
David A. Webb, Public Works Director - 949-644-3311,
dawebb@newportbeachca.gov
Micah Martin, Deputy Director,
mmartin@newportbeachca.gov
949-644-3059
Public Works Department,
Conduct a Proposition 218 Public Hearing and Consider a
Residential Recycling Fee Rate Increase
On January 26, 2021, the City Council approved the 2020 Recycling Service Fee Increase
Study, and then set the date of March 23, 2021 to conduct a public hearing on the
proposed Recycling Service Fee. The City of Newport Beach's (City's) current Schedule
of Rents, Fines, and Fees (SRFF) includes a Recycling Service Fee, which was last
updated on December 8, 2009 and has since remained at $3 per residential unit per
month. The study found the Recycling Service Fee needs to be adjusted to help recover
the cost associated with increased State -mandated residential recycling services. The
Recycling Service Fee is a cost -of -service fee based solely on recovery of the operational
costs associated with collection of recyclable materials in accordance with State
mandates. The City Council is asked to conduct a public hearing, tabulate the results of
protest received and if a majority protest is not received, approve a rate increase to the
City area of $6.28 per residential unit per month and for the Newport Coast area of $5.86
per residential unit per month. The new rate would be subject to an annual Consumer
Price Index (CPI) adjustment in accordance with Government Code Section 53756.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Conduct a public hearing to accept comments on the proposed residential recycling
fee rate and at the conclusion of the hearing close the 45 -day notice period;
c) Direct the City Clerk to tabulate the results of the protests received from property
owners and customers and announce the findings; and
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Conduct a Proposition 218 Public Hearing and Consider a
Residential Recycling Fee Rate Increase
March 23, 2021
Page 2
Then,
1) If a majority of protest votes are received against adoption of the new Recycle
Service Fee rates, close the public hearing and do not adopt the new rates. If
desired provide staff with any additional direction; or
2) If a majority of protest votes are not received against adoption of the new Recycle
Service Fee rates, close the public hearing and adopt Resolution No. 2021-25, A
Resolution of the City Council of the City of Newport Beach, California, Adopting
an Adjusted Recycling Service Fee.
DISCUSSION:
As a result of changes in State of California (State) law, in 1990, the City Council adopted
Ordinance No. 90-6 establishing a Recycling Service Fee to recover the costs incurred
by the City of Newport Beach (City) in satisfying State -mandated recycling requirements.
The City's current SRFF includes a Recycling Service Fee, which was last updated on
December 8, 2009 and has since remained at $3 per residential unit per month for the
City (excluding Newport Coast residential areas). Currently, there is no residential
Recycling Service Fee applied to residential units within the Newport Coast area. On
January 1, 2002, the City of Newport Beach officially annexed Newport Coast from the
County of Orange, and on February 12, 2002, the City continued providing the refuse
collection services as a separate contract. At the time, the recycling fee was not updated
to incorporate the Newport Coast refuse contract. Due to the mandated 50% diversion
rates and recycling requirements from the State, Council has assessed this fee and finds
it necessary for Newport Coast to be a part of citywide efforts to maintain State
compliance on recycling.
The Recycling Service Fee is a cost -of -service fee based solely on recovery of the
operational costs associated with collection of recyclable materials in accordance with
state mandates. Each fee rate is based on the annual contract costs, the diversion rate
for recyclable material vs. landfill, the number of households subject to the fee, and City
staff time related to contract management and program administration.
A combination of factors has necessitated a study of the Recycling Service Fee.
Operating costs associated with the collection and processing of recyclable materials
have increased since the last update to the Recycling Service Fee in 2009 and the current
fee does not accurately reflect those cost increases. Additionally, the current per month
fee is not uniformly applied to all single-family residential units within the City. To mitigate
this, the City Council working group on refuse -related issues was in support of staff's
recommendation to perform an updated fee study. A copy of the 2020 Residential
Recycling Fee study can be found here:
https://newportbeachca.gov/government/departments/2021-residential-recycling-fee-
study
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Conduct a Proposition 218 Public Hearing and Consider a
Residential Recycling Fee Rate Increase
March 23, 2021
Page 3
The Recycling Service Fee was recently studied by the City's fee consultant, MGT of
America (Attachment A). Because there are two separate residential refuse collection
contracts with CR&R Incorporated, one for Newport Coast and the other for the remaining
area of the city (excluding Newport Coast and some areas of Santa Ana Heights which
receive residential refuse service from the Costa Mesa Sanitary District) to provide
residential trash collection services, the study resulted in two different Residential
Recycling Fee calculations. The proposed Recycling Service Fee for Newport Coast
residential units per the fee study is $5.86 per residential unit per month. The proposed
fee for the City area (excluding Newport Coast, as well as some areas of Santa Ana
Heights) is $6.28 per residential unit per month. The fees are different due to the differing
cost of recycling service by contract and the amount of recycling materials being
processed. Newport Coast is a smaller area with less residential units being serviced,
resulting in lower operating costs. Both of these proposed new rates, if adopted, will be
subject to an annual CPI adjustment in accordance with Government Code Section
53756. Once the two separate residential refuse contracts are merged in the near future,
it is likely that the fee will be revisited (at a future date to be determined) and applied as
one consistent fee for all residents.
The demand for residential recycling services has increased per the initial implementation
of AB 939 (Integrated Waste Management Act of 1989) and the newly adopted State
mandate SB 1383 (Short-lived Climate Pollutants). Therefore, this fee may need to be
reviewed again in the near future as more State mandates are imposed on the City.
The City Council previously approved the 2020 Recycling Service Fee study, set a public
hearing for today, March 23, 2021, and authorized the mailing of notices to Newport
Beach property owners to inform them of the proposed Recycling Service Fee rate
increase in compliance with State law. A sample of the letter is included as Attachment
C. According to the proof of mailing on February 5, 2021, the City mailed out 42,751
notices to Newport Beach property owners. In addition to the mailing of notices to
Newport Beach property owners, City personnel accomplished the following outreach:
• The City website, under the Public Works page, was updated to include a special
section providing information on the proposed Residential Recycling Service Fee
increase. Information provided was the Recycling Service Fee Study, presentation
to Council and staff report from the January 26, 2021 City Council meeting and a
list of frequently asked questions.
• A Notice of Public Hearing (Attachment B) was published in the Daily Pilot
newspaper on February 25, 2021 and March 13, 2021.
• A Stu News article was written on the proposed Residential Recycling Service fee
increase with a description of additional recycling initiatives.
• The Newport Navigator, Spring 2021 edition has an article on the proposed
Residential Recycling Service fee increase.
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Conduct a Proposition 218 Public Hearing and Consider a
Residential Recycling Fee Rate Increase
March 23, 2021
Page 4
• Interested party notification letters (certified) were sent to AT&T, Building Industry
Association, SoCalGas, and Southern California Edison (CA Government Code
66016(a)). Notification was sent out per the required time limit of two weeks prior
to hearing.
In accordance with Proposition 218, local agencies are required to provide a 45 -day
notice period whereby property owners may submit, in writing, a protest objecting to the
proposed Recycling Service Fee increase. At the conclusion of the notice period, the City
is required to conduct a public hearing and tabulate the protest received. Only one protest
is allowed per property parcel. At this point, if a majority of property owners do not submit
a valid written protest, City Council could vote to adopt the new rates and structure. The
end of the 45 -day period will conclude at the end of the public hearing on tonight's agenda,
March 23, 2021.
FISCAL IMPACT:
The adopted budget includes sufficient funding for the Recycling Service Fee study and
the public noticing. Under the present $3 per residential unit per month rate, the Recycling
Service Fee generates approximately $970,000 in revenue, which covers approximately
40 percent of the annual City residential recycling cost of $2,331,000 for providing the
services. The proposed Recycling Service Fee increase would generate an additional
approximately $1,361,000 annually in General Fund revenue and establish full cost
recovery for the portion of the residential refuse contracts related to collection of
recyclable materials in accordance with current State mandates. Moving forward, the
rates would be adjusted per CPI annually.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Residential Recycling Service Fee Study
Attachment B — Notice of Public Hearing
Attachment C — Notification of Public Hearing Mailer
Attachment D — Resolution No. 2021-25
18-4
ATTACHMENT A
CITY OF NEWPORT BEACH
2020 RECYCLING SERVICES STUDY
15 January 2021
Mr. David A. Webb I Public Works Director
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
SUBJECT: RECYCLING SERVICES FEE STUDY
Dear Mr. Webb:
***** M GT
CONSULTING GROUP
At the request of the City of Newport Beach (City), MGT of America Consulting, LLC (MGT) has completed
a study of the Recycling Services fee and with this letter presents staff with the calculations and resulting
fees for consideration. MGT calculated the cost to provide recycling services in the City of Newport Beach
in conformance with well-established cost accounting methodologies.
SCOPE OF SERVICES
The current Recycling Services fee as shown on the Schedule of Rents, Fines, and Fees (SRFF) is $3.00 per
residential unit per month. The City requested that MGT analyze all costs associated with providing
recycling services to Newport Beach residents to determine whether the $3.00 fee is adequately recovering
costs.
MGT has determined that the cost to provide recycling services to Newport Beach residential units is as
follows:
MONTHLY FEE PER RESIDENTIAL UNIT
Excluding Newport Coast $6.28
Newport Coast $5.86
METHODOLOGY
The City provided MGT with the following data used to calculate the costs:
Staff time associated with the City's recycling program. This includes time spent on program
management and contract oversight. MGT calculated fully burdened labor rates for staff and
multiplied these labor rates by the annual hours spent on the recycling program to determine
annual city staff costs expended on the recycling program.
**i*i MGT
CONSULTING GROUP
18-5
CITY OF NEWPORT BEACH
2020 RECYCLING SERVICES STUDY
***** M GT
CONSULTING GROUP
• Annual Recycling Contract Costs. There are two separate contracts with CR&R Incorporated, one
for Newport Coast and the other for the remaining area of the City provided trash services.
• Percentage of waste diverted. This information is used to determine what percentage of the
contract expense is associated with recycling (diverted) vs sent to landfills. These percentages are
used to reduce the contract expense to that which is only associated with the recycling program.
• Number of residential units associated with each of the two contracts: the number of units in
Newport Beach excluding Newport Coast, and the number of units in Newport Coast. This
information is used to determine the cost per residential unit, separated by contract.
STUDY RESULTS
The following represents a summary of the data on which the proposed fee was calculated:
ANNUAL STAFF EXPENSE
Senior Management Analyst PW - Refuse $147.95 120.00
Code Enf Officer Trainee PW - Envtal Liability $45.41 240.00,
Total annual cost for staff time: $28,651.60
ANNUAL RECYCLING CONTRACT COSTS
Excluding Newport Coast $ 4,160,688 48.36% $ 2,012,108.72
Newport Coast $ 741,164 40.65% $ 301,283.17,
Total annual recycling contract costs: $2,313,391.88
Grand total annual costs for Residential Recycling program: $2,342,043.48
NUMBER OF RESIDENTIAL UNITS
Excluding Newport Coast 27,017
Newport Coast 4,335
Total residential units: 31,352
**i*i MGT
CONSULTING GROUP
18-6
CITY OF NEWPORT BEACH ***** MGT
2020 RECYCLING SERVICES STUDY CONSULTING GROUP
ANNUAL COST PER RESIDENTIAL UNIT
Excluding Newport Coast $0.92 $74.48 $75.40
Newport Coast $0.86 $69.50 $70.36.
MONTHLY FEE PER RESIDENTIAL UNIT
Excluding Newport Coast $6.28
Newport Coast $5.86
SUMMARY STATEMENTS AND CITY RECOMMENDATIONS
The proposed fee for Newport Coast residential units is $5.86 per residential unit per month and the
proposed fee for the remaining residential units in the City, currently receiving recycling services, is $6.28
per residential unit per month.
The City confirmed that all items included in the calculation are solely related to operational costs incurred
by the City in satisfying state -mandated recycling requirements. Costs related to organics are excluded
from these calculations.
Please do not hesitate to contact us if you have any questions or comments about this study. We look
forward to continuing to be of service to the City of Newport Beach.
Sincerely,
Ervl, L {PG2 to vn,
Erin L Payton
Director, MGT Financial Services
MGT of America Consulting, LLC
Cell: 503.358.3808
epayton@mgtconsulting.com
**i*i MGT
CONSULTING GROUP
18-7
ATTACHMENT B
NOTICE OF PUBLIC HEARING
CITY OF NEWPORT BEACH
Prop 218 Vote on Recycling Service Rate Increase
NOTICE IS HEREBY GIVEN that on Tuesday, March 23, 2021, at 5:30 p.m., or soon thereafter as the matter shall be
heard, a public hearing will be conducted in the City Council Chambers at 100 Civic Center Drive, Newport Beach. The
City Council of the City of Newport Beach will consider Prop 218 Vote on Recycling Rate Increase.
NOTICE IS HEREBY FURTHER GIVEN that the City will consider adopting a rate increase to the existing Recycling
Service Fee that the majority of City residents (except those in the Newport Coast area) currently pay and adopting
a new Recycling Service Fee for residents of the Newport Coast area. For clarification, the majority of the City
(excluding the Newport Coast area) and the Newport Coast area have two separate residential refuse collection
contracts resulting in two separate calculations of Recycling Service Fees. Each fee rate is based on annual
residential contract costs that include diversion rate for recyclable material processing, number of households
subject to the fee, staff time related to contract management and program administration. The City is recommending
the following rate increases: 1.) The proposed Recycling Service Fee for the City area (excluding Newport Coast)
would be $6.28 per residential unit per month. 2.) The proposed Recycling Service Fee for residential units in
Newport Coast would be $5.86 per residential unit per month.
All interested parties may appear and be heard thereon. If you challenge this decision in court, you may be limited
to raising only those issues you or someone else raised at the public hearing described in this notice or in written
correspondence delivered to the City, at, or prior to, the public hearing. For information call (949) 644-3055.
SPECIAL NOTICE REGARDING COVID-19
Given the Declaration of a State Emergency and Proclamation of Local Emergency related to COVID-19, we
recommend that you submit your questions and comments in writing for City Council consideration by sending them to
cityclerk(abnewportbeachca.goy. To give the City Council adequate time to review your questions and comments, please
submit your written comments by Monday, March 22, 2021, at 5:00 p.m. In addition, members of the public will have
the ability to participate in this meeting telephonically. Please review the Agenda for further instructions. The Agenda,
staff report and corresponding documents will be posted to the City's website at www.newportbeachca.gov, by end of
business day on Friday, March 19, 2021. While the City does not expect there to be any changes to the above process
for participating in this meeting, if there is a change, the City will post the information as soon as possible to the City's
website. The City of Newport Beach thanks you in advance for continuing to take precautions to prevent the spread of
the COVID-19 virus. If you are unable to participate in the meeting via the process set forth in the agenda, please
contact the City Clerk at 949-644-3005 or cityclerk(cDnewportbeachca.gov and our staff will attempt to accommodate
you.
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cc /s/ Leilani I. Brown, MMC, City Clerk, City of Newport Beach
18-8
ATTACHMENT C
CITY OF NEWPORT BEACH
592 Superior Avenue
Newport Beach, California 92663
949 644-3055 1 949 650-0747 FAX
Dear Newport Beach Resident,
January 29, 2021
I am reaching out to inform you of a proposed change to the City's current recycling service
fee listed in the Schedule of Rents, Fines and Fees (SRFF). A combination of factors has
necessitated a study of the residential Recycling Service Fee related to solid waste
collection. The City's current Recycling Service Fee is $3 per residential unit per month
and has not been studied or otherwise updated since 2009. Additionally, there is no
Recycling Services fee applied to residential units within the Newport Coast area, although
the City still has recycling related cost for this area. This is because the City's Recycling
Service fee was not applied as part of the annexation of Newport Coast into the
City in 2001.
The requirements for residential refuse recycling have increased per the initial
implementation of State Law AB 939 (Integrated Waste Management Act of 1989). This
has resulted in the operating costs associated for the collection and process of recyclable
materials to increase over time. The current fee no longer accurately reflect these cost
increases.
In 2020, with the help of an independent financial consultant, it was determined that a
proposed Recycling Service fee increase is needed. The proposed fee adjustments are to
raise the current $3.00 monthly recycling service fee that is currently applied to residential
properties within the City (excluding Newport Coast) to $6.28 per residential unit per
month, and also now apply a Recycle Service Fee of $5.86 per residential unit per month
to the residential properties within the Newport Coast Area to help offset the cost of
providing these state required recycling collection and processing services.
If approved by City Council, the change in Recycling Service Fee will become effective
April 2021.
Should you need more information about the proposed changes, please visit our website at
https://ne3yportbeachca.gov/govemment/departments/2021-residential-recycling fee -
study
Respectfully,
David A. Webb, Director
Public Works Department
Map of Residential Hauling Contracts
Recycling Fee Information
n
Newport Coast Residential Refuse
Santa Ana Heights
City of Newport Beach
0 1 2
Santa Ana Heights
Santa Ana Heights
residential
service provided
by CR&R via Costa Mesa
,y
Sanitation District.
City of Newport Beach
City of Newport Beach residential
refuse and recycling services provided
by CR&R.
Current Fee - $3.00
Proposed Fee - $6.28
%. Newport Coast Residlelnit�ii
Newport Coast refuse and recycl
provided by CR&R.
Current Fee - $0
Proposed Fee - $5.86
'refuse Collection
Ill
service
N
W--*,E
S
18-10
NOTICE OF PUBLIC HEARING OF PURPOSED RECYCLING SERVICE
RATE INCREASE
Notice is hereby given that the City Council of the City of Newport Beach ("City") will conduct a
public hearing on Tuesday March 23, 2021 at 6:30 p.m. in the City Hall Council Chambers at 100
Civic Center Drive, Newport Beach, CA 92660, where it will consider adopting a rate increase to
the existing Recycling Service Fee that the majority of City residents (except those in the Newport
Coast area) currently pay, and also adopting a new Recycling Service Fee for residents of the
Newport Coast area. The proposed fee increases are the result of a recent fee study completed by
the City's consultant, MGT of America, an independent financial consulting firm. Results of this
study found adjustments to the Recycling Service Fee are needed so as to recover the cost
associated with State mandated recycling efforts for providing residential refuse recycling
services. The fee calculations include the recycling related cost of current residential waste service
contracts with CR&R Incorporated, and for City staff costs for the majority of the City's residents
(excluding the Newport Coast area), as well as a separate fee calculation for resident of Newport
Coast.
BACKGROUND
In accordance with City of Newport Beach Municipal Code Chapter 6.04, Garbage, Refuse, and
Cuttings, the City covers the cost and expense of collecting, hauling away and disposing of solid
waste with property tax revenues through the City's General Fund. As a result of changes in state
law, in 1990, the City Council adopted Ordinance No. 90-6 establishing a Recycling Service Fee
to recover the costs incurred by the City in satisfying State mandated recycling requirements. The
City's current Schedule of Rents, Fines and Fees includes a Recycling Service Fee which was last
updated on December 8, 2009 and has since remained at $3 per residential unit per month.
The Recycling Service Fee was recently studied by the City's fee consultant, MGT of America.
The Recycling Service Fee is a cost of service fee based solely on recovery of those operational
costs associated with collection of recyclable materials in accordance with state mandates. Each
fee rate is based on the annual contract costs, the diversion rate for recyclable material, the number
of households subject to the fee, and City staff time related to contract management and program
administration. Because the City currently has are two separate residential refuse collection
contracts with CR&R Incorporated, one for the majority of the City (excluding the Newport Coast
area) and then another just the Newport Coast area to provide residential trash collection services,
the study resulted in two different calculations and resulting Recycling Service fees.
PROPOSED RATES FOR RECYCLING SERVICE FEE
With assistance from the consultant, the City reviewed the current residential Recycling Service
Fee and developed a detailed fee study calculation. For clarification, the majority of the City
(excluding the Newport Coast area) and the Newport Coast area have two separate residential
refuse collection contracts resulting in two separate calculations and Recycling Service fees. Each
fee rate is based on annual residential contract costs that include diversion rate for recyclable
material processing, number of households subject to the fee, staff time related to contract
management and program administration. City recommends the following changes:
The City (excluding the Newport Coast area):
0 The current fee for the City area is $3.00 per residential unit per month
• The proposed fee for the City area (excluding Newport Coast) would be $6.28 per
residential unit per month.
Newport Coast Area:
• Recycling Services fee was not included as part of annexation
• The proposed Recycling Service fee for residential units in Newport Coast would be
$5.86 per residential unit per month.
* Both fees will include future annual CPI increases
Customers can review the Information regarding the 2020 Residential Recycling Fee Study will
be provided on the City of Newport Beach website at:
https://neLyportbeachca.gov/govemment/departments/2021-residential-recycling-fee-study or the
City's administrative office at 100 Civic Center Drive, Newport Beach, CA 92660.
PUBLIC HEARING
Any current record owner or responsible tenant of a residential parcel upon which refuse and
recycling collection services are conducted, and where Recycling Service Fees are proposed to be
increased, may submit a written protest to the proposed rate increases to either the City's, or the
Newport Coast Recycling Service Fees; provided, however, only one protest will be counted per
identified parcel. Each protest must: (1) be in writing; (2) state if the protest is submitted in
opposition to the imposed/increased Recycling Service Fee rate; (3) provide the location of the
identified parcel (by service address or assessor's parcel number); and (4) include the name and
signature of the person who owns the effected residential parcel submitting the written protest.
Written protests may be submitted by mail or in person to the City of Newport Beach office, To
the attention of the City Clerk, 100 Civic Center Drive, Newport Beach, CA 92660, or in person
at the Public Hearing (see date, time, and location above). All written protests must be received
prior to the conclusion of the public comment portion of the public hearing. Any protest submitted
via email, facsimile, or other electronic means will not be accepted as a formal written protest. For
any protest submittal, whether mailed or submitted in person, please identify on the front of the
envelope, that the enclosed letter is for the Public Hearing on Recycling Service Fee Proposed
Rate Increases. The City Council will consider all written protests timely submitted and hear and
consider all public comments made at the public hearing. Oral comments at the public hearing
will not qualify as formal protests unless accompanied by a written protest. At the conclusion of
the public hearing, the City Council will determine whether to adopt the proposed rate increases
described in this notice. If, after the close of the public hearing, written protests against the
proposed rate increases and as outlined above are not presented by a majority of the record owners
or responsible tenants of the identified parcels upon which they are proposed to be imposed, the
City Council will be authorized to impose the rate increases. If you have any questions regarding
the information provided in this notice, or the rates applicable to your property, please contact the
Public Works Department at 949-644-3055.
SPECIAL NOTICE REGARDING COVID-19
Given the Declaration of a State Emergency and Proclamation of Local Emergency related to
COVID-19, we recommend that you submit your questions and comments in writing for City Council
consideration by sending them to cityclerkknewportbeachca.gov. To give the City Council adequate
time to review your questions and comments, please submit your written comments by Monday,
March 22, 2021, at 5:00 p.m. In addition, members of the public will have the ability to participate
in this meeting telephonically. Please review the Agenda for further instructions. The Agenda, staff
report and corresponding documents will be posted to the City's website at
www.newportbeachca.gov, by end of business day on Friday March 19, 2021. While the City does
not expect there to be any changes to the above process for participating in this meeting, if there is a
change, the City will post the information as soon as possible to the City's website. The City of
Newport Beach thanks you in advance for continuing to take precautions to prevent the spread of the
COVID-19 virus. If you are unable to participate in the meeting via the process set forth in the agenda,
please contact the City Clerk at 949-644-3005 or cityclerkgnewportbeachca. og_v and our staff will
attempt to accommodate you.
ATTACHMENT D
RESOLUTION NO. 2021- 25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, ADOPTING AN
ADJUSTED RECYCLING SERVICE FEE
WHEREAS, the California Integrated Waste Management Act of 1989 ("Act")
codified in the California Public Resources Code Section 40000, et seq. mandates local
governments to reduce the volume of solid waste disposed at landfills;
WHEREAS, as a result, in 1990, the City of Newport Beach ("City") adopted a
recycling service fee as set forth in Newport Beach Municipal Code ("NBMC") Chapter
2.30 (Recycling Service Fee) to cover the cost incurred by the City in satisfying State
mandated recycling requirements;
WHEREAS, the City's cost of compliance with the State's recycling requirements
continue to rise as the State's diversion requirements have risen from 25% when the Act
was enacted to 50% (with a goal of 75% as of the year 2020);
WHEREAS, the Recycling Service Fee was last adjusted in 2009;
WHEREAS, the City recently initiated a fee study to determine the City's current
cost associated with the State diversion requirements;
WHEREAS, the Recycling Service Fee Study, prepared by MGT of America, Inc.
("Recycling Service Fee Study"), analyzed the current residential recycling services costs
under the City's two residential solid waste hauling contracts with CR&R, Inc.;
WHEREAS, at the January 26, 2021 meeting, the City Council approved the
Recycling Service Fee Study which is attached hereto as Exhibit "A" and incorporated
hereby by reference, set a public hearing for March 23, 2021 and directed staff to mail
notices to property owners of the proposed Recycling Service Fee;
WHEREAS, on January 29, 2021, the City mailed notices to the record owner of
each identified parcel subject to the Recycling Service Fee in accordance with Article
XIID, Section C of the California Constitution and California Government Code Section
53750 et seq. ("Proposition 218");
18-14
Resolution No. 2021 -
Page 2 of 4
WHEREAS, a telephonic public hearing was held on March 23, 2021, in the City
Council Chambers located at 100 Civic Center Drive, Newport Beach, California due to the
Declaration of a State Emergency and Proclamation of Local Emergency related to
COVID-19. A notice of time, place and purpose of the hearing was given in accordance
with Proposition 218, ten-day advanced publication of the public hearing, and California
Government Code Section 54950, et seq. ("Ralph M. Brown Act"). Evidence, both written
and oral including the counting of protest votes, was presented to, and considered by, the
City Council at this public hearing; and
WHEREAS, following the public hearing held in conformity with Proposition 218,
the City Council determined that no majority protest against the recommended Recycling
Service Fee occurred.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council does hereby adopt the Recycling Service Fee of
$5.86 per residential unit per month for residential properties located within Newport
Coast, as shown by the boundaries depicted in Exhibit "B," which is attached hereto and
incorporated by reference that, as of the effective date of this resolution, are serviced
under Contract No. C-3942. Additionally, the City Council does hereby adopt the
Recycling Service Fee of $6.28 per residential unit per month for residential properties
located within the remainder of the City, excluding Newport Coast and Santa Ana Heights,
as shown by the boundaries depicted in Exhibit "B," that, as of the effective date of this
resolution, are serviced under Contract No. C-5649.
Section 2: The Recycling Service Fees set forth in Section 1 of this resolution
are subject to an annual adjustment from April of the prior year to April of the current year
but shall not extend beyond April 1, 2026, for inflation, in accordance with California
Government Code Section 53756. For purposes of adjusting the Recycling Service Fees,
the annual adjustment shall be the change, if any, in the Consumer Price Index for all
consumers in the Los Angeles -Long Beach -Anaheim area (CPI -U) consumer price index,
or any published successor index as published by the Bureau of Labor Statistics of the
Department of Labor. Prior to any adjustment, the City shall provide not less than 30
days' notice before the effective date of the adjustment.
Section 3: The City Council hereby approves the amendment to the Schedule
of Rents, Fines and Fees attached hereto as Exhibit "C" and incorporated herein by
reference. Except as explicitly revised by Exhibit "C," all other provisions of the SRFF
shall continue in full force and effect.
18-15
Resolution No. 2021 -
Page 3 of 4
Section 4: The Recycling Service Fee shall not be paid by persons or
businesses whose solid waste is collected by private haulers nor shall any portion of the
fee collected be used to defray expenses that would be incurred by the City in collecting,
hauling, and disposing of solid waste.
Section 5: The Recycling Service Fee prescribed by Resolution No. 2009-86 is
hereby replaced with the Residential Recycling Fee provided herein and Resolution No.
2009-86 is superseded by this resolution.
Section 6: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 7: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 8: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
18-16
Resolution No. 2021 -
Page 4 of 4
Section 9: This resolution shall take effect on April 1, 2021 and the City Clerk
shall certify the vote adopting the resolution.
ADOPTED this 23rd day of March, 2021.
Brad Avery
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
t� ,
- � `Aaron . Harp
City Attbrney
Attachments): Exhibit A — Recycling Service Fee Study
Exhibit B — Recycling Service Fee Map
Exhibit C — Schedule of Rents, Fines and Fees Updated
18-17
EXHIBIT A
Recycling Service Fee Study
18-18
CITY OF NEWPORT BEACH
2020 RECYCLING SERVICES STUDY
15 January 2021
Mr. David A. Webb I Public Works Director
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
SUBJECT: RECYCLING SERVICES FEE STUDY
Dear Mr. Webb:
**i*i M GT
CONSULTING GROUP
At the request of the City of Newport Beach (City), MGT of America Consulting, LLC (MGT) has completed
a study of the Recycling Services fee and with this letter presents staff with the calculations and resulting
fees for consideration. MGT calculated the cost to provide recycling services in the City of Newport Beach
in conformance with well-established cost accounting methodologies.
SCOPE OF SERVICES
The current Recycling Services fee as shown on the Schedule of Rents, Fines, and Fees (SRFF) is $3.00 per
residential unit per month. The City requested that MGT analyze all costs associated with providing
recycling services to Newport Beach residents to determine whether the $3.00 fee is adequately recovering
costs.
MGT has determined that the cost to provide recycling services to Newport Beach residential units is as
follows:
MONTHLY FEE PER RESIDENTIAL UNIT
Excluding Newport Coast $6.28
Newport Coast $5.86
METHODOLOGY
The City provided MGT with the following data used to calculate the costs:
• Staff time associated with the City's recycling program. This includes time spent on program
management and contract oversight. MGT calculated fully burdened labor rates for staff and
multiplied these labor rates by the annual hours spent on the recycling program to determine
annual city staff costs expended on the recycling program.
♦*i+i M GT
CONSULTING GROUP
18-19
CITY OF NEWPORT BEACH
2020 RECYCLING SERVICES STUDY
♦*i** M GT
CONSULTING GROUP
Annual Recycling Contract Costs. There are two separate contracts with CR&R Incorporated, one
for Newport Coast and the other for the remaining area of the City provided trash services.
Percentage of waste diverted. This information is used to determine what percentage of the
contract expense is associated with recycling (diverted) vs sent to landfills. These percentages are
used to reduce the contract expense to that which is only associated with the recycling program.
• Number of residential units associated with each of the two contracts: the number of units in
Newport Beach excluding Newport Coast, and the number of units in Newport Coast. This
information is used to determine the cost per residential unit, separated by contract.
STUDY RESULTS
The following represents a summary of the data on which the proposed fee was calculated:
ANNUAL STAFF EXPENSE
Senior Management Analyst PW - Refuse $147.95 120.00
Code Enf Officer Trainee PW - Envtal Liability $45.41 240.00
Total annual cost for staff time: $28,651.60
ANNUAL RECYCLING CONTRACT COSTS
Excluding Newport Coast $ 4,160,688 48.36% $ 2,012,108.72
Newport Coast $ 741,164 40.65% $ 301,283.17,
Total annual recycling contract costs: $2,313,391.88
Grand total annual costs for Residential Recycling program: $2,342,043.48
NUMBER OF RESIDENTIAL UNITS
Excluding Newport Coast 27,017
Newport Coast 4,335
Total residential units: 31,352
+♦+++ M GT
CONSULTING GROUP
18-20
CITY OF NEWPORT BEACH
2020 RECYCLING SERVICES STUDY
ANNUAL COST PER RESIDENTIAL UNIT
♦*i** M GT
CONSULTING GROUP
Excluding Newport Coast $0.92. $74,48 $75.40
Newport Coast $0-86 $69.54 $70.36
MONTHLY FEE PER RESIDENTIAL UNIT
Excluding Newport Coast $6.28
Newport Coast $5.86
SUMMARY STATEMENTS AND CITY RECOMMENDATIONS
The proposed fee for Newport Coast residential units is $5.86 per residential unit per month and the
proposed fee for the remaining residential units in the City, currently receiving recycling services, is $6.28
per residential unit per month.
The City confirmed that all items included in the calculation are solely related to operational costs incurred
by the City in satisfying state -mandated recycling requirements. Costs related to organics are excluded
from these calculations.
Please do not hesitate to contact us if you have any questions or comments about this study. We look
forward to continuing to be of service to the City of Newport Beach.
Sincerely,
Eri, L P2 �t0il.
Erin L Payton
Director, MGT Financial Services
MGT of America Consulting, LLC
Cell: 503.358,3808
epayton@rngtconsulting.com
+*i*i MGT
CONSULTING GROUP
18-21
EXHIBIT B
Recycling Service Fee Map
18-22
Map of Residential Hauling Contracts
Recycling Fee Information
a
LOO
Newport Coast Residential Refuse
Santa Ana Heights
City of Newport Beach
C�
Santa Ana Heights
Santa Ana Heights
residential
service provided
by CR&R via Costa Mesa
Sanitation District.
City of Newport Beach
City of Newport Beach residential
refuse and recycling services provided
by CR&R.
Fee - $6.28
Newport Co
Newport Coa!
4 provided by CR&R.
Fee - $5.86
0 1 2
4
IMi
tl o
18-23
EXHIBIT C
Schedule of Rents, Fines, and Fees Updated
18-24
Exhibit C- Residential Recycling Service Fee Update
Cunt Charges I Proposed Charges
R -u dd— I Fee gP ftl;Y IIYII I Adhrnment From Prerlaur Year Full Ccs,/Merkel Value
18-25
Incremental- Total or Wu
Tutei ar eau Inrrementel
Ynplememnbn
SERVICE NAME DESOiIPfFON
Toial or Beu Fee Total areae Fee IH aPokeblel Fee 1--t.1
REFERENCE TYRE Fee Ill epplkablei CPI Nada
Date
PUBLic WORMS- MUNICIPAL UPERAT10Ns
Recycling Service Fee - Excluding Newport Coast and Sania Ana
Heights "'R'"-"IU",Per Month
$ 3.00 $ 6.28 $ 3.76
M.C. 2.30.030 COSSFee $ 6.78 Yes
9/1/7025
RecycWgservice Fee-NexparlC oast Pe R,sidoml>I Unit Per Month
5 $ 5.66 5 5.66
M, C, 7.30 .030 msF.. 5 5.36 Yes
4111]011
18-25