HomeMy WebLinkAboutDrctn - Tax Roll Billing - Rcycle and Vehicle Impact Fees CITY OF PALM DESERT
SPECIAL PROGRAMS DEPARTMENT
INFORMATIONAL STAFF REPORT
REQUEST: PROVIDE DIRECTION RELATIVE TO TAX ROLL BILLING FOR
RESIDENTIAL SOLID WASTE AND RECYCLING COLLECTION
SUBMITTED BY: Frankie Riddle, Director of Special Programs
DATE: March 27, 2014
CONTENTS: Coachella Valley Cities Service Rates and Tax Roll Billing Survey
Recommendation
By Minute Motion, direct staff as to the appropriate follow-up action relative to Tax Roll Billing
and Recycle and Vehicle Impact Fees.
Discussion
Over the last five (5) years, with the significant recession, home foreclosures, and increased
unemployment rate, City staff realized a problem that did not exist before; the lack of a
mandatory payment system for recycling and trash service. While the City Municipal Code
states that there is a mandatory service, there exists a deficiency in the payment process for
collection of unpaid accounts. Given the current process is is very difficult to enforcement
payment without stopping service, which could result in health and safety concerns related to
stock piling of trash in yards/garages and illegal dumping.
Starting in 2010, City staff inet with representatives of Burrtec Waste & Recycling Services to
discuss the issue of non-payment by residential customers and how best to collect the fee while
still providing the service. The City did not want Burrtec to stop service, thus possibly creating a
health and safety issue; however, this would require that Burrtec continue to provide service to
customers not paying for services. As a result of the initial meetings, discussion commenced on
possible Tax Roll Billing for residential customers within Palm Desert, which would provide
Burrtec with compensation while avoiding potential health and safety issues as a result of
stockpiling of trash in yards and/or illegal dumping of trash. The City currently requires that
each residence have trash and recycling on premises; however, this does not provide an
effective way to enforce payment for services rendered except through small claims, which is
costly and time consuming, and does not eliminate the issue of providing service for non-
payment.
In April 2011, Burrtec requested that the Tax Roll Billing be placed on hold until a future
undetermined date. At the City Council meeting of April 28, 2011, the City Manager informed
the Council that Residential Tax Rolling Billing was being placed on hold and would not be
initiated that year due to concerns relative to the program. However, it was noted that either an
alternative program to require mandatory payment by person(s) not paying for trash service
would be brought forward at such time as an alternative program was developed, if possible, or
when Tax Roll Billing issues were resolved.
CITY COUNCIL STAFF REPORT
MARCH 27, 2014
PAGE 2 -
On Wednesday, February 26, 2014, City staff met with Frank Orlett and Mike Veto of Burrtec to
start initial contract negotiation discussions. Items under discussion at this meeting dealt with
the potential implementation of the new Recycle Fee and Vehicle Impact Fee through Burrtec
with the commencement of a new contract in 2015. The fees would be in-line with those
determined feasible within the Nexus' studies that were prepared by HF&H Consulting, LLC
(Recycle Fee Nexus Study) and Willdan Financial Services (Road Maintenance &
Refuse/Recycle Vehicle Impact Study). In addition, Mr. Orlett requested that the City consider
Tax Roll Billing again as part of contract negotiations. Following are tentative negotiation items:
• Three (3) year extension to agreement. Current term expires May 31, 2015; however,
there is an option for a one four (4) year extension term to May 31, 2019, which is
currently being negotiated. (If additional three years was added to the four year term,
the agreement would not expire until May 31, 2022.)
• New Recycle Fee and Vehicle Impact Fee:
o Implement new Recycle Fee in 2015 in the amount of $0.78 for residential and
$7.24 for commercial (see below for more details).
o Phase-in the new Vehicle Impact Fee in 2015 (e.g., 20% first year, 40% second
year, 60% third year,...) (see below for more details).
• Tax Roll Billing:
o Burrtec has indicated that it would pay 10% ($1.06) for Tax Roll Billing, which
could cover the rate increase to residential customers (not including Master Billed
accounts/HOAs).
- The proposed 10% discount is based on an estimate of the haulers
savings as a result of bad debt, labor, and mail costs, and other
miscellaneous costs. The discount is also consistent with what is offered
to Master Billed accounts by Burrtec.
o Burrtec to cover the new Recycle Fee to residential customers.
o Burrtec has agreed to cover additional costs for various programs to be
negotiated for approval of Tax Roll Billing.
Staff has provided three options below that Council could consider with regard to Tax Roll Billing
and the Recycle and Vehicle Impact Fees:
Options for Tax Roll Billing and
Rec cle and Vehicle Im act Fees Im lementation
O tion No. 1 Option No. 2 O tion No. 3
No Tax Roll Billin Tax Roll Billin Tax Roll Billin
Implement Recycle and Implement Recycle Fee and Implement Recycle Fee and
Vehicle Impact Fees Vehicle Impact Fee Phase-in of Vehicle Impact
Fee
Implement both fees for the Implement both fees for the Implement both fees for the
residential rate increase of residential rate increase of residential rate increase of
$1.52 for 96 gallon container $0.46 (less $1.06 paid for $0.46 (less $1.06 paid for Tax
Tax Roll Billing) (excluding Roll Billing) (excluding master
master billed communities) billed communities) for 96
for 96 allon container allon container
Implement both fees for the Implement both fees for the Phase-in of both fees for the
commercial rate increase of commercial rate increase of commercial account at 20%
$14.08 for 3-yard serviced 1 $14.08 for 3-yard serviced 1 increments each year
time per week (rate time per week (rate
increases based on number increases based on number
and size of bins and da s and size of bins and da s
2
CITY COUNCIL STAFF REPORT
MARCH 27, 2014
PAG E 2
As reflected in the attached Coachella Valley Cities Service Rates and Tax Roll Billing Survey,
with the approval of the Recycle and Vehicle Impact Fees, the City of Palm Desert's Solid
Waste and Recycle rates for residential would still be the lowest at $12.10 ($10.58 current rate
+ $1.52 fee to residents) for a 96 gallon container and among the lowest at $112.41 ($98.33
current rate + $14.08 fee to commercial) for commercial, depending on the service level being
received.
Provided below is a very basic overview of the procedures that would need to be undertaken, if
City Council approves moving forward with Tax Roll Billing and/or implementation of the
Recycle and Vehicle Impact Fees:
• Prepare amendments to the Franchise Agreement and Palm Desert Municipal Code.
• Bring forward an amendment to the Franchise Agreement between the City and Burrtec
and an amendment to the Palm Desert Municipal Code for approval of the Tax Roll
Billing.
• Mail letter/notice, prior to public hearing, to residents and businesses regarding public
hearing to consider approval of Tax Roll Billing for residential solid waste and recycling.
• Submit to the Auditor-Controller's Office, Property Tax Division, by August 10, 2015.
Fiscal Analvsis
There is no fiscal impact associated with this request.
CITY COUNCIL ACTION
Submitted By: APPROVED DENiF.D
RECEIVED OTHER �
MEETING DATE -'' �� �
S:
Frankie Riddle, irector of Special Programs NOES•
ABSENT:
Approval: ABSTAIN:
VERIFIED BY:
Original on File with City k's Office
* WithCouncil concurrence, staff directed to pursue
John M. WOhlmuth, City Manager a variation of Option 3 from the printed
report, including tax roll billing for
residential and two-year (SOx in the first,
100� in the second year) phase-in to
implement the RpcyclP and VehiclP Impact FPes
to comnaerical accournts.
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