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Agenda Item 24.

City Council Meeting

Meeting Date:	07/17/2018
FROM:	Bill Gallardo

Subject:

Mandatory Commercial Organics Recycling Program (AB 1826)

RECOMMENDATION

Review report, select implementation option and direct staff to bring back formal program fee details for City Council consideration at upcoming City Council meeting.

BACKGROUND/DISCUSSION

California Assembly Bill AB 1826 (signed into law on September 28, 2014) stipulates that local governments are to facilitate compliance with this law by establishing and implementing additional recycling programs. The purpose of this regulation is to separate commercial organic waste from the waste stream and divert it from landfills.

On May 1, 2018, staff presented a report to City Council summarizing the background, implementation options, outreach to date and possible next steps for this item. At the meeting, City Council requested for additional information and did not take formal action. Subsequent to this meeting, staff summarized City Council questions raised at the meeting and arranged them by the following categories: AB 1826 Background (Definitions & Requirements); Financing / Revenue; Program & Pricing Details; Neighboring City Comparison / Collaboration; Impacts / Negative Repercussions of Non-Compliance; Chamber of Commerce Position and Legislative Advocacy.

The detailed responses to City Council questions are included in Attachment 1. Since the May 1, 2018 City Council meeting, there were several notable updates as summarized below and discussed in more detail in Attachment 1:

Republic met with both Downtown and Embassy Suites representatives to work through further details on the net cost impact worksheets prepared for their properties.
3rd party that produces bio-slurry increased their rate to Republic from $91/ton to $95/ton. This increased the proposed sectorwide rate from 3.73% to 3.87%.
Republic purchased and installed their own Organics processor at their Anaheim facility, which uses a different recycling process. Republic proposed to match cost of 3rd party pre-processor at $95/ton.
Chamber of Commerce Leadership met to discuss the program and provided staff with their written position, which supports the Sectorwide option.
Staff and Chamber of Commerce representatives met with State Senator Newman regarding this bill. There was no reportable action taken.

Staff recommends that City Council select an implementation option and direct staff to bring back formal program fee details for City Council consideration at an upcoming City Council meeting.

FISCAL IMPACT/SUMMARY

California Assembly Bill AB 1826 (signed into law on September 28, 2014) stipulates that local governments are to facilitate compliance with this law by establishing and implementing additional recycling programs. Although the City of Brea adopted a program on February 2, 2016, the program fees still need to be defined. Staff has worked closely with Republic Services and has defined two fee options for consideration, Single Generator Only Fee and a Sectorwide Fee. A Single Generator Fee is considerably higher than the Sectorwide Fee since only subscribers to the program would pay for the program. The Sectorwide Fee is lower, but would be applied to all businesses regardless if they generate organic waste or not.

The fiscal impact will be dependent on the selected option. However, all fees would be paid by the business sector and there will be no impact to the General Fund.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Tony Olmos, Public Works Director

Attachments
Attachment 1: Responses to City Council Questions