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Resolution No. 6871 84 RESOLUTION NO. 6871 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS DECLARING THE RESULT OF THE PROPOSITION 218 PROTEST COUNT FOR THE PROPOSED SOLID WASTE COLLECTION RATE ADJUSTMENTS AND ADOPTING THE PROPOSED RATE ADJUSTMENTS WHEREAS, Article XIIID, Section 6 of the California Constitution ("Proposition 218") requires that, prior to the public hearing to increase solid waste collection rates, the City must mail to each property owner subject to the fee, at least 45 days prior to such w K,� public hearing, a notice describing (a) the amount of the fee or charge to be imposed upon each parcel, (b) the basis upon which the amount of the proposed fee or charge was calculated, (c) the reason for the fee or charge, and (d) the date, time, and location of the public hearing on the proposed fee or charge; and WHEREAS, on or about September 22, 2014, the City entered into a franchise agreement ("Agreement") with Valley Vista Services of Orange County ("WSOC") to provide franchise waste hauling services ("Solid Waste Services"); and WHEREAS, at its meeting of November 22, 2021, action was taken by the City Council to (1)approve VVSOC's Organic Waste Recycling Program and related franchise amendments; (2) approve franchise amendments adjusting residential and commercial recycling rates and changing the Consumer Price Index calculations, subject to a Proposition 218 hearing; (3) approve the city organics recycling compliance fee, subject to a Proposition 218 hearing; (4) approve the Proposition 218 notice and schedule; and (5) set a public hearing on January 24, 2022, for approval thereof; and WHEREAS, the January 24, 2022, public hearing concerns the City Council's adoption of (i) a proposed adjustment to the City's solid waste disposal service rates, (ii) an automatic rate increase formula, which would result in additional automatic increases to all solid waste service rates over the next five years, and (iii) a City Compliance and Monitoring Fee (collectively the "Rate Adjustments"); and WHEREAS, on December 10, 2021, the City mailed notice of a public hearing to be held on January 24, 2022 relating to the Rate Adjustments in accordance with Proposition 218; and WHEREAS, the City published said notice in The Orange County Register, a newspaper of general circulation in the City, on January 13, 2022; and WHEREAS, a public hearing to consider the Rate Adjustments, and any protest to such rates, was held on January 24, 2022, before the City Council, which meeting and public hearing was held more than 45 days after the mailed notice of proposed Rate Adjustments; and WHEREAS, written protests to the proposed Rate Adjustments have not been presented by a majority of the owners or tenant/rate payers of the identified parcels in the City; and WHEREAS, the Rate Adjustments, as set forth in Exhibits "A," "B," and "C," attached hereto and made part hereof, are required to cover the cost of providing solid waste services to property owners or tenant/rate payers within the City; and WHEREAS, the Rate Adjustments are non-discriminatory and do not exceed the City's costs to provide such services to users thereof; and WHEREAS, at the January 24, 2022, public hearing on this matter, the City Council considered all documentation in the record and the City Council received, heard, and considered all testimony, objections, protests, and other written communications; and 85 WHEREAS, the adoption of this Resolution is exempt from the requirements of the California Environmental Quality Act ("CEQA") pursuant to Public Resources Code Section 21080(b)(8)and Section 15273 of the State CEQA Guidelines codified at 14 CCR § 15273 because the resolution pertains to the adoption of charges necessary to maintain services within the City. The adoption of this Resolution is also exempt from CEQA under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS HEREBY RESOLVES as follows: Section 1. The foregoing recitals are hereby found to be true and correct and incorporated herein by this reference. Section 2. The City Council hereby finds that the Rate Adjustments, as provided in Exhibits"A," "B," "C" meet the substantive requirements of Proposition 218 (Cal. Const. Art. XIIID) as follows: a. Fee for Service Provided Only: Revenues derived from the fee may not be used for any purpose other than that for which the fee was imposed. Except for reasonable and normal administrative costs of the City, the fees collected are used to pay the City's franchised solid waste collection company, VVSOC, for the Solid Waste Services it provides to the City's residential and commercial customers. b. Fee not to Exceed Cost of Service: Revenues derived from the fee may not exceed the funds required to provide Solid Waste Service. The City's cost for Solid Waste Service is established by the Agreement, including all amendments thereto, which it negotiated with VVSOC as the lowest-cost contractor for Solid Waste Services available. However, the State of California's recently approved Short-Lived Climate Pollutant Reduction Strategy requires residential and commercial organic waste recycling starting in 2022. To comply with the state's strategy, the City Council directed the City's waste hauler VVSOC to develop an organic waste recycling program that meets the new state mandates. Along with the organic waste recycling program, Rate Adjustments include the following: (1) adjustment to the recycling program to account for the collapse of the global market for recyclables; and (2) adjustment to the applicable Consumer Price Index (CPI) calculation to account for rising inflation. With respect to the Organic Waste Recycling Program, the City's Public Works department and City's solid waste expert, MuniEnvironmental, reviewed VVSOC's program and proposed franchise amendments (including the Rate Adjustments). That review concluded WSOC's organic waste recycling program meets state requirements and also determined the organic waste recycling program's rates, methodology and equipment needs are appropriate and within industry standards. The City Council approved this program on November 22, 2021. The City's Public Works department and MuniEnvironmental also determined the Rate Adjustments are reasonable and within industry standards. With respect to the Organics Recycling Compliance Fee, the state's Short- Lived Climate Pollutant Reduction Strategy imposes significant new administrative obligations on the City, which is estimated to be approximately $100,000 per year. Therefore, a 1.5% Organics Recycling Compliance Fee on residential and commercial waste collection rates is proposed as part of the Rate Adjustments to fund these costs. The Organics Recycling Compliance Fee component is projected to generate approximately $100,000 a year to cover these costs. 86 With respect to the CPI Calculation Adjustment, the Agreement provides an annual CPI-based fee adjustment every April. The CPI adjustment is capped at 3.5% on regular disposal and 5% on green waste/organic waste disposal; however, in order to account for rising inflation,the CPI adjustment has been modified as follows: if/when CPI exceeds the established caps, rates increase to the cap, plus 85% of the CPI increase above the cap. This will ensure that rates do not exceed the costs of providing Solid Waste Services. c. Fee not to Exceed Proportional Cost: The amount of the fee may not exceed the proportional cost of the refuse service attributable to the parcel. The proposed rates are reasonably proportional and cost-based, and meet the general requirements of fairness and equity under Proposition 218. d. Fee Imposed Only for Service Actually Used: Fees may be imposed only for service that is actually used by, or immediately available to, the owner of the property subject to the fee or charge. The fees are only imposed for the provision of Solid Waste Services. e. Fee May Not Be Used for General Governmental Services: Revenues derived from the fee may not be used for the provision of general governmental services, such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners. These fees are only imposed upon customers of Solid Waste Services, which services are not provided to the public in general. Further, these fees will only be used for the provision of Solid Waste Services and will not be used on general governmental services. f. Notice. The City has provided the required written notice in accordance with Article XIIID of the California Constitution. Section 3. With respect to the Rate Adjustments, the City Council has fully considered this matter and has: a. Reviewed the submittal, notice and information submitted herewith regarding the proposed increase, the parcels to which the proposed fee increase would apply, and the reasons and basis for the increase and the fees; b. Provided notice of the proposed fee increase in accordance with Article XIIID of the California Constitution; c. Heard and received all written protests of real property subject to the fee; and d. Taken and received oral and documentary evidence pertaining to the proposed fee increase; and e. Written protests to the proposed Rate Adjustments have not been presented by a majority of the owners or tenant/rate payers of the identified parcels in the City. Section 4. Based upon the forgoing and all the evidence in the record, the City Council hereby adopts the Rate Adjustments, as provided in Exhibits "A", "B," and "C," and such Rate Adjustments shall commence and be effective for services provided as of March 1, 2022. Section 5. This Resolution shall be effective immediately upon its adoption. 87 PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 24th day of January, 2022. , (� - �. MAYOR OF THE CITY OF CYPRESS ATTEST: 5L\iet.Aio a CITY ERK OF THE ITY OF CYPRESS STATE OF CALIFORNIA ) COUNTY OF ORANGE )ss I, Alisha Famell, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the 24th day of January, 2022, by the following roll call vote: AYES: 3 COUNCIL MEMBERS: Minikus, Peat and Morales NOES: 1 COUNCIL MEMBERS: Marquez ABSENT: 1 COUNCIL MEMBERS: Hertz-Mallari OWL. Ryzuu\bQt CITY CLERK OFTHE CITY OF CYPRESS 88 EXHIBIT A RESIDENTIAL SECTOR SERVICES COLLECTION SERVICE CATEGORIES Current Proposed RESIDENTIAL CART SERVICE - One each of 96- gallon capacity: refuse, recycling, and green waste carts 16.17 21.11 Per Month -weekly collection; billing provided by City billing Agent. Additional Refuse Cart(s)- Each. 6.23 6.23 Per Month Additional Green Waste Cart(s)- Each after first 2. 31.17 31.17 Per Month First Additional Green Waste Cart and All Additional No Charge No Charge Recycling Carts will be free of charge. Cart Delivery(addition, removal or exchange) beyond 31.17 31.17 Per Trip two (2) per type per customer. Cart Replacement Due to Customer Damage. 62.34 62.34 Per Event On-Call Bulky Waste/ E-Waste (Up to two (2) items per No Charge No Charge year.) On-Call Bulky Waste / E-Waste (beyond two (2) per 62.34 62.34 Per item year.) Annual Holiday Tree Collection No Charge No Charge Cart Roll-Out Service- Incremental Charge (in addition 31.17 31.17 Per Month to base charge in line A). COMMERCIAL & MULTI-FAMILY SECTOR SERVICES REFUSE- STANDARD BIN SERVICE(NO PROPOSED CHANGES) COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (STANDARD BIN SERVICE) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X Extra Dump 2 Cubic Yards 135.15 233.14 311.32 389.51 465.18 541.79 53.03 3 Cubic Yards 145.84 241.30 330.12 414.98 497.17 583.35 53.03 4 Cubic Yards 199.84 326.16 396.24 465.00 535.05 625.35 53.03 Locking Bin Fee 20.02 26.69 33.36 40.04 56.71 53.38 53.03 96 Gal Cart 26.52 n/a n/a - n/a n/a n/a 13.26 REFUSE-BIN COMPACTOR (NO PROPOSED CHANGES) COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (BIN COMPACTOR SERVICE) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X 2 Cubic Yards 265.16 464.03 623.13 795.48 928.06 1,060.64 3 Cubic Yards 291.68 477.29 662.90 828.62 994.35 1,166.70 4 Cubic Yards 318.19 490.55 702.67 861.77 1,060.64 1,272.77 Locking Bin Fee 22.02 29.36 36.70 44.04 51.38 58.72 89 RECYCLING SERVICE CURRENT COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES @ 50% OF STANDARD BIN SERVICE RATES (STATE MANDATED RECYCLING SERVICE UNDER AB 341) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X Extra Dump 3 Cubic Yards 72.92 120.65 165.06 207.49 248.59 291.68 40.22 96 Gal Cart 13.26 n/a n/a n/a n/a n/a 13.41 RECYCLING SERVICE PROPOSED COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES @ 75% OF STANDARD BIN SERVICE RATES (STATE MANDATED RECYCLING SERVICE UNDER AB 341) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X Extra Dump 3 Cubic Yards 109.38 180.98 247.59 311.24 372.88 437.51 40.22 96 Gal Cart 19.89 n/a n/a n/a n/a n/a 13.41 GREEN WASTE SERVICE CURRENT COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (STATE MANDATED GREEN WASTE SERVICE UNDER AB 1826/SB 1383) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X 2 Cubic Yards 82.39 82.39 171.64 247.17 288.36 329.55 3 Cubic Yards 90.63 137.31 205.97 274.63 308.96 357.02 4 Cubic Yards 123.58 205.97 247.17 302.09 343.29 377.61 Locking Bin Fee 22.02 29.36 36.70 44.04 51.38 58.72 96 Gal Cart 27.46 n/a n/a n/a n/a n/a GREEN WASTE SERVICE PROPOSED COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (STATE MANDATED GREEN WASTE SERVICE UNDER AB 1826/SB 1383) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X 2 Cubic Yards 90.63 130.51 188.80 271.89 317.20 362.51 3 Cubic Yards 99.69 151.04 226.57 302.09 339.86 392.72 4 Cubic Yards 135.94 226.57 271.89 332.30 377.62 415.37 Locking Bin Fee 22.02 29.36 36.70 44.04 51.38 58.72 96 Gal Cart 79.65 n/a n/a n/a n/a n/a 90 ORGANIC/FOOD WASTE SERVICE CURRENT COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (STATE MANDATED ORGANIC/FOOD WASTE SERVICE UNDER AB 1826/SB 1383) Container Size Pickups per Week 1X 2X 3X 4X 5X 6X 2 Cubic Yards 162.19 279.77 373.60 467.41 558.21 650.15 3 Cubic Yards 175.01 289.55 396.15 496.38 596.61 700.02 4 Cubic Yards 239.81 391.39 475.50 557.99 642.07 750.43 Locking Bin Fee 22.02 29.36 36.70 44.04 51.38 58.72 96 Gal Cart 84.19 n/a n/a n/a n/a n/a ORGANIC/FOOD WASTE SERVICE PROPOSED COLLECTION SERVICE CATEGORIES AND MAXIMUM RATES (STATE MANDATED ORGANIC/FOOD WASTE SERVICE UNDER AB 1826/SB 1383) Pickups per Week Container Size 1 X 2 X 3 X 4 X 5 X 6 X 2 Cubic Yards 184.09 317.54 424.04 530.51 633.57 737.92 3 Cubic Yards 198.64 328.64 449.63 563.39 677.15 794.52 4 Cubic Yards 272.18 444.23 539.69 633.32 728.75 851.74 Locking Bin Fee 22.02 29.36 36.70 44.04 51.38 58.72 64 Gal Cart 95.56 n/a n/a n/a n/a n/a ROLL-OFF BOX & COMPACTOR COLLECTION SERVICES NO PROPOSED CHANGES COLLECTION SERVICE CATEGORIES MAXIMUM RATES Roll-Off Box or Compactor Service up to 6 Tons 553.85 Per Pull Roll-Off C&D Service Up to 6 Tons 715.73 Per Pull C&D MRF Fee 62.10 Per Ton Daily Rental (After 7 days with no dump) 12.24 Per Day Dead Run 36.72 Per Incident Overload Container 46.30 Per Ton TEMPORARY - CLEAN-UP BIN SERVICES NO PROPOSED CHANGES COLLECTION SERVICE CATEGORIES MAXIMUM RATES 3-Yard Bin: Delivery and Removal ( 1St Dump included) 146.88 3-Yard Bin: Additional Dump 61.20 Each Dead Run 12.24 Per Incident Daily Rental (After 7 days with no dump) 6.12 Per Day 91 ANCILLARY SERVICES & MISCELLANEOUS FEES NO PROPOSED CHANGES SERVICE CATEGORIES & FEES MAXIMUM RATES On-Call Bulky Waste— Commercial Premises 67.03 Per Item On-Call Bulky Waste/ E-Waste— Multi-Family Premises (Up No Charge to two (2) items per year.) On-Call Bulky Waste/ E-Waste— Multi-Family Premises 67.03 Per Item (Beyond two (2) items per year.) On-Call E-Waste & U-Waste Collection & Recycling — 67.03 Per Item Commercial & Multi-Family Premises Household Hazardous Waste Collection — Multi-Family 67.03 Per Item Premises Emergency Service 67.03 Per Hour Maximum Late Fee 6.42% Per Annum Bin Washing Service beyond Once a Year No Charge 92 EXHIBIT B 9.02 Schedule of Future Adjustments Beginning with the Rate Year starting July 1, 204-8 2022 , 2049 and for all subsequent Rate Years, the maximum rates shown in Exhibit 1 may be adjusted upon request as described in this Section 9.The Collector shall submit its request in writing directly to City staff or via certified mail, on or before the March 15 prior to the July 1 when the rate change will take effect,20'8 an each succeeding Failure to submit a written request by March 15th of each year shall result in Collector waiving the right to request such an increase for the subsequent Rate Year. Missed rate adjustments may not be added to rate adjustment applications in ensuing years. The rates shall decrease automatically in accordance with Section 9 if either the disposal gate fee or the Consumer Price Index decreases. Rate adjustment calculations shall be separately performed for Residential Cart rates (Exhibit 2A), Commercial Bin and Cart rates (Exhibit 2B), Roll-off Box and Temporary Service rates (2C), and Other Service rates. 9.02.1 Cost Component and Rate Adjustment Indexes The approved rates consist of the following cost components, followed by the initial weightings of each component. Each cost components may be adjusted by the change in the corresponding index as provided below. See Section 9.02.2 for detailed rate adjustment procedures. % of Costs (1) Rate Adjustment Index Starting Index T 1 E Cost Component a o A. Collection 75% 80% 100% Consumer Price Index - C'D�of 46% All Urban Consumers, All items-Los Angeles -Riverside-Orange will-he-2447059T County, CA capped at The CPI index is 3.5%plus 85% of any 281.347. increase in CPI above 3.5%.! B. Disposal 20% 20% 100% Actual change at 37% Orange County be-$32,36. The Landfills as per waste index is$35.67. disposal agreement with City of Cypress. C. Green Waste 5% 20% n/a Consumer Price Index 17% -All Urban be-$25,00-per-tom Consumers,All items- The CPI index is Los Angeles- 281.347. Riverside-Orange County, CA capped at 5%plus 85% of any increase in CPI above 5%.(3) per-ton-posted-gate 93 D. Other Service I n/a n/a 100% Consumer Price Index - CD�of (including MRF All Urban Consumers, February-2016T Service) All items—Los Angeles —Riverside—Orange County, CA capped at The CPI index is 3.5%plus 85% of any 281.347. increase in CPI above 3.5%.1A (1) Weightings may be adjusted for the rate adjustment following, and based upon results from each audit per Section 8.04.1. (2) For example, if the published annual CPI for the region is 6.2%, Collector could request the full 3.5% and 85% of the difference, as shown in the following table: Published Regional CPI 6.2% Franchise Cap 3.5% Difference (6.2% -3.5%) 2.7% 85% of Difference 2.295% TOTAL CPI(3.5% +2.295%) 5.795% (3) For example, if the published annual CPI for the region is 6.2%, Collector could request the full 5%and 85% of the difference, as shown in the following table: Published Regional CPI 6.2% Franchise Cap 5% Difference (6.2% -5%) 1.2% 85% of Difference 1.02% TOTAL CPI(5% +1.02%) 6.02% 9.02.2 Rate Adjustment for Residential Services and Commercial Refuse Services Residential Cart rates and Commercial Bin and Cart rates will be adjusted using the same method, but will be calculated separately due to the differences in the weightings of the Collection and Disposal components for each Customer type, as listed in Section 9.02.1. Step One — Calculate the percentage increase or decrease in Collection, Disposal, and Green Waste Component indices listed in Section 9.02.1. The increase or decrease in the Collection Component index and Green Waste Component index will be based on the twelve (12) month period ending February prior to the July 1 when the rate change will take effect. The Disposal index will be based on the actual percentage change in the gate rates at Orange County Landfills as per the then-existing waste disposal agreement with the City of Cypress for the twelve (12) month period ending June 30 prior to the July 1 when the rate change will take effect. • • . • • • • . . . • • • . , • • • • • • • +., t Crand Central n c Ti�T�ii i71•L7"1frZ'CG„J The percentage increase for the Collection Component Index shall not exceed 3.5%plus 85% of any increase in CPI above 3.5% for any Rate Year (see chart in Section 9.02.1). The percentage increase for the Green Waste Component index shall not exceed 5%plus 85% of any increase in CPI above 5% for any Rate Year (see chart in Section 9.02.1). Step Two — . . • . . . • . . • • . . . • • . • •. , ..! •. . Cost components are weighted as listed in Section 9.02.1. For subsequent rate adjustments, the relative weightings of the Collection and Disposal cost components will be determined by the most recent audit conducted per Section 8.04.1. 94 Multiply the percentage changes for the Collection and Disposal cost components, as determined in Step One, by that component's weighting as a percentage of total cost. Step Three — Multiply the weighted permitted percent change from Step Two by the existing maximum Residential Cart, Commercial Bin and Carts Services rates to determine the increase or decrease in maximum rates. Then add (subtract) the change in rates to (from)the existing maximum rates to determine the new maximum rates. See Exhibits 2A and 2B for examples of rate adjustments procedures. 9.02.3 Rate Adjustment for Roll-Off Box & Other Services Roll-off box rates and Other Services rate adjustments will be calculated separately for the Collection(Pull), Disposal, and MRF Service Component, as listed in Section 9.02.1. Step One — Calculate the percentage increase or decrease in Collection and Disposal Component indices listed in Section 9.02.1. The increase or decrease in the Collection and MRF Service Component index will be based on the twelve (12) month period ending February prior to the July 1 when the rate change will take effect. The Disposal index will be based on the actual percentage change in the gate rates at Orange County Landfills as per the then-existing waste disposal agreement with the City of Cypress for the twelve (12) month period ending June 30 prior to the July 1 when the rate change will take effect. The percentage increase for the Collection and MRF Service Component Indices shall not exceed 3.5%plus 85% of anv increase in CPI above 3.5% for any Rate Year (see chart in Section 9.02.1). Step Two — . . • • . . • . . . . • • • _ :.' • . . Cost components are weighted as listed in Section 9.02.1. For subsequent rate adjustments, the relative weightings of the Collection and Disposal cost components will be determined by the most recent audit conducted per Section 8.04.1. Multiply the percentage changes for the Collection, MRF Service and Disposal cost components, as determined in Step One,by that component's weighting as a percentage of total cost. Step Three — Multiply the weighted permitted percent change from Step Two by the existing maximum roll-off pull rate, roll-off per ton disposal, roll-off per ton C&D Processing, and other rates. Then add (subtract) the change in rates to (from) the existing maximum rates to determine the new maximum rates. See Exhibits 2C for examples of rate adjustments procedures. 9.02.4 Rate Adjustment for Source-Separated Single-Stream Recycling for Commercial and Multi-Family Premises The rates for Source-Separated Single-Stream Recycling Collection for Commercial and Multi-Family Premises shall not exceed 50% 75% of rates for Commercial and Multi- Family Refuse Collection. 9.02.5 Rate Adjustment for Green Waste Collection for Commercial and Multi-Family Premises The rates for Green Waste Collection for Commercial and Multi-Family Premises shall be calculated as described in Section 9.02.2 except that the Green Waste Component index will be used instead of the Disposal Component index. 95 EXHIBIT C "Collector shall charge and collect from all Customers for whom Collector is responsible for billing and collection a City Compliance and Monitoring Fee ("City Fee") equal to one and a half percent(1.5%) of the total service charge for each Customer, and remit the City Fee to the City on a quarterly basis in accordance with a schedule to be determined by the Contract Officer. The City Fee is in addition to and separate from the rates charged by Collector and shall not be considered part of Collector's rate for purposes of calculating rate adjustments under this Article 9."