REPORT TO COUNCIL
SUBJECT
Title
Authorize City Manager to Sign (1) the Assembly Bill (AB) 939 Implementation Fee Agreement and (2) the Countywide Household Hazardous Waste Collection Program Agreement Between Sunnyvale and the County of Santa Clara for Fiscal Years 2025-2027
Report
BACKGROUND
The California Integrated Waste Management Act (AB 939), passed in 1989, required that all California cities divert 25% of their solid waste by 1995 and 50% by 2000, which were both achieved by Sunnyvale. The legislation also imposed a fee charged on every ton of Sunnyvale solid waste disposed, which must be used to implement programs and services designed to meet the requirements of AB 939 which includes a reduction in the amount of household hazardous waste that is improperly disposed. The collection, distribution and use of the fee is governed by agency agreements between the County of Santa Clara (County) and the 15 cities in the County. The AB 939 Fee is divided into two parts:
1. A Program Fee of $1.50 per ton. Fee revenues are passed back to each jurisdiction to help pay the cost of preparing, adopting, and implementing integrated waste management plans.
2. A Household Hazardous Waste Fee of $2.60 per ton, with revenues used to pay for Household Hazardous Waste (HHW) services.
Household Hazardous Waste (HHW) services are provided to Sunnyvale residents by way of the Countywide HHW Program. Services include quarterly drop-off events held at a Sunnyvale location as well as events held at other permanent and temporary locations in the County. County also provides door to door collection to Sunnyvale residents who utilize rear-yard garbage collection service.
The City’s cost for participation in the HHW program is paid from two sources: (1) revenues from the Countywide AB 939 Fee, and (2) a direct payment from the City to cover the difference in AB 939 revenue and actual program costs and any increase to the services.
EXISTING POLICY
General Plan Chapter 7, Goal EM-15: Environmentally-Sound Disposal - Dispose of solid waste in an environmentally sound, dependable and cost-effective manner.
ENVIRONMENTAL REVIEW
The action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15061(b)(3) as the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment, where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The action being considered also does not constitute a "project" with the meaning of the CEQA pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
The AB 939 Implementation fee agreement is required for Santa Clara County to collect and distribute the AB 939 fee of $4.10 per ton in Fiscal Years 2025-2027 (Attachment 1). The County distributes the AB 939 Program Fee to the cities and the HHW Program Fee to the Countywide HHW Program. The Countywide HHW Collection program agreement is required for the City to participate in the countywide program available to its residents (Attachment 2).
AB 939 Fee Agreement
AB 939 policy oversight is provided by the Santa Clara County Recycling and Waste Reduction Commission (RWRC). The County has collected the AB 939 Fee on behalf of all jurisdictions within the County since July 1992. No change in the amount of the fee is expected during the next three fiscal years, and the longstanding fee collection process through the County remains effective. To allow the County to continue to collect the AB 939 fee and distribute its revenues to the cities after June 30, 2024, each city and the County must approve the Countywide AB 939 Implementation Fee Agreement. The revenue from this fee is credited to the City’s solid waste fund.
Countywide HHW Program Agreement
The County requires a minimum of 4% household participation level from each city as this is the minimum participation level required for the program to be cost effective. The County estimates the cost of providing HHW services to 4% of Sunnyvale households (2,524 households) to be approximately $510,000. The AB 939 HHW Fees to be collected totals approximately $258,000, leaving a shortfall of $252,000.
The City’s participation rate for FY 2022-23 was 4.2%. An additional $10,351 would provide service to additional 157 households, equivalent to the City’s participation rate in FY 2022-23. Staff therefore recommends that Council set the FY 2024-25 to FY 2026-27 amount at $262,351 (the “augmentation amount”) annually to cover the 4.2% participation rate cost.
County’s AB939 fee revenue has decreased and HHW Program costs have been escalating. There has been significant increase in vendor costs for the program and State grant funding has also decreased by 40%. These factors have led to substantial increase in costs for the City to maintain the current program participation level.
County staff will annually calculate augmentation amounts for each City based on then-current information on participation, disposal quantities and fee revenues, and program operating expenses. Based on the actuals, the County proposes amendments to the cost provisions of the HHW collection program agreement. Staff is recommending that Council continue to delegate to the City Manager the authority to approve the amendments for the term of the agreement (three years) with acceptable pricing and services and subject to available budget.
Sunnyvale has relied exclusively on the Countywide HHW Program for service to City residents for the past seventeen years and customer satisfaction with the service has been high.
FISCAL IMPACT
Solid Waste Management Fund: Solid Waste Collection (14402) has $150,000 allocated to cover the shortfall FY 2024-25. Staff anticipates the shortfall to be $262,000 for FY 2024-25. Staff will use the $150,000 already in the budget and absorb $112,000 from the current operating budget.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
1. Authorize the City Manager to execute a three-year Agreement for Countywide AB 939 Implementation Fee (Attachment 1 to the report), and a three-year Agreement for Countywide Household Hazardous Waste (HHW) Collection Program, (Attachment 2 to the report); and
2. Authorize the City Manager to execute annual amendments to the Countywide HHW Collection Program Agreement and the authority to approve the amendments for the term of the agreement (three years) with acceptable pricing and services and subject to available budget.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website <https://www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html>.
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use contract
_x_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment
___ General policy and legislative actions
Staff
Prepared by: Shikha Gupta, Solid Waste Programs Division Manager
Reviewed by: Ramana Chinnakotla, Director, Environmental Services
Reviewed by: Tim Kirby, Finance Director
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Agreement for Countywide AB 939 Implementation Fee
2. Agreement for Countywide Household Hazardous Waste Collection Program