Utilities Rate Advisory Commission Special Meeting – May 8, 2019

The Utilities Rate Advisory Commission (URAC) held a special meeting on Wednesday, May 8, 2019, at 6:00 p.m. in the Council Chambers at 915 I Street, Sacramento. The meeting focused on recycling and solid waste services, including a presentation on extended producer responsibility, survey results, and a workshop on proposed three-and-a-half-year rate adjustments. The commission received information and provided comments; no formal vote was taken on the rate proposal.

Consent Calendar

• Approval of Minutes (April 24, 2019): The commission unanimously approved the minutes from the April 24, 2019 meeting.

Public Comments & Testimony

• Lucy Lopez (public speaker): Addressed the commission on topics unrelated to the agenda (a calendar project, a civil rights campaign, and street cleanliness). She was reminded that public comment is limited to agenda items and was asked to conclude after her allotted time. No other public speakers were present.

Discussion Items

California Product Stewardship Council Presentation

• Speaker: Doug Colbold, California Product Stewardship Council (CPSC)
• Summary: Colbold explained the concepts of extended producer responsibility (EPR) and product stewardship, highlighting cost burdens on local governments for hard-to-handle wastes (e.g., e-waste, batteries, tobacco waste, propane cylinders). He noted that Caltrans spends $41 million annually on cigarette butt cleanup and estimated a similar cost of $3.4 million for Sacramento. He suggested local ordinances (e.g., a fee on cigarette sales) as a model for the city. Commissioner Brian Bearing thanked Colbold and noted the importance of understanding these costs in the rate context.

Recycling and Solid Waste 2019 Survey Results

• Speaker: Jennifer Franz, JD Franz Research
• Summary: Franz presented survey results from 640 interviews (80 per council district) conducted January 30–February 19, 2019. Key findings:
  • 78% of residents find every-other-week recycling service adequate.
  • Only about one-third of residents would be willing to pay an additional $1.20/month for weekly recycling.
  • Street sweeping ratings were mixed: 44% rated it excellent or good, 44% fair or poor, with wide variation across districts.
  • Overall satisfaction with garbage, recycling, yard waste, and junk pickup was 92%.
  • The cooperation rate was 81%, indicating strong interest.
• Commission questions: Commissioners asked about methodology (landline vs. cell phone), reasons for street sweeping dissatisfaction, and whether the survey included rate impact questions (it did not). Staff noted that street sweeping frequency is every six weeks citywide, which may explain some dissatisfaction.

Workshop on Proposed Three-and-a-Half Year Rate Adjustment for Recycling and Solid Waste Services (RSW)

• Presenters: Jerome Council, General Manager, Integrated Waste; Janice Connelly Coleman, Support Services Manager; Megan Lavano, Lise and Company (public outreach)
• Summary: Council outlined a proposed rate adjustment from January 1, 2020 through fiscal year 2023. Key drivers:
  • Growth: 18,000 new accounts expected over 3–5 years (1.25% annual growth); current workforce and fleet have not kept pace since 2013.
  • Legacy landfill costs: $11 million spent in past 10 years, with another $11 million projected for next 5 years for closure and post-closure maintenance.
  • Compliance with SB 1383 (food waste diversion): 11,000 currently exempt green waste customers will be brought back into the program with a new food waste collection rate.
  • Collapse of recycling markets (China Sword): Recycling is expected to shift from a revenue source to an expense.
  • Need for additional street sweepers (two new routes) to improve frequency from every six weeks to monthly.
• Proposed rate increases:
  • For the 64-gallon garbage can (the standard), monthly charges would rise from $36.89 (FY2019) to $39.63 (Jan 2021), $42.82 (2022), $46.01 (2023), and $49.22 (2023) — a total increase of $12.33 over 3.5 years (8.2% in FY2020, then 10.15% for recyclables, 3% for street sweeping).
  • The operating reserve would dip to 68 days but recover to 90 days by FY2023.
• Public outreach: Megan Lavano described a plan including a dedicated website, bill inserts, presentations to 27 neighborhood organizations (13 scheduled), and media outreach.
• Commission questions and discussion:
  • Commissioner Andrew Day asked about other direct operating expenses; staff noted they are primarily labor and household hazardous waste costs.
  • Vice Chair Brian Bearing asked about the main drivers of the increase; Council cited static workforce since 2013, growth, legacy costs, and SB 1383 compliance.
  • Commissioner Megan Fidel asked about tiered rates for different can sizes, food waste bid costs, and potential CalRecycle grants. Council noted bids are due the next day and that projected costs are estimates; grants may be pursued later.
  • Commissioner April Jarvis asked about the cost of a new route, the impact of legacy landfill costs on the rate comparison, and the utility rate assistance program (URAP). Council agreed to provide additional data on route costs and the legacy cost component.
  • Chair Melissa Lee asked about the recycling market collapse; Council confirmed it is primarily driven by China's import restrictions.

Key Outcomes

• The commission received the presentations and workshop for information and comment; no formal vote on the rate proposal was taken.
• The next workshop is scheduled for June 26, 2019, where the commission will be asked to vote on the proposed rates to proceed to a Proposition 218 notice.
• A public hearing on the rate adjustments is tentatively set for August 28, 2019, with a goal of implementing new rates on January 1, 2020.
• Staff will provide additional information requested by the commission: (1) cost of adding a new route (vehicles, staff, etc.), (2) the share of legacy landfill costs embedded in the current rate, and (3) a breakdown of rates by container size.
• The meeting was adjourned at approximately 8:10 p.m. (estimated from agenda timing).