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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 2, 2020 TITLE: PUBLIC HEARING: ADOPT A RESOLUTION TO INCREASE CURBSIDE CART REFUSE RATES (NON -GENERAL FUND) CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO /s/ Kristine Ridge FILE NUMBER CITY MANAGER RECOMMENDED ACTION Hold a Public Hearing and adopt a resolution increasing the City curbside cart refuse rates by $1.90, effective July 1, 2020, and by $1.50, effective July 1, 2021. DISCUSSION The City contracts with Waste Management (WM) for the collection and handling of solid waste. On March 17, 2020, City Council approved a one-year extension of the City's agreement with WM through June 30, 2022. This amendment was needed to meet the City's Solid Waste Request for Proposals (RFP) expanded timeline. Also included in the amendment was additional programming to address the requirements of Assembly Bill 1594 (AB 1594), which went into effect on January 1, 2020. AB 1594 eliminates diversion credit for green waste sent to County landfills as Alternative Daily Cover (ADC). Prior to this legislation, WM delivered green waste collected from the City's customers to a third -party processor for grinding and transfer to the Orange County Landfill System for use as ADC. WM provided this service at no charge to customers, and the City received diversion credit to meet other State mandates. Under the new requirements of AB 1594, WM has continued to deliver green waste for processing, however the material is now being composted, which still provides the City with diversion credit but at an increased cost to WM. To maintain mandated AB 1594 compliance during the agreement extension period, and to compensate WM for costs not previously accounted for in the agreement, the City and Waste Management, with the assistance of the City's solid waste consultant, negotiated customer rate adjustments (July 1, 2020, and July 1, 2021) as part of the amendment. WM will continue to provide these enhanced processing services at no cost to ratepayers through June 30, 2020. Rate Design In recent years, the courts have made rulings with respect to California Constitution Article XIII C and D (commonly known as Proposition 218) that place the burden of proof on agencies to demonstrate that all aspects of refuse rates are directly proportionate to the cost of providing service. The proposed refuse rate increases are structured to directly align with Waste 75A-1