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Home My WebLink About1998-05-19 City Council (10)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTENTION: FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:MAY 19, 1998 CMR:239:98 SUBJECT:REQUEST FOR COUNCIL INTERIM MIXED PAPER MONTHS APPROVAL TO EXTEND THE DROP-OFF PROGRAM FOR 18 REPORT IN BRIEF The report recommends an extension of the interim mixed paper drop-off program. The report contains an evaluation of key issues and a status report on the interim mixed paper drop-off program as requested at the April 22, 1997 (CMR: 157:97) Council meeting. The report justifies the recommendation for the extension of the interim program based on the current unresolved issues with PASCO and the SMART Station. A final recommendation will be given regarding a long term mixed paper program by the end of Summer 1999. CMR:239:98 Page 1 of 5 RECOMMENDATION Staff requests the Finance Committee recommend to Council approval of an extension to the interim mixed paper drop-off program, and direct staff to return to Council in Summer 1999 with a final recommendation regarding a long term mixed paper recycling program. BACKGROUND In March 1996, staff directed Palo Alto Sanitation Company (PASCO) to begin a pilot curbside mixed paper program using one residential route in Palo Alto. The data (generated by PASCO) projected that 4,000 tons of material per year could be diverted from the residential waste stream. Participants surveyed were pleased with the program and saw a reduction in the amount of garbage they generated. A majority of the participants indicated that they would be willing to pay an additional cost to have the program expanded citywide. On April 22, 1997, Council approved an interim mixed paper.drop-off program(CMR: 157:97) that would allow time for staff to evaluate issues that could potentially affect curbside collection of mixed paper such as: reduced Refuse Fund revenues which would likely stem from residents reducing their garbage service level; landfill cost avoidance; the impact of Proposition 218 on the City’s ability to raise refuse rates; and requirements for the Sunnyvale SMART Station contract. Council directed staff to return in one year with an evaluation of the program including recommendations for changes. The interim mixed paper drop-offprogram began September 1, 1997. Drop-off bins were located at all public libraries, the Midtown parking lot, and Foothills Park. After six months, the drop-offprogram collected 290 tons of mixed paper at a cost of $24,000. The comments have been positive and included a desire that a curbside program might follow. The interim mixed paper drop-offprogram has succeeded in providing an inexpensive program, while further evaluation of a curbside program is underway. DISCUSSION There is increasing public support for implementation of curbside collection of mixed paper. Staffhas received many public communications demonstrating interest and enthusiasm for implementing a program to collect mixed paper at the curbside. Staff has also obtained information on several of the outstanding issues, including the impact of Proposition 218, the potential impact on Refuse Fund revenues, and landfill cost avoidance. If a curbside mixed paper program is implemented, a rate increase would be required. Staff believes the City’s refuse collection services fall outside of the restrictions of Proposition 218. As a result, Proposition 218 would not impact the City’ s ability to raise rates. CMR:239:98 Page 2 of 5 Reduced revenues due to residents reducing their garbage service level is estimated at $68,580. This number is based on a survey of residents that participated in the mixed paper pilot program, of which 55 percent indicated they would consider reducing their garbage service levels. Landfill cost avoidance is tonnage diverted multiplied by the cost for processing waste for disposal. If 2,500 tons of mixed paper is diverted from the waste stream sent to the Sunnyvale SMART Station (which cost approximately $76.00 per ton), it could create a savings of approximately $190,000 annually. However, there are still key issues which remain unresolved. The collection and processing costs are vital in creating an economic analysis for curbside collection of mixed paper. The processing design is the foundation, in establishing these costs. The processing design determines what recyclables can be mixed together (creating simplified collection), how the truck is designed (number of sections, dumping abilities, load capacities), and routing. The two key components in this evaluation which remain unresolved are: 1).SMART Station utilization, and 2) the PASCO contract beyond June 30, 1998. The Sunnyvale SMART Station may represent an alternative to processing mixed paper at the City’s Recycling Center. If the SMART Station curbside line receives all three cities’ (Palo Alto, Sunnyvale and Mountain View) source separated materials, it could improve the market value of the materials, could allow longer term agreements with the brokers, and could create more versatility in how materials are collected. The design phase for the curbside source separated materials line at the SMART Station has not been completed. With the variety and changing programs from Mountain View, Palo Alto and Sunnyvale, the original completion date continues to be delayed. Until a set design is agreed upon by all three cities, the economic considerations and timeline remain unanswered for collection and processing cost from this facility. Staff is currently negotiating with PASCO for a new contract." Issues related to how this program would be implemented and how PASCO would be compensated need to be determined. It is estimated that PASCO-negotiations could befinalized December 1998. The extension of the interim drop-off program will allow staff time to minimize program costs and develop a fair recommendation. Extension of the interim mixed paper drop-off program will also allow the community to continue recycling mixed paper at convenient locations. CMR:239:98 Page 3 of 5 ALTERNATIVES TO STAFF RECOMMENDATION 1) Discontinue the interim mixed paper drop-off program and implement a curbside residential mixed paper. 2)Discontinue the interim mixed paper drop off program. Continue to collect mixed paper at the City’s Recycling Drop-off Center and SMART Station. RESOURCE IMPACT The proposed FY 1998-99 PASCO budget includes $40,000 to fund the interim mixed paper drop-off program. The total expense to implement a curbside collection of mixed paper will be $321,200 for the first year and $168,200 annually thereafter, with a projected loss of revenue from refuse rates of $68,580. Possible savings created would equal $190,000 annually from landfill cost avoidance if 2,500 tons of additional recyclable materials are recovered. ANNUAL COST Addition of two trucks ($185,000 x 2/5 years) ....................$ 74,000 Addition of license, fuel and maintenance (2 x $14,500) .............’ $ 29,000 Reduction of one residential truck ($220,000 / 5 years) & maintenance ($ 58,500) Increase to residential drivers to compensate for increased work ......$104,200 (2.50 x 16 drivers x 2,080 hours x 1.25) Cost to haul mixed paper (15 tons x 260 ~ $5) ..........’ .......-... $ 19,500 Total $168,200 ONE TIME COSTS . - Cost to figure rerouting ......................................$ 13,000 Cost for one crate per customer to handle mixed paper ..............$100,000 Cost for delivery of crates ....................................$ 40,000 Total $153,000 POLICY IMPLICATIONS This report does not represent any change to existing City policy. CMR:239:98 Page 4 of 5 TIMELINE If the interim mixed paper program is approved, staffwill return in Summer 1999 with a final recommendation. ENVIRONMENTAL REVIEW This is not a project required under the California Environmental Quality Act (CEQA). PREPARED BY: Russell Restorer, Solid Waste Manager DEPARTMENT HEAD REVIEW: CITY MANAGER APPROVAL: GLENN S. ROBERTS Director of Public Works City Manager CMR:239:98 Page 5 of 5