HomeMy WebLinkAbout0100.091~ ~
J4l1uary 10, 1991
THE BONORADLE CITY COUNCIL
Palo Alto, California
Attention: Finance and Public Works committee
THESUSJECTOF
THIS REPORT
ISA
COUNCil PRIORITY
ICOJfQKI:C OtJ'l'LOOIi 9OIOqHII JgETIBG OF NOVEMBER 2 II,-.!!.U.
Members of the Council:
This is an informational report; no Council action is necessery~
'eport ia Irief
The Economic outlook committee {EOC} 'Was formecl in 1988 by tbe
Finance Director to provide insight on issues in the local economy
that .iqht affect the City's budqet, and to provide a forum for
business leaders to provide feedback on city services. The EOC is
comprised of City staff members and business leaders from the local
COlIDIUnity. The committee meets quarterly to discuss topics of
e~ic concern tt) local government and businesses~ Attached are
.inutes of the latest EOC meetinq. The Finance and Public Works
Committee has requested that minutes from EOC meetings be agendized
as an informational item l as a part of the Committeels priority of
economic outre.acb~ Topics covered at the November meeting included
recycling and the procurement of recycled products, a review of the
local econoaic environment, and an update on land use and re
development options.
Res~ctfully submitted,
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ECONOXIC OUTLOOK COIIKIT'l'BB lUN'OTl!lS
November 29~ 1990
Attendees: Rosemary KcAndre:ws, Stanford Shopping Center; Edie
Dorosin, Chaaber ot Commerce; Charles Keenan, Keenan Land Company;
Andy Doty, Stanford University; Ray Sly, varian; Gene Endicott,
Hewlett-packara; Pat Castro, Hewlett-Packard; 3ames Saer, Ware and
:rreiclenrichi Hicki SChneider, Spirals; Palo Alto city Councilme.mber
Gail woolley; city of Palo Alto staff me~ers Emily Harrison~ Ken
SChreiber, George Beck, Ted Janus, Robert Le and Libby Dame4
aJlClCCLZlIG lUll) !'1m I'IIOCUllBMBN'l OF IIEClCCLIIJ) l'RODOCTS
9iSY 0' Palo Alto Cp"ercial Recycling Programs
Ted Janus, Publie Works Project Coordinator for the City's
Recycling Program, began the discussion on recycling by presenting
the City's c~mercial recycling proqrams. He has spent the past
few .anths working on compliance with AB939, the bill authored by
Byron Sher, Which requires cities to divert by 1995 at least 25
percer4t of their waste destined for landfill disposal and SO
percent by lOOO. He stated that Palo Alto currently recycles
approxl.ately 1.6 percent of its waste. In the future, the City may
require asphalt contractors to recycle all of their asphalt~ This
would divert an additional 9' percent of the. waste streHl. Another
10 percent 'Would be accomplish.ed by usinq the SMART (SUnnyvale
Katerial Recovery' Transfer) Station as a transfer point for waste
sent to Kirby Canyon in San Jose. The City is in the process of
negotiating a contract, since Palo Alto may be directing about 60
percent of its vaste to the San Jose site. SMART would perform a
-dump and pick-operation wh~rein the City's waste would be dumped
onto a conveyor belt, and ~~rkers would pick out all recyclables~
Implementing the above programs ~ould bring the City's total vaste
diversion to 35 percent.
Mr .. Janus then discussed commercial/industrial recycling. The.
commercial/industrial sector accounts for approximately 70 percent
of the City's waste; only '9 percent of that waste is currently
beinq recycled. The rationale behind recyclinql according to Mr.
Janus, 1. that it say~s energy. saves natural resources (recycling
one ton of vhi te paper sa. ves 17 trees), and it make & economi c sense
to Jceep qarbaqe costs down. Common business reservations about
recycling include the sense that labor costs for separating waste
and recycling are prohibitive, and that recycling is a low priority
in a business workplan. Mr. Janus countered those arguments by
saying that labor costs are mini.al if all employees separate their
own recyolables from their 9arbage. Recyclinq can also be profit
ab~e tor a co.pany be~~use it can cut down on waste disposal costs
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by decreasinq the quantity of qarbaqe bins and minim.izing the
number or pick-ups. Larqer-companies JlIay generate-revenue from
.elling recyclable materials. A recycling policy also projects a
qood comPany image, especially in a city such as Palo Alto, which
empha5izes environmental issues.
The City's commercial Recyclinq Program offers assistance to
buainesBe~ to make recyc1in9 convenient and inexpensive:
o Consulting services: City staff will visit company
sites s examine the waste content, and suggest what items
co~ld be economically recycled;
o White paper recycling: PASCO~ the city's qarbaqe
contractor, will pick up 'White paper from companies.
Bins can also be rented for the pick up of cardboard.
(Note: cardboard accounts for approximately 30 percent
of commercial waste qoinq to the landfill. Cardboard can
also be sold to brokers if it is ~aled. For a company
that generates 2 to J tons of cardboard monthly, the
purchase of a baler may make economic sense.)
o Glass collection~ elROD, a local company, provides bins
to businesses that use glass. They collect the bins when
full and pay $5.00 for ~ach bin load.
Kr~ Janus concluded his presentati~J by encouraging companies to
evaluate their waste stream and to realize that they can make a
difference in the city"s qarbaqe situation. He eUlphasized that the
City was available to assist them in recycling.
A question was raised about recycling polystyrene. councilmember
Gail Woolley stated that the City had originally planned to enact
a ban on polystyrene use" but was approached by a company that can
recycle the material. A pilot program has been initiated, and
there are nov four locations in Palo Alto with recycling bins for
po~ystyrane: the Recyclir.q Cante.r ~ Cubberle}"· commu.nity Center,
ONAS (901 California Avenue), and Hewlett-packard corporate
Headquarters (3000 Hanover). Free-Flow Packaging Corporation will
collect and recycle the materials. Hr. Janus noted that polysty
rene accounts for only 7 percent of the waste stream by weight, but
up to 18 percent by volume, and thus iii a major contributor to
waste problems. Edie corosin commented that recent press stcries
about the recycling proqraJI made it appear that all sort!'! of
polystyrena, including tood contain@rs, could be recycled at these
locations. She expressed concern about contaminants ruining the
rest of the polystyrene. Councilmember Woolley clarified that all
polystyrene should be clean, and that the program was mainly
targeting paclcaqing .aterials. Signs to that effect are poe:t,ed at
the recycling sites.
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Councilillember woolley also noted that Council was considering
adopting an inverted rate 8tructu~e for the City's garbage rates
such that the first garbaqe can is collecte~ tor a nominal fee and
subsequent cans are more axpensive. This would encouraqe house
holds to recycle .a a means of keeping their qar~qe r~tes lower.
Pont.on hviroU9pbl ActioA Pro1.ct {DIU)
3i. Baer discussed the experiences of the OOwntovn Environmental
Action Project, a. coalition of downtown businesses and buiidinqo
owners involved in a resource conservation program. Chop Keenan
raised the issue of recycled materials bei~ dependent on the
market for the~_ Mr. Saer agreed that the market-based element
made it difficult for small businesses to recycle. The valUe ot
the CODImodity is so 10--" and the cost of labor is so high that many
businesses are unable to accomplish recycling. That 1s the basic
pr8lllise behind DEAP: a single building cannot generate enough
recyclables to warrant a pick-Up, but seve~al buildinqs together
can. However, ev~n with good City 5upport l good local awarene5S~
and an excellent operator at PASCO, recycling is still often ill
losing propoSition aconomically.
Mr .. her eDphasized the role that the landlord should play in
assistiDq tenants to recycle. xany employees are asking their
managers why recyclinq is not happening.. The tenahts in turn are
asking the landlord. The landlot'd may neec to subsidize a
reeyclinq program by purchasing bins. The landlord can also
encourage recycling through cont~ct5 with the tenants and the
offices occupying business space.
Tbe DEAP project has placed new locked recycling containers
throughout the downtown area.. The bins hanQle glass, newsprint t
al\llliinum t white-paper and cardboard. Earlier bins 'Wer-e not lOCked,
and scavel19ing, especially of aluminum, has OO':!curred extensively in
the past.. i'he bins are noW' secured so that the group can accurate
ly identify the quantity of materials collected and achieve an
economic break-even point for the collection.
The issue of white paper recyclinq was discussed. High-quality
white paper (computer and ledqer paper) is werth $220 per ton wben
recycled. Standard white paper is worth $100 per ton and newspaper
ia worth $5-1D per ton~ It is difficult to qet people to separate
their recyclablas appropriately, and much contamination occurs
throuqh colored papers, post-it notes, etc. The idea was raised
that it -ay make .ore economic sense to recycle only white p6per
and throw the rest away. The economic factors are a reality for
businesses.
Mr .. Baer said the OD.P project has had many difficulties, and
cannot yet be classified as a success. Businesses have been veri
cooperative, but still there are problems. Many recycling bins get
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contaminated by residents throwinq in garbag$ .nd ru1ning the whole
load. Pick-ups are expensive because a •• parate truck and ere .. is
required for picking up the different itews. It bins could be
consolidated and .hared by Blore busin .... e.... the program. could
achieve some savings. The idea vas r •. i.ed of focuainq efforts on a few tenants to qet them to recycle -perfectly-.
The CEAP project has established thirteen 4ovntown precincts. Mr.
Baer thought that these same precincts could be used in the future
for other programs such as enerqy and vater conservation. He has
already been in contact with the City utilities Department about
this. Awareness and willinqness levels ar& enoraous. The project
bas a very high level of participation l but current .arket levels
may not ~ake it cost-etfective.
City of 'alo Alto Procure~aDt Pol Ie! ••
Libby Dame qave a presentation on the city of Palo Alto's p~ocure
ment policies tor recycled products ~ Some. tiae a90 the City
realized the market-based element of recycllnqt and realized that
the critical final step in the recyclinq process was to utilize the
recycled materials in new products. The City had lonq 8qo
established effective residential and commercial recyclinq programs
.for co.llectill9 recyclable mater-ials. The next 1og1co8l step for the
City was to help establish a aarket for product$ .anutactured usinq
recycled Baterials. The City actually had a very good record for
vaste reduction and purchasinq recycled products, ~t nothinq was
formalized. council asked staff to develop a policy tor the
procurement of recycled products. council felt that it was
important for the city to set an example for local businesses and
res.idents t and to send 8; messaqe to inclustry that recycled products
are pre! erred..
Staff developed two procurement policies: one for paper products
and one for all other items. Discussions were held with other
local governments to share experiences and ideas~ staff found that
most entities have only paper policies; many 'Were 'Wc-rking on
developing Dore extensive policies~
The procurement policy for recycled paper and paper products was
approved J::Iy Council in July 1990. The policy establishes a 10
percent price preference for goods containing at least SO percent
recycled paper content~ The California standards for defining
-recycled-are adhered to, 'With a requirement for at least 10
percent post-consumer recycled content~ Ms. Dame said that staff
has seen positive chanqes in the paper industry in the past several
I1Ontbs, most likely influenced by policies such as the City's.
Previously, only a sinqle paper vendor for the City carried
significant amounts of recycled paper4 Now the 5 or 6 main paper
vendors are all carrying different stocks and increT.l.3inq their
inventorles~ Prices have dropped, reflectinq the fact that
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competition has increased. Prior to July I general all-purpose
recycled paper was 10 percent more expensive than virqin paper; in
October the dift~rence dropped to 6 percent. Colored recycled
papers range from 6 percent to 19 percent hi9her, but the City is
beginning to see a qreater variety of colors and textures. Coated
glossy papers are also appe.aring, but the industry is still
s~ru99"li"9 with probl ...... of print quality.
An ordinance enacting a procurement policy tor all other recycled
content items was acSoptt=d by Council in october.. 1990. The
ordinance established a 5 percent price preference for items
containing recycled content. Council encouraged staff to purchase
recycled, reusable and recyclable products whenever such an item
would .e.et the City's requirements and. specifications for that
p~oduct, and within the constraints of staff time and cost factors.
No additional staff vas added to enact either of the procurement
policies. City staff will review all specifications for items to
be purcbased to ensure that they do not exclude the use of recycled
products.
EIIily Harrison led II brief discussion on the local economic
environment. Tbe state's 15190-91 adopted budget will add addi
tional e~pense$ to the City of Palo Alto of between $500,000 and
$800,DGO. With the pass{ng of a recent Senate bill, counties are
now allowed to i:apose fees on local agencies for the costs of
property tax: administration and for booking prisoners at the county
jails. This may be ill precursor to the state passinq on other costs
in the future. In January 1991 Palo Alto will receive a retro
active charqe: from Santa. Clara county for the collection of
property taxes since July 1990.
The general economic environment has experienced a slow-down, with
a 2 percent decrease in sales tax revenue in the first five months
of the ~iscal year. This is especially significant since the staff
projected II. 7 percent increase in sales tax for 1990-91. Rosemary
McAndrews stated that stanford Shoppinq center saw a 1 percent
increase in calendar year-to-date sales as of october 6 a hopeful
siqn that the dClwnhill trend has not been as hard for the stanford
Shopping Center a Ms. Harrison noted tha.t Stanford Shopping Center
accounts for approximately 25 percent of Palo Alto's sales ta.x
reven"d.e ..
On June 30, 1991 the City's G&nn Limit override authority will
expire. This $5.5 million override authority allowed the City to
spend the: proceeds of the utility users tax without exceeding its
Gann spending li.it. Proceeds from the tax \;lere target.ed for
1:aprovements at CUbberley School and other school district leases,
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and for Itreets and sidewalks. The City Council intends to place
• JIIeasure on the November-1991 ballot asking voters to approve
anothsr override to the City" s Gann Limit.
Ken Schreiber, City Planning Director, talked about City revenue
analysiS, land use and redevelopment options. For 1990, the
Finance and Public Works Committee established priorities that
included: 1J opportunities fGr redevelopment in Palo Alto; and
2) the relationship of land use regulations and City revenues.
staff's study of redevelopment concluded that there are no qood
opportunities for redevelopment in Palo -".lto, with the only
potential exception beinq the ULban Lane Area (between the Holiday
Inn and Town' Country village). Staff recommended that the City
not pursue such redevelopment at this time; the Planning Department
will conduct a special study of the Urban Lane Area to determine
appropriate future use l development and public improvements.
COUncil also directed sta.ff to do a study on Land Use and city
Revenues, with an emphasis on commercial areas. Mr.. Schreiber
stated that l up until the past few years l council's stance has been
that it was not appropriate to evaluate land use from a revenue
standpoint. In the past few years, in light of budget cut:s,
Council has shifted its view and now considers land use revenue
analysis to be a pri~rity. In conjunction with zone changes, staff
will evaluate if it would be appropriate for the. City or the
applicant to provide a study of the inpact of development proposals
on City revenues.
staff developed a request for proposal for a lana use economist to
evaluate the City's land use. The consultant will identify areas
that offer potential higher revenue yields and det ine lirihat types ot
actions (within the context of Comprehensive Plan policies) would
be necessary to realize higher revenues. The study will incluae El
camino, neighborhood shopping centers, California Avenue, Town ,
COUntry Village, and urban Lane. It also will evaluate the
potential ef"tects of the expansion 1 imi t placed on Stanford
Shoppinq Center,
Hr. Baer .end Mr. Keenan emphasized the interest of local real
estate business people in being involved in the study at more than
just a public hearinq level. The local landlords have a lot of
e¥pe:rience, knowledge and stroIl9 opinions regarding the issues, and
could offer insight and assistance.
MS. Harrison then updated the group on the Stanford Research Park
outreach effort being directed by the Finance and Planninq
Departments. staff is conducting extensive 2 to 3 hour interviews
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with mast ot tha bu~ln9ases in the Park. She expects the int~r
views to be completed by the end ot January. staft vill prepare a
report ot the findings early next year.. Probably the major impact
the .tu~y has bad en the Park 80 far is just making contact; the
busln ... e. appreciate the openinq of the lines of communication
betw.en the city and the Stanford Res~arch Park.
The topic for the next :aeetinq will be a discussion of Mayor Cobb's
economic outreach efforts. Next quarter's meetin9 will take place
in Pebruary or March.
Minutes prepared by Libby Dame, Senior Financial Analyst.
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