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Home My WebLink About0162.092- • 41-... ;.z!.~ .• ~. . . . ..."., '. ,~: .' ... February 20. 1'992 THE' HO!'WRABLE err!: COU~';CIL Palo Alto l California Members of the Council: E.ru2.9.:rt in Brief This report recommends that Council oppose a proposed increase of $1.0 per ton to the city of San Josets busii'1.E35 tay. cr.arg8!d on each ton of refuse disposed at landfills located in San Jose. The impact on Palo Alto Clf the pY"opc-sed increas,," t"o the Landfill Business Tax will cost Palo Alto approximately $.5 million per year. Background The city of San Jose at one time ,had an ordirance .forbidding the importation of refuse from outside its City 1imits for disposal at landfills in San Jose. This ordin,=mce ~:as ch,~lle[lged in court by landfill operators i~·l San J03E. Altho",gb the ;:".3ttE'X "",:as appal:~ntly never fully resolved by the courts, San Jose repealed the importation ban ordinance in 1988/ at ~t,/,.'hich tiDe Several cities, including Santa Clara, Mountain View, C~pe[tina, Los Altos and Las Altos Hills began transporting waste to landfills lc.'cated in San Jose. At approxiTIately the same ti~e it repealed the ordinance, San Jose implemented a Landfill E~siness Tax. This tax is paid by the 1-~dfil1 operatcrs, who then pass it alcng to their custo~ers. The c~cies of Palo Alto, E0~nca[n Vie~', a~d SJnny~ale ~ave entered into long-term disposal 2.~re-=cej.t5 ,., .. it.h ',.:·:.ste ~1:al1ag'2,"er.t cf North America Incorporated (\·.~·n) fc'r ~anjfill c.:;;.pacity at the Kirby Canyon Landfill {CMR:439:91, Oct'C:'ber 7, 19S'1). starting in July 1993. The agr-eernent ",'ith \>.lH allo',,'s certain fees and taxes to be "passed through" and added to the a;:-,ount per ten for disposed. At its present level ($3.00 pe::r ton) r the SeH, 30se Business Tax is similar to the $2.28 per ton r'Host feel' that Sunny~31e will charge Mountain View and Pa::'o Alto a'ger-:cies for refuse they deliver to the SMaRT stat ion start ing in Ju Iy 19!J). ",';heJl "taft presented cOllnci 1 -wi th the lcng-tenn d ispos,~ 1 agr-ee;"":"e?"'lt ;,.'i tr. 1r:j\~I, the costs in the agreement included $3~DO per ton fer Sa~ Jose's landfill business tax. -1- CHR:162:92 , • - '-: ,.~.<; -; · ~~, ...... St!".",,,, - In addition to tr.e Landfill B'.::sL~1e.S-3 Tax, Si'lr~ Jo~e pY"es8ntly charges t·,.ro other-tonnagB ba.~ed disp2s-::tl fees. The fits':. fee, currently $D.20 p8r ton. is called the "San ~T:JSE: rl'2allh Fl1forcement Fee,n and is intended to fund the San Jose environment~l health enforcement activities related to selia ;""ast.:. ',-:hile:l. portio.n of this money is spent on landfill-related e~forcernent, it also funds activities related to litter c':)ntrol in nei,~·hbot"r.o0ds and other San Jose programs. This fee is expected to i~crease for F~ 1992-93 (unknown amount). The ather current fee is called the "AS 939 Fee,n whi~h funds San Jose !mple~e~tdticn 8~ the s~ate legislatia~ requiring reductions in the ancurt af ~a3tE la~dfil~ed fro~ each jurisdiction. This m::r.ej' is a~'E='j.rentl'/ SFe:1t. on AS 539 implement.ation within the City ::If San )D:"~ ~r,j pro··:Li-:s no l:e.""lefits to the other jurisdictions importing ~3s:e and payirg the fee. On February 12, the Finance Co:'"".rittee of the Cltv of San Jose considered a consultant report that discus~ed pcssib~e additional revenue sources for the City of San Jese. The consultant stated that a ~andfill B~siness Tax increase of SlO.OO/ton ~auld bring an estimated additional $11.5 rillicn an!lually to tr:e city. Tr.e consultarlt also stated that this t.:x could be ir-Icreased incrementally t':l as ;nuc;h as $3:::'.o·'::'it,::n :oS ['.1ture tonnages to landfills in San Jose decrease. The Landfill Busi~ess Tax funds ~re not ear~arked fo~ solid waste pro9ra~s. revenue source for San Jose General f'u~Jd. referred the consult3nt report to the Sa~ conside.ration at their .Febru:;;r·y :2 3 r.18cting. tut as an additional The Finance co~~ittee Jose City cou~cil for The Landfill Business Tax increase proposed by the City of San Jose will place an additional financial burden on the Palo Alto Refuse Fund. Staft did preliminary financial calcL:lations usii"1g the tonnages cOTilrnitted to }:irby CZ111ro~ fro:7. P:ll-o .!l.lta sta;:-ting in July 1993. The impact of this in,::rE't:;;se lr. t.he fir-st yea:--of the agreeMent ~ould be an add~~ion~l $2S:,E0C. or app~cxj~ately a J~ perce~t increase over the orig!nal ~:oj€ctio~s for t~e disposal agreement. Increases to t~e prGPo~sd $lC.OO ~er ton, the cost to Palo Alto over 28 yea:.-s~ · .. :ill t,e $1:;.c=. ~illi::'r: or an p-verage of $506~OOO annually. The City of Santa Clara city Cour,;:.l!. vl:)ted to oppose this tax increase on February 11, and s2nt a lett'2r to the City of San J,:lse; the cities of sunnyvale and Po; Ipit3s took si:rclilar actions on Febr'Jary 18th. It is cxpecced 'that the tala;-)ce of cities in Santa Clara County who dispose a~ landfills in Sa~ Jose will take 5i~ilar actions. Recommenda t. i on S'taff recommends that Coune i 1: ~2- CMR:162 :92 , .. 1. Oppose the proposed in·:::rease to the-San ':cse 9'...lsiness Tax due to the signitica.nt fi:1a:l;::i3.1 i:-:'·p,)'cts c.r. the Pale, .h.lto ra-:e pa.yers. and,· 2. Direct the City Manager 8r his d~siqnee to attend the City of San Jose Council }1eeting on February 2'3 to trans:-nit our council's opposition to the $10/ton increas~ on the Landfill Business Tax. Respectfully sLl.~-rnitted, yY~~ MICHAEL H. ~ILLER Deputy Director. Public Works Operations DAVID G •. !,.DAMS Director r\ CMR,162;92 -3-