What’s next for organics law compliance?

Golden Hills Community Services District directors recently increased residential trash collection rates by more than 47% beginning in March, and Kern County is still wrangling with its plan to mandate service in rural areas with fees to be added to property tax bills.

City residents can expect a third can for organics — and likely higher rates — in the coming year.

The city contracts with WM (formerly known as Waste Management) for solid waste collection. Assistant City Manager Corey Costelloe said last week that it is working on a new franchise agreement with the firm to address the requirements of Senate Bill 1383.

“As with every jurisdiction mandated to provide organic service, there will be a rate increase to cover the cost,” Costelloe said. “We have not finalized the proposed rates but will soon.”

Like the county, the city

must go through the Proposition 218 process to increase the trash rates.

“There will be a presentation to (the City Council) with proposed rates,” he said. Proposition 218 requires a 45-notice to property owners and a public hearing at the end of the notice period. The council can increase rates unless at least 50% plus one property owners object.

Costelloe did not say when he expects the City Council to authorize the Proposition 218 notification process. It was not on the agenda for the Dec. 4 council meeting.

CITY REFUSE FUND

The city manages its finances related to solid waste through its refuse fund.

On June 20, 2017, WM took over for Benz Sanitation when it acquired the company that previously held a franchise with the city.

According to financial statements, the city had received a 6.5% service fee from Benz, but the contract with Waste Management increased the service fee to 10%.

“The 3.5% service fee increase helped pull the refuse fund out of a previous operating deficit,” according to a report for the fiscal year ending June 30, 2018. At that time, the refuse fund’s net gain — or balance — was $19,298.

The fund had a net gain of $1,536 the next year, with the city noting that it receives 10% of total refuse and recycling service revenue from WM for accounts coordination and billing and collection services provided by the city.

On July 1, 2019, the city increased refuse and recycling fees by 3.71% and as of July 30, 2020, the net position of the refuse fund increased by 6% from $92,502 to $98,480 — a total of $5,978.

The financial statement for the year ending June 30, 2021, reported that refuse service fees were increased by 3.01% in July 2020, resulting in a 2% increase in the net position of the refuse fund to $100,016.

In July 2021, refuse service fees were increased by 3.35% and by June 30, 2022, the net position of the refuse fund increased by 37% from $100,016 to $137,265.

But the five-year current budget, approved by the City Council in June, projects more than $100,000 deficit in the fund this fiscal year, with smaller but significant deficits in the next five years.

The city can be expected to attempt to cover those deficits — and any increase related to the third organics can requirement — through a rate increase.

PROPOSITION 218

The Golden Hills CSD did not go through the Proposition 218 process for the trash rate increase it put in place at its Nov. 15 meeting.

The board enacted the increase pursuant to the “special circumstances rate adjustments” clause of its franchise agreement with the J. Torres Company.

The CSD board approved an earlier rate increase in February. At the time, General Manager Susan Wells said the increase was in line with the future increase policy approved through the Proposition 218 procedure on March 1, 2019.

It is not unusual for local agencies to use the Proposition 218 process to seek approval for rate increases over multiple years, typically supported by rate studies completed by consultants.

OTHER JURISDICTIONS

According to Lisa Shreder, assistant director of Kern County Public Works Department, Bear Valley uses its own transfer station — but with county franchise haulers — and has made arrangements directly with CalRecycle to implement SB 1383.

Shreder said that Stallion Springs CSD is in a Census Tract with a low population density waiver and is not mandated to provide SB 1383 services. At a meeting of the district’s Board of Directors on May 23, General Manager Vanessa Stevens said the district has a five-year exemption from requirements of SB 1383.