COUNCIL DISTRICT: City-Wide
Approval of an ordinance granting a Commercial Solid Waste and Recyclables Collection Franchise and approval of a Commercial Solid Waste and Recyclables Collection Franchise Agreement with:
· All Points Roll-Off, Inc.
The City of San Jose has traditionally had an open market for the collection of recyclables and rubbish (solid waste that does not contain food waste) from businesses, institutions, and other non-residential properties. Since 1995, the City has also allowed open competition for the collection of commercial garbage (solid waste that contains food waste). While open systems for commercial solid waste collection are rare in the Bay Area, they are typical for large North American cities. Examples of other cities that allow open competition for commercial solid waste collection include Los Angeles, San Diego, Sacramento, Portland, Seattle, Vancouver, Chicago, and New York.
Private haulers compete with each other on a customer-by-customer basis to provide solid waste and recyclables collection services to San Jose businesses. Collectors of source separated recyclables are required to obtain a San Jose Business Tax Certificate. Haulers that collect commingled recyclables and/or garbage are required to obtain a San Jose Business Tax Certificate and a Commercial Solid Waste and Recyclables Collection Franchise. There are currently twenty-five (25) franchised commercial haulers. Some of these franchised haulers also provide temporary debris box services to San Jose residences and construction sites.
The franchise grants the holder the right to compete with other franchisees to collect solid waste and commingled recyclables from non-residential properties in San Jose, and to provide temporary debris boxes services to residences and construction sites. The franchise does not guarantee that the holder will obtain any San Jose customers. Franchise holders are free to compete throughout the entire City and are not limited to districts. The franchise authorizes the holder to perform collection services only and does not constitute permission to operate a solid waste facility or recycling center.
The City provides no compensation to the franchised haulers. The franchised haulers receive compensation directly from their customers. Service charges are agreed upon between the hauler and the customer and are influenced by direct competition between haulers. The City does not regulate these charges. Commercial customers are free to choose the franchised hauler that offers them the service that best meets their needs
Franchised haulers pay franchise fees to the City based upon the volume of solid waste service that they provide to San Jose customers. Franchised haulers also collect a Commercial Source Reduction and Recycling fee (AB939 fee) from their San Jose customers and remit this fee to the City. The AB939 fee is also assessed on the volume of solid waste service that a customer subscribes to (bin size multiplied by frequency of collection). There is also a franchise fee assessed on the collection of mixed recyclables, but it is currently set at $0 (zero dollars) per cubic yard of service. Recyclables collection is not subject to the AB939 fee. Exempting recyclables collection from these fees provides a financial incentive for commercial haulers and their customers to recycle by decreasing the cost of recyclables collection relative to garbage collection.
ANALYSIS
Chapter 9.10 of the Municipal Code and the City Charter require that Commercial Solid Waste and Recyclables Collection Franchises be granted by ordinances of the City Council. Approval of the proposed ordinance will grant a new non-exclusive Commercial Solid Waste and Recyclables Collection Franchises to All Points Roll Off, Inc. for a term beginning July 1, 2001, and ending June 30, 2003,. with three, one-year extensions to the agreement executable at the sole discretion of the Director of Environmental Services. Nothing will obligate the City to exercise these options.
All Points Roll Off Inc.’s initial application was received incomplete. The application, check and envelope were returned with a letter describing why a franchise agreement would not be processed at this time. They were encouraged to complete the application and resubmit for processing at a later date. In addition to being submitted incomplete, the application was submitted on March 15, 2001, seven (7) weeks after the January 26, 2001filing date.
All Points completed and re-submitted the application. All Points has a current San Jose business tax certificate and has submitted the required application fee. Staff has reviewed their application and has found no reason why they should not be awarded a franchise at this time.
In accordance with San Jose Municipal Code section 9.10.1650, the City Clerk published a notice in the San Jose Post Record announcing a public hearing at the June 12, 2001 Council meeting regarding All Points Roll Off’s franchise application.
COORDINATION
This memorandum was coordinated with the Office of the City Attorney.
COST IMPLICATIONS
All Points has paid the $195 application fee as required in San Jose Municipal Code 9.10.1670. All Points will pay the General Fund a franchise fee of $2.84 for every cubic yard of solid waste service provided above the 24,600 cubic yard exclusion allowed for each franchised hauler. They will also remit to the City an AB 939 fee of $1.00 per cubic yard of service provided, which will go to Fund 423.
CEQA
Negative Declaration, File No. PP92-11-308.
CARL W. MOSHER
Director, Environmental Services Department