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Minutes 1994-03-15 242' ARROYO GRANDE CITY COUNCIL AND PLANNING COMMISSION MARCH 15, 1994 The Arroyo Grande City Council and Planning Commission met in a special session with Mayor Gallagher and Chairman Carr presiding. Present are Council Members Burke, Brandy, and Souza and Commissioners Soto, Reilly, Deviny, Hatchett, and Keen. Absent were Council Member Moots and Commissioner Tappan. Staff in attendance were City Manager Chris Christiansen and Planning Director Doreen Liberto-Blanck. ORAL COMMUNICATIONS - None NON-PUBLIC HEARING - CAL POLY, CITY AND REGIONAL PLANNING, PRESENTATION ON ALTERNATIVE PLANNING CONCEPTS FOR ARROYO GRANDE - MRS. ZEWKA BILBIJA AND CAL POLY STUDENTS Mayor Gallagher introduced this item and invited Mrs. Bilbija to begin the presentation. Mrs. Bilbija began by conveying the appreciation of the students and instructors for this opportunity to demonstrate what the students have been learning. She stated that the participating students are enrolled in the third year of their undergraduate studies in the City and Regional Planning program and the class is called Planning Laboratory. Mrs. Bilbija said the class is designed so that it simulates the preparation of a General Plan for a Catifornia community, and this year the subject has been Arroyo Grande. She then gave a brief overview of the preparation and presentation and introduced the Master of Ceremonies Rod De La Rosa. Mr. De La Rosa stated that with the information they have collected since September of 1993, they have developed two alternative General Plans forecasting to the year 2020. The first plan, Scenario I, "Planning for a Viable Future," uses the moderate and conservative growth area. The second plan, Scenario II, "A Vision for a Better Future," is more progressive, emphasizing a pro-active approach. Mr. De La Rosa then presented a video of Arroyo Grande, which was prepared by Roy Ronemoto, Jeff Addison and Mike Home. Scenario I was then presented by Kwame Reed and Sandra Shaw. Erika Perez-Rubio and Wayne Maden followed with Scenario II. After the presentations, students were asked various questions by the Council and Commission. Mayor Gallagher and Chairmen Carr extended their appreciation, recognizing the time and effort afforded by the students. The consensus of the Council and Commission was expressed with a hearty applause. PUBLIC HEARING ITEM - AB 939 - STEVE A. DEVENCENZI, SOLID WASTE PROGRAM MANAGER, SLOCOG, 1. SOURCE REDUCTION AND RECYCLING ELEMENT (SRRE), 2. HOUSEHOLD HAZARDOUS WASTE ELEMENT (HIIWE), 3. ENVIRONMENTAL IMPACT REPORT (EIR) FOR SRRE AND HHWE, AND 4. DRAFf JOINT POWERS AGREEMENT Mayor Gallagher introduced Steve Devencenzi from San Luis Obispo Council of Governments (SLOCOG), who stated he would attempt to provide a brief summary and answer questions. . . 243 Arroyo Grande City Council and Planning Commission Page 2 March 15, 1994 He added that a meeting was going to be held March 16, 1994 with all the various attorneys and the legal committee for the Council of Governments to look over aU the changes that have been proposed. He indicated that the City Attorney for Arroyo Grande would be in attendance. Mr. Devencenzi further stated that they had a memorandum of agreement currently in force regarding the tipping fees and that they were proposing to replace that with a similar, but much more simplified, agreement which the attorneys will be reviewing. Mr. Devencenzi. stated that the City is a responsible agency, and that the Council of Governments is the head agency and will certify the EIR. He gave the scenario that if Arroyo Grande had a future population of 50,000, and a collection facility site was proposed within the City, the City would be the lead agency for that facility. Environmental review would occur at that time for that facility. Mayor Gallagher asked if COG would be supporting that financially. Mr. Devencenzi responded yes and explained that if they proposed a particular site in Arroyo Grande, that the City would be the lead agency to permit that particular project. He further discussed this aspect of the program. Mayor Gallagher asked jf there was some legislative activity going forward so the City can get some State or Federal support for source reduction for manufacturers. Mr. Devencenzi stated that the original legislation called for an advance disposal fee that the State of California would impose on manufacturers depending on the waste that came with their product. He said this was found not feasible. He further stated he did not see any movement to proceed in that direction. Mr. Devencenzi added that source reduction education was helpful in this area. The Mayor then mentioned the $750,000, which was impounded for the educational and promotional activities. Mr. Devencenzi said that the first priority of the regional agency was to move on the educational component to increase participation. Mayor GalJagher queried him regarding the penalties issue. Mr. Devencenzi stated that if the City showed good faith in moving ahead with the program, it would probably not be levied. Commissioner Soto asked whether there is a tracking system to determine whether the program is effective. Mr. Devencenzi cited that at the landfill the company is required to ask where the items are coming from, and the recyclers are required to keep records. Commissioner Soto inquired about oil reclamation. Mr. Devencenzi stated that the County is required to maintain those records. Chairman Carr asked whether we will get credit for existing efforts. Mr. Devencenzi stated yes. Mr: Devencenzi said that last year the law was changed to allow for regional agencies to be formed to handle all the programs, and pool credits. He said they would apply to the region, not just broken down by cities and county, and if the region meets the goals, they don't really care whether Arroyo Grande is 22 % and Grover Beach is at 27 % . He further explained that through the Joint Powers Agreement, some Janguage was included to meet the minimum requirements so that the Waste Management Authority can act in that capacity. Commissioner Soto mentioned that the residents should be patted on the back. Mr. Devencenzi said that a recent article in the paper a couple of weeks ago highlighted this issue. -- 244 Arroyo Grande City Council and Planning Commission Page 3 March 15, 1994 Mr. Devencenzi then pointed out different aspects of the Household Hazardous Waste Element. Commissioner Soto made the statement that hazardous wastes shou,ld be less of a problem now because of the new laws regarding chemical manufacturing, and asked if that was really true. Mr. Devencenzi answered that he would like to think so. He added that the educational factor should also help in this area. He said people would begin using alternative products to accomplish the same ends and whatever hazardous materials they would have would be disposed of properly. Chairman Carr "asked where the funding would be coming from on this program. Mr. Devencenzi responded the funding they are currently operating from is the money mentioned earlier in the meeting, including tipping fees at the' landfills. Chairman Carr asked if the hazardous waste program was funded from the tipping fees. Mr. Devencenzi answered yes. However, whether or not the current level of tipping fees will be adequate to fund the hazardous waste program in the future is yet to be seen. He further advised that the existing memorandum of Agreement specifies that the Council of Governments is only to be involved with the planning function, not implementation. Mr. Devencenzi stated that the amount currently being collected as tipping fees is $3.00 per ton, and has been going into the AB 939 Trust Fund at the County Auditor Controller's Office. He said the amount generated was over $800,000. Mr. Devencenzi stated that a memorandum will be forthcoming that will recommend that the monies be moved over to a trust fund that will be available to the Authority. The Authority, when established, will have those funds to operate. He further stated that the educational activity was the first priority. Mayor Gallagher asked how does $3.00 per ton appear on the local citizens monthly bill. Mr. Devencenzi responded that $3.00 per ton translates to less than 20 cents on a monthly bill to the citizens of Arroyo Grande. The Mayor asked whether he anticipated a significant increase in the monthly bills as the program progressed. Mr. Devencenzi answered that he would anticipate some increase, but not a significant increase. Mr. Devencenzi continued that the monies in the fund at this time should provide the Authority with enough funding to operate for a couple of years without increasing tipping fees. However, if there was a need for a facility development of any kind, it is anticipated that those facilities would be structured so that the rates to utilize those facilities would pay for them and would not involve this type of add-on tipping fee. Mr. Devencenzi said that it was difficult to say for sllre at this time, and that even if the tipping fee was doubled right now, it would still mean a cost of less than 40 cents per month on a monthly bill for the average residential user. Mr. Devencenzi gave an example of a preliminary budget they did on the Household Hazardous Waste Program. It would cost approximately $230,000 per year on a County-wide basis, or less th~n $1.00 per person per year. The Mayor asked if there was any concept to enhance the participation level of local communities in the educational component, such as rewards for sorting, pointing out that the only motivation other than good will, is economic. Mr. Devencenzi answered that they recommended rate structure modifications along exacUy the same lines as the Mayor had described, but it is a local jurisdictionaJ issue. He then gave examples of this type of thing being done in some cities. However, he stated there were costs involved, bookkeeping problems and so forth connected with it, but that the end result is that it works well. 245 Arroyo Grande City Council and Planning Commission Page 4 March 15, 1994 Mayor Gallagher said that at the last presentation it reflected that Arroyo Grande's population seemed to support the smaller, more limited user. Mr. Devencel1zi responded that the same problem occurs when there is a drought and everyone drops the usage and then rates are raised the rate because of fixed costs that must be paid. Commissioner Soto asked how long it took to collect the $750,000 and what is the annual tipping fee. Mr. Devencenzi answered by stating that when this program started, it was estimated that it would run about $750,000 for a three year program considering consulting expenses to do the plan, overhead, and so forth. They set a $1.00 per ton tipping fee. The County General Fund put that money up front and, after about the first nine months, the County realized that amount was not going to repay it at the rate it would like to be repaid, so an additional $2.00 was added on top of it, therefore we currently have a $3.00 per ton tipping fee. The County has been repaid its $750,000 and there is now about $900,000 accumulated in the fund in a 3-112, almost 4 year period equaling about $200,700 per year. Council Member Brandy raised a concern that there did not appear to be any allocation of funds to support local Staff time. He further asked whether the City would receive a larger franchise fee to supplement our General Fund to pay for this expense if tipping fees increased. Mr. Christiansen stated that the gate/tipping fee today at Cold Canyon is about $24 to $25 per ton and of that amount there are fees going directly to the State for its program. Mr. Christiansen went on to say that for every dollar that the tipping fee goes up, this jurisdiction must boost its rate at about 30 cents. However, he stated, the franchise then increases also. Commissioner Brandy asked when negotiations for franchise fees would be occurring. The City Manager responded that they were negotiating with them at the present time. Council Member Brandy then asked whether the City can raise the franchise rate when we negotiate with them and they want to raise our rates. Mr. Christiansen responded in the affirmative. After further discussion on this issue, Commissioner Brandy summed it up that the franchise fees (5 % franchise fee) currently being collected are going into the General Fund and we are spending that money on our 1993/1994 budget already, which then does not take into account the Staff time that it will take to implement recycling and other programs being implemented by local government. He asked how the City will pay for implementation required by the proposed programs. Mr. Devencenzi referred the Council and Commission to a table on page 1-10-14 of Volume 1 and referred them to FF, which stands for Franchise Fee. He stated that it is the COG staffs recommendation that some of those activities be funded from those sources. He said that some jurisdictions dedicate a portion of their franchise fee clearly to Staff for waste-related purposes and some simply put it into their General Fund. Mayor Gallagher raised the issue regarding purchase of recycled materials, wherein virgin material is now less expensive than recycled paper. Mr. Devencenzi agreed. Commissioner Soto, referring to what Council Member Brandy said, asked if the main items were to be education at a local level, household hazardous waste, and composting that would be paid for from the General Fund. Mr. Devencenzi answered in the negative, in that these were aU going to be in the regional planning through tipping/gate fees. He said that although an Authority does not exist at this time, he anticipated that when it comes to accomplishing these, ! u 246' Arroyo Grande City Council and Planning Commission I)age 5 March 15, 1994 it will be studied at a regional level as to what is appropriate, what is cost effective, and therefore what is the best project to pursue. He gave a scenario of a site on Nipomo Mesa, which would cost $3 million for land, building, and operational cost, The jurisdictions that dedicate "their waste streams will have to make some commitment to that facility, so that they can proceed with the actual construction, which would probably be a bond or revenue finance. He said Arroyo Grande would commit its material to that facility and direct its hauler to take the material there. He stated there will be a fee to use it and that fee will pay for it, and that fee will be replacing the fee Arroyo Grande spends now at the landfill. Mr. Devencenzi ended this item by stating it was not simple and he did not have all the answers at this time. He said the monies would not be coming out of the City's General Fund. Chairman Carr asked if he considered that the scenario he just described would be a no net cost to the City in that anything it puts in up front it would get back later. Mr. Devencenzi responded that the tipping fees would probably pay for all the up front costs. Chairman Carr said that what Mr. Devencenzi meant by a commitment was not then a financial commitment, but rather a commitment to use the facility, to which Mr. Devencenzi responded in the affirmative. Mayor Gallagher asked Mr. Devencenzi where the money would be coming from as outlined on pages 111.7.3,1-3-23 and 1-3-24, and Table 3-5. Mr. Devencenzi answered that the tasks that would be done by the City would run about $5,400 in a given year, in addition to a certain amount of existing Staff time. Council Member Brandy said that as you look at the other Tables, it appears the program requires a person to do this job full time. He mentioned items such as recycling, drop-off centers, multi-unit mobile home and group quarter recycling programs, commercial cardboard recycling, bar and restaurant glass recycling, and so on. Council Member Brandy asked Mr. Devencenzi for a bottom line figure of what it was going to cost the City of Arroyo Grande to implement this program out of its General Fund. Mr. Devencenzi stated that the monies would not come out of the City's General Fund. Mayor Gallagher questioned whether there are additional costs in addition to Table 3-5 which shows $5,400 in Arroyo Grande's Operating Expenses and $9,500 for Arroyo Grande's share of regional costs. The Mayor also questioned whether the General Fund or Franchise Fees would be used. The City Manager pointed out that it would be up to the local jurisdiction to decide. Council Member Burke added that we need to make a study of how much this program is going to cost and then decide where we are going to get the money. The Council questioned whether the collection of cans, bottles, etc. was cost effective for the City, Mr. Christiansen responded that the collector gets them but if the City desired at some time to retain a portion of them, it could. Commissioner Hatchett was concerned about years of stockpiling of recycled items. Mayor Gallagher stated that is the reason the City cannot do this alone and it is a national issue. - " Commissioner Soto mentioned that there may be enough composting to create our own co- generation plant. Mr. Devencenzi stated he did not believe there will be enough to create our own co-generation plant. He said he anticipates that this issue will be on one of the first agendas of the Authority. . 247 Arroyo Grande City Council and Planning Commission l)age 6 March 15, 1994 Mayor Gallagher pointed out the need to move toward the implementation of AB 939, but not going out and building big structures and setting up large bureaucracies to implement this program. He said we must be sensitive to small cities similar to Arroyo Grande of the Planning and Financial staff time absorbed to make this work. Mr. Devencenzi stated he agreed these were important issues. Chairman Carr referred to a Table on the overhead projector, asking if the figures meant that this program was going to cost the City of Arroyo Grande $888,000 per year and that the City is going to have to increase revenue by $366,000 to pay its share of that cost. Mr. Devencenzi responded that the figures assumed that a complete material recovery facility, yard debris composting, and all other facilities were operating. He said it also anticipates what the City's collection fees are going to be. He went on to say that yard composting and material recovery facilities are costs in lieu of what is currently being spent, some of it shifting over, and therefore not all new costs. Chairman Carr responded that it seems we do not have at this time a true picture of the additional costs. Mr. Devencenzi responded that this is correct. Commissioner Hatchett stated that it was apparent we did not really know what we were going to end up spending. Mr. Devencenzi responded that his figures reflected the high end of what it would potentially cost, a worst case scenario if we had a brand new facility with brand new equipment. He said they plan on working on less costly methods. Commissioner Hatchett then asked Mr. Devencenzi what population he based it on, and he responded it was based on population estimates that were used for transportation. Mayor Gallagher stated that this was the second public hearing and asked about the next step. Mr. Devencenzi stated that the Council of Governments is going to look at the EIR at its upcoming meeting and will be back to the City of Arroyo Grande with another public hearing on the House Hazardous Waste Element and the Source Reduction Recycling Element for the City's adoption. Then it would all be submitted to the State. Mr. Devencenzi further stated that before that, COG would be coming to the City for a signature on the Joint Powers Agreement. He stated that they hoped the Authority would hold its first meeting by July. A sub-committee of the Solid Waste Task Force will be making recommendations for policies and procedures and hiring a manager. Mr. Devencenzi said the City would be getting an amended Joint Powers Agreement. He stated that these items would be coming back to Arroyo Grande before August for adoption. Council Member Burke said that he understood they would be getting back the Joint Powers Agreement with the latest changes including the Council's comments on some procedural changes per comments made by the City Attorney. He asked if the Joint Powers Agreement would be amended to cover those. Mr. Devencenzi answered in the affirmative and said he sent a copy dated March 2, 1994 to all the attorneys. The amended Joint Powers Agreement will be going to the Council of Governments on April 6th, authorizing distribution to the Council. Mayor Gallagher opened the public hearing, and there being no response from the audience, he closed the public hearing. The Mayor then extended appreciation to Mr. Devencenzi. 248' Arroyo Grande City Council and Planning Commission Page 7 March 15, 1994 CITY COUNCIL AND PLANNING COMMISSION ITEMS AND COMMENTS - None WRITTEN COMMUNICATIONS - None ADJOURNMENT There being no further business before the City Council and the Planning Commission, on a motion by Commissioner Hatchett, seconded by Council Member Brandy, and unanimously carried, the meeting was adjourned at 9:00 P.M. to the regular meetings of the City Council and the Planning Commission. ATTEST: ~~""=- ) Nancy Bro Commission Clerk Robert W. Carr, Chairman .'