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HomeMy WebLinkAboutAgenda - 05-05-2004-1ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 5, 2004 Action Agenda Item No. 1 SUBJECT: Proposed Waste Reduction, Reuse, and Recycling Fee DEPARTMENT: Solid Waste Management PUBLIC HEARING: (Y/N) No ATTACHMENT(S): 4/26/04 Solid Waste Director Memo 4/13/04 Solid Waste Director Report 3/23/04 County Attorney Letter re: Waste Reduction, Reuse, and Recycling Fees (under separate cover, previously distributed) INFORMATION CONTACT: Gayle Wilson, 968-2885 TELEPHONE NUMBERS: Hillsborough Chapel Hill Durham Mebane 732-8181 968-4501 688-7331 336-227-2031 PURPOSE: To continue discussion of a proposal to implement for FY 2004-05 a tiered Waste Reduction, Reuse, and Recycling Fee to be assessed on all improved Orange County property to finance recycling and waste reduction services/programs, BACKGROUND: Orange County is the recognized leader among North Carolina's 100 counties for its progressive and professional approach to solid waste reduction and recycling efforts, Orange County's innovative and well-managed programs have led to a per capita reduction in solid waste disposed of mare than 45% since 1991-92, In 2002-03, Orange County became the first county to achieve the State goal of 40% per capita waste reduction compared to the baseline year. Ironically, Orange County's waste reduction success has created a financial paradox, as the reduction in waste received at the landfill has led to reduced revenues available to pay for recycling and reduction programs. In recognition of this developing financial trend, discussions of the need for supplemental financing for the solid waste enterprise fund have taken place since 1993, and in earnest since about 1996. Enterprise fund reserves have been utilized to subsidize these reduction and recycling programs for many years, However, the increasing success of and investment in these programs have reduced the historical availability of surplus tipping fee revenue due to the diminished volumes of waste being disposed. This situation has culminated in the current situation of significantly reduced available fund balance to continue the annual subsidies necessary to maintain existing programs and services, Therefore, an additional source of supplemental income is vital to enable continuation of the existing array of services to Orange County citizens. The Solid Waste Management Director prepared a detailed report that outlines anticipated 10- year revenue and expenditure needs, based on various assumptions about facilities and services to be provided, The report responded to feedback received from the Board of Commissioners at a work session on November 20, 2003 that addressed the topic of solid waste alternative financing. The report outlined a proposed tier of fees that if implemented, would generate adequate revenue to continue current services even though projected future annual tipping fee revenue and reserves alone would be insufficient to do so. The recommended fee structure includes: Basic Services Fee (B) - $36 per year -services provided to or on behalf of everyone, Examples are HHW, electronics, drop-off site services, food waste and other recycling administration/education, This fee would apply to all improved properties in Orange County, including residential, non-residential, tax-exempt, and governmental (with the exception of University property, which is served by University-funded and provided recycling services), Rural Curbside Services (R) - $52 per year (including the Bfee) -Those who receive or have available biweekly curbside recycling collection in the unincorporated areas, Urban Curbside Services (U) - $75 per year (including the Bfee) -Those who receive or have available weekly curbside recycling collection in the incorporated areas, • Multi-Family Services (M) - $50 per year (including the Bfee) -Those who receive ar have available apartment/condominium type recycling services, The Solid Waste Management Director made a presentation at the April 13, 2004 meeting explaining the need for the fee system, the long-term financial plan far the solid waste enterprise fund, key assumptions underlying the recommended fee levels, and a recap of the recommended tiers and the services associated with each. There was insufficient time at that meeting for the Board to discuss this tapir fully, but Commissioners did pose a number of questions requiring additional research or mare detailed comment, Responses to those questions are included in the accompanying staff memo, Staff also made a presentation on this subject at the April 29, 2004 Assembly of Governments meeting, FINANCIAL IMPACT: Implementation of the recommended fee schedule for FY 2004-05 would help stabilize the County's solid waste enterprise fund by generating approximately $3 million to fund reduction, reuse, recycling programs and services and the County's educational outreach efforts related to these, Current plans are far the fees to be billed with the County's annual real property tax bills that are typically mailed in late .)uly to early August. One new position, funded through fee proceeds, will be needed immediately in the Revenue Department to assist in implementation and maintenance of the billing and collection of the recommended fees, RECOMMENDATION(S): The Manager recommends that the Board: 1) continue discussions about the fee recommendations; 2) provide substantive feedback to staff regarding various policy and financial management asstmptions contained in the long-term financial plan; and 3) approve the proposed set of fees or a modified version thereof either at this meeting or a subsequent meeting in the near future, Memorandum To: County Commissioners Jolm Litilc, County Manager Ft•om: Gayle Wilson, Solid Waste Director Subject: Reduction, Reuse & Recycling Fee -April 1.3, 2004 Follow-up Date: Apri126, 2004 This memorandum responds to questions asked and issues raised at the April 1.3 Board of Commissioners meeting related to the proposed Waste Reduction, Reuse, and Recycling Fee. Staff will restate each question/issue, as we understood it, and respond accordingly.. It is important that BOCC questions and concerns be adequately addressed so that the WRRR Fee can be revised as necessary and adopted at the earliest opportunity so that final preparations for billing can be completed. If the WR12R.F were not included on the tax bill, a separate billing would be needed in FY 2004/05 that would be costly and likely have a far lower collection rate. While it is possible to conduct a separate billing if there are delays in adoption, substantial negative consequences can be anticipated. I. How will small studio/efficiency apartments and other similar special residential situations be assessed, including Carol Woods? Basic Services Fee (B) Sororities Fraternities, and Elderly Assisted Living (EAL) are proposed to be assessed one (1) Basic Fee for each 4 persons (assuming an occupancy of one per room). Fraternity and sorority houses would be charged seven (7) basic fees. For Elderly Assisted Living facilities the fee will be determined based on the number of EAL units dedicated to EAL care, For example, we would include 114 ofthe total 402 housing units of Carol Woods as qualifying as EAL. These type units have no kitchen facilities and are typically,just sleeping units, thus for the 114 units, 29 Basic fees will be charged. EALs and fraternity and sorority fee schedule has been refined from that included in the April 13 report, Our view regarding efficiency/studio apartments is that the owner would be assessed a Basic Fee for each unit as with other multi-family facilities• Furthermore, there appears to be no existing list indicating how many of the estimated 14,000 apartments in the County would be considered studio/efficiency type apartments, though our records indicate that at least .3,500 of those units are one- bedroom units, In order to meet the tax billing deadlines it would be unlikely that such inforn~ation could be obtained in the necessary timeframe should the BOCC wish to provide some preferential fee consideration. However, such information could be more realistically developed and adjustments made for the second year of the fee if necessary/desired. Granville Towers is proposed to be assessed one (1) Basic Fee for each 13 students. Tax Exempt/public housing/land trusts are proposed to be assessed one (1) Basic Fee for each housing trait. 4 Multi-family Fee Each Basic Fee unit receiving multi-family services would also receive the Multi-family Fee (Same ratio as Basic Fee), In the case of fraternities and sororities, each would receive 7 (M) fees. For EAL, facilities, if the (B) fee is 4 units equal one fee, Yhen the M fee will be also applied as 4 units equal one (M) fee. Urban Curbside Fee (U Each Basic Fee unit receiving urban curbside services would also receive the Urban Curbside Fee (Same ratio as Basic Fee). If the (B) fee is 4 units equal one fee, then 4 units equal one (IJ) fee also. Staff does not believe that square footage is a good surrogate for a fee for residential units.. Square footage does not seem to correlate to waste production or recycling usage for residences. Nationally, however, non-residential sector square footage does seem to strongly correlate when used in conjwrction with type ofuse (i.e. warehouse, travel agency, grocery store, convenience store, etc.). Should the Board of Commissioners wish us to make other assumptions regarding any of the above, staff would welcome such guidance. 2. Would there be a policy to address low-income residents unable to pay the fees? The WRRRF proposal presented on April 13 does not contain provisions related to means-testing in cases involving low income or an inability to pay. The proposal currently assumes that any govenunental,jurisdictionoray choose to pay all or part of any fee on behalf of any individual or group residing in that,jurisdiction. As noted by the County Manager at the April 13 meeting, the County has historically not waived any fees, but has provided other means to pay those fees. For example, Habitat for Humanity maybe required to pay impact fees for homes they built and then can be reimbursed from a different fiord, rather than the County's waiving the fees, In the event the Board of Commissioners wishes the County to serve the role of assessing the ability to pay and facilitating/subsidizing payments, staff has provided an outline as to how that maybe done. Approximately 18 months ago, based on concerns from the BOCC about helping citizens who might have an inability to pay ambulance bills, staff (Revenue, DSS and Budget) devised an EMS Assistance Program. This program involves staff from the Revenue Department doing refen~als to the DSS staff for determination of income qualification, upon receipt of a request from a citizen who may request assistance in clearing an EMS bill because of their inability to pay it, Eligibility criteria are based on the 200% poverty level determined by Medicaid. The DSS budget includes a line item through which the EMS Uills of qualified individuals can be cleared. Staff propose to work toward devising a similar program to be able to assist eligible individuals in the payment of the proposed WRRRF and to bring back to the BOCC at a later date the program for approval. 3. Why has the proposal recommended delaying the non-residential component of the fee? Given the extent of the work necessary to develop an accurate and timely residential database, coupled with the fact that less than 10% ofnon-residential type facilities receive a direct service, staff has recommended that for the time being, the non-residential sector pay only an annual Basic Fee (B) of $36 initially. Staff believes that priority should be given to developing and refining the residential billing database, to whom the vast majority of the services are provided and where the majority of the fees will be assessed. Significant effort is underway to reconcile the existing departmental services address database with the tax property identification number database for each recycling service area.. The effort, while considerable, is expected to be completed in time for testing and insertion onto the 2004 property bill. This comm~itment to getting the residential billing correct in the limited timefrante requires us to make choices on where to devote our resources. There simply wasn't time to complete anon-residential analysis. hr fact, the BOCC has still not given final approval to the proposed fee and additional changes/revisions could still be required in the residential sector. Hi the staff report of April 1.3, we indicated that we believed the non-residential sector analysis would take place no sooner than FY 2005/06 following implementation of the initial fee schedule. Staff believes this approach to be a reasonable schedule with limited equity or financial implications, especially since significant commercial sector expansions are unlikely in the near teen. Developing the required non-residential fee beyond the simple interim recommendation included in the proposal will necessitate considerable fieldwork. Such anon-residential fee structure would likely include developing groupings by type of business, estimations of square footage, additional address/property identification information, etc. While there are templates available from some other communities, all would require modification specifically for Orange County. Experience in other jurisdictions adopting non-residential fees tied to the size and use intensity of the property showed a year or more lead-time necessary to collect these data, validate them, and gain local approval.. 4. What are the plans regarding assessing uninhabited rural structures? For habitable residential type structures in unincorporated Orange County the policy would be to charge a Basic Fee (B), with additional service fees such as (R) charged if applicable. These residences do not have to be occupied, only habitable. Those residential type structures that are not habitable (i.e. used for storage of hay, supplies, equipment, are physically uniriliabitable, not actually a dwelling, etc.) should not be assessed a fee. Those that are billed may appeal that assessment and have the fee assessment eliminated (simple documentation/proof maybe required),. 5. What are the plans for private contractor served units? The proposed fees relate to County governmental waste reduction and recycling services and programs provided for and available to the various user sectors, We have not considered private contractor served units in our costs/revenue estimates because the proposed fees da not fund the private contractor services, the private sector provides little or no residential recycling services upon which the fees are based, and the proposed fees do not fund garbage collection or disposal whatsoever. In the case of neighborhoods/developments that have chosen for whatever reason to forgo available publicly provided recycling services in favor of recycling services provided by a private contractor, the various residences will be assessed the appropriate fees based on the type of service the County would provide should the County be asked to provide recycling service.