HomeMy WebLinkAbout08/25/2008 ZOO L
B A K E R S F I E L D
Staff: John W. Stinson Ken Weir, Chair
Rick Kirkwood Sue Benham
Irma Carson
BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Monday, August 25, 2008— 12:00 p.m.
City Manager's Conference Room, Suite 201
Second Floor- City Hall, 1501 Truxtun Avenue, Bakersfield, CA
A G E N D A
1. ROLL CALL
2. ADOPT JULY 28, 2008 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. Discussion regarding the Update on Comprehensive Recycling System
Planning - Rojas
5. COMMITTEE COMMENTS
6. ADJOURNMENT
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B A K E R S F I E L D
�.�-. Ken Weir, Chair
John W. Stinson, Assistant City Manager Sue Benham
For: Alan Tandy, City Manager Irma Carson
Rick Kirkwood, Management Assistant
AGENDA SUMMARY REPORT
REGULAR MEETING OF THE BUDGET
AND FINANCE COMMITTEE
Monday, July 28, 2008 — 12:00 p.m.
City Manager's Conference Room —Suite 201
City Hall, 1501 Truxtun Avenue, Bakersfield, CA
The meeting was called to order at 12:11:34 PM
1. ROLL CALL
Committee members present: Councilmember Ken Weir, Chair
Councilmember Irma Carson
Councilmember Sue Benham
Staff present:
John W. Stinson, Assistant City Manager Rhonda Smiley, Asst. to the City Manager
Rick Kirkwood, Management Assistant Nelson Smith, Finance Director
Ginny Gennaro, City Attorney Joshua Rudnick, Deputy City Attorney II
Robert Sherfy, Deputy City Attorney II Donna Kunz, EDCD Director
Others present:
Tonya Short, Kern HBA Fred Drew, CAPK
James Geluso, Bakersfield Californian Kristina Carey— Kern HBA
2. ADOPT APRIL 28, 2008 AGENDA SUMMARY REPORT
Adopted as submitted.
3. PUBLIC STATEMENTS
None.
AGENDA SUMMARY REPORT Page 2
BUDGET AND FINANCE COMMITTEE MEETING
Monday, July 28, 2008
4. NEW BUSINESS
A. Discussion of Department of Housing & Urban Development community Block
Grant and HOME Investment Partnership Action Plan Amendments (including
potential Friendship House funding) — Kunz
Economic and Community Development Director Donna Kunz gave an overview of
the amendment to reallocate funds from completed or cancelled projects under the
Community Development Block Grant (CDBG) and HOME Investment Partnership
(HOME). This amendment will allow for the creation of two new projects. The first
is the Green Gardens II Project, which consists of 24 units of permanent supportive
housing for the chronically homeless. The second is the Community Action
Partnership of Kern — Friendship House, for improvements to the outdoor sports
complex at 2424 Cottonwood Road. Ms. Kunz gave a brief summary of additional
activities that staff proposes to be canceled or reprogrammed.
Committee member Irma Carson requested an explanation of the HOME Funds
down payment assistance amount. Ms. Kunz responded that the down payment
program exists in all three development project areas. The bulk of which is
predominantly used in the southeast and in Old Town Kern. Committee member
Sue Benham thanked staff for their work, and asked if the cancellation and
substitution of funding will impact the progress of the Mill Creek Linear Park
Project. Ms. Kunz responded that reprogramming of the $300,000 of CDBG is
necessary to avoid complications in the monitoring requirements and does not
change the time line. Other changes associated with the reprogramming of funds,
is due to the acquisition of two properties from willing sellers along the Mill Creek
Project. These properties will be incorporated in the overall park development
plan, provide the staging and parking area for the park, and provide public parking
in the future should a court house ever be established.
Motion to forward staff's recommendations to the next City Council meeting for
consideration was made by Irma Carson. The motion was passed by all Committee
members.
B. Discussion regarding Assessment Districts— Smith
The following background and history was provided to the Committed by Finance
Director Nelson Smith:
In April of this year, the City Manager's Office administratively froze the
processing of assessment district applications. Soon after, the Home
Builders Association sent a letter requesting the freeze be lifted immediately.
The assessment districts are generally created at the time of development to
reimburse developers for construction of public improvements. The City
currently has 24 active districts with approximately $84 million in outstanding
debt. It is important to note that the City is not obligated to use City funds to
AGENDA SUMMARY REPORT Page 3
BUDGET AND FINANCE COMMITTEE MEETING
Monday, July 28, 2008
repay any of that debt. However, there are some administrative and
fiduciary responsibilities that the City takes on with bonds that are issued.
One of those fiduciary responsibilities is to initiate foreclosure proceedings if
the delinquencies within any given district reach a certain percentage. The
City takes this responsibility seriously. Staff believes it is critical that the City
protect the interest of bond holders. To do otherwise might be interpreted by
the investment community as an act of bad faith, and could affect the City's
credit rating on existing or future debt.
In 2007, the City initiated foreclosure proceedings on 296 parcels. Due to
current conditions in the housing market, combined with general investor
concerns about sub-prime mortgages and the housing industry, the City and
its bond underwriter had great difficulty selling bonds. The City is trying to
protect its ability to borrow money in the future.
Assistant City Manager John Stinson added that based on the current
environment, it is not prudent to continue to process assessment district
applications at this time. However, there maybe a point in the future where the
City might reconsider this decision. Tonya Short of Kern HBA, asked if the current
environment has affected the City's credit rating. Nelson Smith replied that while it
has not affected the City's credit rating, the issue of the municipal bond market has
an impact on the City. Committee chair Ken Weir asked which particular type of
development utilizes the assessment district. Mr. Smith responded that the
districts are utilized almost all by residential development. The City's policy for
forming districts requires a $2 million bond amount. So, it will be the larger
projects, rather than smaller projects that utilize the assessment districts as a
financing mechanism. Mr. Smith added that staff's recommendation is to allow the
City to continue the administrative freeze and not process applications until a
future date. Therefore, no action was required unless the Committee wanted to do
otherwise. Committee chair Weir requested staff provide quarterly updates to the
Committee.
5. COMMITTEE COMMENTS
None.
6. ADJOURNMENT
The meeting adjourned at 12:35:16 P.M.
cc: Honorable Mayor and City Council
S:\Council Committees\2008\08 Budget and FinanceWulyUuly 28 Agenda Summary.doc
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B A K E R S F I E L D
CITY OF BAKERSFIELD
PUBLIC WORKS DEPARTMENT
MEMORANDUM
TO: Alan Tandy, City Manager
FROM: Raul Rojas, Public Works Director
DATE: August 21, 2008
SUBJECT: Budget and Finance Committee Update on Comprehensive
Recycling System Planning
This is to follow up on recent Budget and Finance Committee discussions on
recycling. The Committee has considered whether a long term comprehensive
recycling program could- sort raw refuse at a material recovery facility
(MRF) instead of using sparate blue cart collection.
Staff recently toured a relatively new MRF. According to the MRF operator, blue
cart collection and special commercial routing are still necessary to preserve the
market value of the recyclables, even with their new sorting technology. This is
consistent with staffs finding that most MRFs do not actually sort residential
refuse. Blue carts continue to be more effective for recycling residential waste,
compared to MRFs. Therefore, staff recommends moving ahead with the
$1,500,000 State grant for curbside recycling equipment as detailed in the
enclosed report.
At the April 28th Budget and Finance Committee meeting, staff was directed to
provide the City Council with suggestions on how the City can advance the
existing blue cart recycling program beyond its current scope, to include
expansion to multi-family and commercial locations. Staff is conducting a
citywide study and will report in December.
State legislation for mandatory commercial and apartment recycling programs
has recently been suspended. However, these kinds of recycling programs may
be needed in the future due to other pending State legislation.
Prior to reporting to the City Council as directed above, staff is providing the
enclosed report to the Budget and Finance Committee to request direction
related to the blue cart recycling program. The report consists of four sections,
summarized below:
1. The study for multi-family and commercial recycling will take an
inventory of sites where recycling containers can be located, and
will also estimate the cost for recycling and related refuse fee
adjustments.
B&F Committee Memo-Recycling Final 8-08
August 21,2008
MEMORANDUM
ALAN TANDY,CITY MANAGER
August 21,2008
2. A blue cart program progress report on the City's past promotional
efforts indicates that participation increased from 3,800 to 6,000
homes following last year's fee reduction.
3. A list of suggestions to increase blue cart participation includes
using streamlined billing, possible disincentives for extra trash
carts, and phasing of universal blue cart collection in small sections
of the City or new developments. Marketing efforts to increase
participations are in process.
4. Actions needed to use the $1,500,000 State recycling grant include
issuing requests for proposals (RFPs) for the purchase of
equipment, and for selection of a sorting service contractor. These
RFPs were previously issued but not acted on due to the City's
November 2007 decision to forgo universal curbside recycling and
the second $1,500,000 State grant. Prompt action is needed to use
the first grant by the November 2009 deadline.
The enclosed report describes these items in more detail.
B&F Committee Memo-Recycling Final 8-08
August 21,2008
City of Bakersfield
Recycling Program
Budget and Finance Committee Report
August 21, 2008
This report is to provide the City of Bakersfield's Budget and Finance Committee
information on four aspects of the City's blue cart recycling program and to request
direction related to the program. The update consists of four sections, summarized
below:
1. The study for multi-family and commercial recycling will take an inventory
of sites where recycling containers can be located, and will also estimate
the cost for recycling and related refuse fee adjustments.
2. A blue cart program progress report on the City's past promotional efforts
indicates that participation increased from 3,800 to 6,000 homes following
last year's fee reduction. Marketing efforts to increase participations are
in process.
3. A list of suggestions to increase blue cart participation includes using
streamlined billing, possible disincentives for extra trash carts, and
phasing of universal blue cart collection in small sections of the City or
new developments.
4. Actions needed to use the $1,500,000 State recycling grant include
issuing requests for proposals (RFPs) for the purchase of equipment, and
for selection of a sorting service contractor. These RFPs were previously
made but not acted on due to the City's November 2007 decision to forgo
universal curbside recycling and the second $1,500,000 State grant.
Prompt action is needed to use the first grant by the November 2009
deadline.
A more complete discussion of each item follows:
1. Multi-Family and Commercial Recycling Program Study
There are currently about 100 businesses and schools using regular blue carts for
recycling. Staff is taking a citywide inventory of the multi-family dwelling locations to
determine how many have space for blue carts or bins, in addition to or in lieu of part of
their trash containers. Staff is also studying how commercial refuse and recycling rates
may be adjusted to facilitate more commercial recycling. Staff will report back in
December 2008 on these items, with recommendations for program expansion.
State legislation for mandatory commercial and apartment recycling programs has
recently been suspended. However, these kinds of recycling programs may be needed
in the future due to other pending State legislation. Committee discussions in 2008 have
considered whether a material recovery facility (MRF) would be able to accomplish
recycling without separate collection. Staff recently toured the newest and most
advanced MRF in the U.S., and found that separate residential collection and special
routing is still used.
B&F Committee Report-Recycling Final 8-08 1-
2. Blue Cart Progress Report
Significant progress has been made in the blue cart program over the last year. Since
the City Council decreased the blue cart fee to $4 per month in July 2007, the program
has grown over 50%. It grew from 3,800 homes to almost 6,000 in one year. Currently,
about six percent of all the homes in the City are participating. The recycling fee was
also reduced to $4 per month in the unincorporated County area, where about three
percent of the homes now participate.
Building participation is challenging. Past promotional efforts include: ads on new
electronic billboards, ads in the annual Parks Department Recreation Guide mailed to
residents, and offering the first months of service as free. To promote the program in the
County, flyers have been mailed twice per year to County residents. Because of the
limited participation resulting from the City's efforts, staff suggests other ways to promote
the program. Program flyers are currently being clipped to refuse carts on pickup day to
stand out from the regular flow of advertising. Citywide flyer distribution is underway,
and will be completed in October. However, early results indicate new participation of
only 25 homes out of the first 15,000 flyers distributed, which is less than one percent.
Staff has found that most of the growth occurs through word of mouth among neighbors,
rather than by circulation of printed material. Most public feedback indicates that the
current economy makes it difficult for families to afford the optional fee for service.
3. Participation Building Efforts
A. Billing System Improvements
In addition to promotional efforts, the billing process should be improved for
customer convenience, and to reduce system cost. The program was originally
intended for annual billing only, but it was difficult for some residents to afford a
year of service at one time, so quarterly payments were accepted. However, the
resulting quarterly and annual billing process is cumbersome and confusing to
some. Many customers fail to pay on time, causing extra administrative and field
work to interrupt and restart service. These costs negatively affect the program.
The City's existing Click 2 Gov online payment system is used by relatively few
blue cart customers. Staff is exploring ways to set up more simple automatic
payments and possibly property tax billing (with owner authorization) for
customer convenience. This would also reduce the administrative cost.
Customers and the City would both benefit by an incentive for these types of
payment systems.
B. Phase Out Extra Trash Carts
Another way to increase blue cart usage would be to phase out extra trash carts
or create a disincentive for their use. The City Council ended an outdated
subsidy of extra trash carts and established an incentive for blue carts in July
2007, by increasing the extra trash cart fee from $4.53 to $7.15 and lowering the
blue cart fee from $6.67 to $4.00. Unfortunately, as a result only 166 customers
switched from extra trash carts to blue carts and 2,972 customers continue to
pay for extra trash carts. In many cases, the extra trash carts are being used to
dispose of recyclable materials. Staff therefore recommends that extra trash
carts be completely phased out, except for certain exceptional cases. As an
B&F Committee Report-Recycling Final 8-08 -2-
alternative to phasing out, the extra trash carts could be given a disincentive.
This goal could be reached in a variety of ways:
1. Notify customers in advance that they will be switched from extra
trash carts to blue carts in lieu of extra trash carts upon renewal of
their subscription (at the lower fee of $4 per month). Customers
currently paying $7.45 per month for an extra trash cart could pay $4
each for two blue carts if they really need the extra container space.
2. Increase the fee for extra trash carts to further discourage their use,
and use any resulting revenue to enhance the blue cart program.
Many communities use such fee structures to encourage recycling.
Bakersfield originally did this with a $10.50 per month fee for extra
trash carts in 1995, but reduced it due to the public's resistance to the
implementation of the new cart system in general. Because the cart
system has since gained wide acceptance, it may be feasible to revisit
this.
3. Simply cancel all extra cart accounts and retrieve the carts — not
recommended.
C. Phase in Universal Blue Cart Service
A phasing plan could begin by requiring all new residential refuse accounts to
use blue carts as part of a new basic level of service. This could apply to any of
the following:
1. New housing tracts through the planning process.
2. Individual new homes starting service for the first time. About 2,000
new homes begin service each year(down from recent years which
had about 4,000).
3. Existing homes as ownership changes. About 3,000 existing homes
change ownership in a year.
Universal blue cart collection could also be phased in to various neighborhoods
by having a majority of owners consent (similar to maintenance districts).
Essentially, this would be offering the universal program to smaller chunks of the
City as "recycling zones". This approach would be operationally more efficient
than phasing in individual homes, because whole routes would result. The
greater efficiency would result in lower costs than the voluntary program.
Keeping the fee low would make it easier for those who do not elect it in a
"recycling zone".
4. Recycling Equipment Grant
The City received a State grant in 2006 to purchase $1,500,000 of equipment to sort
curbside recyclables. Use of the grant was deferred while the City competed for a
second $1,500,000 grant in 2007. The City was selected to receive the second grant,
pending a decision to implement universal curbside recycling. However, due to
B&F Committee Report-Recycling Final 8-08 -3-
uncertainty about higher recycling mandates, the City declined the second grant. The
first grant still remains to be used, with the goal of developing a local sorting facility to
improve the economy of the curbside recycling program.
In 2007, the City issued a request for proposals (RFP) for service providers to utilize the
grant funded equipment to sort curbside recyclables. Two proposals were received, but
the matter of curbside recycling was deferred in November 2007 as mentioned above,
and no service provider was selected. In the meantime, the City has been using short
term quotes to obtain temporary buyers for its mixed curbside recyclables. The
recyclables are currently shipped mixed and unbaled to sorting and baling companies in
other cities. The second State grant would have funded a baler with the sorting
equipment, for more efficient shipping. Since the City did not accept the second grant,
the baling function will be accomplished through other options, such as:
1. The City can fund its own baler.
2. The City can select a sorting contractor to sort the materials and sell them to
a buyer who bales them.
3. The City can select a sorting contractor which includes baling.
The RFP process for sorting services would include these three options so the City can
obtain the best overall benefit for the ratepayers. Since several vendors recently
expressed interest in doing business with the City, staff recommends issuing an RFP for
sorting of recyclables. The proposals may include baling services or not, so the City can
determine whether to sell baled or unbaled materials according to subsequent material
sales bids. The sorting service would begin when the grant funded equipment is ready
to use, following the process described below.
The City also originally issued an RFP to purchase the grant funded sorting equipment in
June 2007. When curbside recycling was deferred in November 2007, the purchase
process was suspended. The grant project must be completed by November 2009 to
receive reimbursement from the state. The project requires significant lead time for
selection, manufacturing, and installation of equipment. The grant funded equipment will
at first be used to sort recyclables from the existing voluntary blue cart program, and
may also become part of a larger recycling facility if one develops. Staff recommends
completing the RFP process to return to City Council for approval of the purchase and
installation of the equipment. It is necessary to complete the manufacturing, delivery,
and payment for the equipment prior to filing for reimbursement by the state by
November 2009.
B&F Committee Report-Recycling Final 8-08 -4-
BUDGET AND FINANCE COMMITTEE MEETING
Monday,August 25,2008
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