Since 1992 a Countywide AB 939 Fee has been imposed on all solid waste landfilled in Santa Clara County. The County distributes the revenues from the fee to all of the cities in Santa Clara County on the basis of how much landfilled waste each jurisdiction generated. Fee revenues are used by the cities and the County to implement programs and services designed to meet the state mandate that local jurisdictions reduce the amount landfilled by 50%. The collection, distribution, and use of the fee are governed by an Agency Agreement among the County of Santa Clara and the 15 cities in the county. The current AB 939 Fee agreement expires on June 30, 2003.

The fee is divided into two parts 1) a Program Fee of $1.50 per ton to assist in funding the costs of preparing, adopting, and implementing integrated waste management plans in the fifteen cities and the unincorporated area of the county; and 2) a Household Hazardous Waste (HHW) Fee of $1.85 per ton to provide funding to implement the Countywide HHW Program.

Separately, the City is also one of 15 jurisdictions that participate in the Countywide Household Hazardous Waste (HHW) Collection Program. This program provides events at which residents may dispose of hazardous wastes. Sunnyvale relies on the $1.85 portion of the AB 939 Fee to fund participation by 3% of its households per year, and supplements this with direct payments to the Countywide Program to fund the remainder of its resident participation, which totals 5.5% of households. The City Council has previously authorized expenditure of up to an additional $145,000 per year to accommodate this level of program use by Sunnyvale residents (RTC 03-127).

The Agency Agreements governing both the Countywide HHW Program and the AB 939 Fee expire June 30, 2003. In order to become effective again, both the Agency Agreement for the Countywide AB 939 Fee and the Countywide Household Hazardous Waste Collection Program Agreement must be approved by the County Board of Supervisors and by each of the 15 cities in the county.

The structure of the proposed fee collection and dispersal system results in Sunnyvale receiving back at least 100% of the $1.50 per ton AB 939 fee paid for disposal of City waste at Kirby Canyon Landfill. The $1.85 portion of the fee is to be retained by Santa Clara County and earmarked for HHW services. Without this funding mechanism, Sunnyvale HHW services would be paid directly from the Solid Waste Program budget. Thus, continuing to participate in this funding structure has no fiscal impact on the City or on refuse collection rates. Staff is recommending that the Council authorize the City Manager to execute the Agency Agreements for the Countywide AB 939 Fee and Countywide Household Hazardous Waste Collection Program and to commit to the County the funds necessary to continue providing HHW collection services to Sunnyvale residents.

In 1992 the Council approved the first Agency Agreement for a Countywide AB 939 Fee (RTC 92-359). All cities in the county and the County Board of Supervisors approved the Agreement, which provided for a fee of $1.00 per ton to be collected on solid waste landfilled in Santa Clara County. Revenues from the fee are paid to the County of Santa Clara, which then distributes the funds to each jurisdiction in the county primarily on the basis of how much refuse was disposed of by each city (and the County, for unincorporated areas). A modest amount of revenue generated by waste imported from other counties and waste whose origin is unknown is distributed to the cities and the County on the basis of population.

The initial two year Agreement was extended for two years in 1994 and again in 1996 and 1998. In 1994 the fee was increased to $1.15, and in 1996 it increased again to $1.30.

On June 20, 2000, the City Council approved a new Agency Agreement that included $1.50 per ton to be retained by the County and used to promote and conduct HHW service to Sunnyvale residents. Prior to this, the Solid Waste Program was directly paying the County for the City’s share of the Countywide program. Beginning in July 2003 the AB 939 and HHW fees are proposed to be increased to $1.50 and $1.85 respectively, for a total fee amount of $3.35.

The proposed increase in the fee amount is due to the recent sharp decrease in waste disposal caused by the downturn in the local economy. Because the number of tons landfilled has decreased, an increase in the per-ton fee is necessary to maintain the fee revenues at a "revenue neutral" level.

Solid Waste Sub-element, Policy 3.2E.3—Minimize illegal and inappropriate disposal of Household Hazardous Waste (HHW).

The AB 939 Fee has proved to be an equitable and easily administered way to provide Santa Clara County jurisdictions with a portion of their funding for solid waste diversion programs. The agreements authorizing the current Countywide AB 939 Fee and HHW Services agreements expire on June 30, 2003. In order to continue to collect the AB 939 fee and distribute its revenues to the cities after June 30, each city and the County must act to approve the attached Countywide AB 939 Implementation Fee Agreement. Similarly, approval by the 15 participating jurisdictions of the Countywide HHW Waste Collection Program Agreement is needed in order for the Countywide HHW Program to continue providing service to residents of Sunnyvale and the other participating jurisdictions. The proposed agreements have been reviewed and recommended for approval by the Santa Clara County Recycling and Waste Reduction Commission. Councilmember Walker is Vice-Chair of the Commission.

The key points of the proposed AB 939 and HHW Program agreements shown as Attachments A and B are summarized below.

• the AB 939 Fee is collected at landfills in Santa Clara County and at transfer stations from which waste is shipped to out-of-county landfills
• the participating cities make another three year commitment to the Countywide HHW program
• the amount of the AB 939 Fee is increased to $3.35 per ton landfilled, with $1.85 per ton earmarked for HHW services
• HHW service to 3% of the households in each participating city is provided using the revenues generated by the $1.85 per ton portion of the AB 939 Fee
• the $1.50 portion of the AB 939 Fee is returned to each jurisdiction based on how much waste is disposed by the jurisdiction
• cities (such as Sunnyvale) that fund participation by more than 3% of households continue to provide supplemental funding from other sources to whatever level is budgeted by each city ($145,000 to pay for up to 2,950 participants or 5.5% of households, in the case of Sunnyvale)
• $0.12 per household per year will be retained by the County and used to defray the cost of disposing of household hazardous waste abandoned at donation stations maintained by non-profit charitable reuse organizations (e.g. Goodwill, Salvation Army, etc.).

The City receives a portion, prorated by population, of the $1.50 fee on "undocumented" wastes that are imported to Santa Clara County for disposal, or for which the jurisdiction of origin is unknown. The $1.50 portion of the fee thus returns more in revenue to Sunnyvale than the City pays out in charges, producing a net benefit to Sunnyvale refuse collection ratepayers. This benefit will continue under the proposed AB 939 Fee Agreement.

The proposed HHW funding and service agreements promote an equitable regional cooperative approach to funding the services necessary to meet the State of California’s "50% by 2000" solid waste and household hazardous waste diversion mandate.

Sunnyvale has relied exclusively on the Countywide HHW Program for service to City residents for the four years. Customer satisfaction with the service has been high and costs have been as low or lower than the City was able to achieve on its own in the past. In order to become effective the AB 939 Fee Agreement must also be approved by each of the 15 cities in the county and by the County Board of Supervisors.

Because the proposed fee extension has only benefits and no drawbacks for the City and its refuse collection rate payers, staff recommends that the Council authorize the City Manager to execute the Agency Agreement for Countywide AB 939 Implementation Fee (Attachment A).

Staff also recommends that the Council authorize the City Manager to execute the Agency Agreement for Countywide Household Hazardous Waste Collection Program (Attachment B) and commit to the County the funds necessary to continue providing existing levels of HHW collection services to Sunnyvale residents.

The recommended agreements represent no change to existing levels of service, have no fiscal impact on the City, and the City’s funding commitment to HHW services is not proposed to change from that presently authorized by the City Council.

Notice has been provided through the publication and posting of the City Council Agenda. In addition, all Reports to Council are available in the Library and on the City’s Internet home page.

Renewal of the AB 939 Fee requires approval of the AB 939 Fee Agreement by the County of Santa Clara and each of the 15 cities in the county. Failure of the AB 939 Fee to achieve this unanimous approval will also nullify the Countywide HHW Collection Program Agreement, since it would be left without a funding source. The Council’s alternatives are as follows:

1. Authorize the City Manager to execute both the Agency Agreement for Countywide AB 939 Fee and the Agency Agreement for Countywide Household Hazardous Waste Collection Program and commit to the County the funds necessary to continue providing HHW collection services to Sunnyvale residents.
   
2. Authorize the City Manager to execute the Agency Agreement for Countywide AB 939 Fee, but not the Agreement for Countywide HHW Collection Program. Assuming approval of the AB 939 Fee by the other jurisdictions, the fee would be collected and returned to the City (except for the $0.12 per household retained by the County to pay for abandoned HHW). The City would not participate in the Countywide HHW Collection Program, and would have to separately contract and pay for HHW collection events.
   
3. Decline to authorize the City Manager to execute the Agency Agreement for Countywide AB 939 Fee. In this case, the AB 939 Fee could not be collected by the County and the HHW Collection Program Agreement would be nullified.

Staff recommends Alternative 1, that the Council authorize the City Manager to execute the attached Agency Agreements for:

• Countywide AB 939 Implementation Fee; and
• Countywide Household Hazardous Waste Collection Program
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Prepared by:

Mark A. Bowers

Solid Waste Program Manager

Reviewed by:

Marvin A. Rose

Director, Public Works

Approved by:

Robert S. LaSala

City Manager

Attachments  (.pdf files)

1. Agency Agreement for Countywide AB 939 Implementation Fee
2. Agency Agreement for Countywide Household Hazardous Waste Collection Program