ADMINISTRATIVE REPORT
Date: February 6, 1996
TO: Standing Committee on City Services and Budgets
FROM: General Managers of Engineering and Corporate Services
SUBJECT: Implementation of Solid Waste Utility
RECOMMENDATION
A. THAT Council defer the implementation of the operational
elements of the Solid Waste Utility, previously approved for
start up on January 1, 1996, until the City is able to secure
the appropriate Charter amendments from the Provincial
Government. The revised implementation date will likely be
January 1, 1997.
B. THAT the refuse collection and disposal costs for residential
properties based on the can allowances set out in the current
Refuse By-law (subject to Council action on the Consideration
items below) continue to be billed as part of the City's 1996
general purposes tax levy and collected in that manner.
C. THAT the current residential recycling programs continue to
be subsidized by the Solid Waste Capital Reserve until the
operational elements of the Solid Waste Utility are
implemented.
CONSIDERATION
The General Manager of Engineering Services and the General Manager
of Corporate Services offer for CONSIDERATION D or E, noting they
favour "D".
D. THAT the current can limit for duplexes be reduced to 3 cans
per collection day, with additional service be made available
in 3 can increments for an annual user fee of $96 paid in
advance upon application.
OR
E. THAT the current can limit for duplexes remain at 5 cans.
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F. THAT if consideration item "D" is approved, the Director of
Legal Services be instructed to prepare the necessary Refuse
By-law changes for Council approval.
COUNCIL POLICY
On September 12, 1995, City Council approved the implementation of a
Solid Waste Utility along the following lines:
- the creation of a Solid Waste Utility with all solid waste
operations and accounts, except for street cleaning, litter
collection and abandoned garbage collection, organized under the
utility fund as of January 1, 1996;
- user fees for both residential refuse and recycling services to be
billed annually to each customer unit effective January 1, 1996;
- the can limit be set at three cans per each customer unit;
- the tax-funded container service provided to strata, co-op and 99
year leased buildings to be discontinued on December 31, 1995, and
these buildings be allowed to contract for City container service
with the fees set on an at-cost disposal rate basis, pending a
report on the container operation;
- the Director of Legal Services be instructed to request the
Provincial Government to amend the Vancouver Charter to provide for
the collection of Solid Waste Utility charges separately on the tax
bill, and to prepare the necessary by-law changes; and,
- the removal of refuse collection costs from the general tax levy to
be made from the residential property class only.
PURPOSE
The purpose of this report is to recommend a deferral of the
implementation of the operational elements of the Solid Waste Utility
until the City is able to secure the appropriate Charter amendments from
the Provincial Government.
BACKGROUND
In the earlier report approved by Council on September 12, 1995, we
indicated that the Vancouver Charter needed to be amended to properly
implement a Solid Waste Utility. We reported that it was not clear
whether the Provincial Government would be able to
undertake this amendment in time for the proposed January 1, 1996
implementation date and stated that the City would either bill the
utility fees on the property tax statement, or on a separate notice if
the amendment came after the tax statements were printed in May.
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We also noted that a separate utility bill, in absence of the Charter
amendment, would have its problems in the areas of collections and
additional cost, and would be further complicated by a mix of tenant and
property owner customers.
Staff, however, were hopeful that the City would receive its requested
Charter amendment in the Spring of 1996 and proceeded with planning the
implementation of the Solid Waste Utility. The appropriate Charter
amendments were drafted by the Law Department and sent to the Provincial
Government with a request for consideration at the earliest possible
date. Provincial staff had indicated support for the amendment because
it parallels similar existing language in the Municipal Act and the
program it supports is consistent with the provincially-approved
Regional Solid Waste Management Plan.
Staff directed their efforts to work on changes to the Refuse By-law,
targeting a January 1, 1996 implementation date. In November, 1995, the
City's residential strata and co-op container customers were notified
that the tax-funded container service would be discontinued on December
31, 1995. This notice was followed by an article in the City's tax
newsletter, which was sent out with the 1996 Advance tax bills in early
December, 1995. The article informed the vast majority of residential
customers that their tax-supported can service would be changed to a
user-pay system in 1996. Later in December a notice was sent to the
duplex accounts in receipt of the five-can allowance informing those
customers of a change to a three-can allowance effective January 1,
1996. Additionally, several local newspapers ran feature stories on the
City's Solid Waste Utility.
Despite all of this notification and publicity there still remains some
confusion in the community on the user-pay aspect of the Utility and
whether or not the property tax would be reduced accordingly. Council
and staff alike have received many telephone calls in that regard.
DISCUSSION
We are fast approaching a point of no return with respect to the 1996
implementation of the Solid Waste Utility. We believe that a decision
needs to be made immediately as to whether staff continue the
implementation process started last September or staff abort the process
in face of the heightened political uncertainty of receiving the
appropriate Charter amendment in the near term to properly implement the
Utility.
Since the September approval of Council, the Premier of the province has
resigned as leader of his party, the NDP party is now in the process of
electing a new leader and hence a successor Premier, and a general
election may or may not be held in the immediate future. In other words,
there are major issues on the
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provincial agenda which will take precedence over the City's request for
a Charter amendment.
As a consequence of the foregoing situation there remains a not
insignificant business risk with proceeding to implementation of the
Utility using a separate utility bill. We expect a number of problems in
that regard (determining the correct customer, unpaid accounts, legal
action) which would be circumvented by having the appropriate Charter
amendment in place. We therefore feel that a more prudent course of
action would be to face the certainty of undoing our implementation
efforts to date than to face the uncertainty of continuing with the
implementation. That action is reluctantly recommended given the
administrative and political fallout that could arise from proceeding
under a hope-for-the-best approach.
USER FEES VERSUS PROPERTY TAXES
As mentioned above, Council approved, as an implementation condition of
the Solid Waste Utility, the removal of refuse collection costs from the
general purposes tax levy from the residential property class only. This
results in a 6% reduction in
the residential tax rate based on the City's 1995 general purposes tax
levy.
Since there seems to be some confusion on the part of taxpayers on what
this means in terms of their property tax bill, the following table
illustrates the net effect of financing refuse collection costs with
user fees instead of property taxes. The figures are based on 1995
residential property tax rates and the basic customer unit utility
collection fee of $96 as they would apply to a single family residence
at various levels of assessed (taxable) value.
Taxable Tax Collection
Value $ Reduction Fee $ Change
SFR 1 200,000 $ 33.00 $96 $63.00 increase
SFR 2 350,000 57.75 96 38.25 increase
SFR 3 700,000 115.50 96 19.50 decrease
It is important to note that the collection fee does not include a $37
recycling charge which was previously subsidized from the Solid Waste
Capital Reserve. Addition of the recycling charge to the collection fee
would increase/reduce the $ change figures in the right most column of
the table and give a comparison between the collection charges based on
assessed value and an all-in user fee which includes collection and
recycling.
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DUPLEX GARBAGE CAN LIMIT
In November 1991, as a waste reduction initiative, the City lowered the
basic can limit allowance for single family dwellings from 5 to 3 and
for duplexes from 7 to 5.
An identification decal is posted at each duplex where the residents
have requested the 5 can limit.
Since November 1991, 1,800 duplex residents have requested the 5 can
limit. There are about 8,000 non-strata and strata duplexes in the
City. (A duplex is defined as a house containing two legal dwelling
units.)
Under the Solid Waste Utility (as approved by Council on September 12,
1995), the residents of single family, duplex and original single family
houses containing three or more dwelling units would receive a mandatory
minimum level of service (ie. collection of blue box recyclables and up
to 3 cans of garbage). Owners would pay an annual user fee for this
service. Additional garbage collection service could be obtained by
either purchasing additional weekly service or by using garbage
stickers.
All home owners have been notified of this change through the 1996
advance tax notice and the 1996 Refuse Calendar.
In December 1995, the 1,800 duplex residents with decals were notified
by letter that their 5 can allowance would drop to 3 cans in January
1996. Since then, only 80 owners have applied to purchase additional
weekly garbage collection service.
If the implementation of the Solid Waste Utility is deferred due to a
delay in the Charter amendment, we recommend that we still proceed with
lowering the can allowance for duplexes from 5 to 3 as Council had
approved for the Solid Waste Utility. This proposal would be an
additional initiative for achieving Council's 50% waste reduction goal.
Since only 25% of duplex residents had requested the 5 can allowance in
the 4 year period from November 1991 to December 1995, it appears that
most duplex residents do not need the 5 can allowance. Although not
much time has elapsed since we notified the duplex residents with the 5
can allowance that they would be receiving a lower can limit, the fact
that to date only 80 owners have applied to purchase additional service
reinforces the assumption that most duplex residents will be able to
cope with a 3 can allowance.
If duplex residents need additional service, staff recommend they be
allowed to do so by paying an annual user fee of $96 for the
weekly collection of each increment of three cans of garbage or by
purchasing stickers.
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Lowering the duplex can limit would also address an anomaly that exists
in the Refuse By-law. Original single family dwellings (OSFD's)
converted into non-strata houses with three or more dwelling units are
only entitled to a three can allowance. (There are about 2,600 OSFD's
in the City.) Residents must pay for the collection of all garbage in
excess of the three cans. Staff receive numerous complaints from
residents of these houses because they receive only a 3 can allowance
whereas duplexes receive a 5 can allowance. Lowering the duplex can
limit to 3 would eliminate this anomaly, and treat all houses equally.
Providing the same basic level of service (ie. the collection of blue
box recyclables and up to 3 cans of garbage) to all houses each week -
with additional service purchased through the sticker system or by
paying an annual fee for additional weekly service - achieves some
progress toward a user pay system in advance of the implementation of
the Solid Waste Utility for which a Charter amendment is needed.
CONCLUSION
We believe the uncertainty around the City receiving the appropriate
Charter amendment to properly implement its Solid Waste Utility in the
near future is sufficient reason to abort the 1996 implementation of the
Utility at this time. The result of taking that action would be to
continue billing residential solid waste collection and disposal costs
as part of the City's general purposes tax levy in 1996, and targeting a
new Utility implementation date (likely January 1, 1997) with the
Charter amendment in hand.
Council should note that this delay would require continued funding for
the provision of refuse collection to strata-co-ops, including any of
those properties that switched from City service when notified
previously of the Utility commencement date of January 1, 1996.
The report recommendations support a delay in the implementation of the
Solid Waste Utility.
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