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Lindsay moves forward on Prop 218, Mid Valley dispute unresolved

Lindsay moves forward on Prop 218, Mid Valley dispute unresolved

Lindsay sets a Prop 218 hearing for Oct. 8, still in midst of resolving $390,581 dispute with Mid Valley Disposal

By Paul Myers @PaulM_SGN

LINDSAY – Residents in Lindsay will have to do a little trash talking if they want to oppose an increase to their refuse rates. 

Last month the City of Lindsay decided to move forward with a Proposition 218 process to increase rates on residential and commercial customers. The process is a regular part of business for cities as the cost of services rise over time. But the City is already under the gun since their service provider, Mid Valley Disposal, says they owe $252,000 or perhaps even as much as $390,581.

Mid Valley Disposal was assigned Lindsay’s refuse contract when they bought Sunset Disposal in 2014. Mid Valley, as they had referenced at the July 23 meeting, said they wanted to be compensated $252,000 for services rendered between 2015 and 2019. This is the same amount of time where customer rates did not increase because there had not been a Proposition 218 vote approval. The City pointed out in their contract with Mid Valley that the City can only charge what voters approve.

“Any proposed increase provided for by this Agreement will be allowed only if approved by the ratepayers in accordance with the law,” the contract reads.

A June 22, 2019 letter sent by Astor and Kingsland LLP, representing Mid Valley Disposal says the City can adjust rates according to Consumer Price Index (CPI). 

“Unless you can point to a reported Appellate Court ruling that unequivocally establishes, as governing legal precedent, that this form of rate increase…falls within the reach of Proposition 218, it cannot be relied upon here,” the letter reads. 

Astor and Kingsland, LLP say the City has violated the contract by not implementing rate increases using the CPI. According to the letter, in May 2016, Mid valley management met with Lindsay staff to discuss the overdue CPI adjustment to the rates. What ensued was a three year exchange.

“Despite repeated requests by [Mid Valley] the City has failed to implement a rate adjustment,” the letter read.

The letter goes on to read that delaying the CPI adjustments has resulted in a $252,744 bill for the period of November 2017 through June 2019. In addition, the letter asserts that there is another $137,837 past due for the period of July 2015 through October 2017. Mid Valley Disposal president Joseph Kalpakoff, who spoke during public comment on July 23, said he has been willing to waive the $137,837. 

“Mid Valley Disposal is not unsympathetic to the financial pressures confronting the City of Lindsay,” Astor and Kingsland letter said. “Its willingness to negotiate an informal resolution, and a prior offer to forego a portion of the rate adjustment to which it is entitled, is evidence of that fact.”

Mid Valley’s lawyers added that the disposal company have faced their own kind of adversity since China decided to move forward with their National Sword policy in 2018. The policy put a strict limit on the amount of solid waste they are willing to import. The policy has left some disposal companies reeling, as they try to figure out how to dispose of the solid was they pick up.

“Mid Valley Disposal, like every other service provider in the state, is now confronting its own extreme financial pressures as a result of the unprecedented National Sword import policy…which spawned the global recycling markets crisis,” the letter stated.

Kalpakoff requested that the City and Mid Valley Disposal discuss a rate structure that included revenue for back payment, and not just the annual CPI 3% increase year over year for the next five years.

The Sun-Gazette reached out to interim city manager Bret Harmon as to whether the meeting ever occurred. Harmon said he does not have anything to share about conversations with Mid Valley Disposal to the press. He added, “The City is current with all it owes to Mid Valley.”

John Kelly Astor, of Astor and Kingsland, says nothing has changed since the July 22 letter was sent to the City, and that the letter speaks for itself over the dispute.  

Rates

Lindsay is planning to institute new refuse charges as businesses are required under the State to recycle their organic waste. According to a city staff report, businesses that generate four cubic yards or more of commercial solid waste per week shall arrange for organic waste recycling services. Food waste, green waste, landscape and pruning waste, non-hazardous wood waste and food-soiled paper waster all fall within organics. 

The City is proposing several monthly rates starting on Nov. 1 for commercial organics services. Starting at a 90-gallon container picked up once a week at $24.88; the same size at twice a week at a rate of $43.73; a two-yard container at once a week at a rate of $98.01; and a two-yard container at twice a week at $177.93. 

Miscellaneous fees including enclosure access, locking lid fees, push/pull charge grange from $24.72 to $30.90. Extra pick up per cubic yards fees including municipal solid waste, recycling and organics are rated at $46.56, $26.61 and $44.66 respectively. 

Before the Council can vote to increase rates, the City must call for a Proposition 218. The proposition gives ratepayers the opportunity to formally protest a rate increase. The City will issue a notice letting rate payers know of that the City is proposing the increase, and gives them 45 days to protest in writing. After a 45-day notice period, the Council will conduct a public hearing on Oct. 8. If less than 50% plus one of service customers protest, the Council will take up item of an increase and vote.

City clerk and director of finance Bret Harmon said during the July 23 discussion that the City cannot afford the cost of service as revenue’s currently stand. Harmon outlined that the City is billed monthly by Mid Valley Disposal who provides pickup services to customers, and the City bills customers to recoup their cost. In his presentation Harmon notes that service rates do not cover costs.

Residential customers will see an increase as well if the Council accepts the Prop 218 proposal. By Nov. 1 this year residential refuse rates will rise from $22.68 to $25.04, then in July 2020 the rate will increase by 3% to $25.79, then 3% again to $26.56 by July 2021, then 3% again to $27.36 by July 2022 and then 3% again to 28.18. 

Commercial refuse services will also rise depending on the cubic yardage and amount of times per week each can picked up. The cost currently ranges between $22.68 to a maximum of $1,076.81. The cost will rise 3% per year beginning on Nov. 1 this year ranging from $25.04 to $1,189.16. By July 2023 the cost will range from $28.18 to $1,338.41. 

Commercial recycling in a similar fashion depends on the amount of recyclables being used and the amount of times it is picked up per week. The current cost for 1 cubic yard container picked up once per week is $30.12. A 6-yard container picked up twice a week is $212.60 per month. On Nov. 1 of this year the cost will be $44.19 per month for the 1-yard container and $311.86 per month for the 6-yard container. The cost will increase by 3% every year until July 2023 where the cost will $49.74 per month for the 1-yard container and then $351 for the 6-yard container.

After a 45-day notice period, the Council will conduct a public hearing on Oct. 8. If less than 50% plus one of service customers protest, the Council will take up item of an increase and vote. 

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