20-Year Resource Allocation Plan - City of Sunnyvale

▪ Solid Waste Management Fund
The Solid Waste Management Fund accounts for the revenues
and expenses related to collection, recycling, and disposal of
solid waste generated within the City of Sunnyvale. A private
company, Bay Counties Waste Services, doing business in
Sunnyvale as Specialty Solid Waste & Recycling (Specialty),
has been issued an exclusive franchise for collection of solid
waste and recyclable materials through 2021, and these
contract costs are refl ected here. Operations of the Sunnyvale
Materials Recovery and Transfer (SMaRT®) Station and
disposal of refuse at the Kirby Canyon Landfi ll are included
in a separate fund, but the City’s share of these activities is
refl ected in the Solid Waste Management Fund.
Solid Waste Management Fund revenues continue to be
impacted by the recession. Approximately 62% of solid
waste revenues come from commercial accounts who utilize
larger garbage bins, subscribe to more frequent pick ups, and
use construction debris removal services. With the increase
in commercial vacancies over the last two years, and the
corresponding drop in solid waste generation, revenues have
come in below projections. This is particularly problematic
because most of the expenditures are fi xed. As a result, the
Solid Waste Management Fund has drawn down on its rate
stabilization reserve the past two years so that it will end
FY 2010/2011 with minimal reserve remaining. With the
recommended increase in rates, growth in the economy, and
savings achieved through the extension of the solid waste
collection contract, it is anticipated this reserve will be built
back up beginning in FY 2011/2012.
In 1992 the City of Sunnyvale entered into a Memorandum
of Understanding (MOU) with the cities of Palo Alto and
Mountain View for the operation of the SMaRT Station®.
Sunnyvale and Mountain View are required to deliver all
of their garbage and residential recyclables, including yard
trimmings, to SMaRT. Palo Alto continues to operate its
own landfi ll and facilities for yard trimmings and compost
and recycling. Therefore Palo Alto is required to deliver only
specifi c amounts of garbage that vary from year to year.
The three cities that participate in the SMaRT Station have
individual agreements with Kirby Canyon for landfi ll services
that require the payment for disposal of a minimum quantity
of solid waste each year. This provision is commonly referred
to as a “put or pay” requirement. In October 2011, the cities
will be able to modify the level of put or pay required, and
it is Sunnyvale’s intention to lower its solid waste minimum
quantity by the maximum allowable 10%. This modifi cation
is refl ected in the tonnage projections beginning in FY
2012/2013.
As mentioned earlier, the City contracts with Specialty for
the collection of solid waste and recyclables throughout the
City. Specialty is paid on a monthly basis, but their payment
is determined for a year based largely on formulas that take
necessary and actual expenses in the last completed fi scal
year and adjust them for infl ation. Therefore, the contractor
payment for the following fi scal year is driven primarily by