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CITY OF SAN LEANDRO MEMORANDUM Date: April 3, 2006 To: City Council Finance Committee From: Stephen L. Hollister, Assistant City Manager Subject: Oro Loma Municipal Services Fee Analysis RECOMMENDATION That the Finance Committee review the draft analysis and methodology for adoption of a 10% Municipal Services Fee to be levied on the Oro Loma Sanitation District, pursuant to the agreement between the City and Oro Loma. Oro Loma will increase the rates to its solid waste customers in an equivalent amount. The Staff and the City Attorney are requesting that they be directed to prepare the appropriate resolution and supporting analysis for the City Council to adopt the fee. BACKGROUND The City and Oro Loma have come to agreement to impose a 10% Municipal Services Fee on solid waste customers in the L-3 Oro Loma Area, which consists of the southern (40%) portion of San Leandro. The City wishes to have such a fee as L-3 Oro Loma customers pay a 10% franchise fee (through franchisee Waste Management of Alameda County) to the Oro Loma Sanitary District for its exclusive use on District activities, but while benefiting from direct services provided by the City. The other residents of San Leandro are provided solid waste services under a franchise with Alameda County Industries (ACI) and pay a 10% franchise fee to the City. This generates approximately $900,000 annually. The City solid waste and municipal services, which are provided through the ACI franchise fee in the Oro Loma L-3 Area, include three types. First, are direct services related to refuse and recycling, such as pickup at all City facilities and parks, pick-up of all City street receptacles, debris boxes used by the City, clean-up of illegally dumped trash, city-wide clean up and recycling events. A second municipal service is streets and roads. Garbage collection, treatment and transfer involve heavy vehicles driving on City streets. Damage and wear and tear is particularly heavy on residential streets, which are not built for heavy trucks. The Oro Loma L-3 District contains 34°l0 of the City's streets and road miles.