7.3 WASTE MANAGEMENT STRATEGY ALTERNATIVE RECOMMENDATION ENHANCED WASTE COLLECTION ... · 2017. 9....

Council Meeting, 26 September 2017 Section 7.3 –

Waste Service Charge Options

7.3 WASTE MANAGEMENT STRATEGY ALTERNATIVE RECOMMENDATION – ENHANCED WASTE COLLECTION SERVICE AND FURTHER CONSULTATION

Submitting Councillor: Cr Geoff Lake

MOTION

That Council, in relation to Item 4.2 Waste Strategy and Waste Charge Options report replace items 2, 3, 4 and 5 with:

2. having considered these documents, and noting the previous in-principle resolution of Council to implement a separate waste charge and the community support for an enhanced hard waste collection service, now resolves to consult with the community on the following two options: a. Option 1: Maintaining the status quo approach as proposed in the officer report

with an additional hard waste collection service available at a cost of up to $150; or

b. Option 2: Introducing an enhanced waste collection service based on two at-call hard waste collections, two at-call bundled green waste collections and two at-call cardboard collections per year for each property with a separate Environmental Charge (CIV based) and a Bin Charge in line with what is set out in this report.

3. releases the Draft Waste Management Strategy and the proposed waste charges with an at-call service (Option 2) for community consultation including: a. writing a letter to all residents and ratepayers setting out a comparison between

the costs and services associated with either option and seeking responses as to which option they prefer; and

b. consultation with the Environmental Advisory Committee.

INTRODUCTION

As outlined in the Waste Management Strategy report the following resolution of Council was adopted at its 30 August 2016 Ordinary meeting:

“That Council:

Resolves in principle to introduce a separate waste and environmental charge;

Considers this change further as part of the upcoming Waste Management Strategy and as part of the 2017/18 budget process;

Advises the Essential Services Commission of its intention to introduce a separate charge in 2017/18; and

Resolves that consultation occur with the community in relation to future waste services and cost options including the introduction of a separate waste and environmental charge.



Following that, another resolution of Council was adopted at its 29 November 2016 Ordinary meeting:

“That Council:

Considers delaying the proposed introduction of a Waste Charge allowing for the development of a Waste Strategy based on community consultation prior to introducing a Waste Charge.”

This alternative recommendation proposes that in line with the previous resolutions of Council and the community support for an enhanced hard waste collection service, that the community now be further consulted on their preference between two specific, costed and fully described options:

Option 1: Maintaining the status quo approach as proposed in the officer report with an additional hard waste collection service available at a cost estimated at up to $150; or

Option 2: Introducing an enhanced waste collection service based on two at-call hard waste collections, two at-call bundled green waste collections and two at-call cardboard collections per year with a separate Environmental Charge (based on CIV) and a Bin Charge.

Given the preference expressed in the consultation conducted as part of the preparation of the Waste Strategy for an at-call hard waste collection service rather than the current approach of a blanket collection, there is value in Council presenting two fully outlined and costed options for the community to further consider and choose between. BACKGROUND/ DISCUSSION

Option 2 is based around two key changes from the status quo approach which is recommended to be maintained by officers (and which is referred to as Option 1 in this report):

1. it enhances Council’s waste collection service based on an ‘at-call’ system for hard waste, bundled green waste and cardboard in line with community preferences as well as the higher level of service now provided in 24 out of 31 metropolitan councils for hard waste; and

2. it separates from general rates Council’s waste management costs (in line with the practice of 75 out of 79 councils (95% of councils)) which provides for increased flexibility for Council to implement the Waste Services Strategy into the future.

An enhanced service offering Hard waste collection The annual blanket hard rubbish collection that is currently offered by Council is a service that has been phased out by most metropolitan councils. By offering only one collection per year at a fixed time in the year, the service is designed to suit Council and its contractor performing the collection rather than to be dynamic, responsive and adaptable to the end user (i.e. our residents). Four issues arise as a consequence:



1. Monash residents only receive one opportunity per year to have hard rubbish collected compared to residents at most other metropolitan councils who enjoy two or three collections each year;

2. Monash residents are restricted to a fixed timetable not of their own choosing when it comes to managing their hard waste removal whereas residents of other metropolitan councils can organise collections flexibly throughout the year to suit their own circumstances (such as moving house, following a significant purchase such as a new bed or fridge or a major spring clean of their house or garage);

3. increased amounts of illegally dumped rubbish are left throughout Monash as people (often transient renters such as students) move in and out of properties without any option to book a hard waste collection from Council. These residents are also often without the transport means (and sometimes the financial means) or inclination to take such materials to the tip themselves or arrange some other commercial pickup; and

4. the value which Council is able to recover from collecting hard waste is reduced because blanket hard waste collection services are staked out by professional ‘scavengers’ who comb the area of a blanket collection to claim the most valuable items from what is left out for collection.

An ‘at call’ hard waste collection service allows a resident to book a collection online or over the telephone at their convenience and then leave their waste on their nature strip for collection. The following table of metropolitan councils shows that only seven (out of 31 metropolitan councils) still provide an old-fashioned blanket annual hard rubbish collection while the clear majority (20) provide a superior ‘at call’ service with four providing a combination of the two. Table 1. Hard Waste Services in Metropolitan Melbourne1

1 Metropolitan Waste and Resource Recovery Group, Hard Waste Services Leading Practice Guide, 2016

Blanket Collection Booked Collection Combination

Monash

Cardinia

Yarra Ranges

Whittlesea

Stonnington

Moreland

Moonee Valley

Mornington Peninsula

Casey

Greater Dandenong

Knox

Maroondah

Whitehorse

Manningham

Boroondara

Yarra

Bayside

Glen Eira

Port Phillip

Hobsons Bay

Wyndham

Melton

Hume

Maribyrnong

Melbourne

Banyule

Nillumbik

Frankston

Kingston

Brimbank

Darebin



Over the past decade, Council has considered a move to the more convenient and enhanced ‘at call’ hard waste collection service model but has previously decided against this because of what has been a substantially increased cost. While accepting that one blanket collection was an inferior service offering to our residents, we have been of the view that saving money on the collection costs by continuing such a system was more important than increasing service levels for a council with a focus on keeping rates as low as possible. However, with improvements and efficiencies generated by most metropolitan councils with an ‘at-call’ hard waste collection service, the costs of providing such a service have now been reduced significantly to the point that it is now a comparable cost to the ‘blanket’ collection model. The current blanket annual hard waste collection service costs Council approximately $1.2M. When combined with Council’s costs for managing illegally dumped rubbish ($350K) this produces a $1.55M total cost. Officers estimate that an ‘at call’ service would cost approximately $1.72M (excluding increased administrative costs of $105,000). Officers estimate that the current cost for collecting and disposing of dumped rubbish in Monash of $350,000 would also reduce to $250,000, bringing the total annual cost to $2.19M compared to the current $1.55M. Additional services of cardboard and bundled green waste (see below) as part of the at-call service will increase costs by an additional $100K. As discussed above, a booked collection will result in better recycling recovery due to less organised scavenging (a practice which also causes a significant impact on neighbourhood amenity as it often means that undesired hard waste is dislodged and becomes loose when scavengers remove more valuable articles). Consultation conducted as part of the development of Council’s Waste Strategy in February 2017, shows that most participants support an ‘at-call’ booked collection service. Table 2: Hard Rubbish Survey Results



Whilst the survey did not canvas a more attractive at-call option such as the one presented here as ‘Option 2’, most respondents nonetheless indicated a preference for the ‘at-call’ approach. As can be seen from the chart, most respondents preferred an ‘at call’ collection in some form (approx 350 to 180). However, this survey was deficient because it didn't present the most logical option of two or three ‘at-call’ collections without additional cost which is the basis of the hard waste service offered by most of the metropolitan councils which provide an ’at-call’ service. This may well have been the preference of most of the 100 respondents who indicated they favoured ‘another option’ so this makes it potentially a 400+ to 180 result in favour of some form of ‘at-call’ collection service versus the status quo. Therefore, these results probably don't capture the extent of the support for an ‘at-call’ collection over a blanket one – even though they do clearly indicate a clear preference for an at-call service. The question to be considered further in consultation is whether an expanded service is worth the higher cost to Council of around $645K (plus some additional overhead costs). Given the substantial enhancement to this service – a core local government service – it is worth asking the community the question about which approach they would prefer. An electronic booking system would be used to minimise the administrative burden on Council. It would be expected that utilisation of the online booking system would increase over time whilst reliance on customer service staff for over the phone bookings would reduce. Indications from other councils with an at-call hard waste collection service are that over 50% of bookings are done online. Beyond hard waste – reducing dumped rubbish, bundled green waste and cardboard In exploring opportunities for Council to improve its approach to hard waste collection, it was identified that Glen Eira’s broad suite of waste collection services is a leader amongst Melbourne councils. Glen Eira offer three at-call hard waste collections each year but also offer an additional three at-call collections of bundled green waste and three at-call collections of cardboard. They can offer such a vastly superior service for a total cost to their ratepayers of just $1.16M per year (not including internal staff time). On top of this is its annual dumped rubbish cost of $340K bringing the 2016/17 cost to $1.5M (its budget for 2017/18 is $1.6M). With its bundled branches collection service, this brings the total cost for Glen Eira’s service to $1.7M for 17/18. This contrasts to the current cost to Monash Council of our inflexible blanket hard waste collection service and managing dumped rubbish of $1.45M. For comparison purposes, Glen Eira’s population is less than Monash’s population – it is approximately 80%. So even allowing for an uplift to the Glen Eira costs of 25% to equalise population, this produces a comparison of $2.1M based on the population-adjusted Glen Eira model compared to $1.45M for the cost to Monash Council of its current inferior service provision. Officers estimate the new service for Monash for 17/18 would cost an additional $645K which is comparable to the Glen Eira costs.



By delivering these three services along with dumped rubbish under the same contractor, Glen Eira can achieve significant efficiencies. For example, by having its contractor move throughout its municipality every week completing these at-call collections, the contractor also deals directly with any dumped rubbish reported to council or observed by the contractor during its work. I am recommending that at the same time as considering introducing an enhanced hard waste collection service for Monash as part of Option 2, we should also include new collection services for bundled green waste and cardboard, while also seeking to leverage improvements to our approach to managing dumped rubbish in line with the Glen Eira service offering. The Glen Eira experience shows that there are only minor increased costs to offer the cardboard and bundled green waste collection services (approximately $100,000) and these options encourage improved recycling and offer significant convenience and utility to residents. Each of these components is discussed briefly in turn. Bundled green waste collection Offering an additional two bundled green waste collections per year has the potential to be of significant value to the keen gardeners of Monash. While our residents already make effective use of their current fortnightly green bin collection service, what can be fitted into this regular collection is typically limited to routine garden maintenance from fortnight to fortnight such as grass cuttings and garden prunings. Allowing two at-call bundled green waste collections per year in addition to the fortnightly green waste collection service allows residents to receive a convenient collection of any significant work done in their gardens such as tree or bush removals. This is a particular advantage to elderly residents who do not have the means to take such material to the tip. It is estimated that the cost of providing this additional two at-call collections for bundled green waste will be $100,000 per year. Such an offering is in line with Council’s promotion of a ‘garden city’ character, Council’s consideration of setting a bold target to increase the landscaping of the municipality and Council’s its encouragement of residents to properly maintain significant trees to keep them safe. Cardboard collection If residents purchase a new significant appliance or piece of furniture, it often arrives packaged in a considerable amount of cardboard. Such quantities of cardboard are much more than can usually be fitted into the fortnightly recycling collection which for many residents is typically filled every fortnight in any event. Thus, some residents end up not recycling all this packaging material and either leave it lying around, illegally dump it or squeeze some amounts into their general waste bin whenever there is spare capacity. By offering at-call collection of cardboard, this means that residents can arrange twice a year for such ‘bulk’ quantities of cardboard to be conveniently collected. This can also come in handy at Christmas when the number of boxes and other packaging often overwhelms the capacity of the household recycling bin which is already fuller at this time of year from increased entertaining. Indeed, the Glen Eira collection rates in the graph above shows a significant spike in the number of cardboard collections booked during January.



Council currently offers a free cardboard ‘drop off’ service at the Monash Waste Transfer Station which is well utilised. However, offering a kerbside collection service significantly increases the convenience for residents. Additionally, many residents do not have access to car transport and some residents (particularly older residents) do not feel comfortable visiting a transfer station which might be a significant distance from their house). For these reasons, but chiefly for convenience and improving recycling rates, I think it is worth Council introducing a kerbside collection. Dumped rubbish There are also advantages under the Glen Eira model for improving how dumped rubbish is managed. Glen Eira officers have observed that since having their hard waste contractor identify and collect all dumped rubbish every week as part of its at-call service, their officers no longer spend significant internal time or resourcing on managing this problem. Monash waste officers spend significant time managing dumped rubbish and Council has recently introduced changes to how we deal with this issue so that dumped rubbish is now visited multiple times and left out on the street for longer. The advantage of integrating Council’s management of dumped rubbish into the at-call collections is that dumped rubbish will be removed more cost effectively, more efficiently and it will be left out in public spaces for less time than what currently occurs which is a major benefit for neighbourhood amenity. It is estimated that this approach will reduce Council’s dumped rubbish costs from $350K to $250K – a saving of $100K. Managing impacts on amenity In the past the approach of some councils with ‘at call’ hard waste collection services caused concern to some of their residents because it would lead to hard waste being left out on nature strips regularly throughout the year for long periods of time. However, management of the ‘at call’ service has been progressively refined and improved in the better practice councils to the point where it is now delivered efficiently and with minimal impact to the surrounding community. For example, collections are generally done on one particular day of the week with residents able to book a collection up until midday on the day prior to the allocated weekly collection day. Residents can then put their waste onto their nature strip that afternoon or evening and it is collected the following day (generally in the morning). This means that the impact on the neighbourhood streetscape is very limited, hard waste is left out for less than 24 hours and efficiencies of collection can be achieved by the collection contractor systematically and efficiently working through the municipality based upon the booked addresses. Unlike the situation in ‘blanket’ collection councils, there is no competition from professional ‘scavengers’ in ‘at call’ council areas so there is also increased value for council to obtain from the recovery of materials collected.



Funding mechanism Given the estimated increased cost to Council of Option 2 over Option 1 of approximately $745K, it is necessary for Council to fund such an increased cost to the Council budget from beyond the existing rate cap. In a rate-capped environment, and given other budget priorities, it is very difficult for Council to fund such an increase from within the existing rate cap without impacting other existing services. This is likely to be a recurring problem in the future as opportunities arise to enhance Council’s waste management services but Council is constrained by the rate cap. An opportunity exists for Council to implement a separate charge for waste management which ratepayers would pay as part of their rates. The advantages of such an approach is that it allows Council to transparently and fairly apportion its waste management costs across all ratepayers and to be able to adjust this amount each year based upon the actual costs to Council of providing these services. This ensures that Monash residents will not fall behind other councils as improvements in waste management and technologies become available in the future to increase convenience for residents and improve recycling rates in our community. 95% of Victorian councils have this mechanism already in place and it is logical and timely, as part of the funding of an enhanced waste collection service that Monash Council now considers further the introduction of such a mechanism as well. This report proposes that all of Council’s waste management costs be removed from the general rates bill and be recovered by Council through two separate charges collected at the same time as rates are paid:

1. an Environmental Charge – comprising most of Council’s waste costs (save for its kerbside waste collection and disposal costs) which would be based upon CIV property value (thereby resulting in minimal changes to the burden of what ratepayers currently pay); and

2. a Bin Charge – based upon Council’s kerbside waste collection and disposal costs and charged based on the general waste bin size used by each property.

This approach is designed to:

1. incentivise residents to reduce their general non-recyclable waste by opting for a smaller bin size – i.e. a 120 litre bin rather than a 240 litre bin);

2. encourage and promote recycling more generally such as by introducing an improved hard waste collection service, new bundled green waste collection service and cardboard collection service;

3. reasonably closely replicate the current rates contributed by properties across Monash (to minimise fluctuations from the status quo);

4. fund the increased cost of Council’s proposed enhanced waste collection services for hard waste, bundled green waste, cardboard and improvements to managing dumped rubbish; and

5. importantly, enable Council in the future to respond to opportunities for improvements in its waste management services and opportunities for improved recycling as foreshadowed in the Waste Strategy.



These charges could potentially provide many benefits including providing Council and the Monash community with:

protection from escalating costs that exceed the rate cap (and which, without separate waste charges, could only be accommodated in future by reducing other services);

options to fund innovation that greatly enhances current service delivery and which improves recycling rates and resource recovery;

an ability to introduce additional waste services outside the restrictions of the cap; and

a part user-pay service that provides more equity between different ratepayers while retaining most of Council’s waste costs spread collectively across all ratepayers on the basis that there is common benefit derived by all ratepayers from an effective waste management service.

It is important to note that there will be no ‘windfall gain’ for Council from the ‘Option 2’ approach and Council’s general rate revenue would be reduced by the appropriate amount to reflect its existing waste management charges being removed from the general rates pool. The failure of Yarra City Council to do the same is what resulted in widespread condemnation of that council when it attempted to introduce a separate waste charge earlier this year. If Option 2 is to be implemented following the proposed consultation, Council will ensure that all its costs are transparently presented and independently reviewed to give all ratepayers and stakeholders confidence that Council will receive no revenue advantage from the introduction of the separate charges and that the general rates pool is reduced by the amount of the existing cost to Council of providing its current waste collection service. The additional costs of providing the enhanced hard waste, bundled green waste and cardboard collection services will be added to Council’s existing waste management cost base in striking the new charges. The preferred option supported by the community through the consultation would be introduced from 2018/19 financial year. Please see the attached indicative timeframe at Attachment 2 showing how the new system would be implemented if it is ultimately supported by the community. As can be seen from the indicative chart, it is proposed that a final ‘blanket’ hard waste collection service would be provided in August 2018 with residents able to book additional ‘at-call’ collections from 1 February 2019 onwards. Protection from escalating waste costs that exceed the rate cap The 'Fair Go Rates System' legislation which governs the rate capping process, provides for councils with separate waste charges to exclude waste charges from the rate cap. Basically, this enables councils with waste charges (all but four), to adequately fund waste services which have had significant cost increases over many years, including as a result of the introduction of the EPA waste levy that now accounts for over one-third of the cost of every tonne of waste sent to landfill. This system disadvantages any council such as Monash which does not have some waste charge system.



At Monash, 13% of rates revenue is used to fund waste services ($15.24M). This can only be increased by the rate cap set by the Minister each year (2% for 2017/18). Any future increases to the cost of waste services above the cap, must be funded at the expense of some other service or capital project. That would also include any innovative ideas to improve the waste service (such as the future initiatives which are foreshadowed in the proposed new Waste Services Strategy to improve recycling rates). Options to fund future innovation to enhance Council’s current waste services and to reduce environmental impacts The Waste Management Strategy identifies several exciting innovations to enhance the future waste services in Monash including:

organics processing (changing disposal methodology to place food scraps into the green waste recycling regime);

providing options for residents to switch to 80 litre bins (potentially reducing waste to landfill);

introducing a “Call Pick-up” service replacing the annual hard waste collection; and

increasing dumped rubbish clearance and new dumped rubbish mitigation programs. These initiatives (and other initiatives that will undoubtedly emerge over the coming years) have the potential to reduce waste to landfill, therefore reducing the Monash community’s impact on the environment. However, the cost/benefit equation generally flows a long way after an increase is required to fund the innovation e.g. buying new 80 litre bins, implementing at-call booking software, new waste contracts to cover increased service levels and investment in a new processing plant (part funding regional waste initiatives). Without moving to a separate waste charge in line with 75 out of 79 Victorian councils, Monash Council will continue to be seriously restricted in its ability to implement future waste service and recycling improvements. Proposed Option 2 model The following sections describe the proposed Option 2 model to be consulted upon with the community. As outlined above, it is based on the following components:

a significantly enhanced waste services offering (including at-call hard waste, bundled green waste and cardboard collection services and improved management of dumped rubbish);

an Environmental Charge to fund all waste management costs except for kerbside waste collection costs;

a Bin Charge based on the size of bin selected by each recipient of Council’s kerbside general waste collection service; and

a reduction in general rates to reflect Council’s waste management costs being separately charged.



Environmental Charge I am proposing that we identify all of Council’s waste management costs other than the kerbside waste collection costs and bundle these costs into a separate Environmental Charge. This includes approximately $5.3 million of expenditure including: the existing annual hard rubbish, dumped rubbish, litter bin clearance, street sweeping and the Monash Pride crew costs. This would remove these costs from rates and would allow for Council to fund future improvements to waste management from beyond the constraints of the rates cap. The cost of kerbside waste collection (including recycling and green waste) would be recovered from a separate Bin Charge which is outlined in the next section. Removing such a significant proportion of expenditure from the general rates pool has the potential to create a significant impact on how this is apportioned between properties and could impact equity between different ratepayers. For example, if this was all to be rolled into a flat per property charge, the impact would be that residential ratepayers would pay substantially more than commercial/industrial ratepayers and there would be an increased burden for ratepayers living in lower value properties compared to higher value properties. In my view, these impacts from such changes would be unfair and I have aimed to strike a separate charge regime based on approximating as much as possible the existing rate burden. For this reason, I have sought to achieve the following from the model now presented:

maintain the existing proportion of rates between commercial/industrial ratepayers (14%) and residential ratepayers (86%);

provide additional assistance to pensioners to reduce the impact on pensioner ratepayers who have an overall increase in what they are required to contribute under Option 2 compared to what they currently pay in rates; and

minimise fluctuations for all other residential ratepayers from what they currently pay. The current proportion of rates paid by commercial/industrial ratepayers and residential ratepayers can be maintained by adjusting Council’s differential which it introduced a few years ago to maintain the commercial/industrial proportion of the overall rates pool from the year that Council moved form site value to capital improved value as the basis for rating. All ratepayers would pay the Environmental Charge and this would be levied based upon capital improved values (i.e. the same basis as the general rates). This would mean that there would a lesser change for ratepayers under this approach from what they currently pay (with a modest increase being required only to fund the increased costs of the enhanced service offering to be introduced by Council). The following is a breakdown of how the Environmental Charge would be struck:

The current cost of Council’s waste management services: $15.4M

Less the cost of Council’s kerbside waste collection costs: $10.14M (because this would be collected separately as a Bin Charge)

Plus the increased costs associated with Council’s enhanced services: $745K Equals the total amount to be collected by the Environmental Charge: $6M



Bin Charge I am proposing that as well as an Environmental Charge, that we also introduce a separate Bin Charge. This is to recover the costs to Council of providing the kerbside waste collection service. This enables Council to incentivise all properties receiving this service to reduce their waste going to landfill. This is done by a variable pricing structure with a lower charge for the standard 120 litre bin option compared to a higher charge for a 240 litre bin to discourage increased waste to landfill. Most residents currently have a 120 litre garbage bin that, under this proposal will attract a waste charge of $165. The higher charge for a 240 litre bin is proposed to be $289. For ratepayers who do not receive a kerbside collection service, they would not pay a Bin Charge. This recognises that these ratepayers make their own separate arrangements for collection of their rubbish because Council will not provide them with this service. These residents/ratepayers typically live in an apartment or retirement village. There are 1,662 ratepayers/residents that reside in these developments where a planning permit imposed a ‘no-waste-service’ condition. These residents have long contributed to kerbside bin collection in their rates despite being expressly barred from receiving such a service (in contrast to all other services provided by Council from which residents/ratepayers are not expressly barred, even if they may not access them). To minimise the impacts of Option 2 on pensioners, and in line with the objectives set out above, I am proposing that pensioners would receive a significant discount on the Bin Charge fee which they would pay. I propose that the pensioner fee be struck at 50% of the general fees (i.e. $83 for a 120 litre bin). Further, many retirement village residents share a bin service and will be provided for in the proposed charges with a fee of $41 (each) for a 120 litre bin. Monash pensioners will continue to receive a $50 rate discount from Council, in addition to the State Government rate rebate of $223.80 (2017/18 pensioner rebate). Underpinning the rationale for concessions on the waste charge is that rates have become increasingly harder for people to pay and this tends to hit residents the hardest – particularly residents like pensioners who are living off low fixed incomes. Coupled with the shift in rate burden over the past five years away from commercial and industrial ratepayers and to the disadvantage of residential pensioner ratepayers, it is fair and reasonable that Council should provide concessional charges to provide some relief to pensioners in transitioning to the new pricing regime. Attachment 1 at the end of this report shows the comparison (of existing rates) and impacts for pensioners and other residential ratepayers of this approach. The comparisons are based on 2017/18 rates (as declared in the 2017/18 Budget) and the equivalent charges if a waste charge had been introduced. Also in line with current practice, I propose that Council retains the discretion to provide a larger bin at no increased cost above the 120 litre standard option to ratepayers who can demonstrate financial hardship and the need for a large bin (such as because of having a large family).



The Essential Services Commission (ESC) Discussions have been held with ESC to discuss the proposed Option 2 and on how Council could go about introducing a separate charge regime. The ESC’s ‘Fair Go Rates system guidance for councils 2017-18’ outlines the approach to monitoring new waste service rates and charges. The key expectations centre around maintaining revenue neutrality at the time of change and undertaking community engagement to clearly explain the proposed change2. Advice sought from the ESC about introducing a separate waste charge and providing an enhanced waste service at the same time. The ESC advised they do not see any problems, from their monitoring role, if Council chooses to introduce separate waste charges and provide an enhanced waste service at the same time. However, they emphasise the need for Council to undertake community engagement and provide supporting information to the ESC. If Council was to proceed with Option 2 in the future, Council should provide the ESC with supporting documentation showing that the change has a neutral impact for the council and its community. That is, in aggregate terms, the increase in revenue from the service charges should match the reduction in general rates revenue and does not result in a windfall gain. Council can adjust the level of service to be provided (such as the enhanced hard waste collection) to improve waste services provided to residents which will need to be explained, accounting for possible changes in outputs, price, and the quantity and quality of service levels between years. The ESC advise Council should:

identify the introduction of a separate waste charge in Council’s rating policy and strategy;

advise the ESC of the change to the rating policy by October (the year prior to introduction of a waste charge);

consult ratepayers on the proposed introduction of a waste charge;

introduce the charge at the commencement of a financial year;

gradually transition to recovering the full waste costs through a separate charge; and

demonstrate that the introduction of a waste charge has not increased Council’s revenue more than would if the waste costs were recovered through rates with the applicable rate cap (e.g. the introduction of waste charges should be revenue neutral – as outlined in my report above).

The approach outlined in this report is consistent with this advice and, in particular, it focuses on transparency around costs and consultation with the community.

2 refer section 4.8 of the ESC guidance (page 68-69).



Impact of the proposed Environmental Charge and Bin Charge These two new charges allow Council to fairly and transparently move some $15.6M of existing charges (currently rates) outside the rate capping mechanism, providing Council and the community with protection from waste cost increases above the cap and funding capacity for new and expanded waste services in the future. The alternative of leaving it within the cap and funding additional waste services is that there will likely need to be cuts to other valued Council services or otherwise Council will continue to lag other metropolitan councils in being slow to increase waste service levels due to a lack of resources. The following table sets out a comparison of the difference between Option 1 and Option 2 for the Council budget and which shows transparently what Council is proposing:

As can be seen from this table, the increased cost of providing the enhanced services (i.e. at-call collections for hard waste, cardboard and bundled green waste, together with improved management of dumped rubbish) will cost an overall $990K more. This cost comprises:

$645K for the cost of the new hard waste at-call collection service;

$100K for the cardboard and bundled green waste collections; and

$245K for implementation, overhead and management costs (such as extra customer service capability and new software to support the change of system).

COMPONENT Option 1 (status Quo)

Option (Enhanced

service offering with

Enviro charge and Bin

Charge)

All waste costs except for kerbside

collection costs, dumped rubbish and

hard waste 3,557,502$ 3,902,502$

Kerbside collection (all Bins) 10,138,839$ 10,138,839$

Hard Waste collection 1,193,665$ 1,938,665$

Dumped Rubbish 350,000$ 250,000$

Total 15,240,006$ 16,230,006$



Based on the funding model proposed in this report for Option 2, it will have the following impact on ratepayers: A comparison between Option 1 and Option 2 for the following ratepayers (based on the property values listed in line 1):

CONSULTATION

The Waste Management Strategy recommends (amongst other items) that Council consults:

on an additional at call hard waste collection (which would be a fee for service of approximately up to $150); and

a four week community consultation on the Waste Management Strategy The consultation process to date has been limited and residents were not given much in the way of useful alternatives or information to make an informed choice to adequately evaluate or compare competing considerations. I am recommending that we now broaden and simplify our community consultation by asking all residents and ratepayers by letter to choose their preferred option between Option 1 (effectively the status quo approach) and Option 2 (the enhanced service presented in this report). This enables everyone in the Monash community to make a fully informed choice between the two options which can be fully and simply presented to the community. Effectively, this choice can be summarised in the following way: would you prefer to receive a significantly enhanced waste collection service for a small increase (on average) in what you currently pay, or would you prefer things be left as they are? Council can then implement whichever option has greater support in the community.

OPTION 1- Status QuoProperty Value* 500,000$ 899,859$ 1,000,000$ 1,500,000$

Residential Rates 772.40$ 1,390.09$ 1,544.79$ 2,317.19$

Residential Pensioner Rates 498.60$ 1,116.29$ 1,270.99$ 2,043.39$

Commercial/ Industrial Rates 1,005.80$ 1,810.16$ 2,011.60$ 3,017.40$

OPTION 2 Revised Charges

Bin Charge and Enviro Charge (120 Ltr) Bin Charge $165

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$

Residential Rates 875.69$ 1,444.05$ 1,586.39$ 2,297.08$

Saving/(Pay More) -($103.30) -($53.95) -($41.60) $20.11

Bin Charge and Enviro Charge (120 Ltr) -

Pensioners Bin Charge $83

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$

Residential Pensioner Rates 519.39$ 1,087.75$ 1,230.09$ 1,940.78$

Saving/(Pay More) -($20.80) $28.55 $40.90 $102.61

Bin Charge and Enviro Charge (240 Ltr) Bin Charge $289 (One Collection)

Commercial/Indust. 1,212.38$ 1,951.02$ 2,136.01$ 3,059.64$

Saving/(Pay More) -($206.58) -($140.87) -($124.41) -($42.24)

No Bin Charge- Saving (Pay More) $82.17 $147.88 $164.34 $246.51

*Note Average Residential Property value = $899,859



The information to be consulted upon should include full information about the level of service proposed, costs, the likely bin charge amounts and the pros and cons of each of the options. CONCLUSION

This report seeks support for a further but important consultative step that ensures residents and ratepayers can make an informed choice between two quite different approaches to future service provision by Council. The outcome of such a choice is impossible to predict but will unquestionably be illuminating for both Council and the community to understand community service level expectations. This insight has the potential to be valuable for Council beyond just waste services with it providing useful insight into service expectations more generally in other areas as well. The status quo has served Monash well however the consultation completed as part of the development of the Waste Services Strategy makes it clear that many residents want an improved service in line with what I received by most residents in the rest of Melbourne. The approach recommended in this report, allows the community to engage more fully on these considerations and, after receiving the relevant information, to reach an informed view on the following key question: would you prefer to receive a significantly enhanced waste collection service for a small increase (on average) in what you currently pay, or would you prefer things be left as they are?

Attachment 1 (cont’d)


Status Quo V New Waste Charges with 50% Concession



Status Quo V New Waste Charges with 25% Concession

No Waste Charge (Status Quo) Break even

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$ 1,250,000$

Property Rates 772.40$ 1,390.09$ 1,544.79$ 2,317.19$ 1,930.99$

Pensioner Rebate (if applicable) 273.80$ 273.80$ 273.80$ 273.80$ 273.80$

Pensioner Rates 498.60$ 1,116.29$ 1,270.99$ 2,043.39$ 1,657.19$

Bin Charge & Enviro Charge - 120lt Bin 157$

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$ 1,250,000$

Property rates 669.69$ 1,205.25$ 1,339.38$ 2,009.07$ 1,674.22$

Enviro Charge (CIV) 41.00$ 73.79$ 82.01$ 123.01$ 102.51$

Plus Bin Charge 157$ 157$ 157$ 157$ 157$

Property Rates (Full Waste Charges) 867.69$ 1,436.05$ 1,578.39$ 2,289.08$ 1,933.73$

%Movement on Full rates 12.34% 3.31% 2.17% -1.21% 0.14%

$ Movement on Full rates -($95.30) -($45.95) -($33.60) $28.11 -($2.75)

Bin Charge Enviro Charge 120lt (Pensioner) 118$ Pensioner Rates (+ 120 Lt Bin + CIV

waste Charge) 554.64$ 1,123.00$ 1,265.34$ 1,976.03$ 1,620.68$

% Movement on Pensioner rate 11.24% 0.60% -0.44% -3.30% -2.20%

$ Movement on Pensioner rate -($56.05) -($6.70) $5.65 $67.36 $36.50




Status Quo V New Waste Charges with NO Concession No Waste Charge (Status Quo) Break even

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$ 1,200,000$

Property Rates 772.40$ 1,390.09$ 1,544.79$ 2,317.19$ 1,853.75$

Pensioner Rebate (if applicable) 273.80$ 273.80$ 273.80$ 273.80$ 273.80$

Pensioner Rates 498.60$ 1,116.29$ 1,270.99$ 2,043.39$ 1,579.95$

Bin Charge & Enviro Charge - 120lt Bin 151$

Property Value 500,000$ 899,859$ 1,000,000$ 1,500,000$ 1,200,000$

Property rates 669.69$ 1,205.25$ 1,339.38$ 2,009.07$ 1,607.26$

Enviro Charge (CIV) 41.00$ 73.79$ 82.01$ 123.01$ 98.41$

Plus Bin Charge 151$ 151$ 151$ 151$ 151$

Property Rates (Full Waste Charges) 861.69$ 1,430.05$ 1,572.39$ 2,283.08$ 1,856.66$

%Movement on Full rates 11.56% 2.87% 1.79% -1.47% 0.16%

$ Movement on Full rates -($89.30) -($39.95) -($27.60) $34.11 -($2.92)

Bin Charge Enviro Charge 120lt (Pensioner) 151$ Pensioner Rates (+ 120 Lt Bin + CIV

waste Charge) 587.89$ 1,156.25$ 1,298.59$ 2,009.28$ 1,582.86$

% Movement on Pensioner rate 17.91% 3.58% 2.17% -1.67% 0.18%

$ Movement on Pensioner rate -($89.30) -($39.95) -($27.60) $34.11 -($2.92)


Attachment 2


WASTE CHARGE IMPLEMENTATION (START 2018/19)

KEY TASK Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 2019

1Council approves draft Waste Strategy for consultation with or without Waste

Charge and At Call Hard Waste collection optionCouncil

mtg 26/9

2Design community survey on Draft Waste Strategy with choice of Option 1

(Officer recommendation) or Option 2( NOM)

3 Put proposal out for public contultaion (four weeks) via online and hard copy 4 weeks

4 Reconcile Bin data

5early December 2017 - Community consultation period closes and survey

results received.

6January to February 2018 - Community consultation results collated and report

to Council prepared

7February 2018 - Report to Councillor Strategy Meeting and Council Meeting for

decision

8March 2018 - Communications plan put together to advise community of

Council's decision and implementation of plan, ESC advised.

9 March - June 2018 - Preparations for Waste Charge implemented

10 April 2018 - Tender for "At-Call" hard waste service advertised

11 July 2018 - New Waste charge implemented

12 Tender for "At-Call" hard waste service awarded

13 August 2018 - Last blanket hard waste collection conducted

14August 2018 - January 2019 - Contractor start up lead in time and community

education

15 February 2019 - New at call booked collection service commences

Feb

2019

Attachment 3


Note: The final bin charges will be subject to a Bin-count audit and estimated budgeted waste collection costs for 2018/19 that would be disclosed in

Council’s draft 2018/19 Draft Budget (April 2018).

Proposed Bin Charges (these are indicative prices based on 2017/18 budgeted waste service costs)

(Bin charge with a 50% concession for eligible pensioners)

Bin Size Note Charge Numbers Charges

% Take-up

(assumption)

Proposed 120ltr Fee Base Bin Charge 165$ 54,000 $ 8,910,000 75%

Proposed 120ltr Pensioner Fee 50% Discount 83$ 12,500 $ 1,031,250 17%

Proposed 240ltr Fee Resi/Comm 1.75 X 120lt 289$ 3,500 $ 1,010,625 5%

additional bin 240 lt 1.75 X 120lt 289$ 1,236 $ 356,895 1.7%

Tenant Big Bin (Comm/Indust) per

additional 240ltr

Commercial

service 289$ 580 $ 167,475 1%

Retirement Village Shared service

Bin per 2 Units

(charge per unit) 41$ 150 $ 6,188 0.21%

Multi-Unit Development (Residential)

No Service (TP

Req) -$ 1,662 $ -

additional Green Recycling 100$ 226 $ 22,600 0.31%

additional (yellow) Recycling 100$ 133 $ 13,300 0.18%

Total Garbage Charge 72,325 11,518,333$ 100%

Total General Waste Charge (CIV) based on CIV 77,966 6,224,314$

7.3 WASTE MANAGEMENT STRATEGY ALTERNATIVE RECOMMENDATION ENHANCED WASTE COLLECTION ... · 2017. 9....

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