In a 3-2 split vote, Galt City Council members approved updates to Galt City Ordinance 8.16 regarding solid waste at the Tuesday, March 2 Galt City Council meeting. Vice Mayor Paul Sandhu and Councilmember Jay Vandenburg voted against the updates. Councilmembers also accepted the city’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2020, with a 4-0-1 vote; however, some Councilmembers voiced concerns over the report. Vandenburg chose to abstain from this vote.
Due to the most recent unfunded mandates passed down from the state, City Council members were asked to review, accept and waive further reading of updates for Galt City Ordinance 8.16 regarding solid waste. The revised ordinance addresses the new requirements, mostly directed at businesses.
The California State Assembly and State Senate have passed bills over the last decade, requiring municipalities to sort and divert more and more solid waste from landfills, increasing those requirements year after year.
According to Public Works Director Michael Selling, the new mandates focus on food waste recovery and reducing the amount of waste in landfills, as well as reducing the amount of methane and other greenhouse gasses produced in landfills.
These mandates come with penalties if municipalities do not reach the necessary diversion rates and if they do not update their ordinances to reflect the new requirements.
Hard hit two years ago with mandatory recycling along with a rate hike, local businesses will now be required to have an organics diversion program at an additional monthly cost.
The extra monthly fee is to pay for expenses acquired by Cal Waste for collection of the organic waste, as well as the container used to hold the waste.
Those fees vary by size of service; however, the smallest receptacle will cost a business $87 a month, according to staff.
Rudy Vacarezza, speaking on behalf of Cal-Waste, shared with Council that larger businesses such as grocery stores most likely would not be affected by this new ordinance as they tend to already have organics diversion programs with their food suppliers; however, it will be the smaller businesses that may find themselves asking employees to sort out their uneaten lunch from the regular garbage.
“It’s not the grocery stores, it’s not the restaurants, it’s not the gas stations,” Vacarezza said. “It’s the accounting firms, it’s the dentist offices.”
Both Selling and Vacarezza said that representatives would be reaching out to each of the commercial solid waste customers before implementing the new program.
Selling told Council that there is a couple of exemptions that businesses may be eligible for; however, each business would need to apply for the exemption. Those exemptions include when there is insufficient space to place multiple receptacles and businesses that generate half a cubic yard or less in organics per week.
Both Sandhu and Vandenburg told The Galt Herald that they were uncomfortable voting in favor of the updates due to the excessive rate hike businesses faced two years ago.
“During the original garbage contract, our local businesses were unfairly hit with an excessive garbage rate increase,” Vandenburg said. “The new state mandated ordinance would require an $87 or more additional waste cost to divide the same amount of garbage into three piles instead of two. All of this during one of the toughest business environments the city businesses has ever endured. So, I voted no on behalf of all the local businesses.”
Sandhu’s sentiments mirrored Vandenburg’s.
“We still have 10 months before we have to have all of this in place,” Sandhu said. “And even then, the state may extend that deadline, we just don’t know. Our businesses are already in a bad position due to COVID restrictions. I wanted to push this out a little. We don’t need to be heading the pack on this. We may not be able to stop the state, but we can push this back until three months before we have to enact this.”
Sandhu also was uncomfortable with the lack of details in the newly revised ordinance.
“This is just a framework,” Sandhu said. “I’m not comfortable voting on just a framework. I would like to see more negotiations with Cal-Waste. I want something more solid.”
City Manager Lorenzo Hines Jr. and Finance Director Claire Tyson presented the city’s annual finance report. Brandon Young with Lance, Soll, Lunghard, LLP (LSL), presented the CPA company’s findings as reported in the city’s CAFR.
LSL has issued an unmodified opinion of the city’s financials for the fiscal year 2019-20.
“That letter is giving the city an unmodified opinion, which is the highest opinion that you can receive and the opinion that you want,” Young told Councilmembers.
Although an unmodified opinion is good news, LSL still found “significant deficiency” in the city’s capabilities to reconcile its bank accounts, something that was noted in the last two years’ CAFRs.
According to city staff, the city is still trying to recover from the negative effects of the 2019 cyber attack, and the lack of staffing in the finance department also contributed to the ongoing issue.
LSL did acknowledge that the city is making progress on the bank reconciliations.
“I know you’ve seen it in the past, it’s a little bit different this year,” Young said. “They have improved vastly. What we would like to see moving forward is that there are minimal to no reconciling items on these bank RECs (reconciliations), meaning everything is in fact reconciled. And that they’re able to complete them in a reasonable amount of time after the month ends.
“I would like to see this just fall off in future years,” Young continued. “And I know that Claire and her team are actively working on doing that.”
Mayor Shawn Farmer and Councilmember Rich Lozano questioned Young and city staff regarding the bank reconciliations, expressing their desire to not see this issue again.
Lozano said that Council has two main jobs and those are to manage the city manager and the other is to account for the citizens’ money.
“I take both those very seriously,” Lozano said. “We are on year three of bank records reconciliation issues. I have a huge, huge problem with that. And, you know, just from a basic knowing where your money is; if I were to do that in my own home and be six months out, that would cause a significant issue. And I certainly don’t have a multi-million dollar budget at my home.”
Farmer questioned whether or not city staff took last year’s recommendations for procedural changes regarding bank reconciliations and applied them.
“My problem is, of last year, we were found to have a reconciliation problem and you made a similar recommendation where we should basically start getting on top of that,” Farmer said to Young. “To me, it’s like okay well, we started doing that and started doing a better job at it but we just fell short because of some things that happened. But your statement here seems to imply that there was no policy changes whatsoever. So I mean, were there policies set in place to start remedying that problem?”
Tyson assured Council that changes have been made, and it is just a matter of time for the staff to catch up with the bank reconciliations.
“We’ve made some internal procedural changes and we’ve done those consecutively each of the three years,” Tyson said. “We don’t expect to have it reoccurring, but I had no idea that the ability to gain data at that level would be hindered for three months. I don’t expect that to happen again. I expect our systems to be running; we’ve made additional changes to try and improve.
“When we have significant vacancies, that can delay things and, in the first year of that finding, that was the case; the reviews weren’t happening. Those are happening consistently now. I didn’t expect it to happen a third time. But we continue to make improvements. We don’t expect it to recur again.”
Hines pointed out highlights from the CAFR, including that total assets have decreased by nearly $1 million, and total liabilities have decreased by $1.1 million, while total revenues increased by just over $1 million; however expenditures increased by just over $1.8 million.
Council voted 4-0 to accept the CAFR in its entirety. Vandenburg abstained from the vote.
Vandenburg told The Galt Herald after the meeting that he chose to abstain from the vote because he felt those five days to read over and understand the nearly 200-page document was not “reasonable.”
“Everything presented to us would indicate that there is nothing wrong with the financial statement, and that is why I did not vote no,” Vandenburg said.