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Staff to amend San Rafael refuse franchise agreement and rescind vehicle‑impact fee after court guidance
Summary
City staff previewed amendments to the sanitary service franchise agreement and proposed formally rescinding the refuse vehicle‑impact fee after recent legal rulings, noting a roughly $1.5 million annual loss to street maintenance that staff plans to cover temporarily with one‑time funds.
City staff on April 14 told the Finance Subcommittee they will bring amendments to the sanitary service franchise agreement — including updated franchise and cost‑of‑service fees — to the full San Rafael City Council on April 20 and will seek formal rescission of a refuse vehicle‑impact fee after recent legal developments.
Staff said a 2023 independent fee study supports updated fee levels and a separate legal issue requires rescinding the vehicle‑impact component. “We had this study done initially many years ago, and it was updated,” said Corey (sustainability program manager). He added the study examined both a cost‑of‑service charge and a franchise fee tied to right‑of‑way use and that the updated numbers will be included in the amended contract.
Outside counsel Megan Burke told the committee that the governing legal framework has shifted: “A few years ago, the California Supreme Court decided… the decision Zolli versus the City of Oakland, where the court said all of these types of franchise fees… need to be justified under Prop 26,” she said, and noted there is also a vehicle‑code provision that has been interpreted to bar vehicle‑impact fees collected through franchise agreements.
Staff said rescinding the vehicle‑impact fee reduces annual revenue to the general fund by about $1.5 million — revenue that historically supported the city’s street maintenance and pavement management program. Staff said they have identified one‑time funds to cover the short term but that the budget forecast does not assume a recurring backfill. “We are hoping that… there is momentum on a legislative fix coming out of Sacramento,” one staff presenter said, while cautioning that any long‑term remedy is uncertain.
The committee did not take a final action on the franchise amendment at the subcommittee meeting. Staff said they will bring the written contract amendments and updated fee schedule to the full council on April 20 for formal consideration.
