Nancy Henry (left) and Mary Kennedy bring their Tea Party messages to City Hall. PHOTO BY TOM GASCOYNE

Related stories: Budget blues City staff explains the workings of the budget in the face of proposed sweeping cuts. CN&R, 06.13.13. Advertisement

After hearing an invocation delivered by an insurance salesman, a tribute to a local auto body shop, and the mayor’s emotional resignation (see “Musical chairs,” page 10), the Chico City Council unanimously adopted three budget policies Tuesday (Aug. 6) that will alter the city’s process of making decisions regarding revenue and spending.

In front of a packed house that included a couple dozen city employees wearing red T-shirts and harboring concerns about job stability and union contracts, the council voted to approve budget policies for the 2013-14 fiscal year, hire a consultant to look into generating temporary cash flow—called a tax revenue anticipation note—to help cover city costs between November and next April, and hire two police officers and retain two community-service officers who were slated for layoffs.

The new team of managers—Administrative Services Director Chris Constantin, City Manager Brian Nakamura and Assistant City Manager Mark Orme—has dramatically changed the structure of city government, reducing departments from 11 to five, laying off employees, and telling the council the city is broke after years of spending money like the proverbial drunken sailor.

The dramatic alterations have drawn the ire of both city employees and the general public, suspicious of their true motives and devotion to Chico, and their concerns were voiced throughout the meeting.

The first budget-related item of the evening was actually adopted during consideration of the consent agenda—those items, as the council agenda states, “considered routine and [usually] enacted by one motion.” In this case, the council pulled, considered and approved a motion to hire a consultant to look into creating a franchise agreement with the city’s two waste haulers—Waste Management Inc. and Recology.

Currently, the city of Chico has what is called a “fee agreement,” which generates $160,000 annually in revenue for the city. A franchise agreement could increase that revenue to as much as $1.5 million or more, said Nakamura. It would also set up specific routes for the two companies to lessen the number of repeat trips the heavy garbage trucks travel on the city’s streets.

“Most cities do have franchise agreements with their haulers, and it is more and more common,” Nakamura said.

But some members of the public questioned the move, noting Nakamura had dealt with the same consultant—R3 Consulting Group Inc.—when he was working for the city of Hemet.

“Consultants are hired to tell us what we want to hear,” said Mark Herrera, a member of the Bidwell Park and Playground Commission. “Why bother when our city manager has already gone through this?” Audience member Randy Coy added that, while the franchise will be a source of revenue for the city, waste-hauling rates will increase.

Nakamura explained that a franchise agreement is needed as a potential source of revenue for a city that may not be able to meet payroll in December.

Local activist Jessica Allen questioned the need for the franchise agreement as well.

“People in Hemet are very unhappy,” she said. “Why would we follow the same path?”

The council then voted unanimously to contract with R3 for $14,500 to explore the possible franchise.

Constantin then advised the council that the city has $3 million less in “spendable” cash than last year, and that the Chico Police Department payroll is 2 percent over where it should be at this time. Meanwhile, the Fire Department payroll is 11 percent over what it should be, in spite of some savings from the reduction of staff at Fire Station 3 at the Chico Municipal Airport.

The two new police officers, who will attend six months of training before hitting the streets, will be paid for in part by cutting 270 hours in current overtime pay, a hit Police Chief Kirk Trostle accepted as part of the city’s economic reality.

“We’ll work with what we get,” he said.

Constantin told the council that budget changes made in June hold staff more accountable to the council and the public. “This puts you in the driver’s seat as far as where spending actually goes,” he said. “This isn’t the last time we’ll see policy changes. This is an ongoing project.”

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A Waste Management truck unloads trash at the Neal Road landfill on March 30, 2011.(Jason…

CHICO — The city of Chico and Butte County are both inching closer to forming waste franchise agreements to regulate regional waste haulers.During a Local Government Committee meeting Wednesday, county and city officials discussed their progress and potential timelines for moving forward. While the county wants to consider a contract by late summer, the city of Chico hopes to have something in place in the next few years.

“There’s still a lot of unanswered questions,” said Linda Herman of the city’s General Services Department, as she noted things are moving forward more so now than ever.

While franchise agreements have been discussed in all of Herman’s 15 years with the city, it was during the most recent permit renewal in 2011 that the discussion intensified and it’s been building ever since.

The county and city are working with the same consultant, which has identified zone options and exclusive operational agreements. Both residential and commercial hauling are considerations.

In a zone option, hauling companies would be given specific areas in which they could operate and residents would no longer have a choice in service providers. Another option is an exclusive agreement in which one hauler would have rights to an entire area.

The driving force behind the desire to find an alternative method is to reduce truck volume, both from an infrastructure and environmental perspective as dictated by the Climate Action Plan.

“One of the things we hear all the time from our citizens is, ‘Why do we have so many trucks running all over our streets and what are the impacts?'” Chico City Manager Brian Nakamura said Wednesday.Waste haulers are supportive of a change because they recognize increased efficiency with zones or exclusive agreements, Herman said. Other benefits include guaranteed revenue and longer-term security.

For citizens, franchise agreements can offer increased services, regulated rates, less congestion and consistency, she said.

No changes will be coming to the city until after a lengthy public process with public input, a bid process and contractual agreements, Herman said. Any number of options are available, including sticking with the current permit system.

Two waste haulers — Recology and Waste Management — currently operate in the city of Chico through permits, which are approved every five years. The existing permits will expire in June 2016, and the goal is to have a change in place by then, Herman said.

Butte County is farther along in the process and looking more toward zoning, said Chief Administrative Officer Paul Hahn. The county has been broken down into equal areas so no haulers lose clients, and negotiations are underway regarding customer service standards and other operational points.

“It’s not just conceptual,” he said. “We have approved ideas and approved zones.”

The hope is to bring the actual contract to the Board of Supervisors by late summer, he said.

“The county’s main goal in this is to make sure the haulers bring their trash to the Neal Road landfill,” Hahn said. “We want that measurable solid waste for a variety of reasons.”

Not only does the landfill need a certain amount of waste to be fiscally sound, but it also allows it to pursue more waste-to-energy opportunities, he said.

What the county would like to see is for the city’s haulers to agree to bring their waste to the landfill.