City and Sanitary District Say It's the Other Who Should Take Lead in Passing Impact Fee

Three dollars.

That’s how much more the typical Novato resident would have to pay each month for garbage service to generate $350,000 in annual road impact fees.

The city has suggested that the Novato Sanitary District impose the fee on Novato Disposal Service, owned by the Ratto Group, arguing that the company’s trucks impact city streets and should pay for the wear and tear.

But the Novato Sanitary District, which oversees waste collection for Novato and the surrounding area, says it’s up to the city to pursue a fee increase, either by creating one or by asking voters for a new sales tax measure.

“It’s not our jurisdiction to raise money for Novato,” said Beverly James, the manager of the Novato Sanitary District, adding that any impact fee would be reflected in a rate change. “If the city wants to do something, they need to take action.”

The idea to impose a franchise or impact fee on Novato Disposal Service is not new.

But it was again recently floated by City Manager Michael Frank as a way to generate more revenue for Novato. In his Fiscal Sustainability report, Frank has suggested the district is getting a raw deal from the hauler, who he said could be paying more.

James disagrees with the assessment, saying asking Novato Disposal to pay the $350,000 impact fee without raising rates would be tantamount to asking them to work for free. (Novato Disposal’s financials are not available to the public since they are not a publicly traded company.)

“If we impose additional fees, it would inevitably be passed on to the customers,” she said, adding that commercial and multi-family units would be disproportionately impacted, seeing increases totaling in hundreds of dollars. “We don’t have any extra income sitting around.”

Hence the political stalemate as neither the city nor the district want to be the one raise Novato’s garbage rates, currently the lowest in Marin County.

The average single-family homeowner in Novato pays $18 a month for garbage service. If the sanitary district were to impose a new fee on the hauler, as the city has suggested, the move would result in a 16 percent increase, amounting to $2.88 each month.

But the debate is about a lot more than dollars and cents.

“It’s probably not the amount of money that it’s important,” said Mike Di Giorgio, president of the Novato Sanitary District board. “It’s the principle of the matter.”

Mayor Pat Eklund agrees.

“It’s about fairness. If we do a road fee for garbage, what about all the other large trucks that use city streets like the fire district, UPS and 18-wheelers?” she said. 

On Tuesday, the Solid Waste Committee of the Sanitary District briefly discussed the issue, but decided that the city should take the first step. City Manager Frank was not present (he is currently on vacation), but Finance Director Brian Cochran said the city was limited in what it could do since Novato Disposal’s contract was managed by the district.

“As a city our hands are tied when it comes to generating new revenues, generally, because we have to go the voters to get any new tax approved,” said Finance Director Brian Cochran. “Most cities are generating both road impact and franchise fees.”

Brent Miller, the only resident to speak at Tuesday’s meeting said he was not opposed to an increase, but that the city needed to make a solid case to residents about why it needed the money and how it would utilize it.

“It sounds like a stealth tax,” Miller said. “The residents have already approved a half-cent sales tax three years ago. But they may give you more money if you make a convincing case for it.”

What do you think? Would you be in favor paying a bit more each month to generate revenues to improve city streets?

CORRECTION: A previous version of this story misquoted Finance Director Brian Cochran. The city must seek voter approval before passing any new taxes, although it does not need voter permission to implement new fees. Novato Patch regrets the error.