Making rules for waste disposal can be a messy business in Palo Alto, as the City Council learned last month when it pondered a new law that would require all local businesses to recycle and compost.

At the time, members lauded the goal of the new law – less trash heading to landfills – but took issue with some of the details of the ordinance.

Councilman Greg Scharff criticized it for being to broad and ambiguous, possibly subjecting residential customers to fines for placing trash in the wrong container. And Mayor Karen Holman complained that the proposed ordinance didn't make sufficient reference to salvaging of materials during demolition.

Last week, however, the revised version of the law coasted through the council's Finance Committee. Provided it receives the expected approval of the full council, the new law would require all businesses and multi-family complexes to subscribe to recycling and composting services and to sort waste accordingly.

The new law is the latest step in Palo Alto's drive to divert waste and encourage composting. In July, the city's trash hauler, GreenWaste, began collecting for the first time organic waste such as food scraps, yard trimmings and food-soiled paper.

The residential program, which also included a kitchen bucket for every customer, is expected to divert about 3,000 tons of compostable materials annually, according to a recent report from the Public Works Department.

Yet, as city officials have frequently pointed out, more can be done. About 70 percent of the trash that gets discarded into black containers can either be recycled or composted, according to staff. The commercial sector is seen as a huge source of this waste, with an estimated 7,000 tons of commercially generated compostable material ending up in landfills. Thus, it also represents for the city the best opportunity to boost its diversion rate, which has hovered around 80 percent since 2010.

"The commercial sector generates about two-thirds of all of our garbage that goes to landfill disposal," Solid Waste Manager Ron Arp told the Finance Committee on Dec. 15. "About 40 percent is compostable. We really view this as a great opportunity to cost-effectively get this material, keep it diverted from landfill disposal and help our 'zero waste' goal."

While the goal of reaching zero waste is widely seen as aspirational rather than realistic, officials believe the new composting and recycling requirements could bring the city much closer to this ideal.

Phil Bobel, assistant director of Public Works, said that if the city can achieve a 90 percent diversion rate (an achievement that the new ordinance is expected to facilitate), "that would be virtually having achieved our goal."

The Finance Committee praised staff's work on the revised ordinance, with Chair Greg Schmid calling it "a major step forward."

"It's been very successful on a household basis," Schmid said. "I think reaching 90 percent would be a real achievement."

While commercial customers have had the option to subscribe to composting and recycling services since 2009, thus far only about 30 percent have signed up, according to a Public Works report. When asked in a 2014 survey why they don't subscribe, many commercial customers simply responded that it's not required.

"Despite the fact that nearly all would save on their utility bill, most did not feel that subscribing to compost service was worthwhile," the report stated.

The new ordinance would require everyone to subscribe to the two services and would set a series of penalties for refuse miscreants. If a cart is contaminated with the wrong category of waste, the trash hauler would place a tag on the cart but still collect the waste.

A second violation would bring a GreenWaste representative to the site for waste-sorting training; a third would elicit a letter from the city, describing the contamination, detailing the prior efforts to resolve the problem and warning of possible fees ahead.

Fines wouldn't start at least until the fourth violation. That's when the customers would have the option of either removing the waste from the container and paying a "return trip" fee or keeping the waste in there and paying two fees: one for the trash hauler's return trip and another for "extra solid-waste pick-up." The return trip fee is currently $77, while the fee for extra sorting and disposal would be based on the size and type of container.

Any further violations could lead to fines, according to the city.

The enforcement of the commercial program would roll out in three phases. For food establishments, multi-family complexes and the city's largest commercial customers (those that generate 8 cubic yard of garbage per week), the new requirement will kick in on April 1. This will affect about 150 existing customers that do not subscribe to the city's composting service.

On Jan. 1, 2017, the ordinance would start to apply to all commercial customers that generate 2 cubic yards or more (about 220 that don't currently subscribe). And on Jan. 1, 2018, it would spread to all the remaining commercial customers (about 600).

While rolling out the ordinance, Public Works also plans to address some of the major concerns from local businesses about the new requirement. GreenWaste is now promoting its "bin wash" service to help customers comply with the ordinance's cleanliness requirements, according to the Public Works report.

Officials are also planning to step up its education and outreach efforts toward both businesses and multi-family customers. According to Public Works, "education and outreach to customers, janitorial staff, workers and tenants will be the primary method of ensuring compliance."