65B - INITIATION OF NEW SOLID WASTE SRVS CONTRACT PROCESS

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Authorize Initiation of a new Solid Waste Services Contract Process and Amend and Restate Existing Solid Waste Agreement June 20, 2017 Page 2 through and impact fees, for tracking and transparency purposes, as well as compliance with applicable legal requirements (Exhibit 2). The Proposed Amended and Restated Agreement is a consolidation of all of the previous amendments and agreements and identifies a single franchise fee to replace a number of miscellaneous charges and transfers to the City (i.e., Program Surcharge, Administrative, NPDES, and other fees added to the cost of services). All of the fees from residential, commercial, and industrial services will be consolidated and set forth as a single Franchise Fee of approximately 26 percent (Exhibit 2). The Proposed Agreement does not present any customer rate or service changes. Waste Management has agreed to the terms of the Amended and Restated Agreement. The proposed Amended and Restated Agreement action would not extend the term of the original agreement, which is June 30, 2018. Staff is recommending authorization to negotiate a one-year extension with Waste Management of Orange County to provide sufficient time to complete the RFP process toward a new, long- term agreement. As a part of this extension, the City must immediately address existing program gaps mandated by legislation, which will require modification to the current agreement. Rollout of the Los Angeles commercial franchise system requires transition of approximately 70,000 commercial accounts over the next nine months to a year and may place a strain on equipment manufacturing and delivery capabilities (i.e., trucks, bins, etc.), consequently raising the cost of services to the City. Finalization of County of Orange renewable energy infrastructure plan during this time could provide lower-cost disposal options not currently available. The agreements with Waste Management and Ware Disposal for construction and demolition debris collection, and the Madison Materials Host Fee Agreement will be extended to expire concurrently with the negotiated extension. The RFP process will take approximately 15 to 18 months to complete. Staff recommends releasing the RFP immediately upon completion of the short-term extension negotiation. This will position the City for an effective and timely rollout of the new contract. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #4 — City Financial Stability, Objective #1 (maintain a stable, efficient and transparent financial environment). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT There is no fiscal impact associated with this item. 65B-2