HomeMy WebLinkAbout25N - AGMT WASTE MGT BILLREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
DECEMBER 18, 2018
TITLE:
APPROVE AN AMENDMENT TO THE SOLID
WASTE SERVICES AGREEMENT WITH
WASTE MANAGEMENT OF ORANGE
COUNTY TO ADDRESS IMPLEMENTATION
OF ASSEMBLY BILL 1826 MANDATES
(STRATEGIC PLAN NO. 4, 1)
IIAA �
C Y MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on ls' Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager and Clerk of the Council to execute the proposed Amendment to the
Fourth Amended and Restated Agreement for Collection and Handling of Solid Waste with Waste
Management Collection and Recycling, Inc. (dba Waste Management of Orange County), that
mitigates potential enforcement action by CalRecycle and promotes participation by commercial
and multi -family locations in mandatory organics recycling through the establishment of an
incentivized commercial recycling program to address implementation of Assembly Bill 1826
mandates, subsidized by the City at a cost not to exceed $627,312, including a 20 percent
contingency, for the remaining term of the agreement, beginning January 1, 2019, through June
30, 2021, including an optional one-year extension, if needed, subject to nonsubstantive changes
approved by the City Manager and the City Attorney.
DISCUSSION
On December 5, 2017, City Council approved the Extension of Fourth Amended and Restated
Agreement with Waste Management Collection and Recycling, Inc. (dba Waste Management of
Orange County). The extension included programming to address the unfunded State legislative
mandates for commercial/multi-family recycling, Assembly Bill 341 (AB 341); and commercial
organics recycling, Assembly Bill 1826 (AB 1826). It provided for immediate implementation,
bringing the City into compliance with State requirements for education and outreach
programming.
In 2018, the State of California (CalRecycle) increased enforcement of AB 341 to require
program implementation. This resulted in the City being formally referred to the CalRecycle
Jurisdiction Compliance Unit (JCU) in early 2018. Because the City had begun implementing
education and outreach programming, and since the extension agreement with Waste
Management (WM) already included commercial recycling services at rates lower than solid
waste services rates, significant implementation is occurring. By demonstrating this level of
25N-1
Approve Amendment to the Solid Waste
Agreement and Appropriation Adjustment
December 18, 2018
Page 2
compliance, the City anticipates that the JCU will not recommend further compliance action, and
the City will continue to avoid fine assessments related to AB 341. However, as of April 2018, the
City is currently under preliminary review by the JCU for AB 1826 commercial organics recycling
noncompliance. Education and outreach programming without program implementation will not
be sufficient to protect the City from formal referral and potential fines assessment.
Organics recycling comes at a significant cost (i.e., containers, trucks, staffing, processing, and
disposal, etc.). The City's extension agreement allowed WM to set rates for organics recycling
services. The current rate, which reflects the actual cost of providing the service, is significantly
more than the rate for equivalent solid waste collection services in the City of Santa Ana. Even
when combined with comprehensive education and outreach, program participation continues to
be minimal and does not meet the mandates of AB 1826.
To avoid formal referral to the JCU and potential assessment of fines, the organics recycling
program needs rates that will incentivize participation. Many Orange County cities are achieving
the highest AB 1826 compliance by designing programming that includes a financial incentive.
Of 20 Orange County cities surveyed, 14 cities, or 70%, (Exhibit 2) provided reduced rates as an
incentive to businesses to implement organics programs and to help achieve AB 1826
compliance. Staff is recommending approval of an amendment to the extended solid waste
services agreement that establishes a new commercial organics recycling program that combines
education and outreach with a reduced rate incentive of 50% of the cost of comparable solid
waste service. The proposed organics rate incentive would allow businesses to incorporate
organics recycling service and to comply with AB 1826 without experiencing significant disposal
cost increases.
The new program would begin on January 1, 2019, and continue through the end of the extended
solid waste services agreement (June 30, 2020) or until the end of the optional one-year
extension (June 30, 2021), if exercised. The total cost, including the optional extension, is
estimated to be $522,760. An additional 20% contingency of $104,552 will be set aside, should
participation exceed estimates. Continued AB 1826 programming will be a component of the
Scope of Work for the new solid waste services Request for Proposals.
STRATEGIC PLAN ALIGNMENT
Approval of the 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. However, increased recycling
activity will divert materials from the landfill, thus extending the life of the landfill system and
recovering valuable recyclable resources.
FISCAL IMPACT
The estimated cost for the new commercial organics recycling program is $522,760 plus a 20%
contingency of $104,552, for a total of $62J1�_Ynds are available for expenditure in Fiscal
Approve Amendment to the Solid Waste
Agreement and Appropriation Adjustment
December 18, 2018
Page 3
FISCAL IMPACT
The estimated cost for the new commercial organics recycling program is $522,760 plus a 20%
contingency of $104,552, for a total of $627,312. Funds are available for expenditure in Fiscal
Year 2018-19 in the Sanitation Fund -Contract Services Professional account (No. 01117643-
62300). As part of the Fiscal Year 2019-20 Budget, a reconciliation of Refuse Enterprise
revenues will be completed to identify the balance available for this and other General Fund
uses. The estimated spending plan is as follows:
FISCAL YEAR
PROGRAM COST CONTINGENCY
TOTAL
FY 2018-19
$40,6101 $8,1221
$48,732
FY 2019-20*
$177,130 $35,426
$212,556
FY 2020-21*
$305,020 $61,004
$366,024
TOTAL:
$522,760 $104,552
$627,312
'Increased annual Program Cost reflects increased mandated ABI826 implementation thresholds.
APPROVED AS TO FUNDS AND ACCOUNTS:
Fuad S. Weiss, PE, PLS Kathryn Downs, CPA
ExecutIrks
Director Executive Director
Public Agency Finance and Management Services Agency
FSS/MLM/CK
Exhibits: 1. Amendment to the Fourth Amended and Restated Agreement
2. Survey of OC Cities' AB 1826 Program Funding Mechanisms
25N-3
25N-4
AMENDMENT TO FOURTH AMENDED AND RESTATED
AGREEMENT FOR COLLECTION AND HANDLING
OF SOLID WASTES GENERATED, PRODUCED AND/OR
ACCUMULATED IN THE CITY OF SANTA ANA
This AMENDMENT TO FOURTH AMENDED AND RESTATED AGREEMENT FOR
COLLECTION AND HANDLING OF SOLID WASTES GENERATED, PRODUCED AND/OR
ACCUMULATED IN THE CITY OF SANTA ANA ("Amendment") is made and entered into
this 18th day of December, 2018 by and between the CITY of Santa Ana, a charter city and
municipal corporation duly organized and existing under the Constitution and laws of the State of
California ("CITY") and Waste Management Collection and Recycling, Inc., a California
corporation dba Waste Management of Orange County ("CONTRACTOR!).
RECITALS
A. The Legislature of the State of California, by enactment of the California Integrated
Waste Management Act of 1989, Division 30 of the California Public Resources Code,
commencing with Section 40000 ("C1WMA"), declares that it is within the public interest to
authorize and require local agencies to make adequate provisions for Solid Waste handling within
their jurisdictions.
B. In the opinion of the City Council of the City of Santa Ana, the public health, safety
and well-being require that the collection, transportation, and recycling, diversion by means of
composting, mulching and/or transforming, and disposal of Solid Waste, including, but not limited
to, the frequency and means of such collection, transportation and recycling, yard waste diversion
or disposal, and the charges and fees therefore, be provided by contract to a qualified contractor.
C. On June 30, 1993, CITY and CONTRACTOR entered into an agreement for such
Solid Waste collection and handling.
D. Since the execution thereof, CITY and CONTRACTOR jointly concurred that it
would be in the best interest of the CITY and the residents therein that the Original Agreement be
revised to provide for Solid Waste collection, recycling and disposal of Curbside Service Units by
means of automated Solid Waste collection vehicles and Solid Waste collection and recycling
plastic carts.
E. On June 1, 1996, CITY entered into an agreement entitled "Amended and Restated
Agreement for Collection and Handling of Solid Waste Generated and/or Accumulated in the City
of Santa Ana" with Great Western Reclamation, a division of CONTRACTOR, to effectuate the
new curbside service collection program.
F. On June 19, 1997, CITY entered into an Agreement entitled "Second Amended and
Restated Agreement for the Collection and Handling of Solid Waste Generated and/or
Accumulated in the City of Santa Ana" with Great Western Reclamation, a division of
CONTRACTOR, to clarify the responsibilities associated with the collection, handling, and
processing of solid waste collected by CONTRACTOR.
Exhibit 1
Page 1 of 4
25N-5
G. On April 3, 2005, CITY entered into an Agreement entitled "Third Amended and
Restated Agreement for the Collection and Handling of Solid Waste Generated and/or
Accumulated in the City of Santa Ana" with USA Waste of California, Inc., a division of
CONTRACTOR, in order to, among other things: (i) extend the term of the Agreement to June 30,
2018, (ii) incorporate new programs to increase recycling and reduce illegal disposal of used oil,
as well as to reduce illegal dumping and litter throughout the CITY and (iii) include measures to
ensure continued compliance with the 50% diversion requirements as imposed by the State of
California.
H. On June 20, 2017, CITY entered into a Fourth Amended and Restated Agreement
with USA Waste of California, Inc., a division of CONTRACTOR, to incorporate the provisions
of previous amendments and to clarify, update and realign other provisions of the Agreement, No.
A-2006-071-01 ("Fourth Amended Agreement")
I. Effective December 5, 2017, the Parties entered into an extension of the Fourth
Amended Agreement, No. A-2017-342, and added certain other provisions, including new
programs to increase recycling throughout the CITY, measures to ensure continued compliance
with state diversion requirements, and clarification of CONTRACTOR's correct legal name. The
Fourth Amended Agreement remains in effect through June 30, 2020 and may be extended through
June 30, 2021 by mutual agreement of the Parties.
J. The Parties now wish to farther amend the Fourth Amended Agreement to include
additional provisions that the Parties have agreed to for the balance of the term of the Fourth
Amended Agreement, including any extension period, if any.
The Parties therefore agree:
1. REDUCED RATE COMMERCIAL ORGANIC WASTE RECYCLING
SERVICES: Effective January 1, 2019, CONTRACTOR shall offer commercial organic
recycling services to each business within City, as the term "business" is defined by California
Public Resources Code section 42649.8, at a reduced rate of fifty percent (50%) of the solid waste
collection service rates for equivalent service levels, as depicted by Exhibit 1 and as thereafter
established in accordance with the Fourth Amended Agreement. On a monthly basis,
CONTRACTOR shall provide the CITY a listing of all businesses receiving organics recycling
service together with account number, address, size of containers serviced, number of containers
serviced, and level of service provided. For each such business, CITY will pay CONTRACTOR
a monthly sum equal to the actual total monthly cost of providing organics waste recycling service.
less the reduced monthly rate paid by the business to CONTRACTOR.
2. Except as modified by this Amendment, all terms and conditions of the Fourth
Amended Agreement, as extended, remain in fall force and effect.
X
N
Page 2 of 4
25N-6
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Fourth
Amended Agreement on the date and year first written above.
ATTEST
MARIA D. HUIZAR
Clerk of the Council
APPROVED AS TO FORM
SONIA R. CARVALHO, City Attorney
By:
J N M. FUNK
Assistant City Attorney
RECOMMENDED FOR APPROVAL
FUAD S. SWEISS, PE, PLS
Executive Director
Public Works Agency
Page 3 of 4
25N-7
CITY OF SANTA ANA
RAUL GODINEZ II
City Manager
CONTRACTOR
Name:
Title:
Description of Service Levels
Solid Waste Monthly
Organics Monthly
Collection Rate per Bin
(50% of Solid Waste
Rate)
Organics Monthly
Description of Service Levels
$48.99
Collection Rate per
$ 173.66
Collection Rate per
2 YARD BIN X 3/WEEK
$ 249.24
Cart
2 YARD BIN X 4/WEEK
Cart (50%of Solid
$162.39
2 YARD BIN X 5/WEEK
$ 400.40
$200.20
Waste Rate)
64 GALLON CART X 1/WEEK
$
46.75
$
23.37
64 GALLON CART X 2/WEEK
$
81.62
$
40.81
64 GALLON CART X 3/WEEK
$
116.57
$
58.28
64 GALLON CART X 4/WEEK
$
151.53
$
75.76
64 GALLON CART X S/WEEK
$
186.43
$
93.22
64 GALLON CART X 6/W EEK
$
233.16
$
116.58
Description of Service Levels
Solid Waste Monthly
Collection Rate per Bin
Organics Monthly
Collection Rate per Bin
(50% of Solid Waste
Rate)
2 YARD BIN X 1/WEEK
$ 97.98
$48.99
2 YARD BIN X 2/WEEK
$ 173.66
$86.83
2 YARD BIN X 3/WEEK
$ 249.24
$124.62
2 YARD BIN X 4/WEEK
$ 324.78
$162.39
2 YARD BIN X 5/WEEK
$ 400.40
$200.20
2 YARD BIN X 6/WEEK
$ 509.61
$254.81
Page 4 of 4
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