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HomeMy WebLinkAbout1997-02-04 - AGENDA REPORTS - REFUSE ROLL-OFF BOXES (2)CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: Mayor Smyth and Members of the City Council FROM: George Caravalho, City Manager DATE: February 4, 1997 1h SUBJECT: FRANCHISE OPTIONS FOR REFUSE ROLL -OFF BOXES AND TEMPORARY BIN SERVICES This item was initially presented at the November 12, 1996 meeting of the City Council. Staff was directed to establish communications with affected independent haulers, continue exploring service arrangement alternatives and report back to the City Council. Attached is a listing of the issues and comments raised collectively by the independent haulers and staff responses (see Appendix 1). Currently, roll -off and temporary bin services are the only type of waste services that are not regulated by the City. This means that numerous roll -off service companies are operating in the City without contracts, operating permits, or licenses. It is estimated that at least 20 percent of the City's waste stream is disposed or diverted through roll -off services and this figure is very likely to increase due to future development and numerous pending construction projects. The estimated total market value of roll -off collection services for the haulers is approximated at between 1.5 to.2 million dollars annually. City records indicate that the three current franchisees, Atlas, Blue Barrel, and Santa Clarita Disposal already haul nearly 75 percent of the local roll -off market. The remaining 25 percent is divided among eight other haulers. It should be noted that there are probably at least eleven other roll -off haulers operating locally that do not provide the City with any disposal/diversion data. A listing of roll -off haulers operating locally and their estimated percentage of market share is attached as Appendix 2. WAR7.`1I.� Analysis indicates a necessity for regulating these types of waste services based on several significant issues. • Prevention of the placement of structurally defective, unsafe and aesthetically offensive roll -off bins on City streets, construction sites and business structures. Mayor Smyth and Members of the City Council Franchise Options for Refuse Roll -Off Boxes and Temporary Bin Services February 4, 1997 - Page 2 • Ensurance that roll -off companies operating in the City are meting certain performance standards and are maintaining adequate levels of insurance to protect the City from potential tort, as well as environmental liability. • Local ability for the City to coordinate diversion programs necessary to comply with 50 percent diversion requirement of AB 939, particularly relating to construction and demolition waste recycling. • Ability to enforce comprehensive AB 939 reporting requirements from all local roll -off operators. • Ability to generate additional local revenue through franchise, permit, or licensing fees that may be used to offset costs of other local programs. Based on 10 percent franchise, permit or license fee, these services could generate between $150,000 and $200,000 in local revenue annually. • Ability to develop service options that allow for limited competition without granting vested property rights to an infinite number of roll -off operators. At the November 12, 1996 meeting, four alternatives were presented to the City Council that would serve to address the various issues described above. The alternatives included two options for granting franchises through a non-competitive process and two options through a competitive process. A detailed analysis of the options are again presented in the handout labeled Attachment A. After conducting additional research and holding discussions with local roll -off operators, staff maintains that Option A is the preferred option based on all available information to this point. Option A recommends that the existing commercial franchises be amended to include roll -off and temporary bin -services. City Council receive this report and discuss options. ATTACHMENTS Appendix 1: Overview of Local Independent Refuse Haulers Issues and Responses as Discussed on December 12,1996 Franchise Option for Refuse Roll -off Boxes and Temporary Bin services - February 4,1997 -Page 2 APPENDIX 1: OVERVIEW OF LOCAL INDEPENDENT REFUSE HAULERS* ISSUES AND RESPONSES AS DISCUSSED ON DECEMBER 12,1996 Hauler Issue: Lingering problems from 1994 Bin Replacement Service (BRS) Program • Original agreements were never enforced • Granting fee and initial franchise fees were never refunded to original participating haulers. Staff Response: • In light of the Clarkstown Decision in late 1994, City Attorney's Office recommended that staff cease enforcement of the original BRS Program. All current options being considered take the Clarkstown Decision into account. • Provisions for the refund of granting, or franchise fees, do not exist in the municipal code or in the original agreements for service. Hauler Issue: Franchising the roll -off market will eliminate service and price competition • Small, independent roll -off haulers often provide services that larger franchised haulers are reluctant to perform. • Franchising often results in fixed rates to customers that are sometimes higher than the typical rates prior to franchising. Staff Response: • Franchise agreements with roll -off haulers would require all grantees to provide the entire range of services requested by customers. Agreements would also require that all services are performed to an established standard. • Option A ( amending the existing commercial franchises to include roll -off services), does not necessarily require the City to establish fixed rates. Rates could remain openly competitive based on market forces, or rate competition could be moderated through a `Yate band" arrangement, much like the arrangement that currently exists for regular commercial accounts. Hauler Issue: Franchise vs. Licensing or Permitting System • Request that City provide explanation of staff's preference for Option A, over other options. • Indicated that if a new, City imposed system had to be implemented, a permit or licensing system would be preferable to the independent haulers Staff Response: • Option A was chosen after thorough staff analysis based on eight primary criteria that included; legal barriers, legal supports, economic issues, level of community support or resistance, public agency precedent, simplicity of implementation, simplicity of enforcement and monitoring and potential for local revenue enhancement. • Licensing and permitting arrangements were investigated by staff, in fact, Option B ( Granting Non -Exclusive Franchises to all qualifying applicants) is very similar to a licensing or permitting system The key obstacles to permitting/licensing arrangements are; difficulty in implementation, enforcement and diversion monitoring. Franchise Option for Refuse Roll -off Boxes and Temporary Bin Services - February 4, 1997 - Page 3 APPENDIX 1: OVERVIEW OF LOCAL INDEPENDENT REFUSE HAULERS* ISSUES AND RESPONSES AS DISCUSSED ON DECEMBER 12,1996 Hauler Issue: • Non -Exclusive Franchise arrangement usually requires grantee to waive "grandfather"rights (five- year notice prior to expulsion) Staff Response: • Staff concludes that most independent haulers currently offering roll -off services in Santa Clarita probably have no entitlement to a five-year notice as defined in California Public Resources Code Section 49520. However, non-exclusive agreements would not necessarily require grantees to waive any presumed rights. Hauler Issue: • What consideration will independent haulers that have established a significant share of the local roll -off market and have demonstrated a consistent history of quality customer and community service and are acknowledged leaders in the industry regarding recycling and diversion be given if Option A is recommended? Staff Response: • Option A is an expansion of the existing commercial franchise agreements with the three current hauling companies and .would not include consideration of any of the numerous independent companies currently operating locally. Hauler Issue: • Is the staff recommendation of Option A subject to change? If not, what other recourse do the independent haulers have? Staff Response: • Based on the criteria established for analysis, the independent haulers did not provide any compelling evidence to merit changing the initial recommendation of Option A. The independent haulers in attendance were informed that the staff recommendation is just that a "recomrnendation", and that the ultimate policy decision is determined by the City Council. They were also informed that a City Council study session would be held on February 4, 1997 to further review the matter before a final decision would be made. Hauler Issue: • If Option A is pursued, how will Cal -Coast Recycling Company be impacted, since it is a sister - company of Santa Clarita Disposal Company, i.e. one of the existing franchisees? Staff Response: • Cal -Coast and Santa Clarita Disposal are separate corporate entities for legal purposes and the City does not have an existing franchise agreement with Cal -Coast. Therefore, if Option A is pursued Cal -Coast will be regarded as an independent hauler and subject to the same consequences as all other independent haulers. •Hauler's in Attendance: Donald Cruikshank -A -Trojan; Alex Dmitriew- Crown; Jay Julien- SCD; Karl McCarthy- Blue Barrel; Steven Larey- Larey Rubbish; Lefty Randall- Rent -A -Bin; Alfonso Rodrigiuez - Roll -Off Services; Pat Salatore - Cal -Coast; Rod Sarkisian- Foothill Waste; Joe Testa - Atlas Disposal; Dennis Vemer- SCD Franchise Option for Refuse Roll-0ff Boxes and Temporary Bin Services - February 4, 1997 - Page 4 APPENDIX 2 LISTING OF ROLL -OFF HAULERS OPERATING LOCALLY AND ESTIMATED MARKET SHARE y- r. W,ia x a 1. A -Trojan Disposal "*ate'3a e$i�CC�'- m a 5600 Alhambra Ave, Los Angeles fia*W veetang~ 0 N. '". X 2. AWM Disposal 4833 Exposition Blvd., Los Angeles 1% 3. American Waste Industries P.O. Box 23430, Los Angeles 0 4. Atlas Refuse Removal Company 21524 Nordhoff Street, Chatsworth 6.2% - X 5) Blue Barrel Disposal 25772 Springbrook Ave., Santa Clarita 53.6% X 6) Cal -Coast Recycling 20833 Santa Clara St., Santa Clarita 10.1% X 7) Crown Disposal Company, Inc. P.O. Box 1081, Sun Valley 13.2% X 8) Eagle Disposal Systems, Inc. 9189 De Garton St., Sun Valley NDA** 9) F & W Construction Clean- Up 13068 Borden Ave., Sylmar NDA** 10) Foothill Waste P.O. Box 925, Sun Valley NDA** X 11) Golden State Fibers 8000 Deering Ave., Canoga Park >1% 12) Haulin Mike 18267 Lost Creek Rd., Santa Clarita NDA** 13) J C Trucking 30306 Bouquet Cyn. Rd., Santa Clarita NDA** 14) J & J Towing and Recovery 19943 Crestview Dr., Santa Clarita NDA** 15) J & M Containers P.O. Box 572107, Sylmar NDA** 16) Larey Rubbish Pick -Up Service, Inc. P.O. Box 901958, Palmdale >1% X 17) Lopez Rubbish Disposal, Inc. 9255 Glen Oaks Blvd., Sun Valley I % 18) Rent -A -Bin 20830 Santa Clara St., Santa Clarita 0 X 19) Roll -Off Services, Inc. P.O. Box 800519, Santa Clarita NDA** X 20) Santa Clarita Disposal Company P.O. Box 1247, Santa Clarita 14.3% X 21) Valencia Disposal 29395 W. Agoura Hills Rd., Agoura Hills NDA** 22) Valley Roll -Off P.O. Box 68, Sun Valley NDA** *Market Share Data is based on quarterly tonnage reports submitted to the City for Calendar Year 1995 **NDA - No Data Available Franchise Option for Refuse Rolloff Boxes and Temporary Bin services -February 4, 1997 -Page 5