HomeMy WebLinkAbout1999-01-26 - AGENDA REPORTS - RESIDENTIAL REFUSE AGMT (2)F
AGENDA REPORT
City Manager Approval
Item to be presented y:
Amelia Rietzel
PUBLIC HEARING
DATE: January 26, 1999
SUBJECT: RESIDENTIAL REFUSE AGREEMENTS: ANNUAL TERM EXTENSION
DEPARTMENT: Planning & Building Services, Environmental Services Division
RECOMMENDED ACTION
Open public hearing, receive public input, and close public hearing and direct staff to amend the
residential franchise agreements to reflect the agreements outlined in this report. Allow the
residential refuse franchise agreements to automatically extend for a 12 month period.
Each year the City Council is asked to make a determination of whether or not to extend the City's
residential refuse agreements for an additional twelve (12) month term. The residential agreements
have a six (6) year term which began on April 15, 1991. The agreements provide for an automatic
twelve (12) month extension that is activated each April on the anniversary of the adoption of the
agreements. This provision ensures that the agreements always have a remaining term of six (6)
years. In April of 1999, the agreements will be extended to April 15, 2005. The agreement
extension can be terminated by either party, providing that notice of the desired termination is
provided at least 30 days prior to the April 15 activation date.
City of Santa Clarita Resolution 96-43 requires that a public hearing be held annually prior to the
activation of the automatic 12 -month term extension of the City's refuse agreements. The purpose
is to provide residents with an opportunity to publicly express their level of satisfaction with service
performance and any other issues related to the refuse franchisees. After taking public testimony,
the City Council may choose to take action on one of the three options below.
1. Termination of 12 month extension and give notice to bid for new franchise.
2. Termination of 12 month extension only.
3. Extension of agreement for 12 month period.
An analysis of the pros and cons of each of these actions is attached.
AT
r 41 11 1
The public hearing process in 1998 resulted in several improvements to residential refuse service in
the City. Single and multifamily refuse rates were frozen for an additional twelve (12) months.
Collection of recycling materials was increased from biweekly to weekly starting July 1, 1998.
Payment for collection services can now be submitted on a monthly basis, and the haulers are
required to post a complete list of services at the beginning of each year with billing statements. In
addition, these services must be advertised quarterly.
Pursuant to City Council direction to make every attempt to stabilize rates, the City and the haulers
have agreed to extend the residential rate freeze for an additional 12 months, through December 31,
1999. Upon Council approval, refuse rates will have remained unchanged for a total of 3 years and
3 months.
ALTERNATIVE ACTIONS
The City Council may choose to:
♦ Terminate the 12 month extension and give notice to bid for new franchise, or
♦ Terminate the 12 month extension only.
FISCAL IMPACT
None.
ATTACHMENT
Options: Annual Tenn Extension
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CITY OF SANTA CLARITA
NOTICE OF PUBLIC HEARING
TO CONSIDER THE ANNUAL TERM EXTENSION OF
SOLID WASTE AND RECYCLING FRANCHISE AGREEMENTS
IN THE CITY OF SANTA CLARITA, CALIFORNIA
PUBLIC NOTICE IS HEREBY GIVEN:
A Public Hearing will be held before the City Council of the City of Santa Clarita to consider
the annual term and extension for the residential solid waste and recycling franchise
agreements between the City of Santa Clarita and Atlas Refuse Removal Company, Blue Barrel
Disposal company, and Santa Clarita Disposal Company.
The existing residential franchise agreements provide for the term to be automatically extended
by twelve months on April 15 of each year. The City Council has determined that residents will
have an opportunity to express their level of satisfaction with the franchise service performance
prior to the automatic term extension through the process of a public hearing.
The hearing will be held by the City Council in the City Hall Council Chambers, 23920
Valencia Blvd., 1st Floor, Santa Clarita, the 26th day of January, 1999, at or after 6:30 p.m.
Proponents, opponents, and any interested persons may appear and be heard on this matter
at that time. Further information may be obtained by contacting David Peterson, Recycling
Coordinator, Environmental Services Division, at (805) 284-1411, City of Santa Clarita, 23920
Valencia Blvd., Santa Clarita, California.
If you wish to challenge this order in court, you may be limited to raising only those issues you
or someone else raised at the public hearing described in this notice, or in written
correspondence delivered to the City Council at or prior to the public hearing.
Dated: December 29, 1998
Sharon L. Dawson, CMC
City Clerk
Publish Date: January 4, 1999
OPTIONS: ANNUAL TERM EXTENSION - 1999
OPTION I -TERMINATION OF TWELVE MONTH EXTENSION AND NOTICE OF
INTENT TO BID FOR SERVICES
A) PROS
Termination of the annual extension of the franchise agreements and notice to initiate bidding
for residential refuse services would allow for a new agreement and rate structure to be created
through a competitive bid process. In addition, if the City chooses to grant a single exclusive
franchise, rather than three franchisees, all local refuse operations could be managed through
a single hauler, thus eliminating the need for additional coordination.
Legal counsel has also indicated that following the C.A. Carbone vs. Clarkstown decision in
1994, annual term extension provisions in solid waste disposal agreements may be viewed as
an instrument to interfere with competition for solid waste disposal services and raises the
possibility of potential City liability. Terminating the extensions would negate this potential
liability.
B) CONS
Termination of the annual extension at this time would only be applicable to residential
franchises. The commercial agreements are not subject to franchise extension provisions until
the year 2000. The existing franchisees are longtime local businesses that served the Santa
Clarita Valley prior to City incorporation. This option would send a strong signal of
dissatisfaction with the existing franchisees' levels of service and current rate structure. This
would likely be interpreted by the existing franchisees as an indicator of eminent contract
termination. Termination of these agreements would have an adverse financial impact on the
three existing franchisees. During the period before termination the franchisees may choose
to defer capital investments that are necessary to continue high quality service and to assist
in new programs and future waste management plans of the City. An exclusive, or semi -
exclusive franchise could not commence service until 2005. And finally, there is no guarantee
that termination of the existing agreements would significantly improve service or lower rates.
To exercise this option staff must be directed to draft a letter notifying the franchisees of the
City's intent to terminate the extension. The letter must be delivered to the franchisees on or
before March 15, 1999. A separate letter would also be required notifying the existing
franchisees of the City's intent to commence a competitive bidding process immediately prior
to the termination date of the agreements in April 2005.
OPTION II -TERMINATION OF TWELVE MONTH EXTENSION
The overall advantages and disadvantages of this option are similar to Option I. The key
difference with this Option is that a notice of intent to initiate a competitive bidding process
would not be issued. Because this option does not necessarily provide the existing franchisees
with an indication of eminent contract termination, it is likely to provide a greater incentive
to work with the City to implement additional waste and cost reduction programs before the
agreements expire in April 2005.
To exercise this option staff must be directed to draft a letter notifying the franchisees of the
City's intent to terminate the extension. The letter must be delivered to the franchisees on or
before March 15, 1999.
OPTION III - EXTENSION OF AGREEMENT FOR 12 MONTH PERIOD
A) PROS
Extension of the franchise agreements for an additional twelve months will continue the
existing long-term service (six years plus automatic annual renewal) arrangement that has
existed since April 1991. The extension provides the franchisees with confidence that the City
will utilize their services for an extended period of time. This allows the franchisees to make
necessary capital investments to maintain a high level of service. Maintaining the automatic
extension of the franchises motivates the franchisees to maintain a positive working
relationship with the City and residents.
In the past twelve months the franchisees have worked well with the City and residents. With
few exceptions, the franchisees have also presented timely payment of franchise fees and
reporting of disposal/diversion data. The franchisees have been responsive to calls from City
staff and resolving customer complaints.
In addition to providing the services and functions required by the agreement, the franchisees
have also accomplished several other items during 1998 that are noteworthy. These include:
♦ Achieved the 50 percent waste diversion in 1997. This meets the California Integrated
Waste Management Board's diversion requirement 3 years early. Santa Clarita is one
of only approximately 40 cities in California to accomplish this.
♦ Agreed to stabilize Residential Refuse Rates until 2000.
♦ Implemented weekly recycling at no charge to residents on July 1, 1998. This has
resulted in increased recycling throughout the community.
♦ Sponsored and Participated in various Community Events including Pollution
Prevention Week, Arbor Day and Earth Day.
Implemented programs in response to citizen input during 1998 public hearing process.
Includes:
➢ Residents are notified that they can pay their garbage bills on a monthly basis even
when billed every three months.
➢ Franchisees will include a complete overview of services at the beginning of each year
and advertise these services quarterly.
B) CONS
Extends the franchise an additional year. Does not allow the City to obtain benefits putting
the franchise out to bid and possibly acquiring a new refuse service arrangement.
No City Council action is required for this option.
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