HomeMy WebLinkAbout2000-03-14 - AGENDA REPORTS - REFUSE AGMT TERM EXTENSION (2)CITY OF SANTA CLARITA
AGENDA REPORT
PUBLIC HEARING
City Manager Approval:
Item to be presented by. Amelia Rietzel
DATE: March 14, 2000
SUBJECT: RESIDENTIAL REFUSE AGREEMENTS: ANNUAL TERM
EXTENSION
DEPARTMENT: Planning & Building Services
RECOMMENDED ACTION
Open the public hearing, receive public input, close public hearing and direct staff to allow
the automatic annual term extension to the Residential Franchise Agreement to occur, and
begin negotiations with the existing haulers to obtain benefits similar to those that could be
achieved through bidding. If agreement can not be reached within six months, give notice
to terminate the existing franchise. Staff will present a progress report to the City Council
within three months. In addition, explore linking the commercial and residential
franchises. Appropriate $85,000 from City Council Contingency Account 1240-7401 into the
solid waste contractual services account 3811-8001.
BACKGROUND
On January 25°", 2000, the City Council held the annual public hearing for the automatic
extension of the solid waste franchise agreements. The City Council decided to explore the
pros and cons of re -bidding the existing franchise agreements. The City Council continued
the public hearing to March le, 2000.
On March 7, 2000, the City Council participated in a study session to discuss Staff's
findings regarding the pros and cons of re -bidding the franchise. The staff presentation
indicated that the re -bid process could result in reduced rates and enhanced services.
Several alternative courses of action were discussed.
The renegotiation process will require legal and technical assistance. Costs for a
renegotiation process are estimated to be $85,000.
ALTERNATIVE ACTIONS
1. Extend current contract as is - allow automatic extension to occur with no action.
2. Do not allow term to extend - direct staff to renegotiate existing contracts to obtain
benefits similar to those that could be achieved through bidding. If agreement can not
be reached, begin re -bid process within 2 years of end of contract.
APPROWE":20 Axig,,,-nda Item:
3. Do not allow term to extend - do not renegotiate existing contract with haulers, begin re-
bid process within 2 years of end of contract.
4. Do not allow term to extend - return to free market service system, issue permits to
haulers who wish to provide residential service.
5. Do not allow term to extend - direct staff to prepare to begin City provided waste
management services at the end of the existing contracts.
6. Do not allow term to extend - direct staff to begin City provided waste management
services through a direct contract with an outside firm to provide waste management
services as an extension of City staff.
FISCAL IMPACT
Staff is requesting $85,000 from City Council Contingency.
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Improvements to Franchise Agreements & Services
Agreement:
• Ability to audit haulers' financial records
• Performance standards and accountability
• Lower cap on annual rate increases and cap on cumulative rate increases, fixed
price contract for life agreement
• Commitment to higher diversion rate and measurable results
• Set term agreement with a few incentive based extensions (no evergreen
provision)
• Make reachipg diversion goals and Source Reduction and Recycling Element
implementation as a material condition (if not achieved, default)
• Superfund indemnification
• High insurance requirements
• Streamlined dispute resolution process between City and hauler
• Low emission fuel implementation
• Cooperate in identifying the source of solid waste that is erroneously attributed
to the City
Services & Rates:
• Reduced rates for residential and commercial (between 4% and 18%)
• Unlimited, automated, commingled curbside recycling
• Unlimited greenwaste recycling
• Measurable increase in commercial recycling
• Free compost for residents
• Unlimited, free bulky item collection and recycling
• Enhanced public education program
• Free, comprehensive commercial/industrial waste audit program through private
consultant (e.g. Eugene Tseng)
• Household hazardous waste collection program funding and/or implementation
(e.g. LA County pilot in Stevenson's Ranch)
• Enhanced construction and demolition waste recycling and diversion
• Expand types of materials for recycling
• Service trash bins along San Fernando Road
• Diaper recycling program
• Educational stickers for residential and commercial recycling bins
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List of Services
Not Granted to the City
After Negotiations
Reduction of Rates: Reduction of rates across the board for all services
(residential, multi -family, commercial). City rates are some of the highest in the
County.
Service street trash on San Fernando Road: Requested ongoing service of trash
cans along San Fernando road and bus stops.
Ability to audit haulers' financial records: Requested on several occasions to
provide data to support the high trash rates in the City.
Commercial Rate Band: Haulers received 20% rate increase to offset costs of
greenwaste program in 1996. This was done without any analysis of actual financial
impact. Staff requested that the rates be reduced pursuant to adopted rate setting
methodology. Denied.
Greenwaste Program: City wanted a program for $1.50 per household. The
program cost the residents $2.88 and the haulers received a 20% increase in
commercial rates.
Increased Diversion: Although haulers agreed to "take steps" to reach 75%
diversion, they would not make a contractual commitment to actually reach 75%
under penalty. Waste Management has declared that they are not in the recycling
business.
Residential Rate Setting: Latest negotiation resulted in an error in changing the
rate setting methodology for the residential franchise. The method agreed to by the
haulers results in too high of an annual increase. This is one reason why Staff will
need technical assistance.
Franchise Not Subject to City Council Approval: Haulers did not want the
franchise to be up for City Council approval for extensions, rate changes, etc.
Challenging Negotiations: Until recently, the haulers were very reluctant to
provide any service enhancements to residential or commercial customers without
rate increases, studies, and a large expense of staff time and other resources.
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