HomeMy WebLinkAbout2000-11-14 - AGENDA REPORTS - SOLID WASTE HAULER NEGOTIATION (2)CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
City Manager Approval:
Item to be presented by: "Jeffrey Lambert
DATE: November 14, 2000
SUBJECT: STATUS REPORT ON CONTINUING NEGOTIATIONS WITH
FRANCHISED SOLID WASTE HAULERS
DEPARTMENT: Planning & Building Services
Receive status report and direct staff.
Pursuant to direction of the City Council, City Staff has been negotiating with the
franchised municipal solid waste haulers operating within the City to secure service
enhancements and a rate reduction similar to those which could be achieved through re-
bidding the franchise. Negotiations have been under way since April of this year.
In October, a consultant completed a technical study to assist the City in the negotiation
process. The study covered a variety of cost and operational issues designed to help City
staff maximize service enhancements, while keeping the financial vitality of the solid waste
haulers intact. A summary chart of the study is attached.
The following is a summary of the service enhancements agreed to by all parties (please
refer to the attached memo):
• Enhanced public • Enhanced green waste • Collection of more types
education services services to accept lumber of recyclable materials
of certain sizes
• Assistance with the local • Mandatory multi -family
compost program. recycling
• Addition of two more • Assistance with the new
bulky item collections per Commercial Waste Audit
year (4 collections/year) Program
• Various contractual
upgrades and
modernization of
franchise language
"1gt eda If6sl"'IffilLt
6.0 SUMMARY
Table 7: Financial Summary of Proposed Program Changes
Parentheses are used to indicate a negative number.
Proposed Program Change
Change In Franchisee
Change in City Franchise Fee
Revenue or Costs
Revenue
Change to automated residential
$572,000 cost reduction
N/A
recycling collection
Reduce residential rates by 10%
($887,900)
($98,000)
Adjust rates by 400k of CPI with a 2%
Consistent with HF&H Study.
N/A
annual cap
No greater than $0.44 annual
Increase at current rate.
Replace rate band with rates 10%
$265,000 - $540,000
$45,000 - $90,000
greater than current maximum
Increase rate band by 12% to 15%
$200,000 - $300,000
$30,000 - $45,000
Include regular rolloff service in the
$125,000 - $210,000
$34,000 - $54,000
commercial franchises
Include temporary rolloff service in
$310,000 - $450,000
$60,000 - $100,000
the commercial franchises
November 8, 2000 19
CITY OF SANTA CLARITA
INTEROFFICE MEMORANDUM
TO: Mayor Darcy & City Council Members
FROM: George A. Caravalho, City Manager
DATE: June 14, 2000
SUBJECT: UPDATE ON PROGRESS OF REFUSE FRANCHISE
NEGOTIATIONS
On March 14, 2000 the City Council directed staff to renegotiate the existing refuse
franchise agreements to acquire benefits similar to those that could be achieved through a
bidding process. The City Council also requested that staff provide an update on the status
of the negotiation process in June 2000. The purpose of this memorandum is to provide this
requested update to the City Council.
Staff and the franchised haulers have met on several occasions over the past few months to
discuss the City's and franchisee requests for contract enhancements. Following is a list of
the items that the City and the franchisees have agreed upon to date:
• Franchisee fleets will include alternative fuel vehicles in greater percentages over time.
Specific targets and time lines will be included in the franchise amendment. This item
is tied to the term of the franchises.
• Franchisees will utilize re -refined motor oil in vehicles within the fleet that are no
longer under warrantee from the manufacturer and will evaluate the possibility of using
re -refined motor oil in the entire fleet.
• Franchisees will provide quarterly reports of tonnage collected within the City
separately from the reports received from the landfills. This replaces the requirement
to reroute collections to solely City and solely non -City routes to address inaccurate
reporting by the landfill. This issue has become a key issue with cities in Los Angeles
County that are unable to meet their AB 939 requirements.
• Agreed to evaluate the impact and cost of a commingled residential recycling program.
Franchisees will begin a pilot program in three different areas of the City in July. The
program will run for three months. After the pilot the City and franchisees will
evaluate the effectiveness and cost and make a recommendation to the City Council
regarding citywide implementation of the program.
• Lumber will be added to the items that can be recycled through the yard trimmings
recycling program. The condition is that all material fit inside the 65 -gallon container.
• Two additional bulky waste tags will be provided to each resident each year, increasing
the total number of free curbside bulky item collections to four per year. Unlimited drop
off at local franchisee facilities will continue.
• Franchisees will provide a total of $15,000 every two years for the creation of an
educational video regarding the City's waste management programs. This video will be
used by City staff and franchisee staff when making presentations to schools,
businesses and others. The contribution of funds will be split based on existing
residential market share.
• Franchisees will conduct presentations at two local schools each quarter throughout the
year. City staff will assist with this effort.
• City will consider allowing franchisees to leave notices regarding improper and
inadequate use of recycling bins to help to enforce the City's municipal code
requirement that no recyclable item can be placed in the trash.
• Additional recyclable material will be added to the list of materials to be collected at the
curb. New items will be added if the local recycler will accept the material.
• Free compost give away will be added to the annual River Rally Event in addition to the
compost given away each year at Arbor Day.
• City will create a self -haul permit and enforcement program.
• Senior citizens will be defined as 60 years or older. The current franchise does not
provide a definition.
• Add language to franchise that requires notification of customers of changes in
collection scheduling due to holidays. Although franchisees already do this, the
language will formalize the notification.
• Baggy service (several plastic bags instead of rigid containers) will be changed to fully
automated trash service using a 65 gallon bin and 32 gallon recycling bin at 75% of the
trash rate. This service is only available to existing baggy service areas and will not be
offered to any other customers.
• Enforce mandatory recycling at multi -family developments. This includes the
franchisee approaching all multi -family accounts to design an effective recycling
program for the units, providing educational material for residents and informing the
owner/manager that recycling is mandatory in the City.
• The provision of free service to the City in the amount of $112,000 annually will be
changed to provide $45,000 in cash to the City to hire a waste audit consultant. The
consultant will visit businesses throughout the community to assist them in increasing
their recycling efforts to help move the City toward a 75% diversion goal. These funds
will be split according to existing residential market share and paid to the City evenly
over 12 months.
Negotiations continue relative to the following key issues:
• Increasing the franchisees' commitment to the 75% diversion goal from a good faith
effort to a requirement of both of the franchise agreements.
• Changing the annual rate adjustment calculation to more accurately reflect the level of
historical annual rate changes. The proposal is to change the calculation from the CPI
with a cap of 5% to 40% of the CPI with a cap of 2%.
• The results of the commingled recycling pilot and study will be folded into the rate
change negotiation.
• The term of the contract is proposed to be one of the following: fixed with an optional,
one-time extension or continue as an "evergreen" or annually renewing with City
Council approval.
• Reduce the residential franchise rate by 10%.
• Collection of funding for Household Hazardous Waste collection program through the
waste hauler billings. Implementation of this item will depend upon the amount of any
rate reduction that may be possible and the City's ability to charge a fee for HHW
services and collect it through hauler billings.
• Clarify the language of the current commercial "recycling incentive." This includes
establishing a mutually agreed upon penalty structure for acting outside of the
parameters of the franchise in offering prices for commercial trash and recycling
services.
• Add permanent roll -off and compactor services to the commercial franchise agreements.
Other issues that have been raised and are being considered include:
• Providing the City with the ability to audit the franchisees financial records to make a
determination regarding the level of profit and services that are provided in the
community. This information would be helpful in rate setting discussions. The
franchisees have informed the City that their financial records are tracked on a regional
level, therefore, financial records for the City's service do not exist.
• Update superfund liability and insurance liability language. The franchisees' attorneys
are reviewing the language proposed by the City's attorney.
Implementation of a diaper recycling program. Staff and the franchisees have reviewed
the proposal by Knowaste to purchase a diaper recycling machine for $500,000. Staff,
the franchisees and the local recycler agree that a diaper recycling program can be
implemented in the following fashion:
• City pass ordinance that makes placing diapers in the trash unlawful (similar to all
other recyclable materials)
• All residents may receive diaper recycling service, but they must sign up for it with
their hauler in advance.
• Residents with diapers will be given a container and/or bag in which to place their .
diapers at the curb for once a week collection.
• A separate recycling collection vehicle will be routed to each home once per week for
collection.
• The diapers will be taken to the local recycler for processing. A tipping fee will be
charged for each load of diapers delivered to the recycler to pay for operating and
maintenance costs associated with operating the diaper recycling machine and the
disposal of liquid and solid waste that results from the recycling process.
• The products of the recycling process will either be sold or disposed of appropriately
at the landfill or at a sewer treatment facility.
This system could provide the City with a cutting edge diaper recycling program. In
order to consider implementing such a system several key pieces of information are
needed. These include: number of households that have diapers to recycle, collection
costs, container/bag costs, processing and disposal costs, commodity value, permitting
requirements, disposal agreements, etc. Until these basic facts are known staff and the
haulers have no basis for supporting or not supporting a diaper recycling program.
Atlas Consolidated submitted a letter to the City suggesting that the franchise change
the market share of residential and commercial services in the City. In order for this to
occur one of two courses actions must be taken: 1) all parties to the franchise
agreements must agree to change the split of the market share and amend the
franchises accordingly or 2) the City Council must terminate the "automatic annual
term extension and notify the franchisees of the City's intent to bid the contract at the
end of the current term of six years.
Overall, the negotiations are proceeding very well. Staff and the franchisees hope to
finalize the changes by the end of September. The City Council will receive a full report in
public session regarding the proposed changes to the franchise agreements. If you have any
questions please contact me, Jeffrey J. Lambert, Director of Planning & Building Services,
at 255-4913 or Amelia Rietzel, Environmental Services Coordinator, at 255-4337.
GAC:JJL:AJR
\ \CITYHALL2\DEPT\PBS\ENVSRVCS\SOLWAST2\FRANCHIS\REBIDOO\ccupdate.doc