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HomeMy WebLinkAbout2001-06-12 - AGENDA REPORTS - DIAPER RECYCLING MOU (2)CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR City Manager Approi Item to be presented DATE: June 12, 2001 SUBJECT: DIAPER -RECYCLING PILOT PROGRAM MEMORANDUM OF UNDERSTANDING DEPARTMENT: Planning & Building Services RECOMMENDED ACTION City Council to approve the diaper -recycling pilot program Memorandum of Understanding between the City, Knowaste, LLC (Knowaste), Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Services, which will serve as a non-binding understanding to implement the pilot diaper recycling program. Direct staff to prepare a contract for the purchase of the Knowaste Diaper Processor II (KDP II) upon the determination of a mutually agreed upon processing agent and location to house the KDP II, subject to City Attorney review. I=L600;06104NI At the April 10, 2001 City Council meeting, staff provided an evaluation of the feasibility of implementing a diaper -recycling program to the Council based on information obtained from several meetings with Knowaste, the haulers, and the SCS Engineers' Diaper Recycling and Collection Feasibility Study. Following a discussion regarding the logistics of the proposed pilot program, Council instructed staff to move forward with the diaper - recycling pilot and to work with Knowaste and the haulers to create a Memorandum of Understanding (MOU) to implement the pilot. Staff met with Knowaste, the haulers, and representatives from Assemblyman George Runner's office on three occasions (May 4, 15, and 24, 2001) to discuss the pilot program and to draft the MOU which outlines the pilot. The MOU was collectively developed and incorporates the recommendations made by SCS Engineers regarding methods to evaluate the success of the pilot to determine citywide applicability. In drafting the MOU, the group sought to create a program that replicated the City's demographics, was simple to implement, and would provide data to project citywide applicability and estimated diversion from recycled diapers. Approval of the MOU prior to June 30, 2001 will meet the State's requirement to have an agreement in place to secure use of the State's $250,000 acquisition grant after the current fiscal year. The MOU addresses the following regarding implementation of the diaper -recycling pilot program: a w/ c Agenda Item u Ju a �� ` L1 rrtou • Parameters of the Program. A total of 500 to 750 participating households will be obtained for the pilot program in three geographical locations of the City that are representative of the City's demographics. The pilot will last six months and can be expanded for another six months upon mutual agreement from the City, Knowaste, the haulers, and the processor. • Education and Survey. Knowaste shall contribute up to $20,000 towards the City's education and survey process to locate sufficient participants and to educate the participants on their responsibilities in ensuring a successful program. • Location of the Processor. Since the City does not have a Materials Recovery Facility (MRF) to house the diaper processor, the City, Knowaste, and the haulers agreed to house the processor in a location within a 25 -mile radius of City Hall. Knowaste is responsible for finding such a location, and the City will not purchase the IDP II until a mutually agreed upon processor and processing location has been determined. • Processor Ownership. The City will maintain sole ownership rights of the KDP II diaper processor. The City will work with Knowaste to develop lease agreements with other agencies and will have the right to approve any leasing agreements. • Funding Commitments. The City will be responsible for $250,000 in one-time startup and acquisition funds. The City will not be obligated to provide any additional funding related to the diaper -recycling pilot. Significant staff time will be used to locate and obtain participants in the program during the survey phase. • Pilot Evaluation. The City will collectively use the participation rate, setout rate, tonnage collected, and tipping fees to determine the success of the pilot program and to make recommendations on the feasibility of continuing the pilot and/or expanding the program citywide. The measures of success are based on SCS Engineers' report on the diaper -recycling program, and if successful, will evaluate the ability to achieve the diversion postulated in the study. • Unsuccessful Pilot. Upon determination that the pilot is unsuccessful, Knowaste will seek other buyers of the KDP II and will attempt to obtain a purchase price of at least $250,000 to reimburse the City of Santa Clarita. If no buyer is found within a reasonable amount of time, Knowaste will refund the City $100,000 and ownership of the processor will be transferred to Knowaste. ALTERNATIVE ACTION 1. Council may modify and approve the MOU. 2. Council may direct staff to continue to work with Knowaste and the haulers and present a revised MOU at the next Council meeting. 3. Other action as determined by the Council. FISCAL IMPACT Funds in the amount of $500,000 are currently budgeted for startup and acquisition of the processor ($250,000 in 3811-8021 and $250,000 in 0001-6714). If no MOU or agreement on how the program will be implemented has been obtained by June 30, the grant provided by State Assemblyman George Runner must be returned to the State's General Fund. Similarly, if no MOU or agreement is reached by June 30, the $250,000 currently allocated in Environmental Services will be returned to the General Fund. The grant received from the state was restricted for acquisition of a diaper recycling processor only, and was conditioned upon not increasing rates to residents to offer the program. Thus, any difference in funding must be met by the haulers, Knowaste, the processor, or through a combination of funding strategies. Memorandum of Understanding between the City of Santa Clarita and Knowaste, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Services. JAF:BAL S:\PBS\ENVSRVCS\SOLWAST2\ COUNCIL\ 2001 \Diaper MOU Agenda.doc ** DRAFT 6/12/01 ** CITY OF SANTA CLARITA DIAPER RECYCLING PILOT MEMORANDUM OF UNDERSTANDING I. Purpose This Memorandum of Understanding (MOU) summarizes the basic elements of the diaper -recycling pilot approved by the Council on April 10, 2001, and facilitates immediate application and implementation. This MOU serves as a non-binding understanding between the City, the refuse franchisees (Blue Barrel Disposal, Santa Clarity Disposal, and Consolidated Services), and Knowaste, LLC regarding the acquisition of one Knowaste Diaper Processor II (KDP H) from Knowaste, LLC. Seed funding for the processor acquisition and pilot startup costs was made available through a grant provided by the 2000/2001 State Budget through support from Assemblyman George Runner and a matching allocation from the City's 2000/2001 General Fund Budget. The 6 -month diaper - recycling pilot program will be offered for no additional charge to the residents of the City of Santa Clarita, and the City of Santa Clarita will not be liable for further anticipated or unanticipated costs related to the collection and processing of diapers. II. Scope of the Diaper Recycling Pilot A. Acquisition. The City of Santa Clarita will enter into a contract with Knowaste, LLC for the purchase of one KDP II and the purchase of a two-year service and maintenance agreement for the price of $500,000. B. Initiation Date. The first week of collection in the pilot will commence no later than the first week of April 2002, with good faith efforts set forth to commence the program between February 1 and March 1, 2002, C. Diaper Recycling Pilot Program. The goal will be to locate 500 to 750 participating single family residents (multi -family residents will not be invited to participate in the pilot program), with a preference placed on finding 750 participants. 1. Distribution. The program will be reasonably distributed within the City in order to reflect citywide demographics and to evenly divide the pilot program among the haulers, with Blue Barrel supplying one truck and Consolidated Services supplying one truck for the collection of the diapers. The pilot locations shall be in three mutually agreed upon geographic locations similar to the following locations: • East Newhall • Northbridge • Area next to Saugus High School 2. US Census. US Census information shall be gathered before the initiation of the pilot to determine the statistical potential of diapers used (number of households with Diaper Recycling Pilot Memorandum of Understanding, page 2 **DRAFT** children under 3) — this will be used to extrapolate results of the pilot across the entire City. 3. Survey. A survey shall be designed and implemented for the pilot program to survey each household in the pilot areas for family demographics (number of children under 3 at the time of the pilot) and willingness of the family to participate in the pilot. 4. Collection Period! The survey will continue to collect information until we reach the 500-750 participating households, as long as the survey remains within the designated geographical areas and within the same route for the franchised haulers. 5. Education Period. Once a list of participating households is complete, each participating household shall receive how-to information pertaining to the program. The information may consist of a brochure and magnet (or other mutually agreed upon materials) with information on their responsibilities in ensuring the success of the program. The survey, collection, and education periods together shall last a minimum of 60 days in order to ensure the proper collection of data and to allow participants sufficient time to become familiar with the procedures and to have their questions answered. 6. Bin Distribution. Upon completion of the survey and education campaign, a diaper - recycling bin (with an agreed upon label) shall be delivered to each participating household and the 6 -month pilot program shall begin. 7. Reporting. The franchisees and processor shall provide monthly reports on household setout rates (percentage of participating households setting out diaper bins), the amounts of material collected and the amounts of recycled product created through the program. D. Term and Service. Six months of weekly curbside collection service will be offered to each residence that elects to participate in the pilot area. E. Diaper Collection Bins. Residences that elect to participate will be provided with one 34 - gallon automated or semi -automated diaper bin that will be set out on a weekly basis on the regular established refuse schedule for the pilot area. F. Bin Labeline. Each bin will be labeled to identify it as a diaper recycling collection container to be used only for the collection of diapers, and the labeling will include all appropriate notices in accordance with common safe practices and all appropriate regulatory agencies. G. Location of the Processor. Since no current recycling processor/MRF exists in the City that is appropriate for diaper recycling activities (i.e., Quality Paper will not be considered as a viable or acceptable location), a MRF outside the City and potentially outside the Santa Clarita Valley will be utilized during the pilot. The City of Santa Clarita's preference is to select a location within a 25 -mile driving radius of City Hall. Upon determination that the pilot was successful and the program will be offered citywide, the processor will remain housed at this facility until such time as it can be relocated to a local MRF in the Santa Clarita Valley. The City of Santa Clarita will not move forward with the purchase of the KDP II until a mutually agreeable processing facility has been identified and secured and a letter of agreement has been executed. H. Processor Ownership. The City of Santa Clarita will maintain sole ownership rights of the KDP, until such time as additional municipalities or other agencies opt to purchase or lease use of the processor. The City will work with Knowaste to develop lease Diaper Recycling Pilot Memorandum of Understanding, page 3 **DRAFT** agreements with other agencies, and shall have the right to approve any leasing agreement. I. Waste Allocation and Assurances. Systems will be mutually developed by the City, the haulers, Knowaste and the processor to ensure that residual waste collected at the processor will be allocated correctly to the City. At any time, and especially if/when additional municipalities or agencies utilize the KDP, the City will have the right to conduct regular audits to ensure that disposed waste is allocated correctly. J. Educational Outreach. Knowaste will provide funding for publicity and educational outreach as necessary for the program. Total outreach and education costs will not exceed $20,000 to be funded by Knowaste, and shall be provided to the City on a reimbursement basis. If the outreach and education costs do not exceed the allocated $20,000, then the remaining funds shall be used for special labels and decals that shall be used on the diaper -recycling bins. III. Scope of Responsibilities and Commitments A. City of Santa Clarita. The City will be responsible for the following: $250,000 in one- time startup and acquisition funding; the City will work with Knowaste and the franchisees to develop and implement the public education and pilot promotion program; working cooperatively with Knowaste's lobbyists to obtain additional state funding; and, review and analysis of all pilot data and preparation of reports and updates to the City Council. The City will not be obligated to provide any additional funding related to the diaper recycling pilot, including acquisition, installation, processing, transport, public education and promotion, collection, or relocation costs. B. State of California. The 2000-2001 State Budget allocated $250,000 through support from Assemblyman George Runner towards one-time startup and acquisition funding. C. Franchised Refuse Haulers. The franchised refuse haulers will each be responsible for the following during the pilot: providing diaper recycling containers to all residents that elect to participate in the pilot area (containers must be standardized across the pilot clusters); providing labeling for the collection bins; collection of set -out diaper containers on a weekly basis and transport of the material to the diaper processor, (facility to be determined); provision of monthly weight reports by pilot cluster to the City; and payment of diaper tipping fees to the processor at $28 per ton for the duration of the pilot program. The franchised refuse haulers will not be obligated to provide additional funds beyond what they have already agreed to in this section. The responsibilities of the franchised refuse haulers identified in this section will be effective upon Council approval of the revised residential and commercial franchise agreements. D. Knowaste, LLC. Knowaste, LLC will be responsible for the following: identification and facilitation of the processor location; lobbying efforts in Sacramento for permanent diaper recycling funding; all installation and startup costs at the MRF beyond the $500,000 allocated by the City and State; promotion and education costs, up to $20,000 on mutually agreed upon means which will be reimbursed to the City within an agreed upon amount of time; and unfunded processing costs will be the responsibility of Knowaste and may be shared between Knowaste, LLC and the processor. Diaper Recycling Pilot Memorandum of Understanding, page 4 **DRAFT** E. NW/Processor Facility. The processor facility will be responsible for the following: processing of all diaper recyclables delivered; development and implementation of a system to track all disposed material, ensuring correct municipal allocation; provision of monthly tonnage reports to the City of Santa Clarita by franchisee; and, unfunded processing costs may be shared between Knowaste, LLC and the processor. IV. Health and Safety Procedures A. As an additional safety measure the City requires that all handlers of the diapers (including the impacted franchised refuse haulers' and processor's employees) follow the proper safety procedures as outlined in Title 8 of the California Code of Regulations section 5193 (8 CCR 5193). B. The franchisees, Knowaste, and MRF must work together with the City to ensure the proper safety for all employees involved in the process and all safety concerns must be rectified before the initiation of the pilot diaper recycling program. V. Indemnification of City, Franchised Haulers, and Processor A. The franchised haulers and processor upon demand of the City, made by and through the City Attorney, shall protect, defend, indemnify and hold harmless City, its elected officials, officers, employees, volunteers and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, injuries, liabilities or judgements, including City's or any other prevailing party other than the City, attorney's fees and costs (collectively, "Claims") arising out of or resulting in any way from the diaper recycling pilot program, unless such Claim is due to the sole negligence or willful acts of the City, its elected officials, officers, employees, agents or contractors. This provision shall survive the expiration of the period during which collection services are to be provided under this MOU. The duty of the franchised haulers and processor to protect, defend, indemnify and hold the City harmless pursuant to this SECTION shall include, but shall not be limited to, the following: Claims by government agencies or other third parties, whether judicial, administrative or otherwise. B. The processor upon demand of the franchised haulers, shall protect, defend, indemnify and hold harmless the franchised haulers, its employees, volunteers and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, injuries, liabilities or judgements, arising out of or resulting in any way from the diaper recycling pilot program, unless such Claim is due to the sole negligence or willful acts of the franchised haulers its employees, agents or contractors. This provision shall survive the expiration of the period during which collection services are to be provided under this MOU. The duty of the processor to protect, defend, indemnify and hold the franchised haulers harmless pursuant to this SECTION shall include, but shall not be limited to, the following: Claims by government agencies or other third parties, whether judicial, administrative or otherwise. C. The franchised haulers upon demand of the processor, shall protect, defend, indemnify and hold harmless the processor, its employees, volunteers and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, injuries, Diaper Recycling Pilot Memorandum of Understanding, page 5 **DRAFT** liabilities or judgements, arising out of or resulting in any way from the diaper recycling pilot program, unless such Claim is due to the sole negligence or willful acts of the processor, its employees, agents or contractors. This provision shall survive the expiration of the period during which collection services are to provided under this MOU. The duty of the franchised haulers to protect, defend, indemnify and hold the processor harmless pursuant to this SECTION shall include, but shall not be limited to, the following: Claims by government agencies or other third parties, whether judicial, administrative or otherwise. D. Knowaste, LLC, upon demand of the City, made through the City Attorney, shall protect, defend, indemnify and hold harmless City, its elected officials, officers, employees, volunteers and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, injuries or judgments, including City's or any other prevailing party other than the City, attorney's fees and costs arising out of or resulting in any way from acts or omissions occurring after completed delivery of collected diaper bins (or other approved containers filled with recyclable diaper waste) by franchised haulers to the MRF/Processor Facility (collectively, "Claims Indemnified by Knowaste") unless such Claims Indemnified by Knowaste are due to the sole negligence or wilfull acts or omissions of the City, its elected officials, officers, employees, agents or contractors. This provision shall survive the expiration of the period during which collection services are to be provided under this MOU. The duty of Knowaste, LLC to protect, indemnify and hold the City harmless pursuant to this Section shall include, but shall not be limited to, the following: Claims Indemnified by Knowaste initiated by government agencies or other third parties, whether judicial, administrative or otherwise. E. Knowaste, LLC, upon demand of any applicable franchised hauler, shall protect, defend, indemnify and hold harmless such franchised hauler, its directors, officers, employees, and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, injuries or judgments, including such franchised hauler's or any other prevailing party other than the City, attorney's fees and costs arising out of or resulting in any way from acts or omissions occurring after completed delivery of collected diaper bins (or other approved containers filled with recyclable diaper waste) by any franchised haulers to the NW/Processor Facility (collectively, "Hauler Claims Indemnified by Knowaste") unless such Hauler Claims Indemnified by Knowaste are due to the sole negligence or willful acts or omissions of such franchised hauler, its directors, officers, employees, agents or contractors. This provision shall survive the expiration of the period during which collection services are to be provided under this MOU. The duty of Knowaste, LLC to protect, indemnify and hold such franchised hauler harmless pursuant to this Section shall include, but shall not be limited to, the following: Hauler Claims Indemnified by Knowaste initiated by government agencies or other third parties, whether judicial, administrative or otherwise. VI. Pilot Evaluation ■ Success Indicators and Evaluation. The success of the diaper -recycling program shall be dependent on several factors that will be determined through the pilot program. The City Diaper Recycling Pilot Memorandum of Understanding, page 6 **DRAFT** shall use the participation rate, setout rate, tonnage collected, and tipping fees in order to determine the feasibility of continuing the program. A. Participation Rate: The measurement of participation is to evaluate within the pilot service area, how many residences elect to participate by requesting a diaper recycling bin that have diaper -age children ('Diaper Households"). 1. Calculation: Participation rate = % of Diaper Households in service area that request to receive a diaper -recycling bin. 2. Target: 70-100% of the Diaper Households in the pilot, B. Setout Rate: Measurement of setout is to evaluate of the Diaper Households that request to participate in the pilot, how many Diaper Households actually setout the diaper bins with collectable material on a weekly basis during the pilot. 1. Calculation: Setout Rate = % of Diaper Households in service area who setout Diaper -Recycling bins on a weekly basis. 2. Target: 70-1001/6 of the Diaper Households setout diaper bins on an average weekly basis. C. Tonnage Collected: Measurement of tonnage is to determine how much tonnage is collected throughout the pilot period, and is collected per diaper -using child (based on calculations provided in SCS Engineering's December 2000 diaper recycling report). 1. Calculation: Based on an average of 125 pounds of diapers generated per child per month, a total of 750 pounds per child generated during six months is expected. 2. Target: Average amount collected per child during the six month pilot is 375- 675 pounds, or 50-90% of the total estimated average generation per child. D. Tipping Fees: Measurement of the cost to recycle the diapers at the processing location. The tipping fee that the haulers must pay for the recycling of diapers must not exceed $28.00 per ton. ■ Reporting Requirements. During the pilot solicitation process, the City will develop a database of all of the participating homes per pilot cluster and the number of diaper producing children per pilot household. On a monthly basis, the franchisees will provide to the City the total tonnage collected per route per week. On a monthly basis, the processor will provide the following to the City: gross tonnage reports by franchisee, types of recycled products and their respective tonnage reports, and disposed waste tonnage reports (by municipality and franchisee, as appropriate). ■ Conditional Pilot Extension. Upon completion of a successful diaper -recycling program the City, Knowaste, processor, and franchised haulers have the option of extending the pilot program an additional six months upon mutual agreement from all involved parties. ■ Unsuccessful Pilot. Upon determination that the pilot is unsuccessful, Knowaste will seek other buyers of the KDP II and will attempt to obtain a purchase price of at least $250,000 to reimburse the City of Santa Clarita. If no buyer is found within a reasonable amount of time (to be determined by the City and Knowaste), Knowaste will refund the City $100,000 and ownership of the processor will be transferred to Knowaste. Diaper Recycling Pilot Memorandum of Understanding, page 7 VII. Timeline **DRAFT** The timeline for completion of the diaper recycling pilot program shall be as follows (the collection of diapers will commence no later than the first week of April 2002): Project Allotted Time -Span City Council reviews and approves the Diaper -Recycling Pilot 1 Day Program MOU June 12, 2001 City Council executes the contract with Knowaste, LLC for the Within 2 weeks of Councils acquisition of the KDP Il. approval of the MOU City Council reviews and approves the franchised haulers revised September 2001 residential and commercial franchise agreement. City, Knowaste, and MRF facility sign a letter of agreement outlining Within 45 days of Council each party's responsibility in the diaper -recycling pilot program. approval of the MOU Knowaste shall prepare the KDP II processor and deliver it to the 120 days MRF facility. The machine will then be connected and prepared for recycling diapers generated in the City of Santa Clarita. City submits a formal notice to the franchised refuse haulers. The 60 days prior to the estimated haulers begin making preparations for the diaper -recycling pilot program start date (April program and begin purchasing the necessary vehicles and containers. 2002 Knowaste and the City will implement lobbying efforts in Sacramento Throughout Diaper - in order to obtain long-term revenue from the State. Recycling Program City conducts a survey in search of 500 to 750 households interested 90 days prior to the estimated in participating in the program in three separate geographical areas. program start date (April 2002) City will commence an education campaign instructing participating residents on what they will need to do to ensure a successful diaper - recycling ro ram. Bins will be distributed to each participating household. 1 week prior to start date The franchised haulers will commence collecting diapers on the 6 months (duration of pilot residents' regular collection day and will take the diapers to the program) processor for recycling. The processor and franchised haulers will submit monthly reports to 6 months (duration of pilot the City providing household setout rates, the amount of materials program) collected, and the amount of recycled product created through the program. City staff will evaluate the success of the pilot program and will Within 1 month after the submit a report and recommendation to the City Council. conclusion of the pilot program City Council will evaluate City Staft's report and will decide whether (Council determination) or not to continue the diaper -recycling pro ram. S:\PBS\ENVSRVCS\SOLWAST2\Dispa\Dispa Recycling MOU.doc Diaper Recycling Pilot Memorandum of Understanding, page 8 **DRAFT** Through execution of this Memorandum of Understanding, Knowaste, LLC, Blue Barrel Disposal, Santa Clarita Disposal, Consolidated Services and the City of Santa Clarita confirm their commitment to work together to further practices and principles that promote and lead to a high quality of life in the Santa Clarita Valley. The foregoing sets forth the Memorandum of Understanding between Knowaste LLC, Blue Barrel Disposal, Santa Clarita Disposal, Consolidated Services and the City of Santa Clarita as of 12001. "CITY" CITY OF SANTA CLARITA George A. Caravalho City Manager APPROVED AS TO FORM: Carl K. Newton City Attorney "FRANCHISEES" BLUE BARREL DISPOSAL Karl McCarthy General Manager SANTA CLARITA DISPOSAL Karl McCarthy General Manager ATTEST Sharon Dawson City Clerk CONSOLIDATED DISPOSAL SERVICES Matt Terrell General Manager Diaper Recycling Pilot Memorandum of Understanding, page 9 "KNOWASTE" KNOWASTE, LLC Nazareth Chobanian Vice President **DRAFT**