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HomeMy WebLinkAbout2001-04-24 - AGENDA REPORTS - MOU SOLID WASTE SERVICES (2)CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR City Manager Item to be pre; DATE: April 24, 2001 SUBJECT: CITY OF SANTA CLARITA SOLID WASTE SERVICES MEMORANDUM OF UNDERSTANDING DEPARTMENT: Planning & Building Services RECOMMENDED ACTION City Council to approve the Memorandum of Understanding between the City of Santa Clarita and Atlas Consolidated Services, Blue Barrel Disposal and Santa Clarita Disposal, which serves as a non-binding understanding between the City and franchisees to implement the service enhancements in the Council approved refuse package until the revised residential and commercial franchise contracts have been executed, subject to City Attorney review. BACKGROUND On March 13, 2001, the City Council approved the negotiated franchise modification package with the haulers and directed staff to prepare legal documents that would reflect state of the art commercial and residential franchise agreements. Since approval of the negotiated package on March 13, the haulers and the City agreed that it would be in the City's, hauler's, and community's best interest to be able to immediately implement the new programs and service enhancements that are included in the package. Staff estimates that the new franchise agreements will be approved by the City Council by July 1, 2001. Therefore, until the final residential and commercial contracts have been executed, the City and the haulers prepared a Memorandum of Understanding that outlines each party's understanding of the commitments under the package approved by the Council, which will be included in the new franchise contracts. This MOU will be in effect until either the final residential and commercial franchise agreements are approved and executed or July 1, 2001, whichever occurs first. ALTERNATIVE ACTIONS 1. Other actions determined by the City Council. Continued:U/T Agenda Item: C.Qcittt�' FISCAL IMPACT No fiscal impact on the General Fund is anticipated at this time. However, upon execution of the residential and commercial franchise contracts, the General Fund will obtain up to an additional $112,000 per year from the haulers for solid waste and recycling discretionary activities. In addition, net franchise fees received by the City may either increase or decrease from the following two modifications: fees collected from seniors citizen residential accounts will be reduced due to the reduction in the senior citizen rate ($22.13 to $15/month), and revenue from fees collected from commercial accounts may be increased due to the requirement that all commercial accounts will be transitioned into compliance with the rate band. ATTACHMENTS Memorandum of Understanding between the City of Santa Clarita and Atlas Consolidated Services, Blue Barrel Disposal and Santa Clarita Disposal JJL:JAF S1PBST ..el.e dES/Solid WReWC".W4-24 healer MOU ARA. CITY OF SANTA CLARITA BLUE BARREL DISPOSAL, SANTA CLARITA DISPOSAL, AND CONSOLIDATED DISPOSAL SERVICES i MEMORANDUM OF UNDERSTANDING I. PURPOSE Pursuant to Council direction, City staff negotiated with the franchised municipal solid waste haulers to obtain service enhancements and a rate reduction/freeze similar to those that could be achieved through re -bidding the franchise. After nearly 11 months of negotiations, the City Council, on March 13, 2001, approved a package deal of improvements with the existing franchisees and directed staff to prepare the final franchise agreements for Council review and approval. The City ("City") and the franchised municipal solid waste haulers ("franchisees") are eager to begin offering the programs, services, and rate reductions developed in the package. Due to the complexity in working out the details to be included in the new residential and commercial franchise agreements, this Memorandum of Understanding (MOU) summarizes the basic elements of the final package approved by the Council on March 13, 2001, and facilitates immediate application and implementation. This MOU serves as a non-binding understanding between the City and the franchisees; no formal agreement will exist until such time as the elements in this document have been incorporated into the residential and commercial franchise agreements, and have been approved and executed by the City and the franchisees. II. SCOPE OF THE MODIFICATIONS A. Residential Franchise Modifications L Contract Enhancement: The term for the residential agreement is fixed at ten years, effective on the date of City execution of the new franchise agreement and expiring at midnight on the day preceding the 10`s anniversary of the date of execution by the City. 2. Service Enhancement: Residential rates will remain frozen for four additional years at the current rate of $22.13, with the four-year term beginning on January 1, 2002 and terminating on December 31, 2006. Beginning January 1, 2007, the franchisees will have the right to increase residential rates on an annual basis based on the modified CPI increase (see point 4 below). 3. Service Enhancement: All individuals age 60 and older shall be offered the senior citizens discount, at the amount of $15/month, which is also frozen through December 31, 2006 along with the regular residential rate. Beginning January 1, 2007, the franchisees will have the right to increase the senior citizens discount on City of Santa Clarita, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Disposal Services Memorandum of Understanding Page 2 of6 an annual basis (along with the regular residential rate) based on the modified CPI increase (see point 4). 4. Contract Enhancement: Beginning January 1, 2006 the franchisees shall have the opportunity to raise residential and senior citizens rates by 40% of the change in the Los Angeles -Anaheim -Riverside CPI, with a cap on the annual increase of 2%. The franchise agreement will have a set criteria that will determine if the rate increase request is reasonable, and the City Council will have the right to approve a lower rate increase than the proposed increase based on the criteria. Reasonable criteria will be determined by City staff in mutual agreement with the franchisees and will be incorporated into the final franchise agreement. This rate adjustment option shall be available to the franchisees on an annual basis for the balance of the franchise term. 5. Contract Enhancement: Franchisees are required to provide the City with route verifications and must provide the City with notice prior to changing any routes. Additionally, the franchisees must provide reports to the City reporting current routes and any changes that have been made to them, and the residential franchise agreement will provide a schedule of due dates for the route reports. 6. Contract Enhancement: The City will perform, at a minimum, one audit of the franchisees' residential records per year. The audit will include a review of each franchisee's accounts, review of information related to the calculation and submittal of franchise fees to the City, and review of information related to the allocation of disposed waste to the City. 7. Contract Enhancement: Franchisees will pursue good faith efforts to divert a minimum of 75% of the total waste stream by December 31, 2005. 8. Contract Enhancement: Franchisees will indemnify the City against any potential fines associated with SCAQMD Rule 1193 as it relates to fleet vehicles of the franchisee. Additionally, the franchisees will comply with any and all legislation regarding environmental policy — including a requirement for the use of re -refined oil in fleet vehicles as long as the re -refined oil does not conflict with the vehicle's warrantee. 9. Contract Enhancement Franchisees shall provide enhanced Superfund liability, which includes liability from disposal facilities not owned or operated by the grantee. Additionally, the franchisees will have annual meetings with the City to discuss ways to reduce their respective potential CERCLA and other liabilities to third parties. 10. Contract Enhancement: Franchisees shall obtain enhanced insurance coverage. Insurance coverage shall increase workers compensation to a minimum of $1 million aggregate, $5 million auto insurance and $5 million per occurrence, and $20 million for general liability. 11. Service Enhancement: Franchisees shall provide, as part of the existing residential refuse rate, a 65 -gallon commingled recycling container for the purpose of providing single stream curbside recycling services. The container will be labeled indicating what products may be placed in the containers, as well as a number to call that will provide an up to date listing of acceptable materials. All City of Santa Clarita, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Disposal Services Memorandum of Understanding Page 3 of6 new commingled containers will be rolled out, and the source -separated containers picked -up, as soon as possible after the execution of this MOU. 12. Service Enhancement Franchisees agrees to expand the types of recyclables collected curbside to all recyclables accepted by the recycler and that fit in the recycling container. The City reserves the right to expand the list of collectable items, through mutual agreement with the franchisees, throughout the term of the franchise. 13. Service Enhancement Franchisees agree to offer residential accounts two additional bulky item pick-ups for a total of four per year per account at no additional cost to the City or the residents. Because of the provision of four coupons per account per year, bulky waste drop-offs will no longer be free. 14. Service Enhancement Franchisees agree to provide enhanced public education by adding the following services in addition to the current education requirements (expenditure guidelines, where applicable, will be mutually developed by the City and the franchisees and incorporated into the final franchise agreements): i. Educational lids on recycling and green waste bins. ii. Two presentations per quarter per hauler to schools and a twice yearly report to the City regarding the effectiveness of the presentations. iii. Quarterly presentations to multi -family communities and a twice yearly report to the City regarding the effectiveness of the presentations. iv. Development of public education materials designed specifically for multi- family communities. v. Rotating radio and television ads. vi. Production of a half-hour informational video, with new videos being produced every two to three years. 15. Service Enhancement Franchisees will provide all residential accounts with a minimum of two coupons per year that may each be redeemed for a one -cubic yard bag of compost. 16. Service Enhancement Franchisees shall provide enhanced green waste recycling services. Enhanced services shall include allowing landscaping and gardening services to place green waste material, generated exclusively at the residential account, in the resident's green waste container for collection. The materials that can be placed in the green waste container include wood/lumber and all other acceptable green waste provided that the material fits in the container. The franchisee will no longer be required to provide 12 additional green waste collections. 17. Service Enhancement: As required by the current residential agreements, franchisees shall provide recycling services to all multi -family premises that do not currently have recycling services by July 1, 2001. The City will grant exemptions in cases where recycling service is not practical. 18. Service Enhancement All single family units that currently have residential bin services must also have recycling services. 19. Service Enhancement Franchisees shall discontinue baggy services at multi- family residential locations and shall provide the locations with 65 -gallon automated trash containers at 75% of the regular residential trash rate where City of Santa Clarita, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Disposal Services Memorandum of Understanding Page 4 of6 applicable. Additionally, the franchisees shall provide all residents receiving the baggy service with a single 34 -gallon bin for the collection of recyclable materials. B. Commercial Franchise Modifications 1. Contract Enhancement: The term for the commercial agreement shall coincide with the residential agreement and is fixed at ten years, effective on the date of the City's execution of the new commercial franchise agreement and terminating at midnight on the day prior to the tenth anniversary of the date of the City's execution of the new commercial franchise agreement. 2. Service Enhancement: Commercial rates will remain frozen for four additional years at the current rate band, with the four-year term beginning on January 1, 2002 and terminating on December 31, 2006. 3. Contract Enhancement: Exhibits A and B of the commercial franchise shall be amended to delete the word "new" in the note following the rate schedules. Removal of the word "new" in Exhibits A and B of the commercial fee schedule shall allow all haulers to compete equally within the commercial rate band for all commercial accounts. For a commercial account to receive the "recycling rate," 50% of their refuse service must be for recycling services. The City and the franchisees will develop mutually agreeable criteria to evaluate actual utilization of the recycling services, as well as the exemption and appeals processes, which will be incorporated into the franchise agreements. The City will work with the franchisees to amend the Santa Clarita Municipal Code to codify the requirements, exemptions, and enforcement process, where applicable and consistent with State legislative guidelines. 4. Contract Enhancement: Franchisees must provide notification of changes to the collection schedule on billing statements immediately prior to all holidays. 5. Contract Enhancement Franchisees agree to provide an additional $112,000 in discretionary revenue (or in-kind services) annually to the City for discretionary programs such as HHW, commercial waste audits, and special pickup/cleanup events. Each franchisee's portion of the $112,000 will be determined each fiscal year based on the percentage share of the total commercial franchise fees paid to the City for the previous fiscal year. 6. Contract Enhancement Franchisees will pursue good faith efforts to divert a minimum of 75% of the total waste stream by December 31, 2005. 7. Service Enhancement: Franchisees shall adjust all commercial account rates to be in compliance with Exhibits A and B of the Commercial Franchise Agreement. The compliance deadline shall be determined prior to the completion of the revised commercial franchise agreement. 8. Service Enhancement: The City shall perform a minimum of one audit of the franchisees commercial records per year. The audit will include a review of each franchisee's accounts, review of information related to the calculation and submittal of franchise fees to the City, and review of information related to the allocation of disposed waste to the City. City of Santa Clarita, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Disposal Services Memorandum of Understanding Page 5 of5 C. MRF/Transfer Station Prior to presenting the finalized residential franchise agreement and the finalized commercial franchise agreement to the City Council, the franchisees must prepare a memorandum of understanding (MOU) which will present a description of how the franchisees plan to build a Materials Recovery Facility (MRF)/Transfer Station. The MRF MOU will present a timeline and a scope of work for the project. The MRF MOU will also describe how the franchisees will develop a detailed plan for the MRF within two years of submitting the MRF MOU, and how the MRF will be fully operable within four years of submitting the MRF MOU. III. TERMS AND TIMELINE This MOU shall serve as a summary of the basic elements of the modifications to the current residential and commercial franchise agreements that were approved by the Council on March 13, 2001. The City reserves the right to develop state of the art franchise agreements while integrating the basic elements identified under Section 11 in this MOU. This MOU shall be made void on July 1, 2001 or upon the approval and execution of the revised residential and commercial franchise agreements, whichever occurs sooner. Through execution of this Memorandum of Understanding, Blue Barrel Disposal, Santa Clarita Disposal, Consolidated Services and the City of Santa Clarita confirm their commitment to work together to further the 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 Blue Barrel Disposal, Santa Clarita Disposal, Consolidated Services and the City of Santa Clarita as of 2001. "CITY" CITY OF SANTA CLARITA ATTEST George A. Caravalho Sharon Dawson City Manager City Clerk APPROVED AS TO FORM Carl K. Newton City Attorney City of Santa Clarita, Blue Barrel Disposal, Santa Clarita Disposal, and Consolidated Disposal Services Memorandum of Understanding Page 6 of6 "FRANCHISEES" BLUE BARREL DISPOSAL Karl McCarthy General Manager SANTA CLARITA DISPOSAL Karl McCarthy General Manager CONSOLIDATED DISPOSAL SERVICES Matt Terrell General Manager