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HomeMy WebLinkAbout2006-11-28 - AGENDA REPORTS - RESID FRANCHISE AGMT DISPOSAL (2)NEW BUSINESS DATE: SUBJECT: DEPARTMENT: Agenda Item: ; O CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval: Item to be presented by: November 28, 2006 AMENDMENT TO RESIDENTIAL FRANCHISE AGREEMENT WITH BLUE BARREL DISPOSAL TO EXECUTE NEW IMPLEMENTATION DEADLINES City Manager's Office RECOMMENDED ACTION City Council approve resolution for the first amendment to the Agreement Between City of Santa Clarita and USA Waste Of California. Inc., dba Blue Barrel Disposal (Franchise Agreement) to execute new implementation deadlines for the use of alternative fueled vehicles and a volume -based rate structure pilot program. The amendment will set the new commencement date for both programs for April 15, 2007 and require Blue Barrel to submit an updated transition plan outlining implementation deadlines for all programs. The amendment will also extend the deadline to meet minimum recycling requirements (50 percent) from the quarter ending September 30, 2006 to the quarter ending March 30, 2007. BACKGROUND In November 2003, Council approved a new Residential Franchise Agreement with Waste Management Inc./Blue Barrel Disposal (Blue Barrel). The Franchise Agreement outlines several service requirements for Blue Barrel and often provides implementation deadlines to ensure the requirements are met in a timely manner. Blue Barrel has been working with the City to implement the required programs. Alternative Fueled Vehicles. Section 4.5.2 of the City's Residential Franchise Agreement requires Blue Barrel to use alternative fueled collection vehicles for their operations in the City beginning April 15, 2006. The deadline has passed, and currently only nine of the 46 collection vehicles are running on alternative fuels. A major issue affecting the implementation of this Adopted: 07 requirement is the fueling infrastructure. Blue Barrel prefers the use of Liquefied Natural Gas (LNG) vehicles but the closest fueling stations are located outside of the Santa Clarita Valley. Blue Barrel is currently fueling their nine LNG vehicles at a facility in the Antelope Valley. Staff recommends extending Blue Barrel's deadline until April 15, 2007, to incorporate alternative fueled vehicles into their collection fleet pursuant to the Franchise Agreement requirements. Staff has encouraged Blue Barrel to research and evaluate the various other types of alternative fueled vehicles that are currently available in order to become compliant by the new commencement date. If Blue Barrel were unable to meet the deadline as outlined in the amendment, they would be subject to pay liquidated damages for each day of non-compliance. Staff also recommends updating Section 4.5.2 to reflect changes in local air quality laws, removing references to the South Coast Air Quality Management Districts (SCAQMD) and instead reference the California Air Resources Board, United States Environmental Protection Agency, and all federal, California, and local laws and regulations. This change has been made in response to a court decision overruling some SCAQMD requirements that interfered with federal regulations. Volume -Based Rate Structure Pilot Program. Section 4.15.1 of the Residential Franchise Agreement requires Blue Barrel to begin a volume -based rate pilot program. Upon a six-month notice from the City, Blue Barrel will select three neighborhoods of approximately 500 participants per neighborhood and begin running exclusive routes in the pilot neighborhoods for three months prior to the commencement of the program. The pilot will offer the participating neighborhoods variable rates for their collection service. For example, a resident that generates a small volume of waste can opt to get a smaller trash cart at a lower collection cost. Residents that generate a large volume of waste can choose to pay a higher rate to have the current 96 -gallon trash cart. The program offers cost incentives to residents to generate less waste and potentially increase the City s diversion rate. The program must be revenue -neutral for Blue Barrel. This means the current rate for the collection of a 96 -gallon cart will go up, but residents will have the opportunity to save money by getting a smaller cart for a lower monthly rate. The City sent a six month notice to Blue Barrel on October 11, 2005, outlining the requirements to begin a volume -based rate structure pilot program in conjunction with the commencement of the Residential Franchise on April 15, 2006. Due to changes in management at Blue Barrel, they asked the City to begin the volume -based rate pilot program at a later date so they would be able to implement programs one at a time. Staff followed up with Blue Barrel after the commencement of the Franchise and were told they decided not to implement the program due to a pending rate issue that they believed could potentially confuse customers. If this amendment is approved by Council, Blue Barrel would be required to implement the volume -based rate pilot program, and shall do so on or before April 15, 2007. If Blue Barrel were unable to meet the deadline as outlined in the amendment, they would be subject to pay liquidated damages for each day of non-compliance. Minimum Recycling Requirements. Pursuant to section 4.2.6, Blue Barrel shall recycle or divert a minimum of 50 percent of all solid waste collected by the quarter ending September 30, 2006. Blue Barrel's diversion rate for the quarter ending September 30, 2006, was calculated at 40 percent. Staff recommends amending the current Franchise Agreement to extend Blue Barrel's deadline to meet the 50 percent diversion requirement to the quarter ending March 31, 2007. Transition Plan. Prior to the commencement of the Franchise Agreement, Blue Barrel submitted a transition plan outlining important program deadlines and commencement dates for future programs. If Council approves the amendment, Blue Barrel shall submit an updated transition plan addressing the change in due dates for the use of alternative fueled vehicles, implementing a volume -based rate pilot program, and meeting their minimum recycling requirements. Staff will review the transition plan to track Blue Barrel's progress and work with them to ensure all deadlines are met in a timely manor. ALTERNATIVE ACTIONS Other action as determined by the City Council. FISCAL IMPACT None by this action. ATTACHMENTS Resolution Amendment