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Home My WebLink About2008-03-11 - AGENDA REPORTS - FRANCHISE COMPLIANCE REVIEW (2)Agenda Item: CITY OF SANTA CLARITA AGENDA REPORT NEW BUSINESS City Manager Approval: Item to be presented by: Travis Lange DATE: March 11, 2008 SUBJECT: COMPLIANCE REVIEW OF TEMPORARY BIN AND ROLL -OFF BOX FRANCHISEES DEPARTMENT: Public Works RECOMMENDED ACTION 1. City Council receive an update on the compliance of the City's temporary bin and roll -off box franchisees. 2. Approve the recommended course of action for non-compliant franchisees. 3. Direct staff to evaluate the options for opening the franchise. BACKGROUND On November 5; 2005, the City Council approved the issuance of 9 franchises for non-exclusive temporary bin and roll -off box services to assist the City's AB 939 diversion compliance. The franchises went into effect on January 1, 2006. On February 27, 2008, the Solid Waste Subcommittee received a summary of the following information. The franchise program as a whole has been incredibly successful. With respect to overall diversion, the program has yielded great results. In 2006, the haulers collected over 56,200 tons of material, of which over 24,700 tons were diverted, equaling a diversion rate of 44 percent. In 2007, the haulers diverted approximately 27,500 tons of a total of 49,900 tons collected, equaling a diversion rate of 55 percent. The attached spreadsheet ,contains the diversion information for each hauler for 2006 and 2007. Staff regularly responds to notifications of non -franchised haulers that are reported in the City, and promptly requests the immediate removal of their bins. Staff has also identified sections of the Solid Waste Ordinance that may be changed in order to strengthen the activities associated with the removal of non -franchised haulers. Staff will bring to City Council proposed changes to the ordinance in the spring. A PP3 OWED An intregal part of the success of the franchise program is the stipulation that each hauler must divert 50 percent of the materials collected. Four of the City's 9 franchised temporary bin and roll -off box service providers did not meet the minimum diversion requirement of 50 percent during 2006. Those 4 franchisees included: • Blue Barrel Disposal/Waste Management • Burrtec Waste Industries • Consolidated Disposal Services • Residential Rent -A -Bin Staff s course of action to bring non-compliant franchisees into compliance included: Staffs planned approach with the non-compliant franchisees includes: imehne� not End of 2006 Evaluated the diversion information for each the End of 2007 franchised haulers. March 2007 Gave non-compliant haulers notices of deficiencies and During 2008 reasonable time to remedy the deficiency. Staffs planned approach with the non-compliant franchisees includes: imehne� Recommended Actzon�`Summary a End of 2007 Fine the non-compliant haulers $1,000 for each diversion point below 50 percent for their 2007 diversion rate. During 2008 Continue to fine the non -complaint haulers $1,000 for each diversion point below 50 percent during each quarter of 2008. End of 2008 Revoke the franchise of haulers that remain non-compliant based upon their 2008 diversion information. Pursuant to Section 20 of the Franchise Agreement, the 4 haulers that did not achieve the mandated diversion were sent a formal notice of deficiencies that gave them until September 30, 2007, to cure their deficiencies and reach a diversion level of at least 50 percent. Throughout 2007, staff met with each hauler to offer the City's support to assist them in achieving the appropriate diversion level. Staff continued to review the diversion trends each quarter and noticed that, on average, the diversion percentages were following an upward trend. Staff 'determined that it would be appropriate to give the 4 haulers until the end of 2007 to meet the 50 percent diversion requirement. The haulers that did not reach at least 50 percent diversion by the end of 2007 include Blue Barrel Disposal/Waste Management, Burrtec Waste Industries, and Consolidated Disposal Services. Residential Rent -A -Bin was able to achieve 92.5 percent diversion at the end of 10 months in 2007. Residential Rent -A -Bin's diversion information for the remaining months of 2007 has not been submitted. Section 20 of the. Franchise Agreement allows for the remedial action in the event that the hauler fails to reach diversion goals within a reasonable period of time. If City Council approves the recommended action, the franchised haulers that remain out of compliance at the end of 2007 will be fined $1,000 per percentage point in which they are out of compliance. For example, if a non-compliant franchisee has a diversion rate of 46 percent, then the franchisee will be fined in the amount of $4,000. If throughout the course of 2008, any of the haulers mentioned above continues to remain out of compliance with the diversion requirement, staff intends to continue to fine the non-compliant franchisee each quarter in which they remain out of compliance using the same methodology as indicated above. If by the end of 2008, any of the above-mentioned haulers are not in compliance with the diversion requirement, staff plans to take the necessary actions to revoke their Franchise Agreement. Section 20 of the Franchise Agreement gives the City the right to terminate the Franchise Agreement in the event of failing to reach diversion goals. Given the amounts and types of waste these companies handle, the removal of any of the 3 haulers mentioned above could potentially have a significant effect on the residents and businesses of the City. In an effort to minimize the impact, staff proposes that the City Council consider opening up the Franchise Agreement to other haulers in the event that franchises are revoked. Opening up the franchise would not only ensure that the residents and businesses in the City receive the services they need, it would also give the opportunity for other haulers that will comply with the diversion requirement to do business within the City. If directed to evaluate the options of opening the franchise, a comprehensive evaluation would be before the City Council in fall 2008. In reviewing the 2007 annual reports, staff noticed that one of the franchised haulers, Allied Waste Industries, had been using a California Integrated Waste Management Board certified third party recycling conversion report, which the City does not accept for diversion credit. Staff intends to follow the same course of action as identified above, commencing with notification for the franchisee formally recognizing their deficiency and allowing reasonable time to achieve the mandated diversion. ALTERNATIVE ACTIONS Other action as determined by the City Council. FISCAL IMPACT There is no fiscal impact from this action. ATTACHMENTS 2006/2007 Temporary Bin and Roll -Off Box Franchise Diversion F-00 IN ju? 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