HomeMy WebLinkAbout2012-05-22 - AGENDA REPORTS - SOLID WASTE FRANCHISE AMEND (2)Agenda Item: 10
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval
Item to be presented by:
DATE: May 22, 2012
Travis Lange
:W
SUBJECT: RESOLUTION FOR FIRST AMENDMENT OF THE AMENDED
AND RESTATED AGREEMENT TO ALLOW ANNUAL RATE
ADJUSTMENT FOR FRANCHISED SOLID WASTE SERVICE
PROVIDER
DEPARTMENT: Public Works
RECOMMENDED ACTION
City Council adopt a resolution for the First Amendment of the Amended and Restated
Agreement Between the City of Santa Clarita and USA Waste of California, Inc., (Waste
Management) for Residential Solid Waste Management Services, allowing an adjustment in
their residential rates by 2.36 percent based on the formula outlined in their Franchise
Agreement.
Authorize the City Manager or designee to execute the amendment, subject to City Attorney
approval.
BACKGROUND
USA Waste of California, Inc., (Waste Management), is the City's exclusive solid waste hauler
for residential services. Pursuant to Section 6.3 of the Franchise Agreement (Agreement), Waste
Management may request rate adjustments for their next rate year (July 1, 2012, through June 30,
2013), if they submit a request for the adjustment by the first of April and follow specific
guidelines for a rate increase, as outlined in Section 6.4 of the Agreement. City Council's
discretion for regular rate increases is limited to determining, based on substantial evidence,
whether the requested rate adjustment meets the requirements, as set forth in the Agreement.
Pursuant to provisions in the Franchise Agreements, the solid waste haulers requested and funded
a third -party audit. This audit was managed by City staff and received by the City Council in
October 2010. The audit results showed both haulers experienced an annual loss while providing
Adoµi Rtso Q- 2(p
services to residents and businesses in the City. During 2007 and 2008, Burrtec lost 14 percent
and 10 percent respectively. During 2007 and 2008, Waste Management lost 22 percent and 17
percent respectively.
The haulers also provided 2009 and 2010 financial data. The two years of data have not been
verified by a third party, but they are consistent with the third -party audit results performed by
the auditor. The data shows losses of 11 percent in 2009 and 13 percent in 2010 for Burrtec and
21 percent in 2009 and 20 percent in 2010 for Waste Management.
Annual reviews, conducted on both haulers, have shown them to be in compliance and the City
has been happy with the services provided to residential and commercial accounts. Since
Burrtec's franchise commenced in August 2004, there has been an average of less than one
complaint a month from over 2,000 businesses operating in the City. Waste Management
conducted a random survey of over 150 households for overall customer satisfaction. The
findings identify that 93 percent of the respondents are either satisfied or extremely satisfied with
Waste Management's service.
As a comparison, staff researched surrounding communities and the unincorporated County
residential rates. In 2011, research indicated the County's franchise awards for residential
collection services was significantly higher at $20.68 per month compared to the City's $17.90
monthly rate. As the contracts were expiring in June 2013, based on market conditions and
anticipated rates if the City had gone to bid, the City negotiated an extension and extraordinary
rate increase, which was approved by the City Council on May 24, 2011. To be proactive and
limit the impact on residents, extraordinary rate adjustments will be phased in over several years.
On May 24, 2011, the City Council authorized the City Manager to execute amended and
restated Franchise Agreements that included an extraordinary rate adjustment of 1.5 percent
beginning July 1, 2011, and July 1, 2012, and four extraordinary rate increases of 2.5 percent for
rate years 2013, 2014, 2015, and 2016, beginning on July 1. During the years of the
extraordinary rate increase, the rate cap will be limited to 6 percent. The first extraordinary rate
of 1.50 percent and the proposed annual rate of 2.36 percent will adjust the single-family rate to
$19.36 effective July 1, 2012, from the current rate of $18.64. Attached is a summary of the
Method of Adjustment for Waste Management for this annual rate adjustment described in
Section 6.4 of the Agreement. In addition, the City negotiated new residential programs including
the Super Saver Program, which provides a financial incentive for residents who increase their
recycling efforts, increased litter and abandoned item removal and additional diversion programs
implemented on July 1, 2011.
For additional reference, at the same meeting on May 24, 2011, the City Council approved an
extraordinary adjustment of 1.875 percent for the City's commercial waste hauler, Burrtec Waste
Industries (Burrtec). The first extraordinary rate increase of 1.875 percent goes into effect on July
1, 2012, and three extraordinary rate increases of 2.475 percent for rate years 2013, 2014, and
2015, beginning on July 1. During the years of the extraordinary rate increase, the rate cap will be
limited to 6 percent. This will increase the three -yard commercial collection rate for Fiscal Year
2012-13 to $70.53 effective July 1, 2012. Buntec's Franchise Agreement does not allow for an
annual adjustment for Fiscal Year 2012-13 and requires no City Council action. New commercial
2
programs include the introduction of a small recycling cart for businesses with limited space and
16 hours of litter abatement per month to help address litter in the public right-of-way. Waste
Management and Burrtec are in full compliance with the Franchise Agreements.
ALTERNATIVE ACTIONS
Other action as determined by the City Council.
FISCAL IMPACT
None
ATTACHMENTS
Waste Management Adjustment Request Letter
Methodology Calculations
Resolution
First Amendment of the Amended and Restated Agreement
March 29, 2012
Mr. Robert Newman
Public Works Director
City of Santa Clarita
23290 Valencia Boulevard Ste. 300
Santa Clarita, CA 91355
RE: 2012 Rate Adjustment Review
Dear Mr. Newman:
THINK GREEN!
Pursuant to Article 6 of our franchise agreement, Waste Management respectfully
requests an adjustment of the service rates based on the rate adjustment methodology
outlined in the agreement in addition to the previously approved extraordinary
adjustment of 1.5%.
Calculated Adjustment: 2.51%
C� Scheduled Adjustment: 1.5%
Waste Management is proud to be a sustainability partner to the City of Santa Clarita
and is committed to assisting the City in complying with State mandates, increasing
diversion, being stewards of the environment and being active participants in the
community.
We would like to take this opportunity to highlight just a few of our mutual successes in
2011 accomplished in partnership with City Staff.
Through enhanced public education and the implementation of
innovative new programs such as commingled recycling, the WM Sharps
Home Delivery Program, Clothes for Community, Super Saver Recycling,
Multi -Family Recycling Outreach, Split -Bin Recycling and the City of
Santa Clarita Green Guide, WM and the City have paved the way for a
future zero waste city.
• Working closely with the City, Waste Management developed the
"Super Saver" recycle program. This optional program offers an
incentivized rate structure, encouraging active recycling participation &
decreased disposal. At the customers request, WM will provide all
eligible residents with a 35 -gallon "Super Saver" trash cart in lieu of
their current 96 -gallon trash cart. The Super -Saver Cart rate is 20% less
than standard trash service, thereby incentivizing the program and
encouraging active recycling participation. To date, the super saver
program has over 1,000 participants.
�J
• Waste Management has worked very closely with the City to develop an
effective, sustainable Multi -Family program that is easy for residents to
use and for property managers to administer. This comprehensive
program has not only provided savings to property managers through a
reduction in disposal costs but has also earned the City recognition from
key organizations including CalRecycle and the American Publics Works
Association.
Through these extensive multi -family outreach efforts, Waste
Management identified the need for recycling bins that could
accommodate space constraints for Multi -Family complexes within the
City. Designed to fit in existing trash enclosures, the split -bin is the size
of a normal dumpster divided in half with one black side for trash and
the other green side for recycling. In order to educate residents of the
new program, WM proactively developed additional public education
materials and has performed numerous recycling presentations,
delivered educational materials door to door and provided one on one
recycling consultations to multi -family residents. WM has conducted
120 site visits, recycling consultations, and workshops promoting both
split -bin and traditional recycling programs.
Because of these combined efforts, multi -family recycling programs are
( active throughout nearly all of the seventy-seven multi -family
complexes in the Santa Clarita Valley.
• Waste Management actively seeks and receives grant funding to
support school sustainability efforts. Examples include the WM — Keep
America Beautiful funding recently received to support local school
districts. Through this grant, classrooms received over 500 recycling kits
as well as Green Your School posters to remind students to recycle. In
addition, an ongoing educational recycling program will be
implemented throughout the schools in these districts to ensure future
generations of students understand the importance of recycling.
• Over the years, Waste Management has provided valuable programs
including the Santa Clarita Valley Sharps and Medical Waste Round -Up
event, to meet the unique needs of senior citizens. Senior citizens
continue to receive additional value through special drop off programs
along with the Sharps Home Delivery Program providing residents with
a convenient way to responsibly dispose of needles, lancets, syringes
and other sharps, as well as a significant senior discount on waste and
recycling collection services. In 2011, nearly 300 Santa Clarita residents
participated in the Sharps Home Delivery Program.
• Waste Management has participated in many community and business
events each year and has targeted efforts towards increasing diversion,
public education, sustainability and community safety. Some highlights
of this involvement include the Santa Clarita River Rally, Santa Clarita
5
L- e
V 1
Earth Arbor Day Celebration, Neighborhood Clean Up Events, Newhall
Community Center's Recycling Campaign, local Boy Scout and Girl Scout
organizations, sponsorship and support for the Santa Clarita Sheriffs
Boosters, Gibbons Conservancy, the SCV Food Pantry and the Santa
Clarita Valley Senior Center.
As a company, we are dedicated to making a difference for the environment and the
communities that we serve. Thank you for your favorable consideration. We look
forward to discussing this request in further detail.
Sincerely,
(Q A�
San ursley
Area Municipal Marketing Manager
Waste Management
Enclosures: Rate Calculations
Distribution:
r^ Travis Lange
Mark Patti
�3
no
l
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
-` oI — I - -- — GDW W T6 — — —
W
N N < .-p�
>N
> 0 0 0 0 0 0 0 0 0 0 0 0 <pp n
O < W N W n V
Ti ol�a;6d�ddd«��nd
U
0
N
CL
CL
0
0
M
d
K o 0 o O 0 M
C OI N M M
d <O (V (V fV fV 0> CV
� N '
U-
U-
>0
(O(pp O pa O O M
N < Q co (D co M
E
<OI N N CV CV O N
N
Q
N
N
i1 -
U rn
c �
T _
tp N a l0 >> j y LS O p j
U �LL�¢��� Q W)UZON �--Q
'O
O O O O O O O O O O O O O N
0 0 0 0 0 0 0 0 0 0 0 0 0
O N N N N N a O N V m m W n< 7
<o ro ro cm co rd of ai of of ai of of r co
N�.N-.N �r-�svN-r ��NUMir
m
O G O O O O O O O O O O O O W 0 0 0
00000000000
E <v �c commq�n omw
a o6Mnr�
< N <
LU
l0 d
d O�
= N
UL ma�10 a'0>>>aai�oa�io>
O V M(0 OV naMD 000)pO.N W pM N cM C7MMM�O OI(j n n Ngm
141 W W W W W W m W W W W<
®M M M M M M M M M M M M m M
v
o nv�nvnmM�n W moom
N c O c O r O n N N O N O< N W m
� < n w m n c M n m o< W n o 0
Wi �i vi N ¢i co n n: ai co ui
O NIW OI ma)O)00) W W 0)Om a0
U M M M M M M M M M M M M n M
0 Y
N
t0
CD TC_ a a >�t.R N
U -moi li�Q���Q W) OZa f -Q
I
a a
L
o
0
0
0
P
e
e
C
n
M
O
u7
t0
O
(O
3 v
O
O
O
O
O
N
r
M
«
C a
o
0
0
0
0
a c
` (p
co
1v
M
N
rn
GD
rn
aD
a L
N
(O
V
1l
r
1 U
N
W
N
N
M
N
a
r
O
N
N
0
0)
C
O
N
_O
1
n
N
N
O
M
O
O
m
y
L
U
}
U
a
M
O
07
v
O
((D
CC)
O
O
LL
a
O
N
N
O
N
N
W
u7
0
N
N
M
M
C
Q
a
E
V)a
m
O
O
M
M
O
O
0)
(D
O)
(D
V
p
O
V
M
M
Q
N a
00
N
r
V
m
V
co
Q
N
M
M
3
C
C
Q
X
O
a
a
r
E
O
O
C.
C
N�_
O
0
=
C
O
d C O
M
W
W
a
a
E
(O
a s o_
E
rn
U)
N
j
N
>. I
N
O
O
(Np
a s
O
M
O
0
O
Q
U
v
m o
M
a'c)
7
a'
7
a
a
d a
a
U
U
v
�
� m
N
a
L
C
O cu 0)C
a
O C
a
C O
LL U)
N O
CY N O U
N CP
.0 d O Co U
- O Co U
'O
O
j
O
G
U
c a) 'D N
C T S
U
O N
¢ U N
O y
¢ U
p
la
a
a) L)
NLL N > O
-mow
`N -t ca
�L (U-6 a
W
O.
w a
v a N U
a
a a m a>
a a u >
a
m
m
O C Ems' a
J N
H
J
J
O N
EL
U O
m=
C Z V
a ¢
C~Z'O
c ¢
= v
d
a)
m o
U m
m o
U m
.`
a0U
Uu�
m
U
rn
m
C
c
L
o
0
0
0
0
m
O
O
(O
(O
(0
O
O
U
o
(D
«
m
oa
E
m
E
a)
aa+
v
0 =
a
O
«
N
m
m
CL
vQ
V
y
m
¢ @
O
E
NL
C
T C
w
U
O
a
o.
O
¢E
g'o
m
W
7
O'
N
—
N >
> (U
J
LL
W
Q
p Va-)iC
rm.
O
�¢
aw
111
RESOLUTION NO. 12-
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA CLARITA, CALIFORNIA,
APPROVING THE FIRST AMENDMENT OF THE AMENDED AND
RESTATED AGREEMENT BETWEEN THE CITY OF SANTA CLARITA AND
USA WASTE OF CALIFORNIA, INC., (WASTE MANAGEMENT) FOR
RESIDENTIAL SOLID WASTE MANAGEMENT SERVICES
WHEREAS, the City is empowered under Section 7 of Article 11 of the California
Constitution to make and enforce, within its limits, all police and sanitary ordinances and
regulations not in conflict with general laws; and
WHEREAS, in partial implementation of Section 7 of Article 11 of the California
Constitution, California Public Resources Code Section 40059 authorizes the City to determine
all aspects of handling of solid waste that are of local concern, including the frequency of
collection, means of collection and transportation, level of services and nature, location, and
extent of waste handling services; and
WHEREAS, on November 20, 2003, the City and USA Waste of California, Inc.,
(Waste Management) entered into that certain "Agreement Between the City of Santa Clarita
and USA Waste of California, Inc., for Residential Solid Waste Management Services"; and
WHEREAS, on May 24, 2011, the City Council directed staff to execute an amended
and restated Agreement with Waste Management (the Agreement); and
WHEREAS, pursuant to Section 6.3 of the Agreement, Waste Management is entitled
to pursue an annual adjustment to its maximum rates for the rate year commencing on July 1,
2012, to June 30, 2013; and
WHEREAS, the City and Waste Management desire to amend the Agreement by
increasing the maximum rates as outlined in Sections 6.3 and 6.4 of the Agreement.
NOW, THEREFORE, the City Council of the City of Santa Clarita, California, does
hereby resolve as follows:
SECTION 1. The City Council does hereby find, determine, and declare pursuant to
California Public Resources Code Section 40059(a)(1) and Section 7 of Article 11 of the
California Constitution that the public health, safety, and well-being require approval of that
certain "First Amendment of the Amended and Restated Agreement Between the City of Santa
Clarita and USA Waste of California, Inc., for Residential Solid Waste Management Services"
(First Amendment), a copy of which is attached. The City Manager is authorized to execute the
I
First Amendment on behalf of the City and such First Amendment is hereby approved.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this day of 2012.
MAYOR
ATTEST:
CITY CLERK
DATE:
10
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA)
I, Sarah P. Gorman, City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a
regular meeting thereof, held on the day of 2012, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
3
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL RESOLUTION
I, , City Clerk of the City of Santa Clarita, do hereby
certify that this is a true and correct copy of the original Resolution 12- adopted by the City
Council of the City of Santa Clarita, California on 2012, which is now on file in my
office.
Witness my hand and seal of the City of Santa Clarita, California, this day of 20
City Clerk
By
Deputy City Clerk
12
FIRST AMENDMENT OF THE
AMENDED AND RESTATED AGREEMENT
BETWEEN THE CITY OF SANTA CLARITA AND
USA WASTE OF CALIFORNIA, INC., (WASTE MANAGEMENT) FOR
RESIDENTIAL SOLID WASTE MANAGEMENT SERVICES
This FIRST AMENDMENT OF THE AMENDED AND RESTATED
AGREEMENT BETWEEN THE CITY OF SANTA CLARITA AND USA WASTE
OF CALIFORNIA, INC., (WASTE MANAGEMENT) FOR RESIDENTIAL SOLID
WASTE MANAGEMENT SERVICES, (First Amendment) is entered into this _day
of 2012, between the City of
Santa Clarita, California, a California municipal corporation (City) and USA Waste of
California, Inc., a California corporation to amend that certain "Amended and Restated
Agreement Between the City of Santa Clarita and USA Waste of California, Inc., for
Residential Solid Waste Management Services" (the Agreement).
RECITALS
WHEREAS, the City is empowered under Section 7 of Article I I of the
California Constitution to make and enforce, within its limits, all police and sanitary
ordinances and regulations not in conflict with general laws; and
WHEREAS, in partial implementation of Section 7 of Article 11 of the California
Constitution, California Public Resources Code Section 40059 authorizes the City to
determine all aspects of handling of solid waste that are of local concern, including the
frequency of collection, means of collection and transportation, level of services and
nature, location, and extent of waste handling services; and
WHEREAS, on November 20, 2003, the City and USA Waste of California, Inc.,
(Waste Management) entered into that certain "Agreement Between the City of Santa
Clarita and USA Waste of California, Inc., (Waste Management) for Residential Solid
Waste Management Services"; and
WHEREAS, on May 24, 2011, the City Council directed staff to execute an
amended and restated Agreement with Waste Management (the Agreement); and
WHEREAS, pursuant to Section 6.3 of the Agreement, Waste Management is
entitled to pursue an annual adjustment to its maximum rates for the rate year
commencing on July 1, 2012, to June 30, 2013.
NOW, THEREFORE, the City and Waste Management in consideration of their
mutual promises, amend the Agreement as follows:
0
SECTION 1. The maximum rates set forth in Exhibit 2 are hereby adjusted to
the following for the rate year commencing July 1, 2012 and shall remain in effect
thereafter, unless further adjusted or amended pursuant to the provisions of this
Agreement.
Standard Service Rate $19.36 per month
• Reduced Rate for no Greenwaste Services $17.36 per month
Reduced Rate for Senior/Lifeline Customers $15.49 per month
• Mobile Home Service Rate . $14.53 per month
The multifamily rates will be as follows:
Container
Costs
Street Litter Carts
$17.16 per set per month
Number of Weekly
Pickups
Refuse Overage Extra Pickup
Size
1
2
3
4
5
6
7
1.5 yd
$58.36
$116.75
$175.11
$233.47
$291.83
$350.21
$408.57
2 yd 3
$62.22
$124.41
$186.64
$248.87
$311.06
$373.26
$435.48
3 yd'
$69.92
$139.77
$209.70
$279.59
$349.48
$419.38
$489.28
4 yd
$77.57
$155.18
$232.74
$310.31
$387.91
$465.50
$543.06
Special Services
Costs
Street Litter Carts
$17.16 per set per month
Restart Charge
$17.46
Refuse Overage Extra Pickup
$5.83 per pickup
Locking Bin
$11.65 per bin per month
Bulk Billing Discount
8%
Extra Bulky Item Pickup
$23.29 per pickup
Additional Bin Cleanings
$40.75 per cleaning
Extra Bin Empties
$40.75 per empty
Compactor Rates
2x comparable bin rate
Late Fees
1.5% per month ($3.00 minimum)
Emergency Services
$81.52 per hour
Manure Collection
100% of comparable multifamily bin refuse rate
repayment Discount
One month free with 1 1 months prepaid
Super Saver Discount
0% Offered to residents generating minimal trash
SECTION 2. Except as expressly modified in this First Amendment, all other
provisions of the Agreement are and remain in effect.
(Signatures on next page)
Ii
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CITY OF SANTA CLARITA
A California Municipal Corporation
Ken Pulskamp, City Manager
ATTEST:
Sarah Gorman
City Clerk
APPROVED AS TO FORM:
Joe Montes
City Attorney
By:
15
WASTE MANAGEMENT
[CEO, President, Chairman of the Board or
any Vice President]
And By:
[The Secretary, any assistant secretary, CFO
or any assistant treasurer]
State of California )
)
County of )
On before me,
Dare Here Innen Name and Title ofthe Omcer
Place Notary Seal Above
who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the,
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
4
Signature of Notary Public
14)