CONSENT ITEM
E-5
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TIKAN SINGH, GENERAL MANAGER
DATE: OCTOBER 5, 2026
SUBJECT: CONSIDERATION OF APPROVAL OF DIRECT SERVICES PROVIDER
MEMORANDUM OF UNDERSTANDING (MOU) TO HELP COMPLY WITH
AZUSA’S PROCUREMENT REQUIREMENT UNDER SB 1383 AND
BLANKET PURCHASE ORDER WITH SAN PASQUAL VALLEY SOILS, INC.
BACKGROUND:
Senate Bill 1383 established statewide requirements to reduce the disposal of organic waste in landfills and increase the recovery and beneficial use of organic materials. As part of SB 1383, cities and counties are required to procure annually a specified quantity of recovered organic waste products based on their populations. Eligible recovered organic waste products include compost, mulch, renewable gas, and electricity generated from biomass conversion. The City of Azusa’s procurement requirement from 2022 to 2026 is 3,973 tons.
CalRecycle allows jurisdictions to meet their procurement requirements through a Direct Service Provider (DSP). Under this approach, a jurisdiction enters into a written agreement with an outside entity requiring the entity to procure eligible recovered organic waste products on behalf of the jurisdiction and provide documentation of the procurement. The City has identified San Pasqual Valley Soils, Inc. as a potential Direct Service Provider to assist the City with its procurement requirement.
RECOMMENDATIONS:
Staff recommends the City Council take the following action:
1) Approve the Memorandum of Understanding (MOU) with San Pasqual Valley Soils, Inc. (SPV Soils) as a Direct Service Provider to assist the City in meeting its organic waste procurement requirement under Senate Bill 1383 (SB 1383); 2) Authorize the City Manager to execute the MOU in a form acceptable to the City Attorney; and
Approval of Direct Services Provider MOU with SPV Soils October 5, 2026
3) Approve a blanket purchase order not to exceed $50,000 for FY 26/27.
ANALYSIS:
To assist the City in meeting its procurement target, staff proposes entering into an MOU with San Pasqual Valley Soils, Inc. as a Direct Service Provider. SPV Soils is a permitted composting facility located in San Diego's San Pasqual Valley Agricultural Preserve and manages approximately 775 acres of agricultural land. The proposed MOU would establish SPV Soils as a Direct Service Provider to the City of Azusa to support the City's SB 1383 procurement obligation.
The proposed MOU will provide the City of Azusa with a practical mechanism to meet a portion of its annual SB 1383 organic waste procurement requirement. Under the proposed arrangement, SPV Soils will produce qualifying compost and beneficially use it on agricultural land in the San Pasqual Valley on behalf of the City. SPV Soils will track the qualifying quantities and provide the documentation necessary for Azusa to substantiate the procurement for its SB 1383 compliance records.
The proposed rate of $14.50 per ton ($10.00 per cubic yard) includes the compost, application, volume tracking, and documentation services identified in the MOU. To facilitate payment, Staff is also requesting the approval of a blanket purchase order not to exceed $50,000 for FY 26/27.
FISCAL IMPACT:
The City's cost under the MOU will be based on the quantity of qualifying compost procured at a rate of $14.50 per ton ($10.00 per cubic yard). The recommended action authorizes a blanket purchase order not to exceed $50,000 for FY 2026-27. Sufficient funding is available in the FY 2026-27 adopted budget under Account No. 39-40-750-065-6493. No additional appropriation is required as a result of the recommended action.
Prepared: Reviewed and Approved:
Liza Sagun Tikan Singh, PE
Acting Environmental Programs Manager General Manager
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachment:
1) MOU Direct Services Provider with SPV Soils, Inc.
Re: MOU to Designate San Pasqual Valley Soils as a Direct Service Provider to the City of Azusa, California
Following is a Memorandum of Understanding (MOU) (a.k.a. Direct Service Provider Agreement or DSP) for San Pasqual Valley Soils (SPV Soils) to become a direct service provider to the City of Azusa (City) to help the jurisdiction meet procurement targets of SB 1383.
San Pasqual Valley Soils (SPV Soils) is a permitted composting facility (CalRecycle SWIS# 37-AB0015) located in the City of San Diego’s San Pasqual Valley Agricultural Preserve (Preserve). It is part of a suite of family-owned companies that includes FKD Trucking, KD Farms, the Frank Konyn Dairy and Suncoast Botanicals Inc. We actively farm and/or manage 775 acres in the Preserve.
At a rate of $14.50 per ton ($10/cubic yard), SPV Soils agrees to provide the City of Azusa the service of producing, delivering and spreading compost that meets all requirements and standards of 14 CCR Section 18993.1. This service rate is all inclusive of SPV Soils supplying the material, applying it material at agronomic rates, tracking volumes, and providing the City written documentation to fulfill all SB 1383 procurement records as required by 14 CCR Section 18993.2.
Compost will be applied to forage crop land to increase the organic matter and water holding capacity of the Preserve’s soil, minimizing erosion, sequestering carbon, and improving the health and yields of crops for livestock.
To the fullest extent permitted by law, SPV Soils shall indemnify, protect, defend and hold harmless the City and any and all of its officials, employees, volunteers and agents from and against any and all liability arising out of, are a consequence of, or are in any way attributable to, in whole or in part, any negligent or wrongful act, error or omission of SPV Soils in the performance of services under this MOU including but not limited to compliance with SB 1383.
This agreement shall be effective upon the date signed by both parties below and may be terminated by either party at any time upon written notice.
Thank you,
Frank Konyn
President, San Pasqual Valley Soils
MOU to Designate San Pasqual Valley Soils as a Direct Service Provider to the City of Azusa, California, page 2
4906-0281-4673 v1
_________________________________ _______________________ Frank Konyn, President Date
San Pasqual Valley Soils
__________________________________ _______________________ Sergio Gonzalez, City Manager Date
City of Azusa