Staff Report re Republic Services Franchise Agreement First Amendment Page 1 of 6
STAFF REPORT
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O: Mayor and Members of the City Council
FROM: Kathleen Gallagher, Sustainability Manager
VIA: Dan Barros, City Manager
MEETING DATE: August 27, 2025
SUBJECT: First Amendment to Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services with Allied Waste Services of North America, LLC dba Republic Services of Daly City to Revise Term
RECOMMENDATION
Staff recommend that the City Council adopt the following:
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE FRANCHISE AGREEMENT
FOR RECYCLABLES, ORGANIC WASTE AND GARBAGE COLLECTION AND PROCESSING
SERVICES BETWEEN TOWN OF COLMA AND ALLIED WASTE SERVICES OF NORTH
AMERICA, LLC REVISING THE TERM OF THE AGREEMENT
COUNCIL ADOPTED VALUES
T
his recommendation is consistent with the Council’s adopted values from the Values-Based Code of Conduct for responsibility because the amendment provides continuity of essential services of recyclables, organic waste, and garbage collection services for residents and businesses and compliance with state mandates.
BACKGROUND
The Town’s current franchise agreement for collection of recyclables, organic waste, and garbage with Allied Waste Services of North America, LLC dba Republic Services of Daly City (Republic Services) began on August 31, 2016, and ends on August 31, 2026. In 2016, the Town issued a Request for Proposal (RFP) for solid waste collection services, developed a new franchise agreement, convened an ad hoc committee to review proposals, interviewed proposing companies and toured their recycling and organics processing facilities. After proposal review and interviews concluded, the ad hoc committee recommended Republic Services to the City Council, and the City Council approved the ten-year franchise agreement with Republic Services through August 31, 2026.
AGENDA ITEM #9
Staff Report re Republic Services Franchise Agreement First Amendment Page 2 of 6 The current agreement provides the Town with an option to extend the franchise agreement term twice for succeeding terms of two years each (total of four years). If the Town were to exercise both extensions for four years, the term would end August 31, 2030. However, this extension provision is not a current industry standard because of the capital investments necessary for haulers to franchise agreement requirements to provide a truck fleet, containers, organics processing, recycling processing and disposal capacity. Current industry standards for franchise agreement extensions are typically in the range of eight to ten years.
Despite the Town’s current option to extend the term for two two -year terms, the Town would benefit from a term extension that aligns with the City of Daly City’s franchise agreement with Republic Services to allow the Town the option to partner with City of Daly City on a competitive procurement process for future franchise agreement services. Daly City’s term ends June 30, 2031, and Daly City, at its discretion, may extend the term for up to three years in periods of one year or more, and with 120 days’ notice to Republic Services.
Therefore, staff recommends an amendment to the franchise agreement to amend the current two 2-year extensions to a new option for the Town to extend through August 31, 2028, then through June 30, 2031, and at the Town’s discretion, extend the term an addi tional three years through June 30, 2034, for a total of an eight-year extension. This extension provision aligns with the City of Daly City’s term and extension provisions and allows the Town the option and flexibility to potentially pursue competitive pr ocurement for future franchise agreement services in collaboration with Daly City.
Additionally, since the approval of the last franchise agreement in 2016, new state mandates, such as Senate Bill (SB) 1383 regulations require new programs to be included in the franchise agreement, and other new terms and conditions will need to be updated in the agreement. The California Department of Resources Recycling and Recovery (CalRecycle) issued the Town a low population waiver through January 1, 2027, exempting the Town from organic waste collection requirements. The Town has been working to comply with the organic waste collection requirements in the SB 1383 regulations to reduce greenhouse gas emissions and landfill waste, and to gain compliance. Therefore, staff will work with Republic Services to draft an Amended and Restated Franchise Agreement effective September 1, 2026, to incorporate new state- mandated programs and other terms to be mutually agreed upon and negotiated by the Town and Republic Services. Staff will return to City Council in the coming months to provide details and get council feedback.
ANALYSIS
Objectives of the Proposed First Amendment
The current franchise agreement includes the following provisions regarding the term extensions:
Staff Report re Republic Services Franchise Agreement First Amendment Page 3 of 6
The City of Daly City’s current franchise agreement term is through June 30, 2031, and the term may be extended at the City’s discretion for up to a total of three years in periods of no less than one (1) year (for a total maximum extension through June 30, 2034) with 120-day notice to Contractor.
The Town’s proposed Amendment meets the following objectives:
• Align the Town’s franchise agreement’s term and term extension with the City of Daly City’s franchise agreement.
Therefore, the proposed First Amendment would amend Section 2.3(B) of the Agreement as follows:
“B. The Term of this Agreement may be extended at the Town’s discretion (a) through August 31, 2028, (b) then, after that first extension, through June 30, 2031; and (c) then after that second extension, for up to three (3) additional years, through June 30, 2034, in periods of no less than one (1) year, provided that to exercise (a),(b), or (c), Town provides written notice to the Contractor 120 days prior to expiration of the then-current term. In order for the Term to be extended, Contractor must be in compliance with all terms and conditions of this Agreement, including the diversion requirements set forth in Section 3.14. Nothing in this Agreement shall be interpreted as requiring the Town to renew or extend this Agreement.”
Staff met with Republic Services’ General Manager Kathryn Tekulve to discuss the amendment for the extension and next steps regarding the franchise agreement, and Republic is supportive of this extension and provided the Town with a letter of support for the amendment.
Amended and Restated Franchise Agreement to Include State -mandated Programs Since the approval of the last agreement, several new state mandates, including SB 1383, SB 1383 regulations, and Assembly Bill (AB) 341, have been imposed on jurisdictions which require new programs to be included in the Town’s new agreement. SB 1383 is the more significant mandate and requires diversion of organics from landfill with new collection programs,
Staff Report re Republic Services Franchise Agreement First Amendment Page 4 of 6 procurement policies, monitoring, and enforcement and reporting to the state. The Town received a low population waiver for portions of SB 1383 compliance in 2022, and this waiver expires in January 2027, therefore the new agreement will be amended to include the required SB 1383 regulatory provisions.
SB 1383 requirements are summarized below:
1. Mandatory Organics Collection Services. Jurisdictions must provide organic waste collection services to all residents and businesses, containers must be labeled and comply with the following color requirements for containers: grey/black for trash, green for organics, blue for recyclables.
2. Mandatory Contamination Monitoring. Hauler must provide on-site monitoring of containers to reduce cross contamination e.g., food waste in recycling containers is contamination.
3. Mandatory Education/Outreach. Jurisdictions must provide education/outreach to all businesses and residents regarding mandatory participation in the organics collection service and contamination requirements.
4. Edible Food Recovery. Jurisdictions required to establish an edible food recovery program for larger food generators i.e., Tier 1 and 2 Commercial Edible Food Generators to distribute edible food to food banks. Thanks to our partnership with the County of San Mateo Office of Sustainability we participate in a regional food recovery program at no cost to the Town.
5. Capacity Planning. Jurisdictions must secure access to organics processing and food recovery capacity for the programs identified in the SB 1383 regulations. Republic Services includes the assurance that the Town’s diverted organic material is delivered to a fully permitted organic waste processing facility and there is sufficient capacity.
6. Recovered Organic Waste Product Procurement: Jurisdictions must procure an annual quantity of recovered organic waste products based on population and which can be fulfilled by procuring compost, mulch, renewable energy (transportation fuel, heat, and electricity) from anaerobic digestion and electricity from biomass conversation.
7. Inspection and Enforcement: Jurisdictions/haulers are to monitor compliance and conduct enforcement through annual inspections of commercial and residential truck routes; compliance reviews on all commercial businesses with 2 cubic yards or more of solid waste.
Republic Services’ Compliance with Current Agreement
Staff completed analysis of Republic Services’ current franchise agreement performance by analyzing Colma’s current residential and commercial monthly rates charged in comparison to neighboring jurisdictions, reviewed the diversion requirements detailed in the agreement, commercial outreach, public education, considered Republic Services’ longstanding partnership with the Town and analyzed other terms and conditions.
Staff’s findings are as follows:
Diversion Requirements: Per the current franchise agreement, Republic Services must be in compliance with the terms and conditions of the agreement, including the diversion requirements set forth in Section 3.14. Under Section 3.14, Republic Services must meet and Staff Report re Republic Services Franchise Agreement First Amendment Page 5 of 6 maintain specific diversion requirements throughout the term. Republic Services provides an annual report that documents their compliance with diversion requirements; Republic’s 2024 report shows that Republic met the required diversion rate of 40% as of December 31, 2024.
Rate Comparison: Staff completed a review of the Town’s rates in comparison to neighboring jurisdictions with similar programs and find that rates charged by Republic Services to Colma’s residents and businesses rates are consistent and in line with neighboring jurisdictions’ rates.
Analysis of Alternatives Regarding the Franchise Agreement Staff discussed the benefits of extending the term with Republic through an Amended and Restated franchise agreement or completing another competitive procurement similar to the process completed in 2016. Typically, negotiating, amending and extending a franchise agreement with an incumbent hauler is appropriate when the hauler is providing quality reliable service at reasonable rates, the diversion requirements are being met, and there are no significant contractual problems. Conversely, a jurisdiction is more likely to complete a competitive procurement when the jurisdiction isn’t satisfied with the hauler’s services, and contractual problems exist, diversion requirements are not being met, and rates charged for services are not in line with neighboring jurisdictions with similar services.
Benefits to negotiating an amended franchise agreement with incumbent hauler Republic Services include not having to devote significant staff resources to RFP development and RFP management. Additionally, working with the known incumbent (Republic) can avoid challenges and risks of working with a new hauler which does not have the resources, customer service- oriented programs and staff to provide quality programs for residents and businesses. When comparing these alternatives, the justification to negotiate an amended agreement with Republic is appropriate because Republic Services’ rates are in line with neighboring jurisdictions with similar services, Republic is meeting diversion requirements, there is a good long standing partnership with Republic, and there are no contractual problems.
Sustainability Impact
This recommendation is consistent with the Town’s sustainability goals because recycling, organics and diversion from landfill resulting from the franchise agreement reduce greenhouse gas emissions and assist the Town with meeting Climate Action Plan greenhouse gas emissions reduction targets.
FISCAL IMPACT
The recommendation will not impact the Town's budget.
ENVIRONMENTAL
This amendment is exempt from CEQA under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility the approval will have a significant effect on the environment.
Staff Report re Republic Services Franchise Agreement First Amendment Page 6 of 6
CONCLUSION
Staff recommends that the City Council adopt the resolution approving the First Amendment to the Franchise Agreement for collection of recyclables, organic waste, and garbage revising the term of the Franchise Agreement.
ATTACHMENTS
A. Resolution
B. First Amendment and Link to Franchise Agreement
C. Republic Services letter of support
RESOLUTION NO. 2025-XX
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION APPROVING THE FIRST AMENDMENT TO FRANCHISE AGREEMENT FOR
RECYCLABLES, ORGANIC WASTE AND GARBAGE COLLECTION AND PROCESSING
SERVICES BETWEEN TOWN OF COLMA AND ALLIED WASTE SERVICES OF NORTH
AMERICA LLC REVISING THE TERM OF THE AGREEMENT
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he City Council of the Town of Colma does resolve as follows:
WHEREAS, the Town and Allied Waste Services of North America, LLC, doing business as Republic Services of Daly City (Republic Services) entered into a Franchise Agreement for Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services between Town of Colma and Allied Waste Services of North America, LLC, doing business as Republic Services of Daly City (Agreement) which commenced on August 31, 2016 following a competitive procurement process; and
WHEREAS, the current Agreement is for a ten year term with Republic Services that expires on August 31, 2026 , and the Agreement includes a provision to allow the Town to extend the agreement twice for succeeding terms of two years each, for a total of four years; and WHEREAS, the Town seeks to amend Subsection B. of Section 2.3 of the Agreement to align the term end date with the City of Daly City’s franchise agreement with Republic Services to allow the Town the option to collaborate with the City of Daly City to pursue a joint competitive procurement for recycling, organics and solid waste services.
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OW, THEREFORE, BE IT RESOLVED THAT the City Council of the Town of Colma hereby approves the First Amendment to Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services between Town of Colma and Allied Waste Services dba Republic Services of North America, LLC (First Amendment).
B
E IT FURTHER RESOLVED THAT the City Council finds that the First Amendment is not subject to the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility the approval will have a significant effect on the environment. //
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ATTACHMENT A
Certification of Adoption
I certify that the foregoing Resolution No. 2025- was duly adopted at a regular meeting of said City Council held on August 27, 2025, by the following vote:
Name Voting Present, Not Voting Absent
Aye No Abstain Not Participating
Ken Gonzalez, Mayor
Carrie Slaughter, Vice Mayor
Helen Fisicaro, Councilmember
Joanne F. del Rosario,
Councilmember
Thomas Walsh,
Councilmember
Voting Tally
Dated ________________________ __________________________________ Ken Gonzalez, Mayor
Attest: ____________________________
Michelle Estabillo, City Clerk
FIRST AMENDMENT TO FRANCHISE AGREEMENT FOR RECYCLABLES, ORGANIC
WASTE AND GARBAGE COLLECTION AND PROCESSING SERVICES BETWEEN TOWN
OF COLMA AND ALLIED WASTE SERVICES OF NORTH AMERICA, LLC This First Amendment to Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services between Town of Colma and Allied Waste Services of North America, LLC, doing business as Republic Services of Daly City (First Amendment) is entered into as of August 27, 2025, between the Town of Colma (Town) and Allied Waste Services of North America, LLC, doing business as Republic Services of Daly City (Republic).
WHEREAS, the Town and Republic entered into a Franchise Agreement for Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services between Town of Colma and Allied Waste Services of North America, LLC, doing business as Republic Services of Daly City (Agreement) which commenced August 31, 2016; and WHEREAS, the term of the Agreement expires August 31, 2026; and WHEREAS, the Town seeks to amend the term to align with the term of the City of Daly City’s franchise agreement with Republic to allow the Town the option to collaborate with the City of Daly City to pursue a joint competitive procurement for future recycling, organics, and solid waste services.
A
GREEMENT
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OW, THEREFORE, in good and valuable consideration of the mutual promises and covenants contained herein, the receipt and sufficient of which is hereby acknowledged, the Parties hereto agree as follows:
1 . Subsection B. of Section 2.3 of the Agreement is amended to read in full as follows:
“
B. The Term of this Agreement may be extended at the Town’s discretion (a)
through August 31, 2028, (b) then, after that first extension, through June 30, 2031; and (c) then after that second extension, for up to three (3) additional years, through June 30, 2034, in periods of no less than one (1) year, provided that to exercise (a),(b), or (c), Town provides written notice to the Contractor 120 days prior to expiration of the then-current term. In order for the Term to be extended, Contractor must be in compliance with all terms and conditions of this Agreement, including the diversion requirements set forth in Section 3.14. Nothing in this Agreement shall be interpreted as requiring the Town to renew or extend this Agreement.”
ATTACHMENT B
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first written above.
TOWN OF COLMA, a municipal corporation
Ken Gonzalez
Mayor
ATTEST:
Michelle Estabillo, City Clerk
APPROVED AS TO FORM:
Christopher Diaz, City Attorney
ALLIED WASTE SERVICES OF NORTH
AMERICA, LLC, dba Republic Services of
Daly City, a Limited Liability Company
[name], Area President
[name], General Manager
Link to Franchise Agreement: https://www.colma.ca.gov/franchise-agreements/ RepublicServices.com | Environmental Services, Recycling & Waste Daniel Barros
City Manager
Town of Colma
1198 El Camino Real
Colma, CA 94014
Re: Town of Colma
Support for Sole Source Negotiations
Mr. Daniel Barros:
I am writing on behalf of Allied Waste Services of North America, LLC d/b/a Republic Services of Daly City (“Republic”). As you know, Republic and the Town of Colma (“Colma”) entered into a Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services (the “Agreement”). The Agreement currently expires on August 31, 2026, with the option to extend by written agreement of the parties twice for succeeding terms of two (2) years each.
Republic supports Colma’s request to enter into sole source negotiations for an amended and restated franchise agreement that will extend the term options and include additional terms and conditions, subject to the parties’ mutual agreement. If the parties are unable to mutually agree on an amended and restated agreement, the two (2) year extension option in the current agreement may be exercised.
Republic values the relationship with the Town of Colma and looks forward to the opportunity to continue servicing the community.
Sincerely,
Kathryn Tekulve
General Manager
ATTACHMENT C