STAFF REPORT
T
O: Mayor and Members of the City Council
FROM: Kathleen Gallagher, Sustainability Manager
VIA: Dan Barros, City Manager
MEETING DATE: February 11, 2026
SUBJECT: Study Session: Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services and Alternatives for Consideration
RECOMMENDATION
This is a study session for informational purposes to provide City Council with details regarding the Franchise Agreement for Recyclables, Organic Waste and Garbage Collection and Processing Services and Alternatives for Consideration
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 discussion involves providing essential quality collection of recyclables, organic waste, and garbage collection services for the Town’s residents and businesses.
BACKGROUND
The Town’s current franchise agreement for recyclables, organic waste, and garbage collection with Allied Waste Services (Republic ) began on August 31, 2016. In 201 5, 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 and interview proposing companies. The ad hoc committee recommended Republic to City Council, and City Council approved the ten-year franchise agreement with Republic Services. The agreement provided the Town with an option to extend the franchise agreement term twice for succeeding terms of two years each, for a total of four years. If the Town were to exercise both extensions for four years, the term would end August 31, 2030.
Town staff discussed an amendment to the franchise agreement with Republic several times to allow the Town the option to extend the term . Staff provided the amendment draft and staff AGENDA ITEM #5
report draft to Republic for their review and comment. Republic then forwarded a letter of support for a term extension to the Town. Town staff recommended the amendment to align our franchise agreement dates with Daly City and allow consideration to collaborate on a potential future competitive procurement. The amendment would also allow the Town sufficient time to develop an amended and restated franchise agreement to include new mandatory programs required under SB 1383 in collaboration with Republic and update many outdated provisions in the existing agreement. Town staff developed the amendment after several discussions and communications with Republic Services, Town staff, and BBK staff. However, after City Council approved the amendment in August, Republic’s GM stated there was an internal review issue by Republic staff regarding the amendment’s content and informed staff that Republic did not plan to sign the amendment. Therefore, the purpose of the study session is to discuss the current status, alternatives for consideration and request City Council feedback.
ANALYSIS
Current Franchise Agreement Term Provision
The current franchise agreement includes the following provisions regarding term extensions:
First Amendment Provision Brought to Council 8/27/25
The First Amendment had amended Section 2.3 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.”
Daly City’s Current Franchise Agreement
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.
New State Mandate SB 1383 Requires an Amended and Restated Franchise Agreement to include new mandatory p rograms
Since the approval of the existing agreement in 2016, several new state mandates, including SB 1383 and Assembly Bill (AB) 341, 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, procurement policies, monitoring, and enforcement and reporting to the state.
As stated earlier in this report, the intent of the Amendment approved by Council in August 2025 would have allowed the Town sufficient time to collaborate with Republic on new mandatory programs to be included in an Amended and Restated Franchise Agreement.
The following section provides a summary of SB 1383 requirements and the status of the Town’s compliance.
SB 1383 requirements and the Town’s compliance status provided 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.
Status: Colma is in partial compliance, but the amended and restate d
f
ranchise agreement needs new provision updated by SB 1383.
2. Mandatory Contamination Monitoring. Hauler must provide on-site monitoring of c
ontainers to reduce cross contamination e.g., food waste in recycling containers is contamination.
Status: Colma is not in compliance. The amended and restated franchise agreement needs to include new provision text per SB 1383
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.
Status: Colma is not in compliance. The amended and restated franchise agreement needs to include new provision text per SB 1383
4. Capacity Planning. Jurisdictions must secure access to organics processing and food recovery capacity for the programs identified in the SB 1383 regulations.
Status: Colma is not in compliance. The amended and restated franchise agreement needs to include new provision text per SB 1383
5. 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.
Status: Colma is not in compliance. The amended and restated franchise agreement needs to include new provision text per SB 1383 Related SB 1383 requirements not under franchise agreement • Annual Requirement for 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 Status: Colma is in compliance; City Council approved the MOU with the Office of Sustainability and the Resource Conservation District to enable the Town to comply.
• Mandatory Edible Food Recovery Program. 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.
Status: Colma is in compliance; We participate in a regional program i n
c
ollaboration with the Office of Sustainability San Mateo County.
Republic Services’ Compliance Status 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 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 in line with neighboring jurisdictions’ rates.
Analysis of Alternatives Regarding the Franchise Agreement Staff discussed the alternatives of potentially negotiating and extending the term with Republic through an Amended and Restated franchise agreement or completing a competitive procurement similar to the process completed in 2016. One year prior to the current expiration in the franchise agreement of August 2026, staff notified Republic about an extension request consistent with the terms in the franchise agreement and began negotiating an amendment to the franchise agreement to allow for this extension. Based on this, staff believes the Town and Republic can agree to an extension at least until August 2028, pending confirmation from Republic.
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.
Benefits to negotiating an amended franchise agreement with incumbent hauler include not having to devote significant staff resources to RFP development and RFP management.
Additionally, working with the known incumbent could avoid challenges and risks of working with a new hauler which does not have sufficient resources, customer service-oriented programs, and staff to provide quality programs for residents and businesses. Republic is also very familiar with the Town’s community, commercial, and events. Additionally, Republic is familiar with the SB 1383 requirements and could integrate these requirements into an amended and restated franchise agreement.
Conversely, a jurisdiction is more likely to complete a competitive procurement (RFP) when the jurisdiction isn’t satisfied with the hauler’s services, contractual problems exist, diversion requirements are not being met, and rates charged for services are not in line with neighboring jurisdictions with similar services. If the Town chooses to complete an RFP it would involve a much more intensive staff/consultant effort to complete the process. There is also the potential that an RFP may not result in better services or better rates, and there are challenges with transitioning to a new hauler. However, recent events such as a long-protracted process to ensure Colma ratepayers receive a credit during the July 2025 work stoppage by Republic, and the issue of Republic’s internal review process about the First Amendment to the Franchise Agreement approval in August 2025 has caused some concern and discussion for consideration of alternatives.
An added consideration is to take “a middle-ground approach” which would involve staff developing the Amended and Restated Franchise Agreement to ensure compliance with SB 1383 and other state mandates and update outdated provisions in the existing franchise agreement. With direction from City Council staff would then begin negotiations with Republic and request Republic provide their redlined responses to the new agreement and provide their cost proposal. If the Town is not in agreement with the cost proposal, the Town could choose to end negotiations and begin development of an RFP. This approach would provide a more time efficient and strategic approach and provide cost transparency upfront from Republic without the time-intensive RFP process. The Town would develop the agreement language and request Republic to redline their edits and provide a cost proposal on the amended and restated franchise agreement. With this approach, staff would recommend we establish a timeline with Republic and the understanding that if we can’t reach agreement within a reasonable timeframe or at acceptable rates, then we would return to Council and recommend moving forward with an RFP. Next steps could involve having a discussion with Republic regarding our intended process and return to City Council with an update and next recommended steps based on this conversation with Republic staff.
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.
F
ISCAL IMPACT
There is no impact on the Town's budget.
NEXT STEPS
Staff will take the Council’s direction and feedback.
ATTACHMENTS
A. 2016 Colma Franchise Agreement (Michelle to include a link here) B. Republic Services letter of support
C. August 27, 2025, Amendment
ATTACHMENT A
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 B
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 recycling, organics, and solid waste services.
A
GREEMENT
N
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 C
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