CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
Item No. Item No.
Item No.
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: Commercial Refuse Hauler Update
Meeting Date: June 28, 2022
RECOMMENDATION:
The City Council will consider receiving and filing a commercial refuse hauler update; and may also elect to provide direction to staff if it wishes to consider Option 2a, Option 2b or provide alternative direction.
BACKGROUND:
Semi-Exclusive Franchise Agreements
In order to comply with State recycling mandates, the City Council authorized the establishment of a new commercial refuse management system in which a maximum of eight (8) refuse haulers were issued a semi-exclusive Agreement effective November 1, 2018 for a period of five (5) years. The agreements are due to expire on October 31, 2023. The agreement terms allow for an extension of the original term by two additional two-year terms. The haulers with semi-exclusive agreements are:
AAA Rubbish
Athens Services
Calmet Services
Haul Away Rubbish Service Company
NASA Services
Republic Services
Universal Waste Systems
Waste Management Company
Staff was to report back to Council periodically with updates. Staff last updated the City Council on January 19, 2021. The aforementioned eight haulers continue to work with the City and comply with City and State regulations by predominantly reporting their recycling tonnages to the City on a monthly basis as well as remaining current with payment of their 15% gross receipts hauler fees. Service continues uninterrupted and without complaint.
On January 11, 2022, Council authorized the assignment of Calmet’s Agreement to Athens Services. Effective April 1, 2022, Athens notified the Commerce City Manager of its completed consummation of acquisition of assets formerly owned by Calmet and subsequently notified Calmet customers of their transition plan. Due to this consolidation, there are technically seven commercial haulers operating under a semi-exclusive agreement:
AAA Rubbish
Athens Services as Calmet Services
Haul Away Rubbish Service Company
NASA Services
Republic Services
Universal Waste Systems
Waste Management Company
________________________
On October 2, 2018 when these franchise agreements were awarded the City Council expressed a desire in having 8 haulers to give smaller companies a chance and also to provide for more competitive commercial rates for businesses.
Business License Only
The remaining haulers not awarded a semi-exclusive agreement were allowed to operate for 5-years from the date of notification to the haulers, which was March 7, 2018 per Public Resources Code Section 49520. In order to continue operating under a business license until their expiration on March 7, 2023, the haulers would need to remain in good standing by complying with City and State regulations including reporting requirements. Of the original ten haulers, only four continue to operate and six haulers’ licenses were terminated as follows:
Currently Operating
American Reclamation
Key Disposal
GB Services (often non-compliant due to late reporting) *Angelus Western Paper Fibers (operates their business in Commerce, 150 days late in payment of hauler gross receipts fees after 3rd notice from Business License) License Terminated
Sav Way Disposal on September 12, 2018
Van Disposal Service on September 12, 2018
Commercial Waste Services on August 28, 2019
All Service Disposal on February 24, 2020
East and West Disposal on September 28, 2020
AM Disposal on January 4, 2021
These six non-compliant haulers lost their license to operate after an extensive enforcement process, which included the issuance of three notices and an opportunity to appeal the City Manager’s decision before the City Council. Three were terminated for not reporting and three were terminated for zero activity within a 12-month period.
Staff continues to monitor reporting and programmatic compliance especially due to CalRecycle’s additional mandates expanding commercial organics recycling to most businesses and food waste recycling to certain businesses.
Future Consideration
Option #1 – status quo
Should Council prefer to remain with 7 semi-exclusive haulers and make no change, then the three haulers’ (American Reclamation, Key Disposal and GB Services) business licenses will expire on March 7, 2023.
Option #2 – expand number of authorized semi-exclusive franchise haulers Should Council prefer to offer one or more haulers operating under a business license only a semi-exclusive agreement, which would not apply to Angeles Western Paper Fibers as they are not a refuse hauler, Council would need to provide direction to staff as to how many and which one(s). If Council desires to pursue this option, staff would suggest that the length of the term should coincide with the existing commercial hauler contract term, which is due to expire on October 31, 2023. The agreement terms allow for an extension of the original term by two additional two-year terms, which Council would decide upon next year.
If City Council opts for Option #2, administration would recommend considering Key Disposal (2A add Key to franchise list) first, then American Reclamation (2B add Key and American Reclamation to franchise list). Both entities applied to be semi-exclusive franchise haulers in 2018.
At this time, staff is unable to recommend the same consideration for GB Services who is often non-compliant due to late reporting as stated previously.
Staff may return to Council with a follow-up report and recommendation for action depending on direction received or the City Council to prepare a resolution confirming its desire and direct staff to enter into an agreement with the selected entity or entities, should they be accepting, and authorize the Mayor to sign.
ALTERNATIVES:
1. Receive and file the hauler update report and provide no direction to staff.
2. Receive and file the hauler update report and provide direction to staff (Option 2, 2a or 2b).
3. Receive and file the hauler update report and provide other direction to staff as City Council deems appropriate.
FISCAL IMPACT:
There is no fiscal impact to report.
RELATIONSHIP TO STRATEGIC GOALS:
The agenda item relates to the 2016 Strategic Plan
Community Quality of Life
Guiding Principle #5:
Foster environmentally conscious initiatives and continue to identify and develop city codes that support a clean, well-maintained, sustainable community.
Respectfully submitted: Edgar P. Cisneros, City Manager Prepared by: Gina Nila, Acting Director of Public Works Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form: Noel Tapia, City Attorney
Attachment:
Semi-Exclusive Commercial Franchise Agreement Template