FINAL LETTER REPORT
City of Cotati
Submitted electronically: June 6, 2022
Review of Franchise and
Waste Delivery Agreement
Amendments and SB 1383
Rate Adjustment Request
405 14th Street, Suite 350, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com June 6, 2022
Mr. Damien O’Bid, City Manager
City of Cotati
201 West Sierra Avenue, Cotati, CA 94931
submitted via email: [email protected]
SUBJECT: Final Letter Report – Review of Franchise and Waste Delivery Agreement Amendments and SB 1383 Rate Adjustment Request
Dear Mr. O’Bid,
For over ten years, R3 Consulting Group Inc., (R3) has partnered with the City of Cotati (City) for solid waste consulting services, and have been at the forefront as recycling and organics collection services are implemented throughout the City. Senate Bill (SB) 1383, as you know, is the largest change to the waste and recycling industries in 30 years – and with that comes many impacts and challenges for both solid waste haulers and California jurisdictions.
Project Objectives
1. Review Franchise and Waste Delivery Agreement (WDA) Amendments (Amendments) and provide recommended revisions to the Amendments to meet SB 1383 compliance.
2. Review RSM’s SB 1383 rate adjustment request and provide a recommended rate adjustment.
Summary of Findings
Review Franchise and Waste Delivery Agreement Amendments R3 has reviewed the draft Amendments and all recommended changes have been incorporated (as summarized on page 6 of this letter report). R3 recommends approving the agreement amendments.
Review of Recology Sonoma Marin’s (RSM) SB 1383 Rate Adjustment Request R3 has reviewed RSM’s requested rate adjustment for SB 1383 compliance and has found forecasted costs to be reasonable and mathematically accurate. R3 recommends approving RSM’s requested rate adjustment.
* * * * *
We appreciate the opportunity to continue to be of service to the City. Should you have any questions regarding our Letter Report or need any additional information, please do not hesitate to reach out directly.
Sincerely,
Carrie Baxter | Sr. Project Manager Alex Soulard | Sr. Project Analyst R3 Consulting Group, Inc. R3 Consulting Group, Inc.
916.878.7413 | [email protected] 707.888.8693 | [email protected]
TABLE OF CONTENTS
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report TOC
1. Legislation Background
page 1
2. Review of Franchise and Waste
Delivery Agreement Amendments
page 2
3. Review of RSM’s SB 1383 Rate
Adjustment Request
Attachment 1
SB 1383 Projected Costs for Year 1 of Implementation
separate pdf (see email submittal)
1. LEGISLATION BACKGROUND
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 1 of 10 Assembly Bill (AB) 939 & 32
For over 30 years, California has passed laws and regulations to increase waste diversion while helping the environment. Established in 1989, California’s foundational solid waste law, AB 939, sets program requirements for recycling and established a statewide goal of 50% reduction in landfilled waste by 2000.
This law was followed by AB 32 in 2006, which recognizes solid waste as a contributor to greenhouse gas emissions and set another goal to reduce greenhouse gas levels to 1990 levels by 2020.
AB 341 & 1826
AB 341 Mandatory Commercial Recycling (2012) and AB 1826 Mandatory Commercial Organics Recycling (2014) add waste diversion program participation requirements on commercial and multi-family properties. AB 341 and AB 1826 also increased statewide goals to 75% diversion for recycling and 50% reduction of organic waste by 2020.
Senate Bill (SB) 1383
During the process of decomposition of organic materials, the chemical methane is released into the atmosphere. Methane has been identified as one of the harmful Green House Gases (GHG) (and is 25 times more potent than carbon dioxide over a one-hundred-year period1), and methane from organic decomposition currently accounts for 21% of all methane emissions from the State of California annually.
As a result, in 2016, the legislature passed SB 1383 requiring local governments to provide organics collection to all generators, and all generators to subscribe. It also has specific mandates for solid waste collection container systems, education, and outreach programs, monitoring and contamination reporting, and enforcement of regulations.
On November 3, 2020, CalRecycle received a Notice of Approval of Regulatory Action from the Office of Administrative Law on Senate Bill 1383 (Lara, Chapter 395, Statutes of 2016). The regulations are final and went into effect on January 1, 2022. CalRecycle now has the discretionary authority to start enforcement actions on jurisdictions and other entities for lack of compliance with SB 1383.
Additionally, there is a requirement to increase the recovery of edible food that is currently being landfilled by 20% by 2025. Ultimately, the responsibility of regulation compliance rests largely with each individual jurisdiction, including the City. They impose significant administrative requirements on jurisdictions to implement programs requiring organic waste generators (those who initially create organic waste) to comply with CalRecycle regulations. Local agencies that do not comply with the regulations may face significant penalties or enforcement action imposed by CalRecycle – up to $10,000 per violation per day. 1 https://www.epa.gov/ghgemissions/overview-greenhouse-gases#methane
2. REVIEW OF FRANCHISE AND WASTE
DELIVERY AGREEMENT AMENDMENTS
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 2 of 10 Solid Waste-Related Agreements
The City of Cotati (City) has entered into an exclusive Franchise Agreement (Agreement) and a Waste Delivery Agreement (WDA) for the collection and handling of solid waste.
These agreements are summarized below and described in more detail within this section:
》 City Exclusive Franchise Agreement
Executed in April 2013, this Agreement specifies exclusive right to provide refuse collection, including construction and demolition debris, within the City. This agreement was originally held by Redwood Empire Disposal, Inc. (RED) and was purchased by Recology Sonoma Marin (RSM) in December 2017.
》 Waste Delivery Agreement
Executed in January 2015, this Agreement specifies that the Franchised Hauler’s costs for a Citywide Commercial Food Waste Collection Program and City-wide Dry Commercial Mixed Waste Program are being fully compensated by the gate rates the Contactor pays for delivery of materials. 》 County Master Operating Agreement
This Agreement is between Sonoma County (County) and Republic Services for the operations of transfer stations and a material recovery facility between RSM and Republic Services of Sonoma County, Inc.
》 SB 1383-Related Amendments (Zero Waste Sonoma MOU)
Executed in November 2021 this Agreement was established to assist in implementation, compliance, education, enforcement, and recordkeeping of SB 1383 regulations.
City Exclusive Franchise Agreement
The City entered into a Franchise Agreement (Agreement) with RED, for the exclusive right to provide refuse collection, including construction and demolition debris within in the City of Cotati, effective April 10, 2013. RED was previously owned by The Ratto Group (TRG). On December 23, 2017, RSM officially purchased TRG’s assets and took over the remainder of the Franchise Agreement with the City.
The City’s current Agreement with RSM expires on June 30, 2023. The Agreement has an option for one, five-year extension that may be offered by the City on or around March 15, 2022.
Of particular importance related to SB 1383, Exhibit A Sections 6 through 10 of the City’s Agreement specifies:
6. Compostable Materials
Contractor shall collect Compostable Materials and Food Scraps as defined in this Franchise agreement for Single-Family residences, Multi-Family Complexes, Mobile Home Park Customers and commercial Customers. With the exception of commercial Food Scrap Collection, Contractor shall not be entitled to additional compensation to provide these services. Contractor shall instruct Single-Family residences, Multi-Family Complexes (individual residents and/or complex managers as appropriate), Mobile Home Park Customers and commercial businesses in the proper preparation of materials and the proper placement of compostable Containers. Contractor shall transport Compostable Materials to a City-approved composting facility or other City-approved Processing Facility for Processing and marketing of the Compostable Materials. The Compostable Materials may not be disposed of at a Disposal Site, Transfer Station, or any other location in lieu of composting or other acceptable Diversion of the material without the Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 3 of 10 expressed written approval of the City. Repeated contamination of Compostable Materials or Food Scraps may result in additional charges or the removal of Carts and/or Bins from the Premises. Contractor shall provide written notification to the property Owner, Occupant, or Customer that they are improperly disposing of material and contaminating the load. The notice shall include educational materials and corrective suggestions and notice that future occurrences shall be subject to contaminated load charges as approved in Exhibit D. All notices shall be in English and Spanish.
Compostable materials and/or food scrap Collection service shall resume when Contractor is assured that contamination of compostable containers is eliminated.
7. Single-Family Compostable Materials
Contractor agrees to collect and deliver to a City-approved Composting Facility, Compostable Materials collected from compostable Containers placed at the curb by each single-family residential Customer. Contractor shall provide scheduled weekly Collection service on the same day as Solid Waste Collection for each Single-Family residence. Single-family Residential Units are eligible to receive up to two (2) Containers for Compostable Materials at no charge. Contractor is entitled to charge for additional cans up to the maximum rate specified in Exhibit D.
8. Multi-Family Compostable Materials
Contractor agrees to collect and deliver to a City-approved Composting Facility, Compostable Materials, collected from compostable Containers from multi-family residential complexes and Mobile Home Park Customers. Material shall be placed in compostable Containers for Collection by Contractor. Customers utilizing Cart service may be required to take Carts to the public roadway for Collection. Multi-family residential complexes are eligible to receive up to two Containers for Compostable Materials at no charge if they provide their own landscape service. Contractor is entitled to charge for additional compostable Containers up to the maximum rate specified in Exhibit D.
9. Commercial Compostable Materials Collection
Contractor agrees to collect and deliver to a City-approved Composting Facility Compostable Materials, excluding Food Scraps, collected from compostable Containers from commercial business Customers. Materials shall be placed in compostable Containers for Collection. Customers utilizing Cart service may be required to take Carts to public roadways for Collection. Commercial business Customers are eligible to receive up to two (2) compostable Containers at no charge if they provide their own landscape service. Contractor is entitled to charge for additional compostable Containers up to the maximum rate specified in Exhibit D. If commercial businesses are utilizing compostable Containers for Food Scraps, Contractor is entitled to charge up to the maximum approved commercial food scrap Collection rate pursuant to Exhibit D.
However, to the extent that the City enters into the proposed twenty (20)-year Waste Delivery Agreement with Republic Services of Sonoma County, Inc., to which Contractor or its affiliates have a beneficial interest, Contractor will not be entitled to charge for additional collection service costs to carry out the enhanced commercial wet-dry routing and residential food scraps collection programs required under the County Operations Agreement, because the cost of such services are already included in the proposed Sonoma County Central Landfill tipping fee structure thereunder.
10. Commercial and Residential Food Scrap Collection
Contractor agrees to develop programs, collection routes and other efforts and activities necessary with the goal of establishing a food scrap program like other Sonoma County cities in a timeframe acceptable to the City. Additionally, free composting bucket ‘giveaways’ shall be held at all City sponsored events held during the first year of this agreement.
Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 4 of 10 SB 1383 has changed the requirements for how service is offered to a customer. Prior legislation was enforced through a “Good Faith Effort”; however, SB 1383 now requires jurisdictions to enforce penalties.
This means changing the requirements of these sections of the Agreement from RSM offering service to all customers to now require the service be provided to all customers.
Waste Delivery Agreement (WDA)
Prior to entering into the new Agreement, the City entered into a franchise agreement for a variety of solid waste hauling and other services with Redwood Empire Disposal. That contract was assigned to RSM in November 2017. As part of that assignment, RSM agreed to be bound by the City’s WDA executed in January 2015.
The WDA specifies that the Franchised Hauler’s costs for a City-wide Commercial Food Waste Collection Program and City-wide Dry Commercial Mixed Waste Program are being fully compensated by the gate rates the Contactor pays for delivery of materials. As such, it is our understanding that any related costs are not to be included in RSM’s revenue requirement, which is used to determine the appropriate rate adjustment.
As specified in the WDA, the:
Franchised Hauler shall commence the City-wide collection of Food Waste from commercial Premises in the City when directed to do so by the City. The Franchised Hauler's costs of this program are being fully compensated through the Contractor’s Gate Rates, and Franchised Hauler shall agree by executing this addendum, attached hereto as Exhibit C, not to seek additional compensation from City for the Commercial Food Waste Collection Program for the Term of the Agreement.
RSM is currently collecting food waste from certain commercial accounts within the City, which is required to be provided by AB 1826 (mandatory commercial organics recycling). SB 1383 (Short lived climate pollutants) requires that commercial organics collection, including food waste, be provided to all residential and commercial accounts (i.e., covered generators) with limited exceptions. SB 1383 requires that the City ensures that all covered generators are complying with SB 1383 beginning January 1, 2022.
County Master Operating Agreement (MOA)
The County has a MOA between the County and Republic Services that includes Exhibit I, which is an agreement for the operations of transfer stations and a material recovery facility between TRG and Republic Services of Sonoma County, Inc. The agreement contained in Exhibit I was also assigned to RSM though the assignment of agreements and assets that took place in 2017; therefore, all reference to TRG means RSM.
The MOA, Exhibit I states:
TRG (and its affiliates) will develop and implement commercial Food Waste Collection in urban portions of the Committed Cities. TRG (and its affiliates) shall collect commercial Food Waste in urban portions of Committed Cities in a commercially reasonable manner as reasonably necessary to meet the diversion goals of the Operations Agreement, subject to consideration of the cost of collection against increased diversion.
The Facilities Operations Service Fee includes compensation to TRG for the development and implementation of a dry Waste and commercial Food Waste collection and Processing program.
TRG (and its affiliates) shall maintain their current Source Separated Recyclables Processing for Committed Cities for so long as the Committed Cities direct TRG (and its affiliates) to do so and Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 5 of 10 provide for such operations in the solid waste collection rates charged to TRG’s collection customers.
The MOA states further that:
TRG (and its affiliates) must report the amount of such commercial Source Separated Food Waste Disposed or Processed at each facility designated by Republic. For each Ton of Food Waste delivered by TRG to the Golden Bear Transfer Station or any other facility designed by Republic, TRG shall pay Republic the then current applicable Scale House Fee on a per Ton basis.
For each Ton of commercial Source Separated Food Waste delivered by TRG to Golden Bear Transfer Station, TRG shall receive the Facility Operations Fee and the Transportation Service Fee described in Section 8.5 for deliveries to the Golden Bear Transfer Station.
On May 6, 2021, the County distributed letters addressed to jurisdiction representatives, including the City, that described the County’s proposal to facilitate changes to existing agreements to comply with SB 1383. Within the letter, the County proposed to amend the MOA and Prime Subcontract (MOA, Exhibit I), to consolidate all SB 1383 programs under jurisdiction franchise agreements including the removal of the commercial Food Waste Collection program and the corresponding per ton Facilities Operations Service Fee.
Through the Prime Subcontract (MOA, Exhibit I), RSM is currently receiving a payment of $4.21 per ton from the County-posted solid waste tipping fee to deliver commercial Source Separated Food Waste to an out of County facility. This is to cover the operational expenses (labor, vehicle maintenance and replacement, and fuel) to transport source separated Food Waste to an out of County facility.
The tipping fee, effective April 1, 2022, is $147.08 per ton. The $4.21 per ton portion of the Facilities Operations Service Fee equates to 2.86% of the total disposal fee component adjusted in the City’s annual rate adjustment.
RSM will need to raise the collection rates to fully implement SB 1383 if the $4.21 per ton portion of the Facilities Operations Service Fee are no longer included in the Prime Subcontract (MOA, Exhibit I).
SB 1383 Related Amendments (Zero Waste Sonoma MOU)
Starting in early 2021, all Sonoma County member agencies, including the cities of Cloverdale, Cotati, Healdsburg, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, and Windsor and the County of Sonoma (Member Agencies) began meeting to identify roles and responsibilities to implement SB 1383 regulations.
As a result, Zero Waste Sonoma (ZWS) drafted a MOU to assist in implementation, compliance, education, enforcement, and recordkeeping of SB 1383 regulations.
The MOU was vetted by all Member Agencies and their legal teams, and ultimately approved by ZWS Board of Directors on October 21, 2021. The City entered into the MOU with ZWS on November 23, 2021.
Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 6 of 10 Recommended SB 1383-Related Revisions to Franchise
Agreement (RSM Agreement)
RSM provides a three-container collection system to residential customers and are encouraged to place yard and food waste in green carts. Commercial residents are offered four container options: trash/refuse, recyclables, green waste/yard trimmings, and source separated food waste. The City will need to amend the current Exclusive Agreement to meet SB 1383 requirements.
These changes include:
1. Collection Container Colors and Labels
2. Contamination Monitoring / Route Reviews
3. Public Education and Outreach
4. Reporting and Data Tracking
5. Regulation of Processing Facilities Used
Collection Containers
SB 1383 requires a three-container collection system, such as the City’s collection system, to comply with the following container color and labeling requirements:
》 Colors
A body or lid that is gray or black for garbage, blue for recycling, and green for organics. If an additional container is offered for collection of source-separated food waste, the container body or lid shall be brown. Functional containers, including containers purchased prior to January 1, 2022, that do not comply with the requirements of the subsection are not required to be replaced prior to the end of the useful life of those containers, or prior to January 1, 2036, whichever comes first. 》 Labels
Container labels that include language or graphic images, or both, indicating the primary material accepted and the primary materials prohibited in that container, or containers with imprinted text or graphic images that indicate the primary materials accepted and primary materials prohibited in the container. Pursuant to 14 CCR Section 18984.8, the container labeling requirements are required on new containers commencing January 1, 2022.
Recommended Amendment
R3 recommends including these requirements in the Exclusive Franchise Agreement with RSM.
Contamination Monitoring
SB 1383 requires the City, or its designated representative (i.e., RSM), to implement one of the two following container contamination minimization monitoring options beginning April 1, 2022:
》 Perform waste evaluations to assess container contamination for all three waste streams. - or -
》 Conduct annual route reviews of all hauler routes to assess container contamination for all three waste streams.
Recommended Amendment
R3 recommends the route review method of container contamination monitoring. To conduct this method, at a minimum, the City will need to compare the number of container audits covering 0.5% of collection containers across all hauler routes and the number of container audits. The City may then pursue the Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 7 of 10 sampling plan methodology that results in the fewest number of container audits and therefore lowest associated cost. Route review container audits may be completed by visual inspections or remote monitoring. Education and outreach must be provided in response to observation of contamination.
Public Education and Outreach
Beginning no later than February 1, 2022, the City, or its designated representative (i.e., RSM), must annually distribute education and outreach to all organic waste generators that includes the following information:
》 Information on organic waste generator requirements to properly separate materials in appropriate containers and provide labeling and education to employees and tenants on the requirements. 》 Methods for prevention of organic waste and recycling organic waste on site. 》 Community composting and any other local requirements. 》 Information on methane reduction benefits.
》 List of approved haulers and how to recycle.
》 Public health and safety and environmental impacts.
》 Information for edible food recovery programs.
》 Details about the edible food recovery program.
》 Any self-haul requirements.
The City must also distribute education and outreach to Tier 1 and Tier 2 commercial edible food generators by February 1 of each year.
Edible food recovery outreach must include the following information:
》 Details of the Edible Food Recovery Program.
》 Requirements for edible food generators.
》 Available food recovery agencies and the location of the list on the City’s website. 》 Actions to prevent the creation food waste.
Education and outreach may be distributed by print or digital media and may be combined with regularly scheduled outreach and education. If a substantial portion of the population does not speak the English language, the City must translate all outreach materials. The City must keep copies of outreach collateral, lists of recipients and dates of distribution in the required Implementation Record.
The current Exclusive Agreement requires RSM to conduct public education to the community. Exhibit A, Section 21 of the Agreement outlines RSM’s requirements to produce and distribute useful educational materials and perform ongoing public education and outreach for both English and Spanish speaking customers. The City and RSM must update outreach and education materials to meet the required contents as specified by SB 1383.
Recommended Amendment
R3 recommends an update to the City and RSM’s webpage to host all of the required outreach information including details about generator requirements and waivers, the edible food recovery program, methods of waste prevention, the benefits of organic waste diversion, and any self-haul requirements.
R3 recommends RSM provide printed and digital outreach materials related to operational and service requirements (e.g., waivers and sorting requirements) and reference the webpages for more information related to SB 1383 compliance. The City must also determine if additional translation of outreach materials is necessary.
Review of Agreement Amendments
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 8 of 10 Reporting and Data Tracking
There are several reporting and data tracking requirements associated with SB 1383 regulations. The current Exclusive Agreement has minimal reporting requirements.
Recommended Amendment
At a minimum, an amended agreement should incorporate reporting that provides:
》 The type of compostable material collection service(s) provided to the generators. 》 The total number of generators that receive each type of compostable material collection service provided.
》 The Recycling and Disposal Reporting System number of each facility receiving compostable material from RSM.
》 The number of route reviews conducted for prohibited container contaminants. 》 The number of times notices, violations, or targeted education materials were issued to generators for prohibited container contaminants.
》 Results of waste evaluations performed to meet the container contamination minimization requirements and the number of resulting targeted route reviews. 》 The number of compostable material generators and edible food generators that received information and the type of education and outreach used.
Regulation of Processing Facilities Used
SB 1383 allows the City to provide compliant collection service through designated haulers and a selfhauling program. Designated haulers, including franchise haulers, must seek written approval from the City for the organics processing facilities they intend to use.
Per SB 1383, the City must approve RSM’s facility in writing. The current Exclusive Agreement requires RSM to use Disposal Sites designated by the City, but does not place a requirement to use a processing facility designated by the City.
Recommendation
An amended agreement should allow the City to approve facility use for processing and disposal sites.
Findings and Recommendations
R3 has reviewed the draft Amendments and all recommended changes have been incorporated into the appropriate documents. R3 recommends approving the agreement amendments.
3. REVIEW OF RSM’S SB 1383 RATE
ADJUSTMENT REQUEST
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 9 of 10 RSM submitted a request to adjust current customer rates an additional 6.4%, effective January 1, 2023, to cover the additional capital resources and expenses associated with providing SB 1383 compliant collection services within the City.
The proposed adjustments include purchase of additional bins and carts and a shared cost for trucks to provide service to those additional bins and carts for commercial customers that do not currently subscribe to organic waste but are now required to subscribe to service. It also includes additional annual operational expenses to provide the five recommended agreement amendments.
These operational expenses include:
》 Capital Costs
》 Labor
》 Processing Fees for Organic Materials
》 Outreach Materials to Address Contamination Issues
》 Incremental Cost of Current Food Waste Program
(Less the Revenue Generated from The $4.21 Facilities Operations Service Fee) As a result of the 6.4% customer rate adjustment, the City would receive approximately $25,000 in additional franchise fees annually.
Adjustment Request Analysis
R3 has analyzed cost components of RSM’s request (Attachment 1) and has confirmed cost proposals for the components of SB 1383 Implementation.
Capital Costs
Amortized Capital Costs are valued at $13,025 annually and are being used to purchase:
》 17 new 2-yard compost bins
》 55 new 96-Gallon organics carts with new labeling
》 0.05 Front Load Compost Collection Truck
》 0.12 Side Load Compost Collection Truck
These costs total $82,680 and are amortized over 10 years, which corresponds with the $13,025 annual cost. These costs are reasonable assumptions needed as part of the SB1383 implementation.
Additional fuel costs of $14,973 for the additional partial front load and side load Compost Collection vehicles being operated have been evaluated and are reasonable at the utilization rates stated for those collection vehicles.
Labor
R3 agrees that addition of 0.17 driver position is a reasonable addition to the agreement to cover additional collections of organic materials. The proposed driver cost of $30,116 includes administrative expenses and profit margin which are acceptable expenses.
Review of Rate Adjustment Request
City of Cotati | Review of Agreement Amendments & Rate Adjustment Request – Draft Report 10 of 10 Processing Fees for Organic Materials
Commercial compost tip fee (per year) – incremental tonnage only - this $12,276 additional cost assumes that organic waste will be moving from the garbage stream and into the organics waste stream. This additional food and yard waste will be processed as organic waste instead of as garbage.
The added cost for processing assumes that an estimated 50% of organic tonnage will be removed from the Municipal Solid Waste Stream.
Outreach Materials to Address Contamination
R3 has analyzed the additional outreach cost for 400 contamination mailers and 400 contamination tags.
The costs are reasonable at a total of $408 for both items.
A Zero Waste Specialist Position is already included in the Franchise Agreement with RSM and requires no additional funding.
Incremental Cost of Current Food Waste Program
(Less the Revenue Generated from the $4.21 Facilities Operations Service Fee) The incremental cost of the current food waste collection program has a proposed cost of $76,554. This represents the total costs of the current food waste program less the revenue generated from the MOA fee added to the tip fee.
Following City approval of the MOA, this fee will be removed on January 1, 2023, and the tip fee will be reduced by the same amount through the regular rate adjustment process. Prior to January 1, 2023, current rates will remain effective to ensure continued receipt of the revenue provided for the current food waste collection program.
However, when RSM assumed the contract from RED, the City held their cost to the gate rate and did not incur the full cost of food waste tip fees. This new figure of $76,554 removes any cost assumptions with the food waste collection program and recovers these cost directly from the franchise rates.
Findings and Recommendations
R3 has reviewed RSM’s requested rate adjustment for SB 1383 compliance and has found forecasted costs to be reasonable and mathematically accurate. R3 recommends approving RMS’s requested rate adjustment.