RESOLUTION NO. (XX)
ADOPTING THE 2ND AMENDMENT TO THE FRANCHISE AGREEMENT WITH
RECOLOGY SONOMA MARIN TO EXTEND THE TERM OF THE AGREEMENT
AND ADOPT OTHER TERMS TO STABILIZE FUTURE SOLID WASTE RATES WHEREAS, On March 27, 2013, the City Council entered into a franchise agreement with Redwood Empire Disposal, Inc. (RED), for the exclusive right to provide refuse collection, including construction and demolition debris, in the City of Cotati (City); and WHEREAS, On December 23, 2017, Recology Sonoma Marin (Recology) officially purchased RED’s assets and took over the remainder of the Franchise Agreement with the City; and
WHEREAS, The City’s Franchise Agreement (Agreement) with Recology was set to expire on June 30, 2023; and
WHEREAS, On December 14, 2021, the City introduced an ordinance amending Chapter 8.08 (Solid Waste Management) to conform with the requirements of SB 1383 (Organics), followed by an amendment to the Agreement with Recology on June 28, 2022, in coordination with Zero Waste Sonoma, to meet the various new requirements of SB 1383; and WHEREAS, Included in this amendment was an extension of the Agreement for 5 years to June 30, 2028; and
WHEREAS, On June 27, 2025, Recology formally requested a detailed rate review (DRR) with a proposed 23.8% increase in the cost of solid waste collection service rates as outlined in Section 6 of the Franchise Agreement (Agreement) between the City and Recology; and
WHEREAS, the City retained R3 to review the DRR, including an analysis of Recology’s financial statements, records, and rate adjustment calculations, which identified some potential reductions to Recology’s rate adjustment request; and WHEREAS, Given the magnitude of Recology’s requested rate adjustment (even after adjustments identified by R3) and further given that the Agreement is set to expire in just over two years, on June 30, 2028, R3 advised the City to consider engaging in negotiations with Recology to reduce the amount of rate adjustment, extend the term of the Agreement, and potentially secure other enhancements; and
WHEREAS, the City Council appointed an Ad Hoc committee of Vice Mayor Harvey and Councilmember Savage to review the proposed amendment to the Agreement and continue the review of any additional changes to the Agreement or rate structure; and WHEREAS, the primary terms of the amendment are:
• 10 year extension, from 2028 to 2038, to go into effect on June 1, 2026. • Setting the first 5 years of rates at 9%, 8%, 7%, 6% and 6%. • Future years are based on 100% of CPI + 1%, but with a rate cap of 5%. • Extraordinary adjustments (aka DRR) are limited to a maximum of 2 over the term of the agreement and can only be requested for a change in law or other major unexpected change that materially increases operational expenses. This explicitly excludes changes due to collective bargaining agreements, equipment purchases, or other reasonably anticipated items.
• Expressing the mutual interest of both parties to continue discussions regarding mutually agreed modifications to the Agreement over the next year.
NOW THEREFORE BE IT RESOLVED, that the City Council hereby adopts the 2nd Amendment to the Franchise Agreement with Recology.
IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on May 26, 2026, by the following vote, to wit:
Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney