CITY COUNCIL Staff Report
Meeting: July 19, 2022
Subject
Consider a Master Agreement between the City of Cupertino and HF&H Consultants, LLC, to provide professional services for assisting with the negotiation of a new landfill agreement for the City’s garbage, conducting a cost-based review of Recology’s rates, conducting a performance evaluation of Recology, and conducting an audit of compostable materials.
Recommended Action
Authorize the City Manager to approve a Master Agreement between the City of Cupertino and HF&H Consultants, LLC, in an amount not-to-exceed $350,000, for the term ending May 30, 2025.
Background
Throughout the next three years, the City needs to complete several significant tasks related to the solid waste program where staff recommends drawing upon industry experts. These tasks include ensuring compliance with evolving State laws, conducting rate studies, and performing agreement compliance evaluations and auditing. On April 26, staff issued a Request for Proposals (RFP) for these services. Three companies submitted proposals and HF&H was selected as the most qualified firm to deliver the identified tasks.
Discussion
Upon approval, HF&H will be contracted to provide the following specific tasks:
Task 1: Assistance Securing Disposal Services
Waste deposited into garbage carts and bins in the City is collected by Recology trucks and driven directly to Newby Island Landfill for disposal through an agreement with International Disposal Corporation, a subsidiary of Republic Services. That agreement, which was established in 1989 and amended in 2002, expires November 20, 2023. The City needs to establish a new agreement to ensure a destination for collected garbage before that date. Several options exist, including extending or establishing a new agreement with International Disposal, or exploring opportunities for greater waste diversion from landfill. Those options could include routing some or all of Cupertino’s material through a sorting facility that could recover erroneously disposed recyclable and compostable materials before sending the residual waste on to a landfill. Routing disposed material through a material recovery facility for increased diversion is an action specified in the City’s Climate Action Plan 2.0, currently under development.
Task 2: Assistance with Year Four Cost-Based Hauler Rate Adjustment The City has a Franchise Agreement with Recology Cupertino for recyclable materials, organic materials, solid waste collection, recyclable materials and organic materials processing services, and transport for disposal. That Franchise Agreement went into effect February 1, 2021, and while the first three years of customer rates were set as part of the City Council approval process, the agreement requires a cost-based rate analysis ahead of rate year four. That process goes beyond the index-based adjustments specified for later rate years and instead evaluates all costs incurred by Recology to provide the required services.
Task 3: Assistance with Performance Review and Audit of Hauler The Recology Agreement allows two performance reviews during the 10-year term. A logical timeframe for performing the first review is in 2023, which would determine if Recology is providing the City the required level of service in all areas specified in the Franchise Agreement. Assistance with this task will result in a report with recommendations on any areas for improvement and provide support for ongoing monitoring.
Task 4: Residue Audits
The City’s Franchise Agreement with Recology includes collection of organics such as food scraps and food-soiled paper. To check compliance and progress toward meeting the State requirements and goals of Senate Bill (SB) 1383, staff recommends conducting residue audits at the transfer station to provide actual City-specific residue amounts. Collected organic materials for composting are normally commingled at the transfer station with materials from other cities, making it difficult to see Cupertino-specific progress. This type of residue audit would be designed to provide information on Cupertino’s materials without the expense of a full waste characterization.
Sustainability Impact
CalRecycle reports that of the nearly 35 million tons of waste that reaches California’s landfills each year, approximately 80% could be recoverable. Though Cupertino is exceeding State mandates for waste diversion, the City’s continued efforts to accelerate zero waste targets recommended in the City’s Climate Action Plan align with Assembly Bill (AB) 32 goals and reflect those adopted by adjacent jurisdictions. Establishing a new agreement for disposal of materials to landfill and ensuring proper administration of the City’s Franchise Agreement with Recology will provide solid waste diversion that meets or exceeds State and City goals and requirements while maintaining a regionally competitive maximum rate structure for services provided by the franchisee.
Fiscal Impact
No fiscal impact, as these funds were approved by City Council on March 1, 2022, as part of the mid-year amendment to the Fiscal Year 21-22 Operating Budget under Budget Modification #2122‐189 for New Landfill Agreement and Solid Waste Consulting Services. No additional budget appropriations are needed. _____________________________________
Prepared by: Ursula Syrova, Environmental Programs Manager Reviewed by: Chad Mosley, Acting Director of Public Works Reviewed and Approved for Submission by: Dianne Thompson, Acting City Manager Attachments:
A – Draft Master Services Agreement with HF&H
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