Agenda #: 7.1
Meeting Date: February 4, 2025
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: AGREEMENT BETWEEN CITY OF DIAMOND BAR AND VALLEY VISTA SERVICES INC. FOR RESIDENTIAL SOLID WASTE
MANAGEMENT SERVICES AND WASTE MANAGEMENT
COLLECTION AND RECYCLING, INC. FOR COMMERCIAL SOLID
WASTE MANAGEMENT SERVICES.
STRATEGIC
GOAL: Safe, Sustainable & Healthy Community
RECOMMENDATION:
Approve, and authorize the City Manager to sign the agreements with Valley Vista Services, Inc. and Waste Management Collection and Recycling, Inc.
FINANCIAL IMPACT:
The agreements will generate total annual revenues of approximately $1,610,000, with annual adjustments, as detailed in subsequent sections.
BACKGROUND:
Since 2000, Valley Vista Services (VVS) and Waste Management Collection and Recycling, Inc. (WM) have been the City's exclusive commercial and residential solid waste haulers under three separately negotiated franchise agreements. In August 2010, the City Council granted second franchise agreements to VVS and WM. These agreements were amended and restated in 2017 and extended in 2023. Both are set to expire no later than August 31, 2025.
At the City Council Study Session of April 5, 2022, staff presented information regarding the status of the solid waste franchise agreements for review and discussion. The City Council directed staff to commence an exclusive procurement process with the current waste haulers in which both could submit a proposed scope of work for the service areas by sector or for citywide service, with the City reserving the right to select any combination. On June 21, 2022, the City Council awarded a contract to Sloan Vazquez McAfee, a consulting firm with extensive experience in the procurement and management of municipal solid waste collection franchises to assist with the procurement process.
The City’s project team (staff, City Attorney Omar Sandoval and Enrique Vazquez of Sloan Vazquez McAfee) developed a Request for Proposals (RFP) with a focus on a transparent and ethical procurement process that prioritizes high performance/quality and reliable service, value for ratepayers, compliance with state regulatory requirements (including SB 1383 organics requirements), and effective outreach and engagement with customers over the proposed term.
The RFP was released to VVS and WM on May 3, 2023. Three addenda to the RFP were provided and a total of 54 questions related to the RFP terms were submitted by the respondents. Both VVS and WM submitted complete proposals for commercial only, residential only, and citywide services by the August 30, 2023 response deadline.
At the January 16, 2024 regular meeting, the City Council deliberated the merits of the proposals and directed staff to complete negotiations with Valley Vista for residential service and Waste Management for commercial/roll-off service.
ANALYSIS:
With the Council’s direction, staff, consultants, and the two selected haulers began final contract negotiations, which resulted in the agreements before the City Council for consideration. The Valley Vista Services Agreement is included in Attachment 3. The Waste Management Agreement is included in Attachment 4. Key provisions of the agreements include:
1. Term of Agreement
The 10-year term begins September 1, 2025 and terminates August 31, 2035.
The City retains the sole option to extend the term up to 24 months.
2. General Service Requirements
Specific service requirements across sectors include, but are not limited to:
• Compliance with all state diversion requirements in both sectors, including organics collection and recycling.
• Standard cart, bin, and roll-off service.
Regular single-family dwelling collection service provided by VVS will be scheduled once per week, with standard service consisting of 65-gallon trash, recycling, and organic waste carts. Customers have the option to substitute standard refuse carts for either 35 or 96-gallon carts and increase recycling and organics carts if necessary. Rates are based on refuse cart size. Additional refuse carts are available at an additional cost, but residents may request up to two additional recycling carts and one additional organics cart at no extra charge.
Regular commercial and multi-family collection service provided by WM will be scheduled at least once per week, with standard service provided using a three-container program for the separate collection of refuse, recyclables, and organic waste. Customers retain the option to select 1,
1.5, 2, 3, 4 and 6-cubic yard bins based on the volume of refuse produced.
WM, following consultation with and approval by the City, shall offer cart service to commercial and/or multi-family customers with five or more units that do not have space for or do not generate enough waste to fill a bin.
• Free residential refuse cart overage collection (two per calendar year plus one end-of-year pickup.
• Cart and bin cleaning services available upon request (at a cost). • Backyard service. Residents determined to be disabled are eligible for free backyard service in which VVS will remove refuse, recyclable and green waste containers for collection and return them after they are serviced.
This service is also available for a fee for customers that are not disabled. • Availability of temporary bins.
• Free bulky item collection. Residential customers are eligible for four free bulky item pickups (up to three cubic yards of material per pickup) per calendar year. Bulky items include items too large to be contained in a cart such as furniture, appliances, large amounts of green waste, and electronic waste.
• Free household hazardous waste (HHW) pickups (two per year). HHW includes paint/paint products, cleaning solutions and household chemicals, batteries, etc.
• Free curbside used oil and filter collection available on regular collection days.
• Free mail-back sharps collection program. Upon request, secure containers are provided with prepaid postage.
• Free holiday tree collection service (natural trees only) from December 26 to the second Sunday in January.
• Free mulch and compost giveaway events (two per year). • Construction and demolition collection and disposal.
• Complimentary service at City facilities, events, and activities. • Abandoned items left in the public right-of-way (with the exception of hazardous waste) will be collected and disposed of at no charge. • Free storage containers for use by the City.
• Robust community education and outreach programming and materials (print, digital, and social media).
• Promotion of local environmental events and programs, including, but not limited to County HHW and e-waste collection and medication take-back. • Deployment of new clean fuel vehicles.
• Senior and Disabled Customer Discounts. Residential customers aged 60 or older are eligible for reduced service rates. Disabled residential customers are eligible for a 15% discount off the standard monthly service rates.
• Haulers shall ensure sufficient capacity of California recovered organics waste products to meet the mandatory procurement requirements for jurisdictions contained in SB 1383, including procurement of compost/mulch, securing of procurement credits, and/or use of renewable natural gas in vehicles.
3. Rates
This procurement process marks the first time that rates have been bid since 2000. As a result, ratepayers can expect significant savings in both sectors. Total ratepayer savings beginning in year one of the agreements is expected to be approximately $768,576 for the residential sector and $180,613 for the commercial sector, or about 9.8% less than current rate revenues. Seniors remain eligible for discounted rates (15%).
There are many rate categories included for each sector. Complete rate sheets are included as Attachments 1 and 2 and attached as exhibits to each Agreement. The following examples compare current and proposed rates for common service requests in both sectors.
Residential Service Current Rate Proposed Rate Difference 35 gallon trash $32.07 $29.89 -6.7%
64 gallon trash $39.52 $35.39 -10.5%
96 gallon trash $47.41 $40.11 -15.4%
Commercial Service Current Rate Proposed Rate Difference 3CY Bin 1/week $279.88 $144.54 -48.4%
3CY Bin 2/week $279.88 $260.18 -7%
3CY Bin 3/week $392.97 $375.81 -4.4%
3CY Bin 4/week $510.20 $491.45 -3.7%
VVS and WM would be eligible for an annual rate increase based on a standardized formula that accounts for business-related costs, including annual changes in disposal rates, labor, fuel, and other factors. Rate increases are capped at 5%, unless the adjustment is made under the provisions of an Extraordinary Rate Adjustment. Extraordinary Rate Adjustments may be requested if there are changes in direct fees charged at disposal sites, changes in applicable laws requiring new services or obligations, or any other change in costs outside the hauler’s reasonable control. Extraordinary Rate Adjustments must be accompanied with justification in support of the request and must be approved by the City Council.
4. Fees and Other Funding
The proposed agreements include the following fees paid to the City, which total approximately $1,610,000 in year one. All fees will be adjusted annually using CPI to ensure payments remain in line with associated costs. • Franchise Fees. In the first year, VVS and WM will pay the City $287,000 and $123,000 respectively ($410,000 total). These fees are not passed through to customers and are paid directly to the City by the contractors. • CalRecycle Compliance Fee. In the first year, the City will collect $750,000 to cover the City’s costs to comply with State mandates resulting from the enactment of AB 939 and subsequent related legislation including, but not limited to AB 2176, SB 1016, AB 341, AB 1826, and SB 1383. These laws require jurisdictions to implement solid waste collection programs, meet processing facility requirements, conduct contamination monitoring, provide education, maintain records, submit reports, monitor compliance, conduct enforcement, among other mandated requirements. • Residential Vehicle Impact Fee. The City will collect $175,000 from VVS to offset a portion of the costs necessary to maintain roadways due to the wear and tear caused by waste collection vehicles on City streets. • Residential Street Sweeping Fee. The City will collect $175,000 from VVS to offset a portion of the costs necessary to provide street sweeping services on residential streets.
• Contracting Fee. The City will collect a one-time $100,000 payment to reimburse the City for costs it incurred in connection with entering into this Agreement. This figure is not included in ongoing annual revenue estimates.
5. Accountability
To ensure franchisee compliance and accountability to the City and its residents throughout the term, a series of performance management requirements are included.
• Reporting – Haulers will provide standardized monthly and annual reporting of diversion rates/AB 939/SB 1383 compliance consistent with state requirements, special services rendered (bulky item/household hazardous waste, etc.), customer outreach/complaints, and financial statements, among other items pertinent to local service. City staff will meet regularly with hauler representatives to ensure compliance. • Customer Service Satisfaction Survey - At the City’s request, haulers will conduct a survey of customers to determine overall customer satisfaction with services. The content of the survey must be approved by the City. • Performance Audits – Performance audits will be scheduled every third year, beginning in 2027. The scope of the audit is at the City’s discretion, and may include general contract compliance, customer service levels, financial review, tonnage/diversion rates, etc. Haulers shall reimburse the City for the cost of the audit.
• Liquidated Damages – Breaches of agreement provisions may result in a financial penalty.
6. Public Outreach and Engagement Regarding Transition
Upon commencement of the new agreements, residential and commercial customers will have new waste haulers, service accounts, and customer service contacts for the first time in 25 years. City staff, in cooperation with VVS and WM, will develop a comprehensive multimedia resident and business outreach plan to educate and inform the community about what to expect with the impending changes in providers. This campaign will be released well in advance of the official transition date to ensure the information is readily available.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Agreements as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 7.1.a Proposed Residential Rates
2. 7.1.b Proposed Commercial Rates
3. 7.1.c Solid Waste Services Agreement - VVS
4. 7.1.d Solid Waste Services Agreement - WM