Consent Item 3e
STAFF REPORT
Consent Agenda Item
DATE: November 3, 2025
TO: Honorable Mayor and Council Members
FROM: Amy Nilsen, City Manager
SUBJECT: Authorize the City Manager to Execute a Contract for Professional Services Agreement with CSG Consulting for SB 1383 Compliance and Franchise Agreement Development and Approve a Supplemental Budget Request STAFF RECOMMENDATION:
Authorize the City Manager to execute a Professional Services Contract with CSG Consultants to continue to assist the City with SB 1383 compliance and the development of an updated franchise agreement and approve a supplemental budget request in the amount of $22,890.
EXECUTIVE SUMMARY:
State mandate, Senate Bill (SB) 1383, requires significant changes to solid waste management by requiring the diversion of organics from landfills and includes mandatory residential and commercial organics collection programs, mandatory route audits, mandatory outreach/education, enforcement, procurement, reporting to Cal Recycle, etc. Cities are responsible for complying by updating franchise agreements/amendments with waste haulers.
Below is a visual summary of the City’s requirements under SB 1383.
Fortuna’s current franchise agreement and subsequent amendments are outdated and without provisions to meet SB 1383 or previous mandates, e.g., AB 341, SB 1826, and lack rate setting and transparency requirements for Recology. Fortuna joined Arcata, Eureka, and the County of Consent Item 3e
Humboldt (Jurisdictions), to hire consultant CSG to develop a new SB 1383-compliant franchise agreement and provide technical assistance for sole source negotiations with Recology.
CSG developed a new franchise agreement with Fortuna to:
o Include SB 1383 requirements, contractor performance requirements, current industry standards, and reporting compliance requirements to replace outdated current agreement
o Provide cost-effective programs/services to limit rate impact on ratepayers o Ensure the contractor provides a detailed rate-setting process and has a profit margin consistent with other jurisdictions
o Ensure Recology leverages its significant resources from other regions for Fortuna. (Recology Inc. has $1 Billion in revenue, 40 operating companies in CA, Oregon, Washington, and 3,700 staff)
It should be noted; the City is working to comply with the provisions of SB 1383 and CalRecycle has issued a Corrective Action Plan (CAP) with specific tasks and completion dates for the steps necessary for the City to comply with SB 1383. Many of the tasks required of the City will become the responsibility of Recology once the Franchise Agreement is executed.
Based on the incomplete state of the franchise negotiations, additional effort is necessary to complete the negotiations with Recology and approving this contract with CSG will provide the necessary effort to continue with the franchise agreement efforts and remain in compliance with the CAP.
In addition, CSG has been helpful with organics recycling, which is a requirement of SB 1383, by facilitating conversations on how and where the City will address organics recycling. City staff will return with a staff report on organics recycling and the services Humboldt Waste Management Authority offers. HWMA provides solid waste services to other local jurisdictions, of which Fortuna is not a member, which will include organics recycling.
FINANCIAL IMPACT:
The cost for the services from CSG Consultants would be for an amount not to exceed $22,890.
The cost of the agreement was not included in the City’s fiscal year 2025-26 budget under Fund 210, Solid Waste Fund. However, Fund 210 has approximately a $50,000 reserve balance and can be used to complete the franchise negotiations.
RECOMMENDED COUNCIL ACTION
Motion to authorize the City Manager to execute the Professional Services Agreement with CSG Consultants to continue assisting the city with SB 1383 compliance and development of a franchise agreement and approve a supplemental budget request in the amount of $22,890.
Consent Agenda vote.
ALTERNATIVE TO STAFF RECOMMENDATION:
The City Council may decide to not approve the contract with CSG. However, this is not recommended as this would leave the City in a difficult position to negotiate SB 1383 mandatory Consent Item 3e
requirements with Recology and potentially place the City in noncompliance with the CalRecycle CAP.
ATTACHMENT:
• Agreement between the City of Fortuna and CSG Consultants Inc. for Franchise Agreement Negotiation and SB 1383 Compliance Assistance • Supplemental Budget Request