Fremont City Council Meeting: 07/09/24 07:00 PM
3300 Capitol Avenue Div/Dept: Environmental Services
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5209) DOC ID: 5209
Updated: 7/1/2024 4:32 PM by Dina Lewis Page 1
TRANSFER STATION AGREEMENT AMENDMENT - Authorize Execution of Amendment Authorizing BLT Enterprises to Proceed with Design of Recycling Process Equipment Upgrades and Incorporate Enhanced Waste Diversion and Processing Services and Making Findings of CEQA Exemption Contact Persons:
Name: Kathleen Cote-Guarnieri Dan Schoenholz
Title: Environmental Services Manager Community Development Director Div/Dept: Environmental Services Community Development
Phone: 510-494-4583 510-494-4438
E-Mail: [email protected] [email protected]
Executive Summary: On February 17, 2023 the City Council authorized staff to negotiate a merged restated agreement with BLT Enterprises to consolidate the Curbside Processing and the Solid Waste Transfer agreements into a single document, align the contract terms for the two agreements, update language to reflect current regulatory and market conditions, upgrade the recycling processing equipment, and incorporate enhanced waste processing and diversion services. The process of merging the contracts, each with six amendments, is taking longer than initially anticipated and will not be concluded until mid to late fall.
Due to the substantial lead time required to design and order the new recycling processing equipment, staff recommends the City authorize BLT to proceed with the recycling equipment engineering drawings as soon as possible. It would also be beneficial for the City to implement the proposed service enhancements sooner rather than later while the parties continue work on merging the agreements. To accomplish this, staff recommends the City Council authorize the City Manager to execute this Seventh Amendment to the Agreement between the City of Fremont and BLT Enterprises for Recyclables Diversion and Transfer Services (Solid Waste Transfer Agreement). The terms of the proposed amendment are consistent with City Council’s previous direction and will be reflected in the merged agreement to be considered by the City Council later this year.
The cost of these enhanced services was considered in the 2024-2025 solid waste collection rates approved by the City Council as well as the Integrated Waste Management FY 2024/25 budget. No additional budget appropriation is required and there is no General Fund impact.
BACKGROUND: The City contracts with BLT Enterprises for curbside processing and solid waste transfer services conducted at the Fremont Recycling and Transfer Station. These services are provided under two separate agreements: the Curbside Processing Agreement expiring May 31, 2026, and the Solid Waste Transfer Agreement expiring June 30, 2037.
On February 17, 2023, the City Council authorized staff to negotiate an amended and restated agreement with BLT Enterprises to upgrade the processing equipment, extend and align the contract term of curbside processing to match the term for transfer services and combine the two contracts into a single restated agreement. This authorization also included Council Staff Report (ID # 5209) Meeting of July 9, 2024 Updated: 7/1/2024 4:32 PM by Dina Lewis Page 2
consolidation and transfer of commercial food waste, and additional processing of construction and demolition debris for improved waste diversion.
Since the restated merged agreement will not be ready until mid to late fall, staff is recommending executing this Seventh Amendment to the Solid Waste Transfer Agreement to proceed with several urgent items.
DISCUSSION/ANALYSIS: This Seventh Amendment would include the components listed below and be reflected in the merged agreement presented to the City Council later this year. These revisions are consistent with previous City Council authorization.
1) Authorization to proceed with curbside equipment design – effective upon contract execution
The amendment would provide BLT with the authorization to proceed with curbside equipment design drawings at an estimated cost of approximately $1.4 million. These costs have been included in the extension of curbside agreement term and continuation of the existing compensation structure proposed as part of the merged restated agreement. If the merged restated agreement is executed, there would be no additional cost to the City. In the unlikely event that the parties do not reach agreement on a merged restated agreement, BLT would be entitled to reimbursement for the curbside equipment design costs incurred. Staff would return to the City Council with a proposed settlement consistent with the current extraordinary review provisions contained in the Solid Waste Transfer Agreement.
2) Transfer of Commercial Food Waste – effective October 1, 2024
The amendment includes the consolidation and transfer of commercial food waste through the Fremont Recycling and Transfer Station. Currently Republic Services direct hauls this material to the Newby Island Composting Facility. This change is expected to provide the City additional flexibility to address contamination issues, improve the diversion of commercial food waste, and enhance the City’s ability to comply with State organic waste diversion requirements. Staff is proposing compensating BLT Enterprises $51.34 per ton for commercial food waste transferred and adjusting this compensation as part of the biennial rate adjustment process. The current Commercial Food Waste Bypass Fee of $33.70 would cease, effective September 30, 2024.
3) Additional Processing of Construction and Demolition Waste – effective January 1 Due to facility site constraints, BLT Enterprises has limited ability to process and recycle construction and demolition (C&D) material on site. In response to the City’s interest in reducing the volume of C&D material landfilled, BLT Enterprises has piloted a program using an agreement with Zanker Road Resource Management to process and divert C&D material delivered from the transfer station. This arrangement has been beneficial for meeting the City’s waste diversion goals and the proposed amendment would provide compensation to BLT in addition to the MSW (municipal solid waste) tip fee, to fund the additional transportation and handling of this material for up to 5,500 tons per year.
Staff is recommending compensating BLT for the transportation and processing of material during the pilot phase of January – July 2024 at $49.13 per ton. This rate would increase to $50.23 in August 2024 due to a prevailing wage adjustment for the transfer Council Staff Report (ID # 5209) Meeting of July 9, 2024 Updated: 7/1/2024 4:32 PM by Dina Lewis Page 3
drivers. This rate would be adjusted as part of biennial rate setting consistent with the methodology used for setting the MSW tip fee.
4) HHW Administrative Fee – effective July 1, 2024
The Solid Waste Transfer Agreement includes a monthly administrative fee for operating the Household Hazardous Waste (HHW) drop off facility which has been a fixed amount since HHW services began in June 2007. The amendment would increase the HHW administrative fee from $3,500 to $5,507 per month based upon CPI index changes from June 2007 – June 2023 and adjust the administrative fee biennially consistent with other CPI adjusting components of the rates. The anticipated adjustment was included in City’s HHW drop off facility funding agreement with StopWaste, recently approved by the City Council.
5) Clarification on Material Processing and Diversion Fees included in self-haul rates – effective January 1, 2024
The amendment would clarify that the self-haul rates include the following material processing and diversion fees which are remitted to the City through a monthly administrative process: demolition debris $10.54/ton, minimum charge debris $3.87/ton, and all other self-haul $8.45/ton. This is a clarification of existing 2024-2025 rates rather than a change in rates.
6) Hosting of Annual Compost Giveaway Event
There has been a long-standing practice of the Fremont Recycling and Transfer Station hosting the City’s annual Compost Giveaway on a spring Sunday date mutually agreed upon by the parties. The City is proposing to confirm this arrangement in the Facility Operation section of the agreement.
FISCAL IMPACT: The existing solid waste collection rate structure and Integrate Waste Management budget will be adequate to fund the proposed costs. There is no General Fund impact as any costs associated with these services are funded by rate payer fees.
ENVIRONMENTAL REVIEW: Authorizing an amendment to the Solid Waste Transfer Agreement as described this staff report is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a “project” as defined in CEQA Guidelines Section 15378(b)(5) and as it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment per CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance.
ATTACHMENTS: None.
RECOMMENDATION: Authorize the City Manager or her designee to execute the Seventh Amendment to the Agreement between the City of Fremont and BLT Enterprises for Recyclables Diversion and Transfer Services (Solid Waste Transfer Agreement), take all reasonable actions necessary and appropriate to implement the same, and find the action is exempt from CEQA as specified in this Report.