Fremont City Council Meeting: 06/17/25 07:00 PM
3300 Capitol Avenue Div/Dept: Environmental Services
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5469) DOC ID: 5469
Updated: 6/12/2025 10:04 AM by Dina Lewis Page 1
AMENDED AND RESTATED SOLID WASTE TRANSFER AND RECYCLING PROCESSING AGREEMENT- Authorize the City Manager to Execute an Amended and Restated Agreement with BLT Enterprises Combining the Transfer Station and Curbside Processing Agreements and Aligning the Contract Terms Contact Persons:
Name: Kathleen Cote-Guarnieri
Title: Environmental Services Manager
Div/Dept: Environmental Services
Phone: 510-494-4583
E-Mail: [email protected]
Executive Summary: The City contracts with BLT Enterprises to process residential recycling and consolidate and transfer solid waste received 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 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. Staff recommends the City Council authorize the City Manager to execute this merged restated agreement that implements the City Council’s direction. The process of merging and consolidating the two contracts and 14 amendments took longer than originally anticipated due to the volume of work required and complexity of the task.
There is no General Fund impact as any costs associated with these services are funded by solid waste rate payer fees.
BACKGROUND: The City has four solid waste agreements, including waste collection, solid waste transfer services, recycling processing and landfill disposal, which are all elements of providing solid waste services to Fremont residents and businesses. Collection is provided by Republic Services, landfill disposal is provided by Waste Management at Altamont Landfill and solid waste transfer and recycling processing services are provided by BLT Enterprises at the Fremont Recycling and Transfer Station (Transfer Station). Fees for these various solid waste services are calculated biennially in accordance with each contract's terms. The various solid waste fees are all components of the solid waste collection rates set once every two years by the Council and charged to ratepayers. The current rates are in effect through December 31, 2025.
Solid Waste Transfer Agreement: Prior to development of the Fremont Recycling and Transfer Station, solid waste was collected and hauled by Republic Services for disposal at Tri-Cities Recycling and Disposal Facility, a landfill located at the terminus of Auto Mall Parkway. In anticipation of the landfill reaching capacity, the City entered into a facility Council Staff Report (ID # 5469) Meeting of June 17, 2025 Updated: 6/12/2025 10:04 AM by Dina Lewis Page 2
development and operating agreement with BLT Enterprises to meet its long-term waste disposal needs. This Solid Waste Transfer Agreement (Agreement between the City of Fremont and BLT Enterprises of Fremont, Inc for Recyclable Diversion and Transfer Services) was executed in April 2004. Due to delays with the landfill closure date, solid waste delivery to the Fremont Recycling and Transfer Station did not commence until July 1, 2007. This delivery date triggered the 30-year contract term with an expiration date of June 30, 2037. The Solid Waste Transfer Agreement contains numerous sections related to facility development and readiness and City obligations to transition delivery of waste that are now obsolete.
The contract has been amended seven times to settle contract disputes, address new regulatory requirements, and respond to evolving City needs, as listed below:
1. Amendment 1 (April 2006) - Modified the facility opening date from January 2006 to a phased opening in May 2006 with full services beginning July 2007.
2. Amendment 2 (May 2007) - Added Household Hazardous Waste (HHW) Drop-Off services plus changes to transfer equipment and insurance requirements.
3. Amendment 3 (June 2007) - Newark and Union City added as transfer station users for delivery of their franchised solid waste with a per ton host fee paid to Fremont.
4. Amendment 4 (June 2012) - Incorporated delivery and processing of commercial recycling material collected in Fremont to settle a material delivery dispute.
5. Amendment 5 (February 2014) – Incorporated a tiered compensation structure for processing of commercial recycling material retroactive to June 2012.
6. Amendment 6 (May 2015) - Extraordinary compensation settlement including update to rates for facility wage increase, settlement of extraordinary transportation costs, and addition of health insurance index in biennial rate setting formula. Compensation was approved in two phases: facility wages December 10, 2013, and transportation costs December 16, 2014.
7. Amendment 7 (July 2024) - Incorporated time sensitive items into the agreement in advance of completion of the restated agreement including: authorization to proceed with recycling processing equipment design, retention of existing curbside compensation structure, addition of commercial food waste transfer services, addition of C&D (construction and demolition) processing services, update to HHW administrative fee, and clarification of self-haul fees remitted by BLT.
The seventh amendment included additional services for commercial food waste transfer and C&D processing services. The existing solid waste rate structure and incoming revenue is adequate to cover these new services; however, the budget authorization for the increased FY 2024/25 expenses of $550,000 was overlooked and has been included in this report.
Curbside Processing Agreement: Prior to development of the Transfer Station, the Republic Services direct hauled residential curbside recycling and organic material to Republic Services’ Newby Island Material Recovery Facility located on the Milpitas/San Jose border. The City conducted a procurement process when the City’s curbside processing contract with Republic Services expired and chose to transition curbside recycling processing to the Transfer Station. At the time, curbside organics were co-collected in split body trucks along with recycling and therefore organic material had to be offloaded at the Transfer Station as well.
The Transfer Station does not have the capability to compost organic material, so it is consolidated and transported to Newby Island for composting. These services are covered Council Staff Report (ID # 5469) Meeting of June 17, 2025 Updated: 6/12/2025 10:04 AM by Dina Lewis Page 3
under the Curbside Processing Agreement (Agreement between the City of Fremont and BLT Enterprises of Fremont, Inc for Curbside Recyclable Materials and Curbside Organic Waste Services). The contract term was established for a 20-year period in consideration of the expected life of the processing equipment. Curbside material delivery began June 1, 2006, approximately 1 year prior to the Transfer Station accepting solid waste. This delivery date triggered an expiration date of May 31, 2026. Due to the different contract terms, the City elected to execute a separate Curbside Processing Agreement rather than incorporating these services into the Solid Waste Transfer Agreement.
The Curbside Processing Agreement has been amended six times to address contract disputes, address new regulatory requirements, and respond to extraordinary impacts on the economics of processing the City’s curbside recycling material. These extraordinary conditions began with policy changes enacted by the Chinese government (known as National Sword), which increased recycling processing costs while reducing the market value of processed material. The amendments are:
1. Amendment 1 (July 2008) - Established curbside recyclable offset fee for material processed from outside of the tri-cities.
2. Amendment 2 (May 2015) – Settled extraordinary compensation dispute including update to rates for facility wage increase, settlement of extraordinary transportation costs, and addition of health insurance index in biennial rate setting formula.
Approved in two phases: facility wages December 10, 2013 and transportation December 16, 2014.
3. Amendment 3 (July 2018) - Short term extraordinary compensation adjustment related to National Sword for 18-month period ending May 31, 2019, with option to extend through November 30, 2019.
4. Amendment 4 (November 2019) - Short term extension of extraordinary compensation through May 31, 2020.
5. Amendment 5 (June 2020) - Short term extension of extraordinary compensation with addition of incoming per ton recycling processing fee through December 31, 2021. Included compensation for material landfilled during processing suspension period (March 30-May 31, 2020).
6. Amendment 6 (June 2022) - Compensation terms set effective through contract expiration of May 31, 2026 including continuation of per ton incoming processing fee and reductions to per ton mixed paper processing fee and per ton landfill residue payment. Biennial adjustment mechanism established.
Prior Council Direction: 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. Staff recommended the following elements be included:
• Pricing for curbside processing
• Commercial food waste transfer services
• Performance/processing standards
• Fremont benefit for additional long term incoming curbside material stream • Construction & Demolition Debris processing
• Upgrades to the recycling processing equipment
Council Staff Report (ID # 5469) Meeting of June 17, 2025 Updated: 6/12/2025 10:04 AM by Dina Lewis Page 4
• Removal of obsolete provisions and exhibits
• Consolidation of retained exhibits
Due to the substantial lead time required to design and order the new recycling processing equipment, and the benefit of implementing the proposed service enhancements sooner rather than later, most of these elements were implemented as part of the seventh amendment to the Solid Waste Transfer Agreement while the parties continued to work on merging the agreements.
DISCUSSION/ANALYSIS: The Amended and Restated Solid Waste Transfer and Recycling Processing Agreement implements prior City Council direction. Except for the extension of curbside processing services through June 30, 2037, expressly authorized in the City’s Council’s February 2023 action, the Amended and Restated Agreement is a consolidation of existing terms and conditions and does not add or change any obligations for the City or BLT Enterprises. The consolidation of the agreements and elimination of obsolete provisions will greatly streamlines the contract and improves the readability and utility of the document.
FISCAL IMPACT: No rate payer impacts are expected because the extended contract term for curbside processing will be sufficient to amortize equipment upgrade costs. Staff anticipate that the existing solid waste collection rate structure and biennial adjustment procedure will continue to be adequate to fund all necessary solid waste and recycling collection, processing, and disposal costs. There is no General Fund impact as any costs associated with these services are funded by rate payer fees.
Staff is recommending a FY 2024/25 budget appropriation of $550,000 to account 11541094-6106 (Integrated Waste Management Disposal Differential Contract Services) for the commercial food waste transfer and C&D processing services added to the Solid Waste Transfer Agreement in amendment 7. There is adequate incoming revenue from solid waste collection fees to cover these services, but the budget appropriation request was inadvertently omitted from that action. These costs have been included in the recommended FY 2025/26 budget. There is no General Fund Impact.
ENVIRONMENTAL REVIEW: Authorizing execution of the Amended and Restated Solid Waste Transfer and Recycling Processing Agreement 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)(2), (4) and/or (5) as administrative or fiscal actions which do not have the possibility to cause a significant effect on the environment, and/or CEQA Guidelines Section 15061(b)(3) in that it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. Each of the foregoing provides a separate and independent basis for CEQA exemption.
ATTACHMENTS: None.
RECOMMENDATIONS:
1. Authorize the City Manager, or designee, to execute the Amended and Restated Solid Waste Transfer and Recycling Processing 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.
Council Staff Report (ID # 5469) Meeting of June 17, 2025 Updated: 6/12/2025 10:04 AM by Dina Lewis Page 5
2. Increase the authorized budget in account 11541094-6106 (IWM Disposal Differential Contract Services) by $550,000 for services for commercial food waste transfer and C&D processing services previously authorized.