City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: June 16, 2025
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution 2025-41 Franchise Agreement with Soledad, Greenfield, and TriCities Disposal Services
RECOMMENDATION
It is recommended that the City Council adopt Resolution 2025-41, A Resolution of the City Council of the City of Gonzales Approving An Agreement Between the City of Gonzales, City of Soledad, City of Greenfield, and Tri-Cities Disposal & Recycling Services from July 1, 2025 Through June 30, 2035 in Substantial Form and Content, and Authorizing the City Manager to Execute said Agreement on Behalf of the City Gonzales, and Approving the FY 2025-2026 Garbage Collection and Disposal Rates.
BACKGROUND
In 2004, the cities of Gonzales, Soledad, and Greenfield entered into a Franchise Agreement with TriCities Disposal & Recycling (TCDR) to provide waste collection services. This agreement was later extended and then further revised and restated in 2017 and is set to expire June 30, 2025.
As the designated contract administrator, the Salinas Valley Solid Waste Authority (SVSWA) has been working with the four South Monterey County Cities to plan for a new service agreement. In June 2022, SVSWA solicited proposals from consultants to conduct the new franchise hauler procurement for the Cities. After no proposals were received, the cities authorized SVSWA to administer the procurement process.
A Request for Proposals (RFP) for waste hauler services was released on March 17, 2023. On June 30, 2023, SVSWA received proposals from three companies (GreenWaste Recovery, Recology, and Waste Management). The proposals were reviewed by the RFP evaluation team (made up by SVSWA and South County cities’ staff). The rates proposed were compared to the equivalent services at the current contract rates and found to be significantly higher. The proposal rates ranged from an average of 33% to 55% increase in certain customer service rates, with some services reaching almost 100% increase.
AGENDA
ITEM
16 As a result, in October 2023, the four cities rejected the submitted proposals and directed SVSWA staff to enter discussions with the two current South Monterey County franchise haulers for a potential contract extension, as the Cities concurred that TCDR services and costs have been effective and equitable. Based on the cities’ direction, SVSWA contacted TCDR about the possibility of a contract extension. TCDR was asked about the option to bring King City into its contract. TCDR’s company owner declined due to the costs involved in expanding the operation. SVSWA has been working with Tri-Cities and the cities to finalize the proposed Agreement.
The proposed Franchise Agreement (Agreement) will commence July 1, 2025. The Agreement has been reformatted to include new regulatory language, especially pertaining to SB 1383, and maintains, in its majority, the current services with new provisions to address issues such as container contamination and customer participation for compliance with State mandates.
The resolution approving the Agreement as to substantial form and content and authorizing the City Manager to execute the revised and restated franchise is part of this staff report. The new Agreement is included as Exhibit A. As with lengthy agreements of this type, and particularly where three different cities, three City managers, and two attorneys are involved, there is the possibility that minor changes may be made to the Agreement before its final execution by all parties. As such, staff is asking that the Agreement be approved as to substantial form and content, a phrase that will allow for minor modifications to be made after the Council’s approval. Any proposed significant change to the Agreement would require staff to bring the Agreement back to Council for further consideration.
REVIEW AND ANALYSIS
During negotiations, current services and cost control were established as the highest priorities.
Therefore, the proposed Franchise Agreement primarily revises language to address new state requirements and includes a minor change to an existing service, reducing the curbside Bulky Items Collections to four times per year instead of ten.
The proposed customer rates are composed of five contractual cost components (TCDR service and SVSWA disposal) and the City’s franchise fee. Each year, these components are individually adjusted by their respective cost indicators.
The new Agreement proposes an average 12.94% increase to the current customer rates. Although this number is relatively high compared to increases in previous years, it is considerably lower than the proposals received in the original RFP, which increases ranged between 33% - 55%.
The 12.94% average increase to the customer rates consists of:
• An average 8.99% increase to TCDR service cost component, primarily due to increased labor costs from its most recent bargaining agreement,
• An average 1.79% increase to SVSWA pass-through disposal costs, mostly due to its recent increase to its AB 939 fees to cover compost/mulch procurement for the Cities to comply with SB 1383, and
• An average 2.16% consequential increase to the Cities franchise fees.
The Garbage Collection and Disposal Rates for FY 2025-26 (Attachment “A” to the Resolution) reflect the aforementioned customer rate adjustments. The following table is a summary of the most common service level rates.
Weekly
Service
Current Rate
7/01/2024
Proposed Rate
7/01/2025
Dollar
Increase
Percent
Increase
48-Gallon Cart $36.12 $41.99 $5.87 16.3%
64-Gallon Cart $56.52 $64.25 $7.73 13.7%
96-Gallon Cart $77.01 $86.65 $9.64 12.5%
1 cubic yard
1x/Week $214.59 248.83 $34.24 16.0%
3 cubic yard
1x/Week $503.15 569.27 $66.12 13.1%
As provided in the Agreement, a CPI adjustment will be made annually, effective July 1st each year.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: The proposed Franchise Agreement is a collaborative effort between the City, the partnering Cities, the Waste Collection Franchise and Salinas Valley Solid Waste Authority to provide essential public health and safety services through enhanced waste collection to city residents and local businesses.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: The approval of this item demonstrates the City’s leadership and commitment to comply with environmental regulations.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: This action enables compliance with regulatory requirements of waste collection and diversion while balancing costs and services.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: This franchise is part of the critical infrastructure needed for our community. The efficient operations of our solid waste franchise are cost-effective.
ALTERNATIVES
Alternative 1 - The City Council could ask for more details before approving the attached Agreement.
Alternative 2 - The City Council could determine this Agreement is not in the best interest of Gonzales and decline to approve. The current Franchise ends June 30, 2025; therefore, a short-term extension would need to be negotiated until a new Agreement is secured
BUDGET IMPACT
The increase in collection rates will generate additional franchise fees for the City since the 20% franchise fee is charged on the total rates.
CONCLUSION
It is recommended that the City Council adopt Resolution 2025-41, A Resolution of the City Council of the City of Gonzales Approving An Agreement Between the City of Gonzales, City of Soledad, City of Greenfield, and Tri-Cities Disposal & Recycling Services from July 1, 2025 Through June 30, 2035 in Substantial Form and Content, and Authorizing the City Manager to Execute said Agreement on Behalf of the City Gonzales, and Approving the FY 2025-2026 Garbage Collection and Disposal Rates.
Attachments:
1. Public Hearing Notice
2. Resolution No. 2025-41
3. Tri-Cities & Disposal Franchise Agreement
4. FY 2025-2026 Garbage Collection and Disposal Rates