CITY OF HAWAIIAN GARDENS
CITY COUNCIL
STAFF REPORT
Agenda Item #C1
DATE: October 22, 2025
TO: Honorable Mayor and Members of the City Council
FROM: Ernesto Marquez, City Manager
BY: Neema Ghanbari, M.S., P.E., Public Works Manager
RECOMMENDATION:
RECOMMENDATION TO ADOPT RESOLUTION NO. 031-2025, CONSENTING TO THE
ASSIGNMENT OF THE EXCLUSIVE SOLID WASTE SERVICES FRANCHISE AGREEMENT WITH WASTE RESOURCES, INC. TO USA WASTE OF CALIFORNIA, INC.
AND APPROVING AMENDMENT NO. 3 TO THE FRANCHISE AGREEMENT
SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT B AND AUTHORIZE THE CITY
MANAGER TO EXECUTE ALL NECESSARY DOCUMENTS, IN A FORM APPROVED BY
THE CITY ATTORNEY
SUMMARY
On November 19, 2019, the City Council adopted Resolution No. 111-2019, approving the assignment of the Agreement from Commercial Waste Services (CWS) to Waste Resources Inc. (WRI), the current Franchisee.
On September 28, 2021, pursuant to Resolution No. 025-2021, the City and WRI entered into Amendment No. 1 to the Agreement, setting forth additional performance requirements and service obligations on the part of WRI to guarantee that City complies with all State mandated solid waste legislation; specifically, Senate Bill 1383, Short Lived Climate Pollutants, (“SB 1383”), mandating that all residential and commercial waste generators throughout the state separate and recycle their organic waste materials, or face fines and penalties for non-compliance—compulsory under State law.
On October 11, 2022, the City and WRI executed Amendment No. 2, which replaced the previous rate schedules for multi-family, commercial, and industrial (MF/C/I) services with those established in Resolution No. 025-2021. The amendment also eliminated the former "Franchise Fee" provisions and instituted a new requirement for the Franchisee to remit quarterly payments to the City equal to 10% of gross receipts, with applicable penalties for late or inaccurate payments.
Agenda Item #C1
October 22, 2025
In July 2025, the City Manager received a letter from WRI notifying of a proposed asset sale to USA Waste of California Inc., Waste Management (WM). This notification was accompanied by an introductory letter and information supporting an accompanying requested franchise assignment from WRI to WM.
The letter requesting consent to the assignment was reviewed by the City Attorney’s Office.
Upon receipt of the request, the City Manager and Public Works Manager held multiple meetings with the City Attorney and the City’s consultant, Muni Environmental, and initiated a due diligence process to evaluate WM’s qualifications and its capacity to perform in accordance with the terms of the existing contract.
On August 21, 2025, City staff met with representatives from WRI and WM, who presented a comprehensive overview of the company’s corporate capabilities and qualifications, as outlined in the Assignment Supporting Information report submitted with WRI’s original assignment request letter. The report highlighted the company’s financial performance, industry experience, local operational network, regulatory compliance, and commitment to best practices necessary to ensure successful service delivery in the City of Hawaiian Gardens.
WM is the largest waste disposal company in the United States by revenue, according to Waste360. WM currently holds exclusive franchise agreements in the cities of Los Angeles, Long Beach, Lancaster, and unincorporated areas of Los Angeles County, as well as in numerous other Southern California jurisdictions—demonstrating a well-established and reliable presence in the region. WM is a corporation in good standing with the California Secretary of State; although incorporated in California, the company’s corporate headquarters are located in Texas. WM operates several permitted solid waste facilities throughout the state and possesses extensive experience with CalRecycle reporting requirements. Based on this information, staff concludes that WM has demonstrated the necessary experience, regulatory compliance, and operational capacity to successfully assume service responsibilities within the City of Hawaiian Gardens.
Therefore, staff recommends that the City Council adopt Resolution No. 031-2025, granting consent to the assignment of the exclusive solid waste services franchise agreement from WRI to WM and approving Amendment No. 3 to the Agreement substantially in the form attached as Exhibit B. The proposed amendments to the Agreement include (1) a 3.5% cap on multi-family and commercial rates for the next two years, (2) the payment of a $125,000 transfer fee to reimburse the City for its costs incurred in reviewing the assignment, and (3) a potential change from a unilateral extension of the agreement to a mutual extension if the inflation portion of all rates for the next two years does not exceed 5% per year.
Agenda Item #C1
October 22, 2025
FISCAL IMPACT
The Amendment approving the assignment includes a transfer fee in the amount of $125,000 to reimburse City for its estimated cost associated with reviewing the requested assignment. If the proposed sale from WRI to WM is not consummated for any reason, this amendment will cease to have effect and the Agreement will remain in place between WRI and the City, in accordance with its terms.
SUGGESTED ACTION
Approve Recommendation.
ATTACHMENT(S)
A. Resolution No. 031- 2025
B. Amendment No. 3 to Exclusive Solid Waste Services Franchise Agreement C. Franchise Agreement, as amended by Amendment No. 1 and Amendment No. 2