DATE:
June 21, 2022
TO:
Mayor and Council Members
FROM:
Nils Bentsen, City Manager
BY:
Rachel Molina, Assistant City Manager
Jamie Carone, Management Analyst
SUBJECT:
Amendment No. 8 to Waste Disposal Agreement
RECOMMENDED ACTION
It is recommended that the City Council approve Amendment No. 8 to the Waste Disposal Agreement (WDA) between the City of Hesperia and the County of San Bernardino.
BACKGROUND
In 1989, the State of California passed Assembly Bill 939 (AB 939) requiring all local jurisdictions to reduce landfill waste by 25% in 1995 and 50% by 2000 or be subject to fines of up to $10,000 a day for each day of non-compliance.
The County of San Bernardino owns, manages, and operates the sanitary landfill system for the disposal of local jurisdiction solid waste, which is not composed, reused, recycled, transformed, or otherwise diverted from landfill disposal. Recognizing that all California counties and cities are subject to the same waste diversion mandates, the County of San Bernardino Solid Waste Management Division (SWMD) and the City of Hesperia entered into a Solid Waste Disposal Agreement (WDA) in November 1998, in order to serve the public health, safety, and welfare of the City with greater disposal rate stability, environmental protection, and more predictable and reliable long-term disposal service. Originally, a total of 16 cities in San Bernardino County became signatories to identical agreements. By doing so, the WDA contract requires the City to deliver all solid waste to the County disposal system for fifteen (15) years in return for receiving the lowest disposal rate, or tipping fee, in use at the landfill(s), subject to potential adjustments as necessary.
Since 1998, several amendments to the WDA have been approved to include implementing the “Article 19 Solid Waste” component of the County’s waste management system and define the City’s share of that revenue. Amendment No. 2 was to increase the annual maximum limits of “Article 19 Solid Waste” in the County landfill system. Amendment No. 3 allowed the County to charge the fee of $10.00 per ton (prorated) for identified controllable waste of the City (e.g., toll off container trucks and other County/City vehicles such as pickups and dump trucks) and have such waste subject to being processed in the recycling program. Amendment No. 4 allowed the County to calculate the annual cost of living adjustment earlier in the calendar year. Amendment No. 5 extended the end date of the WDA to June 30, 2016. Amendment No. 6 extended the term of the WDA to June 30, 2021, applied an annual fixed WDA renewal discount adjustment of $0.82 per ton for the term of the WDA, and allowed the County to enter into agreements to accept in-County waste from non-WDA users of the Disposal System at a rate lower than the WDA Contract Rate in exchange for net revenue generated from those agreements. Amendment No. 7 reset the WDA Contract Rate and extended the term for five (5) years to June 30, 2026.
ISSUES/ANALYSIS
For the last several months, representatives from the WDA cities and the County of San Bernardino (County) have met to discuss the various amendments to the WDA proposed by the County. Based on these discussions, the proposed Amendment No. 8 provides the following changes to the WDA to include the following:
In connection with the ongoing administration of the WDA, the parties have determined it is now in their best interest to cap the WDA Contract Rate in order to maintain a 15% buffer between the WDA Contract Rate and the County’s posted gate rate; The subject amendment will cap the calculation of escalation at 85% of the County approved general public gate rate (currently $59.94 minus the current CDSDP recycling fee of $12.00), as such fees may be amended; Currently the rate for next FY 2022-23 will be $43.41; however, if Amendment No. 8 is approved by all of the WDA cities and the County, the rate will be reduced to $40.75 (the capped rate); In exchange for capping the WDA Contract Rate, the City agrees to commit to remaining a WDA City, with no provision to terminate without cause, for the remainder of the WDA term which is June 30, 2026.
The County has requested that the 15 current WDA cities/towns present the WDA Amendment No. 8 to each representative Council for review and approval prior to the County’s Board meeting on June 28, 2022.
FISCAL IMPACT
Amendment No. 8 to the WDA will cap the WDA Contract Rate in order to maintain a 15% buffer between the WDA Contract Rate and the County’s posted gate rate, capping the rate at 85% of the total public gate rate, thus making the WDA Contract Rate $40.75 per ton instead of the current proposed FY 2022-23 proposed rate of $43.41 per ton.
The estimated amount of the City’s tonnage last fiscal year was 69,000 tons. Based on this calculation, the total charged for the disposal of the City’s controlled waste with the proposed rate of $43.41 totals $2,995,290. With the rate of $40.75 proposed through Amendment No. 8, the total for the disposal of waste totals $2,811,750 for a difference of $183,540.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Amendment No.8 to WDA
FY 2022-23 Waste Disposal Agreement
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Councilmembers
Amendment No. 8 to Waste Disposal Agreement
June 21, 2022