CITY OF MENIFEE
SUBJECT: Agreement with Waste Management for the Procurement of Recovered Organic Waste for Senate Bill 1383 Compliance MEETING DATE: April 2, 2025
TO: Mayor and City Council
PREPARED BY: Kori Jones, Senior Management Analyst
REVIEWED BY: Rebekah Kramer, Deputy City Manager
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Approve and authorize the City Manager to execute a Procurement Agreement with USA Waste of California, Inc (Waste Management) for California Senate Bill 1383 required procurement of recovered organic waste products for a total not-to-exceed amount of $122,900 through December 1, 2029; and
2. Authorize exemption from bidding based upon nature of the supplies or equipment, formal bidding is not likely to result in the lowest price pursuant to Menifee Municipal Code Section
3.12.070.
DISCUSSION
California Senate Bill 1383 (SB 1383), enacted in 2016, is a statewide initiative designed to combat climate change by reducing methane emissions from organic waste decomposition in landfills. Methane is a potent greenhouse gas, more than 25 times as effective as carbon dioxide at trapping heat in the atmosphere. To address this, SB 1383 mandates a 75% reduction in organic waste disposal by 2025 (compared to 2014 levels) and requires that 20% of edible food currently discarded be recovered and redistributed to those in need.
To meet these goals, all California jurisdictions must establish and enforce organic waste collection programs for residents and businesses. This ensures that food scraps, yard trimmings, and paper products are diverted from landfills and processed into compost, mulch, or renewable energy sources. Additionally, jurisdictions must meet annual procurement targets by purchasing recovered organic waste products, thereby fostering a sustainable market for recycled materials.
These targets, determined by CalRecycle and updated every five years, are based on per capita calculations. For Menifee, the procurement target is 5,183 tons for 2024 and 7,975 tons for 2025, with new targets anticipated in 2026.
City of Menifee Staff Report
Agreement with Waste Management for Procurement
April 2, 2025
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In September 2024, California enacted Assembly Bills 2346 and 2902, expanding the ways jurisdictions can meet their procurement targets. These laws allow edible food recovery programs, commercial landscaping projects, and other alternative initiatives to count toward compliance, giving cities more flexibility in meeting their obligations. With additional guidance from CalRecycle expected later this year, Menifee staff will continue exploring opportunities to minimize procurement costs while fulfilling state requirements.
Recognizing the importance of community participation in SB 1383 implementation, the City has made public outreach and education a top priority. Through the MenifeeRecycles public education campaign, the City has engaged residents and businesses with community workshops, school outreach programs, and business compliance guides. Bilingual informational materials, social media engagement, and direct mail campaigns have helped spread awareness about proper organic waste disposal and food recovery initiatives. These efforts have been supported by CalRecycle Local Assistance Grant funding, with $141,516 awarded in 2022 and an additional $292,997 secured in 2024. By educating the community and promoting sustainable waste management practices, the City is ensuring a smooth transition to full SB 1383 compliance.
To fully comply with SB 1383, the City must not only educate the public but also enter into a procurement agreement to meet its state-mandated organic waste procurement targets. As the City’s current service provider for solid waste and recycling services under the franchise agreement, Waste Management (WM) is well positioned to facilitate this procurement process efficiently. By leveraging its existing operational capacity and industry expertise, WM can integrate the procurement of recovered organic waste materials into the City’s overall waste management strategy. Staff recommends that the City Council approve and authorize execution of this agreement to ensure compliance while taking advantage of cost-effective procurement strategies and recent legislative flexibility.
WM was selected due to its existing infrastructure, industry experience, and ability to provide procurement services at below-market rates. As the City’s current franchise hauler, WM has the operational capacity to efficiently manage the procurement of recovered organic waste products without requiring additional logistical changes. Staff conducted a market review and determined that alternative vendors were unlikely to provide significant cost savings. Due to the specialized nature of SB 1383 procurement, a limited number of vendors provide these services in California.
Given these factors, a formal bidding process was unlikely to yield a better cost-effective solution.
Staff requests a bidding exemption in accordance with Menifee Municipal Code Section 3.12.070, as formal bidding is not likely to result in a lower price.
This agreement provides a structured and cost-effective approach to meeting the City's procurement obligations. Under the proposed agreement, WM would procure organic waste products on behalf of the City under the following terms:
•Annual Review: The City and WM would meet and confer each year by June 30 to determine the amount of material that could be procured at no cost to the City. •Additional Procurement: If the City is unable to meet its procurement target through other methods, WM would procure the remaining balance at a set rate, adjusted annually based on the Consumer Price Index (CPI-U) for Garbage and Trash Collection.
City of Menifee Staff Report
Agreement with Waste Management for Procurement
April 2, 2025
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7 0
•2024 Procurement Commitment: WM has certified procurement of 5,183.67 tons of compost/mulch on behalf of the City to meet the 2024 target. Of this, 50% was procured at no cost, while the remaining tonnage was procured at the negotiated rate of $9.45 per ton.
•2025 Procurement Rate: $12 per ton, subject to CPI adjustments and extraordinary industry conditions as outlined in the agreement. If the City does not formally deny an extraordinary rate adjustment within the 15-day review period, the adjustment would be considered accepted by default, unless otherwise negotiated. •Extraordinary Rate Adjustments: Any proposed rate adjustments outside of CPI increases must be accompanied by detailed cost justifications from WM, allowing City staff sufficient time to evaluate and respond.
Staff would continue monitoring procurement targets beyond 2026 and would explore additional funding opportunities, including state grants, to offset potential cost increases. In the event that procurement targets are not met, staff would work with CalRecycle to explore alternative compliance strategies and seek grant funding to minimize potential penalties.
The proposed agreement provides a structured approach to meeting procurement mandates while maximizing cost savings through a competitive per-ton rate and leveraging grant funding.
Table 1 below outlines anticipated costs based on procurement needs, availability of no-cost procurement options, and projected per-ton rates.
TABLE 1 – ESTIMATES FOR PROCUREMENT OF RECOVERED ORGANIC MATERIAL Year Procurement
Target (tons)
Est.
Need
Procured
at no cost
Procured
at cost
Est. Cost per
Ton (Adjusted
for CPI)
Estimated
Cost
2024 5,183 5,183 2,592 2,592 $9.45 $ 24,500
2025 7,975 6,500 2,500 4,000 $12.00 $ 48,000
2026 10,150 5,100 1,500 3,600 $14.00 $ 50,400
Total 26,100 10,192 $ 122,900
The actual annual expenditure is based on a variety of factors including industry conditions, amount of procurement tonnage required to satisfy state-mandated procurement target, and the cities’ ability to offset this procurement amount through alternate means. To address these potential fluctuations, staff has requested to encumber the total amount of grant funding available to support this effort in Fiscal Year (FY) 2024/2025, year 1 of the agreement. Unused grant funds would be carried over to the following fiscal year. Staff would bring back for Council consideration, any new funding requests and/or future modifications to this agreement.
STRATEGIC PLAN OBJECTIVE
Community Engagement and Social Infrastructure
City of Menifee Staff Report
Agreement with Waste Management for Procurement
April 2, 2025
2 5
7 0
FISCAL IMPACT
Funding is available in the Grant Fund, CalRecycle Local Assistance grant account (2301-17033- 41002). The City has been awarded a total of $292,997 in CalRecycle grant funds, with $124,000 earmarked specifically for Procurement and remaining funds designated for other SB 1383 related programs. To address potential purchase fluctuations, staff has requested to encumber the total amount of grant funding available to support this effort in FY 2024/2025, year 1 of the agreement.
Unused grant funds would be carried over to the following fiscal year, as the eligible grant performance period is through June 30, 2026. The total approved not-to-exceed amount for this 5-year contract is $122,900.
ATTACHMENTS
1. Agreement