City Council Agenda Report
January 20, 2026
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Gabriela Garcia, Senior Management Analyst
SUBJECT: APPROVAL OF SOLID WASTE FRANCHISE AGREEMENT AMENDMENT NO. 3
Background:
On May 8, 2018, City Council approved a solid waste franchise agreement with Athens Services (“Athens”) to provide solid waste collection, recycling, and disposal services to the community.
Since approval of the Agreement, several significant operational, regulatory, and market changes occurred that impacted service delivery and implementation. These changes included pandemic impacts, disposal capacity constraints, recycling market disruption, rising labor costs, and increased service demand. As a result of these conditions, on October 20, 2020, City Council approved Amendment No. 1 to address immediate service and cost impacts.
Subsequently, on September 21, 2021 Amendment No. 2 was approved to incorporate State- mandated Senat Bill 1383 organic waste and edible food recovery requirements and to update operational, reporting, and rate adjustment provisions.
In response to evolving State regulations, the City updated Chapter 8.5 of the Norwalk Municipal Code on September 2, 2025, to require commercial accounts to implement a three-stream collection system. While organics are already collected separately, the updated code now requires recyclables to be separated at the source alongside solid waste, improving material quality, reducing contamination, and supporting long-term compliance with State regulations.
The proposed Amendment No. 3 amends the existing solid waste franchise agreement to incorporate the additional services and rates necessary to implement the updated Municipal Code requirements and meet ongoing regulatory compliance.
City Council January 20, 2026
Franchise Agreement Amendment No. 3 Page No. 2
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Key Terms of the Solid Waste Franchise Agreement Amendment No. 3 Service Delivery Modifications
Amendment No. 3 implements operational changes effective January 1, 2026, beginning with a transition of commercial and multifamily customers from a two-stream to a mandatory three- stream collection system featuring separate containers for solid waste, recyclables, and organic waste. Community service offerings are restructured through reduction of Mr. Sun neighborhood clean-up events from 12 to 8 annually, addition of one citywide bulky item drop-off event, and introduction of parade route collection service for one City-selected parade per year. Saturday customer service availability is revised to 7:00 a.m. to 12 p.m. to align with current operational practices. The Contractor will discontinue the sharps collection program (delegating to State program), backyard compost program, quarterly "One Person's Trash" newsletter, and cart removal provisions for habitual contaminators.
State Regulatory Compliance and Environmental Standards Amendment No. 3 substantially strengthens SB 1383 implementation through comprehensive contamination monitoring protocols featuring graduated enforcement escalation from first- occurrence notifications through potential service modifications and fees; enhanced container labeling and standardized color-coding (black/gray for trash, blue for recyclables, green for organics); expanded education and outreach obligations with City approval requirements; Contractor-provided procurement of recovered organic waste products including compost, mulch, or California-derived renewable natural gas to meet State per capita procurement mandates; updated recordkeeping and reporting standards with annual tonnage reporting by route and facility; and clarified indemnification provisions establishing Contractor responsibility for diversion compliance while limiting liability for customer non-compliance with proper code enforcement referrals.
Financial Structure and Administrative Framework
The agreement introduces new commercial rate bundling combining trash, recycling, and organics services at consolidated pricing, adds ancillary rates including split bin options for space-constrained facilities, and implements a 4% extraordinary residential rate adjustment for 2026-2028 beyond standard increases, offset by a 50% commercial recycling discount through year-end 2027. Contractor establishes a new Annual Sustainability Payment obligation of $125,000 in 2026 escalating to $250,000 annually thereafter; delinquent accounts are now collectible through property tax roll placement for accounts 60+ days past due with 90-day service discontinuation provisions and 10 business days' notice requirements; the faithful performance bond is reduced from $1.5 million to $500,000; Contractor receives sole discretion to determine waste processing facilities subject to annual reporting; default cure periods extend to at least 30 days or reasonable additional time for complex breaches; and enhanced rate invalidation procedures permit Contractor cost offsets from franchise fees or termination with 90 days' notice if Proposition 218 protests block approved increases, while the 15% franchise fee on total revenues paid quarterly remains unchanged.
City Council January 20, 2026
Franchise Agreement Amendment No. 3 Page No. 3
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Fiscal Impact:
Unless previously mentioned above, all other terms of the current agreement remain the same.
The Franchise Agreement will continue to require Athens to pay the City a 15% franchise fee on the total revenues received. Franchise fee payments will be made quarterly.
The City will now receive a sustainability payment from contractor of $250,000 annually, after the initial payment of $125,000 in 2026.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
N/A
Recommended Action:
Staff recommends City Council approve Amendment No. 3 to the Solid Waste Franchise Agreement with Athens Services and authorize the Mayor and City Manager to execute the amendment on behalf of the City, in a form approved by the City Attorney.
Attachments:
Solid Waste Franchise Agreement Amendment No. 3