Pismo Beach City Council
May 3, 2022

1.3 Obtain from City staff relevant project information including, but not limited to: past parking studies, current plans (e.g., Circulation Plan, Local Coastal Plan, etc.), projected changes in the public parking supply, transaction data, any other relevant parking system data.

1.4 Walker will review these Plan documents in order to collect data and make recommendations consistent with the Plans.

2. CURRENT CONDITIONS

2.1 Conduct an inventory of the number and location of publicly accessible private (with five or more) parking spaces in the study area.

2.2 Conduct an inventory of the number of parklets that are occupying on-street spaces in the study area.

Discuss with City staff plans and possible changes in the number, size and location of parklets.

2.3 Receive from the City information regarding parking facilities within the study area that have been available to the public but may be removed from the public parking system. Similarly, City staff will inform Walker regarding private parking spaces or sites that are anticipated to be eliminated or public access.

2.3 Given the timing of this project, Walker will conduct parking occupancy counts on one weekday and one weekend day between the hours of 10 a.m. and 6 p.m., during what is anticipated to be the off-peak season. To determine a reasonable estimate of the most current peak season conditions, Walker will utilize available historic parking occupancy data and the most recent revenue data from the City to project demand during the high season for the purposes of the Parking Management Plan.

2.4 Summarize findings in a brief narrative, tabular, and map format and draft into a technical memorandum.

3. RECOMMENDATIONS TO IMPROVE CURRENT PARKING MANAGEMENT PRACTICES AND SYSTEMS

3.1 Taking into account the data collected during the parking inventories, information provided by the City, and Walker’s experience with best practices, Walker will evaluate current parking management strategies and systems for the purpose of making recommendations for improvement that align with the goals outlined in the draft Parking Management Plan.

3.1 Walker will review the City’s current parking policies and provide recommendations that are consistent with the City’s Circulation Element, Local Coastal Plan, and other relevant plans.

3.2 Walker will review and make recommendations regarding the City’s draft Parklet Program drawing on experience from working with other cities and best practices. Walker will take into account the quantitative and qualitative effects of the City’s parklet program on the provision of parking within its recommendations. A detailed analysis or quantification of the parklet program and its effects is not envisioned as part of this effort.

3.4 Summarize findings in a narrative, tabular, and map format and draft into the updated Parking Management Plan document.

3.5 We anticipate receiving one set of consolidated written comments from City staff, to incorporate into one final Parking Management Plan Update document.

Attachment 1.A

9.H-7Council Agenda 5-3-2022

Megan Martin
December 23, 2021

4. MEETINGS
As part of this proposal, Walker is available to participate in the following meetings:
x With City staff, by phone or video conference with City staff over the term of the engagement; x Attendance at up to two public meetings, via video conference; x One, in person, public meeting, if necessary.

SCHEDULE
Walker anticipates providing a final updated draft Parking Management Plan within twelve (12) weeks of receipt of a signed agreement and retainer. Barring material requests for items outside of the outlined Scope, we anticipate incorporation of comments into a final document within two to three weeks of receipt of comments from City staff.

PROFESSIONAL FEE
We propose to perform the above-described Scope of Services/Work Plan for a lump sum fee of twenty-four thousand nine hundred fifty dollars ($24,950) inclusive of typical expenses. Our fee assumes a total of no more than 160 hours expended on the engagement.

Our goal is your complete satisfaction. If any part of this proposal does not suit your needs, please let us know and we will make every effort to provide a proposal that meets your needs. Thank you very much for considering our proposal.

Sincerely,

WALKER CONSULTANTS
Steffen Turoff Daniel Garcia
Principal Consultant
Enclosures General Conditions of Agreement for Consulting Services

AUTHORIZATION
Attachment 1.A

9.H-8Council Agenda 5-3-2022

Megan Martin
December 23, 2021

Trusting that this meets with your approval, we ask that you sign in the space below to acknowledge your acceptance of the terms contained herein, and to confirm your authorization for us to proceed. Please return one signed original of this agreement for our records.

CITY OF PISMO BEACH
Accepted by (Signature)
Printed Name
Title
Date
Attachment 1.A

9.H-9Council Agenda 5-3-2022

GENERAL CONDITIONS OF AGREEMENT

FOR CONSULTING SERVICES
PAGE 5

SERVICES
Walker Consultants (“Walker”) will provide the CLIENT professional services that are limited to the work described in the attached letter (“the services”). Any additional services requested will be provided at our standard hourly rates or for a mutually agreed lump sum fee. The services are provided solely in accordance with written information and documents supplied by the CLIENT, and are limited to and furnished solely for the specific use disclosed to us in writing by the CLIENT. No third-party beneficiary is contemplated. All documents prepared or provided by WALKER are its instruments of service, and any use for modifications or extensions of this work, for new projects, or for completion of this project by others without Walker’s specific written consent will be at CLIENT’s sole risk.

PAYMENT FOR SERVICES
Walker will submit monthly invoices based on work completed. If for any reason the CLIENT does not deliver payment to WALKER within thirty (30) days of date of invoice, Walker may, at its option, suspend or withhold services. The CLIENT agrees to pay Walker a monthly late charge of one and one-half percent (1.5%) per month of any unpaid balance of the invoice.

STANDARD OF CARE
Walker will perform the services in accordance with generally accepted standards of the profession using applicable building codes in effect at time of execution of this Agreement. Walker’s liability caused by its acts, errors or omissions shall be limited to the fee or $10,000, whichever is greater.

Any estimates or projections provided by Walker will be premised in part upon assumptions provided by the CLIENT. Walker will not independently investigate the accuracy of the assumptions. Because of the inherent uncertainty and probable variation of the assumptions, actual results will vary from estimated or projected results and such variations may be material. As such, Walker makes no warranty or representation, express or implied, as to the accuracy of the estimates or projections.

NON-SOLICITATION CLAUSE
CLIENT agrees that it will not directly or indirectly solicit for employment any Walker employee providing services on behalf of CLIENT for a period of two years after the date of this agreement. CLIENT agrees that a breach of this provision would have material and adverse impacts on Walker’s business and CLIENT therefore agrees to pay Walker an amount equal to two times the annual salary of any employee of Walker who accepts a position with CLIENT within such two year period, in addition to all other rights and remedies available to Walker.

PERIOD OF SERVICE
Services shall be complete the earlier of (1) the date when final documents are accepted by the CLIENT or (2) thirty (30) days after final documents are delivered to the CLIENT.

Attachment 1.A

9.H-10Council Agenda 5-3-2022

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Vendor Agreement (Rev. 2/2/2018)

CITY OF PISMO BEACH

VENDOR AGREEMENT FOR PROFESSIONAL SERVICES
This Vendor Agreement for Professional Services (“AGREEMENT”) is made and entered into as of the date the AGREEMENT is fully executed by all parties (the “Effective Date”), by and between the City of Pismo Beach, a municipal corporation (“CITY”), and :DONHU&RQVXOWDQWV,QF (“VENDOR”).

In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:

RECITALS:

CITY wishes to retain the services of an experienced and qualified VENDOR to provide the following services:
,QKRXVHSODQQLQJVHUYLFHVWRFRPSOHWHDQXSGDWHWRWKH3DUNLQJ0DQDJHPHQW3ODQ VENDOR represents and warrants that it is qualified to perform those services.

AGREEMENT:

I.SERVICES TO BE PERFORMED BY VENDOR
VENDOR will provide the services listed in the Scope of Services attached hereto as Exhibit A.

VENDOR warrants that all work and services set forth in the Scope of Services will be performed in a competent, professional and satisfactory manner. Extra work beyond that described in the Scope of Services is not authorized without the express written approval of CITY. VENDOR shall request and receive written approval prior to performing any extra work. Any work beyond that reflected in the approved Scope of Services shall not be compensated by CITY unless prior written approval was provided under this paragraph. CITY’s City Manager may approve additional work not to exceed thirty thousand dollars ($30,000.00). Any additional work in excess of this amount shall be approved by the City Council. To the extent that Exhibit A is a proposal from VENDOR, such proposal is incorporated only for the description of the Scope of Services and no other terms and conditions from any such proposal shall apply to this AGREEMENT unless specifically agreed to by CITY in writing.

II.TERM
Unless earlier terminated in accordance with Section IV below, or unless the Scope of Services are substantially completed, the AGREEMENT will continue in full force and effect from the Effective Date through 'HFHPEHU  . Upon mutual written agreement, the term of this AGREEMENT can be extended annually under the same terms for an additional one (1) year period, or longer as the parties agree in writing.

III.COMPENSATION
A. VENDOR’s Fee
For services rendered pursuant to this AGREEMENT, VENDOR will be paid in accordance with the Compensation Schedule attached hereto as Exhibit B. However, in no event will the total amount of money paid VENDOR, for services initially contemplated by this AGREEMENT and associated expenses, exceed the sum of  dollars($,000.00), unless otherwise first approved in writing by CITY. Should this AGREEMENTbe extended pursuant to Section II, VENDOR’s fee may be adjusted upon the writtenagreement of the parties, in the form of an amendment to this AGREEMENT.
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B. Schedule of Payment
VENDOR will submit invoices monthly for actual services performed and associated expenses.

Invoices shall be submitted on or about the first business day of each month, or as soon thereafter as practical, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non-disputed fees. If CITY disputes any of VENDOR’s fees it shall give written notice to VENDOR within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. Any final payment under this AGREEMENT shall be made within forty-five (45) days of receipt of an invoice therefor.

IV. TERMINATION OF AGREEMENT
A.CITY may at any time, for any reason, with or without cause, suspend or terminate this AGREEMENT, or any portion hereof, by serving upon VENDOR at least ten (10) days' prior written notice. Upon receipt of said notice, VENDOR shall immediately cease all work under this AGREEMENT, unless the notice provides otherwise. If CITY suspends or terminates a portion of this AGREEMENT, such suspension or termination shall not make void or invalidate the remainder of this AGREEMENT.

B. In the event this AGREEMENT is terminated pursuant to this Section, CITY shall pay to VENDOR the actual value of the work performed up to the time of termination, provided that the work performed is of value to CITY. Upon termination of the AGREEMENT pursuant to this Section, VENDOR will submit an invoice to CITY pursuant to Section III.

V. FORCE MAJEURE
If any party fails to perform its obligations because of strikes, lockouts, labor disputes, embargoes, "acts of God," inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental control, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, or other causes beyond the reasonable control of the party obligated to perform, then that party’s performance shall be excused for a period equal to the period of such cause for failure to perform.

VI. RETENTION OF FUNDS
VENDOR authorizes CITY to deduct from any amount payable to VENDOR (whether or not arising out of this AGREEMENT) any amounts the payment of which may be in dispute or that are necessary to compensate CITY for any losses, costs, liabilities, or damages suffered by CITY, and all amounts for which CITY may be liable to third parties, by reason of VENDOR’s acts or omissions in performing or failing to perform VENDOR’s obligations under this AGREEMENT. In the event that any claim is made by a third party, the amount or validity of which is disputed by VENDOR, or any indebtedness exists that appears to be the basis for a claim of lien, CITY may withhold from any payment due, without liability for interest because of the withholding, an amount sufficient to cover the claim. The failure of CITY to exercise the right to deduct or to withhold will not, however, affect the obligations of VENDOR to insure, indemnify, and protect CITY as elsewhere provided in this AGREEMENT.

VII. CITY REPRESENTATIVE
The Title of City staff member is designated as the “City Representative,” authorized to act in its behalf with respect to the work and services specified in this AGREEMENT and to make all decisions in connection with this AGREEMENT. Whenever approval, directions, or other actions are required by Attachment 2

9.H-11Council Agenda 5-3-2022

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CITY under this AGREEMENT, those actions will be taken by CITY Representative, unless otherwise stated. CITY’s City Manager has the right to designate another CITY Representative at any time, by providing notice to VENDOR.

VIII. VENDOR REPRESENTATIVE(S)
The person(s) employed by VENDOR whose name(s) are set forth immediately following the signatures of the parties executing this AGREEMENT are designated as being the representative(s) of VENDOR authorized to act on its behalf with respect to the work specified in this AGREEMENT and make all decisions in connection with this AGREEMENT.

IX. INDEPENDENT CONTRACTOR
VENDOR is, and at all times will remain as to CITY, a wholly independent contractor. Neither CITY nor any of its elected officials, officers, employees or agents will have control over the conduct of VENDOR or any of VENDOR’s employees, except as otherwise set forth in this AGREEMENT and then only as to the results to be accomplished and not the method by which VENDOR provides the Scope of Services. VENDOR may not, at any time or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of CITY.

X. BUSINESS LICENSE
VENDOR must obtain a CITY business license prior to the start of work under this AGREEMENT, unless VENDOR is qualified for an exemption.

XI.OTHER LICENSES AND PERMITS
VENDOR warrants that it has all professional, contracting and other permits and licenses required to undertake the work contemplated by this AGREEMENT.

XII. VENDOR’S ACCOUNTING RECORDS; OTHER PROJECT RECORDS A. VENDOR shall maintain complete and accurate records with respect to sales, costs, expenses, receipts, and other such information required by CITY that relate to the performance of services under this AGREEMENT. VENDOR shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services.

B.All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. VENDOR shall provide free access to the representatives of CITY or its designees at reasonable times to such books and records; shall give CITY the right to examine and audit said books and records; shall permit CITY to make transcripts or copies therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this AGREEMENT. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. Upon completion of, or in the event of termination or suspension of this AGREEMENT, all original documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this AGREEMENT shall become the sole property of CITY and may be used, reused, or otherwise disposed of by CITY without the permission of VENDOR. With respect to computer files, VENDOR shall make available to CITY, at VENDOR's office and upon reasonable written request by CITY, the necessary computer software and hardware for purposes of accessing, compiling, transferring, copying and/or 4 of 12
Vendor Agreement (Rev. 2/2/2018)
printing computer files. VENDOR hereby grants to CITY all right, title, and interest, including any copyright, in and to the documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared by VENDOR in the course of providing the services under this AGREEMENT.

C.All plans, studies, sketches, drawings, reports, and specifications as herein required are the property of CITY, whether the work for which they are made be executed or not. In the event this AGREEMENT is terminated, and at the end of the term of this AGREEMENT, all such plans, studies, sketches, drawings, electronic documentation, reports, and specifications shall be delivered immediately to CITY. VENDOR may retain one copy of each document for VENDOR’S records, but shall have no proprietary rights to them. CITY agrees to indemnify VENDOR against any damages caused by the unauthorized re-use of said documents.

XIII. INDEMNIFICATION
A.Non-design, non-construction Professional Services:

To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), VENDOR shall indemnify, defend, and hold harmless CITY, and its elected officials, officers, employees, volunteers, and agents (“CITY Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of VENDOR’s performance or VENDOR’s failure to perform its obligations under this AGREEMENT or out of the operations conducted by VENDOR, including CITY’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of CITY. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.

B.Non-design, construction Professional Services:

To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), VENDOR shall indemnify, defend, and hold harmless the CITY, and its elected officials, officers, employees, volunteers, and agents (“CITY Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of VENDOR’s performance or VENDOR’s failure to perform its obligations under this AGREEMENT or out of the operations conducted by VENDOR, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of CITY. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.

C.Design Professional Services:

In the event VENDOR is a "design professional," and the Scope of Services require VENDOR to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) VENDOR shall indemnify, defend and hold harmless CITY and its elected officials, officers, Attachment 2

9.H-12Council Agenda 5-3-2022

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employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of VENDOR, except to the extent caused by the sole negligence, active negligence or willful misconduct of CITY. Negligence, recklessness or willful misconduct of any subcontractor employed by VENDOR shall be conclusively deemed to be the negligence, recklessness or willful misconduct of VENDOR unless adequately corrected by VENDOR. In the event CITY Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from VENDOR’s performance of this AGREEMENT, VENDOR shall provide a defense to CITY Indemnitees or at CITY’s option, reimburse CITY Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to VENDOR under this paragraph exceed VENDOR’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, VENDOR shall meet and confer with other parties regarding unpaid defense costs.

D.Payment by CITY is not a condition precedent to enforcement of the indemnities in paragraph A, B, or C. In the event of any dispute between VENDOR and CITY, as to whether liability arises from the active negligence, sole negligence or willful misconduct of CITY or its officers, employees, or agents, VENDOR will be obligated to pay for CITY’s defense until such time as a final judgment has been entered adjudicating CITY as having been actively negligent, solely negligent or as having engaged in willful misconduct. Except as otherwise required by Civil Code Section 2782.8, VENDOR will not be entitled in the absence of such a determination to any reimbursement of defense costs including but not limited to attorney’s fees, expert fees and costs of litigation. The provisions of this Section 13 shall survive completion of VENDOR’s services or the termination of this AGREEMENT.

XIV.NON-LIABILITY OF CITY OFFICERS AND EMPLOYEES
No elected official, officer, employee, or agent of CITY will be personally liable to VENDOR, in the event of any default or breach by CITY or for any amount that may become due to VENDOR.

XV. INSURANCE
A. Without limiting VENDOR’s indemnification of CITY, and prior to commencement of the Scope of Services, VENDOR shall obtain, provide and maintain at its own expense during the term of this AGREEMENT, policies of insurance of the type and amounts described below and in a form that is satisfactory to CITY.

1.General liability insurance. VENDOR shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office (ISO) form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

2. Automobile liability insurance. If VENDOR owns vehicles used in performing the Scope of Services in any manner, VENDOR shall maintain automobile insurance at least as broad as Insurance Services Office (ISO) form CA 00 01 covering bodily injury and property damage for all activities of VENDOR arising out of or in connection with any work to be performed under this AGREEMENT, including coverage for any owned, 6 of 12
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hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.

3. Workers’ compensation insurance. VENDOR shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000), as required by law.

4.VENDOR shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees, and volunteers.

5.Errors and Omissions/Professional Liability. VENDOR shall maintain a policy of professional liability insurance written on a claims-made basis in an amount not less than $1,000,000. VENDOR shall also procure and pay for appropriate tail coverage for a minimum of three years following completion of the Scope of Services to cover any errors or omissions occurring during the Term. In the alternative, VENDOR may elect to obtain equivalent coverage on an occurrence basis. CITY’s Risk Manager or City Attorney may waive the requirement of professional liability insurance if he/she determines that such a policy is not commercially available to VENDOR. If such a policy is commercially available, additional cost to VENDOR in obtaining such a policy shall not be a basis upon which the insurance requirement will be waived.

B.Other provisions or requirements:

1.Proof of insurance. VENDOR shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by CITY’s Risk Manager prior to commencement of performance.

Current certification of insurance shall be kept on file with CITY at all times during the term of this contract. CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements to such policies, at any time.

2. Duration of coverage. VENDOR shall procure and maintain for the duration of the AGREEMENT insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by VENDOR, its agents, representatives, employees, or subconsultants.

3.Primary/noncontributing. Coverage provided by VENDOR shall be primary and any insurance or self-insurance procured or maintained by CITY shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of CITY before CITY’s own insurance or self-insurance shall be called upon to protect it as a named insured.

4. CITY’s rights of enforcement. In the event any policy of insurance required under this AGREEMENT does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by VENDOR or CITY will withhold amounts sufficient to pay premium from VENDOR payments. In the alternative, CITY may terminate this AGREEMENT as provided in paragraph IV.

5. Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an Attachment 2

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assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by CITY’s Risk Manager.

6. Waiver of subrogation. All insurance coverage maintained or procured pursuant to this AGREEMENT shall be endorsed to waive subrogation against CITY, its elected or appointed officials, agents, officers, employees, and volunteers or shall specifically allow VENDOR or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. VENDOR hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

7. Enforcement of contract provisions (non-estoppel). VENDOR acknowledges and agrees that any actual or alleged failure on the part of CITY to inform VENDOR of non- compliance with any requirement imposes no additional obligations on CITY nor does it waive any rights hereunder.

8. Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance.

Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If VENDOR maintains higher limits than the minimums shown above, CITY requires and shall be entitled to coverage for the higher limits maintained by VENDOR. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to CITY.

9. Notice of cancellation. VENDOR agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. In the event VENDOR’s policy of insurance cannot be endorsed to provide this notice of cancellation, VENDOR shall provide CITY notice of such cancellation, in writing, not later than 24 hours following the effective time of such cancellation.

10.Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies. Each such insurance policy shall contain language substantially similar to the following clause:
"The City of Pismo Beach, its elected and appointed officials, officers, employees, and agents are named as additional insureds as respects operations of the named insured performed under contract with the City of Pismo Beach." CITY need not be named as an additional insured on professional liability insurance policies.

11. Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to CITY and approved of in writing by CITY’s Risk Manager or City Attorney.
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12. Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that VENDOR’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions.

13. Pass-through clause. VENDOR agrees to ensure that its sub-consultants, sub- contractors, and any other party providing any work under the Scope of Services under the direction of VENDOR, provide the same minimum insurance coverage and endorsements required of VENDOR. VENDOR agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. VENDOR agrees that upon request, all AGREEMENTS with consultants, subcontractors, and others engaged in performing work under the Scope of Services will be submitted to CITY for review.

14. CITY’s right to revise specifications. CITY reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving VENDOR ninety (90) days' advance written notice of such change. If such change results in substantial additional cost to VENDOR, CITY and VENDOR may renegotiate VENDOR’s compensation.

15.Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by CITY.

16.Timely notice of claims. VENDOR shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from VENDOR’s performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.

17. Additional insurance. VENDOR shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Scope of Services.

XVI. SUBCONTRACTORS
Before VENDOR retains or hires a subcontractor to provide any work, labor, or services relative to this AGREEMENT, VENDOR must:

A.Present the name and identifying information of the subcontractor that will provide any work, labor, or services to CITY;
B. Present to CITY the form of subcontract that will be used with the subcontractor for CITY’s approval, which approval will not be unreasonably withheld. Such subcontract agreement must include an indemnity agreement that is generally in accord with the indemnity obligations contained in paragraph XII of this AGREEMENT and must specifically name CITY as an indemnified party; and
C. Secure from the subcontractor evidence of insurance coverage that meets with this AGREEMENT including naming CITY as an additional insured as required by this AGREEMENT, unless such requirement is waived in writing by CITY's Risk Manager as provided in paragraph XXV below.

Attachment 2

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XVII. CONFLICT OF INTEREST
No officer or employee of CITY may have any financial interest, direct or indirect, in this AGREEMENT, nor may any officer or employee participate in any decision relating to the AGREEMENT that affects the officer or employee’s financial interest or the financial interest of any corporation, partnership, or association in which the officer or employee is directly or indirectly interested, in violation of any law, rule or regulation.

No person may offer, give, or agree to give any officer or employee or former officer or employee, nor may any officer or employee solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment in connection with any decision, approval, disapproval, recommendation, preparation or any part of a program requirement or a purchase request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any way pertaining to any program requirement, contract or subcontract, or to any solicitation or proposal.

XVIII. NOTICE
All notices, requests, demands, or other communications under this AGREEMENT will be in writing.

Notice will be sufficiently given for all purposes as follows:

A. Personal delivery. When personally delivered to the recipient; notice is effective on delivery.

B. First Class mail. When mailed first class to the last address of the recipient known to the party giving notice; notice is effective three mail delivery days after deposit in a United States Postal Service office or mailbox.

C.Certified mail. When mailed certified mail, return receipt requested; notice is effective on receipt, if delivery is confirmed by a return receipt.

D. Overnight delivery. When delivered by an overnight delivery service, charges prepaid or charged to the sender’s account; notice is effective on delivery, if delivery is confirmed by the delivery service.

E. Facsimile transmission. When sent by fax to the last fax number of the recipient known to the party giving notice; notice is effective on receipt. Any notice given by fax will be deemed received on the next business day if it is received after 5:00 p.m. (recipient’s time) or on a non- business day.

Addresses for purpose of giving notice are as set forth immediately following the signatures of the parties executing this AGREEMENT.

F. Any correctly addressed notice that is refused, unclaimed, or undeliverable because of an act or omission of the party to be notified, will be deemed effective as of the first date the notice was refused, unclaimed or deemed undeliverable by the postal authorities, messenger or overnight delivery service.

G.Either party may change its address or fax number by giving the other party notice of the change in any manner permitted by this AGREEMENT. Any change in address or fax number that is not provided to the other party will not void delivery of any notice under this AGREEMENT, and delivery to the last known address or fax number shall be deemed sufficient for notice under this AGREEMENT.
10 of 12
Vendor Agreement (Rev. 2/2/2018)
XIX. PROHIBITION AGAINST ASSIGNMENT AND SUBCONTRACTING
This AGREEMENT and all exhibits are binding on the heirs, successors, and assigns of the parties.

The AGREEMENT may not be assigned or subcontracted by either CITY or VENDOR without the prior written consent of the other.

XX.INTERPRETATION
The terms of this AGREEMENT shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this AGREEMENT or any other rule of construction that might otherwise apply.

XXI. SEVERABILITY
If any part of this AGREEMENT is found to be in conflict with applicable laws, that part will be inoperative, null and void insofar as it is in conflict with any applicable laws, but the remainder of the AGREEMENT will remain in full force and effect.

XXII. TIME OF ESSENCE
Time is of the essence in the performance of this AGREEMENT.

XXIII. GOVERNING LAW; JURISDICTION
This AGREEMENT will be administered and interpreted under the laws of the State of California.

Jurisdiction of and venue for any litigation arising from the AGREEMENT will be in the Superior Court of the San Luis Obispo County, or in the United States District Court for the Central District of California.

XXIV. COMPLIANCE WITH STATUTES AND REGULATIONS
VENDOR will be knowledgeable of and will comply with all applicable federal, state, county and city statutes, rules, regulations, ordinances and orders. VENDOR and its subcontractor(s) shall not discriminate against any person in the performance of this AGREEMENT on the basis of race, religion, national origin, color, age, sex, sexual orientation, AIDS, HIV status, disability, or any other basis protected by state or federal law, and shall comply with applicable federal and state equal employment opportunity laws, ordinances, rules and regulations.

XXV.WAIVER OF BREACH
No delay or omission in the exercise of any right or remedy by a nondefaulting party on any default will impair the right or remedy or be construed as a waiver. A party’s consent or approval of any act by the other party requiring the party’s consent or approval will not be deemed to waive or render unnecessary the other party’s consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing and will not be a waiver of any other default concerning the same or any other provision of this AGREEMENT.

XXVI. ATTORNEY’S FEES
Except as provided for in paragraph XV, in any dispute, litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this AGREEMENT (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this AGREEMENT, the prevailing party Attachment 2

9.H-15Council Agenda 5-3-2022

11 of 12
Vendor Agreement (Rev. 2/2/2018)
will be awarded reasonable attorney’s fees, together with any costs and expenses, to resolve the dispute and to enforce any judgment, including post judgment attorney’s fees costs and expenses and any attorneys’ fees or costs incurred on appeal of any judgment.

XXVII.EXHIBITS
All exhibits identified in this AGREEMENT are incorporated into the AGREEMENT by this reference.

In the event of any conflict between the terms of this AGREEMENT and the terms of an exhibit, the terms of this AGREEMENT shall control. Notwithstanding the foregoing sentence, the provisions of Section XIII of this AGREEMENT shall not be altered, amended, limited or otherwise affected in any manner by any language included in an exhibit to this AGREEMENT, even if such exhibit purports to affect the provisions of Section XIII.

XXVIII. VENDOR’S AUTHORITY TO EXECUTE
The persons executing this AGREEMENT on behalf of the VENDOR warrant that:

A.the VENDOR is duly organized and existing under the appropriate State laws; B.they are duly authorized to execute this AGREEMENT on behalf of the VENDOR; C.by so executing this AGREEMENT, the VENDOR is formally bound to the provisions of this AGREEMENT; and
D. entering into this AGREEMENT does not violate any provision of any other AGREEMENT to which the VENDOR is bound.

XXIX. INTEGRATION; AMENDMENT
This AGREEMENT represents the entire understanding of CITY and VENDOR as to those matters contained in it. No prior oral or written understanding will be of any force or effect with respect to the terms of this AGREEMENT. The AGREEMENT may not be modified or altered except in writing signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed the day and year last written below.

Signatures begin on next page.
12 of 12
Vendor Agreement (Rev. 2/2/2018)
VENDOR:
:DONHU&RQVXOWDQWV,QF
Signed:

Name: ________________________________
Title: _________________________________
Dated: ________________________________
Address for giving notice (See Section XVIII):
______________________________________
______________________________________
Email address for official communications:
______________________________________
Vendor Representative (See Section VIII):

Name/Title: ____________________________
CITY:

City of Pismo Beach, a Municipal Corporation
Signed:

Name: 0DWWKHZ 'RZQLQJ
Title: &RPPXQLW\'HYHORSPHQW'LUHFWRU
Dated: ________________________________
Signed:

Name: James R. Lewis
Title: City Manager
Dated: ________________________________
Address for giving notice (See Section XVIII):
760 Mattie Road, Pismo Beach, CA 93449
ATTEST:

Signed:

Name: Erica Inderlied
Title: City Clerk
APPROVED AS TO FORM:

Signed:

Name: David M. Fleishman
Title: City Attorney
Attachments:

Exhibit A: Scope of Service
Exhibit B: Compensation Schedule
Attachment 2

9.H-16Council Agenda 5-3-2022

PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.I

SUBJECT/TITLE:
2022 FOURTH OF JULY FIREWORKS DISPLAY AUTHORIZATION

RECOMMENDATION:

Adopt a Resolution approving the 2022 Fourth of July fireworks display and appropriating related budget adjustments in Fiscal Year 2023.

BACKGROUND:

The City of Pismo Beach Conference & Visitors Bureau (CVB) is managing the annual Fourth of July Fireworks Display to be launched from the Pier. Pursuant to Pismo Beach Municipal Code Section 8.08.010.AA, the Council must adopt a resolution to allow such public fireworks displays, which are otherwise prohibited.

Various City departments are coordinating to assure that the event is conditioned to provide appropriate safety measures, and staff recommends that the Council adopt a Resolution (Attachment 1) approving the fireworks display. A fireworks approval letter from the City's Fire Department is provided as Attachment 2.

In addition, based on cost increases for the fireworks, catering, and other costs, staff recommends revising the July 4th event budget. In order to help support these additional costs, staff recommends appropriating additional revenues from ticket event sales and vendor fees. After covering most of the additional costs with supporting revenues, staff estimates that the net fiscal impact will be an additional cost of $5,449 for fiscal year (FY) 2023. This amount can be offset by transferring General Fund contingency to support the $5,449 amount, which will be accomplished by adoption of the attached Resolution.

FISCAL IMPACT:

The fiscal impact of approving the attached resolution is a net additional $2,015 of revenues to the General Fund. The proposed July 4th budget includes $18,750 in revenues and $43,150 in expenditures. Based on ticket event sales, donations, and vendor fees, projected revenues could reach $28,090. Due to cost increases in fireworks, catering, and other costs, projected expenditures are estimated at $51,503. As such, staff recommends increasing the revenue budget by $10,400 and increasing the expenditure budget by $8,384 in FY 2023 to support the July 4th event. The following table illustrates the current, proposed, and changes to the July 4th event budget.

9.I-1Council Agenda 5-3-2022

Table 1: Proposed Changes to July 4th Event Budget
Current Budget Proposed Budget Change
Revenues $18,750 $22,055 $3,305
Expenditures $43,150 $51,903 $8,753
Net (Revenues –
Expenditures) $24,400 $29,849 $5,449
Staff recommends that Council appropriate an additional $3,305 in General Fund July 4th event revenues, appropriate $8,753 in additional July 4th event expenditures, and deappropriate $5,449 in the General Fund general contingency account to support the event in FY 2023.

ALTERNATIVES:

1. Do not adopt the resolution; do not approve the permit.

2. Request more information from staff.

ATTACHMENTS:

1. Resolution

2. Fireworks approval letter from Fire Department
Prepared by: Micki Salazar, Tourism Coordinator Meeting Date: May 3, 2022 Submitted by: Gordon Jackson, Tourism and Events Executive Director City Manager Approval:

9.I-2Council Agenda 5-3-2022

RESOLUTION NO. R-2022-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH, CALIFORNIA APPROVING THE 2022 FOURTH OF JULY PIER FIREWORKS

DISPLAY AND APPROPRIATING RELATED BUDGET ADJUSTMENTS
WHEREAS, the City Council has adopted Municipal Code Section 8.08.010.AA providing in part for public fireworks displays if approved by the Council; and WHEREAS, the City Council’s approval is required for the fireworks display associated with the City’s annual Fourth of July event; and
WHEREAS, the services of a professional pyrotechnician have been secured by the City, and the event will be conditioned with safety measures to the satisfaction of Fire, Public Works, and other City departments; and
WHEREAS, based on cost increases for the fireworks, catering, and other costs, staff recommends revising the July 4th event budget; in order to help support these additional costs, staff recommends appropriating additional revenues from ticket event sales and vendor fees.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby authorizes a public fireworks display to be launched from the Pismo Beach Municipal Pier on July 4, 2022; subject to the negotiation of a contract with a professional pyrotechnician which guarantees the ability of City staff to assure the safety of the event, and minimizes the City’s liability associated with the fireworks display to the satisfaction of the City Attorney and/or Risk Manager.

BE IT FURTHER RESOLVED that the City Council of the City of Pismo Beach hereby appropriates additional revenues and expenses in the General Fund Tourism & Events Department CVB Division, including an additional $3,305 July 4th event revenues, $8,753 in additional July 4th event expenditures, and deappropriates $5,449 in the General Fund general contingency account to support the event in FY 2023.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 3rd day of May 2022, by the following vote:

AYES: 0
NOES: 0
ABSENT: 0
ABSTAIN: 0
RECUSED: 0

9.I-3Council Agenda 5-3-2022
Attachment 1

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk

9.I-4Council Agenda 5-3-2022
Attachment 1


Eddy Moore, Unit Chief
April 5, 2022

Zambelli Fireworks
PO Box 986
Shafter, Ca. 93263

RE: 4th of July Fireworks Permit

To Whom It May Concern,

We have approved your permit for the discharge of fireworks on the 4th of July 2022. The Permit has the following conditions for the public display.

1) Cal Fire/Pismo Beach Fire Department will provide an escort from City Limits to the display location. The licensed technician needs to make contact with the Fire Department 24 hours in advance for the arrangement of the escort. The contact number is 805-773-7050 and ask for the Captain on duty.

2) All vehicles driving on Pier will be inspected by Fire Official prior to entry.

3) Only the large truck transporting the fireworks and a pickup will be allowed on the pier.

Please contact the Chamber of Commerce for parking instructions. Please carpool as much as possible. Parking is very limited.

4) All box cakes or fireworks in cardboard boxes need to have a separation plate between the box and the pier decking. This can be clean metal trays (drip trays) or 3/8” plywood with an oversize area 6” larger than the box itself. This is to protect the decking of the pier from fire.

5) Full public access to the pier will be closed at 12:00 p.m. This will allow you to start loading the product in the proper location. Fire Department will also start wash down at 1:00 pm.

6) The Fire Department will make a tube inspection/set up inspection prior to full approval of the show. The Pyrotechnic Operator needs to inform the Fire Department 24 hours in advance when he would like to have the inspection.

Thank you in advance for your cooperation and assistance in ensuring a safe event for everyone.

Please feel free to contact me should you need further information at (805) 779-1025.

Sincerely,

Paul Lee
Battalion Chief

9.I-5Council Agenda 5-3-2022
Attachment 2

PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.J

SUBJECT/TITLE:

ADOPTION OF FINDINGS RELATING TO AB 361 (VIRTUAL MEETINGS)

RECOMMENDATION:

Adopt the following findings with respect to the City of Pismo Beach’s utilization of the provisions of Assembly Bill 361, relating to Brown Act teleconferences:

1. The City Council has reconsidered the circumstances of the state of emergency created by the coronavirus pandemic.

2. The following circumstances exist:
• State or local officials continue to impose or recommend measures to promote social distancing.

BACKGROUND:

Assembly Bill 361 (Rivas, 2021) amends and codifies the relaxed Brown Act provisions that were originally implemented by Executive Orders of the Governor in response to the coronavirus pandemic. Among the provisions of the Brown Act that were relaxed by the Governor’s Orders were provisions for participation in legislative meetings by teleconference (phone, or virtual platform such as Zoom). Prior Brown Act provisions required that, in the event any legislative body member(s) wished to participate in a meeting remotely, the exact address of the remote location(s) be published in advance on the meeting agenda, the remote location(s) be disabled-accessible, and the public be provided the opportunity to observe the meeting and make public comment at the remote location(s).

Governor’s Orders N-29-20 and N-08-21 effectively suspended all of these provisions for health and safety reasons, making it possible for legislative body members to join a meeting virtually without the need for conducting advance noticing or providing direct public access to the location. AB 361, effective October 1, 2021, functionally codifies these provisions through January 2024, allowing agencies to avail themselves of the continued teleconferencing option if desired, provided that the legislative body makes certain findings as outlined below (Government Code Section 54953(e)(3)):

(3) If a state of emergency remains active, or state or local officials have imposed or recommended measures to promote social distancing, in order to continue to teleconference without compliance with paragraph (3) of subdivision (b), the legislative body shall, not later than 30 days after teleconferencing for the first time pursuant to subparagraph (A), (B), or (C) of paragraph (1), and every 30 days thereafter, make the following findings by majority vote:
(A) The legislative body has reconsidered the circumstances of the state of emergency.
(B) Any of the following circumstances exist:
(i) The state of emergency continues to directly impact the ability of the members to meet safely in person.

9.J-19.J-1Council Agenda 5-3-2022

(ii) State or local officials continue to impose or recommend measures to promote social distancing.

The City Council inaugurated its use of AB 361 provisions by holding a totally teleconferenced meeting via Zoom on October 5, 2021, and then adopted the recommended findings at each of its regular meetings since October 19, 2021. Following the state’s removal of the indoor mask mandate for vaccinated individuals on February 16, 2022, the City Council has transitioned to fully hybrid meetings for the foreseeable future, where the legislative body members, staff, and the public may attend the meeting either in person, or virtually.

Procedural Flexibility
The circumstances surrounding the impact of the coronavirus pandemic are continually evolving, and the progression of the pandemic, along with accompanying governmental health and safety directives, are difficult to foresee. While the Council has determined to transition to hybrid City Council meetings with a certain level of in-person participation, staff recommends that the adoption of these findings, as recommended, remain on the Council’s consent agenda for the foreseeable future, until such time that the Council determines that it can no longer make the findings due to a change in circumstance.

Adoption of the recommended findings at each meeting will provide continued flexibility should the Council need or desire to make a change to its meeting practices at any point in the future. Adoption of the findings in no way commits the City to holding virtual or hybrid meeting proceedings, providing full flexibility under uncertain circumstances.

Other Provisions of AB 361
AB 361 also requires that the public be given the opportunity to address the legislative body with their comments in real time, which the City has provided continuously since the start of the pandemic, and will continue to. In addition, the bill requires that meeting proceedings be stopped in the event that the public’s virtual access to a meeting is disrupted, for example due to an internet outage. When holding a hybrid meeting with some or all members participating in person, and some or all of the public participating virtually, staff will monitor the virtual meeting to component to assure that public access is not interrupted, and pause meeting proceedings in the event of a disruption.

Conclusion and Recommendation
In order to provide both legal compliance and practical flexibility during ongoing uncertain circumstances, staff recommends that, by minute order, the City Council make the following findings with respect to the City of Pismo Beach’s utilization of the provisions of Assembly Bill 361, relating to Brown Act teleconferences:

1. The City Council has reconsidered the circumstances of the state of emergency created by the coronavirus pandemic.

2. The following circumstances exist:
• State or local officials continue to impose or recommend measures to promote social distancing.

9.J-29.J-2Council Agenda 5-3-2022

FISCAL IMPACT:

There is no fiscal impact associated with adoption of the recommended findings.

ALTERNATIVES:

1.Do not adopt the findings; provide other direction to staff.

ATTACHMENTS:

None.

Submitted by: Meeting Date: May 3, 2022
Erica Inderlied, City Clerk
City Manager Approval:

9.J-39.J-3Council Agenda 5-3-2022

PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #11.A

SUBJECT/TITLE:

SECOND AMENDMENT TO THE AMENDED AND RESTATED SOLID WASTE

COLLECTION FRANCHISE AGREEMENT WITH SOUTH COUNTY SANITARY SERVICE, INC. FOR SOLID WASTE COLLECTION SERVICES AND ADOPTION OF INTEGRATED SOLID WASTE RATES FOR MAY 1, 2022, JANUARY 1, 2023, AND JANUARY 1, 2024

RECOMMENDATION:

1. Adopt a Resolution approving, and authorizing the City Manager to execute, a second amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc. for solid waste collection services;

2. Conduct a public hearing to hear public comment on proposed solid waste rates;

3. Adopt a Resolution approving Integrated Solid Waste rates charged by South County Sanitary Service for May 1, 2022, January 1, 2023, and January 1, 2024.

BACKGROUND:

The purposes of this agenda item are to discuss and recommend approval to amend the City’s Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc. for solid waste collection services (Attachment 1.A) and to bring forward for a public hearing and Council consideration the attached South County Sanitary Service (SCSS) Solid Waste Rate Review (Rate Review) (Attachment 3).

Similar to other services, such as street sweeping and janitorial services, the City contracts solid waste services with an outside contractor. SCSS is the contractor that provides solid waste management to the City including, trash, recycling, green waste and used motor oil pickup. This agreement has been periodically amended and restated, and further amendment is now warranted to reflect requirements set forth in Senate Bill (SB) 1383.

The Rate Review was conducted to review the rate increases requested by SCSS submitted initially on October 20, 2021. However, due to the complexity, concerns with pending rate increases by the San Luis Obispo County Integrated Waste Management Authority (IWMA), and significant subsequent reviews and information exchanges, a revised application was submitted on February 18, 2022. The February 18, 2022 rate application is included at the end of the Rate Review as the Base Year 2022 Rate Adjustment Application (Attachment 3). This is the process by which SCSS requests an increase in rates for the integrated solid waste collection, diversion, and disposal services it provides to City residents and businesses. The City does not impose these rates, but rather reviews the requested increase to determine compliance with the rate-setting procedures. SCCS charges the customer directly for the service.

11.A-1Council Agenda 5-3-2022

Franchise Agreement Amendment
California’s Short-Lived Climate Pollutant Reduction law, SB 1383, was signed by Governor Brown in 2016 and establishes methane reduction targets for California. The law sets goals to reduce disposal of organic waste in landfills, including edible food. The reported purpose was to reduce greenhouse gas emissions and address food insecurity in California. However, the law has many more aspects to it, which many consider to be an unfunded mandate by the state. The final regulation text published by Cal Recycle is 127 pages. The regulations went into effect and state enforcement began on January 1, 2022. This rate increase is an attempt to recover some of the costs associated with compliance with SB 1383, however other costs, such as increased staff time associated with record-keeping and reporting, will impact the City’s General Fund. Some of the requirements of SB 1383 are:
 Reduce organic material in landfills by 50% by 2020
 Reduce organic material in landfills by 75% by 2025
 Recover 20% of currently-disposed edible food for human consumption by 2025  Garbage trucks be powered by Qualified Renewable Natural Gas  The City to acquire and use 647.4 tons of organic waste (mulch)  The City adopt recycled paper procurement policy
 Establishment of a program to identify prohibited container contaminants  Monthly recording and reporting SB 1383 non-compliance complaints  Monthly recording and reporting paper procurement
 Monthly recording and reporting amount of organic waste acquired and applied

Proposed Rates
The proposed rate increases amount to an increase of approximately 22.19% based on:
 8.05% for truck depreciation
 7.71% for food and green waste recycling via Materials Recovery Facility (MRF) operations to comply with Senate Bill (SB) 1383
 2.41% for health care and liability insurance costs
 1.06% for gas and oil
 2.96% for all other cost increases including labor, ongoing maintenance, disposal costs at the landfill and MFR, and other pass-through costs

The current, proposed, and proposed change for single-family residential rates are shown below. These rates are still among the lowest in the surrounding communities despite having to comply with increased regulations such as SB 1383 and other pass-through costs.

Table 1: Single Family Residential Rates

32-Gallon
Container
64-Gallon
Container
96-Gallon
Container
Current $17.31 $34.63 $51.94
Proposed $21.15 $42.32 $63.47
Change $3.84 $7.69 $11.53

11.A-2Council Agenda 5-3-2022

Three-Year Rate Approval
The rate-setting process follows a three-year cycle, including a base year, or the first year of the cycle, which requires a comprehensive, detailed analysis of revenues, expenses, and operating data. The second and third years are interim year adjustments to address for changes in the consumer price index, changes in pass-through costs such as landfill tipping fees, and any adjustments to cover increased franchise fees. SCSS is requesting three-year rate approval in one action for a straightforward and streamlined process, requesting that the City Council review the base year and propose increasing the two interim years by CPI-U in 2023 and 2024. This simpler approach has been used since 2015 and the consultant concurs with continuing to do so for 2022.

As such, commencing on January 1, 2023 and January 1, 2024, increases, if any, in the Consumer Price Index (CPI) for Bureau of Labor Statistics’ Consumer Price Index for Urban Consumers based on the All U.S. City Average, Bureau of Labor Statistics for the month of June 2022 for January 1, 2023 and June 2023 for January 1, 2024.

Cost of Living "Trigger" Option
Along with establishing the rate review methodology, Section 8.3 of the Franchise Agreement provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase (assuming it was submitted in accordance with the rate-setting methodology).

This provision was subsequently amended in 2016 allowing for an added increase based on landfill rate increases (weighted for their proportion of total costs). It is important to note that other than a waiver for green waste cost increases in 2011, no other adjustments (including other pass-through costs) are allowed under the Franchise Agreements. As detailed in the Rate Review (Attachment 3), the calculated cumulative threshold limit for an increase that would avoid triggering this option is 34.87% since 2008 (in short, the requested rate increase is 26.89% above the trigger).

It is important to note that the "trigger option" does not directly limit rate increase requests by SCSS to an amount that may be less than that allowed under the rate-setting methodology. However, subjecting the Franchise Agreement to possible termination if the rate request is greater than the cost-of-living threshold provides an incentive for SCSS to do so if possible.

Historical Timeline
On December 16, 1997, the City Council approved a Franchise Agreement with SCSS for collection, diversion, and disposal of solid waste.

 On June 3, 2008, the City Council adopted Resolution No. R-2008-037, which approved an Amended and Restated Solid Waste Collection Franchise Agreement ("New Agreement"), which offered several benefits for the City and its residents and businesses. In form, its 41 pages replaced the 125-plus pages of the combined three

11.A-3Council Agenda 5-3-2022

existing Agreements (which averaged about 10 years old), and integrated all the solid waste services provided under those three Agreements.
 The long-term (15-year) New Agreement—coordinated with similar Agreements between South County / Waste Connections, Inc. and our neighboring cities of Grover Beach and Arroyo Grande—was seen as supporting lower financing costs and lower operating costs for SCSS, for both the needed fleet upgrades and the landfill expansion.
 Also under the New Agreement, Residential Accounts in the City got expanded free recycling services: once a month—without charge—the driver will stop, get out and refill the recycle waste wheeler with recycle materials left adjacent to it. This benefit should encourage further shifting of eligible solid waste into recycling, and further reduce costs.
 At the November 16, 2010 City Council meeting, SCSS General Manager Tom Martin outlined recent developments with composting green waste at the Cold Canyon Landfill, including some options that would involve increased operating costs. While no formal action was taken, there was a consensus to accept SCSS’s recommendation of sending curbside collected green waste to Santa Maria for processing, which would result in about a 4% increase in Solid Waste rates.  On June 21, 2011, the City Council approved an increase in Pismo Beach’s Franchise Fees (payable by SCSS to the City), from 6% to 10% (to be the same as Arroyo Grande, Grover Beach, Oceano, San Luis Obispo County, and others).  On July 19, 2011, the City Council approved an interim rate schedule reflecting 5.15% of across-the-board increases to cover cost increases for green waste disposal and other cost increases such as landfill tipping fees. There was an additional 3.9% rate increase as a result of the increase in franchise fee, from 6% to 10%.  On January 15, 2013, the City Council approved SCSS’s 2013 Base Year Rate Adjustment Application requesting a 3.2% rate schedule increase.  On June 17, 2014, the City Council approved SCSS’s 2014 Interim Year Rate Adjustment Application requesting a 2.05% rate schedule increase.  On October 20, 2015, the City Council approved SCSS’s Integrated Solid Waste rates in a three-year approval for January 1, 2016, 2017, and 2018.  On June 21, 2016, the City Council amended the SCSS franchise agreement at the request of SCSS to extend the contract by 20 years, beginning with the first day of operation of a new Kompogas organics processing facility. The second change in the franchise agreement was to exclude tipping fee increases, approved by the County Board of Supervisors in 2014 for landfill improvements, when calculating whether the SCSS rates charged to customers are greater than the cumulative cost of living increase.
 On May 21, 2019, the City Council approved SCSS’s Integrated Solid Waste rates in a three-year approval for June 1, 2019, and January 1, 2020, and January 1, 2021.

11.A-4Council Agenda 5-3-2022

The following table provides a summary of SCSS’s rate changes for the past 15 years.

Table 2: Historical South County Sanitary Services
Single Family Residential Rate Changes

Rate Study
As done with rate applications requests over the past 16-plus years, Pismo Beach has joined with Arroyo Grande, Grover Beach, and Oceano to hire a consultant to perform a Review (Attachment 3) that includes analyses of submitted cost data in accordance with the 1994 "San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates" (Manual) as called for in the Franchise Agreements.

The purpose of the Manual is to determine integrated solid waste management rates which are fair to City residents and provide adequate revenue to the hauler. The Manual ensures that the hauler’s rates are justifiable and supportable, and reasonable to the cost of service; it also ensures that there is ongoing review and rate stability, and that the rate setting process is easy to administer and implement. The City goes through a formal and thorough review of the financial and operating data to protect the rate payer. The process is designed to prevent large, unexpected fluctuations in rates anticipated from funding a broadening scope of integrated waste management services.

Date Increase Comments
7/1/2004 5.30%
6/1/2005 2.95%
5/1/2006 3.60%
2007 0.00%
1/1/2008 2.90%
2009 0.00%
2010 0.00%
9/1/2011 9.05% City increases Franchise Fee from 6% to 10%. Approved rate is additional 3.9% beyond the 5.15% rate request.
2012 0.00%
2/1/2013 3.20%
7/1/2014 2.05%
1/1/2016 3.25% Includes additional 1.1% for Organics program, Franchise Agreement amendment: extending the contract by 20 years, with the new Kompogas organics processing facility and exclude tipping fee increases, approved by the County Board of Supervisors in 2014 for landfill improvements, in calculation of SCSS rates 1/1/2017 1.10%
1/1/2018 1.60%
7/1/2019 10.06% Includes 4.5% increase for recycling via Materials Recovery Facility operations
1/1/2020 1.70%
1/1/2021 0.70%
5/1/2022 22.19% Proposed

11.A-5Council Agenda 5-3-2022

William "Bill" Statler has considerable familiarity with the required rate review methodology over many years, and has performed the review for several prior rate application requests, including the current request. Statler prepared the South County Sanitary Service Solid Waste Rate Review dated March 2022 (Attachment 3).

In the Findings section on pages two and three, the Rate Review states:

 Complete Application: With its revised application, SCSS has fully provided the supporting documentation required for rate requests under the Franchise Agreements in Arroyo Grande, Oceano, Pismo Beach and Grover Beach. The revised application (Attachment 3) has been correctly prepared and requests an across-the-board rate increase of 22.19% for Pismo Beach.

 High Level of Service at a Reasonable Cost: SCSS provides a broad level of high- quality services to these four agencies—including garbage, recycling and green waste collection and disposal as well as hauler-provided "waste wheeler" containers for all three services—at very competitive rates compared with many other communities. In fact, even with the recommended rate increase of 22.19%, rates in these four agencies will be among the lowest of those surveyed. In short, South County communities have the best of both worlds: high quality services at a low cost (compared with other communities). The following table displays the rates for single family residential in the City of Pismo Beach compared to other communities and is the among the lowest rates in the community.

Table 3: Single Family Residential Rate Changes Survey of Communities

11.A-6Council Agenda 5-3-2022

 Need for Updated Rate-Setting Methodology. Several complex issues have surfaced in the 2019 and the 2022 rate review that have not been encountered in the past in using the rate-setting methodology, which is based on the City of San Luis Obispo’s Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (Rate Manual) adopted in 1994. In short, with very minor modifications, this approach has been in place for almost 30 years. Accordingly, given the passage of time and the emergence of issues not envisioned in 1994, it is timely to update this methodology.

 Delayed Rate Implementation. The Rate Manual provides for a delayed rate implementation if there is a delay of more than 120 days after the application is submitted if it is “no fault of the franchise hauler.” Given the initial October 20, 2021 submittal date, this would indicate rate approval by March 1st. However, this rate was delayed pending consideration of rate increases by the IWMA and their potential impact on SCSS rates. These new rates were not adopted by the IWMA until March 9, 2022. Moreover, it was subsequently determined that since these rates are set by the IWMA—and not the franchising agencies—that they did not affect agency rate- setting. As noted above, this resulted in a revised application from SCSS on February 18, 2022. Based on this timeline, the 120 days would be mid-June 2022. Finally, the scope and complexity of the 2022 application has been significantly greater and subsequently taken longer, than envisioned in the Rate Manual. Staff proposes a delayed rate implementation with a May 1, 2022 effective date. SCSS would prefer a March 1, 2022 effective date, which would increase rates by 5.55% (assuming a May 1st implementation date).

In the Rate Recommendation section on page four, the report recommends that the City of Pismo Beach approve rate increases of 22.19%.

Conclusion and Recommendation
Staff recommends that Council adopt a Resolution (Attachment 1) approving, and authorizing the City Manager to execute, a second amendment to the Amended and Restated Solid Waste Collection Franchise Agreement with South County Sanitary Service, Inc. for solid waste collection services.

Staff also recommends that Council conduct a public hearing to hear comments regarding the proposed rates. Based on staff’s review of the Rate Review and Statler’s recommendation, and because the proposed rate increase is in line with the adopted methodology of the Manual, staff further recommends that Council adopt a Resolution (Attachment 2) that approves the proposed rate increases charged by SCSS effective May 1, 2022, January 1, 2023, and January 1, 2024.

11.A-7Council Agenda 5-3-2022

FISCAL IMPACT:

If approved, the proposed rate increases would apply to all residential and business accounts in Pismo Beach. The table below shows some of the increases in monthly costs to SCSS customers in Pismo Beach under the proposed increases for May 1, 2022.

Service
Description
Pickups Per
Week
Current Monthly
Rate Effective
1/1/2021
Proposed Rate
Adjustment
Proposed Monthly
Rate Effective
5/1/2022
Residential:
32 Gallon Waste
Wheeler 1 $17.31 $3.84 $21.15
64 Gallon Waste
Wheeler 1 $34.63 $7.69 $42.32
Business Customers:

One 32 Gallon
Waste Wheeler 1 $23.12 $5.13 $28.25
Three 32 Gallon
Waste Wheelers 2 $95.17 $21.12 $116.29
1 yd dumpster 5 $275.18 $61.07 $336.25
4 yd dumpster 7 $1,100.57 $244.26 $1,344.83
City:

Several garbage cans and
dumpsters $12,179.17 $2,758.03 $15,187.20
The proposed rate increase to the City would be offset by an increase the City’s Franchise Fee revenue by about $29,809 per month.

ALTERNATIVES:

1. Provide alternative direction to staff.

ATTACHMENTS:

1. Resolution adopting SCSS Franchise Agreement

1.A. Exhibit A to Resolution: Franchise Agreement

2. Resolution adopting integrated solid waste rates

2.A. Exhibit A to Resolution: South County Sanitary Service Rate Schedule for Integrated Solid Waste Services in Pismo Beach, effective May 1, 2022, January 1, 2023, and January 1, 2024

3. South County Sanitary Service Solid Waste Rate Review dated March 2022 prepared by William C. Statler and Base Year 2022 Rate Adjustment Application dated February 18, 2022 submitted by SCSS.

Submitted by: Meeting Date: May 3, 2022
Nadia Feeser, Administrative Services Director
Benjamin A. Fine, Public Works Director
City Manager Approval:

11.A-8Council Agenda 5-3-2022

RESOLUTION NO. R-2022-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,

CALIFORNIA APPROVING, AND AUTHORIZING THE CITY MANAGER TO

EXECUTE, A SECOND AMENDMENT TO THE AMENDED AND RESTATED SOLID

WASTE COLLECTION FRANCHISE AGREEMENT WITH SOUTH COUNTY
SANITARY SERVICE, INC. FOR SOLID WASTE COLLECTION SERVICES WHEREAS, the City of Pismo Beach has a franchise agreement with South County Sanitary Service, Inc., (SCSS) for solid waste collection services, effective as of July 1, 2008 and expiring on June 30, 2023; and
WHEREAS, the agreement provides, among other things, that SCSS will provide solid waste, recyclable materials, and green waste collection and disposal services for the City; and
WHEREAS, this agreement has been periodically amended and restated, and further amendment is now warranted to reflect requirements set forth in Senate Bill (SB) 1383; and
WHEREAS, SB 1383 sets goals to reduce disposal of organic waste in landfills, including edible food in order to reduce greenhouse gas emissions and address food insecurity in California; and
WHEREAS, the law has many aspects to it which is resulting in a rate increase in an attempt to recover some of those costs associated with compliance with SB 1383.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby approves, and authorizes the City Manager to execute, the Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement (Exhibit A).

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 3rd day of May 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Attachment 1

11.A-9Council Agenda 5-3-2022

SECONDAMENDMENT
TO
AMENDEDANDRESTATED
SOLIDWASTECOLLECTIONFRANCHISEAGREEMENT

BETWEEN
CITYOFPISMOBEACH

AND
SOUTHCOUNTYSANITARYSERVICEINC.

APRIL2022FINALDRAFT
Attachment 1.A

11.A-10Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 3
SECONDAMENDMENTTO
AMENDEDANDRESTATED
SOLIDWASTECOLLECTION
FRANCHISEAGREEMENT
THISSECONDAMENDMENTTOAMENDEDANDRESTATEDSOLIDWASTECOLLECTIONFRANCHISE AGREEMENT(this"Amendment")ismadeandenteredintothis______dayof_____,2022intheStateof California,andshallmodifythatcertainAmendedandRestatedSolidWasteCollectionFranchise Agreement,datedJune3,2008aspreviouslyamendedbyafirstamendmentdatedAugust3,2016(the "Agreement"),byandbetweentheCITYOFPISMOBEACH,agenerallawcityintheStateofCalifornia ("City")andSOUTHCOUNTYSANITARYSERVICE,INC.,aCaliforniacorporation("Contractor").Cityand Contractormaybecollectivelyreferredtohereinasthe"Parties"andindividuallyasa"Party",unless specificallyidentifiedotherwise.

ThisAmendment#2ismadeandenteredintoonthebasisofthefollowingfacts,understandings,and intentionsoftheparties:
WHEREAS:ThePartiesenteredintotheAgreementon{InsertEffective};and, WHEREAS:TheAgreementprovidesCitywiththerighttodirectContractortomodifythescopeofone ormoretypesofservicedescribedintheAgreement,ortootherwisemodifyitsperformanceunderthe Agreement,subjecttoprovidingadditionalcompensation;and, WHEREAS:SB1383establishesregulatoryrequirementsforjurisdictions,Generators,haulers,SolidWaste facilities,andotherentitiestosupportachievementofStateͲwideOrganicWasteDisposalreduction targets;and,
WHEREAS:SB1383requirestheCitytoimplementCollectionprograms,meetProcessingfacility requirements,conductcontaminationmonitoring,provideeducation,maintainrecords,submitreports, monitorcompliance,conductenforcement,andfulfillotherrequirements;and,theCityhaschosento delegatesomeofitsresponsibilitiestotheContractor,actingastheCity’sdesignee,throughthis Agreement;and,
WHEREAS:BothPartieshave,ingoodfaith,negotiatedchangestotheAgreementnecessarytosupport theCity’scompliancewithSB1383,assetforthherein. 

Attachment 1.A

11.A-11Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 4
AGREEMENT
NOW,THEREFORE,FORGOODANDVALUABLECONSIDERATION,THERECEIPTAND SUFFICIENCYOFWHICHAREHEREBYACKNOWLEDGED,THEPARTIESAGREETOAMENDTHE AGREEMENT,ASFOLLOWS:
Article1.Definitions
A.Article1oftheAgreementisherebyamendedtoincludethefollowing: “AB1826”meanstheOrganicWasteRecyclingActof2014(Chapter727,Statutesof2014modifying Division30oftheCaliforniaPublicResourcesCode),alsocommonlyreferredtoas"AB1826,"asamended, supplemented,superseded,andreplacedfromtimetotime. “AB341”meanstheCaliforniaJobsandRecyclingActof2011(Chapter476,Statuesof2011[Chesbro,AB 341]),alsocommonlyreferredtoas“AB341”,asamended,supplemented,superseded,andreplaced fromtimetotime.
“AB901”meansAssemblyBillapprovedbytheGovernoroftheStateofCaliforniaonOctober10,2015, whichamendedSection41821.5of,amended,renumberedandaddedSection41821.6of,andadded Sections41821.7and41821.8to,thePublicResourcesCode,relatingtoSolidWaste,asamended, supplemented,superseded,andreplacedfromtimetotime. “ApplicableLaw”meansallFederal,State,County,andlocallaws,regulations,rules,orders,judgments, degrees,permits,approvals,orotherrequirementofanygovernmentalagencyhavingCityoverthe Collection,Transportation,andProcessingofRecyclableMaterials,OrganicMaterials,andSolidWaste thatareinforceontheEffectiveDateandasmaybeenacted,issuedoramendedduringtheTermofthis Agreement.ApplicableLawincludes,butisinnowaylimitedto,AB939,AB341,AB1826,andSB1383. “ApprovedDisposalFacility”meanstheColdCanyonLandfillastheprimary,andChicagoGradeLandfill, ortheSantaMariaLandfill,asalternatives,whichhavebeenselectedbytheContractorandapprovedby theCity.ContractorshallnotifyCitybeforeusinganalternativefacility. “ApprovedFacility(ies)”meansanyoneoforanycombinationofthefollowing:ApprovedRecyclable MaterialsProcessingFacility;ApprovedOrganicMaterialsProcessingFacility;and/orApprovedDisposal Facility.
“ApprovedOrganicMaterialsProcessingFacility”meanstheHitachiZosenInova(HZI)KompogasFacility locatedat4300OldSantaFeRd,SanLuisObispo,CA93401,andEngel&GrayInc.RegionalCompost Facility,locatedat745WestBetteraviaRoad,SantaMaria,Californiawhichhavebeenselectedbythe ContractorandapprovedbytheCity.
“ApprovedProcessingFacility(ies)”meansanyoneoforanycombinationofthe:ApprovedRecyclable MaterialsProcessingFacility;orApprovedOrganicMaterialsProcessingFacility. “ApprovedRecyclableMaterialsProcessingFacility”meanstheMaterialsRecoveryFacilityatCold CanyonProcessingFacility,whichhasbeenselectedbytheContractorandapprovedbytheCity. “Bin”meansaContainerwithcapacityofapproximatelyone(1)toeight(8)cubicyards,withahingedlid, andwithwheels(whereappropriate),thatisservicedbyafrontendͲloadingand/orrearendͲloading Collectionvehicle,includingBinswithCompactorsattachedtoincreasethecapacityoftheBin. “BusinessDays”meandaysduringwhichtheCityofficesareopentodobusinesswiththepublic. “CaliforniaCodeofRegulations”or“(CCR)”meanstheStateofCaliforniaCodeofRegulations.CCR Attachment 1.A

11.A-12Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 5
referencesinthisAgreementareprecededwithanumberthatreferstotherelevantTitleoftheCCR(e.g., “14CCR”referstoTitle14ofCCR).
“CalRecycle”meansCalifornia'sDepartmentofResourcesRecyclingandRecovery. “Cart”meansaplasticContainerwithahingedlidandwheelsthatisservicedbyanautomatedorsemiͲ automatedCollectionvehicle.ACarthascapacityof20,35,64or96gallons(orsimilarvolumes). “City”meanstheCityofPismoBeach,agenerallawcityintheStateofCalifornia,andalltheterritory lyingwithinthemunicipalboundariesoftheCityaspresentlyexistingorassuchboundariesmaybe modifiedduringtheterm,actingthroughtheCityCouncilortheCityManager.TheCitymaydesignate responsibilitiestooneormorethirdparties,inwriting,betweentheCityManagerandthedesignee. “CityManager”meanstheCitystaffmemberortheirdesigneeresponsibleforcontractmanagementand maintenance.
“Collect”or“Collection”(oranyvariationthereof)meanstotakephysicalpossession,transport,and removeDiscardedMaterialsattheplaceofgenerationintheCity. “Commercial”shallmeanof,from,orpertainingtononͲResidentialPremiseswherebusinessactivityis conducted,including,butnotlimitedto,retailsales,services,wholesaleoperations,manufacturing,and industrialoperations,butexcludingbusinessesconducteduponResidentialpropertywhicharepermitted underapplicablezoningregulationsandarenottheprimaryuseoftheproperty. “Compactor”meansamechanicalapparatusthatcompressesmaterialstogetherwiththeContainerthat holdsthecompressedmaterialsortheContainerthatholdsthecompressedmaterialsifitisdetached fromthemechanicalcompactionapparatus.Compactorsincludetwo(2)toeight(8)cubicyardBin CompactorsservicedbyfrontͲendloaderCollectionvehiclesandten(10)tofifty(50)cubicyardDropBox CompactorsservicedbyrollͲoffCollectionvehicles.
“Complaint”shallmeaneachwrittenororallycommunicatedstatementmadebyanyPerson,whetherto CityorContractor,alleging:(1)nonͲperformance,ordeficienciesinContractor’sperformance,ofitsduties underthisAgreement;(2)aviolationbyContractorofthisAgreement;or(3)anSB1383NonͲCompliance Complaintasrequiredunder14CCRSection18995.3.
“CompostablePlastics”or“CompostablePlastic”meansplasticmaterialsthatmeettheASTMD6400 standardforCompostability.
“Compost”(oranyvariationthereof)includesacontrolledbiologicaldecompositionofOrganicMaterials yieldingasafeandnuisancefreeCompostproduct.
"Container"meansanyCart,Bin,Compactor,orfranchiseRollͲOffusedforCollection andstoringDiscardedMaterials.
“Contractor”meansSOUTHCOUNTYSANITARYSERVICE,INCorganizedandoperatingunderthelawsof theStateanditsofficers,directors,employees,agents,companies,relatedͲparties,affiliates,subsidiaries, andSubcontractors.
“County”meanstheCountyofSanLuisObispo,apoliticalsubdivisionoftheStateofCalifornia. “Customer”meansthePersonwhomContractorsubmitsitsbillinginvoicetoandcollectspaymentfrom forCollectionservicesprovidedtoaPremises.TheCustomermaybeeithertheOccupantorOwnerofthe Premises.
“CustomerNotice”meanstheContractor’snoticetoCustomer(s)asdescribedinSection5.14.2. Attachment 1.A

11.A-13Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 6
“DesignatedWaste”meansnonͲHazardousWastewhichmayposespecialDisposalproblemsbecauseof itspotentialtocontaminatetheenvironment,andwhichmaybeDisposedofonlyinClassIIDisposalsites orClassIIIDisposalsitespursuanttoavarianceissuedbytheCaliforniaDepartmentofHealthServices. DesignatedWasteconsistsofthosesubstancesclassifiedasDesignatedWastebytheState,inCalifornia CodeofRegulationsTitle23,Section2522asmaybeamendedfromtimetotime. “DiscardedMaterials”meansRecyclableMaterials,OrganicMaterials,andSolidWasteplacedbya Generatorinareceptacleand/oratalocationforthepurposesofCollectionbyContractor,excluding ExcludedWaste.
“Disposal”(oranyvariationthereof)meansthefinaldispositionofSolidWaste,orProcessingResidueat aDisposalFacility.
“DisposalFacility”meansalandfill,orotherfacilityforultimateDisposalofSolidWaste. “Divert”or“Diversion”(oranyvariationthereof)meanstopreventDiscardedMaterialsfromDisposalat landfillortransformationfacilities,(includingfacilitiesusingincineration,pyrolysis,distillation, gasification,orbiologicalconversionmethods)throughsourcereduction,reuse,Recycling,Composting, anaerobicdigestionorothermethodofProcessing,subsequenttotheprovisionsofAB939.Diversionis abroadconceptthatistobeinclusiveofmaterialhandlingandProcessingchangesthatmayoccurover theTermincluding,butnotlimitedto,changesinstandardindustrypracticeorimplementationof innovative(butnotnecessarilyfullyproven)techniquesortechnologythatreduceDisposalrisk,decrease costsand/orareforotherreasonsdeemeddesirablebytheCity. “DwellingUnit”meansanyindividuallivingunitina;SingleͲFamilydwelling(SFD)orMultiͲFamilydwelling (MFD)structureorbuilding,amobilehome,oramotorhomelocatedonapermanentsiteintendedfor, orcapableofbeingutilizedfor,Residentiallivingotherthanahotelormotel. “EdibleFood”meansfoodintendedforhumanconsumption.ForthepurposesofthisAgreement,Edible FoodisnotSolidWasteifitisrecoveredandnotdiscarded.NothinginthisAgreementrequiresor authorizestherecoveryofEdibleFoodthatdoesnotmeetthefoodsafetyrequirementsoftheCalifornia RetailFoodCode.Ifthedefinitionin14CCRSection18982(a)(18)forEdibleFooddiffersfromthis definition,thedefinitionin14CCRSection18982(a)(18)shallapplytothisAgreement. “EffectiveDate”meansthedateonwhichthelatterofthetwoPartiessignsthisAgreement. “ExcludedWaste”meansHazardousSubstance,HazardousWaste,InfectiousWaste,DesignatedWaste, volatile,corrosive,biomedical,infectious,biohazardous,andtoxicsubstancesormaterial,wastethat Contractorreasonablybelieveswould,asaresultoforuponDisposal,beaviolationoflocal,Stateor Federallaw,regulationorordinance,includinglanduserestrictionsorconditions,wastethatcannotbe DisposedofinClassIIIlandfills,wastethatinContractor’sreasonableopinionwouldpresentasignificant risktohumanhealthortheenvironment,causeanuisanceorotherwisecreateorexposeContractoror Citytopotentialliability;butnotincludingdeminimisvolumesorconcentrationsofwasteofatypeand amountnormallyfoundinResidentialSolidWasteafterimplementationofprogramsforthesafe Collection,Recycling,treatment,andDisposalofbatteriesandpaintincompliancewithSections41500 and41802oftheCaliforniaPublicResourcesCode.ExcludedWastedoesnotincludeUsedMotorOilor UseMotorOilFilterswhenproperlyplacedforCollectionbyContractor,assetforthinthisAgreement. “Federal”meansbelongingtoorpertainingtotheFederalgovernmentoftheUnitedStates. “FoodRecovery”meansactionstoCollectanddistributefoodforhumanconsumptionwhichotherwise wouldbeDisposed,orasotherwisedefinedin14CCRSection18982(a)(24). “FoodScraps"meansthoseDiscardedMaterialsthatwilldecomposeand/orputrefyincluding:(i)all Attachment 1.A

11.A-14Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 7
kitchenandtableFoodWaste;(ii)animalorvegetablewastethatisgeneratedduringorresultsfromthe storage,preparation,cookingorhandlingoffoodstuffs;(iii)fruitwaste,grainwaste,dairywaste,meat, andfishwaste;and,(iv)vegetabletrimmings,houseplanttrimmingsandotherCompostableOrganic WastecommontotheoccupancyofResidentialdwellings.FoodScrapsareasubsetofFoodWaste. “FoodͲSoiledPaper”meansCompostablepapermaterialthathascomeincontactwithFoodScrapsor liquid,suchas,butnotlimitedto,Compostablepaperplates,napkins,andpizzaboxes.FoodͲSoiledPaper isasubsetofFoodWaste.
“Generator”meansanyPersonwhoseactorprocessproducesDiscardedMaterialsasdefinedinthe PublicResourcesCode,orwhoseactfirstcausesDiscardedMaterialstobecomesubjecttoregulation. “GreenWaste”meansthoseDiscardedMaterialsthatwilldecomposeand/orputrefy,including,butnot limitedto,greentrimmings,grass,weeds,leaves,prunings,branches,deadplants,brush,treetrimmings, deadtrees,smallpiecesofunpaintedanduntreatedwood,andothertypesofOrganicMaterialsresulting fromnormalyardandlandscapingmaintenancethatmaybespecifiedinCityLegislationforCollection andProcessingasOrganicMaterialsunderthisAgreement.GreenWastedoesnotincludeitemsherein definedasExcludedWaste.GreenWasteareasubsetofOrganicMaterials.GreenWasteplacedfor Collectionmaynotexceedsix(6)inchesindiameterandthree(3)feetinlengthandmustfitwithinthe ContractorͲprovidedContainer.AcceptableGreenWastemaybeaddedtoorremovedfromthislistfrom timetotimebymutualconsentoratthesolediscretionoftheCity.Contractorshallnotaddorremove materialstoorfromthislistwithoutwrittenapprovalfromtheCityManagerorsignedamendmenttothe Agreement,andsuchapprovalshallnotbeunreasonablywithheld. “HazardousSubstance”meansanyofthefollowing:(a)anysubstancesdefined,regulatedorlisted (directlyorbyreference)as"HazardousSubstances","hazardousmaterials","HazardousWastes","toxic waste","pollutant",or"toxicsubstances",orsimilarlyidentifiedashazardoustohumanhealthorthe environment,inorpursuantto:(i)theComprehensiveEnvironmentalResponse,Compensationand LiabilityAct(CERCLA)of1980,42USC§9601etseq.(CERCLA);(ii)theHazardousMaterialsTransportation Act,49USC§1802,etseq.;(iii)theResourceConservationandRecoveryAct,42USC§6901etseq.;(iv) theCleanWaterAct,33USC§1251etseq.;(v)CaliforniaHealthandSafetyCode§§25115Ͳ25117,25249.8, 25281,and25316;(vi)theCleanAirAct,42USC§7901etseq.;and,(vii)CaliforniaWaterCode§13050; (b)anyamendments,rulesorregulationspromulgatedthereundertosuchenumeratedstatutesoracts currentlyexistingorhereafterenacted;and,(c)anyotherhazardousortoxicsubstance,material, chemical,wasteorpollutantidentifiedashazardousortoxicorregulatedunderanyotherApplicableLaw currentlyexistingorhereinafterenacted,including,withoutlimitation,friableasbestos,polychlorinated biphenyl’s(PCBs),petroleum,naturalgas,andsyntheticfuelproducts,andbyͲproducts. “HazardousWaste”meansallsubstancesdefinedasHazardousWaste,acutelyHazardousWaste,or extremelyHazardousWastebytheStateinHealthandSafetyCode§25110.02,§25115,and§25117orin thefutureamendmentstoorrecodificationsofsuchstatutesoridentifiedandlistedassolarpanelsfrom ResidentialPremises,andHazardousWastebytheU.S.EnvironmentalProtectionAgency(EPA),pursuant totheFederalResourceConservationandRecoveryAct(42USC§6901etseq.),allfutureamendments thereto,andallrulesandregulationspromulgatedthereunder. “Holidays”aredefinedasNewYear’sDay,MemorialDay,IndependenceDay,LaborDay,Thanksgiving Day,andChristmasDay.
“HouseholdHazardousWaste”or“HHW”meansHazardousWastegeneratedatResidentialPremises withintheCity.HHWincludes:paint,stain,varnish,thinner,adhesives,autoproductssuchasoldfuel, UsedMotorOilandFilter,UsedOilFilter,batteries,householdbatteries,fluorescentbulbs,tubes, cleanersandsprays,pesticides,fertilizersandothergardenproducts,needles,syringes,andlancets. Attachment 1.A

11.A-15Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 8
“InfectiousWaste”meansbiomedicalwastegeneratedathospitals,publicorprivatemedicalclinics, dentaloffices,researchlaboratories,pharmaceuticalindustries,bloodbanks,mortuaries,veterinary facilitiesandothersimilarestablishmentsthatareidentifiedinHealthandSafetyCodeSection25117.5 asmaybeamendedfromtimetotime.
“LiquidatedDamages”meanstheamountsduebyContractorforfailuretomeetspecificquantifiable standardsofperformanceasdescribedinSection12.3. “MemberAgency”meansanyjurisdictionthathasallocatedsomeorallofitsSolidWastepowerstoa SolidWasteJointPowersAuthorityasdefinedbytheMemorandumofAgreementrelatedtothe jurisdiction’scompliancewithApplicableLaw.
''MaterialsRecoveryFacility"see“ApprovedProcessingFacility(ies). "MultifamilyDwellingUnit"means,notwithstandinganycontrarydefinitionintheMunicipalCode,any Premises,otherthanaSingleFamilyDwellingUnit,withfive(5)ormoreDwellingUnitsusedfor Residentialpurposes,irrespectiveofwhetherresidencethereinistransient,temporaryorpermanent, includingsuchPremiseswhencombinedinthesamebuildingwithCommercialestablishments,that receivecentralized,shared,CollectionserviceforallunitsonthePremiseswhicharebilledtoone(1) Customeratone(1)address.CustomersresidinginTownhouses,mobilehomes,condominiums,orother structureswithfive(5)ormoreDwellingUnitswhoreceivecentralized,shared,Collectionserviceforall unitsonthePremiseswhicharebilledtoone(1)Customeratone(1)addressshallbeconsideredMultiͲ Family.
“MunicipalCode”meansthePismoBeachMunicipalCode,asamendedfromtimetotime. “Occupant”meansthePersonwhooccupiesaPremises.
“OrganicMaterials”meansGreenWasteandFoodWaste,individuallyorcollectively.NoDiscarded MaterialshallbeconsideredtobeOrganicMaterials,however,unlessitisseparatedfromRecyclable MaterialandSolidWaste.OrganicMaterialsareasubsetofOrganicWaste. “OrganicWaste”meanswastescontainingmaterialoriginatedfromlivingorganismsandtheirmetabolic wasteproductsincluding,butnotlimitedto,food,GreenWaste,lumber,wood,paperproducts,printing andwritingpaper,manure,biosolids,digestate,andsludges,orasotherwisedefinedin14CCRSection 18982(a)(46).Biosolidsanddigestateareasdefinedin14CCRSection18982(a)(4)and14CCRSection 18982(a)(16.5),respectively.
“Party”or“Parties”referstotheCityandContractor,individuallyortogether. “Premises”meansanylandorbuildingintheCitywhereDiscardedMaterialsaregeneratedor accumulated.“Processing”(oranyvariationthereof)meanstoprepare,treat,orconvertthroughsome specialmethod.
“ProcessingFacility”meansanyplantorsiteusedforthepurposeofsorting,cleansing,treatingor reconstitutingRecyclableMaterialsforthepurposeofmakingsuchmaterialavailableforRecyclingor reuseorthefacilityfortheProcessingand/orCompostingofOrganicMaterials. “ProhibitedContainerContaminants”meansthefollowing:(i)DiscardedMaterialsplacedinthe RecyclableMaterialsContainerthatarenotidentifiedasacceptableRecyclableMaterialsfortheCity’s Collectionprogram;(ii)DiscardedMaterialsplacedintheOrganicMaterialsContainerthatarenot identifiedasacceptableOrganicMaterialsfortheCity’sCollectionprogram;(iii)DiscardedMaterials placedintheSolidWasteContainerthatareacceptableRecyclableMaterialsand/orOrganicMaterialsto beplacedintheCity’sRecyclableMaterialsorOrganicMaterialsContainersorotherwisemanagedunder Attachment 1.A

11.A-16Council Agenda 5-3-2022

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Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 9
theCity’sCollectionprogram;and,(iv)ExcludedWasteplacedinanyContainer. “RecyclableMaterials”meansbyͲproductsordiscardssetaside,handled,packagedorofferedfor Collectionfromresidential,commercial,governmentalorindustrialcustomersinamannerdifferent fromSolidWaste,including,butnotlimitedto,aluminum,newspaper,clearandcoloredglass,tinand biͲmetal,allplasticcontainers,cardboard,chipboard,magazines,mixedpaper(includingmagazines, phonebooksandjunkmail)andmotoroilandfilters(separatelycollected).Greenwastematerialis includedinthisdefinition,butiscollectedseparatelyfromotherRecyclableMaterials,andincludesgrass clippings,leaves,weeds,brush,wood,ChristmasTreesandbranches.AcceptableRecyclableMaterials maybeaddedtoorremovedfromthislistfromtimetotimebymutualconsentoratthesolediscretion oftheCity.Contractorshallnotaddorremovematerialstoorfromthislistwithoutwrittenapprovalfrom theCityManagerorsignedamendmenttotheAgreement,andsuchapprovalshallnotbeunreasonably withheld.
“Residential”shallmeanof,from,orpertainingtoaSingleͲFamilyPremisesorMultiͲFamilyPremises includingSingleͲFamilyhomes,apartments,condominiums,Townhousecomplexes,mobilehomeparks, andcooperativeapartments.
“Residue”meansthosematerialswhich,afterProcessing,areDisposedratherthanRecycledduetoeither thelackofmarketsformaterialsortheinabilityoftheProcessingFacilitytocaptureandrecoverthe materials.
“RollͲOff”meansanopenͲtoporliddedContainerwithacapacityofseven(7)toforty(40)cubicyards thatisservicedbyarollͲoffCollectionvehicle.
“SB1383”meansSenateBill1383of2016approvedbytheGovernoronSeptember19,2016,whichadded Sections39730.5,39730.6,39730.7,and39730.8totheHealthandSafetyCode,andaddedChapter13.1 (commencingwithSection42652)toPart3ofDivision30ofthePublicResourcesCode,establishing methaneemissionsreductiontargetsinastatewideefforttoreduceemissionsofshortͲlivedclimate pollutantsasamended,supplemented,superseded,andreplacedfromtimetotime. ForthepurposesofthisAgreement,SB1383specificallyreferstotheShortͲLivedClimatePollutants (SLCP):OrganicWasteReductionsregulationsdevelopedbyCalRecycleandadoptedonNovember3, 2020,thatcreatedChapter12of14CCR,Division7andamendedportionsofregulationsof14CCRand 27CCR.
“SB1383QualifiedRenewableNaturalGas”or“SB1383RNG”meansSB1383qualifiedgasderivedfrom OrganicWastethathasbeenDivertedfromalandfillandProcessedataninͲvesseldigestionfacilitythat ispermittedorotherwiseauthorizedby14CCRtorecoverOrganicWaste,orasotherwisedefinedin14 CCRSection18982(a)(62)
“SelfͲContractor”or“SelfͲHaul”meansaPersonwhohaulsDiscardedMaterials,recoveredmaterial,or anyothermaterial,toanotherPerson,orasotherwisedefinedin14CCRSection18982(a)(66).SelfͲ ContractoralsoincludesaPersonwhobackͲhaulswaste,asdefinedin14CCRSection18982(a)(66)(A). “ServiceLevel”referstothesizeofaCustomer’sContainerandthefrequencyofCollectionservice. “SingleͲFamily”or“SFD”meansnotwithstandinganycontrarydefinitioninMunicipalCode,anydetached orattachedhouseorresidencedesignedorusedforoccupancybyone(1)family,providedthatCollection servicefeasiblycanbeprovidedtosuchPremisesasanindependentunit,andtheOwnerorOccupantof suchindependentunitisbilleddirectlyfortheCollectionservice.SingleͲFamilyincludesTownhousesthat maintainindividualcollectionserviceregardlessofwhethereachunitisseparatelybilledfortheirspecific ServiceLevel.SingleͲFamilyalsoincludesduplex,triͲplex,orfourͲplexResidentialstructuresregardlessof Attachment 1.A

11.A-17Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 10
whethereachunitmaintainsindividualcollectionserviceorisseparatelybilledfortheirspecificService Level.
“SolidWaste”meansSolidWasteasdefinedinCaliforniaPublicResourcesCode,Division30,Part1, Chapter2,§40191andregulationspromulgatedthereunder.ExcludedfromthedefinitionofSolidWaste areExcludedWaste,SourceSeparatedRecyclableMaterials,SourceSeparatedOrganicMaterials,and radioactivewaste.Notwithstandinganyprovisiontothecontrary,SolidWastemayincludedeminimis volumesorconcentrationsofwasteofatypeandamountnormallyfoundinResidentialSolidWasteafter implementationofprogramsforthesafeCollection,Recycling,treatment,andDisposalofHousehold HazardousWasteincompliancewithSection41500and41802oftheCaliforniaPublicResourcesCodeas maybeamendedfromtimetotime.SolidWasteincludessalvageablematerialsonlywhensuchmaterials areincludedforCollectioninaSolidWasteContainernotSourceSeparatedfromSolidWasteatthesite ofgeneration.
“SourceSeparated”meansthesegregation,bytheGenerator,ofmaterialsdesignatedforseparate CollectionforsomeformofRecycling,Composting,recovery,orreuse. “State”meanstheStateofCalifornia.
“Subcontractor”meansaPartywhohasenteredintoacontract,expressorimplied,withtheContractor fortheperformanceofanactthatisnecessaryfortheContractor’sfulfillmentofitsobligationsfor providingserviceunderthisAgreement.VendorsprovidingmaterialsandsuppliestoContractorshallnot beconsideredSubcontractors.
“Ton”or“Tonnage”meansaunitofmeasureforweightequivalenttotwothousand(2,000)standard pounds.
“Townhouse”meansanattachedorsemiͲattachedDwellingUnitwithinagroupofattachedorsemiͲ attachedDwellingUnits.ATownhouseshallbeconsideredaSingleͲFamilyDwellingUnitifeachunit maintainsindividualCollectionservicesubscription.ATownhouseshallbeconsideredaMultiͲFamily DwellingUnitifthePremisereceivescentralized,shared,CollectionserviceforallunitsonthePremise. TheseshallbethedesignationsregardlessofwhetherthePremisesarebilledindividuallyorthrougha centralaccount(e.g.,homeownerassociation,propertymanager). “Transfer”meanstheactoftransferringthematerialsCollectedbyContractorinitsroutevehiclesinto largervehiclesforTransporttootherfacilitiesforthepurposeofRecyclingorDisposingofsuchmaterials. “Transportation”(oranyvariationthereof)meanstheactofconveyingCollectedmaterialsfromone locationtoanother.
Article4.ScopeoftheAgreement
A.Article4,Section4.2oftheAgreementisherebyamendedtoincludethefollowing: “D.Contractorshallcooperatewithandshallnotimpede,interfere,orattempttoimpedeor interferewiththeimplementation,expansion,oroperationofFoodRecoveryeffortsintheCity.” Article5.DirectServices
A.Article5,Section5.2oftheAgreementisamendedtoincludethefollowing: “ContractorshallprovideregularweeklyCollectionofGarbageforallPremiseswithinCity,orsuch otherlevelofserviceasmaybedeterminedbyCitywiththeconsentofContractorandatrates establishedbythisAgreement.ContractorshallprovidemorefrequentCollectionservicesatrates Attachment 1.A

11.A-18Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 11
establishedbythisAgreementforthosePremiseswithintheCitythatgeneratelargervolumesof SolidWaste.
NolaterthantheEffectiveDate,Contractorshallprovidea threeͲ ContainerCollection programtoCollectandremoveallDiscardedMaterialsplacedinContainersatthedesignated CollectionlocationsforSingleFamilyDwellingUnitsandMultifamilyDwellingUnits,and CommercialCustomersallattheratesestablishedbythisAgreement.ResidentialRecyclable MaterialandOrganicMaterialsCollectionshallbeweeklyonthesamedayoftheweekasSolid WasteCollectionservice,unlessinͲyardserviceisprovided,orCustomerhasareceivedawaiver pursuanttoSection6.12.RecyclableMaterialsandOrganicMaterialsCollectionshallbeona scheduleasdeterminedbyContractorandtheGenerator.Contractorrecognizesthatbecauseof anunusualcircumstance,aSingleFamilyDwellingUnitmaygeneratemoreRecyclableMaterial thanwillfitintheblueRecyclableMaterialsContainer.TheexcessRecyclableMaterialmaybe neatlyplacednexttotheblueContainerandContractorwillCollecttheexcessRecyclableMaterial atnoadditionalcharge.ThisextraservicetoaSingleFamilyDwellingUnitshallbelimitedtoa frequencyofoncepermonthandaquantitytoanamountthatwillfitintotheexistingblue RecyclingMaterialsContainer.
PhysicallydisabledresidentswhoresideinaSingleFamilyorMultifamilyDwellingUnitshallhave theoptionofplacingtheirContainersneartheirdwelling,visiblefromthecurb,andthe ContractorwillcollecttheirContainersatthislocationandreturntheContainerstothesame location.TobeeligibleforthisCollectionoption,residentsmustpresentproofoftheirphysical incapacitytotheContractor.”
B.Article5,Section5.2oftheAgreementisherebyamendedtoincludethefollowingsubsections: “5.2.1SingleͲFamilyCollection
TheContractorshallprovidekitchenpailsdesignedtocontainFoodScrapspriortoplacementinthe Customer’sOrganicMaterialsCart.Contractorwillberesponsiblefordistributionofkitchenpailsto SingleͲFamilyuponrequest,fromContractor’sofficebeginningontheEffectiveDate.Cityorits designeemayrestockContractorinventoriesatlocalofficesfordistributiontonewresidentsor residentswhoneedareplacement.


5.2.2MultiͲFamilyCollection
A. ContractorandCity,inconjunctionwitheachother,ifdirectedbytheCity,maymakecontactwith eachandeveryMultiͲFamilyCustomerinadvanceoftheEffectiveDatetodetermineappropriate Containersizesandservicefrequency.ContractorshalldeliverRecyclableMaterialsContainers andOrganicMaterialsContainerstoeachandeveryMultiͲFamilyCustomeratthesametimethat theContractordeliversSolidWasteContainers.
B. TheContractorshallprovidekitchenpailsdesignedtocontainFoodScrapspriortoplacementin theCustomer’sOrganicMaterialsCart.Contractorwillberesponsiblefordistributionofkitchen pailstoMultiͲFamilyCustomersuponrequest,fromContractor’sofficebeginningonthe EffectiveDate.CityoritsdesigneemayrestockContractorinventoriesatlocalofficesfor distributiontonewresidentsorresidentswhoneedareplacement. 

5.2.3CommercialCollection
ContractorandCity,inconjunctionwitheachother,ifdirectedbytheCity,maymakecontactwith Attachment 1.A

11.A-19Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 12
eachandeveryCommercialCustomerinadvanceoftheEffectiveDatetodetermineappropriate Containersizesandservicefrequency.ContractorshalldeliverRecyclableMaterialsContainersand OrganicMaterialsContainerstoeachandeveryCommercialCustomeratthesametimethatthe ContractordeliversSolidWasteContainers,unlessthatCommercialCustomerisexemptedfrom RecyclableMaterialsservicesbytheCityorhasdemonstratedtotheCitythatitisDivertingRecyclable MaterialsthroughsubscriptionwithanotherCityͲapprovedContractor,orotherCityͲapproved method.”
C.Article5,Section5.3oftheAgreementisherebyamendedtoreadasfollows: “5.3DiscardedMaterialstoBeCollected
A. SolidWaste.ContractorshallprovideContainerstoCustomersforCollectionofSolidWaste,and shallprovideSolidWasteCollectionservice,assetforthinthisSection.ContractorshallTransport theSolidWastetotheApprovedDisposalFacility.Contractormayallowcarpetsandtextilestobe placedintheContainers.ProhibitedContainerContaminantsshallnotbeCollectedinSolidWaste Containers.TheContainersshallcomplywiththerequirementsofSection5.6. B. RecyclableMaterials.ContractorshallprovideContainerstoCustomersforCollectionofSource SeparatedRecyclableMaterialsandshallprovideSourceSeparatedRecyclableMaterials Collectionservice,asdescribedinthisSection.ContractorshallTransporttheSourceSeparated RecyclableMaterialstotheApprovedRecyclableMaterialsProcessingFacility.Inaddition, OrganicMaterialswillalsobeCollectedinaseparateContainer.ThePartiesagreethatthelistof acceptedtypesofSourceSeparatedRecyclableMaterialsmaybeaddedtoorremovedfromthis listfromtimetotimebymutualconsentoratthesolediscretionoftheCity.Contractorshallnot addorremovematerialstoorfromthislistwithoutwrittenapprovalfromtheCityManageror signedamendmenttotheAgreement,andsuchapprovalshallnotbeunreasonablywithheld. ProhibitedContainerContaminantsshallnotbeCollectedintheRecyclableMaterialsContainers. TheContainersshallcomplywiththerequirementsofSection5.6. C. OrganicMaterials.ContractorshallprovideContainerstoCustomersforCollectionofOrganic MaterialsandshallprovideOrganicMaterialsCollectionservice,asdescribedinthisSection. OrganicMaterialsthataretobeacceptedforCollectionintheOrganicMaterialsCollection programincludethefollowing:FoodScraps;FoodͲSoiledPaper;GreenWaste,whicharedefined inArticle1.ContractorshallTransporttheOrganicMaterialstotheApprovedOrganicMaterials ProcessingFacility.
NolaterthantheEffectiveDate,ContractorshallimplementanOrganicMaterialsCollection programthatallowsGeneratorstointentionallycommingleFoodWasteandGreenWasteinthe GreenContainerstoallResidential,MultiͲfamily,andCommercialbusiness.Contractorshall provideOrganicMaterialsCollectionservice,asdescribedinthisSectionandTransportthe OrganicMaterialstotheApprovedOrganicMaterialsProcessingFacility.” D.Article5,Section5.4oftheAgreementisherebyamendedasfollows: “5.4RefusaltoProvideCollectionServices
ContractormayrefusetoCollectRecyclableMaterialsorOrganicMaterialsandshallnotbe obligatedtocontinuetoprovideContainer(s)toanyparticipantintheRecyclingorOrganic Materialsprogramwho,afterreasonablewarningbyContractor,failstoproperlysortandsetout RecyclableMaterialsorOrganicMaterials,includingexcessivecontamination. ContractorshallreportmonthlytoCityanywarningnoticesissuedasspecifiedinExhibitD.” Attachment 1.A

11.A-20Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 13
E.Article5,Section5.6.2oftheAgreementisherebyamendedtoincludethefollowing: B.Specifications.AllvehiclesusedbyContractorinprovidingSolidWaste,RecyclableMaterials, andOrganicMaterialsCollectionservicesunderthisAgreementshallcomplywithallfederal, California,andCityrequirementsforsuchvehiclesastheynowexistormaybeamendedinthe future,includingallapplicableairemissionsrequirements,andshallberegisteredwiththe CaliforniaDepartmentofMotorVehicles.Allsuchvehiclesshallhavewatertightbodiesdesigned topreventleakage,spillageoroverflow.AllsuchvehiclesshallcomplywithU.S.Environmental ProtectionAgencynoiseemissionregulationsandotherapplicablenoisecontrolregulations.” F.Article5,Section5.6.3oftheAgreementisherebyamendedasfollows: “5.6.3DiscardedMaterialsContainers
ContractorshallsupplyeachSingleͲFamilyDwellingUnitwitha32,64or96ͲgallonContainer forSolidWaste.ThemonthlyservicefeeforeachsizeContainerisshowninExhibitA.In addition,eachSingleͲFamilyDwellingUnitwillreceivefromContractora64or96Ͳgallon ContainerforallcommingledRecyclableMaterialsanda64or96ͲgallonContainerforOrganic Materials.Ifrequestedbycustomer,Contractorshallprovidetothecustomera32Ͳ,64Ͳ,or 96ͲgallonRecyclableContainerandeithera32,64Ͳor96ͲgallonOrganicMaterialsContainer. ContractorshallprovideCustomers(includingSingleͲFamily,MultiͲFamily,Commercial,andCity facilityCustomers)withnewCollectionContainersasrequestedbytheCustomertomeetits desiredServiceLevelwithinfive(5)BusinessDaysofContractor’sfirstreceiptoftheCustomer request.
ContainersprovidedbytheContractoronandaftertheEffectiveDate,shallcomplywiththe ContainerstandardssetforthinthisSection.AllContainersshalldisplayidentifyingandcontact informationapprovedbytheCityManager,includingtelephonenumber,capacity,andidentifying inventoryorserialnumber.
ContractorshallsupplyeachMultiͲfamilyDwellingUnitandcommercialorgovernmental agencywithappropriatelysizedContainersforSolidWaste,commingledRecyclablesand OrganicMaterials.Ifneeded,ContractoragreestoprovideadditionalContainers,as requested,byallPersonsattherateasshownonExhibitA.AllMultiͲfamilyDwellingUnits andCommercialorgovernmentalagencyCustomersshallbeentitledtotheCollectionofan unlimitedquantityofRecyclableMaterialpickeduptwiceperweek,asrequested,attherate approvedbytheCity.ContractoragreesnottolimitthespecifictypeofRecyclableMaterial (suchascardboardonly)thatcanbeplacedinaContainerunlessapprovedbytheCityona customerͲbyͲcustomerbasis.
AllSolidWasteCartlidsshallbeblack/grey,allRecyclableMaterialsCartlids,shallbeblue andallOrganicMaterialsCartlidsshallbegreen.SolidWasteBin,Compactor,andfranchise RollͲOfflidsorbodiesshallbeblack/grey,allRecyclableMaterialsBin,Compactor,and franchiseRollͲOfflidsorbodiesshallbeblue,andallOrganicsMaterialsBin,Compactor,and franchiseRollͲOfflidsorbodiesshallbegreen.NolaterthanDecember31,2035,Contractor shallprovideallCustomerswithcleanCollectionContainersthatcomplywiththeContainer colorrequirementsspecifiedinthisSectionorasotherwisespecifiedin14CCRSection18982; 14CCR,Division7,Chapter12,Article3;orotherApplicableLaw. IfanexistingContainerbreaksorisotherwiserenderednonͲfunctionalonoraftertheEffective Date,theContractorshallreplacethenonͲfunctionalContainerwithanewContainerthat Attachment 1.A

11.A-21Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 14
complieswiththecolorrequirementsofthisSection.NotwithstandingthisSection,theContractor isnotrequiredtoreplacefunctionalContainers,includingContainerspurchasedpriortothe EffectiveDate,whichdonotcomplywiththecolorrequirementsofthisSectionpriortotheend oftheusefullifeofthoseContainers,orpriortoJanuary1,2036,whichevercomesfirst. AnynewContainersforRecyclableMaterialsshallincludeaninͲmoldedgraphicorstickerwhich providesinstructionstotheGenerator.Thefinalcolorandsignage,includingtheinͲmolded graphicorstickerontheContainersshallbeapprovedbytheCityManagerortheirdesignee. CityandContractoracknowledgethatfromtimetotime,Containersbecomedamagedor destroyed.CityandContractoralsoacknowledgethatfromtimeͲtoͲtimeContainersmaybe stolenfromthecurbordamagedduetonormaluse.Thefeescheduletoreplacelostor damagedContainersisshownonExhibitA.
AllContractorsuppliedContainersforDiscardedMaterialsshallremainthepropertyof Contractor.Containersdamagedduetolackofreasonablecarebythecustomer,or ContainersdamagedbygraffitimaybereplacedbyContractor,thefeeforwhichshallbethe sameasforlostordamagedContainersassetforthonExhibitAContractormayrecover Containersusedbycustomersforotherthantheirintendedpurpose. ContractorshallensurealabelonthebodyorlidofeachContainerhasbeenprovidedtoa Customerthatincludeslanguageorgraphicimages,orboth,thatindicatetheprimarymaterials acceptedandtheprimarymaterialsprohibitedinthatContainer.Labelsshallclearlyindicate itemsthatareProhibitedContainerContaminantsforeachContainer.OnorbeforetheEffective Date,ContractorshallimprintnewContainerbodiesorlidswithtextorgraphicimagesthat indicatetheprimarymaterialsacceptedandtheprimarymaterialsprohibitedinthatContainer. LabelsshallclearlyindicateitemsthatareProhibitedContainerContaminantsforeachContainer. PriortoorderinganyContainersorlidswithinͲmoldlabels,Contractorshallsubmitasampleof itsproposedlabel,proposedlocation(s)forplacementoflabelsoneachtypeofContainer,andits labelingplantotheCityManagerforapproval.
AllRollͲOffsdeliveredwithintheCitylimitsmustbeplacedsolelyonprivateproperty.AnyRollͲ Offdeliveredwithinthepublicrightofway,evenpartially,oronotherpubliclyownedlandmust bedonewiththebenefitoftheencroachmentpermit,unlesstheRollͲOffisorderedbytheCity. ItisContractor'sresponsibilitytoensuretheCustomerhasobtainedanencroachmentpermit priortodeliveryofaRollͲOffthatisentirelyorpartiallyintherightofway.” G.Article5,Section5.8oftheAgreementisherebyretitled,andamendedasfollows: “5.8CleaningContainers
ContractorshallsteamcleanandrefurbishallCommercialBinsatContractor'sownexpenseevery 6monthsuponrequest.Customersdesiringmorefrequentcleaningmayarrangeadditional cleaningwithContractorataRateestablishedbyCity,includingpickͲup,cleaning,and replacementofBins.
Contractorshallsetasteamcleaningfeeand/oracleanContainerexchangefeeforOrganics MaterialsContainerstoResidentialCustomersrequestingsuchserviceuptotwo(2)timesperyear perOrganicsContainer.”
H.Article5,Section5.11oftheAgreementisherebyamendedasfollows: “5.11.1ReceiptofRecyclableMaterialandOrganicMaterials. Attachment 1.A

11.A-22Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 15
TheContractorshallhaveinplaceorhavearrangementsforanApprovedRecyclableMaterials ProcessingFacilitytoreceiveandacceptalldeliveriesofRecyclableMaterialsfromSingleͲFamily, MultiͲFamilyandCommercialGeneratorsintheCity.Contractorshallhavearrangementsfor anApprovedOrganicMaterialsProcessingFacilitytoProcessSingleͲFamily,MultiͲFamily,and CommercialSourceSeparatedOrganicWaste.

5.11.2StatusofApprovedProcessingFacility(ies).
AnyApprovedProcessingFacilityusedbyContractormustbedesignedandconstructedin accordancewithallapplicableCaliforniaandlocallaws(e.g.,CEQA,CaliforniaCodeof Regulations,etc.).TheApprovedRecyclableMaterialsProcessingFacilityandtheApproved OrganicMaterialsProcessingFacilitymusthaveallpermitsfromFederal,California,regional, CountyandCityagenciesnecessaryforittooperateasanApprovedRecyclableMaterials ProcessingFacilityoranApprovedOrganicMaterialsProcessingFacilityandmustbeinfull regulatorycompliancewithallsuchpermits.
TheApprovedRecyclableMaterialsProcessingFacilityandApprovedOrganicMaterials ProcessingFacilitymustbeauthorizedtoaccept,underitsexistingpermit,andhavesufficient uncommittedcapacitytoaccept,allRecyclableMaterialsand/orOrganicMaterialsdeliveredtoit by,oronbehalfof,ContractorforthetermofthisAgreement.Contractorshallimmediatelynotify CityofanynoticeofbreachordefaultreceivedfromeithertheApprovedRecyclableMaterials ProcessingFacilityortheApprovedOrganicMaterialsProcessingFacility.

5.11.3AlternativeProcessingFacility
IfContractorbecomesunabletodelivertheCity'sRecyclableMaterialstotheMaterialsRecovery Facilityduetocauseswithinitscontrolandwhichcouldhavebeenavoidedbytheexerciseofdue care,theContractorshallarrangeforittobeacceptedatanotherMaterialsRecoveryFacility,in whichcaseContractorshallpayforanyincreasedTransportationcosts,anydifferencesinthefees chargedatsuchMaterialsRecoveryFacilityandthefeesthenineffectunderthisAgreement.If Contractor'sinabilitytodelivertheCity'sRecyclableMaterialstotheMaterialsRecoveryFacilityis notduetocauseswithinitscontrolorwhichcouldhavebeenavoidedbytheexerciseofduecare, thenContractorshallproposealternativeMaterialRecoveryFacilitiesincludingallrelatedcostsand Cityshallhavetherighttoapprovethealternativetobeused.Contractormayproposeachangein RatestocoverthecostsofthealternativeMaterialRecoveryFacilitypursuanttoSection8.4, withouttheregardtofivepercentlimitationsetforthinthatsection.Contractorshallprovidenotice byemailtotheCitywithinfortyͲeight(48)hoursoftheuseofanalternativeProcessingFacility. Contractorshall,keepallexistingpermitsandapprovalsnecessaryforuseoftheApproved ProcessingFacilityinfullregulatorycompliance.Uponrequest,Contractorshallprovidecopiesof facilitypermitsand/ornoticesofviolations(obtainedfromitsProcessingFacilityifnecessary)to CityManager.”
J.Article5oftheAgreementisherebyamendedtoincludethefollowingsubsection: “5.13ProcurementofRecoveredOrganicWasteProducts

5.13.1SB1383Compliance.ToassisttheCityinSB1383compliancerelatedtoorganicwaste productprocurement,ContractorshallmakereasonableeffortstoprovideRNG,power,and CompostorMulchasdescribedbelowtomaximizetheprocurementcredittotheCity. Attachment 1.A

11.A-23Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 16

5.13.2SB1383QualifiedRenewableNaturalGas(SB1383RNG)Vehicles.UnderthisAgreement, theContractorshallmakeabesteffortforallCollectionvehiclestobepoweredbySB1383RNG generatedbyalocalfacilityorpoweredbySB1383RNGthatispurchasedthroughawheeling agreementwithaparty(ies),providedthatthewheelingagreementisforpurchaseofgasderived fromOrganicWastethathasbeenDivertedfromaLandfillandProcessedataninͲvesseldigestion FacilitythatispermittedorotherwiseauthorizedbyTitle14ofCCRtorecoverOrganicWasteand meetstherequirementsof14CCRSection18993.1(h).UponCity’srequest,Contractorshall obtainandprovidetheCitywithawrittencertificationbyanauthorizedrepresentativeofthe publiclyownedtreatmentworksorthewheelingagreementcontractorcertifyingthattheinͲ vesseldigestionfacilityproducestheSB1383RNGconsistentwiththerequirementsof14CCR Section18993.1(h).ContractorshallmaintainrecordsoftheamountofSB1383RNGpurchased andshallreportthisinformationinaccordancewithExhibitD.ContractorshallagreetotheCity’s righttoreportthisSB1383RNGusagetowardtheCity’sfulfilmentofitsannualrecoveredOrganic Wasteproductprocurementtargetinaccordancewith14CCRSection18993.1.

5.13.3Power.TotheextentthatelectricityproducedfromtheApprovedOrganicMaterials ProcessingFacilityqualifiesforCity'sprocurementcreditunderSB1383,Cityshallbeallocatedits proportionalshareofsuchqualifiedelectricityusagebasedontheinboundtonnagedeliveredby CitydividedbythetotalinboundtonnageoftheApprovedOrganicMaterialsProcessingFacility forthatsametimeperiod.

5.13.4CompostGiveͲAwayEvents.Contractorshallmakeavailablefordistributionanannual totalofatleastonethousand(1,000)cubicyardsofCompostforallMemberAgencies,including butnotlimitedtotheCity,utilizingtheApprovedProcessingFacilitytoCityresidentsatno additionalcosttotheCityorCustomersattwo(2)publicevents.Totheextentthatsuch distributionqualifiesforCity'sprocurementcreditunderSB1383,Cityshallbeallocatedits proportionalshareofsuchqualifiedprocurementbasedontheinboundTonnageofOrganic MaterialscollectedbyContractorfromCitydividedbythetotalinboundTonnageoftheApproved OrganicMaterialsProcessingFacilitytowhichContractordeliveredsuchCityTonnageduringthe applicablemeasurementperiodbyeachMemberAgency.Thelocation,date,andtimeofsuch eventsshallbedeterminedbytheCitywithnoticeprovidedtotheContractorwithintwenty(20) BusinessDaysofthedateoftheeventandmaybeheldinconjunctionwithotherCityͲapproved events.ContractorshalldelivertheComposttotheagreedͲuponeventlocationatnocosttoCity. Contractorshallprovideatleastone(1)attendantforatleastsix(6)hoursperevent.” K.Article5oftheAgreementisherebyamendedtoincludethefollowingsubsection: “5.14City’sRighttoPerformService,TaggingofImproperSetͲouts,andProhibitedContainer Contaminants

5.14.1City’sRighttoPerformService.IntheeventContractorfailstoCollect,remove,andDispose ofDiscardedMaterialsonaCustomer’sregularlyscheduledCollectionDay,withintwentyͲfour(24) hoursofarequestfromCityoraCustomertodoso,CitymayCollectsaidDiscardedMaterialsand ContractorshallbeliableforallrelatedexpensesincurredbyCity.Suchexpensesincludebutare notlimitedtoDisposal,administrative,andlegalcosts.ContractorshallreimburseCityforsuch expensesasrequired.

5.14.2CustomerNotices.
A.General.IftheContractorobservestwentypercent(20%)ormoreProhibitedContainer ContaminantsordoesnotCollectanyitemorContainerofDiscardedMaterialsduetoa Attachment 1.A

11.A-24Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 17
Customer’snonͲcompliancewithrulesandregulationsforpropersetͲout,Contractorshall attachaCustomerNotice,subjecttoCity’sapproval,securelytotheitemorContainer specifyingtheidentifiednonͲcomplianceissues.TheCustomerNoticeshallcontain Contractor’sname,telephonenumber,andinformationdescribedbelow. TheCustomerNoticeshall,ataminimum:

1. InformtheCustomerofthereasonfortheCustomerNotice;and

2. Includethedateandtimetheissuewasobserved.
Inaddition,upontheidentificationofProhibitedContainerContaminantsinaCustomer’s ContainerasspecifiedinthisSection,theContractorshallprovidetheCustomerwiththe followinginformationintheCustomerNotice,orthroughanotherformofcommunication suchasmail,eͲmail,textmessage,oroverthephone:

1. InformationontheCustomer’srequirementtoproperlyseparatematerialsintothe appropriateContainers,andtheacceptedandprohibitedmaterialsforCollectionineach Container;

2. InformtheCustomerofthenonͲCollectionofthecontaminatedmaterialsonthisoccasion withinformationthattheContractormayassesscontaminationProcessingfeesand/or maynotCollecttheContainerinthefuture;and,

3. Includephotographicevidenceoftheviolation(s). B.UponidentificationofProhibitedContainerContaminants.IftheContractorCollects contaminatedRecyclableMaterialsand/orOrganicMaterialsContainers,Contractorshall eitherTransportthematerialtotheappropriateApprovedFacilityforProcessing;or, ContractormayCollectthecontaminatedmaterialswiththeSolidWasteandTransportthe contaminatedmaterialstotheApprovedDisposalFacility.ACollectionofcontaminated RecyclableMaterialsorOrganicMaterialswherethematerialsaresenttotheApproved DisposalFacilitymaybemadewithaSolidWasteCollectionvehicle,providedthatthe contaminantsmaysafelyandlawfullybeCollectedasSolidWaste. C.CommunicationswithCustomer.WheneveraContaineratthePremisesofaCustomerisnot Collected,ContractorshallcontacttheCustomeronthescheduledCollectiondayby telephone,email,textmessage,orotherverbalorelectronicmessagetoexplainwhythe ContainerwasnotCollected.WheneveraContainerisnotCollectedbecauseofProhibited ContainerContaminants,aCustomerservicerepresentativeshallcontacttheCustomerto discussandencouragetheCustomertoadoptproperDiscardedMaterialspreparationand separationprocedures.
D.ContractorReturnforCollection.UponrequestfromCustomer,ContractorshallCollect ContainersthatreceivedCustomerNoticesspecifyingnonͲCollectionwithinone(1)Working DayofCustomer’srequest.ContractorshallbillCustomerfortheextraCollectionserviceevent (“extrapickͲup”)attheapplicableCityͲapprovedRatesonlyifContractornotifiesCustomerof thepremiumRateforthisserviceatthetimetherequestismadebyCustomer. E.AssessmentofContaminationProcessingFees.IftheContractorobservestwentypercent (20%)ormoreProhibitedContainerContaminantsandhasissuedaCustomerNoticespecifying Attachment 1.A

11.A-25Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 18
aCollection,theContractormayimposeacontaminationrateapprovedbytheCityforthat Customer’sServiceLevel,ifandonlyifContractorhasinformedtheCustomerofthepotential foraProcessingfeepursuanttothisSection.Theintentofcontaminationfeesistoprovidea behavioraltooltoeducateandpreventCustomersfromplacingSourceSeparatedDiscarded MaterialintotheimproperdesignatedContainer(s).Toensurethatassessmentoffeesistobe usedfortheintendedpurposesandnotasaformofrevenuegeneration,Afterthefirst issuanceofaCustomerNoticefortheobservanceofProhibitedContainerContaminantsinone (1)calendaryear,Contractormayissueafeeoften(10)dollars.Afterthesecondobservance ofProhibitedContainerContaminantsinthesamecalendaryear,Contractormayissueafee oftwenty(20)dollars.AfterthethirdobservanceofProhibitedContainerContaminantsinthe samecalendaryear,Contractormayissueafeeofthirty(30)dollars.Inthefourthandany subsequentobservancesofProhibitedContainerContaminantsinthesamecalendaryear, ContractormayincreasethecontaminationProcessingfeebyten(10)dollarincrementsand mayCollectthecontaminatedmaterialswiththeSolidWasteandTransportthecontaminated materialstotheApprovedDisposalFacility,providedthatthecontaminantsmaysafelyand lawfullybeCollectedasSolidWaste.
F.SuspensionofContaminationProcessingFeeProgram.Contractoragreesthatcontamination feesshallnotexceedonepercent(1%)ofContractor’sGrossReceiptsinanycalendarquarter. Intheeventthatcontaminationfeesexceedonepercent(1%)ofContractor’sGrossReceipts inanycalendarquarter,theassessmentofcontaminationfeesshallbesuspendedimmediately andindefinitelypendingaprogramassessmentbytheCityandContractor.Uponprogram suspensionorattherequestoftheCityatanytimeduringtheTermoftheAgreement,City andContractorshallmeetandconferregardingtheapplicationandeffectivenessof contaminationfeesinaccomplishingthebehaviorchange.Iftheprogramissuspendeddueto excessiverevenuegeneration,theCitymayrequireContractortoeither:i)modifytheprogram parameters;ii)modifytheamountofthecontaminationfee;or,iii)returntotheCityanyfunds generatedbythecontaminationfeewhichexceedonepercent(1%)ofContractor’sGross Receiptsforagivenperiodoftime.
G.CityActionsuponIdentificationofProhibitedContainerContaminants.TheCityorits designeeshallperformSB1383activitiesrequiredfortheidentificationofProhibited ContainerContaminantswhichincludesbutisnotlimitedto,recordkeeping,provisionof educationalnoticesandreporting.”
Article6.OtherServices:Billing,Reporting,RecordͲKeepingandPublicEducation A.Article6,Section6.8oftheAgreementisherebyamendedtothefollowing: “6.8CustomerInformation
ContractorshallprepareandkeepcurrentaflieracceptabletotheCitywhichsummarizessolid wasteregulations,allservicesprovidedbyContractor,solidwastecollectionanddisposalrates, telephonenumbers,specialcollectionevents,collectionschedules,complaintprocedures,and otherpertinentinformation.Contractorshallhavecopiesofthisflieravailableatalltimesin Contractor'soffice;shalldistributecopiestoallnewcustomers;shallannuallymailcopiestoall ofitscurrentcustomers;andshallmailupdatedcopiestoallcustomersasnotificationof changesinserviceorrates,priortosuchchanges.
ContractorshallmaintainCustomercontactdata,Customerservice,accounting,statistical, operational,programmatic,andotherrecords,andassociateddocumentationrelatedtoits Attachment 1.A

11.A-26Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 19
performanceasshallbenecessarytoprovidedetailedandasaccuratereportsunderthis Agreement,andtodemonstratecompliancewiththeAgreementandApplicableLaw.” B.Article6,Section6.10oftheAgreementisherebyamendedtothefollowing: “6.10PublicEducation
TheCityshallberesponsiblefordesigning,implementing,andconductingapubliceducationand outreachprogram.TheCity’spubliceducationandoutreachstrategyshallfocusonimproving Generatorunderstandingofthebenefitsofandopportunitiesforsourcereduction,Reuse,and LandfillDisposalreductionandsupportingcompliancewithApplicableLawsandregulations, including,butnotlimitedtoAB939,AB341,AB1826,AB876,AB901,SB1383,andother currentorfutureFederal,State,orlocalregulations,asamended.Thecumulativeintended effectoftheseeffortsistoreduceeachGenerator’sSolidWasteand,ultimately,DisposalofSolid Waste,andContractoragreestosupportandnotundermineorinterferewithsuchefforts. Contractoracknowledgesandagreesthateducationandpublicawarenessarecritical,keyand essentialelementsofanyeffortstoachieveAB939andotherApplicableLawrequirements. ContractorshallcooperateandcoordinatewiththeCityonpubliceducationactivitiesto minimizeduplicative,inconsistent,orinappropriatelytimededucationcampaigns.Accordingly, ContractoragreestotakedirectionfromCitytoexploitopportunitiestoexpandpublicand customerknowledgeconcerningneedsandmethodstoreduce,reuseandrecyclesolidwasteand tocooperatefullywithCityinthisregard.
Contractorshallmaintainitsownprogramofprovidinginformationrelevanttobillingand solidwasteservices,issuesandneedswithitsbills.Contractorshallalsoincludeincustomerbills additionalinformation,includinginformationonrecyclingprograms,asdirectedbytheCity. Contractorshallbearalllaborcostswithrespecttoinsertingpubliceducationmaterialswiththe billings.CityshallbearanyadditionalpostageexpenseresultingfromtheCity'sinsertsand shallbearotherexpensesrelatedtotheinsertstotheextentsaidexpensesareclearlyinexcess oftheContractor’snormalbillingcosts.Contractoragreestoinsertanddistributebrochures, newsletters,orotherinformationdevelopedbytheCity,asinsertsinContractor’sCustomer invoicesatnoadditionalchargetotheCity.UptoletterͲsizedbillinsertsshallbedesignedand producedbytheCity,withreviewandcommentbyContractor,andfinalapprovalbytheCity. Annually,Contractorshallberesponsibleforprintingthebillinserts.ForCustomersreceiving electronicbills,Contractoragreestodistributebrochures,newsletters,orotherinformation developedbytheCityasattachmentstoCustomerinvoicesatnoadditionalchargetotheCity. Contractorshallprovideelectronicbillinserts(orseparateemailattachments)toCustomerswho arebilledelectronically,andpaperbillinsertstoCustomerswhoreceivepaperbills.Electronic billinserts/attachmentsmustbereadilyavailablefortheCustomertoviewuponreceiptofthe invoice(attachmentsshallnotbeprovidedaslinks).UponCity’srequestforsuchinserts, ContractorshallcomplywithsuchrequestduringitsnextbillingcycleforthetargetedCustomer group.Contractorshallperformthisservicewithnoadditionalrequirementforcompensation. AllpubliceducationmaterialsshallbeapprovedinadvancebytheCity. ContractorshallobtainapprovalfromtheCityonallContractorͲprovidedpubliceducation materialsoutsideoftheCity’seducationplan,including,butnotlimitedtoprint,radio, television,orinternetmediabeforepublication,distribution,and/orrelease.Alleducationand outreachmaterialsdetailedinthisSectionshallbeprovidedinattheveryleastEnglishand Spanish,astocomplywithSB1383andotherApplicableLaw.Cityshallhavetherighttorequest thatContractorincludeCityidentificationandcontactinformationonpubliceducationmaterials Attachment 1.A

11.A-27Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 20
andapprovalofsuchrequestsshallnotbeunreasonablywithheld. AtthedirectionoftheCity,ContractorshallparticipateinandpromoteAB939,AB341,AB 1826,SB1383,andothercurrentorfutureFederal,State,orlocalregulations,asamended,and otherSolidWastemanagementtechniquesatcommunityeventsandlocalactivities.Such participationwouldnormallyincludeproviding,withoutcost,educationalandpublicity informationpromotingthegoalsoftheCity'sSolidWasteprogram. NotlessthanonceperyearduringeachRateYear,Contractorshallprepareanddistributeto eachGeneratorintheCityamailerthatincludesinformationspecifiedin14CCRSection 18985.1(a).SuchmailershallbedistributedbyContractortoallResidentialandCommercial mailingaddressesincludingindividualMultiͲFamilyDwellingUnits.Contractorshallalsomake thisnoticeavailableinanelectronicformatthroughtheContractor’swebsite.” C.Article6,Section6.11oftheAgreementisherebyamendedtothefollowing: “6.11RecordsRetention
Contractorshallmaintaintheaboverecords,reportsanddatasetforthinthisArticlefortheTerm ofthisAgreementplusfive(5)yearsafteritsexpirationorearliertermination.Recordsanddata shallbeinchronologicalorderandorganizedformthatiseasilyandeasilyinterpretedtofacilitate flexibleuseofdatatostructurereports.Contractor’sreportsshallbestoredinonecentral location,physicalorelectronic,thatcanbereadilyaccessedbyCity.Contractoragreestomake allsuchrecords,reportsanddataavailableforinspectionbyCityorCity'sauthorized representativesinatimelymannernottoexceedten(10)BusinessDaysofarequest,suchthat theCityorCity’sauthorizedrepresentativemayfulfillitsobligationsunderApplicableLaw including,butnotlimitedto,AB939,AB341,AB1826,AB876,AB901,SB1383,andothercurrent orfutureFederal,State,orlocalregulations,asamended.” D.Article6oftheAgreementisherebyamendedtoincludethefollowingsubsection: “6.12Waivers
TheCityoritsdesigneemaygrantwaiversdescribedinthisSectiontoCommercialorMultiͲ FamilyGeneratorsthatimpactthescopeofContractor’sprovisionofserviceforthose Customers;provided,theGeneratorshallcontinuetosubscribewithContractorforfranchised CollectionservicestotheextentsuchservicesarenotwaivedbytheCity.Waiversissuedshallbe subjecttocompliancewithSB1383requirements,pursuantto14CCRSection18984.11,orother requirementsspecifiedbytheCity.

6.12.1GeneratorWaivers.
a. DeMinimisWaivers.TheCityoritsdesigneemaywaiveaMultiͲFamily’s,Commercial Business’s,oritsPropertyOwner’sobligationtocomplywithsomeoralloftheSource SeparatedRecyclableMaterialsandOrganicMaterialsrequirementssetforthinthis Agreement,SB1383Regulations,andapplicableCityMunicipalCodeiftheMultiͲFamily, CommercialBusiness,oritsPropertyOwnerprovidesdocumentation,ortheCityhas evidencedemonstratingoneofthefollowingdeminimisconditions: i. TheMultiͲFamily’sorCommercialBusiness’stotalSolidWasteCollectionservice istwo(2)cubicyardsormoreperweek,andOrganicMaterialssubjectto Collectioncompriseslessthantwenty(20)gallonsperweek,perapplicable Container,oftheMultiͲFamily’sorCommercialBusiness’stotalwaste;or, Attachment 1.A

11.A-28Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 21
ii.TheMultiͲFamily’sorCommercialBusiness’stotalSolidWasteCollectionservice islessthantwo(2)cubicyardsperweek,andOrganicMaterialssubjectto Collectioncompriseslessthanten(10)gallonsperweek,perapplicable Container,oftheMultiͲFamily’sorCommercialBusiness’totalwaste. b.SpaceConstraint.TheCityoritsdesigneemaywaiveaMultiͲFamily’s,Commercial Business’s,oritsPropertyOwner’sobligationtocomplywithsomeoralloftheSource SeparatedRecyclableMaterialsorOrganicMaterialsCollectionservicerequirementsset forthinthisAgreement,SB1383Regulations,and/orasrequiredintheMunicipalCode, intheeventthattheGeneratorqualifiesforaspaceconstraintwaiverundertheCity’s MunicipalCode.

6.12.3WaiverRequests.Generatorsmaysubmitrequestsfordeminimiswaiversandphysical spacewaiverstotheCity.IfaGeneratorsubmitsarequestforawaivertotheContractor,the ContractorshallrefertheGeneratortotheCity.UponrequestoftheCitytheContractorshall supporttheCityinthewaiverreviewprocessbyprovidingrequestedCustomerinformation.If theCityoritsdesigneegrantsawaivertoaGenerator,theCityshallnotifytheContractorand ContractorshallupdatetheCustomer’sinformationandServiceLevel.” Article7.PaymentstoCity
A.Article7,Section7.2oftheAgreementisherebyamendedasfollows: “7.2AB939/SB1383ReimbursementFee
IfrequestedbyCity,ContractorshallpayanAB939/SB1383reimbursementfeeeachmonth,to bespecifiedannuallybytheCity,andinadditioniftheSanLuisObispoIntegratedWaste ManagementAuthority“IWMA”currentlyimplementsanAB939,SB1383reimbursement,or SolidWasteManagementfee,ContractorshallpaythatfeedirectlytotheIWMA.Saidfeeshall beanallowablecostinContractor’srateapplication.AllAB939fees,SB1383fees,orSolidWaste ManagementfeespaidtotheCityorIWMAshallbeconsideredapassthroughcostforpurposes ofratesetting,andassuchiftheCityorIWMAchangesthesefees,theContractor'sratesshallbe adjustedaccordinglysubjecttoallApplicableLawsandregulations.TheCityortheIWMAshall havetherighttoestablishandadjusttheAB939,SB1383,orSolidWasteManagementfeeatany time,providedthatanychangesareconsideredapassthroughcostforthepurposesofrate setting,atthetimeofthechangeintheSolidWasteManagementfee.” Article9.Records,ReportsandInformation,Studies,andHearingRequirements A.Article9,Section9.1oftheAgreementisherebyamendedasfollows:

9.1 Records
Contractorshallmaintainrecordsrequiredtoconductitsoperations,tosupportrequestsitmaymaketo City,andtorespondtorequestsoftheCity,andtohelpCityfulfillitsobligationsunderApplicableLaw including,butnotlimitedto,AB939,AB341,AB1826,AB876,AB901,SB1383,andothercurrentor futureFederal,Statororlocalregulations,asamended.Adequaterecordsecurityshallbemaintainedto preserverecordsfromeventsthatcanbereasonablyanticipatedsuchasafire,theftandearthquake. Electronicallymaintaineddataandrecordsshallbeprotectedandanadequatebackupsystemshallbe providedforsuchdataandrecords.Theprotectionandbackupsystemsshallbesubjecttoapprovalby theCity.
ThefollowingrecordsshallbemaintainedfortheCityinformanddetailsatisfactorytotheCity,relating Attachment 1.A

11.A-29Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 22
to:
x Customerservicesandbilling;
x WeightofSolidWaste,especiallyasrelatedtoreducingandDivertingSolidWaste.Informationis tobeseparatedbykindofaccount;
x SpecialannualcleanͲupeventresults;
x Routes;
x Facilities,equipmentandpersonnelused;
x Facilitiesandequipmentoperations,maintenanceandrepair; x ProcessingandDisposalofSolidWaste;
x Complaints;
x MissedpickͲups;and,
x AnyotherrecordsasspecifiedinExhibitD.
ContractorshallmaintainrecordsofTransfer,DiversionandDisposalofallSolidWasteCollectedinthe CityfortheperiodofthisAgreementandallextensionstothisAgreementorsuccessorAgreements.In theeventContractordiscontinuesprovidingSolidWasteservicestoCity,Contractorshallprovideall recordsofDiversionandDisposalofallSolidWasteCollectedwithintheCitytoCitywithinthirty(30)days ofdiscontinuingservice.Recordsshallbeinchronologicalorder,andorganizedinaformreadilyandeasily interpreted.
Recordsforotherprogramsshallbetailoredtospecificneeds.Ingeneral,theyshallinclude: x Plans,tasks,andmilestones.
x Accomplishmentsintermssuchasdates,activitiesconducted,quantitiesofproductsused, producedordistributed,andnumbersofparticipantsandresponses. B.Article9,Section9.3oftheAgreementisherebyamendedasfollows: “9.3ReportFormatsandSchedule
Recordsshallbemaintainedinformsandbymethodsthatfacilitateflexibleuse ofdatacontainedinthemtostructurereports,asneeded.Reportsare intendedtocompilerecordeddataintousefulformsofinformationthatcanbe usedto,amongotherthings:
x Determineandsetrates,andevaluatethefinancialefficacyofoperations; andobjectives;and
x Evaluatepastandexpectedprogresstowardsachievinggoalsand x Determineneedsforadjustmenttoprograms;and
x Evaluatecustomerserviceandcomplaints
TheCitymayatnocosttoitselfrequestthatContractorprovidesuchadditional informationinthereportssetforthbelowastheCitydeemsnecessaryor appropriatetomeetitsneeds,includingprovisionofAB939reportinformation. ContractorshallsubmitallreportstotheCityelectronicallyviaeͲmailusing softwareacceptabletotheCity.TheCityreservestherighttorequirethe Attachment 1.A

11.A-30Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 23
Contractortomaintainrecordsandsubmitthereportsrequiredhereinthrough useoftheCityͲselectedwebͲbasedsoftwareplatformand/orMicrosoftExcel spreadsheet,attheContractor’sexpense.Monthlyreportsshallbesubmitted withinten(10)calendardaysaftertheendofthereportmonth.Quarterlyreports shallbesubmittedwithinfifteen(15)calendardaysaftertheendofthequarter. QuartersendonNovember30,February28,May31,andAugust31.Annual reportsshallbesubmittednolaterthanfortyͲfive(45)calendardaysafterthe endofeachcalendaryear.
Allreportsshallbesubmittedto:
CityManager
CityofPismoBeach
760MattieRoad
PismoBeach,CA93449”
C.Article9,Section9.4oftheAgreementshallherebybeamendedasfollows: “9.4MonthlyReports
Theinformationlistedshallbetheminimumreportedforeachservice: x DiscardedMaterials,Collected,Transferred,DivertedandDisposedof,by sector(Commercial,industrial,Residential)ofGeneratorͲCollectedby Contractor,inTons,bymonth.
x Complaintsummary,formonthandcumulativeforreportyear,asabove. SummarizedbynatureofComplaints.
x Narrativesummaryofproblemsencountered,andactionstakenwith recommendationsfortheCity,asappropriate.
x AlldataandinformationdescribedinExhibitD.”
D.Article9,Section9.5oftheAgreementisherebyamendedasfollows: “QuarterlyreportsshallbeformattedandsubmittedasdescribedinExhibitD.” E.Article9,Section9.7isherebyaddedtotheAgreementasfollows: “9.7AdditionalReports
AB901Reporting.AttheCity’soption,theCitymayrequirethatContractorprovidetheCitywith theaggregatetonnagedatarelatedtoAB901reportingthattheCityneedsforitsSB1383 reporting,totheextentavailabletoContractorwithinfive(5)BusinessDaysofCityrequest,or mutuallyagreedtime.AttheCity’soption,theCitymayreviewspecificCustomerinformation; however,CityshallnotbepermittedtomakecopiesortakerecordsspecifictoCustomer information.“
Article12.Default,RemediesandLiquidatedDamages
A.Article12,Section12.3oftheAgreementisherebyamendedtothefollowing: “12.3LiquidatedDamages
A.General.ThePartiesfindthatasofthetimeoftheexecutionofthisAgreement,itisimpractical, ifnotimpossible,toreasonablyascertaintheextentofdamageswhichshallbeincurredbyCity asaresultofabreachbyContractorofitsobligationsunderthisAgreement.Thefactorsrelating Attachment 1.A

11.A-31Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 24
totheimpracticabilityofascertainingdamagesinclude,butarenotlimitedto,thefactthat:(i) substantialdamageresultstomembersofthepublicwhoaredeniedservicesordeniedqualityor reliableservice;(ii)suchbreachescauseinconvenience,anxiety,frustration,anddeprivationof thebenefitsoftheAgreementtoindividualmembersofthegeneralpublicforwhosebenefitthis Agreementexists,insubjectivewaysandinvaryingdegreesofintensitywhichareincapableof measurementinprecisemonetaryterms;(iii)thatexclusiveservicesmightbeavailableat substantiallylowercoststhanalternativeservicesandthemonetarylossresultingfromdenialof servicesordenialofqualityorreliableservicesisimpossibletocalculateinprecisemonetary terms;and,(iv)theterminationofthisAgreementforsuchbreaches,andotherremediesare,at best,ameansoffuturecorrectionandnotremedieswhichmakethepublicwholeforpast breaches.
B. ServicePerformanceStandards;LiquidatedDamagesforFailuretoMeetStandards.TheParties furtheracknowledgethatconsistent,reliableCollectionservicesareofutmostimportancetoCity andthatCityhasconsideredandreliedonContractor'srepresentationsastoitsqualityͲofͲservice commitmentinawardingtheAgreementtoit.ThePartiesrecognizethatsomequantified standardsofperformancearenecessaryandappropriatetoensureconsistentandreliableservice andperformance.ThePartiesfurtherrecognizethatifContractorfailstoachievetheperformance standardsorfailstosubmitrequireddocumentsinatimelymanner,Cityanditsresidentsand businesseswillsufferdamages,andthatitis,andwillbe,impracticalandextremelydifficultto ascertainanddeterminetheexactamountofdamageswhichCitywillsuffer.Therefore,without prejudicetoCity’srighttotreatsuchnonͲperformanceasaneventofdefaultunderthisSection, thePartiesagreethattheLiquidatedDamageamountsestablishedinthisSectionrepresenta reasonableestimateoftheamountofsuchdamagesconsideringallofthecircumstancesexisting ontheEffectiveDateofthisAgreement,includingtherelationshipofthesumstotherangeof harmtoCitythatreasonablycouldbeanticipatedandtheanticipationthatproofofactual damageswouldbecostlyorimpractical.

Contractoragreestopay(asLiquidatedDamagesandnotasapenalty)theamountssetforthin thePerformanceStandardsandLiquidatedDamages,Article12. BeforeassessingLiquidatedDamages,CityshallgiveContractornoticeofitsintentiontodoso. Thenoticewillincludeabriefdescriptionoftheincident(s)andnonͲperformance.Citymayreview (andmakecopiesatitsownexpense)allinformationinthepossessionofContractorrelatingto incident(s)and/ornonͲperformance.Citymay,withinten(10)BusinessDaysafterissuingthe notice,requestameetingwithContractor.CitymaypresentevidenceofnonͲperformancein writingandthroughtestimonyofitsemployeesandothersrelevanttotheincident(s)andnonͲ performance.CityManagerwillprovideContractorwithawrittenexplanationoftheir determinationoneachincident(s)andnonͲperformancepriortoauthorizingtheassessmentof LiquidatedDamagesunderthisSection.ThedecisionofCityshallbefinal,andContractorshall notbesubjectto,orrequiredtoexhaust,anyfurtheradministrativeremedies. CitywishestoestablishstandardsofperformanceundertheAgreementineachofthe “PerformanceAreas”listedbelow.TheCityManagermaymonitorContractor’sperformancein eachofthoseareasbasedonthe“SpecificPerformanceMeasures”withinthatperformancearea. IntheeventthattheCityManagerdeterminesthatContractorhasfailedtomeettheperformance standardestablishedforany“SpecificPerformanceMeasure”,theCitymayassessLiquidated DamagespursuanttothisSectionoftheAgreement.LiquidatedDamages,ifassessed,shallonly Attachment 1.A

11.A-32Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 25
beassessedforthenumberofevents,days,orothermeasureinexcessoftheacceptable performancelevel.
Contractoragreestopay(asliquidateddamagesandnotasapenalty)the amountssetforthbelow:
CollectionReliabilityandQuality
Foreachfailureoverfive(5)annuallytocommenceservicetoanew customeraccountwithinseven(7)daysafterorder:
$150
ForeachfailureovertwentyͲfour(24)eachcalendaryearto CollectSolidWaste,RecyclablesorOrganicMaterials,whichhas beenproperlysetoutforCollection,fromanestablished customeraccountonthescheduledCollectiondayandnot collectedwithin24hoursafternoticeofmissedpickͲup: $150
ForeachfailuretoCollectSolidWaste,Recyclables
orOrganicMaterials,whichhavebeenproperlysetoutfor Collection,
fromthesamecustomerontwo(2)consecutivescheduledpickup days:
$150
Foreachoccurrenceoverfive(5)annuallyofdamagetoprivate property:
$250
Foreachoccurrenceoverten(10)annuallyofdiscourteous behavior:
$250
Foreachfailureoverten(10)annuallytocleanupDiscarded Materials,spilledbyContractorfromContainers:
$150
Foreachoccurrenceoverfive(5)annuallyofCollectingDiscarded Materials,duringunauthorizedhours:
$250
Foreachfailuretorespondtoacustomercomplaintwithin twentyͲfour(24)workinghours:
$100

TimelinessofSubmissionstoCity
REPORTS.AnyreportshallbeconsideredlateuntilsuchtimeasCityreceivesacorrectandcomplete report.Foreachcalendardayareportislate,thedailyassessmentshallbe: MonthlyReports:Foreachinfraction
QuarterlyReports:Foreachinfraction
AnnualReports:Foreachinfraction

$25perday
$25perday
$50perday
UseofUnauthorizedFacilities.Foreachindividualoccurrenceof deliveringDiscardedMaterialstoaFacilityotherthanan Approved/DesignatedFacility(ies)foreachDiscardedMaterial typeunderthisAgreement.

$0forfirstfive(5)failures;$1,000
pereachsubsequentfailure

FailuretoImplementthreeͲContainerSystem.Foreach
occurrenceoffailingtoprovideCustomerswiththethreeͲ ContainersystemrequiredbyandcompliantwithSection5.2and

5.4excludingGeneratorsandCustomersgrantedwaivers pursuanttoSection6.12ofthisAgreementandexcluding GeneratorsandCustomersthatdemonstratecompliancewith $100/GeneratororCustomer/
occurrence/Dayuntil
complianceachieved

Attachment 1.A

11.A-33Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 26
RecyclingandOrganicWasteSelfͲHaulingrequirementspursuant toapplicableCityMunicipalCodeand14CCRDivision7,Article 12,Article7.

FailuretoComplywithContainerLabelingandColors.Foreach occurrenceofContractor’sfailuretocomplywithContainer labelingandcolorrequirementspursuanttoSection5.6ofthis Agreement.

$180/Container/occurrence

FailuretoPerformPublicEducationandOutreach.Foreach failuretoperformanyindividualeducationandoutreachactivity asrequiredandinthetimeframespecifiedbythisAgreement. 
$180/occurrence

FailuretoAllowAccesstoRecords.Foreachfailuretoprovide accesstorecordsincompliancewithandinthetimeframe specifiedinthisAgreement.

Failuretoprovideaccessto
records:$120/day

FailuretoIssueCustomerNotices.ForeachfailureofContractor Collectionpersonneltoissuecontaminationnoticesandmaintain documentationofissuanceasrequiredbySection5.14ofthis Agreement.
$100
/Contractor
Route/Day
ImproperFeeIssuance.Foreachfeethatisissuedtoagenerator withoutpriorauthorizationfromCityunderthisagreement. $100
/Customer/Day

Amount.TheCityManagerorhis/herdesigneemayassessliquidateddamagesforeachcalendardayor event,asappropriate,thatContractorisdeterminedtobeliableinaccordancewiththisAgreementin theamountsspecifiedinthisSectionsubjecttoannualadjustmentdescribedabove. Article13.OtherAgreementsoftheParties
A.Article13,Section13.6oftheAgreementisherebyamendedasfollows: 
“13.6Subcontracting.ExceptasapprovedinwritingbytheCity,Contractorshallnotenterinto anagreementtohaveanotherPersonperformCollection,Transportation,orProcessingof RecyclableMaterials,OrganicMaterialsorSolidWasteserviceswithoutthepriorwritten consentofCityManager.ContractormustobtainwrittenagreementswithProcessing Subcontractors,includingtheApprovedOrganicMaterialsProcessingFacility,totheFacility’s capacitytoProcessDiscardedMaterials.IftheContractorplanstoengageotheraffiliatedor relatedpartyentitiesintheprovisionofservices,ContractorshallprovideCityManagerandCity withthirty(30)dayswrittennotificationofitsplansandprovideanexplanationofanypotential impactsrelatedtothescope,quality,timeliness,orcostofprovidingservicesunderthis Agreement.AllinsurancedocumentsmustbereviewedandapprovedbytheCity’sRisk ManagerpriortoCityacceptance.ContractorshallrequirethatallSubcontractorsfileinsurance certificateswiththeCity,nameCityasanadditionalinsured,andcomplywithallmaterialterms ofthisAgreement.ContractorshallundertaketopayCityitsreasonableexpensesforattorney's feesandinvestigationcostsnecessarytoinvestigatethesuitabilityofanyproposed subcontractor,andtoreviewandfinalizeanydocumentationrequiredasaconditionfor approvinganysuchsubcontractingagreement.”
Attachment 1.A

11.A-34Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 27
ExhibitD.RecordkeepingandReporting
A.ExhibitD,RecordkeepingandReporting,isherebyaddedtothisagreementasfollows:

EXHIBIT D

RECORD KEEPING AND REPORTING
D.1 General
Contractorshallmaintainsuchaccounting,statistical,andotherrecordsrelatedtoitsperformance underthisAgreementasshallbenecessarytodevelopthereportsrequiredbythisAgreementorCity MunicipalCode.Contractoragreestoconductdatacollection,informationandrecordkeeping,and reportingactivitiesneededtocomplywithApplicableLawsandregulationsandtomeetthereporting andDiscardedMaterialsCollection,Processing,andDisposalprogrammanagementneedsoftheCity.At thewrittendirectionorapprovalofCity,therecordsandreportstobemaintainedandprovidedby ContractorinaccordancewiththisExhibitandotherArticlesoftheAgreementmaybeadjustedin number,format,andfrequency,ifrequiredtocomplywithStateorFederalregulatoryorreporting requirements.
InformationfromContractor’srecordsandreportscanbeusedto,amongotherthings:

1.DetermineandsetRatesandevaluatethefinancialefficacyofoperations;

2.EvaluatepastandexpectedprogresstowardachievingtheContractor’sLandfillDisposal reductionorDiversiongoalsandobjectives;

3.Provideconciseandcomprehensiveprograminformationandmetricsforuseinfulfilling reportingrequirementsunderApplicableLaw;

4.Determineneedsforadjustmenttoprograms;

5.EvaluateCustomerserviceandComplaints;and,

6.DetermineCustomercompliancewithAB341,AB1826,andSB1383statutesand correspondingregulations;and,anysubsequentStateͲmandatedlandfillDisposalreduction, Recycling,recovery,orDiversionstatutes,regulations,orotherrequirements. D.2 Record Keeping
A.General.ContractorshallmaintainCustomercontactdata,Customerservice,accounting, statistical,operational,andotherrecordsrelatedtoitsperformanceasshallbenecessaryto providereportingrequiredbythisAgreementandApplicableLawandtodemonstrate compliancewiththisAgreementandApplicableLaw(suchas,butnotlimitedto,AB939,AB 341,AB1826,AB876,AB901,andSB1383statutesandcorrespondingregulations). RecordkeepingandreportingrequirementsspecifiedinthisAgreementshallnotbe consideredacomprehensivelistofreportingrequirements.Inparticular,thisExhibitis intendedtohighlightthegeneralnatureofrecordsandreportsandtheirminimumcontent andisnotmeanttocomprehensivelydefinethescopeandcontentoftherecordsand reportsthatContractorisrequiredtomaintainandreportbyApplicableLaworthis Agreement.UponwrittendirectionorapprovalofCity,therecordsandreportsrequiredby Attachment 1.A

11.A-35Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 28
ContractorinaccordancewiththisandotherArticlesoftheAgreementshallbeadjustedin number,format,orfrequency.
Contractorshallmaintainadequaterecords,andcorrespondingdocumentation,of informationrequiredbythisExhibit,suchthattheContractorisabletoproduceaccurate monthly,quarterly,andannualreports,andisabletoproviderecordstoverifysuchreports. ContractorwillmaketheserecordsavailableandprovidetotheCityanyrecordor documentationnecessaryfortheCitytofulfillobligationsunderApplicableLawincluding, butnotlimitedto,AB939,AB341,AB1826,AB876,AB901,andSB1383statutesand correspondingregulations;and,othercurrentorfutureFederal,State,orlocalstatutesand regulations,asamended.UponrequestbytheCity,Contractorshallprovideaccessto Contractor’srequestedrecordsinatimelymanner,nottoexceedten(10)BusinessDays fromthetimeofCity’srequesttoContractor.
B.RecordRetentionandSecurity.Recordsshallbemaintainedinformsandbymethodsthat facilitateflexibleuseofdatacontainedinthemtostructurereports,asneeded,pursuantto thisExhibit.Contractor’srecordsshallbestoredinonecentrallocation,physicalor electronic,thatcanbereadilyaccessedbyContractor.Cityreservestherighttorequirethe ContractortomaintaintherecordsrequiredhereinthroughtheuseofaCityͲselectedwebͲ basedsoftwareplatform,atContractor’sexpense.UnlessotherwiserequiredinthisExhibit, ContractorshallretainallrecordsanddatarequiredtobemaintainedbythisAgreementfor theTermofthisAgreementplusfive(5)yearsafteritsexpirationorearliertermination. Recordsanddatashallbeinchronologicalandorganizedformandreadilyandeasily interpreted.Contractorshallmaintainadequaterecordsecuritytopreserverecordsfrom eventsthatcanbereasonablyanticipatedsuchasafire,theft,andanearthquake. ElectronicallymaintaineddataandrecordsshallbeprotectedandbackedͲup.Totheextent thatContractorutilizesitscomputersystemstocomplywithrecordkeepingandreporting requirementsunderthisAgreement,Contractorshall,onamonthlybasis,saveallsystemͲ generatedreportssupportingthoserecordkeepingandreportingrequirementsinastatic formatinordertoprovideanaudittrailforalldatarequired. C.CompilationofInformationforStateLawPurposes.Contractorshallmaintainaccurate recordsforitsoperation,including,butnotlimitedto,DiscardedMaterialsquantities CollectedandquantitiesTransportedtoorTransferredtoeachApprovedFacility,listed separatelybymaterialtype,Customertype,andFacility.Recordsshallbemaintainedinsuch formbymethodsthatfacilitatetheuseofdatafortheproductionofreportsasneeded. ContractorwillmaketheserecordsavailableandprovidetotheCity,anyrecordor documentationnecessaryfortheCitytofulfillobligationsunderApplicableLawincluding, butnotlimitedto,AB939,AB341,AB1826,AB876,AB901,AB1595,andSB1383statutes andcorrespondingregulations;and,othercurrentorfuturelocal,FederalorStatestatutes andregulations,asamended.
D.3 Reporting
D.3.1General
A.GeneralPurpose.Reportsareintendedtocompilerecordeddataintousefulformsof informationthatcanbeusedbytheCity.AllreportsshallbeadequatetomeetCity’scurrent Attachment 1.A

11.A-36Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 29
andfuturereportingrequirementstoCalRecycle,includingAB939,AB341,AB1826,andSB 1383statutesandcorrespondingregulations,oranyotherStateorFederalagencystatutes andregulationsthroughouttheTermofthisAgreement. B.FailuretoReport.FailureofContractortocomplywiththereportingrequirementsasset forthinthisSectionmayresultinanassessmentofLiquidatedDamagesinaccordancewith theLiquidatedDamagesprovisioninSection12.3ofthisAgreement.Contractor’srepeated failuretosubmitreports,and/orfailuretosubmitreportsontime,maybedeemedanevent ofdefaultandmayresultintheterminationoftheAgreementatthediscretionoftheCity Manager,inaccordancewithArticle12ofthisAgreement. C.ReportFormat.ContractorshallsubmitallreportstotheCityelectronicallyviaeͲmailusing softwareacceptabletotheCity.TheCityreservestherighttorequiretheContractorto maintainrecordsandsubmitthereportsrequiredhereinthroughuseoftheCityͲselected webͲbasedsoftwareplatformand/orMicrosoftExcelspreadsheet,attheContractor’s expense.
D.SubmittalProcess.AllreportsshallbesubmittedtotheCity,DepartmentofPublicWorks, SolidWastePlanningandRecyclingProgramandtheDepartmentofEnvironmentalHealth LocalEnforcementAgencyorasdirectedbytheCityManager/Director.Reportsshallbe submittedelectronicallyviaemailoruploadedtoadocumentsharingplatformagreedupon bytheParties.CityreservestherighttorequiretheContractortomaintainrecordsand submitthereportsrequiredhereinthroughuseofaCityͲselectedwebͲbasedsoftware platform,attheContractor’sexpense.
Monthlyreportsshallbesubmittedwithinten(10)calendardaysaftertheendofthereporting month;quarterlyreportshallbesubmittedwithinfifteen(15)calendardaysaftertheendofthe quarter;andannualreportsshallbesubmittedwithinfortyͲfive(45)daysaftertheendofthe reportingyear.
D.3.2MonthlyReports
MonthlyreportsshallbesubmittedbyContractortoCityandshallincludethefollowinginformation pertainingtothemostrecentlycompletedcalendarmonth.Inaddition,eachmonthlyreportshall includeayearͲtoͲdatesummarypagethatincludesthedatasubmittedfromthemonthlyreport(s) submittedinthecalendaryearpriortothesubmittalofthecurrentmonthlyreport.Contractorshall reporttheinformationincludedinthefollowingsubsections. A.TonnageReport

1.ContractorshallreportthetotalquantitiesinTonsofDiscardedMaterialsCollected, Transferred,Processed,andDisposedbytheContractor,allofwhichshallbebasedon actualcertifiedscaleweightsforeachload,ifavailable,orsimilarlyaccuratemethodology pursuanttoweighingprotocol.Tonnageshallbereportedseparatelyby: a.Materialtype,whichshallinclude,ataminimum,separatereportingofSource SeparatedRecyclableMaterials,SourceSeparatedOrganicMaterials,SolidWaste,and anyothertypeofDiscardedMaterialseparatelyCollectedbyContractor(including,but notlimitedto:BulkyItems,usedoil,mixedC&D,dirt,rock,metals,cardboard,wood waste,salvageablematerials,etc.);
b.Customer/sectortype(SingleͲFamily,MultiͲfamily,CommercialRollͲoff,C&D);and, Attachment 1.A

11.A-37Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 30
c.ApprovedFacilityandFacilitytype.

2.ReportResiduelevelandTonnageforallDiscardedMaterialsProcessed,listedseparatelyby materialtypeCollectedandApprovedFacility(ies)used.

3.SourceSeparatedRecyclableMaterialsTonnageMarketed,bycommodity,andincluding averagecommodityvalueforeach,andProcessingResidueTonnageDisposed,listed separatelybymaterialtypeCollectedandApprovedFacility(ies)used.

4.DocumentationofallDiscardedMaterialsexportedoutofState,asprovidedin14CCR Sections18800through18813.
B.CollectionandSubscriptionReport

1.NumberofContainersateachServiceLevelbyCustomerTypeandprogram,including: a.AsummaryofthetotalgallonsofCartservice,cubicyardsofBinservice,andpulls,and cubicyardsorTonsofDropBoxandCompactorservicebyCustomerType. b.Calculationoftheaveragevolumeofservicereceivedper:SingleͲFamilyDwellingUnit (separatelyidentifyingDwellingUnitsinaduplex,triplex,orfourplex);MultiͲFamily DwellingUnit;andCommercialCustomer.

2.AsummaryofCustomersubscriptiondata,includingthenumberofaccounts;thenumberof CustomerssubscribingtoeachCart,Bin,andRollͲOffServiceLevellistedseparatelyfor SingleͲFamily,MultiͲFamily,andCommercialandseparatelyforeachtypeofDiscarded Material;thenumberandtypeofwaivers(i.e.,deminimisorphysicalspaceconstraint) activeforCustomersforeachtypeofDiscardedmaterial;andthenumberofBulkyItems Collectionsperformed.
C.ContaminationMonitoringReport
TheContractorshallsubmitthefollowinginformationregardingContractorconductedcontamination monitoringissuanceofCustomerNoticesconductedpursuanttoSection5.4and5.14ofthisAgreement:

1.DescriptionoftheContractor’sProcessfordeterminingthelevelofcontamination;

2.SummaryreportofCustomerNoticesissuedwhichforeachnoticeshallincludethedateof issuance,Customername,andserviceaddress.

3.Arecordofeachinspectionandcontaminationincident,whichshallinclude,ataminimum: a.NameoftheCustomer
b.AddressoftheCustomer
c.ThedatethecontaminatedContainerwasobserved
d.Thestaffwhoconductedtheinspection
e.Thetotalnumberofviolationsfound,andadescriptionofwhatactionwastakenfor each
f.CopiesofallnoticesissuedtoGeneratorswithProhibitedContainerContaminants g.Anyphotographicdocumentationorsupportingevidence.

4.AnyotherinformationreasonablyrequestedbytheCityorspecifiedincontamination Attachment 1.A

11.A-38Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 31
monitoringprovisionsofthisAgreement.
D.CustomerServiceReport

1.ContractorshallmaintainarecordofallSB1383nonͲcomplianceComplaintsasdefinedin14 CCRSection18995.3andresponsesandsubmitthefollowinginformation: a.TotalnumberofSB1383nonͲcomplianceComplaintsreceived,andtotalnumberofSB 1383nonͲcomplianceComplaintsinvestigated
b.CopiesofdocumentationrecordedforeachSB1383nonͲcomplianceComplaint received,whichshallataminimumincludethefollowinginformation: i.TheSB1383nonͲcomplianceComplaintasreceived;
ii.Thenameandcontactinformationofthecomplainant,iftheSB1383nonͲ complianceComplaintisnotsubmittedanonymously;
iii.Theidentityoftheallegedviolator,ifknown;
iv.Adescriptionoftheallegedviolation;includinglocation(s)andallother relevantfactsknowntothecomplainant;
v.Anyrelevantphotographicordocumentaryevidencesubmittedtosupportthe allegationsintheSB1383nonͲcomplianceComplaint;and, vi.Theidentityofanywitnesses,ifknown.
c.CopiesofallSB1383nonͲcomplianceComplaintreportssubmittedbyContractortothe City.
d.CopiesofallinvestigationreportssubmittedtotheCitywhichshallincludeata minimum:
i.TheSB1383nonͲcomplianceComplaintasreceived;
ii.ThedatetheContractorinvestigatedtheSB1383nonͲcomplianceComplaint; iii.Documentationofthefindingsoftheinvestigation; iv.Anyphotographicorotherevidencecollectedduringtheinvestigation;and, v.Contractor’srecommendationtotheCityonwhetherornottheentity investigatedisinviolationofSB1383RegulationsbasedontheContractor’s investigation.
E.EducationProgramReport
ThemonthlystatusofactivitiesidentifiedintheannualpubliceducationplandescribedinSection

6.10ofthisAgreement.
D.3.3AnnualReports
InadditiontothemonthlyreportingrequirementsinthisExhibit,theContractorshallprovideanAnnual Report,coveringthemostrecentlycompletedcalendaryear,inaccordancewiththeformatand submittalrequirementsofthisExhibit.TheAnnualReportshallincludetheinformationinthefollowing subsections.
Attachment 1.A

11.A-39Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 32
A.CollectionandSubscriptionReport

1.AsummaryofalldataprovidedintheTonnagereportsection,includingquarterlyand annualtotalsandaverages.

2.Thetype(s)ofCollectionservice(s)provided,alistofallhaulerroutesserviced,andarecord oftheaddressesservedoneachhaulerroute.

3.AsummaryofCustomersubscriptiondata,includingthenumberofaccounts;thetotal numberofGeneratorsenrolledwithContractorforservice,listedseparatelybyServiceLevel andContainertype(Cart,Bin,andRollͲOffservice),separatelybySingleͲFamily,MultiͲ Family,andCommercialCustomers,andseparatelyforeachtypeofDiscardedMaterial. B.ProcessingFacilityReport

1.ApprovedOrganicMaterialsProcessingFacility:Contractorshallprovidedocumentation demonstratingtheactualpercentofthematerialremovedforlandfilldisposalthatis OrganicWasteislessthanthepercentspecifiedin14CCRSection17409.5.8(c)(2)or 17409.5.8(c)(3),whicheverisapplicable,and,ifapplicable,demonstrationscompliancewith thedigestatehandlingrequirementsspecifiedin14CCRSection17896.5.

2.TemporaryEquipmentorOperationsFailure:IftheContractorisgrantedaProcessing facilitytemporaryequipmentoroperationalfailurewaiver,inaccordancewithSection5.11 oftheAgreement,theContractorshallincludethefollowingdocumentsandinformation: a.ThenumberofdaystheProcessingFacilitytemporaryequipmentwaiveroroperation failurewaiverwasineffect;
b.CopiesofanynotificationssenttotheCitypursuanttoSection5.11oftheAgreement, andcopiesofCitynoticestoContractorpursuanttoSection5.11oftheAgreement; c.Documentationsettingforththedateofissuanceofthewaiver,thetimeframeforthe waiver;and,
d.ArecordoftheTonsofOrganicMaterials,RecyclableMaterials,andSolidWaste redirectedtoanAlternativeFacilityorDisposedatanApprovedDisposalFacilityasa resultofthewaiver,recordedbyCollectionvehicleorTransfervehiclenumber/load, date,andweight.

3.QuarantinedOrganicWaste:ArecordofallcomplianceagreementsforquarantinedOrganic WastethatareDisposedof,includingthenameofGenerator,dateissued,locationoffinal disposition,andtheamountofquarantinedOrganicWastethatwasrequiredtobeDisposed ataLandfill,pursuanttoSection5.7oftheAgreement C.ComplianceMonitoringandEnforcementReport

1.AsummaryofthetotalnumberofSB1383RegulatorynonͲcomplianceComplaintsthat werereceivedandforwardedtotheCityortheirdesignee. 

2.ThetotalnumberofCustomerNoticesandContaminationProcessingFeesissued,ifany, categorizedbytypeofGenerator.

3.Thenumberofviolationsthatwereresolved,categorizedbytypeofGenerator.

4.CopiesofallCustomerNoticesissued,andeducationalmaterialsissuedtononͲcompliant Attachment 1.A

11.A-40Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement April 2022 FINAL DRAFT Page 33
Generators.
D.PublicEducationandOutreachReport

1.AcopyofalleducationandoutreachmaterialsprovidedtoGenerators,orotherwiseused foreducationandoutreacheffortsinaccordancewiththisAgreement,including,butnot limitedto:flyers,brochures,newsletters,invoicemessaging/billinginserts,andwebsiteand socialmediapostings.

2.Arecordofthedateandtowhomtheinformationwasdisseminated,ordirectcontact made,intheformofalistthatincludes:theGenerator’snameoraccountname,thetypeof educationoroutreachreceived;thedistributiondate,andthemethodofdistribution.

3.Foranymassdistributionthroughmailingsorbillinserts,theContractorshallmaintaina recordofthedate,acopyoftheinformationdistributed,andthetypeandnumberof accountsthatreceivedtheinformation.

4.Acopyofelectronicmedia,includingthedatespostedfor:socialmediaposts,eͲmail communications,orotherelectronicmessages.

5.Asummaryofthestatusoftheannualeducationplanofthereportingyear,including activitiesconductedandthequantitativeand/orqualitativeresultsofthoseactivities.

6.TheannualpubliceducationplanrequiredbySection6.10oftheAgreementforthe upcomingthenͲcurrentcalendaryear.Forexample,Contractorsubmittalofa2021annual reportinFebruary2022shallincludeContractorsubmittaloftheannualpubliceducation planforcalendaryear2022.
D.3.4AdditionalReports
A.UponRequestReporting.Cityreservestherighttorequestadditionalreportsordocumentsinthe caseofunforeseenlegislativeorregulatorychanges,requestsfromCalRecycle,oradditional requirementsimposedupontheCity.TheContractorshallprovidetherequestedreports, documents,orinformationwithinten(10)BusinessDaysuponreceiptoftherequestorwithina timeframedeterminedbytheCityManager,whichshallnottoexceedten(10)days. B.FacilityCapacityPlanningInformation.TotheextentsuchinformationisavailabletoContractor, CitymayrequireContractortoprovideCitywithinformationofavailableOrganicWasteProcessing capacityforanyApprovedProcessingFacilities,whereavailablecapacitymayincludeidentification ofmonthlyTonsofadditionalOrganicWastesuchApprovedFacilitieshavetheabilitytoreceive withinpermittedlimits.ContractorshallrespondtoCitywithinsixty(60)daysofCity’srequestfor informationregardingavailableneworexpandedcapacity,totheextentsuchinformationis availabletoContractorand,atCity’soption,mayberequiredtosubmitreportsonamoreregular basis(suchasmonthly,quarterly,orannually).IfContractorusesaSubcontractortoperformsome oralloftheFacilityͲrelatedservicesrequiredbythisAgreement,Contractorshallusecommercially reasonableeffortstosecureanyCityͲrequestedFacilitycapacityplanninginformationfromits Subcontractor(s).TheannualFacilitycapacityplanningreportshallcomplywiththefollowing:

1.Includereportsofcurrentthroughputandpermittedcapacityandavailablecapacityfor OrganicMaterialsProcessingforanyFacilityintheCitythatProcessesOrganic Materials.ExistingcapacitymayincludeidentificationofmonthlyTonsofadditional SourceSeparatedRecyclableMaterials,SourceSeparatedOrganicMaterials,and/or Attachment 1.A

11.A-41Council Agenda 5-3-2022

City of Pismo Beach / South County Sanitary Service, Inc.

Second Amendment to Amended and Restated Solid Waste Collection Franchise Agreement

April 2022 FINAL DRAFT Page 34
SolidWastecapacitysuchFacilityhastheabilitytoreceivewithinpermittedlimits.

2.IncludedescriptionofpotentialneworexpandedProcessingcapacityatthose Facilities,operations,andactivitiesforProcessingofOrganicMaterials,including informationaboutthroughputandpermittedcapacitynecessaryforplanningpurposes.

3.BesubmittedusingaformorformatapprovedbytheCityManager. Attachment 1.A

11.A-42Council Agenda 5-3-2022

RESOLUTION NO. R-2022-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,

CALIFORNIA APPROVING INTEGRATED SOLID WASTE RATES CHARGED BY SOUTH COUNTY SANITARY SERVICE FOR MAY 1, 2022, JANUARY 1, 2023, AND JANUARY 1, 2024
WHEREAS, South County Sanitary Service (SCSS) has submitted a rate increase application in accordance with the City’s franchise agreements for solid waste, recycling, green waste, and organic waste services; and
WHEREAS, this application has been comprehensively reviewed in accordance with the City’s rate-setting policies, including a public hearing for this Resolution.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:

1. The solid waste rates set forth in Exhibit A to this Resolution are approved to be charged by South County Sanitary Service and shall become effective on May 1, 2022.

2. Solid waste rates charged by South County Sanitary Service shall increase by increases (of any) in the Consumer Price Index (CPI) for Bureau of Labor Statistics’ Consumer Price Index for Urban Consumers based on the All U.S. City Average, Bureau of Labor Statistics for the month of June 2022 for January 1, 2023 and June 2023 for January 1, 2024.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 3rd day of May 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Attachment 2

11.A-43Council Agenda 5-3-2022

SOUTH COUNTY SANITARY SERVICE
RATE SCHEDULE for SOLID WASTE SERVICES, EFFECTIVE MAY 1, 2022

IN THE CITY OF PISMO BEACH
Service Description
Pickups
Per Week
Current Monthly
Rate Effective
1/1/2021
Proposed
Rate
Adjustment
Proposed
Monthly Rate
Effective 5/1/2022
RESIDENTIAL:
32 Gallon Waste Wheeler 1 $17.31 $3.84 $21.15
64 Gallon Waste Wheeler 1 $34.63 $7.69 $42.32
96 Gallon Waste Wheeler 1 $51.94 $11.53 $63.47
TWO-64 Gallon Waste Wheelers 1 $69.29 $15.38 $84.67
ONE 64 & ONE 96 Gallon 1 $86.61 $19.22 $105.83
TWO-96 Gallon Waste Wheelers 1 $103.95 $23.07 $127.01
Residential customers must use the waste wheelers provided by the garbage company. This solid service fee for residential trash collections (container with black or gray lid) includes once a week pick-up of one greenwaste/organics container (green lid), one recycling container (blue lid).

APARTMENTS, TRIPLEX, DUPLEX
Rates are the same as commercial rates (below).

COMMERCIAL DUMPSTERS - ALL AREAS:
1 yd dumpster 1 $95.17 $21.12 $116.29
1 yd dumpster 2 $138.89 $30.83 $169.72
1 yd dumpster 3 $182.63 $40.53 $223.16
1 yd dumpster 4 $234.05 $51.95 $286.00
1 yd dumpster 5 $275.18 $61.07 $336.25
1 yd dumpster 6 $326.62 $72.49 $399.11
1 yd dumpster 7 $396.99 $88.11 $485.10

1.5 yd dumpster 1 $108.04 $23.98 $132.02

1.5 yd dumpster 2 $167.19 $37.11 $204.30

1.5 yd dumpster 3 $236.65 $52.52 $289.17

1.5 yd dumpster 4 $308.64 $68.50 $377.14

1.5 yd dumpster 5 $375.52 $83.34 $458.86

1.5 yd dumpster 6 $424.37 $94.18 $518.55

1.5 yd dumpster 7 $496.91 $110.28 $607.19
2 yd dumpster 1 $120.91 $26.83 $147.74
2 yd dumpster 2 $201.90 $44.81 $246.71
2 yd dumpster 3 $288.06 $63.93 $351.99
2 yd dumpster 4 $380.65 $84.48 $465.13
2 yd dumpster 5 $470.65 $104.46 $575.11
2 yd dumpster 6 $527.26 $117.02 $644.28
2 yd dumpster 7 $613.05 $136.06 $749.11
Attachment 2.A

11.A-44Council Agenda 5-3-2022

Service Description
Pickups
Per Week
Current Monthly
Rate Effective
1/1/2021
Proposed
Rate
Adjustment
Proposed
Monthly Rate
Effective 5/1/2022
3 yd dumpster 1 $144.03 $31.97 $176.00
3 yd dumpster 2 $272.66 $60.51 $333.17
3 yd dumpster 3 $380.65 $84.48 $465.13
3 yd dumpster 4 $496.38 $110.17 $606.55
3 yd dumpster 5 $588.96 $130.71 $719.67
3 yd dumpster 6 $702.13 $155.83 $857.96
3 yd dumpster 7 $896.83 $199.04 $1,095.87

4 yd dumpster 1 $180.04 $39.96 $220.00
4 yd dumpster 2 $318.91 $70.78 $389.69
4 yd dumpster 3 $457.79 $101.60 $559.39
4 yd dumpster 4 $588.96 $130.71 $719.67
4 yd dumpster 5 $727.87 $161.54 $889.41
4 yd dumpster 6 $864.21 $191.80 $1,056.01
4 yd dumpster 7 $1,100.57 $244.26 $1,344.83

6 yd dumpster 1 $270.05 $59.93 $329.98
6 yd dumpster 2 $478.38 $106.17 $584.55
6 yd dumpster 3 $686.68 $152.40 $839.08
6 yd dumpster 4 $883.42 $196.07 $1,079.49
6 yd dumpster 5 $1,091.81 $242.32 $1,334.13
6 yd dumpster 6 $1,296.31 $287.70 $1,584.01
6 yd dumpster 7 $1,650.87 $366.39 $2,017.26

8 yd dumpster 1 $360.07 $79.91 $439.98
8 yd dumpster 2 $637.83 $141.56 $779.39
8 yd dumpster 3 $915.58 $203.20 $1,118.78
8 yd dumpster 4 $1,177.91 $261.43 $1,439.34
8 yd dumpster 5 $1,455.78 $323.10 $1,778.88
8 yd dumpster 6 $1,728.42 $383.61 $2,112.03
8 yd dumpster 7 $2,200.87 $488.46 $2,689.33
The rates shown above include the monthly container rental fee and a semi-annual dumpster cleaning.

COMMERCIAL GARBAGE CANS - ALL AREAS:

One 32 Gallon Waste Wheeler 1 $23.12 $5.13 $28.25
One 32 Gallon Waste Wheeler 2 $48.83 $10.84 $59.67
One 32 Gallon Waste Wheeler 5 $107.55 $23.87 $131.42
One 32 Gallon Waste Wheeler 7 $149.59 $33.20 $182.79

Two 32 Gallon Waste Wheelers 1 $48.83 $10.84 $59.67
Two 32 Gallon Waste Wheelers 2 $66.90 $14.85 $81.75
Attachment 2.A

11.A-45Council Agenda 5-3-2022

Service Description
Pickups
Per Week
Current Monthly
Rate Effective
1/1/2021
Proposed
Rate
Adjustment
Proposed
Monthly Rate
Effective 5/1/2022
Two 32 Gallon Waste Wheelers 3 $74.05 $16.43 $90.48
Two 32 Gallon Waste Wheelers 4 $88.04 $19.54 $107.58
Two 32 Gallon Waste Wheelers 5 $108.07 $23.99 $132.06
Two 32 Gallon Waste Wheelers 6 $128.09 $28.43 $156.52
Two 32 Gallon Waste Wheelers 7 $194.22 $43.11 $237.33
Three 32 Gallon Waste Wheelers 1 $56.59 $12.56 $69.15
Three 32 Gallon Waste Wheelers 2 $95.17 $21.12 $116.29 Three 32 Gallon Waste Wheelers 3 $119.96 $26.62 $146.58 Three 32 Gallon Waste Wheelers 4 $144.95 $32.17 $177.12 Three 32 Gallon Waste Wheelers 5 $162.45 $36.05 $198.50 Three 32 Gallon Waste Wheelers 7 $222.68 $49.42 $272.10 Four 32 Gallon Waste Wheelers 1 $72.00 $15.98 $87.98
Four 32 Gallon Waste Wheelers 2 $115.71 $25.68 $141.39 Four 32 Gallon Waste Wheelers 3 $148.12 $32.87 $180.99 Four 32 Gallon Waste Wheelers 4 $180.52 $40.07 $220.59 Four 32 Gallon Waste Wheelers 5 $212.93 $47.26 $260.19 Four 32 Gallon Waste Wheelers 6 $245.33 $54.45 $299.78 Four 32 Gallon Waste Wheelers 7 $277.74 $61.64 $339.38 Five 32 Gallon Waste Wheelers 1 $87.42 $19.40 $106.82
Five 32 Gallon Waste Wheelers 2 $141.45 $31.39 $172.84 Five 32 Gallon Waste Wheelers 3 $189.03 $41.95 $230.98 Five 32 Gallon Waste Wheelers 4 $236.60 $52.51 $289.11 Five 32 Gallon Waste Wheelers 5 $284.18 $63.07 $347.25 Five 32 Gallon Waste Wheelers 6 $331.75 $73.63 $405.38 Five 32 Gallon Waste Wheelers 7 $379.33 $84.19 $463.52 Six 32 Gallon Waste Wheelers 1 $100.30 $22.26 $122.56
Six 32 Gallon Waste Wheelers 2 $162.00 $35.95 $197.95
Six 32 Gallon Waste Wheelers 3 $204.98 $45.49 $250.47
Six 32 Gallon Waste Wheelers 4 $256.66 $56.96 $313.62
Six 32 Gallon Waste Wheelers 5 $308.34 $68.43 $376.77
Six 32 Gallon Waste Wheelers 6 $370.04 $82.13 $452.17
Six 32 Gallon Waste Wheelers 7 $428.88 $95.19 $524.07
* Maximum volume and weight per garbage can : 33 gallons / 80 pounds Attachment 2.A

11.A-46Council Agenda 5-3-2022

Service Description
Pickups
Per Week
Current Monthly
Rate Effective
1/1/2021
Proposed
Rate
Adjustment
Proposed
Monthly Rate
Effective 5/1/2022
COMMERCIAL - OTHER CHARGES:

Rates for all commercial customers include recycling or greenwaste/organics pickup once per week, included with the garbage service rate. Customers can choose from a 64 or 96 gallon blue co-mingle recycle waste wheeler or a 32 64 gallon organics waste wheeler provided free of charge (96 gallon waste wheelers can only be used with green waste due to weight). If you need a bin for recycling there is a charge (see below).

If you need more frequent recycling service, it can be provided at a 50% discount from the garbage service rates for the specified level of service required.

MISCELLANEOUS CHARGES - ALL CUSTOMERS:

Overstacked Garbage & extra
bags Minimum/unit each $5.51 $1.22 $6.73
Overstacked Greenwaste & extra
bags Minimum/unit each $2.76 $0.61 $3.37
Overstacked Blue Bin & extra
bags Minimum/unit each $2.76 $0.61 $3.37
In yard service (per can or
commodity) IN ADDITION TO
STANDARD GARBAGE RATES per month $13.75 $3.05 $16.80
Monthly charge for additional 32,
64 or 96-gallon green
waste/organics service per month $7.62 $1.69 $9.31
Monthly charge for additional 32,
64 or 96-gallon recycle service per month $3.20 $0.71 $3.91 Extended Vacation Service per month $12.83 $2.85 $15.67 Vacant Rate per month $12.83 $2.85 $15.67
Waste wheeler cleaning each time $20.52 $4.55 $25.07
Trip charge each time $13.75 $3.05 $16.80
Non-payment downsize service each time $13.75 $3.05 $16.80 Non-payment redeliver waste
wheeler each time $13.75 $3.05 $16.80
Non-payment reconnect service each time $33.07 $7.34 $40.41 Small item pickup (TV, toilet) each $32.27 $7.16 $39.43 Appliance pickup-residential each $45.51 $10.10 $55.61 Lock Charge per month $7.79 $1.73 $9.52
Garbage extras on your
scheduled pickup day per yard $11.61 $2.58 $14.19
Garbage extras -NOT ON YOUR
SCHEDULED PICKUP DAY per yard $32.04 $7.11 $39.15
Commercial Waste Wheeler rent per month $4.26 $0.95 $5.21 Re-deliver bin on stopped acct each time $39.46 $8.76 $48.22 Compactors per ton $17.55 $3.90 $21.45
Sunday Service (in additional to
garbage service level) per month $68.86 $15.28 $84.14
Recycle bin rental per month $54.03 $11.99 $66.02
Stand by time per hour $66.00 $14.65 $80.65
Extra bin cleaning each $61.55 $13.66 $75.21
Attachment 2.A

11.A-47Council Agenda 5-3-2022

Service Description
Pickups
Per Week
Current Monthly
Rate Effective
1/1/2021
Proposed
Rate
Adjustment
Proposed
Monthly Rate
Effective 5/1/2022
City Clean Up each $11.27 $2.50 $13.77
Larger than residential appliance
or glass, glass doors, or plate
glass by quote
Damage/Destruction of bins or
waste wheelers by quote
Short Term Dumpsters:

Delivery & Pickup-Bin $39.46 $8.76 $48.22
Delivery & Pickup-Waste
Wheeler $13.75 $3.05 $16.80
Rental Per Day $2.92 $0.65 $3.57
Empties Per Yard $32.04 $7.11 $39.15
Mattress:

Twin Per $17.90 $3.97 $21.87
Double Per $17.90 $3.97 $21.87
Queen Per $17.90 $3.97 $21.87
King Per $17.90 $3.97 $21.87
ADDITIONAL INFORMATION ALL CUSTOMERS:

1. Customers requesting Temporary Bins or Roll-off Box Service can call the office for current rates

2. Polystyrene (Styrofoam, Plastic #6) is not collected for recycling and should be thrown away as trash.

Please bag Styrofoam packing peanuts before placing in trash container.

3. It is encouraged to bag your trash in the garbage container but do not bag your recyclables or green waste in their respective containers and keep it loose.

4. Recycling, Greenwaste/Organcis and Garbage containers should spaced 3 feet apart away from any obstacles (i.e mailboxes, cars, etc) before 6:00am on collection service day.

5. The fee schedule above only includes the Garbage Company rates and does not include IWMA fees, which are separately noted on the billings.

6. Cleaning fees will be billed on a time and materials basis

7. Late Fees are imposed for residential customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill.

8. Customers can be responsible for contamination fees Any additional recycling including greenwaste/organic services are charged out at 50% of the garbage rate.

Attachment 2.A

11.A-48Council Agenda 5-3-2022

South County Sanitary Service

SOLID WASTE RATE REVIEW

For the Communities of

Arroyo Grande
Grover Beach
Oceano
Pismo Beach

March 2022

Attachment 3

11.A-49Council Agenda 5-3-2022

South County Sanitary Service
Solid Waste Rate Review
March 2022

TABLE OF CONTENTS
Report Purpose 1
Summary of Findings and Recommendations 1
Findings 2
Rate Recommendations 4
Rate Summary for Single Family Residential Customers 4
Background 4
Rate Review Workscope 6
Revenue and Rate-Setting Objectives 7
Financial Overview 7
Costs by Type 7
Revenues by Source 7
Service Accounts by Type 8
Rate-Setting Process 8
Base Year and Interim Year Reviews 8
Rate Increase History 9
Rate-Setting Methodology 10
Are the Costs Reasonable? 10
Detailed Cost Review 10
Trends in External Cost Drivers 14
Rates in Comparable Communities 14
What Is a Reasonable Return on These Costs? 16
Preparing the Rate Request Application 17
Proposed Rate Summary 17
Implementation 17
Rate Differences Between Communities 18
Cost Accounting Issues 18
Cost of Living Tigger Option 20
Coordination with Other Agencies 22
Summary 22

APPENDIX
A.Base Year Rate Request Application from South County Sanitary Service B.HZI Greenwaste Digester Cost Analysis
Attachment 3

11.A-50Council Agenda 5-3-2022

-1-
South County Sanitary Service

SOLID WASTE RATE REVIEW
For the Communities of Arroyo Grande, Grover Beach,
Oceano and Pismo Beach

REPORT PURPOSE
On October 20, 2021, South County Sanitary Service (SCSS) submitted a Base Year rate increase application to be effective January 1, 2022 to the Cities of Arroyo Grande, Grover Beach and Pismo Beach and the Oceano
Community Services District (CSD). However, due
to complexity, concerns with pending rate
increases by the Integrated Waste Management
Authority (IWMA) and significant subsequent
reviews and information exchanges, a revised
application was submitted on February 18, 2022.

The final application is the focus of this report in
reviewing the SCSS rate increase request in
accordance with adopted Franchise Agreement
provisions regarding rate increase applications and
to make rate recommendations to these four
agencies as appropriate.

SUMMARY OF FINDINGS AND

RECOMMENDATIONS
In its final application, SCSS is requesting a rate
increase of 22.19% in the cities of Cities of Arroyo Grande, Grover Beach and Pismo Beach; and 21.03% for the Oceano CSD (the difference is due to a 5% franchise fee rate in the Oceano CSD versus 10% in the other agencies). This compares with an initial rate request of 24.65% for three agencies (and 23.35% in the Oceano CSD). As discussed in greater detail below, all of the concerns that surfaced in the iterations and further analysis that followed in addressing issues with proposed costs for 2022 have been resolved.

There are two key differences between the initial and revised application:
124 Cerro Romauldo Avenue
San Luis Obispo, CA 93405
805.544.5838 „„Cell: 805.459.6326
[email protected]
www.bstatler.com
William C. Statler
Fiscal Policy „Financial Planning „Analysis „Training „Organizational Review .........

Joint Agency Review
SCSS provides similar
services to each of these
agencies under formally
approved franchise
agreements that regulate rates
and establish procedures for
considering rate increases.

Because the financial
information for SCSS is
closely related for these four
agencies, this report jointly
reviews rate requests and
provides recommendations for
each of them.

Attachment 3

11.A-51Council Agenda 5-3-2022

Solid Waste Rate Review
- 2 -
x Greenwaste processing costs have been reclassified as “pass-through” costs: while costs may be recovered, no profit is allowed on them.
x IWMA fees have been excluded from the fee analysis. These are approved by a separate agency and will be charged separately on customer bills.

Key cost drivers in this review include the following, which account for almost 90% of the cost increases since 2020 (last audited financial statements):

Findings
x Complete Application. With its revised application, SCSS has fully provided the supporting documentation required for rate requests under the Franchise Agreements in Arroyo Grande, Oceano, Pismo Beach and Grover Beach. The revised application (Appendix A) has been correctly prepared.
x High Level of Service at a Reasonable Cost. SCSS provides a broad level of high-quality services to these four agencies—including garbage, recycling and green waste collection and disposal as well as hauler-provided “waste wheeler” containers for all three services—at very competitive rates compared with many other communities. In fact, even with the recommended rate increase, rates in these four agencies will be among the lowest of those surveyed. In short, South County communities have the best of both worlds: high quality services at a low cost (compared with other communities). x “Trigger Option.” As discussed in greater detail below, the rate increase exceeds the cost of living threshold that “triggers” the option of terminating the Franchise Agreements within nine months after rate approval.
x Need for Updated Rate-Setting Methodology. The rate-setting process is based on the City of San Luis Obispo’s Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (Rate Manual) adopted in 1994. In short, with very minor modifications, this approach has been in place for almost 30 years. Because of several complex issues that surfaced in the 2019 rate review that had not been encountered in the past in using this rate-setting methodology (most notably corporate overhead, greenwaste and materials recovery facility (MRF) costs as well as rate structure concerns), I recommended updating the Rate Manual before the next Base Year review. This has not occurred, and accordingly, this review is based on the current methodology. 2022 Cost Increase from 2020
Amount % of Total Rate Impact*
Depreciation 998,708 36%8.05%
Greenwaste 956,783 35%7.71%
Insurance 298,612 11%2.41%
Gas and Oil 131,422 5%1.06%
Total Key Drivers 2,385,525 87%19.23%
Other Costs 367,275 13%2.96%
Total $2,752,800 100% 22.19%
Attachment 3

11.A-52Council Agenda 5-3-2022

Solid Waste Rate Review
- 3 -
However, the need for an update is even greater now: along with the 2019 concerns, new issues have surfaced in this review. As discussed in greater detail below, these include depreciation amortization period, interim rate reviews, cost allocation methodologies, accounting for disposal costs, timeframe for submitting and reviewing applications and trigger option.
x Delayed Rate Implementation. In the past, there has been no consideration of delayed rate implementation. However, the Rate Manual does provide for this if there is a delay of more than 120 days after application if it is “no fault of the franchise hauler.” Given the initial October 20, 2021 submittal date, this would indicate rate approval by March 1. However, there are three factors that mitigate this 120-day period:

1.When the 120-day period was set, the understanding at the time was that Proposition 218 45-day notice and protest requirements did not apply to approval of private company solid waste rates. However, since then
many agencies have determined that these
provisions are applicable to approval of
rates by companies like SCSS. This alone
conceptually adds 45 days to the review
process.

2.Review was delayed pending consideration
of rate increases by the IWMA and their
possible impact on SCSS rates. These new
rates were not adopted by the IWMA until
March 9, 2022. Moreover, it was
subsequently determined that since these
rates are set by the IWMA – and not the
franchising agencies – that they did not
affect agency rate-setting. (As noted above,
this resulted in a revised application from
SCSS on February 18, 2022).

3.While SCSS has been very responsive in following-up on requests for supporting data, the scope and complexity of the 2022 application has been significantly greater, and subsequently taken longer, than envisioned in the Rate Manual.

In accounting for these factors, I recommend that delayed rate implementation apply for any rates with a May 1, 2022 effective date. In short, while these delays were “no fault” of SCSS, they were not the fault of the agencies, either. That said, SCSS believes the delayed rate implementation start period should be March 1, 2022.

Where delayed rate implementation is applicable, the following temporary rate increases would be required depending on whether the delayed rate implementation start period is March 1 or May 1. (Note: The added rate increase goes up for each month of delay to be recovered while the amortization period is shortened.) Under either start date, rates would be reset in January 2023 to the “core rate” for the Interim Year adjustment.

About Proposition 218 Notices
Not all agencies prepare and issue
“Proposition 218” notices for private
sector solid waste rate increases.

However, for those that do, the notice
sets the maximum amount that rates
can be increased at the public
hearing: rates can be approved at
lesser amounts without re-noticing.

However, agencies cannot adopt
higher rates – even if they only apply
to a few customers – without another
45-day re-noticing. As such, it is
recommended that the notices reflect
the rates requested by SCSS.

Attachment 3

11.A-53Council Agenda 5-3-2022

Solid Waste Rate Review
- 4 -
Temporary Delayed Implementation Rate Increase*
It should be noted that while the report recommends a May 1 start date for delayed rate implementation, a reasonable case could be made for an even later start date (such as June 1 or July 1) based on the mitigation factors discussed above.

Lastly, several of these review timeframe factors are not unique to the 2022 review. Accordingly, the application submittal and review schedule should be considered in the Rate Manual update.

Rate Recommendations
It is recommended that cities of Arroyo Grande, Grover Beach and Pismo Beach adopt rate increases of 22.19%; and 21.03% in the Oceano CSD.

As discussed below, this rate increase significantly exceeds the cost of living threshold that triggers the option of terminating the Franchise Agreements within nine months after rate approval. However, it is important to note that this “trigger” calculation does not limit the allowable rate increase that SCSS may request (or limit the amount that agencies may approve) under the methodology set forth in the Franchise Agreements.

Cost of Living “Trigger” Option. Along with establishing the rate review methodology, Section

8.3 of the Franchise Agreements provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase (assuming it was submitted in accordance with the rate-setting methodology).

This provision was subsequently amended in 2016 allowing for an added increase based on landfill rate increases (“weighted” for their proportion of total costs). It is important to note that other than a waiver for greenwaste cost increases in 2011, no other adjustments (including other pass-through costs) are allowed under the Franchise Agreements. As detailed later in this report, the calculated threshold limit is significantly less than the proposed rate increase.

Effective Date March 1 May 1 March 1 May 1
May 1 5.26% 0.00%5.55% 0.00%
June 1 9.01% 2.63%9.51% 3.17%
July 1 14.02% 7.01%14.80% 7.40%
August 1 21.03% 12.62%22.19% 13.32%
September 1 31.55% 21.03%33.29% 22.19%
* Ends December 31, 2022
Start Period
Oceano CSD Other Agencies
Attachment 3

11.A-54Council Agenda 5-3-2022

Solid Waste Rate Review

- 5 -
Rate Summary for Single Family Residential Customers

Table 1 summarizes the proposed
monthly rates for single family
residential (SFR) customers. As reflected
in this summary, given the significant
cost drivers facing SCSS, the increases
will be modest under the proposed rate
increase. For example, for collection of a
32-gallon garbage container (the most
common SFR service level) as well as
separate waste wheelers for recycling
and green waste, the proposed monthly
rate will increase by about $3.80 on
average for the four agencies.

BACKGROUND

On October 20, 2021, SCSS submitted a
Base Year rate increase to be effective
January 1, 2022. As noted above, due to
several complex issues, a revised
application was submitted on February
18, 2022. This application was prepared in accordance with the rate review process and methodology formally set forth in its Franchise Agreements with Arroyo Grande, Grover Beach, Oceano and Pismo Beach.

In establishing a rate-setting process and methodology, each of these Franchise Agreements specifically reference the City of San Luis Obispo’s Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates. This comprehensive approach to rate reviews was adopted by San Luis Obispo in 1994 and establishes detailed procedures for requesting rate increases and the required supporting documentation to do so. It also sets cost accounting standards and allowable operating profit ratios.

As noted above, the financial information for Arroyo Grande, Grover Beach, Oceano and Pismo Beach is closely related. For this reason, these four agencies jointly contracted with William C.

Statler (who has extensive experience in evaluating rate requests in accordance with the adopted methodology) on October 6, 2022 to evaluate SCSS’s rate increase application.

This is the seventh Base Year analysis performed under this rate-setting methodology. The first was prepared in September 2001; second in August 2004; the third in August 2007; the fourth in December 2012; September 2015; and the last one in April 2019. As discussed below, several Interim Year rate reviews have prepared since then.

Table 1. Single Family Residential Rates
32 64 96
Current
Arroyo Grande $19.46 $25.29 $31.13
Grover Beach 17.65 23.85 30.03
Oceano 14.98 21.56 42.19
Pismo Beach 17.31 34.63 51.94
Proposed
Arroyo Grande 23.78 30.90 38.04
Grover Beach 21.57 29.14 36.69
Oceano 18.13 26.09 51.06
Pismo Beach 21.15 42.32 63.47
Increase: Proposed Rates
Arroyo Grande 4.32 5.61 6.91
Grover Beach 3.92 5.29 6.66
Oceano 3.15 4.53 8.87
Pismo Beach 3.84 7.69 11.53
Container Size (Gallons)
Attachment 3

11.A-55Council Agenda 5-3-2022

Solid Waste Rate Review

- 6 -
Franchise Agreement Summary

Historically, each agency has had its
own approach to determining
service levels and adopted differing
Franchise Agreements accordingly.

While these became similar
beginning in 1999, in 2008 the
Cities of Arroyo Grande, Grover
Beach and Pismo Beach adopted renewed franchise agreements, followed by the Oceano Community Service District in Summer 2010, which are the same in all key provisions:

x Each agency contracts with SCSS for garbage, green/food waste and recycling; and SCSS provides the container (waste wheelers) for each service.

x As noted above, each agency has adopted the same rate-setting methodology, including the option of terminating the agreement within nine months following approval of the requested rate increase if it exceeds the cost of living threshold.

x Arroyo Grande, Grover Beach and Pismo Beach have adopted franchise fees of 10%; the Oceano CSD reduced its rate to 5% in February 2020.

Each of these agreements were similarly amended in 2016 to:

x Extend the term of the agreement for 20 years in recognizing the amortization of extensive investments in food and green waste processing.

x Revise the cost of living threshold “trigger” to include prorated landfill cost increases.

RATE REVIEW WORKSCOPE

This report addresses four basic questions:

x Should SCSS be granted a rate increase? And if so, how much? x How much does it cost to provide required service levels? x Are these costs reasonable?
x And if so, what is a reasonable level of return on these costs?

The following documents were closely reviewed in answering these questions:

x Franchise Agreements and any Amendments for each agency x Independently audited financial statements for SCSS for 2019 and 2020. x City of San Luis Obispo’s Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (Rate Manual)
x SCSS rate increase application and supporting documentation x Follow-up interviews, correspondence and briefings with agency and SCSS staff x Rate surveys of Central Coast communities
Table 2. Franchise Agreement Effective Dates
Agency Agreement Amendments
Arroyo Grande June 10, 2008

March 22, 2016
July 26, 2016
Grover Beach July 7, 2008 June 20, 2016
Oceano July 14, 2010 July 29, 2016
Pismo Beach June 3, 2008 August 3, 2016
Attachment 3

11.A-56Council Agenda 5-3-2022

Solid Waste Rate Review
-7-

REVENUE AND RATE SETTING OBJECTIVES
In considering SCSS’s rate increase request, it is important to note the revenue and rate setting objectives for solid waste services as set forth in the Franchise Agreements via the Rate Manual.

Revenues. These should be set at levels that:
x Are fair to customers and the hauler.
x Are justifiable and supportable.
x Ensure revenue adequacy.
x Provide for ongoing review and rate stability.
x Are clear and straightforward for the agency and hauler to administer.

Rate Structure. Almost any rate structure can meet the revenue principles outlined above and generate the same amount of total revenue. Moreover, almost all rate structures will result in similar costs for the average customer: what different rate structures tell us is how costs will be distributed among non-average customers. The following summarizes adopted rate structure principles for solid waste services:
x Promote source reduction, maximum diversion and recycling. x Provide equity and fairness within classes of customers (similar customers should be treated similarly).
x Be environmentally sound.
x Be easy for customers to understand.

FINANCIAL OVERVIEW
While detailed financial and service information is provided in the SCSS rate request application (Appendix A), the following summarizes costs, revenues and account information based its proposal for 2022 for all areas serviced by SCSS.

Costs by Type.Total proposed costs for
2022 (after deducting for non-allowable
and limited costs as discussed later in
this report) are 17.3 million. As
reflected in Table 3, five cost areas
accounted for 85% of total costs:
x Direct labor for collection: 23%
x Disposal: landfill, recycling and
greenwaste: 27%
x Vehicle operations and maintenance
(including depreciation): 19%
x Franchise fees: 8%
x Insurance: 8%
Attachment 3

11.A-57Council Agenda 5-3-2022

Solid Waste Rate Review
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Revenues by Source.Total revenues
(without proposed rate increases) are
$15.2 million. As reflected in Table 4,
58% of SCSS’s revenues come from
single-family residential (SFR)
accounts.Services to multi-family
residential and non-residential
customers account for 42% of their
revenues, with less than 1% from other
revenues.

This significant gap between revenues
and expenses (plus allowable profit)
drives the proposed rate increase.

Service Accounts by Type.While
single-family residences account for
58% of revenues, they represent 92% of
total accounts (Table 5).

This reflects the fact that per account,
multi-family and non-residential
customers generate more solid waste
than single-family residential customers
(and thus more revenue per account).

RATE-SETTING PROCESS
Under the Rate Manual, the rate-setting
process follows a three-year cycle:
x Base Year.The first year of the cycle—the Base Year—requires a comprehensive, detailed analysis of revenues, expenses and operating data. This information is evaluated in the context of agreed upon factors in the franchise agreements in determining fair and reasonable rates. As noted above, the last Base Year analysis for SCSS under this approach was prepared in April 2019.
x Two Interim Years.In both the second and third years, SCSS is eligible for Interim Year rate adjustments that address three key change factors: changes in the consumer price index (CPI- U) for “controllable” operating costs; changes in “pass-through costs” (primarily landfill tipping fees, which SCSS does not control: they are set by the County Board of Supervisors); and an adjustment to cover increased franchise fees.

The first two adjustment factors are “weighted” by the proportionate share that these costs Attachment 3

11.A-58Council Agenda 5-3-2022

Solid Waste Rate Review

- 9 -
represent of total costs (excluding franchise
fees). For example, in the current Base Year
analysis for recommended 2019 rates,
controllable costs account for about 75% of
total costs, with landfill disposal costs
accounting for about 25%.

The rate review for the two Interim Years
requires less information and preparation time
than the Base Year review, while still
providing fair and reasonable rate adjustments.

Rate Increase History

The following summarizes the SCSS rate review
history beginning with 2005 (last eighteen years)
based on the year of the application (which is
typically the implementation year).

Table 6. SFR Rate History: 2005 to 2022 (Last 18 Years)

1. From 2004 to 2011, the franchise fee rate in Pismo Beach was 6% compared with 10% in the other three agencies, and as such, its rate increase was slightly less. In July 2011, Pismo Beach adopted a Year Review Type
Arroyo
Grande
Grover
Beach Oceano
Pismo
Beach (1)
2005 Base Year 5.60% 5.60% 5.60% 5.30%
2006 Interim Year 3.09% 3.09% 3.09% 2.95%
2007 Interim Year 3.76% 3.76% 3.76% 3.60%
2008 Base Year 3.00% 3.00% 3.00% 2.90%
2009 Interim Year 0.00% 0.00% 0.00% 0.00%
2010 Interim Year (2) 0.00% 0.00% 0.00% 0.00%
2011 Interim Year 0.00% 0.00% 0.00% 0.00%
2012 Interim Year (2) 5.15% 5.15% 5.15% 5.15%
2013 Base Year 3.20% 3.20% 3.20% 3.20%
2014 Interim Year 2.05% 2.05% 2.05% 2.05%
2015 Interim Year 0.00% 0.00% 0.00% 0.00%
2016 Base Year 3.25% 3.25% 3.25% 3.25%
2017 Interim Year 1.10% 1.10% 1.10% 1.10%
2018 Interim Year 1.60% 1.60% 1.60% 1.60%
2019 Base Year 10.06% 10.06% 10.06% 10.06%
2020 Interim Year 1.70% 1.70% 1.70% 1.70%
2020 Franchise Fee Rdctn (3) -5.00%
2021 Interim Year 0.70% 0.70% 0.70% 0.70%
2022 Base Year (4) 22.19% 22.19% 21.03% 22.19%
Proposed Interim Year Rates
Consistent with past practice, SCSS
has proposed an interim year
approach that is slightly different from
the Rate Manual methodology. In the
interest of a more straightforward,
streamlined process, SCSS proposes
simply adjusting rates by changes in
the CPI-U in 2023 and 2024. As noted
in the past, the concept is consistent
with the Rate Manual approach, but is
simpler and allows for multi-year rate
setting. Accordingly, it is
recommended that four agencies
continue using this approach.

Given the that interim review
methodology set forth in the Rate
Manual has not been used for several
years, this is another area the update
should consider.

Attachment 3

11.A-59Council Agenda 5-3-2022

Solid Waste Rate Review

- 10 -
10% franchise fee, bringing it in alignment with the other three agencies (as well as most other agencies in San Luis Obispo County). In implementing the 10% rate in 2011, Pismo Beach adopted an added 3.9% increase beyond the interim year rate increase of 5.15% requested by SCSS.

2. SCSS did not request a rate increase in 2010 (which would have been the “normal” cycle to do so), and accordingly, did not submit a Base Year rate application. However, SCSS did submit a rate request in 2011 using an Interim Year methodology. The reasonableness of using the resulting “hybrid” approach was discussed in detail in the 2011 Interim Year report, which concluded that this approach was reasonable given the circumstances.

3. In February 2020, the Oceano CSD reduced its franchise fee from 10% to 5%, reducing rates by 5%.

4. Proposed rate increase.

5. As noted above, this chart reflects SFR rate increases. SCSS began charging for commercial recycle containers. These rates were set at 50% of the garbage rates at that time.

Assuming the proposed rate increases are approved, this will result in an average annual rate increase of 3.6% over the last eighteen years. While there have been notable peaks in 2019 and 2022, largely due to regulatory and external market changes for recyclables, this reflects a high level of rate stability and price containment for SCSS customers.

RATE SETTING METHODOLOGY

Are the Costs Reasonable?

The first step in the rate review process is to determine if costs are reasonable. There are three analytical techniques that can be used in assessing this:

x Detailed review of costs and service responsibilities over time. x Evaluation of external cost factors, such as general increases in the cost of living (as measured by the consumer price index).
x Comparisons of rates with other communities.

Each of these was considered in preparing this report, summarized as follows.

Detailed Cost Review

In its rate application (Appendix A), SCSS provides detailed financial data for five years:

x Audited results for the two prior years (2019 and 2020). x Estimated results for 2021.
x Projected costs for the Base Year (2022).
x Estimated costs for the following year (2023).

Attachment 3

11.A-60Council Agenda 5-3-2022

Solid Waste Rate Review

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Additionally, for virtually all line items, SCSS provided supplemental detail upon request to support cost increases from 2020 to 2022.

Table 7 below provides actual costs for 2020 (most recent audit results) compared with requested and recommended cost projections for 2022. While there are significant cost increases in several categories, they are reasonable given the cost drivers facing SCSS.

The Short Story. The key drivers behind the proposed rate increases for 2022 can be summarized by four cost factors over the past two years:

x Truck depreciation.
x Food and green waste recycling.
x Insurance
x Gas and oil

All other cost increases including labor, ongoing maintenance, disposal costs at the landfill and MRF, account for less than 3% of the rate increase.

Table 7. Detail Cost Review: 2020 Compared with 2022

2020
Actual Amount Change
Direct Labor 3,614,140 3,922,681 308,541
Administrative Costs
Corporate Overhead 356,299 378,184 21,885 Office Salaries 768,706 835,736 67,030 Other Expenses -
Depreciation 535,997 1,534,705 998,708 Gas and Oil 821,425 952,847 131,422 Insurance
Medical 674,318 779,174 104,856
General Liability 388,530 582,286 193,756 Office Expense 229,923 268,409 38,486 Operating Supplies 83,727 77,820 (5,907) Outside Services 270,687 211,251 (59,436) Permits 67,486 97,290 29,804
Tires 127,834 151,673 23,839
Truck Repairs 642,080 606,106 (35,974) Other Costs 323,681 353,209 29,528
Total Allowable Costs 8,904,833 10,751,371 1,846,538 Pass-Through Costs
Disposal Costs
Landfill 1,701,768 1,805,407 103,639
MRF 1,223,081 1,143,280 (79,801)
Greenwaste 824,872 1,781,655 956,783
Franchise Fees 1,629,121 1,454,123 (174,998) Facility Rent, Related Party 170,111 181,814 11,703 Interest, Related Party 133,282 213,214 79,932 Transportation, Related Party 34,271 43,275 9,004 Total Pass-Through Costs 5,716,506 6,622,768 906,262 Total Costs $14,621,339 $17,374,139 $2,752,800
2022 Proposed
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These costs are organized by costs where SCSS is allowed a profit (“Allowable”) and those where it can recover the cost but not earn a profit on them (“Pass-Through”).

The following describes the basis for each for the significant changes.

Allowable Costs

x Direct Labor. This reflects a two-year increase of 8.5%, or about 4.2% per year. Given the tight labor market and current increases in CPI, this increase for retention and attraction is reasonable.

x Office Salaries. This also reflect annual increases of about 4% per year. Again, given the tight labor market and current increases in CPI, this increase for retention and attraction is reasonable.

x Depreciation. The 2019 Base Year report noted that as fully depreciated trucks were replaced, significant continuing higher
depreciation costs were expected in the future
due to two factors: annual depreciation costs
on fully depreciated trucks would go from
zero to about $60,000 each; and the cost basis
for new trucks would be significantly higher
than in the past. Given replacements during
2021 and those proposed in 2022, the
increased cost is reasonable. Combined with a
possible change in amortization schedule as
noted in the sidebar, planned replacements
should result in stabilized costs in the future.

x Gas and Oil. These costs are projected to increase by about 7.5% annually. Given the volatility (both up and down) of diesel and CNG costs (especially recent cost spikes), this is a reasonable assumption for 2022 costs.

x Insurance: Health Care and Liability. These costs are projected to increase significantly by about 12.5% annually (7.5% for health care and 22.5% for liability insurance). Given increases in health care costs and current liability insurance market, these are reasonable assumptions for 2022 costs.

x All Other Allowable Costs. While there are ups and downs in the other individual line items, in total these reflect modest annual increases of about 2%.

Pass-Through Costs

x Disposal Costs: Landfill. No rate increases are reflected in the rate application ($41.00 per ton). The modest two-year increase reflects increased tonnage.

Truck Amortization
The Rate Manual calls for
depreciating trucks over seven years.

While this made sense in 1994,
manufacturing improvements since
then have resulted in longer lives, with
ten years becoming the industry
standard. As noted above, this
change should be considered as part
of the Rate Manual update.

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x Disposal Costs: Recycling (Related Party). This cost category reflects a decrease in the tonnage rate from $96.00 to $84.59.

x Disposal Costs: Greenwaste. After depreciation, this is the largest cost increase from 2020.

These costs are incurred under an on-site agreement with HZI and reflect costs to build (via depreciation), operate and maintain the anaerobic digestion plant. The purpose of this plant is to process local food and greenwaste in meeting California regulation SB 1383. Key drivers include higher costs than initially projected for construction; ongoing operations and maintenance due to feedstock challenges; and local outbound material. The following further describes these challenges; and a cost summary is provided in Appendix B.

Construction and startup The construction of the anaerobic digester plan in San Luis Obispo was one of the first high solids digesters in the United States and the 99 th overall renewable gas anaerobic plant built globally by HZI. The
construction of the anerobic digester in
California posed unique challenges but was
constructed safely and without any
environmental incidents. Given the “first-of-
the-kind” nature of the project in California,
the actual cost to construct the anaerobic
digestion plant exceeded the original budget
originally set in 2014. The cost increases were
mainly driven by labor availability, prevailing
wage, civil and underground cost increases,
and equipment and material escalations.

Operation and maintenance. The anaerobic
digestion plant exceeds 95% availability
(uptime) to process waste while producing
renewable green electricity. To ensure the plant
is reliably available to process local community
waste, the operations and maintenance cost of the anaerobic digestion exceeds the original annual budget due to several factors:

1. The quantity of entrained inorganic material (such as sand and metal) entrained in the waste increases the wear and tear on the mechanical components of the plant, which inherently increases the number of staff required to operate and maintain the facility.

2. The lower than anticipated quantity of food was also increases the wear and tear on the equipment, which has mainly been driven need to continue to educate the community on organics recycling and the impacts of COVID on commercial businesses (most notably restaurants).

3. Plant labor costs have increased due to the requirements of processing the waste, maintaining the equipment, competitive labor market and inflationary costs in San Luis Obispo County and more broadly in California. Plant administrative costs such as insurance, legal and taxes continue to increase greater than was historically budgeted.

Local Benefits
It should be noted that that while
costs have increased, HZI and SCSS
believe there are substantial local
benefits to the greenwaste operation,
including:
x Powering over 600 homes with

6.2 million kWh per year of
renewable electricity.
x Diverting 72 million pounds of
organics from landfills per year
x Reducing greenhouse gas
emissions by 5,300 metric tons
per year.

Attachment 3

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In summary, key operation and maintenance cost increases reflect continual sand removal; increased equipment replacement and maintenance; increased labor hours and rates; and management of backend compost.

Depreciation. Plant depreciation expenses reflect the higher construction costs discussed above in addressing waste profile challenges such as sand and low food waste content.

Lower Natural Gas Production (Revenue). Due to the amount of inorganic material (like sand) and the lower than anticipated food waste content, the overall natural gas production is lower than planned. This directly limits the amount of overall natural gas production potential of the digester and ultimately electricity sales.

In the past, greenwaste contract costs have been considered “allowable” costs. However, as disposal costs, they are more like landfill and recycling costs, which are treated as “pass - through” costs that can be recovered but profit is not allowed on them. Accordingly, this is considered a pass-through cost in this rate review. However, this another area that should be reviewed as part of the rate manual update.

x Franchise Fees. This reflects the removal of IWMA fees from the cost base.

x Interest (Related Party). Interest is an allowable cost under the Rate Manual. In this case, interest costs are assessed internally by Waste Connections based on a methodology that takes into account its corporate costs of borrowing and financed assets. Accordingly, this is treated as a “pass-through” cost. SCSS’s auditors have previously provided a written opinion on the reasonableness of the cost methodology; and I have reviewed the calculations underlying the projected costs in accordance with this methodology. Given the increase in financed assets as reflected in depreciation costs, I believe the projected interest costs for 2022 are reasonable.

Trends in External Cost Drivers

The most common external “benchmark” for evaluating cost trends is the consumer price index.

Over the past two calendar years (2020 and 2021), the U.S. CPI-U increased by 8.5% (about

4.2% annually). Excluding the cost drivers discussed above, all other costs over the past two years increased by 4.1% (about 2% annually).

Rates in Comparable Communities

Lastly, reasonableness of rates (and underlying costs) can also be evaluated by comparing rates with comparable communities. However, survey results between “comparable” communities need to be carefully weighed because every community is different.

Nonetheless, surveys are useful assessment tools —but they are not perfect and they should not drive rate increases. Typical reasons why solid waste rates may be different include:

x Franchise fees and AB 939 fee surcharges
x Landfill costs (tipping fees)
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x Service levels (frequency, quality)
x Labor market
x Operator efficiency and effectiveness
x Voluntary versus mandatory service
x Direct services provided to the franchising agency at no cost, such as free trash container pick-up at city facilities, on streets and in parks
x Percentage of non-residential customers, and how costs and rates are allocated between customer types
x Revenue collection procedures: Does the hauler or the franchising agency bill for service? And what are the procedures for collecting delinquent accounts? x Services included in the base fee (recycling, green waste, containers, pick-up away from curb)
x Different rates structures
x Land use and density (lower densities will typically result in higher service costs) x Mix of residential and non-residential accounts

With these caveats, the following summarizes single family residential rates for other cities in the Central Coast area compared with the proposed rates for SCSS. As reflected below, even with the recommended or proposed rate increases, Arroyo Grande, Grover Beach, Oceano and Pismo Beach will have among the lowest rates of the agencies surveyed.

Table 8. Single Family Residential Rate Survey

Single Family Residential Monthly Trash Rates
30-40 60-70 90-101
Atascadero $28.55 $44.50 $55.77
Morro Bay 22.88 45.76 68.64
Paso Robles 30.90 51.12 57.25
San Luis Obispo*22.51 45.03 67.56
Santa Maria na 30.69 34.81
San Miguel 28.23 44.48 61.06
Templeton 31.40 45.01 44.48
Proposed: South County Sanitation Service Area
Arroyo Grande 23.78 30.90 38.04
Grover Beach 21.57 29.14 36.69
Oceano CSD 18.13 26.09 51.06
Pismo Beach 21.15 42.32 63.47
* Proposed 2022 rates scheduled for review in April 2022 Container Size (Gallons)
Attachment 3

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Summary: Are the costs reasonable? Based on the results of the three separate cost-review techniques—trend review, external factor analysis and rate comparisons—the proposed cost assumptions for 2022 are reasonable.

What Is a Reasonable Return on these Costs?

After assessing if costs are reasonable, the next step is to determine a reasonable rate of return on these costs. The rate-setting method formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their Franchise Agreements with SCSS includes clear criteria for making this assessment. It begins by organizing costs into three main categories, which will be treated differently in determining a reasonable “operating profit ratio:”

Allowable Costs (Operations and Maintenance): Reasonable Operating Profit Allowed

x Direct collection labor x Fuel
x Vehicle maintenance and repairs x Depreciation
x Insurance x Billing and collection

Pass-Through Costs: Can be Recovered but No Profit Allowed

x Disposal costs (landfill, recycling, greenwaste)
x Franchise fees
x Payments to affiliated companies (such as facility rent, interest and trucking charges)

Excluded and Limited Costs: No Revenues Allowed

x Charitable and political contributions x Non-IRS approved profit-sharing plans x Entertainment x Fines and penalties
x Income taxes x Limits on corporate overhead

After organizing costs into these three categories, determining “operating profit ratios” and overall revenue requirements is straightforward:

x The target is an 8% operating profit ratio on “allowable costs.” x Pass-through costs may be fully recovered through rates but no profit is allowed on these costs.
x No revenues are allowed for any excluded or limited costs.

In the case of SCSS, about 60% of their costs are subject to the 8% operating profit ratio; and 40% are pass-through costs that may be fully recovered from rates but no profit is allowed. No recovery is allowed for excluded costs. The overall operating profit ratio after allowable and pass-through costs is 5%.

Attachment 3

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Preparing the Rate Request Application

Detailed “spreadsheet” templates for preparing the rate request application—including assembling the required information and making the needed calculations—are provided in the Rate Manual. SCSS has prepared their rate increase application in accordance with these requirements (Appendix A); and the financial information provided in the application for 2019 and 2020 ties to its audited financial statements.

Proposed Rate Summary

The following summarizes the calculations that support the requested and recommended rate increases:

Table 9. Proposed Rate Increase Summary

As reflected in this summary, all the rate-setting factors are the same for all four agencies are the same except for the franchise fee adjustment (which reflects that higher franchise fees will be required with the rate increase): 5% for the Oceano CSD and 10% for the other three agencies.

Implementation

The following summarizes key implementation concepts in the adopted rate-setting model:

x The “8%” operating profit ratio is a target; in the interest of rate stability, adjustments are only made if the calculated operating profit ratio falls outside of 10% to 6%.

x On the other hand, if past ratios have been stronger than this target, then the revenue base is re-set in the Base Year review.

Oceano Others
Allowable Costs 10,751,371 10,751,371
Allowable Profit (8% Operating Ratio) 934,901 934,901
Pass-Through Costs
Disposal
Landfill 1,805,407 1,805,407
MRF (Recycling) 1,143,280 1,143,280
Greenwaste 1,781,655 1,781,655
Franchise Fees 1,454,123 1,454,123
Related Party Costs 438,303 438,303
Total Pass-Through Costs 6,622,768 6,622,768
Allowed Revenue Requirements 18,309,041 18,309,041
Revenue without Rate Increase 15,260,678 15,260,678
Revenue Requirement: Shortfall (Surplus) 3,048,363 3,048,363 Rate Base Revenue 18,309,041 18,309,041
Percent Change in Revenue Requirement 19.98% 19.98%
Allowed Revenue Increase * 21.03% 22.19%
* Adjusted for 5% franchise fee in Oceano and 10% in others Attachment 3

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x Special rate increases for extraordinary circumstances may be considered.

The result of this process is a proposed rate increase of 22.19% (21.03% in the Oceano CSD).

RATE DIFFERENCES BETWEEN COMMUNITIES

If costs for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are so similar, why are the residential rates so different?

The short answer: history and different approaches to rate structure philosophies.

History

Until 1999, service levels under the Franchise Agreements with SCSS between these four agencies were significantly different. The rates in place at that time became the basis for subsequent rate reviews.

Rate Structure Principles

Most significantly, each agency has adopted different rate structure principles to recover similar costs. For example, Pismo Beach has adopted a rate structure for its residential customers that more closely reflects a “pay-as-you-throw” philosophy under which the “per gallon” costs for 32, 64 and 96 gallon containers are the same (for example, a 64-gallon container costs twice as much as a 32-gallon one.) This results in lower monthly costs for 32-gallon customers and relatively higher rates for 64 and 96-gallon customers.

On the other hand, Arroyo Grande has adopted rates that do not have as much difference between container sizes (but still offer an incentive for smaller containers over larger ones), recognizing collection economies of scale for larger versus smaller containers. In this case, 32- gallon containers in Arroyo Grande are more expensive than in Pismo Beach, but 64-gallon containers are less.

Both rate structures have their strong points: in the case of Pismo Beach, rates are more reflective of disposal costs, whereas in Arroyo Grande they are more reflective of collection costs. But the important point is that the revenue generating capability is the same even though the rates are different.

Multi-Family and Non-Residential Rates

Lastly, multi-family and non-residential rates (which account for about 40% of SCSS revenues) are similar in all four agencies: it is only in single family residential rates that there are significant differences between communities.

COST ACCOUNTING ISSUES

As noted above, SCSS’s financial operations for Arroyo Grande, Grover Beach, Oceano and Pismo Beach are closely related. Keeping costs and revenues segregated is further complicated Attachment 3

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by the fact that SCSS is a subsidiary of Waste Connections US (which acquired the parent company in April 2002), which shares ownership with the following local companies:

x San Luis Garbage Company
x Mission Country Disposal
x Morro Bay Garbage Service
x Coastal Roll-Off Service
x Cold Canyon Land Fill
x Cold Canyon Processing Facility

Additionally, within the South County, SCSS’s service area includes:

x City of Arroyo Grande
x City of Grover Beach
x City of Pismo Beach
x Oceano Community Services District
x Nipomo Community Services District
x Avila Beach Community Services District
x Other unincorporated areas in the South County such as rural Arroyo Grande

Cost Accounting System

Audited financial statements are prepared for each company within Waste Connections’ central coast operations by an independent certified public accountant; and SCSS’s auditors have consistently issued “clean opinions” on its financial operations. However, only direct labor hours for collection (and related compensation), liability insurance, franchise fees and revenues are directly accounted for each company (like SCSS); and then within each agency serviced by it. As summarized below for major cost categories, all other costs are allocated between companies based on apportionments using generally accepted accounting principles:

Table 10. Cost Allocation Bases
Allocation Basis Major Cost Categories
Customer counts x Region and division overhead
x Office salaries
x Office expense
x Legal and accounting
Direct labor hours x Truck depreciation
x Truck repairs and tires
x Mechanic labor
x Gas and oil
Tonnage Disposal costs
x Landfill
x MRF/recycling
x Greenwaste
Attachment 3

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Revenue x Corporate overhead (adjusted for Rate Manual limitations) x Bad debt expense
x Other taxes
Containers x Container depreciation
x Container labor
x Container repairs
Gallons x Diesel fuel

These allocation bases seem reasonable. However, they are subject to periodic change as determined by Waste Connections. Since these apportionments are a key basis for rate setting, the bases of allocation for each cost category (including allocations of regional and district overhead and accounting for direct costs) should be established in an updated Rate Manual.

COST OF LIVING “TRIGGER OPTION”

As noted above, Section 8.3 of the Franchise Agreements provides that if the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, each agency has the option of terminating the agreement at any time within nine months following approval of the requested rate increase. While this provision does not directly limit rate increase requests by SCSS to an amount that may be less than that allowed under the rate-setting methodology, subjecting the Franchise Agreement to possible termination if the rate request is greater than the cost of living threshold provides a strong incentive for SCSS to do so, if possible.

Calculation of the Cost of Living Threshold

As recommended in the 2013 Interim Year rate review for consistency and clarity, the CPI-U rate increases used in calculating Interim Year increases and the “trigger” threshold are based on changes from June to June (given application submittal targets, this was the most recent date that would consistently be available).

Along with the adjustment for the “weighted” greenwaste rate increase in 2012 of 1.7% previously approved, the 2016 Franchise Agreement amendments provided for adjustments to the threshold “trigger” of landfill rate increases, weighted by the ratio of landfill costs to total costs (assumed at 25% based on recent trends).

x Table 11(a) provides the threshold calculation compared with actual rate increases and those recommended for 2022.

x Table 11(b) provides landfill rates since 2008.

As reflected in Table 11(a), the cumulative changes in the cost of living (with adjustments for greenwaste and landfill cost increases) is 34.87%. This compares with cumulative rate increases, including those recommended of 22.19% for 2022 (21.03% for Oceano CSD) of 61.76%. This would result in exceeding the “trigger” by 26.89%.

Attachment 3

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Table 11(a). Trigger Threshold Calculation

Table 11(b). Landfill Rates Per Ton
Increase
Prorated
@
Year Actual Amount Percent 25%
2008 29.25 - 0.00% 0.00%
2009 29.25 - 0.00% 0.00%
2010 29.25 - 0.00% 0.00%
2011 34.25 5.00 17.09% 4.27%
2012 34.25 - 0.00% 0.00%
2013 34.25 - 0.00% 0.00%
2014 36.50 2.25 6.57% 1.64%
2015 38.75 2.25 6.16% 1.54%
2016 41.00 2.25 5.81% 1.45%
2017 41.00 - 0.00% 0.00%
2018 41.00 - 0.00% 0.00%
2019 41.00 - 0.00% 0.00%
2020 41.00 - 0.00% 0.00%
2021 41.00 - 0.00% 0.00%
2022 41.00 - 0.00% 0.00%
Note: Under long-term rate increases approved by the County, Cold Canyon Landfill was eligible for annual rate increases of $2.25 per ton from 2017 to 2022, with a resulting rate of $54.50 by 2022, However, it chose not to do so.

Rate Rate
June Index Amount Percent Greenwaste Landfill (1) Threshold Year Increase (2) 2009 215.693
2010 217.965 2.272 1.05% 4.27% 5.33% 2011 0.00%
2011 225.722 7.757 3.56% 1.70% 0.00% 5.26% 2012 5.15%
2012 229.478 3.756 1.66%0.00% 1.66% 2013 3.20%
2013 233.504 4.026 1.75%1.64% 3.40% 2014 2.05%
2014 238.343 4.839 2.07%1.54% 3.61% 2015 0.00%
2015 238.638 0.295 0.12%1.45% 1.58% 2016 3.25%
2016 241.018 2.380 1.00%0.00% 1.00% 2017 1.10%
2017 244.955 3.937 1.61%0.00% 1.61% 2018 1.61%
2018 251.989 7.034 2.79%0.00% 2.79% 2019 10.06%
2019 256.143 4.154 1.62%0.00% 1.62% 2020 1.70%
2020 257.797 1.654 0.64%0.00% 0.64% 2021 0.70%
2021 271.696 13.899 5.12%0.00% 5.12% 2022 22.19%
Cumulative Total 56.003 25.96% 1.70% 8.91% 34.87%61.76% Requested Rate Increase Above Trigger Threshold 26.89%

1. Landfill rate increases prorated at 25% of total costs

2. Recommended rate for 2022, except for Oceano (21.03%) US CPI-U Increase Allowed Adjustments
Attachment 3

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However, it is important to note that this “trigger” calculation does not limit the allowable rate increase that may be requested under the methodology set forth in the Franchise Agreements or approved by the agencies.

Accordingly, if the proposed rate increases are approved, I recommend that the agencies consider (as they did in as part of the 2019 Base Year review) adopting findings that they will not pursue the “trigger” option.

Rate Manual Update. The merit of continuing with the “trigger option” is another area that should be considered with the Rate Manual update.

COORDINATION WITH OTHER AGENCIES

SCSS has submitted similar rate requests to the three other agencies that regulate rates and services in the other South County areas that it serves: County of San Luis Obispo, Avila Beach Community Services District and the Nipomo Community Services District. These agencies are likely to act on the requested rate increases within the same time frame as the four agencies covered in this report.

Waste Connections (as San Luis Garbage Company) has also submitted a rate increase application to the City of San Luis Obispo of 17.75%, which is scheduled for Council review on April 19, 2022. As Mission County Disposal, it has also submitted initial rate applications for Los Osos and the north coastal areas of about 40%.

SUMMARY

Based on the rate-setting policies and procedures formally adopted by Arroyo Grande, Grover Beach, Oceano and Pismo Beach in their Franchise Agreements, this report concludes that:

x SCSS has submitted the required documentation required under its Franchise Agreements with the four agencies.
x This results in a recommended rate increase of 22.19% in the cities of Arroyo Grande, Grover Beach and Pismo Beach; and 21.03% in the Oceano CSD.

ATTACHMENTS

Appendix A: Base Year Rate Request Application from South County Sanitary Service Appendix B: HZI Greenwaste Digester Cost Analysis

Attachment 3

11.A-72Council Agenda 5-3-2022

Appendix A

BASE YEAR RATE REQUEST

APPLICATION

1. Base Year Application Summary

x City of Pismo Beach
x City of Arroyo Grande
x City of Grover Beach
x Oceano Community Services District

2. Supporting Schedules

x Financial Information: Cost and Revenue Requirements Summary x Revenue Offset Summary
x Cost Summary for Base Year
x Base Year Revenue Offset Summary
x Operating Information
x Rate Survey

Attachment 3

11.A-73Council Agenda 5-3-2022

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Attachment 3

11.A-84Council Agenda 5-3-2022

PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #12.A

SUBJECT/TITLE:
2021 NORTHERN CITIES MANAGEMENT AREA (NCMA) ANNUAL REPORT AND

WATER SUPPLY UPDATE

RECOMMENDATION:

No action required; information only.

BACKGROUND:

This report to the City Council will serve as both an update on the Northern Cities Management Area (NCMA) Annual Report and the bi-monthly update on the status of the City’s water supply.

2021 Northern Cities Management Area (NCMA) Annual Report Due to a California Superior Court Ruling in 2008, the rights to the Santa Maria Groundwater Basin (SMGB) have been adjudicated to various agencies. Part of that ruling established three management areas, including the Northern Cities Management Area (NCMA), Nipomo Mesa Management Area (NMMA) and the Santa Maria Valley Management Area (SMVMA). Further, the ruling mandated that “a monitoring program be established in each of the three Management Areas to collect and analyze data regarding water supply and demand conditions,” and an annual report be filed with the Court within 120 days after the end of each calendar year.

The NCMA is comprised of four agencies: the Cities of Arroyo Grande, Grover Beach, and Pismo Beach, and the Oceano Community Services District. Through the NCMA Technical Group (TG), comprised of representatives from each agency, the member agencies work together to manage the SMGB and meet the annual reporting requirements of the Court Order.

The 2021 NCMA Annual Report, prepared by GSI Water Solutions, Inc. (GSI), was filed with the Court on April 29, 2022.

Discussion
The NCMA TG is facilitated by Water Systems Consulting, Inc. (WSC).

Together, the TG and WSC hired GSI to compile the data gathered during quarterly groundwater monitoring and to create the 2021 NCMA Annual Report. A copy of the full report is available for download from the Access Pismo1 public records portal or by scanning the QR Code to the right. A copy is also available upon request from the City Clerk’s Office.

1 Full URL:
https://accesspismo.pismobeach.org/WebLink/DocView.aspx?id=422908&dbid=0&repo=Laserfiche

12.A-1Council Agenda 5-3-2022

The following list is a summary of the report’s highlights and important information:

1. During 2021, water elevations generally decreased slightly in the NCMA portion of the SMGB in response to below-average rainfall in 2021. The relatively minor decrease in water levels throughout most of the area, despite the below-average rainfall conditions, is less than would be expected given the recent rainfall patterns.

The fact that the impacts are not greater is attributed to ongoing efforts by all NCMA agencies to minimize groundwater extraction and maximize surface water supply sources while maintaining the water conservation practices and requirements brought on by the current drought.

2. Ground Water Levels – The greatest threat to the groundwater supply in the area is seawater intrusion. An indicator of whether the NCMA agencies and other stakeholders are successfully averting the threat of seawater intrusion is the groundwater elevation in the NCMA sentry wells near the coastline. The average water elevations of three sentry wells—24B03, 30F03, and 30N02–make up the Deep Well Index. This index was developed by the NCMA in 2007 to gauge the ability of the aquifer to withhold potential landward migration of seawater. A Deep Well Index value above 7.5 feet North American Vertical Datum 1988 (NAVD 88) generally indicates that sufficient freshwater flow occurs from the east to the coastline to prevent seawater intrusion. History has shown that a prolonged period in which the Deep Well Index level is below 7.5 feet develops groundwater conditions that pose a risk of seawater intrusion. The following are evaluations of groundwater levels through the seasons in calendar year 2021.

Spring 2021 – In the mostly urbanized areas north of Arroyo Grande Creek, groundwater is extracted from the deep groundwater aquifers of the Paso Robles Formation and the Careaga Sand. The water elevation contours in the deep aquifer system in spring of 2021 generally showed a westerly to southwesterly groundwater flow. These groundwater flow gradients and positive (above mean sea level) groundwater elevations are developed and maintained primarily because the NCMA agencies have managed this portion of the basin through cooperative water management and conservation efforts. April 2021 groundwater elevations in the deep aquifer system main production zone along the coast ranged from 7.0 to 9.0 feet above sea level. By comparison the April 2020 groundwater elevations ranged from 8.0 to 12.0 feet.

Fall 2021 – Groundwater elevations in the alluvial aquifer within the Cienega Valley in October 2021 were 1 to 14 feet lower than elevations at the start of the irrigation season in April 2021, which is a typical seasonal response to the irrigation season.

These conditions are consistent with the pumping depressions observed historically during the fall in the Cienega Valley. The alluvial groundwater elevation in the pumping depression in October 2021, at 11.6 feet below sea level, was 2.8 feet higher than in October 2020. October 2021 groundwater elevations in the deep aquifer system main production zone along the coast ranged from 3.8 to 7.0 feet above sea level.

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Deep Wells – In 2021, the Deep Well Index started the year above the 7.5-foot threshold value with an index number in January of more than 9 feet. It continued to rise, reached a high of nearly 10 feet during February, and then began to decline.

The index value dropped below the 7.5-foot trigger value by July and continued to fall to a low point of just over 6 feet in late October. A slow recovery occurred through November, followed by a more rapid recovery in December, coincident with above average monthly rainfall received in December. The index value continued to rise throughout the end of the year and finished 2021 at about 9 feet above sea level.

NCMA/NMMA Boundary – The water elevation in the San Luis Obispo County monitoring well (Well 32C03), which was installed to monitor aquifer conditions along the NCMA/NMMA boundary, typically exhibits regular seasonal fluctuations.

As in 2020, the water elevation in the well remained above sea level throughout all of 2021, in contrast to the 2013 through 2016 period when the water levels in the NCMA/NMMA boundary area typically dropped below sea level in August and remained at a low elevation until early October.

3. Change in Groundwater Storage – The change in groundwater in storage in the NCMA portion of the SMGB between April 2020 and April 2021 is estimated by comparing water level contour maps created for these periods and calculating the volume change from April 2020 to April 2021. Separate estimates of change in groundwater in storage were computed for both the deep aquifer system and for the alluvial aquifer and then summed to represent the total NCMA estimated change in groundwater in storage. Comparison of April water levels was chosen to comply with the California Department of Water Resources (DWR) reporting requirements under the Sustainable Groundwater Management Act (SGMA).

A decrease of groundwater in storage is a reflection of a net decrease in water levels across the aquifer. During the period of April 2020 to April 2021, the NCMA portion of the SMGB experienced a net decrease of groundwater in storage. The net decrease in groundwater levels represented a decrease of groundwater in storage from April 2020 to April 2021 of approximately 1,400 acre-feet (AF); that is, there was approximately 1,400 AF less groundwater stored in the NCMA portion of the SMGB in April 2021 than in April 2020.

4. Groundwater Quality – Analytical results of key water quality data (chloride, total dissolved solids (TDS), and sodium) in 2021 were generally consistent with historical concentrations and observed ranges of constituent concentrations. In general, no water quality results were observed that are a cause of concern.

5. Water Supply and Production/Deliveries

Urban Water Use – Urban water use in 2021 among the NCMA agencies was 6,073 AF, a slight increase from 2020. Urban water use in the past 20 years has ranged from 5,476 AF (2016) to 8,982 AF (2007). There has been an overall

12.A-3Council Agenda 5-3-2022

decline in urban production since 2007, although there have been slight increases since the low point in 2016. The decline in pumpage since 2013 was in direct response to a statewide order by the Governor to reduce the amount of water used in urban areas by 20 percent. That goal was achieved locally by conservation activities implemented by the NCMA agencies, and the relatively low urban water has been maintained since then.

Total Water Use – Total water use in the NCMA in 2021 (including urban use by the NCMA agencies plus agricultural irrigation and private pumping by rural water users) was 8,658 AF. Of this amount, Lopez Lake deliveries were 3,522 AF, California State Water Project deliveries totaled 1,772 AF, and groundwater pumping from the NCMA portion of the SMGB accounted for approximately 3,344 AF. The City of Arroyo Grande produced 20 AF from its Pismo Formation wells, outside the SMGB, in 2021. The breakdown is shown Table 1.

Table 1. Water Production by Source (AF)
Agency Lopez
Lake
State Water
Project
SMGB
Groundwater
Other
Supplies1 Total
Urban Area
Arroyo Grande 2,158 0 129 20 2,307
Grover Beach 795 0 482 0 1,277
Pismo Beach 406 1,302 63 0 1,771
Oceano CSD 163 470 85 0 718
Urban Water Use Total 3,522 1,772 759 20 6,073
Non-Urban Area
Agricultural Irrigation
Applied Water 0 0 2,457 0 2,457
Rural Water Users 0 0 82 0 82
Non-potable Irrigation
by Arroyo Grande 0 0 46 0 46
Total 3,523 1,772 3,344 20 8,658

6. Threats to Water Supply – Total groundwater pumping (urban, agriculture, and rural domestic) from the SMGB in the NCMA was 3,344 AF in 2021, which is 35 percent of the court-accepted 9,500 acre-feet per year (AFY) long-term safe yield of the NCMA portion of the SMGB.

When pumping is less than the safe yield of an aquifer, groundwater in storage should generally increase and result in rising groundwater levels. As such, groundwater elevations throughout the NCMA portion of the SMGB should rise

12.A-4Council Agenda 5-3-2022

significantly if several consecutive years of groundwater pumping occurs at 30 to 40 percent of the safe yield, which has been the case in the NCMA for the past decade. However, as illustrated by the decline in groundwater levels during 2021, the data show that the aquifer is still in a tenuous position with respect to the threat of seawater intrusion.

Historically, groundwater flowed from higher elevations inland westward toward the ocean, thereby acting to prevent seawater intrusion. In recent years, the well- documented pumping depression in the deep aquifer system near Black Lake Canyon within the NMMA appears to have reversed the groundwater gradient. The apparent development of a landward gradient in the southern portion of the NCMA, because of the pumping depression in the NMMA, likely reduces the historical recharge volume of subsurface inflow into the NCMA from Nipomo Mesa. This reduction of subsurface inflow to the NCMA creates conditions more likely to result in seawater intrusion in the NCMA and NMMA.

During 2021, there were no indications of seawater intrusion, but any increase of groundwater pumping or decrease in rainfall may quickly result in a greater risk of seawater intrusion

Update on Water Supply
On November 16, 2021 staff provided an update to the City Council on the City’s water supply and committed to return to the Council at the second meeting every other month to provide an update on the City’s water supply.

The staff report for that meeting can be found in the Access Pismo online public records portal2 or by scanning the QR Code at right.

Current Status
The City’s water supply portfolio is made up of three sources, State Water, Lopez Lake Water, and groundwater from the Santa Maria Groundwater Basin (SMGB).

Santa Maria Groundwater Basin
The SMGB is an adjudicated basin, and the City of Pismo Beach has the right to extract 700 acre-fee per year (AFY) from the basin.

The NCMA TG has established a “Deep Well Index Threshold” level of 7.5 feet as a level that can induce seawater intrusion into the basin if the basin remains below that level for an extended period of time.

Previous Index Level:

Data Collection Date: January 4, 2022
Deep Well Index Level (DWIL): 9.36 feet

1.86 feet higher than the Deep Well Index
Threshold

2 Full URL:
https://accesspismo.pismobeach.org/WebLink/DocView.aspx?id=362819&dbid=0&repo=Laserfiche

12.A-5Council Agenda 5-3-2022

Most Current Index Level:

Data Collection Date: April 5, 2022
DWIL: 7.98 feet

0.48 feet higher than the Deep Well Index
Threshold

The current DWIL is 1.38 feet lower than the previous level and 1.08 lower than one year ago (April 2021).

Lopez Lake
Lopez Lake is still operating under the Low Reservoir Response Plan (LRRP), and because the level in Lake Lopez is below 15,000 acre-feet (AF), Zone 3 agencies have reduced their entitlements by 10%. The full list of recommend reductions in municipal diversions under the LRRP are shown in Table 2.

Table 2. LLRP Recommended Municipal Diversion Reduction Targets Amount of Water In
Storage (AF)
Recommended Municipal
Diversion Reduction
Targets
Recommended
Municipal Diversion
(AFY) Targets for Pismo
20,000 0% 892
15,000 10% 802.8
10,000 20% 713.6
5,000 35% 579.8
1,700 100% 0

Lopez Lake Levels:

Previous Lake Level
Measurement Date: March 9, 2022
Lake Level: 14,508.7 AF

Most Current Lake Level:

Measurement Date: April 8, 2022
Lake Level: 14,148.1 AF

The current lake level is 360.69 AF lower than it was on March 9, 2022.

Current projections show if the area receives “average rainfall” between now and January of 2023, that storage in the lake will be approximately 10,000 AF in late September of 2022, as shown in Figure 1 below. This date is 11 days later than the previous prediction.

12.A-6Council Agenda 5-3-2022

Figure 1: Lopez Reservoir Storage Projections

State Water
On December 1, 2021 the Department of Water Resources (DWR) set initial 2022 State Water Project (SWP) available supplies on a basis that ensures the SWP long-term water supply contractors can meet their outstanding minimum human health and safety demands for water (health and safety allocation). This allocation is based on minimum unmet water demands to meet domestic supply, fire protection, and sanitation needs during the year. These health and safety needs are determined to be not more than 55 gallons per capita per day (gpcd), consistent with the recent State Water Resources Control Board (SWRCB) emergency curtailment regulations. Agencies with stored water, or other sources of water will not receive a SWP delivery at this time.

On January 20, 2022 the DWR increased SWP deliveries to 15%, however on March 18, 2022 the DWR reduced SWP deliveries to 5% due to the lack of rain and snowpack. This means that the City of Pismo Beach can expect to receive 57 AF of Table A allocation and 62 AF of Drought Buffer for a total of 119 AF of State Water. However, the County of San Luis Obispo has agreed to make its subcontractors whole, meaning the City can take delivery of 1,240 AF of State Water from the County.

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The City’s current water supplies without additional State Water from the County are shown in Table 3, below.

Table 3. Current Pismo Beach Water Supplies
Source
Full
Allocation
(AF)
Percent of
Allocation Allocation (AF)
SMGWB* 700 30%210
State Water 1,140 5%57
Drought Buffer** 1,240 5% 62
Stored State Water 0
Lopez Water#892 80%713.6
Lopez Surplus 314.0
Total 2,692 1,347.6
*Santa Maria Groundwater Basin
**Drought buffer is an additional allocation of water that can only be delivered when State Water Deliveries are less than 100%. The total amount of State Water delivered including drought buffer cannot exceed 1,240 AF in a given year.
#Lopez Lake is projected to drop below 10,000 AF in August of 2022. At that time allocations from the lake would drop to 80% retroactively, therefore for planning purposes an 80% allocation is assumed.

Taking into account the State Water that the County has agreed to deliver to the City of Pismo Beach, the City’s total available water supply is 2,463.6 AF for 2022.

Precipitation
The City’s two local water supplies, Lopez Lake and the Santa Maria Groundwater Basin, are highly dependent on rainfall. Calendar year 2020 saw a significant short fall in precipitation, however 2021 did see a small surplus of rain. So far 2022 has proven to be drier than both of the previous years. Rainfall data for these years is shown in Table 4 on the next page.

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Table 4. Average and Actual Rainfall from January 2020 to December 2021 Month
*Average
Rainfall
(in)
2020
Rainfall
(in)
Delta
(in)
2021
Rainfall
(in)
Delta
(in)
2022
Rainfall
(in)
Delta
(in)
Jan 3.59 0.61 -2.98 6.46 2.87 .05 -3.54
Feb 3.87 0 -3.87 0.03 -3.84 .10 -3.77
Mar 3.46 8.02 4.56 2.53 -0.93 1.08 -2.98
Apr 1.13 1.72 0.59 0 -1.13
May 0.41 0 -0.41 0.1 -0.31
Jun 0.07 0 -0.07 0 -.07
Jul 0.03 0 -0.03 0.03 0
Aug 0.02 0 -0.02 0 -0.02
Sep 0.32 0 -0.32 0 -0.32
Oct 0.62 0.04 -0.58 1.95 1.33
Nov 1.7 0.49 -1.21 0.46 -1.24
Dec 2.57 1.21 -1.36 7.69 5.12
Total 17.79 12.09 -5.7 19.25 1.46 1.23 -10.29**
*Average rainfall from http://longrangeweather.com/
** total difference for only the months shown
Past Actions
The City is currently in a Severely Restricted Water Supply Condition. On June 1, 2021, City Council declared a Moderately Restricted Water Supply Condition via Resolution R- 2021-049 in response to the current drought. Then on January 18, 2022 the City Council declared a Severely Restricted Water Supply Condition via Resolution R-2022-004 in response to the continued drought conditions and dropping levels in Lake Lopez.

Building Restrictions
The current triggers for the building restrictions are that on May 1st of each year the City’s water supply is evaluated and if the water supply as of May 1st is 15% greater than the previous year’s production, no building restrictions are called for, as shown in Figure 2 on the next page. The City’s current water supply is greater than 15% of last year’s and staff does not recommend that building restrictions be considered at this time. However, because the City’s water supply is in a deficit without additional water from the County, staff is including the building restriction flow chart to provide the Council with an opportunity to review and discuss the building restriction flow chart.

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Figure 2: Flow Chart Illustrating Triggers for the Three-Tier Building Restriction System

Is total Water
Supply above
1,630 AF?
Is Lopez
above
10,000 AF?
Is State
Water Above
20%?
Is Lopez
above 5,000
AF?
Is Lopez
above 4,000
AF?
Tier I Tier II Tier III
Is State
Water Above
15%?
Is State
Water Above
10%?
Y
Y
Y Y Y
Y Y
N
N N N
N N
Is total Water
Supply above
1,130 AF?
Is total Water
Supply above
850 AF?
Y Y
N N N
SMGB below
trigger level for
6 consecutive
quarters?
SMGB below
trigger level for
10 consecutive
quarters?
SMGB below
trigger level for
3 of 4 previous
quarters?
N
Y
N
Y
N
Y
Y
N
Evaluate on May 1st of each year.

Is
total water
supply
15% above previous
year’s
production?
No Restrictions

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In 2021 the City produced 1,770.8 AF of water which was made up of 62.52 AF from the SMGB, 283.36 AF from Lopez Lake, 263.24 AF from Lopez Lake Surplus and 1,161.7 AF from the SWP. From Table 3, above the City’s available water supply is 1,347.6 AF without additional water from the County. Following the building restriction flow chart, shown in Figure 2 above, without consideration of County Stored State Water, the Council may wish to consider Tier III Building Restrictions. However, when considering County Stored State Water the City’s available water supply is 2,463.6 AF, meaning that no Building Restrictions would need to be considered per the Council’s current policy.

Conclusion and Recommendation
Given the fact that Lopez Lake is at 14,148.1 AF, SWP deliveries are set at 5% (and could be adjusted back to 0%) and that without County Stored State Water the City’s water supply is only 1,347.6 AF, staff recommends that the City Council consider declaring a Critical Water Supply Condition pursuant to section 13.24.060 of the City’s Municipal Code.

A Critical Water Supply Condition has the same water use restrictions as a Severely Restricted Water Supply Condition, with that added condition that, “the City Council may impose any water rationing requirements as it deems appropriate to protect public health, safety, welfare, comfort and convenience.” Some water use restrictions the Council may wish to consider could include:
Prohibition on washing vehicles except at a commercial facility that recycles wash water
Extending the prohibited hours for outdoor irrigation from 10 a.m. to 4 p.m. to 8 a.m. to 6 p.m.
Limit outdoor irrigation to one day per week
Mandate that all water users cut their water consumption by 10% as compared to a given baseline (the previous year, another given year, etc.) Mandate that all water leaks be repaired within 72 hours of notification by the City Other restrictions the City Council deems necessary to reduce water consumption Should the City Council wish to declare a Critical Water Supply Condition or enact building restrictions, staff recommends that the City Council provide direction on what restrictions should be enacted and staff will return at the next meeting with a resolution that reflects the direction of the City Council.

FISCAL IMPACT:

There is no direct fiscal impact from this report.

ALTERNATIVES:

Provide staff with direction on how to proceed.

ATTACHMENTS:

None

12.A-11Council Agenda 5-3-2022

Submitted by: Meeting Date: May 3, 2022
Benjamin A. Fine, P.E., Director of Public Works/City Engineer City Manager Approval:

12.A-12Council Agenda 5-3-2022