CITY OF POMONA
COUNCIL REPORT
January 22, 2024
To: Honorable Mayor and Members of the City Council
From: Anita D. Gutierrez, Acting City Manager
Submitted By: Rene Guerrero, Public Works Director
SUBJECT: SECOND AMENDMENT TO THE CONTRACT/FRANCHISE AGREEMENT WITH GRAND CENTRAL RECYCLING AND TRANSFER STATION, INC. APPROVING THE FIRST 5-YEAR EXTENSION AND AMENDING CERTAIN TERMS OF THE AGREEMENT RECOMMENDATION:
It is recommended that the City Council take the following actions:
Approve a second amendment to the current Contract/Franchise Agreement between the City of Pomona and Grand Central Recycling and Transfer Station, Inc. extending the term of the Agreement for an additional five years, from January 27, 2024 to January 27, 2029, and amending certain terms of the Agreement; and Authorize the City Manager, or designee, to execute the amendment subject to review by the City Attorney.
EXECUTIVE SUMMARY:
Approval of the second amendment (Attachment No. 1) to the current Contract/Franchise Agreement (Agreement) between the City of Pomona (City) and Grand Central Recycling and Transfer Station, Inc. (Grand Central) will allow for the continued operations at the Grand Central Recycling and Transfer Station (Transfer Station) for a term of five years, change the nature of the agreement to specify it as an Exclusive Franchise Agreement, eliminate the requirement for City residential waste to be transferred to the Transfer Station, require payment of $1,000,000 annually in franchise fees to the City, and amend certain other terms in the Agreement as detailed below.
FISCAL IMPACT:
The fiscal impact of this action will allow for continued annual payments of $1,000,000 to the City for a period of five years.
PREVIOUS RELATED ACTION:
On July 19, 2004, the City and Universal Waste Systems, Inc., a California Corporation, entered into a Direct Transfer Agreement related to the disposal of residential solid waste at and the operation of a direct transfer facility (DTF) located at 1730 E. First Street, Pomona.
On January 27, 2014, the City entered into the First Amendment to the Agreement to allow for the closure of the DTF and allow for the development, construction, and operation of the “Ninth Street Transfer Station” requiring the delivery and acceptance of City residential waste for an initial 10-year period with two possible, consecutive 5-year extensions.
On December 5, 2022, the City Council adopted Ordinance No. 4323 awarding an exclusive Franchise Agreement to Arakelian Enterprises, Inc. DBA Athens Services (Athens) for residential and commercial solid waste, recyclable materials, and organic collections services, which eliminated the dedicated delivery of the City’s residential trash stream to the Transfer Station.
DISCUSSION:
The City has had an agreement with either Universal Waste Systems, Inc or Grand Central for the processing of the City’s residential solid waste since July 19, 2004. On December 5, 2022, the City awarded an exclusive Franchise Agreement to Athens to process both residential and commercial solid waste, recyclable materials, and organics commencing on July 1, 2023. Since the start of the Franchise Agreement, Athens has honored the agreement with Grand Central by continuing to take collected residential solid waste to the Transfer Station.
The current Agreement with Grand Central is set to expire on January 27, 2024, after which all residential solid waste collected by Athens will be transferred to the appropriate Athens facilities, including all commercial solid waste, as Athens is now the City’s exclusive franchise hauler. Approval of the second amendment will allow Grand Central to continue operating in the City accepting solid waste from other sources. It will also allow the City to continue receiving $1 million annually in franchise fees from the operation. The Second Amendment includes the following:
Provides for the first 5-year extension of the Agreement from January 27, 2024 to January 27, 2029.
Converts the nature of the Agreement to an “Exclusive Franchise Agreement.” Amends Section I. A. Franchise Fee to require the payment of a franchise fee in the amount of $1 million per year for the term of the extension.
Requires that the City shall be immediately notified, upon application, of any emergency State order or other agency authorization to receive more than 1,000 tons per day and if granted, the franchise fee shall include $2.50 per ton for every ton beyond 1,000 daily tons.
Eliminates all references relating to the transportation and disposal of residential solid waste at Grand Central as well as requirements for annual Council District clean-up events for Bulky Household Waste.
Amends the definition of “Green Waste” to include food waste as defined by Senate Bill 1383 and the California Department of Resources and Recovery (CalRecycle).
The current Agreement allows for the possibility of two five-year extensions. For Grand Central to be granted a second 5-year extension in 2029, the following conditions must be met:
The City shall be immediately notified, upon application, of any emergency State order or other agency authorization to receive more than 1,000 tons per day.
No material, uncured violations.
Operations must be consistent with the conditions of approval of the Conditional Use Permit (CUP).
A CPI escalator, based upon the annual CPI rate, will be applied annually to the franchise fee for each year of the second 5-year extension.
Prepared by:
_____________________________
Shandy Dittman
Public Works Fiscal and Project Manager
ATTACHMENT:
Attachment No. 1 – Draft Second Amendment
Second Amendment to the Contract/Franchise Agreement with Grand Central Recycling and Transfer Station, Inc.