TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Jeff Provenzano
SUBJECT: See Below DATE: August 8, 2026
Approved
Date:
9/17/26
COUNCIL DISTRICT: Citywide
SUBJECT: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
RECOMMENDATION
Approve the First Amendment to the Agreement for Countywide Household Hazardous Waste Collection Program with the County of Santa Clara, increasing compensation by $4,083,373 from $1,200,000, for a not-to-exceed total compensation of $5,283,373, for Fiscal Years 2024-2025 through 2026-2027, retroactive to September 18, 2025.
SUMMARY AND OUTCOME
Approval of the First Amendment (Amendment) to the Agreement for Countywide Household Hazardous Waste Collection Program (Agreement) will authorize the County of Santa Clara (County) to continue providing Household Hazardous Waste (HHW) collection and processing services on behalf of the City of San José (City) through June 30, 2027. Continuing these services ensures the City will be able to accommodate the growing number of residents utilizing the HHW drop-off services. An organized collection of HHW reduces the improper disposal of these materials, which reduces the likelihood of collection vehicle fires and associated property damage. This also reduces the amount of toxins that enter the City’s landfills, recycling facilities, storm sewers, and sanitary sewers, and prevents these toxins from threatening both the San Francisco Bay and local groundwater.
COUNCIL AGENDA: 9/29/26
FILE: 26-1005
ITEM: 6.1
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
BACKGROUND
The California Integrated Waste Management Act of 1989 (Assembly Bill (AB) 939) requires local jurisdictions to provide community services regarding the management and disposal of HHW wastes, and in 2006, the California Department of Toxic Substances Control banned the disposal of wastes (materials such as batteries, electronics, mercury thermometers and thermostats, non-empty aerosol cans, fluorescent tubes, and compact fluorescent lamps) in landfills and required the disposal of such materials at a facility that accepts these materials. If not properly handled, these wastes can be hazardous to human health and the environment. AB 939 additionally authorizes local jurisdictions to impose fees to recover the costs of implementing and administering source reduction and recycling programs. Santa Clara County collects these fees on behalf of 15 jurisdictions and proportionately distributes revenues to participating jurisdictions. The fee has remained stagnant since 2009, and San José’s AB 939 revenue has decreased over time. As the program has grown in popularity and the costs of administration have increased, this source is insufficient to cover the total cost of the Household Hazardous Waste Collection Program (HHW Program) and has been supplemented by ratepayer fees.
The County administers all operational aspects of the HHW Program and is responsible for recycling and waste disposal of HHW dropped off at collection facilities and temporary events. The Agreement authorizes the City to participate in the countywide HHW Program. The HHW Program supports the City’s Zero Waste Strategic Plan 2022 by diverting waste from landfills and supporting Extended Producer Responsibility and product stewardship. Additionally, the countywide HHW Program is one of the only legal means for residents to dispose of these materials and provides drop-off service for small businesses on a cost-recovery basis.
The partnership with the County to participate in its HHW Program began in 1991. The City entered into the current Agreement for a three-year term (FY 2024-2025 to FY 2026-2027) beginning July 1, 2024. Initially, the terms of total compensation in the Agreement were set at $400,000 annually, for up to a maximum total of $1.2 million.
Pursuant to the County’s request for additional funding, and in order to prevent an interruption in services, the City paid $644,400 to the County above the $1.2 million original Agreement amount, for which retroactive approval is now being recommended.
Discussions on increased HHW Program costs have been ongoing with the County, and due to the timing of the County executing a new agreement with its vendor that processes HHW materials, this item is now ready for City Council approval.
The County is requesting additional funding for the purpose of funding the HHW Program through the remaining duration of the Agreement due to increased costs.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
Specifically, participation and costs to run the program have both increased. If additional funding is not added, the County could terminate the Agreement and cease providing HHW appointment services to San José residents.
ANALYSIS
The County uses a vendor for the collection, recycling, and disposal of the HHW material dropped off at its facilities and temporary events. Historically, costs for the City’s participation in the HHW Program were fully supported by existing funding from AB 939 disposal fees and augmentation funding. In FY 2022-2023, for the first time, costs exceeded funding by $355,769. This pattern was initially thought to be an anomaly; however, the program costs have consistently exceeded existing funding each subsequent year as costs for HHW disposal industrywide have increased and supplemental funding has reduced or remained stagnant. The following year in FY 2023-2024, program participation increased by 16.5%, resulting in program costs exceeding funding by $540,980, a 4.9% increase from the previous year.
Due to mounting cost increases from the vendor exceeding the County’s budgetary authorization, the County was required to conduct a competitive bid process to select an alternative service provider. Ultimately, the existing vendor was selected and approved in July 2026 by the County and cost increases were realized. The vendor cost increase includes an inflationary factor of approximately 4%, based on cost increases that have occurred over the years of the HHW Program and supported by actual program expenditures.
As the administrator of the HHW Program, the County has also seen its overhead costs increase, including a facility lease, compensation for County staff, and other non- personal costs incurred in its program administration. In addition, the number of residents using the HHW Program has increased over time, resulting in increased demand for collection, recycling, and disposal services. Increased vendor costs, higher County administrative overhead costs, and increased resident participation have resulted in elevated costs for the HHW Program.
In FY 2024-2025, the first year of the current Agreement, participation continued to grow by 8.7% while program costs increased during the renewal of the Agreement, which resulted in costs exceeding funding by $1,033,373, a 19.4% increase from the previous year. While the FY 2025-2026 final reconciliation invoice is not expected until November 2026, current projections using available AB 939 fee revenue and appointment data from three of four quarters support continued increases to program costs. With the additional increases to program rates for FY 2026-2027 and anticipated program participation, the City can reasonably expect program costs to grow. As the material cost increases (Fixed Program and Variable Cost per Car rates) are unavoidable, an
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
amendment to the three-year Agreement is required to continue funding and implementation of the HHW Program through FY 2026-2027.
The table below provides the current and proposed HHW Program compensation and rates. Increased program utilization and increased rates will see the total expense for the three fiscal years covered by this Amendment increase to $5,283,373, as demonstrated below.
Table - Current and Proposed HHW Program Compensation and Rates Maximum Annual Compensation Fixed Cost Rate Variable Cost Rate Fiscal Year Current Proposed Current Proposed Current Proposed 2024-2025 $400,000 $1,033,373(1) $5.07 $5.07 $66.02 $66.02 2025-2026 $400,000 $1,750,000(2) $5.07 $5.07 $66.02 $66.02 2026-2027 $400,000 $2,500,000(3) $5.07 $5.19 $66.02 $86.73 TOTAL $1,200,000 $5,283,373
(1) Payment has already been fully remitted.
(2) Payment will be split into installments, per the Agreement, of which $811,027 was paid as of January 21, 2026, and up to $938,973 that will be due within 30 days following the receipt of the annual cost statement issued to the City by November 30, 2026.
(3) Payment will be split into installments, per the Agreement. For example, for services in FY 2026-2027, an upfront payment is made in September 2026 year and a year-end true up payment is made in November 2027.
Approving the Amendment will ensure the program can continue to meet current demand by maintaining appointment availability for HHW drop-offs, keeping hazardous materials from being landfilled, improperly disposed, and from entering the San Francisco Bay and local groundwater. Additionally, the Amendment will shift HHW Program call center operating hours from 9:00 a.m. - 5:00 p.m. to 8:30 a.m. - 4:30 p.m. and incorporate a schedule of temporary events.
Conversely, if this Amendment is not approved, there is a risk that the County may terminate the Agreement, which could suspend appointments for San José residents needing to dispose of HHW materials.
M
oving forward, City staff will work with the County to receive program data more frequently throughout the year, which can assist in anticipating growing costs due to program usage. Currently, program expenses are calculated annually in November, after the fiscal year is completed, and reconcile costs for the previous year. Evaluating participation and rising costs throughout the year can assist in amending the agreement during the fiscal year and minimize the need for a retroactive amendment.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
EVALUATION AND FOLLOW-UP
If the Amendment is approved by City Council, the County will provide HHW collection services for the City through June 30, 2027, when the current Agreement expires.
Looking ahead, because of continued program cost increases, including the decline in collection of AB 939 fees, the City is evaluating other options to provide HHW services to the San José community, including potentially hiring a vendor and directly administering the program. This evaluation is ongoing and a recommendation may return to the City Council at a later date.
FISCAL IMPACTS
The HHW Program has historically been funded by a variety of sources, including AB 939 fees, ratepayer fees, and other savings in the Environmental Services Department’s (ESD) non-personal/equipment budget. The 2026-2027 Adopted Budget includes ongoing funding for this program of $1,042,000 in the Integrated Waste Management Fund, established as part of the 2026-2027 Base Budget process and funded by residential garbage rates and AB 939 fees. The program is also partially funded by ongoing funding in the Sewer Service and Use Charge Fund ($100,000) and the Storm Sewer Operating Fund ($100,000), for a total of $1,242,000.
Although the final invoice for services rendered in FY 2025-2026 and the upfront invoice for FY 2026-2027 have not yet been received, expenditures are expected to exceed the funding available and budget actions will be brought forth as part of the 2026-2027 Mid- Year Budget Review process to adjust ESD Non-Personal/Equipment appropriations to align with the expected payments for FY 2026-2027. Further, staff will evaluate the ongoing funds needed for this program in the context of the overall fiscal health of the funds as part of the 2027-2028 Base Budget development process.
BUDGET REFERENCE
The table below identifies the funds and appropriations used to fund the contract recommended as part of this memorandum in FY 2026-2027. As stated previously, a budget action will be brought forth to adjust the appropriations as needed as part of the 2026-2027 Mid-Year Budget Review.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
Fund # Appn.
# Appropriation Name Total
Appropriation
Amount for
Contract(s)
2026-2027
Proposed
Operating Budget
Page*
Last Budget
Action (Date,
Ord. No.)
541 0762 ESD Non-
Personal/Equipment $1,130,353 $100,000 957 6/16/2026, 31336
446 0762 ESD Non-
Personal/Equipment $4,109,889 $100,000 961 6/16/2026, 31336
423 0762 ESD Non-
Personal/Equipment $4,588,062 $1,042,000 914 6/16/2026, 31336
*The 2026-2027 Proposed Operating Budget was approved on June 9, 2026, and adopted on June 16, 2026, by the City Council.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, City Manager’s Budget Office, and the Planning, Building and Code Enforcement Department.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 29, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Amendment to the Agreement with the County of Santa Clara for Participation in the Household Hazardous Waste Collection Program
/s/
Jeff Provenzano
Director, Environmental Services
For questions, please contact Judy Erlandson, Deputy Director, Environmental Services Department at [email protected] or (408) 535-8557.