City Council
Report
City Council Meeting: December 17, 2024
Agenda Item: 5.S
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To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Resource Recovery & Recycling
Subject: Approval of Fourth Contract Modification with Clean Earth Environmental Solutions, Inc. for Hazardous Waste Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemptions pursuant to Section 15301 and Section 15308 of the California Environmental Quality Act (CEQA) guidelines; and
2. Authorize the City Manager to negotiate and execute a fourth modification to agreement #11051 (CCS) in an amount not to exceed $1,118,000 with Clean Earth Environmental Solutions, Inc. for hazardous waste services for the Public Works Department. This will result in a five-year amended agreement with a new total amount not to exceed $2,198,000, with future year funding contingent on Council budget approval.
Summary
In compliance with California regulations and the City’s commitment to the environment, the City uses the services of Clean Earth Environmental Solutions, Inc. (Clean Earth) for:
• Support of the residential household hazardous waste (HHW) door-to-door collections program; and
• Transportation, recycling, and disposal services for hazardous waste generated by City operations, emergency response, and small quantity business generators that drop off at the City’s hazardous waste facility in the City Yards.
The cost of these services has increased since the contract execution in January 2021 due to unforeseen external factors. As a result, staff recommends that Council authorize 2 of 5
a fourth modification to the City’s agreement with Clean Earth to increase the amount of the contract by $1,118,000. This will result in a five-year amended agreement with a new total amount not to exceed $2,198,000 for Clean Earth to continue to provide these services through the expiration of the contract in January 2026.
Discussion
According to the California Department of Resources Recycling and Recovery (CalRecycle), it is illegal to dispose of HHW in the garbage, storm drains, and on the street. Untreated toxic chemicals can pollute the environment and cause harm to animals and people. Typical HHW includes paints, adhesives, batteries, aerosols, fluorescent lamps, electronics, used oil, and pesticides.
Services Provided
The residential HHW door-to-door collections program was first introduced in the City as a pilot program in January 2011. The program is currently available to all residents, who after making a telephone or online appointment, will have their HHW collected and transported by a trained contracted hazmat technician from their home within five business days to an approved hazardous materials certified facility for further processing, recycling, and disposal. Residents do not pay extra for this service because the cost is funded by regular solid waste rates. In fiscal year 2023-24, a total of 1,564 households participated in the door-to-door program and 65,915 pounds of HHW were either safely discarded or diverted from landfills and recycled.
In addition, the HHW facility at the City Yards safely stores hazardous materials collected from in-house city operations, emergency response, and small quantity business generators. The HHW facility is staffed with one full-time City staff member (Hazardous Materials Technician) and one part-time contracted certified hazardous waste technician, who is trained in specialized packaging of hazardous waste and licensed to transport hazardous waste materials in metal drums to the processing facility.
Contract and Cost Increase
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In January 2021, staff executed the three-year contract with two one-year renewal options which are compensated at an increase based on a mutually agreeable index, such as the Consumer Price Index, not to exceed 7%. The contract also states: “In addition, Contractor may apply additional increases to cover extraordinary or unexpected increases in disposal costs at the incinerator, landfills, etc.” City staff were unaware of the unforeseen cost increases experienced by Clean Earth during the most recent rate study. Thus, costs were not factored into current solid waste rates. In January 2024, staff executed a second contract modification to revise pricing because of such extraordinary or unexpected increases due to, but not limited to, the following:
1. Disposal: Many of the disposal/incineration facilities where Clean Earth disposes waste have become full and cannot accept additional materials, so Clean Earth has had to go to alternate facilities farther away with higher priced disposal rates.
2. Supplies: Supply chain disruptions that began with the COVID-19 pandemic, and in some cases have been exacerbated by the war in Europe, have had significant impact. Clean Earth has been unable to procure reconditioned drums that it has been using for the waste materials. To continue to service clients, Clean Earth has been forced to purchase new drums, many of which are metal and more expensive than poly drums, which resulted in an unexpected increase in container costs by 40% or more. In another example, due to shortages and tariffs related to steel, steel prices increased approximately 254%, which made metal drums much more expensive.
3. Labor and Transportation: Shortages of qualified drivers to perform hazardous waste disposal services has led Clean Earth to pay significantly higher labor rates to third parties who provide drivers. This combined with increased fuel prices, have doubled Clean Earth’s transportation costs.
At the time of the second contract modification in January 2024, estimating the impact of these increased costs proved difficult. Now that nearly a full year has passed, staff has a firmer grasp of the financial impacts and have identified the need for additional contract authority through the term of the contract. Based on the year-to-date expenditures, staff estimates that $918,000 would be needed for the remainder of the contract term, plus an additional $200,000 in the event of unanticipated needs, for a 4 of 5
total requested amount of $1,118,000. Staff plans to go out to bid in early 2025 for a new HHW collection and disposal contract and to reassess the financial feasibility of continuing the residential HHW door-to-door collections program at that time.
Environmental Review
The award agreement is categorically exempt from CEQA under Section 15301 and Section 15308 of the CEQA Guidelines. Section 15301 of the CEQA Guidelines provides Class 1 (existing facilities) exemption for projects that consists of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. Section 15308 exempts Class 8 projects consisting of actions taken by regulatory agencies as authorized by state law or local ordinance to assure the maintenance, restoration, or enhancement of the environment where the regulatory process involves procedures for protection of the environment. The agreement for household hazardous waste services would not result in any modifications to existing facilities, including the hazardous waste facility in the City Yards, and would ensure the safe and proper disposal of hazardous waste for protection of the environment. Therefore, the award agreement is exempt from CEQA pursuant to Section 15301 and 15308 of the CEQA Guidelines.
Past Council Actions
Meeting Date Description
06/23/20 (Attachment A) Original bid and award of agreement with Clean Earth Environmental Services, Inc. (previously known as
Stericycle Environmental Solutions) for hazardous waste services
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the Resource Recovery and Recycling Fund to increase the amount of contract with Clean Earth Environmental Solutions, Inc. for hazardous waste services.
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Contract Modification Request
Contract #
Current
Authorized
Amount
FY 2024-25
Modified
Request Amount
Future Years
Amount Dept/CIP Account #
Total Revised
Contract
Amount
11051 $1,080,000 $561,000 $557,000 54500003.550070 $2,198,000 Future year funding is contingent on Council budget approval.
Prepared By: Patty Manalo, Administrative Analyst
Approved Forwarded to Council
Attachments:
A. Attachment A - June 23, 2020 Staff Report
B. Attachment B - September 28, 2024 - Third Modification C. June 23, 2020 Staff Report (web link)
D. Attachment C - Clean Earth Levine Form 2024
E. Attachment D - Clean Earth Oaks Form