City Council
Report
City Council Meeting: April 22, 2025
Agenda Item: 4.A
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To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Resource Recovery & Recycling
Subject: Authorize Fourth Modification of Agreement with Southern California Disposal Company for Collection Materials Transfer Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 and 15308 of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to negotiate and execute a fourth modification to agreement #9011 in the amount of $4,178,757 (including a 20% contingency) with Southern California Disposal Company for solid waste transferring services for the Public Works Department. This will result in the same 15-year term agreement with a new total amount not to exceed $41,438,757, with future year funding contingent on Council budget approval.
Summary
The City uses Southern California Disposal Company (SCD), based in Santa Monica and adjacent to the City Yards, to transfer the City’s organic materials (green container items), landfill trash materials (black container items), and capital improvement project construction debris to regional facilities. The contract’s original 15-year term expires on December 1, 2026. Due to unforeseen external factors, such as increases to the cost of fuel, transportation, labor, and materials, as well as inflation spikes and supply chain issues brought on by the Covid-19 pandemic, additional funding is required at this time to pay for services through the remainder of the initial contract term. Staff recommends that Council authorize a fourth modification to the City’s agreement with SCD to increase the amount of the contract by $4,178,757 (including a 20% contingency) for a new total amount not to exceed $41,438,757. Funding for solid waste transferring 2 of 5
service is critical. Sanitation is a public health utility service that cannot be disrupted without significant impact to the community, and it is an essential service that supports the Council’s strategic priority of clean streets and safe neighborhoods.
Discussion
The City’s Resource Recovery and Recycling (RRR) Division provides municipal solid waste management services to all Santa Monica residents and businesses. After collection, RRR drivers transport the solid waste to a transfer station where the materials are then placed into long-haul trailers and transferred to regional facilities.
Most solid waste facilities are located far from Santa Monica. Utilizing a nearby transfer station saves time and allows RRR drivers to return to their collection routes quickly to continue servicing their customers.
After issuing a request for proposal for municipal transferring services, the City entered into agreement 9011 (CCS) with SCD for an initial term of 15 years from December 1, 2011, through December 1, 2026. Subsequently, the City entered into three contract modifications for the following:
• First contract modification: clarified and expanded existing transfer services to include recyclable material to be transferred by SCD; • Second contract modification: increased the rate to haul curbside recyclables resulting in an increase of the not to exceed amount to $1,260,000 for hauling curbside recyclable materials only; and
• Third contract modification: extended the termination date for interim transfer of curbside recyclable material services to December 31, 2021 and authorized SCD to use a portion of the City’s property, located at the southwest corner of the City Yards (the Hanson Lot).
Since the contract’s initial execution, several unforeseen external factors have affected the waste management industry, including increases in the cost of fuel, transportation, and labor, as well as inflation spikes and supply chain issues due to the Covid-19 pandemic. Steel prices also rose, affecting the purchase price of heavy-duty trash 3 of 5
collection vehicles and processing equipment. Finally, the initial projections from 2008 may not have fully accounted for the level of materials collected over such a long timeframe. Now in its 14th year of the contract, additional funding is required to pay for the last 14 months of the contract term before the initial 15-year term expires on December 1, 2026. The contract has three five-year renewal options available beyond this initial term. The requested amount is based on current contracted material pricing with estimated CPI increases through December 1, 2026.
Despite these factors and associated cost increases, SCD’s proximity to the City Yards helps mitigate RRR’s financial burden in other areas such as overtime, fuel, and vehicle maintenance and repairs that would occur if materials had to be hauled to farther facilities. In addition, SCD’s location minimizes RRR drive time, increases the time that collection drivers remain on their routes to service their customers, and enhances the ability to achieve the Council’s strategic priority of clean streets and safe neighborhoods.
Environmental Review
The contract for solid waste transferring services is categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15301 and 15308 of the CEQA Guidelines. Section 15301 of the CEQA State Guidelines provides Class 1 (Existing Facilities) exemption for projects that consist 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. The contract for solid waste transferring services would not result in any modifications to existing landfills or disposal facilities. Solid waste transferring services currently exist, and the contract would not expand or materially change existing transfer facilities or waste disposal operations. The selected vendor is required to comply with existing solid waste regulations and provide similar services to those currently being required and provided. Therefore, the project is categorically exempt as set forth in Section 15301 of the CEQA State Guidelines. 4 of 5
The contract is also exempt pursuant to Section 15308 of the CEQA Guidelines. Section 15308 (Class 8 Actions for Protection of Environment) exempts actions taken by a regulatory agency, as authorized by State and local ordinances, to assure the maintenance, restoration, enhancement, or protection of the environment where the regulatory process involves procedures for the protection of the environment. The contract would ensure City compliance with solid waste disposal regulations for the protection of the environment including:
• Integrated Waste Management Act (IWMA) of 1989 requires cities to permit and regulate solid waste handling;
• Assembly Bill 341 (2011) requires both businesses that generate four cubic yards or more of solid waste and multifamily projects with five units or more to participate in a recycling program;
• Assembly 1826 (2014), requires businesses, including public entities and multifamily projects, to recycle their organic waste. Businesses must develop strategies to reduce and/or arrange for recycling services for the following types of organic waste: food waste, food-solid paper, green waste, landscaping and pruning waste, and non-hazardous wood waste;
• Senate Bill 1383 (2016) established methane emission reduction targets for California, requiring a 50 percent reduction of organics sent to the landfill by 2020, and a 75 percent reduction by 2025; and
• City’s Zero Waste Plan (Updated 2019) provides an environmental policy framework to guide the City on its path to achieving zero waste.
The contract requires the solid waste transferring services vendor to comply with both State and local regulations for disposing of waste and ensures the protection of the environment since the contract contains compliance requirements with State mandates.
Therefore, the contract is categorically exempt as set forth in Section 15308 of the CEQA State Guidelines.
Past Council Actions
Meeting Date Description
11/25/2008 Original Bid and Award of Agreement with Southern California 5 of 5
(Attachment A) Disposal Company for Solid Waste Transferring Services 11/12/2019
(Attachment B)
Authorization of Third Contract Modification with Southern California Disposal for Recyclable Materials Processing Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Resource Recovery and Recycling Fund to increase the amount of contract 9011 with Southern California Disposal Company for solid waste transferring services. Funds will be included in the FY 2025- 27 Proposed Biennial Budget.
Contract Modification Request
CT 9011 Southern California Disposal Company
Current
Authorized
Amount
FY 2025-26
Request
Amount
Future
Years
Amount
Dept Account # Total Contract
Amount
$37,260,000 $2,673,941 $1,504,816 54500002.550150 $41,438,757 Future year funding is contingent on Council budget approval.
Prepared By: Ryan Kraemer, Senior Administrative Analyst Approved Forwarded to Council
Attachments:
A. November 25, 2008 Staff Report
B. November 12, 2019 Staff Report
C. July 17, 2013 Notice to Proceed
D. December 2, 2008 Executed Contract #9011
E. November 5, 2020 Executed 3rd Contract Modification #9011 F. SCD - Levine Act
G. SCD - Oaks Initiative