CITY OF SEBASTOPOL
CITY COUNCIL
AGENDA ITEM
Meeting Date: March 15, 2022
To: Honorable Mayor and City Councilmembers
From: Larry, McLaughlin, City Manager
Toni Bertolero, Engineering Consultant
Subject: Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement Recommendation: Approval of Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement with Republic Services of Sonoma County, Inc. and Recology Sonoma Marin to Comply with SB 1383 Requirements
Funding: Currently Budgeted: _______ Yes _______ No ___X___ N/A Account Code/Costs authorized in City Approved Budget (if applicable) ____AK____ (verified by Administrative Services Department) INTRODUCTION/PURPOSE:
The item is to request Council approval of the Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement with Republic Services of Sonoma County, Inc. (“Republic”) and Recology Sonoma Marin (“Recology”) to comply with Senate Bill 1383 Requirements.
BACKGROUND:
In 2016, Governor Brown signed Senate Bill 1383 (SB 1383) into law to reduce emissions of short-lived climate pollutants, such as methane, which are generated from landfilling organic material like food scraps and yard trimmings. SB 1383 is the most significant waste reduction mandate to be adopted in California in the last 30 years. SB 1383 establishes statewide targets to reduce organic material disposed in landfills by 75% and increase edible food recovery by 20% by 2025, compared to the 2014 baseline.
The City of Sebastopol (as well as other cities in Sonoma County) is party to a Waste Delivery Agreement with Republic and a Franchised Hauler Agreement with Recology and Republic. The proposed Omnibus Amendment (Attachment 1) would amend these two agreements pertaining to garbage and compost collection services in order to comply with SB 1383.
DISCUSSION:
As described in the letter from the Sonoma County Public Works Department dated May 6, 2021 (Attachment 2), the County proposed that MOA member jurisdictions review existing agreements regarding the current commercial food waste program due to changes mandated by SB 1383. Because all jurisdictions must implement SB 1383 requirements through an “enforceable mechanism,” existing agreements need to be updated. In this report, “MOA member jurisdictions” refer to cities in the county who are party to agreements pertaining to operation of the Central Landfill and the County Transfer Station.
The various MOA member jurisdictions and the County discussed the proposal as outlined in the May 6, 2021 letter and it was determined that the needs by each member jurisdiction to comply with SB 1383 can be best Agenda Item Number 8 Agenda Item Number 8
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served by having the commercial food waste program fully funded under each member jurisdiction’s franchise agreement with Recology.
The Omnibus Amendment effectively deletes the provisions of the WDA and FHA that require Recology to operate limited commercial food waste programs funded only though the gate rates. Going forward, these programs will be funded through the City’s Franchise Agreement with Recology (Attachment 3). This will retire the existing commercial food waste/dry waste program and eliminate the $4.22/ton gate fee that funds the program, which allows jurisdictions to manage their SB 1383 obligations directly with the haulers through the franchise agreements. This solution avoids reliance on outdated language in the MOA and related agreements that would need to be supplemented by yet additional agreements in order to establish compliance.
If approved, the Omnibus Amendment will be effective as of April 1, 2022.
GOALS:
This action supports the following City Council Goals and General Plan Actions:
• COS 9-13: Continue the citywide recycling program, actively encourage recycling citywide, including the recycling/composting of food waste, and advocate for a regional composting facility. • COS 9-14: Continue efforts to reduce solid waste generation throughout the life of the General Plan.
PUBLIC COMMENT:
As of the writing of this staff report, the City has not received any public comment. However, staff anticipates receiving public comment from interested parties following the publication and distribution of this staff report.
Such comments will be provided to the City Council as supplemental materials before or at the meeting. In addition, public comments may be offered during the public comment portion of the agenda item.
PUBLIC NOTICE:
This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to schedule meeting date.
FISCAL IMPACT:
There are no direct fiscal implications from the requested action on the City. The fiscal impacts to the City for SB 1383 costs are passed along directly to customers receiving service under the requirements of the new regulations. The garbage rates under the City’s Franchise Agreement with Recology Sonoma Marin were modified and approved by Council and became effective in January 2022. The gates fees are still being paid by the customer, but through a different mechanism (i.e., through Recology rather than through Republic).
RECOMMENDATION:
Staff recommends the Sebastopol City Council approve the Memorandum of Understanding Between the Jurisdictions of Cloverdale, Cotati, Healdsburg, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, Windsor, and the County of Sonoma and the Sonoma County Waste Management Agency Regarding Implementation of SB 1383 Regulations and authorize the City Manager to sign the MOU.
Attachments:
1 Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement 2 Letter from Zero Waste Sonoma dated May 6, 2021
3 Franchise Agreement with Recology
4 Waste Delivery Agreement with Republic
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1 OMNIBUS AMENDMENT TO WASTE DELIVERY AGREEMENT AND
FRANCHISED HAULER AGREEMENT
This Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement (this “Amendment”) is entered into as of January 1, 2022, by and among the City of [_____] (“City”), Republic Services of Sonoma County, Inc. (“Republic”), and Recology Sonoma Marin (“Recology”).
WHEREAS, each of the cities of Cloverdale, Cotati, Healdsburg, Rohnert Park, Santa Rosa and Sebastopol (the “Committed Cities” or “Cities”) is party to a Waste Delivery Agreement with Republic (each, a “WDA”), and a Franchised Hauler Agreement with Republic and Recology (each, an “FHA”);
WHEREAS, Republic and Recology are parties to an Agreement for Operations of Sonoma County Transfer Stations and Materials Recovery Facility (the “Prime Subcontract”), pursuant to which Republic subcontracted to Recology certain of Republic’s obligations under the Amended and Restated Agreement for Operation of the Central Landfill and County Transfer Stations (the “MOA”) between the County of Sonoma and Republic;
WHEREAS, the MOA, Prime Subcontract, WDAs and FHAs (collectively, the “County Agreements”) contemplate that Recology will provide a limited program for collection of Commercial Food Waste and Dry Commercial Mixed Waste within urban areas of City (the “Programs”), to be compensated solely through a portion of the Facility Operations Service Fee that Recology receives under the Prime Subcontract;
WHEREAS, the Programs and related compensation contemplated by the County Agreements do not meet the requirements of SB 1383, including provision of organics service to all residential and commercial generators (not just urban customers), periodic route reviews to monitor contamination, periodic compliance reviews to monitor participation, and detailed reporting related to the foregoing;
WHEREAS, the parties believe that the needs of City to comply with SB 1383 can be best served by having City’s organic waste and Dry Commercial Mixed Waste programs fully funded under its franchise agreement with Recology, rather than attempting to implement an SB-1383 compliant program by supplementing the existing (noncompliant with SB1383) Programs with additional services under City’s franchise agreement;
WHEREAS, eliminating the funding for the Programs under the Prime Subcontract will allow the Gate Rates charged to Recology (as City’s franchised hauler) on Committed City Waste delivered to the County facilities to be reduced (compared to what the Gate Rates would otherwise be) by the portion that previously funded the Programs; NOW, THEREFORE, the parties agree as follows:
1. Effective as of April 1, 2022, and subject to Section 3 below, Section 2.3 of City’s WDA, and Sections 3 and 4 of City’s FHA (and of Exhibit C to City’s WDA, which sets forth the form of the FHA), are hereby deleted and of no further force or effect.
2. Effective as of April 1, 2022, and subject to Section 3 below, City’s franchise agreement is hereby amended to add the following:
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2 “To maximize route efficiency, Contractor may collect Commercial Food Waste in its residential collection vehicles, commingled with residential organics, provided that the tonnage of Commercial Food Waste so collected in City, the other cities that are party to a Waste Delivery Agreement with Republic where Recology is the franchised hauler, and the unincorporated County combined, does not exceed 15% of the total tonnage of Commercial Food Waste collected by Contractor from such jurisdictions (calculated on an aggregate (combined) basis, not jurisdiction by jurisdiction by jurisdiction), and provided further that Contractor compensates Republic Services of Sonoma County, Inc. (“Republic”) appropriately for such commingled Commercial Food Waste, in a manner to be mutually agreed by County, Republic and Contractor.”
3. The effectiveness of Sections 1 and 2 is subject to satisfaction of all of the following conditions:
(a) The MOA and Prime Subcontract are amended to, among other things: (i) adjust the Gate Rate and the Facility Operations Service Fee to eliminate the portion that funds the Programs (currently $4.21 per ton), on all tons on which such portion is included, (ii) revise Republic’s diversion tonnage goal in Section 9.2 of the MOA and Section 5.4 of the Prime Subcontract from 67,000 to 44,735 tons per year, and Recology’s diversion tonnage goal in Section 5.4 of the Prime Subcontract from 46,173 to 23,908 tons per year; (iii) delete the second sentence of the first paragraph of Section 9.7 of the MOA, and (iv) delete Section 5.16 of the Prime Subcontract, all such amendments to be effective as of April 1, 2022;
(b) On or before April 1, 2022, (i) each of County and the Committed Cities enters into a written amendment to its respective franchise agreement with Recology that includes a rate adjustment that, in Recology’s sole but reasonable opinion, is sufficient to fully fund the organic waste and, if continued, the Dry Commercial Mixed Waste programs provided by Recology in such jurisdiction pursuant to the franchise agreement, and (ii) each other of the Committed Cities enters into an omnibus amendment to its WDA and FHA that is identical in all material respects to this Amendment. Any of the conditions set forth in this subsection (b) may be waived by Recology in writing to the other parties hereto.
4. In the event of any conflict between this Amendment and City’s WDA or FHA, this Amendment shall govern. This Amendment may be executed in counterparts and/or by electronic signature (e.g. DocuSign). As used in this Amendment, “including” and its variants mean “including without limitation.”
5. Nothing contained herein shall change the definition of Committed Waste within the WDA. More specifically, Commercial Food Waste and Dry Commercial Mixed Waste are and shall continue to be considered Committed Wastes. This Amendment does not modify the categories of Waste exempt from payment of the Facility Operations Fee in Section 8.3 of the Prime Subcontract.
6. Except as expressly amended herein, each of the County Agreements shall remain in full force and effect.
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3 IN WITNESS WHEREOF, this Amendment is entered into as of the date first written above.
City of [_____]
By:
Name:
Title:
Date:____________________________
APPROVED AS TO FORM:
________________________________
City Attorney
ATTEST:
City Clerk
Republic Services of Sonoma County, Inc.
By:
Name:
Title:
Date:
Recology Sonoma Marin
By:
Name:
Title:
Date:
ACKNOWLEDGED:
County of Sonoma
By:
Name:
Title:
Date:____________________________
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FRANCHISED HAULER'S AGREEMENT TO BE BOUND BY
CITY'S WASTE DELIVERY COMMITMENT
This agreement is entered into between Recology Sonoma Marin, a California corporation ("Franchised Hauler"), the City of Sebastopol ("City") and Republic Services of Sonoma County, Inc. ("Contractor" ). All other words and phrases in this agreement with initia l capital letters are d'efined in the attached Waste De livery Agreement.
This agreement sha ll become effective on the date of the closing of the transactions contemplated by the Asset Purchase Agreement dated August 11 , 2017 between Recology Inc., the parent company of Franchised Hauler, and The Ratto Group of Companies Inc. and its owners and afti liated entities.
Franchised Hauler acknowledges that it has read and understood the foregoing Waste Deli very Agreement ("Waste Deli very Agreement") between the City and Contractor. Franchised Hauler agrees to fully honor and comply with the City's Waste deli very obligations to Contractor in the Waste Deli very Agreement, and as the Waste Delivery Agreement may hereafter be modified or extended by the City and Contractor at their sole discreti on. Franchised Hauler shall de liver a ll such Waste to Contractor and the County Facilities as required by and in accordance with the Waste De livery Agreement.
The Term of Franchised Hauler's obligations hereunder sha ll be coterminous with the Term of the City's Waste De livery Agreement with Contractor, and therefore will not expire until the Term of the Waste Delivery Agreement, as it may be extended by City and Contractor, expires.
Without limiting the generality of the foregoing, Franchised Hauler agrees that:
I. Notwithstanding any other term, condition or provision in Franchised Hauler's franchise agreement with the City, Franchised Hauler will deliver a ll Committed City Waste that is collected, transported or otherwise handled by Franchised Hau ler to the Contractor and County Facilities for the Term of the Waste Delivery Agreement, as it now exists or may hereafter be modified or extended, except for Waste that is excluded from the City's Waste delivery obligation to Contractor as described in Section 2.2 and Exhibit B of the Waste Delivery Agreement. Franch ised Hauler sha ll do all things necessary and execute any fu rther agreements or instruments required to effectuate Franchised Hauler's obligation in this agreement. In add ition, Franchised Hau ler shall de liver all Construction and Demolition Debris collected in the City to the County Facilities. This agreement by Franchised Hauler amends, supersedes and controls over any contrary or inconsistent provision in any agreement that Franchised Hauler has, or may hereafter enter into, with the City.
2 . Franchised Hauler sha ll pay Contractor's invoices for de livery of Waste collected by Franch ised Hauler in the City within thirty (30) days of the date of the invoice. Any unpaid invoiced amounts not pa id within said thi11y (30) days shall bear interest at the rate of one and one ha lf percent ( 1.5%) per month until paid. Contractor Agenda Item Number 8 Agenda Item Number 8
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shall be entitled to ecov~r its attorneys' fees. expert witness fess and all other costs of litigation incurred in coll ecting delinquent invoices from Franchised Hauler.
3. Franchised Hauler shall commence the City-wide collection of Food Waste from commercial Premises in the City when directed to do so by the City. The Franchised Hauler's costs of this program are being fu lly compensated through the Facility Operations Service Fee as defined in the Agreement for the Operation of Sonoma County Transfer Stations and Material Recovery Facility dated March 21. 2013 between The Ratto Group of Companies, Inc and Republic Services of Sonoma County, Inc. that has been subsequently assigned to Recology Sonoma Marin., Franchised Hauler agrees not to seek additional compensation from City or Contractor for the Franchised Hauler's costs of implementing and conducting the commercial Food Waste coll ection program for the Term of the Agreement.
4. Franchised Hauler shall commence the City-wide collection of dry commercial Mixed Waste from commercial Premises in the City when directed to do so by the City. The Franchised Hauler's costs of this program are being fully compensated through the Facility Operations Service Fee as defined in the Agreement for Operation of Sonoma County Transfer Stations and Material Recovery Facility dated March 21, 20 13 between The Ratto Group of Companies, Inc and Republic Services of Sonoma County, Inc. that has been subsequently assigned to Recology Sonoma Marin. Franchised Hauler agrees not to seek additional compensation from City or Contractor for the Franchised Hauler's costs of implementing and conducting the dry commercial Mixed Waste collection program for the Term of the Agreement.
5. Franchised Hauler shall defend and indemnify the City from and against any and all losses and liabilities associated with the Franchised Hauler's breach of this Agreement.
6. The parties acknowledge that the implementation of the Waste Delivery Agreement will result in an increase in the cost of disposal at the County Facilities. City agrees that Franchised Hauler may pass through the increase in disposal costs arising from and after the Effecti ve Date of the Waste Deli very Agreement. Franchised Hauler shall promptly notify City of the rate increase for each service provided by Franchised Hauler necessary to defray the increased cost of disposal at the County Facilities under the Waste Delivery Agreement.
7. This agreement shall bind Franchised Hauler and its subcontractors and affiliates and each of their respective successors and assigns. [Signature Page Follow!!i]
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IN WITNESS WHEREOF, the parties have entered into this Franchised Hauler's Agreement To Be Bound by City's Waste Delivery Commitment.
Dated: 17. J 1.0 j 11
CITY OF SEBASTOPOL
CONTRACTOR:
REPUBLIC SERVICES OF SONOMA
COUNTY, INC., A DELAWARE
CORPORATION
FRANCHISED HAULER:
RECOLOGY SONOMA MARIN, A
CALIFORNIA CORPORAT ION
3 ecology ..
Reviewed by:
~
Legal
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