Item Number: 17
City Council / Board of Directors
Written Communications
Meeting of: January 16, 2024
Submitted By:
Doug Mathews, Director of Public Works and Water
Subject:
Amendment No. 3 to the First Amended, Consolidated and Restated Exclusive Franchise Agreement with Victorville Disposal, Inc. for Solid Waste Refuse and Waste Diversion (Recycling) Services
Recommendation:
That the Honorable City Council:
1. Approve Amendment No. 3 to the First Amended, Consolidated and Restated Exclusive Franchise Agreement between the City of Victorville and Victorville Disposal, Inc. for Solid Waste Refuse and Waste Diversion (Recycling) Services;
2. Authorize the City Manager to make non-substantive changes and clarifications to the Amendment No. 3; and
3. Authorize the Mayor to execute Amendment No. 3.
Fiscal Impact:
Approval and execution of the proposed Amendment No. 3 (Attachment A) will result in increased expenses due to the implementation of additional organic material diversion programs as mandated by California Senate Bill (SB) 1383. These additional expenses will be offset by solid waste rates charged to residential and commercial customers. New solid waste rates were approved per Resolution No. 23-076, adopted on October 3, 2023.
The services to be provided in this amendment will be funded from the Solid Waste Fund (426), including Org 4260400 (Solid Waste) and Org 4262016 (Solid Waste-Household Hazardous Waste). An additional appropriation is not required, because the estimated costs for new organics diversion services and existing household hazardous waste collection services were included in the Fiscal Year (FY) 2024 budget.
Strategic Plan Goal:
This item aligns with Goal A, Financial Sustainability. By approving this contract amendment for new organic material diversion programs and with the adoption of new 3 4
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Solid Waste Rates in October 2023, the City has taken the steps needed to implement state-mandated programs, while ensuring the new services are fiscally accounted for. If the City fails to implement programs to comply with SB 1383, it would be subject to enforcement actions from the State of California Department of Resources Recovery and Recycling (CalRecycle). These enforcement actions could include compliance orders and fines ranging from $500 to $10,000 per violation per day.
Background:
The First Amended, Consolidated and Restated Exclusive Franchise Agreement (Franchise Agreement) between the City and Victorville Disposal, Inc. for Solid Waste Refuse and Recycling Services was approved in November 2009 (Attachment B). The Franchise Agreement was subsequently amended (Amendment No. 1) in August 2014 (Attachment C) to incorporate Household Hazardous Waste (HHW) Collection Center staffing services.
Amendment No. 2 to the Franchise Agreement was approved in July 2018 (Attachment D) and incorporated new commercial organics recycling services and contractor compensation for those new services needed to comply with California Assembly Bill (AB) 1826 (Mandatory Commercial Organics Recycling). Amendment No. 2 also made changes regarding franchise and other fees, and the index used to calculate the annual consumer price index adjustment to the contractor service rates.
California Senate Bill (SB) 1383 was enacted in 2016 and established a state-wide goal to reduce the amount of organic waste sent to landfills by 75% by 2025 as compared to 2014 levels. SB 1383 regulations were finalized in late 2020 and imposed numerous requirements on jurisdictions, including but not limited to: implementing organics diversion programs for residential and commercial waste generators; adopting an enforceable ordinance mandating organics recycling; implementing outreach and education, container contamination minimization, and inspection and enforcement programs; procuring recovered organic waste products (e.g. compost/mulch, etc.) in quantities specified by CalRecycle; taking enforcement actions such as issuing notices of violation and citations to those not complying with organics diversion mandates; and creating and maintaining an “implementation record” to document the jurisdiction’s SB 1383 programs.
The City's franchise agreement with Victorville Disposal needs to be updated to incorporate the new organics diversion programs mandated by SB 1383. These programs include a residential curbside organics collection (green cart) program, in addition to establishing an "implementation record," procurement of recovered organic waste products, outreach and education programs, and a container contamination minimization program. Additional revisions to the franchise agreement are needed to address clarifications to operation of the City's household hazardous waste collection and recycling drop-off center, and the development of a program to recycle construction and demolition material.
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Discussion:
The proposed Amendment No. 3 to the Franchise Agreement incorporates the following changes:
1. Section B: Updates Section 4.04 and adds new Section 4.05 to Article 4 (“TERM OF AGREEMENT”), which provides for a minimum contract term of 10 years to allow Victorville Disposal, Inc. time to amortize the cost of additional trucks and approximately 32,000 new carts needed to implement a new residential organics (green cart) program.
2. Section C: Article 5 (“CONTRACTOR SERVICES”) of the existing Franchise Agreement is amended in its entirety to incorporate references to organics service at City facilities. Clarifies issues regarding operation of the Recycling Drop-off Center, revenue sharing from e-waste, and City payment of disposal costs for bulky items disposed at the Drop-off Center. Removes reference to “select” commercial recycling. Revises the requirement for apartment complexes of five units and above to use bins (vs. four units previously).
3. Section D: Updates Section 10.06 of, and adds new Sections 10.06.01 and
10.06.02 to Article 10 (“CONTRACTOR COMPENSATION AND RATES”) to include a five (5) percent CPI cap effective July 1, 2024, and adds SB 1383 Services Rate Review and Collection Services Rate Review provisions.
4. Section E: Adds new definitions to Attachment A of the Franchise Agreement related to SB 1383 programs.
5. Section F: Adds Article 16, (SB 1383 Services) including: SB 1383 compliant collection services using black, green, blue, and tan containers; organic waste and recyclable material capacity guarantee; contamination monitoring; route reviews; education and outreach; generator waiver program coordination; assistance with City inspection and enforcement efforts and complaint investigations; procurement of recovered organic waste products; providing SB 1383 compliant labels for solid waste, recycling, organics, and food waste containers; implementation record program.
6. Section G: Adds Article 17, taking the HHW Collection Center operations language from Amendment No. 1 and incorporating it into Article 17. Eliminates the $30,000 compensation cap (set back in 2018) and incorporates an annual CPI based compensation adjustment as is used to adjust hauling services.
7. Section H: Adds Article 18, to clarify that the City will keep revenues which may become available from regulations implementing California Senate Bill (SB) 54 (Plastic Pollution Prevention and Packaging Producer Responsibility Act of 2022).
8. Section I: Amends Attachment B (Scope of Services) of the Franchise Agreement to reflect new organics services (see summary of Scope of Services revisions below).
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9. Section J: Amends Attachment D (Customer Rate Schedule) of the Franchise Agreement in its entirety to conform with the new solid waste rates adopted by Resolution No. 23-076 in October 2023.
10.Section K: Amends Attachment E (Contractor Service Unit Rates) of the Franchise Agreement in its entirety to reflect the current rates. Includes language that the Contractor Service Unit Rate for residential units with Standard Service will be reduced by $4.20 per month until residential organics collection has been fully implemented.
Revisions to Scope of Services
The Scope of Services from Amendment No. 2 (Attachment B to the Franchise Agreement) has been updated as summarized below:
•Adds references to residential Organic Material collection and carts. •Adds bulky item pickup for multi-family residential units with Standard [cart] Service.
•Requires implementation of radio frequency identification devices or a similar/equivalent program to track set outs, missed services, etc. by July 1, 2024.
•Provides three Free Dump Days per year and removes reference to two “Cleanup Days” to remove confusion with the City’s volunteer Community Cleanup Day events.
•Requires the contractor to provide SB 1383 services as described in Article 16 of the Franchise Agreement.
•Requires the contractor to divert 65% of construction and demolition (C&D) material hauled by Victorville Disposal, Inc.
•Requires the contractor to develop a C&D recycling facility within the City by July 1, 2025, to divert 65% of C&D materials, per State of California Green Building Code (CalGreen) requirements.
•Within 90 days of the adoption of the agreement, requires the contractor to develop a plan for review/approval by the City for outreach and education, procurement of recovered organic waste product, contamination monitoring, and route reviews.
In summary, Amendment No. 3 will provide for additional services needed by the City to comply with SB 1383 mandates. The proposed amendment also includes needed changes and clarifications related to staffing of the City’s HHW Collection Center, operation of the Recycling Drop-off Center, addition of construction and demolition material recycling services, updates to bulky item pick up service, and provision of Free Dump Days.
Amendment No. 3 to the Franchise Agreement has been reviewed by legal counsel and management of Victorville Disposal, Inc.
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Staff remains available for any questions the Council may have.
Attachments: A. Amendment No. 3 to the Franchise Agreement B. 2009 - First Amended, Consolidated and Restated Exclusive Franchise Agreement
C. 2014 - Amendment # 1 to the Franchise Agreement
D. 2018 - Amendment No. 2 to the Franchise Agreement