Agenda Item No. 0
CITY OF YUCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Jennifer Crawford, Assistant City Manager, PV9
FOR: City Council Meeting of June 13, 2022
SUBJECT: Amendment No. 8 to Waste Disposal Agreement
RECOMMENDATION:
That City Council approve and authorize the Mayor to execute Amendment No. 8 to the Waste Disposal Agreement ("WDA") between the City of Yucaipa and County of San Bernardino.
BACKGROUND:
In 1998 the City of Yucaipa entered into a Waste Disposal Agreement (WDA) with the County of San Bernardino (County), obligating the City to deliver all controllable waste to the San Timoteo Landfill for 15 years and obligating the County to provide capacity for that waste at the lowest tipping fee rate. A total of 15 cities/towns in the County became signatories to identical agreements.
On February 25, 2002, City Council approved Amendment No.1 to the WDA that would allow Burrtec Waste Industries, Inc. (Burrtec) to bring an additional 300,000 tons/year of Article 19 Solid Waste (In -County Non-WDA waste) that was being delivered out of the County back into the County landfill system. Amendment No. 1 generated revenue for all 16 (Adelanto became a part of the WDA) participating WDA cities, and the funding was split 50% based on population and 50% based on equal share.
On June 9, 2003, City Council approved Amendment No. 2 of the WDA, which authorized Burrtec to bring an additional 75,000 tons/year that was being delivered out of the County back into the County landfill system increasing the total Article 19 tonnage to 375,000 tons/year.
On September 10, 2007, City Council approved Amendment No. 3 of the WDA, which authorized a Comprehensive Disposal Site Diversion Program (CDSDP) to divert self -haul waste at the ten major landfills in the County. Under this amendment, a separate $10 per ton fee will be charged to all self -haul loads brought to the landfill in addition to the current tipping fee. The CDSDP will target loads that have not been through a recycling process and have diversion potential, such as:
self -haul loads, roll -offs, construction demolition boxes, grocery store compactor loads, and miscellaneous truckloads brought in from other sources (including public works and park and recreation vehicles). The intent of Amendment No. 3 was to assist the County and WDA cities to achieve the State's AB 939 fifty percent (50%) diversion requirement. -62-
On November 26, 2007, City Council approved Amendment No. 4 to the WDA with the County of San Bernardino; however, the amendment became null and void when not all of the 16 participating cities/towns approved the amendment by the deadline.
On February 14, 2011, City Council approved Amendment No. 4 of the WDA, which authorized the County to adjust the dates used to establish the change in the cost of living to an earlier date (from February to September), thus allowing the earlier calculation of the required annual cost of living adjustment. The amendment provided the City and Burrtec the necessary time to meet the noticing requirements pursuant to Prop. 218 and prior to the landfill tipping fee adjustments that go into effect on July 1 st of each year.
On October 22, 2012, City Council approved Amendment No. 5 of the WDA, which extended the end date of the WDA to June 30, 2016, under the same terms and conditions. The City of San Bernardino did not execute Amendment No. 5, reducing the participating WDA cities to 15.
In 2013 the fees generated from Article 19 (Amendment No. 1 and No. 2) ceased for all WDA cities when the County terminated the landfill operators' contract with Burrtec and entered into an agreement with Athens.
On April 25, 2016, City Council approved Amendment No. 6, which modified the City's existing contract termination date of June 30, 2016 to June 30, 2021, allowed for a reduction in the WDA rate (from $39.38 to $37 per ton), required the County to hold an annual meeting to discuss the financial statement for the County landfill system, and included language for sharing the net revenue of In -County Non-WDA waste generated based on the revenue sharing formula established in Amendment No. 1.
On May 10, 2021, City Council approved Amendment No. 7, which changed the expiration term of the WDA to June 30, 2026, resets the WDA landfill tipping rate (from $39.12 to $38 per ton), and continues to include the existing annual fixed renewal discount adjustment of $0.82 for future rates, beginning July 1, 2022, through the end of the negotiated contract term. All other terms and conditions of the WDA, including without limit those contained in any prior amendment, shall remain in full force and effect.
DISCUSSION:
On March 22, 2022, the City received the annual WDA Contract rate calculation notification (see attached). The notification proposed a WDA rate of $43.41 per ton effective July 1, 2022, through June 30, 2023. This resulted in an increase of $5.41 per ton from $38.00 per ton this fiscal year to $43.41 per ton next fiscal year. However, at the same time, the gate rate for the general public in the next fiscal year is not being increased. An analysis of the WDA rate compared to the public gate rate (the rate paid at the landfill), since the inception of the WDAs, showed an average difference of approximately 15%. Based on this analysis and as a result of recent meetings with the County of San Bernardino's Executive Staff, County Department of Public Works Staff and other WDA cities there has been a mutual agreement on behalf of all parties to recommend amending the current WDA contract to provide a provision to cap the WDA per ton fee to eighty- -63-
five percent of the public gate per ton rate. If approved, the City would agree to participate in the WDA for the remaining term and not terminate the contract without cause. Currently, the posted gate rate is $47.94 for FY 2022-23. Thus, the WDA rate would be capped at $40.75 for the same FY 2022-23 rate year. The WDA amendment, once approved by all cities/towns and the County Board of Supervisors, would reduce the current calculated FY 2022-23 WDA rate of $43.41 to $40.75.
FISCAL IMPACT:
Amendment No. 8 contains an increase to the landfill tipping fee of $2.75 per ton (instead of the calculated $5.41 increase) and is a component of the rates for residential and commercial solid waste collection. Contingent on the adoption by all 15 cities/towns and the County, the increase in cost will be included in the Fiscal Year 2022/23 annual rate review process. It is important to note that Amendment No. 8 also sets a maximum limit to the landfill tipping fee for the duration of the agreement term, as previously described, and allows the City to better plan for future years' budgeting of solid waste disposal services and costs.
Attachment: Amendment No. 8 to Waste Disposal Agreement Letter from the County of San Bernardino Department of Public Works Approved b ` \ \ c9rL g c-
pP Y _
• A
AMENDMENT NO. 8 TO THE
WASTE DISPOSAL AGREEMENT NO. 98-679
On August 11, 1998, the City of Yucaipa ("City") and the County of San Bernardino ("County") entered into a Waste Disposal Agreement ("WDA"). The parties hereby amend the WDA, on the Effective Date as provided herein, by their respective execution of this agreement (hereinafter "Amendment').
Recitals
A. The parties have previously entered into the following amendments to the WDA. Amendment No. 1 to the WDA was to implement the "Article 19 Solid Waste" component of the County's waste management system and define the City's share of that revenue. Amendment No. 2 was to increase the annual maximum limits of "Article 19 Solid Waste" in the County landfill system. Amendment No. 3 allowed the County to charge the fee of $10.00 per ton (prorated) for identified controllable waste of the City (e.g., roll off container trucks and other County/City vehicles such as pickups and dump trucks) and have such waste subject to being processed in the recycling program. Amendment No. 4 allowed the County to calculate the annual cost of living adjustment earlier in the calendar year. Amendment No. 5 extended the end date of the WDA to June 30, 2016. Amendment No. 6 extended the term of the WDA to June 30, 2021, applied an annual fixed WDA renewal discount adjustment of $0.82 per ton for the term of the WDA, and allowed the County to enter into agreements to accept in -County waste from non-WDA users of the Disposal System at a rate lower than the WDA Contract Rate in exchange for sharing the net revenue generated from those agreements. Amendment No. 7 reset the WDA Contract Rate and extended the term for five (5) years to June 30, 2026.
B. In connection with the ongoing administration of the WDA, the parties have determined it is now in their best interests to cap the WDA Contract Rate in order to maintain a 15% buffer between the WDA Contract Rate and the County's posted gate rate.
C. This change will assist both the City and the County in planning for future fiscal years' budgeting of solid waste disposal services and costs by putting a mechanism in place for the future to prevent compaction with the County's posted gate rate.
NOW THEREFORE, in consideration of the forgoing recitals and the following covenants and promises the Parties agree as follows:
1. Amended Section 4.2 CONTRACT RATE. (A) Generally. This section is amended in its entirety to read:
SECTION 4.2. CONTRACT RATE. (A) Generally. Effective July 1, 2022, the Contract Rate payable by each Franchise Hauler shall be $40.75 per ton, subject to potential adjustment necessary to reflect the circumstances set forth below:
(i) increased costs incurred by the County (in excess of available insurance proceeds) due to the occurrence of one or more Uncontrollable Circumstances, including Changes in Law; and
(ii) escalation during the Term of this Agreement calculated in accordance with Section
4.2(B). In no case will the calculation of escalation exceed 85% of the County approved general public gate rate (currently $59.94 minus the current CDSDP recycling fee of $12.00), as such fees may be amended.
Prior to adjusting the Contract Rate as a result of any of the circumstances described in Section
4.2(A)(i), the County shall utilize the following remedy: reduce the costs of operating the Disposal System to the extent practicable.
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Any adjustments to the Contract Rate permitted by Section 4.2(A)(i) shall be calculated by the County to reflect the actual costs or expenses of addressing the circumstance or circumstances pursuant to which the adjustment is authorized, and shall also reflect, where applicable, the then remaining capacity in the Disposal System. Such adjustment may not reflect circumstances other than the circumstances described in Section 4.2(A)(i).
2. Amended Section 4.2. CONTRACT RATE. (B) Calculation of Escalation. This section is amended in its entirety to read:
SECTION 4.2. CONTRACT RATE. (B) Calculation of Escalation. For purposes of Section 4.2(A)(ii), the Contract Rate shall be adjusted in accordance with the formula described in this Section each July 1 during the term hereof, commencing July 1, 2022. The adjustment shall be calculated in accordance with the following formula:
Contract Rate = Fixed Portion + [Escalating Portion x Index] Where,
Fixed Portion = $10.87
Escalating Portion = $17.63
Index = Price Index, which shall be determined in accordance with the following formula:
= .7[PPI,/PPI2] +.3[EIl/EI21
PPI, = The Producer Price Index, Industrial Commodities Commodity Data, as published at the United States Department of Labor, Bureau of Labor Statistics web site, Series ID WPU03 thru 15 for the month of September in the year prior to the year for which the adjustment is being made (e.g., the adjustment effective July 1, 2011 will use the September 2010 value)
PPIz = Producer Price Index, Industrial Commodities Commodity Data for the month of September, 1997
El, = Employment Cost Index, Total Compensation, Private Industry All Workers, as published at the United States Department of Labor, Bureau of Labor Statistics web site, Series ID:
CIU20100000000001 for the last quarter of the year preceding the year for which the adjustment is being made (e.g., the adjustment effective July 1, 2011 will use the third quarter, 2010 value)
Elz = Employment Cost Index, Compensation, Private Industry All Workers, as published at the United States Department of Labor, Bureau of Labor Statistics web site, Table 3, established for the third quarter of 1997.
Effective July 1, 2022, and each July 1 thereafter during the term of the Agreement, the Contract Rate adjustment will be calculated as provided above, except that an annual fixed WDA renewal discount adjustment of $0.82 per ton will be applied after the annual Cost of Living Adjustment (COLA) adjustment.
In no case will the adjustment to the Contract Rate exceed 85% of the County's approved general public gate rate (without the current CDSDP recycling fee of $12.00), as such fees may be amended. For example, the current County's posted gate rate is $47.94 ($59.94 minus the $12 CDSDP fee). Therefore, the WDA Contract Rate cannot be more than 85% of that rate, which is $40.75. However, if the County adjusts its posted gate rate in any future year of the term of the WDA, the WDA Contract Rate will be adjusted according to the above calculation formula, including the renewal discount adjustment of $0.82 per ton, up to the maximum of 85% of the newly posted gate rate. If the calculated annual adjustment of any year would exceed the 85%, then the capped maximum amount of 85% will be used. If, however, -66-
the posted gate rate does not change, and the WDA Contract Rate is already at the capped 85% amount, the WDA Contract Rate will remain the same for the calculated fiscal year. Any decrease in the calculated adjustment to the Contract Rate, calculated according to the above formula, including the renewal discount adjustment, will be applied to the then WDA Contract Rate.
Please note that, due to timing, in future years where the gate rate is recommended to be increased, the WDA rate notification letter may be delayed until final approval of the gate rate by the Board of Supervisors.
If at any time either the Employment Cost Index or the Producer Price Index is no longer published, or are otherwise unavailable, then the COLA shall be determined by using standard official statistics measuring changes to, respectively, labor costs and cost of materials, as the parties shall mutually agree.
3. Amended Section 5.2 CITY CONVENIENCE TERMINATION. This section is amended in its entirety to read:
SECTION 5.2. CITY CONVENIENCE TERMINATION. In exchange for capping the WDA Contract Rate, the City agrees to commit to remaining a WDA City, with no provision to terminate without cause, for the remainder of the WDA Term.
4. Effective Date. This Amendment shall be effective if and only when all fifteen cities/towns listed on Exhibit A have each adopted and executed a counterpart of this Amendment No. 8 (the amendment number may differ for each city/town listed on Exhibit A) and such amendment has been adopted and executed by the County on or before June 30, 2022. In all events, the conditions in the forgoing sentence shall occur otherwise this Amendment No. 8 shall be null and void and without any effect whatsoever.
5. This Amendment may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts shall together constitute one and the same Amendment.
The parties shall be entitled to sign and transmit an electronic signature of this Amendment (whether by facsimile, PDF or other email transmission), which signature shall be binding on the party whose name is contained therein. Each party providing an electronic signature agrees to promptly execute and deliver to the other party an original signed Amendment upon request.
6. Except as modified in this Amendment (or in any prior Amendment(s)) all other terms and conditions of the WDA shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized officers or representatives as of the day and year first above written.
SAN BERNARDINO COUNTY
Curt Hagman, Chairman, Board of Supervisors
Dated:
SIGNED AND CERTIFIED THAT A COPY OF THIS
DOCUMENT HAS BEEN DELIVERED TO THE
CHAIRMAN OF THE BOARD
Lynna Monell
Clerk of the Board of Supervisors
of San Bernardino County
By
Deputy
Approved as to Legal Form
Jolena Grider, Deputy County Counsel
Date
City of Yucaipa
(Print or type name of corporation, company, contractor, etc.) By ►
(Authorized signature - sign in blue ink)
Name
(Print or type name of person signing contract)
Title
(Print or Type)
Dated:
Address 34272 Yucaipa Blvd.
Reviewed for Contract Compliance
111N-
Andy Silao, P.E.
Date
Yucaipa, CA 92399
Reviewed/Approved by Department
111N-
Brendon Biggs, Director
Date
i
EXHIBIT A
CITIES/TOWNS WITH A WASTE DELIVERY AGREEMENT
WITH THE COUNTY OF SAN BERNARDINO
OFFERED THIS AMENDMENT JUNE 2022
FOR AN AGREEMENT END DATE OF JUNE 30, 2026
1. ADELANTO
2. APPLE VALLEY
3. BARSTOW
4. BIG BEAR LAKE
5. COLTON
6. FONTANA
7. GRAND TERRACE
8. HESPERIA
9. HIGHLAND
10. LOMA LINDA
11. RIALTO
12. TWENTYNINE PALMS
13. VICTORVILLE
14. YUCAIPA
15. YUCCA VALLEY
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�-
GMChW-. ---
222 West i-ias d ihty Lane 2'-' Floor, Sar. Bernardino CA 92415-0017' Ph 909.386.8701 999.336 8900 i Department of Public Works Brendon Biggs. Nt_S-, P.E.
S A N B E R N A R D I N U Director
---—• Hund mural • Sial Mario,
. Operuii.m. % Aurie}or
Noel Castilla, P.E.COUNT Y • intid «.mfe %haa;emeur . Tramipurialion Assistant Director Trevor Leja
Assistant Director
March 22, 2022
Mr. Ray Casey
City Manager
City of Yucaipa
34272 Yucaipa Boulevard
Yucaipa, CA 92399
SUBJECT: FISCAL YEAR 2022-2023 WASTE DELIVERY AGREEMENT (WDA)
CONTRACT RATE CALCULATION
Dear Mr. Casey:
The purpose of this letter is to notify you of the FY 2022-23 Final WDA rate of $43.41 per ton will be effective July 1, 2022 through June 30, 2023, for waste disposal services provided to your city per the WDA agreement with the County of San Bernardino.
The Department of Public Works - Solid Waste Management Division has calculated the Cost of Living Adjustment (COLA) as prescribed in Amended Section 4.2(B) Calculation of Escalation of the amended WDA from June 2016. The calculation (copy attached) results in a $5.41 per ton increase to the current WDA rate, after the WDA Renewal Discount of $0.82 has been applied.
The $43.41 per ton final Contract Rate will be applied to your July 2022 tonnage on your WDA credit accounts that will be billed approximately August 15, 2022. If you have questions about this notice or the rate calculation, please call me at (909) 386-8701 or Michael Hernandez at (909) 387-1871.
Sincerely,
DARREN J. MEEKA, P.E.
Deputy Director
Attachment: WDA Rate Calculation
cc: Michael Hernandez, Supervising Accountant III
Lori Cram, Accountant III
FISCAL YEAR 2022/2023
WASTE DELIVERY AGREEMENT
COLA ADJUSTMENT PER AGREEMENT SECTION 4.2(B)
Effective as of July 1, 2022
Fixed Portion of Rate
Escalating Portion of Rate
Total Rate
El = Emolovment Cost Index - Series ID: CIU20100000000001 (8) (Compensation, Not Seasonally Adjusted, Private Industry Workers, Quarter ending September) (For E12 refer to Page 10 of the DoL BLS Series Report attached) El, for Quarter ending September 2021
EIS for Quarter ending September 1997 - revised 'base year of 2005 = 100.00 Index difference
Percentage change
PPI = Producer Price Index - Series ID: WPU03thru15
(Commodities, Industrial Commodities, Not Seasonally Adjusted) PPI; for September 2021
PPI, for September 1997
Index difference
Percentage change
Cost of Living Adiustment
1) Labor Adjustment = Labor Percent X Percentage Change in El
30.00% X 97.30% _
2) Other Adjustment = 100% less Labor Percent X Percentage Change in PPI
70.00% X 85_77% =
Cost of Living Percent Adjustment
Escalation Amount
FY 2022/2023 WDA Rate
Fixed Portion of Rate
Escalated Portion $17.63 + $15.73
WDA Renewal Discount, eff. July 1, 2016
Change in Law (per ton calculation)
Total Rate
Rate Chanqe Comparison - without Perchlorate surcharge
FY 2022123 rate without perchlorate surcharge
FY 2021/22 rate without perchlorate surcharge
Amount of Total Rate Increase/(Decrease)
Percent of Total Rate Change
Cell input to tie to index table value
$10.87
S17.63
$28.50
146.40
._ ¢.
74.20 72.20
97.30%
237.22
_127.70
109.52
85.77%
29.19%
60.04%
89.23%
S15.73
$10.87
$33.36
($0.82)
$0.00
$43.41
$43.41
$38.00
$5.41
14.237%
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C:\Users\P2040\DocumentskWDA - FY2022-23 Rate Change Computation\WDA Calc-Final Printed: 3121 /2022
FISCAL YEAR 202012021
WASTE DELIVERY AGREEMENT
COLA ADJUSTMENT PER AGREEMENT SECTION 1.2(B)
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