REPORT TO THE CITY COUNCIL
FROM: BROCK D. BUCHE, PE, PLS, Director
Department of Public Utilities
BY: AHMAD ALKHAYYAT, PE, MBA, Assistant Director
Department of Public Utilities - Solid Waste Management Division
SUBJECT
Title
Actions related to the Second Amendment to Commercial Solid Waste Franchise Agreements with Allied Waste Services of North America dba Republic Services of Fresno, LLC, and Mid-Valley Disposal, LLC, to comply with Senate Bill 1383 Short-Lived Climate Pollutants (Citywide)
1. RESOLUTION - Adopting findings pursuant to California Environmental Quality Act Guidelines Sections 15091 and 15093 as required for Responsible Agencies by the California Environmental Quality Act Guidelines Section 15096 for SB 1383 Regulations Short-Lived Climate Pollutants: Organic Waste Methane Emission Reduction
2. Approve the Second Amendment to the Commercial Solid Waste Franchise Agreement with Allied Waste Services of North America dba Republic Services of Fresno, LLC, to add Organic Waste Reductions requirements and to extend the term of the agreement by five years to November 30, 2036
3. Approve the Second Amendment to the Commercial Solid Waste Franchise Agreement with Mid-Valley Disposal, LLC, to add Organic Waste Reductions requirements and to extend the term of the agreement by five years to November 30, 2036
Body
RECOMMENDATION
Staff recommends City Council adopt a resolution making findings pursuant to California Environmental Quality Act (CEQA) Guidelines Sections 15091 and 15093 as required for responsible agencies by CEQA Guidelines Section 15096 for Senate Bill (SB) 1383 Regulations Short-Lived Climate Pollutants (SLCP): Organic Waste Methane Emission Reduction; approve the second amendment to the Commercial Solid Waste (CSW) Franchise Agreement with Allied Waste Services of North America dba Republic Services of Fresno, LLC (Republic); approve the second amendment to the CSW Franchise Agreement with Mid-Valley Disposal, LLC (Mid-Valley); and authorize the Director of Public Utilities, or designee, to sign and execute all associated documents on behalf of the City.
EXECUTIVE SUMMARY
The Department of Public Utilities (DPU) proposes that City Council approve the Second Amendments to the CSW Franchise Agreements with Republic and Mid-Valley (together, Agreements). The Second Amendment includes language to ensure the City’s compliance with SB 1383 requirements. In addition, the Second Amendment will extend the term of the agreements by five years to November 30, 2036, revise Republic and Mid-Valley’s (Franchisees) maximum customer rates and include a Multi-Family Bulky Collection Event Program.
The SB 1383 legislation stipulated local agencies be compliant with the regulation by January 1, 2020. Due to various circumstances, compliance was not attained by the stipulated date. Subsequently, DPU worked with CalRecycle and developed revised delivery dates for various required milestones, which were formalized in the Notice of Intent to Comply (NOIC). Pertinent to this Council item, amendments to the CSW haulers contracts were to be amended to incorporate organics collection by January 1, 2023, and the City was to be in full compliance by September 1, 2023. Since negotiations with the CSW haulers were running longer than anticipated, DPU again worked with CalRecycle and established revised milestone delivery dates within the Corrective Action Plan No. 1203.SLCP.CAP.2023.2 (CAP) to have the needed amendments with the CSW haulers by May 31, 2023, which was later extended to September 1, 2023, and City is to be in full compliance January 1, 2024. To meet the requirements of CalRecycle’s CAP Timeline, as best practical, this item cannot be continued to a later City Council meeting date.
BACKGROUND
The City of Fresno has exclusive agreements for solid waste, recyclables, and green waste collection and disposal with Mid-Valley and Republic (formerly known as Allied Waste Services of Fresno) since 2011. The passing of Senate Bill (SB) 1383 placed new regulatory requirements on the City that required changes to the collection agreements to meet the latest state mandates. Even with the required increases, these provided services maintain some of the lowest collection rates in the Central Valley.
In September 2016, Governor Brown signed into law SB 1383 establishing methane emissions reduction targets in a statewide effort to reduce emissions of SLCP in various sectors of California’s economy. SB 1383 directs the Department of Resources Recycling and Recovery (CalRecycle) to adopt regulations and requirements to achieve statewide goals. SB 1383 is California’s most significant waste reduction mandate in the last 30 years.
Under SB 1383, the City will be subject to noncompliance fines by CalRecycle for up to $10,000 per day per violation. To achieve SB 1383 compliance status and to meet the Corrective Action Plan requirements, the City must expand commercial organic waste collection programs, develop edible food recovery programs, and instill procurement mechanisms for SB 1383. Those programs included ordinances, policies, and other enforceable mechanisms, including the City’s Franchise Agreements with the Franchisees.
Recognizing that the requirements of SB 1383 compliance were extensive, the City and Franchisees began discussions and negotiations for SB 1383 services in April 2022. The proposed amendments to the City’s franchise agreements with the Franchisees require the City’s hauler to offer organic service to all customers, perform route reviews, contamination monitoring, noticing, education and outreach, reporting services, and collection from City facilities, as required by SB 1383. An additional requirement added to the agreements is the collection of bulky items for multi-family on an on-call basis.
In order for franchisees to perform these required actions, a rate adjustment must be adopted to account for the additional expenses incurred and capital resources needed by the Franchisees. The special adjustment would increase rates sufficiently to cover all costs of the organics collection and diversion program mandated under SB 1383. The proposed contract rate increases, on a cubic yard basis, are presented in the following tables:
|
Mid-Valley Disposal |
CPI July 1, 2023 |
SB 1383 November 1, 2023 |
Adjustment |
% increase |
|
Solid Waste Rate |
$46.36 |
$51.15 |
$4.79 |
10.33 |
|
Recycling Rate |
$21.74 |
$27.65 |
$5.91 |
27.18 |
|
Green Waste Rate |
$33.29 |
$41.45 |
$8.16 |
24.51 |
|
|
|
|
|
|
|
Republic Services |
CPI July 1, 2023 |
SB 1383 November 1, 2023 |
Adjustment |
% increase |
|
Solid Waste Rate |
$46.39 |
$53.86 |
$7.47 |
16.10 |
|
Recycling Rate |
$15.76 |
$22.41 |
$6.65 |
42.20 |
|
Green Waste Rate |
$28.39 |
$37.14 |
$8.75 |
30.82 |
Considering the foregoing, staff recommends that City Council approve the Second Amendment to the CSW Franchise Agreements with Republic and Mid-Valley; and authorize the Director of Public Utilities to sign the amendments on behalf of the City. The agreements have been reviewed for legal sufficiency and approved as to form by the City Attorney.
ENVIRONMENTAL FINDINGS
The Department of Resources Recycling and Recovery (CalRecycle), as Lead Agency prepared an Environmental Impact Report (EIR) for SB 1383 Regulations Short-Lived Climate Pollutants: Organic Waste Methane Emission Reduction Regulations, identified by State Clearinghouse No. 2018122023 (SLCP EIR). CalRecycle certified the EIR in a Notice of Determination dated December 30, 2019. The SB 1383 Regulations EIR provided an analysis of the potential environmental impacts associated with the SB 1383 Regulations (Regulations). Approval of the proposed Second Amendments to franchise agreements with Republic and Mid-Valley is to require the haulers to offer organic service to all customers, perform route reviews, contamination monitoring, noticing, education and outreach, and reporting services, all as required by the Regulations.
An analysis has been performed pursuant to CEQA Guidelines Section 15162 to determine potential environmental impacts associated with the Regulations. Based upon the analysis, the following findings are made to support the determination that no subsequent environmental review is required:
1. No substantial changes are proposed in the project which will require major revisions to the EIR due to the involvement of new significant environmental effects because the project is being implemented as planned.
2. No substantial changes occurred with respect to the circumstances under which the project was undertaken which will require major revisions to the EIR dure to the involvement of new significant environmental effects or a substantial increase in severity of previously identified significant effects.
3. There is no new information, which was not known and could not have been known at the time of the previous EIR showing that:
a. The project will have one or more significant effects not discussed in the previous EIR;
b. Significant effects previously examined will be substantially more severe than shown in the previous EIR;
c. Mitigation measures or alternatives previously found to be not feasible are now feasibly and would substantially reduce one or more significant effects of the project.
Based upon these findings, it has been determined that subsequent EIR is not required.
Pursuant to the requirements of CEQA Guidelines Section 15096(h), the City adopts the findings attached as Exhibit A to the Resolution, as required by CEQA Guidelines 15091 and 15093.
LOCAL PREFERENCE
Local preference is not implemented because this amendment is not an award of a construction or services contract.
FISCAL IMPACT
This Council item will have no impact to the General Fund and will consent to the continuation of the City’s ability to collect franchise fees to support essential core services such as public safety.
Attachments:
Attachment 1 - Resolution Adopting CEQA Findings
Attachment 2 - Second Amendment to the CSW Franchise Agreement for Republic Services
Attachment 3 - Second Amendment to the CSW Franchise Agreement for Mid-Valley Disposal