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HomeMy WebLinkAbout2019-10-15; City Council; ; Amend contract with Palomar Transfer Station, Inc. for green waste composting services and set a Public Hearing date for proposed increases to green waste service rates.CA Review Rt. C-r CB s~~fi R~port Meeting Date: To: From: Staff Contact: Subject: Oct. 15, 2019 Mayor and City Council Scott Chadwick, City Manager James Wood, Environmental Manager james.wood@carlsbadca.gov or 760-602-7584 Amend contract with Palomar Transfer Station, Inc. for green waste composting services and set a Public Hearing date for proposed increases to green waste service rates. Recommended Action 1. Adopt a Resolution approving Amendment No. 4 to the Agreement for Transfer Station and Disposal Services between the City of Carlsbad and Palomar Transfer Station, Inc. (PTS Agreement) to compost the city's green waste at Agromin -OC, LLC (Agromin), effective Jan. 1, 2020. 2. Adopt a Resolution setting Dec. 10, 2019, as the Public Hearing date for proposed recycling and trash rate increases related to green waste (proposed rate increases). Executive Summary Beginning Jan. 1, 2020, Assembly Bill (AB) 1594 eliminates the city's diversion credit for green waste used as Alternative Daily Cover (ADC) at landfills. To continue to meet the state's 50% diversion mandate under AB 939, the city's green waste must be diverted from the landfill. City staff worked with its service contractor at the Palomar Transfer Station (PTS), Palomar Transfer Station, Inc., a wholly owned subsidiary of Republic Services, Inc. (Republic), to amend the PTS Agreement to compost the city's green waste at Agromin beginning Jan. 1, 2020. In accordance with the PTS Agreement, city staff and Republic negotiated adjustments to the per ton rates that apply to the city's green waste, in order to reflect the new composting services. Due to the increased per ton rates, it is estimated that Coast Waste Management, lnc.'s (WM) green waste service rates will increase approximately 6-9% for the city's residential and commercial customers. Those proposed rate increases will be subject to Proposition 218 noticing and Public Hearing requirements prior to adoption. Staff recommends that City Council set Dec. 10, 2019, as the Public Hearing date for the proposed rate increases. Discussion Each city, county, or regional agency must submit an Annual Report to the California Department of Resources Recycling and Recovery (Cal Recycle) summarizing its progress in October 15, 2019 Item #2 Page 1 of 15 reducing solid waste as required by Public Resources Code (PRC) Section 41821. The Annual Report describes the progress a jurisdiction has made in achieving the requirements of the Integrated Waste Management Act, AB 939, and the Per Capita Disposal Measurement Act of 2008, Senate Bill (SB) 1016. The Annual Report includes the disposal amount and population used to calculate the per capita disposal rate for each jurisdiction. As a result ofthe city's diversion programs, the city's annual per capita disposal rate is currently below the 8.4 pounds per person per day (ppd) target. However, the city's rate has gradually increased in the last 10 years, except for in 2018 when the per capita rate showed a small decrease from 7.9 to 7.8 ppd. Beginning Jan. 1, 2020, AB 1594 eliminates the city's diversion credit for green waste, such as landscape materials, pruning waste, and nonhazardous wood waste, that is used as ADC at landfills. ADC will no longer constitute diversion through recycling and will instead be considered disposal for measuring the jurisdiction's annual per capita disposal rate (PRC Section 41781.3). Currently the city's green waste is used as ADC at the Otay Landfill. The chart below illustrates the city's disposal per capita rate in 2018, with green waste included as disposal and excluded as disposal. CalRecycle has provided these figures for jurisdictions to consider when planning for AB 1594 and considering alternatives for green waste diversion. Cal Recycle Disposal Reporting System (DRS) -Jurisdiction: City of Carlsbad Yearly Per Meets Target with Per Capita Meets Target City of Carlsbad Capita Green Waste Disposal Rate With With Green Year .Per Capita Target Disposal diverted as ADC? Green Waste not Waste not Rate Diverted as ADC Diverted as ADC? 2018 8.4 ppd 7.8 ppd V 9.1 ppd N ~--~I Beginning Jan . 1, 2020; assuming no additional diversion is implemented for green waste. Once AB 1594 goes into effect, the city's per capita disposal rate will be 9.1 ppd per capita, assuming no additional diversion is implemented by Jan. 1, 2020. To ensure that the city remains below the 8.4 ppd per capita target, staff recommends composting the city's green waste through an amendment to the PTS Ag reement. Composting the city's green waste has numerous environmental benefits such as increasing the nutrient content in soils, decreasing methane emissions at the landfill and improving the ability of soil to store carbon. PTS is a large volume transfer/processing facility that is operated by Republic under the PTS Agreement. The PTS is permitted to accept mixed municipal, construction and demolition materi~ls, industrial waste and green materials. Under a separate agreement with the city, WM collects, transports and delivers the city's solid waste, recyclable materials and green waste to PTS for processing and disposal. The proposed contract amendment requires that all the city's green waste be composted by Republic once delivered to the PTS by WM. The proposed amendment includes these new October 15, 2019 Item #2 Page 2 of 15 composting services and additional compensation (new per ton rates to compost the green waste). It also designates Agromin as the processing facility for the composting services. Agromin is a commercial compost facility, co-owned by Republic, that is located in Oceanside, CA and permitted to accept up to 200 tons per day of local green material. City staff chose to designate Agromin because it has enough capacity to accept and process all of the city's green waste. The proposed amendment is effective Jan. 1, 2020, and no other PTS Agreement provisions will be amended. Due to this amendment, beginning Jan. 1, 2020, the commercial hauler green waste fee at the PTS will increase from $44.15 per ton to $68.29 per ton. As the PTS processing/disposal costs are a component of WM's service fees, the service fees for the residential and commercial customers in the city will also increase. Those proposed rate increases are below: Green Waste Services -Composting Proposed Rates starting January 1, 2020 Service Disposal Contractor Franchise Storm Customer Freq Rate Occupancy Rate Total & AB939 Fee Waler Total No Change Residential Service Standard Three Cart 3-Cart 64 or 96 Gallon s 11.66 s 0.36 s 6.12 s 18.13 s 1.90 s 3.46 $ 23.50 3-Cart 35 Gallon Trash (Low Generator) s 11.65 s 0.35 s 4.25 s 16.26 s 1.71 s 3.46 s 21.42 Backyard Service s 18.04 s s 5.60 s 23.64 s 2.48 s 3.46 s 29.58 Commercial Recycling -Green Waste 3 Yard 1 s 67.86 s 2.13 s 32.42 s 102.41 s 10.75 s 18.25 s 131.41 2 s 115.13 s 4.26 s 64.84 s 184.23 s 19.34 s 32.31 $ 235.88 Commercial Recycling -Green Waste 96 Gal Cart s 13.12 s 0.36 s 5.41 s 18.88 s 1.98 s 3.41 $ 24.27 Extra Pick-up s 7.02 s s 1.24 s 8.26 s 0.87 s 1.59 $ 10.72 It is estimated that the proposed rate increase will be approximately 6-9% for the city's residential and commercial customers. Those proposed rate increases are subject to Proposition 218 noticing and Public Hearing requirements, and are not being adopted through this City Council action. As part of this item, staff recommends that City Council set Dec. 10, 2019, as the Public Hearing date for the proposed rate increases. Fiscal Analysis Proposed rate increases are projected to be approximately 6-9% for residents and businesses. WM collects a franchise fee and AB 939 fee from solid waste related services to residents and businesses, and remits it to the city quarterly. The franchise fee is 7.5%, which is allocated into the city's General Fund for governmental services such as public safety, libraries, parks and recreation. The AB 939 fee is 2.0%, which is allocated to the Solid Waste Enterprise Fund to pay for city recycling programs. Next Steps To implement the proposed rate increases for the city's residential and commercial customers serviced by WM, staff will proceed with the Proposition 218 notification and Public Hearing process, as follows: October 15, 2019 Item #2 Page 3 of 15 • Oct. 15, 2019 -Set the Public Hearing for Dec. 10, 2019 • Oct. 16, 2019 -Mail Notice of Public Hearing for Green Waste Rates • Dec. 10, 2019 -Hold the Public Hearing for Propose Rate Increases effective Jan. 1, 2020 • Jan. 1, 2020 -Implement Proposed Rate Increases Environmental Evaluation (CEQA) Amending the agreement and setting a date for a Public Hearing on the proposed rate increases does not qualify as a "project" under the California Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15378, as it does not result in a direct or reasonably foreseeable indirect physical change in the environment. Public Notification and Outreach California Constitution, Article XIIID, Section 6, states that local governments must hold a Public Hearing, and notify property owners and customers by mail at least 45 days in advance of Public Hearings related to property-related new or increased fees and charges, such as recycling and trash services. At the Public Hearing, if it is determined that a majority of property owners or customers have submitted a formal protest, the proposed fee change must be rejected. This is a requirement of Proposition 218, which was passed by California voters in 1996 to limit methods by which local governments can create or increase taxes, fees and charges without taxpayer consent. Any person interested in objecting to the increases may file a signed written protest with the city clerk. The written protest must contain the address of service, the rate change being protested and be received prior to the close of the Public Hearing. While protestors may appear at the Public Hearing and be heard on the matter, only written protests are counted for the purpose of determining whether there has been a majority protest. Staff will take the following actions at least 45 days prior to the Dec. 10, 2019, Public Hearing: • Notify affected customers and property owners by mail of the Public Hearing. • The notice will provide information relating to the Public Hearing. • The notice will provide information regarding the proposed rates. • In addition, information about the Public Hearing and proposed rates will be posted on the city's website at www.carlsbadca.gov. Information regarding public notifications of this item such as mailings, Public Hearing notices posted in the newspaper and on the city website will be available in the office of the city clerk. Exhibits 1. City Council Resolution (approving Amendment No. 4 to the PTS Agreement). 2. City Council Resolution (to set a Public Hearing date for proposed Green Waste Service Rate increases). 3. Notice of Public Hearing. October 15, 2019 Item #2 Page 4 of 15 RESOLUTION NO. 2019-203 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AMENDMENT NO. 4 TO THE AGREEMENT FOR TRANSFER STATION AND DISPOSAL SERVICES BETWEEN THE CITY OF CARLSBAD AND PALOMAR TRANSFER STATION, INC. TO COMPOST THE CITY'S GREEN WASTE AT AGROMIN -OC, LLC (AGROMIN), EFFECTIVE JAN.1, 2020. WHEREAS, an agreement dated June 1, 2002, was made by and between the City of Carlsbad and Palomar Transfer Station, Inc., (a wholly owned subsidiary of Republic Services, Inc.) for transfer station and disposal services (Agreement); and WHEREAS, the city is required by the Agreement to deliver all solid waste generated in the City of Carlsbad to the Palomar Transfer Station until June 30, 2022, unless the Agreement is otherwise extended or amended by the City Council; and WHEREAS, pursuant to Section 4.01 of the Agreement, all city source separated green waste materials accepted at the Transfer Station are currently delivered to the Otay Landfill, the Designated Processing Facility under the Agreement, for use as Alternative Daily Cover (ADC); and WHEREAS, beginning on Jan. 1, 2020, pursuant to Assembly Bill (AB) 1594, the city will not receive diversion credit for its green waste that is used as ADC at landfills; and WHEREAS, the city currently relies on ADC diversion credit to meet the 50% citywide diversion rate requirement under AB 939; and WHEREAS, Section 3.29 of the Agreement allows the city to deliver, or cause to be delivered, source separated recyclable materials such as green waste, which are collected from city residents or businesses by designated hauler(s), to the Transfer Station for consolidation and transfer and transport to a processing location or off-site location designated by the city; and WHEREAS, under Section 3.29, the city has designated Agromin as the processing location for composting of all source separated organic materials that are delivered to the Transfer Station by the city's designated hauler; and WHEREAS, Agromin is a commercial compost facility that is co-owned by Republic Services, Inc., and permitted to accept 200 tons per day of local green waste, and Agromin has capacity to divert all the city's green waste volume through composting, which will ensure the city's continuing compliance with AB 939; and WHEREAS, under Section 3.29, the Parties negotiated a change in the contractor's scope of work and compensation to incorporate the new composting services, effective Jan. 1, 2020. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. 2. That the above recitations are true and correct. That the mayor of the City of Carlsbad is hereby authorized and directed to sign Amendment No. 4 to the Agreement with Palomar Transfer Station, Inc., attached hereto as Attachment A. October 15, 2019 Item #2 Page 5 of 15 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 15th day of October 2019, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. ~ Hutor ~me-z, P<p•':J -{~(BARBARA ENGLESON, City Clerk C,+J {SEAL) ,,,11111111111111t,, ,S,''~o'''~ CAJ:1/111❖❖• ,:,; ,T~,-~~ ~~ .. -··~·-... u~ [~/~··· .. ~ lot~y~) J ~ ·· .... -,,., ...... ·· ~ ~"·· ' .. -..~ ~ '-~, ·············...\,~-,$' -❖❖1t,/-IFO~~,,,"~ l/////lilllllllll\\l CIU~ October 15, 2019 Item #2 Page 6 of 15 ATTACHMENT A PSA20-872ENV AMENDMENT NO. 4 TO AGREEMENT FOR TRANSFER STATION AND DISPOSAL SERVICES REPUBLIC SERVICES, INC., dba PALOMAR TRANSFER STATION, INC. This Amendment No. 4 is entered into and effective as of the /£ fl,, day of OcfabeC , 2019, amending the agreement dated June 1, 2002, (the "Agreement") by and between the City of Carlsbad, a municipal corporation, ("City"), and Republic Services, Inc., dba Palomar Transfer Station, Inc., a California corporation, ("Contractor") (collectively, the "Parties") for transfer station and disposal services. RECITALS A. WHEREAS, on May 30, 2011, the Parties executed Amendment No. 1 to the Agreement to extend the deadline for the City to deliver written notice to Contractor of the City's election to send some or all of the City's waste to the Palomar Transfer Station (PTS) during the Subsequent Operating Period pursuant to Section 6.03; and B. WHEREAS, on November 8, 2011, the Parties executed Amendment No. 2 to the Agreement to further extend the deadline for the City to deliver written notice to Contractor of the City's election to send some or all of the City's waste to the PTS during the Subsequent Operating Period pursuant to Section 6.03; and C. WHEREAS, on February 15, 2012, the Parties executed Amendment No. 3 to the Agreement to extend the Initial PTS Operating Period for ten (10) years and one (1) month, with one (1) three (3) year extension option at the mutual agreement of the Parties; and D. WHEREAS, pursuant to Section 4.01 of the Agreement, all City source separated organic materials (currently defined as green waste) accepted at the Transfer Station are currently delivered to the Otay Landfill, the Designated Organics Processing Facility under the Agreement, for use as Alternative Daily Cover (ADC); and E. WHEREAS, beginning on January 1, 2020, pursuant to Assembly BIii 1594, the City will not receive diversion credit for its green waste that is used as ADC at landfills; and F. WHEREAS, the City currently relies on ADC diversion credit to meet the 50 percent citywide diversion rate requirement under Assembly Bill 939; and G. WHEREAS, Section 3.29 of the Agreement allows the City to deliver, or cause to be delivered, source separated recyclable materials such as green waste, which are collected from City residents or businesses by designated hauler(s), to the Transfer Station for consolidation and transfer and transport to a processing location or off-site location designated by the City; and H. WHEREAS, under Section 3.29, the City has designated Agromin -OC, LLC (Agromin) as the processing location for composting of all source separated organic materials that are delivered to the Transfer Station by the City's designated hauler; and I. WHEREAS, under Section 3.29, the Parties have negotiated a change in the Contractor's scope of work for the new composting services and changes to Contractor's October 15, 2019 Item #2 Page 7 of 15 PSA20-872ENV compensation for the PTS Organic Fee -Compost, effective Jan. 1, 2020, as reflected in the amended City-Regulated Service Fees which are attached to and incorporated by this reference as Exhibit "A". NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Contractor agree as follows: 1. The following shall be added after the last paragraph in Section 3.29: Contractor shall Transfer and Transport to Agromin for composting all Source Separated Organic Materials that are collected from City residents or businesses by the City's Designated Hauler(s) and Delivered to the Transfer Station. Contractor shall apply the PTS Organic Fee -Compost to the City's Source Separated Organic Materials, as that fee may be adjusted from time to time under Section 8.06. 2. The attached Exhibit "A" shall serve as the fee schedule for the PTS Organic Fee -Compost. 3. All referenced amendments to the Agreement shall be effective beginning on January 1, 2020. 4. All other provisions of the Agreement, as it may have been amended from time to time, will remain in full force and effect. 5. All requisite insurance policies to be maintained by Contractor pursuant to the Agreement, as may have been amended from time to time, will include coverage for this Amendment. Ill Ill Ill Ill Ill Ill Ill City Attorney Approved Version 9/27/16 2 October 15, 2019 Item #2 Page 8 of 15 PSA20-872ENV 6. The individuals executing this Amendment and the instruments referenced in it on behalf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions of this Amendment. CONTRACTOR Republic Services, Inc., dba Palomar Transfer Station, Inc., a California Corporation ~ By: -✓ ::. -2: (sign here) --rr;, ol} J/V)<;/'), 1/u. ~\ Je~\:- (print name/title) CITY OF CARLSBAD, a municipal corporation of the State of California By: ATTEST: By~ ~ here) ~ 1 fltc1K 6omn, Dq;,;"!j ,{1,,r Barbara Engleson, C ity Clerk CitJ G \een :;B.6C)-\vl:e(r ~-9,«.W~ (print name/title) If required by City, proper notarial acknowledgment of execution by Contractor must be attached. If a corporation, Agreement must be signed by one corporate officer from each of the following two groups: Group A Chairman, President, or Vice-President Group B Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: CELIA A BREWER, City Attorney BY: ~~/ __ D_e_p-'u•tyc::;C;._i_ty_A_tt.....,oaar_n--'eo"""-,---- City Attorney Approved Version 9/27/16 3 C/pliC October 15, 2019 Item #2 Page 9 of 15 EXHIBIT "A" CITY-REGULATED SERVICE FEE FOR COMPOST EFFECTIVE JANUARY 1, 2020 PSA20-872ENV PTS Organic Fee -COMPOST Component Per Ton Charges Base $61.02 Fuel $4.77 Government Fees $2.50 Total Rate $68.29 per ton City Attorney Approved Version 9/27/16 4 October 15, 2019 Item #2 Page 11 of 15 RESOLUTION NO. 2019-204 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, SETTING DEC. 10, 2019 AS THE PUBLIC HEARING DATE FOR PROPOSED RECYCLING AND TRASH RATE INCREASES RELATED TO GREEN WASTE. WHEREAS, the City of Carlsbad is proposing increases to recycling and trash rates related to green waste, to be effective Jan. 1, 2020, to reflect increased per-ton rates at Palomar Transfer Station for composting of the city's green waste; and WHEREAS, the California Constitution Article XIIID, Section 6(a)(2) states that local governments must notify customers not less than 45 days in advance of a Public Hearing regarding increases in refuse collection rates; and WHEREAS, the California Constitution Article XIIID, Section 6(a)(2) states that if a majority of customers submit a written protest prior to the close of the Public Hearing, then the rate increase shall not be imposed; and WHEREAS, Coast Waste Management, Inc. is the exclusive provider of residential and commercial recycling and trash solid waste services in the City of Carlsbad under a contract approved by City Council in 2012 by adopting Resolution No. 2012-033. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council of the City of Carlsbad, California, sets a Public Hearing for Tuesday, Dec. 10, 2019, in accordance with applicable law. 3. That future recycling and trash rates related to green waste may be adjusted and adopted annually through fiscal year 2021-22 as part of the Master Fee schedule during the city's budget adoption process. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 15th day of October 2019, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. 4~ . H~cfo(&1mt21 De[X#c..:J f&( BARBARA ENGLESON, City Clerk ci+j C/etK (SEAL) October 15, 2019 Item #2 Page 12 of 15 Exhibit 3 Notice of Public Hearing October 15, 2019 Item #2 Page 13 of 15