The URL can be used to link to this page

Home My WebLink About2023-04-13; Contract Change Request from Republic Services (Districts - All); Gomez, PazTo the members of the: CITY COUNCIL Date4 li-3)23 CA V CC \/ CM ./, ACM . ✓ DCM (3) ~ April 13, 2023 Council Memorandum To: Honorable Mayor Blackb · a d Members of the City Council From: Paz Gomez, Deputy City r, Public Works Via: Scott Chadwick, City Ma ag Re: Contract Change Reques fr Republic Services (Districts -All) {city of Carlsbad Memo ID #2023031 This memorandum provides information about and responses to three requests made by Republic Services regarding requested changes to the franchise agreement for the city's solid waste hauler. Background On April 6, 2021, the City Council adopted Resolution No. 2021-075, approving the city's new waste hauling agreement with Republic Services. This new franchise agreement, which started on July 1, 2022, was developed to ensure compliance with recent solid waste legislation including organics recycling. Discussion On March 29, 2023, Republic Services submitted three requests (Attachments A-C) to the City Manager for changes to the franchise agreement. A description of each and the city's responses are described below: Request for clarification of language The franchise agreement currently allows Republic Services to suspend service for businesses that have not paid their bill for 120 days. In Attachment A, Republic Services requested a change in language and/or process related to these fees, stating that their billing system is set up to charge a suspend fee, whereas the contract allows for the charge of a restart fee. City response: Staff are unclear on the actual process changes requested and will set up a meeting with Republic Services to ensure the process and any requested changes are appropriate and meet the original purpose of this fee. Request for city's reimbursement language review The agreement allows for an annual Consumer Price Index for all Urban Consumers (CPI-U) increase for Republic Services' fees that is capped at 5% annually,. This 5% cap does not apply to fees paid to the city. Republic Services felt this was a discrepancy and asked that all fees be capped at 5%. Public Works Branch Environmental Sustainability Department 1635 Faraday Avenue I Carlsbad; CA 92008 I 442-339-2799 t Council Memo -Contract Change Requests from Republic Services (Districts -All) April 13, 2023 Page 2 City Response: The city will notify Republic Services that this is not a discrepancy and that the 5% cap does not apply to fees paid to the city. There are mechanisms included in the franchise agreement that allow Republic Services to go above the 5% cap if they prove the validity of the request. For this reason, the 5% cap only applies if the company follows the approved mechanism within the agreement for proving a higher percentage. Request to approve an additional recyclable materials processing facility Republic Services requests to add Allan Company to the list of approved recyclable materials processing facilities. City Response: The franchise agreement allows for the addition of recyclable materials processing facilities with the city's approval. Staff requested that Republic Services set up an on -site visit of the proposed company as well as provide documentation of the efficiency of the facility. Once the site visit is complete and the review of operations data is determined to meet required standards, this company could be added to the list of processing facilities. Next Steps Staff will notify Republic Services of the information provided above and begin meeting with the company to visit the requested materials processing facility and determine if any changes are needed to the fee language for unpaid customers. Attachments: A. Republic Services letter dated March 29, 2023, on language clarification B. Republic Services letter dated March 29, 2023, on fee reimbursement C. Republic Services letter dated March 29, 2023, on proposed recycled materials processing facility cc: Geoff Patnoe, Assistant City Manager Cindie McMahon, City Attorney Gary Barberio, Deputy City Manager, Community Services Laura Rocha, Deputy City Manager, Administrative Services Zach Korach, Finance Director Jamie Wood, Environmental Sustainability Director Kristina Ray, Communication & Engagement Director Gina Herrera, Deputy City Attorney Megan Powers, Management Analyst Avecita Jones, Senior Program Manager ~~ REPUBL1c·· "1J,,,\\ SERVICES Sustainability in Action March 29th, 2023 Scott Chadwick City Manager City of Carlsbad RE: Request for clarification of language Scott, ATTACHMENT A It has come to our attention some language within the contract does not align with our bil ling system and is not formally defined. To better serve the customers of Car lsbad we would like to gain alignment on this language and make sure we agree on next steps. The language in question appears in Exhibit G3, "Rate Proposal for Other Services" on Page 12 of the appendix. Specifically, the "Commercial Return to Service Fee (for 2 or more calls in 1 month perlod)" and the "Restart Fee for commercial service" are not formally defined. We interpret this to be the fee charged to a suspended account prior to re-instating services. Ou~ system works in the opposite manner. We charge a suspend fee which is charged upon the account going on service suspension due to non-payment. Since this language is not defined nor mentioned elsewhere in the contract, we are requesting this to be revised to the below, We formally request to change the language "Commercial Return to Service Fee" to "Commercial Suspend Fee" and to change the language "Restart Fee" to "Suspend Fee" and understand that we will charge th is fee at the 120-day mark when we stop services for a non-paying customer. Thank you, ... BriQ~ 18500 N. Allied Way Phoenix, AZ 85054 I RepublicServices.com I Environmental Services, Recycling & Waste ~R-,_ REPUBLIC~ ~\\ SERVICES Sustainability in Action March 29th, 2023 Scott Chadwick City Manager C1ty of Carlsbad ATTACHMENT B RE: Request for City Reimbursements increase language review Scott, In review of the annual price adjustment language, we have identified a potential di screpancy we would like to bring to your attention for review. Under Exhibit E1, Section 2(E), paragraphs 2 -4 (located on page E1-5), the contra ct lists an increase of each individual reimbursement for AB939/SB1383 and Stormwater according to CPI-U but does not include the same 5% cap that the rate adjustment for our rates includes. As you know, CPI-U was greater than 5% at the time of submittal for our annual rate adjustment in Feb 2023. We would like to bring this to your attention and request this be re-visited to include the same 5% cap to CPI-U. Thank you, ~ Bri shen McGuire 18500 N. Allied Way Phoenix, AZ 85054 I RepublicServices,corn I Environmental Services, Recycling & Waste ~R~ REPUBLlc·· "1J-.\\ SERVICES Sustainability in Action March 29th, 2023 Scott Chadwick City Manager City of Carlsbad ATTACHMENT C RE: Request to approve an additional Recyclable Materials Processing Facility Scott, I am formally requesting to add a recyclable materials processing facility to the list of approved vendors. Republic Services would be best positioned to provide Environmentally Responsible, compliant and cost-effective services to the City of Carlsbad by having more than one approved Recyclable Materials Processing Facility to use. , lam asking that the City approve Allan Company, located at 6733 Consolidated Way, San Diego, CA 92121 as a materials processing facility for use by Republic Services. Allan Company has been in business since 1963 and has been responsible for processing the residential curbside recycling material for the City of San Diego since 2000. Allan Company's commitment to sustainability will benefit the City of Carlsbad by reducing vehicle emissions. Their transfer trucks run on compressed natural gas (CNG). By approving Allan Company we will be able to eliminate the use of two diesel trucks per day at the Palomar Transfer Station facility. Additionally, Allan Company's management team uses an al l-EV fleet. The facil ity has also recently been upgraded with all-new, state of the art sorting equipment. I would be happy to provide more inforrnation as well as coordinate site visits for the Carlsbad City staff to view Allan Company's San Diego facility. Brishen McGuire 18500 N. Allied Way Phoenix, AZ. 85054 I RepublicServices.com I Environmental Services, RecycHng & Waste