HomeMy WebLinkAboutItem 43 - Exclusive Solid Waste Agreement Public Works Agency
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Item # 43
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
August 17, 2021
TOPIC: Exclusive Solid Waste Agreement
AGENDA TITLE
Hold a Public Hearing to Adopt a Resolution to Approve an Exclusive Agreement to
Athens Services for the Collection and Handling of Solid Waste for a Term of up to
Eighteen years and Authorize a Proposition 218 Process (General and Non-General
Funds)
RECOMMENDED ACTION
1. Hold a Public Hearing to adopt a resolution whereby the City Council awards a solid
waste exclusive agreement to Athens Services.
2. Award an exclusive agreement for solid waste collection and handling services to
Athens Services, subject to a Proposition 218 process, effective 30 days after Council
approval, for a service provision term of ten years commencing on July 1, 2022 and
expiring June 30, 2032, with a mutual option to extend for a period of five years, and
a City option to extend for a period of up to thirty-six months, subject to non-
substantive changes including clarification of sections 3.5 and 5.1.1 with respect to
payment of fees approved by the City Manager and City Attorney.
3. Authorize and direct staff to prepare all required documents necessary to proceed with
notification of proposed refuse rate adjustments in compliance with Proposition 218
requirements, including, but not limited to, the following:
a) Prepare and mail proposed rate adjustment notices to all Santa Ana property
owners in compliance with Proposition 218 requirements at cost not to exceed
$100,000.
b) Schedule a public hearing at a future Council meeting, on or after September 21,
2021.
DISCUSSION
On March 24, 2020, the Public Works Agency released Request for Proposals (RFP) No.
20-097 for the Collection and Handling of Solid Waste Generated, Produced and/or
Accumulated in the City of Santa Ana. The scope of work included services for residential,
multi-family, commercial and industrial, construction and demolition, and other services.
Exclusive Solid Waste Services Agreement
August 17, 2021
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9
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These services will provide appropriate refuse collection and disposal for Santa Ana that
considers recycling trends and compliance with State legislation.
Five proposals were received, with one proposer located in the City of Santa Ana. One
proposal was disqualified and the remaining proposals from Athens Services, CR&R
Environmental, Republic Services and Waste Management were considered. Each firm
agreed to comply with the terms of the City’s Solid Waste Services agreement and
demonstrated that they had the necessary expertise to complete the required services.
The firms’ rates were reasonable and within industry standard and the team qualifications
are appropriate for this project.
On February 16, 2021, City Council directed staff to negotiate with the four proposers and
prepare four fully executed agreements (Exibits1-4) for Council consideration. On June
22, 2021, staff provided an update on the RFP process and presented details of the four
proposals to City Council in a special Work Study Session. On July 20, 2021, City Council
adopted a Resolution of Intent to award a solid waste exclusive agreement to one of the
four proposers. Today’s Council action adopts a resolution (Exhibit 5) whereby the City
Council awards that agreement and authorizes a Proposition 218 process for the
proposed refuse rate adjustments. The Proposition 218 hearing will be held this winter
and new services will commence on July 1, 2022 (Exhibit 6).
The Executive Director of the Public Works Agency recommends award of the Exclusive
Solid Waste Agreement to Athens Services as they had the lowest cost proposal and
included substantial enhancements in their proposal. Athens Services proposed the
lowest price throughout the term of the contract for the 42,000 residential customers with
curbside service, with immediate savings of $4.81 per month. Athens Services also
proposed the lowest additional cart rate of $4.39 per month, lowest senior/mobile home
low-generator service rate of $13.16 per month, lowest commercial cart service of $85
per month, lowest 3-cubic yard temporary bin service of $95 (not including disposal),
lowest 3-cubic yard temporary bin service for construction and demolition debris (not
including disposal), will perform Clean City Initiative Services with in-house staff, and had
the highest customer satisfaction rating among all four haulers. Overall, City residents
and businesses will pay the least to Athens for services similar to those proposed by the
other firms.
In contrast to the other proposers, Athens Services offers ten free bulky item pickups per
quarter per dwelling unit for apartments and condominiums, a total of 40 items per year
per dwelling unit. Other firms have proposed unlimited bulky item pick up. Athens
Services proposed the second highest pricing for multi-family residential service of
$597.21 and the second-lowest pricing for commercial service of $449.88 (both include
refuse, recycling and organics). Lastly, Athens Services employees are not represented
by a collective bargaining agreement (labor union).
Exclusive Solid Waste Services Agreement
August 17, 2021
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5
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Proposers offered a variety of environmental leadership initiatives and agreed to comply
with the requirements of the Department of Transportation, South Coast Air Quality
Management District, and California Air Resources regulations. Additionally, all collection
vehicles will be powered by natural gas and be model year 2021 or newer.
Outreach
Various in-person meetings were held with Santa Ana neighborhood associations (NA)
to share a detailed Solid Waste Contract Residential Customer Impacts presentation.
Staff met with Artesia Pilar and Flower Park NA, Com-Link, Downtown NA, Fisher Park
NA, Floral Park NA, Washington Square NA, Willard Square NA, and Wilshire Square
NA. Citywide community meetings were held virtually and in-person. A Solid Waste
Contract Business Customer Impacts presentation was made virtually to the
Environmental and Transportation Advisory Commission and virtually at a Citywide
community meeting.
In reviewing the agreement, it was discovered that clairification is needed between
Sections 3.5 and 5.1.1 to clarify the intention of the payment of fees. Franchise fees will
be paid to the City monthly, and the remainder of City fees will be deducted monthly from
the rates collected by the City and paid to the Contractor. The agreement will be revised
accordingly. It is anticipated that all proposers will be in full agreement with these
changes.
As State of California agencies, the Santa Ana Unified School District, Santa Ana College
and others are not subject to the City of Santa Ana’s agreement for solid waste services.
These entities contract for solid waste services directly with service providers.
ENVIRONMENTAL IMPACT
Awarding a waste collection and hauling franchise contract is categorically exempt from
the California Environmental Quality Act (CEQA) under Sections 15301, 15307, 15308
and 15061(b)(3).
Section 15301 of the CEQA State Guidelines for existing facilities consists of the
operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of
existing public or private structures, facilities, mechanical equipment, or topographical
features, involving negligible or no expansion of the existing or former use. For this
project, which involves a contract award for collection and hauling of solid waste, no
modifications to any buildings or other facilities are being made. The waste collection
service is already being provided and awarding the new Franchise Agreement to a
different operator does not expand or materially change the current operation. This project
meets the criteria set forth in Section 15301 of the CEQA State Guidelines.
Section 15307 permits “actions taken by regulatory agencies as authorized by state law
or local ordinance to assume the maintenance, restoration, or enhancement of a natural
resource where the regulatory process involves procedures for protection of the
Exclusive Solid Waste Services Agreement
August 17, 2021
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environment. Examples include but are not limited to wildlife preservation activities of the
State Department of Fish and Game. Construction activities are not included in this
exemption. Awarding a new franchise agreement is exempt from CEQA as an action by
a regulatory agency taken to protect the environment and natural resources. The
proposed project has been examined in the context of this Section and has been found
to be consistent with these criteria.
Section 15308 of the CEQA Guidelines includes actions taken by a regulatory agency, as
authorized by state and local ordinances, to assure the maintenance, restoration,
enhancement, or protection of the environment where the regulatory process involves
procedures for the protection of the environment. The Integrated Waste Management Act
(IWMA), Senate Bill 939, passed in 1989, regulating solid waste management requires
cities to permit and regulate solid waste handling. Since that time, several subsequent
bills have been passed. Assembly Bill 341, passed in 2011, requires both businesses that
generate four cubic yards or more of solid waste and multifamily projects with five units
or more to participate in a recycling program. Assembly 1826, passed in 2014, requires
businesses, including public entities and multifamily projects, to recycle their organic
waste. Businesses must develop strategies to reduce and/or arrange for recycling
services for the following types of organic waste: food waste, food-solid paper, green
waste, landscaping and pruning waste, and non-hazardous wood waste. Assembly Bill
1594, passed in 2014, mandates that as of January 1, 2020, the use of green waste or
landscape waste as odor mitigation cover at landfills will no longer count as AB 939
diversion credit for a jurisdiction and will instead be considered disposal. Senate Bill 1383,
passed in 2016, established methane emission reduction targets for California, requiring
a 50 percent reduction of organics sent to the landfill by 2020, and a 75 percent reduction
by 2025. Senate Bill 20, the California Electronic Waste Recycling Act of 2003, requires
a retailer selling a covered electronic device in the state on and after July 1, 2024 to collect
an electronic waste recycling fee from the consumer. The proposed franchise agreement
requires the franchisee to comply with both State and local regulations for hauling and
disposing of waste. The City’s action ensures the protection of the environment since the
agreement contains compliance requirements with State mandates.
Lastly, Section 15061 (b)(3) of the State CEQA Guidelines, known as the “common
sense” exemption, is also applicable. Under Section 15061 (b)(3), activities of the City
that will not result in direct or indirect physical changes in the environment may be exempt
under the common sense exemption. The collection and disposal of solid waste is
mandated and regulated by state law. The City is awarding a service contract to provide
the City’s waste collection and hauling service and such services already exist. Any
selected franchise operator will be required to comply with the terms of this new franchise
agreement and provide similar services to those currently being required and provided.
The selected franchise operator will serve the same customers, public and private
facilities, in the same manner as is done presently. The operator will also be required to
comply with State and City regulations already established for the collection and hauling
Exclusive Solid Waste Services Agreement
August 17, 2021
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of waste. The selection of the franchise operator is not an activity that would have a
significant effect on the environment and, therefore, the activity is not subject to CEQA.
FISCAL IMPACT
The following table summarizes the annual fee revenue to the City in the proposed
agreement, with a comparison to current fees received. Overall fee revenue would
increase by approximately $2 million, primarily related to the new Vehicle Impact Fee.
Item Fund Account Current Proposed
Residential Franchise Fee General Fund 01102002-
50056
$1,851,500
Commercial Franchise Fee General Fund 01102002-
50057
$6,700,000
Direct-Billed Franchise Fee
(Multi-Family, Commercial,
Roll-Off, Special Bins,
Optional Services)
General Fund 01102002-
50058
$8,000,000
Subtotal Franchise Fee $8,551,500 $8,000,000
NPDES Residential Refuse
Enterprise
06917002-
53723
$202,100
NPDES Non-Residential Refuse
Enterprise
06917002-
53724
$947,300
NPDES Refuse
Enterprise
06917002-
53743
$1,010,000
Subtotal NPDES Fee $1,149,400 $1,010,000
Administrative Fee for
Public Works
Refuse
Enterprise
06917002-
53742
$2,000,000 $2,326,800
Subtotal Admin. Fee $2,000,000 $2,326,800
NEW Vehicle Impact Fee Street
Construction
05917002-
53729
$2,266,666
NEW Clean Business
Initiative Fee
TBD*TBD*$50,000
GRAND TOTAL ALL FEES $11,700,900 $13,653,466
* To be determined at the time of the development of the FY 2022-23 budget adoption.
The proposed franchise fee revenue to the General Fund is the greater of $8 million or
17.3% of Athens Services direct billings for multi-family, commercial, roll-off, special bins
and optional services, which are adjusted annually based on the Consumer Price Index
Exclusive Solid Waste Services Agreement
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(CPI), Producer Price Index (PPI) and Orange County Landfill System per ton gate rate
Consumer Price Index (CPI). The National Pollutant Discharge Elimination System
(NPDES), Administrative, and Vehicle Impact fees will be adjusted annually based on the
CPI.
The Vehicle Impact fee revenue will be dedicated to street repairs.
To cover costs incurred for preparing and mailing the Proposition 218 notices, $100,000
has been budgeted and is available for expenditure in Fiscal Year 2021-22 in the Refuse
Enterprise as follows:
FISCAL
YEAR
ACCOUNTING
UNIT-ACCOUNT #
FUND
DESCRIPTION
ACCOUNTING UNIT,
ACCOUNT DESCRIPTION AMOUNT
2021-22 06917640-63001 Refuse Collection
Service
Refuse Collection
Service, Miscellaneous
Operating Expenses
$100,000
TOTAL $100,000
EXHIBIT(S)
1. Agreement with Athens Services https://www.santa-ana.org/solid-waste/Athens-
Services
2. Agreement with CR&R https://www.santa-ana.org/solid-waste/CR&R-Incorporated
3. Agreement with Republic Services https://www.santa-ana.org/solid-waste/Republic-
Services
4. Agreement with Waste Management https://www.santa-ana.org/solid-waste/Waste-
Management-of-Orange-County
5. Resolution to Award a Solid Waste Franchise
6. Solid Waste Services Implementation Timeline
Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency
Approved By: Kristine Ridge, City Manager
Resolution No. 2021-XXX
Page 1 of 3
RESOLUTION NO. 2021-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA
ANA APPROVING AN EXCLUSIVE AGREEMENT FOR THE
COLLECTION AND HANDLING OF SOLID WASTE
WHEREAS, Section 1300 of the Santa Ana City Charter authorizes the City
Council to grant utility franchises; and
WHEREAS, under Section 1300 of the Charter, the City Council may grant a
franchise to any person, form, or corporation, whether operating under an existing
franchise or not, and may prescribe the terms and conditions of any such grant; and
WHEREAS, the Legislature of the State of California, by enactment of the
California Integrated Waste Management Act of 1989 (Public Resources Code section
40000 et seq.) established a solid waste management process which requires cities and
other local jurisdictions to implement plans for source reduction, reuse and recycling as
integrated waste management practices for solid waste attributed to sources within their
respective jurisdictions; and
WHEREAS, Assembly Bill 341, codified in Public Resources Code sections 42649
through 42649.7, requires any business that generates four cubic yards or more of
commercial solid waste per week and multifamily residential dwellings of five units or
more to arrange for recycling services, and requires local jurisdictions to implement
commercial solid waste recycling programs that may include enforcement provisions that
are consistent with the jurisdiction’s authority; and
WHEREAS, Assembly Bill 1826 authorizes and requires local jurisdictions, on and
after January 1, 2016, to implement an organic waste recycling program to recover
organic waste generated by certain commercial premises and multifamily residential
dwellings; and
WHEREAS, Senate Bill 1383 authorizes and requires local jurisdictions, on and
after January 1, 2022, to implement an organics recycling program to recover organic
materials from residential and commercial premises; and
WHEREAS, Public Resources Code section 40059 authorizes cities to award
exclusive franchises for the collection of solid waste, and to determine the procedure by
which such franchises will be awarded; and
WHEREAS, Public Resources Code section 49300 authorizes cities to award such
contracts by resolution; and
EXHIBIT 5
`
Resolution No. 2021-XXX
Page 2 of 3
WHEREAS, the City Council has adopted regulations for the collection of solid
waste, appearing at Article II of Chapter 16 of the Santa Ana Municipal Code; and
WHEREAS, the City currently contracts with Waste Management Collection and
Recycling, Inc., a California corporation dba Waste Management of Orange County for
exclusive collection and handling of solid waste; and
WHEREAS, the City intends to award to Arakelian Enterprises, Inc. dba Athens
Services a new, exclusive agreement for the collection and handling of solid waste,
following issuance of Request for Proposals No. 20-097, dated March 24, 2020, and
under the terms and conditions described therein, as further negotiated by the parties;
and
WHEREAS, the new agreement allows Athens Services to provide exclusive solid
waste collection and related services within the City from July 1, 2022 through June 30,
2032, with option for extension; and
WHEREAS, following a duly noticed public hearing pursuant to Section 1303 of
the City Charter, the City Council awards the new agreement under the authorities
specified above and subject to further compliance with California Constitution Article XIIID
(Proposition 218) and the Proposition 218 Omnibus Implementation Act (Govt. Code
Sections 53750 et. seq.); and
WHEREAS, given that the agreement will provide for the continued collection of
solid waste in the service areas as it currently exists, the City Council finds and
determines that the requirements of the California Environmental Quality Act (“CEQA”)
have been satisfied, and this action on part of the City Council is exempt from CEQA
pursuant to the sections of the State CEQA Guidelines cited below.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa
Ana as follows:
Section 1. The agreement attached to this resolution as Exhibit A and
incorporated by this reference is hereby approved subject to further compliance with
California Constitution Article XIIID (Proposition 218) and the Proposition 218 Omnibus
Implementation Act (Govt. Code Sections 53750 et. seq.), and the City Manager is hereby
authorized to execute the agreement on behalf of the City of Santa Ana.
Section 2. The City Council finds and determines that this action is not subject
to the California Environmental Quality Act pursuant to the following sections of the State
CEQA Guidelines: Section 15301 (operation, repair, maintenance, permitting, leasing,
licensing, or minor alteration of existing public or private structures, facilities, mechanical
equipment, or topographical features, involving negligible or no expansion of existing or
former use); Section 15307 (actions by regulatory agencies for protection of natural
resources); Section 15308 (actions by regulatory agencies for protection of the
environment); and Section 15061(b)(3) (common sense exception).
`
Resolution No. 2021-XXX
Page 3 of 3
Section 3. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this _____ day of ____________, 2021.
________________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
John M. Funk
Sr. Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers _
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2021-XXX to be the original resolution adopted by the City Council of the
City of Santa Ana on _______________.
Date: ______________________ ________________________________
Clerk of the Council
City of Santa Ana
EXHIBIT 6
City of Santa Ana Solid Waste Services
Implementation Timeline
DATE ACTIVITY
August 2021 Award by City Council
Fall 2021 Proposition 218 Noticing (45 days in
advance of hearing)
Winter 2021 Proposition 218 Hearing
July 1, 2022 Commence New Services
Exclusive Solid
Waste Agreement CITY
COUNCIL MEETING PUBLIC
HEARING AUGUST
17, 2021 ITEM
43
Exclusive Solid Waste Agreement Award
Award exclusive solid waste agreement to Athens Services.
Agreement becomes effective 30 days from Council approval.
Services commence July 1, 2022 and expire June 30, 2032, with a
mutual option to extend for a period of five years, and a City option to
extend for a period of up to thirty-six months.
State of California, School & College Districts and others agencies, are
not subject to the City of Santa Ana's agreement for solid waste
services. These entities contract for solid waste services directly with
service providers.
All proposers offered varied levels of environmental leadership
initiatives and agreed to comply with the requirements of the
Department of Transportation, South Coast Air Quality Management
District and California Air Resources regulations.
All collection vehicles will be powered by natural gas and be model
year 2021 or newer.
Exclusive Solid Waste Agreement Award (cont.)
The cost of the Athens Services' contract is the lowest overall for
services similar to those proposed by the other firms.
Lowest price throughout the term of the contract for the 42,000
residential customers with curbside service with immediate savings
of $4.81 per month.
Lowest additional residential curbside trash cart rate of $4.39 per
month.
Lowest senior/mobile home low -generator service rate of $13.16
per month.
Lowest commercial cart service of $85 per month.
Lowest 3-cubic yard temporary bin service of $95 (not including
disposal).
Lowest 3-cubic yard temporary bin service of $95 for construction
and demolition debris (not including disposal).
Exclusive Solid Waste Agreement Award (cont.)
Athens Services received the highest customer satisfaction rating
among the four haulers.
Clean City Initiative Services will be performed with in-house staff.
Athens Services proposed ten free bulky item pickups per quarter per
dwelling unit for apartments and condominiums; a total of 40 items
per year per dwelling unit. Other firms proposed unlimited bulky item
pick up.
Athens Services also proposed:
The second -lowest pricing for commercial service of $449.88 (both
include refuse, recycling and organics) (service level — 3 yard refuse
bin once per week, 3 yard recycling bin once per week, and 2 yard
organics bin once per week).
The second -highest pricing for multi -family residential service of
597.21 (service level — 3 yard refuse bin twice per week, 3 yard
recycling bin once per week, and 1 organics cart once per week).
Employees are not represented by a collective bargaining agreement
labor union).
Outreach
A detailed Solid Waste Contract Residential Customer Impacts
presentation was shared with the following:
Artesia Pilar and Flower Park NA
Com-Link
Downtown NA
Fisher Park NA
Floral Park NA
Washington Square NA
Willard Square NA
Wilshire Square NA
Citywide Virtual Community Meeting
Citywide In -person Community Meeting
Solid Waste Contract Business Customer Impacts presentations
were made virtually to the Environmental and Transportation
Advisory Commission and at a Citywide community meeting.
Proposition 218 Process
Authorize preparation of documents to proceed with notification
of proposed solid waste rates effective July 1, 2022 through June
30, 2023 and estimated increases for July 1, 2023 through June 30,
2027 to comply with Proposition 218.
Includes:
Preparation and mailing of notices to all Santa Ana property
owners.
Schedule a public hearing at a future Council meeting, on or
after September 21, 2021.
Timeline
March 24, 2020 Solid Waste Agreement RFP Released
February 16, 2021
Co uroc it drects staff to ergot iate w th the b La proposers
and return with four fully executed agreements.
June 22, 2021 Work Study Session Held
June —Aug., 2021 Individual meetings with Council as needed.
July 20, 2021
Resol io n o f Irte it to gra t e xl Ls ive sol id waste
agreement to any one of four proposers adopted.
A cbpt io no f resol t io nto award a ne xl Ls ive sol i dwaste
oy August 17, 2021 agreeme t to ore o f fu La proposers. A thor izat io n o f
Proposition 218 process.
Fall 2021 Proposition 218 Noticing (45 days in advance of hearing)
Winter 2021 Proposition 218 Hearing
July 1, 2022 Services under new agreement begin.
Clean City Initiative Services
r :
1 WWI" - ' ..
kmk AMEd _L A MM 4M d
Abandoned item collection and
litter clean up
Right-of-way trash containers
service
Right -of way trash container
steam -cleaning
Hardscape cleaning
Sidewalk, curb, gutter power
washing
Porter Service
Weekly Alley Clean ups
Two, two -person crews, two 8-5 pm, six days 9,984
trucks per week
One driver and truck
7 am-11 am, six
1,248
days per week
One steam cleaning truck and 8-5 pm, six days 2,496
personnel per week
Four, two -person crew four 8-5 pm, six days 19,968
trucks per week
One, two -person crew one 8-5 pm, six days 4,992
truck per week
Two, two -person crews, two 7-6 pm, five days 10,400
trucks per week
Two -person crew and front 7-6 pm, six days 6,240
loader per week
Questions and
Discussion