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HomeMy WebLinkAboutInformational Update - SB 1383 Short Lived Climate Pollutants - BurrtecSTAFF REPORT CITY OF PALM DESERT PUBLIC WORKS DEPARTMENT MEETING DATE: August 27, 2020 PREPARED BY: Heather Horning, Senior Management Analyst REQUEST: Update on the City's implementation of Senate Bill 1383: The Short Lived Climate Pollutants: Organic Methane Waste Emissions Reduction Act implementation, and its impact on the Burrtec Waste and Recycling Services, LLC Franchise Agreement (Contract No. C27411) Recommendation Receive update on the City's implementation of Senate Bill 1383 (SB 1383): The Short Lived Climate Pollutants: Organic Methane Waste Emissions Reduction Act implementation, and its impact on the Burrtec Waste and Recycling Services, LLC (Burrtec) Franchise Agreement (Contract No. C27411). Strategic Plan The proposed action has no impact on the Strategic Plan. Background Analvsis Senate Bill (SB) 1383, the Short Lived Climate Pollutants: Organic Methane Waste Emissions Reduction Act (Lara, Chapter 395, Statutes of 2016) was passed by the Legislature in order to reduce greenhouse gases produced by organic material in the waste stream. The new legislation will require the City to implement a variety of organic waste reduction and recycling programs prior to January 2022. City Staff introduced this issue to the City Council through a Study Session on November 14, 2019. SB 1383 will have a large impact on the services the City is required to provide to its residents and businesses. These services are not included in the City's current Waste and Recycling Services Franchise Agreement (Agreement) with Burrtec, which expires in May 2023, so an amendment to the Agreement will be required. In order to assist the City with the implementation of SB 1383, including reviewing the Agreement and drafting an amendment, the City contracted with HF&H Consultants, LLC (HF&H) to provide various waste and recycling consulting services. City staff worked with HF&H to complete a thorough review the existing Agreement and identified changes that would need to be made to implement SB1383. A redline version of the Agreement is being drafted to incorporate these changes and any other staff requested changes or clean-up items. As soon as the first draft of the redline Agreement August 27, 2020 - Staff Report Update on SIB 1383 Implementation and Burrtec Franchise Agreement Page 2 of 3 is finished by the City and HF&H, it will be presented to Burrtec for their input and review. Burrtec will then propose how they would prefer to meet various requirements of SIB 1383 implementation and the associated rate impacts. The City has contracted with Burrtec to provide waste and recycling services for the City since 2006, when they received the contract through an assignment from Waste Management Services. The current Agreement is an amendment approved in May 2015. In recent years, Burrtec has approached the City requesting either an extraordinary rate increase or an amendment to increase rates due to a decrease in foreign demand for recyclables causing a drop in their market value. The Agreement allows for extraordinary adjustments to rates at reasonable times for unusual changes in the cost of providing services under the Agreement as long as Burrtec documents the extraordinary costs and provides financial information for the last three years. However, the Agreement specifically excludes changes in the market value of recyclables as an allowable reason to request an extraordinary increase. To date Burrtec has not provided the required documentation to complete the extraordinary increase process. Burrtec has indicated that they would like to address the previously discussed increases to the rate structure due to increased cost in recycling during amendment negotiations to implement SIB 1383 requirements. Burrtec also stated a desire to extend the term of Agreement in the amendment. Staff will receive the details of these requests with their proposed redline Agreement. It is important to note that if the City Council would prefer not to extend the Agreement term, and instead go through a formal proposal process prior to the current Agreement expiration date, then City staff would need to initiate the process in early 2021. The entire procurement process would take about two years to complete, and the cost of a consultant to assist with the process is estimated to cost about $150,000. In the event that the City Council directs staff to proceed with this, an appropriation will need to be made in the amount of the consultant's contract at the time the contract is awarded. Upon receipt of Burrtec's proposal, staff will request direction from the City Council on how to proceed with the proposed amendment and whether staff should undertake a solicitation for proposals in early 2021 for the franchise agreement that expires in 2023. August 27, 2020 - Staff Report Update on SB 1383 Implementation and Burrtec Franchise Agreement Page 3 of 3 Fiscal Analvsis This action has no fiscal impact. In the event that the City Council directs staff to hire a consultant to assist with a formal proposal process for waste and recycling services, an appropriation would be needed in the amount of the consultant's contract at the time the contract is awarded. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW }f argreavey Janet M. Moore Tom Garcia, P.E. Robert W. Hargreaves City Attorney Director of Public Works Director of Finance City Manager, Lauri Aylaian: VENDOR: Burrtec Waste and Recycling Services, LLC 41-575 Eclectic Street Palm Desert, California 92260 ASSISTANT CITY MANAGER Andy Firestine Andy Firestine Assistant City Manager