City of Signal Hill Cherry Avenue Signal Hill, CA

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1 September 1, 2009 City of Signal Hill 2175 Cherry Avenue Signal Hill, CA AGENDA ITEM TO: FROM: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL CHARLIE HONEYCUTT DEPUTY CITY MANAGER SUBJECT: PUBLIC HEARING - RESOLUTION APPROVING A SOLID WASTE MANAGEMENT AMENDED AND RESTATED AGREEMENT WITH EDCO WASTE SERVICES, LLC Summary: The existing Solid Waste Management Franchise with EDCO Waste Services, LLC is scheduled to expire on February 1, The City has completed negotiations with EDCO on a new Franchise Agreement with a 15-year term. This resolution approves a Solid Waste Management Amended and Restated Agreement between the City and EDCO Waste Services, LLC. Recommendations: Waive further reading and adopt the following resolution, entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, APPROVING A SOLID WASTE MANAGEMENT AMENDED AND RESTATED AGREEMENT BETWEEN THE CITY OF SIGNAL HILL AND EDCO WASTE SERVICES, LLC, D.B.A. SIGNAL HILL DISPOSAL Fiscal Impact: The monthly rates established in September 2008 for single-family, multi-family, and commercial accounts will serve as the base rates for the new Franchise as shown in the table below. These rates include the NPDES fee that was established in 2002.

2 Resolution Approving A Solid Waste Management Agreement with EDCO September 1, 2009 Page 2 Solid Waste Collection Rates Account Monthly Rate Single-Family $ Multi-Family $ (1 three cubic yard bin collected once a week) Commercial $ (1 three cubic yard bin collected once a week) Multi-family and commercial rates will vary based on the size of the bin requested and frequency of trash collection. The Franchise incorporates a three-year rate freeze for single-family and multi-family accounts. There is no rate freeze proposed for Commercial rates. EDCO Waste Services, LLC (EDCO) is authorized to pass through to customers, disposal site tipping fee increases imposed by waste disposal sites such as SERRF and Puente Hills Landfill. Additionally, service collection rates may be adjusted to account for annual inflationary increases to a maximum of 3.5 percent. Neither of these increases may occur until the increases are adopted through a Proposition 218 process. Background: On May 21, 2002, the City Council approved a Solid Waste Management Amended and Restated Agreement between the City and EDCO. The Agreement provided for a sixyear extension to the previous Franchise, froze rates for residential and commercial customers and expanded the services available to residents. The services included the following: The City s single-family recycling program offered to multi-family accounts to help multi-family accounts reduce the cost of trash collection because recyclables are collected for free. Signal Hill Disposal implemented a curbside used motor oil collection program. The semi-annual bulky item collection program was expanded to allow residents to dispose of large items two additional times per year at no cost. Analysis: Since early 2006, the City and EDCO have worked together to plan the construction of a solid waste transfer station in the Westside Industrial Specific Plan area near California Avenue and Patterson Street. The transfer station will give the City a solid waste disposal option as local landfills close, provide an opportunity to stabilize trash rates, promote recycling goals and bring a new source of revenue to the City. In July 2008, the City Council approved a Memorandum of Understanding with EDCO to allow the development of more detailed plans for the transfer station facility, to process the necessary project entitlements, and negotiate various agreements.

3 Resolution Approving A Solid Waste Management Agreement with EDCO September 1, 2009 Page 3 In creating the transfer station, it is beneficial to guarantee a waste stream for the transfer station. The existing Solid Waste Management Franchise with EDCO is scheduled to expire on February 1, Over the past year, the City and EDCO have been negotiating the terms for a new Franchise. The negotiations have concluded and staff is presenting the attached Solid Waste Management Amended and Restated Agreement for approval. The major points of the new Franchise include the following: 15-year term beginning in February 2010 and expiring in February Three-year rate freeze on the solid waste collection component for single-family and multi-family accounts. Combined with the rate freeze included in the 2002 Franchise, rates for single-family accounts will have not increased for a period of 13 years. Future increases on solid waste collection rates are capped at 3.5 percent. EDCO will develop a multi-family education program to promote recycling in apartment and condominium complexes. EDCO will assist the City in the collection and removal of debris during emergencies and natural disasters. A noteworthy change to the agreement is that EDCO will take over the billing responsibilities for single-family accounts currently performed by the City. Under the current practice, the City includes trash collection charges on the monthly water bill. Residents will soon begin receiving a separate invoice from EDCO for trash collection services. EDCO will bill on a quarterly basis in advance of providing service, which is standard billing practice for waste disposal companies. Therefore, rather than receiving a monthly bill of $13.77, residents will receive a quarterly bill totaling $ EDCO billing offers payment options that are not available by the City. These options include paying your bill on line or by credit card. Residents can also have their quarterly payment automatically deducted from their checking account or charged to their credit card. On July 21, 2009, the City Council adopted a Resolution of Intent stating the City Council s intent to grant a Solid Waste Management Franchise to EDCO and set a public hearing for August 18, 2009 to receive public comment on the matter. At the regular meeting of August 18, 2009, the City Council opened and continued the public hearing to the meeting of September 1, 2009 to enable revisions to the language in the agreement to be finalized. Staff feels that EDCO has a long history of providing high quality and responsive service to the City. Therefore, staff is recommending the approval of Solid Waste Management Amended and Restated Agreement with EDCO.

4 Resolution Approving A Solid Waste Management Agreement with EDCO September 1, 2009 Page 4 Approved: Kenneth C. Farfsing

5 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, APPROVING AN AMENDED AND RESTATED SOLID WASTE HAULING AGREEMENT BETWEEN THE CITY OF SIGNAL HILL AND EDCO WASTE SERVICES, LLC, D.B.A. SIGNAL HILL DISPOSAL WHEREAS, the City of Signal Hill ("City") desires to provide its residents and businesses with the highest quality of solid waste hauling services (i.e., regular refuse pick-up and removal from City residents and businesses) while implementing waste diversion strategies that will enable the City to comply with State law; and WHEREAS, the City finds that the provision of City-wide waste hauling services is best achieved by the granting of an exclusive franchise to a single service provider since such exclusive franchises maximize the City's ability to regulate and oversee the quality of refuse services and to maintain uniform and consistent levels of services throughout the City, thus the furthering the public health, safety, and wellbeing; and WHEREAS, EDCO Waste Services, LLC, d.b.a. "Signal Hill Disposal," has been serving the City since August 15, 1986, pursuant to a grant of exclusive franchise and series of franchise contracts with the City (the "Prior Agreements"). Throughout its performance of the Prior Agreements, EDCO has consistently demonstrated that it is qualified and competent to perform the solid waste hauling services desired by the City in a professional and high-quality manner; and WHEREAS, the latest contract for EDCO's refuse hauling services is set to expire on February 1, 2010; and WHEREAS, given EDCO's professional and high-quality performance of refuse hauling services in past years, the City desires, and finds that it is in the best interests of its citizens, to continue utilizing EDCO as the City's exclusive provider of waste hauling services; and 1

6 WHEREAS, in order to continue utilizing EDCO's hauling services on an exclusive franchise basis, the City and EDCO have negotiated an amended and restated agreement (the "Proposed Agreement") to re-grant a fifteen-year exclusive franchise to EDCO for its provisions of waste hauling services in the City; and WHEREAS, the City is authorized to enter into the Proposed Agreement and by this Resolution approve the granting of the franchise established by the Proposed Agreement pursuant to (i) Public Resources Code Section because it relates to matters of local concern, including the provision of solid waste handling services, and (ii) Chapter of the Signal Hill Municipal Code expressly authorizes the Council to enter such exclusive franchise by four/fifths vote based upon adoption of the findings specified therein; and WHEREAS, pursuant to Resolution No , the City Council of the City of Signal Hill, at its regular meeting held on July 21, 2009 declared and published notice of its intent to grant said franchise; and WHEREAS, at its regular meeting on August 18, 2009, after holding a duly noticed public hearing and hearing and passing upon all protests, the City Council determined that the public interest and necessity justify the approval of granting said franchise. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Signal Hill, California, finds as follows: Section 1. That the foregoing Recitals and findings made therein are hereby adopted by this reference into the terms of this Resolution. Section 2. Pursuant to Section , the City Council, by a four/fifths vote, makes and adopts each and every of the following findings as a prerequisite of granting an exclusive franchise to EDCO: A. That the qualifications, experience and financial standing of the franchisee make franchisee uniquely qualified to provide the franchised services; B. That the City has engaged in a reasonable process to determine franchisee s qualification and the qualifications of other potential franchisees; 2

7 C. That the nature of the franchised services, of the needed investment and the requirements of the franchise agreement are such that the community will best be served by a single franchisee rather than by providing competitive services; D. That the franchise agreement with the conditions required in Signal Hill Municipal Code Section will fully protect the interests of the public; and E. That there are adequate provisions in the franchise agreement to permit updating the agreement during the whole term of the agreement for changes in service needs, changes in law, advances in technology, changes in the market place, and other factors. Section 3. That, based upon the foregoing findings adopted by the Council by four/fifths vote, the City Council hereby grants a new exclusive franchise to EDCO for City-wide refuse hauling services concurrent with the Council's adoption of the Proposed Agreement. The Council grants said franchise and adopts said Proposed Agreement following a public hearing thereon, at which hearing any persons having any interest in the franchise or Proposed Agreement or any objections to the granting thereof were given an opportunity to appear before the City Council to be heard. Section 4. That the general terms and conditions upon which the Proposed Agreement is granted are that (i) the City grants an exclusive refuse services franchise to EDCO for a period of fifteen years, and (ii) EDCO shall provide high-quality refuse collection (i.e., trash hauling) services to the City's residents and business, and (iii) EDCO shall pay a regular franchise fee to the City, which franchise fee shall continue to be the same as that established in the Prior Agreement (namely, one "AB 939 Fee" equaling 5.6% of EDCO's gross receipts plus one "NPDES Fee" equaling 5.6% of EDCO's gross receipts); and (iv) EDCO shall charge City customers regular services rates, which service rates were adopted on September 2008, and (v) Single Family Unit and Multi-Family Unit Customer services rates shall be subject to a threeyear rate freeze after adoption of the Proposed Agreement, with any increases in rates being subject to the requirements of Proposition 218. Further particulars with reference to the grant of franchise and the Proposed Agreement are on file in the office of the Director of Public Works of the City of Signal Hill, California. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council this 18th day of August ATTEST: ELLEN WARD MAYOR 3

8 KATHLEEN L. PACHECO CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SIGNAL HILL ) I, KATHLEEN L. PACHECO, City Clerk of the City of Signal Hill, California, hereby certify that Resolution No. was adopted by the City Council of the City of Signal Hill at a regular meeting held on the 18th day of August 2009, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: KATHLEEN L. PACHECO CITY CLERK 4