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27. Solid waste services franchise agreement LAGCo (Recology)CUPERTINO PUBLIC WORKS DEPARTMENT SUMl'VIARY AGENDA ITEM a AGENDA DATE November 30, 2009 SUBJECT AND ISSUE Consider approving a S-Year Solid Waste Services Franchise Agreement with Los Altos Garbage Company (LAGCo dba Recology, A Norval Co:alpany} for solid waste collection with additional collection services and expansion of recycling services, including curbside collection of household hazardous waste for a rate increase of SO cents a month ($6.00 per year} for the City of Cupertino effective November 1, 2010 and upon mutual agreement after November 1, 2014 an option for an additional five years beginning November 1, 201 S and authorize the City Manager to negotiate a f nal agreement with LAGCo and report back to the City Council for approval by Spring of 2010. BACKGROUND On July 7, 2009 Council directed staff to evaluate LAGCo's May 29th proposal for a S-year contract extension and to report the results of that evaluation and any negotiated agreement on solid waste services back to Council. This effort has resulted its completed negotiations and a favorable agreement for the terms of a five-year contract with LAGCo. To ensure that the City and its residents recognize that the City is retaining the same solid waste sen~ice company, the term LAGCo will continue to be used for a period of time to allow for sufficient orientation to the new name, Recology. All references to LAGCo in this report or in other documents will mean LAGCo, dba Recology, A Norval Company as referenced in the recommendations. A key component of this agreement, to maintain Cupertino's role as a leader in recycling solid waste, is that the City staff has, as Council requested, been. able to negotiate a contract with Recology that will result in a 7S°/a rate in waste diversion, i.e., that '1S% of all solid waste collections will be diverted from the landfill by recycling for other re-usable products. Currently the State of California requires a minimum of SO% diversion and Cupertino is currently diverting a b0% of all solid waste collections. The agreement terms negotiated with LAGCo for a five year contract not only includes a 7S% diversion goal by the end of the fourth year of tl-e term of the fzve year contract but also includes expanding recycling features at a minimal cost to tb.e ratepayers. 27 - ~ 1 Notable expanded recycling features in the proposed Agreement include the collection of: • Food waste (organics) from residents along with plant trimmings fox processing into compost (I..AGCo will provide each household a pail in which to save food scraps until they are combined with plant trimmings~for collection); • An expanded list of materials in Cupertino's single-stream recycling service; • Single-stream recycling and food waste from multi-family town homes, condominiums and apartments; • Organics from restaurants, grocery stores and other businesses in Cupertino; • Compact fluorescent light bulbs from residents at curbside when secured in a zip-lock plastic bag; • And, cooking oil from residents when contained in a 1-gallon container with a closed screw-top lid Additional features of the proposed agreement include: At least two recycling events for residents per year will be offered by Recology at De Anza. College. These events will include sensitive document shredding and drop off of all the items that are currently offered at LAGCo's Environmental Recycling Days (e.g. large used play structures and toys, construction debris, used clothing, E-waste and fluorescent bulbs and batteries). In response to request for lower or competitive debris box rates. from residents and Cupertino's business community, Recology will offer amid-sized debris box (20 cubic yard) at $425 ($50 is proposed to be subsidized by the City). Currently, debris boxes are available with a 16 CY capacity at about $397, and a 26 CY capacity at about $60$ and a 30 CY capacity at $71 $. The City and LAGCo are also proposing to expand the current household hazardous waste collection events offered in partnership with Santa Clara County by incorporating door-to-door collection of household hazardous waste (e.g. paints, pesticides, fertilizers, cleansers) by appointment. This innovative new service will require a $0.50 per month ($6.00 per year) increase in residential garbage rates upon implementation of the new agreement. This is the only rate increase proposed and it provides for a new service. The cost of the expanded commercial organics processing is relatively uncertain. As such, under the terms of the new contract, LAGCo, at the end of the first year will evaluate and report any fluctuations in the cost of that expanded service. On the basis of that evaluation, under the new contract LAGCo may propose a rate adjustment for commercial users if necessary to cover any increased costs. However, the City will retain the right to approve, disapprove or modify any such rate proposal. 27-2 2 NET REVENUE /OPERATIONS PROJECTION Attachment B (the table of revenue and cost projections), shows a first year projection of net revenues (the 17% of rate payer revenue called the "operating; revenue") less the Newby Island payment of approximately $558,000 for solid waste related operations. It should be noted that in the first 2 years of the new agreement the City is spending slightly moire money on solid waste programs than it is collecting in solid waste operating revenue. (See T;~.ble below) Net Revenue / Opt:rations Projection (Numbers are $1000's rounded) ITEM 2011 2012 2013 2014 LAGCo Payment $1,258 $1,25f- $1,258 $1,258 Newby Island Payment (7pp} ~65(~ (6001 (550) Net to Ci $558 $608 $658 $708 Pro am Costs* (600) 61i) 620) 630 Im act'`* $ 42 $ :~) $ 38 $ 78 *The City's waste management program cost of approximately $600K annually and is expected to increase by 1-2% per year thereafter. Th~;se expenses include program staff, supplies, public education, street sweeping and residential p~~rticipation in the County's household hazardous waste collection (HI3W} events. **During the first year of the proposed Agreement the City's waste management operations revenue, expected to be $558,000, will fall :short of covering program expenses, projected to be approximately $600,000, by approximately $42,000. As landfill costs decrease, with increased diversion of organics, the solid waste operations revenue from the Franchisee will cover the costs and ultimately will provide extra funcL~ for the expansion of the City's waste management programs. Therefore, as noted above, after the second year, due to the collection of orgazucs and a higher diversion rate, the City will make enough from the operating revenue to cover all solid waste management program costs. In the fourth and fiftJi years the City will begin to have about $38K and $78K to pay for any increases in costs of solid w,~,ste programs and to pay for additional ratepayers' education for expanding solid waste programs as tb.ey may be required. CONCLUSION A summary of the negotiated final agreement of the terms of the new LAGCo 5-year contract is attached to this report. The current contract expires; on October 31, 2010 and the new contract would take effect on November 1, 2010. City Staff and LAGCo Management have agreed to all of the business terms described by the attached General Terms of Agreement. As such staff recommends approval of these terms. 2~-s 3 FISCAL IlVIPACT Table A attached to this report outlines a comparison of the cost and revenue distribution under the new contract in comparison to the current contract. In summary, in order to simplify the transactions, the Staff and LAGCo have agreed to modify the distribution of costs and revenues such that the city will receive a smaller percentage of reimbursement from all revenues in exchange for LAGCo paying directly for all services except for the Newby Island Landfill tonnage fees. The City retains the responsibility for the~payment of the Newby Island fees. As the diversion rate increases up to 75%, the tonnage to the landfill decreases resulting in a lower landfill cost to the City. The cost/revenue projections show a slight increase in net revenue to the City over the life of the new five-year contract. The franchise fee of 12% of gross revenues, which goes directly to the general fund, remains unchanged. Based on the current annual revenue projection of $7,400,000 the franchise fee would be approximately $888,000 annually. It has occasionally been noted that because the franchise fee goes to the general fund, which is unrestricted, the fee {currently 12%) should be increased and offset by a decrease in the percentage of the operations revenue (proposed to be 17%). Since all revenues are from rate-payers and should be expended to the greatest extent to fund solid waste services, staff does not recommend making such a change at this time. STAFF RECOMMENDATION Approval of a 5-Year Solid Waste Services Franchise Agreement with Los Altos Garbage Company (LAGCo dba Recology, A Norcal Company) for solid waste collection with additional collection services and expansion of recycling services, including curbside collection of household hazardous waste for a rate increase of 50 cents a month ($6.00 per year} for the City of Cupertino effective November 1, 2010 and upon mutual agreement after November 1, 2014 an option for an additional five years beginning November 1, 2015 and authorize the City Manager to negotiate a final agreement with LAGCo and report back to the City Council for approval by Spring of 2010. Submitted by: ~~~~~ Ralph A. Qualls, Jr. Director of Public Works Approved fox submission: David W. Knapp City Manager Attachments: Terms of Agreement for New Contract between City and LAGCo A -Table of revenue and cost projectians for new contract B -Table of Rate Comparisons with other cities 27-4 ~ General Terms of Agreement DIVERSION GOAL The City's goal is to achieve a 75% diversion ;;oal by the end of 2014. LAGCo projects that the expanded programs they have proposed will achieve the 75% diversion goal for Cupertino, minimize organics from th~~ landfill, and advance the City toward zero waste by the year 2020. LAGCo must reach the goal of 75% diversion by the end of the 4th year of this new Agreement to be offered an option to extend tt~e contract for five years following the first f ve-year term. If by the end of the fourth year, LAGCo does not show that they have reached the 75% diversion goal for the City, the contract extension may not be granted and the City may exercise its prerogative to go out to bid and select a new contractor before the end of the f fth year. LAGCo will provide the City with annual reports startv~g at the end of the first year of this Agreement (by December 31St of each year, for the period of 1`lovember 1St through October 31St) describing progress achieved towards the 75% diversion €;oal. FRANCHISE FEE LAGCo will continue to pay the 12% franchisf; fee that it currently pays to the City.on gross receipts related to services provided under this Agreement. In addition to the franchise fee, LAGCo will pay the City 17% of the applicable operating revenue to fund the City's waste management operating costs. PERCENTAGE FOR CITY'S QPERATINC~ REVENUE LAGCo will pay the City a waste management operations fee {operating revenue} of 17% on residential, multi-family and commercial revenue. The 17% will not change during the term of this Agreement, but the revenue received will increase automatically with annual Consumer Price Index (CPI) increases on customer rates. LAGCo will continue to reimburse the City for costs associated with debris box disposal at Newby Island Landfill. CITY LANDFILL CONTRACT The City has an agreement with International Disposal Corporation {IDC) which is a wholly owned subsidiary of AIlied Waste Systems, for disposal of wastes at Newby Island Landfill. This agreement extends through November 20, 202:;, which is beyond the term of LAGCo's contract extension so the City will continue to pay .for r~;sidential and commercial waste tipping fees at the landfill. PAYMENT FOR ORGANICS PROCESSIf~(G The City's current agreement with the Zanker ]load Landfill for processing organics will terminate on October 31, 2010, the same day as the current collections contract between the City and LAGCO. At that time LAGCo will assume all costs associated with organics collection and processing for the City. The waste managemenrt operations fee (operating revenue fee) will be set at 17% to continue to fund administration, staffing, program implementation, program promotion, educational outreach and other services and existing programs. 27-5 Page 1 , ANNUAL REPORTS FROM FRANCHISEE After the first year of implementation, LAGCo will provide the City with annual reports (by December 31St each year, for the period of November 1St through October 31St} showing their actual casts to process organics. These reports will help LAGCo to determine any incremental rate increases that will be necessary to fund the organics processing services. After providing actual costs and projections, LAGCo may prepare a request for a rate increase for Council's consideration. Rate increases would not be applied until the second year of implementing the expanded programs. Lower organics processing costs are expected during the first two years while customer participation has not yet reached the maximum. FRANCHISEE'S DIVERSION GOAL PLAN Based on waste composition data available from the California Integrated Waste Management Board (CIWMB), LAGCo will project the percent of diversion that will be achieved from each program element in their annual reports to the City so the City can determine how LAGCo plans to achieve the desired diversion goal. Based on CIWMB estimates, 40% of the municipal solid waste stream is comprised of organic material. LAGCo projects, through the expansion of their organics recycling programs in the residential, multi-family and commercial sectors, they will increase diversion of organics by 12,000 tons annually to meet or exceed a 75% diversion goal. LAGCo projects that the diversion will increase from 62% to 78% in the residential sector and from 20% to 70% in the multi-family and commercial sector. Before the Agreement implementation date (November 1, 2010}, LAGCo will provide the City with information on the percentage of customer participation and compliance that LAGCo is counting on to meet their goal. To help meet the diversion goal, LAGCo will continue to offer Environmental Recycling Days two times per year, expand their E-waste and U-waste programs to include the multi-family sectors and will introduce Curbside Inc to iinpleinent a door- to-door on-call collection for household hazardous waste (HHW). The table below shows LAGCo's projected increase in diverted tons as a result of the expanded programs: Landfilied Recycle Organics Percent Current Residential 9,000 6,256 7,516 62% Expanded Residential 4,916 6,256 11,592 78% Current MFD/Commercial 15,000 2,234 1,500 20% Expanded MFD/Commercial 5,600 3,024 10,200 70% Expanded Total Diversion 10,516 9,280 21,792 75% PUBLIC EDUCATION PLAN Before the Agreement implementation date, LAGCo will provide the City with their plan to reach residents of multi-family dwellings and effectively educate these residents on how to sort clean coinpostable materials from garbage and recyclables in order to maximize the success of their expanded recycling and compostuig programs. When garbage is collected, soiree of the compostable materials continue to be thrown into the garbage and taken to landfill. Before the Agreement implementation date, LAGCo will provide a plan to show the City how they will minimize the amount of cornpostables that are not properly separated by residential and commercial customers. z~-s Page 2 AB 32 REQUIREMENTS AB 32 requires cities to reduce their greenhouse gas (GHG) emissions. To help the City achieve these reductions, LAGCo will implement the following program elements: LAGCo will opexate their vehicles using B-40 biodiesel after it has been approved by the California Air Resources Board {GARB). (There are benefits and drawbacks involved with using a higher percentage of biodiesel.) LAGCo currently of~erates on B-20 biodiesel and will switch to B-40 upon GARB approval. LAGCo will provide the City with information on the environmental benefits of using biodiesel B-40 instead of B-2.0; and will weigh the environmental benefits of these fuels against the benefits of other alternative fi~els such as compressed natural gas (CNG) or liquefied natural gas (LNG). LAGCo supervisors that work in the City of Cupertino will drive hybrid half-ton pickups to reduce emissions. Recycling and organics-processing will be han.dhed locally in Santa Clara County to further reduce GHG emissions. Since organics disposed of in landfill are a significant generator of methane (a greenhouse gas}, LAGCo's expansion of food waste and organics recycling in the residential, multi-family and commercial customer base will reduce greenhouse gas emissions by diverting this material from landfill and by reducing methane that is produced as organic waste decomposes. LAGCo's organics program will produce a high quality, best end-use compost to be made available to Cupertino residents at the City's current corapost pick-up site. Additional items that LAGCo has implemented or proposed are described under the section of the terms of Agreement which covers Environmental Program Commitment. LITTER REDUCTION REQUIREMENTS LAGCo will add features to their collection vehicles (e.g., modify the hopper shielding} to minimize litter dispersion, especially from lig):it-weight material (e.g., film and foamed plastic) which is often blown away as it is dumped out of the carts on windy days and as the truck continues on its route. Before the Agreement implementation date, LAGCo will provide a plan for customer education to encourage residents to properly b~zg-in-bag their fihm plastic. RESIDENTIAL SERVICES Collection of Recyciables LAGCo will discontinue the collection of Polystyrene and Styrofoam for recycling due to the lack of reliable end markets for these materials LAGCo will continue the weekly colhection of single stream reeyclables from residential customers and will expand the materials collected to include: o Aerosol cans (empty) o Scrap Metal o Aluminum foil, trays and pans o Frozen food packaging (paper based) o All plastics #1-#7 o Film plastic (bagged) o Empty pizza boxes o Cooking oil set out at the curb in 1-gallon containers with a closed screw-on top 27-7 Page 3' After recycling and garbage toters have been emptied, drivers will put all toters back in the place, where residents put them so that toters do not block any part of a driveway or hinder street traffic. Special- Services In the fall of every year for the.term of this Agreement LAGCo will run their "Coats for Kids" program and expand the program to include blankets. LAGCo will promote this program through their residential newsletter, LAGCo's website, quarterly utility bill inserts, newspaper ads, and the City's website and access channel. LAGCo projects that they will collect 1,500 coats through curbside collection routes. LAGCo will launder the coats and blankets and donate them to local non-profit organizations to keep children and adults in need warm through the winter months. Collection of Compostables LAGCo will provide each home with a kitchen pail to store coinpostable waste. The compostable material will be placed into customer's existing yard-waste toter for collection on a weekly basis. Before the Agreement implementation date, LAGCo will provide the City with a list of materials tlrat should not be placed in the bin for compostables and guidelines for conveying this message to customers. Compostable materials that will be collected through the organics recycling program include: o All food products and bones, such as chicken, turkey, fish, beef, and pork o Coffee grounds, tea bags and filters o Dairy products o Pasta, bread and dough products o Al] fiuit and vegetables o Food-soiled pizza boxes o All soiled paper products, such as napkins, towels, plates, tissue, cups, and take-out containers o Waxed cardboard Organics Processing Facility LAGCo will transfer all compostable material, through their Rogers Avenue Transfer Station in San Jose, for processing at their affiliate facility, South Valley Organics, located near Gilroy. • LAGCo will inform the City of the level of contamination that~is acceptable for the collection and processing of compostable material. • LAGCo will define the level of contamination that will be allowed before the collected organics are sent to landfill. • Prior to the implementation of this agreement, LAGCo will provide a plan to the City that will address how they will handle organics that are contaminated. At-Home Composters LAGCo will provide up to 400 Biostack Bins for residential composters during the first year of this Agreement and deliver them to requesting residential customers at no additional delivery cost to the customer. Residents will initially pay for the Biostack Bin, buf will then be reimbursed the full cost of the Bin through a credit on their next monthly collection bill. LAGCo will report annually on the number of bins provided to households and issue a quote for additional bins if more than 400 residential customers request them. Four hundred Biostack bins will accommodate about 3% of Cupertino's households. LAGCo will include in their annual report to the City, a brief summary on the reduction in the number of tons of organics that that they process as a result of providing at-home composting bins. 2~-a Page 4 Collection of E-waste and U-Waste LAGCo will continue the weekly collection o1'used motor oil, filters, and dry cell batteries. LAGCo will add the weekly collection of compact fluorescent lamps (CFCs) that are sealed in separate zip-lock bag and placed at curbside o~i collection day. LAGCo will continue to collect motor oil in one-gallon containers, filters in clear zip-lock bags and batteries in separate zip-lock bags. All material will be brought back to the LAGCo yard, located at 650 Martin Avenue, and segregated into sepazate containers. All batteries, CFCs, E- Waste and U- Waste will be recycled through AERC, LAGCo's permitted processor, All used oil and filters will be collected and recycled through Evergreen Environmental, L.~GCo's permitted processor. LAGCo will no longer charge the City for disposal of batteries. Collection of Garbage LAGCo will continue to collect garbage from .residential customers in existing carts. With the expanded collection programs for single-stream recyclables and organics, minimal material will remain for disposal. LAGCo will report annu~~lly to the City on the level of can attrition they have assumed if most households reduce their servi~;e to 32-gallon containers. Mini-Can Collection Based on data from programs in surrounding areas, LAGCo projected that approximately 15% of Cupertino's customer base would utilize amini-can service. This could result in a small savings for the customer. However, the cost, if the customer needed to have extra garbage picked up a couple of times per year, may cancel out the savings from the reduction in cart size. There was not a significant environmental benefit or economic advantage for the residents in offering the insert. City staff decided not to pursue this option with LAGCo at this time. MULTI-FAMILY SERVICES Collection of Recyclables . LAGCo will offer the same single stream recy~~ling service to all multi-family dwelling (MFD} complexes as they offer for the single-stream residential program (see list of recyclables on page 4). LAGCo's Recycling Coordinator will visit every MFD complex during the first year of the expanded program and customize a program that utilizes either carts or bins. A quarterly list will be provided by LAGCo to the City listing the 1viFD customers that are utilizing recycling services, as well as an exception list of MFD complexes that decline to participate in the program, with reasons for any non-participation in the free program. LAGCo's plan will provide good customer service by offering a high level of support for the program. Collection of Compostables LAGCo will offer the same weekly collection of compostables for all MFD camplexes as they do for the residential organics program. LAGCo's Recycling Coordinator will visi# every MFD complex during the first year of the expanded program and customize a program that utilizes either . carts or bins. Individual dwelling units in complexes that participate in the organics program will be supplied with kitchen pails. A quarterly list. will be provided by LAGCo to the City listing the MFD customers that are utilizing the organic services, and an exception list of MFD customers that decline to participate in the program, with reasons for their non-participation in the program. Collection of E-waste and U-Waste E-waste and U-Waste will be collected from multi-family dwellings through the on-call collection program. As with residential E-waste and U-v~~aste, all material will be brought back to LAGCo's z~-s F'age 5 yard located at 650 Martin Avenue, segregated and placed into separate containers. LAGCo will also set up drop-off containers at MFD office locations for battery and cell phone recycling. Prior to the Agreement implementation date, LAGCo will look into the feasibility of collecting CFLs from drop-off containers in multi-family locations. COMMERCIAL SERVICES Collection of Recyclables LAGCo will offer the collection of the same weekly single-stream recyclables for commercial customers as they offer for the residential program. LAGCo's Recycling Coordinator will contact every commercial customer during the first year of the expanded program and customize a program that utilizes either carts or bins. A quarterly list will be provided by LAGCo to the City of the customers that are utilizing recycling services, with an exception list of commercial customers that decline to participate in the program, and reasons for their non-participation in the free program. LAGCo anticipates an uicrease of 700 tons of recycling material annually from the conversion of source separated recycling to single-stream recycling. Before the Agreement implementation date, LAGCo will provide to the City, their plan to deal with contaminated recyclables containers frown commercial customers. Collection of Compostables LAGCo will offer to collect the same compostables for commercial customers as they collect for their residential program. Their Recycling Coordinator will visit every commercial customer during the first year of the expanded program and customize a program that utilizes either carts or bins. An unlimited number of "slim Jim" containers will be provided for inside storage of organic materials. A quarterly list will be pxovided for the City by LAGCo of the commercial customers that are utilizing the organic services, with an exception list of commercial customers that decline to participate in the program with reasons for their non-participation in the program. LAGCo anticipates organics tonnage to increase from 1,500 tons to 10,200 tons annually with completion of the roll-out of this commercial collection program. TECHNICAL ASSISTANCE AND PROMOTION LAGCo will contact every commercial and MFD customer on an annual basis to ensure they are maximizing their recycling programs. In addition, LAGCo will promote the expanded recycling programs through presentations at local civic and homeowners group meetings, community functions, local schools, the company's website, and the City's website and access channel. DEBRIS BOX SERVICES Based on a recent survey of debris box rates in surrounding franchised cites, the franchised debris box rates in the City of Cupertino fall within the average (see Attachment A on the last page of this proposal). It was determined that customers would realize a savings if a mid-sized cubic yard (CY) debris box were offered. Currently LAGCo offers a 16CY, 26CY and 30CY debris box. Most cities in the surrounding area offer a 15CY, 20CY and 30CY debris box. With Cupertino customers the smaller debris box (16CY) was either too small or the next size up (26CY) was too large causing customers to pay more than necessary for their debris box. Based on the findings listed in Attachment A, LAGCo will offer 20-yard debris boxes at rates that are proportionate to the rates for the current 16-yard and 30-yard boxes. LAGCo will introduce amid-sized debris box at $475. Additionally, the City will subsidize $50 of the customer's cost, resulting in a 20-yard debris box for Cupertino residents at $425. It is anticipated that introducing amid-sized debris box at a lower price will take care of many of the complain#s from customers who tell us that Cupertino's 27-10 Page 6 prices for debris boxes are "much higher than in other cities". Rates for debris boxes other than the 20-yard size will stay the same. SPECIAL SERVICES Collection at City Facilities LAGCo will provide the collection of the same single-stream recycling and compostable material at all City facilities as are collected in the residential program. LAGCo will add new City collection sites as needed during the term of the new Agreement. Drop-Off Events LAGCo will continue to hold drop-off events two times per year on dates mutually agreeable to the City and LAGCo, at no cost to the City. These events enable residents to drop off recyclables, used clothing, yardwaste, E-waste, U-Waste, play structures, wood and other recyclable construction materials, and include document destruction services. On-Call Collection Days LAGCO will continue to provide two free on-~~all collection days annually at no charge to the customer and at no charge to the City. City-Sponsored Events LAGCo will participate in a minimum of six City-sponsored events per year. At each event, LAGCo will provide containers for recyclable.s, compostables, and garbage. LAGCo will staff an information booth at the events, promoting Cupertino's recycling services and other integrated waste management programs as appropriate. Materials Marketing and Promotion of Extf~nded Producer Responsibility The corporate phlosophy of LAGCo and its p~~.rent company, Recology-Waste Zero, is to collect and recover all recyclable material, and utilize the products for the highest and best end use. LAGCo's recycling processor, Smurfit Stone, is located nearby in San Jose and a majority of their material is marketed locally. All cardboard is processed in Santa Clara, and metal is processed in San Jose. Bottles, cans, glass, plastics, HDPE and PET are processed in California. Paper and mixed paper are processed in west coast mills and through Pacific Rim markets, depending on demand. In February 200$ Cupertino's City Council ad~~pted an Extended Producer Responsibility (EPR} Resolution. Recology-Waste Zero's corporate philosophy shares Cupertino's goal to reduce, rethink and reuse all appropriate materials. L~LGCo will adopt a similar extended producer responsibility (EPR) policy. LAGCo will also send letters, from dine to time, supporting legislation which puts the burden of disposal, c;specially for hazardous waste, on the manufacturer rather than on local government. It is believed that this trend will encourage manufacturers to make improvements in design that promote environrzental sustainability so that at its end-of--life, their product's materials will be salvaged and reused, thereby preserving valuable resources and preventing useful materials from accumulating; in landfills. PROGRAM FUNDING, FINANCING, AND FEES Recyclables Costs LAGCo will collect all single-stream recycling; material and pay for all processing costs of the material and retain all material value and rebates. 27-11 3'age 7 Rate Adjustments The annual rate adjustments, including those that are defined through any contract extensions, will be based 100% on the Consumer Price Index (CPI). Standard Services LAGCo will maintain the existing rate structure for residential, MFD, and commercial customers. LAGCo will eliminate the cost to the City for subsidizing residential bulky item pick-ups. One bulky item per year, per household, will be picked up by LAGCa at no cost to the customer. Additional bulky item pick-ups will be offered at the current cost of $25.00 per item and $15 for pick-up of a TV. Extra Services LAGCo will use the rate structure for extra services that is in the current franchise agreement for residential and commercial customers. Performance Standards LAGCo will adhere to the performance standards in Cupertino's current franchise agreement for residential, MFD, and commercial customers. Liquidated Damages LAGCo agrees to pay any liquidated damages incurred as described in Attachment A -Liquidated Damages, of Cupertino's existing franchise agreement. ARTIST IN RESIDENCE PROGRAM Recology operates an award winning, one-of-a-kind program in San Francisco called the Artist in Residence {AIR) Program. The program provides qualified artists the opportunity to create artwork out of garbage, which in turn is used to educate others about the environment and the arts. LAGCo will coordinate an annual tour of the AIR Program for the City of Cupertino and De Anza College {up to 40 people}. LAGCo will also coordinate with the AIR Program to provide an opportunity annually for two student volunteers from the Environmental Studies Program at De Anza College to participate in the AIR Internship Program.. Inters are educated about the AIR Program, enviromnental issues and sustainability and may assist with school tours and other AIR Program events. In addition, LAGCo will partner with the City of Cupertino to showcase projects front the AIR Program at the City of Cupertino library. LAGCo has also made arrangements with the AIR Program to accept residency applications from students in the Art Frogram at De Anza College. This unique opportunity provides students with workspace and access to "the dump" to scavenge materials for their art project. Participation in the program is not guaranteed as all applications are reviewed by the AIR Advisory Board and subject to their selection and approval. PROGRAM ENHANCEMENT Curbside Inc. has provided LAGCo with a proposal to provide on call curbside household hazardous waste (HHVi~ collection to the residents of Cupertino. Based on their experience in other communities they serve, 10% of the residential base participates in this type of program. The z~-~z Page S cost, based on 10% participation, is $0.45 per :home per month. If participation exceeds 10% up to 20%, the cost per home would increase to $0.`~9 per home, and anything over 20% participation will be $0.64 per home. LAGCo will collect a. $0.50 fee on each residential bill and will pay Curbside Inc the costs to run the HHW collection program. LAGCo will track the revenue from the $0.50 fee along with the monthly cost to pay fir this program and will report the findings to the City in their annual reports (due on December 31St) Curbside Inc. will provide one pharmaceutical and one sharps drop-box container at convenient locations in Cupertino. RECOLOGY'S STATEMENT OF ENVIRONMENTAL PROGRAM COMMITMENT In California, established ideas concerning the economic consumption model of extraction, production, distribution, consumption, and disposal is being seriously challenged. This transformation is being partially driven by the increasing understanding of climate change and an entity's carbon footprint. At LAGCo andRecology, Inc. we are taking a systematic approach to incorporate sustainabiliry, green chemistry, zero waste, closed loop production, renewable energy, and local living economics in our business pra~~tices. We take caring for the environment very seriously. It is more than part of our motto - it is at the core of our culture at Recology and our operating companies. 27-13 F'age 9 - FY 08-09 Debris Box (Roll-off} Source Separated Rate Comparison 15yd 20yd1 30yd Cupertino $371 -----' $678 Los Altos $566 N/A $702 Los Altos Hills N/A $405 Saratoga N/A $483 $584 Monte Sereno N/A $473 Campbell N/A $476 $577 Los Gatos N/A $480 $581 Sunnyvale $524 $640 $697 Mountain View $384 $462 Paio Alto $727 N/A $1,014 Santa Clara N/A $527 N/A Avg Rate $514 $493 $668 N/A $573 $605 Cupertino's FY09-10 Non Source Separated Debris Box Rates 16 Cubic Yard $397 26 Cubic Yard $608 30 Cubic Yard $718 ' LAGCo currently offers a 26-cubic yard (CY) debris box for Cupertino customers, but does not offer a 20-CY debris box. Most other cities in the surrounding area offer a 15CY, 20CY and 30CY debris box. Those cities do not offer the 26CY size. 2 LAGCo will offer amid-sized debris box (20CY) at a price {$475) that is approximately proportionate to the cost of the 16CY and 30CY debris boxes currently offered. The City has proposed subsidizing $50 of the cost for each 24CY debris box, resulting in a competitive rate of $425 for Cupertino customers. Other debris box prices swill remain the same. 27-14 Page IO - ATTACHE M E NT A (Revised 1i-13-09} tos Altos Garbage Company City of Cupertino Current annual revenue for Single Family, Mutti••Family, and Commercial Businesses collection services: $7,400,000 Current Projected Year 1 Z9% 17% iZ% City City LAGCo City of Cupertino payment from [AGCa at 29% of revenue from SFD, MFD and CB $2,146,000 ~ $1,258,000 ~ $888,000 Newby Island Disposal, $39.38 per ton (21,650 tons) ($852,577) Newby Island Disposal-Expanded Program Year 1(17,783 ($700,294) tons-3,867 tonnage reduction from Year 1 organics) Residential organic Processing, $41.36 per ton (x,427 tons) ($307,180) Residential organics Processing, $50 per ton- Expanded ($450,000) Program Year 1(9,000 tons) Commercial Organics Processing, $77 per ton (1,:!06 tons) ($92,862) Commercial Organics Processing, $77 perton-Expanded ($269,500) Program Year 1 (3,500 tans) Recycling Reimbursement ($390,750) ($390,750) Impact $502,631 $557,706 ($222,250) Year 2 Projected Increase for Organics 3.00% 27-15 ATTACHMENT B May 2009 Residential Rate Comparison 1 32-Gallon Gart City or Jurisdiction Name Monthly Rate Los Altos Hills $33.,'6 Palo Alto $31.00 Los Altos $28:11 Milpitas $26.99 Los Altos County District 5B $26.41 Los Altos County District 5C $26.37 Gilroy $26.22 San Jose $25.80 Sunnyvale $25.31 Monte Sereno $23.98 Morgan Hill $23.55 Saratoga $20.97 Cupertino $19.89 Santa Clara $19.44 Campbell $19.03 Los Gatos $18.95 Mountain View {bi-weekly recycling) $16.40 G~mmercial Front Loader Rate Comparison ' . y 3-Yd Bin l '1 x Week Service Palo Alto $382.00 Los Altos $277.44 Monte Sereno $273.41 Sunnyvale $270.40 Saratoga $265.17 Morgan HiII $262.66 Gilroy $253.19 Mountain Vew $251.85 Los Gatos $215.93 Milpitas $206.33 Los Altos County District 5C $202.64 Los Altos County District 5B $202.64 Cupertino County District 5A $202.64 Campbell $193.72 Cupertino $185.63 Santa Clara $157.16 1 Current rate -Proposed rate beginning November 2010 is $20.39 27-16 EXHIBITS BEGIN HERE ~~~ Linda Lagergren From: Quon Phil [Quon Phil@cusdk8.org] Sent: Monday, November 30, 2009 1:19 hM To: Orrin Mahoney Subject: Support for Los Altos Garbage Company 5 Year Contract Extension Hi, Orrin! Hope you had a great Thanksgiving! Just wanted to express my support for Agenda Item #27 -Approval of a 5-Year Solid Waste Services Franchise Agreement with Los Altos Garbage Company. I support the 5 year contract extension, the recycling efforts with our schools, and the expanded programs that they will bring to our community. Thank you for your consideration! Best, Phil Phil Quon, Superintendent Cupertino Union School District 10301 Vista Drive Cupertino, CA 95014 408-252-3000 X200 quon phil(c~cusdk8.org Linda Lagergren ~ ~~ From: Elaine Glissmeyer (Northwest) [eglissmeyer@ymcasv.org] Sent: Monday, November 30, 2009 1:01 ISM To: Orrin Mahoney; Kris Wang; Mark Santoro; Gilbert Wong; Dolly Sandoval Cc: City Clerk Subject: RE: Los Altos Garbage Co. Contra~:t Attachments: Letter of Support.doc c~./~ i - _3c -c~9 ~7 November 30, 2009 Re: Letter of support To whom it may concern, My name is Elaine Glissmeyer, Executive Director of the Northwest YMCA in Cupertino, California. It is with great pleasure that I write this letter of support in respect to LAG Corporation. The Northwest YMCA has conducted business with LAG for many years. LAG supports many of the non-profit organiza~:ions through volunteer hours and in-kind donations, as well as provides a box twice a ye~ir for YMCA volunteer work days. The Northwest YMCA values the business relationship it has established with LAG Corporation. LAG has provided the Northwest YMCA with all around outstanding, positive and professional experiences. Not only is LAG Company extremely dependable, LAG drivers are especially punctual, helpful and respectful. Respectfully, Elaine Glissmeyer Executive Director Northwest YMCA 20803 Alves Drive Cupertino, CA 95014 cc/i~- ~~-~~( ~ ~ -1 Linda Lagergren From: Hung Wei [hungweichien@hotmail.com] Sent: Saturday, November 28, 2009 8:52 PM To: Orrin Mahoney; Kris Wang; Dolly ~;andoval; Gilbert Wong; Mark Santoro Cc: john zirelli Subject: proposed 5-year contract with LAGCo dba Recology Dear Orrin, Kris, Dolly, Gilbert, and Mark, Hope you all had a warm and happy Thanksgiving holiday with family and friends. Both my sons are out with friends and I have some time browsing through the agenda items on the upcoming 11/30/09 City Council meeting. The proposed 5-year contract with Recology caught my attention. I'd like to take this opportunity to commend i:he efforts of City Manager/staff and Recology for leading our city into a vision of zero waste by the year ?020. The environmental impacts of garbage are huge, and I'm very impressed that Recology is taking tt~e lead in proactively expanding its waste diversion efforts. The 75% rate in waste diversion by the end of :'_014 is a good mid-term goal. With expanded recycling features at a minimal cost of ratepayers plus Education programs for residents, our city will make good progress into being a "green" city. Thanks for taking "garbage" seriously :) Best regards, Hung Hotmail: Trusted email with Microsoft's powerful SPAM protection. Sign u~now. 1 c~~ /ii-3~ -~~ ~ ~~ C. Donald Allen 14101 Loma :lZio Drive Saratoga, CA 95070-5412 (H) 408 867-4404 (:F) 408 867-3285 cdallen7na,pa.cbell.net October 2 i , 2009 Cupertino City Council 10100 Torre Avenue Cupertino, CA 95014 Dear Hon. Council Members Re: 11 /29/09 Agenda Item #27 While I am not a resident of Cupertino, I did sf~end over a decade as the City's banker, as CEO of Cupertino National Bank. So I feel a responsibility to speak out on occasion about items of fiscal significance to the community. The upcoming five year franchise agreement with Los Altos Garbage is one of these issues of fiscal significance. Speaking strictly for the perspective of cost effectiveness, I believe the proposed agreement is fair both to the City and to Los Altos Garbage. The increase in fees is very modest, will result in an increase in revenue to the City, and will provide additional serviced to Cupertino's homeowners and busirn~sses. I am particularly appreciative of your efforts to enhance the ecological impact of the services offered and I believe this will have a positive and continuing effect on the Cupertino and it's citizens. I encourage your vote to approve the agreement. Sincerely, cc /i i- 3G-C; c( ~ -~ Linda Lagergren From: Larry Dean [LDean95014@comcast.net] Sent: Friday, November 27, 2009 11:49 p~M To: City Council; barry4cupertino@gm2il.com Subject: City Contract with Recology (LAGGD) Dear Council Member - We are writing you to recommend that you approve the new contract extension for Recology, formerly Los Altos Garbage Company. We have been a customer of theirs for many years ~jnd have been quite pleased with their capabilities and customer service. We know that Recology has been a superior and very important corporate citizen for the Cupertino Community and a has fostered community relationship that sho,~ld be continued. Thank you for your time and support. Larry and Laurie Dean 22159 Rae Lane Cupertino, CA 95014 Information from ESET NOD32 Antivirus, version of virus signature database 4643 (20091127) The message was checked by ESET NOD32 Antivirus. http://www.eset.com CG/it-3C'-~%~ ~ ~~ Linda Laaeraren From: jimdg5170@aol.com Sent: Friday, November 27, 2009 12:22 F'M To: Orrin Mahoney; Kris Wang; Mark Santoro; Gilbert Wong; Dolly Sandoval Cc: City Clerk Subject: Los Altos Garbage Co. Contract Dear City Council Members, We have noticed that the City Council will soon consider a new contract, or a contract extension, with Los Altos Garbage Co. We are in total support of the City renewing our long time tartnership with Los Altos Garbage Co. They not only serve their customers well, they seem to willingly go out of their way to keep their customers happy and satisfied. As 41 year residents of Cupertino, we have long benefited from LAGCo's fine and dependable service to us as residential customers. For the past 31 years, we have lived on Regnart C~~nyon Drive, a cul-de-sac that serves 10 homes on private driveways. Each week, the resident's bring their toters down to the cul-de-sac where the LAGCo's trucks make their pickups. A few years ago, I mentioned to their office that the drivers sometimes left the empty toters a bit "untidy." There was immediate attention paid to this situation. Now, it appears that our empty toters are "standing at attention," we have to lift the lids to see if they are empty! LAGCo is dependable and never misses a pickup day or completely emptying all the toters in our cul-de-sac, even if they've been brought down late. What more could our resident: ask of their garbage company? How about LAGCo's willingness to provide "above and beyond" service by their many volunteer hours and in-kind donations to our City's non- profitand community service organizations? Indeed, they are often our partners in service to our community. We trust the City will renew our long partnership with Los Altos Garbage Co Satisfied Cupertino Residents, Linda and Jim Walker 11660 Regnart Canyon Drive Cupertino, CA 95014 home: 408-252-1288 cc/i~ -~o_~~ ~ ~~ 7 Linda Lagergren From: Darryl Stow [darryl_s@pacbell.net] Sent: Friday, November 27, 2009 1:13 PfJI To: Orrin Mahoney; Kris Wang; Mark Santoro; Gilbert Wong; Dolly Sandoval Cc: David Knapp; Kimberly Smith; jzirellis@losaltosgarbage.com Subject: Los Altos Garbage Contract Honorable Mayor Mahoney and Cupertino City Counc:i.l Members: We are writing to support the renewal of the ser~iices contract with Los Altos Garbage Company. As 43 year residents of Cupertino, we have always found the service provided by the company to be very dependable and at a reasonable cost. :Cn the very few times we had questions or issues, they were quickly and courteously resolved to our satisfaction. We have been pleased to see them become increasingly a "green provider" through enhanced services for recycling. In addition to being a reliable service provider to the City, Los Altos Garbage Company has also been an excellent corporate citizen by actively supporting various community non-profit organizations. Unfortunately, many of the corpor~~tions doing business in Cupertino are not as community minded as is LAGC. We believe that kind of community support and involvement should be recognized and rewarded with a renewal of the~_r contract for services in Cupertino. Thank you for your consideration. Darryl and Dorothy Stow 20197 Las Ondas Way Cupertino, CA 95014 1 cc,ii, - 3c-C: `I' ~~ Linda Lagergren From: Kimberly Smith Sent: Sunday, November 29, 2009 10:10 PM To: David Knapp; City Council Subject: Fwd: Support for Los Altos Garbagf: Begin forwarded message: From: Richard Lowenthal <richard.lowenthal(a,coulombtech.com> Date: November 25, 2009 5:13:55 PM PST To: David Knapp <Davidk(a~cupertino.org> Cc: Kimberly Smith <KimS(a,cupertino.org> Subject: Support for Los Altos Garbage Dave, could you distribute this to the Council please? To the honorable Mayor and Council of the City of CupE~rtino: I'm writing in support of a 5 year renewal of the City's contract with Los Altos Garbage. My experience with them both as a Councilmember and as a resident f~as always been very positive and beneficial to our City and its residents. During my time as a Councilmember issues would come up from time to time and they were always resolved to the benefit of the City, satisfactorily and quickly. In particular when our residents were requesting weekly recycling and mixed recycling, Los Altos Garbage brought that service to us quickly and at no additional cost to the city or its residents. I strongly recommend a 5 year renewal with Los Altos Garbage. Yours truly, Richard Lowenthal f+ a 7 Linda Lagergren From: Bove, Polly [polly_bove@fuhsd.org:~ Sent: Sunday, November 29, 2009 5:06 F'M To: Orrin Mahoney Subject: Los Altos Garbage Importance: High Hi Orren, I actually never do this sort of thing and I do riot want to interfere but I had some time to spend this Thanksgiving weekend on work and noticed that you will be considering Los Altos Garbage's contract on Monday and I thought I wou]_d let you know that they have been particularly wonderful with us. We were not asking much of them for years and I came in and wanted way more recycling options and changes in where dumpsters etc go and they were great. I know that ]ohn Zirelli is a wonderful communit~~ member, but that is not the critical piece here for me...we are very impressed with the service...just thought you should know...should I email others? Thanks, Polly Bove This electronic mail transmission and any files transmitted with it may contain confidential information only for use by the intended recipients. Unless you are the addressee (or authorized to receive messages for the addressee), you may not use, copy, disclose, or distribute this message (or any information cont~iined in or attached to it) to anyone. If you received this communication in error, please notify the sender by reply e-mail and then delete the communication from your electronic mail system. C` %tl- ~G ~K'~~ ~7 Linda Lagergren From: Maria Streeby [Maria.Streeby@thec;ypresshotel.com) Sent: Sunday, November 29, 2009 12:40 PM To: Orrin Mahoney; Kris Wang; Dolly ~~andoval; Gilbert Wong; Mark Santoro Subject: Los Altos Garbage Company -recycling Dear City Council Members, The Cypress Hotel and Park Place Restaurant suppor~l the expanded recycling programs and contract extension for the Los Altos Garbage Company. We have received our green certification with the assistance of the Los Altos Garbage Company through their excellent recycling programs and service. They provided training to our kitchen staff and provided great outreach for our staff. We look forward to working with them and the City of Cupertino to make the Cypress Hotel and Park Place Restaurant as leader in sustainability. Warm regards, Maria Streeby Maria X, Streeby General Manager Cypress Hotel Director of Hotel Operations -Southwest Kimpton Hotels 10050 So. De Anza Blvd. Cupertino, CA 95014 408-342-4805 maria.streeby@thecypresshotel.com AAA Four Diamond Follow us on Facebooki Check out our ne~~ Hotels and Restaurants! ! Support Kimpton Earthcare efforts -read, don't print!