CC Resolution No. 20-039 Authorizing Fourth Amendment to the Franchise Agreement with Recology Cupertino for the Collection and Processing of Recyclable Compos i
RESOLUTION NO. 20-039
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AUTHORIZING A FOURTH AMENDMENT TO THE FRANCHISE
AGREEMENT WITH RECOLOGY CUPERTINO FOR THE COLLECTION 1
AND PROCESSING OF RECYLABLE AND COMPOSTABLE MATERIAL, i
AND THE COLLECTION AND DISPOSAL OF GARBAGE,TO NEGOTIATE
A NEW FRANCHISE AGREEMENT AND DEFINE A BRIDGE TERM THAT 1
INCLUDES A SPECIAL MAXIMUM RATE ADJUSTMENT
WHEREAS, the City of Cupertino, with the approval of the City Council,
entered into a Franchise Agreement with Recology Cupertino (Recology) for the
collection and processing of recyclable and compostable materials, and the
collection and disposal of garbage; the agreement has been thrice previously
amended (as amended, the "Franchise Agreement"); and
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WHEREAS, the term of the Franchise Agreement expires at 11:59 P.M. on
January 31, 2021, subject to Article 16 of the Franchise Agreement; and
WHEREAS, pursuant to Section 2.2 of the Franchise Agreement, the City
has the option to negotiate a new ten-year agreement that may begin at 12:00 A.M.
on January 31, 2021, if certain criteria are satisfied; and
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WHEREAS, in accordance with Section 2.2.4 of the Franchise Agreement,
Franchisee timely notified the City in writing of Recology's intent to exercise the
option to renegotiate the Franchise Agreement; and
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WHEREAS, pursuant to Section 2.3 of the Franchise Agreement, the City,
at its sole discretion, may choose to extend, or not extend, the term of the I
Agreement, or negotiate a new agreement; and
WHEREAS, the City Council desires to pursue negotiations of a new
agreement with Recology, on certain terms and conditions, including the City
preserves its ability to terminate such negotiations if the City determines in its sole
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discretion that it is in the City's interest to do so, and Recology agrees to continue
providing services under the same terms and conditions as the existing Franchise
Agreement after any such termination of negotiations to bridge the period of time
until the City can engage a new franchisee; and
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Resolution No
. 20-039
Page 2
WHEREAS, the City Council desires to amend the Franchise Agreement a
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fourth time to modify its terms to define a bridge term of eighteen (18) months
('Bridge Term') to ensure continuation of service in the event that negotiation of
a new Franchise Agreement is unsuccessful;and
WHEREAS, the collection of solid waste, which includes garbage, non-
organic recyclables, organic waste, is determined and declared to be a health,
sanitary and safety measure necessary for the promotion, protection and
preservation of the health, safety and general welfare of the people of the City of
Cupertino; and
WHEREAS, the City Council of the City of Cupertino enacted Municipal
Code Chapters 6.24 and 9.16, in part, to meet the City' s mandated collection of
solid waste and to satisfy applicable California Integrated Waste Management Act
AB 939 and Assembly Bill 1826 requirements; and
WHEREAS, pursuant to Municipal Code Section 6.24.120 and applicable
statutory authority, the provision of solid waste collection services in Cupertino is
provided by a private solid waste collector pursuant to the terms of an exclusive
franchise; and
WHEREAS,the City does not provide solid waste collection services,rather
it regulates the private solid waste collection industry to protect public health,
safety and welfare and ensure compliance with applicable laws; and
WHEREAS, as part of its regulatory role, pursuant to Municipal Code
Section 6.24.150, the City reserved the right to establish a schedule of approved
maximum rates to avoid an abuse of the-franchise rights granted;and
WHEREAS, the solid waste collector is solely responsible for setting and
collecting such rates and charges at a level at or below the schedule of approved
maximum rates; and
WHEREAS, the Franchise Agreement establishes a process for Recology to
request an adjustment to the schedule of approved maximum rates if necessary to
cover increased costs; and
Resolution No. 20-039
Page 3
WHEREAS, in the event of a termination of negotiations and during the
bridge period of time until the City can engage a new franchisee, and pursuant to
the terms of the Franchise Agreement, on March 25, 2020 Recology submitted a
written request and documentation in support of a special maximum rate
adjustment for all categories of Service Recipients during the Bridge Term; and
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WHEREAS, an independent auditor has evaluated the requested special
maximum rate adjustment and made written findings that the requested
adjustment is necessary to cover the cost of providing service during the Bridge j
Term (if the Bridge Term is required); and 1
WHEREAS, the City has determined that the amendment to the Franchise i
Agreement is exempt from environmental review pursuant to the exemption in 14
Cal. Code Regs. § 15601(b)(3) in that it can be seen with certainty that there is no
possibility that this action will have a significant effect on the environment; and
WHEREAS, the City Council, using its independent judgment, before
taking action on this Resolution, determines that the action is exempt from CEQA
as stated above; and
WHEREAS, all documentation to support this proposed adjustment to the
schedule of approved maximum rates during the Bridge Term (if the Bridge Term
is required) was placed on file with the City Clerk for public inspection and
review; and
WHEREAS, at its regular meeting on April 21, 2020, the City Council held
a public hearing to consider the proposed adjustment to the schedule of approved
maximum rates during the Bridge Term (if the Bridge Term is required); and
WHEREAS, at the public hearing, interested persons had the opportunity
to testify regarding the proposed adjustment to the schedule of approved
maximum rates during the Bridge Term (if the Bridge Term is required); and
WHEREAS, the City Council of the City of Cupertino finds and determines
as follows:
1. The above recitals are true and correct and material to the adoption
of this Resolution.
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2. After considering the request and documentation from Recology,the
report and findings of the City-directed audit, the public's written
comments and testimony received at this public hearing, and the
staff report and information presented at the hearing regarding the
adjustment to the schedule of approved maximum rates, the City
Council determines that the evidence supports that the adjustment
is needed to cover the increased costs of providing service during a
Bridge Term (if the Bridge Term is required), and therefore, it is
appropriate to approve the adjustment to the schedule of approved
maximum rates by 5% for all categories of Service Recipients,
effective February 1, 2021, and an additional 5% for all categories of
Service Recipients, effective February 1, 2022, u1 the event that
negotiation of a new agreement is unsuccessful and the Bridge Term
begins.
NOW,THEREFORE,BE IT RESOLVED, that the City Council approves the
fourth amendment to the Franchise Agreement in accordance with the terms of
this Resolution and staffs recommendations included in the Council report to
authorize staff to pursue negotiation of a new franchise agreement with Recology,
and, if the City elects to terminate such negotiations, define a Bridge Term, and
establish a schedule of approved maximum rates during such Bridge Term; and
BE IT FURTHER RESOLVED, that the City Manager or her designee is
authorized to execute the fourth amendment to the Franchise Agreement, and to
take all steps necessary to complete negotiations and execute the contract
documents.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 215t day of April, 2020,by the following vote:
Vote Members of the City Council
AYES: Scharf, Paul, Chao, Sinks, Willey
NOES: None
ABSENT: None
ABSTAIN: None
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SIGNED:
Steven Scharf, Mayor Date
City of Cupertino
ATTEST:
4/27/2020
Kirsten Squarcia, City Clerk Date
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