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CC Resolution No. 20-013 Authorizing a Third Amendment to the Franchise Agreement with Recology Cupertino for the Collection and Processing of Recyclable and Compostable Material, and Collection RESOLUTION NO. 20-013 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AUTHORIZING A THIRD AMENDMENT TO THE FRANCHISE AGREEMENT WITH RECOLOGY CUPERTINO FOR THE COLLECTION AND PROCESSING OF RECYLABLE AND COMPOSTABLE MATERIAL,AND THE COLLECTION AND DISPOSAL OF GARBAGE, TO ADDRESS HOUSEHOLD HAZARDOUS WASTE AND ESTABLISH THE SCHEDULE OF APPROVED MAXIMUM RATES 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 twice previously amended (as amended, the "Franchise Agreement"); and WHEREAS, the City Council desires to amend the Franchise Agreement a third time to modify its terms to reflect the-termination of the-residential on-call, curbside Household Hazardous Waste (HHW) program, terminate collection of the HHW fee, refund fees collected since January 2019, and assess costs against Recology in an annual, not to exceed amount of $93,535 in accordance with staff s recommendations and the findings included in the Council report for this item; 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 j regulates the private solid waste collection industry to protect public health, safety and welfare and ensure compliance with applicable laws; and Resolution No. 20-013 Page 2 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 WHEREAS,pursuant to the terms of the Franchise Agreement, on October 15,2019 Recology submitted a written request and documentation in support of an adjustment to the schedule of approved maximum rates, which request was subsequently amended by Recology on January 28, 2020; and WHEREAS, an independent auditor has evaluated the requested adjustment to the schedule of approved maximum rates and made written findings that the requested adjustment is necessary to cover increased costs of processing recyclable materials; and WHEREAS, the City has determined that the amendment to the Franchise 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, a public hearing notice regarding the proposed adjustment to the schedule of approved maximum rates was published in a newspaper of general circulation; and WHEREAS, all documentation to support this adjustment to the schedule of approved maximum rates was placed on file with the City Clerk for public inspection and review; and Resolution No. 20-013 Page 3 WHEREAS, at its regular meeting on February 4, 2020, the City Council held a public hearing to consider the adjustment to the schedule of approved maximum rates; and WHEREAS,at the public hearing,interested persons had the opportunity to testify regarding the adjustment to the schedule of approved maximum rates; 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. 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 increased costs, and therefore, it is appropriate to increase the schedule of approved maximum rates by_$2.24/month for single-family Service Recipients, and 3.93% for all other categories of Service Recipients. 3. The schedule of approved maximum rates for each service description, as set forth in the third Amendment as Exhibit B, which is incorporated by this reference, represents the schedule of approved maximum rates, effective January 1, 2020. NOW,THEREFORE,BE IT RESOLVED,that the City Council hereby approves the third amendment to the Franchise Agreement in accordance with the terms of this Resolution and staff's recommendations included in the Council report to address HHW and establish the schedule of approved maximum rates; and BE IT FURTHER RESOLVED, that the City Manager or her designee is authorized to execute the third amendment to the Franchise Agreement, and to take all steps necessary to complete negotiations and execute the contract documents. i PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4th day of February, 2020, by the following vote: I Resolution No. 20-013 Page 4 Vote Members of the City Council AYES: Scharf, Paul, Chao, Sinks, Willey NOES: None ABSENT: None ABSTAIN: None SIG ED- Steven Scharf,Mayor Date City of Cupertino ATTEST: Kirsten Squarcia, City Clerk Date THIRD AMENDMENT TO FRANCHISE AGREEMENT BETWEEN THE CITY OF CUPERTINO AND RECOLOGY CUPERTINO FOR COLLECTION AND PROCESSING OF RECYCLABLE AND COMPOSTABLE MATERIALS,AND THE COLLECTION AND DISPOSAL OF GARBAGE This Third Amendment to the Franchise Agreement between the City of Cupertino and Recology Cupertino for Collection and Processing of Recyclable and Compostable Materials, and the Collection and Disposal of Garbage, for reference dated February 4, 2020 is by and between the CITY OF CUPERTINO, a municipal corporation("CITY"), and Recology Cupertino, a California corporation("Franchisee"), and is made with reference to the following: RECITALS: A. City and Franchisee are parties to a Franchise Agreement for Collection and Processing of Recyclable and Compostable Materials,and the Collection and Disposal of Garbage dated May 18,2010, as amended by a First Amendment dated September 2,2014 and a Second Amendment dated December 19,2017(such agreement as so amended,the"Agreement"). B. Pursuant to the Agreement,Franchisee contracted with the Household Hazardous Waste Collector to provide the Household Hazardous Waste Program ("HHW Program") (all capitalized terms not otherwise defined herein are as defined in the Agreement). The HHW Program generally consists of on-call curbside collection of household hazardous waste ("HHW") from single-family and multi-family residences within City. The HHW Program was funded by a Household Hazardous Waste Fee ("HHW Fee") collected by Franchisee from Residential Service Recipients. C. Beginning in late December 2018, Household Hazardous Waste Collector stopped providing HHW Collection services within City, citing permitting issues with its Hayward facility. Franchisee indicates it is unable to identify a replacement Household Hazardous Waste Collector or otherwise provide the HHW Program. i D. Santa Clara County offers drop off disposal of HHW ("County HHW Program") for residents of participating cities. While not as convenient for City residents as a curbside program,the County HHW Program provides an option for residents to safely dispose of HHW. E. City and Franchisee have determined that the best course of action is to delete the HHW Program from the Agreement and refund to customers the HHW Fee amounts collected since January 1,2019, as provided herein. F. Due to the termination of the HHW Program, the City expects increased participation in the County HHW Program to result in the City incurring unanticipated and otherwise 1 i I i unreimbursed expenses and reductions in program funding for the term of the Agreement. G. Consistent with the Agreement at Section 12.6, City and Franchisee agree that for the period beginning January 1,2019 and through the duration of the Agreement,Franchisee shall compensate the City for the city losses associated with termination of the HHW Program, as provided herein. H. In addition, City and Franchisee wish to adjust the schedule of approved maximum rates that may be charged by Franchisee to fund additional costs of recyclables processing resulting from changes in the recyclables marketplace as a consequence of China's National Sword policy. I. City and Franchisee desire to modify the Agreement as set forth in detail below. NOW, THEREFORE,it is mutually agreed by and between the undersigned parties as follows: 1. Effective January 1,2019,Article 4—Collections Services,Section 4.17, is hereby modified to read as follows: "4.17 Household Hazardous Waste Collection—The Household Hazardous Waste Program previously provided under this Agreement is terminated effective January 1,2019." 2. Effective January 1, 2019, Article 12 —Franchisee's Compensation, Section 12.7 is hereby modified to read in its entirety as follows: "12.7 Household Hazardous Waste Fee — Franchisee shall cease collecting the Household Hazardous Waste Fee previously established under this Agreement. To the extent Franchisee billed Residential Service Recipients for such fee on or after January 1, 2019, Franchisee shall issue a one-time credit to such affected customers in the amount so billed and shall note such credit as a line item on the customer's bill.The foregoing actions shall be taken,with respect to each affected Residential Service Recipient, on the next regular billing cycle for that customer that begins at least one (1) week after the effective date of this Third Amendment to this Agreement. Franchisee shall pay City the amounts specified in this paragraph to compensate the City for losses associated with termination of the HHW Program(such losses, "City Losses," and such payment, the "City Payment"). The City Payment for a given calendar year shall equal(i)the number of car loads actually dropped off by Cupertino residents at County HHW events and at the Las Plumas facility during the year (together, the "County HHW Program"), multiplied by the then- 2 applicable cost per car charged by the County to the City for each such drop-off, all as reported by the County to the City, plus (ii) a fixed sum of$48,611 per year, provided,however,that the total City Payment for a given calendar year shall not exceed $93,535. The City Payment shall be payable for calendar years 2019 and 2020, and for the month of January 2021, it being understood that the City may invoice the Franchisee for partial years(e.g.quarterly,or for the month of January 2021), in which caso the numbers in the preceding sentence shall be prorated.The City will invoice Franchisee for the amount of the City Payment promptly after receipt of the County's invoice to the City for the County HHW Program, which City shall provide to Franchisee with City's invoice. Within thirty (30) calendar days after the City bills Franchisee, Franchisee shall remit to the City the full amount invoiced, provided the same is consistent with this paragraph. Payment by the Franchisee of the amounts specified in this paragraph shall constitute full and complete compensation for and satisfaction of any and all claims the City may have against the Franchisee relating to termination of the HHW Program. Example of City Payment Calculation: If for a given 6-month period the County reports the following: #Cupertino residential dropoffs at County HHW events:399 car loads #Cupertino residential dropoffs at Las Plumas facility:300 car loads $/car at County HHW events:$38.65 $/car at Las Plumas facility: $6.25 then the City Payment for that 6-month period would be calculated as follows: City Payment =(399*$38.65)+(300*$6.25)+$24,305.50 prorated fixed sum =$15,421.35+$1,875.00+$24,305.50 =$41,601.85 3. Effective January 1, 2019, the following sections and exhibits are hereby deleted in their entirety: ■ Sections 1.24("Household Hazardous Waste Collector"definition) ■ Section 1.25("Household Hazardous Waste Program" definition) ■ Exhibit I(Household Hazardous Waste Collection) ■ Exhibit K (Proposal, Door-to-Door Household Hazardous Waste Management Program,City of Cupertino,April 21,2009) i 4. Effective January 1, 2019, the references to the "Household Hazardous Waste Fee" in I Sections 1.14 (Eligible Revenue), 11.6 (Payments to City) and 12.8 (Change in City Fees), and the entire sentence referencing the "HHW Collector"in Section 14.5(Subcontractors), are hereby deleted. 5. Effective January 1, 2020, Exhibit B -- Schedule of Approved Maximum Rates, attached hereto, replaces Exhibit B to the Agreement. The maximum rates in Exhibit B, attached 3 i hereto,reflect removal of the Household Hazardous Waste Fee,and inclusion of an amount to cover the higher cost of recyclables processing ($2.24/month for single-family Service Recipients, and 3.93%for all other categories of Service Recipients). 6. Except as expressly modified herein, all other terms and covenants set forth in the Agreement shall remain the same and shall be in full force and effect. References herein to sections and exhibits refer to sections and exhibits of the Agreement. IN WITNESS WHEREOF,the parties hereto have executed this Third Amendment as of the date first written above. Recology Cupertino, CITY OF CUPERTINO, A California Corporation A Municipal Corporation By �. By President&CEO, ch J. Sangiacomo City Manager,Deborah L. e g APPROVED AS TO FORM: Reviewed by: By -93"4� Ark' l/\ City Attorney,Heather Minner ATTEST: By City Clerk,Kirsten Squarcia 2J1 d (z..a 4 EXHIBIT B: SCHEDULE OF APPROVED MAXIMUM RATES (effective January 1,2020) [attached] 5 EXHIBIT B:Amended February 4, 2020 SCHEDULE OF APPROVED MAXIMUM RATES Recology Maximum Rates for the City of Cupertino Effective January 1, 2020 13.1. RESIDENTIAL RATE SCHEDULE City of Cupertino Effective January 1,2020 Single Family Dwelling Curbside 32 gallon $29.60 Curbside 64 gallon $56.97 Curbside 96 gallon $84.34 Curbside Add'I Cart $27.36 Walk-up 32 gallon $44.30 Walk-up 64 gallon $86.36 Walk-up 96 gallon $128.41 Walk-up Add'I Cart $42.06 Additional Organics/YW Toter: No Charge YW Exempt Residents Are Entitled To A 32g Organics cart: No Charge Hillside Roadside 32 gallon $47.52 Roadside 64 gallon $92.76 Roadside 96 gallon $138.05 Roadside Add'I Cart $45.28 Duplex/Multiple Units&Yardwaste Exempt Curbside 32 gallon $25.39 Curbside 64 gallon $48.53 Curbside 96 gallon $71.69 Curbside Add'I Cart $23.15 Rear 32 gallon $38.03 Rear 64 gallon $73.83 Rear 96 gallon $109.62 Senior Low Income Rates Front/Back Yard 32 gallon $15.22 Yard Waste Exempt 32 gallon $13.23 Hillside 32 gallon $23.72 Additional Charges 24 HR Container Service Extra Bag Tag $7.96 Bin By The Day 4 Yard $176.98 10 Bag Tags $75.72 Bin By The Day 6 Yard $216.75 Extra Can (1-Time) $13.71 Bin By The Day 7 Yard $236.64 Late Charge Fee 1.2% Per Month Deliquent (Not compounded) 13.2. MULTI-FAMILY RATE SCHEDULE City of Cupertino Effective January 1, 2020 Front Loader Containers 1.5 CY 1XWK $174.64 1.5 CY 4XWK $698.63 FTL1 1.5 CY 2XWK $349.33 1.5 CY 5XWK $873.30 1.5 CY 3XWK $523.97 1.5 CY 6XWK $1,047.93 Extra P/U = 54.17 2 CY 1XWK $209.63 2 CY 4XWK $838.32 FTL2 2 CY 2XWK $419.14 2 CY 5XWK $1,047.93 2 CY 3XWK $628.79 2 CY 6XWK $1,257.49 Extra P/U = 67.69 3 CY 1XWK $279.45 3 CY 4XWK $1,117.82 FTL3 3 CY 2XWK $558.89 3 CY 5XWK $1,397.25 3 CY 3XWK $838.32 3 CY 6XWK $1,676.69 Extra P/U = 74.03 4 CY 1XWK $349.33 4 CY 4XWK $1,397.25 FTL4 4 CY 2XWK $698.63 4 CY 5XWK $1,746.59 4 CY 3XWK $1,047.93 4 CY 6XWK $2,095.86 Extra P/U = 92.3 6 CY 1XWK $489.03 6 CY 4XWK $1,956.14 FTL6 6 CY 2XWK $978.07 6 CY 5XWK $2,445.18 6 CY 3XWK $1,467.10 6 CY 6XWK $2,934.23 Extra P/U = 128.45 8 CY 1XWK $628.81 8 CY 4XWK $2,515.03 FTL8 8 CY 2XWK $1,257.49 8 CY 5XWK $3,143.79 8CY 3XWK $1,886.31 8CY 6XWK $3,772.57 Extra P/U = 166.13 Pushout Service Code 1XWK $61.50 4XWK $246.29 FTLPO 2XWK $123.31 5XWK $307.42 3XWK $184.63 6XWK $369.76 * Pushout service only applies if containers are moved more than 25ft. Key Service Code Special Services $114.16 $68.48 FTLK Steam Clean and Re-Delivery of Bin (Shall be provided once per year w/o charge) Furnishing Chains (One Time Only) Compactor Per Cubic Yard Mixed Recy Compactor $49.33 Hauling Only $452.85 Per Ton $70.09 B.3. COMMERCIAL RATE SCHEDULE City of Cupertino Effective January 1,2020 Front Loader Containers Codes 1.5 CY 1XWK $174.64 1.5 CY 4XWK $698.63 FTL1 1.5 CY 2XWK $349.33 1.5 CY 5XWK $873.30 1.5 CY 3XWK $523.97 1.5 CY 6XWK $1,047.93 Extra P/U= 54.17 2 CY 1XWK $209.63 2 CY 4XWK $838.32 FTL2 2 CY 2XWK $419.14 2 CY 5XWK $1,047.93 2 CY 3XWK $628.79 2 CY 6XWK $1,257.49 Extra P/U = 67.69 3 CY 1XWK $279.45 3 CY 4XWK $1,117.82 FTL3 3 CY 2XWK $558.89 3 CY 5XWK $1,397.25 3 CY 3XWK $838.32 3 CY 6XWK $1,676.69 Extra P/U= 74.03 4 CY 1XWK $349.33 4 CY 4XWK $1,397.25 FTL4 4 CY 2XWK $698.63 4 CY 5XWK $1,746.59 4 CY 3XWK $1,047.93 4 CY 6XWK $2,095.86 Extra P/U= 92.3 6 CY 1XWK $489.03 6 CY 4XWK $1,956.14 FTL6 6 CY 2XWK $978.07 6 CY 5XWK $2,445.18 6 CY 3XWK $1,467.10 6 CY 6XWK $2,934.23 Extra P/U= 128.45 8 CY 1XWK $628.81 8 CY 4XWK $2,515.03 FTL8 8 CY 2XWK $1,257.49 8 CY 5XWK $3,143.79 8CY 3XWK $1,886.31 8CY 6XWK $3,772.57 Extra P/U= 166.13 Pushout Service Code 1XWK $61.50 4XWK $246.29 FTLPO 2XWK $123.31 5XWK $307.42 3XWK $184.63 6XWK $369.76 * Pushout service only applies if containers are moved more than 25ft. Commercial Garbage Cart Key ServicE Code 32g Increments $27.76 $68.48 FTLK Special Services $117.85 Compactor Per Cubic Yard Steam Clean and Re-Delivery of Bin $49.33 (Shall be provided once per year w/o charge) Mixed Recy Compactor Furnishing Chains(One Time Only) Hauling Only $452.85 Per Ton $70.09 Return Trip Fee$15.00 B.4.DEBRIS BOX RATE SCHEDULE City of Cupertino Effective January 1,2020 Description 16DO 201DO 26DO 30DO 40DO Allowed Tons 3 4 4 5 6 Base Rates $558.16 $623.16 $854.12 $1,009.91 $1,077.33 Add'I Tons $103.82 $103.82 $103.82 $103.82 $103.82 Processor Newby Newby Newby Newby Newby Source Separated Recycling OSDOR 08DOR 08DO 16MR-4ODOR 16©OR-40DOR Clean Concrete Mix rock, dirt& Price Code 8 Clean Dirt Asphalt concrete Clean Wood Sheet Rock Allowed Tons 6 Haul Rate $500.05 $500.05 $869.57 $500.05 $500.05 Recycling Process Rate per ton $48.45 $48.45 $48.45 $48.45 $48.45 Note: Source Separated Recycling Loads will be charged the regular box rate if contaminated or mixed Other Miscellaneous Rates Description Code Amount Daily Rental Rate For Boxes Beyond 7 Days RENT $26.54 Weekly Rental Rate For Boxes Beyond 7 Days RENT $168.69 Trip Charge For Empty Debris Box/Compactor No Dump) TRIP $100.01 Dry Run, Scheduled Service Bin Empty TRIP i200.O2 Relocate Container After Initial Delivery RELOC $100.01 Same DaV Cancelation No Dump) CANCL $66.68 Steam Clean after exchange bring back to yard TRIP $200.02 Garbage, Organics,and Recycling Compactor Rates Description Amount Processor Dirt Garbage/Organics Compactor Rates Per Yard Per Pull $47.06 Newby N/A Mixed Recycling Compactor Rates Per Pull $452.86 BFI $568.89 Mixed Recycling Compactor Rates Per Ton $70.11 BFI $100.13