TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Tony Olmos, Public Works Director
Anna Luke-Jones, Senior Management Analyst
SUBJECT:Title
Review Waste Management Food Waste Recycling Program Proposal and Approve Commercial and Residential Program - Option 1 (Public Works Director Olmos).
DISCUSS AND PROVIDE DIRECTION
Line
_________________________________________________________
Recommended Action
RECOMMENDATION:
Staff recommends that City Council:
1. Review the Waste Management food waste program proposal
2. Approve the commercial and residential food waste program (option 1)
3. Direct City Manager to draft an amendment to the franchise agreement with Waste Management for Council consideration at a future Council meeting
Body
EXECUTIVE SUMMARY:
In compliance with Waste Management's (WM) solid waste agreement with the City and subsequent Assembly Bill AB1826, the City requested a proposal from WM to provide a citywide food waste program. WM provided a proposal that outlines several waste diversion programs and price options for both commercial and residential customers.
For commercial, Waste Management offers an expansion of the current commercial pilot program at a 3.6% increase to all commercial and roll-off customers. The most common commercial service level is one 3-yard trash bin serviced 3 times per week. Based on current rates, the contractor rate increase for this service level would be approximately $8 per month.
For residential, Waste Management offers several options from an expansion of the current residential pilot program, to adding a fourth curbside container, to communal containers. The proposed price increase varies from 1% to 16.9%, depending on the option and whether the property owner provides their own bag/liner. Based on current rates and the option chosen, the contractor rate increase for a resident with one 64-gallon trash cart is estimated at a range of less than $0.25 per month to less than $3.00 per month.
Anticipated schedule and next steps include pursuit of one or more of the options listed in the proposal, City Council review of a contract amendment and resolution, any necessary updates to any Municipal Codes, and research for legal procedural compliance.
FISCAL IMPLICATIONS:
There is no immediate fiscal implication regarding the discussion of the draft proposal. However, there is a variety of potential fiscal impacts associated with the listed program options. Future fiscal impacts will be dependent on City Council direction.
BACKGROUND:
In 2009, the City's Environmental Task Force provided City Council with recommendations for service and program changes in the City's next solid waste contract. Developing a residential curbside food waste recycling and commercial food waste recycling program were among the recommendations to reduce the number of tons sent to the landfill from the City.
Proposers provided information on the food waste program they would be able to implement during the new contract. On June 1, 2011, WM was awarded the franchise agreement and entered into a new solid waste agreement with the City. The agreement required WM to create and manage at no additional charge a commercial and residential food waste diversion pilot program for six months. Although the contract specified a six-month pilot program, WM extended the pilot from six months to two and a half years at no additional charge because they were waiting for the completion of their new food waste processing facility, the CORe.
At the November 5, 2013 City Council meeting, WM presented an update to City Council on the food waste diversion pilot program. To date, there are 25 businesses and 777 residential homes participating in the food waste diversion pilot program.
AB 341 and AB1826
At the time the franchise agreement was awarded to WM, there were no regulatory requirements for the City to develop or implement a food waste diversion program. In 2012, AB341 was placed into effect, which set a state-wide goal of reaching 75% diversion by 2020. One of the ways California plans to achieve this goal is by diverting commercial food waste from the landfill. In September 2014, AB1826 was signed into law, requiring every jurisdiction in California to offer yard and food waste collection services to businesses and offer yard collection services to Multi-Family Dwellings (with five or more units) by January 1, 2016. A yard/green waste program and rate structure for businesses and Multi-Family Dwellings is already established in the City. Participation requirements for organics recycling begin in 2016 and ramp up over 4 years as summarized in the table in Attachment 2.
The general compliance requirements for AB1826 are as follows:
- Offer yard, wood, and food waste collection services to businesses by January 1, 2016, which may involve:
o Evaluating current contractor's proposed costs and related compensation impacts
o Developing customer rates for organics collection
o Negotiating contract amendment(s).
o Ensuring availability of organics processing capability.
- Prepare any necessary municipal code revisions or resolutions.
- Plan and manage ongoing public education and outreach activities to businesses and multi-family complexes (beginning January 1, 2016).
- Conduct ongoing monitoring of businesses and multi-family complexes for compliance (beginning January 1, 2016).
- Collect and maintain data for annual reports to Cal Recycle (reporting on AB1826 begins August 1, 2017).
Although the residential food waste program assists the State of California and the City with its overall diversion goals, the residential program is not part of the requirements under AB1826. Please note that the proposed program accelerates the statutory deadlines and expands the programs required by AB1826. See Attachment 2, which contains the participation requirements and deadlines for compliance.
New Diversion Programs
WM's agreement also states that WM shall present a proposal to provide additional or expanded diversion services upon the City's request. The agreement states that the City is obligated to attempt negotiations on terms and conditions of new services for 90 days from the date when the City first requests a proposal from the Company to perform such services. If WM and the City cannot agree on terms and conditions of such additional or expanded diversion services within 90 days from the date when the City first requests a proposal, WM acknowledges and agrees that the City may permit others to provide such services.
Should the City and WM not agree on terms and conditions within the guidelines of the agreement, the City can pursue other companies to perform food waste recycling services. However, it is important to note that no other company may service a WM bin or cart per the franchise agreement. The potential company would have to provide all participants with their companies bin or cart for collection of food.
DISCUSSION:
WM provided the City with a proposal to provide citywide food waste diversion programs (Attachment 1). WM estimates that it will take approximately three months to fully launch the citywide program for both commercial and residential sectors. Once again, the proposed program accelerates the statutory deadlines and expands the programs required by AB1826. See Attachment 2, which contains the participation requirements and deadlines for compliance. The following is a summary of the deal points in the proposal along with staff's assessment of pro's and con's for the options:
Commercial Program
The commercial program proposed is a citywide expansion of the pilot program to all commercial businesses in the City. The commercial program is customized, based on the space allowance and service needs of the business.
Operations:
- All participants receive ongoing, on-site training from WM for management, kitchen staff, service employees, janitors, etc.
- 3 collection options for businesses based on space and need:
o Yellow Bag: Businesses who do not have the space for an additional cart will have the option to receive heavy duty yellow bags (supplied by WM) to put food waste in. Those bags will then be placed in the businesses existing recycling cart or bin, and reverse sorted at the transfer station.
o Food Waste Cart: Businesses who have the space for an additional cart will have the option to receive a food waste cart for collection (green cart with yellow lid).
o 2-yard Food Waste Bin: Select businesses who have the space and need for a 3-yard bin have the option to receive a 2-yard food waste bin for collection (green bin with yellow lid).
The food is transported to the CORe facility in Orange, CA for processing into a BioSlurry. The BioSlurry is transported to a Wastewater Treatment Plant in Carson, CA. BioSlurry helps create BioGas, a "green energy" used for alternative electric power generation.
Commercial Program Pricing
Commercial rates are tiered rates, based on the size, quantity and collection frequency of commercial trash and commercial green waste containers. The amount that a commercial business is charged for refuse service is comprised of the contractor rate (WM) plus the City's City Recovery Rate (CRC).
Any rate adjustment for the food waste program would be to the contractor portion only. The rate increases proposed by WM for the food waste program would be in addition to the annual (July 1) rate adjustment established in the franchise agreement. Also, the annual calculation of the CRC would affect the final increase seen by the commercial or residential customer.
All commercial and roll-off users would incur the rate increase to their monthly refuse rate. It is not a subscription-based program. WM is requesting a 3.6% contractor rate increase to all commercial and roll-off franchise customers for food waste recycling services. The most common commercial service level is one 3-yard trash bin serviced 3 times per week. Based on current rates, the contractor rate increase for this service level would be approximately $8 per month.
Residential Program
The residential program proposed includes multiple options for City Council to consider.
Option 1: Expand the pilot program (Staff Recommendation)
- Residents will receive a small kitchen countertop food waste pail.
- Residents will insert a bag/liner in the food waste pail and begin filling with food scraps and soiled paper.
- Once the bag is full, the resident will tie off the bag and place it in the green waste cart.
- The green waste cart is serviced as usual and the bags of food waste will be reverse sorted at WM's transfer station.
- SAND SECTION RESIDENTS: For Sand Section residents who do not currently have a green waste cart, they may choose to obtain a green waste cart (if property space permits) or WM may provide a small 18-gallon container for the food waste bags that will be serviced at the curb on the property owners' regular collection day.
Pros: WM found this option to be easiest for participants to implement, least disruptive to current collection practices, utilizes current curbside cart system (green waste), instead of placing food in the gray cart it would be placed in the green cart.
Cons: Residents who do not have a green waste cart will need to obtain one, or Sand Section residents with spatial constraints will need to obtain the curbside food waste container.
Reason for recommendation: Staff recommends the expansion of the pilot program where residents provide their own bag/liners. The pilot has been running successfully, it utilizes a current curbside cart, the feedback from participants to Waste Management has been favorable, and it is a modest price increase at less than $0.50 per household, per month.
Option 2: Separate Food Waste Carts
- All residents will receive a small kitchen countertop food waste pail.
- All residents will receive a separate 18-gallon container for curbside food waste collection.
- Residents will insert their own bag/liner in the kitchen food waste pail and begin filling with food scraps and soiled paper.
- Once the bag is full, the resident will tie off the bag and place it in the 18-gallon curbside food waste container.
- The curbside food waste container is serviced on the property owners regular collection day, and the food waste is transported to the CORe facility for processing.
Pros: Keeps the food waste source separated, exclusive food waste container prevents contamination, WM will not need to reverse sort any green waste loads at the transfer station.
Cons: Expensive, adds a fourth curbside container to every residential property, expanding the current "3-cart system" of trash, recycling and green waste to a "4-container system" of trash, recycling, green waste and food waste.
Reason for not recommending: Staff does not recommend this option because it adds another curbside container for every household in the City and is not as affordable as the program utilizing an existing cart.
Option 3: Communal Containers
- All residents will receive a small kitchen countertop food waste pail.
- Residents will insert their own bag/liner in the kitchen food waste pail and begin filling with food scraps and soiled paper.
- WM will stage ten commercial food waste containers across the City and residents would deliver their food waste to the containers.
Pro: Least expensive option.
Cons: Most difficult to regulate and keep sanitary, eliminates individual accountability for container care, determining locations will be tricky, risk of contamination by trash or recycling being deposited into container instead of just food waste.
Reason for not recommending: Staff does not recommend this option because there are sanitary and contamination concerns with the utilization of the communal bins.
In all residential program options, the food is transported to the CORe facility in Orange, CA for processing into a BioSlurry. The BioSlurry is transported to a Wastewater Treatment Plant in Carson, CA. BioSlurry helps create BioGas, a "green energy" used for alternative electric power generation.
Residential Program Pricing
WM's residential rates are tiered rates, based on the residents' size and quantity of trash carts. There is no additional charge for the blue recycling or green waste carts. The amount that a resident is charged for refuse service is comprised of the standard contractor rate plus the CRC. In April 2012, the City's 64 gallon residential cart rate was the 10th lowest refuse rate among Los Angeles County's 88 cities, according to a survey performed by HF&H Consultants, LLC.
Any rate adjustment for the food waste program would be to the contractor portion only. The rate increases proposed by WM for the food waste program would be in addition to the annual (July 1) rate adjustment established in the franchise agreement. Also, the annual calculation of the CRC would affect the final increase seen by the commercial or residential customer.
For the residential food waste program, there are several program options and therefore several different rates.
- Option 1: Expand pilot citywide, residents provide their own liners
o WM is asking for a 3% increase for all residents. Based on current rates, the contractor rate increase for a resident with (1) 64-gallon trash cart is estimated at less than $0.50 per month.
- Option 1a: Expand pilot citywide, WM provide biodegradable liners
o WM is asking for a 16.9% increase for all residents. Based on current rates, the contractor rate increase for a resident with (1) 64-gallon trash cart is estimated at less than $3.00 per month.
- Option 1b: Expand pilot citywide, WM provide non-biodegradable liners
o WM is asking for a 6.2% increase for all residents. Based on current rates, the contractor rate increase for a resident with (1) 64-gallon trash cart is estimated at less than $1.00 per month.
- Option 2: Separate Curbside Food Waste Containers, residents provide their own liners
o WM is asking for a 6.8% increase for all residents. Based on current rates, the contractor rate increase for a resident with (1) 64-gallon trash cart is estimated at less than $1.00 dollar per month.
- Option 3: Communal Containers, residents provide their own liners
o WM is asking for a 1% increase for all residents. Based on current rates, the contractor rate increase for a resident with one 64-gallon trash cart is estimated at less than $0.25 per month.
PUBLIC OUTREACH/INTEREST:
WM has provided continual training and outreach with each of the commercial businesses participating in the pilot program. The residential pilot participants received program information and contact information to obtain additional help. WM's website for the City, <http://manhattanbeach.wm.com> includes updated information about the food waste program.
For the citywide program, WM will provide, at a minimum, informational fliers, FAQ sheets, a "What Can and Can't Go in Food Waste" sheet, new cart stickers for both the gray trash cart and the green waste cart, kick-off education events for residents and businesses, press releases and email blasts to those who've requested information by email.
Next Steps
Staff invites feedback and direction from City Council regarding the next steps of this process. If Council directs Staff to pursue one or more of the options listed in the proposal, staff will draft a proposed contract amendment, accompanying resolution, review the Municipal Code to see if the program requires any amendments, and the City Attorney will review procedural requirements.
In terms of implementation timeframes, upon City Council approval of this item, staff will prepare an amendment to WM's contract and will begin working with WM to develop an outreach plan. Staff would return to City Council with a contract amendment and outreach plan within the next two months. WM will begin implementation of its outreach plan within two weeks after City Council approval of the contract amendment with the ultimate goal of starting to set up accounts in July 2015.
CONCLUSION:
WM has provided the City with a proposal for consideration of a citywide food waste diversion program for both commercial and residential sectors. AB1826 requires the City to establish and offer an organics program for businesses by January 1, 2016. Several options have been provided for Council to discuss and provide direction.
ATTACHMENTS:
1. Proposal to Manhattan Beach for Food Waste Diversion Program
2. Table Showing AB1826 Participation Requirements for Businesses