MEETING DATE:
OCTOBER 12, 2021
SUBJECT:
Title
ORDINANCE 2021-1506, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS, CALIFORNIA, MODIFYING CHAPTER 8.68 (GARBAGE AND REFUSE COLLECTION) OF THE SAN MARCOS MUNICIPAL CODE TO INCORPORATE ORGANIC WASTE DISPOSAL REDUCTION REQUIREMENTS IN COMPLIANCE WITH SB 1383, AND RESOLUTION 2021-8932, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS, CALIFORNIA APPROVING THE AMENDED AND RESTATED EXCLUSIVE FRANCHISE AGREEMENT FOR SOLID WASTE AND RECYCLABLE AND DISCARDED MATERIALS MANAGEMENT WITH EDCO WASTE AND RECYCLING SERVICES, INC.
Body
Recommendation
Recommendation
INTRODUCE Ordinance 2021-1506, to modify San Marcos Municipal Code Chapter 8.68 to incorporate organic waste disposal reduction requirements in compliance with SB 1383, and ADOPT Resolution 2021-8932, a resolution approving the award of an amended and restated exclusive franchise agreement for solid waste and recyclable services and discarded materials management between the City of San Marcos and EDCO Waste & Recycling Services, Inc. (“EDCO”).
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Good Governance
Relevant Department Goal
Not Applicable
Executive Summary
The proposed ordinance recommends modifications to San Marcos Municipal Code Chapter 8.68 to bring the City into compliance with Senate Bill 1383. California law requires initial implementation and compliance with SB 1383 by January 1, 2022. The ordinance includes provisions that regulate residential and commercial generators, commercial food generators, haulers, edible food recovery organizations, and city programs.
The proposed resolution approves the award of an amended and restated exclusive franchise agreement for solid waste and recyclable services and discarded materials management between the City of San Marcos and EDCO Waste & Recycling Services, Inc. effective January 1, 2022 and expiring December 31, 2027, subject to automatic one year extensions commencing January 1, 2023, so that the term of the Agreement shall remain between five years and six years as provided by California Public Resources Code § 49520. The EDCO franchise amendments incorporate and allocate responsibility for SB 1393 requirements.
Discussion
Senate Bill (SB) 1383 (Short-Lived Climate Pollutants: Methane Emissions Reductions) set statewide goals to reduce emissions of short-lived climate pollutants (SLCP). These goals include reducing organic waste disposal (thereby increasing the recovery of this waste) and rescuing edible food for human consumption. Local jurisdictions are responsible for implementing SB 1383 regulations in their communities and must coordinate with waste haulers. CalRecycle, the agency responsible for California’s waste and recycling programs, has developed regulatory guidelines for compliance with the new law, primarily addressing organic waste disposal and edible food recovery programs.
Food scraps and paper products in landfills contribute to greenhouses gases because they decompose anaerobically, producing harmful methane gas. Successful implementation of SB 1383 should result in a reduction of organic waste disposal by 75% by January 2025, which estimates are based on 2014 levels. The new regulations would also preserve 20% of edible food that is currently discarded for consumption by 2025, according to state estimates, which could help address the fact that 20% of Californians are currently experiencing food insecurity. Meeting SB 1383’s targets should decrease California’s greenhouse emissions while also reducing the number of residents experiencing food insecurity.
Requirements & Implementation
All jurisdictions in California must comply with SB 1383, with the most immediate regulations requiring compliance by January 1, 2022. A basic list of the City’s new obligations under CalRecycle guidelines includes:
1. Adopt new ordinances bringing City waste policies into compliance with SB 1383.
The proposed ordinance, included as Attachment A in the agenda packet, brings the City into compliance with SB 1383 and CalRecycle agency regulations. The ordinance, which modifies San Marcos Municipal Code Chapter 8.68, was drafted using CalRecycle’s Model SB 1383 ordinance and tailored to the City’s needs. The ordinance includes the following sections:
• Requirements for Single Family Generators (proposed SMMC Sec. 8.68.520)
• Requirements for Commercial Businesses (proposed SMMC Sec. 8.68.530)
• Waivers for Generators (proposed SMMC Sec. 8.68.540)
• Requirements for Commercial Edible Food Generators (proposed SMMC Sec. 8.68.550)
• Requirements for Food Recovery Organizations (proposed SMMC Sec. 8.68.560)
• Requirements for Haulers and Facility Operators (proposed SMMC Sec. 8.68.570)
• Self-Hauler Requirements (proposed SMMC Sec. 8.68.580)
• Procurement Requirements (proposed SMMC Sec. 8.68.590)
• Inspections and Investigations (proposed SMMC Sec. 8.68.600)
2. Implement an organic waste recycling service to residential and commercial generators.
The City has delegated the organic waste recycling service to EDCO for both residential and commercial services. On April 10, 1990, the City and Mashburn Sanitation Company, entered into an exclusive franchise agreement for the collection of garbage, rubbish, other refuse materials and recyclables. On July 14, 1998 the City Council approved Resolution No. 98-5064 approving the sale of Mashburn Waste & Recycling Services and the transfer of the City’s Solid Waste Franchise Agreement to EDCO Disposal Corporation, a business entity which has since changed its name to EDCO Waste and Recycling Services, Inc.
Beginning in late 2020 and through 2021, staff thoroughly researched SB 1383 regulatory requirements, attended CalRecycle workshops, and reviewed the current franchise amendment, in order to understand the City’s capacity and most efficient avenue for programmatic compliance. To best achieve compliance with SB 1383 regulations, it was determined that EDCO’s franchise agreement should be amended to reflect the new statewide requirements. EDCO is amply prepared to come into compliance with new regulations by January 1, 2022, and has agreed to the following per the amended and restated franchise agreement (Attachment C):
- EDCO agrees to implement organic waste recycling services to residential and commercial generators as City’s designee;
- EDCO agrees to conduct inspections, route reviews, and provide education and outreach materials in partial fulfillment of City’s inspection and enforcement obligations;
- City and EDCO agree that it is the City’s responsibility to implement an Edible Food Recovery Program separate from the waste, recycling, and organic material collections services offered by EDCO;
- EDCO agrees to provide requisite data, assist with recordkeeping and database maintenance, and reporting obligations;
- EDCO agrees to credit City for usage/purchasing of recovered organic products (RNG and mulch); and
- EDCO and City agree to revise recycling revenue structure from a profit-sharing model to assessment of the franchise fee on collection fees for recycling service.
EDCO has also agreed to the following additional obligations and conditions of its contract with the City:
- Updated insurance provisions that reflect current needs and costs, including the addition of cyber liability insurance coverage;
- Requirements for Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) defense indemnification and recordkeeping;
- The designation of an EDCO staff person to be the sustainability representative to the City to implement recycling programs in the service area for an average of two days a week;
- Assist City with an annual development and implementation of a Diversion and Sustainability Workplan; and
- Implement an SB 1383 Education and Outreach Program in collaboration with City.
3. Conduct inspections and enforce compliance.
EDCO will conduct annual generator route reviews and is required to provide non-compliant generators with education and outreach materials upon the first violative occurrence. EDCO may impose a processing fee for second violative occurrences and must impose a processing fee for a third violation. Additionally, EDCO must report non-compliant residential and commercial generators to the City. Edible Food Recovery requirements will be enforced by City, and City staff is in the process of determining the best and most cost-effective method to meet this element of SB 1383 compliance. Enforcement action is not required by the City until January 1, 2024.
Enforcement responsibilities incorporated to bring the City into compliance with SB 1383 create a new obligations and corresponding programmatic and potential staffing costs to be budgeted for by the City.
4. Establish an Edible Food Recovery Program.
SB 1383 requires that the City create an Edible Food Recovery Program which does the following: Provide education to Tier 1 and Tier 2 edible food generators as defined by the regulations; assess their community’s current food recovery capacity and plan for additional capacity if its insufficient; inspect commercial edible food generators to verify they have a written contract with a food recovery organization; and post contact information for food recovery organizations on the City’s website.
The City has recently entered into a contract with Solana Center for Environmental Innovation for the performance of these duties. Solana Center will be responsible for classification of tier 1 and 2 edible food generators, baseline compliance resources for business, and inspection plans and protocols for business inspections. The contract with Solana Center has a not to exceed amount of $11,200. Contract deliverables for this contract are expected by January 1, 2022.
5. Provide education and outreach to generators, haulers, and edible food recovery organizations.
Many of the education and outreach requirements contained in SB 1383 have been delegated to EDCO by way of the proposed amended and restated franchise agreement. The City maintains the ability to approve education and outreach materials and to participate in its own education and outreach activities.
6. Meet procurement targets for products such as compost, mulch, and renewable natural gas.
Procurement targets will be pursued through collaboration with EDCO. EDCO’s anaerobic digestion facility is capable of processing separated organic waste into Renewable Natural Gas (RNG). Per the proposed amended and restated franchise agreement the City will receive credit for the RNG, which will be used by EDCO in fueling its service trucks. EDCO’s anaerobic digestion facility is operational, and infrastructure for piping and use of RNG are also in place and operational. If the use of RNG is insufficient to meet the City’s required procurement target, per the proposed amendment to EDCO’s franchise agreement, EDCO will provide City with mulch or compost in an amount sufficient to satisfy the procurement requirements.
7. Maintain accurate and timely records for initial compliance and annual reporting submissions.
CalRecycle regulations impose recordkeeping requirements for agencies, haulers, self-haulers, and commercial food generators. San Marcos must submit an initial Jurisdiction Compliance Report by April 1, 2022, and an Annual Report each year. San Marcos must also maintain an Implementation Record stored in a central location and open for inspection by CalRecycle. EDCO has indicated it can provide the information necessary, that it will prepare such Reports and Records, and that it will maintain the same.
The City must establish a system for the tracking and housing of required reporting data. EDCO has existing database systems that may contribute to this effort, but City staff will also be working to maintain necessary reporting data.
State Enforcement
SB 1383 provides the State with certain inspection and enforcement rights within the City. CalRecycle will evaluate City compliance and may conduct inspections.
Penalties for non-compliance can be severe. Upon findings of non-compliance, CalRecycle may issue a Notice of Violation, Corrective Action Plan, and fines from $7,500 to $10,000 per day, per violation. If City fails to adequately implement and enforce SB 1383, CalRecycle may enforce the regulations directly.
Fiscal Impact
Compliance with SB 1383 mandates require additional regulatory activity by the City, and additional efforts by both the City and its franchisee with respect to enforcement, education, and implementation. Compliance with the new state mandates will result in cost increases to waste disposal and diversion programs at the City. Current estimates vary, though an analysis performed by staff estimates them to include one-time costs ranging from $129,726 - $177,067, and ongoing annual costs ranging from $158,611 - $298,585. Amendments made to the franchise agreement with EDCO will generate an estimated $200,000 - $350,000 in additional Franchise Fees paid to the City, which will be deposited in the City’s General Fund (100). Staff will track the revenues received against estimates of what the revenues would have been without the changes made via the franchise agreement amendment, along with programmatic costs. In this way, as the actual program costs and revenue increases begin to actualize, staff will be able to adjust the both the expense and revenue projections accordingly.
These changes will be effective July 1, 2022 and $300,000 will be budgeted in the General Fund budget (100) to provide funding to meet the above described programmatic requirements in the FY22-23 budget cycle.
Attachment(s)
Attachment A - Ordinance No. 2021 - xxxx
Attachment B- Resolution Approving the Amended and Restated Exclusive Franchise Agreement for Solid Waste and Recyclable and Discarded Materials Management with EDCO Waste and Recycling Services, Inc.
Attachment C - Amended and Restated Exclusive Franchise Agreement for Solid Waste and Recyclable and Discarded Materials Management with EDCO Waste and Recycling Services, Inc.
Attachment D - Current EDCO Franchise Agreement
Prepared by: Sean Harris, Management Analyst
Submitted by: Sean Harris, Management Analyst
Reviewed by: Helen Holmes Peak, City Attorney
Approved by: Jack Griffin, City Manager