That the City Council APPROVE AND ADOPT RESOLUTION NO. CC 2025-__ ENTITLED:  A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA, ORANGE COUNTY, CALIFORNIA SPECIFYING THE PROCUREMENT REQUIREMENTS FOR MULCH TO BE ELIGIBLE FOR PROCUREMENT CREDIT AND TO QUALIFY AS A RECOVERED WASTE PRODUCT UNDER SB 1383, AB 2902, AND AB 2346.

In 2016, Senate Bill 1383 was signed into law. Called the "Short-lived Climate Pollutant Reduction Act", the law required the California Department of Resources Recycling and Recovery (CalRecycle) to develop regulations to reduce organics in landfills as a source of methane. As adopted by CalRecycle, a major requirement in SB 1383 relates to the procurement of recovered organic waste products. This can include compost, renewable natural gas, electricity from biomass conversion, or mulch.

To comply with this law, each jurisdiction in California is assigned a procurement target in tons of organic waste that the jurisdiction is responsible for. In the case of the City of La Habra, the target is 4,896.2 organic waste tons for the 2025 reporting year. Credit towards the City reaching this procurement target can only be secured through eligible purchases. For example, if the City acquires compost to then give away to residents or by applying mulch in a City Park, the City qualifies for a procurement credit for the amount of compost or mulch utilized. On the other hand, if residents or businesses independently acquire their own compost or mulch to use in their own planters on private property, the City does not get any credit towards its procurement goal. If jurisdictions do not meet their procurement targets, they can be subject to enforcement action from the State of California.

The table below is an example of what La Habra’s procurement totals and costs could look like in future years at it considers various ways to achieve its procurement targets. Some of these potential programs may be selected over others depending on future costs and benefits:

More recently, Assembly Bill 2902 was passed in 2024, which added flexibility for adjusting procurement targets for cities. Assembly Bill 2346 was also passed in 2024, which authorizes local jurisdictions to count towards their procurement targets compost produced and procured from specified compost operations. Specifically related to mulch, the City of La Habra can only receive procurement credit for mulch produced by its own contractors if it meets two requirements: 

The City currently uses mulch on City owned planters and medians around the City; however, the City’s municipal code does not have the specific language required by CalRecycle. In order to ensure that the City receives procurement credit for these mulch purchases, it will be necessary for the City to either update its code or establish a “similarly enforceable mechanism” approved by Council. If approved by Council, the proposed resolution will allow the City to obtain procurement credits effective immediately.

The City Attorney’s Office has reviewed the proposed resolution to ensure that it will meet the State’s requirements. Staff will be working with the City Attorney's office to draft an ordinance for City Council consideration and action at a future council meeting to codify this language into the City's municipal code.

Approval of the proposed resolution will have a nominal immediate fiscal impact on the City's Refuse Fund; however, it will allow staff to access more options to secure procurement credits towards the City's target than are currently available. Depending on what types of credits are secured in the future, there could be some savings to the Refuse Fund or some increased annual costs ranging in the thousands of dollars. Determining what these future potential costs may be will depend on what procurement options are available and secured by the City. Staff will evaluate these options and include cost estimates for them in future fiscal year proposed budgets for Council review and approval.