That the City Council approve and authorize the City Manager to execute Amendment No. 2 to the Franchise Agreement For Integrated Solid Waste Management Services with CR&R, Incorporated for residential, commercial, and industrial solid waste collection.

The Amended and Restated Franchise Agreement for Integrated Solid Waste Management Services by and between CR&R and the City of La Habra (Franchise Agreement) was approved by the City Council on December 6, 2018.  Amendment No. 1 to the Franchise Agreement was subsequently approved by the City Council on October 21, 2019.

Senate Bill 1383 (SB 1383) requires the California Department of Resources Recycling and Recovery (CalRecycle) to develop regulations to reduce organics in landfills as a source of methane.  The regulations developed and adopted by CalRecycle place numerous new requirements on public and private agencies, including cities, commercial businesses, commercial edible food generators, trash haulers, self-haulers, food recovery organizations, and food recovery services, as well as residential and commercial customers.  These regulations are intended to support achievement of SB 1383's statewide organic waste disposal reduction targets.  Furthermore, SB 1383 requires the implementation of a number of new monitoring and reporting measures to enforce these new regulations. 

To enable these new programs prescribed by SB 1383, Amendment No. 2 to the City's Franchise Agreement (Amendment No. 2) with CR&R has been prepared for City Council consideration.  Relevant elements of Amendment No. 2 include the following:

Definitions
Amendment No. 2 will modify, upgrade, and create new definitions to ensure the Franchise Agreement is compliant with SB 1383.  These changes will also be consistent with the recent modifications of La Habra Ordinance 1838 that was approved in December 2021.

Mandatory Organics Recycling
Amendment No. 2 will provide the framework for implementation of SB 1383 mandated organics collection programs for all multi-family and commercial business customers in the City, including the diversion of both greenwaste and foodwaste, collection of food waste from restaurants, and maintaining data lists of organic waste generator accounts.
Procurement Assistance
Amendment No. 2 will require CR&R to coordinate and cooperate with the City of La Habra to help ensure the City is in compliance with all SB 1383 mandated organic waste procurement targets.

Route Audits / Container Inspections
SB 1383 requires cities to conduct “route reviews and inspections of entities...to adequately determine overall compliance with this chapter.”  Amendment No. 2 will identify and specify necessary mandates for route reviews and container inspections.  To satisfy that mandate, cities and waste haulers will be required to periodically inspect trash containers for contamination; CR&R and City staff will conduct route reviews, conduct outreach to customers, identify contamination, and employ mitigation efforts.  Route reviews will continue to be performed to adequately assess how well SB 1383 regulations are being complied with by both residential and commercial business customers.

Expanded CR&R Recycling/Sustainability Coordinator Position
CR&R currently employs a recycling coordinator who dedicates 20 hours of time per week to La Habra.  The general duties of this position are to provide outreach to CR&R customers and act as a liaison to City staff.  Due to the increase of duties associated with SB 1383 reporting and compliance, CR&R is proposing to increase the dedicated hours of this position to La Habra from 20 hours per week to 40 hours per week.  Amendment No. 2 will incorporate this change into the terms and conditions of the Franchise Agreement.

Waste Characterizations
SB 1383 regulations require cities to conduct waste characterization studies to help develop a capacity planning report.  A waste characterization study consists of random samples of trash collected within the community to determine the types of debris disposed of by residential and business customers. These studies would need to be periodically conducted by CR&R. CalRecycle will schedule two characterizations during the next four years, then two additional studies during the next decade. The results of the studies will become part of the capacity planning effort that is required by law.  New program costs would include monitoring services, waste evaluations, and the sampling of materials.

Reporting
Pursuant to SB 1383, cities are required to conduct expanded monthly, quarterly, and annual reports to CalRecycle.  The City has contracted with an outside consultant to prepare and provide these additional services; therefore, these programs will not be added to the franchise agreement.

Edible Food Recovery Program
A large portion of SB 1383 is dedicated to the establishment of an edible food recovery program.  To help ensure compliance with law, CR&R will subcontract with a food recovery organization, to help conduct education, outreach, and recordkeeping.  Amendment No. 2 will add language requiring CR&R to subcontract the management and monitoring of these programs.  CR&R will provide assistance to the City in complying with the SB 1383 regulations.

Collection Equipment/Container Color
Amendment No. 2 will provide language that all recycling bin lids will need to be changed to meet SB 1383 regulation requirements for refuse bin color.

Force Majeure 
Amendment No. 2 will update the Force Majeure clause to include "pandemic, epidemic, quarantine, and acts of any government (including judicial action) related to such events" as reasons that contractor should not be in default.

Recycling Rate Structure Change
Amendment No. 2 will modify the recycling refuse rate, which is currently 50 percent of the normal refuse rate, to 75 percent of the normal refuse rate.  This adjustment more accurately reflects the true costs of the recycling service that is being provided.  Staff expects that the rate will still encourage businesses to reduce trash generation and maintain program compliance.  Setting the recycling rate at 75 percent of the normal refuse rate is common among other Orange County cities.
Organics Rate Structure Change
Amendment No. 2 will change the organics refuse rate, which currently is set to 110% of the normal refuse rate, to 75% of the normal refuse rate.  The intent of this modification is to incentivize businesses and multi-family residential units to recycle their organics and help ensure SB 1383 compliance.  This method of providing a discount for organics waste bins is recommended by CalRecycle and setting the organics rate at 75% of the normal refuse rate is common among other Orange County cities providing this service.

Bulky Item Program Enhancements
Amendment No. 2 will change the existing bulky item program to provide an incentive to help reduce illegal dumping in the City.  Under the current system, if multi-family or commercial customers wish to schedule a bulky item pick up, they must pay $40.71 for the first item picked up, and then $20.33 for each additional item. This cost and inconvenience may cause some multi-family and business customers to dispose of bulky items improperly, leading to items dumped in streets and alleyways, or other public spaces. Staff anticipates that modifying this program will increase the number of bulk item pickup appointments made by multi-family and commercial business customers and will better organize pickup efforts leading to decreased instances of illegal dumping in the City.
 
Under the proposed Amendment No. 2, multi-family dwelling customers would receive the same type of bulky item service as offered to single family residential customers, so that the number of bulky item pickups for multi-family customers would correspond to the number of units in the property.  For example, a 20-unit apartment complex would be eligible for up to 80 bulky item pickups per year and any pickups beyond that would be charged at the applicable extra item rate.  Commercial customers would continue to be charged the same rate as currently exists; however, they would be entitled to two bulky item pickups per year rather than one.

If Amendment No. 2 is approved by the City Council, the modifications to the agreement are estimated to cost the Refuse Fund approximately $131,795 per year.  The Refuse Fund has sufficient funding to cover the costs through the end of the current Fiscal Year 2021-2022. The City Council will be considering an associated refuse rate increase as part of a separate Public Hearing item at this meeting that, if approved, will provide a rate structure to support these new costs on a going forward basis.