Approve revised long-term agreement with the County of Sacramento for organic material diversion services (Yolo County Agreement No. 25-17). (No general fund impact) (Fieseler/Juhler)

This item came before the Board on January 28, 2025, and was approved as Yolo County Contract No. 25-17 (Minute Order No. 25-05 Item No. 6). However, due to a small discrepancy in legal language contained in Section 24 of the contract, pertaining to "Prior Agreements," additional modifications were requested by Sacramento County to clarify that execution of this long-term agreement, which does not start until 2027, does not terminate the existing agreement. As such, the Division of Integrated Waste Management (Division) worked with both Sacramento County and Yolo County legal counsel to modify the language to be more explicit, resulting in new language for Section 24 of the agreement, as excerpted below.  The attached agreement was approved by the Sacramento County Board of Supervisors on September 23, 2025 and was signed by Sacramento County on October 3, 2025. The Division is now requesting approval from the Yolo County Board of Supervisors for this revised version of Yolo County Agreement No. 25-17 with the County of Sacramento. The revised language is as follows (see Att. A., Sec. 24.)

"Except for Contract No. 81586 between SACRAMENTO and YOLO, this Agreement constitutes the entire contract between SACRAMENTO and YOLO regarding the subject matter of this Agreement. Any prior agreements, whether Sacramento County Contract No. 81739 Yolo County Contract No. 25-17 Page 12 oral or written, between SACRAMENTO and YOLO regarding the subject matter of this Agreement are hereby terminated effective July 1, 2027. For clarity, Contract No. 81586 shall remain in full force and effect in accordance with its terms through June 30, 2027, at which time it shall be deemed terminated by mutual agreement of the parties."

Background: In 2019, the Board authorized the Division, in partnership with Northern Recycling LLC (Northern) to respond to a Request for Proposals (RFP) issued by the County of Sacramento for organic material diversion services. As part of this original process, the County was selected by the County of Sacramento to provide these services. The agreement for near-term services with the County of Sacramento (Agreement 21-37) was approved by the Board on February 9, 2021. Yolo County and Northern Recycling successfully met the terms and conditions of this agreement and the revenue generated helped fund the construction of the Covered Aerated Static Pile (CASP) composting facility at the Landfill and helped fund the day-to-day operating cost of the Landfill and its various programs.

As the original RFP was only for near-term services, the County of Sacramento followed this solicitation with a Request for Revised Proposals (RFRP) in 2022 seeking a long-term agreement for organic material diversion services. The Division and Northern prepared a proposal for these services and were selected again by the County of Sacramento. The attached agreement represents the culmination of the proposal and contract negotiation process with the County of Sacramento. Though this agreement represents "out-of-county" material, the recently approved out-of-county tip fee surcharge would not apply as organic waste is currently excluded, since diversion of organic waste to facilities such as the CASP system is an obligation set by Senate Bill 1383, which includes a stated intention to minimize greenhouse gas emissions. It will be explored in future years should the transportation impact of these organic loads need to become subject to the tip fee surcharge.  

The County of Sacramento (Att. A.) has a term of July 1, 2027, through June 30, 2042. The agreement includes a provision for early termination by either party. The general terms and conditions of the agreement are substantially identical to the existing near-term agreement with extended terms, slight changes to services and material commitments and updated fees charged to the County of Sacramento.

Approval of this agreement will allow the Division to continue to provide uninterrupted organic material diversion services to the County of Sacramento and provide net revenue to the Sanitation Enterprise Fund estimated at $352,400 annually. Based on the minimum tonnage commitments and Consumer Price Index rate increase calculations year over year, this will continue to allow the Sanitation Enterprise Fund to grow.

Lastly, on November 9, 2021, the Board certified the Environmental Impact Report (EIR) for the Yolo County Central Landfill Permit Revision Project. The EIR analyzed a number of projects, including a daily tonnage increase at the Landfill from non-disposal sources such as organic waste. One of the measures identified to mitigate the increased vehicle traffic was a payment of approximately $322,000 to the Road Fund to help pay for increased maintenance needs. The revenue from this County of Sacramento agreement will be utilized for this purpose upon approval of the agreement.

The Request for Proposal process, initiated by Sacramento County and responded to by Yolo County, was a competitive process. The rates included in the agreement are slightly lower than current gate rates for organics at the Landfill but do include an increase in the share going to the Division relative to the existing agreement.