REPORT TO COUNCIL
SUBJECT
Title
Action Authorizing the City Manager to Negotiate and Execute Agreements for Processing and Landfill Disposal Services; and Yard Trimmings Composting Services
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure; Promote Sustainability and Environmental Protection
BACKGROUND
The City entered into an agreement for municipal solid waste disposal in 1989 with International Disposal Corporation of California (a wholly-owned subsidiary of Browning-Ferris Industries, Inc.). The agreement was amended in 1998, which created a tipping fee for source-separated green waste (i.e. yard trimmings, which are now composted) and extended the term to December 31, 2024. Republic Services purchased Browning-Ferris Inc. (BFI) in 1999 and currently operates the Newby Island Recyclery complex (Newby Island) which now includes a composting operation and material recovery facility (MRF) in addition to the landfill. Through this agreement, Republic Services provides disposal, processing, and composting services for the City at Newby Island which include:
• Composting of Yard trimmings collected by Mission Trail Waste Systems (MTWS)
• Disposal of solid waste residue that remains after GreenWaste processes and composts organics
• Disposal of material collected by the City through the annual Cleanup Campaign (CUC)
• Disposal/recycling of dirt, concrete, asphalt and debris collected through typical City operations including the CUC.
Since the agreement is expiring at the end of the year, the City must enter into new municipal solid waste landfill disposal and processing services (disposal services), and yard trimmings composting services (composting services) agreements to ensure continuity of services. The services provided under the disposal and composting agreements are for the composting of yard trimmings from the City’s collection of residential and commercial waste; and the processing and disposal of City materials and solid waste residue (not for the collection of garbage, yard waste or recycling from residents and businesses). The City elected to conduct two separate RFP processes because there was potential that some vendors may only be interested in submitting a proposal for disposal services, some for composting services, and others may submit on both solicitations. It is also important to note that through an existing mixed waste processing agreement with GreenWaste, the City already has a cost from GreenWaste for mixed waste processing residue disposal costs. However, the City felt it was still prudent to get costs from everyone for this component of the Disposal Services RFP to see if there was an opportunity to obtain cheaper pricing. The City was upfront about this with proposers during the RFP process.
DISCUSSION
Pursuant to City Code Section 2.105.140(c), the City conducted two formal Requests for Proposals (RFP) to obtain disposal services and composting services. The RFPs were published in February 2024 using the City’s e-procurement platform. Pursuant to the aforementioned City Code, the award recommendations for both RFPs were based on “best value” using the following criteria and weights:
• Proposal Responsiveness (pass/fail)
• Company Information, Experience & Qualifications, Financial Capability, and Violation History (30%)
• Technical Capability and Facility Documentation (30%)
• Cost (40%)
A three-member evaluation committee comprised of staff from the Department of Public Works (DPW) and Silicon Valley Power (SVP) individually evaluated the proposals based on the criteria above. At the end of the evaluation process, the committee scored and ranked GreenWaste as the highest-ranked overall proposal for both service proposals. The following is a summary of GreenWaste’s key attributes:
GreenWaste has 39 years of experience, operates 13 facilities across northern California and serves over 50 communities, including San Jose, Palo Alto, Sunnyvale, Mountain View, Milpitas, and the County of Santa Clara. GreenWaste operates the Zanker Road Resource Recovery Facility which has an overall facility landfill diversion rate of 80 percent and is recognized as having one of the most technologically advanced construction and demolition (C&D) debris recovery operations in the country. The facility is the closest geographically to the City and operates six scales (four inbound and two outbound), which reduces travel time for collection vehicles between loads and minimizes wait times and the number of trucks needed. GreenWaste has received 14 Environmental, Social, and Governance (ESG) Awards since 2000. The company does not have any current or threatened legal action and has no claims against a performance bond or incidents of contractual default in the last 15 years. Additional information regarding the proposals submitted for each RFP is included below.
Disposal Services RFP
Proposals for disposal services were received from Zanker Road Resource Management, LLC (GreenWaste), Republic Services, Inc. (Republic) and Guadalupe Rubbish Disposal Co., Inc. (Guadalupe). Disposal services included mixed waste processing residue disposal, CUC waste disposal, and dirt, inert material, and C&D debris.
Mixed Waste Processing Residue Disposal
The per ton price for residue disposal is shown below for each proposer including the price included in the current GreenWaste Agreement. Although the City’s current mixed waste processing agreement contains a provision for GreenWaste to assume the responsibility of disposing of residue, the City specifically requested pricing for this service in the Disposal Services RFP. GreenWaste, Republic, and Guadalupe provided per-ton disposal pricing for the residue. The table below shows an annual cost estimate for residue disposal.
|
|
Per ton price for residue disposal |
Tons of residue for disposal annually |
Calculated annual cost |
|
GreenWaste (through current agreement) |
$39.53 |
24,530 |
$969,671 |
|
Guadalupe |
$55.50 |
24,530 |
$1,361,415 |
|
Republic |
$65.38 |
24,530 |
$1,603,771 |
|
GreenWaste (offered through disposal services RFP) |
$90.00 |
24,530 |
$2,207,700 |
The pricing under the City’s current agreement with GreenWaste to dispose of residue after mixed waste processing is the most cost-effective option for the City. Based on the results, the City will move forward with utilizing the current agreement with GreenWaste for mixed waste processing residue disposal.
CUC Waste
The City’s current rate at Republic to dispose of CUC waste is approximately $57 per ton. GreenWaste proposed to provide CUC waste disposal for $75 per ton with no processing. GreenWaste also proposed an option to process CUC waste to recover recyclable material for $85 per ton, which offers better value and reduces the amount of material disposed in a landfill. The CUC waste can be processed at the Zanker Resource Recovery Facility through a C&D processing system that utilizes a combination of robotics and hand sorters which has a 75 percent diversion rate for that particular line. Residue will be disposed of at the Marina Peninsula Landfill in Monterey County.
Less than 10 percent of material collected through the CUC is currently recycled and is collected separately by special appliance and tire crews. By processing co-mingled loads of incoming CUC waste, the number of special appliance and tire collection crews can be reduced, although some crews will still be needed to collect refrigerators and freezers separately because they contain freon that needs to be extracted prior to processing. The Zanker Resource Recovery Facility is the closest facility to Santa Clara and has sufficient scale house operations, therefore travel time will be minimized, and additional high-side dump trucks will not need to be added. The estimated annual disposal cost will increase from $342,000 to $510,000, however, it is estimated that a significant portion of this increase will be offset because collection costs should be reduced by over $100,000 each year with a corresponding reduction in the number of special appliance and tire crews.
Dirt, Inert Material and Construction and Demolition (C&D) Debris
City departments transport debris generated through municipal operations to disposal facilities throughout the year. As incoming vehicles are entering the facility, scale house operators determine the classification of material with source separated inert material (i.e. asphalt concrete, cement concrete, etc.) that does not require processing to recycle. Under the current disposal agreement, the City pays between $35 - $57 per ton to dispose of dirt, inert, and C&D debris. Under the new agreement the City will pay between $17 - $85 per ton to dispose of these materials with GreenWaste, which in total is projected to cost approximately $400,000 per year.
Yard Trimmings Composting Services RFP
Proposals for composting services were received from Zanker Road Resource Management, LLC (GreenWaste) and Republic Services, Inc. (Republic).
The City currently pays Republic approximately $49 per ton to compost yard trimmings at Newby Island Landfill. Staff anticipated about a 50 percent increase in the yard trimmings composting per ton cost because of extremely favorable pricing in the current disposal agreement. Under the new agreement, beginning January 1, 2025, the City will pay GreenWaste $68 per ton for composting services, which is an increase of $19 per ton (+39 percent). Notwithstanding, the increase is less than Staff had previously estimated and was factored into the rates that Council approved on June 4, 2024.
Disposal Services and Composting Services Agreement Terms
Staff recommends entering into disposal and composting services agreements with GreenWaste for an initial term from January 1, 2025 through June 30, 2036. The agreements may also be extended for one additional five-year term at the City’s sole discretion by written amendments to the agreements. Both agreements provide for annual rate adjustments based on the Water and Sewer and Trash Collection Services Index published by the Bureau of Labor Statistics. The terms of both the disposal and composting services agreements align with the expiration dates contained in City’s current exclusive franchise collection agreement with MTWS and mixed processing services agreement with GreenWaste. The aligned expiration dates will provide flexibility in the future.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
Beginning January 1, 2025, it is estimated that for the last half of FY 2024/25, the disposal services will cost an estimated $710,000 ($510,000 for CUC waste + $200,000 for municipal operations waste) and composting services will cost an estimated $323,000. Cost increases for disposal and composting services were anticipated by Staff and have been incorporated into garbage and yard trimmings charges and into the FY 2024/25 Solid Waste Fund operating budget.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the City Manager to negotiate and execute an agreement, including minor amendments, with Zanker Road Resource Management, LLC (GreenWaste) for processing and landfill disposal services for an initial term of January 1, 2025 through June 30, 2036, in a final form approved by the City Attorney;
2. Approve and authorize the City Manager to negotiate and execute an agreement, including minor amendments, with Zanker Road Resource Management, LLC (GreenWaste) for yard trimmings composting services for an initial term of January 1, 2025 through June 30, 2036, in a final form approved by the City attorney; and
3. Authorize the City Manager to negotiate and execute amendments to extend the term of each Agreement by five years ending on June 30, 2041 on the same economic terms, assuming one or both of the agreements are extended, in final forms approved by the City Attorney.
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Draft Disposal Agreement
2. Draft Composting Agreement