REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on a Successor Agreement with Recology South Bay, dba Recology Santa Clara for Residential Curbside Recycling Services and Related Budget Amendment
Report
BACKGROUND
In 2008, the City entered in to an agreement with Recology South Bay (Recology) to provide single-stream residential recycling services following a competitive procurement. Recology collects over 9,000 tons of recyclables per year from approximately 45,000 customers living in townhouses, single-family, and multi-family homes. An amendment to the original agreement was subsequently approved by Council on January 29, 2019, which extended the term through 2021 and increased the monthly compensation per unit served to account for the decline in the international recyclables commodities markets.
At a November 13, 2018 study session, Council directed staff to proceed with negotiation of a successor agreement with Recology guided by the negotiation framework outlined below:
1. Increase landfill diversion to a minimum of 75 percent waste diversion.
2. Ensure compliance with existing State law, including the implementation of City-wide organics collection by January 1, 2022.
3. Minimize hauler profit.
4. Ensure annual price escalations are based on documentable costs and business industry best practices.
5. Align contract term to future expected conditions, such as the amortization of equipment (e.g., hauling trucks), landfill disposal contract terms, and/or material recovery facility contract terms.
6. Develop a flexible revenue structure from recyclable materials to account for ever-changing market conditions.
7. Maximize franchise revenue benefitting the General Fund.
8. Include other key terms as proposed by the City's expert in these agreements.
Staff hired R3 Consulting, Inc. to facilitate negotiations on the City's behalf and to assist in preparing the scope of services for the successor agreement. On September 17, 2019 staff presented t...
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