HomeMy WebLinkAbout11 - Amendment to the 2009 Waste Disposal Agreement with the County of Orange (Contract No. 4194)Q �EwPpRT
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FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
April 29, 2025
Agenda Item No. 11
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
David A. Webb, Public Works Director - 949-644-3311,
dawebb@newportbeachca.gov
PREPARED BY: Charles Springer, Senior Management Analyst - 949-718-3466,
cspringer@newportbeachca.gov
TITLE: Approve the Second Amendment to the 2009 Waste Disposal
Agreement with the County of Orange (Contract No. 4194)
ABSTRACT:
Solid waste disposal at County of Orange owned landfills is governed by a
Waste Disposal Agreement (WDA) under which cities and sanitary districts agree to
exclusively deposit certain waste at the County's landfills in exchange for low and stable
disposal rates. The current WDA was entered into in 2009 and was subsequently
amended to extend the term through June 30, 2025. The Orange County City Managers
Association (OCCMA) is currently negotiating a successor agreement to the WDA with
OC Waste & Recycling (OCW&R). Additional time is needed to finalize mutually
agreeable terms and disposal fees. The proposed amendment extends the current WDA
by one year to allow for continued negotiations and includes a 2.6% disposal fee increase,
per the escalation formula in the current agreement.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve the Second Amendment to the 2009 Waste Disposal Agreement with the
County of Orange (Contract No. 4194), to extend the term of the Agreement for
12 months and allow for a 2.6% disposal fee increase and authorize the Mayor and
City Clerk to execute the amendment.
DISCUSSION:
The current WDA between the County of Orange and all Orange County cities and
sanitary districts expires on June 30, 2025. In January 2022, OCW&R notified cities of its
intent to revise the WDA to align with current legislative requirements such as
Senate Bill 1383, which compels local governments to divert organic waste, such as food
scraps and landscaping waste, away from the landfills. OCW&R presented a proposed
successor agreement to the WDA, titled the Waste Infrastructure System Enhancement
(WISE) agreement to Orange County city managers on November 7, 2024.
Second Amendment to the 2009 Waste Disposal Agreement
with the County of Orange (Contract No. 4194)
April 29, 2025
Page 2
The draft WISE agreement proposed increasing the landfill disposal rate from $42.65 to
$82 per ton (a 92.3% increase). It also proposed a rebate program for composted organic
waste and an allocation of capital expenditures for organics recycling infrastructure at
County landfills.
The OCCMA formed a committee in December 2024 to negotiate a successor agreement
to the WDA and requested an extension of the current WDA to allow time for such
negotiations.
OCW&R agreed to a 12-month extension of the WDA agreement and included a 2.6%
disposal fee increase, which is consistent with the escalation formula in the current
agreement. The extension period will allow stakeholders to conduct due diligence on a
successor agreement to the WDA as well as evaluate costs, infrastructure plans, and
future fee adjustments. If the OCCMA committee and OCW&R do not reach mutually
agreeable terms by September 30, 2025, monthly updates will be provided to all
cities/sanitary districts beginning in October 2025.
Staff recommends City Council approval of the Second Amendment to the 2009 WDA
Agreement as it will ensure stable disposal rates and collaboration between all County,
cities and sanitary districts for an additional year.
FISCAL IMPACT:
The adopted budget includes sufficient funding for the 2.6% disposal fee increase. The
disposal fee is a pass -through cost integrated into our residential refuse contract rate.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Second Amendment to Waste Disposal Agreement
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ATTACHMENT A
SECOND AMENDMENT TO WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
County Amendment Authorization Date
, 2025
County Notice Address:
Director, OC Waste & Recycling
-601 N. Ross Street
5th Floor
Santa Ana, CA 92701
and the
CITY OF NEWPORT BEACH
April 29, 2025
City Amendment Authorization Date
April 29, 2025
City Notice Address:
Grace K. Leung, City Manager
City of Newport Beach
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92658
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SECOND AMENDMENT TO WASTE DISPOSAL AGREEMENT
THIS SECOND AMENDMENT TO THE WASTE DISPOSAL AGREEMENT ("Second Amendment") is made
and dated as of the date indicated on the cover page hereof between the County of Orange, a political
subdivision of the State of California (the "County"), and the City (general law, charter or other), Special
District or Sanitary District designated on the cover page of this Agreement and party to this Agreement (the
"City")
RECITALS
The County owns, manages, and operates a Waste Infrastructure System to manage municipal and
solid waste generated within Orange County, California or imported from outside Orange County, California
pursuant to contractual agreements (hereafter used referred to as "Disposal System" or "Waste Infrastructure
System"). The Waste Infrastructure System collectively includes active Class III sanitary landfills ("County
Landfills"), resource recovery, recycling and organics programs, infrastructure and operations, and regional
household hazardous waste collection centers and other waste management related systems as may be
deemed necessary by the County.
The County is also responsible for the long-term management of 20 closed landfills as required under
Applicable Law.
County Landfills are used for the management of municipal solid waste pursuant to legislation
including, but not limited to, the California Integrated Waste Management Act of 1989 (Division 30 of the
California Public Resources Code) (the "Act") and the Short-lived Climate Pollutants Reduction Act ("SB
1383"). County Landfills are also subject to other state and federal regulations designed to ensure that landfill
operations minimize the impacts to public health and safety and the environment.
The City, in the exercise of its police power, its powers under the Act, and other Applicable Law, has
entered into a franchise or other agreement with or issued permits or licenses to one or more private haulers
for the collection, recycling, diversion, and disposal of municipal solid waste generated within the City.
The City and the County have historically provided for the management of municipal solid waste
through Waste Disposal Agreements ("WDAs"), wherein the County agreed to provide disposal capacity for
waste generated in the City, and the City agreed to deliver or cause the delivery of waste generated in the
City to the Disposal System, as more specifically set forth in, and subject to the terms and conditions of the
WDAs. In 2009, the Parties entered into a new WDA (referred to as the "Original WDA"). In 2016, the Original
WDA was amended by the Parties ("First Amendment"), whereby the Parties updated certain terms and
extended the term through June 30, 2025. (The Original WDA and its corresponding First Amendment are
referred to in this Second Amendment as the "Current WDA".)
In response to passage of several pieces of legislation that require significant reductions in the
disposal of organic waste, and in light of the approaching expiration of the Current WDA, the County held two
City Manager Summits in November 2024 proposing terms of a new WDA.
The Orange County City Manager Association ("OCCMA") has established a Committee ("OCCMA
Committee") including representatives of cities and sanitary districts to review the terms of the proposed new
WDA. The OCCMA Committee requested a 12-month extension of the Current WDA to allow for additional
time to negotiate mutually agreeable terms for a new WDA, and obtain approval from the respective
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governing bodies. The County is agreeable to OCCMA's requested extension to the Current WDA on terms as
provided in this Second Amendment.
The City has determined that the execution of this Second Amendment by the City is in the best
interest of the City and will serve the public health, safety, and welfare by continuing the waste disposal
services historically provided under the Current WDA while the Parties: (1) engage in due diligence related to
a new WDA, in order for the City to evaluate the cost/benefit of a new WDA, which is expected to include the
City and OCCMA obtaining more comprehensive and detailed information on the County's plans for
infrastructure expansion and improvements, the financial and operational conditions of the existing Waste
Infrastructure System, and the components, timing, and procedures for future contract fee increases; and,
(2) negotiate the terms and conditions of a new WDA.
The County has determined that the execution by the County of this Second Amendment will serve
the public health, safety, and welfare by continuing to provide a stable, predictable, and reliable supply of
municipal solid waste and the resulting service payment revenue to the Disposal System, while the Parties
exchange information and conduct negotiations with the County goal of ensuring that any negotiated
Contract Rate in the new WDA covers the full cost of operations and infrastructure O&M and development
needed to ensure indemnification and regulatory compliance..
Official action approving this Second Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the City on the City authorization date indicated on
the cover page hereof.
Official action approving this Second Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date
indicated on the cover page hereof.
It is, therefore, agreed as follows:
1. Extended Term.
(a) Section 6.1(A) of the Current WDA is deleted in its entirety and replaced with the following:
"Extended Term. This Agreement shall continue in full force and effect until 11:59 p.m. on June 30,
2026 (the "Extended Term"), unless earlier terminated in accordance with its terms, in which event
the Extended Term shall be deemed to have expired as of the date of such termination."
(b) Section 6.1(B) is deleted in its entirety.
(c) Section 6.1(C) of the Current WDA is deleted in its entirety and replaced with the following:
"Contract Rate Negotiations During Extended Term. If the Orange County City Manager Association's
committee tasked with negotiating the terms of a successor to this Agreement with the County and
recommending approval of the same to the Parties (the "Committee") and the County have not
reached mutually agreeable terms of a successor to this Agreement including, but not limited to,
proposed revisions to the Contract Rate, by September 30, 2025, the County shall, and it is expected
that the Committee will provide, updates to all Participating Cities, and their respective governing
bodies as may be deemed necessary, regarding the status of negotiations on a monthly basis until
mutually agreeable terms are reached or the Extended Term expires."
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In recommending any revisions to the Contract Rate, in addition to the circumstances described in
Section 4.2(A), the Committee and County may take into consideration factors including, but not
limited to, the following:
(i) actual cost of operations;
(ii) population growth;
(iii) increase or decrease in available tonnage;
(iv) economic and disposal market conditions in the Southern California region;
(v) changes in transportation and technology;
(vi) changes in transportation costs;
(vii) closure and expansion of nearby landfills;
(viii) capacity of the Disposal System;
(ix) long-term infrastructure needs; and
(x) available reserves which are in excess of the amount reasonably required as reserves.
(d) Appendix 2 of the Current WDA is deleted in its entirety and replaced with the following:
APPENDIX 2
Cumulative County Acceptable Waste Tonnage Target to be Used for Purposes of Section 4.2(B)
Fiscal Year
County Acceptable Waste Tonnage
Cumulative County Acceptable Waste Tonnage
FY 2025-26
3,166,659
3,166,659
2. Contract Rate.
(a) The first paragraph of Section 4.2(A) of the Current WDA is deleted in its entirety and replaced with
the following:
"(A) Establishment of Contract Rate. During the Extended Term, the Contract Rate payable by each
Franchise Hauler shall be $43.76 per ton, contingent on the delivery to the Disposal System of an
amount of Acceptable Waste at least equal to the Cumulative Tonnage Targets identified in Appendix
2, and subject to adjustment necessary to reflect the circumstances set forth in this Section 4.2,
subjections (i) through (z)."
Note: Subsections (i) through (z) found in the Current WDA remain unchanged.
3. Effectiveness of Second Amendment.
The provisions of this Second Amendment shall not become effective unless and --until this Second
Amendment has been executed by the County and all of the Participating Cities, and shall become effective
once that occurs.
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4. Representations and Warranties of the Parties.
Each of the parties to this Second Amendment represent and warrant that it is a political subdivision
of the State of California validly existing under the Constitution and laws of the State and that it has duly
authorized the execution and delivery of this Second Amendment to each other party.
5. Remaining Terms.
All other terms and conditions of the Current WDA not specifically changed by this Second
Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, COUNTY and CITY have caused this Second Amendment to be executed by their duly
authorized officers or representatives as of the day and year first above written.
County of Orange
By
Director, OC Waste & Recycling
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: Hf f/ Iwo_ 5
By: Co
Aaro C. Harp
City Attorney`
Approved as to Form
By
County Counsel
Date
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Joe Stapleton
Mayor
ATTEST:
Date
By
Leilani I. Brown
City Clerk
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