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TO:
FROM:
SUBJECT:
City Council Agenda
Item No. 5
May 22, 2001
Mayor and City Council
General Services Director
Award of Non - Exclusive Solid Waste Collection Franchise to Ocean Waste and
Recycling
Recommendations
Adopt the attached Resolution of Intention (Resolution No. 2001 -__) to award a Non - exclusive
Solid Waste Franchise to Ocean Waste and Recycling and, to conduct a public hearing on June
12, 2001.
That the attached Ordinance No. 2001 -_ granting a Non - exclusive Solid Waste Franchise to
Ocean Waste and Recycling be introduced and passed on to a second reading on June 12, 2001.
It is recommended that Council adopts the Ordinance granting the franchise at the conclusion of
the June 12, 2001 public hearing.
Background
Solid waste is collected, recycled, and disposed of by either City crews or commercial solid
waste haulers. City crews collect approximately 75% of all residential solid waste while private
haulers collect the remainder of the residential waste stream and all of the commercial solid
waste stream.
The City has an integrated solid waste management program wherein all solid waste collection is
monitored to ensure the health and safety of all residents and business owners. A secondary
consideration of the program is the achievement of the State recycling mandates (AB939), which
included a 25% recycling rate by December 31, 1995, and a 50% recycling rate by December 31,
2000. The 1995 mandate was achieved, however, achievement of the 2000 mandate will not be
known for several months.
If the City fails to achieve the 50% recycling rate, we could be subject to a $10,000 per day State
fine for failure to make a good faith effort at recycling.
One of the ways that staff has developed to manage solid waste operations and ensure meeting
the recycling mandate is through the award of non - exclusive solid waste franchises to solid waste
haulers and demolition contractors to operate in the City. In addition to mandating recycling
requirements for private haulers, the franchise agreement stipulates that the franchisee shall pay a
FBUsenNGSVVKRief -7001 N1ay \Council- Fnnchis Award oceanWasm.doc
fee to the City. The fee pays for fund environmental insurance premiums, staff work, and road
and alley repairs associated with the franchise.
Article XIII of the City Charter (Granting of Franchises) and Chapter 12.63 of the Municipal
Code (Solid Waste Management) establish requirements aitd procedures to grant a franchise to
provide solid waste handling services within the City. There are currently sixteen solid waste
franchisees operating under separate agreements to collect and transport solid waste generated
within the City limits. There is no limit on the number of franchises that Council may approve.
Such a policy permits competitive, service- oriented commercial refuse operations.
Staff recently received a franchise application from an additional solid waste hauling firm, Ocean
Waste and Recycling. The application submitted by Ocean Waste and Recycling meets the
minimum qualifications listed in Section 12.63.050 (Application for a Franchise) of the
Municipal Code.
Discussion
Per the California Integrated Waste Management Board's diversion calculations, the City of
Newport Beach had a forty -seven percent recycling rate in 1999. In order to meet the State's
fifty- percent diversion mandate, the City is making every effort to account for diversion
activities that occur at construction and demolition sites within City limits. The City
accomplishes this by issuing and managing solid waste franchises for demolition companies and
solid waste haulers such as Ocean Waste and Recycling.
Pending completion of the public hearing and Council approval on June 12, 2001, the franchise
will take effect July 12, 2001 and will expire on January 9, 2006 at the end of the City's ten -year
franchise program that began in 1996.
It is anticipated that cooperation from solid waste and demolition haulers and increased staff
enforcement of the solid waste ordinance will make a significant difference in achieving the
State diversion mandate of AB939.
Very respectfully,
David E. Niederhaus
Attachments:
(1) Resolution No. 2001 -_ Resolution of Intent to conduct a public hearing to
consider the granting of a Non - Exclusive Solid Waste Franchise to Ocean
Waste and Recycling.
(2) Ordinance No. 2001 - _Ordinance granting a Non - Exclusive Solid Waste
Franchise to Ocean Waste and Recycling.
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RESOLUTION NO. 2001-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH DECLARING ITS INTENTION
TO CONDUCT A PUBLIC HEARING TO CONSIDER
THE GRANTING OF A NON - EXCLUSIVE SOLID
WASTE FRANCHISE TO OCEAN WASTE AND
RECYCLING.
WHEREAS, the City Council finds and determines that the collection of solid waste
generated within the City is a vital public service and that the storage, accumulation, collection,
and disposal of solid waste and recyclables is a matter of great public concern because improper
control of such matters would subject the City to potential liability, damages and penalties and
may create a public nuisance, air pollution, fire hazard, infestation, and other problems affecting
the public health, safety and welfare; and,
WHEREAS, non - exclusive franchises for the use of public streets to provide
commercial solid waste hauling services will promote the public health, safety, and welfare by
promoting permanence and stability among those businesses wishing to provide such service
and accountability to the City for compliance with current and future state mandates; and,
WHEREAS, pursuant to Article XIII of the City Charter and pursuant to Sections 49500
through 49523 of the Public Resources Code, the City is authorized to enter into non - exclusive
franchise agreements for commercial solid waste collection services with private solid waste
haulers; and,
WHEREAS, Ocean Waste and Recycling, a private firm, has submitted an application
requesting a Non - exclusive Solid Waste Franchise that satisfies the City's application
requirements.
NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach
that:
1. A public hearing shall be conducted on June 12, 2001, at 7:00 p.m., or as soon
thereafter as practical in the City Council Chambers, 3300 Newport Boulevard, Newport Beach,
California, to consider the granting of a franchise to the applicant listed under Item 2 below
pursuant to the following terms and conditions:
a. Franchise effective date: July 12, 2001.
b. Quarterly franchise fee: 10.5% of gross monthly receipts.
c. Term of Franchise: July 12, 2001 to January 9, 2006 with renewal rights upon
mutual agreement of the franchisee and City.
d. The City shall not set the Franchisee's bin rates.
e. Franchisee shall indemnify and hold harmless City from environmental liability
for the franchisee's operations in the City and shall pay to the City
Environmental Liability Fund, on a quarterly basis, 5.5% of gross receipts for
all commercial solid waste handling services provided by the Franchisee in the
City.
f. Franchisee shall indemnify and hold City harmless from penalties and damages
for failure to meet current and future state recycling requirements with respect to
the portion of the commercial solid waste stream collected by Franchisee.
g. Designated disposal facility: City maintains the right to designate disposal
facilities to be used by Franchisee.
h. Franchisee shall be responsible for all billing and collection for its accounts.
i. Franchise shall not be revoked unless there is default under the agreement.
j. Prior to obtaining a Solid Waste Franchise, the applicants shall satisfy the City's
minimum qualifications regarding liability insurance, equipment, knowledge of
solid waste regulations, load check programs, etc.
k. Franchisee shall meet City's requirements to implement recycling and source
reduction public education activities.
1. City has authority to annually audit Franchisee's financial records relating to the
payment of fees required under the franchise.
m. Franchisee shall comply with all State, Federal laws and regulations, terms and
conditions of the franchise agreement, City Charter and Municipal Code.
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2. The City proposes to offer a non - exclusive solid waste collection franchise to the
following applicant listed below that is presently licensed and permitted to conduct business in
the City. Persons who have an interest in or objection to the proposed franchises may appear
before the City Council and be heard on the date and time listed above.
a. Ocean Waste and Recycling, Candice Julian, Owner
3. This Resolution of Intention shall be published in the City's official newspaper
within 15 days of its adoption and at least 10 days prior to June 12, 2001.
Adopted this 22nd day of May, 2001.
ATTEST:
CITY CLERK
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MAYOR
ORDINANCE NO. 2001-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH GRANTING NON - EXCLUSIVE SOLID
WASTE FRANCHISES TO OCEAN WASTE AND
RECYCLING. TO PROVIDE SOLID WASTE COLLECTION
SERVICES UPON THE CITY STREETS AND WITHIN THE
CITY OF NEWPORT BEACH
The City Council of the City of Newport Beach does ordain as follows:
SECTION 1: Findings
A. Article XIII of the City Charter and Sections 49500 through 49523 of the Public
Resources Code authorize the City to enter into non - exclusive franchise agreements for
commercial solid waste handling services with private solid waste enterprises.
B. The City Charter and Chapter 12.63 establish requirements and procedures to
grant a franchise to provide solid waste handling services within the City of Newport Beach.
C. In compliance with the City Charter a duly noticed public hearing was held on
June 12, 2001, to consider the granting of a franchise to Ocean Waste and Recycling.
D. Having considered all oral and documentary evidence presented at the public
hearing, the City Council has determined that the granting of a non - exclusive franchise is in the
public interest.
SECTION 2: Definitions
All words, terms, phrases in this Ordinance shall have the meanings set forth in
Section 12.63.020 of Chapter 12.63 of the Newport Beach Municipal Code.
SECTION 3: Franchise Agreements
A. Grant of Franchises
There is hereby granted to the enterprises listed below (hereinafter, "Franchisee ") a
non - exclusive franchise to operate, maintain and provide solid waste handling services along,
across and over the public streets, alleys, public ways and public places dedicated for public use
in the City:
(a) Ocean Waste and Recycling
B. Non- exclusive Grant
The right to use City streets, alleys, public ways and places for the purposes set forth
in this Ordinance, shall not be exclusive and the City reserves the right to grant a similar use of
streets, alleys, public ways and places to any person at any time during the term of this franchise.
C. Term of Franchises
The term of the franchise per Section 2 of the Franchise Agreement ( "Agreement ")
attached hereto as Exhibit A, Commercial Solid Waste Collection Franchise Agreement between
the City of Newport Beach and Ocean Waste and Recycling, which is hereby adopted, approved
and incorporated into this Ordinance by reference, shall commence at 12:01 a.m., on July 12,
2001 and expire on January 9, 2006. The franchise shall take effect on the date specified above
provided that the grantee has filed written notice of acceptance in accordance) with the
requirement of Section 4 of this Ordinance.
D. Franchise Fees
(1) During the term of the Agreement, Franchisee shall pay to City franchise fees for
the privilege of providing commercial solid waste handling services in the City of Newport
Beach and use of public streets, right of ways and places for such purposes. Fees shall be in the
following amounts:
Franchisee shall pay to the City 10.5% (ten and one -half percent) of the Franchisee's
gross receipts.
Franchise fee payments shall be paid quarterly and shall be computed and paid on
the basis of paid receipts received by the Franchisee for all solid waste handling services
provided by the Franchisee within the City.
One -half of one percent (0.5 %) of the franchise fee shall be attributable to the
maintenance and implementation of the City's Source Reduction and Recycling Element
(SRRE), and shall be separately accounted for, and used only for the costs stated in Public
Revenue Code Section 41901 or any successor provisions.
(2) Franchisee shall pay to the City Environmental Liability Fund, on a quarterly
basis, 5.5% of gross receipts for all commercial solid waste handling services provided by the
Franchisee in the City. Payment shall be made concurrently with the payment of the franchise
fee and the filing of reports specified in Section 4 and Section 6 of the Agreements.
E. Inclusion of Franchise Documents
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Franchisee shall comply with and shall be bound by all of the terms, provisions and
conditions contained in the City Charter, this Ordinance, Chapter 12.63 of the Newport Beach
Municipal Code and the Franchise Agreement.
SECTION 4: Effective Date
This Ordinance shall become effective 30 days from and after the date of its adoption;
provided, however, franchises granted by this Ordinance shall not become effective unless and
until the grantee files written acceptance of the franchise with the City Clerk, and delivers to the
City all bonds and insurance policies required to be furnished in accordance with the
requirements of Chapter 12.63 of the Newport Beach Municipal code and the Franchise
Agreement. The written acceptance shall be in form and substance as prescribed by the City
Attorney and shall operate as an acceptance of each and every term, condition and limitation
contained in this Ordinance, the Franchise Agreement, Article XIII of the City Charter, and
Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance
of the franchise no later than ten (10) days after the adoption of this Ordinance.
SECTION 5: CEQA Exemption
The City Council of the City of Newport Beach finds that this Ordinance is
categorically exempt under the California Code of Regulations Sections 15301 and 15308
defined as "existing operations and facilities" and as "actions by regulatory agencies for
protection of the environment" respectively. Use of the above exemption classifications are
appropriate because this Ordinance does not change nor expand existing solid waste operations
and facilities within the City. The Ordinance is also consistent with the goals of California State
Assembly Bill 939, The California Solid Waste Management Act as well as the objectives of the
City's Source Reduction and Recycling Element (SRRE). The City Manager is authorized to
execute and the City Clerk to file a Notice of Exemption with the Orange County Clerk.
SECTION 6: Severability
If any section, subsection, sentence, clause or phrase of this Ordinance is, for any
reason, held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this Ordinance. The City Council hereby declares
that it would have passed this Ordinance, and each section, subsection, clause or phrase thereof,
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irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases
be declared unconstitutional.
SECTION 7: Adoption of Ordinance
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach, held on the 22nd day of May 2001, and adopted on the 12th day of June 2001,
by the following vote to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSTAINED, COUNCIL MEMBERS
ABSENT, COUNCIL MEMEBERS
MAYOR
ATTEST:
CITY CLERK
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