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HomeMy WebLinkAbout03 - Non-Exclusive Solid Waste Collection FranchiseCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 3 August 24, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department David E. Niederhaus, Director, 949 - 644 -3055 SUBJECT: Award of Non - Exclusive Solid Waste Collection Franchise to Direct Disposal, Inc. ISSUE: Should the City Adopt the attached Resolution of Intention (Resolution No. 2004 -_) to award a Non - exclusive Solid Waste Franchise to Direct Disposal, Inc. and to conduct a public hearing on July 13, 2004? RECOMMENDATION: Adopt the attached Resolution of Intention (Resolution No. 2004 -_) to award a Non- exclusive Solid Waste Franchise to Direct Disposal, Inc. and to conduct a public hearing on September 14, 2004. That the attached Ordinance No. 2004 -_ granting a Non - exclusive Solid Waste Franchise to Direct Disposal, Inc. be introduced for a First Reading. It is recommended that Council adopt the Ordinance granting the franchise at the conclusion of the September 14, 2004 public hearing. DISCUSSION: 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 wastestream and all commercial solid waste. 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 is the achievement of the State recycling mandates (AB939), which include a 25% recycling rate by December 31, 1995, and a 50% Franchise Award August 24, 2004 Page 2 recycling rate by December 31, 2000. The 1995 mandate was achieved. The City was found to have met the 2001 recycling mandate by the California Integrated Waste Management Board and the 2002 rates are still under review. If the City fails to continue to achieve the 50% recycling rate on an annual basis, a fine of up to $10,000 per day can be imposed by the State 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 issuance of non - exclusive solid waste franchises to solid waste haulers and demolition contractors who apply to operate in the City. In addition to mandating the recycling requirements for the private haulers, the franchise stipulates a franchise fee in the amount of 16% of gross monthly paid receipts to be paid to the City which funds environmental insurance premiums, staff work, and road and alley repairs. Article XIII of the City Charter (Granting of Franchises) and Chapter 12.63 of the Municipal Code (Solid Waste Management) establish requirements and procedures to grant a franchise to provide solid waste handling services within the City. There are currently twenty 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 refuse operations. Staff recently received a franchise application from the following solid waste hauling firm: Direct Disposal, Inc. The application submitted by Direct Disposal, Inc. meets the minimum City qualifications per Section 12.63.050 (Application for a Franchise) of the Municipal Code. Pending completion of the public hearing and Council approval on September 14, 2004, the franchise with Direct Disposal, Inc. will take effect October 14, 2004 and will expire on January 9, 2006 at the end of the City's ten -year franchise program that began in 1996. Prepared by: Jere Hammond, Man gement Assistant Submitted by: David E. Niederhaus, Director Attachments: Franchise Award August 24, 2004 Page 3 (1) Resolution No. 2004 - Resolution of Intent to conduct a public hearing to consider the granting of a Non - Exclusive Solid Waste Franchise to Direct Disposal, Inc. (2) Ordinance No. 2004 - _Ordinance granting a Non - Exclusive Solid Waste Franchise to Direct Disposal, Inc. RESOLUTION NO. 2004- 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 DIRECT DISPOSAL, INC. 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 X111 of the City Charter and pursuant to Sections 49500 through 4952' ) of the Public Resources Code, the City is authorized to enter into non - exclusive franchise agreements for commercialsolidwastecollectionserviceswithprivate solid waste haulers; and, WHEREAS, Direct Disposal, Inc. and private firm, has submitted an application requesting a Non- exclusive Solid Waste Franchise that satisfies the City's application requirements. that: NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach 1. A public hearing shall be conducted on September 14, 2004, 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 applicants listed under Item 2 below pursuant to the following terms and conditions: a. Franchise effective date: October 14, 2004. b. Franchise fee: 16% of gross monthly receipts. c. A portion of the Franchise fee, 5.5 %, shall be earmarked for the purposes of indemnifying and holding the City harmless from environmental liability associated with the Franchisee's operations in the City. This portion of the Franchise fee shall be paid into the City's Environmental Liability Fund. d. Term of Franchise: October 14, 2004 to January 9, 2006 with renewal rights upon mutual agreement of the franchisee and City. e. The City shall not set the Franchisee's bin rates. 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. 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, terns and conditions of the franchise agreement, City Charter and Municipal Code. 2 2. The City proposes to offer a non - exclusive solid waste collection franchise to the following applicants listed below that are 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. Direct Disposal, Inc. Daniel Agajanian, 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 September 14, 2004. ATTEST: CITY CLERK Adopted this 24th day August, 2004 3 MAYOR ORDINANCE NO. 2004- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH GRANTING A NON - EXCLUSIVE SOLID WASTE FRANCHISE TO DIRECT DISPOSAL, INC. 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 September 9, 2003, to consider the granting of a franchise to Direct Disposal, Inc. 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) Direct Disposal, Inc. 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, Conmiercial Solid Waste Collection Franchise Agreement between the City of Netivport Beach and Direct Disposal, Inc. is hereby adopted, approved alA incorporated i nto t his O rdinance b y r eference, sh all c ommen.ce at 12:01 a.m., o n o ctober 1 •1, 2004 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, ri ght of ways and places for such purposes. Fees shall be in tl-.e 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 t]-e 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 Publ:c 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. 2 E. Inclusion of Franchise Documents 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 ofeach 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 se ction, s ubsection, s entence, c lause o r p hrase o f t his O rdinance is, for a ny 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, 3 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 24`h day of August 2004, and adopted on the 14`h day of September 2004, by the following vote to wit: AYES. COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSTAINED, COUNCIL MEMBERS ABSENT, COUNCIL MEMEBERS MAYOR ATTEST: CITY CLERK 4