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HomeMy WebLinkAbout08 - Newport Coast Demolition Non-Exclusive Solid Waste Collection FranchiseCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 8 June 27, 2006 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department Mark Harmon, Director, 949 - 644 -3055, mharmon(a)citv.newport- beach.ca.us SUBJECT: Award of Non - Exclusive Solid Waste Collection Franchise to Newport Coast Demolition ISSUE: Should the City Council adopt the attached Resolution of Intention (Resolution No. 2006 -_) to award a Non - exclusive Solid Waste Franchise to Newport Coast Demolition and to conduct a public hearing on July 25, 2006? RECOMMENDATION: Adopt the attached Resolution of Intention (Resolution No. 2006 -_) to award a Non - exclusive Solid Waste Franchise to Newport Coast Demolition and to conduct a public hearing on July 25, 2006. Introduce the attached Ordinance No. 2006 -_ granting a Non - exclusive Solid Waste Franchise to Newport Coast Demolition for a first reading. It is recommended that Council adopt the Ordinance granting the franchise at the conclusion of the July 25, 2006 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. Award of Non - Exclusive Solid Waste Collection Franchise to Newport Coast Demolition June 27, 2006 Page 2 The City's integrated solid waste management program is structured to ensure the health and safety of all residents and business owners. In addition, AB939 requires cities in California to divert 50% of municipal solid waste from the landfill each year. Since this mandate was initiated in 2000, the City has met the statewide requirements in 2001. 2002, 2003, and 2004. If the City fails to achieve the 50% diversion rate, a fine of up to $10,000 can be imposed by the California Integrated Waste Management Board. The City utilizes a non - exclusive franchise system to manage commercial solid waste collection. This system helps the City in its efforts to meet AB939 requirements and also establishes a competitive commercial solid waste collection system for businesses in the City. Additionally, the franchise system stipulates a franchise fee in the amount of 16% of gross monthly paid receipts be paid to the City. These funds are used to fund environmental insurance premiums, maintenance of city infrastructure, and administrative costs tied to managing the franchise system. 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 -two solid waste franchisees operating under separate agreements to collect and transport solid waste generated within the City limits. There is no limit of 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: Newport Coast Demolition. The application submitted by Newport Coast Demolition 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 July 25, 2006, the franchise with Newport Coast Demolition will take effect August 24, 2006 and will expire on March 1, 2007 at the end of the City's one -year extension of the franchise program that initially began in 1996. Environmental Review NIA Public Notice: The Resolution of Intention will be published in the City's official newspaper within 15 days after its adoption and at least 10 days prior to the public hearing to award the Franchise. Award of Non - Exclusive Solid Waste Collection Franchise to Newport Coast Demolition June 27, 2006 Page 3 Prepared by: axo4�, Andrea M. Riles Management Assistant Submitted by: Attachments: (1) Resolution No. 2006 - Resolution of Intent to conduct a public hearing to consider the granting of a Non - Exclusive Solid Waste Franchise to Newport Coast Demolition (2) Ordinance No. 2006 - _Ordinance granting a Non - Exclusive Solid Waste Franchise to Newport Coast Demolition RESOLUTION NO. 2006- 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 NEWPORT COAST DEMOLITION 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 tho.,;e 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, Newport Coast Demolition 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 July 25, 2006, 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: August 24, 2006. 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: August 24, 2006 to March 1, 2007 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. 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. The City proposes to offer a non - exclusive solid waste collection franchise to the following applicant 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 franchise may appear before the City Council and be heard on the date and time listed above. a. Newport Coast Demolition 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 July 25, 2006. Adopted this 27`h day June, 2006 ATTEST: CITY CLERK MAYOR ORDINANCE NO. 2006- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH GRANTING A NON - EXCLUSIVE SOLID WASTE FRANCHISE TO NEWPORT COAST DEMOLITION 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 July 25, 2006, to consider the granting of a franchise to Newport Coast Demolition. 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) Newport Coast Demolition 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 Newport Coast Demolition is hereby adopted, approved and incorporated :into this Ordinance by reference, shall commence at 12:01 a.m., on August 24, 2006 and expire on March 1, 2007. 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 ofthe 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 0 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 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 Section 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 Manger 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, 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 27th day of June 2006, and adopted on the 25th day of July 2006 by the following vote to wit: AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSTAINED, COUNCIL MEMBERS ABSENT, COUNCIL MEMBERS MAYOR ATTEST: CITY CLERK m