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CC - Item 6A - Organic Waste Recylcling Program E M e E 4 9 ° ROSEMEAD CITY COUNCIL L STAFF REPORT ll ° t HCORPORA7�p 19.'3C' TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: BILL R. MANIS, CITY MANAGERN-1 DATE: SEPTEMBER 12, 2017 SUBJECT: ORGANIC WASTE RECYCLING PROGRAM SUMMARY In October 2014, Governor Brown signed AB 1826 Chesbro (Chapter 727, Statutes of 2014), which required that on and after January 1, 2016, local jurisdictions across the state implement an organic waste recycling program to divert organic waste generated by businesses, including multifamily residential dwellings that consist of five or more units. This law also required businesses to start recycling organic waste on and after April 1, 2016. While AB 1826 requires jurisdictions to include multifamily residences in their implementation plan, multifamily dwellings are not required to have a food waste diversion program. While AB 1826 places the burden on local jurisdictions to provide an organic waste recycling program, Republic Services (the City's franchise waste hauler) is proposing a fully compliant AB 1826 program for Rosemead that will divert organic materials from landfills to reduce greenhouse gas emissions. BACKGROUND Building upon the requirements of AB 341, which mandated commercial waste recycling, the State of California is now mandating organic recycling under AB 1826. As a result of the signing of AB 1826 into law, the new mandatory organic recycling requirements will be phased in over several years and will assist the State in meeting its recycling goal of 75% by 2020. Requirements for organic recycling depend on the amount of organic waste generated weekly by the business. Over time, more businesses will be required to comply because the organic waste threshold that triggers additional compliance requirements is lowered (see table below). Date Threshold to Arrange for Organic Waste Recycling Services April 1,2016 Businesses that generate 8 cubic yards of organic waste per week January 1,2017 Businesses that generate 4 cubic yards of organic waste per week January 1,2019 Businesses that generate 4 cubic yards of commercial solid waste per week Businesses that generate 2 cubic yards of commercial solid waste per week(the 2 cubic January 1,2020 yard requirement only takes effect if CalRecycle determines that statewide disposal of organic waste in 2020 has not been reduced by 50%of 2014 levels) ITEM NUMBER: 6 a City Council Meeting September 12,2017 Page 2 of 5 As AB 1826 is a mandatory requirement for all jurisdictions statewide (with the exception of rural counties who can go through an exemption process), the City is required to develop and implement a program that is compliant with State law. The City's franchise waste hauler (Republic Services) has developed a fully compliant AB 1826 program for our City that will divert organic materials from landfills to reduce greenhouse gas emissions. Organic waste means food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food- soiled paper waste that is mixed in with food waste. Diverted organic materials will be allocated to highest and best end uses as outlined by the US EPA Food Recovery Hierarchy. Food Recovery of edible portions will be provided by Food Finders in partnership with the City and Republic Services. Non-edible portions will be source separated by the commercial sector, collected in a dedicated route by Republic Services, and environmentally recycled for renewable energy production by a Centralized Organic Recycling equipment (CORe) patented system and the LA County Sanitation wastewater treatment plant in Carson, California. Organic materials will also be composted through a covered aerated static pile system (CASP) at the Agromin OC facility in Chino, California. In addition, as part of the AB 1826 compliant program, Republic Services will provide education and outreach to commercial customers through letters, instructional brochures, and personal visits to business locations. The visits will include the distribution of posters and individual training on how to identify organics and how to separate organics from trash or other non-recyclable solid waste. Republic Services has already assisted a number of their partner cities (Inglewood, Huntington Beach, Hawthorne, Los Angeles, and Whittier) in adopting this same program over the last year as well as currently working with a number of their other partner cities, which include Anaheim, Fountain Valley, Los Alamitos, Seal Beach, and Bell. In addition, according to Republic Services, the proposed program will not only fully comply with AB 1826, but it is expected to comply with SB 1383, which is anticipated to pass the legislature late this year. Section 3.3(b) of the City's franchise agreement with Republic Services permits rate adjustments due to changes in the law after providing the City and its resident's detailed information supporting the proposed rate adjustment at a public meeting. Republic Services' presentation was made at the July 11, 2017, meeting, and the information is summarized in Attachment B. STAFF RECOMMENDATION It is recommended that the City Council approve the Organic Waste Recycling Program proposed by Republic Services by adopting Resolution Number 2017-45 (see Attachment A). DISCUSSION The goal of the mandatory commercial organic recycling law (AB 1826) is to help California achieve aggressive recycling and greenhouse gas emission reduction goals. California landfills take in about 30 million tons of waste each year, of which more than 30% is organic. The State has determined that these organics should be composted or used to produce renewable energy, City Council Meeting September 12,2017 Page 3 of 5 rather than being disposed of in landfills. Greenhouse gas emissions resulting from the decomposition of organic waste in landfills have been identified as a significant source of emissions contributing to global climate change. Operation costs to implement the program will have a major impact on its effectiveness. Commercial food waste diversion is mandatory and, as such, is the new way to conduct business in cities and the State. Due to the high cost of collecting and processing/recycling commercial organics materials, Republic Services has recommended that the rates be shared across all commercial businesses to be effective and to encourage participation. In fact, to date, all of Republic Services partner cities have adopted or plan to adopt commercial sector wide programs. Republic has found that those cities that have applied the commercial sector wide rate structure have realized very positive results in terms of participation, municipal compliance, and customer acceptance. In a direct user fee based cost recovery rate structure, most affected businesses would consider the increase in costs as prohibitive and economically burdensome. The costs to provide an AB 1826 compliant program to the City of Rosemead's commercial sector is approximately $334,000 annually. This represents a 12.09% increase if the rates were shared across all commercial business and more than a 400% increase if the rates were applied based on a direct users fee structure, which would more than likely result in a lack of participation in the City's AB 1826 program as well as the City's lack of compliance to AB 1826. In addition, a direct user fee program would likely require significant fines and penalties for enforcement of non-complying businesses in the City to increase participation in mandatory organics recycling. The City has negotiated a highly favorable, and phased in increase of 5.0% to commercial rates to be implemented October 1, 2017, and an additional 5.0% to be implemented on August 1, 2018. This will provide compensation to Republic Service for providing the City with a compliant AB 1826 program. The commercial rates for program specific bin servicing beginning October 1, 2017, would be as follows: Current Customer Rates Pick-Up/Week 1.5 Yard 3 Yard 4 Yard 6 Yard 3 Yard Recycling 1 $ 102.33 $ 144.52 $ 192.70 $ 308.57 $ 43.88 2 $ 148.63 $ 232.56 $279.83 $ 458.22 $ 87.76 3 $ - $313.15 $ 390.60 $ 614.29 $ 131.64 4 $ - $396.06 $480.16 $ 765.06 $ 175.53 5 $ - $489.36 $ 593.24 $ 947.50 $219.41 6 $ - $ 560.52 $ 682.20 $ 1,089.60 $258.53 $ 35.02 $314.07 $ 345.47 $ 418.79 $ - City Council Meeting September 12,2017 Page 4 of 5 Adjusted Customer Rates for Organics Pick-Up/Week 1.5 Yard 3 Yard 4 Yard 6 Yard 3 Yard Recycling 1 $ 107.45 $ 151.75 $202.34 $ 324.00 $ 46.07 2 $ 156.06 $244.19 $293.82 $ 481.13 $ 92.15 3 $ - $328.81 $410.13 $ 645.00 $ 138.22 4 $ - $415.86 $ 504.17 $ 803.31 $ 184.31 5 $ - $ 513.83 $622.90 $ 994.88 $230.38 6 $ - $588.55 $ 716.31 $ 1,144.08 $271.46 96 Gallon Container Service $ 36.77 $329.77 $ 362.74 $ 439.73 $ - Change to Current Customer Rates Pick-Up/Week 1.5 Yard 3 Yard 4 Yard 6 Yard 3 Yard Recycling 1 $ 5.12 $ 7.23 $ 9.64 $ 15.43 $ 2.19 2 $ 7.43 $ 11.63 $ 13.99 $ 22.91 $ 4.39 3 $ - $ 15.66 $ 19.53 $ 30.71 $ 6.58 4 $ - $ 19.80 $ 24.01 $ 38.25 $ 8.78 5 $ - $ 24.47 $ 29.66 $ 47.38 $ 10.97 6 $ - $ 28.03 $ 34.11 $ 54.48 $ 12.93 96 Gallon Container Service $ 1.75 $ 15.70 $ 17.27 $ 20.94 $ - Organics Pricing(Additional Container) PICK UP/WEEK 64 Gallon 1 Yard 1 $ 29.95 $ 71.68 2 $ 59.90 $ 143.36 3 $ 89.85 $215.05 FISCAL IMPACT An overall estimated increase to Commercial Refuse Franchise Fees of approximately $22,000, to be paid to the City, is projected as a result of the proposed commercial rate increase for the period October 1, 2017-December 31, 2018. STRATEGIC PLAN IMPACT -None LEGAL REVIEW Resolution No. 2017-45 has been reviewed and approved by the City Attorney. City Council Meeting September 12,2017 Page 5 of 5 PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Michelle Ramirez, Director Public Works Attachment A: Resolution No. 2017-45 Attachment B: Republic Services PowerPoint Presentation E M F S CIVIC PRIDE /NCORPORATE 59 Attachment A Resolution No. 2017-45 RESOLUTION NO. 2017-45 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD, CALIFORNIA, ADOPTING AN ORGANIC WASTE RECYCLING PROGRAM WHEREAS,AB 1826 amended the Integrated Waste Management Act(Public Resources Code § 40000 et seq.)to add a new Chapter 12.9 to the Act imposing regulations applicable to the recycling of organic waste; and WHEREAS, the City has entered into an exclusive franchise agreement with Republic Services for solid waste collection and disposal services,and requires Republic Services to assist the City in complying with all applicable provisions of the Integrated Waste Management Act,of which AB 1826 is a part; and WHEREAS, Public Resources Code § 42649.81 phases in organic waste recycling requirements for businesses, with the first phase commencing on April 1, 2016 and requiring businesses that generate more than 8 cubic yards of organic waste per week to recycle their organic waste; and WHEREAS, Public Resources Code § 42649.82 requires cities and counties to adopt an organic waste recycling plan on or before January 1, 2016, which may be implemented through a requirement for mandatory organic waste recycling through a franchisee; and WHEREAS, the City desires for Republic Services to provide organic waste recycling services consistent with AB 1826 within the City. NOW, THEREFORE, the City Council of the City of Rosemead does hereby resolve as follows: SECTION 1. Adoption of Organic Waste Recycling Program. The City Council adopts this Resolution No. 2017-45 as its organic waste recycling program as required by Public Resources Code section 42649.82. SECTION 2. Organic Waste Recycling Program. The City's Organic Waste Recycling Program shall consist of the following elements: (a) Mandatory Organic Waste Recycling for Businesses. Businesses within the City shall recycle their organic waste consistent with the requirements of Public Resources Code section 42649.81. For the purposes of this subsection "businesses" shall have the same meaning as provided in Public Resources Code section 42649.8,which Resolution No.2017-45 defines businesses to mean "a commercial or public entity, including, but not limited to, a firm, partnership,proprietorship,joint stock company,corporation,or association that is organized as a for-profit or nonprofit entity, or a multifamily residential dwelling." (b) Report of Organic Waste Generators. Republic Services shall prepare a report identifying "organic waste generators," as that term is defined in Public Resources Code § 42649.8, within the City,and submit such report to the City by July 1,to ensure that the report can be filed with the State by August 1 of each year. (c) Information Regarding Organic Waste Recycling Facilities. Republic Services shall compile the information listed in Public Resources Code § 42649.82(d)(1)(A) and (B) regarding organic waste recycling facilities and compostable material handling operations,and submit such information to the City. (d) Diversion of Organic Waste. Diverted organics materials will be allocated to highest and best end uses as outlined by the US EPA Food Recovery Hierarchy. Food Recovery of edible portions will be provided by Food Finders in partnership with the City and Republic Services. Non-edible portions will be source separated by the commercial sector,collected in a dedicated route by Republic Services and environmentally recycled for renewable energy production by the CORE system and LA County Sanitation wastewater treatment plant in Carson, California. Organics materials will also be composted through a covered aerated static pile system (CASP) at the Agromin OC facility in Chino, California. (e) Franchise Agreement. The City's franchise agreement with Republic Services provides for changes in compensation due to changes in law under Section 3.3(b). The City has negotiated a highly favorable and phased in increase of 5.0% to commercial rates to be implemented October 1,2017,and an additional 5.0%to be implemented on August 1,2018, which will provide compensation to Republic Service to provide the City with a compliant AB 1826 program. (f) Public Education and Outreach. Republic Services shall develop a program of education and outreach to businesses subject to mandatory organic waste recycling under Public Resources Code § 42649.81 , and monitor the compliance of such businesses with AB 1826. SECTION 3.The City Clerk shall certify to the adoption of this resolution and hereafter the same shall be in full force and effect. PASSED, APPROVED, AND ADOPTED this 12th day of September, 2017. Polly Low, Mayor APPROVED AS TO FORM: ATTEST: Rachel Richman, City Attorney Marc Donohue, City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) § CITY OF ROSEMEAD ) I, Marc Donohue, City Clerk of the City Council of the City of Rosemead, California, do hereby certify that the foregoing City Council Resolution, No. 2017-45, was duly adopted by the City Council of the City of Rosemead, California, at a regular meeting thereof held on the 12`" day of September, 2017, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Marc Donohue, City Clerk E M F Al 4 ck. k;&0 CIVIC PRIDE liktk.-..12"7'' PI /~C°RPDRATED 19`D9 Attachment B Republic Services PowerPoint Presentation IP° cc i.— Ll al - 0 _ v * 1 14(f) Qlc,__„,, 3 aiii� --.--„, W - oc :_-.0- III I z-p -c_ SY4 - Cn : i .i 0 . t . .:. t • . , i . ,:.,.,.. 1 .. ., n . , .. t , ..,:=L.,,- Li:Li. , ,,,,_ . a. . : 1:1 0 . , aill) ?,,'.•.:i7.,:., 1 i nit; LL CD I (0 O ca) N. N • = 00E.) o O ,--1 N itt0 V y a0E1. - 1 a Tit C. 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