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SR 11-15-2022 5E City Council Report City Council Meeting: November 15, 2022 Agenda Item: 5.E 1 of 8 To: Mayor and City Council From: Rick Valte, Public Works Director, Public Works, Resource Recovery & Recycling Subject: Award RFP for Landfill Trash Disposal Services to Arakelian Enterprises, Inc., dba Athens Services and Chiquita Canyon, LLC Recommended Action Staff recommends that the City Council: 1. Award RFP# 313 to Arakelian Enterprises, Inc. dba Athens Services for landfill trash disposal services for the Public Works Department; 2. Award RFP# 313 to Chiquita Canyon, Inc., dba: Chiquita Canyon, LLC for landfill trash disposal services for the Public Works Department; 3. Authorize the City Manager to negotiate and execute an agreement with Arakelian Enterprises, Inc., dba Athens Services, in an amount not to exceed $3,279,863 (including a 15% contingency) for two years, with future year funding contingent on Council budget approval; and 4. Authorize the City Manager to negotiate and execute an agreement with Chiquita Canyon, Inc., dba: Chiquita Canyon, LLC, in an amount not to exceed $4,575,489 (including a 20% contingency) for two years, with three additional one-year renewal options in the amount of $7,320,783 on the same terms and conditions for a total amount not to exceed $11,896,272 over a five-year period, with future year funding contingent on Council budget approval. 5. Staff recommends the Council adopt a finding of Categorical Exemption pursuant to Section15301 and 15308 of the California Environmental Quality Act (CEQA) Guidelines. Summary The City and its residents, businesses, and visitors generate approximately 63,500 tons (or 127,000,000 pounds) of landfill trash materials annually that are sent to landfill facilities in the Southern California region. The disposal and diversion of these materials represents a key challenge in achieving the City’s established sustainability goals, and a unique opportunity to explore alternative paths to compliance. In March 2022, the City 5.E Packet Pg. 217 2 of 8 sought proposals from permitted and experienced landfill facilities to receive and process the City’s landfill waste materials. As a result of this process, staff recommends Chiquita Canyon, Inc., dba Chiquita Canyon, LLC and Arakelian Enterprises, Inc., dba Athens Services as the best contractors to receive the trash material from the City. Discussion The City’s Resource Recovery and Recycling Division provides solid waste management services for a variety of waste streams: construction and demolition (C&D) materials, recyclable (blue bin) materials, organics (green bin) materials, and landfill trash (black bin) materials. Each material type is accepted and handled by different processing facilities. In an effort to increase the quantity of materials diverted from landfills, the City Council has adopted several ordinances over the years that mandate the recycling of construction and demolition (C&D) debris, recyclable, and organics materials. The remaining materials that are non-recyclable/re-usable are considered landfill trash. Landfill trash can include styrofoam, plastic utensils, broken dishes, candy wrappers, chip bags, and plastic bags. These types of items are sent to regional landfill facilities for disposal. There are only a few landfill facilities operating in the local region. These facilities are heavily regulated and once they reach their capacity, they are permanently closed. The density of the region and the State’s regulatory requirements make it difficult for new landfills to open, limiting the available options. Working Toward Zero Waste in 2030 Santa Monica maintains a long-standing commitment to sustainability and fighting climate change. A central tenet of that effort has been the mandate of achieving Zero Waste by 2030. Adopted by Council in 2014 (Attachment A) and updated in 2019 (Attachment B), the City’s Zero Waste Strategic Operations Plan (Zero Waste 5.E Packet Pg. 218 3 of 8 Plan) provides an environmental policy framework to guide the City on its path to achieving zero waste, with regular progress updates every five years. The Zero Waste Plan established the goal of achieving 95 percent landfill diversion, or a landfill disposal rate of 1.1 pounds per person per day (PPD) by 2030. In order to achieve this goal, the City needs to drastically reduce the amount of waste sent to the landfill. The City’s primary area of focus to reduce landfilled waste would mostly come from recovering additional recyclable and organics materials currently being disposed of and sent to landfills. The 2019 update prioritized the following actions for immediate implementation: • Develop a Zero Waste Program Team that can provide proactive assistance, community engagement, and a communications plan • Create, implement, and enforce a comprehensive Zero Waste Ordinance and an Edible Food Recovery Program. These actions have commenced, but additional strategies will be necessary in order to meet the City’s 2030 timeline. The City has a three-stream solid waste management system: organics, recyclables, and landfill trash. However, some customer locations do not have the space for the three-stream system, or are not set up for the new sorting processes. This results in organics and recyclables that could be diverted ending up in the landfill trash containers. Mixed waste processing could be a viable solution to that problem and a component of the City’s zero waste efforts. A mixed waste processing materials recovery facility (MRF) is a plant that separates black bin landfill trash materials to recover items that are recyclable, such as (but not limited to) cardboards, food waste, and beverage containers. The remaining materials that are not recyclable or have no economic value are sent to the landfill. The benefit of mixed waste processing MRFs is that they use innovative sorting technologies and human workers to allow for additional recovery of recyclable materials from items that are discarded in the trash containers; while the downside is that they cost more to run, as they are also more labor intensive. 5.E Packet Pg. 219 4 of 8 The next Zero Waste Plan update is due in 2024 and the City’s current 2022 waste level is 3.5 PPD. While encouraging progress has been made since 2019, this is still considerably higher than the benchmarks established in the approved Zero Waste Plan, if 1.1 PPD is to be reached by 2030. Sending a portion of the City’s landfill trash materials to a vendor with mixed waste processing MRF capabilities for additional processing will allow staff to gather new data, test the effectiveness of this strategy, calculate the cost-benefit analysis, and return with a 2024 report detailing the feasibility of this as a long-term option towards achieving the established goal. Staff will continue to identify new and expanded zero waste opportunities that help to increase diversion from landfills as techniques and technologies become available. These additional strategies and potential action items can then be considered and prioritized as part of the 2024 update. Vendor Selection Pre-Qualified Vendors Arakelian Enterprises, Inc., dba Athens Services Chiquita Canyon, Inc., dba: Chiquita Canyon, LLC Evaluation Criteria The training, credentials and experience of the person or firm; the capacity of the person or firm to perform the contract or provide the service promptly, within the time specified, and without delay; and the character, integrity, reputation and judgment of the person or firm; the ability of the person or firm to provide such future service as may be needed; and the price which the person or firm proposes to charge, including whether the price is fair, reasonable and competitive. The City shall have absolute discretion in determining the applicability and weight of the criteria listed above. The City is not required to select the proposal with the lowest price. Municipal Code SMMC 2.24.190 RFQual Data Date Posted Posted On Advertise In (City Charter & SMMC) Vendors Downloaded Submittals Received Date Publicly Opened 03/30/2022 City's Online Bidding Site Santa Monica Daily Press 19 4 05/05/2022 Best Bidder Justification Staff recommends Chiquita Canyon, LLC as the City’s first option for disposal. Chiquita Canyon submitted the lowest-cost proposal, and it is also one of the City’s existing landfill contractors that has been providing satisfactory services. Although 5.E Packet Pg. 220 5 of 8 Chiquita Canyon is a traditional landfill, it has put in place numerous practices that align with the City’s carbon neutrality goal, including generating renewable electricity and installing a renewable natural gas (RNG) plant on site. In addition, staff recommends Athens Services as the City’s second option for landfill trash services. In contrast to a traditional landfill, Athens Services proposes mixed waste processing, which means the Santa Monica landfill trash materials sent to Athens’ facility will be sorted via technologically advanced equipment and human workers first to recover recyclable materials from the loads (which could constitute up to 30% of the total delivered tonnage) before the remaining non-recyclable materials are discarded and landfilled. Athens Services’ proposal increases the City’s diversion rate from landfill facilities, in line with the established Zero Waste goal. Based on these criteria, the vendors are recommended as best qualified persons or firms. The Athens Services contract would be for an initial period of two years, giving staff the time to monitor the diversion rate and evaluate the effectiveness of mixed waste processing to determine if continued use beyond the initial two-year period is warranted. To balance the coverage for Santa Monica’s landfill trash disposal needs, fiscal responsibility to keep costs down, and to deploy technologies that increase landfill diversion and aid in the City’s zero waste goals, staff is recommending splitting the award and entering into contracts with both Chiquita Canyon, LLC (80%) and Athens Services (20%). Both contracts would be for a not to exceed amount as outlined in the recommended action, with the City paying only for the actual services provided and no guarantee of additional work. The contract amounts are set at the upper limits of possible expenditures based on historical landfill services. Environmental Review The award contract for landfill trash disposal service is categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15301 and 15308. 5.E Packet Pg. 221 6 of 8 Section 15301 of the CEQA State Guidelines provides Class 1 (existing facilities) exemption for projects that consists of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. The award contract for trash hauling and disposal would not result in any modifications to existing landfills or disposal facilities. Solid waste disposal and diversion services currently exist, and the proposed award contract would not expand or materially change existing landfill facilities or waste disposal operations. The selected vendor will be required to comply with existing solid waste regulations and terms of the agreement and provide similar services to those currently being required and provided. Therefore, the project is categorically exempt as set forth in Section 15301 of the CEQA State Guidelines. The project is also exempt pursuant to Section 15308 of the CEQA Guidelines. Section 15308 (Class 8 Actions for Protection of Environment) exempts actions taken by a regulatory agency, as authorized by state and local ordinances, to assure the maintenance, restoration, enhancement, or protection of the environment where the regulatory process involves procedures for the protection of the environment. The award contract would ensure City compliance with solid waste disposal regulations for the protection of the environment including: • Integrated Waste Management Act (IWMA) of 1989 requires cities to permit and regulate solid waste handling; • Assembly Bill 341 (2011) requires both businesses that generate four cubic yards or more of solid waste and multifamily projects with five units or more to participate in a recycling program; • Assembly 1826 ( 2014), requires businesses, including public entities and multifamily projects, to recycle their organic waste. Businesses must develop strategies to reduce and/or arrange for recycling services for the following types of organic waste: food waste, food-solid paper, green waste, landscaping and pruning waste, and non-hazardous wood waste; 5.E Packet Pg. 222 7 of 8 • Senate Bill 1383 (2016) established methane emission reduction targets for California, requiring a 50 percent reduction of organics sent to the landfill by 2020, and a 75 percent reduction by 2025; and • City’s Zero Waste Plan (Updated 2019) provides an environmental policy framework to guide the City on its path to achieving zero waste. The award contract requires the landfill disposal vendors to comply with both State and local regulations for disposing of waste and ensures the protection of the environment since the contract contains compliance requirements with State mandates. Therefore, the project is categorically exempt as set forth in Section 15308 of the CEQA State Guidelines. Financial Impacts and Budget Actions Staff seeks authority to approve available funding from the Resource Recovery and Recycling fund to award contracts to Chiquita Canyon, Inc., dba: Chiquita Canyon, LLC and Arakelian Enterprises, Inc., dba Athens Services to provide landfill services. Future year funding is contingent on Council budget approval. Contract Request Vendor FY 2022-23 Amount Future Years Amount Department Account # Total Contract Amount Chiquita Canyon, LLC $1,316,724 $ 10,579,548 54500002.523010 $11,896,272 Athens Services $ 937,869 $ 2,341,994 54500002.523010 $ 3,279,863 Total $2,254,593 $12,921,542 $15,176,135 Prepared By: Ryan Kraemer, Senior Administrative Analyst Approved Forwarded to Council 5.E Packet Pg. 223 8 of 8 Attachments: A. Zero Waste Strategic Operations Plan 2014 (Web Link) B. Adoption of Zero Waste Plan Update and Strategic Direction for Recycling Services 2019 (Web Link) C. Athens Services Oaks Initiative Form D. Chiquita Canyon, LLC Oaks Initiative Form 5.E Packet Pg. 224 CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1.Personal services contracts in excess of $25,000 over any 12-month period; 2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3.Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4.Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5.Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6.Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or 7.Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ___________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ 5.E.c Packet Pg. 225 Attachment: Athens Services Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services) 5.E.dPacket Pg. 226Attachment: Chiquita Canyon, LLC Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services) 5.E.d Packet Pg. 227 Attachment: Chiquita Canyon, LLC Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services) 5.E.d Packet Pg. 228 Attachment: Chiquita Canyon, LLC Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services) 5.E.d Packet Pg. 229 Attachment: Chiquita Canyon, LLC Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services) 5.E.d Packet Pg. 230 Attachment: Chiquita Canyon, LLC Oaks Initiative Form (5305 : Award RFP for Landfill Trash Disposal Services)