HomeMy WebLinkAbout07 SECOND AMENDMENT TO THE WASTE DISPOSAL AGREEMENT WITH THE COUNTY OF ORANGEDocusign Envelope ID: C1 EA196D-5BA2-4ECD-9D59-E3EE3CFF8CE2
MEETING DATE
TO:
FROM:
SUBJECT:
SUMMARY:
Agenda Item 7
Initial
AGENDA REPORT Reviewed: aS
City Manager
Finance Director 9
MAY 6, 2025
ALDO E. SCHINDLER, CITY MANAGER
MICHAEL GRISSO, DIRECTOR OF PUBLIC WORKS
SECOND AMENDMENT TO THE WASTE DISPOSAL AGREEMENT
WITH THE COUNTY OF ORANGE
The disposal of solid waste at Orange County landfills is governed by a Waste Disposal
Agreement under which cities and sanitary districts agree to exclusively deposit certain
waste at the County of Orange's landfills in exchange for low and stable disposal rates. The
current Waste Disposal Agreement was entered into in 2009 and subsequently amended
to extend the term through June 30, 2025. The Orange County City Manager Association
is currently negotiating a successor agreement to the agreement with OC Waste &
Recycling and additional time is required to finalize mutually agreeable terms and disposal
fees. The proposed amendment extends the current agreement by one year to allow for
continued negotiations and includes a 2.6% disposal fee increase, per the escalation
formula in the current agreement.
RECOMMENDATION:
It is recommended that the City Council approve the Second Amendment to the Waste
Disposal Agreement with the County of Orange and authorize the Mayor and City Clerk to
execute the document on behalf of the City.
FISCAL IMPACT:
This amendment will have no fiscal impact on the General Fund. The proposed amendment
includes a 2.6% increase in disposal fees based on the Consumer Price Index, in
accordance with the escalation formula in the current agreement. This proposed increase
in disposal rates will be passed on to Tustin residential and business customers according
to the terms of the City's existing contract with CR&R. The terms of this agreement allow
CR&R to recover increased disposal costs through a pass -through mechanism, subject to
review and approval by the City.
CORRELATION TO THE STRATEGIC PLAN:
The approval of this agreement amendment contributes to the fulfillment of the City's
Strategic Plan Goal C: Financial Strength. Specifically, the recommended actions
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City Council Agenda Report
Second Amendment to Waste Disposal Agreement
May 6, 2025
Page 2
implemented Strategy #3, which encourages staff to evaluate City services and identify
ways to improve cost neutrality by conducting a comprehensive fee analysis and
determining appropriate levels of cost recovery.
Additionally, the approval of the proposed agreement amendment contributes to the
fulfillment of the City's Strategic Plan Goal D: Strong Community and Regional
Relationships. Specifically, this project implements Strategy #2, which encourages working
collaboratively with agencies outside Tustin on issues of mutual interest and concern to the
parties.
BACKGROUND AND DISCUSSION:
The City of Tustin disposes of solid waste at landfills owned and operated by the County of
Orange through Orange County Waste & Recycling (OCW&R) under a county -wide
agreement known as the Waste Disposal Agreement (WDA). The current WDA between
all Orange County cities and sanitary districts and the County of Orange expires on June
30, 2025. In January 2022, OCW&R notified cities of its intent to revise the WDA to align
with legislative requirements such as Senate Bill 1383, which requires local governments
to divert organic waste, such as food scraps and landscaping waste, away from the landfills.
OCW&R presented a proposed successor agreement to the WDA, titled the Waste
Infrastructure System Enhancement (WISE) agreement, at an Orange County City
Manager's summit on November 7, 2024.
The WISE agreement proposed increasing the landfill disposal rate from the current rate of
$42.65 to $82.00 per ton, representing a 92.3% increase. It also proposed a rebate program
for composted organic waste and an allocation of capital expenditures for organics
recycling infrastructure at County landfills.
The Orange County City Manager Association (OCCMA) formed the OCCMA WISE
Agreement Committee in December 2024 to negotiate a successor agreement to the WDA
and requested an extension of the current WDA to allow time for such negotiations.
OCW&R has agreed to the requested extension under the terms of the proposed
amendment, which generally provides for a 12-month extension of the current WDA and a
2.6% disposal fee increase, per the escalation formula in the current WDA. The extension
period will allow stakeholders to conduct due diligence on a proposed successor agreement
to the WDA as well as evaluate costs, infrastructure plans, and future fee adjustments. If
the OCCMA committee and OCW&R do not reach mutually agreeable terms by September
30, 2025, monthly updates will be provided to all cities and sanitary districts beginning in
October 2025.
The City finds that executing the Second Amendment to the WDA is in the public interest
since it will ensure stable disposal rates and collaboration between all cities and sanitary
districts in Orange County for an additional year. Upon approval by all Orange County cities,
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City Council Agenda Report
Second Amendment to Waste Disposal Agreement
May 6, 2025
Page 3
the proposed agreement amendment will be considered by the County Board of
Supervisors at their earliest available meeting.
Michael Grisso
Director of Public Works
Attachment:
1. Second Amendment to Waste Disposal Agreement with the County of Orange
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SECOND AMENDMENT TO WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
County Amendment Authorization Date
12025
County Notice Address:
Director, OC Waste & Recycling
601 N. Ross Street
5t" Floor
Santa Ana, CA 92701
and the
CITY OF TUSTIN
June 30, 2025
City Amendment Authorization Date
12025
City Notice Address:
City of Tustin
Attn: Aldo E. Schindler, City Manager
300 Centennial Way
Tustin, CA 92780
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SECOND AMENDMENT TO WASTE DISPOSAL AGREEMENT
THIS SECOND AMENDMENT TO THE WASTE DISPOSAL AGREEMENT ("Second Amendment") is made
and dated as of the date indicated on the cover page hereof between the County of Orange, a political
subdivision of the State of California (the "County"), and the City (general law, charter or other), Special
District or Sanitary District designated on the cover page of this Agreement and party to this Agreement.(the
"City").
RECITALS
The County owns, manages, and operates a Waste Infrastructure System to manage municipal and
solid waste generated within Orange County, California or imported from outside Orange County, California
pursuant to contractual agreements (hereafter used referred to as "Disposal System" or "Waste Infrastructure
System"). The Waste Infrastructure System collectively includes active Class III sanitary landfills ("County
Landfills"), resource recovery, recycling and organics programs, infrastructure and operations, and regional
household hazardous waste collection centers and other waste management related systems as may be
deemed necessary by the County.
The County is also responsible for the long-term management of 20 closed landfills as required under
Applicable Law.
County Landfills are used for the management of municipal solid waste pursuant to legislation
including, but not limited to, the California Integrated Waste Management Act of 1989 (Division 30 of the
California Public Resources Code) (the "Act") and the Short-lived Climate Pollutants Reduction Act ("SB
1383"). County Landfills are also subject to other state and federal regulations designed to ensure that landfill
operations minimize the impacts to public health and safety and the environment.
The City, in the exercise of its police power, its powers under the Act, and other Applicable Law, has
entered into a franchise or other agreement with or issued permits or licenses to one or more private haulers
for the collection, recycling, diversion, and disposal of municipal solid waste generated within the City.
The City and the County have historically provided for the management of municipal solid waste
through Waste Disposal Agreements ("WDAs"), wherein the County agreed to provide disposal capacity for
waste generated in the City, and the City agreed to deliver or cause the delivery of waste generated in the
City to the Disposal System, as more specifically set forth in, and subject to the terms and conditions of the
WDAs. In 2009, the Parties entered into a new WDA (referred to as the "Original WDA"). In 2016, the Original
WDA was amended by the Parties ("First Amendment"), whereby the Parties updated certain terms and
extended the term through June 30, 2025. (The Original WDA and its corresponding First Amendment are
referred to in this Second Amendment as the "Current WDA".)
In response to passage of several pieces of legislation that require significant reductions in the
disposal of organic waste, and in light of the approaching expiration of the Current WDA, the County held two
City Manager Summits in November 2024 proposing terms of a new WDA.
The Orange County City Manager Association ("OCCMA") has established a Committee ("OCCMA
Committee") including representatives of cities and sanitary districts to review the terms of the proposed new
WDA. The OCCMA Committee requested a 12-month extension of the Current WDA to allow for additional
time to negotiate mutually agreeable terms for a new WDA, and obtain approval from the respective
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governing bodies. The County is agreeable to OCCMA's requested extension to the Current WDA on terms as
provided in this Second Amendment.
The City has determined that the execution of this Second Amendment by the City is in the best
interest of the City and will serve the public health, safety, and welfare by continuing the waste disposal
services historically provided under the Current WDA while the Parties: (1) engage in due diligence related to
a new WDA, in order for the City to evaluate the cost/benefit of a new WDA, which is expected to include the
City and OCCMA obtaining more comprehensive and detailed information on the County's plans for
infrastructure expansion and improvements, the financial and operational conditions of the existing Waste
Infrastructure System, and the components, timing, and procedures for future contract fee increases; and,
(2) negotiate the terms and conditions of a new WDA.
The County has determined that the execution by the County of this Second Amendment will serve
the public health, safety, and welfare by continuing to provide a stable, predictable, and reliable supply of
municipal solid waste and the resulting service payment revenue to the Disposal System, while the Parties
exchange information and conduct negotiations with the County goal of ensuring that any negotiated
Contract Rate in the new WDA covers the full cost of operations and infrastructure O&M and development
needed to ensure indemnification and regulatory compliance..
Official action approving this Second Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the City on the City authorization date indicated on
the cover page hereof.
Official action approving this Second Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date
indicated on the cover page hereof.
It is, therefore, agreed as follows:
1. Extended Term.
(a) Section 6.1 (A) of the Current WDA is deleted in its entirety and replaced with the following:
"Extended Term. This Agreement shall continue in full force and effect until 11:59 p.m. on June 30,
2026 (the "Extended Term"), unless earlier terminated in accordance with its terms, in which event
the Extended Term shall be deemed to have expired as of the date of such termination."
(b) Section 6.1 (B) is deleted in its entirety.
(c) Section 6.1 (C) of the Current WDA is deleted in its entirety and replaced with the following:
"Contract Rate Negotiations During Extended Term. If the Orange County City Manager Association's
committee tasked with negotiating the terms of a successor to this Agreement with the County and
recommending approval of the same to the Parties (the "Committee") and the County have not
reached mutually agreeable terms of a successor to this Agreement including, but not limited to,
proposed revisions to the Contract Rate, by September 30, 2025, the County shall, and it is expected
that the Committee will provide, updates to all Participating Cities, and their respective governing
bodies as may be deemed necessary, regarding the status of negotiations on a monthly basis until
mutually agreeable terms are reached or the Extended Term expires."
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In recommending any revisions to the Contract Rate, in addition to the circumstances described in
Section 4.2(A), the Committee and County may take into consideration factors including, but not
limited to, the following:
(i) actual cost of operations;
(i i) population growth;
(iii) increase or decrease in available tonnage;
(iv) economic and disposal market conditions in the Southern California region;
(v) changes in transportation and technology;
(vi) changes in transportation costs;
(vii) closure and expansion of nearby landfills;
(viii) capacity of the Disposal System;
(ix) long-term infrastructure needs; and
(x) available reserves which are in excess of the amount reasonably required as reserves.
(d) Appendix 2 of the Current WDA is deleted in its entirety and replaced with the following:
APPENDIX 2
Cumulative County Acceptable Waste Tonnage Target to be Used for Purposes of Section 4.2(B)
Fiscal Year
County Acceptable Waste Tonnage
Cumulative County Acceptable Waste Tonnage
FY 2025-26
3,166,659
3,166,659
2. Contract Rate.
(a) The first paragraph of Section 4.2(A) of the Current WDA is deleted in its entirety and replaced with
the following:
"(A) Establishment of Contract Rate. During the Extended Term, the Contract Rate payable by each
Franchise Hauler shall be $43.76 per ton, contingent on the delivery to the Disposal System of an
amount of Acceptable Waste at least equal to the Cumulative Tonnage Targets identified in Appendix
2, and subject to adjustment necessary to reflect the circumstances set forth in this Section 4.2,
subjections (i) through (z)."
Note: Subsections (i) through (z) found in the Current WDA remain unchanged.
3. Effectiveness of Second Amend
The provisions of this Second Amendment shall not become effective unless and until this Second
Amendment has been executed by the County and all of the Participating Cities, and shall become effective
once that occurs.
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4. Reoresentations and Warranties of the Parties.
Each of the parties to this Second Amendment represent and warrant that it is a political subdivision
of the State of California validly existing under the Constitution and laws of the State and that it has duly
authorized the execution and delivery of this Second Amendment to each other party.
S. Remaining Terms.
All other terms and conditions of the Current WDA not specifically changed by this Second
Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, COUNTY and CITY have caused this Second Amendment to be executed by their duly
authorized officers or representatives as of the day and year first above written.
County of Orange
By
Director, OC Waste & Recycling
Date
Approved as to Form
By
County Counsel
Date
City of Tustin
By
Austin Lumbard, Mayor
Date
Approved as to Form
By
David E. Kendig, City Attorney
Date
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