HomeMy WebLinkAboutStaff Report 4.B 1/7/2013 w�AL tr4 Ag-endet✓ Itewv#4.3
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DATE: January 7, 2013
TO: Honorable.Mayor and"Members of The City Council
FROM: John C. Brown, City Manager
SUBJECT: Adoption (Second Reading) of an Ordtnance:Approving;a New 15-Year Franchise
Agreement.Betwaen the City of Petaluma and Petaluma Refuse and Recycling,
Incorporated,an Affiliate of The Ratto Group of Companies, Inc., for Solid Waste,
Recyclable Materials and Yard Trimmings Services and Street Sweeping Services; and
Authorizing City'Manager to Execute a'Franchise,Agreement upon'Satisfaction of the
Conditions Precedenttontained.in the Ordinance.
RECOMMENDATION
It is recommended that the CityCouncil;adopt'the attached Ordinance Approving the Franchise
Agreement Between the City of Petaluma and.Petaluma Refuse and Recycling, Incorporated, (PR&R)
an Affiliate of The Ratto Group of Companies, Inc.,for Solid Waste, Recyclable Materials and Yard
Trimmings,Servicesand Street',Sweeping-;Services; and A uthorizing City Manager to Execute a
Franchise Agreement.
BACKGROUNDtand-DISCUSSION
TheCity Council considered this item in October and November,:2012. Further background regarding
the proposed,franchise:agreement with Petaluma Refuse and Recycling (PR&R) can be found in staff
reports presented.to Council on November 19, 2012, October 15,20.12; and November 7,2011.
The Ordinance was introduced and approved for First Reading on November 19, 2012 by a vote of 5-2.
It was intended that the matter would return to City Council for final consideration on December 3,
2012: The Petaluma City Charter, at Section 51, however; provides that no ordinance for the grant of
any franchise shall be put upon its final passage within 30 days of its introduction". Accordingly, the
Ordinance'is placed before the City Council for Second Reading and Adoption at the Council's
January 7, 2013 meeting to allow forthe requisite 30-day period between readings. The Ordinance
would become effective 30 days following adoption, at which time itis anticipated that the new
franchise agreement would be executed with PR'&R to,'realize the various benefits that have previously
been discussedrby the City Council.
ATTACHMENTS'
1. Ordinance
® Item listed Below,is large in volume and is not attached to tins,report ,but may be viewed in the City Clerk's office.
2. New Franchise.Agreement
Agenda Review: ir
City Attorney VlJ/ Finance Director City'Managet
ORDINANCE NO. N.C.S.
APPROVING ANEW FRANCHISE.AGREENIENT BETWEEN THE CITY OF
PETALUMA AND PETALUMA REFUSE AND RECYCLING, INCORPORATED, AN
AFFILIATE OF THERATTO GROUP OF COMPANIES, INC. FOR SOLID WASTE,
RECYCLABLE MATERIALS AND YARD TRIMMINGSSERVICES,AND STREET
SWEEPING SERVICES, AND AUTHORIZING AND DIRECTING THE CITY
MANAGER TO EXECUTE THE FRANCHISE AGREEMENT AND RELATED
DOCUMENTS
WHEREAS, on September 13, 2005, the City entered into an exclusive Franchise
Agreement("Agreement") with GreenWaste Recovery, Inc.,:("Green'Waste") commencing on
January 1, 2006, for collection of solid waste, recyclable materials and yard trimmings, pursuant
to Resolution No. 2005-141 N°C.S ;and
WHEREAS, on July 6, 2009, the City Council;amendedthe Agreement (the First
Amendment) to modify the Rate Periods,originally'specified'in the Agreement and to extend the
Term of the Agreement six months to;June 30,2016; and
WHEREAS, on January 4, 2010, the City Council approved assignment of the
Agreement with Green Waste=Recovery to Petaluma Refuse and Recycling, Incorporated(PR &
R), an affiliate of The Ratto Group of Companies, Inc. by adoption of Ordinance No. 2361; and
WHEREAS,:on November 21, 2011, the City Council adopted Ordinance No. 242.1
amending Chapter 8,16;^-entitled "Garbage and Rubbish Disposal" to add-section 8.16.065,
"Award of franchises,without competitive bidding:" which provides that the City Council may
enter into an exclusive;franchisee for garbage and rubbish collection,if the Council finds that the
benefits of doing so=outweigh the potential benefits Of using_the;conipetitive process;otherwise
required by Chapter 8.16; and
WHEREAS, PR & R;has offered benefits and financial incentives to theCity<as part of a
new franchise agreement that;are,not provided in the existing franchise;agreement; and
WHEREAS, the City and PR& R wish to terminate the existing franchiseragreement
and enter into anew 15-year franchise:agreement without-engaging,in competitive bidding;
ratherlthan.renewthe existing franchise agreement pursuant to Chapter 8.162and"City"of
'Petaluma Charter Section 51;..and
WHEREAS, the City Council finds that the following benefits to the;public.are offered
by the new franchise agreement-:and outweigh the potential benefits to the public of following the
competitive bidding procedures in Section 8.16.070:
o PR,&_R will pay $500,000 to the city during the first three months of the new
franchise.agreement,term.
o PR-&.Rwill pay the'full cost ofthe<City's'consultants, legal advisers and staff
costs necessary`to perform due diligence related to the existing and proposed services,
including contract compliance review, and negotiation of .new franchise agreement,
estimated at $106,000.
o The,new franchise agreement delays rate increases that would have occurred
under the prior franchise agreement, resulting ih..savings.to,ratepayers of approximately
,$410,000 per year, or $6.15 million over the fifteen year life ofthe agreement.
o The City's share of revenues under the'new franchise agreement will be
approximately$222 million in standard franchise fees„$15.3,million from the streets
impact portion of the franchise fee and"$620,000 for'PR & R-paid compliance costs,
totaling approximately $38.12 million.
o The City's shareof revenues under the new'franchiseagreernent will show an
increase of a pproximately'$12:4 million over die fifteen year"life of the agreement,
compared to existing franchise fees and payments and
WHEREAS, the new franchise agreement continues the same services for solid waste
disposal, recycling and related services provided for by the previous franchise agreement,
requires the same diversion percentage of waste from landfills,directs garbage'.and rubbish
hauled from City sources to the same landfill, continues the composting of greenwaste and
directs the hauling of greenwaste to the same composting site, and uses,the same trucks and
equipment as used by the existing-solid waste, recycling and disposal service, thereby making no
changes to the services which.would-have physical environmental impacts as defined by the
California Environmental Quality Act ("CEQA"); and, therefore, adoption of this ordinance is
not a "project" under CEQA and/or is categorically exempt pursuant'to Title 14,Chapter 3,
California Code;ofR'egulations ("CEQA Guidelines")-section 15301, as the operation,
maintenance, repair, permitting, leasing or licensing of existing public or private structures,
facilities or mechanical_equipment with negligible or no expansion of use; PR & RPR & R
NOW, THEREFORE, BEiT ORDAINED,6ythe Council ofthe'City of Petaluma as
follows:
Section 1. The above recitals are hereby incorporated as findings and declared to bejtrue and
correct.,
Section 2. The City Council approves anew Franchise Agreement between the,City of Petaluma
and Petaluma.Refuse and Recycling, incorporated (PR;&R), an affiliate of The Ratto Group.of
Companies, Inc. for,Solid Waste, Recyclable Materials, and Yard Trimmings Services and Street
Sweeping Services,and authorizes and directs the City Manager to execute•on behalf of the City
a Franchise,Agreement substantially in accord'once with Attachment 2 to this ordinance, which is
thereby'made a part:ofthis ordinance.for all purposes, andany related documents necessary and
appropriate to implement such new Franchise Agreement in accordance with the requirements of
the Petaluma City Charter and the Petaluma Municipal,Code, and in the interests of the City and
its citizens.
Section 3. The new Franchise+Agreement approved pursuant to this ordinance shall replace and
succeed the Franch ise Agreement as assigned to PR & R on January 4,2010, by Ordinance No.
i
2361, and such Franchise Agreement as assigned on January 4, 2010. shall terminate, subject to
this ordinance and any implementing documents related to the new Franchise.Agreement
executed on behalf of the parties pursuant to this ordinance.
Section 4. If any section, subsection;,sentence; clause, phrase or word of this ordinance is for
any reason held to.be.unconstitutional, unlawful or otherwise invalid by a court of competent
jurisdiction or preempted by state legislation, such decision or legislation.shall:not affect the
validity of the remaining portions of.thisordinance. The City Council of=theCity of Petaluma
hereby declares that it would have passed and adopted This ordinance and each and all provisions
thereof irrespective of the fact thatanyone or more of said provisions be declared
unconstitutional, unlawful"orotherwise invalid.
Section 5. This ordinance or a,synopsis of it shall be posted and/or published for the period and
in the manner required by City charter.
Section 6. This ordinance shall become effective thirty (30) days after the date of its adoption by
the Petaluma-City Council.
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