HomeMy WebLinkAboutStaff Report 4.D 02/05/2018DATE: February 5, 2018
Agenda Item #4.D
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Da St. o C D
F. Director, Public Works and Utilities Department
Leah G. W ` Zer, P.E. — Environmental Services Manager
SUBJECT: Resolution Approving Assignment of the Professional Services Agreement with
Total Waste Systems, an Affiliate of the Ratto Group of Companies, for the
Hauling and Disposal or Beneficial Reuse of City Biosolids, to Recology Sonoma
Marin upon Satisfaction of the Requirements of the Agreement
RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution Approving Assignment of
the Professional Services Agreement with Total Waste Systems, an Affiliate of the Ratto Group
of Companies, for the Hauling and Disposal or Beneficial Reuse of City Biosolids, to Recology
Sonoma Marin upon Satisfaction of the Requirements of the Agreement.
BACKGROUND
On January 18, 2018, the Ratto Group of Companies (TRG) requested by letter (Attachment 2)
that the City allow the assignment of the Professional Services Agreement ( "Agreement ") with
Total Waste Systems (TWS), an affiliate of The Ratto Group of Companies, Inc., for the Hauling
and Disposal or Beneficial Reuse of City Biosolids to Recology Sonoma Marin (Recology), a
subsidiary of Recology, Inc. Section 15 of the Agreement requires the City's written consent to
any assignment or transfer of the Agreement to a third party.
Recology and TRG have represented that they have entered into an Asset Purchase Agreement
(APA) whereby Recology is purchasing all of the assets of TRG, including TWS. Accordingly,
Recology appears to have acquired the assets necessary to perform the services under the
Agreement. TRG and Recology have agreed to provide the City a list of the TWS assets
transferring to Recology pursuant to the APA that will enable Recology to provide for continuity
of City biosolids services under the Agreement. The purpose of the list is to permit the City to
verify that Recology is acquiring the necessary assets to provide biosolids services.
TWS has provided biosolids services to the City since the execution of the Agreement on May
21, 2014. The term of the Agreement was extended to June 30, 2019 by Amendment 1 executed
on July 5, 2017.
DISCUSSION
A review by City staff concludes that Recology has the resources to perform the biosolids
services under the Agreement, and is capable of providing a level of service to the City that is
similar to or exceeds that provided by TWS. Final approval for assignment of the agreement
occurs after staff confirms that Recology meets all conditions specified in the Agreement,
including:
• Qualifications
• General Limitations and Requirements
• Submittals
It is recommended that the City Council approve the proposed resolution included as Attachment 1.
FINANCIAL IMPACTS
All existing provisions of the Agreement regarding compensation, invoicing and payment remain
unchanged with the proposed assignment. The proposed assignment is not anticipated to impact
the City budget.
ATTACHMENTS
1. Resolution, which includes:
• Exhibit A to Resolution: Amendment No. 2
2. January 18, 2M letter from TRG
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Attachment 1
RESOLUTION APPROVING ASSIGNMENT OF THE PROFESSIONAL
SERVICES AGREEMENT WITH TOTAL WASTE SYSTEMS, AN AFFILIATE OF
THE RATTO GROUP OF COMPANIES, INC., FOR THE HAULING AND DISPOSAL
OR BENEFICIAL REUSE OF CITY BIOSOLIDS, TO RECOLOGY SONOMA MARIN,
A SUBSIDIARY OF RECOLOGY INCORPORATED, UPON SATISFACTION OF THE
REQUIREMENTS OF THE AGREEMENT
WHEREAS, biosolids production is inherent in the process of wastewater treatment; and
WHEREAS, the City has incorporated technology and systems for appropriate management of
biosolids into the design and operation of the Ellis Creek Water Recycling Facility (ECWRF);
and
WHEREAS, as part of the implementation of a sound management plan for biosolids produced
at the ECWRF, the City intends to continue its existing practice of contracting for hauling and
offsite disposal or reuse of biosolids; and
WHEREAS, the City issued a Request for Proposals for the Hauling and Beneficial Reuse or
Disposal of City Biosolids on December 19, 2013, which was circulated to professionally
qualified firms for responses; and
WHEREAS, Total Waste Systems, a wholly owned subsidiary of The Ratto Group, was
awarded a Professional Services Agreement for Hauling and Disposal or Reuse of City Biosolids
for a period of three years through June 30, 2017 with an option to renew the agreement for one
additional two -year period up to June 30, 2019 based on satisfactory performance; and
WHEREAS, the agreement with Total Waste Systems was amended on July 5, 2017 to extend
service through June 30, 2019; and
WHEREAS, The Ratto Group and Recology Sonoma Marin, a subsidiary of Recology, Inc.,
have entered into an Asset Purchase Agreement whereby Recology Sonoma Marin is purchasing
all of the assets of The Ratto Group, including Total Waste Systems; and
WHEREAS, On January 18, 2018, The Ratto Group of Companies requested that the City
allow the assignment of the biosolids services agreement with Total Waste Systems, an affiliate
of The Ratto Group of Companies, Inc., to Recology Sonoma Marin; and
WHEREAS, Recology Sonoma Marin has the resources and capability to perform the biosolids
services under the biosolids services agreement; and
WHEREAS, the assignment of the agreement continues an existing City activity, and the
contractor's disposal and reuse methods employ existing sites which are permitted, approved and
in use, and the extension of the agreement does not constitute a "project" under the California
Enviromnental Quality Act ( "CEQA "); see Title 14, Chapter 3, California Code of Regulations
( "CEQA Guidelines "), Sections 15060(c) (2) and 15368.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City hereby:
1. Approves the amendment to assign the Professional Services Agreement, included as
Exhibit A, for Hauling and Disposal or Beneficial Reuse of City Biosolids to Recology
Sonoma Marin.
2. Authorizes the City Manager or his designee to execute said amendment on behalf of the
City of Petaluma.
M
Exhibit A to Resolution
AMENDMENT NO.2
TO PROFESSIONAL SERVICES AGREEMENT FOR
Hauling and Beneficial Reuse or Disposal of City Biosolids
THE AGREEMENT ( "Agreement ") entered into and effective as of May 21, 2014 by and
between the City of Petaluma, a California municipal corporation and charter city, ( "City ") and
Total Waste Systems ( "TWS ") as amended by Amendment No. 1 dated July 5, 2017 is hereby
amended in accordance with Sections 15 and 24 as follows:
1. The Agreement is hereby assigned to Recology Sonoma Marin, California Corporation
no. C4051107, ( "Recology ") and Recology hereby assumes all of the Consultant's rights
and obligations pursuant to the Agreement, effective upon execution of this Amendment
by authorized representatives of City, TWS and Recology, satisfaction of the condition in
Section 2 of this Amendment, and assignment of the Franchise Agreement between City
and Petaluma Refuse & Recycling, Inc. ( "PR &R ") dated March G, 2013, by PR &R to
Recology.
2. As a condition precedent to the assignment of the Agreement pursuant to this
Amendment taking effect, Recology agrees to provide the City verification of insurance
coverage of Recology for purposes of perfonnance of the Agreement in accordance with
paragraph F of Exhibit B -1 of the Agreement
3. Except as modified pursuant to this Amendment, all terms and conditions of the
Agreement remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the day of
, 2018.
CITY OF PETALUMA TOTAL WASTE SYSTEMS
By: By: "- '
John C. Brown Rick Powell
City Manager President
Date: Date: &ZI-ZM
1 of 2
Approved as to form:
By:
Eric W. Danly
City Attorney
Date:
RECOLOGY SONOMA MARIN
Michael J. SankyjacomV
President & CEO
Date: `��''' u rr�y 1-� % , % l 8
2 of 2
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Attachment 2
January 18, 2018
City of Petaluma
202 N. McDowell Blvd,
Petaluma, CA 94954
Attn: Dan St. John
Re: Request for Consent to Assignment
Professional Service Agreement for Hauling and Beneficial Reuse or Disposal of City
Biosolids between Total Waste Systems ( "Contractor-") and City of Petaluma (the
"Agreement ")
Dear Mr. St. John,
We wish to inform you that The Ratto Group of Companies Inc. ( "TRG "), Contractor's parent
corporation, and their affiliated companies have entered into an agreement to sell substantially all
their assets to Recology Inc. and its designated affiliates, who will continue TRG's operations
(the "Transaction ").
The purpose of this letter is to request that the City of Petaluma provide its consent for TRG to
assign the Agreement to Recology Sonoma Marin, a subsidiary of Recology Inc. Upon the
assignment of the Agreement, Recology Sononla Mai-in will be subject to the applicable terms
and conditions of the Agreement and will continue to perform the obligations thereunder.
Please do not hesitate to contact Ed Farewell, Recology Sonoma Marie's Vice President &
Group Manager, at 707 -695 -2726, or Rick Powell, TRG's General Manager, at 707 - 775 -9707
regarding this matter. TRG and Recology look forward to working with the City on assigning
the Agreement in accordance with the terms of the Agreement.
Your consent will become effective as of the closing of the Transaction and will have no effect
unless the closing of the Transaction occurs. We expect the Transaction to close in February
2018.
We appreciate your prompt consideration of this request.
Sincerely,
Rick Powell
President
The Ratto Group of Companies, Inc.
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