City of Culver City, California
Agenda Item Report
Meeting Date: November 12, 2013 Item Number: C-3
CITY COUNCIL AGENDA ITEM: Approval of a Five-Year Service Agreement with
Waste Management, Incorporated, with Two Additional Two-Year Extensions, for
Use of Its Simi Valley Landfill and El Sobrante Landfill for Disposal of the City’s
Municipal Solid Waste.
Contact Person/Dept.:
Damian Skinner/Public Works
Phone Number:
(310) 253-6421
Fiscal Impact: Yes [x] No [] General Fund: Yes [] No [x]
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [x] Date: _______________
Public Notification: (E-mail) Agenda and Meetings – City Council (11/05/13); (E-Mail)
Sustainability and Environmental Issues (11/05/13)
Department Approval:
Charles D. Herbertson (10/30/13)
City Attorney Approval:
Carol Schwab (by H. Baker) (11/05/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (11/05/13)
City Manager Approval:
John M. Nachbar (11/05/13)
RECOMMENDATION:
Staff recommends the City Council approve an agreement with Waste Management,
Incorporated to use its Simi Valley Landfill and El Sobrante Landfill to dispose of the
City’s municipal solid waste.
BACKGROUND:
The City of Culver City operates an exclusive residential and commercial refuse
collection and disposal service as a municipal enterprise. The Refuse and Recycling
Division (Sanitation) operates solely on revenues generated from the provision of
solid waste collection services to businesses and residences, grants, and the sale of
recyclable material. These revenues cover the costs of refuse collection, recycling
programs, public outreach, trash disposal at local landfills, as well as other municipal
services such as street sweeping and hazardous materials disposal.
Puente Hills Landfill
The Puente Hills Landfill (PHL) is owned and operated by the Los Angeles County
Sanitation District No. 2. PHL sits on a 1,365 acre site in the City of Industry and is
one of the largest landfills in America. It is permitted to receive 13, 200 tons per day
and has already received 127 million tons since its inception.
City of Culver City, California
Agenda Item Report
The Sanitation District bought PHL in 1970. At that time, a private company was
operating a small landfill on the property pursuant to a landfill use permit issued by
the Los Angeles County Regional Planning Commission. In 1983, District No.2
(District) applied for a new Conditional Use Permit (CUP) for 30 years of operating
capacity. The County approved a 10-year CUP and, prior to its expiration in 1993,
the District applied for the remaining 20 years of operating capacity. The County
approved a second 10-year CUP expiring in 2003. In 2002 the District applied for,
and received, a permit for the remaining 10-years of operating capacity on the
condition that the District will not seek any further requests for extension of the
disposal operation of the property beyond October 31, 2013. On October 31, 2013,
the PHL closed, although it still had 10 million tons (approximately 2 1/2 years
operating at full permitted capacity) of disposal capacity remaining.
DISCUSSION:
Culver City, along with many other Los Angeles County jurisdictions, utilized the
PHL to dispose of municipal solid waste (MSW) for many years. The closure of the
landfill will require other landfills in the region to absorb PHL’s 13,200 tons per day of
permitted capacity. In normal economic conditions, the surge in tons at private
landfills would drive their disposal fees up; however, the lack of trash generation due
to the economic downturn has kept landfill rates depressed. Instead, many private
landfills are operating below their permitted capacity so they must keep their
disposal fees low to attract waste haulers. Staff believes that as the economy
continues to improve, and trash generation rises to pre-2007 levels, the demand for
landfill space will increase along with their disposal fees. Thus staff believes it is
prudent at this time to enter into an agreement with a local landfill to secure a
competitive long-term disposal fee.
Culver City Municipal Code Section 3.07.085 provides an exemption from the formal
bidding process for personal and professional services, and only requires the award
of the contract be based upon competitive quotations whenever practical. Per
Section 3.07.085.C.1, this contract falls under the category of personal services,
which includes any “communication, gas, water, electric light and power service or
similar utility.” Landfill disposal fees are considered an extension of the sanitation
utility. Therefore, an informal bidding process was used in which staff requested
landfill operators to submit quotes for disposal fees over a 5-year period.
Staff solicited quotes from several local landfills for the disposal of Culver City’s
Municipal Solid Waste (MSW). All responding landfills require the City to exclusively
use their landfill to dispose of MSW as part of their quote terms. Waste destined for
conversion, composting, or recycling are exempt. City of Culver City, California
Agenda Item Report
The following are the informal quotations:
Price per Ton
Landfill Year 1 Year 2 Year 3 Year 4 Year 5
Transportation
Cost/Ton
1st Year
Total
Cost
Waste Management $27.07 $28.75 $29.61 $30.50 $31.42 $8.68 $35.75
Waste Connections $29.65 $30.84 $32.07 $33.35 $34.69 $10.54 $40.19
Republic Service $34.00 $34.68 $35.37 $36.08 $36.80 $8.28 $42.28
Puente Hills Landfill $38.41
$7.67 $46.08
All quotes include disposal fees over a 5-year term with the option of two, 2-year
extensions. Staff recommends entering into an agreement with Waste Management
since their quote provided the lowest combination of transportation and disposal
cost. If the City chooses to extend the agreement, their disposal fees would increase
by 3% year over year during the extension period. Transportation costs are based
on the fees outlined in a separate agreement with CR&R (refuse transportation
contractor).
The current disposal/transportation fee to utilize PHL is $46.08. Culver City disposes
an average of 34,000 tons per year. An agreement with Waste Management would
save the Sanitation Enterprise Fund approximately $351,000/year compared to
using the PHL; and save approximately $150,960/year compared to Waste
Connections, the landfill the City has used since 2011.
Previously, the City hauled MSW to PHL (25 miles away) using city-owned tucks
driven and maintained by City personnel. In 2011, the City opted to contract out that
portion of the enterprise to CR&R to achieve efficiencies and reduce cost. This
allowed the City’s MSW to be hauled greater distances and makes contracting with
more remote landfills viable.
Waste Management, Incorporated operates both the Simi Valley Landfill and the El
Sobrante Landfill. The Simi Valley Landfill is closest (41 miles) and will be the
primary destination for the City’s MSW. The El Sobrante Landfill is farther away (67
miles) and would be used only during the unlikely event that Simi Valley Landfill is
not available.
The recommended agreement is an exclusive 5-year agreement setting disposal
fees over the term. Either party to the agreement can terminate the agreement with City of Culver City, California
Agenda Item Report
30-days written notice. This will permit the City to terminate the agreement if more
favorable terms are available from another landfill. Conversely, the landfill operator
can do the same; however, that is unlikely as long as the landfill has excess capacity
as is the case with the Simi Valley Landfill.
FISCAL ANALYSIS:
There are sufficient funds appropriated in the Fiscal Year 2013-2014 Sanitation
budget (Fund 202) to cover the cost of this agreement for the first year. Future
funding will be appropriated in subsequent fiscal years through the annual budget
process.
ATTACHMENTS:
None.
MOTION:
1) Approve an agreement with Waste Management, Incorporated to use its Simi
Valley Landfill and El Sobrante Landfill to dispose of the City’s municipal solid
waste; and,
2) Authorize the City Attorney to review/prepare the necessary documents; and,
3) Authorize the City Manager to execute such documents on behalf of the City.