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CC - CONSENT ITEM: Approval of a Commingled Recyclables Processing Agreement with CR&R Incorporated.
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Meeting Date: October 28, 2024
Contact Person/Dept: Sean Singletary/Public Works
Phone Number: (310) 253-6457
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (10/23/2024)
Department Approval: Yanni Demitri, Director of Public Works/City Engineer (09/25/2024)
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RECOMMENDATION
Staff recommends the City Council approve a Commingled Recyclables Processing Agreement with CR&R Incorporated.
BACKGROUND/DISCUSSION
Public Works Environmental Programs & Operations Division (EPO) is the exclusive provider of refuse, recycling and organics collection, construction and demolition (C&D) collection, and transfer services to residential and commercial customers. EPO recovers its costs of operations through refuse rate charges to customers. These revenues cover the costs for refuse collection, disposal, recycling programs, and public outreach. Sanitation operations are 100% supported by enterprise fund revenues and are not dependent upon other funds or tax contributions.
The City’s customers generate approximately 500-650 tons of mixed recycling materials monthly. Materials are collected by refuse vehicles and deposited at the City’s Transfer Station, where they are weighed and loaded onto trucks for transport to ultimate processing locations outside of the City.
Since August 1, 2022, the recycled materials collected by the City have been transported to the Puente Hills Materials Recovery Facility (PHMRF) for processing. In July 2022, the City entered into a Commingled Recyclables Processing Agreement (CRPA) with Arakelian Enterprises Inc., doing business as Athens Services, to accept, sort, recycle, and market these materials through December 2025. Recently, Athens has experienced several equipment issues, leading to delays in material delivery to their facility. This disruption has increased transportation costs and created operational challenges by requiring the City to hold materials on-site for longer periods.
As a result of these challenges, staff has sought out other local recyclers to establish a contingency plan in case Athens continues to experience equipment failures. Staff received pricing from two other recycling processors: Waste Management and CR&R. Waste Management operates a recycling processing facility in Sun Valley, California, while CR&R partners with Potential Industries, located in Wilmington, California.
After reviewing the two proposals, staff recommends establishing an agreement with CR&R. Their pricing is more favorable, compared to both the City’s existing agreement with Athens and the proposal from Waste Management. Additionally, the cost of transportation to Potential Industries is favorable due to its proximity to Culver City compared to the Athens or Waste Management locations. Given the volatility of the recycling market, which has led to the closure of several local recyclers in recent years, staff believes it is in the City’s best interest to establish a long-term partnership with a reliable recycler to secure processing capacity.
Culver City Municipal Code (CCMC) Section 3.07.065.A states that the City may award purchase orders and contracts in any amount for general services provided, the purchase order or contract is based upon competitive quotations. CCMC Section 3.07.065 <https://codelibrary.amlegal.com/codes/culvercity/latest/culvercity_ca/0-0-0-74501>.C.1. defines general services to include "any communication, gas, water, electric light and power service or similar utility service.” Since recyclables processing and waste disposal function as a utility service, staff solicited competitive quotations to develop its recommendation in accordance with CCMC requirements for the procurement of general services.
FISCAL ANALYSIS
The cost for commingled recyclables processing is approximately $450,000 annually. The pricing structure for CR&R's CRPA services is similar to the one Athens currently uses to charge the City, with monthly rates varying based on the weighted value of the various commodities recovered by Potential Industries, minus the facility's processing costs. According to CR&R’s proposal, the City would benefit from a reduction in expenses for each ton delivered. Sufficient funding is included for these services in the Adopted Budget for Fiscal Year 2024-2025 within the Environmental Programs and Operations Division’s operating budget in Account No. 20260410.615100 (Transfer Station Admin - Refuse Disposal Services Trash) which can be found on page 433 of the budget book. These services are a Refuse Fund (Fund 202) expenditure and are not borne by the General Fund. Funding for subsequent years of the agreement will be requested annually as part of future fiscal year budgets.
ATTACHMENTS
None.
MOTIONS
That the City Council:
1. Approve a Commingled Recyclables Processing Agreement with CR&R Incorporated;
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.