Loading...
10-24-18 AD facility responseCity of San Luis Obispo, City Administr ation, 990 Palm Street, San Luis Obispo, CA, 93401- 3249, 805.781.7 114, slocity.or g Date: To: From: Via: Subject: Enc: October 29, 2018 Mayor/Council Candidates Aaron Floyd, Deputy Director – Water Derek Johnson, City Manager DJJ Response to Questions Regarding Anaerobic Digestion Facility Attachment A- City of SLO Contract with San Luis Garbage Company On October 23, 2018 the City received a request for information regarding organic waste recycling and the operation of Hitachi Zosen Inova’s anaerobic digestion facility. The corresponding questions and request for information are as follows: 1.Could you please send me a copy of the contract with the firm? The City does not have a contract with the Hitachi Zosen Inova, who owns and operates the new anaerobic digestion facility. However, the City does have a long-term contract with San Luis Garbage Company for hauling and disposal associated with the City’s organic waste (green and food waste) program. Council agenda reports related to this long-term contract can be found linked below. The signed contract can be found in Attachment A. 8/18/15 meeting date – Solid Waste Base Year Rate Application from SL Garbage 9/15/15 meeting date – Resolution of intent to grant SL Garbage Co. franchise 10-6-2015 meeting date – Ordinance intro for granting franchise to SL Garbage 10/20/15 meeting date – Ordinance granting a franchise to SL Garbage Co… 2.Did the city go out to public bids for this work? If so, when and who responded? If not, why not? The City of San Luis Obispo is not under contract with Hitachi Zosen Inova and therefore would not have been involved with the bidding process for this project. The anaerobic digestion facility will receive organic waste from several local cities who are under contract with waste hauling companies owned by Waste Connections Inc. Waste Connections is also the parent company of San Luis Garbage Company. 3. What is the term of the contract? While not under contract with Hitachi Zosen Inova, the City’s contract with San Luis Garbage Company was executed in 2015 and is for a 20-year duration. Tipping fees on green and food waste are paid as part of the City’s solid waste rates and help fund operations related to composting or digestion of this material. 4. Will the contract involve an increase in garbage rates to cover the expense of its installation and operation? If so, what is the status of that rate increase which I understand would have to be approved by the city? Rates required to haul and dispose of organic waste material are approved by the City Council every three years. These rates are subject to proposition 218 and can be protested by ratepayers. In January 2016 solid waste rates were increased 5.25%. Organic diversion programs accounted for roughly 47% of this increase (2.35% total). Additional background information With the suspension of the green waste composting facility at Cold Canyon Landfill in 2010 due to odor violations, San Luis Garbage Company submitted two alternative methods for recycling green waste. At the July 19, 2011 City Council Meeting, City Council selected to utilize green waste for alternative daily cover at Cold Canyon Landfill rather than incurring the cost and environmental impacts of trucking the material to Engle and Gray in Santa Maria. In 2014, Assembly Bill 1826 was enacted which established mandatory organics recycling across California. With the bill taking effect in 2016, and in order to address changing regulations regarding organics disposal, San Luis Garbage Company designed a two-phase plan for the long- term management of organic waste. The first phase included expansion of the residential green waste program to include food waste. Because of the introduction of food waste into the green waste stream, the material would no longer be permitted for use as alternative daily cover and would need to be transported to the Engle and Gray composting facility in Santa Maria. The second phase required San Luis Garbage Company to enter into an agreement with Hitachi Zosen Inova (HZI) for construction of an anaerobic digestion facility. In order to secure the long-term financing required for HZI to build an anaerobic digestion facility, San Luis Garbage Company needed to secure contracts with local cities that would secure a waste stream to the facility for a 20-year period following construction. On August 18, 2015 City Council approved a three-year rate increase which allowed for a 2.35% increase related to organics recycling. On October 6, 2015 an ordinance was introduced to the City Council requesting a 20-year food and green waste franchise be adopted between the City and San Luis Garbage Company. On October 20, 2015, Ordinance No. 1624 (2015 Series) was adopted, thus extending the food and green waste contract to facilitate the long-term recycling of food and green waste within San Luis Obispo. Attachment A