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Regular-Community Services # 49.
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| Board of Supervisors |
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| Subject |
| Authorize the submittal of a proposal to the City and County of Sacramento and the City of Folsom (Jurisdictions) for Organic Material Diversion Services, authorize negotiations with Northern Recycling, Inc., for construction of a regional compost facility and construction, demolition and inert facility at the landfill, and adopt Addendum to the Landfill Permit Revisions Subsequent EIR prepared for the project and authorize staff to file a notice of determination pursuant to CEQA. (No general fund impact) (Echiburu/Yazdani) |
| Recommended Action |
- Authorize the Director, Division of Integrated Waste Management, to respond to a Request for Proposals (RFP), in partnership with Northern Recycling, Inc., with a submittal to manage a portion of organic materials generated in the Sacramento region;
- Authorize the Director, Division of Integrated Waste Management, to sign a cover letter stating that it is the intent of Yolo County to, if selected, enter into negotiations with the jurisdictions to arrive at a satisfactory agreement, and if such is negotiated, to sign an agreement with any or all of the jurisdictions, and to sign other proposal-related documents as required;
- Authorize the Director, Division of Integrated Waste Management, to enter into negotiations with Northern Recycling, Inc., to finance, construct and operate a compost facility (CF) and construction, demolition and inert facility (CDIF) at the Yolo County Central Landfill; and
- Adopt Addendum #4 to the Landfill Permit Revisions Subsequent EIR prepared for the project and authorize staff to file a notice of determination pursuant to CEQA.
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| Strategic Plan Goal(s) |
Operational Excellence
Sustainable Environment |
| Reason for Recommended Action/Background |
These actions will allow the Department of Community Services to submit a proposal for the management of out-of-county organic materials from the Sacramento area. Securing contractual commitments to deliver organic materials will allow Northern Recycling Inc. to secure financing to construct a state-of-the-art compost facility (CF) and construction, demolition and inert debris facility (CDIF) at the landfill. These actions would also allow the Department of Community Services to enter into negotiations with Northern Recycling Inc. for the financing, construction, and operation of these facilities at the landfill.
Background
California has a statewide goal to divert 75 percent of waste from the Yolo County Central Landfill (YCCL) by 2020. In February 2007, the California Department of Resources Recycling and Recovery (CalRecycle) adopted Strategic Directive (SD) 6.1, which calls for a 50 percent reduction in the amount of organics being disposed in the landfills by 2020. Organic waste makes up approximately one third of the 35 million tons of waste that is currently landfilled in California. To aid in meeting the state wide 75 percent goal, Assembly Bill 1826 was passed in September 2014 requiring businesses, including state agencies that generate threshold amounts of organic waste per week to have organic waste recycling programs on or after April 1, 2016. To meet these goals, the Division of Integrated Waste Management (DIWM) has implemented a three-part strategy: 1) having an organic waste transfer facility, 2) an anaerobic composter facility, and 3) an in-vessel digester (liquid digester).
The Board of Supervisors approved the award of an agreement on July 12, 2016 to Northern Recycling, Inc. (Northern) to operate an organic waste transfer facility at the YCCL with the composting activities occurring at an off-site facility, services which they continue to provide. However, Northern has expressed interest in entering into a long-term agreement with Yolo County to finance, construct and operate a state-of-the art CF and CDIF at the landfill. This would entail ceasing composting operations at Northern’s Zamora Compost Facility and transferring the Yolo-Solano Air Quality Management District (YSAQMD) permit to the proposed facility, which is valued at approximately $4 million dollars.
Northern has stated that the obstacle to obtaining financing for such a facility is the need to have contractually committed material before the financial institutions will provide financing. A joint Request for Proposals has been released by the City and County of Sacramento and the City of Folsom, and they envision entering into multiple contracts to be able to secure sufficient diversion services for approximately 225,000 tons per year of organic waste, mostly green waste. Yolo County intends to propose to divert approximately 75,000 tons per year of this material.
In anticipation of entering into negotiations with Yolo County, Northern has prepared an Authority to Construct application for submittal to the Yolo Solano Air Quality Management District (YSAQMD) and a Technical Report for submittal to the Regional Water Quality Control Board (RWQCB) to obtain Waste Discharge Requirements for a compost facility. Having already undertaken these steps towards full permitting of a facility, Northern would like to enter into negotiations with Yolo County on a long-term agreement simultaneously with the submittal of a proposal to divert Sacramento regional organic material. Northern is also covering the expense of preparing the proposal for submittal to Sacramento. The DIWM will pay the fees to the RWQCB for coverage under the General Compost Permit, anticipated to cost approximately $6,000.
The County’s anaerobic composter facility will prioritize the receipt of food waste and would complement the proposed compost facility, which would prioritize green material. The County’s liquid digester would accept liquid food waste. Additionally, the compost facility would be able to accept the material excavated from the anaerobic composter cells and provide final curing before it is available as a soil amendment. These facilities will provide complementary services and secure different revenue streams.
The proposal has a submittal date of May 6, 2019. There is no bidder’s bond associated with the proposal submittal; thus, no risk if Yolo County is selected as a potential recipient of an agreement with Sacramento but ultimately does not execute the agreement. The process envisioned by the Sacramento area agencies is to select multiple potential partners from the proposals received and to enter into negotiations to arrive at a sufficient number of agreements to assure long-term diversion services. Therefore, negotiations with Northern can proceed while the proposals are being evaluated by Sacramento and if an agreement between Yolo County and Northern fails to materialize there is no penalty for not entering into an agreement. The jurisdictions anticipate selected proposers taking the negotiated contract to their approving governing bodies before the end of December 2019.
Yolo County and Northern attempted to negotiate a similar agreement in 2013, which was not successful due to internal disagreements between the partners that make up Northern, which are four long-standing companies that provide waste management services in four Northern California communities. However, the landscape has changed with respect to available options and the regulatory environment and Northern has proposed a new willingness to proceed with negotiations.
The RFP requires that all Proposers must indicate in a cover letter their willingness to sign an agreement with any or all of the jurisdictions. Authority is requested to be granted to the Director, Division of Integrated Waste Management, to sign a statement to this effect:
As stated in the RFP (Section 4.1), it is our understanding that final agreements will be negotiated following the final selection of the proposers. If the jurisdictions (County and City of Sacramento and the City of Folsom) are unable to negotiate a satisfactory agreement with a selected firm, they may undertake negotiations with the next rated firm and so on until it has obtained satisfactory agreements.
If selected, Yolo County has the intention of entering into good-faith negotiations with the jurisdictions to arrive at a satisfactory agreement, and therefore, please consider this an expression of our willingness to sign an agreement with any or all of the jurisdictions.
CEQA Compliance
An Addendum to the Yolo County Central Landfill Permit Revisions Subsequent EIR, which was certified by the County on April 18, 2006, has been prepared for this project (Addendum #4).
CEQA Guidelines Section 15164 provides that the Lead Agency "shall prepare an Addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred." Pursuant to Section 15164(e) a brief explanation is provided in the Addendum documenting the County's decision that preparation of a subsequent EIR is not required. The Guidelines go on to state that: 1) the addendum need not be circulated, but can be included in or attached to the Final EIR (Section 15164(c)), and that 2) the County must consider the addendum with the Final EIR (Section 15164(d)).
Addendum #4 demonstrates that the circumstances, impacts, and mitigation requirements identified in the Yolo County Central Landfill Permit Revisions Subsequent EIR remain substantively unchanged by the proposed project described herein, and supports the finding that the proposed modifications do not raise any new issues and do not cause the level of impacts identified in the previous EIR to be exceeded. |
| Collaborations (including Board advisory groups and external partner agencies) |
| The proposal was presented to the Waste Advisory Committee (WAC) on February 28, 2019. One WAC member noted that increased truck traffic could result in increased road damage and repair costs and asked if that was considered. It was stated by the Division Director that if Yolo County were successful in obtaining additional organic tons the Integrated Waste Management Division would confer with the Public Works Division as to an appropriate funding assistance for road maintenance. There were no other comments from WAC members on the proposal. |
| Competitive Bid Process |
| The proposal is to negotiate an agreement that is mutually beneficial to both the County and Northern, rather than employ a competitive bid process. This will allow the YSAQMD permit to be transferred from Northern’s Zamora Compost Facility, a significant cost savings. Additionally, this approach is consistent with the recommendation of KNN, a public finance consulting firm, that the County should enter into a public private partnership that would not require the Community Services Department to borrow funds for such a large capital project, but to preserve the borrowing capacity for other mandated capital expenses, such as closure and construction of landfill cells. The envisioned public/private partnership results in each side providing resources and reaping benefits. |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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Explanation (Expenditure and/or Revenue) |
| Further explanation as needed: |
Fiscal impact (see budgetary detail below)
The Integrated Waste Management Division will pay fees associated with the submittal of a Notice of Intent and Technical Report to the Regional Water Quality Control Board, valued at about $6,000. The source of these funds is the Sanitation Enterprise Fund and there is no General Fund impact.
It is anticipated that the County will receive $10/ton of organic material delivered to the landfill, with the remainder of the gate fee paid to the Northern. Given a 72,000 ton—per-year contract, this will increase revenue by $720,000 per year, with about 45% of that amount being used to cover incremental cost increases associated with the CF and CDIF.
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