MEMBER AGENCIES - RethinkWaste · transaction proceeds (as verified by 3rd party auditors, Kestrel Verifiers). While there is no direct financial ... SBWMA BOD PACKET 06/27/2019 AGENDA

MEMBER AGENCIES ATHERTON * BELMONT * BURLINGAME * EAST PALO ALTO * FOSTER CITY * HILLSBOROUGH * MENLO PARK * REDWOOD CITY

* SAN CARLOS * SAN MATEO * COUNTY OF SAN MATEO * WEST BAY SANITARY DISTRICT

AGENDA

1. Call to Order/Roll Call

2. Public CommentPersons wishing to address the Board on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes. If thereare more than five individuals wishing to speak during public comment, the Chairman will draw five speaker cards from those submitted tospeak during this time. The balance of the Public Comment speakers will be called upon at the end of the Board Meeting. If the item youare speaking on is not listed on the agenda, please be advised that the Board may briefly respond to statements made or questions posedas allowed under The Brown Act (Government Code Section 54954.2). The Board's general policy is to refer items to staff for attention, orhave a matter placed on a future Board agenda for a more comprehensive action or report and formal public discussion and input at thattime.

3. Executive Director’s Report p. 5

4. Approval of Consent CalendarConsent Calendar item(s) are considered to be routine and will be enacted by one motion. There will be no separate discussion on theseitems unless members of the Board, staff or public request specific items be removed for separate action. Items removed from theConsent Calendar will be moved to the end of the agenda for separate discussion.A. Approval of Minutes from the May 23, 2019 Board of Directors Meeting ACTION p. 35 B. Resolution Approving an SBWMA Environmentally Preferable Purchasing and Practices Policy ACTION p. 43C. Resolution Authorizing the Executive Director to Execute a not-to-exceed $128,620 Contract with Tanner

Pacific for Construction Management services at the Shoreway facility for FY19/20 ACTION p. 51 D. Resolution Approving Findings of the Annual Financial and Operational Audits ACTION p. 67 E. Resolution Approving a Contract Amendment to the Agreement with Stradling Yocca Carlson & Rauth for Bond

and Disclosure Counsel Services for the SBWMA’s Issuance of 2019 Solid Waste Revenue Bonds ACTION p. 81

F. Resolution Approving Amendment 1 to the Agreement with Recology for Relocation of Organics ExtrusionRecovery System & Purchase of Organics Polishing System ACTION p. 85

G. Resolution Approving Reallocation of Budgeted Mid-Year Reserves ACTION p. 89 H. Resolution Approving a Change in the Deductible Amount to the Shoreway Environmental Center’s

Property/Fire Insurance Policy for FY19/20 ACTION p. 93

5. Administration and FinanceA. Resolution Approving the FY19/20 SBWMA Operating Budget and 5-Year Capital Improvement Plan

ACTION p. 99 B. Staff Update and Review of 2020-2024 Long-Range Plan p. 129

6. Collection and Recycling Program Support and ComplianceA. Resolution Approving Amendment One Modifications to the Model Amended and Restated Recology Franchise

Agreement ACTION p. 135Presentation by Matt Fabry, C/CAG Countywide Stormwater Program Manager

BOARD OF DIRECTORS THURSDAY, June 27, 2019 at 2:00 p.m.

San Carlos Library, Conference Room A/B 610 Elm Street, San Carlos, CA 94070

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MEMBER AGENCIES ATHERTON * BELMONT * BURLINGAME * EAST PALO ALTO * FOSTER CITY * HILLSBOROUGH * MENLO PARK * REDWOOD CITY

* SAN CARLOS * SAN MATEO * COUNTY OF SAN MATEO * WEST BAY SANITARY DISTRICT

7. Shoreway Operations and Contract ManagementA. Approving a Contract with BHS, Inc. to 1. replace and install optical sorter hardware and software and 2.

replace existing sort system electrical controls and software for a not-to-exceed amount of $770,500 ACTION p. 183

B. Resolution Approving a Not-to-Exceed Contract for $717,950 with BHS, Inc. for the Design & Engineering ofPhase I MRF Upgrades Project ACTION p. 187

C. Resolution approving payment of $77,420 for MRF Debris Roll Screen replacement and installation ACTION p. 193

D. Review of TAC direction regarding agency options as they relate to the current Shoreway OperationsAgreement with South Bay Recycling which expires on December 31, 2020 p. 199

8. Public Education and OutreachA. Staff Update on the Public Spaces Pilot Program – Full Report p. 205B. Presentation by 6th Grader Christine Chang on her Metal Straws initiative in San Carlos p. 207

9. Informational Items Only (no action required)A. Legislative Session Update p. 217B. 2019 Finance and Rate Setting Calendar p. 223C. Check Register Detail for May 2019 p. 225D. Technical Consulting Contracts March16 -May 2019 p. 241E. Potential Future Board Agenda Items p. 243

10. Board Member Comments11. Adjourn


3

EXECUTIVE DIRECTOR’S

REPORT

Agenda Item 3



________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM 3 - p1

3

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: June 27, 2019 Board of Directors Meeting Subject: Executive Director’s Report Staff and Agency partners are currently operating in a period of extreme high volume supporting numerous critical path projects, programs and facility initiatives since our last Board meeting. Here are highlights:

1. Administration & Finance: a. Bond Refunding/Refinancing—11 of 12 Member Agencies have approved; market dates now set! Staff and the Finance Team have now provided the intense, final technical and legal reviews of the issuance docs. On May 30th, the SBWMA’s executive team (myself, John Mangini and Hilary Gans) provided comprehensive presentations to senior rating analysts from Moody’s and Standard & Poors to establish the Agency’s ratings for the bonds sale. Also attending and providing significant support to this process was Board Chair Jay Benton, Agency Attorney Jean Savaree and the KNN team. Thank you, Jay and Jean! The Agency’s financial profile, operational statistics and organizational structural review were presented in two, three-hour sessions at the Shoreway facility with accompanying site tours. These two firms evaluate the Agency’s financial position, market strengths and establish our ability to pay back our new debt obligations in this transaction. The higher the rating, the better the terms!

We have just learned that S & P assigned the SBWMA an A+ rating and Moody’s assigned an A1 rating. KNN advised staff that both ratings are considered top-tier in our industry and is directly indicative of the Agency’s strong Board leadership, staff management and excellent contractor performance over the years. Both rating agencies acknowledged the SBWMA’s strong financial position, responsible payment history, strong Board and staff leadership, major contract stability (franchise agreements, disposal contract, etc.), and the SBWMA’s joint powers authority/materials flow control model. (S&P and Moody summaries are in Attachment A). This confirmation is about as good as it gets folks so thank you to each of you who help move our program forward!

“Green Bonds”: At Board and Finance Committee request, the 2019A Bonds will be proudly marketed as “Green Bonds” thanks to the vigorous environmental benefits that our Agency will deliver with the transaction proceeds (as verified by 3rd party auditors, Kestrel Verifiers). While there is no direct financial benefit to this rating, by marketing our bonds as “Green Bonds” the SBWMA is expected to indirectly benefit from this certification by creating much more favorable selling conditions in the bonds marketplace because many “Green Fund” fund managers are required to invest only into qualified issuances, thereby, creating a more favorable “supply/demand” scenario for the Agency. Our Finance advisors, KNN, have also advised staff that our Green Bond issuance is a first for the solid waste industry and in our County. (See Green Bond summaries in Attachment B). Once again, the SBWMA proudly leads the way!


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One final note-on June 4th, the County of San Mateo’s BOS provided the 11th approval of the Bond issuance.

Here are the (very few!) remaining milestones:

1. June 24: Final Bond Pricing established—rates are locked 2. June 27th: SBWMA Board Meeting. Staff reports out on transaction results to date. 3. July 15th: Bond Closing. Refunding transaction complete Series 2019A Bonds secured. 4. September 1st: Final 2009A Bond Maturity Date 2009A Bonds are paid off. Transaction is complete,

b. 2020 Long Range Plan (2020 Plan) Update—New Period: 2020-2024 Today’s Board meeting will represent the 10th input session in the development of this crucial legacy document. The 4th draft version is Agenda item 5B for your review and discussion. Based on Board feedback, Staff expects to bring a final 2020 Plan document back to the Board for its final consideration on September 26th (or November 21st as a fallback date) to meet a desired January 1st, 2020 implementation date. We hope that you find this highly abbreviated 37-page version to be substantive and a bit easier read that the 250-page (including attachments) 2015 plan. I must acknowledge our Management Analyst extraordinaire, Grant Ligon’s, extraordinary efforts in managing the process, working closely with the graphic designer to meet all project deadlines, as well as writing and organizing the bulk of this document. This was one heck of a lift for Grant, considering he just joined the RethinkWaste team on March 4th. Sure glad you joined our team Grant!

c. Administrative/Financial Services Contract Transition--Effective July 1, 2019 Along with his many other responsibilities, Sr. Finance Manager, John Mangini, continues to work closely with the terrific San Carlos and Redwood City finance teams to ensure a responsible and orderly transfer of these vital administrative services over to Redwood City per the new contract. John is working with each team’s weekly punch list to execute the incremental steps necessary to facilitate this transition. We’re currently working on the new banking system procedures and performing systems checks. With John at the helm, we’re in very good shape.

d. Major Grants—Game on! Although formally approved on April 30th, Staff is working with CalRecycle to facilitate the actual $3M funding transference per the terms of the grant agreement. We’re right on track to date. On June 4th, the San Mateo County Board of Supervisors formally approved the Office of Sustainability’s $1M grant for the OREX Organics-to-Energy press and Staff is working on the actual funding transference per the terms of that agreement too. Many thanks to SBWMA Board member and BOS President Carole Groom, the OOS team of Jim Eggemeyer, SBWMA TAC member Danielle Lee and SBWMA Alternate TAC member Gordon Tong, for their vision and financial commitment to staunchly support this project. It’s a real privilege working with your team as we jointly advance the green movement in our County. United we stand! Led by the endless energy of Sr. Facilities and Contract Manager, Hilary Grans, Staff is actively working with our new Grant contractor, Momentum, (recently renamed from “The Grant Farm”) to secure sales tax exemptions on our anticipated new (big-ticket!) recycling processing equipment, as well as aggressively seeking additional funding opportunities for our anticipated full-scale Organics-to-Energy scale-up in 2022-2023. As Board Member Bill Widmer once said, “if other people want to give us money, we’ll gladly accept.”

2. Committee Updates:

a. Finance Committee Meeting (June 12th – conference call)



At Executive Committee direction, the Finance Committee was convened to review FY19/20 Shoreway site property and fire insurance premium deductibles options. Committee members provided consensus support (via straw poll) for the Board to consider (today’s Agenda item 4H) adjusting the FY19/20 Property and Fire Insurance policy deductible levels from $500,000, which was approved on May 23rd, to $1,000,000. The Committee also expressed a strong desire to direct the anticipated $114k in annual premium savings into the SBWMA’s Emergency Reserve account balance. The Emergency Reserve currently has $4.5M balance.

b. Legislative/Regulatory Committee (June 4th--Executive Committee Mtg) Agency co-sponsored AB 1509 (Mullin) will next be heard in the Senate Environmental Quality Committee on July 3rd. Staff has been working with EEC and co-sponsors and authors on new language to further define the scope of the bill. Per Senate staff direction, new amendments are being made before the bill’s next hearing. Agenda item 9A provides details of bills that our legislative advocate, EEC, is currently tracking on our behalf.

c. Pub Ed/Outreach Subcommittee (no meeting held)

d. Technical Advisory Committee (June 6) Agency contractor Ascend Environmental reported out on the upcoming CalRecycle annual reporting process that they perform in support of our ten member agency cities. A draft of the Long Range Plan (2020 Plan) was reviewed and input was provided to staff. The highly-anticipated SB 1383 regulations and implementation timeline received spirited discussion. Senior Sustainability Coordinator Eun-Soo Lim presented San Mateo County Office of Sustainability’s proposed Disposable Food Service Ware Ordinance. Although this exciting waste reduction/source reduction initiative initially targets food service businesses in the unincorporated County areas, it is hoped that all 10 other SBWMA member agencies (West Bay Sanitary District does not apply) immediately adopt similar ordinances to create a plastic disposable food ware free zone throughout our County. You can learn more with this link: https://www.rethinkwaste.org/uploads/media_items/060619-tac-8-disposable-food-service-ware-ordinance-ppt.original.pdf e. Zero Landfill Committee (No meeting held)

3. Collection and Recycling Program Support and Compliance: a. Franchise Agreement Member Agency Approvals—Our 11th Approval!

The County of San Mateo approved their Franchise Agreement on June 4.

b. Franchise Agreement “Amendment One” Process—June Board Meeting See agenda item 6A for more info.

4. Shoreway Operations and Contract Management

a. Organics-to-Energy Project The CalRcycle-funded OREX Press that previously resided at Recology’s San Francisco facility was transferred by Anergia to the Shoreway Transfer station in May. Staff, SBR and technical partner, Anergia, are in full throttle mode to prep the site, reassembling and installing unit, and ordering/installing the necessary ancillary equipment to be fully operational by calendar year-end. Really exciting times ahead!


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5. MRF-Phase I improvement: With Board approval today (Agenda items 7A, 7B and 7C), Staff, SBR management and Bulky Handling Systems (BHS) are also in full “go” mode with the massive Design and Engineering project for MRF-Phase 1 set of projects, as well as other necessary routine equipment replacement projects due to normal wear and tear and electronic obsolescence. To handle the significant influx of projects, we have initiated an internal Facilities Procurement and CIP team to track all aspects of these multiple projects. The team will continue to meet weekly and consists of myself, Hilary, Grant, Kai Ruess (agency attorney) and, when necessary, John Mangini. A Construction Management contract with Tanner Pacific is also on today’s agenda for Board consideration (Agenda item 4C) to provide critically important services in support of these numerous projects.

Whew! Respectfully submitted,

Joe La Mariana Executive Director

Attachments: Attachment A - Standard & Poors and Moody’s Rating Summaries Attachment B - Green Bonds—Second Party Verification Report (Kestrel Verifiers)


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Rating Action: Moody's assigns A1 to South Bayside Waste Management Authority, CA's Series 2019A and2019B solid waste enterprise revenue bonds

14 Jun 2019

New York, June 14, 2019 -- Moody's Investors Service has assigned an A1 rating to South Bayside Waste Management Authority, CA'sSolid Waste Enterprise Refunding Revenue Bonds (Shoreway Environmental Center), Series 2019A (Non-AMT) and Solid WasteEnterprise Revenue Bonds, (Shoreway Environmental Center), Series 2019B (AMT). The par amount of the Series 2019A bonds isestimated at $35.2 million, with the Series 2019B bonds expected to be issued in the approximate amount of $18.6 million. The Series2019A refunding bonds will refinance all of the Authority's outstanding long-term obligations, which consists of the Series 2009A solidwaste enterprise revenue bonds. Moody's has affirmed the A1 rating on the Series 2009A bonds of which approximately $44.7 millionare outstanding.

RATINGS RATIONALE

The A1 rating reflects stable, somewhat narrow debt service coverage levels enhanced by the presence of a rate stabilization fundexpected to equal over one-year of annual debt service at the time of closing, a wealthy service area with modest growth, and tippingfees that remain affordable and competitive for the area. The rating also incorporates the Joint Powers Agreement with the authority's 12members, under which they are obligated to direct all solid waste, recyclables and other materials to the authority, providing close to80% of the authority's waste stream. These agreements have recently been renewed until 2034 with 11 of the 12 members. Should amember withdraw, their obligation for debt service continues as along as bonds are outstanding, requiring a proportional payment.

Collection services, operations of the Shoreway Environmental Center material recovery facility, and disposal services are all providedunder outside contracts, somewhat reducing uncertainty on future operational costs. The rating, however, takes into account thevulnerability of the authority's revenues to potential competition for non-franchise waste disposal as well as declines in market prices forrecycled materials, which accounted for 15% of operating revenues in fiscal 2018. Recycling revenues have generally declined, with theprice for mixed paper falling especially sharply, by 90%, following China's import ban in October 2017.

RATING OUTLOOK

Outlooks are usually not assigned to local government credits with this amount of debt outstanding.

FACTORS THAT COULD LEAD TO AN UPGRADE

- Sustained higher levels of annual debt service coverage in line with projections of around two times

- Significant and sustained increase in cash reserves or additions to rate stabilization fund

- Increase in volumes and price of recycled materials

FACTORS THAT COULD LEAD TO A DOWNGRADE

- Material decline in debt service coverage

- Erosion of cash reserves or significant draws on rate stabilization fund

- Continued and significant declines in recyclable sale revenue

- Substantial drop in waste volumes

LEGAL SECURITY

The revenue bonds are secured by net revenues of the authority's regional solid waste management system as defined under theIndenture. The bonds are additionally secured by a reserve fund, funded from the existing 2009A bonds' debt service reserve fund and aportion of bond proceeds and equal to the traditional, three-pronged test. The rate covenant requires that rates be set sufficient toprovide 1.4x debt service in any calendar year. Of note, the authority is working toward moving their current June 30th fiscal year to acalendar year to coincide with this covenant. The Indenture also allows for the maintenance of a rate stabilization fund but does notestablish a minimum balance requirement for this fund. The additional bonds test requires 1.4x coverage of the highest amount ofprincipal and interest on all outstanding parity obligations, but includes an allowance for additional revenues from rate increases.

USE OF PROCEEDS

The Series 2019A refunding bonds will refund the $44.7 million in outstanding Series 2009A bonds for net present value savings ofclose to 18% inclusive of a six-year extension in debt repayment. . The Series 2019B bonds will finance $15.6 million in improvements tothe material recovery facility including optical and robotic sorting equipment, provide $1.25 million toward an organics-to-energy pilotproject, and finance $3.17 million in other improvements to the Shoreway Facility.

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 3 ATTACHMENT A - p1



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PROFILE

South Bayside Waste Management Authority is a joint powers authority formed to own, finance, and administer the solid waste facilitieson behalf of its member agencies and provide solid waste and recycling collection services within its service area. Member agenciesinclude the cities of Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Hillsborough, Menlo Park, Redwood City, San Carlos,San Mateo; West Bay Sanitary District; and portions of unincorporated San Mateo County. The Authority's board consists of one electedofficial from each member agency, and no members individually control any of the Authority's activities. Accounting services areprovided by the City of San Carlos.

Under franchise agreements with Recology to collect solid waste and recyclable materials, each member agency sets service feescharged to their customers at a level sufficient to fund their share of the combined operation. Recology collects these service fees andremits a portion of them to the Authority for the processing and disposal of collected materials. South Bay Recycling is paid by theAuthority to operate its facilities (the Shoreway Environmental Center in San Carlos). SBR also collects fees from self-haulingcustomers, which are remitted to the Authority. Compensation by the Authority of these two contractors is adjusted annually basedprimarily on cost indices. The Authority also pays directly for disposal and processing of solid waste and organic materials to variousvendors.

METHODOLOGY

The principal methodology used in these ratings was US Municipal Utility Revenue Debt published in October 2017. Please see theRating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relationto each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which theratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a supportprovider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and inrelation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. Forprovisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and inrelation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transactionstructure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. Forfurther information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or ratingreview.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued therating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Helen Cregger Lead Analyst

Regional PFG West Moody's Investors Service, Inc.

One Front Street Suite 1900

San Francisco 94111 US

JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

William Oh

Additional Contact Regional PFG West


Releasing Office:

Moody's Investors Service, Inc. 250 Greenwich Street

New York, NY 10007 U.S.A


_________________________________________________ SBWMA BOD PACKET 06/27/2019




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Summary:

South Bayside Waste ManagementAuthority, California; SolidWaste/Resource Recovery

Primary Credit Analyst:

Edward R McGlade, New York (1) 212-438-2061; [email protected]

Secondary Contact:

Alexandra Rozgonyi, Centennial (1) 303-721-4824; [email protected]

Table Of Contents

Rationale

Outlook

www.spglobal.com/ratingsdirect June 14, 2019 1_________________________________________________ SBWMA BOD PACKET 06/27/2019



Summary:

South Bayside Waste Management Authority,California; Solid Waste/Resource Recovery

Credit Profile

US$35.245 mil solid waste enterprise rfdg rev bnds (shoreway envir ctr) ser 2019A due 09/01/2042

Long Term Rating A+/Stable New

US$18.575 mil solid waste enterprise rev bnds (shoreway envir ctr) ser 2019B dtd due 09/01/2031

Long Term Rating A+/Stable New

South Bayside Waste Mgmt Auth SLDWSTRES

Long Term Rating A+/Stable Affirmed

Rationale

S&P Global Ratings assigned its 'A+' long-term rating to the South Bayside Waste Management Authority, Calif.'s

series 2019A solid waste enterprise refunding revenue bonds and series 2019B solid waste enterprise revenue bonds.

In addition, we affirmed our 'A+' rating on the authority's outstanding bonds. The outlook is stable.

The rating reflects our views of the solid waste system's exceptionally strong enterprise risk profile assessment,

characterized by its:

• Deep and diverse service area economy in the San Francisco-Oakland-Hayward metropolitan area, which is

characterized by above-average incomes (median household effective buying income [MHHEBI] at 170% of the U.S.

average) and below-average unemployment (2.7% in 2018);

• Low industry risk as a contractual monopolistic service provider of an essential public utility;

• A weighted average monthly household waste fee of about $31.44, and tipping fee rates of $42 per cubic yard, which

we consider affordable; and

• Good operational management assessment (where we view the system as a '2' on a six-point scale with '1' being the

strongest and '6' the weakest), which, in our opinion, implies overall alignment among the system's operational

characteristics and that its management strategies are sufficient and embedded, as well as very conservative.

Highlights include regular rate increases in recent years.

The rating also reflects our views on the strong financial risk profile assessment reflected by:

• A history of adequate coverage levels;

• A good liquidity position with available cash and investments totaling $17.0 million or 136 days' cash on hand;

• An above-average debt burden with a debt-to-capitalization ratio of 72.6%; and

• A good Financial Management Assessment, which indicates that the finance department maintains comprehensive

policies in most, but not all, key areas. We view the system as a '2' on a six point scale with '1' being the strongest

www.spglobal.com/ratingsdirect June 14, 2019 2

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and '6' the weakest.

The bonds are secured by a senior lien on net revenues of the authority.

Just south of San Francisco and including the northern portion of Silicon Valley in San Mateo County, the authority's

members serve over 440,000 residents, according to management. MHHEBI for the county is 170% of the national

level. The county's 2018 unemployment rate was 2.7%, according to the Bureau of Labor Statistics.

The authority currently serves 12 cities and towns, and unincorporated portions of San Mateo County. Membership in

the authority requires participants to have the legal ability to issue franchises to waste haulers, and requires waste to

be delivered to the transfer station and recycling facility. The authority negotiates a master contract with waste haulers

on behalf of its members. However, each member has signed its own individual franchise agreement with Recology

Inc. (f/k/a Norcal Solid Waste Systems Inc.). The authority's system includes a transfer station and recycling facility.

The authority transitioned to South Bay Recycling for the operations of these facilities. Both companies replaced Allied

Waste, with both agreements starting in 2009 and expiring at the end of 2020. The authority recently renegotiated the

Allied Waste's Ox Mountain Landfill long-term disposal contract, which limits the authority a maximum annual rate

increase to 5% but will change from 80% of the consumer price index (CPI) to 100% of CPI. The new contract expires

in 2029, although there are up to six years of extensions available.

Growth of diversion programs has increased the authority's reliance on revenue from the sale of recyclable materials,

which has declined in recent years, in terms of revenue. However, the new-money portion of the series 2019 bonds will

fund improvements at the facility--mainly optical scanners, which are expected to improve the quality of the output

and thereby increase recyclable sales. Annual debt service coverage from operating revenues was 1.09x in fiscal 2018.

Although host fees paid to the city of San Carlos are subordinate to debt service under the terms of the indenture, S&P

Global Ratings factors these costs into its calculation of all-in coverage. In fiscal 2018, the authority had $17 million in

cash, or what we consider a strong 136 days' cash on hand. Management is projecting coverage levels ranging from

1.87x in calendar year 2020 to 2.5x in 2023 when adjusted to remove host fees paid to San Carlos.

The 2019 bond issue will fund improvements to the materials recovery facility as well as an Organics 2 Energy Project.

The authority will take organic waste and make a slurry out of it, then tank the slurry to one of two wastewater

treatment plans, where it will be converted into methane gas. In addition, the 2009 bonds will be refunded and the

maturities will be extended six years to keep the aggregate annual debt service of the series 2019A and B bonds under

the $4.1 million level, where it currently stands.

Outlook

The stable outlook reflects our view of the strong economic base of the service area, and limited competition, which

are factors that, in our opinion, support the authority's ability to implement its planned rate increases. Given the recent

operating performance of the authority, we expect that recent fee increases will have stabilized operating performance,

particularly as it meets its debt obligations. The stability of the rating will depend on the authority's ability to achieve

satisfactory coverage of annual debt service by system net revenue, without a recurring reliance on a rate stabilization

fund, other reserves, or financing methods. Based on these factors, it is unlikely the rating will change within the next


Summary: South Bayside Waste Management Authority, California; Solid Waste/Resource Recovery

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two years.

Downside scenario

Should coverage and liquidity levels fall to below-average levels and be maintained there, it is likely the rating will be

lowered.

Upside scenario

Upward rating movement would depend on ongoing improved all-in coverage (including host fees) and days' cash on

hand improving likewise, coupled with a reduction of the authority's debt burden. In addition, successful completion

and operations of the projects being funded with the 2019 bonds could lead to a higher rating.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed

to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for

further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating

action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.



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GREEN BOND SECOND PARTY OPINION

Solid Waste Enterprise Refunding Revenue Bonds Series 2019A (Non-AMT)

Solid Waste Enterprise Revenue Bonds Series 2019B (AMT)

(“Series 2019 A and B Green Bonds”)

Issuer: South Bayside Waste Management Authority (SBWMA) GBP Category: Pollution Prevention and Control Location (HQ): San Mateo, CA, USA Financing value: $53.8 million Amount evaluated: 100% Evaluation date: June 13th, 2019 Contact: Evan Smith, Lead Technical Verifier, Kestrel Verifiers

+1 530.919.9162, [email protected]

TRANSACTION OVERVIEW

South Bayside Waste Management Authority (“SBWMA”) plans to issue $53.8 million in Solid Waste Enterprise Revenue Bonds Series 2019 A and B Green Bonds.

This Second Party Opinion reflects our view of the SBWMA’s project and financing, allocation and oversight and conformance of the bonds with the Green Bond Principles.

The Series 2019A bond proceeds will be used to refund the Series 2009A Bonds previously issued by South Bayside Waste Management Authority. Funds from the Series 2009A Bonds were used to design and construct major upgrades to the Shoreway Environmental Center, including a new materials recovery facility and 2700 solar panels that power 100% of recycling operations.

The Series 2019B Green Bonds will be used to fund new waste diversion and waste-to-energy projects at the Shoreway Environmental Center.

In our opinion, the Series 2019 A and B Green Bonds to be issued by SBWMA are aligned with the Green Bond Principles 2018.

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 3 ATTACHMENT B - p1


mailto:[email protected]




Kestrel Verifiers | Second Party Opinion 2

INTRODUCTION

South Bayside Waste Management Authority (“SBWMA”), also known as ReThinkWaste, is a joint powers authority of twelve public agencies in San Mateo County, California. The organization is a recognized leader in the delivery of innovative waste reduction and recycling programs.

The primary goal of SBWMA is to provide cost-effective waste reduction, recycling, and solid waste programs to member agencies through franchised services and other recyclers to meet and sustain a minimum of 50% diversion of waste from landfill as mandated by California State Law, AB 939.

SBWMA owns and manages the Shoreway Environmental Center, which serves as a regional solid waste and recycling facility for the receipt, handling and transfer of refuse, recyclables and organic materials collected from the service area.

SBWMA has established goals that support a low-carbon trajectory, including the “Triple-Zero” goal as defined by the California Air Resources Board—zero recyclables to the landfill, zero organics to the landfill, and zero net greenhouse gas emissions in operations. To achieve its sustainability vision, SBWMA has established sustainability targets to reduce waste by 75% by 2025. These targets are aligned with California State Law SB 1383, which requires SBWMA to divert 50% of organic matter from landfills by 2020, and 75% by 2025.

SBWMA has developed a green bond framework under which it plans to issue the Solid Waste Enterprise Refunding Revenue Bonds Series 2019A (Non-AMT) and Solid Waste Enterprise Revenue Bonds Series 2019B (AMT) green bonds, otherwise known as the “Series 2019 A and B Green Bonds.” This green bond framework has been published in a separate document entitled, South Bayside Waste Management Authority Green Bond Framework.

SBWMA plans to issue these bonds and use the proceeds to finance and refinance expenditures related to (i) waste collection, (ii) waste treatment, (iii) waste-to-energy/production of waste-derived fuels, and (iv) waste recycling.

SBWMA has engaged Kestrel Verifiers to provide an independent second party opinion on the alignment of the Series 2019 A and B Green Bonds with the Green Bond Principles 2018 (the “GBP”), as administered by the International Capital Market Association (the “ICMA”), and to the United Nations Sustainable Development Goals (“SDGs”). Kestrel Verifiers is an Approved Verifier, as per the Climate Bonds Initiative, for green bonds and Climate Bonds. The Kestrel review team included a waste management specialist.

As part of this engagement, Kestrel Verifiers reviewed the green bond framework, examined public and non-public information, and interviewed members of SBWMA’s management and finance teams. Our goal was to understand sustainability impacts of the business, planned use of proceeds, procedures for management of proceeds, and plans and practices for reporting. This document contains Kestrel’s opinion of the Series 2019 A and B Green Bonds and should be read in conjunction with SBWMA’s green bond framework for this bond issue.

SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY’S SUSTAINABILITY STRATEGY

Kestrel believes that the South Bayside Waste Management Authority has a strong sustainability strategy supported by a robust governance structure. SBWMA’s goals and commitment to zero waste are supported through its “Zero Waste Committee” governance structure and “Triple-Zero” goal, defined as:

• zero recyclables to the landfill,• zero organics to the landfill, and• zero net greenhouse gas emissions in operations.

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To achieve its sustainability vision, SBWMA has established sustainability targets which include: (i) increase recycling and recovery rates thus reducing waste by 75% from 2014 levels by 2025

(currently at 50%); (ii) reduce organics going to landfill by 75% by 2024 and 50% by 2022 from a 2014 baseline; and (iii) landfill no more than 10 percent of readily recyclable or compostable materials by 2020 (i.e., a

90% capture rate).

SBWMA’s Core Values also drive the organization toward sustainability. These include: 1. Implementing waste reduction, recycling and environmental education programs which is seen as

paramount to achieving a greater resource conservation ethic and sustainable communities. 2. Delivering high quality, and cost-effective resources and services for customers, and vendors and

service providers. 3. Providing sound environmental policies and practices for member agency communities. 4. Conducting long-term planning for waste reduction and recycling programs and facility

infrastructure, which is fundamental to achieving the organizational mission. 5. Facilitating excellent communication, collaboration and cooperation among all stakeholders.

PROJECT DESCRIPTION

The Series 2019 A and B Green Bonds offering consists of two parts. The first part under Series 2019A, is a refunding of SBWMA’s tax-exempt solid waste enterprise revenue bonds, Series 2009A, which were used to fund improvements to the (existing) Shoreway Environmental Center. These improvements included: a new 70,200 sq ft materials recovery facility (MRF) to process single-stream recyclables; a 14,780 sq ft expansion of the existing 62,000 sq ft transfer station building to increase unloading spaces for public customers and improve capacity to handle organic waste; a new environmental education center housed in the MRF with museum-quality exhibits promoting resource conservation and SBWMA programs; a new public recycling center for free-drop off; and a buy-back center for bottles and cans.

The original use of proceeds also acquired and put into service 2,700 solar panels to produce 100% of electricity demand at the Shoreway Environmental Center. The modern equipment and facilities upgrades that were accomplished with the Series 2009A offering allowed SBWMA to remove 30% more recycling tonnage from the waste stream.

The second part of the debt issuance is the Solid Waste Enterprise Revenue Bonds Series 2019B, which will be used to acquire and install equipment for the materials recovery facility that will improve operational efficiency. These new improvements and the desired uses include the following:

Improvement Purpose Optical Sorting Machine Capture additional cardboard and containers

Reduce contamination Robotic Residue Sorting Equipment/Quality Control System

Increase capture of recyclable materials which are currently disposed

Enhanced Glass Cleanup System

Increase the quality of glass recovered by reducing contamination, thus allowing higher recycle rates

Sort System Upgrades Meet new paper quality standards for recycling

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Improvement Purpose Organics-to-Energy Pilot Project

A pilot project to develop a waste-to-energy system and reduce organics going to landfill. Organics and garbage will be transported as a slurry to the anaerobic digester at Silicon Valley Clean Water Wastewater Treatment Plant.

Individually and collectively, each of these improvements is intended to increase the operational efficiency of the Shoreway Environmental Center and move SBWMA toward its “Triple-Zero” goal.

ENVIRONMENTAL BENEFITS

New Sorting Improvements Studies have shown that effective source-segregated recycling of key waste materials can notably reduce GHG impacts of waste management1. Higher efficiency of sorting in the Shoreway Environmental Center through use of optical and robotic sorting equipment increases the GHG benefit of diversion from landfills.

Organics-to-Energy Pilot Project SBWMA will demonstrate an Organics-to-Energy Program by implementing a pilot project. Upon demonstration of a successful Organics-to-Energy Pilot Project, at least 75 tons of organics and solid waste per day will be diverted from the Shoreway Environmental Center, converted to a slurry, and trucked three miles to the Silicon Valley Clean Water Facility where it will be put into anaerobic digesters to produce gas for energy use.

There is a three-fold benefit to SBWMA’s Organics-to-Energy Program, which will be demonstrated with this pilot. First, it will reduce the number of large trucks making the 73-mile one-way trip to the landfill. Second, reduced organics sent to the landfill will result in fewer methane emissions from organic material in the landfill. Third, the resulting biogas energy source will produce 2 MW of continuous base-load power per day. Furthermore, if this pilot is successful and scaled, it is a goal of SBWMA to pipe biogas from the anaerobic digesters back to the Shoreway Environmental Center to fuel the waste management vehicle fleet. The fleet currently uses over one million gallons of diesel fuel per year.

While this project starts small, it has potential to provide clean energy, reduce diesel fuel usage, and reduce methane emissions from landfills. All would represent significant decreases in potent greenhouse gas emissions.

ALIGNMENT WITH GREEN BOND PRINCIPLES

Use of Proceeds Bond proceeds will be used for “Pollution Prevention and Control,” which is recognized by the ICMA Green Bond Principles as an eligible project category with positive environmental benefits.

Project Evaluation and Selection SBWMA’s project evaluation and selection process is executed through a dedicated “Zero Waste Committee” supported by the finance committee and the Board of Directors. Kestrel assesses this process as a best market practice due to the active and transparent participation of the Board and management.

1 David A. Turner, Ian D. Williams, Simon Kemp, “Greenhouse gas emission factors for recycling of source-segregated waste materials,” Resources, Conservation & Recycling 105 (2015): 186–197.

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Management of Proceeds SBWMA’s management of proceeds is in line with market practices. Net proceeds will be tracked by SBWMA’s Finance team and will all be allocated immediately at bond closing. Prior to the expenditure of bond proceeds, funds will be held by a trustee under the bond indenture and can only be invested in the instruments specifically permitted by the indenture. In practice, the proceeds are expected to be invested in U.S. Treasuries, federal agencies, or in a money market fund that invests exclusively in such instruments.

Reporting SBWMA will make, and keep readily available, up-to-date information on the use of proceeds to be renewed annually until full expenditure. The annual report will include a list of projects to which green bond proceeds have been allocated, as well as a brief description of the projects and the amounts allocated, and their expected impact. So long as the Series 2019 A and B Green Bonds are outstanding, the SBWMA will annually report on the use of proceeds, the currently allocated and outstanding amounts, and provide management confirmation that the use of proceeds of the Bonds is still in alignment with the Green Bond Principles. This reporting will be done annually on the Electronic Municipal Market Access (EMMA) system operated by the MSRB. Kestrel Verifiers will provide a post-issuance Use of Proceeds report, which the SBWMA will post on EMMA.

ALIGNMENT WITH UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

In addition to following the guidelines of the Green Bond Principles. SBWMA also recognizes the United Nations Sustainable Development Goals (“SDGs”). The Series 2019 A and B Green Bonds align with the following SDGs:

• SDG 9: Industry, Innovation and Infrastructure sets a goal to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Funding of optical and robotic sorting at the MRF clearly addresses this goal in an environmentally sound way with innovation and increased efficiencies, and by working toward SBWMA’s goal of diverting more waste from landfills.

• SDG 12: Responsible Production and Consumption sets a goal to ensure sustainable consumption and production patterns. Construction and upgrades at the Shoreway Environmental Center, a Leadership in Energy and Environmental Design (LEED) Certified Gold facility, and increased sorting efficiency addresses this goal by substantially reducing waste generation through recycling.

IMPACT OF USE OF PROCEEDS

All eligible project categories for the use of proceeds—namely (i) waste collection, (ii) waste treatment, (iii) waste-to-energy/production of waste-derived fuels and (iv) waste recycling—are recognized as impactful by the GBP, and Kestrel views the selection of these project categories positively. There are many positive environmental impacts of responsible waste management.

Kestrel is of the opinion that the financing of SBWMA’s operations will deliver a significant positive environmental contribution by reducing ground and air pollution thorough reduced landfilling. The manufacture of new products from recycled materials requires significantly less energy in comparison to extraction and processing of raw materials to make new products, therefore an additional environmental benefit is an indirect positive contribution to reduced energy consumption. Similarly, SBWMA’s waste-to-

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energy pilot will contribute to a reduction in fossil-fuel use and resultant GHG emissions. If the pilot demonstrates success, then SBWMA has potential to annually divert at least 75 tons of organic and other waste for biogas production, power the fleets of SBWMA and its key contractors, and reduce diesel fuel use by up to one million gallons per year.

Responsible waste management also yields clear social and economic benefits in the form of better public health through avoidance of air and water pollution, and new job opportunities in the field of collection and recycling of materials.

Overall, Kestrel believes that the eligible projects under the South Bayside Waste Management Authority Green Bond Framework will contribute to improving the environment through responsible waste management.

SECOND OPINION ON GREEN BOND PRINCIPLES ALIGNMENT

South Bayside Waste Management Authority has developed a green bond framework under which it intends to issue the Series 2019 A and B Green Bonds. Proceeds under the framework will be used to finance or refinance green assets and green activities related to (i) waste collection, (ii) waste treatment, (iii) waste-to-energy/production of waste-derived fuels, and (iv) waste recycling. These activities are recognized as impactful under the “Pollution Prevention and Control” category of the Green Bond Principles. SBWMA’s project selection process, management of proceeds, and reporting are also in line with market practices. Based on these tenets and that 100% of proceeds have or will be allocated to green projects, we expect this bond to meet the basics of the four pillars of the GBP.

Kestrel is of the opinion that the green activities funded by the proceeds of the Series 2019 A and B Green Bonds will provide a meaningful contribution to SBWMA’s strong sustainability commitments and targets, and positively contribute to the transition toward a more circular and low-carbon economy.

Based on the above, Kestrel is of the opinion that SBWMA is well positioned to issue the green bonds; that the corresponding green bond framework is credible, robust and aligned with the four pillars of the Green Bond Principles 2018; and the use of proceeds are aligned with United Nations Sustainable Development Goals 9 and 12.

About Kestrel Verifiers To public and corporate finance teams who are preparing green bonds, Kestrel is an Approved Verifier with direct and varied project experience in many sectors: water, renewable energy, energy efficiency, pollution prevention and control, sustainable water and wastewater management, climate change adaptation and environmentally sustainable management of natural resources and land uses. As bespoke US municipal specialists, we strive to provide a personal, focused approach and dedicated support. We bring real-world experience, relationships and tools to efficiently verify and report on green bonds and Climate Bonds. Kestrel is a Woman-Owned Small Business and a certified Women’s Business Enterprise.

For more information, visit www.kestrelverifiers.com

SBWMA has committed to: allocating the full amount of the net proceeds of bonds to eligible green projects,

as defined by the Green Bond Framework; using clear “green” criteria, as defined by the issuer, to select projects for funding; managing and tracking proceeds; and committing to regular reporting of environmental impact and use of proceeds.

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http://www.kestrelverifiers.com/




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GREEN BOND INDEPENDENT EXTERNAL REVIEW FORM

Solid Waste Enterprise Refunding Revenue Bonds Series 2019A (Non-AMT)

Solid Waste Enterprise Revenue Bonds 2019B (AMT)

(“Series 2019 A and B Green Bonds”)

South Bayside Waste Management Authority

SECTION 1. BASIC INFORMATION

Issuer name: South Bayside Waste Management Authority (SBWMA)

Issuer Green Bond Framework Name: South Bayside Waste Management Authority Green Bond Framework

Independent External Review provider’s name: Kestrel Verifiers

Completion date of this form: June 13, 2019

Publication date of review publication: June 13, 2019

SECTION 2. REVIEW OVERVIEW

Scope of Review

The review assessed the following elements and confirmed their alignment with the GBPs:

☒ Use of Proceeds ☒ Process for Project Evaluation and Selection ☒ Management of Proceeds ☒ Reporting

Role(s) of Independent External Review Provider

☒ Second Party Opinion ☐ Certification

☐ Verification ☐ Scoring/Rating

☐ Other (please specify):

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Executive Summary of Review

South Bayside Waste Management Authority (“SBWMA”), also known as ReThinkWaste, is a joint powers authority of twelve public agencies in San Mateo County, California. SBWMA plans to issue $53.8 million in Solid Waste Enterprise Revenue Bonds Series 2019 A and B Green Bonds. The Series 2019A bond proceeds will be used to refund the Series 2009A Bonds previously issued by SBWMA. Funds from the Series 2009A Bonds were used to design and construct major upgrades to the Shoreway Environmental Center, including a new materials recovery facility and 2700 solar panels that power 100% of recycling operations. The Series 2019B Green Bonds will be used to fund new waste diversion and waste-to-energy projects at the Shoreway Environmental Center.

SBWMA has engaged Kestrel Verifiers to provide an independent second party opinion on the alignment of the Series 2019 A and B Green Bonds with the Green Bond Principles 2018 (the “GBP”), as administered by the International Capital Market Association (the “ICMA”), and to the United Nations Sustainable Development Goals (“SDGs”). As part of this engagement, Kestrel Verifiers reviewed the green bond framework, examined public and non-public information, and interviewed members of SBWMA’s management and finance teams. Our goal was to understand sustainability impacts of the business, planned use of proceeds, procedures for management of proceeds, and plans and practices for reporting.

Kestrel is of the opinion that the green activities funded by the proceeds of the Series 2019 A and B Green Bonds will provide a meaningful contribution to SBWMA’s strong sustainability commitments and targets, and positively contribute to the transition toward a more circular and low-carbon economy.

Based on the above, Kestrel is of the opinion that SBWMA is well positioned to issue the green bonds; that the corresponding green bond framework is credible, robust and aligned with the four pillars of the Green Bond Principles 2018; and the use of proceeds are aligned with United Nations Sustainable Development Goals 9 and 12.

SECTION 3. DETAILED REVIEW

Reviewers are encouraged to provide the information below to the extent possible and use the comment section to explain the scope of their review.

1. Use of Proceeds

Overall comment on section: South Bayside Waste Management Authority will use the Series 2019 A and B Green Bonds proceeds for refunding of the Shoreway Environmental Center construction costs and new funding on equipment and projects that will improve operational efficiency, increase the amount of materials to be recycled, and reduce the amount of waste sent to the landfill. Bond proceeds will be used for “Pollution Prevention and Control,” which is recognized by the ICMA Green Bond Principles as an eligible project category with positive environmental benefits. Shoreway Environmental Center SBWMA owns and manages the Shoreway Environmental Center, which serves as a regional solid waste and recycling facility for the receipt, handling and transfer of refuse, recyclables and organic materials collected from the service area. The Series 2019 A and B Green Bonds offering consists of two parts. The first part under Series 2019A, is a refunding of SBWMA’s tax-exempt solid waste enterprise revenue bonds, Series 2009A which were

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used to fund improvements to the (existing) Shoreway Environmental Center. These improvements included: a new 70,200 sq ft materials recovery facility (MRF) to process single-stream recyclables; a 14,780 sq ft expansion of the existing 62,000 sq ft transfer station building to increase unloading spaces for public customers and improve capacity to handle organic waste; a new environmental education center housed in the MRF with museum-quality exhibits promoting resource conservation and SBWMA programs; a new public recycling center for free-drop off; and a buy-back center for bottles and cans.

The original use of proceeds also acquired and put into service 2,700 solar panels to produce 100% of electricity demand at the Shoreway Environmental Center. The modern equipment and facilities upgrades that were accomplished with the Series 2009A offering allowed SBWMA to remove 30% more recycling tonnage from the waste stream. The facility received a LEED Gold certification.

Facility Upgrades The second part of the debt issuance is the Solid Waste Enterprise Revenue Bonds Series 2019B, which will be used to acquire and install equipment for the Materials Recovery Facility that will improve operational efficiency. These new improvements and the desired uses include the following:

Improvement Purpose Optical Sorting Machine Capture additional cardboard and containers

Reduce contamination Robotic Residue Sorting Equipment/Quality Control System

Increase the capture of recyclable materials which are currently disposed

Enhanced Glass Cleanup System Increase the quality of glass recovered by reducing contamination, thus allowing higher recycle rates

Sort System Upgrades Meet new paper quality standards for recycling

Organics-to-Energy Pilot Project A pilot project to develop a waste-to-energy system and reduce organics going to landfill. Organics and garbage will be transported as a slurry to the anaerobic digester at Silicon Valley Clean Water Wastewater Treatment Plant.

Individually and collectively, each of these improvements is intended to increase the operational efficiency of the Shoreway Environmental Center and move SBWMA toward its “Triple-Zero” goal, defined as:

• zero recyclables to the landfill, • zero organics to the landfill, and • zero net greenhouse gas emissions in operations.

Use of proceeds categories as per GBP:

☐ Renewable energy

☐ Energy efficiency

☒ Pollution prevention and control ☐ Environmentally sustainable management of living natural resources and land use

☐ Terrestrial and aquatic biodiversity conservation

☐ Clean transportation

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Use of proceeds categories as per GBP:

☐ Sustainable water and wastewater management

☐ Climate change adaptation

☐ Eco-efficient and/or circular economy adapted products, production technologies and processes

☐ Green buildings

☐ Unknown at issuance but currently expected to conform with GBP categories, or other eligible areas not yet stated in GBPs


If applicable please specify the environmental taxonomy, if other than GBPs:

Not applicable.

2. Process for Project Evaluation and Selection

Overall comment on section (if applicable): SBWMA utilizes a robust and transparent annual process to prioritize capital improvements for financing. SBWMA’s project evaluation and selection process is executed through a dedicated “Zero Waste Committee” supported by the finance committee and the Board of Directors. Kestrel assesses this process as a best market practice due to the active participation of the Board and management. Evaluation and selection

☒ Credentials on the issuer’s environmental sustainability objectives

☐ Documented process to determine that projects fit within defined categories

☒ Defined and transparent criteria for projects eligible for Green Bond proceeds

☒ Documented process to identify and manage potential ESG risks associated with the project

☒ Summary criteria for project evaluation and selection publicly available


Information on Responsibilities and Accountability

☒ Evaluation / Selection criteria subject to external advice or verification

☐ In-house assessment


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3. Management of Proceeds

Overall comment on section (if applicable): SBWMA’s management of proceeds is in line with market practices. The net proceeds will be tracked by SBWMA’s Finance team and will all be allocated immediately at bond closing. Funds on hold to be expended will be held or invested in a portfolio of liquidity investments in line with the company’s treasury management policies.

Tracking of proceeds:

☒ Green Bond proceeds segregated or tracked by the issuer in an appropriate manner

☐ Disclosure of intended types of temporary investment instruments for unallocated proceeds


Additional disclosure:

☐ Allocations to future investments only ☐ Allocations to both existing and future investments

☐ Allocation to individual disbursements ☐ Allocation to a portfolio of disbursements

☐ Disclosure of portfolio balance of unallocated proceeds


4. Reporting

Overall comment on section: SBWMA will make, and keep readily available, up-to-date information on the use of proceeds to be renewed annually until full expenditure. The annual report will include a list of projects to which green bond proceeds have been allocated, as well as a brief description of the projects and the amounts allocated, and their expected impact. So long as the Series 2019 A and B Green Bonds are outstanding, the SBWMA will annually report on the use of proceeds, the currently allocated and outstanding amounts, and provide management confirmation that the use of proceeds of the Bonds is still in alignment with the Green Bond Principles. This reporting will be done annually on the Electronic Municipal Market Access (EMMA) system operated by the MSRB. Kestrel Verifiers will provide a post-issuance Use of Proceeds report, which the SBWMA will post on EMMA.

Use of proceeds reporting:

☐ Project-by-project ☐ On a project portfolio basis

☒ Linkage to individual bond(s) ☐ Other (please specify):

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Information reported:

☒ Allocated amounts ☐ Green Bond financed share of total investment


Frequency:

☒ Annual ☐ Semi-annual


Impact reporting:

☐ Project-by-project ☐ On a project portfolio basis

☒ Linkage to individual bond(s) ☐ Other (please specify):

Frequency:

☒ Annual ☐ Semi-annual


Information reported (expected or ex-post):

☐ GHG Emissions / Savings ☐ Energy Savings

☐ Decrease in water use ☒ Other ESG indicators - Tons of waste diverted from landfill

Means of Disclosure

☒ Information published in financial report ☒ Information published in sustainability report

☐ Information published in ad hoc documents


☒ Reporting reviewed (Kestrel Verifiers will provide a post-issuance Use of Proceeds report, which the SBWMA will post on EMMA.)

USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.) www.kestrelverifiers.com

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SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE Type(s) of Review provided:

☒ Second Party Opinion ☐ Certification

☐ Verification ☐ Scoring/Rating


Review provider(s): Date of publication: June 13th, 2019

Monica Reid, Verification Team Leader Evan Smith, Lead Technical Verifier Kestrel Verifiers About Kestrel Verifiers

To public and corporate finance teams who are preparing green bonds, Kestrel is an Approved Verifier with direct and varied project experience in many sectors: water, renewable energy, energy efficiency, pollution prevention and control, sustainable water and wastewater management, climate change adaptation and environmentally sustainable management of natural resources and land uses. As bespoke US municipal specialists, we strive to provide a personal, focused approach and dedicated support. We bring real-world experience, relationships and tools to efficiently verify and report on green bonds and Climate Bonds. Kestrel is a Woman-Owned Small Business and a certified Women’s Business Enterprise.

For more information, visit www.kestrelverifiers.com

About Roles of Independent Review Providers as Defined by the GBP

1. Second Party Opinion: An institution with environmental expertise, that is independent from the issuer may issue a Second Party Opinion. The institution should be independent from the issuer’s adviser for its Green Bond framework, or appropriate procedures, such as information barriers, will have been implemented within the institution to ensure the independence of the Second Party Opinion. It normally entails an assessment of the alignment with the Green Bond Principles. In particular, it can include an assessment of the issuer’s overarching objectives, strategy, policy and/or processes relating to environmental sustainability, and an evaluation of the environmental features of the type of projects intended for the Use of Proceeds.

2. Verification: An issuer can obtain independent verification against a designated set of criteria, typically pertaining to business processes and/or environmental criteria. Verification may focus on alignment with internal or external standards or claims made by the issuer. Also, evaluation of the environmentally sustainable features of underlying assets may be termed verification and may reference external criteria. Assurance or attestation regarding an issuer’s internal tracking method for use of proceeds, allocation of funds from Green Bond proceeds, statement of environmental impact or alignment of reporting with the GBP, may also be termed verification.

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3. Certification: An issuer can have its Green Bond or associated Green Bond framework or Use of Proceeds certified against a recognised external green standard or label. A standard or label defines specific criteria, and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify consistency with the certification criteria.

4. Green Bond Scoring/Rating: An issuer can have its Green Bond, associated Green Bond framework or a key feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised research providers or rating agencies, according to an established scoring/rating methodology. The output may include a focus on environmental performance data, the process relative to the GBP, or another benchmark, such as a 2-degree climate change scenario. Such scoring/rating is distinct from credit ratings, which may nonetheless reflect material environmental risks.

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4

CONSENT CALENDAR

Agenda Item 4



4A

________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4A - p1

_________________________________________________________________________________________ DRAFT MINUTES

SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY MEETING OF THE BOARD OF DIRECTORS

May 23, 2019– 2:00 p.m. San Carlos Library Conference Room A/B

Call To Order: 2:01PM 1. Roll Call

Alternate Members: Richa Awasthi attended representing Foster City and

Drew Combs attended representing Menlo Park 2. Public Comment

Persons wishing to address the Board on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes. If there are more than five individuals wishing to speak during public comment, the Chairman will draw five speaker cards from those submitted to speak during this time. The balance of the Public Comment speakers will be called upon at the end of the Board Meeting. If the item you are speaking on is not listed on the agenda, please be advised that the Board may briefly respond to statements made or questions posed as allowed under The Brown Act (Government Code Section 54954.2). The Board's general policy is to refer items to staff for attention, or have a matter placed on a future Board agenda for a more comprehensive action or report and formal public discussion and input at that time.

None 3. Executive Director’s Report Executive Director La Mariana gave the following updates:

The Bonds have been approved by 10 Member Agencies; 8 were required before the decision could be on today’s agenda. Assuming approval of the Bonds by the Board today, there will be presentations to the rating agencies next week before going to market.

The County will be considering the Bond on June 4, as well as their Amended and Restated Franchise Agreement and a $1M grant to help with the Organics-to-Energy Project

South Bay Recycling (SBR) has sent a letter to the SBWMA with the formal request of starting discussions to extend the term of the contract.

Today there will be presentations on the two pilots that the Agency has been working on: Public Spaces and In-Schools.

He acknowledged the County’s Environmental Health program for their battery campaign that goes from May 6 to June 15 in local papers

Agency Present Absent Agency Present Absent

Atherton X Menlo Park X Belmont X Redwood City X Burlingame X San Carlos X East Palo Alto X San Mateo X Foster City X County of San Mateo X Hillsborough X West Bay Sanitary District X


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4A - p2

Regarding batteries--AB1509 is on the Assembly floor this afternoon. 4. Approval of Consent Calendar

Consent Calendar item(s) are considered to be routine and will be enacted by one motion. There will be no separate discussion on these items unless members of the Board, staff or public request specific items be removed for separate action. Items removed from the Consent Calendar will be moved to the end of the agenda for separate discussion. A. Approval of Minutes from the April 25, 2019 Board of Directors Meeting B. Resolution Approving First Addendum to the Amended Public Project Agreement for Organics

Extrusion Recovery System Purchase and Installation at Shoreway Environmental Center 2019 C. Resolution Authorizing the Transfer of SBWMA Bank Accounts From the City of San Carlos to the City

of Redwood City to Facilitate the New Administrative Services Contract that Commences on July 1, 2019

D. Resolution Authorizing the City of Redwood City to Assume and Manage the SBWMA’s Financial Investments in Association with the Commencement of the New Administrative Services Agreement, effective July 1, 2019

E. Approval of Quarterly Investment Report for the Quarter Ended March 31, 2019 Motion/Second: Aguirre/Brownrigg Voice Vote: All in Favor

Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton X Menlo Park X Belmont X Redwood City X Burlingame X San Carlos X East Palo Alto X San Mateo X Foster City X County of San Mateo X Hillsborough X West Bay Sanitary Dist. X

5. Administration and Finance

A. Resolution Authorizing the Issuance of Solid Waste Enterprise Revenue Bonds Series 2019, Authorizing and Directing Execution of Certain Documents Relating Thereto, Authorizing the Sale of Bonds and Refunding of Certain Prior Obligations, Approving an Official Statement and Providing Other Matters Properly Relating Thereto

Staff Mangini introduced the item and Melissa Schick of KNN Finance Advisors gave a Power Point presentation outlining the six documents necessary for execution of the bonds. They noted that interest rates have been holding steady since November and the expectation is that interest rates will continue to hold steady by the time the bonds are sold. The savings is in the difference between the interest rate when the bonds were sold in 2009 at a higher interest rate. The sale date is likely to by June 20, 2019, and the actual interest rate will be determined on the sale date. Motion/Second: Bonilla/Hurt Discussion: Chair Benton noted that the Board and Finance Committee had discussed the issuance of bonds at least 4 times, so this is the end of a very lengthy process that the Board has thoroughly vetted. Voice Vote: All in Favor




Member Brownrigg commented that this is a significant investment and upgrade in the facility and will allow for generating more revenue keeping rates down for the rate payers, it will pull more organics out of the landfill reducing green house gases, and doing these things without increasing debt service and affecting rate payers.

B. Review of Draft FY2019-2020 Budget and Capital Improvement Plan Review Staff Mangini gave a Power Point presentation detailing the proposed budget. He noted that the Finance Committee had reviewed the draft budget and action on the budget would be on the June 27 Board Meeting Agenda. The Board discussed tip fees. Member Widmer noted that the third-party tip fee was $121.75, and the Franchised tip fee was 124.31, he asked why 3rd party tons customers are paying less than franchised tons given that franchised tons are the most favored customer. Staff Mangini answered that those tip fees are a weighted average, and there is a lot of public dirt volume that comes into the facility, and no dirt volume with the franchised tons. The price per ton on dirt is $110/ton, and it brings the weighted average down because there is one material type at a lesser tip fee, but considerable volume. He added that he would provide a table showing the comparative tip fees for Franchise and Non-Franchise at the June Board Meeting. Member Brownrigg asked if the tip fee revenue accounting for the increased recycling revenue expected from the equipment investment. Staff Mangini answered no, because the project build isn’t scheduled until Q4, so the benefit won’t be seen until next year. The Board discussed the reserves. Member Benton asked for an explanation as to why a couple of the reserve categories are down from what was projected in the mid-year budget. Staff Mangini answered that at the time the FY19/20 budget was passed the rate stabilization and emergency reserve were set at 10% of the adopted budget. The reserve policy was revised in November 2018, and the new policy states that those reserves will be up to 10% on the annual budget, and staff is recommending less than 10%. The Board discussed staffing. Member Brownrigg asked if there was enough staffing to manage the capital investment projects. Executive Director La Mariana noted that the added Management Analyst position that was added will be managing the procurement process, and outside technical assistance will also be used, and staff feels comfortable moving forward. The Board discussed the proposed capital budget. Member Benton asked where the grant money fits in to the Capital budget. Staff Mangini answered that the grants haven’t been worked it at all yet, because the grants haven’t been approved yet. The Board discussed fire suppression. Staff Gans noted there was no specific project for the $100K in the budget planned, but if a project that was worth perusing on fire suppression became available, he wanted money in the budget to be able to peruse it. Member Dehn noted with the insurance rates going up, she wasn’t sure there had been enough done at the facility to help with fire suppression and therefore insurance rates. Staff



Gans noted that a lot of fire suppression equipment and measures have been added, but he wasn’t sure if that would be recognized by the insurance companies. He added that he would present at the September meeting which would be 3 years since the fire on everything done since the fire regarding fire suppression. 6. Collection and Recycling Program Support and Compliance

No Items

7. Shoreway Operations and Contract Management A. Resolution Authorizing Execution of a Disposal Services Agreement with Republic Services for Ox

Mountain Landfill from January 1, 2020 to December 31, 2029, with Potential Option Years through December 31, 2035 and optional Other Material Handling and Land Leasing Services

Staff Gans introduced the item, and gave a brief overview of the item, and thanked the evaluation (TAC Chair, Afshin Oskoui (Belmont) and TAC Vice Chair, Roxanne Murray (San Mateo)) and selection committee members (Board members Vice Chair, Alecia Agurrie (Redwood City), Carole Groom (County of San Mateo, President of BOS), and Rick Bonilla (City of San Mateo) Rob Hilton of HF&H Consultants gave a Power Point presentation that went over the details of the recommended contract, and the RFP process. The Board asked questions of the consultant. Member Widmer asked if there was a minimum tons requirement, and what CPI would be used for the 2.5 to 5% increase each year. Rob Hilton answered that there is no minimum requirement, but any tons that are generated are exclusive, and that the Bay Area CPI will be used to determine the percentage. Member Brownrigg asked for more details about the loss of the most favored customer clause. Rob Hilton answered that it was a big discussion item, but it cost Republic $60M in the last contract and neither proposer was willing to allow that provision in their contract. Member Dehn asked if there was any possibility of the County fee being reduced. Member Groom answered probably not. Vice Chair Aguirre thanked the selection committee for their time and noted that this contact made the most sense fiscally which is why it’s the recommendation. TAC Chair Afshin Oskoui, who served on the evaluation committee, acknowledged staff and HF&H for their work on the contract. Motion/Second: Widmer/Rak Voice Vote: All in favor


Mike Mahoney of Republic Services thanked Monica Devincenzi of Republic Services for putting the proposal together. He,also thanked the selection committee, HF&H, SBWMA staff, and the attorneys on both sides. He added that Republic looks forward to at least 10 years of working together. Foster City now absent



B. Resolution Approving FY19/20 Shoreway Facility Insurance

Staff Mangini introduced John O’Neill of Risk Strategies Insurance (President), the Agency’s Insurance broker, who gave the details of the insurance costs and coverage for FY19/20. He noted that there is a large increase of 28.5% this year in the property coverage with 7 different insurance carriers providing $60M in coverage, the same coverage as last year with the same $500,000 deductible. He noted that the industry has nationally seen a MRF fire a month due to Lithium-Ion batteries, and the insurance industry has noticed and over the long term costs are going to continue to increase and hardening the facility is not enough to reduce costs, there has to be a specific measure to deal with batteries. The Board asked questions of the Broker. Member Widmer asked if there was a difference if there was a higher deductible, and if there is a JPA for insurance to self-insure. John O’Neil answered that that a higher deductible might reduce costs by $50K, and there not any self-insurance pools for this type of business. The Board discussed Lithium Ion batteries. There is not a best practice in safety measures in place for the batteries issues, and the industry is going to have to solve itself, before insurance will be affected. Chair Benton asked if there has been any change since the battery campaign last September. Executive Director La Mariana answered that there has been a 31% increase in batteries that have been collected correctly, however there has also been in an increase in batteries not collected correctly and still making their way into the facility. He added that AB1509 is meant to be an action step on EPR on batteries. Chair Benton directed staff to look into deductible versus principal and if there are meaningful options bring them back to the Board. Motion/Second: Aguirre/Brownrigg Voice Vote: All in favor


8. Public Education and Outreach

A. Review of 2018 Annual Report Staff Au noted that this item was in last month’s packet but not discussed, she added that there has been a change since last month, a quote from the 2018 Board Chair Charlie Bronitsky. Chair Benton thanked Julia for bringing it back, and Executive Director La Mariana complemented Julia. Member Widmer asked that the link go on the Recology bill, or in a bill insert.

B. Presentation on Long Range Plan Pilot Program - Schools Pilot Staff Hashizume introduced the item and her team, and they gave a presentation on the Schools Pilot.



Member Brownrigg asked how the volume was reduced so dramatically. Staff Halili answered that fewer bags and correct sorting by the students meant that there was less air in the bins which meant fewer bags. Member Widmer asked for further explanation of the waste hauler service level adjustment in the staff report. Staff Hashizume answered that SBWMA staff is working with both Recology San Mateo County (private schools) and Recology San Bruno (public schools) to see if there can be a reduction in garbage once compost is added to the school’s waste program. She added that more information on the service level adjustment would be added to the final report. The Board discussed how much time staff spends at each school, and what the labor costs are. Executive Director La Mariana noted that there were two sets of costs, the material costs, and the labor costs. The labor costs would be calculated as a percentage of staff time and would be in the final report. The material cost is about $1400 per school, and the SBWMA has paid for all of the materials. Staff spends about a week at each school to roll out the program, educate and monitor. Staff is recommending spending a little more time at each school. Member Rak asked if there were any synergies in working at the district level. Staff Hashizume noted that her staff has been working with the County’s Office of Education, and yes, starting with the district saves a lot of time. Member Widmer commented that it was a great report and the program should be continued. He wanted to see the program not just focus on public schools, but on private schools since those schools contribute to the franchise and Member Agency diversion. If it was going to be public schools, he wanted to see Recology contribute to the program since they would get the benefit of increased diversion. Executive Director La Mariana noted there are two different operations divisions of Recology. Recology of San Bruno services the public schools, while Recology San Mateo County holds the Franchise. He also noted that this program was developed in the 2015 Long-Range Plan, because the public schools were not part of the Franchise, and therefore there was a gap in the services received at home versus at school and this program is meant to close that gap. The private schools will likely receive similar services from Recology San Mateo County, or a similar program provided by the County’s Office of Sustainability. The Board discussed expanding the program. Member Groom and Member Bonilla both praised the program and want to see it expanded. Member Brownrigg asked why it couldn’t be expanded to 24 schools per year not just 12. Staff Hashizume said staffing, there either needs to be less tours at Shoreway, or more bodies. Drew (public comment card) commented that he would like to see the signs in a 3rd language and not assume Spanish is the second language needed. Staff Hashizume noted that her staff asked the principals what languages they needed. Chair Benton asked to get press coverage on the program and on the website.

C. Presentation on Long Range Plan Pilot Program - Public Spaces Pilot

Staff Au introduced the item and her team, and they gave a presentation on the Public Spaces Pilot.



The Board discussed the carts chosen for the pilot. Member Widmer wanted to know if there was a flap to keep animals out. Staff noted the carts were open but in an enclosure. Member Bonilla wanted to know if the carts locked. Staff answered yes. The Board suggested putting signage on the front, back and tops of the enclosures, since the enclosure carts are not colored. Staff noted that signage was on both sides, but not on top, because the words are on top and the bins are pretty tall. Member Widmer asked what drove the dramatic reduction in the number of receptacles, and if there was more litter as a result of less carts. Staff answered that the reduction in the number of carts was at the request on the City’s staff, but all three waste streams were added, and they’ve reported no additional litter problems with the reduction of carts but service time has increased. Lucas Wilder, City of Redwood City, commented that Redwood City has seen significant improvement in services at the parks that were part of the pilot. The 64-gallon Toters have really helped park goers’ items fitting in the cans. Member Dehn commented that she would like to see a similar pilot program at transportation hubs, as the litter there is tremendous. 9. Informational Items Only (no action required)

A. Legislative Session Update B. Check Register Detail for April 2019 C. 2019 Finance and Rate Setting Calendar D. Potential Future Board Agenda Items

10. Board Member Comments Staff Au commented that during today’s meeting AB1509 passed the State Assembly on a bipartisan vote. Executive Director La Mariana recognized Gino Gasparini of Recology at his last SBWMA Board Meeting and presented him with a resolution in honor of his 47 years of service. Gino Gasparini thanked everyone for the recognition and made a few comments. 11. Adjourn 4:27 PM



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4B

STAFF REPORT To: SBWMA Board Members From: Grant Ligon, Management Analyst Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Approving an SBWMA Environmentally Preferable Purchasing and Practices

Policy Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-35 attached hereto authorizing the following action: Approve Environmentally Preferable Purchasing and Practices Policy. Summary The SBWMA is applying for the 2019-20 CalRecycle Organics Grant program and having an Environmental Preferable Purchasing and Practices (EPPP) Policy is a requirement. The SBWMA’s implementation of an EPPP Policy is also in direct alignment with our agency’s Mission Statement and Guiding Principles, as well as those of our Member Agencies and many state-mandated environmental goals. Analysis Staff has used Alameda County’s existing StopWaste EPPP Policy (adopted in 2013) and other resources to develop a recommended EPPP Policy for SBWMA implementation and use. The proposed EPPP Policy addresses materials commonly purchased by the SBWMA’s administrative operations, which mainly consists of office supplies such as printer paper and other program materials. Background Current SBWMA Purchasing Policy, approved via Resolution 2006-01 on November 7, 2006, specified overall procurement guidelines, thresholds and practices, rather than procurement of office and other supplies in accordance with environmental or other goals. However, the proposed EPPP Policy’s considerations will include procuring energy- or water-efficient appliances, recycled-content products, and used or otherwise environmentally-friendly goods, services and alternatives that were not specifically covered before. The SBWMA is in the process of applying for CalRecycle Organics Grant Program funding, for which Agency adoption of EPPP Policy is required. Thus, to address the Purchasing Policy gaps regarding environmentally preferable purchasing, SBWMA Mission Statement, Guiding Principles, Member Agency and other environmental goals, and CalRecycle Grant application needs, it is necessary to adopt EPPP Policy at this time. Fiscal Impact There is no immediate fiscal impact to approval of the EPPP Policy. Small long-term fiscal impacts in the form of expenses or savings may accrue given changes in purchasing of certain office supplies.

Attachments: Resolution 2019-35 Attachment A – SBWMA EPPP Policy


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4B - p2

RESOLUTION NO. 2019-35

RESOLUTION OF THE SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING AN

SBWMA ENVIRONMENTALLY PREFERRABLE PURCHASING AND PRACTICES POLICY

WHEREAS, the existing SBWMA Procurement Policy (Resolution 2006-01) does not cover Environmentally-Preferable Purchasing and Practices (EPPP) for guiding procurement of environmentally-friendly goods and services, and WHEREAS, the SBWMA is in the process of CalRecycle Organics Grant Program funding application, for which adoption of EPPP Policy is a requirement, and

WHEREAS, SBWMA Mission Statement, Guiding Principles, Member Agency and other environmental goals would be facilitated by adoption and implementation of an EPPP Policy, and

WHEREAS, SBWMA adoption of EPPP Policy would improve current Procurement Policy, help meet

SBWMA environmental goals, and meet one of SBWMA’s CalRecycle Organics Grant application requirements,

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves EPPP Policy to guide Agency practice in environmentally-friendly purchasing of goods and services. PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 27th day of June, 2019, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2019-35 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on June 27, 2019. ____________________________________ ATTEST: Jess E. (Jay) Benton, Chairperson of SBWMA _________________________________ Cyndi Urman, Clerk of the Board

Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist


June 27, 2019

____________________________________________________________________________________________________ SBMWA BOD PACKET 06/27/2019 AGENDA ITEM 4B ATTACHMENT A - p1

SBWMA ENVIRONMENTALLY PREFERABLE PURCHASING AND PRACTICES POLICY

1.0 STATEMENT OF POLICY It is the policy of SBWMA to:

• Institute practices that reduce waste by increasing product efficiency and effectiveness; • Purchase products that minimize environmental impacts, toxics, pollution, and hazards to

worker and community safety; • Purchase products that reduce greenhouse gas emissions in their production, shipping, use

and discard; and • Purchase products that include recycled content, are durable and long-lasting, conserve

energy and water, use agricultural fibers and residues, use unbleached or chlorine free manufacturing processes, are lead-free and mercury-free, and use wood from sustainably harvested forests.

2.0 PURPOSE This Policy is adopted in order to:

Minimize environmental impacts, e.g., pollution, and use of water, energy and natural resources,

Eliminate or reduce toxics that create hazards to workers and our community, Support strong recycling markets and reduction in landfilling of materials, Increase the use and availability of environmentally preferable products that protect the

environment, Identify environmentally preferable products and distribution systems, Reward manufacturers and vendors that reduce environmental impacts in their production

and distribution systems or services, and Create a model for successfully purchasing environmentally preferable products that

encourages the use of agricultural fibers, chlorine-free manufacturing processes, wood from sustainably harvested forests, and other environmentally friendly practices, and that encourages other purchasers in our community to adopt similar goals.

3.0 STRATEGIES FOR IMPLEMENTATION 3.1 Source Reduction 3.1.1 Institute practices that reduce waste, encourage reuse, and result in the purchase of

fewer products. 3.1.2 Purchase remanufactured or used products such as toner cartridges, tires, furniture,

equipment and automotive parts. 3.1.3 Consider short-term and long-term costs in comparing product alternatives. This

includes evaluation of total costs expected during the time a product is owned, including, but not limited to, acquisition, extended warranties, operation, supplies, maintenance and replacement parts, disposal costs and expected lifetime compared to other alternatives.


ENVIRONMENTALLY PREFERABLE PURCHASING POLICY


3.1.4 Purchase products that are durable, long lasting, reusable or refillable and avoid

purchasing one-time use or disposable products. 3.1.5 Specify a preference for packaging that is reusable, recyclable or compostable,

when suitable uses and programs exist. 3.1.6 Encourage vendors to take back and reuse pallets and other shipping materials.

3.1.7 Encourage suppliers of electronic equipment, including but not limited to computers, monitors, printers, and copiers, to take back equipment for reuse or environmentally sound recycling when SBWMA discards or replaces such equipment, whenever possible. Suppliers will be required to state their take back, reuse or recycling programs during the bidding process.

3.1.8 Consider provisions in contracts with suppliers of non-electronic equipment that require suppliers to take back equipment for reuse or environmentally sound recycling when SBWMA discards or replaces such equipment, whenever possible. Suppliers will be required to state their take back, reuse or recycling programs during the bidding process.

3.1.9 Promote electronic distribution of documents rather than printing or copying. 3.1.10 When producing paper documents, print and copy all documents on both sides to

reduce the use and purchase of paper. Printers and copiers shall be set to default to duplex.

3.1.11 Ensure all imaging equipment is installed with energy and resource-efficient settings

set as default.

3.2 Recycled Content Products 3.2.1 Purchase paper products with no less than the minimum recycled content standards

established by the U.S. EPA Comprehensive Procurement Guidelines, which is 30% postconsumer or total recovered fiber for most paper types. Pursue purchase of 75% minimum recycled content paper, to mirror jurisdictions’ requirements for such within CA Senate Bill 1383 (for implementation by January 1, 2022).

3.3 Toxics and Pollution Prevention Products and Practices

3.3.1 Purchase paper, paper products, and janitorial paper products that are unbleached

or are processed without chlorine or chlorine derivatives, with Processed Chlorine Free (PCF) paper as the preferred environmental option.

3.3.2 Purchase products and equipment with no lead or mercury whenever possible. For

products that contain lead or mercury, SBWMA should give preference to those products with lower quantities of these metals and to vendors with established lead




and mercury recovery programs. In addition, whenever lead- or mercury-containing products require disposal, SBWMA will dispose of those products in the most environmentally safe manner possible. All fluorescent lamps and batteries will be recycled.

3.4 Bio-Based Products

3.4.1 Use bio-based plastic products that are biodegradable and compostable, such as

bags, film, food and beverage containers, and cutlery, to the maximum extent practicable, as facilitated by San Francisco Department of Environment list here: https://sfenvironment.org/sites/default/files/fliers/files/sfe_zw_vendors_fsw.pdf.

3.4.2 Purchase compostable plastic products that meet American Society for Testing and

Materials (ASTM) standards as found in ASTM D6400. Meet ASTM D6868 standards for biodegradable plastics used as coatings on paper and other compostable substrates.

3.4.3 Ask vendors to provide proof of compliance with ASTM standards for compostable,

biodegradable and degradable plastic products upon request. One acceptable proof of compliance for compostable plastic products will be certification by the Biodegradable Products Institute (BPI).

4.0 RESPONSIBILITIES

4.1 The health and safety of workers and citizens is of utmost importance and takes

precedence over all other practices. Nevertheless, SBWMA recognizes its duty to act in a fiscally responsible as well as a timely manner.

4.2 Nothing contained in this policy shall be construed as requiring a department, purchaser or contractor to procure products that do not perform adequately for their intended use, exclude adequate competition, risk the health or safety of workers and citizens, or are not available at a reasonable price in a reasonable period of time.

4.3 Nothing contained in this policy shall be construed as requiring SBWMA,

department, purchaser, or contractor to take any action that conflicts with local, state or federal requirements.

4.4 SBWMA has made significant investments in developing a successful recycling

system and recognizes that recycled content products are essential to the continuing viability of that recycling system and for the foundation of an environmentally sound production system. Therefore, to the greatest extent practicable, recycled content shall be included in products that also meet other specifications, such as chlorine free or bio-based.

5.0 IMPLEMENTATION




5.1 The Management Analyst and Clerk of the Board/Office Manager shall implement this policy in coordination with other appropriate SBWMA personnel.

5.2 Require successful bidders during the RFP or RFQ process to certify in writing that

the environmental attributes claimed in competitive bids are accurate. In compliance with State law, vendors shall be required to specify the minimum or actual percentage of recovered and post-consumer material in their products, even when such percentages are zero.

5.3 Upon request, buyers making the selection from competitive bids shall be able to

provide justification for product choices that do not meet the environmentally preferable purchasing criteria in this policy.

5.4 Encourage vendors, contractors and grantees to comply with applicable sections of this policy for products and services provided to SBWMA.

6.0 PROGRAM EVALUATION

6.1 The Management Analyst and Clerk of the Board/Office Manager shall periodically evaluate the success of this policy’s implementation.

7.0 DEFINITIONS

7.1 “American Society for Testing and Materials” means ASTM International, an open forum for the development of high quality, market relevant international standards use around the globe.

7.2 “Bio-Based Products” means commercial or industrial products (other than food or

feed) that utilize agricultural crops or residues but does not include products made from forestry materials.

7.3 “Biodegradable plastic” means the degradation of the plastic must occur as a result

of the action of naturally occurring microorganisms. 7.4 “Biodegradable Products Institute” (BPI) is a multi-stakeholder association of key

individuals and groups from government, industry and academia, which promotes the use, and recycling of biodegradable polymeric materials (via composting). BPI does not create standards but certifies products that demonstrate they meet the requirements in ASTM D6400 or D6868, based on testing in an approved laboratory.

7.5 “Buyer” means anyone authorized to purchase or contract for purchases on behalf

of this jurisdiction or its subdivisions. 7.6 “Compostable plastic” means plastic that is biodegradable during composting to

yield carbon dioxide, water and inorganic compounds and biomass, at a rate consistent with other known compostable materials and leaves no visually distinguishable or toxic residues.




7.7 “Contractor” means any person, group of persons, business, consultant, designing

architect, association, partnership, corporation, supplier, vendor or other entity that has a contract with SBWMA or serves in a subcontracting capacity with an entity having a contract with SBWMA for the provision of goods or services.

7.8 “Degradable plastic” means plastic that undergoes significant changes in its

chemical structure under specific environmental conditions.

7.9 "Post-consumer Material" means a finished material which would normally be disposed of as a solid waste, having reached its intended end-use and completed its life cycle as a consumer item, and does not include manufacturing or converting wastes.

7.10 “Pre-consumer Material” means material or by-products generated after

manufacture of a product is completed but before the product reaches the end-use consumer. Pre-consumer material does not include mill and manufacturing trim, scrap, or broke which is generated at a manufacturing site and commonly reused on-site in the same or another manufacturing process.

7.11 “Recovered Material” means fragments of products or finished products of a

manufacturing process, which has converted a resource into a commodity of real economic value, and includes pre-consumer and post-consumer material but does not include excess resources of the manufacturing process.

7.12 “Recycled Content” means the percentage of recovered material, including pre-

consumer and post-consumer materials, in a product.

7.13 “Recycled Content Standard” means the minimum level of recovered material and/or post-consumer material necessary for products to qualify as “recycled products.”

7.14 “Recycled Product” means a product that meets SBWMA’s recycled content policy

objectives for post-consumer and recovered material.

7.15 “Remanufactured Product” means any product diverted from the supply of discarded materials by refurbishing and marketing said product without substantial change to its original form.

7.16 “Reused Product” means any product designed to be used many times for the same

or other purposes without additional processing except for specific requirements such as cleaning, painting or minor repairs.

7.17 “Source Reduction” refers to products that result in a net reduction in the generation

of waste compared to their previous or alternate version and includes durable, reusable and remanufactured products; products with no, or reduced, toxic constituents; and products marketed with no, or reduced, packaging.

8.0 EFFECTIVE DATES




8.1 This policy shall take effect on June 27, 2019.


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4C

STAFF REPORT To: SBWMA Board Members From: Hilary Gans, Senior Facility & Contract Manger Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Authorizing the Executive Director to Execute a not-to-exceed $128,620

Contract with Tanner Pacific for Construction Management services at the Shoreway facility for FY19/20.

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-36 attached hereto authorizing the following action: Resolution Authorizing the Executive Director to Execute a Contract with Tanner Pacific for Construction Management Services for a not-to-exceed amount of $128,620 for FY19/20. Analysis SBWMA staff requires construction management support to complete Shoreway maintenance and capital projects. The Board approved FY19/20 Budget contained several capital projects and Attachment A provides the Professional Services Agreement with a detailed list of the projects to be completed at Shoreway involving engineering and inspection services support from Tanner Pacific. Staff is looking to Tanner Pacific to assist in the construction management of these projects by: developing technical specifications, engineered drawings, and public bidding of Shoreway projects; and after project award, construction management services including permit coordination, management of request for information (RFI), inspection of completed work, and progress payment sign-off. Tanner Pacific work for the SBWMA will be performed on a time & materials basis. TannerPacific has provided a cost estimate (Attachment A) for the total level-of-effort for Construction Management services for FY19/20. Tanner Pacific’s cost effectiveness was evaluated against other CM firms and their cost/hour bill rate is reasonable for the services required. Background Tanner Pacific was selected by Staff because the company has demonstrated a keen awareness of the SBWMA’s needs for strong on-site support in coordination with ongoing facility operations. Tanner Pacific is a local construction management firm that has extensive knowledge of the Shoreway Environmental Center and whose professional staff has worked on the Shoreway Master Plan projects.

Fiscal Impact The estimated cost for Construction Management offered by Tanner Pacific over the 1-year term of the planned construction projects is not-to-exceed $128,620. The costs for the Construction Management services will be drawn from a combination of the 1) the operations budget line item Facility Improvement Oversight which has a


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4C - p2

budget amount of $75,000 and 2) assigned to Capital Expense projects where the construction management services are used to support the project.

Attachments: Resolution 2019-36 Attachment A – Professional Services Agreement with Tanner Pacific for Construction Management Services



RESOLUTION NO. 2019-36 RESOLUTION OF THE SOUTH BAYSIDE WASTE

MANAGEMENT AUTHORITY BOARD OF DIRECTORS RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A

CONTRACT WITH TANNER PACIFIC FOR CONSTRUCTION MANAGEMENT SERVICES FOR A NOT-TO-EXCEED AMOUNT OF $128,620 FOR FY19/20

WHEREAS, the SBWMA owns and maintains the Shoreway Environmental Center,

WHEREAS, the SBWMA requires construction management assistance in performance of the various

capital and maintenance projects, NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves a Resolution Authorizing the Executive Director to Execute a Contract with Tanner Pacific for Construction Management services for a not-to-exceed amount of $128,620 for FY19/20. PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California the 27nd Day of June, 2019 by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2019-36 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on June 27, 2019. ______________________________ ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA _________________________________ Cyndi Urman, Board Secretary



PROFESSIONAL SERVICES AGREEMENT FOR

CONSTRUCTION MANAGEMENT SERVICES AT THE SHOREWAY FACILITY FOR FY19/20

This Agreement is made and entered into as of the 27th day of June, 2019 by and between the SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY hereinafter called "AUTHORITY" and Tanner Pacific hereinafter called "CONSULTANT". RECITALS This Agreement is entered into with reference to the following facts and circumstances: A. That AUTHORITY desires to engage CONSULTANT to provide professional

services; B. That CONSULTANT is qualified to provide such services to the AUTHORITY and; C. That the AUTHORITY has elected to engage the services of CONSULTANT upon

the terms and conditions as hereinafter set forth.

1. Services. The services to be performed by CONSULTANT under this Agreement shall include those services set forth in Exhibit A, which is, by this reference, incorporated herein and made a part hereof as though it were fully set forth herein.

Performance of the work specified in said Exhibit A is hereby made an obligation of CONSULTANT under this Agreement, subject to any changes that may be made subsequently hereto upon the mutual written agreement of the said parties.

Where in conflict, the terms of this Agreement supersede and prevail over any terms set forth in Exhibit A.

2. Term; Termination. (a) The term of this Agreement shall commence upon the date

hereinabove written and shall expire upon completion of performance of services hereunder by CONSULTANT.

(b) Notwithstanding the provisions of (a) above, either party may terminate

this Agreement without cause by giving written notice not less than ten (10) days prior to the effective date of termination, which date shall be included in said notice. In the event of such termination, AUTHORITY shall compensate CONSULTANT for services rendered, and reimburse CONSULTANT for costs and expenses incurred, to the date of termination, calculated in accordance with the provisions of paragraph 3.

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2

In ascertaining the services actually rendered to the date of termination, consideration shall be given both to completed work and work in process of completion. Nothing herein contained shall be deemed a limitation upon the right of AUTHORITY to terminate this Agreement for cause, or otherwise to exercise such rights or pursue such remedies as may accrue to AUTHORITY hereunder.

3. Compensation; Expenses; Payment. AUTHORITY shall compensate

CONSULTANT for all services performed by CONSULTANT hereunder in an amount based upon CONSULTANT’s hourly rates during the time of the performance of said services. A copy of CONSULTANT’s hourly rates for which services hereunder shall be performed are set forth in CONSULTANT’s fee schedule included in Exhibit A, attached hereto and by this reference incorporated herein.

Notwithstanding the foregoing, the combined total of compensation and reimbursement of costs payable hereunder shall not exceed the sum one hundred twenty-eight thousand and six hundred twenty dollars ($128,620) unless the performance of services and/or reimbursement of costs and expenses in excess of said amounts have been approved in advance of performing such services or incurring such costs and expenses by AUTHORITY’s Executive Director (for contracts less than $50,000) or AUTHORITY Board (for contracts $50,000 or more) evidenced by motion duly made and carried.

Compensation and reimbursement of costs and expenses hereunder shall be payable upon monthly billing therefor by CONSULTANT to AUTHORITY, which billing shall include an itemized statement, briefly describing by task and labor category or cost/expense items billed as per Exhibit B.

4. Additional Services. In the event AUTHORITY desires the performance of

additional services not otherwise included within the services described in Exhibit A, such services shall be authorized in advance of the performance thereof by AUTHORITY’s Executive Director (for contracts less than $50,000) or AUTHORITY Board (for contracts $50,000 or more) by motion duly made and carried. Such amendment to this Agreement shall include a description of the services to be performed thereunder, the maximum compensation and reimbursement of costs and expenses payable therefor, the time of performance thereof, and such other matters as the parties deem appropriate for the accomplishment of such services. Except to the extent modified by written amendment, all other terms and conditions of this Agreement shall be deemed incorporated in each such amendment.

5. Records. CONSULTANT shall keep and maintain accurate records of all

time expended and costs and expenses incurred relating to services to be performed by CONSULTANT hereunder. Said records shall be available to AUTHORITY for review and copying during regular business hours at

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3

CONSULTANT’s place of business or as otherwise agreed upon by the parties.

6. Authorization. This Agreement becomes effective when endorsed by both

parties in the space provided below.

7. Reliance on Professional Skill of CONSULTANT. CONSULTANT represents that it has the necessary professional skills to perform the services required and the AUTHORITY shall rely on such skills of the CONSULTANT to do and perform the work. In performing services hereunder CONSULTANT shall adhere to the standards generally prevailing for the performance of expert consulting services similar to those to be performed by CONSULTANT hereunder.

8. Documents. All documents, plans, drawings, renderings, and other

papers, or copies thereof, as finally rendered, prepared by CONSULTANT pursuant to the terms of this Agreement, shall, upon preparation and delivery to AUTHORITY, become the property of AUTHORITY.

9. Relationship of Parties. It is understood that the relationship of

CONSULTANT to the AUTHORITY is that of an independent contractor and all persons working for or under the direction of CONSULTANT are its agents or employees and not agents or employees of the AUTHORITY.

10. Schedule. CONSULTANT shall adhere to the schedule set forth in Exhibit

A; provided, that AUTHORITY shall grant reasonable extensions of time for the performance of such services occasioned by governmental reviews of CONSULTANT’s work product or other unavoidable delays; provided, further, that such unavoidable delay shall not include strikes, lockouts, work stoppages, or other labor disturbances conducted by, or on behalf of, CONSULTANT’s officers or employees.

CONSULTANT acknowledges the importance to AUTHORITY of AUTHORITY’s Project schedule and agrees to put forth its best professional efforts to perform its services under this Agreement in a manner consistent with that schedule.

11. Indemnity. To the fullest extent allowed by law, CONSULTANT hereby

agrees to defend, indemnify, and save harmless AUTHORITY, its boards, officers, employees and agents, from and against any and all claims, suits, actions liability, loss, damage, expense, cost (including, without limitation, costs and fees of litigation) of every nature, kind or description, which may be brought against, or suffered or sustained by, AUTHORITY, its boards, officers, employees, and agents caused by, or alleged to have been caused by, the negligence, intentional tortuous act or omission, or willful misconduct of CONSULTANT, its officers, employees, subcontractors or agents in the performance of any services or work pursuant to this Agreement.

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The duty of CONSULTANT to indemnify and save harmless, as set forth herein, shall include the duty to defend as set forth in Section 2778 of the California Civil Code. CONSULTANT’s responsibility for such defense and indemnity obligations shall survive the termination or completion of this Agreement for the full period of time allowed by law. The defense and indemnification obligations of this agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained within this Agreement.

12. Insurance. CONSULTANT shall acquire and maintain Workers’

Compensation, employer’s liability, commercial general liability, owned and non-owned and hired automobile liability, and professional liability insurance coverage relating to CONSULTANT’s services to be performed hereunder covering AUTHORITY’s risks in form subject to the approval of the AUTHORITY Attorney and/or AUTHORITY’s Risk Manager. The minimum amounts of coverage corresponding to the aforesaid categories of insurance per insurable event, shall be as follows:

Insurance Category Minimum Limits

Workers’ Compensation statutory minimum

Employer’s Liability $1,000,000 per accident for bodily injury

or disease

Commercial General Liability $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury, personal injury and property damage

Automobile Liability $1,000,000 per accident for bodily injury

and property damage (coverage required to the extent applicable to CONSULTANT’s vehicle usage in performing services hereunder)

Professional Liability $1,000,000 per claim and aggregate

It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits shall be available to the AUTHORITY as an Additional Insured. Furthermore, the requirements for coverage and limits shall be the greater of either (1) the minimum coverage and limits specified in this Agreement or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named Insured.

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CONSULTANT agrees to include with all subcontractors in their subcontracts the same requirements and provisions of this agreement including the indemnity and insurance requirements to the extent they apply to the scope of the subcontractor’s work. Subcontractors hired by CONSULTANT shall agree to be bound to CONSULTANT and AUTHORITY in the same manner and to the same extent as CONSULTANT is bound to AUTHORITY under this Agreement and its accompanying documents. Subcontractors shall further agree to include these same provisions with any sub-subcontractors. A copy of the indemnity and insurance provisions of this Agreement will be furnished to the Subcontractor upon request. CONSULTANT shall require all subcontractors to provide a valid certificate of insurance and the required endorsements included in the subcontract agreement and will provide proof of compliance to the AUTHORITY prior to commencement of any work by the subcontractor. Concurrently with the execution of this Agreement, CONSULTANT shall, on the Insurance Coverage form provided in Exhibit C, or equivalent, furnish AUTHORITY with certificates and copies of information or declaration pages of the insurance required hereunder and, with respect to evidence of commercial general liability and automobile liability insurance coverage, original endorsements:

(a) Precluding cancellation or reduction in per occurrence limits before

the expiration of thirty (30) days (10 days for nonpayment) after AUTHORITY shall have received written notification of cancellation in coverage or reduction in per occurrence limits by first class mail;

(b) Naming the South Bayside Waste Management Authority, its

officers, boards, employees, and agents, as additional insureds; and

(c) Providing that CONSULTANT’s insurance coverage shall be

primary insurance with respect to South Bayside Waste Management Authority, its officers, boards, employees, and agents, and any insurance or self-insurance maintained by AUTHORITY for itself, its officers, boards, employees, and agents shall be in excess of CONSULTANT’s insurance and not contributory with it. CONSULTANT and its insurer may not seek contribution from AUTHORITY’s insurance or self-insurance.

The limits of insurance required in this agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of AUTHORITY, to the extent required by this Agreement, before the AUTHORITY’s insurance or self-insurance may be called upon to protect AUTHORITY as a named Insured.

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6

All self-insured retentions (SIR) must be disclosed to AUTHORITY for approval and shall not reduce the limits of liability coverage. Policies containing and SIR provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named CONSULTANT/Named Insured or AUTHORITY. AUTHORITY reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to exercise later. Any and all Subcontractors shall agree to be bound to CONSULTANT and AUTHORITY in the same manner and to the same extent as CONSULTANT is bound to AUTHORITY under this Agreement. Subcontractors shall further agree to include the same requirements and provisions of this Agreement, including the indemnity and insurance requirements, in any agreement with sub-subcontractors to the extent that they apply to the scope of the sub-subcontractor’s work. A copy of the indemnity and insurance provisions of this Agreement shall be furnished to any subcontractor upon request. CONSULTANT shall maintain insurance as required by this Agreement to the fullest amount allowed by law and shall maintain insurance for a minimum of five (5) years following completion of this project or service. In the event CONSULTANT fails to obtain or maintain completed operations coverage as required by this Agreement, the AUTHORITY at its sole discretion may purchase the coverage required and the cost will be paid by CONSULTANT.

13. WORKERS' COMPENSATION. CONSULTANT certifies that he is aware

of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and CONSULTANT certifies that he will comply with such provisions before commencing the performance of the work of this agreement.

14. NON-DISCRIMINATION. The CONSULTANT will not discriminate against

any employee or applicant for employment because of race, color, religion, sex or national origin. The CONSULTANT will take affirmative action to ensure that applicants are employed and the employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to the following: employment, advancement, demotion, transfer, recruitment, or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONSULTANT shall at all times be in compliance with the requirements of the Federal Americans With Disabilities Act (Public Law 101-336) which prohibits discrimination on the basis of disability by public entities. The CONSULTANT agrees to post in conspicuous places available to

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7

employees and applicants for employment any notices provided by the AUTHORITY setting forth the provisions of this non-discrimination clause.

15. Notice. All notices required by this Agreement shall be given to the

AUTHORITY and CONSULTANT in writing, by first class mail, postage prepaid, addressed as follows:

AUTHORITY: Rethink Waste

610 Elm Street, Suite 202 San Carlos, CA 94070 Attention: Hilary Gans, Sr. Operations and Contracts Manager Grant Ligon, Management Analyst III

CONSULTANT: Tanner Pacific

William Tanner 751 Laurel Street San Carlos, CA 94070 Phone: 925-766-1800

16. Non-Assignment. This Agreement is not assignable either in whole or in part.

17. Amendments. This Agreement may be amended or modified only by

written agreement signed by both parties. 18. Validity. The invalidity in whole or in part of any provision of this

Agreement shall not void or affect the validity of any other provision of this Agreement.

19. Governing Law. This Agreement shall be governed by the laws of the

State of California and any suit or action initiated by either party shall be brought in the County of San Mateo, California. In the event of litigation between the parties hereto to enforce any provision of the Agreement, the unsuccessful party will pay the reasonable attorney’s fees and expenses of litigation of the successful party.

20. Mediation. Should any dispute arise out of this Agreement, the parties

shall meet in mediation and attempt to reach a resolution with the assistance of a mutually acceptable mediator. Neither party shall be permitted to file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution. The costs of the mediator, if any, shall be paid equally by the parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes of the settlement and each party shall bear its own legal costs.

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8

21. Conflict of Interest. VENDOR may serve other clients, but none that would place VENDOR in a "conflict of interest" as that term is defined in State law.

22. Entire Agreement. This Agreement, including Exhibits A, B, and C,

comprises the entire Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written by their respective officers duly authorized in that behalf.

SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY Dated: _________________________________

Jay Benton, Board President ATTEST:

Dated: ________________________________ Cyndi Urman, Board Secretary

APPROVED AS TO FORM

Dated:

Jean Savaree, Legal Counsel

CONSULTANT Dated:

William Tanner, Principal

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EXHIBIT A

SCOPE OF WORK, WORK SCHEDULE, AND FEE SCHEDULE

FOR CONSTRUCTION MANAGEMENT SERVICES AT THE SHOREWAY FACILITY FOR

FY19/20

Tanner Pacific Construction Management List of Shoreway Project with Level-of-Effort cost estimates for Construction Management Support For FY19/20

Eng/Insp Total Project Budget Est. CM Budget

MRF Building Siding Repair Andrew $10,000 $2,500 MRF Building Push-wall Const Andrew $11,848 $5,120 Stormwater Treatment Const. Andrew $1,200,000 $38,000 Additional Fire Suppression Andrew $100,000 $20,000 Public Recycling Center Conversion Andrew NA $5,000 MRF Phase I $7,000,000 $40,000 O2E Pilot and Planning with SVCW Bill Tanner NA $12,000 MISC. NA $6,000 TOTAL $128,620

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EXHIBIT B

SAMPLE INVOICE

Items highlighted yellow must be included on the invoice for approval; format of invoice is just a sample

INVOICE

Your Company Name Address

City State Zip Phone Number

Date: Project Number: Invoice Number:

RethinkWaste Attn: Project Manager 610 Elm Street, Suite 202 San Carlos, CA 94070

SBWMA Project: Project Title Purchase Order Number: PO Number Invoice for Professional Services from 1/1/15 to 1/31/15

TASK 1 TITLE/Description Professional Personnel: Hours: Rate: Amount: John Doe 1.5 $200.00 $300.00 Jane Smith 1.0 $100.00 $100.00 TOTALS: 2.0 $400.00

TOTAL THIS TASK: $400 TASK 2 TITLE/Description

Professional Personnel: Hours: Rate: Amount: John Doe 3.0 $200.00 $600.00 TOTALS: 3.0 $600.00

TOTAL THIS TASK: $600.00

TOTAL THIS INVOICE $1,000.00

BILLING LIMITS: Total Contract Amount $10,000.00 Prior Invoices 0% $0.00 Current Contract Balance 100% $10,000.00 This Invoice 10% $1,000.00 Contract Balance 90% $9,000.00

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11

EXHIBIT C

INSURANCE FORMS

CONSULTANT shall provide, in addition to the Certificates of Insurance, original Endorsement affecting the coverages specified in Section 12 - INSURANCE of the Agreement on the attached form. No substitute form will be accepted.

ATTACHED

1. Insurance Coverage Form

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ANY PROPRIETOR/PARTNER/EXECUTIVEOFFICER/MEMBER EXCLUDED?

INSR ADDL SUBRLTR INSD WVD

PRODUCER CONTACTNAME:

FAXPHONE(A/C, No):(A/C, No, Ext):

E-MAILADDRESS:

INSURER A :

INSURED INSURER B :

INSURER C :

INSURER D :

INSURER E :

INSURER F :

POLICY NUMBERPOLICY EFF POLICY EXP

TYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY)

AUTOMOBILE LIABILITY

UMBRELLA LIAB

EXCESS LIAB

WORKERS COMPENSATIONAND EMPLOYERS' LIABILITY

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

AUTHORIZED REPRESENTATIVE

EACH OCCURRENCE $DAMAGE TO RENTEDCLAIMS-MADE OCCUR $PREMISES (Ea occurrence)

MED EXP (Any one person) $

PERSONAL & ADV INJURY $

GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $PRO-POLICY LOC PRODUCTS - COMP/OP AGGJECT

OTHER: $COMBINED SINGLE LIMIT

$(Ea accident)

ANY AUTO BODILY INJURY (Per person) $OWNED SCHEDULED

BODILY INJURY (Per accident) $AUTOS ONLY AUTOS

HIRED NON-OWNED PROPERTY DAMAGE$AUTOS ONLY AUTOS ONLY (Per accident)

$

OCCUR EACH OCCURRENCE

CLAIMS-MADE AGGREGATE $

DED RETENTION $

PER OTH-STATUTE ER

E.L. EACH ACCIDENT

E.L. DISEASE - EA EMPLOYEE $If yes, describe under

E.L. DISEASE - POLICY LIMITDESCRIPTION OF OPERATIONS below

INSURER(S) AFFORDING COVERAGE NAIC #

COMMERCIAL GENERAL LIABILITY

Y / N

N / A(Mandatory in NH)

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIODINDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION

© 1988-2015 ACORD CORPORATION. All rights reserved.ACORD 25 (2016/03)

CERTIFICATE OF LIABILITY INSURANCEDATE (MM/DD/YYYY)

$

$

$

$

$

The ACORD name and logo are registered marks of ACORD

5/30/2019

20443

Tanner Pacific, Inc.751 Laurel St #609San Carlos, CA 94070

2050810346

A 2,000,000

X 6020994638 3/11/2019 3/11/2020 300,000

10,000

2,000,000

4,000,000

4,000,000

3,000,000B6046180640 3/11/2019 3/11/2020 3,000,000

10,000C

EIG279163700 3/11/2019 3/11/2020 1,000,000

1,000,000

1,000,000

D Errors & Omissions ANE170775519 3/11/2019 $2mil Limit

South Bayside Waste Management Authority "SBWMA," its employees, officers and member entities are named as Additional Insured as required by writtencontract, per attached endorsement.

South Bayside Waste Management Authority610 Elm Street Suite 202San Carlos, CA 94070

TANNPAC-01 CDOWLING

Stratton Agency, Inc.643 Bair Island RoadSuite 402Redwood City, CA 94063

Continental Casualty CompanyValley Forge Insurance CompanyEmployers Preferred Insurance CompanyLloyds of London

X

3/11/2020

XX

X

X

X

X

_________________________________________________ SBWMA BOD PACKET 06/27/2019



ANY PROPRIETOR/PARTNER/EXECUTIVEOFFICER/MEMBER EXCLUDED?

INSR ADDL SUBRLTR INSD WVD

PRODUCER CONTACTNAME:

FAXPHONE(A/C, No):(A/C, No, Ext):

E-MAILADDRESS:

INSURER A :

INSURED INSURER B :

INSURER C :

INSURER D :

INSURER E :

INSURER F :

POLICY NUMBER POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY)

AUTOMOBILE LIABILITY

UMBRELLA LIAB

EXCESS LIAB

WORKERS COMPENSATIONAND EMPLOYERS' LIABILITY

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

AUTHORIZED REPRESENTATIVE

EACH OCCURRENCE $DAMAGE TO RENTEDCLAIMS-MADE OCCUR $PREMISES (Ea occurrence)

MED EXP (Any one person) $

PERSONAL & ADV INJURY $

GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $PRO-POLICY LOC PRODUCTS - COMP/OP AGGJECT

OTHER: $COMBINED SINGLE LIMIT

$(Ea accident)

ANY AUTO BODILY INJURY (Per person) $OWNED SCHEDULED

BODILY INJURY (Per accident) $AUTOS ONLY AUTOSHIRED NON-OWNED PROPERTY DAMAGE

$AUTOS ONLY AUTOS ONLY (Per accident)

$

OCCUR EACH OCCURRENCECLAIMS-MADE AGGREGATE $

DED RETENTION $PER OTH-STATUTE ER

E.L. EACH ACCIDENT

E.L. DISEASE - EA EMPLOYEE $If yes, describe under

E.L. DISEASE - POLICY LIMITDESCRIPTION OF OPERATIONS below

INSURER(S) AFFORDING COVERAGE NAIC #

COMMERCIAL GENERAL LIABILITY

Y / NN / A

(Mandatory in NH)

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIODINDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION

© 1988-2015 ACORD CORPORATION. All rights reserved.ACORD 25 (2016/03)

CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY)

$

$

$

$

$

The ACORD name and logo are registered marks of ACORD

TANNE-1 OP ID: KE

05/30/2019

StrattonR C Nielsen Insurance Services4349 Hazel Avenue, Ste. 100Fair Oaks, CA 95628Stratton

916-965-9200 916-965-9222

Truck Insurance Exchange

Tanner Pacific Inc.751 Laurel Street #609San Carlos, CA 94070

1,000,000A606742115 05/02/2019 05/02/2020

XX X

10 day notice of cancellation for non payment of premium, 30 day notice for non renewal

SOUTHBA

South Bayside WasteManagement Authority610 Elm Street #202San Carlos, CA 94070

916-965-9200

21709

_________________________________________________ SBWMA BOD PACKET 06/27/2019



_________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4D- p1

4D

STAFF REPORT To: SBWMA Board Members From: John Mangini, Senior Finance Manager Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Accepting the Findings from the Audit of Contractor’s Financial and

Operational Reporting in 2018 by R3 Consultants Recommendation It is recommended that the SBWMA Board approve resolution #2019-37 attached accepting the findings from the audit of SBR’s and Recology’s 2018 financial and operational reporting by R3 Consultants. Summary The Franchise Agreement with Recology and Operating Agreement with SBR prescribe standards for reporting and operating system performance. Under contract to the SBWMA, R3 Consultants performed the annual independent review of the contractor’s operational and financial reports for 2018. Overall, the review found that both contractors are in substantial compliance with requirements of the Agreements and only minor financial and operational corrections were recommended by R3 Consulting. Analysis The information collected and reported to the SBWMA by the contractors is substantially self-reported (e.g., all Shoreway tonnage data, collection route data, and call center performance). To ensure the integrity of this reported data and payments, the SBWMA conducts an annual third-party review to verify that SBR and Recology obtained, compiled, and reported data to the SBWMA and Member Agencies accurately and that the companies have proper management controls in place. The audit consists of two parts: a financial systems audit and an audit of quarterly and annual operational reports. The financial systems audit includes a review of reports with a direct financial impact such as Recology’s Revenue Reconciliation ($106,775,802) and SBR’s payment to the SBWMA for gross commodity revenue ($7,666,000) and public tip fee revenue ($11,527,000). In January 2019, R3 Consulting commenced the annual review for 2018 and concluded their activities by issuing a final findings and recommendations report that was issued in June 2019. R3 identified several areas where both Recology and SBR were found to be substantially compliant with the operational and reporting requirements of the Facility Operating Agreement and Franchise Agreements for CY 2018. The single most important review step of this audit was to verify the data in Recology’s 2018 Revenue Reconciliation in total and by Member Agency. The following financial stats have now been verified:

1. Gross revenue billed of $106,755,802 2. Disposal fees paid to the SBWMA of $32,317,596 3. Franchise and other Fees paid to Member Agencies of $14,905,894 4. The net surplus/<shortfall> balance for each agency ranging from $512,679 to <$232,878>

No discrepancies were found.


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4D - p2

R3 has determined that Recology is stopping service due to customer non-payment (delinquency) during the audit of the 2018 customer service data. Attachment H, “Delinquent Payment Policy,” differs among Member Agencies. Four Member Agencies allow for service stops for delinquency. R3 has separately analyzed the service stops for this year’s audit and observed that customers from every Member Agency are experiencing some service stops due to account delinquency. Please note that many service stops appear to be one-time stops for a particular week of service and not permanent service stops. Recology has responded that they need to handle in this way to send delinquent accounts to collections. R3 recommends that Member Agencies and Recology discuss the matter of potential service stops for non-payment if not allowed by Agreement. Additional “Findings” are summarized for each contractor in Table 1 & Table 2 below and a summary report is provided in Attachment A. Recology Audit:

The review by R3 focused on validating the information provided by Recology in the company’s Annual Report for 2018 issued to the Member Agencies on February 14, 2019. The review focused on:

- Verify tons collected. - Verify customer service data. - Verify calculation of liquidated damages and performance incentive/disincentive payments.

South Bay Recycling (SBR) Audit:

Table 1. RECOLOGY Review Findings

Report Section

Area of Review Findings Amount

2.1 Reports -The Quarterly & Annual Reports were complete & compliant None

2.2 Tonnage Data -Accurate & compliant None

2.3 Customer Service

- Some inconsistencies were found between source data and reports.

- Five incorrectly coded tickets were found.

None

2.4 Liquidated Damages & Incentive/ disincentive

- Recology self-reported and paid LD amounting to $19,400. R3 found they underpaid by $1,250

- Recology self-reported incentive payments amounting to $26,475. R3 found that Recology owes $60 less than reported

$1,250

<$60>

4 Tonnage Data -Minor variances between SBR & Recology inbound tonnage were found. None

Table 2. SBR Review Findings

Report Section

Area of Review Findings Amount

4.1 Reports -The Quarterly & Annual Reports were compliant. None

4.2 Tonnage Data -Minor variances between SBR & Recology inbound tonnage were found. None

4.4 Liquidated Damages

-No LD were reported or paid by SBR. None



Since the tonnage, material category, and tip fee payment information recorded at the scales by SBR serves as the “base-data” for the entire SBWMA waste handling function as well as the basis for all of the financial transactions relating to Shoreway facility operations, it is critical that the information be accurately collected, recorded, and reported by SBR. While the SBWMA staff reviews the tonnage information reported by SBR on a monthly basis, the review conducted by R3 serves as an important third-party check on SBR’s data and data management. The scope of the annual operational audit includes the following components:

- Verify SBR’s reported data is consistent with Recology’s reports- Verify accuracy of SBR’s reported in‐bound and shipped tonnage data

Based on R3’s review of SBR operations and reports, only minor errors were identified in SBR’s reporting and tonnage. SBR was not assessed any liquidated damages in 2018.

Background The Collection Services Franchise Agreements with Recology and the Facility Operations Agreement with SBR prescribe standards for reporting and operating performance. The information contained in the contractor’s reports is substantially self-reported by both companies e.g., all tonnage data from the Shoreway scales and the collection route and call center performance data as well as the collection Liquidated Damage events identified in Attachment J of the Franchise Agreements. To ensure the integrity of the data reported by Recology and SBR, the SBWMA conducts a third-party audit of the data managed and reported by both companies (the audit included assessing Recology’s call center functions to ensure the accuracy of transcribing and reporting information, complaints and requests for service from customers. The scope of auditing SBR’s operations was limited to the scale house operations (i.e., tonnage reporting) and reporting of commodity revenues). The auditing work reveals how well both Recology and SBR obtained, compiled and reported data to the Member Agencies per the requirements prescribed in the Franchise Agreement(s) and Shoreway Facility Operations Agreement, respectively.

Fiscal Impact The cost for R3 to conduct this audit was $49,830 and is included in the FY18/19 Budget.

Attachments: Resolution 2019-37 Attachment A – R3 Final Report Summary: Collection Services and Facility Operations Systems and Financial Audit for 2018 Attachment B - Full report (52 pages): R3 Consulting 2018 Final Report - available online only at www.rethinkwaste.org


https://www.rethinkwaste.org/uploads/media_items/062719-4-d-attach-b.original.pdf






MANAGEMENT AUTHORITY BOARD OF DIRECTORS ACCEPTING THE FINDINGS FROM THE AUDIT REPORT OF THE CONTRACTOR’S

2018 FINANCIAL AND OPERATIONAL REPORTING BY R3 CONSULTANTS

WHEREAS, the South Bayside Waste Management Authority (SBWMA) Board of Directors entered into a contract with R3 Consulting Group for the purpose of providing a Collection Services and Facility Operations Reports, Tonnage Data and Customer Service Systems Auditing Project for 2018 and a Financial Systems

Auditing Project for 2018, and

WHEREAS, the R3 Consulting Group has completed the audit work and submitted their report for review, and

WHEREAS, attached as Exhibit A hereto is the R3 audit report summary.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority accepts the findings from the audit report of the contractor’s financial and operational reporting in 2018 by R3 Consultants.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 27th day of June 2019, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2019-37 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on June 27, 2019.

ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA

_________________________________ Cyndi Urman, Board Secretary

Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist.


SUBMITTED TO:

RethinkWaste (SBWMA) June 19, 2019

FINAL REPORT

Collection Services and Facility Operations Reports, Tonnage, Data and Customer Service Systems Audit and Financial Systems Audit

Report Submitted Digitally

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 4D ATTACHMENT A - p1


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Table of Contents

SBWMA | 2018 Audits | FINAL REPORT

TOC - i

Table of ContentsSection 1. Introduction.......................................................................................................................... 1

1.1 Background .............................................................................................................................. 1

1.2 Work Scope .............................................................................................................................. 1 1.3 Summary of Findings ............................................................................................................... 3

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Section 1

Introduction


Page 1 of 6

Section 1. Introduction 1.1 Background The South Bayside Waste Management Authority (RethinkWaste) is a joint powers authority of twelve Member Agencies (Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Hillsborough, Menlo Park, Redwood City, San Carlos, San Mateo, the County of San Mateo and the West Bay Sanitary District) in San Mateo County.

The twelve RethinkWaste Member Agencies have exclusive franchise agreements with Recology San Mateo County (Recology) for the collection of solid waste, recyclable materials and organic materials. Recology provides collection services to approximately 93,000 households and 9,000 businesses in the RethinkWaste service area. Recology submits an annual Revenue Reconciliation (Reconciliation) report to SBWMA that identifies net revenues retained by Recology as compared to the annual compensation owed to Recology by each Member Agency, which is approved annually by the SBWMA Board of Directors.

RethinkWaste owns and manages the Shoreway Environmental Center which is operated by South Bay Recycling (SBR). The Shoreway Environmental Center receives the recyclables, organics and garbage collected by Recology under its franchise agreements with each of RethinkWaste’s Member Agencies, as well as other self-haul and non-franchised material delivered to that facility. SBR reports on and makes monthly payments to SBWMA, covering revenues from sales of recyclable commodities and revenues from public self-haul customers at Shoreway. SBWMA also reimburses SBR for payments made through the Shoreway Public Recycling Buyback Center.

Recology and SBR are required to track, compile and report various data related to their performance and develop various reports per the franchise agreements with SBWMA Member Agencies and SBR’s operating agreement with SBWMA. The primary nature of the quantitative data presented in the reports is self-reported. The goal of the Collection Services and Facility Operations Reports, Tonnage, Data and Customer Service Systems Audit (Annual Report Audit) is to determine the accuracy of the information contained in those reports. The Annual Report Audit is presented in Sections 2 and 4 of this report.

The Financial Systems Audit is designed to confirm the legitimacy and accuracy of financial information provided by Recology and SBR, in order to ensure that Recology accurately calculates each Member Agency’s revenue surplus/shortfall for its franchised services and that SBR accurately tracks and remits revenues and payments to/from RethinkWaste. The Financial Systems Audit is presented in Sections 3 and 5 of this report.

1.2 Work Scope Annual Report Audit

RethinkWaste retained R3 to review, test and verify the accuracy of the information contained in Recology’s Annual Report as well as SBR’s annual tonnage and commodity revenue report, and provide any recommendations for improvement.

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Section 1

Introduction

SBWMA | 2018 Annual Report Audit | FINAL REPORT

Page 2 of 6

Our work scope included, but was not limited to the following tasks for the audit of Recology:

Verify the completeness, mathematical accuracy, and back-up documentation for the Annual Reports, including the allocation of tons between Member Agencies for all categories reported;

Interview the contractors to determine the sources of the reported data;

Verify the accuracy of the tonnage data reported monthly;

Verify the accuracy of reported customer service metrics, call statistics, and accuracy of customer service ticket coding;

Verify the mathematical accuracy and back-up documentation where applicable for reported:

o Liquidated damages, which includes customer complaints, accurate and prompt reporting, and other important collections service requirements of the agreement; and

o Incentive and disincentive payments, which includes diversion requirements as well as customer complaints and other call center requirements.

Our work scope included, but was not limited to, the following tasks for the audit of SBR:

Verify the completeness of SBR’s annual tonnage and commodity revenue report;

Verify the consistency of reported Inbound tonnage data between the two contractors;

Verify the mathematical accuracy and back-up documentation of SBR’s reported Inbound and Outbound tonnage data; and

Check the accuracy of SBR’s reported liquidated damages, where applicable.

Our verifications were limited to selected samples for both Recology and SBR verifications, where R3 selected specific months or dates of review, and the contractors provided back-up documentation for their reports as requested. We did not verify every month of each report, or each data point.

Additional information about work scope and documentation reviewed can be found in the associated sections of the following report.

Financial Systems Audit

SBWMA retained R3 to review, test, and verify:

The mathematical accuracy, consistency in reporting, and back-up documentation for information contained in Recology’s annual Revenue Reconciliation, including:

o Gross Revenue Billed against accounting records;

o Adjustments to Gross Revenue Billed, with back-up provided for each adjustment;

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Section 1

Introduction


Page 3 of 6

o Pass-Through Costs, including disposal and processing costs, Member Agencyfees against documentation of correspondence with Member Agencies, themathematical accuracy and consistency of the calculation of late fees;

o Mathematical accuracy of calculation of Net Revenue and Recology’scompensation;

o Revenues associated with unscheduled and intermittent services perAttachment Q to Recology’s franchise agreement(s) against accountingrecords of billed revenues;

o Fees for additional carts against procedures for retaining revenue which areMember Agency-specific;

o Proper accrual of backyard services revenue;

o The mathematical accuracy of the Surplus/Shortfall calculation; and

The accuracy of SBR’s financial systems for tracking, calculating, and reportingpayments due to or from SBWMA for:

o Public gate revenue against scales reports and accounting records;

o Commodity Revenue against scales reports and accounting records;

o Buyback Center payments against scales reports and accounting records; and

o Accuracy of reporting for payments of California Redemption Value.

Additional information about work scope and documentation reviewed can be foundin the associated sections of the following report.

R3’s work, and this report, constitute a review of Recology’s and SBR’s financial systems and the accuracy of the financial reports Recology and SBR provide to SBWMA. This audit is not audit of financial statements, nor does it represent a complete review of finance and accounting systems.

As in prior years, while this audit does not assess conformance with standard accounting practices (including generally accepted accounting principles, GAAP), it does independently verify the mathematical accuracy of financial information provided by Recology and SBR in keeping with solid waste industry operational standards, and general compliance with agreements SBWMA has with both entities.

1.3 Summary of Findings Annual Report Audit

In completing the Annual Report Audit of Recology, R3 has identified the following items which require adjustment:

Disincentive payment of $500 for Speed of Answer ($60 less than in Recology’s annualreport) to SBWMA from Recology, to be applied to the Gross Revenue BilledReconciliations for 2018, due to rounding; and

This year, R3 requested back-up information for a selection of invalid or cancelledtickets, mainly related to collection quality complaints. Based on the information

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Section 1

Introduction


Page 4 of 6

provided by Recology, R3 believes that some of the customer service tickets that were marked as invalid are actually events that should be subject to liquidated damages. R3 recommends that SBWMA:

o Assess $1,250 additional liquidated damages on Recology for the four complaints that were identified as being incorrectly invalidated in this year’s audit; and

o Direct R3 to conduct, during the 2019 audit next year, a detailed review with a sampling methodology agreed upon by SBWMA and Recology and agreed-upon extrapolations for liquidated damages that exceed monthly allowances.

In completing the Annual Report Audit of SBR, R3 has identified the following mis-reported tonnages which may require adjustment:

108 re-coded tons, mostly Bulky Item Collections coded by SBR as recycling and coded by Recology as MSW; and some key-in errors on the SBR report related to cardboard mis-coded as mixed rigid plastics (28 tons) and organics tons sent to Newby Island (73 tons).

R3 has also compiled procedural recommendations for SBR and Recology. These recommendations are given below. More detail is provided in the text of the report.

Reporting Recommendation – R3 recommends that SBR allocates residual by Member Agency by tons of recycling collected, rather than tons of solid waste collected. Detail on page 43 of this report.

Reporting Recommendation – R3 recommends that Recology adjust customer service coding for specific reporting categories in future reports, including “Distribution of less than 50% of required non-collection notices,” “Resolution or remedy of complaints or inquiries beyond 10 business days of receipt of the complaint or inquiry,” and “Complaints regarding failure to provide new service or change existing service level within five (5) business days.” (more information on specific reporting adjustments on page 20 of this report).

Operational Recommendation – R3 recommends that Member Agencies and Recology discuss the matter of potential service stops for non-payment if not allowed by Agreement. Eight Member Agencies’ agreements do not allow for service stops for delinquency. Detail on page 18 of this report.

Liquidated Damages and Audit Recommendation – R3 recommends that SBWMA:

1. Assess $1,250 additional liquidated damages on Recology for four complaints that were identified as being incorrectly invalidated in this year’s audit; and

2. Direct R3 to conduct, during the 2019 audit next year, a detailed review with a sampling methodology agreed upon by SBWMA and Recology and agreed-upon extrapolations for liquidated damages that exceed monthly allowances.

More detail is provided starting on page 22 of this report.

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Section 1

Introduction


Page 5 of 6

Financial Systems Audit

In completing the Financial Systems Audit of Recology, R3 found that:

Gross revenues reported in the Revenue Reconciliation by Member Agency and in total tie to accounting records;

Pass-through costs including disposal and processing costs and Member Agency fees are accurately calculated by Member Agency;

Net revenues and adjustments are supported and accurately calculated;

Recology’s annual compensation ties to SBWMA’s approved compensation for each Member Agency;

Compensation for unscheduled and intermittent services retained by Recology is accurately calculated;

Recology appropriately credited back to each agency revenue on an allowed 20% of residential customers subscribing to backyard service; and

Surplus/shortfall calculations are accurately calculated.

In completing the Financial Systems Audit of SBR, R3 found that:

SBR correctly calculated and remitted payment for public self-haul and commodities revenue;

SBR calculated CRV revenue using a CalRecycle-approved methodology; and

SBR correctly calculated and invoiced SBWMA for reimbursement of Shoreway buyback center payments made to customers.

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Introduction


Page 6 of 6

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________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4E - p1

4E

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director

John Mangini, Senior Finance Manager Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Approving a Contract Amendment to the Agreement with Stradling Yocca

Carlson & Rauth for Bond and Disclosure Counsel Services for the SBWMA’s Issuance of 2019 Solid Waste Revenue Bonds

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-38 attached hereto authorizing the following action:

Approve Change Order #1 to the Agreement with Stradling Yocca Carlson & Rauth for Bond and Disclosure Counsel Services for the SBWMA’s Issuance of 2019 Solid Waste Revenue Bonds.

Background At its February 28th, 2019 Board of Directors Meeting the SBWMA Board authorizing the Executive Director to execute a contract with Stradling Yocca Carlson & Rauth (Stradling) to serve as Bond and Disclosure Counsel for the SBWMA’s proposed issuance of 2019 Solid Waste Revenue Bonds for an amount not to exceed $86,500.

On January 7, 2019, Staff and KNN Public Finance released a Request for Qualification (RFQ) for Bond and Disclosure Counsel. The SBWMA received three (3) proposals to the RFQ, with fees ranging from $60,000 to $145,000. The Stradling fee fell closer to the low end of the range at $86,500.

Analysis Stradling has provided very high-quality work throughout the engagement and has recently requested an additional fee adjustment citing additional work performed outside of their original proposed scope of work. The excess work falls into three categories; 1) attendance at additional meetings 2) additional tasks related to Member Agency Approvals and 3) an additional task related to Green Bond Designation. The fee adjustment for these additional services is requested at $20,000 for approximately 50 hours of time not contemplated in the proposal. Stradling has sent a formal request for a fee adjustment in Attachment A.

Staff can confirm Stradling was asked to attend several Finance Committee Meetings and a San Carlos City Counsel Meeting, and it is reasonable to assume that these meetings were not accounted for in Stradling’s proposal. Staff can also confirm that Stradling redrafted resolutions of the City of San Carlos multiple times and attended multiple conference calls related the required San Carlos host city TEFRA and JPA hearings. The work related to Green Bond Designation was not disclosed in the RFQ, as Staff did not anticipate issuing Green Bonds. Staff is not able to quantify the extra compensation hours requested.

Attachments: Resolution 2018-38 Attachment A – Stradling’s Formal Fee Adjustment Request


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4E - p2

RESOLUTION NO. 2019-38

RESOLUTION OF THE SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY BOARD OF DIRECTORS

APPROVING CHANGE ORDER #1 TO THE AGREEMENT WITH STRADLING YOCCA CARLSON & RAUTH FOR

BOND DISCLOSURE COUNSEL SERVICES FOR THE SBWMA’S ISSUANCE OF SOLID WASTE REVENUE BONDS

WHEREAS, the SBWMA has contracted with Stradling Yocca Carlson & Rauth to serve as Bond and

Disclosure Counsel for the SBWMA’s Issuance of 2019 Solid Waste Revenue Bonds, and WHEREAS, Stradling’s contracted fee is $86,500, and

WHEREAS, Stradling has requested a fee adjustment for additional services in the amount of $20,000 for

approximately 50 hours of time not contemplated in the proposal, and WHEREAS, the SBWMA Staff can confirm it is reasonable to conclude that Stradling Yocca Carlson &

Rauth has provided additional services that was not in their proposal

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves a Resolution Approving Change Order #1 to the Agreement with Stradling Yocca Carlson & Rauth for Bond and Disclosure Counsel Services for the SBWMA’s Issuance of 2019 Solid Waste Revenue Bonds for an additional $20,000 for a total contract amount of $106,500.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 27th day of June, 2019, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2019-38 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on June 27, 2019. ______________________________ ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA _________________________________ Cyndi Urman, Board Secretary



KEVIN M. CIVALE 916.449.2360 [email protected]

STRADLING YOCCA CARLSON & RAUTH A PROFESSIONAL CORPORATION 500 CAPITOL MALL, SUITE 1120 SACRAMENTO, CA 95814 SYCR.COM

CALIFORNIA NEWPORT BEACH SACRAMENTO SAN DIEGO SAN FRANCISCO SANTA BARBARA SANTA MONICA

COLORADO DENVER

NEVADA LAS VEGAS

RENO

WASHINGTON SEATTLE

4847-0488-3866v1/200097-0002

Joe La Mariana Executive Director South Bayside Waste Management Authority 610 Elm St, Suite 202, San Carlos, CA 94070

Dear Joe:

As we have discussed I am writing to follow up on our request for an adjustment to our contract amount to account for additional work and expenses not contemplated by our proposal. The excess work generally falls into three categories:

1. Attendance at Additional Meetings. Our proposal contemplated attendance at a disclosure trainingsession for Authority Staff. In addition to that meeting, we were requested to attend a meeting of theFinance Committee of the Authority as well as a San Carlos City Council meeting. In addition to thetime spent with respect to the additional meetings, we incurred additional expenses. (The Authority-related matters considered at the San Carlos meeting occurred relatively late in the evening whichresulted in additional travel time and hotel expenses.)

2. Matters Related to Member Approvals. We spent significant time related to Authority Memberapprovals not contemplated in our proposal. In particular, because of the need for approvals by SanCarlos related to the Internal Revenue Code as well as the Joint Powers Authority Law, we wererequired to redraft resolutions of the City of San Carlos several times, and attend multiple relatedconference calls.

3. Matters Related to Green Bond Designation. We spent significant time reviewing matters related tothe Green Bond designation for the Bonds, and prepared related provisions for the Authority OfficialStatement. The issuance of Green Bonds was not contemplated in our proposal.

Together, these additional services required approximately 50 hours of time not contemplated by the proposal, as well as additional expenses for travel costs. At the hourly rates described in our proposal, this would result in a $25,000 adjustment for the hourly work, plus fees incurred. However in connection with this request we would propose to discount the hourly rate by 20%. In addition we would propose to absorb the additional expenses incurred. This results in a requested increase of $20,000 to the existing contract amount of $86,500. We note that, even with the $20,000 adjustment, we expect to incur more time with respect to our work for the Authority than we are recovering through the contract fee.

_________________________________________________ SBWMA BOD PACKET 06/27/2019

____________________________________________________ __________________________________________________________ AGENDA ITEM: 4E ATTACHMENT A - p1


4847-0488-3866v1/200097-0002

It has been a pleasure working with the Authority Staff in connection with the bond issuance, and believe that we have provided very high quality work throughout the engagement for the Authority. Please let me know if you have any questions. Thanks.

Best regards,

Kevin M. Civale Shareholder

_________________________________________________ SBWMA BOD PACKET 06/27/2019

____________________________________________________ __________________________________________________________ AGENDA ITEM: 4E ATTACHMENT A - p2


_________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4F - p1

4F

STAFF REPORT To: SBWMA Board Members From: Jean Savaree, Legal Counsel Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Approving Amendment 1 to the Agreement for Relocation of Organics

Extrusion Recovery System & Purchase of Organics Polishing System

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-39, attached hereto, which authorizes the Board President and Executive Director to execute the attached Amendment 1 to Agreement for Relocation of Organics Extrusion Recovery System & Purchase of Organics Polishing System Environmental Center.

Background and Explanation For the last several months, staff has worked with Anaergia Technologies (“Anergia”) and Recology to initiate SBWMA’s Organics-to-Energy pilot project. The initial steps of that project are to move an existing Organics Extrusion Press (“OREX”) from Recology’s San Francisco Transfer Station to Shoreway, and to purchase and install an Organics Polishing System (“OPS”) through Recology’s existing grant from the California Department of Resources Recycling and Recovery (“CalRecycle”).

On March 28, 2019, Recology and SBWMA entered into the Agreement for Relocation of Organics Extrusion Recovery System & Purchase of Organics Polishing System Environmental Center. Since executing that agreement, both Recology and SBWMA staff have agreed that three clarifications should be made to the agreement to:

1. Make clear that there are no third-party beneficiaries to the agreement;2. Allow the parties to agree to waive automatic termination of the agreement if a cause for termination

occurs; and3. Note that provisions related to the ownership of the equipment shall survive termination of the agreement.

The attached proposed Amendment 1 makes these clarifications.

Fiscal Impact Executing the attached Amendment 1 will have no fiscal impact.

Attachments: Resolution 2019-39 Attachment A – Proposed Addendum Attachment B – Agreement for Relocation of Organics Extrusion Recovery System & Purchase of Organics Polishing System at the Shoreway Environmental Center (for reference) Available online Only at www.rethinkwaste.org


https://www.rethinkwaste.org/uploads/media_items/062719-agenda-item-4-f-attach-b.original.pdf




SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4F – p2


MANAGEMENT AUTHORITY BOARD OF DIRECTORS AMENDMENT 1 TO THE AGREEMENT FOR RELOCATION OF

ORGANICS EXCRUSION RECOVERY SYSTEM & PURCHASE OF ORGANCIS POLISHING SYSTEM

WHEREAS, on March 28, 2019, the South Bayside Waste Management Authority (“SBWMA”) entered into that agreement known as the Agreement for Relocation of Organics Extrusion Recovery System & Purchase of Organics Polishing System Environmental Center (“Agreement”) with Recology, Inc. (“Recology”); and WHEREAS, the parties now wish to clarify certain provisions of the Agreement; and

WHEREAS, SBWMA staff worked with Recology to draft the attached Amendment 1 to make those clarifications.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby Authorizes the Executive Director to execute the attached Amendment 1 to the Agreement for Relocation of Organics Extrusion Recovery System & Purchase of Organics Polishing System Environmental Center.


I HEREBY CERTIFY that the foregoing Resolution No. 2019-39 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on June 27, 2019. ____________________________________ ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA _________________________________ Cyndi Urman, Clerk of the Board



___________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITMEM: 4F - p1

1

AMENDMENT 1 TO

AGREEMENT FOR RELOCATION OF ORGANICS EXTRUSION RECOVERY SYSTEM & PURCHASE OF ORGANICS POLISHING SYSTEM

This Amendment 1 (this “Amendment”) to the AGREEMENT FOR RELOCATION OF ORGANICS EXTRUSION RECOVERY SYSTEM & PURCHASE OF ORGANICS POLISHING SYSTEM entered into by and between South Bayside Waste Management Authority, dba Rethink Waste ("SBWMA") and Recology Inc. ("Recology") (the “Agreement”) is made and entered into as of April 30, 2019 by and between the SBWMA and Recology. On April 16, 2019, SBWMA and Recology executed an Addendum 1 to the Agreement (the “Addendum”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Agreement. In the event of any conflict between the terms of this Amendment and the terms of the Agreement (including the Addendum), the terms of this Amendment shall govern.

AGREEMENT

1. A new Section 14(a) is added to the Agreement as follows:

“a. No Third Party Beneficiary Rights. This Agreement is for the sole benefit of the Parties and is not intended to and shall not be construed to give any third party, including, without limitation, Anaergia Services, LLC or Anaergia, any interest or rights (including, without limitation, any third party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby.”

2. Section 8(b) of the Agreement is hereby deleted and replaced with the following:

“b. Effect of Termination; Survival. Should any Cause for Termination occur, this Agreement shall immediately terminate; provided, however, that (i) the Parties may elect to waive any Cause for Termination upon mutual agreement in a signed writing, and (ii) once De-Installation occurs, then SBWMA may not elect to earlier terminate this Agreement. Except as expressly set forth herein, no Party shall be liable to the other Party for any direct or indirect damages arising from any early termination of this Agreement. The following sections will survive termination: Sections 5 (Reimbursement of Recology’s Costs), 9 (Ownership of Equipment), 12 (Indemnity), 13 (Confidentiality), and 14 (General Provisions).”

3. Effect of Amendment. Subject to the above modifications, the Agreement remains in full force andeffect.

4. Entire Agreement. The terms and conditions set forth in the Agreement, the Addendum and thisAmendment constitute the entire agreement between the Parties with respect to the subject matterherein and supersede any previous and contemporaneous agreements and understandings, whetheroral or written, between the Parties with respect to the subject matter hereof.

5. Counterparts. This Amendment may be executed in one or more counterparts, including facsimiles,each of which will be deemed to be a duplicate original, but all of which, taken together, will be deemedto constitute a single instrument.

[Signature page attached.]


___________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITMEM: 4F - p2

2

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed on the date first above written by their respective officers duly authorized in that behalf.

SOUTH BAYSIDE WASTE MANAGEMENT (SBWMA)

Dated: ___________________________________ Joe LaMariana, SBWMA Executive Director

APPROVED AS TO FORM

Dated: ___________________________________ Jean Savaree, SBWMA Legal Counsel

RECOLOGY INC.

Dated: ___________________________________ Mark Arsenault

Its: ________________________________


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4G - p1

4G

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana - Executive Director

John Mangini - Senior Finance Manager Date: June 27, 2019 SBWMA Board of Directors Meeting Subject: Resolution Approving Reallocation of Budgeted Mid-Year Reserves

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-40 attached hereto authorizing the following action: Approving Reallocation of Budgeted Mid-Year Reserves.

Summary Staff is recommending reallocating the Mid-Year Budget Reserves by increasing the Rate Stabilization Reserve to $4.1M as illustrated in Table 1 below. As part of the 2019A Series Bond Issuance, Staff has been advised by the Bond Financing Team that maintaining a Rate Stabilization Fund in an amount that covers the annual debt services is generally viewed favorably by rating agencies and bond investors. The annual debt service of the 2019 Bonds is anticipated to be $4.1M. As the 2019 Bond Issuance is expected to generally coincide with the fiscal year ending 18/19, Staff is, therefore, recommending increasing the Rate Stabilization Fund from $3.5M to $4.1M for the close of FY18/19.

Table 1

UNCOMMITTED RESERVE:RATE STABILIZATON (8% of expense) 3,464,808$ 4,100,000$ 635,191$ EMERGENCY RESERVE (9% of expense) 4,454,754 4,454,754 -$CAPITAL RESERVE 5,521,413 4,886,222 (635,191) UNDESIGNATED RESERVE -

TOTAL UNCOMMITTED RESERVES 13,440,976$ 13,440,976$ -$COMMITTED RESERVE 14,838,490$

EQUIPMENT REPLACEMENT (ANNUAL) 1,397,514$ 1,397,514$ -$

TOTAL RESERVES 14,838,490$ 14,838,490$ -$proof (1,249,705)

SHOREWAY REMEDIATION PROJECT 1,233,640$ 1,233,640$ -$

REVISED MID-YEAR BUDGET

FY18/19 Variance

FY18/19 BUDGET: RESERVE BALANCES APPROVED MID-

YEAR BUDGET FY18/19



Background At its January 24th, 2019 Board Meeting the SBWMA Board of Directors approved the Mid-Year 2019 Budget, including a projected FY18/19 ending reserve balance. At Staff’s recommendation, the Rate Stabilization Reserve was approved by the Board at 7% of Operating Expenses, or $3,464,808. The SBWMA Reserve Policy states that Rate Stabilization Reserves will be established at a maximum of 10% of Operating Expenses. Staff’s recommended a Rate Stabilization Reserve of 7% for the purpose of increasing the Capital Reserve to maintain a strong reserve for anticipated capital equipment needs.

Fiscal Impact There is no fiscal impact associated with reallocating reserves. In addition, the 2019 Bond Indenture will not obligate the SMWMA to maintain a specific level of reserves. It is fiscally prudent to maintain appropriate reserves, but the 2019 Bond Documents will not restrict the Board’s ability to set reserves as deemed necessary.

Attachments: Resolution 2019-40




MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING THE REALLOCATON OF FY18/19 RESERVE BALANCES

WHEREAS, the South Bayside Waste Management Authority (SBWMA) approved the FY18/19 Mid-Year Budget with a $3,464,808 Rate Stabilization Reserve balance, and

WHEREAS, the SBWMA will be issuing 2019 Bonds to finance equipment upgrades at the Shoreway Facility, and

WHEREAS, maintaining a Rate Stabilization Fund in an amount that covers the annual debt services is generally viewed favorably by rating agencies and bond investors, and

WHEREAS, the annual debt service of the 2019 Bonds is anticipated to be $4.1M.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves the reallocation of Mid-Year Budgeted reserves with a Rate Stabilization Reserve balance of $4.1M



______________________________ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA

_________________________________Cyndi Urman, Board Secretary




________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4H - p1

4H


John Mangini, Senior Finance Manager Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Approving a Change in the Deductible Amount to the Shoreway Environmental

Center’s Property/Fire Insurance Policy for FY19/20

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-41 attached hereto authorizing the following action:

Approve and accept the FY19/20 property insurance policy renewal with a group of insurance companies for a total premium of $964,117 plus finance charges of up to $26,225 with a $1M deductible.

Rescind Resolution No. 2019-34 approving property insurance renewal with a premium of $1,078,100, plus finance charges of $26,225 with a 500K deductible.

Background At its May 23rd, 2019 Board of Directors Meeting the SBWMA Board approved the property insurance policy renewal with a group of insurance companies for a total premium of $1,078,100 plus finance charges of $26,225. Prior to this approval the Board requested Staff to investigate the premium cost savings with an increased deductible over the $500K deductible and present the costs for consideration at the June 27th, 2019 Board Meeting.

Analysis Staff consulted with Risk Strategies who is marketing the SBWMA’s property insurance coverage of the buildings and equipment at the Shoreway facility. Risk Strategies requested quotes from the insurance carriers for premium costs with deductibles of $750K and $1M with the resulting property insurance quotes with varying deductibles outlined in Table 1 below.

The SBWMA Finance Committee convened via conference call on June 12th, 2019 to review the premium/deductible options and recommends the $1M deductible option with a premium cost savings of $114K versus the $500K deductible option. The Finance Committee advised that maintaining a budgeted $4.6M Emergency Reserve provides a level of self-insurance in the event of claim. Additionally, the Finance Committee recommended increasing the Emergency Reserve by the $114K savings. The FY19/20 Budget being considered by the Board at this Board of Directors Meeting includes a $114K increase in the Emergency Reserve Fund.


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4H - p2

Table 1

The value of the Shoreway property and equipment is insured at $60 million. The SBWMA does not have Earthquake insurance because of the high premium, high deductible and limited coverage. In addition, the Agency maintains an Emergency Reserve that would help to offset an earthquake event.


Deductible Amount $500K $750K $1MPrimary Layer 674,608.00 629,200.00 567,280.00 First Excess Layer 134,158.96 131,496.40 127,502.56 Second Excess Layer 84,334.00 84,334.00 84,334.00 Third Excess Layer 155,800.00 155,800.00 155,800.00 Equipment Breakdown 29,200.00 29,200.00 29,200.00 Total Premium 1,078,100.96 1,030,030.40 964,116.56

Variance to $500K Deductible (48,070.56) (113,984.40)

FY19/20 Property Insurance Premium Comparison by Deductible


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 4H - p3

RESOLUTION NO. 2019- 41 RESOLUTION OF THE SOUTH BAYSIDE WASTE

MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING REVISED PROPERTY/FIRE INSURANCE POLICY FOR FY19/20

WHEREAS, the SBWMA owns and maintains the Shoreway Environmental Center, and

WHEREAS, the SBWMA requires property insurance for risk coverage of the Shoreway Property, and

WHEREAS, the Board desires to rescind Resolution No. 2019-34 approving a property insurance premium of $1,078,100 plus finance charges of $26,225 with a 500K deductible and adopt this Resolution instead,

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves a Resolution Approving Property/Fire Insurance Policy renewal for FY19/20 with a premium of $964,117 plus finance charges of up to $26,225 with a $1M deductible.



______________________________ ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA





5

ADMINISTRATION AND

FINANCE

Agenda Item 5




5A

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana - Executive Director

John Mangini - Senior Finance Manager Date: June 27, 2019 SBWMA Board of Directors Meeting Subject: Resolution Approving the FY19/20 SBWMA Budget

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-42 attached hereto authorizing the following action: Approving the FY19/20 SBWMA Budget.

Summary The FY 19/20 SBWMA Budget reflects Staff’s plan to manage revenues and expenses to meet bond covenant ratios and increase the capital reserve balance to ensure sufficient funding for future capital projects of the Agency. Staff is recommending no Franchise tip fee increases at the Shoreway gate in FY19/20. The Franchise tip fee increase (12.2%) implemented on January 1, 2019, combined with stronger expected commodity revenue than planned projects to provide sufficient revenue to cover expenses while adding to capital reserves. Additionally, Staff is not recommending an increase in Non-Franchised tip fees. Actual tip fees are approved by the Board in November which allows time to re-evaluate the revenue projection at that time.

Preliminary Budget Updates A Preliminary Budget was reviewed by the Board at its May 23rd, 2019 Board Meeting. A summary of adjustments from the Preliminary Budget and this Budget Recommendation are illustrated in Table 1 below. Additionally, at the May Board Meeting Staff advised they would include a schedule in this staff report comparing Franchise and Non-Franchise tipping fees to illustrate that the Franchise rate is not more than the public rate. The Board also requested a schedule of the budgeted In-School Program and Public Spaces Program expenses. These two schedules can be found in Attachment F.

Table 1

Line # Expense Account Prelim Final Change Description

16 Office/Tenant Improvements $18K $30K $12K Increased estimate - Storage room build out for additional workstation

65 Insurance Shoreway $973K $999K $26K Actual Quote with $1M Deductible

Total $38K

Year Project Prelim Final Change Description2019 O2E Pilot $2.25M $1.25M ($1.0M) Reduced by $1M - SM County Grant

ADJUSTMENTS FROM THE MAY PRELIMINARY BUDGET

CAPITAL ADJUSTMENTS FROM THE MAY PRELIMINARY BUDGET



Fiscal Impact The FY19/20 Budget forecasts a Net Income of $3,599,057 which is $1.3 million higher than FY18/19 Adopted Budget (see Table 2 below). The Net Income projection is primarily a function of the following factors:

Higher franchise and non-franchised revenue of $1.8 million (4%). The large tip fee increases (12.2%) onJanuary 1, 2019 is maintained through FY19/20.

Higher net commodity revenues of $1.5 million (+36%) from stronger projected container revenue. Containersalvage value and CRV are conservatively projected to be $90/ton more than prior budget, while Mixed Paper isprojected to be sold at a loss.

Higher Disposal & Processing expense of $351,669 primarily due to increased solid waste disposal tip fees inJanuary 2020. The increase is offset by lower projected public yardage, mainly from C&D volumes and lowerprojected organics volume. In addition, the FY18/19 budget contained food waste processing cost at $54/ton, but thefood waste rate was only charged in Q1 of 2018. This budget projects organics processing cost at the non-foodwaste rate.

Higher SBWMA Program expenses of $443,290 (13.1%) due to the addition of Management Analyst position thatreplaced a vacant senior staff position (open since September 23, 2016); and budgeting of two new proposedpositions; Outreach & Communications Coordinator and a 5th Fellowship position. The Support and Complianceportion of the SBWMA Program budget is 13.2% lower than the prior budget due to a lesser need for FranchiseAgreement consulting and work that will be performed inhouse by the Management Analyst.

Higher SBR Operations expense of $922,893 (4.6%) due to adjusted cost assumptions and increased residualtonnage. Direct labor CPI is 3.0% for 2020 compensation year.

Table 2

Overview Budget Process: The schedule for this budget review includes the following steps:

Finance Committee review – May 7 Board review and feedback of preliminary budget – May 23 Board discussion of the planned capital budget – May 23 Final Board consideration of final budget – June 27

Total Revenue $51,694,168 $52,815,314 $55,117,884 $3,423,716 6.6%Total Expenditures $49,381,363 $49,497,264 $51,518,826 (2,137,463) -4.3%

Net Income: $2,312,805 $3,318,050 $3,599,057 $1,286,252 55.6%

FY19/20 NET INCOME

Categories

FY18/19 Adopted Budget

FY18/19 Mid-Year Budget

FY19/20 Preliminary

Budget

Variance to Adopted Budget Variance %



Organization of the FY 19/20 Budget Report:

Attachment A: You will find the preliminary FY19/20 detailed operating budget (including cash reserve balances, revenues, and expense and capital budget). The expense detail in Attachment A has three main parts: the SBWMA Program budget (7.4% of total), the Shoreway Operations budget (82.5% of total) and the non-operating Expenses (10% of total).

Attachment B: You will find further detail of the Program budget: staff resources, key projects and work activities.

Attachment C: Provides the current organization chart and details on personnel related budget assumptions. Management Analyst was hired in March of 2019. This budget proposes the addition of a two staff positions; Recycling Outreach Coordinator and Fellowship position.

Attachment D: Provides back up detail on commodity revenue and prices.

Attachment E: Provides important back up to other financial and operational data.

Highlight of New Projects and Activities:

Franchise Agreement: Amendment #1: Program modification discussions with Recology (Bulky Item Collection;Abandoned Waste Collection; inclusion of new anti-litter/storm water standards during collection operations).

Commodity Market Response: Plan and implement short term/long term equipment modifications to allow SBWMAmaterials to remain at the front of the line in the global commodity markets in the future.

Zero Landfill Committee and Long-Range Plan: Implement Mixed Waste Processing Pilot; Expanded PublicSpaces, In-School and Pub Ed programs.

Capital/Site Long-term planning: Intense planning to implement four (4) large-scale material handling projects--Organics-to-Energy Pilot and Scale-up Organics-to-Energy processing; and two large-scale automation andrecyclable materials recovery projects for the Material Recovery Facility (MRF).

Agency Debt (Bond) Refunding project: Refunding the agency’s current bonds and an additional $10M in newmoney to 1) achieve more favorable current market lending rates and to 2) secure funding for new capital projectsidentified in above bullet.Mandated Communications, Public Education and Outreach Programs: Renewed emphasis on proper handlingof battery disposal options; improve quality of recyclables received; expand commercial organics participation;increased residential food waste participation; and promotion of diversion programs.

2020-2024 Long Range Plan development: The agency’s current 2015 Long Range Plan is at the end of it’s five-year cycle. A new plan is currently being developed to establish/rank agency priorities and resource allocations during this new period.

Core Staff Responsibilities:

Franchise Agreement Contract Administration: Continued oversight, contract administration and technical supportfor the 12 collection services agreements with Recology San Mateo County (RSMC) on behalf of member agencies.In 2018, the value of these 12 contracts had a total value of $56,906,852.

Shoreway Environmental Center—Facility and Contractor Oversight: Manage all financial, operational, capitaland maintenance needs, planning and compliance aspects of the agency-owned 16-acre solid waste facility through



direct engagement or through the activities of our primary contractor, South Bay Recycling (SBR). In 2018, the total value of the SBR Operating Contract was $20,019,097. Facility oversight responsibilities includes: over 200,000 square feet of building management; a high-volume diesel fueling station (1M+ gallons/year); two industrial -scale vehicle maintenance facilities (for RSMC and SBR operations); and over $20M worth of equipment owned by the SBWMA. Additionally, 350+ employees and 150+ work vehicles are based on this site; and another 190 employee vehicles are also temporarily parked on-site during their shifts.

Materials Management: Provide technical expertise in planning, compliance and management of all aspects of theagency’s major contracts for the disposal and/or handling/processing of all MSW, organics, construction anddemolition, and recyclable materials (through SBR). In 2018, this responsibility represented the proper handling of472,716 tons of materials with a total contract value of over $19M.

Management of Annual Contractor’s Compensation Adjustment Process (RSMC and SBR), including review ofthe 2019 RSMC and SBR compensation applications and completion of final audit reports (Recology and SBR) for2017.

Long-Term Program and Capital Planning---to Maintain Statutory Compliance of Expanding SolidWaste/Diversion Requirements: On our member agency’s behalf, agency staff is always forward-thinking on alllevels of facility operations, contractor’s scope of work and programmatic requirements to ensure that these goals aresufficiently satisfied on a cost-effective basis.

Manage Public Education and SBWMA-Planned Community program activities: to provide technical support forthe residential and multi-family unit collection services,and manage the development of the outreach materials for thecommercial collection programs. In 2018, there were 18 SBWMA-planned community events (16 “Shred/E-Waste/Compost events; an Earth Day public event (April 21st and a Rethink Recycling Day public event (October27th)). Over 700 members of the public attended these two “on-site” events, and many hundreds more enjoyed theShred/E-Waste/Compost Events in their communities.

Management of the Shoreway Education Center Tour Program: including the school and public tours. Thisprogram educates an average of over 5,000 tour visitors per year in about 250 facility tours.

Financial Summary:

Overall, the Preliminary FY19/20 Budget reflects stronger financial results to the Mid-Year Budget without the need for a tip fee increase. Table 3 below provides a financial summary of operations.

Table 3

Total Revenue $51,694,168 $52,815,314 $55,117,884 $3,423,716 7%SBWMA Program $3,375,781 $3,444,818 $3,819,070 $443,289 -13%

Shoreway Operations $ 41,110,633 $ 41,189,305 $ 42,523,487 $1,412,854 -3%Total Operating Expense 44,486,414 44,634,123 46,342,557 $1,856,143 -4%

Non-Operating Expense 4,894,949 4,863,141 5,176,269 281,320 -6%Total Expense 49,381,363 49,497,264 51,518,826 2,137,463 -4%Net Income to Reserve $ 2,312,805 $ 3,318,050 $ 3,599,057 $ 1,286,252 56%

Better/Worse %

Variance to Adopted Budget

FY19/20 FINANCIAL SUMMARY

Categories



FY19/20 Preliminary

Budget



Revenue:

Table 4 below provides a summary of revenue by source with total revenues for FY19/20 increasing by $3,423,716 (7%) over the FY19/20 adopted budget. Stable tip fees and higher commodity revenue are partially offset by lower public volume; mainly C&D volume. The prior year budget included a $14 increase (or a 12.2%) in Franchise solid waste and organics tip fees effective January 1, 2019, which effects only half of the prior fiscal year. This large FY18/19 tip fee increase projects to provide sufficient revenue to cover expenses while adding to capital reserves.

Table 4

Table 5 below summarizes the volume, tip fee and revenue change for franchise and public customers. Franchise tonnage is expected to decrease by 0.2% and with the consistent tip fees results in 5.8% higher revenue. Public customer volume, especially C&D, will decrease 5.2% resulting in a 3% decrease in public yardage revenue. Weighed 3rd party customers, mostly from Recology San Bruno and other jurisdictions, with an expected 3.6% volume decrease based on current trends resulting in 2.3% revenue increase. Weighted average public tip fee per ton is lower than Franchise tip fee per ton due to the volume of public weighted dirt tons charged at $110/ton gate rate.

Table 5

Tip Fee Revenue $47,324,987 $46,657,035 $49,142,560 $1,817,573 4%Non Franchised 12,317,344 12,036,827 12,112,251 (205,093) -2%

Franchised 35,007,643 34,620,208 37,030,309 2,022,666 6%Net Commodity Sales Revenue* 4,128,936 5,695,522 5,598,516 1,469,580 36%

Interest Income 233,300 460,069 376,994 143,694 62%Fire Insurance Proceeds -

Other Revenue 6,945 2,688 (187) (7,132) -103%Total Revenue: 51,694,168 52,815,314 55,117,884 3,423,716 7%

FY19/20 REVENUE

Revenue



FY19/20 Preliminary

Budget


*Gross commodity sales less 25% revenue share with SBR and buyback payments.



FY19/20 Proposed

Budget

FY20 vs. FY19 Adopted Budget Variance %

Franchise RevenueTons 298,398 295,756 297,890 (508) -0.2%Wtd Avg.Tip Fee 117.32$ 117.06$ 124.31$ 6.99$ 6.0%Franchise Revenue 35,007,643$ 34,620,208$ 37,030,309$ 2,022,666$ 5.8%

Public RevenueCu/Yards 218,953 206,639 207,466 (11,487) -5.2%Wtd Avg.Tip Fee 41.89$ 42.26$ 42.88$ 0.99$ 2.4%Public Revenue Cu/YDS 9,172,353$ 8,731,784$ 8,896,073$ (276,279)$ -3.0%

Tons ( 3rd party - mostly Recology) 27,410 28,057 26,415 (995) -3.6%Wtd Avg.Tip Fee 114.74$ 117.80$ 121.75$ 7.02$ 6.1%Public Revenue Tons 3,144,991$ 3,305,043$ 3,216,178$ 71,186$ 2.3%

Public Revenue Total 12,317,344$ 12,036,827$ 12,112,251$ (205,093)$ -1.7%Total Tip Fee Revenue 47,324,987$ 46,657,035$ 49,142,560$ 1,817,573$ 3.8%

TIP FEE REVENUE



Table 6 below summarizes commodity revenue. Volume is 6.4% lower than the FY18/19 Adopted Budget based on the recent 9 month average tons. Weighted average commodity prices increase by 46.3% over the FY18/19 Budget. Net commodity revenue increases 35.6% over the FY18/19 Budget. The global commodity market continues to impact the price of Mixed Paper, which is being budgeted to be sold at negative $9 per ton. Container salvage value and CRV are conservatively projected to be $90/ton more than prior budget and consistent with FY 18/19 Mid-Year Budget.

Table 6

SBWMA Total Expense

Table 7 below and Chart 1 summarizes the total expenses for the FY19/20 Budget by major category. The Total Expense is projected to be $51,518,826 and is $2.1M (4.3%) higher than the FY18/19 Adopted Budget. Each expense category shown in the table below is discussed in more detail further on.

COMMODITY REVENUE



FY19/20 Proposed

Budget


Tons Sold 63,272 62,729 59,249 (4,023) -6.4%Wtd Avg. Price 78.88$ 112.36$ 115.41$ 36.53$ 46.3%

Gross Revenue 4,991,022$ 7,048,016$ 6,838,073$ 1,847,051$ 37.0%Revenue Share w/ SBR -$ (472,089)$ (395,652)$ (395,652)$ #DIV/0!Buyback Payments (862,086) (880,404) (843,906) 18,181 -2.1%

Net Commodity Revenue 4,128,936$ 5,695,522$ 5,598,516$ 1,469,580$ 35.6%

Price / Volume Impact Price Volume TotalTonnage Change 78.88$ (4,023) (317,339)$ Price Change 36.53$ 59,249 2,164,391 Total Change (Gross) 1,847,051$

COMMODITY REVENUE

SBR Operations

41%

Disposal Contracts39%

SBWMA Program

7%

Bond Interest

5%

San Carlos Fee5%

Other3%

Chart 1. SBWMA FY19/20 Major Expenses



Table 7

As can be seen, Shoreway Operations expense is budgeted to increase by 3%, the SBWMA Program budget will increase by 13%, and franchise fees paid to the City of San Carlos will increase by 4% in line with the tip fee revenue increase per Table 4 and 5 above (the 5% franchise fee is unchanged). The changes are explained below.

Shoreway Operations Expense:

As shown in Table 7 above, the Shoreway Operations expense represent 82.5% of the FY19/20 SBWMA Total Expense Budget. Shoreway Operations includes all South Bay Recycling (SBR) compensation, disposal and processing expenses and all other direct expenses related to the SBWMA’s responsibilities and obligations as the owner of the facility such as property insurance. The Shoreway operating expenses are largely non-discretionary expenses and are variable to tonnage delivered to the Shoreway facility and subject to annual calendar year contractual CPI-based compensation adjustments. Operational detailed data for Shoreway revenue and expenses can be found in Attachment D and E.

Shoreway Operations Expense Detail Table 8 below shows the Shoreway Operations Expense detail for FY19/20. The total expense for the Shoreway operations is projected to be $42,523,487 which is $1.4M (3%) over FY18/19 Adopted Budget. Variances for each expense line are discussed below:

Table 8

Shoreway Operations $41,110,633 $41,189,305 $42,523,487 $1,412,854 3% 82.5%

SBWMA Program 3,375,781 3,444,818 3,819,070 443,289 13% 7.4%Bond Interest Expense 2,641,333 2,641,333 2,836,101 194,767 7% 5.5%

Franchise Fees to San Carlos 2,253,616 2,221,808 2,340,169 86,553 4% 4.5%Shoreway Fire Related Expenses - - - - 0.0%

Total Expense $49,381,363 $49,497,264 $51,518,826 $2,137,463 4% 100.0%

FY19/20 TOTAL EXPENSE SUMMARYFY20 vs. FY19

Adopted Budget %EXPENSE CATEGORIES



FY19/20 Preliminary

Budget

FY19/20 Budget % of

Total

FY20 vs. FY19 Adopted Budget

SBR Compensation $20,019,097 $20,509,892 $20,941,990 $922,893 5%Disposal and Processing 19,675,134 19,228,596 20,026,803 351,669 2%

Property Insurance 884,803 884,803 999,117 114,314 13%Education Center 60,000 60,000 65,000 5,000 8%

Credit Cards Charge 109,400 119,048 123,610 14,210 13%Other Operating Expense 316,690 316,690 296,690 (20,000) -6%

Sewer Charge 45,510 70,276 70,278 24,768 54%Fire Related Expense - 0%

Total Shoreway Operations: $ 41,110,633 $ 41,189,305 $ 42,523,487 $ 1,412,854 3%Bond Interest Expense 2,641,333 2,641,333 2,836,101 194,767 7%

Franchise Fee (San Carlos) 2,253,616 2,221,808 2,340,169 86,553 4%Total Expense $ 46,005,582 $ 46,052,446 $ 47,699,757 $ 1,694,174 4%

Expenditures



FY19/20 Preliminary

Budget


FY19/20 SHOREWAY OPERATIONS EXPENSE DETAIL



SBR Compensation Expense: There is a projected 5% increase in the expense paid to SBR to operate the Shoreway facility and transport outbound materials to the disposal and processing facilities. SBR is paid on a per ton basis. The budget assumes a 4% decrease in “paid” tons compared to the FY18/19 budget. The increase over prior year is due to a change in cost assumptions related to residue tons, which is consistent with FY18/19 Mid-Year Budget. SBR’s fees per ton change with CPI indices and are estimated to increase 3% on January 1, 2020. Similar to the FY 18/19 budget, $503,022 is included for the cost of additional MRF sorters needed to clean the bales and improve the quality of fiber commodities in response to continued global market deterioration on the price of paper. See Attachment E, Table E.3 for detail of SBR Operating Expense.

Disposal and Processing Expense: As shown in Table 9 below, there is a projected $351,669 increase in disposal and processing expense primarily due to increased solid waste disposal tip fees in January 2020. The increase is partially offset by lower projected public yardage, mainly from C&D volumes and lower projected organics volume. In addition, the FY18/19 budget contained food waste processing cost at $54/ton, but the food waste rate was only charged in Q1 of 2018. This budget projects organics processing cost at the non-food waste rate. See Attachment E, Table E.5 for further details on disposal and processing expense.

Table 9

Other Operating Expense (see Table 8):

Property insurance premiums will increase 13% over FY18/19. Education Center expense is to provide bus service for school children tours. Credit card transaction fees paid by SBR for public/non-franchise customer transactions and reimbursed by

the Agency have increased by $14K due recent trend. Other Operating Expense includes primarily facility and equipment maintenance not covered by SBR in their

contract. Sewer usage fees are based on the potable water usage (water meter) at the site. The actual FY18/19 fees

increased 54% over the prior period. The FY19/20 budget reflects an expense consistent with FY18/19.

Franchise Fee (to City of San Carlos): Under the terms of the land use permit at Shoreway granted by the City of San Carlos to the JPA, the SBWMA pays the City 5% of the total tip fee revenue. It is 4% higher than FY18/19 budget in line with higher tip fee revenue.

Solid Waste $8,979,487 $9,261,655 $10,511,836 $1,532,349 17%Organics 6,733,790 6,429,376 6,280,246 (453,544) -7%C&D, dirt 3,840,436 3,537,112 3,282,825 (557,611) -15%

Other 429,926 464,511 443,263 13,338 3%Subtotal $19,983,638 $19,692,653 $20,518,170 $534,532 3%

Paid by SBR (MRF residue) (308,505) (464,057) (491,368) (182,863) 59%TOTAL DISPOSAL EXPENSE $ 19,675,134 $ 19,228,596 $ 20,026,803 $ 351,669 1.8%

FY19/20 SHOREWAY DISPOSAL EXPENSE DETAIL

Disposal Expense by Material Type



FY19/20 Preliminary

Budget




SBWMA Program & Administrative Expense:

The SBWMA Program & Administrative summary expense is shown in Table 10 below and totals $3,819,070, 13% increase over the FY18/19 Adopted Budget. The FY19/20 SBWMA Program & Administrative Expense Budget Detail is shown in Attachment A - FY19/20 Capital & Operating Budget Detail with expense variances described in line-by-line detail. The increase is partially due to the addition of Management Analyst position and budgeting of two additional positions; Recycling Outreach Coordinator and Fellowship position.

Table 10

The SBWMA Program & Administrative budget includes the staff, administrative, and program related expenses to operate the JPA. The agency has employed a deliberate, consultant-based model to supplement staff time and expertise to fulfil the contract compliance, agency reporting, program and administrative functions to meet the goals established by the Board, the agency’s contracts and regulatory bodies. This dual-tier resources approach strongly benefits the agency by maintaining critical institutional knowledge and in-house program continuity (staff), while strategically flexing (up or down) contractor use on an as-needed basis, without bearing the ongoing commitments associated with maintaining a larger staff.

The anticipated staff wage increase is planned for 3% over prior year (adjustments are made on a calendar year basis). The SBWMA provides non-PERS benefits that are low-cost when compared to other public agencies.

Further staff expense detail and a discussion on staff wages and benefit costs can be found in Attachment C – Organization chart and Personnel Summary. SBWMA staff will be working to complete critical projects during the FY19/20 that are detailed in Attachment B – SBWMA Programmatic Detail. A summary of the key projects for FY19/20 include:

Completing the public procurement process for disposal services beyond the expiration of the agency’s currentcontract. This current term expires on December 31, 2019.

Completion of a technical operations pilot and financial feasibility analysis of a waste processing system torecover organic materials and other recyclables from residential and commercial solid waste that will boost JPAdiversion.

Implementation of programs and projects that have been approved by the Board and that are part of the LongRange Plan and the Zero Waste Workgroup efforts. These projects include implementation of the following:- Enhanced commercial recycling outreach targeting businesses and multi-family.- Environmental education program supporting in-school recycling and composting efforts.

Administrative Expense $1,980,851 $2,021,953 $2,432,820 $451,969 23%Member Agency Support & Contract

Compliance $ 514,430 $ 541,281 $ 446,750 ($67,680) -13%

State Manadated Public Education & Outreach $880,500 $881,585 $939,500 $59,000 7%

Total SBWMA Program Expense: $3,375,781 $3,444,818 $3,819,070 $443,289 13%

Variance %

FY19/20 SBWMA PROGRAM EXPENDITURES

Expenditures



FY19/20 Preliminary

Budget




Piloting gasification technologies for green waste and MRF residue.

Capital Expenditures:

The FY19/20 Capital Expenditures budget is $6,539,972 including $1.3 million for an Organics-to-Energy Pilot Project and an initial $3.7 million MRF Upgrade expenditure. A 5 year capital schedule of projects is included in Attachment A - FY19/20 Capital & Operating Budget Detail. The forecast includes the recommended capital projects presented in the Bond Issuance Plan of Finance and a new fueling system in the later years of the 5 year schedule.

Reserve Balances and Bond Covenant Projections:

Reserve balances are calculated by adding (or subtracting) the Net Cash Flow to the Beginning Balance to arrive at the Ending Reserve Balance as shown in Table 11 below. Net Cash Flow is the sum of Net Income, less bond principal payment, less capital expenditure, plus bond issuance proceeds. For FY19/20, net cash flow to reserves is $16,329,918.

Table 11

Once the Ending Reserve Balance is calculated, it is then distributed to each specific reserve in the priority established in the Board approved Reserve Policy: The objective of the Reserve Policy is to maintain an acceptable level of up to 10% of operating expenses for each of the Rate Stabilization and Emergency Reserve. The Total Reserve is budgeted at $33.3 million as shown in Table 12 below. The bond covenants are expected to be achieved.

Beginning Reserve Balance $ 14,675,560 $ 16,320,440 $16,960,990 $ 2,285,429 Net Income $2,312,805 $3,318,050 $3,599,057 $1,286,252 56%

Bond Issuance Proceeds $20,000,000 $20,000,000 Bond Principal Payment (1,482,500) (1,482,500) (729,167) 753,333 -51%

Capital Expenditures (3,317,500) (3,317,500) (6,539,972) (3,222,472) 97%Net Cash Flow (to Reserve) ($2,487,195) ($1,481,950) $16,329,918 $18,817,114 -757%Ending Reserve Balance $12,188,365 $14,838,490 $33,290,908 $21,102,543

FY19/20 Preliminary

Budget Variance %


FY19/20 Cash Flow to Reserve Balance

Categories





Table 12

Background The Draft FY 19/20 SBWMA Budget was reviewed by the Board at its May 23rd, 2019 meeting, and will be considered for approval at its June 2019 Board meeting. On May 7, the Finance Committee reviewed the assumptions of the Preliminary FY19/20 SBWMA Budget. The Preliminary FY19/20 capital budget was also discussed at the May Board meeting.

Attachments: A. SBWMA FY19/20 Capital & Operating Budget DetailB. SBWMA Programmatic Detail (Staff Resources and Description of Key Projects and Work Activities)C. Organization Chart & Personnel SummaryD. Commodity RevenueE. Supporting Financial and Operational Data (Tonnage, Fees & Rates, Other)F. Tipping Fee Rate Schedule and Program Expense Schedule

UNCOMMITTED RESERVE:RATE STABILIZATON (9% of expense) 4,764,699$ 4,938,136$ 3,464,808$ 4,636,694$ 1,171,886$ EMERGENCY RESERVE (9% of expense) * 4,764,699 4,895,300 4,454,754 4,750,679 295,926 CAPITAL RESERVE 5,598,894 957,415 5,521,413 7,810,492 2,289,079 UNDESIGNATED RESERVE - -

TOTAL UNCOMMITTED RESERVES 15,128,292$ 10,790,851$ 13,440,976$ 17,197,866$ 3,756,890$ COMMITTED RESERVE 12,188,365$

EQUIPMENT REPLACEMENT (ANNUAL) 1,192,148$ 1,397,514$ 1,397,514$ 1,008,014$ (389,500)$ BOND PROCEEDS 15,085,028$ 15,085,028$

TOTAL RESERVES 16,320,440$ 12,188,365$ 14,838,490$ 33,290,908$ 18,452,418$ proof 13,167,371$ (3,899,830) $

SHOREWAY REMEDIATION PROJECT 1,233,640$ 1,233,640$ 1,233,640$ 1,233,640$ -$ * Includes $113,985 which is the annual FY19/20 property insurance premium savings with $1M deductible vs. $500k deductible.

FY19/20 BUDGET: RESERVE BALANCES FY20 vs. FY19

Mid-Year Budget ADOPTED BUDGET FY18/19

MID-YEAR BUDGET FY18/19

ACTUAL FY17/18

PRELIMINARY BUDGET FY19/20




MANAGEMENT AUTHORITY BOARD OF DIRECTORS ADOPTING THE FY 19/20 SBWMA BUDGET

WHEREAS, the South Bayside Waste Management Authority (SBWMA) proposed budget as presented is balanced and provides sufficient funds for normal operations.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves the FY18/19 Budget.



______________________________ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA

_________________________________Cyndi Urman, Board Secretary




RESOLUTION NO. 2019-47 RESOLUTION OF THE SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY

BOARD OF DIRECTORS GRANTING AUTHORITY FOR CONTINUED APPROPRIATIONS AND EXPENDITURES FOR

NINETY (90) DAYS WHEREAS, the South Bayside Waste Management Authority (SBWMA) is on a fiscal year

July 1 - June 30th; and

WHEREAS a budget for FY19/20 will not be ready for review and approval by the Board of Directors until after the start of FY19/20; and

WHEREAS, there is a continued need to conduct business by the SBWMA after the start of FY19/20 budget year.

THEREFORE, BE IT RESOLVED that the Board grants the Executive Director continued authority for appropriations and expenditures at the current level for the first ninety (90) days of FY19/20 for the SBWMA.



ATTEST: ____________________________

Jess E (Jay) Benton, Chairperson of SBWMA


Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary District


FY19/20 BUDGET

Attachment A - FY19/20 Budget Revenues by Major Source

REVENUE SUMMARYACTUAL FY17/18

ADOPTED BUDGET FY18/19


PROPOSED BUDGET FY19/20


Variance % to Adopted

Budget Notes

1 ADMINISTRATIVE REVENUE:2 INVESTMENT INCOME 263,256$ 233,300$ 460,069$ 376,994$ 143,694$ 61.6% Higher balance and interest rates3 INVESTMENT (GASB 31) MARKET VALUE ADJ - - - 0.0%4 TOTAL ADMINISTRATIVE 263,256$ 233,300$ 460,069$ 376,994$ 143,694$ 61.6%

5 OPERATIONS REVENUE:

6SHOREWAY TIP FEES - Non Franchised

11,308,540$ 12,317,344$ 12,036,827$ 12,112,251$ (205,093)$ -1.7%Projecting 11.5K (5%) less public cubic yardage than prior budget based on current trends.

7SHOREWAY TIP FEES - Franchised 31,370,058 35,007,643 34,620,208 37,030,309 2,022,666 5.8%

Increase due to large January 2019 tip fee increase (12.2%) maintained though FY2020, with a slight decrease in projected tons vs FY18/19

8COMMODITY SALES REVENUE 8,008,016 4,991,022 7,048,016 6,838,073 1,847,051 37.0%

Mixed Paper budgeted at negative $9/ton. Container revenue (including CRV) projected to be $90/ton above prior budget.

9 COMMODITY REVENUE SHARING W/ SBR (725,800) - (472,089) (395,652) (395,652) Commodity revenue share to SBR (25% above $5.6 million).

10 BUY BACK CENTER - Payment to Customers (847,917) (862,086) (880,404) (843,906) 18,181 -2.1%11 E-SCRAP COMMODITY REVENUES - - - (19,346) (19,346) E-waste commodity markets have a negative return12 MRF HOST FEE - SBR Third-Party Contracted Tons - - - - - 13 COMMERCIAL RECYCLING ORDINANCE FEE - - - - - 14 MISCELLANEOUS REVENUE 29,392 6,945 2,688 19,160 12,215 175.9%15 SUBTOTAL OPERATIONS REVENUE 49,142,289$ 51,460,868$ 52,355,245$ 54,740,889$ 3,280,021$ 6.4%

16 FIRE RELATED REVENUE:17 NET INSURANCE PROCEEDS 87,030 - -$ -$ -$ 0.0%22

18 TOTAL OPERATING REVENUES 49,229,319$ 51,460,868$ 52,355,245$ 54,740,889$ 3,280,021$ 6.4%

19 TOTAL REVENUE 49,492,575$ 51,694,168$ 52,815,314$ 55,117,884$ 3,423,716$ 6.6%

20 TOTAL OPERATING EXPENSES 47,300,036$ 49,381,363$ 49,497,264$ 51,518,826$ 2,137,464$ 4.3%

21 NET OPERATING INCOME 2,192,539$ 2,312,805$ 3,318,050$ 3,599,057$ 1,286,252$ 55.6% Bond covenants achieved

Draft FY2020 Budget v6 Revenues6/14/2019

2:05 PM_________________________________________________ SBWMA BOD PACKET 06/27/2019

____________________________________________________ __________________________________________________________ AGENDA ITEM: 5A ATTACHMENT A - p1


FY 19/20 Budget

line EXPENDITURE SUMMARY1 ADMINISTRATIVE EXPENSES2 ADMINISTRATIVE STAFF

3 MANDATED COMPLIANCE SUPPORT STAFF4 EMPLOYEE RECRUITMENT/HR SUPPORT5 BOARD COUNSEL6 BOARD MEETINGS7 ACCOUNTING SERVICES8 INFORMATION SYSTEMS 9 WEBSITE 10 ANNUAL AUDIT11 D&O INSURANCE 12 BANK FEES13 RENT14 PRINTING AND POSTAGE15 UTILITIES16 OFFICE/TENANT IMPROVEMENTS17 OFFICE SUPPLIES18 OFFICE EQUIPMENT COSTS 19 PUBLICATIONS & PUBLIC NOTICES20 PROFESSIONAL DUES & MEMBERSHIPS21 VEHICLE MILEAGE & TOLLS22 CELL PHONES23 CONFERENCE & MEETINGS24 TRAINING25 SPONSORSHIPS & DONATIONS

26 LEGISLATIVE & REGULATORY ADVOCACY27 COMPUTER PURCHASE28 TOTAL ADMINISTRATIVE

29 MEMBER AGENCY SUPPORT & CONTRACT COMPLIANCE30 RATE REVIEW31 FACILITY IMPROVEMENT OVERSIGHT32 CONTRACT ANNUAL AUDITING33 COLLECTION SERVICES FRANCHISE ADMIN.34 FINANCE ANALYSIS SUPPORT35 RECYCLING TECHNICAL CONSULTANT ASSISTANCE36 WASTE CHARCTERIZATION SUPPORT37 COLLECTION CONSULTING SUPPORT38 BATTERY MANAGEMENT PLANNING39 HHW DOOR TO DOOR COLLECTION OUTREACH40 TOTAL MA SUPPORT & CONTRACT COMPLIANCE

41 STATE MANDATED PUBLIC EDUCATION & OUTREACH

42 STATE'S REQUIRED ANNUAL REPORTS43 SBWMA ANNUAL REPORT

44 DIVERSION PROGRAM SUPPORT45 GIVEAWAYS - SCHOOLS AND EVENTS

ACTUAL FY17/18



YTD SPENT 03/29/2019




Budget Notes

653,200$ 648,000$ 571,653$ 400,690$ 738,094$ 90,094$ 13.9% Increase due to New Management Analysis position. Interim Finance Manager was in the FY18/19 budget

615,944 772,600 858,668 571,727 1,010,341 237,741 30.8%

Includes: 1) approved new reclassifications per salary survey findings ($32k) 2) new proposed new FTEs (2.0)--Outreach/Communications ($100k/loaded)+ schools/tours fellow ($60k/loaded) to start 7/1/19 3) planned staff merit/benefit increases 4) Fellow retirement per legal ruling ($26k)

1,800 - - - - - #DIV/0!

63,498 66,600 91,913 73,181 90,000 23,400 35.1% Support for Executive Director/Agency in high volume work environment 4,871 6,000 6,000 4,458 7,000 1,000 16.7% $4K for Holiday lunch, and $2K for refreshments at Board meetings, community room rental fee

146,336 150,500 150,500 112,875 170,059 19,559 13.0% New City of Redwood City agreement and one-time transition period expenses of approximately $50K34,617 31,000 31,000 21,559 31,930 930 3.0% Three year contract to increase by CPI currently 3%11,933 42,400 42,400 6,034 40,000 (2,400) -5.7% Website maintenance ($10k); Overdue Website upgrade--outdated tech platform/improved design ($30k)10,205 8,600 8,600 3,105 8,896 296 3.4% Fees paid to auditors to prepare FY & CY financial statements44,580 45,900 48,470 48,470 48,470 2,570 5.6% Annual insurance premium for director's and officer's insurance5,290 8,700 8,700 3,134 6,271 (2,429) -27.9% Bank fees on checking account and fees paid to BNY as the Bond Trustee

54,847 55,900 55,900 41,615 58,000 2,100 3.8% Office rent from the City of San Carlos with 3.5% increase every Jan.1. 249 350 350 83 300 (50) -14.3%

29,167 17,000 17,000 12,486 41,480 24,480 144.0% Includes phone and janitor services. Office phone system upgrade; current is obsolete.85,149 2,000 7,000 6,005 30,000 28,000 1400.0% Build out storage room to accommodate two workstations14,130 16,000 16,000 7,998 19,360 3,360 21.0% Office supplies19,391 11,600 11,600 7,212 11,300 (300) -2.6% Base copier lease is $600/month plus cost per copy

242 1,500 - - (1,500) -100.0% No public notice needs are anticipated1,458 2,500 2,500 2,634 3,500 1,000 40.0% Memberships to trade and community organizations (CRRA, SWMA, NCRA, CCAC )1,110 700 700 878 1,320 620 88.6% Reimbursement for business use of personal cars (non-auto allowance-eligible employees/fellows).

932 1,000 1,000 831 1,000 - 0.0% Cell phone business expense.15,029 15,000 15,000 13,283 18,000 3,000 20.0% CRRA conference, progress seminar, SWANA meetings, lunch for SBWMA meetings, State of the City addresses4,939 5,000 5,000 4,784 7,500 2,500 50.0% Professional development opportunities. CCAC training, etc.

27,500 30,000 30,000 19,500 35,000 5,000 16.7% Industry Sponsorships: CAW,CRRA,SWANA, Acterra, Sustainable San Mateo, CPSC, NCRA

16,900 30,000 30,000 12,520 45,000 15,000 100.0%Mandated agency priorities include these initiatives : Extended Producer Responsibility (EPR); Product Stewardship; Source Reduction Initiatives; Lithium-ion Battery safety

14,690 12,000 12,000 9,335 10,000 (2,000) -16.7% Adobe pro for 2 users, warranties for sonic wall and server computer, replacement PCs1,878,006$ 1,980,851$ 2,021,953$ 1,384,397$ 2,432,820$ 451,970$ 22.8%

50,339$ 63,400$ 14,251$ 20,243$ 31,520$ (31,880)$ -50.3% Office temp support, Consultant Rate Application Support. Part of this activity brought in-house14,646 75,000 75,000 - 75,000 - 0.0% Engineering and construction management support 24,490 51,030 51,030 - 51,030 - 0.0% Annual Financial & Systems Audit of RSMC and SBR by R3 ($51k). 31,513 50,000 50,000 39,403 50,000 - 0.0% FA compliance $40k; Amendment #1 support (BIC/AW/ storm water) $50k

570 - 76,000 69,838 19,200 19,200 #DIV/0! On-Call consultant support as needed. 47,364 60,000 60,000 - 90,000 30,000 50.0% Diversion consultant support; AB1383 planning12,676 30,000 30,000 - 60,000 30,000 100.0% Waste characterization studies to support OREX Pilot Project8,310 100,000 100,000 65,309 30,000 (70,000) 100.0% Franchise Agreement technical consulting. Service Level Adjustment calculations, etc.

38,796 85,000 85,000 21,392 40,000 (45,000) 100.0% Consulting support for best-practices studying & recommend changes to collection programs- - - - - 200.0%

228,703$ 514,430$ 541,281$ 216,185$ 446,750$ (67,680)$ -13.2%-

-

30,816$ 28,000 28,000$ 25,178$ 32,000 4,000$ 14.3%Annual AB 939 EAR submittal for 10-MAs. +$2K for possible Cal Recycle Reporting/Commodities (T+M only). Note: no consultant rate adjustment from 1999-2016.

- 5,000 5,000 - 2,500 (2,500) -50.0% Creation of annual report

- 90,000 90,000 7,663 90,000 - 0.0% Tech Data Capture Systems ($50k); Public spaces recycling assistance ($30k); Diversion program support ($10k) 14,960 5,000 5,000 3,989 7,500 2,500 50.0%

Draft FY2020 Budget v6 Expenses - Pages 1 of 26/14/2019

2:06 PM

_________________________________________________ SBWMA BOD PACKET 06/27/2019



FY 19/20 Budget

line EXPENDITURE SUMMARY46 DIVERSION; COMPLIANCE; ZERO WASTE PROGRAMS

47 IN-SCHOOL ENVIRONMENTAL EDUCATION48 LARGE EVENT & VENUE SUPPORT49 CLIMATE ACTION PLANNING

50 RECYCLING TECHNICAL ASSISTANCE51 COMMERCIAL/MFD CONTAINERS52 MULTI-FAMILY OUTREACH53 MEMBER AGENCY & RATE PAYER EDUCATION54 RESIDENTIAL OUTREACH PROGRAMS55 COMMUNITY EVENTS56 HHW PROGRAM OUTREACH58 CURBSIDE HOUSEHOLD BATTERY OUTREACH

59 SHRED & E-WASTE EVENT SERVICES60 TOTAL STATE MANDATED PUBLIC EDUCATION & OUTREACH61 TOTAL SBWMA PROGRAM BUDGET

62 SHOREWAY OPERATIONS63 OPERATING CONTRACT - SBR OPERATIONS 64 DISPOSAL65 INSURANCE SHOREWAY66 SHOREWAY FACILITY COST 67 CREDIT CARDS CHARGES68 SHOREWAY CHARGES69 EDUCATION CENTER OPERATIONS70 MAINTENANCE - OX MTN TIPPER 71 SHOREWAY MRF EQUIP. MAINTENANCE > $10k72 SEWER FEES (PROPERTY TAX)73 SUB SHOREWAY OPERATIONS COST

74 FIRE RELATED EXPENSES:75 OPERATING CONTRACT - SBR - FIRE RELATED76 SUB FIRE COST77 TOTAL SHOREWAY OPERATION

78 TOTAL OPERATING EXPENSES79 NON-OPERATING EXPENSES80 LOSS ON SALE OF PROPERTY81 DEBT SERVICE BOND INTEREST82 FRANCHISE FEE TO CITY OF SAN CARLOS83 TOTAL NON-OPERATING EXPENSES

84 TOTAL SHOREWAY OPERATING EXPENSES

85TOTAL EXPENSES (SBWMA Program + All Shoreway Operations)1. Rolled 2018 budget for line 49 into line 38.

ACTUAL FY17/18



YTD SPENT 03/29/2019




Budget Notes217,976 185,000 185,000 151,667 105,000 (80,000) -43.2% Zero Waste initiatives-tech support ($55k); Compost events ($50k)

65,000 65,000 Materials ($6K), storage/transportation ($12K), recognition ($5K), staff/tech support ($40K). Previously budgeted on line 46.

- 12,500 12,500 4,564 - (12,500) -100.0%

14,060 25,000 25,000 12,871 25,000 - 0.0% Annual climate register & Member Agency support.

- 40,000 40,000 1,324 85,000 45,000 112.5%AB 1826 & AB 341 Compliance ($10k); SB 1383 compliance and planning ($35k); Promote reusables for businesses ($25k); Recycling Technical Assistance ($15k)

22,309 50,000 50,000 27,148 35,000 (15,000) -30.0% MFD recycle bags, internal R containers, MA containers per Franchise Agreements16,031 75,000 75,000 13,363 90,000 15,000 20.0% Compliance with state laws; MFD Toolkit and other outreach; battery bucket supplies

473 110,000 110,000 36,494 110,000 - 0.0% Biannual newsletters to Member Agency residents. 28,451 80,000 80,000 63,616 90,000 10,000 12.5% Outreach per FA, Annual Service Notice FA5,571 20,000 20,000 15,760 52,500 32,500 162.5% Earth Day ($15K), Rethink Recycling Day ($10K), Fixit Clinics ($25K), other workshops ($2.5K)

66,462 65,000 65,000 - 30,000 (35,000) -53.8% Annual promotion of local HHW disposal options for all ratepayers22,237 75,000 76,085 76,617 90,000 15,000 20.0% Educate customers about risk of battery fires and proper disposal options

(2,651) 15,000 15,000 6,873 30,000 15,000 100.0%Shred, e-waste, and compost events for Member Agencies (coordination, support, outreach, etc.) RFP for Shredding Services

436,694$ 880,500$ 881,585$ 447,127$ 939,500$ 59,000$ 6.7%2,543,403$ 3,375,781$ 3,444,818$ 2,047,710$ 3,819,070$ 443,290$ 13.1%

20,747,954$ 20,019,097$ 20,509,892$ 12,221,809$ 20,941,990$ 922,893$ 4.6% Adjusted cost assumptions from FY19 budget and increased residual tonnage. 3% expected CPI17,673,370 19,675,134 19,228,596 12,279,331 20,026,803 351,669 1.8% Higher solid waste disposal rate effective January 1, 2020. Offset by lower C&D and organics volume

810,162 884,803 884,803 812,597 999,117 114,314 12.9% Property insurance premium. General liability & environmental impairment.460,156 200,000 200,000 88,261 200,000 - 0.0% Budget for unanticipated routine Shoreway maintenance items that are non-CapEx108,768 109,400 119,048 61,806 123,610 14,210 13.0% SBR pass through their credit card fees from their bank from public customers.26,690 26,690 26,690 15,569 26,690 - 0.0% Amortization of additional trailer cost added in 2015.61,353 60,000 60,000 20,086 65,000 5,000 8.3% Bus services ($32K), Poster and Trash to Art Contests ($7K), contractor services ($10K), materials and upgrades ($16K)1,698 40,000 40,000 - 20,000 (20,000) -50.0% Maintenance expense for truck tipper located at Ox Mtn and owned by JPA

- 50,000 50,000 - 50,000 - 0.0% Unanticipated MRF equipment maintenance (non-CapEx) expense 44,186 45,510 70,276 70,623 70,278 24,768 54.4% Sewer fees paid for Shoreway operation based on water meter.

39,934,338$ 41,110,633$ 41,189,305$ 25,570,083$ 42,523,487$ 1,412,854$ 3.4%

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 0.0%

39,934,338$ 41,110,633$ 41,189,305$ 25,570,083$ 42,523,487$ 1,412,854$ 3.4%

42,477,741$ 44,486,414$ 44,634,123$ 27,617,792$ 46,342,557$ 1,856,144$ 4.2%-

86,680 - - -

2,702,669$ 2,641,333$ 2,641,333$ 450,083$ 2,836,101$ 194,767 7.4% Solid Waste Enterprise Revenue Bond interest payments.2,032,946 2,253,616 2,221,808 1,430,388 2,340,169 86,553 3.8% 5% Franchise Fees paid by JPA to the City of San Carlos on tip fee revenue.

4,822,295$ 4,894,949$ 4,863,141$ 1,880,472$ 5,176,269$ 281,320$ 5.7%

44,756,633$ 46,005,582$ 46,052,446$ 27,450,555$ 47,699,757$ 1,694,174$ 3.7%

47,300,036$ 49,381,363$ 49,497,264$ 29,498,264$ 51,518,826$ 2,137,464$ 4.3%

Draft FY2020 Budget v6 Expenses - Pages 2 of 26/14/2019

2:06 PM

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FY19/20 BUDGET

CAPITAL EXPENDITURE BUDGET Current Year 1 Year 2 Year 3 Year 4 Year 5 Description

Current Budget

Proposed Budget

Proposed Budget

Proposed Budget

Proposed Budget

Proposed Budget

Capital Project Name FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY22/23Site paving repairs and restriping2 - 45,000 1,500,000 Repaving of collection fleet parking area. Planned after fuel tank removal project.Truck shop building maintenance 25,000 25,000 25,000 25,000 25,000 25,000 Place holder for unanticipated capital needs.TS building and tip floor 50,000 50,000 300,000 50,000 50,000 50,000 Tip floor resurfacing. Place holder for unanticipated capital needs.MRF building and tip floor 50,000 50,000 50,000 50,000 100,000 50,000 Tip floor resurfacing. Place holder for unanticipated capital needs.Admin building maintenance 40,000 40,000 40,000 40,000 40,000 40,000 Place holder for unanticipated capital needs.Site maintenance 50,000 50,000 50,000 50,000 50,000 50,000 Place holder for unanticipated capital needs.

Fire suppression 200,000 100,000 100,000 100,000 100,000 Place holder for unanticipated capital needs. The agency has an interest in implementing new fire prevention technologies but does not have a specific project planned.

Repairs to landfill tipper 30,000 15,000 - - - - Place holder for unanticipated capital needs.

Storm Water Treatment System 1,200,000 50,000 50,000 50,000 50,000 Compliance new SW regulations require treatment of site storm water prior to release. 19/20 budget from Engineers estimate for project to be installed that year.

Glass Conveyance & Loadout System 550,000 Enhancements to Public Recycling Center 200,000 50,000 - - - - Need to remove from final FY 19/20 budget. Project budgeted and completed in FY 18/19Shredding to Public Recycling Center - 100,000 Agency has interest in providing confidential document shredding services as benefit to residents. CIP Projects (See detail) 4,914,972 12,789,972 13,125,000 2,500,000 -

1,195,000 6,539,972 13,504,972 13,490,000 4,415,000 265,000

FUNDING SOURCEBond Proceeds ($20M) 4,914,972 7,789,972 7,295,056 - - Capital Reserve 1,195,000 1,625,000 5,715,000 6,194,944 4,415,000 265,000

1,195,000 6,539,972 13,504,972 13,490,000 4,415,000 265,000

CIP Project Detail Total Year 1 Year 2 Year 3 Year 4 Year 5

Organics 2 Energy Pilot 1,250,000 1,250,000 Project approved by BOD. Anticipated start date 1/2020.Phase I MRF Upgrades 7,329,944 3,664,972 3,664,972 Project under design with planned BOD approval 2019 and start in 2020.Phase II MRF Upgrades 8,250,000 4,125,000 4,125,000 Project to be designed after assessment of Phase I improvements and market conditionsOrganics 2 Energy Full Project 10,000,000 5,000,000 5,000,000 Project to be designed after assessment of Pilot O2E and market conditionsUnderground Storage Tank Removal 1,500,000 1,500,000 Existing UST tanks are single wall and need to be removed using Remediation Reserve.New Fueling System Project 2,500,000 2,500,000 System design pending replacement collection fleet fuel decision. New Biogas Fueling System 2,500,000 2,500,000 Same as above. Tied to O2E and planned GHG reduction goals.

33,329,944 4,914,972 12,789,972 13,125,000 2,500,000 - Total CIP Project Detail

Total Funding Source

Total Budget for Capital Projects

Draft FY2020 Budget v6 CAPITAL6/14/2019

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Budget Expense Category Description of Program for FY19/20: (Proposed Expense Line Items 1-28)

ADMIINISTRATIVE EXPENSE: $2,432,820 (Proposed Expense line item 28) Staff Resources: Joe La Mariana, Executive Director; John Mangini, Sr. Finance Manager; Grant Ligon, Management Analyst III; Cyndi Urman, Clerk of the Board/Executive Assistant Program Description/Justification: Provides for overall administrative operations of agency, including: personnel administration, budget development, financial projections, expense payment processing, fiscal management, Board of Directors administration, customer service, risk management, records retention, and IT. Executive Director:

• Provide ongoing Executive Committee, Board Members, Member Agency Staff support in a timely, professional and accurate manner.• Manage the agency’s strategic vision and daily administrative operations through the support of staff, Board/TAC members and all stakeholders.• Establish and maintain all agency financial goals and program standards.

Sr. Finance Manager: • Review the prior year budget to identify budget variances and plan for a mid-year adjustment, if needed and prepare the following fiscal year’s budget.• Prepare two calendar year financial projections to facilitate Shoreway tip fee review/adjustment and “testing” of bond covenant requirements.• Complete prior year financial audit and calendar year financial statements for bond reporting.• Meet bond covenants and reporting requirements as specified in the Indenture to ensure compliance including the two debt coverage ratios.• Verify South Bay Recycling (SBR) monthly reporting of tonnages per Operations Agreement, and monthly invoice and calculation of commodity revenue.• Manage monthly cash transfers to/from SBR per Operations Agreement for commodity revenue, public revenue, and payments for operations.• Manage monthly billings to and payments from Recology for tipping at Shoreway as prescribed in the Member Agency franchise agreements.• Renew general insurance policies (property, general liability, EIL, D&O, etc.) and ensure proper coverage is maintained.• Manage the payroll process and benefits administration, making payments to vendors for payroll, retirement plan, and HSA plan via set procedures.

Management Analyst III: • Perform analysis, tracking and reporting on contractual responsibilities supporting the franchise agreement, SBR billing, and disposal/processing contracts.• Manage the Agency’s public procurement process for all proposals (RFP)/request for qualifications (RFQ), and related activities.• Provide ongoing in-house solid waste program support and expertise to meet numerous deliverables, as required by new laws.• Provide critical path support for broad-ranging agency initiatives, e.g. the Long Range Planning process and resulting programs.• Identify, win and manage grants to mitigate the future cost impacts on ratepayers.

Clerk of the Board/Executive Assistant: • Provide Board Packets to the Board of Directors, and Board committee/subcommittee packets, minutes and administrative support, accurately and on time.• Maintain the Board of Directors webpage and, as needed, update the Board Member website resource portal feature.• Maintain accurate and up-to-date records for the SBWMA, including Board meeting minutes, resolutions, ordinances and contracts.• Update, as necessary, the Board of Directors JPA and Contracts Resources Binder.• Manage compliance with record retention and other Board-adopted policies• Process forms (e.g. annual Form 700), invoices and other documents in accordance with established procedures, checking for accuracy and completeness.• Provide information and assistance regarding SBWMA programs, policies and procedures to the public, member agencies, vendors, and contractors.

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 5A ATTACHMENT B - p1


Budget Expense Category Description of Program for FY19/20 (Proposed Expense Line Items 29- 40)

MEMBER AGENCY SUPPORT & CONTRACT COMPLIANCE: $446,750 (Proposed Expense Line Item 40) Staff Resources: Joe La Mariana, Executive Director; Hilary Gans, Sr. Facilities & Contracts Manager; John Mangini, Sr. Finance Manager; Julia Au, Program Manager II (Outreach and Communications); Grant Ligon, Management Analyst III

Program Description/Justification: Provides technical support for mandated programs and contractual requirements through member agency staff (TAC); state regulators; and key agency contractors (South Bay Recycling (SBR) and Recology).

Key Details: • Contract administration support for collection services franchise agreements including follow-up on audit findings, financial auditing, and amendment(s).• Continued oversight of SBR’s operations per the Shoreway Operations Agreement.• Management of the annual SBR compensation application review process and completion of the final SBWMA financial report.• Manage the annual Member Agency rate review process, including review of the annual Recology compensation application and completion of the SBWMA

final reports reviewing the Recology compensation application and consolidated rate report.• Initiate audit work and review of operational data included in the compensation applications.• Review Annual Report from Recology, as required per Member Agency franchise agreements.• Conduct rate (calendar) year audit of collection services and facility operations reports, tonnage data and customer service systems.• Hire contractor to conduct rate year audit of financial systems (includes Recology’s revenue reconciliation) of both contractors to verify financial risks to

SBWMA and its Member Agencies.• Implement audit findings, as appropriate, and follow up with Recology to ensure progress on implementing audit recommendations.• Provide prompt responses to questions/issues/complaints from the public and Member Agencies regarding their franchise agreements/collection services.• Provide prompt responses to questions/issues/complaints that are raised by the public and Member Agencies regarding their use of the Shoreway facility.• Develop a Member Agency snapshot report and make presentations to Member Agency governing bodies upon request.• Prepare financial analysis for projected revenue and total collection and pass-through costs to determine total rate adjustment for each Member Agency.• Prepare a collection cost variance analysis by detailed cost categories by Member Agency to aid in understanding collection cost changes.• Support Member Agencies with analysis of rate issues and attend rate hearings or rate related meetings as requested.• Update 5-year collection cost projection by Member Agency for collection cost components: Recology cost, disposal expense and Member Agency fees.• Review Recology’s Revenue Reconciliation Report.• With TAC member engagement, plan/promote 16 separate compost and shred events with Recology per the Franchise Agreement (electronic waste

recycling and battery collection also included, but not required per Agreement).New Efforts in FY19/20:

• Secure Board and Member Agency approvals of final “Amendment One” (Bulky Item Collection; Abandoned Waste; Storm Water/Litter Abatement) terms.• Transitional planning from current Franchise Agreement terms to newly restated/amended terms in 2021.• Plan full-scale expansion of Public Spaces Recycling Pilot project, based on data and other feasibility analysis.• Provide proactive legislative and regulatory support for various agency priorities, including Lithium Ion battery handling.

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Budget Expense Category Description of Program for FY19/20 (Proposed Expense line items 41-60)

STATE MANDATED PUBLIC EDUCATION & OUTREACH: $939,500 (Proposed Expense Line Item 60) Staff Resources: Joe La Mariana, Executive Director; Julia Au, Program Manager II (Outreach and Communications); Emi Hashizume, Program Manager II (Environmental Education and Non-Franchise Recyclables)

Program Description/Justification: Staff services provided to ensure compliance with state-mandated laws promoting waste reduction, recycling, and reporting requirements per AB 939, AB 341, AB 1826, and SB 1383 include: Development and implementation of public education and outreach strategies to promote residential and commercial waste reduction and recycling collection programs and services; oversight of collection services for Member Agencies; compliance with annual reporting required; and implementation of Long Range Plan projects.

Key Program Efforts: • Develop, implement, and manage on-going outreach activities related to California State Laws, including but not limited to AB 1826, AB 341, and SB 1383,

through production and distribution via various and appropriate print and media channels.• Manage and promote outreach for CartSMART (residential) and BizSMART (commercial/multi-family) collection services to meet specific community needs.• Develop, submit, and manage with Recology a Public Education and Outreach Plan including methods of tracking effectiveness and engagement levels on

outreach campaigns and tools.• Promote residential collection services through newsletters and bill inserts in collaboration with Recology.• Continue publishing Agency annual report.

New Efforts in FY19/20: • Manage Public Education and Outreach Subcommittee needs.• Review and update core Pub Ed materials with Public Education and Outreach Subcommittee and Recology engagement.• Continue ongoing next-gen media partnerships — BayROC; PenTV; News & Review.• Finalize Agency Website redesign into modern technical platform, and leverage for new outreach campaigns with contractors.

_________________________________________________ SBWMA BOD PACKET 06/27/2019



Budget Expense Category Description of Program for FY19/20 (Proposed Expense line items 62-77)

SHOREWAY OPERATIONS: $42,523,487 (Proposed Expense Line Item 77) Staff Resources: Hilary Gans, Sr. Facilities & Contracts Manager; John Mangini, Sr. Finance Manager; Grant Ligon, Management Analyst III; Emi Hashizume, Program Manager II (Environmental Education and Non-Franchise Recyclables); Madison Guzman, Environmental Education Coordinator

Program Description/Justification: SBWMA staff activities regarding Shoreway operations including: oversight of SBR operations and contract compliance and management of financial transactions relating to SBR; Shoreway facility capital repairs and maintenance; education center operations; management of disposal and processing contracts, including review and payment of invoices; facility insurance; and billing Recology for tons delivered to Shoreway.

Key Details: • Ongoing operational oversight and contract compliance of MRF, transfer station, and transportation operations performed by SBR.• Ongoing management of third party recycling and disposal contracts for solid waste, organics, and C&D debris.• Manage organics processing contracts to meet operational, financial and environmental requirements.• Oversee third party tonnage and host fee payment for third-party tons used to generate additional agency income and lower Shoreway operating costs.• Ongoing management of Shoreway Facility capital and maintenance projects are at, or below, budget.• Lead Transfer Station/MRF equipment and facility design to meet long range plan and rapidly changing market needs of program.• Provide Zero Waste Committee with technical/administrative support.

Environmental Education and Community Events: • Conduct the Shoreway schools and public tours program and meet goals to maintain or exceed number of tour participants relative to prior year.• Manage the onsite community events to promote resource conservation including the following: Earth Day and Rethink Recycling Day events at Shoreway;

Trash to Art and Poster contest; expansion of compost donation program throughout Member Agency Schools and community gardens. New Efforts in FY19/20:

• Identify and plan new operating procedures and capital improvement projects to further the Agency’s environmental goals and improve the quality ofcommodities for marketing purposes.

• Continue expansion of “In-School Compost and Recycling Program” (including no-cost infrastructure and materials, technical support, and education andtraining) currently in pilot phase to 10-15 schools in year 1 of a 5-year rollout.

• Identify, plan and implement new public environmentally-themed events at the Shoreway facility for the general public.• Increase support of implementation of County of San Mateo Environmental Health’s Food Share Table Program at schools in RethinkWaste service area.

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SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 5A ATTACHMENT C - p1

ATTACHMENT C: Proposed Organization Chart/Personnel Summary for FY19/20

FY19/20 Proposed Staffing SBWMA staff provides comprehensive solid waste program and facility planning, compliance, public education, outreach and contract management services on behalf of its member agencies, while supporting the agency-owned Shoreway Environmental Center solid waste and recycling facility. This work is mandated by state law; by franchise agreement contractual obligation; and by virtue of the Agency’s facility ownership. Delivery of Agency financial, environmental and service standard goals have historically been accomplished by a small group of experienced industry professionals (Staff) and highly-regarded technical contractors who provide supplemental support for the Agency on an “as-needed” basis.

In anticipation of 1) expanded Public Education and Outreach compliance requirements by SB1383; continued lithium-ion battery safety/EPR messaging; and an elevated commitment to waste diversion and source reduction Public Education and Outreach programs in the foreseeable future, and 2) the SBWMA-wide rollouts of the in-schools Environmental Education and Public Spaces programs, the proposed FY19/20 Staffing Plan includes two (2.0) new FTEs compared to the FY18/19 budget. One proposed FTE is a regular staff position, titled “Outreach & Communications Coordinator” and the second proposed FTE is an additional, limited term, non-benefitted “Fellowship” position. In terms of expenditures, both positions represent the most prudent possible additions to our staff while providing necessary program and tour coverage capacity to meet our mandated and agency-adopted commitments. Additionally, the proposed FY19/20 budget’s Staffing Plan includes a Management Analyst III position that, although unbudgeted in FY18/19, received board-approval and was filled by March 2019 due to extreme deliverables associated with numerous programs and projects currently in the queue, and anticipated in the



foreseeable future. This position was reactivated and reclassified from a previously authorized “Recycling Programs Manager” position that had been filled from 2007-2016 but had been vacant since September 2016.

Based on a salary survey completed in January 2019, the Board authorized the reclassification of three existing positions, effective July 1, 2019 on February 28, 2019. These positions will be titled “Clerk of the Board/Executive Assistant” and “Program Manager II” and these changes are reflected on the proposed organizational chart in this Staffing Plan (above) and in Table 1 (below).

Salary Ranges The salary ranges for all Agency Staff positions (some are currently vacant) are presented below for FY19/20 (see Table 2). Historically, salary surveys are conducted every three years to ensure that Staff salaries and benefits are competitively priced within market. Salary ranges and benefits are evaluated to “like” solid waste public agencies and/or departments in the greater bay area. The last salary survey was conducted in April 2016. Therefore, a new salary survey was conducted by Steve Sherman Consulting in spring 2019 to establish the adjusted market-based salary ranges for each position.

Table 1 SBWMA Staffing Plan by FY

Staff Position Title FY16/17 Actual

FY17/18 Actual

FY18/19 Actual

FY19/20 Proposed

Executive Director 1.0 1.0 1.0 1.0

Sr. Facilities & Contracts Manager 1.0 1.0 1.0 1.0

Sr. Finance Manager 1.0 1.0 1.0 1.0

Program Manager II – Outreach and Communications (Formerly Recycling Outreach Programs Manager)

1.0 1.0 1.0 1.0

Management Analyst III (Formerly Recycling Programs Manager)

1.0 0 1.0 1.0

Clerk of the Board/Executive Assistant (Formerly Board Secretary/Office Mgr.)

1.0 1.0 1.0 1.0

Program Manager II – Env. Education and Non-Franchise Recyclables (Formerly Environmental Education Manager)

1.0 1.0 1.0 1.0

Environmental Education Coordinator 0 0 1.0 1.0

Outreach and Communications Coordinator 0 0 0 1.0

Environmental Programs Associate 1.0 1.0 0 0

Total Agency Staff (Regular Status): 8.0 7.0 8.0 9.0

Long Range Plan Fellowships (Limited terms-1-3yrs.; Non-benefitted positions)

0 4.0 4.0 5.0



Table 2 SBWMA Staff: Salary Ranges by Position

Staff Position Current Salary Range/Yr. Executive Director (Determined by professional services agreement) N/A Sr. Facilities & Contracts Mgr. $133,249 - $166,117 Sr. Finance Manager $133,249 - $166,117 Management Analyst III $112,196 - 140,245 Program Mgr. II (Outreach and Communications)

$100,976 - $126,220

Clerk of Board/Executive Assistant (Board Secret./Office Mgr.) $77,000 - $96,250 Program Mgr. II (Env Ed and Non-Franchise Recyclables)

$100,976 - $126,220

Environmental Education Coordinator $60,000 - 69,999 Outreach and Communications Coordinator $63,800 – 79,750 Environmental Education Associate (will be vacant in FY19/20) $52,208 - $59,999 Long Range Plan Fellowships* (non-benefitted, limited term positions) $25.75/hr.

*The RethinkWaste Fellowship positions are fulltime. Each one can, by mutual agreement, be renewed annually for 1, 2 or 3 years.This program is modeled after the County of San Mateo’s Office of Sustainability program. These positions provide environmentalindustry-based, independent work assignments for recent college grads while they help the agency achieve its critical long-term goals.

Budget Assumptions for Merit Increases A merit increase pool of 3.0% of wages is assumed for all positions within the current salary ranges for January 1, 2019. Actual merit increases are awarded by the Executive Director on a calendar year basis per the Board-adopted Compensation Policy. NOTE: When Fellowship positions are renewed, a 3% increase is assumed (from $25.00/hr. to $25.75/hr).

Employee Benefits No proposed changes in the employee benefit plans. Total benefit expense as percent of base compensation is estimated at 25.7% for FY19/20. A summary of the current benefits is as follows:

Deferred Compensation (Retirement): SBWMA has adopted a self-directed retirement plan under Section 401(a) of the Internal Revenue Service Code to which the Employer contributes an amount equal to 10 percent of the employee’s base salary. The plan is with John Hancock which holds all of the employee accounts. The employee vests in the 401(a) retirement plan immediately. SBWMA also has a 457b plan into which employees can voluntarily contribute. SBWMA matches the first 2% of employee contributions.

Employees may join both plans on the first of the month following the date of hire. The contribution amounts are subject to IRS limitations.

NOTE: SBWMA does not participate in the federal Social Security system. If the Agency were to participate in the Social Security system, the agency would incur an extra 6.2% of the staff’s gross salaries, up to the statutory limit of $117,000 for each qualified employee. In FY19/20, this annual savings for the Agency projects out to be $65,804.

Group Health Insurance – General: SBWMA strives to offer group insured plans for medical, dental, vision, life insurance, and long term disability insurance for the benefit of the employee and his/her family that are competitive with similar industry benefits. The health insurance is brokered through Arrow Benefits Group.



Medical insurance: The SBWMA currently offers a high deductible HSA medical plan with United Health Care for employees and their families. There is a 20% copay after the deductible has been met for most services. Currently, five employees participate in the plan and three employees have opted out. The premium is age based – the average premium is $824 per month plus the HSA average contribution of $458 per month per employee.

Dental insurance: Dental insurance is provided by Premier Access for employees and their families. Basic care is covered 100% and major care (crowns, dentures) is covered at 60% up to the maximum annual benefit of $2,000. The average monthly premium per employee is $127.

Vision Plan: Vision insurance is provided by Premier Access for employees and their families. A $10 copay applies to most services. Frames are covered up to $120 once per year. The average monthly premium per employee is $19.

Life Insurance: Term life insurance is provided by Guardian Insurance. The employee is provided at 100% of salary up to $200,000. The average monthly premium per employee is $86.

HR and Payroll Support: The SBWMA contracts with Modern HR, a third party professional employment organization for the following scope of work:

(a) As needed, support for human resources issues including, but not limited to, hiring, firing and discipline.(b) As needed, support for compliance with federal, state and local laws and ordinances regarding employment.(c) As agreed upon, consult on various Client projects.(d) Provide payroll and payroll tax filing services.(e) Workers’ Compensation insurance.

We pay $115/month per employee for their services.


FY18/19 BUDGETAttachment D - FY19/20 Budget Support Files: COMMODITY REVENUE, PRICINGUpdate: April 2019Summary Tables

Table D.1

COMMODITY REVENUE



FY19/20 Proposed

Budget


Tons Sold 63,272 62,729 59,249 (4,023) -6.4%Wtd Avg. Price 78.88$ 112.36$ 115.41$ 36.53$ 46.3%

Gross Revenue 4,991,022$ 7,048,016$ 6,838,073$ 1,847,051$ 37.0%Revenue Share w/ SBR -$ (472,089)$ (395,652)$ (395,652)$ #DIV/0!Buyback Payments (862,086) (880,404) (843,906) 18,181 -2.1%

Net Commodity Revenue 4,128,936$ 5,695,522$ 5,598,516$ 1,469,580$ 35.6%

Price / Volume Impact Price Volume TotalTonnage Change 78.88$ (4,023) (317,339)$ Price Change 36.53$ 59,249 2,164,391 Total Change (Gross) 1,847,051$

COMMODITY REVENUE

Attachment DDraft FY2020 Budget v5 Page 1 of 1

5/13/20192:24 PM

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 5A ATTACHMENT D - p1


FY19/20 BUDGETAttachment E - FY19/20 Budget Support Files: VOLUME, REVENUE, EXPENSE DETAILUpdate: April 2019Summary Tables

Table E.1



FY19/20 Proposed

BudgetFY20 vs. FY19

Adopted Budget Variance %Franchise Revenue

Tons 298,398 295,756 297,890 (508) -0.2%Wtd Avg.Tip Fee 117.32$ 117.06$ 124.31$ 6.99$ 6.0%Franchise Revenue 35,007,643$ 34,620,208$ 37,030,309$ 2,022,666$ 5.8%

Public RevenueCu/Yards 218,953 206,639 207,466 (11,487) -5.2%Wtd Avg.Tip Fee 41.89$ 42.26$ 42.88$ 0.99$ 2.4%Public Revenue Cu/YDS 9,172,353$ 8,731,784$ 8,896,073$ (276,279)$ -3.0%

Tons ( 3rd party - mostly Recology) 27,410 28,057 26,415 (995) -3.6%Wtd Avg.Tip Fee 114.74$ 117.80$ 121.75$ 7.02$ 6.1%Public Revenue Tons 3,144,991$ 3,305,043$ 3,216,178$ 71,186$ 2.3%

Public Revenue Total 12,317,344$ 12,036,827$ 12,112,251$ (205,093)$ -1.7%Total Tip Fee Revenue 47,324,987$ 46,657,035$ 49,142,560$ 1,817,573$ 3.8%

Table E.2

Total TS Tonnage and Yards



FY19/20 Proposed

BudgetFY20 vs. FY19

Adopted Budget Variance %Franchise tonsSBWMA Solid Waste tons 181,656 180,946 182,013 356 0.2%SBWMA Organics tons 86,361 85,447 88,121 1,761 2.0%SBWMA Food Waste tons 26,478 24,907 24,630 (1,848) -7.0%SBWMA Dirt, Inert, Other tons 3,903 4,456 3,126 (777) -19.9% Sub-total Franchise 298,398 295,756 297,890 -508 -0.2%Public tonsNon-SBWMA SW tons 2,890 3,363 4,161 1,271 44.0%Non-SBWMA Scrap tons 82 82 307 224 273.4%Non-SBWMA FOOD tons 6,392 4,856 4,766 (1,626) -25.4%Non-SBWMA C&D tons 5,867 7,876 7,025 1,158 19.7%Non-SBWMA ORGANIC tons 308 407 368 59 19.2%Non-SBWMA Asphalt Roofing tons 2,082 1,762 1,568 (514) -24.7%Non-SBWMA Clean Wood tons 118 0 0 (118) -100.0%Public Weighed Dirt ton 9,672 9,793 8,221 (1,451) -15.0% Sub-Total Public tons 27,410 28,139 26,415 -995 -3.6%Total Tons 325,808 323,895 324,305 -1,503 -0.5%

Public Cu/Yds.Public Solid Waste Yards C/Yds 41,254 59,224 62,546 21,292 51.6%Public Green Waste Yards C/Yds 54,551 40,574 48,320 (6,230) -11.4%Public C&D C/Yds 123,148 106,842 96,600 (26,549) -21.6%

Total Cubic Yards 218,953 206,639 207,466 (11,487) -5.2%

TIP FEE REVENUE

TRANSFER STATION VOLUME

Attachment EDraft FY2020 Budget v5

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FY19/20 BUDGETTable E.3

a. Summary



FY19/20 Proposed

BudgetFY20 vs. FY19

Adopted Budget Variance %MRF 6,617,080$ 7,490,082$ 7,613,837$ 996,757$ 15.1%Transfer Station 5,222,136 5,084,748 5,189,041 (33,095) -0.6%Transportation 8,101,388 7,856,568 8,098,228 (3,160) 0.0%Interest 78,493 78,493 40,885 (37,608) -47.9%

TOTAL SBR EXPENSE 20,019,097$ 20,509,892$ 20,941,990$ 922,893$ 4.6%

b. SBR Expense Detail



FY19/20 Proposed

BudgetFY20 vs. FY19

Adopted Budget Variance %MRF

Tons, Inbound 72,457 76,477 72,150 (307) -0.4%Tons, residue 9,185 13,748 12,901 3,716 40.5%Tons, net sold 63,272 62,729 59,249 (4,023) -6.4%Wtd Avg.Rate 104.58$ 119.40$ 120.02$ 15.43$ 14.8%Expense 6,617,080$ 7,490,082$ 7,110,815$ 493,735$ 7.5%

MRF Additional Sorters 503,022$ 503,022$

Transfer StationTons 392,587 380,761 377,631 (14,956) -3.8%Wtd Avg.Rate 13.30$ 13.35$ 13.74$ 0.44$ 3.3%Expense 5,222,136$ 5,084,748$ 5,189,041$ (33,095)$ -0.6%

TransportationTons 392,587 380,761 377,631 (14,956) -3.8%Wtd. Avg. Rate 20.64$ 20.63$ 21.44$ 0.81$ 3.9%Expense 8,101,388$ 7,856,568$ 8,098,228$ (3,160)$ 0.0%

Interest 78,493$ 78,493$ 40,885$ (37,608)$ -47.9%

TOTAL SBR "PAID" TONS 848,445 824,252 814,510 (33,935) -4.0%TOTAL SBR EXPENSE 20,019,097$ 20,509,892$ 20,941,990$ 922,893$ 4.6%

SBR OPERATING EXPENSE


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FY19/20 BUDGETTable E.5



FY19/20 Proposed

BudgetFY20 vs. FY19

Adopted Budget Variance %a. Summary

Solid Waste $ 8,979,487 $ 9,261,655 $ 10,511,836 $ 1,532,349 17.1%Organics $ 6,733,790 $ 6,429,376 $ 6,280,246 $ (453,544) -6.7%C&D, dirt $ 3,840,436 $ 3,537,112 $ 3,282,825 $ (557,611) -14.5%Other $ 429,926 $ 464,511 $ 443,263 $ 13,338 3.1%Subtotal $ 19,983,638 $ 19,692,653 $ 20,518,170 $ 534,532 2.7%Paid by SBR on MRF residue $ (308,505) $ (464,057) $ (491,368) $ (182,863) 59.3%

TOTAL DISPOSAL EXPENSE $ 19,675,134 $ 19,228,596 $ 20,026,803 $ 351,669 1.8%

B. DetailSolid Waste (Ox Mtn.)

Tons, net 213,874 219,506 220,793 6,919 3.2%Wtd Avg.Rate 41.98$ 42.19$ 47.61$ 5.62$ 13.4%Expense 8,979,487$ 9,261,655$ 10,511,836$ 1,532,349$ 17.1%

Organics (Newby, Grover)Tons, net 130,850 122,495 123,864 (6,986) -5.3%Wtd Avg.Rate 51.46$ 52.49$ 50.70$ (0.76)$ -1.5%Expense 6,733,790$ 6,429,376$ 6,280,246$ (453,544)$ -6.7%

C&D (Zanker)Tons, net 57,047 52,508 45,874 (11,173) -19.6%Wtd Avg.Rate 67.32$ 67.36$ 71.56$ 4.24$ 6.3%Expense 3,840,436$ 3,537,112$ 3,282,825$ (557,611)$ -14.5%

OtherTires 5,336 2,468 4,022 (1,314) -24.6%Mattresses - - - - Appliances 49,120 43,360 40,240 (8,880) -18.1%Hazardous Waste 353,229 402,392 389,714 36,485 10.3%Sharps, Misc. 22,241 16,290 9,287 (12,954) -58.2%

Expense 429,926$ 464,511$ 443,263$ 13,338$ 3.1%Summary

TS Tons 401,772 394,509 390,532 (11,240) -2.8%Wtd Avg.Rate 48.97$ 48.74$ 51.28$ 2.31$ 4.7%

Disposal Expense 19,675,134$ 19,228,596$ 20,026,803$ 351,669 1.8%

DISPOSAL & PROCESSING EXPENSE


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5A Attachment F

Material TypeFranchise Tip

Fee/TonNon Franchise

Tip Fee/Ton

Solid Waste $121 $127Green Waste $126 $128Food Waste $141 $141C&D $121 $121Dirt $108 $110

CategoryPublic Spaces

Rollout

In-School Program Rollout

Total Staffing Costs 101,000$ 188,000$ Total Materials & Support Costs 30,000$ 60,000$ Program Total * 131,000$ 248,000$

FY19/20 BUDGETED TIP FEES/TON

FY19/20 BUDGETED PROGRAM EXPENSES (Estimate)

* Total from various line items within the Budget. No increases from thePreliminary Budget.

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5B


Grant Ligon, Management Analyst Date: June 27, 2019 Board of Directors Meeting Subject: Review of Draft SBWMA 2020 Long Range Plan (2020-2024)

Recommendation This staff report is for discussion purposes only and no formal action is requested of the Board of Directors.

Summary This draft SBWMA 2020 Long Range Plan (2020-24), i.e. the “2020 Plan”, is presented for Board review, and to provide staff with content direction and resource allocation prioritization. Based on this discussion, staff intends to present a final 2020 Plan for Board consideration at the September 26th Board meeting.

The 2020 Plan replaces the Agency’s South Bayside Waste Management Authority 2015 Final Long-Range Plan (“2015 Plan”). The 2020 Plan will serve the SBWMA Board of Directors (“Board”); all Board/Staff sub-committees (Executive, Finance, Zero Waste, Pub Ed & Outreach, any ad hocs); the Technical Advisory Committee (TAC) members; staff; and stakeholders as a core decision-making guidance document for key agency programs and operations, capital improvements, and policies. The 2020 Plan will be fully integrated into the agency’s annual budget development processes. The 2020 Plan’s key initiatives will also serve as a basis for the Agency’s long-term planning process beyond its 2020-2024 timeframe.

Typically, Long-Range Planning documents have a five-year shelf-life and the 2015 Plan is no different. There is a strong need to update the 2015 Plan based on numerous changes over the past five years in policy, markets, member agency’s climate change commitments, and sustainability mandates. , The Agency’s current Board-approved Mission Statement and Guiding Principles and prioritization of near-term programs also merited adjustment during the 2020 Plan development process. Those adjustments have been reviewed with SBWMA’s major contractors Recology San Mateo County and South Bay Recycling, the SBWMA’s TAC, and various other SBWMA Committees over the past several months. Their feedback directed Staff to shorten the 2020 Plan relative to the previous version, improve its readability, and focus on certain recommended programs over others, and more. Next steps for 2020 Plan approval include incorporation of Board feedback, further contactor and Committee input, and preparation of the final 2020 Plan for Board consideration at September 26th Board consideration.

Analysis The long-range planning process has involved strong collaboration amongst the Board, TAC members, staff, and stakeholders. The 2020 Plan is intended to provide policy guideposts for the Agency’s critical pathway over a multi-year period, and to serve as a blueprint for key activities, capital investments, and policy initiatives during the coming five-year period. Based on specific aforementioned groups’ direction and feedback, Staff have developed



the draft 2020 Plan to be read easily, serve as a handy planning reference and a prioritization tool for near-term programs.

Process goals to be achieved by the 2020 Plan include:

1) Identification of major capital investment needs at Shoreway and for programs2) Understanding of key market, economic, environmental, and legal drivers that will shape Agency

policy and planning priorities3) Addressing approaches to the possible expiration or extension of the Shoreway operations and other

key materials management contracts4) Articulation of Member Agency needs and planning for SBWMA’s technical services to meet such

needs5) Operational and financial risk management, to address system costs, rate stability, and need for

uninterrupted service.

Specific draft recommendations include the following programs/initiatives, classified by their sector as done within the 2020 Plan and as shown via timeline in draft 2020 Plan Table 1:

1) Waste Reduction and Reuse: reporting on reduction in per-capita waste generation; supporting SanMateo County Office of Sustainability Foodware Reduction Ordinance and Food Recovery initiatives;Electronics Right-to-Repair policy sponsorship; and Reusable Packaging Support campaign.2) Collection: Franchise Agreement Outreach with Public Education Plan and Multi-FamilyDwelling/Commercial customer focus regarding CA Senate Bill 1383 compliance (paired with expandedorganics collection, monitoring and enforcement); Collection fleet Bio-CNG fuel conversion; expandedbattery collection and outreach; continued Extended Producer Responsibility bill sponsorship; andexpansion of Collection In-Schools and Public Spaces pilots.

3) Processing and Transfer: Materials Recovery Facility recycling equipment improvements ; Organics-to-Energy pilot then full-scale implementation; extension, RFP, options considerations or other processesfor key Processing, Landfill Disposal, Construction and Demolition debris and Organics processingcontracts.

4) Operations and Management: battery and disaster risk planning activities; environmental educationcenter messaging and event improvements; and potential various Facilities-based pilots.

Background The current 2015 Long-Range Plan was adopted by the SBWMA Board on June 25, 2015, to provide guidance on programs and activities for the Agency during 2015-2019. Prior plans were initiated with the first one in 2002 (updated in 2005), which began the development of the franchised collection programs and services that began on January 1, 2011. A master plan for the Shoreway Environmental Center was approved by the Board in April 2007, which was the basis for the $46M in capital improvements completed between the fall of 2009 and the spring of 2011. These documents have served the Agency well during the past five years, but major changes require the Agency to re-establish its priorities and focus for the next five years, hence this activity. Here’s the current plan link: South Bayside Waste Management Authority’s 2015 Final Long-Range Plan

During the last five years, the waste industry and SBWMA service area have experienced dramatic changes in terms of policies, materials markets, Member Agency sustainability-related goals, and other Member Agency priorities. Examples of such include China’s National Sword Policy closing off major markets for recycled fiber, plastic and other materials; CA Senate Bill 1383 setting extremely ambitious near-term goals for organics


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collection and processing, especially for food recovery; and Member Agency focus on Climate Action Plans and other sustainability activities.

Staff began the planning process to update the Agency’s Mission Statement and Guiding Principles and Objectives (now called Principles and Objectives, to reflect their more action-oriented nature) as starting points for developing the 2020 Plan. Adjusted Mission Statement and Principles and Objectives, along with draft versions of 2020 Plan, and were presented alongside the revised Mission Statement and Principles and Objectives to various Committees and stakeholders during the last several months, as seen in the below timeline in Table 1.

Year One of the 2020 Plan program’s recommendations will begin implementation upon January 1, 2020..

Fiscal Impact The 2020 Plan itself has no specific fiscal impact as separate Board actions will have to be taken in future years to approve recommended projects. The draft 2020 Plan’s Table 1 outlines decisions by year which will be requested of the SBWMA Board and/or Member Agencies to implement the recommendations.

Attachments: Attachment A – Draft SBWMA 2020 Long-Range Plan - Available online only at www.rethinkwaste.org

Table 1 2020 Long Range Plan Review Stakeholder Meetings/Involvement and Results

Key Date Input Meeting Objectives/Comments

March 12 Public Education and Outreach Committee

Input session #1: Suggested engagement/collaboration strengthening, topic headings, and other improvements

March 14 Technical Advisory Committee (TAC)

Input session #2: Prioritized and edited/added to topics in Plan Outline, in-person and via survey

March 28 Zero Waste Committee Input session #3: Capital Improvement Planning, refined Mission Statement and Guiding Principles

April 11 Finance Committee Input session #4: Refined Mission Statement and Guiding Principles

April 15 Public Education and Outreach Committee

Input session #5: Refined Pilot Programs and Outreach Plan sections

April 16 Franchised Hauler (Recology)

Input session #6: Refined Collection Section and other activities/focus areas

April 19 Contracted Processor (SBR)

Input session #7: Refined Processing and Operations Section and other activities/focus areas

May 9 TAC Input session #8: Discussed process, incorporating feedback, Mission Statement and Guiding Principles, and timeline to develop draft and final Plan

June 6 TAC Input session #9: Draft Plan review and discussion

June 27 Board of Directors Input session #10: Board’s first review of (second) Draft Plan (Study session format)

September 12 TAC Input session #11: (if necessary)

September 26 Board of Directors 2020 Long-Range Plan Consideration: Board approval of Plan (Option #1)

November 21 Board of Directors 2020 Long-Range Plan Consideration: Option #2 (if necessary) January 1, 2020 Mid-Year Budget Revised 2020 Long-Range Plan: Implementation Date


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6

COLLECTION AND RECYCLING PROGRAM

SUPPORT AND COMPLIANCE

Agenda Item 6




6A

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Approving the Proposed Amendment One to the Model Recology Amended

and Restated Franchise Agreement

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-43 attached hereto authorizing Amendment One to the Model Recology Franchise Agreement from January 1, 2021 to December 31, 2035, which will amend the newly negotiated hauling contract to include changes to the Bulky Item Collection, Illegal Dumping and Abandoned Waste, and Litter Reduction practices to assist in Storm Water Regulation compliance. An alternate resolution has also been prepared in the event that the SBWMA Board of Directors wishes to approve the amendment with changes only to the Bulky Item Collection and Illegal Abandoned Waste portions of the Franchise Agreement, to allow for additional study on Litter Reduction practices topic, or if the Board chooses to simply omit this item entirely. Background On May 24, 2018, the SBWMA Board approved Resolution 2018-20 to implement a workplan in support Member Agency negotiations with Recology regarding Bulky Item Collection, Abandoned Waste Collection, and integrating Litter Reduction Practices into Trash / Recycling Collection services as required by the Municipal Regional Permit (MRP) Stormwater Regulations. This action is known as “Amendment One,” and these services will be implemented with the restated and amended Franchise Agreement term of January 1, 2021 – December 31, 2035 or, by mutual agreement, sooner. The Bulky Item Collection and Illegal Dumping and Abandoned Waste Collection programs are very popular and are heading towards an operational capacity breaking point. Recology has already doubled the resources required in our Franchise Agreement based on the original program stats that they were asked to bid on (at their own expense), which were about 80 collections per day. At Board direction, Staff and the Franchise Agreement Extension Committee (FAX) negotiated with Recology’s senior management team to identify and shape cost-effective new program capacity options for Board consideration. Once approved by the SBWMA Board, the recommended program options and their costs will need to be formally approved by a majority of the Member Agencies’ elected bodies as an amendment to the re-stated and amended Franchise Agreement that takes effect on January 1, 2021. Staff is also recommending that the Board incorporate amendments to the Franchise Agreement to address storm water regulations as part of Amendment One. New stormwater regulations went into effect in 2009, with the Water Board including trash reduction requirements in the Municipal Regional Stormwater (MRP) National Pollutant Discharge Elimination System (NPDES) Permit for Phase I communities in the Bay Area. The San Mateo



Countywide Water Pollution Prevention Program (SMCWPP) Litter Work Group is addressing trash load reduction requirements outlined in the MRP, by implementing several control measures designed to significantly reduce trash in local creeks and the Bay. The SMCWPP provided an outline of Best Practices and Recommendations for Litter Management with franchise language that is proposed to be included in the attached Amendment One. The implementation of these litter reduction practices would assist the SBWMA in achieving compliance with trash/litter load reduction regulations in the Municipal Regional Stormwater Permit. Strong Board interest was expressed for expanding the Bulky Item Collection and Abandoned Waste programs capacities at the Board’s May 23, 2019 meeting. However, the Board also asked for more background information regarding the nexus between the current and proposed collection operations services provided by Recology and MRP litter reduction requirements, to which eleven of the member agencies are bound (West Bay Sanitary District is exempt). To provide important technical context to this discussion, staff has invited C/CAG’s Countywide Stormwater Program Manager, Matt Fabry, to present a program overview and field program-specific Board Member questions at today’s meeting on the litter reduction topic. The Amendment One language includes seven categories of proposed amendments to the Franchise Agreement, as outlined in the Analysis section below. Items 1 and 2 address the Bulky Item Collection and Abandoned Waste capacity expansion recommendations previously discussed by the Board. Items 3 thru 7 address the litter reduction provisions that were previously recommended by SMCWPP, and to be discussed at today’s Board meeting. Staff has provided two alternate pathways (two resolutions) for the Board’s consideration today) to provide decision-making flexibility on how it would like to proceed with a potential Amendment One approval. The first resolution version is recommended by staff, and, if approved, would include all seven categories of amendments identified below in Amendment One. However, if the Board is not prepared to act on the litter reduction items at the conclusion of the discussion at its June 27, 2019 Board meeting, an alternate resolution (2019-47) is provided to allow the Board to approve only categories 1 and 2 (Bulky Item Collection and Abandoned Waste Collection) in this Amendment One modification. Additional note: During the May 23rd meeting, the Board also asked to see actual BIC/AW program usage statistics to determine the correlation between actual program usage by each member agency vs. the percent of total that each member agency represents to the agency total. As previously noted, these two figures track extremely closely. These statistics can be reviewed in Attachment C.

Analysis Currently, Recology provides up to two Bulky Item Collection services annually without charge to each single-family residence and multi-family property (MFDs require advanced planning for delivery of roll-off containers for collection). This service is provided within 10 business days of the owner or occupant’s request, unless Recology’s Bulky Item Collection service capacity has been reached. Based on current Franchise Agreement parameters, Recology’s service capacity is limited to 150 bulky item collections system-wide per day. Recology currently makes approximately 130 to 140 bulky item collections per day so the program is operating at about 90% capacity Recology also collects abandoned waste with a cap of 30 pick-ups per day. Operationally speaking, these two services are one program; the same trucks and drivers/crews service both the Bulky Item Collection and abandoned waste collection. Each route includes a box truck and driver for recyclables, and a rear-load truck and driver for the other items. There are currently three routes. Given that Recology is nearing its maximum service level capacity for the Bulky Item Collection and abandoned waste collection programs, the SBWMA and Recology initiated discussion to develop a joint solution that allows customers to continue to receive Bulky Item Collection and abandoned waste collection services with new capacity in a timely fashion.



The following provides the recommendations included in Amendment One of the Recology Franchise Agreement, which have been agreed upon by the SBWMA and Recology, with feedback from the Member Agencies and FAX committee.

1. Add a Fourth Bulky Item and Abandoned Waste Collection Route: In order to provide Bulky ItemCollection and Abandoned Waste Collection within the 10-business day timeframe of the FranchiseAgreement, a fourth route can be added to the Bulky Item Collection/Abandoned Waste Collectionprogram to expand capacity. This would result in an increase of the service level cap of from 150 BulkyItem Collections to 210 Bulky Item Collections per day. The financial impact would include anapproximate cost of $631,000 in Rate Year 2021 for an additional annual route (covers one box truck anddriver for recyclables, and one rear-loader and driver for other items).

2. Develop a Shoreway Voucher Program for Bulky Item Drop-Off: Recology will develop a voucherprogram that offers residents the ability to drop-off of Bulky Item Collection material at the ShorewayEnvironmental Center (Shoreway). Recology would offer vouchers to residents if a resident does not wantto wait for the service date offered by Recology. The financial impact includes $125,000 up-front costs forthe bulky item voucher system and $233,000 for annual operating costs. Please note: these quotationswere provided in late 2018 and are likely to slightly change depending on (if) when this program isactually implemented.

3. Addition of Solid Waste Collection on Saturday and Sunday: Add services to Schedule Q forSaturday and Sunday service. It will be provided at no additional charge for customers subscribing to aminimum of three (3) times per week service or at an additional fee for those businesses that have lessthan three days a week service (an additional service charge of $55.31 per month for Saturday and$67.37 per month for Sunday service).

4. Addition of Litter and Overage Assessment Program Evaluation – Recology currently documentsoverages related to collection services. This addition will require Recology to provide a monthly report tothe SBWMA. No additional cost.

5. Requirements for Overage Charges - Recology currently charges for overages beyond the two allowedevents. Recology is requesting that language be added to the amendment that states they “shall imposeoverage charges”, to allow Recology Customer Service the permission to give a courtesy waive of chargesdepending on the situation. No additional cost.

6. Requirements for Photographic Evidence of Overages – The SBWMA would like to have the option forRecology to research on-board cameras for all collection vehicles, which will be used for monitoringactivities, and overage activities. No additional cost unless SBWMA decides to move forward with cameras.

7. Add Definition of Overage – A definition of “overage” is necessary to provide direction for Recologywhen assessing a container. No additional cost.

Fiscal Impact The costs for Bulky Item and Abandoned Waste Collection is allocated among the Member Agencies according to the number of single-family and commercial accounts in the community. For example, if a Member Agency currently has 18% of the single-family accounts, then it will receive an allocation of 18% of the single-family Bulky Item Collection and Abandoned Waste program costs. If a Member Agency has 10% of the commercial accounts, then it will receive 10% of the multi-family Bulky Item Collection and Abandoned Waste program cost allocation. Figure 1, below, shows the Cost allocation for Bulky Item Collection services



for 2015 in comparison to the allocation that is currently used each fiscal year according to the number of residents and commercial businesses per Member Agency. It is recommended that costs be allocated in the same manner, given how closely the Bulky Item Collection and residential percentages track each other.

Figure 1. Cost Allocation for Bulky Item Collection Services in 2015

Costs will increase only if/when a fourth route is added. The financial impact would include an approximate cost of $630,000 for an additional annual route (covers one new truck and driver for recyclables, and one rear-loader and driver for other items).

The costs for the Bulky Item Voucher Program for Rate Year Eleven (2021) shall be determined in 2020 by the Recology and SBWMA based on agreed design and costs for the Voucher Program, which shall be subject to SBWMA Board approval. The approved costs shall be added to the projected Rate Year Eleven (2021) Contractor’s Compensation as specified in Attachment N to the Franchise Agreement. When adding the Voucher Program costs to Attachment N, Recology shall allocate the costs to Member Agencies in the same manner as costs for the Bulky Item Collection Program. The total systemwide financial impact is estimated to include $125,000 in up-front costs for the Bulky Item Voucher system and $233,000 in annual operating costs.

Attachments: Proposed/Recommended Resolution 2019-43 to include in Amendment One changes to the Bulky Item Collection, Illegal Dumping and Abandoned Waste, and Litter Reduction Practices Alternate Resolution 2019-43 to include in Amendment One changes to the Bulky Item Collection, Illegal Dumping and Abandoned Waste (exclude Litter Reduction Practices from the amendment) Attachment A – Proposed Amendment One to the Franchise Agreement Attachment B – Amendment One Final Findings and Recommendations Report Attachment C—Bulky Item Collection/Abandoned Waste Program: Actual Usage Statistics

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

BIC Usage Compared to Residential Allocation Totals

Member Agency BIC Total by Percentage Residential Allocation Total by Percentage




MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING AMENDMENT ONE TO THE MODEL RECOLOGY FRANCHISE AGREEMENT FOR THE TERM OF JANUARY 1, 2021 TO DECEMBER 31, 2035, TO INCLUDE CHANGES

TO THE BULKY ITEM COLLECTION, ILLEGAL DUMPING, AND ABANDONED WASTE PRGRAMS, AND LITTER REDUCTION PRACTICES TO ASSIST IN STORM WATER

COMPLIANCE

WHEREAS, on June 22, 2017, the South Bayside Waste Management Authority (SBWMA) Board of Directors approved a model Franchise Agreement template, as the recommended Franchise Agreement for each Member Agency to individually execute for hauling services to be performed by Recology of San Mateo County for the years 2021 through 2035; and

WHEREAS, eight (8) Member Agencies fully executed Franchise Agreements with Recology of San Mateo County by April 24th, 2018, which satisfied the Joint Powers governance requirement to contractually proceed with Recology of San Mateo’s Franchise Collection services after the expiration of the its existing franchise agreement, which expires on December 31, 2020; and

WHEREAS, the popular Bulky Item Collection and Abandoned Waste Collection programs provided by Recology of San Mater County are near capacity; and

WHEREAS, the SBWMA must take steps to reduce litter entering the stormwater system to meet Municipal Regional Storm Water Permit (MRP) mandates on behalf of the Member Agencies; and

WHEREAS, the attached Amendment One to the model Franchise Agreement will address the need for additional Bulky Item Collection and Abandoned Waste Collection services, incorporate litter reduction practices to assist the SBWMA in meeting storm water permit mandates, and clarify and modify administrative provisions in the model Franchise Agreement.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority Board of Directors authorizes the approval of the attached Amendment One to the model Franchise Agreement for the term of January 1, 2021 to December 31, 2035, which shall require ratification by at least eight (8) Member Agencies for the Amendment One to be adopted.


Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist.









MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING AMENDMENT ONE TO THE MODEL RECOLOGY FRANCHISE AGREEMENT FOR THE TERM OF JANUARY 1, 2021 TO DECEMBER 31, 2035, TO INCLUDE CHANGES

TO THE BULKY ITEM COLLECTION, ILLEGAL DUMPING, AND ABANDONED WASTE PROGRAMS

WHEREAS, on June 22, 2017, the South Bayside Waste Management Authority (SBWMA) Board of Directors approved a model Franchise Agreement template, as the recommended Franchise Agreement for each Member Agency to individually execute for hauling services to be performed by Recology of San Mateo County for the years 2021 through 2035; and

WHEREAS, eight (8) Member Agencies fully executed Franchise Agreements with Recology of San Mateo County by April 2018, which satisfied the Joint Powers governance requirement to contractually proceed with Recology of San Mateo’s Franchise Collection services after the expiration of the its existing franchise agreement, which expires on December 31, 2020; and

WHEREAS, the popular Bulky Item Collection and Abandoned Waste Collection programs provided by Recology of San Mater County are near capacity; and

WHEREAS, the attached Amendment One to the model Franchise Agreement will address the need for additional Bulky Item Collection and Abandoned Waste Collection services and clarify and modify administrative provisions in the model Franchise Agreement; and

WHEREAS, the SBWMA Board of Directors discussed additional proposed amendments to the model Franchise Agreement that would include litter reduction practices and determined that such practices should not be included in Amendment One.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority Board or Directors directs the Executive Director to remove all references to Litter Reduction provisions in the attached Amendment One to the model Franchise Agreement for the term of January 1, 2021 to December 31, 2035.

NOW, THEREFORE BE IT FURTHER RESOLVED that the South Bayside Waste Management Authority Board of Directors authorizes the approval of the attached Amendment One, subject to the removal of the Litter Reduction provisions, and such approval shall require ratification by at least eight (8) Member Agencies for the Amendment to be adopted.


Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos






East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist.


SBWMA/Recology Page 1

AMENDMENT ONE BY __________________ {Insert Member Agency name} AND

RECOLOGY SAN MATEO COUNTY TO THE

AMENDED AND RESTATED FRANCHISE AGREEMENT BETWEEN ___________ {Insert Member Agency name} AND RECOLOGY SAN MATEO COUNTY FOR

RECYCLABLE MATERIALS, ORGANIC MATERIALS, AND SOLID WASTE COLLECTION SERVICES

This first Amendment (“Amendment One”) to the Amended and Restated Franchise Agreement between ___________ {insert Member Agency name} and Recology San Mateo County for Recyclable Materials, Organic Materials, and Solid Waste Collection Services (“Agreement”), effective as of ___________, ____ {insert date} (“Effective Date”), is made by and between _______________ {Insert Member Agency name}, a Municipal Corporation of the State of California (“Agency”), and RECOLOGY SAN MATEO COUNTY, a California corporation (“Contractor”).

RECITALS

A. WHEREAS, Section 5.05 of the Agreement requires Contractor to provide On-Call Bulky ItemCollection Service for residents and specifies that Contractor shall schedule a maximum of onehundred fifty (150) On-Call Curbside Bulky Item Collection Service events per service day for theSBWMA Service Area (“daily limit”), and Section 5.09 of the Agreement requires Contractor to provide abandoned waste cleanup Collection service for a maximum of thirty (30) abandoned waste Collection events per service day for the SBWMA Service Area (“daily limit”); and,

B. WHEREAS, Contractor conducts the On-Call Bulky Item Collection Service and abandoned wastecleanup Collection service using the same Collection routes; and, as a result, the total combined dailylimit of On-Call Curbside Bulky Item Collection Service events and abandoned waste cleanupCollection service events (collectively, “On-Call Pick-ups”) is one hundred eighty (180) On-Call Pick-Ups per day; and,

C. WHEREAS, anticipating that the combined daily limit would not be sufficient to handle actual demandfor On-Call Pick-Ups, the SBWMA and Contractor met and conferred and negotiated a ModelAmendment One to the Agreement, which sets forth a strategy to address the problem; and,

D. WHEREAS, SBWMA and Member Agencies agree that reduction of litter related to Generatorplacement of Discarded Materials in Containers and subsequent Collection by Contractor is importantto reduce impacts on watersheds where trash and litter present an aesthetic nuisance, and a seriousthreat to aquatic life in creeks and the oceans, and Contractor has agreed to litter reduction strategies; and,

E. WHEREAS, Parties identified minor items in the Agreement that warranted clarification or revision;and,

F. WHEREAS; the SBWMA presented the Model Amendment One to the SBWMA’s Board of Directorson _________, 2019; and, the Board took action recommending that each Member Agency enter intoModel Amendment One in the form presented to the Board; and,

G. WHEREAS, the Agency and Contractor have agreed to the revisions to the Agreement as stated in thisAmendment One.

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NOW THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the Agency and Contractor hereby agree to amend the Agreement through this Amendment One as follows:

TERMS OF AMENDMENT ONE

1. DEFINITIONS

1.1 Attachment A, Definitions. The following definitions are hereby added to Attachment A:

a. 2019 Amendment means the amendment to the Agreement that the SBWMA Boardapproved, and recommended that each Member Agency enter into, on _________,2019.

b. On-call Pick-Up means an On-Call Curbside Bulky Item Collection Service event or an on-call abandoned waste Collection service event.

c. Voucher means a paper or electronic voucher, coupon, or ticket issued by Contractor toa Customer entitling the receiving Person to a one-time delivery of Bulky Items to theDesignated Transfer and Processing Facility.

2. BULKY ITEM AND ABANDONED WASTE COLLECTION SERVICES

2.1 Residential On-Call Bulky Item Collection Service. Section 5.05.H shall be amended to read asfollows:

H. Maximum Number of Daily Events. Contractor shall schedule up to a maximum of onehundred fifty (150) On-Call Curbside Bulky Item Collection Service events per service day for theSBWMA Service Area (“daily limit”). The maximum number of daily events includes On-Call BulkyItem Collection Service events provided to both Single-Family and Multi-Family ResidentialComplexes, and those events provided at no charge and events paid for by the Customer, Owner,or property manager. Contractor shall schedule On-Call Curbside Bulky Item Collection Serviceevents no more than ten (10) Business Days after the Owner’s or Occupant’s request up to themaximum number of daily events. Upon reaching the maximum number of daily events,requested On-Call Curbside Bulky Item Collection Service event shall be scheduled on the nextavailable regularly scheduled Solid Waste Collection Day.

SBWMA may adopt an allocation system for On-Call Bulky Item Collection Service events, in order to allocate the “daily limit” for such events among Member Agencies. If adopted, Contractor shall comply with the allocation system. The Agency agrees not to assess Liquidated Damages if Contractor does not meet the ten (10) Business Day requirement if the delay has resulted from (i) the volume of On-Call Bulky Item Collection events being in excess of the “daily limit” for the SBWMA Service Area or Agency, or (ii) the Customer’s request to schedule the event on a date more than ten (10) Business Days in the future.

Contractor shall notify the SBWMA when the daily average number of On-Call Pick-Up events reaches one hundred sixty-five (165) events, or any subsequently increased number of events

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mutually agreed by the SBWMA Board and Contractor, combined for Residential On-Call Bulky Item Collection service and abandoned waste Collection service, including On-Call Pick-ups provided at no charge and On-Call Pick-ups paid for by Customers, Owners or property managers) for the SBWMA service area. For the purpose of this Section, the daily average number of On-Call Pick-ups shall be calculated on a weekly basis as the total number of On-Call Pick-Ups performed Monday through Friday divided by the number of Collection days in the week (e.g., typically five (5) days, except four (4) days for weeks with a Holiday). When this threshold occurs for four (4)consecutive weeks, Contractor shall provide SBWMA with reports documenting these statisticsand, upon confirmation of that fact, SBWMA staff shall notify the SBWMA Board of Directors thatthe service capacity has been filled and to present options, described in this section. Contractorshall continue to supply monthly reporting of the average service count from the time of theoriginal notice until action is taken by the SBWMA Board of Directors.

Upon a confirmed notice from Contractor, the SBWMA Board may consider options, including, but not limited to: (i) authorizing Contractor to implement and perform on-going operation of an additional Bulky Item and abandoned waste Collection route; (ii) adjustment of the ten (10) Business Day required provision of the On-Call Pick-ups; (iii) reduction in the number of On-Call Bulky Item pick-ups allowed for each Customer each year; and/or, (v) expansion of the Bulky Item Voucher program.

The SBWMA Board is hereby authorized, on behalf of the Agency, to determine if future changes are required for the Residential On-Call Bulky Item Collection services described in Section 5.05 and abandoned waste Collection service described in Section 5.09. Such changes, if any, shall be implemented and incorporated into this Agreement in accordance with Section 15.12, Right of Agency to Make Changes in Services and Service Levels. If the SBWMA elects to implement an additional Bulky Item and abandoned waste Collection route, the route shall include two trucks and two drivers, and the annual cost for the route shall be that specified in Attachment U for Rate Year 2021 (subject to adjustment in accordance with the methodology set forth in Attachment K, if the new route is implemented in a later Rate Year). Each additional route approved by the SBWMA shall provide capacity for sixty (60) additional daily Bulky Item Collection and/or abandoned waste Collection services. In the event that the creation of a new route provides for more capacity than there is demand for the Bulky Item Collection services, Contractor shall permit additional collections of abandoned waste up to the total capacity.

2.2 Abandoned Waste Clean-Up Collection Service. Section 5.09.A shall be amended to read as follows:

A. General. Contractor shall provide abandoned waste cleanup Collection service to Agency asprovided herein. Contractor shall schedule up to a maximum of thirty (30) abandoned wasteCollection events per service day for the SBWMA Service Area. Contractor shall make everyeffort to collect abandoned waste within one (1) Business Day of being notified by Agency,SBWMA, Customer, or Contractor’s vehicle drivers and route supervisors of the occurrence ofabandoned waste or illegal dumping. Upon reaching the maximum thirty (30) events,Collection of abandoned waste event shall be scheduled and performed by Contractor on thenext available service day. This service shall require Contractor to Collect abandoned orillegally dumped Solid Waste, Recyclable Materials, and Organic Materials. This service doesnot include Collection of litter or litter abatement activities.

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Section 5.05.H describes a process for notification and consideration of program changes when the daily average number of On-Call Pick-Up events reaches one hundred sixty-five (165) events combined for Residential On-Call Bulky Item Collection service and abandonedwaste Collection service, including On-Call Pick-ups provided at no charge and On-Call Pick-ups paid for by Customers, Owners, or property managers).

3. BULKY ITEM VOUCHER PROGRAM

3.1 Bulky Item Voucher Program. New Section 7.14 is hereby added as follows:

7.14 BULKY ITEM VOUCHER PROGRAM

A. General. Contractor shall implement a Bulky Item Voucher program (“Program”) in whichContractor generates and issues Vouchers to Customers who call to request On-Call BulkyItem Collections but whose pick-ups cannot be scheduled within the ten (10) Business Day window contemplated by Section 5.05.H due to the volume of On-Call Bulky ItemCollection events being in excess of the “daily limit” for the SBWMA Service Area orAgency. Each Voucher issued would replace one (1) of the On-Call Bulky Item Collectionoffered to that Customer pursuant to Sections 5.05.A, 5.05.B, and 5.14.E. and allow theCustomer to deliver Bulky Items to the Designated Transfer and Processing Facility at noadditional charge. A voucher would only be issued if the Customer agreed to accept it. Toeffectively manage Program utilization, the program shall only be publicized as mutuallyagreed by SBWMA staff, Contractor and Operator.

B. Pilot Program. As a first step in implementation, a pilot program (“Pilot Program”) shallbe offered to all Member Agencies. Contractor has provided estimates of its start-up andoperating costs as shown in Attachment T, which shall be further evaluated and refinedduring the Pilot Program and/or its meet-and-confer process. Contractor, Operator andSBWMA staff shall meet and confer to design the Pilot Program and agree on costs.Contractor shall commence the Pilot Program (i) at the conclusion of the meet and conferprocess, (ii) six (6) months after the date that the 2019 Amendment becomes effective inaccordance with Section 7.4 of such amendment, or (iii) January 1, 2020, whicheveroccurs last. The Pilot Program costs agreed to by the SBWMA and Contractor shall beincluded in Contractor’s Total Annual Costs of Operation beginning Rate Year 2020. ForRate Year 2020, these costs will be allocated across Member Agencies in the same manner as costs for the Bulky Item Collection program; for subsequent Rate Years, they will beallocated based on Member Agency usage for the previous 12 months ending March 31.

C. Full Program Implementation. Based on the findings of the Pilot Program, the Contractor,Operator and SBWMA staff will develop recommendations for the design, cost, andimplementation schedule of the full Program throughout the Service Area. The SBWMABoard shall review the Program recommendations and provide authorization toContractor to implement the Program throughout the Service Area (or not implement the Program) no later than January 1, 2021.

D. Voucher Software Management System. The Contractor’s software systems shall becapable of generating Vouchers that include and/or can provide monitoring and reporting for: (i) a unique identification (e.g. serial number, QR code, etc.), (ii) account information,including account number, customer name, service address, billing address, number ofVouchers issued to date per account, (iii) date of issuance and expiration date; and/or (iv)

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any other information determined by SBWMA staff and Contractor to be necessary or beneficial through the pilot program.

E. Designated Transfer and Processing Facility. Contractor shall coordinate theimplementation and on-going operation of both the Pilot Program and Program with theoperator of the Designated Transfer and Processing Facility. Contractor shall provide PilotProgram and Program data to the Designated Transfer and Processing Facility operatorand shall receive data from the facility operator on the redemption of Vouchers. TheContractor shall not be required to pay Transfer, Processing, or Disposal costs for theBulky Items delivered to the Designated Transfer and Processing Facility by Personsredeeming Vouchers.

F. Reporting. As part of the Pilot Program, SBWMA staff and Contractor shall review thereports generated by Contractor’s software systems and agree upon the format, andcontent of reports to be provided by Contractor related to the operation of the Program.

G. Conditions. Notwithstanding any other provision of this Section 7.14, the followingconditions shall apply. Contractor shall not be required to implement the Pilot Programor the Program unless (i) the costs thereof have been mutually agreed by SBWMA andContractor and incorporated into Contractor’s Compensation in a mutually agreedmanner, and (ii) Operator has consented to such implementation. In addition, Contractorshall not be required to implement the Pilot Program or the Program in any MemberAgency that has not approved and entered into the 2019 Amendment.

4. CONTRACTOR’S COMPENSATION ADJUSTMENTS FOR VOUCHER PROGRAM

4.1 Contractor’s Compensation for Rate Year Eleven (2021). Section 11.02.A shall be removed andreplaced with the following:

Contractor’s Compensation for Rate Year Eleven (2021). Contractor's Compensation for 2021 shall be determined in 2020 by adjusting Contractor's projected 2021 Contractor's Compensation shown on Attachment N to reflect the following factors:

• Change in Customer account and service levels as provided in Attachment K;

• Change in fuel prices as provided in Attachment K; and,

• Addition of Bulky Item Voucher program costs as agreed upon by the Contractor and SBWMA.

4.2 Attachment K, Contractor’s Compensation and Rate Setting Process. Attachment K shall be amended as follows:

Section 4, Table 1, Contractor’s Compensation Adjustment Methodology. In the section of Table 1 labeled “Contractor Pass-Through Costs,” a new row shall be added immediately after the “Cap Carry Forward” row, to read as follows:

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Cost Adjustment to 2021 Projected 2021 Costs for

Rate Year Eleven (2021) Contractor’s Compensation

Annual Adjustment to Contractor’s Compensation for Rate Years Twelve to

Twenty-Five (2022 - 2035) E. Allocated Bulky Item Voucher

Program Costs (e.g., costs related to General and Administrative for the Voucher Program)

This item only applies if implementation of a Voucher program is agreed by the SBWMA and Contractor and approved by the SBWMA Board.

Voucher program costs shall be included in the “Single-family Bulky Item Materials (two On-Call Bulky Collection events)” Line of Business/Service Sector, but shall be reported as a separate line item,and allocated as provided in this row E.

The Allocated Bulky Item Voucher Program Cost amount for Rate Year Eleven (2021) shall be determined in 2020 by the Contractor and SBWMA based on agreed Voucher program costs and final Voucher program design and shall be subject to SBWMA Board approval. The approved amount shall be added to the projected Rate Year Eleven (2021) Contractor’s Compensation as specified in Attachment N. When adding the Voucher program costs to Attachment N, Contractor shall allocate the costs to Member Agencies in the same manner as costs for the Bulky Item Collection program.

• Step One: Annually adjust previously agreed Allocated Bulky Item Voucher Program Costs by 100% of the Annual Index Change using CPI-U.

• Step Two: Annually adjust Allocated Bulky Item Voucher Program Costs to reflect changes in usage, scope or third party costs, as agreed by the SBWMA and Contractor and approved by the SBWMA Board.

5. LITTER REDUCTION

5.1 The following changes shall be made:

5.2 Solid Waste Collection. Section 5.02.B.1 shall be amended to read as follows:

B. Multi-Family Dwellings

1. General. Contractor shall Collect Solid Waste from Multi-Family Dwellings asfrequently as scheduled by Customer, but not less than once per week, and shall billCustomers at Agency-approved Rates. Contractor shall provide extra Collection pick-ups of Containers within one (1) Business Day of Customer’s request and shall billCustomers at Agency-approved Charges specified in Attachment Q. Collection onSaturday and/or Sunday shall be provided at no additional charge for Customerssubscribing to service a minimum of three (3) times per week or at the Rate approvedin Schedule Q for Customers subscribing to less than three (3) times per week service.

5.3 Section 5.02.C.1 shall be amended to read as follows:

C. Commercial Premises

1. General. Contractor shall Collect Solid Waste from Commercial Premises asfrequently as scheduled by the Customer, but not less than once per week, and shallbill Customers for the service at Agency-approved Rates. Contractor shall provideextra Collection pick-ups of Containers within one (1) Business Day of Customer’srequest and shall bill Customer at Agency-approved Charges specified in AttachmentQ. Collection on Saturday and/or Sunday shall be provided at no additional chargefor Customers subscribing to service a minimum of three (3) times per week or at theRate approved in Schedule Q for Customers subscribing to less than three (3) timesper week service.

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5.4 Attachment Q, Saturday and Sunday Service. Attachment Q shall be amended to include a new “Saturday Service Surcharge – 1 or 2 times per week service” at [$55.31] per month and “Sunday Service Surcharge” at [$67.37] per month for Rate Year Eleven (2021). Such amounts shall be adjusted consistent with the adjustment to other rates in Attachment Q.

5.5 Monthly Reports. New Section 9.05.I is hereby added as follows:

I. Overages. The number of recorded events of Overages, as defined in Section 8.02.G. At therequest of a Member Agency, Contractor will separately provide the Member Agency withthe names and service addresses of Customers within the Member Agency’s Service Area who were recorded as having an Overage in the previous calendar month. This information willnot be included in the Contractor’s standard monthly report, which is shared with all MemberAgencies and the SBWMA.

5.6 Collection of Excess Materials (Overages). Section 8.02.G shall be amended to read as follows:

Contractor shall direct its employees to Collect an Overage on two (2) occasions each Rate Year at no additional cost to Customer. Contractor must provide a notice to Customer documenting the Overage in order to count the Overage Collection towards the 2) per Rate Year for each Customer. Customers that place an Overage for Collection for a third and subsequent events shall be assessed an Overage fee by Contractor, but Contractor has discretion to waive this fee if Customer demonstrates to Contractor’s satisfaction that material creating the overage was placed in the container by a third party, or that there is another valid reason that the Customer should not be charged. Prior to assessment of the fee Contractor shall directly contact the Customer via a phone call or voice message to notify them of the Overage Collected. Contractor shall bill Customer for a third and subsequent Overage events at Agency-approved Charges specified in Attachment Q. Contractor shall provide Customers the opportunity to request an Overage Collection service in advance. In such case, Contractor shall bill the Customer at the Agency-approved Charge specified in Attachment Q.

Contractor shall provide Customers the opportunity to subscribe to Overage Collection service, in advance, or purchase Overage tag(s) from the Contractor. Each Overage tag permits the Customer to set out one (1) thirty-two (32) gallon garbage bag of Solid Waste next to their Solid Waste Container on the Customer’s regularly scheduled collection day, for Collection by Contractor. Contractor shall provide Customers the opportunity to purchase Overage tags through its Customer service department or electronically via Contractor’s website. Contractor shall mail or deliver Overage tags to Customers within three (3) Business days of Customer’s request. The Charge for Overage tags is specified in Attachment Q and includes all aspects of purchasing the tags, printing, and distribution (i.e., mailing or direct delivery by Contractor). Customers shall also be provided the opportunity to purchase Overage tags at Contractor’s local office. The quantity of Overage tags per request from Customer shall be limited to five (5) per request.

If the Agency and/or Contractor receive numerous Complaints (as determined by the Agency) from Customers regarding Customer dissatisfaction with the requirement to purchase Overage tags, the Agency reserves the right to require the Contractor to modify its Overage program to better serve its Customers and/or require the Customer to subscribe to additional Collection service.

5.7 General Vehicle Specifications. New Section 8.04.B.4 shall be amended as follows:

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All Collection vehicles shall have cameras to monitor loading activities including, at a minimum: (i) back-up cameras mounted at the rear and side of the vehicle; and, (ii) a hopper camera clearlydisplaying the contents of the hopper prior to compaction. At the time of the review of collectionvehicle specifications described in Section 8.04.B.10, SBWMA may request that Contractorpresent options related to these camera systems to assess potential additional functionality ofthose systems. The parties acknowledge that any added functionality may require increased costsbeyond the cost of the camera systems themselves, such as information technology, customerservice, and operational costs, that those costs may be recurring, and that those costs may beuncertain at the time Contractor presents its options. It is understood that in presenting the above options, Contractor may include such other increased costs, and may propose methods to dealwith the uncertainty and recurring nature of those costs. In the event that SBWMA or any Member Agency requests that Contractor implement any such added functionality, such a request wouldbe treated as an SBWMA- or Agency-directed Change in Scope under Section 15.12.

6. CLARIFICATION AND ADMINISTRATIVE MODIFICATIONS

6.1 The following changes shall be made to provide clarification and administrative modifications tothe Agreement:

6.2 Term. Section 3.02 shall be amended to read as follows:

Notwithstanding any other provision of this Agreement to the contrary, the 2009 FranchiseAgreement, this amendment and restatement thereof, and any other amendments mutuallyagreed by the Parties, shall together constitute a single agreement between the Parties with asingle unbroken term (the “Term”).

The original Term, set forth in the 2009 Franchise Agreement, began on January 1, 2011 with aninitial duration of ten (10) years, ending on December 31, 2020. This amendment and restatementextends the Term for an additional fifteen (15) years, for a total Term of twenty-five (25) years.Upon the Effective Date, the Term shall be extended until midnight on December 31, 2035, unlessearlier terminated, or extended as provided in Section 3.03.

Except as provided below in this Section 3.02, the Parties intend for the 2009 FranchiseAgreement to govern the rights and obligations of the Parties through December 31, 2020, andfor this Agreement to govern the rights and obligations of the Parties from and after January 1,2021. Thus, to the extent this Agreement amends the 2009 Franchise Agreement, theamendments shall not take effect until January 1, 2021, and shall not be retroactive.

As an exception to the foregoing, (A) upon the Effective Date, (i) the 2009 Franchise Agreementshall be amended to extend the Term to 2035 as provided above, and (ii) the 2009 FranchiseAgreement shall be amended to the extent necessary to give effect to Section 11.02.F of thisAgreement, and (B) upon the effectiveness of the 2019 Amendment, the 2009 FranchiseAgreement shall be amended to the extent necessary to give effect to such amendment.

6.3 Right of Agency to Make Changes in Services and Service Levels. Section 15.12.A shall be amendedto read as follows:

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A. Agency may, without amending this Agreement, direct Contractor to cease performingone or more types of service described in Articles 5 or 6, or may direct Contractor to modify thescope of one or more such services, may direct Contractor to perform additional Solid Waste,Targeted Recyclable Materials, Organic Materials, Used Motor Oil, Used Motor Oil Filters,Household Batteries and Cell Phones or Plant Materials handling services, or may otherwise direct Contractor to modify its performance under any other Section of this Agreement. In addition,SBWMA may, without amendment of this Agreement, direct a change: (i) in the number of WasteZero Specialists as provided in Section 7.04.A, (ii) in Other Services as provided in Section 7.13,(iii) in the Residential On-Call Bulky Item Collection service described in Section 5.05, (iv) in theabandoned waste Collection service described in Section 5.09, (v) in the Bulky Item Voucherprogram described in Section 7.14.C, and/or (vi) in Collection Vehicle camera systems and relatedadditional functionality, as provided in Section 8.04.B.4. In the event of an SBWMA-directedchange under items (iii), (iv) or (v), the provisions of Section 11.06 shall apply, but with theSBWMA substituted in the place of Agency. In the event of any conflict between an Agency-directed change and an SBWMA-directed change, the SBWMA-directed change shall govern.Agency hereby authorizes the SBWMA, with the approval of the SBWMA Board, to do thefollowing on behalf of Agency: (a) to establish the terms and conditions of any program or servicechanges under items (iii), (iv) or (v) above, (b) to include any costs associated with an SBWMA-directed change in Contractor’s Compensation and/or Pass-Through Costs, (c) to determineAgency’s share of such costs and to allocate such share to Agency, and (d) to amend thisAgreement as mutually agreed with Contractor to give effect to the foregoing. An SBWMA-directed change shall be deemed to be an Agency-directed change for purposes of thisAgreement. Contractor shall promptly and cooperatively comply with such direction.

7. MISCELLANEOUS PROVISIONS

7.1 Recitals and Headings. The above recitals are incorporated herein by reference and are made apart of this Amendment One. However, headings in this document are for convenience ofreference only and are not to be considered in any interpretation of this Amendment One.

7.2 Entire Agreement. This Amendment One contains the entire understanding of the Parties withrespect to the subject matter hereof and supersedes all prior and contemporaneous agreementsand commitments with respect thereto. Except as expressly modified by this Amendment One,all other terms and conditions of the Agreement remain in full force and effect, unmodified, andapply to this Amendment One as though fully set forth herein.

7.3 Counterparts. This Amendment One may be executed in counterparts, each of which shallconstitute an original, and all of which, when taken together, shall constitute one and the sameinstrument.

7.4 Effectiveness. It shall be a condition precedent to the effectiveness of this Amendment One thatat least eight (8) of the SBWMA’s Member Agencies enter into Amendment One.

IN WITNESS WHEREOF, Agency and Contractor have executed this Amendment One as of the day and year first above written.

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AGENCY NAME RECOLOGY SAN MATEO COUNTY

By: ____________________________ By: __________________________ XXXX Michael J. Sangiacomo City Manager President and CEO

ATTEST: _______________________ By: __________________________ XXXX Cary Chen City Clerk Secretary

APPROVED AS TO FORM:

_______________________ XXXXX

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ATTACHMENT T CONTRACTOR’S PRELIMINARY ESTIMATES OF VOUCHER PROGRAM

START-UP AND OPERATING COSTS

RECOLOGY SAN MATEO COUNTYVoucher ProgramEstimated Costs in 2018 Dollars

5-YEAR PERIOD

Up Front 5 Year Life HF&HItems Company/Individual Total Cost Annual Cost

Hardware - Scanner, Scanner Software & Tablet SBR 2,000.00$ 400.00$ Hardware - Scale House Installation SBR 1,400.00$ 280.00$

Coding - IT Team Recology 63,000.00$ 12,600.00$ Coding - PC Scales PC Scales 28,000.00$ 5,600.00$ Coding - Computaris Computaris 17,528.83$ 3,505.77$

Project Development Cost Recology 8,690.77$ 1,738.15$

SBR Accounting Modifications SBR 4,567.00$ 913.40$

Total 125,186.60$ 25,037.32$ 25,037.32$

Annual Operating - Assuming 15,600 Vouchers per YearItems Company/Individual

Computaris Operation Fee Computaris 28,046.16$ 28,046.16$

Hardware - Replacement Recology 1,500.00$ 1,500.00$ Hardware - IT OPS Technical Services Recology 8,400.00$ 8,400.00$ PC Scales Maintenance SBR 6,000.00$ 6,000.00$

CSR Hours Recology 154,608.75$ 123,687.00$

Printing Recology 1,872.00$ 1,497.60$ Mailing Recology 7,800.00$ 6,240.00$

Total 208,226.91$ 208,226.91$ 175,370.76$

TOTAL PROGRAM COST 233,264.23$ 200,408.08$

Operating Ratio (90.5%) 24,486.30$ 21,037.31$

Total Compensation 257,750.53$ 221,445.39$

Additional Anlysis of Program Cost for BIC Vouchers + Pilot Programs

Fixed Cost 76,224.84$

Variable Cost per Voucher 11.64$ 9.31$

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ATTACHMENT U RESIDENTIAL ON-CALL BULKY ITEM COLLECTION SERVICE

AND ABANDONED WASTE COLLECTION SERVICE ROUTE COST

2021 Dollars

Annual Cost of Operations

Wages for CBAs $269,064

Benefits for CBAs $148,795

Payroll Taxes $21,889

Workers Compensation Insurance $27,294

Total Direct Labor Related-Costs $467,042

Direct Fuel Costs $20,748

Other Direct Costs $20,223

Depreciation

- Collection Vehicles $51,433

- Containers $0

$51,433

Allocated Indirect Costs excluding Depreciation

General and Administrative $0

Operations $0

Vehicle Maintenance $0

Container Maintenance $0

Total Allocated Indirect Costs excluding Depreciation $0

Total Allocated Indirect Depreciation Costs $0

Total Annual Cost of Operations $559,446

Profit $58,726

Operating Ratio 90.5%

Total Operating Costs before Pass-Through Costs $618,173

Contractor Pass-Through Costs

Interest Expense $13,198

Total Contractor Pass-Through Costs $13,198

TOTAL BASE CONTRACTOR'S COMPENSATION $631,371

Note - Collection Vehicle Depreciation and Interest Expense are flat beginning in theof implementation. Purchase price will inflate until the purchase date.

Total Depreciation

Bulky Item Collection Costs

Direct Labor-Related Costs

Additional BIC Route

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RECOLOGY COLLECTION CONTRACT AMENDMENT ONE DISCUSSION

FINAL FINDINGS AND RECOMMENDATIONS REPORT (DRAFT)

610 Elm Street, Suite 202

San Carlos, CA 94070

Updated June19, 2019

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Page | 2 SBWMA Recology Amendment One Draft Report

Table of Contents 1. EXECUTIVE SUMMARY ......................................................................................................................... 3

2. BACKGROUND ...................................................................................................................................... 4

2.1 Goals of the Amendment One Franchise Agreement Discussions ..................................................... 5

2.2 Reason for Amendment One .............................................................................................................. 5

2.4 Amendment One Discussion Process.................................................................................................. 7

2.5 Negotiation Team Personnel .............................................................................................................. 7

2.6 Member Agency Survey ...................................................................................................................... 8

3. OPTIONS FOR BIC AND ABANDONED WASTE EXPANSION ................................................................. 9

4. ADDITIONS FOR MRP AND STORM WATER REQUIREMENTS ........................................................... 11

5. COST ....................................................................................................... Error! Bookmark not defined.

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1. EXECUTIVE SUMMARY

The South Bayside Waste Management Authority (SBWMA dba RethinkWaste) is close to completing a nine-month discussion period with Recology of San Mateo (Recology), to amend their newly negotiated hauling contract to include changes to the Bulky Item Collection (BIC), Illegal Dumping and Abandoned Waste, and Storm Water Regulations.

The BIC and Abandoned Waste Collection programs are very popular, which unfortunately means they are soon heading towards a capacity breaking point. Recology has already doubled the resources required in the Franchise Agreement based on the original program stats that they were asked to bid on, which were about 80 collections per day. At Board direction, Staff and the Franchise Agreement Extension Committee (FAX) negotiated with Recology’s senior management team to identify and shape cost-effective new program capacity options for Board consideration. Once approved at the SBWMA Board level, the recommended program options and their costs will need to be formally approved by a majority of the Member Agencies’ elected bodies as an amendment to the re-stated and amended Franchise Agreement that take effect on January 1, 2021.

Given an amendment is necessary for BIC and Abandoned Waste, it made the most sense to include any appropriate changes for the storm water regulations at the same time. These regulations began in 2009, with the Water Board including trash reduction requirements in the Municipal Regional Stormwater (MRP) National Pollutant Discharge Elimination System (NPDES) Permit for Phase I communities in the Bay Area. The San Mateo Countywide Water Pollution Prevention Program (SMCWPP) Litter Work Group is addressing trash load reduction requirements outlined in the MRP, by implementing a number of control measures designed to significantly reduce trash in local creeks and the Bay. They provided an outline of Best Practices and Recommendations for Litter Management with franchise language that was considered for Amendment One.

The following provides the recommendations to be included in Amendment One of the Recology Franchise Agreement, which have been agreed upon by the SBWMA and Recology, with feedback from the Member Agencies and FAX committee.

1. Add a Fourth BIC and Abandoned Waste Collection Route: In order to provide BIC andabandoned waste collection within the 10-business day timeframe of the Franchise Agreement, afourth route can be added to the BIC/Abandoned Waste Collection program to expand capacity.This would result in an increase of the service level cap of from 150 BICs to 200 BICs per day. Thefinancial impact would include an approximate cost of $631,371 for an additional annual route(covers one box truck and driver for recyclables, and one rear-loader and driver for other items).

2. Develop a Shoreway Voucher Program for Bulky Item Drop-Off: Recology will develop avoucher program that offers residents the ability to drop-off of BIC material at the ShorewayEnvironmental Center (Shoreway). Recology would offer vouchers to residents if a resident doesnot want to wait for the service date offered by Recology. The financial impact includes $125,000up-front costs for the bulky item voucher system and $233,000 for annual operating costs.

3. Addition of Solid Waste Collection on Saturday and Sunday: Add services to Schedule Q forSaturday and Sunday service. It will be provided at no additional charge for customers subscribing

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to a minimum of three (3) times per week service or at an additional fee for those businesses that have less than three days a week service (an additional service charge of $55.31 per month for Saturday and $67.37 per month for Sunday service).

4. Addition of Litter and Overage Assessment Program Evaluation – Recology currentlydocuments overages related to collection services. This addition will require Recology to provide amonthly report to the SBWMA. No additional cost.

5. Requirements for Overage Charges - Recology currently charges for overages beyond the twoallowed events. Recology is requesting that language be added to the amendment that states they“shall impose overage charges”, to allow Recology Customer Service the permission to give acourtesy waive of charges depending on the situation. No additional cost.

6. Requirements for Photographic Evidence of Overages – The SBWMA would like to have theoption for Recology to research on-board cameras for all collection vehicles, which will be used formonitoring overage activities. No additional cost unless SBWMA decides to move forward withcameras.

7. Add Definition of Overage – A definition of “overage” is necessary to provide direction forRecology when assessing a container. No additional cost.

2. BACKGROUND

In 2017, the SBWMA’s Ad Hoc Franchise Agreement Extension (FAX) Committee, staff, and consultants negotiated with Recology of San Mateo County (Recology) representatives to arrive at a mutually agreeable, Amended and Restated Model Franchise Agreement (Franchise Agreement) and cost for Collection Service. This model agreement was approved by the SBWMA Board of Directors during the September 28, 2017 Board of Directors’ meeting, with next steps for the SBMWA staff to assist each member agency to coordinate with Recology to finalize the contract language, specific scope of services and the pricing of additional services for their respective agency. To date, ten of the twelve member agencies are formerly in contract with Recology.

On May 24, 2018, the SBWMA Board approved Resolution 2018-20 to support Member Agency negotiations with Recology regarding Bulky Item Collection, Abandoned Waste Collection, and integrating Litter-Reduction Practices into Trash / Recycling Collection services as required by the Municipal Regional Permit (MRP) Stormwater Regulations. This action is known as “Amendment One”, and these services will be implemented with the restated and amended franchise agreement term of January 1, 2021 – December 31, 2035 or, by mutual agreement, sooner.

This section details the goals of the Recology negotiations and provides background and clarification regarding the plan and recommended process followed.

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2.1 Goals of the Amendment One Franchise Agreement Discussions

The primary objective for these discussions were to come to a solution on the three topic areas (bulky item collection, illegal dumping / abandoned waste, and MRP storm water requirements), and to incorporate those solutions and changes into the Franchise Agreement via Amendment One.

2.2 Reason for Amendment One

Bulky Item Collection and Abandoned Waste Collection

The Bulky Item Collection (BIC) and Abandoned Waste Collection programs are very popular, which unfortunately means they are soon heading towards a capacity breaking point. Recology has already doubled the resources required in our Franchise Agreement based on the original program stats that they were asked to bid on (at no additional charge), which were about 80 collections per day. At Board direction, Staff and the Franchise Agreement Extension Committee (FAX) negotiated with Recology’s senior management team to identify and shape cost-effective new program capacity options for Board consideration. Once approved at the SBWMA Board level, the recommended program options and their costs will need to be formally approved by a majority of the Member Agencies’ elected bodies as an amendment to the re-stated and amended Franchise Agreement that take effect on January 1, 2021.

Currently, Recology provides up to two BIC services annually without charge to each single-family residence and multi-family property (MFDs require advanced planning for delivery of roll-off containers for collection). This service is provided within 10 business days of the owner or occupant’s request, unless Recology’s BIC service capacity has been reached. Based on current Franchise Agreement parameters, Recology’s service capacity is limited to 150 bulky item collections system-wide per day. Recology currently makes approximately 130 to 140 bulky item collections per day so the program is operating at about 90% capacity Recology also collects abandoned waste with a cap of 30 pick-ups per day. Operationally speaking, these two services are one program; the same trucks and drivers/crews service both the BIC and abandoned waste collection. Each route consists of a box truck and driver for recyclables, and a rear-load truck and driver for the other items. There are currently three routes.

Recology manages the bulky item and abandoned waste collections for each Member Agency (MA), with the costs allocated among the MAs according to the number of single-family and commercial accounts in the community. For example, if a MA currently has 18% of the single-family accounts, then they will receive an allocation of 18% of the single-family BIC and abandoned waste program costs. If a MA has 10% of the commercial accounts, then they will receive 10% of the multi-family BIC and abandoned waste program cost allocation. Based on the previous eight years of actual program data, BIC usage happens to track directly with this allocation formula. However, the abandoned waste collection services represent about 17% of the total program usage/capacity and costs. Additionally, because abandoned waste is a small percentage of the total capacity and collection, the cost for the 17% is not allocated as noted above, but rather incorporated into the overall BIC collection costs. Figure 1 shows the Cost allocation for BIC services for 2015 in comparison to the allocation that is currently used each fiscal year according to the number of residents and commercial businesses per Member Agency. It is recommended to continue allocating costs in the same manner given how closely the BIC and residential percentages follow each other.

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Figure 1. Cost Allocation for BIC Services in 2015

Given that Recology is nearing its maximum service level capacity for the BIC and abandoned waste collection programs, the SBWMA and Recology have initiated discussion to develop a joint solution that allows customers to continue to receive BIC and abandoned waste collection services with new capacity in a timely fashion.

Municipal Regional Permit (MRP) and storm water requirements

In response to concerns about urban trash impacts on receiving water bodies in the San Francisco Bay area, in 2009 the Water Board included trash reduction requirements in the Municipal Regional Stormwater (MRP) National Pollutant Discharge Elimination System (NPDES) Permit for Phase I communities in the Bay area (Order R2-2009-0074.) These provisions require applicable Bay Area municipalities (Permittees) to reduce trash from their Municipal Separate Storm Sewer Systems (MS4s) by 40 percent before July 1, 2014, 70 percent by 2017, and to a point of “no adverse impacts” to water bodies by 2022. MRP 2.0 (Order R2-2015-0049), adopted on November 19, 2015, continues to require the reductions in trash.

The San Mateo Countywide Water Pollution Prevention Program (SMCWPP) was established in 1990 to reduce the pollution carried by stormwater into local creeks, the San Francisco Bay, and the Pacific Ocean. The program is a partnership of the City/County Association of Governments (C/CAG), each incorporated city and town in the county, and the County of San Mateo, which share a common municipal stormwater NPDES permit. The SMCWPPP Litter Work Group is addressing trash load reduction requirements outlined in the MRP, by implementing a number of control measures designed to significantly reduce trash in local

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10.0%

15.0%

20.0%

25.0%


Member Agency BIC Total by Percentage Residential Allocation Total by Percentage

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creeks and the Bay. They provided an outline of Best Practices and Recommendations for Litter Management with franchise language that can be added to Amendment One of the Recology Franchise Agreement. The implementation of these litter reduction practices can assist the SBWMA with achieving compliance with trash/litter load reduction regulations in the Municipal Regional Stormwater Permit. Given an amendment is necessary for BIC and Abandoned Waste, it made the most sense to include any appropriate changes for the storm water regulations at the same time.

2.4 Amendment One Discussion Process

Following the SBWMA Board approval of Resolution 2018-20 to support Member Agency negotiations with Recology regarding Bulky Item Collection, Abandoned Waste Collection, and integrating Litter-Reduction Practices into Trash / Recycling Collection, the San Mateo County Technical Advisory Committee held a workshop on August 12, 2017 to discuss. It was acknowledged during this meeting that more formal discussions should be held to consider how to manage the BIC and Abandoned Waste services in order to amend the overflow, and identify how the cost impact will be reflected. In order to complete negotiations for Amendment One, three meetings were held between Recology and the negotiation team to discuss options that will support increasing bulky item and abandoned waste collection, and one meeting with the FAX committee to discuss options and make final recommendations. Those four meetings include:

• August 15, 2018 – kick off meeting• August 29, 2018 – discussions• October 11, 2018 – finalize discussions• November 29, 2018 – meeting with the FAX committee

Additional meetings and conference calls were held between HFH Consultants and Recology to complete the cost application for the final options. Recology and SBWMA legal council held additional meetings to finalize language for Amendment One.

By invitation, Mr. La Mariana presented the proposed SBWMA Amendment One recommendations regarding litter-reduction practices a regional SMCWPPP meeting on February 4, 2019 , heir associated costs, and to confirm the definition of what “overage” means when looking at the trash, recycling and organics containers. There was a general understanding of the agency’s and Recology’s proposed recommendations.

2.5 Negotiation Team Personnel

The SBWMA staff utilized the same Negotiations Team that led the negotiations of the Restated and Amended Franchise Agreement negotiation process in 2017. This team was re-established to discuss and make recommendations for Amendment One negotiations, which was taken to the FAX committee for review and input. These members are summarized in Table 1.

S B W M A N e g o t i a t i o n T e a m M e m b e r s

SBWMA Negotiation Team Members Title Personnel

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SBWMA, Executive Director Joe La Mariana SBWMA, Sr. Facilities & Major Contracts Mgr. Hilary Gans

Team Administrative Support Cyndi Urman, SBWMA

Tracie Bills, SCS Engineers

Solid Waste Industry Financial Consultants, Lead Negotiators

Rob Hilton Tracy Swanborn Marva Sheehan

(HFH Consultants) SBWMA Attorney Jean Savaree, ADLC

At Board direction, the same Franchise Agreement Extension (FAX) Ad Hoc Committee was re-established to assist with Amendment One negotiations. This FAX Committee consists of five members and can be seen in Table 2.

F A X C o m m i t t e e T e a m M e m b e r s

FAX Committee Team Members Title Personnel

City of Belmont, Public Works Director, TAC Chair Afshin Oskoui City of East Palo Alto, Finance Director Brenda Olwin City of Redwood City, City Manager, FAX Vice Chair Melissa Stevenson Diaz City of San Mateo, City Manager Larry Patterson County of San Mateo, Public Works Director, FAX Chair Jim Porter

The Recology Team consists of six members, and can be seen in Table 3.

R e c o l o g y T e a m M e m b e r s

Recology Sr. Management Team Members Title Personnel

General Manager, San Mateo County Division Mike Kelly Controller, San Mateo/South Bay Region Carl Mennie Administrative Services Manager, San Mateo Division Tammy Del Bene Public Affairs Manager, San Mateo Division Gino Gasparini Customer Service Manager, San Mateo Division Jeanette Haskell Operations Manager, San Mateo Division Anthony Crescenti

2.6 Member Agency Survey

There were six options for Bulky Item Collection (BIC) and Abandoned Waste Collection developed during the discussions with Recology, which provided the necessary framework to begin analysis for initial

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recommendations. To assist with this process, a survey was developed to seek input from Board Members and the Technical Advisory Committee on how they felt about the six options. Feedback from the survey was valuable and provided critical insight and direction to SBWMA staff and its team to help guide the process.

The survey was sent to TAC members on Wednesday, October 3 and finalized on Wednesday, October 10, 2018, with responses from all twelve member agencies. Of the twelve Member Agencies, three responded twice, therefore there were 15 total responses for each question in the survey. The survey results are summarized in Attachment A.

3. OPTIONS FOR BIC AND ABANDONED WASTE EXPANSION

Feedback from the Member Agency survey assisted in the second phase of discussions with the FAX committee. The six options for Bulky Item Collection (BIC) and Abandoned Waste collection that is outlined in the survey, including the results from the November 2018 FAX meeting, are highlighted below.

Option 1: Extend Scheduling Timeframe for BIC and Abandoned Waste Service One Additional Week

This option would keep the current service level cap for BIC (150 per day) and Abandoned Waste (30 per day). When the service level cap has been met, this option would allow Recology to schedule BIC and abandoned waste collections beyond the current 10-business day requirement to a 15-business day period following customer request. There is no financial impact. However, the level of responsiveness to customers’ needs may be reduced when they are not able to receive services for a few weeks depending on the BIC and abandoned waste activity. Extending the collection out an additional week could potentially increase the abandoned waste generated and add to the number of total collections. Benefits of this option may include no increase in costs. This option may delay a fourth BIC route for some time, but it is anticipated that an additional route may still be necessary (Option 2).

The survey responses were split with seven responders interested and eight not interested in this option. However, the discussion during the FAX Committee was unanimous that the potential delay in service would not provide the customer service desired. Recommendation: Do not consider as an alternative.

Option 2: Add BIC and Abandoned Waste Collection Route

In order to provide BIC and abandoned waste collection within the 10-business day timeframe of the Franchise Agreement, a fourth route can be added to the BIC/Abandoned Waste Collection program to expand capacity. This would result in an increase of the service level cap from 150 BICs to 210 BICs per day. The financial impact would include an approximate annual cost of $630,000 in rate year 2021 for an additional route (covers one box truck and driver for recyclables, and one rear-loader and driver for other items). Each additional route would provide capacity for sixty (60) additional daily Bulky Item Collection services. Benefits of this program option may include increased reuse of bulky items and increased convenience for your residents. This option may still be necessary, even if the SBWMA implements one or more of the other program options. For more details on the costs, see Attachment B.

The survey responses were split with seven responders interested and eight responders not interested in this option. However, the discussion during the FAX Committee was unanimous that there may be a time when

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it is necessary, even with adding Option 3. Recommendation: Add language in Amendment One that would provide flexibility should a fourth route be required.

Option 3: Shoreway Voucher Program for Bulky Item Drop-Off

This option would allow Recology to provide vouchers to residents for drop-off of BIC material at the Shoreway Environmental Center (Shoreway). Recology would offer vouchers to residents if a resident does not want to wait for the service date offered by Recology (this would occur when the 150 BIC service level cap is met and Recology is unable to deliver within the 10-business day requirement). Recology will implement a voucher tracking system that will ensure a voucher is only used once and may include an expiration date on the voucher. The financial impact includes $125,000 up-front costs for the voucher system and $233,000 for annual operating costs (based on 2018 cost estimates). Benefits of this option may include increased use of bulky item collection and increased convenience for residents. It is believed that a fourth BIC route would still be necessary (Option 2), even with this bulky item voucher program; although, the voucher program may extend timeframe in which the fourth route is needed. For more details on the costs and how the voucher program would work, see Attachment C.

The survey revealed a majority of the responders (thirteen) were interested and two were not interested in this option. The FAX Committee was unanimously in support of a bulky item voucher program. Recommendation: Add language in Amendment One that would provide a pre-negotiated cost for this service to provide flexibility if the program is successful and more collection is necessary. There would be a trigger in the amendment for capacity numbers subject to SBWMA Board Approval. A pilot is also recommended to test the voucher system and distribution protocol, to confirm the process works properly before utilizing within the rest of the SBWMA area. However, the cost would be the same as an agency-wide implementation due to the initial infrastructure cost.

Option 4: Corporation Yard Bulky Item Drop-Off Program

Some MA’s have space to locate roll-off container(s) for a bulky item drop off program at their Corporation Yards. The idea would be to have residents drop off bulky items at the Corporation Yard, which may alleviate abandoned waste and reduce the demand for Recology’s on-call BICs. In addition, or as an alternative to residential drop-off of bulky items, MA crews could pick up abandoned waste and deposit it in the roll-off containers in their Corporation Yards. Any MA can readily implement this option, since Schedule Q in the Recology Franchise Agreement is already set up with fee options to collect roll-off containers at MA Corporation Yards. Benefits of this program option include a potential reduction in demand for Recology’s BIC and abandoned waste collection, which might delay the need for the fourth BIC/abandoned waste route; reduce your MA’s allocation of BIC/abandoned waste costs (depending on the future allocation method); increase convenience for your residents; and facilitate MA’s quick response to abandoned waste.

The survey revealed a majority of the responders (twelve) were not interested and three were interested in this option. The discussion during the FAX Committee was unanimous that they did not believe this was a viable option, however if the MA’s want to add this option into their Schedule Q in the Franchise Agreement then can do so at any time. Recommendation: Interested member agencies can already consider securing these services with Recology through Attachment Q, Do not consider as an alternative.

Option 5: Public Education to Promote Alternative Bulky Item Handling Option

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This option anticipates providing education to residents that promotes strategies for handling bulky items other than Recology’s on-call BIC program. The education materials could promote alternatives such as reuse of bulky items through sharing apps (e.g., Facebook, NextDoor, etc.); existing community drop-off events where there is a Goodwill on-site; and other bulky item collection services such as Got Junk. While other collection services may not be free to residents, these collectors can provide immediate service for those residents that have used their two free Recology BIC services or do not want to wait until the service day offered by Recology. Benefits of this program option may include increased reuse of bulky items and increased convenience for your residents. It is believed that a fourth BIC route would still be necessary (Option 2), even with this education program.

The survey responses showed a majority of the responders (thirteen) were interested and two were not interested in this option. The discussion during the FAX Committee was unanimous that this option is not necessary to add to the amendment because Recology is willing to begin immediately including these strategies into the annual outreach plan coordinated with the SBWMA. Recommendation: Not necessary to add to Amendment One.

Option 6: Expand Bulky Item Collection Program to Include Reuse

This option envisions expanding the BIC program to include a focus on collecting reusable bulky items. It anticipates engaging with a non-profit organization that would provide a truck and crew that collects the reusable items from residents in front of Recology’s BIC route on the day of BIC collection. The benefits of this option include reducing the amount of bulky items collected by Recology, which may expand the capacity of the BIC routes; and increase the amount of material reused. It is uncertain if this option would delay the need for the fourth BIC route (Option 2).

The survey responses showed a majority of the responders (fourteen) were interested and one was not interested in this option. The discussion during the FAX Committee was unanimous that this option is not viable due to the difficulty of managing the reuse aspect by a third party when the BIC program is an on-call basis. Recommendation: Do not consider as an alternative.

4. ADDITIONS FOR MRP AND STORM WATER REQUIREMENTS

SMCWPPP member agencies are addressing trash load reduction requirements outlined in the MRP by implementing a number of control measures designed to significantly reduce trash in local creeks and the Bay. The SMCWPPP Litter Work Group has produced a document that outlines Best Practices and Recommendations for Litter Management, which focuses on control measures related to the storage, collection and transportation of municipal solid waste, recyclable and compostable materials, and the franchise agreements that haulers and agencies have established to govern those services.

The recommendations outlined by the Litter Working Group to be considered for inclusion in the Recology Franchise Agreement are placed in groups by seven topic areas (e.g. collections, right size / right-service, outreach and public education, training of franchisee staff, Franchise Fees Providing Funding for Litter Control Programs, Financial Incentives and Disincentives, Liquidated Damages). These recommendations can be found in Attachment D, and the summary with actions are highlighted below.

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1. Solid waste collection on Saturday and Sunday – Recommendation to add language to ScheduleQ for Saturday and Sunday service. Currently, Saturday and Sunday collection is provided at noadditional charge for customers subscribing to a minimum of three (3) times per week service or atan additional fee for those businesses that have less than three days a week service (an additionalservice charge of $55.31 per month for Saturday and $67.37 per month for Sunday service).Recommendation: Language should be added to Amendment One.

2. Litter and Overage Assessment Program Evaluation – Recology currently documents overagesrelated to collection services, they will provide a monthly report to the SBWMA and/or member agencystaff. However, Recology drivers are not trained in litter assessment auditing nor is that their job,therefore, Recology does not want to add a formal audit process to the amendment. Recology willcontinue to report any overages that occur (as has been done), but will not be actively seeking orauditing while on their routeRecommendation: Language should be added to Amendment One.

3. Annual Route Assessments – Recology would document assessments on a monthly basis as notedin #7.

4. Litter Management Plan - Per Section 8.02G of the Recology Franchise Agreement, there is aprogram for addressing litter issues associated with collection services.Recommendation: No need to add language to Amendment One because it already exists.

5. Requirements for Overage Charges - Recology currently charges for overages beyond the twoallowed events. Recology is requesting that language be added to the amendment that states they“shall impose overage charges”, to allow Recology Customer Service the permission to give acourtesy waive of charges depending on the situation. If there are frequent offenders, this waiverwould not be exercised. Additionally, “Overage” is defined as anything that causes the lid to be open(zero tolerance), this definition should be added to the amendment.Recommendation: Language should be added to Amendment One.

6. Requirements for Photographic Evidence of Overages – Providing all collection vehicles withcameras to monitor driving and loading activities will assist with the monitoring of overage activities.According to Recology, there would be significant capital, labor and maintenance costs to install,utilize, store and administer photographic or video capabilities. Recology recommends use of themonthly reports of customer overages and have Member Agencies dispatch their personnel to takephotos of chronically overloaded customers for further action. The SBWMA would like to have theoption to explore onboard cameras in the future.Recommendation: Language should be added to Amendment One to allow Recology toexplore options for adding on-board cameras to their trucks.

7. Reporting Requirements for Overage Data – Recology would report the addresses of customerswith overages on a monthly basis as noted in #2.Recommendation: No need to add language to Amendment One, it is already done.

8. Definition of Overage – Further discussion to revise the definition of “overage” is necessary,however.

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Recommendation: Language should be added to Amendment One.

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Attachment A Survey Responses

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Attachment B Residential On-Call Bulky Item Collection and Abandoned Waste

Collection Service Route Cost Estimate (Attachment U in FA Amendment)

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Attachment C Voucher Program Cost Estimates (Attachment T in FA Amendment)

RECOLOGY SAN MATEO COUNTYVoucher ProgramEstimated Costs in 2018 Dollars

5-YEAR PERIOD

Up Front 5 Year Life HF&HItems Company/Individual Total Cost Annual Cost

Hardware - Scanner, Scanner Software & Tablet SBR 2,000.00$ 400.00$ Hardware - Scale House Installation SBR 1,400.00$ 280.00$

Coding - IT Team Recology 63,000.00$ 12,600.00$ Coding - PC Scales PC Scales 28,000.00$ 5,600.00$ Coding - Computaris Computaris 17,528.83$ 3,505.77$

Project Development Cost Recology 8,690.77$ 1,738.15$

SBR Accounting Modifications SBR 4,567.00$ 913.40$

Total 125,186.60$ 25,037.32$ 25,037.32$

Annual Operating - Assuming 15,600 Vouchers per YearItems Company/Individual

Computaris Operation Fee Computaris 28,046.16$ 28,046.16$

Hardware - Replacement Recology 1,500.00$ 1,500.00$ Hardware - IT OPS Technical Services Recology 8,400.00$ 8,400.00$ PC Scales Maintenance SBR 6,000.00$ 6,000.00$

CSR Hours Recology 154,608.75$ 123,687.00$

Printing Recology 1,872.00$ 1,497.60$ Mailing Recology 7,800.00$ 6,240.00$

Total 208,226.91$ 208,226.91$ 175,370.76$

TOTAL PROGRAM COST 233,264.23$ 200,408.08$

Operating Ratio (90.5%) 24,486.30$ 21,037.31$

Total Compensation 257,750.53$ 221,445.39$

Additional Anlysis of Program Cost for BIC Vouchers + Pilot Programs

Fixed Cost 76,224.84$

Variable Cost per Voucher 11.64$ 9.31$

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Voucher Program Description Background Recology researched different technologies to assist with a voucher system as an alternative to Bulky Item Collection (BIC). This option would allow Recology to provide vouchers to residents for drop-off of BIC material at the Shoreway Environmental Center (Shoreway). Recology would offer vouchers to residents if a resident does not want to wait for the service date offered by Recology (this would occur when the 150 BIC service level cap is met and Recology is unable to deliver within the 10-business day requirement). Recology will implement a voucher tracking system that will ensure a voucher is only used once and may include an expiration date on the voucher.

Quick Response (QR) code has advantages over a barcode because:

• Two-dimensional – carry both horizontal and vertical data unlike barcodes that only carry data inone direction.

• Large information-holding capacity in a smaller space – can carry up to 100x the amount ofinformation of a conventional barcode in 10x smaller space.

• All-direction (360 degree) high-speed reading – size, angle, and outer shape are easily detectable,making it 20x faster to decode than other matrix codes.

• Resistant to distorted symbols – eliminates interference and negative effects from backgrounds.• Data restoration functionality using error correction margins (approx. 7-30%) – eases scanning if

code is dirty/damaged.• Easy encryption for confidentiality – relationship between the character type and the stored data is

unique for specific use.

TECHNOLOGY RESEARCHED Recology research two companies that provide this technology: VMS and Computaris.

VMS VMS is a J2EE web-based application that manages the interaction with all voucher vendors, the printing house, the dealers, and any other external applications (such as customer relationship management) that need to use vouchers or to query the status of vouchers. It allows operators to manage in a web interface the voucher lifecycle, dealer catalogue, fraud catalogues, track voucher status, and allocate vouchers to dealers. It also manages the catalogue of tenants, recharges profiles and printing houses, and generates pins to enable security for encrypted data. The solution also comes with built-in reports on voucher definitions and usage by type.

Computaris The Computaris Voucher Management System (VMS) is a software tool that allows operators to manage the end-to-end lifecycle of prepaid recharge vouchers in either physical or virtual form. They were founded in the UK, but have a U.S.-based office in El Dorado Hills, California. They specialize in offering custom-built services with focus on optimized resource management, CRM and trucking applications, vendor-managed inventory models, customized fleet management, database and data warehousing, quality assurance and testing, integration with ERP and financial systems, documented management systems, 3rd party logistics, shipping logistics, and logistics management for air, sea and land.

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Attachment D SMCWPP Litter Work Group Best Practices and Recommendations for

Litter Management

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Attachment ATable 1: BIC Usage Compar

BIC Usage Compared to Residential Allocation TotalsMember Agency 2015 Daily

Events2016 Daily

Events 2015 Total

Events 2016 Total

Events

Atherton 1.91 2.10 497 546 Belmont 9.41 10.08 2,446 2,621 Burlingame 9.10 9.71 2,365 2,525 East Palo Alto 5.38 5.68 1,398 1,476 Foster City 8.15 9.12 2,119 2,370 Hillsborough 4.20 4.54 1,092 1,181 Menlo Park 8.57 9.19 2,228 2,389 North Fair Oaks 2.76 3.22 718 837 Redwood City 21.76 22.81 5,657 5,931 San Carlos 10.80 11.79 2,807 3,065 San Mateo 28.35 31.15 7,372 8,099 San Mateo County 5.77 6.48 1,501 1,686 West Bay Sanitary District 2.55 2.54 663 661

Total SBWMA 118.70 128.41 30,863 33,387

Table 2. Member Agency Member

Agency BIC Total by Percentage

Residential Allocation Total by Percentage

Atherton 1.6% 2.5%Belmont 7.9% 7.2%Burlingame 7.7% 7.0%East Palo Alto 4.5% 4.5%Foster City 6.9% 7.1%Hillsborough 3.5% 3.9%Menlo Park 7.2% 8.3%North Fair Oaks 2.3% 2.8%Redwood City 18.3% 18.4%San Carlos 9.1% 9.1%San Mateo 23.9% 21.7%San Mateo County 4.9% 5.4%West Bay Sanitary District 2.1% 2.3%

Total SBWMA 100% 100%

_________________________________________________ SBWMA BOD PACKET 06/27/2019

____________________________________________________ __________________________________________________________ AGENDA ITEM: 6A ATTACHMENT C - p1


Atherton Belmont Burlin

me

Residential Allocation Total by Percentage 2.5% 7.2% 7.0%

Member Agency BIC Total by Percentage 1.6% 7.9% 7.7%

BIC Usage Compare

1.6% 7.9% 7.7% 4.5% 6.9% 3.5%2.5%

7.2%7.0%

4.5%

7.1%

3.9%

BIC Usage Compared

Member Agency BIC Total by Percent

_________________________________________________ SBWMA BOD PACKET 06/27/2019



Atherton Belmont Burlingame East PaloAlto

Foster City Hillsborough Menlo Park

BIC Usage Compared to Resi

Member Agency BIC Total by Percentage

_________________________________________________ SBWMA BOD PACKET 06/27/2019



red to Residential Allocation Totals


House Count 07.25.17


1.6% 2344 2.5%7.9% 6778 7.2%7.7% 6617 7.0%4.5% 4210 4.5%6.9% 6753 7.1%3.5% 3681 3.9%7.2% 7805 8.3%2.3% 2621 2.8%

18.3% 17392 18.4%9.1% 8604 9.1%

23.9% 20509 21.7%4.9% 5088 5.4%2.1% 2193 2.3%

100.0% 94595 100.0%

Graph 1.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Atherton

Belmont

Burlingame

East Palo Alto

Foster City

Hillsborough

Menlo Park

North Fair Oaks

Redwood City

San Carlos

San Mateo

San Mateo County

West Bay Sanitary District




_________________________________________________ SBWMA BOD PACKET 06/27/2019



ngae

EastPaloAlto

FosterCity

Hillsborough

MenloPark

NorthFair

Oaks

Redwood City

SanCarlos

SanMateo

SanMateoCounty

WestBay

SanitaryDistrict

% 4.5% 7.1% 3.9% 8.3% 2.8% 18.4% 9.1% 21.7% 5.4% 2.3%

% 4.5% 6.9% 3.5% 7.2% 2.3% 18.3% 9.1% 23.9% 4.9% 2.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

ed to Residential Allocation Totals

7.2% 2.3% 18.3% 9.1% 23.9% 4.9% 2.1%

8.3%

2.8%

18.4%

9.1%

21.7%

5.4%

2.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

d to Residential Allocation Totals

tage Residential Allocation Total by Percentage

_________________________________________________ SBWMA BOD PACKET 06/27/2019



0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

North FairOaks

RedwoodCity

San Carlos San Mateo San MateoCounty

West BaySanitaryDistrict

idential Allocation Totals


_________________________________________________ SBWMA BOD PACKET 06/27/2019




7

SHOREWAY OPERATIONS AND

CONTRACT MANAGEMENT

Agenda Item 7




7A

STAFF REPORT To: SBWMA Board Members From: Hilary Gans, Senior Contracts & Operations Manager Date: June 27, 2019 Board of Directors Meeting Subject: Approving a Contract with BHS, Inc. to 1. replace and install optical sorter hardware and

software and 2. replace existing sort system electrical controls and software for a not-to-exceed amount of $770,500

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-44 attached hereto authorizing the following action: Approving a Contract with BHS, Inc. to 1. replace and install optical sorter hardware and software and 2. replace existing sort system electrical controls and software for a not-to- exceed amount of $770,500. Summary The original MRF sort system was installed by Bulky Handling Systems, Inc. (BHS, Inc.) in 2009. The MRF sort system includes electronic controls that are now obsolete and must be replaced to accommodate upcoming new system operating software and to upgrades the existing system for the planned MRF sort system capital improvements project to be funded by new bond proceeds.

Analysis The scope of work being considered in this contract with BHS, Inc. is for the following:

1. New MRF Motor Controls System ($531,000). The +100 motors that operate the MRF sorting systemare controlled though electrical hardware (motor controllers/variable frequency drives) that are nowobsolete and must be replaced because they have reached their end-of-life and are no longer supportedby the manufacturer. Additionally, replacing the motor controls is a necessary step to installing new BHS,Inc. operating system software that will be compliant with future MRF sort system upgrades. BHS, Inc.proposed a scope of services and cost of $531,000 as detailed in the Agreement in Attachment A.

2. Exiting Optical Hardware & Software Upgrade ($239,500). The MRF uses high-speed optical sorters toseparate plastic containers by resin type. The optical sorters are ~9-year old and the computer systemsthat run material identification software are obsolete and cannot receive software updates provided byBHS, Inc.. Upgrading the four existing optical sorter units will make them compatible with the plannedMRF upgrades to the sort system. BHS proposed scope of services and cost of $239,500 is detailed inthe Agreement in Attachment A.

BHS, Inc. will perform the proposed equipment installation and system-testing work during off-operating hours and no down-time or additional operating expense will result from this work.



BHS Inc. is the original equipment manufacturer for the Shoreway MRF’s sorting equipment and BHS, Inc. is the only company that can perform the proposed upgrade services. BHS, Inc. is the only contractor capable of creating and installing the type of control system/software that is compatible with the proprietary BHS, Inc. hardware and software already installed. Other vendors’ products and services would not be compatible with that of the BHS, Inc. equipment used now and planned for the MRF upgrade project. For this reason, staff is recommending that the Board award this contract on a sole source basis rather than putting it out for bid.

Background The MRF sort system was designed by BHS, Inc in 2009 and installed in 2010. The electronics that control the MRF sort system have advanced and the existing motor controllers/VFDs are no longer manufactured by BHS, Inc.’s electronics sub-manufacturer, Allen Bradley, or is currently supported. The computer/electronic hardware that run the existing optical sorters are no longer supported by BHS, Inc. and there is no ability to update software without replacing the computer hardware.

In February the Board has discussed a CIP project that includes planned MRF Upgrades that will add optical sorters for paper that will require standardization of electronics, controls and software which will be accomplished by this contract for existing optical hardware replacement

Fiscal Impact The cost of the work to be performed by BHS, Inc. is $770,500. There will be no impact on the Agency’s operating budget because the funds for this project will, if approved, be withdrawn from the SBWMA’s existing MRF Equipment Replacement Reserve. This reserve was established ten years ago with the express purpose of covering replacement of worn and obsolete sort system equipment. The current SBWMA’s MRF Equipment Replacement Reserve balance is $1,397,851. After this project is competed the Reserve balance will be $627,351.

Attachments: Resolution 2019-44 Attachment A – Public Project Agreement for MRF Sort System Controls and Optical Hardware & Software Replacement – Available online only at www.rethinkwaste.org


https://www.rethinkwaste.org/uploads/media_items/062719-7-a-attach-a.original.pdf




MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING A CONTRACT WITH BHS, INC. TO 1. REPLACE AND INSTALL OPTICAL SORTER HARDWARE AND SOFTWARE AND 2. REPLACE EXISTING SORT SYSTEM ELECTRICAL CONTROLS

AND SOFTWARE FOR A NOT-TO-EXCEED AMOUNT OF $770,500

WHEREAS, the Existing MRF sort System was installed approximately 9-years ago and many existing electronic controls and software elements are obsolete,

WHEREAS, BHS, Inc. is the Original Equipment Manufacturer (OEM) that provides support and ongoing system upgrades to software and hardware,

WHEREAS, BHS, Inc. uses proprietary software and components, which allows only BHS, Inc. to replace the existing SBWMA optical sort unit hardware and software, and controls of the sort system; and

WHEREAS, the SBWMA needs the services proposed by BHS, Inc. to upgrade the optical sorter electronics and replace the sort system controls so that the system can continue to receive software upgrades, to increase the lifetime of the system, and to extend the capability of the sorting system.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approving a Contract with BHS, Inc. to replace and install optical sorter hardware and software and replace existing sort system electrical controls and software for a not to exceed amount of $770,500.



____________________________________ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA

_________________________________ Cyndi Urman, Clerk of the Board





7B

STAFF REPORT To: SBWMA Board Members From: Hilary Gans, Senior Contracts and Operations Manger Date: June 27, 2019 Board of Directors Meeting Subject: Resolution Authorizing the Executive Director to Enter into a Contract with Bulk Handling

Systems, Inc. for the Design & Engineering of Phase I MRF Upgrades Project for a Not-to-Exceed Contract for $717,950 Contingent Upon the Executive Director’s Determination that Bulk Handling Systems, Inc. is Currently Capable of Meeting the Budget, Timing, and Fulfillment Expectations of the Agency

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-45 attached hereto authorizing the following action: Authorizing the Executive Director to Enter into a Contract with Bulk Handling Systems, Inc. for the Design & Engineering of Phase I MRF Upgrades Project for a Not-to-Exceed Contract for $717,950 Contingent Upon the Executive Director’s Determination that Bulk Handling Systems, Inc. is Currently Capable of Meeting the Budget, Timing, and Fulfillment Expectations of the Agency Summary Staff and SBR have worked with Bulk Handling Systems, Inc. (BHS) in a year-long design process to upgrade the MRF sort system. The Agency has approved the issuance of Bonds (funding anticipated in mid-July) to fund the MRF Upgrades projects. Staff is seeking approval of a Design & Engineering contract with BHS for the MRF Phase I Upgrades. Following completion of the BHS Design & Engineering deliverables, staff will bring forward a contract for construction and installation of MRF Phase I Upgrades (the contracts for both contracts will be signed after Bond funds have been received by the Agency). The MRF Upgrades projects will improve the sorting efficiency, recovery, and marketability of the ~80,000 tons per year of recyclable materials processed at the Shoreway MRF.

Analysis The goal of the MRF Upgrades Phase I project is to improve the sorting efficiency, commodity quality, and recovery of the MRF to better position the Agency to manage the current commodity crisis and upcoming facility operations decision points. After a year of analysis and conceptual design, staff has presented a plan to upgrade the MRF- projects will be completed in two phases. The Finance Committee, the Zero Waste Committee, the TAC and Board have reviewed designs and proforma details of the MRF upgrades projects and the agency is in the process of raising Bond funds to pay for these projects.

The attached Design & Engineering contract with BHS represents the initiation of the Phase I of the MRF Upgrades projects. The scope of work includes creation of six (6)Computer-Aided Design (CAD) electronic files (one per each of the five Phase I sub-package projects, and one for the overall system), with five (5)-PDF drawings for each of those CAD files to cover the full structural design and other elements (See details described in Exhibit A Scope of Work within the Professional Services Agreement for the Engineering & Design work provided in Attachment A).


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM:7B - p2

The Design & Engineering process will result in a complete set of buildable drawings that BHS will use to manufacture and install the Phase I Upgrade equipment components. The drawings will also be submitted to the City of San Carlos Building Department as part of the Permit approval process. The detailed Design & Engineering process is anticipated to take 12-16 weeks. Towards the end of the Design & Engineering process, staff will bring a request to the Board for approval of a contract for the Manufacturing and Installation of the MRF Phase I Upgrades (this is currently quoted by BHS at a cost of $7,179,500 but is subject to change based on any alterations in the current scope that might come out of the final Design & Engineering stage). The cost of the Design & Engineering services proposed under the attached Professional Services Agreement is $717,950, which represents 10% of the total estimated system based on a 10% of the projects cost which is industry standard-figure for Architectural projects and will be paid upfront for design). The $717,950 contract maximum price will be paid 90% upfront upon signing, with 10% withheld until the SBWMA’s Sr. Operations and Contracts Manager deems the electronic-accessible drawings and services received sufficient and complete.

Since the Design & Engineering contract represents a large commitment by the Agency to use BHS for the Manufacturing & Installation stage of Phase I Upgrades, staff feels it is prudent to conduct a Performance Review of BHS’s recent installations. Staff has hired a consultant (Sloan/Vasquez) that specializes in MRF installation and has overseen the recent installation of BHS equipment at other MRFs. If the Board approves this resolution, Staff will complete a Performance Review, and assuming a satisfactory outcome, the Executive Director will execute the Design and Engineering contract with BHS - otherwise, Staff will come back to the Board in September with the results of the Performance Review and a recommended alternative course of action.

BHS is the original equipment manufacturer (OEM) as well as original Engineering and Design contractor for the MRF. Therefore, other vendors’ products and services would not be compatible with that of the proprietary BHS hardware and software already installed and used now that will be built upon for MRF upgrades projects. For this reason, staff is recommending that the Board award this contract on a sole source basis to BHS

Background In response to the commodity market crash and new commodity standards implemented by China in March of 2018, Staff has worked with SBR to develop options for improving the quality of recyclables commodities marketed from the Shoreway MRF. While operational changes were implemented (e.g., slowing down the MRF sorting equipment, adding sorters, and tweaking the existing equipment), these changes have proven insufficient to meet the new market standards. Working with BHS (the sort system OEM), a group of MRF upgrade projects were conceptually designed that would improve the sorting efficiency, recovery, and marketability of the ~80,000 tons per year of recyclable materials processed at the Shoreway MRF. Bond funds are currently being raised for the MRF CIP projects listed below:

MRF Phase I Upgrades Project: - New commercial infeed metering bin- Small fraction separation and optical sort system- Robotic recovery (Max-AI) applied to MRF residue- AI composition sensors installed on fiber- Battery removal and glass clean up system

MRF Phase II Upgrades Project: - New optical sort systems for fiber sorting.



The MRF CIP projects have been described in presentations and staff reports provided to the TAC, the Finance Committee, the Zero Waste Committee, and the BOD on the below listed dates:

- March 8, 2018: projects to reduce organics and recycling to landfill (Zero Landfill Committee) - June 28, 2018: Preliminary analysis of MRF sort system enhancements - October 25, 2018: Shoreway capital improvement plan (TAC) - January 27, 2019: CIP project review and planning (Finance Committee) - February 12, 2019: MRF Phase I & Phase I project financial review (Finance Committee)- March 28, 2019: Discussion about CIP projects to reduce disposal (Zero Landfill Committee) - January 24, 2019: Discussion of capital improvement projects and planning - February 10, 2019: Presentation on MRF Upgrades project

Fiscal Impact The $717,950 BHS Engineering & Design contract will be funded from the Bond refunding process that has been approved by the Member Agencies and the Board of Directors.


Attachment A – BHS Design & Engineering Professional Services Agreement – Available online only at www.rethinkwaste.org


https://www.rethinkwaste.org/uploads/media_items/062719-7-b-attach-a.original.pdf






MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO A CONTRACT WITH BULK HANDLING SYSTEMS, INC. FOR THE DESIGN & ENGINEERING OF PHASE I

MRF UPGRADES PROJECT FOR A NOT-TO-EXCEED CONTRACT FOR $717,950 CONTINGENT UPON THE EXECUTIVE DIRECTOR’S DETERMINATION THAT BULK HANDLING SYSTEMS, INC. IS CURRENTLY CAPABLE OF MEETING THE BUDGET,

TIMING, AND FULFILLMENT EXPECTATIONS OF THE AGENCY

WHEREAS, the SBWMA is interested in upgrading the MRF to more effectively sort recyclables to meet new commodity market conditions;

WHEREAS, the Board has reviewed a list of proposed CIP projects included in the MRF Phase I Upgrade project and has approved a Bond refunding process to raise funds specifically to fund these projects;

WHEREAS, Bulk Handling Systems, Inc. (“BHS”) has proposed to perform the MRF Phase I Upgrades at an estimated price of $7,179,500 and first proposes to conduct design and engineering work for the improvements in an amount equal to ten percent (10%) of the estimated project budget, or $717,950; and

WHEREAS, BHS is the original manufacturer of the MRF and is solely capable of providing the Engineering & Design services for the Phase I Upgrades Project;

WHEREAS, the Executive Director shall perform a survey of BHS’s recent MRF upgrade projects and evaluate BHS’ current ability to deliver the Phase I Upgrades Project prior to engaging BHS for the design and engineering services related to the Project; and

WHEREAS, the Board desires to move forward with the design and engineering phase of the Phase I MRF Upgrades Project pending the completion of the Executive Director’s evaluation and determination that BHS can meet the SBWMA’s budget, timing, and fulfillment expectations.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority Board of Directors hereby authorizes the Executive Director to enter into the attached Professional Services Agreement with BHS for design and engineering of Phase I of the MRF Upgrades Project in an amount not to exceed $717,950, contingent on the Executive Director conducting an evaluation and determining that BHS is currently able to meet the budget, timing, and fulfillment expectations of the Phase I MRF Upgrades Project.

NOW, THEREFORE BE IT FURTHER RESOLVED that the Executive Director shall schedule and deliver a report to the Board of Directors at its regular meeting in September 2019 on the outcome of the Executive Director’s evaluation of BHS’ current capability to deliver the Phase I MRF Upgrades Project and to report whether the attached Professional Services Agreement was executed or abandoned based on the outcome of that



evaluation.



____________________________________ ATTEST: Jess E. (Jay) Benton, Chairperson of SBWMA





_________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 7C - p1

7C

STAFF REPORT To: SBWMA Board Members From: Hilary Gans Senior Facility and Contracts Manger Date: June 27, 2019 Board of Directors Meeting Subject: Resolution approving payment of $77,420 for MRF Debris Roll Screen replacement and

installation Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2019-46 attached hereto authorizing the following action: Resolution approving payment of $77,420 for MRF Debris Roll Screen (DRS) parts replacement and installation.

Summary Resolution approving a contract with BHS, Inc. for the supply parts and installation for MRF sort system screen wear parts replacement.

Analysis The replacement of the internal parts of the glass DRS is a routine and necessary replacement. These parts wear out approximately every2 years and need to be replaced to keep the contamination out of the glass commodity. Staff has obtained a parts quote from BHS, Inc. the OEM ($71,198) and a competitive bid for installation from Titus Services $16,222 for a total installed cost of $87,420. Titus Services will pay prevailing wage and is a CA Department of Industrial Relations-certified contractor. As prescribed in the Operations agreement, SBR will pay the first $10,000 of the repair cost and the SBWMA will pay $77,420.

BHS, Inc. is the original equipment manufacturer (OEM) for the MRF and the DRS replacement parts; therefore, BHS, Inc. is the only company that can provide the DRS parts. Also, other vendors’ products would be less compatible with that of the BHS equipment within which the DRS is integrated. For these reasons, staff is recommending that the Board award this replacement parts contract on a sole source basis rather than putting it out for bid. The contract with BHS is provided in Attachment A.

Background Under the terms of the Operations Agreement, the cost for MRF sort system repairs is paid for by SBR up to a cap of $10,000 with the Agency paying the overage.

Fiscal Impact This cost is a routine replacement part for the MRF sort system and will be paid for out of the Equipment Replacement Reserve account which has a balance of $1,397,514.

Attachments: Resolution 2019-46 Attachment A – Contact with BHS for DRS replacement parts and installation.


SBWMA BOD PACKET 06/27/2019 AGENDA ITEM:7C - p2


MANAGEMENT AUTHORITY BOARD OF DIRECTORS RESOLUTION APPROVING PAYMENT OF $77,420FOR MRF DEBRIS ROLL SCREEN

REPLACEMENT AND INSTALLATION

WHEREAS, there is a need to repair the glass Debris Roll Screen (DRS) to continue good operation and performance of the MRF Sort System,

WHEREAS, the parts for the repair are to be purchased sole-source from the OEM Bulk Handling systems and installation of the equipment will be provided by low-bid contractor Titus Services, which will pay prevailing wage and is CA Department of Industrial Relations-certified,

WHEREAS, BHS, Inc. as the original equipment manufacturer (OEM) for the MRF and the DRS parts is the only company that can provide those replacement parts, and integrate them successfully with the other BHS MRF equipment within which the DRS operates,

WHEREAS, the total cost for the parts and install is $87,420and SBR will pay for $10,000 of the repairs cost,

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves Resolution approving payment of $77,420for MRF DRS replacement and installation



____________________________________ ATTEST: Jess E (Jay) Benton, Chairperson of SBWMA




SOUTH

RECYCLINC

Shoreway Environmental Center

Requisition Work Order

Date

Requested by:

Work Summary

Area

Completed by

Project Cost

Completed by:

Project Dates

Days

SBWMA Approval

Name /Title:

SBR Approval

Name / Title:

5/9/2019

Paul Keck

0 South Bay Recycling

333 Shoreway Road


Project Number_2_2_3 _____________ _

□ SBWMA - RethinkWaste

610 Elm Street, Suite :a'.J2


BHS to supply (18) debris roll screen shafts, bearings and chain to restore the residential component to specifications.

BHS projects 3- 4 weeks lead time for parts, but will not begin manufacture without a written PO. Titus Maintenance

has bid to perform the work. Their scheduling ability will be subject to review once a definitive timeline is established.

The Titus plan is to begin work on a chosen Saturday, use two crews on rotating J2 hour shifts, with scheduled plant

start up at 7:00 am Monday morning.

BMRF Building

�

Scale House

Transfer Building SBR Office

SBR Maintenance Shop Scales

Canopied Truck Shop Other -

@SBR

Contractor

@SBR Time and Materials Project

E] Estimated Hours

SBR Pass Through to the SBMWA Contractor Direct Bill to the SBWMA

� Parts Cost (See attached)

Attached Quote (If Contractor)

$71,198.44 plus shipping & sales tax

§ TDB upon approval & order To:

§ §

Hilary Gans/Contracts Manager Date:

Dwight Herring/General Manager Date:

$16, 2 2 2 . 00

_________________________________________________ SBWMA BOD PACKET 06/27/2019



_________________________________________________ SBWMA BOD PACKET 06/27/2019



Titus Industrial Supply Mike

Titus Industrial Supply Phone: 1-909-357-3316 11080 Rose Ave. Fax: 1-909-357-3166 Fontana, CA 92337 DIR certification registration no.: 1000060249

Customer Information

PURCHASE ORDER: PENDING FROM SOUTH BAY Terms: NET 30

To: SOUTH BAY RECYCLING Date: 4/30/2019

Attention: MR. PAUL KECK & ROBERT OURRIQUE

NATIONAL PROJECT PRICING

PROJECT: REPLACE SHAFTS SPROCKETS & BEARINGS ON DRS SCREEN

PROJECT QUOTATION ESTIMATE D

DATES: START AT 6:00 AM ON SATURDAY & COMPLETE BY MONDAY 6:00 AM Date: TBD

PROJECT SCOPE: Complete repairs and replacement on all disc shaft to include sprockets & bearings as per all parts furnished by South Bay Recycling on the Debris Roll Screen as estimated this day 6/3/2019 by Mr. Jose Luis Cruz of Titus. Prevailing wage to be paid.

Actual Projected Prevailing Project Cost: $16,222.00 “NOTE WEEKEND RATES APPLICABLE:”

Gentlemen please review and inform moving forward so that we can get this scheduled as per our past conversations.

Respectfully,

MICHAEL J. ATENCIO TITUS MRF SERVICES 11080 ROSE AVE FONTANA CA 92337 OFFICE: 1-(909) 357-3156 CELL: 1 (626) 688-3078 [email protected]

_________________________________________________ SBWMA BOD PACKET 06/27/2019








_________________________________________________________________________________________________________________ SBWMA BOD PACKET 06/27/2019 AGENDA ITEM: 7D - p1

7D


Hilary Gans, Sr. Facilities and Contracts Manger Date: June 27, 2019 Board of Directors Meeting Subject: Review of TAC direction regarding agency options as they relate to the current Shoreway

Operations Agreement with South Bay Recycling which expires on December 31, 2020. Recommendation This staff report is for informational purposes and no formal action is required of the Board of Directors.

Summary On May 9th, 2019, the SBWMA’s Technical Advisory Committee (TAC) considered end-of contract options and recommendations from Staff that the Shoreway Operations Agreement (Agreement) with South Bay Recycling (SBR) (expiring on December 31, 2020). After consideration of key elements provided in the analysis section of this report, the TAC strongly concurred with Staff’s recommendation that it is in the best interests of the Agency to extend the current Operations Agreement under the same terms through December 31, 2023. This item is now being brought to the Board for discussion, a review of market options, as Staff seeks direction to:

1. Confirm an extension of the current Agreement with SBR through December 31, 2023

2. Choose whether or not to engage in a long-term Agreement extension discussion with SBR, asrecently requested by SBR dated May 2019 (Attachment A).

3. Determine the most favorable option and course of action to secure contracting services for theoperations of the Shoreway Environmental Center beginning on January 1, 2024, and beyond...

Analysis After discussion of the points presented below, the TAC concurred with Staff recommendation that it is in the Agency’s best interest to extend the current Operations Agreement for the maximum 3-years as provided for in the current agreement. Staff believes that the Agency would be well served to extend the Operations Agreement with SBR for the full 3-years for the following 13 reasons:

1. The original procurement was highly competitive: The Facility Operations RFP was conducted in 2009and was a very competitive process with seven (7) bidders.

2. SBR was the low-bidder by over a million dollars: SBR was the selected low-bidder and was deemedhighly qualified to operate the Shoreway Operation.



3. SBWMA maintains a low cost of service: SBR is compensated for each ton processed at the MRF, the transfer station and long-haul transportation. These processing rates have increased annually at a fixed rate, not greater than the national Consumer Price Index (CPI).

4. Commodity Revenue Share has decreased: As commodity prices have eroded the amount paid to SBR at

the MRF (as a diversion incentive has decreased, reducing SBR’s current Share compensation to an all-time low).

5. SBR has provided excellent service: SBR has a proven track record of excellent facility operations during daily operations, and with particular distinction during the September 2016 fire recovery projects and the unexpected collapse of international commodity markets in 2018. There have been no instances where the company has failed to perform a core service. Additionally, SBR has maintained the agency-owned Shoreway buildings and equipment well. Prior problems of staff turnover seem to be resolved.

6. SBR has been a good partner in facility operations: SBR has maintained a cooperative approach with the

Authority, and works to protect the SBWMA’s interests (e.g., MRF fire recovery).

7. SBR has been a good partner in commodity marketing: SBR has anticipated and informed the Agency of commodity marketing problems in advance, has worked with the Agency to preemptively prepare for market problems, and has shared in the expenses of additional sorting/shipping costs. During the past 8 years there have been no significant interruptions in marketing/movement of MRF commodities at a time where some communities have landfilled their recyclables due to diminished materials markets.

8. SBR embraces innovations: SBR has been highly engaged in design of the MRF Upgrades project and the development of the O2E project for organic diversion. These projects have/will benefit from the collaborative development approach with SBR.

9. Other service providers: There are no obvious/better companies to provide the operations services and the

agency has not been approached by other companies with an interest in providing the operations services.

10. Existing Operations Agreement: Staff does not see a need to make substantial changes to the existing Operations Agreement - the document is serving the Agency well and needs no major changes. The existing agreement is known as Agreement for the Operation of the Shoreway Recycling and Disposal Center, South Bay Waste Management Authority and South Bay Recycling, LLC, July 2009. This Agreement is posted on the RethinkWaste website for public viewing at the following link:

https://www.rethinkwaste.org/uploads/media_items/shoreway-operations-agreement.original.pdf

11. Current commodity market conditions: The current commodity market crisis is creating uncertainty that would put the Agency at a disadvantage if it were to conduct an RFP process (especially since the Revenue Guaranty and a Commodity Revenue Share are at a low point).

12. MRF CIP Projects: The Agency is planning major MRF capital investments and changing operations companies currently would increase risk associate these projects.

13. 2023 RFP Process: The SBWMA will likely be in a stronger position to conduct an RFP in 2022 after: 1) the equipment upgrades have been implemented and the benefits are realized and can be incorporated into a





potential RFP process (i.e., reduced sort labor, better commodity quality); 2) the Organics-to-Energy project cost of operations are well understood and can be characterized in a potential RFP’s scope of services.

Background Extension Option: The option to extend the Operations Agreement is unilaterally the SBWMA’s decision. Presumably, if we do not exercise the option to extend, SBR could decline our request to have them operate the Shoreway Environmental Center beyond 12/31/2020. Extension Term: under the agreement, the SBWMA can extend the term of the existing Operations Agreement for a maximum of 3-years, through a process of 1, 2 or 3-year extension(s). Contract Extension Noticing: Per section 2.03 “Option to Extend Term” in the existing Agreement, the SBWMA must provide written notice to SBR before June 2020 regarding its intent to extend the Operations Agreement. Fiscal Impact Not evaluated. Attachments: Attachment A: South Bay Recycling (SBR) Operations Agreement letter dated May 17, 2019


_________________________________________________ SBWMA BOD PACKET 06/27/2019



8

PUBLIC EDUCATION

AND OUTREACH

Agenda Item 8



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8A

STAFF REPORT To: SBWMA Board Members From: Julia Au, Recycling Outreach Programs Manager Joanna Rosales, Public Spaces Fellow Shirley Ng, Public Spaces Fellow Date: June 27, 2019 Board of Directors Meeting Subject: Long Range Plan Pilot Program: Increasing Recycling and Composting in Public Spaces Recommendation This staff report is for discussion purposes only and no formal action is requested of the Board of Directors. Summary The purpose of this report is to provide the Board and the public with a complete summary of the Public Spaces pilot program that began in late 2017. After launching two pilots in two member agencies, Redwood City and San Carlos in 2018 and early 2019 and in collaboration with City Staff and Recology, SBWMA Staff collected and analyzed data through surveys in the community and testing the effectiveness of different versions of signage on new receptacles in parks and different signage on existing receptacles in downtown corridors. For the parks pilot, Staff conducted pre-pilot waste audits and participation surveys to create four different signages to test. Post installation waste audits and surveys were conducted, and the data collected helped Staff better understand the level of public knowledge and determine which signage provided the best motivator for the public to sort correctly. For the downtown pilot, Staff conducted pre-pilot waste audits, surveys and observations of downtown goers on how they handle their waste. Two different signages were installed onto existing receptacles and post installation waste audits were conducted to determine the best motivator for the public to sort correctly. The results of this pilot have been used to plan a proposed Agency-wide program expansion, with the first roll-out phase being factored in the proposed budget for FY 19/20 and in the new 2020-2025 SBWMA Long Range Plan. Analysis Staff presented a program update on the Public Spaces pilot at the May 23rd Board meeting that concluded that for the parks signage, the Comprehensive signage provided the best motivator for the public to sort their waste correctly. Staff received positive feedback from the Board along with a recommendation to ensure the San Mateo County Transit District (Samtrans and Caltrain) is part of the public spaces project in the future. Since the Board presentation, Staff conducted additional waste audits at downtown receptacles post signage installation. The waste audits conducted have not reached a high enough level to make verified conclusions and as such Staff will continue waste audits through the next two months to determine the best signage to move forward with. Full conclusions are in Attachment A: The Public Spaces Pilot Final Report.



Staff continues to work with Recology to identify costs associated with requested site-specific service level adjustments that have been identified to support this program. Background On June 25, 2015, the SBWMA 2015 Final Long Range Plan identified parks and downtown shopping corridors as the best potential to increase the amount of recyclables captured. Staff recommended the implementation of a pilot project to increase recycling in two different public space settings-a downtown shopping district area and a park. This program addresses important policy needs to meet the state requirements of Assembly Bill (AB) 341, with its 75% statewide recycling goal by 2020, and AB 1826, with its mandatory commercial organics recycling goals. Fiscal Impact All program launch expenses incurred were included in approved FY 18/19 budget and are within the approved line item amounts. Future program costs are included in the proposed FY 19/20 budget. Attachments: Attachment A – Long Range Plan: Public Spaces Pilot Final Report – Available online only at www.rethinkwaste.org






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8B

Agenda Item 8B Presentation by Christine Chang, 6th Grader at Central Middle School, on her Metal Straws Initiative in San Carlos

No Staff Report Presentation Only

Attachments: Attachment A – Power Point Presentation by Christine Chang - Ocean Friendly Restaurants


{Ocean Friendly Restaurants

Christine Chang, 6th grader at CMS

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____________________________________________________ __________________________________________________________ AGENDA ITEM: 8B ATTACHMENT A - p1


How it all began Ocean Friendly Restaurants Our community Our world “What If’s”

Contents

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Christine Chang, 6th grader at CMS District ROPES Project The Surfrider Foundation Ocean Friendly Restaurants

Will go more in depth in a moment Johnston’s Saltbox Cuisinett San Carlos Living

How It All Began

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A hailstorm of letters Meeting Mr. Raby Meeting Mr. Johnston The Surfrider Foundation

Britt Bensen andTaletha Derrington

Ocean Friendly Restaurants

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The Bay Area What small things can do ‘Flows to Bay’

Our Community

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Plastic pollution The Great Pacific Garbage Patch Plastic pellets Global climate change

Our World

National Geographic

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What if: Every restaurant up and down Laurel were OFR’s? We all pitched in to reduce waste?

Then… Every small action adds up to a larger goal You can change the world- today.

“What If’s”

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9

INFORMATIONAL ITEMS

Agenda Item 9



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9A


Julia Au, Recycling Outreach Programs Manager Date: June 27, 2019 Board of Directors Meeting Subject: Legislative Session Update

Recommendation: This staff report is for discussion purposes only and no formal action is requested of the Board of Directors.

Summary The purpose of this report is to provide an update to the Board monthly on the current 2019-2020 California Legislative Session and regulatory activities being conducted by our lobbyist, Environmental and Energy Consulting (EEC). All activities conducted from May 14 through June 14 are listed in Attachment A for review. Attachment B provides in-depth information on high priority legislative bills the Agency is tracking along with current positions and status/location.

SBWMA is co-sponsoring AB 1509 (Mullin) with California Product Stewardship Council and Californians Against Waste. The bill would create a proper disposal program for both loose lithium-ion batteries and ones embedded in consumer products. AB 1509 passed out of the Assembly Floor on May 23 with a 63-0 vote. AB 1509 is now in its second house, the State Senate, and will next be heard in the Senate Environmental Quality Committee on July 3 and Executive Director Joe La Mariana will again testify on the Agency's behalf at the hearing.

Analysis The SBWMA contracts with EEC to act as the Agency’s legislative and regulatory lobbyist in California. EEC is a registered lobbying firm in the state of California (Lobbying ID # 1371848). On January 24, 2019, the Board approved the 2019-2020 SBWMA Legislative and Regulatory Platform that identifies 12 topic areas of importance to the Agency and our member agencies to guide the identification of critically relevant bills and regulatory action that need attention during the legislative session. The Executive Committee serves as the Agency’s Legislative and Regulatory Committee and Staff is provided with strategic feedback and direction during our monthly Executive Committee/Board Agenda Review meetings. Based on this feedback, Staff provides EEC with tactically direction on issues, prospective bills and regulations that are in alignment with the Agency’s Board-approved annual Legislative Platform.

Attachments: Attachment A – May/June 2019 Legislative Update Attachment B – 2019 California Legislative Bills and Positions Attachment C – Copies of letters generated June 2019 – Available online only at www.rethinkwaste.org


https://www.rethinkwaste.org/uploads/media_items/062719-9-a-attach-c.original.pdf

https://www.rethinkwaste.org/uploads/media_items/062719-9-a-attach-c.original.pdf

RethinkWaste June 2019 Legislative Report

I. Key Dates & Updates AB 1509 (Mullin) passed out of Assembly Appropriations Committee and

off the Assembly Floor with a vote count of 63 ayes; 0 noes; 17 not voting AB 1509 now heads to Senate Environmental Quality Committee SB 1383 revised draft regulations will be released on June 18th May 31 was the last day for all bills to pass off the Assembly and Senate

Floors Policy committees in both houses will resume on June 3

II. Legislation AB 1080 (Gonzalez)/ SB 54 (Allen): Adopts regulations to source reduce

and recycle 75% of single-use packaging and products sold or distributedin California by 2030

i. Both bills passed off their respective floors and are now in SenateRules Committee

III. May & June Activities We met with CalRecycle and three policy committees from the Senate and

Assembly to discuss AB 1509 language improvements

We are working with various Lithium-ion battery industry stakeholders tohear their concerns about the effects of AB 1509

We are monitoring discussions in the waste industry about a potentialfunding mechanism for infrastructure – groups are discussing the trade-offs between a generator fee and tip fee.

RethinkWaste is currently supporting 11 bills; we will begin submittingsupport letters and attending policy committees in June and July.

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Priority Bills Overview

Bill # & Author What does it do? Sponsor? Position Status Letter Sent

AB 1509 (Mullin) Priority 1

Requires manufacturers to create safe handling mechanisms for used lithium-ion batteries at the end of life

SBWMA

California Product Stewardship Council

Californians Against Waste

Support Senate Env. Quality on 7/3

Yes, Senate Env. Quality

AB 215 (Mathis) Priority 1

Makes dumping waste on private property w/o consent of owner punishable by increasing fines for each conviction ($250-$3000), with the 4th conviction as a misdemeanor.

None Support 2-year bill N/A

AB 1080 (Gonzalez) Priority 1

Adopts regulations to source reduce and recycle 75% of single-use packaging and products sold or distributed in California by 2030

None Support Sen. Env.

Quality on 7/3

AB 1583 (Eggman) Priority 1

Creates a holistic recycling reform bill with various provisions to support state recycling efforts

Californians Against Waste

Republic Services Watch Sen. Env.

Quality & Gov. and Finance

SB 54 (Allen) Priority 1

Adopts regulations to source reduce and recycle 75% of single-use packaging and products sold or distributed in California by 2030 None Support

Asm. Natural Resources

SB 726 (Caballero) Priority 1

Authorize public agency’s contractor to conduct materials exchange program as part of its household hazardous waste collection program and imposes a state-mandated local program

California Product Stewardship Council Support

Assembly ESTM

Yes, Sign-on to ESTM

AB 144 (Aguiar-Curry)

Priority 2

Requires the Strategic Growth Council to submit a report/scoping plan for the state to meet its organic waste management mandates, goals, and targets None Support 2-year bill N/A

AB 161 (Ting) Priority 2

“Skip the Slip” – By 2022 adopts regulations to reduce receipt paper waste. By 2024 requires businesses to offer e-receipts.

None Support Senate

Judiciary 6/25 Yes, Sen. Judiciary

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https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB1509

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB1509

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB215






http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB54








AB 187 (Garcia, Cristina) Priority 2

Creates a clean-up bill for the Mattress Stewardship Program None

Oppose unless

amended

Sen. Env. Quality on 7/3,

then Sen. Judiciary

Yes, Sign On to Sen. Env.

Quality

AB 470 (Limón) Priority 2

Establishes the California Green Business Program within CalEPA, which will develop baseline, beyond compliance, sector-specific environmental standards for green business certification


AB 619 (Chiu) Priority 2

Allows temporary food facilities and restaurants to serve food and beverages in reusable containers None Support

Passed Senate Health,

headed to Sen. Approps

Yes, Senate Health

AB 729 (Chu) Priority 2

Allows CalRecycle to implement a bridge program when potential carpet stewardship applications have been rejected

National Stewardship Action Council Support

Referred to Sen. Env.

Quality on 7/3, then Judiciary

Yes, Sen. Env Quality

AB 792 (Ting) Priority 2

Requires plastic beverage containers must contain at least 25% recycled material by 2021 and a ratcheting up scheme to reach 75% by 2034.

None Support Senate Env. Quality on 7/3

Yes, Sen. Env Quality

AB 827 (McCarty) Priority 2

Requires businesses to have front-of-house food/compost bin

None Support

Passed Senate Env.

Quality, headed to

Sen. Approps

Yes, Senate Env. Quality

AB 1162 (Kalra) Priority 2

By 2024, would ban all hotels/lodgings from providing small plastic bottles containing shampoo, conditioner, or bath soap in an effort to reduce plastic waste.

None Support Senate Env. Quality on

6/19 Yes, Senate Env. Quality

AB 1163 (Eggman) Priority 2

"Right to repair" bill– allows individuals and third party service dealers to receive functional parts and service literature from manufacturers for electronics and appliances.

Californians Against Waste Support 2-year bill N/A

AB 1171 (Chen) Priority 2

would prohibit local gov from requiring/prohibiting grocery store to use/not use certain types of packaging based on availability of curbside program for locals

National Grocers Association Watch 2-year bill N/A

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AB 1228 (Calderon) Priority 2

Creates a 20% tax credit for compostable cutlery after Jan 2020 until Jan 2025 None Watch 2-year bill N/A

AB 1236 (Lackey) Priority 2

Provides $200 million from GGRF to CalRecycle for its Fiber, Plastic, and Glass Grant Program, requires CalRecycle to develop an enviro impact report for composting facilities, and requires OPR to identify barriers to recycling/renewable energy goals


AB 1672 (Bloom) Priority 2

By 2021 requires non-flushable products to be labeled as such and labeled flushable products must meet specified standards

California Association of Sanitation Agencies Support 2-year bill N/A

SB 372 (Wieckowski)

Priority 2

Author intends to introduce language next year with EU-inspired EPR policy to reduce single-use plastics in the waste stream.

Eunomia Watch 2-year bill N/A

SB 424 (Jackson) Priority 2

Single-use Tobacco EPR bill. None Support

Senate Governmental Organization and Health

SB 667 (Hueso) Priority 2

Requires CalRecycle to develop 5-year investment strategy to drive innovation and support technological development and infrastructure in order to meet organic waste targets

None Watch Asm. Natural Resources on

6/24

Priority 1 & 2 Bill

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http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1236

http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1236










STAFF REPORT

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9B

To: SBWMA Board Members From: John Mangini, Senior Finance Manager Date: June 27, 2019 Board of Directors Informational Packet Subject: 2019 Finance and Rate Setting Calendar Recommendation This is an informational report and no action is necessary. Summary The purpose of this staff report is to keep the Board and Member Agency staff informed on the schedule of important financial and rate setting events in 2019. This staff report is updated as necessary and included in the Board packet each month. Schedule of Finance, Contractor Compensation and Rate Adjustment Activities in 2019: January 2019

Approved FY17/18 audited Financial Statement. Reviewed Mid-Year FY18/19 Operating Budget.

March 2019

Recology submitted the unaudited 2018 Revenue Reconciliation Report (March 31). Approved Plan of Finance Approach for bond issuance.

April 2019

Approved of unaudited 2019 calendar year financial statement for bond reporting requirements at April 25 Board meeting.

Approved recommending Member Agencies approve 2019 bond issuance. May 2019

Reviewed Preliminary (Draft) FY19/20 SBWMA Budget at May 23rd, 2019 Board meeting, including Revised Long Range Plan recommendations (from two TAC input sessions).

Member Agency’s elected body meetings for bond financing approval. Established an Agency Debit Policy consideration item (required for bond refunding process) Approved final bond refunding disclosure and related documents

June 2019

2020-2024 Long Range Plan (Draft)—Board Study Session at June 27th Meeting. Review and approval of Final FY19/20 SBWMA Operating Budget at June 27th, 2019 Board meeting. Bond Pricing. Recology’s 2020 Compensation Application due to the SBWMA and Member Agencies (June 14). SBWMA and Member Agency comments are due to Recology on its 2020 Compensation Application (June 28).


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SBWMA issues a letter requesting confirmation formal Member Agencies on their estimated 2020 Member Agency fees (e.g., franchise fees) to be included in their 2020 solid waste rates. (Due: June 26)

Bond Closing. Review of the Revenue Reconciliation Report from the Financial Systems audit report on Recology.

July 2019

SBR's 2020 Compensation Application due to the SBWMA (July 5). Recology revised 2019 Compensation Application due to SBWMA & Member Agencies (July 19). SBWMA issues the following reports to the Board and Member Agency staff for review and comment:

o Estimated 2019 and 2020 residential and commercial base revenue. o Estimated collected tonnage for 2019 and 2020. o 2019 Residential rates vs. 2020 cost analysis.

Optional at Member Agency request: Estimated residential revenue changes due to cart migration (i.e., lost revenue) by Member Agency since 2018.

o Summary of 2020 Member Agency fees to be used in the 2020 cost projections based on Member Agency feedback.

August 2019 SBWMA issues Draft Report Reviewing Recology’s 2020 Compensation Application, recommended total Revenue

Requirement, and Rate Adjustment (August 9). SBWMA issues the Draft Report Reviewing SBR’s 2020 Compensation Application (August 16). Comments due back from Member Agencies on draft Reports Reviewing Recology’s & SBR’s 2020 Compensation

Application (August 26).

September 2019 2020-2024 Long Range Plan (Final)—Board Approval at September 26th Meeting. SBWMA TAC Workshop to review Pre-Final Report Reviewing Recology’s 2020 Compensation Application. SBWMA issues Pre-Final Report Reviewing Recology’s 2020 Compensation Application including the

recommended total Collection Rate Adjustment for 2020 by email (September 12). SBWMA issues Final Report Reviewing Recology’s 2020 Compensation Application including the recommended

total Collection Rate Adjustment for 2020. (September BOD Packet). SBWMA issues Final Report Reviewing SBR’s 2020 Compensation Application. (September BOD Packet). Approval of the SBR 2020 Compensation Application (September 26 BOD Meeting). Approval of the Recology 2020 Compensation Application and total recommended Revenue Requirement

(September 26 BOD Meeting). September – December 2019

Member Agencies issue Prop. 218 notices and approve their final 2020 solid waste rates.

November 2019 SBWMA issues report to Board on recommended January 1, 2020 Shoreway tip fee adjustments (includes

calendar year 2019 & 2020 SBWMA financial projections with assumed tip fee and cash reserve balances).



9C

STAFF REPORT To: SBWMA Board Members From: John Mangini, Senior Finance Manager Date: June 27, 2019 Board of Directors Meeting Subject: Check Register Detail for May 2019 Recommendation This is an informational item only and no action is required. This report was requested by the Board members.

Summary The purpose of this report is to provide transparency to the Board and the public on the actual spending by the SBWMA. All payments made by check issued in May 2019 are listed on the attached (Attachment A) report for review.

Analysis The SBWMA has a contract with the City of San Carlos for accounting services including the issuing of all payments and deposit of all receipts. In accordance with the City of San Carlos’ policies, checks are normally issued every two weeks. All SBWMA invoices are approved for payment by the program manager and then by the Executive Director or Finance Manager. Total A/P spending for May 2019 was $4,418,596.23 as detailed in Attachment A.

Certain ACH transactions such as payroll and some benefit payments are drawn directly from the bank and are therefore not included in these A/P reports.

If you have any questions on this, please contact Cyndi Urman or John Mangini. The format of the check registers is limited to what is available from the city’s MUNIS accounting system.

Attachments: Attachment A – May 2019 Check Register Detail Report


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9D

STAFF REPORT To: SBWMA Board Members From: Cyndi Urman, Office Manager/Board Secretary Date: June 27, 2019 Board of Directors Meeting Subject: Technical Consulting Contracts: March – May, 2019 Recommendation This is an informational item only and no action is required. This report was requested by the Board members.

Summary The purpose of this report is to provide an update to the Board on a quarterly basis on the technical consulting contracts that have been issued. All contracts issued in between March 2019 and May, 2019 are listed in Attachment A for review.

Each quarter throughout a given calendar year, staff will update this listing with any new technical contracts issued. How frequently this report is produced (e.g., monthly or quarterly) was discussed with the Executive Committee and it was decided given the small number of contracts issued that a quarterly frequency was appropriate.

If you have any questions on the attached listing of technical contracts, please contact Cyndi Urman

Attachments: Attachment A – Technical Consulting Contracts –March – May, 2019


Vendor NameAmount of Contract Scope of Work Date of Award

Contract Procedures Used Budget Line Item Budget Line Item Description

* Stradling Yocca Carlson &Rauth

RESO 2019-16$86,500

Bond and Disclosure Counsel for the SBWMA’s proposed issuance of 2019 Solid

Waste Revenue Bonds03/01/19 RFP N/A To be paid through bond proceeds

HF&H Consultants $30,000 Financial support related to the financing of future capital requirements 03/15/19 Single Source 520309-HFM01 Finance Analysis Support

S. Groner and Associates $49,007 Public Education and Outreach Campaigns 04/02/19 RFP520640-MF001 & 520604-RES01 Multi Family and Residential Outreach

R3 $4,800 Comparative Analysis for Bond Issuance 04/12/19 Single Source 520309-HFM01 Finance Analysis Support

*The Grant FarmRESO 2019-26 $65,000 Cal Recycle Organics Grant and Sales Tax

Exemptions Grant Applications 04/26/19 Single Source 520340-LRPU1 Long Range Plan

*HF&H ConsultantsRESO 2019-28 $49,980 Assistance with SB1383 Compliance

Planning 04/26/19 Single Source 520333 Recycling Technical Assistance

HF&H Consultants $6,985 Solid Waste Rate Survey for 2019 05/03/19 Single Source 520307 Rate Review

Ascent Environmental $30,000 Preparation of 2018 Cal Recycle Electronic Annual Reports & Support 05/13/19 Single Source 520311-CIWMB State's Required Annul Reports

Maze and Associates $8,135 Audit of Financial Statements for Year End FY19 & Bond Compliance Documents 05/22/19 Single Source 520301 Annual Audit

City of San Carlos $40,300 Transition of Accounting Services to the City of Redwood City 05/22/19 Single Source 520310 Accounting Services

Technical Consultant Contracts - March - May, 2019

Competitive Procurement includes selecting contractors resulting from Requests for Proposals (RFP), Requests for Qualifications (RFQ), obtaining multiple bids/proposals and/or obtaining bids/proposals from Single Source includes selecting contractors based on a sole source solicitation of bids/contracts and subsequent contract negotiations.Contracts marked with an * have been adopted by the Board of Directors with the passage of a resolution.

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9E

STAFF UPDATEPotential Future Board Agenda Items

(Meetings at San Carlos Library Conference Room)

July 25, 2019 TBD

August, 2019 – No Meeting

September 26, 2019 Closed Session: Executive Director Review Resolution Approving 2020 Recology and SBR Compensation Applications Resolution Approving Administrative and Financial Services to Calendar Year from Fiscal Year

Workplan Resolution Approving Purchase of MRF Upgrade Equipment Phase I and MRF CIP Update Resolution Approving Final 2020-2024 Long Range Plan Organics-to-Energy Pilot—project status report Staff Update and demonstration of new RethinkWaste Website 2019 Rate Survey a Regional Comparative Rate Review

October 24. 2019 TBD

November 21, 2019 Annual Board and TAC Holiday Lunch prior to Board Meeting Resolution Approving 2020-2024 Long Range Plan Refresh Resolution Approving Administrative Services Work Plan Review for Fiscal Year to Calendar Year

Conversion Report on SB1383 Final Regulations and Compliance Update Review and Approval of 2020 Tip Fee Recommendations Report on Organics-to-Energy Pilot and Grants: project status Quarterly Investment Report Closing report on 2019-2020 Legislative Session—YR1 activities Presentation by EEC

December, 2019 – No Meeting
