As part of the State’s goal to achieve 75% waste diversion statewide by 2025, the State adopted a mandatory commercial organic recycling program for local jurisdictions to implement as part of the Governor’s Assembly Bill AB 1826 Chesbro (Chapter 727, Statutes of 2014). This new law was designed to help improve air quality by reducing greenhouse gas emissions that are produced in landfills. Beginning in 2016, the law requires certain businesses in California, with limited exceptions, to recycle organic materials. Organic material is defined as food waste, green waste (landscape debris and trimmings), and non-hazardous wood waste. Organics recycling requires that your business separate your organic materials from other refuse materials. Multi-family residential dwellings are not required to have a food waste diversion program.

The implementation schedule for businesses to enact an organics recycling program is as follows:

*If the State of California, by the year 2020, has not reached its goal to reduce organic disposal by 50% of the base year (2014), the mandated organic recycling requirement will be expanded to cover businesses that generate 2 cubic yards or more of trash per week.

Under this new law, businesses must apply good faith efforts by implementing one of the following:

• Subscribe to the new Food Scrap recycling service

• Self-haul your food scraps to a composting facility, and/ or

• Donate edible food to a food bank

SB 605 (Lara, Chapter 523, Statutes of 2014) directed California Air Resources Board to develop a comprehensive short-lived climate pollutants (SLCPs) strategy, in coordination with other state agencies and local air quality management and air pollution districts to reduce emissions of SLCPs.  SB 1383 (Lara, Chapter 395, Statutes of 2016) directed the Board to approve and begin implementing the plan by January 1, 2018, and set statewide 2030 emission reduction targets for methane, HFCs, and anthropogenic black carbon. 

As it pertains to CalRecycle, SB 1383 targets have been established to achieve a 50 percent reduction in the level of statewide disposal of organic waste from the 2014 level by 2020 and a 75 percent reduction by 2025.  The law grants CalRecycle the regulatory authority required to achieve the organic waste disposal reduction targets and establishes an additional target of no less than 20 percent of currently disposed edible food to be recovered for human consumption by 2025.  If the statewide diversion goal is not met, local jurisdictions may be required to impose penalties and collect fees to recover costs incurred from non-recycling organic waste generators in order to in comply with the State regulations.

Republic Services, doing business as Garden Grove Disposal, has been the Garden Grove Sanitary District’s (District) solid waste collection and disposal provider since 1989.  On July 1, 2010, this franchise service agreement was amended and the City was added as a party to the Agreement.   In response to AB 1826, Republic Services has developed a source separated food scrap collection program. Program strategies are to have the materials collected, and processed into a renewable source of fuel and/or energy though a process known as anaerobic digestion.

To ensure the rates proposed for this new program are fair and reasonable, the District in January 2017, contracted with HF&H Consultants to perform a formal rate review process on Republic Services' proposed recycling organic rates, and to negotiate on behalf of the District with the hauler. Other Republic Services' contracted agencies such as the cities of Fullerton, Brea, Yorba Linda and Placentia also underwent a rate review facilitated by HF&H at the same time as our District. This collaborative effort made the rate negotiations consistent among all participating agencies.

HF&H has thoroughly assessed program containers, collection vehicles, collection equipment, organics processing, public education and outreach, reporting, advertising, labor, principal, and interest payments proposed by Republic Services. Based on their cost analysis, final negotiations were successfully reached with Republic Services in January 2018. This resulted in commercial rate payers receiving the most cost effective rates with a program that meets State compliance.

The proposed rate adjustment would increase commercial rates on July 1, 2018, and January 1, 2019, by increments of 1.825%, or a total increase of 3.65%. These rates are based on Republic’s estimated participation levels with a rebalancing mechanism being set to take place in 2022 (unless the organics tonnage threshold is achieved earlier), for the purpose of adjusting rates to match actual program costs.  Program implementation will become effective July 2018.

There is no impact to the General Fund.

• Approve the amendment to the 2010 Agreement with Republic Waste Services of Southern California LLC, dba Garden Grove Disposal for organic waste handling services;

• Authorize the City Manager to execute the agreement on behalf of the City, and make minor modifications as appropriate thereto.

It is recommended that the Sanitary District Board:

• Approve the amendment to the 2010 Agreement with Republic Waste Services of Southern California LLC, dba Garden Grove Disposal for organic waste handling services;

• Authorize the General Manager to execute the agreement on behalf of the Sanitary District, and make minor modifications as appropriate thereto.

By:  A.J. Holmon III, Streets/Environmental Manager