R3 recently assisted the City of Beaumont (City) with the negotiations with their exclusive franchised hauler, Waste Management (WM), for a new Franchise Agreement (Agreement) for the collection of residential and commercial solid waste. The new Agreement was designed to address new regulatory requirements and, specifically, featured programs to achieve SB 1383 compliance.
R3’s tasks for this engagement included the following:
- Analyzed the City’s existing customer service rates and rate structure and compared them to similar jurisdictions to support the City’s ability to obtain rate and/or service concessions from WM as part of the new Agreement;
- Reviewed the existing Agreement to develop an understanding of how the City’s current solid waste collection programs and services, performance standards, and operational requirements compared to solid waste industry standard best practices; and
- Provided the City with recommendations for Agreement updates that incorporated the latest international solid waste trends and state legislation, including AB 341, AB 1826, AB 901, AB 1594, and SB 1383.
Our negotiation support included advising the City on how to cost effectively implement commercial organics, and validating WM’s cost basis for the new services.
With our assistance, the City gained the following benefits:
- $5 million contract extension payment by WM to the City that transfers City billing functions and street sweeping services to WM at no cost to the City;
- Universal recycling and organics for all commercial and MFD accounts;
- 5-year residential rate freeze;
- Future annual rate increases capped at 4% per year;
- $2.1 million/year franchise fee paid by WM to the City;
- $125,000/year paid by WM to the City to fund City staffing and contract services for contract monitoring and compliance;
- Provision by WM of a half-time dedicated contract compliance/recycling coordinator for the City; and
- Provision by WM of a sustainability team for ongoing outreach and compliance with SB 1383, AB 1826, and AB 341.