Title
Recommendation to Receive an Update on Senate Bill 1383 Procurement Compliance and Approve Approach for Fiscal Year 2022-23 Compliance; and
Adoption of Resolution Amending the Fiscal Year 2022-23 Integrated Waste Fund Budget to Increase Revenue in the Amount of $115,019 and Increase Expenditures in the Amount of $115,019 to Receive and Appropriate Grant Funds From the California Department of Resources Recycling and Recovery (CALRECYCLE) for Senate Bill 1383 Implementation. (Public Works 26141630/26241631)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
In 2016, Senate Bill (SB) 1383, California’s Short-Lived Climate Pollutant Reduction Strategy, was signed into law. SB 1383 established statewide targets to reduce disposal of organic waste and increase the recovery of edible food. The regulations for SB 1383 require jurisdictions to provide mandatory organics collection services to all residents and businesses, conduct education and outreach, monitor compliance and conduct enforcement, establish an edible food recovery program, and procure recovered organic products. At this time, staff is updating the City Council on progress made towards meeting the SB 1383 procurement requirements and seeking approval of the approach for Fiscal Year (FY) 2022-23 compliance. In addition, staff is recommending approval of a resolution amending the FY 2022-23 budget to accept and appropriate grant monies for SB 1383 implementation.
BACKGROUND
In 2016, SB 1383 was signed into law to reduce short-lived climate pollutants, including methane. Methane is more potent as a greenhouse gas than carbon dioxide and contributes significantly to climate change. To reduce methane emissions from landfills, SB 1383 established a statewide target to reduce organic waste disposal by 75 percent from 2014 levels by 2025. The law also requires the State of California (State) to increase edible food recovery by 20% by 2025.
SB 1383 is the most significant waste reduction mandate in the last 30 years. The California Department of Resources Recycling and Recovery’s (CalRecycle) implementing regulations for SB 1383 went into effect January 1, 2022.
To implement SB 1383, jurisdictions are required to implement six main elements:
1) Provide mandatory organics collection services to all residents and businesses
2) Monitor compliance and conduct enforcement
3) Conduct education and outreach to the community
4) Procure recovered organic products
5) Establish edible food recovery program
6) Implement existing State requirements as outlined in the California Green Building Standards Code (CALGreen) and the Model Water Efficient Landscape Ordinance (MWELO)
This staff report is focused on the fourth element of SB 1383 - procurement of recovered organic products.
In addition to SB 1383 requirements, the City of Alameda (City) has a Zero Waste Implementation Plan which was updated in 2018 and includes five key strategies to achieve zero waste, or 89% diversion from the landfill:
1) Support zero waste culture in Alameda
2) Conduct targeted technical assistance with commercial and multi-family sectors
3) Create a food recovery program and enhance organics management
4) Update the City’s construction and demolition debris (C&D) recycling ordinance and conduct outreach
5) Expand high diversion franchise agreement with waste hauler
On May 18, 2021, the City Council approved a 12-year franchise agreement with Alameda County Industries (ACI) for the collection, transportation, and processing of the City’s municipal solid waste, recycling, and organic materials. The agreement, which became effective July 1, 2021, includes new requirements to assist the City with SB 1383 compliance. Also included in the agreement is a funding mechanism to help cover SB 1383 implementation costs through the rate setting process, should that be needed.
In November 2021, the City Council passed an Ordinance amending Alameda Municipal Code Chapter 21 (Solid Waste and Recycling) to comply with SB 1383, conform with the new franchise agreement, and implement strategy four of Alameda’s Zero Waste Implementation Plan Update (ZWIP Update) to revise the City’s Construction and Demolition Debris Ordinance to reduce the amount of waste from building projects.
As of January 1, 2022, SB 1383 requires the City to annually procure a minimum amount of recovered organic waste products (compost, mulch, renewable gas, and/or electricity from biomass conversion). The procurement target is calculated using 0.08 tons of organic waste per resident. Based on January 1, 2021 population estimates from the California Department of Finance, the city has 80,884 residents, which translates to a procurement target of 6,471 tons of recycled organic waste products annually.
This requirement can be met through procuring products for use and/or give-away or by contracting with a “direct service provider” that uses recovered organic waste products, like compost or renewable natural gas, on behalf of the jurisdiction. A direct service provider, as defined in the SB 1383 regulations, is a person, company, agency, district, or other entity that provides a service or services to a jurisdiction, pursuant to a contract or other written agreement. Examples include waste haulers, landscape contractors, and school districts.
In January 2022, to assist with SB 1383 implementation, the City entered into a formal direct service provider agreement with the Alameda County Waste Management Authority (StopWaste), outlining responsibilities in connection with the City’s compliance. The agreement allows compost and/or mulch procured by StopWaste to be attributed to the City (based on population) and count towards the City’s procurement target. StopWaste has an agreement with Zero Foodprint to procure compost for farms across the State on behalf of Alameda County jurisdictions and is exploring similar efforts within the County. StopWaste is also piloting compost distribution hubs at urban farms and has an agreement with Alameda Point Collaborative Farm2Market and Bay Area Makerfarm to provide compost for public give-away in the city. The compost hub fully opened to the public in April 2022. Since January 2022, the compost hub has distributed 50 cubic yards of compost to the public. Staff is monitoring this pilot project and exploring options on how the compost hub can assist the City with its procurement requirements.
At this time, staff has completed the initial work to plan for compliance with SB 1383’s procurement requirements and is seeking City Council approval of recommendations for FY 2022-23 compliance.
DISCUSSION
Update on Senate Bill 1383 Procurement Compliance
The City’s annual procurement target is 6,471 tons of recycled organic waste products. Eligible products include compost, mulch, renewable gas, or electricity from biomass conversion. Compost is the most viable option for the City to meet the procurement requirements due to local practices and lack of supply of eligible products. Currently, most of the mulch used in the city is from locally chipped trees. This material does not count towards the procurement target. SB 1383 regulations do not consider locally chipped mulch a “recovered organic waste product” as the material was not processed and produced at an eligible facility: landfill, transfer station, or permitted composting facility. SB 1383-eligible renewable gas (made from diverted organic waste) is also not a viable option to comply due to lack of supply. Lastly, biomass electricity is not a viable option as Alameda Municipal Power (AMP) does not procure SB 1383-eligible electricity due to lack of supply. The biomass electricity that AMP does procure is from landfill gas, which is not an eligible product as it is not produced from diverted organic waste. Additionally, AMP already provides 100% clean energy to all customers. Therefore, the likely path to compliance is for the City to procure compost.
The City’s annual procurement target of 6,471 tons of recycled organic waste products translates to 9,383 cubic yards of compost based on the conversion factor included in the SB 1383 regulations (one ton of organics equals 1.45 cubic yards of compost). At the standard ¼” depth for application, the City needs approximately 12.5 million square feet (~287 acres) of green space to meet SB 1383’s procurement target. Currently, staff has identified approximately 4.6 million square feet of potential City-owned green space for compost application.
SB 1383’s procurement target (.08 tons per person) was designed to help build markets for diverted organic material. CalRecycle established the procurement target based on the amount of organic waste that needs to be diverted to achieve the 2025 statewide goal (25 million tons) rather than what is achievable given current established markets, supply, and infrastructure. The target also does not consider the need or potential for compost and mulch use in jurisdictions given available green space. To establish the per capita procurement target, CalRecycle multiplied 25 million tons by 13% (the government share of statewide gross domestic product) and divided the sum by population. CalRecycle has shared with Alameda County jurisdictions that they do not expect many (if any) jurisdictions to meet their procurement target in the first year or few years. During compliance evaluations, CalRecycle has indicated that they will be reviewing the steps jurisdictions are taking to comply. Given the compliance expectations from CalRecycle and current resources, staff are recommending a phased approach to meet the procurement target.
Proposed Approach for Fiscal Year (FY) 2022-23 Compliance
Public Works staff coordinated with Alameda Recreation and Parks Department (ARPD) to begin to identify City-managed areas for potential compost and mulch application. For FY 2022-23, staff recommends the following plan for phased compliance with the SB 1383 procurement requirements:
• Prioritize compost application within the city, as this aligns with the City’s Climate Action and Resiliency Plan GHG reduction action for sequestration.
• Receive 1,000 cubic yards of free compost provided by ACI, per the franchise agreement, and apply to 10 athletic fields. This assumes ACI is able to supply a quality compost eligible for this use.
• Purchase 1,000 cubic yards of high-quality compost and apply to 10 additional athletic fields.
• Utilize 37 cubic yards of free compost from ACI for public giveaway
• Utilize SB 1383 grant funding to purchase additional compost for public giveaway and explore agreement with Alameda Point Collaborative Farm2Market and Bay Area Makerfarm for distribution at the community compost hub.
• Rely on an estimated 150 cubic yards of material procured by StopWaste on the City’s behalf for application on rangeland and distributed through pilot community compost hubs
• Identify additional green spaces within the city for compost and mulch application (including Public Works-managed areas and private land).
• Continue to monitor legislation and emerging markets that may affect SB1383 implementation.
The proposed implementation plan satisfies approximately 24% of the City’s procurement target. 2,000 cubic yards of compost can be applied by existing personnel resources and will demand an estimated 400 staff hours. Additional staff or contractual resources will be needed to apply more than 2,000 cubic yards of compost annually. Given the free 1,000 cubic yards of compost provided under ACI’s franchise agreement, an additional 1,000 cubic yards will be purchased. Based on staff’s research of the current market, $50/cubic yard is an estimated maximum, however, the rate per cubic yard could fluctuate as demand may outpace supply. Staff proposes this estimated $50,000 expense in FY 2022-23 be paid for with the one-time CalRecycle grant for SB 1383 implementation funds, as further discussed in the next section.
For the City to fully implement the SB 1383 procurement requirements, an additional 7,383 cubic yards must be procured. Staff will continue to identify green spaces within the city for compost or mulch application and will consider material and application costs. Full implementation may also rely on direct service providers utilizing material on the City’s behalf and/or procurement of material for use outside of the city boundaries. Staff will continue to monitor and participate in development of these emerging programs.
Budget Adjustment to Receive and Allocate SB 1383 Grant Funds from CalRecycle
In April 2022, the City was awarded a one-time SB 1383 Local Assistance Grant from CalRecycle for $115,019. Staff are seeking City Council approval to allocate the grant funding to programs in Public Works and ARPD for SB 1383 implementation. Staff’s proposed spending plan includes: $40,000 for equipment for compost/mulch application, $25,000 for professional services (education and outreach and compost for public giveaway), and $50,019 towards direct procurement of compost and/or mulch for application on city-owned green spaces. Similar to other CalRecycle funding, the City will be able to propose modifications to the expenditure plan over the grant term ending May 2024.
Staff is recommending that the City Council adopt the Budget Resolution associated with this item and utilize one time grant funding from CalRecycle to help cover costs for equipment and additional compost or mulch as needed for FY 2022-23. This would include the cost of the actual materials as well as equipment associated with application.
Future SB 1383 Procurement Funding
There are various efforts advocating for increased State funding for SB 1383 implementation and adjustment of the procurement requirements. The League of California Cities, along with Californians Against Waste and Rethink Waste, are sponsoring a bill (Assembly Bill 1985) designed to assist jurisdictions in complying with the procurement requirements. As of May 2022, the bill would create an online database of entities that produce SB 1383-eligible products. According to StopWaste, the author and co-sponsors of the bill intend to add provisions in the measure to support local governments in meeting the SB 1383 procurement requirements. StopWaste’s adopted position of AB 1985 as of March 2022 was “support in concept.” Staff will continue to monitor these efforts as they may impact the City’s compliance plan in future years.
Full implementation of the SB 1383 procurement requirements will require a sustainable funding source for material and personnel. If ample green space does not exist in the city to apply the full amount of compost or mulch required to fully comply with SB 1383 procurement requirements, the City may need to depend on direct service providers (entities that procure material on the City’s behalf) and/or procure material for use outside of the city boundaries.
Over the next year, market conditions and compliance expectations are likely to change. This will inform the City’s plan for full implementation of SB 1383. Staff will return to the City Council with options for future funding beyond the proposed plan for FY 2022-23. Funding options for full implementation could include revenue collected through ACI’s rate structure, the General Fund, and possibly others.
ALTERNATIVES
• Approve approach for FY 2022-23 compliance and adopt resolution to receive and allocate SB 1383 grant funds as proposed.
• Adjust approach for FY 2022-23 compliance and allocate SB 1383 grant funds. This may involve an increase or decrease in the amount of compost procured. If additional compost is directed to be procured and applied, a funding source needs to be identified.
FINANCIAL IMPACT
The proposed FY 2022-23 budget amendment increases the Integrated Waste Fund revenue and expenditures by $115,019 to receive and expend the awarded grant funds for SB 1383 implementation.
Fiscal Year 2022-23 Budget Adjustment - Allocation of SB 1383 Grant Funding
|
Department |
Org Number |
Grant Project |
Revenue Increase |
Expenditure Increase |
Object Code |
Purpose |
|
Public Works |
262G2121 |
G2121 - Public Works |
$25,000 |
$25,000 |
52010: Professional Services |
$25,000 for Education & Outreach & Compost for Public Giveaway |
|
ARPD |
262G2121 |
G2121 - Recreation & Parks |
$50,019 |
$50,019 |
51090: Grounds Maintenance |
$50,019 for Procurement of Compost & Mulch |
|
ARPD |
262G2121 |
G2121 - Recreation & Parks |
$40,000 |
$40,000 |
81020 Field Equipment |
$40,000 for Equipment for Compost application |
|
|
|
TOTAL |
$115,019 |
$115,019 |
|
|
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Climate Action and Resiliency Plan (2019), the Zero Waste Implementation Plan (ZWIP) (2010), and the ZWIP Update (2018).
ENVIRONMENTAL REVIEW
In accordance with California Environmental Quality Act (CEQA), this project is categorically exempt pursuant to CEQA Guidelines Section 15308, Actions by Regulatory Agencies for Protection of the Environment. SB 1383 is intended to guide the City in the reduction in greenhouse gas emissions, thus protecting the environment.
CLIMATE IMPACTS
The City’s Climate Action Resiliency Plan (CARP) assumes full implementation of the ZWIP Update to achieve the City’s greenhouse gas reduction goals. In addition, the 2021 CARP annual report identifies compost and mulch application as a priority for 2022 to reduce methane emissions, sequester carbon, and build heathy soil.
RECOMMENDATION
Receive update on Senate Bill 1383 procurement compliance and approve approach for fiscal year 2022-23 compliance; and adopt a resolution to amend fiscal year 2022-23 budget to receive grant funds from the California Department of Resources Recycling and Recovery.
Respectfully submitted,
Erin Smith, Public Works Director
By,
Angela Vincent, Program Specialist II
Financial Impact section reviewed,
Margaret L. O’Brien, Finance Director
cc: Dirk Brazil, Interim City Manager