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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Department of Public Works
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DATE:
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March 3, 2010
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BOARD MEETING DATE:
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March 23, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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James C. Porter, Director of Public Works
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SUBJECT:
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Assignment of the Franchise Agreement for Collection Services in County Service Area 8 from Allied Waste Industries, Inc. to Republic Services, Inc.
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RECOMMENDATION:
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Adopt a resolution consenting to the assignment of the franchise agreement for garbage and recyclables collection services in County Service Area 8 (North Fair Oaks Area) from Allied Waste Industries, Inc. to Republic Services, Inc.
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BACKGROUND:
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The County initially became a member of the South Bayside Waste Management Authority (SBWMA) JPA due to the County’s grant of a franchise for garbage and recycling collection services in County Service Area (CSA 8).
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In January 2000, the County entered into the CSA 8 collection service franchise agreement with Browning Ferris Industries (BFI). At the same time, BFI became known as Allied Waste Industries, Inc. (Allied), so a formal assignment of the agreement to Allied was not necessary. That agreement will expire on December 31, 2010, and collection services will thereafter be provided under a new franchise agreement with Recology.
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In late 2008 Allied notified SBWMA staff of a proposed merger between Allied and Republic Services, Inc. (Republic). The formal merger between these two parties occurred on or about December 5, 2008, and following resolution of legal issues, the merger became final in late 2009. The merger has been transparent to the customers of CSA 8 as the collection of garbage and recyclables continues to be performed with equipment bearing Allied’s name.
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Under the merger, Allied has become a wholly-owned subsidiary of Republic. Under the franchise agreement, this merger is an assignment, which requires the County’s consent.
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DISCUSSION:
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The franchise agreement states that the contracting agency’s approval is required for assignments. In light of the upcoming transition from Republic to Recology, it will be beneficial to formalize the transition from Allied to Republic. Therefore, SBWMA has recommended that all of its member agencies consent to this assignment.
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The franchise agreement provides that the County may require Allied to provide proof that its assignee is qualified to provide the contract services, and can fulfill the terms of the franchise agreement in a timely, safe and effective manner. In this case, since Republic is actually the new parent company of Allied, which has been providing the services for ten years, there would be no apparent benefit in requiring this additional proof. We believe that modification of the required Guarantee and a Performance bond will provide the necessary assurances, and that no other changes to the franchise agreement are necessary or will be made.
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County Counsel has reviewed and approved the Resolution as to form.
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Approval of the consent to assignment of this franchise agreement from Allied to Republic will contribute to the Shared Vision 2025 outcome of an Environmentally Conscious Community by continuing to provide garbage and recyclables collection service in CSA 8, which supports compliance with the California Integrated Waste Management Act of 1989 through diverting recyclable materials from landfills and preserving landfill capacity.
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FISCAL IMPACT:
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Assignment of the franchise agreement to Republic has no financial implications.
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There is no impact to the General Fund.
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