RESOURCE MANAGEMENT AGENCY – M. CHAMBLESS, INTERIM RMA DIRECTOR

Receive presentation from VICO Infrastructure Company on a conceptual proposal for SB 1383 compliance and enter into a Project Development Agreement (PDA) with VICO.

SBC FILE NUMBER: 142

SB 1383 Compliance 

In September 2016, Governor Edmund Brown Jr. set methane emissions reduction targets for California (SB 1383 Lara, Chapter 395, Statutes of 2016) in a statewide effort to reduce emissions of short-lived climate pollutants (SLCP). The targets of SB 1383 are:

·       Reduce organic waste disposal to 50% by 2020 and 75% by 2025.

·     Edible food recovery of 20% for human consumption of currently disposed surplus food by 2025.

To meet the state-wide goals of SB 1383 and its January 1, 2022 compliance implementation deadline, the Department of Resources Recycling & Recovery, or CalRecycle, has established numerous organic waste disposal program requirements impacting municipal jurisdictions, generators, processors, and haulers. Some of the program requirements include:

·       Organics infrastructure planning

·       Providing organic waste collection service to all residents and businesses;

·       Establishing an edible food recovery program that recovers edible food from the waste stream;

·       Conducting outreach and education to all affected parties, including generators, haulers, facilities, edible food recovery organizations, and county and city departments;

·       Procuring recycled organic waste products like compost, mulch, and renewable natural gas (RNG);

·       Inspecting and enforcing compliance; and

·       Maintaining accurate and timely records of compliance. 

CalRecycle encourages early compliance and urges jurisdictions to meet the State’s deadline under SB 1383 to avoid the high penalties associated with non-compliance. Efforts have been made by many local governments and associations encouraging CalRecycle to delay implementation of SB 1383 due to impacts of COVID-19 on jurisdictions; however, the state has not changed the deadlines contained within the regulations.

To meet the state-wide goals of SB 1383 and its January 1, 2022 compliance implementation deadline, CalRecycle has established numerous organic waste disposal program requirements impacting municipal jurisdictions, generators, processors, and haulers. Under SB 1383, CalRecycle has the authority to financially penalize non-compliant jurisdictions up to $10,000 per day. 

SB 1383 Rural Exemption for the San Benito County Integrated Waste Management Regional Agency

Per Section 18984.12 (c) of the SB 1383 regulations, a qualifying rural county may adopt a resolution exempting the county from specific SB 1383 requirements based upon findings as to the purpose of and need for the exemption. The San Benito County Integrated Waste Management Regional Agency members qualify for the exemption if the rural jurisdiction (the County) receives delegation authority to apply for the exemption on the Agency members’ behalf, which has previously been granted. On October 26, 2021, the Board of Supervisors approved and affirmed a resolution that allows the County as Lead Agency to apply for a rural exemption on behalf of the Regional Agency members for SB 1383.

The rural exemption, if granted by CalRecycle, would exempt the San Benito County Integrated Waste Management Regional Agency members from the mandatory organics collection requirements and other associated requirements, until December 31, 2026 or until San Benito County reaches a population of 70,000. The rural exemption would not grant exemption to the San Benito County Integrated Waste Management Regional Agency members from all the requirements of the law.

SB 1383 Organics Infrastructure Planning

At present, there is a need for additional infrastructure and planning within San Benito County for diverting and processing organic wastes from landfill to fulfill the obligations of SB 1383. Existing practices with respect to how waste is collected, diverted, and processed prior to disposal are currently in flux as the waste disposal industry is in the process of adapting to meet the changed market conditions presented by the requirements of SB 1383. There are many different approaches being used throughout the State of California, from the introduction of organics dedicated waste collection bins at individual residences to sophisticated centralized material segregation and processing facilities. This high variability in waste flow and composition from location to location yields a complicated environment for the development of infrastructure that will completely fulfill the long-term needs mandated by SB 1383 at this time. Accordingly, this proposal assumes that SB 1383 infrastructure will be developed using a phased manner in terms of scope and scale to accommodate the transitional nature of waste collection, diversion, and processing in the region.

Pursuant to the requirements of SB 1383, VICO Infrastructure Company (VICO) presented a phased project plan to the San Benito County Integrated Waste Management (SBCIWM) Local Task Force in October for the development and operation of proposed infrastructure for the diversion and processing of organic materials that are currently disposed of at the John Smith Road Landfill (JSRL). In time, it is envisioned that the phased project infrastructure will eventually include: a waste transfer station, anaerobic digestion receiving/processing facility(s), digester and landfill gas processing and distribution facility(s), etc.  The proposed SB 1383 infrastructure would be developed, funded and operated as a service for the SBCIWM Regional Agency by VICO Infrastructure Company (VICO). The Project will include a revenue sharing mechanism with the SBCIWM Regional Agency that will be developed in coordination with SBCIWM wherein a portion of tipping disposal fees and renewable natural gas and/or renewable energy would be shared with SBCIWM. 

Please refer to the attached VICO proposal letter and Project Development Agreement (PDA) for an overview of the Project.

Project Development Agreement (PDA)

The Project Development Agreement (PDA) proposed by VICO provides a three-step approach to the development of Phase 1 (Waste Transfer Station) the Project. Phase 1 will focus on a new Waste Transfer Station to be located in the general vicinity of the City of Hollister’s Water Reclamation Facility (WRF). The new Waste Transfer Station will provide much needed infrastructure to consolidate the number of waste haul trucks headed to the landfill through an already congested urban center (a key concern of the community associated with the proposed expansion of the JSRL) and provide a central location for organics receiving, diversion and processing in the future once the market has adjusted to the changes in waste disposal practices mandated by SB 1383.  

At each Task, SBCIWM will have the opportunity to review and comment on the proposed design and business model.

1.     Task 1 involves a Project Evaluation over a 90-day period, including a proposed cost and schedule for Task 2 (preliminary design of Phase 1 of the Project). Upon completion of Task 1, and assuming SBCIWM has continued interest in the Project, following authorization by SBCIWM, VICO will proceed with Task 2.

2.     Task 2 involves a preliminary design for Phase 1 of the Project. In the event SBCIWM decides not to proceed with the Project, SBCIWM would refund VICO for the Task 2 effort and all work product would be transfer to SBCIWM.

3.     Assuming SBCIWM has continued interest in the Project, and following an executed agreement between SBCIWM and VICO, VICO would proceed with the development, funding, construction and operations of Phase 1 of the Project. 

Phase 2 of the Project (Advanced Waste Processing Facilities) would be developed at a later date following a more detailed characterization of waste flows potentially directed to the Waste Transfer Station and once the transition of the waste organics market has developed further as discussed above.

VICO & Conceptual Proposal for SB 1383 compliance

VICO is an outcome-driven, sustainable infrastructure company. In partnership with The Carlyle Group, they devote capital towards sustainable infrastructure that delivers positive outcomes for the environment, clients, and investors. They invest in innovative technology and environmentally-friendly practices that reduce water and energy use, promote recycling, and decrease our clients’ carbon footprints. 

San Benito County Integrated Waste Management Regional Agency 

Per the Joint Power Integrated Waste Management Agreement signed in 1995 between the County of San Benito, the City of Hollister, and the City of San Juan Bautista, the County is the Lead Agency of the Regional Agency and staffs/manages the Integrated Waste Management programs to meet waste and recycling state mandates and reporting requirements for the Regional Agency members. 

N/A. A presentation by VICO was provided to the Integrated Waste Management Local Task Force in October of 2021 regarding the conceptual proposal and project development agreement for discussion. Another presentation will be provided to the Landfill Committee on November 19, 2021 for discussion.