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HomeMy WebLinkAboutCity of Diamond Bar WM Letter Response 1.19.2021 Final-signed (002) January 19, 2021 Via Electronic Mail Mr. Daniel Fox City Manager City of Diamond Bar 21810 Copley Drive Diamond Bar, California 91765-4178 Re: Waste Management’s Response to City of Diamond Bar’s January 7, 2021 Correspondence – Force Majeure Notice Due to COVID-19 and Resulting Declarations of Emergency and Executive Orders Dear Mr. Fox: On behalf of USA Waste of California, Inc. (Waste Management), this letter responds to the City of Diamond Bar’s (City) correspondence dated January 7, 2021. The speed with which the COVID-19 is ravaging our communities has forced the State and local governments to issue sweeping Stay-At-Home orders and directives aimed at preventing the spread of the coronavirus including quarantine and isolation requirements for all workers. Waste Management has made every effort to provide essential services throughout the global COVID-19 pandemic while simultaneously complying with these orders, vital to protecting our employees and the communities in which we serve. In this regard, we have implemented strict screening protocols, social distancing, mandatory use of masks, regular cleaning and disinfection, testing, remote working, etc. As of January 19, the County of Los Angeles has over 1 million COVID-19 cases and nearly 14,000 deaths and daily counts are shattering prior records. In spite of our significant efforts, the COVID-19 pandemic has unfortunately struck our staffing levels both in the field and in customer service. We have been forced to immediately implement modifications to our service – specifically, alternating recycling material and green waste collection service – to avoid interruption of essential trash collection and disposal services. This situation is not unique to Waste Management and, in fact, Waste Management has taken less drastic steps than those service modifications authorized by the County of Los Angeles or implemented by other haulers in the region. Indeed, the County of Los Angeles, recognizing the serious impacts caused by the pandemic to waste hauling companies, has authorized postponement of certain services such as cart exchanges until at least July 1 and permitted: • 3-week delay in Bulky Item collection • Extending collection hours to 8:00 p.m. • Commingling of trash, green waste and recyclables. The County Public Works has taken these necessary steps in response to these extraordinary times in order to support the industry in providing continued essential waste collection services. WASTE MANAGEMENT 9081 Tujunga Avenue Sun Valley, California 91352 (800) 926-9693 Customer Service (818) 252-3252 Customer Service (818) 252-3247 Fax Mr. Daniel Fox January 19, 2021 Page 2 As I am sure you can appreciate, the operational change – alternating weekly recycling material and green waste service – we implemented to accommodate for our serious COVID-19 staffing impacts has far less impact on the City and its residents than what has been deemed appropriate in these times. Contrary to the City’s assertion, Waste Management’s plan to temporarily alternate recycling material and green waste services does not amount to “unliateral” actions that are somehow in default of the Agreement. Section 11.4 of the Agreement expressly excuses performance due to force majeure events. The City fails to cite the entire provision at issue and instead focuses on language that appears to support the City’s position, but actually does not. First, the COVID-19 pandemic indisputably qualifies as a “catastrophic event.” Second, the next paragraph makes it clear that Contractor’s performance is still excused even if other services “such as . . . electricity, gas, water or commercial solid waste collection services” are not disrupted. The relevant provision which was overlooked states: Notwithstanding the foregoing, however, if Contractor is excused from performing its obligations hereunder for any of the causes listed in this section, City may contract with another provider to perform all or part of this Agreement until such time Contractor is able to perform. If Contractor is unable to renew its performance of this Agreement for a period of thirty (30) days or more, where the City is not significantly impacted by the catastrophic event, City shall nevertheless have the right, in its sole discretion, to terminate this Agreement by giving ten (10) days' notice. Based on this provision, the City cannot insist on performance during such a catastrophic event, but it can try to obtain substitute service until the Contractor “is able to perform.” Moreover, the City’s position that Waste Management is precluded from asserting force majeure due to the catastrophic COVID-19 pandemic because “electricity, gas or water” continue to be delivered flies in the face of logic and would render the provision superfluous, a result loathed by courts. The delivery of electricity, water or gas simply does not require staffing (i.e., drivers). In any event, those utility services have in fact been modified and limited to the extent personal visits are required to a customer’s residence. In sum, there is no question that the force majeure provision has been triggered. Finally, Waste Management’s contract with the City requires Contractor to “comply with all applicable laws and regulations of the United States, the State of California, and any federal, state, regional or local administrative and regulatory agencies, now in force and as they may be enacted, issued or amended.” Contract at Section 12.02. Waste Management is doing exactly that. Indeed, as noted in our previous correspondence, Waste Management has taken swift and aggressive action to comply with federal, state and local mandates and directives in connection with the current public health crisis, including the recent quarantine, isolation and testing protocols and procedures mandated by CalOSHA. Waste Management cannot be penalized for complying with laws that then result in a temporary change in services. We are disappointed that the City has chosen to challenge and threaten Waste Management with default. Our teams are working around the clock to meet the challenges of the COVID-19 pandemic. The City was notified in March and recently by telephone and email on December 24, 2020, that certain services would be altered due to this force majeure event. These notifications were prompt and timely under these circumstances where material changes in our operating conditions are occurring daily. With regard to notifications to customers, as our PSS Manager explained we did commence notifications to customers regarding the alternating recycling material and green waste service; however, we had significant technical difficulties that have since been resolved. In addition, as we have informed the City, our customer service center has reduced staffing due to impacts from COVID-19. We look forward to and urge the City to partner with us through these unprecedented times to best serve the community and protect the health and safety of its residents. Mr. Daniel Fox January 19, 2021 Page 3 The following responds to each of your specific requested actions: 1. Submit a formal operational plan with requested service changes, necessary metrics or other conditions that need to be achieved to restore full services, and a planned end date. Attached to this letter as Exhibit A please find the requested operational plan. With respect to the City’s request that we provide an estimate of when regular collection operations will resume, we have no reasonable way to predict that at this time. However, we will provide the City with prompt notice once the decision has been made after the staffing impacts from COVID-19 have ended. 2. Identify an appropriate credit for affected customers and identify how that will be implemented. We are unable to offer a credit for the temporary imposition of alternative recycling material and green waste service. While such service is alternating, we are still collecting and processing the same volume of recycling material and green waste and, to mitigate any impact to the customers, we have also agreed to accept bagged material, which requires extra work. Moreover, this modification in service has not resulted in cost savings. Throughout this pandemic, our staff has worked 24-7 and has made every effort to deliver essential services. Indeed, Waste Management has incurred substantial additional costs in responding to this pandemic including costs for overtime, equipment, supplies, enhanced cleaning operations, etc. Moreover, because most people are at home, the amount of material collected for processing and disposal has substantially exceeded prior years. For example, from March 19 through December 2020, we collected an excess of 12,000 residential tons from San Gabriel Valley cities as compared with collections at the same time in 2019. Also, we have collected an additional 7,687 Bulky Item pickups (including 1,363 additional Bulky Item pickups in Diamond Bar) as compared with 2019 Bulky Item pickups. Waste Management has absorbed all of these unforeseen and extraordinary costs. Thus, while we appreciate the City’s request, we cannot provide the requested credit. 3. Provide written notification to all customers with information on service schedule modifications and any fee credits to be offered once the operational plan has been approved by the City. We are preparing and printing postcards to deliver to the customers regarding the temporary change in service due to the COVID-1 pandemic. We shared the draft postcard with the City on January 14. With the City’s approval of the content, we will mail these postcards to customers on or before January 25, 2021. Draft copies of this postcard were shared with the City on January 14, 2021. In addition, we contacted all of the HOAs in Diamond Bar, where residents do not have individual accounts, and developed a strategy with each HOA to provide schedule information to their residents. 4. Provide weekly updates to City Staff on service impacts and adherence to the approved operational plan. Weekly updates may be held in coordination with other San Gabriel Valley cities that are experiencing similar service modifications. We look forward to our weekly meetings, which will be coordinated with other San Gabriel Valley cities. Under the circumstances of the current crisis, which is unprecedented in scope and severity, we urge the City to work with us as partners to get through this State of Emergency. We look forward to Mr. Daniel Fox January 19, 2021 Page 4 working with the City and achieving our common goal of providing essential collection services to maintain a safe, healthy, and sanitary environment within the City while also protecting the residents and our employees from this pandemic. Please let us know when you would like to have a conference call regarding the above matters. Very truly yours, USA WASTE OF CALIFORNIA, INC. By: _____________________________ Doug Corcoran Vice President Month May Jun Jul Aug Sep Oct Nov Dec Jan Days Lost 17 40 57 31 27 32 24 125 132 Confidential –Business Proprietary/Trade Secret Information – Not a Public Record – Not to be Disclosed to Public Projection: Return to Weekly Collection December lost work days were up 420% from November January lost work days are trending higher yet with a projected 450% increase over November Quarantines / positvity rates in the general population are not trending better, they're trending worse. We tend to see and fall in line with these trends After we have no more than 20 work days lost over a four-week period, then recycling and green waste operations will return to weekly collection. This is designed to avoid a scenario where services are resumed and then interrupted again due to COVID-19 impacts. As discussed, we will hold weekly progress meetings with all of our cities to provide updates to lost days (weekly / cumulative). Once stabilized, we will work togehter to notify customer of our return to normal schedule. 0 20 40 60 80 100 120 140 May Jun Jul Aug Sep Oct Nov Dec Jan Scheduled Work Days Lost EXHIBIT A