Recommendation to authorize City Manager, or designee, to execute an amendment to the Southeast Resource Recovery Facility Operations and Maintenance Agreement No. 23336 with Covanta Long Beach Renewable Energy Corporation (Covanta), in an amount not to exceed $8,700,000, to provide for capital investment by both the City of Long Beach and Covanta for facility equipment replacement.  (Citywide)
Councilwoman Mongo. Motion carries. 21 please report from Energy Resources. Recommendation to authorize City Manager to execute an amendment to the Southeast Resource Recovery Facility Operations and Maintenance Agreement number 23336 with Covanta Long Beach Renewable Energy Corporation in an amount not to exceed 8,700,000 to provide capital investment for facility equipment, replacement city wide where. We have some some interests on the dice on this issue is there is a report that we want to report, Councilmember. Okay. So we are going to follow up on this. Sure. We have Bob Dole and Charlie Trump. Yeah. The furthest to Charlie trip. Our manager. Of surf. Mayor Garcia, members of the City Council under the current operations and Maintenance Agreement Surface operated by Covanta Energy. And this agreement goes until July one, 2024. Covanta is the world's largest operator of waste energy facilities in this country and also abroad. In 2017, Covanta notified the city that equipment in the facility had reached its end of operational life. The city contracted with another engineering independent engineering company named HDR to perform a facility assessment report which concurs with Covanta notification. The amendment arranges for a total investment of $13.7 million for the replacement of 30 year old equipment in the facility. That has reached the point where it may fail without the investment. The equipment, which includes things like conveyors, motors, control systems, could fail and would cause facility availability to be compromised. What that means is we would have to shut down and repair the facility with unscheduled outages instead of a planning and and doing it in a scheduled way. Under the terms of the amendment, Covanta will invest $5 million and the city will invest $8.7 million, which total the 13.7 total investment. In the spirit of collaboration. This proposed amendment will also allow for those seeking opportunities to accept higher value waste. This is just to to improve facility revenues going forward, and it also secures a more stable operation until 2024. That concludes my report, and I'd be happy to answer any questions you may have. Yes. Mr. Speaker. Oh, excuse me. Very public comment because. Come down. Yes. Hello. My name is Whitney Amaya, and I'm here as a representative of Eastside Communities for Environmental Justice, as well as a constituent of District seven. I asked the City Council members do not approve the recommendation to invest $8.7 million, not extend the contract of the Southeast Resource Recovery Facility. The incineration of waste releases thousands of pollutants that contaminate the city of Long Beach. Among those pollutants are dioxins, which, according to the EPA, are highly toxic. And can cause cancer. Reproductive and developmental problems and damage to the immune system. As a resident of West Long Beach, which has an 85 to 100% pollution burden score, according to Callan via screen, supporting this recommendation would be a blow to communities. There are so many parallels between the Southeast Resource Recovery Facility and the Commerce Refuse To Energy Facility, which was decommissioned June 30th of this year. The Southeast the Southeast Resource Recovery Facility is an expensive facility to operate, and with the power purchase agreement with Southern California Edison coming to an end, it will face a loss in revenue when faced with a similar situation, the commerce incinerator increased tipping fees. However, it was not enough to sustain operations. The City of Long Beach should instead begin to invest in zero waste strategies, especially when more than half of the waste being. Sent to the Southeast Research Recovery Facility can be recycled, composted or reused. I have these factsheets also. Hopefully councilmembers can look over in regards to incineration. I don't have enough copies for you all so I can provide copies tomorrow. But if you guys do want to take a look over and share, I have some copies here. Thank you. Thank you. But. Good evening. Mayor and council members. My name is Kobe Sky. I'm speaking on behalf of the Los Angeles County Department of Public Works, where I serve as a principal engineer on our Environmental Core Service area. I wanted to speak in support of this item. For a decade, surf, as it's affectionately known, has helped Long Beach divert waste from landfills and generate electricity to power homes and businesses. This is an important service. And it's good to see that the city is. Looking to continue to invest in. Improvements to surf. Which over the years has continued to improve its operations, reduce the impact to the community, and serve a very important resource not just. For the city of Long Beach, but for the region. For that reason, we hope that the city. Will move forward. With this item to continue this important capacity and have it available for the city and for our neighbors. And the county would be happy to provide assistance or technical expertize in terms of solid waste if it's helpful to the city. Thank you. Thank you. Speaker, please. To Mr. Mayor and members of the Council. My name is Angela Logan. I am a fourth District resident and a member of our Communities for Environmental Justice. I want to urge the Council to pause on spending $8.7 million on a facility that is antiquated, the industry is adequate, and the approach itself in addressing waste is what we look at is, I think, in the past. As you heard the first speaker mentioned, the City of Commerce Refuge, the energy facility, which is also a waste to energy facility, just folded because the feasibility and economics of it didn't pan out. And so it folded. The risk here is that the same thing may be in front of us here at the surf facility. And after investing $8.7 million into that, if there face closure, that would be an appropriate use of our resources. To say that $8.7 million is a significant amount of money to invest in something at such high risk, something that the amount of resources that we can use for libraries, for the police, for fire, for all these vital, vital issues that we have just heard you talk about earlier today during the budget discussion. I want to ask the council to really consider this issue pause, take time to really study these particular issues that are and that we should be considering that if you don't have all the answers to these questions, that you should take time to make a really well informed decision on spending that amount of money. The questions I would pose to you are if you are not clear on the implications to investing this money into this facility as it relates to. The California Renewable Portfolio Standard program, the change in the power purchase agreement. The length and terms of the existing contract, and the existing lifespan of the equipment in question. If you're not clear on all those parts and pieces. Making the decision on spending $8.7 billion tonight would be poor decision making. So I want to urge you to pause, to take time to study this issue closely and make sure that you are looking out for the health and well-being of your residents, both financially and within the environment. Thank you. Thank you. And our last speaker. And then we'll go to the council. Dr. Mayor. City Council. City Clerk's Department, City Managers. Department, city attorney. Thank you for allowing me to speak. My name is Daniel Greenwald. I live in Sydney to this. Item. The subject is very important to me. The whole reason I am here. The reason I live here in Southern California is because my father found a job here in the ports of Long Beach. And then he spoke to me and I live my father's legacy where as. He told me that where he worked in the ports, it was a. Zero waste facility. And by that I mean there was no waste. But then he told me that the the waste there was burnt. At Surf. I couldn't believe it. They burn trash here in the ports. It didn't make sense to me. But now we have mercury, ammonia, chlorine led zinc. Everything here because they burn trash here in Long Beach. It's ridiculous, and dare I say shameful that this happens. The fact that we're putting $8.7 million into sustaining this is shameful. We should be putting $8.7 million into. Closing the facility and moving towards a more sustainable green, something where fresh air happens and where we burn trash and breathe these emissions. Additionally, regarding the staff's economic analysis, the service revenues will drop from 25 million to 10 million, and that's based on the assumption that people will pay more for tipping fees, etc. and elsewhere. The city is currently researching and looking into how we can make our revenues green and efficient. Pardon me. This is. So important to me. I'm just at a loss of words that we would put more money into burning trash and not putting into green and sustainable things. I'm sorry. No. Thank you, sir. Let me go back with. There's a motion in a second to authorize this agreement. Councilmember Pearce. Thank you. I want to thank our committee members for staying late. I know we've got a healthy agenda for staff. I want to thank you for the presentation, but I know that this item was slotted to be last week. We held it off so that we could all have conversations and hopefully have a full presentations. I'm was hoping for a more full staff presentation. I know it's late, so I'm going to run through a couple of questions to try to tease out some answers for my for my colleagues. The first question I have is regards to the the money that we would put through is only to get us to 2024. Would the facility be viable after that date? So the facility to continue to run part of the independent engineering study an analysis we did we would have to invest additional funding if we wanted to operate past 2024. This funding is needed to continue to operate the facility until 2024, and this acts as a bridge to get us through to whether there's another alternative technology at that point or another way to go for waste diversion. One of the one of the great things about surf is it really is a a environmentally responsible way for handling waste management. It actually reduces greenhouse gas emissions when compared to landfilling and is also employed. This technology is employed worldwide and specifically required by the European Union to handle solid waste where they don't allow landfilling in Europe. Okay, I've got a few other questions, but I want to let me back up a little bit. I think I want to just paint the tone. I think the surf plan has been a hot item for a long time. We know that it is a discussion where a lot of community members, both labor versus environmental, through the port. The discussion has been what are we doing with surf? We know that there are options to come in and do anaerobic digestion and several other options that could be done there. But we have not had that conversation at council. And so for me, the reason why last week I asked to pull it was because I felt surprised by the dollar amount and not being able to have that conversation yet. And by saying in your staff report that it says that the economic impact was unknown of what the future would be. And so for me, that raised another. But I had my notes on my laptop. My laptop died because I love my charger at home. So just bear with me and how choppy my notes are. Okay. But I think for me, the question for us is how do we move forward with an energy efficient, an option for us to have a community choice in where energy comes from? And does it make sense for us to invest this type of money for a short term goal when we don't have a feasibility study or a plan for that next step? So my next question is for to highlight for the community members to the funding that's coming from this. Is that coming from the general fund or from surf? The funding so far operates under an enterprise fund and the funding for the the the work and capital replacement work that's required is coming from that fund. It's not coming from the general fund, nor would it come from the general fund. We're a self-sustaining fund in the city. And as a matter of fact, in the past we've actually had that revenue and have contributed to the general fund over the life of the facility and over $70 million. Right. And familiar with the past and knowing that there have been changes at the state level that recyclables are different. And so what would it cost for us to do a feasibility study on the options for a sort of plant moving forward? Well, currently the options are landfill and you could handle greenways through or food waste through an anaerobic digestion system if you could find it. But that's a very minimal amount of the solid waste which needs to be handled for the city a size of 500 or 500,000 people. So in putting in a full scale facility. Comparable to surf. You would you would be looking at a that's a almost an impossible task from the standpoint of the cost surf facility nowadays with the same pollution control equipment would cost half a billion dollars. Our our facility out there is an asset to the city and still has usable life in it. The amounts that we're actually investing is very small. When you look at an investment to replace the whole facility in the neighborhood of of $500 million is small. As far as a feasibility study to do that, to do that type of report that's why we we handled ah we we hired HDR last year to give us different scenarios. How much will we need to invest in the facility to run to 2024? How much we would need to to invest in the facility to run to 2030 and how much to invest in the facility until 2040. When we use those numbers and we use what our projected revenues were in a proforma to see whether we can afford to actually continue the run and operate the facility and perform upgrades that might be required by law or by regulations. Can I ask our director what it would look like to get an economic impact report for Cerf in the next year? Because we don't have I mean, it's a one and a half page report that we have in front of us. Councilmember We can certainly do that. We could use the report that Mr. Tripp just talked about and expand upon that and provide you something with the next year that talks about all the viability of surf and where it's gone, where it's been, and what alternatives are. We can certainly do that. And that is the conversation I would love to have. Let me also ask, is my understanding that these upgrades do not fall within the project labor agreement that we have in the city? That's correct. These are not this is not a construction project. Okay. Just simply because it's not a construction project, even though the. Okay. Let me ask one last question. Is there. Excuse me. I want to hear from my colleagues and then I might have one other comment. So go ahead. Okay. Thank you, Councilwoman Pryce. So I seconded the motion to approve the recommendation, which is my position would be some. I'm hoping that we're still going in that direction. Okay, good. So is it possible for us to maybe get annual reviews or updates on how the facility is doing? Absolutely. Nope, no question about that. We have those and we can deliver those to you right away. Yes. Yeah. We meet for 30 minutes. We do make those available through our JPA agreement. And also, we we are required to do a a revenue report for our partners, the Los Angeles County Sanitation District. So we do do those annual reports. That be great. And that way we can continue to monitor the progress, opportunities for improvement, etc., as we continue the discussions. But that's really all I have to say. Thank you. Thank you, Councilman Austin. So I cued up and I'm supportive of the recommendation, I think and I think Sirf is actually a resource for the city. And we've been working on our state legislative agenda for the past four years, at least in Sacramento, trying to get an extension for Cerf, because we recognize it is a benefit. You know, we can have the conversation and debate about the merits of incinerating trash and having minimal emissions versus landfilling. And you know what that does for in the capacity for to landfill trucking trash, you know, 100 miles across the Southern California. And what that does in terms of fuel, I think there are some some some merits to us investing in our surf plant. But also, I'll go a step further, further in saying that I think the life of surf should be a priority of this council to extend it. It pays for itself. It's a it's a self-generating or enterprise fund that now, I think, has has benefited the city tremendously. And it also has the potential to to bring other revenues in and be a resource not only for our city, but but other cities as well. And so when you look at the $8 million talked about, these are not necessarily tax dollars. It's not general fund dollars. These are not dollars that are coming away from services. These are dollars that are generated within surf itself. That Enterprise Fund, and I think is like any other enterprise fund that we have, our port, our airport, allow them not to to to invest in the upgrades. And then we as a council, I think we really need to have the conversation about the really getting behind state legislation to to still extend this facility. So I'll be voting to support. Thank you. And I just want to go to councilman among I know that Councilman Austin is chose to stay let's committee has been working on this issue for years for for many years at the up in Sacramento. I've been there and accompanied him on this very on this very issue as well. So I just want to thank the councilman for I know his constant advocacy on this issue. Councilman committee I cued up because I am 100% in support of Councilmember Austin's efforts in serving on state ledge and extending surf. So far as not only is the pollution of trucking terrible, but the byproducts of surf are so low that my husband volunteers there. So I put my personal family in. Literally, my husband takes actual reference product up to the incinerator and hand puts it into the incinerator. So he's standing in the thick of it on a regular basis, and he's read the reports on what the potential carcinogen options are and all of the specific wipes that they use to keep their employees safe. I mean, it is a safe plant. I am so thankful for the efforts of Councilmember Super and as chair of Surf and of Councilmember Austin of as chair of State Ledge, that we need to do what we can to extend the life of surf. It is the most environmentally friendly option we specifically cover the trash with. Our clippings. This is something that the Department of the Energy Department, under previous leadership, came out and talked about at community meetings about how people are confused often of why they don't have a green burial. And the reason they don't have a green bill is because those green clippings in the burning actually make it more environmentally friendly. And so the detriment to the 710 corridor and the communities that live by trucking and moving trash would actually be much worse off. So thank you, Councilmember Austin, for your overview and thank you for your work on this and also thank you member Councilmember Superhot for your work on this. I think that that there are a lot of misinformation out there and we need to do a better job of informing the community and getting out there and letting them know what a Jewell Cerf is and how many agencies across the region use it and how powerful it is. Thank you. Councilman Pearce. Okay. So a few things. One is I want to clarify that my number one concern is about process and the fact that this council has not had a discussion about surf and the options while Councilmember Austin works at the state level on this. I'm on the surf committee. It's a 30 minute committee and I've asked to help agenda things and I have not had that opportunity. So four and I've only been to one meeting, to be clear. Okay. To be clear, there was one meeting that I that I attended since serving on it. So it's really the fact that there's so much conversation out in my community and my district with the community partners we have with IBEW, with those that came here tonight and that we're not having that conversation here. And so while I am supporting moving this forward, I do want to move it forward, but I want to move it forward with coming back. And that's what we talked about whenever we had our meeting last week was coming back with what is the feasibility moving forward. So if we invest this knowing that it only gets us to 2024, what are we doing to not only get an economic impact because we don't know what the changes are ? This council doesn't know. While it's been good to us in the past, we don't know what those state changes are going to do. We can sit here and rave about how great it is. But we're we're smart council. We need to see some numbers. We need to see some options. And so my request, what I'm asking for is three things. One is that understanding that we want a presentation and we can work on agendas in something on the council side around options but that we come back with a report on possible alternatives to surf after 2024, including potential anaerobic digestion, better source of separation programs, increased reuse and recycling, and any necessary and any necessary other changes that we need to do knowing that this plant creates energy, that we we use that, what are the options? And so how can we get that report in front of us in the next, I'd say year two? Is that knowing that they're not for construction jobs, that there are jobs in there, that I think from talking to folks in labor, that they feel like they would be their skilled workforce, might be a good partner if we could just make sure that staff is working with them to identify any skilled work positions. That would be great. And then I said I had three, but but those are my two. Those are my two. No problem. But we can get all the two. Okay. And so just to clarify, we just we're ready to have the choice around the conversation, around community choice. And that's why this is such a big topic for me. So thank you. Thank you, Councilmember Cipriano. Thank you. First Councilmember Mongo just mentioned the 710 corridor or so since the 605 quarter appearance next to her district. I want to let her know that this land fills up there, too. Actually, I think I think I just want to give Mr. Dao or Mr. Tripp an opportunity to speak on any of the points they're made tonight. Anything else you'd like to say? So how about it? Thank you. No, I'm fine. Thank you. Constable Richardson. Said no. Thanks. Thank you, Mr. Mayor. Just a couple of things. So I think folks would be more comfortable if maybe there was that check in in general about it. You know, I, you know, took the opportunity when I first got on council to go to serve, take the tour, understand the sort of the challenges with serve. And it's very complex. It is it's difficult to explain to the public. And I think the biggest heartburn that I hear consistently is what is the future look like beyond 2024? And, you know, there are a lot of other conversations happening that are around the fringe of what our waste reality of waste looks like and the future of Long Beach, whether it's the conversation about the zero waste and the franchise hauling, whether it's the conversation about community choice. So I believe I don't know that today is the time. I actually think, you know, we take some time and think more fully about whether these, you know, serve funds can help contribute to a broader study about all these sort of outstanding issues. The the other piece of this is I just want to be clear, and I know this question has been asked, but this special fund serve these are resources that are generated from staff, correct? That's correct. So these resources cannot be directed to building to funding public safety or enhancing parks and things like that. Is that correct? That's correct. Okay. After we expend these resources, what is the condition of the survey fund? So the fund is kind of a fluid fund. We keep a fund balance. The current fund balance is 22 million. We are going to spend these resources, but on the same and in the same at the same time, we're going to be also operating and maintaining the facility. So we're going to get revenues during that period while we're replacing and refurbishing equipment so that the fund will will get down, I think, through 2024 to a point of about 10 million, and then it will actually increase again by 2024. So we're not really the point. The reason I ask that is that we're not sacrificing any real opportunity cost to, you know, study or evaluate or have a conversation about the future. What it does is guarantee that time period that we we understood we would have, which was to 2024, it diminishes that risk of, you know, the early termination of the contract and it gives us some time to actually figure it out. And for those reasons, I support this move. Thanks. Thank you. Before I go back around to Customer Austin. I want to just a couple just a couple comments. So I do appreciate the conversation that we're having tonight. I want to just add that there is a really broad, robust conversation around stuff that's happening in Sacramento. We've been working directly with the speaker's office, with Assemblymember O'Donnell and directly with a bunch of our other representatives on this very issue to look at how we both modernize and plan for the future as it relates to surf. I think that there I think everything that was said tonight was is valid in the sense where we know that there's a lot of conversation about what the future looks like of waste and how and how the surf plant adapts to that, because it certainly is something that we are very interested in partnering with the state on . And so there is a there's a larger state effort that that we're engaged with within the governor's office and within our legislative representatives around the surf plant. And I know that while Councilman Austin has been helping kind of lead those efforts for us, I think it's always valuable to have a presentation or a conversation to the remaining members of the council, even beyond the committee and the work that's happening with Councilman Super Anna and the rest of the surf committee. I think if there's interest in that, I think like any topic, we can bring that forward to the council and have a broader conversation. It never hurts to have more presentations, but I do just want to make sure that people are aware that that that the surf plant and its future is, is is a very, very broad conversation happening with a bunch of partners, including the Port of Long Beach and including all of our state representatives. So I just want to leave it there. So I'm glad that we're moving forward tonight, and I appreciate all the all the input. Councilman Austin. I just wanted to clarify a couple of things in terms of the issue coming before the city council. And it has it's it hasn't been you know, we haven't had a detailed, focused conversation on this. But like we mentioned earlier in, the mayor has mentioned as well, this has been a priority for our state legislative agenda for the for the city. And so this council approves that agenda every every year as we the last two cycles or couple of years that we've been in Sacramento, I think are one of our major partners. And Labor has been the IBEW helping to move this bill and to move this agenda because they represent the number of workers who who work at the surf plant. And so I would say most of those jobs are IBEW jobs there. There was it was a covers he requested. And I guess I just want some clarification from from Charlie. Is this more of a maintenance effort than a construction effort? And who will be doing the work? Yes. It's it's not a it's it's a rehabilitation and replacement of of motors and conveyors and things like that. The work will be performed by Covanta staff and then subcontractors during that scheduled outages, which are a week or two at a time. So it's not a and it's and the work is spread over three years. It's not a typical construction project like for City Hall where you bring in a contractor and you build city hall for a three year period. It's just it's it's scheduled maintenance that happens six times a year for about a week, week per year or week at a time. Okay. And lastly, thank you for that clarification. I would I would just encourage, you know, as all the city council members to schedule tours and bring in constituents and anybody interested in learning more about serve to those tours. I think there's a lot to be a lot of information that can be gleaned from that. So. Thanks. Thank you, Councilmember. Constant repairs to last things. I did enjoy my tour when I went, even though I forgot I had a tour that day. Showed up in heels and a dress, still had to wear the paper outfit. So I would love to take some second district residents. The second thing, it's great to hear that we're having all these conversations surface in the second District. And I know it's at the port, but I respectfully ask that this office, my office, be included in those conversations because I do have constituents reach out to me. And if we're having conversations at the state level ongoing and I don't think we would do that for the airport, then we would leave out a councilmember who runs the airport if we're lobbying at the state around that. So I just ask in the future if. If I could be kept in the loop on those so that we can all. Just win out. It's in District one, you know. So Lena has told me that it was. And when we've done the map, she said, and when I met with you guys, it's. In District one. Okay. So I will calm down. It's still really upsetting, but it is the whole time I've been on this council, my conversations with with the staff and with people that call my office have been that it was in my district and that's why I was on the serve committee and not the First District. But forgive me. So at one point we were in District two, we're right on the Ocean Boulevard Saline. I think the last when they redrew the council districts and it caught me a little bit by surprise. Also for 2000, after the census, the new line turned out to be Ocean Boulevard, which flipped us and the one at that. So I'm not absolutely crazy. Okay. So just give me that. Thank you, guys, for all the efforts on this. I know that we're working hard and it has been a hot topic, which is why it's so important to me. Thank you. And Councilman Mongo. I just want to kind of bring something back because one of the things that I get really frustrated with is I know that there are more than a dozen, if not two dozen city staff members here. And I don't agree with. A statement that was made, even though I truly respect the mayor, that every presentation is a good presentation of a council, the council dais. We have business to get done. And these meetings last to 1130 at night and my residents don't want to stay up until 1130 at night to hear their items or to come and speak on items. And I think that we as a council need to do a better job of handling these kinds of things at committee. Specifically, one of the things that I really respect about Councilman Price is how she's taking her committees out into the community. And so when there are those topics to get those in the communities where people are so that we don't have seven and eight people who have had to sit through a council meeting for 7 hours to talk about one item that's important to them. I hope that as we move forward in the new year with the new committee announcements being announced, any day now that we can bring the committees into the community where the real dialog should be happening and that that real dialog and and taking that community input can happen before this dais where a decision has been made tonight . And I know that when I talk to my residents, I often say things like, it's great to come to the dias and speak for 3 minutes. But what we really need is an ongoing dialog where people are sitting in a room together, dreaming up the future, and those discussions are consistently happening at the committee level. So I encourage you, if you've never been to a committee meeting, to attend a committee meeting, if you're passionate about getting something on an agenda, write a letter to the chair of the committee. Those are the kinds of things that can really make a difference in your cause. And and I think those tours are also great because I know there are so many misconceptions about so many different things we do because there's so much fake news on social media about what is and is not healthy or good or all of those different things. So I look forward to working with any community member who's passionate about this. There are a lot of great things about surf that we've been working on for a very long time, and at any dialog related to State Ledge or surf committees, you're always welcome to come and bring your opinion or a dialog can happen. Thank you. Thank you. Are we did public comment already. There's a motion second to approve the motion members. Please go ahead ancaster votes and it sounds like the motion is the staff recommendation, but we're also going to make sure that we bring back an update and some a more robust report to the to the council members. Absolutely. Did I get that right? Okay. Motion carries.