To: Honorable Mayor and Members of City Council
From: Phil Brun, Utilities Director
Prepared By: Kevin Miller, Materials Diversion Administrator
TITLE:
Title
Application for the 2022/23 CalRecycle Organics Grant Program
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution authorizing the Utilities Director to submit an application for, and execute all necessary documents to implement, a CalRecycle organics grant in the amount not-to-exceed $10 million for a THOR model food waste de-packager equipped with a materials polisher, a trommel screen, two glass crushers, a 6,000 gallon tank and an anaerobic digestion facility with a capacity of 32,000 tons per year and grant eligible labor at the City’s Materials Diversion Facility and determining that the actions authorized by this resolution were adequately analyzed by a previous CEQA action.
Body
DISCUSSION:
The City’s Materials Diversion Facility (MDF), which is located in south Napa County, has been in operation since the early 1990’s and receives and processes all residential and commercial source-separated recyclable and composable materials generated within the City and collected by the City’s authorized hauler, Napa Recycling & Waste Services LLC (NRWS). The MDF also receives and processes materials delivered by haulers servicing surrounding jurisdictions (such as the unincorporated Napa County) and by private (self-haul) customers. In 2004, the City purchased the MDF and in 2005, NRWS took over as the City’s contracted operator. The MDF property was annexed into the City of Napa in March of 2014.
The City has developed a plan for the Napa Renewable Resources Project (NRRP), which, among other things, envisions enhanced composting technology and anaerobic digestion for management of the City’s organic waste streams. In the past five years, many system and capital improvements have been made to transition the MDF from open air, turned windrow composting system to a Covered Aerated Static Pile (CASP) composting system. Before compostable materials ever get to the active composting system, they go through a pre-processing system to clean and prepare organic materials.
Public Resources Code sections 48000 et seq. authorize CalRecycle to administer various grant programs in furtherance of the State of California’s efforts to reduce, recycle and reuse solid waste generated in the state thereby preserving landfill capacity and protecting public health and safety and the environment. The grants are intended to provide funding for infrastructure to reduce short-lived climate pollutants to comply with SB 1383, which requires jurisdictions to divert 75% of all organics from landfilling by the year 2025. The proposed grant application would seek approximately $10 million to further improve and refine the organics pre-processing system at the MDF with both efficiency and final product quality benefits. It would also provide funding towards an aerobic digestion (AD) facility that would capture biomethane from food scraps and other compostable organic waste and convert the biogas into renewable natural gas (RNG) to fuel heavy refuse and recycling collection vehicles and/or provide electricity to the City’s MDF. The second attachment to this staff report provides a brief project description of the proposed AD system. The current CalRecycle Organic Program grant application is due April 20, 2023 with grant awards to be announced October 2023.
If the City is awarded the grant, an amendment to the NRWS Contract will be brought to Council for consideration in order to add the installation and operation of the new equipment to the scope of work.
FINANCIAL IMPACTS:
Total anticipated capital expenditure for the AD facility, de-packager, two glass crushers and 6,000 gallon tank is projected to be in the range of $28-30 million dollars. If the City awarded this competitive grant at the maximum $10 million grant award level, then this would lower the total project cost by $10 million. The City and NRWS will be pursuing other grants and/or supportive financing such as the investment tax credit benefit from the 2022 Federal Inflation Reduction Act. If the AD facility and other equipment are installed at the City’s MDF, this would allow for “new” organic processing capacity to the facility that would translate in additional revenue for the City from gate fees charged to third party users of the MDF as well as additional sales of finished compost. To the extent the AD facility provides fuel to the NRWS fleet of heavy refuse and recycling vehicles and/or electricity to operate the City’s MDF, there would be benefits to the City. Sales of AD-derived renewable natural gas fuel also would qualify for State Low Carbon Fuel Standard (LCFS) and Federal “RINs” environment credits that would be tangible benefit for the City and/or NRWS. Further project details are unknown at the time of this staff report but would be detailed in a future contract amendment to the City’s agreement with NRWS (City agreement No. 8687) if the cost/benefit analysis justified moving forward with the project.
CEQA:
City staff recommends that the City Council determine that the potential environmental effects of the Recommended Action described in this Agenda Report were adequately analyzed by the Initial Study and Mitigated Negative Declaration prepared for the Napa Renewable Resource Project (File No. PL12-0022), adopted November 7, 2013 (Resolution No. PC2013-15), pursuant to CEQA Guidelines Section 15162.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
ATCH 2 - Anaerobic Digestion and Renewable Natural Gas Brief Project Description
NOTIFICATION:
Greg Kelley, General Manager/Managing Partner, Napa Recycling & Waste Services
Mike Murray, Controller/Chief Financial Officer, Napa Recycling & Waste Services
Evan Edgar, Edgar and Associates
Peter Ex, Local Enforcement Officer/Solid Waste Program Manager, County of Napa