TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY SWAN, COMMUNITY SERVICES DIRECTOR
DATE: APRIL 28, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
AUTHORIZATION TO AMEND THE AGREEMENT WITH ATHENS SERVICES, INC. TO INCREASE THE BASE CONTRACT RATES AND EXTEND THE TERM FOR ORGANIC MATERIAL PROCESSING AND TRANSFER HAULING (FUNDING SOURCE: SANITATION FUND)
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SUMMARY
In 2021, the City entered into an agreement with Athens Services, Inc. (Athens) for organic material processing and hauling from the City Yard transfer station to the American Organics composting facility in Victorville. The City began contracting with Athens one year prior to organic material recycling mandates taking effect, enabling the City to secure competitive pricing when demand for organics processing was low.
The current agreement allows for an extension for an additional three-year term if the City and Athens successfully negotiate a new Base Rate. The contract stipulates that the negotiated Base Rate “shall not exceed the fair market rate Disposal Fee for similar services. The fair market rate shall be determined by identifying three (3) comingled green and food waste processing facilities, located within a 50-mile radius of the boundaries of the City of Claremont, and averaging the sum of all Disposal Fees.” The City has solicited pricing from local competitors and recommends extending the contract with Athens Services for an additional three-year term at a negotiated rate, as described in this report.
RECOMMENDATION
Recommended Action
Staff recommends the City Council authorize the City Manager to amend the contract with Athens Services, Inc. for organic material processing and transfer hauling, exercising the option to extend for an additional three-year term and increasing the base contract rates.
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ALTERNATIVE TO RECOMMENDATION
In addition to the recommendation, there is the following alternative:
• Request more information from staff.
FINANCIAL REVIEW
The current base rate is $85 per ton for organic material processing and transportation. The City secured favorable pricing in 2021, before other cities initiated organic collection programs. The base rate has been fixed for the initial five-year contract term. Since 2021, market rates have increased dramatically due to inflation, higher vehicle and fuel costs, and higher demand for organic processing services. The new, renegotiated base rate is $85 per ton for processing and $40 per ton for transportation. The renegotiated rate also includes the option for diesel fuel surcharges when diesel fuel is over $4 per U.S. Department of Energy Data.
The Sanitation Fund budget currently includes $744,600 for organic material processing and transfer. Under the new agreement, staff anticipates expending $1,124,420 for organics processing and transfer. This anticipated cost increase will be incorporated into the 2026-27 Sanitation Fund budget.
This purchase is a negotiated contract amendment and extension that complies with all City and State purchasing guidelines. Contract documents are available for review in the City Clerk's office.
The staff cost to prepare this report and administer this contract is estimated at $4,900 and is included in the operating budget of the Community Services Department.
ANALYSIS
Background
In 2021, the City entered into an agreement with Athens Services, Inc. for organic material processing, including hauling from the City Yard transfer station to the American Organics composting facility in Victorville. The current contract provides for organics processing at a rate of $75 per ton and transfer services at a rate of $10 per ton. Per the contract, the rates have not changed since 2021, despite requests from Athens Services for cost-of-living increases. The rates in the current agreement are now considerably below market value, due to market changes and increased demand for organics processing services. The agreement allows for a three-year extension contingent upon successful negotiation of a new Base Rate.
Organic Material Processing
In October 2025, City staff initiated discussions with Athens to explore a cost-effective contract extension. By December 2025, Athens proposed a processing rate of $85 per ton and a $40-per-ton transfer hauling fee to haul material from the City Yard to the processing facility in Victorville. In March 2026, the Athens proposal was updated to include a Diesel Fuel Surcharge. The Diesel Fuel Surcharge would be applied only if fuel prices exceed $4 per gallon. Diesel costs would be evaluated weekly based upon U.S. Department of Energy Data. The Diesel Fuel Surcharge would increase the City’s per-ton hauling cost by $1.05 for every dollar that Diesel Fuel exceeds $4. For example, if the price of diesel is $6, the City’s hauling cost would increase from $40 per ton to $42.10 per ton. Rates would be subject to an annual CPI adjustment.
To ensure the City is securing the best available value, staff conducted a market survey of regional facilities. The results show that Athens Services Inc.’s proposed rate is below prevailing market rates, even when accounting for transportation costs:
|
Vendor |
Quoted Rate |
|
Athens Services, Inc. |
$85.00 per ton |
|
Los Angeles County - Puente Hills MRF |
$126.22 per ton |
|
Azusa Transfer Station and MRF |
$173.04 per ton |
|
West Valley MRF |
$114.25 per ton |
|
Grand Central Recycling and Transfer |
Declined to Quote Pricing |
|
AVERAGE |
$137.83 (processing only) |
When accounting for transportation, the City’s total cost under Athens’s proposal is approximately $125 per ton, below the regional average for processing alone. This represents a meaningful cost advantage and positions the City below market benchmarks.
The City also compared the $40-per-ton transfer hauling cost to existing competitively-bid contracts to haul material from the City Yard to the Mid-Valley Landfill. The $40-per-ton rate quoted by Athens equates to approximately $7.30 per mile. The City’s existing contract for hauling to the Mid-Valley landfill equates to approximately $11.50 per mile. Therefore, the $40-per-ton transfer rate plus diesel surcharge fees is believed to offer a competitive value. To further ensure that pricing is competitive, City staff will bid the transfer component of the contract in 2026. If more competitive rates are provided, the contract amendment provides the City with the flexibility to discontinue hauling services through Athens and contract with another hauler.
Beyond direct pricing, the Athens proposal delivers additional financial efficiencies. Utilizing transfer hauling from the City Yard allows for efficient use of existing labor hours, lower fuel consumption, and lower vehicle wear compared to long-distance hauling using collection trucks. In contrast, delivering material directly to other regional facilities would require substantially more staff time and increase operating and maintenance costs, eroding any perceived rate competitiveness.
Overall, the negotiated extension with Athens Services provides the City with a below-market processing rate and enables City staff to continue beneficial operational efficiencies.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities, Sustainable City Plan, Economic Sustainability Plan, General Plan, and the 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by: Prepared by:
Jeremy Swan Kristin Mikula
Community Services Director Community Services Manager