Council authorizes negotiation with Mill Valley Refuse Service, waives competitive bidding for new franchise term

The Corte Madera Town Council unanimously directed staff on July 1 to waive the competitive bidding process and to negotiate preliminary terms for a new solid-waste franchise with Mill Valley Refuse Service (MVRS), the town's long-time hauler.

Why it matters: the current MVRS franchise began in 2006 and expires December 2026. A new franchise determines collection, recycling and disposal rates, service levels, capital investment, and contract-term protections that affect residents' bills and local diversion goals.

What staff proposed: after months of meetings with MVRS and consultants (r3 consulting), staff presented a term sheet negotiated with the company that would: (1) allow limited changes to how MVRS recovers profit (moving the calculation to an operating-margin basis, which staff and consultants said mathematically increases allowable profit by about 1 percentage point compared with the current cost-plus approach); (2) permit interest on capital financing as an allowable cost to help MVRS finance fleet and infrastructure upgrades; (3) use CPI-based adjustments for the first two years of the new agreement while deferring any detailed rate review to a later point; and (4) add services or allowances that staff and MVRS agreed would provide direct value to the town.

New or clarified services offered by MVRS during negotiations (staff summary): MVRS proposed adding one annual on-call curbside cleanup pickup for multifamily properties at no additional charge; supplying five 40-yard debris boxes annually to support town and fire-authority vegetation-management work; increasing the town's existing administrative-fee payment from $9,000 to $12,000 annually; adding a year-round ADA portable toilet at Menke Park and supplying updated-style portable toilets with an increased baseline town allowance set to $30,000 (staff said the previous baseline was $12,000 and CPI-adjusted today would be about $20,627); and providing more detailed regular reporting (diversion rates, contamination metrics and other CalRecycle-aligned data) to improve transparency.

Consultant and company rationale: r3 consulting told the council the two proposed mathematical changes (operating-margin profit calculation and permitting interest on financed capital) are standard in many modern franchise agreements and would, in r3's analysis, limit future annual rate increases to lower single digits compared to many new procurements. Mill Valley Refuse Service representatives said negotiations were constructive and that they were prepared to incorporate capital and service investments tied to the term.

Council concerns and direction: council members pressed staff about several matters, including whether the Blink/EV discussion showed a need to seek carriers with more automated enforcement, the possibility of shifting to alternative recycling services, the transparency of the profit and cost recovery methods, and how to ensure termination rights or exit options if Corte Madera later wished to pursue a different governance model (for example, a countywide JPA). Multiple council members requested that staff draft termination and assignment provisions and provide clarity around the change-in-control and assignment process, and asked for protections that would prevent excessive financing costs or self-dealing in capital financing. One council member asked staff to consider starting a new franchise on July 1, 2026, or otherwise align the new term so fiscal-year accounting is cleaner; staff said they could explore an earlier start date if both parties agree.

Decisions: the council took two formal votes. First, the council voted unanimously to waive the competitive bidding process for a new franchise procurement. Second, the council voted unanimously to authorize the town manager to negotiate a new agreement with MVRS using the negotiated term sheet as the basis and to return the draft modern franchise agreement to the council for final approval before the current contract expires. Council members asked staff to ensure the forthcoming draft includes termination language, assignment/change-of-control clauses, dispute-resolution provisions and detailed reporting requirements.

Next steps and timeframe: staff will continue negotiations with MVRS and r3 consulting, draft a full franchise agreement, and present the full agreement to council for formal approval via resolution before the current franchise expires Dec. 31, 2026. Council indicated it expects to review a full legal franchise document with the requested termination and oversight protections before signing.