China's recent decision to stop accepting most of the world's recyclable materials rippled through Palo Alto on Tuesday night, when city officials approved a new contract that explicitly requires the city's trash hauler to track the final destination of local recyclables.

The provision is part of a contract extension between the city and its hauler, GreenWaste, which the City Council approved Tuesday by a 5-1 vote, with Councilman Greg Tanaka dissenting. The new deal, which stretches from 2021 to 2026, also requires GreenWaste to devote more resources to managing construction-related waste, cleaning contaminated recyclables and holding clean-up days to collect reusable items, construction-related waste, filters and batteries.

The $22-million deal also requires the city to replace 35 trucks — about 57 percent of GreenWaste's fleet — which are now nearing the end of their useful life, according to Public Works staff. The new trucks are projected to cost $9.1 million.

For Palo Alto, the new deal aims to achieve both stability and environmental sustainability. The city's existing contract with GreenWaste, its hauler since 2009, is set to expire in 2021, around the same time that other cities in the region will also be going out to bid for new deals. Ron Arp, the city's Zero Waste manager, said there is a risk that if the city waits and doesn't lock in a new deal, it will get "squeezed out" of the market because haulers will focus on larger cities like San Jose, one of nine cities that will be seeking new contracts.

The deal also seeks to further lower the percentage of local waste that heads to landfills. GreenWaste will be required to provide bins to construction contractors to sort separated materials and would manage these materials. Public Works staff expect this program to divert more than 7,500 tons per year, about 16 percent of the city's total landfilled waste, according to a Public Works report.

The new requirement that GreenWaste "clean up" local recyclables is expected to divert another 2,450 tons per year. Under the contract, the hauler would expand outreach on sorting requirements for commercial customers and provide additional sorting of marginally contaminated recyclable materials at its processing facility to ensure their marketability.

The new contract is not expected to raise local refuse rates, according to Public Works staff. That's because the Refuse Fund has been realizing more revenues than expenses and the fund's reserve currently has more than $18.1 million in it, well above recommended levels, said Paula Borges, environmental program manager at Public Works. The city's hauling expenses will amount to about $136 per ton, roughly in line with Menlo Park ($135 per ton) and Redwood City ($143) and well below San Francisco ($282).

"We receive a good value from the GreenWaste program," Borges said.

Among the biggest changes is the new requirement that the hauler track the destination of recyclable goods. Historically, China has served as the primary market for recyclable materials. That, however, changed in January 2018, when China stopped accepting recyclables that are not 99.5 percent pure. Its ban prompted the market to shift to other Asian countries, including Vietnam and Malaysia.

In response to China's new restrictions, the contract requires GreenWaste to gather information on the "environmental and social implications" associated with the full life cycle of Palo Alto's recyclable materials. Borges noted that China's policy change is "forcing the use of new countries and vendors ... that may not have the infrastructure to handle the volume of materials headed their way."

"This raised concerns that these countries may have environmental and social issues," Borges said. "They may have recycling processes that are creating air and water pollution and using unconventional labor and social practices."

The new requirement that GreenWaste investigate and report the destination of local recyclables is "something no other municipality has," Borges said.

Under this provision, GreenWaste will be required to request annual updates from the purchaser about the disposition of recyclable materials. The hauler will then analyze evidence from "credible media, authoritative institutions and civil society organizations" to assess environmental and human-rights violations in the new destinations. The city will have the option of directing GreenWaste to use different purchasers if any environmental and social issues are identified.

The council generally lauded the new contract, with Councilwoman Liz Kniss calling China's new policy a "huge issue."

"When they stopped taking disposables, as they did last year, that has impacted us dramatically," Kniss said.

At the same time, she and some of her colleagues had some reservations about approving the $22 million contract without involvement by its Finance Committee. Tanaka argued that the city should have gone out to bid to solicit other proposals and urged the council to send the contract to the Finance Committee for more analysis.

"It's a gigantic contract and it's hard to know what's what," Tanaka said.

He also objected to the idea of having the city pay for trucks, which GreenWaste would own, and likened it to a gardener who does work at his house.

"I don't buy him a lawnmower or a rake," Tanaka said.

City Manager Ed Shikada responded that the city is paying for a "service," which requires the purchase of the new vehicles and that it's in the city's best interests not to take ownership of the trucks. Under the agreement, the city would either get the trucks back or get compensated for their value after the contract's duration, staff said.

After going through the budget figures and discussing the various provisions of the new contract, council members generally agreed that the deal has been adequately vetted and warrants approval.

Councilman Tom DuBois noted that residents appear to be generally satisfied with the level of services they're receiving. The newly released National Citizen Survey showed 79 percent of respondents ranking the trash-hauling service as "excellent" or "good" (12 percent said it was "fair," while 3 percent rated it "poor"). Shikada also characterized the new policy on recyclables as "leading edge and potentially bleeding edge."

"I think Palo Alto is really breaking new ground in taking responsibility for what really is an international crisis," Shikada said.