Report Prepared by: Bill Osmer, Public Works Manager - Wastewater
Title
SUBJECT: Approval of a Hay Brokerage Agreement with McLaughlin Hay Service, Inc., for Wastewater Treatment Plant Land Application Area Fodder Crops for an Initial Term Ending December 31, 2029, with an Option to Extend the Agreement for Two (2) Additional One (1) Year Terms
REPORT IN BRIEF
Considers approving an agreement with McLaughlin Hay Service, Inc., to provide brokerage services for fodder crops produced on the Wastewater Treatment Plant (WWTP) Land Application Area (LAA). The broker will market and sell harvested hay and silage, deduct the agreed-upon brokerage fee of 4.4% of the sale proceeds, and remit the remaining proceeds to the City.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving an agreement with McLaughlin Hay Service, Inc., to provide brokerage services for fodder crops produced on the Wastewater Treatment Plant Land Application Area, with the option to extend the agreement for two (2) additional one (1) year terms; and,
B. Authorizing the City Manager to execute the necessary documents and future contract extensions.
Body
ALTERNATIVES
1. Approve, as recommend by Staff; or,
2. Approve, subject to other than recommended by Staff; or,
3. Deny; or,
4. Refer to Staff for reconsideration of specific items; or,
5. Continue to a future meeting.
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
As provided for in the FY 2026-2027 Adopted Budget.
DISCUSSION
The Wastewater Treatment Plant (WWTP) Land Application Area (LAA) provides an environmentally beneficial method for managing biosolids generated during the wastewater treatment process. Biosolids are land applied as a soil amendment on approximately 600 acres of farmland and used to grow fodder crops for local farmers and ranchers. The primary purpose of the biosolids is to amend the soil, promote crop production, and support compliance with Senate Bill (SB) 1383.
Although crop production is secondary to the land application program, timely marketing and removal of harvested crops are essential to prevent deterioration in crop quality and value. To ensure harvested crops are marketed efficiently and removed promptly, the City contracts with a qualified hay broker to market and sell the crops.
A Request for Proposals (RFP) for brokerage services was issued on July 21, 2026. The RFP invited qualified firms to submit proposals to provide brokerage services for the harvested fodder crops. Staff received two proposals, which are listed below in order of their evaluation ratings:
Brokerage:
McLaughlin Hay Service, Inc.
San Joaquin Valley Hay Growers Association
Staff evaluated the proposals based on the proposed brokerage commission, experience marketing large volumes of hay and silage, and demonstrated ability to provide timely brokerage services. Based on this evaluation, staff determined that McLaughlin Hay Service, Inc., provides the best overall value to the City and recommends approval of the agreement.
The agreement will commence from the date of mutual execution and continue through December 31, 2029. The City may renew the agreement for up to two (2) additional one-year terms. This agreement is intentionally aligned with the harvest season.
IMPACT ON CITY RESOURCES
No appropriation of funds required for this agreement. Brokerage fees will be deducted from the proceeds generated from the sale of harvested fodder crops before the remaining sale proceeds are remitted to the City.
ATTACHMENTS
1. McLaughlin Hay Service, Inc. Contract
2. Exhibit A Scope of Services
3. Release of Liability