TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: INTERIM DIRECTOR OF PUBLIC WORKS

DATE: JUNE 6, 2006

SUBJECT: RESIDENTIAL AND COMMERCIAL SOLID WASTE AND RECYCLING SERVICES POLICY OPTIONS

Staff Coordinator: Lauren Ramezani, Sr. Administrative Analyst

RECOMMENDATION

1. Discuss the proposed policy options and Request For Proposal (RFP) documents presented by staff.
2. Authorize staff to finalize the RFP documents and circulate a RFP.

3. Adopt Resolution 2006- ___, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES, AMENDING RESOLUTION 2005-53, THE BUDGET APPROPRIATION FOR FY05-06, FOR A BUDGET ADJUSTMENT TO THE CITY'S WASTE REDUCTION FUND.

BACKGROUND

The City currently has two exclusive residential franchise agreements with Waste Management of Los Angeles and Universal Waste Systems, Inc. that will expire on June 30, 2007. The City has the sole option to extend the residential franchise agreements up to three years.

The City’s commercial waste and recycling programs are managed through fourteen (14) non-exclusive agreements. The non-exclusive agreements are renewed on an annual basis, and the individual companies do not have the right to continue providing collection services if the City does not renew them. The City does not set any prices.

DISCUSSION

During the May 16, 2006, City Council meeting staff and the City Consultant presented residential and commercial contracting options for City Council’s consideration. After discussion of the contracting options, City Council authorized staff to prepare and issue a Request for Proposals for Residential and Commercial Solid Waste Collection. Prior to release of the RFP, City Council directed staff to present a draft RFP and policy options for consideration at the June 6, 2006 City Council meeting. Council also directed staff to implement the Process Integrity Procedures. Staff has outlined major policy options for discussion. They are listed on Table 1 below. A summary of the RFP documents has been included (see Attachment 1), and a full draft of the RFP documents is also attached to this staff report.

MAJOR POLICY ISSUES

Table 1 below presents the major policy issues for discussion and incorporation into the RFP documents:

Table 1 City Council Policy Options/Issues
Policy Options/Issues	Staff Recommendation
GENERAL RFP CONDITIONS
No. of residential haulers	Exclusive to one residential hauler Citywide.
No. of commercial haulers Option 1: One Citywide commercial hauler (same as residential hauler) with City approving uniform rates for all services (not-to-exceed rates). Option 2: Up to four commercial haulers with the City approving one not-to-exceed rate structure that can be charged by all haulers. Customers have the option to choose from the haulers and negotiate a rate, provided the rate is within the City approved not-to-exceed-rate structure.	Option 1: One Citywide commercial hauler (same as residential hauler) with City approving uniform rates for all services (not-to-exceed rates).
Length of contract term	Fixed 7-year term, with one 33-month extension option (making it the same expiration date as RHE’s contract expiration date of March 31, 2017).
Current Contracts Extension Option	Return to Council to extend current contracts (depending on the results of the RFP)
RESIDENTIAL COLLECTION FREQUENCY AND COLLECTION METHOD
Frequency of trash collection	Include RFP options for: a) 2x week, and b) 1x week trash collection.
Recycling and Green Waste Collection	Both commodities collected on the first trash collection day of the week, regardless of the frequency of trash collection.
Method of Collection	Hauler proposes collection method for all three commodities. The collection method could be manual, semi-automated, or automated collection.
Containers	Various sizes, stable base, resistant to tipping over due to high wind or steep hills; customer choice of container size.
CUSTOMER RATES
Variable rates	Customer rates based on the number, and size of trash containers.
Rate adjustment methodology (July 1 of each contract year, beginning July 1, 2009)	Refuse Rate Index (weighted on national indices for trash truck fuel, trash truck drive labor, trash truck maintenance, trash truck capital cost).
Senior discount	10% discount of bill.
Annual pre-payment discount	5% discount of annual bill.
Pup truck rate	No additional charge for pup truck collection at curbside (if pup required in areas with steep or narrow streets, poor road conditions, or fire and safety vehicle access).
Backyard collection rate (regular truck or pup truck)	Additional cost for customer (if selected due to convenience, or by choice, or if required by CC&Rs). No additional cost for customers due to a disability.
HAULER PAYMENTS TO THE CITY
Collector Fee (Franchise/AB 939 Fee)	12% of hauler’s gross revenue received (both residential and commercial).
Recycling Fee	100% of California Redemption Value revenue for both residential and commercial (appx. $250,000/year).
Infrastructure Maintenance Fee	$260,000/year for 2x trash. $216,000/year for 1x trash.
HAULER OPERATING LIMITATIONS
Hauler provided containers (manual, semi-automated, automated collection)	The hauler will provide all residential containers (32, 45, 64, 96 gallon container size options available to residents) regardless of the collection method. Manual collection will be limited to the small container size (32 gallons.)
Placement of containers	Flexibility for container collection/placement to accommodate lack of adequate curb space, no curb space, topography, and street conditions.
Border streets	Hauler to describe methodology for dealing with border street collection issues.

CONCLUSION

1. Staff recommends that the City Council provide direction on the policy options and RFP documents as presented.Staff recommends that the City Council authorize staff to finalize the RFP documents and circulate a RFP.
2. On May 16, 2006,Council authorized R3 Consulting to prepare RFP documents and assist the City in the evaluation process. However, a budget adjustment resolution is now needed to allow for adequate appropriation in the Waste reduction fund.

FISCAL IMPACT

The consulting cost for preparing a RFP, and completing the procurement process is approximately $80,000-$100,000. This cost will be paid from the City’s Waste Reduction fund that has an estimate FY 05-06 ending fund balance of approximately $400,000. Additionally, each proposer will be required to submit a $1,000 non-refundable proposal fee as part of their RFP submittal. The proposer fee will be deposited into the Waste Reduction Fund. Additionally, the Waste Reduction Fund will have a budget adjustment in the amount of $80,000 to provide the necessary funds for consulting services.

Respectfully submitted,

Raymond T. HollandDirector of Public Works Reviewed by:Les Evans

City Manager

Attachments: Resolution and Draft RFP

RFP SUMMARY

The following table summaries the major provisions of the RFP document. The attached draft RFP will be edited to incorporate June 6, 2006’s policy options and input directed by City Council.

Attachment 1 RFP Summary
Schedule
RFP documents will be released June 13, 2006
A Mandatory pre-proposal conference will be conducted June 28, 2006
City’s Responses to hauler questions will be issued by July – August 2006
Proposals will be due September 12, 2006
Interviews will be conducted September 21 – 22, 2006
Initial evaluation will be completed late September 2006
Initial RFP results and recommendations presented to City Council in October, 2006
Additional RFP results and recommendations presented to City Council in November, 2006
City Council Action
Award of Contract in December, 2006, or
Extension of existing residential and commercial contracts issued December 19, 2006, if required
Collection Services will start on July 1st, 2007 (if new contract is awarded)
Community workshops Conduct meetings in late June, mid July, late September, and early November; schedule meetings during the daytime, evenings, weekends Place notifications in the PV News, Daily Breeze, City web site, City listserv, Public access TV, letters to HOAs, hauler billing statements
RFP Sections 1 - 4 and Section 6 Requirements
Process Integrity Rules must be completed and submitted by Proposers by the close of the MANDATORY pre-proposal conference
$1,000 non-refundable proposal submittal fee
$50,000 Proposal Bond (to be returned at the end of the RFP process)
Prior to contract award, the City Council has the right to reject any and all proposals
The City Council has the right to waive non-material irregularities
The City Council has the right to disqualify Proposers for not adhering to the Process Integrity Rules
The City Council has the right to discontinue the RFP process at any time and for any reason
Technical requirements
Qualifications (staff, references, financial stability/ability, experience)
Plans for transition, operations, equipment, diversion, public education
Customer Rates for required and optional programs
Exceptions to the RFP or Franchise Agreement
Evaluation process
Franchise Agreement (RFP Section 5)
Overall Terms and Conditions
7 year base term, plus one 33-month extension option (if performance requirements are met)
Prohibition against gifts to City Officials or designated City employees
Administrative fines ($100 - $25,000 per occurrence)
50% annual diversion requirement, or the current requirements as set by the State
Collector Fees (annual)
12% of gross revenue received for all services (residential collection, commercial collection, roll-off, addition services
100% of California Redemption Value revenue
Infrastructure Repair Fee $260,000 for 2/week trash collection or $216,000 for 1/week trash collection, and adjusted annually at same rate as any rate increases
$750,000 Performance Bond (renewed annually)
Insurance (minimum levels)
$5 million for automobile; $5 million aggregate limit; $3 million for hazardous waste and environmental impairment liability; $3 million combined single limit per occurrence; and worker’s compensation and employers liability at statutory limits
Contractor Operating Hours
Residential
Monday - Friday for collection days (contractor to propose collection day(s)), with collection hours 7:30 a.m. – 6:00 p.m. Saturdays only if collection is the day after an approved holiday and Saturday collection hours limited to 9:00 a.m. – 4:00 p.m.
Holiday Collection on the same day as a holiday or the following day after a holiday. The City approves the holiday schedule in advance. The hauler is subject to liquated damages ($1,000) if holiday collection is not done on the day as approved by the City
Commercial
Monday – Saturday for collection days (based on customer needs/request). Monday – Friday collection hours 7:30 a.m. – 7:00 p.m. Saturday collection hours 8:00 a.m. – 5:00 p.m. Commercial collection hours may be limited if commercial collection is within 100 feet of residential dwellings, or if the City has received repeated noise complaints from residents about the commercial collection services.
Office days and hours are Monday – Friday hours 8:00 a.m. – 5:00 p.m., and Saturdays 8:00 a.m. – 12:00 noon
Residential Trash Collection Options
Option 1: Twice/week collection of trash, with once/week collection of recyclables and green waste. All three commodities will be picked up on first collection day of the week; only trash will be collected on the 2nd collection day of the week. (manure on subscription basis)
Option 2: Once/week collection of trash, recyclables and green waste. All three commodities will be picked up on the same day of the week.
Residential Collection Requirements
Collection Services
Hauler to propose collection method (manual, semi- or full automated collection)
Curbside, unless there are space constraints, or limitations set by CCRs.
Backyard collection for additional cost for customer selected/requested backyard service or if backyard service is required by CC&Rs Backyard collection for no additional cost for customers with a disability.
Commingled recycling
Pup truck collection at no additional cost if required due to topographical considerations, narrow streets, (fire truck access, minimum street width, steep streets, or safety concerns by the City or by the hauler).
Weekly used oil and used filter collection; contractor provides containers and filter bags (on the same day as recycling collection)
On-call curbside Bulky Waste Collection (4 times/year) with 5 cubic yard pick-up (no C&D waste); on-request backyard bulky waste pick-up has an additional handling fee of $10.00 per collection
On-call curbside CRTs and E-waste included as part of Bulky Waste Collection; on-request backyard e-waste pick-up has an additional handling fee of $10.00 per collection
Additional unlimited bagged leaf or bundled brush collection (October 1st – February 28th)
Occasional trash overages/oversize material collected (once every 6 weeks) at no additional charge
Manure collection on a subscription basis in manure carts, on same day as green waste collection
Contractor Provided Carts
New carts for each cart type (trash, recycling, green waste, and manure)
Carts available in 32, 45, 64, 96 gallon capacity. Customer chooses container sizes.
32, 45, and 64 gallon carts must be nestable
Attached wheels (minimum 8" diameter), and attached hinged lids
Carts to have stable base, resistant to tipping over due to wind or hills, and manufactured with a minimum 20% recycled materials content
City to approve colors (earth tones), Carts to be embossed with City logo, and with "trash", "recyclables", "green waste", or "manure" (i.e., no stickers)
Unlimited number and sizes of recycling and green waste carts available at no charge
One free cart exchange per year for each cart type
10-year warranty on carts, and cart replaced and repaired at no cost
If manual collection is selected by the City, then each cart would be limited to a maximum size of 32 gallon capacity, and a 60 pound weight limitation due to worker safety concerns
Collection Vehicles
New vehicles can be semi- or full-automated, or manual collection
Residential collection trucks must have a maximum total gross weight capacity of 47,000 lbs. and rear axel weight limits of 16,000 lbs., total 3 axels maximum, and a total load capacity of 28 cubic yards.
Residential collection trucks have a maximum turning radius of 45 feet
Collection vehicle noise—75 decibels at 25 feet, repainted at least every 30 months, washed at least once per week, and use re-refined motor and hydraulic oil,
Must meet current federal, state, regional, and local air quality requirements throughout the term of the contract
Vehicles used on temporary basis (during regular vehicle maintenance or repair) must meet all City specifications if they are used more than 30 days per year.
Residential Billing
Contractor provides quarterly billing in advance, with bills issued on 1st day of the 1st month of the billing quarter for residential customers
Payment is due 45 days after bills are issued, and hauler may issue past due notices if payment is not received by 90 days after the bill was issued. If payment is not received within 120 days after the bill was issued, hauler can remove recycling and green waste containers and reduce trash service to lowest service level (1- 32 gallon cart collected 1/week), but must continue to collect trash. If services are reduced due to non-payment and later payment is made, hauler may charge a $50.00 fee to restore full service.
Hauler can only collect past due amounts for non-payment for the prior 12 months, and hauler may use a collection agency for past due accounts. The City is not responsible for past due accounts.
Residential temporary stop service can be provided if resident requests a stop in service for a minimum of three continuous months due to out-of area travel/vacation, vacancy, or construction. Hauler may charge a $10.00 fee to resume service.
Commercial Collection Requirements
Reduce the number of commercial haulers from the current 14 to either 1, or a maximum of 4 exclusive haulers
Free commercial recycling and green waste services (carts or bins)
Contractor Provided Bins
Bins available in 1–6 cubic yards, 10– 40 cubic yard roll-off boxes, and carts available in 32–96 gallon capacity. Collection bin size and collection frequency to be established based on customer’s needs
New 1-6 cubic yard capacity bins with attached hinged lids (plastic, metal, locking)
One free bin exchange per year, one free bin cleaning per year, and damaged bins replaced or repaired at no cost
New Collection vehicles the same as residential collection vehicles except maximum size is 32 cubic yards capacity, 3 axels, and 56,000 gross vehicle weight
Commercial Billing
Contractor provides monthly billing in advance. Bills issued on 1st day of the 1st month, with payment due 20 days after bills are issued. The hauler may issue past due notices if payment is not received by 60 days after the bill was issued. If payment is not received within 90 days after the bill was issued, hauler can remove recycling and green waste containers (bins or carts) and reduce trash service to lowest service level (1- 32 gallon can colleted 1/week, or 1 -1 CY bin collected 1/week), but must continue to collect trash. If services are reduced due to non-payment and payment is made, hauler may charge $50.00 fee to restore full service
Hauler can only collect past due amounts for non-payment for the prior 12 months, and hauler may use a collection agency for past due accounts. The City is not responsible for past due accounts
Service Rates (Both Residential and Commercial)
Residential rates are based on trash cart capacity, and/or the number of trash carts (32–96 gallon), and frequency of trash collection (once or twice per week)
Senior discount of 10%, with application only required one time; annual prepayment discount of 5%; and discount for low income households (minimum level of service)
Residential roll-off rates based on the size of the roll-off container and a rental rate if the roll-off is left on site over 14 days.
Commercial Rates based on trash bin or cart capacity, the number of trash bins or carts, and the frequency of trash collection (1–6 times/week)
Commercial roll-off rates based on the per pull cost, plus the disposal cost
First rate adjustment July 1, 2009
Annual Rate adjustment on July 1st; hauler must apply and provide required rate adjustment documents to the City by April 1st.
Failure of the hauler to provide required rate adjustment documents by April 1st will void rate increase eligibility for that fiscal year
Failure of the hauler to met minimum diversion requirement will void rate increase eligibility for that fiscal year
City retains the right to decrease rates even if the hauler does not provide the required rate adjustment documents if such an adjustment would have resulted in a rate decrease
Rate adjustment based on changes to two rate components 1) collection element and 2) disposal element
Collection Element Cost	Index
1. Labor	Series ID: ecs12102i Service-Producing Industries.
2. Diesel Fuel	Series ID: wpu057303 #2 Diesel Fuel.
3. Vehicle Replacement	Series ID: pcu3362113362111 Truck, bus, car, and other vehicle bodies, for sale separately.
4. Vehicle Maintenance	Series ID: pcu3339243339243 Parts and attachments for industrial work trucks.
5. All Other	Series ID: cuur0000sa0 seventy-five percent (75%) of Consumer Price Index, All Urban Consumers, All Items.
Disposal Element Cost Percentage change from current to past year of the City approved tip fee; or if the hauler uses its own landfill and the City has approved of its use, then the disposal element change is limited to the same percentage change of items 1-5 above.
City Services
Free collection from City owned, rented, or leased facilities and parks, and City projects, bus stops/shelters (approximately 25 locations), City sponsored community events (approximately 6 events/year), and from City directed community clean-up events (15 events/year)
Hauler provides staff at City sponsored community events (2 events/year)