Rancho Palos Verdes City Council






Staff Coordinator: Lauren Ramezani, Sr. Administrative Analyst


  1. Consider responses to City's RFP for waste hauling services from Waste Management of Los Angeles;
  2. Approve negotiated services and rates for a 10- year contract with Waste Management of Los Angeles, for exclusive residential solid waste,
    recycling and greenwaste collection in Service Area A, and an exclusive
    contract with Waste Management of Los Angeles for exclusive Citywide
    commercial and rolloff collection in Service Areas A and B; and
  3. Direct staff to finalize the draft agreements with Waste Management
    of Los Angeles incorporating the approved services and rates and continue the discussion of the item to December 5, 2006.


In the past several weeks, extensive negotiations and discussions with Waste Management of Los Angeles (WM) as suggested by the City’s trash subcommittee, and carried out through the City consultant and staff has resulted in a negotiated proposal for various services and rates. Staff recommends accepting the attached proposed/negotiated services and rates with Waste Management of Los Angeles (WM) for single-family and multi-family (Service Area A) and commercial services in the City (Service Areas A & B). WM has proposed a 3-cart automated collection method (with exception in small areas).

Currently WM is the exclusive residential hauler for Service Area A. Area A represents 95% of the City. UWS is the exclusive residential hauler for Service Area B. That area represents 5% of the City and includes the Portuguese Bend and landslide area, and areas south of PVDS.

Initially WM proposed monthly rates, which were significantly higher than the current rates (100% increase). Subsequently, meetings and negotiating were conducted with WM for several weeks, leading to reducing WM’s rates and/or eliminating various fees.

Through the negotiation process, WM offered total concessions of over $1.5 million/yr.

The City’s trash subcommittee, staff and the City consultant compared the recommended rates with the few other cities with similar collection frequencies, (but also taking into considering each cities advantages and disadvantages in geography, topography, unlimited collection, container quality and quantity, distance to disposal facilities, bulky item/e-waste collection) and were satisfied with the results. (See comparable services and rates attached on Exhibit C)

Additionally, based on the feedback received from residents, services offered by WM are considered excellent, and the City has received many positive feedback (via e-mails, letters, and phone calls) and requests from residents to keep WM as the City’s primary residential hauler. A summary of rates representing the majority of WM’s customers is listed in Table 1 below:

Table 1
Comparison of WM’s Current, Proposed/Negotiated Monthly Rates

No. of Customers

Service Level

Current Monthly Rate

Proposed Monthly Rate*

Negotiated Monthly Rate*


Twice/week Curbside

($21.21/mo plus $0.26 for fuel)




Twice/week Backyard (optional)

($26.75/mo plus $0.26/mo for fuel)


$58.00 ($33+$25)


Twice/week Pup Route

($25.41 plus $0.26/mo for fuel)


$33.00 for Curbside
$58.00 for Backyard

Once/week Curbside (Hilltop Cir., Vista Madera and Tierra)

($16.64 plus $0.26/mo for fuel)



Additional Bulky Waste Collection

(over 3/year)

(over 4/year

(over 4/year)

Senior Discount




Annual Pre-Payment Discount




3x/wk Multi-family 3- CY Bin

$124.40 ($124.14/mo plus $0.26/mo for fuel)



* Initially proposed rates were later reduced after negotiations


The City currently has two exclusive residential franchise agreements: one with Waste Management of Los Angeles (Area A) and the other one with Universal Waste Systems, Inc. (Area B). Both agreements expire on June 30, 2007. The City has the option to extend the residential franchise agreements in one-year increments, up to a maximum of three times.

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 non-exclusive agreements are not renewed by the City.

In December 2000, in accordance with Public Resources Code 49520, a mandatory 5-year notice of non-extension was issued to RPV’s authorized haulers. Subsequently on December 20, 2005, the City Council decided to accept no new commercial haulers in 2006.

On February 7, 2006, the City Council directed staff to work with the City’s Residential Trash/Waste Hauling Contract Ad Hoc Committee (trash subcommittee), composed of Councilmembers Stern and Gardiner, to develop options with City Council and public input for future contract negotiations and service alternatives. The subcommittee met on March 29, 2006, and recommended issuing a Request for Proposals.

On May 16, 2006, the City Council authorized R3 Consulting, Inc. to prepare a Request for Proposals (RFP) for residential and commercial solid waste and recycling services and assist the City in the evaluation processes, and directed staff to prepare and present a draft RFP back to Council. On June 6, 2006, the City Council authorized staff to finalize the Request for Proposals and circulate the RFP. The City Council directed staff to include a large number of options in order to give the City the maximum number of "priced-out" alternatives.


The RFP was released on June 14, 2006. Proposals were due on September 12, 2006. The RFP had various service options and requested proposals to include:

  • Rates for both once and twice a week trash collection
  • Rates for both flat and variable monthly fee structure, and
  • Rates for both one exclusive commercial hauler and for up to four commercial haulers

A mandatory pre-proposal meeting was held on June 29, 2006. A total of 20 different large and small hauling companies attended the meeting. A mandatory site walk, (a drive-thru to different areas of the City, including the Portuguese Bend and Pup route areas) was also conducted that same day.

Due to the complexity of the proposals, time needed to calculate all the cost options, and requests from both WM and UWS, the proposal due date was changed to September 26, 2006.

In April 2005, the City initiated two automated 3-cart pilot programs (one in the eastside and one in the Westside of RPV). These two successful pilot programs allowed the City to see if (and how) a cart system would work in RPV, and how to deal with issues of steep streets, lack of curb space, cart placement and storage, cart delivery, etc. The pup route area (due to narrow streets, etc) was not part of the pilot program. A survey sent to the pilot area showed an 86% satisfaction rate by the respondents. Currently two Councilmembers (Councilmember Gardiner and Mayor pro tem Long) out of the City’s five Councilmembers are in the pilot programs.

On September 26, 2006, the City received proposals for the City’s RFP for residential and commercial trash and recycling services. Despite intensive effort from staff and City consultant, and substantial initial interest and attendance at the mandatory pre-proposal meeting, from various haulers, only two haulers responded with proposals.

One proposal was from Universal Waste Systems, Inc. (UWS) for residential collection in Service Area B, and the other from Waste Management (WM) for residential collection in Service Area A, and for Citywide commercial collection. The proposals from both companies were checked, and found to be complete and in conformity with the City’s RFP submittal requirements. Interviews were conducted with both companies on October 3, 2006.


Several haulers (Allied/BFI, Burrtec, Consolidated, etc) had attended the pre-proposal meeting. They were contacted to see why while initially interested in proposing, they did not propose.

They made these statements:

  • Because the City Council has the option to extend the current contracts and the current customer rates are low, potential vendors believed the City Council would extend the current contracts rather than enter into new contracts at higher rates.
  • The RFP contained multiple service and price options that resulted in a complex proposal. Haulers would have to provide up to 32 different proposed rates. Therefore, haulers were not sure if all their proposal preparation time and cost would lead to positive results.
  • The current monthly rates are low, and proposed rates would not be that low.
  • The RPV service area is a difficult area to provide cost effective services due to topography, access, and distance to solid waste disposal facilities.



  • Approximately 98% of WM customers would receive a significant rate increase on July 1, 2007 (See Table 3), which is a rate increase of over 100% (from $21.21 to $43.11/mo).
  • WM only proposed to provide residential services in its current service Area A, and did not propose on UWS’s Area B.
  • WM proposed automated collection only, with various size carts (not the current manual collection method). The fee will be a flat fee.
  • The Pup route and areas/streets with geographic or topographic challenges (narrow and steep streets etc) will be serviced manually (if necessary), or automated (if possible). WM will determine the route suitability.
  • WM also proposed on providing Citywide commercial and roll-off services. WM is the sole proposal for Citywide commercial hauling.
  • WM would provide new containers and "like-new" two-rear axel collection vehicles (10% lighter and smaller with low emission diesel fuel). The trucks would be 9-10 years old, but fully overhauled.
  • WM proposed to re-route residential collection to reduce truck traffic, reduce collection hours to avoid school times and peak traffic patterns, and reduce truck traffic in the border street areas (through re-routing).
  • Customers would be able to choose the size, and number of trash, recyclables, and green waste carts they need. The carts would be suitable for automated or semi-automated collection.
  • WM would divide its service area in two areas within the City, with collection in one area on Mondays and Thursdays, and the other area collection would be on Tuesdays and Fridays.
  • WM only provided rates for unlimited collection with a flat fee. They did not propose on a variable (pay-as-you throw) fee.

Table 2 below compares WM’s current to originally proposed monthly single-family rates.

Table 2
WM’s Current vs. Originally Proposed Service Rates

Service Level

No. of Customers


Current Rates


Original Proposed

Flat Rates- WM

Unlimited trash cans

Unlimited trash carts

2/week curbside


$21.21 (plus $0.26 for fuel)


2/week backyard




1/week curbside






WM stated several reasons for their substantially higher rates:

  • WM claims they are losing over a $1.2 million/year ($100,000/mo) on their current contract with the City, and are not interested in a contract extension. WM claims they are financially better off defaulting on the City requirement of a contract extension (beyond July 1, 2007) and surrendering their $500,000 performance bond to the City.
  • WM’s current rates are low for the level of services provided (refer to comparison chart Exhibit C). Due to the current rate adjustment formula, in the past 6 years (from July 2000 – July 2006) WM’s rates have increased only by 9.9%. Cumulative CPI has increased 21% since 2001. Fuel has increased from $1.51/gallon to $3.10/gallon since 2001 (100% increase). Landfill tip fees have increased from $18.19/ton to $24.43/ton since 2001 (32% increase).
  • Several trash hauling companies, including WM, are transitioning to making sure each franchise area is profitable, rather than focusing only on increasing market share. These days few larger sized haulers are willing to underbid each other in order to get or keep a City contract.
  • Increased costs of WM to provide discounted, "free services" and fees paid to the City. They included proposed City’s services (servicing City facilities, parks, open space, etc), recycling (CRV payment) fees, Infrastructure Maintenance fee/Road Impact, senior citizen discount, city grants, and Collector Fee.
  • RPV’s large homes and yards increase trash and green waste disposal costs, and RPV’s remote location and distance from disposal sites/landfills, adds to transportation costs.


Staff and the City’s consultant briefed the City Council Trash Subcommittee on October 3, 2006. Since the proposed rates were double the current rates, the extension option was discussed.

Extension Option: The City has the unilateral right to extend the term of the Agreement for a total of 36 months (Agreement Section 2.4). This can be done all at one time, or as three one-year extensions. If the City is going to exercise this option, it must notify WM in writing, no later than 180 days prior to the initial termination date. That means by December 30, 2006, the City must notify WM of its exercise of the extension option. However, WM has indicated that it would oppose any attempt by the City to exercise this option and that it is willing to forfeit its $500,000 performance bond.

If WM refuses to perform during the extension period, the City would be entitled to seek injunctive relief, per Section 10.2 of the Agreement. That means that the City could file a lawsuit and seek a court order directing WM to perform pursuant to the Agreement. If the City were successful in obtaining injunctive relief, it would also be entitled to have WM pay the City's attorney’s fees, per Section 11.17 of the Agreement. This type of relief, which is called a mandatory injunction, probably would be granted for a period of time sufficient for the City to go out to bid again and transition to a new solid waste company. However, since the City already is in that position now, and since WM has agreed to extend the contract for an additional year at a rate of $35.70 per month per household. This higher rate was to compensate WM for increases in fuel, operations cost, profit, etc. Staff does not recommend filing a lawsuit because it may not yield a better result than the options that currently are available to the City.

The City Council Trash Subcommittee provided the following suggestions to City Staff:

  1. Negotiate to reduce WM’s proposed rates:
    1. Shift the pup route services (if possible) to UWS.
    2. Clarify that the Recycling Fee (CRV), Grants, and Road/infrastructure Impact Fee are pass through amounts and should not be considered as part of WM gross revenue.
    3. Clarify that the Collector Fee is 10% calculated against WM collection services revenue (excludes Recycling Fee, Grants, and Road Impact Fee). The Collector Fee was previously called the Franchise Fee and/or AB 939 fee. Determine if granting WM a single contract for all commercial, roll-off, and residential collection (Service Area A) will result in lower residential rates (per the RFP).Develop an option to phase-in any rate increases over 3 years (instead of all at once).
    4. Develop an option to extend the contract term to 10 years (draft agreement is 7 years base plus 3 year option). Since Puente Hills Landfill is anticipated to close in about 7 years, disposal locations will be farther and less available, therefore disposal rates would increase. This would "lock-in" better rates.

    For items a – f above, WM will provide revised pricing for: 1) unlimited flat rates, and 2) variable rate for 35, 64, and 96 gallon trash cans (per the RFP).

  2. Negotiate to extend the existing contract:
      1. Maintain the same services/service level as is currently provided but negotiate with WM on specific dollar amount increase and termination date for any contract extension (from 12 – 36 months).
      2. Request a monthly rate that is mutually agreeable.

Analysis of WM’s Initial Response to Negotiations:

  • Monthly Rate to Extend the Current Contract: WM proposed a monthly rate of $35.70 (current rate is $21.21, plus $0.26 for fuel)) for a one-year extension. WM has maintained that the combination of the City’s rate adjustment methodology in the current contract, increased costs to provide "free" City Collection Services, higher fuel costs, and higher disposal costs, have resulted in monthly losses of approximately $100,000 (or $1,200,000 annually).
  • Response to Reduce Proposed Rates: WM rejected all items (b-e) that would reduce WM’s profit.

WM’s responses to the subcommittee’s negotiation items were as follows:

Table 3

Initial Negotiation Item

Initial WM’s Response

Extend the current contract at the same service levels

Yes, if the extension is no longer than 1 year, and the rate is increased from $21.21/month to $35.70/month on July 1, 2007.

Items a-f below address requested changes to WM’s proposed rates.

  1. Shift the pup route services to UWS

Yes. (UWS originally was OK with this, but later changed its position).

  • Establish the Recycling Fee (CRV), Grants, and Vehicle Impact Fee as pass through amounts and not be considered as part of WM gross revenue.
  • No.

  • Calculate the Collector Fee (10%) against WM collection services revenue (excludes Recycling Fee, Grants, and Road Impact Fee).
  • No.

  • Grant WM a single contract for all commercial, roll-off, and residential collection in Service Area A (exclusive hauler could allow costs to be moved between residential and commercial customers).
  • No reduction in residential rates because the commercial service sector is too small.

    The benefits to the City are better financial and program reporting, increased commercial recycling, better routing, fewer collection trucks, and reduced management oversight.

  • Option to phase-in rate increases over 2-3 years
  • No. Unless new carts are not provided until the end of the phase-in period

  • Extend the contract term to 10 years (draft agreement is 7 years base, plus 3 year option).
  • No response.

  • Provide variable rates for 35, 64, and 96-gallon trashcans.
  • WM will provide variable rates on October 20, 2006.

    Second Subcommittee Meeting

    On October 17, 2006, staff met with the Council Subcommittee a second time. The Subcommittee was informed that WM had made mathematical errors in calculating the City Collector Fee. Correcting WM’s errors and proposing to remove some fees resulted in a re-calculated monthly rate of $33.01. (see Table 5)

    Establishing the hauler payments to the City as a "Collector Fee" set by the City as a percentage of gross revenue provides the City with greater flexibility in determining payments to be received. As proposed, the Collector Fee percentages are 10% for residential customers and 16% for commercial customers.

    WM had not proposed on variable rates. In response to the subcommittee’s second request, WM provided the information on October 22, 2006. The variable rates do not seem as attractive as the flat fee. The rates proposed for one medium size cart is as much as the recalculated flat fee (unlimited trash) rate of $33.01.

    WM’s Proposed Variable Rates were:


    TABLE 4


    Size of container

    Standard trash container

    2+ trash containers

    35 gallon


    $6.00 each

    65 gallon


    $8.00 each

    95 gallon


    $10.00 each


    After explaining WM’s responses, staff received additional suggestions from the Subcommittee. The Subcommittee concurred with Staff’s recommendations that: (1) giving WM notice that the City wants to extend the existing agreement and filing a lawsuit against WM if it refuses to honor the notice of extension was not in the interest of the City or its residents; (2) negotiating a new contract with WM might produce better results than going out to bid again, because WM’s negotiated rates are at market level for the deluxe level of service that is being provided to the City’s residents, and (3) negotiating a new contract with WM was preferable to extending the contract for one year, since the rates would be less in the longer contract.

    Below are results from both meetings are:

    Table 5

    Subcommittee’s Initial Suggested Negotiation Items

    WM’s Initial Response

    Sub Committee’s 2nd Suggestions

    WM’s Final Response

    1. Extend the current contract at the same service levels

    Yes, if the extension is no longer than 1 year, and the rate is increased from $21.21/mo to $35.70/mo on July 1, 2007.

    Reject this option.

    No action needed

  • Negotiate with WM to reduce their rates. Also get a breakdown of the impact of each fee and discount on rates. See which ones can be deleted to reduce rates
  • WM rejected all items that would reduce WM’s profit. WM did however, suggest reducing the rates by removing items such as: recycling fee, senior and pre-payment discounts, etc.

    Accepted staff’s recommendation to delete the Pup route, road impact fee & recycling fee. Keep senior discount, pre-payment discount and free City services. Correct WM calculation errors. Increase City residential Collector fee from 10% to 11% to offset City revenue losses, and rates would increase only by $0.30/mo. Offer WM the re-calculated 2/wk rate of $33.01/month. Get WM’s approval.

    Yes.* and keep the Recycling fee (for Beautification grants). WM corporate office approved rates on October 24, 2006. Residential collector fee stayed at 10%.

  • Shift the pup route services to UWS
  • Yes. (UWS is possibly OK with this, but has to look at it in detail).

    Talk with UWS to shift route

    Initially agreed. However, due to complications with UWS truck’s capacity, WM kept the pup route.

  • Grant WM a single contract for Citywide/ exclusive commercial and roll-off services, and residential collection in Service Area A (by being an exclusive hauler could allow costs to be moved between residential and commercial customers).
  • No reduction in residential rates because the commercial service sector is too small. WM stated that the benefits to the City by having one exclusive commercial hauler are: better financial and program reporting, increased commercial recycling, better routing, fewer collection trucks, and reduced management oversight.

    Ask WM if a re-calculated rate of $33.01 vs. proposed rate of $43.11 is acceptable.

    Yes, agreed to $33.00/mo.

  • Option to phase-in rate increases over 2-3 yrs
  • No. Unless carts are not provided until the end of the phase-in period.

    Reject this option

    No action needed

  • Extend the contract term to 10 years (draft agreement is 7 years base, plus 3 year option).
  • No response.

    Offer a 10-year contract if re-calculated lower rate is acceptable.

    Yes, WM agreed to a 10-year term, with three 1-year options. (the options facilitate continuing WM’s services/rates if residents are happy with WM)

  • Provide variable rates for 35, 64, and 96-gallon trash cans.
  • WM will provide variable rates within a week.

    Still haven’t seen variable rates. Would like to look at variable rates.

    35 Gallon - $31.00
    65 Gallon - $33.01

    95 Gallon - $35.00.


    Several community meetings were organized to inform residents of the items and requested services in the RFP, and to get feedback and comments. On July 13, 2006, two meetings were held; one meeting during the day (for businesses) and a second one in the evening (for WM customers). On July 17, 2006 a meeting was held in the evening for UWS customers. Staff and the City consultant also attended the September 20, 2006 Council of HOA (CHOA) meeting and informed HOA representatives of the items in the RFP.


    Term: The Franchise Agreement is a 10 -year initial term, plus the option for three annual extensions, upon mutual agreement. This longer term contract helps guarantee the City will have a landfill disposal site, and reasonable rates after the anticipated closure of Puente Hills Landfill in 2013.

    Exclusive Services: The residential contracts are similar to current services. Service Area A (current WM area) and Service Area B (current UWS area). The commercial (including rolloff) services would be exclusive to WM in both Areas A & B. By approving the contact with WM, no other hauler would be authorized to perform commercial and roll-off collection in RPV starting July 1, 2007. Currently 14 various haulers offer various services and rates. The mandatory 5-year notice of non-extension was issued in December 2000. A letter informing current haulers of this Council meeting was sent last week.

    Frequency of Collection: Similar to now, twice/week collection of trash, with once/week collection of recyclables and green waste. Similar to now, trash and recyclables will be picked up on the first collection day, and trash and green waste picked up on the second collection day. The RFP requested collection of all recycling materials on the first pickup of the week. WM proposed to keep the recycling collections as is and not to make changes.

    WM’s proposed rate for once a week trash collection was $38.41, a 12% reduction from the twice a week proposed rate of $43.11. Staff does not recommend the Citywide once a week frequency due to the relatively small price difference. However, there are a handful of condominiums/townhomes complexes (Hilltop Circle, Vista Madera and Vista Tierra) that have curbside collection instead of bin service. They have had once a week trash collection in the past and is recommended to continue accordingly. WM’s monthly rate was negotiated to $28.88/month. (This is similar to RHE’s once/week rate)

    Method of Collection: WM proposed automated 3-cart collection with choices of 32, 64, and 96 gallon cart sizes. Citywide manual collection was not proposed. However, some locations (such as the pup route) due to topographic or other street challenges will have a semi-automated collection. There will be no need for "No Parking" signs on streets during trash days. Similar to the two existing pilot areas, if a street(s) does not have adequate curb space, other accommodations will be made by WM/the route drivers and the homes.

    Residential Containers: WM will provide new containers for trash, recyclables, and green waste collection. These carts are sturdy, with stable wheel and with lids attached. Customers could choose from 32, 64, or 96 gallon containers depending on their individual needs, physical and space constraints. Customer will be provided an unlimited number of trash, recycling and green waste carts free of charge. The carts would be embossed with the City logo, and with the words "recyclables", "trash", or "green waste" (no stickers).

    These carts are similar to the carts used for the past 1 ½ years in the pilot areas. Staff has received a lot of positive feedback from the pilot area residents about the quality, durability, maneuverability and sturdiness of the carts. The carts would have a minimum 20% recycled material content, come with a 10-year warranty against defects, and malfunctioning/defective carts would be replaced or repaired at no cost to the residents.

    Single-Family Extra Green Waste Collection. Similar to now, residents will be allowed to set out bagged or bundled green waste at the curb for collection. Additionally, existing greenwaste cans occasionally may also be used (if necessary) However, residents will be encouraged not to use plastic bags due to possible rejection at some of the greenwaste processing facilities. Additional green waste containers will be available free of charge.

    Single-Family Periodic Trash Overages. Residents will be allowed to set out trash "overage" in their own cans, or by the trash carts once every six weeks without the necessity of an additional hauler provided trash cart. This would help during holiday seasons, and spring or summer time garage/house cleanups.

    Single-Family Backyard Collection. Similar to now, backyard collection would be provided on a subscription service for an additional fee, or at no additional fee if due to physical limitations (qualification criteria to be mutually agreed on between the City and hauler).

    Single-Family Bulky Waste Collection. Curbside collection of bulky waste would be provided on an on-call basis 4/year, with a maximum set out of 5 cubic yards per collection. E-waste would be collected as part of bulky waste collection. Residents would not be allowed to place construction and demolition materials in regular collection carts, or at the curb as part of bulky waste collection. Residents may request backyard collection of bulky waste for an additional fee.

    Rate Structure: The recommended rates would be for FY 07-08. Staff recommends a flat rate structure with unlimited trash collection and unlimited number of containers. The flat rate offers more flexibility and would be more economical that WM’s proposed variable rates, Table 4. The proposed variable rates (pay-as-you-throw) were: $31.00 for 35 gallon, $33.00 for 65 gallon, and $35.00 for 96 gallon. Each additional trash cart will cost extra.

    Collection Days: WM will re-route the City to operate more efficiently. Instead of trucks criss-crossing the City 4 days a week, WM proposed to service one side of the City on two days, and the other side of the City on 2 other days. This should help reduce road wear and tear. As a result, 50% of homes will keep their current collection schedule (25% in the Westside and 25% in the eastside) and 50% would have a new collection schedule (25% in the Westside, and 25% in the eastside).

    Trucks: Residential collection trucks will be limited to no older than 10 years or 250,000 miles, maximum loaded weight of 50,000 pounds, and load capacity of 32 cubic yards. This is reduced from the current 58,000 maximum weigh and 40-CY capacity. Commercial (bin) trucks will have a loaded weight maximum of 53,000 pounds and 40-CY capacity. This reduced weight should help reduce wear and tear on the City streets.

    Pup Route: Approximately 357 current WM current customers receive pup truck service due to topographical considerations, narrow or steep streets, or safety concerns (fire truck access, minimum street width, etc.). The rates for pup truck service and regular truck service will be the same. The curbside pup rate would be the same as the curbside regular rate. While the backyard pup rate, would be the same as the backyard regular rate. The pup customers will also receive new carts that will work with either automated or semi-automated trucks. One significant change to the pup route will be that green waste will be collected separately and recycled. Right now green waste (due to truck space constraints) is collected as trash and not recycled.

    Discounts: Senior citizen discount of 10% and annual prepayment discount of 7% will be provided. The values of these discounts are approximately $117,000/year. Seniors (residing in the house and head of household) would have to fill out an application in order to qualify, and renew the application once every 5 years.

    Minimum Diversion Rate: WM will be required to divert a minimum of fifty percent (50%) from the total of all single-family residential, multi-family residential and commercial material and roll-off material collected under the scope of the exclusive franchise agreement. It the diversion requirement is not met, WM would be required to implement additional recycling/waste reduction programs.

    Collector Fee (previously called Franchise and/or AB 939 fee): WM will be required to remit 10% of the gross revenue collected (quarterly) for providing residential services (estimated at $478,700/year), and 16% for commercial services (estimated at $133,600/year) as a Collector Fee. The gross revenue would include all revenue received from single-family, multi-family, commercial, roll-off and industrial collection services, and additional revenue received for push rates, bin rental charges, extra collection services, service stop/start fees, and late fees. Including a percent of gross revenues instead of a fixed amount would more accurately reflect the revenue due to the City with additional housing and commercial developments.

    Recycling Fee: Similar to now, WM will be required to make quarterly payments of 100% of the California Redemption Value (CRV) revenue received from the City’s overall recycling programs. The current estimated CRV payments are approximately $221,000 annually. This revenue is to help with the City’s Beautification Grants and median improvement projects.

    Miscellaneous Grants and Rebates: Similar to now, WM will reimburse the City for any grant monies or rebates (typically $30,000-$40,000/year) the contractor receives from the State as a result of providing curbside recycling or other services to the City.

    Infrastructure Maintenance Fee (Road repair/Maintenance Fee): After negotiations, this item was deleted in order to reduce rates. This was to be a new revenue source equaling a total of $320,000, and was to offset the sharp increase in the cost of material (asphalt/concrete) to repair the City’s roads wear and tear (especially due to heavy trash trucks operating on the City’s streets).

    Annual Rate Adjustments: The recommended rates are for FY 07-08. The compensation paid to the contractor would be adjusted annually after that using a multi-indexed rate methodology that uses annual changes (increases or decreases) in five nationally published commodity and price indices. (i.e., diesel fuel, trash truck capital, trash truck driver labor, etc.), and changes in Los Angeles County landfill disposal charges. This should help properly reflect increase and avoid extraordinary rate increases.

    Performance Bond: WM would be required to submit a Performance Bond (renewed annually) in the amount of $700,000.

    Insurance: WM would be required to maintain minimum insurance coverage of $3 million for combined single limit per occurrence, $5 million for aggregate limit, $5 million for automobile/vehicles, $3 million for hazardous waste and environmental impairment liability, and worker’s compensation and employers’ liability at the statutory limits.

    Liquidated Damages: The franchise agreement contains liquidated damages ranging from $100 - $15,000 for non-compliance with specific contractual requirements.

    Border Street Compatibility: There are several streets that border Rolling Hills Estates. By re-routing the City, WM will (upon agreement with RHE) reduce truck traffic in these affected streets from 7 truck passes a week to 4 truck passes per week.

    Single-Family Used Oil Collection. Similar to now residents will be able to set out used oil and motor filters for collected weekly with used oil containers and filter bags provided by WM at no cost.

    Multi-Family and Commercial Services. Multi-family and Commercial services include both bin services to businesses and various size rolloffs for businesses and residences. Multi-family and commercial collection bins would be available in 1– 6 cubic yards, 10–40 cubic yard roll-off boxes, and carts would be available in 32– 96 gallon capacity. The collection frequency would be based on the customer’s needs.

    Notable under this agreement is that commercial recycling services would be included as part of solid waste collection. Commercial customers may request recycling bins or carts for the collection of commingled recyclables. There would be no additional charge to customers for the provision of commercial recycling services.

    Staff will send letters to the City’s current 14 commercial haulers notifying them of the Council’s decision. Changes (if approved) would be effective July 1, 2007.

    City Services. Similar to now, WM will continue to offer the City various collection services at no charge. These services include free collection from City owned, rented, or leased facilities and parks, free collection from City sponsored community events (approximately 6 events/year), free collection from City directed community clean-up events at open spaces, etc (15 events/year), free collection from bus stops/shelters (new item-approximately 25 locations), and the contractor would provide staff at City sponsored community events (new item-2 events/year). The value of these services could be estimated at $240,000/year.

    Billing Services. The contractor would continue to provide billing services to residents and businesses. For non-payment, WM can reduce the level of service to the minimum, one trash cart/bin (no recycling, green waste collection, bulky waste, used oil, etc.), but must continue to provide trash collection. For both residential and commercial billing, if services are reduced due to non-payment and payment is made later on, hauler may charge $50.00 fee to restore full service. The contractor may only collect past due amounts for non-payment for the prior 12 months, and the contractor may use a collection agency for past due accounts. The City is not responsible for collecting past due accounts.

    Hours and Days of Collection. Residential collection hours will be Monday – Friday from 7:30 a.m. – 6:00 p.m. Saturday collection is only allowed following a City-approved holiday, and collection on Saturday is limited to 9:00 a.m. – 4:00 p.m. WM is subject to liquated damages ($1,000) if holiday collection is not done on the schedule approved by the City. Collection hours are further reduced to 3:00 p.m. around schools and high traffic areas in order to have the trucks out by end of the school day and before the afternoon rush hour.

    Commercial collection will be Monday – Friday from 7:30 a.m. – 7:00 p.m., and Saturdays from 8:00 a.m. – 5:00 p.m. The City may limit the hours for commercial collection if commercial collection is within 100 feet of residential dwellings, or if the City has received repeated noise complaints from neighboring residents about the commercial collection services.

    Holiday Collection. There will be no collection on 6 major holidays: Christmas, New Year, Memorial Day, Independence day, Labor day and Thanksgiving Day. All holiday collection schedules or changes will have to be approved by the City.

    Cart Distribution. New carts will be distributed prior to July 2007. A detailed public education and schedule will be prepared a few months in advance. Residents will select the cart sizes and quantity of carts per material. A default size of one 65 gallon cart per material will be delivered to homes that have not made a specific size selection. Any cart size changes/adjustments (if necessary) will be made 1-2 months after program implementation.

    Pilot Areas. The pilot area homes already have the carts and are familiar with the system. Their collection days may change similar to other areas of the City. If staff’s recommendations are approved, starting July 1, 2007, the services offered throughout the City by WM (with the exception of Pup route, and a few other challenging areas) will become similar to the pilot areas.

    Universal Waste Systems, Inc. A separate staff report will discuss UWS’s proposal at the same November 7, 2006 City Council meeting.


    1. Reject WM’s proposal and issue another RFP. However, the RFP would have to be with a minimum number of options in order to attract more proposers. Additionally, with the current contract expiring on June 30, 2007, it will be a very tight timeframe. However, more importantly, there is no guarantee that by issuing a new RFP the City will receive better responses, or more proposals from other haulers, or get lower and/or more competitive rates.
    2. Reject WM’s proposal, and issue an extension notice for 1-3 years. However, the City Attorney and staff do not recommend this alternative.
    3. Reject WM’s proposal, accept WM’s proposed one-year extension rate and then, issue another RFP. However, staff does not recommend this option.


    Approving the proposed customer services, and rates, and the City fees would bring these total estimated revenues (from WM and UWS) to the City:

    Revenue Source

    (from WM and UWS)

    Current Rates Est.

    Proposed Rates Est.

    Fund Deposited In

    Residential Collector Fee (10%)


    (WM $332,000 +UWS $13,000)

    $508,500 **

    (WM $478,700 + UWS $29,800)

    General Fund

    Commercial Collector Fee (16%)



    (WM $133,500 + UWS $0)

    General Fund

    Recycling Fee

    (100% of CRV)



    (WM $221,000+ UWS $20,500)

    Beautification Fund

    State/DOC Cash Back Incentives



    Waste Reduction Fund




    * The current residential Collector Fee was a set amount based on calculations made in 1999, and it has not reflected the additional new homes or accounts. Additionally, in 1999 the Collector Fee was calculated and set based on rates that were substantially lower than the proposed 2007 rates.

    ** This increase in fees reflects the higher monthly rates, and additional new homes and developments.

    The new agreements will be effective July 1, 2007. The total estimated amount (from both WM and UWS) of $642,000 will be deposited in the General Fund, and total estimated amount of $283,000 will be deposited in the Beautification Fund to continue the Beautification Grant and median improvement programs. In UWS’s staff report, the same revenue amounts are outlined.

    Respectfully Submitted:

    Jim Bell, Director of Public Works

    Reviewed by:

    Les Evans, City Manager

    WM Proposed/Negotiated Rates -- July 1, 2007
    Single-Family Residential Collection

    Twice/week Curbside Collection


    Once/week Curbside Collection (Hilltop Cir, Vista Madera & Tierra))


    Subscription Back Yard Collection 2x/wk

    $25.00 + base rate/month

    Additional Large Item Collection (over 4 times/year)

    $25.00/each collection

    Back Yard Collection of Large Items

    $25.00/each collection

    Additional or Excess Cart Exchange

    $50.00/each occurrence

    Annual Pre-Payment Discount


    Senior Discount


    Manure Collection – 65 gallon cart

    $42.91 for 1/week collection

    Manure Collection –1.5 CY Bin

    $152.00 for 1//week collection

    Manure Collection – 2 CY Bin

    $202.00 for 1/week collection

    WM Proposed/Negotiated Rates -- July 1, 2007
    Multi-Family Residential Collection

    Container Size

    Collection Frequency

    1X Week

    2X Week

    3X Week

    4X Week

    5X Week

    6X Week

    2 CY








    3 CY








    4 CY








    5 CY








    6 CY








    20, 30, 40 CY Roll-off, 10 CY Lowboy, Compactors


    1X Week

    2X Week

    3X Week

    4X Week

    5X Week

    6X Week








    Push Rates

    0-100 ft

    101+ ft

    Cart or Bin Cleaning Each Occurrence




    WM Proposed/Negotiated Rates -- July 1, 2007
    Commercial Collection

    Container Size

    Collection Frequency

    1X Week

    2X Week

    3X Week

    4X Week

    5X Week

    6X Week

    1.5 CY







    2 CY







    3 CY








    4 CY







    6 CY








    20, 30, 40 CY Roll-off, 10 CY Lowboy, Compactors


    1X Week

    2X Week

    3X Week

    4X Week

    5X Week

    6X Week








    Push Rates

    0-100 ft

    101+ ft


    Cart or Bin Cleaning Each Occurrence




    WM Proposed Rates -- July 1, 2007

    Emergency Service Rates

    Emergency Service Rates - Employees

    Labor Position


    Hourly Rate

    Utility Labor

    Waste Management Employees


    Emergency Service Rates - Equipment

    Equipment Type

    Make & Model

    Hourly Rate

    Bulky Item Pick-up