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HomeMy WebLinkAboutAgenda Report - December 19, 2007 K-06AGENDA ITEM V*0 (0 AL CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Authorize Staff to Commence Negotiations with Central Valley Waste Services (Waste Management)to Exercise Contract Renewal Option MEETING DATE: December 19,2007 PREPARED BY: Public Works Director RECOMMENDED ACTION: Authorize staff to commence negotiations with Central Valley Waste Services (Waste Management) to exercise contract renewal option. BACKGROUND INFORMATION: Under the existing franchise agreement for solid waste services with Central Valley Waste Services (Waste Management), the City has the option of renewing the agreementfor seven-year increments by giving notice no later than 12 months prior to the expiration of the current term. The current term of agreement is set to expire on March 31,2010,so a notice of renewal must occur before March 31,2009,yet it is not too early to begin discussions on the next contract term and its conditions. Per Public Resource Code 40059 (copy attached), the City may determine the solid waste services to be provided without competitive bidding. The City has traditionally negotiated solid waste franchise agreements and renewals with Central Valley Waste Services and its predecessors. In preparation for this discussion, staff recently conducted a survey of surrounding cities to compare rates and services included in their contract, franchise fees and whether or not their current contracts were bid out or negotiated. The majority of the cities surveyed had obtained their current contract through negotiations with the hauler. In comparison with other Central Valley cities, our rates (standard residential) fall in the middle at $21.19 with City of Tracy having the highest rates at $29.45and City of Elk Grove with the lowest at $17.10.Of the cities that had a franchise fee in their contracts, the City of Lodi was the lowest at 4.8% and the highest was City of Stockton at 20%. There was a wide variety of additional services that were included in each city's contract, which ranged from street sweeping, seasonal leaf and Christmas tree collections to dead animal pick-up. There were many of the same components in each city's contracts, such as the city billing for the service and yearly rate increases based on CPI. Of the cities surveyed, only one other city had an agreementwith our same contracted hauler, Waste Management. Attached is the complete survey. Recently, the question of "bid or negotiate?"was circulated on the League of California Cities City Manager's List Source. The informal comments ranged considerably. Certainly, dissatisfaction with a current providerwas a good reason to bid the service. Other reasons for bidding solid waste services included encouraging competition between the haulers and possibly providing the lowest rates. There are, however, downsides to bidding the service as well, such as a tough transition period with a new hauler not only for the City but also for its customers, a possible lack of service consistency, and the high costs in obtaining a consultantfor the bidding process There are many advantages to negotiating, such as adding more services and/or enhancements to the contract while maintaining current costs without having the disruption of changing service providers. APPROVED: i-\ Blair K ity Manager KMP186id Waste\CVWS contract renewal doc 1211312007 Authorize Staff to Commence Negotiations with Central Valley Waste Services (Waste Management) to Exercise Contract Renewal Option December 19,2007 Page 2 And, there is no guarantee of obtaining a lower rate through the bidding process. Most significantly, negotiating with the current provider before the renewal date gives the City the most leverage in improving services within the current rate structure. If Council authorizes commencement of negotiations, staff would allow up to nine months and would provide periodic updates to the Council. If satisfactory terms cannot be reached within this time frame, staff would recommend the selection of a consultant to prepare a comprehensive request for proposals and commence solicitation of proposals. This process would take an additional six to eight months. FISCAL IMPACT: None at this point. FUNDING AVAILABLE: None required. (iL-4 Richard C. Prima, Jr. Public Works Director Prepared by Rebecca Areida. Management Analyst RCP/RAJpmf Attachments cc: Thom Sanchez. Central Valley Waste Services K:IWPISolid WasteICVWS contract renewal.doc 12/13/2007 CALIFORNIA CODES PUBLIC RESOURCES CODE SECTION 40059 40059. (a) Notwithstanding any other provision of law, each county, city, district, or other local governmental agency may determine all of the following: (1) Aspects of solid waste handling which are of local concern, including, but not limited to, frequency of collection, means of collection and transportation, level of services, charges and fees, and nature, location, and extent of providing solid waste handling services. (2) Whether the services are to be provided by means of nonexclusive franchise, contract, license, permit, or otherwise, either with or without competitive bidding, or if, in the opinion of its governing body, the public health, safety, and well-being so require, by partially exclusive or wholly exclusive franchise, contract, license, permit, or otherwise, either with or without competitive bidding. The authority to provide solid waste handling services may be granted under terms and conditions prescribed by the governing body of the local governmental agency by resolution or ordinance. (b) Nothing in this division modifies or abrogates in any manner either of the following: (1) Any franchise previously granted or extended by any county or other local governmental agency. (2) Any contract, license, or any permit to collect solid waste previously granted or extended by a city, county, or a city and county. 40059.1. (a) The Legislature hereby finds and declares both of the following: (1) In 1989, the Legislature enacted this division as the California Integrated Waste Management Act of 1989. One of the key provisions of this division is that each local agency has the responsibility for diverting 50 percent of all solid waste generated within the local agency by January 1, 2000. (2) The public policy objective of the Legislature in enacting this section is to ensure that those local agencies that require an indemnity obligation retain their responsibility for implementing the diversion requirements of this division. (b) For the purposes of this section, the following terms have the following meanings: (1) "Indemnity obligation" means any indemnity obligation directly or indirectly related to the failure of a local agency to meet the solid waste diversion requirements imposed by Chapter 6 (commencing with Section 41780) of Part 2, that is expressly assumed by, or imposed upon, the solid waste enterprise, whether pursuant to ordinance, contract, franchise, license, permit, or other entitlement or right, for the benefit of the local agency. (2) "Local agency" means any county, city, city and county, district, regional agency as defined in Section 40181, or other local government agency. (c) Any provision, term, condition, or requirement contained in any ordinance, contract, franchise, license, permit, or other entitlement or right adopted, entered into, issued, or granted, as the case may be, by a local agency for solid waste collection and handling, including the recycling, processing, or composting of solid waste, or in any request for bids or proposals in connection with any such contract or franchise, that authorizes or requires the imposition of an indemnity obligation, shall, notwithstanding any such provision, term, condition, or requirement, be subject to all of the following restrictions: (1) An indemnity obligation shall not be enforceable if the board imposed penalty is based solely upon the failure of the local agency to establish and maintain a source reduction and recycling element pursuant to Chapter 2 (commencing with Section 41000) of Part 2, Chapter 3 (commencing with Section 41300) of Part 2, or Section 41750.1, as the case may be. (2) Any board imposed penalty based upon a local agency's failure to meet the solid waste diversion requirements imposed by Chapter 6 (commencing with Section 41780) of Part 2, resulting in whole or in part from the solid waste enterprise's breach of contract or noncompliance with any other authorization, shall be apportioned in accordance with the percentage of fault of the local agency and the solid waste enterprise. (3) For purposes of this section, a solid waste enterprise is not liable for the indemnity obligation to the extent that the solid waste enterprise's breach or noncompliance resulted from the action or failure to act of the local agency. (4) No payment required or imposed pursuant to an indemnity obligation, whether required or imposed by ordinance, contract, franchise, license, permit, or other entitlement or right, may exceed that portion of any penalty assessed by the board against the local agency that was caused by the solid waste enterprise's breach or noncompliance of an express obligation or requirement. (5) No indemnity obligation shall be enforceable against a solid waste enterprise until the local agency has affirmatively sought, in good faith, all administrative relief available pursuant to Chapter 6 (commencing with Section 41780) and Chapter 7 (commencing with Section 41800) of Part 2, unless the local agency demonstrates good cause, based on substantial evidence in the record, for not pursuing that administrative relief. The solid waste enterprise shall cooperate, in good faith, with the local agency seeking that administrative relief and shall provide in writing to the local agency all known defenses to the imposition of penalties. (d) Nothing in this section shall be construed to preclude either party from seeking any other remedy under law or equity. (e) The provisions of this section are not subject to waiver, and any attempted waiver shall be null and void as against public policy. (f) This section is not intended to do any of the following: (1) Add to or expand the authority of local agencies to determine aspects of solid waste collection and handling pursuant to Section 40059. (2) Alter the authority of business entities to collect or process materials that are not solid waste. (3) Affect any contract right existing on the effective date of this section. ►gency 3rovider, customer )ase fid or Negotiate? Std. Residential tate Standard Residential Service 'rice Escalation 'rovision lilling (by City or '-ontractor?) Additional Services Included Landfill info � ranchise W Nversion Zate ity of Lodi 'entral Valley Waste Services legotiated current contract $21.19 3-cart system, 38 gal. reftrsi 'early increase by gilled by City on utility bill Source Reduction &recycling Element & 'ontract specifies that al 4.80% 58% Waste Management); All ith WM prior to expiration I week, alternating ercentage amount equal t related documents; Illegal dumping pickul materials except items esidential and commercial f the existing contract at the recycling/garden 1 x week 0% of the annual change on public & railroad property; annual etained for recycling does not include defined me. r the Consumer Price curbside collection; annual transfer station nust be taken to North ndustrial customers) idex voucher; annual dump @ reduced fee; Cit} 'ounty Landfill or other leaf disposal up to 1,200 tons/year; ites that City may payment for billing services; low income esignate discount 'ity of Vaste Management & Allied Ve had WM and F19.75 per month for 30 3 cart system, weekly Annual rate adjustment For residential, billed by Annual Neighborhood Clean Sweep (bulky 20% (franchise 54% tockton Vaste have exclusive residenti .W separately submit gallon wheeled cart, service of 60 gallon ;ach June 1, equal to 5011 ither the City of Stockton or item pickup including CRTs, E-waste, and ee)+ 3.5% (AE k commercial franchises. On rices for each service. We 625.00 per month for 60 Recycling cart, 90 gallon of the change in the California Water Service. appliances); Twelve extra service stickers 939 fee) he residential side, WM's ien accepted the low bid for gallon wheeled cart, 3reen & Food waste cart, B Consumer Price Index fo NM & AW bill commercial. per year to use for free extra waste pickup: ranchise covers east of El ach service $30.24 for 90 gallon ustomer choice of 30-60- San Francisco, Oakland, Seasonal leaf collection; Christmas Tree Dorado Street & AW's covers vheeled cart If customer SO gallon Trash cart (if San Jose for all urban Collection & recycling; Senior discount; vest of El Dorado Street. On tl does not specify their ustomer does not specify consumers. City-wide street sweeping services. All ;ommercial side, WM & AW olid waste cart size, the! they receive a 60 gallon City owned facilities receive free service; ranchises cover entire City. receive a 60 gallon cart trash cart). C.I.W.M.B. Annual Report preparation; ,ranchises do not include by default. Free service for 5 special events per year & ndustrial manufacturing & 6 community clean up events per year p1w ;onstruction & demo. post-event street sweeping. ;ollection. ,gency 'rovider, customer fid or Negotiate? ;td. Residential standard Price Escalation 3illing (by City or Additional Services Included Landfill info +ranchise diversion lase tate tesidential Provision lontractor?) +ee tate 'ervice ity of Tracy racy Delta Solid Waste he last contract was $29.45 -cart system, 60 gal. refuse No provision. According tc Monthly billing is a function Exclusive Franchise Agreement is also tied The City of Tracy owns 8.00% 67% lanagement, Inc (Tracy egotiated in 2002-2003 by x week, alternating contract staff will ask of the City. to City MRF. Disposal Co. also operates the Material Recovery ,isposal) All residential, VA Consultants ecycling/garden lx week Council for rate increase the MRF and ensures compliance of all Facility (MRF), but is idustrial and commercial accts approval when needed, solid waste regualtions inlcuding on-site privately operated. We according to bond composting. Additional services include have a three party convenants and fund free cardboard/paper pick up for residential agreement with San balance. and commercial customers, free Christmas Joaquin County, City of tree pick-up program, large appliance Tracy and Mountain disposal voucher program; Spring and Fall House for landfill and Clean-up;leaf-pick-up;free city use of MRF usage with Tracy MRF. Customer Service is also provided Disposal. In addition, wi ,y the company at a local location. have a contract with the County when the Corral Hollow landfill shut down. Ik Grove flied Waste fegotiated current contract 32 gallon - $17.10 -cart system. Resident 4o provision. According 3illed bi-monthly by Utility Annual Neighborhood Clean-up; free Wste is forwarded to 10.00% 59% pith Allied. Contract terms 64 gallon - $19.78 hooses the size cart they contract staff will ask Billing Dept. dump coupon at Elder Creek Transfer Froward Landfill in 011. 96 gallon - $S25.15 vould like upon initiation Council for rate increase station 1 x per year; Free a -waste events 4x Manteca f service. Cart sizes approval annually. per year; holiday tree collection; vailable are 32 gal, 64 gal composting classes 4 x per year; curbside nd 96 gal. Trash is oil and used oil filter pickup; household erviced weekly..recycle hazardous waste facility access free of nd green waste rotate charge; up to two recycle and 2 green very other week. waste carts fre of charge; seniors and alt alifomia Waste Recovery & legotioated. Extended $20.41 -cart system, 64 gal. refusf innual adjustment based o Residential billed by City Curbside e -waste & u -waste collection two Contractor may select an % through Feb 50% ll rights to service residential, ontract with current provic x week, alternating "annual disposal element' times a year, neighborhood clean-up notify City of disposal 008, then 10% ommercial ecycling/garden 1 x week Calculation involving tha services (provide 20 -yard bin for City facility tipping fees paid by events, up to 6 a year), X-mas tree contractor, revenues collection, refuse & recycling services at collected and a refuse rat two City events per year, HHW events up index. to two a year (City responsible for disposa costs), dead animal pick-up, commercial waste audits (24 businesses a year), planning dept. review services, public outreach & education ►gency Provider, customer Bid or Negotiate? itd. Residential Standard rice Escalation �rovision tilling (by City or additional Services Included (Landfill info Franchise Diversion base tate Residential ryontractor?) Fee Rate Service 'itv of Davis Waste Removal Re -negotiated current $25.36 3 -cart system, 90 gal. refuse annualy adjusted, cpi base( billed by contractor treet sweeping,bulky item turn in Unless directed otherwise by n/a 45% )avis Company. Residential and contract. rcycling & garden waste lx less a landfill component. rogram, ity, use Yolo County Commercial week Alternative hi -annual Landfill adjustment 'ity of Gilton Solid Waste and Negotiated - All long tern $19.82 A 96 gallon toter for Rates are reviewed ity bills under contract wit] [/A All waste is flow 10.00% Last CIWMB Bertolotti Disposal have agreements. garbage/recyclables, a 96 annually. No guaranteed (e haulers for residential controlled under the approved rate lodesto exclusive Service Agreements gallon toter for green waste, upward adjustment, ;rvices only. Service Agreements to be was in 2004 at with Service Areas for blue bags for recycling, however, each hauler is taken to the Covanta 54%. residential and commercial kitchen countertop guaranteed an 11.11% Waste -to -Energy Facility services. Industrial waste is container for food scraps, profit margin. open to competition between TV and tire collections, 2 our 3 licensed haulers, bulky items pickups per Bertolotti Disposal, Gilton Solid year. Waste and Bonzi Inc. Bonzi Inc. is only licensed to service Industrial waste ity of Municipally operated n/a $19.78 3 -cart system, 32 gal. refuse 3% annually City E -waste drop-off, battery drop-off, all taken to Forward n/a 50% lanteca 1 x week, alternating appliance pick-up, bulky item pick-up, Landfill recycling/garden lx week curbside oil pick-up, X-mas tree pick-up, Fee 2yd bin once a year to every resident, city-wide street sweeping, seasonal leaf pick-up, extra trash pick-up stickers (3) every year, extra recycling & green waste carts provided free, collection at City wide events (street fair, pumpkin fairm, etc.) CITY COUNCIL JOANNE L. MOUNCE. Mayor LARRY D. HANSEN, Mayor Pro Tempore SUSAN HITCHCOGK BOBJOHNSON PHIL KATZAKIAN CITY OF LODI PUBLIC WORKS DEPARTMENT CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI. CALIFORNIA 95241-1910 (209) 333-6706 FAX (209) 333-6710 EMAIL pwdept@lodi.gov http:\\www.lodi.gov December 14,2007 Mr. Thom Sanchez Central Valley Waste Services, Inc. P.O. Box 241001 Lodi, CA 95241-9501 BLAIR KING City Manager RANDIJOHL City Clerk O. STEVEN SCHWABAUER City Attorney RICHARD C. PRIMA. JR. Public Works Director SUBJECT: Authorize Staff to Commence Negotiations with Central Valley Waste Services (Waste Management)to Exercise Contract Renewal Option Enclosed is a copy of background information on an item on the City Council agenda of Wednesday, December 19, 2007. The meeting will be held at 7 p.m. in the City Council Chamber, Carnegie Forum, 305 West Pine Street. This item is on the regular calendar for Council discussion. You are welcome to attend. F you wish to write to the City Council, please address your letter to City Council, City cf Lodi, P. O. Box 3006, Lodi. California, 95241-1910. Be sure to allow time for the mail. Or, you may hand -deliver the letter to City Hall, 221 West Pine Street. If you wish to address the Council at the Council Meeting, be sure to fill out a speaker's card (available at the Carnegie Forum immediately prior to the start cf the meeting) and give it to the City Clerk. If you have any questions about communicating with the Council, please contact Randi Johl, City Clerk, at 333-6702. If you have any questions about the item itself, please call Rebecca Areida, Management Analyst, at 333-6800, extension 2658. %Y190&440 Richard C. Prima, Jr. Public Works Director RCPlpmf Enclosure cc: City Clerk NCVWS CONTRACT RENEWAL.DOC