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HomeMy WebLinkAbout2008-06-23 City Council Agenda Packet 1 06/23/08 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL DURING NORMAL BUSINESS HOURS. Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is available in the Council Chambers on the Friday preceding the meeting. Special Meeting Council Chambers June 23, 2008 6:00 PM ROLL CALL CLOSED SESSION This item may occur during the recess or after the Regular Meeting. Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. Public Employment Title: City Auditor Authority: Government Code section 54957(b) 2. Public Employment Title: City Manager Authority: Government Code section 54957(b) 3. Conference with City Attorney-Potential/Anticipated Litigation Subject: Written claim for damages against the City of Palo Alto by Christine Dixon Authority: Government Code Sections 54956.9(b)(1) & (b)(3)(C) 7:30 PM or as soon as possible thereafter SPECIAL ORDERS OF THE DAY 4. This Item Number Has Been Intentionally Left Blank 5. Adoption of a Resolution Expressing Appreciation to Robert Brouchoud Upon His Retirement 06/23/08 2 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL DURING NORMAL BUSINESS HOURS. Attcahment 6. Adoption of a Resolution Expressing Appreciation to Richard Dauler Upon His Retirement Attachment 7. Selection of Candidates to be Interviewed for the Historic Resources Board Attachment 8. Selection of Candidates to be Interviewed for the Public Art Commission Attachment 9. Selection of Candidate to be Interviewed for the Library Advisory Commission Attachment ORAL COMMUNICATIONS Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration or Oral Communications. APPROVAL OF MINUTES April 28, 2008 May 05, 2008 May 12, 2008 CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 10. Approval of Renewal of Contract with Dell USA LP in the Amount Not to Exceed $210,550 for One Year with the Option to Extend for Two Additional One Year Terms for the Microsoft Enterprise Agreement CMR 251:08 Attachment 11. Approval of Software Support Services Contract Renewal with Oracle 06/23/08 3 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL DURING NORMAL BUSINESS HOURS. Corporation in the Amount of $345,510 (3 Years at $115,170 Per Year) CMR 268:08 Attachment 12. Approval of the Amended and Restated Joint Exercise of Powers Agreement By and Between the City of Palo Alto, the City of Menlo Park, the City of East Palo Alto, the Town of Atherton, the County of San Mateo and the County of Santa Clara to Provide for a Cable Television and Video Franchise Administration and Enforcement Process Consistent with the California Digital Infrastructure and Video Competition Act CMR 159:08 Attachment 13. Adoption of a Resolution Authorizing Use of a Design-Build Project Delivery Method for Design and Construction of the Eleanor Pardee Park and Main Library/Community Gardens Wells as Part of the Emergency Water Supply Project WS-08002, and Approval of a Utilities Enterprise Fund Agreement with Siegfried Engineering, Inc. in a Not to Exceed Amount of $544,367 for Pre-Design and Design-Build Procurement Services for the Eleanor Pardee Park and Main Library/Community Gardens Wells/Emergency Water Supply Wells Project WS-08002 CMR 291:08 Attachment 14. Approval of a Professional Services Agreement with Geodesy in the Amount of $149,930 Per Year Up to a Three Year Term for Development Support of New Computer Applications Linked to the Geographic Information System (GIS) CMR 282:08 Attachment 15. Approval of a Contract with Clean Harbors Environmental Services in the Total Amount of $418,000 Per Year for a Term of Up to Three Years for Household Hazardous Waste Management and Emergency Response Services CMR 286:08 Attachment 06/23/08 4 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL DURING NORMAL BUSINESS HOURS. 16. Finance Committee Recommendation to Adopt a Resolution Amending Utility Rate Schedules EDF-1 and EDF-2 of the City of Palo Alto Utilities Rates and Charges Pertaining to Fiber Optic Rates CMR 293:08 Attachment AGENDA CHANGES, ADDITIONS, AND DELETIONS HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of five minutes per speaker unless additional time is granted by the presiding officer. The presiding officer may reduce the allowed time to less than five minutes if necessary to accommodate a larger number of speakers. REPORTS OF OFFICIALS 17. Direction on Desired Service Level and Programs to Pursue and Review of Rate Impacts and Diversion Comparison Ranges for Baseline Services, Zero Waste Services and Other Service Innovations in the New Solid Waste, Recycling and Organics Services Agreement CMR 256:08 Attachment COUNCIL COMMENTS, ANNOUNCEMENTS, AND REPORTS FROM CONFERENCES Members of the public may not speak to the item(s). ADJOURNMENT Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact 650-329-2550 (Voice) 24 hours in advance. CMR:251:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JUNE 23, 2008 CMR: 251:08 SUBJECT: APPROVAL OF RENEWAL OF CONTRACT WITH DELL USA LP IN THE AMOUNT NOT TO EXCEED $210,550 FOR ONE YEAR WITH THE OPTION TO EXTEND FOR TWO ADDITIONAL ONE-YEAR TERMS FOR THE MICROSOFT ENTERPRISE AGREEMENT RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached contract with Dell USA LP in an amount not to exceed $210,550 for one year with the option to extend for two additional one-year terms for the Microsoft Enterprise Agreement (MSEA). BACKGROUND The City of Palo Alto entered into an agreement with Dell USA LP for the licensing of Microsoft products in 2005. In alignment with the Information Technology Strategic Plan, IT established a MSEA, fulfilling two of the plan’s goals: 1) standardize City operating systems; and 2) standardize office automation application and complete migration to Microsoft Office. The County of Riverside issued a competitive RFP on behalf of the California County Information Services Directors Association (CCISDA) for purchases under a MSEA. After the RFP process, Dell USA was awarded the contract. The MSEA allows all cities, counties, and state agencies to participate and purchase Microsoft products at significant cost savings. DISCUSSION The MSEA is a one-year contract, with the option to extend for two additional one-year terms. The City will pay a set price per computer per year for all qualified computers in the City and will be eligible to run the latest versions of the following products: • Microsoft Office Professional (including: Word, Excel, PowerPoint, Outlook, Publisher, and Access) CMR:251:08 Page 2 of 3 • Microsoft BackOffice client access license (A license necessary for each device including a workstation, terminal, and mobile device to access the Windows server network environment for services such as e-mail and file storage. • Microsoft Windows 32-bit operating system (e.g., Windows XP) Benefits of the MSEA include: • Standardization of operating system and office automation applications • Simplified license and compliance tracking • Flexibility to upgrade to newer versions of Microsoft products • Streamlined ordering process • Simplified budgetary planning Selection Process The City of Palo Alto is piggybacking on the current MSEA provided by Dell USA and the California County Information Services Directors Association (Riverside County Contract #OIE62044), and this process is sanctioned under Palo Alto Municipal Code Section 2.30.360(j), by doing this, the City of Palo Alto did not go out to bid. Accordingly a sole source justification exists for this contract award. RESOURCE IMPACT Funds for this contract are included in the Fiscal Year 2008/09 budget under Application Maintenance, Capital Improvement Project (CIP). POLICY IMPLICATIONS This recommendation does not represent a change to existing City policies. ENVIRONMENTAL REVIEW These services do not constitute a project under the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A: Contract CMR:251:08 Page 3 of 3 PREPARED BY: KB PAIGE Senior Technologist DEPARTMENT HEAD APPROVAL: LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: KELLY MORARIU / STEVE EMSLIE Deputy City Managers CMR:268:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JUNE 23, 2008 CMR: 268:08 SUBJECT: APPROVAL OF SOFTWARE SUPPORT SERVICES CONTRACT RENEWALS WITH ORACLE CORPORATION IN THE AMOUNT OF $345,510 (3 YEARS AT $115,170 PER YEAR) RECOMMENDATION Staff recommends that Council: 1) Approve and authorize the City Manager or his designee to execute the attached software maintenance support agreement contract renewal with Oracle Corporation for one year (7/1/2008 thru 6/30/2009) in the amount of $115,170 (plus applicable taxes). 2) Authorize the City Manager or his designee to sign the contract for the above services and approve the renewal for the following two years (at $115,170 per year) provided that the vendor is responsive to the City’s needs and the quality of the vendor’s work is acceptable during the first year of the contract. BACKGROUND The City receives support services from Oracle Corporation for the Oracle database management system and accompanying software as described in the original Oracle Enterprise License Agreement, dated May 23, 2000. The Oracle database was chosen by the City to support its major applications. Oracle is currently used with SAP, Utilities Customer Information System, Geographic Information System (GIS), eCLASS and others. DISCUSSION Support services consist of product support, including telephone technical assistance and subscription services, providing Oracle product upgrades, maintenance releases and patches as Oracle makes them available. The telephone assistance is in the form of a 24 hours a day, 7 days a week support hotline available to designated points of contact (POC) defined by the City. Quarterly newsletters and bulletins are sent to the POCs, as well as access to Oracle’s on-line support system and technical database. The pricing model presented to the City is for an annual fee of $115,170 (plus applicable taxes), CMR:268:08 Page 2 of 3 paid in advance. This pricing represents a 60 percent discount on products under the enterprise licensing agreement price structure compare to non-enterprise pricing. RESOURCE IMPACT The first year of the contract will be in the amount of $115,170 (plus applicable taxes) and the funds are included in the FY 2008-2009 Applications Maintenance Internal Service Fund Budget. Funding for the remaining two years will be proposed as part of the FY 2009-10 and FY 2010-11 budgets. ENVIRONMENTAL ASSESSMENT Approval of this contract does not constitute a project under California Environmental Quality Act (CEQA). Therefore, no environmental assessment is required. ATTACHMENTS Exhibit A: Oracle Support Renewal Quote CMR:268:08 Page 3 of 3 PREPARED BY: KB PAIGE SR Technologist DEPARTMENT HEAD REVIEW: LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: KELLY MORARIU and STEVE EMSLIE Deputy City Managers CMR: 159:08 Page 1 of 5 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JUNE 23, 2008 CMR: 159:08 SUBJECT: APPROVAL OF THE AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO, THE CITY OF MENLO PARK, THE CITY OF EAST PALO ALTO, THE TOWN OF ATHERTON, THE COUNTY OF SAN MATEO AND THE COUNTY OF SANTA CLARA TO PROVIDE FOR A CABLE TELEVISION AND VIDEO FRANCHISE ADMINISTRATION AND ENFORCEMENT PROCESS CONSISTENT WITH THE CALIFORNIA DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT RECOMMENDATION Staff recommends that the City Council approve the Amended and Restated Joint Exercise of Powers Agreement (Amended JPA) by and between the City of Palo Alto, the City of Menlo Park, the City of East Palo Alto, the Town of Atherton, the County of San Mateo and the County of Santa Clara to provide for a cable television and video franchise administration and enforcement process relating to state franchise holders under the California Digital Infrastructure and Video Competition Act (DIVCA). The Amended JPA will serve as the substitute for the Joint Exercise of Powers Agreement, dated July 26, 1983 and the Joint Operating Agreement, dated October 13, 1983. BACKGROUND In July 1983, a Joint Exercise of Powers Agreement was entered into by Palo Alto, Menlo Park, East Palo Alto, Atherton, and portions of San Mateo and Santa Clara Counties (the Joint Powers) for the purposes of obtaining cable television service for residents, businesses and institutions within these jurisdictions. In October 1983, the parties executed a Joint Operating Agreement giving the City of Palo Alto the sole authority to grant and administer the cable franchise process on behalf of the Joint Powers. In 1986, a cable television franchise agreement was executed with Cable Co-op. In 1999, the Cable Co-op Board of Directors and subscribers approved the sale of its system to AT&T Broadband. On July 24, 2000, the Council adopted a resolution consenting to the transfer of the Cable Co-op franchise to AT&T Broadband and the adoption of a new cable franchise agreement CMR: 159:08 Page 2 of 5 with AT&T Broadband. The AT&T Broadband franchise was subsequently transferred to Comcast in July 2002. On October 22, 2001, the Council designated the Midpeninsula Community Media Center, Inc. (Media Center), as its Community Access Organization (CAO) to manage and operate the Joint Powers’ Public, Education, and Government (PEG) access facilities and channels provided pursuant to the AT&T Broadband (now Comcast) franchise. Subsequently, the Joint Powers entered into an agreement with the Media Center giving it responsibility for operating and managing the PEG channels and facilities. On January 1, 2007, DIVCA went into effect. The purpose of DIVCA is to create a streamlined process for the granting of video service franchises in an effort to foster the rollout of technology, encourage competition and expand customer choice. This new law permanently changed the franchising and regulatory structure for the provision of cable television and other video services in California. Under DIVCA, video service franchises are now granted exclusively by the California Public Utilities Commission (Commission) rather than by local franchising entities. On March 30, 2007, the Commission granted AT&T a statewide franchise. The Joint Powers’ incumbent cable operator, Comcast, was allowed to seek a state franchise after January 1, 2008, when another state franchise holder (in this case AT&T) entered the local market. On January 2, 2008, the Commission granted Comcast a state franchise that extends to the Joint Powers’ service area. In April and June 2007, the Council amended and added several chapters to the Palo Alto Municipal Code to reflect changes in the law due to DIVCA (CMR: 171:07 and CMR 273:07). On January 22, 2008, the Council amended the Palo Alto Municipal Code to establish a fee, consistent with DIVCA, to support PEG access that will apply to AT&T and to Comcast as they provide service under their new state franchises. DISCUSSION DIVCA allows the Joint Powers to continue to serve as the “local entity” for DIVCA purposes. This permits the Joint Powers to continue to rely on Palo Alto for such activities as franchise fee and PEG fee collection and audits, PEG oversight and customer service with respect to all state franchise holders who provide video services in the Joint Powers’ service area. Staff recommends that the Council approve the proposed Amended JPA, in substitution of the existing Joint Exercise of Powers Agreement and the Joint Operating Agreement, to reflect changes in the law due to DIVCA and to allow Palo Alto to continue to administer the cable and video franchise enforcement and monitoring process for state franchise holders. There are several important benefits to the continued existence of the Joint Powers under DIVCA. It provides for centralized financial support, contracting, oversight and management of the Joint Powers’ relationship with the Media Center. The Media Center’s responsibilities include: PEG channel administration, operation and programming; training of PEG channel users; and maintenance of PEG facilities and equipment. At the present time, Palo Alto receives PEG fee payments from franchise holders for all Joint Powers subscribers. Palo Alto forwards this money directly to the Media Center. The proposed Amended JPA would give Palo Alto the authority to continue to give the Media Center the entire Joint Powers PEG fee. Any breakup of CMR: 159:08 Page 3 of 5 the Joint Powers in this area would pose a significant risk of splintering financial support to the Media Center. If this were to happen, it would directly and adversely impact the Media Center’s ability to carry out its PEG programming and service obligations, resulting in a significant loss to the Joint Powers and its PEG viewers. The Amended JPA also provides significant economies of scale by allowing the Joint Powers members to continue to share the cost of franchise administration responsibilities. Centralized franchise fee collection, distribution, audit responsibility and customer service standard enforcement saves each Joint Powers member administrative and enforcement costs that it otherwise would have to incur individually. The Amended JPA also gives its members more collective leverage over cable and video service providers in the resolution of franchise fee, PEG access, customer service and other kinds of disputes than each member would have individually. Palo Alto’s franchise administration responsibilities would include the following: Centralized Franchise Fee Collection and Remittance: DIVCA allows local entities to assess a five percent franchise fee on state franchise holders. Franchise fees would continue to be collected by Palo Alto and, after Palo Alto’s franchise administration costs are deducted, distributed to each Joint Powers member based on its number of subscribers. Centralized PEG Fee Collection and Remittance: DIVCA allows the Joint Powers to continue to collect a PEG support fee of 88-cents per residential subscriber per month from state franchise holders. PEG fees for all Joint Powers subscribers would continue to be collected by Palo Alto and remitted to the Media Center for PEG purposes. Centralized and Coordinated Oversight of Video Service Providers’ DIVCA PEG Channel Obligations: DIVCA preserves the Joint Powers’ seven current PEG channels. DIVCA requires the placement of these channels on the basic service tier and, to the extent feasible, on the same channel numbers used by Comcast. DIVCA also requires that PEG channels be capable of carrying a standard television signal and that PEG channels be of similar quality and functionality to that of commercial channels on the state franchise holder’s basic tier. Palo Alto would enforce these DIVCA PEG channel requirements under the Amended JPA. Centralized Contracting, Oversight and Management of the Relationship with the Media Center: On July 8, 2002, the City entered into a CAO agreement with the Media Center on behalf of the Joint Powers. This agreement will expire in July 2010. Under the Amended JPA, Palo Alto would be responsible for managing the existing CAO agreement and negotiating, approving and managing subsequent agreements. Audit Responsibility for Franchise and PEG Fees: Palo Alto would continue to be responsible for conducting franchise fee and PEG fee audits, approximately every three years, to collect unpaid or underpaid franchise and/or PEG fees. Customer Service Standard Enforcement: Palo Alto would continue to be responsible for enforcing federal and state customer service standards. CMR: 159:08 Page 4 of 5 Resolution of Customer Service Complaints and Response to Customer Inquiries: Palo Alto would continue to be responsible for resolving customer complaints and responding to customer inquiries on behalf of the Joint Powers. I-Net: The 2000 AT&T Broadband (now Comcast) franchise requires Comcast to furnish the Joint Powers with an institutional network (“I-Net”). The I-Net connects approximately 70 schools, libraries and government facilities in the Joint Powers’ service area for delivery of data, video and voice services. Currently, about approximately 70 percent of the I-Net sites are operational. Under DIVCA, existing local franchise obligations regarding I-Net facilities will continue only until the local franchise would have expired by its terms. In the case of the AT&T Broadband (now Comcast) franchise, that date is July 25, 2010. Under the Amended JPA, Palo Alto would continue to monitor and enforce Comcast’s existing I-Net obligations through that date and would be responsible for negotiating any I-Net transition after that date. NEXT STEPS Following the approval of the Palo Alto Council, the remaining Joint Powers members will bring the Amended JPA to their respective governing bodies for approval. Within thirty days after the effective date of the Amended JPA, Palo Alto will give notice of the Amended JPA to the California Secretary of State, in accordance with California law, Government Code Section 6503.5. RESOURCE IMPACT State franchise holders provide compensation (e.g., franchise fees, PEG fees, PEG channels and facilities, etc.) for the use of public streets and rights-of-way in the Joint Powers’ service area. After deducting Palo Alto’s franchise administration costs, franchise fees are distributed to Joint Powers members. Joint Powers administrative costs totaled $95,541 in 2007. These costs were shared by Joint Powers members based on subscribers (Palo Alto 50 percent; Menlo Park 25 percent; East Palo Alto 11 percent; Santa Clara County 5 percent and San Mateo County 2 percent.) These costs would increase significantly for Palo Alto and the other Joint Powers members if the Joint Powers arrangement was not in place. In 2007, Comcast paid Palo Alto franchise fees in the amount of $638,944. In 2007, PEG access fees for all agencies totaled $328,781. POLICY IMPLICATIONS This proposed amendment will bring the Joint Exercise of Powers Agreement and the Joint Operating Agreement into compliance with the current State law for video service franchises. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act, therefore, no environmental assessment is required. ATTACHMENTS: Attachment A: Amended and Restated Joint Exercise of Powers Agreement CMR: 159:08 Page 5 of 5 PREPARED BY: MELISSA CAVALLO Cable Coordinator DEPARTMENT HEAD APPROVAL: LALO PEREZ Administrative Services Director CITY MANAGER APPROVAL: STEVE EMSLIE and KELLY MORARIU Deputy City Managers CMR: 291:08 Page 1 of 5 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JUNE 23, 2008 CMR: 291:08 SUBJECT: ADOPTION OF A RESOLUTION AUTHORIZING USE OF A DESIGN- BUILD PROJECT DELIVERY METHOD FOR DESIGN AND CONSTRUCTION OF THE ELEANOR PARDEE PARK AND MAIN LIBRARY/COMMUNITY GARDENS WELLS AS PART OF THE EMERGENCY WATER SUPPLY PROJECT WS-08002, AND APPROVAL OF A UTILITIES ENTERPRISE FUND AGREEMENT WITH SIEGFRIED ENGINEERING, INC. IN A NOT TO EXCEED AMOUNT OF $544,367 FOR PRE-DESIGN AND DESIGN-BUILD PROCUREMENT SERVICES FOR THE ELEANOR PARDEE PARK AND MAIN LIBRARY/COMMUNITY GARDENS WELLS/EMERGENCY WATER SUPPLY WELLS PROJECT WS-08002 RECOMMENDATION Staff recommends that Council: 1. Adopt Resolution (Attachment A) authorizing use of the design-build project delivery method for the design and construction of the Eleanor Pardee Park and Main Library/Community Gardens wells as part of the Emergency Water Supply Project WS- 08002; and 2. Approve and authorize the City Manager or designee to execute the attached Agreement with Siegfried Engineering, Inc. (Attachment B) in a not to exceed amount of $544,367 for the Pre-Design and Design-Build Procurement Services for Eleanor Pardee Park and Main Library/Community Gardens Emergency Water Supply wells, as part of the Emergency Water Supply Project WS-08002, which includes $453,639 for basic services and $90,728 for additional services. BACKGROUND The Eleanor Pardee Park and the Main Library/Community Gardens Emergency Water Supply Wells Project (EWSWP) is part of the overall Emergency Water Supply Project (EWSP), WS- 08002. This projects purpose is to ensure an adequate emergency water supply source is available to meet the City’s emergency water needs. The project will ensure the City compliance with the California Department of Public Health (CDPH) recommendation to have stand-alone emergency water (including groundwater) sufficient to supply eight hours of usage at the highest 13 CMR: 291:08 Page 2 of 5 hourly demand plus a reserve for fire fighting. The EWSP will construct a 2.5 million gallon reservoir, three new wells (two new wells as part of the EWSWP and a third new well will be constructed with the 2.5 million gallon reservoir as part of the EWSP), and will rebuild Lytton Pump Station and rehabilitate up to five existing wells and the rebuild the Mayfield Pump Station and supporting pipelines. On March 5, 2007, at a regular City Council meeting, Council held the final public hearing for the Environmental Impact Report (EIR) for the EWSP, and adopted a resolution certifying its adequacy (CMR:161:07). Also at the March 5, 2007 meeting, Council adopted a second resolution approving the EWSP and designating the project sites, and approved Park Improvement Ordinances for El Camino, Eleanor Pardee, Timothy Hopkins, Rinconada and Peers Parks. Council’s approval of the attached design-build resolution will allow staff to accelerate the construction of two new emergency supply wells. Council’s approval of the agreement with Siegfried Engineering, Inc. (SEI) will start the pre-design phase of the EWSWP. The purpose of the pre-design is to provide the design-builder with sufficient information to competently bid the project and to ensure that the City obtains a quality designer-builder team. In the pre-design phase SEI will conduct a geotechnical investigation of the two well sites by drilling two pilot holes for the wells and two smaller holes for soils investigations for the structures. SEI will use the geotechnical data to prepare 30 percent completion level design documents. SEI will incorporate the pre-design into a Request for Proposals (RFP). The responses to the RFP will start the second phase of the project with a design-build contract that will be brought to Council for award. The successful design-build proposer will complete the project design and construct the two new well sites. DISCUSSION Description of the Project This project includes geotechnical investigations for well and structure design, preparation of design-build plans to the 30 percent level and preparation of design-build proposal documents to construct two new standby emergency water wells, one in Eleanor Pardee Park and the other at the Main Library/Community Gardens site (Attachment C). The design-build proposal will be advertised at the completion of this phase of the project. The pump and structure at Eleanor Pardee Park will be designed as an underground structure. The pump building at the Main Library/Community Gardens site will be designed as an above ground structure. Consultant’s Scope of Services The consultant will conduct a pre-design study for design-build construction of new wells at Eleanor Pardee Park and the Main Library/Community Gardens site. The consultant will: evaluate hydrogeologic, geotechnical, environmental factors and operational requirements; develop site layout, floor plan, architectural and landscaping alternatives, control strategies and Supervisory Control and Data Acquisition (SCADA) requirements; prepare specifications for key equipment and materials; analyze construction and operation and maintenance (O&M) costs; and prepare a risk management plan to assure quality of materials and construction. The consultant will also prepare a Request for Qualifications (RFQ) and a Request for Proposals CMR: 291:08 Page 3 of 5 (RFP), and assist staff with procurement of the design-build engineer/contractor. Finally, the consultant will assist with implementation of the design-build contract by facilitating continuity between the pre-design effort and the final design effort during the design-build phase, and will assure conformance of the final design with the construction requirements and design intent set forth during pre-design. The deliverables will include: 1. A pre-design Engineering Report; 2. A Risk Management Plan; 3. A Request for Qualifications for the design-build contract; 4. A Request for Proposals for the design-build contract; 5. A recommendation on the design-build team based on SEI’s independent review of the proposals submitted. Attachment B, the Agreement, contains a complete description of the scope of services. Staff recommends that this work be performed by a consultant in view of the specialized nature of the services, and special equipment and training needed for the hydrogeologic and geotechnical investigations and well design. Solicitation Process Summary of Solicitation Process Proposal Title Pre-Design and Procurement Services for Design-Build of Eleanor Pardee Park and Library/Community Gardens Water Production Wells for the Emergency Water Supply Project Proposal Number 126041 Proposed Length of Contract 13 months Number of Proposals mailed &/or emailed 37 Total Days to Respond to Proposal 34 Pre-proposal Meeting Date March 18, 2008 Number of Company Attendees at Pre- proposal Meeting 7 Number of Proposals Received: 1 Company Name Location (City, State) Proposal Amount* Siegfried Engineering, Inc. Stockton, CA $300,000 * Based on partial scope of work. See Cost of Services below. Due to project requirements, consultants who did not submit a proposal expressed more interest in the design-build phase. Consultants in the pre-design phase are excluded from submitting a proposal in the design-build phase. Cost of Services As shown in the table above, SEI submitted a bid for $300,000, however, costs for the exploratory well drilling and the Supervisory Control and Distribution Automation (SCADA) design were not included in SEI’s proposal. Upon questioning by City staff, the proposer stated that their interpretation of the RFP scope of work was that the City would contract separately with a well driller, and that the City intended for the pumps to be locally controlled and not connected to the SCADA system. After receiving SEI’s proposal, staff negotiated costs for CMR: 291:08 Page 4 of 5 adding the well drilling and SCADA services into SEI’s fee. The final not to exceed budget for the basic services listed in Exhibit A of the Agreement is $453,639. Staff recommends that an additional services amount of $90,728 (20 percent) be added to the contract for unforeseen circumstances related to exploratory well drilling and public outreach at the proposed well sites. Additional services will be paid on a time and materials basis using the consultant’s Charge Rates schedule shown in Exhibit C to the Agreement. The consultant shall not commence with additional services before the City has obtained an acceptable not-to-exceed price, in writing, for the scope of additional services, and staff has issued a written notice to proceed to the consultant. The total budget amount proposed for the project is $544,367, including $453,639 for the basic services and $90,728 for additional services. Staff reviewed the consultant’s proposal and qualifications, met with the consultant’s project team and has determined that the consultant has the expertise and experience necessary to perform the work. Design-Build Pursuant to City Municipal Code Section 2.30.300(c) regarding alternative project delivery methods, staff recommends that the wells be designed and constructed via a design-build process. In a “design-build” project delivery method, both design and construction services are covered under a single contract, whereas, in a traditional “design-bid-build” project delivery method, the agency contracts with separate entities for both the design and construction of a project. Design-build contracts are usually awarded by a process other than formal competitive bidding, (which mandates award to the lowest monetary bidder) in order to allow consideration of qualitative factors, such as a bidder’s experience and performance on prior jobs, in addition to price. Although Article VII, Section 6 of the City Charter requires formal bidding and award to the lowest monetary bidder for public works contracts funded by bonded indebtedness of the city, no bond financing will be used for this project since funds are available in CIP WS-08002 Emergency Water Supply Project. Section 2.30.300(c) of the City Municipal Code requires formal bidding for all public works contracts unless Council determines by resolution “that a particular public works project may be solicited and contracted for using alternate project delivery methods, including but not limited to design build, construction manager at risk, or competitive negotiation.” The resolution must include the reasons supporting the use of the alternate project delivery method and describe the solicitation method to be used and the criteria for determining the party to whom the contract should be awarded. A resolution meeting these requirements is attached (Attachment A) and additional discussion is provided below. A significant difference between design-build contracts and traditional design-bid-build contracts is that in a design-build method, the final design work is done concurrently with construction. As a result, the design-build method can accelerate the project schedule and reduce overall project costs. The design-build method also allows the contractor to begin certain construction activities, such as excavation, before detailed design is completed, and accelerates project progress by eliminating or reducing certain design and/or procurement steps, such as submittal preparation and review. Due to the current deficiency in emergency water supply, staff is recommending that CMR: 291:08 Page 5 of 5 Palo Alto add capacity to its emergency water supplies as soon as possible. The design-build contract process will accelerate the completion of this project. Specifically, staff estimates that the use of a design-build contract process will: • Allow the project to be completed 7 months earlier; and • Result in savings of $300,000. RESOURCE IMPACT Funds for this project in amount of $544,367 are included in the WS-08002 Emergency Water Supply Project CIP. This pre-design project, and the follow on design-build construction project, is not bond financed. This project will be managed by Utilities Engineering staff. POLICY IMPLICATIONS This recommendation is consistent with existing City policies, and with Municipal Code Title 2, section 2.30.300, Public Works Contracts, with respect to alternative project delivery methods. The design-build model, however, is a departure from the city’s customary design-bid-build practice. ENVIRONMENTAL REVIEW The field work, including drilling work, of this pre-design study, as well as the project for construction of wells in Eleanor Pardee Park and at the Main Library/Community Gardens site, are part of the overall project EIR for the Emergency Water Supply Project (SCH #2066022038), which Council certified on March 5, 2007 as being adequate to meet the requirements of the California Environmental Quality Act (CEQA). ATTACHMENTS A: Resolution B: Agreement with Exhibits A through E C: Project Location Map PREPARED BY: Jim Flanigan, Project Engineer Romel Antonio, Senior Project Engineer Roger Cwiak, WGW Engineering Manager REVIEWED BY: ____________________________________ TOMM MARSHALL Assistant Director Utilities DEPARTMENT APPROVAL: ________________________________ VALERIE O. FONG Director of Utilities CITY MANAGER APPROVAL: ________________________________ STEVE EMSLIE/KELLY MORARIU Deputy City Managers CMR:282:08 Page 1 of 4 TO: HONORABLE CITY COUNCIL ATTENTION: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JUNE 23, 2008 CMR: 282:08 SUBJECT: APPROVAL OF A PROFESSIONAL SERVICES AGREEMENT WITH GEODESY IN THE AMOUNT OF $149,930 PER YEAR UP TO A THREE YEAR TERM FOR DEVELOPMENT SUPPORT OF NEW COMPUTER APPLICATIONS LINKED TO THE GEOGRAPHIC INFORMATION SYSTEM (GIS) RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached agreement in the amount of $149,930 for a professional services agreement with Geodesy and authorize the City Manager or his designee to extend this agreement for up to two additional years. Cost for additional years will be predicated on actual scope of services required and will not exceed cost for this year $149,930 plus an annual increase not to exceed CPI. DISCUSSION Project Description The Geographic Information System (GIS) provides accurate citywide property, utility and infrastructure information to all City staff and the public. It is a vital component of the CityWorks program for infrastructure management. The GIS is a central element of the City’s information infrastructure that has been integrated with several other major information systems including the Police Computer Aided Dispatch System, Records Management System, and the Utilities Computer-Aided Design and Drafting (CADD) system. The services to be provided under this agreement will further improve the integration of the GIS with these and other systems. Previously, Geodesy implemented DOX, a Document Management System that replaced the Building Optical Disc Storage System (BODS) as the City’s document repository. The Building, Planning, Real Estate, Public Works Engineering Divisions and City Clerk’s office, Fire Department, and Police Department have all adopted DOX as their document management system. Hundreds of thousands of documents that were locked in CMR:282:08 Page 2 of 4 the BODS proprietary database have been extracted, indexed, and stored in the open standards database used by DOX, allowing any authorized user to access them from any City computer. Further enhancements to this tool, which will enable automated archiving based on mandated retention schedules and support for ongoing input of new documents, are included in this contract. Also, in the public safety area, tools that have been developed to support the Computer Aided Dispatch function will be extended to make real-time incident information available in the City’s Emergency Operations Center, allowing EOC staff to monitor events as they are reported. At a glance, dispatchers can now view all dispatched incidents, and the location of their mobile assets using Automated Vehicle Location (AVL) technology. This includes Police, Fire, Utilities and Animal Control units. These mobile units can view the same information in their vehicles providing them with a comprehensive view of incidents. As use of the SAP system for asset management increases, the ability of SAP to link to the vast database of these assets in the GIS becomes increasingly important. As part of the conversion of the Utilities Customer Information System from its current software platform to a new SAP software platform, Geodesy will be supporting the development of an updated master address database. The high accuracy and rigorous maintenance of the GIS’ address database make it an appropriate resource to be used by this new system as well as all other enterprise systems using address-based data. This common address platform will expand the ability of all these systems to better share information. Geodesy will provide other services under this contract to further enable City staff to take advantage of the GIS including; • Additional training programs in the use of data editing tools. • Analysis and updating of the address database to allow it to be certified by the United States Postal Service. Such certification will qualify the City for lower postal rates leading to significant cost savings on targeted bulk mailings. • Last year, Geodesy modified Palo Alto’s Pavement Management System (PMMS) so that it now conforms to all requirements of the Metropolitan Transportation Commission (MTC) for such systems. Palo Alto’s street condition information can now be compared to other agencies in the Bay Area because of these modifications. Geodesy will make further enhancements to the PMMS under this contract to include analysis capabilities such as budget forecasting. • The City has recently been awarded an Urban Forestry Management Plan grant from CalFire to inventory and improve management of the City’s urban forest. Using funds provided by this grant, Geodesy will extend the City’s existing GIS tree management application (GeoTree) to include service request and work order interfaces. These activities will be coordinated with SAP and exchange of data between these systems will be facilitated by Geodesy’s work under this grant. CMR:282:08 Page 3 of 4 • The City’s Utilities Water Gas Wastewater department has made many updates to their infrastructure information that they would now like to merge with existing asset attribute information in the GIS. To this end, Geodesy will work with the Utilities department and their consultants to update existing automation software for this purpose and develop new tools to expedite the data aggregation. • Training in the use of applications affected by these changes. As part of this training, improved documentation and help screens will also be developed. These tasks, identified in the attached scope of work, are consistent with the objectives of the GIS Strategic Plan and will improve the system for all GIS users. SOLE SOURCE CONTRACT Geodesy has been instrumental in the development of Palo Alto's GIS and related applications, including many of the applications previously mentioned. Geodesy’s unique understanding of the City's specialized GIS system, their experience in developing GIS applications for the City, and their expertise in the City’s GIS software environment make it necessary to render the award as a sole source contract. RESOURCE IMPACT Tasks under this agreement total $149,930.00. Funds for this project are budgeted in CIP 02015 Citywide GIS Data, Infrastructure & Applications. Based on the method of allocation of costs for GIS the Enterprise Fund will pay 60 percent of the expenses and the General Fund will pay 40 percent of the expenses. POLICY IMPLICATIONS This agreement does not represent any change to existing City policies. ENVIRONMENTAL ASSESSMENT Approval of this agreement does not constitute a project under the California Environmental Quality Act (CEQA); therefore, no environmental assessment is required. ATTACHMENTS Attachment A: Agreement PREPARED BY: DAVE MATSON GIS Manager, Information Technology CMR:282:08 Page 4 of 4 DEPARTMENTAL HEAD APPROVAL: ________________________________ LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: STEVE EMSLIE/KELLY MORARIU Deputy City Managers CMR:286:08 Page 1 of 4 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: JUNE 23, 2008 CMR:286:08 SUBJECT: APPROVAL OF A CONTRACT WITH CLEAN HARBORS ENVIRONMENTAL SERVICES IN THE TOTAL AMOUNT OF $418,000 PER YEAR FOR THREE YEARS FOR HOUSEHOLD HAZARDOUS WASTE MANAGEMENT AND EMERGENCY RESPONSE SERVICES RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with Clean Harbors Environmental Services (Clean Harbors) in a not to exceed amount of $418,000 per year for three years for household hazardous waste (HHW), conditionally exempt small quantity generator (CESQG) waste, and 24-hour emergency response services including $380,000 for basic services and $38,000 for additional services (Attachment A). 2. Authorize the City Manager or his designee to extend the contract for up to two additional years, provided the proposed increased cost of the renewal does not exceed the Consumer Price Index for all urban consumers (San Francisco-Oakland-San Jose, California) and the contractor is responsive to the City's needs. BACKGROUND Palo Alto’s HHW program began in 1983 when Palo Alto became the second jurisdiction in the state to provide collection of household hazardous wastes to its residents in response to community concerns about toxic wastes in the environment. The objectives of the HHW program were to provide a point of contact for educating the public about the safe use, storage, disposal and alternatives to HHW products, and to help reduce the release of HHW to storm drains, landfill and the sanitary sewer. In 1986, the Tanner Bill (AB 2948) was passed requiring counties to establish hazardous waste management plans (Health & Safety Code 25135-25135.9). In 1987, the Greene Bill (SB 477) was passed requiring each City to either adopt a City hazardous waste management plan or incorporate the County’s plan into the City’s plan. Household Hazardous Waste Element In 1989, AB 939 was passed mandating that cities adopt and submit a HHW Element, a document that sets policies, objectives and programs for collection of HHW in compliance with state mandates. Palo Alto’s HHW Element (June 1991) evaluated HHW alternatives and selected the development of a permanent HHW facility to phase out the monthly collection events that were CMR:286:08 Page 2 of 4 taking place during that time. At the time, since Palo Alto’s program predated the Santa Clara County Program and the City had a mature, well-run HHW program, Palo Alto decided to continue its own program instead of joining the Santa Clara County HHW Program. Scope of Services Description The work to be performed under this contract includes the operation of the City’s ongoing monthly HHW program, a CESQG Program, a door-to-door HHW pickup for physically limited residents program, the consolidation, packaging transportation and recycling of recycling center household batteries and fluorescent tubes and a new weekly appointment-based HHW drop-off program at a new hazardous materials storage locker recently installed at the entrance to the Palo Alto Regional Water Quality Control Plant. The weekly appointment-based drop-off will accommodate residents who are unable to wait for the monthly event due to extenuating circumstances. Part of this scope of work also requires the Contractor to provide for 24-hour hazardous waste emergency spill response services. Selection Process A notice inviting formal proposals for the work was posted at City Hall and sent to four pre-qualified contractors. The bidding period was six (6) weeks. Proposals were received from three qualified contractors on April 15, 2008. Summary of Solicitation Process Proposal Description/Number Household Hazardous Waste and Emergency Response Services/RFP #126154 Proposed Length of Project 36 months Number of Proposals Mailed 5 Total Days to Respond to Proposal 36 Pre-proposal Meeting Date N/A Number of Proposals Received: 3 An evaluation committee consisting of three staff members from the Public Works Operations Division reviewed the proposal to ensure that the firm was responsive to the criteria identified in the RFP. The criteria used to select the recommended firm included: • Quality and completeness of proposal; • Quality, performance and effectiveness of the solution and services to be provided by the Proposer; • Proposers’ experience, including the experience of staff to be assigned to the project, the engagements of similar scope and complexity; • Cost to the City; • Proposer’s financial stability; • Proposer’s ability to perform the work within the time specified; CMR:286:08 Page 3 of 4 • Proposer’s prior record of performance with city or others; and • Proposer’s compliance with applicable laws, regulations, policies (including City Council policies), guidelines and orders governing prior or existing contracts performed by the contractor. Based on these criteria, Clean Harbors was selected as the best rated proposer. Clean Harbor’s cost proposal was also the lowest out of the three proposals received. Clean Harbors has been providing the household hazardous waste collection and disposal services for Palo Alto for the last several years. RESOURCE IMPACT Funds have been budgeted for this contract in the Refuse Fund. POLICY IMPLICATIONS This project does not represent any change to existing City policies. The HHW program is an integral part of the City’s Comprehensive Plan relating to environmental concerns. Some of the comprehensive plan HHW references include: ¾ GOAL N-6: An Environment Free of the Damaging Effects of Biological and Chemical Hazardous Materials. “Palo Alto will also continue its household hazardous waste collection programs and will strive to make these programs more convenient and accessible to residents” (page N-21). ¾ PROGRAMS N-23 and N-28 relate to water quality issues and list Best Management Practices (BMPs) necessary to achieve the program objectives. Water quality issues of concern include the illegal disposal of pharmaceuticals, pesticides, poisons and other environmentally harmful chemicals into the sanitary sewer via sinks or toilets. The HHW Program is one of the primary BMPs listed in the plan necessary to meet these clean water objectives (page N-16). ¾ PROGRAM N-48: “Continue sponsoring a regular household hazardous waste collection event” (page N-22). ¾ PROGRAM N-50: “Continue the program that allows small quantity generators to dispose of hazardous waste at cost” (page N-22). Palo Alto’s HHW program meets these objectives by providing convenient and safe collection and proper disposal of the HHW as well as encouraging the use of safer, less toxic products and the reuse of these products. ENVIRONMENTAL REVIEW The HHW program was reviewed in the Negative Declaration for the Source Reduction and Recycling Element and Household Hazardous Waste Element approved by Council on June 6, 1991 (Negative Declaration No. 91-EIA-12). The CESQG program was reviewed in the Negative CMR:286:08 Page 4 of 4 Declaration for the implementation of the program approved by Council on June 24, 1993 (Negative Declaration No. 93-EIA-22). ATTACHMENTS Attachment A: Contract Attachment B: Certification of Nondiscrimination PREPARED BY: ______________________________________ RON ARP Manager, Environmental Control Programs DEPARTMENT HEAD: ______________________________________ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: ______________________________________ KELLY MORARIU and STEVE EMSLIE Deputy City Managers CMR: 293:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JUNE 23, 2008 CMR: 293:08 SUBJECT: FINANCE COMMITTEE RECOMMENDATION TO ADOPT A RESOLUTION AMENDING UTILITY RATE SCHEDULES EDF-1 AND EDF-2 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO FIBER OPTIC RATES RECOMMENDATION Staff and the Finance Committee recommend that the City Council adopt the attached resolution to: (a) Approve a 3.3 percent increase to commercial fiber optic rates EDF-1 and EDF-2, for Fiscal Year (FY) 2008-09, effective July 1, 2008, which will increase annual revenues by $48,500; and, (b) Approve the changes to the Fiber Optic Rate Schedules (EDF-1 and EDF-2), as attached. BACKGROUND The Utilities Department provides commercial dark fiber optic services within the boundaries of Palo Alto. For customers having fiber optic leases beginning prior to September 18, 2006, rates for service are published in Dark Fiber Licensing Services Rate Schedule EDF-1. Customer expenses for engineering, construction and connection to the fiber optic backbone are charged under Dark Fiber Licensing Services Rate Schedule EDF-2. The Council-approved Dark Fiber Licensing Agreement (CMR 177:97) allows the commercial fiber optic fees charged under the EDF-1 and EDF-2 rate schedules to be adjusted annually in accordance with the Consumer Price Index (CPI), which is calculated by the United States Bureau of Labor Statistics. 16 CMR: 293:08 Page 2 of 2 FINANCE COMMITTEE REVIEW AND RECOMMENDATION The Finance Committee reviewed and unanimously (Council Member Yeh absent) approved the staff recommendation on June 17, 2008 (CMR:283:08, Attachment C). The Committee discussed fiber optic operations, but had no questions on the proposed rate adjustments. RESOURCE IMPACT The additional Commercial Fiber Optic revenues resulting from the CPI increase to Dark Fiber Licensing Services Rate Schedule EDF-1 are projected to be approximately $48,500 for FY 2008-09. As the Dark Fiber Licensing Services Rate Schedule EDF-2 applies to customer-driven expansions and upgrades to the City’s Dark Fiber network, and the fee represents the minimum fee, the increase in projected revenue due to this rate increase is negligible and impossible to predict. POLICY IMPLICATIONS These recommendations do not represent a change in current City policies. ENVIRONMENTAL REVIEW The adoption of this resolution does not meet the California Environmental Quality Act’s definition of a project, pursuant to California Public Resources Code Section 21065, therefore no environmental assessment is required. ATTACHMENTS A: Resolution B: Fiber Optic Rate Schedules EDF-1 and EDF-2 C: CMR:283:08 - Recommendation to adopt a Resolution Amending Utility Rate Schedules EDF-1 and EDF-2 of the City of Palo Alto Rate and Charges Pertaining to Fiber Optic Rates (w/o attachments) D: Excerpted minutes from the June 17, 2008 Finance Committee meeting PREPARED BY: Eric Keniston, Utilities Rate Analyst Ipek Connolly, Senior Resource Planner REVIEWED BY: _________________________________ JANE O. RATCHYE Assistant Director of Utilities, Resource Management DEPARTMENT HEAD: _________________________________ VALERIE O. FONG Director of Utilities CITY MANAGER APPROVAL: _________________________________ STEVE EMSLIE/KELLY MORARIU Deputy City Managers CMR:256:08 Page 1 of 8 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: JUNE 23, 2008 CMR:256:08 SUBJECT: DIRECTION ON DESIRED SERVICE LEVEL AND PROGRAMS TO PURSUE AND REVIEW OF RATE IMPACTS AND DIVERSION COMPARISON RANGES FOR BASELINE SERVICES, ZERO WASTE SERVICES AND OTHER SERVICE INNOVATIONS IN THE NEW SOLID WASTE, RECYCLING AND ORGANICS SERVICES AGREEMENT RECOMMENDATION Staff recommends that Council direct staff to pursue the following programs for the new solid waste and recyclable material and organics collection and processing agreement based on cost impacts of up to 17.2 percent for the Refuse Fund and a projected annual diversion of 21,579 tons of materials, or 11 percent additional diversion to the City: • RFP Scenario 1: Baseline services with rate impact up to 6.4% above the FY 2008-09 Palo Alto Sanitation Company (PASCO) budget, and projected additional diversion of up to 750 tons. • RFP Scenario 2: Zero Waste Services with rate impacts totaling 10.8 % and a projected 21,579 annual additional tons of diversion through the following programs: 1) Expanding organics materials collection only to the commercial sector with a rate impact up to 3.5% and a projected 4,500 additional tons diverted annually. 2) Expanding single stream materials only for items that have a sustainable market with a reduced rate impact of .5% and a projection of 2,418 additional tons diverted annually. 3) Expanding Clean-up Day collection for reuse and recycling with a rate impact up to 1% and a projected 400 additional tons diverted annually. 4) Enhancing recycling through mandatory participation with a rate impact up to 3% and a projected 8,919 additional tons diverted annually. 5) Increasing C&D diversion with a rate impact of 2.6% and a projected 5,342 additional tons diverted annually. 6) Enhancing commercial recycling with a rate impact of .2% and currently unquantifiable tonnage diversion. CMR:256:08 Page 2 of 8 • RFP Scenario 3: Innovative Services with no rate impacts and currently unquantifiable tonnage diversion. 1) C&D discount coupons for self haulers. Staff does not recommend pursuing the following programs: • RFP Scenario 2: Zero Waste Services: 1) Expanding organic materials to the residential sector. 2) Expanding single stream materials that do not have a sustainable market. • RFP Scenario 3 Innovative Services: 1) RecycleBank for residential recycling 2) Multi-family and commercial solid waste processing 3) Single-Family solid waste Processing 4) Wet/Dry collection 5) Anaerobic digestion of commercial food waste BACKGROUND The current agreement with PASCO to collect and transport solid waste and recyclables within the City of Palo Alto will end on June 30, 2009. The procurement process for a new agreement began in February 2008. The projected schedule for awarding a new contract is September 2008 with new services beginning July 1, 2009. At the Council meeting on December 17, 2007 (CMR:459:07, Attachment A), the Council approved a three step process for reviewing the proposals: 1) selection of programs based on the cost impacts and estimated diversion results without identifying the proposing companies, 2) selection of the top proposer to negotiate with and 3) award of contract. This report covers the first stage of this process. DISCUSSION In October 2005, the City adopted a Zero Waste Resolution and set a goal to divert 73 percent of waste by 2011 and to strive for zero waste to all landfills utilized by the City by 2021. In October 2007, the City Council approved a Zero Waste Operational Plan (ZWOP) that recommended programs to implement in order to reach the diversion goals. The RFP solicited proposals for three different scenarios: RFP Scenario 1 - baseline services; RFP Scenario 2 - Zero Waste services; and RFP Scenario 3 - other service innovations. This report takes information from the proposals received and provides an estimate on the rate impact and diversion for the RFP Scenarios. The rate impact was estimated by using the highest proposed costs, the Refuse Fund’s ten year forecasting tools, and the estimate that a one percent rate increase is approximately equivalent to $275,755 in services or revenues generated from rates. RFP Scenario 1 - Baseline Services Baseline services include, for the most part, basic solid waste, recycling and yard trimmings services that are currently provided by PASCO. Comparisons of existing PASCO services with the new baseline services differ in the areas of land use changes, collection service changes and impacts from the competitive solicitation process. Examples of these differences include: CMR:256:08 Page 3 of 8 Recycling Center operation is not included; limited use of the current Geng Road site; landfill areas for container storage are no longer available; standard location for collection changing from backyard to curbside; recycling buddies distributed to multi-family customers; start up cost; performance bond requirements; net recyclable materials processing revenues; and allocated depreciation. The new baseline services will result in an estimated rate impact of up to 6.4 percent above FY 2008-09 refuse rates and a projected additional diversion impact of up to 750 tons. This increase is due to changes made to the new baseline service levels and estimated CPI adjustments needed when comparing FY 2008-09 costs to FY 2009-10 projections. RFP Scenario 2 - Zero Waste Services Zero Waste services include the following six additional programs that were recommended in the City’s Zero Waste Operational Plan: 1) Expanding organics materials (food waste collection and processing); 2) Expanding single stream materials; 3) Expanding the Clean-Up Day collection for reuse and recycling; 4) Enhancing recycling through mandatory participation; 5) Increasing construction and demolition (C&D) diversion; and 6) Enhancing commercial recycling (providing recycling to all businesses). The following table shows the projected rate impacts and estimated tonnage diversion for each of the six programs. Zero Waste Programs Projected Highest Rate Impact Estimated ZWOP Tonnage Diversion 1) Expanding organics materials Residential Commercial Subtotal 4.7 % 3.5 % 8.2 % 2,001 4,500 6,501 2) Expanding single stream materials Residential Commercial Subtotal (.1 %) .6 % (.5%) 614 1,804 2,418 3) Expanding the Clean-Up Day collection for reuse and recycling 1 % 400 4) Mandatory Participation Recycling Residential Commercial Organics Residential Commercial Subtotal .3 % (.2 %) 1 % 1.9 % 3 % 614 1,804 2,001 4,500 8,919 5) Increasing C&D Diversion 2.6 % 5,342 CMR:256:08 Page 4 of 8 6) Enhancing Commercial Recycling .24 % N/A* Total 15.5 % 23,580 * Zero Waste Operational Plan did not estimate additional projected tonnage to be recovered from this program The total projected rate impact for all of the Zero Waste programs is 15.5 percent above FY 2008-09 refuse rates with an estimated diversion of 23,580. Staff’s recommendation is to expand organics materials only to the commercial sector reducing the total rate impact of RFP Scenario 2 - Zero Waste services from 15.5 percent to 10.8 percent above FY 2008-09 refuse rates and a projected annual diversion of 21,579 tons of materials. Recommendations for Zero Waste Programs not to pursue at this time The criteria for staff recommendations were based on rate impact, estimated diversion and market sustainability. Staff is not recommending to Council the following programs to pursue for the following reasons: 1) Expanding organic materials for the residential customers. The 2005 Waste Composition Study reported that there were 18,000 tons of organic materials remaining in the waste stream. The majority of these materials, approximately 89 percent, are from the commercial sector. Review of proposals indicates that organics collection is considerably more expensive per ton for the residential sector than for the commercial sector. Staff recommends expanding the organics collection to the commercial sector where there is the potential for twice as much of a diversion impact and half the rate impact to customers. Staff also recommends considering expanding the service to the residential sector at a later date when it becomes more cost effective. 2) Expanding single stream recycling. In expanding single stream recycling, proposers included adding textiles and aseptic materials, but reported that they do not have reliable or sustainable markets, and that the fluctuating demand for these materials results in them having to be stored from time to time until there is a market demand. Staff is recommending to only expand materials that can maintain an ongoing sustainable market and to minimize stockpiling of these resources. RFP Scenario 3 - Other Service Innovations The purpose of this scenario was to allow the proposers to suggest other creative ways for maximizing the diversion of materials from landfill disposal in furtherance of the City’s Zero Waste Policy and Zero Waste Operational Plan. The proposed service innovations received included the following: 1) C&D discounts coupons for self haulers 2) RecycleBank for residential recycling 3) Multi-family and commercial solid waste processing 4) Single-Family solid waste processing 5) Wet/Dry collection 6) Anaerobic digestion of commercial food waste The following table shows the projected rate impacts and estimated tonnage diversion for each proposed program under the Scenario 3 – Other Service Innovations. CMR:256:08 Page 5 of 8 Service Innovation Projected Highest Rate Impact Estimated Tonnage Diversion C&D discount coupons for self haulers 0% N/A Recycle Bank for Residential Recycling Customers .6 % 828 Multi-family and Commercial Solid Waste Processing 9 % 15,828 Single Family Solid Waste Processing 4.42 % 6,750 Wet/Dry Collection N/A N/A Anaerobic Digestion of Commercial Food Waste N/A N/A Staff is recommending pursuing C&D discount coupons for self haulers because it has no rate impact, it will provide an incentive to Palo Alto self haulers to recycle their C&D material, and it will provide additional potential diversion, currently unquantifiable, for the City. Recommendations for other service innovations not to pursue at this time 1) RecycleBank for Residential Recycling. The proposed RecycleBank program is designed to provide residential customers with incentive coupons in appreciation for increasing the amounts of recycle materials set out at the curbside. This program was designed and has been proven to be effective for setting up new residential recycling programs within a community. It requires quantifying amounts of materials being recovered from each residential customer. Staff does not recommend implementing this new program for the City because it would realize minimal change for the investment since the residential program is already established. The program would also requires a burdensome accounting system and does not specifically encourage or promote the City’s Zero Waste goal to reduce waste. 2) The Combination of Multi-family, Commercial and Residential Solid Waste Processing. Both the multi-family, commercial and residential solid waste processing proposals operate through a material recovery facility similar to the SMaRT Station where recyclable materials are pulled out of the solid waste stream. The proposed processing system is in its initial planning stage and it conflicts with the City’s partnership in the SMaRT Station. 3) Wet/Dry Collection. The wet and dry collection proposal is not recommended for further evaluation since it is a completely different collection system than what is used in Palo Alto currently and does not appear to promote waste reduction or recycling. 4) Anaerobic Digestion of Commercial Food Waste. The anaerobic digestion of commercial food waste is also not recommended for further evaluation at this time since it is a new technology currently in the conceptual stage that is costly and currently unproven. CMR:256:08 Page 6 of 8 Projected Rate Impact to Customers As shown in the table below, the proposed rate increase for baseline services in rate period FY 2009-10 represents an overall increase in the average refuse monthly service of approximately $1.70 per month for residential customers and an approximate increase of $14.74 for the average commercial customer with a 2 cubic yard collection service. Projected Rate Impact to Customers in FY 2009-10 RFP Scenario 1 - Baseline Services Refuse Monthly Utility Bill as of July 1, 2008 Projected Highest Rate Impact $ Difference FY 2009-10 Estimated Monthly Refuse Rate Average (32-gallon) Refuse Residential Service $26.58 6.4% $1.70 $28.28 Average Refuse (2 cubic yards) Commercial Service $230.37 6.4% $14.74 $245.11 Staff surveyed surrounding jurisdictions to compare Palo Alto’s proposed single-family rates with other communities’ rates. Although Palo Alto’s projected rate is at the high-end of the spectrum, Palo Alto currently provides more services through the Refuse Fund than other jurisdictions which makes it difficult to equally compare the service levels. Palo Alto’s current premium services include: backyard garbage collection; weekly street sweeping; monthly hazardous waste collection; extensive recycling collection and waste diversion services; and landfill and composting operations. Single Family Rates From Surrounding Jurisdictions Jurisdiction FY 2007-08 for one 32-gallon can refuse service Actual FY 2008-09 for one 32-gallon can refuse service FY 2009-10 for one 32-gallon can refuse service Projected for Baseline Services Cupertino $29.40 $30.57 Los Altos Hills $28.03 $28.03 San Jose $25.80 $26.95 Palo Alto $24.16 $26.58 $28.28 Los Altos $24.14 $28.03 Sunnyvale $23.12 $25.31 (projected) Santa Clara $16.25 $17.05 Mountain View $15.75 $16.40 Average rate $23.33 $24.72 The rate impact based on a total package of baseline services in addition to all of the Zero Waste programs is projected to be approximately 21.9 percent above FY 2008-09 rates. The table below shows the projected total rate impact to the average residential and commercial customers in the first year of the new contract, FY 2009-10. CMR:256:08 Page 7 of 8 Projected Rate Impact to Customers in FY 2009-10 RFP Scenario 1 - Baseline Services plus ALL RFP Scenario 2 - Zero Waste Services Refuse Monthly Utility Bill as of July 1, 2008 Highest Rate Impact $ Difference FY 2009-10 Monthly Refuse Rate Average (32-gallon) Refuse Residential Service $ 26.58 21.9 % $ 5.82 $ 32.40 Average Refuse (2 cubic yards) Commercial Service $230.37 21.9 % $50.45 $280.82 The rate impact based on a package of baseline services and staff’s recommended Zero Waste programs is projected to be approximately 17.2 percent above FY 2008-09 rates (6.4% for baseline services plus 10.8% of recommended Zero Waste services). The table below shows the projected rate impacts of staff’s recommendation to the average residential and commercial customers in the first year of the new contract, FY 2009-10. Projected Rate Impact to Customers in FY 2009-10 RFP Scenario 1 - Baseline Services plus Staff Recommended RFP Scenario 2 - Zero Waste Services Refuse Monthly Utility Bill as of July 1, 2008 Highest Rate Impact $ Difference FY 2009-10 Monthly Refuse Rate Average (32-gallon) Refuse Residential Service $ 26.58 17.2 % $ 4.57 $ 31.15 Average Refuse (2 cubic yards) Commercial Service $230.37 17.2 % $39.62 $269.99 SMaRT Station and Kirby Canyon Landfill Effects The Zero Waste Operational Plan projects that if all the zero waste services are implemented per the plan in this new agreement, 23,580 tons of less waste would be delivered to the SMaRT Station. This could create a 7% annual rate savings or approximately $1,925,000 in annual savings to the City, even after paying the penalty for not meeting the "put or pay requirement" at Kirby Canyon Landfill. Next Steps Staff plans to return to Council in July 2008 to report on the evaluation and ranking of the two proposals and to request a recommendation on the company with whom staff is to negotiate a final agreement. In September 2008, staff will return to Council with a recommendation for approval and execution of the final Agreement. New services are scheduled to begin July 1, 2009. CMR:256:08 Page 8 of 8 RESOURCE IMPACT Resource impacts will be further evaluated and presented in July 2008 after Council direction on selection of future programs. POLICY IMPLICATIONS These recommendations are consistent with existing policies. ENVIRONMENTAL REVIEW In February 2008, the City retained HDR to perform an environmental assessment in connection with the final award of the new contract. HDR is in the process of completing the environmental assessment which will be presented to the Council for approval in September 2008 along with the final agreement. ATTACHMENTS Attachment A: CMR:459:07 Copies of the attachment to this CMR:256:08 may be viewed at the Public Works Department counter located at 250 Hamilton Avenue, 6th Floor, Palo Alto or by contacting Paula Borges- Fujimoto at 650-496-5914. PREPARED BY: ______________________________________ PAULA BORGES-FUJIMOTO Executive Assistant DEPARTMENT HEAD: ______________________________________ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: ______________________________________ KELLY MORARIU and STEVE EMSLIE Deputy City Managers