HomeMy WebLinkAboutStaff Report 329-08CITY OF PALO ALTO
Memorandum
TO:CITY COUNCIL
July 23, 2008
SUBJECT:AUTHORIZE STAFF TO NEGOTIATE WITH GREENWASTE OF PALO
ALTO TO PRO~E SOLID WASTE, ~CYCLING ~D ORG~CS
SERVICES ~D, IF NEGOT~TIONS ~ NOT SATISFACTORY,
AUTHO~ZE ST~F TO ~TE~AT~LY ~GO~ ~H NORC~
SYSTEMS OF P~O ~TO
The above-referenced City Manager’s Report (CMR:329:08) is scheduled for Council on August 4,
2008, and is enclosed early for Council’s packet of July 28, 2008.
GLENN S. ROBERTS
Director of Public Wo~)ks
KELLY
Deputy City Managers
City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: PUBLIC WORKS
AUGUST 4, 2008 CMR:329:08
AUTHORIZE STAFF TO NEGOTIATE AN AGREEMENT WITH
GREENWASTE OF PALO ALTO TO PROVIDE SOLID WASTE,
RECYCLING AND ORGANICS SERVICES AND, IF NEGOTIATIONS
ARE NOT SATISFACTORY, AUTHORIZE STAFF TO
ALTERNATIVELY NEGOTIATE WITH NORCAL WASTE SYSTEMS
OF PALO ALTO
RECOMMENDATION
Staff recommends that Council authorize staff to negotiate an agreement with GreenWaste of
Palo Alto to provide solid waste, recycling and organics services and, if negotiations are not
satisfactory, authorize staff to alternatively negotiate with Norcal Waste Systems of Palo Alto
(Norcal).
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 l, 2009.
In July 2007, Council adopted a Code of Conduct relating to the procurement process for the
new waste hauling contract. Resolution 8734 (Attachment A) discourages Council members
fxom conducting non-public meetings or conversations with potential proposers and requires that
any such non-public meetings be disclosed within 30 days of the meeting. In accordance with
this adopted Council policy and in accordance with purchasing best practices, a series of public
meetings have been conducted to gather Council and community input on this significant
procurement.
At the Council meeting on December 17, 2007 (CMR:459:07, Attachment B), Council approved
a three step process for reviewing the solid waste hauling 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 for negotiations; and 3) award of contract. This
report covers the second stage of this process.
At the Council meeting on June 23, 2008 (CMR:256:08), Council provided direction on the level
of services to be included in the new agreement based on initial estimated highest cost impacts
CMR:329:08 Page 1 of 8
and projected annual diversion of materials. Based on this direction, the new contract will
include the following services:
Scenario 1: Baseline services;
Scenario 2: Zero Waste Services including:
1) Expanding organics materials collection only to the commercial sector (food
waste collection and processing).
2) Expanding single stream materials only for items that have a sustainable
market.
3) Expanding Clean-Up Day collection for reuse and recycling.
4) Enhancing recycling (and organics) through mandatory participation.
Program elements of the mandatory participation program include:
In the first year, commencing July 1, 2009, the contractor educates
customers on how to comply with mandatory participation and phase-in
schedule requirements;
In the second year, commencing July 1, 2010, the contractor notifies
customers who fail to separate recyclable and compostable materials from
solid waste with a warning;
In the third year, commencing July 1, 2011, the contractor assists the City
in enforcing fines or penalties if customers fail to separate recyclable and
compostable materials from solid waste.
5)Increasing construction-and demolition diversion (C&D) (a minimum of 70
percent of the materials recovered from each mixed C&D debris load for reuse
and/or recycling and a minimum of 90 percent from each source separated
C&D load).
6) Enhancing commercial recycling (providing recycling to all businesses).
Scenario 3: Innovative Service:
1) A 10% C&D discount coupon at a local processing facility for self haulers.
DISCUSSION
Request for Proposal Process
Potential service providers were notified of the Request for Proposals (RFP) process starting in
September 2007 through direct letters and electronic mail and were informed to register with
DemandStar’s Online Procurement System (DemandStar) where multiple announcements about
the RFP and projected timeline were made. Staff also placed advertisements for the RFP in
MSW Management, a popular magazine for the municipal solid waste industry, on the website
for the California Resource Recovery Association (CRRA) and on the CRRA electronic list
serve. The RFP was released and posted on DemandStar on February 29, 2008. Below is a
summary of the solicitation.
CMR:329:08 Page 2 of 8
Proposal description/Number
Proposed length
Number of bids mailed
Summary of Solicitation
Solicitation of proposals to provide solid waste,
recyclable, and organic materials services;
RFP124501-0-2007/GP
8 years with ability to be extended, unilaterally by
the City, in increments of one or more years for a
maximum term of 12 years.
RFP was posted on DemandStar. A total of 25
businesses downloaded the RFP from
DemandStar including potential proposers,
consultants, material processors and other
interested organizations.
Total days to respond to proposal 44
Mandatory pre-proposal meeting Yes
Number of companies present at pre-8proposal meeting
Number of proposals received 2
Range of initial first year proposal totals From $15,077,724 to $16,067,546 for total annual
submitted compensation for the first year
On May 5, 2008, proposals were received from two qualified companies: GreenWaste of Palo
Alto (GreenWaste) and Norcal Waste Systems of Palo Alto (Norcal). Staff checked references
supplied by both companies for previous and current services performed in other municipalities
and found strong references for both GreenWaste and Norcal and no significant complaints for
either company.
Staff contacted all the potential proposers that were present at the proposal conference meeting
or that registered through DemandStar but did not bid on the RFP. The Palo Alto Sanitation
Company (PASCO), the current service provider, did not bid on the contract due to business
reasons of its parent company Waste Management. The remaining potential proposers did not
bid because of: 1) commitments with other RFPs; 2)the capital expenditure needed for the
City’s contract, such as providing an operations yard; and 3)the challenges regarding Zero
Waste implementation.
Proposer Comparisons
GreenWaste and Norcal are both qualified companies and provided competitive proposals.
GreenWaste is a joint venture partnership, privately owned, with headquarters in San Jose. The
partnership has 30 years of experience in the collection industry with current contracts in the
cities of San Jose, Petaluma, Portola Valley, Woodside; Santa Cruz County and South Bayside
Waste Management Authority. Norcal is a corporation with an employee stock ownership plan
with headquarters based in San Francisco. Norcal’s parent company was recently identified as
the nation’s 8th largest recycling and solid waste company and has collection agreements with 43
jurisdictions in Northern California, including San Francisco. Nine of these contracts are with
CMR:329:08 Page 3 of 8
Santa Clara County jurisdictions. Attachment C provides comparison details on the overview of
both companies and proposals including information on: financial strength; litigation; proposed
financing; subcontractors; staffing; facilities and key personnel.
Service Comparisons
GreenWaste and Norcal proposed different approaches to providing the baseline and Zero Waste
services outlined in the City’s RFP. Attachment C (starting on page 4) contains further
comparisons of each proposer in the following key service areas:
Residential collection methods for solid waste, recycling, yard trimmings, and other
collection services including backyard collection and hard to serve areas;
Commercial collection methods for solid waste, recycling, organics and food waste
collection from special events;
Roll-off services;
City facilities collection;
Customer service, and
Diversion and processing.
Proposer Compensation Comparisons
The contractor’s total compensation for the new agreement is structured in two parts. The first
part is a "base compensation" (including baseline and zero waste services) and the second part is
for "extra services" provided on a unit-price basis. The base compensation includes: all labor,
equipment, materials and supplies; cost of capital; payments to processers; payments to
subcontractors; taxes; insurance; bonds; overhead; profit; and all other things necessary to
perform the services required in the agreement. The extra service compensation based on a unit
price basis was created to minimize cost to the City for services that change or have the potential
to change frequently depending on modifications in service levels. The extra services include:
back/side yard solid waste collection from single family residences, collection in hard to service
areas, drop box services and cart purchases. The base compensation and unit pricing of the extra
services for the first two years of the agreement (FY 2009-10 and FY 2010-11) will be set per the
contractor’s proposal. In subsequent years, the base compensation and unit pricing in the extra
services will be adjusted annually, based on the application of specified indices produced by the
U.S. Department of Labor, Bureau of Labor Statistics. The summary chart contained in this
report shows total compensation comparisons. Further cost detail comparisons are shown in
Attachment D.
Best and Final Offer Process
In order to further lower costs and reduce the rate impact to customers, the Steering and
Advisory Committee decided to request a Best and Final Offer (BAFO) from the two proposers
following the June 23 Council meeting. The BAFO request provided the proposers with an
opportunity to further refme and clarify their proposed services and costs.
Below is a summary chart on the total compensation comparisons, including base compensation
(baseline and Zero Waste services) and extra services, based on HF&H Consultants’ analysis of
the two cost proposals (Attachment D).
CMR:329:08 Page 4 of 8
FY 2009-10
FY2010-I1
Total 8-Year Contract Term
8-Year Term % Difference
Total 12-year contract term
12-Year Term % Difference
Total Compensation Comparison
Norcal
$14,802,599
$15,529,280
$131,815,753
$208,166,021
Variance
(GreenWaste -
Norcal)
($1,274,361)
($1,864,772)
($16,326,035)
-14.1%
($26,822,008)
-14.8%
Evaluation of Proposals
The evaluation review of GreenWaste and Norcal’s proposals was conducted by three separate
committees: a Technical Advisory Committee, an Evaluation Committee, and a Steering &
Advisory Committee. The configuration of each evaluation committee is shown in
Attachment E. The Technical Advisory Committee consisted of departmental staff that reviewed
the proposals focusing on each individual’s specialized technical areas (e.g. Utilities customer
service billing) and provided this information through a summary report to the Evaluation
Committee. The Evaluation Committee consisted of nine evaluators (including Public Works
professionals from three neighboring cities) and was chartered to review and evaluate all
proposals and related materials in detail, interview proposers, score and rank proposals and
provide a recommendation to the Steering & Advisory Committee. The Steering & Advisory
Committee was an executive staff level governance committee with oversight of the project and
of the Evaluation Committee. HF&H Consultants and legal counsel Ray McDevitt from Hanson,
Bridgett, Marcus, Vlahos & Rudy provided technical and legal analysis of proposals to the
committees.
The evaluation scoring was based on the following criteria approved by Council in December
2007 (CMR:459:07) and identified in the RFP:
CMR:329:08
Administrative, Financial, and Contractual (maximum 20 points), including such factors as:
1. Solid waste and diversion experience of firm and key staff, municipal agency
references, and regulatory record.
2. Financial ability to perform its obligations under the Agreement including securing
facilities and equipment.
3. The number and significance of exceptions to the draft Agreement.
Technical and Environmental (maximum 40 points), including such factors as:
1. Reasonableness of transition and operational plan; effectiveness of collection and
processing services and facilities (including marketing of materials); and,
effectiveness of public outreach, education and customer services programs.
2. Adverse environmental impact (including air and traffic) of operations, vehicles and
facilities (including miles traveled and emissions); and, beneficial impacts (diversion
and highest and best use of materials).
Page 5 of 8
Cost (maximum 40 points), including such factors as:
1. Reasonableness and predictability of future costs;
2. Relative competitiveness of costs;
3. Cost effectiveness; and
4. Total cost.
The collective evaluation scores: by the Evaluation Committee for both GreenWaste and Norcal’s
proposals are summarized in the following table:
Evaluation Aggregated Final Scores
Evaluation Criteria
Category
Administrative, Financial,
and Contractual
Technical and Environmental
Cost
Total Score
Maximum
Score Possible
(9 evaluators)
180
360
360
900
129
Norcal
161
274
251
686
In summary, out of a total possible aggregate score of 900, GreenWaste received a total score of
721 and Norcal received a score of 686. Six out of the nine evaluators gave GreenWaste a
higher overall score whereas Norcal received the highest score from three of the evaluators.
GreenWaste received a higher score in "Technical and Environmental" and in the "Cost"
category of the evaluation criteria.
Justification for Staff Recommendation
Staff recommends selecting GreenWaste as the top proposer to negotiate a new agreement to
provide services because GreenWaste scored highest in the evaluation process, provided a
stronger operational proposal and is the lowest cost proposer.
GreenWaste’s key strengths include:
GreenWaste’s costs are $16 million or 14 percent lower than Norcal’s over the 8-year
contract term.
GreenWaste’s operational approach for single family residential solid waste collection is
preferable to Norcal’s. GreenWaste’s approach is similar to the current PASCO
methodology. GreenWaste will collect solid waste using a two person crew with a single
body semi-automated collection vehicle (versus Norcal’s one person per route with a split
body vehicle). This limits the effect of transition on current residential customers and
minimizes uncertainties associated with a new operational approach.
The GreenWaste partners also own the processing sites for single stream recyclable
materials, organics and C&D. The processing sites are closer to Palo Alto than Norcal’s
proposed facilities thus reducing fuel costs and overall air emissions.
CMR:329:08 Page 6 of 8
GreenWaste plans to reduce the number of vehicles
commercial sector as recycling collection increases
reduces costs and air emissions over the contract term.
collecting solid waste from the
and becomes mandatory. This
Next Steps
Staff plans to negotiate with GreenWaste the terms of a final contract within the parameters set
forth in this report and the maximum compensation projections set forth in CMR 256:08. Staff
will return to Council with a recommendation for approval and execution of the final agreement
in September 2008. New services are scheduled to begin July 1, 2009.
RESOURCE IMPACT
The detailed rate impact comparison conducted by HF&H between GreenWaste and Norcal’s
proposals can be found in Attachment D, Tables B and D. The negotiation phase of the process
has the potential to increase or decrease the proposed cost stated by the proposers, depending on
minor adjustments to service levels and related factors (i.e. use of existing equipment ). Staff
will remain committed to not exceed the maximum compensation parameters tentatively
authorized by Council on June 23, 2008 (CMR 256:08). The rate impact of the new baseline
services and Zero Waste programs based on the recommended GreenWaste proposal is projected
to be approximately 11.9 percent above FY 2008-09 rates, but could be slightly different
depending on the negotiations as discussed above.
SMART Station and Kirby Canyon Landfill Cost Offset
The implementation of the Zero Waste services will result in an estimated 21,535 tons of less
waste delivered to the SMART Station and to the Kirby Canyon Landfill in FY 2009-10 which
will result in avoided disposal cost and put-or-pay commitments of approximately $1,350,402.
This could reduce the rate impact to an estimated 7 percent annual (instead of the projected 11.9
percent), even after the penalty for not meeting the "put or pay" requirement at Kirby Canyon
Landfill. The following table summarizes the projected rate impact in the first year of the new
contract, FY 2009-10, based on the projected GreenWaste compensation.
Projected Total Rate Impact for
GreenWaste’s Compensation Proposal
Estimated rate impact based on total
compensation
Estimated rate net impact of avoided disposal
and put-or-pay commitments at SMART
Station/Kirby
FY 2009-10
11.9 %
(4.9%)
Total Projected Rate 7.0%
POLICY IMPLICATIONS
The recommendation is consistent with existing policies and previous Council direction.
CMR:329:08 Page 7 of 8
ENVIRONMENTAL REVIEW
In February 2008, the City retained HDR Consultants (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:
Attachment B:
Attachment C:
Attachment D:
Attachment E:
Resolution 8734
CMR:459:07
Proposer & Service Comparison
HF&H Analysis on Proposals Cost Impacts
Structure of Evaluation Committees
Copies of the attachments to this CMR:329:08 may be viewed on-line at
http://www.cityofpaloalto.orc,./knowzone/agendas/council.asp; or at the Public Works
Department counter located at 250 Hamilton Avenue, 6t~ Floor, Palo Alto or by contacting Paula
Borges-Fujimoto at 650-496-5914.
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
BORGES
:eutive Assistant
GLENN S. ROBERTS
Director of Public Works .~i) ..,~)
KELLY MORARIUi~in~t ST~VE EMSLIE
Deputy City Managers t
CMR:329:08 Page 8 of 8
ATTACHMENT A
RESOLUTION NO. 8734
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
ADOPTING A CODE OF CONDUCT FOR CITY COUNCIL
MEMBERS AND CITY COUNCIL CANDIDATES FOR THE
REFUSE HAULING PROCUREMENT PROCESS
WHEREAS, the Palo Alto Municipal Code requires that the Palo Alto City Council
approve certain City contracts;
WHEREAS, the members of the City Council are obligated to comply with the
Political Reform Act of 1974 (the "Political Reform Act") by disclosing economic interests and
to avoiding participation in matters in which they have conflicts of interest;
WHEREAS, in November 2007 new City Council members will be elected;
WHEREAS, Palo Alto Sanitation Company (PASCO) has been providing refuse
collection services to the City since 1947;
WHEREAS, in November 1988, PASCO was formally acquired by USA Waste of
California, a Waste Management Inc. company and in 1999 the City entered into a collection
contract with PASCO, a wholly owned subsidiary of USA Waste of California;
WHEREAS, in anticipation of the end of a ten-year contract for refuse-hauling
services in 2009, City staff has initiated the process to develop a request for proposals, solicit
bids, and select a contractor for a new refuse hauling contract (the ’.’Solicitation Process");
WHEREAS, the incumbent waste hauler has had an exclusive franchise with Palo
Alto since 1987 and thus this is the first time in approximately 20 years that the City has
embarked on a Solicitation Process for waste hauling services;
WHEREAS, it is expected that the contract awarded for waste hauling services will
be one of the largest contracts awarded by the City in recent years;
WHEREAS, waste hauling solicitation processes in neighboring jurisdictions have
been the subject of various investigations regarding alleged improper conduct;
WHEREAS, the City Auditor has recommended that the City Council adopt a policy
to ensure that the Solicitation Process for a new refuse hauling contract is an arms-length
process, free from any undue influence orappearance of impropriety; and
WHEREAS, the City Council desires to maintain a Solicitation Process for the
refuse-hauling contract that complies with the Political Reform Act and is free from any undue
influence or appearance of impropriety by adopting additional regulations for the refuse hauling
Solicitation Process.
0130156
follows:
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as
SECTION 1. The following code of conduct shall apply to all elected Palo Alto
council members and all candidates running for City Council in the general municipal election
scheduled for November 6, 2007 (collectively "Covered Parties").
SECTION 2. Covered Parties are discouraged from accepting contributions by
potential refuse hauling proposers ("Potential Proposers"), and shall be required to disclose
campaign contributions made by Potential Proposers and accepted by Covered Parties.
Disclosure of such contributions shall be on the form attached as Exhibit "A" and submitted to
the City Clerk within thirty days of receipt of a campaign contribution from a Potential Proposer.
SECTION 3. City Council members shall disclose to the City Clerk any income
from a Potential Proposer. For the purposes of this resolution, "income" shall be as defined in
the Political Reform Act. Disclosure of such income shall be on the form attached as Exhibit "B"
and submitted to the City Clerk within thirty days of receipt of such income.
SECTION 4. At all times during the Solicitation Process for the refuse hauling
contract, non-public meetings or conversations between Potential Proposers and City Council
members are discouraged. In the event that City Council members hold non-public meetings with
Potential Proposers, they shall disclose the fact of those meetings by filling out the form attached
as Exhibit "B" and delivering it to the City Clerk within thirty days following the meeting date.
A "non-public" meeting is any meeting that has not been called and held in accordance with the
Ralph M. Brown Act.
SECTION 5. This Code of Conduct and disclosure requirements shall expire six
months after the Council awards the contract to the successful waste hauling contractor. In the
event multiple contracts are awarded, the six months will begin to run upon award of the last
contract.
SECTION 6. The City Clerk shall provide notice and a copy of this resolution and
the notice of any contract award to all Covered Parties.
INTRODUCED AND PASSED:July 16, 2007
AYES:BARTON, CORDELL, DREKMEIER, KISHIMOTO, KLEINBERG, MOSSAR
NOES:BEECHAM, KLEIN, MORTON
ABSENT:
ABSTENTIONS:
ATTEST:
0130156 2
City Clerk
APPROVED AS TO FORM:
Cit~rney
City
City Auditor
Director of A~t~istrative Services
0130156
Exhibit A
CITY OF PALO ALTO
CITY COUNCIL CANDIDATE DISCLOSURE FORM
CAMPAIGN CONTRIBUTIONS BY POTENTIAL WASTE-HAULING PROPOSERS
Pursuant to City of Palo Alto Resolution No. __, City Council candidates must disclose to the
City Clerk any campaign contributions from potential proposers in the City’s solicitation process
for refuse hauling ("Potential Proposer").
Submit this form to the City Clerk within thirty (30) days following receipt of a campaign
contribution from a Potential Proposer.
City Council Candidate Name:
Contributor Name:
Contribution Amount:
Contribution Date:
Date:Candidate Signature:
0130156 4
Exhibit B
CITY OF PALO ALTO
CITY COUNCIL DISCLOSURE FORM
NON-PUBLIC MEETINGWITH POTENTIAL WASTE-HAULING PROPOSERS
Pursuant to City of Palo Alto Resolution No. __, City Council members must disclose to the
.City Clerk the occurrence of any non-public meeting with or any source of income from a
proposer or potential proposer in the City’s solicitation process for refuse hauling ("Potential
Proposer").
Submit this form to the City Clerk within thirty (30) days following a meeting with or receipt of
income from a Potential Proposer.
City Council Member Name:
Name of Party or Parties Involved in Non-Public Meeting:
Meeting Date:
Description of Source of Income from Potential Proposer:
Income Amount:
Date:Council Member Signature:
ATTACHMENT B
City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
9
DEPARTMENT: PUBLIC ~WORKS
DATE:DECEMBER 17, 2007 CMR:459:07
SUBJECT:APPROVAL OF THE SUMMARY SCOPE OF SERVICES AND REVIEW
~OF EVALUATION PROCESS FOR THE DEVELOPMENT OF THE
REQUEST FOR PROPOSALS FOR THE NEW SOLID WASTE AND
RECYCLING COLLECTION AND PROCESSING SERVICES
AGREEMENT
RECOMMENDATION
Staff recommends that Council approve the summary scope of services (Attachment A) and
provide feedback on the evaluation process proposed for the upcoming Request for Proposals
(RFP) for the new solid waste and recycling collection and processing services agreement.
BACKGROUND
The current agreement with the Palo Alto Sanitation Company (PASCO) to collect and transport
solid waste within the City of Palo Alto is in effect until June 30, 2009. City staff, including a
cross-departmental committee and consultants, have been working on the process to solicit
proposers for a new solid waste and recycling agreement. The procurement process is expected
to begin in February 2008, with August 2008 as the projected date for awarding a new contract,
and new services beginning July 1, 2009. The key milestones and dates are included in the
project timeline (Attachment B).
At the Council study session on October 1, 2007, staff provided an overview of the upcoming
¯ procurement process for the new solid waste and recycling contract; highlighted key policy
issues relating to the new contract, and presented the challenges, options and preliminary.
approaches to the key RFP components.
On October 29, 2007, Council voted to approve staffs twelve pre "hminary recommendations
regarding key issues in the. development of the RFP for the new solid waste and recycling
collection and processing services. The recommendations focused on three major components of
the upcoming RFP: services, facilities, and certain agreement terms. A comprehensive list of the
recommendations and related information can be found in CMR:373:07 (Attachment C).
DISCUSSION
This report focuses on the summary scope of services for the new agreement and the evaluation
process for proposals received. It also provides an update on employee relations for the new
agreement.
CMR:459:07 Page 1 of 5
Scope of Services
Pursuant to Council’s earlier direction, the RFP will solicit proposals for baseline services as
well as zero waste, and other innovative programs. The goal of the broad scope is to collect
detailed technical and cost information so that the Council can perform a thorough cost benefit
analysis of all proposed programs. Below is a summary of the three general service levels which
will be included in the RFP scope of services. Additional details on these three service levels are
included in the summary scope of services (Attachment A).
Baseline services - These for the most part consist of the basic collection, disposal and
recycling services currently being provided by PASCO. There are some modifications of
the current services such as: the standard location for collection of containers will be
curbside, although residential backyard/side yard pickup will be offered at an additional
charge to customers; collection service on private streets or alleys may be offered at an
additional fee depending on the proposal bid costs received through the RFP;
additionally, the responsibility of operating a recycling center has been removed from the
baseline services until further direction froln Council.
Zero waste services - Includes the proposer’s approach to the six specific additional
services that are intended to implement elements of the City’s Zero Waste Operational.
Plan. These include:
1.Expanding organics materials;
2.Expanding single stream materials;
3.Expanding bulky item collection for reuse and recycling;
4.Enhancing recycling through mandatory participation;
5.Increasing construction and demolition (C&D) diversion; and
6.Enhancing commercial recycling.
The cost of these six services will be presented separately in the cost proposals so the
Council has the necessary information with which to choose all, some, or none of these
services.
Other service innovations - This will include the proposer’s approach to maximizm" g the
diversion of materials from landfill disposal in furtherance of the City’s Zero Waste
Policy and Zero Waste Operational Plan.
Evaluation Process
The selected proposer will be chosen based on the outcome of an evaluation. The evaluation and
scoring will be performed by an evaluation committee and overseen by the steering and advisory
committee. The evaluation committee will be responsible for making a professional
recommendation to Council who will ultimately select the successful proposer. Additional
information regarding the evaluation structure can be found in Attachment D.
Staff has identified two viable approaches that can be used for the evaluation process. Staff
recommends the following six step process for evaluating the proposals and selecting a
contractor.
CMR:459:07 Page 2 of 5
Initial evaluation: Upon receipt, the proposals will be evaluated for: compliance with the
procedures described in the RFP; completeness; and acceptability (achievement of
minimum requirements for comparable experience, financial ability, and agreement with
the proposed terms of the draft agreement). Those proposals that fail to pass the initial
evaluation will not be considered for further review.
Cost proposal evaluation: The cost proposals for each service level ("Baseline", "Zero
Waste" and "Other Service Innovations") of those proposals that pass the initial
evaluation will be reviewed. Clarifications and answers to any questions will be obtained
from the proposers.
Council selects service level: Staff will report to Council in May 2008 the ranges of
program costs and the estimated diversion results without identifying the proposing
companies for each of the service levels. Based on this information, Council will select
the service level that it desires. (Note that this step is optional depending on number of
proposals, cost of new programs and price variance.)
Ranking of proposals: The evaluation committee will complete the evaluation and
ranking of the proposals based on the weighting of the following criteria in addition to
any input (if applicable) regarding service levels discussed in Step 3 above:
Administrative.. Financial and Contractual (maximum 35 points). The following
types of items will be considered:
a. Solid waste and diversion experience of firm and key staff, municipal
agency references and regulatory record.
b. Financial ability to perform its obligations under the agreement including
securing facilities and equipment.
c. The number and significance of exceptions to the draft agreement.
Technical and Environmental (maximum 45 points). The following types of
items will be considered:
Reasonableness of transition and operational plan; effectiveness of
collection and processing services and facilities (including marketing of
materials); effectiveness of public outreach, education and customer
services programs.
bo Steps to minimize adverse environmental impact (including air and traffic)
of operations, vehicles and facilities (including miles traveled and
emissions); and, beneficial impacts (diversion and highest and best use of
materials).
Cost (maximum 20 points). The following types of items will be considered:
CMR:459:07
a. Reasonableness and predictability of future costs.
b. Relative competitiveness of costs.
Page 3 of 5
o Contractor selection: In June 2008, staff will report to Council the ranking ~f the
proposals and provide a recommendation on the company with whom staff is to negotiate
a final agreement. At this time Council can provide direction, as applicable, for the
negotiations (e.g., changes, elimination or additions to proposed programs and services
and/or directions regarding costs).
o Contract Approval and Execution: Staff will return to Council in August 2008,
recommending approval and execution of the final agreement. An environmental
assessment of any new operational aspects of the proposed agreement will be conducted
prior to Council’s final action.
An alternative approach to staff’s recommendation on the evaluation process is to eliminate
step 3 and present Council at one time information on the qualification, technical and cost
proposals for all proposers and each service level. This alternative approach would eliminate
Council’s early input on the cost aspects of the zero waste programs and other service
innovations. If there are multiple proposers with diverging costs staff believes this
intermediate step would be helpful to the overall selection process and would allow Council
to better consider the cost benefit of the new programs. Therefore, if there are several
proposers or if there is significant price divergence for the zero waste and other innovative
programs, staff recommends the multi-stage step evaluation process for the following
reasons:
Maximize compliance with the RFP process;
Minimize exceptions to the draft agreement;
Facilitate Council’s decision on the service level it wants, separate from the company
who will provide the service, and avoid the pressure to select the proposer with the
lowest cost proposal;
Facilitate Council’s selection of the best qualified contractor (rather than lowest cost);
and
Create the timely opportunity for the Council to direct staff and the contractor as to
any modification of the proposed services to best meet the needs of the City, its
residents and businesses.
Employee Relations Issues
One of the key issues raised at the October 29, 2007 public meeting was the retention of current
PASCO employees and the incorporation of employee relations language into the RFP. Pursuant
to Council’s direction, the RFP will require the proposers to offer employment to displaced
PASCO employees. As part of that effort, the new contractor will be required to compensate its
employees in accordance with the wages and benefits then in effect at the current contractor. In
addition, the RFP requires the proposers to provide detailed information regarding existing
human resources programs, employee grievance procedures and procedures for dealing with
employee absenteeism. A more detailed list of these RFP requirements relating to personnel and
employee relations is contained in Attachment A.
RESOURCE IMPACT
Resource impacts will be evaluated as part of the RFP process.
CMR:459:07 Page 4 of 5
POLICY I1VIPLICATIONS
These recommendations are consistem with existing policies and previous Council direction.
ENVIRONMENTAL REVIEW
This report is not a project for the purposes of the California Environmental Quality Act. The
City will perform an environmental assessment in connection with the !]nal award of the new
contract.
ATTACtlMENTS
Attachmem A:Summary Scope of Services
Attachment B:Project Timeline
Attachment C:CMR:373:07
Attachment D:Evaluation Structm’e
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Assistant
GLENN S. ROBERTS
Director of Public Works
Assistant City Manager
ClVIR:459:07 Page 5 of 5
Attachment A
Draft RFP
Summary Scope of Services
The City is requesting proposals to provide residential single-family, residential multi-
family, and commercial solid waste, recyclable materials, and organic materials services
and other services commencing July 1, 2009 for a base term of 8 years and a maximum
term of 12 years as described in the Agreement (Attachment 4). The scope of services is
summarized in this section.
Three Scenarios
The City is seeking proposals for three different scenarios. Each scenario is identified in
the list below and then described in more detail.
Scenario 1: Baseline Services - these include services being provided by the current
contractor.
Scenario 2: Zero Waste Services - this scenario includes the six specific additional
services (described below) that are intended to implement elements of the City’s Zero
Waste Operational Plan.
Scenario 3: Other Service Innovations - these are to include the proposer’s approach
to maximizing the diversion of materials from landfill disposal in furtherance of the
City’s Zero Waste Policy and Zero Waste Operational Plan
Scenario 1: Baseline Services
The contractor shall collect from residential single-family, residential multi-family, and
commercial customers solid waste, recyclable materials, and yard trimmings placed in
contractor provided containers. The standard location for collection of containers from
residential single family customers shall be curbside, although such customers may
receive sideyard/backyard service at an additional fee. Similarly, customers requesting
service on private streets and alleys, may pay an additional fee depending on the proposal
bid costs received through the RFP. The contractor shall deliver all the solid waste loads
to the SMART Station but the City reserves the option to redirect the loads when
appropriate to the City landfill located at 2380 Embarcadero Road. The City’s landfill is
currently projected to close in January 2011. The contractor shah collect yard trimmings
and transport them, to the City’s composting facility at the City landfill, until that
operation ceases. Thereafter the yard trimmings can be delivered to the SMART Station
unless the City directs that the material processing would stay local. In addition, the
contractor shall collect and transport recyclable materials to a contractor proposed and
City approved processing site.
In addition to the collection and transportation of solid waste, single stream recyclable
materials and yard trimmings from residential single-family, multi-family and
commercial accounts, the contractor shall provide the following services:
Backyard/side yard collection services for recycling, solid waste and yard trimmings
for individtmls with physical limitations.
Collection of solid waste using debris boxes (7, 15, 20, 30 and 40 cubic yard).
Page 1 of 6
Attachment A
Draft RFP
Summary Scope of Services
Collection of construction and demolition debris using debris boxes (7, 15, 20, 30 and
40 cubic yard) and transportation of these materials to an appropriate processing
facility. For purposes of this RFP, an appropriate processing facility is one which is
capable of recovering a minimum of 70% of the materials for reuse and/or recycling.
Collection of single stream recycling materials twice per month from different
locations at 26 City parks.
Collection of recyclables once per week from public receptacles at City Hall and four
other downtown locations.
Collection of solid waste from approximately 208 public receptacle locations and 17
bus stop locations.
Collection and recycling of pallets from commercial businesses.
Collection and marketing for reuse or recycling of polystyrene at City Hall.
Collection of single stream recycling to all occupied City buildings.
Collection of single stream recyclables in one to four cubic yard bins and in carts for
multi-family and commercial customers.
Cleaning of public receptacle containers located in the downtown business district
(approximately 50) twice per month.
Planning, delivery, transportation, collection and processing of recycling, solid waste
and organic service at all special events (approximately 16 annually) in the City using
contractor provided containers.
A 30 cubic yard debris box for garbage and a 4 cubic yard bin for cardboard
collection at the City’s Household Hazardous Waste events (approximately 12
annually).
Performance of waste audits of not less than twelve commercial businesses annually.
On-call Recycling Cleanout Service with not less than two 2-cubic yard bins on a
first-come first-serve basis for businesses and schools. ’ ’
One change out of cart sizes per year for no additional charge.
Continue shared, slotted and locked bins for recycling in the commercial sector
(approximately 15 locations)
Purchase and distribute "recycling buddies" for multi-family customers.®
®Review construction and remodel blueprint plans for adequate storage of solid waste
containers and for collection vehicle access (approximately 50 annually).
Clean-up Day - Curbside collection of excess debris, bulky items and household
items for single family homes and multi-family complexes with four units or less.
Contractor shall provide one appointment (on the regular refuse collection day) per
calendar year.
In addition to the direct services described above, the contractor shall provide the
following additional customer service, reporting and contract management activities:
local business office.
Page 2 of 6
Attachment A
Draft RFP
Summary Scope of Services
Monthly, quarterly, and annual reporting to the City, describing operations and
providing service information in a format approved by the City.
Scenario 2: Zero Waste Services
In support of its "Zero Waste Policy", on September 17, 2007, the City Council adopted
its Zero Waste Operational Plan (ZWOP). The ZWOP included the following six
specific programs, and proposals for these services are being requested:
2.1 Expanding Organics Materials
Commencing July 1, 2009, the contractor shall collect organics (food scraps,
compostable paper, untreated wood, untreated wallboard and other compostables)
placed in both carts and bins from commercial customers (includes multi-family).
The contractor may propose its or a subcontractor’s processing site which shall be
subject to City approval.
Commencing July 1, 2010, the contractor shall collect organics (food scraps,
compostable paper, untreated wood, untreated wallboard and other compostables)
placed in carts from residential customers. The contractor may propose its or a
subcontractor’s processing site which shall be subject to City approval.
2.2 Expanding Single Stream Materials
Commencing July 1, 2009, the contractor shall:
Add textiles and hardcover books to the materials included for single
stream collection.
Add milk and juice containers (gabled tops) to the materials included for
single stream collection.
2.3 Expanding Bulky, Item Collection for Reuse and Recycling
Commencing July 1, 2009, the contractor shall expand the bulky item reuse
recycling program by collecting from customers once annually (on an on-call
basis) separated materials for reuse or recycling from customers.
2.4 Enhancing Recycling Through Mandatory Participation
To reach the City’s Zero waste goals the City’s Zero Waste Operational plan
recommended to require residents, commercial and multi-family customers to
participate in the recycling and composting collection programs. The City is
asking the contractor to implement this mandatory participation program starting
in July 1, 2009 which requires customers to place recyclables and compostable
materials in the appropriate collection containers and to ban these materials from
disposal. Program elements of the mandatory participation program include:
Page 3 of 6
Attachment A
Draft RFP
Summary Scope of Services
In the first year, commencing July 1, 2009, the contractor shall notify
customers of the requirements;
In the second year, commencing July 1, 2010, the contractor shall provide
customers with a warning for failure to comply;
In the third year, commencing July 1,2011, the contractor shall penalize
customers for non-compliance.
The contractor shall submit a plan and cost to implement this program starting
with suggested types of materials, planned education tools to be used for first
year, warning system plan for the second year and then a plan for penalizing the
violators after the third year.
2.5 Increasing C&D Diversion
Commencing July 1, 2009, collect and transport all roll-offboxes (including those
generated from City crews), with less than 30% contamination; in construction
and demolition debris to a proposer-selected and City-approved processing
facility(ies).
2.6 Enhancing Commercial Recycling
Commencing July 1, 2009, provide public education and roll-out single stream
recycling services to all commercial customers. Commercial customers will be
allowed to opt out of the program if they fill out an appropriate City approved
form prior to delivery of containers.
Improve recycling in public areas (grocery stores, convenience stores,
hospitals and schools)
Scenario 3: Other Service Innovations
The City of Palo Alto reached a 63 percent diversion rate in 2005. The ZWOP goals are
73 % diversion by 2011 and to strive for zero waste by eliminating materials sent to the
landfills by 2021. The City is seeking proposals that include additional services that the
proposer believes would increase the City’s diversion levels (above 63% between 2009-
2011 and above 73% after 2011) for contractor-controlled streams of materials. These
may include, but are not be limited to, proposed policies/ordinances for adoption by the
Council, alternative business terms, additional or alternative programs, services and/or
facilities.
Page 4 of 6
Attachment A
Draft RFP
Summary Scope of Services
Other Sco~
Processing Proposals
Proposers shall include in their proposal a description of their arrangements for the single
stream recyclable processing, expanded organics program processing, and construction
and demolition debris processing. The City prefers one agreement for all services.
However, the City will consider proposals with separate contracts and terms for
processing facilities.
Disposal Services
Contractor shall be responsible for delivering solid waste to landfills and/or transfer
stations as directed by the City. It will be the City’s responsibility to identify and secure
disposal capacity. At the commencement of the Agreement, the contractor shall deliver
the waste materials to the SMART Station in Sunnyvale unless redirected by the City
which will then be to the City landfill at 2380 Embarcadero Road.
Environmental Impact
The City wishes to minimize the environmental impacts of the collection fleet including
efficient routing of vehicles, minimizing hauling distances, reducing traffic congestion
and minimizing noise. As one element of mitigating adverse environmental impacts,
proposers are directed to consider the use of clean alternative fuel vehicles and provide
separate costs from proposers for use of such vehicles.
Corporation Yard and Recycling Facility
The City requires all proposers to own, lease, or have an option to purchase or lease the
property to be used for staging equipment and personnel, equipment maintenance, and
recyclable materials processing. A portion (approximately one (1) acre) of PASCO’s
operational yard located at 2000 Geng Road may be available to rent to a future
contractor for discrete operations (e.g., storage of containers).
Other Conditions
Offer of Employment
The City’s new contractor shall offer employment to displaced workers currently
employed by the City’s current contractor at equivalent wages and benefits to the extent
such displaced workers are needed to perform the services described in attached
Agreement. As part of that effort, the new contractor will be required to compensate its
employees in accordance with the wages and benefits then in effect at the current
contractor. However, the new hauler is not required to: (a) displace any of its current
employees, (b) modify its current job performance requirements or employee selection
Page 5 of 6
Attachment A
Draft RFP
Summary Scope of Services
standards, or (c) offer employment to more of the displaced workers than are needed to
perform the services required under Agreement.
Effective Human Resources Management
The City has determined that the high quality service and customer satisfaction that it
wishes to maintain and continue to improve under the proposed contract is significantly
dependent upon the contractor’s effective human resources management. The City
frequently receives complimentary comments from its residents concerning the
performance of the current workforce with respect to both its perceived efficiency and
customer-friendly demeanor.
Each proposer should include in its proposal a detailed description of its human resource
philosophy and the programs and policies that it plans to implement to maintain and
improve the positive working environment and effective workforce performance that now
prevails. The proposer should include a description of any programs or policies that it
has implemented in the past, what has worked, what has not, and what it has learned from
the latter. Each proposal should describe its proposed grievance policy or procedure and
what experience it has had with it or similar policies in the past. Each proposal should
also describe any prior experience it has had with absenteeism and how it has dealt with
such issues in the past..
Page 6 of 6
ATTACHMENT B
New Solid Waste & Recycling Services Contract
Project Timeline -
Key Items
Release RFP
Proposals due
Evaluation and imerviews of proposers
CEQA - project level environmental review
Date
February 2008
April 2008
April - June 2008
Feb. - August 2008
Council study session (RFP cost results - proposed ranges of programs ) May 2008*
Council meeting (ranking of proposals and direction for negotiations)
Negotiate and finalize contract
Council meeting to award contract
New services begin
June 2008*
June - July 2008
August 2008*
July 2009
* Oppommities for Council involvement and/or direction
CMR:Attachmem A Page 1 of 1
TO:
FROM:
ATTACHMENT C
City of Palo Alto
City Manager,s Report
HONORABLE CITY COUNCIL 1 2
CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE:
SUBJECT:
OCTOBER 29, 2007 CMR:373:07
APPROVAL OF STAFF RECOMMENDATIONS FOR THE
DEVELOPMENT OF THE REQUEST FOR PROPOSALS FOR THE NEW
SOLID WASTE AND RECYCLING COLLECTION AND PROCESSING
SERVICES
RECOMMENDATION
Staff recommends that Council approve the twelve recommendations in the development of the
Request for Proposals (RFP) for the new solid waste and recycling collection and processing
services.
BACKGROLINO
The Palo Alto Sanitation Company (PASCO) has been collecting and transporting solid waste
within the City of Palo Alto since 1951 and has been collecting and processing recyclable
materials since 1978. PASCO initially operated under an "evergreen" contract that was renewed
every year. In November 1998, PASCO was formally acquired by USA Waste of California (a
Waste Management Company), and in August 1999, Council approved a new agreement for
PASCO starting on September 1, 1999 for a term of up to ten years. The agreement is in effect
until June 30, 2009.
In 2006, the Director of Public Works created a cross-departmental committee to oversee the
procurement process for a new solid waste and recycling services agreement. The committee
includes staff from the City Manager’s Office, Administrative Services, Planning, Public Works,
and Utilities Departments, and the City Manager’s Office. The City Attorney’s Office and the
City Auditor are advisors to the committee.
In March 2007, Coundl approved a contract with HF&H Consultants (HF&H), a consulting firm
.specializing in solid waste and recycling procmemem processes. HF&H’s scope of work
includes:
Evaluate and develop recommendations on the type of agreement, compensation
methodology and term best suited for the City of Palo Alto.
Incorporate the goals of the Zero Waste Operational Plan into the RFP.
Develop drafts and final copies of the RFP package and supporting documentation for the
draft agreement and establish evaluation criteria.
Assist in the evaluation of proposals, costs, and interview process.
CMR:373:07 Page 1 of 7
The procurement process is expected to begin in January 2008, with July 2008 as the projected
date for awarding a new contract, with services beginning July 1, 2009. This solicitation and
award timeline has been developed to allow adequate time to implement a new contract and for
consideration of project requirements such as a project-level environmental review under the
California Environmental Quality Act (CEQA). The key milestones and dates are included in
the project timeline (Attachment A).
Adding to the complexity of the procurement timeline and process are the Zero Waste
Operational Plan, the closure of the City landfill, and the City’s contractual commitments with
the Sunnyvale Materials Recovery and Transfer (SMART) Station and the Kirby Canyon
Landfill.
Zero Waste Operational Plan
In September 2007, City Council approved a tiered approach for the continuing review, approval,
and implementation of the Zero Waste Operational Plan. This included evaluating as part of the
upcoming waste hauling RFP process the addition of five programs. The five programs include:
Organics - divert food scraps, compostables, untreated wood and other compostables for all
sectors of the community.
Single-stream materials - expand the type of materials currently being accepted.
Bulky item collection - enhance the existing bulky item reuse and recycling program.
Construction and demolition materials (C&D) diversion - divert all C&D debris boxes to a
local C&D debris processor.
Commercial recycling - provide recycling service to all commercial customers.
Cit~ Landfill
The City’s landfill is estimated to reach fill capacity in 2011.
the State is anticipated in 2013.
.The fmal closure approval from
SMART Station
The City is in partnership with the Cities of Mountain View and Sunnyvale for the operation of
the Surmyvale Materials Recovery and Transfer (SMART) Station. The SMART Station disposes
of waste at the Kirby Canyon landfill. The City Memorandum of Understanding with Sunnyvale
and Mountain View to use the SMART Station will terminate on October 15, 2021.
Kirby Canyon Landfill
Palo Alto’s agreement with Waste Management Inc. to use Kirby Canyon landfill provides for
delivery of specific annual tonnages of solid waste with per-ton put-or-pay payments to be made
to Waste Management for each ton that falls short of the annual tonnage commitment. This
commitment to the Kirby Canyon Landfill will remain in effect until 2021.
At the Council Study Session on October 1, 2007, staff provided an overview of the upcoming
procurement process for the new solid waste hauling and recycling contract; highlighted key
policy issues relating to the new contract, and presented the challenges, options and preliminary
approach to the key RFP components related to services, facilities and the agreement.
CMR:373:07 Page 2 of 7
DIISCUSSIION
This report focuses on three major components of the upcoming RFP for the new solid waste and
recycling service: services, facilities and certain agreement terms. A more comprehensive list of
options organized by major issue, together with their related advantages and disadvantages can
be found in Attachment B.
Staff will incorporate Council direction on these recommendations into the draft RFP, which is
scheduled for Council review on December 17, 2007. At the review on December 17th, staff
will also propose a prioritization/weighting structure to guide the evaluation of responses.
Service Components:
Recommendation #1:In order to allow Council to evaluate cost with the zero waste
operational plan recommendations, structure the RFP to include
baseline services with itemized zero waste services and other service
innovations as proposal options.
The RFP will solicit separate pricing for baseline services, zero waste services, and innovation.
The baseline services represent the current service levels for garbage, recycling, composting and
C&D debris. The zero waste services include the five additional or expanded services for
organics, single stream materials, reuse and recycling bulky item collection, C&D recycling, and
commercial recycling. The innovation section of the service package would allow proposers to
present other services not required in the RFP which they believe could advance the City’s
diversion goals.
The recommendation requires that the cost for individual zero waste services be itemized and
separated from baseline services, which will provide Council with the ability to choose services
according to both cost and diversion impact.
Recommendation #2:To minimize future garbage collection cost, make curbside garbage
collection the standard, with an option for backyard/side yard
collection with additional fee.
Currentl~r, the standard garbage collection for the City of Palo Alto is backyard/side yard,
resulting in PASCO manually collecting the material using two workers on each route.
Residents provide their own 32-gallon garbage can. The standard collection for recycling and
yard trimmings is curbside collection in carts. The City is unique in offering the backyard/side
yard as a standard service for garbage and is one of the last cities in California to offer this high
level of service. In 2005, the City began offering carts for curbside garbage collection. The
optional curbside garbage cart became popular and demand for it continues to increase. It is
estimated that 33 percent of residential customers are currently using a City-provided garbage
cart instead of a can. In addition, there are residents using a can for their garbage and taking it to
the curb for collection. As a result, it is estimated that approximately 45 percent of residents are
currently taking their garbage cart or can to the curb.
Eliminating backyard!side yard collection as the standard would result in cost savings, while still
giving residents the ability to obtain this service at an additional charge. The City will continue
CMR:373:07 Page 3 of 7
to offer a backyard/side yard collection service for those residents that are medically unable to
take their carts to the curb and for those residents who elect to pay for the additional service.
The intent of both this recommendation and recommendation #3 is to create a standardized
location and method for collection services, which would be required to be located at the
curbside on public streets to the greatest extent feasible. That will enable the maximum
utilization of automated or semi-automated collection equipment with a resultant savings in labor
costs and consequential rate minimization.
Recommendation #3:To minimize future collection cost on private streets and alleys,
require that the base service be defmed as collecting all solid waste
items on public street frontages (curbside), and that proposers submit a
separate bid price to service homes on private streets or alleys.
Collection on private streets and alleyways is an issue in most communities. It accounts for less
than 10 percent of Palo Alto customers. There are currently 16 locations where residential
garbage is picked up from the alleyway by a standard collection vehicle instead of backyard!side
yard or curbside service while the recyclables and green waste are picked up at curbside.
PASCO also provides non-.standard collection services to seven private streets or driveways by
sending a smaller vehicle to collect the materials. It is projected that there are an additional six
development sites currently under construction or going through a permit process that may not be
accessible to a standard collection vehicle.
Currently, PASCO can only charge customers rates that are approved by Council through the
rate schedules. The current rate for servicing private streets is typically an additional surcharge
rate of $845.76 armually. These rates are inclusive of costs for driver, equipment, fuel, and
depreciation. The recommendation would provide a more accurate cost for the non-standard
collection services and would create a reasonable rate for customers with the private streets.
This cost could be avoided by having the resident take both refuse and recyclables to the street
frontage (curbside).
Recommendation #4:To minimize labor issues relating to retention of existing PASCO
employees and avoidance of wage disputes, encourage new service
provider to retain qualified, productive existing PASCO employees
and to pay wages at levels equivalent to existing wages.
One of the labor issues for the new agreement will be the retention of existing PASCO
employees who have a long work history in the City. Adding to the complexity is that PASCO is
currently a non-union operation but pays union equivalent wages. To promote worker equity
issues and to ensure that non-unionized organizations will not be given an unintended preference
in the proposal process, staff recommends structuring the RFP to provide a preference for
retention of PASCO workers and payment of union equivalent wages.
CMR:373:07 Page 4 of 7
Key Facility Components:
Recommendation #5: . Require service provider to fred operation yard within the region.
Allow service provider to utilize a portion of the Geng Road site as a
staging area.
It is estimated that the service provider will need between 2.5 and 3 acres of space for its
operations, consisting of facilities for its collection vehicles, equipment repair, a customer
service office, container storage, maintenance operations, and an employee operations yard.
While there are certain economies to co-locating these operations, they also can be located at
different sites and do not all need to be located in Palo Alto. PASCO’s operational yard is
currently located at 2000 Geng Road and it is approximately 1.9 acres. It appears that
approximately one acre of the current site is considered parkland, and may have use restrictions
following termination of the PASCO contract and/or cessation of the landfill. A portion of the
Geng Road site currently utilized by PASCO may be available to rent to a future provider for
discrete operations. Utilizing a portion of the Geng Road site as a staging area would allow for
some operations to be local thus facilitating quicker resolution of customer service issues. Since
available property in the area is limited, identifying a portion of the Geng Road site for
operational use will reduce the complexity for proposers. Providing a local staging area could
reduce expenses for transportation.
Recommendation #6:Utilize the existing City composting operation for yard trimmings as
long as feasible (estimated to be 2011). The expanded organics
program for the commercial sector (including food waste) will be
processed at a regional, facility starting in July 2009 with the new
agreement.
The recommendation reflects a desire to continue to utilize the City’s compost operation to the
fullest. It implements a curbside organics program in 2009 for the colnmercial sector, which is
two years earlier than proposed in the Zero Waste Operational Plan. The commercial sector has
the potential to divert over 12,000 tons per year of expanded organic materials (food waste,
compostable paper & untreated wood).
Recommendation #7:Direct furore service providers to collect and process single stream
materials, rather than allowing proposers to bid other methods.
The recommendation builds on the success of the current single stream recycling service that is
highly accepted and utilized by the community.
Recommendation #8:Require proposer to utilize C&D processors other than the SMART
Station, which at a minimum recover 70% of the materials for reuse
and/or recycling.
Currently, the SMART Station recovers only 25% of materials for reuse and recycling. The
recommendation is consistent with the Zero Waste Operational Plan recommendations and the
City’s C&D ordinance requirements. It also would lead to an estimated increased diversion of
5,000 tons per year.
CMR:373:07 Page 5 of 7
Key Agreement Components:
Recommendation #9." Strive to create one contract for both collection
Reserve option for separate processing contracts.
and processing.
Currently, the City has one contract for existing services minimizing the number of contracts for
the City to administer. The recommendation increases flexibility in how processing facilities
could be utilized.
Recommendation #l O:Continue with existing practice of exclusive agreement for solid waste
and residential recyclables.
The existing contract with PASCO is an exclusive agreement for solid waste and residential
recyclables and non exclusive for commercial recyclables. The recommendation allows the City
the greatest possible level of control over the waste stream. It will allow for increased
accountability since the waste stream can be more closely monitored and reporting will be more
comprehensive. The additional advantages to this recommendation are that the level of
exclusivity may generate more interest and competition during the proposal process, which, with
a cooperative and motivated contractor, these provisions could be more helpful in achieving Zero
Waste goals. The service quality and impact on the community can be more closely regulated to
increase accountability.
Recommendation #l I :Create a 12-year maximum term for the collection and hauling
’agreement such as an 8-year base term with the potential of up to four
1-year extensions, to be granted either singularly or cumulatively
depending on circumstances at the time.
The 12 year maximum term will have an end date of 2021, to coincide with SMART Station and
Kirby Canyon Landfill agreements. This could lead to expanded opportunities for improved
services and reduced costs in the next contractor selection process. The relatively short initial
term may keep the contractor focused on its performance in order to obtain the extension, while
enhancing the City’s ability to reward a successful contractor with an extension or to replace a
poorly performing contractor.
Recommendation #12:Negotiate a fixed price compensation agreement with specific annual
index adjustments and financial incentives for diversion.
The recommendation results in a compensation methodology that is simple, easy to predict and
inexpensive to administer. It holds the contractor accountable for its key representations to the
City. It is also consistent with City Auditor’s recommendation, on the April 2007 Audit of the
Palo Alto Sani’tation Company Contract, to simplify future contract administration.
RESOURCE IMPACT
Resource impacts will be evaluated as part of the RFP process. Staff will return in the summer
of 2008 to Council, for a study session where staff will present RFP results, evaluation and costs
for these new services.
CMR:373:07 Page 6 of 7
POLICY ][NII?LICA~FI~ONS
These recommendations are consistent with existing policies.
ENVI[RONMENTAL REVI[E~¥
This report is not a project for the purposes of the California Environmental Quality Act. The
City will perform an environmental assessment in connection with the final award of the new
contract.
ATTACNN[ENTS
Attachment A: Project Timeline
Attachment B: RFP Component Options
PREPARED BY:Russell Reiserer, Manager of Solid Waste Programs
Paula Borges, Executive Assistant
DEPARTMENT HEAD:~&
GLENN S. ROBERTS
Director of.Public Works
soN
Assistant City Manager
CMR:373:07 Page 7 of 7
IKeK ]I~er~s
Council meeting - approve key elements in the RFP
Release RFP
Evaluation and interviews of proposers
CEQA- project level environmental review
Council study session (RFP results, evaluation, costs)
Negotiate and finalize contract
Council meeting to award contract
New contract begins
December 2007*
January 2008
April - June 2008
January - June 2008
June 2008*
June - July 2008
July 2008*
July 2009
* Opportunities for Council involvement and/or direction
CMR:373:07 Attachment A Page 1 of 1
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