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HomeMy WebLinkAboutStaff Report 349-06City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY 5IANAGER DEPARTMENT: PUBLIC WORKS 8 DATE: SUBJECT: OCTOBER 10, 2006 CMR:349:06 APPROVAL OF SCOPE OF WORK TO OBTAIN CONSULTANT SERVICES TO ADVISE THE CITY DURING THE PROCUREMENT PROCESS FOR A SOLID WASTE AND RECYCLABLE MATERIAL COLLECTION AGREEMENT RECOMMENDATION Staff recommends that Council approve the scope of work to obtain consultant services to assist and advise City staff during the procurement process for a new solid waste and recyclable material collection agreement. BACKGROUND The Polo Alto Sanitation Company (PASCO) has been collecting, transporting and processing solid waste and recyclables generated within the City of Polo Alto since the 1950s. In November 1998, PASCO was formally acquired by USA Waste of California (a Waste Management Company). In August 1999, Council approved a new agreement for PASCO to provide refuse and recycling services within the City of Polo Alto starting on September 1, 1999 for a term of up to ten years. The agreement wi!t continue in effect until June 30, 2009. The City reached a 62 percent diversion rate in 2004. In October 2005, the Council adopted a Zero Waste Resolution and set goals to divert 73 percent of waste by 2011 and to strive for zero waste by eliminating Polo Alto’s material sent to the landfill by the year 2021. The Council also approved the Zero Waste Strategic Plan and directed staff to prepare a waste generation study and a Zero Waste Operational Plan. Staff intends to bring to Council a Zero Waste Operational Plan for its approval in the fall of 2006. The service and program recommendations from the Zero Waste Operational Plan will direct staff on the new services to be included in the solicitation for the new collection contract. The new collection contract will be an interim step in the process to reach the City’ s Zero Waste diversion goals. The Public Works Director has created a team to oversee the procurement process for a new agreement. The team includes staff from the Administrative Services and Public Works Departments with staff from the City Attorney’s Office and the City Auditor as advisors. The team has estimated the solicitation processfor a new contract to begin in June 2007, and June 2008 as the projected date for awarding a new contract (Attachment A: CMR 189:06). Staff is planning to bring the new contract to Council for award one year prior to the 2009 termination date.of the current agreement to allow for a possible transition period between the existing contractor and the future contractor. CMR:349:06 Page 1 of 3 DISCUSSION Staff is seeking consultant services to assist and advise City staff during the procurement process for a new agreement. The complete scope of work for the consultant (Attachment B) includes: 1) The consultant will be required to review and understand the existing agreement with PASCO, including services and programs provided, and challenges that are unique to Palo Alto. 2) The consultant will be required to survey, research, evaluate and develop recommendations on the type of agreement, compensation methodology and term of agreement that is best suited for the City of Palo Alto. This includes exploring the possibility of using completely different contracting models and considering an assortment of provisions that staff has identified in Task 2.B. of the scope of work. These provisions include considering changes to contract expenses, creating efficiency incentives versus penalties in reviewing performance levels for the service collector, and exploring the best term for the agreement. 3) The consultant will be required to conduct public meetings and gather public input on the preparation of the competitive procurement. 4) The consultant will be expected to consider the goals of the Zero Waste Operational Plan requiting changes to existing services. 5) The consultant will develop, with input from City staff, evaluation criteria and ranking for proposals, drafts and final copies of the RFP package, draft agreement and interview questions. 6) The. consultant will make appropriate modifications to the draft agreement to reflect the fmal terms, conditions, service fees, and various contract exhibits resulting from the negotiation process. 7)The consultant will attend Council study sessions to present the results of the evaluation, selection, and negotiations. Staff estimates going to Council for a recommendation on awarding a contract for consulting service by December 2006 and beginning the procurement process for a new contract in June 2007. This process will take approximately 12 months. Staff will continue to keep Council involved and informed of the process. RESOURCE IMPACT Funds in the amount of $225,000 for consultant and legal assistance were included in the FY 2006-07 Refuse Fund adopted budget. POLICY IMPLICATIONS The recommendation does not represent changes to existing City policies. ENVIRONMENTAL IMPACT This recommendation is not a project under the California Environmental Quality Act (CEQA) and an environmental review is not necessary. ATTACHMENTS Attachment A: Attachment B: CMR: 189:06 Timeline for new refuse and recycling collection contract Scope of work for consultant services CMR:349:06 Page 2 of 3 PREPARED BY: DEPARTMENT HEAD: ’GLENN S. ROBERTS Director of Public CITY MANAGER APPROVAL: City Manager CMR:349:06 Page 3 of 3 ATTACHNIENT A City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:APRIL 17, 2006 SUBJECT:TIMELINE FOR NEW REFUSE CONTRACT AND RECYCLING CMR:189:06 COLLECTION ¯ This is an informational report and no Council action is required. BACKGROUND In August 1999, Council approved a new agreement for Palo Alto Sanitation CompanyAVaste Management (PASCO) to provide refuse and recycling services within the City of Palo Alto starting September 1, 1999 for a term of up to ten years. The agreement required City staff to conduct four reviews of the collector’s performance to determine whether the collector complied with the standards for performance set forth in the agreement. Each review evaluated the collector’s performance during the preceding twenty-four months and the target cost range. PASCO performance reviews were conducted iri 2000, 2001, 2003, and 2005. Each review determined that PASCO had met the standards for performance set forth in the agreement. PASCO was within the target cost range in the most recent review. The 2005 review resulted in the agreement automatically continuing in effect until June.30, 2009. DISCUSSION In anticipation of the current refuse and recycling service agreement expiring in 2009, the Public Works Director created a team to oversee the project to solicit proposals for a new agreement. The team includes staff from the Administrative Services and Public Works Departments with staff from the City Attorney’s office and the City Auditor as advisors. The team created a timeline (Attachment A) listing major milestones. June 2008 is the estimated date for awarding a new contract. Staff is planning to bring the new contract to Council for award one year prior to the 2009 termination date of the current agreement to allow for a transition period between the possible change of contractors. Staff anticipates returning to Council in the fall of 2006 to request approval for consultant and legal services to assist City staff in preparing for the solicitation of proposals and provide technical support during the solicitation process and negotiations for the new contract. Staff expects the solicitation process for a new Contract to begin in June 2007. There are three projects occurring simultaneously that will influence the new collection services. These include the Zero Waste project, the Sunnyvale Materials Recovery and Transfer (SMART) Station operator agreement and the City Auditor’s review of the current agreement with PASCO. The timelines for these projects are also included in Attachment A. CMR: 189:06 Page 1 of 3 Zero Waste Project in October 2005, Council adopted a Zero Waste resolution, approved the Zero Waste Strategic Plan and directed staff to prepare a Zero Waste Operational Plan. Staff obtained consultant services to conduct and prepare a waste generation study and a Zero Waste Operational Plan. Staff plans to return to Council in the summer of 2006 with the Zero Waste Operational Plan. The service and program recommendations from the Zero Waste Operational Plan will direct staff on the new services to be included in the solicitation for the new collection contract. SMART Station Operator Project The SMART Station is currently operated by GreenTeam!Zanker of Sunnyvale. This agreement will expire on January 1, 2008. The City of Sunnyvale is in the process of obtaining solicitations for a new agreement. The operating agreement will be between the City of Sunnyvale and the selected contractor for a seven-year period. At the City of Sunnyvale option, the term of the agreement may be extended for one or more periods of three months, up to a maximum of one year. The operational objective of the SMART Station is to maximize the cost-effective diversion of solid waste generated by the residents and businesses of the participating agencies, including the cities of Palo Alto, Sunnyvale and Mountain View. The new SMART Station operation agreement will commence on January 1, 2008 and will influence what happens to the solid waste collected in Palo Alto. The new SMART Station operator and the future selected service provider may be of the same or different company and will have to work together. Auditor’s Review of Current Collection Contract Another project that will affect the new collection agreement and future services is the City Auditor’s review of the current .agreement with PASCO. The City Auditor’s office anticipates completing its review by December 2006. RESOURCE IMPACT Funding in the amount of $225,000 for consultant and legal assistance to formulate and process the solicitation of proposals will be requested in the 2006-07 Refuse Fund proposed budget. This funding is needed to continue the consultant work from the start of negotiations with service providers through the final agreement phase. ENVIRONIV[ENTAL IMPACT This report is not a project under the California Environmental Quality Act (CEQA) and an environmental review is not necessary. ATTACHMENTS Attachment A: Project Timelines PREPARED BY: Executive Assistant CMR:189:06 Page 2 of 3 DEPARTMENT HEAD: CITY MANAGER APPROVAL: GLENN S. ROBERTS Director of Public Works EMIL~dARRISON Assistant City Manager CMR: 189:06 Page 3 of 3 0o E ,’ E ATTACHMENT A 0 z 0 ATTACHMENT B SCOPE OF WORK DRAFT A. Background and General Information 1. Background. The Palo Alto Sanitation Company (PASCO) has been collecting, transporting and processing solid waste and recyclables generated within the City of Palo Alto since the 1950’s. In November 1998, PASCO was formally acquired by USA Waste of California (a Waste Management Company). In August 1999, the City Council (Council) approved a new agreement for PASCO to provide refuse and recycling services within the City of Palo Alto starting September 1, 1999 for a term of up to ten years. The agreement required City staff to conduct four reviews of the collector’s performance to determine whether the collector complied with the standards for performance during the preceding twenty-four months and the target cost range. PASCO performance reviews were conducted in 2000, 2001, 2003, and 2005. Each review determined that PASCO had ¯ met the standards for performance set forth in the agreement. PASCO was within the target cost range in the most recent review. The 2005 review resulted in the agreement automatically continuing in effect until June 30, 2009 (CMR: 189:06). The PASCO compensation is based on an operating ratio methodology. The operating ratio is 88 percent of the forecasted annual cost. The target or range is two percent above or below the operating ratio (between 86 and 90 percent). 2. General Information The City of Palo Alto (City) owns and operates a municipal solid waste landfill that includes a temporary composting and recycling drop-off center. The landfill’s final closure is scheduled to occur in 2011. The City has a Household Hazardous Waste (HHW) Program that collects HHW from both the drop-off Recycling Center and monthly HHW collection events. The City is in partnership with the cities of Mountain View and Sunnyvale for the operation of the Sunnyvale 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 (if the parties cannot agree on an extension). The City is obligated to deliver a set amount of waste annually to the SMART station and the Kirby Canyon Landfill or pay a fee per ton for each ton short of the City’s commitment. Palo Alto’s agreement with Waste Management Inc. to use Kirby Canyon Landfill will terminate on October 7, 2021. At the time, the City will have the option to extend the term for an additional 10 years. The City reached a 62 percent diversion rate in 2004. disposal and diversion tons for 2004 are as follows: Diversion Disposal Generation Diversion rate =114,158 tons =70,226 tons =184,384 tons =62% The City’s refusegeneration, In October 2005, the Council adopted a Zero Waste Resolution and set goals to divert 73% of waste by 2011 and to strive for zero waste by eliminating Palo Alto’s material sent to the landfill by the year 2021. The Council also approved the Zero Waste Strategic Plan and directed staff to prepare a waste generation study and a Zero Waste Operational Plan. Staff intends to bring to the Council a Zero Waste Operational Plan for their direction to adopt/approve the plan, in the Fall of 2006. The Zero Waste Operational Plan has been organized as follows: Section 1 Introduction. This section provides overview and lists the findings of the 2005 Waste Composition Study. Section 2 Existing Programs and Facilities. This section describes the City’s existing programs, facilities and material flows. Section 3 Programs. This section describes the programs options to reach 73% diversion and zero waste. Section 4 Facilities. This section describes the facility options to reach 73% diversion and zero waste. Section 5 Policies. This section describes the policies and incentives to reach beyond maximum recycling to eliminate waste. Section 6 Zero Waste System scenarios. This section describes the two major zero waste scenarios, the diversion rates anticipated to be achieved by these scenarios and the estimated costs for implementing these scenarios. Section 7 Recommendations and Action Plan. This section provides the recommended zero waste system scenario and includes zero waste action plan with staffmg levels, action steps, and an implementation schedule. The service and program recommendations from the Zero Waste Operational Plan will direct staff on the new services to be included in the solicitation for the new collection contract. The new collection contract will be an interim step in the process to reach the City’s Zero Waste diversion goals. 2 This Request for Proposals is seeking a qualified and experienced ftrm to assist and advise the City during the procurement process for a Solid waste and Recyclable Material Collection Agreement. B. Scope of Work In general, the work of this project consists of the following tasks: Task 1.Consultant shall attend a kick-offmeeting with City staff to confirm project objectives, review and fmalize the schedule, discuss City plans for involvement of the Council and the public, and review the policy and services issues to be considered for the procurement. In preparation for the meeting, Consultant shall first read and understand all the following information, data and reports including, but not limited to: -Palo Alto agreement with PASCO/Waste Management Inc. of California for Solid Waste and Recyclable Materials Handling Services. -Palo Alto MOU with Sunnyvale and Mountain View to use the SMART Station. Palo Alto agreement with Waste Management Inc. to use the Kirby Canyon Landfill. Sunnyvale agreement with Green Team/Zanker for the operations of the SMART Station. Zero Waste Policy and Strategic Plan, Gary Liss and Associates. September 2005 Palo Alto Solid Waste, Recycling Material and Household Hazardous tonnage for 2005 and 2006. -Palo Alto Waste Composition Study, Cascadia Consulting Group. 2006. -Palo Alto Zero Waste Operational Plan, BVA Inc., July 2006. -Palo Alto Auditor review report of PASCO current refuse collection contract (scheduled to be issued December 2006) Timeline for New Refuse and Recycling Collection Contract -. Description of current services provided by PASCO Task 2. A.Consultant shall survey, research, evaluate, and develop recommendations on structuring the waste management and recycling contracted services in Palo Alto, the ideal compensation methodology and term of agreements to be used in the new agreement. Consultant shall explore the possibility of using completely different contracting models or even franchising. Consultant shall research the contracts of a minimum of five cities and methods for incorporating zero waste. Consultant shall include a minimum of seven of the most popular compensation methodology and term used in the Califomia Region. 3 Task 2. B. The evaluations shall report the advantages and disadvantages of each. The recommendations shall state in detail the recommended type of contract, compensation methodology and term, and why it would be suitable for the City of Palo Alto. City staff shall determine which methodology and term to be used in the newly drafted agreement. Consultant shall research, evaluate and develop recommendations on the following listed provisions for consideration in the new agreement. Consultant shall prepare a written report detailing findings, recommendations, and a cost range when appropriate. Specific provisions for consideration shall include, but not be limited to the following: Specific provisions to be considered in creating the new agreement: 1. Possible changes to its "Allowable", "Non- Allowable" and "Pass- Through" Expenses. 2. Other price increases provisions. 3. Treatment of assets at termination of contract. 4. City ability to add future programs and keep the cost down. 5. Provisions during emergencies. 6. Transition to next contractor at end of agreement. 7. City free to negotiate with third parties. 8. Dedicated vehicles to service the community. 9. Standard for required spares for collection vehicles. 10. Purchase, replacement and maintenance of containers for recycling, yard trimmings and garbage collection. 11. Create restrictions/specifications for usage of route supervisor vehicles. 12. Specific signage requirements for collection vehicles. 13. Credit standing requirements. 14. City to have access to routing maps, books and customer account records. 15. Hazardous and special waste handling and collection. 16. Arbitration vs. litigation. 17. Merger and assignment. 18. Contract splitting: refuse, compost, recycling, C&D processing. 19. Lid tipping inspection and educational program. 20. Efficiency incentives vs. penalties in creating performance levels. 21. Security enhancement clauses. 22. Equipment delivery requirements 23. Recycling verification requirements. 24. Performance monitoring, review and audit. 25. Progressive air emission and noise standards. 26. Upgrading defaults and remedies clauses. 27. Requiring complaints handling procedures. 28. Continuing or improving customer satisfaction survey. 4 29.Creating minimum standards for the number of employees and equipment. 30.Improving and upgrading record keeping and reporting responsibilities. 31. Basic compensation 32. Customer education/PR requirements 33. Responsibility for billing 34. Ownership of customer account records 35. Location of facilities (City land or private) 36. Customer performance standards 37. Term of agreement Task 3.Consultant shall arrange, publicize and conduct at least two public meetings, including the Zero Waste Task Force Committee, in the City of Palo Alto for the purpose of gathering public input on the preparation of competitive procurement documents. Consultant shall take notes, record attendees, create a summary and submit written report to the project manager within one week after the meeting. Report to summarize input, recommendations from suggestions and cost range on any additional services to be considered. Task 4.Consultant shall add additional service programs as directed by the project manager. Consultant shall consider the challenges to the City presented by the landfill, closure in 2011, feedback that may be received at community meetings, and the goals of the Zero Waste Operational Plan. The draft Zero Waste Operational plan requires changes to the existing services that include: 1) Diverting food scraps, compostables, untreated wood and other compostables for all sectors of the community; 2) Expand the type of materials currently being accepted. Consider textiles, milk and juice containers, plastic bags, expanded polystyrene packaging, expanded polystyrene containers, hard cover books and electronic waste; 3) Implement a bulky item reuse and recycling program; 4) Implement a mandatory participation, which requires customers to place recyclables and compostable materials in. the appropriate collection containers; 5) Divert all debris boxes rich in C&D debris materials to a local C&D debris processor. 6) Provide recycling service to all commercial customers. Task 5.Consultant, with input from City staff, to develop evaluation criteria for proposals and to create an evaluation team to review and provide input on the RFP package and draft agreement. Task 6. Consultant shall conduct a Council study session to present and discuss the Contractor selection criteria and ranking; the evaluation process including 5 identifying the members of the evaluation team, and the key issues required to complete the RFP package and draft agreement. Task 7.Based on the results of the Council session, Consultant shall develop a draft RFP. Consultant shall reproduce and submit reports in electronic format (Microsoft documents and spreadsheet file formats) unless noted, for review and approval as follows: 60% completion submittal 90% completion submittal Task 8’. The draft RFP shall address at a minimum the following: background/general information, scope of services, transition plan, contractual arrangements, proposal requirements, selection process and criteria, and submittal instructions. The RFP shall be designed to ensure the receipt of competitive proposals. The RFP shall include tailored cost forms to ensure that proposals can be compared on an "apples-to-apples" basis. Consultant shall draft an agreement to be included as an appendix to the RFP. The City will provide its own legal review of the draft agreement to assure consistency with the City’s requirements regarding indemnity, insurance, bonding, dispute resolution procedures, and other matters. Task 9. Based on City comments on the draft RFP and draft agreement, Consultant shall prepare the final RFP and final draft agreement to be mailed to potential bidders. Task 10. Consultant shall develop a list of potential bidders that may by qualified to submit a proposal. Task 11. Following the release of the RFP, Consultant shall facilitate the pre-proposal meeting and assist City staff in responding to questions raised by potential bidders. Consultant shall prepare all necessary addenda required to clarify any issues raised by potential bidders. Task 12.Working with the evaluation team and using the evaluation criteria, Consultant shall review and rank the proposals. Consultant shall communicate with the bidders, as needed for clarification and conduct reference checks. Consultant shall prepare evaluation materials and analyze the cost proposals. Consultant shall meet with the evaluation team to compare evaluation notes and discuss scoring. Consultant shall prepare a ranking of the qualified proposals based on combined scores for each of the criteria. Task 13. Consultant, with input from City staff, shall develop the interview questions for bidders and shall facilitate interviews conducted with the evaluation team members. 6 Task 14. Task 15. Based on the interview results, and any clarifications with bidders, Consultant shall make any necessary changes in their scores and ranking and shall prepare a written summary documenting the evaluation process and recommendations. Consultant shall attend a Council study session to present the results of the evaluation, selection, and answer Council questions. Task 16. Based on the outcome of the Council session, Consultant shall assist and provide technical support to City staff during negotiations. Task 17. Task 18. Consultant shall make appropriate modifications to the draft agreement to reflect the final terms, conditions, service fees, and various contract exhibits resulting from the negotiation process. Consultant shall attend a Council session to present the results of the negotiations and to assist City staff in recommending to the Council an award of contract to the successful bidder. Task 19. Consultant shall develop a detailed procurement schedule. Task 20. Consultant shall attend at minimum twenty (20) meetings as follows: Task 1.One meeting Task 2.Three meetings Task 3.Two meetings Task 4.One meeting Task 5.One meeting Task 6.Council study session Task 7.One meeting Task 8.One meeting Task 9.One meeting Task 11.Pre-proposal meeting Task 12.One meeting Task 13. Proposer interviews Task 14. One meeting Task 15. Council presentation Task 16. One meeting Task 17. One meeting Task 18. Council selection C.Additional Services Subject to Additional Compensation Task 21 (Optional). Consultant shall prepare a written report that reviews the impact of Proposition 218 and the recent California Supreme Court decision, Bighorn- Desert View Water Agency v. Verjil on the provision of refuse services. The 7 report shall discuss the effect, if any, of the applicable statutory and case law on the City’s provision of refuse services today, and it shall provide recommendations and options, if any, on the manner in which the City (and/or the service provider) could provide refuse services in the future. Task 22 (Optional). Consultant shall prepare and conduct a Request For Qualifications (RFQ) to pre-qualify service bidders. D.Project Administration. Paula Borges (Public Works, Operations) will be the Project Manager unless directed otherwise by the City. All questions, correspondence and invoice shall be directed to the Project Manager. To ensure a coordinated work effort, any work beyond this Scope of Work shall be approved in advance in writing by the Project Manager. E.Information provided by the City. The City of Palo Alto will provide all relevant and readily available reports, data, and information as requested by the successful bidder. F.Consultant Selection. Consultant will be selected based upon qualifications, experience, work, schedule and references from similar projects. For fitrther selection criteria, see RFP Section 7, Review and Selection Process. G.Time of Completion Work of this Project shall be completed within 540 calendar days of the notice to proceed. Consultant shall submit a detailed schedule for the completed project. END OF SECTION Revised 8/31/06 8