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HomeMy WebLinkAbout2003-11-17 City Council (2)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE:NOVEMBER 17, 2003 CMR:514:03 SUBJECT:PERFORMANCE REVIEW OF PALO ALTO SANITATION COMPANY 0~ASCO/WASTE MANAGEMENT) This is an informational report and no Council action is required. BACKGROUND In August 1999, Council approved a new agreement for Palo Alto Sanitation Company (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. As described in the agreement, City staff conducts reviews of the collector’s performance to ensure that PASCO maintains high levels of service to residents and businesses in Palo Alto. If the City reasonably determines that PASCO has not complied with the standards for performance set forth in the agreement, or that the cost of service is not within the target cost range, the City has the right to give written notice, in which case the Agreement can terminate on June 30, 2005. The last PASCO performance review was in October 2001 (CMR:364:01). DISCUSSION This performance review confirms that during the preceding twenty-four months PASCO has complied with the standards for performance set forth in the agreement and continues to provide a high level of service to the Palo Alto community. The performance review of PASCO includes an evaluation of the performance adjustments made for noncompliance with performance standards, a summary of the performance audit conducted by staff, and results of the recent customer service satisfaction surveys. Staff has also included an update on the PASCO compensation. Performance Adjustments The agreement with PASCO allows the City to assess performance adjustments on a monthly basis if PASCO fails to comply with the standards specified in the agreement. The City’s imposition of $25,000 in performance adjustments within any fiscal year is conclusive evidence of PASCO’s failure to comply with the standards for performance, and allows the City to terminate the agreement. The performance adjustment categories are collection reliability, collection quality, customer responsiveness, reporting, and a general miscellaneous category for failure to perform any other obligation set forth in the agreement. The CMR:514:03 Page 1 of 5 performance adjustments range in dollar amount, depending on the type and seriousness of noncompliance. The average performance adjustment is $300. In the first twelve months of this performance review period (fiscal year July 1, 2001 through June30, 2002), staff assessed PASCO eight performance adjustments totaling $1,510. These adjustments were for noncompliance in collection reliability, collection quality and customer responsiveness. The specific adjustments were issued for failure to maintain the collection schedule on the scheduled day (two incidents); for damage to private vehicles in excess of $1,500 (two incidents); and for failure to collect missed collections (two incidents). During the most recent twelve months of this performance review period (fiscal year ending June 30, 2003), City staff assessed nine performance adjustments totaling $900. Six incidents were for noncompliance in the performance adjustment category of collection quality, which allows for a minimum number of incidents to occur before a dollar amount is assessed. The three incidents of noncompliance that resulted in the $900 in performance adjustments were also for noncompliance with standards in collection quality. The specific adjustments were for damage to private property, in non-injury accidents, in excess of $200 (see attachment A). Performance adjustments in the preceding twenty-four months remain below the $25,000 limit allowed in the agreement per fiscal year. Performance Audit The agreement allows City staff to conduct performance audits of PASCO collections to evaluate the efficiency of the operation. Staff conducted a two-day performance audit of PASCO operations in January 2002. The performance audit included inspections of PASCO facilities, review of records, physical route reviews, and verification of the required standards established in the agreement. The audit enabled City staff to evaluate the PASCO operation with regards to equipment, use of personnel, customer service, administrative procedures and any other matters necessary to ensure the efficient implementation of the provisions of the solid waste and recyclable materials handling described in the agreement. PASCO was found to be in compliance with all one hundred and seventy-four standards established in the agreement for collection of solid waste and recycling materials. In particular, the audit verified that PASCO met performance requirements in the following areas: ¯Proper handling of hazardous materials; ¯Sanitation and collection requirements for solid waste and recyclable materials; ¯Compliance with noise levels established in the Palo Alto Municipal Code; CMR:514:03 Page 2 of 5 ¯Established procedures for handling collection impediments, setting routes, record keeping, and equipment maintenance; ¯Personnel qualifications and training; ¯Customer service and procedures for handling complaints and compliments; and ¯Administering the operations of the Recycling Center, and solid waste and recycling collection services for residential premises, multiple family dwellings, commercial/industrial premises, public receptacles, and special events. During the performance audit, only one item was categorized as an area of concern. This was due to PASCO purchasing a collection vehicle without the City’s prior approval as required by the contract. As a result, the City did not pay for the depreciation or interest on the new truck until the purchase was approved. Customer Service Satisfaction Survey The City’s agreement with PASCO requires that a customer service satisfaction survey be conducted if the collector has incurred less than $25,000 in performance adjustments within any single fiscal year since the previous review. The objective of the survey is to gauge the general satisfaction level of the community with the service provided by PASCO. The survey was developed in conjunction with PASCO, and asked residents to evaluate PASCO’s overall performance by rating its service as excellent, satisfactory or unsatisfactory. The same survey format was previously sent to residents in 2000 and 2001. This year, approximately 18,994 surveys were sent to residents in May as an insert in the Palo Alto Weekly. City staff received 1,761 completed surveys, for a response rate of nine percent. Eighty-seven percent of the returned surveys rated PASCO service as excellent. Twelve percent rated PASCO service as satisfactory, and less than one percent (15 of the surveys received) rated PASCO’s service as unsatisfactory (see attachment B). Ninety-nine percent of the returned surveys rated PASCO service as excellent or satisfactory. This confirms that PASCO continues to provide a high level of customer service to the Palo Alto community. Sidewalk Clearance PASCO continues to work with City staff to address the recent complaints regarding sidewalks being blocked by empty recycling and yard trimming containers. Policies related to the appropriate placement of empty containers have been changed to insure that a 36-inch clearance is kept, as required by the American Disabilities Act (ADA). Staff also prepared an announcement for the CMR:514:03 Page 3 of 5 August utility bill regarding the placement of containers and maintaining sidewalks clear. PASCO returns approximately 13,125 containers to the curb each day, five days a week, as required by the contract. Staff’s investigations of complaints over the last eight months reveals the majority of the complaints being about only four containers out of compliance and within five inches of complying with the ADA requirement. Staff and PASCO are committed to resolve the ADA complaints and will continue to investigate reported violations. PASCO supervisors are inspecting routes for violations, providing additional route driver training and taking disciplinary actions with drivers not complying. o PASCO Compensation The PASCO agreement establishes a compensation method based on the "operating ratio" between costs and profits. As established in the agreement, the operating ratio for PASCO is 88 percent of the forecasted annual cost and the target range should be two percent above or below the operating ratio (between 86 and 90 percent). Based on the PASCO audited financial statements, the operating ratio for the year ending June 30, 2002 was 89.4 percent, which placed PASCO within the targeted cost range. The operating ratio for fiscal year July 1, 2002 through June 30, 2003 is estimated at 81.7 percent. This places PASCO outside the targeted operating ratio range, and it means that PASCO’s actual expenses were lower than projected, causing a larger than targeted Operating Margin for PASCO in fiscal year 2002- 2003. Staff will be negotiating with PASCO and seeking to reduce future expenses or having PASCO provide additional new services during the next budget cycle. The forecasted annual cost for fiscal year 2003-2004 remains at 88 percent with expenses at $9,847,107 (see attachment C). This includes costs for new programs requested by the City, including a continuation of the single stream recycling pilot and a pilot on recycling construction and demolition materials. ATTACHMENTS Attachment A:Summary of Performance Adjustments Attachment B:Evaluation of PASCO Customer Service Satisfaction Surveys Attachment C:PASCO Compensation CMR:514:03 Page 4 of 5 PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: BORGES GLENN S. ROBERTS Director of Public Works Assistant City Manager CMR:514:03 Page 5 of 5 Attachment A Complaints Failure to notify City of reportable quantities of Hazardous Waste Failure to maintain the collection schedule on the scheduled day Failure to start new customer service within 7 calendar days Unreasonable leaking/spilling of materials and failure to clean up immediately Failure to replace cans in odginal position Failure of not closing gate, crossing plantec areas, or other damage to private property IDamage to private vehicles, in non-injury accidents, in excess of $1,500 damage Damage to other private property, in non- !injury accidents, in excess of $200 IPersonal injury to the public Eady start Excessive noise Failure to tag containers not emptied I Failure to clean public solid waste lids IFailure to power wash public solid waste and recycling receptacles, lids and metal liners twice per year Discourteous behavior Failure to remedy a complaint within 8 hours alter notification justified by Director Failure to answer the telephone or answering machine during work hours Failure to respond to service request~within 24 working hours Failure to collect missed collections Monthly Reports Quartedy Reports Semi-Annual Reports Annual Reports Failure to perform any other obligations in Contract or correct them within 24 hours Total Performance Adjustments Penalty Allowed Infractions $5OO $5/can $150 $300 $!50 $5O0 $300 $300 $5,000 $30O $300 $150 $150/can $150/can $5OO $3O0 $300 $300 $300 $100/day $200/day $300/day $300/day o o 5 5 12 24 0 0 5 12 12 5 0 0 0 0 0 Fiscal Year 2001-2002 $150 2 1 Fiscal Year 2002-2003 1 1 Total Chargeable Adjustments Total Cost 8 3 $!,510 $900 Last Revised 10/09/2003 h:/PASCO/Performance Adjusments Summary.xls Attachment B Evaluation of Customer Service Satisfaction Surveys (June 2003) The City’s agreement with the Palo Alto Sanitation Company (PASCO) requires that a customer service satisfaction survey be conducted periodically to measure the general satisfaction level of the community with the quality of service provided by PASCO. The survey was developed in conjunction with PASCO and was conducted in May 2003. This was the third PASCO survey sent to the community. The first survey was conducted in 2000, and the second survey was conducted in 2001. The s ,urvey stated that it was a requirement by the City’s agreement and that the responses would be used to determine whether PASCO would continue to provide service to the community. The survey asked residents to rate PASCO’s overall performance. Residents were asked to rate PASCO service as excellent, satisfactory or as unsatisfactory. They also had the option to provide additional comments about the service if necessary. Approximately 18,994 surveys were sent to residents through the Palo Alto Weekly newspaper. Survey highlights: ¯City received 1,761 completed surveys, for a 9% return rate. ¯87% of responses rated PASCO as providing excellent service. ¯11.8 % rated PASCO service as satisfactory. ¯0.9% of the respondents rated PASCO service as unsatisfactory. ¯Out of the 1,034 (59%) of respondents that wrote additional comments on the survey, 65% of these were positive comments regarding PASCO service and staff. Rating of Responses Excellent & Satisfactory Eighty seven percent or 1,535 of the returned surveys rated the PASCO service as excellent. This is an increased rating of 2% from the 2001 survey and consistent with the 87.4% reported in the 2000 survey. Approximately twelve percent or 208 of the returned survey responses rated the PASCO service as satisfactory. This is similar to the satisfactory rating (11.2%) given in the 2001 survey and it is approximately a two percent increase from the satisfactory rating given PASCO in the 2000 survey. A large number of respondents provided positive comments about the PASCO service and staff being reliable, friendly, courteoug and efficient. In these categories, the top three suggestions for improvements in the PASCO service were: 1) picking up trash on the ground or left inside cans after collection 2) not blocking sidewalks/driveways with the empty containers, and 3) placing the empty containers in the locations where they were found. Unsatisfactory In this year’s survey responses less than one percent (.9 percent) or 15 of the survey responses, rated the PASCO service as unsatisfactory. This rating is slightly better than the 2001 survey where 1.2 percent of respondents rated PASCO as unsatisfactory. The top three suggestions for improvements in the service were: 1) picking up the littler on the ground left after collection (7 surveys), 2) returning containers to the appropriate locations after collection (4 surveys), and 3) returning lids to containers (4 surveys). Attachment B Type of Respondent The survey had a 9 percent return rate with 88.9% of respondents living in single family dwellings, 6.2 percent living in multi-family complexes and 0.4 percent of the responses were from businesses. 4.5 percent of the respondents did not check whether they were living in a single family, multi- family or commercial dwellings. All surveys and comments from respondents were considered and evaluated. Addressing the Few Complaints about PASCO PASCO management reviewed the complaints with their respective departments and identified corresponding routes to see if there was a pattern of behavior with any particular driver or route. In the instances where there were multiple complaints generated from the same route, PASCO management addressed them specifically with the driver in question. PASC0 is also emphasizing the survey respondent’s negative concerns during staff meetings and reinforcing the proper procedures for such things as cart placement, collection, driving, and returning lids to the containers. Overall, PASCO management is pleased for the recognition given for their service and their employees. Summary With ninety-nine percent of the returned surveys rating PASCO service as excellent or satisfactory, it verifies that PASCO continues to provide the high quality of customer service that the Palo Alto community is accustomed to receiving. 0~00 000~1 000 0 0 0 0 0 0 0 0 0 0d d d dd d d d d d (-- | .n O0000000 O00 Attachment C 2003-04 Proposed Budget using the Operating Ration (OR) Formula: Expenses subject to OR New Services Total Expenses Operating Margin Pass-through expenses 8,201,713 377,650 8,579,363 1,169,913 97,831 9,847,1 O7 PASCO Direct Revenues: Less: Recycling Revenues Less: Other Revenues Less: Fees to the City for revenue sharing Total 1,042,197 1,218,079 (769,601) 1,490,675 Payments to PASCO Total Compensation based on OR - Full year 8,356,432 9,847,107