Loading...
HomeMy WebLinkAbout2001-10-09 City CouncilTO: FROM: City of Palo Alto City Manager’s Report HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS 6 DATE: SUBJECT: OCTOBER 9, 2001 CMR:364:01 SECOND YEAR PERFORMANCE REVIEW OF PALO ALTO SANITATION COMPANY (PASCO)/WASTE MANAGEMENT BACKGROUND In August 1999, 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. As described in the new agreement, City staff was to conduct a review 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 substantially complied with the standards for performance set forth in the agreement, the City has the right to give written notice, in which case the Agreement can terminate on June 30, 2003. DISCUSSION This performance review verifies that PASCO has complied with the standards for performance set forth in the new agreement and continues to provide the high quality of service that the Palo Alto community has enjoyed for many years. The performance review of PASCO includes an evaluation of the penalties assessed for performance, results of the recent customer service satisfaction survey, PASCO compensation and cost of service comparison with surrounding communities. Performance Adjustments The current agreement with PASCO allows the City the ability to assess performance adjustments on a monthly basis if PASCO’s performance is not within standards specified in the agreement. The agreement states that the imposition of $25,000 in performance adjustments within any fiscal year shall be conclusive evidence of failure to substantially comply with the standards for performance, then allowing 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 performance CMR:364:01 Page 1 of 4 o adjustments vary in financial penalty depending on the infraction. The average penalty for a performance adjustment is $300. in the first ten months of the agreement (September 1999 through June 30, 2000), City staff assessed a total of 26 performance adjustments, with only 14 infraction- charged penalties, totaling $3,750. These adjustments were for infractions in collection quality and customer responsiveness (see Attachment B). The two most common adjustments were for failure to replace cans to their original positions (five infractions) and for failure to collect missed collections (eight infractions). During the second fiscal year of the new agreement (July 1, 2000 through June 30, 2001), City staff assessed a total of 27 performance adjustments, with 27 infraction- charged penalties, totaling. $8,000. These adjustments were for infractions in collection quality, customer responsiveness and reporting (see Attachment A). The largest infraction was for submitting the annual report (eighteen days) late for $5,400. Other infractions included damage to private vehicles (two infractions), damage to private property (two infractions), failure to remedy a complaint within 8 hours (one infraction), and failure to collect missed collections (two infractions). Performance adjustments were on the rise but remain below set limits ($25,000 per fiscal year). Customer Service Satisfaction Survey The City’s agreement with PASCO requires that a customer service satisfaction survey be conducted 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 asked residents to rate PASCO’s overall performance in the past 24 months of the new agreement. The survey asked residents to rate PASCO’s service as excellent, satisfactory or unsatisfactory (see Attachment C). Approximately 15,000 surveys were sent to residents in August 2001 as an insert in the Palo Alto Weekly. City staff received 2,398 completed surveys for a response rate of 16 percent. Eighty-five percent of the returned surveys rated PASCO service as excellent, eleven percent rated PASCO as providing satisfactory service, one percent rated PASCO’s service as unsatisfactory, two percent did not check any of the available categories and one percent checked more than one category and were undecided between classifying the service. The results of the customer service satisfaction survey show that Palo Alto residents are generally satisfied with the level of service provided by PASCO and that PASCO continues to provide superior customer service. CMR:364:01 Page 2 of 4 PASCO Compensation The PASCO agreement contains a compensation method of compensating based on the "operating ratio." The operating ratio method establishes compensation based on the relationship between costs and profits. The operating ratio agreed to by the City and PASCO is 88 percent of forecasted annual cost. The method of compensation establishes the "target operating ratio range" to be two percent above or below the operating ratio (between 86 - 90 percent). Based on the PASCO audited financial statements, the operating ratio for the year ended June 30, 2000 was 91.7 percent. This means that PASCO actual expenses, exceeded the target operating ratio range by $149,274, causing a loss of profit (to the prqiection) for PASCO in fiscal year 2000 - 2001. The forecasted annual cost used for fiscal year 2001-2002 remains at 88 percent with expenses at $9,353,548 (see attachment D). There were no additional costs added for new programs requested by the City. PASCO’s actual operating expenses are running higher than projected but continue to be funded without special adjustments to the base budget set by the agreement. o Rate Comparison Brown, Vence & Associates "2001 Cost of Service Study" analyzed rate schedules for seven comparable Bay Area cities: Cupertino, Milpitas, Mountain View, Redwood City, Santa Clara, Sunnyvale and Union City. The cities were selected based on similarities to Palo Alto including factors such as proximity, a range of large and small private sector service providers, the level of service for refuse and recycling programs, a relatively sizable commercial base, and population. Selected service rates were used and adjusted to reflect the cost of service similar to that provided to the City by PASCO. The study findings report that the City of Palo Alto ranks the lowest of the eight cities for one can service, and the second lowest for two can service. For commercial service the City ranks the second highest for two and three cubic yard service, once a week (see Attachment E). The study also reports that residential service is provided at a deficit and commercial service is provided at a surplus. These conclusions remain consistent with the 1996 rate comparison study in which the City’s residential rates were the second lowest and the commercial rates the third highest, respectively, of the seven comparison cities. ATTACHMENTS Attachment A:FY 2001 Summary of PASCO Performance Adjustments Attachment B:FY 2000 Summary of PASCO Performance Adjustments Attachment C:Evaluation of Customer Service Satisfaction Surveys CMR:364:01 Page 3 of 4 Attachment D: PASCO Compensation Attachment E: Rate Surveys PREPARED BY:Michael Jackson, Deputy Director, Public Works Russell Reiserer, Solid Waste Manager, Public Works DEPARTMENT HEAD:,,~ ) - ~ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: ~. ~~~) "t-EMILY HARRISON Assistant City Manager CMR:364:01 Page 4 of 4 ATTACHMENT A ATTACHMENT B o ATTACHMENT C Evaluation of Ct~omer Service Satisfaction Surveys (August 2001) The City’s Agreement with the Palo Alto Sanitation Company (PASCO) reqtfires that a customer service satisfaction survey be conducted to measure the general satisfaction level of the community with the quality of (collection) service provided by PASCO. The survey was developed in conjunction with PASCO and was conducted in August 2001. The survey 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 in the previous twenty-four months. 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 15,000 surveys were sent to residents through the Palo Alto Weekly newspaper. By publishing it through the local newspaper, every resident in a single family home received the newsletter and was provided the opportunity to respond to the survey. Survey rlighlights: ¯City received 2,398 completed surveys, for a 16% return rate. ¯84.94% of respondents rated the PASCO service as excellent. ¯11.22% of respondents rated the PASCO service as satisfactory. ¯1.20% rated the service as unsatisfactory. ¯1.74% did not check any of the available categories. ¯.90% checked more than one category and were undecided between classifying the service as excellent/satisfactory/unsatisfactory. Rating of Responses Excellent 84.94 percent or 2,037 of the returned surveys rated the PASCO service as excellent. An overwhelming number of respondents highly complimented the PASCO drivers and referred to them as friendly, courteous, fast and efficient workers. Other positive comments ranged from specific remarks about being happy with the service to classifying the PASCO service as dependable and cooperative. The top three suggestions for improvement where: 1) Re~. cle additional plastics (60 surveys), 2) Reducing noise (26 surveys) and 3) Increasing education (24 surveys). Fifty one percent (1,042 surveys) did not include any additional comments. Satisfactory 11.22 percent or 269 of the survey responses rated the PASCO service as satisfactory. Forty-four percent of the surveys rating the PASCO service as satisfactory did not include any additional comments. Of the satisfactory responses received, 56 percent included comments. Positive comments included being nice, fast, hard working and on time. The top three suggestions for improvement xvhere: 1) Returning containers to appropriate locations (20 surveys), 2) Trying to be more flexible with the rules (12 surveys) and 3) Littering (11 surveys). Unsatisfactory 1.20 percent or 28 of the survey responses rated the PASCO service as unsatisfactory. All of the surveys rating PASCO service as unsatisfactory included additional comments. The top three suggestions for improvements where: 1) Returning containers to appropriate locations (6 surveys), 2) Trying to be more flexible with the rules (5 surveys) and 3) Littering (3 surveys)/Damage to containers (3 surveys). Others/Miscellaneous 2.64 percent or 64 of the survey responses did not rate the service per the instructions. 1.74 percent did not check any of the available categories..90 percent checked more than one category and were undecided between classifying the service as excellent/satisfactory or satisfactory/unsatisfactory. The top three suggestions for improvements were: 1) Returning containers to appropriate locations (7 surveys), 2) Reducing noise (3 surveys) and 3) Littering (3 surveys). Type of Respondent The survey had a 16 percent return rate with 93.3 percent of respondents living in single family dwellings, 6.6 percent living in multi-family complexes and. 1 percent of the responses were from businesses. All survey and comments from respondents were considered and evaluated. Prevalent Comments Regardless of the raling given PASCO, 1208 or 50 percent of residents wrote additional comments on the survey. The majority of the comments were positive complementing PASCO and their drivers on their efficiencies, hard work, and the friendly, helpful service they provide. The three most common negative comments about PASCO services were: 1) The need to recycle additional plastics, 2) Not returning containers to appropriate locations and 3) The need to reduce noise in the mornings. Addressing the Few Complaints about PASCO City. staffwill meet with PASCO management to discuss the survey responses. City staff, along with PASCO xvill respond to questions raised and try to take corrective action to improve the concerns of respondents. Summary. With ninety-six 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 use to receiving. 0X Customer Service Satisfaction Surveys Comparison of survey responses between 2000 & 2001 Survey Responses 1 = 0.8 -- 0.6 -- ¯ " 0.4 -- 0.2 -- ....... ILl -~.--Zo O2OOO I2001 84.9 percent of the surveys received in 2001 rated the PASCO service as excellent compared to 87.4 percent in 2000. Eleven percent rated the service as satisfactory in 2001, an increase of one percent from last year. This year’s surveys also showed a slight increase in unsatisfactory responses with one percent of residents rating the service as unsatisfactory compared to the less than one percent last year. Type of Respondents 1 0.9 -- 0.8 -- 0.7 -- 0.6 -- 0.5 -- 0.4 -- 0.3 -- 0.2 -- 0.1 -- 0 The number of responses from single family residents decreased approximately three percent from last year. Responses from multifamily residents increased one percent this year and responses from businesses remained the same. Unsatisfactory Responses 25% 20% ~0% 5% 0% ATTACHMENT D PASCO 2001-02 Compensation 2001-02 Proposed Budget Using the Operating Ration (O/R) Formula: Expenses Subject to OR Operating Margin Less: Pass-through Expenses Compensation Requirement for OR PASCO Direct Revenues: Less: Recycling revenues Less: Other revenues Less: Fees to the City for revenue sharing Total Payments to PASCO Total Compensation Based on O/R - Full year $8,195,043 1,117,506 41,000 9,353,548 953,750 1,485,468 (838,838) 1,600,380 7,753,168 9,353,548 ATTACHMENT E 0 000 0 0 0 0 0 0 0 0 0 0 s~,~I Xlq~,uOIA~ p~,sn.fpv 0 s~I po~sn.fpv