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HomeMy WebLinkAbout2000-10-02 City CouncilCity of Palo Alto C ty Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: SUBJECT: OCTOBER 2, 2000 CMR:362: 00 ONE YEAR PERFORMANCE EVALUATION OF PALO ALTO SANITATION COMPANY (PASCO) / WASTE MANAGEMENT This is an informational report and no Council action is required. BACKGROUND Since the late 1950’s the Palo Alto Sanitation Company (PASCO) has been collecting, transporting and processing waste and recyclables generated within the City of Palo Alto. 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 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 an interim review of the collector’s performance to ensure that PASCO maintains high levels of service to residents and businesses in Palo Alto. This interim performance review sets a baseline criteria to ensure that the performance measurements and standards are fulfilled. 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 interim performance review of PASCO includes a performance audit, an evaluation of the penalties assessed for performance, and results of the recent customer service satisfaction survey. Staff~also has included an update of PASCO’s compensation and its reported recycling revenues for fiscal year 1999-2000. 1.Performance Adjustments The new agreement with PASCO allows the City the ability to assess performance adjustments on a monthly basis if PASCO’s performance is not within the 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, which then allows the City to terminate the agreement. CMR:362:00 Page 1 of 4 The performance adjustments are categorized into 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 adjustments range in financial penalty depending on the infraction. The average penalty for each performance adjustment is $300. During the first ten months of the agreement (September 1999 through June 30, 2000), City staff assessed a total of 26 performance adjustments~ with only 11 infraction-charged penalties, totaling $3,750. These adjustments were for infractions in collection quality and customer responsiveness (see Attachment A). 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). Performance Audit City staff conducted a two-day performance audit of PASCO operations in December 1999. 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. The audit verified that PASCO met the requirements in the following areas: ¯Proper handling of hazardous materials ¯Sanitation and performance requirements ¯Compliance with noise levels established in the Palo Alto Municipal Code ¯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 ¯Specifications for administering solid waste and recycling services for residential premises, multiple family dwellings, commercial/industrial premises, public receptacles, and other special services. Operation of the Recycling Center The audit found some items that needed further clarification. They included verification that any subcontractors provide proof of nondiscrimination in employment, and that all collection vehicles carry materials to clean spills. The audit also resulted in the clarification that telephone numbers at the business office and Recycling Center are required to be listed, and that all press releases or other documents prepared for release to the public be reviewed and approved by the City. These items were verified and were in compliance within a two-week period. CMR:362:00 Page 2 of 4 PASCO was found to be in compliance with all one hundred and seventy-two standards set in the current agreement for collection of solid waste and recycling materials. o 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 first six months of the new agreement. The survey asked residents to rate PASCO’s service as excellent, satisfactory or unsatisfactory. Approximately 20,850 surveys were sent to residents in April 2000 through the Recycling Program newsletter. City staff received 1486 completed surveys for a response rate of 7.13 percent (see Attachment B). Eighty-seven percent of the returned surveys rated PASCO service as excellent, ten percent rated PASCO as providing satisfactory service, and less than one percent (eleven of the returned surveys) rated PASCO’s service as unsatisfactory. The results of the customer service satisfaction survey shows that Palo Alto residents are generally satisfied with the level of service provided by PASCO and that PASCO continues to provide superior customer service. PASCO Compensation The total PASCO compensation budgeted for fiscal year 1999-2000 was $8,408,645 (see Attachment C). The first two months of the compensation are based on the old contract with PASCO, and the last ten months are based on the compensation methodology of the new agreement. The new method of compensation establishes the "Target Operating Ratio Range" to be two percent above or below the Operating Ratio (between 86 - 90 percent). The final year-end audited financial report was not available at the time of writing this report. However, based on the mid-year financial reports provided by PASCO, staff projects that PASCO is within the required operating ratio. The PASCO compensation for fiscal year 2000-2001 is budgeted at $8,959,937 (see Attachment C). Recycling Revenues As required in the agreement, if gross recycling revenues for the contract year are 15 percent or more above the baseline revenue established in the agreement, then PASCO will rebate to the City one-half of all revenues over the baseline figure plus 15 percent. For fiscal year 1999-00, PASCO reported recycling revenues of $1,217,810. Since the annual adjustment to the PASCO recycling compensation is CMR:362:00 Page 3 of 4 over the allowed baseline revenue of $830,300 ($722,000 baseline x 15%), PASCO rebated the City $193,755 for the recycling revenues received. ATTACHMENTS Attachment A:Summary of PASCO Performance Adjustments Attachment B:Evaluation of Customer Service Satisfaction Surveys Attachment C:PASCO Compensation PREPARED BY:Michael Jackson, Deputy Director, Public Works Paula Borges, Executive Assistant, Public Works DEPARTMENT HEAD: ~’~~"--’~ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: HARRISON Assistant City Manager CMR:362:00 Page 4 of 4 ATTACHMENT A o olo I ....lol°l° o ATTACHMENT B Evaluation of Customer Service Satisfaction Surveys The City’s Agreement with the Palo Alto Sanitation Company (PASCO) requires 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 April 2000. 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 six months (first six months of the new agreement). 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 20,850 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 Highlights: ¯City received 1486 completed surveys, for a 7.13 % return rate ¯87% of respondents rated the PASCO service as excellent ¯10% of respondents rated the PASCO service as satisfactory ¯Less than one percent (.74%) rated the PASCO service as unsatisfactory ¯Less than one percent (.67%) did not check any of the available categories ¯Approximately one percent of respondents checked more than. one category and were undecided between classifying the service as excellent/satisfactory or satisfactory/unsatisfactory Chart one ATTACHMENT B Rating of Responses Excellent Eighty-seven percent or 1299 of the returned surveys. (see Chart 1) rated the PASCO service as excellent. Over half of the returned surveys included additional comments with the majority having positive remarks about the PASCO service. 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. Satisfactory Ten percent or 151 of the survey responses rated the PASCO service as satisfactory (see Chart 1). 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, which ranged from positive comments about the PASCO service to expressions of discontent with certain aspects of the service. In analyzing the comments, the two top complaints were about PASCO not placing containers in appropriate locations (in driveways, landscaped areas, and sidewalks) and about the cardboard recycling guidelines being too strict and not user friendly. The third most common complaint in the satisfactory responses was about small pieces of material (trash, paper, yard trimmings) being left behind after the containers are emptied. Other comments in the satisfactory rating ranged from positive comments about PASCO collection (nice, fast and hard working drivers, on time and quiet collection) to comments about the recycling service (requesting wider range of materials be collected at curbside). Unsatisfactory Less than one percent of the returned surveys rated PASCO service as unsatisfactory (see Chart 1). Three responses or 27 percent of the surveys included comments complaining of small pieces of trash being left on the ground after collection (see Chart 2). The other two common complaints among the unsatisfactory responses were about the restrictions in recycling (cardboard size and bundling restriction), and about PASCO not replacing containers into appropriate locations after collection. Chart Two ATTACHMENT B Type of Respondent The survey had a 7 percent return rate with 95 percent of respondents living in single family dwellings, approximately 5 percent living in multi-family complexes and less than 1 percent of the responses were from businesses (see Chart 3). All surveys and comments from respondents were considered and evaluated. Chart Three Prevalent Comments Regardless of the rating given PASCO, 788 or 53% of residents wrote additional comments in the survey. The comments ranged from positive compliments about PASCO operations and drivers to expressing concerns about specific collection services. A considerable number of responses complemented 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) PASCO not placing containers in appropriate locations and obstructing sidewalks (public right of way), 2) PASCO not placing lids back on the (solid waste) containers, and 3) litter being left behind after containers are emptied. Addressing the Few Complaints about PASCO City staff met with PASCO management to address the most common complaints about the PASCO service. PASCO staff visited or called some individual residents to further investigate the service complaint and resolve it. PASCO management also met with their staff to discuss the survey responses. ATTACHMENT B Public Education As Result of Surveys Returned After reviewing the survey results, it was clear that a fair number of residents do not completely understand the solid waste and recycling service. Therefore, City staff and PASCO increased the public outreach to address the most complaints about the PASCO service. The outreach increased to educate the public about the reasons why certain service problems may occur and to help residents avoid future problems. City staff responded to residents by writing letters to individuals with specific questions. These letters clarified the service available and explained options available as well as any action taken with PASCO. General concerns with the services were addressed through the placement of public education advertisement in the local newspapers and through the regular publications from the Recycling Program (such as the community newsletter). PASCO also increased the public education effort by placing letters from the company explaining their collection services. These letters clarified the solid waste and recycling services and provided further explanations for the most common concerns expressed in the comment section of the returned surveys. The letters were placed as full-page advertisements in the Palo Alto Daily newspapers for a two-week period. Summary With ninety-eight percent of the returned surveys rating PASCO service as excellent or satisfactory, it verified that PASCO continues to provide the high quality of customer service that the Palo Alto community is used to receiving. This survey will serve as a baseline for future ratings of the PASCO service. Attachment C l PASCO Compensation J Budget using the Operating Ratio (O/R) formula Expenses subject to OR Operating Margin Pass-through Expenses Proposed budget Compensation Requirement for OR PASCO direct revenues: Less: Recycling revenues Less: Other revenues (debris boxes and bin rentals) Less: Fees to the City for revenue sharing Total compensation requirement for OR: 1999-00 2000-01 $7,424,393 $7,848,665 $1,012,417 $1,070,272 $41,000 $41,000 $8,477,810 $8,959,937 $722,000 $ 792,000 $ 1,300,000 $ 1,300,000 $(8O0,000)$ (800,000) $ 1,222,000 $1,292,000 $7,255,810 $ 7,667,937Payments to PASCO Total Compensation based on OR $ 8,408,645 $ 8,959,937