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HomeMy WebLinkAboutStaff Report 13766 City of Palo Alto (ID # 13766) City Council Staff Report Meeting Date: 9/12/2022 Report Type: Consent Calendar City of Palo Alto Page 1 Title: Approval of Amendment Number 1 to Contract Number C20177684 with SCA for Street Sweeping Services, for Modification and Increase of Contract by $1,080,674 to Include Prevailing Wages for a Revised Not to Exceed amount of $6,688,906 for the Remaining Three Years of a Five Year Contract; and Approval of Budget Amendment in the Refuse Fund From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract No. C20177684 with Sweeping Corporation of America (SCA), formerly Contract Sweeping Services (CSS), for street sweeping services; which includes a. The removal of Task 2 (Debris Management) from the Scope of Services for contract years 3 through 5; and b. Increasing the total not-to-exceed compensation by $1,080,674, from $5,608,232 to a new total not-to-exceed compensation amount of $6,688,906; and 2. Amend (by a 2/3 majority) the Fiscal Year 2023 Budget Appropriation for the Refuse Fund by: a. Increasing the Public Works appropriation for Contract Services by $83,158; and b. Decreasing the Rate Stabilization Reserve by $83,158. Background The Public Works Department’s Public Services Division is responsible for maintaining cleanliness throughout various City-owned public places, including sweeping over 17,000 curb miles of streets annually. Street sweeping is a key maintenance task that includes removing leaves, trash, and particulate debris such as metal particles from street surfaces and gutters, preventing these materials from entering our storm drain system and the San Francisco Bay, as required by State and Federal laws. On April 20, 2020, following a Request for Proposals (RFP) competitive solicitation process, Council approved a five-year contract with Contract Sweeping Services (CSS) for the provision of services through April 25, 2025 (Staff Report ID#11012). Contract Sweeping Services (CSS) has City of Palo Alto Page 2 since been acquired by SCA of CA, LLC, and the City has approved an assignment agreement assigning the contract to SCA of CA, LLC. The current five-year contract provides street sweeping services for all residential and light commercial areas throughout the City. The contract includes debris management provisions that address removal and disposal of debris. The debris removal provisions allow SCA to temporarily place debris on City streets during leaf season or when approved by the City. The debris disposal provisions direct SCA to haul street sweeping debris to the Sunnyvale Materials Recovery and Transfer Station (SMaRT Station) located in Sunnyvale for processing. The cost of hauling the debris is built into the contract under Task 2. On May 24, 2021, City Council approved a new contract for solid waste processing with GreenWaste Recovery (GWR) (Staff Report ID#11632) that began on January 1, 2022. Through the GWR contract, staff incorporated the processing of yard trimmings (from City crew work including sweeping debris) previously taken to the SMaRT Station to be processed at the Zanker Road Resource Recovery Operation and Landfill (Zanker), with the City Collector, GreenWaste of Palo Alto (GWPA), transporting the material rather than SCA. The cost of processing the debris is allocated in the City’s Refuse Fund within the solid waste processing expenses. Discussion Since January 1, 2022, GWPA has transported street sweeping debris to Zanker for processing. Staff has evaluated the transition in transporting the material between the two companies and found it to be successful, resulting in no major issues. This amendment to the SCA contract removes Task 2 from the contract, which means that SCA will no longer be permitted to haul debris. Responsibilities associated with Task 2 include the hauling of debris and the placement of debris on City streets during leaf season. Staff has evaluated the placement of debris on City streets for the last two years of the contract and this practice has yet to be utilized. Additionally, storage of sweeping debris on City streets has negative impacts including reduced level of cleanliness, unsightliness, and potential flooding concerns. Sweeping debris is currently taken to a bunker located at the Municipal Services Center (MSC) yard prior to being transferred to the processing center; this practice will continue with SCA. This expense is being removed from the contract and will only be reflected in the GreenWaste Recovery contract. Lastly, the Department of Industrial Relations (DIR), the State agency that oversees prevailing wage laws, issued a determination last fall that street sweeping work is subject to prevailing wages. As DIR previously held that such work was not subject to prevailing wages, this contract did not previously require them. In order to comply with DIR’s new directive, staff recommends amending the contract to include this requirement using prevailing wage rates specified by the DIR. The new curb mile rate is $74.27, an increase from $44.01. The difference in additional contract expenses for Year 3 (April 26, 2022- April 25, 2023), due to this prevailing wage increase and reduction of debris transportation expense, is $349,224, resulting in a funding need of $83,158 for Year 3. The contract had unspent budget of $266,066, as shown on Table 1, from the first two years which will be used in Year 3 to help cover the increased cost. City of Palo Alto Page 3 Table 1: Unspent Budget within Contract Current Budget (Tasks 1-4) & Additional Services Actuals (Tasks 1-4) Unspent Budget Contract Year 1 $1,035,432 $828,752 $112,550 Contract Year 2 $1,076,849 $825,438 $153,516 Total $2,112,281 $1,654,190 $266,066 Resource Impact The increase to this contract is not currently funded. To support this unbudgeted expense, an appropriation increase of $83,158 for contract services in the Refuse Fund is recommended, offset by a $83,158 decrease of the Refuse Fund Rate Stabilization Reserve. Subsequent years of the contract are subject to appropriation of funds through the annual budget process. The Refuse Fund Rate Stabilization Reserve (RSR) balance for Fiscal Year 2023, including this recommended use of $83,158, will have sufficient funds. The RSR is projected to be greater than the recommended 20 percent of sales metric RSR guideline. Table 2 shows the compensation for the amendment by contract year. Table 3 shows a comparison of the original contract against the amendment by contract year, as well as the difference and additional funding needed. Additional Services funding has been removed for the remaining three years to help offset the increase in contract expense. The funding from the first two years will be sufficient for the remainder of the contract. Table 2: Compensation for Amendment by Contract Year Year Services (Tasks 1-4) Additional Services Subtotals Contract Year 1 $941,302 $94,130 $1,035,432 Contract Year 2 $978,954 $97,895 $1,076,849 Contract Year 3 $1,469,147 $0 $1,469,147 Contract Year 4 $1,524,838 $0 $1,524,838 Contract Year 5 $1,582,640 $0 $1,582,640 Subtotals/Totals $6,496,881 $192,025 $6,688,906 Table 3: Comparison of Original and Amended Contract Current Budget (Tasks 1-4) & Additional Services Proposed Budget (Tasks 1-4) & Additional Services Difference Unspent Budget Additional Budget Needed Contract Year 1 $1,035,432 $1,035,432 $0 Contract Year 2 $1,076,849 $1,076,849 $0 Contract Year 3 $1,119,923 $1,469,147 $349,224 $266,066 $83,158 Contract Year 4 $1,164,720 $1,524,838 $360,118 $360,118 City of Palo Alto Page 4 Contract Year 5 $1,211,308 $1,582,640 $371,332 $371,332 Subtotals/Totals $5,608,232 $6,688,906 $1,080,674 $266,066 $814,608 Stakeholder Engagement This contract amendment is for a continuation of existing street sweeping services. Work groups within Public Works were consulted regarding the coordination of services provided under multiple contracts. Policy Implications This recommendation does not represent any change to existing City policies. Environmental Review The recommended action is CEQA exempt under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15061(b)(3).