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HomeMy WebLinkAbout15 FDS REQ FOR 3 YR EXT 01-15-07Agenda Item 15 AGENDA REPORT MEETING DATE: JANUARY 15, 2007 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PUBLIC WORKS DEPARTMENT SUBJECT: FEDERAL DISPOSAL SERVICE REQUEST FOR A THREE YEAR CONTRACT EXTENSION SUMMARY Federal Disposal Service (FDS) has requested a 3 year contract extension from their current contract expiration date of September 30, 2007. Staff is recommending the City Council deny the request pursuant to the City Code and direct staff to continue with the procurement process. RECOMMENDATION Staff recommends that the City Council deny the request by Federal Disposal Service' for a contract extension in accordance with City Code Section 4333. FISCAL IMPACT There is no fiscal impact associated with this item. BACKGROUND In letters to the City dated May 31, 2006, December 4, 2006 and January 4, 2007 Federal Disposal Service has requested a three year contract extension to continue as the City's franchised solid waste services provider until 2010. FDS has also requested that prior to approving and issuing the new Solid Waste, Contract Request for Proposal (RFP), the City Council direct staff to negotiate with FDS to continue all existing residential and commercial services and has offered to provide a new food waste processing program, the establishment of a recyclable redemption center program and universal waste drop off center at no additional charge. FDS was awarded the City Solid Waste Management Franchi,se in 2000 at the conclusion of a competitive public works contract bid process. The contract was for a fixed seven year term beginning October 1, 2000 and concluding on September 30, 2007. The contract does not include any provision for an extension. Federal Disposal Service Request for a Three Year Contract Extension January 15, 2007 Page 2 In its letters, FDS has based its request on several premises: 1. More time is required to prepare and issue the RFP. 2. The integrity of the contract award process in not being adequately provided for. 3. The 2005 Waste Generation Study must be completed prior to the issuance of an RFP. 4. FDS is proposing to maintain the existing level of services and waste diversion and that this combined with a waste study will assure compliance with CIWMB requirements Staff offers the following responses to FDS' position on these issues: Issues 1 and 2 The City's Ordinance (EE) requires a regular timely procurement process for S.olid Waste and Recycling Services. An open and competitive process is the central theme in both Measures EE and 1994's Measure J. Staff is ready to issue the Request for Proposal upon the approval of the City Council. The City's consultant, EcoNomics, Inc., has prepared all necessary proposal and contract documents and has also developed a proposed process protocol and the proposal evaluation criteria. The items are available for City Council consideration as a separate agenda item. With the approval of these items, staff is confident that the integrity of the contract award process will be ensured. Issue 3 The Waste Generation Study is an annual report to the CIWMB on the status of the City's diversion efforts. The Waste Study does not affect the RFP process. In a letter dated January 3, 2007, the CIWMB commends the City on the implementation of the SB 1066 Programs but also advises the City to continue its efforts to further increase municipal waste diversion. The CIWMBhas indicated to staff that the SB 1066 process is not the end of their scrutiny of the City's waste diversion efforts because the City is still not at 500/0 diversion on a City-wide basis. Maintaining existing programs will clearly not comply with the CIWMB mandate and could further expose the City to future action by the CIWMB. A waste generation in not needed to identify any new diversion programs nor will it demonstrate a good faith effort to the CIWMB. The CIWMB and staff agree that additional multifamily and commercial waste diversion programs are needed. Federal Disposal Service Request for a Three Year Contract Extension January 15, 2007 Page 3 Issue 4 Although FDS has satisfactorily implemented the SB 1066 time extension programs pursuant to a 2005 contract amendment, The City has never achieved the 500/0 diversion goal that was central to the year 2000 solid waste contract. As a result, the City continues to be at risk with enforcement action by the CIWMB. FDS' proposal to continue the current level of services and diversion does not mitigate the City's position with the CIWMB. Over the 16 years since the passage of AB 939, the regulations governing the administration of the law have stabilized and codified. Over the past seven years, the CIWMB has been very specific with the City in regards to the need to improve programs and waste diversion. Based on a past municipal waste collection and recycling efforts and an analysis of other landfill disposal attributed to the City, the City will not achieve the 500/0 diversion requirement without requiring that 500/0 of the municipal waste stream is diverted. The wording of Measure EE (City Code Section 4333) states that the only circumstance that the City Council may grant an extension is to accommodate the completi~n of the competitive process: "The Council may enter into contracts for the collection and disposal of solid waste material, and may establish such rules for the regulation thereof as it may from time to time deem best and necessary. At least every ten (10) years City contracts for the collection and disposal of solid waste and for the collection of recyclable material shall be competitively bid according to rules and regulations adopted by the City Council and designed to secure the best level of services at the lowest price practicable. This requirement shall apply upon the termination of each City contract for the collection and disposal of solid waste material that is in effect as of the effective date of this Section. The City Council in its sole discretion may extend any contract or franchise in existence on the effective date of this Section for a period of UP to three years. to accommodate the completion and implementation of the competitive process reauired in this Section and/or to ensure a seamless transition between providers as may be necessary or desirable. subiect to such conditions as the City Council determines are reasonable or appropriate." Federal Disposal Service Request for a Three Year Contract Extension January 15, 2007 Page 4 Staff is recommending that the City Council find that a contract extension is unwarranted and not in the best interest of the City, its residents and businesses and that staff be directed to proceed with the contract procurement process. Tim D. Serlet Director of Public Works/City Engineer Joe Meyers Administrative Services Manager Public Works Department TDS: JM: FDS request for Contract Ext.doc Attachments: FDS Request Letters City Code Section 4333 RFP schedule CIWMB Letter FEDERAL DISPOSAL SERVICE Office: 15031 Park\vay Loop, Suite A Tustin, California 92780 Mailing: PO BOX] 4730. Irvine" CA 92623-4730 Tete: 714-259"()534. Fax: 714-259-0975 January 2, 2007 Mayor Lou Bone City of Tustin 300 Centennial Way Tustin, CA 92780 RE: Request for Proposals ("RFP"), Contract Award Selection Criteria, and Revised Solid Waste Code; in connection with the Solid Waste and Recycling contract. Dear Honorable Mayor Bone, I write you today to express my concern that the time line proposed in the City's RFP is unrealistic and thereby negates the opportunity of the City Council to administer and oversee very important safeguards designed to protect the integrity of the competitive process. As you know, Measure EE vested the oversight of the competitive process with the City Council alone. I request therefore, that the City Council delay the release of the RFP until such a time as it has had a chance for full public review, discussion and comment. By connection, theRFP process includes: 1) language of the RFP, 2) the Franchise Agreemen~ 3) the Contract Award Selection Criteria, and 4) revisions of the solid waste code. I write in light of your familiarity with the history of the contract here in Tustin and how explicitly the public has twice strongly spoken in favor of a process to rigorously protect and preserve the competitive bid process. Conversely, the time line provided at the Haulers conference on December 14, 2006 provides virtually no opportunity for City Council deliberation of the specifications in the RFP or the contract award selection criteria. Further, the same timeline only provides 30 days for the review of proposals once received prior to award. I could go on, but my point is clear, that the public trust vested in the City Council with Measure EE that safeguards the integrity of the award of the contract is not being adequately provided for. I kindly request that the City Council postpone the adoption of the proposed RFP at the January 15th City Council meeting; that the City Council direct staff to negotiate a three year extension of current selVices-- providing time for the completion, submission, review and acceptance of the 2006 Waste Generation (Base Year) Study--and that the City Council use the 2006 baseline figure (developed from the study) to determine future RFP diversion requirements. Concurrently, I request that City Council direct staff to collaborate work with Federal Disposal Service on the Waste Study/Waste Generation study. Sincerely, Don Shubin President Federal Disposal Service Attachment: RFP Timeline c: Tustin City Council Michael Mullins, Esq. Douglas Holland, City Attorney Bill Huston, City Manager Tim Serlet Director of Public Works Joe Meyers, Administrative Services Mngr CITY OF TUSTIN SOLID WASTE CONTRACT RFP PROCESS The Proposed schedule for this procurement process is as follows: Action RFP Issued ate Janua 23,2007 Februa 2, 2007 Februa 12, 2007 Februa 16, 2007 March 1, 2007 March 2, 2007 April 5, 2007 October 1, 2007 Written Questions on RFP/Draft Contract Due to Cit Written res onses to all uestions issued b Cit Pro osals Due ins Ci Council Awards Contract Collection Operations Be in Under New Contract FEDERAL DISPOSAL SERVICE Office: 15031 Parkway Loop, Suite A, Tustin, California 92780 Mailing: PO BOX 14730 . Irvine, CA 92623-4730 Tele: 714-259-0908 . Fax: 714-259-0533 December 4, 2006 Mr. William Huston, City Manager City of Tustin 300 Centennial Way Tustin, CA 92780 Dear Mr. Huston, The purpose of this letter is to request from the Tustin City Council a three year extension to Federal Disposal Service's existing solid waste and recycling contract(s). This request follows our letter dated May 31,2006, to Mayor Doug Davert, wherein Federal Disposal Service recommended a modification to Tustin's City Code later embodied in Measure EE, which provides the City with the option to extend existing contracts. We make this request following the overwhelming support of Measure EE (88 percent) on November 7, which indicates to us a real public satisfaction and desire for increased Federal Disposal Service recycling services in Tustin. Again, it is our recommendation that the City of Tustin negotiate extensions of existing contract(s) with Federal Disposal Service and complete the long needed waste study to establish the City of Tustin's AS 939 compliance standing with the California Integrated Waste ""anagement Board orier to developing the RFP specifications that the City will be tied to for the next 10 years; and to avoid the unfavorable situation of bidding out services only to find out from the State that those services are not acceptable. Therefore, Federal Disposal Service hereby offers to enter into negotiations to extend existing contracts an additional three years that would include: . A continuation of all existing residential and commercial services. . The continued operation and expansion of S8 1066 programs. . The continued research and development of food waste/compost efforts at no additional cost to the City. . The establishment of a CRY redemption and universal waste drop-off center. Thank you for to help with this matter, and I look forward to meeting with you in person to further discuss solid waste and recycling services in Tustin. Sincerely, 1 I/;;( ,if :i/ljltftll Don Shubin President c: City Council City Attorney Mr. William Huston, City Manager Mr. Tim Serlet, Public Works Director Mr. Joe Meyers, Administrative Services Manager FEDERAL DISPOSAL SERVICE Corporate Office: 15031 Parkway Loop, Suite A. Tustin, CA 92780 Mailing Address: PO Box 14730 . Irvine. CA 92623-4730 Telephone: 714259-0534 . Fax: 714259-0975 May 31, 2006 Honorable Mayor Davert 300 Centennial Way Tustin, California 92780 Re: Federal Disposal- (1) Expansion of Recycling Program, and (2) New Initiative Dear Mayor, The purpose of this letter is to provide you with a synopsis of two requests that Federal Disposal ("Federal") intends to make to the Tustin City Council ("Council"). Allowing Expansion of Recycling Program As the Council may be aware, starting in April 2005, Federal embarked on the expansion of commercial recycling programs in Tustin, in conformance with an SB 1066 extension. What we came up with was an innovative approach, coupling newly designed equipment with an affirmative outreach effort. The result has successfully boosted recycling participation at targeted multi-family, office, and restaurant establishments in Tustin. I believe Tustin current program to be among, if not the top in the state right now. Generally speaking, the program ("Program") provides tailored half bins that allow two new bins to fit within the footprint of existing single bin space, in-house receptacles, along with affirmative and effective outreach and promotion. We anticipate that the current Program will provide a significant increase in recycling, resulting in direct benefit to the City. We further anticipate that with the continued full development of the current effort, Tustin's hauler diversion rate may be increased from today's 32% to near 40% within 3 years. Unfortunately, Federal's current Franchise Agreement with the City expires in September 2007, prior to when the Program will be fully implemented. Federal believes the current momentum and progress should, if possible, be maintain at this particular time. As such, Federal intends to request that the City extend the term of its current Franchise Agreement(s) by three years to allow the full and continued implementation of . the Program, to the benefit of the City. City statThave been involved with Federal during the development of the Program and we believe that they see the long term benefit of the continued development of the current Program for the City. We are prepared to attend a Council meeting and answer any questions that the Council may have. Donald Shubin Page 2 New Initiative As the Council may also be aware, there has been a significant shift in public procurement at the various governmental levels towards "best value" contracting, as opposed to "low bid" contracting. Best Value contracting is an approach which allows a public entity to analyze technical and qualitative factors in an award decision. A low bid award is one where the government entity writes the specifications, and makes an award based on price alone. Comparatively, in Best Value contracting, the proposer provides the latest state-of-the-art technical specifications along with its price offer. The later approach provides numerous benefits to the public entity including the opportunity of comparing the costs and benefits of one program with the costs and benefits that might be offered by other proposers. In Best Value contracting a public agency may pre-qualify proposers and thereafter factor in past performance, experience and management plans -- in addition to cost -- when making awards. Best Value contracting is particularly well suited for procurements which have as a goal the achievement of transformational improvements, such as exists with the recycling program in Tustin. In contrast, low-bid contracting tends to perpetuate the status quo and rarely offers innovation or capital improvement when needed. Importantly, when properly executed, Best VaIue contracting can balance the public's desire for integrity in contracting, the City's need for fiscal responsibility and the customer's evolving and changing service needs. Federal requests the City Council direct the City Attorney to draft an initiative for the November 2006 ballot to change Tustin Municipal Code section 4333 that 1) retroactively extends the bidding requirement from seven (7), to ten (10) years; 2) and modifies the bidding provisions in City Code in line with Best Value contracting. Should that process be successful, the Council would be required to revise the language of Municipal Code 94333, which governs the bidding process for waste hauling/recycling contracts, and which currently requires bidding through the low bid process. Attached as Exhibit" A" is proposed statutory language which the Council could adopt as the replacement to ~4333, and which details a Best Value bidding process. It is premised on an existing California Best Value statute (public Contracts Code 920175.2). Thank you for your time. Sincerely, Donald Shubin President c: City Council City Attorney Mr. Joe Meyers, .A.dmin. Service Manager Mr. Tim Serlet, Public Works Director 4333 CONTRACTS FOR REMOVAL AUTHORIZED. The Council may enter into contracts for the collection and disposal of solid waste material., and may establish such rules for the regulation thereof as it may from time to time deem best and necessary. The terms, as set forth in Part 4, shall be the minimum terms of any contract approved by the City Council. At least every seven (7) ten (10) years City contracts for the collection and disposal of solid waste and for the collection of recyclable material shall be competitively bid in 3ccord3nce v/ith C31iforni3 Public Contr3cts Code Section 20162 et seq. accordina to rules and reaulations adopted bv the City Council and desianed to secure the best level of services at the lowest price practicable. This requirement shall apply upon the termination of each City contract for the collection and disposal of solid waste material that is in effect as of the effective date ef this Ordin3nce No. 1130 Section. The City Council in its sole discretion may extend any contract or franchise in existence on the effective date of this Section for a period of UP to three years. to accommodate the completion and implementation of the competitive process required in this Section and/or to ensure a seamless transition between providers as may be necessary or desirable. subiect to such conditions as the City Council determines are reasonable or appropriate PROJECT OVERVIEW The schedule for this procurement process is as follows: Action Date RFP Issued January 23, 2007 Mandatory Pre-Proposal Conference February 2, 2007 Written Questions on RFP/Draft Contract Due to City February 12, 2007 Written responses to all questions issued by City February 20, 2007 Proposals Due March 1, 2007 Evaluation of Proposals Begins March 2, 2007 City Council Awards Contract April 2, 2007 Collection Operations Begin Under New Contract October 1, 2007 CITY OF TUSTIN RFP FOR DIVERSION SERVICES 1.2 LINDA S. ADAMS SECRETARY FOR ENVIRONMENTAL PROTECTION MARGO REID BROWN CHAIR MBROWN@CIWMB.CA.GOY (916) 341,6051 JEFFREY DANZINGER JDANZINGER@CIWMB.CA.GOY (916) 341,6024 ROSALIE MULE RMl JLE@CIWMB.CA.GOY (916) 341,6016 CHERYL PEACE CPEACE@CIWMB.CA.GOY (916) 341,6039 GARY PETERSEN GPETERSEN@CIWMB.CA.GOY (916) 341,6035 CALIFORNIA INTEGRATED WASTE MANAGEMENT BOARD 1001 I STREET, SACRAMENTO, CALIFORNIA 95814- P.O. Box 4025, SACRAMENTO, CALIFORNIA 958124025 (916) 341,6000 - WWW.CIWMB.CA.GOY January 3, 2007 Joe Meyers City of Tustin 300 Centennial Way Tustin, CA 92780 RE: City of Tustin's SB 1066 Final Status Update Review Dear Mr. Meyers: The purpose of this letter is to notify you that California Integrated Waste Management Board (Board) Office of Local Assistance (OLA) staff has completed its review of the City of Tustin's final SB 1066 program implementation. As a result of our review of the information provided in your final SB 1066 Status Update and 2004 Annual Report, we found that your City was below the 50% goal (for 2004) but appears to be implementing the programs identified in your Plan of Correction. Board staff is concerned however that the city's 2004 diversion rate of 25% is significantly below the 50% goal. Staff is encouraged to hear that there will be language in the new contract agreement that will include a 50% diversion requirement. This along with continued improved program implementation and monitoring will help the city move closer toward the 50 percent diversion goal of AB 939. Because your SB 1066 Time Extension was approved through 2005, we cannot make a final determination and recommendation regarding your efforts to meet the 50 percent goal by December 31,2005, until we receive your 2005Annual Report and associated diversion rate. Once we complete our review of your 2005 Annual Report, we will notify you of our findings and final recommendations. If you have any questions about this letter or the final SB 1066 Status Update review process, please contact me at (916) 341-6201. Respectfully, Maria Kakutani @ PRINTED ON PAPER CONTAJNING 100 PERCENT POSTCONSUMER FIBERS