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HomeMy WebLinkAbout25B - AGMT SOLID WASTE CONSULTANTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE AMENDMENT TO THE AGREEMENT WITH HF&H CONSULTANTS, LLC, FOR SOLID WASTE CONSULTANT SERVICES IN AN AMOUNT NOT TO EXCEED $221,119 {STRATEGIC PLAN NOS. 4, 1 & 5} RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 91 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager to amend the agreement with HF&H Consultants, LLC, by expanding the scope of work for Solid Waste Consulting Services and including additional contract extension negotiation services to address organics recycling and green waste legislation; extending the term through June 30, 2022, with a provision for one 1-year optional extension exercisable by the City Manager and City Attorney; and increasing the total compensation by $184,266, plus a 20% contingency of $36,853, for a total increase of $221,119, and resulting in total compensation not -to - exceed $441,919, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION The City's agreement with Waste Management for collection and handling of solid waste is due to expire on June 30, 2021. The Public Works Agency is working with HF&H Consultants (HF&H) to develop a Request for Proposals (RFP) for city solid waste services that will provide appropriate solid waste services in Santa Ana that considers recycling trends and compliance with State legislation. HF&H has already assisted the City in establishing the City's "Green Policy" and goals, and developing a draft RFP and agreement. The scope and terms of the agreement need to be expanded for the following purposes: 1. The City desires to negotiate a one-year extension with Waste Management (WM) to accommodate the expanded RFP process timeline. The one-year extension from July 1, 2021, to June 30, 2022, will be impacted by Senate Bill 1383, which requires implementation of residential curbside organics recycling by January 1, 2022. An extension at this time also provides an opportunity to address the requirements of Assembly Bill 1594. This bill eliminates diversion credit for green waste sent to County landfills as Alternative Daily Cover. HF&H will 25B-1 Amend the Agreement with HF&H Consultants, LLC, for Solid Waste Consulting Services September 17, 2019 Page 2 assist the City in negotiating the extension and ensure the additional programs are compliant with State mandates. The base amount of compensation for the additional consultant negotiation services is $50,000 plus a 20% contingency of $10,000, for a total of $60,000 for these additional services at the City's sole discretion. 2. A significant portion of the consultant agreement has been expended in the development of the RFP. With additional modifications still needed, the extended solid waste contract with WM, and expected supply -chain impacts, the City desires to amend the contract with the consultant to finalize the RFP and agreement, and assist the City in the RFP process, which includes negotiation of the final solid waste services contract. Compensation is $134,266 for this expanded scope of work plus a 20% contingency of $26,853, for a total of $161,119 for these additional services at the City's sole discretion. Staff recommends amending the contract with HF&H Consultants, LLC, to negotiate an extension with WM, ensuring that the City remains in compliance with State mandates, and to complete the RFP process for selecting new solid waste services. HF&H Consultants is experienced with similar work in the solid waste industry and has made significant progress in the work already completed on the Draft RFP and Draft Agreement. The total compensation for the amendment is in the amount not to exceed $221,119 (Exhibit 1). STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #4 — City Financial Stability, Objective #1 (maintain a stable, efficient and transparent financial environment); and, Goal #5 - Community Health, Livability, Engagement & Sustainability. ENVIRONMENTAL IMPACTS There is no environmental impact associated with this action. FISCAL IMPACT The total amount of the requested amendment is $221,119. Funds are available for expenditure in FY 2019-20 and will be budgeted in subsequent years as follows: Fiscal Accounting Unit Fund Description Accounting Unit, Account Amount Year — Account# Description FY 19-20 06917640-62300 Refuse Collection Refuse Collection Service, Contract $75,000 Service Services -Professional FY 20-21 06917640-62300 Refuse Collection Refuse Collection Service, Contract $100,000 Service Services -Professional FY 21-22 06917640-62300 Refuse Collection Refuse Collection Service, Contract $25,000 Service Services -Professional Optional 1-Year Extension FY 22-23 06917640-62300 Refuse Collection Refuse Collection Service, Contract $21,119 Service Services -Professional Total Amendment: $221,119 25B-2 Amend the Agreement with HF&H Consultants, LLC, for Solid Waste Consulting Services September 17, 2019 Page 3 GI Fuad S. Swes, PE, PLS Executive Dir for Public Works Aciencv FSS/MLM/CK I Exhibit: 1. Amendment APPROVED AS TO FUNDS AND ACCOUNTS: i4tTvin' Kathryn Do ns, CPA Executive Director Lt] Finance and Management Services Agency 25B-3 25B-4 EXHIBIT 1 FIRST AMENDMENT TO AGREEMENT FOR SOLID WASTE CONSULTING SERVICES THIS FIRST AMENDMENT to the above -referenced agreement is entered into on September 17, 2019, by and between HF&H Consultants,' LLC ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The parties entered into Agreement No. A-2018-134, dated May 15, 2018, by which Consultant agreed to provide solid waste consulting services ("Agreement"). B. The Agreement remains in effect through June 30, 2020, with provision for. extension up to one year, and the parties now wish to further extend the term, expand the scope of work, and increase the amount to be expended under the Agreement in consideration of the expanded time and scope. The Parties therefore agree: 1. Section 1, Scope of Services, is amended to include the additional services that are described on Exhibits A and B. 2. Section 2.a, Compensation, is amended in its entirety so that the total sums to be expended for the scope of services originally described in the Agreement and expanded by those services described on Exhibits A and B, including during any extension periods, are as follows: • Original Scope and Exhibit A: $381,919. This sum is comprised of (1) the base amount of $318,266 and (2) a 20% contingency of $63,653 for additional services at the City's sole discretion. • Exhibit B: $60,000. This sum is comprised of (1) the base amount of $50,000 and (2) a 20% contingency of $10,000 for additional services at the City's sole discretion. 3. Section 3, Term, is amended to extend the term of the Agreement through June 30, 2022, with provision for extension through June 30, 2023 upon a writing executed by the City Manager and City Attorney. 4. Except as modified by this First Amendment, all terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Agreement on the date and year first written above. ATTEST DAISY GOMEZ Clerk of the Council CITY OF SANTA ANA KRISTINE RIDGE City Manager Page 1 of 2 25B-5 APPROVED AS TO FORM CONSULTANT SONIA R. CARVALHO, City Attorney By: V. J M. FUNKWarne: Assistant City Attorney Title: FOR APPROVAL Fuad S. Sweiss, PE, PLS Executive Director Public Works Agency Page 2 of 2 r EXHIBIT A 19200 Von Karman Avenue, Suite 360 Irvine, California 92612 Telephone: 949/251.8628 www.hfh-consultants.com September 10, 2019 Ms. Christy Kindig Project Manager Public Works Agency City of Santa Ana 20 Civic Center Plaza; 41h Floor Reception, Ross Annex Santa Ana, California 92701 Re: Scope of Services to Perform Remaining Tasks: RFP NO:18-006 Dear Ms. Kindig: Tomorrows Resources Today Robert D. Hilton, Emeritus John W. Farnkopf, PE Laith 6. Ezzet, CIVIC Richard J. Simonson, CMC Marva M. Sheehan, CPA Rob C Hilton, CIVIC We have developed the attached scope of services to complete the City of Santa Ana's (City) request for proposals (RFP) for integrated solid waste services based on direction received from City staff during my meeting with you and the City Manager on July 8, 2019, and subsequent conversation with you on August 22, 2019. Our consulting agreement was entered into with the City on May 15, 2018. HF&H was retained to assist In the preparation of an RFP and agreement for integrated solid waste services, review of submitted proposals, and the negotiation of the final agreement. On June 9, 2019, HF&H forwarded a project status and budget update to City staff documenting tasks performed that were in addition to our originally executed scope. In summary, these Included: We have produced six iterations of the RFP package to date, versus four revisions budgeted In the work plan, and there will be at least one more based on the newest comments, which brings the anticipated total to seven Iterations. Each version of the RFP documents Is a significant effort. For example, a change to the RFP service requirements may Impact the agreement and cross references In several places, and possibly result In substantive changes to the rate proposal forms, supporting cost and operating data forms, rate adjustment formula, and related EXCEL exhibits. • Many of the City's existing service arrangements are not described In the existing franchise agreement, Increasing the level of effort to research and document current procedures. • We conducted a series of briefings at the start of the project with individual Council members to confirm their goals for the process but these were not budgeted activities. The approved budget was $184,000, As previously documented, we have absorbed $20,000 In fees as a one-time client service adjustment. The requested budget adjustment is $134,266. Please see the attached workplan for details. Therefore, the updated total budget is $318,266 ($184,000 + $134,266). 25B-7 Managing Tonnorrov/s Resources Today Ms, Christy Klndig September 10, 2019 Page 2 of 2 We appreciate the opportunity to submit the attached scope of work and fee estimate to complete our work for the City. If you have any questions, please contact me at (949) 251-8902, lezzet ar@hfh- consuitants.com. Very truly yours, HF&H CONSULTANTS, LLC 1.v G��v'I Laith Ezzet, CIVIC Senior Vice President r City of Santa Ana Scope of Work Solid Waste Consulting Services Scope of Work Task 1: Prepare and Issue Request for Proposals Subtask 1A: Revise RFP and Agreement up to Two Times Based on Direction of City Staff Based on the information and direction received by City staff on July 8, 2019 as documented in our correspondence dated July 16, 2019, we will revise the draft RFP, and draft the agreement. HF&H will submit the draft RFP and agreement to City staff for review. After City staff has reviewed the documents and provided us with one set of written comments, we will confer with City. staff and make appropriate revisions to these documents one additional time. Subtask 18: Attend First City Council Meeting to Consider RFP Package HF&H will attend one City Council meeting at which the City Council will consider the RFP and draft agreement. We will assist City staff with the preparation and presentation of the RFP process and key contracting terms to be requested. Subtask 1C: Update Documents Based on Council Direction HF&.H will update the RFP and draft agreement to reflect changes that may be requested by City Council during the Council meeting to considerthe documents. As the City Council previously provided direction at the meeting on October 16, 2018, the budget assumes that such changes will consist of minor refinements that do not require significant changes to structure of the documents. Subtask ID: Attend Second City Council Meeting to Approve RFP Package If the RFP package is not approved for release at the first City Council meeting In Task 1B, HF&H will attend a second City Council meeting at which the City Council will approve the RFP and draft agreement. Subtask 1E: Finalize Documents Based on Council Direction HF&H will finalize the RFP and draft agreement to reflect changes that may be requested by City Council during the second Council meeting to approve the documents. The budget assumes that such changes will consist of minor refinements that do not require significant changes to structure of the documents. Subtask SF: Solicit Proposals Once the RFP and draft agreement have been approved by the City Council, they can be distributed to potential proposers. We can provide the City with a recommended list of potential proposers to whom the City may send the RFP. Alternatively, to avoid the time, expense and environmental Impact of production and mailing of multiple copies of a large document, we recommend that HF&H or the City e- mail the RFP document to all potential proposers and the local waste haulers' association, and other interested parties. We can provide the City with a list of recipients for City records. By e-mailing the document, proposers are immediately notified of its availability, can Immediately review the document to determine their level of Interest without having to print It out, and can forward It to the appropriate parties within the firm Immediately without having to print extra copies. As we regularly distribute our RFPs this way, we may have all or most of these key individuals already on our e-mail distribution list. September 10, 2019 Page 1 HF&H Consultants, LLC 25B-9 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 16: Prepare for and Conduct Proposers' Conference We will schedule, along with City staff, a proposers' conference to be conducted shortly after release of the RFP. Potential proposers will have an opportunity to receive clarification of any Issues and ask questions at this conference. We will also accept written requests for clarification until a set deadline. We recommend that contact between proposers and the City be controlled and will suggest methods to do so, based on City staff and City Council's desired level of interaction with proposers. Subtask 11-1: Prepare Addenda We will prepare written responses to questions posed at the proposers' conference, or submitted in writing, and prepare any necessary addenda arising from Issues posed at the proposers' conference. All questions and responses shall be made available to all proposers In attendance at the conference. TASK 2: Review and Evaluate Proposals Subtask 2A: Review Proposals for Completeness We will perform an Initial review of each proposal submitted for compliance with the City's RFP requirements and consult with City staff regarding the handling of Incomplete proposals. Subtask 2B: Evaluate Complete Proposals The specific criteria for which we evaluate the complete proposals will be developed using Input received from City staff and the City Council. Based on our experience In other cities, we anticipate evaluating the proposals based on the following criteria: • Exceptions taken to the terms and conditions of the draft agreements; • Proposed total compensation (rate revenue), based on the rates Included in the financial section of the proposal; • Experience of the proposers In providing the requested services In other Jurisdictions, based on Information contained In their proposals; • Financial resources of the proposers, based on Information contained in their proposals; and, • Unique proposal features that exceed the RFP's minimum requirements. Subtask 2C: Evaluate Proposed Rates and operating Assumptions, Perform Fiscal and Rate Analysis We will evaluate the proposed rates and rate revenue, supporting costs, number of route hours, diversion plans and other submitted operating assumptions for reasonableness. We will review each proposers' fiscal stability based on key financial ratios, ability to provide required Insurance and performance sureties, and the financial Impact of the growth necessary to assume servicing these contracts. We will present the overall Impact of the proposed rate revenue on the City and Its rate payers, as well as noting the Impact to rate payers at common service levels. It is Important not to focus on Just a few low rate categories, without determining whether other customers will be similarly Impacted. September 10, 2019 Page 2 HF&H Consultants, LLC 25B-10 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 21): Prepare Follow -Up Questions for Proposers After'performing our Initial review and evaluation, we will provide each proposer with our summary evaluation of the company's Individual proposal in order to confirm our understanding of the information presented in the proposal. Subtask 2E: Review Responses and Clarify Unresolved Issues We will review responses received from proposers and resolve any 'open Issues to help ensure that proposers are satisfied with the representation of their proposals. Subtask 2F: Interview Proposers At this stage In the process, usually one, two, or three proposals are, more likely to he selected. Along with the City's evaluation team, we will Interview up to three proposers, scheduling all Interviews on one day. Subtask 2G: Contact References for Recommended Proposer We will contact references provided for the proposer to be recommended to the City Council for award of the agreement. We will summarize the results of the reference checks within the evaluation report. Subtask 2H: Prepare Draft Evaluation Report All proposals will receive a preliminary evaluation. A detailed evaluation Is performed of the one or two proposals that appear to offer the most value for the services and costs proposed. Additionally, we will review the overall reasonableness of the operational and financial assumptions contained In the technical section of the proposals selected for detailed evaluation. After our evaluation Is complete, we will provide the City with a report describing the evaluation results, Subtask 21: Review City Comments and Prepare Final Evaluation Report HF&H will review and incorporate City comments into the evaluation report and provide a final evaluation report, Subtask 21: Attend First City Council Meeting to Consider.Contractor for Negotiations HF&H will attend one City Council meeting at which the City Council will consider the proposer(s) with whom the City would like to negotiate a franchise agreement. Subtask 2K: If Required, Gather and Provide Additional Information to Respond to City Council Inquiries Based on questions and/or comments from the City Council at the meeting In Task 2J, HF&H will gather additional information to respond and provide the information to City staff to distribute to the Council. September 10, 2019 Page 3 HF&H Consultants, LLC 25B-11 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 2L: Attend Second City Council Meeting to Select Contractor for Negotiations If the Council does not select a contractor for negotiations at the first meeting in Task 21, HF&H will attend a second City Council meeting at which the City Council will select the proposer(s) with whom the City would like to negotiate a franchise agreement. TASK 3: Negotiate With Too Ranked Contractors. and Prepare a New Agreement with Selected Contractor for City Council Approval Subtask 3A: Prepare for and Participate In Negotiation Sessions HF&H will participate in negotiation sessions with one or more proposers, up to a total of four negotiation meetings. The fee estimate Includes costs for up to four negotiation sessions. The City may prefer to negotiate with multiple proposers at this time, as multiple proposals may appear attractive prior to finalizing the agreement. Proposers are most cooperative when they are still In competition. After finalizing negotiations, we would then assist the Clty's evaluation team in Its determination of a final selection. If the City desires to negotiate further with the final selection, we would assist In those negotiations as well. Subtask 3B: Prepare Revised Portions of Agreement Based on the negotiations, we will make up to three sets of revisions to the final agreement negotiated with the selected proposer. The City can then make a decision based on clearly defined contract terms, verses general promises often made In proposals and during negotiations. Also, at award, neither the successful nor unsuccessful proposers can debate what was or was not the final offer to the City. Subtask 3C: Attend First City Council Meeting for Consideration of the Final Agreement We will attend the City Council meeting at which the agreement will be considered by the City Council. Subtask 313: Prepare Additional Analysis If Requested by the City Council HF&H will prepare additional analysis If requested by the City Council during the meeting In Task 3C. HF&H will submit the analysis to City staff for distribution to City Council prior to City Council meeting In Task 3E, If the additional analysis Is more than anticipated and budgeted for, we will discuss this with City staff, and Inform staff when the budget for this task Is expended. Subtask 3E: Attend Second City Council Meeting for Approval of the Final Agreement We will attend the City Council meeting at which the final agreement will be approved by the City Council. The City Attorney or City Clerk will be responsible for obtaining signatures and completing attachments with the contractor such as bonds and Insurance certificates. September 10, 2019 Page 4 HF&H Consultants, LLC 25B-12 City of Santa Ana Scope of Work Solid Waste Consulting Services Fee Estimate We will perform the scope of work based<on time and materials as described In the workplan on the following page. The proposed budget adjustment Is $134,266. The remaining tasks include updating the Integrated residential and commercial RFP and agreement based on direction provided by City staff on July 8, 2019, revising the documents one additional time based on City staff review, soliciting proposals, conducting a pre -proposal conference, evaluating up to six proposals, participating in up to four negotiation sessions, and finalizing an agreement with one proposer. We have budgeted to attend a total of up to six City Council meetings during the process. If we are requested to change previous direction and split the Integrated residential and commercial RFP/agreement into 'separate pieces to be proposed upon (such as collection zones, or _separate residential vs. commercial contracts), our fee estimate will significantly Increase. The workplan on the next page Itemizes hours by,task and staff classification. Hours may be shifted among tasks and staff. September 10, 2019 Page 5 HF&H Consultants, LLC 25B-13 City of Santa Ana Scope of Work Solid Waste Consulting Services Solid Waste Agreement Competitive Procurement Workplan Task Description S'. VICO P,�sld..I/ Sr. P,.I.t rJanagor staff T.t.1 Hour. T. 'pr-pa-ro and Issue Request far Proposals Prostd.nt 1:2 '-o A. Revise clocnerento up to bw Unnes based an dliftUan from City staff 13. Attend first Council meeting to consider RFP package (CC Mtq 01) C. update docurnents based on Council direction D. Attend Second Council Meting to approw RFP package (CC Mlq 92) E. Finalize docurrounto based on Counucil cormew F. Solcltpmpmls G. Prepare far and attend proposere conference H. Prepare addenda 24 6 a 5 4 1 2 4 60 5 8 5 8 2 4 a 40 - a - 4 - 2 144 10 24 10 16 3 6 14 63 121 M 227 Subtotal: Took I Hours 2. RoVI" and Evaluate Propor"Is' 'ReAm A. prop m" Is for can Islatenwea B. Evaluate cwpbt. proposals (mradcrourn of s14 C. Evaluate proposed rates and operating assumptions D. Prepare fogowup questions for propose, F Review responses and clarify unresolved Issues F. InterJewixoposers G. Control references for reconnnanded Proposer K Prepare draft evaluatlon report I. ReAm City conirrents and prepare Onal evaluatfort report J. Attend First My Council nnocRJng to consider contacbDr for negalattons (CC Kit 03) K. If required, gaLhor and provide addlIonail InIonradlon to respond to Council Inquiries L. Attend Second City Counall mating to WW contractor for negotiations (CC MtU 94) 1 a a a 4 a 1 Is 4 5 6 6 24 2 a a 8 2 24 8 5 8 5 Go 24 8 a - 0 Is 2 4 102 24 22 20 is 11 so 12 10 20 IS 03 106 130 319 Subtotal: Took2 Hours 3. Negotiate Final Agreement and Prepare a Now Agroannont A. Prepare for and participate In up ta four negoiaung sessions B. PrepamreMwdporVmsofAgmemnt(uptD3rovIslons) C. Attend First Council Mating for consideration of final agroorrann (CC Nag US) D. Prepare additlonwil analysts If requested! by Clty Council E. Attend Second Council meeting for approval of final agrearrent (CC Mit; as) 24 12 5 a 5 32 24 5 a b 4 as 38 10 20 IS 54 74 4 132 Subtotal: Task 3 Hours Total Hours for Remaining Tasks ISD 300 188 67a Hourly Rate $ 288 S 2S3 $ 181 Subt.1.1; Fees for fternalning Work to be Performed $ 64,720 $ 75,900 $ .028 t 1134,648 Saps Bur I d ses ..... ..... S 420 $ 165,068 Remaining rj'I Work 071311201210 ........... �$30 802 $ 134.266 Budget AdjuBlurnentM (1) Exchdastil.15M for translation aubconarawbrappned to contingency. (2) Budget adjustment Is net of$20.GOD client service acrju3taxint, City's contingency 13 separate from IN5 mount September 10, 2019 Page 6 HF&H Consultants, LLC 25B-14 'Solid Hourly Rates Hourly rates through December 31, 2019 for professional and administrative personnel are listed below. Rates will adjust each January 1 by the annual percentage change In the CPI-0, (Los Angeles -Long Beach -Anaheim). Position Senior Vice President/President Senior Project Manager Project Manager Senior Associate Associate Analyst Assistant Analyst Administrative Staff Expenses will be billed as follows Automobile Travel Document Reproduction (over 20 pages/run) Facsimile, Telephone Postage, Overnight Mail and Couriers Schedule Rate $288 $253 $219to $235 $181to.$201 $129to $165 $119 $98 Prevailing IRS mileage rate 15 cents per page (black & white) 75 cents per page (color) No charge Actual DATE ACTIVITY September 17, 2019 City Approves Consulting Amendment September to December 2019 Update Draft RFP and Agreement January 2020 Present RFP Package to Council for Approval February 2020 Finalize and Release RFP June 2020 Proposals Due (4-month proposal preparation period) July - December 2020 Evaluate Proposals and Interview Proposers January 2021 Council Selects Contractor(s) for Negotiation February to May 2021 Negotiate and Prepare Final Agreement June 2021 Award by City Council Summer 2021 Proposition 218 Noticing (45 days in advance of hearing) Summer 2021 Proposition 218 Hearing July 1, 2022 Commence New Services September 10, 2019 Page 7 HF&H Consultants, LLC 25B-15 EXHIBIT B 29200 Von Karman Avenue, Suite 360 Irvine, California 92612 Telephone: 949/251-8628 www.h/h-consultonts.mm August 23, 2019 Ms. Christy Kindlg Project Manager Public Works Agency City of Santa Ana 20 Civic Center Plaza; 4" Floor Reception, Ross Annex Santa Ana, California 92701 Resources Today Robert D. Hilton, Emeritus John W. Famkopf, PE Lath B. Ezzet, CMC Richard J. Simonson, CMC Marva M. Sheehan, CPA Rob C. Hilton, CMC Re: Scope of Work and Fee Estimate to Negotiate an Extension of the Solid Waste Agreement with Waste Management Dear Ms. Kindlg: As the City requested at my meeting with you and the City Manager on July 8, 2019, we have developed the attached scope of work and fee estimate to assist the City of Santa Ana (City) In negotiating a one- year extension of the solid waste agreement with Waste Management (WM) to June 30, 2022. If you have any questions, please contact me at (949) 252-8902, lezzLt@hfh-consultants.com. Very truly yours, HF&H CONSULTANTS, LLC Cl�i/';' Lalth Ezzet, CMC Senior Vice President 25B-16 City of Santa Ana Scope of Work Solid Waste Consulting Services SCOPE OF WORK Background The City of Santa Ana (City) contracts with Waste Management (WM) for exclusive residential and commercial collection services, Including permanent and temporary roll -off and bin service (excluding temporary construction and demolition debris service), and construction and demolition debris which is generated from Citygovernment operations, The City recently exercised Its option to extend the term of WNI's agreement to June 30, 2021. The City desires to further extend the agreement for one additional year to June H, 2022,in order to accommodate the city's desired timeframe for the competitive RFP' process, and to do so will require a mutual agreement between the City and WM as we understand the City does not have a unilateral option to extend it further in Its sole discretion. As described below, certain regulatory requirements will need to be addressed In the extended agreement, and it is anticipated that rate adjustments for regulatory changes related to organics services will need to be negotiated with WM. Regulatory Requirements and Background The following regulations should be addressed in the Citys extended solid waste agreement. AB 1594: Assembly Bill 1594, was signed by Governor Brown in 2014, and includes the following provisions: o As of January 1, 2020, the use of green material as Alternative Daily Cover (ADC) does not constitute diversion through recycling and will be considered disposalfor purposes of measuring a jurisdiction's 50 percent per capita disposal rate. Yard Waste Diversion Reouirements In Current Agreement Section 14(a)(3) of the City s agreement with WM states: Ward Waste Collection and Recycling Plastic Carts: The contents of the plastic carts containing Yard Waste will be transported to a Composting Facility which meets oil state, federal and local laws for Yard Waste Diversion and which Is acceptable to the City. Contractor shall be responsible to ensure that the Yard Waste collected by Contractor is diverted in compliance with CIWMA and the City's SRRE." City's 2017 Electronic Annual Report (EAR) to CalRecvcle— "Green Material ADC" Although, the agreement requires WM to transport yard waste to a composting facility, the City's EAR, and CalRecycle's Disposal Reporting System, Identify that yard waste collected by WM is being diverted as ADC. The City/WM reported via the 2017 Electronic Annual Report to CalRecycle: 'The City's hauler, Waste Management, is currently exploring options which include in -county and out -county solutions, including utilizing OC Recycle's composting pilot programs, now in the August 23, 2019 Page 1 HF&H Consultants, LLC 25B-17 City of Santa Ana Scope of Work Solid Waste Consulting Services second phase at all County landfills. In addition, Waste Management Is securing third -party private solutions, such as composting facilities out of county." As reported by CalRecycle, 32,603 tons of yard waste were used as Alternative Daily Cover In 2017, and 29,332 In 2018, If those tons were counted as disposal, this could reduce the City's state -calculated diversion rate by approximately 4 percentage points for 2017 (data to accurately calculate the 2018 Impact is not yet available). SO 1383: In September 2016, Governor Brown signed Senate Bill 1383 establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants in various sectors of California's economy. As It pertains to Jurisdictions, SB 1383 establishes targets to achieve a 50 percent reduction In the level of the statewide disposal of organic waste from the 2014level by 2020, a 75 percent reduction by 2025, and establishes an additional target that not less than 20 percent of currently disposed edible food is recovered for human consumption by 2025. The definition of organic waste in SB 1383 Is expanded to Include: o Food waste o Yard waste o Landscape and pruning waste o Applicable textiles and carpets o Wood and lumber o Fiber o Manure o Biosollds o Digestate and sludges August 23, 2019 page 2 HF&H Consultants, LLC 25B-18 City of Santa Ana Scope of Work Solid Waste Consulting Services 5B 1383 Tlmellne SB 1383 TIMELINE Jurisdiction shall Implement an organksrerycling program for ALL generators Unciuding residential) V Jurisdiction shall take progressive enforcement actions against non -compliant organics generators, haulers, and processors State to achleve76% reduction In organics disposal and recoverM of disposed edible food for human consumotion On December 18, 2018, the City Council approved an amendment to the Fourth Amended and Restated Agreement with WM, which among other Items, included a commercial organics rate structure where WM charges customers with organics service 50% of the refuse rate for comparable service. The City reimburses WM for the costs of the organic service not covered by the customer rates. Additionally, the City Is required to offer an organics program to residential customers starting January 1, 2022, and this will require the City to negotiate an, adjustment to the residential rate with WM for residential organics collection (including food waste), The new program will have been In place for six months forsix months from January 1, 2022, through the desired term of the extended agreement, June 30, 2022, Study Objective The project objective is to assist the City In negotiating a one-year extension to the solid waste agreement with WM which will Incorporate programs to comply with AB 1594 and SB 1383 as described above. August 23, 2019 Page 3 HF&H Consultants, LLC 25B-19 City of Santa Ana Scope of Work Solid Waste Consulting Services Scope of Work Task 1 Review Waste Management's Proposed Rate Adiustment for Yard Waste Collection and Processing to Comply with the Requirements of AB 1594 Historically, CalRecycle permitted Jurisdictions to use yard waste and landscaping waste as alternative daily cover (ADC) on landfills for vector and erosion control, and odor mitigation, and jurisdictions received diversion credit for this use. Beginning January 1, 2020, yard waste used as ADC will Instead be considered disposal In terms of measuring a Jurisdiction's annual 50 percent per capita disposal rate. To receive diversion credit forthis waste stream jurisdictions must divert this material in methods as defined by CalRecycle as highest and best use of the material, such as composting and other beneficial uses. Waste Management currently diverts yard waste collected In the City as ADC at the Orange County Landfills (OC Landfills). The OC Landfills do not charge haulers for yard waste used as ADC: WM Is required to perform processing of the yard waste (removal of contaminants, chipping and grinding) prior to delivery to the OC Landfills, however, WM may Incur additional costs to divert yard waste from landfilling as required by AB 1594. These costs may Include, but are not limited to, additional pre- processing of the yard waste including enhanced screening for contaminants, transportation costs if yard waste must be taken to facilities other than OC Landfills, and composting or other processing related costs. To determine the reasonableness of the AB 1594 rate adjustment that may be requested by WM, HF&H will: 1. Review material provided to the City by WM regarding Its proposed yard waste diversion plans, Including supporting cost Information made available by WM. 2. Meet with City staff and/or WM representatives to discuss proposed plans. 3. Request additional financial and/or operating data to confirm the reasonableness of the proposed rate increase. 4. Negotiate the rate Increase for the diversion of yard waste. Task Review Waste Management's Proposed Rate Adlustment to Implement a Residential Food Waste Diversion Program SB 1383 requires that City's provide food waste diversion programs for residential customers starting January 1, 2022. Therefore, WM's proposal to provide this service will be based Incurring the costs of providing a compliant program for six months until the proposed extension period terminates on June 30, 2022. It is our understanding that WM has proposed to co -collect food waste with yard waste from residential customers. August 23, 2019 Page 4 HF&H Consultants, LLC 25B-20 City of Santa Ana Scope of Work Solid Waste Consulting Services To determine the reasonableness of the SB 1383 residential rate adjustment requested by WM, HF&H will: 1. Review material provided to the City by WM regarding Its proposed residential food waste collection program, Including supporting cost information made available by the waste hauler, 2. Review relevant publicly available rate documentation from the limited number of Orange County cities that have Implemented a residential food waste collection program. 3. Meet with City staff and/or WM representatives to discuss proposed plans. 4. Request additional financial and/or operating data toconfirm the reasonableness ofthe proposed rate adjustment. 5. Negotiate rates and terms for residential food waste collection. Task 3 Prepare Contract Amendment HF&H will prepare a draft contract amendment based on the negotiated rate and terms. HF&H will revise the draft once based on review by City staff, and the City Attorney will be responsible for finalizing it according to City form. Fees We will perform the scope of work based on time and materials, not to exceed $50,000 without prior written City authorization. HF&H will bill the City based on the number of hours worked multiplied by our hourly billing rates, plus expenses Incurred. Payment Is due within 30 days of invoicing. Hourly Rates Hourly rates through December 31, 2019 for professional and administrative personnel are listed below. Rates will adjust each January 1 by the change In the Consumer Price Index Position Senior Vice President/President Senior Project Manager Senior Associate Associate Analyst Assistant Analyst Administrative Staff Exoenses will be billed as follows Automobile Travel Facsimile, Telephone Postage, Overnight Mall and Couriers Rate $288 $253 $181 to $201 $129 to $165 $119 $98 Prevailing IRS mileage rate No charge Actual August 23, 2019 Page 5 HF&H Consultants, LLC 25B-21 25B-22