HomeMy WebLinkAbout65A - RFP SOLID WASTE CONTRACTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
OCTOBER 3, 2017
TITLE:
CONSIDER RFP AND NEGOTIATION
OPTIONS RELATED TO SOLID WASTE
CONTRACT SERVICES
(STRATEGIC PLAN NO. 4, 1)
I
OPTIONS FOR CITY COUNCIL CONSIDERATION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1s' Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
A. Direct staff to issue a Request for Proposal for solid waste services and develop alternatives
for continued service delivery effective July 1, 2018.
B. Direct staff to complete negotiations with USA Waste of California, Inc. (dba Waste
Management of Orange County) for a short-term contract extension for City Council
consideration on October 17, 2017.
C. Direct staff to proceed with options A and B concurrently.
STAFF RECOMMENDATION
Staff recommends approval of Option C.
The existing solid waste agreement with Waste Management of Orange County expires on June
30, 2018 (in approximately 8 months). A Request for Proposals (RFP) and transition process for
waste hauling services can take approximately 16 months as illustrated in the attached timeline
(Exhibit 1). Given the timeframe to allow for a timely RFP process to take place, staff
recommends a short-term extension with Waste Management of Orange County to ensure the
continuation of trash collection without disruption of services. The short-term extension will
provide sufficient time for staff to conduct the RFP process.
DISCUSSION
On June 30, 1993, the City completed a Request for
agreement with Great Western Reclamation (succeeded
Waste Management of Orange County) for solid waste
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Proposals process that resulted in an
by USA Waste of California, Inc., dba
collection and disposal. Subsequently,
Consider Options Related to Solid Waste Services Contract
October 3, 2017
Page 2
there were 13 separate Council -approved amendments and resolutions to, among other things,
establish fees, implement the 3 -cart curbside trash collection service, and to extend the
agreement term through June 30, 2018.
Staff began preliminary work toward a new solid waste contract in July 2015. After completing an
RFP process for solid waste consulting services, on December 15, 2015, City Council approved
the hiring of Sloan Vazquez Inc., to assist with preliminary market research and development of a
refuse program in Santa Ana that considered changes in legislation and recycling trends. The
scope of work included a comparison of solid waste service rates and level of service in ten
comparable municipalities in Orange County. In addition to analyzing the services, the consultant
was also tasked with providing an analysis of the options for either a new or extended contract.
Before the RFP process could begin, the City Attorney's Office recommended restating all of the
component amendments of the existing solid waste agreement into a single amended and
restated agreement. This restated agreement would clarify pass-through and impact fees for
tracking and transparency purposes, as well as for compliance with applicable legal
requirements. Staff coordinated with the City Attorney's Office, special legal counsel, and Waste
Management of Orange County to prepare the Fourth Amended and Restated Agreement which
was subsequently approved on June 20, 2017.
At the June 20, 2017, City Council meeting, staff received direction to start negotiations for a one-
year agreement or as otherwise recommended by staff and to return to the Council with results
within 90 -days for further consideration and direction (Exhibit 2). On September 19, 2017, the
City Council discussed staffs recommendation and several Council members noted a preference
to pursue an RFP. Thus, this report addresses both staffs recommendation and the RFP
process.
Negotiation Process Update
Negotiations with Waste Management of Orange County started on June 29th with a kickoff
conference call in which staff reviewed the objectives of negotiations as directed by the City
Council, covered the extension offering process, and schedule for proposal submittals in order to
meet the City Council deadline. In the 90 days leading up to the September 19, 2017, City
Council Meeting, staff finalized and executed the Fourth Amended and Restated Agreement,
negotiated and executed a nondisclosure agreement to facilitate the exchange of confidential and
proprietary information, and received four different proposals for review and negotiation. In
addition, staff held six community outreach meetings to gather community feedback and
comments for consideration in the scope of work of the extension with Waste Management of
Orange County or to include in the RFP process. A timeline of the negotiation process for the
solid waste extension is included as Exhibit 3.
On September 18, Public Works staff received the latest proposal from Waste Management
which is a two-year agreement with the option of a one-year extension at the City's discretion.
This latest proposal requires additional analysis as it provides several key items for the City to
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Consider Options Related to Solid Waste Services Contract
October 3, 2017
Page 3
consider, including continuance of low refuse rates, and compliance with State requirements for
organics (Assembly Bill 1826) and commercial/multi-family (Assembly Bill 341) recycling.
Furthermore, this short-term, proposal would allow ample time to carry out an RFP and
implementation process and limit the disruption of future services. In the event that an extension
of services is not granted, the City may be faced with having to enter into an emergency contract
or a month-to-month agreement, effective July 1, 2018, which may result in higher cost to rate
payers in order to continue services.
Staff recommends completion of the negotiation process, to ensure results are thoroughly
reviewed and available for City Council consideration on October 17, 2017.
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).
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
s
Fre8 Mousavipour
Executive Director
Public Works Agency
FM/MLM/ck
Exhibits: 1. Timeline for Solid Waste Contract Implementation
2. Staff Report and Minutes — June 20, 2017, Council Agenda Item 65B
3. Negotiation Process Timeline
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REQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 20, 2017
TITLE:
AUTHORIZE INITIATION OF A NEW SOLID
WASTE SERVICES CONTRACT PROCESS
AND AMEND AND RESTATE EXISTING
SOLID WASTE AGREEMENT
{STRATEGIC PLAN NO. 41 1
DEPU ANAGER
RECOMMENDED ACTION
EXHIBIT 2
CLERK OF COUNCIL USE ONLY:
APPROVED
El"As Recommended CsgB
❑ As Amended
❑ Ordinance on 11 Reading
❑ Ordinance on 2"d Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize staff to start negotiation of a one-year extension of the current agreement with USA
Waste of California, Inc. (dba Waste Management of Orange County) and return to Council
with results within 90 days for further consideration and direction.
2. Direct staff to initiate a Request for Proposals process for solid waste services to be effective
upon the completion of the one-year extension negotiation.
3. Approve the proposed Amended and Restated Solid Waste Services Agreement with USA
Waste of California, Inc. (dba Waste Management of Orange County).
DISCUSSION
On June 30, 1993, at the completion of a Request for Proposals (RFP) process, the City entered
into an agreement with Great Western Reclamation for solid waste collection and handling.
Subsequently, there were 13 separate Council -approved amendments and resolutions to, among
other things, establish fees, implement the 3 -cart curbside trash collection service, and to extend
the agreement term. The most recent of these amendments was approved on June 1, 2009
(Exhibit 1). The agreement will expire June 20, 2018.
In December 2015, the City Council approved a consultant services agreement with Sloan
Vazquez to assist the City with a solid waste program RFP process. The scope includes a
comparison of solid waste services rates and level of service in ten comparable municipalities in
Orange County. In addition to analyzing the services, the consultant is also tasked with providing
an analysis of the options for either a new or extended contract.
Separately, the City Attorney's office reviewed the current solid waste services agreement and
recommended restating all amendments to the current solid waste services agreement into a
single Amended and Restated Agreement ("Proposed Agreement") and clarifying the pass -
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Authorize Initiation of a new Solid Waste Services Contract Process and EXHIBIT 2
Amend and Restate Existing Solid Waste Agreement
June 20, 2017
Page 2
through and impact fees, for tracking and transparency purposes, as well as compliance with
applicable legal requirements (Exhibit 2).
The Proposed Amended and Restated Agreement is a consolidation of all of the previous
amendments and agreements and identifies a single franchise fee to replace a number of
miscellaneous charges and transfers to the City (i.e., Program Surcharge, Administrative,
NPDES, and other fees added to the cost of services). All of the fees from residential,
commercial, and industrial services will be consolidated and set forth as a single Franchise Fee
of approximately 26 percent (Exhibit 2). The Proposed Agreement does not present any
customer rate or service changes. Waste Management has agreed to the terms of the Amended
and Restated Agreement. The proposed Amended and Restated Agreement action would not
extend,the term of the original agreement, which is June 30, 2018.
Staff is recommending authorization to negotiate a one-year extension with Waste Management
of Orange County to provide sufficient'time to complete the RFP process toward a new, long-
term agreement. As a part of this extension, the City must immediately address existing program
gaps mandated by legislation, which will require modification to the current agreement. Rollout of
the Los Angeles commercial franchise system requires transition of approximately 70,000
commercial accounts over the next nine months to a year and may place a strain on equipment
manufacturing and delivery capabilities (i.e., trucks, bins, etc.), consequently raising the cost of
services to the City. Finalization of County of Orange renewable energy infrastructure plan during
this time could provide lower-cost disposal options not currently available. The agreements with
Waste Management and Ware Disposal for construction and demolition debris collection, and the
Madison Materials Host Fee Agreement will be extended to expire concurrently with the
negotiated extension.
The RFP process will take approximately 15 to 18 months to complete. Staff recommends
releasing the RFP immediately upon completion of the short-term extension negotiation. This will
position the City for an effective and timely rollout of the new contract.
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).
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this item.
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EXHIBIT 2
Authorize Initiation of a new Solid Waste Services Contract Process and
Amend and Restate Existing Solid Waste Agreement
June 20, 2017
Page 3
Executive Director
Public Works Agency
FM/MLMIck
Exhibits: 1. Solid Waste Agreement History
2. Proposed Amended and Restated Agreement
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EXHIBIT 2
RESOLUTION NO. 2017-043 — RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF SANTA ANA APPROVING THE CITY'S STATEMENT OF
INVESTMENT POLICY
MOTION: Solorio SECOND: Martinez
VOTE: AYES: Martinez, Pulido, Sarmiento, Solorio, Villegas (5)
NOES: None (0)
ABSTAIN: None (0)
ABSENT: Benavides, Tinajero (2)
REPORTS
65A. LEAGUE OF CALIFORNIA CITIES VOTING DELEGATE (STRATEGIC PLAN
NO. 5, 1) — Clerk of the Council Office
MOTION., Designate Mayor Pro Tem Michele Martinez as a voting delegate
and select up to two alternates for the League of California Cities' Annual
Conference's General Assembly scheduled for September 15, 2017.
MOTION: Sarmiento SECOND: Villegas
VOTE: AYES: Martinez, Pulido, Sarmiento, Solorio, Villegas (5)
NOES: None (0)
ABSTAIN: None (0)
ABSENT: Benavides, Tinajero (2)
*Councilmember Benavides joined the meeting at 6:46 p.m.
65B. AUTHORIZE INITIATION OF A NEW SOLID WASTE SERVICES CONTRACT
PROCESS AND AMEND AND RESTATE EXISTING SOLID WASTE
AGREEMENT (STRATEGIC PLAN NO. 4, 11 - Public Works Agency
The following spoke on the matter:
• Chip Monaco, representing USA Waste of California, Inc., opined that
elements should be considered and not term of the contract as a driving
force on negotiation matter.
• George Urch, representing Ware Disposal, support matter as proposed.
CITY COUNCIL MINUTES 18
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JUNE 20, 2017
EXHIBIT 2
Jeff Snow, representing Republic Disposal, support matter as proposed.
Council discussion ensued.
Councilmember Sarmiento, requested summary report.
Fred Mousavipour, Executive Director of Public Works, provided highlight of
current provider, noted that consultant hired to draft request for proposal and
estimated timeline established.
Mayor Pro Tem Martinez, questioned the transfer to general fund of surcharge
to subscribers; requested clarification on compliance with enterprise fund
transfers.
Councilmember; Benavides, amended motion to allow for flexibility from one-
year extension.
City Attorney Carvalho, 'commented on Proposition 218 (Prop. 218); City
currently addressing matter.
Councilmember. Solodo, support Smart Program and Request for Proposal
process; need to address all'Prop. 218 matters; council direction to include all
sister contracts.
Mayor Pulido, requested that all affiliated contracts be considered with same
terms.
Staff confirmed that motion includes said provisions.
AMENDED MOTION:
1. Authorize staff to start negotiation of a one-year extension or as
otherwise recommended by staff of the current agreement with USA
Waste of California, Inc. (dba Waste Management of Orange County)
and return to Council with results within 90 days for further
consideration and direction.
2. Direct staff to initiate a Request for Proposals process for solid waste
services concurrently with said actions and upon approval of matter to
be effective upon the completion of the one-year extension negotiation.
3. Approve the proposed Amended and Restated Solid Waste Services
Agreement with USA Waste of California, Inc. (dba Waste Management
of Orange County).
MOTION: Benavides SECOND: Solorio
CITY COUNCIL MINUTES 19
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JUNE 20, 2017
EXHIBIT 2
VOTE: AYES: Benavides, Martinez, Pulido, Sarmiento, Solorio,
Villegas (6)
NOES: None (0)
ABSTAIN: None (0)
ABSENT: Tinajero (1)
PUBLIC HEARINGS
*Mayor Pulido abstained on Agenda Item 75A due to potential conflict of interest due to
campaign contributions
75A. ORDINANCE AMENDMENT NO. 2017-01 TO AMEND CERTAIN SECTIONS
OF CHAPTER 18 AND 21 OF THE SANTA ANA MUNICIPAL CODE (MEDICAL
MARIJUANA COLLECTIVES/COOPERATIVES AND LICENSES) — CITY OF
SANTA ANA, APPLICANT {STRATEGIC PLAN NOS. 3, 2; 3, 51 - Planning and
Building Agency
Legal Notice published in the Orange County Reporter on May 26, 2017.
Item continued from the June 6, 2017 City Council Meeting by a 5-0 vote
(Benavides and Sarmiento absent).
Mayor Pulido opened the Hearing. The following spoke on the matter.
• Jayson Quinones, support matter as proposed; willing to work with
neighborhood; suggested hours of operation be amended as follow: 7 a.m. to
11 P.M.
• Ilya Tseglin, spoke of use of medical marijuana for illnesses.
• Robert Tseglin, support less regulations on uses of medical marijuana.
There were no other speakers and the Hearing closed.
Council discussion ensued.
Councilmember Sarmiento, request matter be reviewed periodically and adjust
as needed; signage, financial audit and other deliverables; hours of operation
amended as proposed by speaker; thanked staff for removing testing and
development component; issue on cultivation and research forthcoming;
proposed ordinance amendments will create economic development
opportunities; staff to review ancillary businesses.
Councilmember Solorio, noted that issues approved by voters in the City and
now industry regulated; expected to generate $1.5 million annually in revenues;
Code Enforcement to cite illegal establishment in Floral Park neighborhood
area; matter has been considered by Public Safety Council Committee.
CITY COUNCIL MINUTES 20
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JUNE 20, 2017
Exhibit 3
Solid Waste Extension Negotiation Progress
• June 23, 2017 —Staff invited Waste Management (WM) to a negotiation meeting on June 29,
2017.
• June 29, 2017 —Staff and Solid Waste Consultant held the negotiation meeting via conference
call per WM request, to lay groundwork for the negotiation process, including the requirements
and timeline. Proposals to be provided for: one-year term, short-term, and alternative -term.
• June 29, 2017 — Data Request worksheets were provided to WM to respond by July 27, 2017 or
sooner for each of the three proposal terms.
• July 10, 2017 —Term sheets for each of the three proposal terms were sent to WM.
• July 14, 2017—Staff began development of Community Workshop presentation, scheduling of
six community meetings, and Workshop Agenda.
• July 26, 2017 —Staff completed development of Community Workshop presentation, scheduling
of community meetings and agenda.
• July 27, 2017—Staff received three proposals for WM without required AB 341 and 1826 rates
for proprietary reasons should the extension negotiation fail and the program be sent out for
Request for Proposal.
• July 28, 2017 —Staff and Solid Waste Consultant began review of proposals.
• July 31, 2017 — Revised Community Workshop meeting schedule.
• August 1, 2017 —Staff sent Community Workshop meeting schedule to Strategic
Communications Manager for review.
• August 2, 2017 — Staff responded to WM with list of items requested but not provided by WM,
and provided dates for discussion of proposals.
• August 2, 2017 —Staff and Solid Waste Consultant made presentation to Downtown Restaurant
Association.
• August 4, 2017 —Staff sent Community Input email draft to Strategic Communications Manager
for citywide distribution.
• August 7, 2017 — Staff and Solid Waste Consultant met with WM for discussion of proposals.
Discussion regarding development of a Non -Disclosure Agreement for WM to facilitate the
exchange of information in current negotiations.
• August 7, 2017 — Staff sends 4th Amended and Restated Agreement to WM for signature.
• August 8, 2017 — Requested information from internal City staff needed by WM for proposal
clarification.
• August 8, 2017 — Staff and Solid Waste Consultant made presentation to Chamber of Commerce.
• August 9, 2017 — City Attorney's office sent Non -Disclosure Agreement for WM review and
approval.
• August 10, 2017 — WM Attorney approves Non -Disclosure Agreement as to form. City Attorney
sends Non -Disclosure Agreement executed by Deputy City Manager to WM for signature.
• August 10, 2017 — WM requests additional time to modify proposals resulting from City input.
Deadline for submission is extended to August 14, 2017.
• August 10, 2017 — WM requests extension to sign 4`h Amended and Restated Agreement.
• August 11, 2017 — Staff receives fully executed Non -Disclosure Agreement from WM.
• August 15, 2017 — Staff receives all requested items from WM, except for completed Data
Requests.
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• August 17, 2017 —Staff requests Data Requests again, in addition to dollar values attached to
individual components in each of the three proposals. Staff again requests signed 4th Amended
and Restated Agreement.
• August 18, 2017 —Staff receives required Data Requests.
• August 18, 2017 —Staff, Solid Waste Consultant and WM meet to discuss methodology and cost
components for organic and SMART fees. WM requested SMART funding requirements and
implementation plan
• August 18, 2017—Staff sent new requests for additional proposal component information.
• August 18, 2017—Staff and Solid Waste Consultant made presentation to Santa Ana Business
Council with Downtown Inc, invited to participate. Meeting was cancelled but direct feedback
was received from two attendees, and the remainder were emailed the presentation and asked
to comment via email.
• August 21, 2017 — Modified Non -Disclosure Agreement sent to WM for signature.
• August 21, 2017—Sent Second Request for additional proposal component information.
• August 22, 2017—Staff receives additional proposal component information from WM, except
for Organics information.
• August 22, 2017 — Staff and Solid Waste Consultant made presentation to Riverview West
Neighborhood.
• August 23, 2017 —Staff and Solid Waste Consultant met to review current proposals.
• August 23, 2017 — Staff and Solid Waste Consultant made presentation to Bella Vista
Neighborhood.
• August 23, 2017 —Staff receives signed 4`h Amended and Restated Agreement from WM and
sends to Clerk for processing.
• August 24, 2017 —Staff, Solid Waste Consultant and WM met to negotiate.
• August 24, 2017—Staff and Solid Waste Consultant made presentation to Com -Link.
• August 29, 2017 —Staff drafted Request for Council Action for 9/19/17 Council meeting, and
revisions continued.
• September 7, 2017 —Solid Waste Consultant followed up with WM on status of their response.
q September 12, 2017 -Solid Waste Consultant provided WM with clarifications on City's
position.
• September 15, 2017 — WM notified Solid Waste Consultant to expect an updated proposal by
September 18, 2017.
• September 18, 2017 — WM submitted fourth proposal to City for review.
• September 20, 2017 —Staff and Solid Waste Consultant began review of fourth proposal.
• September 26, 2017—Staff and Solid Waste Consultant met to discuss fourth proposal.
• September 27, 2017 —Staff, Solid Waste Consultant and WM met to negotiate fourth proposal.
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