daly city city councilmanager/...• organics processing for pre-identified large generator food...

Solid Waste RFP Process and Evaluation

Daly City City Council November 17, 2014

HF&H Consultants, LLC November 17, 2014

Overview

1. Collection proposals 2. Post-Collection proposals and combined 3. Collection and diversion services 4. Public outreach and education 5. Key contract features 6. Rate Impacts 7. Final pricing 8. Transition 9. Conclusions

1 Managing Tomorrow’s Resources Today


Collection Proposals • Current contract ends July 1, 2015. • Initiated competitive process to maximize

competition of ideas and cost. • Three collection proposals were received

– Proceeded with Allied ($11,372,758) and Recology ($12,096,603) through a Best and Final Offer to improve their proposals

– Did not proceed with SSFS Co. While highly qualified with a strong technical proposal, cost was $13,951,534

See Report pages 5-7 and Figures 2 and 4 for added detail.

Managing Tomorrow’s Resources Today 2


Post-Collection and Combined Post collection proposals: transfer (2), processing (7), and disposal proposals (3). Selected based on price and, where price was not significant, contracting arrangements.


See Report pages 5, 8, and Figures 3 and 7 for added detail.

Collection Contractor Post-Collection Services Allied Waste Services • Blue Line Transfer Station (transfer and recycling)

• South Bay Recycling (recycling) • West Contra Costa County Landfill (composting) • Ox Mountain Landfill (disposal)

Recology, Inc. • Blue Line Transfer Station (transfer and recycling) • South Bay Recycling (recycling) • South Valley Organics (composting) • Potrero Hills Landfill (disposal)


Key Collection Services


Allied Waste Services Recology

Single Family*

• Weekly, curbside solid waste, recyclables, and organics (including food scraps) collection

• Expanded single-stream recyclables accepted • Curbside holiday tree collection • One on-call bulky item collection annually • Curbside used motor oil and cooking oil collection • Curbside household battery and CFL collection

• Weekly, curbside solid waste, recyclables, and organics (including food scraps) collection

• Expanded single-stream recyclables accepted • Curbside holiday tree collection • One on-call bulky item collection annually • Curbside used motor oil and cooking oil collection • Curbside household battery and CFL collection • Drop-off locations for household batteries, TVs, and e-waste at

no charge

Multi-Family**

• At least weekly solid waste and recyclables collection • Organics (including food scraps) collection to apartment

complexes (under 50 units) and condominiums with centralized collection

• Two-stream collection for large apartment complexes (over 50 units)

• Valet service available for fee • Holiday tree collection • One on-call bulky item collection event per unit per year

• At least weekly solid waste and recyclables collection • Organics (including food scraps) collection to apartment

complexes (under 50 units) and condominiums with centralized collection

• Valet service available for fee • Holiday tree collection and optional on-site mulching of trees to

use for landscaping • One on-call bulky item collection event per unit per year

Commercial • At least weekly solid waste and recyclables collection • Organics (including food scraps) collection upon request

and expanded to targeted organics-generating businesses

• At least weekly solid waste and recyclables collection • Organics (including food scraps) collection upon request and

expanded to targeted organics-generating businesses

Other

• Kitchen pails provided for residential food scraps • “Good Job” notices to reward proper materials handling • Cooking Oil Drop-Off • Community Reuse Event • Recycling totes • On-call HHW collection available to be added later

• Kitchen pails provided for residential food scraps • Split-body trucks for residential solid waste and recyclables

collection • Recycling “buddies” • On-call HHW collection available to be added later

*Includes multi-family properties with individual, per-unit service. **Includes larger apartments and other multi-family complexes with centralized collecti


Diversion Services


Allied Waste Services Recology

Start-Up

Advertising and Print Materials • Announcement of New Services and Subscription Mailer • Notices for Change in Collection Days • Press Releases and Advertisements • Service Brochures, All Sectors

Delivery of Special Containers • MFD Recycling Totes • MFD “Green Your Kitchen” Kits • MFD Battery Buckets

Advertising and Print Materials • Announcement of New Services and Subscription Mailer • Notices for Change in Collection Days • Press Releases and Advertisements • Public Access Video • Recycling Blitz

Kick-Off Event • Community Picnic

Ongoing

Scheduled Customer Correspondence • Quarterly SFD Newsletters • Annual MFD Newsletter • Annual Commercial Newsletter

As-Needed Customer Correspondence • Rate Change Notification • Courtesy/Non-Collection Notices

Sector-Specific Visual Aids and Educational Materials • Tenant Move-in/Move-out Guide • AB 341 Compliance Outreach • Recycling Representatives • Commercial Waste Audits and Technical Assistance • Commercial Recycling Workshop • Janitorial and Food Service Employee Training Program

Online Presence • Website

Scheduled Customer Correspondence • Annual Service Brochures • Bi-Annual Newsletters

As-Needed Customer Correspondence • Courtesy/Non-Collection Notices • Topic-Specific Brochures/Flyers

Sector-Specific Visual Aids and Educational Materials • Tenant Move-in/Move-out Guide • AB 341 Compliance Outreach • MFD and Commercial Posters • MFD and Commercial Mandatory Recycling Notices • Commercial “How To” Guide to Food Scrap Collection • Commercial Desk-side Recycling Containers

Online Presence • Website • Social Media

Other

Community Engagement • Outreach to Community Groups • Green Business Program • Community Events • Seal of Sustainability Awards

School Programs • Education in Daly City Schools • School Recycling Champions • School District Recycling Committee • Annual School Recycling Contest

Community Engagement • Outreach to Business Groups • Recology Volunteer Events • Compost Giveaways • Environmental Days • Coats for Kids Collection Drive • Special Event Boxes

School Programs • Education in Daly City Schools • High School Internship Program • Junior Recologist Program


Outreach and Education


Allied Waste Services Recology Daly City Residential

• Initial and ongoing targeted outreach (see Figure 9). Commercial

• Initial and ongoing targeted outreach (see Figure 9). • Dedicated “Recycling Representatives” to be responsible for AB

341 education and enforcement with multi-family and commercial customers.

• Outreach to businesses with less than 4-cubic yards of service to ensure recycling containers are onsite and being utilized.

• Targeted assistance to the top 50 volume-generating businesses to increase recycling and reduce and prevent waste.

• Identification of and outreach to all restaurants to encourage participation in food scraps recycling.

• Coordination with schools to ensure proper recycling practices and encourage implementation of food scraps recycling.

General • Promotion of an interactive diversion calculator that allows

businesses to calculate diversion rate, associated greenhouse gas reductions and cost savings.

Residential • Default 96-gallon residential recyclables cart delivered at roll out

along with new outreach material to increase recycling. • Food scraps added to organics, and highlighted in new outreach

material. Commercial

• Expansion of the existing commercial food scraps pilot program. • Organics processing for pre-identified large generator food

waste/organic accounts with compactors. General

• Targeted “right sizing “of recycling containers in general, and increased levels of service will lead to additional recyclables capture.

• Recycling of materials not previously recycled: batteries, mattresses, Curbside Motor Oil, Bulky Goods, Oil Filters, Environmental Day Material, Cooking Oil, CFL Light Bulbs, Cell Phones, Reusable Items-SVPD Trailers for large MFD‘s.


Key Contract Terms


Issue Allied Recology Start Date February 1, 2016 February 1, 2016 Base Term 10 years 15 years Extensions 3 years at City discretion 3 years at City discretion Vehicles CNG Diesel, phasing to CNG Performance Standards/Penalties

Quality of service for collection and customer service

Quality of service for collection and customer service

Diversion Guarantees 44% of collected material. Dates for reaching diversion goal, with penalties: 2017 - 30% 2018 - 33% 2019 - 36% 2020 - 40% 2021 - 43%

49% of collected material. Dates for reaching diversion goal, with penalties: 2017 - 33% 2020 - 42% 2023 - 45% 2025 - 48%

Labor Requirements Compliant Compliant Cost Controls Defined “allowable costs”.

Protection against significant cost increases due to Contractor’s faulty assumptions.

Defined “allowable costs”. Protection against significant cost increases due to faulty assumptions.


Final Pricing


On an annualized net present value basis, Recology averages $500,00 /year less than Allied.

Allied Recology Current

1 Total Collection Cost 11,594,268$ 10,287,936$ N/A2 Post Collection Cost 2,591,884$ 3,322,549$ N/A

3Total Contractor Compensation 14,186,152$ 13,610,485$ N/A

4 Preliminary Revised City Fees N/A5 Mussel Rock LF Fee 400,000$ 400,000$ N/A

6 Mussel Rock Transfer Decommissioning Fee -$ -$ N/A

7 Accounting Clerk 94,320$ 94,320$ N/A8 Franchise Fee (13.5%) 2,291,172$ 2,201,328$ N/A9 Total Fees 2,785,492$ 2,695,648$ N/A

10Total Revenue Requirement, 2014 $ 16,971,644$ 16,306,133$ 16,694,278$

11*Total Revenue Requirement, 2015 $ 16,971,644$ 16,306,133$ 17,339,197$

12Variance ($2015) Proposals to Revenues at Current Rates -2.1% -6.0% N/A


Rate Impacts


Company Rate Period 1 (Years 1 and 2)* Rate Period 2 (Years 3 and 4) Rate Period 3 (Years 5 and 6)

Allied No Reserve With Reserve

4% or 6%

Review of allowable costs, and up to 10% adjustment for the two years, plus changes in City fees or changes in law.

6.0% CPI

Recology No Reserve With Reserve

0% or 6%

6.5% (CPI plus 0,5% for CNG phase-in)

Review of allowable costs, and up to 10% adjustment for the two years, plus 2.2% for CNG phase-in, and changes in City fees or changes in law.

* Assumes CPI equals 3 percent. Rate Period 1 adjustments also reflect actual labor increase per labor agreements and any change in depreciation from proposed, to the extent they exceed CPI.


Transition • Either selection will result in a transition • Transition pitfalls:

– Equipment arrives late – Container roll-out problems – Inadequate customer response

• Strong contract management will be required regardless

• If Recology is selected - current agreement requires strong transition assistance by Allied


Presenter

Presentation Notes

1st bullet: new services and containers, changes to collection days 2nd a: trucks, etc 2nd b: containers not in place on time 2nd c: phone and staffing system issues


Conclusions Two choices • Choose Recology if City:

– Wishes to receive diversion programs designed to achieve higher diversion levels

– Wishes to draw on successful performance in a comparable urban environment (i.e., San Francisco)

– Pay less – Change contractors and disposal sites

• Choose Allied if City: – Is satisfied with Allied’s past performance (supplemented by

an added Municipal Services Manager contract management and contract compliance)

– Wishes to avoid changing contractors and disposal sites – Is willing to accept lower levels of diversion – Is willing to accept higher costs



Allied’s 15 Year Proposal



Disposal Comparison Detail


Mussel Rock Transfer to Ox

Mussel Rock Transfer to Ox

(2015 Escalation)Allied's Own Rate

Allied's 3rd Party Rate

Transfer Blueline n/a n/a n/a $12.39 $12.39Transport Blueline n/a n/a n/a $14.22 $39.94Transfer Subtotal n/a n/a $0.00 $26.61 $52.33Contractor Rate $37.53 $39.11 $33.77 $68.67 $13.62Fees - County $9.83 $9.83 $9.83 $9.83 $6.48Fees - State $1.40 $1.40 $1.40 $1.40 $1.40Fees-Subtotal $11.23 $11.23 $11.23 $11.23 $7.88Disposal Subtotal $48.76 $50.34 $45.00 $79.90 $21.50TOTAL COST (per ton) $48.76 $50.34 $45.00 $106.51 $73.83

Ox Mountain Current Rates Ox Mountain Proposed

Potrero Hills


Rate Adjustment – First 6 Years


Current 32 gallon rate

Cumulative Rate Impact

Average Impact

Allied 25.58$ -2.1% 25.04$ 6.0% 26.55$ 6.0% 28.14$ 6.0% 29.83$ 14.2% 2.4%Recology 25.58$ -6.0% 24.05$ 6.0% 25.49$ 6.5% 27.14$ 8.2% 29.37$ 12.9% 2.2%

Reduction Based on Proposal Price

Rate Period 1 Rate Period 2 Rate Period 3

Company and Term Annualized Net Present Value Cost

Allied 10 Years + 3 Year Extension

$14,546,000

Recology 15 Years + 3 Year Extension

$14,033,000

Net Annual Savings $513,000

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