20 Staff Report - West Valley Solid Waste Management~pW N 06
~~S~GASps
DATE:
TO:
FROM:
SUBJECT:
COUNCIL AGENDA REPORT
January 10, 2006
MEETING DATE: 1/17/06
ITEM NO.o
MAYOR AND TOWN COUNCIL
DEBRA J. FIGONE, TOWN MANAGER
INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
RECOMMENDATION:
For information only.
BACKGROUND:
The Town contracts for solid waste collection and disposal services through the West Valley Solid
Waste Management Authority (Authority), a j oint powers agency consisting of the following member
municipalities: Town of Los Gatos, City of Campbell, City of Monte Sereno, and City of Saratoga.
The Authority Board of Directors includes one Council representative from each agency;
Councilmember Glickman is the Los Gatos Boardmember.
The collection services contracts that the Authority holds with Green Valley will terminate on
February 28, 2007. As Council has discussed at previous meetings, the Authority has adopted a
procurement process in order to have new contracts in place for March 2007. The Authority released
a Request for Proposals for Solid Waste Management Collection Services (RFP) on September 8,
2005, and five proposals were received by November 15, 2005. Council reviewed the draft RFP at
its August 15, 2005 meeting.
DISCUSSION:
The purpose of this report is to provide Council with information about the proposals received, about
the services proposed in those documents, and about the Authority's draft schedule for the remainder
of the contract procurement process.
PREPARED BY: Regina A. Fa unity Services Director
N:\CSD\TCRPTS\2006 TCRPTS\SWM Procurement JanI7.wpd
Reviewed by: 25J -Assistant Town Manager Town Attorney Clerk Administrator
Finance Community Development Revised: 1/11/06 10:44 am
Reformatted: 5/30/02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
January. 10, 2006
Process
At its December 15, 2005 meeting, the Authority Board received a preliminary analysis of the
proposals for completeness and responsiveness, as well as a summary of the proposals. Also at that
meeting, the Authority Board heard summary presentations from each of the proposers. During the
week of December 19, Authority consultants met with proposers to ask follow-up questions and seek
clarification of aspects of their proposals.
A meeting was held with Authority member agencies' Town/City Managers on January 3 to discuss
the proposals and answer any questions. The Authority Board's procurement committee met January
4 to discuss the additional information gathered by the Authority consultants and to provide direction
to perform additional analysis prior to the next Authority Board meeting, scheduled for February 2.
Description of Proposers
Following is a summary of the five companies that submitted proposals in response to the
Authority's REP:
Name
Parent Company
Description
Allied Waste (AWI)
Allied Waste
Second largest solid waste
company; similar services to 38
agencies in N. California
Green Valley Disposal
Waste Management
Largest solid waste company;
Company (GVDC)
current contractor; service to
numerous N. California agencies
Norcal Waste Systems
Norcal Waste Systems
Tenth largest solid waste
(Norcal)
company; services to 41
California agencies
West Valley Collection &
a joint venture of. Green
Sixth largest solid waste
Recycling (WVCR)
Waste Recovery and Green
company; service to City of San
Team of San Jose (dba of
Jose, other N. California
Waste Connections, Inc.)
agencies
West Valley Industries
a joint venture of: Pelligrini
Twenty-third largest solid waste
(WVI)
Group, South San Francisco
company; service to SFO and
Scavenger Group, and
Stanford, other N. California
Independent Investor's Group
agencies
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
January 10, 2006
Non Responsive Proposal
At its December 15 meeting, the Authority rejected the proposal of Green Valley Disposal Company
(GVDC) as nonresponsive to the RFP, for the following reasons:
GVDC did not present categories of expense (e.g., wages, overtime, benefits, fuel,
maintenance, depreciation) and operational information (e.g., number of routes, hours, and
employees) as requested by the RFP. Lack of this information makes it impossible to
understand, evaluate, or compare its proposal to others.
GVDC proposed a substantially different compensation mechanism than that set forth in the
RFP. This change would be disadvantageous to the Authority during times of low inflation,
in the event of change in law rate adjustments, and when it attempted to negotiate an
extension to the agreement. The change in compensation terms makes it impossible to
compare the proposal to others.
At the meeting, GVDC was allowed the opportunity to comment, and declined to, change any of the
terms of its proposal. The Authority Board directed staff to continue its analysis of the other four
proposals.
Comparison of Services
One of the key goals of the RFP is to develop a package of services that maximizes efficiency,
minimizes cost, and provides good customer service to residents. As discussed by Council at its
August 15, 2005 meeting, the RFP called for some changes in the collection services that Los Gatans
receive now, including the following:
Automated collection. The hauler would provide standardized collection containers to
residents, for automated collection of trash, recyclables, and yard waste. Residents would
not provide their own containers. A process for recycling old solid waste and recyclables
containers would be put in place by the hauler.
Commingled recyclables. All household recyclables would be collected together in one
large, mechanically collected toter. Recyclables would no longer be sorted between several
small bins by residents.
Oil and Battery Collection. A drop-off center for disposal of used oil and household batteries
would be provided, rather than collection at curbside. In 2004, 3300 gallons of oil and 800
oil filters were collected curbside.
PAGE 4
MAYOR AND TOWN COUNCIL,
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
January 10, 2006
Following is a brief summary of key services proposed by each company:
Service
Allied
Norcal
WVCR
WVI
Residential
single purpose
single purpose
split-body trucks
single purpose
Collection
trucks; one pass
trucks; separate
collecting both
trucks; separate
for trash, one
routes for trash,
trash and green
routes for trash,
pass for
recyclables, and
waste, separate
recyclables, and
recyclables,
green waste
single purpose
green waste
separate route
trucks for
for green waste
recyclables
Residential
up to one 96-
unlimited carts
three 96-gallon
three 96-gallon
Green Waste
gallon cart for
and collection at
carts at no
carts at no
no additional
no additional fee
additional fee;
additional fee;
fee; unlimited
can provide
unlimited extras
service with
unlimited
in paper bags
customer's own
service for
containers
additional cost
Holiday Trees
curbside
curbside
curbside
curbside
Recyclables
as listed in RFP,
as listed in RFP
as listed in RFP
as listed in RFP,
Collected
except: milk and
added: textiles,
except: plastic
juice cartons
polystyrene,
film
added: aerosol
used oil and
added: aerosol
cans, small
filters
cans, small
appliances; pots
appliances, pots
and pans, used
and pans, empty
oil and filters
latex paint cans
Annual
materials
residents to
materials
materials
Cleanups
collected
bring materials
collected
collected
curbside, on
to debris boxes
curbside, on
curbside, on
dates to be
to be placed in
dates to be
dates to be
negotiated
varying
negotiated
negotiated
locations, one
every other
Saturday
Commercial
front-end loader
front-end loader
front-end loader
front-end loader
Collection
trucks
trucks
trucks
trucks
PAGE 5
MAYOR AND TOWN COUNCIL
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACTPROCUREMENT
January 10, 2006
Service
Allied
Norcal
WVCR
WVI
Number of
residential: 26
residential: 24
residential: 21
residential: 28
Routes
commercial: 10
commercial:9
commercial:9
commercial: 10
roll-off. 4.3
roll-off. 5
roll-off. 3
roll-off. 6
Total: 40.3
Total: 36
Total: 31
Total: 44
It is important to remember that each company proposed those services it felt were responsive to the
RFP, and would best address the West Valley area. It will be the job of the Authority to determine
the final package of services, through the contract negotiation process.
Comparison of Financial Proposals
For purposes of analysis, the Authority consultants have divided the cost proposals into two
scenarios: first, yard waste limited and construction/demolition debris (C&D) excluded; and second,
yard waste unlimited and C&D included.
Yard Waste Limited/C&D Excluded (in $Millions):
Cost
Allied
Norcal
WVCR
WVI
Contractor Compensation
17.6
16.9
14.3
18.5
Franchise Fees
2.0
1.9
1.6
2.1
Surcharges
1.3
1.3
1.3
1.3
Total Revenue Requirement
20.9
20.1
17.2
21.9
Yard Waste Unlimited/C&D Included (in $Millions):
Cost
Allied
Norcal
WVCR
WVI
Contractor Compensation
18.2
17.9
16.0
19.7
Franchise Fees
2.0
2.0
1.8
2.2
Surcharges
1.3
1.3
1.3
1.3
Total Revenue Requirement
21.5
21.2
19.1
23.2
The Authority has not yet made a determination whether or not it will allow for unlimited yard waste
i
PAGE 6
MAYOR AND TOWN COUNCIL ,
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
January 10, 2006
disposal, or whether it will include C&D collection as part of the franchised waste stream.
Disposal Contract
Also at its'December 15 meeting, the Authority approved a new disposal contract with Waste
Management for disposal at Guadalupe Landfill. 'The term is 15 years, effective January 1, 2006.
The initial disposal rates are lower than the current rates, resulting in some immediate savings. By
implementing the new contract 14 months in advance (the previous contract was to expire in
February 2007), it is estimated that the Authority will save approximately $350,000. Waste
Management agreed to provide the Authority "most favored customer" status for the first 5 years of
the contract. During that time, the Authority has the right to the most favorable customer rate offered
by Waste Management to a comparable city, special district, or private company. The Authority also
has the right to terminate the contract if the San Jose Disposal Facility Tax increases by more than
$5 in any year or $15 over the term of the contract.
It is unclear at this point what effect the lower disposal rate will have, if any, on rates to collection
customers. More information will be available after the annual rate review process in the spring.
CONCLUSION:
At its next meeting, February 2, the Authority Board will select one of the four proposers with which
to negotiate, with the goal of completing negotiations in time for a contract to be approved at the
March 16 Authority Board meeting. Services under the new contract would begin March 1, 2007.
Staff will advertise the February 2 Authority meeting in the Los Gatos Weekly-Times, and in the
What's New! portion of the Town website. Both the Town and the Authority have made public
participation a priority during the entire procurement process.
ENVIRONMENTAL ASSESSMENT:
The recommended action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
No fiscal impact will result from the recommended action.
Attachments:
(None)
PAGE 7
MAYOR AND TOWN COUNCIL
SUBJECT: INFORMATIONAL REPORT ON WEST VALLEY SOLID WASTE
MANAGEMENT AUTHORITY BOARD PROCESS FOR COLLECTION
CONTRACT PROCUREMENT
January 10, 2006
Distribution:
Bob Hilton, Hilton Farnkopf & Hobson, LLC
Scott Hobson, Hilton Farnkopf & Hobson, LLC
RAF:JLM/