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SR-6-C (30) C&afrac!JF 7/0h CCS 6C - JAN 1 3 1998 EPWM SWD KAB KAB C \WPWIN\WPDOCS\AWIRE4 WPD Council Meeting January 13, 1998 Santa Monica, California TO Mayor and City CounCil FROM CIty Staff SUBJECT Recommendation to Authorize the City Manager to Negotiate a One Year Sole Source Contract with American Waste Industnes for Collection, Processing and Marketing of Mixed Paper Recyclables from Designated Multi-Family and Commercial Locations within the City of Santa MOnica IntroductlOn ThiS report recommends that the City CounCil authorize the City Manager to negotiate and execute a sole source contract for one year with Amencan Waste Industnes (A WI) A W I will collect mixed paper recyclable matenals at designated locations within Santa MOnica The service Includes processing and marketing the recyclable matenals Under contract with the City, A W I provided these services In Santa Monica from 1994-97 There IS no cost to the City for these serVices Backaround The City of Santa MOnica actively particIpates In planning, Implementing and promotIng recycling activIties The Santa MOnica Recycle program began In January 1981 and was designed to serve the City's unique housing configuratIon through a combination of curbside/alley recycling collection for single family homes and drop-off zones located In 1 6C JAN 1 3 1998 alleys for the City's multi-family homes Matenals collected through the mixed paper recycling programs Include newspapers, corrugated cardboard, brown paper bags, magazines, office paper, Junk mall and vanous other mixed paper matenals DIScussion In 1994 the City received eleven responses to a Request for Proposals for the operation of a mixed waste paper collection program It IS designed to assIst the City of Santa Monica In meeting the state mandate to reduce solid waste by fifty percent (50%) by the year 2000 as proscnbed In AS 939, passed In 1989 As a result of this competitive process, A W I entered Into a three year contract with the City A W I currently provides service to approximately 350 commercial and multi- family locations within the City of Santa MOnica The contract whIch expired December 31, 1997, Included a three year renewal option However, A W I proposed only a one year renewal A W I proVides all equipment and labor services for the placement of 350 recycling containers In deSignated locations within the City, maintenance and dally collections of containers, transportation of the matenals to a processIng facility, and marketing of the matenals collected Due to the fisk associated with a processing faCIlity and the volatile paper markets, 2 A W I IS willing extend the contract for only one year at no cost to the City Staff has determined that It IS highly unlikely that a more favorable agreement could be obtained from a new bidding process at this time According to a paper fiber trade publication, Fiber Market News. paper stock market prices are collapsing monthly and market sources estimate that paper prices will not climb until next year Other cities are also Impacted by poor market conditions for paper For example, the City of Beverly Hills has experienced difficulty In finding a market for the mixed waste paper waste collected In their programs Currently their crews collect and transport the paper to a Slm! Valley faCIlity and receive $5 per-ton The revenue generated from the sale of paper does not offset the cost of collection and transportation for the City of Beverly Hills Since A W I collects, transports, processes and markets the mixed waste paper collected In our programs at no cost to the City, our overall program cost can remain below that of other cities In our region Budget/Financial Impact There IS no cost to the City of Santa MOnica for these services Should the matenals collected exceed 500 tons per month or the gross receivables from marketing thiS commodIty exceed $25,000 per month, A WI will Issue a payment to the City of Santa MOnica for the materials marketed In excess of these limits Recommendation Staff recommends that the City Council vote to authorize the City Manager to negotiate 3 and execute a one year contract with American Waste Industries for the collection, processing and marketing of mixed paper recyclable materials at designated locations with the City of Santa MOnica Prepared by Craig Perkins, Director of Environmental and Public Works Management Joe Delaney, Solid Waste Operations Manager Kim Braun, Matenals Recovery Superintendent 4