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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
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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,
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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
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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
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