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SR-9-A (57) 9A -;., .' 'f EPWM:CP:TD:sm:srpaper Council Meeting: October 11, 1994 Santa Monica, California OCT 2 5 .. TO: Mayor and City Council FROM: City staff SUBJECT: Recommendation for City Council to Authorize the City Manager to Negotiate and Execute a Mixed Waste Paper Recycling Collection and Marketing Contract with American Waste Industries, Inc. and Appropriate Funds for Additional Staff and Supplies in the Recycling/Solid Waste Diversions INTRODUCTION This report recommends that the City Council authorize the City Manager to negotiate and execute a three-year mixed waste paper recycling collection and marketing services contract with American Waste Industries, Inc. and appropriate funds for additional staff and supplies in the Recycling/Solid Waste Divisions. The mixed waste paper and cardboard collection will be provided at numerous public locations in multi-family and commercial/industrial zones throughout the City. The contract will commence on January 1, 1995 and extend through December 31, 1997. This new mixed paper waste recycling program is expected to enable the City to meet its state- mandated 1995 waste diversion goal of 25% as well as contribute significantly to the year 2000 goal of 50%. BACKGROUND The California Solid Waste Management Act of 1989 (AB-939) mandates that all Cities reduce their 1990 base-year refuse disposal tonnage 1 1;1 9A OCT 2 5 I9't by 25% by the end of 1995 and 50% by the year 2000. Cities are challenged to accomplish this reduction through a combination of source reduction (the elimination of needless waste before it is created), recycling (the reuse or remanufacturing of materials that would otherwise be disposed of), composting (a controlled decomposition of yardwaste for soil-nutrient reuse) , and transformation (the burning of refuse for energy generation purposes) . Historically, recycling has been selected by municipalities as the primary method in their efforts to achieve these waste diversion goals. The city of Santa Monica I s recycl ing program has been operating since 1982. currently, the citywide diversion rate is approximately 15%. DISCUSSION Staff has determined, through analysis of the waste generation study contained in Santa Monicats Reduction and Recycling Element (SRRE) which was presented to the state in 1992 as the cityts solid waste master plan, that a major expansion of its recycling program into the commercial/industrial and mUlti-family sectors is the best strategy for achieving the next phase of waste diversion goals. Santa Monica I s waste characterization study further shows that composite mixed waste paper (MWP) categories, which include cardboard, high and low grade office papers, junk mail, etc., are the best commodities for the City to target within these sectors. 2 Based on current figures, staff estimates that a minimum of an additional 1,100 tons of waste per month must be diverted from the waste stream in order to achieve the required 25% diversion goal for 1995. In an effort to identify the best course toward this goal, staff drafted a request for proposal (RFP) to solicit private firms interested in providing collection and marketing services for a mixed waste paper (MWP) recycling program for the commercial/industrial and multi-family sectors of the city. The program scope calls for providing a minimum of 350 three CUbic-yard MWP recycling bins with three times per week collection. Requests for proposals were sent to sixteen vendors who were identified through the City's solid waste hauler/recycler permit system as being capable of providing this type of service. The RFP stated the city's policy of encouraging Disadvantaged Business Enterprises to apply for this opportunity. A total of eleven firms responded to the City's RFP. The proposals were evaluated by a reVlew committee comprised of the Director of Environmental and Public Works Management, the Solid Waste Operations Manager, the Waste Reduction Coordinator, and an outside consultant under contract with the City. The proposals were ranked on several key criteria: o Demonstrated experience and success performing similar or equivalent services as those requested by the City; 3 o Completeness and thoroughness with which the proposal addressed the information requirements of the RFPi o Demonstrated familiarity and expertise with operational methods, techniques, and equipment proposed for use in providing the basic services required by the City: o Reasonableness of proposed fees and rates for the services required by the City. o Experience in processing and marketing the quantities of recyclables expected to be collected through the waste diversion services described in the RFP; o Documented ability to provide the necessary collection equipment and collection containers in a manner and according to a schedule that facilitates timely start-up of services requested by the City; o Demonstrated ability to meet all financial obligations, to perform services even in adverse circumstances, and to obtain necessary financing, if appropriate, for the performance of the services requested by the City. After an initial evaluation based on responsiveness to the RFP specifications and initial fiscal-impact analysis, five responders 4 were invited to participate in an in-depth interview and more comprehensive bid evaluation by the selection committee. After the first round of interviews, two firms were identified as clearly presenting the best proposals to the city. Subsequent interviews with these two firms and additional staff analysis demonstrated that American Waste Industries, based in Los Angeles, would provide the required quality and level of services with the greatest financial advantage to the city. American Waste Industries will provide, at no cost to the City, the specified 350 recycling containers with three times per week pick-up as well as additional containers which may be needed to accommodate greater than anticipated participation. The presently favorable scrap value for mixed waste paper and the anticipated continuation of these favorable prices in the foreseeable future will cover all collection and marketing costs for the proposed 3- year contract duration. It is also possible that the contract will result in net payments to the city under a revenue-sharing provision in the proposed agreement. To ensure compliance with the terms of the proposed agreement, American Waste Industries will be required to purchase a $300,000 performance bond, payable to the city, for the duration of the three-year contract. American Waste Industries is a well-established firm with much experience relevant to the type of program the city wishes to implement. staff has checked with both current and past customers of AWI and has received favorable comments. 5 In conjunction with this proposed serV1ce contract, staff will be significantly expanding the City's public education and outreach efforts. This effort will initially entail a significant campaign directed at the commercial/industrial and the mUlti-family sectors to promote the new mixed waste paper recycl ing program. These activities will also be directed, starting in January 1995, at public education and outreach related to the conversion to commingled recycling collection in multi-family and single-family areas as approved by Council in June of this year. The expanded public education, outreach, and recycling program implementation will be accompanied by a more aggressive monitoring and enforcement of existing solid waste, litter control, and anti-scavenging laws as well as an increased focus on overall private hauler compliance with the recently implemented regulations of the city's private hauler/recycler permit ordinance. In order to effectively implement and oversee the new recycling program and adequately address the inspection and enforcement responsibilities of the Solid Waste Management/Recycling Divisions, it is proposed that three new full-time permanent positions be added to the Refuse Fund budget. These three positions are: Waste Reduction Analyst; Sol id Waste/Recyc1 ing Inspector; and Staff Assistant III. Assuming a January 1, 1995 start date for these positions, the additional FY 1994-95 cost to the Refuse Fund is estimated at $70,441 and the full year impact is estimated at $140,882. In addition to these personnel costs, approximately 6 $40,000 will be required during the remaining part of this fiscal year for various one-time expenditure needs associated with the new programs including design and production of brochures, flyers, maps, and other printed public outreach materials; mailing and distribution costs; and advertising costs. All of these additional costs are fully offset by revenues from the recently adopted private hauler surcharge which was implemented to help pay for the expanded business recycling program. BUDGET/FISCAL IMPACT The proposed service contract for commercial/industrial and multi- family sector collection and marketing of mixed waste paper (MWP) will be provided at no cost to the city. In addition, depending on fluctuating MWP commodity scrap values, the City may receive revenue-share proceeds from American Waste Industries. Due to the variable nature of these commodity prices, it is not possible at this time to estimate what the revenues, if any, from the revenue- sharing arrangement will be. The addition of the 3.0 new permanent staff positions to assist in the program implementation, monitoring, inspection, outreach, education, and enforcement activities described above requires the appropriation of $70,441 from the Refuse Fund balance to the Recycling Division's FY 1994-95 salary and wage accounts and the appropriation of various offsetting technical lmplementing accounts. An additional $40,000 for program implementation costs needs to be appropriated to the supply and expense accounts in the Recycling Division budget for FY 7 1994-95. These new costs are fully offset by revenues from the recently adopted private hauler surcharge which was implemented to help pay for the expanded business recycling program. RECOMMENDATION It is recommended that the City council authorize the City Manager to negotiate and execute a contract with American Waste Industries for provision of commercial/industrial and mUlti-family mixed waste paper collection and marketing services for the period January 1, 1995 to December 31, 1997. It is further recommended that the City Council appropriate $110,441 from the Refuse Fund balance, as is detailed in the Budget/Fiscal Impact section above, for expansion of public education and outreach, monitoring, inspection, and regulatory enforcement efforts. Prepared by: Craig Perkins, Director of Environmental & Public Works Management Tom Dever, Solid Waste Operations Manager 8