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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
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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.
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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;
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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
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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.
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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
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$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
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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
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