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SR-091107-1Ic7_ ,tYa, City Council Report Santa Monica City Council Meeting: September 11, 2007 Agenda Item: 1 I To: Mayor and City Council From: Gordon R. Anderson, Assistant City Manager Subject: Modification to Agreement 8524 (CCS) with Gershman, Brickner and Bratton, Inc. for Operations, Financial and Rate Review of Solid Waste Services. Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a Second Modification to Agreement 8524 (CCS) with Gershman, Brickner and Bratton, Inc. (GBB) in the amount not to exceed $75,000, for a total agreement amount of $503,000. Executive Summary GBB has been engaged with the City since October 2005 for amulti-phased review of solid waste operations, including operations and financial analysis, identification of potential efficiency and the development of Request for Proposals (RFPs) for alternative service delivery options. The scope of their involvement has benefited from additional analysis, conference calls, and in-person meetings and field visits. To date, GBB has delivered a detailed financial analysis, recommended efficiency improvements, developed the RFPs, prepared summaries of responses, cost analysis of responses, assisted in the review of the responses and participated in two rounds of proposer 1 interviews. The process has been extended several months, requiring five additional months of GBB's involvement. The first extension was at the request of proposers and additional extensions were at the request of the evaluation committee as additional analysis was sought and as the evaluation committee interviewed all proposers. Staff is proposing an additional modification to this agreement to facilitate additional involvement of GBB through the Council study session currently scheduled for October 23, 2007. With this modification, the multi-year total for GBB's agreement will not exceed $503,000. Discussion Background At its October 25, 2005 meeting, City Council authorized atwo-phased professional services agreement with GBB. Phase I included conducting an operations and financial analysis to assist the City in determining base line revenue and expenditure data. Phase II of the engagement provides for the development of Request for Proposals to test the market for alternative service delivery methods. On March 14, 2006, City Council held a Study Session reviewing the report from GBB on the strategic review of the solid waste management system. GBB presented a current system description, benchmarking survey, a detailed financial review, operational alternatives, and rate options. At the Study Session, GBB also presented 2 several recommendations to improve efficiencies within the solid waste operations. The presentation report can be found online at: http://santa-monica.orq/cityclerk/council/agendas/2006/20060314/s2006031403-A. pdf. On April 25, 2006, Council was presented with a report which provided a detail of commercial services, a review of potential operational efficiencies and rate proposals for Fiscal Year 2006-07. At that time, Council authorized Phase II, which resulted in the First Modification to the Agreement. On September 12, 2006, Council authorized a modification to GBB's contract in an amount of $240,000 for additional services; including $100,000 fora GBB staff member to work with Solid Waste staff to develop efficiency improvements, to maximize the transfer of municipal solid waste and to maximize the efficiency of truck routing. This scope of work was managed separately through the Solid Waste Management Division, but included within this contract in order to provide a complete portrayal of GBB's involvement with the City. Therefore,. with this modification, GBB's agreement amount related to the study of solid waste cost, rates, operational revievu and RFP development and review is $403,000 over a two year period. Project Status To date, GBB has completed Phase I of their engagement, which included the development of a comprehensive report on the operational and financial review which was presented to Council at the March 14 Study Session. The study session resulted in 3 GBB presenting a variety of recommendations to improve operational efficiencies and a detailed financial analysis. At that time, GBB recommended implementation a plan to build an operating reserve. Phase I involved additional analysis, conference calls and in-person meetings than originally anticipated in the 2005 proposal. GBB is currently engaged in review of the Request for Proposals (RFP) responses to test alternative service delivery methods of commercial and transfer operations. The complexity of the RFPs, four options under four scenarios for transfer and disposal services and six commercial collection options, has required extensive analysis to develop comparison models for the evaluation committee. Additionally, after interviewing the shortlisted proposers on July 31 and August 1, it was decided that the second-tier group should be interviewed on August 29 in order to ensure that all potential options are thoroughly investigated. Additionally, GBB and staff from the City Manager's Office and Finance Departments not involved in the ranking of proposers will be completing extensive reviews of all firms and proposers, not the short-listed firms originally anticipated. GBB's proposed additional scope includes funds in the amount of $15,000 for optional work related to providing detailed financial analysis and participating in tours of proposer facilities. It also includes $20,000 in contingency funds to be able to respond to any additional analysis requested that is currently not anticipated. 4 Budget/Financial Impact Funds in the amount of $75,000 are available in account 01202.555060 for additional services related to the development and analysis of the RFPs. With this modification, the total agreement with not exceed $503,000 for all work performed since contract inception in 2005. Prepared by: Donald P Patterson, Assistant to the City Manager, Management Services Forwarded to Council: . Anderson City Manager 9 G~y'I~ ont Ewel anager 5 Reference Amendments to Contract Nos. 8652 (CCS) and 8722 (CCS).