SR-112707-8C~_~
City Council Report
City of
~/ Santa Monica
City Council Meeting: November 27, 2007
Agenda Item: ~G
To: Mayor and City Council
From: P. Lamont Ewell, City Manager
Subject: Review of responses to Solid Waste Request for Proposals to provide
commercial collection services
Recommended Action
The City Manager recommends that the City Council:
1) Direct staff to proceed with developing an implementation plan for the Solid
Waste Management Division to be the sole provider for commercial collection
citywide.
2) Direct staff to keep Roll-Off Service an open market activity and implement
permit criteria to establish diversion rates and use of alternative fuel vehicles.
Executive Summary
On October 30, 2007, Council held a Study Session on the results of the Request for
Proposals for Commercial Solid Waste Collection and Solid Waste Transfer and
Disposal Services. The recommendation of the Evaluation Committee was to award
citywide commercial collection services to the City of Santa Monica Solid Waste
Management Division (SWMD). This was based on the conclusion that SWMD provided
the best overall proposal when considering all factors outlined in the RFP. At that time,
Council took no formal action on Commercial Collection and requested greater analysis
and information.
This report provides clarification, additional information and staff analysis related to
commercial solid waste collection services. Specifically, it provides clarification of cost
proposals, an update on efficiencies implemented by the City and a review of Best
Management Practices. With the City as the sole provider of commercial collection
services and the Public/Private Transfer Station partnership, the City has the best ability
to control its waste stream, meet its diversion goals and ensure flexibility in addressing
staffing assignments.
Background
The Commercial Collection Request for Proposals (RFP) requested proposals for the
collection of refuse, recyclables and food waste from commercial establishments in
three sectors of the City: Downtown/Main Street, Outside Downtown/Main Street or
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Citywide. Proposal options included one entity providing the service or a private
company competing with the City. Roll off service was covered under a distinct option of
this RFP. Specific goals articulated in the RFP included:
• Provide efficient and cost-effective commercial collection services to all business
establishments in the City;
• Utilize competition to ensure that the commercial establishments have
commercial collection services that are market driven;
• Maximize the opportunities for recycling by businesses and commercial facilities
and thereby increase their contribution to the City's diversion as mandated by
AB939;
Achieve the sustainability goal of seventy percent diversion;
• Increase the cleanliness and aesthetics of the Municipal Solid Waste (MSW) set-
out areas and containers;
• Reduce the number of individual collection vehicles providing MSW Commercial
Collection service in the City and thereby reduce traffic congestion, particularly in
the Downtown District/Main Street; and
• Reduce air. pollution and the emission of green house gases.
The RFP also highlighted some specific implementation requirements:
• Automation of lifting and emptying containers where practicable;
• Cooperate with the City on the incorporation of waste and recycling containers in
building and area design;
Optimize route structure utilizing geographical information system (GIS) based
computer routing software;
Maximize recovery of recyclable materials;
• Right sizing of service through container selection and collection frequency;
• Requirement to use compressed natural gas (CNG) or Liquefied natural gas
(LNG) fuel (clean fuels, as defined by the Air Quality Management District); and
Increasing the education of waste "best practices" for the commercial sector.
A total of seven companies submitted responses to the Request for Proposals for
Commercial Collection of Solid Waste. Of those, five companies, Allied Waste Services,
Athens Services, City of Santa Monica Solid Waste Management Division (SWMD),
Consolidated Disposal Services and Southern California Disposal submitted proposals
for all commercial collection services. Looney Bins and Interior Removal Specialist
responded only to provide roll off service. The Evaluation Committee was charged with
reviewing the responses against the criteria established in the RFP and defined by
Santa Monica Municipal Code Section 2.24.072:
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Criteria Weight
1) Price. 40%
2) Quality of service offered. 15%
3) Ability, capacity and skill of the Proposer to 15%
perform or provide the material or service.
4) The sufficiency of the Proposer's financial 15%
resources.
5) The ability of the Proposer to provide such Pass/Fail
future maintenance or service as may be
needed.
6) Any other factor which will further the intent set 15%
forth in Section 608 of the City Charter.
As outlined in detail at October 30 Council Study Session, each member of the
Evaluation Committee individually scored each Proposal in each of the areas above by
assigning a number from 1-10, with 10 being best. The weight was determined by the
City Manager's Office and not shared with evaluators, Proposers or Gershman, Brickner
and Bratton, Inc. (GBB), the City's consultant. The Assistant to the City Manager for
Management Services received each individual score sheet and tabulated the weighted
score. The results for those companies that proposed all services were:
Allied Athens Ci Consolidated SCD
Criteria Average Weighted Average Weighted Average Weighted Average Weighted Average Weighted
1 7.17 2.87 7.83 3.13 9.67 3.87 5.00 2.00 7.60 3.04
2 6.33 0.95 8.33 1.25 9.00 1.35 6.50 0.98 6.33 0.95
3 6.83 1.02 8.67 1.30 8.67 1.30 7.17 1.08 6.33 0.95
4 10.00 1.50 7.00 1.05 9.00 1.35 10.00 1.50 5.00 0.75
5 6.83 0.00 7.67 0.00 9.00 0.00 7.00 0.00 6.00 0.00
6 6.00 0.90 7.00 1.05 9.50 1.43 7.20 1.08 7.00 1.05
Total 7.24 7.78 9.29 6.63 6.74
The results for those companies that proposed only to provide roll-off services were:
IRS
Criteria Average Weighted
1 4.40 1.76
2 5.33 0.80
3 4.67 0.70
4 3.00 0.45
5 3.83 0.00
6 5.40 0.81
Total ~ 4.52
Looney
Average Weighted
6.00 2.40
7.33 1.10
6.17 0.93
3.00 0.45
6.17 0.00
7.00 1.05
5.93
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Discussion
The Evaluation Report presented on October 30 outlined the results of the Evaluation
Committee's unanimous recommendation that the Solid Waste Management Division is
the best overall proposer, specifically, SWMD:
Proposed the lowest cost.
• Demonstrated providing quality level of service.
Well thought out business plan and experienced team with knowledge of the City
• Has the financial capability to deliver all commercial collection services. Already
the largest commercial provider in Santa Monica.
Demonstrated commitment to alternative fuels, specifically, Compressed Natural
Gas (CNG)
Excellent knowledge of AB 939 diversion requirements, ability to change to meet
new requirements without renegotiating a contract
The sections below provide clarification, additional information and the results of
additional staff analysis in response to questions raised at the October 30 Study
Session.
Cost Proposals
The City's cost, as proposed, was the lowest. As detailed in the Commercial Collection
Evaluation Report, the Advisory Team questioned the number of lifts (bins) that could
be accomplished in a day. SWMD has been consistent in stating their position that the
productivity adjustment from 225 lifts per day, as included in their proposal, to 150 lifts
per day, as used in Table 2 on page 10 of the Evaluation Report, was too dramatic a
change. In order to ensure that the productivity number used to determine the final cost
is achievable, the City Manager's Office engaged GBB to oversee a route audit of
SWMD's current commercial routes to confirm the number of lifts per day was
achievable. The route audits were conducted on each commercial route between
Thursday, November 8 and Wednesday, November 14. The route audits confirmed 190
lifts per day. It is believed that this level can be maintained as long as the efficiencies
discussed in detail below are maintained. Therefore, the cost table is revised in
Attachment 1.
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Additionally, it was unclear as to whether the 10% franchise fee proposed in Southern
California Disposal's (SCD) cover letter was included in their cost proposal forms. Due
to the uncertainty, two SCD numbers were presented in the Evaluation Report to
account for whether the 10% was included or not included in the price proposal. SCD
has since clarified that the price proposed includes the 10% franchise fee, therefore the
number presented in Table 2 on page 10 of the Evaluation Report is the correct number
for comparison. It should also be noted that SCD proposed a 5% reduction if they were
awarded both commercial collection and transfer services. Since this was conditional,
the proposed cost was not reduced by the 5%.
On November 14, staff received a letter (attached) from Athens Services stating that
their cost proposal included a range of franchise fees, which should have been adjusted
for the analysis. The letter provides cost figures that they state are equal for comparison
purposes. In Athens' proposal Options 3-7, Athens' included a 12% franchise fee. The
amount in the original report used the 10% franchise fee used in other Athens' options.
The additional 2% is reflected in the table in Attachment 1. They also included a 2%
payment to the City for administrative fees or to reduce rates and an optional 5% fee if
they were awarded both commercial collection and transfer services. The cost number
was not reduced by the total 19% due to the fact that 7% was attributed to other factors
than a franchise fee. Staff had a follow up conversation with Athens and they re-stated
their belief that the comparison amount should reflect the reduction of the additional 7%.
Attachment 1 includes a price table reflecting all modifications noted above. This table
and additional analysis re-confirms the Evaluation Committee's review and
recommendation. It is important to note that much of the focus of debate has been on
cost. While the cost component was weighted 40%, it was one of several factors that
the Evaluation Committee considered. The final cost would be subject to the results of
any negotiations. The Committee felt that SWMD provided the best overall proposal,
when considering all factors. It is also important to note that SWMD ranked highest in
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quality of service, ability to provide future service changes and any other factors (which
also included environmental considerations).
Level of Service
SWMD is currently the largest commercial collection provider within the City with 720
accounts. The Evaluation Committee felt that SWMD's proposal reflected an
experienced and knowledgeable management team that also benefited from the local
yard, ability to implement changing Council initiatives and included a business plan that
continued to build on efficiency improvements recommended by GBB. Below is a
summary of what SWMD has accomplished to date in the areas recommended by GBB:
1) Optimize routes to reduce collection time -- To date, SWMD has conducted
field surveys to reconfirm the refuse and recycling container database and
develop a current baseline for labor and equipment productivity levels. This
information is being used by SWMD to assign staffing and equipment resources
for both residential and commercial routes.
2) Document operational practices and improve reporting -- SWMD has
developed and documented standard operating procedures for most of the
division's operations and will complete the SOP development process by the end
of the fiscal year. The importance of adhering to standard operating procedures
is reinforced with the collections staff as a part of ongoing employee performance
reviews.
3) Develop training to reinforce procedures related to California's
Requirements for Commercial Driver's Licenses -- SWMD has implemented
procedures to ensure that pre-trip and post-trip inspections are performed and
documented by drivers in accordance with California requirements.
4) Train drivers to develop ownership of vehicles and routes -- SWMD has
begun implementation of a driver accountability program to assign drivers to
specific routes .and vehicles. This new approach should .result in greater
"ownership" of routes and condition of vehicles by the drivers. The new approach
should also result in improved delivery of customer services.
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5) Develop team approach between drivers and mechanics -- SWMD and Fleet
Maintenance personnel have convened regular meetings to better coordinate
preventive and scheduled vehicle maintenance and identify any areas concern
related to the frequency and expense of vehicle repairs. This closer coordination
has greatly improved the delivery of maintenance services to the SWMD.
Additionally, SWMD employs a variety of industry proven and acceptable best
management practices (BMP) for improving organizational performance and customer
service. These BMPs include:
1) Source Reduction & Recycling -The practice of reducing the amount of waste,
reusing whenever possible, and recycling whatever is left continues to be one of
SWMD's priority education and outreach efforts. Staff works with residents and
businesses that use City collection services, as well as businesses that use
private collection services, to employ innovative methods of diverting recycling
materials from the waste stream. The City has adopted a goal of 70% waste
diversion by 2010, and the City's current diversion accomplishment is over 60%.
3) Customer Service & Satisfaction Surveys -Surveying our customer base to
determine quality of services being delivered. The practice of consistent and high
quality delivery of service to City customers has been one of SWMD's hallmark
performance indicators. Customer surveys consistently show a high level of
satisfaction with SWMD services. SWMD strives to maintain this high level of
satisfaction and continues to work diligently to identify and resolve all customer
requests as quickly and effectively as possible. SWMD also has the greatest
ability to respond to changes and meet the needs of its customers. The 2007
Resident Satisfaction survey showed a 76% positive response for solid waste
services. This was equal to Fire and Parks and only Library services were higher.
The full results for 2005 and 2007 were:
2005 2007
Excellent 34% 30%
Good 46 46
Total Positive: 80 76
Fair 14 17
Poor 6 6
Total Ne ative 20 23
Don't Know 0 1
These examples of best practices highlight some of the effective measures that SWMD
has employed in working towards a High Performance Organization.
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Environmental Considerations
SWMD has a proven track record of environmental sustainability, they
• have the most extensive fleet of AOMD-approved alternative fuel vehicles
(Compressed and liquefied Natural Gas) of any Proposer.
• Have a stated goal of 100% diversion.
• demonstrated excellent knowledge of AB 939 diversion requirements.
• demonstrated the greatest ability to respond to changes, without necessitating a
contract modification.
Roll Off Service
The Committee concluded that roll off was best left open and competitive. The operation
of the roll off service require bins to generally be delivered one at a time in a manner
that can not be on a regular route, the industry as a whole achieves high diversion rates
and the City's demolition permit could be used to provide limits or policies to achieve the
City's goals without closing the market.
Financial Impacts and Budget Actions
There are no fiscal impacts associated with this item at this time. The fiscal impacts will
be determined based on Council's direction.
Prepared by:
Donald Patterson, Assistant to the City Manager for Management Services
Approved and Forwarded to Council:
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Attachments:
Revised Cost Comparison Table
October 30 Council Report
Additional
attachments
available in City
Clerk's Office.