SR-022608-1F~~~
;,Y p, City Council Report
Santa Moniea
City Council Meeting: February 26, 2008
Agenda Item: ~ -~
To: Mayor and City Council
From: Craig Perkins, Director -Environmental and Public Works Management
Subject: Emergency Purchase of Refuse and Recycling Bins for Commercial
Collection Services and Appropriation of Required Funds
Recommended Action
Staff recommends that the City Council approve the emergency purchase of refuse and
recycling bins from Consolidated Fabricators in the amount not to exceed $500,000 and
appropriate the required funds from the Solid Waste Fund reserves.
Executive Summary
On February 12, 2008, Council approved the purchase of refuse bins from Consolidated
Fabricators in an amount not to exceed $500,000 by a vote of 4-2. A copy of the report
is included as Attachment A. Subsequently, it was determined that the recommended
emergency action requires five affirmative votes in accordance with Santa Monica
Municipal Code Section 2.24.100. The item is therefore again presented for Council
consideration and action. Funding for this emergency purchase was deferred from the
Mid Year budget actions on February 19 until this item could be heard again by Council.
Funds will therefore need to be appropriated from the Solid Waste Fund to proceed with
the purchase. This report also addresses Council questions raised regarding the
number of bin purchases that will be required within the next 120 days in order to move
forward expeditiously with the transition of commercial customers to City collection
services.
Background
On November 27, 2007 Council directed the City Manager to develop an
implementation plan for the Solid Waste Management Division to be the sole provider of
solid waste commercial services, assuming the services of the approximately 20 private
haulers serving an estimated 1,400 customers. During December and January, City
staff ass~sed the service needs of the new commercial customers that would be
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moving to City collection; met with the private commercial haulers operating within
Santa Monica to determine their service continuation intentions; and initiated an
analysis of City staffing, vehicles, containers, and collection routes to determine the
optimum City transition plan approach. An Information Item regarding the Commercial
Collection Services Implementation Plan was circulated to update City Council the week
of February 4, 2008. Council will be provided additional updates as the implementation
plan progresses.
Discussion
Demand for Bins
The commercial collection implementation plan developed by the Solid Waste
Management Division includes the expansion of commercial recycling and food waste
recycling programs to help the City meet the Sustainable City's Plan goal of 70%
diversion from the landfill and to move the City closer to the long-term goal of zero
waste. In addition to meeting the City's diversion goals, implementing the new service
with a focus on recycling provides the City the best opportunity to decrease the number
of refuse tons transferred to the landfill now, before the Puente Hills landfill closes in
2013 and the cost of disposal increases substantially. An estimated 2,500 new bins are
needed to meet this demand for the City's approximately 1,400 new customers. The
precise number of bins will not be known until each new customer is contacted to
assess their needs and determine how to maximize their recycling participation.
City staff met with providers in mid January to determine their desire to continue
services to their commercial accounts during 2008. Staff was informed by a number of
the smaller firms of their intention to withdraw as soon as possible. These firms cited
several reasons among which were reduced cost-effectiveness, no opportunity for
increasing market share, and a desire to concentrate their limited staffing and
equipment in more promising markets. Staff recently received information from seven of
the twenty commercial providers. These providers have indicated they may stop
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serving their customers by summer. In total, these seven providers provide 798 waste
bins:
Emergency Need for Bins
Since the City has no control over the private sectors business decisions, staff could not
predict the number of existing providers desiring to shift accounts immediately or the
growing number of commercial customers desiring to shift service voluntarily when their
current service contracts end which has exhausted the existing supplies of bins.
Commercial collection service providers have already begun shifting their accounts to
the City in advance of the City's transition plan. Through the end of February it is
anticipated that these early replacements will total approximately 50 bins, and are
expected to accelerate during March and April, as the implementation plan is executed.
Staff estimates that approximately 50 bins will be needed in February and 250 bins will
be needed each month through May. The projected need for up to 800 emergency bin
purchases is based on a staff analysis which includes projections for: 1) unplanned
replacements due to private hauler service terminations; 2) voluntary customer
switching to City service; 3) normal replacement of damaged bins for existing City
multi-family and commercial customers; 4) proactive implementation of the transition
plan for exclusive City service beginning in March; and 5) acknowledgement that as the
refuse collector of "last resort", the City is legally charged with ensuring that sufficient
numbers of bins are always available to accommodate the refuse disposal needs of
commercial and residential customers and protect the public health and safety of the
community. Starting in June an estimated additional 1,700 bins will be purchased as a
result of the new formal bid process, bringing to 2,500 the total number of refuse and
recycling bin purchases required for the transition to exclusive City commercial waste
and recycling collection services by December 2008. It is important to note, that the
emergency bin purchase will be structured in a way that allows for adjustment based on
unforeseen field situations to accommodate actual bin needs as the transition program
moves forward.
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Procurement of Bins
Staff started the formal bid process in early February to purchase additional bins;
however, the formal process will take approximately 120 days, including the delivery of
bins; therefore those bins will not be received until early June. In order to avoid
devolution into a reactive mode in response to withdrawal of private haulers, staff
believes it is prudent to take steps to effectively and successfully manage the process of
change. Consequently, an emergency purchase is necessary to respond to the erosion
in private waste collection services, to proactively respond to commercial customers
and prevent a potential health hazard if commercial customers -many of whom have
food waste -are not accommodated with adequate refuse collection service. Municipal
Code section 2.24.100 allows emergency purchases, without advertising for bids, "if the
purchase of such supplies, materials, equipment or contractual services shall be
deemed by the City Council to be of urgent necessity for the preservation of life, health
or property and shall be authorized by at least five affirmative votes, or it shall be
determined by such vote...that to advertise for bids would be to no avail and would
cause unnecessary expense and delay."
Consolidated Fabricators has been utilized by the City for bin purchases through a
blanket purchase order process for each of the last three years. Until the completion of
the formal bid process, it is estimated that up to 800 additional bins will need to be
purchased from Consolidated, for an amount not to exceed $500,000. The pricing
received with this emergency purchase is consistent with the 2005 bid plus a marginal
increase due to the current cost of raw materials.
Financial Impacts & Budget Actions
It is requested that Council appropriate funds in the amount of $500,000 for the
emergency purchase of up to 800 2-cubic yard and 3-cubic yard waste and recycling
bins from Consolidated Fabricators from Solid Waste reserves to account
0270589.589000.
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Prepared by: Celeste Peele, Solid Waste Operations Manager
Craig Perkins )
Director - En ronmental & Public
Works Management Department
Attachments:
A -February 12, 2008 Staff Report
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Approved: Forwarded to Council:
ATTACHMENT A
City Council Meeting: February 12, 2008
Agenda Item: ~ .--G
To: Mayor and City Council
From: Craig Perkins, Director -Environmental and Public Works Management
Subject: Purchase of Refuse and Recycling Bins and Containers for Commercial
Collection Services
Recommended Action
Staff recommends that the City Council:
1. approve the purchase of refuse and recycling bins from Consolidated Fabricators
in the amount not to exceed $500,000;
2. amend the Award of Bid #2916 dated April 10, 2007, in an amount not to exceed
$510,000 to Roto/Rotonics Industries; and
3. approve the budget changes as outlined in the Budget/Financial Impact section.
Executive Summary
On November 27, 2007, City Council directed staff to proceed with developing an
implementation plan for Commercial Collection Services Citywide with the Solid Waste
Management Division (SWMD) as the sole provider. Commercial customers have
begun contacting SWMD for waste and recycling services and, consequently, current
inventories of bins and containers have been exhausted. Therefore, in order to
continue implementation of the Citywide commercial collection program, an emergency
purchase of containers and bins is necessary. This emergency purchase is only for the
number of containers and bins required until the completion of a formal bid purchase
process which has already begun and should be completed within the next 120 days.
Consolidated Fabricators and Roto/Rotonics Industries, the current providers of bins
and containers to the City, have indicated the ability to meet the City's emergency need.
Funds for this emergency purchase are available within existing Solid Waste fund
appropriation authority.
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Discussion
On January 22, 2007, the City released a Request for Proposal (RFP) for Citywide
commercial collection services. The City's Solid Waste Management Division was one
of seven companies that responded to the RFP. The RFP Evaluation Committee
ranked the Solid Waste Management Division as the best responder. An Information
Item regarding the Commercial Collection Services Implementation Plan will be
circulated to update City Council the week of February 4; 2008.
As a result of Council action on November 27, 2007, directing the City Manager to
proceed with the City's Solid Waste Management Division providing Citywide
commercial collection as the sole provider, many current commercial collection service
providers have already begun shifting their accounts to the City. The City had not
anticipated the large number of existing service providers desiring to shift accounts
immediately or the number of Commercial customers desiring to shift service when their
current service contract ends which has exhausted the existing supplies of containers
and bins. Staff has already begun the formal bid process to purchase additional bins
and containers; however, the formal process will take approximately 120 days and the
actual delivery of containers and bins will follow soon thereafter. Therefore, an
emergency purchase is necessary to continue implementing the Citywide commercial
collection services program.
On July 1, 2005, Consolidated Fabricators was awarded the bid for waste and recycling
bins fora 3-year period ending June 30, 2008. On January 17, 2008, the Purchasing
Agent issued an emergency purchase order to Consolidated Fabricators in a total
amount of $98,617.92 for purchase of an additional 160 bins for commercial collection
customers. This initial purchase was not sufficient to respond to the actual demand
currently being experienced, Until the completion of the formal bid process, it is
estimated that approximately 800 additional bins will need to be purchased, for an
amount not to exceed $500,000.
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On April 10, 2007, City Council awarded Bid #2916 to Roto/Rotonic Industries for refuse
containers used in the automated collection program. The bid award was for athree-
year period ending May 6, 2010, for an estimated amount of $390,000. It has been
determined that the purchase of 1,700 additional 68, 95 and 300 gallon automated
containers is necessary. The increased container purchases require an amendment to
the existing Roto/Rotonics contract of an amount not to exceed $510,000, thus bringing
the total contract amount to $900,000.
Financial Impacts & Budget Actions
The following budget actions are required:
1. Approve the purchase of approximately 800 2 and 3-cubic yard waste and
recycling bins from Consolidated Fabricators in an amount up to $500,000
from account 0270589.589000 for new commercial customers.
2. Amend the award of Bid #2916 to Roto/Rotonics Industries by $210,000 in
account number 0270227.589000 "Refuse Container Purchases;" and by
$300,000 in account number 0270589.589000 "Containers-Commercial
Collections". The new total amount for the term of the bid will be $900,000.
3. Acknowledge the issuance of an emergency purchase order dated January
17, 2008,. in the total amount of $98,617.62 issued to Consolidated
Fabricators. Section 2.24.120 of the Santa Monica Municipal Code allows the
waiver of a competitive bid process when it is necessary to protect health,
welfare and safety.
Prepared by: Celeste Peele, Solid Waste Operations Manager
Approved:
Forwarded to Council:
'/<_
Craig Pbrkins L/P~~ont Ewell
Director -Environmental & Public C' anager
Works Management Department
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