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SR-112508-8DCity Council Meeting: November 25, 2008 Agenda Item: °°' To: Mayor and City Council From: P. Lamont Ewell, City Manager Subject: Public/Private Partnership for Transfer and Recycling Services Recommended Action Staff recommends that Council: 1) authorize the City Manager to execute a service. agreement with Southern California Disposal (SCD) to provide transfer and self haul drop off services; 2) authorize the City Manager to execute a service agreement with Cedarwood- Young, Inc. dba Allan Company to provide recycling services; 3) authorize the City Manager to negotiate and execute a professional services agreement with J.R. Miller & Associates for design and bid preparation documents for the Recycling Drop-Off Facility for an amount not to exceed $1,450,000 (includes a 10% contingency) and authorize the Director of Public Works to issue any necessary change orders to complete additional work within budget authority; and 4) appropriate funds for this project as outlined in the Financial Impacts & Budget Actions. Executive Summary The actions recommended in this report are the result of a three and a half year process that reviewed Solid Waste operations and resulted in the development of a proposal for a public/private partnership with the City providing all collection services, Allan Company providing recycling services and .SCD providing transfer services and operating a self haul drop off facility. The conceptual framework for the partnership was approved by Council on May 22, 2008. Since that time, staff has negotiated with both private partners to identify the details of the agreements. The business terms in the proposed agreement are consistent with the concept approved by Council with some minor adjustments detailed below. A competitive process to select a design firm has also been completed that will allow the City to develop the necessary improvements to the City Yard site. The partnership is expected to increase the annual cost of solid waste operations by approximately $1.3 million per year, which is primarily the annualized cost for the City to finance the improvements to the City Yard through a revenue bond. .Both contractual arrangements are contingent upon completion of environmental review in compliance with CEQA, receipt of all approvals required by applicable laws,- and future approval and appropriation of funding for the public improvements necessary to accomplish the project. The implementation of the partnership would fulfill the City's goals of providing control over the entire waste stream generated in the city; allowing the City to own and control a facility that meets its current and future needs; reducing the total tonnage of waste being processed through the city by utilizing SCD permit limits for waste generated within-the .City; avoiding duplication of services in adjacent facilities; reducing truck traffic through an overall reduction in the number of tons able to be processed through the city; and helping the City maximize its diversion goals by having a modern onsite Material Recovery Facility. Staff currently assigned to the transfer station function will be absorbed into positions within the collection function, resulting in no loss of employment for current staff. Background Over the past three years, the City has been engaged in a review of solid waste operations. This review resulted in the issuance of two Requests for Proposals: one for transfer, recycling and disposal services and one for commercial collection services. On October 30, 2007, Council reviewed the proposals received and directed staff to explore two options, one whereby the City provided transfer services and one in which a private company would provide transfer services. In both options, Allan .Company would provide recycling services. On May 22, 2008, City Couhcil conceptually approved a public/private partnership for SCD to provide transfer and self haul services and Allan Company to provide recycling services. A copy of the May 22 staff report is attached, which details the general business points, roles and responsibilities and. terms of the public/private partnership. Discussion Transfer & Self Haul Services Under the proposed private/public partnership project, SCD would expand their existing transfer station to accommodate the additional city tonnage. SCD would process and transfer all municipal solid waste, green waste, construction and demolition debris, food waste and any residual from the Allan-operated recycling facility. The expansion of SCD's facility will, in part, proceed first as a functionally independent project and would 2 be able to provide a facility to fully handle city materials during construction on the City's property. The terms detailed in the May 22, 2008 staff report are incorporated in to the service agreement, with the following modifications to the business terms: 1) The City recommends the option detailed that provides a lower per ton charge for material delivered by City trucks in order to provide better cost certainty over the course of the agreement. 2) The transfer price of $22.28 per ton in the May 22, 2008 report covered transfer of Cify material within a 30 mile radius, which includes all facilities the City is currently utilizing. The City and SCD have identified various additional facilities that are available and may be designated disposal facilities in the future. Per ton costs will increase if facilities further from the transfer station must be utilized, per the following chart: Zone A B C D Distance miles 30 40 60 75 Cost per ton $22.28 $27.23 $31.92 $36.26 The increase in cost is reflective of the decrease in the number of round trips able to be completed per day resulting in increased employee cost and additional fleet needed. The service agreement with SCD would begin its fifteen year term when the City issues a notice to proceed, and would be issued uponcompletion of construction of the .City's facilities. The contract includes provisions whereby if the City elects to take a different approach in dealing with its transfer needs at some point in the future, the contract can be terminated for convenience with aone-year notification. The estimated first year cost of the agreement is $2.4 million. This amount will change based on the actual tonnage delivered to SCD, the facilities designated for disposal ahd can be reduced by the community increasing its recycling. Recvcling Services Under the proposed public/private partnership project, Allan Company would provide recycling services for all city collected mixed recycling and will operate abuy-back center and drop of facility for recyclable material. All recycling processing would be completed in a new Materials Recovery Facility (MRF) that would be built and owned by the City and operated by Allan Company, which would be responsible for the purchase 3 and installation of the processing equipment. The MRF and Drop-Off and Buy-Back Center project area construction would occur in phases in a manner designed to allow continuous operation of a recycling center at the City Yard. The terms detailed in the May 22, 2008 staff report are incorporated into the service agreement, with the following business term modification: 1) The Service Agreement will include a transition phase which will allow Allan Company to continue to operate a recycling facility at the City Yard under the terms of the former 1994 Agreement, with the exception of the price paid to the City. Allan Company will pay the City a minimum of $27.50 per ton for material delivered to the facility during the transition period. This amount will be adjusted , up when the commodities market condition .improves, based on an average calculation of the value of recyclables. Like the SCD service agreement, the Allan Agreement would begin its fifteen year term upon the City issuing a notice to proceed with operations, which would be issued upon completion of the construction of the City's facilities, which itself is contingent. upon CEQA compliance. and future funding. The contract includes provisions whereby if the City elects to take a different approach in dealing with its transfer needs; the .contract can be terminated for convenience with aone-year notification. The estimated first year revenue the City will receive from the Allan Company is $1.2 million. This number will be adjusted based on the actual tonnage of recyclable material received from the City and can be increased by greater participation in recycling programs. Design Services On August 4, 2008, a Request for Proposals (RFP) was advertised. on the City's website for desigri services for the Recycling Drop-Off Facility that would be built under the public/private partnership between the City, SCD and Allan Company described above. The new Recycling Drop-Off Facility will be designed to include the following components: 1) Material Recovery Facility -The Allan Company-operated MRF will be located in the general vicinity of the existing City Transfer Station. The proposed MRF will be asemi-enclosed pre-engineered metal building structure, housing a sorting line and special processing equipment for separating and recovering various commodities of recyclables from co-mingled curbside and commercial 4 recyclable collections. The MRF will have an open tipping floor for City recycling collection vehicles to enter and unload their materials and that can be used as a back-up transfer facility should the need arise due to a temporary closure of the SCD facility. 2) Buy Back Center (BBC) -The Allan Company-operated BBC will be for recyclables brought by the public in exchange for the monetary value of the commodities. 3) Recycling Drop-Off Area (RDOA) -The Allan Company-operated RDOA will provide for the public to drop off recyclables that would not be subject to -cash redemption. 4) Household Hazardous Waste Facility (HHWF) -The City-operated HHWF will provide an area for the. public to properly dispose of HHWF. 5) Self Haul Facility -This SCD-operated facility is east of the _SCD-owned transfer station and south of the recycling drop off area.. This area will receive items such as construction and demolition material, green waste and other non- recyclable material from private parties. 6) Storage Area -The Solid Waste Division in the City needs a location within this site to store and perform onsite repair of bins and other collection containers. 7) Solid Waste Management Office -The Solid Waste Management Division's offices and customer service center is currently located in a trailer. This proposed project will provide a new administrative office and customer service center for the Solid Waste Management Division within the project area. On August 14, 2008, a mandatory job walk was conducted at the City. Yards and existing transfer stations. Three (3) companies attended the job walk. On August 28, 2008, J.R. Miller & Associates submitted the only proposal received. Their proposal included HDR, Inc., who was one of the other companies that participated in the job walk, as a subcontractor. An evaluation committee comprised of staff from the City Manager's Office, Architecture Services, SCD and Allan Company reviewed the. proposal. The evaluation criteria included solid waste processing facility experience; acceptance of contract terms; depth of services; project approach; staff qualificatiohs and experience; project manager experience; responsiveness to the RFP; ability to deliver the project on time and on 5 budget; creativity and flexibility; community awareness; and regulatory knowledge. The evaluation committee reviewed the proposal based on the selection criteria requirements. On October 23, 2008, City staff and representatives from. SCD and Allen Company interviewed J.R. Miller & Associates. During this interview, the City provided additional information so that J.R. Miller & Associates could provide the City with a more accurate proposal. J.R. Miller & Associates submitted a revised proposal on November 12, 2008. This proposal revised their scope of work to include all programming, agency work and construction. administration in addition to design and construction documentation. The additional information provided by the City reduced J.R. Miller & Associates' cost proposal by $315,000. The design of solid waste processing facilities is a very specialized .area of expertise, and there are only a limited number of firms in the Los. Angeles area that perform this work. J.R. Miller and Associates, Inc: and HDR have extensive experience in solid waste processing facilities. Collectively the team has designed over 450 of these facilities over the last 25 years. Based on J.R. Miller and Associates experience in the design of solid waste processing facilities, and .based on the review of their proposal, the selection committee recommends that City Council approve a professional services agreement with J.R. Miller and Associates, Inc. for the design of the Recycling Drop-Off Facility. CEQA Compliance The request appropriation for design services for the Recycling Drop-Off Facility that would be built under the public/private partnership between the City, SCD and Allan Company described above will provide a project description .adequate for commencement of CEQA review. The construction of the Recycling and Drop Off Center and the provision of recycling services for the Recycling and Drop Off Center as 6 contemplated by the Service Agreement with Allan Company is contingent upon compliance by the City with the California Environmental Quality Act ("CEQA"), and the expiration of any applicable period for a challenge to the adequacy of the City's compliance with CEQA. Any construction of the Recycling and Drop Off Center shall not commence unless and until CEQA compliance is completed and the period for a timely CEQA challenge has lapsed. The provision of the solid waste transfer services and the construction of additional facilities thereto as contemplated by the Service Agreement with SCD is similarly contingent upon CEQA compliance by the City and the expiration of any applicable period for a challenge to the- adequacy of the City's compliance with CEQA. Any provision of the solid waste transfer service and self-haul services and construction of facilities thereto shall not commence unless and until CEQA compliance is completed and the period for a timely CEQA challenge has lapsed. These service agreements are not only conditioned upon CEQA compliance, but also future funding and permit approvals. No commitment to the development of the Recycling Drop-Off Facility or other facilities that would be built under the public/private partnership between the City, SCD and Allan Company described above has occurred as a result of the proposed service agreements. There is no sale of property or commitment of financial resources required by these agreements in advance of CEQA compliance. Because the City has not committed itself in whole or part to this project, and because these agreements do not foreclose the consideration of alternatives or mitigation measures that will part of the CEQA review for this project, these agreements do not require formal environmental review. Rates Council has directed staff to complete a rate adjustment to establish greater equity between customer groups. Finance staff initially proposed a minor rate adjustment at this time to begin to address any rate inequalities that were previously identified and 7 then to complete a larger rate adjustment once the new facilities were in place. Upon review, -staff determined that the previous cost model developed in 2006 no longer reflects Solid Waste operations, the inclusion of all commercial customers or the .proposed improvements to the City Yard. Due to these factors, an update of the 2006 cost structure would not correctly reflect the cost of providing solid waste services to the various customer classes. Staff has issued an RFP to complete a new rate analysis that takes into consideration the new operational structure of solid waste collections and the known cost estimates of the new facilities the City is responsible for collecting. The rate analysis will be completed in time for a January 1, .2010 implementation. The Solid Waste. Fund has sufficient resources to cover operations until that time. This will ensure a fair rate adjustment taking into consideration all the factors of the partnership and will result in only one rate adjustment for customers. Financial Impacts & Budget Actions SCD The partnership with SCD would be expected to cost approximately $2.4 million per year, based on estimated annual hauling of 107,000 tons of material. If the City chose to maintain these transfer and self haul services and incur the capital costs associated with constructing a City facility the annual cost would be approximately $2.8 million. This is comprised of the capital project that was proposed by the City as costing $5.7 million, or $500,000 per year over a 20-year term, which was exclusive of the subsurface work needed to build a facility over the landfill. The annual operating costs would increase from approximately $1.7 million to $2.3 million per annum. The current City facility has reached its capacity, evidenced by a recent reduction in public hours for self haul and the increased use of SCD to transfer materials received in excess of the City Transfer Station's daily tonnage limit. Allan The contract with Allan would result in positive cash flows of approximately $240,000 in FY 2012, following the construction of a Material Recovery Facility (MRF). The MRF is 8 estimated to cost $15 million and to be financed over 20 years, resulting in a per annum cost of $1.3 million. The MRF would process 33,600 tons of recycled material per year, producing revenues in excess of $1.5.million in 2012. Under this plan, the City constructs and maintains ownership of this facility, while Allan is responsible for the operations and maintenance of the facility. Desi n In order to begin the design process, an appropriation of $500,000 from the Solid Waste Fund to account 0274019.589000 is needed. Staff is currently assessing a capital financing plan for the remaining design and construction costs associated with the Material Recovery Facility (MRF) and will return to Council during the annual budget process with recommendations. The design contract will be executed with a 30-day "out" clause in the event the City decides not to continue with this project. Prepared by: Donald Patterson, Assistant to the City Manager, Management Services Attachment: May 22, 2008 Staff Report 9 Approved & Forwarded to Council: City Council Meeting: May 22, 2008 Agenda Item: To: Mayor and City Council From` P. Lamont Ewell, City Manager Subject: .Public/Private Partnership for Transfer and Recycling Services Recommended ,fiction Staff7ecommends that Council: 1) provide input and conceptually .approve a public/private partnership with Southern California Disposal for transfer services and Cedarwood-Young Company dba Allan Company for recycling services; and 2} authorize the City Manager to negotiate and execute a modification to agreement 8524 (CCS) with Gershman, Brickner &Bratton, Inc. Executive Summary Over the .past three years, .the City has been engaged in a multi-year. review of solid waste operations. One of the results of this review was the issuance of a Request for Proposals to provide transfer, recycling and disposal services. On October 30, 2007, Council reviewed the results of an extensive request for proposals process to provide transfer and. recycling services for municipal solid waste. Afthat time, Council directed staff to explore two options, one whereby the City .provided transfer services and one in which a private company would provide transfer services. In both options, Allan would provide recycling services. Since that time, staff has held extensive discussions with SCD and Allan to explore the potential of a public/private partnership. Those discussions have led to s concept proposal that provides for SCD to provide transfer services and Allan would provide recycling services in the area of the City Yard currently occupied by the City's Transfer Station, the current Allari site,- the Hanson Aggregate site and SCD land. The- cost of this option is subject to further negotiations and wi11 be finalized during the next stage of negotiations if Council approves the partnership concept. An additional amount not to exceed $25,000 is needed for Gershman, Brickner & Bratton; Inc. for work already :completed to finalize the Preliminary Term Sheet. 1 C.C # 10 Discussion Transfer/Recycling/Disposal Services Staff has been meeting with SCD and Allan for the past seven months to develop a concept for apublic/private partnership. Following extensive discussions; the City, Allan and SCD have agreed to preliminary terms .and conditions for the partnership, which is presented for Council review and approval. The concept envisions an integrated facility on City and 5CD land whereby SCD provides transfer services in an expanded transfer station and operates a self haul area on City land and Allan provides recycling services (see Attachment A). During this time, staff also explored the benefits of a public/private partnership with Allan and SCD as compared to the City providing transfer services. Advantages to both approaches are: 1) City retains control of the processing and disposal of sdlid waste generated in the City. 2) The City retains ownership df a solid waste facility permit. 3) City will make a significant capital investment on its land. 4} Solid waste and recycling processing are confined to area of the City where this land use has a lohg history. 5) Maximum use of alternative fuel vehicles. will be achieved. 6} Will assist the City in achieving 70% recycling (measured by California Integrated Waste Management. Board methodology). 7) City will have on-line, real time access to all quantity data for recycling and solid waste materials. 8) City will receive a share of recycling revenue from single stream recycling Advantages of the City/Allan/SCD Partnership are: 1) Makes maximum use of the existing locaffacilities. 2) Avoids duplication of ransfer capability. 3) At a minimum, provides a semi-enclosed recycling processing facility which reduces environmental impacts. 2 C.C s l l 4) Reduces total capital investment required by City. 5) City will retain ownership of all improvements located on city property. 6} Recycling operation receives and processes selected commercial waste loads to recover recyclables. 7) Lower cost per ton transferred.. . 8) City may, if it chooses, receive a Host Fee for all non-City waste transferred. Advantage of City transfer and AHan recycling are: 1) City operates the transfer function using City staff, increasing control over the entire waste stream. 2) Simpler administrative arrangements, only one operational service contract. 3) No non-City waste a# City utilized facilities. Summary of Site Operations Materials Recvclinq Facility (MRF) The MRF would be operated by Allan and located in the general vicinity of the current existing transfer station. The facility will, at a minimum, be semi-enclosed pre- engineered metal ,building housing a sorting line and processing equipment to separate and recover the various commodities from curbside recycling and commercial mixed recycling. The material will be combined with recyclables received from the self haul, buy back-and drop off areas for sale ahd transport to processors. The MRF will also receive designated select commercial loads, those commercial collection loads that are identified to contain greater than 50% clean recyclable materials, for sorting and processing.- Buy Back and Recvclinq Drop Off Center Allan will operate buy back and recycling drop off areas on an area immediately next to the MRF on land currently occupied by Allan's facility and a portion of the Hanson Aggregate site. The Buy Back Center will provide scales and drop off areas for those who wish to redeem the California Redemption Value (CRV) from their recyclable 3 C.C # 12 goods. The drop off Center will be located between the Buy Back Center and the Self Haul area, providing a location for those who wish to drop off recyclable material twenty four hours aday/seven days a week without redeeming the CRV. Household Hazardous Waste The City will move its Household Hazardous Waste Facility (HHW) to an area integrated to the Drop Off Center and Self Haul area to provide aone-stop location for the public to dispose of unwanted materials. Transfer Station Under the proposed partnership, SCD will expand their current transfer station to accommodate the additional City tonnage. The primary .area of expansion is to the Northerly direction of their current facility into a currently vacant lot that is SCD-owned. The expanded transfer station will, at a minimum, be a-semi-enclosed facility with an expanded tipping floor and added transfer capability. The facility will also have a .separate, enclosed, food waste transfer capability. SCD would process and transfer all municipal solid waste, green waste, food waste, construction and demolition material and any residual from the Allan-operated MRF. General Business Points The City, Allan and SCD have agreed on preliminary terms for the proposed partnership. Below are the significant points: 1. The term will be for 15 years with three optional 5 year terms. 2. Both. SCD and Allan will continue to be able to process non-Santa Monica .generated tonnage up to their permit Emits (as they do today). In both cases, - Santa Monica generated material will have processing priority. 3. The Ci#y will manage the overall development and implementation process for the facilities and infrastructure improvements that-are to be on its property, and SCD will manage the overall development and implementation for the facilities and infrastructure improvements on its property. The work involved includes the design, permitting, construction, financing and acceptance testing. Each party will be responsible for its own capital to pay for improvements on its property; 4 G.C # 13 however, Allan will be responsible to supply equipment and rolling stock related to work and is responsible for its own capital. The City and SCD will provide design input to each other's improvements on SCD's property to ensure an integrated facility. 4. The City will be responsible for the collection of waste and recyclable materials generated and set out for collection from all residences {single family and multi- family) and commercial; business, institutional and governmental establishments in the City. The City and private haulers can contract directly with a resident or business for open top roll-off containers. The City will deliver any waste and recyclable materials collected by the City to either Allan or SCD. 5. The City will make commercially reasonable efforts for the collection of clean source separated Recyclables from all of its customers. In the event that source separation of recyclables is not practical from commercial customers, the City will cause for the collection of food waste and other organics from select commercial customers and create separate routes for the collection of remaining mixed waste so that it can be processed for recycling by Allan at the MRF. It will be the objective to cause for such these separately routed loads to have no less than 50 percent recyclable content. 6. If reasonably practicable and consistent with existing permits; consents and other rights to operate, it will be the objective for Allan to floor inspect and separate these selected commercial loads for further processing, sorting, baling, and marketing. 7. The City. will determine which loads are delivered to Allan. 8. The City may be responsible for the operation of the scales used to weigh City collected and City delivered Recyclables and select loads at the facility operated by Allan. 9. SCD will be responsible for the operation and maihfehance of all its scales, video monitoring system, and materials management database that serve the Transfer Station and Self-Haul area. The City. will have the right to have a full- . time supervisor in the scale house, -along with live feeds from the video and materials database systems: The parties will work together to assure that any changes to re-cords are done with the knowledge of the City. The City will ensure monitoring and participation in the scales, Materials Management Database, and video monitoring system that serve the Transfer Station and Self-Haul-area will not materially impact the efficient operations or wait times at-.the Transfer Station and Self-Haul area. 10. The City will be responsible for a Materials Management Database and video monitoring of Allan-operated site(s); access to this information will be made 5 C.C # 14 available to Allan on a live 24/7 basis. The Parties will also work together to establish protocols to assure that any changes to records are done with the current knowledge of the-City. 11.A11 deliveries will be through scales, except for those customers using the recycling drop-off areas on Delaware Avenue. The material and quantity data shall be entered into the Materials Management Database. 12. The City will design and build improvements on the City's property that include the drop off and buy-back center, self-haul area, and materials recycling facility that includes transfer functionality sized to respond to the City of Santa Monica transfer needs, hereinafter called the "Recycling and Buy Back Complex." 13.Allan will provide design input, the necessary equipment, both fixed and mobile, and will be responsible for operation and maintenance of the completed complex for the Recycling and Buy Back Complex. 14. SCD will provide design input for the self-haul and Frank Street areas, and will be responsible for the operation and maintenance of these areas when complete. 15.SCD will design, build and operate the improvements to its Transfer Facility and haul waste materials off site to processor(s) and disposal locations as approved by the City: 16. SCD may seek to expand its current operations into Frank Street and a limited portion df the City Yard immediately east of Frank Street. 17. Allan will cooperate with the City in the appropriate aspects of this partnership project - at a minimum, the recycling aspects. 18: Attachment A Item 2.0 "Site Plan" presents a conceptual layout of generally where facilities and infrastructure improvements may be located.. It shows the City owned City Yard property with boundary lines, the City owned streets (Delaware Ave: and Frank. Street) and the SCD properties with boundary lines. SCD and Allan will each separately and independently lease City property utilized for the project for the duration of the Service Agreement. 19. Each party will advance required permits and/or permit modifications„ and all necessary regulatory approvals, in a parallel path as prudent and practicable. Permits for the Materials Recycling Facility, Buy-Back and the Drop-Off, and the Self-Haul arealocated on City property shall be continuously owned by the City. Permits for the Transfer Facility Station located on SCD property shall be continuously owned by SCD. It may be possible to fast-track SCD permitting requirements as they maybe deemed a modification. 6 e.c # Is Additionally, each party will be expected to comply with the major provisions outlined in . the Request for Proposals, which includes: insurance, indemnification, assisting in meeting the City's sustainable goals of 70% diversion and LEED silver designation on new buildings. Summary of Materials Responsibilities The following table presents materials and responsibilities for the various parties: Material Location processing Functions Responsible MRF, buy Clean Recyclables back or drop- Inspect, store, process, shipping Allan off Clean Recyclables from MRF, buy outside sources, including back or drop- Inspect, store, process, shipping Allan SCD off Select Commercial MSW for MRF Inspect; floor sort, load out Allan Recycling . - MRF residue Loadout MRF Inspect, floor sort, load out Allan ,MRF residue Hauling MRF Yailerspotting, hauling, disposal SGD MSW from City and self- ransfer Inspect, load out, haul SCD haulers Station alk up and auto traffic with Drop Off Site management and movement of recyclables materials. Allan Self-haulers, walk up with buy Buy Back raffic control; buy back payments;. Allan back materials Center hauling to MRF djacentto raffic control; unloading, inspection, HHW Buy Back orting; packing; shipping; record City Center keeping Green waste and Food Waste ransfer Inspect load out haul SCD rom City Station , , Green waste from -Self- Self.Haul I nspect, load out, haul SCD Haulers rea C&D from City ransfer i Station nspect, load out, haul SCD C&D from Self-Haulers SeeaHauf I nspect, load out, haul SCD 7 C.C r lb Contract Modification The contract with GBB was fully expended as of late March 2008. In order to finalize the preliminary agreement between the City, Allan and SCD, GBB continued to meet with and negotiate with all parties. GBB also was asked to come to Council to present the preliminary term agreement to Council, as the City's lead negotiator. These final task related to the completion of a preliminary term sheet caused GBB to exceed their contractual authority. This seventh modification will bring the three-year total for GBB to five hundred seventy three thousand dollars ($573,000). Based on Council direction, staff will tie negotiating .with GBB regarding future involvement of the firm. It is anticipated that staff will return in late June with an additional contract modification for GBB to continue to consult-with the City regarding industry best practices and the final development of the public/private partnership. 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, 2006 Study Session. The study session resulted in GBB presenting a variety of recommendations to improve operational efficiencies .and a detailed financial analysis. GBB was engaged to provide assistance and analysis related to the review of the Request for Proposals (RFP) responses to test alternative service delivery methods of commercial and transfer operations. GBB has also served as the lead City negotiator in developing the frame work presented herein of a public/private partnership with the City, Allan and SCD. Financial Impacts ~ Budget Actions The City has continued negotiations with SCD and Allan regarding financial. terms of the arrangement. These discussions and' finalization of the terms will confiriue into the development of the final' contractual document. The financial package and ultimate effect on ratepayers will be affected by the final cost of construction, the actual number of tons received from collecting all commercial waste in the City and the ability to successfully negotiated rates at designated disposal locations. The results of these 8 C.C#17 negotiations to date are that Allan proposes to provide the City an Upfront payment of $526,000; revenue sharing of $30 per ton delivered and 50% of any. revenue received from the sale of recycled material above. $135 per ton; and a host community fee of $4.50 per ton an all material generated outside of Santa Monica. SCD and the- City are currently assessing two scenarios, one which contemplates a service fee and a host fee paid to the City and one which contemplates only a service fee with a lower per ton charge. The currently discussed cost is $16.41 per ton with a $1 per ton host fee for non-Santa Monica generated material for a total per ton cost of $24.51 or $14.18 per ton with no host fee for a total per ton cost of $22.28. The second option .does not account for potential revenue from the host fee, which would vary based on the number of non-Santa Monica .tons delivered to the SCD site. The. Service Agreement will incorporate the selected. fee structure, cost of improvements and tonnage from all commercial customers. SCD is also proposing to purchase City excess equipment for $213,600.00. Council will be presented with final cost information and its impact on rates in summer prior to approval of schema#ic designs. Funds for the contract amendment are available in account 27441.555060. Next Steps Anticipated key milestones are: Negotiate Service Agreement Final Cost & Contract Authoriza#ion Environmental Review & Permitting Project Financing Schematic Design to Council Design/Cohsfruction/Acceptance Start of Operations 9 Summer 2008 . Late Summer 2008 Summer - Fa11 2008 Summer - Fa11 2008 Winter/Spring 2009 Fall 2008 -Spring 2011 Spring 2011 c.c ~ is Alternatives Council could. direct staff to pursue the original Option A from October 30, 2007, which was the City providing transfer services and Allan providing recycling services. This alternative would require a larger facility on City Yard land than currently envisioned; and require greater capital investment by the City. This option also would increase the total transfer capacity in the City Yard area, creating the potential for additional non- Santa Monica materials being brought to the City. If this, or any alternative, is selected, staff would return to Council for a concept approval in late Summer 2008. Prepared by: Donald Patterson, Assistant to the City Manager, Management Services Approved & Forwarded to Council: ~.! ~yR / `~~ y,L mont-Ewell Gity Manager Attachment:. Conceptual Site Plan 1~ C.C # 19 . ~ ___ u ~. ._ ._ ~ . ~ .)~ ^~SYf4 ,,n~,~ e _.. ___ r .... _. ~ :: MNNEftS / Lfh~ 2 rJ~N1:hWS ~ ~ ~ _ _, I a 4n nwcns ~ ~' .~. ' _ ~ t . ' ~ a, ~ s'~:a ~. rtr ilF I __ _ mm~ vn aan; _ i ... ~. { - + f _ ~ . ~ ~~ ~ ` i ~ ~ ~ . i ~~ ~ ~1 ~ ~~ n c .a s , s. ~ ~ i aL , , ~,~ .. \ „ ~ (~ t ~t~ .Y.~ ~ ~ ~;, ~ I:, ~. ,. \ ~ ..:.~ 1 '. ., G ... i . .. .._....,.,.. ,... :..m. .. ..._... .. .v ...... N.. J~h .. '~ I I d /h £ ''... I -~ TR t . R ~ ~, s .. , i a,.... »: ~ ~ ,. I ~ I I F ~., rlt 'A ~: , _ f ~ I + x -.L i i i .~ , ~ i _ _ ~ °'; air ' .,~~~ J N _~__~____- l(2pC A-rC'cG nn~ iE ~~c n SITE PLAN ~ .v t 4 ~- L ~~Ai(RCiAi. iit: o. Gitil'a4 ,~~pN ~~ StRJG SANTA MONICA PRE SOC OPTION 11 ~N GON WASTE RECOVERY ~•.--.- pOa & TRANSFER STATION -. _ Ot ; ,-.. N Buz ~ -- -- C-01 Reference Contract Nos. 9011(CCS), 9012 (CCS), & 9013 (CCS).