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sr-112211-3gS City of City Council Report Santa Monica City Council Meeting: November 22, 2011 Agenda Item: 3-61 To: Mayor and City Council From: Martin Pastucha, Director of Public Works Subject: Zero Waste Strategic Plan Development and Rate Structure Analysis Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a professional services agreement with HDR Engineering, Inc., a California- based company, in an amount not to exceed $149,360 for the development of a Zero Waste Strategic Plan and refuse rate structure analysis. Executive Summary The 2010 Sustainable City Report Card indicated that the citywide recycling rate exceeded the Sustainable City Plan target of 70 %. In an effort to continue the recycling momentum, development of a Zero Waste Strategic Plan (Plan) was proposed. The Plan would consist of a review and summary of all the current policies and programs, preparation of a zero waste guidelines, and the development of an operations plan that would also include a financial and cost analysis. In addition to the Plan development, the consultant would also perform a rate structure analysis and recommend policy changes. It is recommended that HDR Engineering, Inc. (HDR) provide this service for an amount not to exceed $149,360. Background On June 23, 2009, Council directed staff to develop a Zero Waste Strategic Plan. The creation of the Plan would allow the City to strengthen and refine its current waste diversion operations while adding significant opportunities and emerging technologies. The City established the Zero Waste Planning Committee to effectively design and implement a zero waste program. This Committee was comprised of the Resource Recovery & Recycling Division (RRR), the Office of Sustainability and the Environment 1 (OSE) and the City's private partners, Southern California Disposal and Allan Company. Numerous meetings were held between September 2009 and August 2010 to establish methodologies to develop a Zero Waste Strategic Plan. Out of this collaborative effort, several processes and programs were discussed and implemented including a pilot residential green food waste program, expansion of the commercial food waste program, and audits of landfills to determine diversion rates. In addition, the committee determined that a consultant would be needed to develop a long term zero waste strategic plan which would include new and expanded operational programs, producer responsibility, product stewardship, client responsibility, council ordinances and resolutions as well as identifying impacts of all programs on future integrated waste processing and disposal rates. Discussion Under the new State regulation AB 341, enhanced guidelines and mandates are established for recycling, source reduction and composting. AB 341 contains language which requires any commercial entity generating four cubic yards of trash or more per week to arrange for recycling program implemented no later than July 2012. In addition, AB 341 requires any multi - family property having five units or more to arrange for recycling program implemented no later than July 2012. Municipalities are required to monitor these requirements and are authorized to collect a fee to recover the agency's cost for compliance. As a result of this State regulation, the Zero Waste Planning Committee sought to identify an outside consultant to take full advantage of emerging trends, new technologies and long -range plan development, and evaluate how to adequately and equitably fund programs and services. Issues that would need to be considered in the cost analysis related to fee recovery are: • The policy shift to zero waste services while still incurring the long term costs of landfill disposal and alternative technologies. • The City's policy of maintaining a positive fund balance. • The influence of Proposition 218, which stipulates that property- related fees and charges, including garbage collection fees, must not only be related to the service, but that they be limited to the cost of providing service, would impact the allocation of costs to customers. ri The information presented in the Plan, including the results of the cost and rate analysis will be used as the basis for future operational enhancements and rate structure adjustments. Consultant Selection In May 2011, the City issued a Request for Proposals to develop a Zero Waste Strategic Plan. The RFP was posted on Planet Bids, the City's online bidding system, and notices were advertised in accordance with City Charter and Municipal Code provisions. Four proposals were received on June 30, 2011. A review panel comprised of staff from RRR and OSE evaluated the proposals and interviewed the top proposers. The interviewees were given an opportunity to make a presentation and answer questions from staff. After the interviews, HDR Engineering, Inc. was recommended as the best bidder. HDR assembled a highly qualified team of local and national solid waste professionals in planning, operations, and rate structure analysis to assist the City develop its Zero Waste Strategic Plan. HDR's team, which includes H F & H Consultants, has worked closely together over the past 15 years to: • Develop Zero Waste plans for 10 communities. • Gain local knowledge of waste dynamics, regulations and opportunities. • Compiled a data base of waste equipment and operations costs from projects across North America. • Prepare diversion and cost models that project system capital and operating costs. The HDR team also had the best understanding of the City's project needs and presented the best strategy and approach to the project. Since their proposal was also the most expensive, staff requested that they amend their proposal to scale back on the outreach and program alternatives and focus on the financial component. An amended proposal was received in September 2011 in the amount of $149,360, which includes the use of a "flexible" rate model to assess the impacts of rate structures on garbage disposal and recycling, and analyze the one time and ongoing costs of new program 3 development. This flexible modeling tool would allow for various rate scenarios of new programs, short -term and long -term implementation dates, and waste diversion impacts. Recent projects completed by HDR include the development of Zero Waste Master Plans for the cities of San Jose, Alameda, Palo Alto, and Austin, Texas. HDR is currently working with the City of Los Angeles on the development of their 20 -year Zero Waste Master Plan. The firm has recently been selected by the City of Pasadena to develop that city's Zero Waste Strategic Plan. HDR also has experience in collection efficiencies and alternative /conversion technology analysis. Financial Impacts & Budget Actions The professional service agreement to be awarded to HDR Engineering, Inc. for the Zero Waste Strategic Plan and rate structure analysis is $149,360. Sufficient funds are included in the FY2011 -13 Division's budget; this agreement will be charged to account 27441.555060. Prepared by: Kim Braun, Resource Recovery & Recycling Manager Approved: ,_4 - I Martin Pastucha Director of Public Works n rwarded to Council: Rod Gould City Manager Reference Contract No. 9510 (CCS)