SR-03-19-2013-3A.awa
City of
Santa Monica
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City Council Meeting: March 19, 2013
Agenda Item: 3°
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Professional Service Agreement for Resource Recovery & Recycling
(RRR) Rate Study
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a professional service agreement with HF &H Consultants, LLC, a California -
based company, in an amount not to exceed $67,500 to conduct a study of RRR rates
(Phase 1). Council approval is necessary since the cumulative value of services
provided by HF &H Consultants is greater than $70,000 over a three year period.
Executive Summary
In November 2011, Council awarded a professional services agreement to HDR
Engineering to develop the Zero Waste Strategic Operations Plan. HDR Engineering
retained HF &H Consultants to perform the financial and cost analysis of the proposed
zero waste programs. Now that the draft Zero Waste Strategic Operations Plan has
been completed staff recommends HF &H Consultants to complete Phase I of the RRR
rate study for an amount not to exceed $67,500. HF &H Consultants was previously
retained in FY 2010 -11 to review the feasibility of maintaining the City's transfer station
for an amount not to exceed $25,000.
Background
The RRR rates have not been increased, except by CPI since FY 2006 -07. In 2009,
Finance retained the services of R3 Consulting Group to review the RRR rate structure
and recommend new rates as the fund balance was declining. This project was placed
on hold in 2010 until the Zero Waste Strategic Operations Plan (Plan) could be
developed.
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On November 22 2011, City Council awarded Professional Service Agreement No.
9510 (CCS) to HDR Engineering to develop the Plan. HF &H Consultants was retained
by HDR Engineering as a sub - consultant to perform the financial and cost analysis of
the proposed zero waste programs and assess the customer impacts.
Discussion
The development of the draft Zero Waste Strategic Operations Plan has been
completed and is before Council for review and comment at the March 19th Council
meeting. This study is proposed to be completed in phases with the first phase
addressing the City goals to maintain a positive fund balance, provide for adequate fund
reserves and develop rate equity among customer classes. It is expected that this first
phase will be completed by May 2013 to be ready for inclusion in the budget review
process.
Once Council has reviewed and adopted the Zero Waste Strategic Operations Plan, the
second and third phase of the rate study would be initiated by HF &H Consultants.
Phase II would identify various types of rate structures that could maintain funding for
operations in a zero waste environment. Once the structure has been identified, Phase
III will be initiated by HF &H Consultants. This phase would redistribute the cost for
collections and street sweeping services into the new structure and would also build in
the cost of the new zero waste programs over the implementation schedule for the first
five years. The cost for Phase II and III is not included in the amount of this
professional service agreement. Staff would return for Council approval of Phase II and
III at a later date.
Consultant Selection
RRR staff recommends selecting HF &H Consultants to perform the rate study on a sole
source basis as this study is the next step of an ongoing process to implement the Zero
Waste Strategic Operations Plan. As part of the selection process for retaining a zero
waste consultant, interviews were held with qualified primary consulting firms and those
firms' financial subconsultants. The financial section of the Zero Waste Strategic
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Operations Plan was crucial to the success of the project. The team of HDR
Engineering and HF &H Consultants presented a competitive proposal. Their
understanding of the project, competitive rates and prior experience made them the
best qualified bidder.
Retaining HF &H Consultants to complete the rate study is cost effective and more
efficient, which benefits the City at this time. HF &H Consultants has compiled all of the
data needed to move forward with the rate study as a result of work performed for the
Zero Waste Strategic Operations Plan. In addition, HF &H Consultants has a clear
understanding of RRR's financial goals as they apply to the Zero Waste Strategic
Operations Plan and can begin the project immediately. Using another consulting firm
would delay the City's rate study analysis and target goal of completion by the end of
this fiscal year.
HF &H Consultants is a nationally recognized financial and management consulting firm
with substantial experience in performing rate analysis, as well as other financial and
management services. HF &H Consultants' experience in the financial field, their
knowledge and data compilation of RRR's cost service allocation, and their work on the
zero waste program costs provides them with the best understanding of RRR's financial
goals. Based on the foregoing, HF &H Consultants is recommended to conduct a study
of RRR rates.
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Financial Impacts & Budget Actions
The professional service agreement to be awarded to HF &H Consultants, LLC is for an
amount not to exceed $67,500. Funds are available in the FY2012 -13 budget in division
27441. The agreement will be charged to account 27441.555060.
Prepared by: Kim Braun, Resource Recovery & Recycling Manager
Approved:
WaQ�ck
Martin Pastucha
Director of Public Works
Forwarded to Council:
Rod Gould
City Manager
Reference Contract No.
9719 (CCS)