SR 11-27-2018 3I
City Council
Report
City Council Meeting: November 27, 2018
Agenda Item: 3.I
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To: Mayor and City Council
From: Susan Cline, Director, Public Works, Resource Recovery & Recycling
Subject: Award Contract for Resource Recovery and Recycling Operational Analysis
and Solid Waste Rate Study
Recommended Action
Staff recommends that the City Council:
1. Award RFP #192 to R3 Consulting Group, Inc., a California -based company, for
a Resource Recovery and Recycling operational analysis and solid waste rate
study for the Public Works Department; and
2. Authorize the City Manager to negotiate and execute a professional services
agreement with R3 Consulting Group, Inc. in an amount not to exceed $352,075.
Summary
Council approved the last significant solid waste rate adjustment in 2014. A new rate
study is needed to help set solid waste rates beginning tentatively in 2020 to support the
City’s long-term sustainability and zero waste goals. Retaining a consultant to conduct a
rate study is consistent with industry best practices for municipal agencies and allows
for an objective evaluation of the City’s solid waste practices and services. Staff
recommends that the City award a professional services agreement with R3 Consulting
Group, Inc. to conduct a solid waste rate study, a thorough review of the Resource
Recovery and Recycling Division’s operations, and an update to the Zero Waste
Strategic Operations Plan. The base cost of the project is up to $284,640; the final total
cost, including elective auditing services, would not exceed $352,075.
Discussion
The Resource Recycling and Recovery (RRR) Division provides refuse, organics, and
recycling collection services, street sweeping, sidewalk cleaning, and hazardous waste
management to all Santa Monica residents and businesses. The City’s fiscal policies
recommend setting solid waste rates at levels that fully cover the total direct and indirect
costs of RRR’s programs. Rising costs in waste disposal and transportation, the
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skyrocketing expenses in recyclable material processing due to China’s National Sword
waste ban, and RRR’s yet to be determined financial contribution to the City Yards
Modernization Plan are outpacing the current annual Consumer Price Index (CPI) rate
increases and therefore necessitate a rate review.
On January 14, 2014, the City Council adopted the Zero Waste Strategic Operations
Plan (Zero Waste Plan) as part of the City’s continuous commitment to be a
sustainability leader (Attachment A). The Zero Waste Plan identified new policies,
programs, and infrastructure that would enable the City to reach its progressive goal of
diverting 95% of trash from landfills and a per capita disposal rate of less than 1.1
pounds per person per day by 2030.
On May 13, 2014, Council approved increases to the solid waste rates (Attachment B).
The three-year rate plan increased the solid waste rates annually by 1% (multi-family
customers), 3% (single-family customers), and 7.25% (commercial customers), from FY
2014-15 through FY 2016-17 to support various RRR services and zero waste
programs. Since then, rates have been adjusted annually by the C PI only. Revenues
from solid waste collections have been approximately $25 million per year for the past
three years.
Almost five years after the introduction of the Zero Waste Plan and the last significant
solid waste rate increase it is time for a thorough review and update of the plan as well
as a reassessment of the solid waste rates. Staff believe s prudent rate decisions can
only be made after a deep analysis of current programs and infrastructure . Therefore,
this project would also include a comprehensive operational analysis of the RRR
Division to identify potential cost savings and unrealized revenues if possible. The
ultimate goal of this project is to determine how to continue striving toward the City’s
long-term sustainability goals while preserving the health of the RRR Enterprise Fund.
Past Council Actions
January 14, 2014 (Attachment A) Adoption of Zero Waste Strategic Operations Plan
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May 13, 2014
(Attachment B)
Adoption of revised solid waste rates
Project Scope
The RRR Operational Analysis and Solid Waste Rate Study requires professional
consultant services in the following areas:
Zero Waste Plan Review and Update – conduct a metric-driven analysis on whether
the City is on track with its goal of 95% diversion by 2030 and provide revised zer o
waste strategies and cost estimates if necessary
Staffing, Routing, and Vehicle Efficiency Analysis – perform a detailed examination
of RRR’s staffing, routing, billing, and fleet structures and provide recommendations on
how to maximize operational functionality and efficiency while ensuring fiscal prudence
Technology and System Review – complete an evaluation of RRR’s current
technology systems and recommend opportunities to enhance operational efficiency,
customer service, and billing accuracy
Community Engagement – conduct a robust community outreach process that allows
residents and businesses to learn about the draft Zero Waste Plan Update and draft
rate study and provide input
Rate Study and Financial Analysis – the results from the first four components, and
the identified cost-savings and revenue changes, would be incorporated into the
financial analysis and rate study recommendations
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Consultant Selection
RFP Data
RFP
Posting
Date
RFP Posted
On
RFP Advertised
In (City Charter &
Municipal Code)
# of Vendors
Downloaded
# of Submittals
Received
Date
Publicly
Opened
8/16/2018 City's Online
Bidding Site
Santa Monica
Daily Press 56 3 9/27/2018
RFPs Received Selection Criteria
HF&H Municipal Code SMMC 2.24.073
MSW Evaluation Criteria
Training/credentials/experience,
competence/skill, ability to perform services
promptly, sufficiency of financial/other
resources, character/reputation, and price.
R3
Justification to Award
An evaluation committee composed of staff from the City Attorney’s Office and Public
Works Department reviewed the three proposals received. The committee then
interviewed two shortlisted firms: MSW and R3. Staff recommends R3 as the best
qualified firm based on their comprehensive proposal, Santa Monica experience,
synergistic team approach, and sophisticated work samples.
R3 has conducted hundreds of solid waste consulting projects and has previously
consulted for the City on the 2009 solid waste rate study. To undertake this sizable
project, R3 proposed collaborating with three accomplished subconsultants with whom
the firm has had a longstanding and successful work history: Sloan Vazquez McAfee,
HDR, and Abbe & Associates. Sloan Vazquez McAfee has performed operational
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studies for RRR in the past; HDR drafted the City’s Zero Waste Plan; and the principal
for Abbe & Associates was a former analyst with HDR and has a deep understanding of
zero waste plans, including Santa Monica’s.
By capitalizing on the expertise and resources of the most qualified leaders in their
respective areas, R3 can ensure multiple components of the project are concurrently
implemented in the most time-efficient manner, information is synthesized methodically
and thoughtfully, and the most responsible and prudent solid waste rate
recommendations can be formulated.
Next Steps
The R3 consultant team would simultaneously engage in all facets of this year-long
project running through October 2019. A first round of community engagement would
take place around March 2019, followed by a presentation of the draft rate study to
Council in May 2019. A second round of community engagement and rate study fine -
tuning would ensue, culminating in the presentation of the final rate study to Council and
the Proposition 218 notice in August/September 2019 and subsequent rate adoption in
October 2019. New solid waste rates would be tentatively effective in January 2020.
Financial Impacts and Budget Actions
Staff seeks authority to award an agreement with R3 Consulting Group, Inc. to complete
an RRR operational analysis and solid waste rate study. The base cost of the project is
up to $284,640; the total project cost is dependent on the amount of elective auditing
services required as the project progresses but will not exceed $352,075.
Professional Services Agreement Request
FY 2018-19 Request Amount
Public Works
Department
RRR Division Account #
Total Contract Amount
$342,075 54500002.552010 $352,075
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Prepared By: Yvonne Yeung, Principal Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. January 14, 2014 Staff Report (Web Link)
B. May 13, 2014 Staff Report (Web Link)
C. R3 Consulting Group Oaks Initiative Disclosure Form
� ,, . ._ I l'I>•••• iln·iilt•.ii' CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a "public benefit." If the "public benefit" is sought by
an entity, rather than an individual person, the information includes the name of every
person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten
percent interest in the entity.
Public benefits include:
1.Personal services contracts in excess of $25,000 over any 12-month period;
2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-
month period;
3.Purchase, sale or lease of real property to or from the City in excess of $25,000
over a 12-month period;
4.Non-competitive franchise awards with gross revenue of $50,000 or more in any
12-month period;
5.Land use variance, special use permit, or other exception to an established land
use plan, where the decision has a value in excess of $25,000;
6.Tax "abatement, exception, or benefit" of a value in excess of $5,000 in any 12-
month period; or
7.Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12-
month period.
Name( s) of persons or entities receiving public benefit:
Name(s) of trustees, directors, partners, and officers:
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
Prepared by:½ic If) cu::d l(}go(e -E.r c,.c:;: o Title: Tus; d-en-1 ,/'O l ---...... . .-) I \ 5Signature: �\ ,k =-"-;/ �-Date: IO -c1-cx -__
Email: I' k ( (j) 1 n rljt', r ·3 c �'.�;, , CO m Phone: 9 lle -Ti;:;, -7 ,g,;q
FOR CITY USE ONLY:
Bid/PO/Contract# ________ _ Permit# ---------
R3 Consulting Group, Inc
Richard Tagore-Erwin, R3 President & Garth Schultz, R3 Secretary
Richard Tagore-Erwin and Garth Schultz
REFERENCE:
Agreement No. 10781
(CCS)