HomeMy WebLinkAbout10/03/1995, C-6 - USE OF ENHANCED PROMOTIONAL FUNDS FOR VISITORS AND CONFERENCE BUREAU COUNTY-WIDE VISITORS SURVEY MEETING DATE:
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COUNCIL AGENDA REPORT 'TEM UM ER:
FROM: Ken Hampian, Assistant City Administrative Officer l�
Prepared by: Wendy George, Assistant to the CAO w�
SUBJECT: Use of Enhanced Promotional Funds for Visitors and Conference Bufeau
County-wide Visitors' Survey
CAO RECOMMENDATION:
1) Approve the Promotional Coordinating Committee's (PCC) recommendation to contribute
$5,000 from Enhanced Promotional Funds to the Visitors and Conference Bureau (VCB) for a
county-wide visitors' survey; and 2) authorize the Mayor to sign an amendment to the VCB's
contract to that effect.
DISCUSSION
Background
Last March, the Visitors and Conference Bureau (VCB) submitted a request to the City for
$20,000 of the City's 1994-95 Community Development Block Grant (CDBG) allocation to help
fund a proposed very expensive($150,000) three phase county-wide Tourism Development Plan
project. The majority of the funding was to come from the County, with incorporated cities
contributing in a proportionate manner. This proposal was not well received by the various
agencies, given its cost.
just prior to the City's public hearing to determine CDBG allocations, the VCB modified and
scaled back the proposal, with the VCB Executive Director requesting a$5,000 City contribution
during the public hearing itself(instead of$20,000). The City Council chose not to support this
request with CDBG funds, but agreed to reconsider funding the scaled down Tourism
Development Plan at a later time when the scope of the project was more clearly defined and
commitments had been made by the County and other cities.
Revised Proms
Starting last spring, the VCB's Public Affairs Committee began working to redefine the scope
of the Tourism Development Plan and prepare a draft request for proposals (RFP) for the first
phase. The revised three-phase Tourism Development Plan is intended to:
• Gather hard data on visitor characteristics and preferences (Phase 1);
• Identify in very specific ways the county's tourism "assets and liabilities", including
what residents will accept and offer in support of tourism (Phase In; and
• Integrate the results of the two studies and make recommendations about the future
����i ►�IIIIIII�pIIUIII city of San tuts OBISpo
COUNCIL AGENDA REPORT
Survey Page 2
of tourism in SLO county (Phase III).
In response to the first phase of the plan, the UCSB Economic Forecast Project has submitted
a proposal to the VCB to do a county-wide visitor survey. The study will distribute 10,000
questionnaires using the field tested document shown in Attachment B. The forms will be
distributed at specific locations which cover all geographical area of the county. Distribution
locations will be tourism related and fall into the categories of hotels/motels, campgrounds, all
types of restaurants and attractions such as Hearst castle. The survey will include the four
quarter period from July 1995 - June 1996 and the results will allow UCSB to derive a tourism
profile for the county to be published as a report.
Because of the need to begin the survey during the summer months when tourism is high, UCSB
has actually begun the survey project using funding from other agencies participating in the
consortium. These agencies are the County ($5,000), the City of Paso Robles ($3,000), the City
of Atascadero ($1,000) and the City of Grover Beach ($1,000). Due to recent economic
difficulties, the cities of Morro Bay, Pismo Beach and Arroyo Grande have chosen not to
participate in the survey.
PCC Recommendation
Part of the CAO's recommendation in the agenda report concerning approval of the VCB's
contract was that the UCSB Economic Forecast Project proposal should be reviewed by the
PCC, with the requested $5,000 funding coming from the PCC's Enhanced Promotional Fund
if the PCC recommended participation. The Enhanced Promotional Fund was created when the
Transient Occupancy Tax was increased from 9% to 10%, with the funds to be used to initiate
new promotional efforts designed primarily to improve off-season tourism.
After sending a representative to the initial organizational meeting and reviewing the survey
document, the PCC voted unanimously, at its September 13, 1995, meeting to recommend
contributing $5,000 of the Enhanced Promotional Fund to the survey project.
The PCC felt that even though all the cities in the county were not participating in the project,
it was important for the City of San Luis Obispo to do so as a way of filling a rather
conspicuous void in our promotional program. Currently, a tourism development plan does not
exist in San Luis Obispo County and, as a result, programs and strategies have evolved over the
years in a rather ad hoc and independent manner, based on past experience and what might be
considered "gut feeling". This approach does not maximize the use of the limited public and
private resources available to promote tourism and increases the risk that efforts may be out of
step with tourists and/or residents. The PCC believes, and staff concurs, that given the
relationship of SLO County tourism to the City's local economy, the improved information and
strategies coming out of the survey should override the fact that not all cities are participating.
�����►�i►►�►IIIIII�II°�'u►���IN City Of San LUIS OBISPO
COUNCIL AGENDA REPORT
Survey Page 3
CONCURRENCES:
The City Administrative Officer is highly supportive of creating a formal tourism development
plan. Included as Attachment .0 is a 1993 letter from the CAO to the Economic Strategy Task
Force (ESTF) which discusses in detail the need for such a plan. The ESTF was also supportive
of such a plan. The UCSB survey is the first step in this process and will provide the hard data
necessary to develop future tourism strategies.FISCAL IMPACT:
FISCAL EMPACT:
The entire cost of the survey.is$15,000, with the City being asked to contribute $5,000. There
is currently $50,000 in the Enhanced Promotional Fund available to support this cost.
Examples of programs supported through this source in the past include the Film Festival,
Decemberfest and the 101 sign project. The PCC will be developing a plan for allocating the
rest of the Enhanced Promotional Fund at its October meeting and will be coming to the
November 7th Council meeting for approval of that plan.
ATTACEM ENTS:
A. Contract Amendment
B. Survey Document
C. CAO Memo
c- G -3
AMENDMENT NO. 1
VISITORS AND CONFERENCE BUREAU AGREEMENT
The AGREEMENT dated July 20, 1995, between the CITY OF SAN LUIS OBISPO,
a municipal corporation, hereinafter referred to as "City" and the COUNTY OF SAN LUIS
OBISPO VISITORS AND CONFERENCE BUREAU, hereinafter referred to as "Contractor",
is hereby amended as follows:
EX IBIT "A", "Scope of Work", Section 4, is modified as follows:
g. Coordinating a Baseline Visitor Study for San Luis Obispo County as proposed
by UCSB Economic Forecast Project in Attachment 1 to this amendment.
SECTION 4, "City's Obligations" is modified as follows:
I
■ Visitor Survey $5,000
All other terms and conditions of the AGREEMENT remain the same.
Both CITY and CONTRACTOR do covenant that each individual executing this
addendum on behalf of each party is a person duty authorized and empowered to execute
Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
on this day of October, 1995.
ATTEST: CITY OF SAN LUIS OBISPO
A municipal Corporation
Acting City Clerk Allen Settle, Mayor
APPROVED AS TO FORM: CONTRACTOR
Jeffrey�Jo genseai, City Attorney "Io 1i Biaginni, Executive D'
Mark Schniepp E33-2576 Z+I ;ti25i35 U i l: o r ;A `; c
ATTACHMENT 1
Visitor Study
San Luis Obispo County
An analysis of visitor characteristics and frequency
Study to be prepared by: The i:CSB Economic Forecast Project
Study to be prepared for: The San Luis Obispo County Conference
and Visitors Bureau
Address: 1041 Chorro Street
Suite E
San Luis Obispo, CA 93401
Contact Person: ]onni Biaginni, Executive Director
phone: 541-5000
Period of the study: August 1, 1995 - September 15, 1996
Study cost: S15,000
Key elements of the study by principal task:
I. Visitor Survey
II. Derivation of the tourism model
I11. Ongoing presentation of tourism statistics in the annual Economic Outlook
IV. Stand alone report to the SLO Conference and Visitors Bureau
(Dark Scnniepa E43 2076 C1 U i:C6 1;•i U -.
SCOPE OF THE STUDY
I. Visitor Survey
A visitor survey will be conducted with the cooperation of particular hotels, restaurants,
and other tourism facilities in San Luis Obispo County.
The Forecast Project will produce the form, test the form, and finalize the form with
comments form the SLO CVB. We will provide the SLO CSB with a camera ready survey
form by August 1, 1995.
We should state that personal interviews would better insure that the sample is random
and representative, and that is our recommendation to the CVB. Our personal interview
approach would guarantee successful and random survey results. However, the SLO CVB
has indicated that self-selection survey distribution at various locations (establishments)
around the county is their preference because more surveys can be obtained for the cost
of the project.
Completed surveys will number 5;000. They will be collected randomly at locations
determined by the SLO CVB over the course of 1 year, August 1, 1995 to August 1, 1996.
Surveys gill be collected from the various locations on a monthly basis by the CVB. The
surveys will be forwarded to the Forecast Project after they are collected by the CVB. The
Forecast Project will monitor the numbers of surveys that are collected on a monthly
basis:
Establishment Surveys vis a vis personal interview survey
Surveys placed at particular locations do not require persons to ask the questions or
collect the survey. Surveys placed at fixed locations are subject to self-selection survey
bias and other problems. Other problems include incomplete surveys, inconsistent
surveys, and randomization problems with respondents.
Some of these problems can be addressed. We recommend the over-distribution of
survey forms to meet the target of 5,000 surveys.
The number of surveys necessary for the analysis breaks down like this:
surveys that surveys likely valid surveys
need to be to be to be used in average
disseminated' received2 the analySis3 per month4
10,000 surveys: 6,000 4,600. 375
15,000 surveys: 7,500 6,750 563
'distributed or placed at locations for visitors to fill out
2by the Forecast Project for electronic entry,validation,and error checking. This represents the number of
surveys at each location that will be tilled out by visitors and sent to the SLO MMB and forwarded to the
Economic Forecast Project.
3This represents the number.of surveys that will be usable after 10 percent are discarded due to problems
associated with incompleteness, non-representiveness, inconsistency, etc.
4the average number of usuable surveys per month. This shows the minimum necessary number of valid —G-�
sur•evs that must be collected on average per month for the 12 month survey period.
Mork Schniepp 0
Between 10,000 and 15,000 copies will need to be distributed throughout the year at a
number of locations in order to obtain between 5,000 valid surveys which will be used in
the analysis and development of the tourism model.
The locations need to be determined and discussed with maximum input and help from
agents at each location who will foster the completion of the survey and the delivery of
the survey to the SLO CVB and ultimately to the UCSB Economic Forecast Project. The
selection of the locations is critical to the random component of the study. Locations
must be distributed about the county. Locations must not necessarily be overnight
visitor using only, such as limiting or concentrating the survey at hotels or motels.
Locations must include attractions of day visitors to San Luis Obispo County.
There must be extreme care taken in how the surveys are distributed and/or collected.
Critical factors in the distribution and collection of surveys:
(1) representative distribution of surveys per month, August 1995.-July 1996 .
(2) representative distribution of tourist type, i.e.
young or old, male or female, day or overnight visitor,
business or vacation visitor, visitor staying with family/friends or
in formal accommodations, etc.
(3) locations of surveys that are representative tourist destinations and
that do not discriminate against a particular type of visitor such
as the day visitor.
II. Derivation of the Tourism Model
The survey results will provide the Forecast Project with information necessary to derive
a number of visitor indicators, including:
total overnight visitors
total daily visitors
total visitors
total visitor expenditures
total visitor expenditures on lodging
total visitor expenditures on food
total visitor expenditures on retail goods
average occupancy rate
average price paid per room
average length of stay
average group size
These indicators will be calculated annually and updated annually.
Together with the survey results, the Forecast Project will use estimates of average
hotel/motel occupancy and bed tax collections.
I have attached a copy of Tourism chapter from the 1995 Santa Barbara County Economic
Outlook. The statistics that we routinely present in the Santa Barbara County Economic
Outlook are presented on page 72. Though actual data for the 1992 through 199$ period is n
shown in the table, our database actually includes this information every year since 1972. ` - G-
These same tourism statistics will be enabled for San Luis Obispo County once the stud} is
complete. The statistics will also be updated annually using:
(1) bed tax collections for all cities in the county, and
(2) estimates of average hotel/motel room occupancy for San Luis Obispo
from the California Hotel and Motel Association's California Tourism Barometer.
The development of the tourism model will mandate that we add back to the survey, the
question about room price, total expenditures that a visitor and his/her group spend
during their entire stay, and household income. That amounts to 20 questions if we also
retain those questions that the CVB added to the first draft survey.
III. Economic Outlook
Each year in November, the Forecast Project will publish the results of the visitor
indicators in a 4 to 6 page chapter on Tourism in the annual Economic Outlook for San
Luis Obispo County.
We will prepare a table similar to the one shown in the Santa Barbara County Economic
Outlook listing all of the visitor statistics.
N. Stand Alone Report
We will provide the C1rB with a report of the results of the visitor survey including ?
interim reports as the surveys are compiled. The stand alone report will shoe the
frequencies and means for all of the visitor questions by quarter and for the entire 4
quarter period, August 1995 - July 1996.
Mark Scnniepp 9i��ia� `J ' ',:�c u
V. Schedule
The schedule of tasks is as follows. The CNB should note those dates marked with a * so
that surveys can be forwarded to the Forecast Project on time for subsequent analysis
and to prepare the ? interim and 1 final report.
Principal Task Completion Date
Begin study August 1, 1995
Prepare survey August 3
Test survey August 10
Make changes to survey form August 12
Disseminate Camera ready
survey to CNB August 15
First surveys to be received from
SLO CVB for month of August September 4*
Surveys to be collected by the SLO CVB
and forwarded to the Forecast Project
for month of September October 3"
first interim memo report to
SLO CNB on August/September
survey responses October 20
Surveys to be received from SLO CNB
for month of October November I*
Preliminary economic analysis of survey
results for use in SLO Outlook publication
using August-September-October results November 7
Preliminary write-up in the 1996
San Luis Obispo County Economic Outlook November 16
Surveys to be collected by the SLO CNB and
forwarded to the LCSB Economic Forecast Project
by the third of the month following the month of
collection December 1995 -August 1996*
Second interim report to the SLO CVB March 10, 1996
Final month of survey collection by the CNB July, 1996
Draft final report to the SLO CNB August 30, 1996 �r
Final report to the SLO CVB September 13, 1996
I `J b1ark Schhiepp c��-Gb7o , u• ._c �;•, U _
VI. Cost
1. Cost Summary
The cost to conduct this study is: 515,000
Payments are to be made on a quarterly basis for the August '95 - Sept. '96 year:
November 1,
February 1,
May 1, and following submittal of the final report on
September 15
2. Cost Detail
personal interview costs: S 0
electronic entry,validation, error checking, and
correction*
5,000 surveys S 5,000
analysis S 5,500
response frequencies, simple statistics,
model development, testing, and data
presentation in tables and charts
survey frequency tables preparation: S 2,000
stand alone report preparation: S 1,500
misc supplies (paper/telephone) S 1,000
additional resource costs to process surveys
exceeding 5,000: cost per each 1,000 surveys S 950
Total Cost: 5,000 surveys: S15,000
* cost based on 4 minutes per survey, 15 per hour. Economies of scale (3 minutes per
survey) are realized for 10,000 to 15,000 surveys. Further economies (2 minutes, 45
seconds) are realized at 20,000 surveys.
42071 San Luis Obispo County
Visitor Survey
Please take a moment to fill out the following questionaire which will enable local tourism officials to
better serve your future tourism needs in the county. Please fill in the bubble completely.
1.Where is your principal residence located? State Code
F -F]
O USA: city & state
O Another Country Zipcode j
2. How many people are in your group?
O just myself 02 03 04 05 O more than 5: (how many)
3. How many nights are you staying in San Luis Obispo County? .
O'day visit only O 1 night O 2 nights O 3 nights O more than 3 nights: =
(how many nights)
4. In which cities in San Luis Obispo County are you staying overnight? (check all that apply)
O Arroyo Grande O Cambria O Oceano O San Simeon
O Atascadero O Grover Beach O Nipomo O San Luis Obispo
O Avila Beach O Los Osos O Paso Robles O Templeton
O Cayucos O Morro Bay O Pismo Beach O other.
5. What cities will you visit while in San Luis Obispo County? (check all that apply)
O Arroyo Grande O Cambria O Oceano O San Simeon
O Atascadero O Grover Beach O Nipomo O San Luis Obispo
O Avila Beach O Los Osos O Paso Robles O Templeton
O Cayucos O Morro Bay O Pismo Beach O other:
6. What kind of accommodations are you using?
O hotel O motel O friends or family O bed & breakfast O camping O other:
7. How many rooms are you and your group staying in? (if applicable)
m rooms
S. How much do your accommodations cost per room per day?
O no cost O $1-$49 0 $50-$74 O $75-$99 0 $100-$149 0 $150-$199 O $200 and over
9. Approximately how much do you anticipate spending during your entire stay in
San Luis Obispo County?
O $1-$99 0 $100-$249 O $250-$499 0 $500-$749 O $750-$1,000 O greater than $1,000
10. How did you travel to San Luis Obispo County?
O car O plane O bus O train O other: For administrative use only
m
continued on other side
„
ATfAQ26ENT B
L i r /
42071
11. What is the principal reason for your visit to San Luis Obispo County?
O vacation O business O traveling through to another destination
12. If you are here on vacation, are you here principally to: (check only one)
O go shopping O attend an event (which one)
O go wine tasting O outdoor recreation
O visit friends &family O other:
O visit Hearst Castle
13. In which activities do you participate while in San Luis Obispo County? (check all that apply)
O shopping O visit a museum
O biking O concerts
O bird watching O gallery visits
O water sports O tennis
O hiking O wine tasting
O golf O other:
O performing arts/theater
14. Would you be interested in traveling throughout the county via: (check all that apply)
O bicycle O RV O intracity trolley O plane O public bus O taxi O train O other:
15.What would you like to see in San Luis Obispo County to enhance your visit: (check all that apply)
O more golf courses O visual arts facilities
O more tennis courts O more biking trails
O larger aircraft at airport O major chain hotels
O children's activities O performing arts theater
O conference centers O theme parks
O major sports facility O more museums
O more shopping O more restaurants
O resort hotels O other.
16. How many times have you visited San Luis Obispo County during the previous 12 months?
O 1-2 O 3-4 O 5-6 O 7 or more i (how many)
17.What is your age? O under 25 O 25 to 34 O 35 to 44 O 45 to 54 O 55 to 64 O 65 and over
18.Are you: O Male O Female
19.What is your total household income? (check one)
O up to$20,000 O $30,000-$39,999 O $50,000-$69,999 O more than$100,000
O $20,000-$29,999 O $40,000-$49,999 O $70,000-$100,000
Thank you for taking the time to provide us with this important information. We hope you enjoy �r /
your visit and you come back often. San Luis Obispo County Visitors & Conference Bureau
■ 1041 Chorro Street Suite E, San Luis Obispo CA 93401 .CPO—
tuisIlli IIIA city of sAn
oaspo
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100
August 26, 1993
Mr. Charlie Fruit, Chairman
Economic Strategy Task Force
c/o Ken Hampian
City Hall
San Luis Obispo, CA 93401
Dear Charlie and Members of the City's Economic Strategy Task Force:
With the admission that I may be viewed as a"local government official" as opposed to a"normal citizen",
I am nevertheless going to be presumptuous enough to offer, for your consideration, some thoughts
regarding the 'Tourism" section of the Task Force recommendations. My "qualifications" are my efforts
in this area over a twenty-year period in my previous city of Monterey, and my service, for the past year
and a half, on the Board of Directors of the San Luis Obispo County Visitors and Convention Bureau,
serving as the representative of the seven cities and the County.
My initial comments will be some "observations", followed by some suggestions for inclusion within your
recommendations.
My observations are these:
1. The various elements within the community which could potentially work together in integrating
their ideas and efforts to increase the strength of our tourist economy largely operate as separate.
and autonomous entities, with little unified effort on knowledge about the activities of the others.
I'll name a few of the groups that are potential players to strengthening the visitor industry:
Chamber of Commerce, Visitors and Convention Bureau, San Luis Obispo County Historical
Museum, Cal Poly Athletics, Cal Poly Performing Arts, Cal Poly Fine-Arts, City Recreation
Department, private and non-profit sports organizations, promoters and sponsors of various
community special events,Hotel-Motel.Association,Restaurant Association,BIA.,San Luis Obispo
County Arts Council, community performing arts groups, community fine arts groups, Sierra Club,
SLO Land Conservancy, and other environmental groups interested in the preservation of open
space and improved accessibility to outdoor experiences. I'm sure I've left out some organizations
and key players who are potentially important to the full development of our "visitor industry".
Each of these organizations, to over simplify a bit, seems to go its own way,paying heed to its own
agenda, paying little heed to the existence of others, and paying no heed to the power of a creative
coalition of these groups. It's an industry based more on"separateness" than"togetherness",which
greatly limits its ability to deal with a dynamic and challenging future.
ATTACN4R.Tr c - -r
San Luis Obispo would seemingly have the potential as a center for small and medium, quality
conferences. However, except for the efforts of the Embassy Suites (and perhaps a few others),
this potential lies largely unexplored and unrealized. Strong and attracting visitor areas seek some
kind of balance between the general visitor and the conference visitor. Unlike other visitor areas,
we aren't going after the conference portion of the industry.
3. San Luis Obispo County would seemingly hold the potential as a major outdoor recreational area
and, again, no one seems to be overly zealous in pursuing this area. Activity in this area would
obviously be related to efforts to purchase and preserve open space, to create parks and playing
fields, to create improved approach-ways and access-ways to outdoor recreation areas, to increase
the number of golf courses and other public and private recreational facilities.
4. Despite our occasional bragging about our being a prime tourist area,.it is amazing that we have
not put together a tourism development plan for either the City or the County. The "tourist
industry" is a result of hundreds of independent and incremental decisions made by various
governmental and private sector entities. There has been no plan to guide the future development
of this industry nor is there one being worked on presently, but there is the critical need for such
a plan, if we're going to define our future and assign the responsibilities for getting there.
5. Though virtually everyone believes there can be economic as well as environmental benefits to this
area as a result of concentrating on the right kind of tourist economy, and most people would agree
that our area is considerably under utilizing its potential in this respect, there also has to be an
early identification, perhaps in the tourism development plan, of the appropriate limitation of the
tourist economy, and safeguards that the future tourist economy does not overwhelm other
economic sectors, and that an appropriate balance is maintained among various economic sectors.
Based on the above observations, then the following ideas can be further refined and considered:
1. There should be a tourism development planRrepared for the County with the City taking a strong
role in this process. This plan should identify the strength of our tourism industry as it exists today,
identify people's reasons for wanting to visit our area, identify the "unmet needs" of our visitors
(and our own residents), identify opportunities for greater unified effort between various potential
partners in the visitor industry, identify opportunities for visitor industry and environmental
protection efforts to serve mutual goals, identify a future "destination" as to where we want our
local tourist industry to go,and identify realistic constraints and/or limitations so that this economic
activity is kept in proper balance with other economic sectors.
2 We should idents and facilitate the coordination and cooperation of various Prospective partners
in the tourist economy. This would certainly include, as a starting point the motel-hotel and
restaurant industry, public agency recreation providers, community performing and fine arts
organizations, Cal Poly performing and fine arts and athletic components, etc. This "tourism
rams which provide a greater visitor attraction for
coalition" should be put to work planning prog
the community. There is a great potential (largely unrealized presently) to develop programs to
increase visitor attraction during the "shoulder" and "off' seasons, in an effort to "smooth out" the
summer boom and winter bust.
3. We should explore the desirability and -
ossibili of making San Luis Obispo a conference
destination for certain selected types of conferences. There is no possibility that San Luis Obispo
can or should become"all things to all men" as a conference destination. On the other hand, given
our location in the geographical center of the State, our natural area amenities, the resources of
Cal Poly, the prospective development of San Luis Obispo as a research and telecommunications
center, we could develop a plan for "right-sized" conferences emphasizing intellectual, cultural,
ecological, agricultural, professional and scientific gatherings. Our conferences, though not
necessarily large, would be known as important and significant, as leading edge, as a contributor
to the Pacific-rim community.
As implied in all the above, there should be a genuine effort to foster creative partnerships of all parties
who are related to and potential contributors to the tourist economy,with inclusion, communication and
integration becoming the new style for consciously and creatively working together.
I apologize in advance if some of these thoughts seem a bit"esoteric" or"far out". I am essentially issuing
a call to go beyond the present, with its lack of partnering and creativity, and to enter a "new era of
thinking" about a major and increasingly important part of our economy. As major parts of our private-
sector economy are in economic doldrums, and as local government has been forced into cutback
management, we.have been blessed with a visitor economy that has remained relatively strong. Despite
this good fortune, we need to realize that we have only achieved a small portion of our potential, and we
need to put together a creative coalition for going well beyond our current efforts.
Sincerely,
\ohn D nn
Ci ministrative Officer
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MEETING DATE:
City Of SAn WIS OBISpo October 3 1995
COUNCIL AGENDA REPORT ITE U R:
FROM: John Moss, Utilities Director
PREPARED BY: Ron Munds, Utilities Conse ation Coordinator
Sue Baasch, Administrative Analyst -k
SUBJECT: Request for Proposal for Residential Curbside Recycling Services
CAO RECOMMENDATION
By motion,
1) Approve the request for proposal for residential curbside recycling services and authorize staff
to solicit proposals, and
2) Approve delay in the rate setting process for San Luis Garbage and agree to provide cost
recovery to San Luis Garbage for any lost revenues as a result of this delay.
DISCUSSION
Background
At the July 25, 1995 City Council meeting, staff presented to Council recycling services
procurement alternatives. At that time, Council directed staff to seek competitive proposals for
recycling services. Staff has developed, with the assistance of Hilton, Farnkopf & Hobson
(HFH), a request for proposals (RFP). Copies of the RFP document are available in the City
Clerk's Office for public and Council review.
Staff has met with the two primary local recyclers, SLOCO Recycles and Ralcco, prior to
drafting the RFP. The purpose of these meetings was to seek their input into the process and
give them an opportunity to express any concerns they might have regarding the preparation of
the RFP. In addition, Council expressed that cost and innovation should be a significant
consideration in the selection process and this is reflected in the final draft of the RFP.
As a last step in the RFP development process, staff distributed the draft RFP to the two local
recyclers for their final input. SLOCO Recycles did not submit any comments or have concerns
with the draft RFP. Ralcco had three concerns: 1) the requirement to supply an audited
financial statement as part of the RFP; 2) the amount of the required faithful performance bond,
and 3) the requirement for a material suppliers and laborer bond. Regarding concern number
one, staff continues to recommend this requirement as the "best" submittal response, but as with
any proposal under an RFP process, we would be willing to consider variance with explanation.
However, we would require audited financial statements in the future in the franchise agreement.
Concern number three has been eliminated from the document. Concern number two has been.
reviewed by the City's insurance provider, and per their recommendation, the amount has
remained as originally drafted.
ii;��119�!vl►�IIIIIII�" ill, city of San tins OBISp0
COUNCIL AGENDA REPORT
'RFP for Residential Curbside Recycling Services
Page 2
Yard Debris Collection
Council directed staff to include yard debris collection as part of the residential curbside
recycling services. Staff has incorporated a separate green waste collection section in the RFP
in order to be able to independently evaluate the method of collection and cost of this service.
While evaluating the implications of combining residential curbside recycling and yard debris
collection, staff recognized potential inefficiencies of collection methods which could result in
a higher cost to the City's rate payers. Staff will return to Council after evaluating the RFPs
and prior to awarding the residential curbside recycling services contract with a recommendation
regarding yard debris collection, processing and marketing.
Other RFP Highlights
In addition to the standard information (i.e. collection methodology, estimated curbside tons,
processing methods, financial information, etc.) needed to make a qualified selection for
residential recycling services, staff has required proposers to include the following:
■ A description of the firm's initiation experience to include lead time and critical path or
other time charts used in start-up of similar situations.
■ An implementation plan describing timelines and estimated start date including equipment
procurement to provide the recycling services.
■ A description of future recycling services.
■ An explanation of how the firm's proposal will bring innovation and/or cost savings to
the City's residential recycling services.
It is made clear in the Section C (3), Proposal Evaluation and Selection that the award of the
contract will not be based solely on price but on a combination of factors as determined to be
in the best interest of the City. Staff believes the materials requested in the RFP will provide
the valuable information needed to select the best residential recycling service for our
community.
CONCURRENCE
SLOCO Recycles, Ralcco and the Finance Department concur with recommendations made in
this report.
I��►�►�►iV�lllllillp1iV1°►�I��IU city of San LUIS OBISp0
j COUNCIL AGENDA REPORT
RFP for Residential Curbside Recycling Services
Page 3
FISCAL IMPACT
Based on preliminary survey information, staff expects to receive proposals with monthly unit
charges ranging from $.50 to $1.50 for the residential recycling program (with no green waste
recycling service). There are approximately 10,000 single and multi-family service units in the
City of San Luis Obispo, therefore, the total annual residential recycling program costs should
be in the range of$60,000 to $180,000 annually. Sales of recyclable materials will offset the
program costs and should reduce the monthly per unit charges. All proposers are required to
state projected lump sum program costs as well as estimated revenue from recyclable materials
sale.
Because this process potentially impacts the city's "Integrated Waste Management Rate
Setting", staff has met with the San Luis Garbage Company regarding the delay of any annual
rate application until such time as this process has been completed. San Luis Garbage Company
has agreed to this request, with the understanding that such delay will not prevent them from
recovering any revenue they would have been otherwise entitled to under a normal rate-setting
process for an interim year application. Normally, any requested change in solid waste rates
would be presented to Council for consideration in late September or early October, for a
January 1 implementation. Staff should be able to present a revised rate-setting schedule at the
time a recommendation for award of the residential recycling services contract is brought to
Council.
Therefore, staff is recommending to approve delay in the rate-setting process for San Luis
Garbage and to agree to provide cost recovery to San Luis Garbage for any lost revenues as a
result of this delay. Cost.recovery would not exceed those amounts to which the company
would have otherwise been entitled.
NOTE: The Request for Proposal document, including a Draft of the Residential
Recycling Franchise Agreement, is available in the Clerk's office and Council
reading file for public and Council review.
I
I
I
I
■ MAIL....ADDRESS: P.O.DRAWER 1170
Lv 1 NIPOMO,CALIFORNIA 93444
■ PLANTS: HIGHWAY 1 &801 RALCOA WAY
NIPOMO,CALIFORNIA 93444
1291 MESA VIEW DRIVE
CORPppP ARROYO GRANDE,CALIFORNIA 93420
■ PHONE: (805)343-2289
RETURNING TO A RESOURCEFUL AMERICA ■ FAX: (805)343-5515
COUNCIL ❑ CD?UR
°JT'CAO ❑ FIN Di I
Bill Roalman i CAO ❑ FIRE CHIEF October 3, 1995
Council Member fPTTOPNEY ❑ PW DIR
City of San Luis Obispo y CLERK R:C 1:1 POLICE CHF s MEETING
990 Palm Street 0 MGMTTEAM ❑ REC DIR a�AGENDA
❑
San Luis Obispo, CA 93401 jr'R •D Fli_E e TIL DIR DATE ' ITEM # d-17
o ❑ PERS-7R
Dear Council Member Roalman,
Thank you again for requesting proposals for City recycling services. Our Mesa View Recycling
Center is close to being completed. After we get a few more finishing touches done, I look
forward to taking you on a tour of the facility.
RALCCO will provide San Luis Obispo with a competitive proposal for excellent residential
recycling services. After reviewing your staff report and draft RFP I would like to bring two
important issues to your attention.
1. Will commercial recycling services be separated out for competitive proposals?
Data that we put together from your Solid Waste Generation Study and City records show how
important commercial recycling is:
♦ 75%of the tons of the most profitable materials are in the commercial/industrial waste
stream.
• The commercial recyclables are collected from about 10%of the total accounts
♦ Residential accounts produce only 25%of the tons of these most valuable materials
♦ Residential recyclables must be collected from over 9,400 accounts, or 903ro of the
accounts.
Residential recycling means much higher costs for collection and billing with much lower revenue
potentials while commercial recycling holds the vast majority of material volumes and revenue
for much less cost.
Because we base our business on a profit margin and not on increases in rates, whether or not
San Luis Obispo intends on including the revenue potential of commercial recycling in a
competitive process is important information for us.
Your Council expressed an interest in separating out recycling activities and accounting from
garbage hauling and disposal. This current RFP and contract leaves the majority of recycling
profits still embedded in garbage hauling.
Recycling is a resource management activity with exciting economic development potential. It is
no longer linked to garbage hauling and disposal.
Here are some questions that I have: RECEIVED
CITY COUNCIL
C6M i i--^ ,a
1. Does the City plan to solicit proposals for commercial recycling?
2. After award of the residential recycling contract, will San Luis Garbage Company
automatically keep collecting from the high profit commercial accounts ?
3. Will commercial recycling still be included in garbage hauling through the next garbage rate
increase process?
4. Will San Luis Garbage Company be asked to sign a contract for commercial recycling services
without competition?
5. What is the expected impact on garbage rates if San Luis Garbage loses residential recycling
activities?
6. If the City is soliciting proposals for yard waste collection, why does the draft contract say
that the City has entered into a contract with San Luis Garbage Company for the collection,
processing and diversion of yard waste from residential properties?(Page 1)
2 RALCCO is happy to provide the City with audited financials.
However, these statements have not been a requirement for us in any other city, and
consequently:
We understand the desire of the City for risk protection, and the need to be satisfied with the
financial capability of the contractor. Article 10.5 of the draft agreement requires a faithful
performance bond equal to 125% of the contract amount, as is typical in construction contracts,
for example. This assumes that the bonding company has performed a diligent review of the
contractor's financial status, and consequently guarantees completion of the contract. This
insulates the City from any financial risk associated with execution of the contract.
Preparation of audited financial statements cannot be completed within the time frame
requested, and are also a significant expense ($10,000 to $15,000) when the submitted proposal
may not be awarded the contract.
We would respectfully request that:
The performance bond be considered sufficient proof of financial reliability, and that it provides
the City with suitable protection from default.
If the audited statements are required, that they be required only of the successful bidder after
award of the contract when they would become part of the public record.
Again, thank you for the opportunity to provide San Luis Obispo with a competitive proposal for
recycling services.
The competitive process benefits both the public and private sectors. Competition encourages
lower rates, more stable rates, higher quality services and local economic development. I hope
you consider giving RALCCO an opportunity to compete for commercial recycling services.
Sincerely,
Steve Aslanidis
MEETING ,AGENDA CI
DATE 10ITEM #
B'COUNCIL ❑ CDU UIR
October 2, 1995 cn0 ❑ FIN DIR
!ffK ❑ FIRE CHIEF.
MEMORANDUM 37ORNEY ❑ PW DIR
p✓CLERKPORIG ❑ P1OLICE CHF
❑ MGMT TEAM ❑f SEC DIR
TO: City Council t, C FILE UTIL DI I
❑ PERS DIR
VIA: John Dunn, CAO
FROM: John Moss, Utilities Director
SUBJECT: Information Regarding Progress Towards Community Composting
Two members of the City Council have recently expressed interest in the progress the City has
made towards a yard waste collection and recycling program. The Council will be considering
a RFP to provide residential recycling services and yard waste collection on October 3, 1995.
Based on the outcome of the proposal process, staff will return to Council upon completion of
the proposal evaluation process with a recommendation regarding yard waste.
Currently, there is only one permitted composting facility in the County located near Templeton.
This facility is operating under a California Integrated Waste Management Board issued permit
which limits the amount of material which can be disposed of at the facility. This facility
services the communities of Atascadero and Paso Robles. Most jurisdictions that currently have
yard waste collection programs have an agreement for direct land application with a large
property owner. The amount of materials which can legally be applied to the land and tilled is
subject to approval of several government agencies.
Cold Canyon Landfill is in the process of obtaining the necessary permits to establish a regional
composting facility on the adjoining property. This would be the logical location for the disposal
of the City's yard waste because of its proximity to the City and that it will produce a useable
material.
Please feel free to call if there are any questions and the need for further clarification of the
issues surrounding yard waste collection and composting.
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