HomeMy WebLinkAbout07/25/1995, 3 - STUDY SESSION REGARDING RECYCLING SERVICES PROCUREMENT ALTERNATIVES. �IIN^I �III�IIIIII�I�III VJ f MEETING DATE:
II , C,Io sun lues oBIspo July 25 1995
11iis COUNCIL AGENDA REPORT ITEM NU ER:
FROM: John Moss, Utilities Directo&'''
PREPARED BY: Ron Munds, Utilities Conservation Coordinato5
Sue Baasch, Administrative Analyst
SUBJECT: Study Session Regarding Recycling Services Procurement
Alternatives.
CAO RECOMMENDATION
By motion, receive a report on recycling service procurement alternatives; and direct staff to
proceed with Alternative #3 granting San Luis Garbage Company the first right of proposal for
recycling services.
REPORT IN BRIEF
On January 3, 1995 Council directed staff.to begin renegotiation of the City's solid waste
franchise with San Luis Garbage (SLG) and to return to Council with an analysis of options for
provision of curbside recycling services. To assist in the analysis of recycling service options
and the development of appropriate franchise language the firm of Hilton, Farnkopf and Hobson
(HFH) was hired.
Working with staff, HFH has identified appropriate recycling service goals for Council
consideration. Using these goals, an analysis of procurement objectives and alternative service
and collection options in relation to the two primary recycling service procurement alternatives
was performed. This was completed to identify the benefits of each procurement alternative
relative to the goals, objectives and alternatives for service. The goals, . objectives and
alternatives for service are all critical factors to consider in selecting the procurement alternative
as these factors all guide and affect the development of our recycling programs into the future.
The two primary procurement alternatives considered in the analysis were sole source negotiation
of a new recycling franchise with our current recycler, SLOCO Recycles (a subsidiary of SLG),
or a competitive request for proposal process. Based on the analysis performed, a simple
majority of factors would lean in favor of negotiating with our current recycler. However, this
does not account for weighing of goals and objectives based on Council and community values.
With this in mind, staff felt there was still some leaning toward simply negotiating with our
current recycler.
A third procurement alternative was identified which staff feels provides the maximum flexibility
in achieving all of the identified recycling procurement objectives. This alternative would grant
SLOCO Recycles the first right of proposal with the City retaining the right to accept or reject
the proposal. This alternative would ensure the city is receiving quality service at a competitive
cost while addressing the other goals and objectives identified in the report.
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�����►�►►�IIIIIIIIIP°1 ��Ulll city of San LuiS OBISPO
COUNCIL AGENDA REPORT
Recycibig Procurement Alternatives
Page 2
DISCUSSION
Backeround
The current Solid Waste franchise covers a 10 year period which ends in June 1997. In
December 1994, San Luis Garbage Company (SLG) submitted a request to the Utilities
Department to begin franchise renewal negotiations. The City Charter Section 1003 states that
a franchise can be renewed during the three years before it expires. Staff presented the request
from SLG at the January 3, 1995 meeting and sought direction from Council to begin
negotiations for a new franchise agreement. Council directed staff to begin negotiations with
SLG for the performance of the solid waste hauling component of the franchise.
The current agreement provides for both refuse collection as well as authorizes SLG to collect
residential recyclables. The franchisee does not have an exclusive franchise to provide either
residential or commercial recycling collection services. Additionally at the January meeting, the
Council directed staff to analyze the alternatives for providing recycling services. It was agreed
that staff would return to Council with the recycling services procurement alternatives along with
a discussion of the advantages and disadvantages of each option.
At the March 7, 1995 City Council meeting, staff requested additional appropriation of funds
for consulting services to assist staff in the analysis, development, and negotiation of new long
term solid waste/recycling franchises. Council approved a modified request for funds at that
time. The firm of Hilton, Farnkopf& Hobson (HF&H) was selected from the four respondents
to the Request for Proposals. The first task identified in the proposal is the evaluation of the
recycling procurement alternatives.
Current Recycling Services
The current franchisee, San Luis Garbage (SLG), initiated a residential curbside recycling
program in 1976 with a $10,000 grant from the Environmental Protection Agency. This was
one of the first curbside collection programs in the State and collected newspaper, aluminum and
glass. With the passage of Assembly Bill 939 (AB 939) in 1989, the City requested expanded
recycling.services from SLG. Because of these expanded services which included the collection
of plastics, white office paper and commercial cardboard, SLG required increased processing
capacity for these materials. In February 1991, the Tank Farm Road processing facility was
opened to manage the flow of recyclables from the City. Again in 1995, SLG increased the
recyclable items collected to include junk mail, catalogs, magazines and chip board.
The start-up cost of the Tank Farm Road processing facility has been subsidized by the garbage
rates. SLG has indicated that approximately 90% of those initial capital costs have been paid
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ii�H�►�►i��ulllllllll�1° �IIIIIII City Of San 1-.49S OBISPO
COUNCIL AGENDA REPORT
s
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for as of 1995. The revenue from material sales is returned to the garbage rate base to help
offset the cost of recycling.
Purpose of the Report
The purpose of the following report is to furnish Council with information and an evaluation
process to 1) establish recycling goals related to service provision; and 2) to select a method for
procuring those services.
The report is presented in three sections as follows:
■ SECTION 1. Residential Recycling Goals- a discussion of proposed goals for the
provision of recycling service.
■ SECTION 2. Procurement Objectives and Alternatives for Service and Collection-
a summation of the information and material to be presented by HF&H.
■ SECTION 3. Residential Recycling Service Procurement Alternatives - a discussion
of the alternative procurement methods.
Based on Council direction at this study session, the consultant and staff will prepare the draft
franchise documents. .The documents will be brought back to Council for approval.
SECTION 1. Residential Recycling Goals
In considering how best to evaluate the alternatives for recycling services procurement, staff felt
that it was first necessary to characterize optimal recycling services. That resulted in a set of
six goals for residential recycling services for Council consideration.
RECYCLING SERVICES:
■ Should be convenient.
■ Should be effective and efficient.
■ Should meet waste reduction goals and be consistent with environmental objectives.
■ Should have competitive and stable rates, reflecting aggressive marketing of recycled
materials.
■ Should ensure provider has flexibility and financial resources to implement
requested new programs.
■ Should provide consistent quality service over time.
These goals have not been placed in order of importance. Nor are they meant to be conclusive.
Staff would encourage Council to add to this list, if desired. Based on these goals, HF&H has
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COUNCIL AGENDA REPORT
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developed a set of what they describe as key decision-points to achieve these goals and to assist
in the evaluation of alternatives for procuring recycling services.
Each of these goals has a basis in current .policy and practice. Each goal establishes a
framework for the design of our residential recycling program. Finally, each one affects how
the recycling services should be procured. The table below summarizes the basis for each goal,
the implications for recycling services and the impact on the procurement process. .
GOAL BASIS SERVICE PROCUREMENT
IMMICATIONS I (PLICATIONS
Convenience Assumes that Pick up at each home rather than rely on Measure appropriate level of
maximum diversion drop off centers. convenience within a cost range
(AB 939) is Provide easy to use and lift containers. acceptable to the commuity.
achieved when Minimize separation.
service is Higher level of convenience may result
convenient and in higher cost to provide service.
need is understood.
Effectiveness and Recitals, Solid High level of productivity, maximizing Measure productivity, use of
Efficiency Waste Ordinance use of available technology. technology, and community
1177 (1990), High level of community knowledge and relations program.
establishing participation based on outreach and
volume-based rates education.
and residential
recycling
requirements.
Meet waste State law AB 939 Maximum collection of all materials Measure ability to maximize
reduction goals/ (1989) requires traditionally sent to the landfill. collection of all materials
consistent with 25% diversion by Minimum number of trips to accomplish traditionally sent to the landfill.
environmental 1995; 50% collection. Evaluate number of trips to
objectives diversion by 2000— Eliminate polluting substances sent to the accomplish collection.
to protect landfill. Evaluate hazardous waste handling
groundwater, air Require liquid-tight hauling trucks. and hauling methods.
quality, resources. Require appropriate handling and site Encourage neighborhood drop-off
Source Reduction processing permits. centers.
and Recyling Encourage neighborhood drop-off Evaluate materials processing to
Element (1994). centers. comply with standards for
Household groundwater protection and local
Hazardous Waste planning and zoning requirements.
Element(1994).
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�������rH1�11111�IIp��nu�I��U�11 city of San L"IS OBISpo
COUNCIL AGENDA REPORT
Rmycling Procurement rna ves
Page 5
GOAL BASIS SERVICE PROCUREMENT
DUPLICATION EVIPLICATION
Competitive and City's Rate Setting Aggressive marketing and sale of Establish cost proposal which
stable rates. Manual for recycled materials. measures costs fairly for services
Integrated Solid Well-run and efficient operations, required by this community.
Waste Management Cost proposal should include cost
Rates (1994). of operation over an interval of
time.
Recycler to have Source Reduction Maximum implementation of cost- Measure ability, willingness,and
adequate and Recycling effective programs listed in the Source financial resources needed to
flexibility Element (1994). Reduction and Recycling Element, implement new programs.
& financial City's Rate Setting including green waste, construction
resources to Manual for debris.
implement new Integrated Solid Method for providing financial incentive
programs- Waste Management to implement programs with the goal of
Rates (1994). programs becoming self-sustaining, if
possible, and reducing ongoing cost to
customers.
Consistent, City Charter, Quality service and quick response to Measure ability to provide
quality Section X, customer needs. consistent and quality service over
service over Franchises. Equipment meeting City standards in a time.
time. cost-effective manner. Require successful experience in
providing these services.
SECTION 2. Procurement_Objectives and Alternatives for Service and Collection
Based on these goals, HF&H has developed procurement objectives presented in Exhibit 1, pages
4 through 8. Each procurement objective assesses which alternative procurement method will
accomplish the objective based on HF&H's experience in similar procurement evaluations. If
either alternative would satisfy the objective, neither is indicated. HF&H will present thorough
discussion of each procurement objective and comparison of RFP process versus sole source
negotiation at the study session.
Based on the information provided by HF&H in Exhibit 1, pages 9 through 12, the more
services provided or offered by one contractor the greater economy of scale which results in a
lower net cost to the customer. In Exhibit 1, page 13, HF&H identifies the tentative
recommendations when comparing the recycling procurement alternatives. Council must place
a value on each goal in order to determine which alternative is most desirable. For instance,
if cost is the primary goal, the City should seek competitive proposals but if convenience and
stability out weigh cost, then the City should negotiate with SLG. Another consideration within
the scope of cost is determining if the currentprice of recycling is reasonable in relationship to
the other goals.
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COUNCIL AGENDA REPORT
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In addition, HF&H has evaluated future service collection alternatives. It is important to
understand the possible collection service alternatives and their implications related to various
service procurement alternatives. Flexibility in implementing future collection and service
programs is essential to meeting the mandated diversion goals while maintaining reliable, cost
effective service to our customers. The relationship between the procurement method selected
and the ability of the franchisee to add identified programs and services is a significant
consideration in the Council's final procurement decision. Many of the service options in the
HF&H evaluation have not been previously presented to Council. During the presentation of
the material by HF&H, any direction provided by Council will be incorporated in the final
recycling franchise document. Generally, the greater potential for service collection flexibility
exists with a single refuse/recycling hauler.
SECTION 3. Residential Recycling Services Procurement Alternatives
There are basically three feasible procurement alternatives. They are:
1. Continue with the current means of delivering services as part of the refuse
hauling agreement (sole source).
2. Request competitive proposals for the services (RFP).
3. Granting SLG first right of proposal for the services (FRP)
A fourth option, not listed or recommended by staff, would be to request competitive bids
(RFB). Staff believes that the.lowest bidder may not necessarily provide for all the service
considerations and long-term recycling and environmental goals the-City wishes to achieve. It
would be very difficult to draft an RFB which would compare "apples to apples" and account
for the intrinsic value of the communities recycling and environmental goals. Additionally, the
RFB process would not be as flexible when requesting changes in service or programs and
generally obligates the City to select the lowest responsible bidder.
In analyzing the procurement objectives, it is important to refer back to the goals for evaluating
the alternatives. Based on the tentative recommendations HF&H listed in Exhibit 1, staff has
formulated the following three alternatives for Council to consider.
Alternative #I. Sole Source Neeotiation
Sole source negotiation would be a continuance of the current relationship with SLG and its
subsidiary SLOCO Recycles. A new contract would be negotiated in order to include all the
City's concerns and needs for both current and future recycling programs and services.
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COUNCIL AGENDA REPORT
Page 7
Alternative #2. Competitive Request for Proposal (RFP)
In the competitive RFP process, the City would solicit proposals from qualified contractors to
provide the City with recycling services. This alternative has the apparent advantage of
providing the lowest cost service as a result of the competitive process. As identified earlier,
other considerations do not necessarily favor this option. The award of the contract should not
be solely based on price, but on a combination of factors as determined to be in the best interest
of the City.
Alternative #3. Mrst Right of Proposal to San Luis Garbage
Granting first right of proposal to SLG would allow SLG the opportunity to submit to the City
their best proposal for providing recycling services. This would be a closed confidential process
in which the City would have the right to accept or reject the proposal. It would remain
confidential in the case that the City rejects the offer and determines to move ahead in the RFP
process. By doing this, SLG would not be put in an unfavorable position if the RFP process is
initiated. This procedure recognizes the investment the City has with SLG and the long-term
quality service they have provided the City while not obligating the City to accept a proposal
the City deems inadequate.
SUMMARY
Though all the alternatives have merit, staff favors alternative#3. This alternative would ensure
the City is receiving quality service at a competitive cost while addressing the other goals and
objectives discussed in this report. Staff would also recommend the development of separate
refuse and recycling franchises, even if a single hauler is selected. Staff believes this would
facilitate future program flexibility while recognizing the differences between the two services.
FISCAL IMPACT
There are no fiscal impacts associated with this action.
Attachment:
Exhibit 1 - HF&H Recycling Procurement Alternative Analysis
EXHIBIT I
CITY OF
SAN LUIS OBISPO
COMPARISON OF RECYCLING
PROCUREMENT AND SERVICE
ALTERNATIVES
July 25, 1995, City Council
Workshop
Prepared by:
0-
Hilton
Farnkopf &Hobson
39350 Civic Center Drive, Suite 100
Fremont,CA 94538-2331
Telephone: 510/713-3270
Fax: 510/713-3294
3
CITY OF
SAN LUIS OBISPO
3 'AII + ' IECCLIG
:xq
Pi ? JRE1INT DER�1IE A LTEAT VES
OVERALL GOALS
❑ Convenient Service to the Rate Payers
❑ Effective and Efficient Service
❑ Consistency with Environmental Objectives and
Meets Waste Diversion Goals
❑ Competitive and Stable Rates which Reflect
Aggressive Materials Marketing
❑ Long-Term Service Predictability/Stability
❑ Operational and Financial Flexibility in Adding
New Programs
Hilton Famkopf&Hobson ft�
July 13, 1995 Page 1
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CITY OF
SAN LUIS OBISPO
+C() ' I I +QN OF R + YCLTNG
F O ,T�EMEN.T ....
EI ' .CRAL � TI ES'
DECISIONKEY •
❑ Method of Procurement
❑ Recycling Collection Options
❑ Collection Frequency
❑ Type of Containers
Hilton Farnkopf&Hobson ffl&�
July 13, 1995 Page 2 qWUST
QTY OF
SAN LUIS OBISPO
COMPARISON
OF
RECYCLING PROCUREMENT
ALTERNATIVES
Hilton Farnkopf&Hobson
e
July 13, 1995 Page 3
CITY OF
SAN LUIS OBISPO
........................................
PROCUREMENTOBJECTIVES
DeCisit�n ;~actors Fa�v�rs lZatortale
Provide Reliable, Convenient Neither The franchise agreement will include
Service to Rate Payers strict performance standards and
corresponding penalties (liquidated
damages and default provisions),
regardless of the procurement
method.
.Aclueve Divers�on Goals Ne�thez •. Achievement of the dlYersxongoals
'will�epeni on the matenals placed ;i
for collectign b�the re$ dents ' The
pity w,il1 detezmlzxe the'xequlred
matetiaTs d kh�type of public
education program to be
. iumpx�eme�t�d. Thezefore,the:type of
proctitremerit will not�npact the
goals
.._..............:.::.
Establish Fair Rates Between Neither The City will-be responsible for
Rate Categories setting the rates as long as the rates
generate adequate revenues to
compensate the Company.
.......................................................
1Vlaintant Flow Cozxtrot SI.G Becaus+� the:processing facility;of
l�Tegotiatiorts : 51.E� a�elatetl p
arty azul that the
qux�pment,st Ys nat�lcely that the
materials elsewhere 'flus w�Il also
;, lleviate future l
ega a)
l aacxd funaztcx
co�rems relaEecl to the
Gty �cting
:< ;< >
the flow of recyclables
Hilton Farnkopf&Hobson
July 13, 1995 Page 4
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CITY OF
SAN LUIS OBISPO
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• a kVj I a k6ki I • :
Dec�tsans. a ]cs.. Fava�rs Rti�anale xx
Ensure Worker Safety Neither Regardless of the procurement
approach, the City can establish
performance standards (e.g., length of
day, number of stops per route, etc.)
to help ensure worker safety.
Inarea$e Publiciwarenes Neither f either procurement approach, the
City can determuxe the desired levels
and ea:of blit education to be.
rove ed. �
F
Provide Long-Term SLG SLG is a known commodity with
Predictability/Stability Negotiations significant other local revenue
sources that can help ensure long-
term stability and predictability.
ple�abil�ty i Adliat�g SLS Because 5;LC 3s the xefuse collector
Di�rerston Fro Ne ahations and probably the green waste
collector,they maintain the ability fo
..
�1l��xk m+��e me#�rials from these
othei:�ras#,�streams ........ future
saiii 'sepatzon or post-collection
�ra�l�o
•
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a. a
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Hilton Farnkopf&Hobson
July 13, 1995 Page 5 `
CITY OF
SAN LUIS OBISPO
........................................
�*/�
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PROCUREMENTOBJECTIVES
D+�cxnn Fads .
v , ,
Ratznnale
...................
Ting SLG Generally, sole source negotiations
Negotiations typically require less time to
implement than does an RFP.
However, negotiations can be
prolonged and an RFP process can be
... .... .... .......
streamlined.
Pnoz City Investments in SLG T#te+CYty has made sigziYfican#
1tec�clang Lqulpmen# ;Nego#�tit�ns financial conta�bu.Hons to SLG's
' ' rasessyng egigment and should
' �rtothe�r �ontpany take:the�eeyclables
e se iYear+� #k�e t..may lase a
porion bf its return an;�he
utv�staneant.
Overall Rate Impact RFP We believe that an RFP process
generally results in the most
competitive proposals. During sole
source negotiations, the Company
may not feel the need to make its best
offer.
I"nrtavati�P Technoing3'' . RFP BOB cullectiory cacall�ction� for,which
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aid.# _ i.
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• ,.'.,,,;. � <:� ,:Y... ':.Y.-. . less xnchuned#o take
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turn ;ete,^�th o#hgrs.
Hilton Farnkopf&Hobson
July 13, 1995 Page 6
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SAN LUIS OBISPO
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P' T1 .
PROCUREMENTOBJECTIVES
T,►ecisian Factors Favoxs Rationale
Comfort/Confidence SLG The City is familiar with SLG and
Negotiations there are additional risks to any new
company. Also, SLG has an interest
in maintaining a good relationship
with the City (due to its refuse and
green waste programs).
ecyclable 1Vtarket Fxa'ces l\Tea�tl er This possiTe to cletezax<ine adequate
current riarket„pnces for materials
and contractually eztsuze thaE the
CopanyrQ�rie Curren#marke#
Prices,re ardle5s hf the cerement
. .
g Pro
..
me
thod.
Competitiveness RFP An RFP process forces a company to
be most competitive on its cost and
productivity assumptions. It is also
possible to ensure that proposals are
not unrealistic with regard to these
assumptions.
du+crivlty ' Based u tier expeence,an RFP
,
h
ees�rrea#+es cen a#° e
Campaxly to.include xts most'
,> ::aggressivePxaductivxtyassump#ions
Hilton Farnkopf&Hobson MW■�
July 13, 1995 Page 7
CITY OF
SAN LUIS OBISPO
:.::.:.:........:.........:::.....:..:.. .....
�^�► :::..::::::..:::::.:............................
PINT .LTA'TIVES
PROCUREMENT OBJECTIVES
::::::::.......... a.::
I►erlox F �cars EFavoxs Raxonale
. ... ... .....
Administrative CostBurden SLG The administrative time and related
Negotiations costs will be greater if a new
company is selected in order for both
the City and companies to adequately
administer the contracts.
Pracuremexit Timelf~ost, SLG 4T`�picall�,'the cos# and.amount of
4
Neg�ttaiativns staff t�cte req�ued wx11 be lowest aif
4 ,4, th�G �e dates with SLG a p
tY go
of tlt�refuse and green waste $
art
,
negtitiatio �.
:4
Customer Service SLG If SLG performs all services,
Convenience Negotiations customers will have only one
Company to interact with.
.��ouamucs��Scale
Sec��se�f SLG's size and other
4 a�„<;• ,,' .�Tego �rn�r�s, they 7llay be able#o
liahons �reven�e
mate�eccu#ti es of sca1;� which result
4' 4
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SelvlceB
ti.
Hilton Famkopf&Hobson
July 13, 1995 Page 8 �F°`—
QTY OF
SAN LUIS OBISPO
� ,a �t
Q . . i � as
SUMMARYOF OF • PROPOSALS
::::<...........,..::..::...:..::.............
factorIs. Exaxngles f CR ::& -0 Results
Technical Approach - Dual collection vehicles
- Automated collection
- Commingled collection
::.... ::
Productivity w Slogs per rout cant by as mh as 95%
..i
.0 :.� ..
» Numiser`aaEes can ran a as much-a5 50%
..:....
Competitive Returns Typically 80% to 93%
Corp4ees % ta4.5%a
,.
Materials Pricing Can range by as much as 80%
Overall Caste +Can xageon0°fo tQ 9(l%a
Overall Risk Companies have taken very different positions
(e.g., productivity, recyclable revenues, profit)
Hilton arnkopf&Hobson
July 13, 1995 Page 9
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CTTY OF
SAN LUIS OBISPO
...............
II'ARLSC 1F CYCLING
FC3+C,�3I�EN.� 1'T �.�TE�Zi�T�.TIVES
CONTRA • COUNTY RFP RESULTS
Re
:. :..... ::,........ .. :........,:;B �GmgCWS
,
<;
Operating Ratio 84.76% 80% 86.54%'0 92.50% 89%'0
Cnrpnra#uFees 4.5°1b NNE
Productivity
- # of Routes 13 17 15 12 19
- # of Stops per Route 724 525 524 371 416
Tecluucal l�xovations Autamated ; None Autoxoat�ed Automated None,
me
,
Co�,mTn�jeii �apIat Cart Split-Cast
election Colleatlnm Collection
Tons Diverted 23,783 26,118 34,269 25,668 31,093
ILecgclalxleRe�ez�ues $2,S79,SA�:: '`$1,723,St10 $�993�fl0 $3,1.59,100 $229b,500
Total Net Cost $1,758,000 $3,128,900 $1,698,000 $1,780,800 $2,611,700
Hilton Famkopf&Hobson
July 13, 1995 Page 10
CITY OF
SAN LUIS OBISPO
' � 5::
ALAMEDA COUNTY RFP RESULTS
...........n....n.::.ii:W iii}:vr}i}::.vi..:C,.:.:::.:...::::.::.t:}hv'y.Y}YN:n...,.:.n.n.. ::..... .....:.: ......... ..... .. ......
:
. .::.:: ....
Operating Ratio 92.8% N/A N/A
Cnrpt►rate Feed • ,J`* ",`i \ 1.2°In 17b1
Productivity
- # of Recycling Routes 9.4 14 14
- Stops per Recycling Route 1,019 655 655
NX
XXX
'I`erlxca noxratirna�sIM
r Nnne tial None
on \
.r:
.a
Velucle
,.. \.
Recyclable Revenues N/A $727,000 $320,000
......::..... ........:...:::,...::.:
Tui.Cast .,'�, •.,'. $3����GOQ ;$ S�t�04 $5,7�I6,000
Hilton Famkopf&Hobson
ems'
July 13, 1995 Page 11
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CITY OF
SAN LUIS OBISPO
+DW RE CLING
PIZN1 ' L'TERh+TATTES.
DIEGOSAN COUNTY
......... ...... ....:..
2:i1uR'/ ��fqy�QQ``�� .. .:::•..>i>i:> >:.>::::.>:.>:.»»»>?::ii �:.>i'.>:>:.>::.i:!.>:.>:;.>�.;
h
Operating Ratio 85.2% 91.9%
Corporate F ``' Nnne Nnne
ens:
Productivii
-# of Recycling Routes 3 4
-.Stops per Recycling Route 723 500
v
�`ec�ucal'��ino�ra#oxo r,.,, Maine None:.
Tons Diverted 3,187 41714
:..`
;r ;tLecp+cta'bl��tetrexxtx+�,s •r':;: +54
� 0
I
Total Net Cost $220,000 $225,400
Hilton Farnkopf&Hobson
July 13,1995 Page 12 °`—
QTY OF
SAN LUIS OBISPO
.............
' 4
OARION O
PROC * 1VI ' ' ALTEN "I'IVE
TENTATIVE RECOMMENDATIONS
❑ If the City Council Goal is to Maximize Convenience to the
Resident, then: Negotiate with San Luis Garbage Company.
❑ If the City Council Goal is to Provide the Most Effective and
Efficient Service, then: Either Option Will Suffice.
juice.
❑ If the City Council Goal is to Maximize Consistency with City
Goals and Objectives (Environmental and Waste Diversion),
then: Either Option Will Suffice.
❑ If the City Council Goal is to Provide the Most Competitive
and Stable Rates, then: Seek Competitive Proposals.
❑ If the City Council Goal is to Maximize Service
Predictability/ Stability, then:Negotiate with San Luis
Garbage Company. ;
❑ If the City Council Goal is to Maximize Flexibility
(Operational and Financial) in Adding New Programs, then:
Negotiate with San Luis Garbage Company.
Hilton Farnkopf&Hobson
July 13, 1995 Page 13 `
S,aV
QTY OF
SAN LUIS OBISPO
COWARISON
OF
RECYCLING SERVICE
ALTERNATIVES
I MEMO i MINOR
Hilton Famkopf&Hobson
July 13, 1995 Page 14
CITY OF
SAN LUIS OBISPO
IECY�T� NSRiCETEZ�TATTES
COLLECTION FREQUENCY
❑ Weekly
❑ Every Other Week
❑ Alternating Weeks with Green Waste
TARGETED MATERIALS
❑ Newspaper
❑ Mixed Paper (junk mail, phone books)
❑ Corrugated Cardboard
❑ Glass (all colors)
❑ Plastics (narrow neck)
❑ Plastics (aseptic packaging)
❑ Tin/Metal Cans
❑ Aluminum Containers
❑ Aluminum Scrap
❑ Waste Oil
❑ Green Waste
Hilton Farnkopf&Hobson
July 13, 1995 Page 15 `�
CITY OF
SAN LUIS OBISPO
I�E�"�CCI��N�,�E �TIE �LTEIZNATIVES
METHODS
OF • •
❑ Manual Collection
❑ Semi-Automated Collection
❑ Automated Collection
❑ Co-Collection (with any of the above) with Green Waste
CONTAINER
❑ Two or Three Bin Collection
❑ Split Cart Collection
❑ Commingled Cart Collection
Hilton Famkopf&Hobson �
July 13, 1995 Page 16 `
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CITY OF
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C ► PP LS tJ�tEYI G
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DECISIONNeitber
•
Collection Frequency
• Weekly Curbside Collection ,J
• Every Other Week Collection �1
• Alternating Weeks with Green
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:::::::.:::::::.........................
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• Two or Three Bin Collection
• Split Cart Collection ,1
• Commingled Collection ,I
Hilton Farnkopf&Hobson
July 13, 1995 Page 18
302.(0
CITY OF
SAN LUIS OBISPO
EI SCE AI�fiE5
i
TENTATIVE RECOMMENDATIONS
❑ If the City Council Goal is to Maximize Convenience to the
Resident, then: Weekly, Automated, Commingled Recycling
Collection.
❑ If the City Council Goal is to Provide the Most Effective and
Efficient Service, then: Every-Other-Week, Automated, Split
Cart Collection.
❑ If the City Council Goal is to Maximize Consistency with City
Goals and Objectives (Environmental and Waste Diversion),
then:Automated, Alternating Week Collection with Green
Waste.
❑ If the City Council Goal is to Provide the Most Competitive
and Stable Rates, then: Every-Other-Week, Automated, Split
Cart Collection.
❑ If the City Council Goal is to Maximize Service
Predictability/ Stability, then: Weekly, Automated, Split Cart
Collection.
❑ If the City Council Goal is to Maximize Flexibility
(Operational and Financial) in Adding New Programs, then:
Weekly, Automated, Commingled Recycling Collection.
Hilton Farnkopf&Hobson
July 13, 1995 Page 19
3�7 [
MEETING _AGENDA
iE 7-Z2 9 S ITEM #
RALCCO RECYCLING
ReturningT13MGWr
NCIL ❑ CDD DIR
MR" ❑ FIN DIR 24, 1995
Allen Settle O ❑ FIRE CHI
San Luis Obispo City Council MEy ❑ PW DIR
990 Palm WORIG ❑ POLICE CHF
San Luis Obispo CA 93403 TEAM ❑ RSC DIR
DF L DIR
Dear Council Mayor Settle, i ❑ PERS DIR
In response to your recent staff recommendation to grant San Luis Garbage Company a
confidential first right of proposal for recycling services, I have prepared the enclosed
information. The enclosure is also a request to you and your Council for the opportunity
to provide San Luis Obispo with a competitive proposal for comprehensive recycling and
green waste collection services. RALCCO has provided the Central Coast with reg cy ling
services since 1977.
I would like to address several points in the City's staff report. First, I have to conclude
that the consultant was unaware of reliable, experienced, convenient and competitive local
recyclers since no consideration of local competition was included in the analysis. There
are several local recyclers in this area and if the analysis had included information about
them, it would seem that the conclusion to exclude competition in favor of a single
company would not have been drawn.
Second, your report recommends a sole source proposal based on past investments into
San Luis Garbage Company. During the formative years of recycling, San Luis Obispo
took proactive measures to stimulate recycling programs by financing start up costs for
collection and processing equipment. At that time recycling needed a jump start. The
citizens of San Luis Obispo paid for that equipment. Who does it belong to today?
Should that investment predetermine the City's recycling vendor?
The formative period for recycling is over and to&y recycligg is a competitive private
sector service Recycling is no longer linked to garbage hauling and disposal. Aside
from the collection function, the tasks, goals, skills, and processes are unrelated. The fact
that the City invested in equipment for recycling has little relation to the decision as to
which vendor to choose.
Third, the staff and consultants reports seem to focus on collection systems as a critical
factor in the decision as to whether or not to place recycling services in the competitive
arena. There is no way of knowing what collection systems are available unless proposals
are sought. Also, the critical function that impacts cities and counties is the processing
and marketing of regclables. A focus on the function of collection was important in the
not too distant past. With the evolution of recycling, the focus in the industry has shifted
from collection systems to processing, marketing and remanufacturing. RECEIVED
JUL 1 � 199I
CITY COUNCIL
CON I I"^ ^e1c0^ ^O
P.O.Drawer 1170 Highway 1 and Ralcoa Way L9 o CA 93444 805-343-2289 fax 343-5515
A June 1992 article in Western City ma azg ine explains that recycling programs that continue to
,focus on collection and view recycling as an extension of hauling;tend to require subsidies. In
response to new demands new services are belt offered by competitive rec cy lers.
To provide rate havers with the highest uality lowest cost recycling services, it is time to
address recycling as a stand alone system and to subieet recycling Programs and costs to the
competitive arena of contemporary recycling.
Fourth, your report suggests that a"first right of proposal" for San Luis Garbage would ensure
competitive costs because the City could reject the proposal: Since there is no way to compare a
sole source Proposal to realistic alternatives for local services, there would be no grounds for
erection. I am sure that you are aware that the only way to get competitive costs on
contemporary programs is to stimulate competition. The lack of competition causes stagnation
and higher costs to rate payers.
An example of the positive effects of competition was San Luis Garbage Company's addition of
junk mail chip board cardboard and mggazines to residential curbside services shortly after
City staff began discussing franchise renewal and the potential of breaking recycling out from the
garbage franchise.
As a private sector vendor, I respect the City's commitment to protecting private sector interests
through a closed and confidential proposal review processes. However, it seems to me that when
the proposal process is limited to a single pre-selected company, a closed and confidential process
serves to completely eliminate any chance for review of the proposal in public and excludes all
information about competitive services
Fifth, based on the consultants information, section 2 of the report states that lower costs result
from contractors that provide multiple services. This conclusion is not reasonable without a
comparison of many other factors that determine local programs and their costs including landfill
tipping fees, hauling distances to facilities and landfills, the extent to which an area is urbanized or
is rural, and the services(among many variations)that are provided by the vendors.
Realistic conclusions about programs and costs can only be made if comparisons are made of
the costs and services that are provided by local recvclers and this can only hapPen if local
recvclers can Mpose competitive services.
The recommended action provides no incentive for competitive costs and programs and it
eliminates all information about competitive local services from Council's selection process. I
have provided the enclosed information to encourage you to request proposals from local
recycling companies. Competition in the recycling industry serves the interests
of rate payers and the long term interests of recycling as an economic and environmental
necessity.
Sincerely
Steve Aslanidis
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MEETING , AGENDA
TE 2oITEM 6
SAN • LUIS • GARBAGE • CO.
Q6,0"CIL ❑ CDD DIR
Inn� ❑ FIN DIR
❑ FIRE CHIEF
EY O PW DI
City of San Luis Obispo CLERWORIG D PO ECHF
Mayor Alan Settle ❑ MGMTTEAM D CDIR
990 Palm St. ILE L DIR
❑ C
SLO, CA 93401 7-20-95 ❑ PERS DIR
Dear Mr. Mayor,
We have had some recent inquires from City of SLO staff regarding
the prospects of San Luis Garbage operating a buyback center at
the Prado Road yard currently operated by ECOSLO. We have no
interest in running ECOSLO out of business. We have always been
sensitive to the "David versus Goliath" syndrome.
Having said that, San Luis Garbage is willing to run a buyback
at the Prado Road site if the council makes the decision to terminate
its relationship with ECOSLO. We would be able to run a profitable
operation. The benefit would come from the inclusion of all of the
profits in the rate making calculations. That way all of the citizens
of San Luis Obispo would benefit instead of a minority.
I do have a major concern regarding the processing of Morro Bay's
curbside recycling at the Prado Road vacility. Why is the City of
San Luis Obispo subsidizing recycling operations in Morro Bay?
That material used to be processed at the Tank Farm Road facility.
The profits from processing Morro Bay's material went directly
towards lowering the cost of recycling to the citizens of San Luis.
It seems to me that the citizens of SLO should be receiving some
kind of return from providing rent-free property on which Morro
Bay sorts their recycling.
Sincerely,
Chas Cattaneo, President
San Luis Garbage
cc:Dave Romero
Dody Williams
Bill Roalman
Kathy Smith
John Moss RECEIVED
JUL 2 0 1995
CITY COUNCIL
970 Monterey Street San Luis Obispo, California 93401
Telephone: 805-543-0875