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CC - Item 9A - Direction of Process for Future Agreement for Solid Waste/ Recycling ServicesOSEMAD CITY COUNCIL TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: JEFF ALLRED, CITY MANAGER DATE: MAY 24, 2011 SUBJECT: DIRECTION ON PROCESS FOR FUTURE AGREEMENT FOR SOLID WASTE /RECYCLING SERVICES SUMMARY The City's current agreement for solid waste /recycling collection services expires on August 1, 2013. The scope of work includes providing solid waste and recycling services for all residential and commercial properties in the City. As part of the next fiscal year budget, a work plan item has been included to explore options for solid waste /recycling collection services. Prior to engaging in this process, further direction from the City Council is requested relative to the contracting options, which are: (A.) Negotiate to extend the relationship with the existing service provider; or (B.) Conduct a competitive bid process. Staff Recommendation It is recommended that the City Council provide further direction regarding the process to achieve a new solid waste /recycling collection agreement. BACKGROUN /DISCUSSION For many years Rosemead's solid waste /recycling collection services have been provided by Consolidated Disposal Services, a subsidiary of Republic Services, Inc. The current agreement with Consolidated Disposal Services (CDS) expires on August 1, 2013. In order to ensure that a high standard of service and affordable rates are maintained with these services, it will be necessary to develop a new agreement for solid waste /recycling collection — including agreement terms (length of time, reporting requirements, franchise fees, and rate adjustment criteria) and defined service levels (solid waste container sizes /colors, collection days /times, disposal sites, recycling levels, customer service standards, insurance levels, equipment requirements). Approximately one year ago in 2010, representatives of CDS and City staff engaged in discussions regarding a possible extension of the existing contractual relationship beyond August of 2013. Topics discussed in these discussions included the following: • Franchise fee payments to the City that would not be passed on to rate payers; APPROVED FOR CITY COUNCIL AGENDA: j,,,, ,,LL,,,_,_.__. City Council Meeting May 24, 2011 Page 2 of 2 • Provisions to limit rate increases due to inflation and increased landfill disposal fees; • Assurances that Rosemead's waste stream would continue to be hauled to the Sunshine Canyon landfill in northeast Los Angeles County (helping to insulate the City from the controversies and costs inherent with the pending closure of the Puente Hills landfill and rail haul to the desert); and • Assurances that Rosemead's recyclable materials would be processed through the materials recovery facility (MRF) owned by CDS' parent company in the City of Anaheim. At the conclusion of these discussions in 2010, an agreement was not consummated. In recent months, CDS representatives advised City staff of their desire to submit a proposal for an agreement that would include the above listed points and extend beyond the August 2013 sunset date of the existing contract. On April 28, 2011 at the State of the City address, Mayor Ly called for the City to solicit competitive proposals from solid waste /recycling collection companies to generated enhanced revenues, improve service levels, and ensure that "residents and business receive the best service at the best price ". Contracting Options for Solid Waste /Recycling Collection Essentially, the City has two available options, which are summarized below. A. Negotiate with Existing Service Provider Over the last year, representatives from the City's current solid waste collection provider, CDS, approached City staff about negotiating terms and service levels for a new agreement that would extend past the current agreement sunset date of August 1, 2013. At this time only preliminary discussions have taken place with CDS representatives, including agreement terms and service levels. The City has not received a written proposal from CDS representatives. B. Conduct a Competitive Bid Process In order to conduct this process, several steps would need to take place, including an assessment of existing residential /commercial accounts and service levels, the development of a Request for Proposals (RFP) document, and a subsequent bidding process. Prior to pursuing either option for a new solid waste /recycling collection agreement, it is recommended that the City Council provide direction to staff. Either option will involve a substantial amount of staff time and coordination. Following the City Council's direction to staff to pursue a specific option, staff will begin to develop a list of desired service levels to include in a new agreement for these services. This list of desired service levels will be reviewed with the City Council later this summer. It is envisioned that shortly thereafter, actions will be initiated on a process for development of a successor solid waste /recycling collection services agreement beyond August of 2013.