City Council Meeting: May 22,
2008
Agenda Item: 8-B
To: Mayor and City Council
From:
Subject: Public/Private Partnership for
Transfer and Recycling Services
Recommended
Action
Staff
recommends that Council:
1) provide input and conceptually approve a
public/private partnership with Southern California Disposal for transfer
services and Cedarwood-Young Company dba Allan Company for recycling services;
and
2) authorize the City Manager to negotiate and execute a
modification to agreement 8524 (CCS) with Gershman, Brickner & Bratton,
Inc.
Executive
Summary
Over the past three years, the
City has been engaged in a multi-year review of solid waste operations. One of
the results of this review was the issuance of a Request for Proposals to
provide transfer, recycling and disposal services. On October 30, 2007, Council
reviewed the results of an extensive request for proposals process to provide
transfer and recycling services for municipal solid waste. At that time,
Council directed staff to explore two options, one whereby the City provided
transfer services and one in which a private company would provide transfer
services. In both options, Allan would provide recycling services. Since that
time, staff has held extensive discussions with SCD and Allan to explore the
potential of a public/private partnership. Those discussions have led to a
concept proposal that provides for SCD to provide transfer services and Allan
would provide recycling services in the area of the City Yard currently
occupied by the City’s Transfer Station, the current Allan site, the Hanson
Aggregate site and SCD land. The cost of this option is subject to further
negotiations and will be finalized during the next stage of negotiations if
Council approves the partnership concept. An additional amount not to exceed
$25,000 is needed for Gershman, Brickner & Bratton, Inc. for work already
completed to finalize the Preliminary Term Sheet.
Discussion
Transfer/Recycling/Disposal Services
Staff has been meeting with SCD
and Allan for the past seven months to develop a concept for a public/private
partnership. Following extensive discussions, the City, Allan and SCD have
agreed to preliminary terms and conditions for the partnership, which is
presented for Council review and approval. The concept envisions an integrated
facility on City and SCD land whereby SCD provides transfer services in an
expanded transfer station and operates a self haul area on City land and Allan
provides recycling services (see Attachment A).
During this time, staff also
explored the benefits of a public/private partnership with Allan and SCD as
compared to the City providing transfer services. Advantages to both approaches
are:
1)
City retains control of the processing and disposal of solid waste
generated in the City.
2)
The City retains ownership of a solid waste facility permit.
3)
City will make a significant capital investment on its land.
4)
Solid waste and recycling processing are confined to area of the
City where this land use has a long history.
5)
Maximum use of alternative fuel vehicles will be achieved.
6)
Will assist the City in achieving 70% recycling (measured by
California Integrated Waste Management Board methodology).
7)
City will have on-line, real time access to all quantity data for
recycling and solid waste materials.
8)
City will receive a share of recycling revenue from single stream
recycling.
Advantages of the City/Allan/SCD
Partnership are:
1)
Makes maximum use of the existing local facilities.
2)
Avoids duplication of transfer capability.
3)
At a minimum, provides a semi-enclosed recycling processing
facility which reduces environmental impacts.
4)
Reduces total capital investment required by City.
5)
City will retain ownership of all improvements located on city
property.
6)
Recycling operation receives and processes selected commercial
waste loads to recover recyclables.
7)
Lower cost per ton transferred.
8)
City may, if it chooses, receive a Host Fee for all non-City waste
transferred.
Advantage of City transfer and
Allan recycling are:
1)
City operates the transfer function using City staff, increasing
control over the entire waste stream.
2)
Simpler administrative arrangements, only one operational service contract.
3)
No non-City waste at City utilized facilities.
Summary of Site Operations
Materials Recycling Facility
(MRF)
The MRF would be operated by
Allan and located in the general vicinity of the current existing transfer
station. The facility will, at a minimum, be semi-enclosed pre-engineered metal
building housing a sorting line and processing equipment to separate and
recover the various commodities from curbside recycling and commercial mixed
recycling. The material will be combined with recyclables received from the
self haul, buy back and drop off areas for sale and transport to processors.
The MRF will also receive designated select commercial loads, those commercial
collection loads that are identified to contain greater than 50% clean recyclable
materials, for sorting and processing.
Buy Back and Recycling Drop Off Center
Allan will operate buy back and
recycling drop off areas on an area immediately next to the MRF on land
currently occupied by Allan’s facility and a portion of the Hanson Aggregate
site. The
Household Hazardous Waste
The City will move its Household
Hazardous Waste Facility (HHW) to an area integrated to the Drop Off Center and
Self Haul area to provide a one-stop location for the public to dispose of
unwanted materials.
Transfer Station
Under the proposed partnership,
SCD will expand their current transfer station to accommodate the additional
City tonnage. The primary area of expansion is to the northerly direction of
their current facility into a currently vacant lot that is SCD-owned. The
expanded transfer station will, at a minimum, be a semi-enclosed facility with
an expanded tipping floor and added transfer capability. The facility will also
have a separate, enclosed, food waste transfer capability. SCD would process
and transfer all municipal solid waste, green waste, food waste, construction
and demolition material and any residual from the Allan-operated MRF.
General Business Points
The City, Allan and SCD have
agreed on preliminary terms for the proposed partnership. Below are the
significant points:
1. The term will be for 15 years
with three optional 5 year terms.
2. Both SCD and Allan will continue
to be able to process non-Santa Monica generated tonnage up to their permit
limits (as they do today). In both cases,
3. The City will manage the overall
development and implementation process for the facilities and infrastructure
improvements that are to be on its property, and SCD will manage the overall
development and implementation for the facilities and infrastructure
improvements on its property. The work
involved includes the design, permitting, construction, financing and
acceptance testing. Each party will be
responsible for its own capital to pay for improvements on its property;
however, Allan will be responsible to supply equipment and rolling stock
related to work and is responsible for its own capital. The City and SCD will
provide design input to each other’s improvements on SCD’s property to ensure
an integrated facility.
4. The City will be responsible for
the collection of waste and recyclable materials generated and set out for
collection from all residences (single family and multi-family) and commercial,
business, institutional and governmental establishments in the City. The City and private haulers can contract
directly with a resident or business for open top roll-off containers. The City will deliver any waste and
recyclable materials collected by the City to either Allan or SCD.
5. The City will make commercially
reasonable efforts for the collection of clean source separated Recyclables
from all of its customers. In the event
that source separation of recyclables is not practical from commercial
customers, the City will cause for the collection of food waste and other
organics from select commercial customers and create separate routes for the
collection of remaining mixed waste so that it can be processed for recycling
by Allan at the MRF. It will be the
objective to cause for such these separately routed loads to have no less than
50 percent recyclable content.
6. If reasonably practicable and
consistent with existing permits, consents and other rights to operate, it will
be the objective for Allan to floor inspect and separate these selected
commercial loads for further processing, sorting, baling, and marketing.
7. The City will determine which
loads are delivered to Allan.
8. The City may be responsible for
the operation of the scales used to weigh City collected and City delivered
Recyclables and select loads at the facility operated by Allan.
9. SCD will be responsible for the
operation and maintenance of all its scales, video monitoring system, and
materials management database that serve the Transfer Station and Self-Haul
area. The City will have the right to
have a full-time supervisor in the scale house, along with live feeds from the
video and materials database systems.
The parties will work together to assure that any changes to records are
done with the knowledge of the City. The City will ensure monitoring and
participation in the scales, Materials Management Database, and video
monitoring system that serve the Transfer Station and Self-Haul area will not
materially impact the efficient operations or wait times at the Transfer
Station and Self-Haul area.
10. The City will be responsible for
a Materials Management Database and video monitoring of Allan-operated site(s);
access to this information will be made available to Allan on a live 24/7
basis. The Parties will also work
together to establish protocols to assure that any changes to records are done
with the current knowledge of the City.
11. All deliveries will be through
scales, except for those customers using the recycling drop-off areas on
12. The City will design and build
improvements on the City’s property that include the drop off and buy-back
center, self-haul area, and materials recycling facility that includes transfer
functionality sized to respond to the City of
13. Allan will provide design input,
the necessary equipment, both fixed and mobile, and will be responsible for
operation and maintenance of the completed complex for the Recycling and Buy Back
Complex.
14. SCD will provide design input
for the self-haul and
15. SCD will design, build and
operate the improvements to its Transfer Facility and haul waste materials off
site to processor(s) and disposal locations as approved by the City.
16. SCD may seek to expand its
current operations into
17. Allan will cooperate with the
City in the appropriate aspects of this partnership project - at a minimum, the
recycling aspects.
18. Attachment A Item 2.0 “Site
Plan” presents a conceptual layout of generally where facilities and
infrastructure improvements may be located.
It shows the City owned City Yard property with boundary lines, the City
owned streets (
19. Each party will advance required
permits and/or permit modifications, and all necessary regulatory approvals, in
a parallel path as prudent and practicable.
Permits for the Materials Recycling Facility, Buy-Back and the Drop-Off,
and the Self-Haul area located on City property shall be continuously owned by
the City. Permits for the Transfer
Facility Station located on SCD property shall be continuously owned by SCD. It may be possible to fast-track SCD
permitting requirements as they may be deemed a modification.
Additionally, each party will be
expected to comply with the major provisions outlined in the Request for
Proposals, which includes insurance, indemnification, assisting in meeting the
City’s sustainable goals of 70% diversion and LEED silver designation on new
buildings.
Summary of Materials Responsibilities
The following table presents materials and
responsibilities for the various parties:
|
Material |
Tipping Location |
Processing Functions |
Party Responsible |
|
Clean
Recyclables |
MRF,
buy back or drop-off |
Inspect,
store, process, shipping |
Allan |
|
Clean
Recyclables from outside sources, including SCD |
MRF,
buy back or drop-off |
Inspect,
store, process, shipping |
Allan |
|
Select
Commercial MSW for Recycling |
MRF |
Inspect,
floor sort, load out |
Allan |
|
MRF
residue Loadout |
MRF |
Inspect,
floor sort, load out |
Allan |
|
MRF
residue Hauling |
MRF |
Trailer
spotting, hauling, disposal |
SCD |
|
MSW from
City and self-haulers |
Transfer
Station |
Inspect,
load out, haul |
SCD |
|
Walk
up and auto traffic with recyclables |
Drop
Off |
Site
management and movement of materials |
Allan |
|
Self-haulers,
walk up with buy back materials |
|
Traffic
control; buy back payments; hauling to MRF |
Allan |
|
HHW |
Adjacent
to |
Traffic
control; unloading, inspection, sorting; packing; shipping; record keeping |
City |
|
Green
waste and Food Waste from City |
Transfer
Station |
Inspect,
load out, haul |
SCD |
|
Green
waste from Self-Haulers |
Self
Haul Area |
Inspect,
load out, haul |
SCD |
|
C&D
from City |
Transfer
Station |
Inspect,
load out, haul |
SCD |
|
C&D
from Self-Haulers |
Self
Haul Area |
Inspect,
load out, haul |
SCD |
Contract Modification
The contract with GBB was fully expended as of late March 2008. In
order to finalize the preliminary agreement between the City, Allan and SCD, GBB
continued to meet with and negotiate with all parties. GBB also was asked to
come to Council to present the preliminary term agreement to Council, as the
City’s lead negotiator. These final task related to the completion of a
preliminary term sheet caused GBB to exceed their contractual authority. This
seventh modification will bring the three-year total for GBB to five hundred
seventy three thousand dollars ($573,000). Based on Council direction, staff
will be negotiating with GBB regarding future involvement of the firm. It is
anticipated that staff will return in late June with an additional contract
modification for GBB to continue to consult with the City regarding industry
best practices and the final development of the public/private partnership.
To date, GBB has completed Phase I of their engagement, which
included the development of a comprehensive report on the operational and
financial review which was presented to Council at the March 14, 2006 Study
Session. The study session resulted in GBB presenting a variety of
recommendations to improve operational efficiencies and a detailed financial
analysis. GBB was engaged to provide
assistance and analysis related to the review of the Request for Proposals (RFP)
responses to test alternative service delivery methods of commercial and
transfer operations. GBB has also served as the lead City negotiator in
developing the frame work presented herein of a public/private partnership with
the City, Allan and SCD.
Financial Impacts &
Budget Actions
The
City has continued negotiations with SCD and Allan regarding financial terms of
the arrangement. These discussions and finalization of the terms will continue
into the development of the final contractual document. The financial package
and ultimate effect on ratepayers will be affected by the final cost of
construction, the actual number of tons received from collecting all commercial
waste in the City and the ability to successfully negotiated rates at
designated disposal locations. The results of these negotiations to date are
that Allan proposes to provide the City an upfront payment of $526,000; revenue
sharing of $30 per ton delivered and 50% of any revenue received from the sale
of recycled material above $135 per ton; and a host community fee of $4.50 per
ton on all material generated outside of
Funds
for the contract amendment are available in account 27441.555060.
Next Steps
Anticipated
key milestones are:
Negotiate Service Agreement Summer 2008
Final Cost & Contract
Authorization Late Summer 2008
Environmental Review &
Permitting Summer – Fall 2008
Project Financing Summer
– Fall 2008
Schematic Design to Council Winter/Spring 2009
Design/Construction/Acceptance Fall 2008 – Spring 2011
Start of Operations Spring
2011
Alternatives
Council could direct staff to pursue the original Option A from
October 30, 2007, which was the City providing transfer services and Allan
providing recycling services. This alternative would require a larger facility
on City Yard land than currently envisioned, and require greater capital
investment by the City. This option also
would increase the total transfer capacity in the City Yard area, creating the
potential for additional non-Santa Monica materials being brought to the City.
If this, or any alternative, is selected, staff would return to Council for a
concept approval in late Summer 2008.
Prepared by:
Donald
Patterson, Assistant to the City Manager, Management Services
|
Approved & Forwarded to Council: |
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Forwarded to Council: |
|
|
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|
City
Manager |
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P. City Manager |
Attachment: Conceptual Site
Plan