HomeMy WebLinkAboutItem 12 Discussion on Sanitation Curbside & Commercial Contracts and Future Direction
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AGENDA ITEM COVER SHEET
Meeting Date: September 20, 2005
Item # 12
Contact Name:
Contact Number:
Bob Zaitooni
6002
Reviewed By:
Department Director:
City Manager:
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78
Subject: Discussion on Sanitation Curbside & Commercial Contracts and Future Direction
Background Summary:
City's Commercial & Multi-Family Contract and the Residential Yard & Bulky Waste Contract will expire in August
2006. City will have the option of extending the Contracts for another two (2) years or negotiate a limited term service
with the current hauler. Additionally, the current residential garbage and recycling hauler, Waste Services of Florida,
Inc. (WSI) has indicated the desire to be released from their contract with the City due to the restricted terms of the
contract and City's dissatisfaction with their performance. The mutual termination will be negotiated to include interim
service until such time that a permanent solution is in place. Preliminary analysis by staff has determined that it is in
the best interest of the City to negotiate a mutual separation with WSI and seek a solution, which will encompass all
sanitation services. Primary options to consider include (1) phased-in in-house operations, and (2) an RFP process for a
re-packaged sanitation service by a private hauler. Staff request direction from City Commission regarding the
available options. City can also choose to require WSI to perform the work per Contract.
Issue:
Consideration of available options for providing sanitation services for residential curbside and commercial franchise
and provide direction to staff.
Recommendations
City Commission to review the current status of the residential and commercial sanitation services, consider available
options, and provide direction to staff.
Attachments:
WSI's performance summary and Resolution 95-13, commercial rate.
Financial Impact:
In-depth analysis for capital expenditure and probable rates for available options are currently underway by staff.
Type of Item:
o Public Hearing
o Ordinance First Reading
o Ordinance First Reading
o Resolution
o Commission Approval
~ Discussion & Direction
For Clerk's DeDt Use:
o Consent Agenda
o Public Hearing
o Regular Agenda
o Original Document/Contract Attached for Execution by City Clerk
o Original Document/Contract Held by Department for Execution
Reviewed by City Attorney
Reviewed by Finance Dept.
Reviewed by ( )
'1113/0 S- S:.e<- c.. tic c.L,-<-d
,
o N/A
o N/A
o N/A
City Manag-er
Robert Frank
C.enter of Good!./>.
~'o-e . . . .. .... ."IQ.
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Commissioners
Danny Howell. District 1
Scott Anderson. District 2
Rusty Johnson. District 3
Nancy J. Parker. District 4
Mayor
S. Scott Vandergrift
STAFF REPORT
TO:
The Honorable Mayor and City Commissioners
FROM:
Bob Zaitooni, Director of Public Works
DATE:
September 12, 2005
RE:
Discussion on Sanitation Curbside & Commercial Contracts and Future Direction
ISSUE
Should the Honorable Mayor and City Commission review the status of the current residential and commercial
sanitation services, consider the available options to provide sanitation services, and provide direction to staff?
BACKGROUNDIDISCUSSION
Residential Garbal!e & Recvclinl! Service
Waste Services of Florida, Inc. (WSI), formerly Florida Recycling Service, was awarded the contract for the
residential collection through a competitive RFP process and began operations in Ocoee in June 2004. The
terms of the Contract involved 5 years with an optional 2-year extension.
The rate charged by WSI is $10.98 per household for garbage (twice per week) and recycling (once per week).
This unit price was the lowest amongst the 6 proposals received by the City as summarized in the table below.
As per the terms of the contract, rates are subject to a 3% adjustment in years 3 through 5.
Advance Republic *Waste Onyx
Dis osal Services Pro Base & Alt. 1
$13.99 $12.35 $14.23 $13.78 $11.63
* Proposed graduated rate. Year 4 rates are shown.
A performance summary for the first 12 months of service for WSI is attached to this report. Beyond the
quantifiable statistics (misses, broken carts, etc.) as noted in the summary, the overall qualitative assessment of
the performance has been judged as "poor to fair" on a scale of "poor to excellent" based upon the number of
complaints received from the customers. The qualitative issues include, but not limited to leaving carts in the
road, leaving carts in front of the mail boxes, leaving carts in the middle of driveway, not collecting extra
garbage (even after a holiday), throwing bins, speeding, hydraulic spills, etc.
The current City monthly fee for residential curbside services (garbage, recycling, and yard waste) is $16.00 per
customer.
Commercial Franchise & Yard Waste Services
The Commercial & Multi-Family and Yard & Bulky Waste Contracts (2 separate contracts) were awarded in
August 2001 to Onyx Waste Services of Florida, Inc. City Resolution 95-13 (copy attached) established the
commercial rates that can be charged to commercial customers within the City limits. The commercial
franchise fee is 20%.
The yard waste rate is $1.68 per month per customer, which is included in the current $16.00 per month
customer rate.
Both the Commercial & Multi-Family and Yard & Bulky Waste Contracts will expire in August 2006; however,
City has the option of extending the contracts for another two (2) years or negotiate a lesser interim term to fit
the needs of the City.
The Commercial and Multi-Family Franchise Agreement is in good standing with relatively few customer
complaints. The commercial franchise service has traditionally produced revenues for the City, which is used in
the City's budget each year. The Yard & Bulky Waste service is graded as "fair" by staff based upon (1)
meeting the customer needs and (2) number of complaints received from customers.
City's Potential Options
Overall, staff considers the residential curbside service for garbage and recycling as unsatisfactory. Assessment
of penalties has not been effective in encouraging the hauler to improve the quality of service provided to the
City as intended. Therefore, staff recommends that City Commission consider alternative means of delivering
the services to the community. Preliminary discussions with the current hauler indicate that they are unhappy
with the current contract and are willing to negotiate a mutual termination of the contract.
Based on the performance of WSI, the City could seek to declare WSI in default of its obligations under the
Contract. This would allow the City to bring in another hauler on an interim basis or assume the service
obligations on an in-house basis or to require that WSI continue to perform until a replacement hauler can be
hired. The default approach would allow the City to seek to recover against WSI its actual damages incurred or
suffered by the City. It is likely that the increased cost of providing the same service during the remaining term
of the contract would be part of the actual damages. The City has a $500,000 Performance Bond to secure the
performance of WSI. The exposure of WSI is not capped at the amount of the performance bond and staff
believes that WSI is solvent. Notice to the surety would be required to pursue this option. The approach of
declaring WSI in default could result in litigation.
The residential yard & bulky waste service is (1) very restrictive in quantity, (2) does not meet the needs of the
customers, and (3) is difficult and inefficient to administer.
City will have the following several options to consider:
1. Decline to release WSI from the Agreement and either requires that they perform the work stated in
their Contract or terminate them for non-performance/default. In connection therewith, the City could
seek to recover its actual damages from WSI or attempt to negotiate a monetary settlement. The City
can declare WSI in default and require that they continue to provide services on an interim basis.
2. Consider in-house sanitation services for all residential and commercial needs of the City. Although
the rates are projected to rise, there is an opportunity to subsidize the residential rates with commercial
franchise revenues. With this option, City will have to require WSI to provide service while the option
is being implemented. Furthermore, City will have the opportunity to plan the residential C & D
franchise as desired.
3. Consider an RFP for the combined residential and commercial services package for services to be
delivered by a private hauler. Due to the drastic rise in fuel and other costs, higher monthly rates are
predicted. However, a combined multi-year package may result a lower overall rate for residential
customers. Again, with this option, WSI will be required to provide service while a new hauler is being
selected. The City will have the opportunity to plan for the residential C & D franchise as desired.
RECOMMENDATION
Staff respectfully requests that the Honorable Mayor and City Commission to (1) review the status of the
residential and commercial contracts (2) consider performance of the haulers, (3) consider the available options,
and (4) provide direction to staff. City Commission may elect to set a special work session to further evaluate
the options and allow staff to present the financial requirements for each option.
WASTE SERVICES OF FLORIDA, INC.
Performance Summary To-Date
Replace Repair Replace No. of % Total Penalties
Month Misses Cart Cart Bins Other Total Customers Occurance Invoice To.Date Net Pay % Penalty
Jun-04 0 0 0 0 0 0 0 0.0 $ 95,771.00 0 $ 95,771.00 0.0
Jul-04 0 0 0 0 0 0 0 0.0 $ 100,006.00 0 $ 100,006.00 0.0
Aug-04 188 54 11 0 0 253 8959 2.8 $ 98,370.00 $ 20,948.00 $ 77,422.00 21.3
Sep-04 2986 27 2 1 20 3036 8996 33.7 $ 98,776.00 $ 25,000.00 $ 73,776.00 25.3
Oct-04 309 44 0 0 15 368 9044 4.1 $ 99,303.00 $ 25,551.00 $ 73,752.00 25.7
Nov-04 21 44 7 3 8 83 9079 0.9 $ 99,687.00 $ 3,595.00 $ 96,092.00 3.6
Dec-04 11 30 12 2 0 55 9113 0.6 $ 100,061.00 $ 2,968.00 $ 97,093.00 3.0
Jan-05 262 75 7 5 0 349 9169 3.8 $ 100,678.00 $ 31,265.00 $ 69,413.00 31.1
Feb-05 415 72 16 1 2 506 9202 5.5 $ 101,038.00 $ 45,552.00 $ 55,486.00 45.1
Mar-05 145 121 10 1 12 289 9254 3.1 $ 101,608.92 $ 18,440.00 $ 83,168.92 18.1
Apr-05 21 37 12 2 5 77 9306 0.8 $ 102,179.88 $ 2,472.00 $ 99,707.88 2.4
May-05 171 66 12 3 4 256 9342 2.7 $ 102,575.16 $ 4,660.00 $ 97,915.16 4.5
Jun-05 97 123 3 1 2 226 9360 2.4 $ 102,772.80 $ 16,292.00 $ 86,480.80 15.9
Average 164 67 9 2 5 246 9183 3
Totals 4192 346 55 12 68 5498 $ 1,302,826.76 $ 196,743.00 $ 1,106,083.76 15.1
Notes: (1) Did not keep record for June & July 2004 during transition.
Waste Services of Florida, Inc.
Summary of CartslBin Damages
Replace Damaged Cart Repair Damage Cart Replace Bin
Subject to Subject to Subject to
Month Total Penally Penalty Total Penalty Penalty Total Penalty Penalty
Jun-04 0 0 0 0 0 0 0 0 0
Jul-04 0 0 0 0 0 0 0 0 0
Aug-04 54 54 $ 3,888.00 11 11 $ 440.00 0 0 $ -
Sep-04 27 22 $ 1,555.00 2 0 $ - 1 0 $ -
FY 03-04 $ 5,443.00 $ 440.00 $ -
Oct-04 44 33 $ 2,376.00 0 0 $ - 0 0 $ -
Nov-04 44 38 $ 2,736.00 7 1 $ 40.00 3 1 $ 19.00
Dec-04 30 24 $ 1,728.00 12 6 $ 240.00 2 0 $ -
Jan-05 75 69 $ 4,968.00 7 1 $ 40.00 5 3 $ 57.00
Feb-05 72 66 $ 4,752.00 16 10 $ 400.00 1 0 $ -
Mar-05 121 115 $ 8,280.00 10 4 $ 160.00 1 0 $ -
Apr -05 37 31 $ 2,232.00 12 6 $ 240.00 2 0 $ -
May-05 66 60 $ 4,320.00 12 6 $ 240.00 3 0 $ -
Jun-05 123 111 $ 7,992.00 3 0 $ - 1 0 $ -
FY 04-05 $ 39,384.00 $ 1,360.00 $ 76.00
Average 67 9 2
Totals 346 623 $ 44,827.00 55 45 $ 1,800.00 12 4 $ 76.00
FY 03-04 $ 5,883.00
FY 04-05 $ 40,820.00
Total $ 46,703.00
QHtSJ( If
RESOLUTION NO. 95- 13
A RESOLUTION OF THE CITY OF OCOEE, FLORIDA,
ESTABLISHING NEW RATES FOR COMMERCIAL AND
MULTI-FAMILY SOLID WASTE COLLECTION AND
DISPOSAL SERVICES; REPEALING INCONSISTENT
RESOLUTIONS; PROVIDING FOR SEVERABILITY;
PROVIDING AN EFFECTIVE DATE~
WHEREAS, on August 15, 1995 the city commission of the
city of Ocoee awarded an exclusive commercial and mUlti-family
solid waste collection franchise to Western Waste Industries, Inc.
of Florida ("the Franchise Agreement"); and
WHEREAS, the Franchise Agreement sets forth rates to be
charged for commercial and multi-family solid waste collection and
disposal services; and
WHEREAS, the Franchise Agreement was approved at an
advertised public hearing; and
WHEREAS, the provisions of Chapter 143 of the Ocoee City
Code require .that solid waste collection service rates be approved
by the city Commission at an advertised public hearing.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF
THE CITY OF OCOEE, FLORIDA, AS FOLLOWS:
SECTION 1. Pursuant to Section 143-8(A) and 143-9(B) of
the Code of Ordinances of the city of Ocoee, the city commission of
the City of Ocoee hereby establishes the following as the rates for
commercial and mUlti-family solid waste collection and. disposal
services:
See Exhibit "A" attached hereby and by this reference
made a part hereof.
SECTION 2. The provisions of resolutions or parts
thereof which are inconsistent or in conflict with this Resolution
are hereby repealed.
SECTION 3. If any section, subsection, sentence, clause,
phrase or portion of this Resolution is for any reason held invalid
or unconstitutional by any court of competent jurisdiction, such
portion shall be deemed a separate, distinct and independent
provision and such holding shall not affect the validity of the
remaining portion hereto.
SECTION 4. This Resolution has been adopted after a
public hearing preceded by at least seven days notice thereof and
of the proposed action by publication in a newspaper of general
circulation in the city.
EXHIBIT A
RATES FOR COMMERCIAL SOLID WASTE FRANCHISE
2 CUBIC YARDS 3 CUBIC YARDS 4 CUBIC YARDS
1 TIME $ 38.05 $ 45.96 $ 53.86
2 TIMES 55.14 74.19 93.24
3 T Ii.rES 77.01 .. ,... A n.., ...,,, ~.,
.L.U'l:.O.G ..&....JI:... VJ
4 TIMES 98.89 135.45 172.02
5 TIMES 120.76 166.08 211. 41
6 TIMES 142.63 196.71 250.80
6 CUBIC YARDS 8 CUBIC YARDS
1 TIME $ 74.28 $ 93.53
2 TIMES 131.18 167.95
3 TIMES 188.09 242.37
4 TIMES 244.99 316.79
5 TIMES 301. 89 391.21
6 TIMES 358.80 465.63
EXTRA PICK-UPS PER WEEK
2 CUBIC YARDS $10.00
3 CUBIC YARDS 14.00
4 CUBIC YARDS 16.00
5 CUBIC YARDS 19.00
8 CUBIC YARDS 22.00
ALL ABOVE PRICING INCLUDES FULL PRICE OF DUMPSTER RENTAL
ROLL-OFFS
OPEN TOP 20 CUBIC YARD
OPEN TOP 30 CUBIC YARD
OPEN TOP 40 CUBIC YARD
COMPACTOR ANY SIZE **
$111 PER PULL + LANDFILL*
121 PER PULL + LANDFILL
131 PER PULL + LANDFILL
141 PER PULL + LANDFILL
Minimum Charge - 1 pull per 30 days
* LANDFILL CHARGE = ACTUAL COST + 20% FRANCHISE FEE + 10%
ADMINISTRATION FEE (BAD DEBT, BILLING, CARRYING CHARGES)
** ROLL OFF COMPACTORS RENTAL = CUSTOMER DESIRED CONFIGURATION COST
PLUS 20% FRANCHISE FEE + 10% ADMINISTRATION FEE. WILL ASSIST
CUSTOMER TO OBTAIN THEIR OWN COMPACTOR.
OTHER CHARGES
. .
CONTAINER LOCK BAR
$45 INSTALLATION - CUSTOMER RESPONSIBILITY
FOR UNLOCKING
WHEELS
$75 INSTALLATION - CUSTOMER ROLL OUT
(4 CpBIC YARD MAXIMUM)
RETURN TO SITE
$30
- F/L EXTRA DUMP
EXIDBIT "B"
MONTHLY RATES AND OTHER CHARGES
RFP 01-001; PART A
(A) MONTHLY RATES FOR COMMERCIAL AND MULTI-FAMILY
SOLID WASTE SERVICES.
WEEKLY PICK-UP 2 CUBIC YARDS 3 CUBIC YARDS 4 CUBIC YARDS
1 time $ 18.40 $ 27.61 $ 36.81
2 times $ 36.81 $ 55.21 $ 73.62
3 times $ 55.21 $ 82.82 $ 110.42
4 times $ $ 110.42 $ 147.23
5 times $ $ 138.03 $ 184.04
6 times $ $ 165.64 $ 220.85
1 time
2 times
3 times
4 times
5 times
6 times
6 CUBIC YARDS 8 CUBIC YARDS
$ 55.21 $ 73.62
$ 110.42 $ 147.23
$ 165.64 $ 220.85
$ 220.85 $ 294.46
$ 276.06 $ 368.08
$ 331.27 $ 441. 70
WEEKLY PICK-UP
EXTRA PICK-UPS:
2 cubic yards:
3 cubic yards:
4 cubic yards:
6 cubic yards:
8 cubic yards:
$
$
$
$
$
40.00
45.00
50.00
60.00
65.00
per extra pick-up per week
per extra pick-up per week
per extra pick-up per week
per extra pick-up per week
per extra pick-up per week
ABOVE PRICES INCLUDE FULL PRICE OF DuMPSTER RENTAL
006.224832.2
.~
(B) ROLL-OFFS:
Pricing for roll-offs:
Open Top 20 cubic yard
Open Top 30 cubic yard
Open Top 40 cubic yard
Compactor Any Size
$85 per pull plus actual landfill disposal charges
$85 per pull plus actuallandf111 disposal charges
$85 per pull plus actuallandf111 disposal charges
$85 per pull plus actual landfill disposal charges
(C) OTHER CHARGES:
Other charges for services to be provided under Agreement:
If request by customer - any appropriate rental fees compactors. containers. etc. These rental
charges to reflect amortized costs of equipment with a return on investment. The specific
schedule for any such charges shall be subject to the approval of the City in accordance with ~
Section 14 of this Agreement.
(D) CONSTRUCTION AND DEMOLITION DEBRIS FROM
RESIDENTIAL BUILDING, ROOFING AND REMODELING:
Construction and demolition debris from residential building, roofmg and remodeling is NOT
within the scope of the proposed franchise. However, the City, at its sole option, may expand
the scope to include the foregoing. The pricing for construction and demolition debris from
residential building, roofmg and remodeling in the event it is added to the franchise will be:
This is to be hauled by roll off trucks and containers. Price for this service will be $85.00 per
haul plus actual landfill disposal charges.
006.224832.2
~
SECTION s.
October 16, 1995.
This Resolution shall become effective
PASSED AND ADOPTED this 5TH day of September, 1995.
~EST: f If
\A~.J uL
JU-I;iafton, fit.y 'Clerk
(SEAL)
APPROVED:
CITY OF OCOEE, FLORIDA
,$' $:xr d~J!,,4I
S. Scott Vandergr1t~, May~
Advertised August 2. 7 ,1995
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
this ~ day of September, 1995.
APPROVED BY THE CITY.OF OCOEE
COMMISION AT A MEETING
HELD ON SEPTt:tc'\.BE.i 5 , 1995
UNDER AGENDA ITEM NO. ""5l .B
FOLEY
'?1Jf ~
City Attorney
By:
C:IWP51IDOCSIOCOElGARBAGE.R.ES 18f29195 1 DEBBIEH1 PER:dh
2
Message
Page 1 of2
Zaitooni, Robert
From: Rosenthal, Paul [PRosenthal@foley.com]
Sent: Tuesday, September 13,200512:41 PM
To: Zaitooni, Robert; Horton, Wanda; Frank, Robert
Subject: RE: Draft Agenda for Sanitation Services
Bob:
Subject to the discussion below, the report looks fine. There are other options which you may want
to present to the Commission, even though you might not recommend them.
I believe that your report should include the option of declaring SWI in default and pursuing the
remedies available under the contract.(This would typically be the starting point for this situation.) It is
really a business decision whether to let WSI off without any penalty and some members of the
Commission may have a different view on this issue. Simply from a briefing standpoint, this option
should be presented. We should be careful not to lose sight of the fact that the City does appear to be
financially damaged as a result of WSI's default and that the approach being taken is to discharge them
without any penalty (even though we have contract provisions which would allow for the recovery of a
damages). WSI may well have business reasons for not wanting the contract terminated due to default
since that would become a disclosure issue when they bid on other government contracts. I suggest that
the following be added to your discussion of "Residential Garbage":
" Based on the performance of WSI, the City could seek to declare WSI in default of its
obligations under the Contract. This would allow the City to bring in another hauler on an interim basis
or assume the service obligations on an in-house basis or to require that WSI continue to perform until a
replacement hauler can be hired. The default approach would allow the City to seek to recover against
WSI its actual damages incurred or suffered by the City. It is likely that the increased cost of providing
the same service during the remaining term of the contract would be part of the actual damages. The
City has a $500,000 Performance Bond to secure the performance of WSI. The exposure of WSI is not
capped at the amount of the performance bond and staff believes that WSI is solvent. Notice to the
surety would be required to pursue this option. The approach of declaring WSUI in default could result
in litigation."
In connection with the above, you would add to your options the following:
" Decline to release WSI from the Agreement and either require that they perform per the Contract
or terminate them for non-performance/default. In connection therewith the City could seek to recover
its actual damages from WSI or attempt to negotiate a monetary settlement. The City can declare WSI
in default and require that they continue to provide services on an interim basis."
OTHER OPTIONS which you may want to consider presenting are:
1. Immediately seek an RFP for residential garbage & recycling services for a hauler to replace
WSI and have WSI continue until a new hauler is in place. This RFP could include yard waste services
to become effective in August 2006 or provide the City with the option to negotiate the inclusion of yard
waste services at a later date. Commercial services would be dealt with as a separate package at a later
date.
If you have any questions, please call.
9/13/2005
Message
Page 2 of2
Paul E. Rosenthal
Foley & Lardner LLP
Direct Phone: 407-244-3248
-----Original Message-----
From: Zaitooni, Robert [mailto:rzaitooni@ci.ocoee.f1.us]
Sent: Tuesday, September 13,20059:54 AM
To: Rosenthal, Paul; Horton, Wanda; Frank, Robert
Subject: Draft Agenda for Sanitation Services
Please review and comment.
Thanks.
Robert B. Zaitooni, P.E.
Director of Public Works
(407) 905-3100 x 6002 Direct
(407) 905-3170 Office
(407) 905-3176 Fax
rzaitoon i@ci.ocoee.fl.us
<<SR_ResidentiaL Cu rbside. doc>>
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9/13/2005