FEDRAC PKT 06-14-2005
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AGENDA
1.
CALL TO ORDER
2.
PUBLIC COMMENT
3.
COMMITTEE BUSINESS
',II
A.
B.
Approval of the May 10. 2005 Minutes
Extension of Contract Term for Solid Waste/Recycling Services (Rob)
Action
Action
4. OTHER
5. FUTURE AGENDA ITEMS
A.
B.
6. NEXT MEETING:
FEDRAC - Economic Development: July 12.2005
FEDRAC: July 26. 2005
CommitJee Members:
Eric Faison, Chair
Jeanne Burbidge
Jim Ferrell
f-:itv SWj[
Patrick Doherty. Economic Development Director
Jordan Wheeler. Management/Tltern
(253) 8352403
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MINUTES
Committee Members in Attendance: Chair Eric Faison, Member JealUle Burbidge, and Member Jim FerrelL
City Council Members in Attendance: Mayor Dean McColgan, Deputy Mayor Linda Kochmar, and
Councilmember Jack Dovey.
Staff Members in Attendance: David Moseley, City Manger; lwen Wang, Management Services Director; Derek
Matheson, Assistant City Manager; Pat Richardson, City Attorney; Patrick Doherty, Director of Economic
Development; Jordan Wheeler, Management Intern,
Others in Attendance: none.
L
CALL TO ORDER
Chair Eric Faison called the meeting to order at 5:35 p.rn.
2.
PUBLIC COMMENT
None.
3,
COMMITIEE BUSINESS
a)
Approval of the April 12. 2005 meeting minutes
Motion to approve the Apri/12. 2005 meeting minutes. Motion seconded and carried.
b)
Discussion ofCitv Center Redevelopment Funding
Presented by Patrick Doherty
The committee was asked to discuss whether to consider dedicating all or a portion of the 2.57
million old city hall sale net proceeds to a one-time City Center redevelopment fund. The fund
would be used for infi'astructure contributions for City Center development projects that are
consistent with the comprehensive plan, Mr, Doherty discussed the attachment that presented the
possible criteria for considering partnerships in city center development projects,
The committee discussed the 2,57 million and where the money would go if it were not put into a
city center redevelopment fund. Staff explained that the money was previously designated to pay
off the balloon payment of the new city hall in 2007. Ms. Wang explained that the 2.57 million is
considered a capital fund because it is a one-time fund in nature.
Staff reported that if the money does not become available in 2007, the balloon payment would be
made through borrowing.
The committee discussed the action of redirecting the old city hall proceeds to a redevelopment
fund, or whether to possibly redirect only a portion of the funds,
A-I
The discussion moved to address the question of creating an economic fund and how the fund
would be used, The committee discussed ideas for the fund such as property acquisition or
partnerships for public uses in downtown developments, The committee agreed that the fund
could be used for either a major public project that is beneficial to a greater downtown area as a
whole, or for the gap fmancing of a specific project.
The committee further discussed the availability and use of a city center redevelopment fund and
the availability of such a fund.
The committee agreed to direct staff to research other similar economic redevelopment funds,
review criteria for use of such a fund, research the process and guidelines for establishing a fund,
research how the balloon payment on the new city hall would be paid for without the 2.57 million,
and look at other sources of funding for redevelopment fund,
c)
Bid Acceptance for the Two New Pool Cars
Presented by Iwen Wang
Ms. Wang gave a brief presentation on the bid results for the two new police pool cars,
Motion to forward the addition of two police pool vehicles and bid results to full Council at the
May 17, 2005 meeting. Motion seconded and carried.
4,
OTHER
None.
5.
FUTURE AGENDA ITEMS
6.
NEXT SCHEDULED MEETING
June 14, 2005 at 5:30 p.rn. in the Hylebos Conference Room.
7.
ADJOURN
Chair Eric Faison adjourned the meeting at 6:15 pm.
Recorded by Jordan Wheeler
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CITY OF FEDERAL WAY
MEMORANDUM
Date:
To:
Via:
From:
June 7, 2005
Finance, Economi Development and Regional AtTairs Committee
David H. Mosel tanager
Rob Van Orsow, olid Waste/Recycling Manager, Public Works Dept
Waste Management Contract Extension Negotiation
GL.....J~ ~
Subject:
BACKGROUND:
The initial teml of the current solid waste and recycling services agreement with Waste Management of Washington,
Inc. (WM) extends for a five-year period from 2002 through 2006. The agreement allows the City, atits sole
discretion, to exercise up to two, two-year extensions under the existing contract provisions. Should the City decide
to exercise the contract extension for 2007 tlu'ough 2008, notice must be provided to WM before June 30, 2005.
At the April 26th FEDRAC meeting, staff presented background information on the potential for extending the
length of the Solid Waste and Recycling Collection Contract. Since that time, staff,engaged in negotiations with
representatives horn WM regarding possible changes that WM would consider in exchange for the City granting an
extension of contract teon. The two main changes the City sought included: expansion of the range of organic
materials targeted by the yard debris collection program, and an increase to the Cily Administrative Fee to avoid a
Solid Waste & Recycling Utility Fund deficit in 2007.
Staff was unable to reach agreement with WMon either expansion of yard debris collection services or to collect an
increased City Administrative Fee. To best appreciate the stalemate in negotiations, background on WM's revenues
follows, Contract rates were bid based on two components: Disposal costs and Collection Service costs. Disposal
costs only increase when the County changes tipping fees. The Collection Service portion of rates increases each
year by 60% of the specified Consumer Price Index (CPl). Beside 'natural' growth in the number of accounts, this is
the main way WM can increase revenues under this contract. WM claims that the 60% figure is too low, and the
longer the contract term, the more adverse the loss of profitability. To staff's surprise, WM requested reducing the
length of the contract, so that a bid process (or renegotiation) could occur sooner. Alternately, WM offered to
provide the City with a package of proposed service changes that would include rate increases and the addition of
some services. However, staff believes that considering general rate increases in exchange for relatively minor
service enhancements would be undesirable. The existing scope of services should continue serving ratepayers well
for the foreseeable teon of the Contract, with minimal rate growth during this period, Therefore, staff will
reconunend exercising the first of the two-year contract extensions at this time to extend the existing contract through
2008. Staff will return to the City Council in 2007 to seek input on the potential for exercising the second two-year
extension, which would extend the contract through 20 I O.
Increase in City Administrative Fee to Support SW/R Utility
Since WM has little interest in making acconunodations for a contract extension, WM refused to consider a pass-
through increase of the City Administrative Fee, WM stated that this would be outside the Contract's original tenus
and conditions, and they would only allow this if the City conceded a sh°I1er contract length. However, the City
Attorney's office has provided an opinion that the City may enact an increase in the fees collected tor pass-through
to die City via an ordinance process, while remaining in compliance with lhe original terms and conditions of dIe
Contract. An ordinance to this effect wiU be presented to the City Council for consideration at a future date.
Change in Yard Debris Dump Site
The Contract has provisiöns for the City to allow rate increases based on changes in dump sites, WM offered
evidence that their costs have increased due to the closure of tile yard debris dumpsite in Covington, which has
resulted in longer hauls to Maple Valley. Staff will request additional data to corroborate WM's claims, and ¡fvalid,
will propose a rate increase for yard debris collection services to offset these increased costs. StatTplans to return to
the City Council with additional information once the data is validated.
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Options
L Direct the City Manager to provide notice to Waste Management of Washington, Inc. that the current
Comprehensive Garbage, Recyclables and Yard Debris Collection Contract (Agreement #01-144) be extended under
its original terms and conditions for a period of two additional years, in accordance with Section I of said agreement,
which will extend the agreement through 2008.
2. Direct staff to determine the merit of WM's request for a rate increase to offset increased yard debris hauling costs
(resulting from the longer distance to an altemate dump site due to closure of the original site) and retum to the City
Council with additional information about a potential rate change for yard debris collection services.
3. Do not exercise a contract extension for the Comprehensive Garbage, Recyclables and Yard Debris Collection
Contract (Agreement #01-144), thereby allowing the contract to expire at the end of 2006. In the meantime, direct
staff to either negotiate with potential hauljng companies for similar services, and/or prepare a Request for Bids or
Request for Proposals process to seek a new hauling contract starting in 2007.
Recommendations
Stafffèconnnends Options I and 2.
ColIlßÚttee Action:
Forward Options I and :2 to the June 21"\ 2005 City Council Consent Agenda,
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