07-16-2019 Solid Waste CollectionPowerPoint Presentation
Solid Waste Collection Services - Contact Award
Public Works Department
Solid Waste & Recycling Division
Policy Question
Should the Council authorize the Mayor to finalize and execute a contract with Waste Management of Washington, Inc. for collection of garbage, recycling and compostables?
Federal Way’s SWR Timeline
Waste Management Acquires
FW Disposal
3 Proposals Received
Current Contract Negotiated
Aug.-Sept.
2018
Aug.
2020
2001
1999
2011
Apr.
2019
Solid Waste Competitive Bid Process
Resolution 18-740
&
Community Solid Waste Survey
New Contract Begins
Proposal Evaluation
Quantitative Evaluation:
Proposed fees in base contract
Qualitative
Evaluation:
Written proposal
Site visits and interviews
40%
60%
Scoring Summary
Element
Weight
Recology
Republic
Waste Management
Service Fee Evaluation
60%
56.9
55.6
60.0
Proposal Evaluation
35%
30.1
18.2
28.0
Interview & Site Visits
5%
4.3
3.0
3.8
WEIGHTED TOTAL
100%
91.3
76.8
91.8
Highlights of New Contract
No-cost annual bulky waste collection
Lower fees for paid bulky item collection
No-cost extra storm debris collection
New carts & fully automated collection
Equalized multifamily / commercial rates
Value of recyclables – itemized on invoice; tracking commodity market
Waste Management ProposalKey Additions:
Dedicated customer service team
Dedicated education & outreach staffing
6 new downtown litter compactors
New collection fleet (near zero emissions)
Wage parity for all drivers
New education & outreach programs
Recommendations for Service Alternatives
Accept:
Every-other-week residential recycling
Non-embedded residential yard waste service
Quarterly residential billing
Reject:
Mandatory garbage service
Alternative annual rate escalators
Reduced vehicle standards
Expanded commercial recycling services
Multifamily/Commercial Rates
Service Level
Current Rates
New Rate
1 cubic yard, 1x/week
Commercial: $99.05
Multi-Family: $115.99
$115.65
2 cubic yard, 1x/week
Commercial: $166.45
Multi-Family: $205.09
$193.92
4 cubic yard, 1x/week
Commercial: $295.60
Multi-Family: $348.16
$343.71
Drop Box – 20 yard uncompacted (per haul, including monthly rent)
Commercial: $221.50
Multi-Family: $268.53
$279.37
Compactor – 20 cubic yard (per haul)
Commercial: $210.32
Multi-Family: $256.55
$220.55
Residential Rates
Service Level
Current Rate
New Rate
35-gallon Garbage Cart (1x/month)
10-gallon Garbage Micro-can (Discontinuing)
$7.84
$8.05
$ 9.83
20-gallon Garbage Cart
$11.87
$ 15.32
32-gallon Garbage Can (Discontinuing)
35-gallon Garbage Cart
$19.44
$21.62
$ 20.41
64-gallon Garbage Cart
$29.54
$ 30.32
96-gallon Garbage Cart
$39.65
$ 45.16
96-gallon Yard Waste Cart
$11.36
$ 11.96
Options Considered
Option 1: Authorize the Mayor to finalize and execute a contract with Waste Management of Washington, Inc. for collection of garbage, recyclables, and compostables.
Option 2: Do not authorize entering into a contract with Waste Management of Washington, Inc. and provide direction to staff.
Mayor’s Recommendation
Option 1: Forward to July 16, 2019 City Council Consent Agenda for approval
Questions?
Acknowledge staff support for this process, including Jeanette Brizendine, the City’s Recycling Manager, and the Clerks Office and Law Department.
the City’s consultant, Jeff Brown has provided excellent support as well. This is at least the fourth time Mr Brown has provided contract development and negotiation services for our
City. His savvy knowledge and creativity has help ensure the procurement process benefits City ratepayers.
***
***
This evening, we also have representatives from the local hauling companies who have contributed immense amounts of effort into this process. They’ve challenged us to make a better RFP
document and a better base contract via the hauler review process, and they’ve put tons of effort into crafting proposals. My hat is off to them – the City teams that evaluated the
proposals visited their operations and talked with their staff in many roles, and these people should all be very proud of the services they provide day in and day out.
The policy question is to consider award of the contract to the lowest cost, responsive, responsible proponent
This is a simple timeline, but it shows WM beginning operations in CFW back in 1999 – after purchase of Federal Way Disposal. The City conducted a competitive Request For Bids process
just two years later, and WM was the successful bidder.
Around 2010, the City Council directed that a contract negotiation process take place, which resulted in the current contract that’s now nearing its end.
Last August, City Council Resolution 18-740 got this RFP process rolling, then City conducted a solid waste services survey. After Council authorization, the industry review process
sought input from five different hauling companies that was incorporated into the proposal and base contract. The RFP was released in January - in April three proposals were received
– From Recology/Cleanscapes, Republic Services, and Waste Management.
The three proposals were evaluated in the same way:
Quantitative Evaluation was provided by our consultant who developed spreadsheets to tally costs based on the RFP’s base contract.
Qualitative Evaluation focused on technical review of the written proposal as well as site visits and interviews.
Two staff City staff teams independently scored these two areas.
And here are the scoring results. WM was the winner when it comes to proposed rates, and Recology/CleanScapes was rated highest both in proposal evaluation and the interview.
***
Again, at this point I have to acknowledge the tremendous effort put in by all three proponents participating in this procurement process. Each was clearly determined to be responsive
to the RFP.
Based on the scoring, the Mayor directed that staff work with WM to finalize contract details and incorporate their proposal’s additional services into the draft agreement. The contract
is included in the packet for tonight’s meeting.
Details of call2haul – Residents will get up to a cubic yard of debris removed as well as up to three large items, such as appliances, mattresses, or furniture.
Bulky waste collection is available to commercial and MF customers at lower rates.
After a city-declared wind or ice storm
All new carts, and all cart-based services – more efficient lower operations costs
The new contract equalizes MF and Comml rates, making it easier to set rates/pricing for mixed use developments
Ratepayers share in the risk and reward for recyclables commodities markets, which will be itemized on invoices. This also creates an incentive to improve recycling practices, since
collectively ratepayers will influence the related economics.
The first two bullets – would come on-line September 1 of this year – a full year before new contract operations begin. WM proposed using the City’s original garbage company line (833.3333)
– which will ring to a dedicated customer service team and allow reporting of call statistics based solely on that incoming line. And they are assigning dedicated education support
specifically to Federal Way, based out of their Auburn office..
These other proposal highlights come on-line with the new contract operations:
WM will install and service solar powered compactor litter cans at City specified locations downtown.
WM will order a brand new collection fleet powered by renewable natural gas, featuring “near zero” emissions, and at the start of the contract Garbage, Recycling, and Yard waste drivers
will be paid on the same scale helping to improve labor equity.
WM also offered a variety of new outreach programs, which have been summarized and included into a table that’s part of the contract. Descriptions of their program details are included
into the contract – and it’s an impressive 6 pages long.
The base contract included a few service increases suggested by the survey, that we tested for pricing via the RFP. By accepting the three alternatives on the right it removes the cost
of those service alternatives from residential rates, saving over $13/month for single family ratepayers. These alternatives continue existing practices for each of these three service
elements. So there’s no roll-back in services for accepting these alternatives.
Several alternatives – on the left, are not recommended, either due to higher cost or lack of benefit for ratepayers:
Requiring mandatory sign-up for single family garbage service would increase rates over $5 per year.
We looked at two alternatives to CPI for setting future rate increases – but they were not cost-effective. It meant only a modest rate savings initially, but then higher rates increases
in later years
We asked if allowing the use of the existing fleet or older trucks at the start of the contract would have rate savings, but it would not.
The last alternative sought pricing for expanded recycling services for commercial customers, but the high cost would yield very little additional tonnage. The base contract includes
limited commercial recycling services for small businesses, and full recycling services for MF customers, so this commercial recycling alternative would be rejected.
The contract was finalized based on these recommendations.
Speaking of Commercial services, here are sample service levels for the most popular dumpster sizes.
There’s a lot happening behind these numbers.
One factor is the commodity credit/debit for recyclables collected under the contract.
Overall revenues for dumpster services will increase under the new contract – a projected 16% when comparing today’s rates. But the New Rates listed are reduced by the initial commodity
credit (in this table, applied to service volume), so these rates are lower than what is listed in the contract. On the bill, a customer would see their base rate per the contract,
and also see an credit for the intial recycling commodity value.
This table also shows the impact of equalizing the rates between MF and Commercial customers – which results in rate savings for MF customers as compared to the current contract. In
the non-residential rate base, 40% of the collected yards are MF yards – these combined cubic yards will cost less to service than under the current contract, but 60% are business cubic
yards, and those collected yards will cost more than under the current contract. The overall increase in projected costs for non-residential dumpster services is roughly 16% (again
before the commodity credit is factored in). Also note that the MF sector will recycle a lot more than the commercial sector under this contract (simply because there is comparatively
little embedded commercial recycling services built into the new contract), so equalization is an indirect way of recognizing the positive impact of increased recycling levels and reduced
disposal costs for this sector. Under the current contract, MF accts have paid a premium to receive recycling service, and they had a higher diversion rate than the commercial sector
- yet have not received commensurate commodity credit, so the equalized rates indirectly offset this inequity.
Here are the residential rates that begin at contract start in fall 2020. These rates include the savings of accepting the three alternatives discussed earlier. (EOW recycling, Subscription
YW, and Quarterly Billing)
These rates also reflect the initial commodity credit for recyclables – coming in at $13.61 per household/mo.
Some of the smaller container sizes have a modest monthly cost increase, to better reflect the cost of providing services.
Starting at the top, Our ‘super recyclers’ will still have a rate starting at less than $10 per month. The ramp up of pricing for larger service sizes still makes participation in recycling
and yard waste services attractive, yet the cost per gallon of garbage service also decreases as cart size increases (so there’s still a ‘volume discount’).
With these rates: single-family customers, as a group, will incur service costs close to the same monthly revenue as at the end of the current contract. That’s almost like saying: this
procurement process resulted in more services without an overall residential revenue increase. These new rates factor in the call2haul service and that should also result in cleaner
neighborhoods and right-of-ways.
So here are the options outlined in the Agenda Bill
Finalize the Contract with WM
Or
Take an different approach
And the Mayor’s recommendation of Option 1