Exh 8FAGENDA ITEM #8I+
NOVEMBER 28, 2005
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
' AGENDA ITEM: Extension of the Existing Contract with Waste Services of Florida for Solid
• , Waste Services (Addendum)
SUBMITTED BY: Rick Carper, Public Works Director
• ~ DATE: November 18, 2005
BACKGROUND: At the November 14 meeting, the City Commission voted to defer a
• ' decision whether to renew the existing Sanitation Contract with Waste
• Services o)` Florida or to rebid the contract. The current deadline for
notification is December 1St, 2005.
• . Waste Services has agreed to a thirty-day extension of the deadline for
notification of intent to renew.
Staff was tasked with researching actual expected cost increases in case
' of a rebid. At Staff request, Waste Services generated an estimate of the
cost for automated pickup of residential (including multifamily) /
Commercial Type A (can pickup). They estimate a bid would be in the
• range of $11.50 to $12.50 per unit (current fee is $11.39). This would be
• an increase of between 1 % and 10%. The residential pickup fee is
approximately 70 to 73% of the total monthly fee, with commercial
• dumpster fees contributing about 15%.
This estimate has the following assumptions:
1) Seven year contract,
2) Household garbage service once I week,
• 3) City divided into five zones, one zone per day with all three
~' pickups (garbage, green wasta & recyclables) made on a single day,
4) Two can (garbage 8~ recyclables) automated collection,
5) Automated sideloader, one man crew for garbage,
' 6) Automated sideloader, one man crew for recyclables,
7) Manual rear loader, two man crew for green waste collection,
8) Flatbed truck for white goods and bulky waste (once !week),
9) WSF to buy the rollout garbage containers.
Assuming the previously obtained 25% cost increase for a rebid at the
• existing level of service is correct, this implies automated service could
provide approximately 20% savings over a rebid that specified
conventional pickup methods at the existing level of service.
.. The Commission has three primary options:
1) Rebid (must choose between existing level of service and
• automated pickup at reduced level),
2) Renew for 5 years at current level of service,
AGIJNDA ITIrNI #8F
NOVT:NIBIrR 28, 2UU5
3) Renew for 1 year at current level of service (WSF has
indicated willingness to do this as long as City commits to
rebidding contract at the end of that year). This option would
require City to waive the Fleet age requirement of the existing
contract. It would also require that any Pilot Programs to be
conducted at City expense (container purchase -estimated
cost $100! household involved, for earlier proposed application
too the 19~' Street area of Selva Norte, total cost would be
approximately $15,000)
BUDGET: Funds are budgeted in Sanitation Account 420-4201-534-3401 (Pickup
and Haul Contract - $985,635). When the budget was submitted in June,
Staff anticipated a 3% CPI increase for the year. The actual CPI increase
is expected to be 4.5% to 5%. Combined with a fuel surcharge that is
expected, to average $6,000 per month .($3,400 budgeted), Staff
anticipates a shortfall of about $50,000. This is a 5.1% increase over the
amount budgeted.
RECOMMENDATION: Because of the City Attorney's opinion that no changes in service
level or methods to the existing contract to promote operational
efficiencies would be allowed without rebidding the contract, the benefit of
renewing the existing contract is more questionable.
If the Commission chooses to rebid the Sanitation Contract, Staff
recommends the Commission designate a base or minimum acceptable
level of service, with enhancements to that level to be included as
Additive Alternates in the Bid documents.
ATTACHMENTS: Staff Report re: Extension of the Existing Contract with Waste Services of
Florida for Solid Waste Services from Nov. 14 Commission Meeting
REVIEWED BY CITY MANAGER: ~~
AGIrNDA ITIrNI #SF
NOVI;NIBI/R 2S, 2005
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Extension of the Existing Contract with Waste Services of Florida
for Solid Waste Services
SUBMITTED BY: Rick Carper, Public Works Director~~
DATE: October 31, 2005
BACKGROUND: Waste Services of Florida, Inc. (WSF) has been the City's Waste
Contractor since January 2004, after acquiring the Florida assets of
Browning Ferr6s Industries (BFI). BFI had been.the City's Waste
Contractor since February 2001. The existing contract expires May
31, 2006, but may be extended for additional five-year terms at the
City's option (Section 6.1-attachment 1). Written notice of intent to
extend must be provided to the Contractor not less than 180 days
prior to expiration of the current term (Deadline for receipt of
notification is Dec. 1 St, 2005).
The existing contract includes annual cost increases pegged to the
Consumer Price Index. In the four years since inception, waste
removal unit charges have increased by 8.4%. Curbside
(residential/ small commercial can pick-up) accounts have
increased from 4,716 to 4,966. Also, in July, the Commission
authorized payment of a Fuel Surcharge as a result of substantial
increases in fuel costs. For the month of September, this
surcharge increased WSF's operating revenue by 7.58%.
Comparing February.2001 to September 2005, total monthly.
operating revenue has increased from $63,960 to $85,071; a 33%
increase. This increase includes the CPI adjustments, the fuel rate
surcharge and increases in the number of accounts being serviced.
WSF will be eligible for an additional CPI adjustment in February
2006.
.. Informal liaison by Staff with surrounding municipalities {see
attachment 2) and with waste franchisees has yielded the
conclusion that, should the City decide to rebid the Sanitation
contract, we could expect to see rates up to 25% higher than
current costs if the City chooses to rebid the contract..
Waste Services of Florida has written to the City indicating their
desire not to renew the current contract, because of ongoing
operational losses (attachment 3). They have indicated their
AGENDA ITEM #8r
NOVEMBER 23, 2005
intention to uphold the contract if the City chooses to extend and
' ' also indicated they would like to submit a bid if the City chooses to
.. go out for bids again.
Neptune Beach, which also uses Waste Services and has a
contract expiration date the same as ours, has already notified the
hauler of their intention to re-bid.
" Advantages !Disadvantages of Extending Current Contract:
Pro: Price Stability
Professional working relationship
Excellent, responsive service
Con: Contractor does not want to renew -losing money; will
service level remain high? (*)
` " Fleet age -Contractors fleet is at the maximum average age
allowed by the contract (fleet average not more than three years
old, no equipment over seven years old) -will require substantial
' " capital to modernize fleet.
* Contract has a Liquidated Damages Section, which allows the
• ~ City to deduct penalties from monthly payments. Also Section 6.K
of the contract allows the Commission, following notice of default,
to cancel the contract. If cancelled, the City may "...take over the
work and take possession, without further notice to the Contractor
• and without judicial proceedings, of any and all equipment of the
Contractor ..."
Advantages /Disadvantages of ReBidding Contract:
Pro: Allows a new, competitive contract with price acceptable to
all.
' • Potential for including modern .collection methods (e.g.,
" automated waste collection) as cost containment measures.
' ~ Con: Substantial price increase likely
Probable service level change (one day a week collection
possible).
Having to rebuild a professional working relationship with
• - new contractor (previous contractor before BFI/VIlSF was a
nightmare to work with).
Regardless of the choice to renew or rebid, Staff expects a rate
increase for Sanitation Services will be required in the near future.
" BUDGET: Funds are budgeted in Sanitation Account 420-4201-534-3401
(Pickup and Haul Contract - $985,635). When the budget was
submitted in June, Staff anticipated a 3% CP! increase for the year.
AGENDA ITEM #3I~'
NOVEMBER 23, 200
The actual CPI increase is expected to be 4.5% to 5%. Combined
with a fuel surcharge that is expected to average $6,000 per month
($3,400 budgeted), Staff anticipates a shortfall of about $50,000.
' This is a 5.1 % increase over the amount budgeted.
RECOMMENDATION: Staff opinion is split on recommending extension of the
existing contract or rebidding. The current excellent level of service
and professional working relationship between the City and the
operational staff at WSF is the driving force for renewal. However,
if the Commission elects to renew, Staff also recommends the City
Manager be authorized to investigate operational enhancements of
existing collections procedures (such as Automated / Semi-
Automated Pilot Programs), with the intention of sharing any cost
benefits attained between the Contractor and the City.
Enhancements determined to be cost effective or more efficient will
be brought back to the Commission for approval.
If the Commission chooses to rebid the Sanitation Contract, Staff
recommends the Commission designate a base or minimum
acceptable level of service, with enhancements to that level to be
included as Additive Alternates in the Bid documents.
ATTACHMENTS: Excerpt from Annual Sanitation Contract dated February 1St, 2001
(Section 6, Paragraph I. and K.)
Spreadsheet comparing other local waste removal prices
Letter dated October 25, 2005 from Waste Services of Florida
REVIEWED BY CITY MANAGER:
AGENDA ITIJNI #8I'
NOVIrNIBI:R 28, 2005
Contractor fail to remove the refuse, the City will remove
• the refuse and the City shall deduct costs incurred from the
next .scheduled payment.
G. TAXES
~~ The Contractor shall pay all federal, state and local taxes,
to include sales tax, social security, workmen's
~~ ~ compensation, unemployment insurance, and other required
-• taxes which may be chargeable against labor, material, ,
equipment, real estate and any other items necessary to and
•~ in the performance of this contract.
H. ,CITY NOT LIABLE FOR DELAYS
It is expressly agreed .that in no event shall the City be
. liable or responsible to the Contractor or to any other
' person on account of any stoppage or delay in the work
provided for herein, by injunction or other legal or
equitable proceedings brought against. the Contractor, or
~• ~ from or by or on account of any delay ,from any cause over
• ~ which the City has no control.
~~~ ~ I. EXTENSION OF CONTRACT
The initial term of this contract may be extended for .
~• additional five (5)~year terms, at the option of the City if
City notifies the Contractor in writing, not Less than 180
' days ,prior to the expiration of the initial term, of the
.. City's intention to extend this contract at the same terms
and conditions.
. J. SCHEDIII,E OF' PAYMENTS
"• 1. For and in consideration of the services to be
•, performed by the Contractor pursuant to this agreement,
the City agrees to make payments to~the Contractor as
• follows:
(a) Commercial: end of the month payments shall be •
computed by multiplying the total monthly
commercial yardage collected by .the rate of (Bid
• ~ rice per cubic yard for containerized, (Bid •
price) per roll off, plus disposal fees, fBid
Pr'c per customer per four{4) cans for hand pick
•" up, and SBid Price) per cubic yard for~yard waste,
„ laid Price) per pull for roll compactor plus
disposal.
21
AGENDA ITEM #8r
NOVI;NIBIJR 28, 2005
(b) Residential: end of the month payments shall be
computed by multiplying the initial number of
residential units in the service area times Bid
- Price per household for garbage, fBid Price) for
„ ~ recycling, and fBid Price) for yard waste.
(c) .Multi-family residential recycling: end of the
month payments sha•11 be computed by multiplying
• ~ the initial number of units in the service area
• times (Bid Price) per unit.
Contractor shall provide the City records identifying the
•- commercial account, volume of collection, type of container
and such other information as requested by the City on the
'~ ~ ~first~{1st) of each month. Payments to the Contractor will
.. be made on a monthly basis with the first payment made by,~
the twentieth (20ei) of the month following the month the
payment .covers.
K. CANCELLATION OR ANNULMENT OF CONTRACT
The Contractor and the City recognize that it is of
paramount importance that the contract be performed and the
individual customers receive service. If the Contractor
fails to begin work at the time specified, or fails to
' perform the work with sufficient number of workmen and ~.
• sufficient and. adequate equipment to insure the proper and
substantial performance of said refuse collection work, or
~~ ~ performs the work unsuitably, or discontinues the
prosecution of the work or any portion thereof, or for any
other cause whatsoever, excepting only acts of God, does not
'~ carry-on the. work as. aforesaid, or if the .Contractor becomes
insolvent or declares bankruptcy or commits any act of
bankruptcy or insolvency, or allows dny final judgement for
'~ the payment of money to stand against him unsatisfied, and
. if the City, through its Public Works Director, gives notice
of such default, and the Contractor or his surety fails
~~ to cure such default within seven (7) days after giving of ~ ~~
such notice by the City, then the City may thereupon, by
• action of the City Commission,~declare the contract '
- canceled.' Upon declaration of cancellation, the City may,•
at no cost to the~City or compensation to~the Contractor,
'~ ~ take over the work and take possession, without further
..~ notice to the Contractor and without judicial proceedings,
of any.and all equipment of the Contractor and operate the
same in performance of the work and services described in
.. ~ this contract for the unexpired term of the contract, or for
a period of three (3) months, whichever the City elects, or
the City may enter into agreements with others for their
performance o.f the work and services herein contracted for.
` - 22 '
AGENDA ITi/M #8r
NOVI;NII3ER 28, 200
Such cancellation of the contract shall not relieve the
Contractor or the surety of liability for failure to
faithfully perform this contract, and in case the expense
incurred by the City in performing or causing to be
performed the work and services provided for in this
contract shall. exceed -the bi.d price of the Contractor, as
provided in this contract, then the Contractor (and the
surety to the extent~of its obligation) shall be liable to
the City for said amount. Contractor's surety or security
will not be released until such time as the term of this
contract would otherwise have expired.
L. OPERATION DURING.DISPIITE
'- - In.the event the City has not cancelled the:.cor..tract in
accordance with the terms provided above, and there remains
a dispute between the Contractor and the City, the
" Contractor agrees to continue to operate and perform under
the terms of this contract while said dispute is pending,
and agrees-that in the event a suit is filed for injunction
~or other relief to continue to operate the system. until the
final adjudication of the court.
SECTION 7 - QUALITY OF SERVICE
A. CHARACTER OF WORKMEN AND EQUIPMENT
'_ The direction and supervision of refuse collection and
,~. disposal and salvage operations shall be by~competent,
qualified and sober personnel; and_ the Contractor .shall
' devote sufficient personnel, time~and attention to the
direction of the operation to assure performance
.. satisfactory to the City. All subcontractors, .
• superintendents, fo-remen and workmen employed~by the
Contractor shall be careful and competent,. The Contractor
~~ shall.also'provide uniforms with I.D. badge, said badge.
• shall be turned over to the City upon termination of the
employee. All employees used by the Contractor during the
'~ terms of this agreement, shall be of a standing or
affiliation that will permit the Contractor's performance
herein to be carried on~harmoniously and•without'delay, and
'- in no case, or in any circumstances, will such employees
,,, _ cause any disturbance, interference or delay to any.work or
service rendered to the City or by the City and in no case
or in any circumstances will the employees conduct
themselves negligently, disorderly or dishonestly in the due
23
AGENDA ITEM #8F
NOVEMBER 28, ?005
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AGENDA ITI;ivI #3F
NOVEIVIBI;R 2S, 2005
Servici
1~ ~ of Florid
October 25, 2005
Jim IIanson, City Manager
Citv of Atlantic Beach
800 Seminole Road
Atlantic Beach, Florida 32233-5445
Re: Franchise Agreement for the Collection of Solid Waste with Florida Recycling
Services, Inc.
Dear Mr. 3-Janson:
You asked me to write to you regarding an extension of our existing Franchise
Agreement which expires effective May 31, 2006.
Under the existing agreement, even with the fuel surcharge which the City recently
approved, FRS operates every month at a loss in providing its residential and commercial
waste collection services in Atlantic Beach. Notwithstanding this, FRS has throughout
the term, continued to provide quality service because we value our relationship with the
City. At the same time, because of the ongoing losses, FRS has asked the City to
consider re-bidding the Franchise Agreement. It would be FRS's intention to submit a
bid in response to the City's call for tenders.
If the City elects instead to renew the existing Franchise Agreement, it is FRS's intention
to continue to provide services to the City with its same commitment to customer service.
Sine(Jer~ely, ~~~
Garth Fowles
District Manager
7580 Philips Hwy. •Jacl:sonville, Florida 32256
Phone: 904-731-3440 • Fax; 904-443-7031