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HomeMy WebLinkAbout12-85 Resolution No. 12-85 RESOLUTION AUTHORIZING THE CITY MANAGER TO EXERCISE AN OPTION TO EXTEND THE TERM OF AN AGREEMENT WITH WASTE MANAGEMENT OF ILLINOIS, INC. FOR THE PROVISION OF REFUSE, RECYCLABLES AND YARD WASTE COLLECTION SERVICES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Sean R. Stegall, City Manager, be and is hereby authorized and directed to exercise the City of Elgin's option to extend the term of the agreement with Waste Management of Illinois,Inc. for the provision of refuse, recyclables and yard waste collection services for an additional two year from November 1, 2012 through October 31, 2014. s/ David J. Kaptain David J. Kaptain, Mayor Presented: April 25, 2012 Adopted: April 25, 2012 Omnibus Vote: Yeas: 5 Nays: 0 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk • :L :, Y _ y ^ . ELGIN THE CRY IN THE SUBURBS AGENDA ITEM: M V MEETING DATE: April 11, 2012 ITEM: Extend the contract term with Waste Management for an additional two years (cost estimate $4,861,260 annually) OBJECTIVE: Provide comprehensive solid waste and recycling services for the community RECOMMENDATION: Authorize staff to issue a letter of intent to extend the contract term with Waste Management for an additional two years BACKGROUND With over 30,000 households receiving service each week, the city's solid waste and recycling programs importance to the community is evident. On September 12, 2002, the city council forged a public-private partnership with Waste Management, Inc. thus moving the city to the forefront of solid waste collection. In 2002, Elgin became one of the first cities to adopt a modi- fied volume collection program using a two-cart program. Since that time, the city's award- winning program has served as a model for other communities looking to modernize their solid waste collection efforts. The program encourages recycling and waste reduction. Prior to 2002, the community's waste collection process encouraged consumption. Under the old model, the average household dis- posed of 53.5 pounds of trash per week. In 2011, the average household disposed of 30.68 pounds of trash per week. Even though the number of households has increased by thousands since 2002, the total volume of trash has gone down —this is to a large degree the result of the expanded recycling efforts. Year Total Pounds Collected Per Week Pounds Per Household Per Week Percent Decrease 2002 1,391,000 53.50 2011 1,333,692 30.68 (42%) r JL 1 The partnership between Waste Management and the city is successful for several reasons, in- 411) cluding service dependability, commitment to customer service and the stewardship of Elgin residents. Dependability Each weekday Waste Management services 6,000 households, city facilities and assists public works. With such an expansive operation, the margin for error is significant. Therefore, Waste Management's quality assurance program is crucial to the success of the solid waste program. Customer Service An example of Waste Management's commitment to customer service is that over 80 percent of cart replacements or repairs are driver initiated. Waste Management verifies each day that routes are completed. Either each stop receives service or the driver calls it in to Waste Man- agement dispatch. Stops called in are included on a master report with an explanation. If a call in is due to improper preparation, the driver is required to a leave note indicating why the col- lection did not occur. If a driver makes a mistake, route managers are available at any time to resolve the issue. Stewardship The ongoing work of a newly formed sustainability commission illustrates two examples that Elgin residents are committed to continue to reduce waste streams and encourage recycling. In addition, Waste Management is a partner on sustainability initiatives. Specifically, from 2008 through 2011, they were part of the sustainable city master planning process by committing '111111) multiple staff liaisons to serve on both the sustainability advisory committee and a working group. Ultimately, the partnership has evolved. Over the last ten years, there has been constant effort to improve. Perhaps the most notable advancement was the construction of the LEED Certified Bluff City Transfer Station. Collaborating on the transfer station gave the city additional flexibil- ity in the agreement and royalties from the station. Presently, the agreement with Waste Man- agement includes the original agreement and four amendments, as described in the table be- low: DATE COUNCIL ACTION RESULT September 12, 2002 Original Agreement The establishment of the "two-cart" program _ March 31,2004 Amendment#1 Provided for free yard waste collection during April July 14,2004 Amendment#2 Entered a host city agreement for the proposed Bluff City Transfer Station,outlining host benefits and provided the city w/the 1St extension option November 3,2004 Amendment#3 Amended host city agreement for the Bluff City Transfer Station outlining host benefits and provid- ing the city with a 2nd extension option. April 28, 2010 Exercised Extension Exercised the first two-year option to extend the Amendment#4 existing agreement. I 11; 2 OPERATIONAL ANALYSIS Waste Management provides solid waste and recycling services to eligible residential proper- ties, which are defined by city ordinance 9.24.010 "Garbage and Refuse Definitions". The ordi- nance includes single-family homes, apartments with five units or less, townhomes and condo- miniums. The base level of service provided to each household includes weekly collection of 64 gallons of refuse, unlimited recycling and seasonal yard waste services. Yard waste collection runs April through November. In April, October and November, bags do not require refuse stickers, while May through September refuse stickers are required for each bag. Refuse, recy- cling and seasonal yard waste service at city facilities is included at no additional cost. Waste Management is responsible for collecting all yard waste bags in leaf bagging areas. Typi- cally, the leaf-bagging program produces over 100,000 bags. This service comes at no additional cost to the city. In leaf rake out areas, Waste Management provides roll off dumpsters and drivers on standby. In 2011, Waste Management hauled approximately 16,000 yards of leaves. In spring, summer and fall, Waste Management provides roll off dumpsters at sites determined by public works. On a daily basis, debris collected by street and sidewalk sweepers is disposed of in these containers. Each year, Waste Management hauls and disposes about 1,200 tons of debris collected by sweepers. Like the sweeping program, Waste Management containers dis- pose of debris removed from catch basins. The cost of this program is $90,000 per annum. 2012 Rate Comparison Listed in the table below are the refuse rates for some comparable communities.The rates for each municipality correspond to each community's base level service for single-family residen- tial homes. Please note that this for illustrative purposes only as each community maintains unique characteristics for their respective programs. Municipality Rate Elgin $13.25 Aurora $15.00 Streamwood $16.89 Hoffman Estates $17.00 Carol Stream $17.80 Hanover Park $19.68 Bartlett $21.30 Carpentersville $22.00 South Elgin $23.00 0 ,r 3 411) One enhancement in 2012 is a transfer station drop off event. This event will give Elginin resi- dents the option to dispose of additional refuse items at the transfer station for a flat fee. Recommendation The current agreement includes the option to extend through 2014 and staff recommends ex- ercising this extension. Now that the city is charging for refuse service, residents, property managers and citizen groups have submitted suggestions on how to alter waste collection. Community suggestions include: • Food scrap collection • Senior refuse options • Condominium service options • Townhome service options • Active Adult Community service options • Vacant property exclusions • Volume based rates • Regular household hazardous waste collection • Yard waste expansion • Cart sizing • Opt-out provisions The action requested is for the city council to authorize staff to issue a letter of intent to extend 411) the contract term for an additional two years. Through amendment number, three of the exist- ing agreement the city has sole discretion to extend the existing agreement through 2014. This two-year extension is the last extension in the agreement. Staff recommends re-bidding the solid waste program in the spring of 2014. However, if the council desires as such a one-year agreement could be sought as alternative. If the city council's desire is to extend the exercise the two-year extension, staff recommends amending the existing agreement. Staff recommends amending the agreement to lock in rates for the next two years and to adjust the rate increase timeline to coincide with the city's budget cycle. Additional details on this proposed amendment are included in the financial analysis sec- tion. INTERESTED PERSONS CONTACTED None. FINANCIAL ANALYSIS There is no direct cost associated with providing the letter of intent to renew. The annual cost of the services provided through the agreement is approximately $4,861,260. The table below details the cost estimates for each service provided. Al)11 h 4 Item Estimated Cost Residential Service $4,621,260 Street Sweeping Roll Offs $90,000 Fall Leaf Roll Offs $85,000 Catch Basin Cleaning Roll Offs $30,000 Cleanups/Extra Collections $20,000 Portable Restrooms $15,000 Total $4,861,260 The proposed 2012 budget and five-year financial plan established a refuse fee to recapture the cost of providing waste collection and recycling services. The fee is based on the contractors cost to provide the service. As such, the 2012 general fund budget and 2013 through 2016 plan years include a revenue line item which offsets the refuse expenditure line item. Proposed Rate Adiustments As part of the 2012 budget and five-year financial plan, three percent rate increases in 2013 and 2014 were budgeted. The proposed extension includes an amendment that locks lb annual price increases. In 2013, the rate increase will be 1.5 percent and in 2014, the increase will be 3 percent. The 2011-2012 consumer price index increase was three percent. Locking in the resi- dential price increases also insures that the rates will be lower than what was budgeted in the five-year financial plan.The table below details the residential rates for the next two years. Year Percent Increase Standard Rate Townhome-Condo Rate 2013 1.5% $13.45 $9.78 2014 3% $13.85 $10.07 Staff also recommends adjusting the rate increase timeline. Currently, rate increases go into effect on November 1. The recommendation is to move the rate increase to January 1. This change insures that rate increases will coincide with the city's budget cycle. BUDGET IMPACT FUND(S) ACCOUNT(S) PROJECT#(S) AMOUNT AMOUNT BUDGETED AVAILABLE N/A N/A N/A N/A N/A r k 5 Al)LEGAL IMPACT None. ALTERNATIVES 1. The city council may choose to seek a one-year extension of the agreement in lieu of a two-year extension NEXT STEPS 1. Send the letter of intent to exercise the option to extend the agreement with Waste Management 2. Present the agreement with Waste Management and fourth amendment for council consideration at a future committee of the whole meeting 3. Execute the extension of the existing agreement Originators: Dan Ault, Management Analyst 411) Final Review: Colleen Lavery, Chief Financial Officer William A. Cogley, Corporation Counsel/Chief Development Officer Richard G. Kozal,Assistant City Manager/Chief Operating Officer Sean R. Stegall, City Manager ATTACHMENTS None. A) 6