12-85 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
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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%)
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The partnership between Waste Management and the city is successful for several reasons, in-
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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.
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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
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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.
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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
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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.
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