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APPROVE RESOLUTION AMENDING THE BUDGET AND AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES CONTRACT WITH R3 CONSULTING GROUP, INC. FOR THE PERFORMANCE REVIEW AND BILLING AUDIT OF THE FRANCHISED WASTE HAULERS
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution authorizing the City Manager to execute a Professional Services Contract with R3 Consulting Group, Inc. of Roseville, CA, in the amount of $120,000, for the Performance Review and Billing Audit of the Franchised Waste Haulers.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
The City’s current solid waste franchise agreements with Republic Services and Waste Management, Inc. were approved in 2003 and implemented in 2004. These agreements expire in May of 2019, but can be extended for an additional five years if mutually agreeable. The franchise agreements provide for periodic review of franchisee performance, including an audit of franchisee billing and revenue reporting, at franchisee expense. The franchisees are required to reimburse the City up to $60,000 for each individual performance review.
On February 11, 2016, the City advertised a Request for Proposals (RFP) for the Performance Review and Billing Audit of the Franchised Waste Haulers. The City received proposals from five firms. The Selection Committee evaluated the proposals and found R3 Consulting Group, Inc. to be the most qualified and highest ranked firm. It is recommended that Council adopt a resolution authorizing the City Manager to execute a Professional Services Contract, in the amount of $120,000, with R3 Consulting Group, Inc.
The project will commence upon Council’s approval and is scheduled for completion by December 2016. This project is funded by the waste haulers as specified in the Franchise Agreements.
DISCUSSION
Background
The City’s current solid waste franchise agreements with Republic Services and Waste Management, Inc. were approved in 2003 and implemented in 2004. These agreements expire in May of 2019, but can be extended for an additional five years if mutually agreeable. The agreements included numerous improvements to the solid waste collection system such as:
• Three cart system for collecting trash, recycling, and green waste/food waste
• Annual bulky waste pick-up (now known as Clean Sweep)
• Extra service during leaf season
• Extra service stickers for additional set-outs (12 per year)
• Recycling and green waste/food waste service for commercial customers
• Community cleanup event support
The franchise agreements provide for periodic review of franchisee performance, including an audit of franchisee billing and revenue reporting. The reviews are to be done at franchisee expense by qualified consultants retained by the City. The performance reviews evaluate both franchisees in the following categories:
• Compliance with Terms of the Agreement and Applicable Laws
• Management and Administrative
• Collection Operations
• Street Sweeping
• Vehicle and Equipment Maintenance, Repair and Replacement
• Assessment of Performance Monitoring and Benchmarking
• Customer Service and Financial Management Practices
• Customer Information and Public Education
• Billing and Financial Reports
The last franchisee performance review was undertaken in 2009. The City retained HDR, Inc. to conduct the review. The review period was from the startup of the contract to 2009. Generally, the review report was positive and the recommendations that resulted were accepted constructively by the franchisees.
Present Situation
As the franchise agreements expire in 2019, the City has commenced a process to determine the preferred course of action to procure solid waste services for residents and businesses beyond 2019. There are numerous options for consideration, including extension of the existing agreements or negotiation of new agreements with the current franchisees. Evaluating the performance of the franchisees in implementing the current agreements will provide useful information to assist in making such decisions.
Planning for the current proposed performance review began in 2015. On February 11, 2016, the RFP for the Performance Review and Billing Audit of the Franchised Waste Haulers was advertised on the City’s Bid Flash webpage. In addition, a mailer was sent to 27 consultants.
On March 3, 2016, the City received five proposals for the Performance Review and Billing Audit of the Franchised Waste Haulers. The proposals were received from the following five firms:
• H F & H Consultants, LLC (Walnut Creek)
• R3 Consulting Group, Inc. (Roseville)
• MuniServices (Fresno)
• SCS Engineers (Pasadena)
• Sloan Vazquez, LLC (Tustin)
A Selection Committee of four representatives from Public Works Solid Waste and Engineering Divisions evaluated and ranked all proposals based on the following criteria and factors: Relevant Experience, Project Knowledge, Project References, Project Approach, Familiarity with CalRecycle Requirements, and Team Qualifications.
The Selection Committee ranked R3 Consulting Group, Inc. as the most qualified consultant for this project. R3 Consulting Group, Inc.’s proposal demonstrated vast experience in performance reviews in northern California. They have concluded recent reviews of municipal contracts in nearby jurisdictions, and they are currently working on several more in the region. Their project approach is very practical and straight forward and should result in clear reports and recommendations. R3 Consulting Group, Inc. is familiar with both the waste hauling companies that provide service in Stockton and have conducted performance reviews on them in many municipalities. Upon completion of the ranking process, staff reviewed the cost proposal of R3 Consulting Group, Inc. Their proposed not-to-exceed fee of $120,000 is reasonable and within the project budget.
Deliverables for this project include reports for each hauling company that describe their current operations, compliance with the franchise agreement and CalRecycle requirements, and recommendations for any needed activities.
Staff recommends Council adopt a resolution authorizing the City Manager to execute a Professional Services Contract with R3 Consulting Group, Inc., in the amount of $120,000, for the Performance Review and Billing Audit of the Franchised Waste Haulers (Exhibit 1 to the Resolution). The project will commence upon Council’s approval and is scheduled for completion by December 2016. This project is funded by the waste haulers as specified in the Franchise Agreements.
FINANCIAL SUMMARY
The existing Franchise Agreements with Waste Management (Contract 03-187) and Republic Services (Contract 03-188) provides for reimbursements from the hauling companies for the performance review. The franchise agreement specifies up to $60,000 from each hauling company for the performance review. Staff recommends a budget amendment be completed for the reimbursement revenue and the not-to-exceed contract expenditure of $120,000.
|
Non-Departmental Franchise Fees/Audit account |
010-0131-510 |
$120,000 |
|
General Fund Other Reimbursements account |
010-0131-371 |
$120,000 |
There is no additional impact to the City’s General Fund or to any other unrestricted fund as a result of taking the recommended action.