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HomeMy WebLinkAbout7.1 Const Demolition Debris Collctor 19 82 /ii � 111 DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL June 5, 2012 Honorable Mayor and City Councilmembers Joni Pattillo City Manager""' Construction and Demolition Debris Collection Options Prepared by Roger Bradley, Assistant to the City Manager EXECUTIVE SUMMARY: CITY CLERK File #600 -30 The City Council will consider whether to go to an exclusive service provider for the collection of Construction and Demolition debris services or whether to continue with a nonexclusive service provider system. FINANCIAL IMPACT: An exclusive system would yield approximately $100,000 in economic benefit to the Dublin business community and $100,000 in reduced garbage service cost to the Dublin Unified School District. RECOMMENDATION: Staff recommends that the City Council direct Staff to amend the agreement with Amador Valley Industries (AVI) to include construction and demolition debris collection services and authorize the City Manager to execute the amendment as long as it is within the substantial form as outlined within this Staff Report. Submitted By Reviewed By Assistant to the City Manager Assistant City Manager DESCRIPTION: Background On July 1, 2005, the City of Dublin began a nonexclusive franchise system for the collection of construction and demolition (C &D) debris, which expires on June 30, 2012. As per the agreement terms and in order to determine whether there are viable alternatives to the current system, Staff has notified all 10 C &D haulers that said agreements are set to expire on June 30, 2012. Had the City not sent the notice of contract expiration, the contract terms would have automatically extended for one additional year, which is considered an optional term. Page 1 of 4 ITEM NO. 7.1 In 1999, the City of Dublin had approached the then Exclusive Hauler, Waste Management, to provide C &D collection services to the community. At the time, Waste Management was unable to provide that service to the community, and, as a result, the City created a system wherein haulers could service the community under a transporter permit. Under the transporter permit system, the City received only $50.00 a year for the right to haul collection materials within the public right of way. In 2005, the City included C &D materials collection within a nonexclusive franchising system, which required a franchise fee be paid by approved haulers in an amount of 15.6% of their gross revenues, which more accurately reflects that cost impact of the heavy collection vehicles utilizing the public right of way, and well as other cost burdens incurred by the City. In addition, the City, as part of the then new nonexclusive franchising system, instituted a requirement that C &D waste generators submit a waste management plan and performance bond to ensure that 100% of concrete and asphalt and at least 50% of all other materials are recycled. The C &D collection program has been a successful waste diversion program (85% recycling of C &D materials) for the City, contributes significantly to the City's recycling goals and allows the City's developers to get the necessary green points under various green building programs. Nonexclusive Franchise Concerns In order to ensure that the City has the best C &D collection system in place, Staff has analyzed the nonexclusive franchise. Over the seven years that the nonexclusive collection franchise has been in place, Staff has noted concerns on various occasions. For example, the number of haulers has grown over the years to include more than the currently 10 approved haulers. Staff has had to cancel some of the agreements, primarily as a result of the failure to submit the required reports. Further, Staff spends a significant amount of time each year in reminding haulers to submit reports and fees. Additionally, the large number of haulers within the community makes it difficult to detect illegal haulers. The only hauler that Staff can recall that has assisted the City in identifying illegal haulers has been AVI, owing largely to its familiarity with the community and continual access to all areas of the community in providing residential and commercial solid waste collection services. The vast majority of the currently approved haulers are based outside of Alameda County and some outside the Bay Area, which creates some concerns for Staff. Primarily, C &D debris taken out of County increases the distance to disposal /recycling, which can have a negative impact on the City's carbon footprint. Additionally, any disposal that occurs out of County results in lost Measure D revenue to the City as the Measure D per ton disposal fee would not be paid and kept within the local economy, which helps the City fund its many recycling programs. Out of County haulers also draws jobs away from the local area. Some final Staff concerns include verifying that the correct amount of fees are being paid and the commingling of C &D waste with waste from other communities. Some C &D haulers also provide other services to construction sites, such as sweeping and clean up services. Anecdotally, it has been reported that some haulers may lower their cost of C &D collection service to escape paying the franchise fee, where they make up for the lost revenue on C &D collection by charging more for cleanup or other services. There is, of course, nothing within our ordinance that would prevent this from happening as C &D haulers are allowed to institute their own rates, and Staff is unaware to what scale this may be occurring. Finally, Staff has found that some haulers have instituted a practice where they will service collection containers with a front - end loader and will go from community to community collecting and commingling the waste with other communities. This creates significant concerns for Staff as it could have a significant impact on the City's diversionary goals. In particular, commingling the waste makes it difficult to Page 2 of 4 determine what waste came from which community, and Staff has found cases where a whole commingled load was credited to just one community. Such practices could significantly skew the City's State reported disposal numbers and impact the diversion rate. C &D Collection Options Staff has looked at two options for continuing the C &D collection program. The City Council could: (1) continue with a nonexclusive system; or (2) elect to include C &D collection within the exclusive solid waste collection agreement with AVI. Staff believes that having one hauler that is locally based and familiar with the community would remedy the concerns expressed above. AVI is a currently approved C &D hauler and is familiar with the program rules. AVI is obligated under the exclusive agreement to keep any waste within the County, with the exclusive rates being regulated according to contract. Concerns Expressed about the Exclusive C &D Collection Franchise Staff has received and heard feedback from various haulers and other interested individuals about changing to an exclusive C &D collection system provided by AVI. The feedback is summarized and addressed below. • An exclusive system results in jobs lost in the local economy. o As mentioned above, many of the nonexclusive haulers are located outside of the County and some as far away as Sonoma and Sacramento counties. AVI is a locally focused Tri- Valley business; therefore, any growth that AVI could provide within the community would help stimulate local growth and jobs. • C &D collection is different than garbage collection; i.e., garbage companies are not appropriate to use as C &D collectors. o C &D collection is different than garbage collection, and AVI has been an approved C &D hauler for the past seven years. Currently, AVI's reports to the City show an 89% recycling rate for C &D materials, one of the best reported among the current haulers. • Monopoly contracts do not benefit communities. o Exclusive contracts are used as best practices by many if not most communities. Within Alameda County, twelve (12) of the 18 jurisdictions have an exclusive hauler for C &D collection (Attachment 1). An exclusive contract affords the hauler with a stable revenue base, removes risk, and provides a municipality with an opportunity to negotiate other benefits. • Exclusive contracts result in a loss of green buildings points. o Going to an exclusive provider does not eliminate the C &D collection program. AVI will still be required to provide service as it previously has done for the past seven years, and there are no changes being proposed to the C &D or green building ordinances. In order for developers to get the highest green building points, they are required to recycle at least 80% of their materials, which AVI is already doing. • Exclusive providers provide poor service. o Under the current open market system, which is argued by nonexclusive proponents as a motivator for driving down prices and an eliminator of poor quality service providers, AVI has a market share of more than 50% by volume collected and revenues reported. The next largest provider has an 11 % share with another eight making up the rest. By this metric, it appears that AVI has been meeting the demands of their customers in providing service within the community. In addition, the City's exclusive contact does allow the City to impose penalties should service quality for some reason falter. Page 3 of 4 Exclusive Agreement Negotiated Benefits As mentioned above, exclusive agreements allow municipalities to negotiate benefits for the community. Staff has had discussion with AVI about the benefits of taking over the C &D collection market within the City, and Staff has negotiated the following benefits for the community for allowing AVI to do so. • AVI will pay the City an economic benefit payment in the amount of $100,000 on an annual basis, which the City would propose to use to establish a small business assistance program. Primarily, this funding would assist businesses within the community to deal with the cost of ADA, Title 24, enclosure upgrades, sewer connections, or other such improvements. The cost of constructing these improvements can be an obstacle /disincentive for businesses, and this benefit payment will provide some financial relief. • For the past several years, the City has been subsidizing the cost of organics collection at 25% of the regular commercial rate. This is in addition to the rate reduction of 25% already given by contract. The City subsidy has been integral to the growth of the commercial organics program by ensuring that there is adequate cost savings to make financial sense in adding the service. AVI has agreed to bundle the City subsidy, as well as the complete cost of organics collection for the school district, with the commercial collection rate. As the City no longer has the funds to continue the subsidy, this will ensure the continued viability of the commercial organics program. • AVI will give a 50% discount to the Dublin Unified School District for garbage collection services. Coupled with the organics bundling, this amounts to a savings of approximately $100,000 a year for the District. Given the negotiated benefits listed, coupled with the concerns alleviated by going to an exclusive agreement with AVI, Staff believes that the prudent course to pursue is to modify the agreement with AVI to bring the C &D collection service under the exclusive agreement. NOTICING REQUIREMENTS /PUBLIC OUTREACH: Staff has notified all nonexclusive franchise haulers of this item's consideration. ATTACHMENTS: 1. Cities and Public Agencies within Alameda County with Construction and Demolition Ordinances Page 4 of 4 I I I 04 m oc ID > Ln tz Ln 0 , v C13 z CC tz 04 0.4 kn 0 U ;71 ILI 0 9P 4z a 74 kr) 771 - rr 5 71 cz ca > CZ cz cu LIZ Q CS x U Z > cn cz� < ca a 155 0 — > cn CC> ton tr, CZ > v 0 ao 711 cz zn Z I—j CA 0 I'LL 75 C� as 2 as CD lE > 0 Gs > cn Ln > a4 ACS A-. P— e0c) � -ell r—, > 0 cn cz cn cz cn En cn cz" 7� cz Lr, jj�— z 0 u LLJ cn LLI u z LLA u ICL 0 z d< C4 LLJ 1— m IIII ICI ct C5 00 zi Q -t- cz kr, az cz :tt L7� CL cn ol CZ cn C/ r Imo. 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