HomeMy WebLinkAboutItem 7.1 Const Demolition Debris Collctor
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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
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