HomeMy WebLinkAbout4.24 CommercialRecylAgmt CTTY CLERK
File #
600-30
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 19, 2001
SUBJECT: Commercial Recycling Program Agreement Extension
Prepared by: Jason Behrmann, Administrative Analyst
EXHIBITS ATTACHED: 1. Letter dated May 16, 2001 Reporting on Commercial Recycling
Program
2. Commercial Recycling Program Costs and Subsidy Request
3. Agreement for Services, outlining scope of work and payment
schedule for 24-month program
RECOMMENDATION: Approve the use of the City's mitigation grant funds to subsidize the
Commercial Recycling Program and authorize the Mayor to execute
the Agreement
FINANCIAL STATEMENT: The program will be partially funded by the City of Dublin, through
mitigation funding received from the Alameda County Waste
Management Authority ($32,619) annually for a two-year period).
The remaining cost of the program will be covered by rates charged
to participants. Sufficient funds are included in the Proposed Fiscal
Year 2001-2002 Budget to fund this program.
DESCRIPTION:
On March 1, 1999, the City entered into an Agreement with Livermore Dublin Disposal (LDD) to develop
and implement an Expanded Commercial Recycling Program. The initial Agreement was for a term of 16
months and was extended last year through June 30, 2001. Staff recommends that the term of the
Agreement be extended for another 24-month period.
BACKGROUND:
Before the Commercial Recycling Program was expanded in March 1999, there were only 60 businesses
participating in the original program, with approximately 17 tons being recycled per month. Currently, the
Commercial Recycling Program averages approximately 80 tons per month, with 144 businesses out of
629 total commercial accounts participating in the program, for a participation rate of 23%.
Most of the success of the expanded recycling program can be attributed to reducing the amount of sorting
required of the businesses. The original system required businesses to separate office paper, corrugated
cardboard and newspaper as well as plastic, glass and metal cans and bottles. The expanded program was
COPIES TO: Annette Borges, Waste Man ,gement
ITEM NO. ~~~i~-4
designed to increase participation by allowing businesses to recycle a wider variety of paper products and
eliminate the need to separate most of the materials. The program currently consists of two components:
1. "Anything That Tears," which includes envelopes, sticky notes, file folders, junk mail, glossy
paper, catalogs, cardboard, newspaper, and paperboard; and
2. "Mixed Container," which includes glass bottles, plastic bottles, and aluminum and tin cans
While the program has improved significantly since the program was expanded, there are still many
opportunities to improve commercial recycling in Dublin.
In a letter dated May 16, 2001, (Attachment 1 ) LDD proposes to extend the Commercial Recycling
Agreement to June 30, 2003 and to enhance the program by modeling it after the City's highly successful
single stream residential curbside recycling program. With the new program, businesses will be able to
combine, into one recycling bin, all of the items in the "Anything that Tears" program and the "Mixed
Container" program. This new program will make it easier for businesses to recycle, and should result in
significant improvements in participation and recycling tonnage.
In order to market the improved Commercial Recycling Program, LDD's inside sales person will send
direct mailings and make follow-up phone calls to all of the City's commercial accounts. As with the
current program, LDD also offers to meet one-on-one with any company in order to assess their waste
stream and demonstrate how they can save money by participating in the Commercial Recycling Program.
In addition, the Company has hired Dr. Eugene Tseng to conduct waste audits at many of the City' s
commercial businesses. The audits are designed to measure both the amount of recycling occurring in the
business as well as help the company either set up a new recycling program or suggest ways to improve
an existing one.
SCHOOL DISTRICT RECYCLING PROGRAM:
As a commercial account, the schools are included in the Commercial Recycling Program. City Staff and
LDD Staff have been working with district representatives to design a program geared more specifically
for the schools within the parameters of the Commercial Recycling Program.
Prior to the start of the 1999-2000 school year, the City received grant money from the Alameda County
Waste Management Authority to purchase recycling containers for the schools. Since this original
purchase that placed recycling containers in the classrooms, LDD Staff has been working to improve and
enhance the school recycling program. While there are still improvements to be made, LDD reports that
all of the schools are participating in the program. Additionally, the 2001-2002 Proposed Budget includes
$15,000 in mitigation grant money to purchase additional classroom and lunchroom recycling containers
for each school. Staff anticipates even greater success with the new containers and single stream
Commercial Recycling Program.
CITY SUBSIDY REQUESTED:
An important part of a successful commercial recycling program is to provide financial incentives for
businesses to recycle. LDD has developed a recycling rate structure that allows businesses to save money
if they recycle enough to reduce their garbage service level. The recently approved commercial garbage
rate increases will make it easier to promote recycling because there will be a greater difference between
the recycling and garbage service rates.
In order to provide an even greater economic incentive for businesses to participate in the program, LDD
has requested a subsidy from the City (Attachment 2) that will keep the commercial recycling rates low.
The Company is estimating that the program will generate $218,880 in revenue in Fiscal Years 2001-
2003. The cost of the program is estimated to be $284,118 over that same period. The subsidy requested is
for the difference between the projected revenue and expenses, or $32,619 annually for a two-year period.
Staff is recommending that the City use mitigation grant funds to provide the subsidy. The City used
mitigation grant funds to provide a similar subsidy ($30,295) to the Company during Fiscal Year 2000-
2001.
In Fiscal Year 1996-1997, the Alameda County Waste Management Authority (ACWMA) began
awarding annual mitigation grants to Alameda County Cities. Mitigation funds are those fees collected on
imported garbage placed in Alameda County landfills from other counties, such as Contra Costa County
and San Francisco County. While there is no guarantee that these grants will be awarded indefinitely, the
Waste Management Authority has committed to awarding the grants annually to all cities in the County
through at least Fiscal Year 2003-2004. The following chart outlines grants that the City of Dublin has
received in past years:
1998-1999 1999-2000 2000-2001
$32,606 $34,784 $35,048
It is anticipated that the 2001-2002 grant will be similar to past figures. The mitigation monies received
from the ACWMA are considered restricted funds, and must be used for non-residential, or new recycling
programs.
Staff is only requesting a program extension and commitment of mitigation funds for Fiscal Years 2001-
2003 because the Franchise Agreement with LDD will expire at that time, unless the City wishes to
exercise the extension options in the Agreement. In any case, Staff recommends re-evaluating the
Commercial Recycling Agreement at the same time as the Franchise Agreement.
In order to extend the term of the Agreement and modify the City' s subsidy, an Agreement amendment is
required (Attachment 3). This Agreement covers the 24-month period from July 1, 2001 to June 30, 2003.
Prior to the end of the Agreement, City Staff will evaluate the effectiveness of the program and make a
recommendation for future participation and funding.
STAFF RECOMMENDATION:
Staff recommends that the Council approve the use of the City' s mitigation grant funds to subsidize the
Commercial Recycling Program and authorize the Mayor to execute the Agreement.
05/16/01 10:11 ~510 371 4045 LIV DUB DISPOSAL ~ 001/004
May 16, 2001
Jason Behrmann
City of Dublin
100 Civic Plaza
. Dublin, CA 94568
Dear Jason:
Thank you for your letter of April 25th, 2001, regarding the current
commercial recycling agreement which expires June 30, 2001.
Livermore Dublin Disposal is very pleased to offer an even easier method of
collecting commercial recycling from the businesses in Dublin. With new
and improved technology, Livermore Dublin Disposal can offer single
stream recycling for the businesses in Dublin. Single Stream Recycling
makes it even easier to recycle. Just throw all your newspapers, which
includes junk mail, phone books, computer paper, paperboard and non
waxed corrugated cardboard, plastic and glass containers, and aluminum
cans into one bin.
Single stream recycling is a very successful program in your residential
community. The City of Dublin has experienced a dramatic increase in
recycling and this is due to the container provided and the ability to
commingle all these materials.
When the program started in 1999, the first 14 months of the program
generated 593 tons of recyclable materials. Over the past six months the
"Anything that Tears" program generated 931' tons of reeyclables. With the
new expanded program "single stream", you will continue to see an increase
in tonnage being diverted from the landfills.
As of March 31, 2001, we have active recycling accounts with 144
businesses, with a steady increase in recycling manage. The customers, who
recycle, continue to recycle and increase their bin size, increasing the
tonnage diverted from the landfills.
With the increase in commercial rates, this will continue to encourage
recycling. For example, a commercial customer who recycles:
¢ ¢ ,/r/is
ATTACHMENT 1
13 yard bin 3x week Garbage $326.80
1 3 yard bin 2x week Cardboard $139.00
2 - 96 gallon Ix week Mixed Containers $ 37.84
Monthly Total $503.64
Service without Reeycl/ng
2 - 3 yard 3x week Garbage $653.60
A SAVINGS OF $149.96 PER MONTH
Another example is a Commercial customer who does' not recycle, but
if they did, they too could save.
2 - 4 yard 2x week Garbage $567.60
If they recycled,
1 4 yard 2x week Garbage $283.80
1 4 yard 2x week Cardboard $183.00
Total Monthly Cost $466.80
A SAVINGS OF $100 .80 PER MONTH
Attached please fred two exhibits reflecting operating cost and recycling
revenue, these exhibits reflect a shortfall of $ 65, i),38 for a twenty-four
month period. With Dr. Tseng's assistance, I feel very confident that
Livennore Dublin Disposal will be able'to meet the City of Dublin's AB939 :
goals.
If I can be of any further assistance, please do not hesitate to telephone me.
Annette Borges
MRY-1G-2001 11:12AM TEL)510 371 4045 ID)DUBLIN CITY MGR OFFC PRGE:B08 R=99~
3UM. 14. 2001 3: 06PM WASTE MAMAGEMEMT MO.
LIVERMORE DUBUN DISPOSAL
COMMERCIAL RECYCLING PROGRAM
CITY OF DUBUN
Estimated Program Cost
O~eration. al C__o~.t
Labor.
1664 Houm x $33.04 + Benefits $ 54,979
Truck Costs:
Includes Oil, Diesel, License, Etc. 23,106
Track Maintenance (labor) 38,574
Truck Parts, Radio, Etc. 10.132
Tires 2,862
Depreciation 4, 136
Total Operating Costs $ 133,789
Recycling Materials:
Processing Cost 1600 x $40ltn $ 64,000
Sales & MarketinQ
inside Sales Person $ 57,000
Direct Mailing/Postage ......... 3~500
Total Sales & Marketing $ 60,500
Estimated Cost $ 258,289
Profit 10% 25,829
TOTAL COST $ 284, 117
Estimated Recycling Rate Revenue: $ 218,880
SUBSIDY REQUESTED _ .$ ........65,23!.
ATTACHMENT 2
ZUM.14.2001 2:58PM WASTE MANAGEMENT N0.303 P.2/2
LIVERMORE DUBLIN DISPOSAL
COMMERCIAL RECYCUNG PROGRAM
CITY OF DUBLIN
Estimated Recycling Rate Revenue
126 Customers average account
$60 per month x 12 $ 90,720
78 Customers average account
$20 per month x 12 18,720
TOTAL $ 109,440
TOTAL FOR 24 MONTHS $ 21 8,880 ..
AMENDMENT TO COMMERCIAL RECYCLING AGREEMENT DATED MARCH 1, 1999
THIS AMENDMENT is made at Dublin, California, for a 24-month period, from July 1, 2001, to June
30, 2003, by and between the CITY OF DUBLIN, a municipal corporation ("CITY"), and Waste Management
of Alameda County, doing business as Livermore Dublin Disposal ("CONTRACTOR"), who agree as follows:
1. SERVICES° Subject to the terms and conditions set forth in this Agreement, CONTRACTOR
shall provide to CITY the services described in Exhibit A. CONTRACTOR shall provide said services at the
time, place and in the manner specified in Exhibit A.
2. PAYMENT. CITY shall pay CONTRACTOR for services rendered pursuant to this Agreement
at the time and in the manner set forth in Exhibit B. The payments specified in Exhibit B shall be the only
payments to be made to CONTRACTOR for services rendered pursuant to this Agreement. CONTRACTOR
shall submit all billings for said services to CITY in the manner specified in Exhibit B.
7. NOTICES. Any written notice to CONTRACTOR shall be sent to:
Annette Borges, District Manager
Livermore Dublin Disposal
6175 South Front Road
, Livermore, CA 94550
Any written notice to CITY shall be sent to:
Jason Behrmann, Administrative Analyst
City of Dublin
P. O. Box 2340
Dublin, CA 94568
Executed as of the day first above stated:
CITY OF DUBLIN
Attest: a municipal corporation
City Clerk
By
"CITY"
Approved as to form:
By
City Attomey "CONTRACTOR"
ATTACHMENT 3
EXHIBIT A
SCOPE OF SERVICES
CONTRACTOR will continue to develop and implement a commercial recycling program, which will be
available to all commercial accounts within the City of Dublin. The program consists of the following:
· "Single Stream", which includes envelopes, sticky notes, file folders, junk mail, glossy paper, catalogs,
cardboard, newspaper, paperboard, glass bottles, plastic bottles, and cans all combined into one bin.
CONTRACTOR may establish collection rates for commercial recycling, with the intent to increase
participation by commercial businesses in the City of Dublin.
CONTRACTOR will aggressively market the new single stream recycling program. CONTRACTOR will
retain an inside sales person to make contacts with all commercial accounts in the City of Dublin. This person
will send direct mailings to all of the commercial accounts, and will follow up with telephone calls announcing
the new program. Businesses can then meet with Waste Management' s Recycling Manager, who will assess
their waste stream and show them how they can save money by participating in the recycling program.
CONTRACTOR will also continue to work with Dublin School District staff regarding the program, and will
work with District liaisons to improve participation in the school program within the parameters of the
commercial recycling program.
CONTRACTOR will provide CITY with monthly Tonnage Reports and two annual Progress Reports on
marketing activity and business participation rates. The Progress Reports will be submitted to the City annually
by the following dates:
1. October 31
2. April 30
EXHIBIT A
EXHIBIT B ~ ~r~ ~
PAYMENT SCHEDULE
CITY shall pay CONTRACTOR an amount not to exceed the total sum of sixty five thousand, four hundred
seventy eight dollars(S65,478) for services to be performed pursuant to this Agreement. CONTRACTOR shall
submit invoices during the term of this Agreement based on the cost for services performed in accordance with
the following schedule:
$16,310 on November 30, 2001, after CITY receives first Progress Report from CONTRACTOR
$16,309 on May 31, 2002, after CITY receives second Progress Report from CONTRACTOR
$16,310 on November 30, 2002, after CITY receives third Progress Report from CONTRACTOR
$16,309 on May 31, 2003, after CITY receives fourth Progress Report from CONTRACTOR
Invoices will be paid by the CITY within 30 days of receipt from the CONTRACTOR.
The total sum stated above shall be the total which CITY shall pay for the services to be rendered by
CONTRACTOR pursuant to this Agreement. CITY shall not pay any additional sum for any expense or cost
whatsoever incurred by CONTRACTOR in rendering services pursuant to this Agreement.
The services to be provided under this Agreement may be terminated without cause at any point in time
in the sole and exclusive discretion of CITY. In this event, CITY shall compensate the CONTRACTOR for all
outstanding costs incurred as of the date of written notice thereof and shall terminate this Agreement.
CONTRACTOR shall maintain adequate logs, records and timesheets in order to verify costs incurred to date.
EXHIBIT B