Title
Recommendation to Receive an Update on Procurement Process for Alameda’s Integrated Waste Franchise. (Public Works 274)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda’s (City) existing Integrated Waste Franchise Agreement (Agreement) terminates in October 2022. On February 18, 2020, the City Council approved a procurement process in which sole source negotiations are initiated with the current franchisee, Alameda County Industries (ACI). If negotiations are not successful, staff’s next step would be initiation of a competitive procurement. Staff provided an update on the procurement process to City Council on July 7, 2020, and sought City Council’s approval to allow the City Manager to execute a short term (18-month) extension of the term of the Agreement, if necessary, to allow for additional time to thoroughly complete the sole source negotiation. At that time, staff reported that the new draft agreement had been shared with ACI and that the negotiation process was underway. At this time, staff is again updating City Council on the sole source negotiations, as well as the results of the third-party customer survey conducted by Fairbank, Maslin, Maullin, Metz & Associates (FM3) in July.
BACKGROUND
The City’s existing Agreement with ACI began in 2002 and expires in October 2022. The Agreement provides for the collection, transportation and processing of the City’s municipal solid waste, recycling, and organics. ACI is responsible for managing and paying all costs and fees associated with the collection, processing, and disposal of integrated waste, and directly billing all residential and commercial customers for these services. Through a separate agreement, the City contracts with Waste Management for the transferring and landfilling of the solid waste portion of the integrated waste stream.
On February 18, 2020, City Council approved a two-step procurement process in which sole source negotiations are initiated with the current franchisee, ACI. If negotiations were not successful, staff would have initiated a competitive procurement in September 2020. That competitive procurement process would conclude by October 2021, offering sufficient time to transition to a new provider by October 2022, if necessary. The Agreement expiration and this procurement process provide an opportunity to address significant industry changes, including the disruptions in the recycling market, labor changes such as the unionization of recycling sorters, and state and local policies requiring much more recycling and composting.
On July 7, 2020, staff provided City Council with an update on the sole source negotiations, noting that the new draft agreement had been shared with ACI and that, over the course of the coming months, staff would continue meeting with ACI with the focus on negotiating the new agreement. At the time of the July update, staff also sought (and received) City Council’s approval for delegation of authority to the City Manager to execute an amendment to the existing Agreement with ACI, if necessary, providing the City with a short-term (18-month) extension of the term. Staff also reported on the progress of stakeholder outreach, including the completion of a third-party customer satisfaction survey.
Staff selected FM3 to conduct a survey to assess customer satisfaction levels with ACI with the primary goals of 1) assessing opinions of both residential and commercial customers, 2) determining how satisfied customers are with their waste hauling service including the actual service provisions including communications, responsiveness, customer service, and rates, and 3) exploring issues related to Zero Waste Alameda including reducing food waste upstream and reducing volume of organics sent to landfills. FM3 and the City started data collection in early June with the goal of having results and analysis ready for presentation before the end of July.
At this time, staff is updating City Council on the sole source negotiations and presenting the results of the customer satisfaction survey.
DISCUSSION
At the time of this reporting, staff is continuing to conduct regular formal negotiation meetings with ACI, with the focus on agreement cost and terms. Following the detailed discussions to determine the design of the agreement and programs, an updated draft agreement was provided to ACI and over the course of July and August, staff met with ACI to review, clarify and modify the draft. Staff then requested ACI provide the initial cost forms in accordance with the draft agreement. At this time, staff is in receipt of the initial cost submittal from ACI and has begun reviewing and negotiating the costs. It is expected that over the next several months these negotiation meetings will continue and staff will report back to City Council on the viability of a new agreement within the next six months.
Staff is also presenting to City Council the results of the customer satisfaction survey. Staff selected FM3 to survey both residential and commercial customers to determine customer satisfaction levels with ACI.
FM3 recommended conducting a dual-mode survey using the same methodology employed for Alameda’s recent voter surveys. After discussion with FM3, staff elected to survey 400 of ACI’s over 19,000 residential customers and 50 of the approximately 850 commercial customers. ACI was able to provide phone numbers for 85% of these customers and emails for 60% of customers for use in the dual-mode survey. The 15-20 minute surveys were conducted July 7-14, 2020, both online and via telephone (landlines and cell phones in English, Spanish, and Chinese). FM3 was able to conduct 505 interviews with residential customers and 53 interviews with commercial customers, with a margin of sampling error of +/-4.6% at the 95% confidence level for the residential sample.
The survey revealed that residential and commercial customers alike have broadly favorable views of ACI, with very high residential garbage service satisfaction levels. Customers were largely satisfied with material removal services and customer service, and felt rates were reasonable. There was broad support for a number of waste/diversion policies, although with a wide range of intensity around the support levels. There is support for adding bulky pickup for multi-family properties as well as requiring compost and recycling for multi-family properties and public areas and for charging fees to those who do not properly sort or compost. There is also broad support for keeping an ACI office in Alameda and for hiring someone to help educate customers, even at an additional cost of a few dollars to the customer. Few residential and commercial customers realize that ACI plays a role in addressing illegal dumping, and, it is clear that the percentage of waste diverted from landfills is more meaningful and supported than discussing the same goal in terms of pounds generated per person per day. The details of the survey responses follow below.
The results of the residential surveys revealed:
• 83% of customers had broadly favorable views of ACI.
• 89% of customer were satisfied with their garbage, recycling and organics removal. Those satisfied with service cited reliability and good customer service; those dissatisfied reported issues with bins or with cost.
• 74% believe their garbage, recycling and organics removal services are reasonably priced.
• Residential customers are broadly satisfied with instructions, customer service and pickup but do not know enough about ACI’s role in abating illegal dumping.
• Customers supported a variety of programs that may cost a few additional dollars each including: supporting recycling and organics containers in public area (91%), allowing renters in multi-family buildings one annual free bulk pickup (90%), requiring commercial and multi-family buildings to recycle and compost (88%) and the ban on single-use plastic straws (76%). They also support hiring an employee to conduct recycling and composting outreach and education (73%), retaining an ACI office in Alameda (70%) and charging fees to those who do not sort compostables and recyclables (69%).
• Support for diverting 89% of waste from landfills was stronger (88%) than the 1.2 per-pound goal figure (55%).
The results of the commercial surveys revealed:
• 72% of customers had broadly favorable views of ACI.
• 72% of customers were satisfied with their garbage, recycling and organics removal services.
• 72% believe their garbage, recycling and organics removal services are reasonably priced.
• Commercial customers similarly are broadly satisfied with instructions, customer service and pickup but do not know enough about ACI’s role in abating illegal dumping.
• Commercial customers supported a variety of programs that may cost a few additional dollars each including: supporting recycling and organics containers in public area (92%), allowing renters in multi-family buildings one annual free bulk pickup (79%), requiring commercial and multi-family buildings to recycle and compost (72%), and the ban on single-use plastic straws (62%). They also support hiring an employee to conduct recycling and composting outreach and education (68%) and retaining an ACI office in Alameda (58%).
• Commercial customers were split on charging fees to those who do not sort compostables and recyclables (49%).
• Support for diverting 89% of waste from landfills was stronger (85%) than the 1.2 per-pound goal (35%).
At this time, based on the overall results of the survey, staff does not recommend any changes to the procurement process for the City’s new Agreement. Staff will continue the sole-source negotiations with ACI and report back to City Council on the viability of a new agreement within the next six months.
ALTERNATIVES
• Receive an update on the procurement process for Alameda’s Integrated Waste Franchise.
• Request additional information/further reporting from staff.
FINANCIAL IMPACT
There is no direct financial impact from City Council providing direction in response to the update to the integrated waste procurement process and the delegation of authority to enter into an amendment providing for a short-term extension of the term of the Agreement; however, the procurement itself and any extension may result in financial impact to the city’s ratepayers, the General Fund and to the Integrated Waste Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Alameda Municipal Code Section 21, Solid Waste and Recycling.
ENVIRONMENTAL REVIEW
This project is statutorily exempt pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15273 (a)(1) Rates, Tolls, Fares and Charges - meeting of operating expenses.
CLIMATE IMPACTS
The integrated waste franchise is an important tool in meeting the goals of the Climate Action and Resiliency Plan (2019) and Zero Waste Implementation Plan Update (2018). The increased recycling and composting of materials in lieu of landfilling helps reduce harmful greenhouse gas and methane emissions. The franchise is also a very important tool for compliance with state law and regulation.
RECOMMENDATION
Accept update on procurement process for Alameda’s Integrated Waste Franchise.
CITY MANAGER RECOMMENDATION
The City Manager recommends acceptance of the update of procurement process of a sole source negotiation process with ACI.
Respectfully submitted,
Erin Smith, Interim Public Works Director
Gerry Beaudin, Assistant City Manager
By,
Liz Acord, Public Works Coordinator
Financial Impact section reviewed,
Annie To, Finance Director
cc: Eric Levitt, City Manager