HomeMy WebLinkAboutRCC AGENDA PK 1993/03/22COUNCIL AGENDA STATEMENT
Item
Meeting Date 93
y~ ~i
ITEM TITLE: Resolution Giving Notice of Intent to
Grant a Franchise to Laidlaw Waste Systems, Inc.
for Multi-family Recycling Collection Services
and Setting a Public Hearing Thereon
SUBMITTED BY: Conservation Coordinator
REVIEWED BY: City Manager (4/5ths Vote: YesNo X )
Referral #2720
At the January 26, 1993 City Council meeting, staff brought forward
recommendations for expansion of City recycling programs to include
residential yardwaste, commercial and multi-family, in accordance
with the City's goals to meet the requirements of the California
Integrated Waste Management Act (AB 939) and the County of San
Diego's Mandatory Recycling Ordinance. At that time, Council
directed staff to negotiate with Laidlaw Waste Systems, Inc. for the
exclusive franchise to collect recyclables from multi-family
residences.
Laidlaw's proposal for multi-family recycling is contained in
Attachment A. The proposal meets satisfactorily with staff's
concerns and staff recommends that Council accept the proposal for
the purposes of negotiating a franchise with Laidlaw for the multi-
family recycling program. The proposal is discussed in this report.
RECOMMENDATION: Adopt the resolution giving notice of intention to
consider granting to Laidlaw Waste Systems, Inc. a franchise for
Citywide residential multi-family recycling collection services and
setting a public hearing within 45 days.
BOARDS/COMMISSIONS RECOMMENDATION: The Resource Conservation
Commission discussed this report at their March 22 meeting and
Minutes of the meeting are attached.
DISCUSSION:
Approximately 30 percent of the housing in Chula Vista is multi-
family dwellings of five units or more. The Citywide multi-family
recycling program would provide collection services to approximately
22,000 residences.
Negotiation process
Staff was directed by Council to negotiate a resolution to concerns
with Laidlaw's ability to adequately perform the needed services in
terms of program design expertise, appropriate and adequate staffing,
program promotion to residents, customer service and satisfactory
program implementation.
To begin these negotiations, staff developed a detailed list of
design and implementation specifications for the multi-family
recycling program. This information was presented to Laidlaw and
later discussed in a series of meetings. Staff is now comfortable
that the proposal has been developed into a comprehensive plan that
will meet the City's needs well; all concerns have been addressed and
the proposed cost is reasonable.
Summary of Laidlaw's proposal
• A Laidlaw staff member will be assigned to the multi-family
recycling program, not less than half-time.
• A11 materials designated under the mandatory recycling
ordinance will be collected on a weekly basis.
• A pilot program will commence prior to July with phased
Citywide implementation by October 1, 1993 (to meet the
requirements of the mandatory recycling ordinance).
• Each multi-family unit will receive a 6-gallon "apartment
recycler" bin; complexes will be provided with an appropriate
number of three-yard bins and/or 90 gallon carts, depending on
space constraints. It should be noted that the exact exterior
container configuration has not yet been determined and Laidlaw
and City staff) may decide to exclusively use 90 gallon carts.
• $.10 per unit per month has been allocated for ongoing
promotional activities. Replacement of bins for new tenants
(estimated at 20 percent per year) has been built into the
estimated program costs.
Term of Franchise
The proposed length of franchise will be until the year 2002.
However, similar to the franchise agreement for the curbside
recycling program, staff recommends that the multi-family recycling
program franchise include a two year notice of intent to cancel the
franchise that may be given at any time by the City without cause,
following the initial three year term of the program.
Laidlaw has asked, however, that if the City decides for some reason
to abandon completely its source-separated recycling program (e.g.,
to go to a mixed-waste system) prior to the tenth year of program
operation, that an appropriate rate adjustment provision be included
in the franchise to provide for any unamortized vehicle costs.
Because the vehicles to be used for the multi-family program cost
considerably more that those used for the curbside program
(approximately $100,000 per vehicle), Laidlaw is proposing to
amortize the vehicles for a period of 10 years, even though they
understand that staff is recommending that a five year notice could
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be given. Staff agrees that
recommends that a rate adjustment
which would be activated if the
program in less than 10 years.
Estimated charge per unit
the request is reasonable and
clause be included the franchise
City abandons a source-separated
The estimated net charge per unit for the proposed multi-family
recycling program is $1.50. Currently, the single-family residential
recycling fee is $1.10. The difference in costs are reasonable and
justified because of the higher costs associated with multi-family
recycling, including the need for both exterior and interior bins and
lower volume and value of the recyclables generated from multi-family
residences. Principally, this is due to the fact that more multi-
family residents tend to recycle the higher valued commodities
("California Redeemables") on their own.
Additionally, because of the high turnover in multi-family residences
and the diverse population, participation tends to be lower.
Moreover, although both Laidlaw and City staff will work closely with
property manager's and tenant organizations to encourage
participation, enforcement of participation will be difficult. The
proposed fee also includes an 8 percent franchise fee, amounting to
approximately $0.12 per unit per month.
The cost of the multi-family program has been derived using the same
formula used for the single-family program, where program
participants get the benefit of revenues from the sale of materials
and credit for the amount of recyclables not going to the landfill.
The estimated cost breakdown is contained in the chart below, with a
comparison to the single-family recycling program. (NOTE: Estimated
single-family material sales and landfill diversion credits were
established during the rate review last conducted in August 1992.
These components should not be compared directly to the multifamily
rate components, which have been estimated based upon expected
participation. These estimates would be reviewed yearly based upon
actual program data.)
Single Family Multi-family
Total Service Cost $1.88 $2.00
Est. Materials Sales (0.31) (0.20)
Est. Landfill Diversion (0.45) (0.30)
County Grants (0.02) (0)
Net Resident Cost $1.10 $1.50
Attachment B contains an updated rate survey for multi-family
recycling in the San Diego County region.
3
Alternative charge per unit option
Staff has recently received Laidlaw's rate adjustment proposal for
single-family curbside recycling which reflects a significant
reduction in the program rate per household, primarily due to the
high volume of tonnage now generated from program participants.
Staff will explore an alternative cost per unit which would represent
a "blended rate" created by the merging of the proposed new single-
family recycling rate with the proposed multi-family recycling rate.
This alternative would be a single, "universal" rate that may be
approximately the same as now charged to single-family residents, and
would lower the per unit charge proposed for multi-family residents.
Senior and Low-income discount
The discount given to seniors and low income individuals receiving
single family curbside recycling is conceptually different from the
services necessary for multi-family recycling, as multi-family
residents do not pay for refuse disposal directly. In the single
family curbside program, seniors are either billed directly at the
reduced rate or pay the reduced rate when purchasing trash bags
through the "yellow bag" program.
All billing for the multi-family recycling program will be done
through property managers or building owners. If a discount for
seniors and low income families is desired by Council, a plan would
need to be devised that would ensure that the property owner actually
only charges the discounted fee to the resident or establishes a
system to reimburse applicants directly. Staff recommends against
considering a senior/low income discount due to the complexities
involved and the concern about the City's inability to ensure a fair
process in a cost-effective manner.
Mobile Home Parks
To conform with the mandatory recycling ordinance, it is necessary to
begin offering services to residents at mobile home parks, to be
phased in with the multi-family recycling program. Because of the
nature of mobil home parks, collection would be either similar to
single family curbside collection or multi-family, bulk-bin
collection, depending on the type of refuse collection services
received at the respective mobile home park and space limitations.
The cost per unit would be $1.10 for those mobile home parks that
receive curbside collection and $1.50 per unit for those that receive
bulk bin pick-up. Staff will work with Laidlaw to determine on a
case-by-case basis the particular services necessary.
Conclusion
This report begins the Charter approved process of the giving of
intention to grant the franchise for multi-family recycling
collection services. Staff will return within 45 days for the
required public hearing with the implementing ordinance.
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FISCAL IMPACT: The proposed service charges will be paid by the rate
payers and there will be no City cost. The rate includes a proposed
8 percent franchise to be paid to the City, and additional franchise
fees to the City can be anticipated at approximately $31,600 per
year.
5
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A PROGRAM FOR
MULTI-FAMILY RECYCLING
PRESENTED TO
THE CITY OF CHULA VISTA
BY
LAIDLAW WASTE SYSTEMS
I. GENERAL CRITERIA
1. Laidlaw's Recycling Coordinator will be assigned to the Multi-Family
Recycling program, as required, but not less than half-time. Mary Hammond has
already begun to work with you on the development of program material.
II. PROGRAM DESIGN
1. Our program is designed to collect from the approximately 22,000 multi-
family residences in the City, all materials designated as recyclable under the
County Mandatory Recycling Ordinance and appropriate City Ordinances.
2. A pilot program to include two large and two smaller complexes will be
implemented by July 1, 1993. The pilot program may include complexes already
receiving recycling service from Laidlaw.
The City-wide program will be planned for implementation by October 1, 1993. As
discussed with you, there may be some advantages to phasing in the program
over several weeks.
3. Recyclables will be collected by a divided truck to separate newspapers
from commingled containers. Each apartment complex will be provided with an
appropriate number of front-load and/or 90-gallon containers. If supplied, all front-
load containers will be divided and marked with decals to signify where to place
newspapers and which side for hard recyclables. 90-gallon containers will be of
two distinct colors and clearly marked with decals signifying which materials
should be placed in them. We are planning to provide storage capacity equivalent
to 10-gallons per apartment unit (ie. one 90-gallon container for each nine units).
4. Each dwelling unit will be provided with a 6-gallon Rehrig Pacific
"Apartment Recycler". The Apartment Recyclers will be delivered prior to the
commencement of the program along with relevant instructions and educational
material. Delivery will be coordinated by Laidlaw, using community organizations
such as the Conservation Corps or Urban Corps. As part of our cost proposal, we
have included an annual 20% replacement factor, ie, 4,400 replacement
containers each year.
Exterior bins will be either exclusively 90-gallon containers or a combination of 90-
1
gallon containers and divided front-load containers. Front-load container will be
equipped with i .vity locks and contain slots for ne _paper and holes for hard
recyclables. 90-gallon containers can not be effectively locked but will have a slot
for newspapers and a hole for commingled containers. All 90-gallon containers
will have recycled plastic content. The quantity and distribution of exterior
containers will be agreed individually with each building manager.
III. PROMOTION, EDUCATION AND OUTREACH
We will comply with items 1. to 5. in your specification document. Where feasible,
we would prefer to use graphics in place of language labels.
For program implementation and start-up, we have budgeted $3.00 per dwelling
unit or $66,000 for the following:
Interior bin delivery.
Instructional material for individual units.
Exterior bin delivery and placement.
Signage for exterior bins.
5,000 flyers for building managers.
5,000 posters for communal areas.
For ongoing activities, we have budgeted $0.10 per unit per month or $2,200 per
month for the following:
Quarterly newsletter to all units.
Interior bin delivery and instructional material to new tenants, estimated at 20%
or 4,400 per year.
Ongoing promotion, as necessary.
IV. TECHNICAL ASSISTANCE
Laidlaw's Recycling Coordinator, Market Development Manager and other staff,
as appropriate, are available to work with City staff in providing assistance to
property managers and owners. Such assistance will include start-up and
implementation training for the managers of large multi-family complexes,
workshops for groups of smaller complex managers, promotional and
educational material as mentioned above, and follow up in specific problem
areas such as excess contamination, below average participation etc.
V. SERVICE
Separate recyclables collection service will be provided weekly to all multi-family
residential complexes in the City. As specified above, separate containers will be
provided for newspapers and commingled hard recyclables. To provide this
service, we estimate that two full-time routes will be required flue days per week.
2
VI. COLLECTION VEHICLES
To service the multi-family complexes, we intend to provide two-compartment
side-load or front-load vehicles to separate newspaper from the hard recyclables.
Based on our experience in the single-family program and pilot programs
conducted in apartment complexes in the city, we plan to divide the vehicle 60/40
to provide maximum flexibility and collection efficiency.
VII. IMPLEMENTATION
A pilot program will be implemented by July 1, 1993.
2. Implementation of the City-wide program will be phased in by geographical
sector of the city. This will allow education and promotion efforts to be focused
on each area as the program is implemented. Based on the information that you
provided, we estimate that there are 22,000 residential units in 900 complexes in
the city. Assuming that we receive City approval in time to order the required
equipment, we would plan to begin city-wide implementation bymid-August. This
would allow six weeks prior to the October 1 deadline and would involve adding
approximately 150 addresses and 3,700 units each week. This is the equivalent
to adding one route each day for each of our collection vehicles.
VIII. SALE OF RECYCLABLE MATERIALS
Afl materials collected in the multi-family recycling program will be sold at market
value, including California Redemption Value, when appropriate. Initially, we plan
to deliver materials to San Diego Recycling under the same conditions as the
single-family program.
We estimate that we will collect 3 Ibs of recyclables per unit per week or 143 tons
per month. Of this amount we anticipate 2 Ibs to be newspaper and 1 Ib hard
recyclables. This compares to about 7 Ibs per home per week from the single
family program totalling 400 tons per month.
Laidlaw is also considering developing processing capabilities in the San Diego
area and then utilizing the national marketing capabilities of our sister company,
Laidlaw Resources. If and when this service is available, we will provide
processing and marketing services to the City at equivalent terms to our San
Diego Recycling contract.
IX. REPORTING
We will provide monthly, quarterly and annual recycling reports to the city, similar
to those currently provided for the single-family program. As all hard recyclables
will be commingled, we will work with San Diego Recycling to allocate these
materials to individual components based on sample data.
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X.
XI
LENGTH OF FRANCHISE
In calculating the monthly costs, we have assumed that the muki-family recycling
program would be treated as an amendment to our waste collection franchise and
therefore the term would be until the year 2002. Based on this assumption, we
have depreciated the vehices over 10-years in accordance wtth our Corporate
policies. Front-load and 90-gallon containers will be deprecated over 15 and 5
years, respectively.
The vehicles to be purchased for this program will be specfically designed
recycling vehicles, and are not designed to efficently transport garbage. If the
City, in accordance with any change in County polices, reverts to commingled
waste and recycling collection programs, an appropriate rate adjustment provision
needs to be included to provide for any unamortized vehicle cost.
ADDITIONAL SERVICES
We believe that this proposal, in conjunction with our earlier submittal provides
a comprehensive description of the mufti-family retyding program design,
implementation, operation, promotion and education. We will be pleased to
provide any additional information or answer any questions that the City may
have. Included in our cost proposal, is an 8% franchise fee to the city of Chula
Vista based on the monthly revenue from charges to homeowners or property
managers. Without this franchise fee, the monthly charge per unit would be $0.12
lower.
XII. PROGRAM COSTS
Our original intent was to attempt to provide multi-family recycling service at the
same net cost as single family service, currently $1.10 per month. Unfortunately,
as a result of higher program costs resulting from items such as the requirement
for internal and external containers, and lower program revenues resulting from
estimated lower volumes per unit causing lower landfill diversion and material
sales revenues, this has not proved possible. Our estimated net charge per unit
is $1.50 per month, calculated as follows, with the equivalent single-family
numbers shown for comparison.
Single-tamlly
Total Service Cost
Estimated Material Sales
Estimated L/F Diversion
County Grants
Net Resident Cost
$1.88
(0.31)
(0.45)
(0.02)
$1.10
4
MuItI-tamlly
$2.00
(0.20)
(0.30)
$1.50