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CITY COUNCIL AGENDA ITEM NO. 12

Meeting Date: November 13, 2007

Subject/Title: Adopt a Resolution accepting the Solid Waste Enterprise Management & Operations Review prepared by Hilton, Farnkopf & Hilton, LLC for the Solid Waste Transfer Station Improvements - Phase III, CIP Project No. 542-54020.

Prepared by: Paul Eldredge, Assistant Director of Public Works/Assistant City Engineer

Submitted by: Bailey Grewal, Director of Public Works/City Engineer

RECOMMENDATION
Adopt a Resolution accepting the Solid Waste Enterprise Management & Operations Review prepared by Hilton, Farnkopf & Hilton Consultants, LLC (“HF&H”) for the Solid Waste Transfer Station Improvements - Phase III, CIP Project No. 542-54020, and directing staff to evaluate and modify the current rate structure to promote recycling and return to City Council with revised rates and recommendations.

PREVIOUS ACTION
On June 12, 2007, by Resolution No. 2007-126, City Council adopted the City’s 2007/08 – 2011/12 Capital Improvement Program (“CIP”), which included the Solid Waste Transfer Station Improvements – Phase III, CIP Project No. 542-54020.

On July 24, 2007, by Resolution No. 2007-155, City Council authorized the City Manager to execute Public Works purchase orders and/or agreements, after approval as to form by the City Attorney with the vendors and for the not-to-exceed dollar amounts detailed.

BACKGROUND
In September of 2006, the City contracted with HF&H for a review of current operations relating to the Solid Waste Transfer Station. HF&H evaluated the current operations of the Solid Waste Enterprise, as well as the programs and services offered by this division. The productivity of this division was reviewed and compared with industry standards and broken down by residential and commercial routes and by type of commodity (i.e., refuse, mixed recyclables, cardboard, green waste). This evaluation included the financial results of operations and compared rates to surrounding jurisdictions.

The most notable findings in this report have been summarized below:

1. The Solid Waste Enterprise is operationally efficient, well-managed and is projected to generate sufficient revenue to construct and operate a new transfer station.
2. Productivity for the City’s collection operations is above the industry average for similar equipment types and is typically at the high end of the range of productivity seen elsewhere. (For example, 156 vs. 138 – residential containers serviced per hour and 16 vs. 14 - commercial containers serviced per hour).
3. Promote and encourage increased recycling participation from commercial customers by providing incentives. This will require revisions to the current rate structure.
4. Reduce the contamination rates on recycled materials processing to reduce processing costs and work towards the goal of generating revenue for the City.
5. In anticipation of future regulations, establish a long-range plan for diversion programs; i.e., food waste collection, improved construction and demolition program, materials management and commercial recycling.

This study has confirmed that operations of the transfer facility is efficient and continues to maintain levels of service even with significant annual increases in total tons processed (35,853 average tons between 2004-2005 compared to 40,648 tons in 2006). However, there are some deficiencies with the transfer station that are anticipated in the near future as noted below:
a. The physical size of the transfer station is small compared to similar transfer station operations.
b. The demand on the transfer station is growing quickly and will soon exceed the capacity of the current physical space.
c. Since the transfer floor is currently uncovered, its productivity can be greatly affected by weather.
Although these potential deficiencies have been identified, they have been determined to be less than significant as the proposed transfer facility expansion project will mitigate all of these concerns by increasing the physical size of the transfer facility and locating the transfer floor within a building.

The current transfer facility layout does not support being open to the public. The proposed transfer facility could accommodate this service; however, it is recommended that if open to the public, the hours do not coincide with normal operating hours. This would help to minimize some of the safety concerns, such as the public interacting with collection and transfer trucks. Thus, additional staffing may be required to be open in the evening and/or on weekends, as well as additional construction costs related to a scale and scale house if residential customers were to be charged based upon weight. The proposed transfer station expansion plan anticipates a scale and scale house as a second phase installation as it is not a necessity based upon current operations. Any net revenues received for providing this service would be minimal, at best.

The expansion of the existing transfer facility at the current location may provide some logistical and staging challenges for the current operations, as well as construction of the new facility. It is anticipated that these challenges will increase the cost of the project; therefore, it is recommended that alternate sites in the vicinity of the current facility be explored.

One area that should require our immediate attention is to reduce the contamination rates on recycled materials. Although the total disposal cost for all materials is within the industry standards, the City is above the industry average for mixed recyclables processing costs. The most significant factor is that the City is currently paying approximately $25 per ton to process the material. In comparison, most jurisdictions are receiving average revenues of $10 to $20 per ton. In order to change from paying to process the mixed recyclables to being paid, it is recommended that the City continue and expand its customer education and public outreach programs and provide incentives to reduce contamination levels in mixed recyclables. Should City Council accept this study staff will bring back the rate restructuring for City Council consideration.

While the main purpose of this report was not to analyze the sufficiency of our current rate structure, it is important to note that our rates are competitive with the other service providers in the area as shown below:

30-35 Gallon Refuse Residential Rates

3-Cubic Yard Commercial Rates

FISCAL IMPACT
There are no direct fiscal impacts associated with the acceptance of this report as the expenses and reserves identified in this report have already been accounted for in the adopted Solid Waste Enterprise Operating Budget and the adopted 2007/08 – 2011/12 CIP Budget.

Future expenditures related to the Solid Waste Transfer Facility are anticipated and will be brought back before City Council for consideration at a later date as required and appropriate for the project schedule.

Attachments:
Resolution
Solid Waste Enterprise Management & Operations Review

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD ACCEPTING THE SOLID WASTE ENTERPRISE MANAGEMENT & OPERATIONS REVIEW PREPARED BY HILTON, FARNKOPF & HILTON CONSULTANTS, LLC (“HF&H”) FOR THE SOLID WASTE TRANSFER STATION IMPROVEMENTS – PHASE III, CIP PROJECT NO. 542-54020.

WHEREAS, on June 12, 2007, by Resolution No. 2007-126, City Council adopted the City’s 2007/08 – 2011/12 Capital Improvement Program (“CIP”), which included the Solid Waste Transfer Station Improvements – Phase III, CIP Project No. 542-54020; and

WHEREAS, on July 24, 2007, by Resolution No. 2007-155, City Council authorized the City Manager to execute Public Works purchase orders and/or agreements, after approval as to form by the City Attorney with the vendors and for the not-to-exceed dollar amounts detailed; and

WHEREAS, on September 6, 2006, the City executed a Professional Services Agreement with HF&H for a review of current operations relating to the Solid Waste Transfer Station; and

WHEREAS, HF&H evaluated the current operations of the Solid Waste Enterprise, as well as the programs and services offered by this division; and

WHEREAS, the productivity of this division was reviewed and compared with industry standards and broken down by residential and commercial routes and by type of commodity; and
WHEREAS, this evaluation included the financial results of operations and compared rates to surrounding jurisdictions; and

WHEREAS, the review has been prepared and finalized.

NOW, THEREFORE BE IT RESOLVED that by the City Council of the City of Brentwood does hereby accept the Solid Waste Enterprise Management & Operations Review prepared by prepared by Hilton, Farnkopf & Hilton Consultants, LLC for the Solid Waste Transfer Station Improvements - Phase III, CIP Project No. 542-54020.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 13th day of November 2007 by the following vote:










 
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