Item 4IM E M O R A N D U M
(August 15, 2018)
To: Shana K. Yelverton, City Manager
From: Lauren LaNeave, Assistant to the City Manager
Subject: Item 4I: Approve contract renewal with Republic Waste
Services of Texas, Ltd. for the provision of commercial and
residential solid waste and recycling services.
Action
Requested: City Council approval of Item 4I: Approve contract renewal for a
term of five-years for the provision of commercial and residential
solid waste and recycling services.
Background
Information: On May 7, 2013, the City approved a non-exclusive contract and
franchise agreement with Republic Waste Services of Texas, Ltd.,
to engage in the business of collecting and disposing of
acceptable waste, recyclables, and construction debris within the
corporate limits of the City; which includes solid waste that is
generated from commercial properties. The term of the agreement
between the City and contractor is for a period of five-years
beginning October 1, 2013 and terminating September 30, 2018,
with an option to renew, based on contractor performance. The
purpose of this item is to seek City Council approval of a contract
renewal for a term of five-years for the provision of commercial and
residential solid waste and recycling services.
The contract states that "near the end of the five year period, the
City Council will undertake a review of the performance of the
contractor based on the performance and quality measures
outlined in Section Eleven of the contract." Recall that staff
presented such performance data , as well as several renewal
service level options to the City Council during Work Session at
the March 20, 2018 City Council meeting. To follow is a summary
of that information.
Contractor Performance: The performance data is summarized
in the table on the following page. Measures include
responsiveness to customer complaints, collection of waste
following a missed pickup, spillage, and timeliness of collection.
The table shows that Republic has not only met, but well exceeded
these performance expectations.
Performance
Category
Contract
Provision Measure Performance
(October 2013 –
February 2018)
Customer
Complaints
Failure to contact
customers by end
of next business
day
No more than six
times per year No instances
Customer
Complaints
Resolution of
complaint within
36 hours
90% 100%
Waste Collection
Failure to collect
within 12
business hours
after receiving
notification
No more than 10
times in a twelve
month period
Residential – 10
total in 5 years
Commercial – 6
total in 5 years
Spillage
Failure to pick up
scattered refuse
or spillage
No more than
three times in a
twelve month
period
Zero
Timeliness of
Collection
Collection within
1000 ft. of
residences before
7AM or after 7PM
No more than two
occasions
annually
Two total
The service contract with Republic also includes a performance
measure related to resident service satisfaction, stating that an
85% satisfaction level must be reached on the citizen survey.
This chart provides a view of Republic's service performance since
2013 and shows ratings of Republic's performance during that time
are comparable and exceed the 85% contract requirement.
The proposed contract includes these performance measures, as
well as additional reporting requirements.
Renewal Considerations - Residential: The contract renewal
maintains current service levels, as shown in the chart below.
Republic has added the addition of bulk cardboard recycling as a
service enhancement. This is a frequent request from residents,
especially new move-ins or near the holiday season.
Current
Provisions
Renewal
Provisions
2x per week garbage hand collection
1x per week automated recycling
Bagged grass collection
Curbside Leaf Recycling
Household Hazardous Waste
Collection Event
Scheduled bulk loose brush collection
(3 per year, up to 12 cubic yards)
Bundled/bulk brush
(2 cubic yards/home/collection)
Bulk cardboard recycling
Monthly rate (prior to tax): $13.72 $14.75
Increase to current: $1.03
Residential collections will increase by $1.03 (7.5%) on October 1,
2018. The trash rate will increase annually by 3% and the
recycling rate increase will be based on the Annual Adjustment
Calculation.
Current Renewal Increase
Amt.
Annual Increase
Residential
Trash
Rate:
$9.80 $10.05 $0.25 3%
Residential
Recycle
Rate:
$3.92 $4.70 $0.78
Based on Annual
Calculation
Adjustment
Total Rate: $13.72 $14.75 $1.03
The Annual Adjustment Calculation is shown in Exhibit E of the
contract. Under the renewal proposal, the calculation of the
residential recycling rate increase is based on two separate
components: 1) Collection and 2) Processing. The Collection
Portion of the Residential Recycling Rate captures costs
associated with the collection and hauling of recycling. This portion
of the rate will increase annually by 3%, consistent with other
proposed rate increases. The Processing Portion of the residential
recycling rate relates to recycling processing and commodity sales,
and will be calculated on an annual basis. The calculation of the
Processing Portion is based off of the following formula:
Net Processing Rate x Prior Year Tonnage
Number of Households
The Net Processing Rate is the difference between the current
Commodity Value and the Current Processing Rate at Republic’s
Materials Recovery Facility (MRF) over a twelve month period.
If the impact to the total residential recycling rate based on this
calculation is greater than 3%, then the rate requires City Council
approval before taking effect. The chart below shows two
examples of how this calculation could impact rates.
In Example A, the collection portion of the rate increases by the
annual increase of 3% and the processing portion of the rate
increases by 14.2%, for a total rate increase of 5.5%. Because the
total rate exceeds 3%, the rate would require City Council approval
before going into effect.
In Example B, the collection portion of the rat e increases by the
annual increase of 3% and the processing portion of the rate
decreases by 7.5%, for a total rate increase of 0.6%. Because the
total rate does not exceed 3%, the rate will go into effect in
accordance with Section V(b) of the contract “Modification of
Rates.”
Under this renewal, Republic is required to provide the City a
report on a monthly basis detailing the commodity value by
material type and processing rate of their processing facility for the
City’s recyclable materials. The calculation of the twelve month
period Net Processing Charge will be based on the data reported
to the City.
Additionally, the renewal requires Republic to notify the City if a
load must be landfilled due to contamination, or if a recyclable
material is unable to be moved due to market conditions.
Renewal Considerations - Commercial: The contract renewal
maintains current service levels for commercial trash and
recycling, including the ability for curbside recycling to those
businesses that do not have the option to utilize recycling via the
currently-offered dumpster recycling services. Commercial
collections and roll-off rates will increase by 3% on October 1,
2018, and 3% annually under the contract renewal.
Financial
Considerations: An adjustment in rates will change the franchise fees received by
the City. The City collects ten percent (10%) of the total monthly
dollar amount collected for residential and commercial/industrial
billing.
Strategic Link: The proposed contract amendment links to the City’s Strategy
Map: “B2 Collaborate with select partners to implement service
solutions.”
Citizen Input/
Board Review: N/A
Legal Review: The proposed contract renewal and exhibits have been reviewed
and approved by the City Attorney.
Alternatives: 1. Adopt proposed contract amendment as presented, with an
effective date of October 1, 2018
2. Adopt modified contract amendment and pursue negotiations
with Republic regarding fee
3. City denies approval of proposed contract amendment and
seeks alternatives from solid waste service provider
Supporting
Documents: 1. Proposed contract renewal for Residential and Commercial
Solid Waste Collection
2. Amended Exhibit A showing October 2018 rates
3. Amended Exhibit B showing October 2018 Miscellaneous
Rates for Arlington Landfill
4. Exhibit E Residential Recycling, which reflects the calculation of
the annual adjustment to the Residential Recycling Rate
Staff
Recommendation: Staff recommends approval of Item 4I: Approve contract renewal
with Republic Waste Services of Texas, Ltd. for the provision of
commercial and residential solid waste and recycling services.
Staff Contact: Lauren LaNeave, Assistant to the City Manager