City of Culver City, California
Agenda Item Report
Meeting Date: 03/14/2011 Item Number: C-3
CITY COUNCIL AGENDA ITEM: Approval of a Professional Services Agreement
with CR&R to Transport Refuse and Recyclable Material from the City’s Transfer
Station
Contact Person/Dept.: Damian Skinner Phone Number: (310) 253-6421
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: Athens Services on March 8, 2011 via email, CR&R on March 9, 2011
via telephone, Magdaleno Trucking, and Ecology Recycling and Transportation Services
(E-mailed on November 12, 2010); Meetings and Agendas – City Council (03/10/11)
Department Approval:
Charles D. Herbertson(03/10/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (03/10/11)
Chief Financial Officer Approval:
Jeff Muir (03/10/11)
City Manager Approval:
John M. Nachbar (03/10/11)
RECOMMENDATION:
Staff recommends the City Council approve an agreement with CR&R for the
transportation of refuse from the City’s Transfer Station.
BACKGROUND:
The City of Culver City operates an exclusive residential and commercial refuse
collection and disposal service as a municipal enterprise. The Refuse and Recycling
Divisions (Sanitation) of the Public Works Department operate solely on revenues
generated through the provision of solid waste transfer and collection services to
businesses and residents, grants, and the sale of recyclable material. These revenues
cover the costs for refuse collection, disposal, recycling programs, and public outreach.
Sanitation operations are 100% supported by enterprise fund revenues and are not
dependent upon other funds or tax contributions.
During the preparation of the City Manager’s Proposed Budget for Fiscal Year
2010/2011, staff analyzed refuse operations in an effort to identify and minimize
overhead costs. Staff looked at all of the non-revenue generating activities that could be
reduced or out-sourced without affecting the quality of service provided to residents and
businesses. The analysis showed that the transportation of refuse to various
disposal/recycling facilities is a good candidate for outsourcing for two reasons: 1)
Private companies that provide this service as part of their core business may be able to
more cost effectively transport refuse through greater economies of scale; and 2) It
would eliminate the need to purchase, amortize, and maintain pieces of equipment that
do not provide refuse collection services. City of Culver City, California
Agenda Item Report
Staff tested the analysis by requesting an informal bid from one of the largest
transportation companies in the region. As expected, the per-ton cost to transport refuse
was cheaper than the City’s cost to provide the same service.
Staff submitted the proposal to out-source refuse transportation services to the City
Council during the Public Works Budget presentation. The City Council agreed with the
analysis and approved the proposed course of action.
DISCUSSION:
Culver City Municipal Code Section 3.07.085.A provides that the City may award a
contract for professional or personal services without conducting a competitive bid
process. However, due to the nature of the services being retained, it has been staff’s
experience that the issuance of a Request for Proposals (RFP) is a more effective way
of obtaining the best proposal. Therefore, in July 2010, Staff released RFP #1461
requesting proposals from qualified companies to transport refuse and recyclable
material from the City’s Transfer Station.
On August 19, 2010, the following proposals were received (Attachments 2, 3, and 4):
Proposer Total Contract Amount
1. Athens Services $293,630.00
2. CR&R $407,787.00
3. Ecology Recycling and Transportation Services $472,873.00
4. Magdaleno Trucking $561,708.00
Athens Services is the lowest bidder; however they have withdrawn their original
proposal. Therefore, staff is recommending the City Council award a contract to CR&R
as the lowest responsive and responsible bidder.
CR&R’s proposal provides the per ton cost to transport the City’s refuse to various
disposal/recycling facilities during the 1
st
year of service. The price per ton shall be
adjusted annually as provided in CR&R’s Bid Sheet (Attachment 1). The actual
aggregate total amount of the contract will vary based upon tonnage hauled and the per
ton rate in effect at the time.
Outsourcing the transportation of refuse will relinquish the City’s ownership control in
providing this service. As a safeguard, the City will retain its long haul fleet for three to
six months after contract execution.
Staff contacted references for CR&R, and all references indicated CR&R to be
competent and responsive. If the agreement is approved, CR&R would take over the
refuse transportation services from the City in March 2011. The proposed contract City of Culver City, California
Agenda Item Report
period would be for a five-year period between March 15, 2011 through March 14, 2016,
with the option to exercise two, two-year extensions (with the approval of the Director of
Public Works/City Engineer), for the per-ton rates provided in Attachment 1 (Bid Sheet)
of CR&R RFP response. City employees displaced from this action have either retired
or would fill vacancies within the Division and other departments.
FISCAL ANALYSIS:
The table below shows the annual cost to transport refuse to various disposal/recycling
facilities under CR&R’s bid, based on an average tonnage disposal using 2007 and
2008 actual figures.
CR&R
Disposal Tons
Destination 2007 2008 Average
Transportation
Cost/ton Total
Puente Hills 50,660 46,075 48,368 $7.23 $349,697
CALMAT 513 154 334 $8.56 $2,855
Chiquita
Canyon 0 4,410 2,205 $9.93 $21,896
SERF 5,997 2,581 4,289 $7.13 $30,581
Shamrock 675 174 425 $6.50 $2,759
Total
Cost/Year: $407,787
The decision threshold to outsource transportation services was $10 per ton. It is clear
from the table above that CR&R’s proposal is below $10 per ton and would remain so
for most destinations for the duration of the contract (See Attachment 1).
The following table shows the estimated annual savings the Refuse and Recycling
Division would realize by outsourcing transportation services:
Heavy Truck Driver (4) $346,670
Heavy Truck Driver (RPT) $82,450
Uniforms $5,000
Over Time $46,000
OPEB (5 employees) $32,500
Garage Charge Savings $580,000
Amortization of Equip. $108,830
Total City costs to provide services: $1,201,450
Less CR&R’s proposal to provide services: $407,787
Net Annual Savings: $793,663 City of Culver City, California
Agenda Item Report
It is important to note at this time that the estimated net annual savings is approximately
$800,000. The money saved could be used to upgrade the Transfer Station facility,
build a fund balance, and reduce the upward pressure on refuse rates in a climate of
escalating disposal costs due to the inevitable closure of the Puente Hills Landfill.
In addition to the net savings, the sale of the City’s refuse transportation fleet at auction,
and amortization cost savings could yield $1.1 million in one-time revenue which could
be used to pay off a $635,830 loan from the General Fund and a $341,249 loan from
the Equipment Replacement Fund.
ATTACHMENTS:
1) Bid sheet submitted by CR&R
MOTIONS:
That the City Council:
1) Approve a Professional Services Agreement with CR&R to transport refuse and
recyclable material from the City’s Transfer Station for a five-year period between
March 15, 2011 through March 14, 2016, with the option to exercise two, two-
year extensions (with the approval of the Director of Public Works/City Engineer),
for the per-ton rates provided in Attachment 1 (Bid Sheet) of CR&R RFP
response; and,
2) Authorize the City Attorney to review/prepare the necessary documents; and
3) Authorize the City Manager to execute such documents on behalf of the City.
MEETING DATE: March 14, 2011
AGENDA ITEM : Approval of a Professional Services Agreement with CR&R
to Transport Refuse and Recyclable Material from the City’s Transfer Station.
ATTACHMENTS
Pages
1. Bid sheet submitted by CR&R dated August 18, 2010
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