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CC - CONSENT ITEM: Approval of a Professional Services Agreement with SCS Engineers for Refuse Rate Study Services in an Amount Not-to-Exceed $62,000.
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Meeting Date: July 10, 2023
Contact Person/Dept: Sean Singletary/Public Works - EPO
Phone Number: 310-253-6457
Fiscal Impact: Yes [X] No [ ] General Fund: Yes [ ] No [X]
Attachments: Yes [ ] No [X]
Public Notification: (E-Mail) Meetings and Agendas (07/06/2023)
Department Approval: Yanni Demitri, Public Works Director/City Engineer (06/21/2023)
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RECOMMENDATION
Staff recommends the City Council approve a professional services agreement with SCS Engineers for refuse rate study services, in an amount not-to-exceed $62,000.
BACKGROUND
The City operates an exclusive residential and commercial refuse, recycling and organics collection and disposal service, as well as construction & demolition (C&D) collection, as a municipal enterprise. The Environmental Programs and Operations Division (EPO) of the Public Works Department operates solely on grants and on revenues generated from the provision of solid waste, recycling and organics transfer and collection services to businesses and residences. These revenues cover the costs for refuse collection, disposal, recycling and organics programs, and public outreach. Sanitation operations are fully supported by enterprise fund revenues.
In addition to providing revenue to cover the cost of routine EPO operations, refuse fees cover the cost of additional services such as La Ballona Creek Cleanup Event, residential on-call bulky item pickup, citywide street sweeping, pedestrian container collection, and the removal of illegally dumped bulky items.
In August 2021, City Council approved a resolution confirming the levy and collection of fees through Fiscal Year 2026, which was reflective of a 40% increase in fees over the five-year window of the related study.
As the world economy has emerged from the COVID emergency since the time of the last rate study, many factors have negatively impacted refuse revenues. Prior to China’s ban on the importing of recycling, the City had the ability to sell its recycling to China. Now, however, the City must pay up to $75 per ton to process 1,500 tons of recycling per month. Costs will continue to increase as additional countries restrict the export of recyclable products.
Additionally, fuel costs for trucks that move refuse from the City’s Transfer Station to waste processors have increased substantially during this time. Additional environmental requirements, such as South Coast Air Quality Management District Rule 1193 (for City contract fleets to use alternative fuels) as well as California Air Resources Board Zero-Emission Vehicle Fleet, are on the horizon and will increase the City’s cost of operations.
The City’s Transfer Station was constructed in 1982 and despite being well-maintained in accordance with County Department of Health permits, requires multiple capital upgrades including floor repairs, additional push wall construction, scale and electronic improvements, an addition to the building to address Americans with Disabilities Act (ADA) upgrades, expanded all-gender locker rooms, and the creation of much needed office and storage space that has been delayed since 1997.
Finally, SB 1383’s requirements to roll out organics collection at all businesses and residences in the City will require additional routes, collection bins and trucks to add this waste stream to operations, as well as related personnel increases and costs to report, manage and track data and conduct required inspections of trash containers. A new routing and billing software will also be rolled out in the next year to replace the outdated software currently in use.
Despite the increases laid out in Fiscal Year 2021, refuse revenues are trailing expenditures by approximately $1M for Fiscal Year 2024. To address this gap, staff proposes embarking on a new rate study to determine the current and future costs of operations. Staff will report the results back to Council once the study is completed.
Request for Proposals #2343 was posted on Planet Bids on May 25, 2023, and bids were due on June 22, 2023. Only one bidder, SCS Engineers, submitted a proposal. Staff reviewed the proposal and found it to be complete and responsive. SCS Engineers prepared the most recent rate study, requested by the Department of Public Works in 2019.
FISCAL ANALYSIS
The agreement with SCS Engineers will be for an amount not-to-exceed $62,000. The Adopted Budget for Fiscal Year 2023-2024 includes sufficient funding for these services in Account #20260400.619800 (Refuse Collection - Other Contractual Services).
ATTACHMENTS
None.
MOTIONS
1. Approve a professional services agreement with SCS Engineers for refuse rate study services, in an amount not-to-exceed $62,000; 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.