HomeMy WebLinkAbout4.5 Waste Management Extend Agmt or
19 82 STAFF REPORT CITY CLERK
` CITY COUNCIL File #600-40
DATE: April 7, 2015
TO: Honorable Mayor and City Councilmembers
FROM: Christopher L. Foss, City Manager "
SUBJECT: Extension of the Disposal Service Agreement with Waste Management of
Alameda County, Inc.
Prepared by Roger Bradley, Assistant to the City Manager
EXECUTIVE SUMMARY:
The City Council will consider extending the contract term within the Disposal Service
Agreement with Waste Management of Alameda County for solid waste disposal services at the
Altamont Landfill. The proposed extended term will be for a single period of ten years and
terminate on June 30, 2025. Additionally, the proposed contract extension includes the adoption
of a per-ton disposal fee for each year of the extended term.
FINANCIAL IMPACT:
The proposed contract extension includes a per-ton fee that will be assessed upon Amador
Valley Industries (AVI) for the cost of disposing the solid waste collected within the City of
Dublin. The per-ton fee is a pass through charge that AVI recovers through the rates assessed
upon Dublin residents and businesses. While the proposed fees will increase over the extended
term, the cost of the increase is a minor portion of the overall cost of services. Staff currently
estimates that the cost increase for the average residential customer will increase approximately
$0.07 per month in the first year
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Approving the First Amendment
to the Disposal Service Agreement with Waste Management of Alameda County, Inc.
DESCRIPTION:
The City's current agreement with Waste Management of Alameda County (WM) for solid waste
disposal service at the Altamont Landfill is set to expire on June 30, 2015. The current
agreement was executed upon the completion of a formal bidding process in January of 2005.
The agreement in its current form provides an option to extend the agreement term for a period
of up to 10 years. As a result, Staff has engaged WM to determine the potential for extending
the agreement term.
Page 1 of 3 ITEM NO. 4.5
In response, WM has presented, and Staff has evaluated, a proposed extension term of 10
years. In addition to the term, the current agreement requires that any extension also include the
negotiation of new disposal fees at the landfill. Currently, Amador Valley Industries (AVI) pays a
per-ton charge for the disposal of the solid waste is collects within the City of Dublin. AVI is
required to take all solid waste collected within the City of Dublin to the Altamont Landfill.
Aggregating all the solid waste collected within the City and guaranteeing its delivery to a single
landfill allows the City to negotiate lower disposal charges at the landfill. The current contractor
per-ton charge is $15.70, and the City delivers approximately 24,000 tons of solid waste to the
landfill on an annual basis, for a total annual contract value of approximately $374,000. (There
are per-ton governmental fees assessed on solid waste disposal at the landfill, but as those
costs are not governed by this contract, they are not evaluated herein.)
Initially, WM had proposed a large increase in the first year (28%) and a minimum of a 3%
increase every year thereafter, depending upon the consumer price index, due to increasing
cost of services. However, WM was open to Staff's request to phase in the increase over the life
of the extended period, instead of the larger increase in the first year. Thus, as is seen in the
table below, the proposed disposal rates for the extended term have a percent increase that
diminishes on an annual basis. This has a few advantages. First, it allows for a known rate
change each year, creating greater certainty in the City's annual rate adjustment process.
Second, it mitigates the cost impact on the Dublin ratepayer, especially those that might be on
fixed incomes, allowing them to adjust to the increase gradually. Finally, it saves money. Under
the proposed rates below, the ratepayer will save more the $300,000 over the life of the
agreement as residents and business will be paying less during the earlier years within the
agreement as opposed to a large increase in the first year.
Proposed Contractor Disposal Service Rates
Agreement Year Rate Increase Increase
FY 14/15 Rate $15.70 -
Year 1 $16.80 7.00%
Year 2 $17.92 6.70%
Year 3 $19.07 6.40%
Year 4 $20.24 6.10%
Year 5 $21.39 5.70%
Year 6 $22.51 5.25%
Year 7 $23.64 5.00%
Year 8 $24.68 4.40%
Year 9 $25.54 3.50%
Year 10 $26.31 3.00%
In conducting its review and analysis, Staff has compared the proposed rates with jurisdictions
that have recently negotiated new disposal service agreements. In particular, the City of San
Ramon completed an agreement with Republic Services at the Vasco Road Landfill, and
Oakland has a new agreement with WM at the Altamont Landfill. A comparison of the City's
proposed rates with these jurisdictions is presented below.
Page 2 of 3
San % $
Dublin Ramon Oakland Average Difference Difference
2016 $16.80 $23.44 $24.92 $24.18 -43.94% ($7.38)
2017 $17.92 $24.15 $25.67 $24.91 -38.99% ($6.99)
2018 $19.07 $24.87 $26.44 $25.65 -34.53% ($6.58)
2019 $20.24 $25.62 $27.23 $26.42 -30.55% ($6.18)
2020 $21.39 $26.39 $28.05 $27.22 -27.24% ($5.83)
2021 $22.51 $27.18 $28.89 $28.03 -24.54% ($5.52)
2022 $23.64 $27.99 $29.76 $28.87 -22.14% ($5.23)
2023 $24.68 $28.83 $30.65 $29.74 -20.50% ($5.06)
2024 $25.54 $29.70 $31.57 $30.63 -19.94% ($5.09)
2025 $26.31 $30.59 $32.51 $31.55 -19.92% ($5.24)
*Rate increase for Oakland have been estimated at 3% annually, however,
actual rates fluctuate on an annual basis depending on certain calculated
indices and could be more or less than this amount.
Based on the data gathered from these recent contract negotiations, Staff believes extending
the agreement, rather than re-bidding the contract, provides the most value to the community.
Therefore, Staff recommends that the City Council adopt the resolution approving the proposed
contract amendment (Attachment 1).
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
No noticing required.
ATTACHMENTS: 1. Resolution Approving First Amendment to the Disposal Service
Agreement between the City of Dublin and Waste Management of
Alameda County, Inc., with the Amendment attached as Exhibit A
Page 3 of 3
RESOLUTION NO. - 15
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING THE AGREEMENT BETWEEN
THE CITY OF DUBLIN AND WASTE MANAGEENT OF ALAMEDA COUNTY, INC.
FOR SOLID WASTE DISPOSAL SERVICES
WHEREAS, Waste Management of Alameda County, Inc. and the City of Dublin entered
into an agreement for solid waste disposal services commencing July 1, 2005; and
WHEREAS, the current agreement will expire on June 30, 2015; and
WHEREAS, the City of Dublin wishes to continue contracting for Solid Waste Disposal
Services with Waste Management of Alameda County, Inc.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby approve the agreement by and between the City of Dublin and Waste
Management of Alameda County for Solid Waste Disposal Services as described in
Exhibit A attached hereto and by reference made a part hereof.
BE IT FURTHER RESOLVED that the City Manager be authorized to execute the
agreement on behalf of the City of Dublin.
PASSED, APPROVED AND ADOPTED this 7th day of April, 2015.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
ATTACHMENT 1
FIRST AMENDMENT
TO THE DISPOSAL SERVICE AGREEMENT BETWEEN THE
CITY OF DUBLIN AND WASTE MANAGEMENT OF ALAMEDA COUNTY, INC.
This First Amendment to the Disposal Service Agreement, dated as of July 1,
2015 (the "Amendment") modifies and amends that certain "Disposal Service
Agreement" between the City of Dublin ("CITY") and Waste Management of Alameda
County, Inc. ("CONTRACTOR") dated January 12, 2005 (the "Agreement"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to such
terms in the Agreement.
Recitals
WHEREAS, the Agreement sets forth the respective rights and obligations of the
parties with respect to the Disposal of Solid Waste at the CONTRACTOR's Disposal
Facility for solid waste collected within the CITY; and
WHEREAS, the parties desire to amend the Agreement to extend the term (the
"Extended Term") of the Agreement and establish the Disposal Element for the disposal
of Solid Waste at the CONTRACTOR's Disposal Facility throughout the Extended Term;
and
WHEREAS, the CONTRACTOR had previously guaranteed the CITY permitted
capacity at its Disposal Facility through the Initial Term, and upon execution of this
Amendment, will guarantee permitted capacity at the Disposal Facility for the Extended
Term for Disposal of Solid Waste generated in the CITY; and
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, CITY and CONTRACTOR hereby agree to amend the
Agreement as follows:
Section 1 . Article 2 is hereby amended to read as follows:
2.01 Term. The term of this Agreement shall be for a twenty (20) year
period beginning July 1, 2005 and terminating on June 30, 2025.
2.02 Other Provisions. The CITY may, at the end of the term of this
Agreement, either renegotiate the terms and conditions of the Agreement with
CONTRACTOR or request proposals from qualified contractors to provide Disposal
Services. If the term of this Agreement is extended, the compensation provisions of
Article 5 shall be subject to negotiation.
2.03 Nothing in this Agreement shall be construed to provide a unilateral
right in either CONTRACTOR or CITY for an extension of the term.
Section 2. Section 4.02.2 is hereby amended to read as follows:
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4.02.2 Additional Disposal Facility Permits. To assist the CITY in
complying with the California Integrated Waste Management Act of 1989,
CONTRACTOR shall endeavor to secure additional permits necessary to make
available at all times twenty (20) years of Disposal capacity at the Disposal Facility for
Solid Waste generated in CITY in accordance with Section 4.11 of this Agreement and
sound Disposal Facility engineering and operating practices. Should CONTRACTOR
reasonably conclude that it is no longer feasible to make available twenty (20) years of
Disposal capacity and maintain Disposal rates pursuant to Exhibit 1, CONTRACTOR
shall notify the CITY of its determination and provide all studies information and data
which support CONTRACTOR's conclusion to the CITY. CITY shall review such support
and CONTRACTOR shall promptly meet with the CITY to review the same and,
thereupon, CONTRACTOR shall be relieved of its obligation in this regard.
Nothing in this Agreement requires the CITY to issue a permit for, or take any other land
use action related to, CONTRACTOR's Facility. The CITY retains its right and duty to
act on any permit applications or environmental review documents submitted to it in
connection with such expansion as it considers appropriate under Applicable Laws and
policies independent of this Agreement.
Section 3. Section 4.11 is hereby amended to read as follows:
4.11 Reservation of Disposal Capacity. CONTRACTOR shall guarantee
its ability to accept and Dispose of all Solid Waste delivered to the Disposal Facility by
the Collection Contractor for twenty (20) years from July 1 2005. CONTRACTOR shall
be responsible for reasonably estimating the quantity of capacity that it shall be required
to provide to Dispose of all Solid Waste generated in the CITY over the term of the
Agreement. The CITY makes no representations and is under no obligation regarding
the quantity or composition of the Solid Waste delivered to the Disposal Facility by the
Collection Contractor.
Section 4. Section 5.03 is hereby amended to read as follows:
5.03 Government Fees. The Disposal rate includes the following
government fee elements:
Agency Total
Government
Fee/Ton
(a) California Integrated Waste Management Board (AB1220) Fee $1.40
(b) Local Enforcement Agency(ACSWMD) Fee $0.38
(c) Business License (County) Fee $0.95
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(d) Alameda County "Measure D" Fee $8.23
(e) Alameda County Waste Management Authority Facilities Fee $4.34
f Alameda County Waste Management Authority Household
( ) Hazardous Waste Fee $2'15
(g) County Planning Department Fee $0.10
(h) County Open Space Fee $1.79
(i) County Transportation Fee $0.01
(j) Other Fee $0.03
Total Government Fee Elements* $19.38
*current fees as of January 1,2015,fees are subject to change as determined by the regulatory agencies.
Section 5. Section 21.01 is hereby amended to read as follows:
21.01 Except as provided herein, whenever either party desires to give
notice to the other, it must be given by written notice addressed to the party for whom it
is intended at the place last specified and to the place for giving of notice in compliance
with the provisions of this paragraph. For the present, the parties designate the
following as the respective persons and places for giving of notice:
As to the CITY:
Roger Bradley
Assistant to the City Manager
100 Civic Plaza
Dublin, CA 94568
Telephone: (925) 833-6650
Fax: (925) 833-6651
Email: roger.bradley @dublin.ca.gov
As to the CONTRACTOR:
Barry Skolnick
President
Waste Management of Alameda County, Inc.
17298 th Avenue
Oakland, CA 94603
Telephone: (510) 613-22112
Email: bskolnic @wm.com
and a copy to:
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District Manager
Waste Management of Alameda County, Inc.
10840 Altamont Pass Road
Livermore, CA 94550
Section 5. Exhibit 1 on Page 39 of the Agreement is hereby amended to read as
follows:
Exhibit 1
City of Dublin, CA
DISPOSAL RATE PER TON
Beginning Date of Disposal Element Disposal Total per Ton
Agreement Year ($/ton) Government Fee
Element Disposal Rate
July 1, 2005 $12.76 $14.90 $27.66
July 1, 2006 $12.76 $15.02 $27.78
July 1, 2007 $13.02 $15.22 $28.24
July 1, 2008 $13.28 $15.52 $28.81
July 1, 2009 $13.54 $16.35 $29.89
July 1, 2010 $13.95 $18.94 $32.89
July 1, 2011 $14.37 $19.14 $33.51
July 1, 2012 $14.80 $19.22 $34.02
July 1, 2013 $15.24 $19.26 $34.50
July 1, 2014 $15.70 $19.26 $35.03
July 1, 2015 $16.80 $19.38* $36.18
July 1, 2016 $17.92 $19.38** $37.30
July 1, 2017 $19.07 $19.38** $38.45
July 1, 2018 $20.24 $19.38** $39.62
July 1, 2019 $21.39 $19.38** $40.77
July 1, 2020 $22.51 $19.38** $41.89
July 1, 2021 $23.64 $19.38** $43.02
July 1, 2022 $24.68 $19.38** $44.06
July 1, 2023 $25.54 $19.38** $44.92
July 1, 2024 $26.31 $19.38** $45.69
*Current fees as of January 1,2015,fees are subject to change as determined by the regulatory agencies.
**Fees are adjusted periodically and this value will be changed to reflect current fees at the time of the contract price adjustment.
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Section 6. In the event of a conflict between the Agreement and this Amendment,
this Amendment will control. Except to the extent inconsistent with this Amendment, the
Parties ratify and confirm all of the terms and conditions of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
CITY OF DUBLIN
Dated: By:
Christopher L. Foss
City Manager
Attest:
By:
Caroline Soto
City Clerk
APPROVED AS TO FORM:
By:
John D. Bakker
City Attorney
WASTE MANAGEMENT OF ALAMEDA COUNTY, INC.
Dated:
By:
Its: . r-
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