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Minutes 03/24/2011 J lDl~~~u.~~'~~ lnl c"Jv tJ lUll JY) PRODUCTIVITY SUBCOMMITTEE MEETING MINUTES BY: ....................... SOLID WASTE DISPOSAL CONTRACT - WASTE MANAGEMENT, INC. MARCH 24, 2011 Members in Attendance: James Gibson, Vlad Ryziw, and Gina Downs Staff Present: Tom Wides, Operations Support Director; Dan Rodriguez, Solid Waste Director; Joe Bellone, Manager - Utility Billing & Customer Service; Sheree Mediavilla, Administrative Assistant PurDose of the MeetinR The County Manager requested the Productivity Committee to review the Solid Waste Disposal Contract (Franchise Agreements between Collier County and Waste Management, Inc. of Florida for District I and Choice Environmental Services for District II). The Productivity Committee asked the Productivity Subcommittee for their review and recommendation. Pre-meetinR with Gina Downs Tom Wides told the group that Dan Rodriguez, Joe Bellone, and Tom Wides met with Gina Downs on Monday, March 21, 2011 to answer her questions regarding the Franchise Agreement between Collier County and Waste Management Inc. of Florida and to discuss several communities Gina Downs has researched for benchmarking. James Gibson called the meeting to order at 8:35 a.m. TODics for Discussion . Franchise Agreement Power Point presentation to the Productivity Committee Purchasing Department involvement Single stream recycling Benchmarking Level of Service Local Vendor Preference WMI - Permit violations, environmental issues, equal opportunity employer, lawsuits. Fiala Hiller Hennin coyle Coletta v . . . . . . . ODeninR Comments Tom asked the committee if they wanted to walk through the Power Point presentation that was prepared for the Productivity Committee or revert to the questions the Subcommittee provided to staff. It was agreed that the Power Point was self-explanatory. Misc. Corres: Date: 0\ \ \":!:t \ \ \ Item #:\l...D -:c '1- ~ ~ 1 C:~i~s :J: Local Preference Joe Bellone asked the Purchasing Department to conduct an independent search of other counties and municipalities why they decided to do an RFP or ITB, and what changes they anticipated to get out of RFP or ITB, such as to improve level of service, achieve automation, or to move to single stream recycling. The results of those phone conversations were distributed to the sub-committee members. SinRle Stream RecvclinR Joe Bellone discussed the processes of automated garbage collection and single stream recycling in detail. He explained the labor costs saved by the contractor, as one driver is needed and therefore a reduction in labor and Workers' Compensation costs. Discussion on this topic: Question: Jim Gibson asked if recycling in Collier County is higher because of single stream. Answer: Dan Rodriguez told the committee that Collier County's residential recycling is one of the highest in the state and certainly in the top ten in the nation. We recycle approximately 80% of residential materials that would have been disposed in our landfill. Tom Wides referred to the AUIR for verification of this data. Question: Vlad Ryziw asked if our services were automated. Joe Bellone explained that the county is automated. He also explained that there were areas, such as areas in Bay Colony, that had brick pavers for driveways. In these cases, Waste Management used smaller non-automated trucks to service these areas. Discussion - Hammerheads Tom Wides: Some areas in the Estates have problems with turn-arounds and we are working on this through our Capital Improvement Program either through reinforced driveways to allow trucks a safe place to turn around, or through hammerheads at the end of long street runs in the estates. Gina Downs: 00 you have a liability for those driveways? Joe Bellone: With the help of the Real Property Department, we have tried to gain rights of entry. Staff also contacts the homeowner and asks for permission to use their driveway for the trucks to turn around. The county spends between $5,000 to $7,000 to improve a driveway. If Waste Management causes damage to the driveway, we have the liability. Staff has identified 217 streets in the Estates to build hammerheads. Gina noted that she saw $500,000 in the capital program for this cost. Firetrucks, other emergency vehicles, and school busses can use this also and they are a benefit to the county. Gina commented that the School District should help fund this program. There is a contract portion, the cost for disposal, an infrastructure element of the assessment that pays for the hammerheads. The solid waste assessment has been on our tax bill since 1998. Florida Statutes allows that and most counties do also. Level of Service - Twice a Week Pickup Jim Gibson (Exhibit 1) noted thatl.cee County has once a week pickup compared to Collier County having two, and one per week single stream recycling. 2 ./. Question: Looking at the level of service and comparing date from the past, current, and forecasts, is the volume in weight increasing? To what extent would you re-evaluate a twice per week pickup? I would think the volume of trash would decrease because of recycle increase. Answer: Dan stated that based on the level of service and the population for Collier County, twice per week pick up is the right mix for Collier County and is also needed for the influx of seasonal residents. In the mid 90s, there was a lot of illegal dumping in Collier County. The Board of County Commissioners decided to maintain this level of service to keep Collier County clean and beautiful. A comparison to other counties was discussed. Dan Rodriguez stated Waste Management trucks are able to get off the roads more quickly and do not compete with school and workers on the roadways. By 3:30 p.m., we are covering the landfill and preparing for the daily closing. ComDarison of Collier County bv Subcommittee to Other Counties Gina Downs created a spreadsheet that selected counties with populations similar to Collier County for comparison. Tom Wides stated we benchmark every year and these results are submitted with the budget process and discussions with the Board of County Commissioners every fiscal year. Staff: The City of Naples has their own contract, staff and trucks to provide collection services. Collier County has Interlocal Agreements with Everglades City and the City of Marco Island to provide solid waste collection services. Vlad Ryziw reviewed the contract from a performance perspective. He stated he looked at many areas and very impressed that this is a winner contract. He commented that they did not miss anything and he understood what he was reading. It is well done and not confusing. He fully understands it. Staff noted that it was John Yonkosky and attorney David Dees in 2005 who knocked heads with Waste Management and their attorneys in the development of the agreement that exists today. Discussion: Debris recovery. Collier County wrote language in the contract regarding FEMA reimbursement and Waste Management agreed to the terms. We took the changes to FEMA and met with Waste Management and they wanted to be a part ofthe solution. We were able to negotiate FEMA terms and the transition back to normal everyday service via Amendment 1 to the contract. Staff agreed that it is a well written contract. The County's approach is to bring in consultants - experts such as attorney David Dees who has 35 years experience in Southwest Florida and consulted with the County during amendments to the Waste Management contract. Gina Downs agreed. Questions from Subcommittee to Staff Vlad Ryziw: Contingency plan was fantastic and necessary. Emergency response is a big picture. Question: Anything noteworthy. 3 Answer: Dan Rodriguez stated the largest emergency response efforts were during hurricane Wilma and Tropical Storm Fay. Waste Management was responsive to the county and the community by providing a clean transition between our large debris hauler and our regular collection service. More importantly, this contract helped the county to gain full reimbursement from FEMA for the debris recovery effort. . When staff notified them of customer issues, they responded. Committee Question: Who owns the carts? Answer: Joe Bellone stated the contractor owns the carts. If they are damaged, Utility Billing Customer Service staff communicates with the customers and informs Waste Management of the issue. It is well coordinated. Gina Downs commented that she has seen other counties charge customers to buy the replacements. Transition to a a new contractor Committee Question: If you change contractors, when do we collect old carts and deliver new. If we get new contractor - how do we work out all those elements. This is a continuous operation... how do we do this? Staff Answer: A detailed transition plan must be developed and agreed between the current and future service providers. The County writes the RFP with specific criteria. In this, the methodology of performance, which we already have from Waste Management, is asked. There are definite elements of the contract that are requested that would lead to liquidated damages if not performed. In the contract, all residential customer complaints or service questions are directed to Utility Billing and Customer Service, not to Waste Management. The County has a web based work order system for each call. We measure Waste Management's performance and it is broken down into categories. Gina Downs Question: What is a new bid compared to an RFP? Staff Answer: Steve Carnell, Purchasing Director, suggested an invitation to bid that would have the exact same specifications as the Waste Management contract. If the competing company did not have these, they would be categorized as non-responsive. Gina stated that if we did not get what we have with Waste Management that would be a challenge. Staff: The vendors will tell you what you want to hear. That is what happened in Cape Coral. The discussion continued with a comparison of several counties and costs were assessed for "additional services" such as white goods, yard waste, pound limitation, and bulky items. Additional auestions Vlad Ryziw: How is yard waste handled? Answer: Joe Bellone stated that Waste Management picks up yard waste in containers, paper bags, or bundles no longer than four (4) feet. Waste Management does not charge us any additional cost for this service, unlike other counties. He used a cost chart for stating these costs. 4 ..t Question: Gina Downs: Other counties have fuel cost adjustments, how do we handle this? Staff response: Clause 26 of the contract states that if extraordinary costs in operation occur, Waste Management must present this to the Board of County Commissioners and ask for a rate increase. If Waste Management requests this, and the county by contract has the right to audit their books. If the Board of County Commissioners denies their request - there is no appeal. The burden of extraordinary costs is on the contractor, not Collier County. Vlad Ryziw: Fuel costs, I imagine they do bulk purchases. Answer: Dan Rodriguez. This has been discussed at quarterly meetings with Waste Management and they took an interest in these 5 years ago and started to make their fleet more efficient. In the last five (5) years, because of our contract with Waste Management, they inspect over 36 components of their hauling truck before it is certified to be on the road and fulltime employees inspect the fleet. Joe Bellone stated that his compliance group attends those meetings and WMI does this on their own. Under the contract, the County has the right to pull a Waste Management vehicle off the roadway if they do not comply. Question: Gina Downs: Further explain. Answer: Joe Bellone - Jim DeLony stated the county is not in the fuel business. Waste Management dropped their request for an extraordinary rate adjustment. Questions Drafted bv Vlad Rvziw What does the recycling revenue stream produce? Joe Bellone: Hard to gauge, transportation, processing cost, market demand for the commodity. County decided in 2005 we didn't want the liability. More important the more we recycle, the less trash is buried in our landfill. Joe Bellone stated the disposal costs are going down and that has allowed us to invest in the Hammer Head program. The Solid Waste Program is successful. Dan Rodriguez: Based on our current budget instructions, we do not plan to raise rates at the landfill. Gina Downs: Discussion on Waste Management's $50,000 education program for Collier County. Joe Bellone: Utility Billing sends Waste Management a bill for this amount on October 1st each year. Waste Management spends $110,000 to $120,000 in education. They support Keep Collier Beautiful, the Red Cross, United Way, publiC outreach, local events, and neighborhood cleanup by providing trucks and drivers. Gina Downs: Are they making other donations that they write off as charitable? Can someone throw that on you? Dan Rodriguez: No, that is a corporate decision that benefits their industry. They, on their own have decided to invest in their community. It is their way of being a good corporate citizen. 5 Vlad Ryziw: It is such a winner here - we have a double winner. The components include collection and disposal and that is what the rate payer sees. Joe Bellone: Assessment - we fully allocate the cost of the administration. Jim Gibson: The administration fees have a 2 to 3% variable. What is that based on? Joe Bellone: Any revenues derived from residential customers, if it is a recyclable pick up, Waste Management gets the revenue. Question: Is the 2 to 3% an attempt to recover the recycle revenue? Joe further explained how Waste Management is at risk for the hauling and disposal of recyclable materials, and therefore retains the revenues. Gina Downs: Administration fees go up as high as 20% in other counties. Can we use this as a bargaining chip? Why don't we increase the administrative fees? Joe Bellone: We use franchise fees to reduce the assessment. We offset our administrative fees. Vlad Ryziw: How do you handle an annual audit? Response: Waste Management is not required to provide us an annual audit unless they are asking for a rate adjustment. Contract ARreement The County Attorney's Office drafted an agreement to the existing terms of the Waste Management and Choice contracts for the next seven (7) years and both vendors have corporate approval and have signed the document. Staff response: Dan Rodriguez stated that Waste Management signed the contract because of our long- term relationship with them. In our quarterly meetings with Waste Management, we get the most value for our customers. Discussion leads to the original contract of 8 years with 2 options to renew with 7 years each. Jim Gibson: It is fantastic Vlad Ryziw: Incredible Gina Downs: Fantastic Joe Bellone: Outlined the Executive Summary pulls all the information together, gives options, staff recommendation, pricing, levels of service, vendor performance, local preference, and customer satisfaction. We expect public comments from contractors promising the Board that they can do much better. We expect contractors to be at the Board meeting. Vlad Ryziw: There are a lot of benefits in the Waste Management contract; the unit rate stays the same based on the CPI. On cost side there is a lot of comforts. I would suggest Subcommittee or the Productivity Committee making a presentation with the focus on performance. The criterion when this subcommittee was formed was to focus on performance. How are they performing in specific areas? Cost is only one component - complaints are another for example. 6 ~ Joe Bellone will email a copy of the Executive Summary to the Subcommittee members (via Mike Sheffield). Additional cost benefits and the recvclinR DrORram . White goods are free for us. . Electronic waste is huge. lV, computers, our contract are required to be picked up and many communities do not process them. . Our recyclebles go to a transfer site on Shirley Street and are transported to Pembrook Pines for recycling. Gina Downs surveyed Santa Barbara, Monroe, Washington, and Vermont. Detailed, priced beyond compare. Look around the world (quoted a 2002 report) and see the prices. The United States was already in good shape. In Collier County, we are in excellent shape. Vlad Ryziw: The metrics in the Executive Summary are the performance we want to mention. Gina Downs: Keep up the good work. Any mediation processes? Dan stated there were none on the collections side. He stated quarterly meeting with Waste Management's corporate folks helps our partnership. Safety is non-negotiable and WMI celebrated one year without any injuries and they have 133 employees. Vlad Ryziw: What is Intent to Negotiate? Tom Wides defined that an Invitation to Bid is allowed by State Statute. Cost proposals are submitted, the county does short list, and there are proposals and presentations. Specs in the bids will occur in our normal RFP process. Joe Bellone: If we are going to take this to the BCC, we need to do it no later than June; preferably May. If a new contractor is selected, the transition period would be two years. Gina Downs: How do you want the Subcommittee to weigh in on this? Do you want our participation in this? You have a presentation. Do you want us as the committee to be there and show what we studied? Jim Gibson: The County Manager brought this to the Productivity Committee who then formed the Subcommittee. In accordance with this request, we have reviewed the contract and find it is very - very responsive and good for the tax payers. ClosinR Statement bv Jim Gibson: The Subcommittee will draft a letter to the Productivity Committee with their findings. This letter will contain the statistics reviewed during this meeting, and performance and compliance issues. Gina will draft the letter and circulate to us through Mike Sheffield and provide the letter to the Productivity Committee. . Local Vendor Preference: WMI has 15 years in Collier County and employs 130 people · Existing contract - excellent and extremely responsive compared to the contracts we have examined in this process 7 . No permit violations . No environmental Issues . Equal opportunity employer . Leader in the business . Not aware of any lawsuits . Discussions lead to the original contract of 8 years with 2 options to renew with 7 years each. . Gina Downs - fantastic . Vlad Ryziw - Incredible . Committee will use the Executive Summary to pull all information together, give options, staff recommendations, pricing, and level of service. The meeting was adjourned at 10:20 a.m. Submitted by Sheree Mediavilla, Administrative Assistant to Operations Support Department. ~ -,. 8