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HomeMy WebLinkAbout10.C.1. Award of Contract for Garbage/Recycling Bin PurchaseGeneral Business 10. C. 1. SHAKOPEE TO: Mayor and City Council FROM: Mark McNeill, City Administrator DATE: 01/21/2014 SUBJECT: Award of Contract for Garbage/Recycling Bin Purchase (F) Action Sought For Council to award the purchase of garbage /recycling bins to Cascade Engineering, Inc. Background In 2013 the City Council directed that proposals be taken for a garbage hauler to provide garbage collection and recycling services to the City's organized garbage collection customers. This includes all single - family, duplex, and triplex residents and townhouse residents within the sewered area of Shakopee. Six proposals were taken, and Allied (Republic) Services was awarded a five -year contract, which will begin June 1, 2014. As part of that award, staffs recommendation to Council was that the City purchase and own the carts. The rationale for that is that it would provide a savings for the residents, and allow the City to have control of this asset. Without this, the successful hauler would have to amortize the cost of bins in the initial five year contract. After that time, the hauler would own the carts. With the City having ownership, amortization could take place over a longer period of time, and, at the end of that time, the City would own the carts as an asset. It should be noted that cart life is a minimum of 10 years, and 15 years or more is not uncommon. As a result, Council directed that quotes be taken for approximately 23,000 wheeled garbage and recycling containers. Recycling under the new hauler will be under a "single -sort" garbage system. As compared to the current collection in 18 gallon bins, it is anticipated that there will be greater recycling participation, fewer problems with wind -blown recycled materials, and every other week pick -up (which leads to less wear and tear on City streets). With assistance from the City's environmental consultant Foth Engineering, specifications were sent to three different cooperative purchasing organizations. These groups meet the competitive bid requirements. Five responses were received from nationally - recognized suppliers. The consultant and Administrative Intern Zach Stock performed an analysis, considering such issues as price, references, wall thickness, and resin weight. The final three of those relate to durability. After careful consideration, the consultant and staff recommend purchasing from Cascade Engineering ,Inc, for the reasons outlined in the attached memorandum from Foth Engineering. The "roll -out" of the new containers will be done by a contractor working for Allied, and will take place the last week of May, 2014. Specifics on the collection of old carts and distribution of new ones will be available as time grows nearer. Discussion: One of the concerns which has been raised is the difference between contractor owned carts and City owned carts, whether there will be more wear and tear on them due to contractor "abuse ". We have been assured by Allied that their automated collection arms on the trucks are adjusted so that the carts are placed gently. If an arm goes out of adjustment, it will be noticeable and Allied will need to fix the problem. The carts to have a 10 year warranty, but breakages (especially wheels and lids) are not uncommon. Allied is under contract to service these types of broken cart issues. Other issues (squirrels or rodents chewing through lids) are not covered under warranty. Because of the every other week pick up schedule, and anticipating that there will be a greater amount of recycling, the standard recycling cart will be a 90- gallon container. Because of smaller garages, townhouses will have a 60- gallon recycling standard container. Note that yard waste will be continued to be handled through containers supplied by the hauler. Allied will contact the seasonal yard waste customers about delivery of Allied - supplied bins around June 1 st. Dick's customers were notified in November when their carts were removed that those yard waste carts would not be replaced in the spring. Instead, for the approximately six weeks of spring clean up, yard waste will be picked up by Dick's from containers that the customer supplies or in compostable paper bags. Recommendation I recommend that the contract for garbage carts be awarded to Cascade Engineering, Inc.. Budget Impact The recommended quote from Cascade Engineering, Inc is $975,100, which includes delivery. Allied has agreed to do assembly. The funding for this will come as a loan from the Sanitary Sewer Fund, amortized over 10 years at 4% interest. This loan will be repaid through a "cart rental fee" listed on residents' bills. Also included will be a charge for replacement parts. This means that the listed cart rental fee to be charged per customer will be $0.55 per cart ($1.10 per month per customer for the two carts). The rates charged under the current contract, and the new monthly fees are attached for comparison. It shows that single family residential fees will be reduced under the new system; conversely, townhome fees will be increased. This is a result of the policy decision that the City Council made to equalize rates, so that there would be no "subsidization" of townhouse customers by single family customers, as had taken place under the current contract. Relationship To Visioning This is a "housekeeping item" (F). Requested Action If Council concurs, it should, by motion, authorize a contract for the purchase of approximately 23,280 garbage and recycling carts to Cascade Engineering Inc, at a cost of $975,100. Attachments: Collection Rates Memo from Foth Eng. Current Monthly Rates: Weekly Collection Residential (1 to 4 plex) Townhome Refuse Recycling Total Refuse Recycling Total 30 Gallon $8.65 $3.71 $12.37 $6.71 $3.12 $9.83 60 Gallon $10.76 $4.64 $15.40 $6.71 $3.12 $9.83 90 Gallon $12.45 $5.20 $17.65 $7.75 $3.20 $10.95 Note: The rates do not include the 9.75 percent state Solid Waste Management Tax. Proposed Rates with Allied Waste Services (for June 2014 -May 2015): Weekly Collection (unless noted) Residential (1 to 4 plex) & Townhomes Refuse Recycling Total Cart Rental Fee Total 30 Gallon (every-other week) $5.81 $3.24 $9.05 1.10 10.15 30 Gallon $7.30 $3.24 $10.54 1.10 11.64 60 Gallon $9.43 $3.24 $12.67 1.10 13.77 90 Gallon $11.55 $3.24 $14.79 1.10 15.89 Note: The rates do not include the 9.75 percent state Solid Waste Management Tax. Foth Infrastructure & Environment, LLC Eagle Point II • 8550 Hudson Blvd. North, Suite 105 Lake Elmo, MN 55042 (651) 288 -8550 • Fax: (651) 288 -8551 Nv w.foth.com January 14, 2014 TO: Mark McNeill, City Administrator (Shakopee) CC: Zach Stock (Shakopee) FR: Dan Krivit (Foth) Memorandum RE: City of Shakopee's Purchase of Solid Waste and Recycling Carts: Summary Results of Request for Price Quotes and Recommendations Executive Summary The City of Shakopee released a request for price quotes (RFPQ) for residential solid waste and recycling roll -out carts on November 25, 2013. The City used this RFPQ, including the Shakopee Cart Specifications, for purposes of receiving competitive price quotes from various cart manufacturers. Five cart manufacturing companies responded with very competitive pricing. The City staff team and Foth carefully reviewed the responses, prices, references and other information to thoroughly evaluate the responses and determine the most suitable cart manufacturer and cart model for Shakopee's needs and budget. The City staff / consultant team recommends that City Council authorize a purchase of carts from Cascade Engineering, Inc. based on the RFPQ, quote submitted by Cascade, and the calculated total capital cost estimate of $975,100. Background On July 2, 2013, the City Council authorized the execution of a collection services Contract between the City of Shakopee ("City ") and Republic Services /Allied Waste Services ( "Contractor "). The collection Contract is for city-wide residential solid waste, recycling, and yard waste collection. The City is changing its recycling program to a single - stream recycling system using roll -out recycling carts with this new Contract beginning on June 1, 2014. The new collection Contract requires that the City purchase and own the new recycling and solid waste carts. The Contractor is responsible for purchasing its own yard waste carts. The Contract requires the Contractor to be fully responsible for assembly, distribution, maintenance, warranty The information contained in this memorandum is considered privileged and confidenria! and is intended only for the use of recipients and Fork X WSVE\20121125052 -00\10300 Draft ReportslCartslM - Foth memo report 1- 14- 14.docx Memorandum claims, and other inventory management of the City's carts. The Contractor will arrange for solid waste and recycling cart distribution and roll -out to all eligible City residents. The Contractor is also responsible for proper cart care during collection operations as supervised and monitored by City staff as per Contract standards. On November 6 and November 18, City Council authorized City staff to release the RFPQ. The RFPQ process referenced existing contracts through three separate cooperative purchasing organizations: the Houston - Galveston Area Council (HGACBuy); the National Intergovernmental Purchasing Alliance (National IPA); and the National Joint Powers Alliance (NJPA). This approach allowed the City to leverage its buying power through the three cooperative purchasing organizations serving municipalities throughout the United States. Discussion of Results The following five companies submitted competitive price quotes in response to the City's RFPQ: ♦ Cascade Engineering, Inc. ♦ Otto Environmental Systems, LLC ♦ Rehrig Pacific Company ♦ Schaefer Systems International, Inc. (SSI) ♦ Toter, LLC. City staff and Foth calculated total capital costs of all responses based on the unit price quotes and estimated number of carts (approximately 23,280). Total capital costs include: ♦ Cart purchase in three sizes (35- gallon, 65- gallon, and 95- gallon). ♦ Can counts as estimated by the City based on current trash cart counts under the existing collection contract. ♦ Transportation / delivery of the carts from the manufacturer to Shakopee. ♦ Labeling of the carts as per the City's specifications. The City also requested optional discounts for early payment or early ordering. All of these factors were included to calculate the lowest capital cost estimate by manufacturer. The total capital costs ranged from a low of $975,100 to a high of $1,198,653. The City staff / consultant team also evaluated the quality of the carts proposed by each manufacturer. Durability was analyzed based on the net resin weight and wall thickness of each cart model. References of other municipal customers were also contacted for each company to assess cart field performance in cold climates, warranty service and Memorandum other customer service issues. Reference sales literature was also reviewed as a secondary source. Cascade was determined by the City staff / consultant team to have the most suitable carts and services based on Shakopee's needs. The Cascade capital cost was the lowest. Cascade municipal customer references were contacted and provided strong recommendations for this cart manufacturer. In addition, the City's current collection contractor, Dick's Sanitation, uses Cascade carts and has provided a very positive recommendation on both cart field performance and customer service. One of the features mentioned by Dick's staff is the footprint of the Cascade cart is smaller than other cart models. This allows some customers to more easily fit the cart in small garages. City staff have discussed with City Council the approach of financing this cart purchase by borrowing from another City capital fund. The estimated capital cost for the cart purchase, $975,100, would then be repaid through the City - imposed "cart fee" on the residents trash bills. These cart fees would be collected by our Contractor and reimbursed directly to the City. The amount of the "cart fee" for two carts (trash and single -stream recycling) is currently estimated at $1.10 per household per month. Recommendations The City staff / consultant team recommends that City Council authorize a purchase of carts from Cascade Engineering, Inc. This recommendation is based on the RFPQ cart specifications packet, Cascade's price quote in response, and the calculated total capital cost estimate of $975,100.