Okaloosa County BOCC — November 4, 2012 — Action Item Printout

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: December 18, 2012 TO: Honorable Chairman and Members of the Board FROM: John Hofstad SUBJECT: Waste Management Final Proposal 1-1-1 DEPARTMENT: Public Works BCC DISTRICT: All STATEMENT OF ISSUE: Waste Management, Inc (WMI) has provided a final proposal on expanding enhanced recycling services (1+1+1) throughout the franchised areas of Okaloosa County which includes approximately 30,000 homes. BACKGROUND: At the Board’s direction earlier this year, WMI implemented a 1+1+1 pilot (Feb - Aug 2012) in the service areas encompassing approximately 2,400 homes in the Shalimar and Poquito Bayou areas. Results were positive in that the data showed a significant decrease in garbage disposal as well as a significant increase in the volume of recyclables collected at the curb. Additionally, a survey of participating residents was conducted during the latter stages of the pilot program, which also affirmed a positive perception of the benefits of the program. For the past few months, staff personnel from the county and WMI have been involved in negotiations to expand enhanced recycling throughout all of the unincorporated franchise areas. A number of different proposals have been submitted that did not meet the long-term program needs of the county resulting in county staff asking WMI for a best and final offer. In response, WMI provided a letter dated December 10, 2012 (attached) outlining conditions for implementing enhanced recycling (1+1+1). In summary, WMI is offering:  WMI to purchase carts at an estimated cost of $1.5M  WMI will offer a reduced rate of $9.45 per month per dwelling for 1+1+1 service  County to retain ownership of the carts upon termination of the contract  County to automatically honor the 5-year extension term of the existing collection and transfer station agreements thereby extending WMI’s contract to March 2021. Based on WMI’s response, residential customers will experience the following savings:  Current rate is $18.01 per dwelling per month ($10.93/WM+.68/OCrem+6.40/OCdis)  Proposed rate would be $9.45 (WM) + .68 (OC) + 6.40 (OC) = $16.53 per month  Savings to customer = $1.48 per month  This represents a rate reduction to the customer of 13.5% The benefit to the County is:   Collection Fee Reduction (30,000 units x $1.48 x 12) $532,800  Disposal Fee Reduction (2,750 TPY @ $38.26/ton)estimated $105,215  Recycling Revenue Increase (2,750 TPY @ $40/ton)estimated $121,000  ESTIMATED ANNUAL SAVINGS $759,015 Some discussion has been given to the County contributing to the rate reduction offered to the customer. With the County contributing up to $0.35 to the customer’s the rate reduction, the following would apply:  Proposed rate would be $9.45(WM) + .33 (OC) + 6.40(OC) = $16.18 per month  Savings to customer = $1.83 per month  This represents a rate reduction to the customer of 16.7% The benefit to the County is reduced to:  Collection Fee Reduction (30,000 units x $1.48 x 12) $532,800  Disposal Fee Reduction (2,750 TPY @ $38.26/ton)estimated $105,215  Recycling Revenue Increase (2,750 TPY @ $40/ton)estimated $121,000  Revenue reduction from County’s contribution ($126,000)  ESTIMATED ANNUAL SAVINGS $633,015 It bears mentioning again that all 67 Florida counties must meet the State imposed 75% recycling goal by the year 2020. The 1+1+1 recycling program will better position Okaloosa County to meet this goal at the end of the decade. At the current time, the County has two options to move this program forward: 1. Implement a 1+1+1 service level (enhance recycling) within both County solid waste franchise areas during the first quarter of 2013 based on the terms outlined above, or 2. Defer implementation of 1+1+1 enhanced recycling service until such time as the current contract with WMI expires in March 2016, at which time the County will competitively bid out solid waste services through the RFP process OPTIONS: Approve/Disapprove implementation of enhanced recycling services (1+1+1) within the County’s two franchise areas through the first quarter of 2013 based on the terms and conditions outlined by the County’s solid waste provider, Waste Management, Incorporated. RECOMMENDATIONS: Staff requests Board consideration to either implement enhanced recycling services (1+1+1) within the County’s two franchise areas through the first quarter of 2013 based on the terms and conditions outlined by the County’s solid waste provider, Waste Management, Incorporated; or defer implementation until such time as the current contract with WMI expires in March 2016. RECOMMENDED BY: APPROVED BY: James D. Curry, County Administrator