Title
Refuse Hauling Contract
History
The Village’s refuse hauling contract with Waste Management, Inc. is set to expire on October 31, 2013. A Request for Proposals (“RFP”) was released on December 7, 2012, seeking competitive proposals from qualified refuse hauling firms to provide same-day refuse, recycling, and yard waste collection and disposal services to all single family homes, condominiums, town homes, duplexes, and multi-family residential structures within the Village corporate limits. Pricing was requested for a three-year, five-year, and ten-year contract. In addition to requesting pricing for the status quo, staff also requested pricing for a bulk parkway leaf collection program, mandatory 2-cart program, and weekly recycling services.
The bulk parkway leaf collection program would provide residents with an alternative way to dispose of their leaves three times per year. To participate, residents would rake leaves onto their parkway next to the curb in front of the house. Using specialized mechanical equipment, the contractor will collect leaves from the parkway.
The mandatory 2-cart program would provide two leased 96-gallon containers to each customer for refuse and recycling. Contractors that provide this service would likely use a single-arm collection truck, which allows the refuse to be collected without the employee having to leave the truck. This would improve the efficiency of service throughout the Village. The collection service will continue to be a “take-all” program.
Pricing was also requested for weekly recycling services. The Village currently receives bi-weekly single-sort recycling collection service. The contractor will be required to supply all single family homes and townhomes in the Village with a 96-gallon roll-away toter for recyclables.
A mandatory pre-proposal meeting was held on January 8, 2013. Six refuse hauling firms attended the meeting. On January 28, 2013, the Village received two responsive proposals from Waste Management and Allied Waste/Republic.
The review of the proposals has two key components: (1) a review of the qualitative aspects of the proposed services, as evidenced in the responsiveness to the RFP and the interviews and (2) the pricing proposals.
Qualitative review:
A review committee was created to evaluate each proposal. The committee comprised two residents, the Assistant Village Manager, the Director of Infrastructure Maintenance, and the Chair of the Public Works & Engineering Committee. The evaluation committee met three times. Their initial meeting was with Village Manager to learn the role of the committee and how the evaluations were to be completed. The committee then held an interview with each of the haulers, and had a final meeting to summarize their findings. All of the evaluators ranked Waste Management’s proposal as being the most responsive to the needs of the Village as outlined in the RFP. A copy of the review committee’s evaluation matrix is attached that includes the average score is attached.
Both companies can provide the status quo services, the 2-cart program, and the weekly recycling services. Allied Waste/Republic would need to subcontract the street sweeping services. In addition, Allied Waste/Republic originally indicated that they were not able to provide bulk parkway leaf collection services. However, they sent a recent communication indicating their willingness to provide bulk parkway leaf collection services by either purchasing the Village’s used units or purchasing new equipment.
Financial Review:
The RFP contained a pricing matrix for each firm to complete. The purpose of the pricing matrix was to provide a financial summary of various service options, while controlling for variances among pricing. Both firms completed the pricing matrix, and the results are attached.
Upon reviewing the pricing proposals and the qualitative review, staff recommends that the board select among three service options:
Status Quo Option:
This would maintain the current level of service: weekly refuse pickup and bi-weekly recycling. All options maintain seasonal yard waste collection.
Service Option A: Status quo service with added weekly recycling
Under this option, the existing service will be continued with the exception that recycling will be on a weekly basis. Staff also recommends entering a 10-year agreement, as the most aggressive pricing accompanies a 10-year contract and provides extended service stability to the community.
Pricing: Year 1 Year 10
Waste Management, Inc. $19.10/month $23.85/month
Allied Waste/Republic $18.19/month $23.66/month
Service Option B: Two-cart program with weekly recycling
Under this option, residents will be issued two carts: one for refuse and the other for recycling. These carts must be placed at the curbside by residents. The system allows for increased automation, consistency, and efficiency. Yard waste will still be collected in separate yard debris containers supplied by the residents during seasonal periods.
Pricing: Year 1 Year 10
Waste Management, Inc. $19.20/month $23.97/month
Allied Waste/Republic $17.59/month $22.88/month
Recommendation:
Staff recommends to enter negotiations with Waste Management, Inc. for a ten-year agreement for one of the service levels outlined above. This selection is recommended based on the following considerations:
1. Waste Management’s superior score in the qualitative review by the evaluation committee. In nearly all areas evaluated, Waste Management’s proposal responsiveness and value-added services/contributions exceeded that of Allied Waste/Republic. In addition, Waste Management has proposed an annual $25,000 contribution toward Village initiatives, as well as maintaining various ancillary contributions currently being provided.
2. Competitive pricing. Waste Management’s proposed pricing is about 5% higher than Allied Waste/Republic in Year 1. However, the price difference diminishes over time and is less than 1% higher by Year 10 (Service Option A). If Service Option B is selected, Waste Management is 8% higher in Year 1 and 5% by Year 10. It should be noted that for Service Option A, Waste Management’s pricing is $0.39, or 2%, less than what is currently being paid by residents.
3. Minimal disruption. Changing waste haulers, like changing any carrier, brings some degree of disruption. Staff’s view is that a price difference of 5-8% between the proposals (Year 1) is not a compelling reason to change carriers: particularly given the long history of good service and familiarity that Waste Management brings to the community.
4. History of good service: Waste Management has exhibited excellent customer service over the years, and the Village receives relatively few complaints about Waste Management’s services. It is also noted that in the Community-wide survey conducted in 2012, respondents gave high marks to the village for waste collection services. The survey results for village utility services, which includes garbage, yard waste, and recycling collection is attached.
Final agreement will be brought to the Village Board for approval. If final agreement cannot be reached, staff recommends to begin negotiations with Allied Waste/Republic for said services.
This agenda item was reviewed by the Public Works and Engineering Committee on March 18, 2013, and referred back to staff to allow for additional time for review by the Village Board. This item is again being brought before the Public Works and Engineering Committee and Board on the same night. During the past month, both vendors have communicated to staff their continued interest in negotiating with the Village.
Recommended Action/Motion
I move to approve to direct staff to begin a thirty-day negotiation with Waste Management, Inc. of Houston, Texas, for a ten-year contract for refuse, yard waste, and recycling services Take-all mandatory 2-cart pickup with weekly recycling;
And
To authorize staff to make a recommendation based on the final offer negotiated with Waste Management and return to the Public Works and Engineering Committee and Village Board for consideration;
And
Should said offer be found unacceptable by the Village Board, to authorize staff to begin a subsequent thirty-day negotiation with Allied Waste/Republic Services, Inc. for refuse, yard waste, and recycling services.