Board of Directors Regular Meeting Agenda


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Meeting Date: 09/20/2018  

SUBJECT MATTER:
Receive, consider and act upon Solid Waste and Recycling Collection Services with Waste Management of Texas, Inc.; 
FISCAL IMPACT:

Per the current terms of the Refuse, Yard Waste, Recyclables and Bulky Waste Collection, Disposal and Processing Services Contract with Waste Management, the Township pays $10.46 per residentail household which includes the following:
  • Once per week fully automated curbside trash collection utilizing a 96-gallon cart.
  • Once per week fully automated curbside collection of recyclables utilizing a 96-gallon cart.
  • Once per week manual collection of yard waste through compostable bags, bundles or resident provided containers.
  • Operation and maintenance of the Recycling Drop-off Center.
  • Solid Waste collection for apartments in The Woodlands with an option for recycling services.
The 2018 Budget for Waste Management services is $5,002.418. The cost extrapolated out over a five-year period totals $25,012,090.
 
The Renewal Proposal presented by Waste Management proposes a rate increase beginning in 2020 of $14.15 (Current Rate is $10.46).  A Cost Analysis of the proposed rate and subsequent years of an extended contract is reflected in the table below assuming a 3% annual CPI unit cost adjustement and no additional single family households added to the contract:
 
Waste Managment Proposed Rate Increase Cost Analysis
  2020 2021 2022 2023 2024 5 year total
Unit Rate $14.15 $14.57 $15.01 $15.46 $15.93  
Annual Cost $5,822,037 $6,101,909 $6,285,925 $6,474,489 $6,667,251 $31,351,611
Increase over current $1,177,561 $1,319246 $1,357,029 $1,398,660 $1,440,641 $6,693,137
BACKGROUND:
On April 19, 2018,  the Board of Directors was presented information regarding contracted solid waste collection disposal and recycling services which are provided by Waste Management of Texas, Inc. through the  Refuse, Yard Waste, Recyclables and Bulky Waste Collection, Disposal and Processing Services Contract. The Initial Term of the current contract began on February 1, 2012 and ends on January 31, 2020.  The Agreement provides that on or before 180 days preceding the expiration of the Initial Term the Township may give written notice to the Contractor of its desire to renew the term of the Contract ("Extension Notice") for an additional five-year term up to two (2) such successive extensions of a minimum of one (1) year to a maximum of five (5) years extensions (the Renewal Term). The Board approved the release of a Request for Proposals for Solid Waste and Recycling Consulting Services and to return to the Board with submitted proposals for consideration.
 
On July 25, 2018, 2018 the Board of Directors considered the submitted proposals and selected Solid Waste Specialists (SWS) to assist with both:  Option 1 - have the Consultant work with Township staff to negotiate  a renewed service agreement with Waste Management. If negotiations result in satisfactory changes and terms for services, then The Township could move forward with an extended contract with Waste Management; and Option 2 -  have the Consultant  draft specifications and a Request for Proposals for residential waste collection and disposal services (single family and multi-family), provide bidding assistance, evaluate bids, present bid and recommendation to the Board, and negotiate.
 
The Township delivered am Extension Notice to Waste Management on August 1, 2018, at which time the Township and Waste Management entered into a thirty (30) day negotiation period. 
 
Waste Management submitted their Renewal Proposal to the Township August 31, 2018 (Attachment A). Lynn Lantrip, Principal at Solid Waste Specialists, has prepared a report and recommendation on the contract renewal negotiations and will review with the Board the potential options (Attachment B). 

The major financial points  of Waste Management's Renewal Proposal include:
  • An increase in the rate per single family home to $14.15 in 2020 or the following services:
    • 1 x week Trash collection - 96 gal cart with green lid
    • 1 x week Recycling collection - 96 gal cart with yellow lid 
    • 1 x week Yard Waste collection - customer-owned containers and compostable bags
    • 1 x week Bulk collection - on-call service as needed
    • Fifty (50) Big Bellies - solar powered trash compactors for use in public spaces
    • “At Your Door” - Community-wide, on-demand household hazardous waste and electronic waste collection
These services are the same services as currently provided, except for the last two, bolded services listed above of the 50 Big Belly trash compactors and the "At Your Door" service. Staff has calculated a one-time value of the 50 Big Belly trash compactors to be $187,500 and the "At Your Door" household hazardous waste collection value of $.85 per home.  The proposal does provide additional services not currently provided, with associated costs, for consideration.

The Woodlands Township’s current 2018 service rate per single family home is $10.46 for the weekly services.  For reference and cost comparison,  an annual increase of 3% (the maximum allowed under the current contract), the projected rate in 2020 would be $11.09 - without any new residential households added.  Waste Management’s proposed rate increase to $14.15 represents a 27.6% increase for the inaugural year of the new contract (2020).  Please see Attachment C for an analysis of the rate and impact to the Township Budget, with and without various elements identified.  Attachment D provides background information for solid waste and recycling services in the region and Attachment E provides background information on Household Hazardous Waste and cost options.

With this information, the Board of Directors may:
  • Determine the Renewal Proposal from Waste Management is satisfactory and extend the current contract for a period of 5 years commencing February 1, 2020;  
  • Determine to present a counter proposal to Waste Management and continue renewal negotiations through direction to SWS and staff on the terms of the counter proposal; 
  • Determine the negotiated changes are not satisfactory and direct SWS to proceed with developing the necessary bid documents for solid waste and recycling services.
 
RECOMMENDATION:
Reject the Renewal Proposal from Waste Management dated August 30, 2018, and direct Sold Waste Specialists to draft a Request for Proposals with Scope of Services, Specifications and related bid documents for refuse, yard waste, recyclables and bulky waste collection, disposal and processing services for  future consideration by the Board of Directors.  
Attachments
Attachment A - Waste Management Renewal Proposal
Attachment B - SWS Report and Recommendation
Attachment C - WMgt Cost Analysis
Attachment D - Rate Survey Houston Region
Attachment E - Household Hazardous Waste Information


    

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