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ITEM: DIRECTION REGARDING THE ANNUAL SOLID WASTE CONTRACT
REQUEST: Direction regarding the annual solid waste contract with Waste Management, Inc. of Florida (WMI).
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EXPLANATION: On January 8, 2008, Council approved a contract with Waste Management, Inc. of Florida (WMI) to provide solid waste and recycling collection services for the Village. The initial term of the contract was for seven years effective October 1, 2008 through September 30, 2015. The contract included a provision for one additional renewal period of seven (7) years, effective through September 30, 2022.
WMI has expressed a desire to renew the existing contract, under mutually agreeable terms. As part of the contract, we must notify WMI of our intent to renew or rebid these services by September 30, 2014.
On August 12, 2014, Council directed staff to negotiate a contract with WMI. At the same time, Council directed the Village Attorney to contact the Office of the Inspector General to determine whether a renewal of the existing contract would be lawful or whether the contract must be re-bid. After reviewing the relevant information, the OIG's office has advised that public policy in Florida encourages competitive procurement, but given the fact that the initial contract with Waste Management was competitively bid, and provided the contract terms do not materially change, the OIG's office is unaware of any law that would be violated by renewal of the contract.
Municipality |
Contractor |
(1) Current Residential Unit Rate Per Month |
(2) Current Commercial Rate per CY |
(3)Franchise Fee |
Year Bid |
Year Renewed |
Wellington |
Waste Management |
$12.00 |
$5.96 |
5% |
2008 |
One- Seven Year Renewal Available |
SWA-PBC Service Area #1 (See attached map) |
Waste Pro |
$13.75 |
$3.25 |
3% |
2013 |
None Available |
SWA-PBC Service Area #2 (See attached map) |
Advanced Disposal |
$14.67 |
$3.25 |
3% |
2013 |
None Available |
SWA-PBC Service Area #3 (See attached map) |
Republic Services |
$11.58 |
$3.25 |
3% |
2013 |
None Available |
SWA-PBC Service Area #4 (See attached map) |
Southern Waste System |
$11.91 |
$3.25 |
3% |
2013 |
None Available |
SWA-PBC Service Area #5 (See attached map) |
Southern Waste System |
$17.16 |
$3.25 |
3% |
2013 |
None Available |
Royal Palm Beach |
Republic |
$10.76 |
$6.29 |
6% |
2007 |
2012 |
Riviera Beach |
Waste Management |
$11.38 |
$8.24 |
$100K Per Month |
2011 |
Available in 2016 |
Palm Beach Gardens |
Waste Management |
$8.75 |
$7.15 |
5% |
2005 |
2013 |
Jupiter |
Waste Management |
$11.67 |
$7.62 |
3% |
1998 |
2012 |
Delray Beach |
Waste Management |
$12.72 |
$5.74 |
5% |
2003 |
2013 |
(1) Unit rates are based on single family homes
(2) Rates per Cubic Yard currently paid by businesses in the Village
(3) Franchise fee is a percentage of gross revenue paid by the contractor to the municipality
In an effort to gauge how our current contract with Waste Management, Inc. compares to other communities, we reviewed various aspects of our contract and compared same to other communities. The foregoing table shows the unit costs for comparable contracts for other municipalities as well as the unincorporated area. Our current unit prices are within 5% of other unit prices with the exception of the City of Palm Beach Gardens and The Village of Royal Palm Beach. In general, unit costs for solid waste collection and disposal are a balance between residential and commercial (non-residential) units within a given jurisdiction. Traditionally, commercial rates offset residential costs due to a jurisdiction's potential for revenue generation as a result of commercial customers. In comparing the City of Palm Beach Gardens to Wellington, the total amount of commercial waste generated by the City of Palm Beach Gardens (388,716 cubic yards) exceeds Wellington's by almost 145,000 cubic yards annually. Coupled with a commercial rate almost 28% more than Wellington's, The City of Palm Beach Gardens' commercial rate and commercial volume generate 1.3 million dollars more than Wellington.
Another component of solid waste disposal and management costs is bulk waste and vegetation generated by a jurisdiction as compared to credits for same issued by the Solid Waste Authority. Bulk waste and vegetation generation by Wellington is more than 20% than the amount generated by Riviera Beach and Delray Beach, and over 225% greater than the volume generated by the City of Palm Beach Gardens. This segment of our contract equates to an additional cost of approximately $160,000 borne by Waste Management, Inc., based on per unit credits issued by the Solid Waste Authority. While not necessarily available during our initial bid of this contract, this information is contained in our contract information and would considered by all bidders as part of a bid for solid waste management and disposal services.
Another component that factors into the unit cost for solid waste management and disposal is the relative efficiency of collection as expressed in a community's density or from a collection standpoint, units per mile. Ultimately, when compared to other jurisdictions in the area, Wellington is the least dense when compared to Palm Beach Gardens, Riviera Beach, Delray Beach, and Royal Palm Beach. The lower the density (units per mile), collection is less efficient and more costly.
Total amount of commercial waste generated by the Village of Royal Palm Beach was not available and therefore could not be utilized for comparative purposes.
We are seeking direction on whether to:
1. Renew the expiring agreement under mutually agreeable terms, effective through September 30, 2022
2. Utilize an existing contract (piggyback) listed above; or
3. Rebid the services
Attached is a copy of the proposal provided by WMI whereby no change in price and terms from the existing contract is reflected.
BUDGET AMENDMENT REQUIRED: NO
PUBLIC HEARING: NO QUASI-JUDICIAL:
FIRST READING: SECOND READING:
LEGAL SUFFICIENCY: YES
FISCAL IMPACT: There is no fiscal impact associated with this item until a contract has been awarded or direction to rebid is provided.
WELLINGTON FUNDAMENTAL: Protecting our Investment
RECOMMENDATION: Direction regarding the annual solid waste contract with Waste Management, Inc. of Florida (WMI).