Mayor and Council Barry Azevedo, Solid Waste and Environmental Engineer Award of Contract Eastside Curbside Collection Services

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1 Sa 1~A ABBOTSFORD Report No. ENG July 11,2012 File No: COUNCIL REPORT Regular Council To: From: Subject: Mayor and Council Barry Azevedo, Solid Waste and Environmental Engineer Award of Contract Eastside Curbside Collection Services RECOMMENDATIONS 1. THAT Report No. ENG , dated July 11, 2012, from the Solid Waste and Environmental Engineer, regarding Award of Contract , Eastside Curbside Collection Services, be received; 2. THAT Contract , Eastside Curbside Collection Services, be awarded to Halton Recycling Ltd. doing business as Emterra Environmental (Emterra) in the amount estimated at $6,217, 000 (excluding HST) over a five year term, subject to satisfactory negotiations on final contract terms; and 3. THAT the Mayor and Corporate Officer be authorized to execute all documents related to this matter.. BACKGROUND Currently, BFI Canada Inc. (BFI) is the contractor on the eastside of the City that provides weekly curbside collection of recycling and garbage to approximately 7,000 single-family residences, as well as bi-weekly collection of yard waste across the City to approximately 25,000 single family residences. City collection crews provide curbside collection of recycling and garbage to approximately 18,000 residences. The recycling and garbage contract was awarded to BFI in 2005 and the yard waste collection contract was awarded to BFI in Both contracts were awarded after an open, competitive process, on the basis of BFI having the lowest tender price. Both contracts were amended in December 2011 to extend the contract end dates to August 31, 2012, with the option to extend to December 31, 2012 by notice to the contractor. The notice of extension to December 31,2012, was provided to BFI by letter dated June 25,2012. A new contract is required for the eastside collection service starting January 1, The City is also planning to start weekly City-wide compostable waste collection on January 1, 2013, along with City-wide bi-weekly collection of garbage and City-wide weekly collection of recycling. The Request for Proposals (RFP) for the new eastside collection service reflected these changes and combined recycling, garbage, and compostable waste (yard waste and food waste) collection into one contract. The RFP also revised the City operations collection area and the contractor collection area so they are approximately equal in numbers and geographical area and providing full collection of all three streams within their respective areas. The RFP also removed the tipping fees from the contract. The RFP was for a five year term with an optional 2 year renewal term. The RFP could not be issued until re-zoning approval of the new composting facility was provided by the Minister of Agriculture (received March 2012) and the property was subsequently rezoned by the City (Council approved April 2012).

2 Report No. ENG Page 2 of 4 ANALYSIS The RFP was posted on BC Bid on May 4, 2012, and closed on June 20, Four proposals were received and reviewed for completeness before being evaluated by an evaluation team. The evaluation team consisted of six staff from Engineering, Operations, Purchasing and Finance. A copy of each proposal was provided to each evaluation team member for independent review followed by a meeting to discuss and determine a consensus score for each proposal. The evaluation criteria from the RFP were used to direct the evaluation team in its development of a consensus score for each proposal. A summary of the evaluation is provided below. The proposal cost and points were evaluated over five and seven year terms. Further details on the evaluation are provided in Appendix A. Summary Of Evaluation for 5 and 7 Year Terms Estimated Total Points Proponent Cost Over Awarded Name 5 YrTerm 5 YrTerm (7 Yr Term) (7 Yr Term) Comments Emterra -relevant and substantial experience -additional trucks available $6,217,000** CNG* lowest cost fuel option ($8,887,000**) (95.3) -detailed transition plan -two previous clients not satisfied with service -lowest cost SFI -relevant and substantial experience -same management for Abbotsford contract -local business so familiar with area and programs $6,677, incumbent so no transition issues ($9,588,000) (94.0) -CNG* lowest cost fuel option -additional trucks available if required -previous/current clients satisfied with service -second lowest cost Smith rite -relevant corporate experience, but limited $9,356, biodiesel lowest cost fuel option ($13,506,000) (71.8) -satisifed previous/current client -high cost -relevant corporate experience, but limited Remple $10,670, not clear on additional trucks available Disposal ($15,475,000) (64.6) -satisfied previous/current clients -highest cost *CNG = compressed natural gas **The Emterra estimated prices were corrected upwards during the evaluation to reflect a more representative future inflation model with respect to the use of historical Statistics Canada indices, and are therefore higher than the estimated prices in the Emterra proposal.

3 Report No. ENG Page 3 of 4 The RFP evaluation criteria provided 40 points for technical criteria and 60 points for cost. Technical evaluation criteria included consideration of experience, resources and technical understanding and approach. All of the four proponents are considered capable of providing the service. However, because Emterra has the lowest estimated price and because past service issues are not expected to apply during the service term, the Emterra proposal is considered to provide the best value to the City. It is therefore recommended that Emterra be awarded the contract subject to satisfactory negotiations which would include, but not be limited to, negotiations on penalty terms. FINANCIAL PLAN IMPLICATION The cost evaluation is based on the unit rates in each proposal and projected future number of homes serviced. Due to the length of the contract term, proposals were required to take into account inflation either by stating the increased rate for each year or by providing an equation linking the future increases to Statistics Canada indices, such as the Consumer Price Index (CPI). Only the Emterra proposal provided an equation linking future prices to Statistics Canada indices. The SFI, Remple, and Smithrite proposal prices are based on fixed unit rates with set inflation amounts for each year. The Emterra proposal price is based on fixed unit rates for 2013 with the inflation amounts for 2014 onwards calculated by using the previous history of increases for the relevant Statistics Canada indices. Unit prices in the proposals cannot be compared to the current contract unit prices due to several significant scope changes discussed earlier. Compostable waste tipping fees are notably less than garbage tipping fees, therefore the more garbage that is diverted to compostable waste, saves the City money. The amount of diversion is assumed to be low in the first year of the program and therefore the real cost savings are not expected until the second or third year of the program. The Emterra proposal will not result in a change in user fees; however, any tipping fee increases by Metro Vancouver at the Matsqui Transfer Station will result in a corresponding increase in the solid waste budget and user fees. Appendix S provides a comparison of 2012 solid waste utility rates for local and regional municipalities. The comparison shows that the City's 2012 solid waste utility rate is one of the lowest. The 2013 rate for the City is similarly expected to be one of the lowest. STRATEGIC DIRECTIONS The new service contract is a key part of the curbside collection of compostable waste which supports several strategic goals including reducing the City's environmental impact and GHG emissions. Selection of the lowest cost proposal also supports the goal of fiscal sustainability. The recommended proponent's use of CNG further supports the City's goals regarding environmental impact and GHG emissions. COMMUNICATION PLAN An in-depth communication plan for the curbside collection of compostable waste is being developed in consultation with the Corporate Communications and Marketing Division as described in Report No. ENG

4 Report No. ENG Page 4 of 4 SUMMARY Four proposals were received to provide curbside collection services for the eastside of Abbotsford starting January 1, All four proponents are considered capable of delivering the service. The Emterra proposal has the lowest price and sufficient technical points to give it the highest score. It is therefore, recommended that Emterra be awarded the contract, sub'ect to negotiation of final contract terms, for an estimated $6,217,000 for a fiv7a p riod starting January 1, 2013, with an optional renewal term of 2 years. ~/~. Jim G Cion, P.Eng. Gene al Manager of Engineering & Re.01lafUtilities Tracy Kyle, P.En. Director of Water BNsv

5 Appendix A Further Details on Evaluation of Proposals for RFP As noted in the evaluation table provided in Report No. ENG , the Emterra proposal has the lowest cost and the highest total points. The BFI proposal has the second lowest cost and the highest technical score, due to being the incumbent, having excellent experience, and having consistently good references. BFI provides the greatest confidence that the new service would be started with the least amount of service issues. Emterra would have received more evaluation points, but references from two municipalities, which were former clients of Emterra's, were not positive. This is a result of Emterra being awarded curbside collection contracts around the same time for three separate municipalities. Emterra did not initially have the necessary equipment to adequately service all three of these contracts, and service to all three municipalities suffered until resource issues were addressed. This is not expected to be an issue at this time, but the score for Emterra reflects the problems experienced by these municipalities. Other references for Emterra, particularly for more current references, were satisfied with the service received. Other Service Options within Proposals The RFP included pricing for other service options, including automated waste collection and maintaining garbage collection in bear-resistant containers in the bear-resistant container area. In addition, some proponents provided alternate options, including bi-weekly collection of recycling. Based on the pricing received for these service options, none of these options are recommended for implementation at this time. These options are discussed further in Appendix A-1.

6 APPENDIX A-1- Summary of Analysis of Other Service Options Option Source Analysis Recommendation Automated waste RFP Lower unit collection rates for Do not implement collection for all collection but high capital cost in new contract. three waste $3,000,000 (for contractor area only). streams across Approximate 25 year payback time collection area (direct costs only). Direct savings are insufficient to support large capital cost for containers. More analysis is required of indirect savings and opportunities. Maintaining bear- RFP Current proposed collection program Do not implement resistant for bear-resistant container area for in new contract. containers for 2013 is for current bear-resistant garbage in bear- containers (currently used for garbage) resistant to be used for compostable waste. container area Garbage will be collected in regular resident-owned garbage cans. Option would be to purchase additional bearresistant containers for garbage for all 205 residences in bear-resistant container area, at an estimated cost of approximately $33,000. There is no cost advantage to option with respect to collection. If resident is separating compostable waste into bear-resistant container, garbage will not be as attractive to bears and therefore a req ular container should suffice. Bi-weekly Proposal Current proposed program for 2013 is Do not implement collection of for weekly collection of compostables in new contract. recycling and recyclables, and bi-weekly collection of garbage. Some proposals provided an option to decrease recycling collection from weekly to biweekly and thereby decrease collection costs. This is a trade-off between convenience and direct costs. The bi-weekly option does not provide incentive to recycle and therefore could increase garbage tipping fees. Reconsider once new program is wellestablished, particularly when reconsidering introduction of automated waste collection.

7 Appendix B: 2012 City of Abbotsford Solid Waste Utility Rate Comparison to Other Municipalities Location (collection frequency is weekly unless footnoted) recycle only Single Family Residential Annual Solid Waste Utility Rate per Unit Extra one one two one two Garbage two garbage garbage garbage adjusted for garbage garbage Bag garbage container, container, containers, comparable container containers, Sticker - containers recycling recycling, recycling, service to limit & recycling & one time & recycling & yard yard & food yard & food COA recycling yard waste d cost waste waste waste Corporation of Delta h $ $ $7.50 City of Port Coquitlam Cfg (automated) $ $ $ City of Langley $ $ $2.20 City of Abbotsford" $ $ $2.00 City of Richmond 8 $ $ $2.00 City of Victoria/CRD $ $ $3.50 City of Kelowna (automated) $ $ $ $2.50 City of Vancouver 8 (automated) $ $ $ $2.00 District of Hope $ $ $2.40 City of New Westminster f (automated) $ $ $2.50 City of Pitt Meadows $ $ $5.00 Township of Langley $ $ $3.00 City of Chilliwack $ $ $ $1.25 City of Surrey $ $ $2.75 District of Mission $ $ $3.00 District of Maple Ridge $68.15 $ City of North Vancouver $ $ $3.00 City of Coquitlam $ $ $3.00 City of Burnaby (automated) NOTES: a) Yard waste collection is bi-weekly. b) Recycling and yard waste/food waste collected bi-weekly. c) SF recycling is paid out of general revenue. Estimated by averaging SF recycling collection & processing fees for other MV municipalities. d) Other municipal rates have been adjusted for approximation of Abbotsford collection system, including frequency of collection, container volume allowance, streams collected. e) 10% reduction if paid on time. f) Garbage and Recycling are collected bi-weekly. g) Compostables are collected biweekly during winter half of year and weekly during summer half. h) No tipping fee is paid at landfill. i) All fees are paid out of general revenue