CITY COUNCIL STAFF REPORT
Meeting: May 2, 2023
Subject
Consider a Request for Proposals (RFP) for garbage and construction and demolition (C&D) debris disposition services, including solicitation of options to process garbage for recovery of organic and other recyclables.
Recommended Action
Approve the staff recommendation regarding the forthcoming Request for Proposals for garbage and construction and demolition debris disposition services, by incorporating the solicitation of options to process garbage for recovery of organic and other recyclable materials.
Reason for Recommendation
Executive Summary
The City contracts separately for waste hauling and for waste disposal. A long-term hauling contract is in place with Recology. The disposal contract is ending its term and needs to be re-established. Neither contract directly effects the City of Cupertino's budget as rate payers (residents and businesses) pay for the associated costs. The City’s role is to set standards, establish contracts for the service, and monitor performance.
Staff is recommending increasing the focus of the disposal contract on environmental sustainability, including recycling and recovery of materials, in alignment with City policies such as the Climate Action Plan (CAP). With this focus, the RFP will be structured to include evaluation of submittals on the overall ability of the company to meet sustainability goals.
The RFP will solicit proposals for garbage disposal and C&D debris processing and disposal services, as the City’s current agreement expires in November 2023 (with an option to extend through November 2025). The City will also solicit cost proposals to incorporate garbage processing through a Material Recovery Facility (MRF).
Staff anticipates that cost of disposal will increase because market rates currently exceed the City’s existing disposal contract. Directing garbage to a MRF would add to the anticipated cost increase but would result in more useful materials being recovered for composting and recycling, and less garbage being sent to landfill. Sending garbage to a MRF would complete CAP 2.0 action item W 1.2.
The anticipated extra cost to send the City’s garbage to a processing facility would vary for different rate categories, but preliminary estimates suggest that it could result in an estimated 7%-15% ($5 - $8/month) increase in the cost of garbage service for most single-family ratepayers. Processing garbage from all sectors could increase the City’s overall diversion rate from around 58% to as much as 80%.
Staff will incorporate Council input into the evaluation criteria for the RFP and will return to Council following the RFP with a recommended award of contract.
Current Arrangement
Garbage, organics, and recyclable materials generated in City and placed into carts, bins, or rented debris boxes are collected by Recology South Bay under a 10-year franchise agreement that was approved by City Council in December 2020. The franchise agreement covers collection of various materials as well as processing of organics and recyclables. Garbage and C&D debris, on the other hand, is currently collected by Recology and is taken by Recology trucks to Newby Island Landfill under a 35-year agreement between Republic Services and the City. This agreement will expire on November 20, but the City has secured an option to extend the term up to November 20, 2025. The City needs to establish a new arrangement for disposition of these materials before the end of the extended agreement.
The City’s garbage (materials placed in gray carts or bins) currently undergoes no processing for recovery of materials, meaning anything placed into a gray garbage cart or bin is collected and taken directly to be deposited into the landfill. This arrangement is for garbage only. The C&D debris boxes collected by Recology are also taken to Newby Island Landfill, but if a debris box on visual inspection appears to have mostly recoverable materials, (such as metals, wood, or concrete), as determined by Newby Island staff, those materials will be diverted to Newby’s C&D processing line to be sorted for recovery.
Cupertino residents and businesses generate around 15,000 tons of material that goes to landfill per year, and that is expected to increase as the City’s working and residential population increases. The C&D debris tons can vary widely depending on the size and number of construction projects, but in the last three years the number of tons to landfill from Recology-collected debris boxes ranged from 1,000 – 3,000 tons. The diversion rate for C&D debris taken to Newby Island by Recology was around 66% in calendar year 2022.
As noted above recyclables (blue bin) and organics (green bin) collected by Recology trucks are taken to different locations and are outside the scope of the proposed RFP. For context, however, based on tonnage reports from Recology for 2022, considering all the materials collected from regular residential, multi-family, and commercial accounts (garbage, organics, recyclables), the overall diversion-from-landfill rate was approximately 58%.
Considerations for the Next Agreement(s)
Options for New Services and Agreements
To provide Council the full suite of options to consider, staff is planning to issue an RFP for the following services:
Landfill disposal
C&D debris processing and disposal
Garbage processing for recovery of organics and other recyclables Proposers may submit proposals to provide one, two, or all three of the requested post-collection services.
To ensure that all options are considered, the RFP will be structured to allow both public and private entities to respond. Information regarding distances and added transport cost for the collection trucks and subsequent transfers to any additional facilities will be requested from all responders.
Depending on the desired services, materials may be managed under agreements with more than one facility.
C&D Debris Diversion
Under the City’s franchise agreement with Recology, construction projects in Cupertino have two options for handling C&D debris:
Rent Recology debris boxes: These are serviced by Recology, and contents are taken to Newby Island where some sorting and recovery happens.
Self-haul: The project’s licensed construction and demolition contractor can collect and remove debris as part of a total service offered by that contractor. Mixed construction materials must be taken to a mixed recovery facility that has achieved third party verification consistent with facility-average recycling rates as recognized by the US Green Building Council.
Construction projects are required to provide their C&D debris disposal weight tags to City staff and calculate the diversion rate achieved by the project. Per CalGreen and City Municipal Code 16.72.040, construction projects are required to divert at least 65% of their materials.
To increase the diversion achieved by construction projects, staff recommends considering directing Recology-collected C&D debris to a high-performing facility where more of the materials will be processed for recovery.
Processing vs Not Processing Garbage
The end of the current agreement presents an opportunity to decide between continuing with the same model of direct disposal to landfill or to consider the option of processing the garbage at a MRF to recover organics and other recyclables that were thrown away into a gray garbage cart or bin. Depending on the MRF and the amount of recoverable material in the gray cart or bin, between one third to two thirds by weight of the incoming garbage might be recovered, reducing the overall waste tonnage going to landfill by 5000 to 7000 tons. That could increase Cupertino’s overall diversion rate from the 58% mentioned above to 72% – 80%.
Much of the diverted material would be organics, which generate methane in the landfill environment. CalRecycle notes that 20% of the methane generated in California comes from landfills. Because processing would result in fewer organic materials reaching the landfill, as well as recovering other marketable plastic, glass, paper, and metal, incorporating a MRF for processing would align with the City’s adopted Climate Action Plan (CAP) 2.0 and would complete action item W1.2.
How Well Does Cupertino Sort Materials Before Collection? As determined by community-wide waste characterizations done in 2018 and 2019, roughly one half (by weight) of residential and commercial garbage collected in Cupertino is food scraps and other organics. This is despite messaging, education, and site visits since 2011 to encourage residents and businesses to put food scraps and food-soiled paper into the green bins and carts. Current California State regulations and corresponding local municipal code now require all generators of organic materials to keep them out of the landfill. However, regular visits to businesses and lid-flips in residential areas continue to find food scraps, food-soiled paper, and other organic materials in the garbage. Additionally, recoverable recyclable containers and paper make up 5% of single-family garbage, 19% of multifamily, and 21% of commercial garbage.
Processing Garbage and the Cost Impact to Ratepayers
Additional processing of solid waste to remove additional recyclables and compostables will increase the cost of service to ratepayers (residents and businesses). The cost of disposal is just one part of the overall equation in determining the garbage service rates for Cupertino’s residents and businesses. A preliminary evaluation of cost for sending garbage to a MRF could result in single-family residents with 32-gallon garbage service paying an additional $5 - $8/month or about 7% to 15% more than they would if the garbage was sent directly to landfill without processing.
In 2020, a survey of residents was conducted on topics relating to garbage, organics, and recyclables collection services. One question asked about the willingness to pay more for materials to be sorted after collection. Results showed 43.2% of people would be willing to pay more for that service, 44.3% said they would not, and 12.4% did not know or did not answer.
RFP
The RFP currently being drafted would seek proposals from service providers that can provide one or more of the requested services: solid waste disposal, C&D processing services, and garbage processing. The City’s primary goal for the RFP process is to select a provider(s) that will deliver high quality and cost-effective service, maintain competitive costs, and support the City’s environmental, climate, and regulatory compliance goals. All proposers must provide a proposal for services in accordance with specific RFP content and submittal requirements.
The RFP document will contain the following: background on the City’s current services and objectives; an overview of the RFP; a description of the RFP’s organization; the RFP schedule; RFP conditions and submittal requirements; proposal evaluation criteria; and applicable attachments such as forms for proposers’ costs and operational information. A draft of the future post-collection services agreement will be included to provide proposers with a clear understanding of the roles, responsibilities, rights, and obligations of the contractor and the City during their proposal preparation, and to serve as a starting point for contract negotiations with selected proposer(s).
The City anticipates that this contractor procurement process will involve soliciting and evaluating proposals, entering into negotiations with one or more proposers, executing a contract with the selected contractor(s), and commencement of services no later than the end of the current disposal agreement, as described above.
The City’s objective in evaluating proposals will be determining the proposal(s) that offer the best overall value to the City and its residents and businesses. The process uses a total value approach, rather than lowest cost as the sole criteria. Examples of factors that may be considered include but are not limited to: responsiveness to the RFP, company qualifications, technical approach, facility location, capacity, and accessibility, regulatory compliance, diversion certifications, proposed cost of services, acceptance of key terms of the future agreement, greenhouse gas emissions and vehicle impacts of transfer/transport of materials, and other criteria to be specified in the RFP.
Communication during the RFP process must adhere to relevant competitive bidding requirements and Cupertino Municipal Code section 2.100.030 (p)(5), which states that Persons responding to requests for proposals are limited to direct conversation or correspondence with the official or department specifically designated to receive such information, as identified in the RFP in order to not obtain an improper competitive advantage.
Next Steps
Currently staff plans to seek proposals for the following services:
Landfill Disposal: The City intends to enter into long-term contractual arrangements for the continued disposal of solid waste.
C&D Processing: The City intends to enter into long-term contractual arrangements for C&D processing at a high performing facility that has proven effective in meeting or exceeding minimum CalGreen and City ordinance requirements for material recovery.
Garbage Processing: The City intends to evaluate and consider garbage processing to further reduce the tons of recoverable materials that are landfilled annually. The City is interested in receiving proposals that will allow it to evaluate the enhanced diversion and the rate impact that would result from processing.
Staff will return at a future date to present City Council with recommendations for award based on received proposals, overall benefit to the City, and the results of negotiations.
Sustainability Impact
Routing garbage through a MRF for processing is a recommended climate change mitigation strategy identified in the City’s adopted Climate Action Plan (CAP) 2.0 under action item W1.2.
Fiscal Impact
The City manages waste disposal on behalf of the ratepayers (residents and businesses). Costs are incurred by the ratepayers and not the City. There will not be impact to the City’s General Fund from these changes.
Any change in the cost of disposed or processed tons collected in Cupertino will be factored into the rates paid by the customers. The City’s current rate per ton to send garbage to Newby Island Landfill is $46.53/ton, and it adjusts annually per CPI. This is somewhat below the current per-ton market rate for landfills, so even without processing, the cost of disposal will likely increase.
California Environmental Quality Act (CEQA)
No CEQA determination is required at this time.
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Prepared by: Ursula Syrova, Environmental Programs Manager Reviewed by: Chad Mosley, Interim Director of Public Works Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Godbe Research, October 2020. 700 respondents for +/- 3.67% margin of error at the 95% confidence level.