FOR THE COUNCIL MEETING OF JUNE 20, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Utilities
SUBJECT: Agreement for Services for Operations and Management of the Santa Maria Regional Landfill Recycling Park
Description:
The City Council will consider approving an agreement for services with Santa Maria Area Recycling Terminal, LLC for an estimated annual cost of $1,300,000 to operate and manage the Santa Maria Regional Landfill Recycling Park.
Environmental Notice: The Project was adequately covered in the previously adopted Santa Maria Regional Landfill Site Facility Permit Final Second Supplemental Environmental Impact Report (SCH#92031045).
RECOMMENDATION:
Adopt a Resolution approving an Agreement for Services with Santa Maria Area Recycling Terminal, LLC for operations and management of the Santa Maria Regional Landfill Recycling Park.
BACKGROUND:
The Santa Maria Regional Landfill (“SMRL”) Recycling Park accepts unsorted recyclable materials from residential and small business self-haul customers. The SMRL Recycling Park plays a significant role for the City of Santa Maria (“City”) in meeting State-mandated solid waste diversion requirements. The Recycling Park at the SMRL diverts approximately 19,000 tons per year from the SMRL.
Under a long -term agreement since 2009, Santa Maria Area Recycling Terminal , LLC (“SMART”) has operated and managed the Recycling Park, which includes the collection, sorting, transportation, and processing of recyclable materials. That agreement was scheduled to expire on December 31, 2021, and was amended as a month -to-month agreement on January 1, 2022, to ensure SMRL recycling activities continued until a new service agreement was awarded.
In July 2021, the Utilities Department released a Request for Proposals (“RFP”) to solicit proposals from qualified firms to operate and manage the SMRL Recycling Park. The RFP was sent to six qualified firms and proposals were received from two firms: 1) MarBorg Industries (“MarBorg”) and 2) SMART.
2 Proposals from MarBorg and SMART were ranked by a selection committee based on the following criteria as outlined in the RFP:
Overall proposal, completeness, and methodology to address the City’s needs, including overall cost to the City.
Demonstration of firm’s qualifications, background, technical experience, and financial means to accomplish the scope of work.
Relevant experience conducting services of a similar nature in compliance and conformance with California regulations.
The RFP selection committee determined that MarBorg’s proposal met the City’s recycling needs at the lowest cost. City staff presented the results of the RFP before City Council on November 2, 2021. City Council rejected all bids and directed City staff to issue a new RFP requiring standardized proposals more like a traditional bid.
DISCUSSION:
Consistent with City Council direction, City staff released a new RFP on January 11, 2023.
Proposals were received from MarBorg and SMART. Following interviews and vendor facility site visits for both firms, the selection committee determined SMART’s proposal met the City’s RFP criteria requirements at the lowest cost. A summary of the SMRL Recycling Park processing fee analysis is shown in Attachment “A”.
The proposed Agreement for Services (“Agreement”) provides that SMART will operate and manage the SMRL Recycling Park. This includes a ccepting and sorting recyclable materials from self -haul customers, load ing the materials into roll -off containers a nd trailers, and transport ing the materials to its recycling facility on West Betteravia Road.
There, SMART will process and export the materials directly to market or transport the recyclable materials to other facilities for use.
For these services, t he City will pay SMART a processing and transport fee, which includes a base processing fee ranging from $30 to $70 per ton and a transportation fee based on the commodity. The base processing fee will increase annually by two percent each July 1, starting in July 2024. Commodities with value after processing will generate a credit to the City based on appropriate indices or market pricing.
The initial term of the Agreement is five years with two optional five -year extensions (renewal terms). Either party may opt out of the Agreement with a one-year written notice.
The complete Agreement is shown in Attachment “B”.
Alternative(s)
The City Council may:
1. Reject all proposals and direct City staff to issue a new RFP for Recycling Park operations and management. This will result in additional staff time and costs for issuing a new RFP. Furthermore, it is not anticipated that a new RFP will result in additional proposals from proposers beyond the two firms that have already submitted.
3 2. Direct City staff to dispose of the recyclable materials from self-haul customers in the SMRL. This will inhibit the City’s ability to meet State -mandated diversion requirements.
Fiscal Considerations
The estimated annual cost of the Agreement is $1,300,000. This cost will vary with the quantity and type of recyclable commodities received, as well as the market value of the commodities. The Solid Waste Disposal Enterprise Fund has adequate funding for this Agreement.
To continue the viability of the Solid Waste Disposal Enterprise Fund, City staff is currently evaluating all solid waste disposal fees to ensure sufficient revenues are collected to process the various commodities. City staff will bring an item for Council consideration at a future meeting regarding any rate adjustments necessary based on that evaluation.
Impact to the City
Approval of the Agreement enables the City to continue to meet its State-mandated solid waste diversion requirements.
Impact to the Community
Residents and businesses can continue maximizing their recycling efforts at the SMRL Recycling Park.
ATTACHMENTS
Attachment “A” – SMRL Recycling Park RFP Processing Fee Analysis_2023-06-20 Attachment “B” – Agreement_Operation and Management SMRL Recycling Park_2023-06-20