Miramar commission mtg 3 20-12 solid waste disposal


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  • Key elements of the RFPHow they were structured to protect the CityAchieve the leadership objectives
  • Miramar commission mtg 3 20-12 solid waste disposal

    1. 1. Temp. Resolution No. R-5103 Solid Waste Disposal RFPApproval of Top-Ranked Firm to Commence Negotiations OFFICE OF OPERATIONAL SERVICES PUBLIC WORKS DEPARTMENT Commission Meeting March 20, 2012 @ 6:00 p.m.
    2. 2. Discussion Topics• Presentation team• Overview• Why issue an RFP• Key RFP elements• Procurement process• Recommended next steps• Process Value
    3. 3. Presentation Team• Vernon Hargray – ACM Operational Services• Thomas Good – Public Works Director – Resource Recovery Board – Technical Advisory Committee (RRB/TAC) representative for over 10 years w/ 4 years as Chair• Randy Cross – Procurement Director – National Institute of Government Procurement• Sandy Gutner, P. E. – President Value Added Consulting – Over 25 years solid waste management w/ 6 years as the RRB and Broward County Solid Waste Consultant
    4. 4. Overview• City enters into an ILA with Broward County for solid waste disposal services in 1986 becoming a “contract community”• Other Cities executed same ILA creating the Broward Solid Waste Disposal District (BSWDD) dependent to the county• Broward County issued bonds to support the BSWDD and required all contract communities to deliver wastes to system to ensure revenue stream (Flow Control)
    5. 5. Overview (cont.)• The Interlocal Agreement (ILA) for solid waste disposal is set to expire in 2013• City Manager recognized the City had a window of opportunity to engage in free market options that could return greater benefits to the City• City Commission voted to not sign the ILA on November 26, 2010 and to proceed with its own RFP for disposal services
    6. 6. Let’s Review• 2010 Proposed Service Agreement would have exposed City to many undefined risks and liabilities: – Pay for capital upgrade/replacements – Cover increasing costs for treatment of ash landfill runoff – Make up lost revenues due to changes in law – Increase in property taxes• No control on District programs and how they are funded• Potential exists for disproportionate costs to Contract Communities
    7. 7. What Could’ve Happened? Service District Miramar Agreement Fee Program Tipping Expenses Fee $53.19 $12.00 $65.19 to To To $110.02 $30.17 $140.21Low range is a conservative firm price beginning 2013 and high range is potentialcost increase (risks and pass-thru’s) throughout 10-year term
    8. 8. Also Considered • The private disposal facilities no longer require public obligation to share in risk after July 2013 • 2.5 year window of opportunity for market competition • Commission philosophy to competitively bid services Hence, City deferred ILA until results of an formal competitive processNote: Broward County and Ft. Lauderdale voted down the ILA Extension and ServiceAgreement
    9. 9. Disposal RFP Participation• BCCMA Coconut Creek (1/13/2011)• Stakeholder Meeting Miramar (1/27/11) – All City Managers throughout Broward County invited to participate; – Total of 16 participating agencies: • Lauderdale by-the-Sea, Hallandale Beach, Coconut Creek, Coral Springs, Margate, Broward County, Davie, Southwest Ranches, Oakland Park, Sunrise, Fort Lauderdale, Weston, Deerfield Beach, Plantation, Cooper City, and Miramar• RFP Review by Stakeholders (3/23/11)
    10. 10. Leadership Objectives for RFP• Minimize Risks and Liabilities• Competitive Rate Structure for Residents• Uninterrupted Waste Disposal Services at expiration of ILA• Environmentally Sound Solid Waste Management• Service Reliability• Opportunity for Market Participation
    11. 11. RFP HighlightsRFP Element OverviewScope Requested Disposal services or Processing, Transfer and Disposal.Term 5 year initial term, up to (3) 5 year renewals.Technical Proposal • Technical and financial qualifications • Project technical approach • Business termsCost Proposals • Disposal (including receiving) • Revenue Sharing (optional) • Maximum Inflation (optional)
    12. 12. Technical Proposals• Team experience• Financial qualifications• Technical Approach – Direct disposal services – Receipt, Processing and Disposal – Existing or Proposed facilities – Transition plan, if facility not existing• Acceptance/Modification of RFP Business Terms
    13. 13. General Business Terms• Scope of service• Contract Term• Project Security• Transition period responsibilities• Addresses Unusual Circumstances
    14. 14. Cost Proposals• Disposal charges – Service Fee ($/ton received)• Inflationary Adjustments – Bureau of Labor Statistics index, specified in RFP – RFP allowed for optional reduced %. (% of index) – Option for maximum inflationary adjustment• Revenue Sharing – $/ton of waste delivered – Not based on performance or market pricing
    15. 15. City Protections
    16. 16. Unusual Circumstances• If Unusual Circumstances result in Contractor total costs to increase > 10%, Contractor may request relief.• Applies to total cost, not to individual cost items (e.g. fuel or labor)• Contractor must demonstrate cost increase.• City is not obligated to grant relief.
    17. 17. Project Guarantee• Guarantees performance of all Contractor’s obligations and responsibilities.• If Contractor fails to perform, Guarantor is obligated to perform.• Guarantee by corporate parent company, or all corporate parents, if Joint Venture.
    18. 18. Irrevocable Letter of Credit• Issued by bank.• $ value equal to 6 months of total disposal charges.• If facility not available by July 2013, City can draw on the LOC to cover the difference between proposed cost and actual cost.• LOC use can last for a long time
    19. 19. Irrevocable LOC ExampleAssume Proposed Cost is $40/tonAssume Miramar disposes 65,000 tons/yearLetter of Credit Value = 32,500 tons x $40/ton = $1.3MIf Actual Cost = $50/ton Cost if proposed facility not available July 2013Difference $10/ton Amount eligible for LOC drawLOC available 2 years [$1.3M ÷ 65,000 ton/yr] ÷ [$10/ton]
    20. 20. Conditions Precedent Concept• Assures City that contractor is fully able to deliver service before City is fully committed• If Conditions can not be met, allows City to seek alternatives.
    21. 21. Conditions Precedent in RFPContractor must provide:• Evidence that all rights, permits and approvals to provide the Disposal Services• Executed Project Guaranty Agreement• Executed Irrevocable Letter of Credit
    22. 22. Milestones and Check Points Milestones and Check PointsProposals Negotiat Agreement Contract Conditions Notice-to- RankingReceived e Agmt on Terms? Date Precedent Proceed Met? Yes No No 2nd Ranked Firm
    23. 23. RFP Process Timeline• RFP formally issued on March 9th• Pre-proposal conference held on March 28th• RFP closed on June 2nd• Three proposals received – Wheelabrator Technologies – Sun Recycling and Bergeron Environmental-Joint Venture – Sun Recycling and Bergeron Environmental-Joint Venture (Alternate Proposal)* * Alternate geared primarily toward C&D disposal.
    24. 24. Wheelabrator Proposal Waste-to- Energy Ash Landfill
    25. 25. Sun/Bergeron Proposal Waste-to- Energy Ash Landfill Recycle 25% Other
    26. 26. Evaluation Team Members• Evaluation team charged with actual review and scoring of proposals.• Evaluation Team Members represents a diversity of communities and decision makers: – City Manager, Coconut Creek; – Public Works Director, Hallandale Beach; – Public Works Director, Oakland Park; – Intergovernmental Affairs Manager, Davie; – Finance Director, Miramar.
    27. 27. Evaluation Criteria• Consists of three categories; – Qualifications = 20 points – Technical = 35 points – Price = 45 points• Proposers must receive 65 percent of max points for technical and qualifications (each) to have sealed prices opened;• All proposals met technical/qualifications 65 percent requirements.
    28. 28. Best & Final Offer• Both proposers to submit best and final offer• Prices to be based on a single per-ton cost – Simplified price evaluation process – Easy to recognize costs – Recognizes economies of scale• Proposers were accorded fair and equal treatment
    29. 29. Price Tabulation Disposal Revenue Proposer % of CPI Price/Ton Share/TonWheelabrator $52.50 $0.00 100%TechnologiesSun/Bergeron $45.25 $2.00 100%
    30. 30. 5-Year Price Comparison Year 2013 2014 2015 2016 2017Wheelabrator $52.50 $52.50 $52.50 $52.50 $52.50Fee/tonSun/Berg. $43.25 $43.25 $43.25 $43.25 $43.25Fee/tonDifference $9.25 $9.25 $9.25 $9.25 $9.25/tonDifference @ $601,000 $601,000 $601,000 $601,000 $601,00065,000 ton/yrTotal 5-Year Difference for Miramar = $3.01M
    31. 31. Final Evaluation• On December 12, 2011 the Evaluation team completed its review and scoring for the proposals: – Wheelabrator disposal – Sun/Bergeron receiving and disposal• City Procurement Department completed final tabulation;• Evaluation team ranks; – Sun/Bergeron = No. 1; – Wheelabrator = No. 2
    32. 32. Final RankingDisposal of Solid Waste Sun/Bergeron WheelabratorServicesProposal RankingTotal 447.8 426.2Ranking 1 2
    33. 33. Example of Items to Negotiate• Time to meet Conditions Precedent• Changes to disposal locations• Reporting requirements• Facility access• Logistical and administrative details
    34. 34. Contract Negotiation Begins ClockMarch 20, 2012 15 months July 2013 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13Commission Commission ApprovesApproves 3/12 Contract 7/12 9+ months Negotiate Conditions Notice- Agreement w/top Precedent to- on Terms? ranked Met? Proceed No No Yes Negotiate w/next ranked
    35. 35. Proposed District Fee Offered in 2010 Compared to Sun/Bergeron and Wheelabrator Year 2013 2014 2015 2016 2017 TOTAL ILA Proposed $65.19 $67.80 $70.51 $73.33 $76.26 Fee/ton* Sun/Berg. $47.25 $47.25 $47.25 $47.25 $47.25 RFP Fee/ton** Savings @ $1.12M $1.34M $1.51M $1.70M $1.89M $7.56M 65,000 ton/yr Wheelabrator $56.50 $56.50 $56.50 $56.50 $56.50 RFP Fee/ton** Savings @ $0.56M $0.73M $0.91M $1.09M $1.28M $4.57M 65,000 ton/yr* Proposed fee increases conservatively assumes risks and pass-thru’s at 4% per year** Approximately $4/ton for ancillary services
    36. 36. Competitive Inclusive Transparent Fair
    37. 37. Recommendation• Approving the ranking of the solid waste disposal proposals and authorize negotiation with the top-ranked firm, Sun/Bergeron, and should negotiations be unsuccessful, begin negotiations with the second ranked firm, Wheelabrator.
    38. 38. Questions……