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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson, City Administrator
Subject: Resolution of the Mayor and
Common Council of the City of San
Bernardino authorizing the Mayor to
execute Services Agreement with R3
Consulting Group, Inc., for assistance
concerning expansion of commercial refuse
services provided by franchised refuse
haulers
Dept: City Administrator's Qffiie. A L
Date: June 11, 20Q R 1 G 1 N
MICC Meeting Date:
Synopsis of Previous Council Action:
Recommended Motion:
1. Adopt resolution;
2. Authorize the Director of Finance to amend the FY 2004-05 Budget to include
anticipated revenues and expenses as indicated in this staff report.
~ d ~ (tJl~A-J f;O r;)
Signature
Contact person: I=r..rt Wil"nn
Phone:
5122
Supporting data attached:Staff report resolution Ward: all
FUNDING REQUIREMENTS: Amount: No net cost to the Refuse Fund; see staff
report
Source: (Acct. No.)
(Ar.r.t n~:u~r.rirtinn)
Finance:
Council Notes:
_T2..f::;--o:J ~-2..06
Agenda Item No. ~
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STAFF REPORT
Subiect:
Resolution authorizing the Mayor to execute a Services Agreement with R3 Consulting
Group, Inc., for assistance concerning expansion of commercial refuse services provided
by franchised refuse haulers
BacklUound:
As part of the FY 04-05 budget process, various options have been evaluated for
increasing revenues to the General Fund. One area under consideration has been the
City's possible expansion of franchised commercial refuse services.
In the Spring of 2004, R3 Consulting Group was retained to provide an analysis
concerning options to enhance revenues in this regard. One option identified was to
assign all new commercial refuse customers to a franchisee. The franchisee would then
be required to pay the City a fee that would equal an estimated two (2) times the gross
annual revenue from these new commercial customer accounts. R3 estimated that this
option could provide the City with additional revenue of over $1 million annually, with
no impact on current employees or operations. This revenue would provide a direct
benefit to the General Fund.
As an alternative, R3 was asked to evaluate whether or not a similar financial benefit
could be realized through an expansion of the City's in-house commercial refuse
operation. That evaluation is attached (Attachment I). In summary, though that option is
available, it contains risk and will not provide the same level of financial benefit to the
General Fund.
Staff is recommending that the Mayor and Council consider assigning all new
commercial customers to a franchisee. The franchisee would be selected through a
competitive proposal process. At staff's request, R3 submitted a proposal to provide
assistance to the City through this process. Consultant services will include drafting the
RFP and franchise agreement, conducting pre-proposal conferences and proposer
interviews, evaluating the proposals, negotiating franchise terms, and presenting all
results and recommendations to the Mayor and Common Council.
Upon approval of this item, the RFP process will be initiated. It is anticipated that the
process will take 60-90 days before a recommendation can be made to the Mayor and
Council concerning award of a franchise.
Financial Impact:
The estimated cost for R3's services for Tasks I - 5 of the Scope of Services is an
amount not to exceed $48,070. Task 7 (Transition Planning and Implementation) may be
added if the franchise is pursued, at a cost not to exceed $10,000. The total cost for R3's
services will be funded through a $20,000 proposal fee charged to each proposer. Any
balance of consultant costs would be reimbursed by the successful bidder as part of the
agreement terms, so that this process has no net cost to the City.
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The Refuse Division budget will be amended to include anticipated proposer fee revenue
of $60,000 into account number 527-000-4901, and expenses of $58,070 into account
number 527-XXX-5502.
Recommendation:
I. Adopt resolution;
2. Authorize the Director of Finance to amend the FY 2004-05 Budget to include
anticipated revenues and expenses as indicated in this staff report.
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CITY OF SAN BERNARDINO
CITY ADMINISTRATOR'S OFFICE
INTEROFFICE MEMORANDUM
SUBJECT:
Mayor and ~~on Council
Fred Wils~ty Administrator
Analysis of options to enhance revenue from Refuse Services
TO:
FROM:
DATE:
June 16,2004
COPIES:
Lynn Merrill, Director of Public Services
In order to address the City's General Fund budget shortfall, R3 Consulting was retained
to analyze options to increase revenue to the City generated from solid waste operations.
Options evaluated include an expansion of City services; an expansion of franchised
hailer services; and restructuring how the City owns and manages its solid waste utility.
The analysis was prepared to provide the City with a document to discuss the viability of
the options.
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After reviewing several options, R3 is recommending the City consider assigning all new
commercial growth to a franchisee. Under this scenario, the franchisee will be required to
pay the City a fee equal to approximately 2 times gross annual revenue received from all
new commercial accounts. In addition, the 15% franchisee fee would apply to all current
and all new Franchisee revenue. The City would have to agree not to accept any new
accounts. This option could result in the City receiving a net revenue increase of $46.7
million to the General Fund over the next 20 years. The actual' amounts of payments
received would be determined through a competitive bid and subsequent negotiation
process.
As an alternative, the attached summary report from R3 discusses the revenue-enhancing
options related to expanding the City's commercial refuse services. The underlying issue
with that option is that even if successful, growth in commercial business would not
greatly benefit the General Fund due to limitations in state law. For that reason, staff is
not recommending expansion of commercial refuse services at this time.
The next step in this process will be to retain R3 Consulting to prepare an RFP and
provide assistance through the franchisee selection and negotiating process. It is
anticipated that such an action may be prepared for consideration by the Mayor and
Council on June 21.
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12.3
Consulting Group, Inc.
R3 Consulting Group, Jnc
4811 Chippendale Drive. Sune 902
Sacramento. CA 95841
Tel. 916-576-0309
Fax: 916-331-9600
Resources Respect Responsibility
www.r3cgi.com
June 8, 2004
Mr. Fred Wilson
City Administrator
City of San Bemardino
300 North D Street, 6'" Floor
San Bemardino, CA 92418
Subject: Option to Expand City Commercial Solid Waste Collection Services
Dear Mr. Wilson:
Per your request and as a follow-up to our report dated May 10, 2004, we have prepared a brief
summary of the City's options to expand its commercial solid waste collection services.
We appreciate the opportunity to assist the City in determining the best options to pursue for
commercial solid waste collection services. Please call me at (916) 576-0309, or e-mail at
rterwin@r3cgLcom, if you have any questions or comments,
Sincerely,
R3 CONSULTING GROUP
~"- ~G.~- "&-
Richard Tagore-Erwin
Principal
attachment
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C Expanded Commercial Services
As an option to continuing with the current commercial collection
system, the City could expand its operations to provide collection
services to all existing permanent and temporary debris boxes, and
all new commercial customers.
This would require the City to take several actions:
1. The City would need to either terminate the existing franchise
agreements with the franchised haulers, or wait until the
franchise agreements terminate eight years after the City
issues a notice of non-renewal in accordance with the terms
of the franchise agreements.
2, The City would need to purchase additional collection
vehicles and collection bins, provide additional maintenance
facilities for vehicles and bins, hire additional collection staff,
and hire additional customer service staff.
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Expanding the City's operations to all commercial collection
operations would provide the City with additional gross revenue of
approximately $2.1 million per year', which would increase with
growth. Additional gross revenue generated from limiting expansion
to new growth only would be approximately $420,000 per year, based
on growth projections.
Because of potential limitations related to Proposition 218, under this
option, while expanded commercial operations may result in
additional net revenue to the Refuse Enterprise, the City's General
Fund would receive approximately the same amount (approximately
$315,000/year) it receives from the current franchise fees paid by
franchised haulers. In addition, any increased revenue is predicated
on growth in the commercial sector. If growth occurs at a faster pace
than anticipated, the City may have difficulty in providing all the
required services due to capital and personnel requirements. If, on
the other hand, the City invests in capital and personnel, and growth
is slower then expected, the City may be faced with underutilization
of vehicles, bins, and personnel, while absorbing the full cost of the
expansion. This may result in reducing available net revenue to the
Refuse Enterprise and revenue transfers to the General Fund.
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1 Based on reported revenue from the current franchised collection
operations,
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Conclusion
Successful expansion of the City's commercial services is contingent
on future growth in the commercial sector and will require the City to
make a long-term commitment of capital and personnel with no
guarantee of a return on its investment. If the commercial sector
realizes sustained growth, and if the City is able to provide the
necessary capital and personnel to service the growth, then the
Refuse Fund may receive additional net revenue. However, we
understand that the General Fund will continue to be limited to
approximately 15 percent of gross revenue, as is currenUy provided
by the franchised haulers2.
If the City allows the franchised haulers to provide services to new
commercial accounts (Options 3 and 4 of the report dated
May 10, 2004), the Citywill receive the 15 percent franchise fees plus
payments for new account transition which are estimated to range
between $840,000 to over $1.1 million per year. Under the worst
case scenario, this approach would provide at least as much revenue
to the General Fund as expansion of City operations without the
necessary investment in capital and personnel, and the risk of a
revenue shortfall. Consequently, Options 3 or 4 pose significanUy
lower financial risk to the City with a potentially higher return.
R~
2 Franchise fees will increase from the current 11 % to 15% as of May 2005
in accordance with the terms of the franchise agreements,
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REStQ~1f
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A SERVICES
AGREEMENT WITH R3 CONSULTING GROUP, INC., FOR ASSISTANCE
CONCERNING EXPANSION OF COMMERCIAL REFUSE SERVICES PROVIDED
BY FRANCHISED REFUSE HAULERS
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION I.
The Mayor of the City of San Bernardino is hereby authorized
and directed to execute on behalf of said City a Services Agreement with R3 Consulting, Inc., a
copy of which is attached hereto marked Exhibit "A" and incorporated herein by reference as
fully as though set forth at length.
SECTION 3. The authorization granted hereunder shall expire and be void and of no
further effect if the agreement is not executed and returned to the Office of the City Clerk
within 60 days following the effective date of this resolution.
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RESOLUTION OF rHE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A SERVICES
AGREEMENT WITH R3 CONSULTING GROUP, INC., FOR ASSISTANCE
CONCERNING EXPANSION OF COMMERCIAL REFUSE SERVICES PROVIDED
BY FRANCHISED REFUSE HAULERS
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof, held
day of
, 2004, by the following vote, to wit:
on the
8 Council Members:
AYES
NAYS
ABSTAIN ABSENT
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ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MCCAMMACK
Rachel G. Clark, City Clerk
The foregoing resolution is hereby approved this
day of
2004.
Judith Valles, Mayor
City of San Bernardino
Approved as to
Form and legal content:
JAMES F. PENMAN,
City Attorney
By:
EXHIBIT "A
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SERVICES AGREEMENT
This Services Agreement ("Agreement") is entered into this ~_ day of
June 2004, by and between R3 Consulting Group, Inc., ("CONSULTANT") and the City of
San Bernardino ("CITY" or "San Bernardino").
WITNESSETH:
WHEREAS, the City has determined that it is advantageous and in the best interest of
the City of San Bernardino to engage a professional consultant to provide procurement
assistance concerning expansion of commercial refuse services provided by franchised refuse
haulers; and
WHEREAS, the CITY desires to retain the services of the CONSULTANT for the
purpose of providing such services; and
WHEREAS, CONSULTANT possesses the professional skills and ability to provide
assistance to the CITY concerning solid waste collection-related issues;
NOW, THEREFORE, the parties hereto agree as follows:
I. SCOPE OF SERVICES.
For the remuneration stipulated herein, San Bernardino hereby engages the services of
CONSUL T ANT to perform Tasks One (I) through Five (5), and Task Seven (7), as indicated
in the attached Scope of Services (Attachment "A").
2. COMPENSATION AND EXPENSES.
For Tasks One (I) through Five (5), CITY shall pay the CONSULTANT a fee not to
exceed $48,070. If the Mayor and Council award a franchise to a refuse hauler for an
expansion of commercial refuse services, CITY shall also pay the CONSULTANT a fee not to
exceed $10,000 for Task Seven (7).
EXHIBIT "A'
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CONSULTANT shall invoice CITY monthly using the billing rates cost reimbursement
terms found on Pages 13 and 14 of Attachment "A". No other expenditures made by
CONTRACTOR shall be reimbursed by CITY without the prior written appro" al of the City
Administrator.
3. TERM; SEVERABILITY.
The term of this Agreement shall be for a period of six (6) months, commencing on July
1. 2004. and terminating on December 31, 2004, unless previously modified. amended, or
cancelled by the written mutual consent of the parties.
This Agreement may be terminated at any time by thirty (30) days written notice by
either party. The terms of this Agreement shall remain in force unless mutually amended in
writing. The duration of this Agreement may only be extended with the written consent of both
parties.
4. INDEMNITY.
CONSUL T ANT shall indemnify, defend (if requested by CITY) and hold harmless the
CITY. its departments, boards. commissions. elected officials, officers, attorneys, employees
and agents from all liabilities, charges, and expenses (including. without limitation. reasonable
costs of defense and reasonable attorney's fees) arising or growing out of or related to CITY'S
performance of this Agreement, except that such duty to indemnify, defend and hold harmless
shall not apply where injury to person or property is caused by CITY'S willful misconduct or
negligence. The costs, salary and expenses of the City Attorney and members of his office in
enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' fees" for the
purposes of this paragraph.
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EXHIBIT "A
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5. INSURANCE.
While not restricting or limiting the forgoing, during the term of this Agreement.
CONSULTANT shall maintain in effect policies of comprehensive public, general and
automobile liability insurance, in the amount of $1,000,000.00 combined single limit, and
statutory worker's compensation coverage as required by law, and shall file copies of said
policies with the CITY'S Risk Manager prior to undertaking any work under this Agreement.
CITY shall be set forth as an additional named insured in each policy of insurance provided
hereunder. The Certificates of Insurance furnished to the CITY shall require the insurer to
notify CITY in writing at least ten (10) days in advance of any change or termination in the
policy.
6. NON-DISCRIMINATION.
In the performance of this Agreement and in the hiring and recruitment of employees,
CONSULTANT shall not discriminate on the basis of race, creed, color, religion, sex, physical
handicap, ethnic background or country of origin.
7. NO EMPLOYMENT.
CONSUL T ANT shall perform work tasks provided by this Agreement but for all intents
and purposes CONSULTANT and its agents or employees shall be an independent contractor
and not an agent or employee of the CITY.
8. ASSIGNMENT OR SUBCONTRACTING.
CONSUL T ANT shall not assign this Agreement, or any portion thereof without the
written consent of CITY. Any attempt by CONSULTANT to assign or subcontract any
performance of this Agreement without the written consent of the CITY shall be null and void
and shall constitute a breach of this Agreement.
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EXHIBIT" ,
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LEGAL ACTIONS.
In addition to any other rights or remedies, either. party may institute legal action to
cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted
in the Superior Court of the County of San Bernardino, San Bernardino District, State of
California. The laws of the State of California shall govern the interpretation and enforcement
of this Agreement.
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ENTIRE AGREEMENT.
This Agreement and any documents or instruments attached hereto or referred to herein
integrate all terms and conditions mentioned herein or incidental hereto, and supercede all
negotiations and prior writings in respect to the subject matter hereof. In the event of conflict
between the terms, conditions or provisions of this Agreement, an any such document or
instrument, the terms and conditions of this Agreement shall prevail.
11. NOTICES.
Any notice to be given pursuant to this Agreement shall be deposited with the United
Postal Service, postage prepaid and addressed as follows:
City Administrator's Office
300 North "D" Street
San Bernardino, CA 92418
Facsimile (909) 384.5138
TO THE CITY:
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TO THE CONSULT ANT:
Richard Tagore-Erwin, Principal
R3 Consulting Group, Inc.
4811 Chippendale Drive, Suite 902
Sacramento, CA 95841
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EXHIBIT "A'
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SERVICES AGREEMENT
IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day
and date first above written.
Date: June
,2004
R3 Consulting Group, Inc.
By:
Richard Tagore-Erwin, Principal
Date: June
,2004
City of San Bernardino
By:
Judith Valles, Mayor
APPROVED AS TO FOR1\,1 AND
LEGAL CONTENT:
By:
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Introduction
The City of San Bernardino ("City") is interested in changing the
method of providing solid waste and recycling services to the
City's commercial solid waste customers.
The City recently completed an analysis of available options for
providing commercial solid waste collection services. The options
range from continuing with the current method of City operated
commercial collection services with private franchisees competing
for temporary debris box collection, to transitioning the City from
the primary commercial collection provider to franchised haulers
providing some or all commercial collection services'. A specific
option the City has expressed interest in pursuing is providing a
method for franchised haulers to provide commercial collection
services to new commercial customers.
Based on this initial analysis, the City is interested in undertaking
a competitive Request for Proposals ("RFP") process for possible
transition of new commercial solid waste collection services to
franchised haulers, while retaining the City's current commercial
collection operations and customer base.
The City understands that even though it may undertake a
competitive RFP process, at any time prior to selection and
execution of a franchise agreement, the City has the option of
discontinuing further action and continuing with the current City-
provided commercial collection operations.
Project Approach
Our proposed scope of services is for full service procurement
assistance. R3 will act as an extension of City staff and will
assist in all aspects of this procurement. This will include the
following:
Working with City Staff and the City Council to develop a
sound short- and long-term strategy and financial plan for
providing commercial collection services;
1 This analysis was completed by R3.
Exhibit A
Scope of
Services
Solid Waste
Procurement
Services
The City has an opportunity to
generate additional General
Fund revenue by changing
the method in which
commercial solid waste
collection services are
provided.
. Undertaking a Request for
Proposal {"RFP'J process
will allow the City to
receive competitive pricing
and payment options, while
retaining the right to keep
its current commercial
operations.
. Undertaking a RFP
process will also allow the
City to require proposers to
pay for and/or reimburse
the City for the cost of the
RFP process.
R3
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Scope of
Services
Preparing a financial analysis of the possible impacts of
changes in commercial collection services on the City's
General Fund and the Refuse Enterprise Fund;
Drafting program requirements, the RFP, and the franchise
agreement, including pricing options for different transition
approaches;
Developing a mailing list and issuing the RFP;
Conducting a pre-proposal conference;
. Responding to questions regarding the RFP and preparing
addenda;
Conducting contractor interviews;
. Assisting in the evaluation of responses from contractors;
. Presenting the estimated financial impact on the City
based on RFP submittals;
Presenting the evaluation results to the City Council;
Conducting clarification or negotiation sessions if
necessary; and
Finalizing the franchise agreement.
The goals that will guide the procurement process include the
following:
Providing the highest level of service to the City's
commercial customers; and
Ensuring that the City is adequately compensated by the
franchisee through transition fees, franchise or user fees.
The following work tasks outline R3's approach to assisting the
City in conducting a RFP process for commercial solid waste
collection services.
Work Tasks
Task 1: Procurement Strategy
Task 1.1:
Facilitate Kick-Off Meeting
Q3
R3 will facilitate a project kick-off telephone conference call with
City Staff to confirm project objectives, review and confirm the
proposed time line for accomplishing the tasks, discuss our project
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approach, identify areas of concern, discuss plans for involvement
of the City Council, and review the City Staff's preliminary
thoughts on policy and service issues to be considered for the
procurement. In preparation for the meeting, we will review all
pertinent materials provided by the City.
Task 1.2:
Develop Procurement Strategy
R3 anticipates that the procurement strategy will be developed
through a series of telephone conference calls with City Staff over
a 2-3 week period. Significant emphasis of the procurement
strategy will be on estimating the potential impact on the City's
General Fund and the Refuse Enterprise Fund. In order to
accomplish this, R3 will prepare a financial model to be used
dunng the conference calls. R3 anticipates that one on-site work
session will be scheduled with City staff to finalize the
procurement strategy.
The procurement strategy will focus on having the City franchise
for new commercial accounts as discussed in the prior Analysis of
Options draft report dated May 2004, and will address short- and
long-term program and financial needs for the City. This will
include procurement options available to the City, including:
. Exclusive or non-exclusive franchise operations;
. Defining the specific commercial accounts available for
possible franchised collections (all new accounts, accounts
by geographic zones, accounts where ownership or service
changes occur, etc.);
. Phasing of franchised services and length of franchisee
agreement term;
. Mitigating any negative impact on current City staff,
equipment and operations;
. Protecting the City in the event of a revenue shortfall,
franchisee performance problems, or underpayment of
franchise or transition fees;
. Developing the type and amounts of franchise payments
made to the City, (one-time transition, percentage of annual
revenue, franchise fee, etc.); and
. Requiring the franchisees to pay for the City's cost of the
RFP process through Proposal submittal fees and/or
reimbursement by the awarded franchisee(s).
To the extent possible, the strategy will be prepared with pros and
cons of each item and linkages between them.
Scope of
Services
rz3
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Scope of
Services
Oeliverables for Task 1
As part of this Task, R3 will be responsible for the following:
. Facilitate one telephone conference kick-off meeting;
Conduct telephone conference calls and one on-site
meeting with City staff to develop a procurement
strategy;
. Prepare financial model for estimating the impact on
the City's General Fund and Refuse Enterprise Fund;
and
. Prepare a letter report outlining the procurement
strategy.
Task 2: RFP Documents
Task 2.1: City Staff Conference Call
R3 will conduct a conference call to discuss ho the procurement
strategy form Task 1 will impact the proposed RFP documents.
During this conference call, R3 will also discuss the outline for the
RFP documents.
Task 2.2:
Develop Potential Proposer List
R3 will develop a list of potential proposers and provide it to the
City in electronic format. This will allow the City to notify these
companies of the dates of the expected release date of the RFP
documents.
Task 2.3:
Prepare Draft Request for Proposals (RFP)
R3 will prepare a draft RFP package based on the results of Task
1 and our experience working with the solid waste management
community. The RFP will specify minimum requirements and
qualifications, and will require proposers to submit work plans that
specify how they will transition to new services, achieve diversion
requirements, implement customer service and billing programs,
and promote public education activities.
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In addition, separate sections of the RFP will include instructions
specifying the rules of the proposal process for the proposers and
the City, the format and submittal of responses, the method for
evaluating responses, and transition and other payments to be
made to the City. We suggest including computer disks that
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contain forms for the contractors as part of the submittal package.
Asan option, the City may wish to post the RFP on its web site in
PDF format.
In our experience, the Franchise Agreement should be developed
and issued as part of the RFP package. This significantly reduces
the time and cost of negotiations, and contractually links the
requested services to proposed costs as part of the evaluation
process. We have followed this proven approach in our scope of
services and strongly recommend that the City elect to use it given
the project timeline.
R3 will prepare the draft franchise agreement to be included in the
RFP . package. Proposers will be required to specify any
exceptions and provide language for any changes they propose to
the agreement.
The franchise agreement will include the following sections:
Definitions;
Representations and proposer warranties;
Franchise term and extensions;
Annual program monitoring fee requirements;
Account transition payments and franchise fee
requirements;
Account audit and payment audit provisions;
Scope of services;
Compensation;
General requirements;
Financial record-keeping and reporting requirements;
Indemnity, insurance, and performance bond coverage
requirements;
Performance standards such as:
o Time requirements for responses to customer calls
regarding service complaints (e.g., missed
collections. material spillage. hydraulic leaks. etc);
o Time requirements for responses to customer calls
regarding billing complaints. new accounts. etc.;
o Time requirements for cart or bin exchanges;
o Vehicle noise requirements;
Scope of
Services
1Z3
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Scope of
Services
o Vehicle maintenance requirements;
. Breach, default, and remedies; and
. AB 939 diversion requirements and indemnification.
Task 2.4: Finalize & Issue RFP
As needed, R3 will finalize the RFP and provide the City with one
original. un-punched, and twenty (20) copies of the RFP
documents. In addition, R3 will provide the City with a draft notice
of the availability of the RFP.
Deliverables for Task 2
As part of this Task, R3 will be responsible for the following:
Develop a potential proposer list;
Preparing an RFP package for distribution to
prospective proposers that includes the draft Franchise
Agreement, process rules, evaluation and selection
criteria. project schedule. and all required forms;
Providing process rules to guide the negotiation
process (e.g., how the proposers may communicate
with City staff. the consultant. and the City Council, the
format for negotiation sessions; and options available
to the City if negotiations are not completed
successfully);
. Finalize the RFP as needed;
Prepare one original and twenty copies of the final
RFP; and
. Prepare a notice of when the RFP is available, and
how interested parties can obtain copies.
Task 3: Pre-Proposal Meeting
Task 3.1: Facilitate Pre-proposal Meeting
R3 will facilitate a mandatory pre-proposal meeting with
prospective proposers. The pre-proposal meeting will provide the
opportunity for the City to review the RFP with prospective
proposers and answer questions, as appropriate.
R3
Page 6
Task 3.2:
Responses & Addenda
R3 will prepare written responses to questions raised before and
during the pre-proposal meeting for submittal to all parties whom
attended the meeting. In addition, R3 will prepare addenda to the
RFP, as required.
Deliverables for Task 3
As part of this Task, R3 will be responsible for the following:
Conduct the pre-proposal meeting;
Prepare written responses to questions raised before
and during the pre-proposal meeting; and
Prepare addenda to the RFP, as required.
Task 4: RFP Evaluation
Task 4.1: Evaluate Responses to the RFP
R3 (and the evaluation committee) will evaluate the proposals
submitted by the proposers. To ensure that commercial customers
continue to be provided with a high level of service throughout the
franchise term, the evaluation will include, but not be limited to,
evaluating the proposers proposed disposal site, collection
methods, customer service programs, work plans, insurance
requirements, financial statements, transition experience and
plans, references, and transition and franchisees payments to be
made to the City as proposed by the proposers.
After the initial evaluation is completed, R3 will also prepare any
written request for clarification to the proposers, as necessary. In
the event a proposer's proposal does not meet the minimum
requirements of the RFP, that proposer will be notified in writing
that their proposal has been disqualified.
Task 4.2:
Proposer Interview
Once the initial review of the proposers' submittals has been
completed, interviews will be scheduled and conducted with those
proposers meeting the minimum requirements of the RFP.
Scope of
Services
JZ3
Page 7
Scope of
Services
Task 4.3:
Prepare Proposer Recommendations
Based on the proposer evaluation results, R3 will prepare a letter
report for the City. The report will highlight the transition schedule,
financial impact on the City, work plans, and payments to the City
as proposed by the proposers. To the extent possible, this
information will be provided as comparative summaries, followed
by a recommendation of the top ranked proposers.
Deliverables for Task 4
As part of this task, R3 will be responsible for the following:
. Assist in the evaluation of the proposals, including
analysis of the technical feasibility, financial strength,
ability to provide services, and ability to meet diversion
and performance guarantees;
. Prepare any requests for additional information or
clarification of the proposals;
Schedule and conduct interviews with the proposers;
. Prepare an evaluation matrix to easily compare the
proposed collection program and payments to be made
to the City;
. Prepare a letter report detailing evaluation results; and
. Provide proposer ranking recommendations.
Task 5: Negotiations and
Recommendations
Task 5.1: Evaluation Committee Meeting
R3 will meet with City Staff to prepare for the final negotiation
meetings with the top ranked proposer(s).
Task 5.2:
Conduct
Negotiation
Proposers
Final Clarification and
Sessions with Short-Listed
R3
To the extent necessary, R3 will conduct final negotiations with
the top ranked proposer(s). Negotiations will focus on clarifying
the proposers' service and payment proposals, and finalizing
contractual language.
Page 8
Task 5.3:
Prepare Final Recommendations
Upon the conclusion of proposer meetings. R3 will prepare a letter
report detailing the results of the discussions. The letter report will
also include a recommendation of the selected proposer that the
City Council should consider for contract award. The
recommendation will include a summary of the proposed
programs. payments. and implementation schedule.
Task 5.4:
Finalize Franchise Agreement
Based on the results of the proposer clarification meetings. R3 will
finalize the Franchise Agreement, as necessary.
Task 5.5:
City Council Presentation
R3 will attend a City Council meeting to present the final proposer
recommendation.
Oeliverables for Task 5
As part of this task, R3 will be responsible for the following:
Prepare a listing of franchise agreement issues to be
clarified with proposers based on proposer responses
and City needs;
Conduct two clarification and negotiation sessions with
the proposers;
Prepare a letter report detailing the final results of the
proposer meetings;
Finalize the franchise agreement based on the results
of the proposer meetings; and
One City Council presentation.
Task 6: Solid Waste Ordinances
(OPTIONAL)
Task 6.1: City Staff Meeting
R3 will meet with City Staff to discuss the extent to which the
current solid waste ordinances will need to be revised or new
ordinances be prepared.
Scope of
Services
rz3
Page 9
Scope of
Services
Task 6.2:
Prepare or Revise Solid Waste Ordinances
R3 will work with City Staff to incorporate any changes and
provide final draft ordinances to the City Attorney.
Task 6.3:
City Council Meeting
R3 will attend a City Council meeting to discuss the proposed
ordinance language.
Oeliverables for Task 6
As part of this task, R3 will be responsible for the following:
Assist in preparing draft ordinances;
. Meet with the City; and
. Attend one City Council meeting (public hearing on the
solid waste ordinance).
Task 7: Transition Planning and
Implementation (OPTIONAL)
R3 Staff will assist the City in implementing the transition plan of
the selected proposer. This will include assisting the City in
establishing internal management controls to ensure that all
payments are made by the selected proposer.
Task 7.1:
Transition Period Checklist
In order to ensure a smooth implementation process, R3 will work
with the proposer to develop and maintain a checklist to organize
and track implementation tasks during the transition period. R3
proposes that the checklist be initially developed in conjunction
with the selected proposer, and reviewed and updated regularly
during the transition process.
The following are examples of transition checklist tasks:
Q3
. Order Equipment
. Develop container delivery schedule (by collection
route)
. Develop new route maps
. Develop equipment inventory
Page 10
. Develop and mail public education materials
. Coordinate "Kick-off' media event for collection
programs
. Advertise community meetings
. Develop press releases
. Implement Customer Service functions
Task 7.2:
Develop Proposer Reporting Checklist
The franchisee will be required to submit numerous reports to the
City during the contract term. R3 will develop a checklist for easy
reference by both the City and the proposer to identify recurring
contractual requirements and the corresponding due dates. The
checklist will be used as a tool at the meetings between the City,
the franchisee and R3 to address concerns or confusion regarding
these requirements.
The following are examples of reporting checklist tasks:
. Annual diversion report
. Franchisee payments to City (transition and franchise
fee)
. Financial information report
. Accounting records
. Contract materials records
. CIWMB (format) annual reports
. Public education and outreach plan
. Annual collection service notice
. Performance bond and insurance certificates
Task 7.3: Development of Franchise Fee Payment
System
The franchisee will be required to submit account transition and
franchise fee payments to the City throughout the contract term.
R3 will coordinate with the City and the franchisee to develop a
payment form for use by the franchisee. The form will provide the
detail needed by the City to document the basis for the payments.
Scope of
Services
R3
Page 11
Scope of
Services
Task 7.4: Review of Hauler Accounting System
For purposes of calculating payments and reviewing financial
records. it is important that the franchisee's accounting system be
designed to segregate the accounts, revenues and expenses
related to the City franchise agreement from those accounts,
revenues and expenses related to services provided to other
municipalities.
As part of the development of the payment system, R3 will review
the accounting system developed by the franchisee to verify that it
is designed to segregate the revenues and expenses related to
the services provided under the terms of the franchise agreement
with the City.
Schedule
R3 has developed this Scope of Services to enable the City to
authorize a new franchise agreement as quickly as 3 - 5 months
upon notice to proceed. This schedule will require timely review by
City Staff and action by the City Council. This also assumes that
developing the Procurement Strategy (Task 1) will be completed
in one month.
Our project staff has extensive experience in procuring solid waste
collection services and is committed to completing the project on-
time. In addition. we have the staff resources necessary to
accommodate unforeseen changes in project scope or in the
schedule.
As part of the Project Kick-off Meeting (Task 1.1), R3 will prepare
a detailed schedule as a Gantt chart, showing all work tasks.
deliverables and submittal dates, review periods. meetings. and
presentations. This schedule will be updated and provided to the
City as changes occur.
Q3
Budget
R3 suggests that the City require the proposer(s) pay for the
cost of RFP process in the forms of 1) non-refundable
submittal fees of approximately $10,000 - $20,000 per
proposal, and 2) the balance of the project cost being
reimbursed t the City by the proposer(s) that is awarded the
franchise agreement. Accordingly, while the City will not
need to fund the project beyond the schedule for the RFP
process, the City will incur short.term project costs and will
be reimbursed for 100% of the project cost.
Page 12
R3 estimates that approximately 344 hours will be needed to
complete Tasks 1 - 5 for a not to exceed price of $48,070. We
suggest that billing be done monthly, based on actual hours billed
during the billing period. In this manner, if the City Council
decides to discontinue the project, the project costs would be
limited to actual hours worked.
It may be necessary to modify the work efforts in each Task, but
this will not affect the total not to exceed price. In the event the
City requests additional services, such as attending additional City
Council meetings or conducting community meetings, we will
provide the City with a budget amendment prior to performing the
additional services.
Tasks 6 and 7 should be considered as "Optional", and for these
Tasks, R3 will work with the City of finalize the details. Once the
task development is finalized, we will provide the City with a
budget amendment should the City need any assistance with
these tasks.
Cost Estimate
Task Hours Cost'
Task 1: Procurement Strategy 68 $9,763
Task 2: RFP Documents 96 $12,617
Task 3: Pre-Proposal Meeting 36 $5,047
Task 4: RFP Evaluation 92 $13,114
Task 5: Negotiation and Recommendations 52 $7,529
TOTALS 344 $48,070
Billing Rates and Charges
Technical Services
Project Manager $150.00/hour
Senior Analyst $135.00/hour
Analyst $90.00/hour
Associate $75.00 hour
2 Includes labor and project expenses.
Scope of
Services
1Z3
Page 13
Scope of
Services
Administrative Support
$50.00/hour
Reimbursable Costs
Consulta nts/Subcontractors
Lodging and meals
Travel - Private or company car
Delivery and other expenses
cost
cost
$0.375 per mile
cost
Payments
Unless otherwise agreed in writing, fees will be billed monthly at
the first of each month for the preceding month and will be
payable within 30 days of the date of the invoice.
R3
Page 14
.
OFFICE OF THE CITY CLERK
RACHEL G. CLARK, C.M.C. - CITY CLERK
300 North "D" Street. San Bernardino' CA 92418-0001
909.384.5002' Fax: 909.384.5158
www.ci.san-bernardino.ca.us
'H
June 24, 2004
Richard Tagore-Erwin, Principal
R3 Consulting Group, Inc.
4811 Chippendale Drive, Suite 902
Sacramento, CA 95841
Dear Mr. Tagore-Erwin,
At the Mayor and Common Council meeting of June 21, 2004, the City of San Bernardino
adopted Resolution 2004-206 - Resolution authorizing the Mayor to execute a services
agreement with R3 Consulting Group. Inc., for assistance concerning expansion of commercial
refuse services provided by franchised refuse haulers.
Enclosed is one (1) original agreement. Please sign in the appropriate location and return the
original agreement to the City Clerk's Office, Attn: Michelle Taylor, P.O. Box 1318, San
Bernardino, CA 92402, as soon as possible.
Please be advised that the resolution and agreement will be null and void if not executed
within 60 days, or by August 20, 2004.
If you have any questions, please do not hesitate to contact me at (909)384-5002.
Sincerely,
YJllcj'::e_~ 1 ~
Michelle Taylor 7'
Senior Secretary
Enclosure
CITY OF SAN BERNARDINO
AnoPTF.n SHARED VALUES: Integritv' Accountabilitv' Resnect for Human Dignity' Honesty
R~
Consulting c;roup, Inc.
12esources 12esponsibility 12espect
4811 Chippendale Drive, Suite 902
Sacramento, CA 95841
Tel. 916-576-0306
Fax: 916-331-9600
www.r3cgLcom
June 30, 2004
Michelle Taylor
Office of the City Clerk
P.O. Box 1318
San Bernardino, CA 92402
Attn: Michelle Taylor
Dear Ms. Taylor:
Per your letter dated June 24, 2004, enclosed is one (1) signed original agreement
between the City of San Bernardino and R3 Consulting Group, Inc.
Please feel free to call me at 916-576-0309 if you have any questions or require
additional information.
Sincerely,
R3 CONSULTING GROUP
~~ ~~,~
Richard Tagore-Erwin
Principal
Enclosure
I<'Jchard J.l..Iutchinson . l2.ichard Tagore-t;.rwin . :neve l..Iarriman
I - ~
CITY OF SAN BERNARDINO
Interoffice Memorandum
CITY CLERK'S OFFICE
Records and Information Management (RIM) Program
DATE:
July 8, 2004
TO:
Fred Wilson, City Administrator
FROM:
Michelle Taylor, Senior Secretary
RE:
Resolution 2004-206 - R3 Consulting Group, Inc.
CC:
Veronica Martinez, Senior Secretary
Attached is a fully executed copy of the services agreement with R3 Consulting Group, Inc., for
assistance concerning expansion of commercial refuse services provided by franchised refuse
haulers. The original agreement is on file in the City Clerk's Office.
If you have any questions, please call me at ext. 3206.
,--."~"
,
- ,
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted): (,,- 'Z-\rOl:! Item # S 1- Resolution # '7.t1J4- '2.(y;,
Vote: Ayes L-r"j Nays {.r Abstain .g-- Absent..e--
Change to motion to amend original documents 0 Companion Resolutions
NulI/Void After: loa
days / 'b r l..<J.--04-
Resolution # On Attachments: 0
Note on Resolution of attachment stored separately: 0
PUBLISH 0
POST 0
RECORD W/COUNTY 0
By:
Date Sent to Mayor: ~2...L--oLJ
Date of Mayor's Signature:
Date ofClerk/CDC Signature:
Reso. Log Updated: .s-
Seal Impressed: 0
Date Memo/Letter Sent for Signature:
I st Reminder Letter Sent:
~ --;)''-/ -ol.j Date Returned: f) -Io-o~ Not Returned: 0
2nd Reminder Letter Sent:
Request for Council Action & Staff Report Attached:
Up(iated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Yes ./
Yes
Yes
Yes
Yes
No
Nor./'
No ./
NoL
No / By_
Copies Distributed to:
Animal Control 0 EDA 0 Information Services 0
City Administrator ~ Facilities 0 Parks & Recreation 0
City Attorney 0" Finance Ia" Police Department 0
Code Compliance 0 Fire Department 0 Public Services 0
Development Services 0 Human Resources 0 Water Department 0
Others: ~3
Notes:
Ready to File:_
Date:
Revised 12/18/03