September 14, 2006

Council approves memorandum of understanding for garbage, recycling services

Staff, city manager fine-tune potential six-year contracts

By Carol Rosen
Staff Writer

The City Council accepted the current Memorandum of Understanding (MOU) with Garden City Sanitation and California Waste Solutions at Tuesday’s council meeting for a six-year term beginning July 1, 2007 with the ability to extend the contract two more years if everyone is satisfied with their performance. Contracts are expected to be finalized and ready in 45 days.

The memos outline the terms and conditions of the new contracts, according to the recommendation presented to the council by staff members Scott Johnson and John Stufflebean and signed off by City Manager Les White. They also place milestones for the transition period and set fines if those benchmarks aren’t met.

While Garden City already had placed orders for trucks, California Waste Solutions was awaiting the approval of the MOUs allowing it to seek financing to buy trucks and equipment. Both companies have revised their transition plans with detailed timelines with milestones. In addition, there will be administrative charges of $5,000 per day if either or both companies fail to meet their implementation milestones.

Discussion mostly centered on contract extensions. The contract calls for six years, but if the companies are doing well the council may extend it an additional two years. Vice Mayor Cindy Chavez expressed concern that waiting until the end of the contract could hamper the city’s bargaining ability.

Staff indicated that by the end of six years, the trucks and equipment will be paid for, possibly leading to similar or maybe even lower prices.

District 4 Councilmember Chuck Reed asked if the city and CWS had discussed handling recycling that contains garbage. If that is an issue, staff indicated that Garden City will charge a one-time fee that will be passed on to the resident.

Additions, revisions
During resolution of the MOU, some additions and revisions were made. For example, final contracts will state that both companies will provide relief drivers and vehicles from their other operations, should either or both fall behind in collections during the transition period following July 1. The transition period is not a fixed time period, but “is defined as the time period from the service start date until all services to all residents are performed on a timely basis…”

The contracts also will stipulate that the city can rent all or part of the contractors’ collection fleet for a three-month period beginning July 1, 2013, when contracts end if the city is unhappy with either or both companies’ performance. The city is required to notify contractors by June 1, 2013 to pick up this option. Rental prices and terms are included in both contracts.

One important area of the MOU was the addition of consultant services to monitor Garden City and CWS operations during the transition period. R3 Consulting will “verify completion of critical milestones in the contractors’ transition plans and prepare period reports for the city staff and City Council on transition progress and issues.” The reports will be turned in monthly from October through February 2007; biweekly in March and April 2007; and weekly from May through October 2007.

The staff will also work with the two contractors “to develop minor modifications to the contract provisions for assessing administrative charges during the first week of service.” Any modifications will allow an additional day to correct missed collections.

Final transition plans are due to city staff by the end of September with final agreements to the City Council by late October. There will be a transition update in November to the Making Government Work Better Committee.

The MOU delineates the time lines as well as allowing the city to hire other service providers if there are delays with the transition time lines. Norcal Waste has agreed to provide such services if necessary, said White. Differences in cost will be the contractors’ expense and deducted until the final payment.

Other resolutions
The City Council also unanimously approved a resolution to continue the Internet Crimes Against Children Grant. The recommendations included adopting the funding resources in the general fund establishing a citywide appropriation to the SJPD for $400,000 and increasing the estimate for Revenue from the federal government by $400,000. Police Chief Rob Davis was on hand to help explain the program, which includes an annual conference for parents and an outreach program for schools.

Council members also approved 15 rezoning ordinances as well as changing the affordability mix of the Edenvale Special Needs Apartments to 50 percent of area median income. It provided a grant through the Redevelopment Agency Board of $75,000 to the San Jose Unified School District for public improvements to the Gardner Academy.