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HomeMy WebLinkAbout2/2/2005 - STAFF REPORTS (19) DATE: February 2, 2005 TO: City Council FROM: Assistant City Manager-Administration SUBJECT: Solid Waste Consulting Services RECOMMENDATION: It is recommended that the City Council approve and authorize the City Attorney to prepare a Contract Services Agreement with Hilton Farnkopf & Hobson, LLC in an amount not to exceed $38,000 for solid waste consulting services. SUMMARY: Solid waste and recycling vehicles are the heaviest vehicles regularly operating on residential streets. The amount of damage caused by these vehicles, especially residential streets which are designed to handle a certain amount of vehicle traffic over their design life, can be significant. In order to recover street maintenance costs related to refuse vehicles, a number of cities throughout the state have started to impose a vehicle impact fee. This fee, which is similar in nature to other impact fees imposed by the City, must demonstrate a clear nexus between the fee and the related costs. Due to the complexities involved in determining this nexus, a consultant that specializes in solid waste issues is needed. BACKGROUND: The City Council has previously entered into an exclusive franchise with Palm Springs Disposal Services for solid waste collection and recycling services. As is the case in most contractual relationships wherein exclusive rights and privileges are granted, with a resultant benefit conferred, the beneficiary of that exclusive right provides consideration, usually in the form of a franchise fee. This fee is not solely consideration for the exclusive rights to provide collection, disposal and recycling services, but is also consideration for the impacts that these services have on the City's infrastructure (e.g., streets, curbs, gutters, sidewalks, etc.), liability exposure, and ability to meet its state mandated obligations. The City currently imposes a 5% franchise fee on residential customers and a 14% franchise fee on commercial customers. In addition, the City assesses a 5% administrative fee on both residential and commercial customers. Last year, the City received $724,930.00 in franchise and administrative fees from Palm Springs Disposal Services. :�4, Finally, HF&H will assist staff in amending its franchise agreement with Palm Springs Disposal Services to implement the new vehicle impact fee and modified franchise fee calculation. The cost to perform this task is $7,500. The total cost to perform all three tasks proposed by the consultant is $38,000. Although this is not a budgeted expense, funding is available in the Diversion Facility Fund account. As you will recall, a Transfer Station Subcommittee consisting of Mayor Oden and Mayor Pro Tern McCulloch was formed about a year ago to evaluate proposals related to the development of a transfer station. Staff has met with the Subcommittee to discuss the consultant's proposal and its significance to the City's overall revenue situation. Although the Subcommittee is not yet prepared to issue its final recommendation to the City Council on the Transfer Station matter, the Subcommittee concurs with staff that this work is necessary and recommends approval. A�But41js' si tant City Manager - Administration APPROVED --.,. City Manager Attachments: 1. Letter proposal from Hilton Farnkopf& Hobson dated January 6, 2005 2. Minute Order 3 r <; HILTON FARNKOPF&HOBSON,LLC -` Advisory Services to = � Municipal Management 3990 Westerly Place,Suite 195 San Francisco Newport Beach,California 92660-2311 Newport Beach Telephone 949/251-8628 Sacramenin Fax:949-251-9741 �ifi['J 0 cn» �J101 January 6, 2005 Mr. Troy Butzlaff Assistant City Manager City of Palm Springs 3200 Tahquitz Canyon Way Palm Springs, CA 92262 Subject: Proposal to Provide Solid Waste Consulting Services in Connection with Refuse Vehicle Impact Fees and Franchise Fees Dear Troy: Hilton Farnkopf & Hobson, LLC (HF&H) is pleased to submit this proposal documenting the terms and conditions of the solid waste consulting services to be provided by HF&H to the City of Palm Springs (City). STUDY OBJECTIVES The objectives of the engagement are to: 1. Perform a residential refuse vehicle impact fee analysis 2. Perform a franchise fee analysis 3. Assist the City in amending its franchise agreement to implement the new fees, and present the results to City officials. SCOPE OF WORK This section describes the scope of work by study objective. �0 recycled ed paper HILTON FARNIZOPF&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 2 Objective 1: Perform a Residential Refuse Vehicle Impact Fee Analysis The objective of the analysis is to calculate a fee, to be charged to the City's solid waste franchisee, to recover street maintenance costs related to residential solid waste, recycling, and yard waste vehicles (Refuse Vehicles). Our work product will consist of the following items: • A letter report documenting our recommended fee, key assumptions, methodology, limitations, and findings; and, • A copy of a recent legal opinion, commissioned by HF&H, on the validity of imposing a refuse vehicle impact fee. While factors specific to each jurisdiction will dictate the calculated cost of street maintenance associated with Refuse Vehicles, that cost can be substantial. Recent studies conducted by HF&H have calculated that Refuse Vehicles may account for 10 percent or more of the vehicle impacts experienced by residential streets. Approach The underlying premise for the analysis is that the weight and loading of Refuse Vehicles impose a particular, specific, and identifiable impact on residential streets that can be quantified in terms of the portion of the annual street maintenance cost attributable to those vehicles. The analysis is based on the fact that streets are designed to handle a certain amount of vehicle traffic (loading) over their design life. That loading is a function of both the number and weight of vehicles. The lifetime "vehicle loading' that a street can accommodate can be expressed as the total number of Equivalent Single Axle Loads (ESALs). Each vehicle type (e.g., Refuse Vehicles, construction vehicles, other trucks and automobiles) can also be converted into an associated ESAL, based on the vehicle weight, and its distribution among the velicle's axles. By projecting the type and number of vehicles that will travel on a street over its design life, the total number of ESALs can be calculated and the street designed to handle that projected loading. Similarly, the relative impact of each type of vehicle on that street can be calculated, based on the percentage of the total ESALs that a street experiences that are attributed to each vehicle type. recycled 0 paper 0 HILTON FARNKOPF 64 HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 3 Task 1A: Issue Hauler Request for Information HF&H will issue to the City's current franchisee a request for information that will include, but is not necessarily limited to: • The type and size of residential Refuse Vehicles • Vehicle tare weights • Typical vehicle payloads • Number of axles and manufacturer's axle weight distribution profile • Number of residential accounts It is expected that, as necessary, the City will assist with facilitating the acquisition of the requested information. If the requested information is unavailable, HF&H will use representative data from prior studies. Task 1B: Determine "Model" Axle Weight Profiles Based on the information obtained during Task 1A, model axle weight profiles will be developed for each residential Refuse Vehicle type to determine the ESAL factor for each Refuse Vehicle. Task 1C: Identify Additional Model Inputs Calculating the annual impact of residential Refuse Vehicles on residential street maintenance costs requires additional data, including the following information by major classification (residential, collector, arterial), if available: • Miles of streets in the City (center line and lane miles) • Street Traffic Index (TI) • Current and target Pavement Condition Index (PCI) • Average annual street maintenance cost (i.e., maintenance, rehabilitation, reconstruction) at current PCI recycled 0 paper HILTON PARNKOPP&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 4 • Additional required costs and projected schedule to achieve target PCI • Average number of daily vehicle passes on a typical street • Percentage of street traffic associated with trucks (versus automobiles) • Percentage of trucks that are construction-related trucks We expect that the City will provide the necessary data. Our project budget does not account for any analysis for developing key data specific to the City. If the data is unavailable or the City cannot provide it, we will rely on readily available information from our work on similar projects and/or other sources. HF&H will also request from the City information related to any fees that are assessed related to sheet maintenance impacts (e.g., construction vehicle impact fees, trench cut fees, in-lieu franchise fees) and revenues that are specifically dedicated to street maintenance operations (e.g., gas tax revenues). Task 1D: Calculate Refuse Vehicle Impact Fee Using the information obtained in previous tasks, HF&H will calculate the armual residential street maintenance cost associated with residential Refuse Velicles. Limitations Each engagement is subject to certain limitations. The most significant limitations regarding Task 1 are as follows: • Our project budget assumes that the City and its hauler, Palm Springs Disposal Services (PSDS), will provide the necessary data in a complete and timely manner. Should certain data be unavailable, we will make a reasonable assumption regarding that data, which we will forward to the City for review and comment. We will then proceed with the analysis based on the agreed upon assumptions. Alternatively, if the City authorizes us to do so, we will perform additional data collection and additional tasks on a time-and-material basis. • Our project budget does not account for any face-to-face meetings with City staff or presentations, although our staff will be available by telephone to discuss project 017, _I ecycled Q paper WILTON FARNKOPF&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 5 issues. We will issue one draft report, revise it as appropriate based on written cormnents received from the City, and submit our final report. • Our analysis is specific to the impact of residential Refuse Vehicles on residential streets only. We do not propose to evaluate any impacts associated with commercial Refuse Vehicles on commercial streets. • While we will provide the City with our letter report documenting all relevant information, assumptions, and resulting calculated impacts; we do not propose to provide either an electronic or hard copy of the detailed analysis, which we consider proprietary. Objective 2: Perform a Franchise Fee Analysis The objective of this task is to recalculate the City's franchise fee based on gross receipts to make it comparable to the method of assessing franchise fees in many other jurisdictions. We will then compare the City's current and proposed franchise fee to other cities in Riverside County. We will also identify other cities in Southern California that have higher franchise fee percentages. The proposed franchise fee amount will be calculated as follows: • The current"$8.50 fund" amount collected per ton will be eliminated going forward. • $4.54 of the $8.50 per ton amount will be used to offset the increased cost of disposal. • $3.96 of the $8.50 per ton will be converted to a franchise fee and/or vehicle impact fee, and added to the current franchise fee and administrative fees remitted to the City. As part of this task, we will estimate the amount of annual revenue that the City would receive from the new fee structure based on gross receipts and tonnage reported during the previous year. PSDS will be responsible for providing requested information about its gross receipts and tonnage for this analysis. City staff will be responsible for providing information about current fees remitted for a 12-month period. HILTON FARNICOPF&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 6 Objective 3: Amend Agreement and Brief City Officials The objective of this task is to assist the City in amending its franchise agreement to implement the new refuse vehicle impact fee and franchise fee developed in Tasks 1 and 2. We will prepare one draft of text required to amend the agreement and provide it to City staff who will be responsible for forwarding it to the City Attorney for formatting and final review. Alternatively, City staff may prepare the amendment and we will review it. We will subsequently participate in a meeting or briefing with City officials to answer questions about the fee calculations. City staff will be responsible for preparing staff reports to transmit agenda items to Council. BUDGET The estimated budget for Tasks 1, 2 and 3 is $38,000 as shown below: Task 1: Refuse Vehicle Impact Fee Analysis $22,500 Task 2: Franchise Fee Analysis $8,000 Task 3: Amend/present agreement $7,500 Total: $38,000 Tasks 1 and 2 will be performed on a fixed fee basis. We will bill 50% of the budget for these tasks upon issuance of the draft report and the remaining portion will be billed upon submittal of the final report for Tasks 1 and 2. Task 3 will be performed based on time and materials and will depend on the level of support requested by the City to amend the franchise agreement and subsequent support requested to present the agreement and supporting analyses from Tasks 1 and 2 to City officials. We have budgeted $7,500 for this task; actual costs could be higher or lower than this amount depending on the level of effort and number of meetings requested. Payment is due with 30 days of invoicing, and a late fee of 1% per month may be added to amounts more than 30 days past due. ,e,,.d 0 papar HILTON FARNKOPF&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 7 Hourly rates for our consultants for the work performed under Task 3 are as follows: Senior Vice President $220 Senior Manager $185 Senior Associate $175 Associate $160 Assistant $95 Expenses for work performed under Task 3 will be billed as follows: Mileage: $0.375 per mile* (*or as adjusted by IRS allowance) In-house document reproduction: $0.15 per page Public conveyances: Actual Postage/overnight mail/other out of pocket: Actual SCHEDULE We will complete the vehicle impact fee and franchise fee analyses within 90 days of receipt of all necessary information from the City and Palm Springs Disposal Services. * * * * * * * If this proposal meets with your approval, please execute it by signing the following page and return a copy to me. Please call me at 949-251-8902 if you have any questions. Very truly yours, HII�LTON FARNNKOPF & HOBSON, LLC n ' l "Laith B. Ezzet, CMC Senior Vice President recycled CIO paper 0 HILTON FARNKOPF&HOBSON,LLC Mr. Troy Butzlaff January 6, 2005 Page 8 Approve scope of work, budget of$38,000, and other terms and conditions of the work to be performed by Hilton Farnlcopf£d Hobson, LLC for the City of Palm Springs as documented in proposal dated January 6, 2005. Approved by: Signature Date Print Name Title recycled C,paper MINUTE ORDER NO. APPROVING AND AUTHORIZING THE CITY ATTORNEY TO PREPARE A CONTRACT SERVICES AGREEMENT WITH HILTON FARNKOPF & HOBSON LLC IN AN AMOUNT NOT TO EXCEED $38,000 FOR SOLID WASTE CONSULTING SERVICES --------------- I HEREBY CERTIFY that this Minute Order, approving and authorizing the City Attorney to prepare a Contract Services Agreement with Hilton Farnkopf & Hobson in an amount not to exceed $38,000 was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 2nd day of February, 2005. JAMES THOMPSON City Clerk 4