From
Bryce Davis, Purchasing Manager
Title
Agreement for Solid Waste and Recycling Hauling Cost of Service Study from NewGen Strategies & Solutions in the amount of $72,500 through a national interlocal agreement with HGAC
Presenter
Patricia D. B. Redfearn, Ph.D., Solid Waste and Recycling Manager
Recommended Action
Approve
Analysis
Since 1962, the company currently doing business as Republic Services of Arlington has provided solid waste collection services for the City of Grand Prairie. This has included both commercial and residential garbage, and since 2000, residential recycling. The residential collection service provided is twice weekly bag collection, while recycling is collected once per week from 18-gallon open-top bins.
The current franchise agreement between Republic Waste Services and the City, which expires October 17, 2028, allows a once per year request for a rate increase. Since 2009, the request has been made every year that the agreement was not up for renewal.
These requests are frequently made “across the board,” but in several years, they have been weighted heavier to the commercial and industrial customers in order to mitigate impact to the residential customers.
These rate increase requests must be evaluated by the City’s chief financial officer, who provides a recommendation about the merit of the request. Several documents are required to make this evaluation possible. Per the City Charter, these documents include, balance sheets, and income and expense statements for the past three years, a schedule of fixed assets, a schedule showing the effects of the proposed increase on the revenues of the business and a schedule showing the known and measurable changes anticipated for the next fiscal year, which will affect revenues and expenses. In the 2009 franchise renewal, the requirement for an audit was removed. Since that time, it has been difficult to difficult to fully evaluate the need for the request against a preference for a particular rate of return and to separate expenses associated with service for Grand Prairie from others.
In late July 2020, Republic provided a proposal to the City for cart service for residential garbage and recycling hauling. The proposal potentially increases the imbalance of residential to commercial and industrial businesses in Grand Prairie. Cities facing decisions about potential changes to solid waste and recycling service frequently employ the services of a consulting firm for a Cost of Service Study. The goal of the study will be to develop a cost of service that provides a detailed cost allocation for each solid waste and recycling service provided to residential and commercial customers by Republic Services. The cost of service for each of these solid waste and recycling services will then be compared to the revenues realized by the rates charged for those respective services. Upon completion of the analysis, rate recommendations will be provided as necessary. The findings of the survey, combined with a citizen survey will be documented in a final report provided to City staff. This will aid in delivering a responsible recommendation to the City Council regarding the recent proposal. Recommended comparative costs for residential service will consider four options: trash in carts and recycling in bins, trash in bags and recycling in bins, trash in carts and recycling in carts and trash in bags and recycling in carts. Additionally, there will be guidance for balancing the rates charged for residential, commercial and industrial customers.
Chaper 271.102 of the Local Government Code authorizes local governments to participate in a cooperative purchasing program with another local government or local cooperative organization. In lie of competitive bidding, items and services may be purchased through such agreements as the agreements have already been bid by the sponsoring entity or agency. The City of Grand Prairie has master inter-local cooperative agreements with various entities including HGAC.
The H-GAC primarily offers products that are utilized in Public Safety, Public Works, and Communications, in addition to professional consulting, personnel and financing services. A wide variety of capital equipment is under contract, and through a unique feature of HGACBuy it can be customized through the use of published and unpublished options to fit your specifications and requirements.
HGAC Contract #HP10-17 was effective October 1, 2017 and set to expire July 31, 2021.
Financial Consideration
Funding for a Cost of Service Study to be performed by NewGen Strategies and Solutions, in the amount of $72,500, is available in the FY2019/2020 Solid Waste Operating budget 303510 by using available contingency (65120) in the amount of $67,000 and surplus salary savings (50020) $5,500.