04 - CR&R Environmental Services - Yearly Performance Review for FY 13-14Protecting our community's health and the environment by providing s olid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum T o: Board of Directors Via : Scott Carroll , General Manager From: Javier Ochiqui, Management Analyst Date: September 16 , 2014 Subject : CR&R, Environmental Services – Yearly Performance Review for FY 13 -14 Summary Per Section 40 of the Agreement, the “DISTRICT shall complete a yearly performance review of the trash collection and recycling program on a yearly basis and CONTRACTOR and DIS TRICT shall meet to discuss and resolve problems that may be occurring in the programs. DISTRICT shall prepare a performance review form that allows for evaluation of services provided at the residences as well as administrative services including report p reparation, accuracy, timeliness of transmittal, responsiveness to inquiries, database management, service levels and helpfulness.” Staff is providing the Board of Dir ectors with the results of the yearly performance r eview for FY 20 13 -14. Staff Recommen dation That the Board of Directors receive and file the report. Analysis The evaluation term was fro m July 1, 2013 to June 30, 2014 , and staff evaluated CR&R using the following four ratings: Excellent, Satisfactory , Unsatisfactory and Not A pplicable (N/A). CR&R’s overall quality of service is Satisfactory . T heir customer serv ice waiting times can be improve d . CR&R has run reports in which the average waiting time for a caller is between 30 -50 seconds and t heir longest waiting time has been 4 minutes. D uring FY 2013 -14, CMSD staff has received several calls from CMSD residents indicating that they have waited over 5 minutes while trying to contact customer service. Although CR&R disagrees with this claim , we need to ensure that CR&R has enough Customer S ervice Representatives (CSR’s) assigned to Costa Mesa. This will become important especially when we begin the new Organics
Board of Directors September 16 , 201 4 Page 2 of 3 Recycling Program in mid -January 2015, when h aving enough CSR’s will facilitate the success of the new program. Staff is recommendi ng that CR&R prepares a plan and present to staff on how they plan on addressing the customer service issue found in this review. Also, per the Second Amendment of the Agreement dated February 25, 2014 , it states that, “All equipment used for collecti on of Solid Waste shall be enclosed to ensure that Waste is not spilled on the streets and pr ivate party…” However, there have been several hydraulic liquid spill s from the CR&R trucks. CR&R has done an excellent job preventing spills from entering the sto rm drain system and they are very responsive to cleaning up the spills , but the spills are leaving stains on street asphalt. Staff does not believe pressure washing is effective for removing stains and can actually damage streets if performed routinely at the same location. Staff is recommending that CR&R submit a plan to minimize and/or prevent hydraulic spills and a method for removing stains. CMSD staff is encouraging CR&R to revisit their vehicle inspection policies and/or procedures in order to elim inate spills. In addition, a s part of the yearly performance review process, s taff hired Michael Balliet from Michael Balliet Consulting, LLC to provide a partial compliance review of the following six areas of the Agreement : • Most Favorable Net -to -Haul er Rate • Master Manifest to Verify Ultimate Diversion Compliance • Administrative Compliance • Ownership Changes • AB 939 Compliance • Waste Diversion For each review area listed above, Mr. Balliet found CR&R, Environmental Services to be in satisfactory complianc e (Attachment 2). Staff will continue to complete a yearly p erfo rmance r eview of CR&R. In addition, staff recommends that CR&R complete the Master Manifest R eport every August 1 st in order to facilitate CMSD’s annual review process. Strategic Pla n Element & Goal This item complies the with objective and strategy of Strategic Element 2.0, Solid Waste, which states: “Objective: Our objective is to manage the collection and recycling of residential trash in the most economical and environmentally fr iendly way.” “Strategy : We will do this by looking for ways to improve efficiencies, achieve high customer satisfaction, and considering prudent new recycling methods.” Legal Review Not applicable at this time.
Board of Directors September 16 , 201 4 Page 3 of 3 Environmental Review A performance revie w of CR&R in and of itself is an administrative matter and is not a disturbance of the environment similar to grading or construction and is not a project under CEQA or the District’s CEQA Guidelines . The programs of CR&R, such as the organics programs, r eceive individual CEQA review when they are initiated or revised. Financial Review The routine yearly performance review of CR&R is performed by District staff . However, Michael Balliet Consulting, LLC, was hired to perform a financial review of CR&R at a cost of $3,990 . The General Manager has approved the transfer of $5,000 of excess funds from the Household Hazardous Waste Special Program to the Contract Services account to cover the cost of the finance review . Public Notice Process Copies of this report are on file and will be included with the complete a genda packet for the September 16 , 2014 , Board of Directors Study Session meeting at District Headquarters and posted on the District’s website . Attachment (s ): 1 – Yearly Performance Review of C R&R, Environmental Serives 2 – Annual Review Assistance Report by Michael Balliet Consulting, LLC
Attachment 1 Costa Mesa Sanitary District (CMSD) Yearly Performance Review of CR&R, Environmental Services Evaluation Term: July 1, 2013 – June 30, 2014 Prepared by Javier Ochiqui, Management Analyst ; and Michael Balliet Consulting, LLC
Attachment 1 YEARLY PERFORMANCE REVIEW OF CR&R, INCORPORATED (Per Section 40 of the Agreement ) Per Section 40 of the Agreement, the “DISTRICT shall complete a yearly performance review of the trash collection and recycling program on a yearly basis and CONTRACTOR and DISTRICT shall meet to discuss and resolve problems that may be occurring in the programs. DISTRICT shall prepare a performance review form that allows fo r evaluation of services provided at the residences as well as administrative services including report preparation, accuracy, timeliness of transmittal, responsiveness to inquiries, database management, service levels and helpfulness .” Agreement Between the Costa Mesa Sanitary District of Orange County, California, hereinafter called “DISTRICT”, and CR&R, Environmental Services . A California corporation hereinafter called “CONTRACTOR” for Trash Collection, Hauling, Special Service, Suppo rt of DISTRICT programs and recycling services. Service Description : CONTRACTOR furnishes all labor, material and equipment necessary for the collection of all solid waste as hereinafter defined from single family dwellings and multi -family dwellings using curbside service within the boundaries of the DISTRICT except certain residences in the geographical limits of the City of Newport Beach, as said boundaries now exist or may hereinafter exist and the disposal of such solid. CONTRACTOR provides containers for all single -family and small multi -family residents utilizing curbside collection inside the DISTRICT . CONTRACTOR provides transfer station services for the acceptance of Solid Waste from DISTRICT for the purpose of recovery and reclamation of recyclab le materials and the transfer of un -recyclable residue to Orange County landfill sites or otherwise as the DISTRICT may direct. Name of Contractor Address of Contractor CR&R , Environmental Services ________ 11292 Western Avenue ______________ __________________________________ Stanton, CA 90680 _________________ __________________________________ 714 -826 -9049 ______________________ __________________________________ __________________________________ __________________________________ __________________________________ Evaluation Term: J uly 1, 2013 – June 30, 2014
Attachment 1 PART I - EVALUATION OF CONTRACTOR'S PERFORMANCE The contractor should be evaluated using the following ratings: E = Excellent: Contractor exceeded the requirements. E xplain how. S = Satisfactory: Contractor met the requirements. If the contractor had difficulty meeting the requirements, explain why. U = Unsatisfactory: Contractor did not meet all of the requirements. Explain all noncompliance’s or unsatisfactory performance, and whether and how the contractor was at fault, where applicable. N/A = Not Applicable. Does not apply to the contract. EXPECTATION = DISTRICT’S expected corrective action or recommendation or notice for continued Excelle nt performance.
Attachment 1 1. Cost/Price Control (Para 2, 11 and Exhibit “A”). Rating: E: S: U: N/A: Trash Revenue Accounting (Para 28, 34) Rating: E: S: U: N/A: Most Favorable Net to Hauler Rate (Para 31) Rating: E____ S _ U____ N/A____. Consider: Did the contractor complete the contract within the contract amount or did the contractor experience cost growth? Were unnecessary cost/price change proposals submitted? Comments: Per the Second Amendment to the Agreement, “the District’s goal is to maintain net -to -hauler rates that do not exceed ten percent (10%) of the County average (less the AD project costing or other special charges making the rate comparison inequitable) during the term of this Agreement. District net -to -hauler rates shall be calculated each calendar year by taking the total compensation paid to Contractor and dividing it by the total number of units serviced (excluding the Organics Recycling Program charges)…” We found CR&R to be in compliance . 2. Schedule Control (Para 7, 8, 9, 10 ). Rating: E____ S _ U____ N/A____. Consider: Did the contractor meet the original performance schedule for route collections? Did the reported number of missed collections exceed three per month? Comments: None noted. 3. Contract Administration (Para 11 C ). Rating: E____ S _ U____ N/A____. Consider: Did the contractor respond to Government correspondence in a timely manner? Were contract modifications promptly executed? Were weight tickets submitted on time to validate invoicing? Did contractor submit the occupancy report within the first three days of the month (Para 4 , 17 )? Were invoices submitted correctly? Were contract discrepancies/problems reported promptly? Rating: E: S: U: N/A: Corporate Structure Changes Communicated (Articles, Bylaws, stock register/ownership, Statements) (Pa ra 5) Rating: E: S: U: N/A: Timely Weight Ticket Submittals (Para 16) Rating: E: S: U: N/A: $500 District Service Calls Paid (Para 22) Rating: E: S: U: N/A: Green Card Edit Submissions (Para 25) Rating: E: S: U: N/A: Transfer Station and/or AD Service (Para 27) Rating: E: S: U: N/A: Annual Facility Tours Provided (Para 32A) Rating: E: S: U: N/A: Annual Seminar Conducted (Para 32B) Rating: E: S: U: N/A: Biennial Brochure Mail out (Para 32C) Rating: E: S: U: N/A: Est. $10,000 Public Edu. Fund (Para 32D) Rating: E: S: U: N/A: Provided $500 Recycling Cash Donation (Para 32E) Rating: E: S: U: N/A: Triennial HHW Pick -Up (Para 32F) Rating: E: S: U: N/A: Annual $10,000.00 Cash or Services (Para 32F)
Attachment 1 Rating: E: S: U: N/A: Annual Safety EXPO Displays - $200.00 Prizes (Para 32B) Rating: E: S: U: N/A: Full Expenditure by end of FY (Para 32I) Rating: E: S: U: N/A: Annual Audited Financial Statements Provided with Audit Trails and All Recycled Materials Revenue (Para 34) Rating: E: S: U: N/A: $5,000 Anti -Scavenging Provided (Para 36) Rating: E: S: U: N/A: Master Manifest Availability (Para 37) Rating: E: S: U: N/A: Master Manifest Delivered Upon Request (Para 37) Rating: E: S: U: N/A: Tonnage Documentation by Truck Identification Number, Route and Date Electronically on the First Day of Each Month (Para 37) Rating: E: S: U: N/A: 50 Year Record Maintenance (Para 37) Rating: E: S: U: N/A: Master Manifest Completeness (Para 37) Rating: E: S: U: N/A: Annual Performance Review Participation (Para 40) Rating: E: S: U: N/A: DISTRICT Indemnification/Defense/Hold Harmless (Para 42) Rating: E: S: U: N/A: $50,000 Performance Bond Maintained (Para 44) Rating: E: S: U: N/A: $5,000,000 Public Liability Policy (Para 45) Rating: E: S: U: N/A: Worker’s Compensation Insurance Maintained (Para 46) Rating: E: S: U: N/A: Federal, State and Local Law Compliance (Para 47) Rating: E: S: U: N/A: Appropriate Licenses and Permits Maintained (Para 48) Rating: E: S: U: N/A: Employment / Non -Discrimination (Para 49) Rating: E: S: U: N/A: Drug Awareness Program Established and Maintained (Para 50) Rating: E: S: U: N/A: 40% or Greater Stock Assignment (Para 51) Comments: Per the First Amendment of the Agreement dated 10/27/11, CR&R, Environmental Services no longer provides triennial HHW pick -up services to CMSD customers. It does, however, provide each CMSD resident with three (3) large item pickups up to ten (10) items per call per year at no additional cost. 4. Responsiveness to Government . Rating: E____S_ U____N/A____. Consider: Were complaints from the District resolved in a reasonable and cooperative manner? Were telephone calls responded promptly? Were controversial issues resolved amicably? Was the contractor reasonable and responsive to the District’s needs? Rating: E: S: U: N/A: Public Outreach (Para 25, 32) Rating: E: S: U: N/A: Special Programs - Battery Recycling Program (Para 15 W ) Rating: E: S: U: N/A: Christmas Tree Collection (Para 15B)
Attachment 1 Rating: E: S: U: N/A: Holiday Collections (Para 10) Rating: E: S: U: N/A: Special/Humanitarian Requests (Para 15C) Rating: E: S: U: N/A: Up to 12 Excess Trash Pick -Ups/Year (Para15C) Rating: E: S: U: N/A: Residue/Flow Control (Para 29) Rating: E: S: U: N/A: Site Access to DISTRICT (Para 38) Rating: E: S: U: N/A: Plant Tours On Request (Para 39) Rating: E: S: U: N/A: DISTRICT Audit Rights Honored(Para41) Comments: Overall, CR&R is responsive to government . 5. Contract Compliance with Operational Requirements. Rating : E____S____U____N/A____. Consider: Were all of the contract requirements met? Were problems resolved? Are the delivered items or services used for the purpose intended? If not useable, why not? Specifically rate the following operational subcategories: Rating: E: S: U: N/A: Overall Quality of Service: Rating: E: S: U: N/A: Prompt Weekly Collection (Para 7) Rating: E: S: U: N/A: Contractor Equipment/Identification List/Environmentally Friendly Fuel Program (Para 12) Rating: E: S: U: N/A: Vehicle Waste Leak Prevention (Para 12) Rating: E: S: U: N/A: Vehicle Waste Leak Clean -Up (Para 12) Rating: E: S: U: N/A: Accumulated Trash Reported (Para 14) Rating: E: S: U: N/A: Vehicle Cleanliness (Para 12) Rating: E: S: U: N/A: Quarterly Signage Rotation (Para 12) Rating: E: S: U: N/A: Customer Satisfaction is Number 1 (Paras 20, 22, 36) Rating: E: S: U: N/A: Customer Change out Requests Rating: E: S: U: N/A: Accuracy, Thoroughness and Timeliness Rating: E: S: U: N/A: Adherence to Approved Schedules (Paras 7, 8, 9, 10) Rating: E: S: U: N/A: Resolution of Delays (Para 10) Rating: E: S: U: N/A: Notice of Labor Disputes/Resolutions (Para 10D) Rating: E: S: U: N/A: Provide and Maintain the Containers (Para 11B) Rating: E: S: U: N/A: 8AM -5PM Office Hours (Para 21) Rating: E: S: U: N/A: After Hours Voice -mail/Replies (Para 21) Rating: E: S: U: N/A: Monthly Complaint Log Delivery (Reports, Complaints and Pleadings) (Para22) Rating: E: S: U: N/A: AB939 Compliance (Para 27) Rating: E: S: U: N/A: AB939 Education Program Provided (Para 32, 6) Rating: E: S: U: N/A: Controllable Waste Delivered to MRF (Para 28) Rating: E: S: U: N/A: Waste Diversion (Para 30) Rating: E: S: U: N/A: Residue Sent to Designated Disposal Facility (Para 28)
Attachment 1 Rating: E: S: U: N/A: 50% Diversion Rate Met (Para 30) Rating: E: S: U: N/A: Maintained Graffiti -Free Containers (Para 36) Rating: E: S: U: N/A: Master Manifest (Para 37) Comments: CR&R’s overall quality of service is good but their customer service waiting times can be improve d . CR&R has run reports in which the average waiting time for a caller is anywhere between 30 -50 seconds and t heir longest waiting time has been 4 minutes. During FY 2013 -14, CMSD staff has received several calls from CMSD residents indicating that they have waited over 5 minutes while trying to contact customer service. Although CR&R disagrees with this claim, we need to ensure that CR&R has enough Customer Service Representatives (CSR’s) assigned to Costa Mesa. This will become important especially when we begin the new Organics Recycling Program in mid -January 2015, when having enough CSR’s will facilitate the s uccess of the new program. Also, p er the Second Amendment of the Agreement dated 2/25/14, states that, “All equipment used for collection of Solid Waste shall be enclosed to ensure that Waste is not spilled on the streets and private party…” However, there has been several hydrau lic spills from the CR&R trucks. Overall, CR&R has done a good job cleaning up the spills b ut they must try to minimize and/or prevent the spills from happening. 6. Key Personnel (Paras 5, 24). Rating: E____S___U____N/A____. Consider: Did the personnel have the knowledge and expertise necessary to perform the operat ional and management requirements? Were changes in key personnel made? How often were they made? Rating: E: S: U: N/A: District Approved Ops Mgr. (Para 20) Rating: E: S: U: N/A: Liaison/Interfaces Appointed (Para 24, 54) Rating: E: S: U: N/A: Driver Conduct/Uniforms (Para 26) Rating: E: S: U: N/A: Evidence of Driver Scavenging (Para 26) Rating: E: S: U: N/A: Driver Solicitation of Gratuities (Para 26) Rating: E: S: U: N/A: Employee Handbook (Para 26) Comments: None noted.
Attachment 1 7. Recommendation: Would you recommend this contractor for future contracts? Yes___No___. If no, please fully explain. Name of Evaluator: Javier Ochiqui Phone Number: (949) 645 -8400 ext. 222 Title of Evaluator: Management Analyst Signature:________________________________Date:_______________________ PART II -EVALUATION OF CONTRACTOR'S PERFORMANCE CONTRACTOR’S Review. I have reviewed the performance evaluation of CR&R under the July 20, 2006 Agreement and Amendments . I do concur____ I do NOT concu r____ with it. The attached comments consisting of ___ number of pages are returned herewith for review by an individual at a level above the contract management officer responsible for this contract. Name of Authorized Reviewer:_______________Phone Numbe r:_______________ Title of Reviewer:_________________________________________________________ Signature:___________________________Dat e:____________________________ PART III -EVALUATION OF CONTRACTOR'S PERFORMANCE DISTRICT Review of CONTRACTOR’S Comments. I have considered the comments submitted on the performance evaluation of CR&R under the July 20, 2006 Agreement and Amendments . The attachment to this form, consisting of ____ number of pages, is my final decision on this evaluation. Name of Reviewer:________________Phone Number:_______________ Title of Reviewer:________________________________________ Signature:_________________________________Date:______________________
C R&R/Costa Mesa Disposal Annual Review Assistance Fiscal Year 2013/2014 August 27, 2014 Prepared for the Costa Mesa Sanitary District by Michael Balliet Consulting, LLC Attachment 2
Costa Mesa Sanitary District C R&R/Costa Mesa Disposal Review Fiscal Year 2013/2014 P age 2 Michael Balliet Consulting, LLC T ABLE OF CONTENTS Executive Summary ................................................................................................ 3 Item 1 – Most Favorable Rate (Para 31) .................................................................. 4 Item 2 – Master Manifest (Para 37) ......................................................................... 7 Item 3 – Administrative Compliance (Para 46, 47, 48, 49 & 50) ............................. 9 Item 4 – Ownership Changes ( Para 51) .................................................................. 9 Item 5 – AB 939 Compliance (Para 27) ................................................................ 10 Item 6 – Waste Diversion (Para 30) ...................................................................... 14 Attachment 2
Fiscal Year 2013/2014 P age 3 Michael Balliet Consulting, LLC Ex e cutive Summary Michael Balliet Consulting, LLC (MBC) was previously ret ained by the Costa Mesa Sanitary District (CMSD) to perform a review of CR&R/Costa Mesa Disposal (CR&R). The purpose of that review was to establish CR&R’s compliance with agreement terms and performance during fiscal year 2011/2012. A series of 31 questions was developed by the CMSD to address compliance issues. Each of those 31 questions was addressed in detail, as part of four separate tasks, in the body of our previous report. The CMSD has retained us to provide a partial compliance review to assist the efforts of their staff. The new review is to reprise previous audit efforts and bring them current through fiscal year 2013/2014 in the following areas: Most Favorable Net-to-Hauler Rate Master Manifest to Verify Ultimate Diversion Compliance Administrative Compliance Ownership Changes AB 939 Compliance Waste Diversion For each review area listed above we found CR&R to be in Satisfactory compliance. The detail of our review is categorized by CMSD assigned sections for easy insertion into staff’s annual review report. Michael Balliet Project Auditor Attachment 2
Fiscal Year 2013/2014 P age 4 Michael Balliet Consulting, LLC Item 1 – Most Favorable Rate Our previous review noted our concerns with historic document ation of, and the established definition of “Most Favorable Rate” in the agreement with CR&R. In the “Second Amendment to Agreement Between Costa Mesa Sanitary District and CR&R Incorporated” clarification of the standard for “Most Favorable Rate” was established in a new Section 18 as follows: “CONTRACTOR shall submit an annual review of thirty-three (33) Orange County agencies comparable Net to Hauler rate and a justification of CONTRACTOR’s rates as being within ten percent (10%) of the average Net to Hauler rate (total amount Contractor is paid by District divided by the total number of units serviced) of the thirty-three (33) Orange County agencies. For the purpose of this review the City of Laguna Woods is excluded.” Additional stipulations are in place for the new Anaerobic Digestion facility costs. However, this facility was not utilized during the prescribed review period. Finally Section 31 of the Agreement was replaced with the following: “Most Favorable Net to Hauler Rate. The DISTRICT’s goal is to maintain net-to-hauler rates that do not exceed ten percent (10%) of the County average (less the AD project costing or other special charges making the rate comparison inequitable) during the term of this AGREEMENT. DISTRICT net-to-hauler rates shall be calculated each calendar year by taking the total compensation paid to CONTRACTOR and dividing it by the total number of units serviced (excluding Organics Recycling Program charges). Government entity administrative fees and franchise fees shall be excluded to attain the net to hauler calculation as set forth in Exhibit “B”. If CONTRACTOR net-to-hauler rate revenue exceeds ten percent (10%) of the County average, CONTRACTOR shall rebate to the DISTRICT the amount necessary to achieve the ten percent (10%) threshold. This annual reconciliation of the net-to-hauler rate revenues must be completed by August 1 st of the subsequent calendar year. Shown on the following pages are the data and calculations used to determine CR&R’s net-to-hauler revenue from the CMSD residential rate and the average net-to-hauler revenue realized in other Orange County jurisdictions: Attachment 2
Fiscal Year 2013/2014 P age 5 Michael Balliet Consulting, LLC CMSD - Fiscal Year 2013/2014 Net-To-Hauler Month/Year Report/Area Units Compensation Paid Invoiced Tons Per Unit Charge Month/Year Report/Area Units Compensation Paid Invoiced Tons Per Unit Charge Jul-13Invoice CRT - Area 9 197,856.84 $ 3,788.91 Jan-14Invoice CRT - Area 9 166,895.12 $ 3,196.00 Invoice CRT - SA Hghts 10,226.77 $ 195.84 Invoice CRT - SA Hghts 9,817.88 $ 188.01 CR&R Service Payment 196,941.80 $ CR&R Service Payment 197,289.71 $ July 2013 Totals 21,511 405,025.41 $ 18.83$ January 2014 Totals21,549 374,002.71 $ 17.36$ Aug-13Invoice CRT - Area 9 173,568.34 $ 3,323.79 Feb-14Invoice CRT - Area 9 140,847.28 $ 2,697.19 Invoice CRT - SA Hghts 8,465.37 $ 162.11 Invoice CRT - SA Hghts 8,077.39 $ 154.68 CR&R Service Payment 196,987.58 $ CR&R Service Payment 197,344.65 $ August 2013 Totals21,516 379,021.29 $ 17.62$ February 2014 Totals21,555 346,269.32 $ 16.06$ Sep-13Invoice CRT - Area 9 165,267.41 $ 3,164.83 Mar-14Invoice CRT - Area 9 164,717.21 $ 3,154.29 Invoice CRT - SA Hghts 8,950.51 $ 171.40 Invoice CRT - SA Hghts 8,892.53 $ 170.29 CR&R Service Payment 197,124.91 $ CR&R Service Payment 197,436.20 $ September 2013 Totals21,531 371,342.83 $ 17.25$ March 2014 Totals21,565 371,045.94 $ 17.21$ Oct-13Invoice CRT - Area 9 172,572.49 $ 3,304.72 Apr-14Invoice CRT - Area 9 169,546.88 $ 3,262.40 Invoice CRT - SA Hghts 10,689.44 $ 204.70 Invoice CRT - SA Hghts 8,745.51 $ 168.28 CR&R Service Payment 197,115.76 $ CR&R Service Payment 197,692.55 $ October 2013 Totals21,530 380,377.69 $ 17.67$ April 2014 Totals21,593 375,984.94 $ 17.41$ Nov-13Invoice CRT - Area 9 156,171.24 $ 2,990.64 May-14Invoice CRT - Area 9 179,015.04 $ 3,446.74 Invoice CRT - SA Hghts 8,590.71 $ 164.51 Invoice CRT - SA Hghts 8,988.74 $ 172.96 CR&R Service Payment 197,134.07 $ CR&R Service Payment 192,347.73 $ November 2013 Totals21,532 361,896.02 $ 16.81$ May 2014 Totals 21,599 380,351.51 $ 17.61$ Dec-13Invoice CRT - Area 9 160,046.98 $ 3,064.86 Jun-14Invoice CRT - Area 9 167,099.70 $ 3,215.31 Invoice CRT - SA Hghts 8,171.38 $ 156.48 Invoice CRT - SA Hghts 8,074.06 $ 155.36 CR&R Service Payment 197,298.87 $ CR&R Service Payment 192,410.07 $ December 2013 Totals21,550 365,517.23 $ 16.96$ June 2014 Totals21,606 367,583.83 $ 17.01$ FY13/14 4,478,418.72 $ 258,637 17.32 $ Net-to-Hauler Amount To determine if the $17.32 in CR&R net-to-hauler revenue was compliance with the Agreement (within 10% of County average) we performed a survey to establish “net-to-hauler” revenues in other Orange County jurisdictions. The results are shown on the following page: Attachment 2
Fiscal Year 2013/2014 P age 6 Michael Balliet Consulting, LLC Orange County Residential Trash Rate & Franchise Fee Survey (August 2014)#CITYFranchiseedba2010 Rate March 2013 Rate August 2014 Rate Special PaymentsFranchise Fee Rate Deduct City Fee Misc. Hauler Charges Net to Hauler 1YORBA LINDA Republic WasteYorba Linda Disp.19.45$ 19.45$ 19.45$ Charges Negate5.00%-$ 0.55 $ 20.00 $ 2ANAHEIM Republic WasteAnaheim Disposal19.53$ 19.53$ 19.90$ zero on residential -$ 19.90 $ 3HUNTINGTON BEACHRainbow Disposal 18.62$ 17.56$ 19.65$ zero on residential -$ 19.65 $ 4VILLA PARK Republic WasteVilla Park Disposal19.77$ 19.96$ 20.52$ 5.00%1.03 $ 19.49 $ 5GARDEN GROVE Republic WasteGarden Grove Disp.19.66$ 20.46$ 20.87$ 7.25%1.51 $ 19.36 $ 6STANTON CR&R Stanton Disposal 20.10$ 21.09$ 21.09$ 10.00%2.11 $ 18.98 $ 7SAN J. CAPISTRANO CR&R 17.26$ 18.44$ 19.27$ 5.00%0.96 $ 18.31 $ 8PLACENTIA Republic WastePlacentia Disposal20.61$ 20.61$ 22.84$ 20.00%4.57 $ 18.27 $ 9SAN CLEMENTE CR&R 16.65$ 18.02$ 18.80$ 5.00%0.94 $ 17.86 $ 10BREA Republic WasteBrea Disposal 18.21$ 18.43$ 19.72$ 10.00%1.97 $ 17.75 $ 11LAGUNA NIGUEL CR&R Solag Disposal 17.86$ 17.86$ 18.56$ 5.00%0.93 $ 17.63 $ 12FOUNTAIN VALLEYRainbow Disposal 17.83$ 17.39$ 18.84$ Billing Feezero on residential 1.21 $ 17.63 $ 13FULLERTON Republic WasteMG Disposal 18.02$ 18.60$ 18.85$ 7.00%1.32 $ 17.53 $ 14COSTA MESA CR&RCosta Mesa Disposal19.95$ 19.00$ 18.00$ Admin & Bill Feezero on residential 0.68 $ 17.32 $ 15SEAL BEACH ConsolidatedBriggeman Disposal17.02$ 17.30$ 18.02$ 7.00%1.26 $ 16.76 $ 16SANTA ANA Waste ManagementGreat Western 18.24$ 19.28$ 19.78$ 12.40%2.45 $ 15.81 $ 17TUSTIN CR&R 14.68$ 14.68$ 16.15$ $145,000 w comm'l$145,000 w comm'l 0.50 $ 15.64 $ 18LA PALMA EDCO Disposal Corp.Park Disposal 16.55$ 16.55$ 16.98$ 10.00%1.70 $ 15.28 $ 19ALISO VIEJO CR&R 14.72$ 14.72$ 15.82$ 5.00%0.79 $ 15.03 $ 20DANA POINT CR&R 14.93$ 15.11$ 15.78$ 5%0.79 $ 14.99 $ 21LAGUNA BEACH Waste Management 17.21$ 17.21$ 17.21$ 13.60%2.34 $ 14.87 $ 22LAGUNA HILLS CR&R Solag Disposal 14.27$ 15.33$ 16.07$ $250,000 w comm'l$250,000 w comm'l 1.23 $ 14.84 $ 23BUENA PARK EDCO Disposal Corp.Park Disposal 15.62$ 15.62$ 15.62$ Admin Feezero on residential 0.82 $ 14.80 $ 24CYPRESS ConsolidatedBriggeman Disposal14.81$ 15.48$ 15.77$ 8.00%1.26 $ 14.51 $ 25LA HABRA Waste Management 18.32$ 18.76$ 19.41$ 26.20%5.09 $ 14.32 $ 26RANCHO S. MARGARITACR&R 13.02$ 13.47$ 13.78$ 5.00%0.69 $ 13.09 $ 27LAKE FOREST CR&R 13.71$ 13.92$ 13.73$ 5.00%0.69 $ 13.04 $ 28WESTMINSTER Rainbow Disposal Midway San. Dist.14.75$ 14.75$ 14.75$ 13%1.92 $ 12.83 $ 29ORANGE CR&R 11.52$ 12.20$ 12.62$ Nonezero on residential -$ 12.62 $ 30MISSION VIEJO Waste Management 12.11$ 12.40$ 12.79$ 5.00%0.64 $ 12.15 $ 31LOS ALAMITOS Republic WasteConsolidated Disposal11.80$ 11.80$ 12.51$ 8.00%1.00 $ 11.51 $ 32IRVINE Waste Management 11.41$ 11.79$ 11.79$ 4.00%0.47 $ 11.32 $ 33NEWPORT BEACH CR&R Rate is a Citywide flat fee No complete unit count so estimate unavailable N/A Average 16.51$ 16.77$ 17.34$ 16.03 $ 3.38%34LAGUNA WOODS Ware DisposalWare Disposal 9.29 $ 9.11 $ 9.19 $ 5.00%0.46 $ 8.65 $ The current net-to-hauler average in Orange County is $16.00 per-unit per-month. Data for the City of Laguna Woods is excluded per the Agreement. Data for Newport Beach was not included as their residential hauler payment is a flat fee amount, regardless of active unit count. In discussions with the General Services Department (oversees Newport Beach’s residential franchise) they stated that a complete unit count is not available. Therefore no monthly rate or net-to-hauler calculations are possible. The District’s second amendment to the CR&R agreement was executed in February 2014. Therefore, net-to-hauler payments during the full review period are not subject to this new requirement. Attachment 2
Fiscal Year 2013/2014 P age 7 Michael Balliet Consulting, LLC T he reviewer recommends our study figures be used to establish a maximum net-to-hauler compensation level for fiscal year 14/15. The calculation below shows what that amount is: $16.00 (County Net-to-Hauler Average) + 10% ($1.60) = $17.60 Given CR&R’s $17.32 net-to-hauler compensation for fiscal year 2013/2014 it appears they are on pace to achieve Satisfactory compliance with Most Favorable Net-to-Hauler Rate requirements. Again, the results of their fiscal year 2014/2015 billings must be compared to the $17.60 maximum figure established herein to determine their true level of compliance. It should be noted that CR&R is responsible for performing this survey of jurisdictions. Therefore, the CMSD may be entitled to a rebate for the $1,050 amount the reviewer charged to perform this task. In addition the Agreement requires this review to be completed by August 1 st , thus the compelling reason for the CMSD to undertake the cost and effort required to perform this work through a third party. Item 2 – Master Manifest Section 37 of the Agreement was revised by the Second Amend ment so that it now reads as follows: “Master Manifest. CONTRACTOR shall maintain a master manifest in which the transportation and disposal of all waste from DISTRICT shall be logged. Such manifest shall show disposal volumes, nature of the waste, and transporter and disposal sites. All such records shall be provided to DISTRICT upon request. CONTRACTOR shall also document all tonnages by truck identification number, route, and date and provide this compiled data electronically to the DISTRICT within ten (10) business days each month. All of such records shall be kept for fifty (50) years. Such records shall be provided to DISTRICT’s personnel. CONTRACTOR will provide DISTRICT with an annual update to the master manifest that is consistent with the sample manifest identified in Exhibit “C”.” Our review of CR&R internal records showed they are correctly recording all tonnages collected under the Agreement. These records were confirmed to show truck identification numbers, corresponding routes, and dates of services as required. With regards to the master manifest, I met with CR&R staff and management to review the previous report and clarify data needed to comply with the annual update requirements. CR&R records were reviewed and the following master manifest was compiled: Attachment 2
Fiscal Year 2013/2014 P age 8 Michael Balliet Consulting, LLC CR&R 2013/2014 Master Manifest - CMSD Franchise Material Type CRT Recovered Materials All Jurisdictions (Tons)CMSD Franchise Tons Destination Facility Newspaper 4,236.21 622.21 Nine Draggons - Dongguah, China Cardboard 3,625.07 532.45 Nine Draggons - Dongguah, China Mixed Paper 4,236.21 622.21 Nine Draggons - Dongguah, China Glass 4,183.91 614.53 Strategic Mat'ls - Los Angeles, CA PET 379.51 55.74 America Chung Nam, City of Industry, CA HDPE 387.06 56.85 Ekman Recycling - Fontana, CA Aluminum Cans 151.78 22.29 Anheiser Busch, St. Louis, MO Non-Ferrous Metal 12.90 1.89 McCloud Metals, South Gate, CA Tin/Metal 2,094.31 307.61 McCloud Metals, South Gate, CA Green Waste 108,771.31 15,976.25 Orange County Landfill System Organic/Fines 2,262.44 332.31 Chiquita Canyon - Valencia, CA Wood 6,101.35 896.16 Olmak - Thermal, CA Concrete Asphalt 11,521.99 1,692.34 Arcadia Reclamation - Arcadia, CA Drywall 300.13 44.08 CR&R Organics - San Juan Capistrano, CA Mixed Plastic 387.06 56.85 Ekman Recycling - Fontana, CA Shrinkage 10,464.01 1,536.95 CRT Facility Internal Diversion Other 264.36 38.83 Various Recycled Tons 159,379.61 23,409.55 57.58%Total Landfill 17,245.02 Olinda, Bowerman, & Prima - OC Landfills Total Tonnage 40,654.57 The above data constitutes a “master manifest” for all CMSD franchise materials collected during fiscal year 2013/2014. The data provided above is consistent with internal records of CR&R Stanton and constitutes Satisfactory compliance with the master manifest provision requirements of the Agreement. The CMSD should clarify the continued need for such a manifest after use of the Perris AD facility begins. It is also recommended that an August 1 st deadline be established for this annual update to facilitate the District’s annual review process. Attachment 2
Fiscal Year 2013/2014 P age 9 Michael Balliet Consulting, LLC Item 3 – Administrative Compliance Section 44 of the agreement requires CR&R to furnish a faithf ul performance bond guaranteeing franchise service. With respect to compliance, CR&R provided proof of annual renewal (see attached). Section 45 of the agreement requires CR&R to carry various insurance policies at established limits. CR&R provided proof of all required insurance, along with endorsement pages (see attached). CR&R maintains permits and licenses with CalRecycle for the CRT MRF in Stanton (SWIS #30-AB-0013 – see attached). This facility is inspected annually by the Local Enforcement Agency (County of Orange) and is in full compliance. CR&R also maintains current permits with the Air Resources Board and South Coast Air Quality Management District for MRF operations. Motor carrier permits and driver registrations are also permitted through the State of California. CR&R produced documentation that shows their full compliance in these areas. With respect to local governments the County of Orange has waived franchise rights to the Santa Ana Heights area, deferring to the CMSD. CR&R has obtained a hauler permit from the City of Costa Mesa for their commercial franchise activity, though such a permit is not required to perform CMSD service. All that is required is a Costa Mesa business license, which CR&R has obtained (see attached). Finally, I confirmed that CR&R has maintained its written employment policy stipulating that all their facilities are to be drug free. Employees must agree to be drug-free as a condition of employment and CR&R employs a private company to provide periodic, random drug tests on all employees. CR&R is taking every reasonable measure to make employees aware of the policy and a review of records shows they are regularly conducting employee awareness meetings and administering their random drug-tests properly. CR&R has achieved Satisfactory compliance with all Administrative areas under review, without exception or comment. Item 4 – Ownership Changes Our review with CR&R management has confirmed that no st ock assignment, greater than 40%, occurred during fiscal year 2013/2014. Satisfactory compliance has been achieved. Attachment 2
Fiscal Year 2013/2014 Page 10 M ichael Balliet Consulting, LLC Task 5 – AB 939 Compliance By collecting and processing all solid waste under the Agre ement, CR&R has shown compliance with this major AB 939 compliance measurement. In addition CR&R undertook the following AB 939 compliance efforts during the past fiscal year: Contractor Outreach / E ducation In June 2012, all residential customers received by direct ma il a service guide providing detailed information about available service. The guide also informed them of the material recovery facility (MRF) used to recycle waste collected from their residences. To further reach the residents, the guide had been hand delivered to all Costa Mesa Libraries and Community Centers in July 2013 and July 2014. In September 2013, CR&R implement a Battery Recycling Pilot Program that focused on collecting alkaline batteries from schools. This program r an through the end of May 2014. With five participating schools (Christ Lutheran, Davis Magnet, Kline School, Estancia High and Waldorf) a total of 4,153 pounds of alkaline batteries where co llected. At the request of the District, in June, CR&R provide a flyer to further promote the new Organic Waste program (shown below): Attachment 2
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Fiscal Year 2013/2014 Page 13 M ichael Balliet Consulting, LLC T hroughout fiscal year 2013/2014, CR&R in conjunction with CMSD provided several town hall meetings to inform residents of Costa Mesa about the new Organic Waste program to commence in January 2015. CR&R provided flyers to the District and at various events to assist with further outreach. For example, flyers were distributed at the 2014 Concerts In The Park series. An organics cart was also on display at these concerts. CR&R, when requested by the District, provided tours of the Material Recovery Facility. Last year tours included District Staff, Estancia High School, Mariners Elementary School and Costa Mesa College Park Elementary. In March, 2014, CR&R staff participated in the Costa Mesa High School Environmental Fair, in which over 800 Costa Mesa students attended. CR&R staff, along with Costa Mesa Sanitary district staff, promoted recycling, composting, and explained the diversion process through the use of the single cart system. C R&R also continued to supply special bins and service to assist the District with the annual telephone book contest. In December, CR&R delivered 17 bins to schools to facilitate special weekly collection service for a five-week period. The schools collected about 2,530 pounds of telephone books. CR&R continues to provide roll-off containers, special even t boxes and/or service to the community in an effort to promote recycling. On May 10 t h CR&R provided two roll-off boxes for the CMSD’s second community Household Hazardous Waste (HHW) Collection event. The event attracted 236 vehicles from Costa Mesa, Newport Beac h and Irvine and collected over 20,000 pounds of unwanted household materials such as motor oil, paint, antifreeze, pesticides, and batteries. T ruck Messaging Signage: In addition to the Costa Mesa Sanitary District truck si gns, “Costa Mesa Sanitary District Recycles”, CR&R designed and used three additional rotating recycling messages banners. June/July 2013 – City of Costa Mesa 60th Anniversary November 2013 – Christmas Tree Collection Program January 2013 – Large Bulky Item Pick-Up Our review has determined that CR&R achieved Satisfactory compliance with the AB 939 compliance requirements of the Agreement. Attachment 2
Fiscal Year 2013/2014 Page 14 M ichael Balliet Consulting, LLC Task 6 – Waste Diversion Our review of records has confirmed that 100% of solid waste c ollected is taken to the Stanton MRF for processing. The table below shows the diversion rates achieved for each quarter during the review period: 2013/2014 Diversion Compliance P eriodAreaDiverted TonsDisposed TonsPeriodAreaDiverted TonsDisposed Tons Jul-1392,203.59 1,606.15 Jan-1491,873.52 1,365.63 11101.78 94.06 1168.96 63.73 Aug-1391,970.27 1,377.64 Feb-1491,560.05 1,137.14 1153.88 108.23 1180.39 74.29 Sep-1391,830.57 1,334.26 Mar-1491,818.62 1,325.60 1189.08 82.32 1178.10 72.17 Oct-1391,911.48 1,393.24 Apr-1491,866.28 1,403.30 11106.39 98.31 1187.46 80.82 Nov-1391,729.82 1,260.82 May-1491,967.40 1,479.34 1185.50 79.01 1187.45 85.50 Dec-1391,768.98 1,289.37 Jun-1491,835.30 1,380.01 1181.83 75.15 1187.46 67.90 Total Diversion Reported = 23,344.16 Total Disposal Reported = 17,333.99 2013/2014 Diversion Rate = 57.39% S ubsequent to our previous review of CR&R a waste characterization and diversion study was performed. This review confirmed that the reported 57% diversion rate was accurate. However, the allocation of diversion by materials types, used in monthly reports to the CMSD, was not. At this juncture the diversion efforts of CR&R are to be altered dramatically with the inclusion of separate organics collection and processing. At that time we believe monthly diversion reports should reconcile to facility master manifest data. Until that time we believe diversion rate compliance measurement, both by this study and the previous characterization, confirms that the reported total diversion rate shown above is accurate. Section 30 of the agreement was amended to add the use of “CONTRACTOR best efforts” to achieve the DISTRICT goal of achieving 75% diversion by 2015. We believe these best efforts are being achieved through CR&R’s $20 million investment in an Organics Processing Facility in Perris, CA. Based upon provided data this facility will increase overall diversion to the 75% level some time during calendar year 2015. This organics facility is currently under construction and on schedule to open January 1, 2015. The following pictures show the current progress: Attachment 2
Fiscal Year 2013/2014 Page 15 M ichael Balliet Consulting, LLC Attachment 2