07 - City of Newport Beach Residential SW & Recycling Study P rotecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum T o: Operations Committee From: Scott Carroll , General Manager Date: December 11 , 2012 Subject: City of Newport Beach Residential Solid Wa ste & Recycling Study Summary On November 27, 2012, the Newport Beach City Council received a study about the City’s refuse collection services. There were several objectives identified in the study, but the primary purpose was to determine the feasibilit y for outsourcing this service. Staff has rev iewed the study and has provided some of the key elements below. The following is a link to download the study. http://newportbeach.granicus.com/MetaViewer.php?view_id=44&clip_id=1662&meta_i d=130710 Staff Recommendation That the Operations Co mmittee receive and file this report. Analysis The City of Newport Beach hired HF&H Consultants to perform a study ab out the City’s refuse collection services. The study provides some very good information about the City’s in -house refuse collection program, which I have provided below. • The study estimates that the full cost to provide the service is $17.84 a month per residential account. • The study estimates that the net cost, excluding overhead, is approximately $15.56 a month. • Newport Beach residents have unlimited refuse collection in containers provided by residents (manual collection service).
Operations Committee December 11 , 201 2 Page 2 of 3 • The study acknowledg es that other cities may benefit from integrated residential and commercial contracts and rate structures (exclusive franchise agreements). • The collection is similar to CMSD’s program in which it consist of a mixed waste processing where recyclables and r efuse are transported to CR&R’s transfer station in Stanton. There, the recyclables are removed from the refuse and then the refuse is transported to the landfill. • Residents are charged/billed $2.96 a month to fund the additional cost of mixed waste proce ssing program to recover recyclables. • CR&R is required to divert 40% from the landfill • The cost to divert 40% is $46.32 a ton There has been interest among the Board to inquire the cost for diverting less than 50%, as stipulated in CMSD’s contract with CR &R. Using the information from this study staff can estimate a possible rate for diverting 40%. At $46.32 a ton, staff estimates CMSD’s full rate would be $18.40 a month (assuming all other expenditures remain the same). If the Board wants to continue u sing its Solid Waste Fund Balance to lower the rate by one dollar the full rate would be $17.40 a month. This possible rate reduction maybe enticing to explore further, but I do not recommend it for several reasons as cited below. 1. Diverting 40% of waste from the landfill does not meet CMSD’s mission to protecting the environment. 2. The City of Costa Mesa is the agency responsible for reporting and meeting state mandates for reducing refuse from entering the landfill. The City will be responsible for making up the 10% difference if CMSD lowers its threshold. 3. In the 2012 Customer Satisfaction Survey, the majority of residents surveyed indicated they want CMSD to divert more refuse from the landfill. More key elements from the study is provided below. • The City receives a credit of $92.51 per load of refuse transported to CR&R’s transfer station. • The City does not have a formal large item collection program, but the City will collect times that can be easily broken up. • Appliances are not picked up by the Cit y. • The City has 18 refuse trucks servicing 26,500 residential accounts, excluding Newport Coast. • The value of the City’s refuse trucks is approximately $1 to $1.4 million. • The City would have to pay a one -time labor cost payoff of $505,000 to privatize sol id waste operations that includes accrued vacation, sick leave and severance payments.
Operations Committee December 11 , 201 2 Page 3 of 3 • The study used CMSD’s net rate as comparison. The study estimated CMSD’s net rate at $16.96 a mon th when in actuality it’s $17.27 a month. • Privatizing the City’s soli d waste operations could range from an increase in annual costs of $171,000 to a savings of approximately $1,476,000 to $1,670,000. After receiving and discussing the study , the City Council directed staff to negotiate a contract with HF&H Consultants to develop a Request for Proposal (RFP) to solicit said proposals from private solid waste haulers. Strategic Plan Element & Goal This item complies wi t h the objective and strategy of Strategic Element 2 .0, Solid Waste , which states the following: Object ive: Our objective is to manage the collection and recycling of residential trash in the most economical and environmentally friendly way. Strategy: We will do this by looking for ways to improve efficiencies, achieve high customer satisfaction, and co nsidering prudent new recycling methods. Legal Review Not applicable Financial Review There is no financial impact to the District. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the Decemb er 11 , 2012 Operations Committee meeting at District Headquarters and on District’s website. Alternative Actions 1. Direct staff to report back with more information.