REPORT TO COUNCIL
SUBJECT
Title
Award an Agreement for Operation of the Sunnyvale SMaRT(r) Station to Bay Counties Waste Services
Report
REPORT IN BRIEF
The current operating agreement with Bay Counties Waste Services (BCWS) expires December 31, 2021. Staff recommends awarding a new single source agreement to BCWS in order to avoid changing operators during a planned major retrofit of the SMaRT Station which will be completed by the end of 2025. Staff recommends that the agreement year be aligned to the fiscal year and provide sufficient time to complete the Station retrofit and obtain operating data for the retrofitted equipment before issuing an RFP in 2026 for the next SMaRT Station operating agreement.
The terms of the new negotiated agreement include changes to how BCWS is compensated for union labor and the depreciation of new equipment. The recommended terms also allow BCWS to continue utilizing existing equipment (trucks, loaders, forklifts, etc.) that still has useful life. The recommended terms shift the cost of the recycling and composting of negative value recyclables and of SMaRT Station electricity from the Contractor to the City, require BCWS (instead of third-party contractors) to haul organics to compost facilities, create a "floor" and a "ceiling" for the recyclables revenues shared with BCWS, reduce compensation to reflect reduced inbound tonnage (loss of Palo Alto), and increase BCWS waste studies and reporting to meet SB 1383 requirements.
During negotiations, BCWS agreed to reduce their annual compensation by 3% at the beginning of the new agreement, to forgo reimbursement of approximately $350,000 of increased transportation cost owed to them for 2021, and to provide $538,640 worth of undepreciated equipment to the City for no additional compensation.
Due to the substantial increase in labor and organic processing costs, the overall SMaRT Station operational costs will increase by 6% in the first year and then by approximately 5% ...
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