Title
MOTION TO APPROVE THE SECOND AMENDMENT TO THE AGREEMENT FOR RESIDENTIAL SOLID WASTE AND COMMERCIAL WASTE COLLECTION SERVICES WITH WASTE PRO OF FLORIDA, INC. TO UPDATE THE DISPOSAL FACILITY TO WASTE CONNECTIONS OF FLORIDA, INC.
Summary Explanation and Background
SUMMARY EXPLANATION AND BACKGROUND:
1. On September 1, 2021, the City Commission approved the franchise agreement with Waste Pro of Florida, Inc. for Residential Solid Waste, Residential Recycling, and Commercial Waste Collection and Disposal Services.
2. The agreement is for an initial period commencing on January 2, 2022 through September 30, 2028. In addition, the term may be extended for one (1) additional seven (7) year term, subject to the execution of a written amendment to the agreement signed by both parties.
3. The Commercial Waste Collection services is a Turnkey Solution, in which Waste Pro is responsible for paying the tipping fees at the disposal site. In the event that there is a change to the tipping fee at the Disposal Facility, the Disposal Fee portion of the rates shall be adjusted by re-calculating the Disposal Fees based on the percent of change in the tipping fee at the Disposal Facility.
4. The Residential Solid Waste and Recycling Services is a Collection Only Solution, in which Waste Pro shall be responsible for taking the commingled solid waste and recyclables to the designated disposal facility, however the City shall pay the actual disposal fees charged at the Disposal Facility.
5. The collection portion of the fees outlined in the original agreement is applicable to any disposal facility that may be located in the 10 mile radius from the center of Pines Boulevard and Flamingo Road. In addition, the initial collection rates shall remain firm through September 30, 2023 and on October 1, 2023, and annually thereafter, the rates shall be automatically increased according to the annual Consumers Price Index for All Urban Consumers (CPI/U), Seasonally Adjusted as published by U. S. Department of Labor, Bureau of Labor Statistics in the Detailed Report Series ID: CUSR0000SEHG - “Water and Sewer and Trash Collection Services” in U.S. city average for the annual change for the month of April or 3.5%, whichever is less but not less than zero. In addition, in the event that there is a change to the tipping fee at the Disposal Facility, the Disposal Fee portion of the rates shall be adjusted by re-calculating the Disposal Fees based on the percent of change in the tipping fee at the Disposal Facility.
6. On February 16, 2022, the City Commission approved the first amendment to the agreement to include the option for residents to use the Blue Carts, once per week, for co-mingled solid waste, at an additional cost of $2.00 per month.
7. On August 30, 2023, in lieu of utilizing the waste-to-energy services provided by WIN-Waste Innovations (formerly known as Wheelabrator Environmental Systems, Inc.) via the interlocal agreement (ILA) with Broward County for solid waste disposal and support services, the City Commission approved to enter into a new agreement with Waste Connections of Florida for Solid Waste Disposal Services for an initial three-year period, commencing on October 1, 2023 through September 30, 2026, with the option to renew for additional one-year renewal periods, upon mutual written consent of the parties.
8. The agreement with Waste Connections of Florida was approved by the City Commission in the best interest of the City for the following reasons:
a) The City’s current Interlocal Agreement with Broward County for solid waste disposal expires September 30, 2023;
b) The City was required to advise Broward County no later than September 1, 2023, whether it intended to enter into a Second Amendment for Solid Waste Disposal, which would require the City to agree to a five-year term, through July 2, 2028;
c) The current provision in the ILA wherein WIN-Waste Innovations covers any additional transportation and tipping costs at the Alternate Disposal Facility for processable waste above 725,000 tons ended on June 30, 2023, and it will not be responsible for the cost of transporting waste to the Alternate Disposal Facility, which is an unknown cost to the City for future periods which could affect residential and commercial customer rates.
d) If the City entered into the Second Amendment to the ILA, the City would have to give its written notice to the County prior to October 2026 on its intent not to renew, or the ILA would be renewed again through July 2033.
e) The City Administration has been able to negotiate terms with Waste Connections of Florida that are more favorable for the City, including a shorter term; and,
f) The Agreement with Contractor would enable the City to provide the same services to its residents and businesses at a comparable rate and with a term that is more favorable in that the City can continue to explore legally available disposal options to implement in the future.
9. The Waste Connections of Florida agreement provides for two disposal facilities. The Pembroke Park Recycling and Transfer Facility could only accept 2,000 tons per month, therefore the City plans to have the Bulk Waste delivered to this location and the other waste streams delivered to the Deerfield Beach Recycling and Transfer Facility. Below are the negotiated rates for the two disposal facilities:
- $55.00 per ton at the Deerfield Beach Recycling and Transfer Facility, which is in a 30 mile radius from the center of Pines Boulevard and Flamingo Road.
- $61.81 per ton at the Pembroke Park Recycling and Transfer Facility, which is in a 10 mile radius from the center of Pines Boulevard and Flamingo Road.
10. The current per ton disposal rate at WIN-Waste Innovations is $51.68 for residential waste and $64.36 for commercial waste through September 30, 2023 and is scheduled to go up to $54.26 and $66.94, respectively, through September 30, 2024, however this rate may need to be adjusted due to potential tipping costs at the Alternate Disposal Facilities for processable waste above 725,000 tons for members of the ILA, resulting in an unknown cost to the City.
11. As a result of the change in disposal facilities, the agreement with Waste Pro needs to be amended to update the disposal facility to Waste Connections of Florida, Inc. Even though the Deerfield Beach Recycling and Transfer Facility is in a 30 mile radius from the center of Pines Boulevard and Flamingo Road, in lieu of a 10 mile radius, Waste Pro and the City's Administration has agreed not to adjust the disposal fee portion of the residential or commercial rates due to the impact of the change in fee at the disposal site or the distance of the disposal site.
12. Recommend the City Commission to approve the second amendment to the agreement for Residential Solid Waste and Commercial Waste Collection Services with Waste Pro of Florida, Inc. to update the disposal facility to Waste Connections of Florida, Inc.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: The cost of solid waste collection and disposal services are paid by the residents and business owners in Pembroke Pines. Rates for future periods are subject to CPI changes, and increases as outlined in the attached agreement.
b) Amount budgeted for this item in Account No: Not Applicable.
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: Not Applicable.
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Not Applicable.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Not Applicable.