2012-27904 Reso Inc. RESOLUTION NO. 2012-27904
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING A ONE (1) YEAR RENEWAL OF THE
FRANCHISE AGREEMENTS WITH THE CITY'S THREE (3) EXISTING
FRANCHISE WASTE CONTRACTORS: WASTE MANAGEMENT INC. OF
FLORIDA; WASTE SERVICES INC. (WSI); AND CHOICE EVIRONMENTAL;
WITH SUCH RENEWAL TERM COMMENCING UPON THE EXPIRATION OF
THE CURRENT INITIAL TERM OF SAID FRANCHISE AGREEMENTS, OR ON
OCTOBER 1, 2014, AND ENDING ON SEPTEMBER 30, 2015; FURTHER
APPROVING THE AFORESTATED RENEWALS SUBJECT TO AND
CONDITIONED UPON THE FOLLOWING: A) THE CITY'S AMENDMENT OF
SECTION 90-230(B) OF THE CITY CODE (IN ORDER TO PERMIT THE CITY
TO EXERCISE THE AFORESTATED RENEWAL TERMS PRIOR TO
EXPIRATION OF THE INITIAL TERM OF THE CURRENT FRANCHISE
AGREEMENTS); AND B) SUCCESSFUL NEGOTIATION BY THE CITY AND
THE THREE (3) CURRENT FRANCHISEES OF AN AMENDMENT TO THE
CURRENT SERVICE AGREEMENT BETWEEN THE CITY AND THE THREE
(3) EXISTING FRANCHISE WASTE CONTRACTORS, TO PROVIDE
ADDITIONAL BENEFITS TO THE CITY (INCLUDING, WITHOUT LIMITATION,
ADDITIONAL MONETARY CONTRIBUTIONS IN THE AMOUNT OF $390,000,
AND $25,000 PER YEAR).
WHEREAS, Chapter 90 of the City Code is the City's Solid Waste Ordinance (the Solid
Waste Ordinance or the Ordinance); and
WHEREAS, one of the City's solid waste hauler franchisee, General Hauling Services,
Inc., was acquired by another City Franchisee, Waste Services, Inc., leaving the City with three
(3) remaining solid waste franchise contractors; and
WHEREAS, at the July 13, 2011 City Commission Meeting, the City Administration
requested approval to issue a Request For Qualifications (RFQ) for a fourth solid waste
franchise contractor to provide residential and commercial solid waste collections and disposal
services; and
WHEREAS, the City Commission referred the item to the Finance and Citywide Projects
Committee (F&CWPC); and
WHEREAS, at its January 19, 2012 meeting, the F&CWPC recommended that the
issue be brought back to the Committee at the same time as the City's proposed Recycling
Ordinance; and
WHEREAS, since then, the three (3) existing franchise waste contractors, Waste
Management Inc. of Florida, Waste Services Inc. (WSI), and Choice Environmental, have
requested that the City not proceed with the issuance of an RFQ for a fourth waste hauler; and
WHEREAS, in considereation of this request, the City Administration has been meeting
with the three (3) existing franchise waste contractors to discuss potential additional benefits
and/or contributions to the City; and
I
WHEREAS, following negotiations, the franchisees' best and final offer is premised upon
the City Commission's agreement not to issue an RFQ for a fourth franchise waste contractor
and, further, the City's agreement to renew the franchise agreements; and
WHEREAS, at the May 9, 2012 City Commission meeting, the City Commission
determined that, premised upon the contractors' agreement to provide the City with certain
additional contributions, which would be allocated by the City toward additional public waste
collection and disposal, recycling, and sustainability initiatives and programs, it would be in the
City's best interest to not issue the RFQ for a fourth hauler and, in the alternative, renew the
three (3) existing franchise agreements for an additional one (1) year (with such renewal term
commencing on October 1, 2014, and ending on September 30, 2015); and, further, condition
such renewal upon the successful negoiation of an amendment to the existing Service
Agreeement by and among the City and the three (3) franchisees, to provide for additional
public benefits (in addition to what is already being provided under such Agreement) (including,
without limitation, additional monetary contributions to the City, in the amount of $390,000 per
year, and $25,00 per year).
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
approve a one (1) year renewal of the franchise agreements with the City's three (3) existing
franchise waste contractors: Waste Management Inc. Of Florida; Waste Services Inc. (WSI);
and Choice Evironmental; with such renewal term commencing upon the expiration of the
current initial term of said Franchise Agreements, or on October 1, 2014, and ending on
September 30, 2015; further approving the aforestated renewals subject to and conditioned
upon the following: a) the City's amendment of Section 90-230(b) of the City Code (in order to
permit the City to exercise the aforestated renewal terms prior to expiration of the initial term of
the current Franchise Agreements); and b) successful negotiation by the City and the three (3)
current franchisees of an amendment to the current Service Agreement between the City and
the three (3) existing franchise waste contractors, to provide additional benefits to the City
(including, without limitation, additional monetary contributions in the amount of $390,000, and
$25,000 per year).
PASSED AND ADOPTED THIS DAY OF M a 4, 2012.
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APPROVED AS TO
FORM&LANGUAGE
& EXECUTION
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Condensed Title:
A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, To Consider 1)
Whether To Issue A Request For Qualifications For A Fourth Franchise Waste Contractor For Residential
And Commercial Solid Waste Collections And Disposal; Or, In Alternative, 2) Renew The Franchise
Agreements With The City's Three (3) Existing Franchise Waste Contractors, For An Additional Three (3)
Year Term, Subject To A) Amending Section 90-230(b) Of The City Code, In Order To Permit The City To
Exercise Such Renewal Terms Prior To Expiration Of The Initial Term Of The Franchise Agreements; And
B) An Amendment To The Current Service Agreement Between The City And The Existing Three (3)
Franchise Contractors To Provide For Additional Benefits To The City.
Key Intended Outcome Supported:
Supporting Data (Surveys, Environmental Scan, etc.): N/A
Issue:
Shall the Mayor and the City Commission approve the Resolution?
Item Summa /Recommendation:
At the July 13, 2011 Commission Meeting, the City Administration requested approval to issue a Request
For Qualifications (RFQ) for a fourth solid waste franchise contractor to provide residential and
commercial solid waste collection and disposal services. This request was made after one of the existing
four (4) solid waste franchise contractors, General Hauling Services, Inc., was acquired by Waste
Services, Inc., leaving the City with three (3) solid waste franchise contractors. The Commission referred
the item to the Finance and Citywide Projects Committee (F&CWPC). At the January 19, 2012 F&CWPC
meeting, following discussion on whether to issue the RFQ, the Committee recommended that it be
brought back to the Committee at the same time as the City's proposed Recycling Ordinance. The three
existing franchise contractors have requested that an RFQ not be issued. Since the F&CWPC January 19,
2012 meeting, the City Administration has met with the three current contractors (Waste Management of
Dade County, Waste Services, Inc., and Choice Environmental Services of Miami) to discuss potential
additional benefits and/or contributions to the City. The item was discussed again at the April 19, 2012
F&CWPC meeting, and the recommendation was to bring the discussion to the full City Commission.
Subsequent to the April 19th F&CWPC meeting, the City Administration continued to meet with the three
existing solid waste contractors, at which time the contractors promised the following best and final offer:
an increase of$300,000/year to their existing public benefit contribution; a new $25,000/year contribution
to support City affiliated environmental groups; and an increase of one half of a percent (.5%) of their
percentage of gross revenues payments to the City (from 1.5% to 2%) for sustainable, or "green",
initiatives in the City of Miami Beach. (The increase would represent approximately $90,000/year in
added revenue to the City). The best and final offer is premised upon the City Commission's agreement
not to issue an RFQ for a fourth franchise waste contractor and, further, to prematurely exercise the three
year renewal term in each of the franchise agreements which would renew the current three agreements
until September 30, 2017. The City Administration recommends that the City Commission evaluate the
additional benefits and/or contributions proposed by the existing three (3) contractors, and determine
whether to proceed to issue an RFQ for a fourth franchisee, or keep the status quo, subject to the
aforestated conditions.
Advisory Board Recommendation:
At the A ril 19, 2012, the FCWPC recommended discussion by the full City Commission
Financial Information:
Source of Amount Account Approved
Funds: 1
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Fred Beckmann, Ext. 6012
Sign-Offs.
Department Director Assistant City: bjoprl City Manager
FHB J G G JMG
TAFourth Waste Hauler Comm.2012-05-09.SUMMARY '
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City of Miami Beath, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: May 9, 2012
SUBJECT: A RESOLUTION OF THE MAYOR ND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, TO CONSIDER 1) WHETHER TO ISSUE A REQUEST FOR
QUALIFICATIONS FOR A FOURTH FRANCHISE WASTE CONTRACTOR FOR
RESIDENTIAL AND COMMERCIAL SOLID WASTE COLLECTIONS AND DISPOSAL;
OR, IN ALTERNATIVE,2)RENEW THE FRANCHISE AGREEMENTS WITH THE CITY'S
THREE 3 EXISTING FRANCHISE WASTE CONTRACTORS, FOR AN ADDITIONAL
THREE (3) YEAR TERM, SUBJECT TO A) AMENDING SECTION 90-230(b) OF THE
CITY CODE, IN ORDER TO PERMIT THE CITY TO EXERCISE SUCH RENEWAL
TERMS PRIOR TO EXPIRATION OF THE INITIAL TERM OF THE FRANCHISE
AGREEMENTS;AND B)AN AMENDMENT TO THE CURRENT SERVICE AGREEMENT
BETWEEN THE CITY AND THE EXISTING THREE (3) FRANCHISE CONTRACTORS
TO PROVIDE ADDITIONAL BENEFITS TO THE CITY.
ADMINISTRATION RECOMMENDATION
The City Administration recommends that the City Commission evaluate the additional public
benefits and/or contributions proposed by the existing three (3) solid waste franchise contractors,
and the conditions for receipt of such benefits, and determine whether it is an acceptable option.
Alternatively,the City Commission may wish to proceed to issue a Request for Qualifications(RFQ)
for a fourth franchise waste contractor.
BACKGROUND
At the July 13, 2011 Commission Meeting, the City Administration requested approval to issue a
Request For Qualifications(RFQ)for a fourth solid waste franchise contractor to provide residential
and commercial solid waste collection and disposal services. This request was made after one of
the existing four(4)solid waste franchise contractors, General Hauling Services, Inc.,was acquired
by Waste Services, Inc., leaving the City with three (3) solid waste franchise contractors. The
Commission referred the item to the Finance and Citywide Projects Committee(F&CWPC). At the
January 19, 2012 F&CWPC meeting, following discussion on whether to issue the RFQ, the
Committee recommended that it be brought back to the Committee at the same time as the City's
proposed Recycling Ordinance. The three existing franchise contractors have requested that an
RFQ not be issued. Since the F&CWPC January 19, 2012 meeting,the City Administration has met
with the three current contractors (Waste Management of Dade County,Waste Services, Inc., and
Choice Environmental Services of Miami) to discuss potential additional benefits and/or
contributions to the City. The existing three (3) contractors currently provide in-kind and cash
benefits to the City in the amount of$1,618,750 over a five (5) year period, or$323,750 per year.
The item was discussed again at the April 19, 2012 F&CWPC meeting, and the recommendation
May 9, 2012
City Commission Memorandum
Fourth Solid Waste Hauler
Page 2 of 3
was to bring the discussion to the full City Commission to whether or not issue the RFQ or accept
additional public benefits from the contractors in exchange for keeping it to the three (3) existing
contractors.
Following the April 19, 2012 F&CWPC meeting, the City Administration met with the three (3)
existing solid waste franchise contractors, at which time the contractors presented the following best
and final offer:
■ An increase of$300,000/year to their existing public benefit contribution;
■ A new$25,000/year contribution to support City affiliated environmental groups; and
An increase of one half of a percent(.5%)to their percentage of gross revenue payments to the City
to support sustainable, or "green" initiatives in the City of Miami Beach (increasing the current
payment from 1.5% to 2%). The increase would represent approximately $90,000/year in added
revenue to the City.
As consideration for the above best and final offer, the franchise waste contractors would require
that the City:
■ Not proceed to issue the RFQ for the fourth franchise waste contractor, and agree to
maintain the number of franchise contractors at three (3), until the expiration of the
proposed renewed agreement (September 30, 2017) ;
■ Agree to an early renewal of the current franchise agreements. If renewed, the
agreements, which have an initial five (5) year term that expires on September 30, 2014,
would continue in effect until September 30, 2017(i.e.the renewal term would be for three
(3)years, commencing on October 1, 2014). It shoud be noted that, in order for the City to
exercise an early renewal of the franchise agreements, the City Commission would also
have to amend Section 90-230(b) of the City Code, which currently only allows for the
renewal of a franchise agreement upon expiration of the initial term. Additionally, the
additional public benefits and other considerations in the "best and final" offers would
require an amendment to the existing Service Agreement between the City and the
franchise contractors.
ANALYSIS
In evaluating the aforestated proposal from the three(3)solid waste franchise contractors, the City
Administration considered the following pros and cons:
Pros
Best and final offer provides an increase of$300,000/year to the franchisees'existing public benefit
contributions,which the City Administration recommends to be applied as follows: $210,220 to fund
the residential recycling collection service; $65,000 toward the disposal of illegal dumping (estimated
at 70 tons/month); and$24,780 toward the annual refurbishment of approximately 120 existing litter
containers.
May 9, 2012
City Commission Memorandum
Fourth Solid Waste Hauler
Page 3 of 3
Best and final offer provides a new$25,000/year contribution to support the activities of affiliated
environmental groups within the City.
Environmental benefits would be derived, as concluded in the"Waste Collection Services—Truck
Impacts Miami Beach, FL"evaluation prepared by Kimley Horn and Associates, Inc., and submitted
by the solid waste franchise contractors (See Attachment 1).
The existing solid waste franchise contractors are already familiar with the City, and have been
providing a good level of service with minimal complaints.
Cons
Limiting the number of contractors may also limit competition, and may have an effect on the prices
charged by the franchise waste contractors to residential and commercial clients (as it is arguable
that, by increasing the number, more competitive pricing may occur,as contractors vie for accounts).
Locks in the existing three (3) franchise waste contractors until 2017, which begs the question
whether the financial and other benefits, as proposed in the best and final offer, are in proportion to
the additional term being granted to the contractors by the City's agreement to an"early"renewal of
the existing three (3) franchise agreements.
CONCLUSION
The City Administration recommends that the City Commission evaluate the additional benefits
and/or contributions proposed by the existing three (3) contractors, and determine whether to
proceed to issue an RFQ for a fourth franchisee, or keep the status quo, subject to the aforestated
conditions.
Attachment:
Waste Collection Services—Truck Impacts Evaluation by Kimley Horn &Associates, Inc.
JMG/JGG/FHB
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