HomeMy WebLinkAbout2021 03 22 Regular 501 - Waste Pro Contract Renewal + , REGULAR AGENDA ITEM 501
CITY COMMISSION AGENDA I MARCH 22, 2021 REGULAR MEETING
TITLE
Waste Pro Contract Renewal
SUMMARY
On December 14, 2020, the Commission requested an update on the Waste
Pro contract negotiation be provided with a recommended path forward on
extending the existing contract or a recommendation to proceed with a bid
process. Staff reviewed City costs as well as rates of our sister cities here in
Seminole County and other municipalities in the state of Florida. It has been
noted the current agreement with Waste Pro has both favorable rates and
utilizes a favorable index for rate adjustments.
At the January 11, 2021 Commission meeting a 1-year extension of the
franchise agreement with Waste Pro along with Ordinance 2020-09 was
approved through February 28, 2022. With this agreement, Waste Pro pays a
franchise fee to the City, which is equal to ten percent (10%) of all Contractor'
s gross monthly billings related to all collection and disposal services
including, but not limited to, commercial, special residential services and
construction and demolition debris services. Over the last three years, the
agreement generated on average $114k in franchise fee revenue annually.
In addition to a review of the City's costs, staff also performed a review of the
City's solid waste rates billed to our residents. Historically, the City set the
monthly solid waste rate for our residents back in 2006 at $18.10/household.
That rate has remained unchanged over the last 15 years. That rate was
expected to provide "rate stabilization" for our residents, for a period of time.
That approach proved to be a success as the City has been able to continue to
provide solid waste services without raising rates for the last 15 years as well
as maintain a moderate storm reserve. The city has seen its monthly cost to
provide solid waste services go from $17.42/household to
$21 .79/household (which includes County tipping fees as well as
administrative services). The Solid Waste Fund has successfully maintained a
storm reserve of$1 .4M based on estimates established in 2004 with the multi
storm event of Charley/Francis/Jean. However, going forward the operational
fund balance is expected to decline below $200k by the end of FY 2021, which
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would mean storm reserves would need to be used to maintain operation of
the fund. Staff has concluded that a detailed review and projection of rates to
our residents will need to be prepared and brought forward to the
Commission in the coming months to determine an effective change to the
current solid waste rate of$18.10 and establish an appropriate index by
which to apply rate adjustments going forward.
RECOMMENDATION
Staff has concluded it is in the best interest of the City not to go out to bid, as
Waste Pro has agreed to maintain our current rate, current index along with
our related 2.5% cap, and franchise agreement currently in place through an
extended term. That term can be set forth as a 5-year extension with three
1-year renewals (spanning an 8-year period) upon mutual agreement. We are
looking for final direction from the commission to proceed with drafting a
long-term addendum to the current Waste Pro contract and related ordinance
to be brought forth for approval in April.
In addition, we propose staff develop projections concerning an effective
change to the current monthly solid waste rate of$18.10 billed to our
residents and establish an appropriate index by which to apply rate
adjustments going forward. This will be brought forward separately for
consideration by the Commission in the coming months.
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