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HomeMy WebLinkAbout120919_ca14 Department of Public Works O Consent Agenda Page 1 of 2 Jefferson County Board of Commissioners Agenda Request To: Board of Commissioners Philip Morley, County Administrator From: Monte Reinders, Public Works Director/County Engineer Agenda Date: December 9, 2019 Subject: Change Order - Recycling Services Statement of Issue: This change order to the recycling services contract will increase the monthly payment to the Contractor (Skookum Contract Services) to process and transport recyclable materials. It will add one year to the contract with the option of two additional years. Analysis/Strategic Goals/Pro's Et Con's: The majority of U.S. recyclables have been shipped to and processed in China for the last two decades; however, in 2018, China implemented its National Sword program essentially banning the import of U.S. recyclables, which has thrown the recycling market into a tailspin. The remaining domestic markets for recyclables have become overwhelmed by the quantity of recyclable material causing prices paid for these materials to plummet. A quick internet search for "National Sword" will yield a plethora of articles and videos related to this topic. An example is attached. Communities across the country are dealing with this impact in a variety of ways including cancelling recycling programs altogether, reducing the list of recycling materials accepted, hauling recyclables to landfills, or increasing fees for recycling. Jefferson County's recycling contractor, Skookum Contract Services, has continued to find markets for recyclables; however, the revenue received from these commodities has declined significantly, which has resulted in Skookum operating at a significant loss for over a year. The recycling program has never paid its own way and has always required a fixed monthly fee component derived from the solid waste tipping fee to supplement the revenue from the recycling commodities. This change order will increase the fixed monthly contract fee to allow the Contractor to break even going forward. It adds another year to the contract with the option for two additional years which may allow time for domestic recycling markets to develop and stabilize and for the community to examine its recycling goals and model to determine how to move forward with a recycling program in the future. Department of Public Works O Consent Agenda Page 2 of 2 Fiscal Impact/Cost Benefit Analysis: This change order will increase the net monthly payment to the Contractor from $19,595 to $31,079. This increases the support from the solid waste tipping fee by approximately $6.56 per ton (based on an assumed annual solid waste amount of 21,000 tons). An increase in the solid waste tipping fee will be required in the future to offset this cost if this trend continues with this recycling model. Alternatives to explore going forward could include continuing with the existing model hoping for domestic markets to improve, eliminating recycling altogether, changing or reducing the recycling materials accepted, or implementing a fee for recycling services rather than subsidizing through the solid waste tipping fee. This contract change order will allow time to explore alternatives. Recommendation: Public Works recommends that the Board approve the attached change order with Skookum Contract Services. Department Contact: Tom Boatman, Solid Waste Manager Reviewed By: doe 'Flip Morl:, ► ounty A mini ator Date JEFFERSON COUNTY Sheet I of I DEPARTMENT OF PUBLIC WORKS Change Date: CHANGE ORDER Order No Ordered by County Engineer under terms of Change Proposed by Agency Contract No. Recycling Services ❑X Change proposed by Contractor To: Skookum Educational Programs Skookum Education Programs 4525 Auto Center Way Endorsed by: dba,clior,. .tr Sk000kum Contract Services PO Box 5359 Firm Namejay zo 17 Bremerton,WA 98312 Signa Date atti4 //49( Title Consent given by Surety:(when required) Project Title: Recycling Services Contract By: Attorney-in-fact Date You are ordered to perform the following described work upon receipt of an approved copy of this change order: Beginning on January 1,2020,the gross monthly payment to the Contractor for recycling services shall increase from$20,553.62 to$30,037.46. The monthly facility lease rate of$958 will continue to be deducted from this amount resulting in a net monthly payment of$29,079.46. An additional$2,000 per month will be added to the above amount upon delivery by the Contractor to the County of an acceptable"Recycling Alternatives Analysis"further described herein. Beginning January 1,2020,the mowing/weed eating services for the closed landfill,septage lagoon area,and surrounding fence line will be cancelled, deleting the additional annual payment of$1,735.50 for these services. County staff will take over these duties. The above contract provisions shall remain in effect until March 31,2021. The Contractor shall provide recycling services for one(1)additional year until March 31,2022. The County will determine the monthly payment for recycling services for this additional year based on the average commodity sales from the previous 12 months compared to the Contractor's expenses from the previous 12 months.The value of the additional year should predict that the Contractor breaks even for the additional period. Payment amount will be determined at least 90 days prior to the contract extension date. The Contractor shall provide auditable expense and revenue reports from the prior 12 months. The County may,at its discretion,offer up to two(2)additional one-year terms for this contract to extend the contract beyond March 31,2022. If the County chooses to extend the contract,the monthly payment for each one-year extension will be negotiated between the County and Contractor at least 90 calendar days prior to the extension. All other provisions of the original contract shall otherwise remain in effect. All work shall otherwise be in accordance with the provisions of the original contract. ORIGINAL CURRENT ESTIMATED ESTIMATED CONTRACT CONTRACT NET CHANGE CONTRACT TOTAL AMOUNT AMOUNT THIS ORDER AFTER CHANGE $1,151,840 $1,151,840 $163,739 $1,315,579.00 ORIGINAL CURRENT CONTRACT TIME NEW CONTRACT CONTRACT TIME CONTRACT TIME CHANGE(Add/Del) TIME 5 Years 5 Years I Year 6 Years APPROVAL,AECOM{ EN17'ED APPROVAL RECO, ��'j/r�' X11 S/rs ©_ Solid Waste Manager Date Public Works . aunty Engineer Date APPROVAL,RECOMMENDED APPROVED "OF Engineering Services Manager Date Chair.Jefferson County Commissioners Date A oved a t f only: •1. Date: //i /r Philip C. Hunsucker, Chief Civil Deputy Prose ting ttorney Jefferson County Prosecuting Attorney's Office JEFFERSON COUNTY Contract No. Sheet 2 oft DEPARTMENT OF PUBLIC WORKS Change Date: CHANGE ORDER ESTIMATE Order No. 1 ESTIMATED ITEM GROUP DESCRIPTION UNIT UNIT ESTIMATED NO. NO. MEASURE PRICE AMOUNT CONTRACT BEFORE CHANGE Fixed Monthly Fee-Year 1 12 $ 18,947.10 $227,365.20 Fixed Monthly Fee-Year 2 12 $ 19,468.15 $233,617.80 Fixed Monthly Fee-Year 3 12 $ 20,003.52 $240,042.24 Fixed Monthly Fee-Year 4 12 $ 20,553.62 $246,643.44 Fixed Monthly Fee-Year 5 12 $ 21,118.88 $253,426.56 Monthly Facility Lease 60 $ (958.00) ($57,480.00) Annual Mowing-Year 1 1 5 1,557.03 $1,557.03 _Annual Mowing-Year 2 1 $ 1,599.85 $1,599.85 Annual Mowing-Year 3 I $ 1,643.85 $1,643.85 Annual Mowing-Year 4 I 5 1,689.05 $1,689.05 Annual Mowing-Year 5 I 5 1,735.50 $1,735.50 Net Contract Value $1,151,840.52 CONTRACT AFTER CHANGE Fixed Monthly Fee-Year 1 12 $ 18,947.10 $227,365.20 Fixed Monthly Fee-Year 2 12 $ 19,468.15 $233,617.80 Fixed Monthly Fee-Year 3 12 $ 20,003.52 $240,042.24 Fixed Monthly Fee-Year 4 9 $ 20,553.62 $184,982.58 Fixed Monthly Fee-Year 5 15 $ 30,037.46 $450,561.90 - Fixed Monthly Fee-Year 6 12 TBD TBD Contingent Fixed Monthly Fee-Year 5 15 $ 2,000.00 $30,000.00 Monthly Facility Lease 60 $ (958.00) ($57,480.00) Annual Mowing-Year 1 1 $ 1,557.03 _ $1,557.03 Annual Mowing-Year 2 1 $ 1,599.85 $1,599.85 Annual Mowing-Year 3 1 $ 1,643.85 $1,643.85 Annual Mowing-Year 4 1 $ 1,689.05 _ $1,689.05 Annual Mowing-Year 5 0 $ 1,735.50 $0.00 Net Contract Value $1,315,579.50 Net Contract Change - $163,738.98 Recycling Alternatives Analysis The Contractor will analyze its processing/transport costs and the recycling commodity markets in order to determine whether there is a more attractive alternative for recycling that will reduce the cost to the County of recycling processing and transport, a stated goal in Part One of the Contract Specifications. The objective is to understand if certain commodities are more of a drag on the recycling contract business model than others and whether a different mix of recyclables would yield higher revenues relative to processing/transport costs. For example, some jurisdictions are now only processing#1 and #2 plastic bottles and jugs due to market conditions,while others are still sorting glass by color. Is this choice based upon a market conditions? The analysis should stay within the confines of the existing collection system composed of unmanned drop-off sites and the curbside 3-bin system; however, the drop boxes and 3 bins could potentially be labelled and used differently than they are currently. The analysis shall be provided in a report which discusses in detail the cost to process and transport to market each individual commodity and the revenue that can reasonably be expected from each individual commodity based upon historical cost data, market research/history, data from various brokers and material recovery facilities, and other available data. Data used shall include source information and shall not be "guess work". Data shall be presented using both the current blend/mix of recyclables and shall also be at the individual commodity level where markets exist. For example, in addition to the analysis of the tin/aluminum/plastic (TAP) market, cost and revenue data should also be provided for just tin,just aluminum, and just certain plastics where there is a market for them. The Contractor should be able to make reasonable estimates of the amount of each individual commodity collected based upon a characterization study of a representative number of bales or other means. The Contractor shall explore whether there are ways to reduce its costs. The Contractor shall present a least two (2) alternatives to the current system and discuss their relative pros and cons. The cost/benefit of each alternative shall be presented. If discussing whether to propose eliminating certain recyclables and thus revenue from the stream, the Contractor shall consider whether there is a corresponding and proportionally larger reduction in operations costs which could be gained. The Contractor shall draw conclusions and make recommendations regarding the recycling mix that provides an acceptable level of recycling services to the community while reducing the burden on the County's solid waste tipping fee to subsidize these services. The Contractor shall include an opinion as to the feasibility of making any changes and discuss challenges to their implementation.