HomeMy WebLinkAboutOrdinance 5272 ORDINANCE NO. 5272
AN ORDINANCE WAIVING THE REQUIREMENTS OF FORMAL
COMPETITIVE BIDDING AND ACCEPTING AN INTERIM RATE QUOTE
FROM WASTE MANAGEMENT FOR THE DISPOSAL OF SOLID WASTE;
APPROVING A BUDGET ADJUSTMENT; AND DECLARING AN
EMERGENCY.
WHEREAS, the Cherokee Nation has breached its contract to haul the City' s solid
waste; and
WHEREAS, in the interest of the citizens' continued health and safety, the City of
Fayetteville must provide for the collection and removal of solid waste while the formal bidding
process goes forward.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1 . That the City Council of the City of Fayetteville, Arkansas hereby determines
an exceptional situation exists in which competitive bidding is deemed not feasible or practical
and therefore waives these requirements and accepts an interim rate quote from Waste
Management for the disposal of Class 1 Municipal Solid Waste at the Eco Vista Landfill.
Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves a
budget adjustment in the amount of $ 166, 110.00.
Section 3 . That the City Council of the City of Fayetteville, Arkansas hereby declares
that these circumstances constitute an emergency, and this ordinance, being necessary to
preserve the health and safety of the citizens of the City of Fayetteville, shall be in full force and
effect from and after its passage and approval.
PASSED and APPROVED this 15`h day of September, 2009. c`�iG'G�TY O,c•sGp
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; FAYETTEVILLE ;
APPROVED: ATTEST: %A
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By: By: ��t1
ELD J AN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
City of Fayetteville, Arkansas
Budget Adjustment Form
Budget Year Department: Operations Date RequestedAdjustment Number
2009 Division: Solid Waste & Recycling
Program: Operations & Administration 9/15/2009
Project or Item Added/Increased: Project or Item Deleted/Reduced:
Increased cost of disposal for trash at the Waste Funds are being drawn from Solid Waste reserves.
Management ECO Vista landfill in Tontitown.
Justification of this Increase: Justification of this Decrease:
Breach of contract by Cherokee Nation requires the City Sufficient funds remain to cover reserve requirements.
find an alternate method of trash disposal.
Increase Budget
Account Name Account Number Amount Project Number
Decrease Budget
Account Name Account Number Amount Project Number
V.090403
ead Dat Budget & Research Use Only
Type: A B C E
B 'rector Date
(6 0 IQ
Requested By John Nelson
Dep10J
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4 , � �..� �5. 61 .%& General Ledger Date
Fin Director e� Date
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C e Staff Date Initial Date
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3or Initial Date
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City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
9/15/2009
City Council Meeting Date
Agenda Items Only
David Jurgens Solid Waste and Recycling Utilities
Submitted By Division Department
Action Required:
Ordinance to approve a bid waiver to waive competitive bidding requirements for an interim rate with the ECO Vista
Waste Management landf I to Ispose of Gass 1 municipal solid waste from the City of Fayetteville, and approval of
budget adjustment I rgny Ae der .n stn eAw%%K�t
$ 127,165.00 $ 821 ,345.00 Services and Charges
$ 58,872.00 $ 418,240.00 Services and Charges
$ 49,453.00 $ 328,550.00 Services and Charges
Cost of this request Category / Project Budget Program Category / Project Name
5500.5010.5316.00 $ 518,969.51 Commercial Collection
5500.5020.5316.00 $ 230,008.24 Residential Collection
5500.5030.5316.00 $ 200,204.64 Commercial Drop Box Collection
Account Number Funds Used to Date Program / Project Category Name
$ 302,375.49 Solid Waste
$ 187231 .76 Solid Waste
$ 128,345.36 Solid Waste
Project Number Remaining Balance Fund Name
Budgets Item = Budget Adjustment Attached
�5l Previous Ordinance or Resolution #
D#Afttomeyy
Date
Original Contract Date:
Original Contract Number:
C 1 Da..9 0. •
Fina and InternaIS a Director Date Received in City
Clerks Office q/8 fl
9-rn-vq
Ch f of St Date �FF,,,nnn
'6 Received in
Mayor's Office 7
ay r ta
Comments:
Revised January 15, 2009
ye ey le Meeting Date of September 16, 2009
UTILITIES DEPARTMENT CORRESPONDENCE
To: City Council
Thru: Mayor Lionel Jordan
Don Marr, Chief of Staff
From: David Jurgens, Utilities Director JV
Date: September 8, 2009
Subject: Operational Response to the Cherokee Nation Breach of Contract for Solid Waste
Services- Ordinance Approving Bid Waiver for ECO Vista Management Landfill,
Approving two Budget Adjustments
RECOMMENDATION
City Administration recommends approval the following items to allow the City to continue its trash service
after the Cherokee Nation breach of contract (1 ) one new full time employee in the Solid Waste Division, (2)
accepting a letter confirming a rate of $24.00 per ton plus fees with Waste Management to dispose of trash at the
Eco Vista Landfill in Tontitown for disposal of trash at $26.35 per ton for 60 days, (2) a bid waiver with Waste
Management to dispose of trash at the Eco Vista Landfill in Tontitown for disposal of trash at $26.35 per ton for
60 days; and (4) a budget adjustment for $380,000 for contract services and a budget adjustment for $50,000 for
the employee and equipment.
BACKGROUND
Cherokee Nation has stated in a letter dated August 31 , 2009, that they intend to terminate the contract between
the Nation and the City for solid waste services including operation of the transfer station and scale house as
well as hauling and disposal of the waste. This termination is effective September 30, 2009.
The Cherokee Nation has provided solid waste services to the City since September 2006. The contracted rate,
after an early adjustment to cover mandated fees, is and has been fixed at $24.47 per ton. The City produced
53,614.44 tons in 2008. Budget numbers are based on this volume remaining unchanged for 2009 and 2010.
DISCUSSION
There does not appear to be any physical benefit to attempting to force the Nation to continue the contract.
They have provided thirty days notice for the City to resolve the issue, rather than simply walking away from
the contract as we experienced with our biosolids landfill operation last year. This gives us time to develop a
plan to accomplish the mission. The City Attorney is pursuing action to recover damages for the breach in
contract. The City is holding a $100,000 cash deposit which serves as the Nation's performance and payment
bond.
The mission includes the following tasks:
1. Operate the transfer station floor. This requires one full time employee, one bucket loader for loading
trash, and one backhoe for compacting trash in the trailer.
2. Operate the scale. This requires one full time employee and a computer system with software.
3. Haul trash to a landfill. This involves hauling trash to a properly licensed and permitted landfill. Hauling
trash to the landfill requires a fleet of no less than five tractors, eight walking floor trailers, and four full time
employees. We currently haul an average of ten loads per day, Monday through Saturday. Monday is the peak
day with (typically) 14 loads. To meet our ADEQ permit, the trash must be hauled the same day. The number of
loads one tractor trailer combination can make per day is dictated by the landfill location and operating hours.
For example, hauling to the Tontitown landfill, a rig can make 2 — 3 trips per day. Hauling to Russellville, a
truck can make one load per day. This mission is currently executed by Roll Off Services by a competitively
Cherokee Breach Contract CC Memo 16Sep09.doc
ye ev le
Meeting Date of September 16, 2009
UTILITIES DEPARTMENT CORRESPONDENCE
bid contract with the City. Roll Off is paid by the City; the City is then reimbursed by Cherokee Nation per the
contract.
4. Dispose of the trash at a landfill. This involves negotiating and paying the tipping fee and all other fees
(State, District, recycling, post closure fund fees fuel surcharges, etc.) associated with disposal at the landfill.
Long Term Proposal. Operate the transfer station floor and scale house with in-house assets, and to contract for
haul and disposal through a competitive bid. This solicitation for bids will be published this week.
Interim Proposal. Until we can hire a contractor through a published solicitation for bids for haul disposal of our
solid waste, staff proposes that we operate the transfer station floor and scale house with in-house assets, and
contract for haul and disposal. This will require the following:
- Hire two full time employees, one an equipment operator to run the bucket loader on the floor, and one
to run the scale house. Solid Waste has one open budgeted position that can be used. One additional position
must be authorized for the division. The cost is estimated at $24,963 for 2009 and $99,850 for 2010. Funds for
one position are available within the 2009 Solid Waste budget; the second position will funded by the budget
adjustment.
- Lease one bucket loader and one backhoe. Fleet is making tentative arrangements. The cost is
estimated at $6,500 for 2009. This needs to be funded by the attached budget adjustment. In the future, it may be
more cost effective to purchase this equipment.
- Purchase a computer and software system for solid waste scale house operation. The cost is estimated
at $ 19,500 in 2009. This needs to be funded by the attached budget adjustment.
- Continue the City's existing contract with Roll Off Services to haul trash to the Eco Vista Landfill in
Tontitown. This contract would be part of the long term competitive bid for hauling and disposing of the trash.
Contracting this service avoids the capital and operational expenses of purchasing the tractor-trailer fleet. This
needs to be funded by the attached budget adjustment as Cherokee Nation was reimbursing the City for this cost.
- Dispose of the trash at the Eco Vista Landfill in Tontitown for a negotiated price of $24.00/ton plus
$2.35/ton in fees. This is the price Cherokee Nation has been paying. The disposal landfill and the per-ton price
would be part of the long term competitive bid for hauling and disposing of the trash. For the short term plan,
this requires a bid waiver to accept the negotiated $24.00/ton price, plus $2.35/ton in fees, and needs to be
funded by the attached budget adjustment.
Long term impacts. Operating the transfer station in-house opens up opportunities to the City to maximize use
of the transfer station to other local haulers, gradually increasing overall revenue over the next few years.
BUDGET IMPACTS
Impacts to the 2009 budget are shown below. Two budget adjustments are being presented: one for $380,000
for contract services and one for $50,000 for the employee and equip ment.
Contract Current Annual Interim rates Estimated Cost
Work Task Rates 2006 Cost October to October through
thru resent December 2009 December 2009
Operate Floor and Scale $3.50 $ 187,649.00 $ 44,463.00
Hauling $5.50 294,877.00 $ 6.00 80,421 .00
Disposal $13.97 748,987.58 $ 24.00 321 ,684.00
Environmental Fees $1 .50 80,421 .00 $ 2.35 31 ,498.23
Total Cost $24.47 1 $ 1 ,231 ,513.58 $ 32.35 $ 446, 568.00
Tonnage (using2008 actual 53,614 13,404
Total 2009 Cost Increase $ 138,689.61
Cherokee Breach Contract CC Memo 16SepO9.dm
ORDINANCE NO.
AN ORDINANCE WAIVING THE REQUIREMENTS OF FORMAL
COMPETITIVE BIDDING AND ACCEPTING AN INTERIM RATE QUOTE
FROM WASTE MANAGEMENT FOR THE DISPOSAL OF SOLID WASTE;
APPROVING A BUDGET ADJUSTMENT; AND DECLARING AN
EMERGENCY.
WHEREAS, the Cherokee Nation has breached its contract to haul the City's solid waste; and
WHEREAS, in the interest of the citizens' continued health and safety, the City of Fayetteville must
provide for the collection and removal of solid waste while the formal bidding process goes forward.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1 . That the City Council of the City of Fayetteville, Arkansas hereby determines an
exceptional situation exists in which competitive bidding is deemed not feasible or practical and therefore
waives these requirements and accepts an interim rate quote from Waste Management for the disposal of Class
I Municipal Solid Waste at the Eco Vista Landfill.
Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves a budget
adjustment in the amount of $ 166, 110.00.
Section 3. That the City Council of the City of Fayetteville, Arkansas hereby declares that these
circumstances constitute an emergency, and this ordinance, being necessary to preserve the health and safety of
the citizens of the City of Fayetteville, shall be in full force and effect from and after its passage and approval.
PASSED and APPROVED this 15th day of September, 2009.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
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September 8, 2009
Ms. Carrol Hill
Solid Waste Manager
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72801
Dear Ms. Hill:
As per our conversation, Waste Management will extend the current rate of $24.00 a ton
to the city of Fayetteville during this transitional period for the city. This rate is good for
60 days.
Please contact us if we can be of any service to the city of Fayetteville. We look forward
to partnering with the city for many years to come.
Sincerely,
Wayne Ra bun
Director of Business Development
Waste Management
c1`�t0 � °hc3
i GWY9 DBP Chad "Corntazcr' Smith
o iPrincipal Chief
CHEROKEE NATION ALO(@ 46ha'1
.p P.O. Box 948 • Tahlequah. OK 74463.0948 • (918) 437-3000 Joe Grayson, Jr.
P Deputy Principal Chief
August 31 , 2009
City of Fayetteville
113 West Mountain Street
Fayetteville, AR 72701
Attn: Don Marr, Chief of Staff
Reference: Operation of the Fayetteville Transfer Station
Dear Mr. Marr,
This letter is to advise you that the Cherokee Nation will be terminating the services provided by
Cherokee Nation Waste Management, LLC ("CNWM") at the City of Fayetteville's Transfer
Station effective October 1 , 2009. CNWM's last day to provide these services will be
Wednesday, September 30, 2009. Should you have any questions regarding this matter, please
contact my office.
Very Truly Yours,
Melanie Knight
Secretary of State
Cc: Carrol Hill, Solid Waste & Recycling Division
(COPYTHE CITY OF FAYETTEVILLE, ARKANSAS
September 3, 2009
Secretary of State Melanie Knight
Cherokee Nation
P.O. Box 948
Tahlequah, OK 74465-0948
RE: Contract with the City of Fayetteville
Dear Secretary Knight:
Thank you for your letter of August 31 , 2009. We regret that you have decided to breach
the Agreement To Transport And Dispose Of Municipal Solid Waste And For Operation Of
Transfer Station that was agreed to by the City of Fayetteville and the Cherokee Nation on April
4, 2006. The term of the agreement began on September 26, 2006, and was for five years.
Nothing within the Agreement gives either the Cherokee Nation or City of Fayetteville the right
to unilaterally terminate its responsibilities under the agreement.
Your letter of August 31 , 2009 to me in which you state "the Cherokee Nation will be
terminating the services provided by the Cherokee Nation Waste Management, LLC (`CNWA')
at the City of Fayetteville's Transfer Station effective October 1 , 2009," constitutes a clear and
irrevocable breach of our agreement. The City must immediately take measures in an attempt to
reduce the amount of damages your breach of contract will cause our citizens and our City.
The City of Fayetteville has performed all of its responsibilities pursuant to our
agreement for the last three years and stood ready and willing to continue to abide by our
agreement with you for the remaining years of our agreement. The City does not consent or
agree to your unilateral and unjustified termination and breach of our agreement. The City of
Fayetteville will be left with no choice but to recover from you the full amount of damages our
citizens and City have and will suffer from your breach of contract. The amount of these
damages will be substantial, but will not be clear until the City is able to contract with
responsible parties to provide the services you had promised to provide us for five years.
Because of your failure to pay the full amount of previously owed debt to the City of
Fayetteville, we have had to withhold transmission of checks to you. Although we had prepared
the checks and were ready to forward them to you once you paid your agreed overdue debt to us,
113 WEST MOUNTAIN 72701 479-575.8330
FAX 479-575-8257
Secretary of State Melanie Knight
Cherokee Nation
Page 2
we cannot send these checks to you now, but must hold them as setoffs against the substantial
damages we will suffer in the future because of your breach of contract. We will continue to
fully account for all revenues and charges related to our agreement. The Cherokee Nation will
receive full credit for these setoffs upon the determination of our damages.
The City of Fayetteville regrets that the Cherokee Nation has broken our long standing
agreement. We hope we can amiably arrive at a fair settlement that fully compensates the City
of Fayetteville's losses caused by your breach and enhances the prospect of mutually beneficial
agreements between the City of Fayetteville and the Cherokee Nation in the future.
incerely,
W�
ON MARK
ief of Staff
DM/
cc: Principal Chief Chad Smith
Attorney General Diana Hammons
Mayor Lioneld Jordan, Fayetteville
Kit Williams, Fayetteville City Attorney
FtiulktBecker,.FaYettevitle FinanceFDirector9
