Agenda Item Wording:
title
Residential Solid Waste Container Purchase Contract - Authorization for the City Manager to award a 5-year sole source contract to Toter, LLC in the amount not to exceed $1,550,000 to purchase solid waste containers.
body
Deadline for Action: 5/6/2024
Submitting Department: Public Works
Contact Name and Phone Number: Jason Serpa, Public Works Manager, jason.serpa@visalia.city, 713-4533; Nick Bartsch, Public Works Director, nick.bartsch @visalia.city, 713-4052
Department Recommendation:
Staff recommends that Council authorize the City Manager to award a 5-year sole source contract to Toter, LLC in the amount not to exceed $1,550,000.
Background Discussion:
In March of 2017, Council directed staff to proceed with converting residential solid waste service to a 3-container system. By mid-calendar year 2019, all residential services were switched to the new approved 3-container system, delivering services to all residential customers that included a gray waste, a blue recycling, and a green waste container. This change included a significant initial investment of purchasing approximately 61,000 containers. The original containers were approved to be purchased through a contract with Toter, LLC, therefore standardizing the type of can that the City uses for its residential customers, apart from grandfathered containers that still existed.
Currently, the City has approximately 42,500 residential customers, which equates to 127,500 residential containers that are serviced weekly, not including any additional containers a customer may request. Existing containers are replaced when damaged or when City residential growth occurs. The combined replacement and growth purchase percentage averages 3% per year, resulting in the purchase of approximately 3,825 containers annually.
Sole Source Justification:
Due to most of the City’s residential containers being replaced by the new Toter units, it is recommended that Council approve sole sourcing the contract for future container purchases to Toter, LLC. This will continue to keep container inventory uniform and will not require any adjustments for the operating arms of the solid waste trucks to conform to other container dimensions, thus minimizing maintenance costs. Keeping the container inventory uniform also aids in the complete replacement of Toter units in the field, as older non-Toter cans expire and are replaced by the Toter product.
Toter, LLC is also a Sourcewell vendor, which allows Cities to piggyback on the Sourcewell cooperative purchasing contract. Toter is offering their discounted contract price to the City with this sole source request.
Fiscal Impact:
The draft residential container capital improvement budget for FY24/25 and FY25/26 is $300,000 and $305,000, respectively. Including the planning budget years of FY26/27 and beyond, the total recommended 5-year not to exceed contract amount would be as follows:
Figure 1 - CIP Budget
In retrospect, the 5-year history of total budget versus container purchases and replacements was:
Figure 2 - Historical Expenditures
As stated briefly above, the Solid Waste Department only purchases new residential containers when inventory levels in the corporation yard get to a low level to ensure that containers are always on hand for replacement and new home construction. This means that purchases can fluctuate, and are usually less than budgeted, especially when container breakage is less than normal. Even though the growth of the City and the need for breakage replacements can be difficult to estimate, a 2% replacement and 1% growth figure has been used in the past, resulting in a 3% total, relative to the estimated 127,500 total cans in service. This puts the annual purchase need at approximately 3,825 containers, resulting in the total estimated dollar amount needed (and annual growth) at $270,236, shown below:
Figure 3 - Estimated Needs
*Price per container includes sales tax and freight cost. See quote attached for the cost of one truckload of cans with freight cost. One load of containers = 742.
The total annual need estimated above is well within the draft CIP budget amounts in Figure 1.
Prior Council Action: 8/6/2018 - Authorization to award a contract to Toter, LLC for the purchase of residential cans.
Other: N/A
Alternatives: To not authorize the City Manager to award the contract to Toter, LLC for the purchase of residential containers and direct staff to issue an RFB. This option is not recommended due to the uniformity of the City’s containers and possible increased costs in maintenance of solid waste trucks and container variants.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to award a 5-year sole source contract to Toter, LLC in the amount not to exceed $1,550,000 for the purchase of residential solid waste containers.
end
Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Toter - Sourcewell Quote