COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

February 6, 2009

BOARD MEETING DATE:

March 3, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

SBWMA Facility Operations Contractor Selection Committee Draft Recommendation

RECOMMENDATION:

Direct the County representative on the South Bayside Waste Management Authority (SBWMA) Board of Directors to vote for the selection of Hudson Baylor Corporation as the SBWMA Facility Operations Contractor.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government.

Goal 22: County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.

This action will provide your Board’s input on the contractor selection for a major regional solid waste management facility in the County in order to maximize the amount of material that is diverted from landfills through recycling and other programs.

BACKGROUND:

The SBWMA Facility Operations Selection Committee has issued a Report to the SBWMA Board and Member Agencies that provides a draft selection recommendation based on follow up discussions with the two firms placed on a “short list” following a Request for Proposals (RFP). Those firms are South Bay Recycling, LLC (SBR) and Hudson Baylor Corporation (HBC). Public Works staff, which serves as the County’s representative to the SBWMA Board, is seeking your direction on the County’s position in this matter. Attached is the report from the SBWMA Facility Operations Selection Committee.

DISCUSSION:

The SBWMA Selection Committee recommends SBR as the Facility Operations Contractor at the Shoreway Facility. The recommendation is primarily based upon the cost differential between the two “short listed” firms, as SBR has offered a proposal that is approximately $1.1 Million per year in operating costs lower than HBC. No other differences between the proposals submitted by HBC and SBR were considered significant enough by the Selection Committee to overcome the cost differential between the two firms. However, the Selection Committee’s recommendation is subject to SBR’s satisfactory responses to the following outstanding issues.

Ø

Acknowledgement of the SBWMA rejection of South Bay Recycling’s “offset” proposal related to the commodity guarantee.

Ø

Complete justification of the increase in their proposal costs that is not explained within the revised proposal or revision of the costs.

Ø

Verification of South Bay Recycling’s response to City of Los Angeles permit compliance issues raised during reference checks.

Ø

Successful negotiation of a franchise agreement that includes agreement on the following:

o

Liquidated damages and charges that can be imposed,

o

Self Haul diversion guarantees, and

o

Critical Implementation Milestones.

This recommendation is being released prior to resolution of these issues so that each SBWMA Board Member can return to their Member Agency and discuss the findings and recommendations with their City or County Manager and with their elected officials prior to action by the SBWMA Board scheduled in March.

At its meeting on January 27, 2009, the Board Finance & Operations Committee decided that the outstanding issues with SBR are significant. The Committee is especially concerned with SBC’s record on environmental and labor issues. The projected cost difference is insignificant for the total SBWMA service area and does not outweigh the aforementioned concerns. Other than the higher cost, there are no similar concerns with the proposal from HBC. The Committee recommends that your Board direct the County representative on the SBWMA Board of Directors to vote for selecting Hudson Baylor Corporation as the SBWMA Facility Operations Contractor.

FISCAL IMPACT:

There is no fiscal impact related to this recommendation. When a final Facility Operations Contract is negotiated, it will be returned for your Board’s approval and the fiscal impact will be known at that time.

Attachment