2009-11-16 Regular Council Session Agenda

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Council Agenda Item Cover _________________________________________________________________________ MEETING DATE: November 16, 2009 AGENDA ITEM TITLE: Single Stream Recycling Vendor Contract AGENDA SECTION: Consent CAN THIS ITEM BE RESCHEDULED?: Yes BACKGROUND REVIEW: University City requested competitive bids for the sale of residential and commercial mixed recyclable materials collected by University City and delivered to the contractor for a 12 month-period to begin on or around 11/17/09. The contract allows for two optional years. The optional years do not commit the City to a contract renewal. Multi-year contracts may be continued each fiscal year after funding appropriations have been approved by the City Council. The City advertised for bids in two local papers, the St. Louis American and the St. Louis Post Dispatch. The City received bids from three companies. The bid results are as follows: COMPANY% OF 12-MONTHANNUALROUNDPRICEDISTANCETOTALESTIMATED MARKETESTIMATEDTONSTRIPPOINTSPOINTSPOINTSANNUAL VALUEMARKET(EST.)DISTANCEREVENUE RANGERANGE ($/TON) 1. Smurfit Stone 76% $0 - $44.88 2,700 870 30 100 $0 - $121,176 70% 2,700 $0 - $112,320 2. QRS Recycling $0 - $41.60 34 67 875 0% 2,700 $0 3. Resource 30 088 $0 - $0 Management Similar to other industries in recession, demand for recyclable materials is lower and the market value for these materials has declined. Some haulers were forced to pay to dispose of recycling this past year. While the market is improving, vendors did not offer a fixed price this year. Per the bids received, the price paid per ton will range monthly based on a percentage of the prevailing industry commodity pricing. In comparison, last July, the City received a fixed price of $33.21/ton for single stream materials, but the contract was legally canceled due to bankruptcy. The firm still allowed the City to dispose of recycling materials at no cost. The City believes the market is increasing and now is the time to rebid. This same firm has restructured and is offering the current best bid. It still makes sense financially for the City to continue its recycling programs, even if only to avoid landfill fees, even if zero revenue is received for the commodities. Recycling reduces the City’s landfill disposal costs and offers significant environmental benefits. Smurfit Stone provided the most advantageous bid at 76% of the market value price, less a $60 processing fee, with a zero dollar floor price. This firm offers the highest potential revenue return and has the least expensive travel cost. RECOMMENDATION: Staff recommends awarding the bid to Smurfit Stone.