Agenda - 11-21-2013 - 2 - Laserfiche WebLink

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Attachment E Memorandum To: Michael Talbert, Interim County Manager From: Gayle Wilson, Solid Waste Director Subject: Follow -up to Key Questions Raised with Regard to Urban Curbside & Multi - Family Services as Provided by Orange County Community Recycling Program Date: November 14, 2013 During the November 1 Managers meeting and the November 6 Town of Chapel Hill work session several issues were raised relative to the proposals received by the towns and county provided services. This memorandum will attempt to address the key issues that were identified from the meetings. There may be other issues or questions as discussions continue. County staff will defer to the Town of Chapel Hill for any substantive analysis or assessment of the proposals the Towns received in response to their RFP issued July 2013 and will offer only information on county services and general observations of issues raised regarding the services under consideration. In the end, that which the Towns consider best for them is what matters most. Key Issues Raised at Meetings 1) Towns Interest in a 5 -year price /fee guarantee from the County The County was not asked to submit a bid in response to the Town's Request for Proposals and has not invested the time to perform the necessary comprehensive financial analysis to come to reliable long -term program cost conclusions consistent with the Towns' RFP criteria. Given the current program /funding uncertainties and absent recent reliable County initiated service RFP's and cart bid proposals, it would be a difficult task to perform with an acceptable margin of error. It is likely that the private company proposers will seek to include fuel surcharges or other CPI based cost increases in final contract negotiations, so even these proposals may not represent firm 5 -year price commitments. If such a long term commitment is required prior to obtaining binding current cart and service costs staff will be obligated to make conservative estimates and possibly include a fuel surcharge clause. For example, Multi- family fee of $19 /year /unit has been in place for six years with no evidence at the present time that the fee would need to be increased anytime soon. The program is stable and not subject to key and controlling unknown factors of cart and service contract costs. However, if required to make a firm 5 -year commitment, staff would recommend a fee of $20 /year /unit to cover expense contingencies, residents might end up paying more than necessary. With the lack of a firm cost commitment for carts and collection service, it would be necessary to incorporate even more conservative contingencies in the 5 -year fee guarantee for Urban Curbside services. Please advise if this 5 -year fee committment is required and county staff will proceed to conduct the necessary long -term financial analysis. Note that an Interlocal Agreement could also be used to address limitations on fee increases. C