Title
Solid Waste Cost of Service Study (Ordinance S-45618)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with NewGen Strategies and Solutions, LLC, to provide consulting services to evaluate the solid waste utility, in the amount not to exceed $160,000. Further request authorization for the City Controller to disburse all funds related to this item.
Report
Summary
The City of Phoenix solid waste utility is in need of a cost of service study to determine the amount of revenue that is sufficient to fund all utility requirements and analyze the cost of collection and post collection against operating and capital budgets. NewGen Strategies and Solutions (NewGen) is primarily a financial team with expertise in the operations of solid waste utilities and works with municipal solid waste service providers to evaluate costs of service for garbage, recycling and compost, rate design, service markets, and operational efficiencies. NewGen has experience with the City of Phoenix solid waste utility and other similarly-operated solid waste utilities in the Southwest, which provides the organization a unique ability to benchmark Phoenix rates and services against other municipalities.
In addition to performing a cost of service study, NewGen will also evaluate post-collection tip fees and market conditions to identify additional revenue opportunities to spread expenses over a larger customer base. Deliverables will also include recommendations for changes in rate structure and a five-year projection.
The Solid Waste Rate Advisory Committee unanimously agreed to move forward with using NewGen for this study at its April 2, 2019 meeting.
Procurement Information
In accordance with Administrative Regulation 3.10, normal competition was waived as a result of a Determination Memo to use Houston-Galveston Area Council (H-GAC) cooperative agreement HP10-17, All Hazards Preparedness, Planning, Consulting & Recovery Services awarded on Nov. 1, 2017.
Contract Term
The contract will begin upon award of Council, for the one-time use of consulting services, with a contract term of one year.
Financial Impact
The contract will not exceed $160,000 over the life of the contract. Funds are available in the Public Works Department's budget.
Concurrence/Previous Council Action
This item was heard at the Water, Wastewater, Infrastructure and Sustainability Subcommittee on Nov. 7, 2018, and recommended for approval by a vote of 2-1.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and Public Works Department.