Speaker 6: Thank you. Okay. That concludes public comment. And we will go to item 19 from the regular agenda. Madam Clerk.
Speaker 2: Communication from City Attorney Recommendation to receive and file a report by PFM Group reviewing the city's request for proposals. Process for contract recycling services citywide.
Speaker 3: Thank you. I'm going to turn this over due to the city attorney.
Speaker 7: May remember city council. Thank you. On March 22nd, the city council requested my office to select an appropriate consultant to conduct a review of the process used by the city in its request for proposals for recycling services and to have the consultant prepare and provide a report to this body. The Office. We interviewed three well-qualified firms in connection with this request and selected PFM group to perform the review. In addition to the review of the RFP process, we directed PFM to review and comment on the written and verbal protests and the comments from the vendors. At this time, I would like to introduce Mr. Russ Bronson, director at PFM Group, who will present a short PowerPoint on the recycling RFP process and then respond to any questions that Council may have. Mr. Branson.
Speaker 10: Press the button. Thank you, Mayor. Council members. I'm pleased to present a brief overview of the study that we prepared and provided to the city a few weeks ago on the review of the recycling services. Our process, just to start with Public Financial Management is a national consulting firm in the nation's leader. Independent financial advice to local governments. We are one of the the city's ongoing financial advisers as well with the FMS Management Budget Consulting Group. And we are also a national practice that does strategic consulting nationally with local governments. Just a little background why I'm qualified to do this. I have been with PFM for the past two and a half years. Prior to that, I was a chief financial officer and assistant city manager for the City of Roseville for 13 and a half years. So I did oversee finance, purchasing I.T and kind of the whole all the back office operations of the city and worked with a number of our processes and issues that came up during that time. I also worked in Urban Land Consulting Consultancy for 12 years before that and as assisted by an analyst, Ian Tyson, who worked on this with me. Project overview is, as I mentioned, that we were engaged in an independent review of the city's process and to oversee and execute the RFP for recycling services and to look at the comments and protest issues provided by Republic Services and Ateco. There were six, six items or six areas that we were to look at. Generally, it kind of comes in to the protests and comments as well as the overall RFP and evaluation process. During this process we did interview well. We attempted to interview all vendors, interviewed three vendors extensively. We interviewed city staff as well as H.f. and staff who was a city consultant on this project. We received 60 documents from the city covering 1400 pages of information that was reviewed, and the report we prepared was a 43 page report documenting our findings and and the information that we looked at on on the record on all of these subjects covered here. And so this, again, is a brief, brief overview of that. But to really get into the meat of it, there's the you have to look at the written report. So I want to talk about three major findings. First is on city options. And as we looked at this, the city really has three options they're looking at and moving forward what started this project, one is to accept staff recommendations and award the RFP contract to waste management, the existing vendor. Two is you could follow the often low cost recommendation and award to echo. Those were the two recommendations from and in their. In their report. Or you could reject all proposals to reissue the RFP. One of the key elements of what we were looking at was, was the process sufficient and fair enough to provide you to make one of the first two choices and not have to go to the third choice, rejecting all proposals. So finally, number two is, we believe, after review of the entire process, that there is no need to reissue the RFP, that while several issues were identified with the implementation of the RFP process used by the city, we do not I do not believe that rises to a level that justifies or requires a reissuing of the RFP. Those issues I mentioned here and go into more depth in our report, some of the things there were questions answered after the submission deadline for questions. Vendors were requested to provide three additional cost proposals after the initial July 1st, 2015 deadline for our proposal, deadline on the last for the ten year proposal that the city did not require the vendors to submit revised cost exhibit forms, which just makes it more difficult to understand what their proposals contain and did not communicate the last cost proposal request to the designated city contact. So these were some of the issues that were identified. And again, changes from protocol, changes from how the process was set up. But we did not feel that was enough to invalidate the process overall. We do believe that all vendors received fair treatment during the process of the RFP review, and the recommendation made by the evaluation committee was in accordance with the framework of the RFP provisions. The major concerns raised by Republic Services and their letter of protest and echo and their letter of comment do not justify their issuance of the RFP. And we do answer those in great detail in the in our respond to those in detail in our report. And finally, number three was looking at the consultant review and recommendations and was hired by the city to assist in the process of developing and implementing the RFP and evaluating the proposals from the RFP. We believe that the recommendation provided by H.F. and H did consider all information provided in the RFP in both the technical and cost proposals and was a fair evaluation. We do talk about later on some of the changes we might recommend for the future, but all vendors, the basically the way this worked is H.f. and H found that all vendors, after reviewing the technical proposals, were found to have similar qualifications and similar ability to perform the contract requirements at a high level. The count, the criteria, evaluation criteria themselves were given no weight. So we don't know all the thinking in there, but their conclusion was that and if you look at the H.f. report, which I believe has now been made public, that they do go through all the evaluation criteria and show their analysis of that criteria for each vendor. And recommendation was based first on overall qualifications. Everyone was qualified, and then secondly, based on cost and looking at who was the lowest cost vendor, H5n8 did indicate that waste management would be a recommended choice if the city is happy with existing services and wants to avoid transition issues, even though they do have a slightly higher cost in terms of their overall proposal. So based on our review, we believe that that the city should award to either waste manager or ACO. We're not coming down on either of those. We think those were the two that were both qualified, all for recall, but those were the lowest cost providers. And then waste management has the additional advantage in this point of being the current provider and not having any transition costs or issues associated with it. We believe that either choice is within the bounds of HFA Nature's recommendation in their proposal. So I just want to talk a little bit about go a little backwards, excuse me backwards somewhat and talk about some of the key provisions are the RFP that that influenced and gave, you know, that we looked at as we made our recommendation. There's four sections that we want to talk about here. RFP Section one was the scope of the project. The length of the contract was estimated was was said to be seven years guaranteed, seven years with the possibility of going an extra three years. So that gave with no longer than ten years. In the end, the staff recommendation was to go to a full ten year contract, can't replace them. Requirements were given as full carte replacement and year for that was also changed during the process to be cart replacement as needed, which is consistent with the existing practice or the existing contract with waste management. There are several submittal instructions that were important in this process. City contact was the sole point, sole point of contact with the vendors. All communication was required to be in writing and the city was not bound to communication outside of this process. So submittal instructions were were issues mainly boundary issue, boundary issues. And as mentioned earlier, they were not fully complied to by the city throughout the process, but we did not feel that had any negative impact on any individual vendor. The evaluation, an award process that these are key items here, one, that the city may seek additional information from vendors, which they did in terms of asking for additional cost information and additional service information, and also that the lowest price did not guarantee awarded the contract. It was very clear the word of the contract we made on several factors and price was a factor, but not necessarily the factor on which to be chosen. And I have that twice here because it's so important. But in terms conditions and exceptions and this is really a key provision, is that the city said through all of this that they may alter the RFP provisions if it's in the best interest of the city. So through with everything that they laid out, all the all the requirements, they also had a request. They also had a provision of the RFP to says, you know, we can change this at any time if it's in our best interest , which I believe what was what happened throughout this process. I'm not going to spend a lot of time on this, the proposal selection timeline, but it is in the report. And really what this shows is that there's the breadth and complexity of what occurred during this process in terms of what the the key dates were in white . You have in blue at the city's actions were throughout this process on the top and in the pink, you have vendor actions on the bottom throughout this process. This process has taken nearly a year now where the proposals were due. And I guess really over a year, if you look at the release of the proposals and pre proposal conferences, proposals were due last January 1st, 2015, and we did review all aspects, aspects of this process in our in our report. So I want to take a little time. I'm not going to spend a lot of time going through this, but want to hit the the issues and findings related to first the Republic Services letter of protest and then to the echo comment letter. So going down, these are the these are the points that Republic Services made. One analysis of proposals misrepresented the proposed fixed monthly fee to be charged to the city. We I do believe after spending a lot of time looking at the cost proposals and talking with the Republic and talking with H.F. and H, that is an accurate statement that that there was confusion by republic on how these should be filled out. There was some I think, some lack of clarity in the in the instructions and how they should be filled out. But at the end, the Republic Services consistently was the third lowest cost vendor and that the the misrepresent misunderstanding out there is misrepresented . There is misunderstood way that they are proposing to provide services are the cost of their providing services did not change what the recommendations would be in the end and staff did look at that in the very end. Additionally, there are several times that republic they said they were confused about what this meant theirself. They had several opportunities to challenge that and they never did get proper clarification, even as they're asked to give additional cost cost measures. They were asked to the city would allow respondents to submit a proposals for a ten year contract term. The city did say last spring, no, we're going to stand pat. City later changed their mind to do that. About six months later, after they had looked at the proposals, looked at the review, and we're seeing that there could be opportunities to to save monies for the city in doing so. And they did change their mind even though they initially said no to republic. And that was within the context and confines of what they're allowed to do based on the RFP and what was put out to the vendors. The request for alternative cost proposals received after July one were out of the. Took place outside the process described in the RFP. And the main the main really response to that is the RFP said that the city could change the process and asked for additional information if in the best interests of the city. And that that appears to be what the reason the city did this and the and the motivation behind these changes was to reduce cost in the best interest of the city. Number four would be although the city indicated there would be no changes to the RFP in the June questions, staff selected recommended a vendor with changes to their RFP in the long term. And again, the city said, we will make changes, we will change, you know what our requirements are if in our best interests and everyone was given an opportunity to make these two to respond to all these changes as they went along, no one vendor was given preference over another in terms of making those opportunities. And the city also had the opportunity to choose a vendor and negotiate different terms as well, and they chose to let all vendor stay in the process as long as possible. So for public services, it doesn't.
Speaker 0: I'm sorry.
Speaker 10: They wanted to clarify that the criteria using the evaluation process at that time, when they asked this question, the final report was not out. It now is out. We do believe that that considered all aspects of the RFP and the final recommendations based on the cost proposals and the impact from transitioning to the vendors. There was no wait, but an evaluation which is now out did respond to those factors. Republic Services requested the city only review the initial sealed cost proposals. And again, the staff if that that was the case that. Republic was still lower than ateco and and waste management at that time. They are still third on that. The summary matrices did not show the full services enhancements of the proposal. I think that is accurate. Steph did change that, but the full service enhancements were considered in the evaluation process by H.F. and H and Republic Services believe the proposed recyclable revenues remitted to the city were not given sufficient weight and evaluation process. And this is a key finding. One because the. The recyclable, recyclable revenues are included in the overall cost proposal. And effectively what the city did in their cost proposal is shift the risk of recycling revenues being lower than assumed because the city is asking for direct, you know, a single cost per year or cost per month annualized for these services. So the one the revenues are included in the overall cost and to those revenues are not guaranteed. They're not guaranteed to the vendor in terms that they're going to get. And the revenues they say they're going to provide for the city are also not guaranteed. So those will float to the market. Additionally, if you look at the the way that higher assuming higher revenues in their cost proposal actually came to reduce their cost and they're still not the low cost vendor. All right. Ateco comment letter Ateco had similar comments. They had several comments on the cards which these all relate to. The card issue gets very complicated. The city did not accept Ed Co's responses on cards, which all these three. They're asking for a different way of doing the cards. The city did not agree with that, and nor are they required to. There is. Ed Koch noted that there's $70 million in revenue. I think that's not. It's not net revenue. But that really is irrelevant to the overall choice of who was chosen. Annette, go ask the city to clarify the decision to request alternative cost proposals on an as needed basis. And the city, you know, I think they looked at Echo's responses. Echo didn't respond exactly as the city requested, and that made it more difficult for the city to to include them. Still, they're the lowest cost vendor throughout on all of the recommendations. So talk about little recommendations to, to improve the process. Um, which is primarily these are, I think again, maintaining the boundaries and guidelines outlined in RFP provisions is, is important and should be held to a little more strictly in the future the misrepresentation of financial data that was the issue. Really there needs to be clear instructions provided everyone else seemed to understand what they were, but what those instructions were. But they did not, I think, just clarify the instructions. The perceived lack of consideration of all proposal evaluation criteria. We would recommend some kind of weighted criteria. So there's some sense of how each proposal came in and they have that provides transparency throughout the process and then the need for an independent evaluation of proposals. We suggest you continue engaging consultants like H.f. and H who have, especially on these proposals, requiring technical knowledge and expert support. And we think they did a reasonable job in their support of the city in this process. So in conclusion, um, we think the proposal actually outlined a very logical process. The city staff did go outside of some of the RFP processes in order to complete the evaluation in too short of a time frame. And that's resulted in having a longer time frame. Um, and although irregular irregularities in the process occurred, we do not feel that hindered the proposal or the evaluation process. There was a fair evaluation process and do not believe we need to re-issue the RFP. Our recommendation was that you follow H.f. and his recommendation to either choose Ed Co based on a low cost proposal or a waste management based on their long term relationship. The city lack of vendor transition and second lowest cost proposal. So if that, I'd be happy to answer any questions.
Speaker 3: Thank you. Mr. West, do you have anything additional before we go to. No, sir. Okay. Councilman Austin.
Speaker 5: Thank you and thank you. Mr..
Speaker 0: BRANSON That's right.
Speaker 5: Mr.. BRANSON. Another consultant for a PR firm for a very thorough presentation. I have my reservations about moving forward with the independent study when this issue was before us, but I'm certainly glad we did because I think it was a responsible action. And based on the work that you've done, it's, I think, provided a lot more clarity, hopefully for this council. This process has been long and complicated, and it seems that we are now back at square one. Of course, we did this, went forward with this based on recommendations from our city auditor who weighed in on this, as well as the city manager's office. Who. It's recommended that the council exercise prudence and caution. And so we did the independent study. The PFM findings, in my opinion, validate our staff recommendations a few months ago. And so with that. You know, I see no other option. I think the most responsible action is to make a motion to accept the staff recommendations, to award the recycling services to waste management.
Speaker 7: That's why the council on the item before you this evening. That is on the floor at this time is to receive and file the report from this next item. You will have the option to either accept staff's recommendation or to.
Speaker 0: Reject.
Speaker 3: It just to receive and find the report. Next item to get a chance to accept. Mr. Austin you can make that the next item.
Speaker 5: Okay, so I will revise my motion to receive a further report.
Speaker 3: There's a motion received from the report concerned from range of things. On the second.
Speaker 0: I think I will hold my comments further on the contract when we go to the next. The next item on the agenda.
Speaker 3: Councilor on Price.
Speaker 1: Q I do have a few questions on the report. I want to thank our consultant for being here. So thank you. And I want to thank our City Attorney's Office for facilitating the additional report and Amy Webber's role and seeing this process through. I think that helped, at least in my mind, have another layer of oversight, which I think was very good. As the report has highlighted by PFM, you know, two out of the three vendors that really became part of the relevant discussions had raised issues with the process. And this is a very, very highly technical subject matter. And at least for me, I know it was, I believe, the prudent thing to do to have an objective analysis done. I did have a couple of questions regarding and I have said from the very beginning, we have. Excellent companies that are bidding for this for this contract. All of them have really great resources, municipal resources. To me, it has always been more about the process of how we get to the recommendation than who actually gets the contract. That's that's always been my position and and all. I'm a fan of big data, so I appreciate the additional data you've provided us. I do have a couple of questions. The the options that you've provided for council, are those prioritized in the enumerated order or are they just the three options?
Speaker 10: They're the three options. I have no opinion on how council should move forward. But just those are the three options that I the only opinion is I don't believe there is any any reason that you that I'd say you have to throw out the RFP, but that is still an option. But I don't believe it's necessary to to make a choice on a fair process.
Speaker 1: And then this may be a question that's better posed to city staff. I'm not sure if maybe our public works department or the city manager. Mr. McDonald. I don't know if anyone has given any thought to the option of rebidding. What would the costs and the timeline for such a process look like?
Speaker 7: Here comes James McDonald. He can respond to that. Council member just quickly estimating based on the time and complexity, we would start with at least six months and based on this timeline, on this process and hoping that we've cured the recommendations as provided by PFM, that I think that would be a realistic starting point.
Speaker 1: And what do you think about the cost? Because I'm going to talk about a few things that were highlighted in the report. But what would the cost be to your team to facilitate this type of a process?
Speaker 3: Councilmember Price just to address the cost as information.
Speaker 0: We engaged in the initial RFP.
Speaker 3: Process and that cost.
Speaker 7: Roughly $100,000.
Speaker 3: I would want to point out as well that if the direction tonight.
Speaker 0: To go to a new RFP, we would need to take action.
Speaker 7: On item 28 and extend the current contract as that concludes at the end of this month.
Speaker 1: And I appreciate that. And these are just really informational questions because three options have been provided. And unless we know the pros and cons of each option, I don't think it's, in my opinion, prudent to weigh the options without having all the data. So I want to go through the report just just a little bit, because I had a few areas of inquiry. First of all, I thought the report was really good and moving forward. I mean, this is a this was a significant contract for the city of Long Beach. And while I do know that there are often. Glitches and irregularities that occur in any process. I was understandably. But yet. Reasonably disappointed in some of the irregularities that we saw unfold here because they led to the appearance of something more this this, you know, appearance of impropriety sometimes can come in to a contract process and really taint an otherwise solid process. And that was the part that was disappointing to me. And one of the things I note, I appreciate that you've come up with some recommendations for the future. But one of the areas that I think we really need to focus on moving forward is that there was a lack of clarity in terms of what types of responses were expected. And so that resulted in a little bit of confusion in a highly technical area in regards to how people were responding to the additional augmentation requests. And that created really not a level playing field because everybody was operating from a different standpoint and that was disappointing. The other thing that I found that was a little bit disappointing and and this is not a negative whatsoever on Mr. McDonald or his shop because I know they were working very diligently on this and it was a resource issue, but having to change the point of contact so that the contact person for the city was somehow changed in the process due to a lack of resources, created some speculation on the part of the companies that were bidding that was really unjustified. It sounds like that, you know, there was this change of contact person and that resulted in people thinking there was more to it than there really was, it sounds like, from the report . So those are two areas where, you know, this is a very significant contract. And moving forward, we want to make sure that we have adequate resources so that we're criticism, proof when it comes to those kinds of changes in the process. And again, I've worked with Mr. McDonald now for for two years. He does excellent work. His team does excellent work. This was just a huge contract. And it sounds like there were some staffing resources issues that came up in the middle of this very lengthy process that may have contributed to the confusion on page 17 of the report. There is a reference to a figure, and I'm hoping that someone can give me a little bit more explanation on what's outlined in the last paragraph of page 17. The savings by vendor in each.
Speaker 10: Yes. Yeah. Yeah. So the savings by vendor. So and this was in response to looking at the fact that the on the alternative cost proposals, especially the ten year cost proposal, there wasn't a requirement to to give detailed, detailed analysis of your costs for the vendors to give detailed outs to the cost on page 18, which is where Figure one is located. It just is really looking at the difference because you went from a seven year contract with carts as needed. You start with the seven year contract carts replaced in year four. Waste management included in their initial proposal, a seven year contract with carts replacement as needed. And then later on, the city. And the city requested that same cost from everybody because there are a significant reduction in cost for waste management. The city then in late September said We'd also like to know what your cost would be for ten year contract, right? With or without carts. Carts place near for as needed. So the the point in this was that one of the difficulties in looking at this or one of the things that didn't happen was that there was no requirement requirement on the ten year contract to also give the detailed cost proposals. And so when you're looking at just some of the changes, the differences between what happened to the seven year and ten year contract, there was a question, especially, you know, waste management said continually higher savings for each for each contract. And it was just it was hard to tell where that was coming. And one of the reasons the city asked for in the RFP, the detailed cost numbers, was to make sure that the costs were feasible. But I think what you also have here is you have a guaranteed cost that that if there's something going on with waste management, that they either haven't cost it a ride or there's some, you know, some factor that's not going on that's not clear for them that they continually provided lower cost options. And and they would have to stick to that cost proposal. And they're able to do that. Right. So all all of these vendors have very large balance sheets and are able to do that. But there's this is really pointing out the difficulty there. So because there's some, you know, some strange numbers here and that it's hard to understand all the numbers if you're not asking for that information consistently. But but again, they're getting to what they're willing to give this the city these services for. And so the number they provide is valid.
Speaker 1: Okay. Did you did I hear you correctly that the h f an h report was released?
Speaker 10: That's what I'm told. It was released. Yes, that is I didn't I did not provide it. But I think that's out there for the vendors to receive.
Speaker 1: And that's an 11 page report.
Speaker 7: It's on the website. It's been made available on the website. And I believe it's an 11 page report.
Speaker 0: It sounds about. Right.
Speaker 1: Okay. I don't want to reference anything I'm not supposed to. The question that I have is at some point was a seven year contract term analyzed and what, if any, were the recommendations regarding a seven year contract term?
Speaker 10: I think H said if if you go a seven year contract term, you should go that go. And if you go with a ten year contract term, good waste management. I believe that was their recommendation. Okay.
Speaker 1: And in regards to your analysis in your review, did you make any recommendations or have any findings in regards to the term of the contract?
Speaker 10: I'd say after after talking to both all of the vendors and and staff and H.f. and H, everybody kind of agreed a ten year contract makes the most sense. And the reason it makes the most sense is that the the recycling work that you're contracting for here, that is a very capital intensive endeavor with both the processing plants as well as the trucks. And the longer you have that, you know, you can amortize that capital, the better price you can give the city and the more able you are to provide services on an ongoing basis.
Speaker 1: Okay. I do want to say, looking at your recommendations to improve the processes outlined in your PowerPoint presentation, I really thought the one that I heard a lot during this process was the weighted evaluation criteria as opposed to a pass fail. That seemed to be something that everybody was in. Agreement would lead to a more consistent and assessment ultimately. So I hope that staff and our city manager take that to heart in terms of future contract proposal evaluations, because I think that's a critical one. And then finally, in terms of my questions, you noted in your report that there was in fact, probably there always would be an incumbent advantage in any term, in any any time we've got a vendor of this this length and relationship, but that there were things that the city could have done to not have facilitated a further advantage. What are some of the things that you have pointed out that we can kind of take note of in the future because that wasn't included in your recommendations, but I did see it included it throughout the report.
Speaker 10: Yes. So I think the the primary there is an incumbent advantage. The city knows that there can be advantage or disadvantage based on the relationship, the city and how that vendor is perceived. This case, it appears to be advantage waste managers, good relationship and long term relationship with the city. You know, this is just my my point of view. And I didn't get this from my interviews, but it appeared that asking for a seven or a ten year contract with carts replaced in year four puts everybody on an equal footing in terms of cost in changing to a car to replace to at. Yeah. Whereas needed gives a greater advantage to the incumbent vendor just because.
Speaker 1: Because they know the status.
Speaker 10: You know the status of all of those carts at the same time, they still weren't even with that. They weren't the lowest cost vendor. And so that's, you know, so it didn't give them such an advantage that they were able to to be the low cost vendor. But that because because you could have that perception of maybe thinking a little more upfront about what options you might want to provide and if you're going to provide an option for on this case carts as needed vendors probably needed a little more information about the current state of the carts, and I didn't hear that from the vendors. It's something more that I saw in terms of as I went through this.
Speaker 1: Now, just one final question, and because you're probably familiar with this more based on what you do than than any of us are, but is there any way to you know, in the legal field, we have a way of walling off somebody that may have an interest in an outcome and a case or some sort of an interest where we don't want their input to be involved in how we handle the case. Is there any way that the city could have maybe walled off any staff members that would have been working with the incumbents or any departments that would have been working with the incumbents in order to make the process truly objective? Is that even feasible?
Speaker 10: Yeah. I mean, I think there was I think the city tried to put in place a process that, you know, they're not talking to vendors, vendors, not talking to staff or counsel or other people. So some kind of, you know, kind of the gag order, don't talk about this. Let us do our let us do our work there. I think the process in terms of staff members do have relationships. I mean, they have relationships not just with waste management, though I'm sure they have relationships with other vendors as well. And vendors have relationships with different people. So there's, you know, there's an I think there's an ethical duty and I. I said nothing and I heard nothing. That that ethical duty was violated of not talking to an existing vendor about, let's say, anyone else's process or what the costs are coming in or any or anything like that . The you know, the only I guess the only way to do it is to have somebody completely outside of the city do this. And that may not be in the best interests of the city either. Right. Sometimes you can create more problems by trying to solve a problem. But there's definitely an ethical I think there's an. You know that the city not talk to vendors about this. And I saw no evidence that they did. And I heard no evidence that they did.
Speaker 1: Great. Well, thank you for your report. I look forward to hearing what my colleagues have to say about the report and the recommendations. Thank you.
Speaker 3: Kate. We're going to keep going. Just as a reminder, we're still on the report and have yet yet gotten to the item. So, Councilman Richardson.
Speaker 4: I was hoping that the debate on the item could happen now so we don't have to re debate it. That would be great. So. So let me just say thank you to PFM Public Financial Management for stepping in and doing this. I certainly understand what is at stake in this contract. And when this came up, the logic was questions were raised. We wanted to take an additional step of due diligence to make sure the city council felt confident in staff's recommendation. So we inquired for the city attorney to get involved with selecting the third party vendor and to conduct this this review and to tell us whether or not there was a foul and whether that foul influenced the process. So my first question would be, given that we offered this to the city manager, city attorney to step in. My first question is, what was your process for selecting this vendor? This consultant.
Speaker 7: Mayor Morris, Councilman Councilman Richardson. We obtained through our own office, we got the name of of a couple of firms. We talked with city management, if they had vendors. I also talked to the city auditor. From that, we created a short list and we interviewed three firms. All three, we believe, were highly qualified. And out of that RFP or interview process, we selected PFM.
Speaker 4: Great. So you would say through that process, the this was the most qualified, most credible third party consultants that you considered?
Speaker 7: That's correct. There were a number of factors that we considered in the selection, and PFM was at the top of that list.
Speaker 4: Okay. I see that a number of issues were raised, which I would consider a foul. Now, my question is, I understand these issues and I understand the the the final recommendation. So help me walk me through and walk the public through how these issues do not did not impact the final recommendation.
Speaker 10: So, yes, as we looked at all these issues and again, I think it's hard to have this kind of process without having any any kind of issues. What I what I looked at in terms of these issues and how they related to the final recommendation was, one, did they did was anyone left out of the process or unduly not able to provide reasonable cost or bids for this process? I do not believe that was the case. Everyone was given equal time. In fact, even after the city had narrowed down to two vendors, which was Ateco and waste management for full interviews, when they decided to do a ten year contract option, they opened that back up to all four vendors and interviewed the other two vendors as well on their on their proposal. So I think the city city did go out of its way to try to be inclusive with all the vendors as they made changes, which I don't believe they had to do as it related to their the requirements of the RFP that the city was trying to make, you know, its best efforts in getting this done in a timely process and also at the same time getting the best, best cost for the city. So they felt in the city's best interest, it was helpful to kind of continue moving this forward. When I looked at all the factors and how it moved through was specifically related to the confusion over their pricing, their confusion, the city's confusion and confusion over their pricing. And when that all came out in the wash. Did making any of those changes have an effect on what his final recommendation would be? I did not believe that it did. I don't think it had an effect on what their recommendation would have been from the start or as they went through the process. So really what I looked at, the kind of the what I filtered through is did any of these items did they show a lack of, you know, I think ethical judgment of the city? I do not I did not see that. Did they. Did they show a lack of ability for each vendor to properly get their, you know, provide their credentials and provide their costs? I did not see that. And did it. Did it, you know, effectively change the what the recommendation would have been from the start? And I don't believe it did either, especially given that waste management had come out with you know, they came with two options in their original proposal, which spurred the first the first request for everyone to also give that same cost proposal. So that it was really looking at those were there ethical issues, were there process issues that left somebody out? Or was there anything that happened in this process that significantly disadvantaged one of the you know, one of the partners that should have been considered in that top two? And I do not believe so. I think in any event, the top two vendors would be ateco and waste management. And I think there's a question of, you know, there's other issues that come to bear on cost that city staff has brought forward. And I think that is outside of the purview of this review in terms of what is the city value, what does the city want to move forward with. But I did not feel that the process that happened and even some of the misunderstandings, which I do believe were misunderstandings on both sides, had any impact in what the final recommendation would be in this process.
Speaker 4: Thank you. So so and I understand that that clearly and thank you for conducting this review. And I do see that a number of issues were raised. So my question at this point to the city manager is there are four recommendations here in terms of. Four recommendations in terms of how we can clean up this process moving forward or clean up such processes moving forward. How are we going to implement these or make sure that these are are taken in consideration?
Speaker 7: Councilmember We've already talked about that internally with the Public Works Director and we certainly will take all of these to heart and we will again when we select consultants to do our RFP. In this case, we would talk to them. I can't pronounce their H and H to guarantee that they put those things in place. When we do our piece to get the consultant will put those things in place so that the consultant works with us on that.
Speaker 4: Thank you. So I will just end with we conducted this process to make sure that the Council felt confident in the process and that the process at the end of the at the end of the day was valid, legally valid. And based on this report, although there were problems, I don't know that we crossed the threshold of the process being invalid. So should you know, you know, if there's a motion at the next step to approve staff recommendation, that's what I'm going to support tonight.
Speaker 3: Thank you. Councilman Hooper now.
Speaker 4: Thank you. And my question is for Mr. Branson. Great final report, by the way, but referring to tonight's report. You used the, you know, avoidance of traditional cost or impact of transitioning that was mentioned a few times. And excuse me, if it appears in your other report, I didn't see it. But is that is that an intangible or is there a way to quantify that number?
Speaker 10: Yeah, I think it's it's primarily intangible. I did talk to staff about the transition cost issue and the intangible primarily relates to I mean, it's tangible in terms of if you think if there's a if there's a major transition and vendors, there will be missed missed pick ups, you know, as one vendor gets used to what the roots are when they are, how they work and kind of special, you know, special streets or cul de sacs or whatever that is.
Speaker 4: All right. So so you're saying it's a. It's real, but it's not a known quantity.
Speaker 10: It's a real but not a known quantity.
Speaker 4: Okay. And the conversation about the cards, that would be a transition cost if the existing vendor had cards out there that they didn't need to replace. Would that be part of that? Or you didn't you wouldn't consider that normally.
Speaker 10: Well, in terms of that, you know, the cart issue is is a more complex issue. Right. And going from fixed to as as needed. And I had several conversations with vendors about the card issue. It is a very that could have been you know, that could have been a whole nother study by the staff as they looked at it themselves. But the I think one of the things staff was looking at was that the current practice is as needed. That has worked well for the city. There's not been issues with that. And they felt by changing from a fixed replacement to an as needed, that could result in some overall savings.
Speaker 4: Okay. And then you mentioned the weighted system. So I think what you're saying is no matter how many matrices there are, they should be weighted with some type of numerical system.
Speaker 10: Yes. That there's some you know, they're one of the I think one of the issues for the vendors and what's required by the RFP to have a weighted system. The city said they weren't going to do a weighted system. They did a system where it says, are you qualified or not? At the same point is this was a this is a complicated service. And there's both, you know, the collection as well as the processing. And there could have been some of those factors could have been taken into consideration where if you had a weighted system as opposed to do you meet that scale or not? Again, it wasn't required by the RFP. We don't if that's not an issue, but for the future, that I think would help in giving the council information as well as to what they're choosing and what their options are.
Speaker 4: Okay. Thank you. And just one last point to follow up on what Councilmember Richardson was saying, to quote the late, great Chick Hearn, no harm, no foul. So what Councilmember Richardson was describing as a foul, you're saying if there was no harm done, there was no foul.
Speaker 10: I'm saying that's the result. At the same time, you're looking at the process, there is no, you know, nothing that rose to the level in terms of any kind of staff malfeasance or staff, you know, mismanagement of this that would say what, you really should do this over. So what happened was, you know, the irregularities were there and you should avoid those. But they did not, in my opinion, just reach to a level of saying you should throw the whole.
Speaker 4: I got it. Thank you.
Speaker 3: Gentlemen, your ringa.
Speaker 0: Thank you. Very well. In the spirit of no harm, no foul. There was some harm, I guess. How much gets to staff? How much should we pay for? For this review? For this.
Speaker 7: Report? I think the estimate was not to exceed 30,000.
Speaker 0: Okay. Well, because it's an additional 30,000. But, you know, based on some of the comments that I've heard today, I guess it was a money well spent. This report, as was mentioned before, validated what I really knew back in the beginning in terms of staff, did its diligence, it did its job. They reviewed all the materials as it was submitted to them. Granted, we did discover now this report and it's and it's and it's a it's okay that there were some other. Things that they could have done to make it stronger. The point system obviously is a good recommendation, and I would certainly support that. But I think that in the end, staff did what they were supposed to do, and this report validates that. And so I will be supporting the staff recommendations.
Speaker 3: Thank you. And Councilman Andrews.
Speaker 0: Thank you. I think after listening to these various reports and for my colleagues, you know, at one time I had reservations about all of it. I really needed to hear all the reports from the staff and from my colleagues, because I think that this gives me a better picture of how I can stand on these various issues . And I want to thank everyone for the report and for the stats report. So I want to thank you again, and I'd like to wait and hear from the opponents after we finish this. Thank you.
Speaker 3: Councilman Mongo.
Speaker 2: Thank you. I'm I'm proud of us for making the step to do this review. And the reason I think it's important is that while we always want to trust that our staff are doing the right thing occasionally in any large government organization, that things can happen. And so I think that this keeps everyone aware that we as a council are here to protect the public interest and ensure that each and every group of individuals, if a mistake is made, that we're here to review it and move forward and take the recommendations. But had something been terrible, we would also be the the guardians of the public trust to look into that and ensure that everything is okay. So I'm proud of us for taking that step. And I'm even more proud that anything that was done was not something that needs us to throw the whole thing out. Because one of the other components of this is that businesses spend a considerable amount of money putting forward the documentation and participating in the interviews and going through the processes to become a partner with our city. And so I hope that they value that. We wanted the process to be reviewed and ensure its fairness because this is a very expensive contract that I think is going to be with us for a very long time and it is our responsibility to ensure that. So I too will be supporting the staff recommendation and thankful for the amazing team that we have here at the city who are appreciative of most of the staff are also residents. So I think that they appreciate that we're here to look into things because things happen and sometimes it's an accident and sometimes it's not. And I think that we're very lucky here to have some of the most dedicated employees. And I think that the residents are also thankful that we, as their elected body, are very dedicated to reviewing this process. So thank you.
Speaker 3: Councilman Gonzalez.
Speaker 1: Yes. I, too, just want to. I think this is a very thorough report. So I just want to thank our staff and our consultants for putting the time and effort in to make this as informative as possible. And I know that these are such large contracts that always are susceptible to scrutiny. So, you know, of course, that's just the nature of this. And I don't have any other questions other than to say the same thing that many of my colleagues are saying is that although, you know, this is a large contract, I I've said this to many people that I met with today, is that I you know, my priority in looking at this as a city councilmember for the whole city, not just the first District, is that no service interruption happens for our residents because first and foremost, that is most important to ensure that we're continuing with the exceptional service that we've had so far, but also doing so in a way that is a streamlined process and that we're doing so in a way that is providing additional information. I think we've done so. We've just spent an additional $30,000 to do so, which I don't think we're happy about, but we have to do it in some cases. So I believe I too will be supporting the staff's recommendation. I think it's fair. I think we've gone through and exhausted many of the questions that have been answered to my satisfaction. And if there's anything else, I'm sure we'll we'll we'll raise that again. But thank you.
Speaker 3: Thank you, Mr. Perkin, because this is pretty germane to the next item. I'm assuming we can still do just one public comment for both items. Is that fair to say? I know we've done it in the past.
Speaker 7: Yes, you could. But the safer thing would be due to public comments. Okay. Both on both items since we're hearing them separately.
Speaker 3: Okay. We'll do we'll do all the public comment and there's more. The second time we'll do more the second time. So public comment on this item, please come forward. Seeing none, no public comment. Members, please go ahead and cast your vote.
Speaker 2: Motion carries.
Speaker 3: Okay. Motion carries. Exciting, madam Kirk. We're going to do the next item that's germane to this one. I'm not sure if it's the next one is to 27.
Recommendation to receive and file report by PFM Group, Inc., reviewing the City's Request for Proposals process for contract recycling services.  (Citywide)