..i~ttn: Roy Rivers

124 'IV Sth Street

Room 310..~UStitlf IX 78701

Dear :VIT. Rivers:

ihe Public VVorks Department (P\,\TD) is pleased to submit its proposal to provide Recycli."lgSenices to the City UJ.'1der Requisition No. 09091400778, Our proposal is submitted \,\,ith t.~e

il1tention of meeting the follm~'ingobjectives:

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PWYlde a baseline against ,,,-hieh private sector offers could be eyaluated,

p , • t l-,1 l-,l'" " "n ":'0 0 -, ,..l'd' °h_rOVloe an accep_al,...i.e PU1...11C al.lerrlC.1..1Ve In II e event l-'Tl\-ate sector ot~ers -...:.1 rtot 1Tlleet tot e

goals of the pTOCu.:reLi€Tlt.

FWD's DrD'lJosal substantiallv complies with the Te0.Luirements established L,'1 the Req.uest ror• ~ .....L

Proposals: and is complete 'i,\7}t:" the following exceptions:

Aw.' .. AD" C;ch d . T tru' . 11 DT" 'D ". 0 t 1C·' 0 , 0• . _'L2.enmenL .-\ -1 nang _r e ule mSL,L 'CDons: ne 1 I'v provJGes an merna. Hy opnonfor design, construction, financing, aIld operation and therefore all proceeds accrue to theCt\',

P.~tt2chmeIitB - Transportation Cost Form: Uncer P\·\tD's proposal.~ trle City" "\<\=-i11 cOlltin.ueto pwvide collection and transportation to the neVi Material Recovery Facility,

operate lliider t.~e City'"5 safety· program \.\.-itrl Cit;.- o"\-e:-sight of tl-teir c!:.')era.:ions~ 1heCity.'; Ris~ ~:f3.J."'"1ager already· T:"'l2i:"'~taL."l5 the applicable req:l-8s:ed i.r;fcr~i2:io:-:~

II Refe:ence Sheet P\-\TI is a public 2~tity 2nd does not h2\-e external :-e:e:ences.

• 30:1QL."1g is n,Jt requb:d. as Ph1) is a City entity.

Th S·· '" C'" '" .- ~, ." .. '~"T ')-". .".1. e tarement or _"on- ollUSIon..--.ion-\...on.!l1ct or lm:eres'l:, ana .-.nn-Lob:....ymg 15 prOVlUea ar

Tab 7 per t.'te RIP 1:15ITuctions. All ot..~er requested forms are pw\-ided follo\\'ing this cover

letter.

During t..~e preparation of this proposal, PVvU orgcr1.izationally separated those individuals\'I,'orking on the offer frow the City's proposal tea..'TI. P,\VD had access only to the saTTle

information provided to the private sector providers.

Please do not hesitate to contact me directlv if you ha,'e any questions, or if you needadditional information.

Cry of Ausnn

EXECUTIVE SUM~ARY

Background

The Citv of Austin \.(t."lte "Citv") has determilled it has t."'1e need to replace~ - .

its existi..lg dual-stream material recovery facility (\1RF) V\ith a single-stream

MRF. The current fac.Jity, which was operational from 1998 through September

2008, is now primarily a tra."'1sfer station for the movement of recyclable materials

from the City's collection equipment to contracted transport ver.icles that haul

the materials to a facility in San Antonio. Due to the short timeframe before the

existing contract is due for renewal/extension, SWS is pursuing a "fast track"

approach to bringL"'1g a new MRF on-line. A Request for Proposal (RFP) was

released on November 9th, 2009 to the private sector. The RFP is performance

based, and is open to a variety of technologies and business structures.

Purpose and Intent

The Public Works Department (PWD) of the City of Austin (the "City")

has developed and is submitting a proposal to design and construct a single-

stream MRF. Upon completion, the City's Solid \'\Taste Services Departrnent

(SWS) will operate and maintain the facility, with the option of outsourcing or

privatizing the MRF at a later date. PVVD has been requested to submit the

proposal to accomplish the following two purposes:

1) Provide a baseline against which submittals from private sector entities can

be evaluated.

•"~~ ..-:-".

City of Austin Requisition No. 090"11-1-00778 E5-1 2i5!2lJ1 0

2) P:-;:rdde 2.;1 2.DD:-oac..'1 to t...lte project that could be used iT1 be e,;e:1t t.e'lat a

sa:isfactory priyate sector offer is not received.

PWTI's proposal is compliant ''''ith all applicable requirements of t.'-le Request for

Proposal (RFP), 2..L"1d was prepared separately from ti'-le procurement effort.

Personrlel ,vorkhlg on the proposal "\yere organizationally separated from the

promrement team, 2.J.ld FWD had :10 preferential access to persoThlel or

ir'Jormation.

Project Management Approach

PvVD's approach to the project implements an internal "design-build"

arrangement in which PWD staff serve as the design-builder. Our intent is to

break the project down into small, discrete packages that will be competitively

bid as each is completed rather than wait to bid a complete facility design. 1\7hile

this approach imposes some degree of construction risk upon t.'e City, it is the

only path possible that will enable the schedule constraints to be met. The City's

risk is mitigated through the expertise of PVlD and SVvS persormel. Schedule

risk is further addressed through the experience PWD personnel have in

permitting and compliance issues.

Technical Approach

PWD is proposing to construct the new MRF on the FM812 Landfill site.

This property is City-owned,. negating any purchasing costs and construction of

the MRF is consJstent with the current land use. The site offers reasonable access

and is centrally Inc13ted to serve the region. Development of the site will require

•upgrades of roadways and utilities systems.

City of Austin Requisition No. I)Q091-l-00778 ES-2 26/2.01 0

Financial Approach

Under t.'1e pV"TD approach, the 1\1RF project \,,,·m be f1.l.lcnced using City

funds. Reyenue bonds \-\'iil be issued to coyer the 545.7 million initial cost, \\'hich

will be secured against the fees assessed to recycli...'lg customers. Revenue from

the sale of recvclable materials will be used to offset these fees, to Dav for t1RF... ~ ...

operations, and to potentially provide a transfer to t.'1e City's General Fund.

Revenues are projected to increase in the future due to population growth and

t.'1e marketing of the facility to other users 'ivhile debt service and operating costs

remain relatively flat (adjusted only for iw'1ation). Under this scenario, the City

removes the J(middle-m~"'1" in the process, however it also absorbs the risk of

recyoc1ing demand and pricing inherent in t.~e marketplace. If SV'vTS seeks to

privatize the facility in the future, the balance of the remaining bond debt

required for the i..."'1itial project cost could be paid off from receipts of the sale.

Achievement of City Goals

p\/'vTI's proposal supports the achievement of the City's goals of Carbon

Neutrality by 2020 and Zero Waste by 2040. The presence of a local 1vlRF

eliminates the need to transport materials out of the region. The FM812 campus,

combined with composting facilities at the City's Hornsby Bend Center, provide

for the integration of other waste streams (landscaping debris, food sGaps, and

construction/demolition materials) into the recycling flmv in the future.

City of Austin Requisition ]'\(1. 09091-J.O0778 ES-3 liS/2l11 0

Procurement Risk

Financiat Risl<

Cily procurement/negoliations wilh successfu! offeror place schedule in jeopardy.

Prolesls from unsuccessful offerors preclude timely award of contrac!.

Privale sedor off"l'Ors are unable to obtain construction financing.

Privale seelor offerors are unable to obtain debt financing al acceptahle mtes.

Private sector firm profitability requirement reduces revenues to City.

Variability in market for recydable malerin!s nentes loan repnyment risk which Cily will absorb.

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['WD leam is avnilnhle I" stnrt design work immediately. Noextended ncgofialion:c; arC' required, find in-holl~p perfnnnflllr('

pn'cludes potential protests. Inilial professional servicesrequirements Ciln be met through the use of exisling rolalion lists.

The PWD solu!ion propllses using revenue' bonds tied 10 refj'dingfees. The "good fnith and credit" of the Cily willensun~ the hesl

debt rales are oblained hy miligating repayment risk. Cily canrecover investl1lelllthrough privalizntion al a Inter dale.

Direct operation by the Cily ensures it willl1laxilJlize tI", n'lurIl it.- receives on the snle of n'cl'c1nble Illalerinls. If n lhird parI}' debt is

used for construclion aIH! opemliou, tl1f' privat" enlily will seek 10

transfer risk III thl' Cily.

Performance Itisk

Offeror mny present hnsiness structure thnl creales bnnkl'l1ptfy remote entily for pnrenl company.

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Permitting nctions nrc behind schedule nnd mny prevent start of construction.

---------Shortl'erformnnce time nvnilable precludes complete design before bidding conslruction work.

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City is nl risk if prival" parI}' d<'faults awl thp legal pnlity hns nonssels, lending tll lilignlion m,,\ polpnlinl addilionnl cosls.Execnting with nn inlNnul lenm serving ns tl1l' design·builderprovides cerlninly in c"sl nnd schedule I'nrillneters.

Cily technicnl siaff hns knowledge "f required permits nndprocesses 10 oblain npprovnls. Direct working n'\afionshil'smnong governmenlal ngpnci('s I1Iny hpl" in ,'xl'edHing p"nnilreview and approval.

Internal design-build stHlrlure with I'wn as the conslrurlionmannger mimics I'rivnle design-build and conslrudion lIlanilgPrnt risk alTnngemenls under whirh I'rlljecl cnn b" divided intodiscrete pncknges thnl can hp bid sl'!'arnll'1}'. Long Ipnd time itemsCiln also be procured in ndvnncp of IOWt.· desir,n complelion.

Lnck of a third party design-huild entity plnces wnnnnty risk on the CHy. FWD will oblain wnrmnlies from conlmclors for individnal wllrkpacknges and for "'lnil'lI1ent inslallnlion. Sill1l'lifipd design of

. . ~!3.I~~ildi~_s!':l~c1u':e_I~~li!',"_~'!~l~u~!I~!.'B. r~~. __ Elinlillati~Jll "f

Cit~lll( Austill Hl'qlli"ition No.IN(l'JI-t00771"l II ~(l

third part)' construction Inaomgpr wlil n·t1uce project cosI.

Site conditions, ulilities upgrades, and transportation improvements may increase cosl and dela}' completion.

1----.----------.--------.----Strategic Risk Outsourcing of MRF may reslIll in loss of City jobs.

Use of internal design-hnild appmach "lIows hnilding 10 pron·edwhik' unknown conditions are investigated. The proposed Citydesign team has r('viewed existing horing lugs ami utilitiesconditions and has incorpurated mitigation illlo III<' desigllapproach. PWI) has ndvanfngps ovt'1' third part\' fjnn~ in

coordinating required Irilnsporlation and utility plOjl'cls withresponsihlc' entities.

Operation of the MIU' using SWS personn<" mitigates potpnlialloss of jobs and C'IlSUH.'S appropriate wilges and hroltpfils fire paid

to MRI' slaff.

Internal project execlllion may create disharmony in business community and with SWAC PWD will still ('n1plo)' local contractors for conslruction.Proposed approach addresses short term perfonnancc' andfinancial risk, bnt provides for potc'nlial outsourcing/privatizationat a later date. PWI J is prepared to prescnl its approach to theSWAC and other stakeholders.

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HazardIUsk

Localion of facility may create puhlic opposition and increase cost of sit" procuremenl.

Safety during construclion and operation may result in accidents and additional costs.

Location at the FMIl12 landfill sill' IIses City-owned prop"rty forthe MRF. Proposed development of MRF cmnpus is consistenlwilh current land lise. Site is centrally locilled, and notimmediiltely adjacenl 10 residentiill areas.

City construction safely program will be enforced on sit!'. SWSLoss Prevention and Control Plan will be employed anddeveloped into a sill' specific saf"t)' plall.

11-21 .~/:V2t)IIJ

all commodities processed. S'\VS staff developed fee schec:uJes used for billing ail.d

:e';'enue sh3.ring \",'itt, private haulers. 5'1\'5 also implemented internal record

keeping and reporting procedures, used in conjunction "l-vith the fee schedules and

dedicated solid waste management soft"\'\' are, in the da:" to day operation or the

MRF. These systems are still being used today for the management and accounting

procedures at the Recycling Center and can be adapted to be used at the proposed

Single-Stream Material Reco\"ery Facility.

T:'le proposed management and maintenance staff ror the Citv-o,\'ned and

operated single-stream :\lRF t1as ninety (90) \'2ars of combined operational

, • " . , CT\,"C " - r>fj' ·"'"h.. ,'"supen'lSlOTl, manageme:>t ana marK€nng expenence. _.t ~.s LOul Qent (. ,2<, gnen

the opportunity, its designated inteT:tal staff has the ability, capability and

experience to properly manage a sh'lgle-s:-ream \1P.F.

Development and GrOlrth of Local.\farkcts

The de\-elopment of a. \,fRF in the .A..ustirl area \'\-i11 al1o\\;, the City to take

control OHr the nO\-\' of recydables ct:1C \\.il] pro':ide a "regional solution" felT these

materials. By operati:>g its O\\T, facility, the City can eliminate the "middle man"

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tha t othen·\ise ",; ...~"""u'!.-"i,.;1. In_ .........-:. ::..~ ....."-.~..-.!'~,n..~~. - ...·....I~I.~,~"" '-A~l.... -L-l._ - _1 ~~ __ '-' rio '-"_L~~ .Ll.~'w.

processL.1.g is contracted out. The reduction in cost,

ana increa.se In

to be sore responsIve, ., .....

3.CQltJOI1 50u:ces ITiaterials

to t~e recyclable strE:2.J.-rt.

recyclable materials are provided in Section 3.2.5 abov·e.

~',\laste Reduction, Reuse, and Recycling Strategies at the lTJ..RF

The City of _-\usr.:..J."'1 tla5 made 'S1lSta1.i.2.bility, a Cit:"y-"\.vide rr..a.lidate for all

plJblic development projects.

prilnary goal for the lvli<F project under t~e LIS Green Building Council"s LEED

program. The Dros-aITl ~~a1llates six areas of sustail"1abilitv' !\."'-vater efficiency,~ ~r J_

energy aJ.id atrr1osphere, materials and resoprces, hldoor envirOnrrtCll.tal quality}

a..T"ld iThlovation and design process)' that address t~e strategies of ,'\.taste reduction,

reuse, and recycling.

Experience 7Dith C01nposting Facilities

The Cit).... of A.:ustin is a recognized leader in composlli"lg operations, and tbis

eXDerience ,-\:ill be extended to tile fv'U'\.F Droiect. PVvu has ~-\~orked extensivelv V\/"ith~ l. , ~

the ..-\usr.LIl vVater Utility (.<~\,\:13) to design Cu'1d construct improvements to the

Hornsby Bend Biosolids ~vlanagement Plant. Jirn \~ickery, the proposed Lead

Inspector, i.s currentlv responsible for improvements to the cOIn.posting facilities at

Hornsby Bend.. anet t,,"~ill ·bring this expenence to the yffiF project. Other PVv7D

person.i1el involved In· the project Y-liIi also be available to assist on design fu'1d

construction of the \tOO. Through A\'\11, SWS \\'i11 be able to access expertise on

the operation or industrial scale composting facilities.

Future Plant Expansion to Incorporate l\'on-Traditional ~\1aterials

The FM812 landfill site has sufficient size and topography to accommodate

expansion for the incorporation or non-traditional materials, including but not

limited to landscaping debris, food scraps, and construction and demolition debris,

as discussed belov.,:.

Landscaping Debris

SWS currently collects yard trimmings and large brush and deli\'ers them to

the Hornsby Bend facility, \vhere they are integrated into the composting process.

This plan contemplates continuing this process.

Food Scraps

\,\:'hile the US lags behind other countries in the collection of food \vastes,

those communities that offer this service generally rely on source separation. For

example, Alameda County, CA collects food wastes \vith yard trimmings in a

separate container from other recyclable materials. Should the City of Austin look

to incorporate separation and collection of food wastes in the future, v\'e anticipate a

similar system \·\,ould be put in place and the composting of these materials would

be conducted at an expanded Hornsby Bend facility or another site. Processing of

food \'\'astes would require construction of additional facilities on site f with

extensive a.ttention being paid to vector and odor control.

prrD

t, ;! \: !.');' \ '. j '. t j i .~ ..... ':,"',', I)

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Demolition/Constnlctiol1 Debris

The handling of construction and demolition debris would require source

separation of concrete, brick, steel, lumber, and other materials. The FM812 site has

sufficient space to handle some quantities of these materials, as discussed belm\':

Concrete: Tne City currently allOlvs the use of crushed concrete as road base, and

could accept deliYeries of concrete debris (with the reinforcing steel removed).

Facilities would be required to crush, and stockpile this material for sale, with

special attention to dust control.

Lumber: \rVood debris could be accepted and added to the composTh'1g flow once

the material is reduced to a sufficient size. Industrial scale ,,,rood chipping

equipment would be required, and facilities would have to be designed to address

dust and noise concerns.

Brick: The market for recycling of brick includes separation of materials for reuse

as a building material without further processin& processing of brick materials to

make new bricks, and the use of brick chips for landscaping purposes. PWD

anticipates that if the MRF were expanded to accept brick, operations would

involve separation based upon buyer requirements.

3.3.2 Transportation/Equipment

Transportation ofAlaterials

ThE: "-'dection of the FM812 site provides a centrally located option that can

p red'._:...e '-r;:rnsportation costs and impacts. However, improvements to the

':':'::~t..S8 r0\.J.~C': and entrance road will be required to reduce congestion and enhance

City Of Au~tin Rcquisiti(,n \it). IWlNl-lP0778 Jll-34

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