R9Y - Discuss Commercial Waste Hybrid Option

Discussion Items – R9 Y

COMMISSION MEMORANDUM

RECOMMENDATION

Based on these findings, the Administration recommends conducting further review and due diligence of the proposed addition of residential buildings up to 16 units to the contract, and return to the September 3, 2025 City Commission meeting to provide updated information and potential next steps at the September 3, 2025 City Commission meeting.

In addition, Administration recommends also returning on September 3, 2025 to the City Commission to provide a recommendation regarding the addition of Great Waste to the multi- family residential and commercial waste hauler contract.

BACKGROUND/HISTORY

Since 2008, the City has had a number of waste haulers for commercial solid waste collection and disposal. Over time the total number of waste haulers decreased from four (4) to its current two (2) vendors: Waste Management Inc. of Florida (Waste Management), and Waste Connections of Florida, Inc. (Waste Connections).

In late 2021, the Public Works Department (Public Works) engaged MidAtlantic Solid Waste Consultants (MSW) to assist staff in evaluating the current franchise agreement structure and to provide recommendations for an open versus closed, and exclusive versus non-exclusive, franchise waste contractor agreement. MSW presented its findings on April 29, 2022 to the Finance and Economic Resiliency Committee (FERC), and recommended that the City transition to an exclusive franchise system. Committee members at the time were not in agreement with the findings of MSW, and therefore concluded the discussion with a motion to expand the analysis and to come back to a future meeting with an update. The Administration continued discussing this matter at FERC meetings from May 27, 2022, through September 22, 2023.

At the March 31, 2023 FERC meeting, FERC members discussed the solid waste commercial franchise hauler presentation and concluded with a motion to have the item heard at the next City Commission meeting, with a favorable recommendation to proceed with a Request For Qualifications (RFQ) that would allow a minimum of three (3) waste hauler companies, plus a fourth and fifth as alternates, which would be determined as part of the evaluation process. The RFQ request was approved at the May 17, 2023 City Commission meeting via Resolution No. 2023-32617. Additionally, the Resolution allowed for the extension of the current contracts for non-exclusive commercial franchise waste services while the procurement process was being finalized.

On October 5, 2023, the City issued RFQ 2023-506-WG Franchise Waste Contractors to Provide Multi-Family Residential and Commercial Waste Collection and Disposal. Responses were due and received on January 5, 2024. Five (5) submittals were received in response to the RFQ. On March 13, 2024, the City Commission adopted, by 7-0 vote, Resolution No. 2024-32967, sponsored by Commissioner Laura Dominguez, directing the Administration to: terminate RFQ 2023-506-WG for non-exclusive franchise waste haulers to provide multi-family and commercial waste collection, and to prepare a Request for Proposals (RFP) for a ”Single Hauler“ for such services; to award an exclusive franchise to the qualified proposer having the most competitive and comprehensive proposal, including with respect to customer pricing; such RFP to be reviewed and approved by the City Commission prior to issuance; as well as the extension, on a month-to- month basis, of the contract term for the Non-exclusive Franchise Waste Contractor Agreement and Service Agreement for additional solid waste collection services and collection of recyclable materials, until such time the new franchise agreement was awarded.

At the March 22, 2024 FERC meeting, Public Works presented FERC members, seven (7) recommendations for qualitative and quantitative criteria to be considered in the procurement of a ”Single Hauler“ (exclusive agreement), for multi-family residential and commercial waste collection and disposal (referral approved at the January 31, 2024 City Commission meeting, sponsored by Commissioner Alex Fernandez). The discussion at Committee concluded with a motion to move the item to the City Commission with a favorable recommendation to engage a new consultant to assist with the development of the RFP, including an analysis of:

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Potential financial impacts for FY 2025 and beyond resulting from additional City responsibilities A hybrid model option, and Waste hauler systems used in other similarly unique coastal cities

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At the May 15, 2024 City Commission meeting, Public Works presented the FERC‘s favorable recommendation to engage a new consultant to 1) assist with the development of the RFP including an analysis of potential financial impacts for FY 2025 and beyond resulting from additional City responsibilities, 2) provide an investigation/comparison of other coastal cities outside of Florida, and 3) include an analysis of a potential hybrid model. Vice-Mayor Dominguez made a motion to adopt the Resolution as recommended at the March 22, 2024 FERC meeting, with the amendment to have a single hauler, instead of a hybrid model option. The amended single hauler model motion received 3-4 vote, causing the motion to fail. A second motion was made by Commissioner Alex Fernandez, to adopt the Resolution as originally presented, with the hybrid model option. This motion received a 7-0 vote, approving the motion via Resolution No. 2024-33070.

At the July 24, 2024 City Commission meeting, the Administration presented and received approval to proceed with the issuance of RFQ 2024-366-WG Solid Waste Consulting Services, seeking a qualified independent consultant to provide solid waste consulting services as requested. The City received a single proposal, from MidAtlantic Solid Waste Consultants, LLC, the same consultant who conducted the initial study. The Administration had no option but to reject the proposal received as the direction was to engage a new consultant. The RFQ for consulting services is in the process of being reissued.

At the June 25, 2025 City Commission meeting, the Administration provided an update on the non-exclusive Waste Hauler Request for Proposals (Item R9S). The discussion concluded with two motions by Commission members:

• • Motion to Develop a Proposed Hybrid Model: Directed the Administration to bring back a proposed hybrid model at the next Meeting (July 23, 2025). This model should indicate the correct thresholds for different types of buildings and businesses, ensuring a balance between single-hauler and multi-hauler systems.

• • Motion to Direct the City Manager: To determine whether it would be in the City’s best interest to consider the qualifications of Great Waste hauler. If it is deemed in the best interest, bring forward a bid waiver at the next Commission Meeting on July 23, 2025.

ANALYSIS

• •

Motion to Develop a Proposed Hybrid Model:

City staff has conducted a pricing sample analysis of multi-family and commercial properties (Attachment A) to evaluate the rates businesses and residential complexes are charged for commercial garbage collection. Based on the analysis, the data indicates that the apparent break point for residential buildings with up to 16 units represents the level at which proposed changes would benefit the greatest number of customers. Implementing these adjustments would provide:

o o o o

Stable pricing (no new service charges or new full surcharges) A minimum of one (1) bulk pickup per month No brokers Having the City manage new contracts and pricing

Properties above this threshold will continue operating under the existing multifamily waste collection system until a new procurement process has been finalized.

On the attached spreadsheet, there are two scenarios. The columns in red represent the current level of service for multi-family buildings with 9-16 units from the two franchise haulers, not including recycling services. The column in green reflects the same level of service, with the new residential per cubic yard unit rate offered by Waste Connections under the new residential contract. It does not include recycling services.

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Motion directing the City Manager to determine whether it would be in the City’s best interest to consider the qualifications of Great Waste hauler:

The Administration is currently working with the Procurement Department to evaluate Great Waste’s services and overall performance. As part of this review, Great Waste would be required to meet, at minimum, the established RFQ minimum requirements which was also required from the currently contracted haulers. Should they meet the criteria, the approval and execution of an agreement with Great Waste could be considered by the City Commission for approval, including the required bid waiver.

FISCAL IMPACT STATEMENT

To be determined.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

CONCLUSION

Based on these findings, the Administration recommends conducting further review and due diligence of the proposed addition of residential buildings up to 16 units to the contract, and return to the September 3, 2025 City Commission meeting to provide updated information and potential next steps at the September 3, 2025 City Commission meeting.

In addition, Administration recommends also returning on September 3, 2025 to the City Commission to provide a recommendation regarding the addition of Great Waste to the multi- family residential and commercial waste hauler contract.

Applicable Area

Citywide

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Public Works

Sponsor(s)

Co-sponsor(s)

Condensed Title

Discuss Waste Hauler Hybrid Option, Evaluate Great Wastes’ Eligibility as Third Hauler. PW

Previous Action (For City Clerk Use Only)