20. Yardwaste
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
(408) 777-3354
FAX: (408) 777-3333
PUBLIC WORKS DEPARTMENT
SUMMARY
AGENDA ITEM
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AGENDA DATE May 16, 2006
SUBJECT AND ISSUE
Adopt a resolution approving the Agreement for Processing of Yardwaste between the City of
Cupertino and Zanker Road Resource Management Ltd.
BACKGROUND
The City of Cupertino has contracted with Zanker Road Resource Management (Zanker) for
yardwaste processing since 1993. Council approved the first amendment to the agreement in
1996 and a second amendment in 2001. The current contract expires on June 30, 2006, however,
the City has the option of renewing the contract for three additional three-year terms.
Two options were considered to provide service in the future:
1. Exercise the option of continuing service with Zanker for the next three years and negotiate a
competitive price.
2, Reopen the contract to competition, issue a Request for Proposal (RFP), let other companies
compete, and improve upon services received.
Preliminary discussions with Zanker regarding an extension resulted in a proposal for a
significant price increase per ton, City staff determined that issuing a RFP was the best
alternative to determine market conditions.
Evaluation
The outcome of issuing a RFP to the four qualified companies holding current permits for
compo sting in this county resulted in only one response, from the City's current contractor,
Zanker. Various comments from other companies for providing no response to the RFP included:
not enough permitted capacity to accept Cupertino's compost, no markets for selling the compost
product, and the ability to accommodate the material as alternative daily cover (ADC is used as
cover in landfills to control fire, vectors, odors, blowing litter & scavenging) only, in lieu of
processing the material into compost which is currently our practice and was specified in the
RFP,
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There are two reasons Zanker provided for the price increase. The final composting operations
take place at the Z-Best facility located outside of Gilroy and Cupertino's yardwaste must be
trucked to that facility from the drop-off point at Zanker Road in San Jose. Although this has
been the case for sometime, in the original contract, the processing took place on Zanker Road
and now fuel prices have helped to increase the costs. Secondly, operations that facilitated lower
prices in the past such as using the material for biomass (conversion of plant derived materials to
fuels) and co-generation (combined heat and power from the same energy source, i.e. wood) are
no longer profitable operations.
Further negotiations with Zanker revealed that they are in the process of obtaining permits to
increase the amount of allowable materials processed at their sister facility, Green Waste
Recovery, on Charles Street near Oakland Road, from the City of San Jose and the State of
California. A use permit is scheduled to go before the City of San Jose Planning Department on
May 16 and thereafter the State of California has 180 days to approve the permit to increase
tonnage capacity. Zanker has proposed better pricing by going through the Green Waste
Recovery facility whereby larger and better equipment can process more material at one time and
therefore take advantage of economies of scale. After some processing at the Green Waste
Recovery facility, the material is then trucked to the Z-Best facility outside of Gilroy for final
processing. The distance between Charles Street and the Z-Best facility is shorter than the
mileage between Zanker and Z-Best, our current situation, which is another reason Zanker can
offer a lower price by using the facility located on Charles Street.
The comparison of Zanker's current rates and their proposed cost of service rates at the two
separate facilities are as follows:
Service Zanker Road: Zanker Road: Green Waste Recovery:
Current Service Proposed Service Proposed Service
JuIv 1, 2006 Jan. 1,2007
Yardwaste $25.62/ton $44.00/ton $39.70/ton
Processing
Yardwaste N/A $59.00/ton $47.00/ton
containing
residential food
scraDS
Compostable waste N/A N/A $74.00/ton
(commercial:
restaurants, grocery
stores, etc.)
Zanker has agreed to honor the improved rates when Green Waste Recovery's Charles Street
facility is open, or by January 1, 2007, regardless of whether that facility is in operation,
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FISCAL IMPACT
To process approximately 8,100 tons per year of yard waste at $44,00 per ton through December
2006, and $39.70 per ton for the remainder of the 2006-07 fiscal year will cost $338,985.00. This
is an increase of $131,463.00 over FY 2005-06. The funding is recommended in the proposed
FY 2006-07 operating budget, funded from the Resource Recovery Fund, Account #520-8003-
7106.
STAFF RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 06- 097, approving the
Agreement for Processing of Yardwaste between the City of Cupertino and Zanker Road
Resource Management Ltd.
Submitted by:
Approved for Submission:
.ASr.1>It-1
Jw
David W. Knapp
City Manager
-t=Þ.... Ralph A. Qualls, Jr.
Director of Public Works
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DRAFT
RESOLUTION NO. 06-097
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
APPROVING THE AGREEMENT FOR PROCESSING OF Y ARDW ASTE AND
COMPOST ABLE WASTE BETWEEN THE CITY OF CUPERTINO AND
ZANKER ROAD RESOURCE MANAGEMENT, LTD
WHEREAS, there has been presented to the City Council a proposed agreement
between the City of Cupertino and Zanker Road Resource Management, Ltd. for
processing yardwaste and compostable waste; and
WHEREAS, the provisions, terms and conditions of said agreement have been
reviewed and approved by the Director of Public Works and the City Attorney; and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Cupertino hereby approves the aforementioned agreement for the term of July 1, 2006
through October 31, 2010, and authorizes the Mayor and the City Clerk to execute said
agreement on behalf of the City of Cupertino.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 16th day of May 2006, by the following vote:
Vote Members of the Citv Council
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
APPROVED:
City Clerk
Mayor, City of Cupertino
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