94820_Addenda_2_Rate_Study_RFP.pdf

COUNTY OF SACRAMENTO

DEPARTMENT OF WASTE MANAGEMENT AND RECYCLING

REQUEST FOR PROPOSALS

2025 – PURB RFP – 0041

SOLID WASTE RATE STUDY AND FINANCIAL PLAN

SOLID WASTE RATE STUDY AND FINANCIAL PLAN RFP 2025 – PURB RFP – 0041

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SOLID WASTE RATE STUDY AND FINANCIAL PLAN RFP 2025 – PURB RFP – 0041

Table of Contents

1 PROJECT SUMMARY

2 BACKGROUND

3 PROJECT GOALS

4 SCOPE OF WORK

4.1 TASK 1. COST OF SERVICE STUDY

4.2 TASK 2. RATE UPDATE AND FINANCIAL PLAN

4.3 TASK 3. RATE COMPARISON ANALYSIS

4.4 TASK 4. REPORTS

4.5 TASK 5. PUBLIC HEARINGS

5 PROJECT SCHEDULE

6 PROPOSAL SUBMISSION PROCEDURES AND REQUIREMENTS

6.1 RFP QUESTION SUBMISSION AND ADDENDUMS

6.2 PROPOSAL SUBMISSION

7 PROPOSAL CONTENT

7.1 COVER LETTER

7.2 WILLINGNESS TO SIGN

7.3 FIRM & TEAM QUALIFICATIONS

7.4 REFERENCES

7.5 PROJECT UNDERSTANDING AND FIRM’S APPROACH

7.6 SCOPE OF WORK

7.7 COST PROPOSAL

8 PROPOSAL EVALUATION AND SELECTION PROCESS

8.1 SELECTION COMMITTEE

8.2 DISQUALIFICATION OF PROPOSALS

8.3 EVALUATION CRITERIA

8.4 AWARD OF AGREEMENT

ATTACHMENT C – SAMPLE AGREEMENT

ATTACHMENT D – RESIDENTIAL RATE SCHEDULE

ATTACHMENT E – FACILITY FEE SCHEDULES

SOLID WASTE RATE STUDY AND FINANCIAL PLAN RFP

1 PROJECT SUMMARY

The County of Sacramento Department of Waste Management and Recycling (DWMR) is requesting proposals from qualified Consultants/Firms to conduct a comprehensive review of its solid waste rates and rate structure, produce a medium-term rate forecast and set up a long-range financial planning model for its Solid Waste Enterprise Fund. The intent of the study is to obtain an independent assessment and evaluation of the present financial status of DWMR’s Solid Waste Enterprise Fund and recommend rates that will adequately fund DWMR’s future operational, capital, and debt service needs while maintaining adequate reserve balances. The selected Consultant will be responsible for ensuring compliance with applicable California State Statutes.

Important Dates:

• May 28, 2025 at 10:00 AM PST: Pre-Proposal Conference (Optional)

• May 30, 2025 at 4:00 PM PST: RFP Questions Submittal Deadline

• June 13, 2025 at 3:00 PM PST: Proposal Submittal Deadline

2 BACKGROUND

Sacramento County (County) is located on the northern end of California’s central valley region. The County began its residential waste collection program in the unincorporated areas in 1968. DWMR, within the County’s Community Services Agency, manages the County’s Solid Waste Enterprise Fund.

DWMR manages the operations, maintenance, and development of the solid waste management system within unincorporated Sacramento County, which includes:

• Residential curbside collection services for garbage, recycling, organics, used oil/filters and bulky waste pickup to more than 600,000 residents through 165,000 household accounts across 800 square miles of the unincorporated area.

• Transfer and disposal services for residential, commercial, and self-haul customers at its regional facilities – the North Area Recovery Station (NARS), Kiefer Landfill (KLF), and two drop-off facilities for household hazardous waste.

• Regulation of commercial solid waste and recycling requirements for businesses/commercial and multifamily properties.

DWMR’s solid waste infrastructure includes KLF, NARS, the South Area Transfer Station (not currently open to the public), and two closed landfills in post-closure care. DWMR received approximately 1 million tons of materials in CY 2024 at KLF and NARS, of which about 880,000 tons were disposed at KLF, while the balance of recoverable materials went to its various partners for recycling or organics processing.

The Solid Waste Enterprise Fund is a self-supporting enterprise fund. Revenues are derived primarily from residential service charges and tipping fees at KLF and NARS, which together account for approximately 90 percent of DWMR’s total revenues. The sale of electricity accounts for about 4 percent of total revenues with the balance of revenues being a mix including reimbursements from the Commercial Program, charges for household hazardous waste drop offs, property leases, and natural gas and recyclables sales. DWMR’s revenues must be adequate to finance operations, capital improvements, landfill closure and post-closure costs, and meet reserve fund targets. Though the Solid Waste Enterprise Fund operates as a single enterprise fund, revenue streams are divided into two major categories:

1. Rate revenue – service charges for residential solid waste collection from households in the unincorporated County (ratepayers); and

2. Business revenue – primarily tipping fees at KLF and NARS from commercial waste haulers and self-haulers.

The County Board of Supervisors last adopted rate schedules for residential rates (Attachment D) effective July 1, 2022 through July 1, 2025 and tipping fees at KLF and NARS (Attachment E) effective January 1, 2022 through January 1, 2026.

3 PROJECT GOALS

The selected Consultant shall perform all necessary research and analyses to prepare a rate study of DWMR’s solid waste rates and fees and recommend a five-year rate and fee forecast. These recommendations shall be supported by an overall financial planning and financing strategy to be developed alongside DWMR staff and ultimately presented to the County Board of Supervisors. We believe that this work will be accomplished most effectively by setting up a rate and fee model and financial plan.

Specifically, DWMR desires to have delivered, upon completion, the following outputs:

I. Updated solid waste rate and fee considerations beginning July 1, 2026 for residential rates and January 1, 2027 for facility fees and a forecast of recommended annual rate and fee adjustments over a 5-year period.

Recommended rate and fee adjustments shall be as follows:

a. Facility Fees (Tipping Fees) with an effective date of January 1, and

b. Residential Rates with an effective date of July 1

II. A user-friendly, 10-year financial planning and rate and fee model that will be used by DWMR to analyze the rate impacts of various operating, capital investment, and financing scenarios, monitor the enterprise fund’s financial outlook, and produce management reports.

4 SCOPE OF WORK

Completion of the requested services in the Scope of Work will require a comprehensive review and analysis of DWMR’s Solid Waste Enterprise Fund’s historical statements of revenues and expenses, customer counts and classes, projected customer growth, current and projected service levels, Capital Improvement Plan (CIP), fleet plan, reserve policies, revenue collection system, and any other information deemed pertinent.

4.1 TASK 1. COST OF SERVICE STUDY

The objective of the Cost of Service (COS) study will be to fully characterize and quantify DWMR’s operating and capital expenditures and determine the overall cost of serving each customer class. Results of the COS study shall serve as the basis for setting rates for each customer class. Costs will be analyzed for baseline conditions and future conditions (projected costs) taking into account anticipated operational changes and capital improvement plans.

In general, the COS study will involve completion of a number of steps including, but not limited to:

1. Updating cost allocations by service provided:

o Regular curbside collection, o Appointment-based curbside collection, o Household Hazardous Waste operations, o Recovery and transfer operations, and o Landfill and disposal operations.

2. Updating cost allocations by type of solid waste material processed:

o Garbage o Organics, and o Recyclables

3. Assigning costs to Fixed, Variable and Capital cost categories

4. Reviewing and updating Level of Service (LOS) categories for each customer class

5. Updating customer classifications based on type of service and LOS provided

6. Allocating costs to customer classes and determining unit costs in each customer class

4.2 TASK 2. RATE UPDATE AND FINANCIAL PLAN

In this task, the Consultant will compare anticipated revenue based on the current rate and fee structure by customer class to the proposed allocated cost of service determined in Task 1. The Consultant shall propose adjustments to the current rate and fee structure so that revenues match the recommended cost of service and will identify the impacts of such proposed rate changes to customers.

Further, the Consultant shall lead and facilitate the development of a financing strategy and 10-year financial plan alongside DWMR staff which together with the COS study will be used to establish recommended residential rates and facility fees for July 1, 2026 and January 1, 2027, respectively, and projected residential rates and facility fees for July 1, 2027 and January 1, 2028, respectively, and beyond. This is anticipated to be accomplished within a rate model to be developed by the Consultant.

The Rate and Financial Planning Model is envisioned as an Excel-based user-friendly dynamic planning model that will be used to calculate recommended rates over the short term (3- to 5-year horizon) and to forecast and monitor DWMR’s long- range financial outlook over a 10-year horizon. It will also be a tool for analyzing or modelling the financial or rate impacts of various business or financing scenarios, including capital project scheduling, level of service changes, and debt financing decisions.

The structure and construction of the model should ensure ease-of-use by DWMR staff to accomplish these desired tasks.

4.3 TASK 3. RATE COMPARISON ANALYSIS

The Consultant shall conduct a review of solid waste rates and rate structures for similar agencies and compare with proposed DWMR rates and charges to provide context and support for recommended revisions to DWMR’s rates and rate model.

Selection of agencies to be included in the comparison analysis will be done with DWMR staff input.

4.4 TASK 4. REPORTS

The Consultant shall prepare two reports on the cost of service and the analysis of current rate revenue. The first report will be focused on recommended rates for the facilities, NARS and KLF. This report will support facility fees and charges planned for January 1, 2027 and beyond, as appropriate. The second report will cover the entire enterprise, incorporating content from the initial report and including residential rates. It will be used to support the adoption of updated residential solid waste rates effective July 1, 2026 and will serve as the administrative record for DWMR’s solid waste rates and charges.

4.5 TASK 5. PUBLIC HEARINGS

Board of Supervisors public hearings may be held to present the results of the rate study and financial plan. The Consultant will work with DWMR staff to prepare the meeting materials and may be called upon to present or respond to questions. The hearings are expected to cover:

□ Updated cost of service by customer class and recommended rates, including fixed and variable charges, fees, and surcharges, if any;

□ Comparison with current rate structure and analysis of what adjustments are recommended to meet the updated cost of service and revenue requirements and the impacts of proposed rates on different customer classes; and

□ Comparison of proposed fees and charges to other agencies and factors behind any significant differences with other agencies.

5 PROJECT SCHEDULE

DWMR expects all the analysis and reports for the study to be completed within calendar year 2025 in time to allow for the public notification and County Board of Supervisors adoption process, and revised residential rates and facility fees to take effect July 1, 2026 and January 1, 2027, respectively, if necessary. As noted earlier, DWMR would intend to implement rate increases in two stages. Facility fee adjustments at NARS and KLF are not subject to the requirements of Articles XIIIC and XIID (Prop 218) of the State of California, whereas rate adjustments applicable to our curbside residential customers must allow for adequate Prop 218 notification and community meetings (if necessary) prior to Board adoption. Should facility fee and/or residential rate adjustments be recommended, the following schedule is envisioned:

Event Date Pre-proposal Conference (optional) May 28, 2025, 10:00am Deadline for Submission of Questions May 30, 2025, 4:00pm Proposals Due June 1320, 2025, 3:00pm Anticipated Contract Start Date July 1, 2025 Report – Residential Rates and Facility Fees

October 2025

Board Hearing – Residential Rates and Facility Fees

Dec 2025/Jan 2026

Project Completion June 30, 2026

6 PROPOSAL SUBMISSION PROCEDURES AND REQUIREMENTS

Firms interested in submitting a proposal should closely examine the specific scope of services contained in Section 4 of the RFP and Attachment C (sample agreement).

6.1 RFP QUESTION SUBMISSION AND ADDENDUMS

All questions concerning this procurement process or requests for applicable data must be submitted through the OpenGov Procurement system by the specified date in section 5. The County will not respond to questions after this date. DWMR’s contract manager for OpenGov items is:

Tracy Soth Tel: 916-875-1461

Email: SothT@SacCounty.gov

At DWMR’s discretion, the Project Manager may or may not answer the specific questions asked. Questions deemed appropriate for response will be distributed, along with their respective responses. No questions from proposing firms shall be directed to other parties involved in this procurement. Violation of the protocol described herein may be grounds for immediate disqualification of the proposing firm from the procurement process.

Improper Contact:

Do not contact any other County employees or officials regarding the contents of this RFP or the selection process. Questions regarding this RFP or the selection process should be directed through OpenGov pursuant to the conditions above. Improper contact with anyone other than Project Manager regarding this RFP may result in disqualification of the Proposer from the proposal evaluation process.

6.2 PROPOSAL SUBMISSION

All proposals must be received by the time and date shown in section 5 of this RFP. If the submission is late, that firm will be disqualified. If the submission is lacking any of the required submittals, that firm may be disqualified.

7 PROPOSAL CONTENT

To facilitate evaluation of the proposals received, all proposals must conform to the chronology and content described in this section. Failure to include all of the information specified may be cause for rejection.

7.1 COVER LETTER

Cover letter should include the following:

• Title of this RFP;

• Name and mailing address of firm (include physical location if mailing address is a P.O Box); and,

• Contact person, telephone number, and email address.

7.2 WILLINGNESS TO SIGN

All Proposers must indicate their willingness to sign a final form of the sample agreement (Attachment C). Any deviation in a proposal from the language in the agreement must be explained in detail. Substantial differences in language or terms between a proposal and the agreement may result in rejection of the proposal. DWMR reserves the right to negotiate minor modifications of the language contained within the attached agreement upon selection of the Consultant.

7.3 FIRM & TEAM QUALIFICATIONS

Describe your firm’s culture, background and history, include number of years in business. Describe your firm’s qualifications and experience in relation to solid waste rate studies and other utility rate studies, as well as public sector financial planning and revenue program development or reorganization. If your firm has a recognized area of expertise, please highlight that expertise.

Provide a brief summary of the role, relevant qualifications and experience of the designated project manager and each team member, including length of service with the firm and the qualifications/experience of any sub-consultant’s or sub-contractor’s staff on your team. Identify the services which would be completed by your firm’s staff and those that would be provided by sub-consultants or sub-contractors, if any.

Include the firm’s organizational chart, including its constituent parts. Full resumes may be included as an appendix to the proposal. The Proposer will be required to assure that Project team members will be available for the study or that substitutes acceptable to DWMR are provided.

7.4 REFERENCES

Provide a minimum of three (3) references for projects or services similar in nature and scope that your firm’s team members have completed in the last five (5) years. Include brief descriptions of the projects, dates, client names and contact persons’ names, email address and telephone numbers. Public sector references are preferred.

7.5 PROJECT UNDERSTANDING AND FIRM’S APPROACH

Provide a narrative describing your understanding of the services requested in the RFP and your firm’s approach to the successful implementation of this study. In general, please be sure to address the following elements:

• Your understanding of the role of a Consultant in updating and developing a solid waste enterprise fund rate study and financial plan, supporting elected officials and staff through the rate approval process,

• Your firm’s financial management practices for contract management and cost control, and

• The basic methodology that you would use to determine required curbside collection rates and transfer station/landfill tipping fees.

Proposers are encouraged to discuss any ideas, innovative approaches, or specific new concepts included in the proposal that would provide added benefit to DWMR.

Describe any major challenges that you might anticipate and include any issues that you believe will require special consideration.

7.6 SCOPE OF WORK

Provide detailed descriptions of work to be performed and the methodologies to be used under each task to demonstrate that the proposer has considered all aspects of the study and that the proposer will cover them adequately.

7.7 COST PROPOSAL (SEPARATE FROM PROPOSAL)

Provide a fee schedule of hourly rates for all proposed staff and sub-consultants/sub-contractors for the tasks listed in Section 4, with a not-to-exceed proposed budget in Section 6 Vendor Submissions question 5.

Describe how the firm intends to charge for additional services such as attendance at additional community meetings or preparation of additional rate scenarios. If an hourly rate basis is used for additional services, please state the hourly rates for each of the project team members. Specify which items, if any, are reimbursable expenses to be paid by DWMR, and at what rate. Such items might include postage, printing, travel, etc.

8 PROPOSAL EVALUATION AND SELECTION PROCESS

8.1 SELECTION COMMITTEE

A Selection Committee will be convened by the County to qualify and rank all proposals received. The Selection Committee will be comprised of one or more representatives from the County. The Selection Committee may choose to invite proposers to oral interviews.

8.2 DISQUALIFICATION OF PROPOSALS

A Proposer may be disqualified if Proposer fails to meet any of the requirements of this

RFP.

8.3 EVALUATION CRITERIA

Proposals will be ranked based on the following criteria:

1) Relevant experience and qualifications of firm and proposed staff/sub-consultants/sub-contractors (per Section 7.3 and 7.4)

2) Understanding of the proposed services, approach and proposed scope and methodologies (per Section 7.5 and 7.6)

3) Proposed cost (per Section 7.7)

8.4 AWARD OF AGREEMENT

An agreement will be negotiated with the highest ranked Proposer. If the County is unable to negotiate a satisfactory agreement with the highest ranked firm on the list, County will undertake negotiations with the next ranked firm and so on until it has obtained satisfactory agreement. Upon award of an agreement by County, this RFP and the Proposal submitted by Proposer will be incorporated into the agreement.

There is no guarantee that all the work or any part of the work for the County will be awarded under this solicitation, or that any award will result in an exclusive contract.