Submitted By: Rusella Bowes-Johnson
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Presentation By: Sean Lanier
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Department: Water & Sewer
STAFF RECOMMENDATION (Motion Ready):
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Approve Amendment No.1 to modify the Consumer Price Index language of the five-year agreement with A.C.M.S., Inc. d/b/a Heart of Florida Environmental for the disposal of City wastewater treatment plant biosolids
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OCALA’S RELEVANT STRATEGIC GOALS:
Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The City of Ocala’s (City) Water Resources Department is requesting approval of Amendment No.1 to contract # WRS/250069 with A.C.M.S., Inc. d/b/a Heart of Florida Environmental (A.C.M.S) for the disposal of biosolids from water reclamation facilities (WRF) 2 and 3 in its landfill. A.C.M.S is the nearest landfill to the city that will accept our biosolids and the City has been hauling biosolids to that location since 2018. Currently, the City hauls approximately 8,800 tons of biosolids per year. The current contract expires on January 2, 2030, and the current price for disposal is $62 per ton.
FINDINGS AND CONCLUSIONS:
The original proposal from A.C.M.S. (dated September 26, 2024) contained the following language, “Commencing on the first anniversary thereof, the initial rate above shall be adjusted annually by the percentage of increase in the Consumer Price Index for Urban Consumers - Garbage and Trash Collection, as published by the Bureau of Labor Statistics of the US Department of Labor, or any successor governmental agency.” This language was inadvertently left out, and instead, the following was included, “There will be an annual increase of 2.5% effective on the anniversary date (January 2) of each year of this agreement.” Both A.C.M.S. and the City missed this error and executed the agreement with the wrong language.
Amendment No.1 corrects the language to be consistent with the September 26, 2024, proposal. Procurement has deemed this a material modification that requires council approval. The September 26, 2024, proposal is attached to this agenda item. The City surveyed all Class I landfills within three hours of driving distance and found that A.C.M.S. is still the most cost-effective disposal option. The referenced survey is also attached to this agenda item.
The “Garbage and Trash Collection” component of the Consumer Price Index (CPI) has increased by approximately 3.6 percent annually over the past ten years. If this trend continues, the difference between the current 2.5 percent and the “Garbage and Trash Collection” component 10-year average of 3.6% would be an additional $27,619 in disposal costs over the next 5 years. If the “Garbage and Trash Collection” component of the CPI is higher than 3.6% in the next 5 years, then the increase in disposal costs will go up accordingly.
Staff recommends approval of Amendment No.1 to the contract. This contract still contains a provision that either party may terminate this agreement, for any reason, or no reason, upon six months' written notice to the other party. Staff is researching other alternatives for treatment instead of disposal in a landfill.
FISCAL IMPACT:
The Water Resources Department has budgeted sufficient funds in the Fiscal Year 2024-25 budget to cover costs from January 2, 2025, through September 30, 2025, as follows:
WRF #2 455-030-305-535-53-34010 $ 188,000
WRF #3 455-030-308-535-53-34010 $ 210,000
PROCUREMENT REVIEW:
This proposed Amendment No.1 complies with the City of Ocala Procurement Policy.
LEGAL REVIEW:
This proposed Amendment No. 1 has been reviewed as to form and legality by City Attorney,
William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny
SUPPORT MATERIALS:
• Partially Executed First Amendment
• Heart of Florida Environmental Proposal Dated 9-26-24 (pdf)
• Survey of Class I landfills (pdf)