R3 was engaged by the City of Los Altos (City) to conduct a Performance and Billing Review of Mission Trail Waste Solutions (MTWS) as included under their Collections Service Agreement (Agreement) to provide solid waste, recycling, and organic collection services for the City. R3’s high level review of MTWS consisted of two main tasks: a performance review and a financial compliance assessment. The primary goal was to determine MTWS’ compliance with the applicable terms and conditions of the Agreement, review the effectiveness of current operations; and identify opportunities for program improvement.
R3 worked with MTWS management and City staff to assess MTWS’ compliance with the reporting requirements and performance standards of the Agreement, as well as verify customer billing rate calculations and service levels, franchise fee calculations, and reported diversion percentages.
R3 utilized a variety of methods in the execution of the performance review, including analysis of relevant documents, on-site and field observations, and interviews. The Performance Review addressed the following major aspects of MTWS’s operations:
- Collection Service Agreement Compliance Review;
- Collection Operations Review;
- Management and Administration Review;
- Vehicle and Equipment Maintenance, Repair and Replacement Review;
- Customer Service Review (including customer feedback);
- Monthly, quarterly and annual report assessment;
- Diversion Programs, Performances and Good Faith Efforts; and
- Outreach and Education Services.
R3 conducted the financial compliance assessment to determine that customers are being charged the proper service rate based on their service level; service rate revenues are properly recorded and accounted for by the contractor; franchise fees are properly calculated, paid and received. R3 conducted three tests to accomplish this goal:
- Test of Subscribers to verify that service subscribers are billed the correct rate for the level of service provided;
- Test of Revenue Transactions to verify that the billed amounts to City residents and businesses, and the corresponding payments received are properly recorded in the MTWS billing and accounting systems; and
- Test of Franchise Fee Transactions to verify that the franchise fees are calculated correctly, and based on the correct level of recorded revenues.
Our review found that MTWS is in compliance with the vast majority of the Agreement’s requirements. Collections are performed in a safe, courteous, and cleanly manner; coordination between the drivers, customer service, shop, and management is facilitated by an effective system of work orders; fleet maintenance operations and vehicles have consistently received satisfactory ratings from the California Highway Patrol; and MTWS is operating a sophisticated and professional customer service operation.
We determined that the most significant area for improvement relative to the Agreement’s terms and conditions is in outreach and education, which is not being performed according to the Agreement’s requirements.
Project benefits include:
- Verification of MTWS’ compliance with the vast majority of the Agreement’s provisions;
- Recommendations for MTWS’ improved compliance with the existing requirements of the Agreement regarding meeting reporting requirements, outreach and education activities, and paying the City franchise fee and administrative fees; and
- Recommendations for revisions to the Agreement with regards to HHW collection services, rate requirements, and the billing schedule.