Report Prepared by: Charles Slagter, WWTP Operations Supervisor
Title
SUBJECT: Approval of Agreement for the Harvesting of Wastewater Treatment Plant Land Application Crops with Bradley Bertuccio Hay Baling, Inc., for the Remainder of Fiscal Year 2024/2025 in the Amount of $101,250 and the Annual Amount of $270,000 for Subsequent Years; the Agreement Shall Have an Initial Term Beginning March 1, 2025, Through June 30, 2027, with an Option to Extend the Agreement for Two (2) Additional One (1) Year Term(s) Ending June 30, 2029
REPORT IN BRIEF
Considers approving the Agreement for Harvesting Services with Bradley Bertuccio Hay Baling, Inc., for the remainder of Fiscal Year 2024/2025 for $101,250.00 and the annual amount of $270,000 for subsequent years for harvesting services for the Wastewater Treatment Plant Land Application fodder crops.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Agreement for Harvesting Services with Bradley Bertuccio Hay Baling, Inc., for the harvesting of the Wastewater Treatment Plant Land Application Area fodder crops in the amount not to exceed $641,250 through June 30, 2027, with an option to extend the agreement for two additional one-year terms through June 30, 2029; and,
B. Authorizing the City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve, as recommend by Staff; or,
2. Approve, subject to other than recommended by Staff; or,
3. Deny; or,
4. Refer to Staff for reconsideration of specific items; or,
5. Continue to a future meeting.
AUTHORITY
Merced Municipal Code Title 3 Article III Purchases Over Twenty-Five Thousand Dollars.
CITY COUNCIL PRIORITIES
As provided for in the FY 2024-2025 Adopted Budget.
DISCUSSION
The Wastewater Treatment Plant (WWTP) Land Application Area (LAA) serves as an environmentally friendly way of disposing the biosolids that result from the process of treating wastewater. The biosolids are a soil amendment for the 750 acres of farmland that grows fodder crops for local farmers and ranchers. Since farming is not the primary objective of the LAA, the LAA does not have the staff or equipment to harvest the crops. Therefore, the WWTP contracts the harvesting of the crops.
The City of Merced entered into a harvesting agreement with Big Iron Custom Farming in fiscal year 2023/2024 for a duration of three years. Due to unforeseen circumstance the vendor was not able to perform the duties under contract and closed his business. As a result, a Request for Proposal (RFP) for harvesting services was issued in October 2024. Staff received 2 responses for harvesting of the land application crops. An official cancelation letter is included as attachment 2.
Harvesting:
Derek Mumby Custom Hay
Bradley Bertuccio Hay Baling, Inc.
To determine which proposals best serves the City’s interest, staff compared criteria for harvesting, such as the total cost of harvesting (swathing, raking, baling, and stacking) as well as the number, type, and age of the equipment. All vendors were compared regarding experience of handling large volumes of hay and silage. After careful consideration, staff recommends Bradley Bertuccio Hay Baling, Inc., for the harvesting services for the Wastewater Treatment Plant Land Application fodder crops.
The initial contract term will commence on March 1, 2025, ending on June 30, 2027. The City shall have the option of renewing the agreement for two (2) additional one (1) year periods through June 30, 2029.
Bradley Bertuccio Hay Baling, Inc., will harvest crops at a cost of $45.00 per ton. The following breakdown is an estimate of yields and values based upon previous years actual numbers and serves as a baseline for budgetary estimates.
From March 1, 2025, to June 30, 2025:
• Winter Hay: 250 acres@ 4 tons/acre= 1,000 tons x $45.00 per ton = $45,000
• Alfalfa: 500 acres @ 2.5 tons/acre = 1,250 tons x $45.00 per ton = $56,250
Total: $101,250.00
The gross amount of value for the crops if the winter hay is valued at $120.00 ton and alfalfa at $150.00 per ton is $120,000 for winter hay and $187,500 for alfalfa.
Total: $101,250.00 in harvesting costs.
Total crop value: $307,500
After paying for harvesting fees the net profit paid to the City of Merced will be $206,250.00
From July 1, 2025, to June 30, 2027:
• Alfalfa: 500 acres @ 7 tons/acre = 3500 tons x $45.00 per ton = $157,500
• Sudan: 160 acres @ 4.6875 tons/acre x 2 cuttings = 1500 tons x $45.00 = $67,500
• Winter Hay: 250 acres@ 4 tons/acre= 1,000 tons x $45.00 per ton = $45,000
The gross amount of value for the crops if the winter hay is valued at $120.00 ton, alfalfa at $150.00 per ton, sudan grass at $80.00 per ton is $120,000 for winter hay and $525,000 for alfalfa and $115,000 for sudan grass.
Total: $267,300 per year in harvesting costs.
Total crop value: $$760,200
After paying for harvesting fees the net profit paid to the City of Merced will be $492,900.
Revenue from the sale of the fodder crops is dependent upon the amount and type of crop harvested, as well as current market rates. The revenue generated is used to cover the costs of purchasing seed, fertilizer, and for the production costs of operating the LAA.
IMPACT ON CITY RESOURCES
Funding is available in the FY2024-25 adopted budget within Fund 6000-Wastewater Treatment Plant for the harvesting cost of approximately $101,250. The contract cost for future years will be budgeted with the annual budget process.
ATTACHMENTS
1. Agreement for Harvesting Services
2. Big Iron Custom Farming cancellation letter