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CC - 06-25-96MINUTES OF THE REGULAR MEETING ROSEMEAD CITY COUNCIL JUNE 25, 1996 . APPROV P D CITY OF i'OSEI)<DAD DATE o2 a fly.. The regular meeting of the Rosemead City Council was called to order by Mayor Clark at 8:00 p.m. in the Council Chambers of the City Hall, 8838 E. Valley Boulevard, Rosemead, California. The Pledge to the Flag was led by Councilmember Taylor The Invocation was delivered by Councilmember Bruesch ROLL CALL OF OFFICERS: Present: Councilmembers Bruesch, Taylor, Vasquez, Mayor Pro Tem Imperial, and Mayor Clark Absent: APPROVAL OF MINUTES: JUNE 4, 1996 - SPECIAL MEETING MOTION BY COUNCILMAN TAYLOR, SECOND BY MAYOR PRO TEM IMPERIAL that the Minutes of the Regular Meeting of June 4, 1996, be approved as submitted. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. APPROVAL OF MINUTES: JULY 11, 1996 - REGULAR MEETING MOTION BY MAYOR PRO TEM IMPERIAL, SECOND BY COUNCILMAN VASQUEZ that the Minutes of the Regular Meeting of July 11, 1996, be approved as corrected. Vote resulted: Yes: Vasquez No: None Absent: None Abstain: Taylor Clark, Bruesch, Imperial The Mayor declared said motion duly carried and so ordered. Councilman Taylor requested a status report on the Closed Session portion of that meeting as he was not in attendance. PRESENTATIONS: - None ORAL COMMUNICATIONS FROM THE AUDIENCE - None II. PUBLIC HEARINGS A. PUBLIC HEARING - GENERAL PLAN AMENDMENT 95-02 - AMEND THE HOUSING ELEMENT OF THE ROSEMEAD GENERAL PLAN TO MEET THE STATE REQUIREMENT FOR 1989-98 PLANNING PERIOD; AND ADOPT RESOLUTION NO. 96-23 - APPROVING GENERAL PLAN AMENDMENT 95-02, AMENDING THE HOUSING ELEMENT OFTHE ROSEMEAD GENERAL PLAN FOR THE PLANNING PERIOD ENDING JUNE 30, 1998. CC 6-25-96 Page #1 An explanation of the procAures for` the conduct of the public hearing was presented by the City Attorney. The Mayor opened the Public Hearing for those wishing to speak on this item. Frank Tripepi, City Manager, presented the staff report. Juan Nunez, 2702 Del Mar, Rosemead, inquired about any proposed changes to the Housing Element. Peter Lyons, Planning Director, responded that there will be no changes in the development standards or zone changes. John Rauth, 3558 Bartlett, Rosemead, expressed his concerns regarding the lack of shelters for the homeless in Rosemead and that the Housing Element should have included Sally Tanner Park also as a congregating area. Frank Tripepi, City Manager, responded that the homeless problem needs to be handled regionally rather than jurisdictionally. There being no one wishing to speak, the Mayor closed the Public Hearing. Councilman Taylor asked if the County is still handling Section 8 Housing and does the City receive full funding. Frank Tripepi, City Manager, responded that the City receives funding direction from HUD upon becoming an Entitlement City and Section 8 Housing is mainly run by the L.A. County Housing Authority. Councilman Bruesch, in referring to the non-profit construction section of the Element, asked if any other cities have been involved in this type of housing. Mr. Lyons responded that various cities use this method and have negotiated with non- profits to provide subsidized housing. Councilman Bruesch requested examples of this type of subsidized housing used by other cities. MOTION BY COUNCILMAN BRUESCH, SECOND BY MAYOR PRO TEM IMPERIAL that the Council adopt Resolution No. 96-23, approving General Plan Amendment 95-02 with a finding of a Negative Declaration. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. III. LEGISLATIVE A. RESOLUTION NO. 96-22 - CLAIMS & DEMANDS The following resolution was presented to the Council for adoption: RESOLUTION NO. 96-22 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD ALLOWING CERTAIN CLAIMS AND DEMANDS IN THE SUM OF $354,654.05 NUMBERED 16812 THROUGH 16964 CC 6-25-96 Page #2 r. l MOTION BY COUNCILMAN BRUESCH, SECOND BY MAYOR PRO TEM IMPERIAL that Resolution No. 96-22 be adopted. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. B. RESOLUTION NO. 96-24 - PROCLAIMING JULY 23, 1996 AS NATIONAL PARENTS' DAY The following resolution was presented to the Council for adoption: RESOLUTION NO. 96-22 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD PROCLAIMING JULY 28, 1996 AS NATIONAL PARENTS' DAY Juan Nunez, 2702 Del Mar, Rosemead, stated that approving this resolution will cause a myriad of other organizations to demand equal representation also. Mayor Pro Tern Imperial and Councilman Bruesch requested more information on this organization before voting on this item tonight. There being no objection, the Mayor deferred this item pending further information. C. RESOLUTION NO. 96-25 -ADOPTION OF THE CITY OF ROSEMEAD'S 1996-97 APPROPRIATION LIMIT AND ANNUAL BUDGET The following resolution was presented to the Council for adoption: RESOLUTION NO. 96-25 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD ADOPTING AN APPROPRIATIONS LIMITATION FOR THE 1996-97 FISCAL YEAR AND ADOPTING THE ANNUAL BUDGET FOR 1996-97, MAKING APPROPRIATIONS FOR THE AMOUNTS BUDGETED MOTION BY COUNCILMAN BRUESCH, SECOND BY MAYOR PRO TEM IMPERIAL that the Council adopt Resolution No. 96-25 approving the 1996-97 Appropriation Limit according to Article XIII-B (Gann Initiative) of the constitution of the State of California, and approving the 1996-97 Annual Budget, and making the appropriation for amounts budgeted. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. IV. CONSENT CALENDAR CC-A APPROVAL OF CONCESSION STAND LICENSE AGREEMENT - AMERICAN YOUTH SOCCER ORGANIZATION CC-C AWARD OF BID - COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - SENIOR CITIZEN LUNCHES CC 6-25-96 Page #3 • • k;, MOTION BY COUNCILMAN BRUESCH, SECOND BY COUNCILMAN VASQUEZ that the foregoing items on the Consent Calendar be approved. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. CC-B ACCEPTANCE OF STREET EASEMENTS FOR HIGHCLIFF STREET RECONSTRUCTION PROJECT Juan Nunez, 2703 Del Mar, Rosemead, asked if these agreements involve building walls around the perimeter of the property as discussed at a previous Council meeting. Councilman Taylor responded that the right-of-way agreements replaces the existing fences. MOTION BY COUNCILMAN TAYLOR, SECOND BY COUNCILMAN VASQUEZ that the Council accept the attached easement deed and direct the City Clerk to record the deed together with the certification of acceptance and authorize the City Manager to execute the Right-of-Way Agreement on behalf of the City. Vote resulted: Yes: Vasquez, Taylor, Clark, Bruesch, Imperial No: None Absent: None Abstain: None The Mayor declared said motion duly carried and so ordered. V. MATTERS FOR DISCUSSION AND ACTION A. SELECTION OF DATE FOR PLANNING COMMISSION INTERVIEWS After discussion, it was decided to hold the Planning Commission interviews on Tuesday, July 16, 1996, beginning at 6:00 p.m. B. CONSIDERATION OF RENEWAL OF REFUSE CONTRACT BETWEEN CITY AND CONSOLIDATED DISPOSAL SERVICE VERBATIM DIALOGUE BEGINS: MAYOR CLARK: Item 5B.- Consideration of Renewal of Refuse Contract Between City and Consolidated. FRANK TRIPEPI, CITY MANAGER: Honorable Mayor and members of the Council. You have received before you a proposal request from the present contractor, Consolidated, to extend disposal services to the City of Rosemead. The City Attorney and I have gone through this proposal in detail. We have included some of the existing contract and also in the attachment is the residential solid waste ...survey that shows rates of other areas and Rosemead certainly is, from the survey, among the lowest of any city around. And if the Council is so we recommend that you approve the attached document. This is franchise with CDS and authorize the Mayor to execute the document, and the contractor is here this evening to answer any questions. COUNCILMAN TAYLOR: Madam Mayor. Mr. Tripepi mentioned to me two weeks ago that this would be coming before us. I got the impression that it was an extension for another year of the existing contract, basically, rather than putting it out to bid. After reading and reviewing it, I find too many questionable sections in here that I'd like to get some answers CC 6-25-96 Page #4 • on it before we vote on it. Starting with Page 1 of the cover letter - the Evergreen Clause..."CDS is requesting an "evergreen clause" in the agreement. That clause states quite simply that the contractor is granted a one-year extension to the agreement annually so that the term of the agreement shall remain constant at five-years." As soon as we approve this, the way I interpret that is that we go for one-year and we are automatically saying that this is a five-year contract... "For example, on August 1, 1997, a one-year extension of the agreement would automatically take place. On August 1, 1998, another one-year extension would be granted, and every year thereafter until the City states its intent to sever the agreement at the end of the then current five-year term." By approving this, it basically is a five-year extension. Is that correct. ROBERT KRESS, CITY ATTORNEY: It's a five-year extension and elsewhere in the document it states that there is an initial term of five-years, that for each one-year that is served, unless the Council takes action to send a Notice of Termination of the Evergreen Clause, one year extension is added. This would be, if adopted this evening, a five-year deal. You could, tomorrow, if you choose, send a Notice of Termination of the Evergreen Clause and it would make this a single five-year term. If you don't do that, one year passes, then from that point in time, it would again be a five-year deal. What it really means is that for the future, as presently drafted, the Council would need to give a five-year notice to terminate this agreement. COUNCILMAN BRUESCH: Madam Mayor. I can see the purpose, the monetary, not to lessen Gary's thoughts. I can see the reason for that. In this day and age for a clause like this over the issue, time that we that have to go into this new look. Looking at the trade papers, I realize that the multi-cost ...it's going to cost the contractor, or any contractor for that matter, millions of dollars, they need to have some kind of guarantee that their franchises, that there would be a good return on this. I would like to know if its possible after the initial five year Evergreen, that it would be cut back to three years so that we would do what we've done in past, do a three year time period. I think that is what we do with other contractors. So it comes back to us in 1998 so that in three years we can go out to contract to bid again. Would that possible? TRIPEPI: Is that agreeable, John? Initially you have a five year, they're talking about going to three. JOHN TELESIO, PRESIDENT, CONSOLIDATED DISPOSAL SERVICE: Madam Mayor and members of the Council, it's not for a moment that 1 want to appear ungrateful. I appreciate any type of extension you can afford us, but if I can share with you from our perspective what this represents. Five years, although it may seem like so far in the future, in the context of the renewal at least in contract, it's actually a very short term. In fact, of all of the franchises that we at Consolidated, right now holds twelve franchises, exclusive franchises. This would the shortest franchise agreement that we have - on an Evergreen basis. And for this very reason, as Councilman Bruesch has pointed out, we have an on-going need to, basically, recapitalize, all the time. We just have to do that. We can't continue to run the vehicles at the cost that they are. They are beaten to death just by the nature of the vehicle. They have a lot of hydraulics, they are heavy. You can't help it. There is an on going capital need. And, then, what I want to talk to you about here really enhances the automation and these type of things. So, not only are we talking about the MRF, which is a huge capital outlay, but we're also talking about tremendous outlay for the cans, the automated containers, which are very nice, the Cadillac type of containers. And, they are actually very expensive, about $50 to $60 each. They have to be replaced on an on-going basis. And, as I said, I don't want to appear not to appreciate your offer, but please . And that's why when we approached this renewal of franchise, we are seeking it in conjunction with the Evergreen. Basically, it will be all automatic, self-extending, just for a year each time. This is the shortest. I don't want to appear negative, but it would be very difficult, three years isn't very long. We would appreciate it if it would be five and that's not unreasonable if you do a survey, what is a standard term. Not only, with all the other companies that have this, other regional carriers have the same magnitude in costs and responsiblities. BRUESCH: Isn't it true that most of these Evergreens are re-negotiated on the basis of the MRFing facilities . What the original cost is and the MRF when you go back to your normal cost of the investment in trucks. CC 6-25-96 Page its • • TELESIO: Well, Sir. That's actually... that's become an additional motivation. But, not necessarily as I stated. Some of our franchises that have this exact same feature date back twenty years, I'm serious. It's become ...I can name two or three, Santa Fe Springs since 1960 has had a ten year agreement franchise for years. As long as we perform and we have demonstrated that we can get the job done, we have an Evergreen clause and we've had it for years. In this case, the idea of the capital outlay which is required for MRF is just an additional motivation. It really goes a lot deeper than that. That happens to be one area that Larry works with, he's here everyday. You've heard from the citizenry, from the state legislature and you know your own sense of responsiblity, recycling is important. Now we need to find an economic way to do it, MRFing is the way to do it, most economic way to do it. But, it requires a huge cash outlay - millions of dollars outlay. So that's just another motivation. But, actually sir, it goes much deeper. It has to do with the basic fundamental delivery of the service. TAYLOR: Madam Mayor. You mentioned you have twelve other cities. What cities are those? TELESIO: Artesia, Avalon, Bell, Cudahy, Hawaiian Gardens, La Mirada, Naples, Norwalk, Rosemead, South El Monte, Santa Fe Springs, South El Monte and Whittier. TAYLOR: Have we made a comparison of the rates of those cities, those twelve cities compared to Rosemead... those twelve in comparison to Rosemead? Just strictly those twelve? COUNCILMAN VASQUEZ: That's what I'm looking for. TRIPEPI: Which cities, as an example, Mr. Taylor. Clark: Bell TAPE BLANK FOR APPROXIMATELY 20 SECONDS Time it took for;: Councilman Taylor to turn his tape over. TAYLOR: How much is that, what page is that? So Bell is paying almost double our rate and they have automated service? TRIPEPI: They automated, John? TELESIO: They will be. TAYLOR: They are not now, but they will be? How about Artesia. TRIPEPI: Artesia pays $11.15 for automated service. TELESIO: If I may, Gary. The rates are definitely more affordable. If you look at personal survey among all of the twelve cities, you'll find the rates are very stable. TRIPEPI: There are only two cities lower, Mr. Taylor, they don't pay at all. Those services are picked up by.... TAYLOR: I'm not against some increase, that's reasonable. I have some other questions I'd like to continue on here. On page 2. it states - of more importance this section also includes language stating, "upon commencement of the Material Recovery Facility (MRF) operations, a separate formula shall be set forth which takes into account the disproportionate"...it doesn't say set forth which takes into account... "disposal costs associated". It states "disproportional", and I'll read a couple more items. That sounds to me like its kind of unknown. There's got to be... BRUESCH: Where is it? CC 6-25-96 Page #6 • TAYLOR: On Page 2., the second paragraph. The summary of it, then in the contract there's some items there that I'd like clarified. But it states that a separate formula shall be set forth. What is this formula? And how are the primary ...the businesses are the ones that are going to get this extra charge. Is that correct? The residential rate is not going to be effected too much by this. TELESIO: I'm going to have Enrique Vasquez our Vice President speak. ENRIQUE VASQUEZ, VICE-PRESIDENT, CDS. In reference thereto the formula specific, if you are familiar with the existing contract, there is a portion of the range for disposal and a portion for collection. Historically, that distribution has been pretty stable. As disposal costs have increased, that has changed somewhat. When we go to MRFing, the proportion, the relationship changes dramatically, about 50% of the costs are for taking to the MRF, the disposal, 50% of the collection. If we were to retain the old relationships it could not account for the higher proportion of the cost of handling the waste. TAYLOR: What is the old relationship, in perspective? E. VASQUEZ: It's been in between 25 and 30% disposal, which will include 70-75% collection. TAYLOR: So, they are still going to have the 75% collection? E. VASQUEZ: For residential it would be 70-30, and would retain that. As long as it doesn't go to a MRF, and it's not proposed to at this time. TAYLOR: What happens to our businessman. I get this as it's primarily going to hit the businessmen, August 1st of this year. E. VASQUEZ: . The initial step would be a recycling campaign. Phase I would start as soon as August 1 st. We would start distributing materials, Consolidated can offer staff to go into businesses and offer them technical advice on setting up recycling programs on identifying materials that would qualify or be candidates for recycling, full-service offered on an individual basis. Then as we see the results come back it could take three months, six months, depending on the responses of the business community, the next phase as we move forward and we happen to know about AB 939 and certainly the goals that they have, the first phase would not be sufficient, in our opinion, to divert enough material to reach the goals. The next step is actually a MRFing step. At that point we could, sometime in the future, depending on the rates that are being charged at the MRF facilities in the vicinity and then we would have to discuss what those rates would be in terms of.... TAYLOR: Then we would have to discuss it. So it is open-ended. KRESS: Right. May I just interject here. I'm reading from Page 7. of the amendments which deals with this issue. It says, "An implementation plan and initial rate schedule for commercial accounts with Materials Recovery Service shall be subject to the City Council's review and approval". When we drafted this, not knowing what the numbers are, but requiring them to come before the Council for review of that formula and initial rate instruction. TAYLOR: OK. Let's go back to Page 2., regarding what Mr. Kress just read. Of more importance, this section also includes language stating that..."Upon commencement of the Material Recovery Facility operations, a separate formula shall be set forth which takes into account the disproportionate disposal costs associated with commercial Material Recovery Facility serviced account". In essence, this clause is an "agreement to agree" and that in parenthesis or quotation marks. In essence this clause is an "agreement to agree" at a later date. So even though it's going to come back to us with approval and such, I question how much we can say no to it. Continuing this, "As indicated in the attached proposal, CDS is planning to utilize a MRF in order to undertake a viable commercial recycling effort". Again, it states "commercial recycling effort and meet the diversion requirements of AB 939". This "agreement to agree" at a later date, this contract is on a one-year renewal, automatically CC 6-25-96 Page #7 • giving them a five-year renewal every time we give it one year. But this "agreement to agree", I'll come back to that later. Going down to item No. 3, Refuse Containers... "in its proposal, CDS seeks to implement an automated collection program by December 1, 1996. In so doing, they would distribute a single 100 gallon container to be used in the program to each household in the City. Should a resident require additional containers, they would be charged $1.50 each month for each additional container. There would no cost, of course, for a replacement container. As proposed, no additional containers of refuse would be collected by COS once the program is underway". What happens to the greenwaste as far as the bags and boxes that are put out. TRIPEPI: They will service those. TAYLOR: OK. "That, of course, does not include greenwaste and recyclable materials currently collected at curbside. Please note that CDS included in its proposal a brochure for the 100 gallon containers to be used in the automated collection program". MAYOR PRO TEM JAY IMPERIAL: Madam Mayor. My turn now. Let me say this. My memory is not so short that it wasn't so long ago that we sat here with nine people, all waiting to knife each other, I think, to get this contract. The best contractor that came up was this gentleman that is sitting right here. From the time that we've had him, and I wouldn't want to go back to that nine thing again because one or two decided they wanted to sue us because they didn't get the contract. The time that we've had his contract here, this man has been nothing but honest. He went overboard to do his job in this City and I think, myself, that we can stand here and pick on this all day long. People do that with the Constitution. I think we've gotten good service, I think this is an excellent contract, and I think it deserves some kind of a vote. TAYLOR: All right. I'd like to continue. Going over to page 2, collection costs... page 2 KRESS: You are now on page two of the Amendment. CLARK: Gary, what was your problem with the containers? TAYLOR: I'll get to that. Now we're into the agreement, that was the summary of what happens. Now I want a clarification, it says ..."if the containers leak or are damaged, that the homeowner will buy them", I want that clarified, what it means. O.k., I'll go on through with it. Going to page 2 of the Franchise Agreement. First item - "Collection Costs. The Collection Cost component consists of the contractors cost for the collection and hauling of the waste". OK, "Collection Cost Rate Freeze. Contractor agrees that there will be no increase in the collection cost component for residential customers effective prior to August 1, 1997." What happens to all the residential, excuse me, the commercial customers? What happens to all of our businesses in the community? BRUESCH: Could I make a comment on that? Looking again at...what has happened after 939 except for your large very large corporations. Which only represent probably 40% of the output. There hasn't been a lot of compliance with 939 mandates by smaller corporations. Consolidated, has said, right now up to a point that they have done a very good job of educating small commercial accounts and getting them to identify those things that can be recycled. The problem is this that the consumer homeowner as a whole is actually, over the last couple of years, if I'm not mistaken, subsidizing,in part, small commercial accounts because they are not recycling. What I see is a chance for commercial accounts to begin thinking of it as a cost factor which it should be. It should be a cost of doing business. Your homeowners are expected to look at their trash and separate it and take care not to put recycables into the garbage, and it is only fair to say, "Look, if you are a commercial account and after all this education you still are not cutting down the waste stream by recycling, it is going to cost you." And, I don't see anything wrong with doing that. TAYLOR: OK. I'd like to ask a question again..."The contractor agrees that there will be no increase in the collection cost component for residential customers effective prior to August 1, 1997". Now, the next sentence..." Except for the rate freeze on the collection cost component for residential customers,". Again, there's a magic word missing here, commercial or business...."the following rate adjustment formula shall apply: Contractor shall be entitled CC 6-25-96 Page #8 • to rate adjustments, effective on the anniversary date of the franchise (August 1) based upon the following formula..." What happens to the businesses on August 1st? Where is it in here? TELESIO: Actually, as you've spoken, it brings to mind ...I'd like to address a couple of the items, not the least of which, and it's the easiest one that we can dispense with what appears to be some confusion about whether or not the automated containers will limit the disposal of the green waste, it doesn't. Now, in fact, that was a good observation, and a point well made. For instance on page 2 of the staff report where it says, "That of course, does not include greenwaste and recyclable materials currently collected at curbside". What that is saying that the restriction of just one large can is more than enough, is ample, but does not restrict the greenwaste. So, that's what I think that means. TAYLOR: OK. That's clarified on the greenwaste at this time. TELESIO: But, I think what's important and I think is a very noteworthy concern is the "agreement to agree" situation. And it also relates to your concern about the potential of cost increases to the commercial rate payer. I think if I give you the background on this situation, that also can be something that can be dispelled. It might appear that it's open-ended, but in fact, it's not. All it's meant to do is allow us an opportunity to remain whole. And, let me back up and explain what that means. When we approached our...this proposal we, and it's almost a joint realization between ourselves and with the City. What you will need in order to comply with AB 939 is the MRF services. The issue became what would the specific cost of MRF services be. That's hard to predict because that is influenced by commodities markets and all these other things. We can give you a basic range of what we think the tipping fees would be. Right now, for instance if we were to immediately start MRFing, probably it would be in the range of $35 to $45 per ton. Anywhere in that range. And, that will contrast tremendously with the much lower disposal fee that we experienced with the Puente Hills Landfill at $18 or so. BRUESCH: Point of information. Is it not true that those rates have not gone up for the last few years?. TELESIO: The disposal fees for the landfill? I think it's been three years. Therefore, the concern was if we attempt to establish a formula now, we either potentially harm ourselves or you could potentially be exposed. In other words, you can't predict an accurate rate. So all this "Agreement to Agree" is basically... specifically what it is regarding is that cost items are currently unknown. And more specifically what that means when we find out what that MRF fee will be and there is going to be a whole exercise by which we determine, the best MRF to the lowest cost. We're going to do that along with the City. Remember, you approve the final decision. You are the final decider. Once we've done that to your satisfaction, unless we know that specific MRF number will be when we plug it into the overall rate. An also specific concern that I was talking about, was this percentage thing that seems confusing to the disproportionate cost factor you were talking about. I can elaborate on that for just a moment. I'll give you a real simple example. Let's assume that we have a rate of $100 a month to take away a bin from a hypothetical business. Let's assume that about 25% or $25 of that $100 is in the tipping of the weight scales, the other $75 is for collection cost. For all intents and purposes, we're not going to see a huge change in that collection cost. It might go up a small percentage, but, let's even go as far as to say that it's going to be a static number, stay at $75. But let's say then that we begin taking the waste to a MRF and rather than $25 extra, it that shoots up to $75, you no longer have the 25-75 percentage distribution, that's not anymore. It's now 50/50. And, that what we're referring to when we say that we need to establish at a future time what this formula will be. The only thing we are leaving undefined at this moment is what the exact percentage will be because either it will unnecessarily expose you or unnecessarily expose us. All we're seeking is a dollar for dollar. It's not a marked up item. We're just going to stop taking it to the landfill and begin taking it to a MRF. The only thing at that point we seek is the ability to reimburse and this would give us that flexibility. But, again, what's important, you're the ultimate decider. You say your formula doesn't work, it has not been negotiated properly, we renegotiate, we'll do it to your satisfaction. CC 6-25-96 Page #9 • ! BRUESCH: Madam Mayor. Two quick question about this. Number one, when MRF kicks in will there be a need for curbside recycling? E. VASQUEZ: Most likely BRUESCH: Most likely. So that will continue. O.K. And the other question is in terms of what I said about cost of business. If a commercial business were to establish a very effective recycling program in that they cut down their bin use by half, would there be a way to reward them, or is everybody going to get it whether they do it or not? E. VASQUEZ: What we've got in other cities that they're offered the same service, and if a business is able to subscribe at a reduced rate of their existing trash bill. If they produced a lot of trash and they can cut down a number of bins because they are now putting in recycling bins. Those are very reduced rates and the MRFing cost would not apply to them. They may be at no rate if there is enough material coming out of that bin. Whatever is left, say they have 5, bins and were able to cut it down to 3, those 3 would be charged for MRFing, the other would be on a different schedule of reduced rates. BRUESCH: What about small commercials that only have one bin and they find that their trash being put out is half of what it was, would there be a chance that they could get every other week, or every other day pick up or whatever. Could they negotiate with you in good faith since we followed the adaptation. We did what you asked us to do - is there a way to cut cost in my business? We either negotiate a new deal or E. VASQUEZ: Today, we physically do that. We drive from one day to six days. They have four days and cut down to one day, we have to do once a week because that is required by our contract. As for less than once a week, we have not been able to do that. BRUESCH: In other words, they can cut their waste generation in half you would then ...they would get less service and probably cost them less. E. VASQUEZ: That is very possible. I can't say that universally across the board for every person rendered service, but that is possible sometimes. BRUESCH: See, what I'm trying to get at is I think that in this day and age, commercial enterprises have to begin to think of waste budget as a cost of business. And being that it is really a cost of business, I think that it would be apropos to give them a way to cut that cost of business if they do what they say they're going to do. TELESIO: If I may. This isn't meant to be a doomsday report, please. To a large extent, our experience in other cities, in fact, has many times been in effect during the ramp up, the educational program we give that opportunity. In so many cases we have such a meager turnout, we have such small participation. I tend to think it's only because, in many cases, recycling doesn't justify its own cost. Actually, it's more of an effort, it doesn't generate anymore. So the conscientious small business person, there's not an economic incentive. BRUESCH: The knife isn't at the throat. TELESIO: That's a good point. There is an entire garbage disposal with MRFing. In some cases that's enough motivation for companies to make an effort to do more recycling. In that scenario you're absolutely right. Most likely what they're going to do, they are assertive enough to begin recycling on their own. It would result in less disposal requirements, that would be MRFing. TRIPEPI: I think what Mr. Bruesch is looking for is a positive response. What you're telling me is if a business in town now that has 3 1 /2 yard bins and they get picked up 4 times a week, they call you and say "Hey look, I'm putting out less trash now. I want it picked up twice a week." Nobody at Consolidated is going to tell them you can't do that, you have to stay on 4 days a week. BRUESCH: The point is that we get a cost of less that 2 pickups. In other words that is a selling point for recycling. CC 6-25-96 Page #10 TRIPEPI: If we could, Mr. Taylor, you already brought this item up. I'd like to go to Section 8 of the contract. That is a mistake in the contract, page 6..., the actual Agreement which is proposed to be executed by the Mayor. That needs to be changed because that is a carry over from where customers provided their own trash bins, there will be no charge ...the tag time, there will be no charge to the resident of replacement of the 100 gallon container. I just found that at a closer review. TAYLOR: Where are you reading, Frank? TRIPEPI: I'm reading on Section 8. "Any refuse container which will no longer hold refuse without spilling, which leaks or is not water tight shall be replaced by the person from whom refuse is collected". That is a carry over from the existing contract where they provide their own trash barrels. TAYLOR: Then what is it doing in here, when... TRIPEPI: What we're going to say is any refuse container which no longer holds refuse without spilling which leaks or is not water tight shall be replaced by the Contractor upon notification of the customer within ten days. That takes care of it. No charge to the customer. TAYLOR: The way I read this, once this system TRIPEPI: Mr. Taylor, you are absolutely right, it does read correct as it is typed. It is a mistake, I want to replace Section 8, in answer to your question, by recommending replacement line in Section 8. It shall now read "Any refuse container which will no longer hold refuse without spilling, which leaks or is not water tight shall be replaced by the contractor upon notification by the person from whom the refuse is collected, within ten (10) days of the contractor being notified". That will be that new section. Please, if you will. CLARK: At the expense of the contractor. TRIPEPI: At no expense to the customer. KRESS: That's right. TAYLOR: All right... I've got it marked here someplace, that after this systems begins, no other containers will be picked up except the automated containers. Where is that Section at? I know it's here... boxes, plastic bags, nothing else will be permitted. So what good does it do to have other refuse containers that will not be picked up because they can't be handled in the automated system. Is that correct? KRESS: I understand the confusion. The reason I left that in is because the automated system is going to be phased in. It's not going to start tomorrow. TAYLOR: But once it is phased in, no other containers will be picked up. Is that correct? KRESS: Absolutely correct. CLARK: How does recycling bins and green waste... KRESS: The recycle bins, the green waste. All the containers at that point will be contractor provided and maintained and replaced. : That's correct. TRIPEPI: At no cost to the customer. BRUESCH: Madam Mayor. That doesn't change the 4 days a year of bulk items that can be left out. TAYLOR: No, that's still in here CC 6-25-96 Page #11 , BRUESCH: In other words, what Councilman Taylor asked is large odd-shaped items, is this going to have to wait for 4 days a year? TRIPEPI: Four times a year. TAYLOR: Right, they still have to do that, Bob. Here's the part, it's got an asterisk on mine, page 5..."Once the automated program is fully implemented, customers must place all refuse in the automated container(s) provided. No trash bags, cardboard boxes, loose debris or waste placed in other non-automated containers will be collected with the exception of appropriately sorted and tagged green waste and disposal items on designated quarterly 'bulky item' Citywide collection days". So as far as in other non-automated containers... that was the reason for Section 8 where any refuse containers, that's cleared up. TRIPEPI: Under the old contract. TAYLOR: OK. Then on page 2 of the summary..."In its proposal, CDS seeks to implement an automated collection (program by December 1, 1996". So in six months, this program is to be implemented. I would agree that you take all the containers out there and "bingo" it's ready to go. OK, than as of that date, all containers, Section 8 clause is gone. TRIPEPI: Gary, I think there is still confusion. Maybe I didn't explain that right. The reason Section 8 is a carry over from the old...from the existing contract, which doesn't provide 100 gallon barrels, was left in there by mistake. Those 100 gallon containers are going to be replaced by the contractor at his expense. That's all it related to. You're absolutely right, once there is automated pickups throughout the City, everybody must put all their trash in the 100 gallon containers, whether they use 1, 2 or 3 of them. That's what they will be collecting. TAYLOR: We talked about the statement here that's in the actual agreement... "The Recovery Facility"... page 3, top paragraph... "The Recovery Facility operations, a separate formula shall be set forth which takes into account the disproportionate disposal costs associated with commercial Materials Recovery Facility serviced accounts". Now go back to page 7, here's the word again. Now it's not just disproportionatly, it saying "substantial additional disposal costs". "The Commercial recycling program. The Contractor shall undertake the program described in its Waste Services Franchise Renewal Proposal. Prior to the implementation of Phase II - Material Recovery Facility, the Contractor and City shall negotiate a rate to be paid by commercial accounts"... and this is the "Agreement to Agree". OK, we agree on that, the "Agreement to Agree" has to be implemented somewhere. And it states that this MRF is where it comes into play. Continuing here, I'll read the whole sentence again..."Prior to implementation of Phase II - Materials Recovery Facility, the Contractor and the City shall negotiate a rate to be paid by commercial accounts that will reimburse the Contractor for the substantial additional disposal costs associated with the Materials Recovery Facility. An implementation plan and initial rate schedule for commercial accounts with Materials Recovery Facility service shall be subject to the City Council's review and approval. Upon adoption of the initial rate schedule, a separate rate adjustment formula shall be set forth which taken into account the disproportionate disposal costs associated with commercial Materials Recovery Facility". We know it's coming. If you got in some other cities, how are we going to let these businessmen know that they will get substantial additional costs? I see it coming, and it's in here. TELESIO: There will be an educational program. TAYLOR: Yes, but we're locked into a contract and they're locked into a contract. TELESIO: No sir, you see I don't want there to be any misgivings. It's only our intention to provide the services you need. And, I'm only intending to do it to the extent required economically speaking, to the extent required that we will be reimbursed. TAYLOR: I don't disagree with that. But, let's tell them up front what the cost is before we give you, basically, a five-year extension. CC 6-25-96 Page #12 • 1 • BRUESCH: Madam Mayor. That is exactly what I suggested you do in your educational material. Gary, what I'm trying to get across is now it has to be considered and factored in as a cost of doing business, not just set cost thing. It going to be a cost to businesses for the amount of waste you generate. I think part of the plan, the greatest part of your educational program is going to be emphasizing to the businessmen and small commercial, "Hey, if you're going to be generating x amount of waste, it's going to cost you an X amount of dollars. We're not sure exactly how much it is, but the less amount of waste you generate, the lower your rates are going to be. TELESIO: That's the thing of the educational program. The first phase is interactive with the business community. And we do spend time ...we make a distinct effort to assist people to begin recycling for the purpose of avoiding the cost. You see, we have to remember we're all in this together. We're almost, you know, immediately being victimized, if we're shot as the messenger. This is, first of all, mandated, that started with the State of California. They said you need to recycle certain percentages, whether or not it makes economic sense. Whether or not it's going to cost more, you have to do it. Here we all are, stuck in the middle. So, it's just a matter of how effectively we can communicate this reality. That's what we've begun to specialize in, we've got an educational program that is more than just literature, it's interactive, we have our people in the field. We really engaged in people, and to a certain extent, as I said earlier, sometimes we don't have the turnout we'd like to see, but in many cases we do receive a good response, we have people that do recycle and allows them to avoid some of that additional cost which is inevitable. The cost of businesses, the fact of having to take the waste to the MRF. BRUESCH: Madam Mayor. If you're totally aware that your Grant is gone and maybe set up a program in major cities where commercial enterprises that are highly fined, that includes recyclers, high fines and large numbers of dollars. IMPERIAL: Madam Mayor. I think we've beaten this thing to death. There is no doubt in my mind as to the integrity of this man. We've dealt with him right now. I have to go back and think about what we had 22 years of in this City, and I wonder if we've forgotten when we're well off. I look at this contract, I don't see anything. Maybe I'm...what I'm seeing in reality is we've dealt with the man here, it shows a good image. He's been honest with us, he's tried to work with us right along. I have no doubt in my mind that if something comes up, he would work it out. COUNCILMAN VASQUEZ: Madam Mayor. I have one question, but before I ask my question I'd just like to make a comment that Gary has some good questions and I think he deserves some answers. A lot of answers given to Gary were questions that I had. My question is in past experience with other cities, when you implement this plan, I was thinking every year after Christmas, what happens, that's when everyone brings out more than enough trash to fill 100 gallons. What do you do? They will complain to the Council that they didn't pick up all my trash. What happens during that time. TELESIO: We've demonstrated an extreme flexibility in fact, not that I would want this to occur here necessarily, but we've even extended . During the transition period when customers are converting from their existing cans ...the capacity they have now is 2 or 3 small cans, will be exceeded by the large ones, the capacity is larger. But let say the idea of conversion, they're used to de-containerizing, they put out in bags. Sometimes we establish a transition period of 3 to 6 months, during which we pick up everything. Remember now that's detrimental to the whole motivation of this program. This creates a uniform appearance in your neighborhood. I promise you this, I'm standing in front of you making a promise. Once this program is in place for about 6 months to a year, you'll not even fathom that those containers would ever disappear. You won't even be able to remember what the community looked like without all those containers. It's beautiful. It's nice and uniform, it's clean, you don't see bags strewn all over the curbs. It will be a nice appearance. You'll begin to not only welcome it, you'll appreciate it, you won't want it to ever leave. That's the experience that we've had. What happens during this time? We're very flexible. We work with people. We've extended these transition periods for years. People say I can't get used to it and we have to keep doing this. We've worked with our Councils, like Hawaiian Gardens, we've a transition period in place for a year. CC 6-25-96 Page #13 • E J. VASQUEZ: I know, every year after Christmas, the lawns are just... TELESIO: Trust me. It's important for us and the citizenry as well to be pleased, we work as a team. E. VASQUEZ: I would like to speak about that because we've had it happen in other cities. What we find is that the initial time, people get used to it. They become comfortable with it. People will then decide if they can handle the one container or if they want a second container. Very few people will need a second container. Most people want it for the convenience and they order it strictly for the convenience. They only use it three times a year, they just want to have it. So, most people's needs will be met. Also, because you have the recycling program, people will actually be motivated to put more into their recycling cans and green waste cans to leave more for their waste. Your recycling will probably go up. Makes people more aware and conscientious that it's a whole nice integrated management program, whereas the more they put in the blue bin and the green bin, the more space in my trash and after a while people find a little niche how much to put out where and if they get a second container, they will order one. You don't use it every week, they use it whenever they need it. We haven't had a problem. J. VASQUEZ: Thank you, Enrique. BRUESCH: I agree with Councilman Taylor and Mayor Pro Tem Imperial. We've discussed this. What this is leading up to is the fact we have no place to be putting our trash. Right now you can see the sanitary landfill's capacity at anywhere from 7 years to 20 years or 21 years. This is what they are telling us, but all that can change tomorrow. That all could change with a single lawsuit being adjudicated in court. And then all of a sudden, we're down to 4 years or 3 years or 2 years and what we have to do is look at the amounts that we are putting in and basically cut it in half. That's what 939 says and we cut it to the bone. CLARK: I just want to say something. I think it is very important for the audience and residents to understand that this is a mandate from the State. We did not ask for it, we fought it, but it is there and by the year 2000 we have to cut our garbage, our refuse by 50% and we will get penalties if we don't, and the penalties are going to be far more than we are going to be paying or discussing tonight. The other thing that is important to remember, I agree with Mr. Telesio that the other communities where I have seen these cans, they're orderly. Sometimes I go around on trash days and it's terrible, people put bags out there, they don't even use their cans. I think in the long run, it's going to benefit us a lot, and also the contractor has agreed that if we don't meet the requirements he will pay 90% of it, and that's a very nice thing to have because we don't want that to hit us. TAYLOR: Madam Mayor. You mentioned the bags that are put out. I saw probably 10 or 12 bags at a particular house today with grass trimmings, leaves and raking up. How are those going to be put out in the future where they will be picked up. CLARK: In the blue container, we're still going to have the blue green waste container. TAYLOR: No, the green waste where it's... CLARK: It's blue, a blue can for green waste. My can is blue, my dark blue is the recyclable. Are you going to change the color? VOICE: No, you are right. TAYLOR: I saw 10 to 15 bags today that were not in the blue container. CLARK: Did they have some in the blue container? TAYLOR: I just noticed the bags that were out with leaves and grass in them. CC 6-25-96 Page #14 E. VASQUEZ: If they're put out with the green waste container, those are picked up in a different truck. They will be picked up as green waste. TAYLOR: So all of that is picked up E. VASQUEZ: What is meant by the other materials put out as trash is an automated truck, there won't be a trash truck other than the automated truck in the City. They must use the automated containers. There will be a green waste truck to pick up the green waste the way it still is today and put out with the green waste. CLARK: I have a question. Will there be any further separation of recyclables, such as card board and light paper. Are you going to, with the MRF, when the MRF comes in are you going to have people do anymore separation than we do now? E. VASQUEZ: No, we're going to have cardboard as an additional item. The residents can add cardboard and the MRFing won't affect anything. There is nothing that anybody else has to do. We're going to add cardboard, again, if they take advantage of the containers that we have to encourage more recycling. And, the cardboard could be making sure all the green waste is in the green waste container and they can add additional materials to that as long as it is with the green waste, and it is green waste. IMPERIAL: I've got a Motion on the floor, and I'm almost ready to forget what it is. TAYLOR: Madam Mayor. You didn't get a second, but there's two more items - 9 and 10. They shouldn't even be in here as Mr. Rauth mentioned a while ago, they won't apply. As an example, number 10, "Residents electing to use large capacity container..." They're not going to elect anything, we're going to do it. This is mandatory. Once it starts, you use the containers, period. I have no objection, but the contract... KRESS: Large capacity containers refers to bins, if you read the first line of number 9. TAYLOR: OK. "The Contractor shall provide large capacity containers (bins)...", I put up here not the automated plastic, ok. KRESS: This is from the existing contract TAYLOR: That's correct. If they chose to have the large capacity bins, this clarifies it..."for mechanical loading wherever customers so request their use, and the use thereof shall be in accordance with the rates established herein. Each container provided shall have the Contractor's name, or company name, placed and maintained on one or more locations on the outside in letters not less than three (3) inches in height. The Contractor shall regularly inspect all large capacity containers, repair or replace any damaged containers and maintain an inventory. All such containers shall be maintained by Contractor so as not to leak". This is the large bin, not the automated. That's understood. CLARK: This is commercial bins, what is the problem? TAYLOR: Go to the next one, number 10... "Residents not commercial businesses electing to use large capacity containers for mechanical loading shall use such containers exclusively..." KRESS: What that means is multi-families collection points - on bin service. TAYLOR: Multiple residents? TRIPEPI: Multiple dwelling... instead of using the barrels, buy a bin. TAYLOR: This is multiple residents. OK. The biggest loophole that remains is what is the cost that is going to be charged, and incidentally, I've worked for private contractors and businesses all my life, I know the ones that salvaged the steel, they salvage the aluminum, they salvage the brass from the different companies. The market salvages the cardboard, they know what recycling is. They're in the business of making money off of whatever they CC 6-25-96 Page #15 • • I can resell. They do know. But, there's a hidden trap in here and the businessmen are going to let us know. I don't doubt that at all. TELESIO: There's not a hidden trap in here. TAYLOR: There's going to be substantial added costs that's written right in the agreement. TELESIO: That's a . There's not a hidden trap. TAYLOR: Well, indirectly, obscure stumbling block. When those costs come in, we'll see how they do. And, Madam Mayor, I'd like this conversation in the Minutes verbatim with the promises and guarantees that we got. BRUESCH: Madam Mayor. At this time I'd like to second the Motion Mayor Pro Tern Imperial's and call for the question. JUAN NUNEZ: I had a question. CLARK: Juan had a request to speak. Please make it brief. JUAN NUNEZ: I don't know whether I'll make it brief. You have opened up a lot of questions, that I heard so much more discussed. I was going to ask about the rates and I spoke to the representative of Consolidated. They said that the rates for residential rates are not going to be raised. According to what Gary was reading, you have this information, I don't have anything and I don't know anybody in the audience that has this information. IMPERIAL: So, what is your point? TRIPEPI: In all fairness to everybody, you come into City Hall every day, all week long, all you have to do is ask for it when you're here. NUNEZ: Yes, I know TRIPEPI: But you did not. You wanted to ask tonight, so you got that. You and Gary, that's what the bottom line is. NUNEZ: We don't have this information to read on it. As Gary is saying that the rates will be going up in August '97. TAYLOR: Residential, that's the way I read it. But, commercial can go up August 1st this year, the way I read it. NUNEZ: OK. Another thing is that on the five-year contract, you're going to be locked in like you were or the other Councils were locked into 30 to 35 year with Modern. TAYLOR: Every year they get a renewal for five-years, perpetually. NUNEZ: One year is another five years. Two years is another year and they have 7 years, if they have 3 years, they another 7 or 8 years. It's going to be locked in like Modern was for 30 to 35 years. IMPERIAL: I take offense to the fact that you're equating this contract with that we had with Modern. If sugar is sweet, that was a sweetheart, that contract. Neither I nor Gary or anybody else had anything to do with that contract, we inherited it. We've learned a lot from it, ok. NUNEZ: As Council, you can protest as much as you want. But, it seems to me that you're going to be locked into something like that. CC 6-25-96 Page #16 IMPERIAL: You know something, I have no fears. I have no fears, ok. I'll take that much of the man's integrity that he's worked with us right along. I don't see any change now. You have to know the man before you can get up here and say that. As far as I'm concerned he's been fair, he's going to take real good care of you. NUNEZ: I hope that continues. I'm just saying that... TAYLOR: Madam Mayor. We're not talking individuals, we're talking written contract agreements here. It doesn't matter who is on one side or the other, it's the language in this contract that I'm questioning. No impugning or reference made on any individual at all. I want that clearly understood. IMPERIAL: I clearly understand that, Mr. Taylor. I'm looking at this thing and knowing that if we've got a problem, this man will work with us on it. I couldn't say that with the last contractor. I clearly understand that. J. VASQUEZ: Madam Mayor. Call for the question. CLARK: Question has been called for. We have a Motion and a Second to approve the contract - please vote. VERBATIM DIALOGUE ENDS Vote taken my voting slip: Yes: Vasquez, Clark Bruesch, Imperial No: Taylor Absent: None Abstain: None VI. STATUS REPORTS - None VII. MATTERS FROM OFFICIALS A. MAYOR CLARK Reported that at the National League of Cities Energy and Natural Resources Committee meeting in Omaha, they visited the Strategic Command Post (formerly Strategic Air Command). Ms. Clark stated that she was impressed with the protection measures in place, especially those that will protect the White House from enemy missile attack. Ms. Clark asked the people at the Strategic Command Post if they were concerned that mainland China had aimed a missile at Los Angeles during the Taiwan elections - did they take that seriously and are we protected? Ms. Clark stated that their response was Yes, they took it seriously and that No., we are not protected. Ms. Clark commented that people are unaware about how unprotected we are, and that the administration doesn't seem to care. Ms. Clark urged that our Congressman and President be contacted to rectify this situation. B. COUNCILMAN BRUESCH Requested that this meeting be adjourned in memory of Jim Smith's mother. C. FRANK TRIPEPI, CITY MANAGER Announced that Sgt. Wallace is still recuperating and will return in September and that Sgt. Kaylor will be filling in for him. CC 6-25-96 Page #17 VIII. ORAL COMMUNICATIONS FROM THE AUDIENCE - None IX. ADJOURNMENT There being no further action to be taken at this time, the meeting was adjourned in at 9:25 p.m. in memory of Jim Smith's mother. The next regular meeting will be held on July 9, 1996, at 8:00 p.m. Respectfully submitted: APPROVED: City Clerk Y CC 6-25-96 Page 1118