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CC - Item 4D - Request from Consolidated Disposal Services Inc. for Annual Adjustment of Residential and Commercial Refuse Rates ESM s t a f %Ai teport TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL FROM: FRANK G. TRIPEPI, CITY MANAGER �1 ' DATE: SEPTEMBER 16, 1997 �d RE: REQUEST FROM CONSOLIDATED DISPOSAL SERVICES, INC. FOR ANNUAL ADJUSTMENT OF RESIDENTIAL AND COMMERCIAL REFUSE RATES Attached is a letter from Consolidated Disposal Services, Inc. (CDS) requesting an increase in residential and commercial refuse rates. The request is in accordance with the Second Amendment to the City's franchise agreement with CDS, as approved by the City Council in June 1996. The Agreement specifies that the contractor is entitled to an annual rate adjustment pursuant to the formula stated in the Second Amendment (attached). The increase requested by the contractor is based on the rate-of-change indicated in the June 1997 Consumer Price Index (CPI) report (70%) and the annual adjustment of landfill tipping fees established for County landfills by the Sanitation Districts of Los Angeles County(30%). The rate-of-change according to the June 1997 CPI report is 1.7% for the Los Angeles-Anaheim-Riverside area. The basic waste disposal rate established by the County Sanitation Districts for the Puente Ells Landfill remains the same. Therefore,the formula for an increase in the residential and commercial refuse rates is as follows: CPI .70 x 1.7% 1.19% + Tipping Fees .30 x 0% 0 Rate Adjustment 1.19% Current Rate $8.75 x % of Rate Adjustment 1 19% Amount of Increase .104 COUNCIL. AGENDA Current Rate $8.75 SEP 2 31997 +Amount of Increase for 95/96 $ 10 1995/96 Residential Refuse Rate $8.85 ITEM No. I 1997 CDS Rate Adjustment September 16, 1997 Page 2. It should be noted that these rates do not include the $.76 per month residential refuse surcharge that went into effect in April 1993 to help defray the litigation costs associated with the Transportation Leasing lawsuit. The actual cost to residents,including that fee would be $ 9.61 per month. The net increase on residential refuse bill would be $.10 per month per household. The rates for commercial refuse collection services and other services specified in the Franchise Agreement are detailed in"Attachment A" Attached also is a copy of the June 1997 CPI report and a copy of the Second Amendment to the City's franchise agreement with CDS. RECOMMENDATION. It is recommended that the City Council approve the request by Consolidated Disposal Services, Inc. for a 1.19%adjustment in residential, commercial and industrial refuse rates effective September 1, 1997. Attachments nnemo.odsns97.fg SEP-17-1997 15:37 P.02 I Attachment A Page: 1 City of Rosemead Rate Adjustment Request 1997-1998 Residential Rates: lY ° sAg yat " o6eaaa 14 . S 3- f..riper eAf so o y: - o3RTopy i "; � 111:eee .M a° a9T �aWli gin i3MilkYla n, 6Y ft `, Single Family Dwelling - Residential Curbside (one 100 Gal. Cart) $8.75 $8.85 i Multiple-Family Dwelling-Detached Units On A Single Lot: First Unit $8.75 $8.85 Each Additional Unit $7.06 $7.14 1 Multiple Family Units - Attached Units (Apartments And Condominiums) And Mobilhome Parks: First Unit: $8.75 $8.85 Each Additional Unit $5.74 $5.81 ISpecial Qualified Senior Citizen Hardship Rate / For Residential Curbside Service: $5.81 $5.88 Special Qualified Handicapped Citizen / Backyard Collection Rate's ;r for Single Family Residences: $8.75 $8.85 l Additional 100 Gallon Cart $1.50 $1.52 { I Special One-Time Pick-Up Cost For Pick-Up And Disposal Of Appliances, Furniture And Bulky Items $11.15 $11.28 Residential - Special One-Time Drop-Off And Collection Of A 3- ' Cubic Yard Bin l Pick Up / Delivery Charge $44.61 $45.14 Each Dump $12.22 $12.37 ,� Total $56.83 $57.51 Residential - Special One-Time Drop-Off And Collection Of A 10 To 40-Cubic Yard "Roll-Off" Container $160.14 $182.05 Overweight 7 Ton Limit ' $27.88 $29.35 Daily Rental after seven days without a dump $15.00 $15.00 Dead Run $75.00 $75.00 Notes: New rates have been adjusted to reflect a 1.19% increase, except for the overweight charge for residential roll-offs which has been set at $29.35 to conform with the overweight charge for • commercial roll-offs. Also, the daily rental of$15.00 which will apply when a roll-off is not l dumped within seven days and a dead run fee has been added to the schedule. I. l Curbside Recycling and Green Waste Recycling services are included with the above fees. These rates do not include the 5.76 monthly residential and 7% monthly commercial surcharge. Commercial Rates: A -nTRI P PJ SEP-17-1997 14:00 P.03 Attachment A Page: 2 3 Cubic Yard Bins CURRENT RATE NEW RATE 777111 s:� a3a�a� 11 r @ 1f81yp1t ,y,,r ` 4p.1.,a'F?e.a,fF�"t„ „°.. IS fFthtliff. ,.". 1 Day P/U $63.47 $69.82 1 Day P/U $64.23 $70.65 2 Day P/U 96.34 105.96 2 Day P/U 97.49 107.22 3 Day P/U 130.71 143.77 3 Day P/U 132.27 145.48 4 Day P/U 165.32 181.85 4 Day P/U 167.29 184.01 5 Day P/U 204.25 224.68 5 Day P/U 206.68 227.35 6 Day P/U 233.97 257.38 6 Day P/U 236.75 260.44 1 1/2 Cubic Yard Bins 1 yly CURRENT RATE p NEW RATE 3 ykgA353ilty t '.y9 °x +Si+ jyc r r e sd Ap a cil qra „yp�0'O.Ti?. i 1 Day P/U $42.71 $46.98 1 Day P/U $43.22 $47.54 4qq yy 4yA a@o � x zVP 9 �uP t Fd'r 1 0ye i S 'o x Li $: w OL y.. WpyqyN � .0 .qitit{Y �ry� 4Pt Commercial- One-Time Drop-Off And Collection Of A 3-Cubic Yard Bin Pick Up / Delivery Charge $56.23 $56.90 Each Dump $21.04 $21.29 Total $77.27 $78.19 Commercial - Special One-Time Drop-Off And Collection Of A 10 To 40-Cubic Yard "Roll-Off" Container $248.37 $251.33 Overweight 7 Ton Limit $29.00 $29.35 Daily Rental after seven day without a dump $15.00 $15.00 Dead Run $75.00 $75.00 11 Commercial - Special One-Time Drop-Off And Collection Of A 30- Cubic Yard Compactor Container $329.00 $332.92 Overweight 9 Ton Limit $29.00 $29.35 Daily Rental after seven days without a dump $15.00 $15.00 Dead Run $75.00 $75.00 Commercial - Special Barrel Service for Qualified Commercial, Limited Use Customers. Max 2-35 gallon cans 1 time per week. 43.22 43.73 TOTAL P.03 SEP-10-1997 10:41 P.02 Of RECYCLE TODAY: CONSOLIDATED DI POSAL SERVICE, INC. September 9, 1997 Mr. Frank Tripepi City Manager • City of Rosemead 8838 East Valley Boulevard 11`li Rosemead, CA 91770 Re: Application for Adjustment of Waste Collections and Disposal Rates - Service Year 1997/1998 Dear Mr.Tripepi: In a letter to you dated May 20, 1997 we requested a rate adjustment based upon a CPI adjustment for collection costs and an adjustment for charges in disposal costs. At the time of our request, the availability of Puente Hills Landfill was diminishing, and therefore, Consolidated was forced to seek other more costly disposal alternatives in order to meet the need of the City of Rosemead. At this time, we have seen a significant improvement in the ability of the Puente Hills Landfill to accept our tonnage on a daily basis. Although it is impossible to predict whether this improved disposal situation is sustainable in the future, we nevertheless believe it is appropriate at this time to withdraw our request for the disposal portion of our application for adjustment and respectfully request your favorable consideration of the collection costs (CPI) portion of 1.2%. Thank you for the opportunity to serve the City of Rosemead. If you have any questions please do not hesitate to contact me, or Mr. Tom Vogt of Taormina Industries, Consolidated's sister company since its merger with Republic Industries. Tom may be reached directly at (714) 238-3315. Sincerely, —" ppxis . //iCl dbhn A. Telesio �/ "J . Executive Vice President • ( cc: Torn Vogt, President-CEO - Taormina Industries, Inc. Brad Berrett, Controller - Consolidated Disposal Service, Inc. • • PRINTED ON RECYCLED PAPER W 129 + TELEGRAPR ROAD f5 SANTA FE SPRINGS. CA. 90670 (:)-, (310)946-6441 '< FAR(310)906-0251 !!! TOTAL P.22 This card is ailable on the World Wide Web on the day of publication at: http://www.bls.gov/ro9home.htm Click on Regional News Releases then CPI Pacific Cities Card. This card is ailable On our fax on demand service. To obtain a copy, call 415-975-4567. When asked for a document number, enter 9100 or 9106 ******************************************************************************** CONSUMER PRICE INDEXES PACIFIC CITIES AND U.S.CITY AVERAGE ALL ITEMS INDEXES (19E2-84=100 unless otherwise noted) JUNE 1997 ALL URBAN c URBA1 C WAGE EARNERS AND WORKERS CONSUMERS CHANCE PERCENT CHANGE Year 1 Month Year 1 Month INDEXES ending ending INDEXES ending ending MONTHLY DATA JUNE MAY JUNE may JUNE JUNE aims lay JUNE JDNE 1996 1997 1997 1997 1997 1997 1996 1997 1997 1997 1997 1997 0. S. City Average 156.7 160.1 160.3 2.2 2.3 0,1 154.1 157.2 157.4 2.1 2.1 0.1 (1967.100) 469.5 479.6 480.2 459.1 468.3 468.8 Los Angeles-Anaheim-Riverside156.7 159.5 159.4 1.3 1.7 -0,1 151.5 154.D 153.8 1.1 (1967400) 462.9 471.3 471.0 447.7 455.1 454.5 Sen Francisco-Oakland-San Jose 155.2 159.8 160.0 3 0 ] 1 0.1 152.9 156,8 157.0 2.5 2.7 0.1 (1967.100) 477.1 491,2 491.9 - - - 465.7 477.3 470.1 - - - west 157.5 261.1 161.0 2.2 2.2 -0.1 154.5 157.8 _157.5 2.0 1.9 -0.2 (Dec. 1977 - 100) 254.5 260.5 260.2 248.6 253.8 253.5 West - A 157.3 161.1 161.1 2.2 2 4 D 0 152.9 156.1 156.0 (Dec. 1977 = 100) 256.5 262.7 262.6 - 247.5 252.7 252,6 West 162.4 166.5 166.0 2.5 2.2 -0.3 159.2 163.2 162.7 (Dec. 1977 = 100) 251.9 258.2 257.5 - - - 245.6 251.7 250.9 - - - Sire classes, A • 1,250,000 and over, E . Not available for West, C - 50.000 to 330,000, D . Not available for Wiest. Release date July 16, 1997. Next release date August 14, 1997. For more information call 1115) 975-4350. CPI 24 hour hotline numbers for the pacific cities are as follows. Anchorage (907) 271-2770 geles (310) 235-4884 an Diego (619) 557-6538 Seattle 1206) 553-0645 Honolulu 16051 541-2808 Portland 1503) 91-2045 San Francisco (415) 975-4406 Indexes for Son Francisco-Oak-lend-Sata doge will no longer be publi.hed on monthly bthe 5eatrle-Tac as indexes will no longer be published semi-am ually afterr 1997. $epivaing with January 1998 data, bath of these urban areas will be published bi-ncnthly on even months only (rah, April, June, etc.). SECOND AMENDMENT TO EXCLUSIVE REFUSE COLLECTION AND RECYLCING FRANCHISE AGREEMENT This Agreement made and entered into this 25th day of June, 1996 by and between the CITY OR ROSEMEAD, a municipal corporation,hereinafter referred to as"City"and CONSOLIDATED DISPOSAL SERVICE, INC. hereinafter referred to as "Contractor"hereby amends that certain agreement made and entered into effective August 1, 1991 and amended effective January 11, 1994 between the parties,hereinafter referred to as "Agreement". NOW THEREFORE,the City and the Contractor agree as follows: 1. The second paragraph of the Agreement is hereby revised to read as follows: The City and Contractor agree each with the other that Contractor shall have sole right to collect, haul and dispose of all refuse and conduct a comprehensive recycling program in the City of Rosemead for a term commencing August 1, 1996 and expiring July 31, 2001, provided however,that commencing August I, 1997 and every year thereafter, automatic one year extensions shall be applied to said Agreement so that the term of this Agreement shall thereafter remain at a constant five years, subject to the rights of the parties to terminate the Agreement set forth in paragraph P. 2. Paragraph F- Collection Rates and Billing is hereby revised to read as follows: F. COLLECTION RATES AND BILLING 1. The City and Contractor, as part of this Agreement, fix and determine uniform rates that shall be charged by the Contractor for the collection and removal of refuse. The rates thus fixed and determined shall remain in effect for the period prescribed or until changed pursuant to the provisions hereof. The Contractor shall not charge or collect any fees or rates other than the fees or rates thus fixed and determined. 2. The City Council shall,not more frequently than once per year, authorize a rate adjustment by application of the following formula and procedure to then current rates: 1 The total rate paid by customers is comprised of two components: A. Disposal Cost. The disposal cost component consists of tipping fees paid to and established by operators of landfills. The Contractor has no control over the tipping rates established by the County Sanitation District or private landfill operators. B. Collection Cost. The collection cost component consists of the Contractor's costs for the collection and hauling of waste. Collection Cost rate freeze. Contractor agrees that there will be no increase in the collection cost component for residential customers effective prior to August I, 1997. Except for the rate freeze on the collection cost component for residential customers, the following rate adjustment formula shall apply: Contractor shall be entitled to rate adjustments, effective on the anniversary date of the franchise (August 1) based upon the following formula: .70 x increase in Consumer Price Index, A]] items, 1982-84 = 100 (Los Angeles-Anaheim-Riverside) from the base month (commencing June, 1991) to the following year's comparison month (June, 1992, June 1993, etc.) plus .30 x the percentage change in tipping fees to arrive at the percentage adjustment to be applied to all rates herein authorized. Allowable adjustments, based upon tipping fees, shall be based upon the rates as established by the Los Angeles County Sanitation District. Example: FACTOR %CHANGE %OVERALL COSTS TOTALS CPI 4.7% x.70 3.29 DISPOSAL 10.00% x.30 3.00 Adjustment percentage 6.29 City and Contractor agree that the disposal cost component has been increasing as a percentage of the overall costs of waste removal. If the Contractor's disposal costs continue to escalate as a portion of the overall cost, Contractor may apply to the City Council to increase the percentage of rate adjustment, currently 30%, assigned to disposal costs. Upon the commencement of commercial Material 2 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. 3. The Contractor shall not make or grant any preference or advantage to any person, nor subject any person to prejudice or disadvantage with respect to rates, fees, charges, service, facilities, rules, regulations, or any other respect. Contractor is specifically authorized to charge a Senior Citizen Hardship rate and a Handicapped rate for those accounts who meet the following eligibility criteria: A. SENIOR CITIZEN HARDSHIP RATE - Those customers, aged 62 and over, who meet the following income limitations, shall be entitled to the Senior Citizen Hardship Rate as listed in this Agreement: Single Income not to exceed $1,098 per month Family (2 or more) Income not to exceed $2,198 per month Contractor is authorized to require proof of age and an affidavit of eligibility signed by the customer. The "not to exceed" income levels listed above shall be increased to reflect cost of living adjustments on August 1 each year of the franchise. B. HANDICAPPED RATE - Those customers, who meet the eligibility requirements of the Department of Motor Vehicles for issuance of a handicapped parking permit, shall be entitled to backyard service, at the regular residential rate. If the handicapped individual also qualifies for the Senior Citizen Hardship Rate, he or she shall be entitled to backyard service at the Senior Citizen Hardship Rate as listed in this Agreement. 4. Except as otherwise provided herein, Contractor will bill each customer directly for service and will collect from such customer for same. City shall not be responsible for collection or payment for such services. 5. Contractor may not suspend its collection and disposal services hereunder to a customer who has failed to pay a proper billing for services. Contractor shall make all reasonable efforts to diligently pursue and collect all fees and charges due Contractor for rendering such services. In the event of a delinquency, the Contractor shall also notify the owner of the real property of the amount of the 3 delinquency and the possibility of property tax lien collection. Contractor shall provide to City, not more frequently than quarterly, individual letters, postage prepaid, which contain the names of the property owner and occupant (if different from the owner), the address of the owner as shown on the latest updated assessment roll, including the assessor's parcel number and whatever other information is required by the Los Angeles County Tax Collector. Said letters shall state the amount of delinquency, penalties, late charge(s) and collection costs. City shall allow Contractor to use the update assessment roll records available at City Hall. City allows such use as an accommodation only and does not warrant the accuracy of such records. The only responsibility of the City pertaining to notice of and public hearing shall be as follows: The City Manager or his designee shall notify property owners by sending the letter designated in the paragraph next above. Such notice shall further declare that the City Council shall at a regular meeting, review and approve as an assessment against the property the amount delinquent and unpaid, the amount of the penalty and late charge(s), collection costs, including administrative costs incurred. If the total assessment determined and approved by the City Council is not paid within ten (10) days after such determination, then and in that event, there shall be recorded in the Office of the County Recorder a statement of the total balance due together with the legal description of the property affected. From and after the date of such recordation, the balance due shall be a special assessment against the real property. The assessment shall be collected at the same time and in the same manner as are county property taxes and shall be subject to the same penalties and to the same procedure and sale in cases of delinquency as provided for other taxes and assessments appearing on the county property tax bill. All laws applicable to the levy, collection and enforcement of county taxes shall be applicable to such special assessment. Contractor shall be paid the amount actually recovered by the City on an unpaid account less 10% (ten per cent). Said payment to Contractor shall be made within thirty (30) days of the City's receipt of funds. 6. The Contractor shall obtain the written approval of the City Manager as to the billing periods used. 7. Each bill shall contain the name, address, telephone number and office hours of the Contractor, the amount and period being billed, a statement that the Contractor will provide, upon request, a complete list of the rates for the various types of services provided by the contractor, a statement indicating how to file a complaint and how complaints are resolved, as well as the possibilities 4 of recourse available to customers, the holiday schedule, and any other information necessary to assist residents as determined by the City Manager. At least 30 days prior to any rate change, the Contractor shall mail all customers notice of said rate change. 3. Paragraph I- Refuse Containers is hereby amended to read as follows: I. REFUSE CONTAINERS 1. Contractor shall implement an automated residential container program by December 1, 1996. 2. Each residence will be furnished, at no charge, one automated container with approximately 100 gallon capacity. Additional 100 gallon containers will be provided at a charge of$1.50 per month for those residents who require additional capacity. Smaller containers will be made available for customers with special circumstances justifying a smaller container. 3. Contractor shall submit a detailed implementation plan of the automated collection program to the City for advance approval. 4. Once the automated collection 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. 5. All refuse containers shall be replaced, upright, with the lids immediately beside the containers. Containers and lids shall not be placed or thrown on the streets, alleys, highways, or on adjoining property. 6. The Contractor, his agents and/or employees, shall not throw refuse containers from the truck to the pavement or parkway, shall not cause damage by striking them against the truck to dislodge contents, or in any other way break or damage or roughly handle the same. 7. All claims for damage of containers, by reason of the misuse or rough handling of said containers by the Contractor, shall be presented to the Contractor by the resident. The Contractor shall make a decision concerning settlement within 48 hours of receipt of such claims. 5 8. Any contractor supplied 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 of the Contractor by the person from whom refuse is collected, within ten (10) days. 9. The Contractor shall provide large capacity containers (bins) 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 need to meet the demand of customers. All such containers shall be maintained by Contractor so as not to leak. Upon customer request, containers shall feature tight-sealing lids (the Balanced Lid Systems (or equivalent) bins specified in Exhibit D to the Contractor's proposal) 10. Residents electing to use large capacity containers for mechanical loading shall use such containers exclusively and shall place such container for pickup where they are readily accessible to the Contractor's equipment. 11. The Contractor shall provide sufficient workers and equipment so as to limit the time that the bins are placed in the public right-of-way to a maximum of three (3) hours. 4. Paragraph 0- Agreement Term and Renewal is hereby amended to read as follows: The Contractor shall have the exclusive right to collect, haul and dispose of all refuse within the City for a term commencing August 1, 1996 and expiring July 31, 2001, provided however, that commencing August 1, 1997 and every year thereafter, automatic one year extensions shall be applied to said Agreement so that the term of this Agreement shall thereafter remain at a constant five years, subject to the rights of the parties to terminate the agreement set forth in paragraph P. of Agreement. Should either party desire that said automatic one-year renewal and extension term be terminated, such party may give the other written notice of such not later than May 1 of any year of the Agreement. Such notice will terminate the automatic one-year renewal and extension provision, and the Agreement shall remain in effect for the balance of the term outstanding. 5. Paragraph T- Recycling is hereby amended by the addition of the following at the conclusion thereof: 5. Commercial recycling program. The Contractor shall undertake the program 6 described in its Waste Services Franchise Renewal Proposal. Prior to the implementation of Phase II - Materials Recovery Facility, the Contractor and City shall negotiate a rate to be paid by commercial accounts that will reimburse the Contractor for the substantial additional disposal costs associated with Materials Recovery Facilities. 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 takes into account the disproportionate disposal costs associated with commercial Materials Recovery Facility serviced accounts. 6. A new paragraph "AA - AB 939 Indemnification" is hereby added to the Agreement as follows: AA. AB 939 Indemnification. Contractor agrees to protect, defend, indemnify and hold harmless the City against 90% (ninety percent) of all fines or penalties imposed by the California Integrated Waste Management Board or its successor due to the failure of the City to divert from landfills at least 25% (twenty five percent) of the garbage and rubbish including recyclable materials attributable to City, or, commencing no earlier than January 1, 2000, 50% (fifty per cent) of such garbage and rubbish including recyclable materials thereafter, or such lesser percentage equal to the landfill diversion goals imposed on local governments by AB 939 as it may be amended from time to time provided that the City's failure to accomplish the landfill diversion goals shall not result from any negligent or willful act or omission of City. 7. A new paragraph `BB - Hazardous Materials" is hereby added to the Agreement as follows: BB. Hazardous Materials. Contractor shall adopt and adhere to a training program that will assist their employees to identify and properly dispose of any hazardous materials that may come into their possession. Contractor shall reasonably assist City in dissemination of information regarding hazardous materials to local residents and businesses. 7 IN WITNESS WHEREOF, the City by order of its City Council and the Contractor by order of its Board of Directors,have caused this Second Amendment to Agreement to be executed on , 1996. CITY OF ROSEMEAD By: G2.c Jc, 21=17.1r1 Clark, Mayor ATTEST: City-Clerk CONSOLIDATED DISPOSAL SERVICE. INC. BY' At-x John A. Tel- io, President/CEO 8