HomeMy WebLinkAboutEDCO Disposal Corporation - Rate Adjustment and Modifications - 1993city of National City, California
COUNCIL AGENDA STATEMENT
MEETING DATE June 22, 1993
AGENDA ITEM NO. 14
ITEM TITLE RESOLUTION APPROVING A TRASH SERVICE RATE INCREASE FOR
EDCO DISPOSAL CORPORATION AND MODIFYING THE TERMS OF
THE CONTRACT
PREPARED BY C. R. Williams,
EXPLANATION
See attached.
DEPARTMENT Public Works
See report on franchise fee and city services as requested at 8 June
meeting.
Environmental Review x N/A
Financial Statement
Burden of rate increase will fall on all recipients of trash service.
Franchise fee of 5% gross will be paid to city.
Account No. N/A
STAFF RECOMMENDATION
APPROVE RATES AS SUBMITTED II tESOLUTION AND APPROVE CONTRACT CHANGES.
BOARD/COMMISSION RECOMMENDATION
NIA
ATTACHMENTS (Listed Below)
1. EDCO letter
2. Deloitte & Touche "Engagement" and "Report" (27 April)
3. Franchise Fee and City Services Report
x Resolution No 93-R6
A-200 (Rev. 9/80)
RESOLUTION NO. 9 3 - 8 6
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE AN
AMENDMENT TO AGREEMENT FOR
COLLECTION OF RUBBISH AND TRASH IN THE
CITY OF NATIONAL CITY WITH
EDCO DISPOSAL CORPORATION
WHEREAS, on September 25, 1990, the City of National City and Edco
Disposal Corporation ("Edco") entered into an agreement entitled "Agreement for
Collection of Rubbish and Trash in the City of National City by and between the City of
National City and Edco Disposal Corporation for Services Rendered;" and
WHEREAS, the City and Edco now desire to amend various provisions of
said agreement, including those provisions pertaining to the rates charged by Edco; and
WHEREAS, a public hearing as required by law was held on June 8, 1993,
in the City Council Chambers, 1243 National City Boulevard, National City, to consider
the proposed rate increase.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of National City that the Mayor is hereby authorized to execute an Amendment to the
agreement with Edco Disposal Corporation, dated September 25, 1990, and entitled
"Agreement for Collection of Rubbish and Trash in the City of National City by and
between the City of National City and Edco Disposal Corporation for Services
Rendered." Said Amendment to Agreement is on file in the Office of the City Clerk.
PASSED and ADOPTED this 22nd day of June, 1993.
ATTEST:
n Q
Lori)Anne Peoples, City Clerk
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney •
George H. aters, Mayor
Passed and adopted by the Council of the City of National City, California,
on June 22. 1993 by the following vote, to -wit:
Ayes: Councilmen Dal1 a, Inzunza, Zarate, Waters
Nays: Councilmen Morrison
Absent: Councilmen None
Abstain: Councilmen None
AUTHENTICATED BY:
GEORGE H. WATERS
By:
Mayor of the City of National City, California
City lerk of the City of National Cit , California
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and cor-
rect copy of RESOLUTION NO.....9.3.-.86 of the City of National City,
Calif., passed and adopted by the Council of said City on ...�l.u.ne...2a.....1993
(Seal)
By:
City Clerk of the City of National City, California
Deputy
AMENDMENT TO AGREEMENT
FOR COLLECTION OF
RUBBISH AND TRASH
IN THE CITY OF NATIONAL CITY
This Amendment to Agreement is made and entered into this 22nd day of
June, 1993, by and between the City of National City, hereinafter referred to as "CITY,"
and Edco Disposal Corporation, hereinafter referred to as "CONTRACTOR."
RECITALS
A. On September 25, 1990, CITY and CONTRACTOR entered into an,
agreement entitled "Agreement for Collection of Rubbish and Trash in the City of
National City by and between the City of National City and Edco Disposal Corporation
for Services Rendered."
B. CITY and CONTRACTOR now desire to amend various provisions
of said agreement.
NOW, THEREFORE, the parties hereto mutually agree to amend the
following provisions of the Agreement for Collection of Rubbish and Trash in the City
of National City by and between the City of National City and Edco Disposal Corporation
for Services Rendered, as follows:
1. Section 2.D., entitled "Definitions" 'Recyclable Material'" is hereby
amended to read as follows:
D. "RECYCLABLE MATERIAL" means "Designated
Recyclable Materials" as defined in Section 9.52.010 of the National City
Municipal Code.
2. Section 7 is amended to read as follows:
DUMP SITE: Contractor shall use disposal sites designated
by CITY. In this regard, Contractor shall pay whatever reasonable use fees
are charged for such a designated disposal site, and said fees shall be an
operating expense for purposes of setting rates hereunder. In any event,
Contractor will not burn any combustible substances within the City of
National City. All disposal activities of Contractor shall be conducted in
such a way as to enhance, and not impair, the health, welfare, sanitation
and safety of the people of the City of National City.
1
3. That the National City Rate Schedule shall be as shown on Exhibit
"A," attached hereto and incorporated herein by reference, beginning July 1, 1993.
4. Except as otherwise provided herein, all of the provisions of the
Agreement for Collection of Rubbish and Trash in the City of National City by and
between the City of National City and Edco Disposal Corporation for Services Rendered,
dated September 25, 1990, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
on the date first above stated.
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney
2
,4
George H. aters, Mayor
EDCO DISPPSAL CORPORATION
Byv
By:
t(i"-6/14
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single
family properties.
For the second and for each
additional residential unit in
multiple dwellings which do not
exceed four units
2. TRAILER PARRS AND MOTELS
One time per week, per unit,
per month
3. APARTMENT HOUSES
One time per week, per unit
per month
4. SENIOR -CITIZEN RESIDENTIAL
Per month
MONTHLY
RATE
13.55
10.45
9.65
9.80
10.50
EXHIBIT "A"
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
RUBBISH AND GARBAGE (COMMERCIAL
AND INDUSTRIAL ESTABLISHMENTS)
Up to (2) 40 gallon containers
One time per week, per month
Up to (2) 40 gallon containers
Two times per week, per month
Up to (2) 40 gallon containers
Three times per week, per month
Up to (2) 40 gallon containers
Four times per week, per month
Up to (2) 40 gallon containers
Daily (six days/Monday-Saturday)
Additional or unusual accumulation
of rubbish (per cubic yard)
MONTHLY
RATE
15.95
25.40
32.65
40.35
52.70
9.55
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
BOX TYPE REFUSE SERVICE
NUMBER COLLECTION YARDS PER MONInLY
OF BINS FREQUENCY MONTH RATE
1 1 13 84.35
1 2 26 135.85
1 3 39 187.15
1 4 52 238.60
1 5 65 290.05
1 6 78 341.35
1 7 91 422.60
2 1 26 171.45
2 2 52 270.60
2 3 78 371.65
2 4 104 477.20
2 5 130 553.00
2 6 156 629.70
2 7 182 739.70
3 1 39_ 180.75
3 2 78 196.95
3 3 117 543.05
3 4 156 630.15
3 5 195 814.65
3 6 234 980.55
3 7 273 1,209.70
4 1 52 306.70
4 2 104 499.70
4 3 156 693.35
4 4 208 811.90
4 5 260 1,048.20
4 6 312 1,180.80
4 7 364 1,555.25
BOX TYPE REFUSE SERVICE CONT'D.
BOX TYPE REFUSE SERVICE CONT'D.
NUMBER COLLECTION YARDS PER MONTHLY
OF BINS FREQUENCY •MONTH RATE
5 1 65 364.40
5 2 130 604.40
5 3 195 844.85
5 4 260 1,037.45
5 5 325 1,245.80
5 6 390 1,503.80
5 7 455 1,844.80
6 1 78 421.75
6 2 156 709.05
6 3 234 996.40
6 4 312 1,146.60
6 5 390 1,388.30
6 6 468 1,689.70
6 7 546 2,078.00
TRASH RATE FRANCHISE FEE
AND
CITY SERVICES REPORT
City Council, at its meeting of 8 June to consider a
trash rate increase for the city's franchised solid waste
hauler, requested that the item be laid over for further
consideration of two specific elements of the rate increase,
namely the franchise fee and city services.
FRANCHISE FEE:
In many contexts, a franchise fee is considered
equivalent to a business license fee and is a cost of doing
business in the city. There is high validity to this concept
in a free market type situation where the business can modify
his charges to accommodate such fees. Where there is a
franchise of the nature of the city's current trash franchise
agreement, such is not the case. By the franchise agreement
itself, contractor can charge only that rate approved by the
City Council. That rate must be developed from latest
audited company books and is subject to review and report by
an outside audit firm selected by city to ensure the
reasonableness and propriety of rate development docu-
mentation. The contractor has no latitude to adjust his fees
to accommodate changes in the franchise fee. It therefore is
separately stated. It should be noted that by separately
stating the franchise fee the contractor does not benefit
from a windfall in calculating the CPI increase, since the
total franchise fee is removed before the CPI increase is
applied. The franchise fee has been calculated and so stated
for a number of years.
CITY SERVICES:
The contract states that contractor shall collect trash
from city -owned property without charge to the city. Similar
verbiage is in the 1962 contract between the city and
National City Rubbish Service - "It is specifically agreed
between the parties that no charge shall be made to the City
of National City for collection of garbage and rubbish from
city -owned property ...." The cost of so doing was included
in the rate structure charge to citizens. In 1975 the
contract was assigned to EDCO. In 1977, the contract was
extended to 1982 and minor modification made. Specifically,
the verbiage was given section headings and changed slightly
to read, "Section 10. FREE SERVICE TO CITY: Contractor
shall collect garbage ana-ilabbish from City -owned property,
as frequently as is necessary to prevent the accumulation of
rubbish or garbage on City -owned property, without charge to
the City." The cost for providing this service is included
within the price structure approved for rate setting.
In the mid-1980's the handling of sweeper sweepings
surfaced as a problem. A tradeoff was established between
city and contractor that disposal of sweeper sweepings (which
TRASH RATE FRANCHISE FEE AND CITY SERVICES REPORT 2
heretofore has been handleby city staff) would be included
as a contractor -provided city service, in exchange for city
permitting temporary storage of roll -off containers on cur-
rently unused city property.
In the 1990 revision to the contract, city service was
modified to include disposition of sweeper sweepings:
"SECTION 11. SERVICE TO CITY: Contractor shall collect
garbage and rubbish from City -owned property as frequently as
is necessary to prevent the accumulation of rubbish and
garbage on City -owned property, without charge to City.
Collection service includes removal of sweeping debris."
Not only was removal of sweeping debris formally added
to the contract, but also additional services were added,
including: increasing the citywide cleanup from once a year
to twice a year, adding a bulky item pick-up service and a
refrigerator door program. These programs were also defined
as "a basic business cost to be included in overall rate
establishment and without additional charge to the customer,"
by the contract.
The intent of the 1980 and 1990 contracts, to a
certainty, is that the franchise fee at 2% of gross in 1980,
and at 5% escalating by 1% per year for the duration of the
contract in the 1990 revision were separate cost elements of
the contract and come right off the top of the gross income.
Similarly the cost of "free" services to the city is
and has been a cost element of the rate structure.
SUMMARY:
Both these costs must be paid from the gross income of
the contractor - there is no other way. For a number of
years they have been treated as a cost element of the rate
structure due to the rate control of the franchise. It may
confuse the issue by having the contractor state those costs
up front, but it was done in the interest of full disclosure
of all cost elements involved in the rate determination.
City of National City
Office of the City Clerk
1243 National City Boulevard, National City, CA 91950-4397
Lori Anne Peoples - City Clerk (619) 336-4226
July 6. 1993
Mr. Edward Burr. President
EDCO Disposal Corporation
6670 Federal Boulevard
Lemon Grove. California 91945
Dear Mr. Burr:
Enclosed is a certified copy of Resolution No. 93-86 which was
adopted by the City Council of the City of National City on June
22. 1993. Also enclosed is a fully -executed original Amendment
to Agreement which was authorized by said Resolution.
nie Daniels.
Secretary to the City Clerk
Enclosures (2)
® Recycled Paper
tit), of National City, California
COUNCIL AGENDA STATEMENT
7
MEETING DATE June 8, 1993 AGENDA ITEM NO.
ITEM TITLE RESOLUTION APPROVING A TRASH SERVICE RATE INCREASE FOR
EDCO DISPOSAL CORPORATION AND MODIFYING THE TERMS OF
THE CONTRACT
PREPARED BY C. R. Williams,. Jr//DEPARTMENT Public Works
EXPLANATION,
See attached.
Environmental Review
Financial Statement
N/A
Burden of rate increase will fall on all recipients of trash service.
Franchise fee of 5% gross will be paid to city.
Account No N/A
TAFF RECOMMENDATION
APPROVE RATES AS SUBMITTED IN RESOLUN AND APPROVE CONTRACT CHANGES.
BOARD/COMMISSION RECOMMENDATIOIC
N/A
ATTACHMENTS (Listed Below)
1. EDCO letter
2. Deloitte & Touche "Engagement" and "Report" (27 April)
x Resolution No 93-69
A-200 (Rev. 9/80)
RESOLUTION NO. 93-69
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE AN
AMENDMENT TO AGREEMENT FOR
COLLECTION OF RUBBISH AND TRASH IN
CITY OF NATIONAL CITY WITH
EDCO DISPOSAL CORPORATION
WHEREAS, on September 25, 1990, the Cit of National City and Edco
Disposal Corporation entered into an agreement entitled Agreement for Collection of
Rubbish and Trash in the City of National City by and . -tween the City of National City
and Edco Disposal Corporation for Services Render: +;" and
WHEREAS, the City and Edco no - desire to amend various provisions of
said agreement.
NOW, THEREFORE, BE
of National City that the Mayor is her
agreement with Edco Disposal Co
"Agreement for Collection of Rub
between the City of National
Rendered." Said Amendment
ATTEST:
Lori Ann: Peoples, City Clerk
APP ° OVED AS TO FORM:
RESOLVED by the City Council of the City
y authorized to execute an Amendment to the
ration, dated September 25, 1990, and entitled
ish and Trash in the City of National City by and
ity and Edco Disposal Corporation for Services
o Agreement is on file in the Office of the City Clerk.
I
PASSED an+ ADOPTED this 8th day of June, 1993.
George H. Eiser, III
City Attorney
George H. Waters, Mayor
�iG
P- rE2)
AMENDMENT TO AGREEMENT
FOR COLLECTION OF
RUBBISH AND TRASH
IN THE CITY OF NATIONAL CITY
This Amendment to Agreement is made and entered into this 8th day of
June, 1993, by and between the City of National City, hereinafter referred to as "CITY,"
and Edco Disposal Corporation, hereinafter referred to as "CONTRACTOR."
RECITALS
A. On September 25, 1990, CITY and CONTRACTOR entered into an
agreement entitled "Agreement for Collection of Rubbish and Trash in the City of
National City by and between the City of National City and Edco Disposal Corporation
for Services Rendered."
B. CITY and CONTRACTOR now desire to amend various provisions
of said agreement.
NOW, THEREFORE, the parties hereto mutually agree to amend the
following provisions of the Agreement for Collection of Rubbish and Trash in the City
of National City by and between the City of National City and Edco Disposal Corporation
for Services Rendered, as follows:
1. Section 2.D., entitled "Definitions" 'Recyclable Material'" is hereby
amended to read as follows:
D. "RECYCLABLE MATERIAL" means "Designated
Recyclable Materials" as defined in Section 9.52.010 of the National City
Municipal Code.
2. Section 7 is amended to read as follows:
DUMP SITE: Contractor shall use disposal sites designated
by CITY. In this regard, Contractor shall pay whatever reasonable use fees
are charged for such a designated disposal site, and said fees shall be an
operating expense for purposes of setting rates hereunder. In any event,
Contractor will not burn any combustible substances within the City of
National City. All disposal activities of Contractor shall be conducted in
such a way as to enhance, and not impair, the health, welfare, sanitation
and safety of the people of the City of National City.
1
3. Section 16 is amended to read as follows:
FRANCHISE FEE: Beginning on July 1, 1993, Contractor
will pay to the City of National City as a franchise fee a sum of money
equal to five percent (5 %) of Contractor's gross collections derived from
services rendered pursuant to this agreement. The franchise fee shall, at
City's option, increase by 1 % on July 1 of each succeeding year for the
remainder of the contract term. Said franchise fee will be payable on the
20th day of each month. City shall have the right, at reasonable times and
places, to inspect contractor's books and records to insure the proper and
correct payment of the franchise fee.
4. Except as otherwise provided herein, all of the provisions of the
Agreement for Collection of Rubbish and Trash in the City of National City by and
between the City of National City and Edco Disposal Corporation for Services Rendered,
dated September 25, 1990, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
on the date first above stated.
APPROVED AS TO FORM:
George H. Eiser, III
City Attorney
2
George H. Waters, Mayor
EDCO DISPOSAL CORPORATION
By:
By:
Deloitte &
Touche
May 5, 1993
Mr. C. R. Williams, Jr.
Public Works Department
City of National City
2100 Hoover Avenue
National City, California 91950-6599
Dear Mr. Williams:
Suite 1900 Telephone: (619) 232-6500
701 " B" Street [ ITT Telex: 4995722
San Diego, California 921Q`f-8498, ':', F'asimile: (619) 237-1755
We have applied certain agreed -upon procedures, as discussed below, to accounting records
and other items as related to EDCO Disposal Corporation ("EDCO") and San Diego Recycling
("Recycling"), as requested by you to assist you in evaluating your contractual relationship
with EDCO and Recycling. It is understood that this report is intended for use of the City
Council of National City and the management of EDCO and Recycling. However, this report
is a matter of public record and its distribution is not limited.
The procedures we performed, which relate primarily to your fiscal year 1994 residential refuse
rate, are summarized as follows:
1. We read EDCO's internally prepared financial statements for the nine months ended
February 28, 1993, and the audited financial statements for the year ended May 31,
1992. We inquired of Alder, Green & Hasson (independent certified public accountants
for EDCO) and Dan Gallaher (Controller for EDCO), as to any changes in accounting
policies and methods of application which might affect the fiscal year 1994 refuse rate
for the City.
2. We reviewed the recalculation of the fiscal 1993 residential refuse rate, which has been
used as a basis for the fiscal 1994 rate adjustment.
3. We obtained and reviewed information which supports the Consumer Price Index
adjustment as calculated by EDCO.
4. We reviewed EDCO's calculation of franchise fees due to the City for the period from
May 1, 1992 to March 31, 1993, to ascertain that they were calculated based on
revenues as reported in EDCO's underlying financial records and that they were in
accordance with contractual requirements.
DeleitteTouche
Tohmatsu
International
5. We reviewed franchise fee remittances made to National City by EDCO for the period from.
May 1, 1992 to March 31, 1993 to ascertain that they were made on a timely basis.
6. We reviewed San Diego County landfill fee increases projected during the fiscal year 1993
rate review process, and agreed actual increases to supporting documentation. We agreed
actual tipping charges and tons of waste to supporting documentation for five judgementally
selected days for the period from June 1992 to February 1993.
7. We reviewed the reasonableness of projected fiscal 1994 San Diego County landfill fee
increases on the rate calculation.
8. We ascertained that one-time adjustments to the fiscal 1993 rate review were properly
excluded from the fiscal 1994 rate review.
9. We reviewed the calculation of actual vs. projected revenues from the sale of recyclables
related to the fiscal 1993 rate, and the corresponding adjustment to the 1994 rate, for
reasonableness.
10. We agreed total tons of recyclable materials sold to underlying accounting records and
related supporting work tickets for two judgementally selected months.
11. We compared the estimated price per ton of recyclables used for calculating the projected
fiscal year 1994 rates with documentation which supports actual prices currently in force for
two judgementally selected dates.
12. We reviewed the calculation of the cost of the green waste service program, including
landfill diversion, and through discussion with Dan Gallaher compared it to a program in
place for another municipality serviced by EDCO.
13. We reviewed the calculation of the franchise fee and the effect of its increase to 5% on the
fiscal year 1994 refuse rate calculation.
14. We performed a review of insurance in force, through discussion with Mike Fellows of
EDCO, to ascertain that coverage levels were in compliance with contractual requirements.
In connection with the procedures referred to above, no matters came to our attention that caused
us to believe that the specified accounts or the final calculation of items noted above, as they
relate to the fiscal 1994 rate calculation prepared for the City by EDCO (attached as Exhibit A)
should be adjusted.
Because the above procedures do not constitute an audit made in accordance with generally
accepted auditing standards, we do not express an opinion on any of the accounts or items
referred to above. Had we performed additional procedures or had we made an audit of financial
statements in accordance with generally accepted auditing standards, matters might have come to
our attention that would have been reported to you. This report related only to the accounts and
items specified above and does not extend to any financial statements of EDCO, taken as a whole.
Very truly yours,
Zer-04: € 7�
Attachment
E)tIIBIT A
NATIONAL CITY - RATE REVIEW 1993 Effective July 1, 1993
% of
Revenue Residential Commercial
Current rate 11.10 70.60
C. P. I. 1.39% 0.15 0.96
Tip Fee Increase
(assuming $43, eff. 7/1/93) 17.22% 1.91 12.16
Effect of Increasing Market Prices
of Recyclabies (net) -0.79% -0.09 -0.58
Reverse Prior Yr. Annualization Adj. -0.67
Cost of Yard Waste Program 93-94 5.46% 0.81 3.85
Cost of Yard Waste Program 92-93 -1.22
Sub -total
(including Current Franchise Fee) 13.68 85.12
Leas: Current Franchise Fee (2%) 2.00% 0.22 1.41
Sub -total before Franchise Fee 13.46 83.71
5% Franchise Fee 0.71 4.41
PROPOSED RATES 27.66% 14.17 88.12 24.81%
.........n.a.... .......v...................... n..a ..... ... nv::n:.v::._::::: :.:. n: .....ln:n:. -::::..... ,.....: �::: nvx:::: n.
C. P. I. ADJUSTMENT
Revenues per Feb 28, '93 F/S 2,187,377 45,082 Francise Fee
Dump Cost per Feb 28, '93 F/S 696,939 742,021 Dump & Franchise Fee
Percentage Dump to Revenue 31.86% 33.92%
Applicable C. P. 1. Rate 2.10%
C. P. 1. Rate reduced by dump % 1.43% 1.39%
...{..............n ...........................................:.......:................................ n........:. inv::.:': x::.:: \v::::ply.::.:.-�!{.:{.:{Jllli}i}i}ism?}5::.}:::.v::::nv.C::::}}:{n:
TIP FEE INCREASE
ACTUAL.- 9 MONTHS TONS TIP FEE RATE
Jun-92 3,111.44 71,803.48 $23
JuI-92 3,180.66 73,505.39 $23
.,.,. pug-92 2,981.65 68,247.16 $23
Sep-92 2,933.74 82,144.61 $28
Oct-92 2,926.88 81,952.16 $28
Nov-92 2,599.20 72,777.46 $28
Dec-92 2,904.15 81,316.20 $28
Jan-93 2,989.29 83,700.08 $28
Feb-93 2,915.86 81,644.01 S28
26,522.85 897,090.55
Mar-93 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 82,220.13 $28
Apr-93 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 82,220.13 $28
May-93 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 82,220.13 $28
8,809.30 246,660.40
TIP FEE IN CURRENT RATE
PROJECTED
35,332.15 943,750.95
2,355.05 11,775.24 $5
37,887.20 955,526.19
1,013,974.00
-58,447.81
TONS TIP FEE RATE
Jun-93 3,111.44 87,120.32 $28
Jul-93 3,180.66 136,768.38 $43
Aug-93 2,961.65 127,350.95 S43
,Sep-93 2,933.74 126,150.82 443
)ct-93 2,926.86 125,854.98 $43
1,1ov-93 2,599.20 111,765.60 $43
Dee-93 2,904.15 124,878.45 $43
Jan-94 2,989.29 128,539.47 $43
Feb-94 2,915.86 125,381.98 $43
26,522.85 1,093,810.95
Mar-94 (PROJ.) based on 12/92 - 2/93 avg. 2,938.43 126,266.83 $43
Apr-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,266.63 $43
May-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,266.83 $43
FREE SERVICE
PROJECTED TIP FEE
ACTUAL. TIP FEE
8,809.30 378,799.90
35,332.15 1,472,810.85
2,355.05 47,100.95 $20
37,687.20 1, 519, 711.80
1,519,711.80
955,526.19
PROJECTED INCREASE 564,185.61
PRIOR YEAR OVERAGE
ACTUAL REVENUE-9 MONTHS
PROJ. REVENUE - 3 MONTHS
-58,447.81 -58,447.81
505,737.80
2,187,377.00
750,000.00
2,937,377.00
PERCENTAGE INCREASE 17.22%
El T OF INCREASING MARKET PRICES OF RECYCLABLES
Forecasted Revenues from Sales of Recyclablee
Forecasted Tons Recycled
Forecasted Average Revenues per Ton
ACTUAL - 9 MONTHS
782.65
21.16
TONS REVENUES AVG/TON
Jun-92 76.33 1,429.15 18.72
Jul-92 69.97 2,035.90 29.10
Aug-92 74.33 1,754.48 23.60
Sep-92 79.80 1,780.59 22.31
0ct-92 71.53 1,475.60 20.63
Nov-92 73.04 1,593.75 21.82
Dec-92 85.25 2,204.53 25.86
Jan-93 73.08 1,899.52 25.99
Feb-93 67.63 1,643.82 24.31
Mar-93 (PROJECTED)
Apr-93 (PROJECTED)
May-93 (PROJECTED)
ACTUAL + 3 MO. PROJ. REVENUES
ANNUALIZED OVERAGE
9 MONTH OVERAGE
ACTUAL REVENUE - 9 MONTHS
670.96
15,817.34 23.57
70.56
75.43
66.86
1,791.52
1,963.44
1,573.22
212.85 5,328.18
25.39
26.03
23.53
16,562.11 ORIGINAL
0
16,562.11 REVISED
883.81 23.93 21,145.52
4,583.41
3,428.50
2,187,377.00
OVERRECOVERED REVENUES FROM SALES OF RECYCLABLES -0.16%
74.80%
74.80%
CL NT YEAR REVENUES FROM SALES OF RECYCLABLES
PROJECTED TONS 883.81
PROJECTED REVENUE PER TON BASED ON 1/93 & 2/93 25.15
22,227.12
PREVIOUS ANNUAL PROJECTED REVENUE 16,562.11
PROJECTED ADDITIONAL OVERAGE
ADJUST TO 9 MONTHS (9/12)
ACTUAL REVENUE - 9 MONTHS
SUB -TOTAL
LESS: REVERSAL OF PRIOR YEAR'S UNRECOVERED REVENUES
COST OF YARD WASTE PROGRAM
5,665.01
4,248.76
2,187,377.00
-0.19%
-0.35%
-0.44%
-0.79%
RUBBISH COLLECTION ONLY 1 - 3 AXLE TRUCK W/ 2 MEN - 5 - 8 HOUR DAYS
2 - 2 AXLE TRUCKS W/ 1 MAN - 5 - 8 HOUR DAYS
RUBBISH AND YARD WASTE
1 - 3 AXLE TRUCK W/ 2 MEN - 5 - 8 HOUR DAYS
2 - 2 AXLE TRUCKS W/ 1 MAN - 5 - 8 HOUR DAYS
1 - 2 AXLE TRUCK W/ 1 MAN - 5 - 9 HOUR DAYS
ADDITIONAL COLLECTION COST RELATED TO YARD WASTE
HOURLY
RATE
$125 21,650
$90 31,176
$125 21,650
$90 31,176
$90 17,537
52,828
70,363
17,537
LESS: TIP FEE SAVINGS
EST. 7,300 HOMES AT 15 POUNDS PER HOME PER WEEK TIMES 4.33 WEEKS PER MONTH 237
LANDFILL TRASH FEE $43
LANDFILL YARD WASTE FEE $25 $18
NET COST OF YARD WASTE PROGRAM PER MONTH
MULTIPLY BY 9 MONTHS
ACTUAL REVENUE-9 MONTHS
4,287
13,269
119,424
2,187,377
5.46%
uty of National City, California
COUNCIL AGENDA STATEMENT
MEETING DATE June 8, 1993
2
AGENDA ITEM NO.
% ITEM TITLE PUBLIC HEARING REGARDING A TRASH SERVICE RATE INCREASE FOR
EDCO DISPOSAL CORPORATION AND MODIFICATION OF THE TERMS OF
THE CONTRACT
PREPARED BY C. R. Williams, Jr./7 DEPARTMENT Public Works
EXPLANATION
See attached.
Environmental Review X N/A
Financial Statement A
Burden of rate increase will fall on all recipients of trash service.
Franchise fee of 5% gross will be paid to city.
Account No. N/A
STAFF RECOMMENDATION
TAKE PUBLIC TESTIMONY.
BOARD/COMMISSION RECOMMENDATION
N/A
ATTACHMENTS (Listed Below)
1. EDCO letter
2. Deloitte & Touche "Engagement" and "Report" (27 April)
Resolution No. N/A
A-200 (Rev. 9/80)
COUNCIL AGENDA STATEMENT
ITEM TITLE PUBLIC HEARING REGARDING A TRASH SERVICE RATE
INCREASE FOR EDCO DISPOSAL CORPORATION AND
MODIFICATION OF THE TERMS OF THE CONTRACT.
EXPLANATION
I. REVISED RATE SCHEDULE
A. The current contract with EDCO permits a yearly rate
increase request. By the agreement, such rate increase
is limited to the CPI for San Diego and will equal the %
change in the index, with a cap of 6%. There are a
number of city-directed/contractor-provided services
that are included in the basic rate, and for which no
charge is levied at the time of service: semi-annual
citywide cleanup, city trash and city litter can pickup,
bulky item pickup, the refrigerator door safety program,
and the citywide curbside program. There are other
elements of cost not in the basic rate:
County tip fees are "pass -through" costs.
The monies obtained from the sale of recyclable
materials are used to offset other elements of
cost. Receipts for the budget year are estimated
for rate purpose based upon estimated quantity of
recyclables and price and are adjusted when actuals
are known.
The green waste program is under development and
annual costs are estimated (as are tip fees
offset), with corrections to be applicable next
year.
B. The rate adjustment letter from EDCO, appended, shows
the rates being proposed, the summary of rate change
elements, the calculations for the CPI adjustment, tip
fee impacts, sale of recyclables adjustments, projected
costs for yard waste program including reduced tip fee
for yard waste, and the cost of "FREE" services. An
additional part of EDCO's letter includes rates for both
residential and commercial for surrounding jurisdictions
as a basis of comparison with the rate proposed.
C. Summarizing; the proposed FY 94 trash rate attached
contains the contractually established CPI index
increase, the whopping county tipping fee increase from
$28/ton to an estimated $43/ton, the 5% franchise fee,
and expansion of the green waste program to a full
year. It has been adjusted (based upon nine months
actual and three months estimated) for over/under in the
estimated total tonnage of trash, the total tonnage of
green waste, the total amount of recyclable materials
sold, and the rate actually received for such sale.
-2-
D. Elemental impacts are as follows:
Current rate $11.10
CPI increase 0.15
Tip fee increase 1.91
Better recycling market -0.09
Yard waste program 0.61
5% FRANCHISE, NET 0.49
Proposed new rate $14.17
with commercial rates
$70.60 for a 3-yard
same service.
= 5% of
= 62% "
= -3%
= 20%
= 16%
= 28% total increase
n
n
increase
u
being at 25%, increasing from
bin once a week to $88.12 for the
E. The rate changes proposed were developed by EDCO, based
upon their audited statements for thir fiscal year
ending 31 May 1992 and internal financial documents
through 28 February 1993. These data have been reviewed
again this year by the independent and highly esteemed
audit firm (selected by the city and paid by EDCO) of
Deloitte & Touche. The engagement letter and report
from Deloitte & Touche are appended.
F. The rates proposed are fair and equitable, and approval
is recommended.
II. PROPOSED CONTRACT PROVISIONS CHANGES
A. City direction of trash.
The present contract permits the contractor to furnish
his own dump site or, with 30 days notice, to use a
county dump site as directed by the city.
In any agreement to be signed, either with the county or
generally in the city's best interest, city should have
the authority to direct its trash to any disposal,
without reservation. A modification to the contract is
required to ensure that the city has that right.
The required modification is indicated by strikeout for
parts to be deleted, and CAPS UNDERLINED for parts to be
added.
"SECTION 7. DUMP SITE: Contractor shall ¢,ijt}iot
#o t g tt$11010411 t 6004111$tpeillOt use disposal sites
Pt031 91//tO1MOY1t 1NIWY'1Of/$4010t05495 AS DIRECTED BY
CITY. In any event, Contractor will not burn any
combustible substances within the City of National
City. All disposal activities of Contractor shall be
conducted in such a way as to enhance, and not impair,
the health, welfare, sanitation and safety of the people
of the City of National City.
YT4595$11301104Y$11Ntt i 00110W0011164141100Y1t04AttO
-3-
Uo/1#0,11 //t00#0000X010$010f1$0 10100$ 000410tOPO
$tto. In this regard, Contractor shall pay whatever
reasonable use fees are charged for such a designated
disposal site, and said fees shall be an operating
expense for purposes of setting rates hereunder."
B. Franchise Fee
The contract with EDCO, 25 September 1990, called for
the franchise fee to increase to 5% on 1 October 1992,
and to escalate by 1% per year for each succeeding year
for the term of the contract. During subsequent rate
deliberations, Council has directed, and the contractor
has agreed, that the franchise fee remain at 2%. In
view of the increasing city costs associated with trash
reduction the fee has been established at the 5% figure
originally determined. The yearly escalation by 1% is
to be effective as an automatic increase in the
contract.
Required modification to the contract would be as
follows:
"SECTION 16. FRANCHISE FEE. As a franchise fee,
Contractor will pay the City of National City a sum of
money equal to .00/1150tooNi //,(gy p FIVE PERCENT (5%) of
Contractor's gross collections derived from services
rendered pursuant to this agreement. The franchise fee
y6t,li MAY, AT CITY'S OPTION, increase wwo##o¢u
00t0160t11X//11.M//0t0//NXXX/140t00$0 by i% on July 1 of
each succeeding year for the remainder of the contract
term. Said franchise fee will be payable on the 20th
day of each month. City shall have the right, at
reasonable times and places, to inspect Contractor's
books and records to insure the proper and correct
payment of the franchise fee."
1 1
DISPOSAL CORPORATION Lemon Gro ei Cal feornaia 91945 (619) 287-7555
A PROPOSAL FOR
THE CITY OF
NA T/ONAL CITY
FROM
EDCO DISPOSAL
Printed on Recycled Paper
TABLE OF CONTENTS
PROPOSAL LETTER
PROPOSED RATE SCHEDULES
RATE REVIEW
COST OF CITY SERVICES
RATE COMPARISONS
..:: ..t
bb7Cf i=eral Boulevard
[ [? AL �CORPORATIOIV edLemon Grove California 91945 (619) 287 755
May 10, 1993
City of National City
1243 National Avenue
National City, CA 92050
Honorable Mayor and Members of the City Council:
The Refuse Collection & Recycling Agreement between the City
of National City and EDCO Disposal Corporation provides for
certain periodic rate adjustments. Annually, the rate
adjusts on July 1st by the amount of the local consumer price
index, with a maximum 6% cap. The contract also allows for a
pass through of changes in disposal site fees.
The County of San. Diego has indicated a very substantial
53.5% landfill increase. The disposal site fee would then
total $43.00 per ton and the yard waste fee would be $25.00
per ton. Both are unofficially scheduled to be implemented
on July 1, 1993.
Attached is financial information and projections from our
company's controller. All material has been reviewed by the
independent auditing firm of Deloitte & Touche. The report
recommends a 28% rate increase to residents and a 25%
increase to businesses.
The total proposed rate for a single family residence
increases from $11.10 to $14.15 per month. The requested rate
increase includes:
- the increase in the County's tipping fee from $28.00 per
ton to $43.00 per ton (increases rate by $1.91)
- a reduction in the rate due to slightly improved markets
for recyclables (decreases rate by $.09)
- the cost of a full year's yard waste program (increases
rate by $.61)
- 5% franchise fee (increases rate by $.49)
- the CPI adjustment (increases rate by only $.15)
The extra City services provided in National City are
included and represent $.91 of the proposed $14.15 rate. (See
attachment)
Printed on Recycled Paper
The proposed senior citizen rate increases from $9.25 to
$10.95 per month, which is only an 18% increase compared to
the 28% increase for a single family residence.
Please approve the attached rate schedule to be effective
July 1, 1993. If the County of San Diego delays
implementation or adopts a different fee, the schedule, of
course, will be revised.
Another issue presented for your consideration:
The current Franchise Agreement expires in November, 1994.
It would seem in our mutual best interest to extend the
contract at this time. An extension, while first appearing
to benefit the contractor, in reality favors the City as
well. It allows for long term amortization of the extremely
large investment we must make in order to hold the costs at
the lowest possible level. Further, we must assist the City
in compliance with the many State and County mandated
programs and bear the tremendous capital costs associated
with them. As you know, AB 939 requires 25% diversion by
January 1, 1995.
Many cities are adopting the automatic annual renewal type
franchise. The Agreement generally starts for five years.
Annually both parties have the option to cancel the contract.
If notice is given, a five year phase out commences. If
neither party provides notice, the term is extended for an
additional year. This type of Agreement would allow the
continuous and substantial investment necessary to provide
the very best, uninterrupted integrated waste program
to the City of National City.
The company has completed plans and will soon start expansion
of our Material Recovery Facility (MRF) in Lemon Grove. The
new construction will allow for more efficient sorting and
greater diversion of multi -family and commercial recyclables.
As an added advantage, the City gets full use of the limited
capacity of the only MRF in South County.
The company has enlarged its fleet in order to handle the
recently implemented Yard Waste Program. Additional trucks
and containers will be acquired for the Multi -Family Programs
and expansion of the Commercial Recycling Programs.
Renewal of the franchise would continue the top quality
service vital to your community by a proven, dedicated and
committed contractor. Any concerns about costs are
alleviated through examination of our firm's books and
records by your independent auditing firm.
Your approval of these proposals is requested. Thank you for
your consideration.
Respectfully,
EDCO Disposal Corporation
dba National City Rubbish
` 1K Zee--�'��l/Z�
Edward Burr, President
/
DISPOSAL CORPORATION 6670 Federal Boulevard
Lemon Grove. California 91945 (619) 287-7555
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
RUBBISH AND GARBAGE
1. RESIDENTIAL
Per month residential single
family properties.
For the second and for each
additional residential unit in
multiple dwellings which do not
exceed four units
2. TRAILER PARRS AND MOTELS
One time per week, per unit,
per month
3. APARTMENT HOUSES
One time per week, per unit
per month
4. SENIOR -CITIZEN RESIDENTIAL
Per month
CURRENT PROPOSED
MONTHLY MONTHLY
RATE RATE
11.10 14.15
8.55 10.90
8.05 10.05
8.00 10.20
9.25 10.95
EXHIBIT "A"
Printed on Recycled Paper
♦/
DES-F -OSAL. CORPORATION, 6670-Federal Boulevard
Lemon GroveCalifornia 91945 (619) 287-7555-
PROPOSED
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
CURRENT PROPOSED
RUBBISH AND GARBAGE (COMMERCIAL MONTHLY MONTHLY
AND INDUSTRIAL ESTABLISHMENTS) RATE RATE
Up to (2) 40 gallon containers
One time per week, per month
Up to (2) 40 gallon containers
Two times per week, per month
Up to (2) 40 gallon containers
Three times per week, per month
Up to (2) 40 gallon containers
Four times per week, per month
Up to (2) 40 gallon containers
Daily (six days/Monday-Saturday)
Additional or unusual accumulation
of rubbish (per cubic yard)
13.35
21.25
27.30
33.75
44.10
8.00
16.65
26.50
33.90
42.10
55.05
10.00
Printed on Recycled Paper
DISPOSAL CORPORATION bb70 eras aouievara
Lemon Grove. California 91945 (619) 287-7555
PROPOSED
NATIONAL CITY RATE SCHEDULE
JULY 1, 1993
BOX TYPE REFUSE SERVICE
CURRENT PROPOSED
NUMBER COLLECTION YARDS PER MONTHLY MONTHLY
OF BINS FREQUENCY MONTH RATE RATE
1 1 13 70.60 88.10
1 2 26 113.65 141.85
1 3 39 156.60 195.45
1 4 52 199.65 249.20
1 5 65 242.70 302.90
1 6 78 285.60 356.45
1 7 91 353.60 441.30
2 1 26 143.45 179.00
2 2 52 226.40 282.60
2 3 78 310.95 388.10
2 4 104 399.25 498.30
2 5 130 462.70 577.50
2 6 156 526.85 657.60
2 7 182 618.90 772.45
3 1 39 151.25 188.80
3 2 78 332.10 414.50
3 3 117 454.35 567.10
3 4 156 527.25 658.10
3 5 195 681.60 850.70
3 6 234 820.40 1,023.95
3 7 273 1,012.15 1,263.25
4 1 52 256.60 320.25
4 2 104 418.10 521.85
4 3 156 580.10 724.00
4 4 208 679.30 847.85
4 5 260 877.00 1,094.60
4 6 312 987.95 1,233.05
4 7 364 1,301.25 1,624.10
Printed on Recycled Paper
BOX TYPE REFUSE SERVICE CONT'D.
CURRENT PROPOSED
NUMBER COLLECTION YARDS PER MONTHLY MONTHLY
OF BINS FREQUENCY MONTH RATE RATE
5 1 65 304.90 380.55
5 2 130 505.70 631.15
5 3 195 706.85 882.20
5 4 260 868.00 1,083.35
5 5 325 1,042.35 1,300.95
5 6 390 1,258.20 1,570.35
5 7 455 1,543.50 1,926.45
6 1 78 352.85 440.40
6 2 156 593.25 740.45
6 3 234 833.65 1,040.50
6 4 312 959.35 1,197.35
6 5 390 1,161.55 1,449.75
6 6 468 1,413.75 1,764.50
6 7 546 1,738.60 2,169.95
1TIONAL CITY - RATE REVIEW 1993 Effective July 1, 1993
% of
Revenue Residential Commercial
Current rate 11.10
70.80
C. P. I. 1.39% 0.15
0.96
Tip Fee Increase
(assuming S43, eff. 7/1/93) 17.22% 1.91 12.18
Effect of Increasing Market Prices
of Recyciablee (net) -0.79% -0.09 -0.58
Reverse Prior Vr. Annualization Adj.
-0.87
Cost of Yard Waste Program 93-94 5.48% 0.61
Cost of Yard Waste Program 92-93 3.85
-1.22
Sub -total
(including Current Franchise Fee) 13.68 85.12
Less: Current Franchise Fee (2%) 2.00% 0.22 1.41
Sub -total before Franchise Fee
5% Franchise Fee
PROPOSED RATES
C. P. I. ADJUSTMENT
13.48 83.71
0.71 4.41
27.86% 14.17 88.12 24.81%
Revenues per Feb 28, '93 F/S 2,187,377 45,082 Franciae Fee
Dump Cost per Feb 28, '93 F/S 698,939
742,021 Dump & Franchise Fee
Percentage Dump to Revenue 31.86% 33.92%
Applicable C. P. I. Rate 2.10%
C. P. I. Rate reduced by dump %
1.43%
1.39%
TIP FEE INCREASE
ACTUAL - 9 MONTHS 'TONS TIP FEE
RATE
Jun-92
Jul-92
Aug-92
ep-92
Oct-92
Nov-92
Dec-92
Jen-93
Feb-93
3,111.44 71,803.48 $23
3,180.86 73,505.39 $23
2,961.85 88,247.18 $23
2,933.74 82,144.81 $28
2,926.86 81,952.18 $28
2,599.20 72,777.46 828
2,904.15 81,318.20 SY8
2,989.29 83,700.08 $28
2,915.86 81,844.01 328
28,522.85 897,090.55
Mar-93 (PROJ.) based on 12/92 - 2/93 avg. 2,938.43 82,220.13
Apr-93 (PROJ.) based on 12/92 - 2/93 avg. 2,938328
.43 82,220.13 328
May-93 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 82,220.13
$28
TIP FEE IN CURRENT RATE
PROJECTED
8,809.30 248,680.40
35,332.15 943,750.95
2,355.05 11,775.24 85
37,887.20 955,526.19
1,013,974.00-58,447.81
TONS TIP FEE RATE
Jun-93 3,111.44 87,120.32
Jul-93 $28
Aug-93 3,180.88 138,788.38 E43
9n9-93 2,981.85 127,350.95 $43
t-93 2,933.74 128,150.82 $43
..�1/-93 2,928.86 125,854.98 $43
Dec-93 2,599.20 111,785.80 $43
Jan-94 2,904.15 124,878.45 S43
Feb-94 2,989.29 128,539.47 $43
2,915.88 125,381.98 $43
28, 522.85 1,093,810.95
Mar-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,266.83 Apr-94 (PROJ.) based on 12/92 - 2/93 avg. 6,268.83 $4343
May-94 (PROJ.) based on 12/92 - 2/93 avg. 2,938.43 128,268.83 $43
FREE SERVICE
PROJECTED TIP FEE
ACTUAL TIP FEE
PROJECTED INCREASE
PRIOR YEAR OVERAGE
8,809.30 378,799.90
35, 332.15 1, 472, 810.85
2,355.05 47,100.95 $20
37,687.20 1, 519, 711.80
1,519,711.80
955,528.19
584,185.61
-58,447.81
505, 737.80
ACTUAL REVENUE - 9 MONTHS 2,187,377.00
PROJ. REVENUE - 3 MONTHS
750, 000.00
2,937,377.00
PERCENTAGE INCREASE
17.22%
-58,447.81
crrct.I fur nvn:neAbINU MARKE1 PRICES OF RECYCLABLES
Forecasted Revenues from Sgles of Reoyclables
Forecasted Tons Recycled
Forecasted Average Revenues per Ton
ACTUAL - 9 MONTHS
18,562.11 ORIGINAL
782.65 0=7300•.1 10 CENTS
21.16 18,562.11 REVISED
TONS REVENUES AVG / TON
Jun-92 78.33 1,429.15
Jul-9218.72
Aug-92 69.97 2,035.90 Y9.10
Sap•92 74.33 1,754.48 23.60
Oct-92 79.80 1,780.59 22.31
71.53 1,475.60 20.63
Nov-92
Dec
-92 -973.04 1,593.75 21.82
Jan-93 85.25 2,204.53 25.86
Feb-93 73.08 1,899.52 25.99
87.83 1,643.82 24.31
670.98 15,817.34 23.57
Mar-93 (PROJECTED)
70.56 1,791.52 25.39
Apr-93 (PROJECTED) 75.43 1,963.44
May-93 (PROJECTED) 2
66.86 1,573.22 23..53
3
212.85 5,328.18
ACTUAL + 3 MO. PROJ. REVENUES 883.81
ANNUALIZED OVERAGE
9 MONTH OVERAGE
ACTUAL REVENUE • 9 MONTHS
OVERRECOVERED REVENUES FROM SALES OF RECYCLABLE&
23.93 21,145.52
4,583.41
3,428.50
2,187,377.00
-0.16%
74.80%
74.80%
PROJECTED TONS
PROJECTED REVENUE PER 1`ON BASED ON 1/93 & 2/93
883.81
25.15
PREVIOUS ANNUAL PROJECTED REVENUE
PROJECTED ADDITIONAL OVERAGE
ADJUST TO 9 MONTHS (9/12)
ACTUAL REVENUE - 9 MONTHS
SUB -TOTAL
LESS: REVERSAL OF PRIOR YEAR'S UNRECOVERED REVENUES
t!k
COST OF YARD WASTE PROGRAM
RUBBISH COLLECTION ONLY 1
2
RUBBISH AND YARD WASTE 1
ADDITIONAL COLLECTION
LESS: TIP FEE SAVINGS
EST. 7,300 HOMES AT 15
- 3 AXLE TRUCK W/ 2 MEN -
- 2 AXLE TRUCKS W/ 1 MAN
2-
1-
3 AXLE TRUCK W/ 2 MEN -
2 AXLE TRUCKS WI 1 MAN
2 AXLE TRUCK W/ 1 MAN -
COST RELATED TO YARD WASTE
22,227.12
16,502.11
5,865.01
4,248.78
2,187,377.00
ti
5 - 8 HOUR DAYS
- 5 • 8 HOUR DAYS
5 - 8 HOUR DAYS
- 5 - 8 HOUR DAYS
5 - 9 HOUR DAYS
POUNDS PER HOME PER WEEK TIMES 4.33 WEEKS PER MONTH
LANDFILL TRASH FEE
LANDFILL YARD WASTE FEE
NET COST OF YARD WASTE PROGRAM PER MONTH
MULTIPLY BY 9 MONTHS
ACTUAL REVENUE - 9 MONTHS
-0.19%
-0.35%
-0.44%
-0.79%
HOURLY
RATE
$125 21,850
$90 31,178
$125
090
$90
$43
$25
21,650
31,176
17,537
52,826
70,383
17,637
237
$18
4,267
13,289
119,424
2,187,377
6.48%
1
EILSPOSkeiLCORPORATION 6670 Federal Eoulevar
Lemon Grove' Caiifornia 91945(619) 28T7
NATIONAL CITY
COST OF CITY SERVICE
Residential 30% 7300 Residential Accounts
Commercial 70% 14000 Bins Per Month
3230 Bins Per Week
60 Street Litter Cans Serviced 2 x week
19-3 Cubic Yard Bins at various City Parks
and buildings 1 - 2 x week
2 Major Clean-ups Per Year
(Estimated at $6,000 per day)
360 ROB Loads Per Year to Service Sweeping
Debris, etc.. at Public Works Yard
Bulky Items Pick-up 1 x week
($600 per week - Residential only)
Refrigerator Door Program
(1 day per month @ $40 per hour)
Sub Total
$253,000 Divided by $.95 for Franchise Fee
Residential 30% ($266,000) $79,800
Divided by 7,300 Divided by 12
Commercial 70% ($266,000) $186,200
Divided by 3,230 Divided by 12
Annually
Annually
ANNUAL COST
$ 9,000
$ 35,000
$ 12,000
$ 162,000
$ 31,000
$ 4,000
$ 253,000
$ 266,000
$.91 Per Mo
$4.80 Per Mo
Per Bin
Pnnfed on Recycled Paper
REF#
CITY
RESIDENTIAL
RATE COMPARISON MAY 1993
RES RATE RECY
RESDL FRNCH
AB939 TOTAL FEE
OTHER
1)
2+
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
1F
FALLBROOK
VALLEY CENTER
SPRING VALLEY
ENCINITAS
ESCONDIDO
POWAY
OCEANSIDE
LA MESA
IMPERIAL BEACH
DEL MAR
CARLSBAD
SOLANA BEACH
LEMON GROVE
VISTA
CHULA VISTA
EL CAJON
SAN MARCOS
NATIONAL CITY
16.65 2.30
16.05 1.50
16.79 INCLUDED
PROPOSED
14.75
13.44
11.38
11.52
10.91
1.50
1.59
1.82
9.50 1.29
11.40 1.10
12.45 INCLUDED
10.68 1.60
10.20 1.48
9.85 1.26
10.32 0.78
3.74
0.52
1.84
18.95
18.80
17.55
16.79 7.5%
16.46 10% CITY BILLS
14.75
13.44 CITY BILLS
13.40 4%
13.11 CITY BILLS
12.73 5% CITY BILLS
12.67 4.6% CITY BILLS/ADJ TO LANDFILL
12.63
12.50 6.5%
12.45 5%
12.28 8%
11.68 3% ADJACENT TO LANDFILL
11.11 5% ADJACENT TO LANDFILL
11.10 2%
COMMERICAL
RATE COMPARISON MAY 1993
FRNCH 3 C YRD
REF# CITY FEE 1 X WK
OTHER
1) VALLEY CENTER 79.00
2,1 CARLSBAD 4.6% 76.86 CITY BILLS/ADJ TO LANDFILL
30 DEL MAR 5% 76.81 CITY BILLS
4) SOLANA BEACH 76.81
5) NATIONAL CITY 2% 70.60
6) LEMON GROVE 6.5% 69.95
7) POWAY 69.75
8) ENCINITAS 7.5% 69.33
9) FALLBROOK 69.25
10) VISTA 5% 66.33
11) SAN MARCOS 5% 64.71 ADJACENT TO LANDFILL
12) ESCONDIDO 10% 63.95 CITY BILLS
13) CHULA VISTA 8% 63.89
14) LA MESA 4% 63.73
15) EL CAJON 3% 63.25 ADJACENT TO LANDFILL
16) OCEANSIDE 62.04 CITY BILLS
17) SPRING VALLEY 61.05
181 IMPERIAL BEACH 55.44 CITY BILLS
Deloitte &
Touche
May 5, 1993
Mr. C. R. Williams, Jr.
Public Works Department
City of National City
2100 Hoover Avenue
National City, California 91950-6599
Dear Mr. Williams:
Suite 1900 Telephone: (619) 232-6500
701 "B" Street - -- ITT Telex: 4995722
San Diego, California 92101-8198 Facsimile: (619) 237-1755
We have applied certain agreed -upon procedures, as discussed below, to accounting records
and other items as related to EDCO Disposal Corporation ("EDCO") and San Diego Recycling
("Recycling"), as requested by you to assist you in evaluating your contractual relationship
with EDCO and Recycling. It is understood that this report is intended for use of the City
Council of National City and the management of EDCO and Recycling. However, this report
is a matter of public record and its distribution is not limited.
The procedures we performed, which relate primarily to your fiscal year 1994 residential refuse
rate, are summarized as follows:
1. We read EDCO's internally prepared financial statements for the nine months ended
February 28, 1993, and the audited financial statements for the year ended May 31,
1992. We inquired of Alder, Green & Hasson (independent certified public accountants
for EDCO) and Dan Gallaher (Controller for EDCO), as to any changes in accounting
policies and methods of application which might affect the fiscal year 1994 refuse rate
for the City.
2. We reviewed the recalculation of the fiscal 1993 residential refuse rate, which has been
used as a basis for the fiscal 1994 rate adjustment.
3. We obtained and reviewed information which supports the Consumer Price Index
adjustment as calculated by EDCO.
4. We reviewed EDCO's calculation of franchise fees due to the City for the period from
May 1, 1992 to March 31, 1993, to ascertain that they were calculated based on
revenues as reported in EDCO's underlying financial records and that they were in
accordance with contractual requirements.
DeloitteTouche
Tohmatsu
International
5. We reviewed franchise fee remittances made to National City by EDCO for the period from
May 1, 1992 to March 31, 1993 to ascertain that they were made on a timely basis.
6. We reviewed San Diego County landfill fee increases projected during the fiscal year 1993
rate review process, and agreed actual increases to supporting documentation. We agreed
actual tipping charges and tons of waste to supporting documentation for five judgementally
selected days for the period from June 1992 to February 1993.
7. We reviewed the reasonableness of projected fiscal 1994 San Diego County landfill fee
increases on the rate calculation.
8. We ascertained that one-time adjustments to the fiscal 1993 rate review were properly
excluded from the fiscal 1994 rate review.
9. We reviewed the calculation of actual vs. projected revenues from the sale of recyclables
related to the fiscal 1993 rate, and the corresponding adjustment to the 1994 rate, for
reasonableness.
10. We agreed total tons of recyclable materials sold to underlying accounting records and
related supporting work tickets for two judgementally selected months.
11. We compared the estimated price per ton of recyclables used for calculating the projected
fiscal year 1994 rates with documentation which supports actual prices currently in force for
two judgementally selected dates.
12. We reviewed the calculation of the cost of the green waste service program, including
landfill diversion, and through discussion with Dan Gallaher compared it to a program in
place for another municipality serviced by EDCO.
13. We reviewed the calculation of the franchise fee and the effect of its increase to 5% on the
fiscal year 1994 refuse rate calculation.
14. We performed a review of insurance in force, through discussion with Mike Fellows of
EDCO, to ascertain that coverage levels were in compliance with contractual requirements.
In connection with the procedures referred to above, no matters came to our attention that caused
us to believe that the specified accounts or the final calculation of items noted above, as they
relate to the fiscal 1994 rate calculation prepared for the City by EDCO (attached as Exhibit A)
should be adjusted.
Because the above procedures do not constitute an audit made in accordance with generally
accepted auditing standards, we do not express an opinion on any of the accounts or items
referred to above. Had we performed additional procedures or had we made an audit of financial
statements in accordance with generally accepted auditing standards, matters might have come to
our attention that would have been reported to you. This report related only to the accounts and
items specified above and does not extend to any financial statements of EDCO, taken as a whole.
Very truly yours,
0;44:40 f; 7-144-Z
Attachment
E -IIBIT A
NATIONAL CITY - RATE REVIEW 1993 Effective July 1, 1993
% of
Revenue Residential Commercial
Current rate 11.10 70.80
C. P. I. 1.39% 0.15 0.98
Tip Fee Increase
(assuming $43, eff. 7/1/93) 17.22% 1.91 12.18
Effect of Increasing Market Prices
of Recyclables (net) -0.79% -0.09 -0.58
Reverse Prior Yr. Annualization Adj. -0.67
Cost of Yard Waste Program 93-94 5.46% 0.61 3.85
Cost of Yard Waste Program 92-93 -1.22
Sub -total
(including Current Franchise Fee)
13.68 85.12
Less: Current Franchise Fee (2%) 2.00%
Sub -total before Franchise Fee
5% Franchise Fee
0.22 1.41
13.46 83.71
0.71 4.41
PROPOSED RATES 27.66% 14.17
VAC
C. P. 1. ADJUSTMENT
Revenues per Feb 28, '93 F/S
Dump Cost per Feb 28, '93 F/S
88.12 24.8196
2,187,377 45,082 Francise Fee
696,939 742,021 Dump & Franchise Fee
Percentage Dump to Revenue 31.86%
Applicable C. P. I. Rate 2.10%
C. P. 1. Rate reduced by dump % 1.43%
33.92%
1.39%
i::
TIP FEE INCREASE
ACTUAL - 9 MONTHS TONS TIP FEE RATE
Jun-92 3,111.44 71,803.48 $23
JuI-92 3,180.66 73,505.39 $23
Aug-92 2,981.65 68,247.16 $23
Sep-92 2,933.74 82,144.61 $28
Oct-92 2,926.86 81,952.16 $28
Nov-92 2,599.20 72,777.46 $28
Dec-92 2,904.15 81,318.20 $28
Jan-93 2,989.29 83,700.08 $28
Feb-93 2,915.86 81,644.01 $28
26,522.85 697,090.55
Mar-93 (PROJ.) based on 12/92 - 2/93 avg. 2,938.43 82,220.13 $28
Apr-93 (PROJ.) based on 12/92 - 2/93 avg. 2,938.43 82,220.13 $28
May-93 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 82,220.13 $28
TIP FEE IN CURRENT RATE
PROJECTED
8,809.30 248,660.40
35,332.15 943,750.95
2,355.05 11,775.24 $5
37,687.20 955,526.19
1,013,974.00
-58,447.81
TONS TIP FEE RATE
Jun-93 3,111.44 87,120.32 $28
Jul-93 3,180.66 136,788.38 $43
Aug-93 2,961.85 127,350.95 $43
Sep-93 2,933.74 126,150.82 $43
Oct-93 2,926.86 125,854.98 $43
Nov-93 2,599.20 111,765.60 $43
Dec-93 2,904.15 124,878.45 $43
Jan-94 2,989.29 128,539.47 843
Feb-94 2,915.86 125,381.98 $43
26,522.85 1,093,810.95
Mer-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,286.63 $43
Apr-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,266.63 $43
May-94 (PROJ.) based on 12/92 - 2/93 avg. 2,936.43 126,266.63 $43
FREE SERVICE
PROJECTED TIP FEE
ACTUAL TIP FEE
8,809.30 378,799.90
35,332.15 1,472,610.85
2,355.05 47,100.95
37,687.20 1, 519, 711.80
1,519,711.80
955,526.19
$20
PROJECTED INCREASE 564,185.61
PRIOR YEAR OVERAGE -58,447.81 -58,447.81
505,737.80
ACTUAL. REVENUE - 9 MONTHS 2,187,377.00
PROJ. REVENUE - 3 MONTHS 750,000.00
2,937,377.00
PERCENTAGE INCREASE 17.22%
EFL OF INCREASING MARKET PRICES OF RECYCLABLES
Forecasted Revenues from Sales of Recyclebles
Forecasted Tons Recycled
Forecasted Average Revenues per Ton
ACTUAL - 9 MONTHS '
782.65
21.16
TONS REVENUES AVG/TON
Jun-92 76.33 1,429.15 18.72
JuI-92 69.97 2,035.90 29.10
Aug-92 74.33 1,754.48 23.60
Sep-92 79.80 1,780.59 22.31
Oct-92 71.53 1,475.60 20.63
Nov-92 73.04 1,593.75 21.82
Dec-92 85.25 2,204.53 25.86
Jan-93 73.08 1,899.52 25.99
Feb-93 67.63 1,643.82 24.31
Mar-93 (PROJECTED)
Apr-93 (PROJECTED)
May-93 (PROJECTED)
670.96 15,817.34 23.57
70.56 1,791.52 25.39
75.43 1,963.44 26.03
66.86 1,573.22 23.53
212.85 5,328.18
ACTUAL + 3 MO. PROJ. REVENUES 883.81
ANNUALIZED OVERAGE
9 MONTH OVERAGE
ACTUAL REVENUE - 9 MONTHS
OVERRECOVERED REVENUES FROM SALES OF RECYCLABLES
23.93
16,562.11 ORIGINAL
0
16,562.11 REVISED
21,145.52
4,583.41
3,428.50
2,187,377.00
-0.16%
74.80%
74.80%
CUR. _ _.1T YEAR REVENUES FROM SALES OF RECYCLABLES
PROJECTED TONS 883.81
PROJECTED REVENUE PER TON BASED ON 1/93 & 2/93 25.15
22,227.12
PREVIOUS ANNUAL PROJECTED REVENUE 16,562.11
PROJECTED ADDITIONAL OVERAGE
ADJUST TO 9 MONTHS (9/12)
ACTUAL REVENUE - 9 MONTHS
SUB -TOTAL
LESS: REVERSAL OF PRIOR YEAR'S UNRECOVERED REVENUES
COST OF YARD WASTE PROGRAM
5,665.01
4,248.76
2,187,377.00
-0.19%
-0.35%
-0.44%
-0.79%
RUBBISH COLLECTION ONLY 1 - 3 AXLE TRUCK W/ 2 MEN - 5 - 8 HOUR DAYS
2 - 2 AXLE TRUCKS W/ 1 MAN - 5 - 8 HOUR DAYS
RUBBISH AND YARD WASTE
1 - 3 AXLE TRUCK W/ 2 MEN - 5 - 8 HOUR DAYS
2 - 2 AXLE TRUCKS W/ 1 MAN - 5 - 8 HOUR DAYS
1 - 2 AXLE TRUCK W/ 1 MAN - 5 - 9 HOUR DAYS
ADDITIONAL COLLECTION COST RELATED TO YARD WASTE
HOURLY
RATE
3125 21,650
390 31,176
3125 21,650
390 31,176
$90 17,537
52,826
70,363
17,537
LESS: TIP FEE SAVINGS
EST. 7,300 HOMES AT 15 POUNDS PER HOME PER WEEK TIMES 4.33 WEEKS PER MONTH 237
LANDFILL TRASH FEE 343
LANDFILL YARD WASTE FEE 325 318
NET COST OF YARD WASTE PROGRAM PER MONTH
MULTIPLY BY 9 MONTHS
ACTUAL REVENUE-9 MONTHS
4,267
13,269
119,424
2,187,377
5.46%
Deloitte &
Touche
Suite 1900 Telephone: (619) 232-6500
701 "B" Street ITT Telex: 4995722
San Diego, California 92101-8198 Facsimile: (619) 237-1755
April 27, 1993
Mr. C. R. Williams, Jr.
Public Works Department
City of National City
2100 Hoover Avenue
National City, California 91950-6599
Dear Mr. Williams:
This letter will confirm our understanding of the terms and objectives of our engagement and the
nature and limitations of the services we will provide in assisting you in evaluating your
contractual relationship with EDCO Disposal Corporation ("EDCO") and San Diego Recycling
("Recycling").
Our procedures to be performed, which relate primarily to your fiscal year 1994 residential refuse
rate, will consist of the following items:
1. Review EDCO's internally prepared financial statements for the nine months ended February
28, 1993, and the audited financial statements for the year ended May 31, 1992. Inquire of
Alder, Green & Hasson (independent certified public accountants for EDCO) and Dan
Gallaher (Controller for EDCO), as to any changes in accounting policies and methods of
application which might affect the fiscal year 1994 refuse rate for National City.
2. Review the recalculation of the fiscal 1993 residential refuse rate, which is used as a basis
for the fiscal 1994 rate adjustment.
3. Obtain and review information which supports the Consumer Price Index adjustment as
calculated by EDCO.
4. Review EDCO's calculation of franchise fees due to National City for the period from May
1, 1992 to March 31, 1993, to ascertain that they have been calculated based on revenues as
reported in EDCO's underlying financial records and that they are in accordance with
contractual requirements.
5. Review franchise fee remittances made to National City by EDCO for the period from May
1, 1992 to March 31, 1993 to ascertain that they were made on a timely basis.
DeloitteTouche
Tohmatsu
International
6. Review San Diego County landfill fee increases projected during the fiscal year 1993 rate
review process, if any. Agree actual increases to supporting documentation.
7. Review reasonableness of projected fiscal 1994 San Diego County landfill fee increases, if
any, on the rate calculation.
8. Ascertain that one-time adjustments to the fiscal 1993 rate review have been properly
excluded from the fiscal 1994 rate review.
9. Review the calculation of under- or over -recorded revenues from the sale of recyclables.
10. Agree total tons of recyclable materials sold to underlying accounting records, as
appropriate. From the underlying accounting records, judgmentally select daily recyclable
totals and agree those totals to supporting work tickets.
11. Compare the estimated price per ton of recyclables used for calculating the projected fiscal
year 1994 rates, with documentation which supports actual prices currently in force.
12. Review the calculation of the green waste service program, including landfill diversion as
appropriate, and compare to other similar programs, if any, in other municipalities serviced
by EDCO.
13. Review the calculation of the franchise fee and the effect of its change, if any, on the fiscal
year 1994 refuse rate calculation.
14. Review insurance in force to ascertain that coverage levels comply with contractual
requirements.
As a result of our findings, you may determine that additional tests or calculations may be
required to provide the necessary information. Additional work, if necessary, would concentrate
on specific computations or verification of expenses, revenues, allocations or other relevant
financial information. Prior to the commencement of any additional procedures, a definition of
requirements and additional costs would be prepared and your approval would be required.
Our procedures are primarily directed toward a review of the fiscal year 1994 refuse rate
adjustment for services provided by EDCO and Recycling. They do not consider the quality of
such services provided. However, should anything come to our attention during the course of
our work that would indicate outstanding or poor quality service, we would also report these
findings.
Our report will summarize the procedures we performed and the results of these procedures.
However, because the procedures performed by us will not be sufficient to constitute an audit
made in accordance with generally accepted auditing standards, we will not express an opinion
on the financial records of EDCO or Recycling or on the items discussed above. If we were to
perform additional procedures or if we were to conduct an audit of the financial statements of
EDCO or Recycling in accordance with generally accepted auditing standards, other matters
might come to our attention that would be reported to you.
It is understood that the report will be solely for your information and is not to be referred to or
distributed for any purpose to anyone who is not member of the management of the City of
National City, EDCO or Recycling. It is understood that the report may be subject to disclosure
as a public record under the California Public Records Act.
An estimate of our proposed fee to perform these procedures is listed in Attachment A. We
anticipate that our work will commence the final week of April 1993 and, in order to meet your
deadlines, will be completed by the second full week of May 1993. Our invoices are payable
when presented. We will notify you immediately of any circumstances we encounter which
would significantly affect our estimate.
By signing this letter in the spaces provided below, EDCO and National City authorize the
commencement of our work, and agree that the procedures described above meet the needs of
the parties to the contract. It is agreed that all fees shall be paid by EDCO.
This proposed engagement letter has been issued in advance of completion of our usual new
client review procedures. Accordingly, our acceptance of this engagement is subject to
satisfactory resolution of this matter.
We appreciate the opportunity to provide our services to EDCO Disposal Corporation and to the
City of National City.
Very truly yours,
Accepted by National City:
By:
Date:
•
Q..&14/1/4
C. R. W. lams, Jr., Public Works Direct
4/zg/93
Accepted by EDCO:
By:
Date:
Edward Burr, President
ATTACHMENT A
Proposed fees to perform agreed upon procedures:
Partner 2 hours at $275/hr $ 550
Concurring Reviewer .5 hours at $320/hr 160
Senior Manager 28 hours at $210/hr 5.880
6,590
Typing 4 hours at $35/hr 140
Overhead 2% of cost 135
25% Discount
6,865
(1.716)
$ 5,149
Additional work requested by the City, if any, will be billed in addition to the fees quoted above.
PACIFIC DISPOSAL, INC.
1991/2 Mace Street
Chula Vista, CA 92011
(619) 221-8060
Fax: (619) 476-0768
June 8, 1993
Mayor George Waters
City of National City
1243 National City Blvd.
National City, ca. 91950
Dear Mayor Waters;
We have a list of part of the data EDCO has submitted to the
City in regards to the requested rate increase that we feel need
to be looked into in a more detailed fashion.
CURRENT MONTHLY FEE
1. RES. RATE
2. TIPPING FEE
BREAK DOWN PROPOSED RATE
11.10 14.15
1.91 (.91) ?
CITY SERVICE'S
3. IMPROVED MARKETS (.09)
4. YARD WASTE PROGRAM .61
5. FRANCHISE FEE .49
6. C.P.I. ADJUSTMENT .15
(.49)?
FRANCHISE FEE
+ 3.07 = 14.17(.02)
These are the concerns we have found in just the residential rate
at this time.
It also appears EDCO has passed the FREE CITY SERVICE and FRANCHISE
FEE onto the commercial rate, to which he is not entitled to.
We have commissioned a C.P.A firm to review the many discrepancies
that we as laymen have found in the new rate schedule.
We feel the best avenue for the council to take at this time would
be to send this matter back to staff for a more in depth study of
the TRUE BASE COST PER UNIT AND LANDFILL COST'S PER UNIT and not
rely on the contractor's own cost study.
We would be glad to share with you and staff the results of the
independent study we are having prepared at the present time.
rJOFLG HOLLZa1ND,PRESIDENT
PACI C DISPOSAL, INC.
LAIDLAW WASTE SYSTEMS
June 7, 1993
The Honorable Mayor George H. Waters
City of National City
1243 National City Blvd.
National City, CA 92050-4397
Honorable Mayor,
Trash Franchise
I understand that Edco Disposal Corporation has proposed a modification to the terms of their National
City Trash Franchise, including an extension of the term for an additional five years. These requests are
scheduled for consideration by the Council at their regular meetings in June, 1993.
Laidlaw Waste Systems Inc., is the third largest hauler in North America and provides waste collection
and recycling services to Chula Vista and Imperial Beach under contract to these cities. While we have
honored, and will continue to honor Edco's franchise in National City, we strongly believe that at the end
of the franchise term, it is in the City's best interest to invite competitive proposals from qualified waste
haulers.
Laidlaw is well qualified to provide such services in National City and we respectfully request that at the
end of the current franchise term, City Council request proposals from Laidlaw and other qualified
haulers.
I will be pleased!}to answer any questions that you or the Council members have, or to provide any
additional information on T
L.41UIGfi.
Sincerely,
Alan J. es
Marke Strategic
Development Manager
cc: National City Council Members (4)
City Manager
City Attorney
City Clerk
Recycled Paper
180 Otay Lakes Road, Suite 200 • Bonita, California 91902 • (619) 267 - 6900
BP
G1l1ES SEGA92170RVICE laS HONE 0 9) 4777 2200 PAX (619) 477-17SS
June 8, 1993
Mayor George H. Waters
Members of the City Council
City of National City
1243 National City Blvd.
National City, CA. 91950
RE: Agenda Item No. 2
Public Hearing - Rate Increase for Trash Disposal
Agenda Item No. 7
Dear Mayor Waters:
I am writing to you and each member of The City Council regarding the above
two Agenda Items. We were unable to obtain copies until after 1:00 P.M. Monday
for review of the issues. Therefore we could not prepare this memo until this
morning.
RATE INCREASE
Everyone is aware of the dilemma the County of San Diego is facing related
to the current and future disposal of Solid Waste. Flow control of the waste
stream required for Bonding is still in a state of flux so future capital projects
are in jeopardy and the future of the San Marcos Landfill is anybody's guess.
However there is one certain fact LANDFILL FEES HAVE INCREASED 54% from $28.00
per ton to $43.00 per ton! This is an operating expense that every waste hauler
cannot absorb and must pass through as part of the service rate to his customers.
THE PROPOSAL
I have reviewed the entire proposal made by the current Franchise Hauler.
On page two of the proposal, paragraphs two and three the contractor is requesting
a FIVE YEAR EXTENSTION to the existing contract which expires November 17, 1994.
Further, annually, if either party wishes to cancel then a five year phase out
commences!
I personally attended previous City Council meeting in July and August of
1990 that dealt with a request for Rate Increases and a ten year Extension of
the Contract. The Council sent a clear signal during several sessions by only
approving modified rate increases, a compromise on the Franchise Fee and granted
only a FOUR YEAR extension so the contract would go out for bid in the future.
With all of the uncertainty within the County of San Diego at this time,
Bay Cities respectfully requests that the City Council does not grant an extention
of the current contract for the collection and disposal of solid waste services
in National City. Place a REQUEST FOR PROPOSAL for thiese services in the open
market and let the competitive bidding process produce the best Contract for all
of the residents of National City.
Sincerely,
BAY CITIES SERVICES, INC.
A. J. Moore Jr.
General Manager
AJM/nk
cc: Stephen Cavadias, President
Mike Dalla
Ralph Inzunza
Ron Morrison
Rosalie Zarate
City of National City, California
COUNCIL AGENDA STATEMENT
MEETING DATE
May 25, 1993 AGENDA ITEM NO. 4
ITEM TITLE RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO AGREEMENT
FOR COLLECTION OF RUBBISH AND TRASH IN THE CITY OF NATIONAL CITY. WITH EDCO DISPOSAL
CORPORATION
PREPARED BY George H. Eiser, III
EXPLANATION
Companion items on the Agenda pertain to the City entering into an agreement with the County of San Diego,
whereby the City agrees to commit 50-100% of its solid waste to disposal in County landfills. City staff
recommends that the City commit the full 100%.
Under the current exclusive contract with Edco Disposal Corporation, the City's garbage and rubbish hauling
contractor, waste material pertaining to building operations" (i.e., construction debris) is not included in the
definition of "rubbish," which is to be collected by the contractor.
In order to meet its contractual obligations with the County, the City must ensure that construction debris is
deposited in County landfills. The proposed amendment would include construction debris among the materials
to be collected by the City's contract hauler, thus enabling the City to satisfy its obligations. The amendment
also provides that existing contracts for collection and disposal of construction debris would not be affected;
this is to avoid problems regarding interference with existing contractual rights of other solid waste haulers
operating in the City.
A separate Agenda item addresses this issue as it relates to the ordinance authorizing an exclusive garbage and
rubbish hauling contract.
DEPARTMENT City Attorney
Environmental Review
Financial Statement
N/A
X N/A
Account No.
STAFF RECOMMENDATION
Adopt Resolution
BOARD/COMMISSION RECOMMENDATION
N/A
ATTACHMENTS (Listed Below)
Proposed Resolution
Proposed Amendment
Resolution No. 93-63
A-200 (Rev. 9/80)
cvo � 4-TO
RESOLUTION NO. 93-63
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE
AMENDMENT TO AGREEMENT FOR
COLLECTION OF RUBBISH AND TRASH IN
CITY OF NATIONAL CITY WITH
EDCO DISPOSAL CORPORATIO
WHEREAS, on September 25, 1990, the ty of National City and Edco
Disposal Corporation entered into an agreement entitl- a "Agreement for Collection of
Rubbish and Trash in the City of National City by anbetween the City of National City
and Edco Disposal Corporation for Services Rend-- ed;" and
WHEREAS, the City and Edco .w desire to amend various provisions of
said agreement.
NOW, THEREFORE, BE
of National City that the Mayor is her
agreement with Edco Disposal Co
"Agreement for Collection of Rub
between the City of National
Rendered." Said Amendment t
PASSED and
ATTEST:
Lori Anne P oples, City Clerk
APPRO D AS TO FORM:
Ge rge H. Eiser, III
C'ty Attorney
RESOLVED by the City Council of the City
y authorized to execute an Amendment to the
ation, dated September 25, 1990, and entitled
ish and Trash in the City of National City by and
ity and Edco Disposal Corporation for Services
Agreement is on file in the Office of the City Clerk.
OPTED this 25th day of May, 1993.
George H. Waters, Mayor
AMENDMENT TO AGREEMENT
FOR COLLECTION OF
RUBBISH AND TRASH
IN THE CITY OF NATIONAL CITY
This Amendment to Agreement is made and entered into this 25th day of
May, 1993, by and between the City of National City, hereinafter referred to as "CITY,"
and Edco Disposal Corporation, hereinafter referred to as "CONTRACTOR."
RECITALS
A. On September 25, 1990, CITY and CONTRACTOR entered into an
agreement entitled "Agreement for Collection of Rubbish and Trash in the City of
National City by and between the City of National City and Edco Disposal Corporation
for Services Rendered."
B.
of said agreement.
NOW
following provision
of National City by
for Services Rende
1.
follows:
95
a0
a amend various provisions
Itually agree to amend the
bbish and Trash in the City
1 Edco Disposal Corporation
iereby amended to read as
reement to provide for
the exclusi transport, recycle and
dispose of garbage, u�. __ jai from single-family
residential, multi -family, commercial, industrial and from City -occupied
facilities in accordance with this agreement„ the ordinances of the City of
National City, the regulations established by the County of San Diego and
all applicable State and Federal Laws.
1
2. Section 2(B) is amended to read as follows:
B. "RUBBISH" is refuse and waste material, whether
combustible or noncombustible, not included within the definition of
garbage as herein defined, including but not limited to paper, rags, glass,
ashes and yard waste (leaves, grass, tree and vine trimmings). It shall not
include automobile frames or fenders, hazardous or toxic materials, nor
dead animals.
3. Section 7 is amended to read as follows:
DUMP SITE: Contractor shall use disposal sites designated
by CITY. In this regard, Contractor shall pay whatever reasonable use fees
are charged for such a designated disposal site, and said fees shall be an
operating expense for purposes of setting rates hereunder. In any event,
Contractor will not burn any combustible substances within the City of
National City. All disposal activities of Contractor shall be conducted in
such a way as to enhance, and not impair, the health, welfare, sanitation
and safety of the people of the City of National City.
4. Section 17 is amended to read as follows:
EXCLUSIVE CONTRACT: City hereby grants to Contrac-
tor, during the term of this agreement, the exclusive right to collect all
rubbish and garbage and recyclable material within the City of National
City, as it now, or in the future, exists. City will not grant, during the
term of this agreement, any other person the right to collect any rubbish or
garbage or recyclable material for compensation within its city limits.
Nothing herein is intended to prevent customary agreements to service
commercial/industrial facilities for recyclable material from roll -off
containers nor to prevent individuals from recycling their own material nor
charitable organizations from recycling donated materials.
5. This Amendment shall operate prospectively and shall not affect any
contract, existing as of the date of this Amendment, for the collection, conveyance,
transport and disposal of waste material pertaining to building operations.
2
6. Except as otherwise provided herein, all of the provisions of the
Agreement for Collection of Rubbish and Trash in the City of National City by and
between the City of National City and Edco Disposal Corporation for Services Rendered,
dated September 25, 1990, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
on the date first above stated.
APPROVED AS TO FORM:
7Z
George H. Eiser, III
City Attorney
3
George H. Waters, Mayor
EDCO DISPOSAL CORPORATION
By:
By:
May 24, 1993
Mayor George H. Waters
Members of the City Council
City of National City
1243 National City Blvd.
National City, CA. 91950
RE: Agenda Item No. 4
Resolution 93-63
Agenda Item No. 7
Urgency Ordinance
gp 4 Clt\ES SE2y10E?\E`Ep
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3u2,ti ,t6S'
Dear Mayor Waters;
I am writing to you regarding the above two Ordinances on the Consent
Calendar for the regular meeting Tuesday, May 25, 1993. We were not aware
the aho=e Agenda Items were to be on THE CONSENT CALENDAR FOR TOMORROW'S
MEETING. Bay Cities Services, Inc. is gravely concerned regarding the
magnitude and ramifications of these two Agenda Items.
RESOLUTION NO. 93-64
Committing 100% of National City's waste stream under the Flow Control
Covenant with the County of San Diego is a seperate issue. We are fully aware
of the County's dilemma. These areas are vital to support the financial
integrity of the County Waste Management Department.
1. APPROVAL OF THE EXPANSION OF THE SAN MARCOS LANDFILL BY ALL STATE
AGENCIES.
2. A TOTAT.TY COMMITTED AND CONTROLLED WASTE STREAM.
3. TIPPING FEES TO BE INCREASED 89Z OVER THE NEXT TWO YEARS OR LESS.
We urge that you and the members of THE CITY COUNCIL commit only 50% of
the waste stream, now. In a short five months the entire picture could change.
Approval to expand the SAN MARCOS LANDFILL MAY NOT BE APPROVED. Rest assured
tipping fee's will go up more dramatically than the announced increase of 54%,
from $28.00 per ton to $43.00 per ton in order to insure all technical details
of closure. This expenditure is estimated to cost more than SIXTY TO EIGHTY
MILLION DOLLARS.
AGhNDA ITEM NO 4
Bay Cities does not feel it is necessary to amend the current Franchise
Agreement to include exclusive rights for the collection and hauling of
construction debris in Roll -Off Containers in order to guarantee ENFORCEMENT
OF FLOW CONTROL. We believe this is clearly stated in the INTERIM AGREEMENT
page 3, Article 3.4 as approved by the the STEERING COMMITTEE on May 11, 1993.
The Mayor and City Council in their wisdom, (CHOSE NOT) to include the
collection and hauling of construction debris in Roll -Off Containers in the
revisions to THE FRANCHISE - Section 17, Exclusive Contract page 10 and
page 11 in July of 1990, Agenda Item No. 9. Why:; to assure some level of
competitive pricing for the collection and removal of construction debris
related to planned solid growth and expansion for the City's future.
4
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AGENDA ITEM NO. 7
URGENCY ORDINANCE
This companion Agenda Item indicates an Urgency Ordinance is required
to ammend the existing Franchise in order to meet the City's contractural
obligations, incorporating construction debris "in the definition of rubbish."
Bay Cities feels this is not necessary at this time. Responsible haulers
have been and I am sure will continue to provide licensed Contractors working
in National City, competitive rates for collection and removal of construction
debris in ROLL -OFF CONTAINERS and to be cost effective the hauler would use a
County Landfill. I am sure your Waste Audit indicates a maximum of 5 - 8% of
the generated Waste Stream represents construction debris.
These are weighty matters that warrant additional review and discussions
before final decisions on all the issues are made. As a member of the National
City Business Community we are very concerned regarding the overall impact of
the two Agenda Items and Resolutions on our existing business and future
opportunities in our City.
Bay Cities respectfully requests that Agenda Item No. 4 and Agenda Item
No. 7 be pulled from the Agenda for the regular City Council Meeting Tuesday,
May 25, 1993 and carried over to the next regularly scheduled Council Meeting.
Sincerely,
BAY CITIES SERVICES, INC.
�d1 f
A. J. Moore Jr.
General Manager
AJM/nk
PACIFIC DISPOSAL, INC,
1991/2 Mace Street
Chula Vista, CA 92011
(619) 221-8060
Fax: (619) 476-0768
MAYOR GEORGE WATERS
CRY OF NATIONAL CTiY
DEAR MAYOR WATERS
MAY 25, 1993
R HAS COME TO OUR AT1INTION THAT THE CRY INTENDS TO GRANT TO EDCO DISPOSAL THE
EXCLUSIVE RIGHT TO SERVICE BOTH HOMEOWNERS AND CONTRACTORS WITH ROLL -OFF SERVICE
IN YOUR CRY. 1 FOR ONE FIND THIS TYPE OF ACTION UNFAIR TO NOT ONLY MYSELF AS A
BUSINESSMAN IN THE WASTE DISPOSAL BUSINESS BUT TO CONTRACTORS AND RESIDENCES WE
CURRENTLY SERVICE AS WELL
WE ARE A SMALL COMPANY THAT PRIDE OURSELF IN GIVING OUR CUSTOMERS, BE R
HOMEOWNERS,CONTRACTORS OR BUILDERS GOOD SERVICE AT A FAIR PRICE. WE HAVE PROVIDED
SERVICE IN YOUR CITY FOR 5 YEARS AND HAVE NOT HAD ONE COMPLAINT BY A CUSTOMER OR
CITY AGENCY. WE HAVE PROVIDED AT NO CHARGE, ROLL -OFF CONTAINERS 70 THE CHRISTMAS
IN JULY PROGRAM,THE BOYS CLUB OF NATIONAL CITY, THE NATIONAL CRY LIONS CLUB AND THE
IOWANIS CLUB. WE ALSO OFFER DISCOUNTS TO SENIOR CITIZENS AND ALL NON-PROFIT
ORGANIZATIONS.
THIS NEW ORDINANCE WILL ELIMINATE CUSTOMERS FROM SHOPPING AROUND TO GET THE
SERVICE THEY DEMAND AND WILL ALSO STOP ANY NEGOTIATIONS AS FAR AS PRICE IS
CONCERNED.
THE BOTTOM UNE IS THAT IN THESE TROUBLED ECONOMIC TIMES WE NEED TO NOT ONLY
CREATE SPIRITED COMPETITION TO KEEP PRICES DOWN WE NEED TO HAVE THE ABILITY TO
WORK WITH OUR CUSTOMERS AS MANY OF THEM HAVE SPECIAL NEEDS THAT WE PREFORM FOR
THEM IN ORDER 70 KEEP COSTS DOWN AND THEIR EMPLOYEES WORKING.
JORGE 11OLLAND ESIDENT
PACIFIC DISPOSAL, INC
PA IFIC NON-FERROUS, INC.
THESE ARE THE MAJOR POINTS 1 SEE THAT STAFF HAS NOT FULLY EXPLORED ALTERNATIVES
TO, OR DO NOT COMPLETELY UNDERSTAND THE IMPACT TO THE CITIZENS AND BUSINESS
COMMUNITY.
1. AS PER THE PRESENT FRANCHISE AGREEMENT THERE IS NO RATE SCHEDULE PRESENTLY IN
PLACE THAT COVERS ROLL -OFF SERVICE IN THE CITY OF NATIONAL CITY, MEANING THAT IF THIS
URGENCY CONSENT CALENDAR ITEM IS ADOPTED COMPETITIVE PRICING AND SERVICE WILL BE
ELIMINATE.
2. THE COUNTY HAS IMPLEMENTED A REPORTING PROCESS WHEREBY ALL PERMITTED TRASH
HAULERS MUST REPORT THEIR TONNAGES, BE IT TRASH OR RECYCLABLE ITEMS TO THE COUNTY
ON AN ANNUAL BASIS BY CITY. THESE FIGURES ARE USED IN FIGURING THE TOTAL TONNAGES
GENERATED BY EACH CITY.
3. WHAT WILL BE THE IMPACT ON THE CITY IF THE WASTE FLOW AGREEMENT IS NOT SIGNED
BY ALL THE MEMBER CITIES ?
4. THE CURRENT CONTRACTOR HAULS 95% OF ALL WASTE GENERATED WITHIN THE CITY NOW.
THE COUNTY IS ASKING FOR A 50% COMMITMENT AT THIS TIME, THEREFOR BY VIRTUE OF THE
FRANCHISE AGREEMENT YOU NOW HAVE FLOW CONTROL ON 95% OF YOUR WASTE STREAM,
WHICH UNDER CURRENT CONDITIONS MORE THAN SATISFIES THE PROPOSED COUNTY FLOW
CONTROL AND THE STATE MANDATED A.B. 939 REQUIREMENT.
5. PACIFIC DISPOSAL, INC IS THE ONLY WASTE HAULER THAT OWNS AND OPERATES A
INDEPENDENT WOOD RECYCLING FACILITY, THAT, UNLIKE THE COUNTY LANDFILL, RECYCLES
WOOD WASTES INTO COMPOST THAT QUALIFIES FOR 100% A.B. 939 CREDITS,WHERE THE
COUNTY LANDFILL IS TAKING 90% OF THE WOOD WASTE GENERATED FROM THE CITIES TO USE
AS FUEL FOR CO -GENERATION PLANTS THAT ONLY RECEIVES A 10% CREDIT TOWARDS YOUR
CITIES A.B. 939 REQUIREMENT.
6. YOU PROPOSE TO LIMIT THE CITIZENS OF NATIONAL CITY TO ONE CHOICE FOR ROLL -OFF
SERVICE. WE DON'T BELIEVE SUFFICIENT FACTS HAVE BEEN PRESENTED AT THIS TIME TO
WARRANT AN URGENCY CONSENT CALENDAR ITEM ON THIS ISSUE. ALSO IS THIS FAIR TO YOUR
CITIZENS?
7. I RESPECTIVELY ASK THAT YOU DELAY ACTION ON THESE MATTER UNTIL A FULL SET OF
FACTS CAN BE DEVELOPED THAT REFUTE OR SUPPORT THESE ACTIONS..
maa
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DEBRIS
BOX
(619) 231-6609
FAX 238-5725
1845 LOGAN AVENUE • SAN DIEGO, CALIFORNIA 92113
May 25, 1993
Mayor George H. Waters
City of National City
1243 National City Blvd.
National City, CA 91950
RE : Agenda Item No. 4, Resolution 93-63
Dear Mayor Waters;
As a supplier of roll -off trash box service to the construction
and demolition industry, I believe that extending the exclusive
contract with Edco Disposal Corporation to include "waste
material pertaining to building operations" (i.e., construction
debris) is not in the best interests of the City of National City
for the following reasons :
1) THE MEASURE IS UNNECESSARY TO ACHIEVE SOLID WASTE FLOW CONTROL
National City can require all trash haulers operating in the
City to commit to haul all non -recyclable solid waste to the
County landfill and to report on and certify such activity on
a periodic basis.
2) THE MEASURE WILL ADD COSTS TO TAXPAYERS AND PROPERTY OWNERS
Exclusive arrangements eliminate competition in price and
service for which the taxpayers and property owners of
National City will pay in the future. If you have any doubts,
please take a survey of contractors and property owners doing
work in other San Diego County trash hauling franchise cities
regarding pricing and/or service for trash hauling.
3) UNNECESSARY EXCLUSIVE AGREEMENTS ARE CONTRARY TO GOOD PUBLIC
POLICY
Good public_ policy promotes: competition; innovation; creation
of small business; adequate public discussion of issues
affecting the common good; and open bids where an Exclusive
Agreement is deemed to be in the best interests of the public.
Current State and Federal legislation and sentiment is geared
to encourage small business and foster competition and
innovation. Expansion of the existing Exclusive Agreement
would appear to be contrary to the trend of current public
policy.
DEB IS
BO
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NO
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IN
V
(619) 231-6609
FAX 238-5725
1845 LOGAN AVENUE • SAN DIEGO, CALIFORNIA 92113
There has been no adequate public discussion in National City
that an Exclusive Agreement is necessary to achieve the solid
waste flow to the County landfills, nor discussion of the
impact on small business to creating a monopoly arrangement.
There is no reason to tie the hauling of construction debris
to the general refuse hauling contract. There are many
companies that can offer this service and they should be
allowed to compete.
ALTERNATIVE PROPOSAL
1) Review the facts -
National City already exceeds the minimum 50% flow of solid
waste to the County landfill with the existing refuse hauling
arrangement.
Since the City currently exceeds the minimum landfill
requirement there is no reason to rush a vote on an Exclusive
Agreement.
All trash haulers operating in National City can be licensed
and required to use County landfills and to adequately report
and certify to such use.
2) Take action -
Require all trash haulers to be licensed for business in
National City.
Require all licensed trash haulers to use County landfills.
Require uniform reporting and attesting of all licensed trash
haulers.
I will sincerely appreciate your thoughtful consideration of the
issues.
Yours truly,
1
Gregg J. F;
U.S. Refuse Services, Inc.
4180 Ruffin Road, Ste. 110, San Diego, CA 92123 • Phone (619) 268-7081 Fax (619) 268-7080
May 24, 1993
George H. Waters, Mayor
George H. Eiser, III, City Attorney
Lori Anne Peoples, City Clerk
City of National City
RE: Council Agenda Statement
Agenda Item No. 4
Please accept this letter as proper notice of our disagreement
to your proposed action regarding the granting of a monopoly
to the Edco Corporation relating to waste removal services in
National City.
I sincerely doubt anyone has performed a price comparison survey
to find out what happens to the end user when there is only
one source for a particular service available. It has been
known for years in our industry that when a particular company
has the exclusive franchise rights the rates to those customers
are higher than to those customers when they must compete with
other businesses.
The great majority of the waste removed from
already hauled to the county landfill. This
designed to keep competition out of National
The other cities involved have not deemed it
this restriction in order to comply with the
accomplished.
We urge you to reconsider this matter as it will only benefit
one extremely large corporation and hurt numerous small
businesses.
National City is
measure was purely
City.
necessary to impose
mission being
Thank you for your consideration in this matter.
Dominick Di Vello
President
DD/cr
City of National City
Public Works Department
2100 Hoover Ave., National City, CA 91950-6599
(619) 336-4360
April 26, 1993
TO FINANCE DEPARTMENT
FROM PUBLIC WORKS DEPARTMENT
SUBJECT 2% FRANCHISE FEE EDCO
1. Contract calls for fee to jump from 2% to 5% the first
rate change, then increase 1% yearly there after.
2. First year, Council required rate to stay at 2% to hold
costs down.
3. For FY-93, original was prepared based upon 5%. Prior
to council meeting, I requested a rate proposal at 2%,
anticipating Council might lower, see EDCO 27 July
attached.
4. Not only did Council go for staying at 2%, but also
"negotiated a rate change to $11.10 for single family
as proposed by Mr. Burr; with the full revised rate
structure based upon the $11.10 SF rate to be submitted
and appended to the resolution. (See Minutes of
07/28/92).
5. EDCO provided the revised rate, clearly stating the 2%
fee inclusion (Edco 29 July 92). Such rate was
transmitted to City Clerk by my 07/29/92 attached.
CRW:jm
copy to: City Clerk
4\
C.R.\WILLIAMS, JR.
Publi Works Director
® Recycled Paper