2002 AGN JUN 18 I28 - Laserfiche WebLink

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Item #28 CITY OF COLTON AGENDA REPORT Council Meeting of June 18, 2002 TO: Honorable Mayor and Council Members FROM: Al Holliman, Assistant City ManagerAP SUBJECT: Proposed Adjustment of Commercial and Residential Solid Waste Disposal Rates per the Agreement between the City of Colton and Taormina Industries LLC dated June 1, 1999 DATE: June 5, 2002 Prior to July 1996 the City of Colton provided residential municipal solid waste collection and disposal services and "light" commercial solid waste collection and disposal services to the community through the Refuse Division of the Public Works Department. Commercial services were provided by a variety of different contract solid waste haulers permitted by the City of Colton. At that time the rate for residential service was $18.40 per month. After entering into an agreement with Taormina Industries, LLC (Republic Services) in July, 1996, the residential rate was reduced to $15.96 per month. It remained at that level for five years until July 1, 2001 when it was increased to $16.67. Moderate annual increases were expected thereafter. The 1996 agreement with Taormina contained a "rate adjustment clause" that was based on two components: (1) the Tipping Fee Component and (2) the Service Fee Component. Changes in the Tipping Fee Component were (and still are) based on the average of all tipping fees paid by the hauler for disposing of refuse at permitted disposal or composting facilities. Changes in the Service Fee Component were (and still are) determined by changes in the Consumer Price Index for the Los Angeles — Riverside- Orange County Index Area ("CPP'). Simply stated, according to the adjustment clause stipulated in the agreement, the Tipping Fee Component will be adjusted over time to compensate for changes in the cost of the disposal of municipal solid waste into the County Landfill System (and the cost of the disposal of yard waste into a permitted composting facility), and the Service Fee Component will be adjusted over time to allow the contractor to continue to provide service under conditions where labor, equipment, and insurance costs are increasing. Although the agreement was amended on June 1, 1999 the formulaic relationship established in the rate adjustment clause of the contract remained essentially unchanged from the original 1996 agreement. DISCUSSION/ANALYSIS: Residential Service Rates The services provided for in the residential rate include solid waste collection and processing, yard waste collection and processing, recyclables collection and processing and bulky item collecting and processing. The City of Colton also collects a 15 % Franchise Fee which is effected by the adjustment clause.