GREAT WESTERN RECLAMATION, INC. A-76-42

Home Browse Search

Request For Council Action Refuse Collection Contract - Cont' d . 4 . Minimum Service Levels. There are mutual responsibilities for both the contractor and the City in this component. For the commercial service, the contractor must be responsive to legitimate service requests when bins are damaged or need cleaning or repainting . The City must require a mini- mum size and collection frequency that is adequate to prevent overloading and sanitation problems. In some cases of substandard multi-unit design, the City may have to require coordination in the collection schedule and container size . In the residential service , provision should be made for large item pickup. Details of these minimum service levels have yet to be defined . 5 . Revised Contract Wording. The present contract has been amended several times in the past and many provisions have been added rather than consol- idated . The contract should be reviewed by both legal representatives in order to consolidate, simplify, and clarify it. REMAINING ISSUE: The recent negotiations within the past 90 days have resulted in other mutually accepted facts about this situation. For example, the complaint history with the contractor supports the claim that their service has been generally good, while rate comparisons indicate that their charges have not been far from average. Neither side has been able to determine any "average" profit margins for the refuse industry. While the contractor' s pending labor negotiations with the Teamster' s Union for another three-year labor agreement lend another ingredient of uncertainty to the contract extension, it seems to be an issue that is capable of resolution if an appropriate "starting point" can be deter- mined for the first three years of our contract extension period . The search for a starting point that is fair to the City by not allowing the contractor to increase his profit margins, yet fair to the contractor by not depriving him of compensation for legitimate cost increases, without resorting to the expense and uncertain outcome of formal bidding , has been a most diff- icult search. The different approaches and procedures used by comparable cities have made fair comparisons on an "apples to apples" basis most compl- icated . Both sides feel that the viable options have now been narrowed to two basic approaches : the fixed rate proposal and the average rate proposal . Both are summarized and illustrated for your review on the attachments . CONCLUSIONS: Both sides will be available to discuss these proposals with Council on April 3 . While the specific steps in the formula for completely calculating the averages used in this approach have yet to be- written out for documentation, staff believes that our auditors will be able to verify the equity and accuracy of this approach best, and that it provides greater assurance for our residents of the fairness of future rates . RECOMMENDATION AND SUMMARY: Staff recommends that Council select the average rate proposal . After a selec- tion is made, financial representatives from both sides can document the formula for rate calculations for the first three years and establish a revised account- ing system for the contractor that will provide accountability for making future rate adjustments in conformance with this approach. The Director of Public Works will work with the contractor' s program representative to define minimum service levels, and the respective attorneys will rewrite the formal contract provisions . This process should result in a final written agreement in conformance with the provisions described above and the approach selected by Council within a period of 45 days. ms Enclosure: 1 . Fixed Rate Proposal 2 . Average Rate Proposal -256-