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r <br /> REQUEST FOR COUNCIL ACTION <br /> Page 2 <br /> team for their review in time for subsequent presentation to the City Council <br /> in May. On February, 28, the staff contacted Tom Blackman, Jr. , to ask about <br /> the progress of the preparation of their proposal . Their response was that <br /> they were still in the process of formulating the proposals but expected to <br /> have them back to the team in time for final presentation to the City Council <br /> in May. <br /> In May a letter was received from Great Western' s attorney, Rodger Howell , <br /> stating that it would now take longer to complete the proposal . Mr. Ortiz <br /> wrote to Mr. Howell on June 3, 1977 and asked, "As the lapse of time is of <br /> great concern to both parties , may we have a prompt response from you as to <br /> when you now expect to submit alternative bid proposals or if you desire to <br /> pursue another alternative?" A reply dated July 20, 1977 was received by Mr. <br /> Ortiz from SCA Services , Inc. , signed by Dick F. Chase, Sr. , Director, Western <br /> Region. Mr. Chase stated that he was responsible in representing the company <br /> in negotiations for extending the Great Western Reclamation contract with the <br /> City of Santa Ana. <br /> On August 8 , Ron Wolford wrote to Dick Chase expressing concern about the <br /> delay in their submittal of proposals. Mr. Ortiz wrote to Dick Chase on <br /> October 6 in which he stated, " I think it is imperative that our negotiations <br /> be resumed and obviously receipt of your proposal is a vital prerequisite to <br /> those negotiatons . May we hear from you soon as to when we can expect to <br /> receive the information. " Ron Wolford also called Dick Chase that same day <br /> and was told that they would have the proposal to us by October 13. <br /> The material submitted consisted of a bound volume relating to the various <br /> aspects of the company, as well as a proposal to continue the contract under <br /> a CPI escalator approach. The contractor was told that we had asked for and <br /> had been promised fixed price proposals. Subsequent negotiation meetings <br /> were held on November 10 and on November 18 at which time the contractor <br /> presented a number of options for fixed price proposals . One would be for a <br /> contract in which they would have exclusive commercial bin service and one in <br /> which it would be open competition on bins . They also presented an option <br /> where the billing of individual customers would be transferred from the City <br /> to the contractor. Later negotiation meetings were held on November 30 and <br /> December 8 . <br /> The City Council , on July 18, 1977, approved the hiring of a consultant, <br /> Ralph Stone and Company, of Los Angeles to study the contractor' s operations, <br /> analyse his proposals, and act as an advisor to the City with respect to the <br /> negotiations . The assistance provided by Mr. Stone and his staff has been <br /> most helpful to the City' s negotiating team throughout the process . <br /> ANALYSIS <br /> Option "A, " preferred by SCA' s team, is the CPI approach with a re-open clause <br /> if labor or other costs escalate beyond certain levels . We have been notified <br /> by the federal government that the Consumer Price Index is being drastically <br /> altered and in the future will consist of two different indices . We have <br /> written to the San Francisco office of the Department of Labor asking for <br /> materials which they have available for parties who use the CPI in escalator <br /> or other contractual agreements . It appears that it is going to become more <br /> difficult to use the CPI for the purpose for which we have traditionally used <br /> it in adjusting trash collection contract prices . <br /> Options "B" and "C" provide for fixed payments for three years on a five-year <br /> contract with rates to be negotiated for the final two years. Both options <br /> have re-open clauses if labor or other costs escalate beyond certain levels. <br /> Option "D" gives the City the option to turn customer billing to over the <br /> contractor. The cost of $348,439 for the first three years makes this too <br /> expensive and the City team feels that present City billing should continue . <br /> Option "E" relates to conversion of the payment unit from the water meter to <br /> a service unit. There is general agreement between the two teams that this <br /> is entirely feasible and could be accomplished with little disruption in <br /> present payment procedures . <br /> 2 <br />