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REQUEST FOR COUNCIL ACTION <br /> Page 3 <br /> The City team asked for another fixed price proposal for residential collection <br /> along with an exclusive franchise on bins for multiple-family units but with <br /> open competition on commercial and industrial bins. This is known as Option <br /> "F." The contractor, however, does not have a breakdown on his commercial <br /> bin accounts between apartments and other customers and informs us that it <br /> will take at least until December 30 to present a price proposal for this <br /> option. It is obvious that since this option is less attractive to SCA than <br /> Option "B" but more so than Option "C, " the cost will be somewhere between <br /> those two. <br /> There may be arguments aaainst open bin competition such as the large numbers <br /> of trucks running around the City owned by different companies servicing <br /> bins. The fact is that the same number of trucks will be used but may not be <br /> owned by only one company. Cities in Orange County where bin service is open <br /> competition are Costa Mesa, Garden Grove, Newport Beach, and in. Irvine <br /> for industrial users, This method operates without anv <br /> major problems in these cities; the bin service is a private transaction <br /> between one business and another without government intervention. The pres- <br /> ence of trucks servicing bins are a minute problem compared with the large <br /> number of trucks serving most businesses and industries in the delivery and <br /> shipment of merchandise or products. <br /> • <br /> The greatest amount of criticism of our present program on bin service is the <br /> high cost as compared with rates in other cities. The contractor admits that <br /> the bin revenues in Santa Ana provide a partial subsidy for the residential <br /> collection. The City team feels that each sector of the community should <br /> stand on its own and pay its way with respect to trash collection service . <br /> SCA' s proposals under Options "A" and "B," where an exclusive bin franchise <br /> is involved , include sharp increases in bin service on top of an already high <br /> price . <br /> A summary of the contractor' s proposals follows : <br /> OPTION "A" - C.P. I. Escalator Method <br /> 1. $2. 29 or 7% increase 1/1/78 . <br /> 2. Annual CPI adjustments on January 1 each year. <br /> 3. Special adjustments if labor costs increase more than 150% of CPI <br /> increase over past 3 years , or if transfer stations or disposal <br /> sites are relocated . <br /> 4. 4. 7% increase in bin rates 1/1/78 and annual CPI adjustments . <br /> 5. 5 year contract. <br /> 6. Estimated 3 year payment $3 ,719 ,771 at 7% CPI increase per year. <br /> OPTION "B" - Three Year Constant Rate, Exclusive Franchise on Bin Service <br /> 1. Total compensation of $1, 236, 967 . 20 annually. <br /> 2. 10% increase in bin rates . <br /> 3. Special adjustments if labor costs increase more than 150% of CPI <br /> increase over past 3 years, or if transfer stations or disposal <br /> sites are relocated, or if CPI increase exceeds 10% per annum. <br /> 4. Prices fixed for 3 years , renegotiable for last 2 years . <br /> 5. 5 year contract. <br /> 6. Fixed 3 year payment $3 ,710 ,901 . <br /> OPTION "C" - Three Year Constant Rate, Open Competition on Bin Service <br /> 1. Total compensation of $1 , 379, 316 . 60 annually. <br /> 2. Price fixed for 3 years, renegotiable for last 2 years. <br /> 3. Special admustments if labor costs increase more than 150% of CPI <br /> increase over past 3 years , or if transfer stations or disposal <br /> sites are relocated, or if CPI increase exceeds 10% per annum. <br /> 4 . 5 year contract. <br /> 5. Fixed 3 year payment $4 ,137 ,950. <br /> OPTION "D" - Contractor Billing Instead of City <br /> 1 . Adds cost of $0 . 23 per month per account . <br /> 2. Adds cost of one time only $0 . 25 per account set-up charge . <br /> 3. Estimated annual cost of $116 ,146 or $348 ,439 for 3 year pe Le • <br /> 3 <br />