GREAT WESTERN RECLAMATION, INC.1976

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Trash Contract Page 3 approximately $16,500 annually and should be accepted and, in fairness to the contractor, taken into consideration in reviewing his request for a supplemental rate increase at this time (reference commentary on amendment #9 below) . Few other cities provide for an annual automatic CPI rate adjustment, and none in our surveys provided for such an adjustment on a semi-annual basis . 6. The contractor' s offer to retain his current commercial bin rates at their present level until November 1, 1976 on condition the City provide for an annual automatic CPI adjustment in these rates thereafter is not supported by any justifying data, and should be denied. It has never been demonstrates how valuable the exclusive franchise on commercial collection is to the contractor' s overall business here, and it must be assumed that the monopoly protection afforded by the City contract is a significant asset. Currently, Santa Ana commercial bin rates are above the average. Using a three cubic yard bin as the basis for comparison, since this is the most common size, the seven largest Orange County cities were surveyed as to the cost of having this bin emptied 1 to 6 times per week. The survey is shown below: COMMERCIAL BIN RATES IN ORANGE COUNTY CITIES 3 Cubic Yard Bin Monthly Rental for Collection Frequency of Pickup Per Week 1 2 3 4 5 6 Costa Mesa $15 $20 $25 $30 $35 $40 Anaheim 25 35 Garden Grove (Sanitary District responsible for service) 15 22 30 37 44 51 Buena Park 19 27 35 43 51 59 Orange 21 26 31 37 42 Huntington Beach 22 27 32 37 42 47 Fullerton 22 28 34 40 45 51 Average - excluding Santa Ana 19 25 30 37 42 46 Santa Ana 23 29 35 41 47 53 Percent above average 21% 16% 17% 11% 12% 15% The City of Santa Ana is above the average bin rate in every case. The City of Costa Mesa and the Garden Grove Sanitary District do not regulate the price of commercial bin rates . The rates for Costa Mesa are from Costa Mesa Disposal and the rates for Garden Grove Sanitary District are from Garden Grove Commercial . Both of these agencies license refuse contractors to serve these areas . 7 . The contractor should be required to justify any request for an increase in commercial bin rates. One way to provide an equitable process for a rate increase would be to require the contractor to submit a formal request specifying the desired amount of increase, itemizing the specific reasons therefor, and attaching a certified audit of all his revenues and expenses in providing this service in the prior year, which in his opinion would jus- tify the amount of increase requested. The Council should set a public hear- ing on the increase to be held within 30 days of receipt of his request and direct staff to analyze his request and the justifying audit data. These data should be treated in a confidential manner to protect the contractor