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VIIIIWIhIh F <br /> REQUEST FOR COUNCIL ACTION <br /> PREPARED BY Ronald Wolford and Dennis Yata DATE OF COUNCIL ACTION <br /> DATE December 31 , 1975 PHONE 4931 <br /> SUBJECT REQUEST FOR EXTENSION OF CONTRACT <br /> PERIOD BY REFUSE COLLECTION CONTRACTOR, <br /> GREAT WESTERN RECLAMATION INC. <br /> APPROVED 14GC OI,.dw�a,.,1.( <br /> �J Qd <br /> DEPARTMENTREAD CITY AG CLERK OF THE COUNCIL <br /> RECOMMENDED ACTION <br /> It is recommended that the City Council announce its intention to extend the present <br /> refuse collection contract from October 31 , 1978 through October 31 , 1980 and set a <br /> public hearing to allow public participation on this matter. <br /> CONCLUSION <br /> The low level of customer complaints and a general appraisal of the contractor's <br /> performance indicate that the quality of service performed by the contractor is <br /> high. Great Western Reclamation has provided this service since 1963 and has <br /> performed exceptionally well even during two periods of labor crisis and one <br /> of serious fuel shortage. <br /> We have compared Santa Ana's costs and complaints with eight other cities in Southern <br /> California (see Exhibit B). Reducing the three cities ' cost who pick up twice weekly to <br /> a once weekly equivialent we get an average cost to the single family residence of <br /> $2.99 per month compared to Santa Ana's cost of $2.00 per month. Complaint levels <br /> run from 203 - 485 per month compared to Santa Ana's of 70 - 90 per month. These <br /> other cities collect with their own forces and Santa Ana's experience indicates <br /> that cost and quality of service can be maintained at acceptable levels through <br /> use of a private contractor. <br /> The most serious concern with extending the contract is the matter of determining <br /> an equitable rate of compensation. The contractor has requested an increase in the <br /> contract price beyond that provided in the contract by the U. S. Consumer Price Index. <br /> Their request is based on the wage settlement resulting from the strike of May 1975. <br /> Three methods of determining a fair price to be paid the contractor by the City are <br /> as follows: <br /> a . Rebid the contract allowing competition in the market place to establish an <br /> equitable price. The prevailing practice in California is to stay with one <br /> contractor for extended time periods. <br /> b. Contractor opens his financial records to the City so that determinations <br /> can be made through the auditing process of reasonable rates of return on in- <br /> vestment and reasonable profit levels. <br /> c. Compare the contractor' s price with those of other contractors serving municipalities <br /> in this vicinity. This is probably the least desirable method because the operations <br /> vary considerably from city to city. Such factors are population density, general <br /> design of the street system, distance from transfer stations , distance from <br /> disposal sites, etc. <br /> 0tuTIO <br /> (0) <br /> e <br /> l <br /> s_ g96 <br />