GREAT WESTERN RECLAMATION, INC.1976

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• REQUEST FOR COUNCIL ACTION PREPARED BY Management Analyst DATE OF COUNCIL ACTION DATE 10/31/75 PHONE 4040 SUBJECT SUPPLEMENTAL MONTHLY LABOR PAYMENT TO GREAT WESTERN RECLAMATION, INC. FOR REFUSE COLLECTION APPROVED al 4(224ww4/ DEPARTMENT HEAD CITY MANAGER CLERK OF THE COUNCIL RECOMMENDED ACTION It is recommended that the City Council provide no supplemental monthly labor payments to Great Western Reclamation, Inc. in excess of the semi-annual Consumer Price Index adjustments made in conformance with the existing exclusive contract until such time as the staff is pro- vided acceptable financial statements showing capital investments and profitability of Great Western Reclamation, Inc. CONCLUSION: The City needs to determine what effect the Consumer Price Index adjustments have had on Great Western's profitability in order to evaluate the equitability of this request for a supplemental monthly labor payment. The City has not received sufficient financial information to make this determination. In a letter to Great Western dated June 6, 1975, the following request was made: "To be able to judge what will be a fair and equitable adjustment we need the wage rates from 1971 to 1974 and related increases in fringe benefits. Associated with this, we also need to review your balance sheet statements for the same period." To date the City has received a portion of the wage data but none of the balance sheet statements. This information is necessary to determine to what extent the bi-annual Consumer Price Index rate increases have covered Great Western' s operating expenses. To be fair and equitable to Great Western Reclamation and to the City, it will be necessary to have Great Western submit a certified audit report, corporate tax return for the years 1971 through 1974, or other acceptable financial statements showing capital investments and profitability. With these statements, it can be determined to what extent the Consumer Price Index adjustments have met the operating expenses of Great Western Reclamation or to what extent they have not. Furthermore, with these statements , the staff can examine the equity of the contractor's request for supplemental monthly labor payments. COMPARISON WITH OTHER CITIES: A refuse collection survey (attached) was conducted to determine the base rate paid to refuse contractors of Orange County cities. The rates in this study apply only to residential col- lections. The cities of Costa Mesa, Huntington Beach, Anaheim, Buena Park, Fullerton, Orange plus the Sanitation District of Garden Grove were surveyed. Of the eight cities surveyed, Santa Ana ranks the third highest in the amount paid to the contractor for residential pick- up. The highest amount paid is in Costa Mesa at $2.13 and next is Huntington Beach at $1.92. The refuse contractor for Santa Ana states that one of the main factors why Santa Ana's ref- use rate should be higher than the surrounding cities of Anaheim and Orange is because their refuse contractors have access to Orange County transfer stations. A transfer station is a location where a refuse contractor can dump refuse without going to a county dump site. This saves the contractor travel time and mileage to a dump site. The transfer sites are located on level ground and this saves the contractor money on truck maintenance and tire wear. Transfer stations are located in the cities of Anaheim and Huntington Beach. Great Western states that it is allowed to take only 10% to 15% of its total refuse collection to a transfer station. Therefore, Great Western loses more time in the collection of refuse because of longer trips to the Orange County dump located in Coyote Canyon as compared to cities using the transfer stations. et.1 lo/y iC 2 y U m 2 7276-191C3