GREAT WESTERN RECLAMATION, INC. A-86-204

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David Ream, City Manager 2 November 9, 1986 Consolidation of Collection and Disposal Costs The key feature of the proposed agreement, as mentioned in item 3 above, is the consolidation of the reimbursements to Great Western Reclamation of collection and disposal costs. Presently, Great Western Reclamation receives two checks from the City each month. One represents a reimbursement for curbside residential collection. This is funded by a $3.90 monthly refuse collection charge on the water bill. Disposal costs, consisting of gate fees for Great Western Reclamation trucks at the County landfills, are paid from invoices submitted monthly. These costs have been funded by a $1.05 monthly gate fee charge on the water bill. Under the present agreement, Great Western Reclamation's reimbursement from the City for disposal cost is limited to the gate fees charged by the County at the landfills. The proposed agreement removes that limitation and allows the disposal cost portions of the reimbursement rate to be determined by the six city average, thereby allowing Great Western Reclamation to use landfills or transfer stations or any legally authorized disposal site. With the pending closure of Coyote Canyon landfill, this flexibility is a necessity. The proposed agreement will obligate the City to reimburse Great Western Reclamation for collection and disposal services of $5.82 per water meter per month starting January 1, 1987. This amount would be subject to adjustment each July. Consistent with the present agreement, the reimbursement amount will be determined by a six-city average (Anaheim, Costa Mesa, Fullerton, Garden Grove, Huntington Beach, and Orange). The information on rates is gathered by Great Western Reclamation, verified by an auditor, and approved by the Executive Director of the Public Works Agency and City Council. Annual Rate Adjustment Each year, according to the present and proposed Agreements, the rates for residential and commercial refuse collection are subject to adjustment. A survey of the six specified cities is submitted by Great Western Reclamation and verified by the auditor. The average of refuse collection and disposal rates in these cities becomes the basis for the rate charged to each residential customer in Santa Ana. Commercial bin service rates are similarly established. Since July 1, 1985, residential customers in Santa Ana have been charged $3.90 a month for refuse collection and $1.05 for disposal, plus $.5S in administrative costs ($5.50 total). Deloitte, Haskins $ Sells has determined that the household refuse collection rate effective July 1, 1986, should have been $4.28 monthly. Under the terms of the agreement in effect now, the City is obligated to retroactively reimburse Great Western Reclamation that amount per month, per customer. (Great Western Reclamation is now being reimbursed $3.90 per month, per water bill. ) Disposal costs of $1.54 have also been determined effective January 1, 1987 for the six cities, resulting in a total cost of $5.82. 03011 207 ` -