HomeMy WebLinkAboutCC Resolution 10745 (MSS Refuse Rate Review)RESOLUTION 10745
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL AUTHORIZING THE EXECUTION OF AN AMENDMENT
TO THE AGREEMENT BETWEEN THE CITY OF SAN RAFAEL
AND MARIN SANITARY SERVICE TO SET MAXIMUM RATES
AND FEES FOR REFUSE AND RECYCLABLE MATERIAL
COLLECTION AND DISPOSAL SERVICES (32ND AMENDMENT
TO AGREEMENT) AND TO PROVIDE ADDITIONAL REFUSE AND
RECYCLING COLLECTION AND DISPOSAL SERVICES
The City Council of the City of San Rafael resolves as follows:
The Mayor and the City Clerk are hereby authorized to execute, on behalf of the City of
San Rafael, an amendment to the agreement between the City of San Rafael and Marin
Sanitary Service (the 32nd Amendment), a copy of which is attached hereto and
incorporated herein, which sets revised maximum rates and fees for refuse and
recyclable material collection and disposal services and which provides for additional
refuse and recycling collection and disposal services.
I, Jeanne M. Leoncini, Clerk of the City of San Rafael, hereby certify that the foregoing
Resolution was duly and regularly introduced and adopted at a regular meeting of the City
Council of the City of San Rafael, held on Monday, the 20th of November, 2000, by the
following vote, to wit:
AYES: Councilmembers: Cohen, Heller, Miller, Phillips & Mayor Boro
NOES: Councilmembers: None
ABSENT: Councilmembers: None
Je ne M. Leoncini, City Clerk
\\Sr fs1WSCommon\Council Material\Resolutions\2000\City\MSS Refuse Rates-11-2000.doc
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THIRTY-SECOND (32ND) AMENDMENT TO AGREEMENT
OF THE CITY OF SAN RAFAEL
WITH MARIN SANITARY SERVICE
The parties hereto are the CITY OF SAN RAFAEL, a municipal corporation
organized and existing under and by virtue of the laws of the State of California,
hereinafter referred to as "CITY" and MARIN SANITARY SERVICE, a California
corporation, hereinafter referred to as "COMPANY".
Recitals
WHEREAS, the parties have previously entered into a written Agreement
dated June 20, 1966 relating to the collection of all refuse from within the City of
San Rafael, and have previously amended the same Agreement pursuant to
written amendments dated October 6, 1969; June 24, 1971; May 15, 1972; June
17, 1974; January 17, 1977; January 2, 1979; January 21, 1980; October 6,
1980; July 6, 1981; August 19, 1982; January 17, 1983; September 6, 1983;
January 3, 1984; October 15, 1984; February 18, 1986; September 21, 1987;
February 1, 1988; April 17, 1989; May 15, 1989; February 5, 1990; March 5,
1990; January 22, 1991; January 21, 1992; December 19, 1994; June 15, 1995;
June 30, 1997, and July 6, 1998; and
WHEREAS, the parties now desire to further amend and modify the
Agreement, as amended, to provide for a new schedule of maximum rates and
fees for collection, disposal and additional services under the Agreement;
WHEREAS, CITY has determined that such further amendment and
modification is proper, is in the best interest of all citizens, and will promote public
health, safety and welfare;
NOW, THEREFORE, the parties mutually agree that the written
Agreement between the parties dated June 20, 1966 and the amendments to the
Agreement dated October 6, 1969; June 24, 1971; May 15, 1972; June 17, 1974;
January 17, 1977; January 2, 1979; January 21, 1980; October 6, 1980; July 6,
1981; August 19, 1982; January 17, 1983; September 6, 1983; January 3, 1984;
October 15, 1984; February 18, 1986; September 21, 1987; February 1, 1988;
April 17, 1989; May 15, 1989; February 5, 1990; March 5, 1990; January 22,
1991; January 21, 1992; December 19, 1994; June 15, 1995; June 30, 1997, and
July 6, 1998; shall be and the same are hereby amended and modified in the
following manner:
1. Section 3, page 3 of the original Agreement dated June 20, 1966, as
amended, which section details rates and charges. for services under the
Agreement, is hereby amended to read as is fully set forth in Exhibit "A",
which is incorporated herein by reference. .
2. Other than as specifically amended and modified herein, the original
Agreement between the parties (June 20, 1966) and the amendments thereto
are hereby ratified and confirmed to be and continue in full force and effect.
IN WITNESS, THEREFORE, the parties have
amendment to the Agreement, as amended, on theme
CITY OF SAN RAFAEL
AL& -Tr , Mayor'
Attest:
4.eAAA._ Jit_ ...
JeWNE M. LEONCINI, City Clerk
ley
PA
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hereby executed this
y of November, 2000.
\\SR FS1\ASCommon\Professional Contracts\2000\Marin San. Serv. 32nd - rev..doc
SERVICE
NO, President
CITY OF SAN RAFAEL
Effective 111/01
(rounded to nearest $.05)
Residential Service FLAT HILL
IResidential Can Service 1/1101 Rate
Can Size Monthly Amt of Inc
32 $16.20 $0.20
64 $32.40 $0.40
96 $48.60 $0.60
Addl Can $16.20 $0.20
Sr Rate Min Chg $11.45 $0.15
One Can of compacted garbage will be charged the two can rate
Distance 5'-50' $2.20
Distance over 50' (per 50' each can) $4.50
(Multi -Family Residential Service is one Can per unit -minimum 1
(Multi -Family Residential Box Service I Collections per week
EXHIBIT A
111101 Rate
Flat Hill
Monthly
Amt of Inc
Quarterly rate Quarterly_ Rate
$18,35
$0.25
$48.60
$55.05
$36.65
$0.45
$97.20
$109.95
$55.00
$0.70
$145.80
$165.00
$18.35
$0.25
$48.60
$55.05
$14.65
$0.20
$34.35
$43.95
10110112001
1 yard box * * $10205 $204.45 I $306.45
3 yard box $204.90 $370.50 $536.10
Commercial Service
I Commercial Container ServiceI Collections per Week
I Container Size I 1 2 3
10110112001
32
64
96
(Commercial Box Service
I Box Size IOn Call
4
$14.60 $29.20 $43.80 $58.40
$29.20 $58.40 $87.60 $116.80
$43.80 $87.60 $131.40 $175.20
Collections per week
1 2 3 4
Base Rate plus $2.20 per unit recycling
Base Rate plus $2.20 per unit recycling
101/01/2001 On Call I 1 2 3 4 51
1 cu yard** $102.05 $204.45 $306.45 $408.85 $510.90
3 cu yard $132.10 $204.90 $370.50 $536.10 $701.70 $867.25
5 cu yard $184.45 $316.15 $588.85 $861.50 $1,134.25 $1,406.90
10 cu yard $295.35 $528.95 $1,057.55 $1,586.80 $2,115.80 $2,644.75
18 cu yard $493.05 $846.10 $1,691.55 $2,538.20 $3,384.20 $4,230.30
01/01/2001
Lock Charges - single pickup $2.40 Box Rental
Lock Charges - weekly pickup $10.50 1 yard
Compacted refuse w/o recyclables $36.40 3 & 5 yard
Compacted refuse with recyclables $29.15 10 yard
Refuse per yard - per pickup M.1 $14.65 18 vard
6
$612.95
$1,032.85
$1,679.70
$3,173.65
$5,076.35
01/01/2001
$30.85
$38.40
$51.20
$102.55
Commercial Boxes exceeding 300 lbs. per cu yd filled with non-recyclables are subject to a tonnage surcharge @ $85.05 per ton
** no longer offered to new customers
Rates for "on call" boxes are based on no more than two empties per month
single
ection
$14.65
$46.85
$73.05
$122.05
$195.25
11/16/2000 Page 1 rate caics mss 2000
\k -H
FRANCHISORS OF
MARIN SANITARY SERVICE
Review of
Marin Sanitary Service's
2000 Rate Adjustment Calculation
Prepared. by-
HILTONTARNKOPF & HOBSON, LLC
2175 N. California Boulevard, #990
Walnut Creek, Ca 94596
925/977-6950
hfh-consultants.com
May 30, 2000
HILTON FARNKOPF & HOBSON, LLC
Advisory Services to
-- Municipal Management
2175 N. California Boulevard, Suite 990
Walnut Creek, California 94596
Telephone: 925/977-6950
Fax: 925/977-6955
www.hfh-consultants.com
May 30, 2000
Mr. Kenneth Nordhoff
Finance Director
City of San Rafael
1400 Fifth Avenue
P.O. Box 151560
San Rafael, CA 94915-1560
Mr. Alan Petrie
District Manager
Las Gallinas Sanitary District
300 Smith Ranch Road
San Rafael, CA 94903
Ms. jean Bonander
City Manager
City of Larkspur
420 Magnolia Avenue/City Hall
Larkspur, CA 94939
Mr: Rabi Elias
Director of Public Works
Town of Ross/Town Hall
P.O. Box 320
Ross, CA 94957
San Francisco
NewportBeach
Sacramento
Portland
Mr. Ned Ongaro Mr. Jeff Rawles
District Manager County of Marin
Ross Valley Sanitary District 10 N. San Pedro Road; Suite 1022'
2000 Larkspur Landing.Circle San Rafael, CA 94903-4155
Larkspur, CA 94939
Review of Marin Sanitary Services'
2000 Rate Adjustment Calculation
Dear Ms. Bonander and Messrs. Elias, Nordhoff, Ongaro, Petrie and Rawles:
This report documents our findings and recommendations from our review of
Marin Sanitary- Service's (MSS's) calculation of a 2.26% adjustment to it's solid
waste rates, which was submitted to the Cities of San Rafael and Larkspur, the
Town of Ross, the County of Marin, and the Las Gallinas and Ross Valley
Sanitary Districts (collectively referred to as "Franchisors'). -
INTRODUCTION
Based on our review of MSS's application, performed in accordance with the
Rate Index Methodology, we have calculated an increase of 0.49% to current
rates is necessary to compensate Marin Sanitary Service for its expenses and
Marin Sanitary Service " 1 Review of MSS Application
recycled 0 Paper
May 30, 2000
MSS Franchisors Group
Page 2
provide it the agreed-upon level of profit. This lower calculation is largely based
upon two adjustments to MSS's calculation.
1. The elimination of Officer Life Insurance expense of $129,636.
2. The elimination of the special adjustment to Fuel -and Oil expense of
$107,794.
BACKGROUND
The Rate Index Methodology was developed and approved in 1995. This
methodology was used to determine 1999 and 2000 rates, based on the projected
results of operations from 1998s review adjusted by certain indices (e.g.
consumer price index) and new projections of certain costs (e.g., disposal
expense) and revenues (e.g., collection rate -revenues).
The Franchisors engaged HF&H in March 2000 to perform a limited review of
MSS's application in accordance with the Rate Index Methodology. The scope of
that review is described in our engagement letter dated February 23, 2000.
FINDINGS
• Wages and Salaries Expense was projected for 2000 by multiplying 1999's
estimated wages and salaries expense by 1 plus the 4.40% change in the
San Francisco -Oakland Metropolitan Area Consumer Price Index, (Urbah'
Wage Earners) for the period December 1998 to December 1999. .
• Benefit Expense was projected for 2000 by multiplying 1999's estimated
benefit expense -by 1. plus 3.40% change in the Employment Cost Index -
Benefits (Private.. Industry Workers) for the period December 1998 to
December 1999.
• Disposal Expense was estimated for. 2000 using actual 1999 information
regarding tonnages with no expected disposal fee rate adjustment.
•. Equipment/Vehicle .Expense was estimated by multiplying 1999's
estimated equipment/vehicle expenses (other than fuel and oil) by 1 plus
the 2.80% change in the Consumer Price Transportation Index - Motor
Vehicle Maintenance and Repair for the period January 1999 to January
2000. Fuel and Oil expense was projected by multiplying 1999's estimated
amount by the 32.5% change in the Consumer Price Transportation Index
Marin Sanitary Service Review of MSS Application
May 30,.2000
MSS Franchisors Group
Page 3
- Motor Fuel. In addition, the Company included $107,794 for additional
fuel expense, based on three months of actual fuel expense extrapolated
for twelve. months. The additional fuel expense adjustment is not
consistent with the Rate Index Methodology. Therefore, we have reduced
the Company's projected Fuel and Oil expense by $107,794.
• Depreciation/Lease Expense is estimated to decline $109,085 or 9.61%
from 1999. This decline is mostly. due to the full depreciation of containers
acquired in 1992.
• Miscellaneous Expense was projected for 2000 by multiplying 1999's
actual miscellaneous expense by 1 plus the 4.20% change in the San
Francisco -Oakland Metropolitan Area Consumer Price Index (Urban
Consumers) for the period December 1998 to December 1999. In addition,
the Company included $129,636 for Officer Life Insurance expense. This
expense is unnecessary for the provision of service to MSS's customers.
Therefore, we have reduced miscellaneous expenses by $129,636.
• Operating Profit was calculated by dividing net operating expenses (not
including interest) by 90.5 % less total operating expenses. The result of
the above adjustment reduces operating profit.by $24,924.
• Interest costs are projected to decrease approximately $40,000 from 1999
or 6.94%: This is due to the decrease of the principal loan amounts.
•. Revenues, which include receipts- for collection and non -collection (i.e.,
non -franchised activity), were projected based on actual 1999 revenues.
Recommendation
Based on the adjusted calculations, HF&H has calculated. a 0.49% increase for
current services. Because of the modest amount of the adjustment and the
administrative effort involved in changing rates, we recommend that this
increase be deferred until next year (as was done last year when a modest rate
reduction was calculated). It is important to understated, in deferring this
increase, that it will add to the amount of any rate increase that may be necessary
next year. Such an increase may result from increased labor costs as well- as
continued increases in other expenses (e.g. fuel and oil).
Marin Sanitary Service Review of MSS Application
May 30, 2000
MSS Franchisors Group
Page 4
We appreciate the opportunity to again be of service to the Franchisors. Should
you have any questions, please call me' at (925) 977-6952.
Very truly yours,
HILTON FARNKOPF & HOBSON, LLC
151
Robert D. Hilton, CMC
President
Marin Sanitary Service Review of MSS Application
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