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Minutes - Board - 2006-06-19 (2)• r� l.J COSTA MESA SANITARY DISTRICT MINUTES OF SPECIAL MEETING JUNE 195 2006 The Costa Mesa Sanitary District held a Special Meeting at 6:00 p. m. on June 19, 2006 at 628 W. 19th Street, Costa Mesa. Directors Present: James, Ferryman, Greg Woodside, Art Perry, Arlene Schafer, Dan Worthington Staff Present: Robin B. Hamers, Manager /District Engineer; Tom Fauth, Assistant Manager; Joan Revak, Board Secretary/Program Manager /Clerk of the District; Sherry Kallab, Accountant; Wendy Davis, Treasurer; Alan Burns, General Counsel Others Present: David Ronnenberg George Lazaruk President, CR &R Vice President, CR &R 11292 Western Avenue Contract Administration Stanton, CA 90680 Joyce Amato Dean Rufffridge Chief Financial Officer Senior Vice President, Solid Waste CR &R CR &R President Ferryman called the meeting to order at 6:00,p. m. Director Perry led the Pledge of Allegiance. Director Woodside gave the Invocation. TRASH COLLECTION PROGRAM PRELIMINARY 2006 -2007 TRASH COLLECTION PROGRAM BUDGET Discussion was held on finalizing the Agreement between the Costa Mesa Sanitary District and CR &R and the following negotiating points: • Minutes of Special Meeting June 19, 2006 Page 2 1. CR Transfer and Costa Mesa Disposal agree to forgo their 3% increases this year in order to freeze their rates for the 2006 -2007 fiscal year. 2. In subsequent years, CR &R agrees not to ask for an increase unless the granting of such an increase will not increase the District's overall trash collection rate to its residents beyond the "second highest" of all Orange County cities with the goal to be the Orange County "average ". 3. The "rates" used for the calculations shall be those established in the CMSD spreadsheet survey, as the same may be modified from year to year, with calls made to those agencies to anticipate their increases for the forthcoming year. 4. CR &R's rates shall be the following: • Trash pickup for $9.1554 per resident per month • Recycling at the rate of $41.22 per ton, plus landfill charge of $11 /ton 5. Thereafter increases may be allowed in future years based on CPI increases subject to the further limitation that CPI increases shall be capped at 3% per • year with a cumulative cap of 16% over six years. 6. CR &R agrees to buy all of the existing trash containers from the District at the agreed upon price of $2.2 million, which was the initial purchase plus $210,000 for additional purchased containers less average depreciation based on years of service of the existing cans which the parties have agreed upon equals $615,000 for a total price of $1,795,000. 7. Said payment shall be made to District by July 17, 2006 and District will hold said funds in trust until the District can deliver ownership of the containers to CR &R. 8. District to transfer title to containers and all warranties to CR &R. 9. CR &R to provide District with a surety bond or other security (including lien rights) that it will provide the containers to District's customers for at least the next ten years. 10. CR &R shall take over all container management and shall provide replacement containers at a charge equal to the cost of the container. 11. District shall implement a variable container charge in addition to its basic • service that provides two containers for a base rate to be collected on the annual assessment roll. Each customer shall, therefore, be entitled to the • C] is Minutes of Special Meeting June 19, 2006 Page 3 collection of two containers as consideration for payment of their annual charge on the assessment roll. Over and above said amount, CR &R may charge, with District's consent, a rate of $8 per month for each additional container. Billing and collection for said additional containers shall be provided by CR &R. Revenue generated by said extra charge shall be the District's sole property and shall be used at the discretion of the District. The first year, CR &R is entitled to 90% of the revenue with the District retaining 10 %. The basic level of service will now be defined as two 60 gallon containers with a charge for third container. Anyone who currently has two 90 gallon containers will be "grandfathered" in and will not have a rate adjustment until their service is modified. Anyone starting new service will have two 60 gallon containers. An independent bonded third party billing service may be utilized for billing at District's discretion. 12. In consideration of Contractor's purchase of the containers from District, District agrees that if District terminates the contract for any reason before the expiration of ten years from the effective date of this agreement, District guarantees that it will repay CR &R for the depreciated value of the containers in the same manner as described above. Upon payment, CR &R shall transfer title and all warranties back to District. The following is a timeline for the Contract: Deadline for signed Contract and $$ paid: July 17, 2006 Event Date Contract draft to CR &R Monday, June 26, 2006 Comments from CR &R Final Agreement & Signatures CMSD Signatures Payment to CMSD Rate Setting Meeting Monday, July 3, 2006 Monday, July 10,2006 Wednesday, July 12,2006 Regular Meeting Deadline — July 17, 2006 Monday, July 24, 2006 Personnel/Entity Alan /CMSD CR &R Alan /CR &R President Ferryman & Secretary Perry/CMSD CR &R Board of Directors & Staff I Minutes of Special Meeting June 19, 2006 • Page 4 The regular July Board of Directors meeting was rescheduled to Wednesday, July 12, 2006. X. PUBLIC COMMENTS There were no public comments. XI. ADJOURNMENT President Ferryman adjourned the meeting at 7:30 p.m. Secretary • President