Minutes - Board - 2006-06-19 COSTA MESA SANITARY DISTRICT
MINUTES OF SPECIAL MEETING
JUNE 19, 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:
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June 19, 2006
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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
0 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
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June 19, 2006
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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. The Board agreed they would not give notice for the first four years (except
for cause), in effect giving a 10 year initial term that would revert to a six year
evergreen after four years passed.
13. 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 PersonneVEntity
Contract draft to CR&R Monday, June 26, 2006 Alan/CMSD
Comments from CR&R Monday, July 3, 2006 CR&R
Final Agreement & Monday, July 10,2006 Alan/CR&R
Signatures
CMSD Signatures Wednesday, July 12,2006 President Ferryman &
Regular Meeting Secretary Perry/CMSD
Payment to CMSD Deadline —July 17, 2006 CR&R
Rate Setting Meeting Monday, July 24, 2006 Board of Directors & Staff
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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.
410 414.r
Secretary. , Preside
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