02-28-2013 Council Agenda - Laserfiche WebLink

Home Browse Search

MAYOR 13111 I3lesencr COUNCIL Rick Montour John Reis Michael McGraw Shelly I3oss 515 Little Canada Road, Little Canada, MN 5 51 17 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www.ctlittle-canada.mn.us MEMORANDUM TO: Mayor Blesener & Members of the City Council FROM: Joel Hanson, City Administrator DATE: February 22, 2013 RE: Organized Collection Contract Violation Effective January 1, 2013, the tipping fee used to calculate the disposal fee in the organized collection contract went from $58 /ton charged in 2012 to $56 /ton. In 2012, the County was not aware of what tipping fee rates would be going forward. As a result, the City and haulers agreed to use $58 /ton as the basis for projecting the contract rates per year with the notation that if the tipping fees were changed the rates would be adjusted accordingly. Our contract with all the haulers requires them to notify the city within 30 days of any change in the tipping fee. The City in conversations with Ramsey County was told the tipping fee would be reduced effective January 1St. As of today, the City has not received any official notification from any of the haulers in the organized collection contract. Additionally, the City has received invoices from all three haulers for reimbursement of their January service charges. Gene's Disposal (received 2/5) and Waste Management (received 2/12) both billed the City at the 2012 higher tipping fee rate. Allied Waste Services (received 2/11) did bill at the current rate with the reduced tipping fee. The rate billed by hauler relative to tipping fee changes has been an issue over the years. In the 2002 contract, the City had several discussions with the haulers about rates not be reduced when tipping fees went down. At that time, the haulers were billing our residents. The City would find out about the overcharge after our residents had already been billed more than then they should have been. Additionally, the City had discovered that the haulers increased rates one time that was not approved by Council when tipping fee increased. As a result of these issues, the City took over billing the residents in the 2007 contract and included a liquidated damage for failure to notify the City of changes to the tipping fee. This was done to make the haulers more accountable. Contract language states "The City shall impose a $2,500 charge per billing cycle should the Contractor fail to notify the City, within 30 days of a reduction in tipping fees as required by this agreement. In addition to this charge, the Contractor shall also make a refund to the City in the next billing cycle of any amount overcharged." This liquidated damage provision is part of the 2012 contract.