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The reason for this memo is to seek direction from the Council on whether staff should <br />impose the $2500 liquidated damage to all three haulers or should an alternate option be <br />considered. It should be noted that the City Attorney has reviewed the contract language. <br />Mr. Filla has confirmed that we have the authority for reduced or waived damages. <br />Therefore, staff feels there are three options for the contract violation — <br />I . All three haulers should be billed the $2500 liquidated damage charge as set in the <br />contract for failure to notify the city of the reduction in tipping fee. <br />2. Charged only Waste Management and Gene's Disposal the $2500 liquidated <br />damage charge because their invoice for the January service was billed with the <br />higher tipping fee. Allied Waste Services would not be charged because their <br />invoice was billed at the correct tipping fee rate. <br />3. All three haulers should be charged a reduced liquidated damage calculated off of <br />a percentage of $2500 based on their service area. Additionally, I am proposing <br />as part of this option that Allied Waste be sent a breach of contract notification for <br />not sending an official notice of the reduction in tipping fees, but that the <br />liquidated damages collected be $0 given their January 2013 invoice was billed at <br />the correct rate. <br />This reduced rate was created by staff because although they did not violated the <br />tipping fee billing since 2007, the issue is that this contract does not have the <br />specific tipping fee rate and leaves it up to the hauler for notification to the City. <br />In 2007, the rate was known for all five years of that contract and that took the <br />burden off the hauler. This contract states that the rate can change (because the <br />County is not aware of what the upcoming rates would be) and that is similar to <br />the 2002 contract when they were required to make the adjustments accordingly. <br />If the Council agrees to the reduced damages the following would be the charges <br />by hauler: <br />Service Area Liquidated Damage <br />Gene's Disposal 1% $25 <br />Waste Management 41% $1025 <br />Allied Waste Services 58% $0 <br />4. All three haulers would be mailed a breach of contract notice warning notice, but <br />have the liquidated damage fee waived since this is the first violation of this <br />provision since it was implemented in 2007. This consideration is being given to <br />the haulers because the City was made aware of the reduced tipping fees by the <br />County at the end of 2012, but we also did not say anything to them. <br />One thing that staff feels the Council should be aware of is that this would not be the first <br />time the City has charged for liquidated damages. Over the past two contracts, Allied has <br />received three breach of contract notices for failure to follow service hours, failure to <br />properly notify resident of refusal to pick up, and failure to provide sufficient invoice. <br />Two of these were with damages charged for the violation. Waste Management has <br />