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City Council Regular Meeting Minutes July 8, 2014 Page 7 1 although it is difficult to know how much that decrease will be because of the variance in rates in 2 the current open hauling system and the unclear base price standards from which to determine 3 savings. He explained that when the haulers presented their prices, they used as a base price 4 standard what they referred to as "current market price" derived from an average price charged 5 to customers among all three haulers and factoring in their market share. He noted there is a 6 conflict with the current market price and what haulers have represented to staff in their 7 hauler/recycling license application forms that require a hauler to list the total fees charged. He 8 explained that City Code requires the licensee to file a schedule of proposed rates to be charged 9 during the license period and provide fourteen days' written notice to the City and its customers 10 of any change in rates and the City does not have any record of proposed changes in rates so the 11 City believes it can rely on the current listed prices on the application forms as the actual fees to 12 be charged. He stated the proposal eliminates the haulers' ability to compound additional fees 13 such as administrative fees, environmental fees, or fuel surcharges, adding that haulers currently 14 charge a fuel surcharge that is taxed and the proposal eliminates these extra fees. He pointed out 15 that because the City desires to handle the billing, the City will incur administrative costs that 16 will be passed through to residents, but this amount should remain low in comparison to current 17 fees and the Foth memo provides a very preliminary estimate of $1.74 per household per month. 18 19 City Manager Casey stated that staff believes the proposal meets the City's sustainability goals 20 pursuant to priority #11 (lessen environmental impacts) and the proposal suggests that the 21 haulers will work with the City on improving their efforts in these areas. He stated that City staff 22 agrees that administrative efficiency as well as allocating adequate City resources represent City - 23 focused priorities and agrees that the haulers did not meet this priority, but the proposal and 24 agreement provide a collaborative balance in light of changes inherent to organized collection 25 and the City's desire to manage billing. 26 27 City Attorney Whitman stated the proposal must include identified City priorities, the proposal 28 must reflect existing haulers maintaining their respective market share, and the initial organized 29 collection agreement must be for a period of three to seven years. He advised that the City's 30 priorities are included in the proposal, the haulers collaborated with each other to determine 31 market share and the haulers have represented to the City that the zoned collection routes reflect 32 the hauler's respective current market share, and the haulers have proposed an initial six year 33 term with three additional optional one year extensions. 34 35 City Manager Casey stated the haulers have indicated the six year initial term and additional one 36 year extensions is consistent with other municipal contracts and the haulers feel a longer contract 37 is necessary to develop a price scenario that benefits residents. He stated the City Council 38 should determine if the proposed prices are in fact truly beneficial to the City and its residents 39 and should also consider the implications of a longer term contract and whether to bind future 40 Councils to the contract. 41 42 Councilmember Stille asked if the exclusion of collection services for special events in the City 43 represented a significant dollar impact. 44 45 City Manager Casey replied that the City currently is paying that cost separately so the impact 46 would be revenue neutral. 47