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Home My WebLink AboutII (A) 1. Request from IWS for a Rate Increase - Alfred T. Crump, Municipal Market Development, Browning-Ferris Industries/lWS AGENDA 3-7-95 Ocoee Item II A 1 a f:#y� J`s� RAYMOND M.BRENNER f4 o; GOO�` PUBLIC WORKS DIRECTOR 560 FLEWELLING AVE. OCOEE,FLORIDA 34761-2303 (407)877-8420 • FAX(407)656-8504 STAFF REPORT TO: The Honorable Mayor and Board of City Commissioners FROM: Ray Brenner, Public Works Directo DATE: March 2 , 1995 RE: Request from IWS for a rate increase ISSUE: Should the Honorable Mayor and Board of City Commissioners approve a rate increase to the Industrial Waste Service, Inc. ? BACKGROUND AND DISCUSSION: In October 1990, the City of Ocoee and the Industrial Waste Service Co. entered into a franchise agreement to collect all commercial , industrial and institutional solid waste. Section 14D of that agreement provides: The rates and charges quoted herein shall remain in effect for a minimum of two (2 ) years. Thereafter, on the anniversary date of this Agreement, either party may request a change in the rate schedules. Such requests must be supported by data relating to changes in the cost of service and the profitability of the enterprise. All rate changes must be approved by the City. Nothing contained herein shall be construed to obligate the City Commission to approve any increase in the rates set forth . Mr. Shapiro, Ms. Beamer, and I met with Charles Wilson, IWS General Manager and Al Crump, Municipal Market Development Manager, BFI to discuss a rate increase resulting from Orange County's rising landfill cost. Staff feels this rate increase is justified, however the provisions of the contract, as quoted above, are quite clear. Mr. Shapiro sent Mr. Charles Wilson a letter dated January 5 , 1995, that, in summary, acknowledged an increase in landfill tipping fees, however he addressed procedures for annual rate increase requests which occur on October 16th of each year (the anniversary date of the franchise agreement) . In the letter he advised IWS the city has decided not to consider requests for fee increases except on the anniversary date of the agreement. Attached is a copy of that letter for your review. OCOEE IS A RECYCLING COMMUNITY • Page 2 . The Honorable Mayor and Board of City Commissioners March 2, 1995 RECOMMENDATION: It is, therefore, staff's recommendation that the Honorable Mayor and Board of City Commissioners deny IWS's request for a rate increase pursuant to Section 14D of the franchise agreement. RB:jh attachment *************************************************************************** CITY OF OCOEE #402 COMMERCIAL WASTE RATES lx 2x 3x 4x 5x 6x Current 2yd 48. 04 86.53 135. 62 184 . 72 233 .82 278.68 Landfill inc. 1. 74 3 .46 5.20 6.93 8. 66 10.39 Proposed 49 .78 89.99 140. 82 191. 65 242 . 48 289.07 Current 3yd 55. 61 111. 22 163 . 65 216. 08 279. 12 331.55 Landfill inc. 2 . 60 5. 20 7.80 10. 39 12 .99 15.59 Proposed 58. 21 116. 42 171.45 226. 47 292 . 11 347. 14 Current 4yd 64 . 25 128.49 184.26 240. 02 316.99 372 .76 Landfill inc. 3 .46 6.93 10. 39 13 .85 17. 32 20.78 Proposed 67.71 135.42 194 . 65 253 .87 334 . 31 393 . 54 Current 6yd 83 . 10 166.20 249.83 333 .46 406.48 532. 55 Landfill inc. 5.20 10. 39 15.59 20.78 25.98 31. 17 Proposed 88. 30 176.49 265.42 354 .24 432 .46 563 .72 Current 8yd 110.98 221.97 322 .87 402 .56 535.29 689. 23 Landfill inc. 6.93 13 .85 20.78 27 .71 34 . 64 41. 57 Proposed 117 .91 235.82 343 . 65 430.27 569.93 730.80 Roll-Offs: 20 = $117, 30 = $127, 40 = $170, plus dump plus $31. 00 delivery charge; rental is pull price if not pulled lx Extra pick-ups - double dump - $31. 00 flat Special is $31. 00 = $4 . 65 yd Compactor - See francise agreement *************************************************************************** "CENTER OF GOOD LIVING -PRIDE OF WEST ORANGE" MAYOR• COMMISSIONER Ocoee S.SCOTT VANDERGRIFT 0 �'. • 0 COMMISSIONERS 2. ► = CITY OF OCOEE RUSTY JOHNSON a PAUL W.FOSTER v 150 N.LAKESHORE DRIVE SCOTT A.GLASS c' (V(' OCOEE,FLORIDA 31761-2258 JIM GLEASON � (407)656-2322 CM MANAGER Of G000 ELLIS SHAPIRO January 5, 1995 Mr. Charles Wilson Industrial Waste Service, Inc. 1099 Miller Drive Altamonte Springs, Florida 32701 Dear Mr. Wilson: The City has received your letter of December 20, 1994, requesting an increase in commercial solid waste collection rates. Section 14D of the Franchise Agreement between the City and IWS provides: The rates and charges quoted herein shall remain in effect for a minimum of two (2) years. Thereafter, on the anniversary date of this Agreement, either party may request a change in the rate schedules. Such requests must be supported by data relating to changes in the cost of service and the profitability of the enterprise. All rate changes must be approved the City. Nothing contained herein shall be construed to obligate the City Commission to approve any increase in the rates set forth in Exhibit "A" hereto. This section of the Franchise Agreement means that IWS only has the right to request a rate increase on October 16th (the anniversary date of the Agreement) of each year. Any other rate increases would require an amendment to the Contract. We understand that Orange County increased its landfill tipping fees. However, the Agreement between the City and IWS clearly spells out a procedure for an annual request for rate increases on October 16th of each year. The City will review any request for rate Mr. Charles Wilson January 5, 1995 Page 2 increases which is received pursuant to this procedure in the future but. The City has decided not to consider requests for fee increases except on the anniversary date of the Agreement. Sincerely, Ellis iii' cc: Ms. Montye.Beamer , Mt'a Ray Brenner Paul E. Rosenthal, Esq., City Attorney • 114 Recycled paper 0 BROWNING-FERRIS INDUSTRIES NORTHERN FLORIDA DIVISION February 15, 1995 Mr. Ellis Shapiro, City Manager City of Ocoee 150 N. Lakeshore Drive Ocoee, Florida 34761 Re: Orange County Landfill Tipping Fee Increase Dear Mr. Shapiro: Confirming our recent telephone conversation, we respectfully ask to be placed on the Commission agenda and be heard by the Commissioners regarding our request for a price increase brought about by an increase in tipping fees at the Orange County Landfill. Although the contract with the City of Ocoee allows for the consideration of rate increases on the anniversary date of the contract, it does not distinguish between cost of living increases and landfill increases. Typically, contracts for refuse collection allow the Contractor to "pass through" to the customer increases in tipping fees. Unfortunately, when we elected not to request an increase in October, we had no way of knowing an increase from Orange County was imminent. Once our appearance before the Commission is scheduled, we will provide for you and each of the Commissioners backup to support our request. We appreciate very much the opportunity to provide commercial service within the City of Ocoee and hope to retain the business. We look forward to the Commission's favorable consideration of our request. Sincerely, 41eafr7V(44-y----> Alfred T. Crump Municipal Market Development Northern Florida Division 254 W. KEENE ROAD • APOPKA, FLORIDA 32703 • (407) 880-2100 • FAX: (407) 889-3902 ® Recycled paper 0 • HFB Waste Systems- BROWNING-FERRIS INDUSTRIES February 28 , 1995 Mr. Ellis Shapiro, City Manager City of Ocoee 150 N. Lakeshore Drive Ocoee , Florida 34761 Re: Orange County Landfill Tipping Fee Increase Dear Mr. Shapiro: Thank you for your letter of February 22 , 1995 . Enclosed you will find the back-up documents to support our request. We look forward to being heard by the City Commission. Sincerely, _ 1 Alfred T. Crump Municipal Market Development 1099 MILLER DRIVE (32701) • P.O. BOX 159007 • ALTAMONTE SPRINGS, FLORIDA 32715 • (407) 425-6600 • FAX: (407) 831-3226 ORANGE COUNTY LANDFILL TIPPING FEE INCREASE NEW RATE: $32.95 per ton OLD RATE: $30.65 INCREASE: $ 2.30 per ton OCOEE FRANCHISE FEE: 20% TOTAL: $ 2.88 per ton =2,000 pounds per ton $0.00144 per pound OCOEE COMMERCIAL REFUSE = 104 pounds per cubic yard 104 pounds per cubic yard x $0.00144 = $0.15 Landfill increase = $0.15 per cubic yard OCOEE COMMERCIAL REFUSE = 17,060 yards per month x .15 $2,559 Cost Increase per month OCOEE IS SHORT $511.80 per month CONTRACTOR IS SHORT $2,047.20 per month Landfill increase was effective 1-15-95 Contract expires 9-30-95 Remaining life of contract is 8.5 months 8.5 months x $511.80 = $4,350.30 to City 8.5 months x $2,047.20 = $17,401.20 to Contractor BF 1 TO RECOUP TIPPING FEE AS OF MARCH 15, 1995 TOTAL INCREASE: $21,751.50 REMAINING MONTHS: 6.50 INCREASE PER MONTH: $3,346.39 YARDS PER MONTH: 17,060 NET INCREASE PER YARD: $0.20 EXAMPLE AVERAGE CONTAINER SIZE : 5 . 5 CUBIC YARDS RATE INCREASE PER YARD : $ 0 . 20 TOTAL INCREASE : $ 1 . 10 PER WEEK BF 1 J "CENTER OF GOOD LIVING - PRIDE OF WEST ORANGE" MAYOR• COMMISSIONER Ocoee S. SCOTT VANDERGRIFT 0 >. P4 • COMMISSIONERSP4 = CITY OF OCOEE RUSTY JOHNSON PAUL W.FOSTER 150 N.LAKESHORE DRIVE SCOTT A.GLASS ��• C OCOEE,FLORIDA 34761-2258 JIM GLEASON js`�� (407)656-2322 CITY M ANAGER Of GOOD ELLIS SHAPIRO February 22, 1995 Mr. Alfred T. Crump Browning-Ferris Industries 254 W. Keene Road Apopka, FL 32703 Dear Mr. Crump: In accordance with your letter of February 15, 1995, which was received by the City on February 21, 1995, your request for a rate increase has been scheduled to be placed on the City Commission Agenda of March 7, 1995 at 7:30 p.m. To insure that the City Commission has ample time to study your request, I would ask that all back-up documents be given to the City no later than noon on Wednesday, March 1, 1995. If I may answer any questions, please feel free to call me at your convenience. Sincerely, 4 ,,hapiro ity Manager ES3:fdg:50 cc: Paul Rosenthal, City Attorney Montye Beamer, Administrative Services Director RA, Brenner, Public Works Director can Grafton, City Clerk