Item #08 Onyx Term Extension
AGENDA ITEM COVER SHEET
Meeting Date: August 15, 2006
Item#-_B- -
Contact Name:
Contact Number:
Steve Krug
6002
Reviewed By:
Department Director:
City Manager:
~~~
Subject: Direction On Which Avenue to Pursue for the City's Commercial And Multi-Family
Solid Waste Collection Franchise Agreement With Onyx Waste Services
Background Summary:
On May 31,2006 and pursuant to the franchise agreement with Onyx Waste Services, both parties (City and Onyx)
should have agreed to extend the term of the agreement for two years or noticed each other of their intent to not renew
the contract at its' termination date. Onyx staff, now known as Veolia have met with city staff to discuss available
options to continue commercial solid waste operations in the city. Veolia has stated that the current rate structure will
not permit their company to continue operations with an acceptable profit margin, and they have asked for rate
increases of approximately 50 to 100% for commercial solid waste collection services. They are also requesting that the
terms include the option for a fuel surcharge formula (to be determined through negotiation) over the next two years
and a Consumer Price Index (CPI) based upon data from the Bureau of Labor and is generally between 3% and 4% in
the second year of the extension.
Although the window to request a rate increase has passed, the contract calls for the city and Veolia to negotiate an
amendment to the contract for up to 2 additional years. Discussions with other commercial waste entities has allowed
staff to conclude that Veolia's rate proposal is fair and would be less than the results of an RFP should one be
conducted at this time. Staff is asking the commission to provide direction per the options below:
I) approve an amendment to the agreement extending it for an additional 1 year term at the proposed rate structure
to include a fuel surcharge increase if necessary, or
2) approve an amendment to the agreement extending it for an additional 2 year term at the proposed rate structure
to include a fuel surcharge increase if necessary and CPI at the end of one year, or
3) continue with the same contractor with the proposed rate structure for a short term (approx. 3 months, on a
month to month basis) until the services can be re-bid, or
4) any other option the commission wishes to pursue
Issue:
What direction should City Commission give staff regarding the renegotiation of a Commercial Franchise Agreement
for Solid Waste?
Recommendations
Staff recommends approving the extension of the agreement with Onyx (Veolia) for a 2 year term with the proposed
rate structure increase and then re-bid the contract at the end of the new term extension.
Attachments:
Original franchise agreement with Onyx., proposed rate structure.
Financial Impact:
nfa.
Type of Item:
o Public Hearing
o Ordinance First Reading
o Ordinance First Reading
o Resolution
o Commission Approval
[8J Discussion & Direction
For Clerk's OeDf Use:
o Consent Agenda
o Public Hearing
o Regular Agenda
-0 Original Document/Contract Attached for Execution by City Clerk
o Original Document/Contract Held by Department for Execution
Reviewed by City Attorney
Reviewed by Finance Dept.
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