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HomeMy WebLinkAboutAgenda Report - May 16, 1984 (45)LETM RBCEIYID City Clerk Reimche presented the following letter which had FRMI SANITARY been received fmn Sanitary City Disposal, Inc. Council • CITY DISPOSAL directed that the matter be reviewed by Staff and be brought CCIVPANY RE back to the Council at the earliest possible date. FP..AMI ISE "Counc i l Mm be rs : With regard to the Franchise Contract matter set forth on the Ci,.) -junc i 1 agenda on May 16, 1984. I would like to summarize the basic principles to be discussed as follows: Sanitary City Disposal Curpany and its subsidiary conpanies California Waste Removal Systems and Sanco Disposal CmWny are providing solid waste collection and recovery services for the City of Lodi and the northern San Joaquin County Area. The Lodi co m mity. of course, is the largest contributor of solid waste. generating 85% of the total volume of the northern San Joaquin County are- As a result, or operation is �:atered around fulfilling the solid waste collection and recovery needs of the Lodi cconmity. In order to fulfill these needs. long-term planning is required for both operational and financial planning. However, our current agreement with the City of Lodi concludes in June of 1989. Consequently, this has hampered our ability to establish a long-term financial plan to meet the ongoing equipment needs. Therefore. Sanitary City Disposal Cmpany is requesting the City of Lodi to extend the term of the agreement between the City of Lodi and Sanitary City Disposal Company to the year 1994, with an option to the year 1999. In looking at the needs of Sanitary City Disposal Company in teams of its ability to pian on a long -tens basis, you must recognize a ma'or problem In its ability to acquire adequate financing. As you know. solid waste collection requires the use of highly mechanized equipnent of substantial cost.- The efficiency and level of service in its operation is directly effected by the condition of its equipment. 'Ihe average life of well-mintained equipment Is approximately seven years. Consequently. it is necessary for Sanitary City Disposal Company to replace equ-pmnt throughout its contract with the City. The problem of financing this equipment exists because amortization schedules for this type of equipment are based on life of five to seven years. Financial institutions look to the ongoing capabilities of our business when we seek financing. When we approach later years in our agreement with the City. financial institutions question our ability to meet pay -back schedules due to the termination date of the contract. In short. the contract termination date supersedes amortization -ichedules for the financing of our transfer station/resource recycling facility as well as replacement equipment. Therefore. in order to facilitat-e our, present and future financial obligations at the most favorable possible rate, it is our request that the term of the contract be extended to meet our wwrt-ization schedules. In Septenber. 1980. Sanitary City Disposal Corrpany, came before the City Council with a similar request for a contract extension. That request was not granted based upon the following reasons: "1. A transfer station has not been built and there- fore. any savings are only speculative at this t ime. 2. Until such time as a transfer station Is in operation, we do not know the effects on refuse collection service levels or the actual usage of such a facility by the public. 3. Financing of the transfer station has already been obtained and Mr. Vaccarezza is moving forward with construction. 4. The present contract is less than 2 years old, and it is absolutely premature to consider any modifications of that contract." Despite that decision, Sanitary City Disposal Company, moved forward to assume a 20 -year finarcial obligation to build a $1.5 million transfer station/resource recycling facility open to the general public. The facility opened to the general public on August 20, 1981, and has continuously operated seven days a week ever since. The net result to Sanitary City Disposal Co pmy and the City of Lodi has been a substantial reduction in the cost of labor. fuel. repair and maintenance as they relate to our solid waste collection system. More significant, however, is the broad use of the facility by the general public. In 1983, over 17,000 people us -A the transfer station facility as opposed to making th 22 -mike round trip to the Barney Lane Sanitary Landfill. Same of the benefits realized by the commmity in 1983 include: 1. A reduction of 391,000 miles of travel on city and county roads. 2. $90.000 in avoided transportation costs have been realized by the general public (based upon $.20 per mile) 3. A significant reduction in the environmental air pollution produced by the previously traveled distance. 4. Reduced litter and roadside Limping. 5. Diminished effect upon traffic conditions to and from the Harney Lane Landfill. Furthenmore. through Sanitary City Disposal Company's. Insight to incorporate into the system a buy-back recycling program and an intensive resource recovery program, we have been ogle to further enhance public and environmental well being. In 1983, 10,000 customers made use of the resource recoveryfrecycling program resulting in benefits to the eomnr.ity which include: 1. The generation of revenue in excess of $100,000 paid out to contmity youth programs, service clubs. Focal businesses and private individuals. 2. The recycling of over 5,000 tons of material back into the proeluct manufacturing cycle. This In turn conserves valuable netural resources as well as the additional energy required to produce the equivalent products from virgin resources. 3. The avoided cost in excess of $50,000 for the collection and transportation of these naterials. 4. The avoided cost of landfill disposal in excess of $25.000 realized by the citizens of Lodi end San Joaquin County. 5. The conservation of valuable !agricultural Iand, resulting from the reduced land space required. The departments within the City of Lodi have also realized the rewards of our collection, transfer and recovery efforts. In 1983, the City of Lodi entered into a five year agreement with Sanitary City Disposal Company to divert.. at no charge to the City. over 7,000 tons of leaf collection material out of the landfill and into our resource recovery program. In addition, the City of Lodi delivered to our facility. at no charge. 657 loads of solid waste weighing 2.262 tons. A conservative estimate (bared upon $.75 per mile) of the avoided cost of labor and transportation of solid waste alone exceeds $10,000 per year. Sanitary City Disposal for the past three years has also provided, at no direct cost to the City of Lodi. $12.000 per year worth of collection services to city owned facilities throughout our com comity. The long-range planning by Sanitary City Disposal to the 1960's and 1970's has become the reality of the 1980's --- a a reality that ben -:fits the entire corm mity by providing it with a cleaner, healthier and safer envirotimnt. It is, therefore, with the above thoughts in mind that I make myself, as a representative of Sanitary City Disposal Company, readily available to the Council or its Subcommittee for imnediate review of this approval im Your early consideration of the above proposal is appreciated. Respect fu Iy. s/Devid Vaccarezza Cenera i Manager" 0 So ian,b cit'i avolw M& May 14, 1984 Honorable Mayor and Members of the City Council City of Lodi - City Hail 221 West Pine Street Lodi, Ca-lifornia 95240 Council Members: With regard to the Franchise Contract matter set forth on the City Council agenda on Hay 16, 1984, I would like to summarize the basic principles to be discussed as follows: Sanitary City Disposal Company and its subsidiary companies California Waste Removal Systems and Sanco Disposal Coup -any are providing solidwaste collection and recovery services for the City of Lodi a-nd the northern San Joaquin County area. The Lodi community, of course. is the largest contributor of solid waste, generating 85% of the total volume of the northern San Joaquin County area. As a result, our operation is centered around fulfilling the solid waste collection an: recovery needs of the Lodi community. In order to fulfill these needs, long-term planning is required for both operational and financial planning. However. our current agreement with the City of Lodi concludes in ,June of 1989.`Consequently, this has hampered our ability to establish a long-term financial plan to meet the ongoing equipment needs. Therefore, Sanitary City Disposal Company is requesting the City of Lodi to extend the term of the agreement between the City of Lodi and Sanitary City Disposal Company to the year 1994, with an option to the year 1999. In looking at the needs of Sanitary City Disposal Company in terms of its Ability to plan on a long-term basis, you must recognize a major problem in its ability to acquire adequate financing. As you know, solid waste collection requires the use of highly raechanized equipment of substantial cost. The efficiency and level of service in its operation is directly effected by the condition of its equipment. 1333 Eost Turner !'food / Post Office Box 319 / tr.di, Cal ifornio 95241 / (209)369-8274 0 0 The average life of well-maintained equipment is approximately seven years. Consequently, it is necessary for Sanitary City Disposal Company to replace equipment throughout its contract with the City. The problem of financing this equipment exists because amortization schedules for this type of equipment are based on life of five to seven years. Financial institutions look to the ongoing capabilities of our business when we seek financing. When we approach later years in our, agreement with the City, financial institutions question our abilty to meet pay -back schedules due to the termination date of the contract. In short, the contract termination date supersedes amortization schedules for the financing of our transfer station/resource recycling facility as well as replacement equipment. Therefore, in order to facilitate our present and future financial obligations at the most favorable possible rate, it is our request that the term of the contract be extended to meet our amortization schedules. In September, 1980, Sanitary City Disposal Company came before the City Council with a similar request for a contract extension. That request was not granted based upon the following reasons: "1. A transfer station has not been built and therefore, any savings are only speculative at this time. 2. Until such time as a transfer station is in operation, we do not know the effects on refuse collection service levels or the actual usage of such a facility by the public. 3. Financing of the transfer station has already been obtained and Mr.. Vaccarezza is moving forward with construction. 4. The present contract is less than 2 years old and it is absolutely premature to consider any modifications of that contract." Despite that decision, Sanitary City Disposal Company moved forward to assume a 20 -year financial obligation to build a $1.5 million transfer station/resource recycling facility open to the general public. The facility opened to the general public on August 20, 1981, and has continuously operated seven days a week ever since. The net result to Sanitary City Disposal Company and the City of Lodi has been a substantial reduction it the cost of labor, fuel, repair and maintenance as they relate to our solid waste collection system. -2- 9 More significant, however, is the broad use of the facility by the general public. In 1983, over 27,000 people used the transfer station facility as opposed to making the 22 -mile round trip to the Harney Lane Sanitary Landfill. Some of the benefits realized by the community in 1983 includes 1. A reduction of 391,000 miles of travel on city and county roads. 2. $90,000 in avoided transportation costs have been realized by the general public (based upon ;.20 per mile). 3. A significant reduction in the environmontal air pollution produced by the previously traveled distance. 4. Reduced litter and roadside dumping. 5. Diminished effect upon traffic conditions to and from the Harney Lane Landfill. Furthermore, through Sanitary City Disposal Company's insight incorporate into the system a buy-back recycling program and an intensive resource recovery program, we have been able to further enhance public and environmental well being. In 1983, 10,000 customers made use of the resource recovery/recycling program resulting in benefits to the community which include: 1. The generation of revenue in excess of =1000000 paid out to community youth programs, service clubs, local businesses and private individuals. 2. The recycling of over 5,000 tons of material back into the product manufacturing cycle. This in turn conserves valuable natural resources as well as the additional energy required to produce the equivalent products from virgin resources. 3. The avoided cost in excess of $50,000 for the collection and transportation of these materials. 4. The avoided coat of landfill disposal in excess of $25,000 realized by the citizens of Lodi and San Joaquin County. 5. The conservation of valuable agricultural land, resulting from the reduced land space required. 5-a to The departments within the City of Lodi haTe also realized the rewards of our collection, transfer and recovery efforts. In 1983, the City of Lodi entered into a five year agreement with Sanitary City Disposal Company to divert, at no charge to the City, over 7,000 tons Of leaf collection material out of the landfill and into our resource recovery program. In addition, the City of Lodi delivered to our facility, at no charge, 657 loads of solid waste weighing 2,2`62 to na. A conservative estimate (based upon $.75 per mile) of the avoided cost of labor and transportation of solid waste alone exceeds $10,000 per year. Sanitary City Disposal for the past three years has also provided, at no direct cost to the City of Lodi, $12,000 per year worth of collection services to city owned facilities throughout our community. The long-range planning by Sanitary Cite Disposal in the 1960's and 1970's has become the reality of the 1980's --- a reality that benefits the entire community by providing it with a cleaner. healthier and safer environment. It is, therefore, with the above thoughts in mind that I make myself, as a representative of Sanitary City Disposal Company, readily available to the Council or its Subcommittee for immediate review of this approval. Your early consideration of the above proposal is appreciated. DV/ch cct Henry Glaves Jerry Glenn Respectful . avidd accaressa 'c a General Manager !LM CITY COUNCIL WALTER eATN". Mayor IAMIS A. MCCARTY. Mayor Pro Tem RKiMW L HUGHES BERT C. MJR/HY IAMES W. ►BACON. it. MW 147 CITY OF LODI CITY HALL, 221 WEST PINE STREET LODI. CALIFORNIA 95240 (209) 134-Sb34 January 12, 1980 Mr. Dave Vaccarezza Sanitary City Disposal Co. 1102 N. Cluff Avenue Lodi, CA 95240 Dear Mr. Vaccarezza: HENRY A. CLAVES. Jr. City Manager ALICE M. RE3IMCHE City Clerk RONALD M. STEIN City Attorney Following a report by Councilman Pinkerton regarding the recent meeting you had to consider Sanitary City Disposal Company's request for an extension of its franchise, Council concurred with the recommendation of its committee that the extension not be granted for the following reasonst 1. a transfer station has not been built and, therefore, any savings are only speculative at this time 2. until such time as a transfer station is in opera- tion, we do not know the effects on refuse collection service levels or the actual usage of such a facility by the public 3. financing of the transfer station has already been obtained and Mr. Vaccarezza is moving forward with construction 4. the present contract is less than 2 years old and it is absolutely premature to consider ,any modi- fications of that contract Should you have any questions regarding the Council's position on thus matter, please do not hesitate to call. Very truly yours, Alice M. Reimche City Clerk AR: dg