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HomeMy WebLinkAboutAgenda Report - August 1, 1984 (49)CX-CITY COUNCIL MEETING AUGUST 1, 1984 STAMS REP Hr As s i s t arrt City Manager G l em gave a brief s t a tats report on CN SANITARY CITY the Sanitary Gity Disposal Conpany. Inc.. rate increase DtSPC SAI. CUIPANY rm;uest . INC. ItATE I NCRFASE RFXX'I•:S'I- r -. s.. r 0qLa .�i0A'-YJkJ-1 all mi" May 11, 1984 Honorable Mayor and Members of the City Council City of Lodi - City Hall 221 West Pine Street Lodi, California 95240 Council Members: With regard to the Franchise Contract matter set forth an the City Council agenda on May 16, 198A, I would like to summarize the basic principles to be discussed as follows: Sanitary City Disposal Company s.n•d its subsidiary companies California Waste Removal Systems a -ad Sanco Disposal Company are providing solid waste collection and recovery services for the City of Lodi and the n-orthern 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 and recovery needs of the Lodi cnamunity. 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 teras 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 mechanized equipment of substantial cost. The efficiency and level of service in Its operation is directly effected by the condition of its equipment. 1333 East Turner Rood / Post Office Box 319 / Lodi, California 95241 / (209) 369.8274 0 01h 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 sevenyears. 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 supercedes amortization schedules for the financing of our transfer station/resource rec;cling 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 Compeny came before the City Council with a similar request for a contract extension. That request was not granted based upon the following reasons: "l. 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, 19-81, and has continuously op%Nrated seven days a week ever since. The net result to Sanitary City Disposal Company 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. -2- 12 More significant, however, is the broad use of the facility by the general public. In 1983, over 17,000 people used the transfer statioo facility as opposed to making the 22 -mile round trip to the Harney Lane Sanitary Landfill. Some of the benefits realized by the commun tr 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 potlution produced by the previously traveled distance. 4. Reduced littcr and roadside dumping. 5. Diminished effect upon traffic conditions to and from the Harney Lane Landfill. Furthermore, through Sanitary City Disposal Company's insight to incorpornte 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 includet 1. The generation of revenue in excees of $100,000 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 cost of landfill disposal in excess of $25,000 realize,i by the citizens of Lodi and San Joaquin County. 5. The conservation of land, resulting from space required. valuable agricultural the reduced land -3- 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 enteredinto 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 tv our facility, at no charge, 657 loads of solid waste weighing 2,262 tons. A conservative estimate (bossed upon $.75 per mile) of the avoia,Qd 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 -ranges planning by Sanitary City Disposal in the 1960's snd 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 f David V ccerozza General Manager !Ell CITY COUNCIL WAITER K/ cCAR 1, Mayor m CITY O F L O D I TAMES A. MtCARTv, Mayor Pro Te RICHARD L HUGHES CIt s HAtt. 221 WEST PINE MEET ROBERT G. MURPHY TAMES W. PINKERTON, If. LODI. CAUFO�TlIA 95240 1201 314-56.14 January 12, 1980 Mr. Dave Vaccarezza Sanitary City Disposal Co. 1102 N. C'luf f Avenue Lodi., CA 95240 Dear Mr, Vaccarezza: H1NRY A. GLAVES, Jr. City Manager AIICt At. RUMCME City Clerl RONAtU 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 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 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 this matter, please do not hesitate to call. Very truly yours, Alice M. Reimche City Clerk AR s d9 E so Irani,* dty dbIpo.al ins. May 14, 1984 Honorable Mayor and Members of the City Council City of Lodi City Hall 221 West Pine Street Lodi, California 95240 Council Members: With regard to the Franchise Contract matter sat forth on the City Council agenda on May 16, 1984, 1 would like to summarize the basic principles to be discussed as follows: Sanitary City Disposal Company and its subsidiary companies California Waste Femoval Systems and Sauce Disp aal Company are providing solid waste collection and recovery servfces for the City of Lodi and 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 and 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. Conseq:uently', 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 mechanized equipment of substantial cost. The efficiency and level of service in its operation is directly effected by the condition of its equipment. i 1333 East Turner Road / Post Office Box 319 / Lodi, Colifornia 95241 / (209)369-8274 IM) 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 supercedes 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 swings 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 mored 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 in the cost of labor, fuel, repair and maintenance as they relate to our solid waste collection system. -2- Iii M� More significant, however, is the broad use of the facility by the general public. In 1983, over 17,000 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. t reduction of 391,000 miles of travel on city and county roads. 2. $90,000 in avoided transportation costs have been realized bf 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 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 includes 1. The generation of revenue in excess of $100,000 paid out to community youth programs, service clubs, local businesses and private individuals. 2. The recycling of over 5,000 tons of material beck into the product manufacturing cycle. This in turn cot:serves valuabl- natural resources as well as the additional energy required to produce the equivalent producte 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. S. The conservation of valuable agricultural land, resulting from the reduced land space required. -3- to The departments within the City of Lodi have also realised 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 resonrce 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 (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 City 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 sake 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,. DY/ch cc: Henry Gloves Jerry Glenn uenerai na,nager -4- CITY COUNCIL NINRY A. c AVIS, It. h $" WAIT[R KATNICN, mayorCIT O F L C D I AIKI M. R1 C CH1 IAMU A. WCARTY, Mayor Pro loon clirit RKNARD L NUGNIS CITI NAIL, 221 WIST 14W STRUT ROURT G. MUN"Y RONALD M. STI/N IAM1S W. /INKIRTON, It. IQOI, CALIFORNIA 95240 City Mimi wy 12091 334.5634 January 12, 1980 Mr. Dave Vaccarezza Sanitary City Disposal Co. 1102 N. Cluff Avenue Lodi, CA 95240 Dear Mr. Vaccarezza: 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 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 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 this matter, please do not hesitate to ca -11. AR: dg w.. Very truly yours, Alice M. Reimche City Clerk M a NY' a 1%W � Inc* May 14, 1984 Honorable Mayor and Members of the City Council City of Lodi - City Hall 221 West Pine Street Lodi, California 95240 Council Members: With regard to the Franchise Contract matter set fortl City Council agenda ori May 16, 1984, 1 would like to summal basic principles to be discussed as follows: Sanitary City Disposal Company and its subsidiary coal California Waste Removal Systems and Sance Disposal Coupon providing solid- waste collection and recovery services for Lodi and the northern Saw Joaquin County area. the miry os i 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 and 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 clan to meet the ongoing equipment needs. Therefore, Sanitary City Tisposal Company is requesting the City of Lodi to extend the term o€ the agreement between the City of Lodi and Sanitary City Disposal Co wpany to the year 1994, w'th 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. An you know, solid waste collection requires the use of highly mechanized equipment of substantial cost. The efficiency and level of service in its operation is directly effect by the condition of its equipment. 1333 East Turner Rood / Post Office Box 319 / Lodi, Colifornio 95241 / (209) 369_8274 0 CO The average life of well-maintained equiwent is approximately seven years. Consequently, it is necessary for Sant.tary 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 ou-r businesswhenwhen 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 teminaton 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 ou:r 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 conract 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 specu-lative at this time. 2. dt-til push 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 then 2 years old and it is absolutely premature to consider any modification of that contrMet." 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 or. August 20, 198-1, and has continuously operated seven days a week ever since. The net result to Sanitary City Disposal CompanlY 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. -2- r: More significant, however, is the broad use of the facility by the general public. In 1983,`over 17,000 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. 590,000 in avoided transportation costs have been realised by the general public (based upon $.20 per mile). 3. A significant reduction in the environmental air pollution produced by the previously treveled distance. 4. Reduced litter and roadside dumping. 5. Diminished effect upon traffic conditions to and from the Harney Lane Land€ill. Furthermore, through Sanitary City Disposal Company's insight Incorporate into the system a buy -beck 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 $100,000 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 land, resulting space required. of valuable agricultural from the reduced land -3- to 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 fire year agree�aent 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 (based upon $.75 per mile) of the avoided coat of labor and transportation of solid waste alone exceeds $20,000 per year. Sanitary City Disposal for the past th-ree fears has also Provided, at no direct cost to the City of Lodi, $12,000 per year worth of collectio-n services to city owned facilities throughout our community. The- long; --range planning by Sanitary City Di,poe-al in the 1960'a and 1970's has become the reality of the 1980'9- a reality that benefits the entire comm -unity by providing it with a cleaner, healthier and safer environment. It La. 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 cc: Henry Glaves Jerry Glenn i Respa t , ej David accarezza General Manager -4- CITY COUNCIL WALTER KATNICH, Mayor JAMES A. McCARTY, mayor Pro Tern RICHARD L HUGHES MOUNT G. MURPHY JAMES W. 100401130N. if. CITY OF LODI CITY HALL, 221 Wt -ST 14ME STRI4 I LODI. CAMORNIA 95240 i2M) 114-S634 January 12, 1980 Mr. Dave Vaccarezza Sanitary City Disposal Co. 1102 N.. Cluf f Avenue Lodi, CA 952'40 Dear Mr. Vaccarezta: HENRY A. GLAVES, Jr. City manater ALICE M. R11MCHE City Clerk NONAtO 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 reasons,; 1. a transfer station hat 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 mod .i- fica,tion-s of that contract Should you have any questions regarding the Council's position on this matter, please do not hesitate to call. Very truly yours, Alice M. Reimche City Clerk AR: dg