5.4. SR 02-05-2007 - Laserfiche WebLink

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City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date Administration February 5, 2007 Item Number 5.4. Item Description Ci Garba e Hauler Contract Extension and Rate Increase Prepared by Rebecca Haug, Environmental Administrator Tim Simon, Finance Director Reviewed by Lori ohnson Ci Administrator 1ft Introduction The City of Elk River contracts with Allied Waste (formerly BFI) and Randy's Sanitation for residential garbage hauling and recycling. On each even numbered year, the haulers and staff discuss the terms of the agreement and payment schedule to determine if any adjustments are needed. The premise behind having organized collection is to offer the residents a better rate, safer roads, and continuity in services provided. Discussion During our discussion of the terms of the agreement and the payment schedule, the haulers expressed concerns in experiencing significant cost increases with fuel and that they have not had an increase in their payment in approximately 10 years. Because of this, they are requesting a modest price increase to offset some of the costs. They are willing to wait until 2008 for the increase. They are currently in the 3rd year of their current contract which would expire in 2009. They are requesting that in 2008 the S-year term restart putting this contract out to 2012. The haulers have agreed to stay with the proposed increase throughout the contract period. Staff is comfortable with the extension of the contract with those terms. The Consumer Price Index has seen a combined two-year increase of 6.8% but the haulers are willing to accept a 2.9% increase. Staff recommends this increase due to the fact that the haulers have shown that they appreciate the relationship they have with the city and are willing to share the costs. This would increase the rates the city pays the haulers to the following: Container Size 32 gallon hi-weekly 32 gallon 60 gallon 90 gallon Two 90 gallons Current Monthly Rate $ 9.10 $ 9.20 $ 9.30 $ 9.40 $10.50 Requested Monthly Rate $ 9.36 $ 9.46 $ 9.57 $ 9.67 $10.80 With this increase, the rates to residents will need to be adjusted. At this time an estimated $0.30 increase would allow the city to have a relatively small operating income but still maintain a cash flow for unexpected expenditures, change in new housing developments, change in tipping fees, etc. With that, the following would be the estimated 2008 rates for the residents: C: \Documents and Settings \tallard\Local Settings \ Temporary Internet Files \ OLKF\REQUEST COUNCIL ACTION-garbage contract (2).doc