HomeMy WebLinkAboutcc min 1971/03/01 MINUTES OF A REGULAR ADJOURNED MEETING OF THE
CITY COUNCIL OF CHULA VISTA, CALIFORNIA
Held Monday, 3p.m. March 1, 1971
A regular adjourned meeting of the City Council of Chula Vista,
California, was held on the above date beginning at 3 p.m. in the
Council Chamber, Civic Center, 276 Fourth Avenue, Chula Vista,
California.
Councilmen present: Scott, Hobel, Hamilton, Hyde, Egdahl
Absent: None
Also present: City Manager Thomson, City Attorney Lindberg,
Director of Finance Grant, Mr. Wayne Carroll,
C.P.A., Mr. Dick Chase, Co-Owner of Chula
Vista Sanitary Service, Mr. Larry Barnes, C.P.A.
Mayor Hamilton opened the meeting at 3:20 p.m. stating the purpose
of the meeting was to meet with the representatives of the Chula
Vista Sanitary Service relative to their request for an extension
of their contract and for a review of their financial practices and
capitalization procedures.
Director of Finance, Mr. Grant introduced the City's auditor
Gordon Grant Mr. Wayne Carroll, and stated they are
prepared to answer any questions the
Council may have.
Mr. Wayne Carroll, Mr. Carroll stated that he has spent
C.P.A. this day with Mr. Dick Chase and Mr.
Larry Barnes reviewing the books of the
Sanitary Service relative to the financial
report issued 10/30/70. He is pretty
well satisfied that the books are being
kept in a business-like manner, and
the bookkeeping procedures are adequate.
Mr. Carroll briefly discussed the
repair costs commenting that this
company runs a total of 20 trucks, 9
hours a day, 6 days a week. As to
depreciation, they are writing off these
trucks over a 5-year straight-line
basis. Normally, trucks usually last
6 years; however, 5 years is a fairly
reasonable figure.
Councilman Hobel Councilman Hobel questioned several
of the figures delineated in the Balance
Sheet. He asked Mr. Carroll what
would be considered as a fair operating
profit for this type of business. Mr.
Carroll stated that if they weren't
making 10% on their investment, then
they should b~ in bonds, and they are
not quite makin~ this 10%, after taxes.
Ne~ Profit figure Councilman Hyde questioned the $13,140.78
discussed reported as the net profit for the year
ended 10/31/70.
Mr. Carroll explained that they are
hoping that with the increase in population,
their revenues will increase. At present,
they are geared toward a certain level,
and they are attempting to seek more
revenues so that their fixed cost will
remain the same, but that the profit
will rise above that.
Dick Chase discusses Mr. Chase discussed their /~asing
lease program program and the bad equipment for
which they have had a great deal of
repairs. In answer to Councilman Hobel's
inquiry, Mr. Chase agreed that if they
were out of the leasln~ business, they
would be able to cut d6wn subs~antla±ly
on the repair costs.
Mr. Larry Barnes Mr. Barnes reported the following
C.P.A. figures on the profit structure for the
last 5 years:
1967: $ 22,000 net profit
$415,000 operating expenses
1968: $ 24,000 net profit
$503,000 operating expenses
1969: $ 52,000 bet profit
$563,000 operating expenses -
This was the year they
sold and leased some
property.
Ownership in Company Mr. Chase explained that he owns 50% of
this company amd ~r. Ledbetter ow~s the
other 50%. The business in San Diego
is run by his son and another person.
Mr. Chase stated he has little to do
with that actual operation, but does
attend meetings with the San Diego
people relative to this business.
Rate structure Councilman Hobel questioned Mr. Chase's
anticipated projections as regard to
the rate structure.
Mr. Chase explained that, with the new
eguipment, they felt they would wait
until the next financial statement
before they discussed rate structure.
He has committed himself, verbally~
that he will not ask for a raise until
after this financial statement, roughly
8 to 10 months from now. There are
a couple of factors that have a bearing
on rates: 2% is paid the City for
franchise tax; they have a County
dump fee that runs 25¢ per resident
in San Diego. If they are talking
about a rate increase, without any
outside factors, they are talking
about 5% to 6%; this is based on the
cost of living, increased costs, etc.
Accounts receivable Mr. Chase then answered questions
pretaining to ample dump sites, now and
in the future; the use of plastic bags;
the need for a 10 year contract in
order to purchase the equipment they
need; the "no good" list which are
their bad accounts, and the need to
bill in advance.
Recommendation of city Mr. Thomson referred to his report in
Manager which he recommended the extension of
this contract for a period of 10 years.
City Attorney recommends Mr. Lindberg, City Attorney, advised
public hearing the Council to hold a public hearing
on this matter.
March meetings discussed Mayor Hamilton remarked that two of
the Councilmen will not be present at
the March 23 meeting, and March 30, the
fifth Tuesday, has been tentatively
planned for a "floating" meeting o~ the
Council. He suggested ~he "floating"
meeting be held, instead, on March 23,
and that March 30 be set aside as the
regular meeting of the Council, since
all of the Councilmen will be present.
--2--
Motion to cancel meeting Councilman Hyde moved, seconded by
of March 23 Councilman Hobel, and unanimously carried
that the regular scheduled meeting of
March 23, 1971 be canceled and held on
March 30, 1971; that March 23 be
scheduled as a Council "floating"
meeting.
Motion for p~blic hearing It was moved by Councilman Hyde,
seconded by Councilman Hobel, and
unanimously carried that a public
hearing be held on March 30, 1971, to
consider the request of Chula Vista
Sanitary Service for a 10-year
extension of their present contract.
Adjournment The Mayor adjourned the meeting at
4:07 p.m. to the meeting scheduled
for Tuesday, March 2, 1971 at 7 p.m.
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