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HomeMy WebLinkAboutAgenda Statement 1982/08/03 Item 13COUNCIL AGENDA STATEMENT Item .tea- / 3 • Meeting Date ~~ ~'•3-~ ITEM TI LE: Public Hearing - Ordinance ~ 99.3 Granting to Chula Vista Sanitary Service a Franchise to Collect and Dispose of Refuse and to Use the Public Streets and Places Within the City for Said Purpose SECOND READING ~Nt~ ADO~'TION X SUBMITT D BY: City Manager (4/stns ote: es No ) On June 8, 1982, the City Council set the date of July 27, 1982 for a public hearing to cons der the granting of a franchise for refuse collection and disposal to Chula Vista S nitary Service. The proposed franchise ordinance has been on file in the Office f the City Clerk and available for public examination. Ordinan e No. 1988 which amends Chapter 8.24 of the Municipal Code relating to the collect on and disposal of garbage and litter was, adopted by the City Council on June 22 1982 andbecame effective July 23, 1982. That ordinance requires the City Ma ager to investigate the information required under Section 8.24.130 and verify that th intended contractor or grantee is capable of complying with the provisions of the ity Code and other rules and regulations of the City. The City Manager is further required to notify the City Council of his findings prior to the approval or deni 1 or any action related to the granting of said franchise. RECOMME DATION: That the Council: 1. Place Ordinance on first reading. ARD/C MMISSION RECOMMENDATION: Not Applicable. DISCUSSION The fra chise ordinance is substantially similar to the existing contract between the City of Chula Vista and Chula Vista Sanitary Service. However, it does incorporate all the provisions of revised Chapter 8.24 of the Chula Vista Municipal Code which the Cit Council adopted on June 22, 1982. The fra chise ordinance provides fora ten-year term. It is my recommendation that this term be approved by the City Council for several reasons. The most important one is that the Chu a Vista Sanitary Service's current maintenance facility is leased and is inadequate, poorly ocated and in a generally run-down condition because the landlord will not make appropr'ate improvements. Chula Vista Sanitary Service has located a site within the City limit pop which they would like to locate a new facility but cannot entertain such an idea unless here is sufficient time to amortize the cost. It is estimated that the facility will co t close to $1,000,000, including land aquisition. While many franchises of this type a for five-year terms, National City has recently entered into a ten-year contract, El Cajo has an automatic add-on provision which allows security for long-term investments, and in ed our own former contract allowed fora ten-year extension. Under ection 9 of the proposed ordinance, Chula Vista Sanitary agrees that the rates to be cha ged in the City will remain as provided under Resolution No. 10585 adopted on August 4, 1981, at least through September 30, 1982. Prior to September 30, 1982, the ~ty C uncil will be required to determine if some adjustment in the existing rates is quir d. It is the intent of this provision that the City will conduct a rate study to determine if the existing rate should be adjusted to reflect a reasonable rate of return on the company's investment and more particularly, what effect yet to be determined policies on man atory collection and/or preferential rates for senior citizens and other classification Form A-113 (Rev. 11/79) C. Page Two , Item ~-- /3 Meeting Date `-~=g2' ~3_~ might ave on the rate structure. The City Council's decision on these two policies in partic lar would probably have some impact on any revisions that may be justified in the ex sting rate. If the City decides to institute mandatory collection, such action would ave a tendency to reduce, if not the existing rate, any increase that may be justif ed. On the other hand, if a program of preferential rates for seniors and other classi ications is established, it would have a tendency to impact to some degree the ultima e rates upward. If both policies are introduced, one will have a tendency to offset the other, but whether or not an increase or decrease in existing rates would follow cannot be precisely determined at this time. However, if both are introduced, I beli ve any change in the existing rates may be modest. Section 8.?_4.110 and 8.24.130 of Ordinance No. 1988 requires the City P~lanager to investi- gate in ormation to be supplied by the proposed grantee and to verify that the intended contr~c or or grantee is capable of complying with the provisions of the City Code and oth r regulations of the City. The City Manager is further required under these section to notify the City Council of his findings prior to approval or denial of the contrac or any action to grant such a franchise. Chula V sta Sanitary Service has filed the required information and I find that the propose franchisee meets or exceeds all those requirements of Ordinance No. 1988 and mee all of the requirements and regulations of the City. I have personally toured la V sta Sanitary's facilities, including their maintenance yard, and observed the uipme t they currently have in their possession necessary to carry out the obligations and res onsibilities required under the Municipal Code and the proposed franchise. The Cit Council is aware that Chula Vista Sanitary Service, Inc. has served the City for the bet er part of 33 years. Their most recent franchise agreement expired on June 30, 1982. Bar official action of the City Council, the previous contract dated April 6, 1971 was to emain in full force and effect until the effective date of any new franchise that ma be granted. During the period of contractual relationship, minimum complaints have be n registered with the City. While Chula Vista Sanitary Service, Inc. is a wholly owned s bsidary of SCA Services, Inc. (which is a publicly held corporation of considera- ble siz ), Chula Vista Sanitary Service, Inc. has always been managed and operated by predomi antly local residents and the company has always been willing to participate and assist he City in any way it can in publicly initiated or supported activities. To the casual bserver, the company has always given the appearance of relatively small but well-ma aged local business operation. The parent organization has had little impact in the perational policies of its subsidiary. FISCAL IMPACT Under t $110,00 City. ~:lm I~\/ ~\ Of\ terms of the proposed franchise, annual revenue to the City will be approximately abo ~~~~~ ~ ae~~o' __. _._..___._.__.__._~A ~ i ~ ~ ... ~ !~ _ ; .._.. _ _ ~,.~.~.....~..~_.__ti. , ~ ~~ the expiring franchise generated for the <~ . __ ~ ~~