HomeMy WebLinkAboutCity Council Committees - Public Works/Planning - 04/11/19940
PUBLIC WORKS COMMITTEE
APRIL 11, 1994
PRESENT: PAUL MANN
ARTHUR MARTIN
TIM CLARK
GARY GILL
JIM BENNETT
MAY MILLER
DON WICKSTROM
JIM HUNTINGTON
ROGER LUBOVICH
JEAN PARIETTI '
TOM BRUBAKER
STEVE CAPUTO '''
BRENT McFALL
MR & MRS RUST
Wickstrom submitted an updated memo dated April. 11th, from the
City's auditor, and stated that it reflected opme percentage
changes on Option 2 and also some changes on Option 3. Wickstrom
stated that sometime ago, Rabanco requested a rate increase and
after much discussion it was decided that our auditor would review
their books. He stated that the results of the,4Udit was in the
Committee's packet. He said with respect to thet,;goatract, we were
able to determine that there was some justification in January 1993
in implementing a rate incentive program on our 4rbage utility,
which we were able to do. Wickstrom said there vae some transfer
of the larger container (9,0 gallon toter) going down to the 60
gallon toters. He said that reflected in a 3.26%'chahge; on April
1st there was a cost of living increase automatically as
incorporated in the contract. Wickstrom explained that the Option
1 reflects the cost of living increase, plus instituting a rate
incentive for recycling. Wickstrom said we b+eliqN* that there is
some justification under the existing contract f9t,, 4h increase. He
said that results in a total of about 5.86% (on thO.service portion
of their rate or 2.91% on the total rate - added for clarity).
Wickstrom said that based on how we interpret the, Oinguage, that's
what we see the contract allows for. He said howar, the language
is somewhat unclear and may leave room for leg 'interpretation
from different attorneys.
Wickstrom further stated that the Option 2 in the.audit report
is a result of our auditor ,going to Rabanco and hooking at what
items he thought were justifiable. He said that this, audit did show
that there wasn't a profit on the project; they were actually
losing money based on their analysis. Wickstr6i said that our
auditor looked at the appropriate costs that shoe be, included in
calculating the actual costs for service and tbAtls what Option 2
does. He said if the Committee went with Option. -2-, we would want
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to rewrite the contract to clear up any ambiguities in the contract
so the situation could not reocecut.
Wickstrom explained option 3 am incorporating all the contractor
costs that he (the contractor) felt were appropriate and
incorporating them into the proposed rate increase. Wickstrom said
that Option 2 resulted in a 22% increase in the service portion of
the rate which essentially is 11.4% in the total cost. Wickstrom
said there are two parts to the contract; a dump fee and a service
cost. He said that these costs affect all service related so if
22% is added onto the service cost than over all it really is only
an 11.44% increase. Wickstrom said that similarly in option 3, it
is really a 39-1/4% increase in the service cost which would relate
to a 19-1/2% increase in the overall rate. Wickstrom referred to
a table of comparable rates in the packet; some being provided by
the contractor and some provided by staff. Wickstrom said we
summarized these and tried to compare basic rates excluding any
recycling costs, utility tax and toter fee rentals.
Mann stated he had some concerns in that a vendor would submit a
bid and it would become the low'bid; be accepted by the City and
then in a short time (within a few months) ask for an increase.
Mann said it appears that the vendor knew that there would be an
increase coming up shortly and submitted a low bid intentionally.
Mann also stated that he is concerned with the fact that a contract
was put together so that it could be interpreted ambiguously and
there would be loopholes within' that contract. Wickstrom stated
that attorneys interpret contracts in different ways. He said this
would be something that the courts would have to determine as to
what is right. He said that thim• corresponds to Option 1. Mann
said the Committee is encouraged in whatever option we take, to
make sure that the new contract doesn't afford any loopholes that
are evident in this particular contract. He than said we would be
looking at a different contract,,worded differently. Wickstrom
said that we could go with. Optioft 1. subject to them taking it to
court and subject to our attorneys sustaining our opinion of it.
Wickstrom said that with Option 1, they will get an automatic cost
of living increase, which is in the contract and the only thing
that we could justify, based on ail the information we saw, and how
we interpret the contract, is the 3.26% increase attributed to our
instituting a recycling incentiu�o rate, which essentially would
push their customers down to the small container and would be less
profitable.
Mann stated that according to Vickstrom's memo of March 28 which
references the auditor's report,'.,..."the first option basically
follows the contract as we interpret and it should be noted that
the contract languages is basically not clear so with this option,
comes a high potential for litigation." Mann stated that the
auditor points out that the react by the service rate is an
honest one and that this was a good audit. He further said that
because of the ambiguity in the language, that we are put into a
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position of accepting Option 2, which is datable for the
committee.
Lubovich referenced the contract stating that 'basically, this
contract was negotiated as the result of the settlement we had a
few years ago and all parties agreed to the startn:,Fate. He said
there was adjustment to rate in order to have the ia similar rate
throughout the city. Lubovich said this contrast allows for
adjustments in three or four areas only; one is a change in dump
fees and there hasn't been any change in dump fees so'there is no
area for adjustment there. He said the second is unusu4al cost such
as changes in law; Public Works has determined that the impact of
the recycling is such a change that would alloti'for a certain
factor to be put into the rate and accordingly has provided a
figure for that in that option. He said the third area for
adjustment is change in C.P.I. which is also inclu4ied,and is very
clear. He said the last item is, a petition may b6 suds to reflect
justified increases and operating expenses not asiso4tated with the
other changes. Lubovich stated that as he understands it, the
audit did not show any significant changes such as that which would
justify an increase. As such, based on the intorprota'tion of this
contract from the legal department, there are -no significant
changes other than those provided in that one option to allow the
rate increase. Lubovich stated that whether or not they made a
good decision when they entered into this agreement' to begin with
and came in with a low figura, is not the issue. He said from the
legal department's point of view from this contract, unless there
is a justified increase or some other factor that meets one of
these four just described, there is no basis in increase.
Lubovich said we have identified two of those;".fir.»p.I. and the
recycling factor, which we computed. Lubovich said,. thing beyond
that, is beyond the contract. Lubovich said 'that their
interpretation of the contract is that it covers anything and we do
not agree with that.
Bennett said that based on what Lubovich said and What he has read,
what bothers him is the inconsistency of the information provided
to the Committee as decision makers from the staff., Bennett again
referred to the letter of March 28th and refer0ced the "high
potential for litigation." Lubovich reiterated ,the fact that
anytime there is a dispute on a contract, there ,is, 4'potential for
litigation. Wickstrom stated he merely pointed ,t at,out so when
Committee makes their decision, that is a fact th ;ittee would
have to consider.
Clark questioned if we change the contract, are We li le to suits
from other bidders for services? Wickstrom respond d saying we
negotiate the contract and there never was an,. option of bidding
involved.
Bennett stated that this all began last July an;r,re should be
some consideration, no matter who the vendor is, to capture that
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gap in time. Bennett further stated that he felt this is a bigger
issue than this committee can discuss so rather than choosing an
Option, he suggested recommending this entire packet (all three
Options) go to the full Council.
Clark recommended making a decision on an Option, however also
agreed to Bennett's recommendation of taking the entire packet to
the full Council.
Committee voted 2-1 that the three options go before the full
Council with Clark's ,amendment that Option 2 be recommended.
Wickstrom stated that we have been selected to receive a $72,052
grant from the state for which these funds will help pay for our
Recycling Coordinator position. He said these funds are good until
December of 195 and this Will be the last time we will be getting
a grant to offset the cost of that position.
Committee unanimously recommended authorizing the execution of the
agreement for the receipt of grant funds.
Wickstrom stated that this project was contracted with Robison
Construction. He said there isi about $50,000 over the contract
amount, specifically because we replaced three additional lines for
$15,000; two of them were on the infrastructure study; one on Third
Ave between Saar & Titus. Wickstrom said by doing this, we saved
money because we did not have to do a re -design and we did more of
the infrastructure program.
Committee unanimously recommended the project be accepted as
complete and release of retainage,after receipt of state releases,
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Wickstrom said that the staters islanning to advertise the project
of adding the HOV lanes and esseeiisally carrying on their existing
project starting at'84th Avenues (Central Avenue) and continuing
down to W. Main Street in Auburn. He said the contract is for 460
working days. Wickstrom said that in that project, they will be
redoing bridges at Green River,, Willis, Meeker, James, both
railroad bridges and at Central, Avenue, and that this will all
result in some lane narrowing on various city streets. He also
stated that there will, be detours' in our city streets as well as
detours on the interurban trail. He stated that part of the
agreement packet enclosed, is the detour plan for that trail.
Wickstrom said there will also be some on-ramp closings. He said
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there is significant work involved that Council.is#ould be fully
aware of. In response to Bennett's question on th0 , 4*wnside of not
signing the agreements, Wickstrom said that under various
overpasses some of the streets are on their limit*d access. He
said we do want the HOV lanes because this stretch is heavily
conjested during peak hour traffic. He said this was that
"windfall" money that the state reallocated back to the highways so
we need to go for it if we want to see the HQ's lanes on that
system. Wickstrom said we have some minor modifications related to
time, such as James Street. He said we are overlaying James this
year and we won't let them in before we have finisiid the overlay.
He said there is also some additional signing we want for detours.
Committee unanimously recommended authorizing the signing of the
agreement subject to some minor changes and subject to the City
Attorney's review and approval.
Meeting Adjourned: 5:10 P.M.
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