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MEMORANDUM
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DATE: JUNE 11, 1997 rD E r H
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TO: HONORABLE MAYOR AND CITY COUNCIL ••
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FROM: JOHN WOHLMUTH, ACMJDIRECTOR OF ADMINISTRATIVE SERVICES 07 ••, M Z
LISA CONSTANDE, ENVIRONMENTAL CONSERVATION MANAGER rrr7zi 01
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RE: WASTE MANAGEMENT OF THE DESERT REQUEST FOR SERVICE RATE INCREASE;?
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RECOMMENDATION: 7'
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By Minute Motion: p
1. Direct staff to continue negations with Waste Management of the Desert;and `fi
2. Refer item to the June 26, 1997, City Council Meeting. AM() ...
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BACKGROUND:
On April 29, 1997, Waste Management of the Desert(WMD) requested a service rate increase of .8% (EXHIBIT A)effective July 1,
1997. The contract states that WMD may request a rate increase once a year during the month of April to reflect ordinary
changes in the cost of doing business as measured by the Consumer Price Index (CPI), in the amount equal to 50% of CPI
from March to March in the Los Angeles-Long Beach areas. The CPI for this year, in these areas, is 1.6%. Therefore, under
the provision of the contract, WMD is able to request a .8% increase.
The contract requires the City to cooperate in good faith to resolve said request within forty-five(45) calendar days from the
initial submission. City staff has met with WMD staff on two dates. In addition to negotiating the CPI increase, staff is
working on:
1. Preparation of temporary bin rates for commercial and residential customers;
2. Identification of services charges to commercial customers receiving commercial bin service and
researching the application of said charges;
3. Implementation plan and schedule for automated trash collection in gated and non-gated communities that
are governed by homeowner associations (HOAs).
At this time, staff requires additional time to research information with the assistance of the City Attorney. It is staff's
commitment to bring all items to the City Council with appropriate recommendations June 26, 1997.
Respectfully Submitted, Concur,
HN M. WOHLMUTH RAMON A. DIAZ
ACMIDIR 07 MINIS TIVE SERVICES CITY MANAGER
ISA V. CONS NDE
ENVIRONMENTAL CONSERVATION MANAGER
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. •Waste Management of the Desert
41-575 Eclectic Street A Waste Management Company
P.O.Box 3876
Desert,Desert,California 92261-3876
619/324-1741 -619/340-2113
R ECEIVED
April 29, 1997
APR 3 0 1997
Ray Diaz PALM DESERT CITY HALL
City of Palm Desert CITY MANAGER
73-510 Fred Waring Drive
Palm Desert, CA 92260
EXHIBIT A
Dear Mr. Diaz:
Waste Management of the Desert respectfully requests a review of its service rates per
Section III.X. of the Franchise Agreement.
The March 1997 Consumer Price Index (CPI) from the U.S. Department of Labor
indicates Riverside County experienced an inflation factor of 1.6% during the past year
ended March 1997. Our current franchise agreement allows us to seek 50% of CPI or
.8%, to offset cost increases we experienced during the 95-96 fiscal year. Waste
Management of the Desert seeks to increase service rates by this .8% CPI factor.
We will be Glad to discuss this request with you at your convenience. Should you have
any questions, please contact me.
Sincerely,
Frank Orlett
Division President EXHIBIT A
cc: John Wohlmuth
Lisa Constande