HomeMy WebLinkAbout1999-05-11 - AGENDA REPORTS - STOCK ACQUISITION WASTE HAULER (2)CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
City Manager Approval:
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Item to be presented by: Jeffrey Lambert.
DATE: May 11, 1999
SUBJECT: APPROVAL OF THE ACQUISITION OF STOCK OF ARKLIN
BROTHERS' ENTERPRISES BY U.S.A. WASTE OF CALIFORNIA,
INC. AND OF STOCK OF ATLAS TRANSPORT, INC. BY REPUBLIC
SERVICES, INC. AND AMENDMENTS TO RESIDENTIAL AND
COMMERCIAL WASTE HAULING FRANCHISE AGREEMENTS
DEPARTMENT: Planning & Building Services
RECOMMENDED ACTION
Adopt the resolutions that approve the acquisition of stock of Arklin Brothers' Enterprises,
by U.S.A. Waste of California, Inc., and acquisition of stock of Atlas Transport, Inc. by
Republic Services, and approve the attached amendments to the Residential and
Commercial Franchise Agreements between the City of Santa Clarita, Atlas Transport,
Inc., Blue Barrel Disposal and Arklin Brothers Enterprises.
BACKGROUND
U.S.A. Waste of California, Inc. / Arklin Brothers Enterprises Inc. acquisition:
On March 23`d, 1999 the City received a letter from Arklin Brothers Enterprises, formerly
operating as the Santa Clarita Disposal Company, announcing their intent to be acquired
by U.S.A. Waste of California, Inc. (Waste Management, Inc.). Under both the Commercial
and Residential Franchise Agreements, the City Council must approve all transfers of this
nature.
In conjunction with City Staff, U.S.A. Waste of California, Inc. has proposed the following
enhancements to the franchise agreements:
• Continuation of the current residential rate freeze for an additional 24 months
through January 1, 2002.
• Establish a rate freeze for commercial collection services through January 1,
2002.
• Reduction of multi -family collection rates by 5.3% to 5.8%, depending on the level
of service provided, starting the first day of the month following approval of the
acquisition.
• Limited free residential collection and unlimited free drop-off of bulky waste
starting as of the date the acquisition is approved.
Agenda
• Increase commercial solid waste diversion by not less than 5% per year until
2005.
• Free collection of refuse and recyclable material from City facilities starting
January 1, 2000. U.S.A. Waste of California, Inc. will provide $100,000 of free
service to City facilities per year, and Atlas will provide $12,000 per year.
• Creation of a uniform quarterly billing schedule. The schedule will start on
January 1, 2000 (Residents will continue to have the option to pay monthly).
The following change to the franchise agreements has been proposed (see attached):
Annual adjustments as of January 1, 2002 to both Residential and Commercial
franchise collection rates will be determined by the increase or decrease in the
LA -Riverside -Anaheim Consumer Price Index (CPI) from the previous year, not
to exceed an increase of five percent (5%) annually. From 1959 to 1999, this CPI
has increased an average of 2.5%. Changes in landfill fees will no longer be
considered during rate adjustments.
Republic Services, Inc. / Atlas Transport, Inc. acquisition
On May 3", 1999, Atlas Transport, Inc. informed the City of its intentions to be acquired by
Republic Services. Under both the Commercial and Residential Franchise Agreements, the
City Council must approve all transfers of this nature.
Atlas Transport, Inc. and Republic Services have agreed to all terms designed to enhance
service proposed by City Staff and U.S.A. Waste of California, Inc. as described above. The
approval of this acquisition will be subject to final review by the City Attorney when
representatives from Republic Services, Inc. have forwarded all of the appropriate
paperwork to the City needed to complete the acquisition review process.
ALTERNATIVE ACTIONS
The City Council may elect to approve the acquisition with additional amendments to
those proposed by U.S.A. Waste of California, Inc. and staff.
The City Council may elect to not accept the acquisition if good cause exists.
FISCAL IMPACT
The Franchise agreement entitles the City to receive a transfer fee to cover all direct and
indirect administrative expenses including consultants and attorneys, necessary to
adequately analyze the application and to reimburse the City for all direct and indirect
expenses. In addition, the Grantee shall reimburse the City for all costs not covered by the
transfer fee in an amount not to exceed five thousand dollars ($5,000) per agreement.
A combined amount not to exceed $20,000 shall be sought to cover expenses relating to both
acquisitions.
ATTACHMENTS
Resolution No.
99-70
Resolution No.
99-74
Resolution No.
99-76
Resolution No.
99-77
Resolution No.
99-78
Resolution No.
99-79
Resolution No.
99-80
Resolution No.
99-81
Resolution No.
99-85
Resolution No.
99-87
Proposed Amendments to the Commercial and Residential Franchise Agreements
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