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CITY OF SEWARD, ALASKA
RESOLUTION 2010 -064
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, APPROVING A FRANCHISE FOR THE COLLECTION AND
DISPOSAL OF GARBAGE AND REFUSE WITH ALASKA PACIFIC
ENVIRONMENTAL SERVICES ANCHORAGE, LLC dba ALASKA WASTE,
SUBJECT TO APPROVAL BY THE VOTERS OF SEWARD AT THE
OCTOBER 5, 2010 REGULAR CITY ELECTION
WHEREAS, the Seward City Charter ( "Charter ") and Code of Ordinances ( "Code ")
provides for the sanitary, economic, and efficient collection and disposal of garbage, rubbish, and
waste material in the City and its service area, and permits, pursuant to such Charter and Code and
voter approval, the use of a contractor to provide such services; and
WHEREAS, the City of Seward currently contracts with Alaska Pacific Environmental
Services Anchorage, LLC ( "APES ") dba Alaska Waste — Kenai Peninsula, LLC, for the collection
and disposal of garbage and refuse, with said contract set to expire December 31, 2010; and
WHEREAS, on October 3, 2000, the voters approved a five -year contract between the City
and Peninsula Sanitation, Inc., a division of Waste Management, Inc., which was subsequently
i cer assigned to APES and renewed for an additional five year term upon Council approval of Resolution
2005 -79 on September 12, 2005; and
WHEREAS, approval of a one -year franchise, with an option to extend for an additional one
year, will save the City the expense in time and money of seeking competitive bids for this service,
given that APES has provided quality service to the community of Seward at a reasonable price, and
has expressed the desire to continue to provide such services. It will also provide a shortened
contract duration to allow the City and APES to consider future contract modifications associated
with a request by APES to allow automatic annual rate increases equal to the CPI, potential fuel
surcharges, consideration of future capital costs and a potential recycling and waste management
plan; and
WHEREAS, rates and conditions of service are subject to City Council review and approval;
and
WHEREAS, granting of a franchise for a public utility requires the affirmative vote of a
majority of electors voting on a proposition to approve such a franchise, and
WHEREAS, the Seward City Council finds that it is in the public interest to provide for
quality, local garbage and refuse collection and disposal services, and therefore opts to place this
proposition before the voters of Seward at the regular election of October 5, 2010.
ice.
CITY OF SEWARD, ALASKA
RESOLUTION 2010 -064
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. A franchise agreement between the City of Seward and Alaska Pacific
Environmental Services, LLC, dba Alaska Waste — Kenai Peninsula LLC, for the collection and
disposal of garbage and refuse, a copy of which is attached and incorporated herein by reference, is
hereby approved subject to voter approval as noted in Section 4 below.
Section 2. The city manager is authorized to finalize and execute such additional
documents as necessary to the franchise agreement and to agree to revisions to the documents so
long as the essential terms and conditions of the franchise agreement are not substantially changed.
Section 3. For the reasons stated herein and the recitals of this Resolution which are
hereby incorporated by reference as written findings of the City Council, it is determined that
pursuant to Seward City Code Section §6.10.130, the public interest would best be served by not
requiring competitive proposals from other potential service providers prior to approving the
franchise agreement described herein. The current franchisee has demonstrated its ability to provide
quality service to the community at a reasonable price. There is a public benefit in providing,
uninterrupted garbage and refuse collection and disposal services within the community. The
franchisee has the equipment and personnel available to continue to provide local service. The 3%
of gross revenues received by the City as a franchise fee will adequately compensate the City for the
maintenance and use of City streets and alleys in the conduct of this contract. The City Council will
also retain rate approval as provided in the City Charter and Code.
Section 4. At the regular municipal election to be held on October 5, 2010, the City shall
submit to the qualified voters of the City the question of approval of the franchisee agreement noted
above. An affirmative vote of a majority of the qualified electors voting on the proposition shall be
required for approval of the franchise agreement.
Section 5. The proposition shall be substantially in the following form:
Proposition No.
FRANCHISE AGREEMENT FOR THE COLLECTION AND
DISPOSAL OF GARBAGE AND REFUSE
Do you approve a -one year franchise agreement with Alaska Pacific
Environmental Services Anchorage, LLC doing business as Alaska Waste —
Kenai Peninsula, LLC, for the collection and disposal of garbage and
refuse? The franchise agreement would contain an option to extend for an
additional one year and would provide for an annual rate review with
consumer rates to be set by resolution of the City Council.
CITY OF SEWARD, ALASKA
RESOLUTION 2010 -064
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Section 6. The above proposition shall be printed on a ballot which may set forth
other propositions. The proposition set forth in Section 5 above shall be printed in full, and the
following words shall be added as appropriate and next to a space providing for marking the
ballots:
Proposition No.
Yes
No
Section 7. This resolution shall take effect immediately upon adoption. The franchise
agreement shall not be effective until it has been approved by a majority of the electors voting on a
proposition to approve the same.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 26th
day of July, 2010.
THE CITY • `REWARD, ALASKA
Lim Art
illard E. Du 1 am, Mayor
AYES: Valdatta, Bardrson, Smith, Shafer, Amberg, Dunham
NOES: None
ABSENT: Keil
ABSTAIN: None
ATTEST:
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Council Agenda Statement
Meeting Date: July 26, 2010
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Through: Phillip Oates, City Manager u �.o
From: Kristin Erchinger, Finance Director gtASr�P
Agenda Item: Approving Franchise Agreement for Waste
Collection and Disposal
BACKGROUND & JUSTIFICATION:
The City of Seward, through its Charter and its Code of Ordinances, provides for the collection and
disposal of garbage and rubbish. To that end, the City previously applied for, and was granted, a
Certificate of Public Convenience and Necessity by the Regulatory Commission of Alaska, for its
refuse utility (Certificate U- 99 -22).
Since at least the early 1970s, the City has utilized a private contractor to provide refuse services in
Seward. The City Code requires that a franchise for a public utility be approved by a majority of
electors in a regular City election. The most recent franchise agreement was approved by the voters
on October 3, 2000 for a period of five years, with an option to extend for an additional five years.
The option to extend was exercised by the Seward City Council in Resolution 2005 -79 which was
approved on September 12, 2005. The current contract for refuse services expires December 31,
2010.
The City's current refuse contractor is Alaska Pacific Environmental Services LLC (APES) doing
business as Alaska Waste — Kenai Peninsula, LLC. The community has received quality service from
this contractor, at a reasonable cost. The City staff finds the contractor and its employees to be very
responsive to customer concerns and /or complaints, and complaints are infrequent. Over the past few
years, the contractor was very cooperative when the community introduced bear -proof garbage
containers which were considerably larger than the previous standard -sized garbage cans. Rather
than to complain and /or increase garbage fees, the contractor retrofitted its trucks to be able to assist
with the lifting o f these larger receptacles, and worked cooperatively with the community to make the
bear -proof garbage container effort a success.
Refuse rates in Seward have been increased two times since 1991, under previous contractors. In
2002, the residential rate (for the first two standard containers, one pick -up per week) rose from
$10.85 to $15.94 per month (47 %), and then to $17.22 per month in 2004 (8% increase). This
reflects an average annual increase in refuse rates since 1991 of 3% or $0.34 per year. Rates have not
increased in the past six years under APES.
Proposed Changes in Contract:
The new proposed contract is for a period of only one year, and includes a proposed rate increase of
25 %, bringing the residential rate to $21.53. The purpose of the shortened contract is to provide time
for the City and APES to address additional issues, such as APES' request to include an automatic
rate escalation annually based on the consumer price index, as well as their request to adopt a fuel
surcharge which would fluctuate monthly in a manner similar to the City's electric utility charges.
APES would also like to initiative community forums to assess potential interest in developing a
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Recycling and Waste Management Plan to include initiatives such as recycling, grease collection,
bear - resistant containers, alternative collection container systems, and the associated capital
requirements of these potential initiatives. APES expects to undergo upgrades to its equipment fleet
in the near future, which they anticipate will result in future rate increases. However, prior to
investing in such upgrades, they desire to better understand the needs of the community as it relates to
recycling efforts going forward.
Heretofore, the City of Seward has done the billing for refuse service within the Seward Public Utility
service area, for a fee equal to 12.5% of gross revenues. Under the new contract, APES proposes to
assume responsibility for their own billing. The City will reduce its billing fee from 12.5 %, to a
franchise fee of 3 %, to compensate the City for maintenance and use of its roads and alleys, per
Seward City Charter §13.5(7). Based on estimated gross revenues of $504,000 in 2010, the City's
fee will decline from $63,000 to $15,120, or a total reduction of $47,880.
The City administration recommends renewing the franchise agreement with Alaska Pacific
Environmental Services, LLC, subject to voter approval.
CONSISTENCY CHECKLIST: Where applicable, this resolution/ordinance is consistent with
the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City
Council Rules of Procedures.
Other:
ATTORNEY REVIEW: YES X No
FISCAL NOTE:
Approval of this contract will result in an increase in customer rates of25% across - the - board, and a
reduction in City revenues of $47,880, based on the contractor assuming responsibility for billing for
refuse services and the City's collection of a 3% franchise fee.
The contract further authorizes annual rate reviews, whereby the Seward City Council is required to
approve refuse rates charged by the contractor.
Approved by Finance Department:
RECOMMENDATION: _MM
Council approve Resolution 2010 approving a franchise for the collection and disposal of
garbage and refuse with Alaska Pacific Environmental Services Anchorage, LLC, subject to approval
of the voters at the October 5, 2010 regular city election.
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