The Lake County Board of County Commissioners met in special session on Monday, March 18, 1991, at 9:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Courthouse, Tavares, Florida. Commissioners present at the meeting were: Donald B. Bailey, Chairman; C. W. "Chick" Gregg; Richard Swartz; Catherine Hanson; and Michael J. Bakich. Others present were: Annette Star Lustgarten, County Attorney; Alan A. Thelen, County Manager; Ava Kronz, Assistant to the County Manager; and Sandra Carter, Deputy Clerk.
SOLID WASTE WORKSHOP
CONTRACTS, LEASES & AGREEMENTS/ENVIRONMENTAL SERVICES
Mr. Don Findell, Director of Environmental Services, appeared before the Board and reviewed what direction staff had been given by the Board at the last workshop session held with the waste haulers, regarding this issue. He stated changes had been requested to be made to the draft franchise agreement, noting that said changes were to be used to result in a reduction of waste collection rates. He stated staff had indicated, at that time, that some information was being prepared, for the Board's review, concerning solid waste collection practices, franchise agreement requirements, and collection rates throughout the State, noting that said information had been compiled, and a packet had been distributed to the Board, prior to this meeting, containing said information.
Mr. Findell then reviewed a slide indicating the proposed waste collection areas, noting that the County has been divided into four (4) service areas, being (1) central and northwest - serviced by Town & Country Refuse, Inc./Waste Management Industries (Town & Country); (2) southwest - serviced by South Lake Refuse Service, Inc.; (3) southeast - serviced by Berry's Refuse Service, Inc.; and (4) north central and northeast - serviced by AAA Refuse Service/Industrial Waste Services (AAA/IWS). He stated the largest
number of customers are proposed to be serviced by AAA/IWS, the second largest number served by Town & Country, and the third largest number served by South Lake and Berry's Refuse. He stated that all the customer account figures were compiled by the waste collectors themselves, noting that they actually went out and counted houses within the proposed areas, and, between themselves and staff, reached an agreement on the proposed service areas, and the number of customers that would be provided service, on the basis of their market share. He stated that, at this point, the franchise agreement allows the County to make adjustments to the service areas, on a three year basis, and, secondly, that the County still has a clause in the agreement that allows them to look at how well the franchise agreement has worked the first year, and make any adjustments that might be needed after that first year, and clean up any gliches there might be.
Mr. Findell reviewed a matrix comparing residential collection agreements across the State, which indicated the population of each county; whether or not the collection was mandatory; the number of homes served; the level of service; the rate charged; how the fee was collected; the terms in years; whether or not there were market share adjustments; annual cost index; and whether or not there were seasonal exemptions. He indicated what the Board had requested staff to do, regarding revisions to the franchise agreement. He then reviewed a second matrix which indicated existing and proposed residential solid waste collection and recycle fees, breaking them down into two extremes - one being the collection service level/fee, and the other being special collection items and fees.
Commr. Bakich questioned Mr. Findell regarding the fees for the various collection areas, stating that in reading AAA/IWS's comments, and using that rationale, why it is not the case that South Lake's, with the rural areas they have, collection fees are not as high as AAA/IWS, at which time Mr. Jeff Abernathy, AAA/IWS, responded. Mr. Abernathy then reviewed a map he had brought indicating densities his firm serves, how many times a week they
pick up, and the length of time it takes to go back to the landfill and drop their load. He stated one difference in the rates between South Lake and his firm is that South Lake is talking about running one truck versus his firm running seven trucks. He stated the only real change in their costs is the cost of stamps for mailing - from 25 cents to 29 cents.
A brief discussion occurred regarding AAA/IWS's rates versus South Lake's rates, being they both service approximately the same densities, at which time Mr. Abernathy and his attorney, Mr. Lewis Stone, answered questions presented by the Board.
Commr. Swartz stated it is the Board's responsibility to obtain a price that the people in Lake County can afford, and from day one he felt, if the County was going to go to mandatory collection and consider putting collection and disposal costs on the tax bill, the only way the County could justify it to the citizens of Lake County was to say that, because the County was able to do it in a more efficient manner, they were able to get a better deal than what the citizens have at present, and maybe even a better deal than what they will have, come October 1, 1991, because of the increase in the tipping fee. Regarding where the County might go from here, Commr. Swartz stated, first of all, the Board needs to instruct staff to go back and negotiate with the other three haulers, to find out whether or not they can achieve greater efficiency by letting them expand into AAA/IWS's area, and secondly, to go strictly to a bid, and let each of the four haulers bid on each of the four areas. He stated he did not see any other way for the matter to be handled, noting that he felt AAA/IWS had done what they could; however, he did not know why their numbers were as far off from the others as they were, but could not load this on the citizens of Lake County, without going to either of the two options he alluded to first.
After further discussion, Commr. Bakich stated he was fairly comfortable with the rates given today concerning waste collection, but not to where he was comfortable with the Board leaving this
meeting, without strong consideration given to possibly bidding it out. He stated he felt the Board owed it to the citizens of Lake County to give them "the most bang for their bucks".
Commr. Gregg stated the problem seems to lie with one of the four vendors, noting that the Board is somewhat pleased with all the others' figures. He stated that AAA/IWS's numbers might be justifiable, but, in comparing them with the other vendors' numbers, are hard to believe.
Mr. Kyle Adams, with Town & Country, representing Waste Management Industries, stated he had been involved with the development of franchises throughout the State for approximately ten years. He stated that, using an evaluation of units per square mile in an assessment of a service area is not always the best thing, noting that if one has a number of units in an area with no lakes, one could probably gain some insight from looking at that number; however, a better indicator in Lake County might be the number of units per route mile. He stated that, typically, what one is obliged to do, under a mandatory franchise, is offer service to every customer that might be on that road; however, typical ordinances, such as the one being discussed this date, would limit access - one would have to have County roads, as they cannot be obligated to drive down a private road. Therefore, an adequate assessment of route density is more dwelling units, or potential customers, per route mile, rather than per square mile. He stated the distance from the route to the disposal facility is very important, but not as important as customers per route mile. He stated another thing is that, in the list of counties listed on the matrix alluded to by Mr. Findell, one finds that most of the counties are more highly urbanized than Lake County, noting that, of the counties that went into exclusive franchising, and now mandatory service, many of them did so because they had reached a point of urbanization that one could say, on a scale of one to ten, were much further along, in terms of urbanizing. He stated that, in looking at the matrix of the various counties, it is difficult
to tell which ones went to mandatory pickup through a competitive bid process, and which ones did it through a negotiation process, on the basis of today's prices. He stated that, before the Board goes to the bid process, they might want to look at densities per mile, and it might be useful for staff to go down the list of counties and see which ones got there through a bid process.
Mr. Stone, Attorney for AAA/IWS, stated that the notion the Board would contract with all the other haulers and bid out AAA/IWS concerned him a great deal, at which time a brief discussion occurred regarding the matter.
Commr. Hanson questioned whether the "green boxes" would help AAA/IWS, in some of the very rural areas, to which Mr. Abernathy, AAA/IWS, replied that this might be a monster the Board would not want to create.
Commr. Gregg stated the only place that he had seen the "green boxes" work was in the State of North Carolina, where they policed them, and they were behind fences.
Mr. Pat McGuire, South Lake Refuse, appeared before the Board to respond to the prices given by AAA/IWS, noting that Mr. Abernathy had indicated he was comfortable with the prices he submitted, stating that he has run South Lake Refuse for twenty-one years, mostly in the south end of the County, and that he feels comfortable with the prices he submitted (which are lower than AAA/IWS's). He stated he did not want the Board to think he did not know what he was doing, when he came up with the prices he did. He noted that his firm serves Orange County (which is a mandatory collection service, servicing 12,500 residents) as well as Lake County, at which time he answered a question by the Board as to what his rates are for Orange County.
Mr. Basil Hart, South Lake Refuse, answered a question by Commr. Hanson as to what the density is for the area they serve in Orange County, stating they have a higher density in fewer square miles.
Mr. Sandy Minkoff, Attorney, representing Berry's Refuse, appeared before the Board stating he wanted to point out the fact that Berry's Refuse is the second lowest hauler in the County, in terms of charges to customers, as of this date. He stated that, through the Board's efforts, the prices they submitted are a reduction to all their customers, as well as to all new customers. At the same time, even with the changes the Board made to the contract, at the last meeting, the services they will provide, with that reduction, are significantly greater than what they provide at present. He stated that, compared to current, charges to the customer will be less, but the services will be better. He stated there will be an increase in service to four times a year, for removing all waste, at no charge, and removing an unlimited amount of garbage each week.
Commr. Swartz questioned how much a factor the number of pickups play in the pricing, to which Mr. Minkoff stated it would be a fairly substantial amount, noting that it is difficult to estimate, due to the fact that there has never been this type of service in Lake County.
Mr. Fred Jackson, representing Berry's Refuse, interjected, from the audience, that it would be a factor, due to the fact that they will have to set up a different operation than what they presently have.
Discussion continued, at which time each hauler noted whether or not they provide a pickup service and whether or not it is on a per call basis. It was felt that a pickup of once or twice a year would be adequate.
Commr. Swartz stated he had noticed that Martin County apparently has an arrangement with their Tax Collector, regarding thier special assessment process, where he bills the taxpayers on a quarterly basis, and questioned staff as to whether or not Lake County could do the same. He was told that it is in Martin County's franchise agreement to do so, at which time Commr. Swartz requested staff to talk with Mr. T. Keith Hall, Lake County's Tax
Collector, about Lake County possibly doing it, and, if so, how much more it would cost.
Commr. Swartz then questioned staff regarding transfer stations, noting that the consultants had recommended they be used by the haulers, and as to where the County presently is concerning it, to which Mr. Findell, Director of Environmental Services, stated the County is thinking about it, from the standpoint of providing the transfer stations. He stated, however, that the Board was not comfortable with putting a transfer station in the northeast area of the County, which is the area that the consultants had recommended putting one in. He stated the problem is the cost of the construction of a transfer station, noting that they can cost well over a couple hundred thousand dollars, by the time the land is bought and the station is built. He stated the matter has been put on hold, for the time being, due to the costs involved.
Mr. Abernathy interjected that his firm feels a transfer station would be a significant operational cure for some of the ills of their rates, however, as Mr. Findell stated, the cost of the facility is the problem.
Commr. Swartz questioned each hauler regarding the fact that, if the County should decide to go to the mandatory collection, but was only going to put the disposal costs on the non-ad valorem tax bill, how it was going to impact the costs the County is presently looking at, to which each hauler responded, noting what the difference in rates would be for each of them.
Mr. Abernathy, AAA/IWS, stated, as far as his company is concerned, it would depend on how they would have to collect it. He stated the less densely populated, the more likely there will be those that will not want to participate in the program and will not want to pay.
Mr. Al Thelen, County Manager, interjected, stating that he was not present at the last workshop meeting held with the haulers, however, noted he had sent the commissioners a memorandum (which he
submitted, for the record) raising the issue of whether or not the County should be prepared to handle both the billing and collection for disposal, recycling, and collection. He stated it was then, and continues to be, his recommendation that the County not handle, on a special assessment, the collections the first year, based on a number of contacts he had with counties that had done it the first year and some that had not. He stated it is critical that the County know the answer to that question, probably no later than four weeks, but within three weeks, as it makes a significant difference in the resources that the County will need to handle that operation. He informed the Board how much the program will cost - from $3 million (for recycling and disposal) to $6 million (for recycling, disposal and collection), and an additional $4 million, as it relates to fire and safety. He stated staff needs to know if everybody is going to pay the same, as this will be a key issue in establishing the program for the special assessment, or the non-ad valorem taxes.
Ms. Joan Gathings, a local resident in the rural area of the County, appeared before the Board questioning whether the prices indicated would be in addition to the tipping and recycling fees, or whether they would be included in them. She requested the Board to reconsider the mandatory pickup, especially for the rural areas, particularly the ones that are zoned agricultural, as these residents have been recycling for years and have nothing left for the County to pick up. She requested the Board to also consider those people that are on fixed incomes.
Mr. T. J. Townsend, a resident of Yalaha, appeared before the Board stating that much of what he has seen and heard, recently, suggests that there is not a great deal of difference in the costs of providing a twice-a-week service, as compared to a once-a-week service, however, feels that there is a big difference in the level of service, from the customer's standpoint. He stated he felt the County was going to get an adverse reaction from the citizens, if it reduces the service from twice-a-week to once-a-week, unless
there is a very significant reduction in costs along with it, to the customer. He stated he also wanted to make the point that, in considering what kind of system the County is going to adopt, there are a number of cost entities involved, such as the cost to the County for processing the billing, tax collection, etc., and the cost to the haulers, if they are involved in billing, especially if the County goes to mandatory collection, noting that he felt there will be major problems in enforcing mandatory collection in many areas of the County. Lastly, he mentioned the cost to consumers, noting that double billing increases the stamp costs, as well as the costs, overall. He stated that some of the procedures the County is considering, particularly double billing - part of the costs billed by the County and part of the costs billed by the haulers, is ludicrous. He stated if the County is going to go to mandatory collection, at least do it from one billing center, as he feels when two separate entities are billing, it creates a golden opportunity for losing control of costs.
Commr. Bailey questioned staff as to whether or not there are exemptions for those individuals that cannot afford to pay, to which Mr. Findell, Director of Environmental Services, replied that, out of the counties surveyed, one county indicated they do have hardship exemptions.
Commr. Bailey then questioned staff regarding the County billing on a quarterly basis, to which the County Attorney, Ms. Lustgarten, stated that, if the County is going to use the special assessment process and use the combination ad valorem/non-ad valorem bill, that is a one time billing. She stated that what the Board is talking about is another system that would not incorporate it into the ad valorem bill, thus a special assessment billing four times a year.
Commr. Swartz stated individuals can make arrangements with the Tax Collector to pay monthly, and spread out their payments over the course of a year, noting that it is presently available, however, is not well known. He further stated that he appreciated
some of the concerns and comments that Mrs. Gathings expressed, however, one of the things that this Board finds itself in is the position of feeding the incinerator, and, if the County allows exemptions, it is going to put the County further in the hole. He stated the County is going to have to pay for the incinerator, somehow, at least for the time that the County is still obligated to pay for it. He stated, regarding the disposal costs, the only way he knew to apportion the costs is to apportion it as fairly as the County can among the people of Lake County, noting that he is aware of the fact that it is going to be distasteful to some. He stated even though there are some that did not make the decision for the incinerator, and some that presently recycle and compost, they are all citizens of Lake County, and are going to have to share in the disposal costs.
Commr. Gregg stated it needs to be brought to attention the fact that, with or without the incinerator, the County is building a new landfill, and tipping fees in Lake County are going up, just like they are going up everywhere, noting that one of the main reasons this Board considered mandatory collection was due to the problems that the County is presently experiencing with dumping on the side of the roads and out in the woods.
Commr. Swartz mentioned the fact that there are some fire stations in the County that are manned eight hours a day and, if they have an area that can be locked, this gives those individuals living in the most rural areas of the County a place to put "green boxes" and recycling boxes, and avoid having to get into the collection portion of the costs involved. He stated he felt this was the only way that he could see to address some of what might be inequities and, also, it would reduce some of the subsidizing between the more dense areas and more rural areas.
Mr. Lewis Stone, Attorney for AAA/IWS, stated a concern he had regarding the issue of the transfer stations and AAA/IWS's costs involved for hauling.
Upon being questioned as to how much a transfer station might profit, Mr. Abernathy, AAA/IWS, stated he had looked into the matter once before and found that it would save approximately $2.00 per household, if the County went to a transfer station.
Further discussion occurred regarding the mandatory collection issue, at which time Commr. Swartz stated he would support allowing each of the four haulers to negotiate with the Board for any of the four areas, or, to allow each of the four haulers to bid on any of the four areas.
Mr. Minkoff, Attorney, representing Berry's Refuse, informed the Board that it would be futile for his client to go to bid, as they do not have the resources to post the bond for 10,000 customers for one month, or to purchase the seven, eight, or ten trucks that will need to be purchased to run any of the other areas, so bidding any of the other areas, other than the South Lake area, would be futile. He stated, in essence, his client is getting taken, if the County goes this route, and this is not fair. He stated that, with the exception of one hauler, the other three haulers are fairly close in price.
Commr. Swartz requested the County Attorney, Ms. Lustgarten, to comment on what the County could do regarding this matter, at which time she stated that the Board made an original policy decision that they were going to negotiate with these haulers, and looked at anti-trust implications in doing so, and found that there were none. However, what the Board is now doing is opening it up to bidding, which changes the equation considerably, noting that she feels the County will have to go to a formal bidding process.
Commr. Swartz questioned the County Attorney as to whether the County could set up a process whereby it would be indicated that there are four exclusive areas, at present, and that, in the bid process, the bidders could bid on no more than two areas, to which the County Attorney replied that the Board, in their RFP's, could probably limit the number of areas to be bid on, in order to preserve the intent to have more than one hauler in an area.
Mr. Stone, Attorney, stated that AAA/IWS is at a distinct disadvantage if they are going to have to bid against someone who already has a contract adjacent to them, and is already in place. He stated if the notion is that the County is going to enter into an agreement with the other three haulers, and bid out AAA/IWS, it is not fair, to which Commr. Gregg concurred.
Ms. Lustgarten, County Attorney, stated if the Board went out to bid, it would change the equations entirely. She stated that what the Board is looking at now is how the franchise areas were developed, and are talking about changing boundary lines, in order to preserve that market share, to which Commr. Swartz stated he assumed the boundary lines were organized with some recognition of efficiency, noting that staff set down and drew the lines, so he did not feel that combining any of the two would hurt, it would only help.
Ms. Lustgarten, County Attorney, informed the Board (for informational purposes) that during the course of negotiations, there was a fundamental understanding, or an assumption, that the fees in some areas might be higher than others, because of the very factors that are being discussed - the rural areas, the distance to travel, etc., so staff did anticipate a varying fee, based on a particular geographical area.
Mr. Findell, Director of Environmental Services, interjected that, regarding the fact of competitiveness and different rates being charged, felt the Board was going to have a difficult time explaining why one somewhat dense area is being charged a certain fee, and another somewhat dense area is being charged a different fee. He stated the way the boundaries were determined, originally, was by looking at the market share of each individual hauler, and looking at the number of units that were within sections and quarter sections throughout the County, and then trying to match those sections and quarter sections to the market share.
Ms. Joan Gathings, reappeared before the Board stating she was still against mandatory pickup, however, on behalf of the smaller
companies, questioned if they were outbid by the larger companies, what would stop the smaller companies, at the end of this contract, saying they cannot handle the pickups for the lower prices which were bid by the larger companies, and raising the fee - the larger companies would then be out and the residents would be stuck with the larger fee.
Commr. Swartz responded, stating that the best supplier, or vendor, may not necessarily be the lowest bid. He stated the Board is going to have to make sure they keep vendors who can do the service and have at least a competitive fee - not necessarily the lowest one. He stated the Board would not, necessarily, have to throw out the lowest one - noting it is a mix of the numbers - with the two heavyweights being Town & Country and AAA/IWS.
Mr. Adams, Town & Country, informed the Board how Orange County (who went to exclusive franchises first, and then mandatory service) handled the matter of mandatory collection. He stated Orange County did it within an urban service area which had been defined for other purposes, such as fire, police, emergency services, etc. He stated when they went to mandatory service, they had exclusive franchise areas which covered the whole county, but the obligation for mandatory service was just within the urban service area. He stated a resident that lived outside the urban service area was serviced under an exclusive franchise, by a specific hauler, but was under no obligation to take that service. He stated the effect this had on the rate, countywide, was that the rate within the urban service area was lower, and the rate for the rural customer was higher, but that customer did not have to take the service, so a large percentage of the population was not burdened with a higher rate, yet the person in the rural area had an alternative. He also stated how Palm Beach County handled the matter.
Upon being questioned by Commr. Swartz as to whether Orange County, to get to the price they used, negotiated or bid it, Mr. Adams replied that it was a negotiated situation. He stated they
negotiated for exclusive franchises a number of years before they went to mandatory service, and the feeling was that, if they went to mandatory collection, countywide, that the system would be burdened with a high cost of providing mandatory service in the rural areas, so they used their urban service line and threw in what they called "rural cells", which were pockets of urbanized areas which were defined by section, township, and range, in terms of what was urban and what was rural. He stated that, through this negotiating process, they got to where they are today, which is a countywide mandatory service. He stated this could be a way of shedding what the Board feels may be a high cost in low density, by making the difference in urban/rural mandatory versus non-mandatory.
Mr. Findell noted some key differences between the situations in Orange and Palm Beach counties, which Mr. Adams alluded to, and Lake County, in that they had very definite defined urban service areas, and those areas were defined to where they provided utility service. Secondly, neither of said counties were looking to collect all the garbage that was generated in the County, noting that this is the reason this county has looked toward mandatory collection as a mechanism by which they could collect what was generated.
Commr. Bailey stated that there is one problem area, being AAA/IWS, which he feels is going to force the County into a bid process, and is going to force some of the smaller businesses, such as Berry's Refuse, out of business, which he is concerned about. He requested AAA/IWS to try and find some way to come in line with the other bidders.
Commr. Gregg concurred with Commr. Bailey in that it boils down to the fact that AAA/IWS's numbers are hard to explain, as cuts have been made, yet their figures go up, noting that the whole system is going to be jeopardized over one out of four vendors.
A motion was made by Commr. Swartz to authorize staff to prepare a set of bid specifications, bring them back to the Board
for review, and determine what levels of service the Board wants to require in a bid, and to then advertise the bids in such a way as to allow no one to bid more than two areas, of the four that have been designated.
Mr. Findell questioned, since the haulers are allowed to bid on only two areas, what will happen if there is an area that no one bids on, to which Commr. Swartz stated the Board will have to reject the bids, at that point.
Commr. Bakich seconded the motion (for discussion purposes), at which time he recommended amending the motion to give AAA/IWS the opportunity to come back to staff, and the Board, if necessary, and look into the transfer station issue, to see if it will resolve or help the situation, in terms of reducing the price.
Commr. Swartz seconded the amendment made by Commr. Bakich, with the stipulation that, during the period of time that staff is drawing up the bid specifications, if AAA/IWS can submit a revised cost figure which this Board finds acceptable, then he would forego the balance of his motion, to which Commr. Bakich agreed to.
The Chairman called for a vote on the amendment, which was carried unanimously.
The Chairman then called for a vote on the original motion, which failed.
Commrs. Bailey, Hanson, and Gregg voted "No".
Commr. Gregg then made a motion, which was seconded by Commr. Hanson, and carried unanimously, to pursue the matter of the transfer station, with Mr. Findell, Director of Environmental Services, to come back to the Board on April 2, 1991, with some numbers, for their review, and for AAA/IWS to submit to staff some numbers, including a centrally located transfer station, with some language in the proposal that covers a certain radius.
Mr. Findell then brought to the attention of the Board the matter of the annual rate increases, noting that the Board had directed staff to provide them with some information regarding the annual "Refuse Rate Index" (RRI), which serves as a type of
consumer price index for the solid waste industry. He referred to a letter, in the packet which had been given to the Board prior to this meeting, from The Resource Development Group regarding the matter. He questioned whether the Board wanted to use the RRI, or the CPI (Consumer Price Index), and incorporate it within the franchise agreement, or whether they wished not to work with an automatic annual adjustment, and go to an annual rate review, instead.
Commr. Bakich stated that it appeared the CPI, on an average, is lower than the RRI and questioned whether the Board wanted to have the cost to be truly reflective of the garbage, and, if so, does the RRI do that.
Mr. Bill Cummings, Director of Solid Waste, appeared before the Board responding to Commr. Bakich's question, stating that it is the belief of the people that wrote the index that it is a true indicator, noting that the waste industrial plant uses indexes - the National CPI, the Miami based CPI, and the PPI (Producer Price Index).
Discussion continued regarding the indexes, at which time Commr. Bakich requested a definition of the "other" category listed in the indexes, and Commr. Gregg stated he felt the Board should put a cap on whatever price index the County uses.
Mr. Findell stated that using the RRI is a lot more of an administrative headache, if not an expense, than using the CPI, as it is geared toward individual haulers; therefore, the County would have to get into their businesses, in order to be fair to them, as well as fair to the County. He stated if the County goes to the RRI, they will have to get into auditing the haulers' records.
It was the consensus of the Board to go with 60% of the CPI, with a cap of 5%.
There being no further business to be brought to the attention of the Board, the meeting adjourned at 11:45 a.m.
DONALD B. BAILEY, CHAIRMAN
JAMES C. WATKINS, CLERK