Travis County Commissioners Court
January 29, 2008
Item 8
8 is to approve modification 3 to con ralk number 07 t 0000 j, waste management of Texas for refuse collection.
>> Commissioner cyd grimes purchasing agent . We're here to ask the court to consider a price increase for the waste management contract. We have had this contract, we awarded the contract back in January of '07. This will be the third modification to extend it and also give a ten percent price increase. Waste management had requested a 25 percent increase based on audit of their operational and disposal expenses. It's not just increase in fuel. It's all operating costs. I negotiated with them and got them down to a ten percent increase. This amount will make the current contract amount up to 180,714 which is still lower than the second bid that we received when we bid these out a year and a half ago. So although this they have had a couple of price increases and they are asking for this one, it's still below the low bidder a year and a half ago. So if we were not to agree to this, they are required, it's your, at our dilges creg whether we allow the price increase or not. And then deal with those issues if we--
>> what language does the contract contain regarding price increase?
>> it says that the prices offered shall remain firm for the period of the contract. The prices offered shall also remain firm for the option year should the county choose to exercise the option to renew except for changes that are industrywide and beyond the control of the contractor. If such changes do occur, it will be the responsibility of the contractor to provide documentation to Travis County substantiating the changes to the bid prices. Any price changes must be approved by Travis County.
>> did the contractor provide documentation to support the increase?
>> the information they provided is that based on their cost. I didn't have any reports or financial information or a lot of data to look at. We basically, they said they had an audit and their operational and disposal prices had increased and they were requesting the 25 percent. I’ve negotiated them down to ten percent am we do have representatives here. They have data on that. Do you all have any of that specific data from your audit that talks about your costs? Would you like to come up? Would you like for them to address that?
>> I think it would help to get some on the record plus a name. We need you on the microphone here. Just give us some example of the kinds of increases that you experienced that led to you request the price increase.
>> my name is fred hairs son. Appraisal manager. This is lisa mccrane, the sales manager for san antonio.
>> what kinds of increases have you experienced?
>> one of the price increases, the landfill itself has gone up. If you look at the gate rate, it's pretty self evident. We can get that to show the gate rate since the contract in 2006 it's gone up. I think it was $21 a ton then and I think it's $31 now.
>> gate rate now?
>> 31 now.
>> tell him what that means.
>> pen you pull into the gate, the rate they charge anybody per ton when they come into the landfill.
>> waste management charges anyone?
>> right. You will find that any of the landfills, even the other competitors landfills also have had increases that kind of parallel that. Though we don't use those landfills. Of course the fuel increase. That's self evident since 2006. The increases, that impacts through outthe industry, the steal we build the trucks with and increases for vehicles, capital increases. So we can get those from the industries themselves and show their percentages of increases if would like those.
>> just general increases in the cost to operate basically.
>> pretty much across the board, right. A lot of it is tide back to fuel. Fuel impact and rippling through other portions of the industry.
>> how much money are we talking about?
>> it's a total amount of will 4300 this, a ten percent increase. All the departments are aware. It's only about 4300 more than it was of again, it gets us up to an estimate of about 180,714 a year.
>> questions?
>> move approval.
>> I’m confused about the gate rate. Fuel and still sounds like industrywide and beyond the control of the contractor. But the gate rate, it's the gate rate that waste management is charging, correct?
>> uh-huh.
>> so how--
>> I get passed along, I get charges, increases for them. You have to keep within a certain percentage even though you are the largest customer that come in a landfill, even if you own the landfill, there are regulations that keep you in a percent amming. When it moves, my internal rate moves for myself. I get price increase.
>> okay. And you're stating that that gate rate increase is industrywide and beyond the control of the contractor.
>> in fact, you can't. As a hauling compania control what the landfill does. Even though it's a separate division. They set the rate.
>> one pocket into the other.
>> looks that way until we do budgets.
>> yeah. I’m actually asking, you have, you're saying that's an industry--
>> you can check it. The ail eyed landfill next-door to us, their increase is pretty much like ours, might be a little more. Tgf on the south I’d I think you will also see has an increase. Whether it's the exact same percentage I don't know but it has been an increase. We can get that. That's easily attainable.
>> anything further? All mfavor of the motion. Show Commissioners Gomez, December ty and yours truly voting in favor. Commissioner eckhardt also. Commissioner Davis voting against had sm.
>> abstaining.
>> abstaining. Thank you very much.
>> thank you.
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Last Modified:
Wednesday, January 30, 2008 8:09 PM