Item 11 Staff Report Green Valley Disposal Company Monthly Franchise Fee Late Payment ChargesCouncil Agenda
Date: 7/18/88
Item No. / /
TOWN OF LOS GATOS
Council Agenda Report
DATE: JULY 12, 1988
TO: MAYOR AND TOWN COUNCIL
FROM: DEBORAH SWARTFAGER, TOWN MANAGER
SUBJECT: GREEN VALLEY DISPOSAL COMPANY
MONTHLY FRANCHISE FEE LATE PAYMENT CHARGES
RECOMMENDATION
That Council charge late fee payments totaling $1,999.40 for the period August,
1987-February, 1988 to Green Valley Disposal Company.
DISCUSSION
In preparing the third quarter budget review, staff noted that Green Valley
Disposal Company's monthly franchise fee payments were running two months
behind. A call to Mr. Gerard J. Wen of Green Valley indicated that the
personnel usually involved in franchise fee payment calculations were involved
in the Company's upgraded on-line service conversion, resulting in late
franchise fee payments.
The current Franchise Agreement (March 13, 1983 - attached) calls for certain
late fees if monthly payments are made later than twenty (20) days following
the end of the month. Pursuant to this agreement section, late fees totaling
$1,999.40 were calculated. A letter to Green Valley Disposal Company dated May
4, 1988 detailed the above circumstances and made demand for payment.
(Continued on page 2)
PREPARED BY: BARRY R. LIPTON, Finance Administrator
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7/18-1/COUNC Attachment
cc: Regular Distribution
Green Valley Disposal Company - PO Box 1227, LG 95031 Att: Gerard J. Wen,
Chief Financial Officer and Assistant General Manager
Reviewed by:
TOWN COUNCIL ACTION DIRECTED TO:
ACTION OF COUNCIL:
COMMENTS:
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: GREEN VALLEY DISPOSAL COMPANY
MONTHLY FRANCHISE FEE LATE PAYMENT CHARGES
07/12/88
DISCUSSION (continued)
At the end of May Dennis Varni of Green Valley Disposal contacted staff to
discuss the letter and a potential waiver of fees. Staff indicated that the
request should be placed in writing.
On June 15, 1988 a letter was written by Green Valley to the Council requesting
a waiver of all late fees. The reason given for the waiver is that the delay
was to provide increased service to customers through computerization. While
the increase in customer service is commendable, staff cannot interpret the
Franchise Agreement to allow for any waiver of fees or charges, and would ask
the Council to uphold the decision for an assessment of late fee charges.
FISCAL IMPACT
$1,990.40 will be deposited into Account #010-900-4040 as General Fund revenue.
REVISED 7/12/88
GREEN VALLEY DISPOSAL
FRANCHISE FEE PAYMENTS
Month Due Date Received Days Late Payment Late Fee
August, 1987 9/20 10/27 37 $16,370.38 $163.70 (1%)
September, 1987 10/20 12/21 62 26,499.40 529.99 (2%)
October, 1987 11/20 1/25 66 11,635.26 232.71 (2%)
November, 1987 12/20 3/01 72 11,275.61 225.51 (2%)
December, 1987 1/20 3/28 68 29,861.38 597.23 (2%)
January, 1988 2/20 4/15 55 8,606.96 86.07 (1%)
February, 1988 3/20 5/02 43 16,418.62 164.19 (1%)
March, 1988 4/20 5/2 13 27,984.70 None
April, 1988 5/20 5/20 - 19,316.66 None
May, 1988 6/20 6/20 - 14,676.07 None
$1,999.40
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GREEN VALLEY DISPOSAL COMPANY
P.O. BOX 1227 • LOS GATOS, CA 95031 • PHONE 354-2100
June 15, 1988
Town Council
Town of Los Gatos
P.O_ Box 949
Los Gatos, CA 95031
Re: an assessment for delayed payments
Dear Mayor Carlson and Members of the Town Council:
JUNaa1988
In September 1987, we began to upgrade the customer service
provided by our office to the customers of Los Gatos by changing
our computer software.
The effects of the change include the following:
1_ Reducing the number of times a customer service order or
service change had to be handled. Now one person takes
the phone call and enters the information into the
database, reducing the chances of errors and saving
labor costs and time.
2. Minimizing the customer waiting time on the phone by
eliminating hand-written customer orders. Now they are
typed in.
3. Speeding up the response time on customer billing
inquiries by having the information on the computer
screen instead of having to go into storage to pull out
computer printouts.
4_ Producing a more readable bill.
However these changes, as you can readily understand,
require a transition which disrupted our normal workflow. This
resulted in something that has never happened before...a delay in
franchise payments being remitted to the Town_ Our payments to
you are now back on schedule_
The delay caused an assessment to be made against the
Company for approximately $2,000.
We respectfully request that this assessment be waived.
Thank you for your consideration.
Sincerely,
Gerard J. Wen
Chief Financial Officer &
Assistant General Manager
s
May 4, 1988
TOWN of LOS GATOS
OFFICE OF THE TOWN MANAGER
(408) 354-6832
Gerard J. Wen
Chief Financial Officer and
Assistant General Manager
Green Valley Disposal Company.
P.O. Box 1227
Los Gatos, California 95031
Subject: Franchise Fee Payments
Dear Gerard:
As we discussed on April 29, the Town has received monthly franchise fee
payments through January Only. I understand from your conversation with Barry.
Lipton that personnel involved in the payment calculations have also been
involved in your conversion to on-line service, thereby delaying payments. You
also stated that February and March payments had been processed. Payment was
received on May 2 and future payments will be remitted in a timely manner.
Pursuant to the Franchise Agreement dated March 13, 1983, Paragraph 3 -
Franchise Fee - states in part:
"On or before the 20th day of each month during the term of this
Agreement, COMPANY shall remit to CITY a sum of money equal to ten
percent (10%) of the gross revenues collected by the COMPANY within
the CITY limits during the preceding calendar month as and for a
franchise fee. Provided, however, if the franchise fee is not paid on
or before the 20th day of any month, a late payment fee in an amount
equal to one percent (1%) of the amount owing per month will be
charged for each thirty (30) day period the franchise fee remains
unpaid."
Each payment for August, 1987 - February, 1988 has been received late. Green
Valley Disposal is hereby charged total late fees of $1,999.40 which is due and
payable to the Town by May 20, 1988. The calculations for this payment are
attached.
If you have any questions, please call me at the above number.
Very truly yours,
DEBORAH SWARTFAGER
Town Manager
DS:BRL:pm Attachment
CIVIC CENTER • 110 EAST MAIN STREET • P.O. BOX 949 • LOS GATOS, CALIFORNIA 95031