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Mr. Meisner supported the staff recommendation regarding the blending of rates for rate calculation purposes. <br />He did not want to do anything to affect the progressivity of rates. Regarding the franchise issue, he said that <br />was a difficult question. He asked if other communities had found a way to limit service to days of the week as <br />opposed the a geographic area, or if they had addressed the issue of recovering costs for the roadbed <br />deterioration from a multiplicity of haulers. Mr. Hobson responded that in Oregon, there were no other <br />jurisdictions that allowed competition in a given geographic area. Mr. Meisner said it appeared choice was not <br />a value in those communities. Mr. Hobson said that could be inferred. In California, there were commercial <br />licences issued by haulers that allow them to compete for commercial businesses, but he was unaware of any <br />franchised areas that allow more than one hauler to operate. Regarding the deterioration of the streets, some <br />communities use the franchise fee as a means of recovering the costs associated with road maintenance and <br />other impacts. Ms. Young indicated the City's fees did not include that cost. <br /> <br />Ms. Nathanson said that all taxpayers were paying a premium to have multiple haulers through the overall <br />increase in cost, the added noise, and the added street deterioration. She asked if there was a way to ensure <br />service reliability with a system redesign. Ms. Young said that she checked with Portland on how that city's <br />switch to territories had worked. Complaints had gone up initially, but everyone who called in indicated they <br />had to give up the best hauler in the city and had acquired the worst one, suggesting that the answer depended <br />on who one talked to. Mr. Hobson said that it is possible in a franchise system to monitor customer service <br />offered by the haulers, and to establish incentives for performance and penalties for lack of performance. <br />Incentives could include tying a hauler's allowed profit to customer service standards. Mr. Hobson said that in <br />regard to penalties, many cities identify an acceptable threshold level of service and a liquidated damage <br />amount for complaints reported above that level. <br /> <br />Ms. Nathanson asked if it was possible to design a fair franchise system that allowed the haulers to recover a <br />fair profit. Mr. Hobson said he believed it was possible. It would be easier to design for residential haulers <br />than for commercial haulers because of the bin sizes and frequency of collection of commercial accounts. <br />Were the City to establish territories, he recommended that it work closely with the current haulers to <br />determine how to keep the level of revenue the same as the haulers currently enjoyed. He thought the more <br />difficult issue was how to establish territories that provide an equal amount of growth potential, which could <br />come in the form of new customers or new services. <br /> <br />Mr. Johnson asked Mr. Hobson if he had worked with a city where the haulers were asked to negotiate with <br />each other before approaching the municipality about territories. Mr. Hobson said he had not, although he was <br />aware that was the approach Portland took before it went to a franchise system. <br />Ms. Nathanson said the council needed to balance business interests with residential and consumer interests. <br />In some cases the citizens were not aware of some of the hidden costs of the existing system. She asked if any <br />cities had shifted from a franchise system to a system that resembled Eugene's. Mr. Hobson was not aware of <br />any cities that had shifted from an exclusive franchise to an open system. He was aware of cities that had <br />moved from a single provider to multiple providers with each provider providing a different service within the <br />same service area. <br /> <br />Mr. Farr commented that the community relied on garbage service, and the haulers had demonstrated a great <br />deal of flexibility in adapting to city regulations. He was happy with the situation in Eugene and thought the <br />community had a good system in terms of recycling and system efficiency. <br /> <br /> MINUTES--Eugene City Council June 11, 2001 Page 4 <br /> Work Session <br /> <br /> <br />