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RE: [greenyes] In Search of Sample contract language for fuel escalation clauses


Blair

Try the City of Charlotte. I seem to recall that they had a fuel clause in
the managed comp contracts. Alvin Woods would be a good contact for that
question.

-----Original Message-----
From: Young, Susan [mailto:Susan.Young@no.address]
Sent: Tuesday, October 18, 2005 3:12 PM
To: Blair Pollock; greenyes@no.address
Subject: RE: [greenyes] In Search of Sample contract langauge for fuel
escalationclauses


I do NOT include a fuel usage increase in my contracts, for several
reasons.

1. Fuel is a small percentage of the total costs of doing
business...typically less than 7% for a hauling operation. Personnel,
employee benefits, capital costs of trucks and buildings, O & M on
trucks, Workers Comp, company profits, etc etc etc are vastly more by
percentage, in determination of "costs." Health costs, for example,
have increased by 50 - 60% in some places, but I don't hear about a
"health cost escalation clause" in any contracts! (and no, I won't put
that in either!)

2. An automatic fuel escalator provides no incentive for companies,
or cities like mine, to become more efficient in our routing, purchase
vehicles with increased efficiencies, or work on other economies in our
operation.

3. I often hear pleas for fuel escalators, but have yet to see
language in such escalators that bring the costs DOWN as the fuel costs
come down. For instance, fuel around here is "down to" 2.39. If I was
paying the escalator from the 2.99 days.....would a company let me know
that they didn't need that rate any more?

4. As we blithely pay fuel escalators, and pass them on to our
customers, we can more easily forget that several oil companies are
posting record profits, paying record dividends to their shareholders,
and have record amounts of Proven Reserves in the lower 48. Occidental
Petroleum, for example, announced a 16% dividend increase on 10/13/05, a
dividend rate 44% higher than in 2002. The last time oil companies
posted such profit increases during oil shortages with high prices,
there were investigations into Obscene Profits....I've heard nothing
lately. In fact, the last Energy Bill passed by Congress provides
drilling incentives to these "strapped" operations.

I have listened for good reasons to include escalators in contracts, and
will continue to do so.....but I have yet to hear any truly Good
Reasons.

Susan Young, Director
Minneapolis Solid Waste and Recycling Services

-----Original Message-----
From: Blair Pollock [mailto:bpollock@no.address]
Sent: Tuesday, October 18, 2005 1:40 PM
To: greenyes@no.address
Subject: [greenyes] In Search of Sample contract langauge for fuel
escalationclauses

Hello: We could use some help from anyone who has contract language on a
fuel escalation clause, in our case it's for curbside recycling but
certainly an obvious necessity in this day & age for any hauling, but
not sure how to proceed. You can post the langauge you have to the
digest or send directly to me: I appreciate it.


If everyone in Orange County recycled two more aluminum cans a week
we would recycle over twelve million more cans a
year.__________________________________________________

Blair Pollock
Solid Waste Planner
(919) 968-2788
fax: (919) 932-2900
PO Box 17177
Chapel Hill, NC 27516-7177






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