AgdaPkt 2016-05-09 Interview, Closed and Joint SA PFA

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6.3.B. - Page 6 Agency governing bodies who ultimately approve any changes to their individual Franchise Agreements, including any unique scope items requested by the Member Agency. • The JPA staff will take the lead in preparing rate revenue requirement projections, including different scenarios reflective of potential changes to the Franchise Agreements. JPA staff's work will include building a baseline proforma model that identifies Recology's current compensation vs. their actual operating costs (as provided by Recology). The model will also cover other factors such as pass-through costs (i.e., mainly processing and disposal costs). Future pass-through costs may be affected by changes to contracts with third party vendors (e.g., Republic Ox Mountain landfill), Shoreway capital improvement scenarios (per the Long Range Plan), etc. This baseline model will be provided to the Board prior to the start of formal contract negotiations. • Also prior to the start of negotiations, JPA staff with input from the TAC, will prepare a high level analysis of Recology's performance in meeting the Franchise Agreement performance standards and meeting the original goals of the contractor selection process that resulted in the selection of Recology as the service provider. As part of the performance review, Recology will be requested to prepare its own written self-review. • If applicable, the JPA staff will take the lead in developing and managing a collection services contractor RFP and selection process if directed by the Board. Such a process would be concluded in time to ensure franchised collection service is provided uninterrupted after expiration of the current Franchise Agreements on December 31, 2020. • The Recology Franchise Agreement extension process outlined in this document does not include the potential extension to the Shoreway Operations Agreement which expires on December 31, 2020. The term extension provisions of that Agreement allow the JPA unilateral discretion to extend the Agreement for up to three additional one-year periods on the current terms and conditions. Such current terms and conditions are very financially beneficial to the JPA as has been discussed at several Board meetings. Timeline Current — Spring 2016 Member Agency governing bodies decide whether to be part of joint effort to negotiate a potential Franchise Agreement extension with Recology. This timeline allows for any Member Agencies that want to conduct any formal community outreach, if so desired, regarding this decision. Fall 2015 — Spring Complete analysis of Recology actual collection costs 2016 including building a baseline financial model to use in future projection of collection costs. This work will include identifying any significant variances and how such variances may affect future collection costs.