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Page | 14 SBWMA Recology Negotiations FAX Report 4/20/17 <br /> <br />eight of the Member Agencies are not formally in contract with Recology by December 31, 2017, (in <br />accordance with section 7.1.1.c of the Agency’s overarching JPA agreement). <br />4.2 Benefits of the Negotiated Recology Offer <br />Recology has been a proven and reliable partner over the last seven years and has provided excellent <br />service to the SBWMA community. The negotiations team recognizes that Recology’s cost of operations <br />are similar to other companies (industry experts have verified that Recology’s costs are within industry norms) <br />and that no large cost savings are likely to be gained by installing a new collection contractor. Additionally, it <br />is important to recognize that Recology has provided excellent service to the SBWMA community and that <br />there is no guaranty that another service provider will meet the same standards. The FAX committee believes <br />that the negotiated deal to be considered by the SBWMA Board provides: <br /> Consistency with all existing solid waste, recycling and organics services. <br /> No new-service provider transition pitfalls (i.e., container switch-out, customer service center <br />setup & billing setup, driver route training, hard-rollout a new truck fleet, developing a new rate setting <br />process, and end-of-contract buyouts (e.g. Allied Waste’s exit). <br /> Rate-setting stability/predictability after an initial rate true-up, rate increases are tied to indices. <br /> SBWMA rates will continue to be in-line with Bay Area communities. <br /> Continued cost savings from collection efficiencies gained by Recology’s years of experience. <br /> Sharing of future inflation risk by Recology beginning with their 2021 Cost Proposal. <br /> Avoidance of an estimated $2-3 million in avoided RFP and potential contractor-transition costs. <br /> Labor peace by continuing with a known company and management team. <br />5. Agreement and Financial Results <br />This section details the financial impact associated with the agreed upon compensation package and Model <br />Franchise Agreement. <br />5.1 Amended and Restated Agreement <br />Over the past few months the SBWMA has worked closely with Recology in reviewing the 2013 <br />amended Franchise Agreement to streamline and make critical changes that will enhance the overall <br />clarity and productivity of the document. This document’s language is approximately 90% unchanged <br />and received legal review by both the SBWMA and Recology’s legal counsel. It is important to note that, <br />while this document is substantively complete, it still must complete a final, comprehensive legal <br />review. This review will be completed in early May and a final proposed Model Franchise Agreement <br />document will be distributed in the May 25th SBWMA Board agenda packet. (A section-by-section <br />summary of the proposed changes can be seen in Attachment G). <br />7.A - Page 24