AgdaPkt 2018-03-26 Joint SA PFA - Laserfiche WebLink

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To facilitate the negotiation process, the SBWMA Board of Directors appointed an Ad Hoc Franchise Agreement Extension (FAX) Committee that included SBWMA staff, consultants and appointed City staff to negotiate with Recology representatives to arrive at a mutually agreeable Amended and Restated Model Franchise Agreement and Cost for Collection Service. City Manager Melissa Stevenson Diaz served as Vice Chair for the FAX Committee. The FAX Committee met with Recology from November 2016 to June 2017. The City Council received a presentation on May 22, 2017 that provided an overview of the negotiation process and outlined the key provisions of the model Amended and Restated Franchise Agreement. The SBWMA Board of Directors approved the model Franchise Agreement on June 22, 2017. Throughout the negotiations process, the SBWMA worked closely with Recology in order to streamline the Franchise Agreement and clarify service expectations. The recommended Franchise Agreement language is approximately 90% unchanged and has been reviewed by legal counsel from the SBWMA, Recology and Redwood City. ANALYSIS The recommended Franchise Agreement would provide: · Consistency with all existing solid waste, recycling and organics services; · No new-service provider transition requirements and costs (e.g. container switch- out, customer service center setup, driver route training, fleet acquisition and deployment, etc.); · Rate-setting stability/predictability and rates that continue to be comparable with other Bay Area communities; and · Cost savings through shared future inflation risk with Recology and avoided RFP procurement process and contractor transition costs. Some key provisions of the Franchise Agreement include: Term The recommended term of the agreement is fifteen years. This enables Recology to use both current and new vehicles, thereby reducing depreciation expenses by approximately $1.7 million per year over all Member Agencies. At Redwood City’s discretion, and subject to Recology’s consent, the term may be extended without amendment for an additional one to five years. Recology Compensation The Base Contractor’s Compensation for 2021 would be $64,225,644. This assumes a 15-year term and the inclusion of depreciation expense for replacement collection 6.2.B. - Page 2