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6.C. - Page 4 of 57
<br />$0.52 would be added to current franchise tip fees, which range from $127/ton to $141/ton. The
<br />projected impact of this increase to the individual Member Agencies is shown in the chart below:
<br />Note: On September 8, 2020, SBWMA received a letter from Recology stating that if Atherton withdraws
<br />from the Authority, it believes the remaining Member Agencies should be responsible for a portion of
<br />Atherton's share of the compensation: the Allocated Indirect Costs, including profit, assigned to Atherton
<br />in the 2021 Final Compensation Report, which Recology has determined to be $386,451. Recology would
<br />like this amount to be proportionally reallocated amongst the remaining 11 Members based on the same
<br />methodology used to historically determine their proportionate share of indirect costs (report can be
<br />found at httos://rethinkwaste.oriz/wo-content/uploads/2020/09/9 A EXHIBIT-A-SBWMA-Final-ReDort-
<br />Reviewing-Recology-2021-Comp-App.pdf) ). Under this method, according to Recology, percentage
<br />changes to the remaining Members resulting from the reallocation would range from 0.24% to 0.56%.
<br />(The Recology letter is attached as Attachment C.)
<br />SBWMA staff have reviewed Recology's letter and the model Restated Franchise Agreement, and do not
<br />agree that the remaining 11 Members have an obligation to assume Atherton's Allocated Indirect Costs
<br />upon its withdrawal. Each Member Agency has a separate franchise agreement with Recology, which,
<br />under its terms, became binding and effective between the parties as of the date two-thirds (8) of the
<br />Member Agencies approved and signed the agreement in April 2018. The annual compensation report
<br />assigns an individualized total compensation amount due to Recology from each Member Agency; there
<br />is no contractual mechanism requiring one Member Agency to compensate Recology for another Member
<br />Agency's failure to meet that compensation amount, or to assume the obligations that a withdrawn
<br />Member Agency may have had to Recology had it not withdrawn. As such, a vote to approve Atherton's
<br />Page 4 of 5
<br />AL .
<br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org
<br />35
<br />Dollar
<br />Percentage of
<br />Amount of
<br />Total Tip Fee Tons
<br />Allocation
<br />Allocation
<br />Belmont
<br />13,240
<br />5%
<br />$6,898
<br />Burlingame
<br />33,910
<br />12%
<br />$17,668
<br />Unincorporated
<br />County
<br />8,457
<br />3%
<br />$4,407
<br />North Fair Oaks
<br />8,603
<br />3%
<br />$4,482
<br />East Palo Alto
<br />16,370
<br />6%
<br />$8,529
<br />Foster City
<br />16,345
<br />6%
<br />$8,516
<br />Hillsborough
<br />8,208
<br />3%
<br />$4,277
<br />Menlo Park
<br />34,995
<br />12%
<br />$18,234
<br />Redwood City
<br />55,248
<br />20%
<br />$28,786
<br />San Carlos
<br />21,061
<br />7%
<br />$10,973
<br />San Mateo
<br />60,957
<br />22%
<br />$31,761
<br />West Bay Sanitary
<br />District
<br />4,276
<br />2%
<br />$2,228
<br />SBWMA
<br />281,671
<br />100%
<br />$146,760
<br />Note: On September 8, 2020, SBWMA received a letter from Recology stating that if Atherton withdraws
<br />from the Authority, it believes the remaining Member Agencies should be responsible for a portion of
<br />Atherton's share of the compensation: the Allocated Indirect Costs, including profit, assigned to Atherton
<br />in the 2021 Final Compensation Report, which Recology has determined to be $386,451. Recology would
<br />like this amount to be proportionally reallocated amongst the remaining 11 Members based on the same
<br />methodology used to historically determine their proportionate share of indirect costs (report can be
<br />found at httos://rethinkwaste.oriz/wo-content/uploads/2020/09/9 A EXHIBIT-A-SBWMA-Final-ReDort-
<br />Reviewing-Recology-2021-Comp-App.pdf) ). Under this method, according to Recology, percentage
<br />changes to the remaining Members resulting from the reallocation would range from 0.24% to 0.56%.
<br />(The Recology letter is attached as Attachment C.)
<br />SBWMA staff have reviewed Recology's letter and the model Restated Franchise Agreement, and do not
<br />agree that the remaining 11 Members have an obligation to assume Atherton's Allocated Indirect Costs
<br />upon its withdrawal. Each Member Agency has a separate franchise agreement with Recology, which,
<br />under its terms, became binding and effective between the parties as of the date two-thirds (8) of the
<br />Member Agencies approved and signed the agreement in April 2018. The annual compensation report
<br />assigns an individualized total compensation amount due to Recology from each Member Agency; there
<br />is no contractual mechanism requiring one Member Agency to compensate Recology for another Member
<br />Agency's failure to meet that compensation amount, or to assume the obligations that a withdrawn
<br />Member Agency may have had to Recology had it not withdrawn. As such, a vote to approve Atherton's
<br />Page 4 of 5
<br />AL .
<br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org
<br />35
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