AgdaPkt 2020-10-26 Joint SA PFA - Laserfiche WebLink

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6.C. - Page 16 of 57 Dollar Total Tip Fee Percentage of Amount of Next Steps The Board's determination of the liquidation costs is a final administrative decision which is not subject to appeal. Once the Board makes this determination, Atherton is then required to secure approval of withdrawal by "a 4/5 affirmative vote of Equity Members." (Article 15.1.c.) Approval by the governing board of each Member Agency is required because Article 15 makes a distinction between the process for determination of the liquidation amount, which is made by the SBWMA Board, and the approval to withdraw, which is made by the Equity Members. Given that SBWMA consists of twelve Equity Members, ten of them will need to approve the withdrawal before it can become effective. This means that each Member Agency's governing board will need to place the matter on its agenda for consideration, mirroring the process used when the JPA itself was amended. Atherton has suggested that Article 15.1.c be interpreted differently, and that the approval to withdraw does not need to go to each Member Agency, rather, it can be made by a 4/5 vote of the Board, because the Board consists of representatives from each Member Agency. Staff does not agree with this interpretation. As noted above, the JPA makes a distinction in Article 15 between the Board and Equity Members. The Board is required to determine the liquidation amount, the Equity Members are required to approve the withdrawal. Under the JPA, "Board" is defined as the governing Board of Directors of the SBWMA, comprising one Director from each of the Members. "Member" is defined as the public entity itself. If the parties had intended that the Board to make the decision, they would have written the JPA to say that; instead, the JPA language requires the final approval for withdrawal go to the individual entities. In staff's opinion, if the Board were to take action to approve the withdrawal, that action would be void because the Board has no authority to approve a Member's withdrawal under the terms of the JPA. The Board is asked to adopt the resolution attached to the staff report, Attachment 6, determining the method to be used to calculate Atherton's proportionate share of outstanding debt. The resolution further recommends to the Equity Members (Member Agencies) that they approve Atherton's withdrawal upon payment of the exit obligations as determined by the Board. Pursuant to Section 15.1 a., each Member Agency's approval will be contingent upon and not effective until Atherton has liquidated its obligations calculated in accordance in accordance with the SBWMA BOD PACKET 8/20/2020 AGENDA ITEM: 5A - p8 47 Tons Allocation Allocation Belmont 13,240 5% $6,898 Burlingame 33,910 12% $17,668 County 8,457 3% $4,407 No. Fair Oaks 8,603 3% $4,482 East Palo Alto 16,370 6% $8,529 Foster City 16,345 6% $8,516 Hillsborough 8,208 3% $4,277 Menlo Park 34,995 12% $18,234 Redwood City 55,248 20% $28,786 San Carlos 21,061 7% $10,973 San Mateo 60,957 22% $31,761 West Bay Sanitary 4,276 2% $2,228 SBWMA 2811671 100% $146,760 Next Steps The Board's determination of the liquidation costs is a final administrative decision which is not subject to appeal. Once the Board makes this determination, Atherton is then required to secure approval of withdrawal by "a 4/5 affirmative vote of Equity Members." (Article 15.1.c.) Approval by the governing board of each Member Agency is required because Article 15 makes a distinction between the process for determination of the liquidation amount, which is made by the SBWMA Board, and the approval to withdraw, which is made by the Equity Members. Given that SBWMA consists of twelve Equity Members, ten of them will need to approve the withdrawal before it can become effective. This means that each Member Agency's governing board will need to place the matter on its agenda for consideration, mirroring the process used when the JPA itself was amended. Atherton has suggested that Article 15.1.c be interpreted differently, and that the approval to withdraw does not need to go to each Member Agency, rather, it can be made by a 4/5 vote of the Board, because the Board consists of representatives from each Member Agency. Staff does not agree with this interpretation. As noted above, the JPA makes a distinction in Article 15 between the Board and Equity Members. The Board is required to determine the liquidation amount, the Equity Members are required to approve the withdrawal. Under the JPA, "Board" is defined as the governing Board of Directors of the SBWMA, comprising one Director from each of the Members. "Member" is defined as the public entity itself. If the parties had intended that the Board to make the decision, they would have written the JPA to say that; instead, the JPA language requires the final approval for withdrawal go to the individual entities. In staff's opinion, if the Board were to take action to approve the withdrawal, that action would be void because the Board has no authority to approve a Member's withdrawal under the terms of the JPA. The Board is asked to adopt the resolution attached to the staff report, Attachment 6, determining the method to be used to calculate Atherton's proportionate share of outstanding debt. The resolution further recommends to the Equity Members (Member Agencies) that they approve Atherton's withdrawal upon payment of the exit obligations as determined by the Board. Pursuant to Section 15.1 a., each Member Agency's approval will be contingent upon and not effective until Atherton has liquidated its obligations calculated in accordance in accordance with the SBWMA BOD PACKET 8/20/2020 AGENDA ITEM: 5A - p8 47