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6.C. - Page 50 of 57 <br />Additional Cost Analysis for the Town of Atherton's Withdrawal I July 22, 2020 1 pg 5 <br />Scenario 5: this Scenario includes Scenarios 2 and 3 and proposes additional reductions in the <br />allocation of the 2019A bonds relating to the 2009 projects, similar to the argument made for <br />the "overpayment" credit, but in addition thereto. Under this Scenario, the Authority would <br />end up owing money to Atherton. This Scenario makes additional assumptions relative to past <br />cost -allocation, which strikes us as inappropriate at this point in time. We assume that the <br />additional adjustments for past expenditures relating to multifamily and commercial <br />generations are not double counted, but there is insufficient information for us to tell. <br />Conclusion <br />The Joint Powers Authority Agreement for SBWMA provides that the Authority's Board is tasked <br />with determining Atherton's exit cost. The Board's determination should be based on a reasoned <br />approach that achieves a fair and equitable result. Our analysis calculates Atherton's proportionate <br />share based on the formula used by the Authority over the years in setting its rates — percentage of <br />franchise tonnage of the member agencies. This methodology is straightforward and consistent with <br />the plain language of the joint powers agreement and past rate setting practices; in our opinion, it <br />constitutes a reasonable basis for determining a member's proportionate share of liabilities. <br />The situation before the Authority - calculating the cost for a member to exit the JPA - is not usual in <br />our practice. But what is common is that when agreements are terminated before the end of their term <br />there is some penalty, premium, breakage fee, or make -whole payment made by the party exercising <br />their option. Whether that analogy is relevant to the Authority's situation is better answered by the <br />Authority. <br />1300 Clay Street, Suite 1000 I Oakland, CA 94612 I Main 510-839-8200 I Fax 510-208-8282 <br />1451 Quail Street, Suite 200 I Newport Beach, CA 92660 I Main 949-346-4900 I Fax 510-208-8282 <br />5757 W. Century Boulevard, Suite 700 I Los Angeles, CA 90045 I Main 310-348-2901 I Fax 510-208-8282 <br />81 <br />