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

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6.C. - Page 53 of 57 1 I VJ I (-O"y �I ]..\\Ts I,] -( - MEMORANDUM Page 3 of 4 Comment Due to the request for withdrawal coinciding with the end of the term of the current collection agreement, HF&H did not identify any financial obligations as of December 3151, 2020 owed to the JPA from the Town. The current collection agreement is between Recology and the Town and based on our interpretation does not obligate the JPA financially to Recology for costs attributable to the Town as of the date of withdrawal. Additionally, the Town did NOT sign a new agreement with Recology for services to begin January 1, 2021, therefore, any future costs "intended" for the Town in Exhibit N of the model franchise agreement would not be recoverable from the Town. Since each member agency has its own agreement with Recology, our interpretation is that the JPA would not be responsible for any future costs "intended" for the Town. SBR Related Costs/ Obligations Each of the member agencies pays a perton rate for all materials broughtto Shoreway to cover SBR's cost attributed to processing, transfer and transport of the material. This amount is paid during the year on actual tonnage brought to Shoreway from the collection activities within the Town. There is no minimum tonnage requirement. Comment The gate rate (per tan tip fee for material received by SBR) is calculated each year in accordance with the compensation section of the agreement. Briefly, the first year's proposed costs by various cost categories were totaled and then divided by the anticipated inbound tons (357,725 inbound tons net of recycling, and 74,922 recycling tons (Threshold Tons)). Each year thereafter the cost categories are adjusted by prescribed indices based on the category and per ton rates are adjusted appropriately. The gate rate for the first year of the agreement included fixed and variable components. The fixed costs are therefore "paid" with the Threshold Tons received by SBR. Inbound tons have consistently been above the Threshold Tons). Therefore, the fixed component on the "excess tons" is considered extra profit to SBR. Since the reduction of approximately 9,600 inbound tons related to Town's withdrawal would come out of the "excess tons", we believe there would be no liability related to SBR costs and/or obligations. There should be no financial obligation owing SBR at the end of the calendar year unless an error in reported tons is discovered when the year-end reporting is reviewed or if the inbound tons fall below the Threshold Tons forthe calendar year ending December 31, 2020. SBWMA Related Costs/Obligations The SBWMA provided the following list of potential SBWMA liability categories that may qualify as incurred at the time of the Town's potential withdrawal from the JPA. • Contracts for long term services at a fixed amount in the future. o Accounting Services contract with Redwood City o Three year information systems contract o Legislative lobbying contract • Insurance premium liabilities for active policies with renewal dates after January 1, 2021 • Audit fees paid in 2021 that pertain to the 2020 calendar year SBWMA BOD PACKET 08/20/2020 AGENDA ITEM: 5A ATTACHMENT 5 - p3