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REV: 10-31-23 MI Phase II: Conduct Franchise Fee Cost Review Task 2a: Develop Franchise Fee Cost Model. Consultant shall develop an analytical model specific to the franchise fee valuation methodology selected by the stakeholder team in Task 1b. The analytical model shall be prepared in a transparent and easy-to- follow manner to allow the City’s various stakeholders to understand and communicate it. Consultant shall present the analytical framework to the City’s stakeholder group and gather input on data concerns, assumptions required, legal viability, or to further refine the approach. Based on the information gathered from that input cycle, Consultant shall finalize the model. Consultant shall review and quantify various costs related to managing the City’s franchise agreement with Recology, the cost of solid waste/litter collection by City staff, and/or costs incurred to mitigate the impacts of Recology’s operations, which may or may not include: •City staff time necessary to being a participating member of any local/regional solid waste/recycling-related commission and to manage the franchise agreement with Recology (e.g., rate setting, contract compliance monitoring, contract negotiations, enforcement). •City outreach costs related to recycling and organics programs, not already covered by an interfund transfer from the City’s General Fund. •Street tree trimming necessary to allow large collection vehicles to access City streets. •Annual road maintenance costs resulting from the degradation of streets caused by the heavy collection vehicles on residential streets which are not constructed for such heavy vehicles. •Storm drain trash capture Operating & Maintenance (O&M) costs. Consultant shall review and quantify any O&M costs related to the installation and/or on-going maintenance costs. •Encroachment value of containers (carts and bins) in the City’s right-of-way on collection days. •City code enforcement/anti-scavenging costs. The specific areas of analysis shall be based on feedback received from the City Attorney and/or outside counsel received during Phase I. Task 2b Calculate Franchise Fee Valuation. Consultant shall calculate the franchise fee value based on the methodology approved by the City Attorney’s office in Task 1b, the analytical framework prepared in Task 2a and reviewed by the City, and the data gathered in Tasks 1c and 2b from the City and outside parties. The preliminary calculations will be shared with appropriate members of the City’s stakeholder team and Consultant anticipates up to 2 rounds of review and comment on the calculations prior to finalizing the calculations and preparing the report (Task 2c). Task 2c Report on Franchise Fee Value. Consultant shall prepare a franchise fee valuation report or memorandum (depending on approach selected by City ATTY/AGR.2023.265/HF&H Consultants, LLC (Franchise Fee Study) (Page 12 of 14)