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HomeMy WebLinkAboutMINUTES - 04092013 - D.1RECOMMENDATION(S): 1. RECEIVE a presentation from Chris Lehon, the Executive Director of the West Contra Costa Integrated Waste Management Authority (“Authority”) describing the proposed terms of the new Post-Collection Services Agreement between the Authority and Republic Services Inc. as well as the associated collection service enhancements being offered to the County and West County cities; 2. DIRECT the Director of Conservation and Development to transmit any County Board of Supervisor revisions to the Draft Term Sheet for the new Post-Collection Services Agreement between the Authority and Republic Services Inc. (Exhibit A) to the Authority Board of Directors for consideration at their meeting on April 11, 2013; 3. DIRECT the Director of Conservation and Development to request that the County Board of Supervisors be provided with a voting seat on the Authority’s Board of Directors in order to provide for adequate representation for ratepayers in the unincorporated areas falling within Authority’s service area; and 4. DIRECT the Director of Conservation and Development and County Counsel to confer on the need to amend the County’s agreements with Republic Services Inc. and the Authority for collection and post-collection services for the unincorporated West County areas beyond October 2013 consistent with the principles described in this Board Order and report back to the Board of Supervisors. FISCAL IMPACT: No impact to the General Fund. Costs associated with collection franchising and associated collaboration with the West Contra Costa Integrated Waste Management Authority is covered within the Department of Conservation and APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 04/09/2013 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Deidra Dingman - 674-7203 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: April 9, 2013 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: D. 1 To:Board of Supervisors From:Catherine Kutsuris, Conservation and Development Director Date:April 9, 2013 Contra Costa County Subject:Draft Term Sheet for a Post Collection Service Agreement between the West Contra Costa Integrated Waste Management Authority and Republic Services Development's operating budget. BACKGROUND: The West Contra Costa Integrated Waste Management Authority (“Authority”) is a joint powers agency created on April 2, 1991 by the cities of El Cerrito, Hercules, Pinole, Richmond and San Pablo. There are seven voting seats on the Authority Board of Directors which are filled by City Council members designated by the five Member Agencies. Representation on the Board of Directors consists of three Richmond City Council members and one City Council member from each of the four remaining cities. The Authority is responsible for providing post-collection processing services (disposal, recyclables processing, composting and management of household hazardous waste) for the waste stream governed under the franchise agreements administered by the five Member Agencies as well as the waste stream governed by the County’s franchise agreement with Richmond Sanitary Service. The Authority also implements a variety of waste diversion programs targeting the waste stream generated within the above mentioned West County franchise areas. The Authority participated in the public-private partnership responsible for financing the development and operation of the Integrated Resource Recovery Facility (IRRF) located on Pittsburg Avenue in North Richmond. In July 1993, the County Board of Supervisors approved a Land Use Permit allowing the development and operation of the IRRF. In May 1993, the County and Authority entered into an agreement (“County/Authority Contract”) to provide for, among other things, joint regulation of the IRRF. The Authority (also known as RecycleMore) separately contracts with Republic Services, Inc. (Republic) for post-collection services including recyclables processing, composting, operation of a household hazardous waste facility, and the transfer, transportation and disposal of solid waste. The current post-collection service contracts expire on December 31, 2013. The Authority conducted a competitive Request for Qualifications and Statement of Interest (SOI) procurement process for the post-collection processing and disposal services required within the West County areas franchised by each of its Member Agencies and the County. An evaluation team reviewed the proposals from six companies. The two highest rank proposals were submitted by Republic and Waste Management Inc. As the collection service provider to the majority of the service area, Republic offered some enhanced collection services in addition to the range of requested post-collection services. On December 13, 2012, the Authority Board of Directors directed Authority staff to enter into negotiations with Republic to develop a mutually agreeable Term Sheet. Over the past several months, Department of Conservation and Development (DCD) staff has been engaged with staff from the Authority and the five Member Agency cities to work with representatives of Republic on issues related to Republic's Draft Term Sheet. The Draft Term Sheet provides a framework for developing agreements for post-collection and enhanced collection services beyond December 31, 2013. The Draft Term Sheet covers the key financial and operational considerations for a new agreement including: contract term, program/service descriptions, compensation approach, adjustments to compensation, public education and outreach approach and requirements, insurance and performance surety, approach to performance standards and reporting requirements. Staff presented Republic’s Draft Term Sheet to the Authority Board of Directors at their meeting on March 14, 2013. Authority and Republic representatives reported that they are in substantial agreement on the Term Sheet and were prepared to negotiate a new contract on the basis of those terms. The Authority Board of Directors requested final pricing from Republic and directed Authority staff to present/discuss the Term Sheet with the respective city councils of the Member Agencies and the Board of Supervisors prior to the next Authority Board of Directors meeting on April 11, 2013. The Authority plans to begin negotiating contract language over the next several months and consider a new contract within about four months. In order to fully understand each franchising agency’s intentions, prior to negotiating the final contract, the Authority is seeking input from the city councils of the Member Agency’s and the County Board of Supervisors. Each Member Agency and the County must, individually, accept or decline Republic’s offer for the collection services that will be detailed in a Final Term Sheet. Chris Lehon, the Authority’s Executive Director will be making a presentation before the Board of Supervisors on April 9, 2013 to help solicit the County’s input on the Draft Term Sheet for post-collection services and collection service enhancements offered by Republic. Recommended Revisions to Republic's Draft Term Sheet DCD staff has reviewed the Draft Term Sheet and although staff generally agrees with much of it, there are a number of items which warrant revision. Therefore, staff does not recommend the County Board of Supervisors accept the Term Sheet unless the Authority and Republic agree to revise the Draft Term Sheet as reflected in redline/strikeout format in Exhibit A. The revisions address eight key areas of concern which are summarized in the following. Authority’s obligations to be included in the Post-Collection Services Agreement should not be assigned to the County unless mutually agreed upon in writing pursuant to authorization by the governing boards of both agencies. (Changes recommended to Section I.C of the Draft Term Sheet); Term Sheet should not propose to restrict or otherwise attempt to control the manner in which each franchising agency amends their respective agreements to address implementation of enhanced collection services ultimately approved by each respective governing board. (Changes recommended to multiple sections of the Draft Term Sheet, including but not limited to Sections I.C, II.B, IV.A and X); County’s authority over control of the waste stream should be retained consistent with County policy and existing franchise agreements. (Changes recommended to Sections II.D and IV.B of the Draft Term Sheet); Obligations pertaining to the waste generated within the unincorporated West County areas franchised by the County shall not extend beyond the term of the County’s existing franchise agreement. (Changes recommended to Section III of the Draft Term Sheet); Household Hazardous Waste (HHW) program services should continue to be contractually guaranteed for the unincorporated West County area in a manner generally consistent with the terms of the existing HHW Agreement between the County, the Authority and Republic. (Changes recommended to Section IV.B.1 of the Draft Term Sheet); County’s authority over rate setting for collection services should be retained and administered consistent with the County’s rate setting methodology manuals and processes used for the County’s other franchise areas. (Changes recommended to Section V.B and V.D of the Draft Term Sheet); Proposed methodology for adjusting post-collection service rates should: 1) ensure future requested rate increases can be independently verified, 2) ensure increased costs are appropriately applied throughout the Authority service area, and 3) require Member Agency concurrence on the establishment of verified/verifiable baseline costs for collection labor and other collection services falling within the purview of rate setting authority retained by franchising agencies. (Changes recommended to Section V.G of the Draft Term Sheet); and Acknowledge that the per ton Host Mitigation Fees, including Processibles, are adjusted annually based on the applicable Consumer Price Index. (Changes recommended to Section V.I of the Draft Term Sheet). Voting Seat for the County on the Authority Board of Directors The contract between the County and the Authority was established to regulate the IRRF and acknowledge the County’s assumption of franchising for the unincorporated area previously covered by the West County Wastewater District. The contract does not provide the County with a voting seat on the Authority’s Board of Directors. On July 8, 1997, the County Board of Supervisors determined that they were interested in pursuing a voting seat for a member of the Board of Supervisors on the Authority Board of Directors. At their meeting in October 1997 the Authority Board directed their staff to develop and submit recommendations regarding the principles for full County membership in the Authority. On December 16, 1997 the Board of Supervisors reviewed the Authority’s proposal and expressed concern regarding the cost of membership and how it would be paid. County staff was directed to further review potential funding sources, the possibility of negotiating a reduction on the proposed cost of membership and to review the agreements that would require modification. County staff completed its review and recommended a counter proposal on June 9, 1998 that would reduce the cost to the County to $98,220 and bring the County contribution to the same level as the other Member Agencies. The $98,220 proposal included the estimated cost for reviewing and modifying necessary agreement, then estimated to cost approximately $50,000. Staff also recommended that the cost of obtaining membership be paid over a period of 4.5 years which was the time frame that the other jurisdictions had for paying their share. At their June 9, 1998 meeting, the County Board of Supervisors formed an ad hoc committee to assess and make recommendations about the total amount that the County should be willing to pay to the Authority for the ability to have a voting seat on the Authority Board and possible source or sources of funds. This committee determined that it should be the responsibility of the County to pay any costs accrued by the Authority in modifying agreements and attorney reviews that would be necessary to accomplish the change in membership. The subcommittee set a maximum of $55,000 for those costs. The committee recommended that there should not be a ‘buy-in’ cost over and above this actual cost. In November 1998, the Authority Board concluded that acceptance of the County’s proposal would not be fair to ratepayers within the five West County cities as the County would not pay its “fair” share of the costs incurred by the Authority prior to the start of the IRRF operations. At their February 23, 1999 meeting, the County Board of Supervisors directed staff to request the Authority Board of Directors to allow the County to defer the decision on obtaining a voting membership until after the County had implemented its state mandated solid waste programs and had evaluated its compliance with Assembly Bill 939 (the California Integrated Waste Management Act of 1989) goals. The County chose to defer membership until such time that the County had completed the implementation of its Source Reduction and Recycling Element to be in compliance with the Assembly Bill 939 mandate. Recently, the Authority’s Executive Director has indicated that the member cities have now been paid back their ‘buy-in’ costs. As such, it is assumed that the County would not be expected to provide any payment for a voting seat on the Authority Board. The District I Supervisor has expressed a strong interest in pursuing the matter of obtaining voting membership on the Authority Board of Directors as a part of the process/changes needed to proceed with implementation of proposed enhanced collection and post-collection services beyond December 2013. EXISTING COUNTY AGREEMENTS NEEDING TO BE AMENDED: The County is a party to the following three existing Agreements that will need to be amended to address issues related to enhanced collection services and post-collection services proposed beyond October 2013: AGREEMENT FOR HOUSEHOLD AND SMALL QUANTITY GENERATOR HAZARDOUS WASTE SERVICES (2000) 1. CONTRACT BETWEEN WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY AND CONTRA COSTA COUNTY (1993) 2. FRANCHISE AGREEMENT BETWEEN CONTRA COSTA COUNTY AND RICHMOND SANITARY SERVICE (1993) 3. Prior to reporting back to the Board of Supervisors regarding next steps, Department of Conservation and Development staff need to work with the District I Supervisor, County Counsel’s office and the other Parties to the above-noted agreements (the Authority and Republic Services, Inc.) in order to determine the extent and nature of the amendments needed to address issues related to enhanced services and post-collection changes. DCD staff and the District I Supervisor have identified some additional desired changes appropriate to incorporate into said amendments due to the anticipated retirement of bonds used to finance the IRRF, including but not limited to reversion of certain regulatory oversight/responsibility previous delegated to the Authority for various Conditions of Approval of the IRRF Land Use Permit (e.g. Host Community Mitigation Fee). Additionally, DCD staff anticipates recommending additional changes to said agreements to, among other things, reflect changed circumstances and policies since said Agreements were developed 13-20 years ago. CONSEQUENCE OF NEGATIVE ACTION: The Authority and Republic Services, Inc. would potentially move forward negotiating a final post-collection The Authority and Republic Services, Inc. would potentially move forward negotiating a final post-collection service agreement with the expectation that the County is agreeable to implementing service enhancements and rate changes in the manner proposed, some of which are potentially inconsistent with existing County policies, agreements and code requirements, and potentially adversely impact County rate payers. The County would continue not having any voting seat on the Authority Board of Directors to represent unincorporated areas of West County. CHILDREN'S IMPACT STATEMENT: Not applicable. ATTACHMENTS Draft Term Sheet Presentation from WCCIWMA West Contra Costa Integrated Waste Management Authority (RecycleMore) Proposed Recycling and Solid Waste System Enhancements & Contract Negotiations Presentation to: Contra Costa County April 9, 2013 1 1.Inform franchise agencies about proposed improvements to the recycling and solid waste system 2.Receive comments from all franchising agencies’ elected bodies 3.Respond to questions and concerns from franchising agencies Purpose for Board Presentation 2 Background & Process Overview 3 Introductions & Background 4 Procurement Process ∗November 2011 –Cities/County support competitive process ∗December 2011 –RecycleMore selects competitive process ∗March 2012 –Procurement documents circulated ∗September 2012 –Received six competitive responses ∗December 2012 –RecycleMore Board directs Republic negotiations ∗March 2013 –RecycleMore approves Draft Term Sheet for distribution/presentation to Member Agency Elected Bodies 5 ∗Significant Competition & Transparency ∗Enhanced Recycling Services ∗Reduced Rate for Post-Collection Services Process Results: To Date 6 Prior Total Annual Cost of Services $20.4M LESS: Financing/Facility Costs ($2.9M) LESS: Authority Revenue Share ($3.2M) Prior Comparable Annual Post-Collection Cost $14.3M VS. Proposed Annual Cost of New Services $14.0M Process Results: Financial 7 Solid Waste System Overview 8 Collection Agreements: ∗City/County and RSS ∗Valid through 2025 (2023 for County) ∗Services include: ∗Collection from Customer ∗Garbage, Recycling, Organics ∗Residential and Commercial ∗Misc. Customer Programs (e.g. Christmas trees, bulky items) Post-Collection Agreements: ∗RecycleMore and Republic ∗Expires January 1, 2014 ∗Services include: ∗Garbage receiving, transport, landfill ∗Recycling sorting, marketing ∗Organics composting ∗HHW receiving, safe handling (incl. separate agreement between County, RecycleMore and Republic) Collection Services 9 Post-Collection Services: Transfer of Garbage to Landfill 10 Post-Collection Services: Composting 11 Post-Collection Services: Recycling Processing 12 Post-Collection Services: Marketing Recycled Commodities 13 Post-Collection Services: Construction Recycling 14 Post-Collection Services: Household Hazardous Drop-off 15 Solid Waste System Overview: Unincorp. West County Rates 35-Gallon Residential Monthly $% of Total Collection Services $19.61 63% Post-Collection Services $11.40 37% TOTAL Customer Bill $31.01 3 CY Commercial Monthly $% of Total Collection Services $316.50 69% Post-Collection Services $145.49 31% TOTAL Customer Bill $461.99 16 Post-Collection Contract Issues 17 ∗Traditional Recycling ∗Construction & Demolition Recycling ∗Dry Waste Processing ∗Composting ∗HHW Drop-off ∗Partially covered under separate agreement for the areas of Kensington, Crockett, Port Costa and Tormey ∗Transfer/Transport ∗Disposal Post-Collection Agreement: Services 18 A.Total Annual Post-Collection Costs: $13,982,302 B.Collection Program Costs: $1,651,423 C.El Cerrito Annual Service Costs: $1,154,155 D.Annual RSS Area Tons, All Material Types:126,434 Blended Average Rate = (A –B –C) / D $88.40/ton Post-Collection Agreement: Initial Rate Mechanics 19 ∗Material-Specific Portion (Processing/Disposal) ∗Annually adjusted (85% of CPI) ∗0-4% annual increase ∗Consideration of growth/loss in tonnage ∗Excess adjustments roll-over ∗No separate fuel adjustment ∗Authority Directed Portion (Authority Exp. & HHW) ∗Subject to Board direction/balancing account ∗Recycling Rebate Portion ∗Fixed for 2014 & 2015 @ $40/ton x 18,058 tons ∗Per ton value adjusted by trailing 12-month average OBM price ∗Tonnage adjusted by trailing 12-month actual tonnage Post-Collection Agreement: Rate Adjustments 20 ∗9 Year contract coterminous with collection ∗Performance surety and insurance requirements ∗Continues funding Authority operations ∗Authority direction of HHW site, in consultation with the County ∗New reporting requirements Post-Collection Agreement: Terms 21 ∗Need each franchising agency to decide if they're agreeable to implementing the proposed Collection Service enhancements ∗Receive comments from all franchising agencies’ elected bodies ∗Coordinate with franchising agencies regarding needed replacement for Exhibit B to each franchise ∗Defer to individual franchising agencies with respect to determinations regarding what, if any, other changes may be needed and/or desirable with respect to each agency's own franchise agreements in order to provide for implementation of said collection service enhancements and related collection rate adjustments Collection Franchise Coordination 22 40% 45% 50% 55% 60% 65% 70% 75% 80% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Proposed Program Implementation The "Great Recession" AB 939 Mandate AB 341 Goal Performance Targets Re-Established Planning for the Future… 23 ∗January 2014 ∗Expanded materials list ∗Expanded organics ∗October 2014 ∗Weekly collection ∗Increased recycling for businesses & multi-family ∗Diversion Impact: ~3,700 TPY/0.9% by 2017 ∗Example Communities: Most of SF Bay Area ∗Annual Program Value: $1,089,677 ~ $0.78/HH/Mo. Collection Agreement: Services #1 Recycling & Organics 24 ∗Collection Routing: ∗Process select garbage accounts (e.g. office, retail) for recycling ∗Dry Materials Processing: ∗State-of-the-art processing of dry waste (~50% recovery) ∗Initially: Transferred to Newby Island (Milpitas) ∗Future: Potential use of the IRRF (West County) ∗Diversion Impact: ~9,125 TPY/2.3% by 2017 ∗Example Communities: San Jose, Fremont, Hayward ∗Annual Program Value: $1,475,111 ∗$227,723 Collection ~ $0.16/HH/Mo. ∗$1,247,388 Post-Collection Collection Agreement: Services #2 Commercial Dry Routing/Sorting 25 ∗Targeting, Outreach, and Training (Jan-Mar 2014): ∗Identify large food generators ∗Outreach to “sell” service to customers (at no additional cost) ∗Follow-up outreach by Recycling Coordinators ∗Collection & Processing (April 2014 on): ∗64-gallon carts, 1-and 2-cubic yard bins ∗Up to 3 times per week collection ∗Flexibility for more service (additional charge may apply) ∗Delivered for composting ∗Diversion Impact: ~1,320 TPY/0.3% by 2017 ∗Example Communities: San Francisco, Oakland, Walnut Creek ∗Annual Program Value: $170,952 ~ $0.12/HH/Mo. Collection Agreement: Services #3 Commercial Organics 26 ∗Ordering & Collection: ∗Customer Service trained to identify construction loads ∗Driver delivers C&D for processing ∗Recycling reports provided to customers ∗Processing: ∗Sort line certified at 70% recovery rate for mixed C&D ∗Additional C&D recovery through floor-sorting of heavy/bulky materials ∗Diversion Impact: ~3,500 TPY/0.9% by 2017 ∗Example Communities: San Jose, StopWaste.org, San Francisco ∗Annual Program Value: No New Costs/Operations Required Collection Agreement: Services #4 Mixed C&D Recycling 27 ∗Dedicated to service area: ∗Implementation/adoption of new programs/services ∗Recycling outreach/training to community ∗Development of educational collateral materials ∗Use of new online media ∗Coordination with/use of local media outlets ∗Community engagement at special events ∗Input from Authority/Agencies on qualifications ∗Diversion Impact: Included in Other Programs ∗Example Communities: Most California Jurisdictions ∗Annual Program Value: $163,000+ ~ $0.12/HH/Mo. Collection Agreement: Services #5 Two Recycling Coordinators 28 Collection Agreement: Terms 29 ∗No proposed change to agreement term ∗No proposed change to rate setting/adjustment ∗Cost savings available for potential rate adjustment ∗One-time adjustment to collection rates to cover new proposed enhanced collection services ∗Baseline analysis of 2012 to create “firewall” around new program costs/revenues using current rate review process Procurement ∗PRESENT input from each member agency at April/May RecycleMore Board Meeting ∗NEGOTIATE final contract language by end of June ∗AWARD final post-collection contract at July RecycleMore Board Meeting ∗EXECUTE member agency collection amendments by October 2013 so company can place truck orders ∗Any rate change effective January 1, 2014 JPA Agreements and Contracts ∗April-May ∗Interview Board Directors / franchising agency staff to determine future roles/services for JPA ∗Solicit input to changes to JPA agreements and contract with franchising agencies ∗Identify the unique needs of each franchising agency ∗July ∗Discuss JPA Agreement and/or County-JPA Contract changes Next Steps 30 Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 1 I. Recitals This term sheet memorializes the primary deal points and areas of agreement as of March 7, 2013, between the West Contra Costa Integrated Waste Management Authority ("Authority") and West County Resource Recovery, Inc., West Contra Costa Sanitary Landfill, Inc., Golden Bear Transfer Services, Inc., Richmond Sanitary Service, Inc. and Keller Canyon Landfill Company, Inc. (operating subsidiaries of Republic Services, Inc. and hereinafter collectively referred to as "Republic") for the transfer, transport, recycling, composting and disposal (Post Collection Services) of materials from a portion of the western unincorporated area of the County of Contra Costa and the cities of, El Cerrito, Hercules, Pinole, Richmond, and San Pablo (collectively the County and five member agencies of the Authority which are hereinafter referred to as "Member Agencies"). While not an official Authority member agency under the terms of the Joint Powers Agreement between Member Agencies and the Authority (as amended), the County of Contra Costa (County) is referred to as a “Member Agency” for the purpose of discussion within this Term Sheet. The County’s contractual relationship with the Authority is goverened by the terms of a seperate Agreement between the County and the Authority. A. Background Republic, by means of the services and facilities of Golden Bear Transfer Station, Keller Canyon Landfill, West Contra Costa Sanitary Landfill and West County Resource Recovery, provides existing Post- Collection Services to the Authority through certain agreements between Republic entities and the Authority. The contracts for these Post Collection Services are expiring effective December 31, 2013. The Authority solicited Requests for Qualifications and Statements of Interest for the provision of future Post-Collection Services. Republic submitted its response and entered discussions with the Authority clarifying its proposal. After consideration of the numerous proposals received, on December 12, 2012, the Board of Directors of the Authority directed staff to negotiate with Republic for the provision of these services. B. Relationship to Authority Agreement It is intended that Republic and the Authority will execute a definitive agreement substantially in accordance with applicable provisions within this Term Sheet. That new agreement will supersede applicable provisions within this Term Sheet and replace the existing Post-Collection Services agreements between Republic and the Authority. C. Relationship to Member Agency Agreements A substantial inducement to award Post-Collection Services to Republic are the many additional collection related services offered to the Member Agencies (except for the City of El Cerrito) by Republic as part of its Post-Collection Services proposal. It is intended, therefore, that the separate agreements for collection services between Republic and each of the Member Agencies (except El Cerrito) be amended, as deemed necessary by each franchise agency, to provide for enhanced collection services described within this Term Sheet to the extent each agency decides to implement said enhanced services. Deleted: and Deleted: shall be considere Deleted: d Deleted: as defined in Deleted: has an Deleted: existing Deleted: contractual Deleted: these Deleted: enter an agreement for Deleted: with Deleted: will Deleted: incorporate the Deleted: elements of Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 2 In the event the Authority is terminated, the Post-Collection Services Agreement may be assigned to the Member Agencies individually if agreed upon by each Agency, in which case the respective obligations of the Authority would also be assigned to each applicable Member Agency. This provision does not apply to the County unless and until the County Board of Supervisors agrees to become legally obligated to such potentially in conjunction with becoming a party to the Joint Powers Agreement or is otherwise contractually provided with at least one voting seat on the Authority Board of Directors. II. Conditions to Effectiveness of Agreement A. Accuracy of Representations Republic has made, and the Authority is relying on the accuracy of, certain representations to the Authority in its response to the Authority’s SOI requirements regarding its: corporate authorization to enter the agreement; ability to do so without causing a breach of any agreement or violation of any applicable law or judicial decision; current or pending litigation; regulatory compliance with regard to its facilities; and, ability to provide the proposed services in accordance with the permitted capacity of its facilities. Republic understands that the Authority and Member Agencies are relying upon the accuracy of Republic’s representations with regard to the legal and regulatory matters described above as well as with regard to Republic’s operational plans and costs for implementing the services described herein and which will ultimately be documented in the definitive agreement. Republic and the Authority acknowledge and agree that the definitive agreement will include provisions to be negotiated that would specify the terms under which Republic would be in default of said definitive agreement in the event that the Authority, in consultation with Member Agencies, were to determine that any material representation was inaccurate. The Authority represents and warrants that the Authority has authorization to enter this Term Sheet and a later definitive agreement, and has the ability to do so without causing a breach of any agreement or violation of any applicable law or judicial decision. The Authority and Republic Services acknowledges that each Member Agency retains their respective jurisdictional authority related to any and all amendments to their respective franchise agreements governing collection services. B. Representations and Warranties Regarding Negotiation of Term Sheet and Definitive Agreement Republic represents and warrants that its negotiating team has the full right and authority to negotiate fully and in good faith with the intent to reach a mutually acceptable Term Sheet and definitive agreement. The Authority represents and warrant that the the Authority Executive Director, in consultation with the Member Agency negotiating team consisting of representatives from the Cities of Richmond, Pinole, and San Pablo, and the County's staff representative, has the full right and authority from the Authority Board to negotiate fully and in good faith with the intent to reach a mutually acceptable Term Sheet and definitive agreement with respect to Post-collection Services. Deleted: shall Deleted: and Deleted: will Deleted: the Deleted: The Parties Deleted: Deleted: Deleted: Deleted: each of the Member Agencies and Deleted: have Deleted: and amendments to Member Agency collection service agreements; Deleted: have Deleted: and Member Agencies Deleted: Authority Deleted: and Deleted: and the Authority Executive Director Deleted: each and collectively Deleted: ve Deleted: , the County Board of Supervisors, or the Member Agency's city council, as the case may be, Deleted: Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 3 This Term Sheet contains all of the material Post-collection Services terms and conditions of a definitive agreement to be finally negotiated between the Authority, in consultation with the Member Agencies, and Republic. There are no other prior or contemporaneous agreements or understandings, whether oral or written, that are not set forth in this Term Sheet. With respect to the definitive Post-collection Services agreement, except with respect to a form of franchise amendment that would be proposed for adoption by each of the Member Agencies to implement proposed collection service enhancements, said definitive Post-collection Services agreement shall contain all material and required terms to be effective and there shall be no conditions precedent, conditions subsequent, or other conditions or qualifications required or imposed by the Authority. C. Furnishing of Insurance and Performance Surety Republic shall furnish verification of insurance coverage, limits, deductibles and endorsements applicable to the proposed Post-collection Services as reasonably required by the Authority, and if applicable its Member Agencies, by a company or companies reasonably acceptable to the Authority, and if applicable its Member Agencies. Republic shall also provide a performance surety in the form of a letter of credit or performance bond. If a letter of credit is used, it shall be in the amount of two million dollars ($2,000,000), otherwise a performance bond of five million dollars ($5,000,000) shall be used to secure the performance of Republic’s Post-Collection Services obligations under the Agreement. D. Release of Claims/Acknowledgement of Authority and Member Agency Contractual Right Upon the execution of the definitive Post-Collection Services Agreement and adoption of the associated amendments to the collection agreements between Richmond Sanitary Service, Inc. by the Member Agencies, Republic and the Authority agree that they shall release and discharge each other from all claims they each might otherwise have against the other with respect to the Authority's assertion that it has the contractual flow control right to receive and direct all solid waste and recyclables collected pursuant to the 1994 amendment to Member Agency franchise agreements with Richmond Sanitary Service, Inc. for Member Agencies other than the City of El Cerrito in the Authority jurisdictional area. The foregoing notwithstanding, the Republic participation in the Authority's procurement process of soliciting proposals (Statements of Interest) from proposers, and the execution of this Term Sheet for Post-Collection Services shall not constitute or be interpreted as a waiver or relinquishing of any rights or claims by either party. The Authority and Republic Services acknowledge that the County’s frachise agreement with Richmond Sanitary Service contains provisions pertaining to the County’s authority to control the waste stream collected from within the applicable unincorporated West County area. III. Term The term of the Post-collection Services Agreement shall be twelve (12) years, coterminous with most of the Member Agency collection Franchise agreements in 2025, with the exception of the unincorporated West County area franchised by the County of Contra Costa. With respect to the County franchise area, the definitive agreement shall not contain obligations extending beyond the term of the County’s collection franchise agreement with Richmond Sanitary Service. The County of Contra Costa may, at its Deleted: certain provisions of the definitive agreement Deleted: with respect to Deleted: or any Member Agency, including any other or different amendments or modifications to Member Agency franchise agreements for purposes of that Member Agency’s approval and execution of the definitive agreement Deleted: Member Agency Deleted: of Contra Costa Deleted: term of the Deleted: be Deleted: until October 13, 2023 and Deleted: t Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 4 sole option, extend its participation in the definitive agreement through the full term without any further changes required to the agreement. IV. Scope of Services A. Collection Services: The collection services described below are intended to be addressed in individual amendments to each of the Member Agency collection service franchise agreements with Richmond Sanitary Service, Inc.. 1. Direct Customer Services a) Residential Services: Weekly collection of Recyclable Materials and Organic Materials: No later than October 31, 2014, Republic shall convert the current, every-other-week collection program for Residential Recyclable Materials and Organic Materials to a weekly collection program in all Member Agencies. Pinole and Hercules Mixed Residential Organics: Beginning January 1, 2014 customers in Pinole and Hercules will be allowed to place food scraps (consistent with the materials accepted in the residential organics program in Richmond and San Pablo) in their green waste container. The Authority will provide grant funding, upon request, to each of the affected Member Agencies in the amount of $20,000 to assist with the purchase of education and outreach collateral (e.g. stickers, mailers, food pails, etc.). Republic shall be responsible for distributing collateral materials developed and purchased through the grant at no additional charge to the Authority, Member Agency(ies), or customers. Acceptance of Expanded Recyclable Materials beginning January 1, 2014 inclusive of the following: · All mixed paper · Cardboard · #1 - #7 plastic beverage and food containers* · Mixed rigid plastic packaging and other food containers* · Glass containers (no Pyrex, windows, or mirrors) · Aluminum Cans · Tin Cans · Scrap metal* · Plastic film and wrapping (properly bagged)* · All Mixed Plastics* · Paper cartons · Milk and juice cartons* * Indicates new or expanded materials accepted b) Multi-family Services: Weekly Collection of Recyclable Materials and Organic Materials: No later than October 31, 2014, Republic shall convert the current, every-other-week collection program for Recyclable Materials and Organic Materials to a weekly collection program in all Member Agencies. This shall apply to all multi- family customers who receive Recyclable Materials and/or Organic Materials service in carts. Deleted: will Deleted: specifically Deleted: a uniform Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 5 c) Commercial Services Source Separated Recyclable Material Collection and Processing: Beginning January 1, 2014, Republic shall provide commercial customers (including multi-family customers receiving service in bins) with Recyclable Materials collection from carts and bins ranging from one- to six- cubic yards in capacity, at the customer’s request, and shall offer such service up to three times per week, at the customer’s request. No later than October 31, 2014, Republic shall convert all commercial Recyclable Materials cart customers from every-other-week to weekly collection. At a minimum, all cart and bin recycling containers will be serviced weekly. Dry Trash Routing, Collection and Processing: Beginning February 1, 2014, Republic shall commence a review of commercial customer accounts and waste characterization with the purpose of identifying customers where the primary constituents of their garbage container are dry and recyclable. The goal for this program is to identify a sufficient volume of material for one full time equivalent route. No later than May 1, 2014, Republic shall have completed this review and shall submit a report to the Authority identifying the customers who have been selected for the dry routing program. No later than June 30, 2014, Republic shall have implemented the dry material collections from customers. All material collected under this program shall be processed in a manner that maximizes the recovery of materials and no material collected under this program shall be disposed prior to processing. Source Separated Organics Collection and Processing: During the period between the execution of the definitive agreement and April 1, 2014, Republic shall identify, educate, and sign up restaurants, institutional kitchens, and food processors for source separated organics collection service. No later than April 1, 2014, Republic shall commence collection service for commercial source separated organics accounts. Source separated commercial organic materials accepted under this program shall include all compostable food waste and food soiled paper. Prohibited materials under this program will include hazardous materials, metals, glass, ceramics, and plastics (except certain compostable bio-plastic bags and food service ware specified by Republic). This service shall be provided to customers in 65-gallon carts and 1- and 2- cubic yard bins, based on the customer’s request. Collection of source separated organics shall be provided up to three times per week, based on each customer’s request. This service shall be provided at no additional charge to customers who subscribe to garbage service. Republic, the Authority, and Member Agencies all recognize that some customers may wish to increase their level of participation in the source separated organics program beyond the six cubic yards of weekly service currently provided at no charge. In the definitive agreement, the parties will agree on a method for charging customers for service beyond the six cubic yard limit. The parties agree that such charge will represent a discount, relative to equivalent levels of garbage service. 2. Indirect Customer Services Recycling Coordinators: Within six months of the execution of the definitive agreement, or by January 1, 2014, whichever is later, Republic shall hire two additional full time “Recycling Coordinators” who will be Republic employees dedicated to work exclusively within the Authority service area. During the process of recruiting and hiring for the individuals that will fill these positions Republic shall accept input from the Authority and Member Agencies regarding desirable qualifications of the selected candidates. At a Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 6 minimum, the selected candidates: 1) should have at least two years of experience in a similar capacity, ideally as a recycling coordinator whose responsibilities included interacting with the public (including residents, businesses, community groups, etc) and public agencies; 2) should be experienced in the management and update of websites and the use of social media for educational and marketing purposes; 3) at least one of the selected candidates must be fluent in the predominant secondary language of the service area (such as Spanish); and, 4) at least one of the coordinators should have a communications, business/economic development, or professional outreach background. . In the event that either: (1) Republic fails to hire the two Recycling Coordinators within six months of the execution of the definitive agreement or by January 1, 2014, whichever is later; or, (2) in the event that such a position is ever vacant, during the Term of the definitive agreement, for more than three months after the employment relationship between Republic and the employee is terminated, regardless of the reason, the Authority may, at its sole discretion, engage a consultant to perform the functions of the Recycling Coordinator until such time as Republic hires the required personnel. The cost of such consultant shall be paid by Republic. The reimbursement of such costs by Republic shall be limited to $8,333 per month (equivalent to $100,000 per year) per coordinator that has to be replaced by the consultant. In addition, the parties shall agree (in the definitive agreement) on an annual process for reviewing the performance of the Recycling Coordinators, documenting performance problems associated with this service, and resolving those problems (including some ultimate provision for reassigning and replacing the staff person). In addition, the parties shall agree (in the definitive agreement) on the approach to dealing with serial or excessive vacancies in these positions, including the possibility of contracting jointly with a consultant specializing in performing these services or transferring the funding for the positions to the Authority. The general scope of the Recycling Coordinators’ duties include those items identified and described in the attached “Public Education and Outreach” exhibit. The specific educational and outreach priorities and campaigns to be performed by the Recycling Coordinators shall be defined cooperatively between Republic, the Recycling Coordinators, and the Authority with input from Member Agencies. These priorities and campaigns shall be documented by the Recycling Coordinator in an annual education and outreach plan (Annual Plan), including identifiable and measurable goals, to be presented to the Authority. The Authority and Member Agency staff shall be invited to provide comments. The Authority shall be responsible for reconciling any conflicting comments and making a formal request for changes to the Annual Plan. The Recycling Coordinators shall make quarterly status presentations to the Authority and collective Member Agencies, documenting their progress against the plan and goals and recommending modifications to the plan, as appropriate. Expanded Public Information, Education and Outreach Services to Member Agencies: Beginning November of 2013, Republic will begin to provide the public education and outreach services described in the attached “Public Education and Outreach” exhibit. {Note: The Public Education and Outreach exhibit is a draft that reflects the agreement between representatives of the Authority and Republic Services. Additional items are likely to be added to the public education and outreach exhibit(s) following further discussions between the parties and Member Agencies.} Deleted: of the parties Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 7 B. Post-Collection Services and Facilities Throughout the Term of this Agreement and Member Agency collection service agreements, Authority and Member Cities shall agree to direct all Solid Waste and Recyclable Materials to Republic facilities. The Authority and Republic Services acknowledge that the County’s frachise agreement with Richmond Sanitary Service contains provisions pertaining to the County’s authority to control the waste stream collected from within the applicable unincorporated West County area. 1. Direct Customer Services Throughout the term of the definitive agreement, Republic shall provide all direct post-collection services in compliance with applicable law, all facility permits, and best management practices for ensuring safe and efficient operations. Solid Waste Transfer: The Golden Bear Transfer Station will receive solid waste collected under the Member Agency collection franchise agreements, load such materials into transfer trailers, and transport the waste to the Keller Canyon Landfill for disposal. Solid Waste Disposal: The Keller Canyon Landfill will receive solid waste delivered from the Golden Bear Transfer Station and dispose of such material in compliance with applicable laws and permits Recyclables Processing and Marketing: The West County Resource Recovery Facility and/or Newby Island Resource Recovery Park will receive recyclable materials and dry waste collected under the Member Agency collection franchise agreements for those Member Agencies served by Richmond Sanitary Service, separate the single-stream recyclable materials into marketable commodity types, prepare those commodities for market, and market those commodities for sale. Under no circumstances may Republic dispose of any material collected as recycling without first processing such material in a manner that maximizes the recovery of marketable commodities. Green Waste and Organics Processing and Marketing: The West Contra Costa Sanitary Landfill Organics Material Processing Facility will receive organic materials collected under the Member Agency collection franchise agreements, remove obvious contaminants, pre-process (i.e. chip and grind), and compost the organic materials. Organic materials shall be converted to products for beneficial use including compost and mulch. Republic shall provide Member Agencies with finished compost and mulch products upon request at no additional charge to the agency, FOB at the WCCSL compost facility, limited to 1% of the tonnage delivered by that Member Agency under the residential and commercial organics programs. Except as provided below for West Contra Costa Sanitary Landfill, -under no circumstances may Republic use organic materials covered by this agreement for alternative daily cover, intermediate cover, slope stabilization, erosion control, or any other purpose at an active landfill nor may Republic land apply organic materials on land owned by Republic or any of its affiliates, subsidiaries, directors, officers, or employees. Such uses may be permitted at the closed/inactive West Contra Costa Sanitary Landfill, to the extent that such use prevents the importation of material to the site for that purpose. Mixed Construction and Demolition Debris Processing: Richmond Sanitary Service receives customer calls for roll-off services and shall train all customer service representatives to identify construction and demolition boxes when work orders are placed for service and to clearly identify the work order as a Deleted: Agencies Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 8 “C&D” service. All loads so identified shall be taken to the West Contra Costa Sanitary Landfill Material Processing Facility for pre-processing. Republic shall pre-process all identified C&D loads to remove contaminants and large dimensional/non-sizeable material (e.g. very large diameter tree trunks) or wet material (e.g. saturated sheet rock). Republic shall then process the remainder of each load, using its mixed C&D sorting line, in a manner that maximizes the diversion of material from the landfill. The sorting line shall be staffed with sorters in a number adequate to consistently achieve a 75% diversion rate for the material processed by this sorting line. Materials targeted for diversion shall include, but are not necessarily limited to: porcelain, cardboard, green waste, untreated wood, ferrous and non-ferrous metals, concrete, brick, plastics, aggregate, wallboard, sheetrock, plaster, lath, asphalt, base rock, dirt/soil, shingles, and carpet/pad. Household Hazardous Waste Receiving, Processing and Disposal: Republic shall contract with a vendor acceptable to the Authority and the County for the operation of a conveniently located permanent household hazardous waste drop-off facility that will serve the Member Agencies as well as the communities of Kensington, Port Costa, Rodeo and Tormey consistent with the intent of the Household Hazardous Waste Program Agreement between the County, the Authority and Republic Services. The types of materials accepted as well as the days and hours of operation shall be determined and may be subject to change at any time by the Authority Board of Directors, if agreed upon by the County, subject to reasonable implementation lead time. Initially, the days and hours of operation shall be from 9:00 a.m. to 4:00 p.m. Thursday, Friday, and the first Saturday of each month. V. Compensation to Republic Services: A. Adjustments to Post-Collection Services: Any future adjustment to services would be treated as a Change in Scope and any necessary and appropriate compensation adjustment would be determined by mutual agreement of the Authority and Republic. B. Contractor’s Initial Compensation for Services: The Authority and Republic Services agree that the calendar year 2014 annual proposed revenue requirement for the enhanced collection, post-collection, and HHW services described herein as well as the authority operating budget, equals $13,982,302 including the recycling rebate of $722,320, assumed Authority operating expenses of $1,000,000, and estimated HHW drop-off services of $791,144. Contractor’s initial post-collection service compensation shall be a blended per-ton rate that is charged to each Member Agency’s franchise collection contractor on all tons of material, regardless of type, delivered by the franchise collection contractor to Republic. The initial blended per-ton rate shall be calculated for the RSS service area by taking: 1. The total proposed revenue requirement ($13,982,302), 2. Less the portion of the revenue requirement associated with collection costs (tentatively $1,651,423, subject to validation of reasonableness during a review of baseline collection costs which shall be Deleted: y Deleted: parties Deleted: the Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 9 subject to review and approval of each Member Agency pursuant to their respective rate setting practices/policies), 3. Less the portion of the revenue requirement attributed to El Cerrito ($1,154,155), 4. Divided by the total annual tonnage of all material types in the RSS service area (126,434), and, 5. Rounding the results to the nearest penny. (13,982,302 – 1,651,423 – 1,154,155)/126,434 = $88.40/ton El Cerrito is currently negotiating with Republic for the post-collection services they require. El Cerrito intends to use a similar blended rate approach based on the total revenue requirement identified here. C. Adjustments to Contractor’s Post-Collection Services Compensation: Republic, its subcontractor, and the Authority staff shall prepare and submit a draft Household Hazardous Waste Drop-off services budget to the Authority for its review and approval no later than October 1 of each calendar year for the next calendar year’s budget. The Authority Board of Directors may approve that budget as submitted or may request modifications to the budget, including requesting the either an increase in service levels or a reduction or elimination of services in order to reduce costs. Once approved, this budget shall serve as the revenue requirement for HHW drop-off services for the coming year. A balancing account approach will be applied to this portion of the total revenue requirement. No later than October 1 of each calendar year, the Authority will establish a budget for their operations and will specifically identify the portion of that budget to be funded through the post-collection service rates. Once approved, this budget shall serve as the revenue requirement for the Authority operating expenses. A balancing account approach will be applied to this portion of the total revenue requirement. The material-specific portion of the blended rate established for post-collection services will be adjusted annually, based on 85% of the average monthly change in the San Francisco-San Jose-Oakland All Urban Consumers CPI, with adjusted rates to be effective January 1 of each calendar year. The “material- specific” portion of the blended rate and revenue requirement is that portion of the rate or revenue requirement that is associated with the post-collection services provided directly by Republic Services and specifically excluding the HHW drop-off services (provided by a subcontractor), Authority operating expenses (managed by the Authority), and Recycling Rebate. The maximum adjustment due to an increase in CPI to the material-specific portion of the blended rate shall be four percent (4%) in each year of the agreement; however, in the event that 85% of the average monthly change in the CPI exceeds four percent (4%) the Contractor shall be allowed to carryover the amount that exceeds four percent (4%) to the following rate period, provided that doing so does not cause the rate adjustment for that period to exceed four percent (4%). The minimum adjustment due to an increase in CPI to the material-specific portion of the blended rate shall be zero percent (0%); however, in the event that 85% of the average monthly change in CPI results in a negative value, the Authority shall be allowed to carryover the negative amount to the following rate period, provided that doing so does not cause the rate adjustment for that period to be less than zero percent (0%). Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 10 The inflated material-specific portion of the per ton blended rate shall be multiplied by the actual number of tons collected in all material categories during the preceding twelve months to determine a revenue requirement for all materials. The material-specific revenue requirement, less the recycling rebate (see Subsection F below), shall be added together with the revenue requirement for HHW drop-off services and the revenue requirement for the Authority operating expenses to determine the total revenue requirement for the coming year. That revenue requirement will be applied to customer subscription data provided by Richmond Sanitary Service to calculate a specific post-collection surcharge to be applied to each collection service level. The specific calculation methodology will be described and examples provided in the definitive agreement, however, the parties intend that the calculation of post-collection surcharges shall be performed in a manner that is similar to the calculation of the current IRRF Surcharge, absent the detailed review of costs and budgets. D. Adjustments to Contractor’s Collection Services Compensation. The collection revenue requirement and collection portion of the rates charged in the Member Agencies franchise areas served by Richmond Sanitary Service shall be increased in the amount of the collection services offered by Republic. Republic represents that the portion of the revenue requirement associated with collection services is $1,651,423 for calendar year 2014 subject to validation of reasonableness during a review of baseline collection costs, including potential review and approval of each Member Agency pursuant to their respective rate setting practices/policies. This shall be a one- time increase in the revenue requirement and shall be adjusted each year in the same manner as the balance of the collection revenue requirement. Republic represents that its estimates of the incremental additional costs required to perform the collection services are accurate and include all reasonably foreseeable costs associated with the operation of the program. In the event that the actual costs of these collection programs are less than their estimate, there shall be no consideration of those excess revenues in the Member Agency rate reviews. Similarly, if Republic has underestimated the cost of these programs and additional labor, routing, equipment, or other costs are incurred beyond Republic’s initial estimate, there shall be no consideration of those excess costs in the Member Agency rate reviews. Prior to entering into the definitive agreement, Republic shall provide documentation of its operating and cost assumptions for the collection programs along with allocations of those operations and costs among the Member Agencies serviced by Richmond Sanitary Service. The purpose of this documentation is to ensure that each agency understands what costs and revenues are expected from these programs and to specifically exclude those costs and revenues from the cost-based rate adjustment approach. Such information shall be presented in a manner that will be compatible with the cost-based rate adjustment methodology used in the Member Agencies (e.g. using the same cost pools, allocation methodologies, etc.). Prior to the effective date of the definitive agreement, the Member Agencies (or Authority on their behalf) shall conduct a baseline cost-of-service review of RSS’s operations, costs, and allocation approaches to document the cost-of-service in each Member Agency prior to the implementation of the Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 11 new collection services. RSS shall cooperate with this review and make available all information reasonably required by the reviewers. E. Adjustment to City and other Agency Fees: Adjustments to City and other Agency Fees shall be a direct pass-through in the rates at the time the requested increase is adequately documented to the satisfaction of the agency with applicable rate setting authority. F. Recycling Rebate: The initial recycling rebate shall be negative ($722,320). This is equal to negative $40 per ton multiplied by the 18,058 tons per year of Recyclable Materials collected by Richmond Sanitary Service and Delivered to the West County Resource Recovery Facility. The initial recycling rebate shall be used in the establishment of rates for calendar years 2014 and 2015. When establishing rates for each year of the contract starting with calendar year 2016, the parties shall adjust the per-ton and annual tonnage values considered in the establishment of the initial recycling rebate. The initial per ton value of negative $40 shall be adjusted to be twenty eight and seventeen hundredths percent (28.17%) of the monthly average (for the preceding twelve months) low side of the “Official Board Markets”, “Los Angeles” index for “Mixed Paper (2) – Export to China – FAS”, rounded to the nearest penny. That index value was 142 in November 2012 at the time of Republic’s proposal to the Authority. For example: If the index values for the preceding twelve months are: Sept – 144, Oct – 143, Nov – 141, Dec – 138, Jan – 138, Feb – 144, Mar – 145, Apr – 148, May – 146, Jun – 149, Jul – 148, Aug – 147; then, Monthly Average = 144.25 x 0.2817 (stated percentage of OBM) = $40.64 Revised Per-Ton Rebate The initial annual tonnage value shall be adjusted to reflect the actual total tonnage of source separated residential and commercial single-stream recyclable materials collected by RSS and delivered to the West County Resource Recovery Facility during the preceding twelve months. For example: If the recyclables tonnage values for the preceding twelve months are: Sept – 1,443, Oct – 1,421, Nov – 1,494, Dec – 1,384, Jan – 1,652, Feb – 1,644, Mar – 1,715, Apr – 1,480, May – 1,346, Jun – 1,549, Jul – 1,448, Aug – 1,547; then, Revised Annual Tonnage = 18,123 Deleted: requested Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 12 The revised per-ton rebate value is then multiplied by the revised annual tonnage value to arrive at the recycling rebate for the coming calendar year.For example: 18,123 Revised Annual Tonnage X 40.64 Revised Per-Ton Rebate Value $736,518.72 Revised Recycling Rebate G. Adjustments to Post-Collection Rates: Republic may request the Authority’s consideration of an adjustment to post-collection rates in the event of the following circumstances. The Authority shall consider such requests and shall not unreasonably deny an adjustment to rates under the prescribed circumstances following verification that said costs are solely for post-collection services/costs and not subject to rate setting authority retained by collection franchising agencies. In the case of the enactment of new or increased government or Member Agency fees and charges assessed for post-collection services, the Authority shall approve the request as a pass-through. In the event of a special circumstances request for an adjustment to rates, Republic shall adequately document its estimate of the incremental change in costs associated with the special circumstance in a manner that is independently verifiable. The Authority may request additional information from Republic if the documentation provided is determined to be insufficient. The Authority may consider information provided by Republic along with information from other sources to estimate the cost associated with such a special circumstance. · Enactment of new or changes to existing Federal, State and local fees and surcharges mandated to be collected or paid by Contractor specifically for post-collection processing/disposal services · A Change in Law applicable to entire Authority service area for which Contractor compliance is mandatory and that results in documented and independently verifiable increases in the specific cost of providing Member Agency post-collection services (any changes in law resulting in changes in cost for collection services continue to fall within the rate setting purview of the applicable collection franchising agencies) · Authority-requested changes in the scope of post-collection services provided by Republic. H. Ineligible Items for Adjustment of Rates: The following items shall not be considered in the adjustment of post-collection rates: · Changes in the price of fuel. · Decreases in Recycling revenues due to changes in market conditions or any other factor from the sale of Recyclable Materials · Increases in the costs of Solid Waste, Recyclable Materials, Organic Materials, or Mixed Construction and Demolition Debris processing not incurred as a result of Changes in Law · Increases in transportation time and/or costs related to provision of Services provided under the definitive agreement Deleted: documented Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 13 · Changes in the number of Customers due to changes in population or housing/business development or annexations · Changes in customer subscription levels (e.g. as customers subscribe to recycling and organics services they may be able to reduce garbage service, resulting in a potential revenue loss to Republic) · Changes in the volume or composition of materials · Changes in the facilities used to perform services, unless those changes to facilities are the direct result of an Authority directed change in scope I. Public Agency Fee Component of the Post-Collection Rates: Certain fees are required to be paid to public agencies by Republic as a function of operating the facilities that provide services under this agreement. Unless noted, these fees are to be paid on tons disposed and include: Fee Description Current Fee Amount* Local Enforcement Agency – Golden Bear Transfer Station & West Contra Costa Sanitary Landfill $1.75/ton City of Richmond Franchise Fee $1.50/ton Host Mitigation Fees (IRRF, GBTS, WCCSL BMPC) $3.38/ton (CPI-adjusted annually) Contra Costa County Solid Waste Fee (AB 939) $0.15/ton AB 1220 Integrated Waste Management Fee $1.40/ton Contra Costa Bailey Road Surcharge $0.68/ton Bailey Road Charge $0.32/ton Contra Costa County Landfill Surcharge 25% of Gate Rate, net of taxes/fees West Contra Costa Sanitary Landfill Recycling Fee – paid on all recyclable materials $0.91/ton (CPI-adjusted annually) * The fees are subject to change during the Term and shall be adjusted in accordance with section G above. VI. Performance Standards and Liquidated Damages: The definitive agreement will provide for performance standards associated with the collection and post-collection services to be provided by Republic. The performance standards will consider both effort (e.g. number of meetings with customers to offer new programs) and results (e.g. tons of material recycled). The Authority recognizes that Republic will have greater control over the effort on certain programs and greater control over the results on others. As such, the performance standards for each program will be established based on Republic’s ability to control the results. The parties agree to establish effort-based performance standards for the weekly recycling and organics collection program and the source Deleted: F Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 14 separated commercial organics program. The parties agree to establish results-based performance standards for the commercial dry routing and mixed C&D processing programs. The parties agree that the definitive agreement will also include liquidated damages that may be assessed, at the discretion of the Authority and/or Member Agencies, after written notice to Republic and an opportunity for Republic to cure, in the event that Republic: 1) fails to implement a program; 2) fails to perform specified services required under the agreement; 3) performs the specified service under the agreement in a manner inconsistent with the requirements of the agreement, or applicable law; or, 4) fails to achieve the performance standards defined for each program. These liquidated damages shall be in addition to any other remedy the Authority and/or Member Agencies may have, which may include, but are not necessarily limited to: a determination of breach of contract, termination of the agreement, or litigation. VII. Special Consideration for El Cerrito Republic and El Cerrito have met to discuss services and pricing. El Cerrito is reasonably satisfied that the pricing upon which the term sheet is predicated will ensure that El Cerrito is paying only for the services that they receive and not for the collection programs provided to Member Agencies in the RSS service area. VIII. Reporting: Republic shall provide quarterly and annual reports, satisfactory to the Authority (and Member Agency) demonstrating compliance with the performance standards detailed in the definitive agreement as well as the total tonnage of recyclables, organic materials and processed or disposed solid waste under this Agreement. Reports shall be organized to separately report material received from each agency, between customer (residential, commercial, industrial) or collection (side-loader, front-loader, roll-off) types, material types, and facilities. Recycling tonnage reports shall characterize the material processed and marketed; using facility-wide averages where impractical to separately characterize material from the Authority service area, and document the residue rates. All reports shall be provided using unaltered, system-generated formats. IX. CEQA: Republic shall undertake a preliminary CEQA evaluation (preparation of an Initial Study) on new service offerings and proposed actions as a whole to the extent of completing an Initial Study. The Authority will serve as Lead Agency for post-collection service project(s), if applicable, under CEQA. If the Initial Study determines the need for further environmental review, the parties shall meet and confer regarding the appropriate handling and allocation of costs associated with such a review. X. Remaining Terms and Conditions Unchanged: Each franchising agency shall determine what changes are necessary to the the terms and conditions of their respective collection franchise agreements, in order to document authorization and requirements Deleted: or Deleted: a Deleted: T Deleted: Member Agency Recommended Revisions for Consideration by the County Board of Supervisors DRAFT WCCIWMA/Republic Post-Collection Services Term Sheet 15 related to enhanced collection services and post-collection services approved by their respective governing boards. Deleted: except those that must be changed to document the services and compensation provisions described in this Term Sheet shall remain unchanged.