Ordinance 2993CITY OF ALAMEDA ORDINANCE NO.
2993
New Series
APPROVING AND AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND EXECUTE A SECOND AMENDMENT TO
MODIFY AND EXTEND THE FRANCHISE AGREEMENT WITH
ALAMEDA COUNTY INDUSTRIES AR , INC.
WHEREAS , on July 3 , 2002 , the City and Alameda County Industries AR , Inc.
("Contractor ) entered into that certain Franchise Agreement between the City of Alameda
and Alameda County Industries AR, Inc. for Solid Waste , Recyclable Materials , and
Organic Materials Services (the "Original Franchise Agreement"
WHEREAS , on December 27 , 2004 , the First Amendment to the Original
Franchise Agreement ("Amended Franchise Agreement") was signed by the City and the
Contractor , and
WHEREAS , the City and the Contractor have agreed to modify the compensation
and certain other provisions of the Amended Franchise Agreement in the same form as the
Original Franchise Agreement was granted pursuant to City Charter Section 3-10 on the
terms herein; and
WHEREAS , pursuant to Section 13.7 of the Amended Franchise Agreement , all
amendments to the Amended Franchise Agreement must be in writing and this
Amendment is necessary to reflect the modifications to the Amended Franchise Agreement
agreed to by the City and the Contractor and as made pursuant to this Second Amendment.
that:
NOW THEREFORE BE IT ORDAINED by the Council of the City of Alameda
Section 1. The City Council hereby approves and authorizes the City Manager to
negotiate and execute , for and on behalf of the City of Alameda , a Second Amendment to
the Amended Franchise Agreement , as shown in Attachment 1.
Section 2. This Ordinance shall be in full force and effect from and after the expiration
of thirty (30) days from the date of
Attest:
******
. Q)
Attachment
APRIL 2009 SECOND AMENDMENT
OF THE DECEMBER 27,2004 AMENDED FRANCHISE AGREEMENT
BETWEEN THE CITY OF ALAMEDA AND ALAMEDA COUNTY INDUSTRIES
AR,INC.
FOR
SOLID WASTE, RECYCLABLE MATERIALS AND
ORGANIC MATERIALS SERVICES
This Second Amendment (the "Second Amendment") is entered into this
day of April , 2009 , by and between the City of Alameda , a municipal
corporation (hereinafter "City ), and Alameda County Industries AR , Inc., a
California corporation whose address is 610 Aladdin Avenue , San Leandro
CA 94577 (hereinafter the "Contractor ), and amends the July 3 , 2002
Franchise Agreement between the City of Alameda and the Contractor for
Solid Waste , Recyclable Materials and Organic Materials Services as
specified below:
RECITALS:
A. On July 3 , 2002 , the City and the Contractor entered into that
certain Fr.anchise Agreement between the City of Alameda and Alameda County
Industries AR , Inc. For Solid Waste , Recyclable Materials and Organic Materials
Services (the "Original Franchise Agreement"
B. On December 27 , 2004 , the City and the Contractor entered into
that certain December 2004 Amendment amending the Original Franchise
Agreement. The Original Franchise Agreement as so amended is referred to
herein as the "Franchise Agreement."
C. The City and the Contractor have agreed to modify the
compensation and certain other provisions of the Franchise Agreement on the
terms herein.
D. Pursuant to Section 13.of the Franchise Agreement all
amendments to the Franchise Agreement must be in writing and this Amendment
is necessary to reflect the modifications to the Franchise Agreement agreed to by
the City and the Contractor and as made pursuant to this Amendment.
NOW , THEREFORE , in and for the mutual covenants contained herein
and other good and valuable consideration , the receipt and adequacy of which
are hereby acknowledged , it is mutually agreed by and between the undersigned
parties as follows:
1. This Second Amendment shall be effective as of the date it
executed by both parties.
2. Article 1 , DEFINITIONS , of the Franchise Agreement is modified to
delete and replace the definition of customer with:
Customer means the Person which Contractor shall submit billing invoice to
and collect payment from for Collection services provided to a Premises. As
provided in Section 5., the Contractor may establish policies to determine
whether the Customer is either the Owner of the Premises or the Occupant
provided that the Owner of the Premises shall be responsible for payment of
Collection services in the event an Occupant of a Premises , which Contractor
has invoices as the Customer of Owner s Premises , fails to make such payment.
3. Article 3 TERM OF AGREEMENT , Section 3.4 OPTION TO
EXTEND TERM of the Franchise Agreement is deleted in its entirety and
replaced with:
At the City s sale discretion , the City shall have the option to extend this
Agreement , twice , for up to a period not to exceed five (5) years each from
October 1 , 2012 through September 30 2017 and from October 1 , 2017 though
September 30 , 2022. If the City elects to exercise these options , it shall give
written notice to Contractor at least one hundred eighty (180) calendar days prior
to September 30 , 2012 and at least one hundred eighty (180) calendar days prior
to September 30 2017 , respectively.
The City hereby exercises both of its options to extend this Agreement for five (5)
years each pursuant to Section 3.4 of the Franchise Agreement , as amended by
this Second Amendment , and the Contractor accepts such exercises. The Term
of the Franchise Agreement shall continue until midnight September 30 , 2022
unless terminated in accordance with Section 11.2 of the Franchise Agreement.
4. Article 4 SCOPE OF AGREEMENT Section 4.11.
SPECIFICATIONS of the Franchise Agreement is amended by adding the
following language at the end of Section 4.11.2 Specifications:
Contractor agrees that not later than December 31 , 2012 100% of the Solid
Waste Collection vehicles and Recyclable Materials and Organic Materials
Collection vehicles used regularly on Collection routes by the .contractor shall be
replaced with new Clean Alternative Fuel Vehicles , if commercially available and
technically and economically feasible , subject to the mutual agreement of the
City and the Contractor as to the year , model and make of Clean Alternative Fuel
Vehicles to be acquired and the phase-in period for their deployment. The new
vehicles may be purchased or leased by the Contractor , may include working
with the City to obtain grant funds , and the change shall be accomplished in
accordance with Section 5.
5. ARTICLE 5 , OTHER SERVICES , Section 5.A. GENERAL is
amended by adding the following language at the end of Section 5.A. General:
Contractor may establish procedures and policies for invoicing which may
include: deposits; property owner contracts; late fees. Where the occupant of the
premises is a tenant of the Owner , for invoicing purposes , the Contractor may
establish criteria and policies for requiring the Owner of a premises to be a
customer. The Contractor shall provide property owner with a 12 month notice
prior notice of invoicing change for an existing account.
6. ARTICLE 8 , CONTRACTOR'S COMPENSATION , Section
, Forecasted labor-related costs , is deleted in its entirety and replaced
with:
a. Forecasted labor-related costs shall be forecasted as follows:
1. In the case of employees not subject to the Teamsters Union Local70 bargaining agreement , labor related costs shall be calculated by
multiplying (1) the Allowed labor-related costs for Rate Period One by one
(1) plus the percentage change in the "San Francisco-Oakland-San Jose
Metropolitan Area Consumer Price Index (Urban Wage Earners; 1982-
84=100)," which is compiled and published by the U. S. Department of
Labor , Bureau of Labor Statistics or its successor agency, between the
most-recently-published monthly index at the time of the application and
the corresponding monthly index published twelve (12) months earlier
and (2) multiplying the result of step one by the same percentage change
used in step one.
2. In the case of employees subject to the Teamsters Union Local 70
bargaining agreement , labor related costs shall be the actual wages and
benefits for the Rate Period in accordance with the bargaining agreement.
Should the Teamsters Union Local 70 be replaced with a successor of
similar bargaining power , the City and Contractor agree to meet and
negotiate in good faith to apply the wages and benefits of the successor.
7. ARTICLE 8. CONTRACTOR'S COMPENSATION , Section 8.4.
Compensation for Rate Period Eight , is deleted in its entirety and replaced with:
8.4.5 Contractor s Compensation for Rate Period Eight
Contractor s Compensation for Rate Period Eight , shall consist of forecasted
annual cost of operations , plus profit , plus forecasted Pass-Through Costs. Each
of these amounts shall be calculated in accordance with this section using
current information and values and shall be based on forecasted costs for Rate
Period Seven. Ninety (90) calendar days prior to the first day of Rate Period
Eight , Contractor shall submit an application requesting the amount of
Contractor s Compensation for Rate Period Eight. The application shall be
based on Contractor s Compensation for Rate Period Seven. The application
shall be submitted in the format , and shall calculate Contractor s Compensation
in the manner described in this Section.
Forecast Annual Cost of Operations.
operations shall be calculated as follows:
Forecasted annual cost of
1. Forecasted labor-related costs shall be calculated as follows:
a. In the case of employees not subject to the Teamster UnionLocal 70 bargaining agreement , by multiplying (1) the Allowed
labor-related costs for Rate Period Seven by one (1) plus the
percentage change in the "San Francisco-Oakland-San Jose
Metropolitan Area Consumer Price Index (Urban Wage Earners;
1982-84=100)," which is compiled and published by the U.
Department of Labor , Bureau of Labor Statistics or its successor
agency, between the most-recently-published monthly index at the
time of the application and the corresponding monthly index
published twelve (12) months earlier , and
b. In the case of employees subject to the Teamsters Union
Local 70 bargaining agreement , by applying the actual wages and
benefits in accordance with the bargaining agreement. Should the
Teamsters Union Local 70 be replaced with a successor of similar
bargaining power , the City and Contractor agree to meet andnegotiate in good faith to apply the wages and benefits of the
successor.
Forecasted vehicle-related costs for Rate Period Seven shall be
forecasted by multiplying the forecasted vehicle-related costs for
Rate Period Seven by one (1) plus the percentage change in the
Motor Vehicle Related Index , All Urban Consumers , U.S. City
Average (PI-U) 1982-1984 = 100 " between the most-recently-
published monthly index at the time of the application and the
corresponding monthly index published twelve (12) months earlier.
Forecasted Recyclable Materials Processing costs shall be
forecasted for Rate Period Eight in an equivalent manner to the
method described in Section 8.
Forecasted Organic Materials Processing costs shall be forecasted
for Rate Period Eight in an equivalent manner to the method
described in Section 8.2.B.
Forecasted other costs for the Rate Period Eight shall beforecasted by multiplying the forecasted other-related costs for
Rate Period Seven by one (1) plus the percentage change in the
San Francisco-Oakland-San Jose Metropolitan Area Consumer
Price Index (All Urban Consumers; 1982-84=100)" between the
most-recently-published monthly index at the time of application
and the corresponding monthly index published twelve (12) months
earlier.
Forecasted depreciation expense shall be the amount specified in
Exhibit J for vehicles , Containers , and facilities.
Forecasted annual cost of operations for Rate Period Eight shall
equal the sum of the following costs , which shall have been
calculated in accordance with procedures in this Section:
Forecasted labor-related costs
Forecasted vehicle-related costs
Forecasted Recyclable Materials Processing costs
Forecasted Organic Materials Processing costs
Forecasted other costs
Forecasted depreciation expense
Calculate Profit. Profit shall be calculated by dividing the forecasted
annual costs of operations for Rate Period Eight by 0., and subtracting
the forecasted annual costs of operations from the dividend.
Forecast Pass-Through Costs. The forecasted Pass-Through Costs shall
consist of forecasted Disposal costs , forecasted interest expense , and
forecasted regulatory fees calculated in accordance with the following
procedures:
Forecasted Disposal costs shall be the same as in Section
Forecasted interest expense shall be based on interest expense in
Exhibit J.
Forecasted lease cost shall be the amount specified in Exhibit J for
vehicles , equipment , containers , and facilities.
Forecasted regulatory fees shall be calculated in the same manner
as Section 8.c using current information and data.
Determine Contractor s Compensation for Rate Period Eight. Contractor
Compensation for Rate Period Eight shall be equal to the sum of the
following:
Forecasted annual cost of operations (determined in accordance
with Step A above)
Profit (determined in accordance with Step B above)
Forecasted Pass-Through Costs (determined in accordance with
Step C above)
The Contractor s Compensation for Rate Period Eight as calculated in
accordance with this Section shall be the only compensation due to
Contractor for such Rate Period. No adjustments for actual costs shall be
made at the conclusion of Rate Period Eight or at any other time during
the Agreement.
8. ARTICLE 8 , CONTRACTOR'S COMPENSATION , Section 8.4.
Contractor s Compensation for Rate Period Ten , of the Franchise Agreement
deleted in its entirety and replaced with:
8.4.6 Contractor s Compensation for Rate Period Ten
Contractor s Compensation for Rate Period Ten , shall consist of forecasted
annual cost of operations , plus profit , plus forecasted Pass-Through Costs. Each
of these amounts shall be calculated in the same manner as Section 8.4.5 using
current information and values and shall be based on forecasted costs for Rate
Period Nine rather than costs for Rate Period Eight.
9. ARTICLE 8 , CONTRACTOR'S COMPENSATION , Section 8.
CONTRACTOR'S COMPENSATION FOR EXTENSION PERIODS , of the
Franchise Agreement is deleted in its entirety and replaced with:
5 CONTRACTOR'S COMPENSATION FOR EXTENSION PERIODS
Contractor s Compensation for each of the Rate Periods during the extension
periods , if any, shall consist of the forecasted annual cost of operations , plus
profit , plus forecasted Pass-Through Costs.
The First Rate Period of the extension period (i.e., Rate Period Eleven) shall be
calculated in the same manner as that described in Section 8.4.5 using current
information and values and shall be based on forecasted costs for Rate Period
Ten rather than forecasted costs for Rate Period Eight.
The Second Rate Period of the extension period (i., Rate Period Twelve) shall
be calculated in the same manner as that described in Section 8.3 using current
information and values and shall be based on actual costs for Rate Period Ten
rather than Rate Period One.
The Third Rate Period of the extension period (i., Rate Period Thirteen) shall
be calculated in the same manner as that described in Section 8.4.5 using
current information and values and shall be based on forecasted costs for Rate
Period Twelve rather than costs for Rate Period Eight.
The Fourth Rate Period of the extension period (i.e., Rate Period Fourteen) shall
be calculated in the same manner as that described in Section 8.4.5 using
current information and values and shall be based on forecasted costs for Rate
Period Thirteen rather than costs for Rate Period Eight.
The Fifth Rate Period of the extension period (i., Rate Period Fifteen) shall be
calculated in the same manner as that described in Section 8.3 using current
information and values and shall be based on actual costs for Rate Period
Thirteen rather than Rate Period One.
The First Rate Period of the second extension period (i., Rate Period Sixteen)
shall be calculated in the same manner as that described in Section 8.4.5 using
current information and values and shall be based on forecasted costs for Rate
Period Fifteen rather than forecasted costs for Rate Period Eight.
The Second Rate Period of the second extension period (i., Rate Period
Seventeen) shall be calculated in the same manner as that described in Section
8.4.5 using current information and values and shall be based on forecasted
costs for Rate Period Sixteen rather than Rate Period Eight.
The Third Rate Period of the second extension period (i., Rate Period
Eighteen) shall be calculated in the same manner as that described in Section
3 using current information and values and shall be based on actual costs for
Rate Period Sixteen rather than costs for Rate Period One.
The Fourth Rate Period of the second extension period (i.e., Rate Period
Nineteen) shall be calculated in the same manner as that described in Section
8.4.5 using current information and values and shall be based on forecasted
costs for Rate Period Eighteen rather than costs for Rate Period Eight.
The Fifth Rate Period of the second extension period (i.e., Rate Period Twenty)
shall be calculated in the same manner as that described in Section 8.45 using
current information and values and shall be based on forecasted costs for Rate
Period Nineteen rather than Rate Period Eight.
10. ARTICLE 8 , CONTRACTOR'S COMPENSATION , Section 8.12.
Contractor s Compensation Adjustment for Rate Year One and Rate Year Two of
the Franchise Agreement is deleted in its entirety and replaced with:
The remaining balance of the Additional Rate Period One and Two
Compensation , consisting of $1 054 058 , shall be paid to Contractor no
later than May 1 , 2009. Payment of such Additional Rate Period One and
Two Compensation shall not be subject to Franchise Fees or any other
fees authorized under Article VII of this Agreement , and shall not be
counted as revenue in the revenue reconciliation process described in
Section 8.7 of the Agreement. Any prior requirement to compensate the
company in rate years 11 , 12 , and 13 , associated with the Additional Rate
Period One and Two Compensation is hereby eliminated.
11. ARTICLE 8 , CONTRACTOR'S COMPENSATION , Section 9
INTERIM COMPENSATION ADJUSTMENT is modified by adding the following
language as a second paragraph:
Contractor agrees that the Interim Rate Adjustment request received on
December 23 , 2008 is withdrawn in its entirety and that Contractor will not seek
any future Interim Rate Adjustments due to either labor costs , commodity cost
increases , or commodity revenue shortfalls for the full term of the franchise.
12: Except as amended by this Second Amendment , the terms and
conditions of the Franchise agreement shall remain in full force and effect;
provided , however , that to the extent of any inconsistency between the Franchise
Agreement and this Amendment , the terms of this Second Amendment shall
prevail.
13. The City Manager is authorized to make minor modifications and
clarifications to the Franchise Agreement consistent with City Council approvals
including non-substantive changes to the Exhibits.
14.
Exhibit J
EXHIBIT J is deleted in its entirety and replaced with the attached
IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be
executed on the day and year first above written.
ALAMEDA COUNTY INDUSTRIES
, INC., A California Corporation
CITY OF ALAMEDA
A Municipal Corporation
Louis Pellegrini
Vice-President
Ann Marie Gallant
Interim City Manager
RECOMMENDED FOR APPROVAL
Matthew T. Naclerio
Public Works Director
APPROVED AS TO FORM:
Mohammed Hill
Assistant City Attorney
EXHIBIT J
CLARIFICATION OF CONTRACTOR'S COMPENSATION
This Exhibit provides information that shall be used in determining Contractor s Compensation
with the exception of Contractor s Compensation for Rate Period One and Rate Period Two.
A. ALLOWABLE PERSONNEL AND LABOR HOURS
Contractor developed Contractor s Proposal and estimated its compensation requirement based
on numerous assumptions related to provision of Collection services in the City, including
assumptions with regards to the number of personnel and the number of labor hours that its
personnel will incur. A ward of this Agreement to the Contractor was based on several factors
including its proposed compensation requirements of which a significant portion is attributed to
labor costs. In order to ensure that the City continues , over the Term of the Agreement , to
benefit from the Contractor s Proposal , labor costs shall not increase as a result of an increase in
the number of personnel or the number of labor hours unless Contractor can demonstrate that the
increased labor personnel and/or hours are necessary to provide service to additional Customers
due to growth in the City or to adjust for changes in labor hours due to a City-approved interim
compensation adjustment as described in Section 8.9. In recognition of this limitation on
Contractor s Compensation , the personnel and labor hours listed in the following table shall be
considered allowable personnel and labor hours for the purpose of determining Contractor
Compensation.
Minimum Staffing - Company agrees to maintain , at a minimum , the labor hours listed in the
Allowable Personnel and Labor Hours table contained in this section. Should new
technologies become available which improve operational efficiencies and directly benefit the
rate payers , the City and Contractor agree to meet and negotiate in good faith the reduction in
labor hours and any benefits which may accrue to the City and the Company resulting from the
cost savings associated with implementing the new technology.
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Amendment I
The Contractor shall not be compensated for labor costs associated with any personnel
and labor hours other than those listed in the table above unless the number of route
drivers is increased based on the Contractor s demonstration to the City of the need to
increase the number of routes in accordance with Section B . Note: Corporate
Management fees attributable to CEO/CFO, General Manager and Controller.
B. ALLOWABLE ROUTES
The number of allowable routes that shall serve as the basis for the Contractor
Compensation are listed in the table below. Note that the route list was prepared based
on the Contractor s Proposal. Routes reflected as less than a whole number represent
routes allocated across service segments
ROUTES Quantity/Day
Residential Solid Waste
Residential Recyclable Materials
Residential Organic Materials
Commercial Bin Solid Waste
Commercial Recyclable Materials
Debris Box Solid Waste and Recyclable Materials
Clean-up/Bulky Item pickup Container distribution
Commercial Organics
City Services
TOTAL 23.
The Contractor shall not be compensated for an increase in the number of routes unless
the Contractor demonstrates to the City the increase is a direct result of growth in the
number of Customers served in the community or is a result of changes due to a City-
approved Interim Compensation Adjustment as provided in Section 8.
c. ALLOWABLE ROUTE HOURS
The Contractor developed Contractor s Proposal and estimated its compensation
requirement based on numerous assumptions related to provision of Collection services
in the City, including assumptions with regards to the number of route hours that wil be
incurred. The number of route hours significantly impacts the Contractor
Compensation because it impacts vehicle-related costs such as fuel , tires and tubes , parts
and supplies. A ward of this Agreement to the Contractor was based on several factors
including its proposed compensation requirements of which significant portion is
attributed to vehicle-related costs. In order to ensure that the City continues , over the
Term of the Agreement , to benefit from the Contractor s Proposal , vehicle-related costs
shall not increase as a result of an increase in route hours unless Contractor can
demonstrate that the increased route hours are necessary to provide service to additional
Customers due to growth in the City or to adjust for changes in route hours due to a City-
approved interim compensation adjustment as described in Section 8.9. In recognition of
this limitation on Contractor s Compensation , the route hours listed in the following table
71986.Page:2
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Amendment 1
shall be considered allowable route hours for the purpose of determining Contractor
Compensation. Allowable route hours may reflect a portion of a route serving multiple
service segments.
Allowable Route Hours Hours Routes Total
Hours
Residential Solid Waste 12,480
Residential Recyclable Materials 12,480
Residential Organic Materials 320
Commercial Bin Solid Waste 240
Commercial Recyclable Materials 040
Debris Box Solid Waste and Recyclable Materials 664
Clean-up/Bulky Item pickup Container Distribution 4,160
Commercial Organics 040
City Services 416
23.840
D. ALLOWABLE LEASE AMOUNTS
Allowable annual lease amounts to be included in the Contractor s Compensation over
the initial ten (10) year portion of the Term of the Agreement include the following:
Annual Allowable Lease Amounts
Collection Vehicles
Residential Solid Waste $226 881.92
Residential Recyclable Materials $298 345.
Residential Organic Materials $301 554.48
Commercial Bin Solid Waste $77 659.
Commercial Recyclable Materials $0.
Debris Box Solid Waste and Recyclable $27 173.
Materials $0.
Clean-up/Bulky Item pickup $13 586.
Transfer truck
Subtotal $945 201.8
Other Support Vehicles $21 738.
Collection Containers
Carts $185 526.45
Bins $78 843.
Debris Boxes $36 276.40
Compactors
Subtotal $300 645.
Total Allowable Lease Amount 267,586.
71986.Page3 City of Alameda
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Amendment I
In the event new vehicles or Containers are acquired with City approval under Section
11.2 of the Second Amended Agreement or to accommodate growth in the City at some
point during the Term , the cost of the new equipment shall be depreciated (or the lease
payments amortized , in the case of leased equipment) over the Term including all
optional extension periods , which may be granted under Section 3.4. If new vehicles or
Containers are acquired with City approval this Section of this Exhibit shall be amended
to reflect any changes in depreciation or lease amounts.
E. ALLOWABLE PROCESSING COSTS
The following Processing costs are allowable Processing costs during the Term of the
Agreement based on Contractor s Proposal to use Processing Sites identified in Section7. Processing costs shall reflect the net Processing cost (i., Processing cost less
revenues earned from the sale of such materials).
Recyclable Materials Organic Materials Organic Materials
Processing Costs Processing Costs Processing Costs
($/ton)excluding Yard including Food
Waste ($/ton)Waste ($/ton)
Rate Period Three $0.
$**$**
* * to be inputted based formula below.
In lieu of determining a processing cost for recyclable materials , the City and Company
agree to provide a fixed subsidy of $880 000 for Rate Period 8. This subsidy is based on
a review of past processing costs that determined an average processing cost of
202 560 , to process 12 405 tons. This subsidy shall increase annually as other
processing costs; however , the subsidy shall not be included in the profit calculation
provided in Sections 8.6 and 8.4.5B of this agreement.
For Rate Periods Eight through Twenty, the Processing costs shall be adjusted by
multiplying the Processing cost for the prior Rate Period by the most recently published
San Francisco-Oakland-San Jose Metropolitan Area Consumer Price Index (Urban
Wage Earners; 1982-84=100)" and dividing by the index published twelve (12) months
prior to the most recently published index. For example , the Recyclables Material
Processing cost for Rate Period Three shall be calculated as follows:
Most recently published index (April 2004) = 132.
Index published twelve months period to most recently published index (April
2003) = 130.
Rate Year Three Recyclable Materials Processing cost = $x (132.0/130.
perTon.
Note: The calculated Processing cost shall be rounded to the nearest cent.
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Amendment I
F. TONNAGE ASSUMPTIONS
The Contractor developed Contractor s Proposal and estimated its compensation
requirement based on numerous assumptions related to provision of Collection servicesin the City, including assumptions with regards to the quantity of Solid Waste
Recyclable Materials , and Organic Materials that wil be Collected from Generators. The
quantity and type of materials Contractor assumed would be Collected has a direct impact
on its overall compensation requirement. A ward of this Agreement to the Contractor was
based on several factors including Contractor s proposed compensation requirements and
estimated diversion results.
Tonnage Assumptions
Estimated Tons Collected per
Source Year
Rate Period
Three
Solid Waste
Single-Family and Multi-Plex Collection 977.
Multi-Family Collection
Clean-up/Bulky Item Collection 916.
Commercial Collection 725.
Debris Box and Compactor Collection 749.
SUBTOTAL 369.
Recyclable Materials
Single-Family and Multi-Plex Collection 641.71
Multi-Family Collection
Clean-up Collection
Commercial Collection 521.31
Scrap 300.
Subtotal 13,463.
Organic Materials
Single-Family and Multi-Plex Collection 312.
Multi-Family Collection
Clean-up Collection
Commercial Collection Include Wood 983.
SUBTOTAL 295.
Total Materials Collected 127.
Diversion Percentage ((Recyclable Materials and Organic
37%Materials)lTotal Materials CollectedJ.
71986. I Page:5 City of Alameda4/01/09 Franchise AgreementG:\COUNCIL MEETING INFO\ORDINANCES\04 21 09\ACI 2nd Amendment EXHIBIT lJINAL- 4 21 09.doc
Amendment I
G. Recyclin2 Commodity Revenue Sharin2:
Any Revenue , as calculated in the same manner as was used in City accepted audited
statements for Rate Periods 1 through 7 , received by the Contractor from the sale of
Recyclable Materials generated in the City and Processed during any Rate Period will be
shared by the City and the Contractor in accordance with the schedule below. The City
share will be paid or applied by the Contractor in the form and manner that the City
directs within thirty (30) days after the submittal of required audited financial statements;
provided , however , that to the extent all or any portion of such payment or application
would cause the Contractor to be in default with its primary lender to which the
Contractor is indebted in a material amount , and the City is provided a letter from a
senior officer from the financial institution stating such , all or that portion of such
payment or application which would cause such default wil be deferred until it can be
effected without causing such a default. Said deferral shall accrue interest at the rate the
City normally would have received on the funds during that time.
Recycling Commodity Revenue Sharing Schedule
Revenue , as calculated in the same manner as was used in City accepted audited
statements for Rate Periods 1 through 7 , from the Contractor s sale of all Recyclable
Materials Processed at the Processing Site for the applicable Rate Period shall mean the
Contractor s revenue from the sale of any such Materials. Such Revenue wil be
divided by the total tons of such Recyclable Materials delivered to the Processing Site
during such Rate Period ("Total Tons ) to determine the total average amount per ton
(the "Average Price ). The Average Price wil then be multiplied by that portion of the
Total Tons generated in the City (the "City Tons ) to determine the revenue attributable
to the City (the "Alameda Revenue ). The Alameda Revenue will be shared as follows:
(a) the amount resulting from multiplying the City Tons by the first $26 of the Average
Price wil belong to the Contractor; (b) the amount resulting from multiplying the City
Tons by the amount by which the Average Price up to $80 exceeds $26 , if any, will be
shared 75% by the Contractor and 25% by the City; and (c) the amount resulting from
multiplying the City Tons by the amount by which the Average Price exceeds $80 , if any,
wil be shared 25% by the Contractor and 75% by the City.
Revenue Sharing Examples
1. If for a given Rate Period the Net Revenue was $1 473 939 , the Total Tons were
809 , and the City Tons were 12 405 , then the Average Price would be $59.41
($1 473 939/24 809), and the Alameda Revenue would be $736 981 ($59.41 x 12 405).
The City s share would be $103 613 ($59.41 - $26.00 $33.41 x 12 405 x 25%), and the
Contractor s share would be $633 368 (($26.00 x 12,405) + ($59.41 - $26.00 = $33.41 x
12,405 x 75%)).
2. If for a given Rate Period the Net Revenue was $2,419 000 , the Total Tons were
809 , and the City Tons were 11 389 , then the Average Price would be $97.
($2 419 000/24 809), and the Alameda Revenue would be $1 110 427 ($97.50 x 11 389).
The City s share would be $303 233 ($80 - $26.00 = $54.00 x 11 389 x 25% plus $97.
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- $80 = $17.50 x 11 389 x 75%), and the Contractor s share would be $807 194 (($26.
x 11 389) + ($80.00 - $26.00 = $54.00 x 11 389 x 75%) + ($97.50 - $80.00 = $17.50 x
11,389 x 25%)).
G. DEPRECIATION AND INTEREST EXPENSE
No depreciation and interest expenses are allowable costs undcr the Agreement as
amended , unless approved by the City because the Contractor developed its Contractor
Proposal assuming equipment will be leased. Allowable lease costs are listed in Section
D of this Exhibit.
71986.Page:7 City of Alameda4/01/09 Franchise AgreementG:\COUNCIL MEETING INFOIORDINANCESI04 21 09IACI 2nd Amendment EXHIBIT JJINAL- 4 21 09.doc
Amendment 1
, the undersigned , hereby certify that the foregoing Ordinance was duly and
regularly adopted and passed by the Council of the City of Alameda in a regular
meeting assembled on the day of April , 2009 by the following vote to wit:
AYES:Councilmembers deHaan , Gilmore , Matarrese , Tam and
Mayor Johnson - 5.
NOES:None.
ABSENT:None.
ABSTENTIONS:None.
IN WITNESS , WHEREOF , I have hereunto set my hand and affixed the offcial seal of
said City this 22 day of April , 2009.
ra Weisiger , City C
City of Alameda