HomeMy WebLinkAboutCM MSS Franchise Agreement Amendment 3THIRD AMEN DM ENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
This THIRD AMENDMENT to the Amendment and Restatement of Collection Agreement between the
CITY OF SAN RAFAEL (CITY) and MARIN SANITARY SERVICE (COMPANY) is made and entered into this
day of December, 2018.
WHEREAS, the CITY and COMPANY entered into a written agreement on September 4, 2001, as amended
on March 1, 2005 and November 14, 2012 (together the "Agreement") pursuant to which the COMPANY
renders Solid Waste, Recyclable Material and Green Waste collection, processing and disposal services to
businesses, residents and government institutions in the CITY; and
WHEREAS, global revenues from the sale of Recyclable Materials have declined in recent years due to
international market factors, including China's "National Sword", resulting in a projected net cumulative
loss to the COMPANY in connection with the processing of Recyclable Materials of $2.3 million from 2011
to 2018; and
WHEREAS, the Agreement includes a mechanism by which half of the profits and losses resulting from
changes in revenues received from the sale of Recyclable Materials are held in a reserve fund with
cumulative losses held in the reserve fund amounting to $1.15 million; and
WHEREAS, pursuant to the terms and conditions of the Agreement, CITY and COMPANY met and
conferred and have agreed to a reasonable remedy to the COMPANY, which includes elimination of the
reserve fund and a new mechanism for the COMPANY to share the profits and losses from changes in
revenues received from the sale of Recyclable Materials via the rates set by the CITY and to be charged
by the COMPANY beginning on January 1, 2019; and
WHEREAS, CITY and COMPANY mutually desire to amend the Agreement to establish a streamlined and
simplified rate setting methodology that will provide for rate stabilization and predictability of future rate
increases, clarify certain services and update certain obligations of the COMPANY.
NOW, THEREFORE, it is mutually agreed as follows:
1. Section 8. Assignments, Subcontracts, and Changes of Ownership, shall be amended to read:
8. Assignments.
(A) No interest in this Agreement may be assigned, sold or transferred, either in whole or in
part, by COMPANY without the prior written consent of the CITY which the CITY may grant
or refuse in its reasonable discretion. The COMPANY shall promptly notify the CITY in
writing at least one hundred twenty (120) days in advance of the proposed closing of any
such proposed assignment, sale or transfer. The COMPANY is encouraged to notify the
CITY as soon as possible of any proposed assignment, sale or transfer. In the event that
the CITY Council approves of any assignment, sale or transfer, said approval shall not
relieve COMPANY of any of its obligations or duties under this Agreement unless this
Agreement is modified in writing to that effect.
(B) Any such assignment, sale or transfer made by the COMPANY without the consent of the
CITY shall be null and void and the attempted assignment, sale or transfer shall constitute
a material breach of this Agreement and give the CITY grounds to terminate this
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THIRD AMENDMENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
Agreement upon written notice to the COMPANY, and upon such termination, all liability
of the CITY under this Agreement to the COMPANY shall cease, and the CITY shall have
the right to call the performance bond and shall be free to negotiate with other
contractors.
(C) The CITY may not assign its rights or subrogate its obligations under this Agreement
without the prior written consent of the COMPANY, except to a joint powers authority
authorized by Govt. Code Sec. 6500 et seq.
(D) For purposes of this section, "assignment, sale or transfer" shall include, but not be
limited to:
(1) A sale, exchange or other transfer to a third party of outstanding common stock
of the COMPANY which results in a Change in Control (as defined below);
(2) Any sale to a third party of all or substantially all of the COMPANY'S assets
dedicated to providing the services required by this Agreement;
(3) Any subcontracting of the COMPANY'S services required under this Agreement,
except to an affiliate of the COMPANY (defined as an entity that is controlled by
Joseph John Garbarino or his lineal descendants and/or the lineal descendants of
Joseph and Angelina Garbarino) or for processing or landfilling services
customarily subcontracted by the COMPANY;
(4) Any dissolution, reorganization, consolidation, merger, recapitalization, stock
issuance or re -issuance, voting trust, pooling agreement, escrow arrangement,
liquidation or other transaction that results in a Change in Control;
(5) Any assignment by operation of law, including insolvency or bankruptcy,
assignment for the benefit of creditors, writ of attachment for an execution being
levied against this Agreement, appointment of a receiver taking possession of
COMPANY'S property, or transfer occurring in a probate proceeding that results
in a Change in Control; and
(6) Any combination of the foregoing (whether or not related or contemporaneous
transactions), which has the effect of a Change in Control.
(D) The COMPANY acknowledges that this Agreement involves rendering a vital service to the
CITY'S residents and businesses, and that the CITY has selected the COMPANY to perform
the services specified herein based on:
(1) The COMPANY'S experience, skill and reputation for conducting its solid waste
management operations in a safe, effective and responsible fashion, at all times
in keeping with applicable local, state and federal environmental laws,
regulations and best waste management practices; and
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THIRD AMENDMENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
(2) The COMPANY'S financial resources to maintain the required equipment and to
support its indemnity obligations to CITY under this Agreement. The CITY relied
on each of these factors, among others, in choosing the COMPANY to perform
the services to be rendered by the COMPANY under this Agreement.
(F) The CITY is concerned about the possibility that an assignment, sale or transfer could
result in significant rate increases, as well as a change in the quality of service.
Accordingly, the following standards have been set to ensure that any assignment, sale
or transfer shall result in continued quality of service. At a minimum, no request by the
COMPANY for the CITY'S consent to an assignment, sale or transfer need be considered
by the CITY unless and until the COMPANY has met the following requirements:
(1) The COMPANY shall reimburse the CITY for its reasonable, documented expenses
for attorneys and other consultants engaged by the CITY to investigate the
suitability of any proposed assignee, and to review and finalize any
documentation required as a condition for approving any such assignment.
However, it is likely that other agencies of the Franchisors' Group served by the
COMPANY (the "Members") may also be considering the request for consent to
the assignment, sale ortransfer. In consideration of the payment described in this
subsection, the Members agree to work together to reasonably avoid duplication
of such costs among them, given the common requests for consent. In
furtherance of the COMPANY'S obligation to all such Members, upon notice by
the COMPANY of its intention to assign its rights hereunder and under each of its
franchise agreements with the other Members, the COMPANY shall pay the sum
of two hundred thousand dollars ($200,000) into an escrow account towards the
total of all such costs incurred by the Members and the Members shall direct the
COMPANY to pay a pro rata share of that amount to each of them with the
apportionment of such payments at the sole discretion of the Members, it being
understood that CITY and each Member shall address COMPANY's request for
consent to such assignment, sale or transfer on a separate basis;
(2) The COMPANY shall furnish the CITY with audited financial statements of the
proposed assignee's operations for the immediately preceding three (3)
operating years;
(3) The COMPANY shall furnish the CITY with satisfactory proof:
a. That the proposed assignee has at least ten (10) years of solid waste
management experience including the handling of solid waste, recyclable and
organic materials on a scale equal to or exceeding the scale of operations
conducted by the COMPANY under this Agreement;
b. That in the last five (5) years, neither the proposed assignee nor any of its
affiliates have suffered significant major citations or other charges from any
federal, state or local agency having jurisdiction over its waste management
operations due to any significant failure to comply with state, federal or local
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THIRD AMENDMENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
environmental laws and that the assignee has provided the CITY with a
complete list of such citations and charges;
c. That the proposed assignee has conducted its operations in a reasonably
environmentally safe and conscientious fashion;
d. That the proposed assignee has conducted its solid waste management
practices in good faith and substantial compliance with sound waste
management practices, including all federal, state and local laws regulating
the collection and disposal of solid waste, including hazardous wastes; and
e. Provide any other available information required by CITY to ensure that the
proposed assignee can fulfill the terms of this Agreement in a timely, safe and
effective manner.
(G) Under no circumstances shall the CITY be obliged to consider any proposed assignment,
sale or transfer by the COMPANY if the COMPANY is in material breach of any provision
of this Agreement at the time of the request or at any time during the period of
consideration of the request. The CITY will provide the COMPANY with a reasonable
opportunity to be heard before the CITY Council and the opportunity to correct any such
claimed failure of performance or material breach.
(H) In the case of any assignment, sale or transfer, the assignee shall not be entitled to
request any adjustment in rates other than as provided under this Agreement.
(1) A Change in Control shall occur when Joseph John Garbarino or his lineal descendants
and/or the lineal descendants of Joseph and Angelina Garbarino shall cease to have the
power, directly or indirectly, to control the management, operation and policies of the
COMPANY, whether through the ownership of a majority of voting securities, as trustee,
by contract or otherwise.
(J) COMPANY shall provide an annual written update to the CITY by October 1 of each year
detailing the COMPANY'S plans, actions, accomplishments and next steps with respect to
its internal succession planning. COMPANY shall meet with the CITY on request to discuss
details of the COMPANY'S succession planning efforts.
2. Section 15. Performance Review, shall be added to the Agreement to read:
15. Performance Review.
(A) CITY may conduct periodic reviews of COMPANY'S performance ("Performance Review").
Reviews may be scheduled at the CITY'S discretion, with up to one (1) Performance
Review occurring every three years, with the first such Performance Review being
possible between 2019 and 2021.
(B) COMPANY shall be responsible forthe cost of each Performance Review in an amount not
exceeding $60,000 per Performance Review, escalated annually by the annual change in
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THIRD AMEN DM ENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
the Consumer Price Index for Water and Sewer and Trash Collection, U.S. city average,
Bureau of Labor Statistics Series I.D. CUSROOOOSEHG, with a floor of 2.5% and a cap of 5%.
Payment is due in full prior to the start of each Performance Review and is considered an
allowable cost for the purposes of a Base Year approach rate review.
(C) The Performance Reviews may be performed by the CITY or its consultant. In the event
the CITY intends to retain a consultant to perform any Performance Review, it may seek
and accept comments and recommendations from COMPANY.
(D) The Performance Reviews may be designed to verify that: rates have been properly
calculated and that they correspond to the level of service received by customers;
franchise fees and other fees required under this Agreement have been properly
calculated and paid to CITY; COMPANY has complied with the reporting requirements and
performance standards of the Agreement; COMPANY'S customer service, outreach,
education, compliance and internal auditing functions meet or exceed industry best
practices; and reports provided by COMPANY are accurate.
(E) COMPANY shall cooperate fully with the Performance Review and provide all requested
data, including operational data, financial data and other data reasonably requested by
CITY (or its designated consultant) within thirty (30) work days.
(F) The CITY (or its designated consultant) may utilize a variety of methods in the execution
of the Performance Review, including analysis of relevant documents, on-site and field
observations, and interviews.
(G) CITY (or its designated consultant) will review and document the items in the Agreement
that require COMPANY to meet specific performance standards, submit information or
reports, perform additional services, or document operating procedures, that can be
objectively evaluated.
(H) CITY (or its designated consultant) may also review the customer service functions and
structure utilized by COMPANY. This may include COMPANY'S protocol for addressing
customer complaints and service interruption procedures. Complaint logs may be
reviewed, along with procedures and systems for tracking and addressing complaints. On-
site and field observations by CITY (or its designated consultant) may include, but are not
necessarily limited to:
(1) Interviews and discussions with COMPANY'S administration and management
personnel;
(2) Interviews and discussions with COMPANY'S financial and accounting personnel;
(3) Interviews and discussions with route dispatchers, route drivers, vehicle maintenance
staff, field and service supervisors, and managers;
(4) Review and observation of COMPANY'S customer service functions and structure, and
vehicle maintenance practices;
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THIRD AMENDMENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
(5) Review of public education and outreach materials;
(6) Review of on -route collection services, including observation of driver performance
and collection productivity and visual inspection of residential routes before and after
collection to evaluate cart placement and cleanliness of streets;
(7) Review of vehicle and equipment maintenance log and accident or vehicle incident
records, if any.
(1) In the event that the Performance Review concludes that COMPANY is not in compliance
with all terms and conditions of this Agreement and such non-compliance is material, CITY
may conduct an additional Performance Review to ensure that that COMPANY has
remedied any such area of non-compliance. COMPANY shall be responsible for the cost
of any such additional Performance Review, at a maximum cost of $40,000, escalated
annually by the annual change in the Consumer Price Index for Water and Sewer and
Trash Collection, U.S. city average, Bureau of Labor Statistics Series I.D. CUSROOOOSEHG,
with a floor of 2.5% and a cap of 5%. Costs for additional Performance Reviews per this
section are not considered allowable costs for the purposes of a Base Year approach rate
review.
Exhibit A. Marin Sanitary Service — Description of Services, is replaced in its entirety as attached
hereto.
Exhibit B. Collector's Rate Revenue Requirement and Rate Adjustment, is replaced in its entirety
as attached hereto.
CITY and COMPANY agree and acknowledge that, except as explicitly modified by this
Amendment, the Agreement remains in full force and effect.
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THIRD AMEN DM ENT TO THE AMENDMENT AND RESTATEMENT OF COLLECTION
AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE
IN WITNESS WHEREOF, we, the authorized agents of the contracting parties, by our duly authorized
agents, do hereby affix our signatures and seals this 25 day of 'FCbn 1Q,Y�1.) , 201%.q
CITY OF SAN RAFAEL
By: �%-
Printe -
Name: -Jim Schutz
Printed
Name: Lindsay Lara
Its: City Clerk
Approved 0 to. form:-
C� OVA",
MARIN YANITAVY SER
M
Printed , V I
Name:
Its: f ;' k11 President
Page 7 of 7
Exhibit A: Description of Services
I. GENERAL
Recyclable Materials Processing Facility:
COMPANY shall continue to provide full service processing, marketing and sale of Recyclable Materials
collected by the COMPANY within the CITY at the Recyclable Materials processing facility located at
535 Jacoby Street in San Rafael (the "Marin Recycling Center"), which is operated by the COMPANY'S
affiliated company, Marin Recycling & Resource Recovery Association. COMPANY and CITY agree that
the charges for rate revenues for Recyclable Materials processing to be billed by the COMPANY as
described in Exhibit B are predicated on the COMPANY continuing to process Recyclable Materials at
the Marin Recycling Center. Under no circumstances may the COMPANY cease processing of the
CITY'S Recyclable Materials at the Marin Recycling facility without prior approval of the CITY. The
COMPANY may temporarily ship Recyclable Materials to other processing facilities at its discretion as
needed while repairs or upgrades are made to the Marin Recycling facility, but any such temporary
shipment of Recyclable Materials is at the COMPANY'S sole expense and risk without any change in
the rate revenues and charges for Recyclable Materials processing via either an Indexed Year
approach or a Base Year approach.
Education Outreach Technical Assistance, Monitoring, Compliance Services:
COMPANY shall continue to provide CITY with outreach, education, technical assistance, monitoring
and compliance services to residents, multi -family dwellings and commercial businesses. The CITY and
COMPANY intend for these services to: provide information to customers regarding the services
offered by the COMPANY as provided for via the Agreement; encourage, incentivize and maximize
participation in recycling and organics collection programs, and; implement the requirements of state
laws AB 341, AB 1826, SB 1383, and any other solid waste, recycling and organics state law
requirements applicable to CITY and/or COMPANY. The CITY and COMPANY further intend to define
specific and quantifiable performance targets and reporting requirements for these services so that
the CITY and COMPANY can accurately and consistently evaluate and monitor progress towards
landfill diversion goals and state laws. To that end, the CITY and COMPANY agree to develop mutually
agreeable quantitative performance targets and reporting requirements for these services by June
30, 2019. These will supplement other reporting and performance requirements in the Agreement
and are not intended to change or replace them in any way.
I I P a g e
Updated 12-6-2018
Exhibit A: Description of Services
Marin Sanitary Service (COMPANY) shall provide Collection services using modern automated and
semi- automated equipment with the COMPANY's name and telephone number clearly visible from
the outside of the vehicle or equipment.
COMPANY shall provide Carts or bins to Residential, Multifamily, and Commercial Customers that are
clearly labeled for their allowable contents, with solid waste, recyclable or compostable materials. All
containers provided by the COMPANY are the property of the COMPANY.
Company to provide customer billing and payment options including automatic billing, credit card
billing, and online payments.
II. RESIDENTIAL SERVICE (THREE OR FEWER UNITS IN A
SINGLE STRUCTURE)
90064 UJaste
COMPANY shall provide automated or semi -automated tipper Carts in 20-, 32-, 64-, and 96 -gallon
capacities to be placed at the curb or COMPANY -designated location for one time per week Collection
at the rates and fees listed in Exhibit C. Carts should be placed at the designated Collection location
by 6:00 am the day of service. Lids of carts must close. Customers may place additional bags not to
exceed 32 gallons in size and 60 pounds by weight for a fee as listed in Exhibit C. Items placed outside
the Cart or overflowing Carts will incur an additional charge as listed in Exhibit C. Carts are the
property of the COMPANY. COMPANY will determine the appropriate Collection location. Solid
Waste placed in COMPANY -provided Carts or at the curb for Collection is the property of COMPANY.
Low-income rates are available for customers who meet the PG&E CARE Program qualifications.
Ri_; dab% L--,aternla0s
As part of the Residential Customer rates, COMPANY shall provide all Residential Customers with one
(1) 64 -gallon Split cart for Recyclable Materials with one side for paper and fiber products, and one
side for acceptable glass, metal and plastic excluding polystyrene, plastic bags and compostable
plastics. Acceptable materials may change depending on the markets. A full list of accepted materials
is available on the COMPANY's website (marinsanitaryservice.com). Cardboard must be broken down
small enough to easily slide out of the cart. Large cardboard boxes may also be broken down and tied
into 24" x 24" bundles and left beside the Recycling container. Carts must be placed at the curb or,
upon approval of COMPANY, the designated Collection location next to their Solid Waste container
2 1 P
Updated 12-6-2018
Exhibit A: Description of Services
for one time per week Collection by 6:00 am the day of service. All Residential Customers must be
offered Recyclable Materials Collection services. Additional split carts are available for a nominal
monthly fee as listed in Exhibit C.
Recyclable Materials placed in COMPANY -provided Carts or at the curb for Collection are the property
of COMPANY, and the theft thereof is a crime.
(COUMPOMMI0M (ougewoc) LP-I'latedEDE
As part of the Residential Customer rates, COMPANY shall provide each Residential Customer with (1)
32 or 64 -gallon Compostable Materials Cart to be placed at the curb or COMPANY -approved
designated Collection location next to their Solid Waste container for one time per week Collection
by 6:00 am the day of service. All Residential Customers must be offered Compostable Materials
Collection for the collection of accepted Yard Trimmings, Food Waste and Food Soiled Papers in the
same Container. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). Only COMPANY provided tipper carts will be allowed for the weekly
collection of compostable materials. Up to four (4) additional Compostable Materials Carts beyond
the first shall be provided to a Residential Customer upon request, at a cost specified in Exhibit C.
Compostable Materials placed in COMPANY -provided Carts or at the curb for Collection are the
property of COMPANY.
CLEAN-UP PROGRAMS
COMPANY shall provide Residential Customers with two (2) scheduled Clean-up Collection events per
calendar year for extra Solid Waste, Recyclable Materials, and/or Compostable Materials at no
additional cost to the Customers provided that COMPANY's costs for such events shall constitute costs
of operation included in the rate base and compensated for through the rates. COMPANY shall also
provide all Residential Customers with two (2) on-call pickups of Bulky Items per calendar year on
their regularly scheduled Collection day, upon Customer request. COMPANY will also provide on-call
Bulky Item pickups beyond two (2) per Residential Customer per calendar year for an additional fee
as listed in Exhibit C. These Bulky Items may be Collected in non -compaction vehicles, or in
compaction vehicles if the materials are not compacted, and taken to the Designated Processing
Facility for sorting.
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Exhibit A: Description of Services
COMPANY shall schedule Clean-up Collection events in such a manner that all Residential Customers
shall receive Clean-up Collection services on their regularly scheduled Collection day. Extra Solid
Waste, Recyclable Materials and/or Compostable Materials can also be Collected for a fee as listed in
Exhibit C in customer provided bags, not to exceed 32 gallons in size and 60 pounds by weight, when
placed next to the regular container on Collection day. If an Operations Manager determines it is safe
to collect overweight or oversized items, an additional fee will be charged as listed in Exhibit Cto cover
the cost of extra labor and/or equipment.
Semi -Annual Scheduled Clean -Up Service Guidelines
For each Clean-up Collection event, each Customer shall be permitted to place up to two (2) cubic
yards (equivalent to fourteen (14) standard 32 -gallon bags) of Solid Waste, Recyclable Materials
and/or Compostable Materials for Collection by COMPANY at no charge. In the event Customer places
more than two (2) cubic yards of materials for Collection, COMPANY shall charge the Customer for
additional Collection services as listed in Exhibit C.
COMPANY shall require Customers to adhere to the following guidelines:
A. No Bulky Items will be collected.
B. No rocks, cement, dirt or Hazardous Waste shall be accepted.
C. Materials shall be placed in disposable bags/containers, cardboard boxes or customer
owned 32 -gallon cans or bags. COMPANY will only empty customer owned cans that are
not more than 32 gallons in volume and are less than 60 pounds in weight. Recyclables
and/or yard waste should be placed in paper bags or cardboard boxes to ensure they are
recycled.
D. Discarded materials to be Collected in the Clean-up event shall be placed at the
designated Collection location by the Generator by 6:00 a.m. on the pickup day to ensure
Collection, but in no case shall be placed more than twenty-four (24) hours prior to the
pick-up day.
On -Call Bulky Item Service Guidelines:
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Exhibit A: Description of Services
Each Residential Customer may call prior to their regular Collection day and schedule two (2)
collections of up to two Bulky Items each per calendar year.
COMPANY shall require Customers to adhere to the following guidelines:
A. Customer must call in at least 24 hours on a regular business day (excluding weekends and
holidays) prior to their regular Collection day to have Bulky Items collected and give the
approximate size and weight of the Item so appropriate truck, equipment and number of
drivers can be determined.
B. No more than two (2) Bulky Items will be collected.
C. Any Bulky Item that is over 60 pounds, greater than 6 feet in length, or that cannot be
collected safely by one driver -operator, will be charged an additional special handling fee as
set forth in Exhibit C.
COMPANY may provide on-call Bulky Item pickups beyond two (2) per Residential Customer per
calendar year for an additional fee as listed in Exhibit C. These Bulky Items will be Collected in non -
compaction vehicles and taken to the Designated Processing Facility for sorting.
Holiday trees will be Collected curbside on the regularly -scheduled pickup day during a two- (2) week
period beginning on the Monday following the first Saturday after January 1. If trees are greater than
six (6) feet in length, they must be cut in half. All metal stands, plastic tree bags, ornaments, and
decorations of any sort must be removed. Flocked trees will not be accepted.
III. MULTI -FAMILY SERVICE (4 OR MORE SERVICE UNITS)
COMPANY shall provide semi -automated or automated tipper Carts in 32-, 64-, and 96 -gallon capacities
to be placed for Collection at the curb or, upon approval of COMPANY, the designated Collection location.
COMPANY will also provide Bins with 1-6, 10-, or 18 -cubic yard capacities for large volumes of material.
COMPANY will determine the size and type of container depending on materials generated, recycled and
diverted, safety, collection vehicle and service location. Service levels shall range from one time per week
to six times per week but should be adequate for the volume of material generated. Lids of containers
must close and should not be overflowing. Extra fees may be incurred for extra bags or overloaded bins
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Exhibit A: Description of Services
as listed in Exhibit C. Each Multi -Family Customer must maintain a 32 gallon per living unit equivalency
minimum service level, which the COMPANY may reduce based on actual waste reduction and diversion
results. COMPANY retains approval of all service locations for carts not at the curb and for bins.
COMPANY shall also service Customer -owned compactor units for the fees as listed in Exhibit C. For safety
and equipment purposes, COMPANY retains right of approval as to the type of compactor to be serviced
and the service location.
M7 - cuabOe
COMPANY shall provide all Multi -Family Customers with unlimited collection of acceptable glass, metal
and plastic excluding polystyrene, plastic bags and compostable plastics. Acceptable materials may change
depending on the markets. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). These materials will be collected in Company provided 32 or 64 -gallon color -
coded tipper carts: blue for paper and paper -fiber products, and brown for accepted commingled glass,
metal and plastics. Collection is available from one time per week to six times per week. Cardboard placed
in carts must be broken down small enough to easily slide out of the cart. Large cardboard boxes may
also be broken down and tied into 24" x 24" bundles and left beside the Recycling container. 1-2 cubic
yard rear loading bins are available for large amounts of cardboard collection with COMPANY's approval
of size and location. COMPANY will evaluate the appropriate container sizes on an individual customer
basis. Pickups can be scheduled from one time per week to six times per week. Recyclable Materials
placed in COMPANY -provided containers or at the curb for Collection are the property of the COMPANY.
Compostable (Organic) [-]ateulags
COMPANY will provide post -consumer Compostable Materials collection at all Multi -Family Dwellings and
that parallel the Single -Family Residential program. Customers will be provided up to four (4) 32- or 64 -
gallon tipper green carts for the collection of accepted Yard Trimmings, Food Waste and Food Soiled Paper
in the same Container. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). Additional carts beyond four may be rented at a nominal monthlyfee as listed
in Exhibit C.
In addition, Multi -Family tenants may receive kitchen pails at no additional cost to the tenant or property
manager for the collection of compostable materials after participating in a COMPANY provided training.
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Exhibit A: Description of Services
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COMPANY is to perform a visual waste audit at least one time per year for each Multi -Family account to
provide an estimate of the amount of Recyclable Materials and Compostable Materials still in the Solid
Waste container to help guide the Customer in service changes to increase diversion.
COMPANY will provide services to comply with all state laws regarding recycling and organics diversion.
On-site Collection of solid Waste, recyclable materials and compostable materials carts not at the curb is
available for an extra charge as set forth in Exhibit C.
Special pickups of Bulky Items may be requested by Multi -Family Customers for an additional fee as listed
in Exhibit C, provided that such a request may only be made by the bill payer (Property Manager or Owner)
and not by the occupant of an individual unit. If an individual occupant pays his or her own collection
service bill, only then will they be allowed to schedule special pick-ups. COMPANY may provide fee
estimates to Customer while scheduling the pickup. These Bulky Items may -be Collected in non -
compaction vehicles, or in compaction vehicles if the materials are not compacted, and taken to the
Designated Processing Site for sorting resulting in greater re -use and recycling. Extra material can be
Collected for a fee as listed in Exhibit C in. customer provided bags not greater than 32 gallons in size and
60 pounds by weight when placed next to the regular container on Collection day.
IV. COMMERCIAL SERVICE
Said UL aste
COMPANY shall provide semi -automated or automated tipper Carts in 32-, 64-, and 96 -gallon capacities
to be placed for Collection at the curb or, upon approval of COMPANY, the designated Collection location.
COMPANY will also provide Bins with 1-6, 10-, or 18 -cubic yard capacities for large volumes of material.
COMPANY will determine the size and type of container depending on materials generated, recycled and
diverted, safety, collection vehicle and service location. Service levels shall range from one time per week
to six times per week. Each Commercial Customer must subscribe to a level of service that is adequate
for the volume of material generated. Lids of containers must close and should not be overflowing. Extra
fees may be incurred for extra bags or overloaded bins as listed in Exhibit C. COMPANY retains approval
of all service locations for carts not at the curb and for bins. COMPANY shall also service Customer -owned
compactor units for the fees as listed in Exhibit C. For safety and equipment purposes, COMPANY retains
right of approval as to the type of compactor to be serviced and service location.
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Exhibit A: Description of Services
H¢-tmua ode mato iads
COMPANY shall provide all Commercial Customers with unlimited collection of acceptable glass, metal
and plastic bottles, jugs and containers excluding polystyrene, plastic bags and compostable plastics.
Acceptable materials may change depending on the markets. A full list of accepted materials is available
on the COMPANY's website (marinsanitaryservice.com). These materials will be collected in Company
provided 32 or 64 -gallon tipper carts color -coded carts: blue for paper and paper -fiber products, and
brown for accepted commingled glass, metal and plastics. Collection is available from one time per week
to six times per week. Cardboard placed in carts must be broken down small enough to easily slide out of
the cart. Large cardboard boxes may also be broken down and tied into 24" x 24" bundles and left beside
the Recycling container. 1-2 cubic yard rear loading bins are available for large amounts of cardboard
collection with COMPANY's approval of size and location. COMPANY will evaluate the appropriate
container sizes on an individual customer basis. Pickups can be scheduled from one time per week to six
times per week. Recyclable Materials placed in COMPANY -provided containers or at the curb for
Collection are the property of the COMPANY.
CGMPGS-�Zble (®Vgerluc) E-�AAteflaios
Two options are available for Commercial Business for collection of Organic materials. Both programs are
offered at a discounted rate to commercial customers as listed in Exhibit C.
Commercial Composting
COMPANY will provide post -consumer Compostable Materials collection at Commercial Businesses that
would parallel the Single -Family Residential program. Customers will be provided 32- or 64 -gallon tipper
green cartsforthe collection of accepted Yard Trimmings, Food Waste and Food Soiled Papers in the same
Container. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). By special request and upon approval of the Company, 1-2 cubic yard bins
may be available. Monthly collection fees are listed in Exhibit C.
Commercial Food to Energy (F2E) program in partnership with Central Marin Sanitation Agency
COMPANY will provide restaurants, grocery stores, cafeterias, and other similar businesses with 32 and/or
64 -gallon tipper dark green carts for the collection of a subset of Food Waste consisting of fruits,
vegetables, meats, dairy, fish, breads, pastas and other food scraps. A full list of accepted materials is
available on the COMPANY's website (marinsanitaryservice.com). This pre -consumer Food will be
81P;.ge
Updated 12-6-2018
Exhibit A: Description of Services
anaerobically digested for energy production at Central Marin Sanitation Agency. Monthly collection fees
for this service are set forth in Exhibit C.
COMPANY is to perform a visual waste audit at least one time per year for each Commercial Business
account to provide an estimate of the amount of Recyclable Materials and Compostable Materials still in
the Solid Waste container to help guide the Customer in service changes to increase diversion.
COMPANY will provide services to comply with all state laws regarding recycling and organics diversion.
On-site Collection of Solid Waste, Recyclable Materials and compostable Materials Carts not at the curb
is available for an extra charge as set forth in Exhibit C.
Special pickups of large, hard to handle or bulky items may be requested for an additional fee as listed in
Exhibit C. Estimates can be provided. These bulky items will be collected in non -compaction vehicles and
taken to the Marin Recycling Center for sorting resulting in greater re -use and recycling. Extra material
can be collected for a fee as listed in Exhibit C in cans or bags not greater than 32 gallons in size or 60
pounds by weight when placed next to the regular container on collection day.
V. MUNICIPAL SERVICES
COMPANY shall provide service to each CITY facility and those CITY -owned cans in public areas and parks
based upon mutually agreed upon parameters by CITY and COMPANY. These services shall constitute
costs of operation included in the rate base and compensated for through the rates of all Residential,
Commercial and Multi -Family Customers.
COMPANY shall provide semi -automated or automated tipper Carts in 32-, 64-, and 96 -gallon capacities
to be placed for Collection at the curb or, upon approval of COMPANY, the designated Collection location.
COMPANY will also provide Bins with 1-6, 10-, or 18 -cubic yard capacities for large volumes of material.
COMPANY will determine the size and type of container depending on materials generated, recycled and
diverted, safety, collection vehicle and service location. Service levels shall range from one time per week
to six times per week. Each CITY facility must subscribe to a level of service that is adequate for the volume
of material generated. Lids of containers must close and should not be overflowing. COMPANY retains
9 1 P a g e
Updated 12-6-2018
Exhibit A: Description of Services
approval of all service locations for carts not at the curb and bins. For safety and equipment purposes,
COMPANY retains right of approval as to the type of compactor to be serviced and service location.
ReLydabpe kl"L@ater i1 agcs1.
COMPANY shall provide all CITY facilities with unlimited collection of acceptable glass, metal and plastic
excluding polystyrene, plastic bags and compostable plastics. Acceptable materials may change
depending on the markets. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). These materials will be collected in Company provided 32 or 64 -gallon tipper
carts color -coded carts: blue for paper and paper -fiber products, and brown for accepted commingled
glass, metal and plastics. Collection is available from one time per week to six times per week. Cardboard
placed in carts must be broken down small enough to easily slide out of the cart. Large cardboard boxes
may also be broken down and tied into 24" x 24" bundles and left beside the Recycling container. 1-2
cubic yard rear loading bins are available for large amounts of cardboard collection with COMPANY's
approval of size and location. COMPANY will evaluate the appropriate container sizes on an individual
customer basis. Pickups can be scheduled from one time per week to six times per week. Recyclable
Materials placed in COMPANY -provided containers or at the curb for Collection are the property of the
COMPANY.
C®liiinp aMbge (®rgan"c) ateu lags
Two options are available for CITY facilities for collection of Organic materials.
Composting
COMPANY will provide post -consumer Compostable Materials collection at CITY facilities that would
parallel the Single -Family Residential program. Facilities will be provided 32- or 64 -gallon tipper green
carts for the collection of accepted Yard Trimmings, Food Waste and Food Soiled Papers in the same
Container. A full list of accepted materials is available on the COMPANY's website
(marinsanitaryservice.com). By special request and upon approval of the Company, 1-2 cubic yard bins
may be available.
Food to Energy (F2E) program in partnership with Central Marin Sanitation Agency
COMPANY will provide CITY facilities with cafeterias or other similar food service facilities with 32 and/or
64 -gallon tipper dark green carts for the collection of a subset of Food Waste consisting of fruits,
101Page
Updated 12-6-2018
Exhibit A: Description of Services
vegetables, meats, dairy, fish, breads, pastas and other food scraps. A full list of materials accepted is
available on the website. This pre -consumer Food will be anaerobically digested for energy production at
Central Marin Sanitation Agency.
Addidonao Seuvlcw
Special pickups of Bulky Items may be requested. These Bulky Items may be Collected in non -compaction
vehicles, or in compaction vehicles if the materials are not compacted, and sorted at the Marin Recycling
Center for greater re -use and Recycling.
COMPANY shall Collect Discarded Materials from all street -side public litter and Recycling containers
based upon mutually agreed upon parameters by CITY and COMPANY. CITY shall be responsible for
maintaining such containers.
COMPANY shall provide the occasional on-call pick-up of illegally dumped Discarded Materials at CITY's
request. COMPANY shall provide such service within twenty-four (24) hours of such request, provided
that the CITY authorizes or directs the service so that all costs incurred by COMPANY in providing the
service shall constitute costs of operations included in the rate base and compensated for through the
rates.
COMPANY will collaborate with the CITY on two community events throughout the year as designated by
the CITY. COMPANY will furnish, at no cost to the promoters, as needed up to ten (10), 3 cubic yard debris
boxes (or the equivalent). These debris boxes are to be used solely for solid waste, organics and recycling
generated by the events.
Se ekes Subjec� to Change
Services provided by COMPANY are subject to "Change in Scope" as defined and described in Exhibit B to
the Agreement. CITY and COMPANY shall meet and confer to establish any such change in scope. Agreed
upon changes of scope shall be effective irrespective of whether this Exhibit A — Description of Services is
subsequently amended to reflect such Changes in Scope.
111Page
Updated 12-6-2018
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT
ADJUSTMENT
AND RATE
Grote Regav ing EErJ9,0b1t 13
This Exhibit B is intended to conform to comparable exhibits in other agreements and agreed-upon
processes between the members of the Franchisors' Group and Collector. As a result, certain terms in his
Exhibit B may not conform to the defined terms used elsewhere in the Agreement to which this Exhibit B
is attached (the "Agreement"). In the event of any inconsistency between the terms of the Agreement
and this Exhibit B, the terms of this Exhibit B shall control.
I. COLLECTOR'S RATE APPLICATION
01:-eMeU,
The "Franchisors' Group" (comprised of the cities of Larkspur, Ross and San Rafael, the Las Gallinas Valley
Sanitary District and the County of Marin) have joined together to regulate the rates of the Collector in
accordance with these procedures. Because the Collector has services and related expenses unrelated to
the Franchisors' Group, the revenues and expenses are allocated between the Franchisors' Group and
these other agencies. The Collector's rates are based on its rate revenue requirement for the Rate Year'
calculated in accordance with either Section II or Section III below. Because both the forecasted rate
revenue requirement and the revenues from the approved rates involve assumptions about future events
and because such assumptions usually differ from actual events and these differences can be material,
the Collector is not guaranteed a profit.
Cool is (,fit
By August 1 (in a Base Year) or September 1 (in an Indexed Year), Collector shall submit an application
requesting the amount of Collector's rate revenue requirement and rate adjustment for the next Rate
Year, commencing January 1 of the following calendar year. The application is prepared using either the
Base Year approach (Section II) or the Indexed Year approach (Section III). In either case, the application
shall be submitted in the format described in Attachment 1 of this Exhibit B. In addition to the application
1 The Rate Year is the year for which rates are being calculated, the Current Rate Year is the year during which the
rates are being calculated and the Prior Rate Year is the most recently completed Rate Year. For example, in the
application for rates effective January 1, 2020 the Rate Year refers to the period from January 1, 2020 to December
31, 2020, the Current Rate Year refers to the period from January 1, 2019 to December 31, 2019 and the Prior Rate
Year refers to the period from January 1, 2018 to December 31, 2018.
1
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
the Collector shall provide a description and schedule of forecasted revenues and costs of new programs
agreed to by the Collector and any agency that is a member of the Franchisors' Group ("Member") or
proposed by the Collector.
A. Base Year Application: Once every five years, commencing with the application for the 2025 Rate
Year, upon written request of the Collector or the Franchisors' Group, with such written request due
by March 1 of the year preceding the January 1 for which rate revenues are requested to be adjusted
via a Base Year approach; provided, however, that nothing contained herein shall prevent the
Collector and the Franchisors' Group from agreeing to conduct a Base Year approach earlier than
would be allowed in the schedule stated above.
The Base Year approach application shall be based on: the Collector's actual financial results of
operations for the Prior Rate Year; audited financial statements for the Prior Rate Year; year-to-date
financial results of operations for the Current Rate Year; and Collector's forecasted costs for the next
Rate Year. This shall be called the "Base Year Rate Revenue Requirement." The Base Year approach
application's cost projections shall be directly derived from and directly reference revenues and costs
by category as listed in the Collector's audited financial statements such that all figures presented as
the basis for the Collector's application can be tied back to the financial statements for the most
recently completed fiscal year preceding the given August 1 rate application due date.
In its rate application, the Collector shall assemble and submit its forecasts of revenues at current
rates and subscription levels (with no adjustments for bad debt or projected migration or service level
changes), annual cost of operations, pass-through costs, and profit, for the coming year. The Collector
shall clearly explain in its rate application the method used to produce such forecasts, and such
information as is necessary to support the assumptions made with regard to such forecasts (such as
projected population growth or migration, service or operational changes, projected changes in
tonnages, known or reasonably expected cost increases, etc.).
The Collector shall provide all financial information and supporting documentation required for the
completion of the Base Year approach in a format acceptable to the Franchisors' Group or its
designated consultant in a timely manner. The Collector shall allow for all required information and
supporting documentation to be provided to the Franchisors' Group or its designated consultant via
2
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RA'Z'E
ADJUSTMENT
physical mail, a mail, or any other delivery method approved by the Franchisors' Group, including on-
site review of information at the Collector's offices. The Collector shall present forecasted amounts
for each of the categories listed in Section II below calculated in accordance with such Section.
B. Indexed Year Application: Every year that there is no Base Year approach, commencing with the rate
application for the 2020 Rate Year. The application shall be based on the Base Year Rate Revenue
Requirement adjusted as described below. This shall be called the "Indexed Year Rate Revenue
Requirement." The Indexed Year approach is the default method for annual rate adjustments and
shall continue indefinitely unless a Base Year approach is allowed and requested in accordance with
Section I.A. above.
of ,ate Applkaldon
The Franchisors' Group or a consultant engaged by the Franchisors' Group will review Collector's rate
application to ensure mathematical accuracy, conformance with this Exhibit B, reasonableness of expense
and revenue projections, and to review necessary supporting documentation for figures stated by the
Collector in the rate application. The Collector shall reimburse the Franchisors' Group for the cost of its
consultant in an amount not to exceed $15,000 for an Indexed Year application, or $125,000 for a Base
Rate application, with such limits to increase annually in accordance with the annual change in the
Consumer Price Index for Water and Sewer and Trash Collection, U.S. city average, Bureau of Labor
Statistics Series I.D. CUSROOOOSEHG, between the Index value for June of the current year and the
corresponding Index value for June of the prior year, rounded to the nearest hundredth of a percent,
subject to a minimum increase of 2.5% and a maximum increase of 5%.
The amount of reimbursement for an Indexed Year application is included in the Base Year Rate Revenue
Requirement for 2019, and as such the Franchisors' Group will be reimbursed annually up to the limit
stated above (and including applied annual increase) without additional Indexed Rate Revenue
Requirement amounts being necessary. If the full amount of reimbursement is not requested by the
Franchisors' Group, then any amounts of reimbursement below the limit will be subtracted from the Rate
Revenue Requirement in the Collector's application (Indexed or Base Year) for the following Rate Year.
For a Base Year application the amount of such reimbursement will be included in the Collector's Base
Year Rate Revenue Requirement.
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
The Franchisors' Group shall make its best efforts to complete the review in a timely manner so that rates
may be adjusted effective January 1 of each Rate Year. If Collector submits its rate application on or before
the application submittal date (August 1 or September 1, as applicable), and the Franchisors' Group delays
approving the annual rate adjustment until after January 1 of the following Rate Year, then Collector shall
be entitled to retroactively apply the rate adjustment to January 1. If the Collector submits its rate
application after the application submittal date (August 1 or September 1, as applicable), a retroactive
adjustment will be at the discretion of the Franchisors' Group.
II. CALCULATION OF COLLECTOR'S BASE YEAR RATE REVENUE
REQUIREMENT
The Base Year application shall clearly document Collector's calculation of Collector's Base Year Rate
Revenue Requirement and proposed rate adjustment based on the methodology described in this
Section II. Collector's Base Year Rate Revenue Requirement shall equal the sum of the forecasted amounts
set forth in this Section II, each of which shall be calculated in accordance with this Section II.
A. Forecasted Annual Cost of Operations.
The forecasted annual cost of operations consists of the sum of forecasted:
1. Labor expense
2. Benefits expense (including workers' compensation)
3. Garbage landfilling and Organics processing expense (including commercial mixed waste
processing expense and adjustment for Non -Franchisors' Group entities transfer/transport
expenses)
4. General and administrative expense (including other operating expenses)
5. Depreciation and lease expense
6. Maintenance expense (equipment and vehicles)
7. Fuel and oil expense
4
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
B. Methodology for Forecasting Annual Cost of Operations.
1. Determine Actual Costs. Collector's audited financial statement shall be reviewed to
determine Collector's actual costs necessary to perform all the services in the manner
required by this Agreement. The Collector's auditor shall determine that costs have actually
been incurred and have been assigned to the appropriate cost category as described below:
2. Allocation of Costs. The audited financial statements include costs of operations unrelated
to the Franchisors' Group. These include costs reported for the following Collector's
departments:
Department Department Name Part of Franchisors'
Number I Group
100
I Garbage Collection
Yes
101
San Anselmo Collection
No
102
County (RVSD-N) Collection
Yes
103
Fairfax Collection
No
104
San Quentin Collection
No
200
Debris Box Collection
No
300
Transfer Station
Yes
400
Shop
Allocation
500
General & Administrative
Allocation
600
Recycling Collection
Yes
700
MRRC Operations
No
800
_
Shredding/Street Sweeping —�
– No
Collector shall include only costs for Department 100 -
Franchisors' Group Garbage
Collection,
Department 102 – County (RVSD-N) Collection,
Department 300 – Transfer
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
Station and Department 600 - Recycling Collection, plus allocated Shop (Department 400),
General and Administrative costs (Department 500), and management salaries (Department
500) when performing these procedures. In allocating costs among these departments the
Collector shall use the following procedures.
a. Shop costs (Department 400) shall be allocated by truck route hours.
b. General & administrative costs (Department 500) are allocated using an average of:
L Each department's percentage of projected revenue
ii. Each department's percentage of annual customer counts
iii. Each department's percentage of wages
For example:
Total Revenue (all departments) $100
Franchisors Group (Dept 100) Revenue $75
Franchisors Group (Dept 100) Percentage 75% A
Customer Counts
Total Annual Customer Counts (all departments) 100
Franchisors Group (Dept 100) Annual Customer Counts 73
Franchisors Group (Dept 100) Percentage 73% B
Total Wages (all departments) $100
Franchisors Group (Dept 100) Wages $25
25% C
Allocation % for General & Administrative Costs to Dept 100 58%
C. Management salaries (Department 500) shall be allocated based on the study
completed for the Rate Year ended December 31, 2017 reporting the time spent by
management related to the Franchisors' Group and other non -Franchisors' Group
activities.
d. The Collector shall identify the allocated portion of the Collector's financial statement
costs that are allocated to the Franchisors' Group. The methodology for the Franchisors'
R
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
Group's allocated portion of the Collector's costs shall be the same as or substantially
similar to the methodology used to determine the allocations used in setting the
Collector's Rate Year 2019 Rate Revenue Requirement.
3. Calculate Adjusted Costs. Collector shall adjust actual costs allocated to the Franchisors'
Group to eliminate costs that are unnecessary or unreasonable for the performance of the
services required by the Agreement. These non -allowable costs include the following:
a. Costs of any category or type not actually incurred, not necessary for the provision of
services under this Agreement or unreasonable in amount.
b. Payments to directors and/or owners of Collector, unless paid as reasonable
compensation for services actually rendered.
c. Fines for penalties of any nature.
d. Federal or state income taxes.
e. Charitable or political donations.
f. Depreciation or interest expense for collection vehicles, containers, other equipment,
offices and other facilities if such items are leased from a related party at more than their
actual cost.
g. Attorneys' fees and other expenses incurred by Collector in any court proceeding in which
any agency that is a Member of the Franchisors' Group and Collector are adverse parties,
unless Collector is the prevailing party in such proceeding.
h. Attorneys' fees and other expenses incurred by Collector arising from any actor omission
by Collector in violation of this Agreement.
i. Attorneys' fees and other expenses incurred by Collector in any court proceeding in which
Collector's own negligence, violation of law or regulation, or wrongdoing are at issue.
j. Payments to related -party entities for products or services, in excess of the cost to the
related -party entities for those products or services.
7
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
k. Goodwill.
I. Transfer and transport, disposal, and/or processing costs whose rate/ton exceeds
comparable charges for the same services under the same conditions (e.g., transport
distances to processing and disposal facilities) by other companies in the San Francisco
Bay Area.
The Allocated Costs (from Step 2 above), adjusted for non -allowable costs (from this Step 3),
shall be considered "Allowed Costs" for the purposes of forecasting costs.
4. Forecasted Rate Year Allowed Cost of Operations. The Allowed Cost of operations for the
Rate Year shall be forecasted in the following manner:
a. Labor expense for the Rate Year shall be forecasted based on negotiated labor
agreements for represented employees as well as reasonable wage and salary
adjustments for non -represented employees. Reasonableness will be determined by
such factors such as a comparison to industry standards for comparable operations in
the San Francisco Bay Area.
b. Benefit expense for the Rate Year shall be forecasted based on negotiated labor
agreements for represented employees, reasonable adjustments for non -represented
employees, and changes in insurance premiums net of any refunds. Benefits includes
workers' compensation expense, which shall be calculated by multiplying the wages
established in the Step 4.a above by the applicable premium rates from the Collector's
insurance carrier for the projected Rate Year.
d. Garbage landfilling and Organics processing expense for the Rate Year shall be
forecasted in the following manner:
i. Garbage expense:
0
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RA'Z'E
ADJUSTMENT
Projected Rate Year Disposal Expense = (Rate Year projected disposal tip fee per
Ton) X (total annualized actual tons for the first six months of the Current Rate
Year subject to reasonable adjustments for anticipated changes).
ii. Commercial mixed waste processing expense:
Projected Rate Year Processing Expense = (Rate Year projected processing fee
per Ton) X (total annualized actual tons for the first six months of the Current
Rate Year subject to reasonable adjustments for anticipated changes). This
tonnage includes waste collected from municipal facilities, parks and cans as
well as illegally dumped material.
The Commercial mixed waste processing rate per ton shall be $96.91 for the
Rate Year ending December 31, 2019 and thereafter shall be adjusted annually
by multiplyingthe Processing rate per Ton contained in the most recent Indexed
Year Rate Revenue Requirement by one (1) plus the percentage change in the
"Consumer Price Index for Water and Sewer and Trash Collection, U.S. city
average, Bureau of Labor Statistics Series I.D. CUSR0000SEHG" between the
Index value for June of the current year and the corresponding Index value for
June of the prior year, rounded to the nearest hundredth of a percent.
iii. Organics processing expense:
Forecasted Organics processing expense = (Organics projected processing rate
per Ton as calculated below) X (annualized actual total Tons of Organics for the
first six months of the Current Rate Year subject to reasonable adjustments for
anticipated changes).
The Organics Processing rate per Ton shall be set at $50.72 for the 2019 Rate
Year and thereafter shall be adjusted annually by multiplying the Processing
Rate per Ton contained in the most recent Indexed Year Rate Revenue
Requirement by one (1) plus the annual percentage change in the "Consumer
Price Index for Water and Sewer and Trash Collection, U.S. city average, Bureau
9
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
of Labor Statistics Series I.D. CUSROOOOSEHG" between the average Index value
for June of the current year and the corresponding Index value for June of the
previous year, rounded to the nearest hundredth of a percent.
iv. Transfer/transport adjustment for the Rate Year shall reduce costs contained
in Department 300, which would otherwise be included in the Collector's Base
Year Rate Revenue Requirement, related to the transfer and transport of
materials not generated in the Franchisors' Group jurisdictions under their
contracts with the Collector shall be calculated in the following manner:
Forecasted Transfer/Transport Adjustment = (Transfer /Transport projected
Fee per ton as calculated below) X (annualized actual total disposal Tons for the
operations not affiliated with the Franchisors' Group for the first six months of
the Current Rate Year subject to reasonable adjustments for anticipated
changes). The Transfer/ Fee per ton shall be $23.35 for the 2019 Rate Year and
thereafter shall be determined as part of the Base Year Rate Revenue
Requirement.
e. General and administrative expense for the Rate Year shall be forecasted based on
historical costs adjusted for the Collector's forecasts as approved by the Franchisors'
Group.
f. Depreciation and lease expense for the Rate Year shall be forecasted based on the
Collector's actual depreciation, which shall reflect the retirement and addition of assets.
Projected depreciation shall include anticipated purchases in the next Rate Year. The
Allocation of depreciation and lease expense between the Franchisors' Group and other
operations shall be based on truck usage.
g. Maintenance expense for the Rate Year shall be forecasted based on historical costs
adjusted for changes in the number of equipment and vehicles to be maintained and the
cost of such maintenance.
10
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
h. Fuel and oil expense for the Rate Year shall be forecasted based on actual annualized
costs and gallons of fuel and oil consumed for the first six months of the Current Rate
Year.
5. Calculated profit. Collectors calculated profit for the Rate Year shall be forecasted by dividing
the forecasted annual cost of operations (from steps 1-4 above) by 0.905 and subtracting the
forecasted annual costs of operations from the dividend.
6. Forecasted Other Costs. The Other Costs for the Rate Year, which are not used for the basis
of calculating Collector's Profit as described above, shall be forecasted in the following
manner:
a. Recyclables Net Processing Expense. The 2019 Rate Year Recyclable Materials processing
rate revenue category is set at $680,000 and is calculated as the product of a projected
17,000 tons of Recyclable Materials to be collected by the Collector from the Franchisors'
Group in Rate Year 2019, times a net Recyclable Materials processing cost of $40 per ton,
which is set and shall be adjusted annually, in both Base Years and Indexed Years, as
described below. Under no circumstances will the Collector charge a net Recyclable
Materials processing cost to the Franchisors' Group that would exceed the net Recyclable
Materials processing cost charged by the Collector or its affiliates to any other agency
whose Recyclable Materials are delivered to the Marin Recycling Center._Recyclables Net
Processing Expense shall be forecasted in the following manner:
i. Rate Year 2019 Net Recyclable Materials Processing Cost Per Ton: The net
Recyclable Materials processing cost of $40 per ton is set to incentivize the
Collector to maximize revenues from the sale of Recyclable Materials and is
calculated as the difference between the per ton Recyclable Materials processing
costs (set at $202.00 per ton for Rate Year 2019) and the per ton Recyclable
Materials revenue (set at $162.00 per ton for Rate Year 2019) for the Marin
Recycling Center.
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
The Collector's Rate Year 2019 per ton Recyclable Materials processing cost
amount of $202.00 is calculated as 90% of the projected Recyclable Materials
processing cost (90% of a projected $5,611,111 yielding $5,050,000 in
incentivized processing cost) divided by the projected total tons of Recyclable
Materials processed at the Marin Recycling Center (set at 25,000 tons for Rate
Year 2019), rounded to the nearest cent. $5,050,000 divided by 25,000 tons is
$202.00 per ton. The Collector's Rate Year 2019 per ton Recyclable Materials
revenue amount of $162.00 per ton is calculated as 90% of projected Recyclable
Materials sales revenues (90% of a projected $4,500,000 yielding $4,050,000 in
recycling revenues) divided by the projected total tons of processed Recyclable
Materials (set at 25,000 tons for Rate Year 2019), rounded to the nearest cent.
$4,050,000 divided by 25,000 tons is $162.00 per ton.
ii. Annual Adiustments in Net Recyclable Materials Processing Cost Per Ton: The
Rate Year 2019 $5,050,000 incentivized Recyclable Materials processing cost for
the Franchisors' Group shall increase annually by the annual change in the
Consumer Price Index for Water and Sewer and Trash Collection, U.S. city
average, Bureau of Labor Statistics Series I.D. CUSROOOOSEHG between the Index
value for June of the current year and the corresponding Index value for June of
the prior year, rounded to the nearest hundredth of a percent, rounded to the
nearest dollar.
For example, using the same 3.43% increase shown in Section III.A. below, the
Rate Year 2020 incentivized processing cost for the Franchisors' Group would be
$5,223,215. That amount shall be divided by the number of all tons of Recyclable
Materials processed at the Marin Recycling Center from July 1 of the Prior Rate
Year through June 30 of the Current Rate Year. As a sample calculation, if the
Marin Recycling Center processes 26,000 tons of Recyclable Materials between
July 1, 2018 and June 30 of 2019, then the Collector's Rate Year 2020 per ton
12
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
Recyclable Materials processing cost would be $5,223,215 divided by 26,000 tons,
equaling $200.89 per ton.
The Rate Year 2020 per ton Recyclable Materials revenue amount shall be
calculated based on 90% of the total revenue received by the Marin Recycling
Center in the categories of "Salvage Support (Processing Fee Income)", "Salvage
Income (Buyback Scrap, Paper, Plastics, Aluminum, Glass)", "Redemption Income
— Plastics, Aluminum, Glass (Net of Buyback Purchases)", "Sales Adjustments
(Other Salvage Income)" and "Miscellaneous Income (Other Redemption Income -
State)" from July 1 of the Prior Rate Year through June 30 of the Current Rate
Year. The total of those revenues shall be divided by the number of all tons of
Recyclable Materials processed at the Marin Recycling Center during that same
time period, yielding the same number of tons as calculated for the per ton
Recyclable Materials processing cost, above. For example, using the same
example of 26,000 tons from July 1, 2018 through June 30, 2019, and a
placeholder example of $4,500,000 in total revenue received in the categories
stated above, the Collector's Rate Year 2020 per ton Recyclable Materials
revenue amount would be $4,500,000 times 90% divided by 26,000 tons,
equaling $155.77 per ton. Based on the examples shown above, the Collector's
Rate Year 2020 net Recyclable Materials processing cost would be $200.89 per
ton minus $155.77 per ton, equaling $45.12. Notwithstanding the foregoing, (a)
Salvage Income for Paper shall be reduced by non -processed paper brokerage
sales for third parties, and (b) the calculation will not include income or tons from
recyclable materials processed for third parties or agencies that were not
customers of the Collector or the Marin Recycling Center as of December 31,
2018.
iii. Revisions to Incentivized Recyclable Materials Processing Cost: The Franchisors'
Group and Collector agree that the methodology to incentivize the Collector to
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
maximize revenues from the sale of Recyclable Materials described herein
(specifically the use of 90% of costs and 90% of revenues) is appropriate given
current market conditions. However, in the event that markets for Recyclable
Materials change substantially resulting in two (2) consecutive Rate Years of
annual decreases or increases of 10% or greater in the total revenue received by
the Marin Recycling Center in the categories of "Salvage Support (Processing Fee
Income)", "Salvage Income (Buyback Scrap, Paper, Plastics, Aluminum, Glass)",
"Redemption Income — Plastics, Aluminum, Glass (Net of Buyback Purchases)",
"Sales Adjustments (Other Salvage Income)" and "Miscellaneous Income (Other
Redemption Income -State)" between July 1 of the Prior Rate Year and June 30 of
the Current Rate Year, then the Franchisors' Group and Collector agree to
mutually consider necessary and appropriate revisions to the incentive
mechanism described herein. Such revisions would be considered inasmuch as
they would maintain fair and equitable cost to Franchisors' Group rate -payers
while continuing to provide incentives for the Collector to maximize efficiencies
and the amount of revenue generated from the sale of Recyclable Materials. Any
change in the incentive methodology as described herein would be via
Amendment to the Agreement. In addition, in a Rate Year subject to a Base Year
approach only, the Collector may propose to update the Recyclable Materials
processing cost component based on changes in its costs to process Recyclable
Materials.
b. Forecasted Interest Expense for the Rate Year shall be based on the Collector's actual
interest from its loan amortization schedules for actual and projected capital expenditures
for services under this Agreement.
c. Zero Waste Marin (JPA) Fees Expense for the Rate Year shall be based on the tons
collected in the Franchisors' Group Members for the period determined and rate established
by the JPA.
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
d. Forecasted Other Agency Fees Expense. Forecasted Other Fees expense (including the
Vehicle Impact Fee and additional Other Fees not based on tonnage as they may be
implemented throughout the Term) for the Rate Year shall be calculated using the
appropriate methodology and the forecasted values.
7. Forecasted Revenues at Current Rates. Collector shall provide detailed forecasts of revenues
at current rates and subscription levels, with no adjustments for bad debt or projected
migration or service level changes.
8. Forecasted Other Revenues. Forecasted other revenues for the Rate Year shall include
revenues received by the Collector from related and third parties from the use of assets
(including but not limited to vehicles and transfer station equipment) or provision of services
by employees (including but not limited to drivers, operators, and processors).
9. Forecasted Franchise Fees Expense. Forecasted Franchise Fees expense for the Rate Year
shall be calculated by multiplying the applicable franchise fee percentage by Member (which
are each set to be a percentage of gross rate revenues collected by Collector) times the
projected revenues for each Member for the Rate Year. Projected revenues for the Rate Year
are calculated by multiplying Forecasted Revenues at Current Rates (Step 7, above) times the
Rate Adjustment Factor (calculated in accordance with Section ILC, below). Note that is a
circular calculation wherein: the Rate Adjustment Factor is dependent on the Total Collector's
Rate Revenue Requirement (calculated in accordance with Step 10, below); the Total
Collector's Rate Revenue Requirement is dependent on the Forecasted Franchise Fees; the
Forecasted Franchise Fees are dependent on the Rate Year Revenues, and; the Rate Year
Revenues are dependent on the Rate Adjustment Factor. Because of this circular relationship,
this is best calculated using a computer which can run iterative calculations to resolve this
circular reference and yield accurate calculations for each of the interdependent elements
described in this Section.
15
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
10. Forecasted Total Collector's Rate Revenue Requirement. Collector's Total Base Year Rate
Revenue Requirement necessary to perform all the services and pay all fees in the manner
required by this Agreement for the Rate Year shall be equal to the sum of the following:
a. Forecasted annual cost of operations (determined in accordance with Step 4 above);
plus
b. Profit (determined in accordance with Step 5 above); plus
C. Forecasted Other Costs (determined in accordance with Step 6 above); plus
d. Calculated Franchise Fees at projected Rate Year rates (determined in accordance with
Step 9, above); plus or minus
d. Starting with the 2021 Rate Year, the difference between the Prior Rate Year Rate
Revenue Requirement and the total amount of the Collector's billings to all Franchisors'
Group customers during the Prior Rate Year. The Rate Revenue Requirement for Rate
Year 2019 is $37,826,662. For example, if the total amount of 2019 charges billed by the
Collector to all Franchisors' Group customers is $37,850,000 then the Rate Year 2021
Rate Revenue Requirement adjustment would be $37,826,662 minus $37,850,000,
yielding negative $23,338, thus decreasing the Rate Year 2021 Rate Revenue
Requirement by $23,338. Likewise, if the total amount of 2019 charges billed by the
Collector to all Franchisors' Group customers is $37,700,000 then the Rate Year 2021
Rate Revenue Requirement adjustment would be $37,826,662 minus $37,700,000,
yielding positive $126,662, thus increasing the Rate Year 2021 Rate Revenue
Requirement by $126,662.
C. Rate Adjustment Factor. The Rate Adjustment Factor shall be calculated overall for the
Franchisors' Group and individually by Member via the following:
1. Total Forecasted Revenues, which are calculated as the sum of Forecasted Revenues at
Current Rates (Step 7, above) and Forecasted Other Revenues (Step 8, above); minus
16
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
2. The Total Collector's Rate Revenue Requirement for the coming Rate Year for each Member
(inclusive of calculations of Franchise Fees and Other Agency Fees for each Member).
3. The difference between the Total Forecasted Revenues minus Total Collector's Rate Revenue
Requirement will equal either a negative Shortfall (requiring a rate increase) or a positive
Surplus (requiring a rate decrease).
4. The Rate Adjustment Factor is calculated by dividing the Shortfall or Surplus by Forecasted
Revenues at Current Rates. For example, using overall Franchisors' Group amounts as shown
in Attachment 1 to this Exhibit B:
Total Forecasted Revenues = $34,337,374 in Revenues at Current Rates +
$207,272 in Forecasted Other Revenues = $34,544,646.
Surplus or Shortfall = $34,544,646 in Total Forecasted Revenues minus
$37,826,662 in Total Collector's Rate Revenue Requirement for the Rate Year =
Shortfall of $3,282,016.
Rate Adjustment Factor = Shortfall of $3,282,016 divided by $34,337,374 in
Revenues at Current Rates = 9.56% Rate Adjustment Factor (as an increase to
rates).
D. Adjustment of Rates. Each rate approved for the Current Rate Year by each Member shall be
multiplied by the Rate Adjustment Factor for each Member to calculate the effective rate for the
Rate Year by Member.
III. DETERMINATION OF COLLECTOR'S INDEXED RATE REVENUE
REQUIREMENT.
The Indexed Year application shall clearly document Collector's calculation of Collector's Indexed Year
Rate Revenue Requirement and rate adjustment based on the methodology described in this Section III.
Collector's Indexed Year Rate Revenue Requirement shall equal the sum of the forecasted amounts for
the categories set forth in this Section III, each of which shall be calculated in accordance with the
17
EXHIBIT B
COLLECT'OR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
procedures set forth below. The Franchisors' Group and the Collector have agreed after thorough review
that the Rate Year 2019 monthly service rates to be set by the Members and charged and billed by the
Collector are necessary to collect rate revenues for the following rate revenue categories, yielding a total
Rate Year 2019 Base Year Rate Revenue Requirement of $37,826,662. Amounts shown below are 2019
totals for the Franchisors' Group as a whole and for each Member. Percentages of Total Operating
Revenue by Member shall be used in allocating rate revenue elements (except for Franchise Fees and
Other Agency Fees) to the Members and shall remain fixed until the next Base Year application.
2019 Rate Revenues by Category
A. Collector Operations. The Collector Operations rate revenue category for the Rate Year consists
of the sum of the following categories as described below:
18
Marin
Franchisors'
Group Total
San Rafael
Larkspur
County
LGVSD
Ross
Percentage of Total Operating Revenue
100.00%
63.53%
15.97%
9.93%
8.50%
2.08%
Collector Operations
23,795,090
15,116,267
3,799,434
2,362,401
2,022,075
494,914
Fuel and Oil True -up
80,477
51,124
12,850
7,990
6,839
1,674
Garbage Landfilling and Organics Processing
4,084,811
2,594,951
652,234
405,544
347,122
84,960
Garbage Landfilling and Organics True -up
17,597
.11,179
2,810
1,747
1,495
366
Subtotal for Profit Calculation
27,977,975
17,773,521
4,467,328
2,777,682
2,377,531
581,914
Collector Profit
2,936,915
1,865,729
468,946
291,580
249,575
61,085
Recyclable Materials Processing
680,000
431,982
108,578
67,511
57,785
14,143
Recycling Losses
117,475
74,628
18,758
11,663
9,983
2,443
Interest
541,131
343,763
86,404
53,724
45,985
11,255
Zero Waste Marin Fees
381,250
242,196
60,875
37,851
32,398
7,930
Franchise Fees
3,978,060
2,338,487
638,199
750,459
145,154
105,761
Other Agency Fees
1,213,857
443,600
568,400
201,857
-
-
Total 2019 Rate Revenue Requirement
37,826,662
23,513,906
6,417,488
4,192,327
2,918,411
784,531
A. Collector Operations. The Collector Operations rate revenue category for the Rate Year consists
of the sum of the following categories as described below:
18
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
1. Labor expense
2. Benefits expense
3. General and administrative expense
4. Depreciation and lease expense
5. Maintenance expense
6. Fuel and oil expense
7. Fuel and disposal true -ups, which apply only to the Rate Revenue Requirements for Rate Years
2019, 2020 and 2021 (whether calculated under the Base Year approach or Indexed Year
approach). The total Rate Revenue Requirement for each of these Rate Years will include
$98,074 to account for prior Collector true -ups on costs for fuel, oil, and disposal (with no
further revenue for prior true -ups being collected via the rates or due to the Collector).
The Collector Operations rate revenue category (not including the fuel and disposal true ups for
2019 through 2021) increases annually from the Prior Rate Year, whether such category for the
Prior Rate Year was determined by the Base Year approach or the Indexed Year approach, by the
percentage change in the Consumer Price Index for Water and Sewer and Trash Collection, U.S.
city average, Bureau of Labor Statistics Series I.D. CUSROOOOSEHG, subject to a minimum increase
of 2.5% and a maximum increase of 5.0%. The percentage change is calculated by dividing the
Index value for June of the current year by the Index value for June of the prior year, rounded to
the nearest hundredth of a percent.
For example, the Rate Year 2020 Collector Operations rate revenue category shall be the product
of the 2019 Collector Operations rate revenue category of $23,795,090 times the Index value in
June of 2019 divided by the Index value in June of 2018 (which was 236.869), rounded to the
nearest dollar. If the Index value in June of 2019 is 245.000, then the Rate Year 2020 Cost of
Operations rate revenue category shall equal $23,795,090 times 245.000 divided by 236.869,
which is $24,611,904 (a 3.43% increase over the Prior Rate Year).
B. Garbage Landfilling and Organics Processing. The Rate Year 2019 Garbage Landfilling and
Organics processing rate revenue category is set at $4,102,408 and is calculated based on the sum
19
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
of the products of the projected Rate Year 2019 Franchisors' Group tons and the per ton tipping
fees for the following categories: residential garbage, residential green waste/organics,
commercial garbage, commercial mixed waste for processing, commercial food scraps, and
Franchisors' Group waste delivered to the Collector and Franchisors' Group clean-ups delivered
to the Collector. This sum is reduced by the product of the projected Rate Year 2019 non-
regulated (non -Franchisors' Group) tons times the per ton credit for hauling of those tons.
The total of the above for Rate Year 2019 is $4,084,810, to which $17,598 is added to account for
prior year cost true -ups (applicable only in Rate Years 2019, 2020 and 2021), yielding $4,102,408
in 2019. The specific tons and per ton rates used for the basis of the Rate Year 2019 calculation
are shown below.
Residential garbage
Residential green waste/organics
Commercial garbage
Commercial mixed waste for processing
Commercial food scraps
Franchisors' Group waste
Credit for hauling non-regulated tons
10,824 tons times $57.33 per ton
17,575 tons times $50.72 per ton
27,497 tons times $57.33 per ton
9,615 tons times $96.91 per ton
2,133 tons times $23.46 per ton
2,043 tons times $96.91 per ton
7,856 tons times $23.35 per ton
The Collector shall use the same methodology to calculate the Garbage Landfilling and Organics
Processing revenue category amount for each Rate Year after the 2019 Rate Year by using the
annualized actual tons by category shown above for the first six months of the Current Rate Year
subject to reasonable adjustments for anticipated changes as the basis for projecting tons for the
coming Rate Year. For example, the Collector shall use tons in the above categories from January
1, 2019 to June 30, 2019 as the basis for projecting tons for Rate Year 2020, and so forth. The
Collector shall multiply the projected tonnages by the actual per ton tipping fees for each category
for the coming Rate Year, if available; if actual per ton tipping fees for the coming year are not
available for any category, then the Collector will project the coming year per ton tipping fees for
such categories by increasing the actual per ton tipping fee in the Current Rate Year by the annual
2 This tonnage includes waste collected from municipal facilities, parks and cans as well as illegally dumped
material.
20
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
percentage change in the Consumer Price Index for Water and Sewer and Trash Collection, U.S.
city average, Bureau of Labor Statistics Series I.D. CUSROOOOSEHG between the Index value for
June of the current year and the corresponding Index value for June of the prior year, rounded to
the nearest hundredth of a percent, subject to a minimum increase of 2.5% and a maximum
increase of 5.0%.
C. Collector Profit. The Collector Profit rate revenue category is calculated based on the sum of the
Collection Operations (per Section III.A. above and including fuel and disposal true -ups in Rate
Years 2020 and 2021) and Garbage Landfilling and Organics Processing (per Section III.B. above)
for the Rate Year, divided by 0.905 and subtracting the same sum, rounded to the nearest dollar.
For example, if the sum of Collector Operations and Garbage Landfilling and Organics Processing
for the Rate year is $29,000,000 then the Collector Profit rate revenue category shall be
$29,000,000 divided by 0.905 (yielding $32,044,199), minus $29,000,000, equaling $3,044,199.
D. Recyclable Materials Processing. The Recyclable Materials Processing rate revenue category for
each Rate Year shall be calculated in accordance with Section II.B.6.a. above.
E. Interest. The Interest rate revenue category shall be increased in the same manner as Collector
Operations, in accordance with Section III.A. above.
F. Franchise Fees. The Forecasted Franchise Fees category for the Rate Year shall be calculated in
accordance with Section II.B.7. above.
G. Other Agency Fees. The Forecasted Other Agency Fees category (including the Vehicle Impact Fee
and additional Other Fees as they may be implemented throughout the Term) for the Rate Year
shall be calculated in accordance with Section II.6.9. above.
H. Zero Waste Marin (JPA) Fees. The Zero Waste Marin (JPA) Fees category amount for each Rate
Year shall be calculated based on the amounts of Zero Waste Marin (JPA) Fees in the Current Rate
Year times the percentage increase in Zero Waste Marin (JPA) Fees to be paid by the Collector in
the Rate Year.
I. Recycling Losses. Apply only to the Rate Revenue Requirements for Rate Years 2019, 2020 and
2021 (whether calculated under the Base Review approach or Indexed Year approach). The total
21
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
Rate Revenue Requirement for each of these Rate Years will include $117,475 to account for prior
Collector losses on the processing of Recyclable Materials (with no further revenue for prior
recycling losses being collected via the rates or due to the Collector).
J. Annual Rate Revenue Reconciliation. The annual rate revenue reconciliation for each Rate Year
shall be calculated in accordance with Section 11.6.10.d. above.
K. Collector's Total Rate Revenue Requirement for Rate Year. Collector's Total Rate Revenue
Requirement for the Rate Year shall be equal to the sum of the amounts calculated in accordance
with subsections A through J of this Section 111. The Total Rate Revenue Requirement shall be
calculated overall for the Franchisors' Group and individually by Member to account for the
varying Franchise Fees and Other Agency Fees for each Member.
L. Rate Adjustment Factor. The Rate Adjustment Factor for the Rate Year shall equal the Total Rate
Revenue Requirement for each Member (inclusive of calculations of Franchise Fees and Other
Agency Fees for each Member) for the Rate Year divided by the Total Rate Revenue Requirement
for each Member for the Current Rate Year, rounded to the nearest hundredth of a percent. For
example, if the 2020 Total Rate Revenue Requirement, calculated in accordance with subsections
A through J, above, is $38,500,000, then dividing that amount by the Rate Year 2019 total Rate
Revenue Requirement of $37,826,662 yields a Rate Adjustment Factor, effective January 1, 2020,
of an increase of 1.78% overall for the Franchisors' Group, with individual adjustments being
calculated individually by Member.
M. Adjustment of Rates. Each rate approved for the Current Rate Year by each Member shall be
multiplied by the Rate Adjustment Factor for each Member to calculate the effective rate for the
Rate Year by Member.
IV. RATES FOR CHANGES IN SCOPE, CHANGES IN LAW,
CHANGES IN FEES, OffRAORDINARY COSTS
In the event of any Change in Scope or Change in Law (each as described below) that results in an increase
or decrease in the Collector's costs or revenues, in the event of an Extraordinary Cost Increase (as defined
below), or in the event of any Change in Fees (as described below), an appropriate adjustment will be
22
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
made in the rates in order to compensate, to the maximum extent possible, for such increase or decrease
in costs, revenues or Fees, commencing from the dates) such increase or decrease first occurs while
maintaining the Collector's Profit (as defined in this Exhibit B). Any rate adjustment due to a Change in
Scope, a Change in Law or an Extraordinary Cost Increase shall be in the reasonable discretion of the
Franchisors' Group.
"Change in Scope" shall mean any change in the services provided by the Collector under the Agreement
or underthe franchise agreement between the Collector and any other Member of the Franchisors' Group
("Other Franchise Agreement"), whether proposed by the Collector or by such Member.
"Change in Law" shall mean the enactment, adoption, promulgation, issuance, modification or written
change in any law, regulation, order or judgment of any governmental body that affects the Collector's
performance of services under the Agreement or under any Other Franchise Agreement, including,
without limitation, the issuance of final regulations under existing laws, such as SB 1383.
"Change in Fees" shall mean any change in franchise fees, vehicle impact fees and other fees charged to
the Collector by any governmental agency in connection with the services provided by the Collector under
the Agreement or any Other Franchise Agreement, including, without limitation, Franchise Fees, Other
Agency Fees, Zero Waste Marin (JPA) Fees, the cancellation of any existing fees, and the adoption of any
new fees.
"Extraordinary Cost Increase" shall mean a substantial increase in the Company's operating or capital
costs or expenses that is outside of the Company's control but not due to a Change in Scope or Change in
Law.
In the case of a Change in Scope, a Change in Law or an Extraordinary Cost Increase, the Collector shall
provide the Franchisors' Group with projected operational, cost and revenue data reflecting the entire
financial effect of such Change or Increase, including any change in the Collector's Profit. The Franchisors'
Group reserves the right to require that the Collector supply any additional operational, cost and revenue
data, or any other information it may reasonably need, to ascertain the appropriate financial impact of
the Change or Increase and any necessary adjustment to rates resulting from such Change or Increase.
23
EXHIBIT B
COLLECTOR'S RATE REVENUE REQUIREMENT AND RATE
ADJUSTMENT
Rate adjustments for a qualifying Change in Scope or Change in Law, for a Change in Fees, or for an
Extraordinary Cost Increase shall take effect as of the beginning of the next Rate Year; provided, however,
that, in the case of any Change in Fees charged by the Franchisors' Group or by any agency that is a
member of the Franchisors' Group, the rate adjustment shall take effect as of the effective date of such
Change in Fees. The underlying service, cost, revenue or Fee changes supporting any rate adjustment
under this Section IV will be added to the appropriate category under Sections II and III above for purposes
of future rate adjustments.
Any rate adjustment under this Section IV that results from a Change in Scope, Change in Law, Change in
Fees or Extraordinary Cost Increase affecting fewer than all the Members of the Franchisors' Group may
be imposed on only the rate -payers of such affected agency or agencies in amounts necessary to
compensate the Collector for the financial effects of such Change or Increase.
24
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CONTRACT ROUTING FORM
INSTRUCTIONS: Use this cover sheet to circulate all contracts for review and approval in the order shown below.
TO BE COMPLETED BY INITIATING DEPARTMENT PROJECT MANAGER:
Contracting Department: City Manager
Project Manager: Cory Bytof
Extension: 3407
Contractor Name: Marin Sanitary Service
Contractor's Contact: Patty Garbarino
Contact's Email: patty.garbarino@marinsanitary.com
❑ FPPC: Check if Contractor/Consultant must file Form 700
Step
RESPONSIBLE
DESCRIPTION
COMPLETED
REVIEWER
DEPARTMENT
a. Email PINS Introductory Notice to Contractor
DATE
Check/Initial
1
Project Manager
Click here to
❑
enter a date.
b. Email contract (in Word) & attachments to City
11/9/2018
CB
Atty c/o Laraine.Gittens@cityofsanrafael.org
❑x
2
City Attorney
a. Review, revise, and comment on draft agreement
Click here to
and return to Project Manager
enter a date.
b. Confirm insurance requirements, create Job on
Click here to
PINS, send PINS insurance notice to contractor
Forward three (3) originals of final agreement to
enter a date.
® /
3
Project Manager
2/8/2019
❑x
Project Manager
contractor for their signature
CB
4
When necessary, * contractor -signed agreement
❑ N/A
agendized for Council approval
CB
*PSA > $20,000; or Purchase > $35,000; or
Or
Public Works Contract > $125,000
12/17/2019
PRINT
Project Manager
Date of Council approval
CONTINUE ROUTING PROCESS WITH HARD COPY
5
Forward signed original agreements to City
Attorney with printed copy of this routing form
Review and approve hard copy of signed
z/ J/�
6
City Attorney
agreement
7 City Attorney
Review and approve insurance in PINS , and bonds
(for Public Works Contracts)
Agreement executed by Council authorized official
8 City Manager/ Mayor
9
City Clerk
Attest signatures, retains original agreement and
forwards copies to Project Manager
70
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