BOARD OF DIRECTORS - · PDF fileATHERTON * BELMONT * BURLINGAME ... Finalize the 2017 Recology...

MEMBER AGENCIES ATHERTON * BELMONT * BURLINGAME * EAST PALO ALTO * FOSTER CITY * HILLSBOROUGH * MENLO PARK * REDWOOD CITY

* SAN CARLOS * SAN MATEO * COUNTY OF SAN MATEO * WEST BAY SANITARY DISTRICT

1. Roll Call

2. Public Comment Persons wishing to address the Board on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes. If there are more than five individuals wishing to speak during public comment, the Chairman will draw five speaker cards from those submitted to speak during this time. The balance of the Public Comment speakers will be called upon at the end of the Board Meeting. If the item you are speaking on is not listed on the agenda, please be advised that the Board may briefly respond to statements made or questions posed as allowed under The Brown Act (Government Code Section 54954.2). The Board's general policy is to refer items to staff for attention, or have a matter placed on a future Board agenda for a more comprehensive action or report and formal public discussion and input at that time.

3. Adjourn to Closed Session - Pursuant to Government Code Section 54956.9(A): Conference with Legal Counsel

– anticipated litigation – one case.

THE REGULAR PORTION OF THE MEETING IS ANTICIPATED TO START AT 2:30 PM

4. Roll Call

5. Additional Public Comment

6. Report from Closed Session

7. Executive Director’s Report A. Executive Director and Staff update on Shoreway Environmental Center Fire Damage

8. Approval of Consent Calendar Consent Calendar item(s) are considered to be routine and will be enacted by one motion. There will be no separate discussion on these items unless members of the Board, staff or public request specific items be removed for separate action. Items removed from the Consent Calendar will be moved to the end of the agenda for separate discussion. A. Approve Minutes of the July 28, 2016 Board of Directors Meeting B. Resolution Approving Contract for Legal Counsel for FY16/17 C. Approval of Quarterly Investment Report as of 6/30/16 D. Resolution Authorizing Update to 401(a) Retirement Plan Trustees E. Resolution Authorizing the Executive Director to execute a letter in support of Proposition 67 The California

Plastic Bag Ban Veto Referendum

9. Administration and Finance No Items

BOARD OF DIRECTORS THURSDAY, September 22, 2016 at 2:00 p.m.

San Carlos Library, Conference Room A/B 610 Elm Street, San Carlos, CA 94070

Member Brownrigg representing Burlingame

will be calling in to the meeting from: 48 Montgomery Ave. Suite 600

Bethesda, MD

MEMBER AGENCIES ATHERTON * BELMONT * BURLINGAME * EAST PALO ALTO * FOSTER CITY * HILLSBOROUGH * MENLO PARK * REDWOOD CITY

* SAN CARLOS * SAN MATEO * COUNTY OF SAN MATEO * WEST BAY SANITARY DISTRICT

10. Collection and Recycling Program Support and Compliance A. Resolution Approving the SBWMA Final Report Reviewing the 2017 Recology San Mateo County

Compensation Application B. Discussion on Expiring Agreement With WM Curbside to Provide Household Hazardous Waste Collection

Services C. Update on Franchise Agreement Negotiations

11. Shoreway Operations and Contract Management

A. Resolution Approving 2017 South Bay Recycling Compensation Application B. Resolution Authorizing the Executive Director to Execute a Contract with Signal Restoration Services

12. Informational Items Only (no action required)

A. 2016 Finance and Rate Setting Calendar B. July and August 2016 Check Register Detail C. Potential Future Board Agenda Items

13. Board Member Comments

14. Adjourn

EXECUTIVE DIRECTOR’S

REPORT

Agenda Item 7

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SBWMA BOD PACKET 9/22/2016 AGENDA ITEM: 7- p1

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: September 22, 2016 Board of Directors Meeting Subject: Executive Director Report

It is with great pleasure that I provide this first report on your staff’s activities, programs and priorities as we deliver on the mission of our agency. The agencies current top priorities are:

Finalize the 2017 Recology and SBR Compensation Adjustment Application As needed, assist member agency staff and their consultants as each member agency’s elected officials consider the approval of the 2017 rates for their ratepayer’s garbage and recycling services. To date, staff has worked with Menlo Park, East Palo Alto, City of San Mateo, San Carlos, Hillsborough, County of San Mateo, Foster City, Burlingame and West Bay Sanitary District to support their rate setting needs. Staff is readily available to attend every member agency’s elected board meetings and related study sessions during this entire process.

Restore the Shoreway Environmental Center’s Facilities to Full Operation Work with all stakeholders to achieve the timely restoration of the recently fire-damaged equipment and facilities to the Material Recovery Facility (MRF) and Transfer Station during the recent fire incidents. Staff is fully committed to minimize the financial impact to our ratepayers by utilizing the most cost-effective alternative material handling and processing options available, and by working collaboratively with the Hanover Insurance claims team, all restoration contractors and our longstanding program partners, including Recology and South Bay Recycling (SBR), to obtain maximum cost recovery from the insurance claim process. Staff currently estimates that the Material Recovery Facility will be closed until spring 2017. The Transfer Station was minimally affected during the second fire incident. Thanks to the diligent efforts by SBWMA staff and the men and women of SBR/ Recology, our collection programs operated on a “business as usual” basis during the entire post-incident, emergency remediation period of the affected facilities.

Execute the Collection Franchise Agreement Extension In April, 2016, the SBWMA board approved the formation of an Ad Hoc Committee consisting of representatives from six of its member agencies (Belmont, East Palo Alto, Menlo Park, Redwood City, City of San Mateo and the County of San Mateo) to meet with Recology of San Mateo County (RSMC) with the goal of obtaining mutual agreement on a Universal Solid Waste and Recycling Collection Services Franchise Agreement (agreement) that extends beyond 2020. This committee will determine process, resources, universal terms, agency priorities and timeline. The committee will engage the use of a third party industry expert to support its activities and it will convene in October through February with RSMC to deliver a new agreement to the SBWMA board for its consideration at the March 2017 board meeting. Upon SBWMA board approval of the agreement, RSMC will confer with each member agency to negotiate specific scope of work and pricing terms and obtain approval by their respective elected bodies by October 2017. If the majority of the member agencies do not approve the agreement by November 2017, staff will, with board approval, implement a comprehensive Request for Proposal, contractor



selection and service transition process between January 2018 and December 2020 to protect the interests of our ratepayers.

Comprehensive Assessment of Agency Resource Allocation Per board direction, review mandated regulatory and contractual responsibilities and long range plan components to ensure that agency resources and activities are in direct alignment. Report backs to the board will occur during the next few board meetings, and beyond. Delia and Associates has been retained to assist with the review of our organization’s structural components and needs, as well as staff’s professional development. A detailed update will follow by the November board meeting.

Other Agency Highlights: Staff has placed a priority on addressing:

1. Critical operating and material processing contract expiration, including: House Hazardous Waste Collection (Dec. 2016--Waste Management) Organics processing (Dec. 2018--Republic Services; Dec. 2020--Recology) Construction & Demolition (Jan. 2017--Zanker) Disposal (Dec. 2019--Republic Services)

Each of these contracts expires during the next three years and staff is diligently evaluating market pricing, service availability and best practice operational alternatives. It is clear that current market pricing for these vital services appears to be above our contractual pricing models. Please note that each of these contracts was originally negotiated during the great recession, and the pricing that we secured reflected the extremely competitive nature of the marketplace during those hard times.

2. Administrative Support:

My active engagement in many of the agency’s administrative policies and procedures has been both informative and illuminating. I am impressed with the agency’s core standard operating procedures. Like any dynamic organization, staff will, of course, always seek better ways to perform our work. Here are some items of note: Staff: Weekly staff and one-on-one meetings have been implemented which focus on project and program

tracking, building staff/team morale, professional development and providing high-quality service delivery. With Executive Committee collaboration, we are recruiting for the agency’s vacant Recycling Outreach and Sustainability Manager and Environmental Educational Associate (EEA) positions. After extensive review and program evaluation, these positions were deemed to be critical to the performance of our agency’s core mission and for the safety of our students during our robust environmental education tour program. Despite the MRF’s closure, recruitment for the EEA position will proceed to secure a qualified candidate who will be fully on-boarded and trained for the facility re-opening, and to provide pub ed program support in the meantime. Both positions are included in the agency’s approved FY16-17 administrative budget.

Financial services contract: Staff met with our financial services provider, City of San Carlos staff, to ensure a smooth bridge during recent significant staff transition. This discussion presented an ideal opportunity to also underscore our agency’s service expectations.

Legal team engagement: The agency’s legal consultants have been frequently engaged on a variety of

contracts, policies, procedures and general agency practices. This excellent collaboration will create a strong foundation for our agency’s future projects, programs and operations.



Phone System review: At a board member request, staff conducted a complete phone system review. Usability improvements were made immediately and a major software upgrade is scheduled for the evening of September 28th. Alternative systems remain an option for future.

Office equipment: Some furniture has been replaced or expanded due to meet office functionality and file

storage needs, as well as to meet ergonomic standards. Additional improvements may also follow. When available, used furniture has been purchased. The office’s carpet were deep-cleaned in August.

Respectfully submitted,

Joe La Mariana Executive Director


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 7A – p1

Agenda Item 7A Executive Director and staff Update on Shoreway Environmental Center

Fire Damage

Discussion item only at the September 22, 2016 Board of Directors Meeting


CONSENT CALENDAR

Agenda Item 8


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8A - p1

DRAFT MINUTES SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY

MEETING OF THE BOARD OF DIRECTORS July 28, 2016 – 2:00 p.m.

San Carlos Library Conference Room A/B

Call To Order: 2:06PM 1. Roll Call

Alternate Member Cary Wiest attended representing Atherton Member Michael Brownrigg of Burlingame attended via phone call from 8 Tennis Court, Albuquerque NM Member Jay Benton of Hillsborough attended via phone call from 8492 Lahontan Drive Truckee CA 2. Public Comment

Persons wishing to address the Board on matters NOT on the posted agenda may do so.

Each speaker is limited to two minutes. If there are more than five individuals wishing to speak during public comment, the Chairman will draw five speaker cards from those submitted to speak during this time. The balance of the Public Comment speakers will be called upon at the end of the Board Meeting.

If the item you are speaking on is not listed on the agenda, please be advised that the Board may briefly respond to statements made or questions posed as allowed under The Brown Act (Government Code Section 54954.2). The Board's general policy is to refer items to staff for attention, or have a matter placed on a future Board agenda for a more comprehensive action or report and formal public discussion and input at that time.

None

3. Interim Executive Director’s Report Interim Executive Director Gans gave an overview of his staff report. He noted that the contract negotiation process is waiting for the new Executive Director to start work, and staff will be back in September with updates on the process. He also noted that he wanted to bring attention to the VRS sort labor issue explaining that that VRS is having difficulty supplying labor, and the County is asking for a more competitive wage to attract workers. He added that a $1 per hour increase would increase SBR’s cost by $50,000 per year, and that staff would come back to the Board in September on this issue. He then noted issues that would be discussed in more detail later in the agenda. He handed out a pie chart graphically representing the financial process of the SBWMA that leads to Member Agencies setting rates, and explained where in that process the agency is, noting that staff is very close to being to provide a final rate impact for the Member Agencies. He noted that this year Recology and SBR have negative increases due to fuel costs decreasing.

Agency Present Absent Agency Present Absent

Atherton X Menlo Park X Belmont X Redwood City X Burlingame X San Carlos X East Palo Alto X San Mateo X Foster City X County of San Mateo X Hillsborough X West Bay Sanitary District X



Member Dehn asked as part of the future VRS discussion for a reminder in how the decision was made when the second shift of VRS workers started, and the $11 for all wage was agreed on, and how that effected the budget.

4. Executive Director Appointment

Member Slocum noted that he was very pleased after a lengthy process to have the opportunity to make the motion to adopt the resolution authorizing the appointment of Joe La Mariana as Executive Director of the SBWMA effective August 1st. He noted that he had worked with Joe La Mariana for a long time at the County and he is the right person for the job. Member Bonilla seconded the motion. Member Weist commented on behalf of member Widmer, noting that Member Widmer is supportive of the hiring, but disappointed the salary couldn’t keep nearer the figure of $165,000 as originally posted. Member Brownrigg commented that he would be enthusiastically voting in favor of this motion, and also noted that he was grateful to Staff Gans for stepping into the role in the interim and thanked him for his service. Chair Grassilli agreed, and thanked Staff Gans as well, noted that he performed well. Roll Call Vote:11-0-0-1

Joe La Mariana thanked the Board for the vote, and acknowledged all committee members for their efforts throughout the process. He also thanked Staff Gans for his efforts as the interim, and acknowledged his predecessor Kevin McCarthy as well. He then acknowledged Recology, SBR and the SBWMA staff, and other RethinkWaste consultants and vendors. He also recognized colleagues that he has worked with over his career as well as his family. He noted that RethinkWaste is here to serve the rate payers, and added that the priorities that he’ll focus on are closing the books on the 2017 rate setting process, pulling together the Franchise Agreement extension discussions committee, allocation for agency resources, having a voice in state legislation that will impact the agency, and maximizing relationships and maintaining a strong public service mentality. Chair Grassilli added that he wanted to acknowledge Warren Slocum for chairing the search committee and the County staff for their efforts in the recruitment process.

5. Approval of Consent Calendar Consent Calendar item(s) are considered to be routine and will be enacted by one motion. There will be no separate discussion on these items unless members of the Board, staff or public request specific items be removed for separate action. Items removed from the Consent Calendar will be moved to the end of the agenda for separate discussion.

Agency Yes No Abstain Absent Agency Yes No Abstain Absent

Atherton X Menlo Park X Belmont X Redwood City X Burlingame X San Carlos X East Palo Alto X San Mateo X Foster City X County of San Mateo X Hillsborough X West Bay Sanitary Dist. X



A. Adopt the June 23, 2016 BOD Meeting Minutes B. Resolution Approving Payment to Recology for the Dual-Compartment Vehicle Collection Services Pilot

Project (Approval item) C. Resolution Approving Property Insurance Policy Renewal (Approval item) D. Resolution Approving Emergency Purchase of Transfer Station Pump (Approval Item)

Member Stone noted that he would be abstaining from item 5A. Member Bonilla made a motion to approve the consent calendar Member Dehn seconded the motion Roll Call Vote: 11-0-1-1

6. Administration and Finance A. Resolution Approving Shoreway Tip Fee Increase (Approval item)

Staff Gans gave an overview and background of the discussion that had happened at the June Board Meeting. He noted that there were two points he wanted to address. One being that if commodity values are projected to improve in the coming year should tip fees be lowered, and two, should a preference be given to Franchised tip fees over non-Franchised tip fees. He called attention to table 4 of the staff report, which estimates the collection rate impact of the $10 increase in tip fees, and noted that the estimated average rate impact on a residential customer with a 32 gallon can would be $0.93 per month. He also pointed out Table 5 Franchise variance, and noted that factoring in the compensation decrease, the residential rate impact will be about half of what was anticipated. Member Aguirre commented that she would like to see a wage increase for the VRS workers put into place, and she doesn’t want to take a rate increase to the tax payers. She asked for clarification on whether the difference between a $9 and $10 increase would be $0.93 to our rate payers per month. Staff Gans answered yes per the budget but the decrease in compensation largely offsets the rate impact. He also added that a wage increase for the workers wouldn’t have that much of an impact on the rate payer. Member Aguirre asked to find a way to have a minimal rate impact and increase the wages for the VRS workers. Member Weist noted that he had discussed this item with Member Widmer, and is would still like to see the Franchised tons being charged less than the Non Franchised tons he suggested a $6-$8 increase for Franchised tons, and $10 for non-Franchised tons.


Atherton X Menlo Park X Belmont X X (5A) Redwood City X Burlingame X San Carlos X East Palo Alto X San Mateo X Foster City X County of San Mateo X Hillsborough X West Bay Sanitary Dist. X



Staff Gans commented that this is a policy discussion. Chair Grassilli asked what the dollar figure effect would be if the Franchised tons were charged less. Staff Gans noted that he didn’t have a dollar for dollar figure in an annual amount but noted that in the staff report section titled Balancing Franchised and Non Franchised Revenues, that 22% of tons are non-Franchised tons, 78% are Franchised. So they are not proportional, and an increase of $5 per ton on non-Franchised tons, would be needed to be equivalent to $1 reduction in Franchised tons, and an additional $5 increase would dive customers away. Chair Grassilli asked how to benefit of Recology’s decreased costs would factor in. Staff Gans noted that it’s a different process. Member Benton recalled the finance committee meeting when staff noted the need for tipping fee increases to balance the budget, and noted that the tipping fee increases were going to translate to pennies per month for residents, and he thought it was important to charge a tipping fee that would allow for operating the agency at break even and he supported leaving both Franchised and Non-Franchised tip fees being at $10. Member Brownrigg commented that he endorsed Member Benton’s comments, and noted that he was struck in the report by the fact that even the $10 increase could lead to a 20% reduction in Non-Franchised customers. He asked that customer numbers be tracked as the tip fee increases are put into place. He also noted that he supported the $10 increase across the board which would increase the health of the Agency’s reserves and put the SBWMA in a position to make capital improvements, and he thought this was the prudent and appropriate approach. Member Bonilla agreed with Member Benton and Brownrigg.

Member Aguirre made a motion to approve Resolution 2016-29 Member Bonilla seconded the motion Roll Call Vote:10-1-0-1

B. Resolution Approving Review of Collection Services and Facility Operations Reports, Tonnage Data and

Customer Service Systems Audit Findings for 2015 (Approval item)

Staff Gans gave an explanation for the reason for the reports being approved in items 6B and 6C, and the value to the financial and operational audits. These audits are a third party check to verify the integrity of the data that Recology and SBR report, and that sets the foundation for the rate setting process. He added that only minor issues were found, and he thought having this item as a resolution





and needing Board approval isn’t necessary, but it is being brought to the Board because of the importance of the financial character of the information assessed. Chair Grassilli asked if they needed to approve the resolution. Counsel Savaree noted that there was a resolution on the agenda and suggested moving the resolution. Member Benton asked if SBR’s staffing vacancies in 2016 might impact their performance when the 2016 audit is completed. Dwight Herring from South Bay Recycling noted that the short answer is no performance wouldn’t be impacted. They have been able to do the work both operational and financially. Member Benton asked if SBR is running short staffed are they improving their profit. Staff Gans answered that there is a set staffing level in the contract, and it’s his job to make sure that staffing levels are met. He added that to date SBR owes the SBWMA $42,000 for staffing gaps. He also noted that he has asked SBR to get a staffing plan together so an agreement on staffing levels could be made, and for it to include where the SBWMA will get the credit for the $42,000. Noting that options include a credit on the invoice or there might be additional things asked of SBR that may cost something extra. He noted that it’s still in process and when negotiations are complete it will come back to the Board.

Member Dehn commented that in last year’s audit it was found that many of the calls were coded incorrectly and she recalled that measures would be put into place to help people at the call center code calls correctly, and she wondered if there was a discrepancy in the way the auditors audited the coding and Recology’s coding. Mario Puccinelli of Recology noted that measures have been put into place to help calls get coded correctly. He added that the nature of the calls is very objective, and used the example of a possible missed pick up call, but they can use Route Ware to determine if the truck had been to the address and the carts weren’t out. He noted that the audit helped Recology perform better this year, and that they have the most stringent call center as compared to other Recology companies. Vice Chair Bronitsky thanked Recology and SBR for their continued excellent work on the Member Agencies behalf, and asked to agendize a time to discuss doing audits less than annually. He noted that he couldn’t remember the last time he had heard a complaint about Recology’s service. Chair Grassilli noted that over the last three years the auditing process has cost $117,000 and returned $28,000, and thought there should be a tonnage reporting audit, but perhaps not customer service every year. Member Aguirre made a motion to approve Resolution 2016-29 Member Dehn seconded the motion Roll Call Vote: 11-0-0-1



C. Resolution Approving 2015 Financial and Accounting Systems Audit of Recology and SBR Findings (Approval item)

Member Slocum and Member Mueller are now absent at 2:57PM Staff Fakira gave a brief overview of the findings of the financial audit, and noted that both audits had positive results. Member Aguirre made a motion to approve Resolution 2016-29 Member Stone seconded the motion Roll Call Vote: 9-0-0-3

D. Staff Update on 2016 Contractor Compensation Adjustment Applications (Update item)

Staff Gans gave a brief overview of the staff report, pointing out that in the two tables in the staff report, there is $1.1M reduction in operation expense from Recology, which translates to less cost, and less of a rate impact, and $327,000 reduced compensation for SBR. He reiterated that the compensation decrease is largely related to lower fuel cost. He also noted that table 3 breaks down the rate setting process which is almost complete and staff will be back to the Board in September with the final compensation.

7. Collection and Recycling Program Support and Compliance

No Items 8. Shoreway Operations and Contract Management

No Items

9. Informational Items Only (no action required) A. 2016 Finance and Rate Setting Calendar B. June 2016 Check Register Detail C. Technical Consultant Contracts - 2nd Quarter 2016 D. Potential Future Board Agenda Items

10. Board Member Comments







Member Benton thanked the Board Members present for allowing all the roll call votes. Chair Grassilli thanked Member Benton and Member Brownrigg for calling in, and for the Board Members who attended, and asked to adjourn the meeting in honor of Hilary Gans for the good work he did as the Interim Executive Director. Mario Puccinelli congratulated Joe La Mariana, and congratulated the Board on their choice. He also thanked Hilary Gans on behalf of Recology, and the SBWMA staff for their work.

11. Adjourn 3:05PM


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8B - p1

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: September 22, 2016 Board of Directors Meeting Subject: Resolution Approving Annual Contract with Aaronson, Dickerson, Cohn & Lanzone for

Legal Counsel Services for FY2016-2017

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2016-32 attached hereto authorizing the Executive Director to execute a contract with Aaronson, Dickerson, Cohn & Lanzone (ADCL) to provide Legal Counsel services for FY2016-2017 with a not to exceed budget of $65,000. If approved, the contract for legal services between SBWMA and ADCL would be renewed for one additional year. Historically, contracts for legal services have been approved by the Board on a yearly basis. Background The contract with ADCL provides the attorney for the firm will:

Act as general counsel to the Board and staff of the SBWMA; Regularly attend Board and TAC meetings; Prepare and review ordinances, resolutions, contracts, notices, agendas and other documents and

papers necessary or appropriate in matters pertaining to the SBWMA; Provide legal advice, representation and assistance to the SBWMA, its Board and staff on all general

legal matters pertaining to the SBWMA, including litigation and compliance with state and local laws. The contract currently calls for Robert J. Lanzone to act as the lead attorney, with Jean B. Savaree providing backup coverage in Mr. Lanzone’s absence. ADCL proposes that for the new contract, Jean B. Savaree would serve as lead attorney and Mr. Lanzone would provide backup services in Ms. Savaree’s absence. The firm’s resume is attached for the Board’s review as Attachment A. Fiscal Impact The current hourly billing rate for ADCL is $225.00 per hour. The total ADCL billing for the last four years is as follows: 2013 $50,820 2014 $42,351 2015 $33,351.75 2016 $25,233.75 This hourly rate of $225.00 is well below the median hourly rate of $276.00 for contract public agency attorneys on the Peninsula. ADCL proposes that the hourly rate be increased to $250.00 per hour.



Within this hourly rate, ADCL will continue to provide all secretarial assistance necessary to accomplish the above-referenced tasks. Additionally, paralegal services provided by ADCL are not separately billed to SBWMA. Finally, all costs associated with the maintenance of ADCL’s office are covered by the hourly billing rate including a computer system, which has WestlawNext research capability, and a law library. If approved, a new contract will be executed with a not to exceed amount of $65,000 which is the amount included in the proposed FY2016-2017 budget. Attachments:

Resolution 2016-32 Exhibit A – DRAFT Professional Service Agreement with Aaronson Dickerson Cohn and Lanzone for FY1617 Legal Counsel Services Attachment A – ADCL Firm Resume



RESOLUTION NO. 2016-32 RESOLUTION OF THE SOUTH BAYSIDE WASTE

MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A CONTRACT WITH AARONSON, DICKERSON,

COHN & LANZONE FOR LEGAL COUNSEL SERVICES FOR FY2016-2017

WHEREAS, the South Bayside Waste Management Authority (SBWMA) Board of Directors has considered entering into a contract with Aaronson, Dickerson, Cohn & Lanzone (ADCL) for the purpose of providing the following services: Annual Legal Counsel Services for FY2016-2017

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby authorizes the Executive Director to execute a contract with ADCL, attached hereto as Exhibit A.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 22 day of September, 2016, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2016-32 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on September 22, 2016. ______________________________ ATTEST: Bob Grassilli, Chairperson of SBWMA _________________________________ Cyndi Urman, Board Secretary


Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist


____________________________________________________________________________________________________ SBWMA BOD MEETING 09/22/2016 AGENDA ITEM: 8B EXHIBIT A - p1

AGREEMENT FOR PROFESSIONAL SERVICES

This Agreement is made and entered into as of the 23rd day of September, 2016 by and between the South Bayside Waste Management Authority hereinafter “SBWMA”, and Aaronson, Dickerson, Cohn & Lanzone (ADCL) hereinafter “Consultant”.

RECITALS

This Agreement is entered into with reference to the following facts and circumstances: A. That SBWMA desires to engage Consultant to render certain professional services in the SBWMA

jurisdictions;

B. That Consultant is qualified to provide such services to the SBWMA; and

C. That SBWMA has elected to engage the services of Consultant upon the terms and conditions as hereinafter set forth.

TERMS AND CONDITIONS 1. Services

The services to be performed by Consultant under this Agreement shall be to Provide Legal Counsel Services for FY2016-2017 as outlined in Exhibit A.

Performance of the work specified above is hereby made an obligation of Consultant under this Agreement, subject to any changes that may be made subsequently hereto upon the mutual written agreement of said Parties.

2. Term of Agreement

Said services shall commence on execution and shall continue for completion of tasks within one year (12 month period). The term of the Agreement may be extended upon written agreement by both parties. Agreement can be terminated by either party with written thirty (30) day notice.

3. Compensation

Payment under this Agreement shall be as per Exhibit A, not to exceed $65,000.00 Invoices for payment shall be submitted monthly to SBWMA and shall be contain the information shown in Exhibit B hereto.

4. Authorization and Termination This Agreement becomes effective when endorsed by both Parties in the space provided below.

5. Reliance of Professional Skill of Consultant

Consultant represents that it has the necessary professional skills to perform the services required and SBWMA shall rely on such skills of the Consultant to do and perform the work.

6. Relationship to Parties

It is understood that the relationship of Consultant to SBWMA is that of an independent contractor and all persons working for or under the direction of Consultant are its agents or employees and not agents or employees of the SBWMA.

7. Nonassignment

This Agreement is not assignable either in whole or in part.


Agreement between RethinkWaste and ADCL September 16

___________________________________________________________________________________________________ SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8A EXHIBIT A -p2

8. Amendments

This Agreement may be amended or modified only by written agreement signed by both Parties.

9. Validity The invalidity, in whole or in part, of any provisions of this Agreement shall not void or affect the validity of any other provisions of this Agreement.

10. Government Law/Litigation

This Agreement shall be governed by the laws of the State of California and any suit or action initiated by either party shall be brought in the County of San Mateo, California. In the event of litigation between the Parties hereto over the terms or performance of this agreement the prevailing party shall be entitled to reasonable attorneys fees and costs..

11. Mediation

Should any dispute arise out of this Agreement, the Parties shall meet in mediation and attempt to reach a resolution with the assistance of a mutually acceptable mediator. Neither Party shall be permitted to file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution. The costs of the mediator, if any, shall be paid equally by the Parties. If a mediated settlement is reached, neither Party shall be deemed the prevailing party for purposes of the settlement, and each Party shall bear its own legal costs. Mediation shall occur within 30 days of notice by either party, and if it does not occur within that period of time a legal action shall be permitted to be filed.

12. Entire Agreement

This Agreement, including Exhibit A, comprises the entire Agreement.

13. Indemnity Consultant shall defend, indemnify and hold SBWMA and its officers, employees and agents harmless from any and all claims, damages, losses and expenses related to or as a result of intentional or negligent acts for which Consultant or its agents and employees are responsible.

14. Insurance

Consultant shall not commence work under this Agreement until all insurance required under this Paragraph has been obtained. Consultant shall furnish SBWMA with certificates of insurance evidencing the required coverage. The insurance shall be with a carrier that is licensed and in good standing in the State of California, and has an A.M. Best Co. rating of A/5 or better. The SBWMA will be named as additional insured in the policy. These certificates shall specify or be endorsed to provide that thirty (30) days notice must be given, in writing, to the SBWMA office of any pending change in the limits of liability or of any cancellation or modification of the policy.

a. Worker’s Compensation and Employer’s Liability Insurance

Consultant shall have in effect during the entire life of this Agreement Worker’s Compensation and Employer’s Liability Insurance providing full statutory coverage. In signing this Agreement, Consultant makes the following certification, required by Section 1861 of the California Labor Code:

I am aware of the provisions of Section 37900 of the California Labor Code which require every employer to be insured against liability for worker’s compensation or to undertake self-insurance in accordance with the provisions of the Code, and I will comply with such provisions before commencing the performance of the work of this Agreement.

b. Liability Insurance

Consultant shall take out and maintain during the life of this Agreement such bodily injury and property damage liability insurance as shall insure the Consultant and SBWMA, its employees, officers and member entities while performing work covered by this Agreement from any and all




claims for damages for bodily injury, including accidental death, as well as any and all claims due to consultant’s negligence or willful misconduct for property damage which may arise from Consultant’s work under this Agreement, whether such work be by Consultant or by any subcontractor or by anyone directly or indirectly employed by either of them. The amounts of such insurance shall be One Million and no/100 Dollars ($1,000,000.00) combined single limit bodily injury and property damage for each occurrence.

15. Notice All notices required by this Agreement shall be given to SBWMA and Consultant in writing, by email or by first class mail, postage prepaid, addressed as follows:

SBWMA: South Bayside Waste Management Authority Joe LaMariana Executive Director

610 Elm Street, Suite 202 San Carlos, CA 94070 Phone: (650) 802-3500 Fax: (650) 802-3501 Consultant: Aaronson, Dickerson, Cohn & Lanzone

Jean B. Savaree 1001 Laurel Street, Suite A San Carlos, CA 94070 Phone: (650) 593-3117 Fax: (650) 453-3911

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the date first written by their respective officers duly authorized in that behalf. SBWMA BY: DATED: , 2016 Joe La Mariana, Executive Director SBWMA APPROVED AS TO FORM: DATED: , 2016 Robert J. Lanzone, SBWMA ATTORNEY CONSULTANT: BY: DATED: , 2016 Jean B. Savaree, ADCL NOTICE TO PROCEED BY: DATED: , 2016 Cyndi Urman, Board Secretary




EXHIBIT A (Scope of Work/Fee Schedule)

Jean B Savaree, providing legal services through the firm of Aaronson, Dickerson, Cohn & Lanzone, shall provide the following legal services to the South Bayside Waste Management Authority:

Act as general counsel to the Board and staff of the SBWMA; Regularly attend Board and staff meetings; Prepare and review ordinances, resolutions, contracts, notices, agendas and other documents and papers

necessary or appropriate in matters pertaining to the SBWMA; Provide legal advice, representation and assistance to the SBWMA, its Board and staff on all general legal matters

pertaining to the SBWMA, including litigation and compliance with state and local laws. Work will be completed on an agreed upon hourly rate of $250 per hour.




Exhibit (Sample Invoice) Items highlighted yellow must be included on the invoice for approval format of invoice is just a sample

INVOICE

Your Company Name Address

City Sate Zip Phone Number

Date: Project Number: Invoice Number:

RethinkWaste Attn: Project Manager 610 Elm Street, Suite 202 San Carlos, CA 94070 SBWMA Project: Project Title Purchase Order Number: PO Number Invoice for Professional Services from 1/1/15 to 1/31/15

TASK 1 TITLE/Description

Professional Personnel: Hours: Rate: Amount: John Doe 1.5 $200.00 $300.00 Jane Smith 1.0 $100.00 $100.00

TOTALS: 2.0 $400.00 TOTAL THIS TASK: $400

TASK 2 TITLE/Description Professional Personnel: Hours: Rate: Amount:

John Doe 3.0 $200.00 $600.00 TOTALS: 3.0 $600.00

TOTAL THIS TASK: $600.00

TOTAL THIS INVOICE $1,000.00 BILLING LIMITS:

Total Contract Amount $10,000.00Prior Invoices 0% $0.00Current Contract Balance 100% $10,000.00

This Invoice 10% $1,000.00

Contract Balance 90% $9,000.00


AARONSON, DICKERSON, COHN & LANZONE 1001 Laurel Street, Suite A

San Carlos, CA 94070 Telephone: (650) 593-3117 Facsimile: (650) 453-3911

www.adcl.com

Municipal Law, Real Estate, Business Law, Estate Planning including Probate, Conservatorships and Elder Abuse, Credit Union Law, Employment Law including Anti-Harassment, Discrimination, Retaliation and Violence Prevention Training, Investigation and Litigation, Landlord-Tenant. Trial and Appellate Practice.

All Attorneys are Members of the San Mateo County Bar and the State Bar of California.

ROBERT J. LANZONE (650) 593-3117, Ext. 204

[email protected] Admitted to the California State Bar, 1970 Educational Background: University of Santa Clara (J.D. 1969); New York University, Carnegie Fellowship, Public Administration (1965); Queens College of the City University of New York (B.A. 1964). Member: California State Bar Association; San Mateo County Bar Association - William R. Nagle Jr. Award (2006), Municipal Law Section Chair (1985-2005), Board Member (1977-1984), President (1983); Legal Aid Board (1980-1982). Reported Cases: Teamsters Local 856, et al. v. Priceless, LLC, et al. (2003) 112 Cal.App.4th 1500; Woodside v. Gava (1989) 213 Cal.App.3d 488. Present Work: Municipal Law, Real Estate, Business and Estate Planning. Deputy City Attorney, City of San Carlos; Deputy City Attorney, City of Foster City; Deputy Town Attorney, Town of Woodside; Attorney, South Bayside Waste Management Authority; Attorney, Saddle Creek Community Service District. Prior Legal Experience: Interim City Attorney, City of San Bruno (2010-2011); Deputy District Attorney, Menlo Park Fire Protection District (2008-2010); City Attorney, City of San Carlos (1988-2008); Attorney, Provident Credit Union (1977-2005); Town Attorney, Town of Woodside (1985-2004); City Attorney, City of Half Moon Bay (1983-1996); City Attorney, City of Pacifica (1977-1983). Community Affairs: San Carlos Rotary Club (2006-present); Provident Credit Union Board Member (2005-present); William Saroyan Foundation (1985-1990); Archdiocese of San Francisco, Board of Education (1985-1987); Judge Pro Tem, San Mateo County Superior Court (1983-1990); St. Charles School Board (1983-1985); San Carlos Educational Foundation, founder and member (1982-1984); San Carlos Chamber of Commerce, President (1980), Board Member (1977-1981); Kiwanis, member (1971-1977); Belmont Jaycees, Member (1970-1975), President (1972).

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 8B ATTACHMENT A - p1


JEAN B. SAVAREE (650) 593-3117, Ext. 214 [email protected] Admitted to the California State Bar, 1981 Educational Background: University of San Francisco (J.D. with Honors, 1981) - Member: McAuliffe Honor Society, Moot Court Board, Program Director, Moot Court Honors Board (1980-1981); Michigan State University (B.S. 1976). Member: California State Bar Association; San Mateo County Representative at State Bar Conference of Delegates (1992-1994), Co-Chair (1995), Chair (1996); San Mateo County Bar Association - Personnel Committee (1998-2001), Membership Committee (1997-2008), Co-Chair (2003-2004), Fee Arbitration Panel (1996-present), Women Lawyers Section - Educational Foundation Board of Directors, (1995-1998), Continuing Education Committee (1995-1997), Director (1992-1994), Municipal Law Section (1990-present), Chair (2005-present), Employment Law Section (1990-present); California Trial Lawyers Board of Directors, San Mateo County (1995-2000); California Women Lawyers Executive Committee, San Mateo County (1995-1998). Reported Cases: Teamsters Local 856, et al. v. Priceless, LLC et al. (2003) 112 Cal.App.4th 1500; Woodside v. Gava (1989) 213 Cal.App.3d 488. Present Work: Municipal Law and Employment Law (including litigation, training, investigations and consulting for public and private employers on Harassment, Discrimination, Retaliation, Violence Prevention, Personnel Policies and Procedures, Disciplinary Issues and Employment Contracts). Town Attorney, Town of Woodside; City Attorney, City of Foster City; Attorney, Coastside Fire Protection District; Attorney, Central County Fire Department; Attorney, Southern San Mateo County Police Consortium; Deputy City Attorney, City of San Carlos. Prior Legal Experience: District Counsel, San Mateo County Harbor District (2011-2014); Deputy District Counsel, San Mateo County Harbor District (1989-2011); Department Attorney, Belmont-San Carlos Fire Department (1988-2011); Deputy City Attorney, City of Belmont (2004-2011); District Attorney, Menlo Park Fire Protection District (2008-2010); Deputy Town Attorney, Town of Woodside (1985-2005); City Attorney, City of Belmont (1994-2004); Deputy City Attorney, City of Foster City (1985-1997); Deputy City Attorney, City of Half Moon Bay (1985-1996). Community Affairs: Rebuilding Together Volunteer (2008-present); California League of Cities - Community Services Policy Committee and Legislation Committee (2004-2006); Legal Aid Society of San Mateo County, Board of Directors (1996-2006), President (2001-2003), Treasurer (1999-2000); Legal Advocacy Committee Peninsula Representative (1997-1999).

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GREGORY J. RUBENS (650) 593-3117, Ext. 202 [email protected] Admitted to the California State Bar, 1987 Educational Background: McGeorge School of Law, University of the Pacific (J.D. 1987); University of California at Santa Barbara (B.A. 1983). Member: California State Bar Association; San Mateo County Bar Association - Bench & Bar Committee (2006), Business and Business Litigation Section, Chair (2005-2008), Conservatorship Independent Counsel Panel (2005-present), Probate, Trust and Conservatorship Mediator Panel (2009-present); Alternative Dispute Resolution Section (1995-present), Estate Planning and Elder Law Section (1995-present), Real Estate Section (1995-present); Present Work: Municipal Law, Estate Planning, Probate, Conservatorships (including Court Appointed Independent Counsel for Conservatees), Real Estate and Corporate Law (including small businesses and LLCs). Court Appointed Real Estate Partition Referee; Mediator for San Mateo County Superior Court Probate ADR Program (2009-present); Arbitrator, San Mateo County Superior Court; City Attorney, City of San Carlos; Legal Counsel, San Mateo County Telecommunications Authority (SAMCAT); Legal Counsel, Provident Credit Union; Attorney Peninsula Television, Inc.; Attorney, San Carlos Elms; Attorney, Redwood City-San Mateo County Chamber of Commerce; Deputy Town Attorney, Town of Woodside; Deputy City Attorney, City of Foster City; Deputy Attorney, Coastside Fire Protection District. Prior Legal Experience: Deputy District Counsel, San Mateo County Harbor District (1989-2014); Deputy Attorney, Belmont-San Carlos Fire Department (1988-2011); Deputy City Attorney, City of Belmont (1994-2011); Interim City Attorney, City of San Bruno (2010-2011); Deputy District Attorney, Menlo Park Fire Protection District (2008-2010); Deputy City Attorney, City of Half Moon Bay (1994-1996). Community Affairs: San Carlos Chamber of Commerce - President (2008 & 1999-2000), Board of Directors (1995-2007); Kiwanis International, San Carlos Kiwanis Club (1989-present), Director (1992-2008), President (1994-1996 & 1998-1999), Lt. Governor Div. 34 (2005-2006); Sequoia Union High School District Measure G and H Bond Advisory Committee (2002-2009); San Carlos Educational Foundation, Board of Directors (1998-2000).

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CAMAS J. STEINMETZ (650) 593-3117, Ext. 225

[email protected]

Admitted to the California State Bar, 2002 Educational Background: University of California, Davis School of Law (J.D. 2002); University of California, Hastings (Visiting Student 2002); University of California, Santa Cruz, (B.A 1994); University of Bergen, Norway, (Exchange Student 1992). Certificates: Leadership in Energy and Environmental Design Accredited Professional (LEED AP), U.S. Green Building Council. Member: California State Bar Association (2002-present); San Mateo County Bar Association (2012-present); Urban Land Institute (2007- present). Reported Cases: Lin v. City of Pleasanton (2009) 175 Cal.App.4th 1143. Present Work: Land Use, Real Estate and Municipal Law (including California Environmental Quality Act (CEQA), Planning & Zoning Law, Williamson Act, California Coastal Act, Subdivision Map Act, Initiative and Referendum Law, Brown Act, and Public Records Act). Deputy Town Attorney, Town of Woodside; Deputy City Attorney, City of San Carlos; Deputy City Attorney, City of Foster City. Honors and Awards: Northern California “Rising Star”, Super Lawyers Magazine (2010); Public Law Grant Recipient, King Hall Legal Foundation (Summer 1999); California Bar Association Environmental Law Section Scholarship Recipient (Fall, 2000). Prior Legal Experience: Associate Attorney, Manatt Phelps & Phillips, LLC (2007-2012); Associate Attorney, Bingham McCutchen, LLP (2006-2007); Associate Attorney, Jorgenson Siegel, McClure & Flegel, LLP (2002-2006) (serving as assistant to Town Attorney, Town of Portola Valley, City Attorney, City of Menlo Park, and Interim City Attorney, City of Morgan Hill); Contract Attorney, Peninsula Open Space Trust (POST) (2002-2004); Judicial Extern, Honorable Lawrence K. Karlton, United States District Court Judge, Eastern District (Spring, 2002); Legal Intern, United States Department of Justice, Environmental Enforcement Section (Summer, 1999). Related Experience: Santa Clara County Legislative Advocate, Committee for Green Foothills (1995-1998); Legislative Assistant, Global Action & Information Network (1993-1995); Intern, San Mateo County Planning Department (Fall, 1994). Community Affairs: UrbanPlan Volunteer (2009-present); Vice-President, California League of Conservation Voters, Santa Clara County Chapter (1995-1998); Moderator, Host & Producer, Common Ground TV (1996-1998); Guest Lecturer, Stanford University & DeAnza College Environmental Studies classes (1995-1998), Teachers Assistant, Environmental Ethics, University of California at Santa Cruz (Spring, 1994).

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KAI RUESS (650) 593-3117, Ext. 215

[email protected]

Admitted to the California State Bar, 2011 Educational Background: University of California, Hastings College of the Law (J.D. 2011); University of California, Davis (B.A. 2007, Phi Beta Kappa). Member: California State Bar Association; San Mateo Bar Association – Barristers and Municipal Law Sections. Present Work: Municipal Law and General Civil Litigation. Deputy Town Attorney, Town of Woodside; Deputy City Attorney, City of San Carlos; Deputy City Attorney, City of Foster City; Deputy Attorney, Coastside Fire Protection District; Deputy Counsel, Central County Fire Protection District. Adjunct Professor, University of California, Hastings College of the Law – Legal Research and Writing. Prior Legal Experience: Deputy District Counsel, San Mateo County Harbor District (2011-2014); Production Editor - Hastings Science and Technology Journal (2010-2011); Coach - Moot Court Teams, Wager Employment Law Competition (2011), Cardozo/BMI Entertainment and Communications Law Competitions (2010); Intern - City of Burlingame City Attorney’s Office (2010); Intern - City of San Mateo City Attorney’s Office (2009); Controller - UC Davis Associated Students (2006-2007); Student Services and Fees Administrative Advisory Committee - UC Davis (2006-2007). Community Affairs: Judge - Hastings Moot Court Program (2011-present); Finance Committee - Cal Aggie Alumni Association (2011-present); San Carlos Chamber of Commerce - Board Member (2014-present).

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KIMBERLY L. CHU (650) 593-3117, Ext. 207

[email protected]

Admitted to the California State Bar, 2012 Educational Background: University of California, Hastings College of the Law (J.D. 2012); Stanford University (M.A. 2008); Stanford University (B.A. 2007, alpha Kappa Delta Phi). Member: California State Bar Association; San Mateo Bar Association – Women Lawyers Section Educational Foundation, Barristers, Estate Planning Law Section and Municipal Law Sections. Present Work: Municipal Law; General Civil Litigation; Estate Planning; Probate; Conservatorships; Real Estate; and Corporate Law (including small businesses and LLCs). Deputy City Attorney, City of San Carlos; Deputy City Attorney, City of Foster City; Deputy Attorney, Coastside Fire Protection District. Prior Legal Experience: Attorney, Webb Legal Group (2012- 2013); Trial Team Litigation Extern, San Francisco City Attorney’s Office (December 2011-April 2012); Certified Law Clerk, Rencher Law Group, P.C. (2010-2011); Teaching Assistant, University of California, Hastings College of the Law Legal Writing and Research Department (2011-2012); CALI/WITKIN Awards for Negotiations & Settlement, and Mediation. Community Affairs: Arbor Bay School Board – Boardmember (2014-present).

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JOAN A. BORGER (650) 593-3117, Ext. 208

[email protected]

Admitted to the California State Bar, 1983 Educational Background: University of California, Hastings College of the Law (J.D. 1983); Ohio State University (B.A 1979). Present Work: General Municipal Law, including California Environmental Quality Act (CEQA), Land Use, Public Works, Public Contracting, Brown Act, Public Records Act, Political Reform Act. Prior Legal Experience: City Attorney, City of Sunnyvale (2012-2015); Assistant City Attorney, City of Fremont (2006-2012); Interim City Attorney, City of Sunnyvale (2004-2005); Assistant/Senior Assistant City Attorney, City of Sunnyvale (2000-2006); Assistant City Attorney, City of Hayward (1993-2000); General Counsel, South San Francisco Conference Center Authority (1994-1996); Senior Research Attorney, California Court of Appeal, Sixth District (1990-1993); Assistant County Counsel, County of Ventura (1989-1990); Deputy County Counsel, Office of the County Counsel County of Riverside (1985-1987); Judicial Clerkship, California Court of Appeal, District 4 (1983-1985).

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SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8C – p1

STAFF REPORT To: SBWMA Board Members From: Farouk Fakira, Finance Manager Date: September 22, 2016 Board of Directors Meeting Subject: Approval of Quarterly Investment Report for the Quarter Ended June 30, 2016

Recommendation It is recommended that the SBWMA Board review and accept the Quarterly Investment Report.

Analysis The primary objective of the Investment Policy for the SBWMA is safety of principal, while meeting the cash flow needs of the Authority, through prudent investment of unexpended cash. As of June 30, 2016, the investment portfolio was in compliance with the Investment Policy. The portfolio contains sufficient liquidity to meet the next six months of expected expenditures by the Authority as well as by other third parties.

Fiscal Impact The attached Investment Portfolio Summary indicates that as of June 30, 2016, funds in the amount of $22,086,038 were invested, producing a weighted average yield of 0.48%.

Below is a summary of the changes from the last quarter.

Qtr Ended6/30/16

Qtr Ended3/31/16

Increase(Decrease)

Total Portfolio 22,086,038$ 20,633,368$ 1,452,670$ Weighted Avgerage Yield 0.48% 0.44% 0.04%Interest Earnings 23,006$ 22,840$ 166$

The total portfolio balance increased by $1,452,670. The increase is primarily due to transfers of excess operating cash into the investment portfolio and the required monthly debt service transfers into the bond account from operating funds. The higher portfolio balance combining with a slightly higher weighted average yield resulted in higher interest earnings. A table comparison of the portfolio components is provided below:

6/30/2016Balance

% ofTotal

3/31/2016Balance

% ofTotal

Change over Prior Quarter

SM County Pool 5,762,103$ 26% 5,750,398$ 28% 11,705$ LAIF 10,003,104 45% 9,593,633 46% 409,471 Bond Account 6,320,831 29% 5,289,337 26% 1,031,494 Total Portfolio 22,086,038$ 100% 20,633,368$ 100% 1,452,670$

Note: There may be minor differences in totals as individual amounts are rounded to the nearest dollar

Due to arbitrage restrictions, bond investments are not included in our LAIF rate or investment pool comparison. As of June 30, 2016, the bond reserve and payment accounts of approximately $6.3 million were invested with the trustee in short-term investments.



As of June 30, 2016, investments in the County Investment Pool totaled 37% of SBWMA’s funds available for investment pools (see Attachment 1). The percentage is within the range specified by the SBWMA Board. The average yield of the portfolio in the quarter excluding the bond proceeds was 0.67%. LAIF is used as a benchmark and the average LAIF yield for the quarter ending June 30, 2016, was 0.55%. The San Mateo County Pool average yield for the quarter was 0.89%. The Investment Advisory Committee, consisting of Jeff Maltbie, City Manager of San Carlos; Michael Galvin, City Treasurer for San Carlos; and Rebecca Mendenhall, Administrative Services Director of San Carlos, have reviewed this report before presentation to the Board. Attachments

A – Summary of All Investments for Quarter Ending June 30, 2016 B – Investment Portfolio 6/30/2016 - Chart C – Historical Summary of Investment Portfolio


Attachment 1

Category

Weighted

Average

Interest Rate

Historical

Book Value

% of

Portolio

GASB 31 ADJ

Market Value*

Interest

Earned

Liquid Investments:

San Mateo County Investment Pool (COPOOL) 0.89% 5,762,103$ 37% 5,779,735 12,771

Local Agency Investment Fund (LAIF) 0.55% 10,003,104 63% 10,009,318 10,235

Total - Investments 0.67% 15,765,207 100.00% 15,789,053 23,006

Bond Accounts - Cash with Fiscal Agents

BNY Western Trust - Certificates of Deposit^ 0.00% - - -

2009A Reserve Fund Account

BNY Western Trust - Dreyfus Cash Mgmt 670 Inv 0.00% 4,130,108 4,130,108 -

2009A Reserve Fund Account

BNY Western Trust - Dreyfus Cash Mgmt 670 Inv 0.00% 2,190,724 2,190,724 -

2009A Payment Fund Account

Total - Bond Accounts 0.00% 6,320,831 6,320,831 -

GRAND TOTAL OF PORTFOLIO 0.48% 22,086,038 22,109,884 23,006

Total Interest Earned This Quarter 23,006

Total Interest Earned Fiscal Year-to-Date 85,446

^ - The last Certificate of Deposit matured on 3/24/2016. There was no interest earned during the quarter.

Note: SBWMA Board approved the following investment mix at its January 22, 2015 meeting:

LAIF - 50% to 70%

COPOOL - 30% to 50%

*Difference in value between Historical Value and Market Value may be due to timing of purchase. Investments in the investment pools may have been purchased

when interest rates were lower or higher than the end date of this report. As interest rates increase or decrease, the value of the investment pools will decrease or

increase accordingly. However, interest rate fluctuations does not have any impact to SBWMA's balance in the investment pools. The market values are presented

as a reference only.

SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY

SUMMARY OF ALL INVESTMENTS

For Quarter Ending June 30, 2016

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_____________________________________ ________________________________________________________ AGENDA ITEM: 8C ATTACHMENT A - p1


Attachment 2

San Mateo County Pool

26%

LAIF

45%

Bond Accounts

29%

South Bayside Waste Management Authority Investment

Portfolio

6/30/2016

San Mateo County Pool

LAIF

Bond Accounts

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_____________________________________ ________________________________________________________ AGENDA ITEM: 8C ATTACHMENT B - p1


Attachment 3

South Bayside Waste Management Authority Portfolio

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

SM County Pool 2,289,604 2,293,037 2,596,754 5,700,859 5,719,002 5,728,746 5,739,190 5,750,398 5,762,103

LAIF 12,591,585 13,448,147 12,456,035 10,864,026 7,971,342 10,878,169 8,385,354 9,593,633 10,003,104

Bond Accounts 6,257,859 4,628,312 5,659,274 5,264,849 6,296,018 4,631,288 5,662,254 5,289,337 6,320,831 Grand Total 21,139,048$ 20,369,496$ 20,712,063$ 21,829,734$ 19,986,362$ 21,238,203$ 19,786,798$ 20,633,368$ 22,086,038$

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


South Bayside Waste Management Authority Historical

Summary of Investment Portfolio

#REF!

LAIF

SM County Pool

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


South Bayside Waste Management Authority Historical

Summary of Investment Portfolio

Bond Accounts

LAIF

SM County Pool

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_____________________________________ ________________________________________________________ AGENDA ITEM: 8C ATTACHMENT C - p1


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8D – p1

STAFF REPORT To: SBWMA Board Members From: Farouk Fakira, Finance Manager Date: September 22, 2016 Board of Directors Meeting Subject: Resolution Authorizing Update to 401(a) Retirement Plan Trustees

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2016-33 attached hereto authorizing the following action:

Appointing Joseph La Mariana and Farouk Fakira as Trustees of the 401(a) Plan.

Analysis Upon the resignation of Kevin McCarthy, one of the two Trustee’s for the 401(a) Plan, it became incumbent to appoint a new Trustee for the 401(a) Plan. Joseph La Mariana is the new Executive Director and he will execute all the functions that Kevin did. Duties of The Trustee: Under section 10.02 of Article 10 Trust Fund, In general. The Trustee is not a party to, and has no duties or responsibilities under the plan other than those that may be expressly contained in this Article. The Trustee shall have no duties, responsibilities or liability with respect to the acts or omissions of any prior trustee. The Trustee shall discharge its assigned duties and responsibilities under this Article and the Plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Fiscal Impact There is no fiscal impact associated with the retirement plan Trustee change.

Attachments: Resolution No. 2016-33


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8D – p2

RESOLUTION NO. 2016-33

RESOLUTION OF THE SOUTH BAYSIDE WASTE

MANAGEMENT AUTHORITY (SBWMA) BOARD OF DIRECTORS APPOINTING TRUSTEES FOR THE SBWMA 401(a) PLAN

WHEREAS, on September 25, 2008, the SBWMA Board of Directors adopted a 401(a) Plan by Resolution No. 2008-08 (the “401(a) Plan”); and WHEREAS, Kevin McCarthy has resigned and the Board wishes to appoint a new Trustee for the 401(a) Plan. NOW, THEREFORE, BE IT RESOLVED that the SBWMA Board of Directors hereby appoints Joseph La Mariana and Farouk Fakira as Trustees of the 401(a) Plan and that the Trustees for the 401(a) Plan hereby are, authorized and directed to take any and all actions and execute and deliver such documents as they may deem necessary, appropriate or convenient to effect the foregoing resolutions including, without limitation, causing to be prepared and filed such reports documents or other information as may be required under applicable law. PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 22nd day of September, 2016, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2016-33 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on September 22, 2016. ________________________________ ATTEST: Bob Grassilli, Chairperson of SBWMA _________________________________ Cyndi Urman, Board Secretary

Agency Yes No Abstain Absent Agency Yes No Abstain Absent Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay San. District


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 8E - p1

STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: September 22, 2016 Board of Directors Meeting Subject: Resolution Authorizing the Executive Director to execute a letter in support of Proposition

67 The California Plastic Bag Ban Veto Referendum

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2016-34 attached hereto authorizing the Executive Director to execute a letter in position of “support” on Proposition 67 to uphold Senate Bill 270, the Plastic Bag Ban, and further recommends that the Board instruct staff to send a press advisory to local papers indicating this support position.

Summary Typically the Agency does not take positions on Ballot measures. Proposition 67, the Plastic Bag Ban Referendum, however, is so closely aligned with the Agency’s mission statement and strategic goals, that staff is recommending that the Board adopt a support position. Discussion In 2014, Governor Jerry Brown signed a statewide bag law, Senate Bill (SB) 270, which prohibits stores that sell packaged food and liquor from providing single use plastic carry-out bags. It requires these stores to charge customers 10 cents for any carry out bag it provides at checkout. The state law closely models San Mateo County Ordinance number 04637 that went into effect in April 2013, and has been implemented by all San Mateo County jurisdictions as of October 2013. A referendum to overturn SB 270 has qualified for the ballot and the fate of the law will be determined by the results at the upcoming General Election. Proposition 67 is the referendum on SB 270. A “yes” vote on Prop 67 upholds SB 270 and implements the statewide bag ban. SB 270 will only apply to cities and counties that do not already have their own single use carryout bag law as of September, 2014. The importance of keeping plastic bags out of our streets, waterways and landfills has been recognized by many local governments and as of June 2016, there were single use carryout bag laws in approximately 150 cities and counties, covering about 40 percent of California’s population. This law will help to reduce the estimated 15 billion single-use plastic carryout bags provided to customers in California and save our state and local communities tens of millions of dollars in litter clean-up costs. The referendum has received a position of support from the cities of Berkeley, Pasadena, Santa Cruz, Contra Costa and Marin Counties, as well as a many organizations dedicated to improving water quality and reducing waste. Attachment A provides the text of the Ballot Measure.



Attachments: Resolution 2016-34

Attachment A – Proposition 67 Ban on Single Use Plastic Bags Referendum



RESOLUTION NO. 2016- 34 RESOLUTION OF THE SOUTH BAYSIDE WASTE

MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A LETTER

SUPPORTING PROPOSITION 67 – THE PLASTIC BAG BAN VETO REFERENDUM

WHEREAS, the Authority is a joint powers agency organized under the Joint Exercise of Powers Act by cities and other local government agencies in San Mateo County (the “Member Agencies”), each of which oversees the collection of solid waste, organic materials and recyclable materials within its jurisdiction; and

WHEREAS, the SBWMA’s adopted mission is to cost effectively design, implement and manage

innovative waste reduction and recycling programs and facility infrastructure that fulfills our fiduciary responsibilities to our Member Agencies while achieving community environmental and economic goals; and

WHEREAS, support for Proposition 67 closely aligns with the SBWMA’s mission and goals; and WHEREAS, San Mateo County adopted a plastic bag ban in 2013

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby Supports Proposition 67, and Authorizes the Executive Director to execute a letter in support of the proposition, and notify local media of this support position.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 22nd day of September, 2016, by the following vote:





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_____________________________________ ________________________________________________________ AGENDA ITEM: 8E ATTACHMENT A - p1


PROPOSITION

67 BAN ON SINGLE-USE PLASTIC BAGS. REFERENDUM.

OFFICIAL TITLE AND SUMMARY

A "Yes" vote approves, and a "No" vote rejects, a statute that:

• Prohibits grocery and certain other retail stores from providing single-use plastic or paper carryout bags to customers at point of sale.

• Permits sale of recycled paper bags and reusable bags to customers, at a minimum price of 10 cents per bag.

ANALYSIS BY THE LEGISLATIVE ANALYST

BACKGROUND Carryout Bag Usage. Stores typically provide their customers with bags to carry out the items they buy. One type of bag commonly provided is the "singleuse plastic carryout bag," which refers to a thin plastic bag used at checkout that is not intended for

· continued reuse. In contrast, "reusable plastic bags" are thicker and sturdier so that they can be reused many times. Many stores also provide single-use paper bags. Stores frequently provide single-use paper and plastic carryout bags to customers for free, and some stores offer reusable bags for sale. Each year, roughly 15 billion single-use plastic carryout bags are provided to customers in California (an average of about 400 bags per Californian).

Many Local Governments Restrict Single-Use Carryout Bags. Many cities and counties in California have adopted local laws in recent years restricting or banning single-use carryout bags. These local laws have been implemented due to concerns about how the use of such bags can impact the environment. For example, plastic bags contribute to litter and can end up in waterways. In addition, plastic bags can be difficult to recycle because they can get tangled in recycling machines. Most of these local laws ban single-use plastic carryout bags at grocery stores, convenience stores, pharmacies, and liquor stores. They also usually require the store to charge at least 10 cents for the sale of any carryout bag. Stores are allowed to keep the resulting revenue. As of June 2016, there were local carryout bag laws in about 150 cities and counties-covering about 40 percent of California's population-mostly in areas within coastal counties.

Passage of Statewide Carryout Bag Law. In 2014, the Legislature passed and the Governor signed a statewide carryout bag law, Senate Bill (SB) 270. As described in more detail below, the law prohibits certain stores from providing single-use plastic carryout bags. It also requires these stores to charge

110 I Title and Summary I Analysis

PREPARED 8Y THE ATTORNEY GENERAL

SUMMARY OF LEGISLATIVE ANALYST'S ESTIMATE OF NET STATE AND LOCAL GOVERNMENT FISCAL IMPACT: • Relatively small fiscal effects on state and local

governments. Minor increase of less than a million dollars annually for state administrative costs, offset by fees. Possible minor savings to local governments from reduced litter and waste management costs.

customers for any other carryout bag provided at checkout.

PROPOSAL Under the State Constitution, a new state law can be placed before voters as a referendum to determine whether the law can go into effect. This proposition is a referendum on SB 270. Below, we describe what a "yes'' and "no" vote would mean for this measure, its major provisions, and how this measure could be affected by another proposition on this ballot.

What a "Yes" and "No" Vote Mean "Yes" Vote Upholds SB 270. Certain stores would be prohibited from providing single-use plastic carryout bags and generally required to charge at least 10 cents for other carryout bags. These requirements would apply only to cities and counties that did not already have their own single-use carryout bag laws as of the fall of 2014.

"No" Vote Rejects SB 270. A store could continue to provide single-use plastic carryout bags and other bags free of charge unless it is covered by a local law that restricts the use of such bags.

Main Provisions of Measure Prohibits Single-Use Plastic Ca"yout Bags. This measure prohibits most grocery stores, convenience stores, large pharmacies, and liquor stores in the state from providing single-use plastic carryout bags. This provision does not apply to plastic bags used for certain purposes-such as bags for unwrapped produce.

Creates New Standards for Reusable Plastic Carryout Bags. This measure also creates new standards for the material content and durability of reusable plastic carryout bags. The California Department of Resources Recovery and Recycling (CaiRecycle) would be responsible for ensuring that bag manufacturers

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ANALYSIS BY THE LEGISLATIVE ANALYST

meet these requirements. The measure also defines standards for other types of carryout bags.

Requires Charge for Other Carryout Bags. This measure generally requires a store to charge at least 10 cents for any carryout bag that it provides to consumers at checkout. This charge would not apply to bags used for certain purposes-such as bags used for prescription medicines. In addition, certain lowincome customers would not have to pay this charge. Under the measure, stores would retain the revenue from the sale of the bags. They could use the proceeds to cover the costs of providing carryout bags, complying with the measure, and educational efforts to encourage the use of reusable bags.

Another Proposition on This Ballot Could Affect Implementation of This Measure This ballot includes another measure-Proposition 65-that could direct revenue from carryout bag sales to the state if approved by voters. Specifically, Proposition 65 requires that revenue collected from a state law to ban certain bags and charge fees for other bags (like SB 270 does) would have to be sent to a new state fund to support various environmental programs.

If both measures pass,

Figure 1

BAN ON SINGLE-USE PLASTIC BAGS. PROPOSITION

REFERENDUM. 67

CONTINUED

both measures pass and Proposition 65 gets more "yes" votes. However, this analysis assumes that the other provisions of SB 270 not related to the use of revenues-such as the requirement to ban single-use plastic carryout bags and charge for other bagswould still be implemented.

FISCAL EFFECTS Minor State and Local Fiscal Effects. This measure would have relatively small fiscal effects on state and local governments. Specifically, the measure would result in a minor increase of less than a million dollars annually in state costs for CaiRecycle to ensure that bag manufacturers meet the new reusable plastic bags requirements. These costs would be offset by fees charged to makers of these bags. The measure could also result in other fiscal effects-such as minor savings to local governments from reduced litter cleanup and waste management costs.

Vis it http://www. sos. ca.gov/measure-contributions for a list of committees primarily formed to support or oppose this measure. Visit http://www.fppc.ca.govl transparencyhop-contributors/nov-16-gen-v2.html

to access the committee's top 10 contributors.

the use of the revenues from carryout bag sales would depend on which measure receives more votes. Figure 1 shows how the major provisions

Implementation of Referendum Would

of SB 270 would be implemented differently depending on different voter decisions on the two measures. Specifically, if Proposition 67 {this referendum on SB 270) gets more "yes" votes, the revenue would be kept by stores for specified purposes. However, if Proposition 65 (initiative) gets more "yes" votes, the revenue would be used for environmental programs. We note that Proposition 65 includes a provision that could be interpreted by the courts as preventing SB 270 from going into effect at all should

Be Affected by Outcome of Proposition 65

Proposition 65 (Initiative)

Passes

Proposition 65 (Initiative)

Fails

Proposition 67 ISB 270 Referendum)

Passes

Statewide carryout bag law in effect. Use of revenues from sale of carryout bags depends on which proposition gets more votes:

• If more "yes" votes for referendum, revenue is kept by stores.

• If more "yes" votes for initiative, revenue goes to state for environmental programs.'

Statewide canyout bag law in effect and revenue from the sale of carryout bags is kept by stores.

Proposition 67 ISB 270 Referendum)

Fails

No statewide canyout bag law. Revenue from any future statewide law similar to SB 270 would be used for environmental programs.

No statewide carryout bag law.

• Alternatively, a provision of Proposition 65 could be interpreted by the courts as preventing Senate Bill (SBJ 270 from going into effect at all.

For the full text of Proposition 67, see page 218. Title and Summary I Analysis I 111

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PROPOSITION

67 BAN ON SINGLE-USE PLASTIC BAGS. REFERENDUM.

* ARGUMENT IN FAVOR OF PROPOSITION 67 * YES on 67 to REDUCE LITTER, PROTECT OUR OCEAN and WILDLIFE, and REDUCE CLEAN-UP COSTS. Single-use plastic shopping bags create some of the most visible litter that blows into our parks, trees and neighborhoods, and washes into our rivers, lakes and ocean. A YES vote will help keep discarded plastic bags out of our mountains, valleys, beaches and communities, and keep them beautiful. The law also will save our state and local communities tens of millions of dollars in litter clean-up costs. PLASTIC BAGS ARE A DEADLY THREAT TO WILDLIFE. "Plastic bags harm wildlife every day. Sea turtles, sea otters, seals, fish and birds are tangled by plastic bags; some mistake bags for food, fill their stomachs with plastics and die of starvation. YES on 67 is a common-sense solution to reduce plastic in our ocean, lakes and streams, and protect wildlife."-Julie Packard, Executive Director, Monterey Bay Aquarium YES on 67 CONTINUES CALIFORNIA'S SUCCESS IN PHASING OUT PLASTIC BAGS. A YES vote will keep in place a law passed by the Legislature and signed by the Governor that will stop the distribution of wasteful single-use plastic shopping bags. This law has strong support from organizations that are committed to protecting the ocean, wildlife, consumers, and small businesses.

It will be fully implemented statewide once voters approve Prop. 67. Many local communities are already phasing out plastic bags. In fact, nearly 150 local cities and counties have banned single-use plastic bags. These laws have already been a success; some communities have seen a nearly 90 percent reduction in single-use bags, as well as strong support from consumers. OUT-OF-STATE PLASTIC BAG COMPANIES ARE OPPOSING CALIFORNIA'S PROGRESS. Opposition to this law is funded by four large outof-state plastic bag companies. They don't want California to take leadership on plastic bag waste, and are trying to defeat this measure to protect their profits. Don't believe their false claims. We should give California's plastic bag law a chance to work, especially with so much success already at the local level. YES on 67 to PROTECT CALIFORNIA'S PLASTIC BAG LITTER REDUCTION LAW.

JULIE PACKARD, Executive Director Monterey Bay Aquarium JOHN LAIRD, Chairperson California Ocean Protection Council SCOTT SMITHLINE, Director California Department of Resources Recycl ing and Recovery

* REBUTTAL TO ARGUMENT IN FAVOR OF PROPOSITION 67 * WE ALL WANT TO PROTECT THE ENVIRONMENT, BUT PROP. 67 IS A FRAUD. It is a $300 million per year HIDDEN BAG TAX on California consumers who will be forced to pay a minimum 10 cents for every paper and thick plastic grocery bag they are given at checkout. AND NOT ONE PENNY WILL GO TO THE ENVIRONMENT. ; Instead, the Legislature gave all $300 million in new bag tax revenue to grocers as extra profit. THAT'S $300 MILLION EVERY YEAR! STOP THE SPECIAL INTEREST SWEETHEART DEAL. In a sweetheart deal brokered by special interest lobbyists, Proposition 67 will grow profits for grocery stores by up to $300 million a year. Big grocery store chains get to keep ALL of the new tax revenue. Grocers will grow $300 million richer every year on the backs of consumers.

DON'T BE FOOLED: NOT ONE PENNY OF THE BAG BAN TAX GOES TO THE ENVIRONMENT. The Legislature could have dedicated the new tax revenue to protect the environment, but their goal wasn't to protect the environment ... IT WAS ABOUT GROWING PROFITS FOR GROCERY STORES AND LABOR UNIONS. The measure SPECIFICALLY REQUIRES GROCERS TO KEEP ALL OF THE NEW TAX AS PROFIT! STOP THE SWEETHEART DEAL AND HIDDEN BAG TAX. VOTE NO ON PROP. 67.

DOROTHY ROTHROCK, President California Manufacturers & Technology Association THOMAS HUDSON, Executive Director California Taxpayer Protection Committee DEBORAH HOWARD, Executive Director California Senior Advocates League

112 I Arguments Arguments printed on this page are the opinions of the authors, and have not been checked for accuracy by any official agency.

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BAN ON SINGLE-USE PLASTIC BAGS. PROPOSITION

REFERENDUM. 67 * ARGUMENT AGAINST PROPOSITION 67 *

DON'T BE FOOLED BY PROP. 67. It is a $300 million per year HIDDEN TAX INCREASE on California consumers who will be forced to pay a minimum 10 cents for every paper and thick plastic grocery bag they are given at the checkout. And not one penny goes to the environment. Instead, the Legislature gave all $300 million in new tax revenue to grocers as extra profit. Stop the sweetheart special interest deal ... VOTE NO ON PROP. 67. STOP THE BAG TAX Prop. 67 bans the use of plastic retail bags and REQUIRES grocers to charge and keep a minimum 10 cent tax on every paper or thicker plastic reusable bag provided at checkout. Consumers will pay $300 million more every year just to use shopping bags grocery stores used to provide for free. TAX REVENUE GOES TO GROCERS, SPECIAL INTERESTS Proposition 67 will grow profits for grocery stores by up to $300 mlllion a year. Big grocery store chains get to keep all of the tax revenue. Grocers will grow $300 million richer on the backs of consumers.

NOT ONE PENNY OF THE BAG TAX GOES TO HELP THE ENVIRONMENT The Legislature could have dedicated the new tax revenue to protect the environment, but it did not. Instead, it REQUIRED grocery stores to keep the new bag tax revenue. STOP THE SPECIAL INTEREST BAG TAX DEAL Prop. 67 is a deal cooked up by special interest lobbyists in Sacramento to grow profits for grocery stores. The Legislature passed SB 270 and hidden in the fine print is a NEW BAG TAX on consumers-a minimum 10 cents on every paper and thick plastic reusable bag provided to shoppers-all dedicated to grocer profits. STOP THE SWEETHEART DEAL AND HIDDEN BAG TAX VOTE NO ON PROP. 67.

DOROTHY ROTHROCK, President California Manufacturers & Technology Association THOMAS HUDSON, Executive Director California Taxpayer Protection Committee DEBORAH HOWARD, Executive Director California Senior Advocates League

* REBUTTAL TO ARGUMENT AGAINST PROPOSITION 67 * A YES vote on 67 confirms that California can move forward with its ban on plastic grocery bags. It's that simple. Don't be fooled by the deceptive campaign waged by plastic bag corporations from Texas and South Carolina, who claim they are looking out for our environment. Phasing out single-use plastic bags brings major benefits to California. These bags kill wildlife, pollute our oceans, ruin recycling machines, and cause litter that is expensive to clean up. Many local communities across California have already phased out plastic grocery bags, and a YES vote would continue this progress. "Don't buy the industry spin! ... shoppers can avoid the 10-cent fee on paper or reusable plastic bags simply by bringing their own."-The Los Angeles Times editorial board '~cross California, small local grocery stores like ours support a YES vote on Prop. 67. In our local

community, we have a ban on single-use plastic bags that is working well. Our customers are bringing their own reusable bags, and are happy to do their part to reduce unneeded plastic litter. It's good for small businesses and consumers. "-Roberta Cruz, La Fruteria Produce "Californians are smarter than the plastic bag makers, especially those from out of state, seem to think. "-Sacramento Bee Editorial Board Vote YES on 67 to protect California's success in phasing out plastic bag litter and waste.

DOLORES HUERTA, Co-Founder United Farm Workers SAM LICCARDO, Mayor City of San Jose MARY LU£VANO, Commissioner California Coastal Commission

Arfuments printed un this page are the opinions of the authors, and have not been checked for accuracy by any official agency. Arguments I 113

COLLECTION AND RECYCLING PROGRAM

SUPPORT AND COMPLIANCE

Agenda Item 10


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STAFF REPORT To: SBWMA Board Members From: Cliff Feldman, Recycling Programs Manager Farouk Fakira, Finance Manager Date: September 22, 2016 Board of Directors Meeting Subject: Resolution Approving the SBWMA Final Report Reviewing the 2017 Recology San Mateo

County Compensation Application

Recommendation It is recommended that the SBWMA Board of Directors approve Resolution No. 2016-35 attached hereto authorizing the following actions:

1. Approve the SBWMA Final Report Reviewing the 2017 Recology San Mateo County (Recology) Compensation Application (Exhibit A - Final Report) which delineates the recommended base Total Contractor’s Compensation due to Recology for 2017 of $56,172,233.

This Final Report (Exhibit A) addresses Recology’s compensation due for 2017 and includes Table 8 which delineates the Total Revenue Requirement. The Member Agencies are obligated to set rates to generate revenue to match the 2017 Total Revenue Requirement. Any shortfall in net revenue to Recology will result in an interest payment to Recology in the subsequent rate year (e.g., 2015 final surplus or shortfall is determined in 2016 and included in 2017 revenue requirement). Analysis The SBWMA Draft Report Reviewing the 2017 Recology Compensation Application issued to the TAC and Board on August 12, 2016 addresses Recology’s compensation due for 2017 and the Total Revenue Requirement. The Member Agencies are obligated to set rates to generate revenue to match the 2017 Total Revenue Requirement. Any shortfall in net revenue to Recology will result in an interest payment to Recology in the subsequent rate year (e.g., 2016 final surplus or shortfall is determined in 2017 and included in 2018 revenue requirement). The Member Agencies were requested to submit comments on the Draft Report to the SBWMA by August 26. The Draft Report will be revised based on the feedback received from the Member Agencies and the Final Report will be issued to the Board on September 15, 2016, for the Board’s consideration at the September 22, 2016 Board of Director’s meeting. SBWMA Review of 2017 Recology Compensation Application The results of implementing the cost adjustment methodology prescribed in the Member Agency’s Franchise Agreements for Solid Waste, Recyclable Materials and Organic Materials Collection Service (Agreements) with Recology to determine the Rate Year Seven (i.e., 2017) compensation results in Total 2016 Contractor’s Compensation of $56,172,233, which is a decrease of $1,117,186 (-2.0% decrease from prior year) due primarily to the following:

Lower fuel cost in 2017 due to -38.3% reduction in the Fuel Index compared to prior year. A scheduled reduction in Interest Expense that is -24.7% lower than prior year.



Reduced payment by Recology of diversion based Performance Incentive/Disincentives.

Recology’s 2017 compensation is compared to 2016 in Table 1 below.

Table 1

The adjustments to compensation for 2017 represent a decrease in the base compensation of 1.9% or $1,075,781 from 2016. The results of the adjustment process are detailed by expense category in Table 3 of the Draft Report. As discussed in detail in Section 3.A of the Draft Report, Recology’s 2017 compensation includes several cost or revenue adjustments such as including the prior year’s under or over payments to/from Recology. These include:

Performance Incentive/Disincentive payments (and additional Liquidated Damages) for 2015 2014 Revenue Reconciliation surplus plus interest of $3,033,742 2015 Revenue Reconciliation shortfall plus interest of $47,566

The 2014 and 2015 Revenue Reconciliation balances owed to/from Recology are a true-up of what was paid to Recology versus what was owed and the resulting interest payment for any shortfall. This is not due to any change in Recology compensation but rather due to more or less revenue generated to pay the approved compensation. Changes from August 12, 2016 SBWMA Draft Report (i.e., Table 8) to September 15, 2016 SBWMA Final Report The following changes have been made to Table 8 (Exhibit A):

Per the request of Menlo Park staff, the City’s 2014 shortfall payment to Recology of $176,439 (E.2) was added to reflect the City’s June 2016 payment to Recology of $360,000. (The reconciliation of the 2014 shortfall would typically be accounted for with submittal of Recology’s March 31, 2017 Revenue Reconciliation Report for Rate Year 2016.)

Including the additional shortfall payment to Recology of $176,439 in line E.2 resulted in changing the 2017 Total Rate Adjustment Percentage (line F.3) from -0.08% to -1.0%.

The shortfall payment of $2,371,095 made by Belmont was moved from row E.1 to row E.2 (immaterial change).

Corrected a typo in the calculation formula in row C.2 (immaterial change). Rate Setting and Approval Process This SBWMA Draft (and Final) Report and recommendation is to determine the compensation owed to Recology for collection services in 2017. This Report also provides Table 8 (Exhibit A) which establishes the final Revenue Requirement that will be used as the basis for recommending the 2017 rate adjustments. The Revenue Requirement includes compensation to Recology for solid waste, recyclables and organic materials collection and

2016 Cost 2017 Cost Change %

Base Compensation $57,262,816 $56,187,035 (1,075,781)$ -1.9%

Incentives / Disincentives $26,604 ($14,802) (41,405)$ -155.6%

$57,289,420 $56,172,233 (1,117,186)$ -2.0%

Total Contractor's Compensation

Recology Compensation

Total Contractor's Compensation



Pass-Through costs, which include Agency fees, and disposal and processing costs at the Shoreway Environmental Center. Article 11 of the Franchise Agreements states the following:

Each Member Agency is obligated to set rates as necessary to generate annual gross revenues billed by Recology equal to the approved compensation amount plus all approved pass-through costs.

If an Agency sets a rate that is below the approved recommendation contained in the Final Report, or if an Agency delays imposing a rate increase effective January 1, 2017, and net revenues billed by Recology in 2017 are less than needed to cover the approved total contractor’s compensation delineated in the Final Report, the Agency will be obligated to pay interest to Recology on the difference.

Background In 2005, the SBWMA and its Member Agencies initiated a five and a half year collection services contractor selection process that resulted in Recology and the Member Agencies executing Franchise Agreements (“Agreements”) for Collection Services. Eleven of the twelve SBWMA Member Agency Agreements have the same methodology used to calculate the compensation paid to Recology. One Member Agency (i.e., City of Belmont) used a different compensation methodology; however, use of this different methodology has no bearing on the costs or services provided to the other 11 Member Agencies. Inclusion of the City of Belmont in the cost calculations with the other 11 Member Agencies is necessary in order to accurately implement the cost allocation process prescribed in the Agreements. The compensation adjustment methodology provisions in the Member Agency Agreements are contained in Article 11, Attachment K and Attachment N. Article 11 provides an overview of the methodology and describes the process by which aspects of the compensation adjustment process shall be implemented. Note: In this staff report and all attachments, the term “cost” and “compensation” are intended to have the same meaning. The term “cost” is not intended to mean Recology’s true operating cost which is unknown, but rather what the company is paid to perform the services. Fiscal Impact Variance Analysis Rate revenue from the total SBWMA Member Agencies is calculated to require a weighted average increase of 1.5% (Exhibit A, Table 8, row C.3) for 2017 rates to cover the Total Revenue Requirement for the Recology cost, pass through costs, and the prior year’s revenue reconciliation surplus/shortfall (Exhibit A, Table 8, row B.1 and B.2). Tables comparing 2017 costs to 2016 costs and showing the components of the 2017 rate adjustments by Member Agency are included in the Draft Report as Appendix D – Member Agency Variance Analysis of Total Collection Cost and Rate Impact. Total Collection Rate Adjustment The total rate adjustment is provided in the Draft (and Final) Report in Table 8 (Exhibit A). This table presents the Total Collection Rate Adjustment from all sources that impact rates by Member Agency, as follows:

Section A - This section provides the estimated 2017 Collection Revenue using 2016 rates (A.1), the 2017 Total Recology Compensation (A.2) and Pass-Through Expenses (A.6) used to determine the 2017 Revenue Requirement (A.7), the estimated 2017 Surplus/Shortfall balance with Recology (A.8), Agency Fees on shortfalls (A.9), and the Rate Adjustment Percentage (A.10). The total SBWMA rate adjustment is positive 1.5%.



Section B – This section provides the results of the 2015 Recology Revenue Reconciliation surplus/shortfall that must be added to the 2017 rate adjustment. There is no associated rate adjustment in total, but each Member Agency has an adjustment.

Section C – This section provides the 2017 Required Rate Adjustment which is the sum of sections A and B. The total SBWMA rate adjustment is positive 1.5%.

Section D – This section provides the “2016 Estimated Surplus/Shortfall” balance with Recology (D.1) and the associated Agency Fess on this amount (D.2). Also in this section is the final 2014 surplus/shortfall (D.3) which would have been included in the 2016 rate adjustment and the total estimated surplus for all SBWMA Member Agencies which totals $3,523,537 (D.4). The 2016 Revenue Reconciliation will be finalized in 2017, similar to how the 2015 Revenue Reconciliation was finalized in 2016.

Section E – This section provides the amount of year-to-date (YTD) surplus balances (E.1) which Member Agencies have requested Recology to refund (i.e., Atherton, Burlingame, Redwood City and West Bay Sanitary District), and the amount of YTD shortfall payments (E.2) which Member Agencies (e.g., Menlo Park) have paid to Recology. It also includes an adjustment related to Belmont’s unique compensation methodology with Recology. (Please note that Exhibit B attached to this staff report provides the refunds from Recology for surpluses and the payments to Recology for shortfalls for 2014, 2015 and 2016.)

Section F – This section provides the “Total Rate Adjustment” and the cumulative surplus/shortfall of $1,002,603 (F.2) which includes the result of Sections D and E. The total SBWMA recommended rate adjustment is a decrease of 1.0% (F.3). The Member Agencies are obligated to set rates to generate the revenue needed as denoted in Section F per the MOU between Recology and SBWMA. Agencies that set rates lower than delineated in Section F and experience a shortfall in revenue are liable for future interest charges from Recology.

Attachments: Resolution No. 2016-35

Exhibit A – SBWMA Final Report Reviewing the 2017 Recology San Mateo County Compensation Application

Exhibit B – Member Agency Refunds from Recology for Surpluses and Payments to Recology for Shortfalls




MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING THE SBWMA FINAL REPORT REVIEWING THE

2017 RECOLOGY SAN MATEO COUNTY COMPENSATION APPLICATION

WHEREAS, On February 28, 2013, the South Bayside Waste Management Authority (SBWMA) Board of Directors approved modifications to the schedule prescribed in the Member Agencies Franchise Agreements for Collection of Recyclable Materials, Organic Materials and Solid Waste with Recology San Mateo County (Recology) specifying that the SBWMA Board of Directors’ was required to submit comments, questions and concerns on the Draft Report to the SBMWA by August 30 each year; and,

WHEREAS, The SBWMA prepared and issued to the SBWMA Board of Director’s on August 12, 2016

the SBWMA Draft Report Reviewing the 2017 Recology Compensation Application (Report); and, WHEREAS, The Draft Report issued by the SBWMA on August 12, 2016 was updated based on

feedback from Member Agencies and the SBWMA subsequently issued the Final Report (Exhibit A) to the Board of Directors on September 15, 2016; and,

WHEREAS, The Final Report recommends a 2.0% decrease in the total contractor’s compensation when compared to the 2016 compensation approved by the SBWMA Board of Director’s on September 24, 2015 per Resolution No. 2015-25. The total 2017 Recology contractor’s compensation is $56,172,233. NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves:

1. The SBWMA Final Report Reviewing the 2017 Recology San Mateo County Compensation Application. PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority,

County of San Mateo, State of California on the 22nd day of September, 2016, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2016-35 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on September 22, 2016. ATTEST: __________________________ _________________________________ Bob Grassilli, Chairperson of SBWMA Cyndi Urman, Board Secretary


Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist.


SBWMA FINAL REPORT REVIEWING THE 2017 RECOLOGY SAN MATEO COUNTY

COMPENSATION APPLICATION

September 15, 2016

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_____________________________________ ________________________________________________________ AGENDA ITEM: 10A EXHIBIT A - p1


September 15, 2016 SBWMA Final Report Reviewing the 2017 Recology Compensation Application ii

TABLE OF CONTENTS SECTION 1 EXECUTIVE SUMMARY ................................................................................................ iii

1.A Summary ....................................................................................................................................... iii 1.B Compensation Application Process and Issuance of SBWMA Report ......................................... iii 1.C Summary of Notable Items in the 2017 Recology Compensation Application ............................ iv 1.D Recology Cost Allocation Process by Member Agency ............................................................... iv 1.E Recommendation ............................................................................................................................. v

SECTION 2 BACKGROUND .................................................................................................................. 1

2.A Franchise Agreement Terms ........................................................................................................... 1 2.B Annual Revenue Reconciliation ...................................................................................................... 1 2.C Review of Compensation Application by SBWMA for Accuracy and Completeness, and

Issuance of Final Report.................................................................................................................. 1

SECTION 3 2017 RECOLOGY SAN MATEO COUNTY COMPENSATION APPLICATION .......... 2

3.A Description of Compensation Adjustments ..................................................................................... 2 3.B Adjustment of 2016 Compensation to 2017 .................................................................................... 4 3.C Recommended Adjustment to Recology’s Compensation for 2017 ............................................... 7 3.D Recology Cost Allocation Process by Member Agency ................................................................. 7 3.E Results of Cost Allocation ............................................................................................................... 8

SECTION 4 2017 MEMBER AGENCY REVENUE REQUIREMENT OBLIGATIONS ................... 10

4.A Components of Member Agency Revenue Requirement .............................................................. 10 4.B Pass-Through Costs ....................................................................................................................... 10 4.C Cost Variance from 2016 to 2017 ................................................................................................. 10

4.D Total Recommended Rate Adjustment .......................................................................................... 12 SECTION 5 CONCLUSION .................................................................................................................. 15

APPENDICES

APPENDIX A – Recology 2017 Compensation Application Issued on August 10, 2016 Reflecting Redline Changes from the Versions Submitted on June 15 and July 22, 2016 (Part I Sections 1 – 4 Only)

APPENDIX B – SBWMA Questions and Comments on Recology 2017 Compensation Application Issued June 29, 2016 (with Recology’s Responses Submitted on July 22, 2016)

APPENDIX C – Member Agency Questions and Comments on Recology 2017 Compensation Application (with Recology’s Responses)

APPENDIX D – Member Agency Variance Analysis of Total Collection Cost and Rate Impact

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September 15, 2016 SBWMA Final Report Reviewing the 2017 Recology Compensation Application iii

SECTION 1 EXECUTIVE SUMMARY

1.A Summary The South Bayside Waste Management Authority (SBWMA/RethinkWaste) is required to review the Recology San Mateo County (Recology) 2017 Compensation Application (Application) for completeness, accuracy and consistency as prescribed in the Franchise Agreements between the SBWMA Member Agencies and Recology. The Application is to document the results of Recology following the prescribed compensation adjustment process detailed in Article 11, and Attachments K and N of the Member Agency Franchise Agreements. Specifically, this process includes applying the various indices to the approved 2016 compensation to arrive at the 2017 compensation, allocating the 2017 compensation to the Member Agencies, and adding the prior year revenue reconciliation balances. This Final Report provides the results of SBWMA’s review of Recology’s 2017 Application and the critical analysis by the SBWMA of all components that make-up the total revenue requirement for Member Agencies to set solid waste rates, including pass through costs (i.e., Member Agency fees, disposal and processing costs, and any Member Agency specific contract changes) and prior year surplus/shortfalls owed to/from Recology. Also provided is a variance summary of the Total Revenue Requirement for 2016 to 2017 by Member Agency, which includes the compensation paid to Recology and pass-through costs (Appendix D). In addition, the SBWMA provides the total rate impact for each Member Agency (see Table 8 on pages 13 and 14) and recommended rate adjustment for 2017, which consolidates all the projected revenue and cost components associated with the solid waste rate setting process by Member Agency.

1.B Compensation Application Process and Issuance of SBWMA Report The 2017 Recology Compensation Application was submitted to the SBWMA and Member Agencies on June 15, 2016. On June 29, 2016 the SBWMA and one Member Agency (i.e., San Mateo County) submitted questions and comments to Recology. On July 22, 2016 Recology submitted a revised 2017 Compensation Application and responses to the SBWMA and Member Agency’s questions and comments. Then on August 10, Recology submitted another revised Application reflecting additional changes per the request of the SBWMA. Appendix A provides Part 1 of Recology’s revised August 10 (redlined) version of its 2017 Compensation Application. Appendix B provides the SBWMA’s questions and comments to Parts 1 and 2 of Recology’s Compensation Application, and Recology’s response submitted on July 22. Appendix C provides the questions and comments submitted by Member Agencies (i.e., San Mateo County) and Recology’s response. The SBWMA provided all Member Agencies their detailed revenue, disposal and processing cost projections on July 25, 2016 and requested that changes be submitted by August 7. Table 1 on the next page shows the complete schedule to review and comment on Recology’s Compensation Application. This Final Report provides all the necessary information for Member Agencies to adjust solid waste rates for 2017, if necessary.

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September 15, 2016 SBWMA Final Report Reviewing the 2017 Recology Compensation Application iv

Table 1 2016 Schedule to Approve Recology 2017 Compensation

Due Date Milestone

June 15, 2016 Recology 2017 Compensation Application Submitted to Member Agencies and SBWMA

June 29, 2016 Member Agencies and SBWMA Comments Due to Recology

July 22, 2016 Revised Recology 2017 Compensation Application Submitted to Member Agencies and SBWMA

August 12, 2016 SBWMA Draft Report Reviewing the 2017 Recology Compensation Application Issued to Member Agencies

August 26, 2016 Member Agencies Written Comments on SBWMA Draft Report Due to SBWMA

September 8, 2016 SBWMA TAC Meeting: Staff Update and Discussion September 15, 2016 SBWMA Final Report Issued to Member Agencies/Board September 22, 2016 SBWMA Board Meeting: Consideration of Final Report

1.C Summary of Notable Items in the 2017 Recology Compensation Application Notable items included in the 2017 Recology Compensation Application include:

2015 revenue reconciliation of surplus/shortfall and interest payments due to/from Recology (Table H in Recology Application).

Adjustment to Performance Incentive/Disincentive and Liquidated Damages payments (Table F in Recology Application).

A 38.0% decrease in fuel costs based on the change in the Fuel Index. Overall 2.0% Total Compensation decrease.

1.D Recology Cost Allocation Process by Member Agency The process to allocate Recology’s cost equitably across all Member Agencies is prescribed in Article 11 and Attachment K of the Franchise Agreements. The collection cost per Member Agency varies based on topography, housing density, traffic patterns, customer subscription levels, etc., even though the services provided are uniform across the Member Agencies. For these reasons, the cost to provide service is allocated to the individual Member Agencies based on operational metrics. Specifically, Recology’s costs are broken into nine cost categories and each is allocated based on four operational statistics specific to each Member Agency. These operational statistics are updated annually in April/May and include:

1. Annual route labor hours 2. Annual route hours 3. Number of containers in service 4. Number of customer accounts serviced

Per section 7.12 of the Franchise Agreements, Recology conducted its Annual Route Assessment over a four week period in April/May 2016. The statistics compiled from this Route Assessment are used to allocate costs for 2017. The cost allocation process is similar to the practice used under the Allied Waste/Republic Services compensation methodology. Year to year variances are the result of several factors addressed by Recology in sections 3.2 and 3.3 of its Application.

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September 15, 2016 SBWMA Final Report Reviewing the 2017 Recology Compensation Application v

1.E Recommendation Based on the net results of the cost adjustments calculated in the 2017 Recology Compensation Application, SBWMA is recommending that the Board approve an adjustment to Recology's 2017 compensation as delineated in Table 2 below. Table 2 summarizes the adjusted 2017 costs and changes from 2016. The total change in Recology’s compensation for 2017 is a decrease of $1,117,186 or 2.0% from 2016.

Table 2 – Summary of Adjusted 2016 Costs to 2017 Costs

2016 Cost 2017 Cost% of Total

Cost $ Change % Change

Total Annual Cost of Operations 50,681,506 49,987,543 89.0% (693,963) -1.4%

Profit 5,320,158 5,247,311 9.3% (72,847) -1.4%Operating Ratio 90.5% 90.5%

Total Operating Costs 56,001,664 55,234,855 98.3% (766,810) -1.4%

Contractor Pass-Through CostsInterest Expense 1,629,656 1,306,716 2.3% (322,940) -19.8%Interest Expense on Implementation Cost 53,748 43,030 0.1% (10,718) -19.9%Contract Changes to Specific Agencies (422,253) (397,566) -0.7% 24,687 -5.8%

Total Contractor Pass-Through Costs 1,261,152 952,180 1.7% (308,971) -24.5%

BASE CONTRACTOR'S COMPENSATION 57,262,816 56,187,035 100.0% (1,075,781) -1.9%

Other AdjustmentsPerformance Incentives / Disincentives 26,604 (14,802) 0.0% (41,405) -155.6%

Total Other Adjustments 26,604 (14,802) 0.0% (41,405) -155.6%

57,289,420$ 56,172,233$ 100.0% (1,117,186)$ -2.0%

RECOLOGY COMPENSATION SUMMARY

Note: Includes Agency specific contract changes (Hillsborough, Menlo Park, San Carlos).

TOTAL CONTRACTOR'S COMPENSATION

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September 15, 2016 SBWMA Final Report Reviewing the 2017 Recology Compensation Application 1 of 15

SECTION 2 BACKGROUND

2.A Franchise Agreement Terms Eleven of the twelve SBWMA Member Agency Agreements use the same methodology to calculate the compensation owed to Recology. One Member Agency (i.e., City of Belmont) uses a different compensation methodology; however, using this different methodology has no bearing on the costs (compensation) or services provided to the other eleven Member Agencies. The compensation adjustment methodology is detailed in Article 11, Attachment K and Attachment N in the Member Agency Franchise Agreements. Article 11 describes the methodology and process by which the compensation adjustment process shall be implemented. Attachment K provides more detail on this process and how costs (compensation) will be allocated amongst the Member Agencies. Attachment N includes a series of forms (worksheets) that breakout Recology’s compensation and data used in the cost allocation process. Cost Adjustment Process Attachment K, Table 1 of the Franchise Agreements prescribes a detailed process to adjust Recology’s costs during the full ten-year term of the Franchise Agreements. A flowchart in Recology’s Compensation Application (see table D) illustrates graphically the cost adjustment process that is conducted each year.

2.B Annual Revenue Reconciliation For rate years 2012 through 2019 there is an annual revenue reconciliation process to determine the net revenue Recology retained versus the amount actually owed to the company. The calculation compares the approximately $100 million gross revenue billed, less contractor paid pass-through expenses for Member Agency fees and disposal and processing expense at the Shoreway facility (owned by SBWMA/RethinkWaste), versus the approved contractor’s compensation. This revenue reconciliation process results in a surplus or shortfall owed to/from Recology by Member Agency. This surplus or shortfall will be added to or subtracted from the Recology’s compensation for the subsequent rate year (in this case for 2017). The Recology 2015 Revenue Reconciliation Report was submitted to the SBWMA and Member Agencies on March 31, 2016. Staff reviewed this 2015 Revenue Reconciliation Report and contracted an independent firm (i.e., R3 Consultants), to thoroughly review it, which included validating the accuracy of the results by Member Agency. On July 28, 2016 the Board approved agenda item 7D which included the audit findings and results (i.e., final 2015 surplus/shortfall and interest) of the revenue reconciliation that will be added to or subtracted from Recology’s 2017 compensation unless it was requested to be refunded directly back to a Member Agency.

2.C Review of Compensation Application by SBWMA for Accuracy and Completeness, and Issuance of Final Report

The Franchise Agreements state that the SBWMA is responsible for annually conducting a review and analysis of Recology’s Compensation Application. SBWMA staff conducts a thorough review of the data, calculations, index adjustments, and the cost allocation process. This review is used to prepare the analysis contained in this report including any changes and adjustments to Recology’s compensation. Recology is obligated to promptly provide to the SBWMA any missing information, explanations and agreed changes upon request during the Compensation Application review process. Recology submitted a revised

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Compensation Application on July 22 based on staff and Member Agency comments. The questions and comments submitted to the company during the initial review period in June are provided in Appendices B and C. Recology then submitted its final 2017 Compensation Application on August 10 at the request of the SBWMA.

SECTION 3 2017 RECOLOGY SAN MATEO COUNTY COMPENSATION APPLICATION

3.A Description of Compensation Adjustments The 2017 Recology Compensation Application is based on adjusting 2016 cost categories by applying the changes in several indices to arrive at the 2017 compensation by cost category. In the Compensation Application, the term “cost” really refers to “compensation.” Please note this does not mean Recology’s “true” cost as this is an index based compensation approach and not a “cost plus” approach. The SBWMA moved from a “cost plus” compensation model to a new “fixed price plus index adjustment” compensation methodology with the new Recology contract that started on January 1, 2011 and this change has resulted in substantial savings to the Member Agencies. The Franchise Agreements with Recology also provide for additional compensation adjustments for special issues related to performance incentive/disincentive payments (and liquidated damages) and a negotiated cost adjustment for Hillsborough. The contract also entitled Recology to receive two cost adjustments in 2011 and 2013 to address service level changes to the number of residential customer accounts and commercial service levels. Changes to Annual Adjustment to Wages and Benefits in the Collective Bargaining Agreements. The 2017 Compensation Application is the fourth one whereby all wages and benefits costs are adjusted based on a pre-determined CPI index. The Franchise Agreements prescribe that when the Collective Bargaining Agreements (CBA) in effect at the start of the contract were either amended or expired, the annual adjustment to wages and benefits would then be tied to a CPI index and not subject to the actual terms (i.e., increases) in the CBA. The three CBA’s expired in 2013, therefore the adjustment to CBA wages is now limited to a pre-determined Federal labor CPI index. In 2011, 2012 and 2013 of the Recology contract, and throughout the term of the previous Allied Waste/Republic Services contract(s), the actual wage and benefit rate increases specified in the CBA were used to adjust these cost categories. Recology Annual Revenue Reconciliation Report for 2015. Recology submitted a Revenue Reconciliation Report to the SBWMA on March 31, 2016 which compares the approved compensation owed to Recology for 2015 with the actual net funds retained by Recology after paying for pass-through costs for disposal and processing at Shoreway and Agency fees (e.g., Franchise Fees) paid to each Member Agency. The SBWMA thoroughly reviews this Report and it is audited by an independent third party firm (i.e., R3 Consultants). The audit results are then provided to the Board for consideration and approval. Each Member Agency annually generates a surplus or shortfall which is added to or subtracted from the next year’s Revenue Requirement. The total 2015 surplus including interest is $47,566 ($121,886 surplus less interest due to Recology of ($74,320), see Tables 6 and 8.

Interest Payment to Recology for 2015 Revenue Reconciliation Shortfall. The Franchise Agreement(s) with Recology provide for an interest charge at the rate of prime plus one percent (i.e., currently 4.25%) for the shortfall identified in the 2015 Revenue Reconciliation Report described above. The calculation of interest on shortfalls was clarified and approved by the Board on March 27, 2014 (agenda item 8A), authorizing the Executive Director to execute a Memorandum of Understanding (MOU) with Recology

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establishing guidelines regarding future interest calculations on surplus revenue. The net amount of interest charged to some Member Agencies from Recology for 2015 is $74,320 (Table H in the Recology Application). In addition, on July 8, 2015, the SBWMA Board of Directors and Technical Advisory Committee (TAC) Members were provided a revision to the MOU with Recology which clarifies that interest will not be charged to a Member Agency that pays Recology by September 30 the amount of any shortfall for the previous year as determined by the Board approved Revenue Reconciliation Report. Performance Incentive/Disincentive Payments (and Liquidated Damages). As prescribed in the Franchise Agreement(s) with Recology, the company included the 2015 Performance Incentives/Disincentives and Liquidated Damages calculations in the 2015 Annual Report submitted on March 31, 2016. The Board approved additional disincentive payments and liquidated damages of $3,096 be paid by Recology at the July 28, 2016 Board meeting. The 2015 disincentive payment reported by Recology is primarily due to a decrease in recycling achieved during 2015 over that achieved in 2014. The total annual Recology recycling diversion incentive payments (not net of additional liquidated damages and disincentive payments per the annual audit) from 2011 to 2014 and the Recology recycling diversion disincentive payment for 2015 are as follows:

2011 - $913,060 (diversion incentive payment to Recology) 2012 - $489,164 (diversion incentive payment to Recology) 2013 - $257,650 (diversion incentive payment to Recology) 2014 - $42,217 (diversion incentive payment to Recology) 2015 - ($14,215) (diversion disincentive payment to the Member Agencies)

The year-over-year change in the diversion payment from 2014 to 2015 is a 134% reduction. The diversion achieved annually is leveling off as programs mature. The net performance incentives/disincentives and liquidated damages payments owed to the Member Agencies is different than the diversion only disincentive (or prior incentive) payment discussed above. The net amount owed to the Member Agencies and deducted from Recology’s 2017 compensation is $14,802 (Table F in Recology’s Application). The Performance Incentive/Disincentive payments are allocated to the Member Agencies based on the quantity of solid waste tons disposed by each. Per the Franchise Agreements, the Liquidated Damages reported by Recology are not allocated but applied specifically to each Member Agency with the exception of the additional performance disincentives/liquidated damages approved by the Board on July 28, 2016. Recurring Items Three cities also have unique cost adjustments: Menlo Park has an additional cost for customer billing services ($24,529) that was done in-house prior to 2011, Hillsborough has a cost reduction for not buying new organics carts at the start of the contract ($13,510),1 and San Carlos has a cost reduction for residential food scraps kitchen pails bought by the City prior to the start of the new contract with Recology ($5,567).

1 The 2017 Application includes depreciation for replacement organic carts from 2011 through 2013. This depreciation totals $13,510, which reduces the Town’s savings (originally calculated at $32,502) for purchasing used carts. This new depreciation expense commencing in 2015 was approved by the Town contingent on Recology’s compliance with conditions put forth by the Town related to reporting and ownership of the containers upon expiration of the Franchise Agreement.

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The Town of Hillsborough also negotiated a reduction in the cost of backyard service which is adjusted each year. The 2016 cost reduction is $416,528.

3.B Adjustment of 2016 Compensation to 2017 As prescribed in Article 11, Attachment K and Attachment N of the Franchise Agreements, the adjustment of the 2016 compensation to 2017 compensation is predominantly based on the annual percentage change in select CPI indices applied to various cost categories. As previously explained, the Recology drivers, mechanics and office clerical CBA related expenses have all reverted to a CPI index adjustment commencing in rate year 2014. Table 3 on the following page provides the detailed results from making all compensation adjustments from 2016 to 2017. The application of all adjustment factors to the costs approved in the company’s 2016 Compensation Application results in an overall decrease in Recology’s base 2017 compensation totaling $1,075,781 or 1.9% from 2016. Performance Incentive (and Liquidated Damages) payments declined by $41,405 (155.6%). The result is a net decrease in total contractor’s compensation of $1,117,186 or 2.0 % for 2017 from 2016. Please refer to Table 3 on the next page.

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Table 3 – Results of Adjustments of 2016 Costs to 2017 Costs

Costs - 2016 Costs - 2017% of Total

Cost $ Change % ChangeAnnual Cost of Operations

Wages 16,469,842 16,758,609 29.8% 288,768 1.8%Benefits 6,555,040 6,669,971 11.9% 114,930 1.8%Payroll Taxes 1,370,291 1,394,316 2.5% 24,025 1.8%Workers Compensation Insurance 1,452,653 1,471,775 2.6% 19,122 1.3%

Total Direct Labor Related-Costs 25,847,826 26,294,671 46.8% 446,845 1.7%Direct Fuel Costs 3,348,085 2,066,892 3.7% (1,281,193) -38.3%Other Direct Costs 2,169,270 2,178,164 3.9% 8,894 0.4%Depreciation

- Collection Vehicles 4,016,792 4,016,792 7.2% - 0.0% - Containers 1,882,550 1,882,550 3.4% - 0.0%

5,899,342 5,899,343 10.5% (0) 0.0%

Allocated Indirect Costs excluding DepreciationGeneral and Administrative 7,181,152 7,267,914 12.9% 86,762 1.2%Operations 1,777,985 1,787,232 3.2% 9,247 0.5%Vehicle Maintenance 3,067,890 3,106,609 5.5% 38,718 1.3%Container Maintenance 1,050,330 1,047,093 1.9% (3,237) -0.3%

Total Allocated Indirect Costs excluding Depreciation 13,077,358 13,208,848 23.5% 131,490 1.0%- - Total Allocated Indirect Depreciation Costs 152,451 152,451 0.3% - 0.0%- - Annual Implementation Cost Amortization 187,175 187,175 0.3% - 0.0%




Contractor Pass-Through CostsInterest Expense 1,629,656 1,306,716 2.3% (322,940) -19.8%

Interest Expense on Implementation Cost 53,748 43,030 0.1% (10,718) -19.9%

Contract Changes to Specific Agencies (422,253) (397,566) -0.7% 24,687 -5.8%



Other Adjustments - Performance Incentives / Disincentives 26,604 (14,802) 0.0% (41,405) -155.6%


TOTAL CONTRACTOR'S COMPENSATION 57,289,420$ 56,172,233$ 100.0% (1,117,186)$ -2.0%

Direct Labor-Related Costs

Total Depreciation

RECOLOGY COMPENSATION DETAIL

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Table 4 below denotes the total cost adjustment to each cost category and the specific index prescribed in the Franchise Agreement(s).

Table 4 – Results of Cost Adjustments

Cost CategoryCost

Adjustment Index Explanation

Worker’s Compensation Insurance 1.32% Index #2

The Worker's Comp Insurance adjustment is based on the change in a CPI Index.

Depreciation – Collection Vehicles 0.0% n/a No adjustment in 2017.

Depreciation - Containers 0.0% n/a No adjustment in 2017.

Application of Index to the Cost Categories

Cost Adjustment Reference

Specific Index Prescribed in the Franchise Agreement(s)

CBA & non-CBA Wages & Benefits 1.75% Index #1

U.S. Department of Labor, Bureau of Labor Statistics, Private Industry Employment Cost Index for Service-Producing Industries (seasonally adjusted, total compensation, series no. cis201s000000000i successor to Ecs12102i ended 2005.

Worker's Compensation Insurance 1.32% Index #2

U.S. Department of Labor, Bureau of Labor Statistics, Private Industry Employment Cost Index for Private Industry (Not seasonally adjusted, total compensation, series no. CIU2030000000000A).

Fuel -38.27% Index #3

U.S. Department of Labor, Bureau of Labor Statistics, Producer Price Index - Commodity Index for #2 diesel fuel (not seasonally adjusted, fuels and related products and power, series no. wpu057303).

Other Operating Expense 0.41% Index #4

U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index – All Urban Consumers, U.S. city average (not seasonally adjusted, all items, base period: 1982-84=100, series no. cuur0000sao).

Other Indirect Cost 0.41%The Other Operating cost (insurance, general office expense, safety, etc.) is adjusted by 80% of a change in a CPI index.

Index #1

Index #1

Index #3

Index #4

n/a

Non-CBA Labor 1.75%

Fuel -38.27%The Fuel expense is adjusted by the change in a fuel index.

The Non-CBA Labor cost (management and supervisors) adjustment is based on the change in a CPI index.

CBA Wages and Benefits (Drivers, Mechanics, Clerical) 1.75%

The CBA wage & benefits adjustment is based on the change in a CPI Index.

Payroll Tax 1.75%

The payroll tax rate is adjusted by changes in Federal or state payroll tax rates. There are no tax rate changes for 2017; therefore, the payroll tax expense changes in accordance with change in wages.

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3.C Recommended Adjustment to Recology’s Compensation for 2017 Based on the net results of the compensation adjustments previously described and the analysis of the 2017 Recology Compensation Application, SBWMA is recommending that the SBWMA Board approve an adjustment to Recology's 2017 compensation as delineated in Table 5 – Comparison of 2016 and 2017 Compensation. The total adjustment to Recology's contractor’s compensation is a 2.0% reduction.

Table 5 – Comparison of 2016 and 2017 Compensation

3.D Recology Cost Allocation Process by Member Agency Section 3 of the Recology Compensation Application describes how compensation is allocated to each Member Agency after the total compensation is adjusted. Article 11 and Attachment K of the Franchise Agreements prescribe the process to allocate the company’s compensation equitably across the Member Agencies. Nine cost categories across seventeen lines of business are allocated to each Member Agency by four agency specific operational statistics. These four operational statistics are:

1. Annual route labor hours 2. Annual route hours 3. Number of containers in service 4. Number of customer accounts serviced

The statistics used to allocate costs for 2017 are based on operational metrics complied for each Member Agency by Recology in April/May 2016. The cost allocation process is similar to the process used under the previous contract with Allied Waste/Republic Services. While the services provided by Recology are uniform across the Member Agencies, the cost to provide these services vary by Member Agency based on topography, housing density, traffic patterns, and customer

2016 Cost 2017 Cost% of Total

Cost $ Change % Change




Contractor Pass-Through CostsInterest Expense 1,629,656 1,306,716 2.3% (322,940) -19.8%Interest Expense on Implementation Cost 53,748 43,030 0.1% (10,718) -19.9%Contract Changes to Specific Agencies (422,253) (397,566) -0.7% 24,687 -5.8%



Other AdjustmentsPerformance Incentives / Disincentives 26,604 (14,802) 0.0% (41,405) -155.6%


57,289,420$ 56,172,233$ 100.0% (1,117,186)$ -2.0%

RECOLOGY COMPENSATION SUMMARY

Note: Includes Agency specific contract changes (Hillsborough, Menlo Park, San Carlos).

TOTAL CONTRACTOR'S COMPENSATION

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subscription levels, etc. For these reasons, the cost to provide service is reallocated annually to the individual Member Agencies based on current operational metrics. The metric used by Recology to allocate costs for the Venues and Events line of business across the Member Agencies, is different than that prescribed in the Franchise Agreements. Recology and the SBWMA agree that if the method prescribed for this line of business were used, the allocation of these costs would not be equitable. Thus, the company has allocated these specific costs based on the number of single-family accounts in service and not the route labor hours or route hours expended to provide this service during April/May when the operational metrics are compiled. This approach was approved by the Board and has been applied to the compensation adjustment since Rate Year Two (2012). For 2017, it applies to approximately 0.1% of the total base compensation.

3.E Results of Cost Allocation The cost allocation by Member Agency for each cost category and the total contactor’s compensation is provided in Table 6 – Member Agency Cost Allocation. The cost allocation by line of business (Residential, Commercial/MFD and Agency Facility) for each Member Agency is found in Recology’s Compensation Application as Appendix 3-3, 3-4 and 3-5.

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Table 6 – Member Agency Cost Allocation

2017 Total Atherton Belmont Burlingame E Palo Alto Foster City Hillsborough Menlo Park North Fair Oaks Redwood City San Carlos San Mateo West BayUnincorporated

County

Annual Cost of Operations

Wages for CBAs $16,758,609 $420,867 $1,078,866 $1,692,726 $666,237 $991,125 $723,462 $1,650,604 $523,679 $2,941,239 $1,444,583 $3,733,043 $275,629 $616,549Benefits for CBAs $6,669,971 $169,393 $429,051 $660,417 $267,203 $393,702 $292,655 $654,482 $210,298 $1,173,349 $573,498 $1,485,021 $111,152 $249,749Payroll Taxes $1,394,316 $35,016 $89,762 $140,835 $55,431 $82,462 $60,192 $137,330 $43,570 $244,711 $120,189 $310,589 $22,932 $51,297Workers Compensation Insurance $1,471,775 $36,961 $94,748 $148,658 $58,510 $87,043 $63,536 $144,959 $45,991 $258,305 $126,866 $327,844 $24,206 $54,147

Total Direct Labor Related-Costs $26,294,671 $662,238 $1,692,426 $2,642,636 $1,047,381 $1,554,332 $1,139,844 $2,587,375 $823,538 $4,617,605 $2,265,136 $5,856,497 $433,920 $971,742

Direct Fuel Costs $2,066,892 $56,537 $129,454 $191,387 $86,390 $123,177 $99,168 $216,105 $63,520 $359,861 $185,197 $441,601 $35,909 $78,588

Other Direct Costs $2,178,164 $57,439 $136,843 $208,436 $90,102 $129,377 $100,097 $229,317 $66,207 $379,923 $195,007 $468,399 $36,697 $80,322

Depreciation - Collection Vehicles $4,016,792 $113,691 $249,166 $366,182 $166,396 $242,372 $194,288 $436,745 $120,140 $696,311 $365,299 $842,774 $69,867 $153,560 - Containers $1,882,550 $58,597 $123,181 $163,868 $84,106 $117,380 $59,190 $181,675 $58,429 $335,090 $169,003 $413,342 $36,548 $82,141

$5,899,342 172,288 372,347 530,050 250,502 359,752 253,478 618,420 178,569 1,031,401 534,302 1,256,116 106,415 235,701

Allocated Indirect CostsGeneral and Administrative $7,267,914 $113,573 $446,104 $685,412 $358,017 $449,850 $170,253 $757,727 $214,087 $1,357,211 $690,854 $1,636,994 $114,123 $273,710Operations $1,787,232 $52,035 $111,906 $174,489 $71,975 $108,800 $87,497 $192,275 $50,430 $301,964 $162,454 $374,666 $31,362 $67,378Vehicle Maintenance $3,106,609 $90,448 $194,517 $303,301 $125,109 $189,119 $152,090 $334,217 $87,658 $524,882 $282,381 $651,254 $54,514 $117,118Container Maintenance $1,047,093 $24,878 $65,058 $99,236 $49,306 $67,621 $26,046 $114,757 $30,172 $186,529 $95,334 $233,163 $16,742 $38,252

Total Allocated Indirect Costs $13,208,848 $280,934 $817,585 $1,262,438 $604,408 $815,390 $435,885 $1,398,977 $382,346 $2,370,585 $1,231,023 $2,896,077 $216,742 $496,459

Total Allocated Indirect Depreciation Costs $152,451 $4,417 $9,481 $15,052 $6,230 $9,329 $7,429 $16,399 $4,244 $25,882 $13,763 $31,843 $2,650 $5,732

Annual Implementation Cost Amortization $187,175 $5,605 $11,282 $17,229 $8,292 $10,832 $9,881 $19,083 $5,637 $33,028 $16,147 $39,014 $3,423 $7,722

Total Annual Cost of Operations 3 $49,987,543 1,239,457 3,169,418 4,867,228 2,093,304 3,002,189 2,045,784 5,085,676 1,524,061 8,818,285 4,440,575 10,989,546 835,755 1,876,266

Profit $5,247,311 $130,109 $332,701 $510,924 $219,739 $315,147 $214,751 $533,855 $159,984 $925,676 $466,138 $1,153,599 $87,731 $196,956Operating Ratio 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5%

Total Operating Cost $55,234,855 $1,369,566 $3,502,120 $5,378,152 $2,313,043 $3,317,336 $2,260,535 $5,619,532 $1,684,045 $9,743,961 $4,906,712 $12,143,145 $923,487 $2,073,222

Contractor Pass-Through Costs

Interest Expense $1,306,716 $34,910 $82,380 $123,300 $54,949 $79,811 $50,721 $139,463 $39,995 $229,463 $118,989 $282,123 $22,042 $48,570Interest Expense on Implementation Cost $43,030 $1,141 $2,595 $4,291 $1,898 $2,489 $1,981 $4,382 $1,326 $7,739 $3,680 $9,180 $719 $1,608Contract Changes to Specific Agencies ($397,566) $0 $0 $0 $0 $0 ($416,528) $24,529 $0 $0 ($5,567) $0 $0 $0

BASE COMPENSATION $56,187,035 $1,405,617 $3,587,095 $5,505,743 $2,369,890 $3,399,636 $1,896,710 $5,787,906 $1,725,366 $9,981,163 $5,023,815 $12,434,448 $946,247 $2,123,400Incentives and Disincentives ($14,802) ($212) ($698) ($1,602) ($1,139) ($961) ($237) ($1,199) ($399) ($3,003) ($1,212) ($3,439) ($300) ($403)

Total Contractor Adjustments ($14,802) ($212) ($698) ($1,602) ($1,139) ($961) ($237) ($1,199) ($399) ($3,003) ($1,212) ($3,439) ($300) ($403)

TOTAL CONTRACTOR'S COMPENSATION $56,172,233 $1,405,405 $3,586,397 $5,504,141 $2,368,751 $3,398,675 $1,896,473 $5,786,707 $1,724,967 $9,978,160 $5,022,603 $12,431,009 $945,948 $2,122,997

Prior Year's Surplus/Shortfall to/from RecologyRevenue Reconciliation 2015 (Surplus)/Shortfall ($121,886) ($279,189) $1,077,592 $5,222 $3,928 ($90,181) ($505,776) $271,779 $10,259 ($217,044) ($101,381) ($50,651) ($35,586) ($210,858)Interest on 2015 (Surplus)/Shortfall $74,320 $0 $68,696 $0 $0 $0 $0 $5,624 $0 $0 $0 $0 $0 $0

Sub-Total ($47,566) ($279,189) $1,146,288 $5,222 $3,928 ($90,181) ($505,776) $277,403 $10,259 ($217,044) ($101,381) ($50,651) ($35,586) ($210,858)

TOTAL BALANCE TO CONTRACTOR 2017 $56,124,667 $1,126,216 $4,732,685 $5,509,363 $2,372,679 $3,308,494 $1,390,697 $6,064,110 $1,735,226 $9,761,116 $4,921,222 $12,380,358 $910,362 $1,912,139

TOTAL BALANCE TO CONTRACTOR - 2016 $54,311,100 $557,860 $4,181,830 $4,562,444 $2,311,315 $3,536,718 $1,511,109 $6,150,398 $1,663,680 $8,928,290 $4,691,004 $12,956,408 $979,947 $2,280,097Change in Contractor's Compensation $1,813,568 $568,356 $550,855 $946,919 $61,364 ($228,224) ($120,412) ($86,288) $71,546 $832,826 $230,218 ($576,050) ($69,585) ($367,958)

Percentage Change in Compensation 3.34% 101.88% 13.17% 20.75% 2.65% -6.45% -7.97% -1.40% 4.30% 9.33% 4.91% -4.45% -7.10% -16.14%

3 Costs do not reflect any Agency directed changes in service.

2017 Costs

BASE COLLECTION COSTS


Total Depreciation

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SECTION 4 2017 MEMBER AGENCY REVENUE REQUIREMENT OBLIGATIONS

4.A Components of Member Agency Revenue Requirement The compensation to Recology for 2017 collection service is only one of several components that make up the total collection cost reflected in the Member Agency’s solid waste collection rates. In addition to the Recology compensation for collection service, there are pass-through costs (discussed below) that are also included in the Member Agency’s Revenue Requirement (see Table 8 – Total Collection Rate Adjustment).

4.B Pass-Through Costs The pass-through costs are the following:

1. Disposal and processing expense – Disposal and processing expenses are based on projected tonnage and estimated 2017 tip fees at the Shoreway Environmental Center. Tonnage assumptions were provided to Member Agencies on July 25 with any comments due back on August 7.

2. Franchise fee – Franchise and other Member Agency fees and programs (e.g., WM Curbside, Door-to-Door HHW Collection Service). Fee assumptions used for 2017 were provided by Member Agencies on July 10.

3. Agency specific changes – Agency specific changes made in 2011 to the Franchise Agreements are noted and applied to each Member Agency. These changes were: Recology billing service for Menlo Park, credit for Hillsborough purchase of organics carts and reduced cost for back yard service, and a credit for San Carlos for City-purchased kitchen pails.

4.C Cost Variance from 2016 to 2017 The variance in Total Revenue Requirement from 2016 to 2017 is shown in Table 7 by cost category and the rate impact of each change. The 2017 total collection cost which includes the Recology compensation and other pass-through costs shows an average SBWMA rate reduction of 1.4%. This rate adjustment can be further broken down into the following individual components:

1. The 2017 projected revenue before 2017 rate increases of $98,861,313 is compared to the current estimated revenue requirement for 2016 (i.e., $98,919,750). This shows a base revenue surplus of $501,573 due to revenue exceeding the 2016 base total cost. Rates could decrease by 0.5% due to this surplus.

2. Recology Base Compensation decreased $1,100,469 or 1.9% from 2016 compensation. 3. Incentive payments owed to Recology for 2015 decreased by $41,405 or 155.6% from 2014. 4. The net compensation due to Recology decreased $1,117,186 from 2016 with an estimated rate

impact of a 2.0% decrease. 5. Disposal and Processing Fees at Shoreway increased by 10.6% or $10.00/ton for franchised tons

due to tip fee increases budgeted for 2017 with a rate impact of 2.8%. Tonnages are estimated to be the same as 2016.

6. Total Member Agency fees increased slightly from the prior year (i.e., 1.0% increase) and reflect feedback received from each Member Agency.

The variance summary for each Member Agency is contained in Appendix D and will vary in accordance with the specific circumstances for each Member Agency. The issues that may affect Member Agencies include: fluctuations in revenue, changes in Recology’s cost allocation, changes in Member Agency fees

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and changes in collected tons. For the details on operational statistics and compensation by Member Agency, including year over year changes, please refer to Part II section 1 of Recology’s Application.

Table 7 – Recology and Other Pass-Through Costs Variance and Rate Adjustment

2016 Estimated 2017 Estimated2017 vs

2016 Change2017 vs 2016 %

% Rate Impact

98,861,313$

Projected Collection Revenue (After Rate Increase) 98,919,750$

2016 Base Revenue Surplus / <Shortfall> $501,573 -0.5%

Total Contractor's CompensationBase Compensation 57,685,069$ 56,584,600$ (1,100,469)$ -1.9% -1.1%

Agency Specific Contract Changes (422,253)$ (397,566)$ 24,687$ -5.8% 0.0%

Incentives / Disincentives 26,604$ (14,802)$ (41,405)$ -155.6% 0.0%

Total Contractor's Compensation 57,289,420$ 56,172,233$ (1,117,186)$ -2.0% -1.1%

Pass-Through CostsDisposal & Processing Fees 26,633,767$ 29,450,676$ 2,816,909$ 10.6% 2.8%

Agency Franchise & Other Fees 14,436,554$ 14,577,002$ 140,449$ 1.0% 0.1%

Subtotal Pass-Through Costs 41,070,321$ 44,027,679$ 2,957,358$ 7.2% 3.0%

TOTAL REVENUE REQUIREMENT 98,359,740$ 100,199,912$ 1,840,172$ 1.9% 1.9%

2016 Estimated Surplus / <Shortfall> 560,010$

2017 Estimated Surplus / <Shortfall> (1,338,598)$

Required Revenue Adjustment 1.4% 1.4%

SBWMA TOTAL

All numbers above are current estimates except 2016 Contractor's (Recology) Compensation which is final and 2017 Contractor's Compensation which is subject to Board Approval.

COLLECTION RATE VARIANCE ANALYSIS estimated 8/12/2016

Estimated Revenue (Before Rate Increase)

2017 Variance

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4.D Total Recommended Rate Adjustment The SBWMA is responsible for compiling all the components that make up the recommended rate adjustment for 2017 and are summarized in Table 8. The amounts shown in Table 8 reflect estimated balances at December 31, 2017 before any 2017 Member Agency solid waste rate adjustments are applied. The purpose of this table is to assist Member Agencies with determining their rate adjustment(s) for 2017. The recommended rate adjustment is derived from comparing the 2017 base revenue at 2016 rates (i.e., $98,861,313) on line A.1 to the total revenue impact on line F.1 (i.e., $97,858,710), which in total results in a surplus balance of $1,002,603 on line F.2 and a 1.0% recommended rate reduction (line F.3). The following provides an explanation of the sections in Table 8.

Section A – This section provides the estimated 2017 Collection Revenue using 2016 rates (A.1), the 2017 Total Recology Compensation (A.2) and Pass-Through Expenses (A.6) used to determine the 2017 Revenue Requirement (A.7), the estimated 2017 Surplus/Shortfall balance with Recology (A.8), Agency Fees on shortfalls (A.9), and the Rate Adjustment Percentage (A.10). The total SBWMA rate adjustment is positive 1.5%.

Section B – This section provides the results of the 2015 Recology Revenue Reconciliation

surplus/shortfall that must be added to the 2017 rate adjustment. There is no associated rate

adjustment in total, but each Member Agency has an adjustment.

Section C – This section provides the 2017 Required Rate Adjustment which is the sum of sections A and B. The total SBWMA rate adjustment is positive 1.5%.

Section D – This section provides the “2016 Estimated Surplus/Shortfall” balance with Recology (D.1) and the associated Agency Fees on this amount (D.2). Also in this section is the final 2014 surplus/shortfall (D.3) which would have been included in the 2016 rate adjustment and the total estimated surplus for all SBWMA Member Agencies which totals $3,523,537 (D.4). The 2016 Revenue Reconciliation will be finalized in 2017, similar to how the 2015 Revenue Reconciliation was finalized in 2016.

Section E – This section provides the amount of year-to-date (YTD) surplus balances (E.1) which Member Agencies have requested Recology to refund (i.e., Atherton, Burlingame, Redwood City and West Bay Sanitary District), and the amount of YTD shortfall payments (E.2) which Member Agencies (i.e., Menlo Park) have paid to Recology. It also includes an adjustment for Belmont’s unique agreement with Recology.

Section F – This section provides the “Total Rate Adjustment” and the cumulative surplus/shortfall of $1,002,603 (F.2) which includes the result of Sections D and E. The total SBWMA recommended rate adjustment is a decrease of 1.0% (F.3). The Member Agencies are obligated to set rates to generate the revenue needed as denoted in Section F per the MOU between Recology and SBWMA. Agencies that set rates lower than delineated in Section F and experience a shortfall in revenue are liable for future interest charges from Recology.

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2017 Total Atherton Belmont Burlingame East Palo Alto Foster City Hillsborough Menlo ParkA. 2017 RATE YEARA.1 98,861,313$ 3,097,872$ 6,516,852$ 10,655,270$ 4,537,544$ 5,559,729$ 3,134,788$ 10,164,462$

A.2 56,172,233$ 1,405,405$ 3,586,397$ 5,504,141$ 2,368,751$ 3,398,675$ 1,896,473$ 5,786,707$ A.3 Pass-Through Costs A.4 Disposal & Processing Fees 29,450,676$ 1,012,566$ 1,548,178$ 3,341,208$ 1,680,836$ 1,727,557$ 757,436$ 3,123,638$ A.5 Agency Franchise Fees 14,577,002$ 330,949$ 1,762,324$ 1,954,000$ 868,942$ 407,275$ 305,190$ 1,697,059$ A.6 Total Pass-Through Costs 44,027,679$ 1,343,515$ 3,310,502$ 5,295,208$ 2,549,778$ 2,134,831$ 1,062,626$ 4,820,697$

A.7 2017 REVENUE REQUIREMENT 100,199,912$ 2,748,920$ 6,896,899$ 10,799,349$ 4,918,529$ 5,533,506$ 2,959,099$ 10,607,404$ A.8 Surplus/(Shortfall) estimated (1,338,599)$ 348,951$ (380,047)$ (144,079)$ (380,984)$ 26,223$ 175,689$ (442,942)$ A.9 Agency Fees on A.8 (161,296)$ $0 (23,053)$ (36,336)$ $0 $0 (57,582)$ A.10 Rate Adjustment Percentage 1.5% -11.3% 5.8% 1.6% 9.2% -0.5% -5.6% 4.9%

(See Rate Variance Analysis for detail.)

B. 2015 Final Surplus/(Shortfall)B.1 Surplus/<Shortfall> , incl Interest 47,566$ 279,189$ (1,146,288)$ (5,222)$ (3,928)$ 90,181$ 505,776$ (277,403)$ B.2 Agency Fees on B.1 (37,785)$ $0 (836)$ (375)$ $0 $0 (36,062)$ B.3 Rate Adjustment Percentage 0.0% -9.0% 17.6% 0.1% 0.1% -1.6% -16.1% 3.1%

C.C.1 Cumulative Revenue Requirement (A7-B1-B2)) 100,351,428$ 2,469,731$ 8,043,187$ 10,828,459$ 4,959,168$ 5,443,325$ 2,453,323$ 10,978,452$ C.2 SubTotal Surplus/(Shortfall) (A8+A9+B1+B2) (1,490,115)$ 628,140$ (1,526,335)$ (173,189)$ (421,623)$ 116,404$ 681,465$ (813,990)$

C.3 Rate Adjustment Percentage 1.5% -20.3% 1.6% 9.3% -2.1% -21.7% 8.0%

D. 2016 Estimated Surplus/(Shortfall)D.1 Surplus/(Shortfall), 2016 estimated 560,010$ 391,259$ (363,090)$ (87,888)$ (168,006)$ 209,322$ 182,500$ (308,685)$ D.2 Agency Fees on D.1 (70,215)$ $0 (14,062)$ (16,024)$ $0 $0 (40,129)$ D.3 Surplus/(Shortfall), 2014 FINAL (incl. Interest) 3,033,742$ 895,936$ (481,671)$ 1,223,751$ 81,081$ (165,807)$ 448,106$ (176,439)$ D.4 Net 2014 / 2016 Surplus/(Shortfall) 3,523,537$ 1,287,195$ (844,761)$ 1,121,801$ (102,948)$ 43,515$ 630,606$ (525,253)$ D.5 Rate Adjustment Percentage -3.6% -41.6% 13.0% -10.5% 2.3% -0.8% -20.1% 5.2%

E.E.1 Adjustments, refund of surplus balance, etc. (3,761,914)$ (1,175,125)$ (1,223,751)$ E.2 Shortfall Payments 2,731,095$ 2,371,095$ 360,000$

F. TOTAL RATE IMPACT (F+G)F.1 TOTAL REVENUE ADJUSTMENT 97,858,710$ 2,357,662$ 6,516,852$ 10,930,410$ 5,062,116$ 5,399,810$ 1,822,717$ 11,143,705$ F.2 Total Surplus/(Shortfall) w/Recology 1,002,603$ 740,210$ (0)$ (275,139)$ (524,572)$ 159,919$ 1,312,071$ (979,243)$ F.3 Total Rate Adjustment Percentage -1.0% -23.9% 0.0% 2.6% 11.6% -2.9% -41.9% 9.6%

2017 Collection Revenue @ 2016 Rates

Total Recology Compensation

2017 REQUIRED REVENUE ADJUSTMENT

SBWMATOTAL COLLECTION RATE ADJUSTMENT BY MEMBER AGENCY

2017 Rate Year

Adjustments

Table 8 – Total Collection Rate Adjustment (Part 1 of 2)

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North Fair Oaks Redwood City San Carlos San Mateo West BayUnincorporated County - Total

A. 2017 RATE YEARA.1 2,716,649$ 18,269,382$ 8,121,499$ 21,404,288$ 1,477,604$ 3,205,374$ A.2 1,724,967$ 9,978,160$ 5,022,603$ 12,431,009$ 945,948$ 2,122,997$ A.3 Pass-Through Costs A.4 Disposal & Processing Fees 898,175$ 5,748,005$ 2,129,785$ 6,222,719$ 411,227$ 849,347$ A.5 Agency Franchise Fees 145,874$ 2,642,095$ 1,088,871$ 3,096,525$ 96,594$ 181,305$ A.6 Total Pass-Through Costs 1,044,049$ 8,390,100$ 3,218,656$ 9,319,243$ 507,821$ 1,030,652$

A.7 2017 REVENUE REQUIREMENT 2,769,016$ 18,368,260$ 8,241,259$ 21,750,252$ 1,453,769$ 3,153,649$ A.8 Surplus/(Shortfall) estimated (52,367)$ (98,878)$ (119,760)$ (345,964)$ 23,834$ 51,725$ A.9 Agency Fees on A.8 (2,618)$ (13,497)$ (14,371)$ (13,839)$ $0 $0A.10 Rate Adjustment Percentage 2.0% 0.6% 1.7% 1.7% -1.6% -1.6%

(See Rate Variance Analysis for detail.)

B. 2015 Final Surplus/(Shortfall)B.1 Subtotal Year Surplus/<Shortfall> , incl Interest (10,259)$ 217,044$ 101,381$ 50,651$ 35,586$ 210,858$ B.2 Agency Fees on B.1 (513)$ $0 $0 $0 $0 $0B.3 Rate Adjustment Percentage 0.4% -1.2% -1.2% -0.2% -2.4% -6.6%

C.C.1 Cumulative Revenue Requirement (A7-B1-B2)) 2,782,407$ 18,164,713$ 8,154,249$ 21,713,440$ 1,418,183$ 2,942,791$ C.2 SubTotal Surplus/(Shortfall) (A8+A9+B1+B2) (65,757)$ 104,670$ (32,750)$ (309,152)$ 59,420$ 262,583$ C.3 Rate Adjustment Percentage 2.4% -0.6% 0.4% 1.4% -4.0% -8.2%

D. 2016 Estimated Surplus/(Shortfall)D.1 Surplus/(Shortfall), 2016 estimated 5,322$ 233,690$ 131,160$ 200,349$ 294$ 133,782$ D.2 Agency Fees on D.1 $0 $0 $0 $0 $0 $0D.3 Surplus/(Shortfall), 2014 FINAL (incl. Interest) 83,311$ 1,294,907$ 328,781$ (378,002)$ 32,545$ (152,757)$ D.4 Net 2014 / 2016 Surplus/(Shortfall) 88,633$ 1,528,597$ 459,941$ (177,653)$ 32,839$ (18,975)$ D.5 Rate Adjustment Percentage -3.3% -8.4% -5.7% 0.8% -2.2% 0.6%

E.E.1 Adjustments, refund of surplus balance, etc. (1,294,907)$ (68,131)$ E.2 Shortfall Payment

F. TOTAL RATE IMPACT (F+G)F.1 TOTAL REVENUE ADJUSTMENT 2,693,774$ 17,931,022$ 7,694,308$ 21,891,093$ 1,453,475$ 2,961,766$ F.2 Total Year Surplus/(Shortfall) 22,875$ 338,360$ 427,191$ (486,805)$ 24,129$ 243,608$ F.3 Total Rate Adjustment Percentage -0.8% -1.9% -5.3% 2.3% -1.6% -7.6%

Total Recology Compensation

SBWMATOTAL COLLECTION RATE ADJUSTMENT BY MEMBER AGENCY

Adjustments

2017 Rate Year

2017 REQUIRED REVENUE ADJUSTMENT

2017 Collection Revenue @ 2016 Rates

Table 8 – Total Collection Rate Adjustment (Part 2 of 2)

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SECTION 5 CONCLUSION The SBWMA’s review of the 2017 Recology Compensation Application results in the recommendation to decrease the 2017 compensation to Recology (i.e., Total Contractor’s Compensation) by 2.0% (i.e., $1,117,186) from the approved 2016 compensation, as provided in Tables 2, 3, 5, 6, 7 and 8 of this Final Report, and Tables A, B and E in Recology’s Application. The Member Agency snapshot report prepared by the SBWMA, and updated by Recology annually, can be found in the Recology Application as Appendix 3. Each snapshot report includes six tables for each Member Agency including: 1) a three year summary of major statistics used to allocate costs; 2) detailed comparison of Recology costs for 2017 vs. 2016; 3) detailed cost comparison of 2017 vs. 2016 by Recology service sectors; and, 4) three tables showing the actual cost allocation process by service sector and the seventeen lines of business.

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APPENDIX A

RECOLOGY 2017 COMPENSATION APPLICATION ISSUED ON

AUGUST 10, 2016 REFLECTING REDLINE CHANGES FROM THE

VERSIONS SUBMITTED ON JUNE 15, 2016 AND JULY 22, 2016

(PART I NARRATIVE SECTIONS 1 – 4 ONLY)

SBWMA FINAL REPORT REVIEWING THE RECOLOGY 2017


September 15, 2016

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i

Table of Contents – Part 1

EXECUTIVE SUMMARY .......................................................................................................................... 1 1. CALCULATION OF CONTRACTOR’S COMPENSATION FOR THE 2017 RATE YEAR AND VARIANCE ANALYSIS ................................................................................................................... 5

1.1. Annual Adjustment To Contractor’s Base Compensation ............................................ 5

1.1.1. OVERVIEW OF ANNUAL CONTRACTOR’S COMPENSATION ADJUSTMENT .................................................... 5

1.1.2. TOTAL CONTRACTOR’S COMPENSATION ADJUSTMENT ........................................................................... 6

1.1.3. COST ADJUSTMENT PROCESS ............................................................................................................. 8

1.1.4. DIRECT LABOR-RELATED COSTS ........................................................................................................ 10

1.1.5. DIRECT FUEL COSTS ....................................................................................................................... 11

1.1.6. OTHER DIRECT COSTS ..................................................................................................................... 11

1.1.7. DEPRECIATION ON COLLECTION VEHICLES, CONTAINERS AND EQUIPMENT .............................................. 11

1.1.8. INDIRECT COSTS EXCLUDING DEPRECIATION ....................................................................................... 11

1.1.9. ANNUAL IMPLEMENTATION COST AMORTIZATION ............................................................................... 12

1.1.10. PROFIT ....................................................................................................................................... 12

1.1.11. CONTRACTOR PASS-THROUGH COSTS ............................................................................................. 12

1.2. Specific Issues For 2017 .......................................................................................................... 14

1.2.1. PERFORMANCE INCENTIVES AND DISINCENTIVES ................................................................................. 14

1.3. Member Agency Specific Issues

1.3.1. TOWN OF HILLSBOROUGH BACKYARD SERVICE ADJUSTMENT ................................................................ 16

1.3.2. CITY OF SAN CARLOS KITCHEN PAIL ADJUSTMENT ............................................................................... 16

1.3.3. CITY OF MENLO PARK BILLING ADJUSTMENT ...................................................................................... 16

1.3.4. TOWN OF HILLSBOROUGH USED GREEN WASTE CARTS ADJUSTMENT .................................................... 16

1.3.5. CITY OF BELMONT UNIQUE FRANCHISE AGREEMENT ........................................................................... 17

2. ANNUAL REVENUE RECONCILIATION .................................................................................... 18

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ii

2.1. Revenue Reconciliation for 2015 to Account for Any Shortfall or Surplus in Compensation Paid to Recology ................................................................................................... 18

2.2. Interest Associated with a Shortfall or Surplus in Required Revenues .................. 20

3. ALLOCATION OF COSTS TO THE MEMBER AGENCIES .................................................... 23 3.1. Explanation of Cost Allocation Process .......................................................................... 23

3.2. Cost Allocation Variances For Member Agencies ......................................................... 27

3.3. Individual Member Agency Variances .............................................................................. 28

3.4. Operational Information for Cost Allocation ................................................................... 29

3.4.1. ANNUAL ROUTE HOURS BY LINE OF BUSINESS .................................................................................... 29

3.4.2. ANNUAL ROUTE LABOR HOURS BY LINE OF BUSINESS .......................................................................... 30

3.4.3. NUMBER OF CONTAINERS IN SERVICE BY LINE OF BUSINESS .................................................................. 30

3.4.4. NUMBER OF ACCOUNTS BY LINE OF BUSINESS .................................................................................... 30

3.5. Description of Other Operational Information ................................................................ 30

4. COST ADJUSTMENT CALCULATIONS IN TOTAL AND BY MEMBER AGENCY ............ 31

APPENDICES .......................................................................................................................... 33 APPENDIX 1. SUMMARY SERVICE METRICS (ATT. N – J) ............................................................ 33

APPENDIX 1-1. METRICS SUMMARY USED FOR COST ALLOCATION ................................................................. 33

APPENDIX 1-2. ANNUAL ROUTE LABOR HOURS BY LINE OF BUSINESS .............................................................. 34

APPENDIX 1-3. ANNUAL ROUTE HOURS BY LINE OF BUSINESS ........................................................................ 35

APPENDIX 1-4. NUMBER OF CONTAINERS IN SERVICE BY LINE OF BUSINESS ...................................................... 36

APPENDIX 1-5. NUMBER OF ACCOUNTS BY LINE OF BUSINESS ....................................................................... 37

APPENDIX 2. TOTAL SBWMA COST ADJUSTMENT PER ATTACHMENT N SUMMARY ....................38

APPENDIX 2-1. CONTRACTOR’S TOTAL COMPENSATION DETAIL ...................................................................... 38

APPENDIX 2-2. CONTRACTOR’S COMPENSATION BY SERVICE SECTOR .............................................................. 39

APPENDIX 2-3. TOTAL CONTRACTOR’S COMPENSATION BY MEMBER AGENCY .................................................. 40

APPENDIX 2-4. SINGLE-FAMILY DWELLING COST ALLOCATION ....................................................................... 41

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iii

APPENDIX 2-5. COMMERCIAL & MULTI-FAMILY DWELLING COST ALLOCATION ................................................ 42

APPENDIX 2-6. MEMBER AGENCY FACILITIES COST ALLOCATION ..................................................................... 43

APPENDIX 3. COST ADJUSTMENT AND SNAPSHOT FOR EACH MEMBER AGENCY .........................44

APPENDIX 3-1. CONTRACTOR’S BASE COMPENSATION, CONTRACTOR’S COMPENSATION BY SERVICE SECTOR,

Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – TOWN OF

ATHERTON ............................................................................................................................................. 44


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot –

BELMONT ............................................................................................................................................... 50



BURLINGAME .......................................................................................................................................... 56


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – EAST

PALO ALTO ............................................................................................................................................. 62


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – FOSTER

CITY ...................................................................................................................................................... 68



HILLSBOROUGH ....................................................................................................................................... 74


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – MENLO

PARK ..................................................................................................................................................... 80



REDWOOD CITY ....................................................................................................................................... 86


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – SAN

CARLOS .................................................................................................................................................. 92

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iv


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – SAN

MATEO .................................................................................................................................................. 98


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – NORTH

FAIR OAKS ............................................................................................................................................ 104


Allocated Costs (SFD, Commercial & MFD, Agency Facilities), & Member Agency Snapshot – WEST

BAY SANITARY DISTRICT .......................................................................................................................... 110



UNINCORPORATED COUNTY .................................................................................................................... 116

APPENDIX 4 – AUDITED FINANCIAL STATEMENTS AND COMPILATION .......................................... 122

.

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Recology San Mateo County

Rate Year 2017 Application for Contractor’s Compensation Adjustment June 15, 2016

Executive Summary Page 1 of 4

EXECUTIVE SUMMARY Overview of the Application

Recology San Mateo County (Recology) is pleased to submit our 2017 Application for a Contractor’s Compensation Adjustment per Section 11.04 of the Franchise Agreements with the twelve South Bayside Waste Management Authority (SBWMA) Member Agencies. The format of this Application is similar to the prior year submittals, which had been modified, with the assistance of the SBWMA and feedback from Board members, in an effort to provide a more user friendly and easier to understand Application.

Prior year feedback received identified that the Application would be best presented in two parts. Part I is made up of the report summarizing the components of the Calculation of Contractor’s Compensation, the supporting tables and charts and describing identified cost allocation variances. Part 2 is made up of the source files and contains the data used to create the Application as well as other specific data identified in Article 11 of the Franchise Agreement as required information needed to be included in the Application.

Section 1 of this Application (Calculation of Contractor’s Compensation for the 2017 Rate Year and Variance Analysis) explains the first step in calculating the annual adjustment to Recology’s compensation. This section provides the results of our calculations and explains how the base compensation is adjusted using the indices prescribed in the Franchise Agreements. Also included are explanations on special issues such as Incentive and Disincentive payments and sections pertaining to several Member Agencies that have unique cost adjustments.

Section 2 (Annual 2015 Revenue Reconciliation) details the annual process to determine what net revenue Recology retained in compensation versus the amount actually owed to the company. This reconciliation of revenues billed by Recology calculates the surplus or shortfall due to/from each Member Agency for 2015.

Section 3 (Allocation of Costs to the Member Agencies) explains the second step in the compensation adjustment process which is to allocate contractor’s compensation across all Member Agencies equitably as prescribed in the Franchise Agreements. This section provides the details of the operational metrics used to allocate costs, the results of the cost allocation and explanations for jurisdictions with allocation changes of 3% or more.

Section 4 (Cost Adjustment Calculations in Total and by Member Agency) consists of several Appendices which provide statistical tables and various cost adjustment tables. These tables provide a summary of the detailed calculations and steps taken to derive the compensation adjustment for 2017 by Member Agency.

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Results of Index and Non-Indexed Based Cost Adjustments (Section 1) Section 1 provides the results of the index and non-index based cost adjustments for the ten cost categories which ranged from -38.3% (i.e., Fuel) to a 1.8% increase (i.e., Wages for CBAs). The changes for the ten cost categories can be seen on Table C, page 9. The total adjustment for index-based cost adjustments is a 1.4% decrease in compensation before interest and incentives/disincentives adjustments. Specific Issues for 2017 (Section 1) Section 1.2 describes the specific issues for 2017 which include a calculation of performance incentives and disincentives. The net performance disincentive payment is calculated at $11,70614,802. The Member Agency specific issues are discussed in detail in Section 1.3. Results of the 2015 Revenue Reconciliation (Section 2) Recology issued its 2015 Revenue Reconciliation Report to the SBWMA and its Member Agencies on March 31, 2016, per Section 11.03 of the Franchise Agreement(s). The Revenue Reconciliation compares the amount owed to Recology to the amount paid to Recology by Member Agency. The result was a surplusshortfall due from Recology of $121,8869,328 in 2015 before adjustment for interest. The impact across the Member Agencies ranged from shortfalls in the Cities of Belmont of $1,077,592 and Menlo Park of $271,77988,218 to a surplus in the Town of Hillsborough of $505,776. The following table provides the results of the 2015 Revenue Reconciliation. Please note that the detailed Revenue Reconciliation information is provided in Table H on page 22.

2015 Surplus or Interest Due

Member Agency (Shortfall) (to)/from Recology Total

Atherton $0 $0 $0

Belmont ($1,077,592) ($68,696) ($1,146,288)

Burlingame ($5,222) $0 ($5,222)

East Palo Alto ($3,928) $0 ($3,928)

Foster City $90,181 $0 $90,181

Hillsborough $505,776 $0 $505,776

Menlo Park ($88,218) ($5,624) ($93,842)

North Fair Oaks ($10,259) $0 ($10,259)

Redwood City $217,044 $0 $217,044

San Carlos $101,381 $0 $101,381

City of San Mateo $50,651 $0 $50,651

West Bay Sanitary District $0 $0 $0

County of San Mateo $210,858 $0 $210,858

Total ($9,328) ($74,320) ($83,648)

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Results of the 2017 Cost Allocation (Section 3)

Section 3 provides the details of the allocation of total Contractor collection costs to the Member Agencies. This cost allocation process resulted in year-over-year variances (Variance % column) ranging from an increase in Foster City of 2.97% ($97,958) to a decrease in West Bay Sanitary District of 4.61% (-$45,732). It is important to note that each Member Agency total allocation percentage change (Difference % column) changed by less than three-tenths of 1 percent from the prior year. The biggest factor of the cost allocation is driver hours attributed to each Member Agency which can fluctuate for a variety of reasons. The following table provides the percentage and dollar variance in the allocation of total compensation for 2017 compared to 2016.

2017 Total Adjustment to Contractor’s Compensation (Section 4)

The calculated adjustment for the Total Contractor’s Compensation for Rate Year 2017 decreased by $1,114,090117,186 or -1.92.0% compared to the compensation approved for 2016. This total contractor’s compensation adjustment for the SBWMA service area as a whole is summarized in the table on the next page.

2016 2017 Difference % Variance % Difference $Atherton 2.52% 2.48% -0.03% -1.33% (18,877)$ Belmont 6.41% 6.34% -0.07% -1.05% (38,056)$ Burlingame 10.01% 9.73% -0.28% -2.84% (160,910)$ East Palo Alto 4.14% 4.19% 0.05% 1.16% 27,141$ Foster City 5.83% 6.01% 0.17% 2.97% 97,958$ Hillsborough 4.16% 4.09% -0.07% -1.66% (39,008)$ Menlo Park 10.30% 10.19% -0.11% -1.11% (64,777)$ North Fair Oaks 3.02% 3.05% 0.03% 0.83% 14,190$ Redwood City 17.70% 17.64% -0.06% -0.32% (31,622)$ San Carlos 8.70% 8.89% 0.19% 2.16% 106,336$ San Mateo 21.77% 21.97% 0.20% 0.93% 114,357$ West Bay Sanitary 1.75% 1.67% -0.08% -4.61% (45,732)$ County of San Mateo 3.68% 3.75% 0.07% 1.87% 38,999$ Totals 100% 100% 0.00% N/A 0$

Note: Dollar difference amounts in parentheses are a reduction in total cost allocation. Year 2016 and 2017 percentages are shown rounded to two decimal places.

Percentage of Total Contractor’s CompensationTotal Cost Allocation

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This table provides the year-over-year comparison of the percentage change in total Contractor’s Compensation due to Recology for collection services. These figures do not include disposal and processing costs, franchise fees or the annual Revenue Reconciliation Surplus/Shortfall.

Compensation - 2016

Compensation - 2017 Change % Change

Total Annual Cost of Operations 50,681,506 49,987,543 (693,963) -1.4%

Profit 5,320,158 5,247,311 (72,847) -1.4%

Operating Ratio 90.5% 90.5%

Total Operating Costs 56,001,664 55,234,855 (766,810) -1.4%

Total Contractor Pass-Through Costs 1,261,152 952,180 (308,971) -24.5%

BASE CONTRACTOR'S COMPENSATION 57,262,816 56,187,035 (1,075,781) -1.9%

Other AdjustmentsIncentive/Disincentive Payments 26,604 (14,802) (41,405)

TOTAL CONTRACTOR'S COMPENSATION 57,289,420 56,172,233 (1,117,186) -2.0%

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Calculation of Contractor’s Compensation Page 1 of 14

1. CALCULATION OF CONTRACTOR’S COMPENSATION FOR THE 2017 RATE YEAR AND VARIANCE ANALYSIS

1.1. ANNUAL ADJUSTMENT TO CONTRACTOR’S BASE COMPENSATION

The process to adjust Recology’s compensation entails several steps which are explained in detail in this report. The first step is to adjust the prior year’s costs by the various indices prescribed in the Franchise Agreements (refer to section 1.1.3.). The second step is to add specific adjustments to the Base Contractor’s Compensation. These include Incentive/Disincentive payment owed to/from Recology and other specific adjustments that may arise in the normal course of this contract. The final step is the calculation of the Surplus/Shortfall due to/from Recology for the prior year’s compensation. Since this is a revenue issue and not a cost issue, it is dealt with separately in this report (refer to Section 2).

1.1.1. Overview of Annual Contractor’s Compensation Adjustment

The annual compensation adjustment process is prescribed in the Member Agency Franchise Agreements in Article 11 (Contractor’s Compensation, Pass-Through Costs and Rates), Attachment K (Contractor’s Compensation and Rate Setting Process) and Attachment N (Contractor’s Compensation and Rate Setting Statistics). Article 11 provides an overview of the compensation methodology. Attachment K explains the detailed process and specific rules used to adjust the various cost categories and the allocation of costs to the Member Agencies. The tables that comprise Attachment N are used to calculate the specific cost adjustments prescribed in Attachment K. Therefore, the process to annually adjust Contractor’s Compensation is implemented by following the provisions in Article 11, Attachment K and Attachment N.

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1.1.2. Total Contractor’s Compensation Adjustment

The calculated adjustment for the Total Contractor’s Compensation for Rate Year 2017 decreased by $1,114,090 (-1.9117,186 (-2.0%), to $56,175,329172,233 compared to the compensation approved for 2016. This total cost adjustment for the SBWMA service area as a whole is summarized in

Table BA below.

Table A

The adjusted Total Contractor’s Compensation for each Agency is provided in Table B on the next page.

Compensation - 2016



Profit 5,320,158 5,247,311 (72,847) -1.4%







Compensation - 2016



Profit 5,320,158 5,247,311 (72,847) -1.4%







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Please note that the figures in the above Table A

and Table B do not include disposal and processing costs, franchise fees or the annual Revenue Reconciliation Surplus/Shortfall. Table A (above) and Table B (on the next page) only pertain to Recology’s Base Compensation.

Compensation - 2016



Profit 5,320,158 5,247,311 (72,847) -1.4%







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Table B

2017 Total Atherton Belmont Burlingame E Palo Alto Foster City Hillsborough Menlo ParkNorth Fair

Oaks Redwood City San Carlos San Mateo West BayUnincorporated

CountyAnnual Cost of Operations

Wages for CBAs $16,758,609 $420,867 $1,078,866 $1,692,726 $666,237 $991,125 $723,462 $1,650,604 $523,679 $2,941,239 $1,444,583 $3,733,043 $275,629 $616,549Benefits for CBAs $6,669,971 $169,393 $429,051 $660,417 $267,203 $393,702 $292,655 $654,482 $210,298 $1,173,349 $573,498 $1,485,021 $111,152 $249,749Payroll Taxes $1,394,316 $35,016 $89,762 $140,835 $55,431 $82,462 $60,192 $137,330 $43,570 $244,711 $120,189 $310,589 $22,932 $51,297Workers Compensation Insurance $1,471,775 $36,961 $94,748 $148,658 $58,510 $87,043 $63,536 $144,959 $45,991 $258,305 $126,866 $327,844 $24,206 $54,147

Total Direct Labor Related-Costs $26,294,671 $662,238 $1,692,426 $2,642,636 $1,047,381 $1,554,332 $1,139,844 $2,587,375 $823,538 $4,617,605 $2,265,136 $5,856,497 $433,920 $971,742

Direct Fuel Costs $2,066,892 $56,537 $129,454 $191,387 $86,390 $123,177 $99,168 $216,105 $63,520 $359,861 $185,197 $441,601 $35,909 $78,588

Other Direct Costs $2,178,164 $57,439 $136,843 $208,436 $90,102 $129,377 $100,097 $229,317 $66,207 $379,923 $195,007 $468,399 $36,697 $80,322

Depreciation - Collection Vehicles $4,016,792 $113,691 $249,166 $366,182 $166,396 $242,372 $194,288 $436,745 $120,140 $696,311 $365,299 $842,774 $69,867 $153,560 - Containers $1,882,550 $58,597 $123,181 $163,868 $84,106 $117,380 $59,190 $181,675 $58,429 $335,090 $169,003 $413,342 $36,548 $82,141

$5,899,342 172,288 372,347 530,050 250,502 359,752 253,478 618,420 178,569 1,031,401 534,302 1,256,116 106,415 235,701

Allocated Indirect CostsGeneral and Administrative $7,267,914 $113,573 $446,104 $685,412 $358,017 $449,850 $170,253 $757,727 $214,087 $1,357,211 $690,854 $1,636,994 $114,123 $273,710Operations $1,787,232 $52,035 $111,906 $174,489 $71,975 $108,800 $87,497 $192,275 $50,430 $301,964 $162,454 $374,666 $31,362 $67,378Vehicle Maintenance $3,106,609 $90,448 $194,517 $303,301 $125,109 $189,119 $152,090 $334,217 $87,658 $524,882 $282,381 $651,254 $54,514 $117,118Container Maintenance $1,047,093 $24,878 $65,058 $99,236 $49,306 $67,621 $26,046 $114,757 $30,172 $186,529 $95,334 $233,163 $16,742 $38,252

Total Allocated Indirect Costs $13,208,848 $280,934 $817,585 $1,262,438 $604,408 $815,390 $435,885 $1,398,977 $382,346 $2,370,585 $1,231,023 $2,896,077 $216,742 $496,459

Total Allocated Indirect Depreciation Costs $152,451 $4,417 $9,481 $15,052 $6,230 $9,329 $7,429 $16,399 $4,244 $25,882 $13,763 $31,843 $2,650 $5,732

Annual Implementation Cost Amortization $187,175 $5,605 $11,282 $17,229 $8,292 $10,832 $9,881 $19,083 $5,637 $33,028 $16,147 $39,014 $3,423 $7,722

Total Annual Cost of Operations 3 $49,987,543 1,239,457 3,169,418 4,867,228 2,093,304 3,002,189 2,045,784 5,085,676 1,524,061 8,818,285 4,440,575 10,989,546 835,755 1,876,266

Profit $5,247,311 $130,109 $332,701 $510,924 $219,739 $315,147 $214,751 $533,855 $159,984 $925,676 $466,138 $1,153,599 $87,731 $196,956Operating Ratio 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5% 90.5%

Total Operating Cost $55,234,855 $1,369,566 $3,502,120 $5,378,152 $2,313,043 $3,317,336 $2,260,535 $5,619,532 $1,684,045 $9,743,961 $4,906,712 $12,143,145 $923,487 $2,073,222


Interest Expense $1,306,716 $34,910 $82,380 $123,300 $54,949 $79,811 $50,721 $139,463 $39,995 $229,463 $118,989 $282,123 $22,042 $48,570Interest Expense on Implementation Cost $43,030 $1,141 $2,595 $4,291 $1,898 $2,489 $1,981 $4,382 $1,326 $7,739 $3,680 $9,180 $719 $1,608Contract Changes to Specific Agencies ($397,566) $0 $0 $0 $0 $0 ($416,528) $24,529 $0 $0 ($5,567) $0 $0 $0

BASE COMPENSATION $56,187,035 $1,405,617 $3,587,095 $5,505,743 $2,369,890 $3,399,636 $1,896,710 $5,787,906 $1,725,366 $9,981,163 $5,023,815 $12,434,448 $946,247 $2,123,400Incentives and Disincentives ($14,802) ($212) ($698) ($1,602) ($1,139) ($961) ($237) ($1,199) ($399) ($3,003) ($1,212) ($3,439) ($300) ($403)

Total Contractor Adjustments ($14,802) ($212) ($698) ($1,602) ($1,139) ($961) ($237) ($1,199) ($399) ($3,003) ($1,212) ($3,439) ($300) ($403)

TOTAL CONTRACTOR'S COMPENSATION $56,172,233 $1,405,405 $3,586,397 $5,504,141 $2,368,751 $3,398,675 $1,896,473 $5,786,707 $1,724,967 $9,978,160 $5,022,603 $12,431,009 $945,948 $2,122,997

2017 Costs

BASE COLLECTION COSTS


Total Depreciation

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1.1.3. Cost Adjustment Process The 2017 Recology Compensation Application adjusts 2016 costs by applying the year-over-year changes in several United States Department of Labor indices. Additional compensation adjustments have been made for the 2015 Revenue Reconciliation Surplus/Shortfall, interest payments due to/from Recology and 2015 performance incentive/disincentive payments. In addition, several Agencies have specific adjustments (i.e., the Town of Hillsborough, the City of San Carlos, and the City of Menlo Park – see Section 1.3 for more information on this).

The percentage increase and explanation of the various adjustments by cost categories used as the basis for the 2017 adjustment to Recology’s compensation are provided in Table C on the following page.

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Table C

Cost CategoryCost

Adjustment Explanation

Worker’s Compensation Insurance (Drivers)

1.32%The workers compensation insurance adjustment is based on an index which increased 1.32%.

Depreciation – Collection Vehicles 0.0%

No adjustment in 2017.

Depreciation - Containers 0.0% No adjustment in 2017.

Other Indirect 0.41%The Other Indirect expense includes insurance, general office expense, safety, etc. Other Indirect expenses are adjusted by 80% of a CPI index change of .51%.

Non-CBA Labor 1.75%The adjustment is based on the CPI index described in Table 1 of Attachment K.

Fuel -38.27%The Fuel expense is adjusted by the change in a fuel index of -38.27%.

CBA (Mechanics and Clerical) Wages and Benefits

1.75%The wages and benefits adjustments are based on the CPI index described in Table 1 of Attachment K.

Payroll Tax (Drivers) 1.75%

The payroll tax rate is adjusted by changes in Federal or state payroll tax rates. There are no tax rate changes for 2017; therefore, the payroll tax expense changes in accordance with change in wages.

CBA Wages (Drivers) 1.75%The wages adjustment is based on the CPI index described in Table 1 of Attachment K.

CBA Benefits (Drivers) 1.75%The benefits adjustment is based on the CPI index described in Table 1 of Attachment K.

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The flowchart provided as Table D illustrates graphically the cost adjustment process that is conducted each year.

Table D

The result of the Cost Adjustment Process is provided in Table E on page 13.

1.1.4. Direct Labor-Related Costs

Total Direct Labor and related costs increased by $446,845 or 1.7%, from the approved 2016 costs. This change is the result of applying an increase for changes in indices, as

ADJUSTMENT 2017 CONTRACTORS COMPENSATION

CBA (wages & benefits)

+ Index adjustment beginning Rate Year 2016

= Base plus Adjustment

Other Cost + Index = Base plus Adjustment

Fuel + Index = Base plus Adjustment

Depreciation + No Change = Last Year's Depreciation

Profit calculated on total approved costs at Operating ratio in

Proposal

Interest Interest is fixed on sliding scale based on final capital cost

Annual Interest Expense per Interest Schedule

Other Actual cost; ie, regulatory fees, etc. Actual Cost

+Total of all Costs Above

=

Note: The "CBA (wages & benefits)" row applies to the Collective Bargaining Agreements covering drivers, mechanics and

clerical employees. Simplified - for illustration only.

SBWMA - CONTRACTOR COST ADJUSTMENT PROCESS

Collection and Shoreway Operations Contracts

2016 APPROVED COSTS (not actual costs)

Allowable Profit

Contractor Pass-Through Cost

2016 TOTAL BASE CONTRACTOR COMPENSATION

2017 TOTAL BASE CONTRACTOR

COMPENSATION

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described in Table 1 of Attachment K. The four specific costs that are adjusted which comprise the Direct Labor cost category increased as follows:

1) Wages for CBAs $288,768.

2) Benefits for CBAs $114,930.

3) Payroll tax expense has increased by $24,025 due to the increase in wages described above. The actual payroll tax rate is unchanged from 2015.

4) The final component of Direct Labor-Related Costs, Workers’ Compensation Insurance, increased by $19,122 as a result of applying the change in the Employment Cost Index.

1.1.5. Direct Fuel Costs

Direct Fuel Costs are adjusted based on the change in the Producer Price Index - Commodity Index for #2 diesel fuel. The adjustment for 2017 is a decrease of 38.3% or -$1,281,193 from 2016. In 2012, this index experienced a 25.55% increase, which is indicative of the volatility of this index and the actual cost of fuel.

1.1.6. Other Direct Costs

Other Direct Costs are adjusted based on applying 80% of the change in a Federal Consumer Price Index. The result is an increase of 0.4% or $8,894.

1.1.7. Depreciation on Collection Vehicles, Containers and Equipment

There is no cost adjustment for depreciation expense unless a change is approved to the base capital for trucks, containers and equipment. Therefore depreciation expense for Rate Year 2017 is the same as for Rate Year 2016.

1.1.8. Indirect Costs Excluding Depreciation

Allocated Indirect Costs Excluding Depreciation include overhead costs, as follows: General and Administrative costs, Operations (Supervisory) costs, Vehicle Maintenance costs and Container Maintenance costs. These overhead cost categories each include labor and related costs, fuel costs, and other costs. Each cost category is separately adjusted as explained above. Allocated Indirect Costs Excluding Depreciation, increased by 1.0% or $131,490.

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1.1.9. Annual Implementation Cost Amortization

The Implementation or start-up costs for Recology to roll-out the services are amortized over the ten year Term of the Franchise Agreements and are fixed costs. The annual cost is $187,175.

1.1.10. Profit

Allowable Profit is calculated by applying the Operating Ratio (OR) of ninety and one-half percent (90.5%) to the Contractor’s approved Total Annual Costs of Operations. The Total Annual Cost of Operations is not the actual cost of operations. The Total Annual Cost of Operations is determined by increasing the certain line items included in the prior year approved Total Costs of Operations by the index identified in Attachment K. The Total Contractor’s Compensation for Rate Year 2017 is made up of annual approved increases added to the amounts originally included in Recology’s 2008 RFP submittal.

The compensation for Total Annual Cost of Operations decreased 1.4% or -$693,963 and is made up of the items discussed. Applying the prescribed OR to the Total Annual Cost of Operations results in ana decrease in Profit for 2017 of 1.4%, or -$72,847.

1.1.11. Contractor Pass-Through Costs

Contractor Pass-Through Costs are made up of any new Regulatory Agency Fees (no changes for 2017), Interest Expense (on capital for trucks and equipment), and Interest Expense on Implementation Costs. Interest expense is adjusted based on the ten year debt service schedule approved at the start of the contract. Interest expense decreased by $322,940 to $1,306,716 for 2017. Interest Expense on Implementation Costs decreased by $10,718 to $43,030.

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Table E

Compensation - 2016


Annual Cost of Operations

Wages for CBAs 16,469,842 16,758,609 288,768 1.8%

Benefits for CBAs 6,555,040 6,669,971 114,930 1.8%

Payroll Taxes 1,370,291 1,394,316 24,025 1.8%

Workers Compensation Insurance 1,452,653 1,471,775 19,122 1.3%

Total Direct Labor Related-Costs 25,847,826 26,294,671 446,845 1.7%

Direct Fuel Costs 3,348,085 2,066,892 (1,281,193) -38.3%

Other Direct Costs 2,169,270 2,178,164 8,894 0.4%

Depreciation - Collection Vehicles 4,016,792 4,016,792 - 0.0%

- Containers 1,882,550 1,882,550 - 0.0%

5,899,342 5,899,342 - 0.0%

Allocated Indirect CostsGeneral and Administrative 7,181,152 7,267,914 86,762 1.2%

Operations 1,777,985 1,787,232 9,247 0.5%

Vehicle Maintenance 3,067,890 3,106,609 38,718 1.3%

Container Maintenance 1,050,330 1,047,093 (3,237) -0.3%

Total Allocated Indirect Costs 13,077,358 13,208,848 131,490 1.0%

Total Allocated Indirect Depreciation Costs 152,451 152,451 - 0.0%

Annual Implementation Cost Amortization 187,175 187,175 - 0.0%


Profit 5,320,158 5,247,311 (72,847) -1.4%



Contractor Pass-Through CostsRegulatory Agency Fees - - -

Interest Expense 1,629,656 1,306,716 (322,940) -19.8%

Interest Expense on Implementation Cost 53,748 43,030 (10,718) -19.9%

Contract Changes to Specific Agencies (422,253) (397,566) 24,687



Other AdjustmentsIncentive / Disincentives 26,604 (14,802) (41,405)

Total Other Adjustments 26,604 (14,802) (41,405)


Total Depreciation


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1.2. SPECIFIC ISSUES FOR 2017

1.2.1. Performance Incentives and Disincentives

The Franchise Agreements prescribe numerous performance standards and also require Recology to compile information and submit monthly, quarterly and annual reports. The information and data contained in these reports are primarily self-reported by Recology. All of the Performance Incentives and Disincentives (Attachment I) with the exception of disincentives related to contamination are self-reported by Recology. The incentives and disincentives self-reported by Recology are currently being audited and may be adjusted pending the results of the audit. The contamination related disincentives are calculated by the SBWMA and payment is remitted directly to the SBWMA so these amounts are not presented.

The calculated Performance Incentives/Disincentives payment for 2015 was a disincentive payment from Recology of $11,70614,802. Table F provides a breakdown by Member Agency. The payment for Performance Incentives/Disincentives (includes additional Liquidated Damages and Disincentives per the SBWMA audit) to Recology for 2014 was $26,604 (applied to 2016 rates); therefore, the compensation for Performance Incentives/Disincentives from Recology for 2015 (which includes additional Liquidated Damages and Incentives/Disincentives per the SBWMA audit, applied to 2017 rates) is reduced by $38,30941,405 when compared to Incentives/Disincentives from Recology for 2014 (applied to 2016 rates).

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Table F

Member AgencySFD Missed

P/U Events

Average

Speed of

Answer

90 Second

Max Hold

Time

Diversion

Additional

Liquidated

Damages

Net Incentives

and

Disincentives

Atherton $50 ($55) $0 $173 $44 $212Belmont $100 ($213) $0 $665 $146 $698Burlingame $50 ($575) $0 $1,791 $335 $1,602East Palo Alto $250 ($307) $0 $958 $238 $1,139Foster City $200 ($265) $0 $825 $201 $961Hillsborough $50 ($65) $0 $202 $49 $237Menlo Park $50 ($424) $0 $1,322 $251 $1,199North Fair Oaks $0 ($149) $0 $464 $83 $399Redwood City $350 ($956) $0 $2,981 $628 $3,003San Carlos $250 ($335) $0 $1,043 $253 $1,212San Mateo $450 ($1,072) $0 $3,342 $719 $3,439SM County $100 ($103) $0 $322 $84 $403WBSD $150 ($41) $0 $128 $63 $300Total $2,050 ($4,560) $0 $14,215 $3,096 $14,802

Performance Incentive/Disincentive Payments 2015

Performance Incentives and Disincentives

Negative number in parenthesis denotes Incentive payment due to Recology.

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1.3. MEMBER AGENCY SPECIFIC ISSUES

1.3.1. Town of Hillsborough Backyard Service Adjustment

In 2008, the Town of Hillsborough (Hillsborough) initiated a backyard collection fee designed to encourage Single Family Dwelling customers to bring their garbage carts to the curb for collection. As a result of the new fees imposed by Hillsborough, fewer customers requested backyard service. This decrease in backyard collection data was not reflected in Recology’s 2008 proposal submittal. Since the data had changed from the time of RSMC’s 2008 proposal submittal, Hillsborough requested that Recology review the data included in the proposal and update the assumptions to more accurately reflect the migration to curbside service.

Recology agreed that the decrease in backyard service should in fact reduce the estimated number of Route Hours and the number of Route Labor Hours (two key metrics for cost allocations) needed to service Hillsborough. Therefore, Recology reduced Hillsborough’s and the other SBWMA Member Agencies Total Single Family Dwelling Route Labor Hours and Route Hours for Solid Waste, Recyclable Materials, and Organic Materials collection. These changes were only made in the Town of Hillsborough and no other Member Agencies were affected by the changes.

The reduction in hours reduced the Total 2017 Contractor’s Compensation for Hillsborough’s Single Family Dwelling costs by $403,018, slightly lower than last year, and is combined with the greenwaste cart cost adjustment described in 1.3.4 below.

1.3.2. City of San Carlos Kitchen Pail Adjustment

A deduction will be made for the City of San Carlos which had already purchased their kitchen pails prior to the roll-out of new services by Recology in 2011. This cost of $5,567, page 7 in Table B, will be deducted from Recology’s compensation and is adjusted annually.

1.3.3. City of Menlo Park Billing Adjustment

The City of Menlo Park requested that starting in 2011 Recology add the service of directly billing its customers who had previously been billed by the City. This cost of $24,529, page 7 in Table B, will be added to Recology’s compensation and adjusted annually.

1.3.4. Town of Hillsborough Used Green Waste Carts Adjustment

The Town of Hillsborough decided to use their previously owned organics containers and not purchase new ones. Starting in 2011 with the roll-out of new services by Recology, the cost of new carts in the amount of $13,510 will be deducted from

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Recology’s compensation and is adjusted annually. This amount can be found on page 7 in Table B and is combined with the backyard service adjustment described in section 1.3.1 above for a total of $416,528.

As part of the agreement to use used green waste carts, the annual depreciation of any new carts requested by residents of Hillsborough would need to be added to Contractor’s Compensation ($14,338 for Rate Year 2017). The staff report for the July 12, 2010 Town Council agenda is included on page 90 of Part 2. The residents have requested 2,875 new green waste carts since January 1, 2011. An additional depreciation schedule can be found on page 93 of Part 2.

1.3.5. City of Belmont Unique Franchise Agreement

Eleven of the twelve SBWMA Member Agency Franchise Agreements use the same compensation methodology to calculate the annual adjustment to the compensation paid to Recology. One Member Agency (i.e., City of Belmont) used a different compensation adjustment methodology; however, use of this different methodology does not impact the costs or services provided to the other eleven Member Agencies. Including the City of Belmont in the cost calculations with the other eleven Member Agencies is necessary in order to accurately implement the cost allocation process prescribed in the Franchise Agreements.

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Annual Revenue Reconciliation Page 1 of 5

2. ANNUAL REVENUE RECONCILIATION

2.1. REVENUE RECONCILIATION FOR 2015 TO ACCOUNT FOR ANY SHORTFALL OR SURPLUS IN COMPENSATION PAID TO RECOLOGY

For rate years 2013 through 2020, there is an annual revenue reconciliation process to determine what net revenue Recology retained in compensation versus the amount actually owed to the Company. The calculation compares gross revenue billed, less Contractor paid Pass-Through expenses for Agency fees and disposal expense at Shoreway, versus the approved Contractor’s Compensation. This reconciliation of what was owed versus what was paid to Recology results in a surplus or shortfall owed to/from Recology by each Member Agency. The 2015 Revenue Reconciliation was submitted on March 31, 2016 and is being audited by a third party firm hired by the SBWMA. The submitted results are included in Recology’s 2017 total compensation.

Table G illustrates how the Revenue Reconciliation process is conducted each year.

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Table G

This surplus or shortfall will be added to or subtracted from the Company’s compensation for the subsequent rate year (2017) by Member Agency. The Recology 2015 Revenue Reconciliation Report was submitted on March 31, 2016 and is being audited by a third party firm hired by the SBWMA.

Included in the Revenue Reconciliation is a review of revenue received by Recology to provide backyard service. The Franchise Agreement identifies that revenues billed for

2 Also includes Organics and Food Scraps Processing costs (tons by Member Agency x contractor rates/ton).

2015 REVENUE RECONCILIATION PROCESSJanuary 1, 20151 December 31, 2015

Approved 2015 Recology Compensation 2015 Actual Revenue Billed

Prior Period Surplus/Shortfall Approved 2015 Recology Compensation (no changes)

+↓ -↓

2015 Estimated Disposal Expense

2015 Actual Disposal2 Expense Paid to SBWMA

+↓ -↓

2015 Estimated Agency Fees 2015 Actual Agency Fees Paid to Agency

+↓ -↓

=↓ =↓

2015 Approved Revenue Requirement

Actual Revenue Surplus/Shortfall Applied to 2017 Rates

1 SBWMA Board approves Total Revenue Requirement in September for Member Agencies to set rates effective January 1.

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providing backyard service for the first twenty percent (20%) of single family dwelling (SFD) customers is to be excluded from contractor’s compensation. Currently, no Member Agency has over 20% of their SFD customers subscribing to backyard service, Therefore, 100% of all backyard service revenue ($90,383) is credited back to the Member Agencies for Rate Year 2015.

The Revenue Reconciliation Report for Rate Year 2015 submitted by Recology on March 31, 2016 finds that Member Agencies in total have a surplusshortfall balance with Recology of $35,21083,648 including interest. (Refer to page 22 for the Recology Revenue Reconciliation summary table.) Member Agencies with a surplus balance may request a refund from Recology if requested by July 31, 2016 as further explained below.

2.2. INTEREST ASSOCIATED WITH A SHORTFALL OR SURPLUS IN REQUIRED REVENUES

Section 11.07.B of the Franchise Agreement prescribes that interest shall be applied to any surplus or shortfall as calculated in the Revenue Reconciliation Report. The interest is applied to fifty percent (50%) of the difference during the Rate Year in which the difference in revenue occurred (Rate Year 2015) and one hundred percent (100%) of the difference during the immediately following Rate Year (Rate Year 2016). The interest rate is set at the prime rate plus one percent (1%). The prime rate in effect since December 16, 2008 is 3.25%. Therefore interest is calculated at 4.25%.

In March 2014, a Memorandum of Understanding (MOU) between Recology San Mateo County and the SBWMA was approved by the SBWMA Board to clarify the issue of Shortfall and Surplus balances and interest payments for Rate Year 2013 and beyond (see Part 2, page 86). This MOU described that shortfall amounts that are a result of a Member Agency setting rates lower than had been recommended by the SBWMA Board shall have interest applied as described in Section 11.07.B of the Franchise Agreement.

The MOU describes that no interest will be applied to shortfall or surplus amounts that were generated if the Member Agency set rates as recommended by the SBWMA Board. If a Member Agency sets rates above those recommended by the SBWMA Board and a surplus is generated, that Member Agency can have the amount of the surplus refunded to the Member Agency. The refund must be requested in writing by July 31 of each year and Recology will comply with the request for refund in a reasonable time frame. If a Member Agency elects to have the surplus amount refunded, that surplus amount will not be subtracted from the company’s compensation for the subsequent rate year as described in Section 2.1 above.

The MOU was updated in July 2015 to include shortfall amounts generated due to a Member Agency setting rates lower than recommended by the SBWMA Board can be

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paid to Recology by that Member Agency and avoid the interest charge described above. The Member Agency must notify Regology in writing of its intent to pay the shortfall amount by July 31 of each year. The payment must be received by Recology prior to September 30 of that year. If a Member Agency elects to pay the shortfall, that shortfall amount will not be added to the company’s compensation for the subsequent rate year as described in Section 2.1 above. The amended MOU is included on Part 2, page 94.

The interest to be charged on the 2015 Revenue Reconciliation shortfall amounts and included in the Rate Year 2017 Total Contractor’s Compensation is included in Table H,

page 22.

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Table H

Recology San Mateo CountyRevenue Reconciliation and InterestRate Year 2015

Atherton Belmont Burlingame E Palo Alto Foster City Hillsborough Menlo Park Fair Oaks Redwood City San Carlos San Mateo West Bay County Agency Total

Gross Revenue Billed $ 3,188,740 6,558,771 10,690,190 4,594,914 5,778,606 3,151,168 10,321,736 2,695,770 18,466,567 8,228,769 21,929,464 1,504,471 3,199,374 100,308,540

Less:Pass-Through Costs 1,270,963 3,006,707 4,904,632 2,273,475 1,866,311 1,021,325 4,460,191 917,445 7,691,062 2,841,181 8,427,327 471,104 939,541 40,091,264

Unscheduled and Intermittent Services 32,077 68,608 102,721 49,392 22,262 13,388 134,731 35,560 141,917 98,767 355,012 16,972 19,146 1,090,553

Net Revenue Billed 1,885,700 3,483,456 5,682,837 2,272,047 3,890,033 2,116,455 5,726,814 1,742,765 10,633,588 5,288,821 13,147,125 1,016,395 2,240,687 59,126,723

Approved Contractor's Compensation 1,461,074 3,620,978 5,729,318 2,410,949 3,466,353 1,967,587 5,838,582 1,770,658 10,561,173 5,090,254 12,662,789 996,526 2,147,262 57,723,503

2013 (Surplus)/Shortfall 136,721 883,732 (41,259) (134,974) 333,499 (356,908) 150,422 (17,634) (144,629) 91,362 433,685 (14,775) (117,433) 1,201,809 Interest on 2013 (Surplus)/Shortfall 8,716 56,338 — — — — 9,589 — — 5,824 — (942) — 79,525

Total Due Recology San Mateo County for Rate Year 2015 1,606,511 4,561,048 5,688,059 2,275,975 3,799,852 1,610,679 5,998,593 1,753,024 10,416,544 5,187,440 13,096,474 980,809 2,029,829 59,004,837

Surplus/(Shortfall) for Rate Year 2015 $ 279,189 (1,077,592) (5,222) (3,928) 90,181 505,776 (271,779) (10,259) 217,044 101,381 50,651 35,586 210,858 121,886

Application of Shortfall Remittance, Menlo Park: (2)

Shortfall Year 2013 160,011 160,011 Remaining Shortfall Remittance to Year 2015 23,550 23,550

Total Application of Shortfall Remittance — — — — — — 183,561 — — — — — — 183,561

Requested Refund of Rate Year 2015 Surplus (279,189) — — — — — — — — — — (35,586) — (314,775)

Adjusted Surplus/(Shortfall) for Rate Year 2015 $ — (1,077,592) (5,222) (3,928) 90,181 505,776 (88,218) (10,259) 217,044 101,381 50,651 — 210,858 (9,328)

Interest to Recology (1) (68,696) (5,624) (74,320)

TOTAL REVENUE RECONCILIATION — (1,146,288) (5,222) (3,928) 90,181 505,776 (93,842) (10,259) 217,044 101,381 50,651 — 210,858 (83,648)

(1) Note: In accordance with the Memorandum of Understanding, interest is applied to the shortfall between net revenue billed and the approved amount due Recology if rates are set below those recommended in the SBWMA report approved by the SBWMA Board. Interest is applied to 50% of the difference during the rate year in which the difference occurred (2015) because the difference occurs throughout the year and to 100% of the difference in the immediately following year (2016) because the difference exists the entire year. The interest applied to both years is the prime rate in effect when the SBWMA issued the report for that year plus one percent (1%). The prime rate for Rate Year 2015 is 3.25%.

(2) In June 2016, the City of Menlo Park remitted $360,000 to Recology to pay the 2013 ($160,011) and 2014 ($176,439) shortfalls in accordance with the Staff Reportdated 2/9/16, Agenda Item 1-2. Recology has applied the 2013 shortfall above. The application of the 2014 shortfall remittance will be included in the 2016Revenue Reconciliation. The remaining $23,550 of the $360,000 remittance is applied to the 2015 Revenue Reconciliation, above.

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Allocation Of Costs To The Member Agencies Page 1 of 8

3. ALLOCATION OF COSTS TO THE MEMBER AGENCIES

3.1. EXPLANATION OF COST ALLOCATION PROCESS

The process to allocate Recology’s cost equitably across all Member Agencies is prescribed in Article 11 and Attachment K of the Agreements. Recology’s sixteen cost categories are allocated based on four operational statistics for each of the 17 service sectors specific to each Member Agency. These operational statistics are:

Annual route labor hours Annual route hours Number of containers in service Number of customer accounts serviced

Recology conducted its Annual Route Assessment over a four week period in April and May 2016 to determine the statistics that will be applied to each Member Agency. A summary of the metrics used for the cost allocation process are provided in Appendix 1-1. Refer to Appendix 1-2 and Appendix 1-3 on pages 34 and 35 for two of the statistics comparing 2016 to 2017 data by Member Agency (route labor hours and route hours).

Table I details which operational statistics are applied to allocate each of the cost categories. Table J is a graphical representation of Table I.

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Table I

Table J

Cost Category Operational Statistic

Wages for Direct Labor Annual Route Labor HoursBenefits for Direct Labor Annual Route Labor HoursPayroll Taxes Annual Route Labor HoursWorker’s Compensation Expense Annual Route Labor HoursDirect Fuel Costs Annual Route HoursOther Direct Costs Annual Route HoursRoute Vehicles Annual Route HoursCollection Containers Containers in ServiceOther Annual Route Hours

General and Administrative Number of Customer AccountsVehicle Maintenance Annual Route HoursContainer Maintenance Number of Containers in ServiceOperations Annual Route Hours

Annual Route HoursAnnual Route Hours

COST OF OPERATIONS

INDIRECT COSTS

IMPLEMENTATIONINDIRECT DEPRECIATION

Operational Statistic Cost Category

Annual Route Labor Hours

Direct Labor (Wages, Benefits, Taxes, Worker's Comp)

Direct Fuel, Other Direct, Route Vehicles, Vehicle

Maintenance, Operations

Annual Route Hours Implementation

Indirect Depreciation

Containers in Service Collection Containers, Container Maintenance

Number of Customer Accounts General and Administrative

BASE COMPENSATION

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In an effort to illustrate how the cost allocation process is conducted, an example for the City of Menlo Park residential solid waste line of business is provided in Table K below. The first section of this table outlines Menlo Park’s share of the four operating statistics (i.e., number of accounts, total route labor hours per year, route hours per year and total containers in service.) The second section shows how the allocation of these operational statistics is applied to the cost categories (i.e., direct labor, direct fuel, etc.).

It is important to note that this process is conducted for seventeen lines of business (e.g., Single-Family solid waste, recycling, organics; Commercial/MFD solid waste, recycling, organics, etc.) and Table K, below, only represents the calculation for one service sector (i.e., Single-Family Dwelling) in one line of business (i.e., Solid Waste collection service). Table L, on page 26, provides a list of all seventeen lines of business.

Table K

Example of Cost Allocation Calculation - 2017

City of Menlo Park Allocated Cost for SFD, Solid Waste Line of BusinessStatistics

1 # of Accounts - City 7,890# of Accounts - Total SBWMA 94,580 % of Accounts - City 8.3%

2 Total Route Labor hours year - City 4,236Total Route Labor hours year - Total SBWMA 47,351 % Total Route Labor hours year - City 8.9%

3 # of route hours/year - City 3,977# of route hours/year - Total SBWMA 43,822 % Total Route Labor hours year - City 9.1%

4 Total Containers in Service - City 8,119Total Containers in Service - Total SBWMA 96,806 % Total Containers in Service - City 8.4%

a b c

Service Sector: SFD Solid Waste Solid Waste Solid WasteSBWMA Total % to MP MP Cost Allocation

Annual Cost of Operations (a x b)

Wages for CBAs $3,360,117 8.9% $300,621Benefits for CBAs $1,329,532 8.9% $118,950Payroll Taxes $279,562 8.9% $25,012Workers Compensation Insurance $295,100 8.9% $26,402

Total Direct Labor Related-Costs $5,264,310 $470,984

Direct Fuel Costs $404,512 9.1% $36,711

Other Direct Costs $405,630 9.1% $36,813

Depreciation - Collection Vehicles $803,031 9.1% $72,878Depreciation - Containers $428,963 8.4% $35,977

$1,231,994 $108,855

Allocated Indirect CostsGeneral and Administrative $1,363,251 8.3% $113,724Operations $335,233 9.1% $30,424Vehicle Maintenance $582,710 9.1% $52,883Container Maintenance $196,404 8.4% $16,472

Total Allocated Indirect Costs $2,477,598 $213,504

Total Allocated Indirect Depreciation Costs (Form 9) $28,295 9.1% $2,568

Annual Implementation Cost Amortization (Form A) $40,497 9.1% $3,675

Total Annual Cost of Operations $9,852,837 $873,109

Profit (from Operating Ratio below) $1,034,276 $91,65290.5% 90.5% 90.5%

Total Costs before Pass-Through Cost $10,887,113 $964,762

Contractor Pass-Through CostsInterest Expense $244,896 see note $21,638Interest Expense on Implementation Cost $8,094 see note $735

Total Contractor Pass-Through Costs $252,990 $22,373

BASE CONTRACTOR'S COMPENSATION - 2017 $11,140,103 $987,134

Line of Business


Depreciation for Collection Equipment

Note: Interest Expense is allocated based on the % of each agency's depreciation expense to the total.

Interest Expense on Implementation Cost is allocated based on route hours. Calculation is not shown above.

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See Appendix 3-7, page 82 column A to trace the example identified in Table K to the Single-Family solid waste cost allocation to the actual Member Agency cost worksheet.

Table L

Attachment N Reference Line of Business Service Sector

A Solid Waste (1) Single-Family Residential

B Recyclable Materials (2)

C Organic Materials (3)

D Weekly Battery and Cell Phone Collection (4)

E Weekly Used Motor Oil and Filters (5)

F Twice Annual Bulky Item Collection (6)

E Cart and Bin Solid Waste (7) Commercial/MFD

F Cart and Bin Recyclable Materials (8)

G Cart and Bin Organic Materials (9)

H Drop Box Solid Waste (10)

H Drop Box Recyclable Materials (11)

H Drop Box Organic Materials (12)

J Twice Annual Bulky Item Collection (13)

E Solid Waste (14) Agency Facility

G Organic Materials (15)

I Public Litter and Recycling Cans (16)

I Venues and Events (17)

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3.2. COST ALLOCATION VARIANCES FOR MEMBER AGENCIES

Total Contractor’s Compensation is allocated each year based on the new operational statistics compiled from the annual route assessment conducted by Recology each year in April/May. Therefore, the percent of cost allocated to each Member Agency changes each year. Table M below shows the total cost allocation percent by Member Agency in 2016 and 2017, the allocation percentage difference, the total cost percent change, and the total cost variance attributed to the change in cost allocation percent.

Table M

Percentage of Total Contractor’s Compensation Total Cost Allocation

2016 2017 Difference % Variance % Difference $ Atherton 2.52% 2.48% -0.03% -1.33% $ (18,877) Belmont 6.41% 6.34% -0.07% -1.05% $ (38,056) Burlingame 10.01% 9.73% -0.28% -2.84% $ (160,910) East Palo Alto 4.14% 4.19% 0.05% 1.16% $ 27,141 Foster City 5.83% 6.01% 0.17% 2.97% $ 97,958 Hillsborough 4.16% 4.09% -0.07% -1.66% $ (39,008) Menlo Park 10.30% 10.19% -0.11% -1.11% $ (64,777) North Fair Oaks 3.02% 3.05% 0.03% 0.83% $ 14,190 Redwood City 17.70% 17.64% -0.06% -0.32% $ (31,622) San Carlos 8.70% 8.89% 0.19% 2.16% $ 106,336 San Mateo 21.77% 21.97% 0.20% 0.93% $ 114,357 West Bay Sanitary 1.75% 1.67% -0.08% -4.61% $ (45,732) County of San Mateo 3.68% 3.75% 0.07% 1.87% $ 38,999

Totals 100% 100% 0.00% N/A $ 0

Note: Dollar difference amounts in parentheses are a reduction in total cost allocation. Year 2015 and 2016 percentages are shown rounded to two decimal places.

The Total SBWMA year-over-year percentage change in the cost categories for the three service sectors (i.e., Residential, Commercial/Multi-Family and Member Agency Facilities) is provided as Appendix 2-2, page 39. For each Agency, the year-over-year changes in the main operational statistics are shown in the Member Agency Snapshot Summary table and the associated cost adjustments are provided in detail in Appendix 3. Additionally, the bottom of the Attachment N, Schedule B, shows the change in allocation in percent and cost by Line of Business (cost from allocation change only).

The primary factor that is attributable to the year-over-year cost allocation variances is the number of labor hours used to service each Member Agency. Because all Member Agencies comprise 100% of the total allocation of costs, a reduction or increase in the allocation of one Member Agency affects the other Member Agencies.

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Changes in each Member Agency’s percent of route hours results in changes in the allocation of costs which can be impacted by several possible factors. Allocation changes can be the result of changes in route drivers, changes in traffic patterns, changes in set-out locations for containers, new service time constraints due to noise, street sweeping, requested collection times, etc.

In looking at the change in statistics from one year to the next, it is important to point out that it is not just how one Member Agency’s statistics change but how the Agency’s statistics change in comparison to the total. For example, if an Agency has a 10% reduction in hours but the total SBWMA also has a 10% reduction, then the cost allocation percent to this Agency will not change. If an Agency has a 10% reduction but the total SBWMA has a 15% reduction, then the Agency will actually have a larger cost allocation percent than the previous year. So the Agency’s statistical changes in comparison to the total are what really affect changes to the cost allocation percent. The tables in Appendix 1 provide a useful comparison of how each Member Agency statistics change in comparison to other Member Agencies and to the total SBWMA.

3.3. INDIVIDUAL MEMBER AGENCY VARIANCES As in prior year compensation applications, Recology focuses the variance analysis on jurisdictions whose individual allocation changed by 3% or more (Variance % column in table M above). The 3% benchmark is used as anything less than 3% could be driven by a variety of “soft factors”. Factors such as traffic, relief driver impact, proper/improper set outs, and seasonality can attribute to variances of less than 3%.

It is important to note that no Member Agency’s overall allocation changed by more than three-tenths of 1 percent from the prior year. In fact, eight Member Agencies only had a change of less than one-tenth of one percent in their cost allocation. For example, West Bay Sanitary District’s overall allocation decreased from 1.75% to 1.67%, a difference of only -0.08%. Yet, due to West Bay Sanitary District’s smaller cost allocation percentage, as compared to the other 12 Member Agencies, this -0.08% decrease resulted in a -4.61% variance.

West Bay Sanitary District

The decrease in West Bay Sanitary District’s total cost allocation can be attributed to a decrease in route hours and route labor for one commercial recycle route and one residential MSWmunicipal solid waste route. The decrease of route hours and route labor hours for both routes is attributed to relief drivers taking longer to conduct these routes in 2015, compared to the regular route drivers who serviced these same routes in 2016.

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3.4. OPERATIONAL INFORMATION FOR COST ALLOCATION

Operational information used to allocate Contractor’s Compensation can be found in the following tables provided in Appendix 1:

A summary of major statistics (Appendix 1-1) Number of Route Labor Hours by Line of Business (Appendix 1-2) Number of Route Hours by Line of Business (Appendix 1-3) Number of Containers in Service by Line of Business (Appendix 1-4) Number of accounts by Line of Business and account type (i.e., container size,

collection frequency, and material type) (Appendix 1-5)

All data provided is a result of the Annual Route Assessment conducted in April and May of 2015.

3.4.1. Annual Route Hours by Line of Business

Annual Route Hours by Line of Business identifies the time spent by each route servicing customers by Member Agency, Service Sector (i.e., Single-Family Dwelling, Multi-Family Dwelling, Commercial and Agency Facility), and Line of Business (e.g., solid waste collection, organic materials collection). This information was gathered over the four week period from April 11, 2016 to May 8, 2016 using the Route Time and Distance Reports from our Routeware on-board computer system.

It should be noted that in order to optimize routing efficiencies we maintain some collection routes that include stops in the territory of more than one Member Agency. For such routes our data management systems (Routeware System) enable us to accurately identify route hours to the appropriate Member Agencies. In instances where Routeware was not available on an individual truck on an individual day, route hours for that route and that day from another week in the four week period were used.

Route Hours are made up of the hours route vehicles spend servicing the customers in each jurisdiction. Route Labor Hours includes the employee actual worked hours spent servicing customers in each jurisdiction as well as any off route time. Off route time, which includes paid breaks, pre and post trip inspection of vehicles as well as travel time to and from the route, is allocated to each jurisdiction based on that jurisdictions percentage of route time for each specific route each day. Additionally, certain commercial routes are two man routes and include 2 employees. In these cases, the route labor hours will be doubled to include both employees.

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3.4.2. Annual Route Labor Hours by Line of Business

The Annual Route Labor Hours by Line of Business were generated by using information gathered during the four week period from April 11, 2016 through May 8, 2016 using the daily Route Time & Distance by Franchise reports from our Routeware on-board computer system.

3.4.3. Number of Containers in Service by Line of Business

The Number of Containers in Service by Line of Business table is the number of containers, both carts and bins, located at active accounts at a point in time, that being May 6, 2016.

3.4.4. Number of Accounts by Line of Business

The Number of Accounts by Line of Business table is not an annualized report. This particular report represents active accounts at a point in time, which was May 6, 2016.

3.5. DESCRIPTION OF OTHER OPERATIONAL INFORMATION

The tables included in Appendix 1 (Operational Information) of this Compensation Application include other data required in the Agreements. These tables provide a breakdown of the data by Member Agency, Service Sector, and Line of Business. For the complete list of statistical tables, see Part 2, Section 1, including these same tables and additional statistical tables (e.g., list of vehicles, personnel, set-outs).

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Cost Adjustment Calculations in Total by Member Agency Page 1 of 2

4. COST ADJUSTMENT CALCULATIONS IN TOTAL AND BY MEMBER AGENCY

Attachment N of the Franchise Agreement illustrates the calculation process to derive the actual total compensation adjustment and allocation to each Member Agency. A summary of the tables from the Attachment N adjustment process are found in Appendix 2.

As previously shown in Section 1.1.11 Table E, the table provided as Appendix 2-1 shows the results of all the cost adjustments, as previously described, in total for the combined SBWMA service area. In Appendix 2-1, each cost category is broken out with this year’s cost, next year’s cost, the dollar variance and the percent variance. In total, there was a -$1,114,090 (-1.9117,186 (-2.0%) compensation adjustment including Performance Incentives/Disincentives.

Appendix 2-2 breaks out the Base Contractor’s costs by line of business and shows a decrease in compensation of -1.9% before the Performance Incentives/Disincentives. Single Family collection costs decreased by -1.9%, Commercial and Multi-Family costs decreased by -1.8% and Agency Facilities costs decreased by -1.6 %.

Appendix 2-3 shows the 2017 total costs including special and one-time adjustments by Member Agency. At the bottom of the table is a comparison to the 2016 total costs and the percentage change. The variance by Member Agency is primarily due to changes in the cost allocation percent versus last year and specific adjustments to individual Member Agencies.

Appendices 2-4, 2-5 and 2-6 provide the 2017 costs by line of business and service sector. Costs are adjusted and allocated at the level of detail shown in this table. At the bottom of each table is the 2016 total cost, the dollar change and the percentage change. The variance by service sector reflects changes in operating hours, which impacts how the total cost is allocated.

Appendix 3 provides six tables for each Agency:

1. Contractor’s Base Compensation – Detail 2. Contractor’s Compensation by Service Sector 3. Allocated Costs – SFD 4. Allocated Costs – MFD & Commercial 5. Allocated Costs – Agency Facilities 6. The Snapshot Report for the Member Agency

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Cost Adjustment Calculations in Total by Member Agency Page 2 of 2

Contractor’s Compensation by Service Sector shows the 2017 total costs including special adjustments by Member Agency. At the bottom of this table is a comparison to the 2016 total costs and the change in percentage. Also included at the bottom is a comparison of the total cost allocation by line of business for this year, next year, the dollar impact of the allocation change and the percentage change. For example, on page 87, Redwood City had a 17.5% allocation of the 2016 Single Family Dwelling cost but 16.9% for 2017 with a 0.6% year-over-year allocation decrease. This decrease resulted in a cost allocation decrease of $207,795. Multi-Family and Commercial had a 17.8% allocation in 2016 and 18.6% for 2017, a 0.7% increase, which resulted in a cost increase of $171,842. Similarly, the Agency Facilities cost allocation increased 0.4%, or $4,215. The result was a total cost allocation decrease of 0.06% or $31,737.

Allocated Costs by Service Sector and Line of Business provide the 2017 costs by line of business and service sector. Costs are adjusted and allocated at the seventeen lines of business shown in these tables. For comparison purposes, at the bottom of each column, is also the 2016 total cost, the dollar change and the percentage change. Provided at the top of each column are the operational statistics and percent of the total attributed to that specific Member Agency for each line of business. The color coding denotes the statistic used to adjust each cost category

Member Agency Snapshot is a summary and comparison of the basic operating statistics and includes three years of data. It includes the four statistics used to allocate costs as described in Section 3 of this Application, as follows:

1. Number of Accounts 2. Total Route Labor hours 3. Total Route Hours 4. Total Number of Solid Waste Containers

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APPENDIX B

SBWMA COMMENTS AND QUESTIONS ON THE

JUNE 15, 2016 RECOLOGY 2017 COMPENSATION APPLICATION

SBWMA FINAL REPORT REVIEWING THE 2017 RECOLOGY


September 15, 2016

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Response to Questions from the SBWMA Regarding

Recology 2017 Compensation Application Part 1

Below are Recology’s responses to the SBWMA Comments and Questions:

SBWMA Comment: In the above table, 1) please revise the label “Total Other Adjustments” to state “Incentive/Disincentive Payments” for clarity

Executive Summary, page 4 of 4, change made

SBWMA Comment: Please apply the correction noted for the previous table to Table

A.

Calculation of Contractor’s Compensation, page 2 of 13, change made

Calculation of Contractor’s Compensation, page 13 of 13, change not accepted. The adjustment cost amount can change year to year.

Annual Revenue Reconciliation, page 3 of 5, change not accepted. The March 31st submittal is not yet final.

Allocation of Costs to the Member Agencies, page 6 of 8, MSW is replaced with municipal solid waste.

SBWMA Comment:

While the Compensation Application as presented establishes a threshold of cost allocation variances equal to or less than 3% as the threshold for Recology to provide a detailed analysis of why the variance occurred, we respectfully request that a threshold of $50,000 be applied in lieu of a 3% fixed percentage. This request was also made last year. Similar to the 2016 Compensation Application, in the 2017 Compensation Application all cost allocation variances are less than 3%, thus no detailed analysis was provided for the specific cause for any variances for individual Member Agencies with the exception of the above explanation for West Bay Sanitary. However, a total of five

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Member Agencies experienced variances greater than $50,000 both positive and negative and additional analysis is requested.

Please provide a detailed analysis of the cost allocation variance for the following five Member Agencies which experienced substantive changes in their cost allocation exceeding $50,000:

Burlingame – 2017 decrease of $160,910 (2016 increase of $98,962) Foster City – 2017 increase of $97,958 (2016 decrease of $71,996) Menlo Park – 2017 decrease of $64,777 (2016 increase of $172,995) San Carlos – 2017 increase of $106,336 San Mateo – 2017 increase of $114,357

Additionally, please include in the requested analysis an explanation of why some Member Agencies (i.e., Burlingame, Foster City and Menlo Park noted above) experienced substantive swings in excess of $50,000 for both 2016 and 2017.

Using a fixed dollar amount as a threshold for required additional detailed analysis does not reflect an equitable nor substantive change in cost allocations. As an example, a $50,000 variance in Hillsborough would be more significant than a $50,000 variance in San Mateo. Therefore, we will continue to use the 3% threshold variance, as previously agreed upon.

SBWMA Comment: In Section 3.3 it states a cost allocation variance under 3% is due to “soft factors” (i.e., traffic, relief driver impact, proper/improper set outs, and seasonality). Please explain why these “soft factors” appear to impact certain Member Agencies annually as noted above and why the relative annual “seasonality” can impact variances in cost allocation given that all Member Agencies experience seasonal changes or events uniformly and the cost allocation data is collected from all the Member Agencies during the same time period annually.

Over the past several years, questions have been raised about changes in allocations, which have resulted in variances year over year for Member Agencies. As agreed upon, Recology has provided rationale related to increases or decreases in individual Member Agency year-to-year variances of 3% or more. Yet, there continues to be questions about variances of less than 3%. There also seems to be the perception that Route Labor Hours as compared to Route Hours as compared to the number of accounts or lifts should correlate in such that if any one of these factors increases or decreases, they all should change in the same manner. Unfortunately, that is not the case, and there are a multitude of soft factors (i.e., traffic conditions, weather, road

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closures or detours, proper/improper set outs, equipment, drivers, etc.), that will affect the overall allocation of each Member Agency, and each of these factors will affect them differently year to year.

As an example, a Member Agency can have 25 additional accounts, stops and/or lifts than the previous year, which one might assume would increase their Route Hours and Route Labor Hours. And in a perfect world, Recology would agree with that assumption. However, recycling, organic and solid waste collection does not operate uniformly. So many “soft factors” may surface throughout a collection day, week, or month, all of which can affect Route Hours and Route Labor Hours. Take for instance, traffic conditions. San Mateo County has seen tremendous and steady growth over the past several years, which has resulted in higher population and record low commercial vacancy rates. All of which are contributing factors to Route Hours and Route Labor Hours.

It’s important to know that even if a Member Agency does not have statistical changes (i.e., # of accounts, # of lifts, route hours and route labor hours) from the previous year, they may in fact still experience a fluctuation in their allocation and variance, due to other Member Agency increases or decreases in allocation.

In addition, no Member Agency saw a change in their overall allocation of more than 0.28%, and only one Member Agency (West Bay Sanitary District) saw a change in their variance of 3% or more.

In this case, West Bay Sanitary District had a variance of -4.61%, which is the

result of their 1.75% overall allocation percentage changing to a 1.67% overall

allocation percentage, a decrease of 0.08% (-0.08% / 1.75% = -4.61% variance). The variance for West Bay Sanitary District is explained in the Rate Year 2017 Compensation Application. That being said, Recology has devoted considerable time in researching what may have attributed to negligible variances, in an effort to answer the questions below:

SBWMA Comments: Please explain the following variances for 2016 to 2017 listed below.

Appendix 1-1 (page 33) - “SERVICE METRICS USED FOR COST ALLOCATION BY MEMBER AGENCY”

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SINGLE-FAMILY DWELLING

Agency: Burlingame

1. # of SFD Account increase of 0.3% 2. Route Labor Hours decrease of 7.2% 3. # of Route Hours decrease of 6.9% 4. Why was there a decrease in Route Labor Hours of 7.2% and a decrease

in # of Route Hours of 6.9% with a 0.3% increase in Accounts?

In addition to the soft factors referenced above, Recology identified two residential organics routes in Burlingame that experienced an additional 450 annualized lifts.

Agency: Foster City

1. # of SFD Account decrease of -0.4% 2. Route Labor Hours increase of 6.5% 3. # of Route Hours increase of 4.2% 4. Why was there an increase in Route Labor Hours of 6.5% and an increase

in # of Route Hours of 4.2% with a -0.4% decrease in Accounts?

In addition to the soft factors referenced above, Recology noted an increase in Bulky Item Collection (BIC) events in Foster City during the data collection period, which resulted in an additional 500 annualized BIC events.

Agency: Menlo Park

1. # of SFD Account increase of 0.2% 2. Route Labor Hours increase of 7.2% 3. # of Route Hours increase of 9.6% 4. Why was there an increase in Route Labor Hours of 7.2% and an increase

in # of Route Hours of 6.9% with only a 0.2% increase in Accounts

In addition to the soft factors referenced above, Recology noted an increase is BIC events in Menlo Park during the data collection period, which resulted in an additional 155 annualized BIC events.

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Agency: North Fair Oaks

1. # of SFD Account decrease of -0.2% 2. Route Labor Hours increase of 15.0% 3. # of Route Hours increase of 16.2% 4. Why was there an increase in Route Labor Hours of 15.0% and an

increase in # of Route Hours of 16.0% with -0.2% decrease in Accounts?

In addition to the soft factors referenced above, Recology identified that one Organics Route had an increase in participation. There was also an increase in BIC events during the data collection period, which resulted in an additional 349 annualized BIC events.

Agency: San Mateo

1. # of SFD Account increase of 0.7% 2. Route Labor Hours increase of 5.2% 3. # of Route Hours increase of 10.6% 4. Why was there an increase in Route Labor Hours of 5.2% and an

increase in # of Route Hours of 10.6% with only a 0.7% increase in Accounts?

In addition to the soft factors referenced above, Recology noted an increase is BIC events during the data collection period, which resulted in an additional 736 annualized BIC events.

Agency: Unincorporated County

1. # of SFD Account increase of 0.3% 2. Route Labor Hours increase of 7.2% 3. # of Route Hours increase of 4.1% 4. Why was there an increase in Route Labor Hours of 7.2% and an

increase in # of Route Hours of 4.1% with only a 0.3% increase in Accounts?

In addition to the soft factors referenced above, Recology identified that one Organics Route had an increase in participation. There was also an increase in BIC events, which resulted in an additional 241 annualized BIC events.

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COMMERCIAL & MFD

Agency: Atherton

1. # of Accounts increase of 0.0% 2. Route Labor Hours decrease of -9.8% 3. # of Route Hours decrease of -2.0% 4. Why was there a decrease in Route Labor Hours (-9.8%) and # of

Route Hours (-2.0%) with no change in Accounts?

In addition to the soft factors referenced above, Recology noted last year that a collection vehicle servicing Atherton during the data collection period experience a breakdown. However, there were no collection vehicle breakdowns in Atherton during this year’s data collection period.

Agency: Hillsborough

1. # of Accounts increase of 0.0% 2. Route Labor Hours decrease of -19.3% 3. # of Route Hours decrease of -13.7% 4. Why were there decreases in Route Labor Hours (-19.3%) and Route

Hours (-13.7%) with no change in Accounts?

Small changes in hours can create larger percentage changes in Member Agencies with low annual hours. In the case of Hillsborough’s decrease in Route Hours and Route Labor Hours, a specific incident could not be identified. The change may be the result of soft factors referenced above. The decrease in route labor hours equates to approximately 7 minutes per day.

Agency: Menlo Park

1. # of Accounts increase of 1.4% 2. Route Labor Hours decrease of -7.9% 3. # of Route Hours decrease of -7.0% 4. Why were there decreases in Route Labor Hours (-7.9%) and Route

Hours (-7.0%) with a 1.4% increase in accounts (i.e., 35 additional Accounts)?

5. Why wouldn’t more Accounts result in increases in Route and Labor Hours instead of substantive decreases?

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In addition to the soft factors referenced above, Recology noted that during the Rate Year 2016 data collection period, a replacement driver serviced a route while the regular driver was out for medical reasons. During this data collection period, the regular route driver serviced this route and experienced a decrease in Route Hours and Route Labor Hours. As previously stated, the number of accounts may not correlate with increases or decreases in Route Hours or Route Labor Hours.

Agency: North Fair Oaks

1. # of Accounts increase of 1.4% 2. Route Labor Hours decrease of -12.0% 3. # of Route Hours decrease of -4.5% 4. Why were there decreases in Route Labor Hours (-12.0%) and # of Route

Hours (-4.5%) with 1.4% increase in Accounts?

In addition to the soft factors referenced above, Recology noted last year that there were two collection vehicle breakdowns on routes servicing North Fair Oaks during the data collection period. Whereas this year, there were no collection vehicle breakdowns on routes servicing North Fair Oaks during the data collection period.

Agency: San Mateo

1. # of Accounts increase of 1.1% 2. Route Labor Hours decrease of -5.1% 3. # of Route Hours decrease of -4.0% 4. Why was there a decreases in Route Labor Hours (-5.1%) and # of Route

Hours (-4.0%) with 1.1% increase in Accounts?

In addition to the soft factors referenced above, Recology identified that a different helper was utilized on a two man route servicing San Mateo during the data collection period. This two man route has proven to be a more efficient team.

Agency: West Bay Sanitary District

1. # of Accounts increase of 4.9% 2. Route Labor Hours decrease of 6.7% 3. # of Route Hours decrease of 11.1% 4. Why was there a decrease in Route Labor Hours of 6.7% and a decrease

in # of Route Hours of 11.1% with 4.9% increase in Accounts?

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As previously stated, the increase in the number of lifts and accounts may not necessarily correlate to the change in Route Hours and Route Labor Hours. The change, however, may be attributed to various soft factors, including improved/improper cart/bin set-outs, favorable/unfavorable on-route and off-route traffic conditions, seasonality, and the proficiency of the collection vehicle operator.

[MEMBER] AGENCY FACILITY SERVICES

Agency: Atherton

1. # of Lifts increase of 10.5% 2. Route Labor Hours decrease of -9.9% 3. # of Route Hours decrease of -2.6% 4. Why was there decreases in Route Labor Hours (-9.9%) and # of Route

Hours (-2.6%) with a 10.5% increase in # of Lifts?


Agency: Belmont

1. # of Lifts increase of 19.3% 2. Route Labor Hours decrease of -20.4% 3. # of Route Hours decrease of -21.1% 4. Why were there decreases in Route Labor Hours (-20.4%) and # of Route

Hours (-21.1%) with the # of lifts increasing by 19.3%? 5. Why wouldn’t an increase in Lifts correlate to increases in Route Labor

and Route Hours?


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Agency: Hillsborough

1. # of Lifts increase of 3.3% 2. Route Labor Hours increase of 67.2% 3. # of Route Hours increase of 60.7% 4. Why are there substantive increases in both Route Labor Hours (67.2%)

and # of Route Hours (60.7%) while only a small change in # of Lifts (3.3%)?

The increase in the number of lifts may not necessarily correlate to the change in Route Hours and Route Labor Hours. A small change in hours can create larger percentage changes in Member Agencies with low annual hours. In the case of Hillsborough Member Agency Facility Route Hours, the increase equates to approximately 2.56 minutes per day. There were no specific incidents or activities identified during the data collection period that would account for the increase in hours. The increase in hours may be attributed to various soft factors, such as traffic and road conditions, equipment, drivers, etc.

Agency: San Carlos

1. # of Lifts increase of 20.4% 2. Route Labor Hours decrease of -2.6% 3. # of Route Hours increase of 13.0% 4. Why did Route Labor Hours (-2.6%) decrease with substantive increase

in the # of Lifts (20.4%)?

The increase in the number of lifts and Route Hours is due to the increase in Member Agency Facility Recyclable Materials line of business of 64.4%, which may be attributed to the new recycling collection at San Carlos Highlands Park, which was initiated in the fall of 2015.

Agency: Unincorporated County

1. # of Lifts increase of 0.0% 2. Route Labor Hours decrease of -37.1%

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3. # of Route Hours decrease of -34.9% 4. Why did Route Labor Hours (-37.1%) and # of Route Hours (-34.9%)

substantively decrease with no change in the # of Lifts?


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Response to Questions from the SBWMA Regarding

Recology 2017 Compensation Application Part 2

Below are Recology’s responses to the SBWMA Comments and Questions:

The following questions/comments pertain to the source file labeled: 2. Calculation of

Contractor’s Compensation for Rate Year 2017

1. Tab: “Attachment N-B”

a. Cell E-H8

i. Please correct the title in Row 8 to read “2017 Total Costs.”

Change not made. This tab is a hidden tab built by the SBWMA in 2013 when the model was updated to include additional requested tabs. Recology has not made changes to the SBWMA model. This tab is no longer used and remains hidden.

2. Tab: “Att N-B” (Cells P24 and P52 are revised.)

a. While the calculations are correct, the following errors are still present in the

referenced cells and should be corrected.

i. Cell P24 had an error message (i.e., “#DIV/0!”) and was revised using

the ISERROR function.

ii. Cell P52 was hard coded and was revised by using the ISERROR

function.

iii. In order to avoid calculation errors in this column it is suggested that

the ISERROR function be used throughout this column as noted

above.

iv. The blue highlighting in Cells P24 and P52 should be omitted for

consistency.

Changes made on tab Att N-B. (revised).

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3. Tab: “Att N-E. SFD (revised)”

a. Cell K9 is hard coded and not linked to another source. Please revise the title

to read “Total 2017,” to ensure that Cell L9 in tab “Att. N-F. Comm & MFD

(revised)” and cell “I10 in Att. N-G MA Services (revi)” will be updated since

these cells are linked to this cell.

Changes made.

4. Tab: “Att. N-G. MA Services (revi”

a. This tab title should be renamed “Att. N-G MA Services (revised)” for

consistency.

Changes made.

5. Tab: “H. Index Calcs”

a. It appears the “Percentage Change Rate” for “Year 2017” is correct; however,

the data shown in the tables for “Fuel” for “January 2016” should be “119.2”

and not “119.5.” Please refer to our comments included to the right of this

table.

Change not made. Making the small change in the January 2016 index, would change the Percentage Change Rate for year 2017 and result in a small difference of approximately $300, and would require reproduction of the RY 2017 Compensation Application, part 1 and part 2. The amounts in the Compensation Application are accurate at the time they are accessed from the Bureau of Labor Statistics. Fuel index values are subject to change throughout the review period. The indices data included with Recology’s original submittal are now fixed and become the base for next year’s Compensation Application, which will be adjusted by the index values available next year. The values in the original submitted Calculation file will provide the starting points for the next year’s Calculation.

b. The “Fuel” index referenced in Cell B43 should be corrected to

“WPU057303.”

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c. The “Other Costs” Cell B70 should be corrected to “CUUR0000SA0.”

d. The “Depreciation” Cell B94 should be corrected to “PCU336211336211.”

e. The note provided in cell H61 (i.e., “Jan-Apr are changed to refle[c]t final the

index number”) is unclear and should be revised.

Comment deleted. The comment is no longer applicable to current Compensation Applications.

f. Please revise the Series Report identification numbers to appear in UPPER

CASE letters to accurately reflect the identification number of these indices

(i.e., Cells B28, B43, B70, B94).

Changes not made for items b., c., d. and f. in the current Compensation Application. Upper case letters do not affect the accuracy of the Application, however the change would require revision of the Compensation Application.

These changes will be made in the RY 2018 Compensation Application.

6. Tab: “N-K. Detail 1 – Indirect Cost”

a. The Report Series (indices) are incorrect. Please correct these Report Series

to reflect the following corrections:

i. Cell K11 (i.e., cis201s000000000A) should be corrected to

“CIS201S000000000I.”

ii. Cell K12 (i.e., ciu2030000000000a) should be corrected to

“CIU2030000000000I.”

iii. Cell K13 (i.e., wpu057303) should be corrected to “WPU057303.”

iv. Cell K14 (i.e., cuur0000sa0) should be corrected to “CUUR0000SA0.”

Changes not made for these items in the current Compensation Application. Requested changes do not affect the accuracy of the Application, however they would require revision of the Compensation Application.


7. Tab: “N-K. Detail 4 – Updated Totals”

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a. The Report Series (indices) are incorrect in all the tables. Please correct the

Report Series to reflect the following corrections:

i. Cells M11, AH11, and BA11 (i.e., ciu2030000000000a) should be

corrected to “CIU2030000000000I.”

ii. Cells M12, AH12, and BA12 (i.e., wpu057303) should be corrected to

“WPU057303.”

iii. Cells M13, AH13, and BA13 (i.e., cuur0000sa0) should be corrected to

“CUUR0000SA0.”

iv. Cells M14, AH14, and BA14 (i.e., pcu336211336211) should be

corrected to “PCU336211336211.”

v. Cells M15, AH15, and BA15 (i.e., pcu336211336211) should be

corrected to “PCU336211336211.”

Changes were not made for items i. – v. above. Changes to uppercase letters do not affect the accuracy of the Application, however they would require reproduction of the RY 2017 Compensation Application.


b. The 2016 cost sheets for “SFD,” “MFD,” and “Agency Facilities” appear to

reflect the correct values, with the exception of “Total Indirect Costs,” which

are improperly referencing 2017 values. Please verify that all figures are

referencing the same year. This correction also impacts the total rows at the

bottom for 2016; however, it appears the 2017 data is accurate. Please revise

rows 40-46/columns E-K (SFD), Y-AF (MFD) and AU-AY (Agency Facilities)

to reflect the 2016 values.

Changes not made. The Calculation of Contractor’s Compensation file is the agreed upon model at the onset of the Franchise Agreement built in collaboration between Recology and the SBWMA. Indirect costs are intended to be updated to the current rate year amounts first (tabs Detail 1 and Detail 2) and are intended to be presented in tab Detail 4 as they appear. Indirect cost are not updated on tab Detail 4. All other costs are updated to current rate year amounts on tab Detail 4 and are intended to be presented as they appear.

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c. The 2016 costs are linked to “Detail 3 - Service Level Chngs” and it appears

this tab is extraneous and should be omitted. The correction would entail hard

coding the values in tab “N-K 4 – Updated Totals” to avoid any confusion.

Change not made. Tab “Detail 3 – Service Level Chngs” is currently hidden and has no effect on the RY 2017 calculation of Contractor’s Compensation. The Calculation of Contractor’s Compensation file is the agreed upon model at the onset of the Franchise Agreement built in collaboration between Recology and the SBWMA. The Franchise Agreement calls for Service Level Adjustments, which are calculated on tab Detail 3. Costs are intended to flow through tab Detail 3 to tab Detail 4. It is necessary to keep this tab in the Calculation file should Service Level Adjustments need to be calculated in future Compensation Applications.

8. Tab: “D. Atherton” (and all subsequent Member Agency tabs)

a. The color coding of cells in this tab (e.g., Cell AB49) is inconsistent and

should be corrected. This color coding was designed to ensure clarity in

reviewing this information, thus please make the appropriate revisions for all

the individual Member Agency tabs.

Changes not made in the current Compensation Application. Requested changes do not affect the accuracy of the Application, however they would require reproduction of all affected pages of the Compensation Application, part 1 and part 2.


9. Tab: “D. North F.O.”

a. It appears that Cells AD73 and AE73 do not have a calculation function.

These cells are currently hard coded to zero and therefore do not have the

proper calculation. Please make this correction.

Changes not made in the current Compensation Application. Requested changes do not affect the accuracy of the Application, however they would require reproduction of the RY 2017 Compensation Application.


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APPENDIX C

MEMBER AGENCY QUESTIONS AND COMMENTS ON RECOLOGY 2017

COMPENSATION APPLICATION WITH RECOLOGY’S RESPONSES



September 15, 2016

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County of San Mateo Comments on: Recology San Mateo County Rate Year 2016 Application For Contractor’s Compensation Adjustment

June 15, 2016

Section Comment Response from Recology

Part 1. Executive Summary, (Results of the 2015 Revenue Reconciliation, Section 2, Page 2 of 4)

1. Please provide an explanation for charging interest to NFO? The SBWMA report did not recommend a rate increase in the Final Rate Application Report for 2016, the report indicated a decrease -0.6% and the Total Collection Rate Impact for 2015 (82614.xlsx) indicated a -2.2%. 2. Can you please provide an explanation on where the variance occurred in the revenue reconciliation was it Residential or Commercial account revenue? Please provide a detailed table indicating the tax roll and Recology revenue received in 2015 for NFO

1. The interest for NFO is a result of the Revenue Reconciliation for Rate Year 2015. The recommended rate adjustment for Rate Year 2015 was an increase of .7%. A rate increase was not initiated for Rate Year 2015. The result of the Rate Year 2015 Revenue Reconciliation indicated a shortfall of $10,259. The 2016 Revenue Reconciliation will be submitted in March 2017.

2. The 2015 Collection Revenue @ 2014 Rates was projected by the SBWMA. The revenues for NFO identified in Table 8 of the SBWMA Final Report Reviewing the 2015 Recology Compensation Application are shown in total and not broken out by Residential or Commercial account revenue.

Attached is the schedule indicating tax roll revenue and Recology billed revenue for Rate Year 2015.

Part 1., Allocation of Costs To the Member Agencies (3.2 Cost Allocation Variances For Member Agencies, Table M Page 5 of 8 (27)),

Please provide an explanation for the increase in the Cost Allocations variances for both NFO and the County of San Mateo areas?

The primary factor for Cost Allocation variances for NFO and the County of San Mateo are attributable to the year-over-year cost allocation variances are

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June 15, 2016

the number of labor hours used to service each Member Agency. Because all Member Agencies comprise 100% of the total allocation of costs, a reduction or increase in the allocation of one Member Agency affects the other Member Agencies. Changes in each Member Agency’s percent of route hours results in changes in the allocation of costs which can be impacted by several possible factors. Allocation changes can be the result of changes in route drivers, changes in traffic patterns, changes in setout locations for containers, new service time constraints due to noise, street sweeping, requested collection times, etc.

Part 1. Appendix 1- Summary Service Metrics, Metrics Summary Used for Cost Allocation Revenue, (Attachment N Appendix 1-1, Page 1 of 1 (33))

1. Please explain the increase in route labor projections for 2017 for NFO and the Unincorporated San Mateo County area? 2. Please explain the increase in containers for 2017 in NFO residential accounts (tax roll accounts)? We do not anticipate adding 366 new containers to the tax roll. How was this calculated?

1. The increase in the route labor hours for NFO and the Unincorporated San Mateo County is a result of an increase in participation for residential organics in 2016 compared to 2015. As an example, in NFO, Route 874 on Wednesday had a 65% increase in participation and in Unincorporated San Mateo County, Route 887 on Tuesday had a 22% increase in participation.





June 15, 2016

2. The number of containers does not equate to the number of accounts. The calculation for containers in Attachment N includes the annualized number of On Call Collection events as part of the container count. The annualized On Call Collection events for 2016 is 349 more than in 2015.





June 15, 2016

Section Comment Response from Recology Part 1. Appendix 1- Summary Service Metrics, Annual Route Labor Hours by Line of Business, (Appendix 1-2, Table 8, Annual Route Labor Hours by Line of Business , Page 1 of 1 (33))

Please explain the projection for increasing the annual route labor hours for Single Family Organic Materials and the Two On Call Collections events (SFD and MFD) for both NFO and Unicorp. County?

Please see response above for Single Family Organics annual Route Labor Hours. On Call Collection events are based upon the actual number of services provided during the month of April, which are then annualized. As noted above, NFO had an increase in On Call Collection events in 2016, and Unincorporated San Mateo County increased by 241.

Part 1. Appendix 3- Cost Adjustments and Snapshot for each Member Agency 3-11 Allocated Costs (SFD, Commercial MFD, Agency Facilities) North Fair Oaks, (Appendix 3-11, D. County of San Mateo North Fair Oaks Allocated Costs – SFD, Page 3 of 6 (106))

In Column J please explain the 47.4% increase? Does this include illegal dumping pick-ups?

The 47.4% increase is related to NFO’s increase in On Call Collection events and does not include illegal dumping. As noted above, NFO has 350 more annualized On Call Collection events in 2016.

Part 1. Audited Financials Statement and Compilation, page 24 and 25 of 25 (145)

Please explain where the additional recycling carts fee from Attachment Q (County’s $10.00 recycling cart fees) revenue is indicated in the financial statements calculations?

The additional $10.00 is included in residential revenue on page 22 of 25.

Part 2. Operational Information Annual Route Hours by Line of Business, (Operational Information, Table 7, page 1 of 1 (7))

1. In 2016, it indicates 0.0 in 2016 for Member Agency Facilities (Roll-Off and Compactor) why does it indicate 49.8 for 2017? 2. Explain the increase in Member Agency Facilities Solid Waste hours for North Fair Oaks?

1. The increase Roll-Off service is based upon a change in service from on-call to scheduled weekly debris box service at the Chestnut yard.

2. A small change in hours can create larger percentage changes in





June 15, 2016

Member Agencies with low annual hours. The annual increase in Member Agency Facility Solid Waste hours for North Fair Oaks equates to approximately 2.3 minutes per day There were no specific incidents or activities identified during the data collection period that would account for the increase in hours. This increase in hours may be attributed to various soft factors, such as traffic and road conditions, equipment, drivers, etc.

Part 2. Supporting Documentation Interest Calculations on Rate Year 2015, (Recology San Mateo County Interest Calculation on Rate Year 2015 Surplus/(Shortfall) Rate Year 2017 Rate Application (page 1 of 1 (78))

As mentioned above it is our understanding that interest is applied if rates are set below those recommended in the SBWMA report and as mentioned above the SBWMA recommended a decrease for both rates years, why is interest being charged to NFO?

The SBWMA recommended rate adjustment for Rate Year 2015 was an increase of 0.7% as noted on Row C.3 of Table 8 of the SBWMA Final Report Reviewing the 2015 Recology Compensation Application.

F:\Users\ewms\03 Program Files\SBWMA\Rate Reviews\16-17\Table of County of San Mateo Comments on the Recology San Mateo County Rate Year 2017 Application.docx




Recology San Mateo CountyAdditonal Cart Fees and RevenueNorth Fair OaksYear 2015

2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015January February March April May June July August September October November December Total

North Fair Oaks (CSA-8)Additional Residential Recycling Cart Fees 80.00 (4.00) 70.00 26.00 60.00 60.00 60.00 60.00 60.00 60.00 67.50 70.00 669.50Additional Residential Organics Cart Fees 450.00 366.00 440.00 396.00 430.00 410.00 420.00 420.00 397.50 415.00 420.00 390.00 4,954.50 Total Additional Residential Cart Fees 530.00 362.00 510.00 422.00 490.00 470.00 480.00 480.00 457.50 475.00 487.50 460.00 5,624.00

Residential Revenue net of additional cart fees - Billed by Recology 2,265.12 2,160.23 2,049.71 1,776.72 2,034.27 2,250.16 2,165.70 2,211.84 2,146.99 2,122.21 1,802.28 2,158.70 25,143.93Residential Revenue - Tax Roll 83,213.57 83,213.57 83,213.57 83,213.57 83,213.57 83,213.57 83,158.95 83,158.95 83,158.95 83,158.95 83,158.95 83,158.95 998,235.12Total Residential Revenue 86,008.69 85,735.80 85,773.28 85,412.29 85,737.84 85,933.73 85,804.65 85,850.79 85,763.44 85,756.16 85,448.73 85,777.65 1,029,003.05

Multi-Family Revenue billed by Recology 14,969.76 22,284.74 22,405.92 22,761.54 22,941.73 22,514.90 22,485.40 22,378.43 22,149.88 21,953.31 22,328.57 21,906.57 261,080.75Commercial Revenue billed by Recology 92,507.75 92,180.80 93,365.14 94,104.74 93,585.49 92,854.33 92,085.34 91,486.38 91,122.02 92,817.50 91,640.09 91,400.45 1,109,150.03Multi-Family/Commercial Revenue billed by Recology 107,477.51 114,465.54 115,771.06 116,866.28 116,527.22 115,369.23 114,570.74 113,864.81 113,271.90 114,770.81 113,968.66 113,307.02 1,370,230.78Multi-Family Revenue - Tax Roll 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 24,742.86 296,914.32 subtotal 132,220.37 139,208.40 140,513.92 141,609.14 141,270.08 140,112.09 139,313.60 138,607.67 138,014.76 139,513.67 138,711.52 138,049.88 1,667,145.10

Total Revenue NFO (CSA-8) 218,229.06 224,944.20 226,287.20 227,021.43 227,007.92 226,045.82 225,118.25 224,458.46 223,778.20 225,269.83 224,160.25 223,827.53 2,696,148.15

________________________________________________________ SBWMA BOD PACKET 09/22/2016



1

Farouk Fakira

From: Lillian Clark <[email protected]>Sent: Monday, July 25, 2016 1:10 PMTo: Tamera Del Bene; Farouk FakiraCc: Chuck Collins; GinoGasparini; MikeKelly; Mario Puccinelli; Hilary Gans; Danielle Lee; Jim

Porter; Joe La MarianaSubject: RE: Recology's 2017 Compensation Application--QuestionsAttachments: [email protected]_20160722_174405.pdf

Tammy, and et al. Thank You for your response. I do have a one more question. I have attached the Total Collection Rate Impact By Member Agency – 2015, 9/2/2014 sheet. Line F, Total Rate Impact (C+D+E)**, F.3 Cumulative Rate Adjustment Percentage from the SBWMA. This Table indicates a ‐2.2 cumulative rate adjustment was needed in 2015 for NFO due to the surplus in revenue for 2012 and 2014.

1. The franchise agreement states, Section 11.07 Rate‐Setting Process, B. Annual Review Process (line 3796‐3806, page 94‐116 ):

A. “(2) lf the Agency elects to set rates that are below those recommended in the SBWMA report, (or delays acting to

revise rates such that the recommended rates do not go into effect until after January 1), and the Revenue Reconciliation process conducted by SBWMA for that Rate Year demonstrates that Net Revenues Billed were less than the approved

Contractor's Compensation contained in the SBWMA report, interest shall accrue on the difference.”

2. The subsequent “Memorandum of Understanding by and between Recology San Mateo County (Recology)and the South Bayside Waste Management Authority, a California JPA (SBWMA).” A. E. 4., 4. A. Recology shall not receive any interest on shortfalls in 2014 and in future years unless the Member Agency adjusts its rates below the rate adjustment recommended in the SBWMA Report and approved by the SBWMA Board.

The statement in the County Franchise Agreement is a “and” statement; the assumption would be it requires both conditions to occur to charge interest to the Agency. Setting rates below the SBWMA recommendation and the revenue reconciliation process demonstrated the revenue was less. The MOU between SBWMA and Recology specifies if the agency adopted rates below the SBWMA report. The County did not adopt rates below the ‐2.2% SBWMA recommendation (Line F.3) for 2015 for NFO (see attachment), it is not clear as to why NFO is charged interest in the application report? Please clarify or revise the Recology Application Executive Summary page 2 and Table H page 22. Please give me a call to discuss further or I can set up a conference call with Farouk and Hilary if we need additional clarification from the SBWMA. Thank You, Lillian Clark County of San Mateo Office of Sustainability County Manager’s Office

________________________________________________________ SBWMA BOD PACKET 09/22/2016



2

From: Tamera Del Bene [mailto:[email protected]] Sent: Friday, July 22, 2016 2:44 PM To: Joe La Mariana <[email protected]> Cc: Chuck Collins <[email protected]>; GinoGasparini <[email protected]>; MikeKelly <[email protected]>; Mario Puccinelli <[email protected]>; Hilary Gans <[email protected]>; Lillian Clark <[email protected]>; Ann Stillman <[email protected]>; Danielle Lee <[email protected]>; Jim Porter <[email protected]> Subject: Recology's 2017 Compensation Application‐‐Questions Good Afternoon, Attached please find Recology’s responses to the County of San Mateo comments of our Recology Rate Year 2017 Compensation Application. In addition to our responses, we have attached the schedule indicating tax roll revenue and Recology billed revenue for Rate Year 2015. Thank you for the opportunity to respond to your comments and questions. We look forward to our continued partnership in serving the residents and businesses in the North Fair Oaks and Unincorporated County of San Mateo areas. Best, Tammy

Tammy Del Bene Waste Zero Manager Recology® San Mateo County 225 Shoreway Road | San Carlos, CA 94070 T: 650.595.3900| [email protected] WASTE ZERO: Recycling Composting Garbage Join the Recology® San Mateo County online community on Facebook and Twitter. This e-mail is confidential and intended only for the individual or entity named above. Please consider the environment before printing.

________________________________________________________ SBWMA BOD PACKET 09/22/2016



1

Farouk Fakira

From: Lillian Clark <[email protected]>Sent: Thursday, August 04, 2016 3:40 PMTo: Mike KellyCc: Farouk Fakira; Joe LaMariana; Jim Porter; Danielle LeeSubject: FW: Recology's 2017 Compensation Application--Questions

Mike, Thank You for addressing our charge. Sincerely, Lillian Clark

From: Mike Kelly [mailto:[email protected]] Sent: Thursday, August 04, 2016 3:34 PM To: Lillian Clark <[email protected]> Subject: RE: Recology's 2017 Compensation Application‐‐Questions Lillian, Recology reviewed the Interest charge to CSA‐8 (North Fair Oaks) and has removed the $654 charge for the Rate Year 2015 shortfall. An updated Revenue Reconciliation will be sent to the SBWMA.

From: Lillian Clark [mailto:[email protected]] Sent: Monday, July 25, 2016 1:10 PM To: Tamera Del Bene <[email protected]>; Farouk Fakira <[email protected]> Cc: Chuck Collins <[email protected]>; Gino Gasparini <[email protected]>; Mike Kelly <[email protected]>; Mario Puccinelli <[email protected]>; Hilary Gans <[email protected]>; Danielle Lee <[email protected]>; Jim Porter <[email protected]>; Joe La Mariana <[email protected]> Subject: RE: Recology's 2017 Compensation Application‐‐Questions Tammy, and et al. Thank You for your response. I do have a one more question. I have attached the Total Collection Rate Impact By Member Agency – 2015, 9/2/2014 sheet. Line F, Total Rate Impact (C+D+E)**, F.3 Cumulative Rate Adjustment Percentage from the SBWMA. This Table indicates a ‐2.2 cumulative rate adjustment was needed in 2015 for NFO due to the surplus in revenue for 2012 and 2014.

1. The franchise agreement states, Section 11.07 Rate‐Setting Process, B. Annual Review Process (line 3796‐3806, page 94‐116 ):

A. “(2) lf the Agency elects to set rates that are below those recommended in the SBWMA report, (or delays acting to

revise rates such that the recommended rates do not go into effect until after January 1), and the Revenue Reconciliation process conducted by SBWMA for that Rate Year demonstrates that Net Revenues Billed were less than the approved

Contractor's Compensation contained in the SBWMA report, interest shall accrue on the difference.”

2. The subsequent “Memorandum of Understanding by and between Recology San Mateo County (Recology)and the South Bayside Waste Management Authority, a California JPA (SBWMA).” A. E. 4., 4.

________________________________________________________ SBWMA BOD PACKET 09/22/2016



2

A. Recology shall not receive any interest on shortfalls in 2014 and in future years unless the Member Agency adjusts its rates below the rate adjustment recommended in the SBWMA Report and approved by the SBWMA Board.

The statement in the County Franchise Agreement is a “and” statement; the assumption would be it requires both conditions to occur to charge interest to the Agency. Setting rates below the SBWMA recommendation and the revenue reconciliation process demonstrated the revenue was less. The MOU between SBWMA and Recology specifies if the agency adopted rates below the SBWMA report. The County did not adopt rates below the ‐2.2% SBWMA recommendation (Line F.3) for 2015 for NFO (see attachment), it is not clear as to why NFO is charged interest in the application report? Please clarify or revise the Recology Application Executive Summary page 2 and Table H page 22. Please give me a call to discuss further or I can set up a conference call with Farouk and Hilary if we need additional clarification from the SBWMA. Thank You, Lillian Clark County of San Mateo Office of Sustainability County Manager’s Office

From: Tamera Del Bene [mailto:[email protected]] Sent: Friday, July 22, 2016 2:44 PM To: Joe La Mariana <[email protected]> Cc: Chuck Collins <[email protected]>; GinoGasparini <[email protected]>; MikeKelly <[email protected]>; Mario Puccinelli <[email protected]>; Hilary Gans <[email protected]>; Lillian Clark <[email protected]>; Ann Stillman <[email protected]>; Danielle Lee <[email protected]>; Jim Porter <[email protected]> Subject: Recology's 2017 Compensation Application‐‐Questions Good Afternoon, Attached please find Recology’s responses to the County of San Mateo comments of our Recology Rate Year 2017 Compensation Application. In addition to our responses, we have attached the schedule indicating tax roll revenue and Recology billed revenue for Rate Year 2015. Thank you for the opportunity to respond to your comments and questions. We look forward to our continued partnership in serving the residents and businesses in the North Fair Oaks and Unincorporated County of San Mateo areas. Best, Tammy

Tammy Del Bene Waste Zero Manager Recology® San Mateo County 225 Shoreway Road | San Carlos, CA 94070 T: 650.595.3900| [email protected] WASTE ZERO: Recycling Composting Garbage Join the Recology® San Mateo County online community on Facebook and Twitter.

________________________________________________________ SBWMA BOD PACKET 09/22/2016



3

This e-mail is confidential and intended only for the individual or entity named above. Please consider the environment before printing.

________________________________________________________ SBWMA BOD PACKET 09/22/2016



APPENDIX D

MEMBER AGENCY VARIANCE ANALYSIS OF TOTAL COLLECTION

COST AND RATE IMPACT



September 15, 2016

________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

98,861,313$


2016 Base Revenue Surplus / <Shortfall> $501,573 -0.5%

Total Contractor's CompensationBase Compensation 57,685,069$ 56,584,600$ (1,100,469)$ -1.9% -1.1%Agency Specific Contract Changes (422,253)$ (397,566)$ 24,687$ -5.8% 0.0%Incentives / Disincentives 26,604$ (14,802)$ (41,405)$ -155.6% 0.0%

Total Contractor's Compensation 57,289,420$ 56,172,233$ (1,117,186)$ -2.0% -1.1%

Pass-Through CostsDisposal & Processing Fees 26,633,767$ 29,450,676$ 2,816,909$ 10.6% 2.8%Agency Franchise & Other Fees 14,436,554$ 14,577,002$ 140,449$ 1.0% 0.1%

Subtotal Pass-Through Costs 41,070,321$ 44,027,679$ 2,957,358$ 7.2% 3.0%

TOTAL REVENUE REQUIREMENT 98,359,740$ 100,199,912$ 1,840,172$ 1.9% 1.9%


2017 Estimated Surplus / <Shortfall> (1,338,598)$


SBWMA TOTAL




2017 Variance

Appendix D SBWMA________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

3,097,872$


2016 Base Revenue Surplus / <Shortfall> 390,617$ -12.6%

Total Contractor's CompensationBase Compensation 1,452,198$ 1,405,617$ (46,581)$ -3.2% -1.5%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 192$ (212)$ (404)$ -209.9% 0.0%

Total Contractor's Compensation 1,452,390$ 1,405,405$ (46,985)$ -3.2% -1.5%

Pass-Through CostsDisposal & Processing Fees 924,390$ 1,012,566$ 88,176$ 9.5% 2.8%

Agency Franchise & Other Fees 330,474$ 330,949$ 475$ 0.1% 0.0%

Subtotal Pass-Through Costs 1,254,864$ 1,343,515$ 88,651$ 7.1% 2.9%

TOTAL REVENUE REQUIREMENT 2,707,254$ 2,748,920$ 41,666$ 1.5% 1.3%



Required Revenue Adjustment -11.3% -11.3%All numbers above are current estimates except 2016 Contractor's (Recology) Compensation which is final and 2017 Contractor's Compensation which is subject to Board Approval.



2017 VarianceAtherton

Appendix D Atherton________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

6,516,852$


2016 Base Revenue Surplus / <Shortfall> (364,462)$ 5.6%

Total Contractor's CompensationBase Compensation 3,695,653$ 3,587,095$ (108,558)$ -2.9% -1.7%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 929$ (698)$ (1,627)$ -175.1% 0.0%


Pass-Through CostsDisposal & Processing Fees 1,408,088$ 1,548,178$ 140,090$ 9.9% 2.1%

Agency Franchise & Other Fees 1,776,644$ 1,762,324$ (14,321)$ -0.8% -0.2%



2016 Estimated Surplus / <Shortfall> (363,090)$



2017 Variance




Belmont

Appendix D Belmont________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

10,655,270$



Total Contractor's CompensationBase Compensation 5,776,859$ 5,505,743$ (271,116)$ -4.7% -2.5%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 3,745$ (1,602)$ (5,347)$ -142.8% -0.1%



Agency Franchise & Other Fees 1,963,362$ 1,954,000$ (9,363)$ -0.5% -0.1%





Required Revenue Adjustment 1.4% 1.4%All numbers above are current estimates except 2016 Contractor's (Recology) Compensation which is final and 2017 Contractor's Compensation which is subject to Board Approval.



Burlingame2017 Variance

Appendix D Burlingame________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

4,537,544$



Total Contractor's CompensationBase Compensation 2,388,311$ 2,369,890$ (18,421)$ -0.8% -0.4%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 1,774$ (1,139)$ (2,913)$ -164.2% -0.1%



Agency Franchise & Other Fees 778,204$ 868,942$ 90,738$ 11.7% 2.0%









E Palo Alto2017 Variance

Appendix D East Palo Alto________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

5,559,729$



Total Contractor's CompensationBase Compensation 3,365,890$ 3,399,636$ 33,747$ 1.0% 0.6%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 1,763$ (961)$ (2,725)$ -154.5% 0.0%

Total Contractor's Compensation 3,367,653$ 3,398,675$ 31,022$ 0.9% 0.6%


Agency Franchise & Other Fees 407,585$ 407,275$ (311)$ -0.1% 0.0%





Required Revenue Adjustment -0.5% -0.5%



Foster City


2017 Variance

Appendix D Foster City________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

3,134,788$



Total Contractor's CompensationBase Compensation 2,397,992$ 2,313,237$ (84,755)$ -3.5% -2.7%Agency Specific Contract Changes (440,856.73)$ (416,527.89)$ 24,328.84$ -5.5% 0.8%Incentives / Disincentives 185$ (237)$ (422)$ -227.7% 0.0%


Pass-Through CostsDisposal & Processing Fees 690,534$ 757,436$ 66,902$ 9.7% 2.1%


Subtotal Pass-Through Costs 995,235$ 1,062,626$ 67,391$ 6.8% 2.1%





Hillsborough2017 Variance




Appendix D Hillsborough________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

10,164,462$



Total Contractor's CompensationBase Compensation 5,941,501$ 5,763,377$ (178,124)$ -3.0% -1.8%Agency Specific Contract Changes 24,429.00$ 24,529.00$ 100.00$ 0.4% 0.0%Incentives / Disincentives 2,255$ (1,199)$ (3,454)$ -153.2% 0.0%











Menlo Park2017 Variance

Appendix D Menlo Park________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

2,716,649$



Total Contractor's CompensationBase Compensation 1,744,455$ 1,725,366$ (19,089)$ -1.1% -0.7%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 848$ (399)$ (1,247)$ -147.0% 0.0%












North Fair Oaks2017 Variance

Appendix D North Fair Oaks________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

18,269,382$



Total Contractor's CompensationBase Compensation 10,207,515$ 9,981,163$ (226,352)$ -2.2% -1.2%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 5,802$ (3,003)$ (8,805)$ -151.8% 0.0%



Agency Franchise & Other Fees 2,642,113$ 2,642,095$ (18)$ 0.0% 0.0%








2017 VarianceRedwood City


Appendix D Redwood City________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

8,121,499$



Total Contractor's CompensationBase Compensation 5,018,791$ 5,029,382$ 10,591$ 0.2% 0.1%Agency Specific Contract Changes (5,825.00)$ (5,567.00)$ 258.00$ -4.4% 0.0%Incentives / Disincentives 1,968$ (1,212)$ (3,180)$ -161.6% 0.0%

Total Contractor's Compensation 5,014,933$ 5,022,603$ 7,670$ 0.2% 0.1%









2017 Variance



San Carlos

Appendix D San Carlos________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

21,404,288$



Total Contractor's CompensationBase Compensation 12,559,694$ 12,434,448$ (125,246)$ -1.0% -0.6%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 6,556$ (3,439)$ (9,995)$ -152.5% 0.0%











San Mateo2017 Variance

Appendix D San Mateo________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

% Rate Impact

1,477,604$


2016 Base Revenue Surplus / <Shortfall> (45)$ 0.0%

Total Contractor's CompensationBase Compensation 1,011,272$ 946,247$ (65,025)$ -6.4% -4.4%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 241$ (300)$ (541)$ -224.2% 0.0%

Total Contractor's Compensation 1,011,513$ 945,948$ (65,565)$ -6.5% -4.4%



Subtotal Pass-Through Costs 466,136$ 507,821$ 41,686$ 8.9% 2.8%

TOTAL REVENUE REQUIREMENT 1,477,649$ 1,453,769$ (23,879)$ -1.6% -1.6%

2016 Estimated Surplus / <Shortfall> 294$



West Bay



2017 Variance


Appendix D West Bay________________________________________________________ SBWMA BOD PACKET 09/22/2016




2016 Change2017 vs 2016 %

0 % Rate Impact

3,205,374$



Total Contractor's CompensationBase Compensation 2,124,939$ 2,123,400$ (1,539)$ -0.1% 0.0%Agency Specific Contract Changes -$ -$ -$ 0.0% 0.0%Incentives / Disincentives 345$ (403)$ (748)$ -216.8% 0.0%










2017 Variance


Unincorporated County


Appendix D Unincorp________________________________________________________ SBWMA BOD PACKET 09/22/2016



EXHIBIT B

MEMBER AGENCIES

REFUND AND PAYMENT BALANCES

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 10A EXHIBIT B - p1


Member Agency 2014 2015 2016 Total 2014 2015 2016 TotalAtherton ($895,936) ($279,189) ($1,175,125)BelmontBurlingame ($1,223,751) ($1,223,751)East Palo AltoFoster CityHillsboroughMenlo Park $183,561 $176,439 $360,000North Fair OaksRedwood City ($1,294,907) ($1,294,907)San CarlosSan MateoWest Bay Sanitary District ($32,545) ($35,586) ($68,131)County Unincrporated

Total ($3,447,139) ($314,775) ($3,761,914) $183,561 $176,439 $360,000

Footnote from Recology 2015 Revenue Reconciliation Report: "In June 2016, the City of Menlo Park remitted $360,000 to Recology to pay the 2013 ($160,011) and 2014 ($176,439) shortfalls in accordance with the Staff Report dated 2/9/16, Agenda Item 1-2. Recology has applied the 2013 shortfall above. The application of the 2014 shortfall remittance will be included in the 2016 Revenue Reconciliation. The remaining $23,550 of the $360,000 remittance is applied to the 2015 Revenue Reconciliation, above."

Payments from Member Agencies to RecologyRefunds from Recology to Member Agencies

Year Year

Per the request of Menlo Park staff, the City’s 2014 shortfall pre-payment to Recology of $176,439 (E.2) was added to reflect the City’s June 2016 payment to Recology of $360,000. (The reconciliation of the 2014 shortfall would typically be accounted for with submittal of Recology’s March 31, 2017 Revenue Reconciliation Report for Rate Year 2016.)

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 10A EXHIBIT B - p2


_________________________________________________________________________________________________________________ SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 10B - p1

STAFF REPORT To: SBWMA Board Members From: Cliff Feldman, Recycling Programs Manager Date: September 22, 2016 Board of Directors Meeting Subject: Update on Expiring Agreement with WM Curbside for Door-to-Door HHW Collection and

Options

Recommendation This staff report is to obtain direction from the Board for staff to proceed with one of the following two options:

1. Complete an Amendment to the contract with WM Curbside for the Board’s consideration at the October Board meeting to extend the term of the agreement for five years based on the pricing proposal provided as Attachment A; or,

2. Proceed with notifying the Member Agencies and residents that the Door-to-Door HHW collection service will be discontinued effective January 1, 2017.

It is important to note that extending the contract with WM Curbside for five years only provides each Member Agency the opportunity to decide if they want to continue offering this service to their residents and does not result in a budget impact to the SBWMA. In addition, Member Agencies can discontinue the service at any time with sixty days notice.

Summary On October 22, 2015 the Board approved the final one-year extension of contract between the SBWMA and WM Curbside, LLC to provide Door-to-Door Household Hazardous Waste (HHW) Collection Services that will now expire on December 31, 2016. The company has provided a pricing proposal to extend the current contract for five years (Exhibit A). If the contract with the SBWMA is extended, each Member Agency will be provided the opportunity to continue offering this service to their residents. If the contract is not extended, the service will be discontinued effective January 1, 2017 and staff will promptly commence implementing an outreach campaign informing all Member Agencies and residents that the service will be discontinued effective January 1, 2017. Staff has explored several alternatives to supplementing the HHW related services provided by the County HHW Program, including 1) partnering with the County to use the Tower Road facility to reduce the cost of the Door-to-Door HHW Program, 2) partnering with Recology to provide Door-to-Door HHW collection service, and 3) contracting with an independent company to offer HHW collection events. The County also confirmed that use of the Tower Road facility to handle the materials collected through the Door-to-Door Program would not be feasible; Recology foresees that providing cost-effective collection service will be challenging; and, contracting for HHW collection events will be explored further by staff including a budget impact assessment. The 2016 and the proposed 2017-2021 monthly cost to provide the Door-to-Door HHW collection service and the annual change in cost is provided in Table 1 on the next page.



Table 1

The pricing in Table 1 assumes 85,000 or more combined SFD and MFD customers participating and if less than 85,000 customers are participating the pricing increases due to loss of economy of scale. There are currently a total of approximately 144,000 (i.e., 93,000 SFD and 51,000 MFD) customers currently participating across all Member Agencies. Table 2 below provides the total expense of the Door-to-Door HHW service for 2016 and 2017, the additional revenue needed to cover the 2017 cost increase, the Member Agency 2017 collection revenue at 2016 rates and the rate impact of the cost increase.

Table 2

Year

SFD

Monthly

Cost

Monthly

Cost

Variance

SFD

Annual

Cost

Annual

Cost

Variance

MFD

Monthly

Cost

Monthly

Cost

Variance

MFD

Annual

Cost

Annual

Cost

Variance

2016 $0.47 $5.64 $0.22 $2.64

2017 $0.60 $0.13 $7.20 $1.56 $0.25 $0.03 $3.00 $0.36

2018 $0.67 $0.07 $8.04 $0.84 $0.29 $0.04 $3.48 $0.48

2019 $0.74 $0.07 $8.88 $0.84 $0.34 $0.05 $4.08 $0.60

2020 $0.81 $0.07 $9.72 $0.84 $0.38 $0.04 $4.56 $0.48

2021 $0.88 $0.07 $10.56 $0.84 $0.42 $0.04 $5.04 $0.48

2016 Cost and 2017‐2021 Proposed Cost

Single‐Family Dwelling (SFD) Multi‐Family Dwelling (MFD)

* The annual cost adjustment is based on a fixed increase plus CPI as noted in Exhibit A.

Member Agency

Number of

Single‐

Family

Dwellings

Number of

Multi‐

Family

Dwellings

Increase in

Revenue

Needed for

2017 HHW

Cost Increase

2017 Member

Agency

Collection

Revenue at

2016 Rates

(SBWMA Final

Report Table 8)

2017 Rate Impact

Percent of HHW

Program Expense

Increase

Atherton 2,340 $13,198 $16,848 $3,650 $3,097,872 0.118%

Belmont 6,759 3,973 $48,609 $59,154 $10,544 $6,516,852 0.162%

Burlingame 6,604 6,197 $53,607 $63,909 $10,302 $10,655,270 0.097%

EPA 4,155 3,068 $31,534 $38,016 $6,482 $4,537,544 0.143%

Foster City 6,747 5,144 $51,633 $62,159 $10,525 $5,559,729 0.189%

Hillsborough 3,646 $20,563 $26,251 $5,688 $3,134,788 0.181%

Menlo Park 7,829 4,651 $56,434 $68,647 $12,213 $10,164,462 0.120%

North Fair Oaks 2,626 178 $15,281 $19,377 $4,097 $2,716,649 0.151%

Redwood City 16,099 8,488 $113,207 $138,321 $25,114 $18,269,382 0.137%

San Carlos 8,608 2,992 $56,448 $69,876 $13,428 $8,121,499 0.165%

San Mateo 20,120 16,341 $156,617 $188,004 $31,387 $21,404,288 0.147%

WBSD 2,208 $12,453 $15,898 $3,444 $1,477,604 0.233%

County Uninc. 5,041 43 $28,545 $36,409 $7,864 $3,205,374 0.245%

SBWMA Total 92,782 51,075 $658,128 $802,868 $144,740 $98,861,313 0.146%

2016 Monthly Expense $0.47 $0.22

2017 Monthly Expense $0.60 $0.25

2016 Total

Expense

2017 Total

Expense



Table 3 provides the Total Rate Adjustment Percentage found as line F.3 of Table 8 in the SBWMA Final Report Reviewing the 2017 Recology Compensation Application and the change in these recommended rate adjustments if the 2017 HHW service cost increase is applied.

Table 3

Analysis The JPA holds the master contract with WM Curbside to provide the Door-to-Door HHW Collection Services and each Member Agency subscribes to this service at its own discretion. Calendar year 2016 will mark the first full year that all Member Agencies participated in this program based on the Member Agencies commencing participation gradually over the prior five years:

May 2010 - Belmont, Hillsborough, San Carlos and San Mateo August 2010 - Foster City, Menlo Park and West Bay Sanitary District March 2011 - East Palo Alto May 2012 - San Mateo County February 2013 - Burlingame March 2015 - Atherton and Redwood City

The Door-to-Door HHW Service collected over 2.1 million pounds of materials through 25,000 collections from the program’s inception in 2010 through July 2016. The materials collected are banned from landfill disposal due to their potential toxicity to the environment and associated health and safety hazards. For example, these materials include poisons, corrosives, flammables and other toxic and hazardous waste. In addition, the Door-to-Door HHW Service collects computers, computer screens and other electronics, antifreeze, used motor oil/filters, automotive lead-acid, household batteries and sharps. This service allows all residential and multi-family customers to schedule an unlimited number of collections each year for direct at home collection service. Residents interested in participating simply call the WM Curbside 1-800-HHW-PKUP hotline and request a “kit bag” to package their materials, then place it outside their home (e.g., in front of the garage door, on the front porch) on their collection day within the next two weeks for pick-up by WM Curbside (see an example of a promotional bill insert below). The primary alternative to the Door-to-Door Service is for

Member AgencyFinal Report

Table 8Table 8 with HHW Increase for 2017

Atherton -23.9% -23.8%Belmont 0.0% 0.2%Burlingame 2.6% 2.7%East Palo Alto 11.6% 11.7%Foster City -2.9% -2.7%Hillsborough -41.9% -41.7%Menlo Park 9.6% 9.8%NFO -0.8% -0.7%Redwood City -1.9% -1.7%San Carlos -5.3% -5.1%San Mateo 2.3% 2.4%WBSD -1.6% -1.4%Uninc. County -7.6% -7.6%Total SBWMA -1.0% -0.9%

Total Rate Adjustment Percentage (Line F.3 in Table 8)



residents to schedule an appointment with the County HHW Program and then drive their materials to the County’s Tower Road HHW Drop-off facility. Door-to-Door Customer Satisfaction Survey Residents that request Door-to-Door HHW collection service are provided a mail-back customer satisfaction survey. Over 5,500 surveys (approximately 20% of all participating customers) have been received and tabulated from 2010-2016, with the results provided below:

Degree of satisfaction with the program: o 92.3% - Excellent/Very Good o 96.4% - Excellent/Very Good/Good

Would you recommend the program to friends/neighbors?:

o 96.0% - Yes

Number of years the materials accumulated prior to collection: o 1-5 years - 41.0% o 6-10 years - 34.0% o 10+ years – 25.0%

Have you ever used the San Mateo County Tower Road facility?:

o 28.4% - Yes o 70.1% - No

Overall Customer Awareness of the Door-to-Door HHW Service Option In 2012, the SBWMA conducted a statistically significant research survey of residential customers with Godbe Associates and the results affirmed the low level of awareness of the Door-to-Door HHW Service option. When asked if residents were aware of the program, 58.9% answered “no they were not aware,” while 16.0% were aware and had used the program and another 25.1% were aware but did not use the program. Partnering with the San Mateo County HHW Program to Use the County’s Tower Road Facility An option to provide a more environmentally sound and cost effective door-to-door collection program would be to reduce the amount of miles driven by the collection vehicles. The WM Curbside collection vehicles are housed at the company’s facility in Tracy, CA and drive round-trip daily to collect from the SBWMA. WM Curbside looked to site their facility at closer locations including Hayward, San Jose and various sites in San Mateo County; however, for various cost and political reasons none were deemed feasible alternatives. Staff requested the County HHW Program to entertain the idea of handling the materials collected through the Door-to-Door HHW Service at their Tower Road facility which would significantly reduce the required truck travel to/from Tracy each day. The County HHW Program was provided the detailed monthly participation and materials collected data from the last few years in order to determine if they had the capacity to store and package these materials for shipment. Unfortunately, the County HHW Program informed the SBWMA that it would not be feasible for them to handle the volume of materials generated by the Door-to-Door HHW Service at their Tower Road facility. Thus, it is evident that the combined HHW materials generated through the Door-to-Door Service and the County HHW Program cannot feasibly be handled by the County HHW Program.



Partnering with the San Mateo County HHW Program to Use the Shoreway Environmental Center Staff will continue discussions with the County regarding a partnership to increase the opportunities for residents to safely and conveniently recycle and discard their HHW. One option that will be pursued is to develop a HHW drop-off facility at Shoreway which could benefit ratepayers by significantly increasing the existing drop-off capacity at Tower Road and additionally provide a convenient location along the 101 corridor. Pending discussions with the County, staff may include funding in the mid-year budget in January to pursue engineering and design work to develop a detailed cost analysis of expanding the services offered at Shoreway to include HHW drop-off. Partnering with Recology The SBWMA requested that Recology explore the idea of providing door-to-door HHW collection services, similar to those provided in San Francisco by Recology SF. Recology informed staff that they met with Recology SF program staff and remain open to the possibility of providing this service; however, the company is concerned about their ability to provide this service cost-effectively. HHW Program Costs RethinkWaste Door-to-Door HHW Service The current monthly cost to provide door-to-door HHW collection service is $0.47 per single-family home (i.e., $5.64/year) and $0.22 per multi-family living unit (i.e., $2.64). This expense is included in the Member Agencies solid waste rates and has been adjusted twice since the program started in 2010 with $0.01 increases the last two years only. The cost of this service allows each customer to obtain the service an unlimited number of times each year. The contract extension includes a one-time increase of $0.13 per month ($1.56 for 2017) for SFD and annual $0.07 ($0.84/year) increases in subsequent years (please refer to Table 1 above and Exhibit A). For MFD, the increase is $0.03-$0.05 per year. This pricing assumes 85,000 or more combined SFD and MFD customers participating and if less than 85,000 customers are participating the pricing increases due to loss of economy of scale. There are currently a total of approximately 144,000 (i.e., 93,000 SFD and 51,000 MFD) customers currently participating across all Member Agencies. The cost of the Door-to-Door HHW service compares favorably to other far less convenient options for residents to safely discard their HHW materials. In 2015, approximately 4,500 Member Agency households used the Door-to-Door service, while 4,000 households delivered their materials to the County HHW Program Tower Road facility (located in San Mateo near Hwy 680 and Ralston Road). The total cost in 2015 for the SBWMA service area for the Door-to-Door service was approximately $630,000, while the cost of the County’s HHW Program was approximately $1.26 million. The Door-to-Door HHW Service contract has a “most favored nations” clause and therefore WM Curbside must provide the services to the SBWMA Member Agencies at a lower cost than offered to other Bay Area communities. The services provided by the San Mateo County HHW Program are similar to those provided by other nearby counties for similar costs. Table 4 on the next page provides examples of the other WM Curbside Door-to-Door programs in the Bay Area and county operated permanent HHW drop-off facility costs for other Bay Area jurisdictions.



Table 4

San Mateo County Permanent HHW Drop-off Facility Program The San Mateo County Department of Health (i.e., County HHW Program and Local Enforcement Agency) is funded by receiving approximately 51% of the $9.83 per ton landfill surcharge fee imposed by the County on all solid waste tons deposited in County landfills. In 2015, approximately 530,307 tons were disposed, generating $5.2 million for the County. The landfill surcharge fee is paid by the SBWMA as part of disposal expense for each ton of waste delivered to Ox Mountain Landfill (this is a pass-through expense for the SBWMA that is included in the tip fees paid by the Member Agencies and the public). In 2015, SBWMA disposal totaled approximately 217,000 tons and generated approximately $2.1 million for the County. The County HHW Program reported1 to staff that 4,032 SBWMA customers used its services in 2015, which includes delivering materials to their Tower Road facility, for a total cost of approximately $1,263,000 or $313.24 per customer. Spreading this cost across the SBWMA single-family households, the monthly cost per household was approximately $1.13 in 2015. Table 5 on the next page provides a summary of the SBWMA Door-to-Door Service and County HHW Program resident participation and cost to provide HHW related services to the RethinkWaste service area in 2015.

Table 5

1 The participation data provided by the County is for calendar year 2015, while the cost information is for the County’s FY 2014/15. The related information for the SBWMA is for calendar year 2015.

Annual

Cost

Single‐Family

Household

Monthly Cost

Multi‐Family

Dwelling

Monthly

Cost

Single‐

Family

Household

Monthly

Cost

Multi‐

Family

Dwelling

Monthly

Cost

RethinkWaste 1 $630,000 $0.46 $0.22 TBD TBD

San Ramon 2 $173,421 $0.74 $0.25 $0.79 $0.25

Cupertino 3 $105,270 $0.51 $0.39 $0.51 $0.39

San Mateo County (SBWMA users only4) $1,263,000 $1.13

Contra Costa County $2,500,000 $1.10

Alameda County 5 $7,700,000 $1.23

Door‐to‐Door HHW Collection Services and County Permanent HHW Drop‐off Facilities Costs

Door‐to‐Door HHW

Collection Services

County Permanent

HHW Drop‐Off

Facility

5 The Alameda County HHW Program funds and operates three permanent facilities covering different areas of the County.

4 The San Mateo County HHW Program reported that approximately 4,000 SBWMA households used their program in 2015

at a cost of $1,263,000. The monthly cost is calculated based on dividing the 93,000 SBWMA single‐family households into

the County's 2015 total cost.

2017

2 San Ramon has 18,720 single‐family and 6,140 multi‐family customers. The current pricing is valid until September 30,

2016.3 Cupertino has 13,824 single‐family and 4,416 multi‐family customers. The current pricing is valid through December 31,

2016.

1 RethinkWaste has 93,000 single‐family and 47,000 multi‐family customers. The current pricing is valid through December

31, 2016

2016

Program Type Jurisdictions



WM Curbside San Ramon and Cupertino Door-to-Door HHW Programs Presently only two other jurisdictions in the Bay Area are provided door-to-door HHW collection service (i.e., Cupertino and San Ramon) by WM Curbside, similar to the services provided to the SBWMA Member Agencies. On September 12, 2016 San Ramon’s Finance Committee recommended extending their contract with WM Curbside through 2020 with pricing commencing in 2017 of $0.79 per household, and this item will be considered by the City Council on September 27, 2016. Background On February 26, 2009 the SBWMA Board of Director’s authorized staff to negotiate a contract with Curbside Inc. to provide door-to-door collection service of Household Hazardous Waste, Universal Waste, E-Scrap, Sharps and Medicine on behalf of Member Agencies that expressed an interest by April 2, 2009. Initially, seven Member Agencies expressed an interest to participate; however, all Member Agencies are currently provided the service. On October 22, 2009, the SBWMA Board of Director’s directed staff to execute a three year Agreement with Curbside Inc. (name of the company prior to WM Curbside, LLC) and this contract was executed on November 12, 2009 for service from January 1, 2010 through December 31, 2012. On November 18, 2010, the SBWMA Board approved Resolution No. 2010-36, authorizing the Executive Director to execute an extension to this contract for an additional two years through December 31, 2014. Resolution No. 2010-36 also provided the company authorization to assign the contract to WM Curbside, LLC and provided the SBWMA sole discretion to proceed with up to two one-year extensions. On October 22, 2015, the SBWMA Board approved Resolution No. 2015-28, authorizing the Executive Director to execute the final extension to this contract for an additional one year through December 31, 2016.

Fiscal Impact There is no fiscal impact to the SBWMA associated with extending the contract for the Door-to-Door HHW Collection Service, because the cost of the program is a pass-through cost for the SBWMA and thus is paid directly by the Member Agencies as part of the solid waste rates charged to ratepayers. The SBWMA FY16/17 budget allocated $80,000 for public education and outreach for this program. Attachments:

Attachment A – Five-Year Contract Extension Pricing from WM Curbside

HHW Program Option# of

Customers

% of

CustomersAnnual Cost

% of Annual

Cost

RethinkWaste Door‐to‐Door Program 4,570 53.1% $630,000 33.3%

County HHW Tower Road Drop‐Off Facility

(SBWMA Households Only)4,032 46.9% $1,263,000 66.7%

Total 8,602 100.0% $1,893,000 100.0%

2015 Participation and Cost


Year

SFD

Monthly

Cost

CPI

Amount 1

Fixed

Increase

MFD

Monthly

Cost

CPI

Amount 1

Fixed

Increase

2016 $0.47 $0.01 $0.00 $0.22 $0.01 $0.00

2017 $0.60 $0.01 $0.12 $0.25 $0.01 $0.02

2018 $0.67 $0.01 $0.06 $0.29 $0.01 $0.03

2019 $0.74 $0.01 $0.06 $0.34 $0.01 $0.04

2020 $0.81 $0.02 $0.05 $0.38 $0.01 $0.03

2021 $0.88 $0.02 $0.05 $0.42 $0.01 $0.03

If less than 85,000 of more combined SFD and MFD households are participating:

Year

SFD

Monthly

Cost

CPI

Amount 1

Fixed

Increase

MFD

Monthly

Cost

CPI

Amount 1

Fixed

Increase

2016 $0.47 $0.01 $0.00 $0.22 $0.01 $0.00

2017 $0.70 $0.01 $0.22 $0.31 $0.01 $0.07

2018 $0.75 $0.01 $0.04 $0.34 $0.01 $0.02

2019 $0.80 $0.01 $0.04 $0.38 $0.01 $0.03

2020 $0.86 $0.02 $0.04 $0.41 $0.01 $0.02

2021 $0.91 $0.02 $0.03 $0.43 $0.01 $0.011 Estimated result of annual CPI calculation prescribed in the current Agreement for

2017-2021.

WM Curbside Door-to-Door HHW Collection Service 5-Year Contract

Extension Pricing

If 85,000 of more combined SFD and MFD households are participating:

SFD Annual Pricing Adjustment =

CPI + Fixed Increase

MFD Annual Pricing Adjustment

= CPI + Fixed Increase

SFD Annual Pricing Adjustment =

CPI + Fixed Increase

MFD Annual Pricing Adjustment

= CPI + Fixed Increase

________________________________________________________ SBWMA BOD PACKET 09/22/2016




Agenda Item 10C Update on Franchise Agreement Negotiations Committee

Discussion item only at the September 22, 2016 Board of Directors Meeting


SHOREWAY OPERATIONS AND

CONTRACT MANAGEMENT

Agenda Item 11


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 11A– p2

STAFF REPORT To: SBWMA Board Members From: Hilary Gans, Facility Operations Contracts Manager Farouk Fakira, Finance Manager Date: September 22, 2016 Board of Directors Meeting Subject: Resolution Approving 2017 South Bay Recycling Compensation Application Recommendation Staff recommends the Board approve of Resolution 2017-36 attached hereto authorizing the following action:

Approval of 2017 South Bay Recycling (SBR) Compensation Application. Exhibit A contains the SBWMA Final Report - Review of 2017 South Bay Recycling Compensation Application for Board consideration. Analysis The recommended 2017 overall compensation adjustment for SBR is negative 1.8% which compares favorably to last year’s adjustment of 1.3%. The decrease in 2017 is the result of a decrease in fuel cost index and modest increases in labor and other indexes which govern the rate of SBRs’ costs adjusted as established in the Operations Agreement. The SBWMA staff conducted the review of the SBR Compensation Application and worked closely with the company to ensure that questions and concerns were answered and their application was modified as necessary to address any changes. Staff has verified that the SBR Compensation Application is complete and meets the requirements of the Agreement. The recommended rate adjustment are summarized in Table 1 below. Table 1

South Bay Recycling

Total Cost Payment/Ton % Total Cost Payment/Ton

Transfer Station 4,591,437$ 12.84$ 0.7% 4,621,962$ 12.92$

Recyclable Materials Processing, net of Residue 5,903,808$ 84.49$ 1.1% 5,971,246$ 85.39$

Transport (cost/ton-mile ) 6,548,766$ 1.08$ -6.0% 6,156,049$ 1.02$

- 18.31$ -6.0% - 17.21$

17,044,011$ -1.7% 16,749,257$


164,898$ -20.1% 131,712$

Construction Management -$ -$

Interim Operations -$ -$

825,000$ 0.0% 825,000$

989,898$ -3.4% 956,712$

18,033,909$ -1.8% 17,705,969$

Note: Buyback payments have been changed to reflect currect payment amount - 2016 total therefore will not tie to last year's Rate Report.

Total Contractor Pass-Through Cost

Total Compensation

Total Operating Cost

Total Interest

Buyback Payments Estimate

2016 Payment/Ton vs. 2017 Payment/Ton

Transport (cost/ton)

Adjustment

Operating Cost

20172016

(Note: the total costs shown in the above table are for illustration purposes only. SBR is paid the approved fee per ton on the actual tons received at the Shoreway facility).



Background Each year, the SBR Final Rate Report is brought forward to the Board simultaneously with the Recology San Mateo County (RSMC) Rate Report. On July 1, 2016 SBR submitted a 2017 Compensation Application report to the SBWMA as required under the Shoreway Operations Agreement in Article 7.12 (which prescribes the process by which this application is reviewed and the company’s compensation is approved). The SBWMA staff reviewed the SBR 2017 Compensation Application for completeness, accuracy and consistency and issued a SBWMA Draft Report Review of 2017 South Bay Recycling Compensation Application on August 15th. The SBWMA staff requested that Member Agencies provide input on the Daft Report by August 26th. No comments were received from Board Members or Member Agency staff and no changes were made to the Compensation Application. It is important to note that the approved compensation for SBR will be part of the calculation to arrive at the 2017 tipping fees to be charged at the Shoreway Facility (The Shoreway tip fees are based on all the SBWMA operating costs - composed of disposal and processing expense, franchise fees to City of San Carlos, SBWMA program budget, debt service payments, less commodity revenue) Disposal and processing expense based on estimated Shoreway tipping fees are included as a pass-through expense in the calculation of each Member Agency’s total Revenue Requirement (shown as “Disposal and Processing Fees” in Table 8, line A4 of the SBWMA Report Reviewing the 2017 Recology San Mateo County Compensation Application) for setting solid waste collection rates. Fiscal Impact The recommended 2017 overall compensation adjustment for SBR is negative 1.8% which compares favorably to last year’s adjustment of 1.3%. Details of SBR compensation can be found in Exhibit A: SBWMA Final Report - Review of 2017 South Bay Recycling Compensation Application.

Attachments: Resolution 2017-36 Exhibit A - SBWMA Final Report - Review of 2017 South Bay Recycling Compensation Application




MANAGEMENT AUTHORITY BOARD OF DIRECTORS APPROVING 2017 SOUTH BAY RECYCLING COMPENSATION APPLICATION

WHEREAS, The South Bayside Waste Management Authority (SBWMA) prepared and issued to the SBWMA Board of Director’s on August 15, 2016 the SBWMA Draft Report on Review of 2017 South Bay Recycling (SBR) Compensation Application (Report); and

WHEREAS, SBWMA staff requested Board Member and Member Agency review of a Draft Report concurrent with review of the Draft Report on 2017 RSMC Compensation Application and requested comments, questions and concerns to be submitted by August 26, 2016; and

WHEREAS, SBWMA revised the Draft Report based on any comments received from Board Members and Member Agencies and additional information provided by SBR and issued the Final Report (Exhibit A) to the Board of Directors; and

WHEREAS, the Final Report recommends adjustments to SBR’s compensation from its 2016 base costs to 2017.

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby approves the SBWMA Final Report on Review of 2017 South Bay Recycling Compensation Application.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 22th day of September, 2016, by the following vote:

I HEREBY CERTIFY that the foregoing Resolution No. 2016-36 was duly and regularly adopted at a regular meeting of the South Bayside Waste Management Authority on September 22, 2016.

____________________________________ Bob Grassilli, Chairperson of SBWMA

ATTEST: _________________________________ Cyndi Urman, Board Secretary


Atherton Menlo Park Belmont Redwood City Burlingame San Carlos East Palo Alto San Mateo Foster City County of San Mateo Hillsborough West Bay Sanitary Dist.


SBWMA REPORT REVIEWING 2017 SOUTH BAY RECYCLING


September 8, 2016

________________________________________________________ SBWMA BOD PACKET 09/22/2016



SBWMA REVIEW OF SBR’S 2017 COMPENSATION ADJUSTMENT APPLICATION

TABLE OF CONTENTS SUMMARY SECTION 1. SBR Compensation Adjustment and Rate Setting Process A. Shoreway Operations Agreement Terms .............................................................................................. 1 B. Calculation of Total Collection Revenue Requirement .......................................................................... 1 C. Description of SBR’s Fees and Service Elements ................................................................................ 3 D. Compensation Adjustment Process ...................................................................................................... 3 E. Commodity Revenue Sharing ............................................................................................................... 4 SECTION 2. South Bay Recycling 2017 Compensation Application A. Analysis of SBR 2017 Compensation Application ................................................................................. 5 B. Description of 2017 Compensation Adjustments .................................................................................. 5 SECTION 3. Recommended SBR Fees Per Ton for 2017 .......................................................................... 7

APPENDICES

Appendix A – SBR Cost Adjustment Worksheets

________________________________________________________ SBWMA BOD PACKET 09/22/2016



SBWMA REVIEW OF SBR’S 2017 COMPENSATION ADJUSTMENT APPLICATION Page 1

SUMMARY

The 2017 Shoreway Tip Fees are the basis for setting the Shoreway Pass-Through expenses that become part of the Total Collection expense and Revenue Requirement for each Member Agency upon which it sets its solid waste rates for 2017. The compensation paid to South Bay Recycling (SBR) for operations of the Shoreway Facility are a component of the Shoreway Tip Fee. After review of SBR’s Compensation Adjustment Application, the Total Compensation for SBR in 2017 is recommended to be $17,705,969, which is $327,940 (-1.8%) lower than in 2016.

SECTION 1. SBR Compensation Adjustment and the Rate Setting Process A. Shoreway Operations Agreement Terms

South Bay Recycling, LLC (SBR) was selected as the facility operator on April 23, 2009, and a final Shoreway Operations Agreement (“Agreement”) was approved by the Board on July 23, 2009. Article 7 and Attachments 13-A and B of the Agreement prescribe that the SBWMA is responsible for conducting the annual review and analysis of SBR’s compensation application due by July 1st each year. The SBWMA is charged with performing a thorough review to ensure the application is complete and follows the prescribed compensation adjustment methodology in the Operations Agreement to arrive at the recommended 2017 fees per ton contained in this report. This rate application provides the basis for adjusting SBR’s approved fees (SBR is paid monthly based on the approved fees per ton times the actual number of tons processed and transported at Shoreway).

B. Calculation of Total Collection Revenue Requirement

The approved 2017 compensation for SBR will be bundled with all other SBWMA operating budget expenses (e.g., disposal expense, franchise fees paid to the City of San Carlos, debt service, SBWMA program budget, etc.) to set the 2017 Shoreway Tip Fees. The 2017 Shoreway Tip Fees are the basis for setting the Shoreway Pass-Through expenses that become part of the Collection expense and the total Revenue Requirement for each Member Agency upon which solid waste rates for 2017 are set. (These costs are described in detail in Other Pass-Through Costs” in the 2017 Recology Draft Rate Report and are the result of the Shoreway tipping fees charged on the solid waste and organics tons delivered to Shoreway throughout the year). The Flow Diagram of SBWMA Budget and Collection Rate Setting Process on the following page shows how the SBR-Shoreway Operations Expense (tan color) serves as the starting point for computing the Total Waste System Revenue Requirement that forms the basis for the Member Agency Rate Setting process.

________________________________________________________ SBWMA BOD PACKET 09/22/2016




FLOW DIAGRAM OF SBWMA BUDGETSBWMA Agency Budget &

(Shoreway Operations, Programs & Admin.) COLLECTION RATE SETTING PROCESS

SBR-Shoreway Operations Expense

(MRF, TS, Trans Exp)

Offsite Disposal & Processing

Garbage, Organics, C&D)

SBWMA Program & Administration

(Oversight, Outreach, Admin.)

Capital Expenditures

(Shoreway Maint & Enhancement)

San Carlos Fee

(%5 Gross Tip Fee Revenues)

Other Expenses

(Bond P&I Payment, Pass-through)

Shoreway Revenues

(Commodity & Host Fee Rev.) Member Agency Rate Setting

* Tip Fee Revenue Requirement Tip Fee Revenue Requirement

(Franchise & Non-Franchise) (Franchise Tons ONLY)

Recology-Collection Services

* Tip Fees Revenue Requirement Goals (Commercial and Residential)

- Meet Bond Covenant Tests- Meet Board Reserve Balances Pass-Through Expenses

Rate Stabilization Reserve (HHW, Other)Emergency ReserveUndesignated Reserve (Capital Projects) Member Agency Franchise Fees

(MA's Set Franchise Fees)

Total Waste System Revenue Requirement(Member Agency's Set Rates)

+

+

+

+

+

+

=

+

+

+

+

=

________________________________________________________ SBWMA BOD PACKET 09/22/2016




C. Description of SBR Fees and Service Elements The process for adjusting SBR’s compensation are detailed in the Operations Agreement in Article 7.03 and Attachment 13-A of the Agreement,

SBR’s compensation includes three core services elements that are paid on a per-ton basis:

Transfer Station Processing Recyclable Materials Processing Transportation to Disposal and Processing Sites

The fees for the above service elements are each comprised of distinct cost components:

A. Labor Costs B. Fuel and Power Costs C. Depreciation Cost D. Other Operating and Maintenance Costs

The above cost components have the following subcomponents:

A. Labor Costs Wages for CBA labor (index) Benefits for CBA labor (index) Workers’ compensation insurance (CBA labor) (index) Payroll taxes (CBA labor) (non-index) Outside contracted workers from third-party sources (VRS) (index)

B. Fuel and Power Costs Electricity (based on actuals/non-index) Fuel (index)

C. Depreciation Cost (no adjustment) D. Other Operating and Maintenance Costs (index)

Wages and benefits for non-CBA employees Wages and benefits for CBA clerical Repair and maintenance expenses Equipment rental expenses Other vehicle-related expenses (e.g. licensing, taxes) Insurance, safety and claims Other general & administrative expense

D. Compensation Adjustment Process A major goal for the Shoreway Operations Contractor selection process concluded in 2010 to make the contractor’s compensation adjustment process more predictable and transparent. This cost adjustment methodology is the basis for SBR’s Rate Application submittal and the SBWMA staff’s subsequent review to ensure accuracy and consistency with the requirements of the Operations Agreement. The compensation adjustment process uses the approved 2016 fees paid to SBR as the basis for adjustment to the new 2017 fees. As detailed in the Agreement, the adjustment process for the 2016 Fees structure is illustrated in following chart. (Article 7.05 and Attachment 13-A of the Operations Agreement prescribes a detailed cost adjustment methodology that ties most of the cost adjustments to standard indexes (i.e., CPI).

________________________________________________________ SBWMA BOD PACKET 09/22/2016




E. Commodity Revenue Sharing A portion of SBR’s compensation comes from the sale of commodities through the “Commodity Revenue Share” program where the commodity revenues from the recyclable materials processed at the Shoreway MRF are split between SBWMA and SBR: in the Commodity Revenue Share program, SBR receives a minority share of the MRF commodity revenues as an incentive to maintain high recovery and obtain the best commodity sales prices. In year 2016, the Commodity Revenue Share to SBR was 28% and while the SBWMA retained 72% of the commodity sales revenue above the Revenue Guarantee. As a result of SBR’s continued good performance in maintaining low MRF residue (the MRF residue rate remained at 7%), SBR is again eligible for a 28% share of commodity sales revenue (see Article 7.07 of the Agreement - Residue-Reduction Incentive Program).

ADJUSTMENT2017 CONTRACTORS

COMPENSATION

CBA: TS/MRF, Mechanics, Drivers, &

Clerical (wages and benefits)

+ Index = Base plus Adjustment

Other Cost + Index = Base plus Adjustment

Power +Blend of actual PG&E rate & ISH Solar rate

= Base plus Adjustment

Depreciation + No Change = Last Year's Depreciation

+Based on operating ratio

in Proposal= Base plus Adjustment

InterestInterest is fixed on

sliding scale based on final capital cost

Annual Interest Expense per Interest Schedule

Other

Actual cost reimbursed (i.e., Buyback

payments, new regulatory fees, etc.)

Actual Cost

+ Total of Above = Total of Above

SBWMA - CONTRACTOR COST ADJUSTMENT PROCESS

BASE COST - 2016

Total Base Conpensation

Profit

Pass-Through Cost

________________________________________________________ SBWMA BOD PACKET 09/22/2016




Note: the actual value of the revenue share is not shown in this report, since it is based on the actual tonnage and commodity revenue for the full-year of 2016. Hence, an estimate is used in the SBWMA Annual Budget and calendar year projections. As a point of reference, the commodity sales revenue share paid to SBR in year 2016 was $825,285.

SECTION 2. SBR 2017 Compensation Application A. Analysis of SBR 2017 Compensation Application

SBWMA staff conducted the review of the Compensation Application submitted by SBR and worked closely with the company to ensure that questions and concerns were answered. Their application was modified as necessary to address any changes. Staff has verified that the SBR Compensation Application is complete and meets the requirements of the Operations Agreement. As shown in Table 1. below, the Total Compensation for SBR in 2017 is recommended to be $17,705,969, which is $327,940 (-1.8%) lower than in 2016.

Note: Total Operating Cost shown in the table are estimated since costs are based on actual tons delivered to Shoreway throughout the year.

B. Description of 2017 Compensation Adjustments

Costs in the SBR Compensation Application are adjusted primarily based on changes in indexes. Cost categories are adjusted based on the following criteria:

- Labor Cost (CBA for Operators, Mechanics, Drivers, and Clerical) – adjusted by CPI index - Power Cost - adjusted based on the actual change in power rates - Fuel Cost - adjusted by a fuel index - Other Operating Costs - various indices such as CPI - Depreciation Cost - not adjusted - Interest Expense - based on fixed schedule

Labor Cost Adjustment CBA wage and benefits are adjusted based on changes to the CPI index. The Labor Cost component represents the largest cost component in SBR’s compensation. Table 2. shows the individual index changes to Labor for 2017.

Table 1

South Bay Recycling

Total Cost Payment/Ton % Total Cost Payment/Ton

Transfer Station 4,591,437$ 12.84$ 0.7% 4,621,962$ 12.92$

Recyclable Materials Processing, net of Residue 5,903,808$ 84.49$ 1.1% 5,971,246$ 85.39$

Transport (cost/ton-mile ) 6,548,766$ 1.08$ -6.0% 6,156,049$ 1.02$

- 18.31$ -6.0% - 17.21$

17,044,011$ -1.7% 16,749,257$


164,898$ -20.1% 131,712$

Construction Management -$ -$

Interim Operations -$ -$

825,000$ 0.0% 825,000$

989,898$ -3.4% 956,712$

18,033,909$ -1.8% 17,705,969$

Note: Buyback payments have been changed to reflect currect payment amount - 2016 total therefore will not tie to last year's Rate Report.

Total Contractor Pass-Through Cost

Total Compensation

Total Operating Cost

Total Interest

Buyback Payments Estimate

2016 Payment/Ton vs. 2017 Payment/Ton

Transport (cost/ton)

Adjustment

Operating Cost

20172016

________________________________________________________ SBWMA BOD PACKET 09/22/2016




Pass-Through Costs Pass-through costs are not subject to profit but are reimbursed to SBR at actual cost. The pass-through costs in the Facility Operations Agreement (Article 7.09) are as follows:

Payments to buyback customers for purchase of recyclables are a pass-through expense. (Actual buyback payments to public customers will be reimbursed monthly in arrears).

Changes to regulatory fees quality as pass-through costs. Interest expense on allowed capital (paid to SBR monthly at one-twelfth of the annual interest expense

denoted in Attachment 13A, Interest Cost Form 3-M which schedules-out interest expense for the ten-year life of the contract on a sliding scale). The annual interest expense for 2017 is $131,712, a 20% reduction from 2016.

The results of the index-based cost adjustments for the 2017 rates are summarized in Table 2. and summary of the cost adjustments for 2017 by all cost categories is presented in Table 3.

Table 2

1

2016 2015 2014 2013

Avg. Index - April 124.78 122.63 119.78 117.55

% Change 1.75% 2.38% 1.89% 1.93%

2

2016 2015 2014 2013

Avg. Index - April 125.08 123.45 120.50 118.07

% Change 1.32% 2.45% 2.06% 1.87%

3

2016 2015 2014 2013

Index (Annual) 237.87 236.66 234.15 230.76

% Change 0.51% 1.07% 1.47% 1.69%

4

2016 2015 2014 2013

Index 158.41 256.49 314.87 323.28

% Change -38.24% -18.54% -2.60% -0.78%

Cost Adjustment for Index Changes

p , , y p yCost Index for Total All workers (not seasonally adjusted, total benefits, series no. CIU2030000000000A).

FUEL COSTS: Fuel

OTHER OPERATING AND MAINTENANCE COSTS

p y(VRS)

DEPRECIATION - there is no adjustment to depreciation expense in 2017.

Commodity Index for #2 diesel fuel (not seasonally adjusted, fuels and related products and power, series no. wpu057303).

pUrban Consumers, U.S. city average (not seasonally adjusted, all items, base period: 1982-84=100, series no. cuur0000sa).

COST CATEGORY

LABOR COSTS: CBAs Wages & BenefitsIndex: U.S. Department of Labor, Bureau of Labor Statistics, Private Industry Employment Cost Index for Service-Producing Industries (seasonally adjusted, total compensation, series no. (cis201s000000000i)

________________________________________________________ SBWMA BOD PACKET 09/22/2016




SECTION 3. SBR per ton Fee Adjustment for 2017 After review of the SBR Compensation Adjustment Application, staff recommends the following Fees be paid to SBR on a per-ton basis for 2017:

o Transfer Station Processing Fee. The 2017 Transfer Station fee is $12.92 per Ton.

o MRF Processing Fee. The 2017 MRF Processing fee is $85.39 per ton (note the Contractor pays for MRF

residue transportation and disposal which is deducted from MRF Processing Fee resulting in an Estimated Net MRF Processing Fee).

o Transportation Fee. There are multiple transportation fees for each material type (i.e., solid waste, inerts,

construction and demolition, and organics) and for each destination. The average 2017 Transportation Fee is $1.02 per ton mile which is 6% lower than prior year (the transportation rate detail for each material type and destination are presented in the Appendix A – SBR Compensation Adjustment Application Worksheets).

Cost Component Adjustment Basis Description

Labor - (all CBAs )

Wages 1.75% IndexCBA wages compensation adjustment based on index change.

Benefits 1.75% IndexCBA benefits compensation adjustment based on index change.

Worker's Comp Insurance 1.32% Index

Workers compensation adjustment based on index change.

Payroll Tax 1.75%Wages & tax rate change

The payroll tax rate changes with any changes in federal or state payroll tax rates.

VRS Labor non-CBA 1.32% IndexNon-CBA (VRS) compensation adjustment based on index change.

Power 5.37%PG&E & Solar

RatesPower is adjusted by the blend of actual PG&E electricity rates and the Solar Power rate.

Fuel -38.2% IndexFuel expense is adjusted by the actual change in the fuel index.

Depreciation 0.0% n/a There is no adjustment to depreciation.

Other O&M 0.51% Index

Other O&M expense includes non-CBA personnel, maintenance parts, insurance, general office expense, safetly, etc. Other O&M expense is adjusted by 80% of an index.

Results of Cost Adjustments

The cost components are adjusted from prior year . For all four CBA contracts and non-CBA costs, various indexes are used to adjust cost.

Table 3

________________________________________________________ SBWMA BOD PACKET 09/22/2016




Table 4. below provides the fee paid to SBR in 2016, the adjustment for 2017 and the Fee to be paid to SBR in 2017. The total adjustment to SBR’s compensation from year 2016 to year 2017 is negative 1.8%

Table 4

2016 Adjustment 2017

Cost Components Fee/Ton % Fee/Ton

Transfer Station 12.84$ 0.7% 12.92$

Recyclable Materials Processing, gross 84.49$ 1.1% 85.39$

Transport Blended Total (cost/ton-mile) 1.08$ -6.0% 1.02$

Total Adjustment -1.8%

SBR - 2017 Fee Adjustments to Basic Compensation

________________________________________________________ SBWMA BOD PACKET 09/22/2016




STAFF REPORT To: SBWMA Board Members From: Joe La Mariana, Executive Director Date: September 22, 2016 Subject: Resolution Authorizing the Executive Director to Execute a Contract with Signal

Restoration Services

Recommendation It is recommended that the SBWMA Board of Directors approve the attached resolution authorizing the Executive Director to execute a contract with Signal Restoration Services. Summary Staff requests that the Board approve the attached contract with Signal Restoration Services for cleanup work which must occur before any repairs can be made to the equipment damaged by last week’s fire at the Recology Center. Background On Wednesday, September 7, 2016, a 4-alarm fire occurred at the Shoreway Environmental Center Materials Recovery Facility located on SBWMA’s 16-acre solid waste handling facility in San Carlos. As a result of the fire, operations at the facility have been suspended. On September 8, 2016, a claim was made through SBWMA’s broker, Risk Strategies. A claims adjustor was immediately assigned and representatives from SBWMA’s insurance carrier have been on site since that time. One of the adjustor’s first requests was that Signal Restoration Services be engaged to begin an immediate cleanup of the facility. Pursuant to the Executive Director’s authority under SBWMA’s Purchasing Policies, Section 3.12.260, Consultants, the Executive Director has executed a purchase order with Signal Restoration Services in an amount not to exceed $50,000 and cleanup has already begun. Staff now recommends that the Board of Directors approve the attached contract with Signal Restoration Services because the full scope of cleanup is estimated to be $500,000. The contract scope of work is defined as, “Dry ice blast and clean the soot from the building followed by pressure washing and painting as necessary.” Signal Restoration Services has extensive experience in this type of cleanup work, is the preferred vendor recommend by SBWMA’s insurance carrier and Signal Restoration Services’ staff has provided excellent service to date. Fiscal Impact The contract with Signal Restoration Services provides for billing on a time and materials basis. (See Exhibit A.) As noted above, the estimated cost of their services is $500,000. Costs incurred as a result of this contract will be submitted as part of SBWMA’s insurance claim. The coverage limits under SBWMA’s policy are:

$37 Million Buildings $20 Million Personal Property $4.5 Million Business Income



Attachments:

Resolution 2016-37 Exhibit A - Contract with Signal Restoration Services




MANAGEMENT AUTHORITY BOARD OF DIRECTORS AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A CONTRACT WITH SIGNAL RESTORATION

SERVICES

WHEREAS, the South Bayside Waste Management Authority (SBWMA) Board of Directors has considered entering into a contract with Signal Restoration Services for the purpose of providing the following services at 225 Shoreway Road, San Carlos, California: Dry ice blast and clean the soot from the building followed by pressure washing and painting as necessary

NOW, THEREFORE BE IT RESOLVED that the South Bayside Waste Management Authority hereby authorizes the Executive Director to execute a contract with Signal Restoration Services, attached hereto as Exhibit A.

PASSED AND ADOPTED by the Board of Directors of the South Bayside Waste Management Authority, County of San Mateo, State of California on the 22 day of September, 2016, by the following vote:





WHITE- Customer Copy YELLOW- Signal Restoration Copy

7221 Orangewood Avenue

Garden Grove, CA 92841 Phone#: (714) 763-4153 / Fax : (714) 276-0607

Contractor’s License # : 986693

Job #: 0916-025MIST

COMMERCIAL PROJECT AGREEMENT AND WORK AUTHORIZATION

This Commercial Project Agreement and Work Authorization (“Agreement”) is entered into on Monday,

September 12, 2016, between Signal Restoration West, LLC, dba Signal Restoration Services, whose address is 7221 Orangewood Avenue, Garden Grove, CA 92841, Contractor’s License No. 986693 (“Signal”) and South Bayside Waste Management Authority #333 – Hilary Gans (“Customer”). The job site for the services to be performed is: 333 Shoreway Rd., San Carlos, CA 94070. This agreement is entered into in Garden Gove, CA. The person or persons whose signature appears on this Agreement represents and warrants, both personally and on behalf of the owner, that such person is duly authorized to execute this Agreement.

1. Description/Scope of Work. Customer is the property owner, manager, tenant and/or responsible representative who hereby authorize Signal to provide the services listed:

Dry ice blast and clean the soot from the building followed by pressure washing and painting as necessary.

Signal may hire or engage subcontractors to perform and complete all or any portion of the work. Signal is not required to perform to a state-of-the-art standard, but rather shall be required to conform to the state-of-practice standard. Customer will provide all water, electricity and other utilities necessary for Signal to perform its work.

2. Payment for Services. Customer agrees to pay Signal for all labor, materials, and equipment utilized to

mobilize, demobilize, commence, perform the work described above and invoiced in accordance with Signal’s T&M Rate Schedule dated January 1, 2016. Signal’s rate schedules do not include any applicable taxes, fees, or prevailing wages (if they do apply), which will be separately itemized and charged to Customer. If local prevailing wage rates apply for the labor categories utilized on this job, a Prevailing Wage Addendum will attach to this Agreement. Customer is liable for all work Signal performs, whether or not such work is covered by insurance. Payment is due within thirty (30) days from the date of each invoice unless Customer has already forwarded a bankable insurance draft to Signal for the portion of work invoiced by Signal. Customer agrees to pay their insurance deductible to Signal if their insurer deducts the deductible for any insurance draft for Signal’s work. Interest shall accrue on any payments not received on time at the rate of one and one-half percent (1.5%) per month. In the event of a dispute, Customer agrees to immediately pay all undisputed amounts due under this Agreement. Customer assigns to Signal their right, title and interest of the insurance proceeds invoiced under this Agreement to Signal. Customer also agrees to cooperate for required insurance or municipal inspections and to direct their insurer to make Signal a named party on all insurance drafts for the work performed.

3. Limitation of Liability. Neither the Customer not Signal shall be liable for any special, indirect, or

consequential damages. This limitation includes, but is not limited to, all claims for personal injuries, damage to property, and lost profits. Signal shall not be responsible or liable for pre-existing, existing, or post existing, sick building syndrome, building related illness, or complaints. In the case of wet floors, slippery surfaces from water, fire damaged, etc., the Customer will oversee and provide security and safety for the work area.

4. List of Documents to be Incorporated into the Agreement. The Standard Commercial Project Terms

and Conditions of Signal in effect as of the date of this agreement (which have been provided to Customer and Customer has acknowledged receipt) are hereby incorporated by reference as though set forth at length. The Signal T&M Rates and Prevailing Wage Addendum (should prevailing wage rates apply). Should any term in the terms and conditions contained in the Standard Commercial Project Terms and Conditions contradict or conflict with the provisions set forth in this Agreement, the terms and conditions in this Agreement shall be controlling.

5. Authorization to Enter Into Agreement. The person or persons whose signature appears on this

Agreement represents and warrants, both personally and on behalf of the owner, that such person is duly authorized to execute this Agreement. If the party executing this Agreement is a tenant, manager, agent or interested third party, such party represents and warrants that he/she is authorized to sign on behalf of an absentee property owner during an emergency, if the property owner is not present at the time of the emergency.

6. Attorney’s Fees and Costs. The parties agree that in an action for a breach of this Agreement, that the

Prevailing Party will be entitled to Reasonable Attorneys' Fees, costs and expert witness fees in addition to any other relief to which that party may be entitled. Venue will be in a court of competent jurisdiction. Customer By: ___________________________________ Its: ___________________________________ Date: ___________________________________

Signal Signal Restoration West, LLC, dba Signal Restoration Services By: ___________________________________ Its: ___________________________________ Date: ___________________________________

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 11B EXHIBIT A - p1


WHITE- Customer Copy YELLOW- Signal Restoration Copy

7221 Orangewood Avenue

Garden Grove, CA 92841 Phone#: (714) 763-4153 / Fax : (714) 276-0607

Contractor’s License # : 986693

Job #: 0916-030MIST

COMMERCIAL PROJECT AGREEMENT AND WORK AUTHORIZATION

This Commercial Project Agreement and Work Authorization (“Agreement”) is entered into on Monday,

September 12, 2016, between Signal Restoration West, LLC, dba Signal Restoration Services, whose address is 7221 Orangewood Avenue, Garden Grove, CA 92841, Contractor’s License No. 986693 (“Signal”) and South Bayside Waste Management Authority #225 – Hilary Gans (“Customer”). The job site for the services to be performed is: 225 Shoreway Rd., San Carlos, CA 94070. This agreement is entered into in Garden Gove, CA. The person or persons whose signature appears on this Agreement represents and warrants, both personally and on behalf of the owner, that such person is duly authorized to execute this Agreement.

1. Description/Scope of Work. Customer is the property owner, manager, tenant and/or responsible representative who hereby authorize Signal to provide the services listed:

Dry ice blast and clean the soot from the building followed by pressure washing and paitning as necessary.

Signal may hire or engage subcontractors to perform and complete all or any portion of the work. Signal is not required to perform to a state-of-the-art standard, but rather shall be required to conform to the state-of-practice standard. Customer will provide all water, electricity and other utilities necessary for Signal to perform its work.

2. Payment for Services. Customer agrees to pay Signal for all labor, materials, and equipment utilized to

mobilize, demobilize, commence, perform the work described above and invoiced in accordance with Signal’s T&M Rate Schedule dated January 1, 2016. Signal’s rate schedules do not include any applicable taxes, fees, or prevailing wages (if they do apply), which will be separately itemized and charged to Customer. If local prevailing wage rates apply for the labor categories utilized on this job, a Prevailing Wage Addendum will attach to this Agreement. Customer is liable for all work Signal performs, whether or not such work is covered by insurance. Payment is due within thirty (30) days from the date of each invoice unless Customer has already forwarded a bankable insurance draft to Signal for the portion of work invoiced by Signal. Customer agrees to pay their insurance deductible to Signal if their insurer deducts the deductible for any insurance draft for Signal’s work. Interest shall accrue on any payments not received on time at the rate of one and one-half percent (1.5%) per month. In the event of a dispute, Customer agrees to immediately pay all undisputed amounts due under this Agreement. Customer assigns to Signal their right, title and interest of the insurance proceeds invoiced under this Agreement to Signal. Customer also agrees to cooperate for required insurance or municipal inspections and to direct their insurer to make Signal a named party on all insurance drafts for the work performed.

3. Limitation of Liability. Neither the Customer not Signal shall be liable for any special, indirect, or

consequential damages. This limitation includes, but is not limited to, all claims for personal injuries, damage to property, and lost profits. Signal shall not be responsible or liable for pre-existing, existing, or post existing, sick building syndrome, building related illness, or complaints. In the case of wet floors, slippery surfaces from water, fire damaged, etc., the Customer will oversee and provide security and safety for the work area.

4. List of Documents to be Incorporated into the Agreement. The Standard Commercial Project Terms

and Conditions of Signal in effect as of the date of this agreement (which have been provided to Customer and Customer has acknowledged receipt) are hereby incorporated by reference as though set forth at length. The Signal T&M Rates and Prevailing Wage Addendum (should prevailing wage rates apply). Should any term in the terms and conditions contained in the Standard Commercial Project Terms and Conditions contradict or conflict with the provisions set forth in this Agreement, the terms and conditions in this Agreement shall be controlling.

5. Authorization to Enter Into Agreement. The person or persons whose signature appears on this

Agreement represents and warrants, both personally and on behalf of the owner, that such person is duly authorized to execute this Agreement. If the party executing this Agreement is a tenant, manager, agent or interested third party, such party represents and warrants that he/she is authorized to sign on behalf of an absentee property owner during an emergency, if the property owner is not present at the time of the emergency.

6. Attorney’s Fees and Costs. The parties agree that in an action for a breach of this Agreement, that the

Prevailing Party will be entitled to Reasonable Attorneys' Fees, costs and expert witness fees in addition to any other relief to which that party may be entitled. Venue will be in a court of competent jurisdiction. Customer By: ___________________________________ Its: ___________________________________ Date: ___________________________________

Signal Signal Restoration West, LLC, dba Signal Restoration Services By: ___________________________________ Its: ___________________________________ Date: ___________________________________

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 11B EXHIBIT A - p2


INFORMATIONAL ITEMS ONLY

Agenda Item 12


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 12A p - 1

STAFF UPDATE

To: SBWMA Board Members From: Farouk Fakira, Finance Manager Date: September 22, 2016 Board of Directors Meeting Subject: 2016 Finance and Rate Setting Calendar

Recommendation This is an informational report and no action is necessary.

Summary The purpose of this staff report is to keep the Board and Member Agency staff informed on the schedule of important financial and rate setting events in 2016. This staff report is updated as necessary and included in the Board packet each month. Schedule of Finance, Contractor Compensation and Rate Adjustment Activities in 2016: January 2016

Approval of FY14/15 audited Financial Statement. (Completed) February 2016

Mid-Year review of FY15/16 Operating Budget. (Completed) March 2016

Recology submittal of the unaudited 2015 Revenue Reconciliation Report. (Submitted) April 2016

Review of Preliminary16/17 SBWMA Budget at April 28, 2016 Board meeting. (Completed) Approval of unaudited calendar year financial statement for bond reporting requirements. (Completed) Approval of the revenue transfer from reserves for calendar year 2015. (Completed)

June 2016

Review and approval of Final FY16/17 SBWMA Operating Budget at June 26, 2016 Board meeting. (Completed) Recology’s 2017 Compensation Application due to the SBWMA and Member Agencies (June 15). (Received) SBWMA and Member Agency comments are due to Recology on its 2016 Compensation Application (June 29).

(Completed) SBWMA issues a letter requesting feedback from all Member Agencies on estimated 2017 Member Agency fees

(e.g., franchise fees) to be included in their 2017 solid waste rates. (Completed) July 2016

Board approval of Recology and SBR Financial Systems Audit Report. (Completed) SBR's 2017 Compensation Application due to the SBWMA (July 1). (Received) Recology revised 2017 Compensation Application due to SBWMA & Member Agencies (July 22). (Received) SBWMA issues the following reports to the Board and Member Agency staff for review and comment:

o Estimated 2016 and 2017 residential and commercial base revenue. (Completed) o Estimated collected tonnage for 2016 and 2017. (Completed) o Residential rates vs cost analysis. (Completed)


SBWMA BOD PACKET 09/22/2016 AGENDA ITEM: 12A p - 2

o Estimated residential revenue changes due to cart migration (i.e., lost revenue) by Member Agency since July 2015. (Completed)

o Summary of 2017 Member Agency fees to be used in the 2017 cost projections based on Member Agency feedback. (Completed)

August 2016

SBWMA issues Draft Report Reviewing Recology’s 2017 Compensation Application, recommended total Revenue Requirement, and Rate Adjustment (August 12). (Completed)

SBWMA issues the Draft Report Reviewing SBR’s 2017 Compensation Application (August 15). (Completed) Comments due back from Member Agencies on draft Reports Reviewing Recology’s & SBR’s 2017 Compensation

Application (August 26). (Received) September 2016

SBWMA issues Final Report Reviewing Recology’s 2017 Compensation Application including the recommended total Collection Rate Adjustment for 2017. (September BOD Packet).

SBWMA issues Final Report Reviewing SBR’s 2017 Compensation Application. (September BOD Packet). Approval of the SBR 2017 Compensation Application (September 22 BOD Meeting). Approval of the Recology 2017 Compensation Application and total recommended Revenue Requirement

(September 22 BOD Meeting). September – December 2016

Member Agencies issue Prop. 218 notice and approve final 2017 solid waste rates. November 2016

SBWMA issues report to Board on recommended January 1, 2017 Shoreway tip fee adjustments (includes calendar year 2016 & 2017 SBWMA financial projection with assumed tip fee and cash reserve balances).



STAFF REPORT To: SBWMA Board Members From: Farouk Fakira, Finance Manger Date: September 22, 2016 Board of Directors Meeting Subject: Check Register for July and August 2016

Recommendation This is an informational item only and no action is required. This report was requested by the Board members. Summary The purpose of this report is to provide transparency to the Board and the public on the actual spending by the SBWMA. All payments made by check issued in July and August 2016 are listed on the attached report for review. Analysis The SBWMA has a contract with the City of San Carlos for accounting services including the issuing of all payments and deposit of all receipts. In accordance with the City of San Carlos’ policies, checks are normally issued every two weeks. All SBWMA invoices are approved for payment by the program manager and then by the Executive Director or Finance Manager. Total A/P spending for July was $4,207,384.08 and for August was $2,919,398.02 for a total of $7,126,782.10 for the two months as detailed in Attachment A. Certain ACH transactions such as payroll and some benefit payments are drawn directly from the bank and are therefore not included in these A/P reports. If you have any questions on this, please contact Cyndi Urman or Farouk Fakira. The format of the check registers is limited to what is available from the city’s MUNIS accounting system. Attachments: Attachment A – July and August 2016 Check Registers


________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/08/2016 10:37 lchen

ICITY OF SAN CARLOS IA/P CASH DISBURSEMENTS JOURNAL S070816

CASH ACCOUNT: 5000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO CHECK RUN

7138 07/08/2016 EFT Invoice: 616057-SB.R

7139 07/08/2016 EFT Invoice: 2601- 0005

7140 07/08/2016 EFT Invoice: INV-2650

INVOICE DTL DESC 3 AARONSON DICKERSON COHN & LANZONE 616057 SB.R 06/27/2016 s070816

BOARD COUNSEL 3,536.16 S0113010 520312 BOARD COUNSEL

5982 FIRST STUDENT-SAN MATEO 2601- 000 5

3,556.99 50113010 522718

CHECK 7138 TOTAL:

06/29/2016 S070816 SHOREWAY ENVIRONMENTAL ED. CENTER

EDUCATION CENTER OPERATIONS

CHECK 7139 TOTAL:

1495 GIGANTIC I DEA STUDIO INV-2650 04/11/2016 S070816 MFD OUTREACH

4,307.57 S0113010 520604MF001 PUBLIC EDUCATION/OUTREACH/WORK

CHECK 7140 TOTAL:

7141 07/08/2016 EFT 7624 KBA DOCUSYS INC INV446039 06/20/2016 S070816 Invoice: INV446039

7142 07/08/2016 EFT Invoice : 16634A

7143 07/08/2016 EFT Invoice: 855485

7144 07/08/2016 EFT Invoice: 46032989

7145 07/08/2016 EFT I nvoice: 10792

OFFICE EQUIPMENT 137.40 S0113010 520215 OFFICE EQUIPMENT COSTS

6809 PRECISE PRINTING & MAILING 16634A

3,047.82 S0113010 520604

4688 RISK STRATEGIES COMPANY 855485

44,899.00 S0113010 520710

CHECK 7141 TOTAL:

06/17/2016 S070816 HHW OUTREACH

PUBLIC EDUCATION/OUTREACH/WORK

CHECK 7142 TOTAL:

07/01/2016 S070816 PROPERTY INS 1 QTR INSTALLMENT

INSURANCE SHOREWAY

CHECK 7143 TOTAL:

5662 ROBERT HALF MANAGEMENT RESOURCES 46032989 06/21/2016 S070816 RATE REVIEW

2 ,420.00 S0113010 520307 RATE REVIEW (HFH)

CHECK 7144 TOTAL:

725 CITY OF SAN CARLOS 10792 06/20/2016 S070816 UTILITIES

2,248.02 S0113010 520107 UTILITIES & PHONE

IP 1 lapcshdsb

NET

3,536.16

3,536.16

3,556.99

3,556.99

4 , 307 . 57

4,307.57

137.40

137.40

3,047.82

3,047.82

44,899.00

44,899.00

2,420.00

2,420.00

2,248.02

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/08/2016 10:37 lchen

JCITY OF SAN CARLOS JA/P CASH DISBURSEMENTS JOURNAL S070816

CASH ACCOUNT: S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO

INVOICE DTL DESC

CHECK RUN

7146 07/08/2016 EFT Invoice: 2016-05

7147 07/08/2016 EFT Invoi ce: IN90510507

7148 07/08/2016 PRTD Invoice: SBW-15-02

7149 07/08/2016 PRTD Invoice: 061316- 7146

7150 07/08/2016 PRTD Invoice: 21648040

7151 07/08/2016 PRTD Invoice: 64557

CHECK 7145 TOTAL:

5512 SOUTH BAY RECYCLING LLC 2016-05 06/15/2016 S070816

3892 T324 INC

SHOREWAY ENVIRONMENTAL CENTER MRF 3RD PARTY PROCESSING FEE DISPOSAL & PROCESSING COSTS DISPOSAL & PROCESSING COSTS BUYBACK PAYMENTS

-33,636 . 91 S0113010 480033 36,796.32 S0113010 522713

-41,304.13 S0113010 522713 72,651.54 s0113010 522717

2,224.17 S0113010 520207 20,666.66 S0113010 520202SHORE

1,576,153.01 S0113010 522712

IN90510507

2,949.75 S0113010 520338

EQUIPMENT CHARGES BANK FEES AND SERVICES OPERATOR COMPENSATION SBR

CHECK 7146 TOTAL:

07/01/2016 S070816 WEBSITE HOSTING & MAINT.

WEBSITE SUPPORT

CHECK 7147 TOTAL:

7225 ANAERGIA SERVICES LLC SBW-15'-02 06/30/2016 S070816 LONG RANGE PLAN

7 ,021. 63 S0113010 520340 LONG RANGE PLAN

CHECK 7148 TOTAL:

776 AT&T 061316-7146 06/13/2016 5070816 5HOREWAY FACILITY COST

436.05 S0113010 522714 SHOREWAY FACILITY COST

CHECK 7149 TOTAL:

5412 BIRCH COMMUNICATIONS 21648040 06/20/2016 5070816 UTILITIES & PHONE

630.15 50113010 520107 UTILITIES & PHONE

CHECK 7150 TOTAL:

7504 E-RECYCLING OF CALIFORNIA 64557 06/17/2016 S070816 SHRED EVENT - HILLSBOROUGH

321.00 50113010 522719 SHRED EVENT SVC5 (PASS THRU)

CHECK 7151 TOTAL:

I P 2 Japcshdsb

NET

2,248 . 02

1,633,550.66

1,633,550.66

2,949.75

2,949 . 75

7,021 . 63

7 ,021. 63

436.05

436.05

630.15

630. 15

321.00

321.00

________________________________________________________ SBWMA BOD PACKET 09/22/2016



!CITY OF SAN CARLOS 07/08/2016 10:37 lchen IA/P CASH DISBURSEMENTS JOURNAL S070816

CASH ACCOUNT: S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO

INVOICE DTL DESC

CHECK RUN

7152 07/08/2016 PRTD 4477 GUARDIAN - BETHLEHEM 00748845-JULY 16 07/01/2016 S070816 Invoice: 00748845- JULY 16 JULY 2016 PREMIUM

7153 07/08/2016 PRTD Invoice: 5801

1,283.83 S0113010 512850 BENEFITS - GUARDIAN LIFE

CHECK 7152 TOTAL:

7523 INFLOW COMMU NICATIONS 5801 06/22/2016 S070816 GOLD SUPPORT

1, 582.80 S0113010 520215 OFFICE EQUIPMENT COSTS

CHECK 7153 TOTAL:

7154 07/08/2016 PRTD 7802 KBA DOSUSYS INC Invoice: 3819784

3819784 06/25/2016 S070816 OFFICE EQUIPMENT COST

7155 07/08/2016 PRTD Invoice: 103063

7156 07/08/2016 PRTD Invoice: 15-7963-R2

Invoice: 15- 7963- 4

503.38 S0113010 520215 OFFICE EQUIPMENT COSTS

233 NATURAL SETTINGS CORPORATION 103063

510.00 S0113010 520201

CHECK

07/01/2016 OFFICE SUPPLIES

OFFICE SUPPLIES

CHECK

7154 TOTAL:

S070816

'••

7155 TOTAL:

7764 RC BENSON & SONS INC 15-7963-R2 05/24/2016 S070816 SHOREWAY MAINTE NANCE

2,574.73 50113010 522714 SHOREWAY FACILITY COST

RC BENSON & SONS I NC 15-7963-4 05/24/2016 S070816 MRF CANOPY & SHOREWAY FACILITY COST

33,071.23 52251000 570300SF061 FACILITIES IMPROVEMENTS 15,848.59 S0113010 522714 SHOREWAY FACILITY COST

CHECK 7156 TOTAL :

7157 07/08/2016 PRTD 1688 REDWOOD CITY CHAMBER OF COMMERCE 3496 07/01/2016 S070816 Invoice: 3496 MEMBERSHIP DUE FY 7/1/16-6/30/17

375.00 50113010 520501 PROFESSIONAL DUES & MEMEBERSHS

CHECK 7157 TOTAL:

7158 07/08/2016 PRTD 7285 UNITED HEALTH CARE 0040847654 07/01/2016 S070816 Invoice: 0040847654 JULY 2016 HEALTHCARE PYMT

2 , 854 .3 5 S0113010 512830 BENEFITS -MEDICAL

I P 3 lapcshdsb

NET

1 ,283.83

1,283.83

1,582.80

1,582.80

503.38

503.38

510.00

510.00

2,574.73

48,919.82

51,494.55

375.00

375.00

2,854.35

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/08/2016 10:37 l chen

!CITY OF SAN CARLOS JA/P CASH DISBURSEMENTS JOURNAL S070816

NUMBER OF CHECKS 21

TOTAL PRINTED CHECKS TOTAL EFT ' S

CHECK 7158 TOTAL:

*1"' CASH ACCOUNT TOTAL '~**

COUNT AMOUNT

11 10

----67,012 . 74

1, 700,653.37

*'''' GRAND TOTAL ***

!P 4 !apcshdsb

2,854.35

1,767,666.11

1,767,666.11

CP_....¥-,~

ARP_.__,...___

EFT_:----

Email __ _

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/19/2016 14:09 1 chen

!CITY OF SAN CARLOS IA/P CASH DISBURSEMENTS JOURNAL S071916

CASH ACCOUNT: S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE !NV DATE PO

INVOICE DTL DESC 7162 07/19/2016 WI RE 2223 THE BANK OF NEW YORK MELLON TRUST AUG 2016 2009A 07/18/2016

Invoice: AUG 2016 2009A AUG 2016 2009A BOND PYMT

CHECK RUN

343,571 .85 S011 114467 INVESTMENT BNY 2009AB INTEREST

CHECK 7162 TOTAL:

7163 07/19/2016 WIRE 3622 WELLS FARGO PAYMENT REMITTANCE CT 062716 06/ 27/2016 Invoice : 062716 CREDIT CARD PAYMENT

9 . 09 S0113010 520201 OFFICE SUPPLIES

CHECK 7163 TOTAL:

NUMBER OF CHECKS 2 *** CASH ACCOUNT TOTAL ***

COUNT ----~AM....;.O::..:U::.;.N;_:_T

TOTAL WIRE TRANSFERS 2 343,580.94

""** GRAND TOTAL *"" ''

CP

ARP

EFT

Email

IP 1 lapcshdsb

NET

343' 571.85

343,571.85

9.09

9.09

343,580.94

343,580.94

j

V_

~ ,,

, / ' '

PREPARED BY: 0 " / /c._ DATE:.¥-C'( /!), APPROVED BY: ev;r DATE::J 1 (4/r ~ ~-UNDG TRANSrERRt:D BY DATE: __ _

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 16 : 46 ctam I

CITY OF SAN CARLOS A/ P CASH DISBURSEMENTS JOURNAL

CASH ACCOUNT : SOOO 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME VOUCHER INVOICE INV DATE PO CHECK RUN

INVOICE DTL DESC

7177 07 / 21 / 2016 VOID 4477 GUARDIAN - BETHLEHEM 00 748845 - JULY 16 07 / 01/2016 Invoi c e: 00748845 - JULY 16 JULY 2016 PREMIUM

- 1,283.83 S0113010 512850 BENEFITS - GUARDIAN LIFE

CHECK 7177 TOTAL:

7189 07/21/2016 VOID 7285 UNITED HEALTH CARE 0040847654 07/01/2016 Invoice: 0040847654

- 2,854.35 S0113010 ~12830

NUMBER OF CHECKS

JULY 2016 HEALTHCARE PYMT BENEFITS - MEDICAL

CHECK 7189 TOTAL:

2 *** CASH ACCOUNT TOTAL ***

COUNT AMOUNT

TOTAL VOIDED CHECKS 2 4, 138.18

*** GRAND TOTAL ***

lp 1 apcshdsb

NET

- 1,283.83

- 1,283.83

-2,854.35

-2,854.35

- 4,138.18

-4,138.18

Email, _ __ _

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 lchen

!CITY OF SAN CARLOS IA/P CASH DISBURSEMENTS JOURNAL

CASH ACCOUNT: S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO CHECK RUN

INVOICE DTL DESC 7164 07/21/2016 EFT 5556 BFI OF CALIFORNIA INC 4227-0000444$1 06/30/2016 S072116

Invoice: 4227-000044451 DISPOSAL OX JUNE 2016 762,483.02 S0113010 522713 DISPOSAL & PROCESSING COSTS

BFI OF CALIFORNIA INC 4227- 000044512 06/30/2016 S072116 Invoice: 4227-000044512 OX TIPPER MAINTENANCE

1,064.33 S0113010 522716 MAINTENANCE ON TIPPER OX MTN

CHECK 7164 TOTAL:

7165 07/21/2016 EFT 152 BROWNING FERRIS IND OF CA 4278-1000002529 05/31/2016 S072116 Invoice: 4278-1000002529 DISPOSAL PROCESSING

230,601.26 S0113010 522713 DISPOSAL & PROCESSING COSTS

BROWNING FERRIS IND OF CA 4278- 1000002620 06/30/2016 S072116 Invoice: 4278-1000002620 DISPOSAL

7166 07/21/2016 EFT Invoice: 0494

7167 07/21/2016 EFT Invoice: 2277


CHECK 7165 TOTAL:

8061 LANALERT, INC. 0494 07/12/2016 S072116 IT SERVICES

6,471.51 S0113010 520334 IT SUPPORT

CHECK 7166 TOTAL:

1278 LOCAL GOVERNMENT SERVICES 2277 06/30/2016 S072116

- 14,500.00 S0113010 520306 678.00 S0113010 512810 466.67 S0113010 512830 946 . 33 S0113010 520337

11,683.12 S0113010 520306 172.12 S0113010 512801

1,675.00 S0113010 512830 134.93 S0113010 512850

26.16 S0113010 512850 20.44 S0113010 512850 23.36 S0113010 512850 29.16 S0113010 512825

1.616.94 S0113010 512825 20.78 S0113010 512850

400.00 S0113010 511830 59.37 S0113010 520201 83.34 S0113010 520105

CONTRACT SVCS BY CLIFF FELDMAN AB939 PROGRAM STAFF BENEFITS - WORKERS COMP INS BENEFITS - MEDICAL CONSULTING CONTRACTS RGS/LGS AB939 PROGRAM STAFF BENEFITS - PAYROLL TAXES BENEFITS - MEDICAL BENEFITS - GUARDIAN LIFE BENEFITS - GUARDIAN LIFE BENEFITS - GUARDIAN LIFE BENEFITS - GUARDIAN LIFE BENEFITS - RETIREMENT EMPLOYER BENEFITS - RETIREMENT EMPLOYER BENEFITS - GUARDIAN LIFE SALARIES - CAR ALLOWANCE OFFICE SUPPLIES CELL PHONES .

CHECK 7167 TOTAL:

IP 1 lapcshdsb

NET

762,483.02

1,064.33

763,547.35

230,601.26

211,926.14

442,527.40

6,471.51

6,471 . 51

3,535.72

3,535.72

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 l chen


CASH ACCOUNT: SOOO 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO CHECK RUN

7168 07/21/2016 EFT Invoice: 7891

Invoice: 7873

Invoice: 7890

Invoice: 7895

7169 07/21/2016 EFT Invoice: 46139234

invoice: 46084304

Invoice: 46186417

7170 07/21/2016 EFT Invoice: 198304

7171 07/21/2016 EFT Invoice: 198303

Invoice: 10794

Invoice: 10803

INVOICE DTL DESC

3089 R3 CONSULTING GROUP INC 7891 07/01/2016 S072116 BRR ORDINANCE SUPPORT

2,500 . 00 S0113010 520508 RECYCLING PERMIT EXPENSE

R3 CONSULTING GROUP INC 7873 07/01/2016 S072116 FINANCIAL AUDIT

3 ,640.00 S0113010 520309HCM01 BUSINESS CONSULTANT (HFH)

R3 CONSULTING GROUP INC 7890 07/01/2016 S072116 COMMERCIAL OUTREACH

1 , 380.00 S0113010 520604COE01 PUBLIC EDUCATION/OUTREACH/WORK

R3 CONSULTING GROUP INC 7895 07/07/2016 S072116 FRANCHISE ADMIN

4,375.00 S0113010 520309HCS02 BUSINESS CONSULTANT (HFH)

CHECK 7168 TOTAL:

5662 ROBERT HALF MANAGEMENT RESOURCES 46139234 07/06/2016 S072116 RATE REVIEW

1 , 815.00 S0113010 520307 RATE REVIEW (HFH)

ROBERT HALF MANAGEMENT RESOURCES 46084304 06/28/2016 S072116 RATE REVIEW

2,420.00 S0113010 520307 RATE REVIEW (HFH)

ROBERT HALF MANAGEMENT RESOURCES 46186417 07/12/2016 S072116 RATE REVIEW

1,936.00 S0113010 520307 RATE REVIEW (HFH)

CHECK 7169 TOTAL:

725 CITY OF SAN CARLOS 198304 07/05/2016 S072116 ACCOUNTING SERVICES

34,987.50 S0113010 520310 ACCOUNTING SERVICES

CHECK 7170 TOTAL:

725 CITY OF SAN CARLOS 198303 07/01/2016 S072116 ACCOUNTING SVCS

34 ,132.50 S0113010 520310 ACCOUNTING SERVICES

CITY OF SAN CARLOS 10794 06/29/2016 S072116 BANK FEES

374.33 S0113010 520202 BANK FEES AND SERVICES

CITY OF SAN CARLOS 10803 06/30/2016 S072116 POSTAGE

IP 2 lapcshdsb

NET

2,500.00

3,640.00

1, 380. 00

4,375.00

11, 895.00

1,815.00

2 , 420 .00

1,936.00

6,171.00

34,987.50

34,987.50

34,132 . 50

374.33

74.56

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 lchen


CASH ACCOUNT: SOOO 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME

CITY OF SAN CARLOS Invoice: 10799

INVOICE

74.56 S0113010 520204

10799

INV DATE PO

INVOICE DTL DESC PRINTING AND POSTAGE

06/30/2016 RENT

4,455.61 S0113010 520203 RENT

CITY OF SAN CARLOS 79950613 07/05/2016 Invoice: 79950613 RENT

4,570.56 S0113010 520203 RENT

CHECK

7172 07/21/2016 EFT 5558 ZANKER ROAD RESOURCE MANAGEMENT L 201606382 06/30/2016 Invoice: 201606382 DISPOSAL PROCESSING COST

202,848.46 S0113010 522713 DISPOSAL & PROCESSING

ZANKER ROAD RESOURCE MANAGEMENT L 201605390 05/31/2016 Invoice: 201605390 DISPOSAL PROCESSING COST

203,930.72 S0113010 522713 DISPOSAL & PROCESSING

CHECK

7173 07/21/2016 PRTD 88 READYREFRESH BY NESTLE 06G0028452035 07/08/2016 Invoice: 06G0028452035 OFFICE SUPPLIES

2.92 S0113010 520201 OFFICE SUPPLIES

CHECK RUN

S072116

S072116

7171 TOTAL:

S072116

COSTS

S072116

COSTS

7172 TOTAL:

S072116

CHECK 7173 TOTAL:

7174 07/21/2016 PRTD 5326 ASCENT ENVIRONMENTAL INC 16010051.01-1 07/12/2016 S072116 Invoice: 16010051.01-1 EAR'S 2015 MA REPORTS

7175 07/21/2016 PRTD Invoice: 061604

7176 07/21/2016 PRTD Invoice: 9157758658

Invoice: 9157758666

5,040.00 S0113010 520311 CIWMB ANNUAL REPORTS

CHECK 7174 TOTAL:

5640 BIO FUEL SYSTEMS INC 061604 07/01/2016 S072116 DISPOSAL


CHECK 7175 TOTAL:

655 GRAINGER 9157758658 06/30/2016 S072116 LED LIGHTING

48,765.26 S2251000 570300SF068 FACILITI ES IMPROVEMENTS

GRAINGER 9157758666 06/30/2016 S072116 LED LIGHTING

4,112.93 S2251000 570300SF068 FACILITIES IMPROVEMENTS

IP 3 lapcshdsb

NET

4,455.61

4,570.56

43,607.56

202,848.46

203,930.72

406,779.18

2 . 92

2.92

5,040.00

5,040.00

8 , 437.95

8 , 437.95

48 , 765.26

4,112.93

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 l chen



INVOICE DTL DESC

GRAINGER 9159666652 06/30/2016 S072116 Invoice: 9159666652 LED LIGHTING


GRAINGER 9158666660 06/30/2016 S072116 Invoice: 9158666660 LED LIGHTING


CHECK 7176 TOTAL:

7177 07/21/2016 PRTD 4477 GUARDIAN - BETHLEHEM 00748845 - JULY 16 07/01/2016 S072116 Invoice : 00748845-JULY 16 JULY 2016 PREMIUM

7178 07/21/2016 PRTD 1991 MULTIBAG Invoice: 053712

1,283.83 S0113010 512850 BENEFITS - GUARDIAN LIFE

CHECK 7177 TOTAL:

0 53712 06/30/2016 S072116 COMMERCIAL RECYCLING CONTAINERS

15,050. 00 S0113010 520604COE02 PUBLIC EDUCATION/OUTREACH/WORK

CHECK 7178 TOTAL:

7179 07/21/2016 PRTD 5557 RECOLOGY BLOSSOM VALLEY ORGANICS- 160630 07/05/2016 S072116 Invoice: 160630 DISPOSAL

7180 07/21/2016 PRTD 6667 RG CREATIONS INC Invoice: 14090


CHECK 7179 TOTAL:

14090 07/11/2016 S072116 SHOREWAY FACILITY COST

656.50 S0113010 522713 DISPOSAL & PROCESSING COSTS

CHECK 7180 TOTAL:

7181 07/ 21/ 2016 PRTD Invoice: 101690

694 SAN CARLOS CHAMBER OF COMMERCE 101690 07/13/2016 S072116

297.00 S0113010 520501 PROFESSIONAL DUES & MEMBERSHIPS

PROFESSIONAL DUES & MEMEBERSHS

CHECK 7181 TOTAL:

7182 07/21/2016 PRTD 680 SAN MATEO COUNTY-HR DEPT SBWMA- FY1601 06/29/2016 5072116 I nvoice: SBWMA- FY1601 EMPLOYEE RECRUITMENT

4 , 010.00 S0113010 520328 EMPLOYEE RECRUITMENT/HR SUPPO

IP 4 Japcshdsb

NET

2,099 .97

28,043.46

83 '021. 62

1,283.83

1,283 . 83

15,050.00

15,050.00

156,168.48

156,168.48

656.50

656 . 50

297.00

297.00

4,010.00

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 l chen


CASH ACCOUNT: S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME

7183 07/21/2016 PRTD 5875 SCAPES INC Invoice: 16406

7184 07/21/2016 PRTD 3022 SCS ENGINEERS Invoice: 0280611

SCS ENGINEERS Invoice: 00280610

7185 07/21/2016 PRTD 4519 SHRED- IT USA LLC Invoice: 9411361237

INVOICE INV DATE PO CHECK RUN

INVOICE DTL DESC CHECK 7182 TOTAL:

16406 06/30/2016 S072116 SHOREWAY MAINTENANCE


CHECK 7183 TOTAL:

0280611 06/30/2016 S072116 CLIMATE REGISTRY

2,280.00 S0113010 520608 CLIMATE CHANGE POLICY OPTIONS

00280610 06/30/2016 S072116 FRANCHISE ADMIN

1,864.00 S0113010 520309HCS02 BUSINESS CONSULTANT (HFH)

CHECK 7184 TOTAL:

9411361237 07/01/2016 S072116 OFFICE SUPPLIES

117.30 S0113010 520201 OFFICE SUPPLIES

CHECK 7185 TOTAL:

7186 07/21/2016 PRTD 3474 SLOAN VAZQUEZ LLC SBWMA-066 07/ 07/2016 S072116 Invoice: SBWMA- 066 COLLECTION SVCS

7187 07/21/2016 PRTD 8062 SURE- CLOSE INC. Invoice: 2029

11,265.00 S0113010 520309HCM01 BUSINESS CONSULTANT (HFH) 18,775.00 S0113010 520309HCS02 BUSINESS CONSULTANT (HFH)

CHECK 7186 TOTAL:

2029 07/12/2016 S072116 MFD ORGANICS CONTAINERS

14,220.00 S0113010 520604COE02 PUBLIC EDUCATION/OUTREACH/WORK

CHECK 7187 TOTAL:

7188 07/21/2016 PRTD Invoice: 045-164974

44 TYLER TECHNOLOGIES INC 045-164974 07/01/2016 OFFICE SUPPLIES

OFFICE SUPPLIES

S072116

250.00 S0113010 520201

CHECK 7188 TOTAL:

I P 5 lapcshdsb

NET

4,010.00

315.00

315.00

2,280.00

1,864.00

4,144.00

117.30

117.30

30,040.00

30,040.00

14,220.00

14,220.00

250.00

250.00

________________________________________________________ SBWMA BOD PACKET 09/22/2016



07/21/2016 13:55 l chen

ICITY OF SAN CARLOS IA/P CASH DISBURSEMENTS JOURNAL


INVOICE DTL DESC

7189 07/21/2016 PRTD 7285 UNITED HEALTH CARE 0040847654 07/01/2016 S072116 Invoice: 0040847654 JULY 2016 HEALTHCARE PYMT

2,854.35 S0113010 512830 BENEFITS - MEDICAL

CHECK 7189 TOTAL:

7190 07/21/2016 PRTD 5533 WM CURBSIDE LLC 0000324-2960- 7 07/01/2016 S072116 Invoice: 0000324-2960- 7 HHW COLLECTION SVCS

54,844.04 S0113010 522710 HHW COLLECTION SERVICE

NUMBER OF CHECKS 27

TOTAL PRINTED CHECKS TOTAL EFT'S

CHECK 7190 TOTAL:

*** CASH ACCOUNT TOTAL ***

COUNT ____ __:._Ac...cMO.:..U:.:.N.;..:_T

18 9

380 ,7 52 .99 1' 719' 522. 22

*** GRAND TOTAL ***

I P 6 lapcshdsb

NET

2,854.35

2,854.35

54,844.04

54 ,844.04

~~~\7 EFT

Ern Iii__,'---' 0~~~2-

?REPARED~ DATE:~!~ APPROVED BY: --~ DATE: ]f2-!/.t ~ =!Ji iOS TRANSFEf3fi~E;.:9 BY DATE· 7jujt Y:,

~~~ !l!!-rfl_6 Pr Ck\ <; f I 'fJ"OV[ . - ·1 fC )

________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/04/2016 15:17 l chen



7191 08/04/2016 EFT Invoice: 716055-SB R

INVOICE DTL DESC 3 AARONSON DICKERSON COHN & LANZONE 716055-SB R 07/26/2016 S080416

6/28/ 16 - 7/25/ 16 PROFESSIONAL SERVICES 1,518.75 S0113010 520312 BOARD COUNSEL

CHECK 7191 TOTAL :

7192 08/04/2016 EFT 5556 BFI OF CALIFORNIA INC 4227-0000044151 05/31/2016 S080416 Invoice : 4227-0000044151 DISPOSAL PROCESSING COST MAY 2016

779 , 924.60 S0113010 522713 DISPOSAL & PROCESSING COSTS

CHECK 7192 TOTAL:

7193 08/04/2016 EFT 7624 KBA DOCUSYS INC INV453698 07/ 18/ 2016 S080416 Invoice: INV453698

7194 08/04/2016 EFT Invoice: ADV 9- 2016

7195 08/04/2016 EFT Invoice: 062816

7196 08/ 04/2016 EFT Invoice: 46236385

7197 08/04/2016 EFT Invoice: 10846

OFFICE EQUIPT CONTRACT 104.08 S0113010 520215 OFFICE EQUIPMENT COSTS

1278 LOCAL ~OVERNMENT SERVICES ADV 9-2016

14,500.00 S0113010 520306

5446 RECOLOGY SAN MATEO COUNTY 062816

55,422.00 50113010 520340

CHECK 7193 TOTAL :

07/25/2016 S080416 ADVANCE FOR SEPT 2016 SERVICES

AB939 PROGRAM STAFF

CHECK 7194 TOTAL:

06/28/2016 S080416 9/28/ 15- 11/20/15 SPLIT BODY PILOT PROG

LONG RANGE PLAN

CHECK 7195 TOTAL:

5662 ROBERT HALF MANAGEMENT RESOURCES 46236385 07/19/2016 5080416 WE 071516 D' AMATO, F

2,420.00 S0113010 520307 RATE REVIEW (HFH)

CHECK 7196 TOTAL:

725 CITY OF SAN CARLOS 10846 06/30/2016 S080416 JUNE 2016 WELLS FARGO BANK FEES

382.37 S0113010 520202 BANK FEES AND SERVICES

IP 1 lapcshdsb

NET

1,518.75

1,518.75

779 , 924.60

779,924.60

104 .08

104 .08

14,500 .00

14,500 .00

55,4 22.00

55,422.00

2,420.00

2 , 420.00

382.37

CITY OF SAN CARLOS 10858 06/30/2016 S080416 2,304.20 I nvoice: 10858 APR-JUN 16 LIBRARY UTILITY & JANITORIAL CHARGES

2 ,304.20 50113010 520107 UTILITIES & PHONE

CITY OF SAN CARLOS 10855 06/30/2016 S080416 2,093.41 Invoice: 10855 JAN- MAR 2016 LIBRARY UTILITY & JANITORIAL CHARGES

________________________________________________________ SBWMA BOD PACKET 09/22/2016



ICITY OF SAN CARLOS 08/04/2016 15:17 lchen IA/P CASH DISBURSEMENTS JOURNAL


INVOICE DTL DESC 2,093.41 S0113010 520107 UTILITIES & PHONE

CHECK 7197 TOTAL:

7198 08/04/2016 EFT Invoice : 2016- 06

5512 SOUTH BAY RECYCLING LLC 2016-06 06/30/2016 S080416

7199 08/04/2016 PRTD 776 AT&T Invoice : 6505967146704-071316

JUN - 35,583 . 23 s0113010 480033

36,297 . 97 S0113010 522713 - 38,698.16 S0113010 522713 80,293.03 S0113010 522717

2,224.17 S0113010 520207 52,115.68 S0113010 522714 19 , 176 . 12 S0113010 520202SHORE

1,554,195.00 S0113010 5227~2

2016 SHOREWAY OPERATIONS MR F 3RD PARTY PROCESSING FEE DISPOSAL & PROCESSING COSTS DISPOSAL & PROCESSING COSTS BUYBACK PAYMENTS EQUIPMENT CHARGES SHOREWAY FACILITY COST BANK FEES AND SERVICES OPERATOR COMPENSATION SBR

CHECK 7198 TOTAL:

6505967146704-07131607/13/2016 s080416 JUL 13 THRU AUG 12 MONTHLY SERVICE


CHECK 7199 TOTAL:

7200 08/04/2016 PRTD 5412 BIRCH COMMUNICATIONS 21874762 07/20/2016 S080416 Invoice: 21874762 7/ 21/16 THRU 8/20/16 SERVICES

630.15 S0113010 520107 UTILITIES & PHONE

CHECK 7200 TOTAL:

I P 2 lapcshdsb

NET

4,779.98

1,670,020.58

1,670,020 . 58

436.95

436.95

630.15

630.15

7201 08/04/ 2016 PRTD 2204 CAW Invoice: 39TH ANNUAL CAW

39TH ANNUAL CAW 07/27/2016 S080416 2,000.00

7202 08/04/2016 PRTD 8089 CELINE YANG I nvoice: INTER SUMMER 2016

7203 08/ 04/2016 PRTD 655 GRAINGER Invoice : 9172675507

SPONSORSHIP OF 39TH ANNUAL CAW BIRTHDAY PARTY 2,000.00 S0113010 520511 SPONSORSHIP AND DONATIONS

CHECK 7201 TOTAL: 2,000.00

INTER SUMMER 2016 06/30/2016 S080416 500 .00 INTERNSHIP SUMMER 2016 STIPEND

500.00 S0113010 522718 EDUCATION CENTER OPERATIONS

CHECK 7202 TOTAL: 500.00

9172675507 07/21/2016 S080416 6,969 . 16 SHOREWAY LEO LIGHTING


________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/04/2016 15:17 l chen



7204 08/04/2016 PRTD 5928 FAUSTINA MUTUTA Invoice: 072716 FM

INVOICE INV DATE PO CHECK RUN

INVOICE DTL DESC CHECK 7203 TOTAL:

072716 FM 07/27/2016 S080416 REIMB ED CENTER SUPPLIES

65.55 S0113010 522718 EDUCATION CENTER OPERATIONS

NUMBER OF CHECKS 14


COUNT

6 8

CHECK 7204 TOTAL:

*** CASH ACCOUNT TOTAL *'"'

AMOUNT -------10' 601.81

2,528,689.99

*** GRAND TOTAL ***

I P 3 lapcshdsb

NET

6,969 .16

65.55

65.55

2,539,291.80

2,539,291.80

/

CP v , ARP 1/

j

EFT v Email . ~ .. . .

~ ?REPAR~;;-?[;;~~·:·: APPROVED BY: 0:;{) _DATE: ~'-f/( Y

FUND~~~~'8 DATE:5l4:;fj_{ \-' .

.f\Ck\ \:'~fl<>oo I . ~ T rp;j;i

________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/18/2016 16:50 l chen



7206 08/18/2016 EFT 1419 THE OFFICE CITY Invoi ce: IN-1372570

THE OFFICE CITY Invoice: IN- 1372933

77.37

261. 58

INVOICE INV DATE

INVOICE DTL DESC I N-1372570 08/02/2016

OFFICE SUPPLIES S0113010 520201 OFFICE SUPPLIES

IN-1372933 08/03/2016 OFFICE SUPPLIES

S0113010 520201 OFFICE SUPPLIES

CHECK

7207 08/18/2016 EFT Invoice: 46286143

5662 ROBERT HALF MANAGEMENT RESOURCES 46286143 07/26/2016 WE 072216 D'AMATO, F

PO

2,420.00 S0113010 520307 RATE REVIEW (HFH)

7208 08/18/2016 EFT Invoice : 79951201

CHECK

725 CITY OF SAN CARLOS 79951201 08/01/2016 AUG 2016 LIBRARY RENT

4,570.56 S0113010 520203 RENT

CHECK

IP 1 lapcshdsb

CHECK RUN NET

s081816 77.37

S081816 261.58

7206 TOTAL: 338.95

S081816 2 , 420.00

7207 TOTAL: 2,420.00

S081816 4,570.56

7208 TOTAL: 4,570.56

7209 08/18/2016 PRTD 5326 ASCENT ENVIRONMENTAL I NC 16010051.01-2 07/ 28/ 2016 3262 S081816 8,236.25 Invoice: 16010051.01- 2 JUL 1-JUL15, 2016 PROFESSIONAL SERV OF EARS

8,236.25 S0113010 520311 CIWMB ANNUAL REPORTS

CHECK 7209 TOTAL:

7210 08/18/2016 PRTD Invoice: 1000328872

6226 COSCO FIRE PROTECTION INC 1000328872 07/14/2016 S081816

7211 08/18/2016 PRTD 7802 KBA DOSUSYS INC Invoice: 3873766

3,850.00 S0113010 522714 FIRE SPRINKLER & FOAM ANNUAL I NSP

SHOREWAY FACILITY COST

CHECK 7210 TOTAL:

3873766 07/25/2016 S081816 JULY 16 OFFICE EQUIP RENTAL CHARGES

503.38 S0113010 520215 OFFICE EQUIPMENT COSTS

CHECK 7211 TOTAL :

7212 08/ 18/2016 PRTD 7177 S GRONER ASSOCIATES INC 1807 08/10/ 2016 S081816 Invoice: 1807 OUTREACH

444 .50 S0113010 520604HHWUW PUBLIC EDUCATION/OUTREACH/ WORK 2 ,922 .96 S0113010 520340 LONG RANGE PLAN

S GRONER ASSOCIATES INC 1773 08/11/2016 1961 S081816

8,236.25

3,850.00

3,850.00

503.38

503.38

3,367.46

5,080.00

________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/18/2016 16:50 lchen


CASH ACCOUNT : S000 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE INV DATE PO CHECK RUN

INVOICE DTL DESC Invo1 ce: 1773 AB 1826 OUTREACH

5,080.00 S0113010 S20604COE01 PUBLIC EDUCATION/OUTREACH/WORK

CHECK 7212 TOTAL:

7213 08/18/2016 PRTD 680 SAN MATEO COUNTY- HR DEPT SBWMA- FY1601 06/29/2016 S081816 Invoice: SBWMA- FY1601 EMPLOYEE RECRUITMENT

7214 08/18/2016 PRTD Invoice: 16542

5875 SCAPES INC

7215 08/18/2016 PRTD 3334 SERVICE PRESS INC Invoice: 47093

4 , 010 .00 S0113010 520328 EMPLOYEE RECRUITMENT/HR SUPPO

CHECK 7213 TOTAL:

16542 07/ 31/2016 S081816 JULY 2016 SHOREWAY MAINT


CHECK 7214 TOTAL:

47093 07/29/2016 S081816 OFFICE SUPPLIES

344 . 58 S0113010 520201

. .

NUMBER OF CHECKS 10


OFFICE SUPPLIES

COUNT

7 3

CHECK 7215 TOTAL:

~** CASH ACCOUNT TOTAL **~

AMOUNT -------25,880.67 7,329 .51

*~* GRAND TOTAL ***

IP 2 lapcshdsb

NET

8,447 .46

4,010 . 00

4,010.00

489 . 00

489.00

344.58

344.58

33,210.18

________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/23/2016 09:43 lchen



INVOICE DTL DESC 7216 08/23/2016 WIRE 2223 THE BANK OF NEW YORK MELLON TRUST SEPT 2016 2009A 08/ 22/2016

Invoice: SEPT 2016 2009A SEPT 2016 2009A BOND PYMT 343,626.04 S011 114467 INVESTMENT BNY 2009AB INTEREST

CHECK 7216 TOTAL:

NUMBER OF CHECKS 1 CASH ACCOUNT TOTAL ***

COUNT AMOUNT -------

TOTAL WIRE TRANSFERS 1 343,626.04

*** GRAND TOTAL ,,.,*

IP 1 lapcshdsb

NET

343,626 .04

343,626 .04

343 ,626.04

343,626.04

I I

CP \I ARP >< EFT ><, Email

________________________________________________________ SBWMA BOD PACKET 09/22/2016



08/25/2016 11:26 lchen

!CITY OF SAN CARLOS JA/P CASH DISBURS EMENTS JOURNAL

CASH ACCOUNT: SOOO 110020 WELLS FARGO BANK CHECK NO CHK DATE TYPE VENDOR NAME INVOICE

7217 08/2 5/2016 EFT I nvoice : 24199

3280 BETTER SOURCE LIQUIDATORS 24199

3 , 270.00 S0113010 520215

NUMBER OF CHECKS

TOTAL EFT'S

INV DATE PO CHECK RUN

IP 1 lapcshdsb

NET

INVOICE DTL DESC 08/ 24/2016 so82516 3. 270 .00

FURNITURE FOR EXECUTIVE DIRECTOR ' S OFFICE OFFICE EQUIPMENT COSTS

1

CHECK 7217 TOTAL: 3,270.00

*~ * CASH ACCOUNT TOTAL *** 3 , 270.00

COUNT AMOUNT - ------1 3,270.00

*** GRAND TOTAL *** 3 , 270.00

CP \1 ARP X, EFT \/ Email

f'REPARED 3~ATE:~ ?0( (r J\PPROVED BY: ~ DATE:~ZS/1 ..6 FUNDS TRANSFERR'l:O P.Y ~DATE: .i.(z->fi~e;

~S ~~\eroo~. TICT ~ Fjrj/)-t

STAFF UPDATE

Potential Future Board Agenda Items (Meetings at San Carlos Library Conference Room)

October 27, 2016

- Status Report on Zero Landfill Working Group - Approval of 2017 Merit Increase Pool for Unrepresented Employees - Quarterly update on Technical Consulting Contracts - Quarterly Status Update on Commercial Recycling Hauler Reporting System Ordinance - SBR Management Staffing Gaps Discussion - Discussion on whether Annual Operations and Financial Audits are needed annually - HHW Program Contract-renewal or cancellation

November 17*, 2016 (*Third Thursday due to Thanksgiving Holiday)

- Approval of 2017 Board Meeting Calendar - Approval of Executive Director’s Goals for FY16/17 - Update on Franchise Agreement Negotiations - SBWMA Legislative and Regulatory Priorities for 2017 - Approval of Executive Director’s Goals for 2017 - Approval of 2017 Public Education Plan - Discussion on VRS Contract with South Bay Recycling - Discussion on termination of Recology San Mateo County’s Third Party Ton Agreement with South Bay Recycling

December, 2016 – No Board Meeting

________________________________________________________ SBWMA BOD PACKET 09/22/2016

_____________________________________ ________________________________________________________ AGENDA ITEM: 12C - p1


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