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File Number: 15-196 <br />(See Attachment A - ACI Memo). If the special rate increase is not approved, then the <br />viability of the company is at risk. If ACI cannot continue as the City's waste hauler, the City <br />will have to implement alternative measures, such as engaging in an emergency contract or <br />putting the franchise out to bid; it is highly likely that any measure would cause significant cost <br />Considerations <br />Staff concurs with the recommendations presented in the HF&H report (Attachment B), <br />including additional analysis to understand the impact of MRF costs on future rate <br />adjustments. Per the recommendations, the City should: <br />• Develop the methodology of how the labor adjustment for FY15-16 will be adjusted in <br />future years; <br />• Review the final terms of the ILWU collective bargaining agreement on the projections <br />provided by ACI for FY15-16 and determine the financial impact, if any, to the City; <br />• Request ACI to provide a schedule showing the annual cost of operating the MRF in <br />order to determine operational efficiency; <br />• Monitor ACI's financial ratios, especially for FY15-16, to see if the rate adjustments <br />from the various agencies caused improvements as expected; <br />• Review the commodity revenues obtained by ACI annually to verify they continue to <br />offset the processing costs for Mission Trails or any other new sources of tonnages <br />processed at the MRF; <br />• Address the current provisions for the sharing of commodity revenues to eliminate the <br />debt covenant element as prescribed in the 10th Amendment; and <br />• Review the rate adjustment established in the 11th Amendment to determine if the <br />revenue generated is in line with the amount required according to the loan <br />amortization schedule. <br />Previous Actions <br />On January 20, 2015 by Resolution No. 2015-010, the City Council approved 11th <br />Amendment to Alameda County Industries (ACI), Inc.'s Franchise Agreement <br />Applicable General Plan Policies <br />• Action 27.01-A: Source Reduction and Recycling Programs <br />• Action 27.01-C: Commercial and Multi -Family Residential Programs <br />• Action 27.01-D: Food Waste Recycling <br />ATTACHMENTS <br />Attachments to Staff Report <br />• Attachment A - Memo from Alameda County Industries <br />• Attachment B - HF&H Consultants, LLC Report <br />• Attachment C - Letter of Understanding between ACI and the ILWU, Local 6 <br />• Attachment D - Alameda County Rate Survey <br />City of San Leandro Page 4 Printed on 511212015 <br />