City of Belmont Presentation of the Review of

City of Belmont Presentation of the Review of the Solid Waste Rates September 22, 2015 Presented by: Tom Gould and Shawn Koorn HDR Engineering, Inc.

Overview of the Presentation • Purpose of the study • Provide a brief overview of the Franchise Agreements and Amendments • Review of Recology’s calculated maximum rates (rate index) • Review the “Calculated Maximum Rates” – Schedule R and Q Rates 2

Overview of HDR’s Review • In 2010, Recology of San Mateo County (Recology) signed a franchise agreement with the City to provide solid waste collection and recycling services – Franchise agreement contains specific formulas for calculating the “maximum rates” for regularly scheduled and unscheduled service – Recology calculates the maximum rates for scheduled and unscheduled services and the City independently reviews the calculations – HDR annually reviews Recology’s calculations 3

Overview of the Franchise Agreements and Amendments 4

Overview of the Franchise Agreement and the Role of Recology and the City • Franchise agreement contains specific language and exhibits related to the development of the “maximum” rates for scheduled and unscheduled services • City establishes and adopts their own solid waste rates, but not to a level that exceeds the Contractor’s “Maximum Rates for Regularly Scheduled and Unscheduled Services” 5

Establishing the Maximum Rates for Service • Utilizes an “indexing” approach • Basic Formula/Components – Cost Indexing – Annually take the existing maximum rate that is in effect and multiply each rate by an “adjustment percentage” (cost index/CPI) – Migration Adjustment & Surcharge – No longer applies. Ended 2014. – Migration Recovery Surcharge – Will end in 2016. 6

Review of Recology’s Maximum Calculated Rates 7

Scheduled Services Recology’s Calculated Maximum Rate • On July 31, 2015 Recology provided a letter to the City with the Calculated Maximum Rates • The calculation indicates a maximum adjustment of 0. 90% over and above the 2015 regularly scheduled rates (i. e. less than a 1% adjustment) . 8 • HDR reviewed the details of this calculation to confirm its appropriateness

Understanding the Residential Bill Impact of the Adjustment ($/month) $/Month Change in the Bill by Adjustment Component . 9

Schedule R – Regularly Scheduled Service Maximum Solid Waste Rates • Rates are differentiated by type of customer, bin/cart size and pickups per week 1. 2. 3. 4. 5. 6. 7. 8. • 10 Residential Waste Carts (20 gallons to 96 gallons) Commercial Waste Bins (1 yard to 6 yards; 1 day to 7 days per week pickup) Commercial Organics Carts (20 gallons to 96 gallons; 1 day to 7 days per week pickup) Commercial Waste 3 Yard Compactor Solid Waste Compactor (per yard) Household Hazardous Waste (Per Multi-Family Living Unit) HDR found the Schedule R rates to be in compliance with the agreement

Schedule Q - Unscheduled Services Recology’s Calculated Maximum Rate • Schedule Q services are unscheduled • The Maximum Rate set forth in Schedule Q is also formula driven and uses the CPI – Schedule Q rates were adjusted 1. 622% • HDR reviewed the details of this calculation – HDR’s report provides the details and rates for each of the various Schedule Q services 11

Summary Conclusions • City has independently reviewed the Recology study – HDR has reviewed the study and concluded that the resulting maximum rates for 2016 were calculated in a manner consistent with the Franchise Agreement and Amendments – HDR would recommend that the City accept the Calculated Maximum Solid Waste Rates as submitted by Recology 12