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publiceducationandcommunicationmaybeextremelydifficultaftermorethanadecadeof <br />educationontheimportanceofrecyclingpaper.Eurekawouldberesponsiblefortheeducational <br />materials,buttheCitywouldundoubtedlyreceiveconcernsfromresidents.Whilethiswould <br />preservetherevenuesharefromaluminum,thelong-termimpactsmaynotoutweighthelossof <br />paperrecyclingforresidents. <br />InEureka'sMarch23,2009,lettertotheCity,theyproposedacontractamendmenttochange <br />therevenueshareformula(AttachmentB).Therevisedformulaessentiallyeliminatestheir <br />processingfeebutalsoeliminatestheCity'sabilitytocollectrevenueshareinthefuture.Based <br />onEureka'sreadingofthecontract,thisoptionremovestheunpredictabilityandriskfromthe <br />recyclingbudgetandprogram.Itistruethatthisoptionwouldaddpredictabilitytothebudget <br />andcapexpensesattheagreeduponmonthlyfee.TheCityhas23monthsremainingonthis <br />contract.Duetomarketconditions,itisquitepossiblethatrevenueshareforpaperwillnot <br />returnin2009andaluminumwillcontinuetotrenddownward.Paperhasnotcontributedto <br />revenuesharesinceNovember,andaluminumhasdroppedfromacontributionof$479in <br />Novemberto$266inFebruary(whichwasappliedbyEurekatothecostsofprocessingpaper). <br />Atthoseprices,therevenuesharecontributionperhouseholdwouldhaverangedfromtento20 <br />cents.WhilestaffandtheCityAttorneycontinuetodisagreewithEureka'sreadingofthe <br />contract,thismaybethemostviableoptiontocontinuethefullrecyclingservicethatresidents <br />areaccustomedtoandtominimizebudgetimpacts. <br />IftheCityandEurekacannotcometoanegotiatedconclusiononthisissue,Eurekawouldhave <br />theoptionofusingarbitration. <br />StaffcontactedthefourothersuburbancitiesthatcontractwithEureka:Roseville,Lauderdale, <br />Maplewood,andSt.LouisPark.EachcityhasadifferentcontractwithEureka.Roseville's <br />contractaddressesprocessingfeesinadifferentmannerandthisisnotanissueinRoseville. <br />Lauderdale'scontractdoesnotincludeprocessingfees.St.LouisParkisinasubstantially <br />similarsituationtoArdenHills,andtheyhavenotyetreachedaresolutionwithEureka. <br />Maplewood'scontractpaymenttermsisstructuredquitedifferentlythanArdenHillsandisnota <br />comparablesituation. <br />A.ContractAgreementbetweenCityofArdenHillsandEurekaRecyclingforRecycling <br />Services <br />B.March23,2009,LetterfromEurekaRecycling <br />CityofArdenHills <br />CityCouncilMeetingforMarch30,2009 <br />P:\PlanningIRecyclingGarbage\20091033009-Report-EurekaContractDiscussion.doc <br />Page4of4 <br /> <br />