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<br />Previous Processin2 Fees <br /> <br />From January to May 2009, the "gap" processing fees as calculated by Eureka totaled <br />approximately $6,200. This gap represents the amount of processing fees that were not covered <br />by revenue. Both parties have maintained their points of view on the processing fees in the <br />existing contract throughout the discussions and continue to do so. However, to keep the <br />discussion productive and moving toward a workable solution, both sides acknowledged the <br />other's perspective on the processing fees and the reasons for those perspectives. Since the City <br />and Eureka were focused on finding a workable solution moving forward, Eureka has agreed to <br />not pursue the processing fees they calculated prior to June 1, 2009. The proposed contract <br />amendment would apply to June services since that invoice would be received in mid-July. <br /> <br />Recvclin2 Bud2et Impact <br /> <br />The addition of processing fees in the renegotiated contract is likely to increase the cost to the <br />2009 recycling budget. The actual budget impact will depend on market prices in the remaining <br />portion of2009. To help provide some context for the potential budget impact, the fees and <br />revenues going back to the start of the contract in March 2008 were compared between the <br />existing and proposed contract. For the sake of discussion and comparison, this analysis includes <br />the processing fees calculated by Eureka in the existing contract. <br /> <br />In 2008, the City collected approximately $16,800 in revenue share. If the renegotiated payment <br />terms had been in place in 2008, the City would have collected approximately $18,200 or about <br />eight percent more revenue. Due to the decline in market prices, the City has not received any <br />revenue share in 2009. <br /> <br />The processing fees calculated by Eureka for January to May 2009 were $6,200. Under the <br />renegotiated contract, the processing fees would have been reduced to $3,700 for the same five <br />month period, which is about a 40 percent reduction. Since the beginning of the contract, the <br />City would have had net revenue of $10,600 under the existing contract. Based on the new <br />terms, the City would have had net revenue of$14,500 to date. <br /> <br />Contract Comparison: Revenue and Processing Fees <br />Year Existing Contract* Renegotiated Contract Change <br />2008 $16,800 $18,200 8% <br />2009 -$6,200 -$3,700 -40% <br />*assumes payment of processing fees for 2009 <br /> <br />In May 2009, Eureka calculated $1,070 in processing fees under the existing contract. However, <br />the City would have received $53 in revenue for May 2009 if the new terms had been in place. <br /> <br />Metro-inet\ardenhills\Admin\CouncilIAgendas & Packet Information 12009\06-29-09 - Regular Meeting - Eureka <br />Recycling Contract Amendment <br /> <br />Page 4 of5 <br />