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ARDEN HILLS CITY COUNCIL - March 30, 2009 4 unlikely to be any revenue share in 2009. What is before the Council tonight is a concern from Staff and the City Attorney about a disagreement with the contract language that relates to the payment terms with Eureka Recycling. This came to light in mid-February when Eureka Recycling contacted Staff about an error in the December 2008 invoice. Through that conversation it was determined that there were some discrepancies in the interpretation of the contract language. The payment terms are divided into two parts. The first part is the general compensation or monthly fee per household and the second part is the material sales and revenue share, which is section 6.2 of the contract. The second part states that the City and Eureka would split 50/50 any revenue received after the processing fee for paper and aluminum. It is the understanding of the City that the City would only retain revenue when the prices were above the processing fees and would not pay any more than the base monthly service fee if there was no revenue share. Eureka states that the City is responsible if there is a gap in the market price and the processing fee for paper and aluminum. Staff has not authorized payment of the processing fees at this time. It is also important to note that the City has not budgeted for these processing fees. We met with the City Attorney and Eureka Recycling to discuss the contract language and to come to some reasonable solution. He reviewed the three possible solutions that Staff had at this time including the possible downsides of each. He pointed out that at the March 13 meeting; Eureka did indicate that they may pursue Section 25 of the contract that allows them to declare a material economically unfeasible to collect. If they pursue this portion of the contract, residents would no longer be able to recycle paper and it would be left behind in the bins. Mayor Harpstead asked how the processing fees are determined. Community Development Director Lehnhoff stated that this was not explained in the contract. He had a brief discussion with Mr. Goodwin of Eureka Recycling about the processing fees. He had received a general answer. Staff had reviewed contracts that Eureka has with other cities and the processing fees vary considerably among the cities. Councilmember Holden asked how many tons of paper Eureka handles for the City each year. Community Development Director Lehnhoff stated that based on the current levels the yearly total would be about 450 tons per year. Councilmember Holden stated that the City does not want to loose paper recycling.