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353 scheduled annual report and next year plan from Eureka originally scheduled for <br />354 tonight's meeting had been postponed. <br />355 <br />356 Based on City Council concerns raised at their meeting last night, Environmental <br />357 Specialist Johnson reviewed historical revenue sharing revenue for the city and <br />358 reductions from revenue in 2014 of $62,000 to approximately $1,000 in 2015. <br />359 While 2016 is showing a potential uptick after April, estimated at $7,000 at this <br />360 point, Mr. Johnson noted the variables seen in that commodity market. Mr. Johnson <br />361 reviewed existing revenue share provisions in the current three-year contract, <br />362 expiring the end of 2016, and the proposed plan and floor price provisions in the <br />363 proposed five-year contract starting in January of 2017. Mr. Johnson addressed <br />364 current and anticipated markets and risks for the city and Eureka based on contract <br />365 language and ongoing negotiations. Mr. Johnson noted the City Council's concerns <br />366 requesting continued negotiations to lower the city's risk while recognizing the <br />367 impacts for Eureka. For those interested in more detail, Mr. Johnson referred the <br />368 PWETC to the city website to view last night's City Council meeting for that <br />369 particular discussion. <br />370 <br />371 Member Lenz asked how many more negotiations could be accomplished before <br />372 the need arose to reissue a new Request for Proposals (RFP). <br />373 <br />374 Environmental Specialist Johnson opined those negotiations could remain <br />375 significant, with the city having until December 31, 2016 before the current contract <br />376 expires; and since Eureka owns the existing carts, it wouldn't prove too problematic <br />377 if negotiations weren't concluded by then, with an extension possible, even though <br />378 Eureka would basically have the city at their mercyas to what they could charge <br />379 for their services at that point. Mr. Johnson expressed assurance with the long-term <br />380 good working relationship with Eureka, and anticipated a favorable and timely <br />381 resolution. <br />382 <br />383 At the request of Chair Cihacek, Environmental Specialist Johnson confirmed that <br />384 for 2017 budget purposes, no revenue share had been projected; with the intent <br />385 going forward to use actual revenue share from the prior year to set customer rates <br />386 for the following year rather than the current use of projected revenue share in <br />387 setting those rates. Mr. Ryan noted with the new formula, City Council concerns <br />388 are if there were no floor structure in the contract, the city may have to pay Eureka, <br />389 creating a risk for the city if and when commodities markets drop. For instance, in <br />390 2015, under current contract language, Eureka had to absorb a loss of $34,000 when <br />391 the market dropped; and if under the proposed contract, the city would have shared <br />392 or absorbed the loss and been required to pay Eureka $22,000 instead. <br />393 <br />394 At the request of Member Wozniak, Environmental Specialist Johnson reviewed <br />395 the reserves currently available in the Recycling Fund, and efforts to keep the Fund <br />396 sustainable rather than continuing to dip into it to make a contract work. Mr. <br />397 Johnson advised that the intent was instead to have a contract and agreement in <br />398 place to reduce city risk as much as possible, ideally by building up the reserves <br />Page 9 of 20 <br />