Item No. 3
Town of Atherton
CITY COUNCIL STAFF REPORT – CONSENT AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: GEORGE RODERICKS, CITY MANAGER
DATE: NOVEMBER 20, 2024
SUBJECT: APPROVAL OF THE SECOND AMENDMENT TO THE
FRANCHISE AGREEMENT BETWEEN THE TOWN OF
ATHERTON AND GREENWASTE RECOVERY, LLC
RECOMMENDATION
It is recommended that the Council approve the 2nd Amendment to the Franchise Agrement between the Town of Atherton and GreenWaste Recovery, LLC.
BACKGROUND
At the November 6 Study Session, the Council discussed various options to offset the contractual eleven percent (11%) compensation increase pursuant to the Franchise Agreement with GreenWaste Recovery, LLC (GWR) which translated to an eleven percent (11%) increase to ratepayers. The Council settled on a combined approach of a reduction of the Town’s ten percent (10%) franchise fee (a pass-through cost) to five percent (5%), an increase to full cost recovery for excess and blue bins, and an “effective” rate increase to ratepayers of six percent (6%).
The Council directed that staff work with GWR to effectuate an amendment to the Franchise Agreement to address the franchise fee and to work with GWR to facilitate the bin increases through the required Proposition 218 process.
ANALYSIS
The City Attorney’s Office crafted the attached Second Amendment to agreement which has been reviewed and accepted by GWR. The Franchise Agreement prescribes compensation increases for GWR. However, it does not prescribe the effective rate increase. This will need to be determined annually. The Second Amendment prescribes the increase for FY 2025 as reviewed by the Council at the November 6 Study Session. However, the Town and GWR will need to review contractual costs and other factors each year to determine the necessary effective rate increase. The Amendment builds in an Annual Rate Evaluation Meeting to address this.
The Proposition 218 process for the cost recovery on the excess and blue bins (effectively 2%) 2 nd Amendment to Franchise Agreement with GreenWaste Recovery, LLC NOVEMBER 20, 2024
will be processed in the early part of 2025. Notices will be released for the Public Hearing by December 2024.
FISCAL IMPACT
The Town receives approximately $420,000 a year from the ten percent (10%) franchise fee. These funds are considered General Fund revenues and are used for Town operations which includes capital improvement projects and street maintenance. As rates increase, revenue to the Town also increases. The estimated revenue loss to the Town through reduction of the franchise fee to five percent (5%) translates to approximately $210,000 in FY 2025/26 and $105,000 for the remainder of FY 2024/25.
GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area A – Maintain Fiscal Responsibility
• Goal Area F – Be Forward-Thinking, Well-Managed, and Well-Planned
POLICY FOCUS
Policy focus for this item is on the fiscal impact of a reduction in General Fund revenue and the use of that offset to reduce the effective rate for ratepayers.
PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission
ATTACHMENTS
1. Second Amendment to Agreement