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the audit fees described below,with a remaining balance of at least$2,000,000.
<br /> "Unamortized Balance"shall mean the unamortized or undepreciated cost to the Collector and
<br /> CARL,as of June 30,2018,of equipment(as shown on Attachment A)used under the Current
<br /> Collection Agreement that was purchased prior to March 31,2017,as determined in accordance
<br /> with the Current Collection Agreement based on records prepared according to GAAP(which
<br /> will be$1,171,302).
<br /> 2. The Reserve will be determined,as follows:
<br /> a. Not later than January 1,2019,Collector shall submit to City its proposed calculation
<br /> of the Reserve along with its audited financial statement for the year ending June 30,
<br /> 2018.
<br /> b. Within 60 days of receipt,City shall review Collector's proposed calculation for
<br /> compliance with this Agreement,consistency with the audited financial statement as
<br /> well as Collector's corresponding books of account,and mathematical accuracy.
<br /> c. Following City's review of Collector's proposed calculation,City and Collector shall
<br /> meet for a period of up to 60 days to discuss any exceptions taken to the Collector's
<br /> proposed calculations.
<br /> d. The agreed upon calculations(or if no agreement is reached the City staff's
<br /> recommended calculations)shall be submitted to City Council for approval.
<br /> e. City Council shall act upon the submitted calculations within a period of 90 days
<br /> following City Council receipt thereof. Prior to taking action on the request,at least
<br /> one(1)noticed public hearing shall be held upon the calculations.
<br /> 3. The Reserve will be applied,as follows:
<br /> a. First,as a credit to the Deficit;
<br /> b. Second,if any Reserve remains following step a,as a credit to the Unamortized
<br /> Balance;
<br /> c. Third, if any Reserve remains following steps a and b,to Collector to reimburse it for
<br /> the special short period audit costs for Collector and CAM under Section 2 above;
<br /> d. Fourth,if any Reserve remains following steps a,b and c:
<br /> i. Up to$2,000,000,the entire remaining amount shall be transferred by the
<br /> Collector to the City.
<br /> ii. Following steps a,b,c and d.i.,if any Reserve remains,then 50%of the
<br /> remainder shall be transferred by the Collector to the City,and 50%shall be
<br /> shared with the Collector up to a maximum share to the Collector of
<br /> $130,145. For example: If,following step c there remains$2,130,000,the
<br /> City shall receive$2,065,000 and the Collector shall receive$65,000;or, if
<br /> $2,300,000 remains,then the City shall receive$2,170,000 and the Collector
<br /> shall receive$130,145.
<br /> e. It is the intent of the City to:
<br /> i. First,to the extent sufficient for such purpose,apply from the Reserve an
<br /> amount equal to 0.5%of the sum of the actual Gross Rate Revenues and
<br /> Transfer Station Revenues each rate year to supplement the 3.5%franchise
<br /> fees required under the New Collection Agreement;and, if any Reserve
<br /> remains,
<br /> ii. To mitigate future rate increases under the New Collection Agreement.
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