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Assuming the City Council approves the recommended ordinance, staff anticipates working with Stopwaste to identify any immediate actions. In addition, staff anticipates beginning the public information process to assure commercial accounts are aware of the new requirements and working cooperatively with PGS toward program implementation. Any specific cost impact will be address as part of the city's ongoing refuse rate review process with PGS. Also note the county's ordinance contains provisions allowing agencies to opt-out of Phase 2 that includes recycling organics and staff will be evaluating this option as information becomes available next year regarding requirements and opportunities. PGS Refuse Rate Review Update The City has an exclusive refuse collection and recycling franchise agreement (Franchise) with Pleasanton Garbage Service (PGS) that runs through June 30, 2019. PGS provides all residential and commercial collection services, including the separate collection of green waste and food scraps from residences. In accordance with the terms of the Franchise, PGS may request adjustments to refuse collection and recycling service rates if it provides detailed information supporting the adjustment. The City Council has the authority to approve or reject the PGS rate request. The last residential rate adjustment, which occurred in April 2009 and covered the period through March 2011, addressed both overall PGS operational increases and the implementation of the City-wide residential recycling program. At the time, rates were adjusted by approximately $6.53 month for 96-gallon customers and $3.93 month for 35-gallon customers. Commercial rates increased by approximately $6.07 month per yard of service. Commercial accounts were also adjusted by approximately 2% in January 2011 to cover the cost of the commercial recycling program. Overall since 2000, rates have generally been reflective of cost of living adjustments/CPI. City staff and the City's consultant, The Newpoint Group, Inc., have been meeting with PGS and the City Council's Subcommittee has met to discuss the appropriate adjustment. To date both sides have exchanged proposals, including the impact of Stopwaste's mandatory commercial recycling ordinance as discussed above. In addition, staff has met with business community representatives to discuss commercial recycling matters. Staff has also had discussions regarding the potential for extending the franchise beyond 2019, the potential further rate differential between large and small can users, exit strategies should the City choose to conduct a formal public bid process for refuse services, and the potential for CPI based increases for the remaining term of the franchise. In general, staff and PGS are agreeing to put additional effort outside of this rate review process to address financial issues related to a potential end to the franchise and alternative methods for determining refuse rates and company profits. Also, concerning modifying current rate differentials, staff and PGS intend to review this matter prior to the next rate adjust in March 2014 to analyze the impact of the Page 3 of 4