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more of an educational experience. San Diego County estimated that it issued 280 warnings in the first year, with not a single one reaching the citation stage. Councilmember Sullivan asked what portion of the $100 million estimate could be attributed to Pleasanton. Mr. Wolf estimated $10 million based on 2008 waste tonnage and 2011 market prices. Councilmember McGovern asked if the demand exists for these recyclables that would potentially be captured. Mr. Wolf said "yes." He explained that average price of commodities has increased 57% in real dollars over the last decade. As the world population increases at massive rates and the populations of China and India become middle class populations, there is a tremendous demand for such materials. He explained that the trouble experienced when the bottom fell out of the global economy in the last quarter of 2008 really only affected the lowest quality commodities, which tend to result from centralized processing rather than source separated systems. He noted, however, that under the ordinance, it is not a violation to landfill something that has no market value and that in the event that the bottom were to fall out of the market again, these covered materials would no longer be covered and could go to landfill. Councilmember Cook-Kallio asked and Mr. Wolf confirmed that if adopted, the ordinance would allow the City to fully comply with relative state law requirements. Mr. Bocian continued his presentation of the staff report, which focused on the PGS rate review. He stated that the Council last approved a rate increase in 2009 to implement the residential recycling and voluntary commercial recycling programs, both of which have been operating for some time. The current proposed rate increase attempts to address inflation relative to the cost of doing business by PGS. Staff has also considered increasing the City's franchise fee from 1% to 2%, which is still significantly less than what is seen throughout the county and state. The last component of the increase relates to the benchmarking fee already discussed by Mr. Wolf, which would be a pass-through fee from PGS to ratepayers. Staff hopes to return to the Council in October or November with a recommendation regarding the proposed refuse rates. Vice-Mayor Thorne noted there were no speakers present to address this issue. Councilmember Sullivan asked and staff confirmed that they would make every attempt to bring this information before the Recycling Committee before it comes to the Council. Councilmember McGovern asked and Mr. Bocian confirmed that the City's ratepayers absorb the full cost of benefits for PGS employees. Mr. Bocian clarified, stating that personnel costs are an allowable expense under PGS' contract and any increase most likely has a direct impact on the allowable rate. However, PGS maintains separate books for its Pleasanton and Dublin operations and local ratepayers are not paying for the benefits received by workers covering other jurisdictions. He also noted that PGS, as is the case with any hauler in Alameda County, works in a relatively unionized environment. Councilmember McGovern disagreed with the practice of paying 100% of the benefits for the employees of a for-profit company and requested to see the rates for Dublin and Livermore before the Council makes its decision. City Manager Fialho said that it is very much the result of negotiations. PGS comes forward with a proposal every two to three years, which the committee reviews and negotiates if needed. In City Council Minutes Page 6 of 12 October 2, 2012