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Mr. Steven Bocian, Assistant City Manager Page 3 August 22, 2013 Since 2000, City refuse collection rate changes were as follows: 2000,11% r July, 2004,12.28% June 2008, 12% 2009, 13% (residential) to 14.1 % (commercial) 2013,5%. In 2009, the City implemented a cart- based, single- stream residential recycling program. At that time the City set new refuse collection rates. City residential rates increased $1.09 for the 35- gallon service, from $28.04 to $29.13 per customer, per month. City residential rates for the larger 96- gallon cart size increased $6.53 from $28.04 to $34.57 per customer, per month. In 2013, the City implemented a 5 percent rate increase. The company had requested a 12.7 percent increase for 2013. During its review of the 2012 Application, the City disagreed with PGS on extent of a deficit balance, the amount of which PGS has effectively carried over into the current 2014 rate application. PGS submitted a Rate Application (Application) to the City on August 5, 2013. PGS is on a March 31 fiscal year end. The Application reflects three (3) years of financial data, including actual calendar year 2012 and 2013 data, and projected 2014 data. PGS requested a 12.15 percent rate increase. The City and PGS are currently in discussions regarding whether to amend and extend the current franchise agreement between the City and PGS. B. Project Work Plan We will perform the following seven (7) tasks: 1. Review Financial Audits and Financial Material Submitted by PGS In this task, we will review Application submitted by PGS. We will determine whether the Application is accurate. We will identify issues, concerns, or opportunities associated with financial information contained in the Application. We will evaluate whether PGS prepared the Application consistent with the terms specified in the Franchise Agreement. We will verify that the financial data, and required forms, are complete and consistent with the Application format and content requirements of the City. We will verify that sufficient documentation, and schedules, are included to support the information provided in the Application. If the City requests us to do so, we will notify PGS whether the Application is "complete" within 30 days of our receipt of the Application using a letter of completeness. We will then conduct a detailed review of the Application. Our review will consist of performing the following steps: Reconcile the Application to audited financial statements (if they are furnished with this Application)