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3. Conduct a public bidding process to secure the services of an entity (or entities) to process organic and recyclable material collected by PGS in the City of Pleasanton. 4. Authorize the Subcommittee to continue working with staff on a new collection rate schedule. FINANCIAL STATEMENT The costs for services from HF&H will be covered by the City's Measure D funds. BACKGROUND PGS has an exclusive Franchise with the City to collect, transport and dispose of refuse and collect and process recyclable material and organics produced and accumulated within the corporate limits of the City. When PGS first began servicing the City in the 1970's, (the current Franchise was awarded in 1989 but PGS serviced the City prior to the current agreement) the refuse operation consisted of dumping garbage from cans into a truck and transporting the material to a landfill. Since that time and in response to State regulations, the complexity of the operation has increased significantly involving the collection of multiple sized carts at the curbside with refuse, recyclable and organic material separated by customers, operating a material recovery facility to segregate recyclable materials, delivering and selling material to recyclers, arranging for the processing of organic material, arranging for the disposal of refuse at the landfill and complying with a broad range of state and regional requirements and administrative reporting. Staffs involvement has also increased significantly as it works to comply with state and regional reporting, service and outreach requirements. Customer expectations have also increased considerably specifically by demanding a range and quality of services in line with current collection rates and with various service options that meet individual needs. During the course of these changes, PGS has demonstrated its ability to meet community and City expectations. Based on PGS' history of meeting community expectations, the City Council Subcommittee and the City Council determined it appropriate to engage in negotiations with PGS prior to conducting a public bidding process for a new franchisee. The intent of this processhas been to determine if PGS could meet the City's current and future needs in a manner that is consistent with industry standards, with services and rates comparable to neighboring cities, with an increase in the franchise fee, and with PGS (rather than the ratepayers) assuming reasonable risks related to the cost of its operations. To assist with this determination and process, the City Council approved an agreement with HF&H Consultants, LLC, based on its significant local, state and national expertise and knowledge in refuse franchise development and administration. The Council concluded that if PGS could meet City goals, the City could eliminate the considerable cost of conducting a public franchise process and the potential customer issues related to transitioning to a new service provider. Staff entered this process with the following basic goals: City Goals for a New Collection Agreement • Obtain a state of the art service agreement consistent with best industry practices; • Obtain collection rate relief; • Transfer risk regarding any unexpected operating costs from the ratepayers to PGS; • Increase services to the community consistent with industry standards and adjacent communities; Page 2 of 5