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• PGS may not enter into any discussions regarding the assignment of the Agreement for a period of at least three years. Any assignment is subject to the City Council's approval which may be approved or denied at its sole discretion. • PGS is required to secure all services required to meet its obligations under the Agreement, including material collection and transport, securing of landfill access, equipment acquisition and repair, billing and accounts receivable, customer service, reporting, etc. • The City will secure the services of an entity or entities to process all recyclable and organic material collected from the City by PGS during the term of this Agreement. Regarding the last above bullet, the current Franchise requires PGS to secure adequate sites to dispose of all refuse as well as, process and sell all recyclables and organics. However, PGS does not have and has expressed concern regarding its ability to obtain favorable costs for the processing of organics and PGS has agreed that it is more cost effective to process recyclables at a location other than the PGS transfer station with its low volume and relatively high costs of operation. As a result of these two issues, staff has agreed to conduct a public process to secure the required organics and recycling services. The outcome of this process will be that the City will have actual market rate costs for determining how these costs are factored into ongoing operating costs. In addition, once the City secures recycling process services, those elements of the Busch Road Transfer station currently used for processing recyclable materials will be available for other uses including the transfer of recyclables and organic materials to transfer vehicles. This contracting of recyclable materials processing will not however, impact the publics' access to the transfer station. PGS will be obligated to deliver the organics and recyclable material to the City contracted location as a provision of the Agreement. Next Steps Staff is recommending an amendment to the existing HF&H Consultants, LLC agreement in the amount of$149,600 to complete these negotiations and finalize agreement language ($35,000), conduct the bidding process ($99,600) to adjust the current rate structure and set rates to equal the new revenue requirement ($15,000). The next steps in the process towards a finalized new Franchise Agreement are: 1. Approve Agreement Language. Staff anticipates bringing the Agreement language forward to the Subcommittee for review in January of 2018 and to the City Council shortly thereafter for their review and approval. 2. Conduct Bidding Process. The City anticipates that the complete bidding process will take approximately 120 days to complete. Any proposed contract resulting from this process will be forwarded first to the Subcommittee and then to the City Council for its review and approval with the final Franchise Agreement. 3. Complete Rate Schedule. Based on the cost reductions agreed to by staff and PGS, staff anticipates a reduction of 13.3% to PGS' compensation based on current recyclables and organics processing costs. It is anticipated that recyclables processing costs resulting from the procurement will further lower PGS' compensation. However, future organics processing costs may increase from the existing costs due to an increasing demand for organics processing Page 4 of 5