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processing or a payment. He confirmed sorting of recyclables would occur in other locations as these facilities have advantages in terms of economies of scale. Transportations costs to move them to other locations is offset by the benefits. Councilmember Pentin reported in the past, the City has not been able to use Measure D for organics or recyclables because of the length of terms. He asked whether the City will be able to use Measure D funds now, for these types of programs. Mr. Dolan reported the term of the agreement is longer than what Measure D regulations stipulate, but the City can request an exemption. In terms of recycling, Councilmember Pentin wondered about the effects of new regulations from China. Mr. Hilton addressed recycling commodities noting they go up and down all the time. Current prices are like what they were in 2005 and less than they were in 2011. The actions by China has revealed their growth is less than it has been, and they are looking for higher quality of materials. There have been some dislocations in the past as well as other problems, which have been short-lived, and most communities never had to adjust their rate as a result. Councilmember Narum asked whether staff has had discussions with PGS on how to community to new residents, and Mr. Dolan reported part of the agreement is an implementation plan highlighting all the new services, and she will work with PGS on a marketing plan. The City will partner with the to get the message out. Councilmember Olson asked regarding franchise fees and City Manager Fialho reported at least regionally, it varies between 7% and 10%. If the contracts the consultant negotiates on the City's behalf come in lower than what staff has estimated, staff would capture that as additional savings and will transfer that either to the Franchise Fee or to the rate base. It is a policy decision the subcommittee will address. Mayor Thorne wondered if PGS cannot handle recycling and organics, what makes staff think the City can do so? Mr. Hilton explained the marketplace is a competitive environment and the City, as a municipal agency, can direct flows and materials and companies owning these facilities have confidence in their ability to have a contract with the City they can enforce. Mayor Thorne wondered if the rates will go down or up and City Manager Fialho reported the rate schedule will be influenced and what Council may agree to, now, is a negotiated reduction in overall PGS expenditures of 13.3% as well as an additional 2% on the franchise fee. The City must transfer that savings into a rate structure. Mayor Thorne opened public comment. Jill Buck reported when she first moved to Pleasanton, there was single-stream recycling, and everything was thrown onto a belt and people picked through and separated waste from recycling. Since then a previous Council decided to go to a dual stream recycling program and introduce organics separation. In her job, she has visited transfer stations, landfills, and solid waste operations all over the country and stated she feels spoiled in Pleasanton, because PGS does such a great job at their transfer stations. She expressed appreciation to the City for working hard to keep PGS as its waste hauler, but voiced concerns with leaving their separation infrastructure, unutilized. She referenced Measure D funding and stated years ago, it was supposed to be used for recycling education and waste-diversion activities. She opined if $149,000 goes towards consulting fees but feared it will not improve the City's recycling rates or waste-diversion activities and suggested the City hire a Sustainability Director. City Council Minutes Page 4 of 10 December 19, 2017