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THE CITY OF I 7' r—EJ III II nim L£AS4NTONC CITY COUNCIL AGENDA REPORT March 20, 2018 City Manager TITLE: ADOPT RESOLUTION AUTHORIZING APPROVAL OF AGREEMENT WITH PLEASANTON GARBAGE SERVICE, INC. FOR SOLID WASTE, RECYCLABLE MATERIALS, AND ORGANIC MATERIAL SERVICES AND A RESOLUTION AUTHORIZING APPROVAL OF RATE RESERVE AGREEMENT WITH PLEASANTON GARBAGE SERVICE, INC. SUMMARY The City's exclusive refuse collection and recycling franchise agreement (Franchise) with Pleasanton Garbage Service (PGS) to provide all residential and commercial solid waste services, including the collection of refuse, recyclable material, green waste, food scraps, and construction and demolition material from residences and commercial accounts will expire on June 30, 2019. At the request of the City, on June 23, 2017, PGS submitted a proposal to the City for consideration of a new Franchise. Since that time, staff has reviewed the proposal and completed negotiations with PGS regarding the terms and costs of a new City Franchise (hereinafter referred to as "Agreement"). The Agreement with PGS meets staff and Council goals as outlined later in this report. During these discussions, staff has involved the City Council Refuse and Recycling Subcommittee (Subcommittee) comprised of Councilmembers Brown and Pentin for overall direction and specialized consultant services from HF&H Consultants, LLC and Management Partners for their expertise on this subject. The Agreement includes the cost of PGS processing organic and recyclable materials. Staff is working with HF&H to complete the bidding process for alternative cost effective and longer term arrangements for post-collection processing of organic and recyclable materials collected by PGS. Staff anticipates reporting the results of that process and recommendations to the City Council in late spring of 2018. This report will include not only the financial effects of the proposals for post-collection processing services but also the impact on PGS' costs to transfer the materials to the selected processing facilities. The negotiation with PGS regarding decreases in overall costs of services included extensive discussion of the use of the franchise rate reserve account which had a balance of approximately $4.28 million as of March 31, 2017. The parties agreed that the reserve would be used for two primary purposes. These include the payment of certain monies due to PGS with the remainder (anticipated to be in excess of$2 million dollars) to be transferred to the City to prefund 0.5 percent of the new franchise fee.